Why Does Credit Growth Crowd Out Real Economic Growth?
The faster the credit growth, the worse it is for real growth (output per worker). This is what Stephen G. Cecchetti and Enisse Kharroubi want to explain in their NBER working paper "Why Does Credit Growth Crowd Out Real Economic Growth?"
The Missing Profits of Nations and Multinationals’ Extreme Profitability in Tax Havens
The economics of tax evasion is a growing field in academic economics. There are much new exciting research trying to understand the mechanism behind global tax evasion. "The Missing Profits of Nations” by Thomas R. Tørsløv, Ludvig S. Wier and Gabriel Zucman is one of the most noteworthy research on the dynamic behind global tax evasions.
What comes after housing market bubble?
An investigation into the probability of a crash in house prices following a housing bubble
Should Federal Reserve use scenario analysis to handle trade war uncertainty?
The Fed is currently in a "wait and see" mode in deciding what is the reaction to Trump's trade policy. But is it possible for the Fed to be a bit more proactive than merely saying "we will be able to update you further when we know more details"?
Enters scenario analysis.
“Concrete Economics” Review
Prof. Brad Delong's blogs, either "bradford-delong.com" or over at " Equitable Growth" , are definitely two of the most influential economics blogs in the...
CoCo issuance and bank fragility
A series of papers by Stefan Avdjiev, Bilyana Bogdanova, Patrick Bolton, Wei Jiang, and Anastasia Kartasheva on this topic is highly recommended.
Shadow Fed Chair — and Powell’s nuclear option to counter it
President Trump's plan to install a "Shadow Chair" months before Jerome Powell's term ends will definitely reshape US monetary policy — but it could face a surprising challenge from Powell himself.
A skeptical review of the QEs – why they might not be powerful as...
In their working paper "A Skeptical View of the Impact of the Fed's Balance Sheet," economists David Greenlaw, James D. Hamilton, Ethan Harris, and Kenneth D. West challenge some earlier studies that concluded QEs have a significant economic impact. Their major argument is that those research used simple event studies to quantify the impact of QE.
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:
Is there a Zero Lower Bound?
In a recent research, four European Central Bank economists found that negative interest rate policy in the eurozone can encourage banks to increase lending and encourage cooperations to increase investments.
That is, contrary to what macroeconomics models usually predict, interest rate policy can still has stimulative effect even the zero lower bound is reached.
