The Tinbergen Rule in Economics: How to Smooth Out the Housing Cycle

Ed Lemur: Macroeconomic stability is an important goal for policymakers and economists to aim for. We want to avoid those periods of unwanted idleness that you spoke about so articulately because of the human costs. What can we do to smooth out these cycles, to get a grip on the housing cycle? Joseph Walker: For the United States, it's really quite simple. You keep an eye on the housing starts and when they're high and getting higher, that's the time to raise interest rates.