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- Are ECB’s Greek bond purchases really irrelevant for the private sector?
- Is Greg getting bailed out by his rich uncle?
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- Partisanship and dismal economics blogging
- Chris Auld’s 18 signs
- The case for negative nominal interest rates and how to attain them: Revisiting the Buiter-Eisler approach
- No Negative Rates in Euroland (yet)
- Reinhart and Rogoff’s coding mistake: Much Ado About Nothing
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(Needless to say, I do not necessarily agree with them or endorse them.)
Tag Archives: Financial crisis
US Output Gap: Still negative
John Taylor recently showed how the United States is currently much farther away from returning to “potential output” compared with the recession of the early 1980s, where above-average output growth during the recovery secured a return to the potential output path. Apart from the obvious implications for the evaluation of the current US recovery, this has led to a deeper discussion about the dangers of extrapolating “potential” output from past values (e.g., maybe the 2007 value was just too high?). James Bullard of St. Louis Fed argues (pdf of speech) that the financial crisis lead to a very persistent negative wealth shock that has pushed potential output down. Hence, the … Continue reading
Posted in Economics, Economists, Monetary policy
Tagged David López-Salido, Financial crisis, James Bullard, John Cochrane, John Taylor, Jordi Galí, Mark Gertler, output gap, Paul Krugman, United States, University of Copenhagen, Zeuthen Lectures
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Structural Divergence in Europe: Death Foretold
One of my mantras is that doing economics is not about “being right,” but about getting wiser all the times. Note that the two things may not overlap. I, for example, would rather be wrong all of the time but know why I am being wrong instead of being right without having a clue as to why. So, I think it is a good mantra, and I will stick with it. Now, after the beginning of the current financial crisis and recession, more or less prominent economists lined up to tell the world that they were “right” as they had seen the crisis coming. Some actually had something to back … Continue reading
Posted in Economics, Macroeconomics, Monetary policy
Tagged debt crisis, entry requirements, European Union, Financial crisis, inflation, monetary unification, nominal interest rates, structural reforms
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ECB, SMP, ETC. Who pays for what?
After the financial crisis hit in 2008, new acronyms have been appearing at a rapid pace around the globe. These mainly describe the various measures taken by the world’s central banks to offset the troubles caused by the crisis. Many took the form of liquidity provisions to aid “frozen” banking markets. The European Central Bank launched on May 14, 2010 a so-called Securities Market Programme (SMP), under which it – temporarily – allows itself to purchase Euro denominated government bonds. In its decision, the ECB motivated the move by “ . . . in view of the current exceptional circumstances in financial markets, characterised by severe tensions in certain market … Continue reading
Posted in Economics, Macroeconomics, Monetary policy
Tagged Central bank independence, central banks, European Central Bank, Financial crisis, Jean Claude Trichet, Marvin Goodfriend, Quantitative easing, Securities Markets Programme, Treaty on European Union
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The Fiscal Multiplier Wrestling Marathon
Welcome to the academic wrestling match of the recent years. In the left corner, Paul Krugman (with assistance from Bradford DeLong)! In the right corner, John Cochrane (with assistance from Eugene Fama)! They will fight over the size of the Fiscal Multiplier in a match where any trick may, can, and will be used. Both are heavyweights in the economics profession with one of them even with a Nobel Prize to his credit! This is a match not to miss. Well, this is actually not funny at all. But one of the most important questions in macroeconomics, how effective is expansionary fiscal policy in a recession, have recently been subject … Continue reading
Posted in Economists, Macroeconomics
Tagged Financial crisis, Fiscal multiplier, Fiscal stimulus, John Cochrane, John Maynard Keynes, Michael Woodford, Paul Krugman
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“Dr. Doom” or “Mr. Lucky”?
A colleague of mine recently directed my attention to this interesting article from the January 9 edition of the Boston Globe: “That guy who called the big one? Don’t listen to him.” In the article, journalist Joe Keohane describes the now well-known 2006 prophecies made by Nouriel Roubini of New York University about an upcoming major financial crisis (he is described as, at that time, a “somewhat obscure economist“, which is extremely inaccurate I should say!). Due to his precise forecast about the crisis, which indeed began the year after, and took on an unprecedented world-wide scale in 2008, Roubini became a man to be taken really seriously. He apparently … Continue reading
Posted in Economists, Macroeconomics
Tagged Christina Fang, Financial crisis, forecasting, Jerker Denrell, Joe Keohane, Nouriel Roubini
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