The U.S. Federal Reserve, European Central Bank, and central banks of Canada, England, Japan, and Switzerland today announced a coordinated monetary action that could provide added assistance to interbank lending in the event of a further deterioration in global financial markets. Here I offer some thoughts on what the action signifies.
Category Archives: financial markets
Worries continue
If you’re prone to worry about where the economy’s headed, last week’s developments weren’t very reassuring.
Links for 2011-11-15
Quick summaries of a few items of interest.
Greece, Italy, and financial stability
The drama began in Greece. Where is it going to end?
IMF Book Forum: “Lost Decades: The Making of America’s Debt Crisis and the Long Recovery”
The transcript and video for the IMF Book Forum (October 14th) is now online here. Nobel Laureate George Akerlof (UC Berkeley) moderated, Diane Lim Rogers (EconomistMom, Concord Coalition) and Gail Cohen (Joint Economic Committee) were discussants, and Simon Johnson (Baseline Scenario, MIT) provided concluding comments.
Lost Decades: The Lost Graphs
In our book Lost Decades, Jeffry Frieden and I tried to be as comprehensive as possible in documenting the history we described, the analytical results we reported, and the data we used. We had intended to rely to a greater degree on graphical depictions, but for a variety of reasons, not all the proposed graphs made it in. Hence, we present the graphs that didn’t make it into Lost Decades. (And, by virtue of the just-in-time nature of the web, updated!). The graphs are organized by chapters:
“What Predicts a Credit Boom Bust?”
From Chapter 1 of the IMF’s recent World Economic Outlook (Box 1.2), a set of findings by Jörg Decressin and Marco Terrones:
The econometric results confirm that net capital inflows, financial sector reform, and total factor productivity are good predictors of a credit boom. Net capital inflows appear to have an important predictive edge over the other two factors.
Lost Decades: The Making of America’s Debt Crisis and the Long Recovery
From the preface to Lost Decades, published today (9/19) by W.W. Norton:
The United States … lost the first decade of the
twenty-first century to an ill-conceived boom and a subsequent bust.
It is in danger of losing another decade to an incomplete recovery
and economic stagnation.
In order to not lose the decade to come, the United States will
have to bring order to financial disarray, gain control of a burgeoning
burden of debt, and re-create the conditions for sound economic
growth and social progress. None of this will be easy. The tasks are
made more difficult by the fact, which we have learned to our alarm,
that all too many policymakers and observers cling to the failed
notions that got the country into such trouble in the first place. If
Americans do not learn from this painful episode, and from others
like it, they will condemn the nation to another lost decade.. (p. xvi).
What do low government bond yields signify?
Brad DeLong and
Tyler Cowen point to an interesting exchange in the Financial Times.
Waiting for the Fed to act
Economic conditions are deteriorating. Here’s how and when the Fed might intervene.