The ALEC Rankings: Does Smaller Government Mean Higher Growth?
Demonstrating why Menzie Chinn stated, “The ALEC economic outlook ranking is, in my assessment, a manifestation of faith based economics.”
Read more...Category Archives: The dismal science
Michael Pettis: Do Markets Determine the Value of the RMB?
A thorough discussion of the background and implications of the so-far modest devaluation of the RMB.
Read more...Kanbur/Stiglitz: Rent Seeking as a Major Driver of Wealth and Income Inequality
Yves here. This post is wonky but important. While Stiglitz has written regularly about inequality as problematic from an economic perspective, and has mentioned rent seeking as a contributor, to my knowledge, this is the first time he’s said that old theories need to be tossed and that rent seeking is one of the main factors now driving wealth and income inequality.
Read more...Why Bernie Sanders Should Add a Job Guarantee to His Policy Agenda
Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’. And now he should add the Job Guarantee to his list of issues.
Read more...Does a Strong Dollar Hurt Emerging Markets?
Conventional wisdom has it that strengthening dollar hurts emerging markets via a sudden exodus of host money. A new study argues that real economy forces are a bigger driver, specifically lower commodity prices.
Read more...A Pragmatic Approach to External Debt: The Write-Down of Germany’s Debts in 1953
Greece’s crisis has invited comparisons to the 1953 London Debt Agreement, which ended a long period of German default on external debt. Unfortunately for Greece, the motivations driving the 1953 agreement are nearly entirely absent today.
Read more...Perry Mehrling: The Fuss about Market Liquidity
I am SO glad to see this post appear. It’s annoying to see investors and banksters whine that they want more liquidity, as if that were a right.
Read more...Greek Debt Sustainability: The Devil is in the Tails
The debate over Greek debt sustainability is muddied by the fact that different analysts use different definitions. But once you use realistic assumptions, as in “tails risks” are actually pretty likely, Greek debt is obviously not “sustainable”.
Read more...Turbulence and Stability in Financial Markets: China in Recent Times
China is a case study of how liberalization of financial markets has never contributed to stability.
Read more...Bill Black: The OSU Marching Band Exemplifies Why Economists Err by Ignoring Culture
Contemporary economists do not include corruption in their models, yet another reason their models should not be relied on to make policy.
Read more...Debt Miracle: Why the Country that Borrowed the Most Industrialised First
Is debt really that bad? This column looks at the towering debts, rapid tax hikes, and constant state of war that led to Britain’s Industrial Revolution, showing that the devil is in the detail when assessing sovereign debt. When we consider the dangers of debt in today’s world, we should keep an eye on its potential benefits as well.
Read more...Changing Economic Factors and the Rise in Obesity
Obesity is fast becoming a prominent global health issue. This column presents new evidence tentatively suggesting that variables related to the costs of eating – particularly whether there is a big discount warehouse nearby – are leading drivers of the rise in obesity occurring since the early 1980s. These findings should help policymakers work with businesses to find the best solution to tackle obesity.
Read more...Reducing Risk-Taking by Regulating Bonuses: EU vs US Dodd-Frank
Bankers whinge about how much tougher their lives are in the post-crisis world. That is no small degree to central banks’ efforts to prop them up having caught up with their bottom lines
Read more...What’s Wrong with Inflation Targeting?
Macroeconomic policy focused on inflation targeting is likely to deliver neither macroeconomic stability nor economic development, aka sustainable growth.
Read more...The History of European Macroeconomics and Exchange Rate Policy
This is a very readable and important account of how Europe came to embrace some of the key elements of its current monetary policy and exchange rate straitjacket.
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