John Norbert Joseph MuellbauerFBA (born 17 July 1944) is a British economist noted for influential contributions to applied microeconomics and macroeconomics,especially in consumer demand,housing economics,and macro-financial modelling.[4] He co-developed the Almost Ideal Demand System (AIDS)[5] with Angus Deaton and co-authored the graduate text Economics and Consumer Behaviour (1980).[6] Beginning in the late 1980s,he was one of the first economists to focus on the complex interactions between housing markets and the economy. Over subsequent decades,he extended his research to the roles of household balance sheets,credit constraints,and housing markets,developing econometric techniques to measure unobserved credit conditions and demonstrating how housing booms and busts transmit to the real economy.[4][7][8][9] In 2014,Muellbauer wrote a famous call for a 'quantitative easing for people' in the Eurozone.[10]
Muellbauer’s early research used duality theory to model welfare and demand,introducing “generalised linearity’’and “price-independent generalised linearity’’preference classes that enabled aggregation across heterogeneous households with fewer restrictions.[20][21] He applied duality to cost-of-living indices,[22] and household equivalence scales.[4][23] With Angus Deaton,he developed the Almost ideal demand system (AIDS) model,[5] a cornerstone of empirical demand analysis and one of the most cited American Economic Review papers.[24] Their book Economics and Consumer Behaviour integrated duality theory with applied demand systems and remains influential.[6]
From the late 1970s he shifted to macroeconomics,challenging New Classical models[25] and representative-agent Euler-equation approaches as in Robert Hall'sRandom walk model of consumption,to the life-cycle/permanent-income hypothesis.[4][26] With Anthony Murphy,he showed how housing markets and financial liberalisation increased borrowing against home equity,making consumption highly sensitive to house-price cycles,[27] anticipating research on collateral channels and the Great Recession.[7][9][28] His work highlighted institutional heterogeneity in transmitting credit and monetary policy shocks.[9][29]
Research with Anthony Murphy and Gavin Cameron developed regional house-price and migration models with links between labour markets and housing dynamics[15][30] illuminating regional evolutions. To measure shifts in credit conditions,Muellbauer introduced latent-variable methods—later termed the “Latent Interactive Variable Equation System’’(LIVES)—to derive credit-conditions indices from joint systems of consumption,debt,and mortgage data.[7][31] Extended with Janine Aron,Valerie Chauvin,John Duca and others to the US,Canada,Germany,France,and South Africa,this improved consumption models by incorporating credit supply shifts.[4]
A prominent critic of Dynamic stochastic general equilibrium models without financial frictions,he argued for credit-augmented consumption functions and household balance-sheet channels in central-bank policy models.[4][9][17][32] With Duca and Murphy he synthesised international evidence on mortgage finance,credit standards,and macroeconomic amplification[8][9][33]. He and Aron provided UK evidence on mortgage-default and foreclosure channels,[16] and later analysed macroprudential policy from a housing perspective.[9]
Selected publications
Deaton,A &Muellbauer,J (1980) Economics and Consumer Behaviour,Cambridge University Press
Deaton,A.,&Muellbauer,J. (1980). An almost ideal demand system. The American economic review,312–326.
↑ Muellbauer, John; Lattimore, Ralph (1995). "The Consumption Function: A Theoretical and Empirical Overview". In Pesaran, M. Hashem; Wickens, Michael R. (eds.). Handbook of Applied Econometrics. Vol.1. Oxford: Blackwell. pp.187–267. Retrieved 4 November 2025.
↑ Cameron, G.; Muellbauer, J. (2001). "Earnings, Unemployment, and Housing in Britain". Journal of Applied Econometrics. 16 (3): 203–220. doi:10.1002/jae.612.
↑ Duca, J.V.; Muellbauer, J. (2014). "Tobin LIVES: Integrating Evolving Credit Market Architecture into Flow-of-Funds Based Macro-Models". In Winkler, B.; Van Riet, A.; Bull, P. (eds.). A Flow-of-Funds Perspective on the Financial Crisis. Volume II(PDF). London: Palgrave Macmillan. pp.11–39. Retrieved 14 November 2025.
↑ Hendry, D.F.; Muellbauer, J. (2018). "The Future of Macroeconomics: Macro Theory and Models at the Bank of England". Oxford Review of Economic Policy. 34 (1–2): 287–328. doi:10.1093/oxrep/grx055.
↑ Duca, J.V.; Muellbauer, J.; Murphy, A. (2010). "Housing Markets and the Financial Crisis of 2007–2009: Lessons for the Future". Journal of Financial Stability. 6 (4): 203–217. doi:10.1016/j.jfs.2010.05.002.
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