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Global Macro Channel: Latest Posts
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Global Macro
On Japan’s Widowmaker Trade and Reinhart and Rogoff
I was on the Daily Ticker with Lauren Lyster talking about Japan yesterday. My view is that there is no material negative change in Japan’s sovereign debt outlook nor will there be in the medium term because of Abenomics. The video is at the bottom of this post. Before you watch it let me say a little bit [...]
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Global Macro
Did Reinhart-Rogoff Screw Up Their Debt Research?
Holy Snikes, this is HUGE, from Mike Konczal: “In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, “Growth in a Time of Debt.”Their “main result is that…median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.” [...]
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Global Macro
More Reinhart and Rogoff
The Reinhart and Rogoff rolled through the internet today like a tsunami. Peter Coy at Bloomberg: The point and counterpoint of academic debate that once occurred over months or years has been compressed to mere hours by social media. Today the Twitterverse exploded with chatter about a new research paper claiming to find holes in a [...]
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Great Leap Forward
NO, ROGOFF AND REINHART, THIS TIME IS DIFFERENT! SLOPPY RESEARCH AND NO UNDERSTANDING OF SOVEREIGN CURRENCY
Carmen Reinhart and Ken Rogoff came as close to celebrity status as an economist can ever come, with their book, This Time Is Different. They claimed that 800 years (!) of financial history proves that high government debt ratios lead to low economic growth. Governments all over the world took heed and downsized, adopting austerity that [...]
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Asia
Some New Estimates of Japanese Trade Elasticities
One component of Abenomics is a vigorously expansionary monetary policy. The yen has depreciated substantially as a consequence — as of February, about 20% relative to 2012Q3. One question is how much of an expenditure switching effect this depreciation will induce. In order to examine this question, I have done some quick and dirty econometrics, summarized in this paper. [...]
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Global Macro
‘Nobody in Europe’ Sees a ‘Contradiction’ Between Austerity and Growth
The two most revealing sentences about the gratuitous Eurozone disaster – the creation of the deepening über-Depression – was reported today. The context (rich in irony as I will explain) is that U.S. Treasury Secretary Lew spent his Spring Break in Europe meeting with his counterparts. The Wall Street Journal’s article’s title explains Lew’s mission and its failure: [...]
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Global Macro
Margaret Thatcher’s Four Ages of Monetary Policy
Monetary policy changed dramatically during Margaret Thatcher’s period as prime minister, from hard-line or ‘punk’ monetarism to membership of the European exchange rate mechanism (ERM). This, from my book Free Lunch, explains how her period in office accounted for four of my seven ages of modern UK monetary policy. By comparison, the past 16 years have [...]
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Great Leap Forward
Hyman Minsky’s New Book on Ending Poverty: Jobs, Not Welfare
OK, after my last post, we need an optimistic note. As you know, MMTers have adopted the “employer of last resort” or “job guarantee” approach to ending unemployment. Many of us got this policy from the late Hyman Minsky, who is well-known for his “financial instability hypothesis.” However, in the 1960s and 1970s he wrote [...]
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Policies of Scale: Efficient Global Policy
Quick Pitch: More Big Data Analysis for Energy
This piece was originally published on the Passions blog of my employer, Praescient Analytics: http://www.praescientanalytics.com/passion.php Projections for global energy demand show massive growth over the next thirty-plus years. The US Energy Information Administration’s International Energy Outlook (2011), for example, suggests that global consumption will grow by 53% from 2008 to 2035. A number of factors [...]
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Nouriel Roubini's Global EconoMonitor
The Global Economy on the Fly
In the last four weeks, I have traveled to Sofia, Kuala Lumpur, Dubai, London, Milan, Frankfurt, Berlin, Paris, Beijing, Tokyo, Istanbul, and throughout the United States. As a result, the myriad challenges facing the global economy were never far away. In Europe, the tail risk of a eurozone break-up and a loss of market [...]
