What we’re reading (2/20)
“Why Home Construction Has Slumped for Decades” (William Kerr, Harvard Business Review). “The modern home that we build today is more advanced, larger and has more amenities than the home we built in the 1970s. If you look at any measure of the number of houses built per construction employee, that fact does bear some responsibility for the sector not producing as many units. But even after we account for these quality differences, we still find the industry is dominated by very small employers. Often 40 percent of the industry is comprised of firms that have fewer than five employees. In the auto industry, that fraction is about 2 percent.”
“Dollar Hits Year-To-Date Lows As Bulls Get Nervous” (Reuters). “The yen shot to a 2-1/2 month high on Friday on the back of a jump in Japanese inflation, while the dollar was set for a third weekly drop in a row as traders calculated the start of Donald Trump's second term has been mostly bluster on the tariff front.”
“From Japan, A Hard Lesson About A Weak Currency” (New York Times). “For decades in Japan, it was accepted as gospel: A weak currency makes companies more competitive and bolsters the economy. Part of that promise came true last year: As the yen tumbled to a 37-year low against the dollar, big brands like Toyota Motor reported the highest profits in Japanese history. Stocks soared to record highs. Yet for the majority of Japanese households, the weakened yen has done little more than drive up the costs of basic living expenses, such as food and electricity. Figures released Monday showed that while Japan’s economy picked up pace in the second half of 2024, its inflation-adjusted growth rate for the full year slowed to 0.1 percent. That was down from 1.5 percent the prior year.”
“A Crypto Fairy Tale” (Owen Lamont). “Crypto raced up the spiral stairs to the top of the tower. Throwing open the door, he discovered … nothing. The room was empty. There was no Princess Use Case. There never had been. He put his head in his hands and wept.”
“Might We End Up With A Modest Stagflation?” (Marginal Revolution). “If you accept the notion that inflation is more likely to rise than fall, and that the labor market is more likely to worsen than improve, then the chances for a modest stagflation are reasonably high.”
