ID :
27609
Fri, 10/31/2008 - 00:11
Auther :
Shortlink :
https://www.oananews.org//node/27609
The shortlink copeid
U.S. housing market to stabilize in near future: economist
By Tony Chang
SEOUL, Oct. 30 (Yonhap) -- Robert Mundell, a Nobel laureate in economics,
forecast Thursday that the slumping U.S. housing market will quickly recover as
lower interest rates bring back demand.
"Housing prices could go down more, maybe by another 10 percent, but no more than
that," Mundell, a Columbia University economics professor, said at a press
conference in Seoul.
The Canadian scholar, the recipient of the 1999 Nobel Prize in economics, was
visiting South Korea to give a keynote presentation at the World Leaders Forum
held here to commemorate the 60th anniversary of the founding of South Korea.
Mundell forecast a rebound in the housing market, which he said fell by 30
percent over the past year, as low interest rates are expected to bring people
back to the housing market.
"What that means is that over the next few months' time, the market itself would
work off excess investories ... then housing prices will stabilize again," the
economist said.
The U.S. Federal Reserve on Wednesday cut a key interest rate by a half
percentage point to 1 percent, the lowest in decades, to help boost the faltering
markets amid worries of recession affected by the global financial crisis.
The effect of Wednesday's currency swap arrangements between the Fed and central
banks of four emerging economies, including South Korea, will bring confidence to
the market, Mundell said, but underscored that there won't be any particular
"systematic effect" on the value of the currencies.
"I don't think it (the value of the currencies) will be affected a lot. It's a
contingency thing. If there is a sudden shock to the financial system, the
measure will be good for it (a contingency)."
He also advised modesty when asked about measures to make the Korean won more
recognizable in the global market, but recommended that the currency be managed
in a way to make it "respected."
"You wouldn't want the won to be used as a reserve currency, would you?" Mundell
said, assessing the status of the Korean won that is currently standing
shoulder-to-shoulder with the Australian and the Canadian dollars.
The professor, often referred to as the "father of the euro," also forecast that
the U.S. dollar will remain the dominant market currency for a long time.
"Currencies that become dominant have to have a reason for confidence in it. What
confidence in currency means is it has to have a long run," the professor said.
Mundell developed a pioneering theory of optimum currency even before the idea of
the single European currency was hatched in the 1970s.
(END)
SEOUL, Oct. 30 (Yonhap) -- Robert Mundell, a Nobel laureate in economics,
forecast Thursday that the slumping U.S. housing market will quickly recover as
lower interest rates bring back demand.
"Housing prices could go down more, maybe by another 10 percent, but no more than
that," Mundell, a Columbia University economics professor, said at a press
conference in Seoul.
The Canadian scholar, the recipient of the 1999 Nobel Prize in economics, was
visiting South Korea to give a keynote presentation at the World Leaders Forum
held here to commemorate the 60th anniversary of the founding of South Korea.
Mundell forecast a rebound in the housing market, which he said fell by 30
percent over the past year, as low interest rates are expected to bring people
back to the housing market.
"What that means is that over the next few months' time, the market itself would
work off excess investories ... then housing prices will stabilize again," the
economist said.
The U.S. Federal Reserve on Wednesday cut a key interest rate by a half
percentage point to 1 percent, the lowest in decades, to help boost the faltering
markets amid worries of recession affected by the global financial crisis.
The effect of Wednesday's currency swap arrangements between the Fed and central
banks of four emerging economies, including South Korea, will bring confidence to
the market, Mundell said, but underscored that there won't be any particular
"systematic effect" on the value of the currencies.
"I don't think it (the value of the currencies) will be affected a lot. It's a
contingency thing. If there is a sudden shock to the financial system, the
measure will be good for it (a contingency)."
He also advised modesty when asked about measures to make the Korean won more
recognizable in the global market, but recommended that the currency be managed
in a way to make it "respected."
"You wouldn't want the won to be used as a reserve currency, would you?" Mundell
said, assessing the status of the Korean won that is currently standing
shoulder-to-shoulder with the Australian and the Canadian dollars.
The professor, often referred to as the "father of the euro," also forecast that
the U.S. dollar will remain the dominant market currency for a long time.
"Currencies that become dominant have to have a reason for confidence in it. What
confidence in currency means is it has to have a long run," the professor said.
Mundell developed a pioneering theory of optimum currency even before the idea of
the single European currency was hatched in the 1970s.
(END)
