From the FT:
Why the renminbi has to rise to address imbalances - Martin Feldstein
Close the funding gap for smaller businesses - Nigel Rudd
King’s proposal provides stability in banking sector - Nigel Collin
Goodbye to the pre-crisis trend line - Samuel Brittan

From elsewhere:
Selling stocks short: Ever controversial - Gerald P. Dwyer, Federal Reserve of Atlanta
Swiss Banking Is Finished - Joe Weisenthal, BusinessInsider
Can We Fix Too Big to Fail Without Shrinkage? - Noam Scheiber, The New Republic
What’s so bad about inflation? - David Blanchflower New Statesman
Sustainable Growth? - Tim Duy’s Fed Watch, Economist’s View
Design and effectiveness of fiscal-stimulus programmes - Robert Barro and Charles Redlick, VOXEU
Scientist Monkeys Around With The Economy - NPR audio on primate economics

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. Continue reading "Raise interest rates to increase lending"

By Charles Goodhart

It is remarkable how powerful a well-turned phrase can be. There have been many such phrases generated in the course of this crisis, not all of them helpful, indeed in some cases misleading. Examples are: ‘Toxic assets’; ‘If a bank is too big to fail, it is too big’; and particularly relevant here: ‘Banks have become a combination of a casino and a utility.’ While I congratulate John Kay on his authorship of this last, arresting phrase, I am afraid that it is both misleading and wrong-headed. Continue reading "Narrow banking is not the answer to systemic fragility"

From the FT:

‘Too big to fail’ is too dumb an idea to keep - John Kay
Obama’s executive pay move is bad policy - Charles Calomiris
Speculators do drive prices, and it’s the developing countries that suffer - Andrew Mold

From elsewhere:

The Case for More Stimulus - New York Times editorial
Enablers of the Housing Bubble - Brad DeLong, with chart on non-agency securitisation, Economist’s View
Financial Crises are different! - Stephen Cecchetti, Marion Kohler, Christian Upper. VOXEU
Latin America and the Caribbean: Finding Space for Countercyclical Fiscal Policy - Nicolás Eyzaguirre, IMFdirect
The National Saving Identity: Private Saving, Household Saving, and Rebalancing - Menzie Chinn, Econbrowser

By Kumiharu Shigehara

Japan’s economic expansion stumbled by late 2007, and in the context of the global economic crisis, it has been trapped in the deepest recession of the post-war era. Initially, the impact of the global crisis on the Japanese economy was expected to be limited because Japanese banks and other financial institutions were relatively insulated from financial turmoil. However, between the third quarter of 2008 and the first quarter of this year, Japan’s exports fell at an annual rate of some 55 per cent in volume terms, the sharpest among OECD countries and double the area’s average rate of decline. Continue reading "Japan needs more aggression in warding off deflation"

From the FT:
China must keep its eyes fixed on the exit Qin Xiao
Fed reports weak economic rebound Krishna Guha
China growth underlines rapid rebound Geoff Dyer

From elsewhere:
Is Japan on the fiscal brink? Paul Krugman, New York Times
The growing case for a jobless recovery David Altig, Macroblog
In banking, bigger is not better Simon Johnson, New York Times
King threatens banks with splits Peter Thal Larsen, Reuters

From the FT:
King calls for the breakup of banks Chris Giles
Darling responds to King’s bank speech Chris Giles FT video

Elsewhere:
Mervyn King’s speech in full Bank of England
Volcker fails to sell a bank strategy NY Times
The consensus on big banks begins to move The Baseline Scenario
Mervyn King calls for banks to split as public finances take record hit The Times

From the FT:

Goodbye, Macroeconomics - Eli Noam

The travesty of the commons - Christopher Caldwell on the field of Nobel winner Elinor Ostrom

The free market is not up to the job of creating work - Mort Zuckerman on US unemployment

Countdown to the next crisis is already under way - Wolfgang Münchau

Down but not out - Krishna Guha on the dollar

Elsewhere:

Cognitive Dissonance and Global Macroeconomics - James Kwak on rhetoric and reality in the global imbalances debate, at Baseline Scenario

Escaping the state should cost Lloyds - Peter Thal Larsen, Reuters

Herbert Hoover and the start of the Great Depression - Lee E. Ohanian on history VOXEU

No L - James Hamilton on having avoided an ‘L-shaped’ recovery, at Econbrowser

Goldman Turns Into a Financial Frankenstein While the Fed Snoozes Away - Huffington Post

A reflection on the G20 (The question never asked to Mr Zoellick) - Biagio Bossone on the legitimacy of the G20 for small nations, at VOXEU