Found 96 article(s) for author 'Edward Glaeser'

The Economic Implications of Housing Supply

The Economic Implications of Housing Supply. Edward Glaeser, January 4, 2017, Paper, “Housing is both an investment and consumption good. Its production is almost prosaic in its use of simple resources like lumber, yet its financing involves trillions of dollars in mortgages that were central to the recent global financial crisis. As different as a two-by-four may be from a complex collateralized mortgage-back security, the simple fundamentals of housing supply are central to understanding housing markets, the securities that are tied to them, and America’s economic geography.Link

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Real Estate Bubbles and Urban Development

Real Estate Bubbles and Urban Development. Edward Glaeser, December 2016, Paper, “Why are real estate bubbles so common? Can these bubbles actually do some good? Real estate booms have regularly occurred throughout the world leaving painful busts and financial crises in their wake. This paper suggests that real estate is a natural investment for more passive debt investors, including banks, because real estate’s flexibility makes it better collateral than specifically built production facilities. Passive capital’s preference for real estate will be particularly strong when agency problems bedevil equity investments. Consequently, passive capital may flow disproportionately into real estate and the errors of passive capital can generate real estate bubbles.Link

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A Real Estate Boom with Chinese Characteristics

A Real Estate Boom with Chinese Characteristics. Edward Glaeser, Andrei Shleifer, October 2016, Paper, “Chinese housing prices rose by over 10 percent per year in real terms between 2003 and 2014, and are now between two and ten times higher than the construction cost of apartments. At the same time, Chinese developers built 100 billion square feet of residential real estate. This boom has been accompanied by a large increase in the number of vacant homes, held by both developers and households. This boom may turn out to be a housing bubble followed by a crash, yet that future is far from certain. The demand for real estate in China is so strong that current prices might be sustainable, especially given the sparse alternative investments for Chinese households, so long as the level of new supply is radically curtailed.Link

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Securing Property Rights

Securing Property Rights. Edward Glaeser, Andrei Shleifer, September 2016, Paper, “A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong—the state or its powerful citizens—against the weak. We present evidence that the less educated and poorer citizens in many countries feel their property rights are least secure. We then present a model of a farmer and a mine which can pollute his farm in a jurisdiction where the mine can subvert law enforcement. We show that, in this model, injunctions or other forms of property rules work better than compensation for damage or liability rules. The equivalences of the Coase Theorem break down in realistic ways. The case for injunctions is even stronger when parties can invest in power. Our approach sheds light on several controversies in law and economics, but also applies to practical problems in developing countries, such as low demand for formality, law enforcement under uncertain property rights, and unresolved conflicts between environmental damage and development.Link

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Preserving history or restricting development? The heterogeneous effects of historic districts on local housing markets in New York City

Preserving history or restricting development? The heterogeneous effects of historic districts on local housing markets in New York City. Edward Glaeser, March 2016, Paper, “Since Brooklyn Heights was designated as New York City’s first landmarked neighborhood in 1965, the Landmarks Preservation Commission has designated 120 historic neighborhoods in the city. This paper develops a theory in which landmarking has heterogeneous impacts across neighborhoods and exploits variation in the timing of historic district designations in New York City to identify the effects of preservation policies on residential property markets.Link

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Infrastructure, Incentives and Institutions

Infrastructure, Incentives and Institutions. Edward Glaeser, January 2016, Paper. “Cities generate negative, as well as positive, externalities; addressing those externalities requires both infrastructure and institutions. Providing clean water and removing refuse requires water and sewer pipes, but the urban poor are often unwilling to pay for the costs of that piping. Standard welfare economics teaches us that either subsidies or Pigouvian fines can solve that problem, but both solution are problematic when institutions are weak. Subsidies lead to waste and corruption; fines lead to extortion of the innocent. Zambia has attempted to solve its problem with subsidies alone, but the subsidies have been too small to solve the “last-mile problem” and so most poor households remain unconnected to the water and sewer system. In nineteenth-century New York, subsidies also proved insufficient and were largely replaced by a penalty-based system … Link

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Cities Need To Encourage Entrepreneurship, Not Class Warfare

Cities Need To Encourage Entrepreneurship, Not Class Warfare. Edward Glaeser, December 1, 2015, Opinion. “Urban America’s problems of poverty and joblessness are real. Progressives have been elected to address those problems, but their simple big-government solutions — updated but essentially the same as those tried in the past — are almost sure to fail. We need a more forward-looking urban-policy approach.  While many agree that entrepreneurship is good for cities and their residents, little consensus exists about what policymakers can do to promote it, especially in high-poverty areas. Public loans or loan guarantees for entrepreneurs are the most commonly applied policies. Unfortunately, we have no examples of truly randomized lending, which is what would be necessary in order to evaluate whether the government loan programs worked. Absent such experiments, the best we can do is compare companies that received such aid with similar firms that didn’t, and see how they fared …” Link

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Urban Networks: Connecting Markets, People, and Ideas

Urban Networks: Connecting Markets, People, and Ideas. Edward Glaeser, December 2015, Paper. “Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns…Link

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Reviving Economic Growth: Policy Proposals from 51 Leading Experts

Reviving Economic Growth: Policy Proposals from 51 Leading Experts. Edward Glaeser, 2015, Book Chapter. “If you could wave a magic wand and make one or two policy or institutional changes to brighten the U.S. economy’s long-term growth prospects, what would you change and why? That was the question asked to the 51 contributors to this volume. These essays originally appeared in conjunction with a conference on the future of U.S. economic growth held at the Cato Institute in December 2014…Link

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Encourage Enterprise, Empower Cities: The Promise of Entrepreneurship Zones

Encourage Enterprise, Empower Cities: The Promise of Entrepreneurship Zones. Edward Glaeser, 2015, Book Chapter (starting on p.41). “Can cities be pro-poor as well as pro-business? Many popular progressive policies, such as raising taxes on rich urbanites, are likely to send successful entrepreneurs to some other locale. This essay argues that entrepreneurship districts located in high-poverty areas may encourage economic success among the less fortunate in a way that lifts up the entire city. Three decades ago, Sir Peter Hall persuaded Margaret Thatcher…” Link

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