EconoMonitor

Economics Blog Aggregator

    Global Macro

  • The Big Picture

    The Pay at the Top

    From the New York Times: Here are 100 of the highest-paid chief executives in American business. The list comes from the Equilar 100 C.E.O. Pay Study for 2013, which ranks the compensation of chief executives of the 100 largest publicly traded United States companies, based on revenue, that filed proxies by April 4. Click for an interactive chart. Source: NY Times ...more

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  • Marginal REVOLUTION

    Clive Crook reviews Piketty

    Here is his bottom line and it is correct: Over the course of history, capital accumulation has yielded growth in living standards that people in earlier centuries could not have imagined, let alone predicted — and it wasn’t just the owners of capital who benefited. Future capital accumulation may or may not increase the capital share of output; it may or may not widen inequality. If it does, that’s a bad thing, and governments should act. But even if it does, it won’t matter as much as whether and how quickly wages and living standards rise. That is, or ought to be, the defining issue of our era, and it’s one on which “Capital in the 21st Century” has almost nothing to say. The full review is here. ...more

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  • Fabius Maximus

    The Ukriaine anti-semitic flyer: a case study in propaganda

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  • International Political Economy Zone

    NSA Spying: A Visual Guide

    I likened the NSA to East Germany's notorious secret police the Stasi via a job placement for electro-spooks a few moons ago. Data privacy is very much a hot topic in IPE as to the appropriateness of government spying. The American debate concerns citizens' rights to privacy and their willingness to abrogate them because of purported "security" concerns over terrorism and the like. While I am sure Americans don't particularly care about their spooks spying on foreigners, the issue is even more complicated at the international level. That is, does the American government's utter indifference to privacy concerns when spying on other countries' residents raise global governance concerns?There are thus two big issues in this respect. First, should the current US-centric arc...more

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  • Greg Mankiw's Blog

    Transitory Income and the One Percent

    From today's NY Times:Thomas A. Hirschl of Cornell and I [Mark Rank of Wash U] looked at 44 years of longitudinal data regarding individuals from ages 25 to 60 to see what percentage of the American population would experience these different levels of affluence during their lives. The results were striking. It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.... It is clear that the image of a static 1 and 99 perc...more

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  • Cafe Hayek - Article Feed

    A Question

    (Don Boudreaux) Suppose that Jones stumbles upon the idea of pickling cucumbers.  It has never before been done.  Jones’s pickle company is spectacularly successful.  He soon invests $10 billion in a firm – land, factories, delivery trucks, worker training, brand-name development, the whole shebang.  At first Jones sees his investment pay handsome returns.  But Jones produces only one size pickle (large), one cut (whole), and one flavor (dill).  A few years later Smith decides to try his luck at selling pickles.  Smith invests a mere $6 billion and produces more varieties, cuts, and flavors.  Smith’s Pickle Co. is so successful that Jones’s firm goes bankrupt.  All but the scrap value of Jones’s firm is destroyed by Smith’s c...more

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  • This Is Brad DeLong's Grasping Reality...

    Liveblogging World War II: April 20, 1944: The Total Destruction of the SS Paul Hamilton

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  • Economist's View

    'Treat Wage Theft as a Criminal Offense'

    This was in yesterday's links, but it's worth highlighting: Treat wage theft as a criminal offense, by Catherine Rampell, Washington Post: Forget raising the minimum wage. How about enforcing the meager minimum already on the books? Over the past year, low-wage workers and their supporters have protested, struck and polemicized for a raise of some kind, a proposition that has support from the White House and most Americans, if not Republican politicians. But low-wage workers face an even more upsetting affliction that both parties should feel comfortable condemning: Employers are stealing from their employees, often with impunity. “Wage theft” is an old problem. It can take many forms, including paying less than the minimum hourly wage, working employe...more

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  • Marc to Market

    Currency Positioning and Technical Outlook: Ranges Persist, though Sterling is Exceptional

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  • Cafe Hayek - Article Feed

    Competition, Rent-Seeking, and High-Frequency Trading

    (Don Boudreaux) Warning: Wonky Below the fold are yet further, very wonky reflections on Steve Landsburg’s claim that private investments by high-frequency traders to shave milliseconds off of the time required for price information to be transmitted from point A to point B are socially wasteful.  My argument – first advanced here – is that Steve has no good basis for his claim. One appropriate way to test claims that X market activity is socially harmful is to muster coherent arguments and empirical details that are specific to X in order to determine if these arguments and facts indeed persuade one of the proposition that X is socially harmful or reveal that, in fact, X is not socially harmful.  Such an approach can take many forms.  For exam...more

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  • Marginal REVOLUTION

    Shanghai bleg

    Other than the obvious things I would see in a guidebook, what should I do and where should I eat?  I thank you all in advance for your assistance.

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  • Paul Krugman

    Further Notes on Sweden

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  • Marginal REVOLUTION

    Assorted links

    1. Do you beam with pride or get upset at this article about young, rich philanthropists being courted by the White House? 2. Profile of Thomas Piketty. 3. As a kid I enjoyed Dodgeball.  I still remember me and Jimmy Wainwright being the last two guys on the floor.  (Sadly, Jimmy caught my rather unconvincing fifth grade toss.)   This article calls it “America’s most demonized sport,” but they don’t seem to have heard of the game we used to call “Kill the guy with the ball.” 4. CDs vs. vinyl, I say CDs have higher average quality but vinyl has higher peaks for the very best classical music. 5. Why do economics majors earn so much?  And economics humor. 6. Are babies a performance-enhancing drug? ...more

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  • TIME » Sections » Business

    General Mills Reverses Legal Terms After Controversy

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  • Marc to Market

    The Week Ahead

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  • Econbrowser

    Impressions of Russia

    My wife and I spent last week in Russia, giving some lectures at the New Economic School and the International College of Economics and Finance and touring Moscow and Saint Petersburg. Here are some of the things I saw that surprised me. Moscow may have the world’s best subway system. You can get anywhere in the sprawling city very quickly, and if you miss the train, another will be along in just a few minutes. I don’t recommend it during rush hour, but it provides the average resident with cheaper and more effective transportation than can be found in other cities I have visited. On most U.S. subways, you will see signs or hear recorded announcements declaring that solicitation is strictly prohibited, but nonetheless will frequently find yourself asked ...more

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  • TIME » Sections » Business

    10 Cities Where Americans Are Pretty Much Terrified to Live

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  • TIME » Sections » Business

    Take a Look at Jane Austen, Roald Dahl, and Albert Einstein’s Stunning Business Cards

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  • International Political Economy Zone

    Bhutan's Gross National Happiness & Money-Grubbing

    Everybody Wangchuck [L] Tonight and Meet the Jetsun [R]. Us Asians are routinely amused by Westerners buying our dear neighbor Bhutan's schtick hook, line and sinker. You see, Bhutan is famous the world over for measuring "gross national happiness" instead of the materialistic, output-oriented measures us unenlightened folks use like GDP and GNP. King Jigme Khesar Namgyel Wangchuck is certainly not averse to playing along. Especially among self-styled "progressives" this is taken as evidence for their enlightened stance in the place of mammon-worship common to the rest of us.Take, for instance, this travelogue from Canada's Globe and Mail:I was in the Kingdom of Bhutan, a small, mountainous country sandwiched between the giants of India and China. Protected all around b...more

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  • Beat the Press

    Washington Post Runs Major Story Highlighting that Less Than 0.01 Percent of Medicaid Expenditures in Illinois Were for Dead People

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  • The Big Picture

    What Goes Up, Must Come Down?

    >   My Sunday Washington Post Business Section column is out. This morning, we look at What’s gone up won’t always come down. The print version had the headline You might think the markets are ready for a breather after last year’s gains, but . . . Here’s an excerpt from the column: “You might think that after such a strong year, the markets might be due to “take a breather.” Perhaps a flat year is in order so last year’s gains can be “digested” — or so goes the popular assumption. And indeed, markets this year have ranged from flat to down a few percent. Some would go further and, because of the “Gambler’s Fallacy,” assume that markets are bound to go the other way and sell off. Those assumptions would be wrong. The data st...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 96 of F. A. Hayek’s 1948 collection, Individualism and Economic Order; specifically, it’s from Hayek’s important 1946 article “The Meaning of Competition“: The peculiar nature of the assumptions from which the theory of competitive equilibrium starts stands out very clearly if we ask which of the activities that are commonly designated by the verb “to compete” would still be possible if those conditions were all satisfied.  Perhaps it is worth recalling that, according to Dr. Johnson, competition is “the action of endeavouring to gain what another endeavours to gain at the same time.”  Now, how many of the devices adopted in ordinary life to that end would still be open to a seller in a marke...more

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  • The Big Picture

    10 Sunday AM Reads

    Kick your feet up and relax a moment with these reads: • Don’t let market pundits lead you astray (MarketWatch) • Top hedge funds are taking a hit on the tech downturn. (WSJ) • Rogoff talks financial crisis (Yale Daily News) • The Rise and Fall of Gold (QuickTake) • Mutual funds are bypassing IPOs and going straight for the main course (Quartz) • Now is the time to rebuild our national infrastructure (Boston Globe) • Seasoned home buyers approach purchasing process much differently, survey shows (WSJ) • The complete guide to structuring your ideal work day (Quartz) • The Many Deceptions at the Heart of the Internet (New Yorker) • Why Yahoo’s Not Going To Steal The Search Default For iPhone Away From Google (Search Engine Land) He...more

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  • naked capitalism

    Links 4/20/14

    Scientists Successfully Teach Monkey Theory of Evolution Daily Currant Attendance dropping at aquatic theme parks over claims of abuse and suffering Observer Jackson Hole landslide slowly swallows Wyoming town Christian Science Monitor Genetic testing a cracked crystal ball Nikkei U.S.-Japan Talks Said Unable to Overcome Deal Obstacles Bloomberg. As we predicted. A year after Rana Plaza: What hasn’t changed since the Bangladesh factory collapse Washington Post Mount Everest avalanche leaves at least 12 Nepalese climbers dead Guardian The Risks of Everest Are Deadlier for Some New York Times Deflation in Sweden: Questions and answers Lars E.O. Svensson (MacroDigest) UN envoy and Israel in Easter row BBC Iran slams U.S. justice verdict on Manhattan skyscraper Reuters....more

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  • Beat the Press

    Patents Are Not the Only Way to Finance Research

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  • Beat the Press

    The Number of People Helped by Obamacare is Far Larger Than the NYT Says

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  • International Political Economy Zone

    TPP Hara-kiri: Will Japan Kill Off This Trade Pact?

    Hara-kiri is defined as "ritual suicide by disembowelment." Two years ago, I described Japan joining negotiations to enlarge the existing TPP membership as a non-starter mainly because of Japan's  strong agricultural lobbies blocking off any sort of liberalization of sensitive crops--especially rice. There too remains the quite frankly idiotic complaint Americans have that the Japanese car market is "protected" since they have time and again failed to sell their oversized, gas-guzzling, left-hand drive cars that are unsuitable for sale in Japan. Yet, for obvious reasons, the US has been keen on Japan joining since it's the world's third largest economy and would in theory induce "bandwagoning" effects wherein others will feel they cannot be left behind and join as ...more

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  • John Quiggin

    Another one (or more) bites the dust …

    Coming back yet again to nuclear power, I’ve been arguing for a while that nuclear power can only work (if at all) on the basis of a single standardised design, and that the only plausible candidate for this is the Westinghouse AP1000. One response from nuclear enthusiasts has been to point to possible future advances beyond the Gen III+ approach embodied by the AP1000 (and less promising competitors like EPR). The two most popular have been Small Modular Reactors and Generation IV (fast) reactors. Recent news suggests that both of these options are now dead. The news on the Small Modular Reactor is that Babcock and Wilcox, the first firm to be selected by the US Department of Energy to develop a prototype, has effectively mothballed the project, sacking the CEO o...more

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  • Economist's View

    Links for 4-20-14

    Obamacare Versus The Wusses - Paul Krugman Not a summary of economics - Noahpinion Misunderstanding macroeconomic models - mainly macro Is Subprime Mortgage Credit Back? - House of Debt My Head Talks Piketty With Bill Moyers - Paul Krugman Creeping Deflation and Secular Stagnation Edition - Hale Stewart When Diamonds Are Dirt Cheap, Will They Still Dazzle? - Robert Frank European Debt Deflation - Paul Krugman ...more

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  • naked capitalism

    Abigail Field: Our Corrupt Tax Code

    By Abigail Caplovitz Field, an attorney and a freelance writer. She writes news for Benzinga.com and others, and posts a new blog every Sunday morning at Reality Check. Jointly posted with Reality Check Our nation’s tax code reflects our corrupt politics. The code contains many provisions that benefit our wealthiest, most powerful companies and people while hurting the rest of us. (“Our” most powerful people in the sense that they claim to be American, regardless of how transnational and unpatriotic they behave.) For Benzinga, I did a set of stories on some of the visible corruption in the code. Like the “carried interest” provision. That’s the income naming rights deal purchased by private equity, hedge funds and other extremely weal...more

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  • naked capitalism

    Paul Krugman Discusses Piketty’s Capital and the Rise of Inherited Wealth on Bill Moyers

    Paul Krugman discusses Thomas Piketty’s new book, Capital in the Twenty-First Century, on Bill Moyers’ show. Those who follow the economic press will know that Piketty and Emanuel Saez have been following and writing about the growing disparity in wealth and income since the early 2000s. This interview focuses on a major finding of Piketty’s book, that the very richest aren’t, as most people like to believe, self-made, say, Bill Gates, Warren Buffett, Steve Jobs, Larry Ellison, or a hedge fund or private equity manager like George Soros, Leon Black, or James Simons. Ironically, CEOs are typically included in the “self made” which is more accurately “first generation uber-wealthy” camp, when they become stewards of establis...more

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  • This Is Brad DeLong's Grasping Reality...

    Noted for Your Evening Procrastination for April 19, 2014

    Over at Equitable Growth--The Equitablog Washington Equitable Center for Growth | Paul Krugman and Jonathan Chait Are Spending This Morning Worrying About Whether a Technocratic Dialogue Is Even Possible Today: Friday Focus: April 18, 2014 Washington Equitable Center for Growth | Evening Must-Watch: Mark Thoma and Steve Williamson: The Federal Reserve's Monetary Policy Decisions since the Ending of the Great Recession in 2009 Washington Equitable Center for Growth | Afternoon Must Read: Lars E.O. Svensson: Ingen Kunde ha Förutsagt...: Swedish Deflation Edition Washington Equitable Center for Growth | Evening Must-Read: Jonathan Chait: Obama Declares Obamacare Victory Plus: Washington Equitable Center for Growth | Things to Read on the Evening of April 19, 2014 ...more

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  • VoxEU.org: Recent Articles

    Towards measuring research supervision quality

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  • John Quiggin

    The end of manufacturing in Australia

    Ross Gittins has a piece, drawing on research by Jeff Borland of the University of Melbourne, in which he presents a “glass half-full” view of the Australian manufacturing sector. He makes some good points, but the overall picture is misleading. It’s true that, on standard statistical definitions of the manufacturing sector, there’s still a fair bit of employment and output, though both have declined in recent years and will almost certainly continue to do so, given the recent closure announcements. But what’s left of manufacturing looks very different from the mental image the word ‘manufacturing’ produces, at least for me: a large factory, with hundreds of manual workers producing complex industrial products (consumer goods, m...more

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  • This Is Brad DeLong's Grasping Reality...

    Liveblogging World War II: April 19, 2014: American Refit of French Battleship Richelieu

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  • Marc to Market

    Cool Video: Boosting Our Productivity

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  • Paul Krugman

    Obamacare Versus The Wusses

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  • Paul Krugman

    My Head Talks Piketty With Bill Moyers

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  • Economist's View

    The Near Future

    Dan Little: The near future: There is a lot going on in America and the world today: climate change, increasing separation between the rich and the non-rich, entrenched poverty in cities, continuing effects of racism in American life, and a rising level of political extremism in this country and elsewhere, for starters. Add to this politico-military instability in Europe, continuing social conflict over austerity in many countries, and a rising number of extreme-right movements in a number of countries, and you have a pretty grim set of indications of what tomorrow may look like for our children and grandchildren. How should we think about what our country will look like in twenty or thirty years? And how can we find ways of acting today that make the prospects for tom...more

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  • Worthwhile Canadian Initiative

    Exchange Rates and Gasoline Prices?

    Well the price of gasoline just spiked upwards across Canada and the usual media analysis has begun.  Five key reasons were summarized as follows by Shawn McCarthy in the Globe and Mail: 1) Approach of the summer driving season leading to a switch to summer gas formulations which leads to a reduction in supply. 2) Higher crude prices. 3) A lower Canadian dollar. 4) Lack of retail competition in Canada and 5) U.S. exports of gasoline and diesel out of North America creating tighter demand and supply conditions. I thought explanation number three was rather intriguing. According to explanation number three, since the dollar is off about 10 percent against the U.S. dollar and since crude prices are set in U.S. dollars, it means that Canadian refiners are paying more...more

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  • John Quiggin

    Tu quoque

    I’ve written many posts and articles making the point that the political right, in most English speaking countries[1] has been taken over by a tribalist post-truth politics in which all propositions, including the conclusions of scientific research, are assessed in terms of their consistency or otherwise with tribal prejudices and shibboleths. Very occasionally, intellectuals affiliated with the political right (conservatives and libertarians) will seek to deny this, arguing that isolated instances are being blown out of proportion, and that the right as a whole is committed to reasoned, fact-based argument and acceptance of “inconvenient truths’ arising from the conclusions of scientific research[2], [3]. But, far more often their response takes the f...more

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  • VoxEU.org: Recent Articles

    Wages, productivity, and employment in Italy

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  • CIPE Development Blog

    Singapore, Democracy, and Economic Development

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  • The Skeptical Speculator

    Japanese consumer confidence falls, economic assessment lowered

    Japan has been hit by bad news for its economy. On Thursday, the Cabinet Office reported that its consumer confidence index fell to 37.5 in March, the lowest level since August 2011, from 38.5 in February. On the same day, the government cut its assessment of the economy in April, the first lowering since November 2012. On Friday, the Ministry of Economy, Trade and Industry reported that its tertiary industry index fell 1.0 percent in February, more than reversing the 0.9 percent increase in January....more

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  • Econbrowser

    “The Oxford Handbook of the Economics of the Pacific Rim”

    That’s a new volume out from Oxford University Press, co-edited by Inderjit Kaur and Nirvikar Singh. The contributors are all prominent scholars in the field of Pacific Rim economics. Several are familiar Econbrowser guest contributors, or highlighted in posts (noted below). The book is described at further length here. The table of contents: PART I. THE NATURAL WORLD: HISTORY, CLIMATE, AND RISKS 1. The History of Biological Exploitation on the Pacific Rim, Eric Jones 2. Climate Risk and Response in the Pacific Rim, David Roland-Holst 3. Natural Disasters and Economic Policy for the Pacific Rim, Ilan Noy [post on disasters] PART II. PEOPLE: MIGRATION, DEMOGRAPHICS AND HUMAN CAPITAL 4. International Labor Migration in the Pacific Rim, Philip Martin 5. Age Composi...more

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  • Fabius Maximus

    Watch corporations strip-mine their future (and ours)

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  • VoxEU.org: Recent Articles

    Has US household deleveraging ended?

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  • CIPE Development Blog

    The Energy Source of the Future

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  • Free exchange

    Reading "Capital": Chapters 10, 11, and 12

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  • Worthwhile Canadian Initiative

    Monetary monarchy

    Speculative musings, from an inadequate historical background. We tend to take it for granted that the world looks like this, from a monetary perspective: The world is divided into currency areas. Each currency area has one alpha bank (the king). All the other banks are beta banks (subjects, who follow the king). The beta banks promise to redeem their money for alpha bank money at a fixed exchange rate. The alpha bank makes no such promise the other way. Asymmetric redeemability. The alpha bank is the leader, who decides on monetary policy for the whole currency area. The beta banks just follow along, because they fix their exchange rates to the alpha bank. The world is divided into monetary monarchies. There may be sub-monarchs, who play alpha to the beta banks within...more

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  • The Skeptical Speculator

    US stocks rise for third day on positive economic data, China's economy slows

    US stocks rose on Wednesday, with the S&P 500 rising 1.1 percent to cap its best three-day rally in two months. The higher stock prices were supported by economic reports on Wednesday. The Federal Reserve's latest Beige Book released on Wednesday reported that the US economy continued to expand recently. Other US economic data on Wednesday supported that view. Factory production rose 0.5 percent in March, helping to push total industrial production up 0.7 percent. Housing starts rose 2.8 percent in March but building permits fell 2.4 percent. Earlier on Wednesday, China reported that its economy grew 7.4 percent in the first quarter from the previous year, down from 7.7 percent in the fourth quarter. However, March data showed that industrial production rose 8.8 percent...more

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  • Smart Economy

    Stanford scientists develop 'playbook' for reverse engineering tissue

        STANFORD, Calif. — Consider the marvel of the embryo. It begins as a glob of identical cells that change shape and function as they multiply to become the cells of our lungs, muscles, nerves and all the other specialized tissues of the body. Now, in a feat of reverse tissue engineering, Stanford University researchers have begun to unravel the complex genetic coding that allows embryonic cells to proliferate and transform into all of the specialized cells that perform myriad biological tasks. A team of interdisciplinary researchers took lung cells from the embryos of mice, choosing samples at different points in the development cycle. Using the new technique of single-cell genomic analysis, they recorded what genes were active in each cell at each point. Though...more

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  • CIPE Development Blog

    Democracy and Economic Freedom in Venezuela

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  • Fabius Maximus

    Should we listen to amateurs’ analysis of climate science?

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  • iMFdirect - The IMF Blog

    The Future of the State Revisited: Reforming Public Expenditure

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  • Free exchange

    The spectre haunting San Francisco

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  • Greg Mankiw's Blog

    Sometimes it's better to split the baby

    This story about the Census Bureau is amazing to me: The Census is changing its annual survey about health insurance.  As a result, the new data will not be comparable to the old, making it much harder to gauge the effects of the Affordable Care Act.Is this a White House conspiracy to hide the effects of the law, as some have suggested?  Maybe, but probably not. I have a lot of respect for the government data producers, so I am giving them the benefit of the doubt.Yet I don't see why the Bureau needs to make such a sudden change.  Why not, for a few years, give half the sample the old questionnaire and half the new one?  This procedure would provide a basis for eventually splicing together the old and new time series....more

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  • The Skeptical Speculator

    Stocks rise for second day in US, fall in Europe and China

    US stocks rose for a second consecutive day on Tuesday, the S&P 500 gaining 0.7 percent after climbing 0.8 percent on Monday. The gain on Monday had been accompanied by a positive economic report in the form of a 1.1 percent rise in US retail sales. The gain on Tuesday was accompanied by somewhat more mixed economic data. The consumer price index rose 0.2 percent in March, up from 0.1 percent in February, suggesting a possible end to the disinflationary trend. However, the NAHB/Wells Fargo housing market index rose only a point to 47 in April while the New York Federal Reserve's Empire State general business conditions index fell to a five-month low of 1.29 in April from 5.61 in March. European stocks fell on Tuesday, the STOXX Europe 600 falling 1.0 percent and erasing...more

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  • Felix Salmon

    The problems of HFT, Joe Stiglitz edition

    Never mind Michael Lewis. The most interesting and provocative thing to be written of late about financial innovation in general, and high-frequency trading in particular, comes from Joe Stiglitz. The Nobel prize-winning economist delivered a wonderful and fascinating speech at the Atlanta Fed’s 2014 Financial Markets Conference today; here’s a shorter version of what Stiglitz is saying. Markets can be — and usually are — too active, and too volatile. This is an idea which goes back to Keynes, if not earlier. Stiglitz says that in the specific area of international capital flows, “there is now a broad consensus that unfettered markets are welfare decreasing” — and certainly you won’t get much argument on that front from, say, Iceland, or Malaysia, or eve...more

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  • Greg Mankiw's Blog

    The most fun event the Harvard economics department has sponsored since Kuznets did his song and dance number in drag

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  • Econbrowser

    ACA Insurance Coverage Cost Update from CBO

    Estimated insurance coverage costs revised downward. From the CBO, Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April 2014: Figure 3 from CBO, Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April 2014. Relative to their previous projections, CBO and JCT now estimate that the ACA’s coverage provisions will result in lower net costs to the federal government: The agencies now project a net cost of $36 billion for 2014, $5 billion less than the previous projection for the year; and $1,383 billion for the 2015–2024 period, $104 billion less than the previous projection. The estimated net costs for 2014 stem almost entirely from spending for subsidies that are to be...more

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  • Free exchange

    This is not a game theory

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  • iMFdirect - The IMF Blog

    Socrates & the Pope: Overheard at the IMF’s Spring Meetings

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  • Felix Salmon

    Private equity math, Nuveen edition

    The WSJ has the details of today’s big asset-management news: TIAA-CREF is buying Nuveen Investments for $6.25 billion. The sale marks the end of an ill-fated acquisition by private equity shop Madison Dearborn in 2007, just before everything fell apart. Madison Dearborn paid a total of $5.75 billion for Nuveen — a premium of 20% to its market value. As the WSJ says, the buyers used $2.7 billion of their own money to pay for Nuveen, and then borrowed the other $3.05 billion. But then things got tough: Within a year, Nuveen’s borrowing costs had risen as the financial crisis set in. The company eventually refinanced most of its buyout debt, which now stands at $4.5 billion and will be absorbed by TIAA-CREF. With the TIAA-CREF deal, Madison Dearborn will have at...more

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  • Alpha.Sources

    Changing correlations

    I am currently moving my life 300 miles north which entails more headbanging over missing internet, tv and other amenities in my new flat, IKEA flatpacks rather than looking at the market. One of the tidbits that did register last week however was Draghi's comments at the IMF that the euro is now starting to become a problem.  It is clear that the ECB is priming the market here for something. Although I am quite sure that this "something" will be underwhelming. One thing though that needs to be watched is the catalyst, in my view, for this recent jawboning by the ECB. Basically, the fact that the recent risk-off coincided with USD weakness has spooked the lords of finance in Frankfurt. A strong euro in conjunction with a stronger economy/higher assets is ok. But a ...more

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  • iMFdirect - The IMF Blog

    Europe’s Economic Outlook

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  • Felix Salmon

    Five explanations for Greece’s bond yield

    The biggest news in the sovereign debt world this week has come from Greece, which managed to sell some €3 billion in new 5-year bonds at a yield of just 4.95%. This is not what you might expect, given the macroeconomic situation: Greece’s debt currently stands at about 320 billion euros, or 175 percent of GDP. It is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-. So, how does one explain investors’ appetite to buy this debt at such low yields? Here are the top five reasons: 1. This is just part of a momentum trade. The Greece trade has been astonishingly lucrative for the past two years. Here’s the chart, from the WSJ: You could have bough...more

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  • Worthwhile Canadian Initiative

    On forgetting land in models of secular stagnation

    If I see one more model of secular stagnation and negative equilibrium real interest rates, that does not include land....I'm going to throw a real wobbly. What is it with you townies? Have you never looked out of the window, when you fly (do you ever drive?) from one city to another, and wondered about all that stuff you see out there? It's called "land". It grows food, that you eat. And that land is valuable stuff, and there's a lot of it, and it can last a very long time, and it pays rent (or owner-equivalent rent). And if the rent on that land is strictly positive (which it is), and if the price of that land is finite (which it is), then the rate of interest you get by dividing that annual rent on land by the price of land is going to be strict...more

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  • Institutional Economics

    ECB to Adopt QE in H2 2014

    I have an op-ed in Business Spectator arguing that the ECB will likely resort to QE in the second half of this year. This will be a vindication of the long-standing criticisms of ECB monetary policy made by the new market monetarists. Inflation outcomes, nominal GDP and the euro exchange rate are all consistent with monetary policy having been too tight rather than too easy. The emerging divergence between ECB/BoJ and Fed monetary policy should set the stage for broad-based USD outperformance....more

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  • Alpha.Sources

    The lower bound of central bank effectiveness

    I have a bit of time on my hands at the moment to read stuff that I otherwise wouldn't have time to read. For example I am currently reading Michael Lewis' new book Flash Boys about the ins and outs of high frequency trading. I will probably have more to say about that one in a few weeks, but for now I want to point to this recent BIS speech by former BOJ governor Masaaki Shirakawa.  I recommend you to read it in its entirety, it is worth the effort. Two points in particular are worth highlighting. Firstly, Shirakawa provides a non-consensus yet apt narrative on the interaction between central bank's noble quest for price stability and the formation of asset bubbles. Drawing on the experienced of relative price stability that prevailed in Japan in the late 1980s an...more

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  • CYNICONOMICS

    Bulls vs. Bears: Some Profit Margin Stories Are Better Than Others

    [M]argins have been rising smartly–faster than Greenspan can ever recall. His only explanation: productivity… Greenspan argues that the U.S. is undergoing a productivity revolution not seen since early this century… In the longer term, he’s betting that as the world moves into the 21st century and the New Economy takes root, more of the old economic rules will fall apart. - From “Alan Greenspan’s Brave New World,” Business Week, July 13, 1997 I caught up recently on a debate about S&P 500 valuation involving GMO, Hussman Funds and their assorted critics (see here or here, for example). As you may know, GMO and Hussman take the position that stocks are expensive, citing a variety of indicators and arguing that profit margins should “mean rever...more

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  • Institutional Economics

    Do Financial Markets Care About the G20?

    An ECB Working Paper looks at the impact of G20 meetings on financial markets: In this paper we run an event study to test whether G20 meetings at ministerial and Leaders level have had an impact on global financial markets. We focus on the period from 2007 to 2013, looking at equity returns, bond yields and measures of market risk such as implied volatility, skewness and kurtosis. Our main finding is that G20 summits have not had a strong, consistent and durable effect on any of the markets that we consider, suggesting that the information and decision content of G20 summits is of limited relevance for market participants. That won’t stop the Australian federal government spending $500 million on a process markets have deemed an irrelevance....more

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  • Smart Economy

    Does a junk food diet make you lazy? UCLA psychology study offers answer

        A new UCLA psychology study provides evidence that being overweight makes people tired and sedentary — not the other way around.  Life scientists led by UCLA's Aaron Blaisdell placed 32 female rats on one of two diets for six months. The first, a standard rat's diet, consisted of relatively unprocessed foods like ground corn and fish meal. The ingredients in the second were highly processed, of lower quality and included substantially more sugar — a proxy for a junk food diet.  After just three months, the researchers observed a significant difference in the amount of weight the rats had gained, with the 16 on the junk food diet having become noticeably fatter.        "One diet led to obesity, the other didn't," said Blaisdell, a professor of psychol...more

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  • Alpha.Sources

    Over and out for Forward Guidance

    I'll try anything once, twice if I like it, three times to make sure." So said Mae West, the late American actress and entertainer, whose upbeat line is often used to denote a positive and openminded approach to life.  Yet, just because you try it once does not mean that you have to like it. For example, I recently travelled from London to New York only to stay for 18 hours. Spending 12 hours in airplane over the course of a full day is decidedly not something I intend to do again if I can help it.  I wonder whether Yellen would heed Mrs West's dictum in the context of trying to define what "a considerable time" really means or perhaps when it comes to putting a number on the elusive NAIRU? Unfortunately for Yellen she does not, unlike me, have to luxury of on...more

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  • Smart Economy

    Gene may predict if further cancer treatments are needed

                   IMAGE:   This is a photo of Dr. Jerry Shay, University of Texas Southwestern Medical Center. Click here for more information.      DALLAS – March 28, 2014 – UT Southwestern Medical Center researchers are developing a new predictive tool that could help patients with breast cancer and certain lung cancers decide whether follow-up treatments are likely to help. Dr. Jerry Shay, Vice Chairman and Professor of Cell Biology at UT Southwestern, led a three-year study on the effects of irradiation in a lung cancer-susceptible mouse model. When his team looked at gene expression changes in the mice, then applied them to humans with early stage cancer, the results revealed a breakdown of which patients have a h...more

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  • Dani Rodrik's weblog

    Higher food prices are good for the poor ... in the long run

    Guest post by Derek Headey A few years ago Dani very kindly let me guestblog on some of my work on the global food crisis (see here and also Dani’s much earlier comments here). In that earlier work I used Gallup World Poll data on subjective food security to conclude that the 2007-08 global food “crisis” seemingly had no adverse impact on the world’s poor. As The Economist noted (here), my results were subsequently corroborated by World Bank estimates, which suggested that global poverty continued to fall through the 2007-08 food crisis. In my most recent paper, however, I find an even stronger result: higher domestic food prices predict reductions in poverty (see here). The methods in this paper are fairly simple. I take World Bank national poverty estimates fo...more

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  • Institutional Economics

    Bob Shiller, Ex-Ante and Ex-Post

    Scott Sumner has a nice comparison of Robert Shiller’s investment advice with that from one of my favourite supply-side economists, Alan Reynolds. Loyal readers of this blog will not be surprised to see that Scott’s post has my name all over it. Scott asks, ‘Can people find me the dates where Shiller recommended people buy stocks?’ Sure. In his 2009 book with George Ackerlof, Shiller wrote: ‘there has been one way, at least in the past, in which almost everyone could become at least moderately rich … Invest it for the long term in the stock market, where the rate of return after adjustment for inflation has been 7% per year’ (p. 117). Unfortunately, Shiller’s ex-post observations on stock market returns in 2009 do not sit well with his ex-ante pred...more

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  • CYNICONOMICS

    Message to the Fed: Here Are a Few Things That You Can’t Do

    [A]sset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases. -March 19 FOMC statement The excerpt above or some variation has appeared in every one of the Fed’s post-FOMC meeting statements since the beginning of QE3 in September 2012. Unfortunately, it doesn’t give us much comfort. We don’t see evidence of the Fed’s economists accurately gauging QE’s “efficacy and costs,” notwithstanding its oh-so-slow wind down. On the contrary, history shows that these economists have an inflated view of what they can achieve with monetary policy. Take the link betwe...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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  • CYNICONOMICS

    Corporate Capex Fallacies and Why You Shouldn’t Rely on CNBC

    We get experts on everything that sound like they’re scientific experts … They’ll sit at a typewriter and make up all this stuff as if it’s science and then become an expert … Now, I might be quite wrong, maybe they do know all these things. But I don’t think I’m wrong. You see I have the advantage of having found out how hard it is to get to really know something … how easy it is to make mistakes and fool yourself. I know what it means to know something. And therefore, I see how they get their information and I can’t believe that they know it. They haven’t done the work necessary. They haven’t done the checks necessary. They haven’t done the care necessary … and they’re intimidating people. -Richard Feynman, Nobel Prize-winning physicist Th...more

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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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  • The Becker-Posner Blog

    End the Cuban Embargo—Posner

    I agree with Becker that we should end the embargo. It was first imposed in 1960, two years after Castro took power, and strengthened after the Cuban missile crisis in 1962, and thereafter modified from time to time—and recently somewhat relaxed, so that today in fact we have several billions of dollars in trade with Cuba each year.  Communist Cuba in Castro’s heyday, before the collapse of the Soviet Union followed by the rapid collapse of communism in all countries except North Korea—and Cuba—was, even apart from the missile crisis, an active although not dangerous enemy of the United States, supporting and fomenting communist subversion against a variety of nations some of them allies of the United States. But the embargo was never much more than an annoyanc...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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  • Dani Rodrik's weblog

    If the rest of the world really want to help Turkey

    Here is the one paragraph version of what is happening in Turkey. During the last decade in which he has been in power, Erdogan has allowed the Gulen movement to take control over the police, judiciary, and large parts of the state apparatus. The Gulen movement in turn established a republic of dirty tricks, with illegal wiretaps and video recordings, fabricated evidence, framing of innocent people, slander and disinformation as its modus operandi.  The monster Erdogan created eventually turned against him as the common enemy, the military and the rest of the secular establishment, were vanquished. He is now trying to slay the monster. That means purges, bringing the judiciary under his control, tightening the screws on the Internet and social media, and greatly e...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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  • Dani Rodrik's weblog

    Economics as craft

    I have an article in the IAS’s quarterly publication, the Institute Letter, on the state of Economics.  Despite the evident role of the economics profession in the recent crisis and my critical views on conventional wisdom in globalization and development, my take on the discipline is rather positive. Where we frequently go wrong as economists is to look for the “one right model” – the single story that provides the best universal explanation.  Yet, the strength of economics is that it provides a panoply of context-specific models. The right explanation depends on the situation we find ourselves in. Sometimes the Keynesians are right, sometimes the classicals. Markets work sometimes along the lines of competitive models and sometimes along monopolist...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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  • Risk Watchdog

    Risk Watchdog Has Moved To A New Site

    Dear reader, We are writing to inform you that our blog, Risk Watchdog, has moved to a new location. From now on, the blog will be accessible at http://www.businessmonitor.com/blog Please continue to read our blog, which is updated on a daily or near-daily basis. For those of you who read our blog posts in the form of a daily or weekly email alert, and wish to continue receiving these alerts, please register for free at http://www.businessmonitor.com/blog, where you will also have the opportunity to receive other free content such as Key Analysis and White Papers. The Purpose Of Our Blog At this stage, I’d like to take the opportunity to re-state the purpose of our blog. Our blog has multiple objectives: To convey our views on key political, economic, financial m...more

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  • Risk Watchdog

    Istanbul, Madrid, Tokyo 2020: Olympic Year, Olympian Challenges

    This Saturday, September 7, the International Olympic Committee (IOC) will announce the venue of the 2020 Olympic Games. Istanbul, Madrid, and Tokyo (in alphabetical order) are the three contenders. There is arguably no obvious choice for the winner. Tokyo probably has the best urban infrastructure of the three, but some critics argue that Japan’s colossal fiscal deficit and debt burden mean that the country can ill-afford the Olympic Games. The fiscal risks surely apply to Spain, too. Some also argue that Tokyo would lack a captivating ‘narrative’ for the Olympics. In this regard, Istanbul would be a more ‘interesting’ choice, because it would mark Turkey’s emergence on the world stage, and it would be good politics to award the Olym...more

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  • Risk Watchdog

    Recovery Ahead For European Carmakers?

    The European passenger car market has seen sustained declines in recent years, and this has taken its toll on companies across the supply chain. BMI maintains a bearish regional outlook for 2013, and we expect to see ongoing declines in many markets over the year. Many manufacturers are shifting their strategic focus towards higher-growth emerging markets as they seek to limit their exposure to the region. There are, however, some green shoots emerging and signs that the worst may be over. BMI believes the regional market will bottom out in 2013 before posting positive growth in 2014. This week’s podcast features Nathan Hayes, an analyst with BMI’s Automotive Research team. ...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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  • Rick Bookstaber

    The Product is the Promise: Finance and Social Values

    In the first paragraph of my book A Demon of Our Own Design(Wiley, 2007) I observe that “You don't deliberately obliterate hundreds of billions of dollars of investor money. And that is at the heart of this book – it is going to happen again. The financial markets that we have constructed are now so complex, and the speed of transactions so fast, that apparently isolated actions and even minor events can have catastrophic consequences.” I then spend a significant portion of the book explaining the mechanics that lead the financial markets to lurch from crisis to crisis; why is it that while engineering in other fields increases safety, financial engineering seems to make things get worse. I suggest that the problem stems from the complexity and tight coupling that...more

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  • The Street Light

    When the Fed Chair is an Academic

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

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  • London Banker

    For Want of a Nail, the Ship Was Lost

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

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  • London Banker

    Lies, Damn Lies and LIBOR

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

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  • The Street Light

    Government Job Destruction

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

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Dan Steinbock

Dr Dan Steinbock is a recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond). In addition to his advisory activities (www.differencegroup.net), he is affiliated with major US universities as well as international think-tanks, such as India China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore).

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