Seperating shocks on financial intermediation
Goldman Sachs has raised an interesting issue regarding the future of financial intermediation following the crisis: New bank regulations and capital requirements are “structural” changes to the...
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Dealing with debt, financial regulation, and the lender of last resort
Previously we’ve talked a lot here about the lender of last resort function of a central bank. In discussions a trade-off is often discussed, whereby having a lender of last resort can help to prevent...
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It’s about the “right” counterfactual
In a recent post, Mark Calabria from the Cato Institute took aim at the idea that the Lehman Brothers crisis was the “trigger” for a big crisis. Now I do not disagree that there was, and would have...
View ArticleMore on describing the crisis
Rates blog posted another article by me, this time talking about why the GFC persisted. So in the first one I laid down Fed actions as the catalyst, and in the second one I’ve primarily laid the blame...
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Financial regulation: Efficiency vs stability trade-off
Over at Rates Blog the trilogy of articles I’ve put up about the GFC has been completed with this one. The first two artices are here and here, and the blog post I did on them are here and here....
View ArticleEx-ante concerns about moral hazard
Fascinating post by Stephen Williams, who is a great monetary economist. In it, he goes through speeches at the Federal Reserve from September 2007 – a few months into the burgeoning credit crisis....
View ArticleThe excel error in Rogoff-Reinhart
I see the Rogoff-Reinhart figures regarding the correlation between GDP growth and the size of the debt stock are currently under attack – due largely to an unfortunate excel error discovered reported...
View ArticleHousing fuelled consumption boom?
In the EJ: There is strong evidence that house prices and consumption are synchronised. There is, however, disagreement over the causes of this link. This study examines if there is a wealth effect of...
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QE discussion fun
Last week I was away from the internet and work – as I was trying to finish off my paper for the NZAE conference this year. So I missed this post by Cochrane (including a bunch of great comments) and...
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Fair point
From this entertaining discussion of the Rethinking Macroeconomics II conference comes this gem (ht Economist’s View) 8) Can we realistically solve the “too big to fail” problem? We have to solve it....
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Sumner on Borio
A quote via Scott Sumner: But debt doesn’t make workers want to work less, it makes them want to consume less. There is a difference. We need economists to look through these framing effects, and see...
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The Economist on the GFC
The Economist magazine has started a five part series on the Global Financial Crisis, and the lessons from it. Should be a lot of fun. Part one is here. They conclude: The regulatory reforms that...
View ArticleFive year anniversary of Lehman Brothers
Sunday was the 5-year anniversary of the failure of Lehman Brothers – there was a live-streaming Twitter account, an good article by Liam Dann reminiscing, and a pointer to what he wrote about the...
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Comparing recessions: Unemployment in New Zealand
Keeping in mind Shamubeel’s point that we need to be careful looking at aggregates, I thought it would be nice to update the graph from this post back in early-2009 – when people were talking about 11%...
View ArticleSome broad lessons from the GFC
I had to do a brief chat about the Global Financial Crisis, “mistakes” that were made, and the role of the international financial architecture, for a organisation I’m not naming with people I’m not...
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