Labor Markets in Europe in this recession

ECB July Bulletin has this interesting article on how European labor markets have fared in this crisis.

Assorted Links

• Krugman points (see this as well) to government debt in great depression. There is a lot of confusion over this ongoing fiscal austerity debate. Though Hoover followed fiscal austerity, debt  situation actually worsened under Hoover more than FDR.
• WSJ Blog points Double Dip? Seven Reasons Why Not. Meanwhile, Americans Remain Wary of Stock Market
• Nudge Blog answers the critiques of behavioral economics which surfaced after this NYT article.
• Stephen Gordon looks at probability of double dip recession
• IMF economists suggested central banks to higher their inflation targets. A group of economists looks at the idea and say welfare loss from high inflation targets is non-trivial
• Jose Vinals, head IMF financial markets on A Marriage Made in Heaven or Hell: Monetary and Financial Stability
• PFM Blog has a superb post on Implementing a Financial Management Information System in Afghanistan
• Economix Blog points to a new paper which looks at how children acquire skills. Econs never fail to surprise with their penchant for research
• ECB economists on why fiscal austerity is needed
• Gulzar on the need for labor market flexibility
• Cowen asks whether any director has a worse career trajectory than M. Night Shyamalan?

Comparing fiscal federalism between US and Europe

This was one of the big differences between US and Europe economic systems. US had a federal system for fiscal transfers and Europe had one but was too small. And finally, Europe had to make an emergency fund to transfer funds to troubled economies; US did not have to.

Setting limits to expanding role of central banks since the crisis

Hervé Hannoun Deputy General Manager of BIS gives a nice overview of central banking in this crisis.

Fiscal austerity lessons from South East Asian Crisis: Don’t do it

Adam Posen of Bank of England says:

In 1997-98 SE Asian crisis, fiscal austerity measures back-fired. Indonesia and Thailand were made to pass these plans which in turn hurt Korean economy as well:

Assorted Links

• WSJ Blog points Some economists say bring inflation on
• Krugman on inflation expectaions which have again moved down. He takes on Tyler Cowen who revisits Germany policies during reunification
• John Taylor points New Data Show the Debt Problem Is Spending (not Taxes) and Obamacare Worsens the Problem
• Ezra Klein is worried that Liz Warren might be ignored for the consumer financial protection bureau
• PSD Blog points to Lego theory of development

World’s largest database of job openings for economists – voxeu.org

Tyler Cowen points to this exciting jobs database for economists: www.voxeu.org/jobs/ 

The Contribution of the Financial Sector – Miracle or Mirage?

This is the title of the new Andrew Haldane speech (read it with graphs) . The speech is drawn from a paper written for this LSE book:  Future of Finance.

Assorted Links

• IFMR Blog on its rural tourism initiative- Rural Tourism Network Enterprise (RTNE)
• Gulzar summarises the debate- Rising corporate savings – another reason for more stimulus? He is so good at these literature survey posts
• There is an interesting article by George Loewenstein and Peter Ubel saying Are we relying too much on behavioral economics? Cowen responds
• Antonio Fatas on Fiscal adjustment: fast or slow?
• Ezra Klein sums up the recently passed financial regualtion bill in US. David Cho rightly says  – What kind of impact will the regulatory overhaul have? Ask us in 2020. He adds Summers had hailed Gramm-Leach-Bliley Act in 1999. This law not only deregulated the banking industry, it specifically avoided oversight over the trading of exotic instruments such as derivatives. 
• IMF Chief Dominique Strauss-Kahn on Listening to and Learning from Asia

Using stock market liquidity to predict recessions

Michael W. McCracken of St Louis Fed says liquidity serves as a useful variable to track and forecast business cycle and recessions.

Bank Liability Insurance Schemes before 1865?

 Warren Weber of Minneapolis Fed has this fascinating paper on the topic.

Will the Rupee Symbol Help India?

Now as we have a Rupee symbol, will it help India/India brand?

Finally Rupee Symbol released

Ministry of Information and Broadcasting released the symbol for Rupee. It will look like this:

Assorted Links

• Will a helicopter drop of money stimulate aggregate demand? Krugman says no and Cowen says yes. GOing back to discussions post Lehman. Krugmans also asks whether Fed can just helicopter drop the money
• Krugman reacts to recent Fed minutes
• San Francisco Fed Moves to Find New Leader
• Mankiw on CEA’s impossible job
• Brendon Fuller points to China’s Air Safety Overhaul
• Klein points to New Blog on Political Economy
• Fama and French look at the The Limits of Arbitrage

Behavioral economics version on why prices are sticky…

Dan Ariely, Anat Bracha, and Jean-Paul L’Huillier have this short paper on the topic:

Industrial Policy debate

This is another topic which never goes out if fashion. There is one difference though. You find many economists against it and most of the time Dani Rodrik defending it. 

Inflation Jun 2010- Update

WPI index increased from 258.1 in May ’10 to 259.8 in Jun’10. This implied inflation for Jun ’10 at 10.55% (YoY), lower than market expectations of 10.8% (as per several newswire polls). Again, we get a lower than expected inflation number like IIP numbers for May.

Assorted Links

• Gulzar presents More evidence against the “austerians”
• Rodrik says the market confidence bugaboo. Krugman says Dani Rodrik Is Insufficiently Radical
• WSJ Blog has Boston Fed Rosengren’s interview; Lower trade data in US has led to cut in Q2 GDP forecasts
• Nudge Blog proposes behavioral economics version of complementary goods
•  UK coalition govt to discuss bank levy with the ruling govt
• PSD Blog points to a 1936 op-ed by Keynes and wonders how little things have  changed
• RBI releases July 2010 bulletin. Has articles on developments in foreign trade, balance of payments and external debt 
• Chinn summarises presentations and papers given at a trade conference

Modern recessions vs Older recessions

I was reading this interesting paper by Robert Hall. Econs call 1990-91 and 2001 US recessions as modern recessions. What is a modern recession?

IIP Update: May 2010

IIP for May 2010 was at 11.5% (y-o-y). It was much lower than market expectations of around 16% (various newswire agencies). The figure for April was revised lower from 17.6% to 16.5%.