The Great Economic Divide Makes Everyone Poorer
Thoma, Mark. The argument that the rich should pay a larger share of our tax bill than the poor does not rest upon fairness alone. As Robert Frank explains in his book The Darwin Economy, requiring the rich to pay a larger share allows us to have more goods and services than we would have […]
Europe must change course on banks
Veron, Nicolas. The Eurozone crisis keeps evolving along multiple dimensions. On the sovereign debt front, no deal is yet in sight on Greece’s debt restructuring, and Italy and Spain face major refinancing needs in early 2012. On the institutional reform front, the summit on December 9 fell short of delivering a true fiscal union, and […]
Global savings glut or global banking glut?
Hyun Song Shin. It has become commonplace to assert that current-account imbalances were a key factor in stoking subprime lending in the US. This column says the ‘global banking glut’, i.e. the rise in cross-border lending, may have been more culpable for the crisis than the ‘global savings glut’. As the European banking crisis deepens, […]
EU Admits Austerity Risk For Jobs
Froymovich, Riva. A new report released by the European Commission late last week underlines the devastating consequences of the financial crisis on youth employment, and acknowledged the difficulty in implementing policies to alleviate this crisis as the European Union focuses on austerity. Πηγή: The Wall Street Journal πλήρες κείμενο
Examples of Currency Breakup
Varma, Jayath. Since the prophets of gloom and doom are now talking openly of a possible breakup of the euro zone, I thought it would be useful to look back at some instances of breakup of currencies to see what really happens. I have chosen some examples based on my familiarity with them and describe […]
Keynesophobia
Krugman, Paul. Dean Baker is once again justifiably mad at Robert Samuelson. It is indeed frustrating that after three years in which Keynesian predictions have been spectacularly correct, pundits insist on reading the evidence as a rejection of Keynes. Πηγή: The New York Times πλήρες κείμενο
Lessons from a century of large public debt reductions and build-ups
Abbas, Ali, Belhocine, Nazim, El-Ganainy, Asmaa & Horton, Mark. As policymakers continue to grapple with high debts and the troubles that come with them, this column looks at the lessons from data on public debt in 178 countries stretching back as far as 1880. It argues that when faced with an unsustainable debt burden, slow but steady adjustment […]
Rating agencies and sovereign credit risk assessmen
Véron, Nicolas, Wolff, Gunstram. Credit rating agencies (CRAs) have not consistently met the expectations placed on them by investors and policymakers. It is difficult, however, to improve the quality of ratings through regulatory initiatives. In the short term, changes to the CRAs’ regulatory environment, in a context of high market uncertainty, may add to market […]
China’s dominance hypothesis and the emergence of a tripolar global currency system
Fratzscher, Marcel, Mehl, Arnaud. Is the international monetary system tripolar – with the US dollar, the euro, and the Chinese renminbi at each corner? This column presents empirical evidence to suggest that the renminbi is already well on its way to being the dominant currency in Asia. Πηγή: Voxeu πλήρες κείμενο
How did multinational banks weather the previous perfect storm?
De Haas, Ralph, Van Lelyveld, Iman. In the current financial turmoil, does it pay to have domestically owned banks or foreign-owned ones? This column looks at the lending behaviour of multinational banks the last time financial markets were in crisis in late 2008. It concludes that while multinational banks may contribute to financial stability during […]