Skip to main content

Secular Stagnation (We're All Doomed!)

Vox have just released an e-book entitled Secular Stagnation: Facts, Causes and Cures. The list of contributors is impressive - Larry Summers, Paul Krugman, Barry Eichengreen, Edward Glaesar, Nick Crafts, Joel Mokyr are just some of the authors. The book's summary is here. The workable definition of secular stagnation which emerges from the book is "that negative real interest rates are needed to equate saving and investment with full employment." The main concern of the authors is "that secular stagnation makes it harder to achieve full employment with low inflation and a zero lower bound on policy interest rates."



Popular posts from this blog

How Valuable Are Connections?

Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...
Read more

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press . 
Read more

Money, Money, Money

In my copious spare time, I am a notaphilist (i.e., a collector of bank notes).  In the not too distant past, individual banks issued their own notes.  However, today, apart from in N. Ireland and Scotland, central banks around the world have a monopoly of the note issue in most economies.   At Feb. 2011, Northern Irish and Scottish banks had a staggering £1,900m and £3,500m of notes in circulation respectively.   As regular travellers across the Irish Sea realise, these notes are not legal tender.   What is special about banks in N. Ireland and Scotland that they can issue their own notes?  Simply, it is an accident of history.  As legislation was passed which centralised the note issue in England in the Bank of England, Scottish and Irish banks were given certain exemptions.  The result today is that these banks can issue their own notes. N. Irish and Scottish Banks, however, have to hold backing assets (i.e., Bank of England reserve...
Read more