Explaining recent changes in home prices
The increase in housing prices in the past ten years can largely be explained by falling mortgage interest rates and changes in household income. This article offers some projections of what might happen to housing prices if mortgage rates increase.
Can the Fed Target Inflation? Toward an Institutionalist Approach
Milton Friedman famously argued, "inflation is everywhere and always a monetary phenomenon." In debates with orthodox Keynesians regarding the appropriate method of modeling the transmission of monetary policy, Friedman preferred analysis via the quantity theory of money and reduced-form models rather than detailing within structural models the links between monetary policy and inflation. Of course, in addition to the money supply, the natural rates of unemployment and inflation expectations also were key in Friedman's understanding of the transmission of monetary policy to inflation. Central banks in the real world target interest rates, not monetary aggregates, while neither economists nor central bankers have uncovered a particular rate of unemployment or a methodology for doing so in real time that was reliably linked to the inflation rate. AB the only part of Friedman's transmission mechanism that remains, inflation expectations are front and center within the current "New Consensus" framework for analyzing monetary policy.l In the New Keynesian Phillips curve standard in the "New Consensus" literature inflation is determined by expected inflation and the current output gap. In a core "New Consensus" paper, Clarida, Gall, and Gertler (1999) argue that inflation expectations are set by current and expected future paths of the output gap, while the output gap depends on current and expected future paths of monetary policy. AB Michael Woodford put it, "not only
Achievements and contradictions of the Peruvian agrarian reform
Different paths of transition to capitalist agriculture, as well as different types of agrarian reform, can be distinguished. The Peruvian agrarian reform is analysed within this context and evaluated in terms of its contribution to rural development. The Peruvian case underlines the importance of understanding the rationality of the pre‐existent agrarian system for a successful restructuring of the agrarian economy and society. The contradictions which arose between the State's model and the peasants’ model of agrarian reform, as well as those between different types of peasants, are discussed. Peru's experience is also a reminder that a land reform is not a sufficient condition for rural development unless accompanied by proper price, marketing, credit and investment policies.