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How the U.S. might outgrow pandemic-era housing (un)affordability problems
A review of market-based and private forecasters’ expectations suggests that U.S. housing may be at an inflection point. U.S. income growth and, more broadly, the robust U.S. labor market will likely help wring out pandemic-era excesses that led to rapidly deteriorating affordability.
Working Paper
On the Nexus of Monetary Policy and Financial Stability: Novel Asset Market Monitoring Tools for Building Economic Resilience and Mitigating Financial Risks
In this note we argue that asset pricing bubbles are an important source of financial instabilities. First, the literature has tended to overlook bubbles and their consequences under the premise that they are hard to detect in real time. We suggest that novel statistical techniques allow us to overcome those prejudices as they provide valuable signals of emerging exuberance in real‐time. Second, monetary policy has been slow to recognize that financial instability arising from bubbles can have adverse effects on the transmission mechanism of monetary policy itself and on the types of risks ...