Peter Tulip's web page

About me:

I am Chief Economist at the Centre for Independent Studies.


Previously I worked at the Reserve Bank of Australia, the US Federal Reserve Board of Governors,  the OECD and Commonwealth Treasury.


My recent research focusses on housing and monetary policy. 


Most of my work for the CIS is available at


Contact details 

CV  (as of 2023) 


The main purpose of this web page is to provide access to past research papers, related files and stuff that is too niche for the CIS website.  Here they are in reverse chronological order: 




Profile of me in the SMH/Age; 18/8/2023


CAMA RBA Shadow Board
            Monthly commentary from September 2022


The Rental Crisis
Submission to the Senate Community Affairs Committee; August 2023


Rental and Housing Affordability
Submission to the Victorian Legislative Council’s Legal and Social Issues Committee; July 2023


Where should we build new housing? Better targets for local councils

·         CIS Analysis Paper 45; March 2023

·         Abstract: Recent government reports have called for high housing targets for local councils as a way to improve housing affordability.  However, how these targets should be set has not been specified.  This paper develops simple targets tied to clear principles and data. Using Sydney as a case study, the targets call for a large increase in construction in the affluent eastern and inner suburbs, where the excess demand for apartments is most severe.  This contrasts with recent construction patterns, where high-density construction has been concentrated in lower income areas in the western suburbs.

·         Download Data (625Kb zip file)

·         I discuss on Sky News 13/7/2023

Comment on Prosper's "Planning deregulation, housing supply and affordability";  January 2023 

Structural Reform of the Reserve Bank of Australia 



The Need for Reform of Land use Policy 


Misunderstandings about Planning Restrictions


CICIS Submission to Parliamentary Inquiry into Housing Affordability and Supply


Does high-rise development damage neighbourhood character? (With Zachary Lanigan)


Planning restrictions harm housing affordability


 The Apartment Shortage (with Keaton Jenner)

·         RBA Research Discussion Paper, 2020-04, August 2020

·         Abstract:  This paper measures the excess demand for apartments in Australia's largest cities. We estimate that home buyers will pay an average of $873,000 for a new apartment in Sydney though it only costs $519,000 to supply, a gap of $355,000 (68 per cent of costs). There are smaller gaps of $97,000 (20 per cent of costs) in Melbourne and $10,000 (2 per cent of costs) in Brisbane. The large gaps are sustained by planning restrictions. The shortage of apartments is most severe in the inner suburbs of Sydney, where height limits prevent more construction. Elsewhere, restrictions on converting low-density housing to apartments are important. High-rise apartments are a much less costly means of supplying extra housing than the medium-density housing that some planners favour.

·         Non-technical summary

·         Data and programs

·         Press: AFR,SMH,Australian;   


Cost-benefit Analysis of Leaning against the Wind (with Trent Saunders) 

·         RBA Research Discussion Paper, 2019-05, July 2019 

·         Abstract:  Setting interest rates higher than macroeconomic conditions would warrant due to concerns about financial instability is called leaning against the wind".Many recent papers have attempted to quantify and evaluate the effects of this policy. This paper summarises this research and applies the approach to Australia.
The papers we survey see the benefit of leaning against the wind as avoiding financial crises, such as those that affected Australia in 1990 or other countries in 2008. Most of the international research finds that interest rates have too small an effect on the probability of a crisis for this benefit to be worth higher unemployment. Using Australian data, we find similar results. We estimate the costs of leaning against the wind to be three to eight times larger than the benefit of avoiding financial crises. However, research has not yet quantified the increased resilience of household balance sheets, which may be an extra benefit of leaning against the wind.

·         Data and programs 

·         Press: AFR;  ParliamentaryHearing 9/8/2019 pp9-10


A Model of the Australian Housing Market  (with Trent Saunders)

·         Economic Record Vol. 96 S1 June 2020 

·         RBA Research Discussion Paper, 2019-01, March 2019

·         Abstract: We build an empirical model of the Australian housing market that quantifies interrelationships between construction, vacancies, rents and prices. We find that low interest rates (partly reflecting lower world long-term rates) explain much of the rapid growth in housing prices and construction over the past few years. Another demand factor, high immigration, also helps explain the tight housing market and rapid growth in rents in the late 2000s. A large part of the effect of interest rates on dwelling investment, and hence GDP, works through housing prices.

·         Appendices, data and programs

·         Press: AgeAustralian;AFR1, AFR2; Guardian 


The Effect of Zoning on Housing Prices (with Ross Kendall)

·         RBA Research Discussion Paper, March 2018

·         AbstractZoning regulations provide benefits, but they also restrict housing supply and hence raise prices. This paper quantifies their importance by comparing prices to the marginal costs of supply at different points in time. For detached houses, marginal costs comprise the dwelling structure and the land that other home owners need to forego. Relative to our estimates of these costs, we find that, as of 2016, zoning raised detached house prices 73 per cent above marginal costs in Sydney, 69 per cent in Melbourne, 42 per cent in Brisbane and 54 per cent in Perth. Zoning has also raised the price of apartments well above the marginal cost of supply, especially in Sydney. We emphasise that this is not the amount that housing prices would fall in the absence of zoning. The effect of zoning has increased dramatically over the past two decades, likely due to existing restrictions binding more tightly as demand has risen.

·         Less-technical Summaries: 

o   Cato Research Brief in Economic Policy No 124

o   RBA Research shows that zoning restrictions are driving up housing prices

By John Daley, Brendan Coates and Trent Wilshire, March 8, 2018

·         Responses to Questions

·         Data and programs  

·         Press clips: SMH 9/3/2018 p1; AFR 9/3/2018 p3; Australian9/3/2018 p7


Anticipatory Monetary Policy and the Price Puzzle(with James Bishop)

·         RBA Research Discussion Paper, May 2017


Gauging the Uncertainty of the Economic Outlook Using Historical Forecasting Errors: The Federal Reserve's Approach (with DavidReifschneider)

        International Journal of Forecasting, October, 2018

        FEDS working paper 2017-020

        RBA Research Discussion Paper, February 2017 

        Abstract: The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve regularly publishes participants qualitative assessments of forecast uncertainty, expressed relative to that seen on average in the past. The benchmarks used for these historical comparisons are the average root mean squared forecast errors (RMSEs) made by various private and government forecasters over the past twenty years. This paper documents how these benchmarks are constructed and discusses some of their properties. We draw several conclusions. First, if past performance is a reasonable guide to future accuracy, considerable uncertainty surrounds macroeconomic projections. Second, different forecasters have similar accuracy. Third, estimates of uncertainty about future real activity and interest rates are now considerably greater than prior to the financial crisis; in contrast, estimates of inflation accuracy have changed little. Finally, fan charts, constructed under certain assumptions and viewed in conjunction with the FOMC’s qualitative assessments, provide a reasonable approximation to future uncertainty.



Okun's Law and Potential Output (with David Lancaster)

         RBA Research Discussion Paper, December 2015 



The Effect of the Mining Boom on the Australian Economy

        RBA Bulletin; December 2014 


"The Effect of the Mining Boom on the Australian Economy" (with Peter Downes and Kevin Hanslow)

    RBA Research Discussion Paper; August 2014 


"Is Housing Overvalued?" (with Ryan Fox)

        RBA Research Discussion Paper; July 2014

         Press clips: The SMH (15/7/2014, p1); The AFR (15/7/2014, p1); the Age (9/7/2015, p1).
 The Smart Money supplement to the AFR did a special issue focusing on our paper on 19/7/2014. Here is the lead article.

         Abstract:  This paper examines whether it costs more to own a home or to rent. We argue this is a useful criterion for assessing housing overvaluation. We use a new Australian dataset, which includes prices and rents for matched properties, letting us value housing in levels. We find that if real house prices grow at their historical average pace, then owning a home is about as expensive as renting. If prices grow more slowly, as some forecasters predict, the framework used in this paper suggests that the average home buyer would be financially better off renting. We decompose house prices into contributions from rents, interest rates and expected capital gains, which may help policymakers in the detection of housing bubbles. Recent data do not show signs of a bubble.


"Fiscal Policy and the Inflation Target"

         International Journal of Central Banking; June 2014, pp 63-96

   o   Discussion by Johannes F. Wieland

         RBA Research Discussion Paper; March 2014 (slightly longer version)

         Abstract:  Low interest rates in the United States have recently been accompanied by large fiscal stimulus.  However, discussions of monetary policy have neglected this fiscal activism, leading to over-estimates of the costs of the zero lower bound and, hence, of the appropriate inflation target.  To rectify this, I include counter-cyclical fiscal policy within a large-scale model of the US economy.  I find that fiscal activism can substitute for a high inflation target.  If fiscal policy behaves as it has recently, then an increase in the inflation target is not warranted, despite increased volatility of macroeconomic shocks.

         Supporting material:

o  Fed staff memo on inflation targeting (Elmendorf et al, 2005)
"Considerations Pertaining to the Establishment of a Specific, Numerical, Price-Related Objective for Monetary Policy" memo to the US Federal Open Market Committee, by Doug Elmendorf, David Wilcox and others, January 21, 2005.
This memo can also be obtained by FOI request to the Board of Governors.

o  FRB/US equations (updated versions of this file are available from the Fed, on request).

   o  FRB/US variable list


"Estimates of Uncertainty around the RBA's Forecasts" (with Stephanie Wallace)

        Reserve Bank of Australia, Research Discussion Paper, 2012-07 (link to paper and data)  

        Abstract: We use past forecast errors to construct confidence intervals and other estimates of uncertainty around the Reserve Bank of Australia's forecasts of key macroeconomic variables. Our estimates suggest that uncertainty about forecasts is high. We find that the RBA's forecasts have substantial explanatory power for the inflation rate but not for GDP growth.


"Has the Economy Become More Predictable?  Changes in Greenbook Forecast Accuracy"

        Journal of Money, Credit and Banking, Vol 41, No 6 (September 2009) pp1217- 1231. (gated link)

         FEDS working paper 2005-31



Gauging the Uncertainty of the Economic Outlook from Historical Forecasting Errors (with Dave Reifschneider)


         Version of August 2008(shorter, updated) 


Financing Higher Education(with Bruce Chapman) 

        in Peterson, Baker, McGaw (editors) International Encyclopedia of Education, Elsevier,2010 vol 4 pp 499-506

        CEPR Discussion Paper 574


"Do minimum wages raise the NAIRU ?"

        B. E. Journal of Macroeconomics, 2004, Vol. 4: No. 1, Article 7.

        An ungated link to the paper (400KB pdf )


        FEDS working paper, August 2000 (166KB pdf ) ;  Data  

        The Economist says nice things about the paper, Economic Focus of February 1, 2001


OECD Working Papers and Survey Chapters 

''Financing Higher Education in the United States,'' No 584 (2007).

''Primary and Secondary Education in the United States'' (with Gregory Wurzburg), No 585(2007).

''Financial Markets in Iceland,''No 549 (2006).

Potential Employment, Chapter 2 of Survey of the United States, 2007

Monetary Policy, Chapter 2 of Survey of Iceland, 2006

Greg Mankiw is impressed by the 2007 US Survey 


 "Polynomial Adjustment Costs in FRB/US" with Flint Brayton and Morris Davis


"Equilibrium unemployment with staggered wages"  Draft of July 2000