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BlogWhen Monetary Policy Pushes Hard
With the recent announcement of QE2 (quantitative easing 2), the Federal Reserve’s new round of long-maturity asset purchases, it is worth looking at some of the effects of QE1. In November 2008, the Fed announced large-scale purchases of mortgage-backed securities and debt issued by the GSEs. Its securities holdings began to climb sharply in early [...] -
Blog
A Minskian Explanation of the Causes of the Current Crisis
In recent weeks, the explanation for the financial and economic crisis that has gripped the world economy has shifted sharply from deregulation and lack of governmental oversight of financial institutions to fraud and criminal activity. In truth, the US Federal Bureau of Investigation began to warn of an “epidemic” of mortgage fraud back in 2004, [...] -
Working Paper No. 634How Brazil Can Defend Against Financialization and Keep Its Economic Surplus for Itself
The post-1945 mode of global integration has outlived its early promise. It has become exploitative rather than supportive of capital investment, public infrastructure, and living standards. In the sphere of trade, countries need to rebuild their self-sufficiency in food grains and other basic needs. In the financial sphere, the ability of banks to create credit […] -
Working Paper No. 633
Immigrant Parents’ Attributes versus Discrimination
There is much interest in explaining the persistent ethnic gaps in education among Israeli Jews; specifically, the much lower attainments of those from Asian and African countries compared to the rest—Mizrahim vs. Ashkenazim, respectively. Some explanations (especially early ones) have stressed premigration immigrant characteristics, particularly the relatively lower level of educational attainment among Mizrahim. More […] -
Blog
Something from the Bookshelf
I’ve emerged this morning to report on some of what’s transpired recently. I’m not referring to whatever might have happened yesterday and overnight at major centers of research in neoclassical macroeconomics, such as the University of Minnesota. I’m referring to a new book by John Quiggin entitled Zombie Economics: How Dead Ideas Still Walk Among [...] -
Working Paper No. 632
The Household Sector Financial Balance, Financing Gap, Financial Markets, and Economic Cycles in the US Economy
This paper investigates private net saving in the US economy—divided into its principal components, households and (nonfinancial) corporate financial balances—and its impact on the GDP cycle from the 1980s to the present. Furthermore, we investigate whether the financial markets (stock prices, BAA spread, and long-term interest rates) have a role in explaining the cyclical pattern […] -
Working Paper No. 631
Exploring the Philippine Economic Landscape and Structural Change Using the Input-Output Framework
This paper explores the degree of structural change of the Philippine economy using the input-output framework. It examines how linkages among economic sectors evolved over 1979–2000, and identifies which economic sectors exhibited the highest intersectoral linkages. We find that manufacturing is consistently the key sector in the Philippine economy. Specifically, resource-intensive and scale-intensive manufacturing industries […] -
Public Policy Brief No. 116An Alternative Perspective on Global Imbalances and International Reserve Currencies
The stability of the international reserve currency’s purchasing power is less a question of what serves as that currency and more a question of the international adjustment mechanism, as well as the compatibility of export-led development strategies with international payment balances. According to Senior Scholar Jan Kregel, export-led growth and free capital flows are the […] -
Working Paper No. 630
Managing Finance in Emerging Economies
India has been experiencing rising inflows of overseas capital since the deregulation of its financial sector. Often looked upon as a success story among other emerging economies, the country has been subject to pitfalls and trilemmas that deserve attention. It has been officially recognized by the Governors of RBI that the financial crisis in India […] -
Working Paper No. 629
The Impact of Geography and Natural Resource Abundance on Growth in Central Asia
This paper examines the growth experience of the Central Asian economies after the breakup of the Soviet Union. In particular, it evaluates the impact of being landlocked and resource rich. The main conclusions are: (1) Over the period 1994–2006, the landlocked resource-scarce developing countries of Central Asia grew at a slower pace than other landlocked […] -
Policy Notes No. 3Why the IMF Meetings Failed, and the Coming Capital Controls
The global financial breakdown is part of the price to be paid for the refusal of the Federal Reserve and Treasury to accept a prime axiom of banking: debts that cannot be paid, won’t be. These agencies tried to “save” the banking system from debt writedowns by keeping the debt overhead in place, while reinflating […] -
Working Paper No. 628
The Role of Trade Facilitation in Central Asia
With a decrease in formal trade barriers, trade facilitation has come into prominence as a policy tool for promoting trade. In this paper, we use a gravity model to examine the relationship between bilateral trade flows and trade facilitation. We also estimate the gains in trade derived from improvements in trade facilitation for the Central […]