Volatility in the Emerging Markets

Volatility has returned to the financial markets. Stock prices in the U.S. have fallen from their September highs, and the return on 10-year Treasury bonds briefly fell below 2%.  Financial markets in emerging markets have been particularly hard hit,. The Institute for International Finance estimates that $9 billion was withdrawn from equity markets in those countries in October, […]

Five Reasons Not to Fear Deflation: Which Ones Make Sense?

In a post earlier this week, I explained why a majority of economists fear deflation. They argue that deflation disrupts the operation of financial markets and labor markets in a way that risks touching off a downward spiral. At the same time, they say, deflation weakens the power of monetary policy to reverse the downward […]

Time for an Asian Infrastructure Investment Bank

The proposed Asian infrastructure bank could galvanize growth in emerging Asia and boost lingering global recovery. According to Western media, the Asian Infrastructure Investment Bank (AIIB) is to rival the World Bank and the Asian Development Bank (ADB). In reality, the idea of the AIIB was put forward more than a year ago; not to […]

Does The Secular Stagnation Theory Have Any Sort of Validity?

In a number of blog-posts (Paul Krugman’s Bicycling Problem, On Bubble Business Bound, The Expectations Fairy) I have examined some of the implications of the theory of secular stagnation. But I haven’t up to now argued why I think the hypothesis that Japan and some parts of Europe are suffering from some kind of secular […]

Ukraine, Russia and the West

Ukraine faces interdependent military, political, and economic problems of enormous magnitude. Its territory has been invaded and occupied by a powerful neighbor, and armed separatists and Russian forces control territory in eastern and southern Ukraine. Since April of this year, more than 3500 people have died from the violence according to UN human rights observers. […]

Martin Wolf’s Warning

It is time for the 2014 Globie—a (somewhat fictitious) prize I award once a year to a book that deserves recognition for its treatment of the consequences of globalization. (Previous winners can be found here.) The financial turmoil of the last week makes this year’s award-winner particularly appropriate: Martin Wolf for The Shifts and the Shocks: What […]

Mr Schaeuble and G-20 Leaders: Consider the Following

It has been reported on the BBC news that Mr Schaeuble has said: a)   Criticism that the (German) government was not spending enough was justified, and that; b)  Any improvement in spending would not be made at the expense of a balanced budget. According to the BBC report the German economy has contracted and exports […]

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