Northern Irish House Prices

In my first academic post (economics lecturer at the University of Ulster), I taught an Econ101 module from 1997 to 1999. As part of the assessment for this module, I had an essay question which went as follows - what explains the large increase in Northern Ireland house prices over the past decade? Little was I to know that house prices would keep on rising until 2007. By some measures, the Northern Irish property bubble is one of the largest property bubbles in history. We therefore shouldn't be surprised by the news today that house prices are now at or below their 2005 levels and that sales are less than one third of their peak levels. Anyone who has tried to sell a house will realise just how bad the market is at present, which may suggest that house prices will fall further.

Clive Walker, one of my soon-to-be former PhD students, has been doing some really nice work on the role of the media during the housing market bubble. In his thesis, he finds that media coverage of the housing market expanded rapidly during the 2000s and that media coverage affected the housing market.

The Economics of Global Warming

The Berkeley Earth Project , an independent study of global warming, has found that the earth has become a degree warmer over the past half century. However, the statistical uncertainty surrounding pre-1920 estimates makes it very hard to say much about long-term trends - click here for graph . This is one of my concerns with the global warming debate - we simply don't have trustworthy long-run data which looks at temperature changes over the last millennium (or two). My second concern with the global warming debate is that it is very hard to prove any sort of casual link between global warming and human activity. The scientists may be able to show correlation between global warming and our production of carbon dioxides etc., but correlation is not causation. My third concern with the debate is that those who are sceptical or agnostic are stereotyped as flat-earthers or intellectually-challenged crackpots. This only stifles debate and the progress of science itself.

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press .

The Failure of Herstatt Bank

As an undergraduate, I was taught about the failure of Herstatt Bank in 1974 and Herstatt risk. This bank was only the 35th largest bank in Germany at the time so why would anyone be interested in studying its failure? Herstatt failed because of its involvement in risky foreign exchange business. When it closed its doors on 26 June 1974, counterparty banks (mainly in New York) had not received dollars due to them because of time-zone differences - this is known as settlement risk. The cross-jurisdictional implications of its failure resulted in the Bank for International Settlements setting up the Basel Committee on Banking Supervision and Herstatt's failure was a key reason for the establishment of real-time gross settlements systems, which ensures that payments between two banks are executed in real time. The Bank of England's Ben Norman has an interesting post on Herstatt over at the Bank's new blog ( Bank Underground ). As well as giving an excellent overview of

Finance: Past, Present and Future

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