Archive for March 7th, 2018

Comparing Japan’s Lost Decade with the U.S. Great Recession

March 7, 2018

Guillaume Vandenbroucke of St Louis Fed has a nice piece.

He says that in Japan growth rate of GDP per capita slacked whereas in US the levels of GDP per capita declined:

Japan’s economy began its “Lost Decade” in the 1990s, with persistent slow growth and low inflation. One could argue, however, that the Lost Decade has persisted for nearly three decades.

In 2008, the United States entered into what is now called the “Great Recession.” The Great Recession was also characterized by slow growth and low inflation. These similarities between the Lost Decade and the Great Reces­sion have led many analysts to wonder whether the United States is in for the same persistent economic slump as Japan. 

In this analysis it is critical to draw a distinction between a change in the growth rate of gross domestic product (GDP) per capita and a change in its level. For instance, a country can experience a sudden decline in the level of its GDP per capita after a major recession, but its growth rate can remain constant. Conversely, a country’s rate of growth can decline without any sudden drop in the level of its GDP per capita. The Japanese data reveal that the Lost Decade is clearly a case of slow growth rather than of a sudden negative shock to GDP per capita. The U.S. data, slightly varied, reveal that the Great Recession is the opposite case.

The difference is that Japan will take much longer to double its income compared to US:


HSBC’s branch in Mansfield celebrate its 125th anniversary

March 7, 2018

Nice bit of history of a bank branch.

  • 1865 – The Nottingham Joint Stock Bank opened on September 1
  • 1893 – The Mansfield branch was opened by the Nottingham Joint Stock Bank
  • 1893 – Samuel Davidson appointed first Mansfield branch manager
  • 1905 – Nottingham Joint Stock Bank amalgamated with London City and Midland Bank (now HSBC UK)
  • 1914-1918 – Mansfield staff served their country in the First World War
  • 1916 – Mr Davidson retired after 38 years of service with his assistant manager Edward Matthew Ellis taking over responsibilities
  • 1938-1944 – The branch faced the strain of the Second World War with nine men leaving to join the Armed Forces and five temporary members of staff arriving to take their place
  • 1972 – Accounts at the Mansfield branch became computerised
  • 2018 – HSBC UK celebrates its 125 anniversary at the Mansfield branch

What insights do taxi rides offer into leakages of Federal Reserve decisions/policies?

March 7, 2018

This looks like a crazy bit of paper and could generate controversy.

It tries to link unusual taxi traffic around NY Fed area around FOMC days to some sort of information sharing between Fed and Commercial Banks.

The author David Andrew Finer tries to explain the complex linkages and teasing it from data:

The taxi data can shed light on one small sliver of Federal Reserve interactions: face-to-face meetings with individuals associated with the Federal Reserve Bank of New York (New York Fed, FRBNY). Insiders of the New York Fed and commercial banks can take black cars, the subway, and other modes of transportation, so I will obtain a lower bound. While monetary policy is primarily the purview of the Board of Governors in Washington, DC, the New York Fed plays an important role. It houses the Fed’s trading desk and supports decision-making by, for example, providing economic briefings. In addition to its actions as a regulator, the New York Fed regularly communicates with commercial financial institutions to obtain market commentary pertinent to monetary policy.

If one accepts the proposition that the Federal Reserve’s monetary-policy meetings in Washington, DC, impact interactions between insiders of the New York Fed and major commercial banks much more than interactions involving the businesses and residences around the New York Fed and those banks, one may identify significant changes in rides with significant changes in meetings relevant to this study. I cannot conclusively demonstrate a link between rides and face-to-face meetings, but evidence that individuals are in very close proximity to each other more often around FOMC meetings would complement more indirect evidence of regular informal communication presented in the academic literature. Given my limited observations, the magnitudes of the changes in meeting counts that I find should be viewed as lower bounds.

Need to read the fine print…

Back in Time With the Mennonites of Bolivia

March 7, 2018

Some communities are trying hard to preserve their traditions and shunning technology.

Mennonites of Bolivia is one such community:


On Persian rugs as alternative monetary assets…

March 7, 2018

Interesting bit from @arbedout (need a twitter account to see) (HT: JP Koning).

“A fine modern Qum rug in silk […] is preferable as a low-risk store of value […]; the demand for the former is widespread and is a fairly stable function of well-known macroeconomic variables” – on Persian rugs as alternative monetary assets


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