Category Housing
The Lucasian map is not the Hayekian territory
In defence of Lucas '72. Take any macroeconomic model of a market economy with inefficient aggregate fluctuations. In fact, take any economic model where something bad might happen. Assume that model is literally true. The people in that model are idiots.
The Wealth Curse — why we are almost always less wealthy than we think we are
Wealth is an expectation about the future. Absent a complete set of futures markets, our expectations won't aggregate up, because our plans for the future are interdependent and almost always mutually inconsistent. Other people aren't planning to do what fulfilment of our own plans requires them to do. Our plans are going to be disappointed, […]
How do we get from here to Armageddon?
This is essentially a rerun of this earlier post, which produced no answers I found convincing. It's provoked by Livio's recent post, which produced comments raising questions similar to one that I've been asking for many months now. The question is: what are the mechanics behind "there's a housing bubble in Vancouver" (it's always Vancouver) […]
What Does a Canadian Housing Bust Look Like?
Housing prices in Canada and the possibility of a burst housing bubble were back in the news during this past week. A report by Capital Economics said that housing prices in Canada could fall by as much as 25 percent over the next three years as a result of a loss in market fundamentals that […]
This is what a balance-sheet recession looks like, and it’s not pretty
I had never heard the expression "balance-sheet recession" before this recent episode, and it's time I got around to a comparison of the household balance sheets of the US and Canada. Of all my "Canada is not the US" posts, this is the one that makes me most grateful.
Canadian mortgage debt
I feel bad about writing too many abstruse theory posts. How many angels can dance on the head of a monetary pin? Here's something more practical. Think of it as a companion to Livio's post about Canadian house prices. Why would we worry if Canadian house prices are overvalued? One important reason (though not the […]
Are Canada’s Housing Markets Overvalued?
Bank of Canada Governor Mark Carney is going to be in Vancouver on Wednesday June 15th to deliver a speech on the country’s housing market. There is a lot of interest as to whether or not the housing market is overvalued so I thought I would take a look at housing prices and markets using […]
Garth Turner bleg
There's a job needs doing, but I'm not the best person to do it. Because I was never that good at variances and covariances and CAPM and stuff. One of you finance guys would be much better.
The house price fairy
The house price fairy visited me last night. She offered me three choices: she would instantly double all house prices; she would instantly halve all house prices; or she would leave all house prices the same. "You stupid fairy!" I replied. "Don't you know i already own this house, and I have no plans to […]
Liquidity and the housing market Phillips Curve
I think it is a stylised fact of the housing market that, on average, houses sell quickly when house prices are rising, and sell slowly when house prices are falling. (I am talking about house prices rising or falling relative to trend). There is a negative correlation between the rate of change of house prices […]
Worthwhile Canadian Initiative 
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