“Schiller, an economics professor at Yale, makes the point that houses shouldn’t rise in price at all.”
Tee hee, the gimmick is, in the long run, house prices-to-income ratios don’t rise at all. everything in between is just bubbles/busts.
Matthew
I’m mot sure about Schiller’s idea, at least as you state it. For homeowners it doesn’t really work because they couldn’t afford the margin payments if they went short and prices kept rising. And in general the ones we have at the moment such as the HPI futures don’t seem to have performed much of a useful signalling function, when they were launched in Jan 07 they forecast a rise of prices of about 2-3% in 2008.
How come the byline is “Richard Reeves”? Is that your pen name? Or is it a mistake?
I think he meant to link to this piece. Although the Polly review is also interesting.
Actually, I think “Richard Reeves” rocks. A much pseudonym than “Mr Eugenides”, certainly.
Ruben Reeves was a fine jazz trumpeter of the 30s. As if you care.
“Schiller, an economics professor at Yale, makes the point that houses shouldn’t rise in price at all.”
Tee hee, the gimmick is, in the long run, house prices-to-income ratios don’t rise at all. everything in between is just bubbles/busts.
I’m mot sure about Schiller’s idea, at least as you state it. For homeowners it doesn’t really work because they couldn’t afford the margin payments if they went short and prices kept rising. And in general the ones we have at the moment such as the HPI futures don’t seem to have performed much of a useful signalling function, when they were launched in Jan 07 they forecast a rise of prices of about 2-3% in 2008.