EconoMonitor

Economics Blog Aggregator

    Global Macro

  • Brad DeLong's Grasping Reality

    Links and Tweets

    Links: Duncan Wheldon: "Syriza has transformed from 'end austerity' to 'implement austerity in a left wing redistributionary way' to 'slightly tweak existing austerity'. That's quite a journey in a matter of weeks..." Joseph Cotterill: "It’s a Greek debt sustainability analysis by IMF staff... the frankest effort... so far to acknowledge the straits Greece is in regarding its debt to official creditors, and accordingly, their most radical proposal yet to euthanise large parts of that official debt..." Paul de Grauwe: "Accepting that the (restructured) Greek debt is sustainable opens the door to both a softening of the austerity programme and to liquidity support of the Greek banking sector..." Tweets: .@dsquareddigest 1. BtW, the more this develops the smart...more

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  • The Big Picture

    The Jewish Broker Who Saved America

    You know Hancock and Washington and Franklin and Jefferson. You might even know Greene and Knox, Henry and Hale. But it is very unlikely that you know the name Haym Solomon. This is unfortunate, because he’s the guy who arranged financing to keep the Continental Army alive during its darkest days, finding the money to keep the revolution going when many were ready to throw in the towel. He was also instrumental in the founding of the Bank of North America – the country’s first “national” bank. Solomon’s contributions to the war and the founding of the nation, though seldom discussed, were of major importance. Haym Solomon is born to a sephardic Jewish family in Poland in 1740. He travels widely through the banking and finance capitals of western Europe, lear...more

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  • Paul Krugman

    No, Puerto Rico Isn’t Greece

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  • Marc to Market

    A Look at the Condition of Prices that will Absorb the Greek Referendum Results

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  • Economist's View

    'Professor Hubbard’s Claim about Wage and Compensation Stagnation Is Not True'

    Larry Mishel: Professor Hubbard’s Claim about Wage and Compensation Stagnation Is Not True: ...A New York Times editorial points out ... that Glenn Hubbard, a leading conservative economist and key adviser to GOP candidate Jeb Bush, does not seem to believe there is a wage stagnation problem. As an earlier New York Times article pointed out: “Mr. Hubbard argued that ‘compensation didn’t stagnate,’ citing large increases that employers have paid out in health and pension benefits.” Hubbard is definitely mistaken, as the New York Times indicates and as I demonstrate below by examining actual wage and benefit trends. Shifting the discussion from wages to compensation (wages and benefits) does not alter any of the salient facts about stagnant pay in rece...more

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  • Economist's View

    'Stability of a Market Economy'

    "The macroeconomy is inherently unstable and ... booms and busts arise endogenously as the results of market incentives": Stability of a market economy, by Paul Beaudry, Dana Galizia, and Franck Portier, Vox EU: There are two polar views about the functioning of a market economy. On the one hand, there is the view that such a system is inherently stable, with market forces tending to direct the economy to a smooth growth path. According to such a belief, most of the fluctuations in the macroeconomy result from either individually optimal adjustments to changes in the environment or from improper government interventions. In such a case, the role of macroeconomic policy should be to do no harm; if policymakers hold back from actively influencing the economy, ...more

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  • Marginal REVOLUTION

    Saturday assorted links

    1. “Kids are too rebellious, he says. “A disciple is what you want.””  Is La Monte Young the greatest living composer? 2. Pete Sampras writes a letter to his 15-year-old self. 2. How companies really get valued. 4. Does Germany care about Greece more than America cares about Puerto Rico? 5. What would it cost to produce and order all of Wikipedia? 6. How do outsiders evaluate getting an economics PhD? ...more

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  • Beat the Press

    Just Because You Seek Does not Mean You Find: NYT Hypes Scare Stories on Obamacare

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  • Brad DeLong's Grasping Reality

    Weekend Reading: Steve Randy Waldman: Greece

    Steve Randy Waldman: Greece: "I’ll end this ramble with... ...a discussion of a fashionable view that in fact, the Greece crisis is not about the money at all, it is merely about creditors wresting political control from the concededly fucked up Greek state in order to make reforms in the long term interest of the Greek public. Anyone familiar with corporate finance ought to be immediately skeptical of this claim. A state cannot be liquidated. In bankruptcy terms, it must be reorganized. Corporate bankruptcy laws wisely limit the control rights of unconverted creditors during reorganizations, because creditors have no interest in maximizing the value of firm assets. Their claim to any upside is capped, their downside is large, they seek the fastest possible exit t...more

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  • The Big Picture

    You’re Only Human: Here’s How it Hurts Your Portfolio

    I recently had the privilege of sitting down for a chat with Richard Thaler, professor of the Booth School of Business at the University of Chicago. Thaler is widely recognized as the father of behavioral economics. He is perennially on the short list for a Nobel Prize in economics. His observations about how people behave in the real world are a welcome change from the basic assumptions of most economists. Thaler breaks down the world into two sorts of people: Econs, the artificial constructs of how people are supposed to behave. They are perfectly rational, have great self-control, calculate like machines and know exactly what is best for themselves. Then there are Humans, who do all of the things that traditional economic theory suggests they should not. They react...more

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  • Free exchange

    Throwing more money at homeowners

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  • Paul Krugman

    Insurance and Reaganomics

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  • Paul Krugman

    Back At My Desk (Personal)

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  • The Big Picture

    MiB: Leon Cooperman, Omega Advisors

    This week, on our Masters in Business radio podcast, we speak with Leon Cooperman of Omega Advisors. He studied for his MBA from Columbia University, where he became steeped in the methods of deep value investment. After earning his MBA, his began his career in the Investment Research department at Goldman Sachs in 1967. He stayed there for 22 years, eventually running the research department. Institutional Investor ranked him number one for Portfolio Strategy each year from 1977-1985. He then launched Goldman Sachs Asset Management in 1989. In addition to becoming CIO + CEO of GSAM,he was also the Investment Policy Committee and chairman of the Stock Selection Committee. After 25 years, Cooperman left Goldman to launch, launched Omega Advisors, now a 9.3...more

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  • Cafe Hayek - Article Feed

    Who’d a-Thunk It?

    (Don Boudreaux) TweetHere’s a letter to the New York Times: Your lead headline today reads “Health Insurers Seek Steep Increase in Plan Rates,” which is followed by this opening sentence in the report: “Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected.” Wow!  Who’d a-guessed that when government arranges for Dick and Jane to buy widgets using Bob’s and Ann’s money that Dick and Jane would buy more widgets, and become less sensitive to the price of widgets, than when spending only their own money – and that, in consequence, the price of widgets would rise?  How surprising! Sincerel...more

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  • Marginal REVOLUTION

    An Abandoned Space Ship

    Russian urban explorer and photographer Ralph Mirebs discovered an enormous, abandoned hangar in Kazakhstan. Inside were the remains of the Soviet space shuttle program. More amazing photos from the source here or from a secondary news piece here. ...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) Tweet… is from William Robertson‘s 1791 An Historical Disquisition Concerning the Knowledge Which the Ancients Had of India, as quoted on page 61 of the 1993 Revised Edition of John Kenyon’s excellent 1983 volume, The History Men (punctuation corrected to conform to Robertson’s original): It is a cruel mortification, searching for what is instructive in the history of past times, to find that the exploits of conquerors who have desolated the earth, and the freaks of tyrants who have rendered nations unhappy, are recorded with minute and often disgusting accuracy, while the discovery of useful arts, and the progress of the most beneficial branches of commerce, are passed over in silence, and suffered to sink into oblivion. At ...more

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  • naked capitalism

    Links 7/4/15

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  • naked capitalism

    Why Don’t Americans Take More Vacations? Blame It on Independence Day

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  • naked capitalism

    Old Economic Thinking is the Problem, Says BIS

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  • The Fabius Maximus website

    Independence Day Inspiration: make it meaningful!

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  • Marginal REVOLUTION

    China facts of the day

    Greece is small, China is large: The Shanghai Composite has now fallen 12.1 per cent since Monday, its third consecutive week of double-digit losses since hitting a seven-year high on June 12. The Shanghai index is firmly in bear market territory, down 28.6 per cent since the June peak, while the tech-heavy Shenzhen Composite has fallen 33.2 per cent. There were also signs on Friday that the stock market turmoil is beginning to reverberate beyond China. The Australian dollar, often traded as a proxy for China growth, is down 1.2 per cent to a six-year low of US$0.7539. The 21st Century Business Herald, a Chinese daily newspaper, on Friday quoted multiple futures traders as saying they had received phone calls from the China Financial Futures Exchange instructing them no...more

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  • Economist's View

    Links for 07-04-15

    Greece - interfluidity The ideologues of the Eurozone - mainly macro Did the IMF provide support to Syriza? - Antonio Fatas Greece is solvent but illiquid: Policy implications - Vox EU Thoughts on the news from Greece - Nick Rowe Mises’s Unwitting Affirmation of the Hawtrey-Cassel - Uneasy Money Why We Shouldn’t Pay for the Political Spending of... - Robert Reich Marginal product theory at work…not! - Jared Bernstein ...more

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  • Brad DeLong's Grasping Reality

    For the Fourth of July

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  • John Quiggin

    The IMF: An inexcusable, incorrigible failure

    Chris Berrtram at Crooked Timber has already pointed out the failure of the core European institutions in their response to the global financial crisis. One excuse that can be made for these institutions is that they are still in the process of development, and were ill-prepared, intellectually and institutionally, for an event so far outside their experience. The ECB and EC developed in a period when controlling inflation and stabilizing government debt were the key imperatives, and they responded to the crisis accordingly. No such excuse can be made for the third member of the Troika, the International Monetary Fund. The IMF has understood from the start that the austerity policies it has imposed are economically unsound and a repetition of past failures. And yet it...more

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  • VoxEU.org: Recent Articles

    The market economy’s stability

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  • VoxEU.org: Recent Articles

    Currency is not destiny

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  • VoxEU.org: Recent Articles

    The corporate debt bias and the cost of banking crises

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  • Econbrowser

    We Don’t Need No Stinkin’ Open Records Laws (in Wisconsin)

    [And Republicans refuse to identify lawmaker behind measure restricting access to legislative records] I guess William Cronon won’t have to worry any more about having his emails scoured by the Wisconsin GOP. From the Wisconsin State Journal: Legislative Republicans on Thursday passed sweeping changes to the state’s open records law that would dramatically curtail the kind of information available to the public about the work that public officials do. The proposal blocks the public from reviewing nearly all records created by lawmakers, state and local officials or their aides, including electronic communications and the drafting files of legislation. The language was included in the final version of the state’s 2015-17 budget, which passed the Legislature...more

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  • International Political Economy Zone

    PRC Stock Plunge as Western Conspiracy + Bet Yer House

    Easy come, easy go: Welcome to the Shanghai bourse, world's biggest casino.The death spiral in Chinese stocks continues, with the Shanghai Composite whose chart is above dropping another 5.77% on Friday. Since peaking in mid-June, an astronomical $3.7 trillion has been wiped out in stock market capitalization, with the index falling 30% in the space of a few days. Continuing from the theme in the post below, PRC authorities have, in sheer desperation, tried everything to no effect:Beijing seems to be doing everything it can to support the bull market. The People’s Bank of China cut interest rates last weekend. The Ministry of Finance said China’s massive $500 billion pension fund would march into the stock markets. The securities regulator CSRC repeatedly came out ...more

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  • TIME

    Reddit’s Ellen Pao and Alexis Ohanian Explain Site Shut Down

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  • Beat the Press

    WaPo Says Europe Doesn't Have Robots: More Complaints from the It's Hard to Get Good Help Crowd

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  • The Fabius Maximus website

    STRATFOR gives A New Way to Think About Mexican Organized Crime

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  • Cafe Hayek - Article Feed

    Pierre Desrochers Busts Locavore Myths

    (Don Boudreaux) TweetI just re-watched Pierre Desrochers presentation – at Cato in June 2012 – on “buy local” myths.  It’s superb: fun, fact-filled, and informative.  Because I believe that I inexcusably failed earlier to post this video on Cafe Hayek, I share it now.  (Pierre is the co-auther, with his wife Hiroko Shimizu, of The Locavore’s Dilemma – a truly wonderful book.) ...more

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  • TIME

    JetBlue Launches Direct Flights From New York to Cuba

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  • Beat the Press

    Greece and Puerto Rico

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  • International Political Economy Zone

    BRICs Illusion: Western Banks' Exodus from Brazil

    Adios HSBC in Brazil; we hardly knew ye.There was a time when Brazil, Russia, India and China or the BRICS were all the rage, and MNCs felt they had to have a presence in these countries. Unfortunately, we all know what's happened since. Consider China and Brazil in particular: China has slowed down tremendously as its export-driven economy has reached its limits and saturation of the world market with PRC-made goods has set in. As a result, Brazil's resource-dominated exports have found fewer and fewer Chinese takers. Being a fairly undiversified economy, Brazil has slown down and even gone into reverse. Recent news that HSBC--which once had an ad campaign styling itself as "The World's Local Bank"--was essentially giving up retail banking in Brazil means that nearly a...more

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  • International Political Economy Zone

    America & China: Flipsides of Economic Desperation

    America: Where Nobody Wants to Work (What, Me Get a Job?)If there is an even better metaphor for subprime globalization's follies, I have yet to find them. So we are led to believe that the US and China are the world's largest economies. However, recent news paints both in a negative light in terms of being able to do something about their desperate situations.Let us start with the US. Because of the Fourth of July holiday weekend, the jobs report which usually comes out on the first Friday of the month containing data on the prior month was released today. Lo and behold, the glorious Bushbama years have bombed America's labor situation back to 1977, with MarketWatch featuring Star Wars to reinforce this point as a 62.6% labor force participation rate has not been seen ...more

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  • Free exchange

    Greek tragedy

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  • TIME

    You Might Soon Be Able to Verify Online Purchases With a Selfie

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  • Marc to Market

    Four Developments to Note while the US is on Holiday

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  • Greg Mankiw's Blog

    Best of Enemies

    I recently had the pleasure of seeing several films at the Nantucket Film Festival.  My favorite was Best of Enemies, a documentary about the TV debates between William Buckley and Gore Vidal during the 1968 presidential nominating conventions.  It is being released later this month.  Here is the trailer:  ...more

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  • The Fabius Maximus website

    Martin van Creveld asks who will stop the Monster, the Islamic State?

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  • Worthwhile Canadian Initiative

    Thoughts on the news from Greece

    This is just to record my thoughts, so I can look back on this and see what I got right and what I got wrong. Or at least, what I changed my mind about. The Euro was a mistake. I hoped (and still hope)  to see the Euro dissolved. But the Euro is now stronger than before. With enemies like Syriza, the Euro does not need friends. The government of Greece made a bad situation (that was maybe slowly improving a little) worse. And it will get much worse in the future, regardless of the vote in the referendum. If this is what an exit from the Euro looks like, who would want to follow Greece in exiting the Euro? And the perceived willingness of the ECB to do open market operations was probably what nullified the Greek threat to destroy the Euro unless it got what it want...more

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  • Econbrowser

    The International Aspects of the Employment Release

    The headline number for nonfarm payroll employment was decent [1], and although there are worrisome aspects, I think the key take-away is the fact that manufacturing employment is slowing much more than overall. To the extent that manufactured goods proxies for tradables, I think caution is in order with respect to monetary tightening. And yet, I read headlines reporting that the “Fed is on track to raise rates…”[Sparshott/RTE WSJ]. My argument for deferring monetary tightening follows this sequence. The dollar’s surge coincides with manufacturing employment slowdown. The manufacturing slowdown is even more evident in other measures. The dollar’s movements seems well explained by monetary policy. Figure 1 illustrates the remarkable su...more

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  • Marc to Market

    Emerging Markets: What has Changed

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  • Greg Mankiw's Blog

    A Common Error in Pedagogy

    I happened to be flipping through another introductory economics textbook. (Yes, some people have the temerity to try to compete with my favorite textbook.) I noticed an error that is, unfortunately, all too common in how introductory economics is taught.  I won't mention which book it is, because I am quite fond of the authors, and because my goal here is not to pick on one particular book but rather to draw attention to a more pervasive problem.The issue is how one applies welfare economics to understand price controls, such as rent control and minimum-wage laws.The sin that this book makes is to look at consumer surplus, producer surplus, and deadweight loss as if we were studying the welfare cost of a tax. The cost of a price control, t...more

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  • CIPE Development Blog

    Carrying Crude Oil to Newcastle: The Resource Curse Strikes Again in Nigeria

    On May 20th, 2015 the lights went out in Nigeria, Africa’s biggest oil producer. Nigeria suffers from a phenomenon known as the curse of oil which is a subset of a larger issue known as the resource curse. The idea behind the curse of oil is that countries with large oil reserves cannot seem to manage revenues in a way that benefits the majority of the population economically and socially. Some... ...more

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  • Free exchange

    Is it working yet?

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  • The Skeptical Speculator

    US stock valuations "can't be supported" if interest rates rise

    US stocks look expensive, according to Jim Rothenberg, chairman of Capital Group Companies. In an interview with FinanceAsia, he said that US companies are trading at 17-19 times earnings. "If you hypothesise higher interest rates, those valuations can't be supported," he said. Nobel Prize-winning economist Robert Shiller also thinks US stocks are expensive. He recently told CNBC that his cyclically adjusted price-to-earnings ratio "is higher than it's been, except 1929, 2000 and 2007", all of which were years that were followed by large market losses....more

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  • John Quiggin

    Economists call on climate change policy

    I’ve just signed a statement drawn up by a group of economists from the Toulouse School of Economics and the Université Paris-Dauphine, in advance of the current COP21 international negotiation. The aim of the statement is to encourage the parties to aim for a more comprehensive and economically effective agreement that would ultimately supersede the patchwork of voluntary commitments being put forward at present. While the commitments being made for COP21 represent a huge advance on the vague aspirations that emerged from Copenhagen, we should not lose sight of the ultimate goal of decarbonizing the global economy in a way that minimizes the economic costs by taking advantage of the power of price mechanisms. From an Australian viewpoint, the most important part o...more

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  • CIPE Development Blog

    World Chambers Congress focuses on SMEs and Job Creation

    Under the banner of “Identity, Community, Vision,” over 1,300 delegates from around the world gathered in Turin, Italy on June 10 to attend the World Chambers Congress. The main focus of the three day event was how to strengthen small and medium enterprises (SMEs) worldwide to create jobs. Organizers focused on the need to create enabling environments for these businesses to grow and prosper –... ...more

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  • iMFdirect - The IMF Blog

    “To Lean or Not to Lean?” That is the Question

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  • Worthwhile Canadian Initiative

    Bank of Canada Governors and Economic Performance: A Canada Day Celebration

    Another Canada Day, another year of Confederation – we are now 148 years old– and another opportunity for taking a historical look at some economic aspects of Canada. For your Canada Day musings, I decided to take a look at economic indicators according to the tenure of Bank of Canada Governors since 1934 (the legislation was passed in 1934, the institution opened its doors in 1935) – when our venerable central Bank began its operations. As you can learn at the Bank of Canada’s own website, the Bank of Canada is the nation’s central bank and its principal role is “to promote the economic and financial welfare of Canada” as defined in the Bank of Canada Act.  The bank’s major areas of responsibility are monetary policy, promoting a safe and sound f...more

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  • Worthwhile Canadian Initiative

    The Bank of Canada's "stitch in time"

    Steve Poloz is good at economics, but not always so good at finding the best metaphor. Greg Quinn says "Bank of Canada Governor Stephen Poloz said his “controversial” decision to cut interest rates in January could be compared to life-saving surgery for the economy and any resulting increase in household debt should be viewed as a necessary side effect." A better metaphor would use the old proverb "a stitch in time saves nine". (If you delay stitching a tear in your jeans, the tear will get bigger, and you will need even more stitches later.) If the Canadian economy did need a cut in interest rates in January, a delay would have weakened the economy more and more over time, requiring the eventual cut in interest rates to be even bigger. So if the...more

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  • The Skeptical Speculator

    Markets fall, face summer of discontent

    Markets fell on Monday following last week's failure to resolve the Greek debt crisis and as the country shut lenders and imposed capital controls. The S&P 500 fell 2.1 percent while the STOXX Europe 600 fell 2.7 percent. Yields on US 10-year Treasuries fell 15 basis points to 2.33 percent while yields on 10-year Greek bonds surged 423 basis points to 15.08 percent. The euro fell against the yen but managed to recover from early losses against the US dollar. While Monday's decline left the S&P 500 down 0.1 percent for 2015, Mark Hulbert says that Greece by itself is too small to have much impact on the global markets. Ron Insana agrees, but points out that with China's stock market tumbling, Puerto Rico also having debt repayment problems and the Federal Reserve poised ...more

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  • John Quiggin

    Happiness and unhappiness

    I have a chapter in a newly released book on happiness, extracts of which have been published in The Conversation. My argument, summed up as Measures of happiness tell us less than economics of unhappiness, is a reworking of points I’ve made in the past. In particular, I argue that it’s more useful to think about removing avoidable sources of unhappiness, and that has been the great success of social democracy and the welfare state. ...more

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  • Econbrowser

    Guest Contribution: “Macroeconomic Effects of High-Frequency Uncertainty Shocks”

    Today, we are fortunate to have a guest contribution written by Laurent Ferrara (Banque de France and University Paris Ouest Nanterre La Défense) and Pierre Guérin (Bank of Canada). The views expressed here are those of the authors and do not necessarily represent those of the Banque de France or of the Bank of Canada. Macroeconomic and financial uncertainty is often considered as one of the key drivers of the collapse in global economic activity in 2008-2009 as well as one of the factors hampering the ensuing economic recovery (see, e.g., Stock and Watson (2012)). While it has long been acknowledged that uncertainty has an adverse impact on economic activity (Bernanke (1983)), it is only recently that the interest in measuring uncertainty and its effec...more

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  • Greg Mankiw's Blog

    A Primer on the Greek Crisis

    My friend Anil Kashyap summarizes what's been happening.

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  • The Skeptical Speculator

    Greece sends markets into turmoil, Chinese stocks plunge

    The decision by Greek Prime Minister Alexis Tsipras to put the bailout plan to a referendum has caught investors on the wrong foot. From Bloomberg: For Europe stock traders who went all-in last week speculating on a Greek resolution, it’s time to rethink the strategy. U.S. stock-index futures tumbled, and gains that pushed the Euro Stoxx 50 Index up 4.8 percent, including the largest one-day rally in three years, are at risk after Prime Minister Alexis Tsipras said he would put terms of the Greek bailout to voters. A Capital Markets Commission official said the Athens Stock Exchange will remain shut on Monday. It’s a measure of how rapidly sentiment has shifted that the latest breakdown followed a week in which Greek shares posted their biggest increase since 2008, ...more

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  • CIPE Development Blog

    Enhancing Youth’s Political Participation in Pakistan

    Internationally, the average age of eligibility for election to national parliament starts at 25 years old. According to a UNDP 2012 Global Parliamentary Report, approximately 1.65 percent of parliamentarians globally are in their 20s, while 11.87 percent are in their 30s. However, the global average age of parliamentarians is 53 years old. In Pakistan, youth represent 60 percent of the total... ...more

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  • iMFdirect - The IMF Blog

    U.S. Monetary Policy: Avoiding Dark Corners

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  • iMFdirect - The IMF Blog

    Inequality’s Toll on Growth

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  • 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

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  • Alpha.Sources

    Stretching monetary policy divergence to an extreme?

    In this podcast I discuss the durability of monetary policy divergence between the Fed and, increasingly, the rest of the world. How far can this story be stretched, what narrative will win in the tug-of-war between hawks and doves. Unfortunately, I think it could turn out to be former. Finally, I discuss the case of the evaporating liquidity in bond markets, and why it matters.  ...more

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  • 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

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  • 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

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  • 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

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  • 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

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  • Smart Economy

    Oxidative stress and Cancer Metastasis

    Oxidative stress and Cancer Metastasis Research has shown that 90% of all cancer deaths are due to cancer metastasis. Cancer can only spread in the body when we have an environment of excess free radicals or oxidative stress. An ultra-high, universal, antioxidant like Carbon 60 hydrated fullerenes neutralize free radicals and prevent cancer metastasis.   Factsheet #6 Link between Oxidative Stress, Free Radicals and Cancer v4   https://www.academia.edu/12211177/Factsheet_6_Link_between_Oxidative_Stress_Free_Radicals_and_Cancer_v4 ...more

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  • Smart Economy

    Longevity and Healthy Aging

    Aging Gracefully without Chronic Human Diseases Time Magazine and National Geographic both recently ran cover stories with a baby on the cover. The tagline reads: This baby could live to be 142 years old. So the question that immediately comes to mind  is: Is this possible  and can everyone age gracefully without chronic human diseases? And can we do it with today’s technology ? To explore this question we first need to compare the mortality in 1900 versus today. In 1900, half of the deaths were caused by pneumonia, influenza, tuberculosis, gastrointestinal infections.  These diseases were cured largely with antibiotics and antivirals after world war two. Cancer, diabetes, coronary  heart disease, and Alzheimer’s were present but  not near the rates we see tod...more

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  • Smart Economy

    Aging Gracefully without Chronic Human Diseases

    I’m adding  a link to a presentation I gave last week to a group of seniors at the Ukrainian Canadian Social Services –Toronto Branch on Aging Gracefully without Chronic Human Diseases.  It’s designed for a non-technical,  layperson audience. You can download it from the link below.   https://www.academia.edu/12124838/Aging_Gracefully_without_Chronic_Human_Diseases_v4_UPDATED_   Enjoy and Comments Welcomed   Walter  Derzko Toronto ...more

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  • 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

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  • Alpha.Sources

    To Default or not to Default

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

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  • 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

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  • 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

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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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  • 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

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  • 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

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  • 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

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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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  • 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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  • 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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  • 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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  • 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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  • 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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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.