Banks, economists and politicians: just follow the money
Economics rightly comes in for a lot of stick for failing to appreciate the possibility of a financial crash before 2007/8. However it is important to ask whether things would have been very different if it had. What has happened to financial regulation after the crash is a clear indication that it would have made […]
Will income inequality cause a middle-income trap in Asia?
Egawa, Akio. The Asian economy is expected to realise favourable growth during the first half of this century, but there is no guarantee. There is a discussion about a ‘middle-income trap’, which refers to a country that has realised rapid growth to become a middle-income country but is unable to grow further. A middle-income trap could […]
The Legacy of Austerity in the Eurozone
De Grauwe, Paul, Ji, Yuemei. The recent slight improvement in the GDP growth rates in the eurozone has led European policy-makers to proclaim victory and assert that the austerity programmes imposed within the eurozone are paying off. But is this really the case? In this Commentary Paul De Grauwe and Yuemei Ji argue that the improvement […]
Independent monetary policies, synchronised outcomes
Henriksen, Espen, Kydland, Finn & Šustek, Roma. The monetary policy for Eurozone members is one-size-fits-all in an economic area rife with economic differences. Does this really make a difference? This column argues that even if each EZ member state had a fully independent monetary authority, monetary policies would likely still appear highly synchronised across EZ members. Πηγή: […]
Is there a dilemma with the Trilemma?
Klein, Michael, Shambaugh, Jay. The ‘financial trilemma’ – that open capital markets and pegged exchange rates mean a loss of monetary autonomy – has recently been challenged. Some argue that even flexible exchange rates cannot assure monetary autonomy without capital controls, while others argue even countries with fixed exchange rates can gain autonomy through temporary capital […]
Rich Man’s Recovery
Krugman, Paul. A few days ago,The Times published a report on a society that is being undermined by extreme inequality. This society claims to reward the best and brightest regardless of family background. In practice, however, the children of the wealthy benefit from opportunities and connections unavailable to children of the middle and working classes. And […]
Emerging Markets’ Euro Nemesis
Gros, Daniel. Emerging markets’ currencies are crashing, and their central banks are busy tightening policy, trying to stabilize their countries’ financial markets. Who is to blame for this state of affairs? Πηγή: www.project-syndicate.org πλήρες κείμενο
Political challenges of the macroprudential agenda
Chwieroth, Jeffrey, Danielsson, Jon. Central banks frequently lead the macroprudential policy implementation. The hope is that their credibility in conquering inflation might rub off on macroprudential policy. This column argues the opposite. The fuzziness of the macroprudential agenda and the interplay of political pressures may undermine monetary policy. Πηγή: Voxeu πλήρες κείμενο
Dilemma not Trilemma: The global financial cycle and monetary policy independence
Rey, Hélène. The global financial cycle has transformed the well-known trilemma into a ‘dilemma’. Independent monetary policies are possible if and only if the capital account is managed directly or indirectly. This column argues the right policies to deal with the ‘dilemma’ should aim at curbing excessive leverage and credit growth. A combination of macroprudential […]
A new taxonomy of Sudden Stops: Which Sudden Stops should countries be most concerned about?
Cavallo, Eduardo, Powell, Andrew. As emerging markets slow, the fear of ‘sudden stops’ in capital flows is rising. This column presents a new taxonomy of Sudden Stops that is founded on the behaviour of gross and net capital flows. The results raise several puzzles. Given continued financial globalisation, how developing and advanced economies can protect themselves […]