EconoMonitor

Economics Blog Aggregator

    Global Macro

  • The Big Picture

    Performance fee baloney.

    The Banker’s Umbrella began in January of 2013, and as it turns out it seems to have become rather popular. The Banker’s Umbrella is loved by many and hated by a few. Not bad for one (former) banker and a laptop. ~~~ Performance fee baloney. You know that look teenage kids give their parents at least twice a day? You know the one I mean. The “Oh no mom, not again! I’ve heard it a million times” look. Yes that one. As a private banker I’ve been in countless situations when I’ve had to suppress that look when meeting a certain type of potential clients So what’s that certain type of potential client, you ask? Well, it’s when a prospective client asks you if you can offer them an investment advice that is based on a performance only fee. This q...more

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  • naked capitalism

    Links 12/22/14

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  • Marc to Market

    Dollar Consolidates Gains, Oil Steadies, Rouble Recovers

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  • Economist's View

    Paul Krugman: Conquest Is for Losers

    War. What is it good for?: Conquest Is for Losers, by Paul Krugman, Commentary, NY Times: More than a century has passed since Norman Angell, a British journalist and politician, published “The Great Illusion,” a treatise arguing that the age of conquest was or at least should be over. He didn’t predict an end to warfare, but he did argue that aggressive wars no longer made sense — that modern warfare impoverishes the victors as well as the vanquished. He was right, but ... Vladimir Putin never got the memo. And neither did our own neocons, whose acute case of Putin envy shows that they learned nothing from the Iraq debacle. Angell’s case was simple: Plunder isn’t what it used to be. You can’t treat a modern society the way ancient Rome treated a conquer...more

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  • Fabius Maximus

    Why do we believe, when the government lies to us so often? When we change, the government also will change.

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  • International Political Economy Zone

    Can Modi Break Indian Coal Miners' Balls?

    It's Thatcher time for N. Modi.(Cue the AC/DC before proceeding.) The make-or-break moment for new Indian Prime Minister Narendra Modi is at hand: Part of the process ushering in modern Britain--"neoliberalization" its critics would label it as a term of abuse--is the marginalization of organized labor. Similar things happened in the United States that set the shape of things to come as organized labor has been ground small all over the world. However, the defining moment remains Britain's showdown three decades ago. It was the Iron Lady Margaret Thatcher versus Arthur Scargill, leader of the coal miners who obviously did not want any "downsizing", "rightsizing", "rationalization" or any other modern euphemisms for closing down the money-losing coal industry. Revisit th...more

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  • Beat the Press

    The Two Percent Inflation Trap

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  • The Big Picture

    How Has the Bankruptcy Act Affected Bankruptcy Filings?

    How Has the Bankruptcy Act Affected Bankruptcy Filings? By Juan M. Sánchez, Senior Economist     ©Thinkstock/bobbushphoto   It is well known that the number of non-business bankruptcy filings increased dramatically during the ‘80s and ‘90s. This period has been referred to as the “revolution in consumer credit and consumer bankruptcy,”1 as the number of Chapter 7 bankruptcy filings increased more than fivefold from 1983 to 2004. This process, which is associated with the decline in the cost of information,2 ended with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. In short, BAPCPA made bankruptcy filings more costly and more limited to low-income households. We focused on the evolution of the number of bankruptcy f...more

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  • naked capitalism

    Why is No One Fighting the New Robber Barons?

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  • International Political Economy Zone

    Cuba Stories: Venezuelan Oil, Buena Vista Social Club

    Some Buena Vista Music Club musicians are gone but not forgotten.I actually watched Obama's announcement that the United States has entered a process of normalizing relations with Cuba. As something I've been wishing for a long time, I'm glad it's finally come. Let's face it: at a time when the United States has long since normalized relations with the likes of China and Vietnam, it seems odd that it has held out on doing the same with "Communist" Cuba--especially since it's so much closer to the US. The Cold War's long since been finished, mates, and it's time that both sides realized this.Now, there are two interesting side stories to the (eventual) lifting of sanctions against Cuba by the United States. First is the notion that the self-destruction of Venezuela amids...more

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  • International Political Economy Zone

    Macau's Evolution: Life Beyond Gambling

    Xi says it's time for the shifting Sands.By now everyone is aware that Macau is by far the world's largest gambling destination, dwarfing Las Vegas in terms of gaming revenues. Las Vegas only earns one-seventh of its revenues at this point. Yet, for all this success in attracting gamblers--high-rollers especially--there are downsides. The recent crackdown on PRC officialdom using state funds to gamble in Macau, initiated by President Xi Jinping, has resulted in a rather severe deterioration in the fortunes of casino operators in Macau? How severe, you ask? Try wiping out $75 billion in market capitalization, for starters:Xi, who arrived today to mark the 15th anniversary of the former Portuguese enclave’s return to Chinese rule, is the man responsible for the two-ye...more

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  • naked capitalism

    Christie Allies Offer Dubious Defenses for Payments Made to His Wife’s Firm

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  • Economist's View

    Fed Watch: Asked and Answered. Mostly.

    Tim Duy: Asked and Answered. Mostly, by Tim Duy: Last week I had six questions for Federal Reserve Chair Janet Yellen. Here is my attempt to piece together the answers from her post-FOMC press conference: Question 1: If you want to know what the Fed is thinking at this point, a journalist needs to push Yellen on the secular stagnation issue at next week's press conference. Does she or the committee agree with Fischer? And does she see any inconsistency with the SEP implied equilibrium Federal Funds rates and the current level of long bonds? Yellen, in answer to Peter Coke of Bloomberg Television: "(The Committee) are optimistic that those conditions will lift. They see the longer-run normal level of interest rates as around 3-3/4 percent. So there's no...more

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  • Economist's View

    Links for 12-22-14

    Do falling oil prices raise the threat of deflation? - Econbrowser Language games and expectations of "doing nothing" - Nick Rowe Stranger Things Have Happened = Economic Principals  Inflation at the Zero Lower Bound - Stephen Williamson Migration and network effects: Friends vs acquaintances - Vox EU John Stuart Mill on Being Offended - Miles Kimball ...more

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  • Marginal REVOLUTION

    Today is groundbreaking day for Nicaragua’s canal with China

    Nicaragua plans to begin building access roads and highways on Monday near the country’s Pacific coast as it starts work on a $50 billion inter-oceanic canal meant to rival Panama’s century-old waterway. …At an estimated cost more than four times the size of Nicaragua’s $11 billion economy, the project has raised doubts among analysts who point to HKND’s lack of experience in major infrastructure projects and question the need for another Central American canal. Panama is planning to complete a $5.25 billion expansion of its waterway next year. “I think there is some skepticism about it getting built and getting built on time and on budget,” said Lee Klaskow, a marine shipping analyst with Bloomberg Intelligence. “There are a bunch of active volc...more

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  • VoxEU.org: Recent Articles

    Liquidity-driven foreign direct investment

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  • VoxEU.org: Recent Articles

    Beyond Basel III

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  • Brad DeLong's Grasping Reality...

    Liveblogging World War II: December 22, 1944: Malmedy

    World War II Today: 21 December 1944: Malmedy--lone infantryman beats off Panzers: It was in Malmedy that Sergeant Francis Sherman ‘Frank’ Currey in the 3rd platoon of Company K, 120th Infantry Regiment, 30th Infantry Division found himself in charge in the early hours of the 21st December. The attack towards K Company’s roadblock began as an infantry attack. There was no artillery preparation, in fact, no artillery support at all. When the advancing enemy infantry got within three or four hundred yards of the roadblock’s outpost, they were discovered and fired upon. A spirited firefight immediately developed. Under the cover of machine gun and direct fire, the attackers advanced and took possession of a house in the vicinity of the ...more

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  • Brad DeLong's Grasping Reality...

    Weekend Reading: Rick Perlstein in Democracy Journal on Why Jacob Weisberg's Reviewing License Should Be Withdrawn

    Over at Democracy Journal: Rick Perlstein: The Reason for Reagan, Democracy Journal: Understanding Ronald Reagan requires looking beyond clichés to the cultural climate of the time. A response to Jacob Weisberg: In 1980, the year Ronald Reagan won his first landslide presidential victory, pollsters at National Opinion Research Corporation asked Americans whether they thought, as Reagan did, that ‘too much’ was being spent on welfare, health, education, environmental, and urban programs. Only 21 percent did—the same percentage as had answered that way in 1976. The number that favored ‘keeping taxes and services about where they are’ was a healthy plurality, 45 percent—the exact same result as in 1975. READ MOAR The Chicago Council on Foreign Relat...more

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  • The Skeptical Speculator

    Stocks rally but also face risks

    Stock markets mostly rose last week. The MSCI All-Country World Index rose 2.3 percent, led by stocks in the United States and Europe. The Standard & Poor’s 500 Index jumped 3.4 percent while the STOXX Europe 600 Index rose 3.0 percent. Asia underperformed last week, with the MSCI All-Country Asia Pacific Index slipping 0.2 percent. However, the Shanghai Composite Index jumped 5.8 percent to close at a four-year high. While the rally last week left the S&P 500 just 5 points below its all-time high achieved on 5 December, some investors are seeing danger in the sudden rally. A post from the Wall Street Journal's Moneybeat blog over the weekend pointed out that the recent rally may have been the result of fund managers buying stocks to make their funds look good. “If ...more

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  • Brad DeLong's Grasping Reality...

    Noted for Your Nighttime Procrastination for December 21, 2014

    Over at Equitable Growth--The Equitablog Heather Boushey: You Can’t Help Today’s Middle Class with 1930s-Era Policies Nick Bunker: Weekend Reading Nauro Campos: The Riddle of Argentina William H. Davidow and Michael S. Malone: What Happens to Society When Robots Replace Workers? Plus: Things to Read at Night on December 21, 2014 On Twitter: Tech Words That Should Not Be (with images, tweets) · delong · Storify Marxism vs. Liberalism vs. Conservatism (with image, tweets) · delong · Storify Must- and Shall-Reads: Scott Lemieux: "The only two presidents who can even arguably been said to have presided over a more substantial body of progressive policy-making in the last century are FDR and LBJ, and both did so in significantly more favorable contexts...more

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  • The Big Picture

    Forest Man

    Since 1979, Jadav Payeng has been planting hundreds of trees on an Indian island threatened by erosion. In this film, photographer Jitu Kalita traverses Payeng’s home—the largest river island in the world—and reveals the touching story of how this modern-day Johnny Appleseed turned an eroding desert into a wondrous oasis. Funded in part by Kickstarter, “Forest Man” was directed by William Douglas McMaster and won Best Documentary for the American Pavilion Emerging Filmmaker Showcase at the Cannes Film Festival in 2014. India Man Plants Forest Bigger Than Central Park to Save His Island See more from the filmmaker. http://polygonwindowproductions.com/ See more photos of the world’s largest river island. http://yourshot.nationalgeographic.com/tags...more

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  • iMFdirect - The IMF Blog

    What Happens to Public Health Spending in IMF-Supported Programs? Another Look

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  • Worthwhile Canadian Initiative

    Language games and expectations of "doing nothing"

    If I make one very trivial change to Paul Krugman's model of a temporary liquidity trap, I can change the results, so that the central bank can use current monetary policy to return the economy to full employment, even if it cannot make credible commitments about future monetary policy. I am going to change the notation. Let me introduce a new variable m(t), which is defined as Paul's "M(t)-M(t-1)". So m(t) is simply the change in the stock of money relative to the previous period. (Or, if you prefer, define m(t) as "log[M(t)]-log[M(t-1)]", so that m(t) is the growth rate of the money supply relative to the previous period.) Paul assumes that in period t the central bank chooses M(t). In my new notation, I assume that in period t the central...more

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  • TIME

    Dish Network Drops Fox After Failed Contract Negotiations

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  • Marginal REVOLUTION

    What is going on with Greek debt right now?

    From Paul Mason, here is the summary bit: So a worst-case scenario under a Syriza victory is: short-term repayment crisis, botched negotiations with the EU, social upheaval, capital flight and default. A best-case scenario – for Syriza – would see its EU allies force a long-term debt deal, but it would have to ride out and tactically manoeuvre on the 2015 debt repayments, as suggested above, and there would still be massive social upheaval. Most of the post is more detailed, and considers possible debt scenarios, clear and useful throughout, a good way to get up to speed on the Greek situation again. ...more

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) The Institute for Justice – a special and genuine force for significant good in the U.S. – just published its superb Entrepreneur’s Survival Guide. I thank the many of you who sent to me Michael Moynihan’s excellent essay “Castro’s Hipster Apologists Want to Keep Cuba ‘Authentically’ Poor.”  A slice: Flickering across my computer screen, elements of the left were uniting with elements of the right, insisting that Cuba remain in the cold, a museum of the Cold War isolated from both the glories and evils of American culture. One lefty tweeter even complained that an invasion of icky American tourists would undermine “family values” in Cuba. There are, of course, already tourists clotting Cuban bea...more

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  • Beat the Press

    The Profit on the TARP and Bernie Madoff

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  • Marc to Market

    The Week Ahead in Five Points

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  • Marginal REVOLUTION

    Assorted links

    1. Should you publish a book with too many hyphens? 2. Japan Senior Cheer Association (mostly video), and more here. 3. Kangaroos against drones. 4. It’s odd that such a category even exists (“Top 10 feminist fiascoes of 2014″).  This is a good example of how media focus on events which raise or lower the status of particular groups, rather than focusing on events which actually impact human welfare. 5. The roots of a walkable Tysons community? ...more

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  • Greg Mankiw's Blog

    Getting a Raise from Vladimir Putin

    An American expat reflects on the falling value of the ruble.

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  • Econbrowser

    Do falling oil prices raise the threat of deflation?

    The spectacular drop in oil prices means that inflation is going to fall even further below the Fed’s 2% target. Does that raise any new risks for the economy? I say no, and here’s why. Year-over-year percent change in the monthly deflator for personal consumption expenditures. Source: FRED. In economists’ theoretical models, inflation usually is often thought of as a condition in which all wages and prices move up together by the same amount. For a given nominal interest rate, the lower inflation, the higher is the real cost of borrowing. With the short-term nominal interest rate still stuck at zero, a decrease in inflation could discourage spending, something the Fed would rather not see happen in the current situation. Or so the theory goes. ...more

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  • Beat the Press

    China and the United States: Who Is Number One?

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 302 of the late Thomas McCraw’s excellent 1984 volume, Prophets of Regulation: On balance, however, it seems clear that the concern about legal process has controlled the outcome of regulation more often than has the concern about the substance of economic efficiency.  In economists’ language, this means that the concern for equity has generally triumphed over the quest for efficiency…. Overall, the conclusion appears inescapable that regulation in America has more often functioned as a protective device rather than as a promotional or developmental one. The above observation from McCraw appears in his summing up of his conclusions from a study of over a century of regulatory policy in the United States.  McCraw f...more

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  • VoxEU.org: Recent Articles

    Migration and network effects: Friends vs acquaintances

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  • Fabius Maximus

    The FBI told their story about North Korea attacking Sony. Before we retaliate, read what they didn’t tell you.

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  • John Quiggin

    From Montreal to Lima

    My latest in Inside Story, on the tortuous path to global action on climate change

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  • Greg Mankiw's Blog

    The Peltzman Effect

    My friend Allen Sanderson points out these headlines in today's Wall Street Journal:Safety Gear Helps Reduce U.S. Traffic Deathsand Cities Target Elevated Levels of Pedestrian DeathsAs Sam Peltzman pointed out years ago, when cars get safer, drivers are less careful, increasing externalities on pedestrians....more

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  • TIME

    Staples Estimates Hackers Breached 1.16 Million Credit Cards

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  • Free exchange

    The road to nowhere near Wigan Pier

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  • Paul Krugman

    More Macro Modeling Meta

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  • TIME

    Gas Stations in 24 States Drop Prices to $2 a Gallon

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  • Marc to Market

    Dollar Bulls Regain Upper Hand

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  • Cafe Hayek - Article Feed

    Slave to a Myth

    (Don Boudreaux) Here’s a letter to the Chronicle of Higher Education; (thanks to Lyle Albaugh and George Leef for alerting me to this Beckert essay) : Sven Beckert struggles to portray slavery as essential to the origins of capitalism (“Slavery and Capitalism,” Dec. 12).  His core argument, it seems, boils down to this: slavery existed at the time of the industrial revolution; textile production was the leading activity of that revolution; textile mills used lots of “cheap, slave-grown cotton” from the U.S.; therefore, slavery was necessary for the creation of capitalism. Problems aplenty infect Prof. Beckert’s narrative, but none more fatally than his presumption that using slaves to grow cotton made that commodity especially “cheap” (and, thus,...more

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  • Paul Krugman

    The Oz Effect

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  • Worthwhile Canadian Initiative

    Monetary policy is always and everywhere about expectations

    Paul Krugman is frustrated because people aren't taking his model of the liquidity trap seriously. OK, let me take it seriously. Suppose Paul's model is 100% true. And suppose that Paul's model economy is humming along nicely, at full employment, and everyone in the model expects it to continue humming along nicely, at full employment, forever. Then the central bank does something stupid. At the beginning of period 1, it announces that the period 2 money supply will be cut by (say) 10%, and will stay at that lower level forever. And suppose people believe that announcement. In period 1 the economy hits a liquidity trap, and there's unemployment. And Paul would say there is absolutely nothing the central bank can do in period 1 to let the economy escape t...more

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  • John Quiggin

    The fossil fuel crash of 2014

    Among the unforeseen (by me, at any rate) events of 2014, the collapse in the price of crude oil may be among the most significant. Prices have fallen from more than $100/barrel in mid-2014 to around $60/barrel today. This follows a more gradual fall in the price of coal. The thermal coal price peaked at $140/tonne in 2011 and has now fallen to around $70/tonne. Prices for metallurgical coal and iron ore have also collapsed. What should we make of this? The big questions are (i) to what extent does the price collapse reflect weak demand and to what extent growing supply (ii) will these low prices be sustained, and if so, what will be the outcome. The answer to the first question seems to be, a mixture of the two, with some complicated lags. Strong demand growth (briefly...more

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  • Fabius Maximus

    The polls tell us America is a Christian nation, with a Republican, Creationist, pro-torture heartland

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  • Paul Krugman

    Friday Night Music: The Roches, Winter Wonderland

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  • CIPE Development Blog

    Giving Women a Voice in Pakistan’s Media

    It is widely accepted by development experts that women are a largely untapped source of potential around the world. Women constitute approximately 50 percent of the human population and whether talking about political, economic, or social development, they have the ability to contribute vast advancements. However, in many countries around the world, women are excluded from participating in... ...more

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  • CIPE Development Blog

    Entrepreneurial Training Programs for Bahraini Youth

    In Bahrain, young people – those under 25 years of age – make up nearly half of the population. To create enough jobs for Bahrain’s youth, entrepreneurs and aspiring businesspeople will need to equip themselves with the necessary skills that will allow them to thrive in a dynamic global economy. A number of entrepreneurship initiatives have grown up to respond to this need. These include programs... ...more

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  • Worthwhile Canadian Initiative

    Helicopter money is normal, or else we're doomed!

    With one exception, Tony Yates strikes me as being a very sensible and very good money/macro economist. But at the mention of "helicopter money", he seems to turn into an Old Testament prophet, or maybe Private Frazer from Dad's Army, saying "We're doomed, I tell ye!" (or maybe this longer video makes my point better). (That's my payback for Tony calling us Market Monetarists a bunch of trainspotting anoraks!) Here's Tony: "I am left being prepared to concede that helicopter drops might generate inflation, but not that they would be beneficial, since they may lead to the steady destruction of that money altogether with all the attendant costs." If we were indeed "doomed" by helicopter money, we would be long dead. ...more

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  • Econbrowser

    Guest Contribution: “Why Are So Many Commodity Prices Down in the US… Yet Up in Europe?”

    Today we are fortunate to have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99. Oil prices plummeted 43% during the course of 2014 – good news for oil-importing countries, but bad news for Russia, Nigeria, Venezuela, and other oil exporters. Some attribute the price drop to the US shale-energy boom. Others cite OPEC’s failure to agree on supply restrictions. But that is not the whole story. The price of iron ore is down, too. So are gold, silver, and platinum prices. And the same is true of sugar, cotton, and soybean prices. In fact, most dollar commodity prices have fallen since the beginning of the year. Though a host of sector-...more

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  • CIPE Development Blog

    Bread for the Masses: Economic Empowerment to Achieve Social Justice in Egypt

    “Bread, Freedom, Social Justice” was the unified chant that filled Cairo's Tahrir Square in January 2011. Almost four years later, this call for bread,-- for dignified livelihoods -- remains a driving force for sustainable economic reforms that can open financial opportunities for all citizens, create jobs for the burgeoning youth population, bolster the suffering economy, and ultimately take... ...more

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  • Free exchange

    The dark clouds around the silver lining

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  • The Skeptical Speculator

    US stocks rebound as oil rallies, Chinese stocks hit 4-year high

    US stocks finally saw a strong rebound on Wednesday that saw it erasing almost half of its December loss. Bloomberg reports: The S&P 500 surged 2 percent to 2,012.89 by the 4 pm. close in New York, the biggest one-day gain since October 2013 to reduce the index’s December decline to 2.6 percent. Yields on 10-year Treasury notes climbed eight basis points to 2.14 percent and the Bloomberg Dollar Spot Index rose 0.9 percent as the yen slid. Oil rallied from five-year lows to fuel gains in energy stocks, while the ruble strengthened before Russian President Vladimir Putin holds his annual media conference. The Fed said it will be patient on the timeline for higher rates, replacing a pledge to keep borrowing costs near zero for a “considerable time,” and raising its a...more

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  • Free exchange

    The best of all worlds

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  • John Quiggin

    MMT and Russia

    Whenever I post anything about taxation and public expenditure, it’s a good bet that someone will pop up in the comments section to claim that, according to Modern Monetary Theory, states that issue their own currency don’t need taxation to finance public expenditure. That’s a misunderstanding of the theory, but it’s proved hard to explain this. The current crisis in Russia provides a teachable moment. Russia is facing a lot of difficulties because of the drastic fall in the price of oil (more on this soon I hope), along with sanctions imposed following the war with Ukraine. The government depends on oil for around half its revenue, and it looks as if the drop in the oil price will be sustained for a while. But of course the Russian governmen...more

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  • Econbrowser

    Russia: Seems Like Old Times

    As I watch the financial meltdown in Russia (and work on a chapter on financial crises), I am pervaded by a sense of déjà vu. As Paul Krugman notes, the unfolding of the crisis is not mysterious, although the timing — and ferocity — is somewhat unexpected. Figure 1 depicts the collapse in the ruble even as the policy rate is hiked up, an astounding 6.5% yesterday. Figure 1: USD/RUB exchange rate (blue, left scale), seven day repo rate, % (red, right scale). Vertical dashed line at 17 July 2014. A rise in the exchange rate is a rouble appreciation. Source: Pacific exchange service, Central Bank of the Russian Federation. Foreign exchange reserves are being depleted at a rapid pace, even as intervention ceases. Figure 2: Russian Federation f...more

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  • Greg Mankiw's Blog

    The Affair

    The best new TV show this year, at least among those I have seen, is Showtime's The Affair. It is a compellingly written and acted drama and crime story told, alternately, from two perspectives. If you want to check out the first episode, you can do so here. (One of the lead actors is Dominic West, who played McNulty in The Wire, another of the all-time great TV shows.)...more

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  • iMFdirect - The IMF Blog

    Moving On Up: The Growth Story of Frontier Economies

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  • iMFdirect - The IMF Blog

    Turkey’s Recipe to Escape the Middle-Income Trap

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  • The Skeptical Speculator

    Markets fall as oil hits five-year low

    Global markets suffered steep falls last week. Stocks fell sharply, with the MSCI All-Country World Index falling 3.8 percent last week. The Standard & Poor’s 500 Index fell 3.5 percent. The STOXX Europe 600 Index plunged 5.8 percent, its worst week in three years. The MSCI All-Country Asia Pacific Index fell 2.0 percent. Sentiment in stock markets were hurt by continuing declines in oil prices last week. West Texas Intermediate oil fell 12 percent, hitting its lowest level since May 2009 on Friday, while Brent fell 11 percent, hitting its lowest level since July 2009. Oil touched its lows for the week after the International Energy Agency reduced its 2015 demand forecast by 230,000 barrels, the fourth cut in its forecast in five months. The falls in stocks and oil hi...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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  • Alpha.Sources

    Getting Late, but Still Time for a Drink ...

    One of the most widely discussed themes in the plethora of "2015 outlooks" that have passed my desk is where we are in the cycle. In itself, the question yields a number of important limitations on the level of insight [1], but it is a logical narrative to impose on the current market environment. The financial crisis is a distant, but still-potent memory, and the sovereign debt crisis in the Eurozone has been put on hold, but still has the potential to wreck the "timeline" for most investors if it were to rear its ugly head next year.  Without getting into too much detail, the vast majority of big sell-side research house focus on two overall themes. Firstly, we are currently mid to late in the cycle and a constructive stance on the economy and risk premiums/asset...more

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  • Alpha.Sources

    Keep Rotating

    Either weak energy prices, a break down in copper, low iron ore prices etc are a sign of a deflation crunch in the making that will lead to a flush in all things risk related (Albert Edwards style). Or we are in a extermely powerful Goldilocks situation where low headline inflation finally lets the real economy release higher, and the market goes on towards a final mid-to-late cycle tantrum. I think that this is now the key choice that everyone must make before proceeding to call their broker on Monday morning.  In the Eurozone, margins are getting squeezed and companies are being forced to cut prices to maintain market share. You need to tread carefully on cyclicals here, but on the other hand, many UK/Eurozone retail have already been crushed (and I admit I am do...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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  • 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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  • 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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  • 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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  • 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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  • 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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Emre Deliveli The Kapali Carsi

Emre Deliveli is a freelance consultant, part-time lecturer in economics and columnist. Previously, Emre worked as economist for Citi Istanbul, covering Turkey and the Balkans. He was previously Director of Economic Studies at the Economic Policy Research Foundation of Turkey in Ankara and has has also worked at the World Bank, OECD, McKinsey and the Central Bank of Turkey. Emre holds a B.A., summa cum laude, from Yale University and undertook his PhD studies at Harvard University, in Economics.

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