Economics

>Professor Olivier Blanchard further explained the role empirical research on DSGE models, how to teach undergraduates macro after the Great Recession, and his research on hysteresis.

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.

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

While GDP rebounded by 0.65% in Q3 (2.6% annualized), the expansion was driven almost entirely by a 2.2% drop in imports.

Federal Reserve decided to cut rate by an supersized 0.5 percentage point. The decision finally ended the weeks-long market debate of whether the central bank would cut 25 or 50 basis points. One important thing, though, didn't reach the headline: The Fed has never been this "confused" about where the natural rate should be.

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.

George Akerlof explains how the Keynesian- neoclassical synthesis dominated the field, and what problems this dominance resulted.

Trump-appointed Fed governors will hold a board majority by the time Powell steps down as a governor. And that could matter a lot.

A series of papers by Stefan Avdjiev, Bilyana Bogdanova, Patrick Bolton, Wei Jiang, and Anastasia Kartasheva on this topic is highly recommended.

In celebration of Richard Thaler's prize lecture for his 2017 Nobel prize, we interviewed two of his best co-authors -- Hersh Shefrin and Shlomo Benartzi -- to discuss the future of behavioral economics.