A teacher emails a query to Greg Mankiw:
I am a U.S. history teacher and an avid reader of your blog, and I have a question which you might want to address (again) in your blog. I came across a story saying that we were coming out of "our worst recession since the 1930s." This strikes me as curious, considering our unemployment levels are not as high as the 1982 recession, I don't think. By your reckoning, assuming the worst has passed, has this been the worst since the 1930s? That raises a bigger issue:what standard should one use to "judge" a recession?
Read his answer here.
donderdag 10 september 2009
Why the public option matters
What is one to make of the practical, political argument that any public plan actually included in legislation probably wouldn't make that much difference, and that reform is worth having even without such a plan?
Read Krugman's article here.
Misdiagnosing the crisis: The real problem was not real, it was nominal
Do most macroeconomists hold views of this crisis that are entirely at variance with modern monetary economics? This column says that tight monetary policy caused the crisis. Economists seem not to believe what they teach about the fallacy of identifying tight money with high interest rates and easy money with low interest rates.
Read the complete article here.
L'économie ne ment pas, mais ne prédit pas l'avenir, par Guy Sorman
Pour ceux que l'économie agace et, plus encore, pour ceux que l'économie de marché insupporte, la récession est une aubaine : "Les Français n'ont pas la tête économique mais politique", écrivait Alexis de Tocqueville en 1848. A ce peu d'affinité pour l'économie s'ajoutent chez nous une aversion pour le capitalisme et un penchant pour l'intervention forte de l'Etat. Accuser les économistes de n'avoir pas prévu la crise et les libéraux de l'avoir provoqué par leurs excès s'inscrit dans une bataille dont la science économique n'est pas le seul enjeu : l'économie et les économistes se trouvent au croisement de l'idéologie et de la science. ...
Lisez cet article dans Le Monde ici.
Si les économistes ont sous-estimé la crise, ce n'est pas par complicité avec les financiers, par Patrick Artus
Il semble que les économistes n'ont pas vu venir la crise, au moins l'ampleur de la crise, et ils le reconnaissent. Ceux qui, avant la crise, avaient une vision très pessimiste de l'avenir, la devaient à des mécanismes qui ne sont pas ceux qui se sont produits. Ils attendaient par exemple une crise du déficit extérieur des Etats-Unis et du dollar, et ce n'est qu'une fois la crise déclenchée qu'ils ont modifié leur analyse....
Lisez l'article complet ici.
woensdag 9 september 2009
'Industrialized Nations Are Facing CO2 Insolvency'
In a SPIEGEL ONLINE interview, Hans Joachim Schellnhuber, the German government's climate protection adviser, argues that drastic measures must be taken in order to prevent a catastrophe. He is proposing the creation of a CO2 budget for every person on the planet, regardless whether they live in Berlin or Beijing.
Read the full article here.
Increase in real pay plummets in all but four EU Member States in 2008
The average real wage increase for European workers fell from 3.6% in 2007 to 1.3% in 2008, according to new data published by Eurofound’s European Industrial Relations Observatory (EIRO). The annual update on pay developments in Europe 2008 recorded sizeable differences between EU Member States, with the rate of real increase falling sharply, and the nominal rate dropping only slightly. Wide differences emerge, however, between the various groups of countries within the EU, in terms of the level of real wage increases, with a broad east-west split.
Read the full press release and find the related report here.
Happiness as a tool for valuing public goods
If governments supply public goods that market forces will not, they ought to assign monetary values to those goods so that they can prioritise projects. This column discusses the difficulties of estimating those values using happiness surveys. Using a new method, it estimates that people value a one-standard-deviation improvement in air quality at $40.
Read the full article here.
Charge!
Carmakers are shifting towards electric vehicles. Policymakers must do their part, too. GREENS may not like it, but once people have enough to eat and somewhere tolerable to live, their thoughts turn to buying a car. The number of cars in the rich world will grow only slowly in the years ahead, but car ownership elsewhere is about to go into overdrive. Over the next 40 years the global fleet of passenger cars is expected to quadruple to nearly 3 billion. China, which will soon overtake America as the world’s biggest car market, could have as many cars on its roads in 2050 as are on the planet today; India’s fleet may have multiplied 50-fold. Forecasts of this kind led Carlos Ghosn, boss of the Renault-Nissan alliance, to declare 18 months ago that if the industry did not get on with producing cars with very low or zero emissions, the world would “explode”. Read the complete article in The Economist here.
Pension Funds in Asia Passed Europe's in '08
Europe's biggest pension funds weathered the financial crisis better than their North American counterparts last year, according to new research. But Asia's pensions savings actually grew during 2008 and total funds under management by Asian-Pacific pension funds surpassed Europe's for the first time. Read the complete article in the WSJ here.
Behavioral Theory
Can Mayor Bloomberg pay poor people to do the "right" thing? Read the article in The American Prospect about the progress of New York City’s ambitious anti-poverty initiative here.
dinsdag 8 september 2009
Keynes at Home, Smith Abroad
Domestic stimulus spills over to protectionism. Read the complete article in the WSJ here.
Towards the integrated measurement and management of market and credit risk: The dangers of compounding versus diversification
The financial crisis has exposed serious weaknesses in risk measurement and management practices. This column argues for both market practitioners and their supervisors to make concerted efforts to achieve a more integrated measurement and management of different forms of risk.
Read the full article here.
Bonus : "Aux Etats-Unis, toute ingérence sera perçue comme totalitaire"
Les membres du G20 vont se réunir et présenter leurs résolutions sur les bonus du secteur bancaire. Européens et Américains divergent sur la réglementation de ces derniers. Un consensus est-il envisageable ?
Lisez l'article complet ici.
maandag 7 september 2009
La hausse du forfait hospitalier, une "piste parmi d'autres" étudiées par l'Etat
Le gouvernement envisage d'augmenter le forfait hospitalier de 25 % et de baisser le remboursement de certains médicaments, affirme le Journal du Dimanche daté du dimanche 6 septembre. Ces mesures devraient être inscrites dans le projet de budget 2010 de la sécurité sociale, "pour freiner le dérapage de l'assurance-maladie", écrit le quotidien.
Lisez l'article complet ici.
Eurozone stimulus: A myth, some facts, and impact estimates
Eurozone governments have engaged in substantial fiscal stimulus. This column argues against further fiscal measures, claiming that forward-looking firms and households will cut their expenditure in response to governmental expansions. It warns that further fiscal efforts risk eroding financial and monetary policies that are combating the crisis.
Read the complete article here.
vrijdag 4 september 2009
Firefighters Become Medics to the Poor
"Among the hidden costs of the health care crisis is the burden that fire departments across the country are facing as firefighters, much like emergency room doctors, are increasingly serving as primary care providers." Read the complete article in the NYTimes here.
The improbable 2°C global warming target
Mitigating global warning is a pressing and daunting task for the world’s major economies. This column says that the 2°C target set by G8 leaders is both politically and technologically unrealistic. It argues they must adopt more realistic targets and long-term commitments to adaptation plans.
Read the full article here.
Systemic risk and deposit insurance premiums
Financial institutions enjoy a large number of government guarantees. This column says that we ought to be charging banks for such subsidies and doing so in a way that promotes financial stability. It uses the example of demand deposit insurance in the US to explore the poor design of funding for such guarantees.
Read the full article here.
The crisis and citizens’ trust in central banks
Most observers agree that central banks can claim partial credit for the stabilisation that have been achieved and the prospect of a recovery. This column warns that the general public seems to hold a completely different opinion; trust in central banks has declined and the reaction of central banks to the crisis is generally judged as unsatisfactory. Central bankers all over the world should redouble their efforts to regain the trust of the people towards their institution.
Read the full article here.
Moeten de banken de crisis betalen?
Moeten de banken de crisis betalen? Dat lijkt IVAN VAN DE CLOOT niet onrechtvaardig. Als we een manier vinden om banken correct te laten betalen voor het risico dat ze afwentelen op de maatschappij, zou ons financiële systeem daar zelfs wel bij varen.
Lees het volledige artikel hier.
donderdag 3 september 2009
Sustaining a Global Recovery
"How much has potential output decreased? It is very hard to tell: we do not see potential output, only actual output. The historical evidence is worrisome, however. The IMF’s forthcoming World Economic Outlook presents evidence from 88 banking crises over the past four decades in a wide range of countries. While there is large variation across countries, the conclusion is that, on average, output does not go back to its old trend path, but remains permanently below it.
The possible good news is that the trend itself appears to be unaffected: on average, crises permanently decrease the level of output, but not its growth rate. So, if past is prologue, the world economy likely will return to its past growth rate. But, especially in advanced countries, the period of above-average growth, characteristic of normal recoveries, may be short-lived or nonexistent."
Read Olivier Blanchard's article here.
A slow-burning fuse
Age is creeping up on the world, and any moment now it will begin to show. The consequences will be scary, says Barbara Beck. Read the complete special report in The Economist here.
Daar is Tobin weer
DE STANDAARD ANALYSE — 'De banken hebben de crisis veroorzaakt, en zij moeten dus ook maar opdraaien voor de gevolgen ervan.' Dat ABVV-voorzitter Rudy De Leeuw gisteren in De Morgen, pleitte voor de invoering van een crisisbelasting op de banken, zal niemand echt verbazen. Maar dat minister van Financiën en MR-voorzitter Didier Reynders zich in Le Soir duidelijk voorstander toonde van de invoering van een soort algemene taks op financiële transacties, klonk al heel wat verrassender.
Lees het volledige artikel hier.
Effets économiques d'une régularisation des sans-papiers en Belgique
Consultez le rapport de l'IRES à ce sujet ici.
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