The fiscal stimulus of 2009-10: Trade openness, fiscal space, and exchange-rate adjustment
Aizenman, Joshua, Jinjarak, Yothin. In the immediate fallout from the global crisis, governments around the world responded by spending big. Yet despite the talk of international coordination, this wasn’t the case in all countries. This column explores why. It finds that trade openness, fiscal space, and exchange-rate policy played a pivotal role. Πηγή: Voxeu πλήρες κείμενο
Europe’s High-Risk Gamble
Feldstein, Martin. The Greek government needs to escape from an otherwise impossible situation. It has an unmanageable level of government debt (150% of GDP, rising this year by ten percentage points), a collapsing economy (with GDP down by more than 7% this year, pushing the unemployment rate up to 16%), a chronic balance-of-payments deficit (now […]
When markets freeze: Tobin’s q and QE
Driffill, John, Miller, Marcus. Just what on earth is going on in the global economy? Rather than get caught up in the hysteria, this column says the answers are best found by looking through the pages of history and dusting down some old textbooks. The economies of the North Atlantic look in poor shape. But it […]
The Great Debt Scare
Shiller, Robert. It might not seem that Europe’s sovereign-debt crisis and growing concern about the United States’ debt position should shake basic economic confidence. But they apparently have. And loss of confidence, by discouraging consumption and investment, can be a self-fulfilling prophecy, causing the economic weakness that is feared. Significant drops in consumer-confidence indices in […]
Irving Fisher would have supported QE
Thorvald Grung Moe. If you haven’t already read Fisher’s 1933 article “The Debt-Deflation Theory of Great Depressions,” read it today. It contains his theory of booms and busts that later inspired Hyman Minsky to develop the Financial Instability Hypothesis (HM duly acknowledged his debt to Fisher in his 1986 book). Fisher’s article is unfortunately becoming […]
Rethinking Central Banking
This report was written by The Committee on International Economic and Policy Reform, a non-partisan and non-ideological group of independent experts, comprised of academics and former government and central bank officials. The objective of the group is to analyze global monetary and financial problems, offer systematic analysis and advance reform ideas that would ordinarily not […]
Reforming the International Monetary System
Farhi, Emmanuel, Gourinchas, Pierre-Olivier & Rey, Hélène. Some prominent economists argue that failures in the international monetary system are the root cause of the global crisis. This column introduces a new eReport arguing that, at the very least, the international monetary system is inefficient and destabilising for the global economy. It proposes a number of reforms, the […]
Public Debts: Nuts, Bolts and Worries
Eichengreen, Barry, Feldman, Robert, Liebman, Jeffrey, Von Hagen, Jürgen & Wyplosz, Charles. The thirteenth Geneva Report on the World Economy examines the fiscal woes of the US, the EU and Japan. Each faces serious medium term challenges, but they have arisen in different ways and admit of no common solution. Faster growth would help in each case: Japan’s difficulties […]
Will the US dollar be dethroned as the global currency?
Darvas, Zsolt. Can the euro or the Chinese renminbi challenge the supremacy of the dollar? The US dollar still dominates global currency markets. It has appreciated sharply at the outbreak of the recent global financial crisis. This is remarkable, since risky American financial structures were the prime reason behind the crisis. The US economy accumulated […]
Do equity price drops foreshadow recessions?
Bluedorn, Jogn, Decressin, Jörg & Terrones, Marco. There are concerns that the recent sharp drop in equity prices in the advanced economies may signal a rise in the risk of a double-dip recession. This column examines the performance of equity prices as predictors of new recessions in the G7 economies. The findings suggest that equity prices are […]