1. Mankiw points to Economic Disaster in Zimbabwe.
2. New Economist has blogged after a while now. Here he points to new papers presented at Jackson Hole and another conference held by Reserve Bank of Australia (The conference title is very relevant “The Structure and Resilience of the Financial System”). He also points to this interesting article on India’s Middle Class.
4. MK Venu in ET asks Is US facing a liquidity trap? He does not really answer the question and there are a few confusions. He says:
In fact Wall Street experts were stunned to see Fed chief Bernanke doing an unprecedented U-turn last month. After clearly signalling he would maintain the bias for tightening in monetary policy, within a week, the Fed chief cut interest rates. He will probably do it again in the coming weeks. So the liquidity party may continue for some more time till the real impact of the subprime crisis is assessed.
Fed only cut discount rates and interest rates in market parlance is the Fed Funds Rate (The difference is here) and latter is still the same at 5.25%.