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BlogGalbraith Appears Before Ron Paul Hearing on the Federal Reserve
Congressman Ron Paul held a subcommittee hearing on reform of the Federal Reserve system a couple days ago that featured testimony from Senior Scholar James Galbraith, Alice Rivlin, John Taylor, Jeffrey Herbener, and Peter Klein. There were a wide variety of topics addressed, including the size of the Fed’s balance sheet, proposals to make the [...] -
Greece Will Muddle Through
CNNMoney, May 10, 2012. © 2012 Cable News Network. A Time Warner Company. All Rights Reserved. The political stalemate in Greece has raised concerns that the nation is more likely than ever to leave the euro currency union. But it may be too soon to say that the Greek government—once there is one—will decide that […] -
Blog
Will Greece “Muddle Through”?
The recent Greek elections, which did not produce a party (or a viable coalition) with a majority in Parliament, have occasioned a lot of excited speculation about Greece either leaving the eurozone or being nudged out. Dimitri Papadimitriou comments today in a CNN Money piece about this possibility and offers a slightly more sober assessment, [...] -
Working Paper No. 720
What Are the Driving Factors behind the Rise of Spreads and CDSs of Euro-area Sovereign Bonds?
This paper examines the underlying dynamics of selected euro-area sovereign bonds by employing a factor-augmenting vector autoregressive (FAVAR) model for the first time in the literature. This methodology allows for identifying the underlying transmission mechanisms of several factors; in particular, market liquidity and credit risk. Departing from the classical structural vector autoregressive (VAR) models, it […] -
Working Paper No. 719Reorienting Fiscal Policy after the Great Recession
The paper evaluates the fiscal policy initiatives during the Great Recession in the United States. It argues that, although the nonconventional fiscal policies targeted at the financial sector dwarfed the conventional countercyclical stabilization efforts directed toward the real sector, the relatively disappointing impact on employment was a result of misdirected funding priorities combined with an […] -
Working Paper No. 719
Επαναπροσδιορίζοντας τη δημοσιονομική πολιτική μετά τη Μεγάλη Κάμψη
Το κείμενο αξιολογεί τις πρωτοβουλίες δημοσιονομικής πολιτικής που εφαρμόστηκαν κατά τη διάρκεια της Μεγάλης Κάμψης στις Ηνωμένες Πολιτείες. Η συγγραφέας του θεωρεί ότι, παρά το γεγονός ότι οι μη συμβατικές δημοσιονομικές πολιτικές που ήταν προσανατολισμένες προς τον χρηματοοικονομικό τομέα επισκίασαν τις συμβατικές αντικυκλικές προσπάθειες σταθεροποίησης προς τον πραγματικό τομέα της οικονομίας, η σχετική απογοητευτική επίπτωση […] -
Blog
Taking Finance Seriously in 2007
“In late 2007,” writes Peter Orszag, “the midpoint of the range that the Fed projected for real gross-domestic-product growth in 2008 was more than 2 percent.” Most analysts were still expecting the fallout from the subprime crisis to be largely contained because, as Orszag puts it, their models “had at best a very rudimentary financial [...] -
Blog
It’s Hard to Fix What You Don’t Think Is Broken
In last week’s Bloomberg column, Peter Orszag (former head of CBO and OMB) lamented that most “official forecasters” relied (and still rely) on economic models that led them to completely underestimate the severity of the downturn that resulted from the subprime mortgage crisis. These “bad models,” as Bloomberg‘s headline writers call them, whiffed badly on [...] -
Markets Could Stumble after France, Greece Votes
The Associated Press, May 6, 2012. Copyright 2012 Bloomberg L.P. All Rights Reserved. Financial markets will likely stumble this week after elections in Greece and France cast a pall of uncertainty over Europe’s efforts to solve its debt crisis. Greek voters on Sunday voted mostly for two parties that want to change the nation’s international […] -
One-Pager No. 30Building Effective Regulation Requires a Theory of Financial Instability
Hyman Minsky had particular views about how the regulatory system and financial architecture should be reformulated, and one of the many lessons we can learn from his work is that there is an intimate connection between how we think about the prospect of financial market instability and how we approach financial regulation. Regulation cannot be […] -
One-Pager No. 30
Η οικοδόμηση ενός αποτελεσματικού ρυθμιστικού συστήματος απαιτεί μια θεωρία χρηματοοικονομικής αστάθειας
Ο Χάιμαν Μίνσκυ είχε συγκεκριμένες απόψεις για το πώς θα έπρεπε να αναδιαμορφωθεί το ρυθμιστικό σύστημα και η χρηματοοικονομική αρχιτεκτονική, και ένα από τα πολλά μαθήματα που μπορούμε να αντλήσουμε από το έργο του είναι ότι υπάρχει μια στενή σχέση ανάμεσα στον τρόπο που σκεφτόμαστε για την προοπτική της αστάθειας των χρηματοπιστωτικών αγορών και το […] -
Working Paper No. 718
Aggregate Production Functions and the Accounting Identity Critique
In a reply to Felipe and McCombie (2010a), Temple (2010) has largely ignored the main arguments that underlie the accounting identity critique of the estimation of production functions using value data. This criticism suggests that estimates of the parameters of aggregate production functions cannot be regarded as reflecting the underlying technology of the industry. While […]