IMF’s Finance and Development Dec-2013 edition profiles Prof. Peter Blair Henry of NYU.
Always interesting to read these interviews to get perspective on research:
Women in Parliaments Global Forum (WIP) has this annual summit discussing several issues related to gender, diversity etc.
One such session was stirringly titled as –” Reverse reality – what if: ‘Lehman Sisters’ or the sisterhood ran G20 and big business”.
Thanks to this speech by Jorg Asmussen of ECB at the panel that I came to know of it. He points how ECB is promoting gender diversity in ECB.
Nice thought though..Lehman sisters…
Mr. Norman Chan, Chief Executive, Hong Kong Monetary Authority has this nice speech with a provocative title. Obviously central bankers cannot save the world but they try and try hard. But most of the time they put the world into a bigger hole. Infact the fab book Lords of Finance does suggest central bankers in the four economies could have saved us from the great depression. But it was not just them but the politicians who were reluctant to let gold standard go. At the end of the day it is the political system and the historical path which matters. Central bankers are a part of this system and play their own bit.
He begins asking is the world worth saving?
This is one of the most depressing student a PhD student always faces. Hey mate, what are you going to get after doing a PhD? And the head sulks and head fumes as there is no answer…:-)
Doing a PhD at one of India’s most elite B-schools one sees this happening right in front of you. The MBA students keep telling you about their great summer placement, final placement, rupee salary vs dollar ones and so on. And as a PhD student you can only look as if your world is very different and these things do not apply to you..
Anyways. got this email from CPB-Netherlands where there was a seminar on this topic. It seems there is hardly any premium for doing PhD in Dutchland..
Thomson, William of Rochester Univ has a nice note on this. Pretty long one at that too.
He sums up most of the activities/pains/action points of a PhD program..
Prof. Steve Hanke of Cato is a hyperinflation expert and tracks such regions carefully.
In this post, he says Iran is out of hyperinflation for now..
Over a year ago, I uncovered the fact that Iran experienced a period of hyperinflation (in early October 2012), when its monthly inflation rate peaked at 62%. Since then, I have been actively monitoring and reporting on the IRR/USD black market exchange rates and calculating implied inflation rates for the country.
Since Hassan Rouhani took office, on August 3rd, Iranian expectations about the economy have turned less negative. Thus far, it appears Rouhani has been successful in ending the long period of economic volatility that has plagued Iran, since the US imposed sanctions in 2010. This has been reflected in the black-market IRR/USD exchange rate, which has held steady around 30,000 in recent weeks (see the accompanying chart).
There are three main factors at work here. The first is a concerted effort by the Rouhani administration and the central bank to curb Iran’s inflation. This stands in stark contrast to the previous regime, whose strategy was to simply deny that inflation was a problem.
The second is that that Iran’s economy has proved remarkably “elastic” – meaning that the country has ultimately adapted to the sanctions regime and has found ways to keep its economy afloat in spite of them.
The third factor in the rial’s recent stability is an improvement in Iranian economic expectations. This is where the P5+1 talks come into play. Iranians recognized that easing of the sanctions regime would be a bargaining chip in any nuclear negotiations. In consequence, their economic expectations improved as the talks progressed. Indeed, Saturday’s announcement gave these expectations a shot in the arm.
Where will it go is to be seen..
Amazing story this.
The US government has sued for a parcel of land used by railroad companies in 1875 or so:
In the 19th Century, when railroads were being built across the West, the federal government granted significant land and benefits to railroad companies. The Great Railroad Right-of-Way Act of 1875 empowered the government to grant railroad companies right-of-way easements to build tracks across others’ land to facilitate the expansion of the nation’s railways – that is, railroads were granted a right to use sections of another’s property for railroad purposes without owning title to the land underneath. In 1976, the government sold the Brandt family a parcel of land in Wyoming which was crossed by one of these railroad easements.
In 2001, the railroad that owned the easement formally abandoned all claims to it. Typically, when this happens, the easement is simply extinguished and the owner of the land may then use the former easement however he or she wishes. But the federal government had different plans for the thin strip running through the Brandts’ land. In 2006, the government sued for title to the land lying under the former easement on the theory that it had retained a “reversionary interest” in the land when granting the railroad the right of way easement, even though it never actually set aside any interests when granting the easement. The government thus claimed that after the railroad abandoned the easement (after only ever owning an easement and never full title to the land), full title to the land “reverted” back to the federal government. The Brandts argue that under the basic principles of the common law of property, the government had no such right, and that even if any legislative act allowed the government to somehow acquire their land, such an act would require payment of just compensation under the Fifth Amendment’s Takings Clause.
Although this may seem like a small, unique problem, the scope of the Old West’s railway system was huge and those old easements criss-cross the land of thousands of property owners. In 1983, Congress amended the National Trails System Act to allow the government to take abandoned railroad easements and turn them into land for public recreation and “railroad banking.” Landowners have been fighting the taking of their property under the Trails Act ever since, claiming, as here, that the government’s original grant to the railroads contained no residual right of possession for the government.
It looks at political economics of why wheeled transport was not introduced in West Africa in colonial times. More interestingly, it shows how railways could have created a visible impact in these economies:
A nice short note on corporate finance and particularly on debt side.
It looks at how firms finance their debt positions over the business cycle. In recessions, firms rely more on corporate bonds:
The choice of bonds versus bank loans is important from a macroeconomic perspective because some types of debt may be more or less resilient, or countercyclical, during recessions or times of financial distress.1 For instance, De Fiore and Uhlig (2012) point out that total bank loans behaved in a markedly procyclical manner (with a lag) during the recent financial crisis, while bond markets did not.2 As the third chart shows, over the 2007-13 period, the correlation between the growth rates of real gross domestic product (GDP) and real bank loans is 0.32 and that between real GDP and real bonds is close to zero (0.0048). So, while bank lending contracts during a typical recession, liquidity in bond markets may not.
Never mind the fact that RBI has shunned off forward guidance statement under the new regime. But worldwide if there is one thing which central bankers and c-bank watchers are increasingly talking, about it is forward guidance. I mean just talk..how can something else be better?
I guess some bit of forward guidance is fine but this increasingly scientific way of guiding one is never sure..
This blog has made many a posts for this aspect. Inflation despite being so high is hardly a cause for concern.
Arvind Subramanian of PIIE says taming inflation may prove difficult because the social consensus in favour of moderate inflation appears to have eroded:
Today, three aspects about inflation in India are worrisome. It is unprecedentedly high. It may have been the key proximate cause of the recent rupee crisis. And taming it may prove difficult because the social consensus in favour of moderate inflation has eroded. Consider each.
It being high..India is Latinised. This is perhaps India’s first inflation crisis:
US House Committee on Financial Services held a hearing on the topic.
Experts shared their concerns on central banks and their policies going ahead:
Useful to read different views. Posen argued for a more powerful Fed. Makin points to risks from monetary cliff, Orphanides shows how intervention helped avert the crisis and Lachman is not sure how these policies have helped..