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Date: May 02, 2019

14th Manchot lecture held by Professor Monika Piazzesi

It has been a great pleasure to welcome Professor Monika Piazzesi (Stanford University) back in her Alma Mater for the 14th Manchot Lecture on January 24, 2019.
Piazessi’s research focuses on asset pricing and time series econometrics. In her lecture “Crazy house prices? Lessons from recent booms and busts” she analyzed the causes of the U.S. house price booms and busts, and attempted to draw lessons from the last such episode. Finally, Professor Piazzesi analyzed how that episode compares to the recent German house-price boom.

To explain the US housing crisis, Piazessi focused first on credit conditions: too much credit was awarded that lead to stronger boom in cheaper segments, because poorer households borrowed more and bid up prices of low-quality homes. Second, buyers expected prices to smoothly grow with rents and did not foresee the boom and bust periods.
In Germany the span between house prices and rents was less pronounced.
Her research shows that in Germany prices did grow proportionally to rents and that expectations have been too pessimistic.
Where will prices go from here? According to Piazzesi, consumer learning models typically predict a correction at the end of a boom.
The lecture was well received by the public, as well as by the students and faculty of the Department of Economics.
If you are interested in her presentation, please contact us.

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