Archive for January 6th, 2010

Understanding crisis in European economies

January 6, 2010

Marek Belka, Director of the IMF’s European Department has given a nice interview on crisis in European economies.

IMF Survey online: Countries in emerging Europe have weathered the crisis very differently, ranging from your native country, Poland, which escaped recession altogether, to Ukraine and the three Baltic countries, Romania, and Hungary, which suffered deep downturns. What factors determined whether countries ended up in one camp or the other?

Belka: I would name four factors: structural features of the economy, the quality of macroeconomic policies, the quality of institutions, and the exchange rate regime.

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Macroeconomic Vulnerabilities in the 21st century

January 6, 2010

Brad Delong wrote this prophetic paper in 2002.

He begins the paper asking this question – What will the macroeconomic vulnerabilities of the 21 century be? Before this he points to five macroeconomic vulnerabilities of the 20th century:

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Bernanke defends Fed’s monetary policy pre-crisis

January 6, 2010

Though this speech (pdf version has all charts) of Bernanke has been talked about everywhere. I thought I should still post on it in case some have not still read it. It is a must read.

In this speech, Bernanke discusses the oft-repeated criticism that Fed kept interest rates low in 2001-07 and then raised them very slowly, that led to the build up of the housing bubble and the huge crisis followed.

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