Found 2 article(s) for author 'Market Cycles'

The Macroeconomic Implications of Housing Supply Restrictions

The Macroeconomic Implications of Housing Supply Restrictions. Edward Glaeser, June 15, 2019, Paper, “Housing supply restrictions, including historic preservation policies, minimum lot sizes and height limitations, are typically approached with static Pigouvian tools, but these policies also have dynamic implications. Restricted supply will typically make quantities, which determine construction employment, less volatile, and prices, which determine financial stability, more volatile. A prominent exception occurs when supply-unconstrained areas build so much during a boom that construction halts during the bust, and in that case, elastic supply can be associated with both price volatility and a limited ability to use credit instruments to boost employment during a bust. As institutions with counter-cyclical missions grapple with housing policies, they must recognize that housing regulation interacts with monetary policy, and that reforming housing policy may have implications for the business cycle.Link

Tags: , , , , ,

Investment Cycles and Startup Innovation

Investment Cycles and Startup Innovation. Ramana Nanda, Matthew Rhodes-Kropf, November 2013, Paper. “We find that VC-backed firms receiving their initial investment in hot markets are more likely to go bankrupt, but conditional on going public are valued higher on the day of their IPO, have more patents, and have more citations to their patents. Our results suggest that VCs invest in riskier and more innovative startups in hot markets (rather than just worse firms). This is true even for the most experienced VCs. Furthermore, our results suggest that the flood of capital in hot markets also plays a causal role in…” Link

Tags: , , , , , ,