Is economic progress good for society?

September 23, 2014

Jeremy Caradonna Professor of History at the University of Alberta writes this interesting article based on his recent book. I mean one may totally disagree with his view but it should be read.

He questions one of the most important beliefs impressed by econs – importance of econ progress. He questions this idea that industrial revolution has only helped in progress.

Read the rest of this entry »

Fed has a problem buying private sector assets and ECB has a problem buying govt. assets….

September 23, 2014

Economists differ greatly on what a central bank can do and not do. Adam Posen is in the camp

In this oldish speech released recently, he reflects on recent ECB measures. He says somehow the bad ideas that central banks cannot stimulate economies keeps coming back:

Read the rest of this entry »

Liquidity: Meaning, Measurement and Management

September 23, 2014

Title of Robert Lucas speech at St Louis Fed. A rare readable paper from Prof Lucas :-)

He starts visiting the objective of Canada central bank:

Read the rest of this entry »

Book Review: Wall Street – A History (From its beginnigs to the fall of Enron)

September 23, 2014

Certain books never really get the publicity despite their importance. Charles Geisst of Manhattan College has written one such book on Wall Street’s history. The book is pretty timely as well given Wall Street’s shocking display ethics and behavior in recent times. As per the author, this is the first history of wall street but I have hardly seen anyone recommending the book.

I mean just like most history books, if people had read Geisst’s book they would have said this time is nothing different. Wall Street has been like this for a long time. Ironically, the street that gets its name from the Wall constructed by Dutch to protect them from English, the world is now trying to create a wall to save them from the excesses of the wall street.

Read the rest of this entry »

How does India deal with alcohol? Prohibit or laissez faire?

September 22, 2014

EPW edit reflects on the recent Kerala controversy around alcohol. The government wants to limit alcohol in the state and just allow sales in some select places. Who could have imagined this happening in Kerala where people drink alcohol like water.

Read the rest of this entry »

UK Finance sector wages: explaining their high level and growth..

September 22, 2014

Joanne Lindley and Steven McIntosh research the high wage premium in UK finance sector.  Earlier researchers at HBS looks at French finance sector.

They say it is basically because the sector distributes a higher share its profits within employees compared to other sectors:

Read the rest of this entry »

T.L.T.R.O. is Too Low To Resuscitate Optimism

September 22, 2014

Silvia Meiser of Bruegel reflects on the low bidding for TLTRO funds.

Out of the expected EUR 180 bn of funds, banks only bid for EUR 83 bn:

Read the rest of this entry »

Making sense of dissents: a history of FOMC dissents..

September 22, 2014

Dissent is part of human life. People assenting or dissenting to other’s views is quite common. However, when it comes to central banking it becomes quite abnormal and generates significant hype.

Daniel  Thornton and David Wheelock of St. Louis Fed have this superb paper tracking history of FOMC dissents.

This article presents a record of dissents on Federal Open Market Committee (FOMC) monetary policy votes from the Committee’s inception in its modern form in 1936 through 2013. Dissents were rare during the Committee’s first 20 years but began to increase in the late 1950s. The number of dissents increased sharply during the late 1970s and early 1980s, when both inflation and unemploy- ment were unusually high. However, at other times, the number of dissents was not correlated with either inflation or the unemployment rate. A review of FOMC records and published statements indicates that dissents often reflect fundamental disagreement about (i) how to achieve the Committee’s macroeconomic objectives and (ii) the current stance of policy. The number of dissents also appears to have been influenced by the language used by the FOMC to communicate instructions to the manager of the System Open Market Account.

There is a lot of trivia and interesting stuff in the paper:

Read the rest of this entry »

ECB has a FOMC now…

September 19, 2014

ECB had announced the shift earlier. The details came y’day.

There will be 3 groups:

  • Executive members – All  6 will have voting rights in all 12 months
  • Big members -there are 5 members. 4 out of 5 shall maintain recording rights every month. one will drop out. IN Jan 15, Spain shall drop out.
  • Small economy members – Post Lithuania joining we shall have 14 members in this group. Out of this 3 shall drop out every month.

So basically, there will be 21 members voting each month (6+4+11). The difference is members shall rotate every month. Unlike FOMC where members rotate every year, here it shall be every month.

But still 21 is pretty large..

The Looming Death of Homo Economicus…

September 19, 2014

Dennis J. Snower, President of the Kiel Institute for the World Economy makes another attempt to dump the rational man concept used in economics.

Read the rest of this entry »

Deep roots or current policies – what drives sustained prosperity differences across locations?

September 19, 2014

One big question for institutional economists. They always believe that institutions matter which can never be disputed. There are some other extremes who say it is the only thing that matters.  So as long as instis are fine, development will prettty much be automatic.

Mercedes Delgado, Christian Ketels, Michael Porter and Scott Stern point to this interesting case of Botswana. It has the instis but current policy has messed up prospects:

Read the rest of this entry »

Taking the right lessons from Deng Xiaoping..

September 18, 2014

Minxin Pei of  Claremont McKenna College has this interesting piece on Deng Xiaoping. He is credited as father of China’s economic progress and with many asking to emulate him.  China celebrated his 110th birthday in a quiet manner recently.

Prof. Pei says one should be careful to take lessons from Dengism. He did lead to the economic spurt of China but undermined the political freedom. These are the consequences which are being felt now:

Read the rest of this entry »

The modest benefits of entry deregulation in Portugal…

September 18, 2014

. Business press is usually full of pointing the need for the state to just deregulate  and let the invisible hands play their role. The reality is a lot different. Things don;t pan out as there are other issues which have to be resolved as well. Deregulation alone does not help. After some initial spurt, it fizzles out.

Lee Branstetter, Francesco Lima, Lowell Taylor, Ana Venâncio point to such a case from Portugal.

Read the rest of this entry »

Are the Most Talented Employees the Highest Paid? Yes—If They’re Bankers

September 18, 2014

Carmen Nobel reports on a recent research by Claire Célérier and Boris Vallée of HBS.

They look at France and see what kind of students go to which kind of sectors post graduation. They figure the financial industry not just gets the most talented but also pays them the most:

Read the rest of this entry »

Finmin nudging to lower paper usage/wastage..

September 17, 2014

This memorandum was released nearly a month ago by Indian Finance Ministry.

The idea is to reduce usage/wastage of paper in Finance Ministry. So it passed on certain instructions/nudges to lower the same.

More can be done like autofixing word processors to type in single space. Similarly all printers auto default should be both sides printing and so on.

Then in order to make people realise/feel guilty some kind of posters (that will use some paper alright) can be put showing how much was paper wastage last week/month and whether it has reduced this month. In the same poster one can be made to feel proud by showing that by cutting paper wastage so many trees have been saved. Likewise departments can be compared saying who saved more paper than the other..

May be these reports can be put on the website as well to let others emulate..

Time to abolish financial advisers to and action paralysis and limit bureaucracy..

September 17, 2014

Gyanendra Keshri of Inclusion has this nice piece. He reacts to the formation of yet another commission on expenditure management headed by eminent advisers.

Read the rest of this entry »

Global Billionaires Political Power Index..

September 17, 2014

Darrell West has developed this interesting index called Global Billionaire’s political power index.

Read the rest of this entry »

From Taylor rule to Hayek rule…

September 17, 2014

Mateusz Machaj of Mises Institute says shift to Taylor rule will not help Fed. One should instead follow a Hayek rule and abolish Fed. The banks should be free to do their own thing without any Fed intervention.

Read the rest of this entry »

What we didn’t learn (and learnt) from the recent crisis?

September 17, 2014

Plenty of books etc being written on a crisis which is not over yet. Like Great Depression, this crisis will haunt and keep econs going till another bug crisis comes.

Martin Wolf has also written a recent book on the crisis. Here is his interview. He says economic teaching should be more humble.

Read the rest of this entry »

Tragic story of Amol Muzumdar (and several other talented cricketers) who just faded due to lack of opportunities

September 17, 2014

A really nice tragic piece by Santosh Antony on Amol Muzumdar, the batsman who was slated to be the next Tendulkar. Leave being the next Tendulkar, he could not even get anywhere close to his level.

For cricket fans, his name was much talked about in 1990s and was really frustrating to not see him in Indian team.

Read the rest of this entry »


Follow

Get every new post delivered to your Inbox.

Join 1,202 other followers