Monday, September 2, 2013

David Blanchflower

House prices are booming again but the bust that’s bound to follow will cost us dear

A rise in rates would inevitably cause an immediate and deep house price crash

Posted by dill @ 08:00 AM (8601 views)
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6 thoughts on “David Blanchflower

  • “I was in the beautiful city of Charleston, South Carolina where the first shot was fired in the War of Independence over the weekend” Really?

    Any serious discussion of changes in wealth distribution would look at the top 1% or 0.1%.

    What is total property (or asset) wealth anyway, other than a number? It’s based on a relatively small number of sales, with a price at the margin unrealistically multiplied by the total number of units, and no deflator for bubble wealth. Then he talks of pension entitlement as wealth rather than as an unfunded liability.

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  • mark wadsworth says:

    And the good news is that longer term interest rates are continuing to tick upwards.

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  • how could 9 ‘independent’ economists in charge of inflation and stability do the following

    not raise interest rates in 2003/2004
    draw attention to lax bank lending
    put 645 items in inflation basket
    remove mortgages from basket in 2001

    its almost as if all they learned over the years went missing

    wonder why?

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  • thats NOTdraw attention to lax lending

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  • So spake Danny Blanchflower, on the MPC whilst Northern Rock were giving away 5x self cert BTL mortgages! The inability of these people to recognise their own contradictions is absurd. Meanwhile, Blanchflower talks about unsustainable house prices, but then doesn’t want any increases in interest rates. So that means yet more intervention by government – which is ultimately doomed to failure to try to keep house prices low whilst artificially depressing interest rates.

    Blanchflower continues to labour under the misapprehension that being an economist is a profession.

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  • “Interestingly, between 1995 and 2005, wealth inequality narrowed because of the rise in house prices – if they hadn’t risen, according to Hills et al, wealth inequality would have been largely unchanged. Those of course with little or no wealth were left behind while those with mortgages, those in middle age and those who were most highly qualified gained most from house price increases.”

    So the higher house prices rise, the more equal we will become? I suspect the opposite.

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