Other Perspectives on the New Bond-Market Conundrum

Last week I commented on a puzzling phenomenon in bond markets this year– long-term rates have been falling at the same time that nearer-term rates have been rising. Bruegel has a review of some of the discussion of this around the web. Nominal yields on different U.S. Treasury securities as a function of years to maturity as of […]

What Did Quantitative Easing Accomplish?

Roger Farmer has taken a new look at an issue concerning the Federal Reserve’s program of large-scale asset purchases (referred to in the popular press as “quantitative easing”) that I’ve been discussing on Econbrowser and in my research with University of Chicago Professor Cynthia Wu for some time.   One theory of how LSAP might affect interest rates is that if […]

Investment Slumps: A Long-Term View

I was interested to take a look at our recent weak economic performance from a longer-term perspective.   The graph below plots private domestic fixed investment as a fraction of GDP for the United States going back to 1929, along with the median value for this fraction over the whole period. We always see investment […]

China’s Financial Risk

Three years ago I called attention to the NYU Stern Volatility Laboratory. Since then it’s grown into an even more amazing resource, giving anyone access to constantly updated information about financial conditions in dozens of countries around the globe. Of particular interest are recent changes in their measure of the systemic risk posed by financial institutions. The basic […]

The Case For Higher Rates Looks Weak… Again

Some analysts are again projecting that the age of higher interest rates has finally arrived. The Fed is tapering and the US economy is expanding moderately, despite a first-quarter setback. David Kotok last week wrote that the central bank’s tapering has now passed the tipping point and reflects a “tightening” of monetary policy. Recent inflation readings have […]

Keeping Oil Production From Falling

Production flows from a given oil field naturally decline over time, but we keep trying harder and technology keeps improving. Which force is winning the race? An oil reservoir is a pool of hydrocarbons embedded and trapped under pressure in porous rock. As oil is taken out, the pressure decreases and the annual rate of […]

Iraq, Oil Markets and the U.S. Economy

The group is calling itself the Islamic State of Iraq and al Sham, translated as the Islamic State of Iraq and Greater Syria, or ISIS. And so it may come to be. From Friday’s Wall Street Journal: A militant Islamist group that has carved out control of a swath of Syria has moved into Iraq, conquering cities […]

ECB’s Negative Deposit Rate: Will It Boost Inflation?

The European Central Bank announced on Thursday that it is moving interest rates into negative territory, charging banks for maintaining deposits with the ECB rather than paying the banks positive interest. The hope is that lower (now even negative) interest rates may provide some stimulus to the European economy which might help bring European inflation closer to the […]

Criticisms of Piketty Valid, but Underlying Thesis Still Intact

There has been much discussion of Thomas Piketty’s new book, Capital in the 21st Century. Some of the criticisms I agree with, and some I do not. The latest concern was raised by Chris Giles, who found “a series of problems and errors” in Piketty’s publicly posted data and spreadsheets. Here is Paul Krugman’s reaction: Giles finds a […]

1 2 3 29