Archive for December, 2010

Wishing all a very happy new year

December 31, 2010

Wishing all the visitors a very happy new year.

It was a decent year for Mostly Economics with loads of research and stuff to write on.

Hope 2011 is better and there is more insights and stuff to write on. Let me know your suggestions/comments to improve in the next year.

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Did ECB change its policy stance in the 2008 crisis?

December 31, 2010

Not at all.

In this paper, a team of economists say ECB stuck to its mandate of price stability despite the huge crisis. They also look at whether ECB has taken decisions being influenced by it member economies. Again the answer is No. Hence, earlier criticisms that ECB will get politicised by member economies has not been true. ECB is a strong independent central bank.

By updating the Taylor rule study of Gorter et al. (2008), we analyze the stability of the coefficients of expected inflation and expected output growth, thereby addressing the question whether the ECB has changed its policies due to the recent crisis.  Our results suggest that the ECB – in line with its mandate – puts a stronger emphasis on maintaining price stability than earlier point estimates of Taylor rule models indicated.

In addition we address whether regional developments have affected ECB policies. Some critics of the governance structure of the ECB “think the institution and the process will be unavoidably politicised – member countries facing asymmetric shocks will want the ECB to follow different policies, the country governments will be able to influence their representatives on the ECB to fight for the national interest, and exert pressure through other channels of operation of the European Union, and at least sometimes succeed in bending the ECB’s policies.” (Dixit, 2000, p. 759). Despite the diverging economic developments in the countries in the euro area, notably during the recent financial crisis, we do not find support for the view that policy decisions have been influenced by regional developments.

Crisp and short.

Rise in variety of imports in US shows the battle for competetive advantage

December 31, 2010

Shalah Mostashari writes a nice short note on the topic. The author explains that number of varieties in US imports have risen from developing economies. Much of these varieties are similar pointing to rise in competitive advantage amidst developing economies for US market share.

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Two-speed Recovery to continue into 2011 and beyond

December 31, 2010

Oliver Blanchard, chief econ of IMF gives his forecast for 2011 in this interview. He says not much is likely to change in 2011 and theme of 2010 will continue to apply:

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Speech of Chinese Nobel Peace Prize Winner

December 31, 2010

Liu Xiaobo,winner of the 2010 Nobel Peace Prize wrote a statement on 23 Dec 2009 before beginning his eleven year sentence.

This statement was read as his Nobel Prize acceptance speech (HT: Ajay Shah’s Blog).

Must read . Liu was a very good writer as well.

Speech is

Any Good Novels About Monetary Policy?

December 30, 2010

Economics Bloggers have been discussing this fun topic (HT: Tyler Cowen) – novels on monetary policy.

Erik Hayden summarises a few novels suggested by econs. In case one is bored reading the research, he can look towards these novels…:-)

Ronald Coase turns 100

December 30, 2010

Ronald Coase – One of the most influential individuals in economics (as he does not call himself an economist) of all time –  turned 100 on 29 December 2010. He gave us so many ideas despite not being an economist! His discoveries began with the question of why firms exist and introduced transaction and institutional economics to the world.

Wish you a very Happy Birthday Sir! Thank you for all your contribution to the field of economics .

See Coase institute and research being done under the same.

RBI releases its second financial stability report

December 30, 2010

RBI released its second FSR. This one is a must read for its excellent analysis and graphs.

Here is a broad summary:

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Who stays on Chicago’s lakefront?

December 30, 2010

As per Mario Polese, Chicago is a B-resilient city. Meaning, it has not just survived shocks but changed for the better.

I was reading this interesting paper on Chicago’s urban development and factors for household choices on residential location in Chicago.

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When Do Recessions Begin and End?

December 30, 2010

Kristie Engemann and Michael Owyang of St Louis Fed have a nice short crisp note on the topic.

The note says twp things.

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Tapping Spirituality to Help Resolve Global Water Conflicts

December 29, 2010

A superb thoughtful interview of  Aaron Wolf a professor of geography at Oregon State University. He is also a trained mediator in conflict resolution — two professions he has melded together when working on the Arab-Israeli conflict as well as numerous disputes in central and southeast Asia and Africa.

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Beggar thy neighbor interest rate policy

December 29, 2010

Ronald McKinnon of Stanford University writes in this paper that US has not learnt from its past mistakes.

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NHB Residex data should be keenly followed

December 29, 2010

This is one data which should be tracked more often. NHB  has developed this index – NHB Residex to track housing prices across the country. The last data was released on 28 October 2010 for the period Apr-Jun 2010. So it is a bit dated and we should be getting data for Jul-Sep 2010 period next.

I was just looking at the latest data (for Apr-Jun 2010):

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Similarities and Differences in inflation between Pakistan and India…

December 28, 2010

Shahid Kardar, Governor of the State Bank of Pakistan gives a superb speech on the inflation trends and its underlying causes in Pakistan. Before I discuss the speech, I must mention that the Central Bank has a decent website with nice working papers.

Ok now to the speech. Kardar talks about three conceptual issues on inflation:

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Case Studies on financial intermediation in emerging market economies in the global crisis

December 28, 2010

BIS has released this superb paper which discusses the experiences of EMEs in the global crisis.

Country wise case studies are given. You have lessons from India, China, Poland, Korea, Argentina, etc.

It looks at 4 areas:

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How long have we been talking about economic terms?

December 28, 2010

Martin Ravallion of World Bank points about this super tool from Google – Google Books Ngram Viewer. It helps you search several terms from the huge google books database published from 1800 onwards.

Ravallion says:

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Why doing a PhD is often a waste of time..

December 27, 2010

Chris Blattman points to this interesting article from Economist. It says this process of awarding Phd needs to be relooked at.

The article uses strong words as comparing Phd program as Ponzi or Pyramid Schemes!

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Articles on urban and city economics

December 27, 2010

CharterCities Blog points to this new edition of City Journal which has few articles on urban and city economics.

All look a decent read.

Panama Canal: Troubled History, Astounding Turnaround

December 27, 2010

I came across this interview of Noel Maurer, a HBS professor  who has co-written this book with Carlos Yu, an economic historian – The Big Ditch: How America Took, Built, Ran, and Ultimately Gave Away the Panama Can.

In the interview, Maurer gives an excellent account of how Panama Canal was built, American Imperialism and the canal’s role in international trade.

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Why is New York America’s largest city?

December 23, 2010

A superb paper from Edward Glaesar of Harvard Univ. He explains why NY has remained the largest city of US.

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