Real house prices have increased by more than 30% on average across OECD countries over the past decade, raising concerns about market overvaluation and financial stability. Central banks routinely rely on the price-to-rent ratio as a valuation benchmark, assuming that it reverts to a stable mean and that house prices and rents move one-for-one in the long run. This paper tests these assumptions using quarterly data for 18 OECD economies from 1968 to 2022. Unit root tests show that log price-to-rent ratios are non-stationary across all 18 countries, violating constant historical benchmarking. Johansen cointegration tests find an unrestricted bivariate price-rent relationship with economically plausible signs in only 4 countries, and panel tests robust to cross-sectional dependence show no consistent panel-wide evidence. Incorporating real long-term interest rates and real disposable income increases the number of cointegrated cases to 8, underscoring that simple price-rent models omit key fundamentals and that long-run equilibria are highly country-specific. Overall, the results demonstrate that a persistent rise in the price-to-rent ratio does not by itself establish overvaluation, and valuation frameworks must account for macroeconomic fundamentals and heterogeneous housing market structures.

This paper examines the labor market consequences of tax-based fiscal consolidation in Italy over the period 2006–2019. Exploiting municipality-level data on personal income tax declarations and labor market outcomes across 579 local labor markets (LLMs), combined with the narrative fiscal shock series of Alesina, Favero, and Giavazzi (2020), we estimate impulse response functions using local projections instrumented by a Bartik shift-share design. Our identification strategy leverages cross-sectional variation in pre-existing tax intensity interacted with nationally-determined consolidation shocks, isolating the causal effects of direct tax increases from endogenous responses to local business cycles. The results reveal a one-percentage-point increase in direct taxes raises unemployment and suppresses employment rates over a four-year horizon.