Australia and Canada – Education Superpowers

Foreign students make a beeline for Australia and Canada:

http://www.economist.com/news/leaders/21689545-shrewd-governments-welcome-foreign-students-stupid-ones-block-and-expel-them-train-em-up-kick

“Australia is the leader: a quarter of its tertiary students come from abroad, a bigger share than in any other country. Education is now its biggest export, after natural resources. For a while the influx of brainy foreigners was slowed by an overvalued currency and the reputational damage from the collapse of some badly run private colleges. But recently the Australian dollar has weakened, degree mills have been shut down, visa rules have been relaxed—and foreign students have flooded back. Last year their numbers rose by 10%.”

Asian Education Hubs

http://wenr.wes.org/2015/07/developing-international-education-hubs-asia/

Policy Interest Rates in Advanced Economies

BOE – Will Rate Liftoff Actually Occur in 2016?

http://www.theguardian.com/business/2016/jan/31/bank-of-england-governor-bluffing-interest-rates

BOJ pushes rates into negative territory

http://www.boj.or.jp/en/announcements/release_2016/k160129b.pdf

http://www.nytimes.com/2016/01/30/business/international/japan-interest-rate.html

Negative rates in Europe

http://www.bloomberg.com/news/articles/2016-01-29/central-banks-intensify-negative-campaign-in-hunt-for-inflation

Oil Price Crash - Saudi Economy Takes a Hit

Oil-dependent Saudi Arabia starts to feel the ill-effects of the commodity crash:
http://www.telegraph.co.uk/finance/economics/12130181/Oil-price-crash-Saudis-told-to-embrace-austerity-as-debt-defaults-loom.html

Education Premium on the Rise

Earnings of College Graduates Rebound Sharply:

http://www.wsj.com/articles/ny-fed-report-finds-rising-incomes-falling-unemployment-for-young-college-graduates-1454079989

““After the great recession, there was a lot of concern about people graduating, not being able to get a job,” said Richard Dietz, a senior economist at the New York Fed. People became uncertain “whether a college degree was worth it anymore.”

Mr. Dietz and his colleague Jaison Abel developed this new data, which the New York Fed will begin to publish on a regular basis, to answer whether the benefits of college were beginning to deteriorate.

The newest data put that question to rest, at least for now. Bachelor’s degree holders earned a median $43,000 last year, an increase of more than $3,000 from the year before. That was the highest since 2003, showing that the job market for freshly minted graduates has nearly recovered to the best years on record. Incomes are rising even faster for college students in the best majors. The top 25% of young college graduates earn at least $60,000 a year.”

Addressing Basic Misconceptions Regarding International Trade

A widely held view amongst politicians and the citizenry in general is that imports are bad, exports are good and trade deficits ought to be avoided at all costs. This is a mistaken view that even some economists (and economics professors) hold. Here are a few clarifications:

http://force4good.me/2015/05/05/imports-trade-deficits-and-the-economy/

https://www.aei.org/publication/imports-and-trade-deficits-do-not-hinder-economic-growth-and-are-not-a-setback-for-the-us-economy/

The Trade-Balance Creed by Daniel Griswold

http://object.cato.org/sites/cato.org/files/pubs/pdf/tpa-045.pdf

Related:

The Myths of China’s Currency ‘Manipulation’ by MATTHEW J. SLAUGHTER

http://www.wsj.com/articles/the-myths-of-chinas-currency-manipulation-1452296887

Asset Bubbles and Financial Crashes

Fund manager William Littlewood’s unconventional take on global financial risks

http://www.telegraph.co.uk/finance/personalfinance/investing/12128140/China-in-crisis-Another-credit-crunch-in-the-West-is-far-more-likely.html

“My greater concern is that while looking for troubles in the East, investors are neglecting unsolved problems in the west. In the context of poor growth, the high levels of sovereign debt in many developed nations are unsustainable. This has been masked temporarily by the actions of central bankers, who have suppressed interest rates to historical lows and in turn made borrowing costs appear manageable.”

US Foreign Policy in a Rapidly Changing World

Professor Stephen Walt’s succinct summary of US Mideast Policy:

http://foreignpolicy.com/2016/01/29/the-u-s-should-admit-it-has-no-middle-east-policy-obama-cold-war-israel-syria/

“One thing is clear: The playbook we’ve been using since the 1940s isn’t going to cut it anymore. We still seem to think the Middle East can be managed if we curry favor with local autocrats, back Israel to the hilt, constantly reiterate the need for U.S. “leadership,” and when all else fails, blow some stuff up. But this approach is manifestly not working, and principles that informed U.S. policy in the past are no longer helpful.”

Related:

What Would a Realist World Have Looked Like?

An extraordinary and thought-provoking piece by Stephen Walt (Professor of International Relations at Harvard University):

http://foreignpolicy.com/2016/01/08/what-would-a-realist-world-have-looked-like-iraq-syria-iran-obama-bush-clinton/

Professor Walt’s description of the realist school of international affairs:

“Realism sees power as the centerpiece of political life and sees states as primarily concerned with ensuring their own security in a world where there’s no world government to protect them from others. Realists believe military power is essential to preserving a state’s independence and autonomy, but they recognize it is a crude instrument that often produces unintended consequences. Realists believe nationalism and other local identities are powerful and enduring; states are mostly selfish; altruism is rare; trust is hard to come by; and norms and institutions have a limited impact on what powerful states do. In short, realists have a generally pessimistic view of international affairs and are wary of efforts to remake the world according to some ideological blueprint, no matter how appealing it might be in the abstract.”

Machine Translation and the Future

A potentially revolutionary technological breakthrough:

http://www.wsj.com/articles/the-language-barrier-is-about-to-fall-1454077968

Alec Ross states:

“Today’s translation tools were developed by computing more than a billion translations a day for over 200 million people. With the exponential growth in data, that number of translations will soon be made in an afternoon, then in an hour. The machines will grow exponentially more accurate and be able to parse the smallest detail. Whenever the machine translations get it wrong, users can flag the error—and that data, too, will be incorporated into future attempts. It is just a matter of more data, more computing power and better software. These will come with the passage of time and will fill in the communication gaps in areas including pronunciation and interpreting a spoken response. The most interesting innovations will come with the hardware development for the human interface. In 10 years, a small earpiece will whisper what is being said to you in your native language nearly simultaneously as a foreign language is being spoken. The lag time will be the speed of sound.”

ECONOMIC HISTORY LESSON – US ECONOMY IN THE 19th CENTURY

A timely and relevant piece from the WSJ: Market Crashes, Stock Scandals: Lessons From the U.S. Frontier
http://www.wsj.com/articles/market-crashes-stock-scandals-lessons-from-the-u-s-frontier-1453955670

Long-Run US Economic Growth

Long-Run US Economic Growth

Related: http://vivekjayakumar.blogspot.com/2016/01/robert-gordons-rise-and-fall-of.html

US Economy Weakens

US Economy – Not A Standout After all
http://blogs.wsj.com/briefly/2016/01/29/fourth-quarter-u-s-growth-the-numbers/
http://www.bloomberg.com/news/articles/2016-01-29/economic-growth-cools-as-american-consumers-temper-spending

From BRICs to TICKs – Changes in the Emerging World

FT notes that “Tech-heavy Taiwan, India, China and Korea are the new darlings of the EM world”:
http://www.ft.com/cms/s/2/b1756028-c355-11e5-808f-8231cd71622e.html

The Fed and the Markets

As expected the FOMC decided not to hike rates at its Jan 27, 2016 meeting:

http://www.federalreserve.gov/newsevents/press/monetary/20160127a.htm

The Fed is, however, keeping a March rate hike on the table and this spooking the financial markets:
http://www.wsj.com/articles/why-the-fed-has-the-stock-market-spooked-1453925066

Corruption in the Public Sector Hinders Economic Development

Interesting new report on perceptions of corruption in public sectors worldwide:
http://www.theguardian.com/global-development/2016/jan/27/index-perceived-corruption-billions-locked-in-poverty-by-public-sector
“More than 6 billion people live in countries where serious levels of public sector corruption are fueling inequality and exploitation and locking millions of men, women and children into poverty”

It is worth keeping in mind that the Corruption Perception Index is a flawed measure of actual corruption levels:
https://www.washingtonpost.com/news/monkey-cage/wp/2016/01/27/how-do-you-measure-corruption-transparency-international-does-its-best-and-thats-useful/

I would add the following critique to those noted in the above Washington Post column:
Lobbying is considered a perfectly legal practice in America - in the rest of the world such actions would be referred to as bribery/influence peddling.
http://www.latimes.com/opinion/op-ed/la-oe-dovi-officials-lobbyists-20150217-story.html
The revolving door policy for top officials/partners at the US Treasury-Federal Reserve Bank-Goldman Sachs complex barely raises any sort of conflict-of-interest concerns in America and is considered perfectly legal.
http://www.marketwatch.com/story/at-the-fed-kashkari-appointment-makes-vampire-squid-moniker-apt-2015-11-10

Globalization and the Irrelevance of the Nationality of Automakers

It is increasingly hard to distinguish the true nationality of various popular car makes. As the BBC piece Is it time to stop thinking of cars in terms of nationality? notes:

http://www.bbc.com/news/business-35330292

“What makes a car German, American or Japanese?

Is it where it is designed, where the parts are manufactured, or where those parts are assembled? Or is it where the brand owner is based?

The answer is more complicated than you may think.”

Related -

An important paper on global supply chains:

Baldwin, Richard and Lopez-Gonzalez, Javier, (2013), Supply-Chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses, No 18957, NBER Working Papers, National Bureau of Economic Research, Inc.

Abstract: The trade linked to international production networks - supply-chain trade for short - is associated with momentous global economic changes. This paper presents a portrait of the global pattern of supply-chain trade and how it has evolved since 1995. The paper draws on a variety of data sources but most heavily on the recent World Input-Output Database. China's supply-chain trade receives special attention.

Roach on China’s Economic Rebalancing

Yale economist Stephen Roach on China’s Structural Reforms – 

http://www.project-syndicate.org/commentary/china-crisis-false-alarm-by-stephen-s--roach-2016-01

News and Algorithmic Driven High Frequency Trading

A very interesting piece - The risks of fast news analytics and institutional trading

http://forbesindia.com/article/insead/the-risks-of-fast-news-analytics-and-institutional-trading/42007/1

“Institutional traders in financial markets are increasingly sourcing information from ‘sentiment’ indicators; analytics created by computer algorithms from real-time content published by Dow Jones Newswires, Bloomberg, Thomson Reuters and other wire services. These indicators can tell traders within milliseconds whether an article is positive or negative and whether it contains relevant information affecting a firm’s value.

While this “meta-information” can provide a competitive advantage to its users (mainly high frequency and algorithmic traders like hedge funds), low-latency signals can lead to unintended consequences when algorithms automatically initiate trades based on inaccurate information.”

Dani Rodrik's "Economic Rules"

Robert Gordon's "The Rise and Fall of American Growth"

Robert Gordon’s recently published book “The Rise and Fall of American Growth” (Princeton University Press) has already generated considerable debate and will likely be the most influential book of the year. Here are a few reviews of the excellent book:

Paul Krugman’s Review:

http://www.nytimes.com/2016/01/31/books/review/the-powers-that-were.html

Krugman notes –

“Robert J. Gordon, a distinguished macro­economist and economic historian at Northwestern, has been arguing for a long time against the techno-optimism that saturates our culture, with its constant assertion that we’re in the midst of revolutionary change. Starting at the height of the dot-com frenzy, he has repeatedly called for perspective: Developments in information and communication technology, he has insisted, just don’t measure up to past achievements. Specifically, he has argued that the I.T. revolution is less important than any one of the five Great Inventions that powered economic growth from 1870 to 1970: electricity, urban sanitation, chemicals and pharmaceuticals, the internal combustion engine and modern communication.”

Harvard economist Edward Glaeser's thoughtful review in the WSJ:

http://www.wsj.com/articles/those-were-the-daysthe-problem-of-growth-1452889499

Other reviews

http://www.economist.com/news/books-and-arts/21685437-why-economic-growth-soared-america-early-20th-century-and-why-it-wont-be

http://www.nytimes.com/2016/01/20/business/economy/a-somber-view-of-americas-pace-of-progress.html

Is Fed Policy Responsible for Recent Market Turmoil?

Greg Ip of WSJ argues that policy actions/indications by the Federal Reserve have contributed significantly to the recent market turmoil:

http://www.wsj.com/articles/why-the-fed-is-the-root-of-much-market-turmoil-1453717801

“When short-term rates are around zero and thus can’t change much, the Fed relies even more on broader financial conditions to affect growth—and has even less say in the outcome. It is reminiscent of the 19th century when central banks were less important or nonexistent.

“If you are a central bank reliant on increasing risk as your method for stoking spending you’re going to run into a major problem,” says Peter Berezin of BCA Research. “You can only increase risk so much. And when investors pull back, they do so in a very sharp way.”

The commodity boom had real drivers, namely the U.S. shale-oil revolution and China. But central banks greased the skids. Investors, seeking something better than the paltry returns on bank deposits and Treasury bonds, threw money at emerging-market countries and energy companies.”

Superconductors and String Theory

Interesting interview – Harvard Physicist Subir Sachdev

https://www.quantamagazine.org/20160121-superconductors-and-string-theory/

FT 2016 Global MBA Ranking

The latest business school ranking from the Financial Times
http://rankings.ft.com/exportranking/global-mba-ranking-2016/pdf

Related:

http://im.ft-static.com/content/images/f07a9c2c-bf1b-11e5-846f-79b0e3d20eaf.pdf

Likelihood of an Economic Downturn in the US

Recession in the US?

WSJ piece notes:

http://www.wsj.com/articles/recession-signs-are-flashing-red-1453661989

“Every U.S. recession since World War II has been foretold by sharp declines in industrial production, corporate profits and the stock market.

Those ill omens have aligned again.”

Taking stock of current economic conditions -

http://www.bloomberg.com/graphics/2016-another-recession/

Timing Financial Market Turning Points

Are financial markets disconnected from fundamentals?

http://www.bloomberg.com/news/articles/2016-01-22/market-oddities-abound-as-big-mac-yields-valuations-head-south

Some US equity market prognosticators warn of a potentially sharp correction:

http://www.cnbc.com/2016/01/19/cramer-charts-showing-a-huge-sp-correction-could-be-coming.html

http://www.cnbc.com/2016/01/22/markets-in-store-for-a-thundering-reset-former-official-says.html

Flint, Michigan and Infrastructure Spending

Entrepreneurship and Loss of Economic Dynamism – US Case Study

Is the regulatory environment responsible for the decline in American economic dynamism?

http://bloombergview.com/articles/2016-01-20/why-america-stopped-being-a-startup-nation

Slowdown in Startup Creation

http://www.washingtonpost.com/sf/business/2014/12/17/the-great-start-up-slowdown/

Interview – Economist John Haltiwanger

https://www.richmondfed.org/~/media/richmondfedorg/publications/research/econ_focus/2013/q2/pdf/interview.pdf

Related:

Tech Startups and Silicon Valley

http://www.economist.com/news/briefing/21659722-tech-boom-may-get-bumpy-it-will-not-end-repeat-dotcom-crash-fly

Freedom in the Modern World

A great piece from NYT’s Roger Cohen on the lack of genuine freedom:

http://www.nytimes.com/2016/01/22/opinion/ways-to-be-free.html

Cohen observes:

“I don’t know if the world is freer than a half-century ago. On paper, it is. The totalitarian Soviet Imperium is gone. The generals who bossed Latin America are gone, generally. Asia has unshackled itself and claims this century as its own. Media has opened out, gone social.

Yet minds feel more crimped, fear more pervasive, possibility more limited, adventure more choreographed, politics more stale, economics more skewed, pressure more crushing, escape more elusive….

I don’t think it’s that the world’s more dangerous. I think it’s that people are more frightened. Fear is a much-trafficked commodity.”

Oil and the Global Economy

Update: Huge savings accrue to China

http://www.bloomberg.com/news/articles/2016-01-24/china-spurred-commodities-rout-brings-home-460-billion-dividend

Update: Low Oil Prices and the US Economy
http://www.nytimes.com/2016/01/22/business/energy-environment/this-time-cheaper-oil-does-little-for-the-us-economy.html

Oil and the Global Economy

http://www.economist.com/news/briefing/21688919-plunging-prices-have-neither-halted-oil-production-nor-stimulated-surge-global-growth

Saudi Arabia Dismisses Calls for Production Cuts

http://www.telegraph.co.uk/finance/oilprices/12113876/No-end-to-oil-rout-as-Saudi-Arabia-plays-tough.html

Russian Economic Woes

http://www.economist.com/news/finance-and-economics/21688932-russias-economic-problems-move-acute-chronic-phase-two

Related:

Does the decline in oil prices help or hurt the global economy?

http://www.theguardian.com/business/2016/jan/17/why-falling-oil-price-not-mean-global-economic-boom

http://www.bloombergview.com/articles/2016-01-14/oil-s-plunge-is-wonderful-news-for-most-of-us

Wise words from FT:

http://www.ft.com/cms/s/0/f049b3f2-bb90-11e5-b151-8e15c9a029fb.html
“While there are undoubtedly some losers from the fall in the price of crude, notably oil-exporting countries and banks exposed to the energy sector, the boost to real incomes in the rest of the world should outweigh them.”

Shipping and Globalization

Suez Canal and Panama Canal - Expansion Dreams

http://qz.com/470696/the-suez-and-panama-canals-are-being-expanded-but-some-ships-still-wont-fit-into-either/

World’s Largest Container Ships – Economics of Big-Box Ocean Freighters:

http://www.economist.com/news/business/21677209-largest-container-lines-are-bulking-up-try-withstand-fresh-downturn-big-box-game

Current Challenges - Shipping’s globalization woes by Gilian Tett (FT) – [Gated]
http://www.ft.com/cms/s/0/c9c465de-ba0e-11e5-bf7e-8a339b6f2164.html

India: Bright Spot in a Gloomy World Economy

Franklin Templeton’s Mark Mobius on the Indian Economy

http://forbesindia.com/article/2016-a-make-or-break-year-for-india/india-is-on-the-right-track-mark-mobius/41925/1

The Last BRIC standing – Fortune Magazine

http://fortune.com/2015/12/28/bric-countries-india-narendra-modi/

Global Liquidity Crunch/Global Financial Crisis Ahead?

Rising concerns regarding the health of the global economy:

http://www.telegraph.co.uk/finance/financetopics/davos/12108569/World-faces-wave-of-epic-debt-defaults-fears-central-bank-veteran.html

http://www.newyorker.com/news/john-cassidy/what-is-the-post-post-davos-model-of-the-world


Is the EU on the brink of collapse?
Financier and philanthropist George Soros warns that the migrant crisis may be pushing the EU towards a full-fledged crisis:
http://www.nybooks.com/articles/2016/02/11/europe-verge-collapse-interview/

IMF - Global Economic Outlook

IMF's WEO 2016 Jan Update:
http://www.imf.org/external/pubs/ft/weo/2016/update/01/pdf/0116.pdf

Chinese Equity Markets and the Real Economy

A great piece from Harvard economist Jeffrey Frankel:
http://www.project-syndicate.org/commentary/china-stock-market-economic-slowdown-by-jeffrey-frankel-2016-01

Related:

Chinese Politics

http://www.economist.com/news/briefing/21688399-their-response-wobbly-markets-chinas-leaders-reveal-their-fears-crisis-faith

China’s exchange rate conundrum

http://www.economist.com/news/finance-and-economics/21688440-chinas-leaders-face-menu-unappealing-exchange-rate-options-fight-or-flight

America's Strange Legal System

Genius and Dislocation

A brilliant piece – The Secret of Immigrant Genius: Having your world turned upside down sparks creative thinking by ERIC WEINER

http://www.wsj.com/articles/the-secret-of-immigrant-genius-1452875951

“Scan the roster of history’s intellectual and artistic giants, and you quickly notice something remarkable: Many were immigrants or refugees, from Victor Hugo, W.H. Auden and Vladimir Nabokov to Nikolas Tesla, Marie Curie and Sigmund Freud. At the top of this pantheon sits the genius’s genius: Einstein. His “miracle year” of 1905, when he published no fewer than four groundbreaking scientific papers, occurred after he had emigrated from Germany to Switzerland.

Lost in today’s immigration debate is this unavoidable fact: An awful lot of brilliant minds blossomed in alien soil. That is especially true of the U.S., a nation defined by the creative zeal of the newcomer. Today, foreign-born residents account for only 13% of the U.S. population but hold nearly a third of all patents and a quarter of all Nobel Prizes awarded to Americans.”

Interview - Roland Fryer

FT Weekend Interview – Roland Fryer

http://www.ft.com/cms/s/0/89b97964-b88a-11e5-b151-8e15c9a029fb.html

“Understanding what is really going on led last year to Fryer, 38, winning the John Bates Clark medal, an annual award for an American economist under 40 and arguably the second most prestigious economics gong after the Nobel Prize. His empirical work has eviscerated stodgy thinking about race, education and inequality. Through his Education Innovation Lab, founded in 2008, Fryer is attempting to reshape how America thinks about public policy, statistic by statistic.”

International Affairs - Useful Readings

The Challenges of Achieving Peace in South Asia

The Pakistani Dystopia BY DEXTER FILKINS

http://www.newyorker.com/news/news-desk/the-pakistani-dystopia

Russian Critique of US Electoral System

http://www.bloombergview.com/articles/2016-01-15/putin-s-pointers-for-u-s-democracy

“It was Lavrov's critique of the U.S. system that may deserve the most attention, however. In late December, he said elections are too frequent. "It often happens," the Russian foreign minister explained, "that the most important global problems become hostage to the electoral considerations of the governing establishment in the U.S., which only thinks about making timely moves on the international stage to win additional points for its party's candidates."”

Was John Maynard Keynes a Lousy Currency Trader?

A fascinating piece in the NYT:

http://www.nytimes.com/2016/01/12/upshot/john-maynard-keynes-great-economist-terrible-currency-trader.html

“Are there any lessons to be had from the trading records of a man who died 70 years ago? Just maybe. The first is the simplest: In financial markets, being brilliant isn’t enough. The best traders have to not only understand the fundamentals of the asset they are trading, but also have almost a sixth sense for how the timing and momentum within markets will evolve. You can lose a lot of money having the right idea at the wrong time. The second is that even skilled traders may need to be willing to incur major losses — which explains why hedge funds that face redemption requests from investors can face major problems even when their underlying investment thesis is right.”

Related:

John Maynard Keynes on Stock Markets and Liquidity:

http://www.pbs.org/newshour/making-sense/john-maynard-keynes-stock-market-past-week/

[Note: KEYNES was a pretty good stock market investor]

History Lesson – Stock Market Panics and Regulatory Responses

A timely piece from Stephen Mihm:

http://www.bloombergview.com/articles/2016-01-13/china-isn-t-the-first-to-fumble-a-stock-panic

Global Shocks and the US Economy

Global Shocks and the US Economy - Greg Ip's insightful commentary

http://www.wsj.com/articles/china-oil-show-peril-of-faulty-assumptions-1452705708

Morgan Stanley's Ruchir Sharma states his case for why the US cannot escape the global economic slowdown:
http://www.wsj.com/articles/the-global-slowdown-hits-the-u-s-1452641770

Global Energy - Recent Developments

Bloomberg Businessweek on Iran’s Energy Sector

Fascinating Bloomberg Businessweek piece - Can Elham Hassanzadeh get Iran’s oil flowing again?:

http://www.bloomberg.com/news/articles/2016-01-13/the-woman-shaping-iran-s-oil-future

The piece notes:

“While graybeards in turbans generate most of the headlines, it’s the young who are driving Iran’s reengagement with the West. Two-thirds of the nation’s 78 million people are under 35; almost 60 percent of high school graduates attend college, roughly the same rate as in Britain and France.”

Low Oil Prices – A Boon for India and China [Two Major Importers of Crude Oil]

http://www.platts.com/latest-news/oil/singapore/analysis-amid-oil-price-pain-india-china-eye-27137505

Profiles of Prominent Economists

Lars Peter Hansen

https://www.minneapolisfed.org/~/media/files/pubs/region/15-12/interview-with-lars-hansen.pdf

Gita Gopinath

http://www.bloomberg.com/news/2013-02-06/harvard-s-gopinath-helps-france-beat-euro-straitjacket.html

Raghuram Rajan

http://www.imf.org/external/pubs/ft/fandd/2015/03/pdf/people.pdf

Kristin Forbes

http://www.bloomberg.com/news/2013-01-25/contagion-thesis-once-derided-proven-by-kristin-forbes.html

Helene Rey

http://www.imf.org/external/pubs/ft/fandd/2015/06/pdf/people.pdf

http://www.bloomberg.com/news/2013-03-28/proving-greenspan-wrong-shows-why-rey-became-worthy-to-bernanke.html

Susan Athey

http://www.bloomberg.com/news/2013-06-26/stanford-economist-musters-big-data-to-shape-web-future.html

https://www.minneapolisfed.org/~/media/files/pubs/region/13-06/susan_athey_interview_june_2013.pdf

Monika Piazzesi

http://www.bloomberg.com/news/2013-12-12/stanford-economist-piazzesi-influences-fed-forecasts.html

Michael Woodford

https://www.minneapolisfed.org/publications/the-region/interview-with-michael-woodford

http://www.bloomberg.com/news/2013-09-09/woodford-s-theories-rooted-in-japan-slump-embraced-by-bernanke.html

Stanley Fischer

http://www.politico.com/story/2015/01/stanley-fischer-janet-yellen-113891.html

http://www.imf.org/external/pubs/ft/fandd/2013/09/pdf/people.pdf

Raj Chetty

https://www.minneapolisfed.org/~/media/files/pubs/region/14-12/region_dec2014_chetty.pdf

http://www.aeaweb.org/honors_awards/bios/Raj_Chetty.php

Avinash Dixit

http://www.imf.org/external/pubs/ft/fandd/2010/12/pdf/people.pdf

Robert Solow

http://www.imf.org/external/pubs/ft/fandd/2011/03/pdf/people_sprd.pdf

Esther Duflo

http://www.newyorker.com/magazine/2010/05/17/the-poverty-lab

https://www.minneapolisfed.org/~/media/files/pubs/region/11-12/interview_esther_duflo_dec2011_region.pdf

Alvin Roth

http://www.imf.org/external/pubs/ft/fandd/2014/12/pdf/people.pdf

Kenneth Arrow

http://www.imf.org/external/pubs/ft/fandd/2014/09/pdf/people.pdf

Christopher Pissarides

http://www.imf.org/external/pubs/ft/fandd/2014/06/pdf/people.pdf

Lucrezia Reichlin

http://www.imf.org/external/pubs/ft/fandd/2014/03/pdf/people.pdf

Peter Blair Henry

http://www.imf.org/external/pubs/ft/fandd/2013/12/pdf/people.pdf

Carmen M. Reinhart

http://www.imf.org/external/pubs/ft/fandd/2013/06/pdf/people.pdf

Christina Romer

http://www.imf.org/external/pubs/ft/fandd/2013/03/pdf/people.pdf

Jeffrey Sachs

http://www.imf.org/external/pubs/ft/fandd/2012/12/pdf/people.pdf

Justin Yifu Lin

http://www.imf.org/external/pubs/ft/fandd/2012/09/pdf/people.pdf

http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_osnos

Brazil's Inflation Woes

Brazil's inflation rate has remained persistently above central bank target:
http://www.bloomberg.com/news/articles/2016-01-12/here-s-why-brazil-s-inflation-won-t-hit-target-anytime-soon

Space Oddity [David Bowie Tribute]

David Bowie died at the age of 69
http://www.bbc.com/news/entertainment-arts-35278872

Confirmation Bias and the Social Media

How Facebook Makes Us Dumber by Cass R. Sunstein

http://www.bloombergview.com/articles/2016-01-08/how-facebook-makes-us-dumber

Cass Sunstein observes:

“Why does misinformation spread so quickly on the social media? Why doesn’t it get corrected? When the truth is so easy to find, why do people accept falsehoods?

A new study focusing on Facebook users provides strong evidence that the explanation is confirmation bias: people’s tendency to seek out information that confirms their beliefs, and to ignore contrary information.

Confirmation bias turns out to play a pivotal role in the creation of online echo chambers. This finding bears on a wide range of issues, including the current presidential campaign, the acceptance of conspiracy theories and competing positions in international disputes.”

Dispelling Myths Surrounding China's Economy

HIGHLY RECOMMENDED

Cornell University economist Eswar Prasad on the popular misconceptions regarding the Chinese economy:

https://www.washingtonpost.com/opinions/five-myths-about-chinas-economy/2016/01/07/08a8d5e6-b4c4-11e5-a842-0feb51d1d124_story.html

Related:

The Myths of China’s Currency ‘Manipulation’ by MATTHEW J. SLAUGHTER

http://www.wsj.com/articles/the-myths-of-chinas-currency-manipulation-1452296887

Corruption, Corporate Concentration and Electoral Power – US Edition

An extraordinary story from the New Yorker:

http://www.newyorker.com/business/currency/how-the-las-vegas-review-journal-unmasked-its-owners

Paul Krugman’s insightful column: Privilege, Pathology and Power

http://www.nytimes.com/2016/01/01/opinion/privilege-pathology-and-power.html

Related:

http://www.nytimes.com/2016/01/03/business/media/sheldon-adelsonspurchase-of-las-vegas-paper-seen-as-a-power-play.html

http://www.nytimes.com/2016/01/06/business/media/las-vegas-news-staff-advised-on-covering-adelson.html

Illusion of Paper Wealth

Valuation effects matter significantly in estimating the wealth of the richest people in the world:
http://www.bloomberg.com/news/articles/2016-01-08/world-s-richest-lose-194-billion-in-first-trading-week-of-2016

Geopolitics and the Global Economy

Nobel Laureate Joe Stiglitz offers an analysis of key recent developments:
http://www.project-syndicate.org/commentary/hope-for-better-global-governance-by-joseph-e--stiglitz-2016-01

Economic Forecasting – An Imperfect Science

A great piece from The Economist:

http://www.economist.com/node/21685480

"The only function of economic forecasting is to make astrology look respectable”- J.K. Galbraith

Tackling Endemic Corruption

Corruption in Africa – Positive Changes Ahead?

Many countries in Africa are finally getting tough on endemic corruption:

http://www.project-syndicate.org/commentary/africa-growing-war-on-corruption-by-michael-meyer-2016-01

Latin American countries are also tackling corruption:

https://www.foreignaffairs.com/articles/central-america-caribbean/2015-12-14/latin-americans-stand-corruption

China - Currency and Financial Market Turmoil

China’s Currency Conundrum

http://www.telegraph.co.uk/finance/china-business/12088033/Capital-flight-pushes-China-to-the-brink-of-devaluation.html

Circuit Breakers and China’s Stock Market Crash

An insightful piece from The Economist:

http://www.economist.com/blogs/freeexchange/2016/01/chinas-broken-stockmarket

Rethinking the Post-WW II Golden Age of Economic Growth

A fascinating new paper:

Reconstruction Dynamics: The Impact of World War II on Post-War Economic Growth

By Petros Milionis and Tamás Vonyóy; August 2015

https://www.aeaweb.org/aea/2016conference/program/retrieve.php?pdfid=235

Abstract

The decades that followed the end of World War II are commonly referred to as the golden age of economic growth as they were marked by the highest growth rates that the world economy has witnessed to this date. This temporal sequence raises the natural question of whether and to what extent these growth rates were the outcome of a prolonged reconstruction process that began after the end of the war. We revisit this important question by investigating the impact of the post-war output gap on the subsequent growth experiences of different countries in different regions of the world and by using a novel instrumental variables approach to establish causality. Our results show that this reconstruction process was an important driver of growth during the post-war decades, not only in Europe but globally, and its impact on growth rates lasted until the mid 1970s. Moreover, a counterfactual analysis suggests that in the absence of the reconstruction effect global growth rates from 1950 to 1975 would have been on average 40% lower and only slightly higher than those observed during the years from 1975 to 2000.

Is there a New Financial Storm Brewing?

Insights from Michael Burry (made famous by the book/movie - The Big Short)

http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html

Why global economic disaster is an unlikely event by Martin Wolf

http://www.ft.com/cms/s/0/db57a57e-b38b-11e5-b147-e5e5bba42e51.html

Is the US prepared for the next recession?

https://www.washingtonpost.com/posteverything/wp/2016/01/06/theres-another-recession-out-there-somewhere-we-are-so-not-ready-for-it/

Economics of Inequality – Recent History

A fascinating paper:

Rediscovering the 1%: Economic Expertise and Inequality Knowledge by Daniel Hirschman [University of Michigan]

http://danhirschman.com/wp-content/uploads/2014/12/Hirschman-2014-Rediscovering-the-1-Percent-Dissertation-Chapter-5-9-9.pdf

Abstract

In the 2000s, academics and policymakers began to discuss the growth of top incomes in the United States, especially the “top 1%.” Newly analyzed data revealed that top income earners in the 1990s received a larger share of income than at any point since the Great Depression, and that their incomes had begun a dramatic upward climb in the early 1980s. This paper investigates why it took two decades for this increase in top incomes to become politically and academically salient. I argue that experts assembled two “regimes of perceptibility” (Murphy 2006) for producing knowledge about income inequality, and that neither of these regimes was capable of tracking movements in top incomes. Macroeconomists focused on labor’s share of national income, but did not examine the distribution of income between individuals. Labor economists, on the other hand, drew on newly available survey data to explain wage disparities in terms of education, age, work experience, race, and gender. By relying on surveys, these scholars unintentionally eliminated top incomes from view: surveys top-coded high incomes, and thus were incapable of seeing changes in the top 1%. Studies of top incomes that relied on income tax data thus fell by the wayside, creating the conditions under which experts, policymakers, and the public alike could be surprised by the rise of the 1%. This historical narrative offers insights into the political power of economic expertise by clarifying the complex linkages between observations, stylized facts, causal theories, and policy attention.

Arab-Persian Conflict and the Middle East Mess

Insightful analysis by Michael Axworthy:

http://www.newstatesman.com/world/2015/11/why-tehran-hates-isis-how-religious-rifts-are-fueling-conflict

Professor Axworthy correctly observes:

“We also urgently need to re-examine our relations with the Saudis and the other Gulf Arab States that have supported and encouraged the spread of extreme Wahhabism. The Saudis have belatedly realised that Isis is as much a threat to them as to everyone else (it may actually be more of a threat to Saudi Arabia because the jihadis’ dearest wish is to establish their caliphate in Mecca and Medina).

Yet that is not enough. We need to make clear that our continued friendship towards the Saudis cannot simply be bought with the weapons we sell them but has to be conditional upon taking a more responsible attitude in their religious policies – not so much for human rights reasons, as Jeremy Corbyn and others have suggested (although those reasons have their place) but for our security and for the stability of the Middle East region.”

Related:

America’s confused Middle East policy

http://www.theatlantic.com/international/archive/2016/01/iran-saudi-arabia-republicans/422640/

Impact on Mideast Tensions on Oil Supply

http://www.telegraph.co.uk/finance/oilprices/12081550/Saudi-showdown-with-Iran-nears-danger-point-for-world-oil-markets.html

Saudi-Iran Hostilities
http://www.nytimes.com/2016/01/05/opinion/saudi-arabias-dangerous-sectarian-game.html

http://www.nytimes.com/2016/01/05/opinion/saudi-arabias-barbaric-executions.html

http://www.newyorker.com/news/news-desk/iran-and-saudi-arabia-the-showdown-between-islams-rival-powers

International Affairs – Interesting Items

The 20 Percent World by John Micklethwait

http://www.bloombergview.com/articles/2016-01-03/the-20-percent-world-iiz31la5

Best Places to Retire

http://www.bbc.com/capital/story/20151230-the-top-seven-places-to-retire

Recent columns by Roger Cohen – NYTIMES foreign policy expert:

http://www.nytimes.com/2015/12/31/opinion/americas-bountiful-churn.html

http://www.nytimes.com/2015/12/22/opinion/germany-refugee-nation.html

http://www.nytimes.com/2015/12/18/opinion/the-assassination-in-israel-that-worked.html

Guajaratis – Born Entrepreneurs

Gujaratis are the world’s most successful group of business owners and entrepreneurs:

http://www.economist.com/news/christmas-specials/21683983-secrets-worlds-best-businesspeople-going-global

Economic Development – Theory versus Practice

A great comic strip (surprisingly technical and insightful) from SMBC

http://www.smbc-comics.com/index.php?id=3976 (HT: Chris Blattman) 

2016 Forex Market Predictions

An interesting piece from the WSJ:
http://www.wsj.com/articles/has-the-dollar-reached-a-peak-1451738012

Dollar cycles:
http://www.bloomberg.com/news/articles/2016-01-02/obama-dollar-rally-is-forecast-to-join-clinton-reagan-upturns

Brazil's Economic Woes

A briefing on the Brazilian economy from The Economist:
http://www.economist.com/news/briefing/21684778-former-star-emerging-world-faces-lost-decade-irredeemable

Long-Term Global Economic Growth Projections

Harvard’s Center for International Development has released a report on growth projections up to 2024:

http://atlas.cid.harvard.edu/rankings/growth-predictions/

The report states:

“India tops the global list for predicted annual growth rate for the coming decade, at 7.0 percent. This far outpaces projections for its northern neighbor and economic rival, China, which the researchers expect to face a continued slowdown to 4.3 percent growth annually to 2024.

“India has made important gains in productive capabilities, allowing it to diversify its exports into more complex products, including pharmaceuticals, vehicles, even electronics,” said Ricardo Hausmann, Professor of the Practice of Economic Development at Harvard Kennedy School (HKS), the leading researcher of The Atlas of Economic Complexity, and the director of CID.

Hausmann notes these gains in economic complexity have historically translated into higher incomes. “China has already realized many of these gains, doubling per capita income in less than a decade. We expect that India’s recent gains in complexity, coupled with its ability to continue improving it will drive higher incomes, positioning India to lead global economic growth over the coming decade,” Hausmann said.”