Negotiations with Greece remain fraught. Only a narrow path has been opened to getting a deal done, and it is far too easy for the parties, for reasons good and bad, to stray from it.

Wave of Defaults, Bankruptcies Spooks Bond Investors

Investors are exiting junk bond funds as bankruptcies rise despite the “recovery” allegedly picking up steam.

Banks are Not Intermediaries of Loanable Funds – and Why This Matters

Problems in the banking sector played a seriously damaging role in the Great Recession. In fact, they continue to. Macroeconomic models failed to explain the interaction between banks and the macro economy. The problem lies with thinking that banks create loans out of existing resources. Instead, they create new money in the form of loans. The traditional model greatly understates bank and macroeconomic risk.

At Emergency Summit, Creditors Plan to Make Greece an Offer It Can’t Refuse

A Eurogroup meeting ended if anything with Greece and its creditors even more alienated from each other.

How Overgrown Financial Service Sectors Kill Growth

It’s now becoming cutting edge conventional wisdom that oversized financial service industries are bad for your economic health. Yet the media is only occasionally and timidly is willing to say that what is good for Jamie Dimon is bad for the rest of us.

What If There is No Deal on Greece?

The alarming part of the deadlock between Greece and its lenders is the lack of a plan on the creditor side to develop a Plan B, a sort of mirror image of the Greek government’s claim that its has bet everything on securing a favorable agreement.

The Empirical Shift in Economics

What’s at stake: Rather than being unified by the application of the common behavioral model of the rational agent, economists increasingly recognize themselves in the careful application of a common empirical toolkit used to tease out causal relationships, creating a premium for papers that mix a clever identification strategy with access to new data.