Saturday assorted links


#2: Rogoff's book review is the soundest -- on average -- piece of policy analysis and advice I have read in many, many years.

So I assume he must advocate Open Borders.

@#2 - Grandmaster Rogoff's 'book review' was anything but: it was a polemic for his pet projects, like the Chicago Plan of monetary creation, which he never really discusses.

( -
"The most important feature of the new model is that the banks would be obliged to back up deposits 100 percent with credits issued by the government. This means that they would not be allowed to create their own new credits ..."

Rogoff: "rather than try to tackle Wolf’s book chapter by chapter, it is perhaps more useful to highlight a selection of critical issues. I agree with much of what Wolf writes, but I will focus on a few areas where I see things different" (then Rogoff goes on for 10 pages with his pet peeves and projects).

Typical of prominent economists: it's all about me, myself and I. No such thing as bad publicity, as Rogoff's Excel blunder showed.

2. The review like the book only considers the final act of a four act play. Can financial crisis only be considered as a management problem? Seems so. Of course, we had good managers in 2008 (Paulson, Geithner, and Bernanke). Unfortunately, good managers may not always be available. Isn't the better approach to avoid financial crisis, and to avoid it by considering its causes? There's an assumption that the preference for speculation and excessive risk are inherent in our financial system and, hence, we must accept it and learn to manage it. Is that true? If, for example, the owners of Goldman Sachs were personally liable for its losses, would Goldman engage in speculation and take excessive risk? OPM is Wolf's preferred solution to speculation and excessive risk, which punishes the passive participants (the investors) rather than the actors (the bankers). It seems that the irrational behavior of bankers is exceeded only by the irrational views of those who observe the bankers.

#5 Phenomenal power--itty bitty living space!

4. I don't why this is surprising. Personally, I find it considerably more amazing when a country with so much potential catch-up growth manages to get poorer.

5. I would like to comment this one. Saviano is the most known writer about the Camorra (name for the Mafia around the Neapel region). He has an own fatwa on his head and lives with a police escort in different places around Italy. He doesn't meet his family for security reasons. What he writes is not speculative. I suggest to read Gomorra to anyone that hasn't to understand how the Italian organized crime works and survives,


And the awesome movie based on the book.

Wolf's book look worth reading, but from the review it is ot clear where Wolf (or Rogoff) stands on the issue of whether monetary authorities could and if the could if they should have avoided the recession by maintaining steady growth rates of NGDP.

Rogoff on the Euro crisis (not sure about Wolf): down plays the extent to which private sector lenders forgot about country risk. On has the impression that they took a Euro liability of a Greek issuer as almost as little more risky than that of a Finnish one. The first Euro crisis resulted from the attempt to save lenders from the consequences of this folly.

You can have some fun with this story. Pick a random action - I started with "air travel" and replace it for the word "sex" everywhere in this article.

If the lazy knee jerk rejection of evo psych hypotheses is to call them "Just So Stories", is the Econ analogy "So So Stories?"

#2. So now Rogoff is saying he was a vigorous advocate of fiscal expansion after 2008? Is this the same Rogoff who proved to us with his junk statistics that debt was about to destroy us all? Good grief. It's no wonder that economics departments around the country are closing, if this is the best that Harvard can produce.

Which Econ Depts are closing?

Check with Tyler Cowen.

According to the latest junk statistics economics departments around the country are closing.

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