Most Americans agree that housing costs are too high, often blaming developers and landlords. Many feel that the problem can be solved with price controls, development restrictions, and mandates on providing below-market-rate units. But these ideas are at odds with standard economic policy prescriptions, which suggest that the way to bring down costs is by increasing the housing supply.

In a paper in the Journal of Economic Perspectives, authors Christopher S. Elmendorf, Clayton Nall, Stan Oklobdzija explore how the public thinks about housing markets through surveys of thousands of urban and suburban residents. They found that while people understand supply and demand in markets like cars and agriculture, they struggle to apply the same logic to housing. The authors’ results may help efforts to shape better economic messaging geared toward the general public.

Elmendorf recently spoke with Tyler Smith about how he and his coauthors measured public beliefs about housing markets and why these beliefs differ from economic consensus.

Despite decades of civil rights legislation, many Black and White Americans, as well as other minorities, continue to live in racially homogeneous neighborhoods, with significant implications for access to quality schools, jobs, healthcare, and economic opportunities.

In a paper in the Journal of Economic Literature, authors Trevon D. Logan and John M. Parman examine the complexities of measuring residential segregation, what causes segregation to persist, and why it matters so much for economic outcomes. Their work challenges conventional narratives about US segregation and offers a framework for understanding how residential patterns continue to shape American inequality.

Logan and Parman recently spoke with Tyler Smith about the patterns of segregation they uncovered, and what the key drivers might be.

For decades, the United States enjoyed what some called an exorbitant privilege—the ability to spend more than it earned without accumulating much debt to the rest of the world. But that privilege has ended.

In a paper in the American Economic Review, authors Andrew Atkeson, Jonathan Heathcote, and Fabrizio Perri found that the United States started accumulating significant liabilities to foreigners after the Great Recession.

The researchers say that a surge in the value of US corporations relative to companies in other countries is the driver of this development. Due to large international capital flows in recent decades, foreign investors now own about 40 percent of US corporate equity, while US investors also hold a large amount of foreign companies in their portfolio. When American companies become more profitable and their stock prices soar, much of the gains flow overseas, without a corresponding flow to US investors from foreign companies, and this erodes the net foreign asset position of the United States.

Atkeson recently spoke with Tyler Smith about how to interpret the US net foreign asset position and what its recent swings mean for American households.