By David Papell
Today, we’re fortunate to have David Papell, Professor of Economics at the University of Houston, as a Guest Contributor.
Marsh and Pfleiderer on the Financial Crisis
From “Analysis of the 2008-2009 Financial Crisis”, by Terry Marsh and Paul Pfleiderer:
In this Preface, we offer some analysis of the 2008-2009 financial crisis and its implications for financial industry reform and research. We primarily focus on issues relating to transparency and the measurement of risk and how these are affected by management incentives that are often misaligned with the incentives of those who are exposed in various ways to the risk being measured. In the aftermath of the crisis many have called for increased transparency; we suggest that while transparency is no doubt a desirable goal in many ways, enhancing it could prove to be quite difficult.
More of the same
The U.S. economy continues to recover at a painfully slow pace.
Some Aspects of the Employment Report
The net job loss in the December nonfarm payroll (NFP) is unwelcome news, but given the (upward) revision in the November figure, one shouldn’t think of this number as fixed. Figure 1 shows various employment series.
Reserves Are Revised Upward, the Dollar Share Declines
Perhaps the most startling thing about the new COFER data on reserves released by the IMF is not the declining dollar share in total reserves, but rather the fact that reserves have risen relative to where we thought they were [0]. The change is entirely due to the upward revision in unallocated reserves by emerging market and LDC central banks. This point is shown in Figure 1.
Bernanke grades the Fed
Fed Chair Ben Bernanke’s observations on monetary policy and the housing bubble have received a lot of attention. Like many other commentators (e.g., Arnold Kling, Paul Krugman, and Free Exchange), I agree with Bernanke’s conclusions, but only up to a point.
Guest Contribution: Monetary Policy and Asset Bubbles in 2010
By Joseph E. Gagnon
Today, we’re fortunate to have Joe Gagnon, senior fellow at the Peterson Institute for International Economics, as a guest contributor.
In his speech at the American Economic Association yesterday, Ben Bernanke said that monetary policy played at most a small role in the U.S. housing bubble and that financial regulatory policy is the appropriate tool for preventing harmful asset price bubbles in the future. I agree with these conclusions, but I suspect that many do not, even within the world of central banking.
Some International Finance at ASSA
I’m not at the ASSA meetings in Atlanta this year, but my coauthor Hiro Ito is presenting our papers (with Joshua Aizenman) in two very interesting sessions on international finance.
Inflation in China
Why hasn’t inflation caught up with a monetary-induced boom in China?
Counterfactuals and the Stimulus, Again
And some lessons from the 1930’s for the 2000’s
John Taylor returns to the topic of how much impact the stimulus package has had on output. The heart of the argument is summarized by his extension of a graph presented in the NYT (and reproduced in this post).