Archive for March 22nd, 2019

How Russia’s central bank adopted inflation targeting and let its currency float?

March 22, 2019

Nice interview of Elvira Nabiullina, the governor of the Central Bank of Russia. She is also the first woman to head the central bank.

She discusses how Russia adopted IT in 2014 in wake of crisis and let its currency float as well:


Building a gender inclusive economy: Case of Iceland..

March 22, 2019

Katrin Jakobsdóttir, Prime Minister of Iceland has an interesting article in IMF’s F&D (Mar-2019 theme is Women and Growth).

She writes on how Iceland has tried to make women participate in their workforce:


Ancient Rome offers lessons on the importance of sustainable development

March 22, 2019

Interesting bit of history:

A changing climate reduced the empire’s resilience to a variety of shocks, including pandemics. Smallpox struck in the second century, and a virulent outbreak that may have been Ebola followed in the third. In the mid-sixth century, the Plague of Justinian—the first known incidence of bubonic plague—probably killed half of the empire’s population.

Recent evidence shows the role of climate change. The decade before the outbreak of plague saw some of Europe’s coldest temperatures in two millennia, brought about by a sequence of massive volcanic eruptions. This likely forced gerbils and marmots out of their natural habitats in central Asia, causing the bacteria-bearing fleas they carried to infect the black rat, whose population had exploded along Rome’s expansive network of trade routes.

To be sure, the fall of Rome had many fathers. It remains perhaps the most overdetermined event in human history. But it seems increasingly clear that the natural world impinging on the human world was a major culprit.

Weakened by these hostile forces of nature, the empire started to unravel in the third century. This was a period marked by persistent political instability, pressure on the frontiers, and a fiscal crisis compounded by currency debasement. After a genuine economic revival in the fourth century, the natural environment intervened once more—severe drought in Eurasia spurred the migrations of the Huns, whom Harper calls “climate refugees on horseback.” This started a domino effect of mass migration across the Roman frontier, ultimately leading to the collapse of the western empire in the fifth century. That was followed in the sixth century by the ugly trifecta of climate-change-induced crop failures, catastrophic plague, and ruinous war. It was during this period that Rome’s population fell to a mere 20,000—and the Roman forum became the campo vaccino , the cow field.

We may be far more wealthier compared to Romans but broad similarities cannot be ruled out:

The Roman Republic and the Roman Empire both fell because they failed the sustainable development test. There is a cautionary lesson for our own times in how that failure played out—a breakdown in time-honored social norms, entrenched political polarization driven by economic inequality, repudiation of the common good by elites, and environmental havoc leading to disease and disaster.

We should take this lesson to heart, especially as we hear history rhyming in ways that are eerie and disconcerting. This demonstrates the utmost urgency of achieving the Sustainable Development Goals, the global call to end poverty, protect the planet, and ensure peace and shared prosperity. The Roman experience offers a window into our possible future if we fail to act.

There are some important differences between our economy and that of ancient Rome, of course. Ours is vastly wealthier, healthier, more inclusive, and more resilient. The Romans did not have the ability to eliminate all forms of material deprivation, even though they could and should have better handled the inequalities arising from their own experience with globalization. We have it within our power to do both.

We also have it within our power to solve the problem of climate change, by far the greatest challenge of our generation. The Romans were very much at the mercy of nature. Their activity was not the driving force behind the shifting climate, so they could do little to slow or stop its march. But since human activity is causing climate change today, it can be fixed by changing our behavior—delivering a zero-carbon energy system over the next three decades.

The bottom line is that sustainable development is of enduring importance—whether we are talking about 130 BCE, 530, or 2030.

Canada’s new $10 bill delivers a history lesson: How Viola Desmond led the fight against racism..

March 22, 2019

Nice bit in IMF’s recent edition of F&D:

A successful black businesswoman is jailed, convicted, and fined for refusing to leave a whites-only area of a movie theater in 1946. Local Baptist church leaders step in to lend assistance. An appeal proceeds through the court system, but ultimately proves unsuccessful. Sixty years on, a government apology and posthumous pardon attempt to right the wrong.

A page torn from a history book recording events from the southern United States? Not quite.

While reminiscent of incidents that occurred much farther south in the early part of the 20th century, the episode transpired in Nova Scotia, one of the maritime provinces on the east coast of Canada.

Viola Desmond and her court case became an inspiration for the pursuit of racial equality across Canada. A testament to an oft neglected but marked moment in Canadian history, her likeness now appears on Canada’s $10 banknote.


When Desmond purchased her ticket at the movie theater that day in 1946, she received admission to the balcony—the seating generally reserved for nonwhite customers. But being nearsighted, and unaware of the policy, she went to sit in the floor section to be closer to the screen. A ticket taker noted her ticket was for upstairs seating, so she returned to the ticket counter to purchase a floor seat. Denied the purchase and realizing that her request was refused because of her race, she decided to sit on the main floor anyway. The police were called, and she was forcibly removed from the theater, injuring her hip, before she spent 12 hours in jail and paid the $20 fine.

While no laws existed in Nova Scotia to enforce segregation at the time, no court in the province had ruled on the legality of discriminatory policies in hotels, theaters, or restaurants. The tax on the balcony price of 20 cents was 2 cents; the tax on the floor price of 40 cents was 3 cents. In the end, Desmond was convicted of depriving the government of a penny in tax.

“In 1946, Viola Desmond took a courageous stand against injustice that helped inspire a movement for equality and social justice in Canada,” said Jennifer O’Connell, parliamentary secretary to the minister of finance, who spoke at the $10 banknote event. “More than 70 years later, we honor her as the first Canadian woman to appear on a [regularly circulating] banknote and hope her story inspires the next generation of Canadians to follow in her footsteps.”

Superb. The new vertical note also looks quite trendy:


Interview of Deirdre McCloskey

March 22, 2019

This interview of Prof McCloskey appeared a month earlier:

She says liberalism should not be adopted selectively but comprehensively:


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