Economics

Long-run stability of the velocity, or the filpside of it, money demand, however, is not a empirically founded assumption.

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:

In this installment of the interview, Professor Mian explains the major findings in his recent research paper "Household Debt and Business Cycles World Wide" and the important implications of that paper.

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

Macroprudential policies, it is argued, are more targeted and can complement central bank’s use of interest rate policy.

DSGE is a methodology for a wide range of macroeconomics models. One of the most common formulations is the so-called New Keynesian model. New Keynesian economics can be interpreted as an effort to combine the methodological tools developed by real business cycle theory with some of the central tenets of Keynesian economics tracing back to Keynes’ own General Theory.

The Bank of England on Thursday released its latest Monetary Policy Report, announcing its decision to lower its policy rate by 25 bps to 4%. The report contains a lot of excellent analysis, including on the recent rise in food prices, the effect of trade war as well as a review of its quantitative tightening policy. But one thing, a comparatively much less important thing, in the review just stuck in my mind...

In this installment, we continue our discussion with Prof. Charles Calomiris, Henry Kaufman Professor of Financial Institutions at Columbia Business School. The topic of this installment is the missing role of politics in economics models of banking crises. We also discussed if Calomiris thinks macroeconomics has a similar problem.

Jeremy Stein, former Federal Reserve governor, talks to us about his recent research “The Federal Reserve's Balance Sheet as a Financial-Stability Tool” and why the Fed should maintain a sizeable balance sheet.

Edited transcript of our interview with Paul Romer, on why the US urgently to scale up testing for Covid-19 and why he thinks the covid-crisis amounts an intellectual failure