Traders Are Too Certain About the Path for Rates
Volcker Rule – RIP
Federal Reserve votes to ease rule aimed at
preventing big banks from making risky financial bets
Is GDP Overstating Economic Activity?
Wednesday, May 30, 2018
Corporate Taxes and Business Investment – A Reading List
The US corporate tax cut debate
Cash-Rich Companies Set Record for Buybacks
Tax Cuts, Corporate Profits and Stock Prices
The Entire Economy Is MoviePass Now. Enjoy It While You Can.
Astonishing stats from the NYT piece:
“Over all, 76 percent of the companies that went public last year were unprofitable on a per-share basis in the year leading up to their initial offerings, according to data compiled by Jay Ritter, a professor at the University of Florida’s Warrington College of Business. That was the largest number since the peak of the dot-com boom in 2000, when 81 percent of newly public companies were unprofitable. Of the 15 technology companies that have gone public so far in 2018, only three had positive earnings per share in the preceding year, according to Mr. Ritter.”
Paul Krugman’sinteresting op-ed:
Economist Justin Wolfers on corporate tax cuts
Tuesday, May 29, 2018
Monday, May 28, 2018
International Economics and Politics [UPDATED]
Italian President’s Loyalty to the Euro Creates Chaos
https://www.nytimes.com/2018/05/28/world/europe/italy-sergio-mattarella-carlo-cottarelli.htmlItaly’s new rulers could shake the euro by Martin Wolf
In Britain, Austerity Is Changing Everything
China’s Smart Trade Moves
The Way Out of Argentina’s New Crisis
Ethiopia Already Is the ‘China of Africa’
Saturday, May 26, 2018
Central Banks and Monetary Policy
Monetary Policy and the Crosswinds of Change
by Charles Evans
Fed Chair Jerome Powell recently noted:
“For monetary policy, the case for central bank
independence rests on the demonstrated benefits of insulating monetary policy
decisions from shorter-term political considerations. But for a quarter
century, inflation has been low and inflation expectations anchored. We must
not forget the lessons of the past, when a lack of central bank independence
led to episodes of runaway inflation and subsequent economic contractions.”
India's Recent Economic Performance
Taking stock of Narendra Modi government
after four years
India’s economic performance over the past four years:
Friday, May 25, 2018
US Economy - UPDATED
The Economist on
Corporate America and Trump
A Rescue Plan for a
Jobs Crisis in the Heartland by Edward L. Glaeser, Lawrence H. Summers and
Ben Austin
https://www.nytimes.com/2018/05/24/opinion/heartland-wage-subsidy-rust-belt.html
Washington Post piece
notes:
““We have a ‘Two
Realities’ economy in America,” said William Rodgers, a professor at Rutgers
University and chief economist at the Heldrich Center for Workforce
Development. “One segment has truly recovered from the Great Recession and is
at full employment. The other continues to experience stagnating wages,
involuntary part-time employment, inflexible work schedules and weaker access
to health care.”
Rodgers is worried
about how families that don't have $400 in savings are going to handle rising gas
prices, higher rents and credit card rates that are climbing as U.S. interest
rates rise.”Emerging Markets – Economic Updates
Emerging Markets Have an Overlooked Strength
China’s Resilience
Emerging Markets Defy Contagion Concern from Turkish Lira
Krugman on Turkey’s Woes
Related:
Trade Protectionism
So you’re telling
me my Subaru is a national security threat?
Trump Is Making Trade Less Fair
Trump’s Trade
Confusion
https://www.wsj.com/articles/trumps-trade-confusion-1527203643
How to Win Trade Wars: Don’t Fight Them
How to Win Trade Wars: Don’t Fight Them
Related:
Thursday, May 24, 2018
Wednesday, May 23, 2018
Media, Political Science and International Affairs – Reading List
Important New Books:
- Media Amnesia: Rewriting the Economic Crisis by Laura Basu
- The Media and Austerity: Comparative perspectives. Edited by Laura Basu, Steve Schifferes & Sophie Knowles
- Shadows of Empire: The Anglosphere in British Politics by Michael Kenny & Nick Pearce
- How Democracy Ends by David Runciman
Reviews:
The Status of School Teachers in America
Educators Are Leaving the Workforce for
Other Careers
"Teacher Turnover: Why It Matters and What We
Can Do About It," by
Desiree Carver-Thomas and Linda Darling-Hammond
Unintended Consequences of Tax Cuts
Understanding Turkey’s Currency Crisis
Update: Turkey's
Rate Hike Shock Leaves Room for Awe
https://www.bloomberg.com/view/articles/2018-05-23/turkey-s-rate-hike-shock-leaves-room-for-awe
Turkish Lira comes under pressure:
A stronger dollar is making 2018 a
destructive year for emerging-market currencies
Tuesday, May 22, 2018
History Lessons for Economists
Learning from America’s Forgotten Default
The old capitalism returns by Robert Samuelson
The old capitalism returns by Robert Samuelson
Robert Shiller offers a brief historical perspective on money
Why Reinvent the Monetary Wheel?
Monday, May 21, 2018
Politics of Deregulation
Politics of Deregulation
https://www.nytimes.com/2018/05/17/opinion/trump-deregulation-republicans.html
Volcker Rule and the Wall Street Lobby
Robert Samuelson on the ‘Captured Economy’
Related:
Capital, Labor and Profits
Capital, labor and profits in the modern economy
https://www.nytimes.com/interactive/2018/05/21/upshot/marx-ratio-median-pay.html
https://www.nytimes.com/interactive/2018/05/21/upshot/marx-ratio-median-pay.html
Stock Market Returns
Interesting summary of recent research:
http://review.chicagobooth.edu/finance/2018/article/300-secrets-high-stock-returns
Global Energy Sector
Solar Power - China and India
Russia and the Global Oil Market
Small Outages Have Big Impact on Oil Prices
https://www.wsj.com/articles/small-outages-have-big-impact-on-oil-prices-1526898424Sunday, May 20, 2018
Europe Takes the Lead in Privacy Protection
EUROPE'S NEW PRIVACY LAW WILL CHANGE THE
WEB, AND MORE
https://www.wired.com/story/europes-new-privacy-law-will-change-the-web-and-more/
GDPR: How Europe became the world’s data police
Related:
https://www.bloomberg.com/news/articles/2018-03-20/how-europe-s-gdpr-will-mean-your-data-belongs-to-you-quicktakeSaturday, May 19, 2018
Weekend Readings
In harsh Saudi
crackdown, famous feminists are branded as ‘traitors’
https://www.washingtonpost.com/world/middle_east/in-harsh-saudi-crackdown-famous-feminists-are-branded-as-traitors/2018/05/19/b3bc3502-5b63-11e8-9889-07bcc1327f4b_story.html
The Economist
on Corbynomics and UK Politics
Business School Ideology
Politics and US Fiscal Policy
David Rosenberg notes:
“Some will argue
that there are tremendous supply-side elements to the tax package that was
passed last year. Pure bunk. It is almost all classic Keynesian-style stimulus.
And it’s all being financed by issuing more debt at a time when the structural
or “cyclically adjusted” budget deficit already is 3 per cent of GDP. At this
stage of the cycle, at full employment, the government should be running a
balanced budget or even surpluses − as they do in Germany. Running structural
deficits at this level is destabilizing for the financial markets, and I am
concerned that there is less discussion on this than there is on how wonderful
the earnings season is − which is primarily because of the transitory effects
of the tax stimulus”.
Future of Democracy
Politics and the Media
David Frum on the New Political Divide in the US
Related
Friday, May 18, 2018
Technological Change and New Careers
How the World’s Biggest Companies Are
Fine-Tuning the Robot Revolution
Strong Demand for Data Scientists
Technology and Healthcare Sector
Monetary Policymaking in Emerging Markets
Monetary Policy Influences on Global Financial Conditions and International Capital Flows
What the Lira's Plight Says About Turkey's
Economy
How Turkey fell from investment darling to
junk-rated emerging market
https://www.economist.com/finance-and-economics/2018/05/19/how-turkey-fell-from-investment-darling-to-junk-rated-emerging-market
Turkey’s Self-Inflicted Currency and Monetary Crisis
https://www.bloomberg.com/view/articles/2018-05-16/erdogan-throws-gasoline-onto-a-raging-fire
India in a summer of emerging market stress
The right policy path for the Indian central bank
https://www.livemint.com/Opinion/1dYTQXeIF8vGqCmDKIMOaN/The-right-policy-path-for-the-Indian-central-bank.htmlRelated:
Mexico, NAFTA and the Auto Sector
Mexico’s Growing Role in the Auto Industry
Under NAFTA: Who Makes What and What Goes Where
Thursday, May 17, 2018
Importance of a Broad-Based Education
We are drowning in information, while
starving for wisdom. The world henceforth will be run by synthesizers, people
able to put together the right information at the right time, think critically
about it, and make important choices wisely.
-
E. O. Wilson
“The master-economist must possess a rare
combination of gifts .... He must be mathematician, historian, statesman,
philosopher—in some degree. He must understand symbols and speak in words. He
must contemplate the particular, in terms of the general, and touch abstract
and concrete in the same flight of thought. He must study the present in the
light of the past for the purposes of the future. No part of man's nature or
his institutions must be entirely outside his regard. He must be purposeful and
disinterested in a simultaneous mood, as aloof and incorruptible as an artist,
yet sometimes as near to earth as a politician.”
-
John Maynard Keynes
Related:
SUVs, Fuel Economy and Gas Prices
Timely piece from Justin Fox:
Gas Is Headed for $3. What That Means for the U.S. Economy
Gas Is Headed for $3. What That Means for the U.S. Economy
Global Economic Conditions - Updates
The Economist
on the status of the World Economy
https://www.economist.com/finance-and-economics/2018/05/19/world-economic-growth-is-slowing.-dont-worry-yet
Update:
https://www.bloomberg.com/view/articles/2018-05-17/global-economy-is-no-longer-growing-in-sync
Update:
https://www.bloomberg.com/view/articles/2018-05-17/global-economy-is-no-longer-growing-in-sync
Dollar’s Global Role
How Turkey fell
from investment darling to junk-rated emerging market
Chinese travellers
of all sorts have become ubiquitous
Wednesday, May 16, 2018
Income and Wealth Inequality - Causes and Consequences
Interesting piece from University of Chicago’s Booth
Review:
Never mind the 1 percent, Let's talk about the
0.01 percent
Thought-provoking piece from The Atlantic:
The 9.9 Percent Is
the New American Aristocracy
https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/
--
My own take on the topic:
Why is Income and Wealth Inequality
Worsening?
http://www.ut.edu/uploadedFiles/Academics/Business/Summer%202016.pdfMonetary Policy and Inflationary Pressures
Companies Can't Hold the Line on U.S. Wages
Much Longer
Nominal Wage Rigidities and the Future Path
of Wage Growth
Interview – Charles Goodhart
Fascinating interview – Charles Goodhart (Emeritus
Professor at the London School of Economics and former member of the Bank of
England’s Monetary Policy Committee)
Tuesday, May 15, 2018
Interesting New Research
Lead pollution recorded in Greenland ice indicates
European emissions tracked plagues, wars, and imperial expansion during
antiquity
RESEARCH SIGNIFICANCE:
An 1100 BCE to 800 CE record of estimated
lead emissions based on continuous, subannually resolved, and precisely dated
measurements of lead pollution in deep Greenland ice and atmospheric modeling
shows that European emissions closely varied with historical events, including
imperial expansion, wars, and major plagues. Emissions rose coeval with
Phoenician expansion and accelerated during expanded Carthaginian and Roman
lead–silver mining primarily in the Iberian Peninsula. Emissions fluctuated
synchronously with wars and political instability, particularly during the
Roman Republic, reaching a sustained maximum during the Roman Empire before
plunging in the second century coincident with the Antonine plague, and
remaining low for >500 years. Bullion in silver coinage declined in
parallel, reflecting the importance of lead–silver mining in ancient economies.
Related:
Status threat, not economic hardship,
explains the 2016 presidential vote by Diana C. Mutz
RESEARCH SIGNIFICANCE:
Support for Donald
J. Trump in the 2016 election was widely attributed to citizens who were “left
behind” economically. These claims were based on the strong cross-sectional
relationship between Trump support and lacking a college education. Using a
representative panel from 2012 to 2016, I find that change in financial
wellbeing had little impact on candidate preference. Instead, changing
preferences were related to changes in the party’s positions on issues related
to American global dominance and the rise of a majority–minority America:
issues that threaten white Americans’ sense of dominant group status. Results
highlight the importance of looking beyond theories emphasizing changes in
issue salience to better understand the meaning of election outcomes when
public preferences and candidates’ positions are changing.
US Business Cycle - Updates
Unemployment Hits a Low. Then Comes the Recession
https://www.bloomberg.com/news/articles/2018-05-11/no-the-u-s-economy-isn-t-overheating
Flattening Yield Curve - Cause for Concern?
https://www.nytimes.com/2018/05/11/business/bond-rates-recession.html
Noah Smith surveys recent research in the area of business cycle analysis:
Monday, May 14, 2018
Emerging Markets – Asia versus the Rest
Why Asia Will Come Out on Top as Emerging
Markets Get Shaken Up
Lilian Karunungan notes:
“In the mid-1990s,
U.S. interest-rate increases helped spark a Mexican peso devaluation that
fueled capital flight and caused the so-called Tequila crisis. Within a few
years, the sell-off had spread to Asia, which became the center stage of the
emerging-market crisis, during which currencies were devalued as the region was
sent into an economic tailspin. Fast forward to 2018, and history is repeating
itself, with a crisis brewing in Latin America as Argentina seeks emergency
funding just as the dollar and U.S. bond yields spike.
But this time around,
Asia is less vulnerable to contagion, says Macquarie Bank Ltd.’s Nizam Idris.”
Related:
Saturday, May 12, 2018
Investment Strategies
How to invest $10,000?
https://www.bloomberg.com/features/2016-how-to-invest-10k/
https://www.bloomberg.com/features/2016-how-to-invest-10k/
Leverage, Financial Crises, and Policies to Raise Economic Growth
Raghuram Rajan’s illuminating take on major economic issues
[the discussion gets really interesting from the 20-minute mark onwards]:
Economic Development - Interesting Items
Tech Innovations in India
Robots and Manufacturing in India
Infrastructure Development in Ghana
Friday, May 11, 2018
Thursday, May 10, 2018
Trade Tariffs – A Bad Idea
US-Canada Lumber trade dispute illustrates the dead
weight loss resulting from imposition of trade tariffs
Trade, Intellectual Property and Economic Development – History Lesson [Must Read]
Harvard’s Dani Rodrik important piece is worth reading:
Related:
The Double Standard of America’s China Trade
Policy
Related:
Dollar and Global Economy
In a Dollarized
World, a Rising Dollar Spells Pain
Monetary Reform
Would Rebalance Trade
Democracy Works in Malaysia
Malaysia’s Recent Election Delivers a Stinging Verdict on a Corrupt Prime Minister
Tuesday, May 8, 2018
Global Economy - Interesting Items
Japan Seeks Its Economic Mojo in the Stuff
That Makes the Stuff
‘Privatization’ Is No Longer a Dirty Word in
Brazil, Even in an Election Year
Macron’s Reform Train Will Not Be Derailed
How Costa Rica Gets It Right
Monday, May 7, 2018
China Set to Open its Financial Sector
Big Bang Reforms Ahead
Financial Reforms in China
Economic Growth Prospects - China
Top MBA Programs for Finance
FT’s Top MBA Programs for those wanting to pursue a career in the financial sector
Related:
Warwick University to offer joint degrees with European institutions
Comparative Advantage, Labor Productivity and Wages
Apparently, US government negotiators don’t understand basic economics (the so-called ‘pauper labor fallacy’ is still quite influential in political circles):
In Nafta Talks, U.S. Pushes Mexico to Raise Wages for Its Auto Workers
Nobel Laureate Paul Krugman wrote a famous piece in the mid-1990s that is suddenly very relevant:
RICARDO'S DIFFICULT IDEA
Related: In Praise of Cheap Labor
Argentina’s Latest Currency Crisis
Argentina’s Unseen Fragility
The crisis of Argentine gradualism
Why Argentina Struggles to Become a 'Normal Country’
Argentina Raises Rates to 40% After Peso Selloff Prompts Third Abrupt Increase
Saturday, May 5, 2018
UK Economy Needs to Diversify
Shift away from finance-based growth model might improve
the UK economy
International Affairs – Asia
China expands its global influence
https://www.nytimes.com/2018/05/04/opinion/sunday/china-colonial-power-jinping.html
Geopolitics - South Asia
https://www.hoover.org/research/pakistan-murderous-ally-patient-allyAcademic Freedom and Private Donors
The controversy surrounding George Mason University highlights the need
to maintain academic freedom. It is never a good idea to mix economics with
politics:
https://www.nytimes.com/2018/05/05/us/koch-donors-george-mason.html
In order to effectively and objectively critique policies from across the political spectrum, one needs to maintain a reasonable degree of political independence. In fact, an increasing number of Americans identify themselves as independents:
https://www.nbcnews.com/politics/politics-news/millennial-poll-strong-majority-want-third-political-party-n824526
In order to effectively and objectively critique policies from across the political spectrum, one needs to maintain a reasonable degree of political independence. In fact, an increasing number of Americans identify themselves as independents:
https://www.nbcnews.com/politics/politics-news/millennial-poll-strong-majority-want-third-political-party-n824526
Friday, May 4, 2018
Is the IMF Repeating the Mistakes of the 1990s?
IMF appears to be offering questionable economic advice
to Tunisia and exacerbating regional political instability:
Belt-Tightening Demands Put Tunisia’s Democracy at
Risk
Universal Basic Income – The Debate Continues
Finland’s experiment:
--
Is Finland’s basic universal income a solution to automation, fewer jobs and lower wages? By Sonia Sodha
BBC - Future - What if the state provided everyone with a basic income?
Silicon Valley embraces UBI
Three reasons for universal basic income
Related:
The Future of Not Working - The New York Times
Is Finland’s basic universal income a solution to automation, fewer jobs and lower wages? By Sonia Sodha
India floats the idea of a universal basic income - The Economist
http://www.economist.com/news/finance-and-economics/21716064-powerful-idea-unfeasible-now-india-floats-idea-universal
http://www.forbes.com/sites/timworstall/2017/01/31/the-important-part-of-indias-economic-survey-universal-basic-income/
http://www.forbes.com/sites/timworstall/2017/01/31/the-important-part-of-indias-economic-survey-universal-basic-income/
Kenyan Experiment with UBI
Thursday, May 3, 2018
Wednesday, May 2, 2018
Profile of Dilip José Abreu – A Leading Economic Theorist
Rohit Lamba profiles the legendary Princeton University
economic theorist:
Dilip José Abreu: an elegant and creative
economist
Television and Modern Politics
A fascinating piece by PETER BEINART, an associate
professor of journalism and political science at the City University of New
York.
“For more than a
year now, Washington politicos and world leaders have been conducting a vast
experiment in child psychology: How do you sway an American president who has
the attention span, self-discipline, and self-awareness, of a child? Two
primary strategies have emerged.
The dominant
strategy among world leaders has been gaudy flattery. Foreign governments have
exploited Trump’s tendency to conflate the way they treat him with the way they
treat the United States…Washington politicos, however, can’t dazzle Trump with
exotic splendor. Instead, many have pursued a different strategy: Appearances
on television"
How to Get Better Teachers into the School System
An excellent piece: How to Make Better Teachers
According to the Bloomberg piece:
“Good teachers boost their students’ performance on standardized tests, their chances of going to college and even their lifetime earnings. Whether countries prosper and grow depends on the quality of their teachers — which is why governments need to invest in raising standards…
The overriding priority should be to attract and develop greater talent. In the U.S., there’s no national minimum standard for admission to teacher-preparation programs. Compare that to Singapore and Finland, whose students consistently score near the top of international assessments. Their prospective teachers are drawn from the top 30 percent of university students and must pass a series of exams, demonstrate math and language proficiency, and sit for interviews with teaching professionals.
In Finland, where teaching ranks as the most admired profession, only 10 percent of applicants for primary-school teaching positions make it through this process.”
Related:
Returns to Education
Related:
Returns to Education
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