John Muellbauer's 1996-97 Annual Research Report

John Muellbauer (Official Fellow) continued work in the general area of his ESRC project with David Hendry on ‘Modelling Cointegrated Processes’. Their application to the ESRC for another three years of funding to work on various aspects of non-stationary models, particularly models subject to structural shifts, was successful. Funding for the next phase begins in January 1998. He continued work on a number of housing, credit and consumption related issues, including papers on the measurement of financial deregulation in the UK mortgage market, on the implications of transactions costs and credit constraints in housing markets, and a new project with Janine Aron, part of a World Bank study, on saving in South Africa. With Gavin Cameron, he studied UK macroeconomic policy feedback rules and the shifts therein following the Collapse of Bretton Woods international exchange rate system in the early 1970’s and the coming to power of Mrs Thatcher. Deriving the implications of such shifts for private sector behaviour is a constructive response to the famous ‘Lucas critique’ against using econometric models for policy purposes and should lead to improvements in future macroeconometric models. He edited a collection of papers on business cycles for the Oxford Review of Economic Policy and undertook related work on productivity shocks.

He presented papers at the European Network of Housing Economists Conference in Vienna, the Royal Economic Society Conference in Stoke on Trent, a conference on mortgage default at the Council of Mortgage Lenders, the International Conference of the American Real Estate and Urban Economics Association in Berkeley, California and the European Econometric Society in Toulouse. He gave three seminars in Oxford and seminars at the University of Glasgow, University College London and University College, Dublin. On leave in the Michaelmas and Trinity Terms, he served his third term as M.Phil examiner in Hilary Term. He continued on the Council of the Royal Economic Society and was elected a Fellow of the British Academy.