Category Archives: The dismal science

Perry Mehrling: The Fuss about Market Liquidity

I am SO glad to see this post appear. It’s annoying to see investors and banksters whine that they want more liquidity, as if that were a right.

Greek Debt Sustainability: The Devil is in the Tails

The debate over Greek debt sustainability is muddied by the fact that different analysts use different definitions. But once you use realistic assumptions, as in “tails risks” are actually pretty likely, Greek debt is obviously not “sustainable”.

Turbulence and Stability in Financial Markets: China in Recent Times

China is a case study of how liberalization of financial markets has never contributed to stability.

Bill Black: The OSU Marching Band Exemplifies Why Economists Err by Ignoring Culture

Contemporary economists do not include corruption in their models, yet another reason their models should not be relied on to make policy.

Debt Miracle: Why the Country that Borrowed the Most Industrialised First

Is debt really that bad? This column looks at the towering debts, rapid tax hikes, and constant state of war that led to Britain’s Industrial Revolution, showing that the devil is in the detail when assessing sovereign debt. When we consider the dangers of debt in today’s world, we should keep an eye on its potential benefits as well.

Reducing Risk-Taking by Regulating Bonuses: EU vs US Dodd-Frank

Bankers whinge about how much tougher their lives are in the post-crisis world. That is no small degree to central banks’ efforts to prop them up having caught up with their bottom lines

What’s Wrong with Inflation Targeting?

Macroeconomic policy focused on inflation targeting is likely to deliver neither macroeconomic stability nor economic development, aka sustainable growth.

The History of European Macroeconomics and Exchange Rate Policy

This is a very readable and important account of how Europe came to embrace some of the key elements of its current monetary policy and exchange rate straitjacket.

The IMF’s Olivier Blanchard Writes a Greek Tragedy

The IMF’s research head, Olivier Blanchard, attempted to defend the IMF’s sorry record in Greece. What if any of his argument makes sense?

Old Economic Thinking is the Problem, Says BIS

The BIS shellacks Bernanke’s savings glut hypothesis and stresses that financial fragility is still a big risk.

The Washington Consensus and Long-Term Austerity in Latin America

Most Latin American countries—including those, like Chile and Brazil, where democratically elected leftist governments were overthrown in the 1960s and 1970s. reversed course to adopt “neoliberal” economic policies. How well did that work?