Daily Archives: October 29, 2009

Further reading: Capital controls, global imbalances, China, Turkey, Goldman

October 29, 2009 1:33 pm by FT

From the FT:
How to avoid a repeat of the Great Crash – Peter Clarke
Goldman: reasons to be wrathful – Chris Gradel
A three-way split is the most logical – John Gapper on ‘too big to fail’
Russia’s unsustainable energy model – David Clark

From elsewhere:
A Balanced Global Diet – Nouriel Roubini, RGE Monitor
Chinese railways and speculating pig farmers – Michael Pettis , China Financial Markets
Efficient Market Theory and the Crisis – Jeremy J. Siegel
Futures As Predictors of Commodity Prices – Menzie Chinn, Econbrowser
Turkey Dumps US Dollar For Trade With Iran And China – Joe Weisenthal, BusinessInsider
Why Do Financial Crises Happen in the Fall? – Catherine Rampell, NYT Economix Blog
Are Capital Controls In Fashion Again? – Nouriel Roubini, Forbes Read more

Posted in Economics |

Raise interest rates to increase lending

October 29, 2009 6:00 am by Financial Times

By Ronald McKinnon

This is an updated version of Liquidity traps and the credit crunch, published in this forum on August 13, 2009

Since the onset of the credit crunch and global downturn, governments everywhere have responded to the shortfall in aggregate demand in a textbook Keynesian fashion. They have adopted fiscal stimuli: ramping up government expenditures and cutting taxes. Central banks followed the lead of the Federal Reserve by driving down short-term interest rates toward zero: almost exactly zero for overnight interbank rates in the US, Japan, and Canada, and generally less than 1 per cent in Europe into the autumn of this year. Read more

Posted in Federal Reserve, Keynesianism, Recession |