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Home / Tag Archives: Financial Markets/ Finance

Tag Archives: Financial Markets/ Finance

It’s a wonderful life: A short history of building and loan associations

We all remember the movie It’s a Wonderful Life which is often used to explain Bank run. In the movie Bailey Brothers Building and Loan is a building and loan association. David A. Price and John R. Walter document hstory of these loan associations in this Nice research (came in Jan-2019): Prior to the advent of modern home mortgage markets in the United States, markets in which mortgage-backed securities and government-sponsored enterprises now play significant roles, prospective...

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Free Market or Socialism: Have Economists Really Anything to Say?

Andrea Attar and Thomas Mariotti of INET in this piece: A central tenet of partisans of a free-market system is that it uniquely provides economic agents with the incentives that secure an optimal economic outcome. “I believe in markets,” “People respond to incentives” are among the mantras they repeat tirelessly. Sometimes they take a darker twist, as in the former EU budget commissioner Gunther Oettinger’s ominous “Markets will teach them.” A recent, authoritative example of this view...

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Improving European economy: Draghi’s three Ps of mon policy, Summers’s three Ts of fiscal policy and Buti’s three Fs for structural reforms

Marco Buti of European Commission in this voxeu piece: The current slowdown and lacklustre medium-term growth prospects also indicate that the fiscal, monetary and structural policy mix needs to be changed. As Mario Draghi stated in his speech in Sintra (2019), monetary policy needs to remain patient, persistent and prudent. Fiscal policy needs to fulfil the three Ts as identified first by Larry Summers (2008): timely to be effective, targeted by focusing on high multipliers expenditure...

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Central bankers in climate change policy teams: Good or bad?

My new piece in Moneycontrol. This one reflects on the recent appointment of Mark Carney as adviser to Prime Minster on Climate change. This entry was posted on January 24, 2020 at 11:39 am and is filed under Central Banks / Monetary Policy, Economics - macro, micro etc, Financial Markets/ Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own...

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Robert C. Merton and the Science of Finance

Zvi Bodie, Professor Emeritus, Boston University pays tribute to Prof Merton’s work: In my view, no individual has contributed more to the beneficial relationship between finance theory and practice than Robert C. Merton. Today, he still teaches at MIT and often lectures around the world. Not only has “The Mertonian Revolution in Finance” helped shape modern finance, it has also providedus with insights, theories, and models for our collective future. The title of one of Merton’s recent...

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What Happens When Economics Doesn’t Reflect the Real World?

Prof Anwar Shaikh in this INET video talks about the shortcomings of neoclassical economics. More importantly, he discusses the alternative frameworks as discussed in his book Capitalism: Competition, Conflict, Crises. This entry was posted on January 22, 2020 at 3:13 pm and is filed under Economics - macro, micro etc, Financial Markets/ Finance. You can follow any responses to this entry through the RSS 2.0 feed. You...

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The Green Swan: Central banking and financial stability in the age of climate change

Kudos to BIS for bringing a report with such an innovative title. Taleb made his point about financial risks via his boo titled Black Swan and BIS is doing the same highlighting climate risks with the title Green swan! The report is written by 4 scholars – Patrick Bolton, Morgan Després, Luiz Awazu Pereira da Silva, Frédéric Samama and Romain Svartzman: Climate change poses new challenges to central banks, regulators and supervisors. This book reviews ways of addressing these new risks...

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The origins of microfinance

Marvin Suesse and Nikolaus Wolf in this article: There was a rapid spread of credit cooperatives in rural 19th-century Germany providing small-scale savings and loan services to previously unbanked people. This column shows how these cooperatives helped shift farm investment from grains to potentially profitable but more capital-intensive products, such as the production of meat and dairy. In cases like this, changes in the sector of economic activity are a better metric for the impact...

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A monetary policy framework for all seasons?

Mark Carney of Bank of England in this speech argues that Inflation targeting has been a framework for all seasons in UK: To set the stage for today’s discussions, I would like to do two things. First, I will review the conduct and performance of inflation targeting during my time as Governor. This period, which roughly coincides with the post-crisis recovery and which has seen more than its share of shocks and structural developments,provides some insights to the ability of inflation...

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Bankers as Immoral? The Parallels between Aquinas’s Views on Usury and Marxian Views of Banking and Credit

Thomas Lambert of University of Louisville in this interesting paper looks at history of thought on banking: Throughout history, the performance, practices and ethics of bankers and banking in general have received mixed reviews in both popular and scholarly writings. Early writings by philosophers, clerics, and scribes played a crucial role in the perceptions of banking and banking occupations. Thomas Aquinas’s thoughts and writings were greatly influenced by the Romans’ and Aristotle’s...

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