IMF releases analytical chapters of WEO and GFSR

Reading material is piling up. IMF has released analytical chapters of its bi-annual publications – World Economic Outlook and Global Financial Stability report.

In WEO, the research papers are:

• Unemployment Dynamics during Recessions and Recoveries: Okun’s Law and Beyond
• Getting the Balance Right: Transitioning out of Sustained Current Account Surpluses

In GFSR, the research papers are:

• Systemic Risk and the Redesign of Financial Regulation
• Making Over-the-Counter Derivatives Safer: The Role of Central Counterparties
• Global Liquidity Expansion: Effects on “Receiving” Economies and Policy Response Options

All topical issues as always. GFSR team had a Q&A with media of the findings. IMF Blog also discusses the findings. WEO team also had one but transcript not available as of now. WSJ Blog says there is some confusion wrt capital controls within IMF.

What all is baaack?

Krugman made this “baaack” word popular with a super paper on Japan’s deflation. Deflation made a strong comeback in late 90s in Japan. Krugman suggested that Bank of Japan needs to target a higher inflation rate (or be irresponsible) to fight the deflation.

Going by the same terms. two more things are baaack. Krugman says financial sector profits are baaack. Dani Rodrik says Industrial Policy is baaack. Both actually never really went out of fashion. Financial sector profits and bonuses have been talked about for sometime. So let me stick to industrial policy bit:

Reviewing interenational trade economics

It is time to go to basics. Pascal Lamy, WTO chief reviews principles of international economics.

He discusses 6 fallacies w.r.t. trade economics: