On the DSGE models
Joe Stiglitz, with this paper, adds to the list of critiques of the DSGE models but also proposes alternative models which might be more useful in understanding deep downturns and responding to them.
Where Modern Macroeconomics Went Wrong
Author: Joseph Stiglitz
From: Columbia University
On bank resolution
What type of resolution framework could incentivize distressed banks and its creditors to negotiate and restructure its liabilities before the bank fails?
Financial Restructuring and Resolution of Banks
Authors:Jean-Edouard Colliard, Denis Gromb
From: HEC Paris
On the social value of finance
This is a speech Luigi Zingales gave in 2015. It is a scathing critique of finance and particularly compelling since it is by a mainstream economist. Worth a read!
Does Finance Benefit Society?
By: Luigi Zingales – University of Chicago
On the Philips curve
We find no evidence for relying on the Phillips curve during normal times, such as those currently facing the U.S. economy.
Do Phillips Curves Conditionally Help to Forecast Inflation?
Authors: Michael Dotsey, Shigeru Fujita, and Tom Stark
From:Federal Reserve Bank of Philadelphia
On the rise of behavioral economics
A brief historical digression on Thaler’s contentious fight to get his ideas accepted by mainstream economists.
Another Nobel Surprise for Economics
By: Robert Shiller – Yale University
On the Global Financial Cycle
Cerutti and al. use capital flow data, dis-aggregated by direction and type, between 1990Q1 and 2015Q4 for 85 countries to show that the Global Financial Cycle can explain a mere quarter of the variation in capital flows in these countries.
How Important is the Global Financial Cycle? Evidence from Capital Flows
Authors: Eugenio Cerutti, Stijn Claessens and Andrew K. Rose
From: IMF
On ECB’s new policy model
We have decided to adopt a semi-structural approach inspired by two guidelines: 1) include financial frictions or financial mechanisms that could allow monetary policy shocks to be transmitted via channels that were absent before the crisis; 2) adopt a more flexible and empirically-driven approach.
Developing models for policy analysis in central banks
By: Vítor Constâncio – ECB
On the current state of financial markets
Both stock and bond markets are in bubble territory against a background of rarely seen before geopolitical risks, argues Jeffrey Frankel. If inflation increases and the major Central Banks start tightening at a quicker pace a new crisis could ensue. So why are investors under-estimating the risks?
Financial Markets Underestimate Risk
By: Jeffrey Frankel – Harvard University
On inflation
Can Neo-Fisherism be the new foundation for inflation control? Yes, argues Stephen Williamson in this paper and shows how both a New Keynesian model and a segmented markets model do have neo-Fisherian properties.
The US Phillips curve
Year-over-year headline PCE inflation vs. the difference between the unemployment rate and the Congressional Budget Office’s measure of the natural rate of unemployment
Source: Lael Brainard: Phillips Curve Confusion
Infation Control: Do Central Bankers Have It Right?
Author:Stephen Williamson
From: Federal Reserve Bank of St. Louis
