Why Land May Not Be the Smartest Place to Put Your Nest Egg

Buy land: They’re not making it anymore. That often repeated adage sounds like good financial advice.

But over the long run, it hasn’t been. Despite solid price increases over the last few years, land and homes have actually been disappointing investments. It’s worth considering why.

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The Overinflated Fear of Being Priced Out of Housing

Rising home prices set off fears that real estate will become even more expensive, making it impossible ever to buy a home in a given city.

It’s easy to understand how such worries spread, but the historical record suggests that these fears are generally exaggerated. Cities with steep price increases today will probably have much smaller upticks in the future. And for the most part, differences in price increases among cities are well explained by short-term variations in employment growth.

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Fighting the Next Global Financial Crisis

NEW HAVEN – What do people mean when they criticize generals for “fighting the last war”? It’s not that generals ever think they will face the same weapon systems and the same battlefields. They certainly know better. The error, to the extent that the generals make it, must operate at a more subtle level. Generals are sometimes slow to get around to developing plans and ordnance for those new weapon systems and battlefields. And just as important, they sometimes assume that the public psychology, and the narratives that influence the morale that is so important in achieving victory, is the same as in the last war.

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Listen Carefully for Hints of the Next Global Recession

Economists are good at measuring the past but inconsistent at forecasting future events, particularly recessions. That’s because recessions aren’t caused merely by concrete changes in the markets. Beliefs and stories passed on by thousands of individuals are important factors, maybe even the main ones, in determining big shifts in the economy.

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Is Russia’s National Character Authoritarian?

NEW HAVEN – Russia’s aggression against Ukraine and the Russian public’s acquiescence in direct government control of news media have many people wondering if Russians are predisposed to authoritarianism. It seems like a sensible question. But I have learned from experience that we have to be very careful about drawing conclusions about national character from isolated events.

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How Wage Insurance Could Ease Economic Inequality

Wage insurance may not be on your radar, but it should be. It helps people who have lost their jobs and cannot find new ones that pay as well. That assistance can reduce economic inequality while providing incentives for unemployed people to go back to work quickly.

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Popular Attitudes Towards Markets and Democracy: Russia and United States Compared 25 Years Later

By Maxim Boycko and Robert J. Shiller

We repeat a survey we did in the waning days of the Soviet Union (Shiller, Boycko and Korobov, AER 1991) comparing attitudes towards free markets between Moscow and New York. Additional survey questions, from Gibson Duch and Tedin (J. Politics 1992) are added to compare attitudes towards democracy. Two comparisons are made: between countries, and through time, to explore the existence of international differences in allegiance to democratic free-market institutions, and the stability of these differences. While we find some differences in attitudes towards markets across countries and through time, we do not find most of the differences large or significant. Our evidence does not support a common view that the Russian personality is fundamentally illiberal or non-democratic.

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