Economics

UPDATE: 19 MAR 2010: Given the debate on China and its currency peg, I thought this post from November 2008 would be relevant. It called for a new world order centered around a new monetary system. This idea has gained some currency as it…

In reading Scott Sumner’s take on the China currency peg dilemma, I see that both he and Paul Krugman hit on the fundamental problem in the debate: reserves. Everyone is talking about the peg as if relaxing the peg will be the magic bullet…

This is a post from John Lounsbury which will cover ground on the official designation of recessions and his own designation of depressions about which he has written in the past. Previous articles in this series have discussed: The…

Popular myth and, allegedly, the laws of aerodynamics have it that the bumblebee should not be able to take flight. Yet still, our good bumblebee refuses to be pulled down by such details and year after year it takes flight as if nothing…

The question of fiscal sustainability looms large at the moment - not just in the peripheral nations of the eurozone, but also in the UK, the US, and Japan. More restrictive fiscal paths are being proposed in order to avoid rapidly rising…

The federal funds rate has been creeping up in recent days.  At first, many dismissed it as a technical quirk.  In early February, the effective federal funds rate firmed to 14 bp as it did in early March.  However it did not…

The following is a post by Marshall Auerback, who also writes at New Deal 2.0. We’ve persistently taken the view that there is no economic doctrine, no magic number, which would imply a firm external constraint as far as public…

This post originally appeared at Alpha.Sources. It is a well known dictum in the context of economic analysis that you have to distinguish between stocks and flows and how focus on one in stead of the other lead to misguided analysis. It…

Michael Pettis really gets at the heart of the fallacious argument that China is somehow bankrolling the United States government. The fact is the Chinese have fixed their currency at an exchange rate which induces a current account surplus…

Edward wrote a piece about Japan’s government net asset value falling below zero. He thought it would make sense if I gave you an alternative view using Richard Koo’s latest thinking about the Japanese experience, especially given the…