What future for central banking? Insights from the past
Ugolini, Stefano. While many central bankers feel they are now in unchartered territory, this column argues that history may provide guidance. Going back to a time before central banks, it argues that there are long-term cycles in the evolution of monetary policy – governments have alternatively internalised and externalised money creation. The key to success […]
The group of G20: Trials of global governance in times of crisis
Angeloni, Ignazio. n spite of the disappointing outcome of some recent summits, notably the most recent in Cannes, the G20 is and should remain the cornerstone of the global financial architecture. Its record of performance in the last three years, reviewed in this paper, is mixed but not as unambiguously negative as critics have said. […]
Optimal taxation of top labor incomes: A tale of three elasticities
Piketty, Thomas Saez, Emmanuel & Stantcheva, Stefanie. As protesters occupy Wall Street and cities around the world decrying the disparity between the top 1% and the remaining 99%, CEPR DP8675 investigates the link between skyrocketing inequality and top tax rates in OECD countries. The authors find a strong correlation between tax cuts for the highest earners and […]
How Costly Are Debt Crises?
Furceri, Davide, Zdzienicka, Aleksandra. The aim of this paper is to assess the short- and medium-term impact of debt crises on GDP. Using an unbalanced panel of 154 countries from 1970 to 2008, the paper shows that debt crises produce significant and long-lasting output losses, reducing output by about 10 percent after eight years. The […]
Is Modern Capitalism Sustainable?
Rogoff, Kenneth. I am often asked if the recent global financial crisis marks the beginning of the end of modern capitalism. It is a curious question, because it seems to presume that there is a viable replacement waiting in the wings. The truth of the matter is that, for now at least, the only serious […]
Growth from international capital flows: The role of volatility regimes
Mody Ashoka, Murshid, Antu Panini. Recent commentary has suggested that capital inflows – long considered a positive for growth – may actually be doing more harm than good. This column presents new evidence reinforcing the conventional interpretation. It finds that volatility is the determining factor. With volatility below a threshold, an inflow of foreign capital promotes […]
Νίκος Κουτσιαράς: Περί οικονομικού blogging – σε συνέχειες
Οι David McKenzie και Berk Özler χρησιμοποιούν τυπική εμπειρική ανάλυση προκειμένου να προσδιορίσουν και εκτιμήσουν ποσοτικώς την επίδραση του οικονομικού blogging και, διόλου απροσδόκητα, καταλήγουν σε υποδείξεις που, απλώς (;), υπογραμμίζουν την ανεξίτηλη συνάφεια της Σμιθιανής αοράτου χειρός. Οι οικονομολόγοι bloggers κερδίζουν φήμη – και έπεται το χρήμα. Κατ’ αυτό τον τρόπο, την ίδια στιγμή, […]
Sovereign debt, government myopia, and the financial sector
Acharya, Viral, Rajan, Raghuram. Why do governments repay external borrowing? This column argues that myopic governments seeking popularity do not default when they are poor because they would lose access to debt markets and be forced to reduce spending. And they do not default when rich because of the adverse consequences to the domestic financial […]
Boring Cruel Romantics
Krugman, Paul. There’s a word I keep hearing lately: “technocrat.” Sometimes it’s used as a term of scorn — the creators of the euro, we’re told, were technocrats who failed to take human and cultural factors into account. Sometimes it’s a term of praise: the newly installed prime ministers of Greece and Italy are described […]
The Wages of Economic Ignorance
Skidelsky, Robert. Politicians are masters at “passing the buck.” Everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else. The economy is a classic field for this strategy. Three years after the global economy’s near-collapse, the feeble recovery has already petered out in most developed countries, […]