dunnettreader + fx-misalignment   20

Reading: Barry Eichengreen (2011): Economic History and Economic Policy via Brad DeLong
Barry Eichengreen (2011): Economic History and Economic Policy - EHA Presidential Address 2011
As you read, formulate your answers to the following questions:
1. What does Eichengreen think are the uses of history, as shown in the use of history in trying to understand the macroeconomic crisis that began in 2008?
2.What does Eichengreen think are the abuses of history, as shown in the use of history in trying to understand the macroeconomic crisis that began in 2008?
3.What rules and approaches does Eichengreen arrive it for future people trying to use history better?
Downloaded via iPhone to DBOX
monetary_policy  historiography-postWWII  QE  fiscal_policy  unemployment  historiography-19thC  economic_history  economic_policy  Keynesianism  speech  FX-rate_management  downloaded  central_banks  Great_Depression  historiography  FX  austerity  financial_system  financial_crisis  financial_regulation  Minsky  historiography-20thC  FX-misalignment  Great_Recession  inflation 
january 2017 by dunnettreader
Joseph Joyce - Capital Flows and Financial Crises | Capital Ebbs and Flows - Oct 2016
Prof at Wellesley. The impact of capital flows on the incidence of financial crises has been recognized since the Asian crisis of 1997-98. Inflows before the crisis contributed to…
Pretty much my position re Chile's controls in 1990s - FDI good, portfolio vulnerable to hot money, bad, especially foreign-denominated debt, but also bank deposits attracted by interest rates but easily reversed. But they're finding that it's not just the flows that are destabilizing -- exchange rate appreciation comes with foreign capital buying debt assets as well. So much for developing local bond markets? -- See links to papers, tracking not just macro level but B-schools looking at firm-level incentives, who goes in for leverage, etc.
economic_history  financial_crisis  financialization  emerging_markets  capital_flows  FDI  capital_markets  sovereign_debt  FX-misalignment  FX  economic_policy  from instapaper
october 2016 by dunnettreader
Dani Rodrik and Arvind Subramanian - Why Did Financial Globalization Disappoint? | IMF Staff Papers - Jan 2009
IMF Staff Papers (2009) 56, 112–138. doi:10.1057/imfsp.2008.29; published online 6 January 2009 -- The stylized fact that there is no correlation between long-run economic growth and financial globalization has spawned a recent literature that purports to provide newer evidence and arguments in favor of financial globalization. We review this literature and find it unconvincing. The underlying assumptions in this literature are that developing countries are savings-constrained; that access to foreign finance alleviates this to boost investment and long-run growth; and that insofar as there are problems with financial globalization, these can be remedied through deep institutional reforms. In contrast, we argue that developing economies are as or more likely to be investment- than savings-constrained and that the effect of foreign finance is often to aggravate this investment constraint by appreciating the real exchange rate and reducing profitability and investment opportunities in the traded goods sector, which have adverse long-run growth consequences. It is time for a new paradigm on financial globalization, and one that recognizes that more is not necessarily better. Depending on context and country, the appropriate role of policy will be as often to stem the tide of capital inflows as to encourage them. Policymakers who view their challenges exclusively from the latter perspective risk getting it badly wrong. - downloaded pdf to Note
paper  downloaded  IMF  international_political_economy  international_finance  global_economy  emerging_markets  LDCs  capital_flows  investment  investment-government  development  economic_growth  economic_policy  economic_reform  access_to_finance  capital_controls  FX-misalignment  FX-rate_management  economic_theory  macroeconomics  international_economics  financial_economics  financial_sector_development 
may 2016 by dunnettreader
Robert Kuttner - America's Collapsing Trade Initiatives | HuffPost blog - Sept 2015
As Kuttner says, these deals are collapsing under their own (lack of) logic -- though the MNCs that would benefit will do their utmost to keep them alive. The ISDS problem is looking increasingly fatal in the EU - a proposal for a "better" dispute resolution forum is being rejected by both the Friends of the Earth and the US Chamber of Commerce. Kuttner also thinks Canada, regardless of who's the next PM, will struggle to swallow it. The most maddening claim is how the MNCs will accept the US "giving away the store" seen from an American angle of jobs and trade deficits, since their foreign manufacturing operations will benefit.
MNCs  Trans-Pacific-Partnership  investor-State_disputes  FX-rate_management  Labor_markets  wages  Pocket  EU_governance  trade  Transatlantic_Trade_and_InvestmentPartnership  US-China  capital_flows  Obama_administration  China-international_relations  trade-policy  trade-agreements  ISDS  unemployment  US_foreign_policy  FX-misalignment  from pocket
september 2015 by dunnettreader
Aida Caldera, Mikkel Hermansen, Oliver Röhn - Economic resilience: A new set of vulnerability indicators | VOX, CEPR’s Policy Portal - 19 September 2015
The Global Crisis and its high costs have revived interest in early warning indicators of economic risks. This column presents a new set of indicators to detect vulnerabilities and assess country-specific risks of suffering a crisis. The empirical evidence confirms the usefulness of the vulnerability indicators in warning of severe recessions and crises in OECD countries. But indicators are no silver bullet and should be complemented with other monitoring tools, including expert judgement. -- paper giving overview of OECD Program working on indicators of upcoming crises and macro policies that could be adopted to head off crises -- stress on linkages across 6 clusters of economic activity and potential vulnerabilities -- in tuning indicators, looking at trade off between false positives and insufficient strength of negative signals, and the costs of responding to false positives vs failing to respond to warning flags -- also trying to see how, via linkages, prudential measures in one area might reduce vulnerabilities in other areas, so not left with only the blunt instrument of monetary policy
paper  OECD  OECD_economies  BRICS  business_cycles  recessions  macroeconomic_policy  macroeconomics  macroprudential_policies  financial_system  financial_crisis  credit_booms  fiscal_policy  FX-misalignment  capital_flows  housing  FDI  forecasts 
september 2015 by dunnettreader
Emmanuel Mourlon-Druol - La zone euro est-elle viable? Une perspective historique - La Vie des idées - 20 mai 2014
La crise de la zone euro a révélé les faiblesses constitutives de la monnaie unique ; mais les débats portant sur sa viabilité se limitent trop souvent à une vision purement économique de la zone euro. L’histoire complexe de la création de l’euro éclaire les enjeux financiers et politiques internationaux de l’unification monétaire. -- in many ways it's the same-old, same-old -- a group of countries with intense economic interaction that gets whip-sawed by exchange rates in a constantly evolving world that's increasingly globalized, especially capital movements -- under a series of arrangements from Bretton Woods onwards, they've been trying to manage or mitigate the problem, but they never solve it -- he repeatedly notes that the entire EC budget isn't more than 1% of the aggregate GNP of the member states -- useful aide-mémoire for each step in the evolution of the EU and European money arrangements paralled with each modification of the international monetary system -- though he notes repeatedly that finance is extremely mobile, not only within the Eurozone or within the EU but globally, and that labor and fiscal adjustments are extremely immobile within the Eurozone by comparison, he doesn't draw the obvious link of these severe mismatches to the repeated problems the EU has faced re money -- downloaded pdf to Note
article  economic_history  political_history  European_integration  post-WWII  post-Cold_War  international_monetary_system  Bretton_Woods  EU_governance  FX  FX-rate_management  FX-misalignment  Eurozone  Eurocrsis  Great_Recession  financial_crisis  sovereign_debt  Europe-federalism  EU-regulation  cross-border  Labor_markets  banking  ECB  EU-elections  political_participation  EU-Parliament  EU-parties  monetary_union  monetary_theory  international_economics  capital_flows  capital_controls  EU-fiscal_policy  convergence-econimic  fiscal_policy  Maastricht  downloaded 
july 2015 by dunnettreader
Brad DeLomg - German Economic Thought and the European Crisis - Washington Center for Equitable Growth - July 2017
It is a commonplace among Anglo-Saxon economists that Saxon-Saxon “ordoliberalism” was a post-World War II success only because somebody else–the United… DeLong remarks on his link to the article on why the European Crisis was inevitable given German economic theory -- that the German economists have attributed the country's economic success to ordoliberalism and German virtue when it was based on an incredibly favorable environment and policy postures by the US as global hegemon. Instapaper
Instapaper  economic_history  Germany  international_monetary_system  global_economy  post-WWII  trade-policy  global_imbalance  hegemony  Marshall_Plan  sovereign_debt  export-led  Germany-Eurozone  ordoliberalism  Keynesianism  austerity  budget_deficit  FX  FX-misalignment  Greece-Troika  economic_theory  economic_culture  economic_policy  macroeconomics  from instapaper
july 2015 by dunnettreader
Karl Whelan - The Grexit Mechanism: What It Means For The Future Of the Euro | Medium - June 26 2015
Greek crisis exposes cracks in the euro’s design that won’t be fixed by Greece leaving. Despite the euro’s legal status as an irrevocable currency union, the… Nice review of the tangle of economic, political and legal issues -- Default isn't by itself enough to force Grexit, so it's really what political stance the ECB takes, and even with Grexit there are the other members of the Eurozone suffering from similar problems as Greece -- Whelan: In recent years, the single most important factor that has papered over the cracks in the euro has been Mario Draghi’s “whatever it takes” commitment to preserve the euro. But if whatever-it-takes doesn’t prevent a Greek exit, there would be serious questions about what kind of euro the ECB was actually willing to bother preserving. Worth remembering is that what Draghi actually said was: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." The “within our mandate” bit has provided Draghi with plenty of wiggle room to decide what kind of euro he wants to preserve. It clearly doesn’t have to be one that includes Greece. And there may be others that get jettisoned. Whether this kind of a la carte euro will survive the test of time is highly questionable.
Instapaper  Eurozone  EU  ECB  EU_governance  Europe-federalism  monetary_policy  FX  lender-of-last-resort  Greece  Greece-Troika  IMF  sovereign_debt  banking  bank_runs  austerity  FX-misalignment  Spain  Portugal  Italy  political_economy  international_finance  international_monetary_system  from instapaper
june 2015 by dunnettreader
Jonathan D. Ostry , Atish R. Ghosh , and Mahvash S. Qureshi - Managing Capital Flows in Frontier Economies | IMF Direct - April 2015
By Jonathan D. Ostry , Atish R. Ghosh , and Mahvash S. Qureshi  There has been a remarkable increase in financial flows to frontier economies from private… Enfin! Just 20+ years late. Nice roundup of various people (like Rodrik) thinking about all the variables, including what sorts of local institutional capacity (government and financial markets and institutions) are required for (1) absorbing different types of capital flows or (2) if a country wants to restrict flows in some fashion, to manage different types of restrictions. Additionally, there are challenges to the basic premise of encouraging capital flows to frontier markets -- these countries are more likely to be investment constrained than the unproven assumption that they're savings constrained. Macroeconomic impacts are also getting a closer look, not only the dilemmas of managing monetary policy and exchange rates -- e. g., FDI can be defeated if inflows raise the rate to reduce trade advantages. Since the biggest issuers from frontier markets tend to be the state, there's a big potential impact on sustainability of fiscal policy (to say nothing of corruption), and again the exchange rate impacts can be severe in both directions. The post is mainly an outline of an ambitious, multidimensional research program that's emerging among development economists, financial economists, macroeconomics in both the OECD countries and think tanks in emerging markets and the IFIs. -- finally the discussion has moved off the obsession with flight capital that took root in the 1980s and was the trump played anytime anyone questioned the happy-happy conventional wisdom of capital liberalization promoters.
economic_theory  macroeconomics  capital_flows  FDI  IFIs  IMF  capital_controls  fiscal_policy  monetary_policy  FX  FX-misalignment  neoliberalism  globalization  emerging_markets  frontier_markets  competitiveness  technology_transfer  infrastructure  development  financial_system  financial_regulation  financial_sector_development  financial_stability  banking  interest_rates  institutional_investors  institutional_capacity  institution-building  central_banks  governance  bibliography  Instapaper  from instapaper
may 2015 by dunnettreader
Bianca De Paoli and Anna Lipinska - Capital Controls: A Normative Analysis | FRBNY Staff Reports Number 600 - February 2013
Countries' concerns about the value of their currency have been studied and documented extensively in the literature. Capital controls can be--and often are--used as a tool to manage exchange rate fluctuations. This paper investigates whether countries can benefit from using such a tool. We develop a welfare-based analysis of whether (or, in fact, how) countries should tax international borrowing. Our results suggest that restricting international capital flows through the use of these taxes can be beneficial for individual countries, although it would limit cross-border pooling of risk. The reason is because, while consumption risk-pooling is important, individual countries also care about domestic output fluctuations. Moreover, the results show that countries decide to restrict the international flow of capital exactly when this flow is crucial to ensure cross-border risk sharing. Our findings point to the possibility of costly "capital control wars" and thus to significant gains from international policy coordination. -- enfin! We're making progress in clearing away the accumulated layers of free market ideology. Not sure about the likelihood of "capital control wars" so have to read the thing to see if their global cross-border risk-pooling ("consumption risk-pooling? ) is a significant "common good" for anybody other than financial institutions or the beneficiaries of windfall surpluses like Saudi petrodollars that need recycling. Downloaded pdf to Note
paper  Fed  international_political_economy  international_finance  global_economy  global_imbalance  global_governance  capital_flows  FX  FX-misalignment  emerging_markets  hot_money  contagion  capital_controls  FDI  debt  macroeconomics  central_banks  FX-rate_management  monetary_policy  downloaded  EF-add 
october 2014 by dunnettreader
Aluisio Gomien De Lima-Campos - Currency Misalignments and Trade: A Path to a Solution :: SSRN June 16, 2014
American University - Washington College of Law -- Fourth Biennial Global Conference of the Society of International Economic Law (SIEL) Working Paper No. 2014/11 **--** The debate about currency misalignments (CMs) and trade is not new. It was already being discussed in the 1940s. What is new is that the existing mechanisms to deal with CMs at the IMF, under its Article IV, and at the WTO, under its Article XV, have proven to be ineffective. This article seeks to show the problems with these mechanisms, understand the reasons of why so, explore available options to resolve them and suggest a path to a lasting sustainable solution. - downloaded pdf to Note
paper  SSRN  international_law  international_economics  law-and-economics  international_political_economy  global_governance  international_monetary_system  international_organizations  economic_history  diplomatic_history  IMF  entre_deux_guerres  post-WWII  FX  FX-misalignment  global_imbalance  trade-policy  trade-agreements  capital_markets  downloaded  EF-add 
september 2014 by dunnettreader
R. Michael Gadbaw - Existential Risks to the Global Trading System and the Problem of Currency Intervention as a Case Study :: SSRN June 16, 2014
Institute of International Economic Law, Georgetown University Law Center -- Fourth Biennial Global Conference of the Society of International Economic Law (SIEL) - Society of International Economic Law (SIEL) Working Paper No. 2014/10. *&--** As countries seek to promote growth in the aftermath of the financial crisis, currency intervention has become more prevalent and distortions in exchange rates with their resulting imbalances in trade flows have prompted call for new initiatives to address them, including in the negotiations of the Trans-Pacific Partnership (TPP) and of the Transatlantic Trade and Investment Partnership (TTIP). Both economic and legal experts have brought new insight into the impact of currency intervention on trade and a fresh legal perspective on the application of the rules in the WTO against measures that frustrate the intent of the GATT/WTO agreements. This paper reviews the underlying legal and policy issues and provides possible language for inclusion in the TPP or TTIP, and eventually in the WTO, that would build on the existing disciplines in the WTO and IMF agreements by authorizing remedial action in the form of safeguard and countervailing duties in response to a finding of actionable currency intervention. -- Number of Pages: 10 -- downloaded pdf to Note
paper  SSRN  international_law  international_economics  law-and-economics  international_political_economy  global_governance  international_monetary_system  international_organizations  IMF  FX  FX-misalignment  WTO  trade-agreements  global_imbalance  trade-policy  Trans-Pacific-Partnership  Transatlantic_Trade_and_InvestmentPartnership  competition  capital_flows  investment-bilateral_treaties  central_banks  downloaded  EF-add 
september 2014 by dunnettreader
Thorstensen, Fernandes Marçal, Ferraz - WTO x PTAs -- Where to Negotiate Trade and Currency :: SSRN June 16, 2014
Vera Thorstensen - São Paulo School of Economics (EESP) at Fundação Getulio Vargas (FGV) -- Emerson Fernandes Marçal - Sao Paulo School of Economics - FGV; Mackenzie Presbyterian University -- Lucas Ferraz - Sao Paulo School of Economics-FGV. -- Fourth Biennial Global Conference of the Society of International Economic Law (SIEL) Working Paper No. 2014/09. *--* The negotiations of mega agreements between the US and the Pacific countries (TPP) and between the US and the EU (TTIP) are raising the attention of experts on international trade law and economics. TPP and TTIP are proclaimed to be the designers of the rules for the XXI Century. Old trade instruments such as tariffs are said to be no more important for TTIP because tariffs are negligible among those partners but significant to for TPP. Another relevant agreement in negotiation is between the EU and Mercosul, where tariffs are the most important issue in discussion. The main purpose of this paper is to shows that tariff are important for all these agreements, not because of its nominal value, but because the impacts of exchange rate misalignments on tariffs are so significant that all concessions can be distorted by overvalued and by devaluated currencies. The article is divided into six sections: the first gives an introduction to the issue; the second explains the methodologies used to determine exchange rate misalignments and also presents some results for Brazil, US and China; the third summarizes the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of “misalignment tariffication” and examines the effects of exchange rate variations on tariffs and their consequences for the multilateral trading system; the fourth creates a methodology to estimate exchange rates against a basket of currencies (a virtual currency of the World) and a proposal to deal with persistent and significant misalignments related to trade rules. The fifth presents some estimates for the main PTAs. The conclusions are present in the last section. -- downloaded pdf to Note
paper  SSRN  international_law  international_economics  law-and-economics  trade-agreements  tariffs  FX  global_imbalance  US_foreign_policy  China  Brazil  EU  Latin_America  South-South_economics  emerging_markets  capital_flows  international_monetary_system  FX-misalignment  prices  costs  downloaded  EF-add 
september 2014 by dunnettreader

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