Tuesday, January 19, 2021
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Exploration in Economics by a non-expert

US needs large-scale Covid testing urgently: Nobel winning economist Paul Romer

In an exclusive interview with EconReporter on Tuesday, Romer, co-recipient of the 2018 Nobel Prize in Economics Science, urged the US to adopt large-scale testing immediately to halt this most detrimental economic slump ever since the Great Depression in the 1930s.

What is the Saturated Level of Reserves?

The Saturated Level of Reserves or efficient level of reserves, is the point which the opportunity cost for banks to hold reserves disappears, and became indifferent towards holding more reserves. The reserve demand curve beyond this point becomes close to horizontal.

Why the Fed announces “not-QE” Treasuries purchase program?

Federal Reserve announced yesterday that it will start purchasing Treasury bills from Oct 15 (Tuesday) until at least the second quarter of next year.

How to benefit from others’ QE — Hong Kong Linked Exchange Rate’s lesson

What if I tell you, behind the boring news headline, there is actually a wonkish story about how the Hong Kong central bank took advantage of the monetary easing by the Fed in the last 12 year and created a new set of policy options that it can now use to actively mange the inflows created by the new round Fed easing under the Great Lockdown.

The sovereign-bank “doom loop”

Since the Euro crisis, investors and policymakers are well aware of the so-called "doom loop" between the banking system and the sovereign. That is, a crisis originating in the banking system (sovereign) will weaken the sovereign (banking system), which in turn will worsen the banking (sovereign) crisis itself.In a recent ECB discussion Paper "Managing the sovereign-bank nexus", the 7 economists - Giovanni Dell’Ariccia, Caio Ferreira, Nigel Jenkinson, Luc Laeven, Alberto Martin, Camelia Minoiu, and Alexander Popov - coauthored the paper suggested that the banks and sovereigns are linked by three interacting channels:

How to undermine HKD-USD peg (and without hurting the US)?

In fact, there are options that are more effective and beneficial to the US. One of them is to provide what I would call “financial refugee” to Hong Kong people.

Hysteresis – An Underrated Macroeconomics Question

Hysteresis is referred to the hypothesis that recessions may have permanent effects on the level of output relative to trend.

What is FTPL (Fiscal Theory of Price Level)?

The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon

Helicopter Money is here in Hong Kong? Well…

“The money helicopter has arrived,” Claire Jones writes in her FT Alphaville post, citing Hong Kong Finance Secretary’s announcement of a handout of HKD 10,000 to each permanent resident in the city.As a Hong...

How to use the Fed’s FIMA Repo — the case of Hong Kong

Hong Kong Monetary Authority, the de facto central bank of Hong Kong, announced on April 22 that it will utilize the Fed's FIMA Repo facility to borrow USD 10 billion of cash.