I test whether house prices and rents are related in the long and short run using a new quarterly dataset for 18 OECD countries from 1968 to 2021. If agents treat houses as assets, annual rents correspond to the yearly net present value of house expenses, a function of prices. It follows that house prices and rents should be positively related. I find evidence of cointegration in only half of countries using Johansen tests. I observe a negative response of rents to a positive shock in house prices. Two factors might explain these results: heterogeneity in house quality reducing dwellings' comparability, and rental sector size relieving demand pressure on rental prices.

This paper examines the distributional and 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. Tax-based consolidation compresses middle-income shares while benefiting both the top and bottom of the income distribution. High-income earners experience income concentration via capital and business income channels, while low-income households benefit from transfer payments linked to fiscal stabilization. These findings challenge the notion that tax-based austerity is uniformly regressive, instead pointing to a hollowing-out of middle-income groups — a result with important implications for the political economy of fiscal adjustment.