www.tipnews.info
October 24, 2014
Dirk Schoenmaker
Dean of the Duisenberg School of Finance and Professor of Finance, Banking and Insurance at the VU University Amsterdam
Charles A.E. Goodhart
Emeritus Professor in the Financial Markets Group, London School of Economics
Introduction A guiding principle for decision-making in crisis management is “he who pays the piper calls the tune” (Goodhart and Schoenmaker 2009). So long as resolution is organised on a national basis, the national governments will normally want to oversee and undertake the function of supervision. That has been the current setup for financial supervision and crisi...
David Miles
Monetary Policy Committee Member, Bank of England
“Mensch tracht, und Gott lacht” is a Yiddish proverb – men plan and God laughs. Woody Allen puts the same thought this way: “If you want to make God laugh tell him about your plans”. Some people might see these words as a fitting epitaph for forward guidance on monetary policy. The Bank of England has certainly faced a good deal of criticism for the guidance that it has recentl...
Carmen M Reinhart
Dennis Weatherstone Senior Fellow, Peterson Institute for International Economics
Since 2008 Europe has been mired in a combination of economic depression, financial crisis, and public and private debt overhangs. Greece was the first advanced economy to restructure its debt in more than a generation, and the ongoing depression in Europe’s periphery has already surpassed the economic collapse of the 1930s by some markers. In most advanced economies record pri...
David Chambers
University Lecturer in Finance at Judge Business School, Cambridge University
Elroy Dimson
Emeritus Professor of Finance, London Business School
In recent years much attention has been given to the so-called ‘Yale model’, an approach to investing practised by the Yale University Investments Office in managing its $24 billion endowment. The core of this model is an emphasis on diversification and on active management of equity-orientated, illiquid assets (Yale 2014). Yale has generated returns of 13.9% per annum over the...
FactCheck.org
A Project of the Annenberg Public Policy Center of the University of Pennsylvania.
Two highly misleading ads from Republican Evan Jenkins leave the false impression that Rep. Nick Rahall is responsible for higher electric rates and personally profited from his votes in Congress: Both ads imply that West Virginia’s electricity rates skyrocketed after Rahall voted for a budget resolution that called for a carbon tax. But the budget plan failed; no t...
Lucian Cernat
Chief Trade Economist of the European Commission
In 2010, the European Commission launched its Trade, Growth and World Affairs strategy, the political manifesto for the incoming Trade Commissioner at the time. That strategy also benefited from useful ideas generated by a voxEU debate (“The future of EU trade policy”). Four years later, some of the bold objectives set out have already been achieved. One overall objective on wh...
Christian Thimann
AXA Group, Paris, and Paris School of Economics
Regulation of the insurance industry is entering a new era. The global regulatory community under the auspices of the Financial Stability Board (FSB) is contemplating regulatory standards for insurance groups that it deems to be of systemic importance. Nine insurance groups received this FSB classification in 2013, and the design of systemic regulation for these groups is now i...
Philipp Strack
Assistant Professor at the Department of Economics, University of California at Berkeley
Paul Viefers
PhD student, Humboldt-University Berlin
The leading normative theory in economics – expected utility theory – postulates that individuals should evaluate the options they face based only on these choices’ qualities. The decision to sell a stock, for example, should be based only on the stock’s current price and expectations about the future – not on its historical prices. For many, however, selling a stock for €1,800...
Edward Glaeser
Professor of Economics, Harvard University
Joshua Gottlieb
Assistant Professor in the Vancouver School of Economics, University of British Columbia
Recent interest in the psychology and economics of happiness has had pronounced influence on public policy. The high-profile report by Stiglitz et al. (2009) epitomises a push for policies to explicitly promote increases in survey measures of wellbeing as a major social objective. Places ranging from the country of Bhutan to the city of Somerville, Massachusetts explicitly meas...
Jean Tirole
Director of the Toulouse School of Economics and of the Jean-Jacques Laffont Foundation. CEPR Research Fellow
High quality public services, infrastructure that facilitates “economic dynamism”, a reduction in the debt left to our children. These expectations of the French people cannot be met unless the state becomes effective. Reforms are urgent, but difficult. To achieve them, a four-pronged approach is required: restructuring, competition, evaluation and accountability. Restruct...
Sandra Poncet
Professor at the University of Paris I and scientific advisor at CEPII.
Florian Mayneris
Assistant Professor, Université catholique de Louvain
Can higher minimum wages ensure that economic development benefits the poorest without hindering growth? The question is controversial in both academic and policy circles. The recent riots in Bangladesh and Cambodia show that the social demand for a more equal distribution of the benefits of growth is high in developing countries. In China, polls reveal that concerns about ineq...
FactCheck.org
A Project of the Annenberg Public Policy Center of the University of Pennsylvania.
A TV ad from Democrat Jim Mowrer claims Iowa Rep. Steve King “did vote to raise his own pay by $20,000 a year and take perks like free health care for life.” That’s a double whopper. There was no vote to raise congressional pay by “$20,000 a year,” as the ad’s narrator says. That’s about how much salaries for members of Congress have automatically increased since Ki...
Matthias Doepke
Professor of Economics, Northwestern University; Research Affiliate, CEPR
Fabrizio Zilibotti
Professor and Chair for Macroeconomics and Political Economics, University of Zurich; Scientific Director of the Center of Economics in Society, UBS; and CEPR Research Fellow
Since time immemorial, parents have struggled with the question of how best to raise their children. For most of history, the experts of the day strongly advised a firm hand. The Bible states that “he who spares the rod hates his son, but he who loves him is careful to discipline him”, Proverbs 13:24), and Plumb (1975) notes that of “two hundred counsels of advice on child-rear...
Christian Thimann
AXA Group, Paris, and Paris School of Economics
The Financial Stability Board (FSB) has completed its framework for the regulation of systemically important banks (FSB 2013a), and is now turning to the insurance industry. Its approach is inspired by the banking framework, under which 29 banking groups have been classified as systemically important. These banks are subject to a three-pronged framework consisting of enhanced s...
Susan Schadler
Senior Fellow, CIGI
The IMF will shortly go back to the drawing board with Ukraine. As it prepares to revise the economic programme on which the third tranche of its funding will be based, the IMF faces three interconnected problems: How to salvage the credibility of the programme; How to maximise pressure on the government and vested interests to deliver long-elusive struct...
Andrew L. Stoler
Independent Consultant on International Trade and Investment Policy
For many countries, agricultural-trade reform is politically sensitive. But that sensitivity did not prevent a groundbreaking multilateral trade agreement in the Uruguay Round of multilateral trade negotiations. Why is it that in the current Doha Round of talks no progress has been made since 2008? The structure of the Doha Round The origins of the current impasse ca...
Paolo Mauro
Division Chief, Fiscal Affairs Department, IMF
Nikoloz Gigineishvili
Senior Economist, IMF
Ke Wang
Economist in the Caribbean I Division of the Western Hemisphere Department, IMF
Sustained rapid growth in many African economies has generated a debate on the sources and likely persistence of a so-called “African growth miracle” (see McMillan, 2014). The East African Community (EAC) countries’ have been an especially vibrant part of the continent. Its economic growth performance during the past decade has been impressive. At 6.2%, the EAC’s average growth...
Andrew K Rose
Professor of International Business, in the Economic Analysis and Policy Group, Haas School of Business, University of California, Berkeley; and Research Fellow, CEPR
“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.” James Carville, Wall Street Journal (25 February, 1993, p. A1) Introduction The government benefits when inflation is high; inflation is a tax on money-hol...
FactCheck.org
A Project of the Annenberg Public Policy Center of the University of Pennsylvania.
Scaring seniors to garner votes is a favorite political pastime, and this midterm election is no different. Democratic ads in particular are pushing old, false claims about a Republican Medicare plan, while some Republican ads are repeating a stale, misleading statistic about the Affordable Care Act. Nearly $50 million has been spent on television advertising in the first ni...
Helmut Siekmann
Holder of the Endowed Chair of Money, Currency and Central Bank Law, Goethe University Frankfurt
Volker Wieland
Managing Director of the Institute for Monetary and Financial Stability (IMFS) and holder of the Endowed Chair of Monetary Economics, Goethe University Frankfurt
Not least the ECB itself has declared that the Outright Monetary Transactions (OMT) announcement played a major role in reducing the sovereign’s financing costs. By 2013, when questioned about the upcoming hearings of the German Federal Constitutional Court, ECB President Draghi noted, “When we all look back at what OMT has produced, frankly when you look at the data, it’s ...
Olivier Blanchard
Chief economist, IMF, on leave from MIT
Until the 2008 global financial crisis, mainstream US macroeconomics had taken an increasingly benign view of economic fluctuations in output and employment. The crisis has made it clear that this view was wrong and that there is a need for a deep reassessment. The benign view reflected both factors internal to economics and an external economic environment that for years se...
Charles F Manski
Professor in Economics, Northwestern University
Commentators on delivery of healthcare regularly decry ‘unwarranted’ or ‘inappropriate’ variation in clinical practice and recommend uniform treatment of observationally similar patients. This recommendation, often expressed in clinical practice guidelines, is well-motivated if knowledge of treatment response is strong enough to determine optimal treatments. However, much patie...
László Andor
EU Commissioner for Employment, Social Affairs and Inclusion
As a contribution to the EU’s institutional transition, a conference entitled “Labour Economics after the Crisis” took place in Brussels on 18-19 September 2014. The aim was to draw lessons from Europe’s protracted jobs crisis and from the experience of the Barroso II Commission as regards macroeconomic and employment policies.1 My key ‘handover’ message was that ...
Fernando Alvarez
Professor of Economics, University of Chicago
Hervé Le Bihan
Head of Macro-Analysis and Forecasting Division, Banque de France
Francesco Lippi
Professor of Economics, University of Sassari and CEPR Research Fellow.
Most macroeconomic models embed some form of sticky prices, i.e. inertia in price-setting decisions. The main motivation for sticky prices is the empirical observation that individual good prices tend to remain fixed for long periods of time, typically a few months for CPI items. The sticky prices assumption is central in understanding how monetary policy actions propagate the ...
Judith Niehues
Senior Economist, Cologne Institute for Economic Research; Research Affiliate, IZA
The well-known and frequently tested median voter theorem predicts a positive relationship between income inequality and state redistribution; if the decisive median voter’s income is below the social average, he votes for more welfare redistribution because he expects to benefit from progressively financed welfare programmes. However, this theory does not perform very well whe...
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