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Bust to boom: how UK central bank boosted births after 2008 crisis


btd1981
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https://www.bankofengland.co.uk/working-paper/2019/monetary-policy-and-birth-rates-the-effect-of-mortgage-rate-pass-through-on-fertility

This is the paper that the press have seized on.  It was published 20th December.  The MD are reporting this 'good news' story and it was mentioned on the BBC R4 news this morning.  Although the MD comments see it rather differently and point the finger directly at another possible cause that I doubt will be mentioned in the Guardian article.

I expect there is some confusion here between correlation and causation.

It is odd to think that policies that have resulted in a near doubling in the cost of shelter in many parts and at least 50% increase in most parts should result in families feeling prosperous and wanting to have more children.  I think we can all see this is self evident rubbish.  No mention of renters struggling to buy at the new grotesquely distorted high prices and putting off having children.  Orwellian.

 

 

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2 hours ago, spyguy said:

Gomrless economists.

The icnrease in birth rates was caused by tax credits giving a lucrative inventive to have kids, combined with  EE EUFOM, which poured into the UK, mainly for the same benefits.

Of course tax credits have an impact on fertility, but that

11 minutes ago, Wayward said:

I expect there is some confusion here between correlation and causation.

It is odd to think that policies that have resulted in a near doubling in the cost of shelter in many parts and at least 50% increase in most parts should result in families feeling prosperous and wanting to have more children.  I think we can all see this is self evident rubbish.  No mention of renters struggling to buy at the new grotesquely distorted high prices and putting off having children.  Orwellian.

They aren't saying that!

All they are saying is that the number of births was higher from 2008-2011 that it would otherwise have been, due to the cut in interest rates freeing up money amongst those with variable rate mortgages to spend more on children.

There are numerous other impacts on fertility, and numerous other impacts of interest rates, but this paper is just looking at one very narrow aspect in one very narrow time period.  Your points about tax credits and renters are totally valid, but just different points out of scope of the paper.

However, the working paper isn't "gormless" or "Orwellian", just very limited in scope.

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20 minutes ago, Wayward said:

https://www.bankofengland.co.uk/working-paper/2019/monetary-policy-and-birth-rates-the-effect-of-mortgage-rate-pass-through-on-fertility

This is the paper that the press have seized on.  It was published 20th December.  The MD are reporting this 'good news' story and it was mentioned on the BBC R4 news this morning.  Although the MD comments see it rather differently and point the finger directly at another possible cause that I doubt will be mentioned in the Guardian article.

I expect there is some confusion here between correlation and causation.

It is odd to think that policies that have resulted in a near doubling in the cost of shelter in many parts and at least 50% increase in most parts should result in families feeling prosperous and wanting to have more children.  I think we can all see this is self evident rubbish.  No mention of renters struggling to buy at the new grotesquely distorted high prices and putting off having children.  Orwellian.

 

 

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Like all monetary stimulus it's just pulling demand (births) forward, as the low interest rates caused inflation which is now suppressing births.

Plus quite a bit of that stimulus was captured by the 0.1%, and there's only so many babies even the most determined banker can pump out.

Edited by Dorkins
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19 minutes ago, Dorkins said:

Like all monetary stimulus it's just pulling demand (births) forward, as the low interest rates caused inflation which is now suppressing births.

Plus quite a bit of that stimulus was captured by the 0.1%, and there's only so many babies even the most determined banker can pump out.

The first point is very true.  Like I said above their study only looks at 2008 to 2011 and so if you look at a later time period it may be lower than otherwise.

however there will definitely be a lot of ordinary people, not just bankers, who chose to have say 3 children instead of 2 because they’ve had a decade of low mortgage payments.

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1 minute ago, scottbeard said:

however there will definitely be a lot of ordinary people, not just bankers, who chose to have say 3 children instead of 2 because they’ve had a decade of low mortgage payments.

Undoubtedly true, and probably more than offset by people younger than them having fewer babies, maybe some of them deciding not to have children at all. Basically the births have been transferred from the have nots to the haves.

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1 hour ago, Wayward said:

https://www.bankofengland.co.uk/working-paper/2019/monetary-policy-and-birth-rates-the-effect-of-mortgage-rate-pass-through-on-fertility

This is the paper that the press have seized on.  It was published 20th December.  The MD are reporting this 'good news' story and it was mentioned on the BBC R4 news this morning.  Although the MD comments see it rather differently and point the finger directly at another possible cause that I doubt will be mentioned in the Guardian article.

I expect there is some confusion here between correlation and causation.

It is odd to think that policies that have resulted in a near doubling in the cost of shelter in many parts and at least 50% increase in most parts should result in families feeling prosperous and wanting to have more children.  I think we can all see this is self evident rubbish.  No mention of renters struggling to buy at the new grotesquely distorted high prices and putting off having children.  Orwellian.

 

 

+1

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So, have there been baby booms in other European countrues, whove also had liw IRs?

Nope.

Thought so.

Its tax credits ffs.

Maybe they could drill down in those numbers and check how many parents are foreign and wgether the people having kids are dependents on  benefits for 30+ of their income.

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23 minutes ago, Dorkins said:

Undoubtedly true, and probably more than offset by people younger than them having fewer babies, maybe some of them deciding not to have children at all. Basically the births have been transferred from the have nots to the haves.

Agreed - and as this study only looks at the haves it’s not all the picture. 

18 minutes ago, spyguy said:

So, have there been baby booms in other European countrues, whove also had liw IRs?

Nope.

Thought so.

Its tax credits ffs.

Maybe they could drill down in those numbers and check how many parents are foreign and wgether the people having kids are dependents on  benefits for 30+ of their income.

You’re just continually missing the point. This study doesn’t look at people on tax credits it looks at people with variable rate mortgages.

separately you may well be right about tax credits.

however you don’t even have any data on whether low IRs impacted birth rates elsewhere - you’re just assuming they didn’t and assuming your explanation is right.

and it’s not about whether there’s a “baby boom” it’s about whether birth rates are higher than they otherwise would have been - in the UK it’s more That births didn’t decrease like they usually do in a recession not that they increased 

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