Economics is not a positive science although great strides have
... Interest rates fell sharply on January 1st, 2000. The cause was NOT an immense increase in the money supply. The immediate cause was the credibility of a pre-announced exchange rate regime. The slower devaluation rate lowered interest rates through the interest rate parity condition. In this instanc ...
... Interest rates fell sharply on January 1st, 2000. The cause was NOT an immense increase in the money supply. The immediate cause was the credibility of a pre-announced exchange rate regime. The slower devaluation rate lowered interest rates through the interest rate parity condition. In this instanc ...
Crisis, Contagion, and the Need for a New Paradigm
... • Since among major effects are those arising from redistribution, a representative agent model is not of much help • Since central issue entails frictions in mobility, assuming perfect markets is not of much help • Problems exacerbated by efficiency wage effects ...
... • Since among major effects are those arising from redistribution, a representative agent model is not of much help • Since central issue entails frictions in mobility, assuming perfect markets is not of much help • Problems exacerbated by efficiency wage effects ...
Document
... investment objectives, financial situation or individual needs. It should not be relied upon as a substitute for financial or other specialist advice. It has been prepared solely as an information service for financial advisers and should not be distributed to clients. Before making any decisions on ...
... investment objectives, financial situation or individual needs. It should not be relied upon as a substitute for financial or other specialist advice. It has been prepared solely as an information service for financial advisers and should not be distributed to clients. Before making any decisions on ...
Misunderstanding the Great Depression, making the next one worse
... A tentative, but not-bankrupt, alternative • A new macroeconomics must do the exact opposite: – Economy as inherently monetary; – Model the economy dynamically; – Social classes rather than isolated agents; – Rational but not prophetic behavior; – Endogenous creation of money by banking sector; and ...
... A tentative, but not-bankrupt, alternative • A new macroeconomics must do the exact opposite: – Economy as inherently monetary; – Model the economy dynamically; – Social classes rather than isolated agents; – Rational but not prophetic behavior; – Endogenous creation of money by banking sector; and ...
Chile_en.pdf
... 3% of GDP in 2009, despite making withdrawals of US$ 9.277 billion (equivalent to 46%) from the Economic and Social Stabilization Fund (ESSF) to deal with fallout from the global financial crisis. The fiscal policy target for 2010 is a structural balance of 0% of GDP. The budget act originally proje ...
... 3% of GDP in 2009, despite making withdrawals of US$ 9.277 billion (equivalent to 46%) from the Economic and Social Stabilization Fund (ESSF) to deal with fallout from the global financial crisis. The fiscal policy target for 2010 is a structural balance of 0% of GDP. The budget act originally proje ...
Hot Money Flows, Commodity Price Cycles, and Financial
... Ben Bernanke drove short rates down to zero in December 2008, the yield on the 10year US Treasury bond was 4.0%. By July 2012, the 10-year yield had fallen to 1.45%— and one can expect it to fall further if short rates remain frozen near zero. In the medium- and longer-term, pension funds are very i ...
... Ben Bernanke drove short rates down to zero in December 2008, the yield on the 10year US Treasury bond was 4.0%. By July 2012, the 10-year yield had fallen to 1.45%— and one can expect it to fall further if short rates remain frozen near zero. In the medium- and longer-term, pension funds are very i ...
Transfers net income
... revenues with expenses. The problem is that cash is not always received or paid in the period when the revenue is earned or when the expense is incurred. The objective of accrual accounting is to improve matching of revenues with expenses. ...
... revenues with expenses. The problem is that cash is not always received or paid in the period when the revenue is earned or when the expense is incurred. The objective of accrual accounting is to improve matching of revenues with expenses. ...
The Macroeconomics of Asset Shortages
... We tend to focus on (be distracted by?) risk-shifting, regulatory problems, etc. Most recent example: sub-prime ...
... We tend to focus on (be distracted by?) risk-shifting, regulatory problems, etc. Most recent example: sub-prime ...
From Shared Sacrifices to Constructive Contributions - Some Controversial Governmental, Corporate and Consumer Challenges (When Most of the Western World Is in Economic Troubles)
... In this circle of money flows, the Treasury can obtain most or all of the funds it wants to raise and can enable the Administration to give away vast sums to its supporters. The banks do not need to pay interest at reasonable rates to attract deposits, because the banks are able to obtain risk-free ...
... In this circle of money flows, the Treasury can obtain most or all of the funds it wants to raise and can enable the Administration to give away vast sums to its supporters. The banks do not need to pay interest at reasonable rates to attract deposits, because the banks are able to obtain risk-free ...
Thomas Piketty Academic year 2013-2014
... I.e. Fed balance sheet size ≈ 7% GDP 2002, 15% 2008, 25% 2015 (incl. >half in US treasury bills) ...
... I.e. Fed balance sheet size ≈ 7% GDP 2002, 15% 2008, 25% 2015 (incl. >half in US treasury bills) ...
Sudden Stops
... • SS and banking crises are a set of twins. • Openness (un-leveraged absorption of tradables) and liability dollarization heavily influence the probability of a SS. • High levels of current account leverage and financial dollarization could become a dangerous cocktail. • Both are the result of a str ...
... • SS and banking crises are a set of twins. • Openness (un-leveraged absorption of tradables) and liability dollarization heavily influence the probability of a SS. • High levels of current account leverage and financial dollarization could become a dangerous cocktail. • Both are the result of a str ...
Accounting for the Government`s Social Insurance Obligations
... audits within 45 days of fiscal year-end (November 15th). • 21/24 major Federal agencies received clean audit opinions, (FY07 - 19) • For the 5th consecutive year, the total number of material weaknesses government-wide declined (from 39 to 32 during FY 2008). • 14 agencies earned a clean audit opin ...
... audits within 45 days of fiscal year-end (November 15th). • 21/24 major Federal agencies received clean audit opinions, (FY07 - 19) • For the 5th consecutive year, the total number of material weaknesses government-wide declined (from 39 to 32 during FY 2008). • 14 agencies earned a clean audit opin ...
Chapter 19 International Experience with Exchange Rate Regimes
... goods, then the U.S. central bank must be selling off some of its foreign reserve assets to make up the shortfall in the balance of payments. Not sustainable over a long time, eventually the central bank will deplete its reserves of foreign assets (external imbalance). ...
... goods, then the U.S. central bank must be selling off some of its foreign reserve assets to make up the shortfall in the balance of payments. Not sustainable over a long time, eventually the central bank will deplete its reserves of foreign assets (external imbalance). ...
International Economic Environment
... response to increasingly uncertain global financial markets. The Reserve Bank of India also reduced its key policy rate from 6.50% to 6.25% in October, citing a marked slowdown in global growth. This was the first decision by the recently appointed monetary policy committee, which pushed policy rate ...
... response to increasingly uncertain global financial markets. The Reserve Bank of India also reduced its key policy rate from 6.50% to 6.25% in October, citing a marked slowdown in global growth. This was the first decision by the recently appointed monetary policy committee, which pushed policy rate ...
The EuroZone “Debt” Crisis: Another “Center” – “Periphery” Crisis
... volatility index); and/or shifts in U.S. monetary policy (Miranda-Agrippino and Rey 2015) that generate flows towards the rest of the world that result in all the “periphery” countries entering at the same time and independently of their own circumstances in a wave of borrowing (Rey 2013). 2 As fina ...
... volatility index); and/or shifts in U.S. monetary policy (Miranda-Agrippino and Rey 2015) that generate flows towards the rest of the world that result in all the “periphery” countries entering at the same time and independently of their own circumstances in a wave of borrowing (Rey 2013). 2 As fina ...
GLOBAL ECONOMIC RISKS AND OPPORTUNITIES IN 2011
... promoting high-return investment Keys to stability in long-term growth Latin America should NOT be tempted to follow European austerity measures ...
... promoting high-return investment Keys to stability in long-term growth Latin America should NOT be tempted to follow European austerity measures ...
the Gold Standard International Trade
... 2013 Q4: (405.4 b – 577.2 b) + (173.7 b – 115.8 b) + 173.7 b – 92 b ...
... 2013 Q4: (405.4 b – 577.2 b) + (173.7 b – 115.8 b) + 173.7 b – 92 b ...
Answers to Questions in Economics for Business
... The ‘transfer payments multiplier’ will be smaller than the government expenditure multiplier, because part of transfer payments is not spent on domestic goods: some is saved, some goes in taxes and some is spent on imports. Gives some other examples of ‘random shocks’ that could undermine the gover ...
... The ‘transfer payments multiplier’ will be smaller than the government expenditure multiplier, because part of transfer payments is not spent on domestic goods: some is saved, some goes in taxes and some is spent on imports. Gives some other examples of ‘random shocks’ that could undermine the gover ...
University of the West Indies, Mona Campus Council Luncheon
... The reduction in foreign exchange inflows severely challenged the central bank efforts to maintain stability in the foreign exchange market. Additionally, the global financial crisis had an impact on the domestic financial system as the international credit markets became increasingly tight. Some in ...
... The reduction in foreign exchange inflows severely challenged the central bank efforts to maintain stability in the foreign exchange market. Additionally, the global financial crisis had an impact on the domestic financial system as the international credit markets became increasingly tight. Some in ...
Keeping pace with accelerating change Accelerating pace of change
... estimate that increased life expectancy, together with the decline in defined benefit pensions and resulting uncertainty over retirement funding, could raise the savings rate to as high as 10% of disposable income, a level not seen since the 1970s. (In the years leading up to the financial crisis it ...
... estimate that increased life expectancy, together with the decline in defined benefit pensions and resulting uncertainty over retirement funding, could raise the savings rate to as high as 10% of disposable income, a level not seen since the 1970s. (In the years leading up to the financial crisis it ...
Reflections on the Global Financial Crisis
... that largely unregulated market. Putting the words ‘Gramlich subprime speech’ into the search engine on the US Federal Reserve Board’s website brings up over 16,000 documents, including many many speeches by Governor Gramlich in the first half of this decade, warning of the dangers of what was then ...
... that largely unregulated market. Putting the words ‘Gramlich subprime speech’ into the search engine on the US Federal Reserve Board’s website brings up over 16,000 documents, including many many speeches by Governor Gramlich in the first half of this decade, warning of the dangers of what was then ...
Global financial system
The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s, world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I, trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.A series of currency devaluations and oil crises in the 1970s led most countries to float their currencies. The world economy became increasingly financially integrated in the 1980s and 1990s due to capital account liberalization and financial deregulation. A series of financial crises in Europe, Asia, and Latin America followed with contagious effects due to greater exposure to volatile capital flows. The global financial crisis, which originated in the United States in 2007, quickly propagated among other nations and is recognized as the catalyst for the worldwide Great Recession. A market adjustment to Greece's noncompliance with its monetary union in 2009 ignited a sovereign debt crisis among European nations known as the Eurozone crisis.A country's decision to operate an open economy and globalize its financial capital carries monetary implications captured by the balance of payments. It also renders exposure to risks in international finance, such as political deterioration, regulatory changes, foreign exchange controls, and legal uncertainties for property rights and investments. Both individuals and groups may participate in the global financial system. Consumers and international businesses undertake consumption, production, and investment. Governments and intergovernmental bodies act as purveyors of international trade, economic development, and crisis management. Regulatory bodies establish financial regulations and legal procedures, while independent bodies facilitate industry supervision. Research institutes and other associations analyze data, publish reports and policy briefs, and host public discourse on global financial affairs.While the global financial system is edging toward greater stability, governments must deal with differing regional or national needs. Some nations are trying to orderly discontinue unconventional monetary policies installed to cultivate recovery, while others are expanding their scope and scale. Emerging market policymakers face a challenge of precision as they must carefully institute sustainable macroeconomic policies during extraordinary market sensitivity without provoking investors to retreat their capital to stronger markets. Nations' inability to align interests and achieve international consensus on matters such as banking regulation has perpetuated the risk of future global financial catastrophes.