Archive for August 17th, 2012

Europe’s Summer Reading List..

August 17, 2012

A reading list by Barry Eichengreen obviously connected to what Europeans should be reading to end their crisis.


What Is Accomplished by Banning Short-Selling?

August 17, 2012

Nothing much as per this paper by Ny Fed econs – Robert Battalio, Hamid Mehran, and Paul Schultz.

They compare two periods – first in 2008 post Lehman when there was a ban on short-selling in US. Second in 2011 when post US rating downgrade when there was no short-selling ban.


Behavioral economics approaches have greater impact on savings than financial outcomes..

August 17, 2012

It is interesting to read such papers.

Brigitte Madrian of Harvard says that so far we have sued traditional route to increases savings – matching contributions. With behavioral economics we have more tools like text reminders,  simplification, automatic enrollment etc. These latter approaches have a great impact than the traditional approach:


Is finance/financial globalisation great?

August 17, 2012

BIS organised its annual conferencein Jun-12. The theme was:  The future of financial globalisation. There are some interesting papers (including comments on a  paper by Dr Reddy whose career graph has soared post-crisis).

The opening remarks by Stephen Cecchetti are quite a read. He says finance is great but only upto a point. Similarly fin glob is great but upto a point.



I am unable to extract the content. So nothing much to say. Just reinforcing the fact that how times change. Before crisis even saying that finance is not really beneficial (even upto a point) was a crime, now it is all over the place..

Coase and the New Zealand Spectrum Reforms

August 17, 2012

A superb paper picked up from the conference given in honor of Prof Coase.

Via this paper I came to know NZ was the first economy to auction spectrum in 1989 (1989 was also the year when NZ adopted inflation targeting, another first). The paper is Charles Jackson who was part of the core team which managed this auction.

What is seen as an obvious thing now – allocation of spectrum to private parties using auctions – was just impossible a while ago. Coase’s paper in 1959 questioned this practice and suggested to auction  spectrum etc to private players.

In 1989, New Zealand’s Parliament enacted a new statute, the Radiocommunications Act 1989, that explicitly used a system of property rights to regulate the use of the radio spectrum.1 This statute resulted in the first ever spectrum auctions—and New  Zealand’s use of auctions has been copied around the globe. New Zealand’s adoption of a propertyrights regime, a more fundamental change than the introduction of spectrum auctions, has not had the same wide acceptance.2 How did New Zealand’s adoption of a propertyrights approach to spectrum come to pass? What role did Coase’s 1959 article play in the decision to adopt a property-rights approach  and in the design of the property-rights mechanisms? How does the New Zealand system (both in theory and in practice) differ from a naïve application of Coase’s insights?

It is my goal in this paper to address these questions. I was on the team that developed most of the system that is embodied in the New Zealand statute, and I participated in some of the drafting sessions for the statute.3 In recounting the background of  the New Zealand project, I also have to describe Coase’s influence on my own thinking. Although I conclude that the spectrum rights regime in New Zealand reflects Coase’s insights and, most probably, would not exist without his work, I indulge in some speculation about the benefits of broader and earlier implementation of a property-rights approach to spectrum management.

I did not understand the technology bit in the paper though. Nevertheless a nice read..

Hoping to read (can I write??) something on similar lines on auction of spectrum in India…



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