EconoMonitor

Economics Blog Aggregator

    Global Macro

  • Brad DeLong's Grasping Reality...

    For the Weekend: The Ultimate Halloween Movie Is: The Nightmare Before Christmas

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  • TIME

    Thousands of People Want Victoria’s Secret to Apologize for ‘Perfect Body’ Ad

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  • TIME

    US Stock Indexes Zoom Back to Record Highs

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  • The Big Picture

    Succinct Summations of Week’s Events 10.31.14

    Succinct Summations week ending October 31st. Positives: 1. Q3 GDP rose 3.5% vs expectations of 3.1%. 2. The Fed officially ended QE, the market stood on its own two feet. 3. Consumer confidence came in at 94.5, the highest levels since October 2007. 4. Chicago PMI came rose to a 12-month high of 66.2. 5. Richmond Fed manufacturing index came in at 20 v expectations of 11. 6. University of Michigan consumer confidence rose to 86.9, the best reading since 2007. 7. Japan industrial production rose 2.7% m/o/m, better than the 2.2% expected. 8. The S&P 500 finished October 2% higher after being down as much as 7.7% earlier in the month. 9. The BOJ said it will triple the size of its easing measures. The Yen fell to a 7-year low and the Nikkei gained 4.8%. Negatives: 1. ...more

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  • Brad DeLong's Grasping Reality...

    A Dialogue on Secular Stagnation: The Honest Broker for the Week of October 24, 2014

    ###Secular Stagnation### Princeps Cogitationis: If I am going to hold down my consulting and speech-making jobs, I need to understand what Larry Summers is talking about here: Larry Summers: What to do about secular stagnation? But it is too long! 3000 words! Help! What can I do? Oeconomicarus: But I thought you read 300 books a year? Princeps Cogitationis: I read the last chapter of 300 books a year. Then I read three short reviews of each. And then I opine fearlessly. Working through a difficult 3000-word argument and assessing it is not a good use of my time. READ MOAR Oeconomicarus: So you want me to use my time enlightening you so that you can stamp your brand on my thoughts and make money off of them? Princeps Cogitationis: Exactly! Oeconomicarus: Were ...more

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  • Economist's View

    Fed Watch: Another Kocherlakota Dissent

    Tim Duy: Another Kocherlakota Dissent, by Tim Duy: Minneapolis Federal Reserve President Narayana Kocherlakota released a statement regarding his dissenting vote at this week';s FOMC meeting. He does not share his colleagues faith that inflation will return to target anytime soon: ...In my assessment, the medium-term outlook for inflation has shown no overall improvement since last December and, indeed, is arguably worse. Failing to act in response to this subdued inflation outlook increases the downside risk to the credibility of our 2 percent inflation target. Market-based measures of longer-term inflation expectations have fallen recently to unusually low levels, a decline that I believe reflects that kind of increased downside risk... Today's reading on i...more

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  • Greg Mankiw's Blog

    Job vacancy rate is back to pre-crisis level

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  • naked capitalism

    2:00PM Water Cooler 10/31/14

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  • Marginal REVOLUTION

    Himalayan Viagra fuels caterpillar fungus gold rush

    I don’t myself care about the event, I just liked the headline. A related study is here, and I thank CK for the pointer.

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  • Cafe Hayek - Article Feed

    A Dollar of Profit Can’t Be In Two or More Places Simultaneously

    (Don Boudreaux) Here’s a letter to the Wall Street Journal: You report that Hillary Clinton tried to explain (away) her recent ‘businesses don’t create jobs’ remark by saying that what she really meant is that jobs are not created by businesses that “outsource jobs or stash their profits overseas” (“Hillary Rodham Warren,” Oct. 31). Ignore Ms. Clinton’s outsourcing comment, which reflects nothing but pedestrian economic illiteracy (or her willingness to pander to such).  Instead, note that if Ms. Clinton is correct to suggest that corporations are stashing lots of profits overseas, Thomas Piketty and his fans ought to be pleased.  Profits that are stashed abroad (or anywhere, for that matter) are not - contrary to M. Piketty’s suspicions -...more

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  • The Big Picture

    Random Thoughts for October

    Over the course of each month, I end up with quite a few random thoughts. They are the interesting tidbits that are not quite meaty enough to be worthy of a full column. But they often are interesting enough to stimulate thinking and provoke discussion. Rather than toss them out, I save them up over the course of each month. Here is what October’s random thoughts look like: • Americans spend more than $2 billion on Halloween candy each year; we spend even more than that on costumes. • The Bank of Japan surprised everyone by upping its stimulus to 80 trillion yen ($717 billion). Previously, it was more than 60 trillion yen. • Tomorrow begins the best six months of the year for stock markets. Since 1950, almost all of the market’s gains have come between Nov...more

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  • TIME

    Pigs Fly: Millennials Finally Embrace Stocks

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  • The Big Picture

    Halloween: The Chemistry of Candy

    Source: Compound Chem

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  • Marginal REVOLUTION

    Assorted links

    1. Scott Sumner on demand- and supply-side stagnation.  I also would stress the risk premium as a transmission mechanism linking the two curves. 2. Austin Frakt reviews GoogleR17;s Inbox. 3. What the world eats. 4. When DNA is the matchmaker (dubious, in my view). 5. How candy conquered Halloween. 6. The 86-square foot Paris apartment. ...more

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  • Brad DeLong's Grasping Reality...

    For Halloween: Ruth Baby Ginsburg

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  • naked capitalism

    Slugfest Over Taibbi Exodus From First Look Fails to Address Editorial Meddling Doubts

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  • Worthwhile Canadian Initiative

    Making two macroeconomic fallacies true

    This will be a confusing post, because I'm writing it to try to get my head clear on something. And it's still not clear. There are no answers here: only questions, and strange thoughts. 1. Lots of people believe the Inflation Fallacy: "Inflation makes us worse off because a 1% rise in prices means we can afford to buy 1% less stuff, duh!". It is hard work to explain to people why this is wrong, and each new generation has to be taught it anew. Ours the Task Eternal. But if the central bank targeted NGDP, the Inflation Fallacy would be true. With the central bank holding the path of nominal spending constant, every extra 1% of inflation really would mean that real spending falls by 1%. Ordinary people would understand macroeconomics better, without us ...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 197 of Michael Huemer’s impressive 2013 book, The Problem of Political Authority (emphases original): A related form of utopianism consists of suspending general assumptions about human nature when considering agents of the state.  Defenders of government are often keen to point out the harms that might result from the widespread greed and selfishness of mankind in the absence of a government able to restrain our worst excesses.  Yet they seldom pause to consider what might result from the very same greed and selfishness in the presence of government, on the assumption that governments are equally prone to those very failings.  It is not that statists have some account of why government employees are more virtuous than average pe...more

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  • Beat the Press

    Holy Cowdroppings Batman, Medicare Spent 0.0003 Percent of Its Budget on Drugs for Dead People!

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  • Marginal REVOLUTION

    Is recovery always slow after a financial crisis?

    That has been the received wisdom, but it is now challenged by a new paper (pdf) by Christina and David Romer: This paper revisits the aftermath of financial crises in advanced countries in the decades before the Great Recession. We construct a new series on financial distress in 24 OECD countries for the period 1967-2007. The series is based on narrative assessments of the health of countries’ financial systems that were made in real time; and it classifies financial distress on a relatively fine scale, rather than treating it as a 0-1 variable. We find little support for the conventional wisdom that the output declines following financial crises are uniformly large and long-lasting. Rather, the declines are highly variable, on average only moderate, and often tempor...more

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  • naked capitalism

    Links 10/31/14

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) My former student Alex Nowrasteh, now with the Cato Institute, writes in the Wall Street Journal to advise the G.O.P. to abandon its hostility to immigrants. Sandy Ikeda on the power of no. Terry Anderson explains that the Endangered Species Act threatens wildlife. The New York Times says that Obamacare is a success; Merrill Matthews says that the New York Times‘s analysis is a failure. Speaking of Obamacare, the market responds to that man-made calamity humanely – as explained by Maxim Lott. James Pethokoukis points us to Scott Winship’s recent debunking of many asserted claims of the destructiveness of income inequality. ...more

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  • International Political Economy Zone

    How Venezuela Gives Socialism a Bad Name

    Living the socialist dream? Shortages of basic goods abound. It is hard to dislike the aim of socialism--egalitarianism in resource distribution among the plenty. However, years and years of experience with these regimes from the Soviet Union and all sorts of Marxist-Leninist offshoots demonstrates that, in practice, the opposite holds true. In China, for instance, the Communist Party elite--ostensibly the vanguard of the proletariat--hardly paved the way for more equitable distribution of wealth but merely concentrate political-economic power in the hands of a few.  It's the same story nearly everywhere you go.The most notable current experiment in mounting a holy war against all things capitalist is Venezuela where the same rhetoric is evident: self-styled "...more

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  • Beat the Press

    Misplaced Celebrations On Third Quarter Growth

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  • Economist's View

    Paul Krugman: Apologizing to Japan

    What are the lessons we should learn from Japan?: Apologizing to Japan, by Paul Krugman, Commentary, NY Times: For almost two decades, Japan has been held up as ... an object lesson on how not to run an advanced economy. After all, the island nation is the rising superpower that stumbled. One day, it seemed, it was on the road to high-tech domination of the world economy; the next it was suffering from seemingly endless stagnation and deflation. And Western economists were scathing in their criticisms of Japanese policy. I was one of those critics... And these days, I often find myself thinking that we ought to apologize. ... The ... West has, in fact, fallen into a slump similar to Japan’s — but worse. And that wasn’t supposed to happen. In the 1990s, we assume...more

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  • Economist's View

    Links for 10-31-14

    Economic Lessons Not Learned - NYTimes.com In praise of macroeconomists (or at least one of them) - mainly macro Wikipedia: The value of open content production - Vox EU Inflation? Deflation Is New Risk - NYTimes.com Did the Federal Reserve Do QE Backwards? - Mike Konczal Oikonomia, Revisited - Tim Taylor Diversity in Economics - Janet Yellen Google's Analysis of Japan - Paul Krugman Will somebody please think of the Data Generating Process! - Nick Rowe Email is - Digitopoly Give Me Some Crowding-Out - Gloomy European Economist ...more

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  • John Quiggin

    Brands of nonsense

    That’s the title of a piece of mine the Chronicle of Higher Education ran a little while ago. It’s paywalled but they have graciously given me permission to republish it here. A little while ago, the University of Warwick was in the news for all the wrong reasons. Its longstanding legal firm, SGH Martineau, put up a blog post suggesting that universities should take action against “insubordinate” academics with “outspoken opinions.” The firm stressed the importance of making an example of offenders whose academic work was “brilliant,” lest other employees become tempted to emulate them. Unfortunately for Warwick, this suggestion was made at precisely the time the university was seeking to remove an insubordinate professor...more

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  • VoxEU.org: Recent Articles

    Wikipedia: The value of open content production

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  • International Political Economy Zone

    Sympathy for the Monsanto: An Unenviable PR Job

    Anti-Monsanto campaigners have fun with Photoshop.Environmentally-conscious readers will no doubt be aware of the controversies surrounding Monsanto. If there ever was a poster child for The Evils of Big Ag(riculture), Monsanto would be it. Heavy pesticide use. Genetically modified organisms. Terminator seeds. Monoculture. As if things were not bad enough with environmentalists already, Monsanto also has to deal with the next generation of food consumers who are generally more picky about what they eat. Largely unfamiliar with agriculture, millennials are susceptible to being swayed mostly by overwhelmingly negative press about modern agriculture.Given such a scenario, think about being a millennial tasked with generating positive PR for Monsanto. Whereas most wouldn't ...more

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  • Beat the Press

    In Case You Were Wondering What Folks Who Rate Subprime MBS as AAA Think of the Creditworthiness of the U.S. Government

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  • Paul Krugman

    Google’s Analysis of Japan

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  • Worthwhile Canadian Initiative

    New CIHI Health Numbers: Health Care Cost Curve Still Bending

    The Canadian Institute for Health Information has released its 2014 edition of health spending data - National Health Expenditure Trends, 1975 to 2014 – and the numbers seem to show a continuing trend towards slower growth of health expenditures in Canada. For 2014, total health spending in Canada is expected to be 214.9 billion dollars or $6,045 per capita and will only grow 2.1 percent compared to average annual increases of 7 percent over the period 2000 to 2010 (See Figure 1). Public sector health spending accounts for about 70.5 percent of this spending.  The key areas of hospital, physician and drug spending are expected to grow this year at rates of 2.1, 4.5 and 0.8 percent respectively.  The slowdown in drug spending is particularly remarkable giv...more

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  • CIPE Development Blog

    The Importance of Corporate Governance in Family-Owned Companies

    The adoption of good governance practices is beneficial to listed companies, unlisted companies, and family-owned enterprises. Good governance practices strengthen companies by building relationships among investors, boards of directors, managers, and employees. Implementing corporate governance guidelines allows businesses to obtain capital at lower cost, enhances business strategy, and... ...more

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  • Econbrowser

    Solid GDP report

    The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.5% annual rate in the third quarter. That combines with a 4.6% annual growth rate now reported for the second quarter, giving us an average growth rate for the last six months that is solidly above the postwar average. U.S. real GDP growth at an annual rate, 1947:Q2-2014:3. Blue horizontal line is drawn at the historical average (3.1%). Almost all the components of GDP contributed, with solid gains in consumption, nonresidential fixed investment, and government spending. Even imports were down and exports were up, though some deterioration in that last category is a distinct possibility if concerns of a slowdown outside the U.S. prove justified. Inventory drawdown exerted a slight drag on...more

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  • Marc to Market

    Great Graphic: Equity Performance in US, Europe, Japan

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  • Marc to Market

    Emerging Markets: What has Changed

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  • Greg Mankiw's Blog

    The Latest from Merle Hazard

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  • Worthwhile Canadian Initiative

    Will somebody please think of the Data Generating Process!

    Or: "Should Finance People be allowed out unaccompanied by a macroeconomist?". If the central bank is doing its job right, monetary policy ought to appear to be irrelevant. The Economist says (HT Mark Thoma) "Interest rates do not seem to affect investment as economists assume", and this means that monetary policy is irrelevant. (Let's just set aside the fact that monetary policy is not interest rate policy.) The Economist refers us to an empirical study by S.P. Kothari, Jonathan Lewellen, and Jerold B. Warner. Read their second paragraph below (I messed up the copy-and-paste, as usual): Take a simple macro model in which investment is a negative function of the rate of interest. The second-year ISLM model will do fine for our purposes. Then as...more

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  • Fabius Maximus

    Prof Botkin gives us good news about our changing climate

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  • VoxEU.org: Recent Articles

    Regulating capital flows at both ends

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  • VoxEU.org: Recent Articles

    Reflections on the new 'Secular Stagnation hypothesis'

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  • Econbrowser

    Philadelphia Fed: Wisconsin and Kansas Growth Gaps Forecasted to Increase

    And California and Minnesota surge ahead of the US. I know this sounds like a broken record, but the numbers are the numbers. And reader Patrick R. Sullivan suggests I move to Kansas, based on a Tax Foundation analysis (the same Patrick R. Sullivan who refuses to admit that his assertion that the depth of the downturn in Canada was less than that in the US during the Great Depression is wrong.) Here’s at least one reason why I don’t plan to. From today’s release of leading indices by the Philadelphia Fed, combined with last week’s release of coincident indices. Figure 1: Log coincident indices for Minnesota (blue), Wisconsin (red), Kansas (green), California (teal), and US (black), and forecasted levels for March 2015, all seasonally adjusted, ...more

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  • iMFdirect - The IMF Blog

    A Downturn Without Layoffs? Reconciling Growth And Labor Markets In Latin America

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  • CIPE Development Blog

    Warsaw Dialogue for Democracy Highlights Closing Space for Civil Society

    Pro-democracy reformers and activists are among the most driven and courageous people in the world. Speaking out against abuses committed by authoritarian governments often brings the risk of punishment, and meaningfully engaging on policy issues even with democratic governments takes dedication, mobilization, and discipline. Civil society is a key conduit between citizens and their governments... ...more

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  • 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

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  • Marc to Market

    Focus on Fed, but New Inputs for BOJ and ECB

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  • Greg Mankiw's Blog

    National Economists Club

    If you are in the DC area, you can hear me speak on November 13.  Click here for more information.

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  • International Political Economy Zone

    Play With ≈$4 Trillion: Reading China's Falling Reserves

    PBoC guv'nor Zhou Xiaochuan, second most powerful person in the world? If you were to be reborn as a global power broker, chances are you'd choose being Zhou Xiaochuan going by the numbers alone. Yet it is a lot less glamorous than it sounds waking up each morning with $3.89 trillion to play with. You'd think the world's your oyster as you make Norway's sovereign wealth fund look like a pipsqueak, but no, it's not that simple. The People's Bank of China (PBoC) is not an independent central bank after all. Nor does it have enough human capital in comparison to commercial fund management concerns in the West:But there are limits as well. A government-affiliated institution is not a real company. It can never establish an efficient corporate governance structure as ...more

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  • John Quiggin

    Eyes of the world on Brisbane (G20), Department of the Absurd

    Channel 9 News yesterday had a story about how the massive worldwide TV audience for G20 news coverage will discover that * Brisbane has graffiti * Roma St Transit Centre is ugly. In reality of course, they will discover that we have a Convention Centre and hotels, providing backdrops for political leaders to pontificate about nothing much. ...more

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  • iMFdirect - The IMF Blog

    Infrastructure Investment: Part of Africa’s Solution

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  • Paul Krugman

    Lars Svensson 1, Sadomonetarists 0

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  • Paul Krugman

    Notes on Japan

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  • CIPE Development Blog

    Teach a (Wo)man How to Fish: The Changing World of International Development

    It is only natural that the world of international development would itself develop and change over the years to adapt to the changing landscape of needs and local capacity. At a panel discussion at Georgetown University entitled “The Changing World of International Development,” three development practitioners from leading organizations provided some insight into how their work has changed over... ...more

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  • Free exchange

    Important, shocking, but lacking

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  • Econbrowser

    Ed Lazear Comments on Government Forecasts

    Or, the self-rehabilitation effort continues. In a WSJ op-ed entitled “Government Forecasters Might as Well Use a Ouija Board”, he writes: My analysis of 1999-2013 reveals that the CBO’s real GDP growth forecasts for the next year were off, on average, by 1.7 percentage points, either too high or low. Administration forecasts were similarly off by a slightly larger 1.8 percentage points on average, also to high or too low. Given that the average growth rate during this period was only 2.1%, errors of this magnitude are substantial. Perhaps most damning: History is a better predictor of annual growth than government forecasts. Simply assuming that GDP growth will be 3.1% in each year — the average annual rate for the 30 years that precede the study p...more

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  • John Quiggin

    Wouldn’t know if their a**e was on fire

    As I type this, it’s currently 35 degrees, at 9am on an October morning in Brisbane. And, while one day’s temperatures don’t prove anything, a string of studies have shown that the increasingly frequent heatwaves in Australia can be reliably attributed to global warming. We haven’t had an El Nino yet, but according to NOAA, the last 12 months have been the hottest such period on record. It will be interesting to see what the denialists come up with in response to this combination of record breaking local and global warming. We can safely rule out anything along the lines of “as a sceptic, I like to wait for convincing evidence before accepting a new hypothesis. But, with the steady accumulation of evidence I’m now convinced”....more

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  • Free exchange

    A mixed bill of health

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  • Free exchange

    Putting the boot in development

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  • The Skeptical Speculator

    Blog announcement

    This is just to announce that there will be minimal blogging over the next week or two. Thank you.

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  • The Skeptical Speculator

    Markets mixed, UK economy decelerates, US and Chinese home prices fall

    Markets were mixed on Friday. The S&P 500 rose 0.7 percent to extend its gain for the week to 4.1 percent, the best since January 2013. However, the STOXX Europe 600 fell 0.3 percent to trim its weekly gain to 2.7 percent, still the best this year. Economic data on Friday were also mixed. The UK economy decelerated in the third quarter, growing by 0.7 percent compared with 0.9 percent in the second quarter. The services industry grew 0.7 percent in the third quarter, down from 1.1 percent in the previous quarter, while manufacturing output grew 0.4 percent, down from 0.5 percent. In the US, new home sales rose 0.2 percent in September but data for prior months were revised down. The median sales prices fell 4 percent in September from a year ago, the first decline since...more

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  • The Skeptical Speculator

    Markets rally amid positive economic data

    Markets resumed their rally on Thursday. The S&P 500 rose 1.2 percent and the STOXX Europe 600 rose 0.7 percent. The US 10-year Treasury yield rose six basis points to 2.27 percent. Oil and copper also rose. Positive economic data on Thursday helped boost markets. In the US, Markit's preliminary manufacturing PMI for October showed a fall to 56.2 in from 57.5 in September but remained well in expansion territory while the Chicago Federal Reserve's national activity index jumped to +0.47 in September from -0.25 in August. US economic growth is likely to be maintained after the Conference Board's US index of leading indicators rose 0.8 percent in September. Economic data for the euro area on Thursday were also positive. Markit's preliminary composite PMI for the region f...more

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  • 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

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  • iMFdirect - The IMF Blog

    Does Raising the Minimum Wage Hurt Employment? Evidence from China

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  • Fabius Maximus

    The truth emerges about Afghanistan, an indictment of our war. Now comes the hard part: learning from failure.

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  • Fabius Maximus

    We awake from fears of an Ebola pandemic in America. Now let’s ask who’s responsible…

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  • Alpha.Sources

    Another Eurozone Crisis Ahead?

    Calamities happen in financial markets, and usually when investors least expect and are least prepared for it. In the euro area, weak growth in the past six months and the inability of the ECB's measures to turn asset markets arounds have led investors to, once again, revisit their sovereign debt crisis playbooks.  This is understandable, but also now raises a fundamental question. If we are about to tumble into round 2 (or 3?) of the sovereign debt crisis, Eurozone bears may still prevail holding on to the recent trend in equities. But if we are not, the only trade that currently makes sense is to buy equities and short benchmark bonds in the euro area. Narrow money growth and ECB easing would indicate this to be a good bet, but the lack of sovereign QE amid incre...more

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  • Rick Bookstaber

    My Recent Work on Agent-based Modeling

    As is obvious by looking at the time span between recent posts, I have not been active in blogging. I am planning to get back into things.  As a start, to help catch up on what I have been doing, here are a couple of papers and a presentation I recently made on the area of my focus, using agent-based modeling to help assess financial vulnerabilities.The model is presented here.For a concise presentation on the model and its application you can look at a talk I did in August at the Newton Institute for Mathematical Sciences at Cambridge University.  (Despite what is suggested by the venue, I did the presentation mathlessly).Related to the model is work I have been doing to develop a map of sorts for the key agents in the financial system and the ways in wh...more

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  • Dani Rodrik's weblog

    Services, manufacturing, and new growth strategies

    I gave a talk yesterday on New Growth Strategies at the World Bank, which was more or less an elaboration of this short piece. I argued that industrialization had pretty much run out of steam as a growth strategy, that services would need to be the focus going forward, and that this required in turn a different policy mindset about how to increase productivity. In particular, I argued that policies focusing on generating a sequence of sectoral “winners,” which worked so  well in manufacturing (garments to car seats to cars to electronics), would have much smaller payoff in services, in view of the non-tradability of most service segments. I suggested further that, even under the best of circumstances, a services-oriented strategy would yield lower growth than ...more

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  • Jeffrey Frankel's Blog

    The Return of Voodoo Economics

    Paul Krugman’s column in the New York Times today talked of the revival of “Voodoo economics” by some Republican politicians.  This refers to the Laffer Proposition that a cut in income tax rates stimulates economic activity so much that tax revenue goes up rather than down.   Gov. Sam Brownback, who is running for re-election in Kansas, has had to confront the reality that tax revenues went down, not up as he argued they would, when he cut state tax rates. I disagree with one thing that Krugman wrote in his column: the idea that there was a long break,  particularly after George W. Bush took office, during which Republican politicians did not push this line.  To the contrary, I have collected many quotes from George W. Bush and his top officials claiming the...more

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  • Jeffrey Frankel's Blog

    Piketty’s Fence

    Most of the reviews of Thomas Piketty’s book Capital in the Twenty-First Century have already been written.  But I thought it might be best to read it all the way through before offering my own thoughts on this book, which startlingly rose to the top of the best seller lists last April.  It has taken me five months, but I finished it. One of the things the book has in common with the Karl Marx’s Das Capital (1867) is that it serves as a rallying point for the many people who are passionately concerned about inequality, regardless whether they understand or agree with the specific arguments contained in the book in question.  To be fair, much of what Marx wrote was bizarre and very little was based on careful economic statistics.  Much of what Piketty says is ba...more

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  • Smart Economy

    Belgian Researchers Discover Way to Block Cancer Metastasis

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

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  • Smart Economy

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

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

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  • Smart Economy

    Space: The final frontier… open to the public

      UTMB research shows average people healthy enough for commercial space travel Historically, spaceflight has been reserved for the very healthy. Astronauts are selected for their ability to meet the highest physical and psychological standards to prepare them for any unknown challenges. However, with the advent of commercial spaceflight, average people can now fly for enjoyment. The aerospace medicine community has had very little information about what medical conditions or diseases should be considered particularly risky in the spaceflight environment, as most medical conditions have never been studied for risk in space — until now. The aerospace medicine group at the University of Texas Medical Branch at Galveston recently studied how average people with common ...more

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  • Alpha.Sources

    Where Are My Foreign Assets When I Need Them?

    How do you show the challenge of the eurozone periphery in one chart? Well, it is difficult but the representation below is a good pick in my view. A structurally negative net foreign asset position is a very tough hurdle to overcome when in a currency union, saddled with poor demographics and need net external demand to boost national income. Think of the periphery as Japan and Germany without(!) the strong net foreign asset position.  These countries seem to have grown old before getting rich and without the ability to devalue in nominal terms, the outlook is not good.    --- Picture is courtesey of Pantheon Macroeconomics and has also been posted on Twitter.  ...more

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  • Alpha.Sources

    The Italian Economy Remains Stuck ...

    Italy has the dubious honor of the being the first eurozone economy to re-enter recession after the decidedly tepid recovery since 2012. This is bad news for an economy struggling with steadily increasing government debt and no real solution on how to pay off its mounting liabilities. What is even worse is that it looks as if the economy is not about to exit its malaise anytime soon. --- Picture is courtesey of Pantheon Macroeconomics and has also been posted on Twitter.    ...more

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  • Dani Rodrik's weblog

    Back to sanity on economic convergence

    It’s been interesting to watch how the conventional wisdom on rapid convergence – developing countries closing the gap with the advanced economies – has been changing over the last few years. It wasn’t so long ago that the world was in the grips of emerging-markets mania, projecting wildly optimistic growth numbers decades into the future. For the last 4-5 years, I have been writing that the pace of convergence we have experienced over the last two decades is unsustainable. There were temporary factors (cheap capital, low interest rates, high commodity prices, rapid Chinese expansion) which would begin to reverse themselves. And perhaps most importantly, export-oriented industrialization was running out of steam much earlier, even in the relatively successful co...more

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  • 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

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  • Jeffrey Frankel's Blog

    Modi, Sisi & Jokowi: Three New Leaders Face the Challenge of Food & Fuel Subsidies

    In few policy areas does good economics seem to conflict so dramatically with good politics as in the practice of subsidies to food and energy.  Economics textbooks explain that these subsidies are lose-lose policies. In the political world that can sound like an ivory tower abstraction.   But the issue of unaffordable subsidies happens to be front and center politically now, in a number of places around the world.   Three major new leaders in particular are facing this challenge:  Sisi in Egypt, Jokowi in Indonesia, and Modi in India. The Egyptian leader is doing a much better job of facing up to the need to cut subsidies than one might have expected.  India’s new prime minister, by contrast, is doing worse than expected – even torpedoing a long-anticipated ...more

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  • 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

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  • Institutional Economics

    The Financial System Inquiry and Macro-Pru

    I have an op-ed in Business Spectator endorsing the sceptical approach to macro-prudential regulation taken in the Murray inquiry’s interim report: Macro-prudential policies are seen as providing policymakers with a more targeted set of policy instruments that might complement or even substitute for changes in official interest rates. However, these instruments also implicate policymakers in making much finer judgements about risks to financial stability as well as the more traditional concern of monetary policy with price stability. A blunt instrument like monetary policy encourages caution in making such judgements. By contrast, more targeted counter-cyclical quantitative controls are a standing invitation to micro-manage credit allocation, but do not in thems...more

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  • CYNICONOMICS

    Technical Notes for ‘Never Mind Their Distrust of Data and Forecasts…’

    This is a short appendix for our earlier post, “Never Mind Their Distrust of Data and Forecasts; Austrians Can Help You Predict the Economy,” in the usual Q&A format. Why do you show three different series in the first chart? We show “Net Private Debt from Census Bureau” because it has the longest history. We use it later to calculate 5-year credit growth figures for the period before the Fed’s “flow of funds” becomes available. We deduct financial and real estate corporation debt in the second dotted line to show that private debt growth in the late 1920s wasn’t skewed by financial debt (as it was in the 2000s). We can only back out financial debt from 1926 (not enough data to use in the “savings rates and credit growth” chart), but this series...more

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  • CYNICONOMICS

    Never Mind Their Distrust of Data and Forecasts; Austrians Can Help You Predict the Economy

    [O]f all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. – From The Economist, July 16, 2009. It’s been five years since the The Economist magazine published the critical commentary  excerpted above. In hindsight, the noted reputational damage was neither lasting nor spectacular. As of today, we’d say it’s almost non-existent. Mainstream economists continue to dominate their profession and wield huge influence on public policies. They merely needed to close ranks after the financial crisis and wait for people to forget that their key theories and models were wholly discredited. Meanwhile, heterodox economists who stress credit market risks and financial fragilities – the Austrians, the Mi...more

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  • CYNICONOMICS

    Technical Notes for ‘Planning for Future Rate Hikes…’

    This is a short appendix for our earlier post, “Planning for Future Rate Hikes: What Can History Tell Us that the Fed Won’t?,” presented in Q&A format. I don’t understand the calculations in your charts – can you walk me through one of the figures? Sure, we’ll do this for the figure depicted by the first bar (6.1%) on the real fixed investment chart: We start by isolating all 4 quarter periods over which the fed funds rate dropped by more than 2%. There were 37 such periods in our data set, as shown in the first chart of the main article. For each of these periods, we record the growth in real fixed investment over the next 4 quarters. This is what we mean by lagged growth – we’re lagging the economic outcome against the change in interest rate...more

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  • Dani Rodrik's weblog

    My moonlighting career of the last 4 years

    At long last, Turkey's consitutional court has reversed the conviction of the more than 200 officers previously found guilty in the bogus Sledgehammer coup plot, leading to the release on June 19th of all those in jail (including my father in law). Even though a retrial is to take place, the ruling is a coda to the last four-and-a-half years during which my wife and I moonlighted as criminal investigator, forensic analyst, and political activist. It has been a truly surreal and bizarre experience, given how so many intelligent people bought into -- and refused let go of -- a coup plot that was patently fictitious.     So I thought this would be a good time to post a longish account of my involvement in the story. I wrote it as much to make sense of it to...more

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  • The Becker-Posner Blog

    Farewell

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

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  • Rick Bookstaber

    Piketty Myopia

    Thomas Piketty's book Capital in the Twenty-First Century has been lauded for its detailed analysis of data and for the end result of that analysis, a sweeping statement of an inexorable widening of the distribution of wealth between those with capital and those without. There is unabashed glee among those who have bemoaned the plight of the middle class as the one percent has pulled away, waving the book as the gotcha ya for income redistribution.  As should be clear from some of my previous posts, I am one of those people bemoaning the plight, but I am a little slower than many others to take up the Piketty banner. The book's argument looks at wealth and growth data over the past three centuries, and takes its implications forward with a similar, historical scope...more

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  • Felix Salmon

    Post Felix

    By Shane Ferro Today is Felix’s last day at Reuters. Here's the link to his mega-million word blog archive (start from the beginning, in March 2009, if you like). Because we’re source-agnostic, you can also find some of his best stuff from the Reuters era at Wired, Slate, the Atlantic, News Genius, CJR, the NYT, and NY Mag. There’s also Felix TV, his personal site, his Tumblr, his Medium archive, and, of course, the Twitter feed we all aspire to. Counterparties may have been the brainchild of Felix and the recently departed Ryan McCarthy, but the blog, site, newsletter, and Twitter feed will continue to exist in their absence. It will be run by Ben Walsh and Shane Ferro, with some non-trivial amount of snark. Today we focus on the reason Felix started Counterparti...more

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  • Felix Salmon

    The Piketty pessimist

    By Felix Salmon This chart comes from the World Economic Forum’s 2014 Global Risks Report, which came out just before Thomas Piketty’s book started becoming the topic of discussion in economic and plutocratic circles.* You can clearly see what you might call the rise of inequality-as-an issue: before 2012 it’s nowhere to be found, but since then it’s been consistently in the top spot. My prediction is that in 2015, thanks to Piketty, the WEF will start talking less about income inequality, and more about wealth inequality. The big question, though, is whether inequality is really much of a risk at all. After all, from the point of view of the average billionaire WEF delegate, inequality would seem to look much more like a reward. Chrystia Freeland has a hopeful...more

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  • Felix Salmon

    The most expensive lottery ticket in the world

    By Felix Salmon No Exit, the new book from Gideon Lewis-Kraus, should be required reading for anybody who thinks it might be a good idea to found a startup in Silicon Valley. It shows just how miserable the startup founder’s life is, and raises the question of why anybody would voluntarily subject themselves to such a thing. A large part of the answer is that Silicon Valley is gripped by a mass delusion, compounded by a deep “fake it til you make it” attitude toward success. Why do so many people in Silicon Valley want to be founders? Because every founder they meet is always killing it, crushing it, having massive success, just about to close a huge round, etc etc. At some level, they must know this is impossible: if 90% of startups fail, it simply can’t be the...more

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  • The Becker-Posner Blog

    Sabbatical Notice

    Starting this weekend, we will be taking a one-month sabbatical from blogging. We will resume at the end of that period.

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  • The Becker-Posner Blog

    The Embargo of Cuba: Time to Go- Becker

    The US embargo of Cuba began in 1960, a year after Fidel Castro turned this island toward communism. It was extended to food and medicines in 1962, the same year as the showdown with Russia over the installation of missiles there. The embargo has prevented American companies from doing business with Cuba, and discouraged tourism to Cuba. The American government also tried with quite limited success to prevent other countries from trading with Cuba. In general economic embargoes are undesirable because they interfere with free trade among countries. Yet a case could be made for an embargo against Cuba. Castro not only allowed Russian missiles to be installed in Cuba, just 90 miles from Florida, but was also actively trying to interfere in other countries by sending troop...more

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  • Stefan Karlsson's blog

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

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  • Stefan Karlsson's blog

    Ukraine Crisis Isn't Over

    So now the so-called protestors have overthrown democratically elected President Yanukovich in what is in effect a coup. It is unclear what will happen, and how Russia and Yanukovich and his supporters will act, but this is almost certainly not the end of it.Indeed, how could it be the end? Some people argue that protestors were motivated by anger over corruption and abuse of power from Yanukovich. But while Yanukovich is no doubt corrupt and some protestors may indeed have been motivated by anger over that fact, the opposition movement led by Yulia Tymoschenko is just as corrupt as Yanukovich, so if they prevail, that won't mean less corruption and abuse of power.No, what this conflict is really about is that today's Ukraine is an artificial state created by Soviet com...more

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  • Stefan Karlsson's blog

    How Old Posts Can Become Popular Again

    Suddenly, my post about why Ukraine should be divided between its anti-Russian and pro-Russian parts has seen a dramatic increase in page views. That is no doubt related to the latest escalation of Ukraine's political crisis with both government forces and the neo-Nazi elements of the opposition increasingly using violent means in the confrontation. Ukraine is dangerously close to a full scale civil war. Let's hope that it doesn't come to that. Ukraine has been ravaged for a century by wars, German Nazis, Communism, corruption and ethnic conflict, to add a(nother) civil war would be really cruel. I remain convinced that secession is the best way to solve the conflict peacefully....more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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  • International Political Economy at the University of North Carolina

    Why US Financial Hegemony Will Endure

    Will and I have a piece, now ungated, over at a fantastic new online magazine called Symposium. Our article translates much of the main points of our Perspectives Piece (co-authored with Thomas and Andy Pennock) for popular consumption. We are also blogging over there this week in support of the article. Please do check out our writing this week on the magazine's website, as well as the other great content on the site....more

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  • International Political Economy at the University of North Carolina

    Foreign Direct Investment, Human Rights, INGOs

    One of the major areas of underdeveloped research within political science is the interaction between non-state actors. From an international political economy perspective, the literature has largely ignored the interaction of various non-state actors that are growing in importance, and its effects on different forms of trade. In a recently published article "Avoiding the Spotlight: Human Rights Shaming and Foreign Direct Investment" by Colin Barry, Chad Clay and Michael Flynn, they lay the foundation for examining this interaction. They examine the interaction between non-state actors (INGOs) and multinational corporations (MNCs) and the extent to which private actors' choices to invest in countries are affected by the reputational costs of doing business in those...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

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  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

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  • International Political Economy at the University of North Carolina

    Verizon, Vodafone, and Measuring FDI

    Recently back from APSA in Chicago, I've been reflecting on the state of our knowledge about FDI (or perhaps more accurately, cross-border management stakes in enterprises). That, and working on my dissertation, applying for academic jobs, and teaching. Oh, and telling everyone who'll listen about my Optimus Prime sighting on Michigan Ave.Anyway, I find a post-conference review of the discipline is generally a good way to consider potentially fruitful lines of new inquiry. In my experience, the quality of papers at conferences can be rather hit-or-miss. This generally fits into my view of conferences as important sources of external deadlines for getting drafts done as well as interacting with other scholars in more informal settings such as the hotel bar/lobby/over-cro...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-09

    Given that I block NSA & PRISM tweets, was entertaining tuning into twitter & trying to figure why everyone was on about Lord Snowdon -> Turned on GoT tonight just in time to catch Daenerys reenacting her Level 2 YMCA gymnastics pageant. -> How Not to Be Alone | Jonathan Safran Foer – http://t.co/HMFxg75lfh http://t.co/DzAtvWBQJr -> Excellent, but fellow sports-med geeks only: Sports and exercise-related tendinopathies: a review – http://t.co/WGkhRlO6Uz -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-07

    Photo-set: Flooding Across Central Europe – http://t.co/8G6j8teCbd -> CDC Update: Severe Respiratory Illness Associated with Middle East Respiratory Syndrome Coronavirus – http://t.co/hWqN1338VN -> Col Flagg: Have you ever heard of Malaysian Chest Implosion Torture? Radar: No. Coll Flagg: Good. It hasn’t been invented… yet. -> tl;dr: There are Manchurian Candidate engineers at large tech cos that have stolen SSL root cert and NSA is using it for cattle mutilation. -> Brian: …Will you please listen? I'm not the Messiah! Do you understand? Honestly Woman: Only the true Messiah denies his divinity! -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-05

    FRED: Free Energy Data – http://t.co/90H7GVDazO -> Solipsisms ‘r’ us, courtesy of my friends at @thinkup: I apparently mention me a lot – http://t.co/9rTRXvBM9D -> Almost 10,000 words on soccer/Italy/economics/racism by @wrightthompson? Yes, & it’s super. Go. http://t.co/g4sgEFLkIC -> When The Beautiful Game Turns Ugly: A journey into the world of Italy's racist soccer thugs http://t.co/nckrbeLPfs -> Can’t remember last time I read an OpEd or column. Do those still exist? -> ...more

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • London Banker

    Chop Off Their Hands . . .

    President Truman famously called for a one handed economist. The Carolingian kings of France would have accommodated him. They realised that a kingdom required a common currency under the control of the king and well regulated markets to sustain the confidence of the people. At first mints were established widely, spread across the kingdom. Local barons began to profit from debasing the coinage, undermining confidence in the monetary system. So Charles the Bald established mints under his direct control and regulated the issue of coins: C.12. Following the custom of our predecessors, just as it is found in their capitularies, we decree that in no other place in all our kingdom shall money be made except in our palace, and in St. Josse and Rouen, which right in th...more

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  • The Street Light

    When the Fed Chair is an Academic

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

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  • London Banker

    For Want of a Nail, the Ship Was Lost

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

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  • London Banker

    Lies, Damn Lies and LIBOR

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

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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).

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