Showing posts with label Macro Demystified. Show all posts
Monday, February 12, 2018
From Branko Milanovic and the Globalist:
“Under the influence of Amartya Sen, we have been “nudged” towards a reassessment of the relative merits of “The theory of moral sentiments “ (TMS) and “The Wealth of Nations” (WN). Sen has done a lot to bring Smith’s early work out of relative obscurity where it was consigned by two centuries of success of The Wealth of Nations.
What remains true is that many people around the world continue to have a remarkably distorted view of The Wealth of Nations. Not much beyond the (in)famous “invisible hand of the market.”
Bad government
In reality, there are no “good guys” in The Wealth in Nations. Of course, the government comes in for special criticism.
Smith argues against its rapacity in putting up high tariffs, its foolishness in following mercantilist policies, its pettiness in constraining the system of “natural liberty,” its attempts to decide where people should live (the law of settlement, a hukou-like system was then in existence in Britain).
(…)
Bad businessmen
But businessmen are no better. As soon as they are given half a chance, perhaps just after having gotten rid of some particularly nefarious government regulation, they are back to plotting how to “restrain” the market, to pay suppliers less, destroy competitors, cheat workers (see today’s IT companies, Walmart, Amazon).
In the famous quote, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices” (Book 1, Ch. 8).
In their mad ambition, they try to rule the world (see Davos): “…the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind” (Book 4, Ch. 3, p. 621).”
Read the full article here.
From Branko Milanovic and the Globalist:
“Under the influence of Amartya Sen, we have been “nudged” towards a reassessment of the relative merits of “The theory of moral sentiments “ (TMS) and “The Wealth of Nations” (WN). Sen has done a lot to bring Smith’s early work out of relative obscurity where it was consigned by two centuries of success of The Wealth of Nations.
What remains true is that many people around the world continue to have a remarkably distorted view of The Wealth of Nations.
Posted by at 10:28 AM
Labels: Macro Demystified
Wednesday, February 7, 2018
What do blueberries have to do with economics? Find out in less than 2 minutes.
What do blueberries have to do with economics? Find out in less than 2 minutes.
Posted by at 1:26 PM
Labels: Macro Demystified
What is GDP and why should you even care? Find out in 2 minutes!
What is GDP and why should you even care? Find out in 2 minutes!
Posted by at 1:25 PM
Labels: Macro Demystified
What is inflation? Let Wala’a explain in less than 2 minutes!
What is inflation? Let Wala’a explain in less than 2 minutes!
Posted by at 12:49 PM
Labels: Macro Demystified
Monday, January 15, 2018
From a new IMF working paper by Jihad Dagher:
“This paper reviews some of the most infamous financial crisis in history and brings several patterns that are rarely discussed in the literature, at least not in a historical and cross- sectional approach. It shows that in most cases regulation has been pro-cyclical, effectively weakening during the boom and strengthening during the bust. Regulators do not operate in a vacuum, and this paper shows how, in most cases, political interventions have helped fuel the boom in similar ways across time and countries. The political repercussions of crises, partly due to changes in the public’s perception about the role of the government, are usually very significant. They help explain the reversal of policies and the regulatory backlash.
The interplay between politics and financial policy, described in this paper, has not received sufficient attention. The focus of the literature, which has been mostly cast in technical terms, is to find the optimal level of regulation that regulators should be enforc- ing. Will new regulations and their enforcement survive the test of time? History offers a relatively pessimistic answer to this question. It offers plenty of examples where regulatory failures can be attributed to political failures. Strengthened regulations and supervision are, in essence, tools given to regulators to use as long as the political climate allows them to. To what extent can regulators be insulated from changes in politicians’ (and voters’) philosophy toward regulation? What changes need to be made at the institutional level? This is an important question left for future research. Acknowledging the fact that politics can be the undoing of macro-prudential policy would be a step in the right direction.”
From a new IMF working paper by Jihad Dagher:
“This paper reviews some of the most infamous financial crisis in history and brings several patterns that are rarely discussed in the literature, at least not in a historical and cross- sectional approach. It shows that in most cases regulation has been pro-cyclical, effectively weakening during the boom and strengthening during the bust. Regulators do not operate in a vacuum, and this paper shows how,
Posted by at 2:35 PM
Labels: Macro Demystified
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