EUROPE
Brussels blog
round-up for 13 – 19 July – Europp
/ LSE
Greece approves more austerity, Brussels interns on the march, and the
EU’s messy biofuels policy
People Like Us – Fistful of Euros
Wolfgang Schäuble: Germany has no taste for
shaping others in its image – but we want a European Union that can compete
Angela Merkel – the
Teflon chancellor? – The
World / FT
Redesigning the ECB with regional rather than
national central banks – voxeu.org
Eurozone national
central banks that take a national perspective risk politicising the ECB’s
monetary policy. This column argues that this is a significant risk that should
be overcome with a fundamental overhaul of the Eurosystem. A central element would
be to take the ‘national’ out of the EZ’s national central banks. Just as US
regional Fed banks encompass more than one US state, EZ ‘national’ central
banks area of responsibility should be redrawn along economic geography lines
rather than nation lines. An example of such a proposal is provided.
CENTRAL BANKS
The effectiveness of the non-standard policy
measures during the financial crises: the experiences of the Fed and the ECB – ECB (pdf)
ECB Working papers by
Seth Carpenter, Selva Demiralp, Jens Eisenschmidt
Do euro area countries respond asymmetrically
to the common monetary policy?
– Bank
of Italy (pdf)
Bank of Italy Working Papers by Matteo Barigozzi, Antonio
Maria Conti and Matteo Luciani
Draghi to Carney Face Test Backing Guidance on
Rates – BB
PIIGS
Greek Parliament Approves Austerity Measures to
Release Funds – BB
On the fifth day of
meetings between the country’s three main parties, the PS, PSD and CDS-PP,
hopes are fading of reaching a deal over how to implement President Aníbal
Cavaco Silva’s July 10 call for “national salvation”.
Hallelujah, Spain is recovering – The
Telegraph
UNITED STATES
Does the Fed funds
rate even matter? – alphaville
/ FT
Changing the Mix, Not Level, of Accommodation – Tim
Duy’s Fed Watch
Trying to reconcile
the tapering talk with the data is not easy.
I think that's why many analysts missed the direction the Fed was
heading. It was somewhat
incomprehensible based on the Fed's previous guidance. It could be the effort to change the policy
mix but not the level of accommodation was Bernanke's attempt to gain consensus
within the FOMC and maintain accomodation, but he may have underestimated the
importance of asset purchases in holding rates low.
Janet Yellen for Fed
Chair
– Calculated
Risk
I've linked to a couple of articles below and they suggest the choice is
between Janet Yellen and Larry Summers - and the key difference is
"leadership style". However
another key difference is that Yellen has a much better track record of
correctly analyzing the economic situation, while Summers has frequently been wrong
(but never in doubt).
Larry Summers's Billion-Dollar Bad Bet at
Harvard – BB
Despite an impressive
resume that includes stints as Treasury Secretary and chief economist of the
World Bank, there is a very good reason Summers shouldn't be in charge of
monetary policy: He seems to have trouble with interest rates.
The Fed Succession – Krugman /
NYT
Fed chairman must focus on price stability – The
A-list / FT
First, the new
chairman will need to have – or will need to develop – a firm grip on the
theory and practice of how the expansion and shrinkage of a central bank’s
balance sheet affects the economy… The second and arguably much more important
attribute of any new chairman will be the ability and determination to
safeguard the Fed’s anti-inflation credibility.
ASIA
PBOC Scraps Lending
Rate Floor In "Full Liberalization" Of Interest Rate Controls – ZH
China: Interest rate
reform takes a welcome step forward – Nordea
China’s Ponzi Bicycle
Is Running Into A Brick Wall – Krugman
/ NYT
China may look like a
candidate for the type of protests currently sweeping the developing world. But
for the time being, China is well-positioned
to navigate challenges far better than its emerging market competitors.