News

What next

What next

If the panic of the next week of October 2008 worsens, governments have to be ready to stop it using auditing, recapitalisation, and liquidation. A stopgap stabilisation plan is always to guarantee all banks’ short-term liabilities, audit their assets, and tidy up the mess.

We are in a midst of a banking panic due to concern over the grade of bank assets and the adequacy of bank capital. Interbank lending has stopped and lending to non-banks is grinding to a halt. We are in need of intermediaries to begin with functioning again in order to avoid a deep recession.

News

What next for the wto challenges for the wto s eighth ministerial conference vox, cepr policy porta

What next for the wto challenges for the wto s eighth ministerial conference vox, cepr policy porta

The WTO – The facts?

Many observers have a tendency to equate the existing round of trade negotiations, the Doha Development Agenda, with the WTO. Although this is simply not the case, there are risks in this widespread perception as the danger is that the WTO’s constituency may conflate the fate of the main one with the fate of the other. It really is, therefore, important to think about what the WTO is.

  • First, and foremost, the WTO may be the world’s basic trade agreement .
  • Second, the WTO administers the many WTO agreements.

This administration must be a policy-oriented one which ensures the correct implementation and monitoring of the sixteen separate multilateral agreements that constitute the WTO. This important activity has been neglected. For example, notifications to the Committee on Trade and Agriculture from various WTO members have fallen behind. Fortunately, steps have been recently taken up to begin to rectify this issue.

News

The innovation network

The innovation network

Innovation is normally regarded as a cumulative process, with new technologies building on existing knowledge – but our understanding of how progress in a particular area is influenced by knowledge in other, ‘upstream’ areas is bound. Using US patent data, this column identifies a well balanced ‘innovation network’ that serves as a conduit for cumulative knowledge development. Technological advances in a single field can advance progress in multiple neighbouring fields, but could have a stronger influence on more closely related areas.

News

The information channel of monetary policy has disappeared in the us

The info channel of monetary policy has disappeared in america

The info channel of monetary policy theory – whereby economic agents revise their beliefs after an urgent monetary policy announcement not merely because they find out about the existing and future path of monetary policy, but also because they learn new information regarding the economic outlook – could explain the puzzle of output increasing after a contractionary monetary policy shock. This column argues, however, that the info channel has disappeared in america, perhaps because of the improved communication strategies implemented by the Federal Reserve.

News

The inner workings of the board

The inner workings of the board: Evidence from emerging markets

How boards perform their dual role of supervisor and advisor of corporate management is difficult to see from outside of the business. This column presents a survey of non-executive directors in a variety of emerging markets which reveals substantial variation in the structure and conduct of boards aswell as in directors’ perceptions about the neighborhood legal environment. Directors who feel adequately empowered by local legislation appear less inclined to vote against board proposals, and in addition form boards that play a stronger role in the company’s strategic decision making.

News

The influence of the taylor rule on us monetary policy

The influence of the taylor rule on us monetary policy

Taylor rule’s influence on policy

However, the actual fact that the Taylor rule has been described in the policy meetings will not necessarily imply it has had a substantial influence on the decisions. One method to analyse the need for the Taylor rule is merely to consider the correlation between your original Taylor rule and the actual Federal Fund’s Rate. Predicated on this process, Taylor (2012) argues that the Fed followed the Taylor rule quite closely until around 2003. From then on, he argues that the Fed abandoned the Taylor rule around 2003 and moved to a far more discretionary monetary policy. Some observers start to see the large deviation from the Taylor rule between 2003 and 2006 as an insurance plan mistake that contributed to the build-up of financial imbalances and the next crisis.

News

The inflation puzzle in the euro area

The inflation puzzle in the euro area – it’s the trend not the cycle!

What’s happening to inflation and output in the euro area? The ECB has apparently lost the opportunity to raise inflation and price expectations have already been sliding because the last recession. A lot of the policy debate has centered on the flattening of the Phillips curve. Yet, as this column shows, estimations of the joint output-inflation process indicate a decline of both output potential and trend inflation as the utmost relevant components of the puzzle.

Covid-19

The influence of the covid-19 pandemic on safe haven assets

The influence of the COVID-19 pandemic on safe haven assets

The COVID-19 pandemic has severely impacted the financial markets, which includes triggered a flight from risky assets to safe haven assets. This column compares the performance of the safe havens over the world’s ten largest economies during COVID-19 and the 2008 Global FINANCIAL MELTDOWN. The findings claim that the type of safe haven assets has changed because the 2008 crisis. Gold, the original safe haven asset, has lost its glitter. However, the Swiss franc, the united states dollar and US Treasuries retained their safe haven status, and Tether, a cryptocurrency, shows some promise.

News

The influence of leaders on criminal decisions

We look at a two-stage model where, in the first stage, every individual decides whether to become criminal and, if she or he chooses to take action, they decides just how much crime to exert in the next stage. We show the way the distance to the criminal leader affects both decision to become criminal (extensive margin) and the amount of crimes thereafter committed (intensive margin).

Data and empirical framework

We test our theoretical predictions using data from the National Longitudinal Study of Adolescent to Adult Health (Add Health) in america, which contains information on all students attending a random sample folks high schools in 1995. This dataset provides unique information on friendship networks by asking students to nominate up to ten friends from a school roster. In addition, it contains detailed information on juvenile delinquency, including 12 types of crime. To recognize criminal leaders in a manner that is exogenous to the network formation process, we define a criminal leader as an adolescent who has a degree of crime a lot more than three standard deviations above the median in the institution. The distance to the first choice is then calculated utilizing the (shortest) distance between any delinquent and the first choice in the social networking to which they belongs. Our identification strategy is founded on the actual fact that students choose their friends, and perhaps the friends of their friends, however, not beyond. The question we study in the empirical analysis is how being (randomly) located at a particular distance to the first choice affects a person’s criminal activities.