One of the recent failings in the analysis of urban economic problems has been an excessively short-term outlook. As in all other types of economic activity, there are cyclical movements, in the supply, demand and price of urban land and buildings. Politicians and journalists, and even economists from J. S. Mill onwards, have regularly extrapolated recent cyclical movements indefinitely into the future, and based policy prescriptions on this prognosis. The few available studies of long-term movements — of land prices, rents, housing supply, etc. — have usually been undertaken by chartered surveyors and geographers, rather than economists, and have remained largely unknown. Let us summarise some of the evidence available.
KeywordsInterest Rate House Price National Income Construction Cost Land Rent
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