http://voxeu.org/ Reported here by: SPMG, 7 August 2009
Mortgage-backed securities have played a major role in the financial crisis and aren’t very popular as a result. This column documents macroeconomic benefits of these instruments, showing that economies with more developed markets for securitised mortgage debt share more consumption risk with other economies.
Categories:
briefing, commentary
Tags: firm, global, macro
http://voxeu.org/ Reported here by: SPMG, 3 August 2009
In numerous poor or stagnating countries, politicians are ineffective and corrupt, public goods are under-provided and public policies confer rents to privileged élites, law enforcement is inadequate, and moral hazard is widespread inside public and private organisations. There is not just one institutional failure. Typically, the countries or regions that fail in one dimension also fail in many other aspects of collective behaviour.
One of the main challenges of current research in economic growth and development is identifying the mechanism through which distant political and economic history shapes the functioning of current institutions. The author, a professor of economics at Bocconi University, claims that an important channel for this shaping is individuals’ morality (defined as individual values and convictions about the scope of application of norms of good conduct). It is an important factor in economic outcomes.
Categories:
briefing, commentary
Tags: community, firm, global, individual, macro, moral
http://voxeu.org/ Reported here by: SPMG, 6 August 2009
This column introduces timelines, produced by the New York Fed, that organise and illustrate policymakers’ responses to the global financial crisis. Over the past two years, and particularly since the intensification of the global financial crisis in the fall of 2008, new information has been released at an astonishing pace. Between the breaking developments in the markets and the vast array of policy initiatives across countries, it has become increasingly challenging to keep track of the complex and evolving response to the crisis.
Categories:
briefing
Tags: global, macro, united states
This special report suggests the contract between society and banks will get stricter. Nothing highlights the scale of banking’s upheaval better than the intervention of governments. An industry that embodied the free market turns out to be pathetically dependent on the state for its survival… it is whistling in the wind to suggest that the state should withdraw from its commitment to support banks in times of trouble. “The body cannot survive without blood,” says Bo Lundgren, one of the architects of Sweden’s vaunted bank-rescue package of the early 1990s, “and the economy cannot survive without banks.” But now that this commitment has been called on so dramatically, three questions arise. The first is how long the state will remain so explicitly involved in the industry. The second is what immediate distortions that involvement creates. And the third is what additional charges governments will levy on the industry in future for providing banks with such a huge safety net today.
Categories:
briefing, commentary
Tags: firm, global, macro, money, united kingdom
http://voxeu.org/ Reported here by: SPMG, 6 August 2009
Aid critics have recently been blaming aid as the source of Africa’s poverty. This column explains how Africa has long been struggling with rural poverty, tropical diseases, illiteracy, and lack of infrastructure and that the right solution is to help address these critical needs through transparent and targeted public and private investments. This includes both more aid and more market financing. It refers to D. Moyo and her recent book “Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa” see http://www.huffingtonpost.com/dambisa-moyo/aid-ironies-a-response-to_b_207772.html
Categories:
commentary
Tags: africa, firm, global, individual, macro, moral, united states
http://www.ft.com/ Reported here by: SPMG, 6 August 2009
There is a risk that empirically dubious but emotionally attractive interpretations of the financial crisis, which condemn markets and call for more statism, could gain ground.
Categories:
commentary
Tags: community, firm, global, macro
…Today marks the anniversary of Black Tuesday, a crucial date on the timeline of the 1929 Wall Street Crash, and in similar times of financial uncertainty our attitudes towards the economy are under the spotlight. Makbul Rahim describes how religious ethics can inform economic pursuits, asking particularly how a religious perspective might view the economy as a tool for tackling climate change.
Categories:
briefing
Tags: community, global, individual, macro, moral
Diaspora bonds are financial instruments sold to members of the diaspora, often in small denominations, e.g. US$100. They are a simple means for governments to obtain hard currency, which can help boost central bank reserves, meet government financing gaps or fund infrastructure projects.Because diaspora investors have different risk perspectives on their home country than the average investor, they may be willing to purchase bonds at interest rates lower than those offered by international capital markets… Much of modern Israel was built with funds from bonds sold to the Jewish diaspora in the United States.
Categories:
briefing, commentary
Tags: community, firm, global, individual, macro, money
An unprecedented global economic crisis demands unprecedented initiatives to restore growth. The World Bank Group is helping with the financial rescue but believes that we must remain focused on the human rescue for the many millions left behind. The Bank is calling for developed countries to pledge the equivalent of 0.7 percent of their stimulus packages, or as much as they can in additional money, to a global vulnerability fund to help developing countries, which can’t afford bailouts and deficits.
Categories:
briefing
Tags: developing world, firm, global, macro