EconoMonitor

Economics Blog Aggregator

    Global Macro

  • Brad DeLong's Grasping Reality

    Links

    Links: Josh Lederman and Mark Thiessen: "President Barack Obama says he's changing the name of the tallest mountain in North America from Mount McKinley to Denali..." Must-Read: Michael Burda: Dispelling Three Myths on Economics in Germany Must-Read: Matthew Klein: Some Fed thoughts: QE4 and All That ...more

    Link ›

  • CIPE Development Blog

    How Average Citizens are Helping Set Budget Priorities in Kenya

    “There is no development that can be done if it’s not budgeted for.” These are the words of Edwin Kiprono, the president of Kerio Community Trust Fund, explaining the importance of citizen’s alternative budgets in Kenya. In 2010, Kenya adopted … Continue reading → ...more

    Link ›

  • TIME

    Shift Review: There’s a New, Easy Way to Sell Your Used Car

    Link ›

  • Marginal REVOLUTION

    The culture that is Iceland (Syria)

    Ten thousand Icelanders have offered to welcome Syrian refugees into their homes, as part of a Facebook campaign launched by a prominent author after the government said it would take in only a handful. After the Icelandic government announced last month that it would only accept 50 humanitarian refugees from Syria, Bryndis Bjorgvinsdottir encouraged fellow citizens to speak out in favour of those in need of asylum. In the space of 24 hours, 10,000 Icelanders – the country’s population is 300,000 – took to Facebook to offer up their homes and urge their government to do more. The full story is here.  And here is one such message: “I’m a single mother with a 6-year-old son… We can take a child in need. I’m a teacher and would teach the c...more

    Link ›

  • TIME

    Free National Parks Passes for Families Are Now Up for Grabs

    Link ›

  • Paul Krugman

    Multipliers: What We Should Have Known

    Link ›

  • TIME

    How Panicky Retirement Savers Blew It When Stocks Fell

    Link ›

  • Paul Krugman

    Gravity

    Link ›

  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) TweetGlenn Reynolds, writing in USA Today, draws some lessons from Katrina and her ten-year aftermath. In this new Mercatus Center study, Robert Beekman and Brian Kench explores the economics of export subsidies of the sort doled out by that great geyser of cronyism, the U.S. Export-Import Bank.  A slice: Against that view [that the Ex-Im Bank adds positive value to the American economy by ‘leveling’ the global trading field], we offer a simple, open-economy trade model to demonstrate that there is, in fact, a deadweight loss in the domestic economy when a government offers an export subsidy. In addition to a loss in economic efficiency, the Ex-Im Bank amounts to a special privilege for the connected few—big subsidies to powerful compa...more

    Link ›

  • The Big Picture

    More Food for Thought on Seattle Minimum Wage

    @TBPInvictus (Pun intended in the title) There are myriad factors that typically go into determining the success or failure of any legislative policy. It will be no different with regard to the minimum wage. Let’s turn (again) to Seattle, currently Ground Zero for the minimum wage debate, where the minimum wage was recently kicked up on a gradual journey to an ultimate $15/hour. By way of quick recap, many are focused on the restaurant industry, as it is known to employ a fairly high number of minimum wage employees relative to other industries. Very importantly, there will be a long term study of the effects of Seattle’s recent legislation. Details of that study can be found here. It will hopefully, over time, answer many of the questions about the effects ...more

    Link ›

  • Brad DeLong's Grasping Reality

    http://www.bradford-delong.com/2015/09/must-read-roger-farmer-not-too-simple-just-wronghttprogerfarmerblogblogspotse201508not-too-simple-just-wr.html

    Must-Read: Roger Farmer: Not "Too Simple". Just Wrong: "Simon Wren-Lewis has a nice post discussing... ...Paul Romer’s critique of macro. In Simon’s words: It is hard to get academic macroeconomists trained since the 1980s to address [large scale Keynesian models] , because they have been taught that these models and techniques are fatally flawed because of the Lucas critique and identification problems … But DSGE models as a guide for policy are also fatally flawed because they are too simple. The unique property that DSGE models have is internal consistency … Take a DSGE model, and alter a few equations so that they fit the data much better, and you have what could be called a structural econometric model. It is internally inconsistent, but becaus...more

    Link ›

  • Brad DeLong's Grasping Reality

    http://www.bradford-delong.com/2015/09/fabian-wahl-the-long-shadow-of-history-roman-legacy-and-economic-development-evidence-from-the-german-limeshttpe.html

    Fabian Wahl: The Long Shadow of History: Roman Legacy and Economic Development--Evidence from the German Limes: "This paper contributes to the understanding of the long-run consequences... ...of Roman rule on economic development. In ancient times, the area of contemporary Germany was divided into a Roman and non-Roman part. The study uses this division to test whether the formerly Roman part of Germany show a higher night-light luminosity than the non-Roman part. This is done by using the Limes wall as geographical discontinuity in a regression discontinuity design framework. The results indicate that economic development—as measured by luminosity—is in- deed significantly and robustly larger in the formerly Roman parts of Germany. The study identifies the persi...more

    Link ›

  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) Tweet… is from page 75 of Felix Morley’s 1949 essay “State and Society,” which is reprinted as Essay Two in the 1979 Liberty Fund collection The Politicization of Society (Kenneth S. Templeton, Jr., ed.): Even a bargain with Mephistopheles is less surely a losing proposition than one in which the individual surrenders his soul to the state.  For Satan has forbidden fruit of his own to distribute, while the state, in the last analysis, has absolutely nothing to offer that it has not already expropriated from its subjects.  So, in worship of the state, men sacrifice their souls to a false god that can give them in return only what has already been placed by the worshippers themselves on the sacrilegious altar. ...more

    Link ›

  • The Big Picture

    10 Tuesday AM Reads

    My two-fer-Tuesday morning train reads: • Market pullback: 1997 or 1998? 2011 or 2014? (Fidelity) see also U.S. Stocks Decline as S&P 500 Posts Worst Month Since May 2012 (Bloomberg) • Maybe This Global Slowdown Is Different (BV) see also China’s latest manufacturing data underscore investor fears about the country’s growth (WSJ) • 13 Arguments Pro & Con: Should the Fed tighten? (Marginal Revolution) see also What Fed Officials Are Saying About a September Rate Increase (WSJ) • American Industry Wastes Huge Amounts of Gas by Burning It Off. Here’s a Cheap Way to Save It. (Slate) see also Oil Prices Soar Amid Lower U.S. Output Estimates, OPEC Article • A Life Well Lived (Oliver Sacks) see also Oliver Sacks, 1933-2015 (Longform) Conti...more

    Link ›

  • Marc to Market

    Back to Crisis Mode

    Link ›

  • Free exchange

    When a 26% plunge in GDP feels fine

    Link ›

  • The Big Picture

    Look Out Below, China Edition #47

    Click for updated Futures

    Link ›

  • Fabius Maximus website

    The one review for all this summer’s hottest blockbusters!

    Link ›

  • naked capitalism

    Links 9/1/2015

    Link ›

  • Economist's View

    Syllabus for Monetary Theory and Policy

    Everyone seems to be posting the syllabus for the graduate courses they are teaching this fall. Mine is simple. In my Monetary Theory and Policy course we are going to go through this book by Jordi Gali (don't tell anyone I actually know this stuff): Blurb: This revised second edition of Monetary Policy, Inflation, and the Business Cycle provides a rigorous graduate-level introduction to the New Keynesian framework and its applications to monetary policy. The New Keynesian framework is the workhorse for the analysis of monetary policy and its implications for inflation, economic fluctuations, and welfare. A backbone of the new generation of medium-scale models under development at major central banks and international policy institutions, the framework provides t...more

    Link ›

  • Greg Mankiw's Blog

    The Game Theory of Heroism

    From the NY Times.

    Link ›

  • Economist's View

    'The Clinical-Bench Science Distinction in Macro'

    In response to this from Paul Romer: The Clinical-Bench Science Distinction in Macro: I had hoped to find time to offer a more thoughtful response to Simon Wren Lewis’s most recent comments on the way forward in macroeconomics... For now, I’ll go ahead with what I hope is a suggestion that could encourage some kind of consensus: Perhaps the discussion about macro would benefit from a distinction like the one in biomedicine between bench science and clinical work. In my interpretation, what Lucas and Sargent were trying to do in the 1970s was to develop the bench science side of macroeconomics. ... Lucas (1972) got things off to a very promising start. It offered both a technical advance–a tractable way to introduce uncertainty and expectations–and an ini...more

    Link ›

  • naked capitalism

    Proof of Ongoing Foreclosure Fraud and Mortgage Document Fabrication, in Five Emails

    Link ›

  • Economist's View

    'Dynasties versus Development'

    From Vox EU: Dynasties and development, by Jan Frederick P. Cruz and Ronald U Mendoza: The possibility of a showdown between Hillary Clinton and Jeb Bush in the US Presidential polls may have some political pundits salivating, but perhaps many more Americans wondering. Is political power becoming too concentrated in the US? A Bush or a Clinton was President or Vice President in the US for almost 30 years between 1981 and 2009, a dynastic run that may yet be extended by the 2016 elections. ... In the end, political dynasties in today’s modern and developing democracies are a reminder of how personalities still dominate the political landscape, be it in Washington, DC or in Bombay and Manila. Democracies do not necessarily reflect a level playing field, when certain po...more

    Link ›

  • naked capitalism

    Why is China finding it hard to fight the markets?

    Link ›

  • Marginal REVOLUTION

    Facts about Mexicans

    In 2012, 5.9 million unauthorized immigrants from Mexico lived in the U.S., down about 1 million from 2007. Despite the drop, Mexicans still make up a slight majority (52% in 2012) of unauthorized immigrants. At the same time, unauthorized immigration overall has leveled off in recent years. As a result, net migration from Mexico likely reached zero in 2010, and since then more Mexicans have left the U.S. than have arrived. There is more at the link, might I have found this reference through Michael Clemens? ...more

    Link ›

  • The Skeptical Speculator

    After August fall, bull trend for stocks may be broken

    Global stocks ended August with yet another decline on Monday. The Shanghai Composite Index fell 0.8 percent on Monday to compete a 12.5 percent decline in August, its worst monthly fall since August 2009. The S&P 500 also fell 0.8 percent on Monday to finish August with a 6.3 percent loss, its worst monthly loss since May 2012. The STOXX Europe 600 Index slid 0.1 percent to extend its monthly drop to 8.5 percent, the worst in four years. While some analysts have remained optimistic about markets despite the beating received in recent weeks, others are less so. Mark Newton, a technical analyst and director at Greywolf Execution Partners, said that “the broader trend remains broken”. Lindsey Group’s chief market analyst Peter Boockvar thinks that the bull market ma...more

    Link ›

  • VoxEU.org: Recent Articles

    Soft power raises exports

    Link ›

  • VoxEU.org: Recent Articles

    Leveraged bubbles

    Link ›

  • Marginal REVOLUTION

    Do financial crises lie in Africa’s future?

    From the FT: The likes of Zambia, Ethiopia, Rwanda, Kenya, Ghana, Senegal, and Ivory Coast have all issued foreign currency dominated sovereign bonds in recent years. Ghana is one African nation with a history of debt crises (pdf), and also dating back to the 1980s (pdf).  Tanzania was another offender, both current and past (pdf), and for a while a lot of lending to Africa dried up and that limited the number of possible debt crises.  But now…? Here is Amadou Sy at Brookings, telling us it is not yet time to worry.  Here is the African Development Bank worrying a bit more than that: Today, a third of African countries have debt to GDP ratios in excess of 40 percent. The outstanding sovereign debt for Africa as a whole increased 2.6 times between 2009Q2 and 201...more

    Link ›

  • Worthwhile Canadian Initiative

    Interest-free loans from the central bank to the government

    What is the difference between: A. I print $100, and give it to you as an interest-free loan. B. I print $100, lend it to you at 5% interest, so you give me $5 per year, and then I give that $5 per year straight back to you. C. I print $100, lend it to Tom at 5% interest, so Tom gives me $5 per year. You borrow $100 from Tom (or Dick or Harry) at 5% interest, so give Tom (or Dick or Harry) $5 per year. And I give you the $5 per year that Tom gives to me. I can't see the difference either. The Bank of Canada is a Crown Corporation, and all its profits from printing money (the interest it earns from buying interest-paying assets with currency it prints that pays 0% interest, minus admin costs) are given to the federal government of Canada. The Bank of Canada (like mo...more

    Link ›

  • Cafe Hayek - Article Feed

    Bonus Quotation of the Day…

    (Don Boudreaux) Tweet… is from a recent Facebook post by Mario Rizzo; Mario is here discussing the people fleeing war-torn countries in the middle east: I think western countries, including the US, will make a big mistake in not accepting large numbers of these people. They have proven their mettle by what they have gone through to get out of (eg) Syria. And they will be among the most loyal advocates of “western civilization” and toleration. So true. ...more

    Link ›

  • Marc to Market

    Markets and Morality

    Link ›

  • Beat the Press

    A Public Service Announcement: The Bureau of Labor Statistics Budget

    Link ›

  • CIPE Development Blog

    Could Armenia Be One of the Biggest Beneficiaries of the Iran Nuclear Deal?

    The much-analyzed nuclear deal with Iran to lift international sanctions is, if approved, expected to have a substantial impact on the Iranian economy by enabling the country to increase its oil and gas exports and by creating new possibilities for foreign direct investment (FDI). Many observers hope that the deal will allow for increased interaction with multinational companies and could help... ...more

    Link ›

  • iMFdirect - The IMF Blog

    Olivier Blanchard’s Greatest Hits

    Link ›

  • Marc to Market

    Emerging Markets: Week Ahead Preview

    Link ›

  • Paul Krugman

    The China Debt Zombie

    Link ›

  • Beat the Press

    Low Interest Rates in the Housing Bubble Years Were Due to China's QE Policy

    Link ›

  • Beat the Press

    The Fed and Inequality: It Can Make a Huge Difference

    Link ›

  • Fabius Maximus website

    Why do so many new-born babies die unnecessarily in America, the City on a Hill?

    Link ›

  • International Political Economy Zone

    Minting Gold Coins: The Monies of ISIS

    Coming soon to an antiques dealer near you? Awaiting ISIS currency.Recent gyrations in global markets have demonstrated to some observers the idea of gold as a safe haven doesn't hold. As investors the world over were gripped in fear, the price of the gold went...precisely nowhere fast. So much for seeking the safety of gold:Gold is still well above the more than five-year closing low of $1,084 struck August 5 but the safe haven buying amid the panic on markets did not materialize to the extent many bulls had hoped. Georgette Boele of ABN Amro in a Thursday research note argues that gold did not enjoy a stronger rally because the weaker Chinese economic outlook "outweighed safe have demand."To be fair to gold bugs, the current lack of inflationary pressures in the w...more

    Link ›

  • VoxEU.org: Recent Articles

    The state of the monetary union

    Link ›

  • Worthwhile Canadian Initiative

    Fencing In Canada

    Wisconsin Governor and potential presidential candidate Scott Walker apparently thinks it is not an unreasonable idea to consider building a wall between Canada and the United States in order to secure his country’s borders from security threats.  Now, to be fair, he did not say that a wall should be built along the 5,525 mile long border – only that it was an issue worth looking into.  According to Walker: “Some people have asked us about that in New Hampshire.”  This of course comes on the tail of Donald Trump and his call to build a wall on the US-Mexico border – and have Mexico pay for it. Well, it is summer silly season and on a warm summer day, contemplating all this over a nice cold Canadian beer certainly has its pleasures.  I ...more

    Link ›

  • Smart Economy

    165 Early Warning Signals that point to the Isolation, Decay, Collapse and Implosion of the Russian Federation, a failed state just like we saw before the collapse of the USSR by Walter Derzko Aug 30 2015

    In Feb 2011, I wrote a tongue and cheek blog posting called  Forty One  (41) early warning signals of the collapse and decay of the Russian Federation (Putinism) and Ukraine (Yanukowych Regime) http://bit.ly/fsflvg. It caused quite a stir and coincidently it was translated by the Russian opposition (Boris Nemtsov) into Russian and reposted to dozens  of Russian blog  sites. Well, the Yanukowych regime did collapse, the PUTIN is still (barely) hanging on. So I think it's time to update my Early Warning Signals blog post  with new data points.—Walter Derzko Here is my eight cut.  Thank you to everyone who has suggested new data points that I missed. The Key Driving forces are in red and ** There are  likely many more early warning signals, but who knows which o...more

    Link ›

  • Econbrowser

    U.S. tight oil production decline

    U.S. oil production has begun to drop in response to low oil prices, but not as dramatically as many had anticipated. Oil companies have cut back spending significantly in response to the fall in the price of oil. The number of rigs that are active in the main U.S. tight oil producing regions– the Permian and Eagle Ford in Texas, Bakken in North Dakota and Montana, and Niobrara in Wyoming and Colorado– is down 58% over the last 12 months. Number of active oil rigs in counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to July 2015. Data source: EIA Drilling Productivity Report. Nevertheless, U.S. tight oil production continued to climb through April. It has fallen since, but the EIA estimates that September product...more

    Link ›

  • Fabius Maximus website

    Stratfor describes the Middle East – after the Iran deal

    Link ›

  • Worthwhile Canadian Initiative

    "King of deficits"??

    I normally stay out of politics on this blog. But with the upcoming election, the political conversation on fiscal policy is starting to get stupid. In particular, for Paul Martin to accuse Stephen Harper of being the "King of deficits" was really stupid. Is there anything Stephen Harper could have done to have prevented a fiscal deficit over the recent recession? 1. In my opinion, and it is a minority opinion, and one I came to only with the benefit of hindsight, he could maybe have prevented the recession if, before the recession, he had persuaded the Bank of Canada to switch from targeting 2% inflation to targeting (say) 5% NGDP level path. Forget it. You can't blame Stephen Harper for lacking a macroeconomic crystal ball. 2. He could have cut governme...more

    Link ›

  • International Political Economy Zone

    Novelty Acts: Western Hedge Funds in China

    Cushy whitefella hedge fund types are prolly right in avoiding possible PRC re-education for speculation.As I write, I am listening to the debut album of Col. Bruce Hampton (Ret.) and the Aquarium Rescue Unit. Pop completists will know about this novelty act, whose musical chops did not get in the way of stage antics like having some guy mini-putt golf throughout the show. Antics aside, this is a well-drilled band, and live numbers such as "Yield Not to Temptation," "Working on a Building," and "Basically Frightened" are oddly apt for today's post. Sample lyrics: I'm basically frightened / Of politicians with no hobbies.For, in modern-day China, we also find novelty acts. There, they're called "Western hedge funds" [ooh, exotic!] Given the control freak nature of the PR...more

    Link ›

  • CIPE Development Blog

    How Bitcoin Could Cut the Cost of Remittances and Aid

    Those wishing to send aid, remittances, and investment overseas face exchange rate manipulation and inflated fees when using traditional money transfer services. One emerging alternative to using these services is to transfer Bitcoin internationally. Bitcoin is alluring because financial institutions do not manage its online trade. The transfer of Bitcoin is therefore much less costly than... ...more

    Link ›

  • Greg Mankiw's Blog

    A Career in Economics

    A career in Economics...it's much more than you think from American Economic Association on Vimeo.

    Link ›

  • Free exchange

    Was the crash that big?

    Link ›

  • Free exchange

    The Bank of England will follow the Federal Reserve

    Link ›

  • The Skeptical Speculator

    Markets rally after stocks become cheaper

    The Shanghai Composite Index jumped 5.3 percent on Thursday. Government buying was suspected to have been behind the rally. The market rally in China helped shares gain elsewhere as well. In the US, the S&P 500 jumped 2.4 percent, capping a two-day gain of 6.4 percent, the best since the bull market began more than six years ago. Some analysts think there could be more volatility ahead. JPMorgan Chase & Co. derivatives strategist Marko Kolanovic warned that “price insensitive” program traders are likely to cause repeated selloffs in coming days. However, other analysts think the worst may be over. “We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed,” said John Canally, chief economic strategist at LPL Financial Corp. in Bosto...more

    Link ›

  • John Quiggin

    My submission or the Abbot Point port expansion Environmental Impact Statement

    The Queensland government is going ahead with (or, more hopefully, going through the motions of) the process for expansion of the Abbot Point coal terminal. A Draft Environmental Impact Statement has just been released, and there is a call for comments here My comment relates to the economic impact of the project. The estimated cost is nearly $60 million, which could otherwise be allocated to alternative, urgently needed infrastructure projects. This adverse impact is not discussed. The project mentions employment benefits, but these would also be realised if the funds were spent elsewhere. Unlike alternative investments, the proposed Abbot Point expansion is unlikely to yield any benefits to offset the costs. This is because mining in the Galilee Basin is not commerci...more

    Link ›

  • Econbrowser

    Katrina Plus Ten

    Let hope our responses to the next ones are better than “Heckuva job, Brownie”. From Grinsted, Moore, and Jevrejeva, “Projected Atlantic hurricane surge threat from rising temperatures,” Proceedings of the National Academy of Sciences of the United States of America, 2013: Abstract: Detection and attribution of past changes in cyclone activity are hampered by biased cyclone records due to changes in observational capabilities. Here, we relate a homogeneous record of Atlantic tropical cyclone activity based on storm surge statistics from tide gauges to changes in global temperature patterns. We examine 10 competing hypotheses using nonstationary generalized extreme value analysis with different predictors (North Atlantic Oscillation, Southern Osc...more

    Link ›

  • Smart Economy

    Wild card scenarios -What could distract PUTIN from Ukraine? Threat at the periphery: China Land Grab Scenario

      Wild card scenarios -What could distract PUTIN from Ukraine?  Threat at the periphery: China Land Grab Scenario?..or time to think like Zbigniew Brzezinski would Description:  China senses a weakness, and decides to annex Russian towns along the Sino- Russian border, where many mayors are already Chinese and the majority of the inhabitants,  business owners and factories  are Chinese. The Russian population in Siberia is a state of decline.  In 2000, 28 million Russians lived in Siberia and the Far East.  In 2010, only 25.4 million live there. “The earth along the Amur was, is and always will be Russian.” But Russia’s title to all of the land is only about 150 years old. And the sprawl of highrises in Heihe, the Chinese boomtown on the south bank of the...more

    Link ›

  • iMFdirect - The IMF Blog

    Under Pressure

    Link ›

  • Smart Economy

    151 Early Warning Signals that point to the Isolation, Decay, Collapse and Implosion of the Russian Federation, a failed state just like we saw before the collapse of the USSR by Walter Derzko

    In Feb 2011, I wrote a tongue and cheek blog posting called  Forty One  (41) early warning signals of the collapse and decay of the Russian Federation (Putinism) and Ukraine (Yanukowych Regime) http://bit.ly/fsflvg. It caused quite a stir and coincidently it was translated by the Russian opposition (Boris Nemtsov) into Russian and reposted to dozens  of Russian blog  sites. The KGB was even on my back by writing nasty Soviet style yellow journalism smear postings against me , so I guess the article hit a nerve in the Kremlin. The KGB was logging into my blog site daily for about 6 months after that. Well, the Yanukowych regime did collapse, the PUTIN is still (barely) hanging on. So I think it's time to update my Early Warning Signals blog post  with new data poin...more

    Link ›

  • International Political Economy Zone

    Hong Kong's Stocks: Now Cheaper Than Pakistan's

    Islamabad or bust: HK stocks can now be bought more cheaply than Pakistan's.Having a powerful economy in your orbit, Big Brother style, has its benefits and drawbacks. For the longest time, the Hong Kong Stock Exchange (HKSE) has benefited from riding China's slipstream: Late last year, mainland China overtook Japan in terms of market capitalization to become the second-largest stock market in the world. Then, with the Chinese stock market gathering momentum, Hong Kong's was poised to become the third largest stock exchange after the mainland's.However, you know what has transpired since: the PRC-inflated stock market bubble has popped to dramatic effect, causing turmoil in financial markets the world over. Nowhere has this turmoil been felt more than in Hong Kong. Afte...more

    Link ›

  • John Quiggin

    We need a new word for “reform”

    Hardly anyone bothered to pay attention to the “National Reform Summit” put on by the Oz and the Fin the other day. The word “reform” tells us everything we need to know about this event: yet more invocations of the exhausted policy agenda of the 1980s, all with the implicit message that we need to work harder. Both Jeff Sparrow at Overland and Ben Eltham at New Matilda have pieces today making this point. “Reform”, meaning “change for the better” was always a problematic concept, but it was a useful word, and we don’t have a good alternative. I don’t think a single replacement is feasible, but I’d like to try out some alternatives, and call for other suggestions “Redesign” and “restruct...more

    Link ›

  • Econbrowser

    To Log or Not to Log, Part V

    The Shanghai stock market has undergone some wild gyrations over the last year… and back in 2008. Following up on To Log or Not to Log, Part IV: Here’s the picture, as usually depicted. Figure 1: Shanghai composite stock market index, end of month close. August observation is for 8/26. Source: Quandl. The movements look a bit different (but still scary) in logs. Figure 2: Log Shanghai composite stock market index, end of month close. August observation is for 8/26. Source: Quandl and author’s calculations. ...more

    Link ›

  • The Skeptical Speculator

    Chinese stocks fall again but US stocks rebound

    Chinese stocks fell again on Wednesday, the Shanghai Composite Index ending down 1.3 percent after a rocky session. However, US stocks finally halted its decline on Wednesday. The S&P 500 jumped 3.9 percent to end its six-day slide. The rebound came as New York Fed Bank President William Dudley said on Wednesday that the market upheaval has reduced the case for raising rates in September. Still, the market may face more turbulence ahead. Tom Manning, chief investment officer at Boston Private Wealth, was quoted by Bloomberg as saying: “I don’t know that we found the bottom. I’m not convinced we don’t have more negative days to follow. We’re not likely to go from extreme volatility to extreme calm overnight.”...more

    Link ›

  • John Quiggin

    What do destroyers destroy? What do frigates … ?

    The Abbott government is copping plenty of flak (metaphor used advisedly) over its obvious politicking with respect to the construction of a new class of guided-missile frigate for the Royal Australian Navy. The project with total costs touted at $90 billion is promised to create lots of jobs in South Australia, perhaps replacing those when the same government, in its free-market incarnation, welcome the death of the car industry. Rather than pile on, I’ll ask a question which, from past experience, I know is bound to annoy many. What are these things supposed to do? As far as I can tell, guided-missile frigates are supposed to shoot down aircraft and missiles, but this seems, on the face of things, to be an absurd proposition. Pitting an effectively stationary b...more

    Link ›

  • Greg Mankiw's Blog

    Aargh!!!....Overtaken

     SourceNow I know how Jeb Bush feels.

    Link ›

  • iMFdirect - The IMF Blog

    Foreign Help Wanted: Easing Japan’s Labor Shortages

    Link ›

  • Alpha.Sources

    The Market who "Cried Top"

    "This shows how liars are rewarded: even if they tell the truth, no one believes them" Most of my readers will be familiar with the story about the boy "crying wolf." A young sheep herder repeatedly tricks people in the village into believing a wolf is attacking the flock, and on the day his claim is true, no one believes him, no one comes to his aid, and his sheep are eaten. In the original story, the boy ultimately falls victim to his own devious behavior. But even armed with good intentions picking tops—or bottoms—too hastily in financial markets can lead investors and analysts down the same path as the unfortunate protagonist in Aesop's fable.  At first glance the chart above should look ominous to even the most hardened equity bull, telling a stor...more

    Link ›

  • Alpha.Sources

    Peace for our time in Greece?

      Greece is on everyone's mind at the mind. In this podcast, I try to add counterweight to the growing criticism against the EU/ECB which has, predictably, risen in tandem with the desperation in Athens. I argue that a major part of the responsibility lies with the Greek government, and that the discussion on whether the Euro is fundamentally flawed is uninteresting, and essentially boring. The opening reference to Chamberlain is different from, but still inspired by, Polemic's reference here.  Articles quoted/used: Paul Krugman, June 2015 - The awesome gratuitousness of the Greek crisis Steven Randy Waldman, July 2015 - Greece Bloomberg Views July 2015, Clive Crook - Europe wants to punish Greece with Exit -- The intro music is courtesey of the Lino Rise Proj...more

    Link ›

  • Alpha.Sources

    Did A Butterfly Flap Its Wings In Corporate Bond Markets Last Week?

    In this podcast I continue to discussion from last week on corporate bond market bubbles and liquidity, what the risks are, and how worried we should be. I take my point of departure in the decision, last week, by Aberdeen Asset Management to set up a $500M credit line, as a precaution, to fund redemptions from its bond funds. I also give a brief overview, in numbers, of the increase non-financial corporate bonds outstanding since 2007*.  Articles quoted/used: The FT Jun 15th 2015, David Oakley - Aberdeen takes safety measures against risk of bonds sell-off The FT Jun 18th 2015, Robin Wigglesworth - Liquidity pitfalls threaten parched markets FastFT - Investors flee US junk debt for second week Notes from the Hedge Jun 17th 2015 - Fund Manageme...more

    Link ›

  • TheMoneyIllusion

    Bankrupt Greece breaks promise, rehires 15,000 public employees

    That’s equivalent to about 450,000 new public employees in the US.  Here’s the FT: Opposition lawmakers accused Syriza of violating that agreement with the new laws, which could expand the government payroll by as many as 15,000 employees. But government ministers remained defiant. “We aren’t going to consult [bailout monitors], we don’t have to, we’re a sovereign state,” Nikos Voutsis, the powerful interior minister, told parliament. Yes, and other sovereign states “don’t have to” give Greece any more money. The municipal police force, which was disbanded 18 months ago, will be revived and several thousand caretakers at state schools, known as “guards”, are to be rehired. Kyriakos Mitsotakis, who — as the previous governme...more

    Link ›

  • TheMoneyIllusion

    Xenophobia plus cognitive illusions = mass ignorance

    Don’t be offended by the title of this post.  I’d guess 99.9999999% of people don’t understand currency manipulation or quantum mechanics.  So I’m using the term ‘ignorance’ loosely. And of course since I’m in the tiny minority (of seven people, based on the percentage above), there’s always the small chance that I’m the stupid one.  This post is to organize my thoughts, as I’m going to be interviewed on “currency manipulation” tomorrow. Let’s start with the term ‘currency manipulation.’  That’s what central banks do.  They manipulate the nominal value of currencies.  Period. End of story.  On the other hand: 1.  Monetary policy has no long run effect on real exchange...more

    Link ›

  • TheMoneyIllusion

    The Economist dispels some China myths

    A few years back I commented on a “Ghost Cities” story on 60 minutes: They pointed to a “ghost town” development in Zhengzhou, which is capital of a province of 90 million people.  I’d expect its current population (4 million in the urban area) to grow to 10 to 20 million in a few decades.  How much longer will that development seem unneeded? Here’s The Economist: WHEN “60 Minutes”, an American television news programme, visited a new district in the metropolis of Zhengzhou in 2013, it made it the poster-child for China’s property bubble. “We found what they call a ghost city,” said Lesley Stahl, the host. “Uninhabited for miles and miles and miles and miles.” Two years on, she would not be able to say the same. The empty streets ...more

    Link ›

  • Dani Rodrik's weblog

    The War of Trade Models

    There is an interesting debate going on in Europe about the likely consequences of the TTIP (Transatlantic Trade and Investment Partnership). Much of the real debate is (or should be) about the proposed Investor-State dispute resolution (ISDS) and the desirability of regulatory harmonization when nations have different preferences about how these regulations should be designed. But there is also a fascinating numbers game going on, with alternative quantitative estimates deployed by pro- and anti-TTIP groups. The studies used by the pro group tend to show positive, if small, GDP effects. Probably the best known among these is a study by Joseph Francois and his colleagues, according to which EU and US GDPs will rise by 0.5% and 0.4%, respectively, by 2027 (relative to th...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 ›

  • 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 ›

  • 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 ›

  • 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.