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BlogHelp Is Not on the Way
An update on the distressing state of fiscal and monetary policy in the United States and Europe: Chairman of the Federal Reserve to Congress: “I’d be much more comfortable, in fact, if Congress would take some of this burden from us ….” Congress to Bernanke: No thanks. And while we’re on the subject, we would [...] -
Blog
Lessons of the JPMorgan Chase Affair: What Is All This Risk For?
After the news broke of his firm’s (now $3 billion) loss on a hedge gone awry, Jamie Dimon quipped: “just because we’re stupid doesn’t mean everybody else was.” Stupidity, however, is beside the point. Jan Kregel has pointed out how a lot of the discussion surrounding this episode is designed to give the impression that [...] -
Policy Notes No. 6The Wrong Risks
What can we learn from JPMorgan Chase’s recent self-proclaimed “stupidity” in attempting to hedge the bank’s global risk position? Clearly, the description of the bank’s trading as “sloppy” and reflecting ”bad judgment” was designed to prevent the press reports of large losses from being used to justify the introduction of more stringent regulation of large, […] -
Policy Notes No. 6
Οι λάθος κίνδυνοι
Τι μπορούμε να διδαχθούμε από την πρόσφατη αυτοαποκαλούμενη «ηλιθιότητα» της JPMorgan Chase στην προσπάθεια αντιστάθμισης κινδύνου της παγκόσμιας θέσης της τράπεζας; Σαφώς, η περιγραφή των συναλλαγών της τράπεζας ως «τσαπατσούλικες» και αντανάκλαση «κακής εκτίμησης» είχε στόχο, στην περίπτωση αυτή, να αποτρέψει τα δημοσιεύματα στον Τύπο για τις μεγάλες απώλειες που υπέστη η τράπεζα από το […] -
Policy Notes No. 5
Austerity that Never Was?
The commonly cited example of the successful application of “internal” devaluation as a strategy for economic recovery is that of the Baltic economies. In this Policy Note, we discuss whether the Baltic austerity plan worked, how it was designed to work—and, most important, whether it can be replicated anywhere else. We argue that the Baltic […] -
Policy Notes No. 5
Η λιτότητα που δεν υπήρξε ποτέ;
Οι οικονομίες της Βαλτικής παρουσιάζονται συχνά ως παράδειγμα ενός επιτυχημένου προγράμματος λιτότητας, με την εφαρμογή της «εσωτερικής» υποτίμησης ως στρατηγική για οικονομική ανάκαμψη. Σε αυτό το Σημείωμα Πολιτικής εξετάζουμε αν το σχέδιο λιτότητας που επιβλήθηκε στις οικονομίες της Βαλτικής ήταν όντως επιτυχημένο και, πιο σημαντικό, αν μπορεί να αναπαραχθεί κάπου άλλου. Υποστηρίζουμε ότι η πρόσφατη […] -
Press ReleaseAusterity Is Destroying Any Chance for Economic Growth in Struggling Eurozone Countries, New Levy Study Says
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Blog
Try Out a New Macro Model and a New Technology
You wonder what will happen when markets finally start working. How about, for example, a market that changes prices and wages quickly in response to fluctuations in demand? In a mixed economy with a government that tries to provide fiscal stimulus as needed, will it be of help to move toward such fast-adjusting markets? The [...] -
Blog
The Wrong Narratives
News sections are littered with shortcuts for explaining what’s going on in the eurozone, often featuring easy, morally sodden narratives. But the real problem here is not that narratives and other shortcuts are being employed—after all, sometimes the data need a little help. The real problem is that they’re using the wrong narratives. We’re told [...] -
Public Policy Brief No. 124
The Mediterranean Conundrum
Conventional wisdom has calcified around the belief that the countries in the eurozone periphery are in trouble primarily because of their governments’ allegedly profligate ways. For most of these nations, however, the facts suggest otherwise. Apart from the case of Greece, the outbreak of the eurozone crisis largely preceded dramatic increases in public debt ratios, […] -
Blog
No More Fiscal Policy Bank Shots
A little while back the Wall Street Journal observed that if there were as many people employed by government today as there were in the last month of George W. Bush’s tenure, the unemployment rate would be around 7.1 percent. Job creation policy, in other words, can sometimes be quite simple. Step One: stop firing [...] -
Blog
Public Citizen on the Repo Ruse
Whether or not you already know what a “repo” is, Public Citizen’s new report on repurchase agreements, which played a part in the recent financial crisis (as well as the collapse of MF Global), is well worth reading. Here’s their introduction: In the run-up to the 2008 financial crisis, banks depended increasingly on an unreliable [...]