Save time by listening to our audio articles as you multitaskIn recent years another strand of research has emerged, which, rather like the political economists of yore, attributes many long-standing economic ills to land. It explores how high and rising land prices affect lending, investment and ultimately productivity, and much of it looks closely at China’s long property boom.
Because land can easily be valued and cannot be hidden or broken, it is good collateral to borrow against. So when prices are rising, as they have in most places for much of the past few decades, the initial effect is to boost lending and economic activity. Households can use their increasingly valuable property to borrow at lower interest rates than they otherwise would. Land-owning firms, too, can access finance more easily.
Rising property prices can also discourage productive lending, and lead to capital being misallocated. When housing markets boom, banks tend to engage in more mortgage lending. But because lenders face capital constraints, this is often accompanied by reduced lending to businesses.
An understatement. Usually every 18.6 years the west goes through a land price induced recession. Land value tax fixes this.
California fracking for water resulting in dry area and causing the land to shift (still shifting) still blows my mind how this was thought as a good idea with no consequences
The reckless printing of money and the feds real negative interest rates introduce distortions onto the markets place. In the end, it's a transfer of wealth from the poor and middle class to the few at the apex.
Dresses and eyeliner for boys are expensive.
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