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Currencies or Commodities?

Breaking the Silence

Last week, I spent a few days in the Dalton-Brand Research Room, at Duke University, skimming through the Samuelson papers.

Learning How to Swap

The Term Securities Lending Facility (TSLF) was one of the bigger (in dollar terms) emergency programs implemented by the Fed during the crisis of 2008.

An Interview with the Author of “The New Lombard Street: How the Fed Became the Dealer of Last Resort”

Taking a quick break from my work in the Samuelson archives – so fascinating, believe me! – I can’t resist sharing the following, which I found in his correspondence files.

War Reparations, or Prosperity

I was just amused with two projects by Shaun Usher: to “gather and sort fascinating letters, postcards, telegrams, faxes, and memos” in his blog Letters of Note, and to present interesting letterheads in his Letterheadyblog.

Charles Ferguson’s Inside Job forces us to fundamentally rethink the connections between economics and policy making.

And what was QE about anyway?

Deficit Fantasies in the Great Recession

One INET project is to “reconnect the teaching of economics with the working of the actual economy,” which is to begin with a reform of the undergraduate curriculum.

In my last post I argued that if we want a Fed that is ready for the next crisis, we had better understand what happened to it during the last one.

The place invites poetry. By the way, all sessions can be viewed from the website – check out in particular the last session featuring Gillian Tett of the Financial Times moderating a discussion between Paul Volcker and George Soros

I was not in Bretton Woods this week. I followed the event through the videos posted on the INET website and the exhilarating and exhausting experience of Benjamin, Floris and Tiago.

I am writing a paper about an economist that was at the Treasury in the second half of the 1950s and 1960s.

There are a lot of universities represented here, but who are the most likely candidates for participation and who might one expect INET to be interested in?

In a classic book and subsequent articles, Obstfeld and Taylor (2004) have shown how the broad contours of international financial history over the past century and a half can be well understood by appealing to the famous economictrilemma which emerges from the standard Mundell-Fleming model many of us still teach our undergraduates.

The euro area’s sovereign debt crisis continues though significant steps have been taken to resolve it.

In preparing this paper I have decided not to embark upon the decades-old issue of optimal-currency areas and governance as such. I assume that one of my colleagues on the panel will do that. Instead I will present an historical case of over-indebtedness of parts of a common-currency area somewhat similar to the present challenge of Europe, or rather of the Euro area with its common currency.

Investment in productive capabilities provides the foundation for economic growth.

Our shared concern – 20 years after Rio, yet poor progress towards wellbeing

Globalization has improved the living standards of hundreds of millions of people – but growing resource scarcity means it risks becoming a victim of its own success.

Government intervention is often perceived as a constraint on market forces and thereby on economic growth.

All cultural narratives, worldviews, religious doctrines, political ideologies, and academic paradigms are ‘social constructs.’

At a time when China is the favored investment destination in the global market, it seems unlikely that it would ever face capital flight.

This is a small paper on a big subject: the polarization of American politics since the mid-1970s. In its early stages this process bore more than a passing resemblance to the opening scenes of a Grade B disaster movie: With almost everyone’s attention focused elsewhere, a series of tiny, seemingly insignificant departures from long standing routines took place.

The theme of this session is very timely and controversial, on the ability of sovereign governments to supervise Large Complex Financial Institutions (LCFIs), now officially described as G-SIFIs, global systemically important financial institutions.

After the inception and, hopefully, the passing of the most dangerous phase of the international financial crisis, economists have returned to the long favoured subject of global imbalances.

The Bretton Woods conference has a protean character.Talk in the corridors asks “what is it?” Some in the press (lots of press here) believe that deals are being made, the attendance of heavy hitters leads some to believe that consultations and strategies are being outlined for world government (Summers, Stiglitz, Brown, and yesterday Volcker arrived to close the event).

We have been talking and video interviewing people at the conference, and we’ve narrowed down a small list of questions which we try to build on and have so far talked to Kenneth Rogoff, Brad DeLong, Ha-Joon Chang, Stephen Ziliak, Philippe Aghion, Jean-Paul Fitoussi, Barry Eichengreen and tomorrow we start with James Galbraith.

What is the right way to achieve change?

For one and a half days we had Anglo-Saxons talking finance and financial crisis: Keynesian stimuli, surplus countries bashing, drawing China in, and bullying of the Euro area and in particular Germany’s role in it.

The presentation explains that Indian Economy is basically a market-oriented economy with constant rebalancing between state andmarket.

Many companies around the world have discovered they can benefit financially from integrating environmental, social and governance (ESG) targets in their daily operations and strategy.

Simon Johnson at the Institute’s 2011 Annual Conference.

It’s day two of INET’s Conference in Bretton Woods and a new energy has filled the halls and sessions with the arrival of nearly thirty student attendees.

The Institute for New Economic Thinking held its second annual plenary conference in Bretton Woods, New Hampshire.

Tonight I will talk briefly about the Keynes-Hayek relationship, then will focus on some of Hayek’s insights that may be of relevance today.

Central to John Maynard Keynes (1941) original Bretton Woods proposal was an international clearing union that would issue a new international currency by fiat called bancor. Among other functions, this international central bank would finance the stabilization of individual commodity prices through commodity buffer stocks.

For more than three decades, orthodox economists, policy makers in government and central bankers and their economic advisors, using some variant of old classical economic theory [OCET], have insisted that (1) government regulations of markets and large government spending policies are the cause of all our economic problems and (2) ending big government and freeing markets, especially financial markets, from government regulatory controls is the solutionto our economic problems, domestically and internationally.

It’s a singular honor to have been asked to deliver the Butlin Lecture. I first met Noel Butlin when I had the pleasure of visiting Australian National University for two months in what was, from my perspective, the summer of 1985.

Some questions can only be answered by educated guess. The question at the centre of this round table pertains to this category. We should not be ashamed of this kind of limitation of our capacity to predict the future.

The Fed changed over the course of the global financial crisis.

Robert Skidelsky and Perry Mehrling report on the project at the Institute’s 2011 Bretton Woods conference.

(Way) Beyond Diamond-Dybvig

But not by him

The illusion of black swan-proofing

Capital Flows, Cross-border Banking, Shadow Banking, and the Dollar

From MIT to IMF

Or Does It?

A Money View

Exit Strategies and the New Normal

What kind of “Minsky Moment”?

Financial Globalization and the Nation State

The concept of bank capital

Who’s afraid of finance?

The future of government mortgage support

A money view of the commodity bubble

Speculation, stabilizing or destabilizing?

Saving the (International) Dollar

When the survival constraint bites

And the nomination for best Perp Walk goes to…

And the nominees for Best Documentary are…

It is all about promises to pay in the future.

Before the dollar there was the pound, and after the dollar there will be something else.

Today’s Financial Times article: Report to highlight alleged conflicts of interest in Goldman’s dealings (Jan 12, 2011), Goldman’s pieties insult our intelligence (Jan 13, 2011)

Paper presented at Bretton Woods Conference

There’s a good column at voxeu.org by INET Advisory Board Member Barry Eichengreen, where he introduces his new book, titled Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.

GFC finance as war finance

This research project elaborates an original model of Keynesian demand-led growth and communicates Keynesian macroeconomic insights to a broad and diverse audience.

The project provides new ideas and policy proposals to contain the spread of systemic risk in the financial system through appropriate regulation of financial markets and intermediaries, as well as the design of monetary policy.

This research project enhances our understanding of how endowments and subsequent opportunities and shocks explain the evolution of individual and family well-being across generations.

This research project develops a monograph on divergent stochastic time series that permits the modeling of capital, inventory, and financial capital in economies.

This research project develops an operational measure of systemic risk, as an input into the policy process by capturing the interaction of private and governmental sources of systemic risk during and in advance of the crisis.

This research project develops a much better understanding of Paul Samuelson’s life, work, and broader political-economic vision through archival research at Duke University’s Paul Samuelson archives.

Why is this a surprise?

Today’s Financial Times article: ECB: trick or Trichet (Dec 2)

In a recent piece in the Financial Times, George Soros makes the case that, to avoid a bleak future for the euro and the European Union in general, Europe should take steps to recapitalize banks before bailing out member states. In the piece, Soros discusses issues that INET is very interested in exploring further, such as the idea that flaws in macroeconomic theory helped lead to the financial crisis of 2008.

Is raising required bank capital the answer?