What Happened When This City Banned Housing Investors

> Economics is the worst social science, an economist is never considered wrong, only of a different “school of economics”. Economists speak as if they have authority and as if their field is objective, but at the same time have those “schools”. Is there such a thing as an unideological economist? Economics is falsifiable. For example, a bunch of folks made a prediction ("currency debasement and inflation") when the US Federal reserve started QE: > We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment. * link A bunch of other folks (e.g., Keynesians like Krugman) made a bunch of prediction as well. One group turned out right, another did not. Another experiment where one group predicted tax cuts would spur growth: * link Others predicted it would not, and were right. There was also sorts of folks talking that cutting government spending would spur growth, i.e., "expansionary austerity": * link Others predicted it would not, and turned out correct: * link Amsterdam ended up running a bit of an 'experiment' on what happens when you tried banning houses owned by investors: * link * link * Via: ▶ this video There are "schools" that put forward various models

What was the controllable with Eddington? * link Einstein's models made a prediction, people 'tested' that prediction in Nature, and it turned out accurate. General theory has made other predictions, and empirical observations have found them to be accurate as well. Plenty of "real" science is/was done outside of controlled experiments in a lab. A phenomena was going to happen (e.g., tax law changes): some economic models predicted X would happen, and some predicted Y would. We can see which were more accurate and which were falsified: * link Rotterdam is running an experiment right now with regards to real estate markets and regulation: * ▶ this video * link Every time the Federal Reserve makes a policy change there are people running their models on what will happen, and if their models are right they make a lot of money, and if they're wrong they lose a lot of money: > But why was Gross betting so heavily against Treasuries? Brad DeLong tries to rationalize[1] Gross’s behavior in terms of a coherent story about an impending U.S. recovery, which would lift us out of the liquidity trap. But Gross wasn’t saying anything like that. Instead, he was claiming that the Fed’s asset purchases — QE2 — were holding rates down, and warned that the impending spike in rates when QE2 ended would derail recovery. > So why did he believe all that? It all comes down, I’d argue, to liquidity trap denial. > Since 2008 the basic logic of the economic situation has been that the private sector

> But other than zoning it seems it would help more if the government would step in to disallow large leasing companies buying up giant swathes of the housing stock just to flip into rentals. There was a timely video about this yesterday from Oh the Urbanity: ▶ this video Summary is that Rotterdam did just this, and the effect was that the price to purchase a house did not measurably decrease, and that rents rose. The neighborhoods regulated in this way had fewer immigrants and skewed wealthier than those that were not. So, not the effect we're looking for.