In this note, I explain some of the macroeconomics of the long-term economic value concept and some of the methodological issues in trying to estimate long-term economic value. I also highlight trend real exchange rate depreciation as a factor that may act as a drag on nominal property prices over the coming years. Finally, I emphasise that any estimate of long-term economic value is bound to be quite uncertain, further reinforcing the case for a ‘two-part’ payment scheme.
Month: September 2009
I have written a piece for the Ireland for Europe Blog.
Patrick Honohan has been appointed Central Bank governor—Irish Times story here. Congratulations to Patrick and to the Minister for Finance for making a truly excellent appointment.
A legal question. What exactly is the Minister’s role in the NAMA valuation process?
Everybody’s favourite Swede has weighed in again, this time in an interview with RTE’s Tony Connolly. Morning Ireland had a excerpt from the interview this morning and apparently there will be more on the Six-One TV News tonight.
It is interesting to see Mr. Lundgren make an intervention again on this topic. After his appearences here a few months ago, the government spin was that he was wholly supportive of their approach—see for instance, here. I found that interpretation untenable but the sublety of Mister Lundgren’s words and the effectiveness of the government’s PR approach meant that they got away with it.
I think it’s pretty clear now that Mr. Lundgren does not support the government’s approach and one must wonder whether his intervention was prompted by a discomfort at being misrepresented by the Irish government.
I guess it’s back to the drawing board on international support for NAMA and long-term economic value. Time to fall back to claiming that the IMF fully support this approach. No, wait. we mean the ECB. No, wait, we mean Alan Ahearne. Listen, we’ll get back to you.