Thursday, August 7, 2008


The cost of the prevailing policy framework in finance

A graphical playground

Feldstein's Heresy on Fiscal Policy?

Summers on economic dog days

Hummel on Central Banking

On time management

The crisis: a tale of two monetary policies

Measuring the value of NBA players

How To Talk to a Search Engine

The Street Porter and the Philosopher

Feldstein on Fiscal Policy

Economists predict whether the host country will rule the Beijing Olympics.

10 reasons why mind mapping software should be the foundation of your personal productivity system

Six Rules Doctors Need to Know

The former Fed chairman calls for a new way to deal with a crisis
Mr Greenspan says a high-level panel of American financial officials should be given broad power to seize any financial institution whose failure threatens the entire economy, bail out its creditors and close it down. “We need laws that specify and limit the conditions for bail-outs” and do so transparently with taxpayers’ money, “rather than circuitously through the central bank, as was done during the blow-up of Bear Stearns,” he writes in “The Age of Turbulence”. (Penguin is to release the paperback on September 9th.)

If that means the government has to wade in, so be it. “Our country has long since abandoned the notion that we should leave crises to be resolved solely by the marketplace,” he says. “The critical need…is to formalise…the procedures improvised in the case of Bear Stearns. This should ensure that in the future, government financial assistance to lending institutions does not impact the Federal Reserve’s balance-sheet and monetary policy.”

Accounting rules for public duty and private failure

Confessions of a risk manager

A housing slump helped cause the credit crisis. But its effect on spending may have been exaggerated
An OECD study in 2004 put the marginal propensity to spend out of financial wealth at between 0.01 and 0.07 for rich countries: that is, if wealth rises by $1, spending rises by between one and seven cents. The Federal Reserve’s model puts the wealth effect in America at 0.0375.

The Fed’s model assumes the same wealth effect for housing as for financial assets. From the perspective of lifetime income, a dollar of housing wealth is the same as a dollar of stockmarket wealth. But some argue that the negative wealth effect from falling home values may be larger than for other assets. One reason is that housing wealth is spread more evenly than financial wealth, which is concentrated among rich households whose spending is less sensitive to the changing tides. Another is that housing slumps are rarer than stockmarket downturns. Consumers are likely to consider a fall in house values as a durable change in wealth and may cut spending more sharply in response.

Which CEO Characteristics and Abilities Matter?

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