Thursday , May 13 2021
Home / Tag Archives: Economics – macro, micro etc

Tag Archives: Economics – macro, micro etc

History of Financial Repression: Will it make a comeback?

John Mullin in this Richmond Fed article traces history of financial repression and whether it will comeback: In the early 1960s, South Korea’s economy was far from the dynamic performer that would later become known as an “Asian Tiger.” On the contrary, its disappointing growth drew unfavorable comparisons to North Korea at the time. In their seminal 1973 treatises on financial markets and economic development, Stanford University economists Ronald McKinnon and Edward Shaw labeled...

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Collapse of Greensill Capital has strong historical parallels with fall of the medieval Medici bank

Superb article by Prof Harold James in Proj Syndicate: The collapse of Greensill Capital has a strong historical parallel in the decline and fall of the medieval Medici bank after it went too far with the financial innovations of its own day. The lessons from both failures are clear, but most likely will be forgotten until the next financial meltdown. This entry was posted on May 11, 2021 at 3:19 pm and is filed under Economics -...

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FinTech, BigTech and Cryptos – will new technology render banks obsolete?

Norges Bank Deputy Governor Ida Wolden Bache in this speech: Not many years ago, it was inconceivable that Facebook would launch its own means of payment or that large international banks would offer cryptocurrency investments. The landscape is evolving quickly. The extent to which new solutions are adopted does not only depend on their features, but also on the alternatives. In Norway, banks have made great headway in terms of digitalisation. We have an efficient and secure payment...

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Impact of Micro Financial reforms vs Impact of Macro Financial reforms

Spyridon Boikos, Ioannis Bournakis, Dimitris Christopoulos and Peter McAdam in this working paper differentiate between micro and macro financial reforms: We develop a horizontal R&D growth model that allows us to investigate the different channels through which financial reforms affect R&D investment and patent activity. First, a “micro” reform that abolishes barriers to entry in the banking sector produces a straightforward result: a decrease in lending rates which stimulates...

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The Battle Over Patents: Why US-style patent system has come to dominate other methods of encouraging inventive activity?

Stephen H. Haber & Naomi R. Lamoreaux in this timely NBER paper which is first chapter of their upcoming book: This essay is the introduction to a book of the same title, forthcoming in summer of 2021 from Oxford University Press. The purpose is to document the ways in which patent systems are products of battles over the economic surplus from innovation. The features of these systems take shape as interests at different points in the production chain seek advantage in any way...

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The Practice of Flexible Inflation Targeting in India – A Preliminary Assessment

Niranjan Rajadhyaksha and Prakhan Misra in this new IPPRI paper: This paper examines how the new flexible inflation targeting framework has worked in practice in India, five years after it was introduced. The policy decisions taken by the Reserve Bank of India are analysed on four fronts — the trajectory of inflation, the inflation forecasting record, the voting behaviour of the monetary policy committee, and the ability to keep the weighted average call money rate within the policy...

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The conflict between CBDC goals and design choices

Prof Antonio Fatas of INSEAD in this voxeu research: There is growing interest by central banks on the launch of digital currencies accessible to everyone. The main goal is to produce a more resilient, efficient and inclusive payment system. This column argues that central bank digital currency alone will not achieve those goals unless central banks are willing to engage in all the steps of the payment system or complement their digital currency with a broad set of regulatory changes to...

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Book Review: The Conjuror’s Trick – An interpretive history of Paper Money in India by Bazil Shaikh

I review this superb “visual delight” book by Bazil Shaikh: The Conjuror’s Trick – An interpretive history of Paper Money in India. The book is published by Marg Publications in December 2020. A Visual Delight history of Indian Paper Money Amol Agrawal The Conjuror’s Trick: An interpretive history of Paper Money in India, Bazil Shaikh, Marg Publications, December 2020. Post Demonetization- 2016, I became highly interested in history and evolution of currency (Indian and global). In this...

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United States of Europe vs United States of America

Keith Head and Thierry Mayer in the new edition of Journal of Economic Perspectives analyse whether United States of Europe is getting any closer to United States of America. They compare progress across four freedoms: goods, services, persons, and capital. There has been progress in goods, services and capital. Persons is where there are issues: In terms of formal institutions, the European Union is not on the verge of becoming a “United States of Europe.” But on multiple fronts, EU...

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Greening Monetary Policy: Evidence from the People’s Bank of China

Macaire Camille and Naef Alain in this Banque De France research: In June 2018, the People’s Bank of China (PBoC) decided to include green financial bonds into the pool of assets eligible as collateral for its Medium Term Lending Facility. The PBoC also gave green financial bonds a “first-among-equals” status. We measure the impact of the policy on the yield spread between green and non-green bonds. We show that pre-reform trends are minor, meaning that both green and non-green bonds...

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