My understanding is that the Federal reserve's FOMC (I think this stands for federal open market commission) sets a policy interest rate - the rate at which the Federal Reserve lends money to large for-profit banks - with the intention of keeping an inflation measure called Core PCE near 2% and and keeping unemployment as low as it can be without making Core PCE rise a lot. When they raise their policy rates that is supposed to raise interest rates throughout the economy and so make economic activities a bit smaller and less numerous, and when they lower interest rates they hope to do the opposite. AFAIK home rental is a big component in Core PCE, so bringing rents down should be expected to bring Core PCE and Fed policy interest rates down, all else being equal. Would large yimby reforms raise USD interest rates by attracting lots of credit, labor, materials and other inputs and making those inputs more scarce? Would yimby reforms lower USD interest rates by lowering Core PCE and thus policy rates? Do lower interest rates, all else being equal, lower global poverty? Thank you weekend warriors
Intersectoral reallocation of resources doesn't mean an overall increase in demand, and hence even influx of labour and capital into YIMBY-initiated housebuilding won't cause higher inflation economy-wide - if anything, it pushes it down due to expanded supply bringing down rents, and as you note housing is an important part of PCE.
Generally, you would prefer lower interest rates from the perspective of LMICs, because you risk debt crises when high US interest rates intersect with LMIC dollar denominated debts, plus everything from food subsidies to investing in health/education/infrastructure becomes far more difficult.
If increased homebuilding does not raise inflation economy-wide, might it still make credit a bit more expensive by raising competition for credit?
If more direct effects on interest rates of increased homebuilding are smaller than effects on policy rates via lower rent-->lower inflation, should we surmise that US yimbyism may be a useful intervention for augmenting global development and reducing global poverty?