EconoMonitor

Economics Blog Aggregator

    Global Macro

  • Brad DeLong's Grasping Reality...

    Links and Tweets...

    Tim Worstall: We Really, Seriously, Don't Want Currency Manipulation Provisions In Trade Deals http://www.forbes.com/sites/timworstall/2015/04/25/we-really-seriously-dont-want-currency-manipulation-provisions-in-trade-deals/ Dan Drezner: This Wasn’t the PhD Advice You Were Looking for http://www.washingtonpost.com/posteverything/wp/2015/04/24/this-wasnt-the-phd-advice-you-were-looking-for Philip Sandifer: Guided by the Beauty of Their Weapons: An Analysis of Theodore Beale and his Supporters http://www.philipsandifer.com/2015/04/guided-by-beauty-of-their-weapons.html Stuart Vyse: An Introvert’s Guide to Greeting Strangers, Vague Acquaintances, and Friends https://medium.com/human-parts/an-introvert-s-guide-to-greeting-strangers-vague-acquaintances-and-friends-dbb...more

    Link ›

  • The Skeptical Speculator

    Stocks hit records despite absence of funds inflows

    Stocks have been having a good run again recently. The Standard & Poor's 500 rose 1.8 percent last week to close at a new high. The Nasdaq Composite jumped 3.3 percent to wipe out its losses since the dot-com bubble and hit a record high. Riskier stocks have also done well. Small stocks have significantly outperformed the S&P 500, as have emerging market stocks. However, strategists at Bank of America Merrill Lynch sounded a note of caution last week. They said in a note on Thursday that even as US stock markets have been making record highs, investors have been pulling money out of US stock funds. “Correction risks will grow in [the] absence of fresh inflows in coming weeks,” wrote the strategists....more

    Link ›

  • International Political Economy Zone

    Leaving London: HSBC Returns to Hong Kong?

    The once and future home of HSBC?It may seem odd that the "Hong Kong and Shanghai Banking Corporation" or, more broadly, HSBC Holdings is headquartered in Canary Wharf, not in Hong Kong or Shanghai. However, the name does not suggest the place in the case of the British banking giant since it's been UK-based since 1993 after its purchase of Midland Bank and when there were doubts as to what the PRC would do after the 1997 takeover of Hong Kong. Most readers should be familiar with HSBC embroiling itself with nearly every financial scandal possible in recent years. A laundry list of fines have thus been levied on the bank, though in all fairness, the same can be said about several of its European and American counterparts. You name it and HSBC has probably been fined ove...more

    Link ›

  • TIME

    Watch This Guy Spray-Paint His Apple Watch to Make It Gold

    Link ›

  • John Quiggin

    Monday Message Board

    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.

    Link ›

  • John Quiggin

    Sandpit

    A new sandpit for long side discussions, idees fixes and so on. Unless directly responding to the OP, all discussions of nuclear power, MMT and conspiracy theories should be directed to sandpits (or, if none is open, message boards). ...more

    Link ›

  • The Big Picture

    Full Speech: Obama at the Correspondent’s Dinner

    Be sure to stick around through the 13:40 mark, when Luther, Obama’s anger translator, comes on . . . Source: Washington Post

    Link ›

  • The Big Picture

    10 Quick Content Marketing Tips

    10 Quick Content Marketing Tips (By DNN Software. Redesigned by Ethos3.) from Ethos3 | Presentation Design and Training

    Link ›

  • Marginal REVOLUTION

    Robot sentences to ponder

    Harnessing high-powered computing, color sensors and small metal baskets attached to the robotic arms, the machine gently plucked ripe strawberries from below deep-green leaves, while mostly ignoring unripe fruit nearby. Such tasks have long required the trained discernment and backbreaking effort of tens of thousands of relatively low-paid workers. But technological advances are making it possible for robots to handle the job, just as a shrinking supply of available fruit pickers has made the technology more financially attractive. …Machines are doing more than picking produce. Altman Specialty Plants Inc., one of the country’s largest nurseries, has been using eight, squat robots for the past two years to ferry more than 1.2 million potted roses and other plan...more

    Link ›

  • Cafe Hayek - Article Feed

    Costs (Such as Exports) Are Not Benefits

    (Don Boudreaux) Here’s a letter to the New York Times: The caption to a photo accompanying Greg Mankiw’s superb essay on the benefits of free trade reads “The 18th-century economist Adam Smith wrote that nations can benefit as much from imports as from exports, turning the conventional wisdom on its head” (“Economists Actually Agree on This: The Wisdom of Free Trade,” April 26). The text of Mr. Mankiw’s essay assures me that he did not write this caption. While Adam Smith did indeed turn conventional wisdom on its head, he emphatically did not write that nations can benefit as much from imports as from exports.  Instead, he countered the conventional wisdom by showing that nations benefit only from imports.  Smith understood correctly that expor...more

    Link ›

  • Paul Krugman

    We Weren’t Soldiers (Personal and Trivial)

    Link ›

  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) Greg Mankiw, writing in today’s New York Times, makes the case for free trade – and, in the process, rightly laments the economic ignorance that leads so many people to oppose it.  Back in 2007, my colleague Dan Klein argued along the same lines. George Will relies heavily and wisely upon the great Bruce Yandle’s theory of bootleggers and Baptists.  A slice: Yandle’s “bootleggers and Baptists” hypothesis is given many illustrations, from environmental regulations to Obamacare, in a new book of that title, co-authored with his economist grandson, Adam Smith. Yandle’s hypothesis expands “public choice” theory, which demystifies and de-romanticizes government by applying economic analysis — how incentives influence behavi...more

    Link ›

  • Economist's View

    'This Is Not A Trade Agreement'

    This is not a subtweet: This Is Not A Trade Agreement, by Paul Krugman: OK, Greg Mankiw has me puzzled. Has he really read nothing about TPP? Is he completely unaware of the nature of the argument? Personally, I’m a lukewarm opponent of the deal, but I don’t see it as the end of the Republic and can even see some reasons (mainly strategic) to support it. One thing that should be totally obvious, however, is that it’s off-point and insulting to offer an off-the-shelf lecture on how trade is good because of comparative advantage, and protectionists are dumb. For this is not a trade agreement. It’s about intellectual property and dispute settlement; the big beneficiaries are likely to be pharma companies and firms that want to sue gov...more

    Link ›

  • Marginal REVOLUTION

    Progressive Finnish fines for traffic tickets?

    Getting a speeding ticket is not a feel-good moment for anyone. But consider Reima Kuisla, a Finnish businessman. He was recently fined 54,024 euros (about $58,000) for traveling a modest, if illegal, 64 miles per hour in a 50 m.p.h. zone. And no, the 54,024 euros did not turn out to be a typo, or a mistake of any kind. Mr. Kuisla is a millionaire, and in Finland the fines for more serious speeding infractions are calculated according to income. The thinking here is that if it stings for the little guy, it should sting for the big guy, too. …The fines are calculated based on half an offender’s daily net income, with some consideration for the number of children under his or her roof and a deduction deemed to be enough to cover basic living expenses, currently 2...more

    Link ›

  • Paul Krugman

    This Is Not A Trade Agreement

    Link ›

  • Economist's View

    'Mediamacro Myth 6: 2013 Recovery Vindication'

    Simon Wren-Lewis: Mediamacro myth 6: 2013 recovery vindication: The idea that austerity during the first two years of the coalition government was vindicated by the 2013 recovery is so ludicrous that it is almost embarrassing to have to explain why. The half-truths in this case are so flimsy they do not deserve that label. I can think of two reasons why that claim could have any credibility. The first is that people confuse levels and rates or change. The second is that some critics of austerity might have occasionally overstated their case. To see the first point, imagine that a government on a whim decided to close down half the economy for a year. That would be a crazy thing to do, and with only half as much produced everyone would be a lot poorer. However a year la...more

    Link ›

  • Economist's View

    On Microfoundations

    Via Diane Coyle, a quote from Alfred Marshall’s Elements of the Economics of Industry: ...He wrote that earlier economists: “Paid almost exclusive attention to the motives of individual action, But it must not be forgotten that economists, like all other students of social science, are concerned with individuals chiefly as members of the social organism. As a cathedral is something more than the stones of which it is built, as a person is more than a series of thoughts and feelings, so the life of society is something more than the sum of the lives of its individual members. It is true that the action of the whole is made up of that of its constituent parts; and that in most economic problems the best starting point is to be found in the motives that affect the ind...more

    Link ›

  • The Fabius Maximus website

    Oz the Great and Powerful: a reminder that Mickey Mouse Owns Your Childhood

    Link ›

  • Brad DeLong's Grasping Reality...

    Just What Are the Risks That Alarm Ken Rogoff?

    Over at Equitable Growth: As I say, repeatedly: everything that Ken Rogoff writes is very interesting, nd almost everything is correct. But. This part of Ken Rogoff's piece appears to me to be very much on the wrong track: Ken Rogoff: Debt Supercycle, Not Secular Stagnation: "Robert Barro... has shown that in canonical equilibrium macroeconomic models... small changes in the market perception of tail risks can lead both to significantly lower real risk-free interest rates and a higher equity premium.... Martin Weitzman has espoused a different variant of the same idea.... Those who would argue that even a very mediocre project is worth doing when interest rates are low.... It is highly superficial and dangerous to argue that debt is basically free. READ MOAR ...more

    Link ›

  • Brad DeLong's Grasping Reality...

    Weekend Reading: Benito Mussolini (1932): What Is Fascism?

    Benito Mussolini: What Is Fascism?: Fascism, the more it considers and observes the future and the development of humanity quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace. It thus repudiates the doctrine of Pacifism -- born of a renunciation of the struggle and an act of cowardice in the face of sacrifice. War alone brings up to its highest tension all human energy and puts the stamp of nobility upon the peoples who have courage to meet it. All other trials are substitutes, which never really put men into the position where they have to make the great decision -- the alternative of life or death.... ...The Fascist accepts life and loves it, knowing nothing of and despising suicide: ...more

    Link ›

  • Marc to Market

    US Data and Fed to Drive the Dollar in the Week Ahead

    Link ›

  • Cafe Hayek - Article Feed

    Witch-Hunts Are Not Reality-Based

    (Don Boudreaux) Here’s a letter to the Boston Globe: Jeff Jacoby rightly condemns Massachusetts Attorney General Maura Healey’s ominous “fact-finding mission” into the rise of the price of the wonder drug Naloxone, which is used to treat heroin overdoses (“Politicians, ‘profiteers,’ and public health,” April 26).  As Mr. Jacoby points out, there’s nothing at all mysterious or nefarious about the price of a product rising when demand for that product rises.  Prices are supposed to rise as demand rises. Therefore, given the recent surge in heroin use – and, hence, the resulting increase in demand for Naloxone – Ms. Healey’s investigation into the causes of the current rise in Massachusetts of the price of Naxolone is as scientifical...more

    Link ›

  • The Big Picture

    The Remarkable Life & Lessons of Ronald Read

        My Sunday Washington Post Business Section column is out. This morning, we look at the remarkable life and lessons of Ronald Read. It is a fascinating tale. HereR17;s an excerpt from the column: “You may have read about the remarkable life and times of Ronald Read. He was the gas station attendant and lifelong resident of Windham County, Vt., who had quietly accumulated a portfolio worth a fortune. As theBrattleboro ­Reformer reported earlier this year, Read died last June at age 92. Despite his relatively modest wages, he left an estate with “stock holdings and property” valued at nearly $8 million. His bequest was to leave most of it to the Brattleboro Memorial Hospital and Brooks Memorial Library. His close friends and family were shoc...more

    Link ›

  • naked capitalism

    Links 4/26/15

    Link ›

  • naked capitalism

    Bill Black: Obama & TPP – Every One That Doeth Evil Hateth the Light

    Link ›

  • naked capitalism

    Quantitative Easing and The Great Recession: Who Wins? Who Loses?

    Link ›

  • Marginal REVOLUTION

    One of the last remaining Howard Johnson’s is closing

    What was once one of America’s most iconic and popular chains is now down to just two locations. According to NPR, one of the last three Howard Johnson’s restaurants closed its doors this week. Located in Lake Placid, N.Y., the restaurant opened in April of 1956. The Pittsburgh Post-Gazette writes that the owners of the Lake Placid location are getting old and their children are “not interested” in taking over. So, they sold the restaurant to new owners who plan to turn the building into a “high-end roadside diner.” Via the excellent Mark Thorson, there is more here.  You can read the Yelp reviews here. ...more

    Link ›

  • VoxEU.org: Recent Articles

    Central bankers as supervisors: The bandwagon effect

    Link ›

  • The Fabius Maximus website

    America slides to the right, faster. Why? What you can do about it!

    Link ›

  • Paul Krugman

    Choose Your Heterodoxy (Wonkish)

    Link ›

  • TIME

    New Airline Provides Only Nonstop Service

    Link ›

  • TIME

    Ford Recalls Nearly 400,000 Cars With Doors That Can Fly Open

    Link ›

  • Marc to Market

    USD: Range or Trend?

    Link ›

  • Marc to Market

    Greece and the Historical Record

    Link ›

  • Greg Mankiw's Blog

    The Case for Trade

    Click here to read my piece in Sunday's NY Times.

    Link ›

  • Greg Mankiw's Blog

    Congratulations, Roland

    Roland Fryer has won the John Bates Clark Award.  The past three winners have been Roland Fryer (Harvard faculty), Matthew Gentzkow (Harvard undergrad and PhD), and Raj Chetty (Harvard undergrad, PhD, and faculty)....more

    Link ›

  • The Fabius Maximus website

    Appeals to fear gain little support for the Left on climate change. What next?

    Link ›

  • John Quiggin

    The tragedy of Gallipoli

    100 years ago today, Australian and New Zealand forces landed at what is now Anzac Cove in the Gallipoli Peninsula, suffering heavy losses as they attempted to storm entrenched Turkish positions. Eight months later, having failed to dislodge the Turks, despite the loss of more than 10 000 killed and 20 000 wounded the Anzacs withdrew, managing to conceal the retreat and evacuate their positions with minimal casualties. This much, along with individual stories of heroism and suffering, is known to just about every Australian. But there are many important facts that are less well known, and many questions that are rarely asked Some facts * The ANZACs were only a small part of the forces on the Allied side. British, Irish and French troops also fought, suffering many more...more

    Link ›

  • VoxEU.org: Recent Articles

    Why risk is hard to measure

    Link ›

  • Econbrowser

    Foreign Reserve Accumulation Tails Off

    And actually decline, in dollar terms. Figure 1 displays total reserves and non-advanced country reserves, denominated in US dollars. Figure 1: Foreign exchange reserves, total (blue), and held by non-advanced countries (red), in trillions of USD. Source: IMF COFER. Note the drop in non-advanced country reserves in the last two quarters. The only drop of a comparable magnitude occurred during the aftermath of the global financial crisis. The rapid appreciation of the dollar makes the interpretation of dollar-valued reserves a bit more complicated than usual. In SDR terms, reserves have essentially plateaued. Figure 2: Foreign exchange reserves, total (blue), and held by non-advanced countries (red), in trillions of SDR. Source: IMF COFER. This is interesting because ...more

    Link ›

  • Worthwhile Canadian Initiative

    Ontario Budget Commentary

    Well, another Ontario budget has come and gone.  The government still plans to balance its budget by 2017.  According to the budget projections it will do this largely by increasing revenues and restricting expenditure growth.  Between 2014/15 and 2017/18, revenues are expected to grow from 118.5 to 134.4 billion dollars – an increase of  13.4 percent.  At the same time, expenditures (including the contingency reserve) are projected to rise from 129.5 to 134.4 billion dollars – an increase of 3.8 percent.  Nevertheless, the net debt will still rise from 284.1 to 319.5 billion dollars -an increase of 12.5 percent - while debt service costs will rise from 10.7 to 13.2 billion dollars – an increase of 23.4 percent.  Overall...more

    Link ›

  • Free exchange

    On the edge of Grexit, trade and scrip tease

    Link ›

  • VoxEU.org: Recent Articles

    Female executives and gender wage gaps

    Link ›

  • International Political Economy Zone

    Intervenzione: HK Monetary Authority Peg Defenders

    These are the days defending the HKD peg. All manner of currency pegs are being assaulted nowadays by speculators. A few days back we discussed the Danish krone coming under sustained assault but the authorities there successfully defending its link to the euro. But, here in Asia, there's another peg that some are betting will not withstand an attack: the Hong Kong dollar to the US dollar. Since 1983--a long time ago when Hong Kong was still a British colony--the monetary authority there pegged HKD 7.8 / USD 1. Having withstood the Asian financial crisis as other currencies in the region plummeted in value, Hong Kong has a well-deserved reputation for toughness in maintaining this peg.However, that doesn't mean the Hong Kong Monetary Authority (HKMA) is not challenged e...more

    Link ›

  • Econbrowser

    Currency Manipulation, the RMB and Misalignment, Yet Again

    In his criticism of the Trans Pacific Partnership, Senator Schumer discussed at length the need to counter currency manipulation, with particular reference to China. (See developments here.) This is an odd focus, given that China is not involved in the TPP. I’ll leave that point aside, and note that it’s not clear to me what constitutes currency manipulation. But we can revisit whether the Chinese currency, the RMB, is still undervalued. Kessler and Subramanian (2014) use a methodology similar to Cheung, Chinn and Fujii [1] [2] for a 2011 cross-country cross-sectional sample, and conclude using a linear specification that the RMB was about 10% undervalued. Source: Kessler and Subramanian (2014). This approach builds on the Penn effect — the fact th...more

    Link ›

  • Free exchange

    No longer the kiss of death

    Link ›

  • iMFdirect - The IMF Blog

    Spring Meetings Redux!

    Link ›

  • Worthwhile Canadian Initiative

    Deficit targeting vs Debt targeting

    Is a "balanced budget law", even a flexible law that allows temporary deficits (and surpluses) in appropriate circumstances, the right way to think about prudent sustainable fiscal policy? A financial asset is just a bit of paper with a promise written on it. A promise is a commitment about the future actions of the promiser, that is intended to influence the promisee's expectations of the promiser's future actions. If that promise is worthless, then the financial asset is worth what the paper itself is worth. The value of financial assets (almost) 100% about expectations (except for the paper itself). Monetary policy is about the promises made by the central bank that determine the value of the financial asset it issues (central bank money); fiscal po...more

    Link ›

  • The Skeptical Speculator

    Bonds overvalued but remain in demand

    CNBC reported that bonds are not well-liked by fund managers. A survey by Bank of America-Merrill Lynch found that a net 54 percent of fund managers remain underweight in bonds in April. A net 84 percent said bonds are overvalued, the highest in the survey's history. And yet, demand for bonds is expected to remain firm. JPMorgan has estimated that demand is likely to outstrip supply globally by around $450 billion this year on a notional basis, widening from $384 billion last year, with retail investors expected to be major contributors. Richard Jerram, chief economist at Bank of Singapore, said that "there is still globally a search for yield taking place". In addition, JPMorgan noted that equities have rallied even more than bonds in recent years, leaving retail inves...more

    Link ›

  • Free exchange

    The economy doesn’t matter

    Link ›

  • CIPE Development Blog

    How Multi-Stakeholder Platforms Help Build an Enabling Environment for Business

    “The work of development is too important to be left in the hands of governments alone. It is the responsibility of everyone. Especially the business community… Business, like governments, will have to be at the forefront of this change. No one can do it alone.” In the latest Economic Reform Feature Service article, CIPE partner and Chief Executive Officer of the Kenya Association of... ...more

    Link ›

  • International Political Economy Zone

    Cold War II, Really: EU Sues Gazprom for Antitrust

    Is it just me or is Schalke 04 having Gazprom as its sponsor similar to having an "I [HEART] SATAN'S WORKS" jersey? I had rolled my eyes over the hyperbole about the current freeze in Russia-Western relations being "Cold War II"--until now, that is. Activist EU regulators have long been accused of being busybodies: first with the Microsoft case (which resulted in much ado about nothing) and now, interestingly enough, Microsoft prodding the EU to do something about Google's dominance in cell phone operating systems via Android and its bundling of various apps. To me it's an open-and-shut case of Microsoft's OS being uncompetitive, but hey, I am not an EU competition regulator.Something I am fairly assured of is that Google will copy the Microsoft playbook in wearing...more

    Link ›

  • Worthwhile Canadian Initiative

    The Federal Deficit: A Long Term View

    In honour of the 2015 Federal Budget and the balancing of the budget, why not a retrospective on Canadian federal government deficits since 1867.  In the period from 1867 to 2014, the Federal government has run a deficit in 108 out of 148 years or 73 percent of the time. In nominal terms, the federal budget balance has ranged from a deficit of 55.598 billion dollars in 2009 to a surplus of 19.891 billion dollars in 2000. Perhaps a better indicator of the size of the budget balances over time would be in relation to national output - that is a deficit to GNP or GDP ratio. The accompanying figure plots an estimate of the federal deficit to national output ratio from 1870 to 2014 using budget data from Historical Statistics of Canada and the Federal Fiscal Reference...more

    Link ›

  • Econbrowser

    Trends in Poverty in Wisconsin

    Poverty, estimated using the official criteria and poverty threshold, or including taxes and non-cash benefits, rises in Wisconsin (while the officially reported Census measure declines in the US). [minor edits to clarify MDC 4/23] The invaluable Wisconsin Poverty Report, coauthored by my La Follette colleague Tim Smeeding, Julia Isaacs (Urban Institute & IRP) and Katherine A. Thornton (IRP) under the auspices of the Institute for Research on Poverty, has just been released. The key methodological innovation in the “Wisconsin Poverty Measure” is to calculate a taxes and non-cash benefits inclusive measure of poverty. Time series for the market income, official, and augmented measures are displayed in Figure 1. The * indicates that the change is statis...more

    Link ›

  • The Skeptical Speculator

    Should governments borrow more?

    Brad DeLong of the University of California at Berkeley suggested at the International Monetary Fund’s “Rethinking Macro” conference last week that rich countries should borrow more. From the WSJ blog: The interest rate that rich countries with super-safe debt ... pay is astonishingly low... In the U.S., the Treasury yield has gone from roughly equal to growth in nominal GDP in 2005 to 3 percentage points lower today. By Mr. DeLong’s reckoning, this means those countries are borrowing too little... Mr. DeLong asks, “Isn’t the point of the market economy to make things that are valuable?” Since the debt of rich countries is “very cheap to make… shouldn’t we be making more of it?” However, DeLong's suggestion could be problematic if future GDP gro...more

    Link ›

  • iMFdirect - The IMF Blog

    Tolstoy & Billionaires: Overheard at the IMF’s Spring Meetings

    Link ›

  • Greg Mankiw's Blog

    Why I favor estate tax repeal

    This past week, The House of Representatives passed repeal of the estate tax.  This is a policy change I have long supported, for reasons explained here.

    Link ›

  • iMFdirect - The IMF Blog

    Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean

    Link ›

  • CIPE Development Blog

    Libya or Tunisia: Who Needs the Other More?

    The Libyan conflict is not only causing tens of thousands of deaths, destroying a society, and wiping out a state. It also is spilling over into Tunisia, destabilizing its internal equilibrium, redefining cross-border interactions, and affecting all neighboring countries in the Maghreb. Continue reading → ...more

    Link ›

  • CIPE Development Blog

    Supporting Small Business in Ukraine

    More than a year after the EuroMaidan protests took the world by surprise, Ukraine’s political and economic struggles continue. Developments in the country since the new government came to power highlight the ongoing challenges of systemic overhaul following an exciting, rapid transition. These challenges clearly illustrate the link between democratic development and economic reform, so central... ...more

    Link ›

  • Dani Rodrik's weblog

    Turkish economic myths

    Preparing for a panel discussion on Turkey gave me the opportunity of putting together some notes and slides on the country’s economy. That Turkey is not doing well at the moment, economically or politically, is well known. But the roots of the problem remain misunderstood. Many analysts blame the weakening of “structural reforms” (on economics) and the turn towards authoritarianism after the Gezi protests in 2013 (on the politics). See for example here. In truth, Turkey’s problems on both fronts predate the recent slowdown in growth and have been long ingrained in the governing party’s (AKP) strategy. I have discussed the politics before at length. Here I focus on the economics. First, let’s dispense with some misconceptions about how well the Turkish econo...more

    Link ›

  • Alpha.Sources

    To Default or not to Default

    With apologies to Shakespeare.  {Dawn, Yannis Varoufakis is roaming the Akropolis}  To default or not to default, that is the question. Whether ’tis nobler in the mind to suffer The slings and arrows of outrageous demands Or to take arms against a legion of creditors And, by opposing, end them? To stay, to oppose— No more—and by opposing to say we end The heartache and the thousand cuts That the euro and debt is heir to—’tis a consummation Devoutly to be wished! To stay, to oppose. To oppose, perchance to extend—ay, there’s the rub, For in not paying what usury and strife may ensue When we have shuffled off this mortal coil Must give us pause. There’s the respect That makes calamity of the euro. ...more

    Link ›

  • Alpha.Sources

    QE and population ageing as macroeconomic externalities

    This discussion of market failures and externalities is mostly a microeconomic discussion. Students will tend to encounter it, in the context of the classic case of the polluting industrial company whose marginal private cost, or supply, curve is not the same as the marginal social cost curve. A firm which dumps toxic waste in a river does not bear the full cost of such actions; society also faces a costs even if this is not taken into account in the firm's profit maximization problem. The solution according to the welfare theorems is for the social planner, the government, to tax the company forcing the firm to produce at a lower output relative to what would have been optimal according to its own marginal revenue and marginal cost curves. Profit maximization on the fi...more

    Link ›

  • Dani Rodrik's weblog

    Premature deindustrialization in the developing world

    Mention “deindustrialization,” and the image that comes to mind is that of advanced economies making their way into the post-industrial phase of development. In a new paper,[1] I show that the more dramatic trend is one of deindustrialization in the developing countries. This is a trend that is appropriately called premature deindustrialization, since it means that many (if not most) developing nations are becoming service economies without having had a proper experience of industrialization. Latin America appears to be the worst hit region. But worryingly similar trends are very much in evidence in Sub-Saharan Africa too, where few countries had much industrialization to begin with. The only countries that seem to have escaped the curse of premature industrializati...more

    Link ›

  • Alpha.Sources

    Regulative Mission Creep?

    The financial sector has been regulated and fined into submission following the crisis, but the equity research team at Credit Suisse had a rebellious thought this weekend. In a piece extolling the virtues of dividend stocks, they postulate the following development: As bond yields fall to zero, duration matching for pension funds and insurance companies becomes nearly impossible and, consequently, we believe there will be significant pressure on regulators to allow higher equity weightings. On the global equity strategy team, we see a scenario where pension funds and insurance companies are allowed to hold a bigger share of their assets in high quality equities if bond yields remain around zero for a prolonged period. The definition of quality, in our view, is likely ...more

    Link ›

  • Smart Economy

    UPDATE on the Carbon[60] Hydrated Fullerenes-The Highest Antioxidant in the World

    Scientists  have made a  significant leap in cancer research. You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete. R. Buckminster Fuller 90% of all cancer deaths come from cancer spreading in the body from one organ to another, called metastasis. Stop metastasis, stop many unnecessary premature cancer deaths. Belgium researches in 2014 determined that cancer metastasis  can only occur if there are excess free radicals in the body. Specifically they conclude: “under certain conditions, the mitochondria produce more free radicals known as superoxide ions (O2.-). It is this overproduction of superoxide that leads to the formation of metastasis and, consequently, the growth of a tumor...more

    Link ›

  • Dani Rodrik's weblog

    Greek elections, democracy, political trilemma, and all that

    Two-and-a-half years ago I wrote a short piece titled "The End of the World as We Know It" which began like this: Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. German Chancellor Angela Merkel sticks to her guns and says that Greece must abide by the existing conditions. Fearing that a financial collapse is imminent, Greek depositors rush for the exit. This time, the European Central Bank refuses to come to the rescue and Greek banks are starved of cash. The Greek government institutes capital controls and is ultimately forced to issue drachmas in order to supply domestic liq...more

    Link ›

  • CYNICONOMICS

    2014 Most Viewed Posts

    We posted sporadically this year – with nothing at all after July – but added up our page views anyway. Here are the five most widely read posts, based on page views on CYNICONOMICS as well as three other sites that publish our articles and report our stats (Zero Hedge, Market Oracle and Seeking Alpha): #5 with 41,690 views: “Why You Shouldn’t Fall For These Corporate Capex Fallacies.” We critique four popular arguments about capital expenditures, while showing that history contradicts all but one of the four. #4 with 44,509 views: “Reviving the ‘Real World’ Scenario That’s Disappeared from Government Reports.” We adjust the CBO’s official budget projections for glaring deficiencies in its “baseline scenario,” from an overly optimistic economi...more

    Link ›

  • Rick Bookstaber

    Ex Ante versus Ex Post Social Policy

    I have written various posts on social policy related to the question of whether and how we redistribute income. One argument of equal opportunity and social egalitarianism is that it is fair to control for the randomness of life. For example, take the luck of the draw in who your parents are. If your best career choice was to be born into a wealthy family, if you got ahead because your father could pull strings to get you an internship at a big investment bank; because you built up your high school resume by spending a summer building houses in Tibet while a classmate had to spend the summer working at the 7-11; or because you could afford two years of one-on-one tutoring for the SAT, the result might be to score higher in an objective standard of selection and have a ...more

    Link ›

  • Rick Bookstaber

    On Death with Dignity

    We take the will to live as a positive attribute, and naturally so; it is, of course in our genes.  Whatever subset of our species took a lackadaisical view toward the prospect of death was screened out long ago. We look with admiration on those who battle against terminal illness --  “She’s a real fighter” -- and look down on those who take their own lives. Fighting for your life is the genetic prime directive.   Thus the recent death of Brittany Maynard spurred a flurry of news articles and posts on the Death with Dignity movement. There will be a lot more to come on this topic, and the movement will gather steam because whatever is in the crosshairs of the baby boomers weighs down on society as a whole. Soon the baby boomers will come to the...more

    Link ›

  • Rick Bookstaber

    Uber: What could possibly go wrong

    Uber at the core is nothing more than a bunch of guys who came up with a clever app for streamlining the way you call for a car.  Rather than phoning or texting, you tap on the app.  Rather than paying with cash or credit cards, you have an account.  And rather than depending on the reputation of the car company, you depend on the ratings-based reputation of the specific driver. (Another feature, the pre-determined fare, with that fare essentially including all fees including tip, is nothing new for car services). And, by the way, it is readily replicable by any other car services, including those that already have a reputation and experienced drivers.  So it seems to me that it is only mildly innovative.  How do you build a successful world-wid...more

    Link ›

  • Institutional Economics

    Capital Gains Tax Reform in Canada: Lessons from Abroad

    The Fraser Institute has released a new volume on international experience with capital gains taxes. I wrote the chapter on New Zealand, with some reference to Australia. Australia was deemed too similar to Canada to warrant a chapter in its own right....more

    Link ›

  • The Street Light

    Transfer Pricing Economics

    I'd like to announce that after a long hiatus from blogging, I'm taking it up again in a new forum.  The new blog, Transfer Pricing Economics, is primarily devoted to exploring my particular area of professional specialty, namely "transfer pricing".  If that term doesn't mean anything to you, then feel free to check out my brief explanation of transfer pricing. My aim is to expose and analyze the connections between the arcane world of transfer pricing and broader developments in the economic and financial world. And the connections are significant: the rules and economic logic of transfer pricing have a direct impact on trillions of dollars of international trade every year. So please feel free to check in on and contribute to the discussions about these...more

    Link ›

  • Smart Economy

    Belgian Researchers Discover Way to Block Cancer Metastasis

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

    Link ›

  • Smart Economy

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

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

    Link ›

  • Institutional Economics

    I am leaving CIS and returning to financial markets

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

    Link ›

  • Institutional Economics

    Wayne Swan on Monetary Offset and the GFC

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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • The Becker-Posner Blog

    Farewell

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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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.

    Link ›

  • 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

    Link ›

  • Stefan Karlsson's blog

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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

    Link ›

  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›

  • 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

    Link ›


Most Read | Featured | Popular

Blogger Spotlight

Aaron Menenberg Policies of Scale

Aaron Menenberg is Foreign Policy and Energy analyst, and a Future Leader with Foreign Policy Initiative. He also co-hosts Podlitical Risk (@podliticalrisk). He is a graduate student in international relations at The Maxwell School of Syracuse University. Previously he has worked at Praescient Analytics, The Hudson Institute, for the Israeli Ministry of Defense, and at the IBM Corporation. The views expressed are his own, and you can follow him on Twitter @AaronMenenberg. He welcomes questions and comments at menenbergaaron@gmail.com.