EconoMonitor

Economics Blog Aggregator

    Global Macro

  • naked capitalism

    Matt Stoller: Why Is Alan Greenspan’s Lawyer, Scott Alvarez, Still Controlling the Federal Reserve? (AIG Bailout Trial)

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  • Brad DeLong's Grasping Reality...

    Did You Know That "Irk" Makes a Synonym of Itself in Rot13?: Live from Crows Coffee

    Stolen from http://unfogged.com My quality of life is diminished by the fact that I am not a fluent reader of rot13. Is there a good online drill site?

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  • Marc to Market

    Preliminary Thoughts about the ECB and Corporate Bonds

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  • TIME

    One-Third of Middle-Class Americans Aren’t Saving Anything for Retirement

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  • Beat the Press

    Cut the Fracking Nonsense: Demand, not Supply Explains Low Oil Prices

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  • The Big Picture

    10 Wednesday AM Reads

    My morning train reads: • U.S. Stocks Surge; Nasdaq Up 2.4% (WSJ) but see Hong Kong Stocks Defy Protests to Post World’s Best Gain (Bloomberg) • Investors Hiring: Mathematicians and Artists Need Apply (Institutional Investor) • Cassidy: Is the Chinese Economy About to Fall Off a Cliff? (New Yorker) see also The Top 10 U.S. States Where Chinese Are Investing in Real Estate (Real Time Economics) • A Skeptic’s View of Today’s Investing Religions (AI-CIO) • 74 Quotes From The Intelligent Investor, Revised Edition (Arbor Investment Planner)   Continues here     ...more

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  • TIME

    Owners of Nearly 8 Million Cars Warned to Replace Airbags Immediately

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  • TIME

    Here Are The Strange Things Dudes Are Asking on Lulu’s New Messaging Service

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  • Brad DeLong's Grasping Reality...

    Liveblogging World War II: October 22, 1944: Leyte Gulf: Background

    Battle of Leyte Gulf: Background: On 12 October 1944, the US 3rd Fleet under Admiral Halsey began a series of carrier raids against Formosa and the Ryukyu Islands, with a view to ensuring that the aircraft based there could not intervene in the Leyte landings. The Japanese command therefore put Shō-Gō 2 into action, launching waves of air attacks against 3rd Fleet's carriers. In what Morison refers to as a 'knock-down, drag-out fight between carrier-based and land-based air', the Japanese were routed, losing 600 aircraft in three days, almost their entire air strength in the region. Following the American invasion of the Philippines, the Japanese Navy made the transition to Shō-Gō 1. Shō-Gō 1 called for Vice-Admiral Jisaburō Ozawa's ships—known as the '...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 94 of my late Nobel-laureate colleague James M. Buchanan‘s 2005 book, Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism: To be free to choose implies acceptance of the results of choices made, which means, in turn, that there should be no assignment of blame to others, including the state, if these choices turn out to have been wrong. ...more

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  • The Big Picture

    Best-performing Unconventional Alternative Investment Ranking

    Source: Bloomberg

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  • naked capitalism

    LInks 10/22/14

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  • naked capitalism

    Forward Guidance: Human Plans and Divine Laughter

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  • The Big Picture

    Enhancing Financial Stability by Improving Culture in the Financial Services Industry

    Enhancing Financial Stability by Improving Culture in the Financial Services Industry October 20, 2014 William C. Dudley, President and Chief Executive Officer ~~~ Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry, Federal Reserve Bank of New York, New York City As prepared for delivery     As I noted earlier at the start of today’s workshop, improving culture in the financial services industry is an imperative.  This endeavor is important in order to ensure financial stability over time, but also to ensure the public trust in our financial system.  In my remarks today, I will first talk about what I see as the culture problem.  Then, I will focus on how incentives could be improved within the financial service...more

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  • Beat the Press

    The European Union's Greenhouse Gas Emissions Are Less Than Half as Much Per Capita as U.S. Emissions

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  • Economist's View

    Links for 10-22-14

    Fly the Derpy Skies - Paul Krugman Forward guidance: Human plans and divine laughter - vox Insurers Retreat From Weather-Related Disasters - NYTimes.com Debate rages on quantitative easing’s effect on inequality - FT.com Buzzfeed linguistics and presidential pronouns revisited - Language Log The dirty effects of mountaintop removal mining - The Washington Post Tax cuts should deliver equity, or efficiency, or both - Frances Woolley Uber is not Profit Maximizing - The Leisure of the Theory Class Women and Economic Development - Tim Taylor Forecasting Is Risky, Especially About the Future - Noah Smith UK immigration and social attitudes - mainly macro Rolling the dice, again - Cecchetti & Schoenholtz Social mechanisms and ABM methods - Understanding Society What...more

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  • Marginal REVOLUTION

    Wedding ring and ceremony expenditures predict shorter marriage duration

    There is a new paper from Andrew M. Francis and Hugo M. Mialon: In this paper, we evaluate the association between wedding spending and marriage duration using data from a survey of over 3,000 ever-married persons in the United States. Controlling for a number of demographic and relationship characteristics, we find evidence that marriage duration is inversely associated with spending on the engagement ring and wedding ceremony. What is the mechanism?  Are signal-requiring and financial commitment-requiring marriages more likely to be fragile?  Or, to put forward a politically incorrect interpretation, do the high expenditures indicate the wife has too much bargaining power in the relationship?  That hardly seems like a plausible explanation.  By the way, weddings w...more

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  • Marginal REVOLUTION

    What I’ve been reading

    1. Doris Kearns, The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism.  This Pulitzer-Prize winning book is compulsively readable and is most valuable on how the Roosevelt and Taft administrations fit together in American history.  I wish it had more detail on economic issues. 2. Walter Isaacson, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution.  At first I was bored but the book picks up and is then interesting throughout, most of all I enjoyed the portrait of Bill Gates.  It is a good overview of how some of the main pieces of today’s information technology world fell into place, starting with the invention of the computer and running up through the end of the 1990s. 3. Russ Rob...more

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  • VoxEU.org: Recent Articles

    Forward guidance: Human plans and divine laughter

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  • Cafe Hayek - Article Feed

    Bonus Quotation of the Day…

    (Don Boudreaux) … is from page 35 of the manuscript of Deirdre McCloskey‘s new, extensive, and brilliant review of Thomas Piketty’s Capital in the Twenty-First Century; (quoted here with Deirdre’s kind permission): It is important in thinking about the issues Piketty so energetically raises to keep straight what exactly is unequal.  Physical capital and the paper claims to it are unequally owned, of course, although pension funds and the like do compensate to some degree.  The yield on such portions of the nation’s capital stock is the income of the rich, especially the rich-by-inheritance whom Piketty worries most about.  But if capital is more comprehensively measured, to include increasingly important human capital such as engineerin...more

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  • Fabius Maximus

    The truth emerges about Afghanistan, an indictment of our war. Now comes the hard part: learning from failure.

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  • John Quiggin

    Gough Whitlam open thread

    I’m hoping ot write an appreciation of Gough Whitlam’s contributions to Australian society soon. But in the meantime, I’ll open this thread for general discussion. I’m happy to entertain discussion of failures as well as successes, but I don’t welcome personal attacks on the recently departed in general, and certainly not in Gough’s case, so please keep discussion respectful. ...more

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  • The Skeptical Speculator

    Stocks jump as investors see central bank support

    Stocks rose on Tuesday. The S&P 500 jumped 2.0 percent while the STOXX Europe 600 surged 2.1 percent. Stocks rose amid reports that the European Central Bank is considering buying corporate bonds on the secondary market beginning early next year. Also boosting markets was a report that US existing home sales rose 2.4 percent to the highest level in a year. Nevertheless, many think that central bank actions -- or at least words -- remain key to market direction. From Bloomberg on Tuesday: The central-bank put lives on. Policy makers deny its existence, yet investors still reckon that whenever stocks and other risk assets take a tumble, the authorities will be there with calming words or economic stimulus to ensure the losses are limited... Last week as markets swooned ag...more

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  • International Political Economy Zone

    PR Stunt or Third World Solidarity? Cuba & Ebola

    Next stop for Cuban doctors: the Hot Zone. Despite Cuba's (largely US-imposed) isolation from the rest of the world for the sin of being Communist...at least in the Americas when the US has long since cottoned up to the likes of China, Vietnam, and other so-called Reds, its medical system has remained one of the world's best against all odds. The World Health Organization (WHO) lauds it as being a model for the world, while even citizens of its oppressor nation say it is "unreal" in care being free yet of high quality. So much so that it has exported doctors in exchange for petroleum.I am of two minds about Cuba. While I do believe that the US has unfairly singled it out for sanctions in an age where it no longer views being socialist as grounds for isolation, Cuba...more

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  • Brad DeLong's Grasping Reality...

    For Thursday: Josh Bivens, Brad DeLong, Jeff Madrick, Ylan Mui: How Mainstream Economic Thinking Imperils America

    DRAFT NOTES Over at Equitable Growth:Josh Bivens, Brad DeLong, Jeff Madrick, Ylan Mui: How Mainstream Economic Thinking Imperils America: Thursday, October 23, 2014 1:00 - 2: 30 p.m. ET Economic Policy Institute 1333 H St., NW Suite 300 Washington, DC 20005 http://www.epi.org/event/mainstream-economic-thinking-imperils-america/ Advice about what points I should try to hit would be most welcome... Jeff Madrick's Seven Bad Ideas: The "Invisible Hand" Say's Law Friedman's Folly: Government's Limited Social Role Low Inflation Is All That Matters There Are No Bubbles Globalization Is Always Good Economics Is a Science In Madrick's Introduction and Reading Along: Praised in the Introduction: John Maynard Keynes Dani Rodrik Criticized in the Introduct...more

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  • Worthwhile Canadian Initiative

    How to deliver tax relief for Canadian families

    In the 1960s, my mother's monthly family allowance cheque paid for a week's groceries. In 2011, the median Canadian two-parent family had an income of just over $90,000. At that level of net income, a family with two children receives Canada Child Tax Benefit worth $87 per month. That doesn't come close to paying for a week's groceries.  The Harper government has already gone some way to providing greater tax recognition for the costs of children through the introduction of the Universal Child Care Benefit and the introduction of a non-refundable child amount credit. Both of these are good policies.  Yet they are overlaid upon a CCTB system that contains fundamental flaws. First, because the CCTB is clawed back as a family's net income i...more

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  • Marginal REVOLUTION

    From the comments, on secular stagnation

    B.B. writes: In “National Income and the Price Level,” Martin Bailey discussed the issues of the liquidity trap and secular stagnation. He observed that at a zero real interest rate, it would be profitable to level the Rocky Mountains and fill in the Gulf of Mexico. The land created would have a rate of return over zero. Also, replacing all steel with stainless steel would pay off. The examples get to the problem. If someone wanted to level a mountain and fill in the Gulf, it would take a decade to get EPA approval, if it ever came. At negative real interest rates, there are plenty of profitable investments. Maybe in the medical sector, or energy, or finance, or banking, or education, or transportation….where government approval can block the investment for a deca...more

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  • Worthwhile Canadian Initiative

    Tax cuts should deliver equity, or efficiency, or both. Income splitting does neither.

    The ideal tax system reflects a compromise between two conflicting goals: equity and efficiency. Equity requires that those who are able to pay more taxes do so. It means taxing the rich and giving to the poor, in thereby reducing inequality and ameliorating poverty. Hence equity demands relatively high marginal tax rates.  Efficiency, on the other hand, argues for lower marginal tax rates. Taxes are inefficient to the extent that they distort people's choices. But choices are made on the margin - to work an extra hour, to save an extra dollar. For example, when deciding whether to work overtime, a rational decision-maker will compare the pain of working longer hours with the gains from doing so. These gains are shaped by the tax rate on the last d...more

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  • Marc to Market

    The Ultimate Carry Trade: US Banks Buying Treasuries

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  • Economist's View

    What Makes Cities Successful?

    This is related to yesterday's post "State 'Income Migration' Claims Are Deeply Flawed": At the intersection of real estate and urban economics: Albert Saiz uses big data to understand real estate dynamics. As a professor in the Department of Urban Studies and Planning and director of MIT’s Center for Real Estate, his work is at the confluence of urban policy and city-making and the factors that drive real estate markets. An urban economist and director of the MIT Urban Economics Lab, Saiz studies the industrial composition of cities with an eye toward understanding what makes cities successful. He also creates and studies incredibly-detailed information about housing markets and how urban growth impacts real estate markets. Immigration explains...more

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  • Economist's View

    'Why our Happiness and Satisfaction Should Replace GDP in Policy Making'

    Richard Easterlin: Why our happiness and satisfaction should replace GDP in policy making, The Conversation: Since 1990, GDP per person in China has doubled and then redoubled. With average incomes multiplying fourfold in little more than two decades, one might expect many of the Chinese people to be dancing in the streets. Yet, when asked about their satisfaction with life, they are, if anything, less satisfied than in 1990. The disparity indicated by these two measures of human progress, Gross Domestic Product and Subjective Well Being (SWB), makes pretty plain the issue at hand. GDP, the well-being indicator commonly used in policy circles, signals an outstanding advance in China. SWB, as indicated by self-reports of overall satisfaction with life, suggests, ...more

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  • Cafe Hayek - Article Feed

    Standard Myth

    (Don Boudreaux) Here’s a letter to the New York Times: Paul Krugman’s allegation that Amazon has harmful monopsony power misses many a mark, not least of which is Mr. Krugman’s mistaken account of John. D. Rockefeller’s Standard Oil as a monopoly that “had too much power” (“Amazon’s Monopsony Is Not O.K.,” Oct. 20). Serious students of Standard’s practices during the late 19th and early 20th centuries understand that complaints against that company came overwhelmingly from other refiners who couldn’t match Standard’s great efficiencies.  Yet no complaints came from consumers.  Standard made them overwhelmingly better off – which is compelling evidence that Standard did not have monopoly power. Here’s the noted antitrust histor...more

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  • CIPE Development Blog

    Getting Creative about Saying “No!” to Corruption in Lebanon

    CIPE partner the Lebanese Transparency Association (LTA) recently wrapped up a banner month in its fight against corruption in Lebanon, using everything from stand-up comedy and mimes to one-on-one case work to deliver its "No Corruption" message. READ MORE ...more

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  • Paul Krugman

    Fly the Derpy Skies

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  • Free exchange

    A market unto itself

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  • Free exchange

    Breaking the rules

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  • Fabius Maximus

    We awake from fears of an Ebola pandemic in America. Now let’s ask who’s responsible…

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  • VoxEU.org: Recent Articles

    Sovereign-debt relief and its aftermath: The 1930s, the 1990s, the future?

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  • The Skeptical Speculator

    Stocks mixed, China's growth slowest since 2009

    Stocks were mixed on Monday. The STOXX Europe 600 fell 0.5 percent but the S&P 500 rose 0.9 percent to help push the MSCI All-Country World Index up 0.7 percent. Tuesday saw China report that its economy grew 7.3 percent in the third quarter from the previous year, down from 7.5 percent in the previous quarter and, indeed, the slowest pace since the first quarter of 2009 in the midst of the global financial crisis. For September data, industrial production rose 8 percent from the previous year, rebounding from a more than five year low of 6.9 percent in August. Retail sales rose 11.6 percent while fixed asset investment rose 16.1 percent in the first nine months of the year when compared to the same period last year....more

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  • Econbrowser

    Competitiveness, Exchange Rates, Spillovers, the End of Original Sin, and More

    Those are the topics covered in the West Coast Workshop on International Finance and Open Economy Macroeconomics, held October 17, 2014, and co-organized by Helen Popper (University of Santa Clara) and Michael Hutchison (UC Santa Cruz). The agenda is here (co-sponsored by SCU, UCSC, Federal Reserve Bank of San Francisco). The workshop includes papers on that look at stability and international linkages from many angles. The morning sessions include work — such Aizenman, Chinn, and Ito, and Miyamoto and Nguyen — that examine the impact conditions in the major economies have on other economies; and it includes an examination (Vincenzo Quadrini) of the effects of emerging economies on rich ones. It also includes Bergin and Corsetti’s work on the impact...more

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  • Worthwhile Canadian Initiative

    John Cochrane's "Monetary Policy with Interest on Reserves"

    I am going to give what I think is the intuition behind John Cochrane's paper (pdf), that is the subject of his recent post. (Or maybe what I'm doing is reverse-engineering his model's results.) The key result of his paper is the "Neo-Fisherian" finding that an increase in the rate of interest set by the central bank results in an increase in the inflation rate. And this equilibrium is stable. And with sticky prices, if the central bank sets a higher interest rate this causes a boom. My old brain is tired, I can't do math, so I may have misunderstood him. (There is a lot of his paper I do not understand, and it's a long paper and I haven't read it all). But my little "model" gets the same results as his and is also simpler and...more

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  • International Political Economy Zone

    Re-Trying Carlos the Jackal, Celebrity Terrorist

    bin Laden is dead and gone, but Carlos lives on.Whereas Osama bin Laden struck me as a po-faced fanatic, Venezuelan Carlos the Jackal always had an ironic streak to him. At the height of his infamy, his pseudo-socialist leanings gave lie to his high living nature as a self-styled "professional revolutionary." The contradictions inherent in Carlos the Jackal are what make him interesting in a manner that eluded bin Laden. The latter was simply a blowhard, whereas the former always had a nudge and a wink ready. As he jetted from one America-hating safe haven to another the world over in between (attempted) acts of terrorism against the West, his actual threat was well-exceeded by his inflated self-image. This was a guy caught, after all, after France effectively bought of...more

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  • Marc to Market

    Great Graphic: Where is the Secular Stagnation?

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  • Econbrowser

    Wisconsin Employment: 108.6K below Trend Required to Hit Walker’s 250K Target

    The Wisconsin Department of Workforce Development released without fanfare (well, there is no press release I see on the DWD media website as of 3pm CDT today) the last figures to be available before the election. They indicate September private nonfarm employment 108.6 thousands below the trend consistent with the Governor’s target (recommitted to a mere year ago) of 250 thousands net new jobs. Figure 1: Private nonfarm payroll employment seasonally adjusted (red), trend consistent with Walker’s promise (gray), and Wisconsin Economic Outlook forecast, interpolated (green). Source: Wisconsin Department of Workforce Development, Wisconsin Economic Outlook (March 2014), author’s calculations. This tabulation means that Wisconsin must create 32.35 thou...more

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  • Free exchange

    Big, bad Amazon

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  • iMFdirect - The IMF Blog

    Banks Should Help, Not Hinder the Economy

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  • VoxEU.org: Recent Articles

    Keynes’ asset management: King’s College, 1921–1946

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  • Fabius Maximus

    DoD shows its strength, mobilizing to protect us from Ebola (a sad story about America).

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  • The Skeptical Speculator

    Stocks could fall another 50 percent or more

    Do stocks have much further to fall? The Wall Street Journal's Brett Arends asks that question. Despite Friday’s boomlet, the Dow Jones Industrial Average still closed the week down 1%, and the broader S&P 500-stock index ended also down 1%. The Dow and the S&P are down 5.2% and 6.2%, respectively, from their record highs... Overall, the MSCI World index has fallen 10% in just a few short weeks, after hitting a record on Sept. 2... So how much further might the market fall? If this is merely a regular correction in the course of a regular economic expansion, the answer may be: Not much further. Corrections of 5% to 20% are a normal part of the stock market... Still, there are reasons for concern based on trends prevailing even before the recent turmoil. If the global ...more

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  • Beat the Press

    Gretchen Morgenson Warns on Pensions and Private Equity (Guest Post)

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  • International Political Economy Zone

    Watch Out, Evita: Imelda Marcos, the Musical

    Sometimes 2000 shoes just ain't enough.David Byrne should be familiar to 80s music fans as the Talking Heads frontman of "Burning Down the House" fame. Together with Fatboy Slim, they have turned their 2010 double concept album Here Lies Love loosely based on the life story of Imelda Marcos into a London musical. (I've listened to the album and it's far from an audio biography of the Imeldific one's life story.) Never far away from the headlines, Mrs. Marcos recently returned to the limelight when the Philippine government seized artworks allegedly by Picasso, Gaugin and others. (She recently denied they were purchased using money looted from government coffers.)Fortunately, the musical makes itself clear on being about Imelda Marcos by adding a number of biographical d...more

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  • Paul Krugman

    This Age of Derp

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  • Econbrowser

    How will Saudi Arabia respond to lower oil prices?

    Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. Source: FRED. When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation of lost production from Iraq in the two Gulf Wars. This historical behavior led many observers to believe that Saudi Arabia would always play the ro...more

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  • Greg Mankiw's Blog

    Charles Murray on Ayn Rand

    A great and balanced essay.  Thanks to Alex Tabarrok for the pointer.

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  • Alpha.Sources

    Another Eurozone Crisis Ahead?

    Calamities happen in financial markets, and usually when investors least expect and are least prepared for it. In the euro area, weak growth in the past six months and the inability of the ECB's measures to turn asset markets arounds have led investors to, once again, revisit their sovereign debt crisis playbooks.  This is understandable, but also now raises a fundamental question. If we are about to tumble into round 2 (or 3?) of the sovereign debt crisis, Eurozone bears may still prevail holding on to the recent trend in equities. But if we are not, the only trade that currently makes sense is to buy equities and short benchmark bonds in the euro area. Narrow money growth and ECB easing would indicate this to be a good bet, but the lack of sovereign QE amid incre...more

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  • John Quiggin

    Time to terminate Cormann

    The flap about Mathias Cormann’s Schwarzeneggerian description of Bill Shorten as a “girlie man” isn’t too significant in itself. But in the context of other developments, it suggests a couple of patterns that represent big problems for the Abbott government. First, Cormann has joined Joe Hockey and Arthur Sinodinos in making an idiot of himself. There’s now no-one among the key economic ministers who has any real credibility left. Add to that the hopelessness of the key spending ministers (Andrews, Dutton and Pyne) and it becomes clear that the Budget fiasco was, as they say, no accident. At this point, it’s hard to see how the government can turn the economic debate around, even given a radical reshuffle of the existing team. Their ...more

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  • Paul Krugman

    Friday Night Music, Saturday Night Followup

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  • CIPE Development Blog

    The Role of Business Associations in Democracy

    Business associations contribute immensely to economic growth, development, peace, and prosperity. They play a key role in building inclusive entrepreneurship ecosystems and can bolster the ability of firms of all sizes to grow and create jobs. READ MORE ...more

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  • CIPE Development Blog

    “FCPA Professor” Discusses Corruption Law’s Enforcement

    Known as “The FCPA Professor” for his highly trafficked blog, Illinois University Law Professor Mike Koehler spoke in Washington, DC on October 2, 2014 about what he sees as flaws in the way FCPA enforcement is carried out. In his latest book, The Foreign Corrupt Practices Act in a New Era, Koehler dissects recent developments and trends related to the U.S. Foreign Corrupt Practices Act (FCPA)... ...more

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  • iMFdirect - The IMF Blog

    Good Governance Curbs Excessive Bank Risks

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  • Rick Bookstaber

    My Recent Work on Agent-based Modeling

    As is obvious by looking at the time span between recent posts, I have not been active in blogging. I am planning to get back into things.  As a start, to help catch up on what I have been doing, here are a couple of papers and a presentation I recently made on the area of my focus, using agent-based modeling to help assess financial vulnerabilities.The model is presented here.For a concise presentation on the model and its application you can look at a talk I did in August at the Newton Institute for Mathematical Sciences at Cambridge University.  (Despite what is suggested by the venue, I did the presentation mathlessly).Related to the model is work I have been doing to develop a map of sorts for the key agents in the financial system and the ways in wh...more

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  • John Quiggin

    BBC News Hour

    My piece on the incoherence of US and Australian policy in the Middle East, suggesting that we should leave the people of the region to sort out their own problems, attracted a fair bit of interest, including a discussion on the BBC. You can listen to it here (about 31:55) for the next few days. I’ll try to replace this with a permanent podcast link. ...more

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  • iMFdirect - The IMF Blog

    A Mirage, Not An Oasis: Easy Money and Financial Markets

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  • Greg Mankiw's Blog

    Head Section Leader in Ec 10

    Love teaching introductory economics?  Want to live in the Boston area?  Well, then, I have a job for you.

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  • Dani Rodrik's weblog

    Services, manufacturing, and new growth strategies

    I gave a talk yesterday on New Growth Strategies at the World Bank, which was more or less an elaboration of this short piece. I argued that industrialization had pretty much run out of steam as a growth strategy, that services would need to be the focus going forward, and that this required in turn a different policy mindset about how to increase productivity. In particular, I argued that policies focusing on generating a sequence of sectoral “winners,” which worked so  well in manufacturing (garments to car seats to cars to electronics), would have much smaller payoff in services, in view of the non-tradability of most service segments. I suggested further that, even under the best of circumstances, a services-oriented strategy would yield lower growth than ...more

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  • Greg Mankiw's Blog

    Mean Comments

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  • Jeffrey Frankel's Blog

    The Return of Voodoo Economics

    Paul Krugman’s column in the New York Times today talked of the revival of “Voodoo economics” by some Republican politicians.  This refers to the Laffer Proposition that a cut in income tax rates stimulates economic activity so much that tax revenue goes up rather than down.   Gov. Sam Brownback, who is running for re-election in Kansas, has had to confront the reality that tax revenues went down, not up as he argued they would, when he cut state tax rates. I disagree with one thing that Krugman wrote in his column: the idea that there was a long break,  particularly after George W. Bush took office, during which Republican politicians did not push this line.  To the contrary, I have collected many quotes from George W. Bush and his top officials claiming the...more

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  • Jeffrey Frankel's Blog

    Piketty’s Fence

    Most of the reviews of Thomas Piketty’s book Capital in the Twenty-First Century have already been written.  But I thought it might be best to read it all the way through before offering my own thoughts on this book, which startlingly rose to the top of the best seller lists last April.  It has taken me five months, but I finished it. One of the things the book has in common with the Karl Marx’s Das Capital (1867) is that it serves as a rallying point for the many people who are passionately concerned about inequality, regardless whether they understand or agree with the specific arguments contained in the book in question.  To be fair, much of what Marx wrote was bizarre and very little was based on careful economic statistics.  Much of what Piketty says is ba...more

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  • Smart Economy

    Belgian Researchers Discover Way to Block Cancer Metastasis

      Free Radicals and Cancer Metastasis KEY QUOTE:  The Belgian team led by Sonveaux has found the mechanism by which cells can control changes caused at least in part by free radicals. The free radical involved in the metastacism of tumor cells is superoxide. Tests in mice on melanoma and breast cancer cells showed that administering an antioxidant stopped the production of superoxide. That, in turn, prevented cell changes that would lead to metastasis.   N.B. This is confirmation why Carbon 60 Hydrated Fullerenes stops cancer metastasis, by scavanging free radicals that cause cancer. Ukrainian scientists have known this for over ten years!!--Walter Derzko September 18, 2014 12:28 AM                 WASHINGTON— Cancer remains one of the dea...more

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  • Smart Economy

    New non-invasive technique could revolutionize the imaging of metastatic cancer

                     IMAGE:   This is Paul Fisher, M.Ph., Ph.D., Thelma Newmeyer Corman Endowed Chair in Cancer Research and co-leader of the Cancer Molecular Genetics research program at VCU Massey Cancer Center, chairman of... Click here for more information.      Bioluminescence, nanoparticles, gene manipulation – these sound like the ideas of a science fiction writer, but, in fact, they are components of an exciting new approach to imaging local and metastatic tumors. In preclinical animal models of metastatic prostate cancer, scientists at Virginia Commonwealth University Massey Cancer Center, VCU Institute of Molecular Medicine and Johns Hopkins Medical Institutions have provided proof-of-principle of a new molecular...more

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  • Smart Economy

    Space: The final frontier… open to the public

      UTMB research shows average people healthy enough for commercial space travel Historically, spaceflight has been reserved for the very healthy. Astronauts are selected for their ability to meet the highest physical and psychological standards to prepare them for any unknown challenges. However, with the advent of commercial spaceflight, average people can now fly for enjoyment. The aerospace medicine community has had very little information about what medical conditions or diseases should be considered particularly risky in the spaceflight environment, as most medical conditions have never been studied for risk in space — until now. The aerospace medicine group at the University of Texas Medical Branch at Galveston recently studied how average people with common ...more

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  • Alpha.Sources

    Where Are My Foreign Assets When I Need Them?

    How do you show the challenge of the eurozone periphery in one chart? Well, it is difficult but the representation below is a good pick in my view. A structurally negative net foreign asset position is a very tough hurdle to overcome when in a currency union, saddled with poor demographics and need net external demand to boost national income. Think of the periphery as Japan and Germany without(!) the strong net foreign asset position.  These countries seem to have grown old before getting rich and without the ability to devalue in nominal terms, the outlook is not good.    --- Picture is courtesey of Pantheon Macroeconomics and has also been posted on Twitter.  ...more

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  • Alpha.Sources

    The Italian Economy Remains Stuck ...

    Italy has the dubious honor of the being the first eurozone economy to re-enter recession after the decidedly tepid recovery since 2012. This is bad news for an economy struggling with steadily increasing government debt and no real solution on how to pay off its mounting liabilities. What is even worse is that it looks as if the economy is not about to exit its malaise anytime soon. --- Picture is courtesey of Pantheon Macroeconomics and has also been posted on Twitter.    ...more

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  • Dani Rodrik's weblog

    Back to sanity on economic convergence

    It’s been interesting to watch how the conventional wisdom on rapid convergence – developing countries closing the gap with the advanced economies – has been changing over the last few years. It wasn’t so long ago that the world was in the grips of emerging-markets mania, projecting wildly optimistic growth numbers decades into the future. For the last 4-5 years, I have been writing that the pace of convergence we have experienced over the last two decades is unsustainable. There were temporary factors (cheap capital, low interest rates, high commodity prices, rapid Chinese expansion) which would begin to reverse themselves. And perhaps most importantly, export-oriented industrialization was running out of steam much earlier, even in the relatively successful co...more

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  • Institutional Economics

    I am leaving CIS and returning to financial markets

    This is my last week at CIS. I will be returning to financial markets from whence I came back in 2008. Thanks to Greg Lindsay for giving me a platform to participate in the public policy debate over the last few years. Thanks also to those who contributed to Policy while I was editor over the last 18 months. Policy will continue under a new editor. My new employer won’t be paying me to blog or tweet during business hours, so you will be hearing even less from me on what is already a very low frequency blog. I will still post material here from time to time and link to what I am doing when appropriate. Needless to say, nothing on this web site should be attributed to current or previous employers. This blog has followed me around in various roles since 2003, back whe...more

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  • Jeffrey Frankel's Blog

    Modi, Sisi & Jokowi: Three New Leaders Face the Challenge of Food & Fuel Subsidies

    In few policy areas does good economics seem to conflict so dramatically with good politics as in the practice of subsidies to food and energy.  Economics textbooks explain that these subsidies are lose-lose policies. In the political world that can sound like an ivory tower abstraction.   But the issue of unaffordable subsidies happens to be front and center politically now, in a number of places around the world.   Three major new leaders in particular are facing this challenge:  Sisi in Egypt, Jokowi in Indonesia, and Modi in India. The Egyptian leader is doing a much better job of facing up to the need to cut subsidies than one might have expected.  India’s new prime minister, by contrast, is doing worse than expected – even torpedoing a long-anticipated ...more

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  • Institutional Economics

    Wayne Swan on Monetary Offset and the GFC

    Former Treasurer Wayne Swan is releasing some of his briefing notes from the GFC ahead of the launch of his upcoming memoir, The Good Fight. The first instalment from a meeting at the Prime Minister’s residence with the Prime Minister, Treasury Secretary and other senior officials on 4 August 2008 is remarkable for its acknowledgement of monetary offset. Indeed, the notes could just as easily have been written by Scott Sumner: There are three broad considerations the Government would need to keep in mind in taking a decision to engage in discretionary [fiscal] action: • The Reserve Bank through its control over interest rates, determines the overall level of aggregate demand in the economy, and the Bank would likely take account of any fiscal stimulus in its monet...more

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  • Institutional Economics

    The Financial System Inquiry and Macro-Pru

    I have an op-ed in Business Spectator endorsing the sceptical approach to macro-prudential regulation taken in the Murray inquiry’s interim report: Macro-prudential policies are seen as providing policymakers with a more targeted set of policy instruments that might complement or even substitute for changes in official interest rates. However, these instruments also implicate policymakers in making much finer judgements about risks to financial stability as well as the more traditional concern of monetary policy with price stability. A blunt instrument like monetary policy encourages caution in making such judgements. By contrast, more targeted counter-cyclical quantitative controls are a standing invitation to micro-manage credit allocation, but do not in thems...more

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  • CYNICONOMICS

    Technical Notes for ‘Never Mind Their Distrust of Data and Forecasts…’

    This is a short appendix for our earlier post, “Never Mind Their Distrust of Data and Forecasts; Austrians Can Help You Predict the Economy,” in the usual Q&A format. Why do you show three different series in the first chart? We show “Net Private Debt from Census Bureau” because it has the longest history. We use it later to calculate 5-year credit growth figures for the period before the Fed’s “flow of funds” becomes available. We deduct financial and real estate corporation debt in the second dotted line to show that private debt growth in the late 1920s wasn’t skewed by financial debt (as it was in the 2000s). We can only back out financial debt from 1926 (not enough data to use in the “savings rates and credit growth” chart), but this series...more

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  • CYNICONOMICS

    Never Mind Their Distrust of Data and Forecasts; Austrians Can Help You Predict the Economy

    [O]f all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. – From The Economist, July 16, 2009. It’s been five years since the The Economist magazine published the critical commentary  excerpted above. In hindsight, the noted reputational damage was neither lasting nor spectacular. As of today, we’d say it’s almost non-existent. Mainstream economists continue to dominate their profession and wield huge influence on public policies. They merely needed to close ranks after the financial crisis and wait for people to forget that their key theories and models were wholly discredited. Meanwhile, heterodox economists who stress credit market risks and financial fragilities – the Austrians, the Mi...more

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  • CYNICONOMICS

    Technical Notes for ‘Planning for Future Rate Hikes…’

    This is a short appendix for our earlier post, “Planning for Future Rate Hikes: What Can History Tell Us that the Fed Won’t?,” presented in Q&A format. I don’t understand the calculations in your charts – can you walk me through one of the figures? Sure, we’ll do this for the figure depicted by the first bar (6.1%) on the real fixed investment chart: We start by isolating all 4 quarter periods over which the fed funds rate dropped by more than 2%. There were 37 such periods in our data set, as shown in the first chart of the main article. For each of these periods, we record the growth in real fixed investment over the next 4 quarters. This is what we mean by lagged growth – we’re lagging the economic outcome against the change in interest rate...more

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  • Dani Rodrik's weblog

    My moonlighting career of the last 4 years

    At long last, Turkey's consitutional court has reversed the conviction of the more than 200 officers previously found guilty in the bogus Sledgehammer coup plot, leading to the release on June 19th of all those in jail (including my father in law). Even though a retrial is to take place, the ruling is a coda to the last four-and-a-half years during which my wife and I moonlighted as criminal investigator, forensic analyst, and political activist. It has been a truly surreal and bizarre experience, given how so many intelligent people bought into -- and refused let go of -- a coup plot that was patently fictitious.     So I thought this would be a good time to post a longish account of my involvement in the story. I wrote it as much to make sense of it to...more

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  • The Becker-Posner Blog

    Farewell

    In memoriam: Gary S. Becker, 1930-2014. The Becker-Posner blog is terminated. Richard A. Posner

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  • Rick Bookstaber

    Piketty Myopia

    Thomas Piketty's book Capital in the Twenty-First Century has been lauded for its detailed analysis of data and for the end result of that analysis, a sweeping statement of an inexorable widening of the distribution of wealth between those with capital and those without. There is unabashed glee among those who have bemoaned the plight of the middle class as the one percent has pulled away, waving the book as the gotcha ya for income redistribution.  As should be clear from some of my previous posts, I am one of those people bemoaning the plight, but I am a little slower than many others to take up the Piketty banner. The book's argument looks at wealth and growth data over the past three centuries, and takes its implications forward with a similar, historical scope...more

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  • Felix Salmon

    Post Felix

    By Shane Ferro Today is Felix’s last day at Reuters. Here's the link to his mega-million word blog archive (start from the beginning, in March 2009, if you like). Because we’re source-agnostic, you can also find some of his best stuff from the Reuters era at Wired, Slate, the Atlantic, News Genius, CJR, the NYT, and NY Mag. There’s also Felix TV, his personal site, his Tumblr, his Medium archive, and, of course, the Twitter feed we all aspire to. Counterparties may have been the brainchild of Felix and the recently departed Ryan McCarthy, but the blog, site, newsletter, and Twitter feed will continue to exist in their absence. It will be run by Ben Walsh and Shane Ferro, with some non-trivial amount of snark. Today we focus on the reason Felix started Counterparti...more

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  • Felix Salmon

    The Piketty pessimist

    By Felix Salmon This chart comes from the World Economic Forum’s 2014 Global Risks Report, which came out just before Thomas Piketty’s book started becoming the topic of discussion in economic and plutocratic circles.* You can clearly see what you might call the rise of inequality-as-an issue: before 2012 it’s nowhere to be found, but since then it’s been consistently in the top spot. My prediction is that in 2015, thanks to Piketty, the WEF will start talking less about income inequality, and more about wealth inequality. The big question, though, is whether inequality is really much of a risk at all. After all, from the point of view of the average billionaire WEF delegate, inequality would seem to look much more like a reward. Chrystia Freeland has a hopeful...more

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  • Felix Salmon

    The most expensive lottery ticket in the world

    By Felix Salmon No Exit, the new book from Gideon Lewis-Kraus, should be required reading for anybody who thinks it might be a good idea to found a startup in Silicon Valley. It shows just how miserable the startup founder’s life is, and raises the question of why anybody would voluntarily subject themselves to such a thing. A large part of the answer is that Silicon Valley is gripped by a mass delusion, compounded by a deep “fake it til you make it” attitude toward success. Why do so many people in Silicon Valley want to be founders? Because every founder they meet is always killing it, crushing it, having massive success, just about to close a huge round, etc etc. At some level, they must know this is impossible: if 90% of startups fail, it simply can’t be the...more

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  • Rick Bookstaber

    Big Data versus the SAT

    In a recent Time Magazine article, the president of Bard College, Leon Botstein, joined a chorus of criticism of the SAT, going so far as to call it “part hoax and part fraud.”  Criticism is coming fast and furious because the SAT has just unveiled a new, improved product to try to fend off a trend among competitive colleges to downplay the role of the SAT, and even to eliminate its use entirely.  (The not-for-profit status of the College Board, which produces the SAT, does not put the company beyond reacting to a profit motive; not-for-profit does not exactly mean you don’t get benefits from pulling in more revenue). Among the critiques are that performance during one afternoon in the junior year of high school should not govern a student’s future (th...more

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  • The Becker-Posner Blog

    Sabbatical Notice

    Starting this weekend, we will be taking a one-month sabbatical from blogging. We will resume at the end of that period.

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  • The Becker-Posner Blog

    The Embargo of Cuba: Time to Go- Becker

    The US embargo of Cuba began in 1960, a year after Fidel Castro turned this island toward communism. It was extended to food and medicines in 1962, the same year as the showdown with Russia over the installation of missiles there. The embargo has prevented American companies from doing business with Cuba, and discouraged tourism to Cuba. The American government also tried with quite limited success to prevent other countries from trading with Cuba. In general economic embargoes are undesirable because they interfere with free trade among countries. Yet a case could be made for an embargo against Cuba. Castro not only allowed Russian missiles to be installed in Cuba, just 90 miles from Florida, but was also actively trying to interfere in other countries by sending troop...more

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  • Stefan Karlsson's blog

    New Blog Address: http://stefankarlssoneng.wordpress.com/

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  • Stefan Karlsson's blog

    Ukraine Crisis Isn't Over

    So now the so-called protestors have overthrown democratically elected President Yanukovich in what is in effect a coup. It is unclear what will happen, and how Russia and Yanukovich and his supporters will act, but this is almost certainly not the end of it.Indeed, how could it be the end? Some people argue that protestors were motivated by anger over corruption and abuse of power from Yanukovich. But while Yanukovich is no doubt corrupt and some protestors may indeed have been motivated by anger over that fact, the opposition movement led by Yulia Tymoschenko is just as corrupt as Yanukovich, so if they prevail, that won't mean less corruption and abuse of power.No, what this conflict is really about is that today's Ukraine is an artificial state created by Soviet com...more

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  • Stefan Karlsson's blog

    How Old Posts Can Become Popular Again

    Suddenly, my post about why Ukraine should be divided between its anti-Russian and pro-Russian parts has seen a dramatic increase in page views. That is no doubt related to the latest escalation of Ukraine's political crisis with both government forces and the neo-Nazi elements of the opposition increasingly using violent means in the confrontation. Ukraine is dangerously close to a full scale civil war. Let's hope that it doesn't come to that. Ukraine has been ravaged for a century by wars, German Nazis, Communism, corruption and ethnic conflict, to add a(nother) civil war would be really cruel. I remain convinced that secession is the best way to solve the conflict peacefully....more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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  • International Political Economy at the University of North Carolina

    Why US Financial Hegemony Will Endure

    Will and I have a piece, now ungated, over at a fantastic new online magazine called Symposium. Our article translates much of the main points of our Perspectives Piece (co-authored with Thomas and Andy Pennock) for popular consumption. We are also blogging over there this week in support of the article. Please do check out our writing this week on the magazine's website, as well as the other great content on the site....more

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  • International Political Economy at the University of North Carolina

    Foreign Direct Investment, Human Rights, INGOs

    One of the major areas of underdeveloped research within political science is the interaction between non-state actors. From an international political economy perspective, the literature has largely ignored the interaction of various non-state actors that are growing in importance, and its effects on different forms of trade. In a recently published article "Avoiding the Spotlight: Human Rights Shaming and Foreign Direct Investment" by Colin Barry, Chad Clay and Michael Flynn, they lay the foundation for examining this interaction. They examine the interaction between non-state actors (INGOs) and multinational corporations (MNCs) and the extent to which private actors' choices to invest in countries are affected by the reputational costs of doing business in those...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

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  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

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  • International Political Economy at the University of North Carolina

    Verizon, Vodafone, and Measuring FDI

    Recently back from APSA in Chicago, I've been reflecting on the state of our knowledge about FDI (or perhaps more accurately, cross-border management stakes in enterprises). That, and working on my dissertation, applying for academic jobs, and teaching. Oh, and telling everyone who'll listen about my Optimus Prime sighting on Michigan Ave.Anyway, I find a post-conference review of the discipline is generally a good way to consider potentially fruitful lines of new inquiry. In my experience, the quality of papers at conferences can be rather hit-or-miss. This generally fits into my view of conferences as important sources of external deadlines for getting drafts done as well as interacting with other scholars in more informal settings such as the hotel bar/lobby/over-cro...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-09

    Given that I block NSA & PRISM tweets, was entertaining tuning into twitter & trying to figure why everyone was on about Lord Snowdon -> Turned on GoT tonight just in time to catch Daenerys reenacting her Level 2 YMCA gymnastics pageant. -> How Not to Be Alone | Jonathan Safran Foer – http://t.co/HMFxg75lfh http://t.co/DzAtvWBQJr -> Excellent, but fellow sports-med geeks only: Sports and exercise-related tendinopathies: a review – http://t.co/WGkhRlO6Uz -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-07

    Photo-set: Flooding Across Central Europe – http://t.co/8G6j8teCbd -> CDC Update: Severe Respiratory Illness Associated with Middle East Respiratory Syndrome Coronavirus – http://t.co/hWqN1338VN -> Col Flagg: Have you ever heard of Malaysian Chest Implosion Torture? Radar: No. Coll Flagg: Good. It hasn’t been invented… yet. -> tl;dr: There are Manchurian Candidate engineers at large tech cos that have stolen SSL root cert and NSA is using it for cattle mutilation. -> Brian: …Will you please listen? I'm not the Messiah! Do you understand? Honestly Woman: Only the true Messiah denies his divinity! -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-05

    FRED: Free Energy Data – http://t.co/90H7GVDazO -> Solipsisms ‘r’ us, courtesy of my friends at @thinkup: I apparently mention me a lot – http://t.co/9rTRXvBM9D -> Almost 10,000 words on soccer/Italy/economics/racism by @wrightthompson? Yes, & it’s super. Go. http://t.co/g4sgEFLkIC -> When The Beautiful Game Turns Ugly: A journey into the world of Italy's racist soccer thugs http://t.co/nckrbeLPfs -> Can’t remember last time I read an OpEd or column. Do those still exist? -> ...more

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • London Banker

    Chop Off Their Hands . . .

    President Truman famously called for a one handed economist. The Carolingian kings of France would have accommodated him. They realised that a kingdom required a common currency under the control of the king and well regulated markets to sustain the confidence of the people. At first mints were established widely, spread across the kingdom. Local barons began to profit from debasing the coinage, undermining confidence in the monetary system. So Charles the Bald established mints under his direct control and regulated the issue of coins: C.12. Following the custom of our predecessors, just as it is found in their capitularies, we decree that in no other place in all our kingdom shall money be made except in our palace, and in St. Josse and Rouen, which right in th...more

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  • The Street Light

    When the Fed Chair is an Academic

    The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As...more

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  • London Banker

    For Want of a Nail, the Ship Was Lost

    Imagine a great ship dominating the skyline on a distant sea. Imagine the complexity of that ship: keel, ribs, planks, masts, spars, and an infinite number of less readily named components. Each component was hand-crafted by a craftsman skilled in his trade, to precise requirements, and secured in position to take the stress and strain of a life at sea.Now imagine a crew. They didn't build the ship. The crew are told that the one and only purpose of the ship is to realise a profit for every man jack aboard. Any hand not contributing a profit will be turned ashore. Down below in the ship are nails. Thousands and thousands of nails. Nails are useful. Nails are much sought after in every port the ship enters. Nails can be readily sold and never traced. The crew h...more

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  • London Banker

    Lies, Damn Lies and LIBOR

    I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not a flaw but a feature of modern financial markets. And if it was happening in LIBOR for between 5 and 15 years, then the business model has been profitably replicated to many other quotation-based reference prices.Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is compr...more

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  • The Street Light

    Government Job Destruction

    Another jobs report in the US, another month where part of the private sector's job creation was undone by continued job destruction by the government sector. The 15,000 additional jobs lost in April brings total job losses in the government sector since January 2010 to over 500,000. While the US has not quite been experiencing European-style austerity over the past two years, that's still a pretty tough headwind to fight as it emerges from recession. ...more

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Dan Steinbock

Dr Dan Steinbock is a recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond).

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