Archive for January 9th, 2020

Christine Lagarde interview: Owl, Green ECB, Taking ECB closer to people etc..

January 9, 2020

Interview of Christine Lagarde.

Given the obsession with ornithology of central bankers, she considers herself as an owl:

You have described yourself as neither a dove nor a hawk, but rather an owl. Why exactly this rather unusual type of bird?

Owls are traditionally seen as birds of wisdom that can see well in the dark and have a wide range of vision. However, what I really wanted to highlight was my wish to ensure that discussions within the Governing Council take place in an efficient, of course, but also composed manner.


Taking ECB closer to people:

Given the major challenge posed by populism, how can the ECB be brought closer to the citizens?

This is one of my priorities. Bringing the ECB closer to the people requires dialogue and explanations. We need to engage with our fellow citizens and enter into dialogue with them. We need to explain to them – also through you – what the ECB does and that we are committed to doing its work effectively. We should bear in mind that three-quarters of euro area citizens are in favour of the euro.

Your mandate is to ensure price stability. Is this the main issue today?

Doesn’t asking the question imply an assumption that price stability has been maintained? I would take that to be a compliment for the ECB. Indeed, since the introduction of the euro, annual inflation has averaged around 1.7% in the euro area. However, inflation currently stands at 1% and inflation projections are still low, at some distance from the level of below, but close to, 2% that we would like to reach over the medium-term.

Green ECB?

The President of the European Commission, Ursula von der Leyen, has presented her “Green Deal”. How will it interact with ECB policy? Are you going to transform the ECB into a green bank?

I commend the determination of my friend, Ursula von der Leyen, and her commitment to the environment. This battle is to our credit in Europe, with all of us acting within our remits. In this, I also include the European Investment Bank. We will play our part within the framework of our mandate of maintaining price stability and of banking supervision. What effects do climate-related risks have on our growth and inflation projections? What signals do we send through our bond purchases and what assets are held by the banks that we supervise? The stakes are high enough to arouse a keen interest in these questions, while pursuing our primary mission. As regards monetary policy, the review of our strategy will be the ideal time to address these questions.

The decade of 2020s will continue to be challenging for ECB..

How is Twitter disrupting academia?

January 9, 2020

Tyler Cowen on MR blog:

Kris on Twitter asks that question.  I have a few hypotheses, none confirmed by any hard data, other than my “lyin’ eyes”:

1. Twitter exists as a kind of parallel truth/falsehood mechanism, and it is encroaching on traditional academic processes, for better or worse.

2. Hypotheses blaming people or institutions for failures and misdeeds will be more popular on Twitter than in academia, but over time they are spreading in academia too, in part because of their popularity on Twitter.  Blame makes for a more popular tweet.

3. Often the number of Twitter followers resembles a Power law, and thus Twitter raises the influence of very well known contributors.  Twitter also raises the influence of the relatively busy, compared to say the 2009 world where blogs held more of that influence.  Writing blog posts required more time than does issuing tweets.

4. I believe Twitter raises the relative influence of women.  For one thing, women can coordinate with each other on Twitter more easily than they can in academic life across different universities.

5. Twitter can damage the career prospects of some of the more impulsive tweeting white males.

6. On Twitter is is easier to judge people by their (supposed) intentions than in academia, so many more people will be accused of acting and writing in bad faith.

7. On Twitter more people do in fact act in bad faith.

8. Hardly anyone looks better on Twitter, so that contributes to the polarization of many professions, especially economics and those professions linked to political issues.  Top economists don’t seem so glamorous any more, not even in their areas of specialization.

9. Academic fields related to current events will rise in status and attention, and those topics will garner the Power law retweets.  Right now that means political science most of all but of course this will vary over time.

10. Twitter lowers the power of institutions more broadly, as institutions typically are bad at Twitter.

What else?


The productive career of Robert Solow

January 9, 2020

Robert Solow is 95 and continues to actively think and work on problems the world faces.

A profile of the economist and his productive career.

Last summer, as he turned 95, the economist Robert M. Solow sat at home poring over a draft outline of “The Work of the Future,” an MIT report about technology, jobs, and economic growth. Solow has been studying these topics since he returned from fighting in World War II—and won a Nobel Prize in 1987 for demonstrating that technological innovation generates a huge portion of economic growth.

True, Solow’s eyes bother him these days, and he reads less than he once did. His wife, Barbara, herself an economic historian, died in 2014, after nearly 70 years of marriage. And the economics colleagues he worked alongside for decades at MIT—and with whom he built a powerhouse department from scratch—are no longer around either.

“I’m the only one who’s still inhaling and exhaling,” Solow says wryly, sitting on his living-room couch.

But Solow, an Institute Professor emeritus, is doing quite a bit more than that. He reads academic literature, including papers about productivity, and follows economic trends, world events, and policy debates. His “wickedly devious sense of humor,” as his Institute Professor colleague Daron Acemoglu puts it, remains intact. Having joined MIT in 1949, Solow is a macroeconomist whose career almost predates the word “macroeconomics.” Yet here he is seven decades later, rigorously examining the draft materials of the new work report.

Solow serves on the Work of the Future Task Force’s advisory board, and near the project’s start in late 2017, he and MIT sociologist Susan Silbey wrote a memo offering guidance for the report’s authors—MIT economist David Autor, MIT engineer and historian David A. Mindell, PhD ’96, and Elisabeth Reynolds, PhD ’10, director of MIT’s Industrial Performance Center. They pointed out that despite ongoing speculation about what robots, AI, and automation will do to work, the more pressing job issues in the United States right now are the loss of middle-class careers and the rise of inequality. While the task force’s brief was broad, and the report does examine technological developments, Solow and Silbey stressed the importance of policy decisions in shaping these workplace trends.


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