Teaching Notes on Macroeconomic Indicators

 

August 1962, President Kennedy addresses the nation on the economy 
https://www.youtube.com/watch?v=adFjyQzCin8

Regular visitors to my blog -- both of you? -- know that I often post presentations and other teaching materials, and encourage their free use by colleagues for your own teaching and other non-profit activities.

My visitors, my former students, and others who've been subjected to my presentations at conferences and other events know that I have a reputation for my slide decks -- whatever you think of their quality, there's surely a lot of slides!

I've been creating slides of one kind or another for almost 50 years. When I moved from plastic transparencies and some early software to PowerPoint, I began to collect slides by topic in large files I think of as libraries.

Over the next year or two I plan to post some of these libraries. To be clear, I don't use them directly for a class or other presentation. Too many slides!!! I go through, pick out the ones I want, and often freshen them up a bit.

Today, I'm presenting a 1500 slide library on macroecnomic indicators. Since it's a large file (about 275MB) I recommend downloading the file to a hard drive, then opening in PowerPoint. Notice that many of the slides have notes below the slides themselves with some discussion, relevant links, etc.

After some introductory material on (e.g.) units of observation, periodicity, stocks and flows, seasonal adjustment and so on, we cover:

• Basic demographics
• Prices and inflation
• Gross Domestic Product
• Employment and labor market indicators
• Incomes, Poverty and Wealth
• Interest Rates and other financial indicators

Other indicators -- notably housing and real estate data -- are coming, in other libraries.

If you look at today's offering you'll see that many of the slides could use some freshening.  Some haven't been updated for a decade, most need at least a year or two of freshening. But I think most of the structure and much of the discussion still work.

Why this library to begin with? For the better part of three decades I taught real estate and other business students. While I once taught a principles macro course to undergraduates (to the dismay of some of my DSGE-besotted macroeconomist friends!) this teaching material came out of the realization that most business students were not going to do much formal modeling in their careers, but would benefit immensely from understanding basic market mechanisms, gains from trade, and so on -- and that they would be confronted with data, macro and otherwise.

Several of my libraries address basic concepts, and other data sources. This deck owes a lot to my late friend and colleague Don Nichols, UW macroeconomist, who was a master at presenting basic macro data and telling clear stories about how the economy was evolving. I don't claim Don's expertise, but I learned a lot from his frequent sojourns to the business school and to other non-specialist audiences.

One reason I decided to post this library today is a little darker. Like many, I'm concerned about the future of our National Income and Product Accounts, our price and employment data from the Bureau of Labor Statistics, our financial data from the Federal Reserve, the mother lode that comes from the Census Bureau; and dozens of other agencies.  

In addition to the data we use from the "Big Four" sources, we often rely on data on climate from NOAA, on health from the CDC, on crime from the FBI, and many other sources. For a deeper dive into the Federal Statistical System, go to StatsPolicy.gov for a good start.

What are the sources of the aforementioned concern? The U.S. statistical system, arguably the most extensive and sophisticated in the world, like any such system, has room for improvement. And there is a long history of elements of the system facing budget cuts and/or political pressure.  To date, these have, in the main, been successfully blunted. And we've had improvements, from the creation of the American Housing Survey in the 70s to the 2010 move from the Census Long Form to the American Community Survey, and the implementation of the Pulse Surveys during the COVID pandemic. But the general trend in recent decades has been for an erosion in the resources devoted to, and outputs of, government statistics, as docmented in a 2025 letter from a wide range of individual and institutional data experts and users available here, and especially in a 2024 report from the American Statistical Association, "The Nation's Data at Risk: Meeting America's Information Needs for the 21st Century," available here. NYT summary here.

That does not mean that there are not important areas for improvement and reform. Presently, many areas of data collection and analysis are under threat from cuts being implemented by the (ironically labeled) Department of Government Efficiency. More on DOGE in a future post, but for now note that DOGE's modus operandi  of "move fast and break things" is not designed to improve or reform statistical systems, but to disrupt. It is safe to say that the DOGE team is in many respects the Bizarro World version of the "Data at Risk" approach. You can find representative discussions of the DOGE approach to data here, here, here, here, and here.

[For those who did not grow up on U.S. comic books, Bizarro World is a fictional planet where everything is the opposite of Earth.]

As an academic, and primarily an empiricist to boot, it's fair to ask if I'm simply defending my own little world. Yes, but not "simply." "Data at Risk" is one convenient review of the importance of good public data for actually improving government efficiency, and also for business market research, risk analysis, invention and innovation, and economic development. Another review from a joint project of the Hamilton Project and the American Enterprise Institute, "In Order That They Might Rest Their Arguments on Facts: The Vital Role of Government-Collected Data" is available here.

Good data contributes to a functional polity. It's been well established that one of the characteristics of democracies is the provision of timely and accurate data.  Here is one example. Economist Luis Martinez checked reported GDP growth rates to those estimated from changes in the intensity of light emitted across different countries, a proxy for energy use. These satellite surveys of light intensity have been shown to be a good independent check on economic production. 

Martinez then uses data from Freedom House to identify countries as democracies or autocracies. The key finding from this figure, and from other analysis in his study, is that democracies usually produce GDP statistics that match up with satellite data, while autocracies often -- usually -- inflate their growth rates. Good data is a hallmark of free societies, while unfree governemnts put their thumbs on the scale.

Martinez's cross-country study is collaborated by many country analyses that document how autocrats seek to cook the books; presenting statistics that contradict the official, mis-measured data can even be criminalized. For just a few examples of counry studies, see the short list of readings below.

Finally, we'll note that good data has a great ROI. As the aforementioned Hamilton Project/AEI study notes, the principal statistical agencies spend less than 0.2 percent of the Federal budget:

From Eberstadt et al. (2017)

We need accurate, reliable data on a wide range of important topics. It is invaluable but it does not cost very much.

Selected References

Auerbach, Jonathan, Claire McKay Bowen, Constance F Citro, Steve Pierson, Nancy Potok, and Zachary Seeskin. "The Nation's Data at Risk: Meeting America's Information Needs for the 21st Century." Alfred P. Sloan Foundation, the American Statistical Association, and George Mason University, June 2024.

Briviba, Andre, Bruno Frey, Louis Moser, and Sandro Bieri. "Governments Manipulate Official Statistics: Institutions Matter." European Journal of Political Economy 82 (2024): 102523.

Chen, Wei, Xilu Chen, Chang-Tai Hsieh, and Zheng Song. "A Forensic Examination of China’s National Accounts." Brookings Papers on Economic Activity, Spring 2019: 77-141.

Coremberg, Ariel. "Measuring Argentina’s GDP Growth." World Economics 15, no. 1 (2014): 1-32.

Eberstadt, Nicholas, Ryan Nunn, Diane Whitmore Schanzenbach, and Michael R Strain. "“In Order That They Might Rest Their Arguments on Facts”: The Vital Role of Government-Collected Data." American Enterprise Institute and the Hamilton Project, 2017.

Georgiou, Andreas V. "The Manipulation of Official Statistics as Corruption and Ways of Understanding It." Statistical Journal of the IAOS 37, no. 1 (2021): 85-105.

Jerven, Morten. Poor Numbers: How We Are Misled by African Development Statistics and What to Do About It. Cornell University Press, 2013.

Martinez, Luis R. "How Much Should We Trust the Dictator’s GDP Growth Estimates?". Journal of Political Economy 130, no. 10 (2022): 2731-69.

The Economist.  Turkey Grapples With Triple-Digit Inflation. July 14, 2022.

Thoughts on Wildfires, After Los Angeles

 

Los Angeles, January 2025 (iStock)

In January 2025, Los Angeles and its environs was hit by a series of destructive wildfires.

It was hardly the first destructive and fatal wildfire in California, or in the United States.

In February, Richard Green, Faculty Director of USC's Lusk Center for Real Estate, Kevork Zoryan, Chair of the Lusk Center Advisory Board, and Christopher Boone, Dean of USC's Sol Price School of Public Policy, convened a Lusk Center Advisory Board meeting to discuss ongoing efforts by the Center and by other USC academics, board members and other members of the greater LA real estate community, and local officials and community members to facilitate recovery and reconstruction, and to draw lessons to mitigate future wildfire losses.

I was invited to make a few remarks, on "Reconstruction and Development: A Few Observations from Abroad." Given the importance of the topic, of course I agreed, and prepared some slides to frame my remarks.

I discussed provisional lessons from a review of some experiences of reconstruction, focusing on lessons from other countries. Many of these experiences relate to reconstruction after conflict, rather than wildfires. My hope was to offer some general lessons, whatever the type of disaster, time and place.

Eight other academics and professionals made pesentations and/or participated in a panel discussion; many of the roughly hundred in-person participants offered their experience and expertise.

We were focused by the fact that a number of our colleagues had themselves lost homes; virtually everyone in the room had a relative or neighbor or friend who had suffered a loss.

I learned a lot from our meeting, and on my return to Newton (home of the Massachusetts outpost of the University of Wisconsin's Graaskamp Center, of which I am to my knowledge the sole faculty member and student) I dug a little deeper into the subject of wildfires, in the United States and elsewhere. My slide deck expanded somewhat.

For those who are interested you can download the current version here.  I say current version because this is a fast-moving topic and there is a lot of research coming out (much of it from USC, including a collaboration with colleagues at UCLA) which I have yet to absorb. As always, I encourage anyone who wants to use any of these materials in your own (not-for-profit) teaching or other presentations. Comments and, especially, corrections are always welcome.

International Perspectives from Two Recent Meetings

 

International Perspectives on the Direction of Housing Finance: A Meeting in Seoul

In November 2024 I was honored to be invited to join colleagues from South Korea and around the world to participte in the 10th Annual International Forum on Housing & Urban Finance, organized by the Korea Housing & Urban Gurarantee Corporation (HUG) and held in Seoul.

I later had the opportunity to visit HUG's Pusan headquarters, as well as the headquarters of Korea's other apex houisng finance institution, the Korea Housing Finance Corporation.

The detailed program from the conference can be accessed here, including slides from the various presentations that preceded discussions. The program includes updates on South Korea's economy and housing markets, as well as other global perspectives from my friend Marja Hoek-Smit and others.

I was asked to participate in a session focused on polarization, a subject of intense interest in Korea and in the United States; in fact in many countries. My material starts on page 20 of the detailed program; you can also acess the PowerPoint version, which includes many links and other details in the attached notes.

Ironically, several days after the Forum, and after my additional visits in Seoul and Pusan, it was while I was returning to the United States that we recieved word of South Korea's martial law. The duration of martial law itself was brief, but the run-up to that episode was complex, and as of this writing the full implications have yet to be understood.

Global Perspectives on Urban Development and Real Estate: A Meeting in West Palm Beach

In January 2025 we held one of two annual meetings of the Hoyt Institute. The January meeting mainly comprises presentations by newly selected Academic Fellows. This year we added a session entitled "Global Perspectives," which was intended to be a more wide-open particpatory discussion among all participants.

The majority of Hoyt Fellows reside in the U.S., and most are from there. Others have lived and worked in other countries. Whatever our origins, some of us focus on the U.S. in our research, teaching and policy work; others have contributed to these global perspectives. With input from several colleagues, I pulled together a collection of my teaching slides on some basics -- maps, demographic data, GDP, housing, and of course sources of data and references.

Our discussion was wide ranging, and a number of participants made comments and suggestions on additonal topics. After the meeting we added some material relevant to some of these points and questions. You can download the final (?) slides inspired by our session here.

While a bit disjointed -- think the Jeopardy category "Potpourri" -- readers will surely find some material they know well, but also some new tidbits, perhaps some inspiration for a research project or a teaching module. As always, colleagues should feel free to use any of these slides in their own teaching or other nonprofit activities.

Studying Climate Change: A Brief Introduction

 

Charles David Keeling measures CO2, creates a time series beginning in the 1950s
https://sustainability.illinois.edu/charles-david-keeling-1928-2005/

We might date the "modern" study of climate change to the 1950s, when Charles Keeling and colleagues began a careful series measuring atmospheric CO2 at the Mauna Loa Observatory.  He found startling regularities in the growth of CO2, now often referred to as the "Keeling Curve." After Keeling's death the work was carried out by his son, and others:

https://en.wikipedia.org/wiki/Keeling_Curve#/media/File:Mauna_Loa_CO2_monthly_mean_concentration.svg

Keeling's paper is certainly one of the most influential climate papers within my lifetime, but as early as 1827 Joseph Fourier described the "greenhouse" mechanism that warms the earth, and in 1896 August Arrhenius predicted the greenhouse effect of doubling atmospheric CO2. These and other precursors such as Eunice Foote (1856), John Tyndall (1861) and later G.S. Callendar (1938) posited and provided some evidence of links between CO2 and climate; but after the work of Keeling and colleagues, the study took off.

This chart is one of dozens we could post to illustrate that there is an apparent empirical relationship between CO2 and global temperatures:

https://skepticalscience.com/The-CO2-Temperature-correlation-over-the-20th-Century.html

Of course everyone knows that correlation, per se, is not sufficient to demonstrate any causal link.

https://xkcd.com/552/

Side note: if you haven't been checking out the brilliant cartoon work of Randall Munroe, you should go to his website immediately after reading all my blog posts and downloading all my PowerPoint decks etc.

While correlation does not prove causality, neither does it disprove it.

As already noted, there have been solid scientific models that predict global warming if/as atmospheric carbon dioxide increases. These correlations support the theory, and the theory predicts such relationships.

So far, we are only scratching the surface of a subject on everyone's mind, including those involved in the real estate industry, students preparing for real estate careers, work in planning or education, those involved in any aspect of urban development -- in other words the target audience of this blog.

For some years I've been discussing climate change in courses and elsewhere, and if you are one of the three regular readers of this blog you know what's coming next: a PowerPoint deck that you can download.

A year and a half ago, I posted a blog entry and slide deck on "Urbanization and Climate Change: A First Look."  Now I've got something better.  Recently I gave some lectures on climate change to Professor Lu Han's course on urban economics at the Grasskamp Center for Real Estate at the  Wisconsin School of Business.

These lectures gave me an excuse to freshen up my teaching materials from 2020. In the interim I was fortunate to learn more about this subject from USC's Matt Kahn, and a number of presenters at conferences organized by Siqi Zheng, at MIT; and Harvard's Henry Pollakowski, for the Hoyt Institute. Doing justice to the material I've learned from the participants at these events, and comments from other colleagues would take more than a slide deck, and of course they are not responsible for my opinions, errors and omissions.

You can downoad the slides from my November 2023 lectures here.  There are about 300, organized as follows:

• Climate change in perspective
• Climate change basics
• Energy basics
• Some economics of climate change
• Option 1, climate mitigation: lessons from urban economics, roles of cities
• Option 2, climate adaptation: lessons from urban economics, roles of cities
• Option 3, if we cut corners on options 1 and 2 
• Policy prescriptions and research agenda
• Resources

I strongly recommend that you download the PowerPoint file and open it in PowerPoint, instead of just opening it in your browser.  Otherwise, the formatting of many slides is usually messed up. And you'll not see the notes, that have links, sources, and discussion.

Three hundred slides might sound like a lot, but it's a big subject and these slides only provide an introduction.  As always, colleagues, please feel free to select any of the slides that are useful in your own teaching and presentations.  Comments and corrections are welcome.

Israel, Palestine, and the "Middle East:" Some Background

 

As every reader will know, on October 7, 2023, Hamas terrorists attacked Israel from Gaza, slaughtering hundreds of civilians, and taking some 200 hostages before retreating to Gaza.

Israel has responded -- is responding, as of this writing -- with a bombardment and apparently increasing assault on Hamas strongholds in Gaza. These strongholds are scattered within a very densely packed Gaza Strip, many in tunnels beneath Gaza City.  Gaza City proper contains about 650,000 people in 18 mi.2 (47 km2).  This insures that collateral damage to civilian life and property will be substantial.

"Those that forget the past are condemned to hear that quote from George Santayana again." The purpose of this post, and more specifically the slide deck that you can obtain here, is to provide some background on the history that underlies this terrible conflict.

The intended audiences for this material are students and others who desire to learn more about the history, politics and economics of the region, especially in light of recent events, including Hamas’ recent attack on Israel, and its aftermath. However, it is not primarily about those events, which are unfolding rapidly. See “Resources” at the end of the deck for suggestions on some sources to stay abreast.

This material, while preliminary and incomplete, should nevertheless provide context and history that will aid students in understanding current events and thinking critically about the underlying issues of the region. Other faculty should feel free to use any of these slides you find useful in your own teaching.

I have studied the region off-and-on since 1972, but as an interested lay person. I do not claim specialist expertise, and my understanding is continually evolving. I plan to update this material from time to time, as I learn more.  Nevertheless, I have tried to present material that is balanced and accurate, if woefully incomplete. I welcome comments and corrections, especially from those with deeper expertise.

You can download the current draft of the PowerPoint deck (November 8, 2023) here.

Again, this is a work in progress.  Comments and corrections are welcome.  Expect updates in due course.

Disasters Redux: This Time, Earthquakes

 

In several recent posts, I've focused on some of the bad things that can happen to our cities and real estate, including pandemics (COVID), conflicts (Ukraine's invasion by Russia), climate change, and bad urban policies.  On February 6, 2023, southern Turkey and northern Syria were struck by a 7.8 earthquake centered in Turkey's southernmost province of Antakaya, and a series of aftershocks.  As of this writing the death toll is estimated to be about 50,000 in Turkey and 9,000 in Syria, with other devastating losses, including injuries, property damage, and large stresses on individuals and communities.

Teaching urban courses for a quarter century, I have assigned (or students volunteered) a number of papers asking students to apply the course's lessons to (usually then current) disasters such as Hurricane Katrina (2005), Haiti's 2010 earthquake, and of course the 9/11 attacks on New York City, the Pentagon, and Shanksville, Pennsylvania.  More recently, I've discussed Russia's invasion of Ukraine in some of my guest lectures.

But the most recent deck I've created relates to the February 8, 2023 earthquake that struck southern Turkey and northern Syria. It's still a work in progress, but you can download the current version here.

Nino Pedrelli (1956 to 2023): Real Estate Economist, Developer, One Who Knew How to Live

 Nino Dante Pedrelli came to Wisconsin’s real estate program with a unique background and skillset. Given his prior education in engineering and business, and his already significant accomplishments as a developer, it was a no-brainer to admit him to our PhD program.  Once he arrived, we learned that he brought so much more to the table.  A slightly tamed Boston accent, a love of Italy that infected anyone who hadn’t yet made the trip themselves, a sly sense of humor, and a deep curiosity about anything urban or real estate related, but most especially, an ability to connect with people – this is the Nino that we were fortunate to know and, yes, love.  And as if that weren’t enough, if you knew Nino, you got to know Susan and Laura and Cara, and over time some of the extensions to their family, notably Laura’s husband Steve, and the newest Pedrellis, his beloved granddaughters Lina and Luca.

Cara, Nino, Laura and Susan, and friend -- circa 2010

Sadly, Nino was taken from us at an early age, after a long struggle with cancer.  You can read his official obituary here, including more family details.

Speaking of family, in 2021 Nino was visiting the Boston area, and he took me to see his family home in Arlington (Mass.)  One of the highlights was this bas-relief -- of Nino's mother, Thelia.  Some Italian workmen were staying with the Pedrellis.  Perhaps artisans would be a better word -- one of the workmen created this classical motif with Thelia Pedrelli as the model, in thanks for their hospitality.

Every PhD student caps their studies with a dissertation – a significant piece of original research that adds something to the body of knowledge in our field, and also demonstrates one’s mastery of research tools.  Most dissertations stick close to whatever the fad of the moment is, in terms of topic, model, data.  Not for Nino.  He painstakingly dug out data on real estate financial transactions from the 1850s and 1920s, rather than looking for a canned dataset to download and “torture until it confessed.”  These early bonds and warrants were the precursors to today’s CMBS and other derivative markets.  Nino brought modern time-series technology to bear on the problem, and showed how, and why, a century ago as well as today, “every real estate boom is followed by something else that starts with the letter B.” Let's take a quick look at some of the basic data:

Excess returns in mortgage bonds, Great Depression, from Nino's dissertation

Nominal returns in land warrants, 1850s, from Nino's dissertation

If you're like me, this introductory data from "Volatility and Performance Analysis of Two Past Real Estate Markets: Mortgage Bonds of the 1920's and Land Warrants of the 1850's" whets your appetite.  You can download Nino's entire dissertation here, for your perusal. If you want the executive summary, here's a very short piece Nino wrote for the magazine Financial History.

While he was resident at UW, Nino also showed his chops as an outstanding teacher.  If you want to learn more about something technical like urban economics or how to price a mortgage-backed security, geeks like Malpezzi or Shilling or Green are just what you want.  Nino could geek out with the rest of us.  But if you want to really learn development, well then, you want someone with experience in the trenches; and the ability to generalize and connect theory to practice and vice versa; and someone who knows how to teach those things effectively.  Dozens of students confirmed that Nino was that rare master of all three, someone who set a template for his own and today’s outstanding UW lecturers that ensure our students emerge with the right balance of education and skills to “hit the ground running.”

Nino working in the Graaskamp Center, circa 1998

After completing his PhD, Nino eventually decided to refocus on real estate development and consulting, and moved to Minnesota; but he continued to teach real estate finance and development at Saint Thomas, continuing to give back to another generation of students.

Nino and I became close friends.  We were delighted to find out that our Italian families were rooted only 50 miles apart, Nino’s in Parma, and Steve’s in small hill towns near Pontremoli.  Some blog readers might have been privileged to participate in Nino's annual Parmigiana Reggiano ritual, but not everyone knew the struggles Steve and Nino endured in the early days, cutting up an 85 pound wheel of cheese covered with a rind seemingly borrowed from a rhinoceros.  We tried every knife in the house, multiple saws, and guitar wire.  Eventually we got the hang of it, and by the time Nino left Madison he’d obtained a set of the “tagliagrana” knives that the pros use.  Of course, one wouldn’t spend an hour cutting up a wheel of cheese without sharing a good bottle of Montepulciano, which helped pass the time. Once you’ve got a share of the wheel, what do you do with it?  Everything! On soups, pastas, a few chunks with a glass of wine.  Nino also took Steve under his wing in the kitchen; every time Steve makes a variation of the risottos Nino taught him, Nino’s there again, in the kitchen in spirit, whether the rest of him is in Wisconsin or Minnesota or wherever he’s at now.