The impact of historic district designation on the prices of single-family homes in the oldest city in the United States,St. Augustine,Florida

This empirical investigation applies a hedonic pricing model to estimate how much historic district designation has influenced the sales price of single-family houses in the oldest city in the United States, namely, St. Augustine, Florida. There were sufficient data in this context to study a total of 4017 single-family houses for a 6-year period from 2008 to 2013. The semi-log and piecewise regression estimations reveal that the natural log of the sales price of a single-family house in the city of St. Augustine was positively affected by designation as national historic district in six of the seven districts, with robust results obtained for five of the districts. Moreover, the estimated premiums for historic designation were larger than those found in other similar studies, most of which were conducted prior to the Great Recession. This study also derives several other conclusions about the effects of recession variables, as well as other exterior characteristics, interior characteristics and spatial control variables, a number of which are not commonly explored in similar studies.     

美国房地产周期与经济衰退的可预测性研究

本文对房地产周期与收益率曲线反转对经济衰退的预测两个变量的联合预测进行了理论探讨和实证检验。实证结果表明,房地产周期和收益率曲线反转的联合预测力远大于单变量预测力。将本文实证结果应用于2006年以来经济数据的分析表明,从预测角度看美国经济将在2007-2008年间进入衰退。     

From conventional to unconventional monetary policies: The failure of the market‐maker of last resort

This paper analyses the new role of market‐maker of last resort openly assumed by central banks since the 2008 financial crisis revealed the increasing impact of noninterest‐income activities on banks' balance sheets. A brief review of the distinction between conventional and unconventional monetary policies shows that the inflexion point from lender of last resort to market‐maker of last resort is given by the extension of central bank intervention to other markets than the bank reserves markets. Herein, it is explained how the market‐maker of last resort role is as counterproductive as its predecessor in putting the economy back on track. We show that the main problem of both conventional and unconventional monetary policies is that they distort price signals, particularly asset prices, in their attempt to reignite economic growth. Instead of correcting cyclical fluctuations, the policies of the market‐maker of last resort prevent the cyclical divergences between financial and goods sectors from readjusting.     

Minsky’s financial instability hypothesis and the role of equity: The accounting behind hedge,speculative, and Ponzi finance

Hyman Minsky’s primary legacy to Keynesian macroeconomics involves two related features. He emphasized that real (market) analysis and financial (market) analysis should be analyzed together, not separately; and that the macro economy is inherently unstable (his “financial instability hypothesis”). He melded financial analysis and the “real” market economy to interpret cycles in economic activity. An economy in boom (euphoria, animal spirits) eventually runs out of steam, reaches a peak, and descends into recession. The recession after the Minsky-moment peak segues through several financial stages based on the financial conditions of individual firms; he termed these stages as hedge, speculative, and Ponzi finance. The fragility of the economy depends on the relative weights or importance of the economy’s firms in each of the three stages.     

Do interest groups reward politicians for their votes in the legislature? Evidence from the great recession

ABSTRACT

Interest groups lobby politicians in various ways to influence their policy decisions, especially, their voting decisions in the legislature. Most, if not all, of the studies on this issue examine ”pre-vote” lobbying activities of interest groups that occur before politicians vote in the legislature. In this paper, however, I examine ”post-vote” lobbying activities of interest groups that occur after politicians vote in the legislature. By using data on the amount of monetary contributions given by interest groups to the members of the U.S. House of Representatives who have served in the 109th (2005–06) through 111th (2009–10) Congress, I find evidence that voting in favour of the Emergency Economic Stabilization Act (EESA) of 2008, one of the most significant pieces of legislation and possibly the biggest government bailout in U.S. economic history, has increased the amount of monetary contributions that politicians receive from the interest groups in the financial sector after the passage of the EESA. I also discuss two reasons for such post-vote lobbying and find empirical evidence for one of them.     

Prozac for depressed states? Effect of mood on local economic recessions

This paper examines whether people's mood and optimism affect economic activity. We consider two sets of exogenous proxies for optimism that are unrelated to the economic environment: (1) weather (average temperature and cloud cover) and (2) sports and political optimism. We show that economic recessions are weaker and expansions are stronger in the United States where local individuals are more optimistic. Further, local optimism has a stronger impact on state‐level business cycles of smaller states and regions with low levels of risk sharing. In contrast, the incremental effects of local optimism are weaker in states where people are younger, more educated and sophisticated, and socially more connected. States with larger concentration of minority and urban population also exhibit lower sensitivity to variations in mood and optimism. Alternative explanations based on the state's industrial composition, tax environment, migration, seasonal affective disorder (SAD), oil shocks, and direct economic impact of weather cannot explain these findings.     

Reassessing the Relative Power of the Yield Spread in Forecasting Recessions

In this paper, we replicate the main results of previous research showing that the use of the yield spread in a probit model can predict recessions better than the Survey of Professional Forecasters. We investigate the robustness of their results in several ways: extending the sample to include the 2007‐09 recession, changing the starting date of the sample, using rolling windows of data instead of just an expanding sample, and using alternative measures of the “actual” value of real output. Our results show that the Rudebusch‐Williams findings are robust in all dimensions. Copyright © 2015 John Wiley & Sons, Ltd.     

Survey Evidence on Wage Rigidity and Unemployment: Sweden in the 1990s*

We document the results of a repeat survey, which updates Agell and Lundborg (1995) , on wage rigidity in a sample of 159 Swedish manufacturing firms, conducted during the severe Swedish recession of the 1990s. It is found that not even a prolonged period of very high unemployment and quite low inflation softened workers’ resistance to wage cuts. We discuss possible reasons for this. In addition, we report new evidence on underbidding, efficiency‐wage mechanisms, and unemployment persistence.     

Relationships between Financial Sectors’ CDS Spreads and Other Gauges of Risk: Did the Great Recession Change Them?

The objectives are to discern how the three financial sectors’ credit default swap (CDS) spreads interrelate to each other and with three other risks in terms of possible contagion, competition, interdependence and independence relations under the full sample and two subperiods: the 2007 Great Recession and the 2009 Recovery, and to assess the impact of QE1 on those risks in the second subperiod. The results indicate that the own and cross‐effects among the CDSs and the other risk measures are significant and mixed, but all in all contagion is dominant. The system has become less stable and less adjusting to the equilibrium in the first subperiod. QE1 in the second period decreases risks but increases inflationary expectations.