Monthly Archives: November 2009

By Moritz Schularick and Alan M. Taylor

Are credit bubbles dangerous? Long-run historical data reveal that important changes have taken place in the financial system over the past decades, setting in train an unprecedented expansion in the role of credit in the macroeconomy. It is mishap of history that just at the time when credit mattered more than ever before, the reigning doctrine had sentenced it to playing no constructive role in central bank policies. Over the past 140 years, episodes of financial instability were often the result of “credit booms gone wrong”. Read more

From the FT:
We must get ready for a weak-dollar world – Jeffrey Garten

The cost of China’s excess capacity – Editorial comment

From elsewhere:
Coordinated capital controls: A further elaboration – Arvind Subramanian
Why Are Good Macro Policies Political Losers? – Brad DeLong

From the FT:
Time is up for short-term thinking in global capitalism – Al Gore and David Blood
Dubai gambles with its financial reputation – Jim Krane
Boomtime politicians will not rein in the bankers – Avinash Persaud

From elsewhere:
Taxing the speculators – Paul Krugman, NY Times
Dubai World: A great precedent – Felix Salmon
Repairing China’s financial system – Michael Pettis

From the FT:
Only competition can safeguard free markets
– Maurice Saatchi
A healthy appetite for the right price – John Gapper

From elsewhere:
Can the Euro Zone survive economic recovery? - Martin Feldstein
This Time is Different – Fiscal Policy in Low-income Countires – IMFDirect
Is the UK still in recession? – VoxEU

From the FT:
Heed the danger of asset bubbles - Robert Zoellick
Alpha males must trade on more than machismo – John Coates

From elsewhere:
Ahead of Black Friday – Economist’s View
Government outsourcing: Public contracting with private monopoly – VoxEU
Beware the result of outrage - NY Times
Morgan Stanley speaks: Against relying on capital Requirements – Peterson Institute for International Economics

Ingram Pinn illustration

Financial crises have devastating impacts on the public finances. The impact is also most severe where the pre-crisis excesses were greatest. Among members of the Group of Seven leading high-income countries, this means the bubble-infected US and UK. The question both countries confront is how soon and how far to tighten. Tightening will have to be substantial. But premature action could be a devastating error. Read more

From the FT:
Goldman Sachs: the case for the defence – William Cohan
Europe needs action, not quiet consensus – Peter Mandelson

From elsewhere:
Elections in developing countries: do they improve economic policy? – VoxEU
Creating new jobs rather than sharing old ones Peterson Institute

From the FT :
Will sovereign debt be the new subprime? – Gillian Tett

From elsewhere:
The thing about the Fed most worth knowing – Economic Principals
The Phantom Menace – NY Times, Paul Krugman
How preferential are preferential trade agreements? – VoxEU

From the FT:
Tackling systemic risk is no job for the status quo – William Donaldson and Arthur Levitt

From elsewhere:
China, the Renminbi, and global imbalances: A quantative View – Econbrowser
The Big Squander – Paul Krugman, NY Times
Forecasting macroeconomic developments – VoxEU

Windfall taxes are a ghastly idea. They are a sop to prejudice, a burden on risk-taking and a form of arbitrary confiscation. No sensible person should support them. So why do I now find the idea of a windfall tax on banks so appealing? Well, this time, it really does look different. Read more