Economics

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:

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

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

Atif Mian, co-author of House of Debt, discusses what he thinks are the "revolutionary" changes in macroeconomic academia since the Great Recession.

HKD tends to be on the strong side (closer to HKD 7.75 per USD) when the interest rate differential is positive (HIBOR > LIBOR).

This week, the trio who was directly responsible for the decision to let Lehman fail – Bernanke, Tim Geithner (then New York Fed President), and Hank Paulson (then Treasury Secretary) – joined together at a panel held by Brookings Institution and spoke about the lessons they had learned from the crisis.

How Alan Taylor, one of the authors of "The Rate of Return on Everything, 1870-2015" explains the liquidity premium problem when we compare the rate of return on Housing and Equity

A story about three economists agree with the prevailing consensus that the Phillips Curve of the US is flattened in the last few decades on the one hand; and dispute the idea that the Phillips Curve is dead on the other.

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.

Welcome to the latest installment of our interview series “Where is the General Theory of the 21st Century?” “Where is the General Theory of the...