Dave here. This is a readable discussion of inequality between nations, but the conclusions suffer from the conceit that people – particularly people in poor countries – have universal freedom, wherewithal and mindset to pick and choose what country to which they want to emigrate. But other than that nitpick, worth a read. By Branko […]
Read more...As many other central banks in the Asian region, the People Bank of China (PBoC) has been on an easing mode for a few months now and more seems to be in the store. The once relatively polarized debate on what the PBoC monetary policy stance should be has increasingly leaned towards additional easing. Some analysts are even proposing full-fledged quantitative easing (QE), in the form of US Treasury sales to raise funds for assets locally, such as local government bonds and other hardly–performing assets. There is no doubt that the PBoC could, thereby, bring another big stimulus into the already heavily massaged Chinese economy as it would help debt-saddled local governments to clean their balance sheets and, at the same time, allow banks’ to lend further. As if this were not enough, any additional easing – capital controls permitting- would also push the RMB to a more depreciated level, bringing thereby an additional push to external demand.
Read more...Mankiw tells us in his most recent NYTimes column that economists agree that Free Trade is good. He links to a poll in which, essentially, mainstream economists of different persuasions, some Keynesian and some not, and different political views, some liberal and some conservative, say that trade agreements are good. He backs his argument by suggesting that theoretically the argument is at the heart of the economics profession since the beginning; I guess an argument of authority.
Read more...A new paper shreds the myths that justified the misguided application of austerity and wage-rate reduction policies in Greece and the Eurozone.
Read more...Compensation for “lost profits” really means “minimizing political risk” for corporations by gutting the ability of democratic governments to protect their citizens.
Read more...Yves here. Color me appalled by the premise of this post. It starts from the assumption that social safety nets are bad because they crowd out “informal institutions” namely family, as the insurer of the last resort. Note it may be unfair to single out this post, since the authors are addressing an apparently conventional […]
Read more...This post serves to illustrate how “economics says” has become a magic talisman in political discourse. Invoking it generally results in the audience accepting what follows, even when it is patent nonsense. Here we see how an editorial writer abjectly misapplied economic theory to justify super-high drug prices.
Read more...Economists still act as if their role in devising the policies that led to the crisis has no bearing on their credibility.
Read more...Yves here. This is a short but important debate over how much to worry about the upcoming train wreck in emerging markets when the Fed finally gets around to tightening. Pettifor sees it as a potential global crisis event; Macrobusiness sees it as a typical emerging markets bust. The Pettifor viewpoint seems more on target. First, […]
Read more...Nobel Prize winner Robert Merton and Arlin Muralidhar have charged ZIRP and QE happy central banks with economic malpractice.
Read more...Looking at slavery from the financial perspective, 1837 looks a lot like the Crash of 2007 – 2008.
Read more...Until we jettison the neoliberal liturgy repeated daily in the press, universities, central banks, and Treasury departments, Schäuble’s Foibles will continue to rule.
Read more...The best budget policy: Let the government deficit float and spend on programs to produce full employmen and solve our many other problems.
Read more...Can capital flows mitigate or even eliminate the problems generated by secular stagnation?
Read more...We’ve regularly derided the notion of “national competitiveness” as a an inevitable accompaniment to the oversold notion of “free trade”. Economists are aware of, yet choose to ignore, the Lipsey-Lancaster theorem, which says when an idealized state cannot be attained, moving closer to it may not be an improvement; it can often produce worse outcomes. You need to evaluate the “second best” options specifically and not go on faith.
But economists and policy makers treat “free trade” as an article of faith, and with that comes the idea that countries must compete to find customers overseas. There is too little consideration of the fallacy of expecting countries to be competitive and by implication, seek to be exporters. It is impossible for all countries to be net exporters. Moreover, countries are often better served to design their policies primarily for the benefit of domestic workers and markets, and to promote export-oriented programs only to the extent that they do not undermine conditions at home, or will clearly produce a net benefit.
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