Finance: Past, Present and Future

The UK government's help to buy scheme aims to kick start the housing market by providing taxpayer-funded assistance to home-buyers. Individuals who can only afford to put down a 5% deposit on a house can receive a loan from the government for 20% of the property's value. From the start of 2014, the government will offer a taxpayer-funded guarantee to mortgage lenders who offer mortgages worth up to 95% of a property's value. The scheme has already come in for criticism and may have been behind recent rises in the property market ( click here ).  Many economists fear that the scheme will simply result in another credit-fueled housing bubble, which will further weaken the financial system.

The new QUMS MSc Computational Finance & Trading starts in September. Barry Quinn , the course director, has created a really informative video about the degree here .

I'm on a Blogcation until the end of August!

Below is a short but wide-ranging interview with Charles Goodhart about the financial crisis, the state of the global economy, and central banking.

Following this post from a couple of weeks ago, Niall McGeever   pointed out to me a recent paper on this theme by John Cochrane in the Journal of Economic Perspectives .  Then  Enrico Berkes from the IMF sent me a copy of his IMF working paper, which is entitled ' Too Much Finance '. This is a fascinating paper - you can see the VoxEU summary here .  The paper's abstract is: This paper examines whether there is a threshold above which financial development no longer has a positive effect on economic growth. We use different empirical approaches to show that there can indeed be “too much” finance. In particular, our results suggest that finance starts having a negative effect on output growth when credit to the private sector reaches 100% of GDP. We show that our results are consistent with the "vanishing effect" of financial development and that they are not driven by output volatility, banking crises, low institutional quality, or by differences in bank r

The MSc Finance at Queen's University started in 1993. To celebrate this milestone, a reunion dinner for all MSc graduates is being held in Riddel Hall , the new home of Queen's University Management School, on Friday 13th September 2013. The event has a  Facebook page  and you can purchase your tickets here .  

Click here for the Equality of Opportunity Project website hosted by Harvard (hat tip: Christopher Coyle). This project looks at inter-generational mobility in the United States. Why? Because there is a fear that such mobility in the U.S. (the land of opportunity) is lower than in many developed countries. A summary of the project findings are here  and NY Times coverage is here . Two interesting findings are that family structure and religion are some of the strongest predictors of upward social mobility. They also find that tax policies do little to improve mobility. Lighter colors represent areas where children from low-income families are more likely to move up in the income distribution.  Source:  Equality of Opportunity Project