It’s frustrating to know that there’s a simple solution to a serious problem but no one seems willing to do the obvious. Tax maven Lee Sheppard in an article at Forbes describes how transaction taxes could very quickly put a brake on numerous undesirable activities: high frequency trading, the explosion in derivatives, and overuse of repo financing. You … Read more
Despite some recent gains, the Eurozone continues to teeter closer to the periphery cliff. During the past half a decade, the international community has consistently and systematically over-estimated the strengths of the global economy and under-estimated its vulnerabilities. In the early days of the global crisis, the sheer idea that global growth should plunge below … Read more
The United States Federal Reserve’s decision to undertake a third round of quantitative easing, or QE3, has raised three important questions. Will QE3 jump-start America’s anemic economic growth? Will it lead to a persistent increase in risky assets, especially in US and other global equity markets? Finally, will its effects on GDP growth and equity … Read more
Posted by James Stafford: We were fortunate enough to speak with the well known economist Ed Dolan on various energy and economic issues. In the interview Ed talks about the following: • Why cheap energy is not vital to economic growth • Why high oil prices aren’t necessarily a bad thing • Why the U.S. … Read more
With the two-notch downgrade of Spain to BBB- by by S&P (link and link), I figured that this is as good a time as any to start a series called “Did You Know?”. Let’s start with the S&P’s ratings edition and a chart featuring the ratings migration across the periphery economies Greece, Ireland, Italy, Portugal, and Spain … Read more
Historical perceptions negative about the Turk In discussions on Turkey’s membership of the European Union the cultural differences between Turkey and the EU-member states are greatly exaggerated. Empirical research shows that Turkey is not significantly different from other European countries. This short piece argues that there is no solid argument to block Turkey’s membership and … Read more
The forward premium, the difference between the forward exchange rate and the spot exchange rate, contains economically valuable information about the future of exchange rates. Here is the evidence that it can help predict short-run rates and that investors who ignore it and use random walk models may be leaving money on the table. Exchange … Read more
(Part 1?) On the surface, the data from Argentina look awfully good—among the top performers in the world over the past decade. And she’s apparently done it without a run-up of either private sector or government sector debt. In other words, Argentineans have bucked the trend among developed countries, that saw (mostly) tepid growth fueled … Read more
Megan Greene comments on the leaked plan for a common eurozone budget via Herman Van Rompuy’s draft proposal. Specifically, Megan outlines key reasons why she thinks we shouldn’t ‘hold our breath’ on a common EZ budget anytime soon (a .pdf link to the proposal via Peter Spiegel at the FT). Her points are well taken. I … Read more
The government announced tax hikes last Saturday in response to the deterioration in the budget, or maybe to fill the coffers for pork barrel spending before the upcoming elections. Here’s the intro. to my latest Hurriyet Daily News (HDN) column, where I discuss how the recent tax hikes surfaced the strife among Turkish econ. policymakers … Read more