A Trip


The CEHMB is in the same mould as the "Cambridge History of Capitalism" (CHC), which we reviewed a few weeks ago . Both are general surveys of capitalism, with a greater emphasis on breadth than depth. Both contain the work of an all-star list of economic historians (if we are going to get really petty about it, the CEHMB line-up may just have the edge over CHC).

These variations have several causes: German housing supply is more responsive than Dutch supply; the German rental market is far more developed; mortgage-interest payments are tax-deductible on the orange side of the countries’ shared 500km border, and not in Germany. For the rational-minded, gaps this wide raise questions.

How strong is it?

But a closer look at how the researchers produced the $6.8 trillion figure badly damages their claim. Calling it a back-of-the-envelope estimate would be undeserved praise. The $6.8 trillion calculation was made by Xu Ce of the National Development and Reform Commission, an economic planning agency, and Wang Yuan of the Academy of Macroeconomic Research, a think-tank under the commission.

Staying Dutch

It came on the heels of a second quarter in which real output expanded at a 4.6% rate. Indeed, in four of the last five quarters GDP has increased by 3.5% or more (and by 4.5% or more in two of the last five quarters). The American economy hasn't strung together five quarters like that since the late 1990s. Neither is that the only encouraging indicator. Over the last year employment has grown at the fastest pace since 2006 and the pace of hiring seems to be trending upward. It is so tempting to conclude that all is at last well in America.