U.S. House votes to force approval of Keystone pipeline http://t.co/krAjnuOkBo
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Roubini Topic Archive: Major Economies
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What is the Liquidity Coverage Ratio for Banks and why should we Care that it has been Watered Down?
“Massive softening of Basel bank rules” read the headline in the print edition of Monday’s Financial Times. “Betrayed by Basel,” wrote Simon Johnson in a blistering post on his New York Times blog. At issue was a rule called the liquidity coverage ratio promulgated by the Basel Committee on Banking Supervision. If you are a [...]
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The Charitable Deduction as a Tax Expenditure: What it Buys and What to Do About It (Part 1)
In size, the tax deduction for charitable contributions ranks sixth on the dirty-dozen list of tax loopholes, far behind deductions for employer-paid health care or home mortgage interest. In popularity, though, it probably ranks first. Perhaps that is because so many people think it really is what it purports to be: a reduction in taxes [...]
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What Happened When Poland’s Fixed Exchange Rate Experiment Failed: Lessons for a Euro Divorce
In a recent paper, Arnab Das and Nouriel Roubini compare exit from the euro area to a divorce. (See long form here, short form here.) When we hear that friends are heading for the divorce court, two questions immediately come to mind. Why did this arrangement, which seemed like a good idea at the time, [...]
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Please, Secretary Chu, Retract your Retraction. High Gas Prices are Good. You Were Right the First Time.
Why would a president want to bring an eminent scientist like Energy Secretary Steven Chu into government? In the hope, one would suppose, that he would speak truth to power. Sadly, that hope seems to have been been dashed in the case of Secretary Chu. In 2008, before becoming part of the cabinet, he had [...]
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February Jobs Market Report Shows Across the Board Strength
The latest report from the BLS shows across the board strength in the U.S. jobs market. Data on payroll jobs, unemployment rates, and labor force participation all showed a gradually strengthening economy. The headline increase of 227,000 new payroll jobs (233,000 in the private sector) was down a little from the January report. However, that [...]
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Finally, Proof (Real Proof, not Just Data) of What Inflation Has Done to Our Economy
Anyone who has ever risked blogging about inflation knows there are two kinds of commenters out there. First, there are those who are sure that inflation, although quiet lately, is poised for a big breakout that will destroy the economy. Second, there are those who are sure inflation has already done so, and that anyone [...]
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Latest Data Suggest Output Gap is Closing but Employment Gap is Closing Faster
The latest GDP data from the Bureau of Economic Analysis indicate that the output gap narrowed in Q4 2011 at a slightly more rapid pace than previously estimated. The second estimate, released February 29, showed US real GDP growing at a 3 percent annual rate last quarter, up from the 2.8 percent advance estimate released [...]
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Can New Fiscal Rules Save the Euro? Three Details to Watch For
Yesterday Angela Merkel and Nicolas Sarkozy announced a new set of fiscal rules, their latest idea to save the euro. The new rules would replace the unworkable Stability and Growth Pact (SGP), which mandates a deficit of no more than 3 percent of GDP and debt of no more than 60 percent of GDP. Yesterday’s [...]
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NGDP Targeting is the Natural Heir to Monetarism
In a recent post, Daniel Alpert enlists Milton Friedman as an ally against the newly popular (but not new) idea of targeting nominal GDP. On the contrary, I see NGDP targeting as the natural heir to monetarist policy prescriptions of the 1960s and 70s. If we look at the textbook version of monetarism, the point [...]
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The UBS-Adoboli Scandal Shows the Problem of Negatively Skewed Risk is Still With Us
In my banking courses, I point to negatively skewed trading strategies as a key cause of the crash of 2008. The recent loss of more than $2 billion attributed to rogue trades by Kweku Adoboli at Swiss banking giant UBS shows that the problem of negatively skewed risk is still with us. It is an [...]
