The FRED graph above shows public lending (positive values) and public borrowing (negative values) for the United Kingdom since the year 1700. The timeline includes large downward swings that are dominated by wars:

• War of the Spanish Succession and Queen Anne’s War (1701-1714)
• War of the Austrian Succession (1740-1748)
• Seven Years’ War (1756-1763)
• American Revolutionary War and associated wars (1775-1783)
• Seven coalition wars, including the French Revolution and Napoleonic wars (1792-1815)
• World War I (1914-1918)
• World War II (1939-1945)

Of course, the United Kingdom fought many more wars, mostly in its colonies. But those seem to have been part of the normal course of operations, whereas the wars highlighted above have had a serious impact on government finances. Since World War II, the spikes in borrowing are not linked to wars, but to economic conditions, such as the stagflation of the 1970s and two recessions, and the corresponding fiscal policy responses. The COVID-19 pandemic is not yet included in these historical data.

How this graph was created: Search FRED for “public borrowing UK.”

Suggested by Christian Zimmermann.

This post falls on February 14, Valentine’s Day, and our thoughts turn sweet. Specifically, to chocolate.

Chocolate is ubiquitous and delicious and sometimes frivolous, especially while strolling through the “impulse purchase” lanes of the supermarket. But chocolate can be of major importance to those who produce it, in particular to those who produce its raw material, cocoa.

The largest exporter of cocoa is Côte d’Ivoire (Ivory Coast) in West Africa. Cocoa beans and cocoa derivatives represent close to 40% of the exports for this country of 26 million residents. Cocoa matters a lot to Côte d’Ivoire.

The FRED graph above shows a couple of things:

1. The price of cocoa is quite volatile, which happens with primary commodities. But price volatility can have big effects on economies that depend on that production.
2. For cocoa in Côte d’Ivoire, we see that higher prices help reduce the country’s public debt. Of course, many other factors affect the public debt, such as other economic activity, debt conditions, and financial markets.

As you enjoy your chocolate, take a moment to consider its economic impact. And the sweetness of FRED data.

How this graph was created: Search FRED for “cocoa price.” From the graph, click on “Edit Graph,” open the “Add Line” tab, and search for and select “Cote d’Ivoire debt.” Use the “Format” tab to move the y-axis for the second line to the right side. Restrict the sample period to when data are available for both lines.

Suggested by Christian Zimmermann.

“Every spirit builds itself a house; and beyond its house, a world”

—Nature, Ralph Waldo Emerson (1803-1882)

Today, the FRED Blog considers a more down-to-earth version of Emerson’s lofty concept: How is a home price index built? The FRED graph above starts us off by showing three headline indicators of U.S. home prices:

• The all-transactions house price index for the United States (in green), produced by the U.S. Federal Housing Finance Agency, measures quarterly changes in single-family home values. It uses sample data from repeated sales of the same property. It is not adjusted for seasonal changes in home values. First released in 1996, this index extends back to the first quarter of 1975.
• The S&P/Case-Shiller U.S. national home price index (in red), produced by Standard and Poor’s Dow Jones Indices, measures monthly changes in single-family home values. It also uses sample data from repeated sales of the same property, although it considers only “arm’s length” transactions (i.e., those where the buyer and seller are separate parties). This index, like the previous one, is not seasonally adjusted. First released in 2006, this index extends back to December 1987.
• The Zillow home value index for all homes including single-family residences, condos, and co-ops in the United States (in blue), produced by Zillow, measures the typical dollar value of a composite of homes. It is produced monthly, using sample data from a proprietary estimate of a home’s market value called a “Zestimate.” This value is “smoothed seasonally adjusted” to account for changes in home values related to the calendar. First released in 2019, this index extends back to January 2000.

So. What does the graph tell us? All three indexes show a marked up-and-down cycle in the late 2000s and faster growth in home prices after 2020. In fact, despite their substantially different methodologies, the last two (monthly) indexes report very similar home price growth, almost 30%, between February 2020 and November 2021.

How this graph was created: Search for and select “Zillow Home Value Index (ZHVI) for All Homes Including Single-Family Residences, Condos, and CO-OPs in the United States of America.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “S&P/Case-Shiller U.S. National Home Price Index” and “All-Transactions House Price Index for the United States.”

Suggested by Diego Mendez-Carbajo.