Archive for the ‘Economist’ Category

Macron Economics : A minor economic reform leads to panic in France.

March 19, 2015

For a moment, I thought there is some spelling error in the article. But it is not the case. Macron economics is basically an econ package proposed by French Economy Minister Emmanuel Macron (really young which is a surprise for French).

Theodore Darymple has an article on how even small changes proposed by Macron are finding opposition (which is so usual in France). First, how does France change? via violence:

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How Italy’s Government enables the mafia…

March 18, 2015

Interesting piece by David Howden and Emilio Parodi of Mises Institute.

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The Impossible Trinity: Where does India stand?

March 18, 2015

Rajeswari Sengupta of IGIDR has a paper on the topic.

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Why is the history of economic thought not taught anymore?

March 14, 2015

T C A Srinivasa-Raghavan asks the question which troubles this blog the most and has looked at answering quite a few times. TCA picks the title of his article from the paper by Mark Blaug who also said  – No History of Ideas, Please, We’re Economists.

TCA’s friends advised him to look at the topic:

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Adam Smith, Watch Prices, and the Industrial Revolution

March 13, 2015

Fascinating paper on econ history by Morgan Kelly and Cormac O’Grada.

Adam Smith mentions declining watch prices in Wealth of Nations as an evidence of tech progress. But how can we verify this claim? The authors show us how:

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Do awards matter?

March 12, 2015

Bruno Frey & Jana Gallus on the topic.

Why Understanding Money Matters in Greece…(Issuing Tax anticipation notes)

March 10, 2015

Robert W. Parenteau and Marshall Auerback look at the real purpose of money and go into history for the same.

They says real purpose of fiat money is to allow govts to pay for its expenses:

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Do Place-Based Policies Matter?

March 9, 2015

David Neumark and Helen Simpson reflect on place based policies. These policies favor a region/location for development.

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Robots Are Us: Some Economics of Human Replacement

March 5, 2015

Interesting and a different kind of paper.

It says machines can indeed replace humans:

Will smart machines replace humans like the internal combustion engine replaced horses? If so, can putting people out of work, or at least out of good work, also put the economy out of business? Our model says yes. Under the right conditions, more supply produces, over time, less demand as the smart machines undermine their customer base. Highly tailored skill- and generation-specific redistribution policies can keep smart machines from immiserating humanity. But blunt policies, such as mandating open-source technology, can make matters worse.

It has an interesting historical discussion starting from Ned Ludd who destroyed two machines fearing new technology..

Government must regulate Gyms, as people are not working out properly

March 4, 2015

Excellent tongue in cheek piece by Sadaf Hussain.

He argues for a new govt body which will regulate people going to Gyms:

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How Zimbabwe was brought from crisis to stability…

March 4, 2015

Great article by Tendai Biti, the former finance minister of Zimbabwe.He was appointed the finance minister in 2009 under highly taxing times. The article narrates his experiences on how he brought the economy back from complete disaster.

And yes he was a lawyer who learnt economics on the job and did a great job:

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When I was in college, people wanted to figure out cancer cure and by 1990s everyone wanted to be a hedge fund manager….

March 3, 2015

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Deflation bogeyman may be, but inflation bogeyman surely?

March 3, 2015

Martin Feldstein has a piece on the deflation bogeyman for western central banks.

Inflation rates have dipped because of low oil and commodity prices:

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When economists make mistakes and pressure of publishing..

March 2, 2015

Jessie Romero writes on this topic which has been a nuisance for sometime. There is too much pressure to do research to get promoted in econ academics. This is leading to all kinds of shortcuts and issues for the profession. And then at the end what do we really get? More and more abstraction and away from reality kind of research. Economic research has proliferated big time and if much was indeed so useful then world should have been a much better place.

Starts with the famous Rogoff and Reinhart error:

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Does the hawk-dove distinction still matter in the modern Fed?

March 2, 2015

Interesting article by Tim Sablik of Richmond Fed.

Comparing Fed/central bank members as birds goes back to war generals:

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Ukraine has the highest inflation in the world today..

February 26, 2015

Prof. Steve Hanke, the hyperinflation tracker  writes on this.

He says going by recent estimates, Ukraine is the 57th hyperinflation episode in history:

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Bank of England’s multiple challenges..

February 25, 2015

Bank of England is fighting many a battle and is trying hard to keep itself in the game. UK economy’s dependence on financial sector is like putting all eggs in one basket. As most eggs are wither broke or cracked, BoE and Govt are trying to play a rescue act.

It just issued these guidelines which will punish top bankers if they are found messing around:

The Prudential Regulation Authority (PRA) has today set out how it will hold senior managers in banks, building societies and designated investment firms to account if they do not take reasonable steps to prevent or stop breaches of regulatory requirements in their areas of responsibility.

In June 2013, the Parliamentary Commission for Banking Standards (PCBS) published its report “Changing Banking for Good” setting out recommendations for legislative and other action to improve professional standards and culture in the UK banking industry. This was followed by legislation in the Banking Reform Act 2013.

The Banking Reform Act introduced new powers which allow the PRA and Financial Conduct Authority (FCA) to impose regulatory sanctions on individual senior managers when a bank breaches a regulatory requirement if the senior manager responsible for the area where the breach occurred cannot demonstrate that they took reasonable steps to avoid or stop it.

The PRA has today published guidance for banks clarifying how it will exercise this new power; including examples of the kind of actions which may constitute reasonable preventive steps and how firms and individuals may evidence them.

The Banking Reform Act also creates a separate offence which could result in individual senior managers being held criminally liable for reckless decisions leading to the failure of a bank. This new criminal offence will, however, be subject to the usual standard of proof in criminal cases (‘beyond reasonable doubt’).

Before the crisis, such things done by central banks and that too in UK were just such a taboo. I mean how could you ask bankers to behave? Markets shall take care..

In another initiative, it has launched a fancy program – One Bank research. So was it a multiple bank agenda earlier?:

The Bank of England today launched its new One Bank Research Agenda – an ambitious and wide-ranging framework to transform the way research is done at the Bank. 

The Agenda aims to improve the coordination and openness of our research across all policy areas, to ensure the Bank makes the best use of our data, and to cultivate an extensive research community that spans the Bank and beyond.

After in-depth consultation with researchers across the Bank and the wider academic community, the Bank has developed five core themes to guide its research: Policy frameworks and interactions; Evaluating regulation, resolution and market structures; Policy operationalisation and implementation; New data, methodologies and approaches; and Response to fundamental change.

They are sharing a lot of historical data under this and should be good for researchers.

the Bank published a supporting discussion paper as well as a high level summary of the five research themes, and released a number of new Bank datasets for use by external researchers. 

Finally, to catalyse interest in the One Bank Research Agenda, the Governor today announced two new competitions sponsored by the Bank – a data visualisation competition using the newly released Bank datasets, and a One Bank research paper competition.

The Governor summarised today’s launch of the One Bank Research Agenda, saying: “Economies are complex, dynamic and constantly evolving systems that are underpinned by social interactions and behavioural change, shaped by fundamental forces like technology and globalisation and supported – or at times disrupted – by finance.

Policymakers need research to help understand these phenomena and to craft our responses to them. And research can make some of its most effective contributions by speaking to the priorities of policy.

Research can help us to discover insights and build them into our policymaking processes.

By focussing on a clear set of research priorities, by opening up our datasets, and by creating tighter links between policymakers and researchers, both within the Bank and across the broader research community, we can advance our mission – promoting the good of the people of the United Kingdom.”

Becoming more and more multiple indicator targeting central bank. The new research themes are also on similar lines.

China’s GIFT city model..

February 25, 2015

Finance is hot again. Despite the west having  serious troubles over regulating their finance sector, the eastern world remains excited.

Indian FinMin recently released a paper on Finance SEZs  where the special zone will have complete freedom in finance. Just like in trade, SEZs are allowed near complete freedom same thing can be applied to Finance SEZs as well. This is of course keeping GIFT city in mind, Indian PM’s pet project when he was the CM of Gujarat.

Interestingly, China has already done something on those lines (how come they are always ahead when we make most of the noise and hype??). Prof. John Whalley has a piece on this:

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Did Adam Smith give grades to students?

February 23, 2015

Prof. Humberto Barreto of  posed this question on a history email forum:

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The calamity behind formation of Fed — an Austrian school perspective..

February 20, 2015

As audit the Fed movement picks up heat, we need to again go back to historical reasons for setting up the central bank. Those who agree with the idea argue Fed has become way too powerful and has created enormous damage with its mon pol. So if we cant end the fed let us audit it. Those who are against the move, say just leave the Fed.

The Austrian school a long critic of central banking and Fed, are surely enjoying this. Long ignored by economists, their arguments are coming to fore pretty naturally given the errors central banks have made across the world.

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