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It's actually one of the big problems with Capital in the 21st century: if you strip out housing, r < g! Turns out it's all zoning and rent control all the way
by JackYoustra 2y ago
It's actually one of the big problems with Capital in the 21st century: if you strip out housing, r < g! Turns out it's all zoning and rent control all the way down! Fix zoning and you end up incidentally fixing inequality too because it's such a large part of economic rents.
- greenie_beans 2y agoif it's all because of zoning, then how come we built more housing in the period leading up to the great recession (with the strict zoning laws that already existed)?
- JackYoustra 2y agoWe did build housing, yes, just not in the places that needed it. The academic evidence is pretty strong, see https://www.nber.org/system/files/working_papers/w8835/w8835.pdf https://www.nber.org/system/files/working_papers/w8835/w8835... for the divergence of price from costs of construction only localized in some areas. You can zoom out to see a literature review here too: https://www.nber.org/system/files/working_papers/w20536/w20536.pdf https://www.nber.org/system/files/working_papers/w20536/w205... For a specific critique as it pertains to Capital, you can see the analysis here: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... summarized here: https://www.economist.com/finance-and-economics/2015/03/28/through-the-roof https://www.economist.com/finance-and-economics/2015/03/28/t...