2013 nar issues conference economists' panel (february 2013)
DESCRIPTION
For those interested in NAR Chief Economist Lawrence Yun’s conversation with Christina Romer and Gregory Mankiw at the 2013 NAR Issues Conference, here is the PPT that was used.TRANSCRIPT
Economists’ Panel
Christina Romer vs. Greg Mankiw
Moderated by Lawrence Yun
NAR 2013 Issues Conference Dana Point, CA
February 15, 2013
Pending Home Sales Index
2007 - Jan
2007 - Jun
2007 - Nov
2008 - Apr
2008 - Sep
2009 - Feb
2009 - Jul
2009 - Dec
2010 - May
2010 - Oct
2011 - Mar
2011 - Aug
2012 - Jan
2012 - June
2012 - Nov
707580859095
100105110115
Homebuyer Tax Credit
Was the home buyer tax credit a success in stopping bleeding in housing?
Home Price Index
2000 - Jan 2001 - Oct 2003 - Jul 2005 - Apr 2007 - Jan 2008 - Oct 2010 - Jul 2012 - Apr100
120
140
160
180
200
220
Homebuyer Tax Credit
Home prices essentially stabilized after the tax credit after steep declines.
• Written in 1988
• “ … real housing prices will fall substantially over the next two decades.”
• “ … because the Baby Bust generation is now entering its house-buying years, housing demand will grow more slowly in the 1990s than in any time in the past forty years.”
THE BABY BOOM, THE BABY BUST,AND THE HOUSING MARKET
N. Gregory Mankiw and David N. WeilHarvard University
Will Baby Bust impact will be mitigated from population growth and immigration?
The Greatest Generation! From Poverty to Victory to Prosperity
Baby Boomer parents were the ‘Greatest’ and what role did the government play or not?
Soviet Joke
Pretend the ‘train is moving’ … led to complacency and eventual collapse
The Lost Generation ! (?)
Is America pretending we don’t have problems on entitlement obligations?
Federal Government Tax Revenue and Spending
1970 - Jan 1974 - Jan 1978 - Jan 1982 - Jan 1986 - Jan 1990 - Jan 1994 - Jan 1998 - Jan 2002 - Jan 2006 - Jan 2010 - Jan0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
Revenue Spending
12-month tally in $ million
Should deductions be limited to raise revenue or should spending be cut?
The Role of Government
• Reagan … Wanted Small Government– How? Run up big deficits …. this is the only way
for people to understand the need to restrain spending
• Obama … Wants Big Government– How? Run up big deficits … this is the only way for
people understand the need to pay higher taxes
Renter Households
1980 - Q1 1984 - Q2 1988 - Q3 1992 - Q4 1997 - Q1 2001 - Q2 2005 - Q3 2009 - Q425,000
27,000
29,000
31,000
33,000
35,000
37,000
39,000
41,000In thousands
Are we headed towards a Renter Nation?
Homeowner Households
1980 - Q1 1984 - Q2 1988 - Q3 1992 - Q4 1997 - Q1 2001 - Q2 2005 - Q3 2009 - Q450,000
55,000
60,000
65,000
70,000
75,000
80,000In thousands
Wealth Distribution (Federal Reserve data on median net worth)
Renter Owner$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
199820012004200720102014
2014 Forecast by NAR
Bubble Crash
Is Lawrence Summers right that hedge funds becoming owners while good renters are having great difficulty obtaining mortgages?
Bully or Smartest Person in the World?
Really, he’s a …
Monetary Policy by Federal Reserve (zero rate policy to 2015 ?)
20052006
20072008
20092010
20112012
2013 foreca
st
2014 foreca
st
2015 foreca
st0
1
2
3
4
5
6
Fed Funds %
Will loose monetary policy lead to future inflation?
Federal Reserve Balance Sheet from Quantitative Easing
1-Aug-0
7
7-Nov-0
7
13-Feb-08
21-May
-08
27-Aug-0
8
3-Dec-0
8
11-Mar-
09
17-Jun-09
23-Sep-09
30-Dec-0
9
7-Apr-1
0
14-Jul-1
0
20-Oct-
10
26-Jan-11
4-May
-11
10-Aug-1
1
16-Nov-1
1
22-Feb-12
30-May
-12
5-Sep-12
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
Total Assets
$ million
Will the Fed report losses in the future when interest rates rise?
Rising Renters’ and Homeowners’ Rent Growth (the biggest weight to Consumer Price Index)
2000 - Jan 2001 - Oct 2003 - Jul 2005 - Apr 2007 - Jan 2008 - Oct 2010 - Jul 2012 - Apr-1
0
1
2
3
4
5
Owners' Equivalent Rent Renters' Rent
Nearing 3%
3.8% tax on rental income … higher future rent?
Nation’s Mobility RateFrom 18% to 12%
.1
.12
.14
.16
.18
.2
Fra
ction
of
pop
ula
tion
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010Year
(Any Distance)
Fraction of Population Who Moved in the Last 12 Months
Falling mobility naturally implies less movement up the economic ladder.What should and shouldn’t be done to reverse the trend?
Person of the Century?
In regards to impacting the economic well-being, should Deng Xia-Ping be considered as someone who lifted the most people out of poverty (by abandoning Mao policy and implementing wealth creation policies) and hence the person of the century?
Will China overtake the U.S. in GDP?It depends on Singapore
19291934
19391944
19491954
19591964
19691974
19791984
19891994
19992004
20092014
20192024
0
5000
10000
15000
20000
25000
U.S. (growing 3%) China (growing 8%)
Persons of the Millennia?
The Glorious Revolution of William and Mary definitively affirmed the power of the parliament and the rule of law (and not the arbitrary powers of Kings and Queens), which thereby guaranteed that the English-speaking people would rise to the top in economic development.