ONE
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
TWO
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
THREE
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
FOUR
“Monetary policy doesn’t work through the interest rate channel—interest rates don’t matter.” Economists, argues Thornton, started believing in the power of interest rates in transmitting monetary policy after Volcker succeeded in bringing an end to the Great Inflation of 1970’s. But in the 90’s research by Ben Bernanke and Mark Gertler started questioning this belief. Fast forward 20 years, new research by Steve Sharpe and Gustavo Suarez confirms that the interest rate channel is very weak. Policymakers, concludes Thornton, need to “undertake a realistic appraisal of the extent to which changes in interest rates affect spending.”
The Limits of Monetary Policy: Why Interest Rates Don’t Matter
By: Daniel Thornton – Former VP Federal Reserve Bank of St Louis
FIVE
Olivier Blanchard explains how for the last 30 years macroeconomic research has focused on one distortion ie nominal rigidities and one instrument,the nominal policy rate. He advocates the introduction, even into the simplest models, of more distortions such as finite horizons and the role of own funds in spending decisions. This richer approach will in turn modify the way macroeconomists should think about policy responses.
Distortions in Macroeconomics
By: Olivier Blanchard – Peterson Institute
SIX
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
SEVEN
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
EIGHT
James Hamilton agrees that other factors are having a bigger impact on inflation than the unemployment rate right now. So is the Phillips curve the right framework for policymakers to think about inflation?
Are we in a new inflation regime?
By: James Hamilton – University of California, San Diego
NINE
Cecchetti and Schoenholtz place the beginning of the Financial Crisis on August 9, 2007 the day when BNP Paribas suspended redemptions from three of their mutual funds because their fund managers could not value their assets. With hindsight 20/20 the authors analyze the reasons why the BNP event was the spark that lit the tinder and shifted the system from a good state to a bad one.
Looking Back: The Financial Crisis Began 10 Years Ago This Week
By: Stephen G. Cecchetti, Kim Schoenholtz – Brandeis University, NYU
TEN
Evolution or revolution?
Rethinking macro stabilization Back to the future
By: Olivier Blanchard, Lawrence Summers – PIIE, Harvard University
