Current-account rebalancing and international transfers (immaculate or not)
Corsetti, Giancarlo, Martin, Philippe & Pesenti, Paolo. Current-account imbalances in Europe are at the heart of the crisis .This column argues that relative price adjustment need not be as dramatic as some observers claim. In order to foster rebalancing, policy should target obstacles to firms’ entry, startup costs, and the incentives for product differentiation, letting […]
Monetary alchemy, fiscal science
Frankel, Jeffrey. 2013 marks the 100th anniversary of US federal income tax and the establishment of the Federal Reserve. What lessons have we learnt about macroeconomic policy since then? This column assesses the postwar lessons and argues that fiscal expansion is much more likely to be effective in the short term than any monetary expansion […]
Jobs and growth are still linked (that is, Okun’s Law still holds)
Ball, Laurence, Leigh, Daniel & Loungani, Prakash. Will recovery be jobless? A broad array of analysts, from Vox columnists to McKinsey, are arguing that Okun’s Law is broken. This column presents new research suggesting that, in fact, Okun is alive and well. When output recovers, the jobs will come back, although employment will differ across countries. There […]
Growth slowdowns redux: Avoiding the middle-income trap
Eichengreen, Barry, Park, Donghyun & Shin, Kwanho. The rapid economic growth of emerging markets is the leading headline of our age. But growth is slowing. Using new research, this column asks why this might be, and how policymakers might remedy flagging economies. The answer seems to be education. Recent research suggests, for instance, that the […]
The appreciating renminbi
Bacchetta, Philippe, Benhima, Kenza & Yannick Kalantzis. China is perennially accused of currency manipulation. Yet, this column argues that a weak currency value doesn’t necessarily reflect currency manipulation. China is a fast growing economy with strong financial frictions and a high saving rate, and such countries naturally have weak currencies. Instead of focussing on accusations […]
Over the Cliff We Go
DeLong, Brandford. Unless something unexpected happens, the United States’ many legislated reductions in taxes over the past 12 years – all of which have been explicitly temporary – will expire simultaneously at the start of 2013. American tax rates will revert overnight to their Clinton-era levels. Πηγή: Project Syndicate πλήρες κείμενο
Farewell to Inflation Targeting?
El-Erian, Mohamed. In a four-day period in mid-December, three seemingly unrelated developments suggested that modern central banking is in the midst of an historic change. The implications go well beyond academia and policy circles. To the extent that this shift gains momentum – which appears likely – it will affect economic performance, the functioning of […]
Why is the Greek economy collapsing? A simple tale of high multipliers and low exports
Alcidi, Cinzia Gros, Daniel. In an attempt to understand why the Greek economy is collapsing, this Commentary points out two key aspects that are often overlooked – the country’s large multiplier and a bad export performance. When combined with the need for a large fiscal adjustment, these factors help explain how fiscal consolidation in Greece has […]
Gross inflows and the incidence of credit booms
Calderón, César, Kubota, Megumi. How can we predict bad credit booms? This column argues that surges in gross private inflows are good predictors of booms in credit markets, especially those booms that end up in a systemic banking crisis. Using quarterly data on gross capital inflows and real credit, gross private inflows remain a useful […]
The hysterical economy
Kotlikoff, Laurence. A ‘self-fulfilling recession’ is a long-established idea in economics. This column argues that the US’s economic malaise continues to be caused by leaders’ hysteria rather than by actual engrained economic problems. Obama and Congress need to stop scaring the nation about the ‘fiscal cliff’ because, ultimately, they are coordinating expectations on there being […]