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Saturday, January 11

11th Jan - W/E: Linkfest

Previously on MoreLiver’s:

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Brussels blog round up 4-10 JanuaryEuropp / LSE
EU benefits row, European elections and what lessons would Scottish independence have for the Eurozone?

Euro-area getting perilously close to deflationThe Economist

German foreign minister attacks 'brainless Eurosceptics'The Telegraph
Germany calls for "brainless Eurosceptics" to be "confronted" because they "could prove dangerous to the EU"

ECB response to Parliament on TroikaECB

How to translate “QE” into Germanalphaville / FT

For ECB Does Whatever It Takes = Whatever It Wants?WSJ

Greece Industrial Production Declines 5th Consecutive Month, Unemployment New High of 27.8%; How Long Can Greek Coalition Last?Mish’s

Economists Line Up To Bash TurkeyWSJ
Turkey’s economy: The mask is off The Economist

Janet Yellen: The Sixteen Trillion Dollar WomanTIME
In her first and only interview as Fed chief, the economist says why she thinks the housing market is back on track, companies will invest, and more new jobs are on the way this year. She now has the world's largest economy in her hands

Will history look kindly on Ben Bernanke?The Week
Some will say he left a big mess. Others that he averted a second Great Depression.

Greenspan, the Keynesianalphaville / FT
Greenspan (generally pigeon-holed as a free-market loving Ayn Randian type) is getting pretty Keynesian nowadays. Indeed, having understood that the 2008 crisis revealed a “flaw” in his world view, rather than getting bitter about it, Greenspan appears to have spent the last few years trying to understand where he went wrong.

Fed May Face Early Test on Forward Guidance as Jobless Rate FallsWSJ

Fed's Lacker Admits "Asset Bubble" - Reluctant To Pop It – ZH
Lacker: Fed Still Likely to Consider Another Cut in Bond Buys at January Meeting – WSJ
Fed’s Bullard Sees U.S. Economy Growing 3.2% This Year – WSJ

How high will the rate wall get?alphaville / FT
China’s central bank’s push to keep money market rates up as it seeks to delever the financial system without, hopefully, bringing the whole thing down.

China’s Dictatorship Diplomacy ImplodesThe Diplomat
All around the world China’s support for authoritarian states is backfiring.

Effectiveness of Japanese industrial
The presumed success of Japanese post-war industrial policy has been used to advocate similar policies in other countries. Key to such arguments then is the empirical demonstration of the policies’ effects. This column presents research making use of a novel dataset that allows controlling for industry heterogeneity across many disaggregated industries. The effects of the quota removal on productivity were significantly positive, while the effects of tariffs on labour productivity were insignificant.

Woah There: EM Outflows SlowWSJ
Both bond and equity funds focusing on emerging markets continue where they left 2013: suffering outflows. But those outflows are much smaller than some of sizable shifts seen last year.

India's industrial output shrinks, trade gap widensReuters
India trade deficit narrows, but watch the gold beyondbrics / FT
That sounds like good news – but it’s not as good as a deficit of just $9bn in November – and it is
possible that the gap will soon balloon as the government loosens its grip on gold imports.

Brazil 2013 Inflation Exceeds All Estimates and 2012 LevelBB

Research Review: Asset Allocation Design & ManagementThe Capital Spectator

Active ETFs That Beat The Market In 2013ETFDB

Dalio’s Bridgewater Associates Posts Lackluster ReturnsNYT

FX volumes on Thomson Reuters fall 11.5 pct in Dec to new lowReuters

FX Concepts' Taylor says he's back, will manage funds againReuters

Volatility insurance and exchange rate
Economists widely view exchange rate changes as unpredictable. This column explains a new currency trading strategy with economically valuable and statistically significant currency excess returns. The returns are generated primarily by spot exchange rate returns, rather than interest differentials. The strategy’s performance can be explained by speculator-hedger interactions in the currency market in the presence of time-varying capital constraints on speculators.

The Essence of Being A QuantCSSA
In truth the quant is as much a threat to the classic portfolio manager role as the machine is to human labor. A quant can manufacture investment approaches that are far cheaper, more disciplined, have greater scale, and are more reliable.

The Biggest Myths in EconomicsPragCap
The government “prints money” * Banks “lend reserves” * The US government is running out of money and must pay back the national debt * The national debt is a burden that will ruin our children’s futures * QE is inflationary “money printing” and/or “debt monetization” * Hyperinflation is caused by “money printing” * Government spending drives up interest rates and bond vigilantes control interest rates * The Fed was created by a secret cabal of bankers to wreck the US economy * Fallacy of composition * Economics is a science

Blogs review: The minimum wage debate reduxBruegel
US President Barack Obama included a raise the minimum wage in last year’s budget in an effort to fight inequality and alleviate poverty, but was unsuccessful in securing its passage. Following his recent speech on inequality and upcoming mid-term elections, Democrats appear determined to redouble their efforts in 2014 to fight for this measure at the Federal level (where the current Democratic bill would raise to $10.10/ hour by 2016), as well as at the State level.

Yanis Varoufakis: Seven Economic Views on Christmas Presentsnaked capitalism
a cheeky take on the usual clash between different ‘schools’ of economics, focusing on how each of seven such ‘schools’ might view Christmas…presents.[1] Besides the comic value of the entries below, there is a serious aspect to them: for they reveal, at least, partly, the pompousness, the self-importance, the vacuity, the dark side even of each and every economic theory.

Monetary policy, fiscal policy, the target, and the size of the central bankWorthwhile

The Relative Efficacy of Fiscal and Monetary Policy at the Zero Lower Bound: Where Are the Goalposts, Anyway?DeLong

Monetary Offset in a World with Automatic StabilizersAshokarao

Monetary versus Fiscal: an odd debateMainly Macro

How does market monetarism differ from new Keynesianism?The Money Illusion