From Steven Englander (Citibank), “Currency war, BoJ Style” (4/7, not online):
Japan is likely to be labeled as a currency warrior by major Asian trading partners. However, the new BoJ policy has been endorsed by the Fed and IMF and is very G7 compliant, so the BoJ has cover for its policy agenda, despite the aggressiveness of its balance sheet expansion and negative implications for JPY.
The Bureau of Labor Statistics reported on Friday that the number of Americans with jobs only increased by 88,000 in March on a seasonally adjusted basis. That’s one of the weakest months in the last two years. Although it’s clearly a disappointment, I would caution against reading too much into the latest number.
Today we are fortunate to have a guest contribution written by Yuriy Gorodnichenko (UC Berkeley) and Michael Weber (UC Berkeley). It is based upon their paper entitled “Are Sticky Prices Costly? Evidence From The Stock Market”.
Technically speaking. Update, 4/6: Or maybe it is.
From Reuters:
“Peak oil is dead,” Rob Wile declared last week. Colin Sullivan says it has “gone the way of the Flat Earth Society”, writing
Those behind the theory appear to have been dead wrong, at least in terms of when the peak would hit, having not anticipated the rapid shift in technology that led to exploding oil and natural gas production in new plays and areas long since dismissed as dried up.
These comments inspired me to revisit some of the predictions made in 2005 that received a lot of attention at the time, and take a look at what’s actually happened since then.
From the MacIver Institute, “The Free Market Voice of Wisconsin”:
Simon Wren-Lewis’s post has sparked vigorous discussion [1] [2] (and rejoinder) of whether the teaching of Mundell-Fleming, omitting uncovered interest parity, to our undergraduate students is defensible. In addition, he wonders whether it makes sense to use an LM curve, given the absence of a stable money demand curve, and the fact that most advanced country central banks target a policy rate. I think these are good questions for teachers, as well as those who provide advice regarding policy measures.
Today, we are fortunate to have a guest contribution by Ambrogio Cesa-Bianchi and Alessandro Rebucci. It is based upon Does Easing Monetary Policy Increase Financial Instability?. The views expressed in this column are the authors’ and not necessarily those of the institutions with which they are affiliated.
A key reason that I was insufficiently worried in 2005 about bad mortgage loans being made at the time was that the people who funded the loans– most importantly, the packagers and buyers of private-label mortgage-backed securities– had more motivation and resources to evaluate the risks accurately than I did. That they made an incredibly costly mistake is now indisputable. But the question remains, why?