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Global Macro Channel: Latest Posts
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Global Macro
Banking on Reform: Can Volcker, Vickers and Liikanen Resolve the Too-Important-to-Fail Conundrum?
The global regulatory landscape governing banks has changed from its pre-crisis status quo. In addition to the Group of Twenty advanced and emerging economies led global regulatory reforms, like Basel III, the United States and the United Kingdom have decided to directly impose limits on the scope of banks’ businesses. The European Union is contemplating [...]
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Global Macro
Macro Overview
The US dollar is consolidating the gains seen at the end of last week. The greenback briefly pushed through the JPY102 level in Tokyo, but this was not sustained. Meanwhile, the global equities are mostly lower, though the Nikkei tacked on another 1.2% to reach a new 5.5 year high. Softer Chinese data may have [...]
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Great Leap Forward
A New Meme For Money: the EEA presentation
Hi, I’ll make a presentation tomorrow; here’s a sneak peek. Pavlina Tcherneva has organized back-to-back presentations for the morning; the first is on fiscal policy and the second is on monetary policy. Here are the line-ups: SESSION 1: Park 5; Saturday, May 11, 9:30-10:50 Fiscal Policy after the Crisis Session Organizer & Chair: Pavlina R. [...]
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Global Macro
Marrying Monetary Policy and Financial Regulation
If the global financial crisis — and the events that led up to it — have taught us anything, it is,“No complacency with asset price booms”. We know first hand the dire consequences of bubbles, so it is clear monetary policy makers can no longer passively observe the evolution of asset prices. If an economy [...]
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Global Macro
Great Graphic: Base Money and Money Supply
Many observers continue to confuse base money with money supply. The Pragmatic Capitalism blog has been among the forefront explaining this distinction. The first Great Graphic here comes from a post on that blog fromNiels Jensen of Absolute Return Partners. It shows the monetary base, which is what the central banks create when they purchase securities from dealers. This [...]
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Global Macro
How Bond Market Vigilantes Force Rates Higher
I see that Paul Krugman has shifted his rhetoric in a recent post on British government economic policy. Let me explain how in this post so that I can make a point as to how bond market vigilantes actually work. In his post, Krugman points out is that the British government still wrongly believes in the [...]
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Global Macro
Macro View
Holiday in Tokyo and London are making for a quiet start to the week. The US dollar is firmer, though gains are mostly minor, with two notable exceptions. The greenback’s gains against the yen in the second half of last week have been extended to ~JPY99.45, a new 8-day high. The Australian dollar is the [...]
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Great Leap Forward
By Jove, He’s Got It: Krugman (Finally) Adopts MMT (And so does Summers)
As you know, Paul Krugman has been inching inexorably toward MMT. The last stumbling block has been those Vigilantes. Krugman and Brad DeLong have argued that we don’t need to worry about them, now, in the depths of a liquidity trap. And now that we know that the magic 90% debt ratio of Rogoff and [...]
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Global Macro
The Lessons of the North Atlantic Crisis for Economic Theory and Policy
Guest post by: Joseph E. Stiglitz Columbia University, New York, and co-host of the Conference on Rethinking Macro Policy II: First Steps and Early Lessons In analyzing the most recent financial crisis, we can benefit somewhat from the misfortune of recent decades. The approximately 100 crises that have occurred during the last 30 years—as liberalization policies became dominant—have [...]
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Great Leap Forward
Reconciling the Liquidity Trap With MMT: Can DeLong and Krugman Do the Full Monty With Deficit Owls?
In recent days both Brad DeLong and Paul Krugman have written good pieces arguing against the austerity marketed by deficit hyperventilators. We can thank Thomas Herndon’s muck-raking that pushed the topic front and center, showing that there is no empirical evidence in support of the austerian’s claim that big government debts slow growth. (See my [...]
