Archive for the ‘Economist’ Category

Has China’s monetary policy become more “standardized”?

October 7, 2014

The title should actually read Has China’s monetary policy become more “advance country like”? I mean whatever they do is deemed as a standard even when they are all wrong on the matter.

Anyways, this note by John Fernald, Eric Hsu, and Mark Spiegel look at how Chinese mon pol has evolved over the years. The changes in Chinese economy have led monetary policy to react just like it does in the west:

(more…)

Great news for Yellen…one in six Americans think Greenspan still runs the Fed

October 7, 2014

The survey is highly limited as it was polled across 1002 adults. That is too small really to draw results.

Nevertheless, it seems Yellen is doing a great job  as just 24% could recognise Yellen.  So much so, around 16% of Americans still think that Greenspan is running the Fed.  Bernanke did a better job of being recognised with 33% recognising him in a survey in 2009.

(more…)

Central bankers as new philosophers to fix world economy and why that is a problem..

October 6, 2014

A brilliant column by Prof Harold James bringing a lot of things under one column.

He points how Europe and US have differed on philosophy of life. The philosophy of course comes from one’s world values which are shaped by culture and history. These differences reflect in all things including economic policy. Whereas US has been much more active trying to stimulate their economies out of trouble, Europeans have dithered for a long time.

(more…)

If you want to learn how the economy works, what do you study? Not economics.

October 3, 2014

Interesting post and mostly right. I mean the discontentment with state of economic teaching is growing by the day. This is even more acute in higher level of economic programs. One can never connect the teaching to seeing the world:

(more…)

Economics of Uber..

October 3, 2014

I did not know what Uber is till it was banned in India.

Sergiy Golovin of Bruegel writes a superb primer to understand why so many countries are banning Uber. The Indian reason is very different from other countries. In other countries, the taxi companies are lobbying to get Uber banned as it eats their business.

(more…)

Re-discovering the Phillips curve and it is actually back to life in Europe…

October 1, 2014

Philips Curve showed the trade-off between inflation and unemployment. If you want low unemp, you tolerate high inflation. If you want low inflation, you get higher unemployment. The idea died during 1970s when we had both high inflation and high unemployment making the Philips Curve vertical.

However, old ideas keep coming back. In these interesting times, Europe needs both. Higher inflation and lower unemployment is not really a trade-off. They need both these.

László Andor EU Commissioner for Employment, Social Affairs and Inclusion has this interesting piece revisiting the Philips Curve. There are interesting graphs which show Philips Curve has flattened out in France, Spain and Germany:

(more…)

Why is Nouriel Roubini so surprised over surging markets?

October 1, 2014

Well, this has been the story for a very long time. Economic prospects have declined (age of diminishing expectations as Prof Krugman wrote) and continue to decline but markets remain as great as ever. So why is Nouriel Roubini surprised? I mean he even saw this irrationality build-up before the crisis .  This should not be anything new to him…

(more…)

Time for helicopter drop of money?

October 1, 2014

Biagio Bossone, Thomas Fazi and Richard Wood say none of the policies are working. We need to look at Friedman (or Bernanke) idea of Helicopter drop of money.

But the traditional Friedman view of central bank directly providing money to people cannot work. We instead need a government helicopter drop:

(more…)

Reconstructing macro theory to manage maco policy

September 30, 2014

Prof Joseph Stiglitz chips into the debate over state of macro.

(more…)

Why US yields trending lower despite Fed intending to exit?

September 30, 2014

These are the recent trends in US treasury yields:

  • US 10 Year started the year at 3% and is currently at 2.5%.
  • 30 year at 3.92% and currently at 3.18%.
  • 5 year is steady starting at 1.72% and currently at 1.77%.

Jérémie Cohen-Setton of Bruegel Blog wonders why is this happening? As Fed is expected to go off the stimulus, the yields should actually be rising. We are staring at the same problem as seen in 2005 called Greenspan conundrum (then most macro things were named after him).

(more…)

Americans work too long (and too often at strange times)..

September 29, 2014

Daniel S. Hamermesh and Elena Stancanelli point to this interesting post.

They say Americans work more on weekends and night time than Europeans:

(more…)

Connections between NY Fed and Wall Street (read Goldman) getting exposed

September 29, 2014

Over the weekend, some really interesting and scandalous story broke out. Propublica’s Jake Bernstein wrote this long article showing how the cosy relationship between NY Fed and Wall Street. As if this was anything new really. Michael Lewis adds more to the story.

The difference is Bernstein gets this former NY Fed  regulator Carmen Segarra to speak up. Segarra was an onsite supervisor a Goldman Sachs. Onsite regulators are those who actually sit in the office of the regulated entity. She was assigned Goldman Sachs and in act of bravado she taped her conversations while being in conversation with NY Fed and Goldman officials. The tapes show how NY Fed officials were just so afraid to ask Goldman to behave.

And this was after NY Fed actually appointed someone to sort its culture right. Lewis adds:

(more…)

Thinking about the yield curve in Euroarea..

September 26, 2014

An oldish speech by Vítor Constâncio of ECB, which I missed linking.

Euroarea is both frustrating and interesting in most matters. It does not change when we think about the yield curve.

First, what is it about the yield curve?

(more…)

Prof. George Akerlof or Mr. Janet Yellen?

September 26, 2014

It was kind of funny to get this post from WSJ blog. It is trivia really but is fine given it is Friday evening.

(more…)

Improving inflation statistics…

September 26, 2014

Herve Hannoun of BIS has a nice speech on the topic. The speech is given during Irving Fisher Committee Conference.

He says monetray stability can only be achieved if we know the actual  inflaiton level. For latter, we need to continue to review our stats

As monetary stability is no less important, I find it highly appropriate that the first session of this conference is devoted to “New monetary policy indicators”. No topic could be more topical, given the vigour of the current debate about the supposed threat of deflation. But no debate can be productive, especially at the policy level, unless the supporting data are sound. In this light, measures of inflation and inflation expectations are surely an appropriate focus for an intensive review by central bank statisticians – and I would like to raise the question here if the IFC might not play a catalytic role in that process. Let me start by revisiting the intricacies of inflation measurement

He points how fin markets say inflation is too low whereas households think it is high:

Has the public understanding of CPI measures improved? As you know consumer surveys reveal a large gap (6% in some cases1) between inflation as measured by the statisticians and inflation as perceived by the public. In other words, the general public may view price trends very differently from financial market participants who complain that “inflation is too low”. And, needless to say, if the central bank itself starts to express concerns that inflation is too low, it may find it difficult to convince the public of its case.

He shows how financial markets expectations of deflation in EU is misplaced given how the long term trends have been.

In the speech he also discusses ways to improve statistics on inflation..

Why NZ is worried about its overvalued currency?

September 25, 2014

Well, it is worried as the currency is overvalued!

In this speech RBNZ chief Graeme Wheeler discusses why NZ currency is so strong. He first says that there are some reasons for currency to appreciate:

(more…)

When economic policy becomes a crime and policymakers criminals…

September 25, 2014

Prof. Michael Boskin reflects on the recent reaction by Venezuelan polity on Prof Ricardo Hausmann. Prof Ricardo Hausmann questioning economic policy in Venezuela in this article Should Venezuela Default?” Hausmann is a former minister of Venezuela and currently a Prof at Kennedy School.

Prof Boskin says this is getting bizarre:

(more…)

Is Economics a Science? Dogmatic Economics Vs. Reflective Economics..

September 25, 2014

Fixing the economists Blog has this interesting post on the topic.

This is one of the most important philosophical questions regarding economics- is it a science? Econs surely believe and have tried to model  their ideas as Science like with laws and theories etc. This is met with criticism as these laws are not universally applicable and are inconsistent.

But then what is science at the first place? There is huge disagreement on the same. The blog defines science and then sees whether economics fits as a science:

(more…)

Lessons from Scotland referendum: We need more modest/smaller forms of government..

September 25, 2014

Though the voting supported Scotland remaining in UK, the stress over basic governance is increasing in most parts of the world. People are growing frustrated with their governments to provide even basic services.

Richard W. Rahn of Cato says we need to reorganise our states to smaller sized ones.

(more…)

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:

(more…)


Follow

Get every new post delivered to your Inbox.

Join 1,230 other followers