The Shortcomings of the Stimulus Plan

The Subprime Solution

The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do About It

Another Indicator of the Financial Crisis

A List a Landlord Doesn’t Want to Be On

Assorted

Two Ways to Revamp U.S. Housing Policy

Graph of lobbying and bailout funds

German economy: growth forecast 2009

Principles for reforming higher education in Australia: will Bradley be brave enough?

Challenges that the Recent Financial Market Turmoil Places on our Macroeconomic Modeling Toolkit

What's the difference between a good Ponzi scheme and a bad Ponzi scheme?

DIW-Präsident fordert Stopp von Konjunkturprognosen

The housing sector is in full correction in Spain

3. Housing sector adjustment takes time. Many new homes will still come onto the market, pressuring home prices. However, building permits and housing starts are falling quickly-presaging far less construction activity in the medium run.

4. By limiting the inventory of vacant homes, housing policies can facilitate adjustment:

* Policies to activate the rental market are welcome. Rentals absorb vacant homes, assist labor mobility, and allow vulnerable families to find shelter at moderate cost. Planned improvements in regulations and speeding up rent disputes are essential. Initial rental periods, currently five years, should be liberalized.
* Mortgage assistance to newly unemployed workers (to defer half their monthly payment for up to two years) is helpful in limiting foreclosures.
* However, the mission discourages building more subsidized homes. These add to inventory, and their markets are often distorted and untransparent with benefits not always reaching those intended. Means-tested income assistance for rentals is preferable to construction and home-ownership subsidies.

-Spain: 2008 Article IV Consultation - Concluding Statement of the Mission

Korea Fact of the Day

Korean household debt has reached 148 percent of disposable income, high by emerging market standards.

The debt of the Korean households reached 82 percent of GDP in 2007

Chain of Blame

Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis

Here's author's blog.