Assignment Overview: This assignment is partly based on the attached article, “Long-run Trends in Housing Price Growth,” by M. Kohler and M. van der Merwe, Bulletin, September 2015, Reserve Bank of Australia. Please read this article carefully before attempting the questions. You will be required to demonstrate your understanding of economic concepts taught in the unit and relate them to the cases in the [url removed, login to view] Objectives: This assignment is designed to encourage you to think about the applications of economic concepts learned in this unit to real world [url removed, login to view]: Based on the attached Rubric, your assignment will be graded onyour use of appropriate economic theory and concepts, clarity ofexposition and overall quality of your answers. Questions: Answer all questions. Limit the total word count of your assignment to less than 3,000 words. Depthis encouraged over breadth: that is, it is more important that you demonstrate you understand a concept fully, rather than talk about 3 related concepts only cursorily. You are encouraged to provide necessary graphs, figures and data wherever possible. Please be careful in implementing referencing styles.

Question 1:In your own words, summarize the article, “Long-run Trends in Housing Price Growth,” by M. Kohler and M. van der Merwe, Bulletin, September 2015, Reserve Bank of Australia. In particular, what are themain messages of the article?

Question 2: Using appropriate diagrams, figures and data to answer: Are the Melbourne’s housing prices overheated? Why or why not?

Question 3: Suppose that the Melbourne’s housing market is perfectly competitive (i.e., many real estate developers). The city government decides to levy a buyer’s tax (specific tax) on housing purchases. Using appropriate diagrams to answer:

(a). Examine the impacts of this buyer’s tax on the equilibrium housing prices, consumer surplus,producer surplus, and total surplus (or social welfare).

(b). Can an increase in the buyer’s tax raise social welfare? Why or why not?

(c). Can an increase in the buyer’s tax raise city government’s tax revenue? Why or why not?

Question 4: Find at least three countries or economies that have housing policies or measures to stabilize the housing markets. Explain and comment their housing [url removed, login to view] your views or suggestions on the best measure to stabilize the housing markets that could be considered or used in Melbourne.

Compétences : Mathématiques, Rédaction de Rapport, Rédaction scientifique, Analyses statistiques

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