I just returned from the annual conference of the
Society for Financial Econometrics
hosted by the University of Chicago. One of the many interesting papers described changes in Federal Reserve policy over time.
Monthly Archives: June 2011
When Price Does Not Clear the Market
And other non-Neoclassical tales
Finance and Development has a profile of one of my teachers, Nobel Laureate George Akerlof, written by Prakash Loungani. Akerlof’s views are critical to recall in these times when some individuals think supply and demand are sufficient to answer all policy issues. Akerlof’s research highlighted the role of information asymmetries that prevent prices for setting quantity demanded equal to quantity supplied. From the article
A game of chicken
Making a political game out of the debt ceiling is playing with fire.
Links for 2011-06-13
Some items I found interesting:
- Tyler Cowen outlines what I see as the responsible approach to the U.S. federal fiscal challenges: slow the growth of government spending.
- Some undergraduates at Rutgers University have developed a nice site to track economic indicators. And Bill McBride has an invaluable summary of which ones really matter.
- From the Federal Reserve Bank of Boston: Oil and the Macroeconomy in a Changing World: A Conference Summary.
- The Office of Personnel Management on shifting costs of Postal Service retirement funding to U.S. taxpayers.
- And Glenn Reynolds warns beware of bimbots.
Chinese oil demand
Stuart Staniford notes that the number of trucks and passenger vehicles in China has been growing at about 23% each year.
In Order to Know Where You Are Going…
…you need to know how you got where you are. From the abstract to a working paper by myself, Barry Eichengreen and Hiro Ito, entitled A Forensic Analysis of Global Imbalances:
We re-examine the determinants of current account balances applying updated data to the framework based on Chinn and Ito (2007). …
The significance of OPEC announcements
The Organization of Petroleum Exporting Countries (OPEC) today announced that its members could not reach an agreement to change OPEC’s production quotas. How significant is that announcement? In my opinion, not very.
Growth Forecasts and Informational Rigidities
From a new IMF working paper by Prakash Loungani:
We document information rigidity in forecasts for real GDP growth in 46 countries over the past two decades….
Life without QE2
Last November, the Federal Reserve announced a plan to purchase $75 billion each month in intermediate-term Treasury securities, a measure popularly described as a second round of quantitative easing, or QE2. June is the last month of this program, and it looks unlikely that the Fed will extend it, causing some observers to be concerned. My view is that QE2 had relatively modest effects, and such benefits as it provided should not evaporate with the end of the purchases.
Debt ceiling politics
Here’s a link to an interview with a local TV station.