Archive for December 31st, 2008

Political economy of resolving financial crisis and do we need a WFO?

December 31, 2008

WSJ Blog pointed this paper/commentary from Barry Eichengreen. Eichengreen is an economist with multiple hats. He has written insightful papers on financial history, great depression, capital flows, financial stability etc etc.

In this paper, he tracks the crisis from an interesting political economy angle. First he says:

 As a financial historian, I have come to expect phone calls from reporters whenever the stock market tanks. .Could this be the start of another Great Depression, they ask?. No, I respond, a stock market crash is not the same as a depression. More to the point, policy makers have learned the lessons of history. Ben Bernanke, the chairman of the Board of Governors of the Federal Reserve System, is a student of the Great Depression. He understands that policy mistakes were responsible, in good part, for the economic crisis of the 1930s. He is committed to avoid their repetition. What happened before will not be allowed to happen again, I confidently conclude. Now I have stopped taking reporters calls.

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Assorted Links

December 31, 2008

1. MR points to whether we should peg S&P now!!

2. Krugman on falling housing prices and forecasts. PIB points to eco forecasting. TTR points to comments on forecasting:

The American political scientist, Philip Tetlock, has studied the prognostications of pundits over several decades. He finds that the better known the forecaster, the less accurate the forecast.

3. Macroblog points to some good news- rise in personal disposable incomes

4. ASB points seize the moment- move to market pricing for petroleum products

5. ACB has a post on economics of economic teaching

6. DB revisits research on impact of democracy on growth

7. CTB on IMF’s new paper/stance on fiscal policy


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