Economic Policy

The price is wrong

Focus on quantities

By Daniel H. Neilson

Debate continues over what is the right level for the dollar–renminbi exchange rate. I find it hard to see how focusing on this one price will lead to a productive outcome, politically or economically. Debating the exchange rate focuses the attention on the metric that guides policy. A better approach is to focus on the other side of the coin, namely reserve accumulation.

China's accumulation of US dollar reserves, mainly Treasury debt these days, is not a by-product of its exchange-rate policy. It is the exchange-rate policy. Read more

William Lazonick - How Government Helps, and Wall Street Hurts, the Innovative Enterprise

About the Interview

Innovation drives economic growth and welfare, and the industrial corporation drives innovation, says William Lazonick. But just how do corporations innovate? The key idea is commitment. People with knowledge of and experience in particular industries commit to a business model that ventures into unknown territory. The main problem is that modern financiers are not prepared to support commitment, and the modern executive pushes for stock buy-backs -- that is how Wall Street undermines innovation. Understanding how organization drives innovation -- this is new economic thinking. Read more

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China Ministry of Railways Debt

On September 21, almost two months after the July 23 Wenzhou high-speed train crash, the announcement of an investigation progress was eventually placed on Xinhua.net. However, neither the cause of the accident nor a timetable to make that public was revealed. Aside from the crash details, there’s one more thing that Chinese government anxiously wants to hide from the public eye: the debt issue of Ministry of Railways (MoR).

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Progress in Economics: A Comment

I thought I could use some of my illegitimate blog administrator's privileges to participate in the discussion on the "progress in economics" post by Floris without being lost in the midst of other users' comments. What strikes me both in the video interviews and in the related comments is how it lacks historical and sociological understanding. Of course, it strikes me because we are first and mostly a history of economics blog with a strong interest in the methodology of science studies but I do not think that this lack is solely annoying from an historian's or a sociologist's perspective. Rather, I think it is problematic on a much larger level.  Read more

@Academia and Public, Berlin: Students as model publics

The transatlantic conference has been moving targets: sociology went first, then economics, then history, today it was political science and international relations. While sociologists and economists had a muscular dialogue on the first day, quickly resolved over lunch with familiar scholarly ethic. The historians closed the day, soft spoken and monorcordic reading their speeches but dropping a bomb: the global public sphere is gone, and there is no longer a past, just an extended present with everyone obsessed with personal, ethnic, identitary history but no real curiosity beyond. So it was appropriate that political scientists try something else, and abandoning the public sphere altogether the discussion today has been about the crises of the University. Read more

@Academia and Public, Berlin: And then it was all about the history...

It's not everyday that one finds economists using history as not just the right way but the only way to answer a question. History is informative, at times entertaining, but not a device for knowledge. And then it all depends on the question. In Berlin, the conversation is how to make social sciences more relevant and active in the public sphere?

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Mario Seccareccia - Why Governments Should Run Deficits Now

What do nearly all governments have in common these days? They all are struggling to reduce fiscal deficits. Clearly, they are not listening to the advice from Mario Seccareccia, who says: Fiscal deficits? That's what we should be aiming for. Read more

When the US last defaulted...

Two things seem to be taken for granted in the current debt-ceiling debate: 1. The parties will come to an agreement on the debt ceiling because 2. These United States have never defaulted and will not start now. Well, Lexington has eight pretty good reasons why an agreement is not inevitable and as far as I can tell, the United States has defaulted in the past, and we need to recognize that fact... The historical trick revolves around 'these united states' because these 50 States are somewhat recent. Hawaii and Alaska would finalize statehood in '59. but various make-ups of the USA have indeed defaulted or re-structured its debt. Read more

Andrew Sheng - Sustainability Requires Caging Godzillas

Financial business is creating credit without limit until a crisis occurs. That’s the fundamental flaw which caused the current crisis, says Andrew Sheng in this INET interview. He also worries that the destruction of the tropical forest and other threats to the biosphere have the same character of ungovernable excesses until a crisis occurs. Read more

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