EconoMonitor

Economics Blog Aggregator

    Global Macro

  • naked capitalism

    Why the Gulf of Tonkin and the Vietnam War Matter 50 Years Later (1/2)

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  • Economist's View

    Links for 8-02-14

    How to muddy the waters on impact of austerity - mainly macro Facts Still Have, Well, You Know - Paul Krugman Hawks Be Gone - Paul Krugman Poverty: structural or individual? - Chris Dillow The Enigma of Russia's Economy - Tim Taylor What's behind Housing's June Swoon? - macroblog Treasury takes a big step to fight dirty money - Treasury Notes Good News on Financial Reform - Paul Krugman ...more

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  • The Skeptical Speculator

    US employment rises, global manufacturing maintains growth

    US economic data on Friday were mixed. Nonfarm payrolls rose 209,000 in July after jumping by 298,000 in June. However, the unemployment rate rose to 6.2 percent from 6.1 percent as more people joined the labour force. For the manufacturing sector, the Institute for Supply Management's PMI rose to 57.1 in July, the highest since April 2011, from 55.3 in June, but Markit's manufacturing PMI fell to 55.8 in July from 57.3 in June. Consumer confidence also fell in July. The Thomson Reuters/University of Michigan's final July reading on the consumer sentiment index came in at 81.8, down from the final June reading of 82.5. Among US June data released on Friday, consumer spending rose 0.4 percent in June, the fifth consecutive increase, after rising by 0.3 percent in May. In...more

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  • naked capitalism

    Climate Tipping Requires Precautionary Accumulation of Capital and an Additional Price for Carbon Emissions

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  • Econbrowser

    Parsing the Employment and GDP Releases

    The employment release reported a 209,000 net increase in nonfarm payroll (NFP) employment was below consensus, but still represented the sixth straight month of +200K net job creation. The net change in private NFP was 198,000. Here I want to note (1) the household survey based alternate measure of nonfarm payroll employment also continues to rise; (2) revisions in NFP and private NFP have typically been positive in recent months; (3) the 2014Q1 drop in GDP seems a little out of line with labor input. Regarding employment, trends in the official NFP and the household series adjusted to conform to the NFP concept are positive. Figure 1: Nonfarm payroll employment (blue), and household survey employment adjusted to the NFP concept (red), both seasonally adjusted, in &#...more

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  • VoxEU.org: Recent Articles

    Risk attitudes are context-specific

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  • Brad DeLong's Grasping Reality...

    For the Weekend: Chocolate!

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  • The Big Picture

    Paul’s Boutique’ Remixed

    As Josh reminded us, this week was the 25th Anniversary of Paul’s Boutique.     Source: Dangerous Minds      

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  • TIME » Time Sections » Business

    600 Retailers Ensnared in Major New Malware Attack, Cybersecurity Firm Says

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  • Marginal REVOLUTION

    Russia fact of the day

    Shares in Gazprom, a company that made $32bn in net income last year, trade at only 2.6 times forward earnings. That is from FTAlphaville.

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  • The Big Picture

    Succinct Summations of Week’s Events 8.1.14

    Succinct Summations week ending August 1st Positives: 1. GDP grew on a 4% annualized basis in Q2, up from -2.9% in Q1 and above expectations of 3.1%. 2. Consumer sentiment came in at 81.8, up from 81.3 and better than the 81.5 expected. 3. ISM manufacturing index came in at 57.1, up from 55.3 and better than the 56 expected. 4. Jobless claims came in a 302k, the 4-week moving average falls to the lowest level since 2006. 5. PMI services flash index slowed modestly in July, after hitting 5-year highs in June. 6. Q1 GDP was revised up to -2.1%, from -2.9%. 7. The FOMC meeting announced the Taper is on schedule to end in October. 8. PMI Manufacturing came in at 55.8 vs expectations of 56. Still a very good reading. 9. June NFP revised up from 288k to 298k. 10. 200,000 jobs...more

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  • Paul Krugman

    Friday Night Music: Sarah Jarosz, Over the Edge

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  • Paul Krugman

    Good News on Financial Reform

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  • Brad DeLong's Grasping Reality...

    Noted for Your Afternoon Procrastination for August 1, 2014

    Over at Equitable Growth--The Equitablog Nick Bunker: Weekend reading | Washington Center for Equitable Growth Lunchtime Must-Read: All Those US Indicators This Week | Washington Center for Equitable Growth Heather Boushey and Nick Bunker: Nothing new under the labor market sun | Washington Center for Equitable Growth Is Living on the Dole Bad for You?: Thursday Focus for July 31, 2014 | Washington Center for Equitable Growth Lunchtime Must-Read: Jason Furman and John Podesta: We Can't Wait: The Cost of Delaying Action to Stem Climate Change | Washington Center for Equitable Growth A Note on the Shape of Yesterday's GDP Growth Number | Washington Center for Equitable Growth Morning Must-Read: Ari Phillips: Paul Ryan Says Climate Change Is An Excuse To Illegally Grow G...more

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  • Economist's View

    Fed Watch: July Employment Report

    Tim Duy: July Employment Report, by Tim Duy: The overall tenor of the July employment report was consistent with the song that Yellen and Co. are singing. Labor markets are generally improving at a moderate pace, yet despite relatively low unemployment, there is plenty of reason to believe considerable slack remains in the economy. The headline nonfarm payroll number was a ho-hum gain of 209K with some small upward revisions for the previous two months. Steady above 200k gains this year are lifting the 12-month moving average of jobs higher: In the context of the range of indicators that Fed Chair Janet Yellen has drawn specific attention to: Consistent with the consensus of the FOMC as revealed at the conclusion of this week's FOMC meeting, measures of unde...more

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  • The Big Picture

    Industries most frequently attacked by malicious online activity

    Source: World Economic Forum

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  • CIPE Development Blog

    Moving Beyond the Bi-Polar View of Doing Business in Africa

    Economic improvements and a wealth of opportunities for business in Africa have led to an increased focus on the continent. Over the past three years Ernst & Young’s Africa attractiveness reports have highlighted the continent’s steady rise. Their research provides some quantitative substance to the growing perception that African markets offer an exciting growth and investment opportunity.... ...more

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  • Brad DeLong's Grasping Reality...

    Bad Siri! When I Say "Cosma Shalizi", Do Not Transcribe It as "Cosmos Elysée"!

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  • Free exchange

    Gone missing

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  • Marginal REVOLUTION

    Assorted links

    1. The new Dan Ariely app for time management. 2. Are older people more aggressive in firing their friends?  Will 2017 be the toughest year yet for the EU? 3. Can you qualify with a prosthetic leg? 4. The Washington Post picks Washington’s most beautiful people. 5. Eric Posner and Glen Weyl on Piketty. ...more

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  • Free exchange

    Strangled at birth

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  • Economist's View

    'Job Growth Slows in July'

    Dean Baker: Job Growth Slows in July, by Dean Baker, CEPR Data Bytes: Wage growth slowed slightly in the last quarter to 1.8 percent from 2.0 percent in the last year. The economy added 209,000 jobs in July, a sharp slowing from its 277,000 average over the prior three months. The slowdown was widely spread across sectors, although temporary help -- which added just 8,500 jobs -- and health care -- which added just 7,000 -- were notably weak. Construction -- which added 22,000 jobs -- and manufacturing -- which added 28,000 jobs -- were surprisingly strong. The unemployment rate was essentially unchanged at 6.2 percent, as there was little change in either the size of the labor force or the number of unemployed. Involuntary part-time employment edged down slightly, rev...more

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  • TIME » Time Sections » Business

    Beats Now Part of the Apple ‘Family’

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  • iMFdirect - The IMF Blog

    Europe’s Russian Connections

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  • iMFdirect - The IMF Blog

    Links and Levers: How the Caucasus and Central Asia Are Tied to Russia

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  • Paul Krugman

    Facts Still Have, Well, You Know

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  • Marc to Market

    Great Graphic: Asian PMIs

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  • Fabius Maximus

    See the true trend of the US economy, hidden in the daily news

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  • Marginal REVOLUTION

    What is the least nonsensical interpretation of this result?

    New research by Esther Friedman of the RAND Corporation and Robert Mare of UCLA finds that parents of college grads live two years longer than parents whose kids didn’t graduate high school. That two-year bump in life expectancy for parents of the most-educated kids is surprisingly large - it amounts to about two-thirds of the longevity benefit of running every day. Even more surprising: your kids’ educational attainments have a bigger effect on your life expectancy than your own schooling. While sending your kid to college adds two years to your life relative to letting them flunk out of high school, getting a college degree yourself only adds 1.7 years to your life compared to not having a high school degree. That is from Christopher Ingraham, the ...more

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  • Marc to Market

    Muted Market Reaction to Job Data Disappointment

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  • TIME » Time Sections » Business

    How Big Banks Are Finally Getting It Right

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 82 of Liberty Fund’s 1982 edition of Adam Smith’s 1759 profound classic, The Theory of Moral Sentiments – the volume that inspired Russ’s new book: Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is fitter to take care of himself than of any other person, it is fit and right that it should be so. Note carefully three features of this insight from Smith.  First, this description of the practical domain of each person’s attention and interest is completely consistent with Smith’s description of human motivation that most famously runs through much of The Wealth of Nations. Second,  Smith does not say here (or in The Wealth of Nations) that human be...more

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  • Marc to Market

    PMI and Jobs as Stocks and Bonds Move Lower

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  • Beat the Press

    Is There Any Way That Weak Employment Numbers In Europe Might Bolster Concerns That Most Economists Are Right About Government Stimulus

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  • Beat the Press

    More Fun With Budget Numbers: Frat Boy Reporting at the New York Times

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  • naked capitalism

    Links 8/1/14

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  • John Quiggin

    To help poor people, give them money

    The Oz (no link) is touting a campaign by Andrew Forrest to introduce an Australian version of the US “food stamps” system, replacing cash payments with a card that can only be used to buy an approved list of items. This is yet another step in the abandonment of economic rationalism by the political right. I’d be surprised if Forrest could get the support of any economist for this (though the recent performances of the IPA crew give me some pause). Free market advocates, following Milton Friedman, have long sought the replacement of in-kind benefits with cash. To those on the left, even where enthusiasm for markets is more qualified, the conclusion is reinforced by the obvious class warfare involved here. At best, someone like Forrest can be seen as a ...more

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  • John Quiggin

    Job search, yet again

    I got lots of very helpful responses to my recent post on the search theory of unemployment, here and at Crooked Timber. But it has occurred to me that I haven’t seen any answer to one crucial question: How many offers do unemployed workers receive and decline before taking a new job, or leaving the labour market? This is crucial, both in simple versions of search theory and in more sophisticated directed search and matching models. If workers don’t get any offers, it doesn’t matter what their reservation wage is, or what their judgement of the state of the market. Casual observation and my very limited experience, combined with my understanding of the unemployment benefit rules, is that very few unemployed workers receive and decline job offers, exc...more

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  • Beat the Press

    Larry Kotlikoff Tells Us Why We Should Not Use Infinite Horizon Budget Accounting

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  • Econbrowser

    Anti-Intellectualism in American Blogging

    With apologies to Richard Hofstadter. On reading “New Classical Kansas”, James Sexton comments: What? Log? Why Log? Why not just “economic activity”, whatever that is? Why all the babbling bs? ARIMA(1,1,1)? You believe that holds any meaning in relation to Kansas’ “economic activity”? Why? … Was there an expectation of huge growth in Kansas in response to the tax cuts? No. But, our unemployment is decidedly below the national average. You know, that’s like more people working and earning, and stuff. But, better, … well, worse in your point-of-view, people get to actually keep more of what they earned. This is an end, in and of itself. Kansas is fine. And, it will be more fine, because people get to keep what they earned, and are not ...more

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  • The Skeptical Speculator

    Markets fall as Argentina defaults

    Stocks fell sharply on Thursday. The MSCI All-Country World Index fell 1.5 percent, weighed down by a 2.0 percent fall in the S&P 500. In particular, Argentina's Merval Index plunged 8.4 percent on Thursday after the country defaulted for the second time in 12 years after the failure of last-ditch talks with holdout creditors. Argentina's bonds and currency also fell. Economic data on Thursday had been mixed. In the US, the Institute for Supply Management-Chicago business barometer fell to 52.6 in July from 62.6 in June. However, in the euro area, inflation slowed to 0.4 percent in July from 0.5 percent in June even as the unemployment rate fell to 11.5 percent in June from 11.6 percent in May. Germany in particular reported some positive data on Thursday. German unempl...more

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  • International Political Economy Zone

    Can Malaysia Airlines Be Rebranded?

    This model may soon become a historical item. Can a once-proud name like Malaysia Airlines be restored after two headline-grabbing accidents in 2014? I have written about how the carrier is already burdened with overstaffing, competition on domestic routes from low-cost carriers, and competition of international routes from Middle Eastern ones. On top of everything, it is a state-owned firm with all the (check-in) baggage that entails in terms of being politicized as a "flag carrier." Actually, Malaysia Airlines was briefly privatized, but it soon found itself in government hands as credit woes struck. Hence, 2014's incidences hit an airline that was already in financial trouble.Now there is talk of rebranding the carrier. However, the problem for Malaysia Airlines...more

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  • VoxEU.org: Recent Articles

    Why developing host countries sign increasingly strict investment agreements

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) This post by Cato’s Dan Ikenson on the U.S. Export-Import Bank is a bit wonky, but well worth your time to read if you’ve any serious interest in the argument over the reauthorization of that great geyser of cronyism.  Here’s Dan’s conclusion – a compelling one, especially in light of the fact that politicians, unlike the market, care only about what is easily seen: There are hundreds and probably thousands of U.S. companies scattered over 189 industries that produce in the United States, employ American workers, pay federal, state, and local taxes, and contribute to the social fabric of the communities in which they operate, but are competitively disadvantaged by Ex-Im’s provision of low-rate financing to their foreign c...more

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  • Econbrowser

    Guest Contribution: How Janet Yellen Might Have Responded to the Policy Rules Legislation

    Today, we’re fortunate to have Alex Nikolsko-Rzhevskyy, Assistant Professor of Economics at Lehigh University, David Papell and Ruxandra Prodan, respectively Professor and Clinical Assistant Professor of Economics at the University of Houston, as Guest Contributors In a contentious hearing before the House Financial Services Committee, Federal Reserve Chair Janet Yellen reacted extremely negatively to the proposed “Federal Reserve Accountability and Transparency Act of 2014”, introduced into Congress on July 7, which would require the Fed to adopt a policy rule. As reported in The New York Times and the Wall Street Journal on July 16, she called the proposal a “grave mistake” which would “essentially undermine central bank independence.” In the next day...more

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  • iMFdirect - The IMF Blog

    Too Much At Stake: Moving Ahead with Energy Price Reforms

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  • CIPE Development Blog

    U.S. Companies Should Not Overlook Opportunities in Sub-Saharan Africa

    Next week the U.S.-Africa Leaders Summit will bring approximately 50 heads of state to Washington, DC, for the purpose of discussing trade and investment in Africa and highlighting America’s commitment to the continent. Sub-Saharan Africa is growing quickly, and U.S. companies are starting to be left behind. READ MORE ...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from Milton Friedman’s first Newsweek column – “Minimum-Wage Rates” – which appeared on September 26, 1966: I am convinced that the minimum-wage law is the most anti-Negro law on our statute books – in its effect not its intent. (The first part of Friedman’s quotation is unquestionably true.  The latter part might have been true by 1966, when Friedman wrote these words.  But the original intent of minimum-wage legislation was, if not explicitly anti-black, certainly unsavory.) If you mandate that Smith, if he chooses to deal with Jones, bestow more benefits on Jones than  Smith would otherwise bestow, you will reduce Smith’s eagerness to deal with Jones, or you will oblige Jones to give ...more

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  • Fabius Maximus

    We love the Constitution yet hate our government. The past tells us why.

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  • Smart Economy

    Link Between Excess Free Radicals, Oxidative Stress and Fibromyalgia

    FACTSHEET 3.0: The Link Between Excess Free Radicals, Oxidative Stress and Fibromyalgia and How Can C[60] Hydrated Fullerenes Help? (v2)    If you have fibromyalgia, or chronic fatigue syndrome you may want to consider drinking Carbon [60] Hydrated Fullerene Water Solution to scavenge  / neutralise excess free radicals (oxidative stress) in the body that may cause fibromyalgia. What the medical literature says: Chronic Fatigue Syndrome  (Fibromyalgia) and Oxidative Stress Free radicals and antioxidants in primary fibromyalgia: an oxidative stress disorder? Rheumatol Int. 2005 Apr;25(3):188-90. Epub 2003 Dec 20. Bagis S1, Tamer L, Sahin G, Bilgin R, Guler H, Ercan B, Erdogan C. Author information 1Physical Medicine and Rehabilitation Department, Mersin University M...more

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  • International Political Economy Zone

    Marketing the Unmarketable: Israel's Soft Power

    Not your grandfather's idea of "nation branding."Regardless of the party in power, one thing you can count on is that the United States will be more pro-Israel than nearly everyone else, John Kerry's alleged ham-fistedness notwithstanding. While the rest of the world is rather appalled by Israel's military attacking (a) nominally their own people in (b) a hemmed-in area, American politicians of all stripes try to outcompete each other in showing support for the embattled nation. In the rest of the world, however,  I do not need to tell you that its reputation is rather lower. Especially when these gruesome conflicts occur, for instance, I have personally received messages time and again to participate in an academic boycott our Israeli colleagues. So while American...more

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  • VoxEU.org: Recent Articles

    Dealing with the threat of climate catastrophe

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  • The Skeptical Speculator

    US economy rebounds, Fed monetary policy unchanged

    US economic data on Wednesday were positive. The economy rebounded in the second quarter, growing at a 4 percent annualised rate after having shrunk at a 2.1 percent rate in the first quarter. And the third quarter appears to have started well, with an ADP report showing that companies added 218,000 workers in July, exceeding the average for the year. The Federal Reserve left monetary policy unchanged at its policy meeting on Wednesday though. "Labor market conditions improved, with the unemployment rate declining further," the Fed said in a statement. "However, a range of labor market indicators suggests that there remains significant underutilization of labor resources." Also on Wednesday, the European Commission reported that its economic sentiment index for the euro...more

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  • John Quiggin

    The end of economic rationalism …

    … and the new age of entitlement. That’s what we are getting under the Abbott government. It’s striking how suddenly the elite consensus in favor of free market policies has collapsed now that we have a tribalist pro-business government. Some examples: * The Institute of Public Affairs, which once treated irrigation projects like the Ord River scheme as the worst kind of boondoggle now lobbies for them, and for special tax breaks, on behalf of their new owner major sponsor, Gina Rinehart * The Business Council of Australia wants a strategy of “growing those sectors of our economy that can win on a global scale and make the greatest contribution to lifting our national wealth.” Of course, they deny that this involves “picking winners&...more

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  • Fabius Maximus

    Myths about the Vietnam War laid the foundation for our Forever War

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  • International Political Economy Zone

    Is Russia on Argentina's Credit Highway to Hell?

    One financial goner meets another?This commentary by Mohamed El-Erian struck me as wildly speculative at first: Russia is the next Argentina...yeah right! Are we talking about the same Russia that supposedly has a cool $475 billion in foreign exchange reserves? It isn't pipsqueak Argentina with less than $29 billion in reserves that looks like it may default tomorrow (more on this later after my earlier commentary). El-Erian isn't convinced that Russia's troubles are to be as lightly taken as the markets suggest:That said, Argentina is not entirely unique. Russia is on a similar path, though the details and the timetable differ. Russia's government, companies and banks neither need nor want to default on their debts. If, however, Ukraine-related geopolitical tensions ...more

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  • Worthwhile Canadian Initiative

    How big has the effect of increases in the minimum wage been on youth employment?

    One of the more puzzling features of the Canadian labour market in the last few years recovery has been the stubborn refusal of youth employment rates to recover from the recession: There may a relatively simple (partial) explanation. This is taken from a recent Statistics Canada study on trends in the minimum wage: There seems to be a broad consensus around "small increases in the minimum wage will have small effects on employment", but this is not a small increase: the CPI-corrected Canadian minimum wage increased by 12.9% between 2008 and 2013. So in this post I'm going to try to put together some back-of-envelope numbers about what sort of effect this increase has had on youth employment. The counterfactual I'm going to consider is: What would ha...more

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  • Worthwhile Canadian Initiative

    A New Policy Think Tank

    Well, there is a new policy think tank in Canada and they have just released a commentary on the minimum wage.  The Northern Policy Institute began operations over the last year (I am a member of the Research Advisory Board) with a primary mission to provide evidence based research on the challenges and opportunities facing Northern Ontario.  However, they also are generating policy work with a broader audience in mind as their recent offering on minimum wages demonstrates. The commentary's author is Morley Gunderson and the long and short of the piece is that minimum wage legislation makes for good politics but poor economics.  Gunderson recommends that: i) the discourse around minimum wages needs to place more emphasis on the adverse employment e...more

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  • CIPE Development Blog

    Now Accepting Applications for CIPE Internships

    Internships are often great stepping stones to a full-time career, which is why the Center for International Private Enterprise (CIPE) is excited to announce that we are now accepting applications for our 2014 Internship Program at our headquarters in Washington, DC. If you are passionate about supporting international development and private sector engagement in policymaking, then landing an... ...more

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  • Worthwhile Canadian Initiative

    When is helicopter money optimal?

    Money is fungible. And things get lost in translation, especially between micro and macro. "Helicopter money" is when the central bank prints money, gives it to the government, and the government gives it to everyone, as a freebie. When is helicopter money optimal? Preliminary answer: almost all the time. Because almost every year, it is optimal for the Bank of Canada to print money to keep inflation at 2%. And it earns seigniorage profits from printing money, and it gives those profits to the government. And it is optimal for the government to give money to some people, like the very poor. And you could say that those welfare cheques are financed (in part) by printing money. Or you could say that it is road repairs that are financed by printing money. Since ...more

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  • Greg Mankiw's Blog

    Interview with Larry Summers

    In The New Republic.

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  • Free exchange

    Width, not depth

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  • Smart Economy

    Pumpkin Seed & Soy and Overactive Bladder

    Published July 1, 2014 Nutraceutical: Pumpkin Seed & SoyIndication: Overactive BladderSource: Journal of Functional Foods, Volume 8, May 2014Research: Overactive bladder (OAB) has become an increasing field of interest. Traditional use indicates that pumpkin seed (Cucurbita pepo L.) may be helpful in combating its symptoms. Additionally, soy isoflavones (Glycine max) are well-documented for hormonal imbalance related indications. This randomized, double-blind, placebo-controlled study evaluated efficacy and safety of Cucuflavone (containing extracts of pumpkin seed and soy germ) in 120 subjects suffering from OAB.Results: After 12 weeks, subjects taking Cucuflavone experienced a significant reduction versus baseline, in 1) urination frequency, 2) urgency, 3) incontinen...more

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  • Smart Economy

    Manipulating key protein in the brain holds potential against obesity and diabetes

      DALLAS -- A protein that controls when genes are switched on or off plays a key role in specific areas of the brain to regulate metabolism, UT Southwestern Medical Center researchers have found. The research potentially could lead to new therapies to treat obesity and diabetes, since the transcription factor involved – spliced X-box binding protein 1 (Xbp1s) – appears to influence the body's sensitivity to insulin and leptin signaling. Insulin and leptin are hormones central to the body's regulation of food intake and sugar disposal, and obesity and diabetes are conditions under which the body develops resistance to their actions. "This study identifies critical molecular mechanisms that link the brain and peripheral endocrine tissues and that ultimately contri...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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  • Jeffrey Frankel's Blog

    It Takes More than Two to Tango: Cry, But Not for Argentina, nor for the Holdouts

    U.S. federal courts have ruled that Argentina is prohibited from making payments to fulfill 2005 and 2010 agreements with its creditors to restructure its debt, so long as it is not also paying a few creditors that have all along been holdouts from those agreements.  The judgment is likely to stick, because the judge (Thomas Griesa, in New York) told American banks on June 27 that it would be illegal for them to transfer Argentina’s payments to the 92 per cent of creditors who agreed to be restructured and because the US Supreme Court in June declined to review the lower court rulings. It is hard to cry for Argentina or for its President, Cristina Fernández de Kirchner. Nevertheless the ruling in favor of the holdouts is bad news for the international financial syst...more

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  • Greg Mankiw's Blog

    What makes a good economist?

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  • Institutional Economics

    Rent or Buy: Does it Matter?

    A RBA Research Discussion Paper on whether Australian housing is over-valued attracted considerable media attention. The (unsurprising) bottom-line was that Australian housing is currently fairly valued based on the user-cost approach, but that the average household might be better off renting now if, ‘as many observers have suggested,’ future real house price growth is less than the historical annual average rate of around 2.5% since 1955. As it turns out, the ‘many observers’ actually referenced in the paper are the RBA itself, which makes one wonder whether the RDP’s conclusion is part of the RBA’s broader jaw-boning effort directed at expectations for future house price appreciation. In fact, the RBA’s RDP makes an excellent case for the view that w...more

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  • Alpha.Sources

    Is the Euro Overvalued?

    Well, yes if you ask Mr. Draghi it is, but not if you look at fundamental long run charts. Looking at both the REER and the trade weighted index, the euro is currently bang on average. Obviously, the ECB would like a weaker currency, but the best way to reach that objective will probably be to do nothing. It is difficult to expect a weaker currency amid a cyclical recovery with strong portfolio inflows and a current account surplus.    ---  Pictures are courtesey of Pantheon Macroeconomics and have also been posted at Twitter.  ...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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  • Greg Mankiw's Blog

    Commodity Money

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  • Alpha.Sources

    Confirming or Rejecting the idea of a eurozone recovery

    The following chart is an interesting one, depicting the sub-index from the EC consumer survey for major purchase intentions in the eurozone over the next year. Still moribund, this indicator suggests that the consumer is still very cautious in the euro area, but what if it breaks higher?  I will be watching this closely for a move higher—or a move back down into its post-crisis range—in coming months.    --- Picture is courtesey of Pantheon Macroeconomics, and has also been posted at Twitter. ...more

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  • Institutional Economics

    Eight Housing Affordability Myths

    I have published a new Issue Analysis with the Centre for Independent Studies, Eight Housing Affordability Myths. In the paper, I show how a number of highly persistent myths about the nature of housing markets, the dynamics of house prices and the drivers of housing affordability condition public policy to focus on excessively on housing demand at the expense of housing supply....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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  • Jeffrey Frankel's Blog

    The ECB’s Unprecedented Monetary Stimulus

    After the recent Draghi press conference announcing new measures to ease monetary policy in euroland, I responded to live questions from the Financial Times: “The ECB Eases,” podcast,  FT Hard Currency, June 5, 2014 (including regarding my proposal that the ECB should buy dollar bonds). And also to questions in writing from El Mercurio, June 5: • Many critics point that these measures do not solve the economic problems of the Eurozone and in that they only benefit the financial markets. Do you agree? JF: It is too much to expect monetary policy by itself to solve all the economic problems of the Eurozone. But I think the measures announced by the ECB today were steps in the right direction. Mario Draghi emphasized steps to facilitate the transmission...more

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  • Dani Rodrik's weblog

    Joining Global Policy as general editor

    David Held is one of the most thoughtful researchers and commentators on global issues, so I am thrilled and honored to be joining forces with him as joint general editor of Global Policy. The journal publishes a range of exciting academic and policy oriented pieces. Check it out here....more

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  • Dani Rodrik's weblog

    Erdogan’s Coup

    Daron Acemoglu wrote what seemed like a surprising upbeat piece on Turkish democracy a few days ago. His argument seems to be that democracy required power to be wrested away from the secularists who had erected authoritarian structures, and Erdogan had achieved that. Even though, Erdogan’s recent turn to authoritarianism is “lamentable,” it was, Acemoglu claims, a predictable stage in Turkey’s democratic transition. Once Erdogan is gone, the article implies, democracy would be on a stronger footing than ever. There were in fact many other paths that could have proved less costly. The more typical pattern is that the old elites reach a modus vivendi with the rising, popular forces that preserves some of their privileges in return for opening up (as happened in S...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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  • Jeffrey Frankel's Blog

    China Is Not Yet #1

    Widespread recent reports have trumpeted: “China to overtake US as top economic power this year.”  The claim is basically wrong. The US remains the world’s largest economic power by a substantial margin. The story was based on the April 29 release of a report from the ICP project of the World Bank: “2011 International Comparison Program Summary Results Release Compares the Real Size of the World Economies.”     The work of the International Comparison Program is extremely valuable.  I await eagerly their latest estimates every six years or so and I use them, including to look at China.  (Before 2005, the data collection exercise used to appear in the Penn World Tables.) The ICP numbers compare countries’ GDPs using PPP rates, rather than actual excha...more

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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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  • Alpha.Sources

    The Big Short on Volatility

    Two investment themes in particular, since 2008, have been predominant in my view and the continuation or unravelling of both hold the key to successful asset allocation in the next 3-5 years. The first is the suppression of volatility on the back of aggressive and ongoing central bank intervention. The second is the hunt for yield characterised by two key currents. Firstly, investors have been pushed far out the risk spectrum (often reluctantly). Secondly, we have seen bonds and stocks appreciate and depreciate together which has put into question core tenets of traditional portfolio allocation.  The overarching investment conclusion from the points above is obvious. The focus, hysteria and obsession around central bank policy will continue for it is increasingly ...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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  • Rick Bookstaber

    Live to Eat, Eat to Live

    In a recent New York Times opinion piece, Paul Krugman assessed the possibility that the economy is in a new, constant state of mild depression, and suggests several reasons why this might be occurring, including slowing population growth and a persistent trade deficit. To this I would like to suggest another one, which has been a topic of some of my previous posts: We simply demand less in terms of the consumption of produced, brick and mortar types of goods because that is not where we are spending our lives. Granted, we need a place to live, food to eat, a car to get around, but now we are not living to eat, we are eating to live; we are living to do things that do not require a huge industrial machine. (I won't even get into the point that insofar as we require the...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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Otaviano Canuto

Otaviano Canuto is Senior Advisor on BRICS Economies in the Development Economics Department, World Bank, a new position established by President Kim to bring a fresh research focus to this increasingly critical area. He also has an extensive academic background, serving as Professor of Economics at the University of Sao Paulo and University of Campinas (UNICAMP) in Brazil.

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