Where is the Bond Market Headed?

Behind the Bond Boom No One Saw Coming in 2019

https://www.bloomberg.com/opinion/articles/2019-12-31/behind-the-bond-boom-no-one-saw-coming-in-2019

Japan’s Legacy of Low Bond Yields Holds Lessons for U.S., Europe

https://www.wsj.com/articles/japans-legacy-of-low-bond-yields-holds-lessons-for-u-s-europe-11577710806

Will Recession Strike in 2020?

https://www.wsj.com/articles/will-recession-strike-in-2020-1157775109 

West Africa’s Currency Union

Farewell to the CFA Franc: Macron and Ouattara End a Colonial Relic

https://www.wsj.com/articles/farewell-to-the-cfa-franc-macron-and-ouattara-end-a-colonial-relic-11577751037

Related:

https://www.japantimes.co.jp/news/2019/12/30/business/ghana-determined-join-west-african-neighbors-new-currency-eco/ 

Looking Back and Looking Ahead

Dave Barry’s Year in Review 2019

https://www.washingtonpost.com/magazine/2019/12/29/dave-barrys-year-review/

Small Is the New Big Thing

https://www.nytimes.com/interactive/2019/12/27/opinion/sunday/economy-growth-forecasting.html

The 2010s Were the End of Normal

https://www.nytimes.com/interactive/2019/12/27/opinion/sunday/2010s-america-trump.html

Forget Stock Market Forecasts. They’re Less Than Worthless.

https://www.nytimes.com/2019/12/23/business/retirement/index-fund-investing.html

Shifting from Monetary Policy to Fiscal Policy

https://www.bloomberg.com/news/articles/2019-12-29/the-bedrock-of-ultra-low-yields-is-at-risk-as-fiscal-tide-turns

Duflo and Banerjee

Doing Business in Emerging Markets

How Daikin bested South Korea's LG in its Indian stronghold

https://asia.nikkei.com/Business/Companies/How-Daikin-bested-South-Korea-s-LG-in-its-Indian-stronghold 

Crony capital: How Duterte embraced the oligarchs

https://asia.nikkei.com/Spotlight/Cover-Story/Crony-capital-How-Duterte-embraced-the-oligarchs 

GOP and Keynesian Policies

Trump’s quest to shatter GOP economics reached its peak in 2019

https://www.washingtonpost.com/business/2019/12/27/trumps-quest-shatter-gop-economics-reached-its-culmination/

GOP hypocrisy

https://www.washingtonpost.com/us-policy/2019/05/15/republicans-couldnt-possibly-be-more-hypocritical-about-economy/

“During the Obama years, after all, Republicans alternated between hysterically and semi-hysterically warning that we had to cut the deficit or go bankrupt like Greece, and raise interest rates or have our currency collapse like Zimbabwe’s. They, of course, tried to use their most sober and serious voices to tell us this story, but that didn’t change the overall message: Be afraid, be very afraid.”

The Economics of Donald J. Keynes by Paul Krugman

https://www.nytimes.com/2019/05/06/opinion/republican-economics.html

The Sabotage Years by Paul Krugman

https://www.nytimes.com/2019/05/04/opinion/the-sabotage-years.html

Don’t Be Shocked If Trump’s Economy Goes the Way of Bush’s: The formula is basically the same: tax cuts, higher spending and deregulation. By Richard J. Carroll

https://www.bloomberg.com/opinion/articles/2019-05-03/trump-s-economy-could-mimic-george-w-bush-s

The Conservative Caricature of Keynesianism

https://www.washingtonpost.com/news/posteverything/wp/2018/07/11/we-are-all-illiterate-about-what-keynesianism-means/

Daniel W. Drezner notes:

“You can say a lot of things about the Trump administration’s domestic economic agenda, but you know what word best describes it? Keynesian. In the past 18 months, this administration has signed off on a massive tax cut and a massive increase in government expenditures. As Vox’s Tara Golshan summarized it, “The deal lifts funding for domestic programs by $128 billion and hikes defense budgets by $160 billion.”

That is a classic example of expansionary fiscal policy. Consistent with previous cases of Keynesian fiscal expansions, it leans heavily on tax cuts and boosts in military spending. This has happened so often, in fact (early 1960s, early 1980s, early 2000s), that Thomas Oatley labels it “military Keynesianism,” and he is right.”

Related:

https://www.aier.org/article/conservatives-and-laffer-curve-ugly-love-affair

“Public-choice theory describes the democratic voter, rather cynically but truthfully, as a person wanting as much free stuff from the government as possible, paid for by someone else. The GOP elite (from Trump to the “establishment” and back) have learned this lesson all too well.”

Interesting Items

Laboring under the illusion of a rules-based global order

https://www.japantimes.co.jp/opinion/2019/12/23/commentary/world-commentary/laboring-illusion-rules-based-global-order/

The Left-Right Divide Isn’t the One That Matters

https://www.theatlantic.com/ideas/archive/2019/12/pete-buttigiegs-radical-centrism/603931/

Judging the past by the values of today can be its own kind of intolerance.

https://www.nytimes.com/2019/12/23/opinion/2020-tolerance-chronocentrism.html

What Happens When Japan Stops Looking ‘Japanese’?

https://www.theatlantic.com/international/archive/2019/12/immigration-japan-national-identity/603568/ 

Fiscal Policy Evolution

America Turns from Tea Party to MMT in a Decade

https://www.bloomberg.com/opinion/articles/2019-12-23/america-turns-from-tea-party-to-mmt-in-a-decade 

Financial Stability and Monetary Policy

Does loose monetary policy lead to financial distortions?

https://www.ut.edu/uploadedFiles/Academics/Business/TampaBayEconomyFall2019.pdf

Financial Stability Should Be Central Banking’s Prime Objective

https://www.project-syndicate.org/commentary/central-bank-swap-lines-by-willem-buiter-1-2019-12 

Fed Risks Creating an Environment for Another Financial Crisis
https://www.bloomberg.com/news/articles/2019-12-17/fed-alumni-fear-crisis-risk-in-simultaneous-cuts-to-rules-rates 

Update:
Thirty-year high for Tokyo condo prices hides bad economic news
https://asia.nikkei.com/Opinion/Thirty-year-high-for-Tokyo-condo-prices-hides-bad-economic-news

Financial Sector Jobs

Analyst Jobs Vanish as a Perfect Storm Crashes into Research

https://www.bloomberg.com/news/articles/2019-12-19/analyst-jobs-vanish-as-a-perfect-storm-hits-wall-street-research

The stock market is now run by computers, algorithms and passive managers

https://www.economist.com/briefing/2019/10/05/the-stockmarket-is-now-run-by-computers-algorithms-and-passive-managers

Goldman Shows Bright Future for Banks, If Not for Bankers: While the move to automation is shrinking the workforce, it is likely to be a boon for shareholders.

https://www.bloomberg.com/opinion/articles/2019-09-20/goldman-shows-bright-future-for-banks-if-not-for-bankers

The Revolutionary Way Of Using Artificial Intelligence In Hedge Funds

https://www.forbes.com/sites/bernardmarr/2019/02/15/the-revolutionary-way-of-using-artificial-intelligence-in-hedge-funds-the-case-of-aidyia/#cd2942f57ca3

Robots Are Coming for These Wall Street Jobs

https://www.bloomberg.com/graphics/2017-wall-street-robots/ 

US Economic Competitiveness

Harvard Business School report on the US economy:
https://www.hbs.edu/competitiveness/Documents/a-recovery-squandered.pdf

The Technology Trap

The Technology Trap | Carl Benedikt Frey’s Talk (Google Campus)

The Technology Trap: Capital, Labor, and Power in the Age of Automation

Pessimism v Progress

https://www.economist.com/leaders/2019/12/18/pessimism-v-progress

The Age of AI

https://www.pbs.org/wgbh/frontline/film/in-the-age-of-ai/

Labor Market - Interesting Applications

Wage stagnation — the myth and reality

https://www.washingtonpost.com/opinions/wage-stagnation--myth-and-reality/2019/12/15/47c42690-1f69-11ea-bed5-880264cc91a9_story.html

The effects of working while in school

https://voxeu.org/article/effects-working-while-school

“The decision whether to take up paid work alongside academic study is a difficult trade-off that students all over the world face. The benefits of additional income and work experience must be weighed up against the loss of hours devoted to formal study.”

Medical Debt - A Growing Problem

Financial Markets - Interesting Items

Don’t Expect the Roaring ’10s for Stocks to Repeat in the ’20s

https://www.bloomberg.com/opinion/articles/2019-12-12/don-t-expect-the-roaring-10s-for-stocks-to-repeat-in-the-20s

The Bull Market Almost No One Saw Coming

https://www.bloomberg.com/news/articles/2019-12-15/the-bull-market-almost-no-one-saw-coming

Stock Analysis Using the P/E Ratio

https://www.schwab.com/resource-center/insights/content/stock-analysis-using-pe-ratio

World’s Best Hedge Fund Returns Are Found in Tiny Singapore

https://www.bloomberg.com/news/articles/2019-12-15/world-s-biggest-hedge-fund-returns-are-found-in-tiny-singapore 

UK Electorate Votes to End Brexit Uncertainty

Massive victory for the Tories:

https://www.nytimes.com/interactive/2019/12/13/world/europe/uk-general-election-results.html 

Price Wars and India’s Telecom Industry Woes

A price war has undermined India’s big telecoms companies

https://www.economist.com/business/2019/12/12/a-price-war-has-undermined-indias-big-telecoms-companies 

The Futility of Trade Wars

Trump’s Dud of a Deal Shows the Futility of Trade War

https://www.bloomberg.com/opinion/articles/2019-12-13/trump-s-u-s-china-deal-wasn-t-worth-a-trade-war

The economic madness of Mr. Tariff Man

https://thehill.com/opinion/international/473060-the-economic-madness-of-mr-tariff-man

Why Is Trump a Tariff Man?

https://www.nytimes.com/2019/12/05/opinion/trump-trade-tariffs.html 

Long-Term Deflation – The Case of Japan

Cheap Japan: From Disney to Big Macs, prices are frozen in time

https://asia.nikkei.com/Economy/Cheap-Japan-From-Disney-to-Big-Macs-prices-are-frozen-in-time

Cheap Japan: Low wages for tech workers delight foreign companies

https://asia.nikkei.com/Economy/Cheap-Japan-Low-wages-for-tech-workers-delight-foreign-companies 

Fixing a Troubled Frontier Economy

How to Fix Pakistan’s Crashing Economy

https://www.nytimes.com/2019/12/10/opinion/pakistan-economy.html 

Keynes and The Economic Consequences of Peace

In 1919, John Maynard Keynes foresaw the chaos that would follow from the Versailles peace treaty.

https://www.nytimes.com/2019/12/07/opinion/keynes-economic-consequences-peace.html 

Economics of Free Shipping

An interesting application of behavioral economics:

https://www.theatlantic.com/magazine/archive/2020/01/the-myth-of-free-shipping/603031/

“Free shipping is enticing, says Ravi Dhar, the director of Yale’s Center for Customer Insights, because shoppers irrationally hate to pay for certain services—even those that they value immensely, such as speedy and reliable delivery. This demonstrates the economic principle known as “pain of paying,” a psychological discomfort that keeps people from completing purchases.”  

European Business Schools Rankings 2019

FT European Business Schools Rankings 2019

http://rankings.ft.com/exportranking/european-business-school-rankings-2019/pdf

https://www.ft.com/content/30a1420a-0c7b-11ea-8fb7-8fcec0c3b0f9 

Online Shopping and Retail Sector Jobs

Online Shopping Is Growing, But Isn’t Creating Jobs

https://www.bloomberg.com/opinion/articles/2019-12-10/retail-jobs-growth-doesn-t-match-expansion-of-online-sales 

What is the Natural Rate of Unemployment for the US?

Conventional wisdom seems to have been too pessimistic about how much the economy could grow before setting off inflation

https://www.nytimes.com/2019/12/06/upshot/jobs-report-economic-growth-potential-inflation.html 

Related:
http://www.milkenreview.org/articles/measuring-labor-force-slack

The 1980s Latin American Debt Crisis

Paul Volcker’s Complicated Latin American Legacy

https://www.bloomberg.com/opinion/articles/2019-12-10/paul-volcker-death-he-left-a-complicated-legacy-in-latin-america

Related:

https://www.fdic.gov/bank/historical/history/191_210.pdf 

Remembering Paul Volcker

Paul Volcker – The Most Consequential Fed Chairman of the Modern Era

Paul Volcker was the savior our economy needed

Paul A. Volcker, Fed Chairman Who Waged War on Inflation, Is Dead at 92 

Fed chairman who curbed inflation by raising interest rates dies at 92

US Foreign Policy - Costly Errors

U.S. officials misled public about Afghan war, confidential documents reveal

https://www.washingtonpost.com/graphics/2019/investigations/afghanistan-papers/afghanistan-war-confidential-documents/

U.S. wasted billions of dollars in colossal effort to rebuild Afghanistan, documents reveal

https://www.washingtonpost.com/graphics/2019/investigations/afghanistan-papers/afghanistan-war-nation-building/

Documents Reveal Misleading Public Statements on War in Afghanistan

https://www.nytimes.com/2019/12/09/world/asia/afghanistan-war-documents.html

What Did the U.S. Get for $2 Trillion in Afghanistan?

https://www.nytimes.com/interactive/2019/12/09/world/middleeast/afghanistan-war-cost.html

An End to Magical Thinking in the Middle East

https://www.theatlantic.com/ideas/archive/2019/12/end-magical-thinking-middle-east/602953/ 

Geographic Concentration and Growth Centers

90 percent of growth in high-tech jobs happened in just 5 metro areas

https://www.vox.com/recode/2019/12/9/21000162/high-tech-job-growth-concentration-brookings

THE CASE for GROWTH CENTERS

https://www.brookings.edu/wp-content/uploads/2019/12/Full-Report-Growth-Centers_PDF_BrookingsMetro-BassCenter-ITIF.pdf

Four Decades of Inequality Drive American Cities Apart
https://www.nytimes.com/2019/12/02/upshot/wealth-poverty-divide-american-cities.html

SNL Spoofs Nato Summit

US Repo Market Crisis

Big Banks and the US Repo Market Crisis

https://www.bloomberg.com/news/articles/2019-12-08/repo-blowup-was-fueled-by-big-banks-and-hedge-funds-bis-says

The Longer-Term Lessons of the Repo Turmoil
https://www.bloomberg.com/opinion/articles/2019-10-23/the-longer-term-lessons-of-the-repo-market-turmoil

Repo Meltdown Shows Budget Deficit Has Limits
https://www.bloomberg.com/opinion/articles/2019-09-26/repo-meltdown-shows-budget-deficit-has-limits

Why the Fed was forced to intervene in short-term money markets

https://www.economist.com/finance-and-economics/2019/09/19/why-the-fed-was-forced-to-intervene-in-short-term-money-markets

Wall Street Is Buzzing About Repo Rates

https://www.nytimes.com/2019/09/18/business/fed-repo-rates.html

Repo-market ructions were a reminder of the financial crisis
https://www.economist.com/finance-and-economics/2019/09/26/repo-market-ructions-were-a-reminder-of-the-financial-crisis

REPO MARKET BASICS:

https://www.bloomberg.com/news/articles/2019-09-19/the-repo-market-s-a-mess-what-s-the-repo-market-quicktake 

Capitalism versus Socialism Debate

Under Trump, Republicans are endorsing a spiraling deficit, along with state planning and crony capitalism.

https://www.washingtonpost.com/opinions/trump-has-turned-republicans-into-soviet-central-planners/2019/12/05/c315489e-17a1-11ea-8406-df3c54b3253e_story.html

Finland Is a Capitalist Paradise

https://www.nytimes.com/2019/12/07/opinion/sunday/finland-socialism-capitalism.html

Two cheers for capitalism, now and forever.

https://www.nytimes.com/2019/12/05/opinion/socialism-capitalism.html 

Taxation - Debate
The Secret to America’s Low, Low Taxes: Privatize health care and run a big deficit and your country, too, can have low taxes.
https://www.bloomberg.com/opinion/articles/2019-12-06/the-u-s-isn-t-the-world-s-most-taxed-country-not-even-close 

The trade-off between efficiency and equity
https://voxeu.org/article/trade-between-efficiency-and-equity

What Americans Don’t Get About Nordic Countries
http://www.theatlantic.com/politics/archive/2016/03/bernie-sanders-nordic-countries/473385/
“But this vision of homogenous, altruistic Nordic lands is mostly a fantasy. The choices Nordic countries have made have little to do with altruism or kinship. Rather, Nordic people have made their decisions out of self-interest. Nordic nations offer their citizens—all of their citizens, but especially the middle class—high-quality services that save people a lot of money, time, and trouble. This is what Americans fail to understand: My taxes in Finland were used to pay for top-notch services for me.” 

US Labor Market Update

A Strong November Jobs Report

https://markets.businessinsider.com/news/stocks/november-jobs-report-us-economy-266000-jobs-added-unemployment-rate-2019-12-1028744064

A Few Notes of Caution:

The great American labor paradox: Plentiful jobs, most of them bad

https://qz.com/1752676/the-job-quality-index-is-the-economic-indicator-weve-been-missing/

In the past, jobs numbers have been revised down sharply:

https://www.nytimes.com/2019/08/21/business/economy/jobs-growth-revision.html 

Winter 2019 Book Recommendations

Good Economics for Hard Times by Abhijit V. Banerjee and Esther Duflo

https://www.amazon.com/Good-Economics-Times-Abhijit-Banerjee/dp/1610399501/

The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon

https://www.amazon.com/Great-Reversal-America-Gave-Markets/dp/0674237544/

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath [Published Jan 6, 2020]

https://www.amazon.com/Fully-Grown-Stagnant-Economy-Success/dp/022666600X

Willful: How We Choose What We Do by Richard Robb

https://www.amazon.com/Willful-How-We-Choose-What/dp/0300246439/

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman

https://www.amazon.com/Man-Who-Solved-Market-Revolution/dp/0241309727/

The Economists' Hour: False Prophets, Free Markets, and the Fracture of Society by Binyamin Appelbaum

https://www.amazon.com/Economists-Hour-Prophets-Markets-Fracture/dp/031651232X/

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

https://www.amazon.com/Technology-Trap-Capital-Labor-Automation/dp/069117279X/

The Age of Surveillance Capitalism by Shoshana Zuboff

https://www.amazon.com/Age-Surveillance-Capitalism-Future-Frontier/dp/1610395697/

The Curse of Bigness: Antitrust in the New Gilded Age by Tim Wu

https://www.amazon.com/Curse-Bigness-Antitrust-New-Gilded/dp/0999745468/

Antisocial by Andrew Marantz

https://www.amazon.com/Antisocial-Extremists-Techno-Utopians-Hijacking-Conversation/dp/0525522263/

Dreyer's English: An Utterly Correct Guide to Clarity and Style by Benjamin Dreyer

https://www.amazon.com/Dreyers-English-Utterly-Correct-Clarity/dp/0812995708/

On Writing: A Memoir of the Craft by Stephen King

https://www.amazon.com/Writing-10th-Anniversary-Memoir-Craft/dp/1439156816/

Educated: A Memoir by Tara Westover

https://www.amazon.com/Educated-Memoir-Tara-Westover/dp/0399590501/

World Class: One Mother's Journey Halfway Around the Globe in Search of the Best Education for Her Children by Teru Clavel

https://www.amazon.com/World-Class-Mothers-Education-Children/dp/1501192973/

The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire by William Dalrymple

https://www.amazon.com/Anarchy-Relentless-Rise-India-Company/dp/1635573955/

The Body: A Guide for Occupants by Bill Bryson

https://www.amazon.com/Body-Guide-Occupants-Bill-Bryson/dp/0385539304/

Through Two Doors at Once: The Elegant Experiment That Captures the Enigma of Our Quantum Reality by Anil Ananthaswamy

https://www.amazon.com/Through-Two-Doors-Once-Experiment/dp/1101986107/ 

--

The Economist – Book Recommendations

https://www.economist.com/books-and-arts/2019/12/07/our-books-of-the-year

Singapore versus Hong Kong

Singapore’s Long-Awaited Moment May Have Arrived

https://www.bloomberg.com/graphics/2019-opinion-will-tokyo-taipei-singapore-be-next-hong-kong/singapore.html 

The Art of Translation

How Chinese Sci-Fi Conquered America

https://www.nytimes.com/2019/12/03/magazine/ken-liu-three-body-problem-chinese-science-fiction.html 

The Fraying of the US-Europe Alliance

For Trump and Europe, a Surprising Role Reversal

https://www.nytimes.com/2019/12/03/world/europe/trump-macron-nato.html

Emmanuel Macron on Europe’s fragile place in a hostile world

https://www.economist.com/briefing/2019/11/07/emmanuel-macron-on-europes-fragile-place-in-a-hostile-world

Candid video appears to show Trudeau, Macron and Johnson joking about Trump

https://www.washingtonpost.com/nation/2019/12/04/trump-macron-trudeau-johnson-video-candid-joking-nato/

Related:

https://vivekjayakumar.blogspot.com/2018/08/europe-seeks-independence.html 

US K-12 Education Lags Global Leaders

Chinese teens ace the global PISA test

https://www.scmp.com/news/china/society/article/3040657/chinese-teens-put-information-age-test-global-pisa-education

The parable of Finland

https://www.economist.com/international/2019/12/05/pisa-results-can-lead-policymakers-astray

The latest scores from PISA tests:

https://www.economist.com/international/2019/12/03/after-two-decades-of-pisa-tests-why-havent-scores-risen-more

https://www.bbc.com/news/education-50563833

http://www.oecd.org/pisa/PISA-results_ENGLISH.png

MUST READ:

'World Class': What a world class education looks like, and what it doesn't

https://www.japantimes.co.jp/culture/2019/09/14/books/world-class-education-looks-like-doesnt/ 

International Affairs - Interesting Items

China Isn’t the U.S.S.R. Confusing the Two Is Dangerous

https://www.theatlantic.com/ideas/archive/2019/12/cold-war-china-purely-optional/601969/

Two Democracies, Two Very Different Elections

https://www.theatlantic.com/international/archive/2019/12/us-britain-very-different-elections/602809/ 

The Need for Truly Free Markets

Are anti-competitive firms killing American innovation?

https://www.economist.com/finance-and-economics/2019/12/12/are-anti-competitive-firms-killing-american-innovation

Big Business Is Overcharging You $5,000 a Year

https://www.nytimes.com/2019/11/10/opinion/big-business-consumer-prices.html

The U.S. Only Pretends to Have Free Markets
https://www.theatlantic.com/ideas/archive/2019/10/europe-not-america-home-free-market/600859/ 

America is not the land of the free but one of monopolies so predatory they imperil the nation

https://www.theguardian.com/commentisfree/2019/dec/01/america-is-not-the-land-of-the-free-but-one-of-monopolies-so-predatory-they-imperil-the-nation