Archive for December 30th, 2008

Understanding Zero Interest Rate Policy, Deflation and Liquidity Trap

December 30, 2008

I have written a paper trying to explain these exotic topics. It is also a short literature survey on the issues.

Let me know your comments.

Is Mumbai more costly or Delhi? Analysing residential housing prices

December 30, 2008

I had posted a while back on launch of India’s official Index  that helps track prices in residential housing market. The index is developed by National Housing Bankand was named as NHB-Residex. The index was launched by then FM P. Chidambaram on 10 July 2007 but was not available on the website.

However, the good news is that index has been made available on the website. It is a delight as we have some official data to track developments in real estate. It is available for five cities – Mumbai, Delhi, Bangalore, Kolkata and Bhopal. The recent interview of NHB Chairman tells us that it would be expanded to 15 cities.

NHB’s RESIDEX, which is India’s first official property index, was launched in July 2007 for five cities — Bengaluru, Bhopal, Delhi, Kolkata and Mumbai — covering the period 2001-2005. It has since been updated to December 2007. The property index has been well received. It is being expanded to cover 15 cities and up to December 2008 which will be ready by March 2009. In another year, it will cover all cities with population above 10 lakh.  

Another feature of the data is that we have intercity data as well. So for instance within Mumbai we have data for Malabar Hill, Navi Mumbai etc. I have written number of posts on Mumbai’s housing market (which mainly said it is unaffordable) but have never had the statistics. So this data will help and it will also help compare the trends across cities.

So what are the trends like? We have data from 2001 – 2007, so 2001  is  the base year at 100. The growth trends are as follows:

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Assorted Links

December 30, 2008

1. Tabarrok says we need to think fiscal stimulus from an employment perspective

2. Krugman points to his new paper which says optimal fiscal policy to get out of liquidity trap

3. WSJ Blog points to a paper from Barry Eichengreen who says financial globalisation would be restrained after the crisis.

4. JRV points to lessons finance teachers can draw from the crisis. Again like the responses there is nothing new here. I especially don’t agree when he says – There is a need to shift from behavioural traits to hard nosed rational models. I would suggest to go for the opposite.

5. I found this new new blog. Interesting throughout

6. Finprof points 2008 crisis worst ever

“In the end, the Panic of 1873 demonstrated that the center of gravity for the world’s credit had shifted west — from Central Europe toward the United States. The current panic suggests a further shift — from the United States to China and India. Beyond that I would not hazard a guess.”

I need to read about panic of 1873 now!

7. CTB points to Chinese financial globalisation – slow and steady wins the race

8. Econbrowser on trade finance and falling trade


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