EconoMonitor

Economics Blog Aggregator

    United States

  • Brad DeLong's Grasping Reality...

    Links and Tweets...

    Tweets: @TheStalwart: This piece [by Michael Grunwald] is a killer combination of uncompelling argument + obnoxious tone. http://www.politico.com/agenda/story/2015/05/sanders-dont-break-up-the-big-banks-000054 @shaneferro: @TheStalwart "Did you know that the financial institutions at the heart of the 2008 crisis were not the very biggest banks?" @TheStalwart: @shaneferro The piece drips with disdain for those he disagrees with. The author acts like he's arguing with a child. @BenDWalsh: @TheStalwart @shaneferro my fav is the “we can’t rewrite the rules of capitalism” line. Was unaware that was what was governing banks! @TheStalwart: @BenDWalsh The existing regulations we have for banks just happen to be the "rules of capitalism" and any deviation is impossible...more

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  • Marginal REVOLUTION

    Why you should visit China more

    I suggest two plans, each of which I have been able to implement in a partial way only: 1. Take the train around to random first, second, and third tier Chinese cities.  Many of them will have their own cuisines, or they will represent a nearby regional cuisine.  It’s like discovering the food of a new country.  Imagine if Shandong province were a separate country!  How compelled you would feel to visit it for the food, often considered China’s foundational cuisine, plus it uses the finest vinegars.  And yet, because it is part of “China” (Gavagai!), you feel you already know something about Chinese food and thus the need to sample it is not so pressing.  Redo your framing, and rush to some of the lesser visited parts of China. By the way, ...more

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  • All HW content

    RealtyTrac: Top 10 buyer and seller markets

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  • Beat the Press

    All For Free Trade, Except When it Comes to Subsidizing TBTF Banks

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  • Calculated Risk

    Thursday: Pending Home Sales, Unemployment Claims

    From Reuters: EU officials dismiss Greek statement on aid agreement being draftedGreece's government on Wednesday said it is starting to draft an agreement with creditors that would pave the way for aid, but European officials quickly dismissed that as wishful thinking....But European Commission Vice President Valdis Dombrovskis said the two sides still had some way to go before any agreement could be drawn up."We are working very intensively to ensure a staff-level agreement," he said. "We are still not there yet."Other officials in the euro zone, speaking to Reuters on condition of anonymity, were more blunt. One called the Greek remarks "nonsense". Another said: "I wish it were true."Thursday:• At 8:30 AM ET, the initial weekly unemployment claims report will be re...more

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  • ProfessorBainbridge.com

    Gross rent seeking by LA labor unions

    The LA Times reports: Labor leaders, who were among the strongest supporters of the citywide minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Brad DeLong's Grasping Reality...

    Refereeing Mantoux-Keynes

    Note to Self: Rereading Etienne Mantoux: La Paix Calomniée, ou les Conséquences Économiques de M. Keynes. "The Calumniated Peace" of Versailles. OK. So why is the title of the English translation The Carthaginian Peace? Who decided to replace "Caluminiated" with "Carthaginian", and why? Recall that Etienne Mantoux's review of Keynes's General Theory is quite bad. At its beginning: With his fascination Keynes combines another of the serpent's attributes--his disconcerting ability to molt at more or less frequent intervals, leaving his former conceptions behind him like so many old integuments from which the reader, somewhat disconcerted, must extract himself, having previously been at no little trouble to get in.... We are to witness a revolution. At least so one...more

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  • The Big Picture

    Nuclear Explosions Since 1945

    Source: Radical Cartography h/t Know More

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  • ProfessorBainbridge.com

    How shareholder activism hurts the US economy

    From today's WSJ: U.S. businesses, feeling heat from activist investors, are slashing long-term spending and returning billions of dollars to shareholders, a fundamental shift in the way they are... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Cafe Hayek - Article Feed

    Who’d a-Thunk It?

    (Don Boudreaux) TweetThat (as reported by the New York Times) mandated family-leave ‘benefits’ often harm many of the same workers that these mandated ‘benefits’ are ostensibly meant to help.  A slice: Spain passed a law in 1999 giving workers with children younger than 7 the right to ask for reduced hours without fear of being laid off. Those who took advantage of it were nearly all women. Over the next decade, companies were 6 percent less likely to hire women of childbearing age compared with men, 37 percent less likely to promote them and 45 percent more likely to dismiss them, according to a study led by Daniel Fernández-Kranz, an economist at IE Business School in Madrid. The probability of women of childbearing age not being emplo...more

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  • All HW content

    Newbold Advisors adds Detta Cutright as managing director

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  • The Fabius Maximus website

    Is victory impossible in modern wars? Or just not possible for us?

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  • All HW content

    Ocwen closing residential servicing operations in Houston

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  • Calculated Risk

    Zillow Forecast: Expect Case-Shiller National House Price Index up 4.0% year-over-year change in April

    The Case-Shiller house price indexes for March were released this yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.From Zillow: Expect More of the Same from Case-Shiller in AprilThe March S&P/Case-Shiller (SPCS) data published [yesterday] showed home prices continuing to appreciate at around 5 percent annually for both the 10- and 20- City Indices, and roughly 4 percent for the national index. March marks the seventh consecutive month in which the national home price index has appreciated at a less than 5 percent annual appreciation rate (seasonally adjusted).In March, the 10-City Index appreciated at an annual rate of 4.7 percent, compared to 5.0 percent for the 20-City Index (S...more

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  • Cafe Hayek - Article Feed

    Cowardly and Arrogant

    (Don Boudreaux) TweetReflecting on my friend Lyle Albaugh’s new entrepreneurial venture, as well as on the market’s capacity to solve problems (such as the “lemons problem”), drives home to me the importance of economists never speaking of markets as being “perfect.”  Markets never are perfect.  And it’s a dangerous error to claim, or imply, that markets work well only if and when they are perfect – for such a claim or implication suggests that the scope for successful government intervention to ‘correct’ market ‘imperfections’ is far wider than it is in reality. The market process is chiefly one of entrepreneurs spotting market failures and sub-optimal situations – spotting problems t...more

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  • ProfessorBainbridge.com

    David McCullough's The Wright Brothers

    I just finished the Wright Brothers, which I enjoyed, even though I don't think it's one of McCullough's best books. My main criticisms? The treatment of the events of December 1903 get relatively... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Marginal REVOLUTION

    Assorted links

    1. Critical review of the Alice Goffman book.  Like Alex, I thought the felony made the whole thing more interesting, though of course I do not approve. 2. Fertility is rising for educated women. 3. Has there been a supercapacitor breakthrough? 4. The Future Library.  Will anyone care? 5. The Chinese strategic tradition.  Will anyone care? (yes) 6. John Nash on encryption. 7. New Politico site on ideas and policy. ...more

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  • Brad DeLong's Grasping Reality...

    http://www.bradford-delong.com/2015/05/comment-of-the-day-peter-t-regional-economics-and-living-standards-portland-or-vs-kansas-city-moks-focus-brad-de.html

    Comment of the Day: Peter T.: Regional Economics and Living Standards: Portland OR vs. Kansas City MO/KS: How much of the greater amount of money in Kansas City is just money, as opposed to goods and services? How much is money generated by grifts (payday loans, student debt for courses with no prospect of employment, cancer cures peddled by Republican presidential wannabees...). How hard would it be to map the density of payday lenders in the US? Or to take a chunk of credit card data and work out where the desperate suckers are? How does these and similar indicators correlate to health, income, education? Where do the profits come from, and where do they go? Is anyone doing this? ...more

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  • naked capitalism

    2:00PM Water Cooler 5/27/15

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  • macroblog

    myCPI: Getting More Personal with Inflation

    Last Friday's inflation report was interesting. The consumer price index (CPI) rose only 1.2 percent in April, as falling energy and flat food prices helped to keep the overall index in check. Does a 1.2 percent (annualized) rise in the cost of living sound about right to you? No? Well, the performance of the CPI reflects the buying habits of the average urban consumer, which is a way to say it sort of reflects the buying habits of everyone, but isn't likely to reflect the buying habits of anyone in particular. Are you a dapper guy? Good news for you—the cost of men's suits, sport coats, and outerwear fell 4.5 percent (monthly) in April. Fitness buff? Not such good news for you—sporting goods prices jumped 0.9 percent last month. Did you spent a lot of time...more

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) TweetA new collection of recent columns by my colleague Walter Williams has just been published.  It’s outstandingly good! I just discovered this insightful lecture on markets and trust by Mark Pennington.  Delivered in 2011, its length is less than 14 minutes. Writing in the Wall Street Journal, Jason Riley explains why minimum-wage legislation harms the very workers it is designed to help.  (gated)  A slice: Politicians like President Obama and civil-rights groups like the NAACP insist that the minimum wage is an effective antipoverty tool. But most minimum-wage earners do not hail from poor households, let alone head them. Rather, they tend to be teenagers or young adults working part time. The majority of poor families in the U.S. have...more

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  • The Big Picture

    Rental Fever

      Rental costs are increasing faster than home values for the first time since 2012. Rental increases outpaced property values in 20 of the 35 largest U.S. markets last month, according to Zillow .   Source: Bloomberg ...more

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  • Economist's View

    'Whatever Happened to Antitrust?'

    Robert Reich believes, as I do, that monopoly power is one of the reasons that the distribution of income has been skewed toward the top: Whatever Happened to Antitrust?: Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.  The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.  But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency marke...more

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  • Economist's View

    Inequality - What To Do About It?

    A follow up to yesterday's post on what to do about inequality: Inequality has been on the rise since the 1970s - Tony Atkinson and Sabine Alkire ask what can be done about it? Inequality was a topic covered in The Economic Journal 125th Anniversary Special Issue, available for free online: http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12230/abstract Watch the full session here: https://www.youtube.com/watch?v=XpdhdUkza88...more

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  • Econbrowser

    “Crony Capitalism”: Wisconsin Edition

    RightWisconsin writes: …crony capitalism is currently wreaking havoc on the conservative Republican brand of free markets and limited government. The most obvious example of crony capitalism came this weekend with the Wisconsin State Journal’s blockbuster story about another loan gone bad from the Wisconsin Economic Development Corporation (WEDC). The storyline is rather predictable: a politically connected company comes to WEDC and secures a taxpayer-funded loan, then goes belly up fleecing the taxpayers. The conversion of the Commerce Department into the WEDC was a cornerstone of Governor Walker’s agenda for creating 250,000 new jobs by the end of his first term (actual count according to Quarterly Census of Employment and Wages, 129,131). [1] ...more

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  • Calculated Risk

    FDIC: Fewer Problem banks, Residential REO Declines in Q1

    The FDIC released the Quarterly Banking Profile for Q1 today: Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $39.8 billion in the first quarter of 2015, up $2.6 billion (6.9 percent) from a year earlier. The increase in earnings was mainly attributable to a $4.3 billion rise in net operating revenue (net interest income plus total noninterest income). Financial results for the first quarter of 2015 are included in the FDIC's latest Quarterly Banking Profile released today...."Problem List" Continues to Shrink: The number of banks on the FDIC's Problem List fell from 291 to 253 during the first quarter. This is the smallest number of banks on the Problem List in six years. The number ...more

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  • Marginal REVOLUTION

    HIPAA, the Police, and Goffman’s On the Run

    Some people are calling Steven Lubet’s new review of Alice Goffman’s On the Run “troubling” and even “devastating” but I am non-plussed. Lubet questions the plausibility of some of Goffman’s accounts: She describes in great detail the arrest at a Philadelphia hospital of one of the 6th Street Boys who was there with his girlfriend for the birth of their child.  In horror, Goffman watched as two police officers entered the room to place the young man in handcuffs, while the new mother screamed and cried, “Please don’t take him away. Please, I’ll take him down there myself tomorrow, I swear – just let him stay with me tonight.” (p. 34). The officers were unmoved; they arrested not only Goffman’s friend, but also two o...more

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  • Beat the Press

    Paul Krugman Argues for a Vacant Property Tax

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  • The Big Picture

    A 14 Percent Infrastructure Fix?

    My wife leaves for work earlier than I do, giving her first choice of which car to drive. She has a longer drive than my three-minute jaunt to the train station, so I don’t mind. That often means I get the rear-wheel drive convertible in the snowy winter months, and the all-wheel drive Jeep in the summer. But recently she keeps taking the bouncy Orange Crush Rubicon. The reason? The broken roads and potholes make the tight suspension of the BMW a horror to drive, despite the fair-weather retractable hardtop. I was thinking about this as we kick off a new federal budget season. About this time, I usually lament the state of U.S. infrastructure, the highway-fund gas tax stuck in the early 1990s and other assorted indignities (see this, this, this and this). The pe...more

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  • The Fabius Maximus website

    Economists show the perils and potential of the coming robot revolution

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  • naked capitalism

    8 Ways Robots Are Taking Over Our Jobs and Our World

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  • Paul Krugman

    Preliminary Notes on Inequality and Urbanism

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  • The Capital Spectator

    A Mild Improvement For The US Macro Trend In May… So Far

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  • naked capitalism

    Links 5/27/15

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  • The Housing Bubble Blog

    This Run-Up Has Been Historically Exceptional

    A report from McClatchy DC. “Two new measures released Tuesday show home prices continued their upward climb earlier this year, even as sales remain lukewarm. U.S. house prices rose 1.3 percent from January through March, according to the Federal Housing Finance Agency House Price Index. It marked the 15th straight quarter in which prices rose on the index, compiled from information about mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.” “‘Home prices are now, on average, roughly 20 percent above where they were three years ago,’ said Andrew Leventis, the principal economist for FHFA. ‘This run-up has been historically exceptional and is particularly notable in light of the limited household income growth and modest rate...more

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  • The Capital Spectator

    Initial Guidance | 27 May 2015

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  • Beat the Press

    Bernie Sanders, Income Distribution, and Deodorant

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  • Economist's View

    'Do Central Banks Need Capital?'

    The start of a longer post from Cecchetti & Schoenholtz Do central banks need capital?: If you ask monetary economists whether we should care if a central bank’s capital level falls below zero (even for an extended period of time), most will say no. Pose the same question to central bank governors, and the answer in nearly every case will be yes. What accounts for this stark difference? How can something that seems not to matter in theory be so important in practice? The economists correctly argue that central banks are fundamentally different from commercial banks, so they can go about their business even if they have negative net worth. However, central bankers know instinctively that the effectiveness of policy depends critically on their credibility. They wor...more

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  • The Housing Bubble Blog

    Bits Bucket for May 27, 2015

    Post off-topic ideas, links, and Craigslist finds here.

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  • The Fabius Maximus website

    A China briefing from one of the West’s best-connected experts

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  • Dr. Housing Bubble Blog

    Shopping with $1 million in Culver City: gentrifying out the baby boomers and those unable to keep up with the Joneses.

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  • Paper Economy - A US Real Estate Bubble Blog

    New Home Sales: April 2015

    Today, the U.S. Census Department released its monthly New Residential Home Sales Report for April showing sales jumped a notable 6.8% from March rising 26.1% above the level seen in April 2014 but still remaining near an historically low level with 517K SAAR units. The monthly supply declined to 4.8 months while the median selling price increased 8.31% and the average selling price increased 5.04% from the year ago level. The following chart show the extent of sales decline to date (click for full-larger version). ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    FHFA Monthly Home Prices: March 2015

    Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in March, nationally, home prices increased 0.34% from February rising 5.16% above the level seen in March 2014.The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac. ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    S&P/Case-Shiller: March 2015

    Today's release of the S&P/Case-Shiller (CSI) home price indices for March reported that the non-seasonally adjusted National index increased from February with prices rising 0.80% while the non-seasonally adjusted Composite-10 city index increased 0.80% and the Composite-20 city index increased 0.92% over the same period.On an annual basis, the National index increased 4.14% above the level seen in March 2014 while the Composite-10 city index increased 4.75% and the Composite-20 city index increased 5.04% over the same period.On a peak basis, all three indices still show significant peak declines slumping 8.99% for the National index, -16.02% for the Composite-10 city index and -15.17% for the Composite-20 city index on a peak comparison basis. ...more

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  • Paul Krugman

    Things I Wish I’d Been Wrong About

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  • Robert Reich

    Ten Ideas to Save the Economy #6: End Corporate Welfare...

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  • Paul Krugman

    The IMF’s New Cloves

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  • The Capital Spectator

    Q2:2015 US GDP Estimate: +1.3% | 26 May 2015

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  • The Housing Bubble Blog

    Because It Has Been Good, It Must Be Good Forever

    The Torstar News Service reports from Canada. “A group of midtown Toronto residents has banded together to fight what it’s dubbed ‘density creep,’ amid a push for midrise development citywide that shows no signs of abating. The group of about 50 neighbours claims the project will ruin their stretch of million-dollar homes set on deep, private lots. ‘I’m really concerned about my property value going down,’ says Lisa Goodwin, 49, a stay-at-home mother of two who has lived in a four-bedroom dwelling for 19 years. ‘Right now all the houses are $1.1 to, say, $2.2 (million) but they’re looking at putting in places that are only $500,000.’” The Guardian on New Zealand. “Economists in New Zealand have expressed alarm ...more

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  • Robert Reich

    Whatever Happened to Antitrust?

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  • Econbrowser

    Gasoline prices and consumer sentiment

    U.S. retail gasoline prices last week averaged over $2.80 a gallon, thirty cents higher than a month ago. The preliminary University of Michigan index of consumer sentiment for May was 88.6, down 7 points from the month before. Are these two developments related? The consumer sentiment index is plotted in black in the graph below with units on the left scale. The negative of the gasoline price in real terms (deflated using the CPI) is shown in blue, with units on the right scale. I have plotted the negative of gasoline prices to help highlight the negative relation between the two series– when gasoline prices go up (a fall in the blue line), consumer sentiment goes down (a fall in the black line). Consumer sentiment had been improving steadily as gas prices ...more

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  • Greg Mankiw's Blog

    Claudia Goldin

    An interview with my Harvard colleague.

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  • Dr. Housing Bubble Blog

    Fed and CPI missing housing inflation yet again: The CPI is completely missing the increase in housing prices.

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  • Greg Mankiw's Blog

    The EITC is better than the minimum wage

    Warren Buffett has a great article in the Wall Street Journal.

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  • Econbrowser

    Interest Rate Parity and Exogeneity

    One of the enduring puzzles of international finance is the fact that the joint hypothesis of uncovered interest parity and rational expectations is consistently rejected, as evidenced by the coefficient estimates in the Fama regression. The typical approach is to estimate a regression of the ex post change (in logs) of the exchange rate on the interest differential (this is an approximation). (1)     Δst+1 = β0 + β1 (it – it*) + εt+1 A commonplace finding is that estimates of β1 are negative and statistically significantly different from unity, which is the posited value under the null hypothesis. Estimates for five bilateral exchange rates (against the US dollar, 1979-2014Q2) are shown as blue bars in Figure 1. Figure 1:...more

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  • The Baseline Scenario

    Over at Medium: Organized Crime on Wall Street

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  • The Baseline Scenario

    Why Is The White House Threatening To Veto An Imaginary Trade Promotion Authority (TPA)?

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  • The Baseline Scenario

    Over at Medium: “Payout Baby!!!”

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  • Robert Reich

    Ten Ideas to Save the Economy #5: How to Reinvent...

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  • Piggington's Econo-Almanac

    March -- April 2015 Housing Data Rodeo

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  • Dr. Housing Bubble Blog

    The economics of new home sales: New home prices near record highs but builders are reluctant to build on low sales volume.

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  • macroblog

    Sales Flexing Muscle at More Firms

    The news in this month's Business Inflation Expectations (BIE) report is that, in the aggregate, firms' unit sales levels continue to strengthen: Specifically, the survey question measures firms' perceptions of current unit sales levels relative to "normal times." This month, 70 percent of firms indicated their sales levels are at or above what they consider normal. Last November, that share was 61 percent, and one year ago, it was only 54 percent. We typically report the aggregate results in a diffusion index (see the chart), which also shows the overall progression toward "normal times" (a value of 0). enlarge But, typical of aggregate statistics, these results obscure the diversity of experience among sectors. Digging deeper, we found that most (but not all...more

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  • Greg Mankiw's Blog

    Alternatives to the Price System

    This article makes the case for social, rather than financial, incentives. I am not convinced, but it should generate an interesting class discussion.

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  • Tim Duy's Fed Watch

    Get Used To It

    As is well known, second quarter GDP growth is not off to a strong start, at least according to the Atlanta Federal Reserve staff: If this forecast holds, then the first half of 2015 will be very weak if not flat, slow enough that commentators might be tempted to refer to growth as at "stall speed". But quarterly GDP numbers are fairly volatile. Would two consecutive weak quarters be terribly unexpected, or even suggestive of a troubling undercurrent in the economy? It is somewhat difficult to panic about the GDP numbers just yet, especially in the context of the continuous slide in the forward-looking unemployment claims indicator: Moreover, should we be surprised by the occasionally GDP number in the context of lower estimate of potential growth? As Calculated Risk...more

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  • macroblog

    All Eyes on the Consumer

    table { font: inherit; font-size: 90%; } .citation, .byline { font-style: italic; } .centeredImage { display: block !important; margin-left: auto !important; margin-right: auto !important; } It appears that the first quarter may have been even worse than we thought. The CNBC rapid update—consensus estimates from a panel of forecasters—registered a decline of 0.3 percent as of yesterday. Clearly, the year didn't start out so well, but here at the Atlanta Fed we have not yet lost faith. We are sticking to the narrative that 2015 will be another solid year of recovery. That said, our faith is not blind and, befitting data-dependent policymakers, we need to make some call about what it will take to shake our confidence. In a speech delivered yesterday (May...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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  • Macro and Other Market Musings

    Why the Fed Will Raise Interest Rates This Year

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  • Tim Duy's Fed Watch

    Data Note

    The Personal Income and Outlays report for March was released today. The pace of spending accelerated to 0.3% in real terms, the highest since last November and indication that the economy is perhaps shaking off some of its winter blues. On the other hand, inflation undershot the Fed's target for the 35th consecutive month, with core-inflation climbing just 1.3% over the past year. I would be a little wary that Fed officials won't find room for a somewhat more optimistic read on the data. Indeed, core-inflation on a monthly basis is also recovering from a winter stumble: The annualized monthly rate was for core-PCE inflation was 1.79% in March, arguably within spitting distance of the Fed's target. Definitely something policymakers will be watching. At least those not...more

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  • Tim Duy's Fed Watch

    FOMC Snoozer

    The FOMC concluded their meeting today, and the result left Fed watchers struggling to find something interesting to say. The really offered no insight into the economy with the opening paragraph: Information received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady. A range of labor market indicators suggests that underutilization of labor resources was little changed. Growth in household spending declined; households' real incomes rose strongly, partly reflecting earlier declines in energy prices, and consumer sentiment remains high. Business fixed investment softened, the recovery in the...more

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  • Macro and Other Market Musings

    About that Dual Mandate...

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  • Macro and Other Market Musings

    A Partial Solution to Income Inequality

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  • Richard's Real Estate and Urban Economics Blog

    Is Free Trade Good for Everyone?

    Greg Mankiw implies that it is, and that all economists agree that it is.  But it actually isn't.  Who says so?  Economists.In particular, the workhorse theory of International Trade, the Hecksher-Ohlin Theorem, leads to the Stolper-Samuleson Theorem, which shows that when countries start trading with each other, the relatively abundant factor of production in each country becomes better off, while the relatively scarce factor becomes worse off.   In the US context, this implies that opening up trade will leave capital better off relative to labor, and skilled labor better off relative to unskilled labor.Does trade increase the total size of economies?  Yes--this is something that economists do agree on. But in the absence of redistribution--som...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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  • Piggington's Econo-Almanac

    February 2015 Housing Data Rodeo

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  • Richard's Real Estate and Urban Economics Blog

    LA has zoned itself out of the ability to house its residents (h/t Matthew Glesne)

    Once upon a time, the zoning in Los Angeles would have allowed for 10 million residents to live within its municipal boundaries.  Greg Morrow, in his UCLA dissertation, "Homeowner Revolution: Democracy, Land Use and the Los Angeles Slow Growth Movement 1965-1992," documents how this was eroded over time:So LA really did create a moat around itself and pulled up the drawbridge.  For those of us who think the blessings of cities should be shared widely, this is a shame....more

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  • Richard's Real Estate and Urban Economics Blog

    It is hard to feel urban form sometimes.

    I have spent a fair amount of time in Sao Paulo over the past 3-4 years, and always thought it sprawled more than LA, because it takes forever to get from one side of the place to the other.  So was I surprised when I went to Google Earth and looked at both of them from the same elevation. Here is LA:Now here is SP:It is far more compact.  Metro LA has about 18 million people; SP has about 20 million. But it takes about 2 hours to get from Santa Clarita in the west to San Bernardino in the east--the distance between the two is 85 miles; it can take four hours to go just 30 kilometers in SP.  Sao Paulo feels much larger to me....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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  • Piggington's Econo-Almanac

    January 2015 Housing Data Rodeo

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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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  • 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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  • 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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  • 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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  • Stan Collender's Capital Gains and Games

    Capital Gains And Games Now Being Published By Forbes

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  • Stan Collender's Capital Gains and Games

    Big Changes Are Coming To Capital Gains And Games

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  • Stan Collender's Capital Gains and Games

    Camp Plan Puts Nail In Tax Reform Coffin For This Year, And Next, And...

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  • democracyarsenal.org

    Can the F-35 Replace the A-10?

    by Nickolai Sukharev  One of the big decisions the United States Air Force has considered over the last few months is whether to retire the A-10 Thunderbolt II fleet as a cost saving measure while developing and procuring the F-35A Lightening II. Given the Budget Control Act caps on Pentagon spending and the need to better allocate funds, officials have expressed their preference to prioritize multi-mission platforms in the inventory. But the problem is that the F-35A is not a replacement for the A-10’s close air support. The reason is simple: it lacks comparable capabilities despite a higher operating cost. Given the constrained budgetary environment, the comparative cost to maintain and operate the two aircraft should be a decisive consideration. The A-10 is a...more

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  • democracyarsenal.org

    After Geneva Talks A Consensus on Moving Forward

    By Homa Hassan The two-day round of P5+1 negotiations with Iran just concluded in Geneva and Western diplomats are carefully reviewing a detailed proposal presented by Iran. As this proposal is being reviewed ahead of the follow-on meetings in November it is important to look at what the realistic prospects of a deal will look like. Going into this week’s talks, a number of commentaries came out attempting to set negotiations up for failure. However, it is widely agreed that a negotiated solution to Iran’s controversial nuclear program is the best way to achieve a sustainable solution and a recent survey of reports and recommendations from bipartisan think tanks and high-level experts demonstrates a broad consensus on how to approach negotiations a...more

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  • democracyarsenal.org

    TPP, TTIP and Getting America's Competitiveness Back on Track

    By Marcela Heywood Last week’s Asia-Pacific Economic Cooperation summit in Bali, Indonesia marked further progress for the Trans-Pacific Partnership (TPP) and set an ambitious goal to finish negotiations by the end of the year. Although the U.S. government shutdown – and President Obama’s absence in Bali – did not hinder the trade talks, it did call America’s credibility into question. Government shutdown could threaten both TPP and Transatlantic Trade and Investment Partnership (TTIP) negotiations by displaying uncertainty in U.S. economic and foreign policy priorities. Congress needs to reach an agreement and prioritize TPP and TTIP, as they are necessary policy initiatives to boost American competitiveness, stimulate the economy, and exert soft power to cr...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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  • 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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  • TPMCafe

    Message to world government: Don't govern the Internet

    You could think of the Aspen IDEA report published today as a letter to the head of the International Telecommunications Union, Hamadoun Touré, suggesting that he should reconsider his intent to put the "light touch" of government on the Internet's operations. M. Touré will be running a major meeting of world governments in Dubai at the end of this year. The Dubai meeting, known as WCIT 12, may have an agenda that is a light touch only if that's what you can call a grab for the jugular vein of the Internet. The issues may include a "per click" tax on international Internet traffic, individual nation state regulation identities to online activity, national encryption standards to allow government surveillance, and multinational governance of the Internet. Russia, Chi...more

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  • TPMCafe

    Obama and Romney on Foreign Policy - Drawing the Contrasts

    The political battle lines are being drawn for the general election debate over foreign policy and national security, and you can't do much better than my fellow Democracy Arsenal blogger Michael Cohen for a guide. One key theme of Michael's latest column for ForeignPolicy.com is what a difference it makes for a candidate to bear the responsibility of governing, or on the other hand, campaign to be commander in chief on the basis of self-serving pot shots. My only quibble regards how Romney's reed-thin foreign policy argument will fare with voters. Take Michael's analysis of Romney's potential advantage in the debate on Iran: He can simply lob rhetorical haymakers that hype up the threat of an Iranian bomb or offer Churchillian declarations about his intention to stop...more

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  • TPMCafe

    Will Yale's Alumni Save Liberal Education?

    Hoping to head off alumni resistance to the brand-new "Yale-National University of Singapore" college that the Yale Corporation has created somewhat stealthily in collaboration with the government of that authoritarian city-state, Association of Yale Alumni chairman Michael Madison has inadvertently demonstrated one of the ways Yale College is being transformed from a crucible of civic-republican leadership, grounded in liberal education, into a global career-networking center and cultural galleria for a new elite that answers to no polity or moral code: STATEMENT OF THE OFFICERS OF THE AYA BOARD OF GOVERNORS, Michael Madison, Chair of the Board "All Yale-NUS College graduates will be warmly welcomed as a part of the Yale alumni community. They will also be invited...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.