Economy News

from AIER

Established 1999

New England, USA

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    “Fed’s Plosser: Sustainable Economic Recovery Is Now Underway”

    “With a sustainable economic recovery now underway, policy makers will soon have to start thinking about pulling back their monetary stimulus to ensure inflation stays low and inflation expectations remain well-anchored, Philadelphia Federal Reserve President Charles Plosser said Friday. While complete healing from the deepest downturn since the Great Depression will take time, Plosser said…

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    “A Monetary Policy Simulation Game”

    The author presents a computer game that puts the player in the role of a central bank governor. The game is a stochastic simulation of a standard reduced form macro model, and the user interacts with this simulation by manipulating the interest rate.

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    “Monetary Policy Rules and Business Cycles”

    “Basic features of business cycle properties under both exogenous and endogenous monetary policy rules are examined in calibrated dynamic stochastic general equilibrium models with nominal rigidities (the nominal wage contract model, the monopolistic competition model with price adjustment costs and a combination of these models). The experiments show that the difference in business cycle features…

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    “Crisis, Conditions and Capital”

    “A selection model for 68 countries between 1970 and 1998 is used to test the impact of International Monetary Fund (IMF) programs on international capital markets and examine how agreements are perceived by multinational investors. Results reveal that even after controlling for factors that lead countries to seek IMF support, IMF agreements lead to lower…

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    “Federal Reserve chief says U.S. budget on road to peril”

    “Federal Reserve Chairman Ben Bernanke warned Wednesday that “the federal budget appears to be on an unsustainable path,” but also recognized that an “exceptional increase” in the deficit had been necessary to ease the pain of recession. In nearly two hours of testimony before the House Budget Committee, Bernanke offered a mix of optimism and…

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    “Bernanke Says Fed to Take Necessary Steps on Growth”

    “Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis. ‘Our ongoing international cooperation sends an important signal to global financial markets that we will take the actions necessary to ensure stability and…

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    De Soto’s explanation of the crisis and paper money

    De Soto at the Zermatt 2010 Summit, Nicolás Michel presiding I was lucky to listen to the detailed explanation made by Hernando de Soto about how the lack of transparency of some derivatives, with no one knowing what “real” property they represent led to the crisis and might lead to a bigger crisis or stagnation…

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    “Treasury Three-Year Yield Rises From Near 2010 Low Before Sale”

    “Bernanke said yesterday at a Washington event that while the Fed will raise interest rates from a record low before the economy returns to “full employment,” officials don’t know when the process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, Bernanke said. Given the depth of the recession,…

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    Financial Reform: Ready, Fire, Aim

    “Some quotes are too good to ignore, including the following one by my friend Mike Durante, founder of Western Reserve Hedge Fund in Dallas and a former Federal Reserve bank examiner.* ‘. . . some of us . . . have consistently referred to the hypocrisy of President Obama’s so-termed ‘Comprehensive Financial Reform’ so we…

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    “The Fed Weighs In on Credit Card Reform”

    “Last year, when Congress passed the Credit Card Accountability, Responsibility and Disclosure Act, it declined to extend new consumer protections against certain card company practices to small business accounts. This was in part because some legislators expressed concern that nobody had properly studied how such a move might affect the price and availability of credit…