Yglesias reflects on bubbles

Matt Yglesias is  still trying to figure out the late housing bubble. His latest approach is to separate structures and land, which leads him to this conclusion: I think it makes more sense to restrict the idea of a “bubble” to speculative asset like land (or stocks or gold or whatever) rather than to the actual building. A building boom may be (indeed probably is) in some sense “unsustainable” but when the boom collapses it’s not like an asset price bubble that leaves nothing in its wake but debt. A boom in structure… Read More

The housing boom (cont.)

Matt Yglesias responded, sort of, to my comments (“Was there a housing boom? Yes.”) from yesterday, countering his curious assertion that there was no building boom in the mid-2000s, by conceding that there was a boom in construction employment after all. But he refuses to give up on the argument that there was no building boom. A few more words on this topic before laying it to rest. Yglesias graphs construction employment as a percentage of the civilian labor force with a line marking the average: Before proceeding, a little overview to… Read More