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The Rate of Return on Everything, 1870–2015 (2019)

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Re: The Rate of Return on Everything, 1870–2015 (2019)

#21

Post by betaby »

rybosworld wrote: post #12
betaby wrote: post #10

Earlier quoted context omitted.

That if won't happen anytime soon neither for the Earth in general nor USA in particular. Media often loves to move goals from population growth to agin g population to fertility rate, etc. All those while connected do not negate the fact that population is growing, and growing fast. That 'once population growth reaches zero or negative' is very theoretical and UN is constantly underestimating population growth. So n…

The population growth rate has consistently declined for 50+ years. It's around 0.8% from a peak of 2.2% in the 60's. There's no reason to think this trend will reverse.

Why should we use peak as a benchmark? Even 0.8% is insanely high, at such rate population will double in ~150 years.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#22

Post by OscarCunningham »

superb_dev wrote: post #9

How can an entire economy have a growth rate? Is it not measuring how much "new money" was put into the system?

It's nothing to do with money. We're literally producing more and better goods than the previous year. This can be due to better technology, more tools, or increasing population (and probably some other factors I forgot).

Re: The Rate of Return on Everything, 1870–2015 (2019)

#23

Post by bombcar »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

There have been two major real housing price jumps that I know of, and both are correlated with significant household income increases (at least nominal). Almost everything else can be factored into changes in what the "nominal house" is - from a one room cabin without plumbing to a McMansion with a three car garage.

One was the great urbanization post-world wars and the other was the great increase in dual-income households.

But if you factor things out and try to correct for as many variables as you can, housing is pretty "steady state" though the percentage of income directed toward it that's acceptable has crept up somewhat.

Shelter is, like food, one of the few real necessities and so it will be bid up to the point of pain or worse if there is a scarcity.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#24

Post by jetrink »

superb_dev wrote: post #9

How can an entire economy have a growth rate? Is it not measuring how much "new money" was put into the system?

Regardless of inflation or changes in the money supply, new techniques, new technologies, trade, and population growth can cause the value of everything bought and sold to increase over time. You can measure that value in dollars, or you can look at changes in the quantity and quality of goods and services.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#25

Post by georgeecollins »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

To help you conceptualize how that is possible: 100 years ago the world population was 2 billion, and now it is 8 billion. While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. That's why -- for example-- the US gov't in the 1850s could just hand out 40 acre plots of land to people. They can still do that, but it has to be way out in Alaska or something.

A hundred years ago it took much more labor to produce enough food to feed a person. Before the industrial revolution let's say 90% of all people were farmers. In 1850 in the US that was maybe 50% of all people were farmers. So the % of GDP going to food was much higher. Now 1-2 people can feed 100 in the west. That means less of your income proportionately goes to food.

Similar declines in the amount of labor required to produce a thing are happening in manufactured goods. So it may have once taken hundreds of hours of human labor to build a car, but now it takes much fewer.

So the wealth of everyone is going up faster than the supply of desirable land. That does mean people are getting priced out. But also people find ways to live on less land. Before the industrial revolution most families needed a farm to survive. Now many, many families can live in an apartment building in a city that takes way less land.

Re: The Rate of Return on Everything, 1870–2015 (2019)

#26

Post by sdwr »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

Housing has elastic demand, right?

Based on prices, you can have roommates, children can live with parents, etc.

Real housing costs could double tomorrow, and people would survive (not happily).

Re: The Rate of Return on Everything, 1870–2015 (2019)

#27

Post by _DeadFred_ »

monero-xmr wrote: post #14
idiotsecant wrote: post #5

Earlier quoted context omitted.

I wonder if this is still true once population growth reaches zero or negative. It seems like the baked in assumption of housing is that someone else is going to need it more tomorrow than you do today. I think this is an experiment the U.S. will begin running in earnest in the near future.

Buy housing in hyper desirable areas that rarely become more dense. Everyone always loves the beach, whether there are 1% fewer humans next year or not.

About that...

https://eos.org/articles/ocean-waves-mist-decades-old-pfas-i...

Re: The Rate of Return on Everything, 1870–2015 (2019)

#28

Post by tim333 »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

They don't. The numbers in the article include imputed rents.

If you plot house prices against incomes they do a wave pattern which is high at the moment. But they were even higher against income in 1845.

Article here has data from 1845 for the UK https://archive.ph/FRzaA

Re: The Rate of Return on Everything, 1870–2015 (2019)

#29

Post by throw0101d »

georgeecollins wrote: post #25
_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

To help you conceptualize how that is possible: 100 years ago the world population was 2 billion, and now it is 8 billion. While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast. That's why -- for example-- the US gov't in the 1850s could just hand out 40 acre plots of land to people. They can still do that, but it has to be way out in Alaska…

> While the housing stock is also increasing with that population growth, the actual amount of desirable land does not grow as fast.

"Buy land, they're not making it anymore." — Mark Twain

Re: The Rate of Return on Everything, 1870–2015 (2019)

#30

Post by [deleted] »

_yb2s wrote: post #18

I don't understand how housing can increase in cost in a stable steady manner, as a fraction of household income over long periods of time like more than 100 years. It seems to defy logic, so it makes me suspect how it is being calculated when people claim that housing costs have gone up by massive amounts. Since only a small increase would price a large number of people out of the market- it seems logical that housi…

[deleted]
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