The Morning After

This isn’t the first investment boom to go bust. Lessons have been learned from OPEC, Michael Milken and Japan.

The Practice of Central Bank Intervention: Looking Under the Hood

This article first reviews methods of foreign exchange intervention and then presents evidence—focusing on survey results—on the mechanics of such intervention. Types of intervention, instruments, timing, amounts, motivation, secrecy and perceptions of efficacy are discussed.

Rational Expectations

Rational Expectations was set up by Ralph Lazar, former strategist and economist for Goldman Sachs, Barings & Credit Suisse First Boston, as a “resource for anyone interested in [emerging markets] economics — students, teachers, lecturers, journalists, professionals, or just the curious.” A fully comprehensive guide to the people, places, and events of the economics world, Rational Expectations includes an searchable database of over 1,000 organizations … [ Read more ]

The impact of corporate risk management on monetary policy transmission: some empirical evidence

Quite an impressive amount of recent academic research focuses on the idea that financial factors may cause or reinforce real fluctuations. In these models, it is typically a monetary policy shock that serves to lower the value of an asset which is used to secure a firm’s borrowing, thereby generating broad credit channel effects of monetary transmission. We empirically investigate the impact of corporate risk … [ Read more ]

Corporate Hedging: The Impact of Financial Derivatives on the Broad Credit Channel of Monetary Policy

This complementary paper to Froot, Scharfstein, and Stein (1993) seeks to explore some of the corporate finance foundations of monetary economics. In particular, it investigates the impact of corporate risk management strategies on the monetary transmission mechanism. It employs a simple model of a financial accelerator (synonymously: a broad credit channel of monetary policy transmission) to argue that information asymmetries – which are at the … [ Read more ]

Biz/ed Question Bank – Economics

The Biz/ed Question Bank – Economics is an interactive collection of multiple choice questions on a series of 39 topics. Subjects include Markets, Firms, Wages, National Income, Labour Supply, Money, Unemployment & Inflation, Government and International (with sub-topics). Each topic offers ten to twenty-five questions, complete with hints, explanatory answers, and information sources. Because Biz/ed is a British Website, all monetary amounts will be in … [ Read more ]

George Bernard Shaw

If all the economists were laid end to end, they would not reach a conclusion.

How Stable Is the Predictive Power of the Yield Curve?

Empirical research over the last decade has uncovered predictive relationships between the slope of the yield curve and subsequent real activity and inflation. Some of these relationships are highly significant, but their theoretical motivations suggest that they may not be stable over time. We use recent econometric techniques for break testing to examine whether the empirical relationships are in fact stable. We consider continuous models, … [ Read more ]

National Economic Trends

A Federal Reserve Bank of St. Louis monthly publication, _National Economic Trends_ contains an impressive collection of graphs covering economic trends including sections on Output and Growth; Interest Rates; Inflation and Prices; Consumer Spending; Investment Spending; Government Revenues, Spending and Debt; International Trade; Productivity and Profits; and Labor Markets.

Development Report Card for the States (DRC)

The goal of the DRC is to ask the right questions about state economies. How well is the state’s economy performing in generating a more widely shared and sustainable standard of living? How vital are its large and small businesses? What is the state’s capacity for future development? Each major index tries to answer one of these questions. The DRC provides policymakers, development professionals, … [ Read more ]

Jean-Baptiste Say

The encouragement of mere consumption is no benefit to commerce; for the difficulty lies in supplying the means, not in stimulating the desire of consumption; and we have seen that production alone furnishes those means. Thus, it is the aim of good government to stimulate production, of bad government to encourage consumption.

Defining the New Economy – And determining its relevance to policymaking

So what do the words “new economy” mean? Three articles in this issue of _The Region_ from the Federal Reserve Board of Minneapolis investigate that question, but with an emphasis on economic fundamentals and, ultimately, on the implications for policymaking. The articles are: “Improving our Understanding of Productivity,” “The New
(and Improved) Economy,” and “Old Ideas at Work in the New Economy.”

A Nation of Spendthrifts? An Analysis of Trends in Personal and Gross Saving

The steep drop in the U.S. personal saving rate over the last decade has fueled speculation that Americans are spending recklessly. But alternative measures of personal saving show that households are actually setting aside a larger share of their resources than the official figures suggest. In addition, government saving has risen markedly, leading to an increase in overall domestic saving that has helped finance a … [ Read more ]

The Mythical Benefits of Debt Reduction

Interesting (and no doubt controversial depending on your political persuasion) analysis of effects on economy of government’s treatment of taxation and national debt. Essentially, article argues that government should spend any surpluses on tax reduction to stimulate growth (reduced revenues partially being offset by taxes from the higher base).

Fifty Years of Development (.pdf)

This 39-page report was written by Paul Collier, David Dollar, and Nicholas Stern, all of the World Bank. It provides “an interpretative view of the development experiences of the past 50 years,” with a special emphasis on the past ten years. The authors’s analysis of development in the 1990s found, overall, that market-oriented reform worked unreliably and often neglected “the institutional foundations necessary for markets … [ Read more ]

RGE Monitor

RGE Monitor delivers ahead-of-the-curve global economic insights that financial professionals need to know. Our analysts define the key economic and geostrategic debates and continuously distill the best thinking on all sides. This intelligence, along with exclusive analysis from internationally-known experts, is accessed through a powerful Web interface that provides both focused snapshots and deeper perspectives. Whether you are establishing direction, executing transactions, influencing decisions or … [ Read more ]

A Journalist’s Guide to Economic Terms

A four-year old project of FACSNET reporting tools, this site was created to give reporters and journalists a headstart in understanding economic terms. All 213 current terms are concisely, but clearly, defined and are organized in alphabetical order. This glossary will give any economics novice the basic terms needed to begin to comprehend news briefs and articles about economics.

Free Trade Isn’t Fair

Mike Dolan is leading a long-shot crusade against the new economy’s most widely shared belief: that global economic integration — of countries, companies, currencies, and markets — is both virtuous and inevitable.