At the end of July Alan Greenspan published an Op Ed arguing that tighter financial regulation and capital standards will lead to the accumulation of “idle resources that are not otherwise engaged in the production of goods and services” and are instead devoted “to fending off once-in-50 or 100-year crises” resulting in an “excess of […]
Redemption or Abstinence? Original Sin, Currency Mismatches and Counter-Cyclical Policies in the New Millennium
The emerging market crises of the 1990s focused the attention of economists on issues of debt composition and particularly currency denomination. Since in bad times the real value of the domestic currency tends to weaken, servicing foreign currency debt becomes more difficult exactly when the capacity to pay is diminished. This makes for riskier debt, less room for counter-cyclical fiscal policies and a monetary policy geared towards currency not output stability.
The Fund used to throw one of the best Christmas Holiday parties in town. The oysters were good and it was fun to swing with the rhythms of the Fundamentals. But last year the party was not so good (oysters were the first victims of budget cuts). This year, with looming cuts in personnel and […]
A few days ago, Eduardo blogged about the LAC version of the Copenhagen Consensus. I was there discussing the institutional reforms paper by Susan Rose-Ackerman. In my discussion (available here), I made the point that evaluating institutional quality was incredibly difficult and that coming up with a cost and benefit analysis of possible reforms was […]