Any economist here
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If government makes it easy to take house mortgages, do you think it will result in - GDP increase & inflation increase?
You're talking about one of the classic causes of housing bubbles. Deregulation and easy access to mortgages leading to increased debt relative to GDP (rather than increasing GDP - increasing GDP does not really relate to easier credit). If you want to see the type of effects I'm talking about, have a read of this[^].
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If government makes it easy to take house mortgages, do you think it will result in - GDP increase & inflation increase?
Houses are only included in a GDP calculation if they are new builds. Second-hand goods, including the buying and selling of existing housing stock is not included for calculating GDP. Inflation is a different question altogether, and mortgages will have an effect.
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If government makes it easy to take house mortgages, do you think it will result in - GDP increase & inflation increase?
Tying up money in house repayments will of course reduce inflation, unless house prices are included in the calculation.... :) As for GDP, yeah, what the last guy said.
"The whole idea that carbon dioxide is the main cause of the recent global warming is based on a guess that was proved false by empirical evidence during the 1990s." climate-models-go-cold
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You're talking about one of the classic causes of housing bubbles. Deregulation and easy access to mortgages leading to increased debt relative to GDP (rather than increasing GDP - increasing GDP does not really relate to easier credit). If you want to see the type of effects I'm talking about, have a read of this[^].
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increasing GDP does not really relate to easier credit
From what I heard, GDP isn't really a good measure of anything really. As your GDP would increase if Bill Gates would move to the UK, but you wouldn't necessarily be any better off for it. I seem to recall that GDP came into play after WW2 as a measure of how well a country was doing (when it came from nothing really) and was really never intended to be used widely for any economical understanding. As you quoted statement can be related to GDP if nobody could get any money to invest in new equipment at your workplace etc. But GDP wouldn't tell you if it was a good idea or not.
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If government makes it easy to take house mortgages, do you think it will result in - GDP increase & inflation increase?
It will impact inflation yes - but because of the creation of money behind those mortgages will increase the amount of money in the economy. What happens is - you walk into the bank and borrow £250k. The bank creates an asset (the mortgage) from that and transfers electronic money backed by that asset to you. They have a zero sum (ish) thing going on but £250k that didn't exist in the economy before the transaction has come into being. If everyone does this vast sums of money "just come into being" and more money chasing the same supply of products and services pushes up prices. Something like 90% of the money in the UK economy came into being this way.
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If government makes it easy to take house mortgages, do you think it will result in - GDP increase & inflation increase?
AndyInUK wrote:
Any economist here
No :suss:
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