RBI’s upcoming 2 research conferences

I just noticed RBI’s website on its left side informs of two upcoming research conferences.

• First International Research Conference on 12-13 Feb 2010 at Mumbai. This conference is RBI celebrating  its 75th year (platinum jubilee) and will be a biennial event from 2010 onwards (once every 2 years).

The Reserve Bank of India which commenced its operations on April 1, 1935 has entered 75th year of establishment. In the Platinum Jubilee Year, the Reserve Bank is organising a series of knowledge-sharing events such as seminars, special memorial lectures, ‘Down the Memory Lane’ meetings as well as various ‘Outreach’ programmes. These initiatives are aimed at making the Reserve Bank a more responsive, relevant, professional and effective public institution. The foremost in these events is the inauguration of a new series of biennial International Research Conferences to be organised by the Bank regularly.

The Conference on “Challenges to Central Banking in the Context of Financial Crisis” is the first in the series and is topical as the global economy braves an extraordinary challenge today. The current global recession, a fall-out of the unprecedented financial crisis, is the most serious economic crisis that the world has faced since the Great Depression of the 1930s. While green shoots of revival are evident and the recovery may well strengthen in due course, the role of central banks in managing the crisis and minimising the pains of adjustment has been remarkable.

The programmme details are here.  It has some very big names coming over- Michael Spence, Charles Bean ( of Bank of England), Willam Poole (ex-President of St Louis Fed), Willam White (ex- BIS Chief Econ), Benjamin Friedman (of Harvard), Lars Svensson, Jaime Caruana (BIS chief), Stephen Roach etc etc. Looks very very exciting.

• Funding of Deposit Insurance Systems on 18-20 Jan 2010 at Goa. The Programme details are here. 

The Deposit Insurance and Credit Guarantee Corporation is hosting the 8th Annual Meeting of IADI Asia Regional Committee and International Conference at Goa, India during January 18-20, 2010.

The delegates of the IADI Asia Regional Committee (Bangladesh, Hong Kong, India, Indonesia, Japan, Kazakhstan, Korea, Malaysia,  Philippines, Russia, Singapore, Taiwan, Thailand and Vietnam) as also guests from IADI and some other IADI member countries will participate in the Conference. There will also be participants from the Reserve Bank of India.

The theme of the International Conference is “Funding of Deposit Insurance Systems”. The discussions will cover a wide range of issues including funding mechanism, management of deposit insurance funds and different perspectives on funding of deposit insurance systems. A session is also devoted to Guidelines for Effective Deposit Insurance Systems, including the guidance on funding.

Great initiatives from RBI. RBI does not have any such conferences happening on a regular basis. To see the first international conference becoming a biennial event is a great thing. It should put RBI conference as a place for infusing new ideas in economics.

Financial Crisis Inquiry Commission

Though I knew it was coming but was not aware that it has already been set up. John Taylor in his blog points that first public hearing of the commission is slated to be held on 13 January 2010.

That public hearings are about to start is excellent news. Without such an investigation, followed by a clear explanation to the American people of what went wrong, the Congress is unlikely to enact financial reforms that actually fix the problem. To repeat a phrase from the Chairman of the Brady Commission on the 1987 crash (their report took only 4 months to complete), “You cannot fix what you cannot explain.”

Though not part of its Congressional mandate, I recommend that the FCIC follow the approach of the Brady Commission and the 911 Commission and make some recommendations. It could then even issue a report card on how the recommendations are implemented. Such a Report Card was issued by the 911 Commission and it proved quite useful.

Wikipedia informs :

The Commission was created by section 5 of the Fraud Enforcement and Recovery Act of 2009 (Public Law 111-21), signed into law by President Barack Obama on May 20, 2009

It also has the objectives of the Commission and has 26 of them. The 10 members names are:

Speaker of the House Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada each made three appointments, while House Minority Leader John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky each made two appointments:

• Phil Angelides (chairman) – Pelosi (jointly chosen as chair by Pelosi and Reid)
• Bill Thomas (vice chairman) – Boehner (jointly chosen as vice chair by Boehner and McConnell)
• Brooksley Born (Pelosi)
• Byron Georgiou (Reid)
• Bob Graham (Reid)
• Keith Hennessey (McConnell)
• Douglas Holtz-Eakin (McConnell)
• Heather Murren (Reid)
• John W. Thompson (Pelosi)
• Peter Wallison (Boehner)

The resumes of 10 members of the commission are here.

Let’s see if the commission throws some more exciting insights of the crisis.

Crisis reading list from Menzie Chinn

Menzie Chinn who coauthors the superblog econbrowser is teaching a new course in Fall 2009 - Policy Responses to the Great Recession.  The course details are here:

This course will examine the hypotheses underlying the origins and propagation of the Great Recession of 2007, and the policy responses that have occurred along a variety of dimensions. The candidate causes include lax monetary policy, the “saving glut”, deregulation, securitization and the widespread use of derivatives, the activities of the Government Sponsored Enterprises (“Fannie Mae” and “Freddie Mac”), among others.

The discussion of responses will include the conduct of monetary policy and fiscal policy, the appropriateness of financial regulatory policy, the harmonization of international financial policy and trade policy. Other policies not typically thought to be related to the workings of the macro economy (housing, energy, sectoral/industrial policy, e.g., automobiles) will also be examined.

Chinn has provided links to the key papers/presentations for this course. It is a linkfest on the crisis.

Interview of Matthew Kahn

Matthew Kahn is an environment economist and teaches at UCLA. There is a very good interview of Kahn in Cleveland Fed publication. I liked the interview quite a bit.

Richter: We will start with your work on green cities. To begin with, what types of cities would you say have boomed over the past 35 years?

Kahn: Let me point to three big facts. In the United States, urban economists have noted—and everyone else has as well —that people seek out warm-weather cities. This is behind the boom of Phoenix, Las Vegas, and Dallas. Warm weather is one exogenous factor that people want. Second is a coastal city. Jordan Rappaport and Jeffrey Sachs have done some nice work documenting that the U.S. population wants to be on the coast rather than in “flyover” country. I was born in Chicago and I guess that’s part of the country they’re flying over. And finally, booming cities have been the skilled cities, those having more educated residents. Skill is usually measured by what percentage of adults are college graduates, and those cities with a lot of college graduates have greater wage growth and population growth than other cities.

Richter: And how do so-called green cities fare? How would you even define green cities?

Kahn: An example of a green city would be San Francisco, where a large chunk of its livability is from its climate. No government policy can get rid of humidity or cold winter temperatures. What goes right in San Francisco is that it has a feel of new urbanism, of having a walkable, outdoor life.

On local environmental criteria, San Francisco has clean air, clean water, no public health outbreaks. And then on global environmental criteria, while the United States has the largest carbon footprint per capita of any nation, San Francisco is one of our greener cities in terms of carbon dioxide per capita because people don’t use a lot of air conditioning there. The electricity they use is generated from natural gas-powered plants, which are cleaner than coal-fired plants. And people do use public transit there more than in other cities. So to finally answer your question, a green city scores high on local and global environmental criteria. But a mayor would really only care about the local criteria in terms of pleasing his or her constituents.

That said, green cities are not a free lunch. What happens in many cases, such as in Marin County in San Francisco, with open space initiatives—you’re taking that land out of the housing supply. So from a simple supply and demand angle, you’re going to get higher home prices in these communities. That’s because the community has become more desirable and also you’re making it harder to build on this chunk of desirable land. Homeowners become richer but renters (and minority households are often renters) get punished by gentrification and may not be able to afford to live in their old community. Some urban economists are studying this churning—getting priced out of your own neighborhood. This has been documented in Harlem as crime has fallen in Manhattan.

Read the whole thing. Very good insights.

It is just amazing to find so many economists doing such insightful work. He also writes a blog which has become a part of must read list already.  His voxeu columns are here.

Economics lessons from Sports/Sportspersons

Charles Plosser, President of Philadelphia Fed gave a speech recently. He says Ice Hockey great, Wayne Gretzky provides lessons for Monetary Policy.

This realization was driven home to me here in Rochester. As my children were growing up, I found that there was a way to combine all three of these things into one event — “early morning hockey practice.” Driving through the cold and snow to a 6:00 a.m. hockey practice at Lake Shore was always an exhilarating way to start the morning. Yet, as I learned more about the game of hockey, I found that hockey players could teach us things that are relevant and useful in other disciplines, including, believe it or not, monetary policy.

Hockey great Wayne Gretzky was once asked about his success on the ice. He responded by saying, “I skate to where the puck is going to be, not to where it has been.” He didn’t chase the puck. Instead, Gretzky wanted his hockey stick to be where the puck would be going next. He scored many goals with that strategy, and I believe monetary policymakers can better achieve their goals, too, if they follow the Gretzky strategy.

Good monetary policymakers, like good hockey players, must be forward-looking in their actions. Setting policy that is appropriate for where the economy is today, or has recently been, is not likely to deliver the kind of economic outcomes we desire. Anticipating where the economy is headed is important because monetary policy actions affect the economy with long and variable lags. The major impact of policy often comes only after several quarters, or sometimes several years.

Wayne Gretzky emphasized that anticipation was important to being a successful hockey player. Failing to anticipate in hockey means that you always end up chasing the puck and never catching it. Since monetary policy works with a lag, policymakers must also anticipate and be forward-looking in their actions. Failing to do so would mean that policy would always be behind the curve — playing catch-up so to speak. The result would be greater instability in the economy and a failure to achieve our policy objectives.

John Taylor in his blog has a nice anecdote on how Gretzky example would save some embarrassment in his monetary policy class.

There was a very interesting speech by Mervyn King on how monetary policy lessons can be drawn from Maradona. 

It is always interesting to draw lessons from sports arena. I r’ber Australian coach  John Buchanan giving lectures to company management on mentoring. Same is the case with Steve Waugh who gives leadership lectures once a while. Infact, we see quite a few sportsmen giving these kinds of lectures these days.

Though I think Plosser misses on not emphasizing importance of knowing history as well. Forward looking is all good and important but without a proper reference to history turns into a disaster. I am sure Gretzky goes for the puck based on his experience and lessons he has learnt from the past. Infact, the challenge for central banks is more backward looking right now as they have to figure out why they have been ignoring lessons from financial crisis for so long.

I was just wondering Ice Hockey is very popular in Philadelphia part of the world and Football/Soccer in UK. Hence the examples. Cricket is very popular in India. Say RBI official is giving a speech on similar lines drawing analogy from sports. Which cricketer helps draw some lessons for monetary policy? Here are some ideas:

• Sunil Gavaskar for his excellent concentration, focus and new ball skills
• Kapil Dev for his allround skills
• Saurav Ganguly for his leadership
• Anil Kumble for achieving most objectives and still keeping a low profile
• Rahul Dravid for excellent technique, commitment and a team player
• Sachin Tendulkar for being such a fine player for so many years and managing the expectations so well. I don’t really know how to describe Sachin.
• VVS Laxman for making batting look an art
• Virendra Sehwag for questioning the conventional and turning all cricketing theories on its heads.

I am sure the readers would have their own names. I have watched cricket only since 1985 so just named a few from this period onwards. Obviously, Indian central bankers would have their own favorites from cricket or other sports as well.