EconoMonitor

Economics Blog Aggregator

    Global Macro

  • VoxEU.org: Recent Articles

    A ‘crowding out’ theory of the Eurozone crisis

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  • VoxEU.org: Recent Articles

    Rethinking African solar power for Europe

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  • The Skeptical Speculator

    Stocks rally, US existing home sales rise

    Global stocks rose on Tuesday. The MSCI All-Country World Index rose 0.7 percent, the S&P 500 climbed 0.5 percent and the STOXX Europe 600 jumped 1.3 percent. US economic data on Tuesday were positive. Existing home sales rose 2.6 percent in June to an eight-month high, with the median house price hitting its highest level since 2007. The consumer price index rose 0.3 percent in June, down from 0.4 percent in May. However, the 12-month inflation rate was unchanged at 2.1 percent....more

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  • John Quiggin

    Productivity yet again

    The ABC has yet another story about economists warning on the need for more productivity. It’s a mixed bag. First up, this from Professor James Giesecke from Victoria University’s Centre for Policy Studies “We’re going to need a growth rate in multi-factor productivity more like the rates that we saw back in the ’70s and ’80s, about 0.7 per cent per annum, in order to begin increasing per capita living standards going forward appears to mark an abandonment of the mythical 1990s productivity surge, though he goes on to talk about micro-economic reform. More clearly positively, a bit of attention paid to bloated and lazy management rather than telling the rest of to “work harder and smarter” Many economists are turning t...more

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  • TIME » Time Sections » Business

    CMO: Chipotle’s Successful Because It’s Been ‘Very Consistent’

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  • TIME » Time Sections » Business

    Chrysler Recalls Up To 800,000 Jeeps Over Ignition Switch Problems

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  • TIME » Time Sections » Business

    Nokia Drags Down Microsoft Profits

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  • Paul Krugman

    Debt Disaster Dead-Enders

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  • The Big Picture

    10 Tuesday PM Reads

    My afternoon train reads: • Why Europe May Gain the Edge for Investors (NY Times) • Alpha Addict: The Amazing Career of Leon Cooperman (CNBC) • When Beliefs and Facts Collide (NY Times) • Do optimists or pessimists manage their money better? (Yahoo Finance) see also Economists have a lot to learn from ‘The Big Bang Theory’ (FT) • People Hate Bankers Because People Are Ignorant (Bloomberg View) • The Difficulty in Holding Executives Accountable (DealBook) • Limousine liberalism’s good works (WaPo) • State’s job growth defies predictions after tax increases (Sacramento Bee) • Apple Readies a Big Bet on Big-Screen Phones (WSJ) • 22 Goyim Who Must Be Stopped (Buzzfeed) What are you reading?   Markets Don’t Dwell on Bad News...more

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  • Beat the Press

    Enough Magical Thinking on Trade

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  • Brad DeLong's Grasping Reality...

    Noted for Your Afternoon Procrastination for July 22, 2014

    Over at Equitable Growth--The Equitablog Afternoon Must-Read: Bob Laszewski: Halbig Decision Puts Obamacare Back on the Menu | Washington Center for Equitable Growth The 4th Circuit Bigfoots the Republican DC Panel's Attempt to Win the Day with Its Anti-ObamaCare Decision... | Washington Center for Equitable Growth Investment in Equipment (and Software): What Are Neil Irwin and Tyler Cowen Thinking? Tuesday Focus: July 22, 2014 | Washington Center for Equitable Growth Morning Really Must-Read: Nicholas Bagley: ObamaCare and Halbig: What Does This Morning's Decision Mean? | Washington Center for Equitable Growth Morning Must-Read: Robert Waldmann: Anchored Perceived Inflation, or How Fox News Helped Obama | Washington Center for Equitable Growth Morning Must-Read: Scot...more

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  • The Big Picture

    Significant Climate Anomalies June 2014

    Click for the ginormous version. Source: NOAA

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  • Brad DeLong's Grasping Reality...

    The 4th Circuit Bigfoots the Republican DC Panel's Attempt to Win the Day with Its Anti-ObamaCare Decision...

    Sarah Kliff: Separate circuit court rules in favor of Obamacare subsidies: "The Fourth Circuit Court of Appeals... ruled Tuesday afternoon that Obamacare subsidies could be offered through federally-run insurance marketplaces. It is... clear that widely available tax credits are essential to fulfilling the Act’s primary goals and that Congress was aware of their importance when drafting the bill," the Fourth Circuit Court ruled. We'll have more coverage soon...." ...more

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  • Brad DeLong's Grasping Reality...

    Liveblogging World War II: July 22, 1944: Bretton Woods

    From the archive: Bretton Woods: On July 22nd 1944, finance experts who had spent the past three weeks gathered at a hotel in New Hampshire, produced two documents setting out their plan for the post-war monetary system. In response, The Economist published this leader article on July 29th, paying particular attention to whether the British government should ratify the Bretton Woods Agreements: THE Monetary Conference at Bretton Woods closed its session at the end of last week with the unanimous agreement of all the participants to the text of two documents, one of them setting up an International Monetary Fund, the other setting up an International Bank for Reconstruction and Development. (The terminology is confusing, since the Fund will conduct a banki...more

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  • The Big Picture

    Global House Price Index

    Home sales, at least in the U.S., seem to be rising. Existing home sales in June increased to 5.04 million annualized. That number may be affected by the weather, as June sales most likely come from contracts signed after the depths of winter. To find out if this is a global improvement, we can take a look at the International Monetary Fund’s Global House Price Index. Its data and lovely infographics give us a few interesting things to digest. (You can also use the BIS data or OECD statistics). The first chart shows the annual percentage change in housing prices. The U.S. is 10th, and housing prices in the country are still far below (35 percent, or so) their 2006 peak. Continues here   Source: International Monetary Fund ...more

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  • Worthwhile Canadian Initiative

    We Are Not Slower, Just More Erratic: Comparing Growth in Canada and the United States

    The existence of a productivity gap between Canada and the United States should ultimately manifest itself in terms of the growth rate of real per capita GDP.  If productivity growth in Canada is consistently below that of the United States, then our real per capita GDP should also not grow as quickly as the United States.  Yet, the historical evidence shows that the real per capita GDP growth rate in Canada has not necessarily underperformed the United States since 1870. However, there is an interesting differential performance across time periods. I’ve used real per capita GDP in $2009 for the United States from EH.Net and real per capita GDP in $2002 for Canada using the Urquhart-Green GDP data and data from Statistics Canada (see a previous post)....more

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  • Cafe Hayek - Article Feed

    What Price Are YOU Now Charging to Supply the Drug?

    (Don Boudreaux) Here’s a letter to an e-mail correspondent (whose name is used here with her kind permission): Ms. Molly Mills Dear Ms. Mills: Thanks for alerting me to Joe Nocera’s article on the cystic-fibrosis wonder drug Kalydeco - a drug that now costs each patient more than $300,000 annually (“The $300,000 Drug,” July 18).  You ask how my “free market principles justify a private business charging sick people this extortionate price.” While admitting that this price is unusually high - and with mentioning here in passing that Mr. Nocera himself notes that Kalydeco’s maker, Vertex, “provides the drug for free” to uninsured patients - let me answer your question by first asking some of my own. How much w...more

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  • Marc to Market

    Great Graphic: US Commercial Real Estate Recovery

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  • Economist's View

    'Will Automation Take Our Jobs?'

    Running late today -- two very quick ones. First, from Scientific American: Will Automation Take Our Jobs?: Last fall economist Carl Benedikt Frey and information engineer Michael A. Osborne, both at the University of Oxford, published a study estimating the probability that 702 occupations would soon be computerized out of existence. Their findings were startling. Advances in ... technologies could, they argued, put 47 percent of American jobs at high risk of being automated in the years ahead. Loan officers, tax preparers, cashiers, locomotive engineers, paralegals, roofers, taxi drivers and even animal breeders are all in danger of going the way of the switchboard operator. Whether or not you buy Frey and Osborne's analysis, it is undeniable that something stran...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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  • CIPE Development Blog

    The Fragile States Index 2013: A Snapshot of Global Stability

    The year 2013 proved to be politically dynamic, with many countries seeing political strife or even regime change -- among other crises, Ukrainians took the streets to demand more political and economic freedoms and closer ties with the West and the civil war in Syria raged on. The Fragile States Index (FSI) attempts to measure the factors driving such upheaval on a country-by-country basis. READ... ...more

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  • iMFdirect - The IMF Blog

    Euro Area: An Unbalanced Rebalancing?

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  • Marc to Market

    Euro Eases to New 2014 Lows

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  • Beat the Press

    Researchers Who Know Economics Worry About Per Capita GDP Growth, Not Overall Growth

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  • Free exchange

    Overruled

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) My Mercatus Center colleague Veronique de Rugy explains that the U.S. Export Bank is inefficient and immoral. Speaking of which, Vero is properly unimpressed by Sen. Elizabeth Warren’s economically uninformed support for the Ex-Im Bank.  A slice: The biggest Ex-Im beneficiaries are U.S. giant corporations like Boeing, GE, and Caterpillar and their very wealthy foreign buyers. These companies don’t need the bank, but they love it. It allows a select number of U.S. exporters to increase their profits and transfer onto taxpayers risk that the companies should be shouldering. The foreign companies love it because, while they do have access to capital without the bank, Ex-Im loans come much cheaper, giving them a U.S. government-sponsored edge ove...more

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  • Marc to Market

    Euro Slips, but will it Break?

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from pages 411-412 of Kevin Dowd‘s 1994 essay “Free Banking,” which is chapter 59 in The Elgar Companion to Austrian Economics (Peter J. Boettke, ed., 1994; links added): Another point that stands out [in a review of the empirical evidence] is the high degree of stability of free banking systems.  Overissues of currency were corrected rapidly by the banks’ clearing system operating on the basis of the commodity standard (White, 1984; Selgin, 1988).  There is evidence that interest rates were more stable under free banking, and the less regulated banking systems of Scotland and Canada were apparently better able to weather shocks than their more regulated counterparts in England and the USA.  There is also evidence t...more

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  • naked capitalism

    Links 7/22/14

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  • Beat the Press

    That Boom In Investment: Waiting for Godot

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  • naked capitalism

    Ukraine Open Thread (and Links)

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  • International Political Economy Zone

    Adios Sochi Grand Prix 2014, Russia World Cup 2018?

    Geography is against Russia retaining these events without scrutiny.This is not exactly a pleasant post to write given the circumstances, but it's something that will be the subject of discussion anyway in the coming months and perhaps years. First, as I wrote a few weeks ago, the first Russian Grand Prix is scheduled on the Formula One calendar for October 12. Even as its business elites are preparing for the worst as the full weight of Western sanctions passed (and yet to pass_ disrupt their abilities to conduct business abroad, Russian race organizers are adamant that show must go on:Organizers insist Russia's first Formula One Grand Prix will go ahead as planned despite an airliner being shot down in the conflict zone in eastern Ukraine.Malaysian Airlines Flight ...more

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  • Economist's View

    Links for 7-22-14

    An Imaginary Budget and Debt Crisis - Paul Krugman Long-term damage of the US court’s Argentinian debt ruling - vox More on Step-(Un)Wise Regression and Pre-Testing - Dave Giles The Inflation Truther Crank Index - Bloomberg View GDP Growth: Will We Find a Higher Gear? - macroblog U.S. Unemployment Demands New Ideas - Bloomberg View You'll get no edge with Zero Hedge - Noahpinion Blogs review: The Taylor Rule legislation debate - Jérémie Cohen-Setton Asymmetrical Doctrines (Vaguely Wonkish) - Paul Krugman Partial corporate tax harmonisation in the EU - vox Yes, We Have No Banana - Paul Krugman One paywall model to rule them all - Digitopoly Comparing Bank and Federal Reserve Stress Test Results - Liberty Street Are Labor Markets Exploitative? - Tim Taylor House ...more

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  • naked capitalism

    The Argentina Debt Case

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  • John Quiggin

    Macrofoundations of Micro

    I was very pleased with my post on this topic, making the point that standard microeconomic analysis only works properly on the assumption that the economy is at a full employment equilibrium. But, it turns out, exactly the same point, using the same title, was made by David Colander 20 years ago Colander (1993), The Macrofoundations of Micro, Eastern Economic Journal, Vol. 19, No. 4 (Fall, 1993), pp. 447-457 And he wasn’t the first. The term and the idea have a long history, including a contribution by my UQ colleague Bruce Littleboy The term macrofoundations, I suspect, has been around for a long time. Tracing the term is a paper in itself. Axel Leijonhufvud remembered using it in Leijonhufvud [1981] . I was told that Roman Frydman and Edmund Phelps [1983] used ...more

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  • John Quiggin

    Monday Message Board

    It’s time for another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. ...more

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  • The Skeptical Speculator

    US financial regulatory policy under test amid deterioration in loan quality

    Earlier this month, Federal Reserve Chair Janet Yellen opined that regulation is the preferred way of combating excessive financial risk-taking, not interest rate policy. However, it remains to be seen whether regulation is up to the task. From Bloomberg: One of the Federal Reserve’s first post-crisis tests of its ability to quash excessive risk-taking using regulatory tools is so far looking like a failure. The Fed’s Board of Governors told Congress last week that it’s engaged in “strong supervisory follow-up” to guidance given to banks in 2013 to improve their underwriting standards for high-yield loans. Despite those efforts, Chair Janet Yellen said she’s still seeing a “marked deterioration” in quality. For the first time, more than half of the junk-...more

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  • Fabius Maximus

    Tom Clancy, manufacturer of myths that kept us happy & ignorant

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  • Econbrowser

    Unanchored

    In a recent article, Amity Shlaes asserts official statistics mismeasure how we experience inflation. I’m going to agree, but not for the reasons you might think. It’s not because John Williams’ Shadowstats, which she appeals to, is right (Jim has comprehensively documented why each and every person who cites that source should be drummed out of the society of economists or aspiring economic commentators). Rather it’s because I think people do have biases — i.e., the steady-state rational expectations hypothesis might not be applicable. Ms. Shlaes writes in “Inflation Vacation”: …The price zap is an inflation zap. The reason you thought you could afford this vacation in the first place was that you know a little about mon...more

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  • VoxEU.org: Recent Articles

    Partial corporate tax harmonisation in the EU

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  • Economist's View

    'The Wage Growth Gap for Recent College Grads'

    Via the SF Fed: The Wage Growth Gap for Recent College Grads, by Bart Hobijn and Leila Bengali, FRBSF Economic Letter: Starting wages of recent college graduates have essentially been flat since the onset of the Great Recession in 2007. Median weekly earnings for full-time workers who graduated from college in the year just before the recession, between May 2006 and April 2007, were $653. Over the 12 months ending in April 2014, the earnings of recent college graduates had risen to $692 a week, only 6% higher than seven years ago.  The lackluster increases in starting wages for college graduates stand in stark contrast to growth in median weekly earnings for all full-time workers. These earnings have increased 15% from $678 in 2007 to $780 in 2014. This has creat...more

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  • iMFdirect - The IMF Blog

    Asia’s Seismic Shift: How Can the Financial Sector Serve Better?

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  • Greg Mankiw's Blog

    What makes a good economist?

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  • Paul Krugman

    Yes, We Have No Banana

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  • Paul Krugman

    Asymmetrical Doctrines (Vaguely Wonkish)

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  • Free exchange

    Let them eat cosmopolitanism

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  • Fabius Maximus

    Economists forecast a boom soon. The numbers show slowing. Who is right?

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  • The Skeptical Speculator

    Are measures of stock market valuation useful?

    Many analysts think that the United States stock market is now overvalued. A Bloomberg poll showed last week that forty-seven percent of financial professionals surveyed said that the equity market is close to unsustainable levels while fourteen percent already saw a bubble. Federal Reserve Chair Janet Yellen told the Senate Banking Committee last week that equity valuations “remain generally in line with historical norms” even as the Fed's Monetary Policy Report accompanying her testimony noted that valuations for smaller companies in social-media and biotech industries appear “substantially stretched”. However, on Friday, Cullen Roche at Pragmatic Capitalism wrote a post questioning the value of valuation measures for the stock market. In the case of the stock...more

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  • Worthwhile Canadian Initiative

    Learning about theory does not teach people how to theorize

    A random question from a Stanford University PhD micro exam looks something like this: The "Robinson Crusoe economy" is the simplest possible general equilibrium model, and students who can solve for Crusoe's leisure and coconut consumption choices have presumably learned something about general equilibrium theory. But they haven't learned how to theorize.  Theorizing - creating theories to understand and explain the world - starts off by identifying an interesting question. Creating exam questions is theorizing, because the question setter has to identify a puzzle. Answering exam questions is one step removed from the act of theorizing. The question has already been identified. My sense - and I could be wrong - is that a non-trivial numb...more

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  • International Political Economy Zone

    Bhagwati: PRC's Corruption 'Developmental', India's Isn't

    Corruption is one of the most studied phenomena given its ubiquity in developing countries. If corruption did not occur on a significant scale in these countries, then they would probably be classified as developed. That said, there are many debates about corruption. At one extreme, there is a "zero tolerance" approach that suggests all forms of using public office for private gain are unwelcome and should be discouraged. On the other hand, others would say that there are different forms of corruption--some of which are potentially beneficial such as "speed money" which hastens the processing of documentation in slow-moving and unwieldy bureaucracies.It is a perhaps unfortunate sign of its developmental status that India features large as a setting for debates on corrup...more

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  • Econbrowser

    Keeping oil production from falling

    Production flows from a given oil field naturally decline over time, but we keep trying harder and technology keeps improving. Which force is winning the race? An oil reservoir is a pool of hydrocarbons embedded and trapped under pressure in porous rock. As oil is taken out, the pressure decreases and the annual rate of flow necessarily declines. A recent study of every well drilled in Texas over 1990-2007 by Anderson, Kellogg, and Salant (2014) documents very clearly that production flows from existing wells fall at a very predictable rate that is quite unresponsive to any incentives based on fluctuations in oil prices. Average monthly production from Texas wells drilled in indicated period as a function of months since well completion. Source: Anderson, Kellogg,...more

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  • Fabius Maximus

    Proof pointing to the people guilty of weakening America

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  • International Political Economy Zone

    MNCs and Setting Cambodia's Minimum Wage

    Textile workers of Cambodia unite to mixed consequences.Economics textbooks will tell you that the cost of labor is determined when the downward-sloping demand curve for labor meets the upward-sloping supply curve of workers. Their intersection is called the "market-clearing" wage. Governments may introduce "distortions" however in the form of minimum wages when the market-clearing wage is deemed insufficient to meet the needs of the workers or are otherwise below what is normatively acceptable.In Cambodia, however, the cost of labor may be determined more by external forces. Namely, pressure from multinational corporations that subcontract textile manufacturing to the country. At present, 80% of Cambodia's exports revenues supposedly come from garments. Hence, Cambodia...more

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  • CIPE Development Blog

    Living Democracy

    Living in the U.S. for the past six months has been a thrilling experience for me. While it is always hard to focus on one experience when you have so many things to talk about, I am focusing on my experience with democracy. My question was very simple: I wanted to see how people from developed nations like the U.S. live their daily lives in a democratic society without being abstract or... ...more

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  • Econbrowser

    Declining Private Employment in Wisconsin, Sideways Trending in Kansas

    State level employment data will be released by the BLS on Friday, but state agencies have already released data (h/t J. Miller) confirming that Wisconsin private employment performance deteriorates, while Kansas continues to trend sideways. So much for the benefits of a high ALEC-Laffer ranking. Figure 1: Log private nonfarm payroll employment for Wisconsin (red), Minnesota (blue), California (teal), Kansas (green) and the US (black), all seasonally adjusted, 2011M01=0. Vertical dashed line at beginning of terms for indicated governors. California data from May release. Source: BLS, WI DWD, MN DEED, KS DoL, and author’s calculations. Figure 2: Log nonfarm payroll employment for Wisconsin (red), Minnesota (blue), California (teal), Kansas (green) and the US (black)...more

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  • CIPE Development Blog

    The Gathering

    With all due respect to CIPE’s other partners, surely the coolest workspace in the CIPE family today is located in Saida, Lebanon. The innovative space, called El Moltaqa (“The Gathering”), is the new home of the Development of People and Nature Association (DPNA). El Moltaqa is not merely an office for DPNA’s dedicated staff, it is a focal point for civic engagement in the community. READ MORE ...more

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  • Free exchange

    Business formal

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  • iMFdirect - The IMF Blog

    Fiscal Policy’s Evolving Role

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  • Worthwhile Canadian Initiative

    Legislated Taylor Rules again

    This is in response to the post (and associated paper) by Alex Nikolsko-Rzhevskyy, David Papell, and Ruksandra Prodan (hereafter NPP) arguing for a legislated Taylor Rule in the US. A central bank reaction function tells us how the central bank sets its monetary policy instrument (for example a nominal interest rate) as a function of various indicators of the state of the economy (for example inflation and output). Suppose an econometrician is estimating a central bank reaction function. Under what circumstances would the econometrician find a structural break in the estimated reaction function? And what would the performance of the economy look like during those structural breaks? Would it be better or worse than normal? Here are two examples: Example 1. Suppose a cen...more

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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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  • Institutional Economics

    Is John Edwards a Ricardian?

    John Edwards’ ‘Beyond the Boom’ is a welcome follow-up to his 2006 ‘Quiet Boom’, which I reviewed at the time in conjunction with Ian Macfarlane’s Boyer Lectures. I agree with the argument that economic reform should not be sold on the basis of a faux crisis or economic failure narrative. If proposed reforms are worth doing they are worth doing regardless of where we sit in relation to the business cycle or the budget outlook. John notes that households saved the Howard government’s tax cuts and that household saving would have been lower in their absence. This is an important observation, because it demonstrates the private saving offset to changes in public saving. Possibly to spare his readers the jargon, John didn’t mention this as an example of Ri...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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  • Smart Economy

    Oxidative stress in Alzheimer's disease and C[60] Hydrated Fullerenes

    Hydrated Fullerenes or Carbon [60] HYFNs (from Kharkiv, Ukraine) neutralizes excess free radicals that causes oxidative stress-Walter Derzko   Oxidative stress in Alzheimer's disease. Neurosci Bull. 2014 Apr;30(2):271-81. doi: 10.1007/s12264-013-1423-y. Epub 2014 Mar 24. Chen Z1, Zhong C. Author information 1Department of Neurology,      Zhongshan Hospital; The State Key Laboratory of Medical Neurobiology,      Fudan University, Shanghai, 200032, China. Abstract Oxidative stress plays a significant role in the pathogenesis of Alzheimer's disease (AD), a devastating disease of the elderly. The brain is more vulnerable than other organs to oxidative stress, and most of the components of neurons (lipids, proteins, and nucleic acids) can be oxidized in AD due t...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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  • Smart Economy

    Molecular snapshots of oxygen formation in photosynthesis

      [2014-07-10] Researchers from Umeå University have explored two different ways that allow unprecedented experimental insights into the reaction sequence leading to the formation of oxygen molecules in photosynthesis. The two studies have been published in the scientific journal Nature Communications.   "The new knowledge will help improving present day synthetic catalysts for water oxidation, which are key components for building artificial leaf devices for the direct storage of solar energy in fuels like hydrogen, ethanol or methanol," says Johannes Messinger, Professor in Biological Chemistry and leader of the Artificial photosynthesis research group at Umeå University. Every child learns at school that the oxygen we breathe is produced by photosynthesis in pla...more

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  • Smart Economy

    A first direct glimpse of photosynthesis in action

    PUBLIC RELEASE DATE: 11-Jul-2014  Contact: Dr. John Wray wray@mpimf-heidelberg.mpg.de 49-622-148-6277 Max-Planck-Gesellschaft Researchers visualize the processes by which photosynthetic proteins split water into hydrogen and oxygen An international team of researchers, including scientists from the Max Planck Institute for Medical Research in Heidelberg, has just a reported a major step in understanding photosynthesis, the process by which the Earth first gained and now maintains the oxygen in its atmosphere and which is therefore crucial for all higher forms of life on earth. The researchers report the first direct visualization of a crucial event in the photosynthetic reaction, namely the step in which a specific protein complex, photosystem II, splits water into hy...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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  • Greg Mankiw's Blog

    Some ACA Readings

    Kate Ho and Ariel PakesChuck BlahousJames Capretta 

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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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