Weekend's linkfest on Economics. Downturns everywhere, but an interesting point for investors: mergers are coming. Better load up on those takeover targets. Follow
‘MoreLiver’ on Twitter or Facebook.
Previously posted:
The Death of Inflation Targeting – Project
Syndicate
Jeffrey
Frankel: Inflation targeting by
central banks, a hugely popular monetary-policy anchor around the world, died
in September 2008, when it became clear that those who had been relying on it
had not paid enough attention to asset-price bubbles. But its death was never
announced, owing to uncertainty over what should succeed it.
Crumbling BRICs... And Why The Developed World
Is Not "Taking Off" Either – ZH
What does this mean? That the world is slowing down everywhere. And since conventional theory means that much, much, more debt will soon be unleashed to restart growth, and since everyone already is full to the gills with debt, the only realistic buyers remain central banks. And they know it.
What does this mean? That the world is slowing down everywhere. And since conventional theory means that much, much, more debt will soon be unleashed to restart growth, and since everyone already is full to the gills with debt, the only realistic buyers remain central banks. And they know it.
The dogma of ‘credibility’ endangers stability – John
Kay
The elevation of credibility into a central
economic doctrine has turned a sensible point – that policy stability is good
for both business and households – into a dogma that endangers stability.
Merger waves, state subsidies – Free
exchange / The Economist
A shock is
needed to create weak and strong companies. Availability of easy financing
helps. End result is larger company size that creates ‘too big to fails’ – that
then earn government subsidies.
Liquidity Risk and Credit in the Financial
Crisis – The
Big Picture
As we have seen, deposits no longer bring
liquidity risk. In fact, they insulate banks from such risk because deposits
flow into banks when markets dry up. Thus, moving away from required reserves
makes sense. What doesn’t make sense is not replacing required reserves with
another form of protection.
The Economic Implications Of Quantifying Policy
Uncertainty – The
Capital Spectator
Authors
constructed an index to measure policy uncertainty and compare it to stock
prices and employment figures.
What Makes Countries Rich or Poor? – The
New York Review of Books
Jared
Diamond reviews the ‘Why Nations Fail’.
What Economists Get Wrong About Science and
Technology – Slate
Trying to quantify research's effects on the
economy always fails.
Fiscal spending and growth: More patterns – voxeu.org
It is not just the OECD countries where fiscal
policy is the subject of fierce debate. This column presents results from an
“event analysis” carried out on a database of 140 countries over the period
1972-2005. It suggests that, for developing countries at least, a fiscal
stimulus can be effective – provided the rest of the economy is stable and the
fiscal deficit is low.
dance of the heavyweights – the
research puzzle
Daniel Kahneman and Eugene Fama appeared a day
apart at the conference and were obviously worlds apart in their theories of
economic decision making.
In the Balance: Collective Memory – BBC
(mp3)
In the Balance gets to grips with why
businesses DON'T learn the lessons of the past. Why for example banks like JP Morgan
make huge trading losses. What's happened to the collective memory of
organisations? And once the mistakes are made - what about the blame game -
should it be the boss or the underlings who take the rap when it all goes
pearshaped?
Finance and the Good Society – LSE
The reputation of the financial industry could
hardly be worse than it is today with the ongoing financial crisis. Robert
Shiller is no apologist for the sins of finance…However in his new book, he
argues that, rather than condemning finance, we need to reclaim it for the
common good. He makes a powerful case for recognizing that finance, far from
being a parasite on society, is one of the most powerful tools we have for
solving our common problems and increasing the general well-being.