Category Archives: Social issues: homelessness, crime, urban decline
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Urban is hip. Bikes, messenger bags, and apartment-sized dogs are in. Increasingly, young, educated professionals are disavowing the suburban dreams of their parents’ generation and moving to city centers.1 This trend embodies a long-held academic suspicion that urban sprawl is both economically wasteful and socially disadvantageous.2 However, despite emerging consensus about the existence and causes of sprawl, its consequences are much less clear and economists have so far failed to fully articulate the reasons why what so many people think they know is true- that sprawl is bad.
Despite this uncertainty, hundreds of ballot measures have been introduced to combat urban sprawl, and a large percentage of them have passed.3 Accurate information about sprawl is all the more important given the huge ethical implications anti-sprawl policy measures; i.e., is it fair to create open space rings around a city because they look and feel good if they drive up real estate prices in the city for everyone, even the poor? This student paper explores the limitations of traditional urban growth models for analyzing sprawl, considers the direction taken by new models, and identifies important areas of future study to help inform these critical policy choices.
1 See The Brookings Institute, The State of Metropolitan America, http://www.brookings.edu/metro/StateOf Metro America.aspx.
2 Thomas Nechyba and Randall Walsh, Urban Economics, Journal of Economic Perspectives, Vol. 18, 177–200, at 177 (2004) (hereinafter Nechyba).
3 Nechyba, at 177; Sierra Club, Sprawl: The Dark Side of the American Dream, 1998, http://www.si-erraclub.org/sprawl/report98/report.asp.
While scouring databases for manuscripts to review for our survey assignment, I stumbled upon an amazing find. In 1988, Greg Mankiw wrote a manuscript titled The Baby Boom, The Baby Bust, And The Housing Market. In it, he successful predicts the economic crisis of today using data from housing prices and birth rates. He later went on to become one of the most prominent economists of our time. A quick summary of his accomplishments can be found HERE, along with links to his most prominent works. If you care to keep up with his current activities, his blog can be read HERE.
The remainder of this blog covers the the literature survey that incorporates Mankiwi’s work in with two others.
The advancement of knowledge is a double-edged blade that has been able to both provide society with immense benefits, while at the same time slice out the general foundation of thought from which these benefits were spawn. Many times the truth is lost or forgotten for a greater assumption just because it is accepted throughout a community. Time and time again, popular mediocracy distorts our perception, controlling the ideas that become the ‘truth’. The purpose of this survey is to use three works written in 1988, 2002 and 2008 to analyze how, in context of the housing market, the social and economic pitfalls of each era led to the major crash in 2007. The ultimate goal is to provide a probable cause as to why no one was able to identify or correct the financial crisis before it occurred. The results of this survey show that rather than a single cause, the depression was the result of a trifecta of social and economic issues that each contributed to create the perfect storm that would catch society with its pants down.
Click HERE to keep reading.
The three sources used in this survey were:
1. The Baby Boom, The Baby Bust, And The Housing Market by Gregory Mankiw
2. An Analysis of North Carolina Lending Laws by Gregory Elliehausen and Michael E. Staten
3. Subprime Lending and the Housing Bubble by Major Coleman IV, Michael LaCour-Little and Kerry D. Vandell
— by Mitchel Gorecki —