Found 98 article(s) for author 'Jeffrey Frankel'

Nominal GDP Targeting is Left, Right?

Nominal GDP Targeting is Left, Right? Jeffrey Frankel, May 2, 2013, Opinion. “The recent surge in interest in Nominal GDP Targeting, as an alternative to money targeting or inflation targeting if the central bank is to commit to a nominal target of some sort, has prompted some pushback. This is not surprising. But one of the responses is most peculiar. This is the allegation that the surge comes from liberals opportunistically adopting an idea that was originally proposed by conservatives, and that they will not stick with this “fad” in the longer run because it is only designed to fit current circumstances of high unemployment and low output. Remarkably, every component of this argument is wrong…” Link verified April 4, 2014

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The Future of the Currency Union

The Future of the Currency Union. Jeffrey Frankel, May 2013, Paper. “This note attempts a concise yet comprehensive overview of the crisis still facing the eurozone, in the areas of competitiveness, fiscal policy, and banking. The euro’s founding documents enshrined such principles as fiscal constraints, the “no bailout clause,” and assignment to the ECB of the goal of low inflation to the exclusion of monetizing national debts. Those principles have been permanently compromised. On the one hand, German taxpayers cannot be expected to agree to bailouts of profligate euro…” Link verified March 28, 2014

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Currency Wars

Currency Wars. Jeffrey Frankel, March 18, 2013, Opinion. “To the extent that the catchy phrase “Currency wars” has genuine analytical content, it is another way of saying “competitive devaluation” (or at least competitive depreciation), a kind of beggar-thy-neighbor policy (to use the language of the 1930s), or “manipulating exchange rates…to gain an unfair competitive advantage over other members…”  (to quote from IMF Article IV(1)iii.)…”  Link

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The Economist’s Stone

The Economist’s Stone. Jeffrey Frankel, March 13, 2013, Opinion. “This year marks the 100th anniversaries of two distinct institutional innovations in American economic policy: the introduction of the federal income tax and the establishment of the Federal Reserve. They are worth commemorating, if only because we are at risk of forgetting what we have learned since then. Initially, neither the income tax nor the Fed was associated with the explicit concepts of fiscal and monetary policy. Indeed, it wasn’t until after the experience of the 1930’s that they came to be viewed as potential instruments for macroeconomic management…” Link verified March 28, 2014

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McKinnon’s Claim that RMB-$ Appreciation Would Not Reduce Trade Imbalances

McKinnon’s Claim that RMB-$ Appreciation Would Not Reduce Trade Imbalances. Jeffrey Frankel, March 10, 2013, Opinion. “The International Economy magazine (Winter 2013) asks 16 authorities, “Can Changes in Exchange Rate Valuations Affect Trade Imbalances?” It is referring to the claim in a recent book by Stanford economist Ron McKinnon that pressure on China to let the renminbi appreciate against the dollar is fundamentally misconceived because such a movement in the exchange rate would not reduce China’s trade surplus nor American’s trade deficit. This is part of an old debate that pre-dates the rise of the China trade problem…” Link verified April 4, 2014

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Why politics fails to address market failures

Why politics fails to address market failures. Jeffrey Frankel, February 17, 2013, Opinion. “Markets can fail. But, as has been demonstrated in areas like air pollution, traffic congestion, spectrum allocation, and tobacco consumption, market mechanisms are often the best way for governments to address such failures. So why are such mechanisms now in retreat? Consider markets for emissions allowances, in which firms that can cheaply cut air pollution trade with those that cannot. A decade ago, the idea that such markets could achieve desired environmental goals at relatively low cost was widely recognized and implemented…” Link verified March 28, 2014

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The Battle of the Bond Benchmarks

The Battle of the Bond Benchmarks. Jeffrey Frankel, February 11, 2013, Opinion. “Some prominent institutional bond investors are shifting their focus from traditional benchmark indices, which weight countries’ debt issues by market capitalization, toward GDP-weighted indices. PIMCO, one of the world’s largest fixed-income investment firms, and the Government Pension Fund of Norway, one of the largest sovereign wealth funds, have both recently made moves in this direction. But there is a risk that some investors could lose sight of the purposes of a benchmark index. The benchmark exists to represent the views of the median investor…” Link verified March 28, 2014

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Should Bond Benchmarks Shift from Traditional to GDP-Weighted Indices?

Should Bond Benchmarks Shift from Traditional to GDP-Weighted Indices?. Jeffrey Frankel, February 11, 2013, Opinion. “Some prominent institutional bond investors are shifting their focus away from traditional benchmark indices that weight countries’ debt issues by market capitalization, toward GDP-weighted indices. PIMCO (Pacific Investment Management Company, LLC, the world’s largest fixed-income investment firm) and the Government Pension Fund of Norway (one of the world’s largest Sovereign Wealth Funds), have both recently made moves in this direction. There is a danger that some investors will lose sight of the purpose of a benchmark index…” Link verified April 4, 2014

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Monetary Alchemy, Fiscal Science

Monetary Alchemy, Fiscal Science. Jeffrey Frankel, January 26, 2013, Opinion. “The year 2013 marks the 100th anniversaries of two separate major institutional innovations in American economic policy: the Constitutional Amendment enacting the federal income tax, ratified on February 3, 1913, and the law establishing the Federal Reserve, passed in December 1913. It took some time before the two new institutions became associated with the explicit concepts of fiscal policy and monetary policy, respectively. It wasn’t until after the experience of the 1930s that they came to be viewed as potential instruments for managing the macro-economy. John Maynard Keynes, of course…” Link verified April 4, 2014

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