Revisiting Speculative Hyperinflations in Monetary Models. Kenneth Rogoff, May 4, 2017, Paper, “In an interesting and provocative paper in the Journal of Political Economy, John Cochrane (2011) examines a host of New Keynesian and micro-founded models of money demand, and finds them all guilty of arbitrarily assuming uniqueness when, in fact, the whole class of models is generically riddled with multiple-equilibrium problems. He concludes that only the “fiscal theory of the price level”–which posits that the price level simply follows from the government budget constraint–offers a coherent and rigorous theory of the value of money.Link

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Why Did Trump Accept Venezuela’s Money? Kenneth Rogoff, May 4, 2017, Opinion, “There is a certain irony in recent news that Venezuela donated a half-million dollars to Donald Trump’s presidential inauguration through Petróleos de Venezuela (PDVSA), the state-owned oil company. Venezuela, of course, is a serial defaulter, having done so more times than almost any other country over the last two centuries.Link

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No Idea What Trump Means by Reciprocal Tax. Martin Feldstein, May 3, 2017, Video, “Martin Feldstein, professor of economics at Harvard University, discusses his thoughts on tax policy and the Trump administration. He speaks with Bloomberg’s David Westin and Jonathan Ferro on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)” Two Parts –  Link  1 “Reciprocal Tax” Link 2 – “Big Issue is Tax Reform

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Currency Politics in the Developing World. Jeffry Frieden, Spring 2017, Paper, “The exchange rate is often said to be the most important price in any economy, for it affects all other prices. Americans are not used to thinking in these terms, in part because the US economy is relatively closed, and in part because the dollar is the world’s principal reserve currency. Nonetheless, a country’s exchange rate has a powerful impact on its economic activity, and this is especially true for developing countries. Because currency policy structures a country’s economic relations with the rest of the world, it can be crucial in determining a poor country’s developmental prospects.Link

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Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts and Implications for Future Health Reforms. Nathaniel Hendren, Mark Shepard, May 2017, Paper, “How much are low-income individuals willing to pay for health insurance? What are the implications for insurance market reforms that change government subsidies? Using administrative data from Massachusetts’ subsidized insurance exchange in 2009-2013, we exploit discontinuities in the premium subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. We obtain three main results…Link

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Manufacturing and Inclusive Growth: The Experience in the Rest of the World. Robert Lawrence, 2017, Paper, “This report describes some of the results from the second phase of the research project on the role of manufacturing in inclusive growth. The first phase of the project examined the US experience. In the second phase, undertaken by Robert Lawrence and Danial Lashkari – a graduate student in the Harvard Department of Economics, the scope of the analysis has broadened to explore the experience of manufacturing employment growth in the rest of the world.Link

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Private Equity and Financial Fragility during the Crisis. Josh Lerner, 2017, Paper, “Does private equity increase financial fragility during economic crises? To investigate this issue, we examine the financial decisions and performance of private equity-backed companies in the United Kingdom during the 2008 financial crisis. We find that PE-backed companies experienced a smaller decline in investment, relative to a carefully selected control group. PE-backed companies also experienced a larger increase in debt and equity issuances, while overall leverage remained unchanged. The effects are particularly strong for companies that were more likely to be financially constrained and those where private equity sponsors were more likely to have resources to help the portfolio company. The results are consistent with the hypothesis that PE sponsors relax financing constraints during a sudden tightening of credit markets and inconsistent with the hypothesis that private equity increase financial fragility during periods of financial turmoil.Link

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Twenty Years of Time Series – Econometrics in Ten Pictures. James Stock, Spring 2017, Paper, “Twenty years ago, empirical macroeconomists shared some common understandings. One was that a dynamic causal effect—for example, the effect on output growth of the Federal Reserve increasing the federal funds rate—is properly conceived as the effect of a shock, that is, of an unanticipated autonomous change linked to a specific source. Following Sims (1980), the use of vector autoregressions to estimate the dynamic causal effect of shocks on economic variables was widespread.Link

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Politics, Academics, and Africa. Robert Bates, 2017, Paper, “The roots of my fascination with politics and Africa run deep; so too does my need for clarity. The combination drove me into the professoriate. My research in Africa convinced me that modernization theory was wrong: The people I came to know in the field were sophisticated in their politics. Additional research convinced me that market-oriented approaches to political economy were wrong and that government intervention could lead to increases in productivity and welfare. Because neoclassical approaches are flexible, I continue to think in terms of strategy and choice and to apply them to the study of development.Link

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The Debate on Corporate Tax Reform Just Started for Real. Mihir Desai, May 2017, Opinion, “President Trump’s announcement of his proposed tax reforms, as skeletal as it was, is better news than most commentators have suggested. First, it signals that the administration is coming to the view that tax reform is the most important agenda item for the first term — and that is great news. Second, the fact that the corporate piece of the proposal did not embrace the plan proposed by House Ways and Means Chair Kevin Brady and Speaker Paul Ryan, and its so-called border adjustment tax, is also good news. So, there is some good news in what it signals and what’s not in it. What about what is in it?Link

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