How does monetary policy respond to financial stress?
Baxa, Jaromír, Horváth, Roman & Vašíček, Bořek. Central bankers focused too much on inflation targets and too little on financial stability – so the criticism goes. This column examines the evidence, with a look at the world’s five major central banks over the last 30 years. Πηγή: Voxeu πλήρες κείμενο
Delivering growth while reducing deficits: lessons from the 1930s
Crafts, Nicolas. Conditions in the 1930s were very similar to those found today: interest rates were already low, the government deficit needed to come down, and the world economy was in disarray. Yet the UK economy grew by almost 20 per cent between 1933 and 1937. This success was built on the government announcing that prices […]
The Problem that Wasn’t: Coordination Failures in Sovereign Debt Restructurings
Bi, Ran, Chamon, Marcos & Zettelmeyer, Jeromin. Contrary to widespread expectation, debt renegotiations in the era of bond finance have generally been quick and involved little litigation. We present a model that rationalizes the initial fears and offers interpretations for why they did not materialize. When the exchange offer is sufficiently attractive vis-à-vis holding out, full participation […]
The financial trilemma in China and a comparative analysis with India
Aizenman, Joshua, Sengupta, Rajeswari. Emerging markets face what some economists are calling a trilemma. They cannot simultaneously target exchange-rate stability, conduct an independent monetary policy, and have full financial integration. So what to do? This column looks at how Asia’s giants are responding – and in different ways. Πηγή: Voxeu πλήρες κείμενο
Cross-Border Banking in the Balance
Berglof, Erik. The gravity of the eurozone crisis has finally sunk in. The stakes could not be higher. Governments and international financial institutions have scrambled to put together a solution within exceedingly tight political and economic constraints. Many questions have yet to be answered about the design; implementation will be at least as challenging. Πηγή: […]
Fiscal consolidation is no indiscriminate belt-tightening
Pisani-Ferry, Jean. In June it was Greece. In August it was France, Italy, Spain and Portugal. In September it was Greece and, once again, Spain. In November, France again. Soon very likely Belgium. And perhaps France for a third time. In spite of an ever-darker economic outlook, every month countries under pressure in the bond […]
Capital controls are exactly wrong for Iceland
Arnason, Ragnar, Danielsson, Jon. The IMF has emerged from the global crisis bigger and more powerful. But this column argues that the capital controls it required Iceland to adopt in 2008 are not of the soft and cuddly modern type that slow hot money flows. Instead they are akin to the draconian controls common in the […]
The relationship between exchange rates and International Trade: a review of economic literature
Auboin, Marc, Ruta, Michele. This paper surveys a wide body of economic literature on the relationship between currencies and trade. Specifically, two main issues are investigated: the impact on international trade of exchange rate volatility and of currency misalignments. Πηγή: World Trade Organization πλήρες κείμενο
European Economic Forecast – autumn 2011
In its latest economic forecast, published on November 10, the European Commission presents its assessment of the economic prospects for the EU and the euro area at the aggregate level. It also analyses developments in all individual Member States, as well as Candidate Countries and the economies of the US, Japan, China, Russia and the […]
Graduates Versus Oligarchs
Krugman, Paul. Dean Baker raises an important point here: it’s really awfully late in the game to be saying that the important inequality issue is college graduates versus non-graduates. It’s not clear that this was ever true, and it certainly hasn’t been true for a while. Πηγή: The New York Times πλήρες κείμενο