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EUROPE
EU benefits row, European elections and what lessons would Scottish
independence have for the Eurozone?
Euro-area getting
perilously close to deflation – The
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"
EUROPEAN CENTRAL BANK
ECB response to
Parliament on Troika – ECB
How to translate
“QE” into German – alphaville
/ FT
For ECB Does Whatever
It Takes = Whatever It Wants? – WSJ
CRISIS COUNTRIES
Greece Industrial Production Declines 5th Consecutive Month,
Unemployment New High of 27.8%; How Long Can Greek Coalition Last? – Mish’s
UNITED STATES
FEDERAL RESERVE
Janet Yellen: The
Sixteen Trillion Dollar Woman – TIME
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
Keynesian – alphaville
/ 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'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
ASIA
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.
All around the world China’s support for
authoritarian states is backfiring.
Effectiveness of
Japanese industrial policy – voxeu.org
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.
EMERGING
Woah There: EM
Outflows Slow – WSJ
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.
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 Level – BB
MARKETS
Research Review: Asset Allocation Design & Management – The
Capital Spectator
Active ETFs That Beat
The Market In 2013 – ETFDB
FX volumes on Thomson
Reuters fall 11.5 pct in Dec to new low – Reuters
Volatility insurance
and exchange rate predictability – voxeu.org
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 Quant – CSSA
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.
ECONOMICS
The Biggest Myths in
Economics – PragCap
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 redux – Bruegel
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 Presents – naked
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 VS FISCAL
Monetary policy,
fiscal policy, the target, and the size of the central bank – Worthwhile
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 Stabilizers – Ashokarao
Monetary versus
Fiscal: an odd debate – Mainly
Macro
How does market
monetarism differ from new Keynesianism? – The Money Illusion