Growth in a Time of Debt

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pages: 576 words: 105,655

Austerity: The History of a Dangerous Idea by Mark Blyth

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accounting loophole / creative accounting, balance sheet recession, bank run, banking crisis, Black Swan, Bretton Woods, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, deindustrialization, disintermediation, diversification, en.wikipedia.org, ending welfare as we know it, Eugene Fama: efficient market hypothesis, eurozone crisis, financial repression, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, Gini coefficient, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, interest rate swap, invisible hand, Irish property bubble, Joseph Schumpeter, Kenneth Rogoff, liquidationism / Banker’s doctrine / the Treasury view, Long Term Capital Management, market bubble, market clearing, Martin Wolf, moral hazard, mortgage debt, mortgage tax deduction, Occupy movement, offshore financial centre, paradox of thrift, price stability, quantitative easing, rent-seeking, reserve currency, road to serfdom, savings glut, short selling, structural adjustment programs, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, unorthodox policies, value at risk, Washington Consensus

Actually, debt does matter. It’s a problem, and those arguing for austerity out of more than just an innate hatred of the state and all its works are not tilting at windmills. While we may not be “drowning in debt,” there are many folks out there who are concerned that we will do a bit more than just get our feet wet if we are not careful. Carmen Reinhardt and Kenneth Rogoff’s much-cited paper, “Growth in a Time of Debt,” argues that government debt above a critical threshold of 90 percent can become a substantial drag on the economy.17 This claim is not without its critics, but notwithstanding those criticisms, the basic point can be rephrased as, why would any state want to carry and pay for such a debt load if it didn’t have to?18 Looking to the longer term, Simon Johnson and James Kwak argue that “America does face a long-term debt problem” that breeds a political climate of “hysteria, demagoguery and delusion,” which over the long haul leads to cuts that most affect “the people who can afford it least.”19 The end result, assuming that the United States doesn’t suffer an interest-rate shock in the short run, is that “the United States will look like the stereotypical Latin American country, with the super-rich living in private islands … a comfortable professional class … and a large, struggling lower class.”20 One could observe cynically that we are pretty much already there, but the point is once again well taken.

Leigh Phillips, “ECB Austerity Drive Raises Fears for Democratic Accountability in Europe,” The Guardian, August 22, 2011; Mort Zuckerman, “America Has No Choice but to Enter Its Own Age of Austerity,” Financial Times, July 14, 2011, “The A-List” Commentary; Alberto Alesina, Silvio Ardagna, Roberto Perotti, and Fabiano Schiantarelli (2002), “Fiscal Policy, Profits, and Investment,” American Economic Review, 92(3): 571–589; Peter Coy, “What Good Are Economists Anyway?” Bloomberg Business Week, April 16, 2009, cover story. 17. Carmen Reinhardt and Kenneth Rogoff, Growth in a Time of Debt, National Bureau of Economic Research (hereafter, NBER) working paper 15639, Cambridge, MA, January 2010. 18. See, for example, John Irons and Josh Bivens, “Government Debt and Economic Growth: Overreaching Claims of Debt ‘Threshold’ Suffer from Theoretical and Empirical Flaws,” Economic Policy Institute, Briefing Paper 271, Washington DC, July 16, 2010. Irons and Bivens take the 90 percent threshold idea to task on grounds of reverse causation.

By that time global oil supplies may have run out, and the last thing we may care about is sovereign debt. 26. “Budget of the United States Government, Fiscal Year 2002,” Executive Office of the President of the United States, 224, table S. 2, http://www.gpo.gov/fdsys/pkg/BUDGET-2002-BUD/pdf/BUDGET-2002-BUD.pdf. 27. Alberto Alesina, “Tax Cuts vs. ‘Stimulus’: The Evidence Is In,” Wall Street Journal, September 15, 2010, Opinion; Carmen M. Reinhart and Kenneth S. Rogoff “Growth in a Time of Debt,” American Economic Review, 100, 2 (2010): 573–578. 28. Timothy Noah, “Introducing the Great Divergence,” Slate, September 3, 2010, Part of a series entitled “The United States of Inequality,” http://www.slate.com/articles/news_and_politics/the_great_divergence/features/2010/the_united_states_of_inequality/introducing_the_great_divergence.html. 29. See US Census Bureau website, http://www.census.gov/hhes/www/poverty/about/overview/index.html, accessed September 19, 2011. 30.

 

pages: 353 words: 81,436

Buying Time: The Delayed Crisis of Democratic Capitalism by Wolfgang Streeck

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banking crisis, Bretton Woods, capital controls, Carmen Reinhart, central bank independence, collective bargaining, corporate governance, David Graeber, deindustrialization, Deng Xiaoping, Eugene Fama: efficient market hypothesis, financial deregulation, financial repression, full employment, Gini coefficient, Growth in a Time of Debt, income inequality, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, labour mobility, late capitalism, means of production, moral hazard, Occupy movement, open borders, open economy, Plutonomy: Buying Luxury, Explaining Global Imbalances, profit maximization, risk tolerance, shareholder value, too big to fail, union organizing, winner-take-all economy, Wolfgang Streeck

The leader of the Green group in the Bundestag, Jürgen Trittin, described Rösler’s remarks as “amateurish” and said they demonstrated that a “novice was in charge in the economics ministry”. The stock markets will react’ (Thielemann, ‘Das Ende der Demokratie’, p. 820). 72 Presumably this is so only beneath a certain level of debt. An influential expert view is that 80 per cent of GDP is the threshold beyond which the public debt hinders future growth (C. Reinhart and K. Rogoff, Growth in a Time of Debt, NBER Working Paper No. 15639, Cambridge, MA: National Bureau of Economic Research, 2009). If this is true – like all econometric ‘laws’, it should be treated with utmost caution – many developed economies are already incapable of growth. 73 See a few thoughts on the subject in chapter 4 below. 74 In combination with low interest rates, capital controls and high inflation, this may add up to a public debt reduction strategy.

Rademacher, Inga, National Tax Policy in the EMU: Some Empirical Evidence on the Effects of Common Monetary Policy on the Distribution of Tax Burdens, unpublished thesis, social sciences faculty, Frankfurt/Main, 2012. Raithel, Thomas et al. (eds), Auf dem Weg in eine neue Moderne? Die Bundesrepublik Deutschland in den siebziger und achtziger Jahren, Munich: Oldenbourg Wissenschaftsverlag, 2009. Rappaport, Alfred, Creating Shareholder Value, New York: The Free Press, 1986. Reinhart, Carmen M. and Kenneth S. Rogoff, Growth in a Time of Debt, NBER Working Paper No. 15639, Cambridge, MA: National Bureau of Economic Research, 2009. Reinhart, Carmen M. and M. Belen Sbrancia, The Liquidation of Government Debt, NBER Working Paper No. 16893, Cambridge, MA: National Bureau of Economic Research, 2011. Rose, Richard, ‘Inheritance Before Choice in Public Policy’, Journal of Theoretical Politics, vol. 2/3, 1990, pp. 263–91. ———. and Phillip L.

 

pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

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air freight, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, Bretton Woods, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, forward guidance, Fractional reserve banking, full employment, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen: Great Stagnation, very high income, winner-take-all economy

Alan Taylor, ‘When is the Time for Austerity?’, 20 July 2013, Vox, http://www.voxeu.org/article/when-time-austerity. 22. These arguments were developed in Martin Wolf, ‘How Austerity has Failed’, The New York Review of Books, vol. LX, no. 12, 11 July–4 August 2013, pp. 20–22, http://www.nybooks.com/articles/archives/2013/jul/11/how-austerity-has-failed/?pagination=false. 23. Carmen M. Reinhart and Kenneth Rogoff, ‘Growth in a Time of Debt’, National Bureau of Economic Research Working Paper No. 15639, January 2010, www.nber.org. 24. Thomas Herndon, Michael Ash and Robert Pollin, ‘Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff’, 15 April 2013, http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf. 25. International Monetary Fund, World Economic Outlook, April 2013, Fig. 1.1.2. 26.

‘A Step in the Dark: Unconventional Monetary Policy after the Crisis’, Andrew Crockett Memorial Lecture, Bank for International Settlement, 23 June 2013. http://www.bis.org/events/agm2013/sp130623.pdf. Reinhart, Carmen M. and Kenneth S. Rogoff. This Time is Different: Eight Centuries of Financial Folly (Princeton and Oxford: Princeton University Press, 2009). Reinhart, Carmen M. and Kenneth S. Rogoff. ‘Growth in a Time of Debt’, National Bureau of Economic Research Working Paper No. 15639, January 2010. www.nber.org. Report of the Parliamentary Commission on Banking Standards. Changing Banking for Good: Volume 1. Summary, and Conclusions and Recommendations, 12 June 2013. http://www.parliament.uk/business/committees/committees-a-z/joint-select/professional-standards-in-the-banking-industry/news/changing-banking-for-good-report.

 

pages: 414 words: 119,116

The Health Gap: The Challenge of an Unequal World by Michael Marmot

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active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, lump of labour, Mahatma Gandhi, meta analysis, meta-analysis, microcredit, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, urban planning, Washington Consensus, Winter of Discontent, working poor

Lancet. 2009; 374(9686): 315–23. 27Siegrist J, Rosskam E, Leka S. Report of task group 2: Employment and working conditions including occupation, unemployment and migrant workers 2012 [updated 2012/08/13]. Available from: https://www.instituteofhealthequity.org/members/workplans-and-draft-reports. 28Ibid. 29Lewis M. The Big Short: Inside the Doomsday Machine. London: Allen Lane, 2011. 30Reinhart C, Rogoff K. Growth in a time of debt. American Economic Review. 2010; 100(2): 473–8. 31Herndon T, Ash M, Pollin R. Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff. Political Economy Research Institute – Working Paper Series. 2013; April(322). 32International Monetary Fund. World Economic Outlook October 2012: Coping with High Debt and Sluggish Growth. Washington DC: IMF, 2012. 33UCL Institute of Health Equity.

Of Baboons and Men: Social Circumstances, Biology, and the Social Gradient in Health. In: Weinstein M, Lane MA, editors. Sociality, Hierarchy, Health: Comparative Biodemography: A Collection of Papers. Washington DC: National Academies Press, 2014. 10 LIVING FAIRLY IN THE WORLD 1Yang J. Did politics ruin ‘the world’s coolest mayor’? Toronto Star. 23 June 2014. 2Reinhart C, Rogoff K. Growth in a time of debt. American Economic Review. 2010; 100(2): 473–8. 3Herndon T, Ash M, Pollin R. Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff. Political Economy Research Institute – Working Paper Series. 2013; April(322). 4Stuckler D, Basu S. The Body Economic: Why Austerity Kills. New York: Basic Books, 2013. 5Eyraud L, Weber A. The Challenge of Debt Reduction during Fiscal Consolidation.

 

pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

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Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, corporate governance, Credit Default Swap, cross-subsidies, dematerialisation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial innovation, financial intermediation, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, income inequality, index fund, inflation targeting, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, London Whale, Long Term Capital Management, loose coupling, low cost carrier, M-Pesa, market design, millennium bug, mittelstand, moral hazard, mortgage debt, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, regulatory arbitrage, Renaissance Technologies, rent control, Richard Feynman, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, Schrödinger's Cat, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, Washington Consensus, We are the 99%, Yom Kippur War

., 2006, ‘A Brief History of the 1987 Stock Market Crash with a Discussion of the Federal Reserve Response’, Finance and Economics Discussion Series 2007–13, Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, p. 10. 4. Ibid., p. 19. 5. Ibid. 6. Bagehot, W., 1873, Lombard Street: A Description of the Money Market, New York, Scribner, Armstrong & Co. 7. Federal Reserve, Recent balance sheet trends. 8. Bank of England, Annual Reports 2007–14, Financial Statements. 9. Reinhart, C.M., and Rogoff, K.S., 2010, ‘Growth in a Time of Debt’, American Economic Review: Papers & Proceedings, 100 (2), May, pp. 573–8. 10. Herndon, T., Ash, M., and Pollin, R., 2013, ‘Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff’, University of Amherst, Political Economic Research Institute Working Paper 322, has received almost as much attention as the original exercise. 11. The latest (2014) Trustees’ report shows that the fund is adequate to pay current and projected benefits to 2042.

., 1986, Creating Shareholder Value: The New Standard for Business Performance, New York, Free Press. Rawnsley, J.H., 1995, Going for Broke: Nick Leeson and the Collapse of Barings Bank, London, HarperCollins. Reader, W.J., 1970–75, Imperial Chemical Industries: A History, London, Oxford University Press. Reich, R.B., 1990, ‘Who Is Us?’, Harvard Business Review, January. Reinhart, C.M., and Rogoff, K.S., 2010, ‘Growth in a Time of Debt’, American Economic Review: Papers & Proceedings, 100 (2), May, pp. 573–8. Rieffel, A., 2003, Restructuring Sovereign Debt: The Case for Ad Hoc Machinery, Washington, DC, Brookings Institution Press, pp. 289–94. Roosevelt, T., 1975, The Autobiography, Condensed from the Original Edition, Supplemented by Letters, Speeches, and Other Writings, ed. Andrews, W., New York, Charles Scribner’s Sons.

 

pages: 466 words: 127,728

The Death of Money: The Coming Collapse of the International Monetary System by James Rickards

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Affordable Care Act / Obamacare, Asian financial crisis, asset allocation, Ayatollah Khomeini, bank run, banking crisis, Ben Bernanke: helicopter money, bitcoin, Black Swan, Bretton Woods, BRICs, business climate, capital controls, Carmen Reinhart, central bank independence, centre right, collateralized debt obligation, collective bargaining, complexity theory, computer age, credit crunch, currency peg, David Graeber, debt deflation, Deng Xiaoping, diversification, Edward Snowden, eurozone crisis, fiat currency, financial innovation, financial intermediation, financial repression, Flash crash, floating exchange rates, forward guidance, George Akerlof, global reserve currency, global supply chain, Growth in a Time of Debt, income inequality, inflation targeting, invisible hand, jitney, Kenneth Rogoff, labor-force participation, labour mobility, Lao Tzu, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, market clearing, market design, money: store of value / unit of account / medium of exchange, mutually assured destruction, obamacare, offshore financial centre, oil shale / tar sands, open economy, Plutocrats, plutocrats, Ponzi scheme, price stability, quantitative easing, RAND corporation, reserve currency, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Satoshi Nakamoto, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, special drawing rights, Stuxnet, The Market for Lemons, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, trade route, uranium enrichment, Washington Consensus, working-age population, yield curve

Taylor, and Volker Wieland, “New Keynesian Versus Old Keynesian Government Spending Multipliers,” National Bureau of Economic Research, Working Paper no. 14782, February 2009, http://www.nber.org/papers/w14782.pdf?new_window=1. the relationship of U.S. debt and deficits . . . : John H. Makin, “Trillion-Dollar Deficits Are Sustainable for Now, Unfortunately,” American Enterprise Institute, December 13, 2012, http://www.aei.org/outloook/trillion-dollar-deficits-are-sustainable-for-now-unfortunately. Contrary to the oft-cited . . . : Carmen M. Reinhart and Kenneth S. Rogoff, “Growth in a Time of Debt,” National Bureau of Economic Research, Working Paper no. 15639, January 2010, http://www.nber.org/papers/w15639. “The Liquidation of Government Debt”: Carmen M. Reinhart and M. Belen Sbrancia, “The Liquidation of Government Debt,” National Bureau of Economic Research, Working Paper no. 16893, March 2011, http://www.nber.org/papers/w16893. “A . . . reason why forward guidance may be needed . . .”: Michael Woodford, “Methods of Policy Accommodation at the Interest-Rate Lower Bound,” paper presented at the Federal Reserve Bank of Kansas City Symposium, Jackson Hole, Wyo., August 31, 2012, p. 6, emphasis in the original, http://www.kc.frb.org/publicat/sympos/2012/mw.pdf.

“Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001.” Journal of Business 79, no. 4 (July 2006), http://econpapers.repec.org/article/ucpjnlbus/v_3a79_3ay_3a2006_3ai_3a4_3ap_3a1703-1726.htm. Pufeng, Major General Wang. “The Challenge of Information Warfare.” China Military Science, Spring 1995, http://www.fas.org/irp/world/china/docs/iw_mg_wang.htm. Reinhart, Carmen M., and Kenneth S. Rogoff. “Growth in a Time of Debt.” National Bureau of Economic Research, Working Paper no. 15639, January 2010, http://www.nber.org/papers/w15639. Reinhart, Carmen M., and M. Belen Sbrancia. “The Liquidation of Government Debt.” National Bureau of Economic Research, Working Paper no. 16893, March 2011, http://www.nber.org/papers/w16893. Rickards, James G. “A New Risk Management Model for Wall Street.” Journal of Enterprise Risk Management (March 2009), pp. 20–24. ———.

 

pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

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airline deregulation, Albert Einstein, bank run, barriers to entry, Bretton Woods, butterfly effect, capital controls, Carmen Reinhart, central bank independence, collective bargaining, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Edward Glaeser, Eugene Fama: efficient market hypothesis, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, price stability, prisoner's dilemma, profit maximization, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Washington Consensus, white flight

Andrew Weiss, Efficiency Wages: Models of Unemployment, Layoffs, and Wage Dispersion (Princeton, NJ: Princeton University Press, 1990). 16. Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson, and David Schmeidler, “Economic Models as Analogies” (unpublished paper, January 27, 2013), 6–7. 17. See, for example, my online debate for the Economist magazine with Harvard Business School professor Josh Lerner, July 12–17, 2010, http://www.economist.com/debate/debates/overview/177. 18. Carmen M. Reinhart and Kenneth S. Rogoff, Growth in a Time of Debt, NBER Working Paper 15639 (Cambridge, MA: National Bureau of Economic Research, 2010). 19. Thomas Herndon, Michael Ash, and Robert Pollin, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff” (Amherst: University of Massachusetts at Amherst, Political Economy Research Institute, April 15, 2013). 20. R. E. Peierls, “Wolfgang Ernst Pauli, 1900–1958,” Biographical Memoirs of Fellows of the Royal Society 5 (February 1960): 186. 21.

 

pages: 382 words: 92,138

The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

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Apple II, banking crisis, barriers to entry, Bretton Woods, California gold rush, call centre, carbon footprint, Carmen Reinhart, cleantech, computer age, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Financial Instability Hypothesis, full employment, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, invisible hand, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, natural language processing, new economy, offshore financial centre, popular electronics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, total factor productivity, trickle-down economics, Washington Consensus, William Shockley: the traitorous eight

Available online at http://www.bl.uk/bipc/pdfs/richardreport2008.pdf (accessed 6 June 2011). Robinson, J. 1953–54. ‘The Production Function and the Theory of Capital’. Review of Economic Studies 21, no. 2: 81–106. _____. 1978. ‘Obstacles to Full Employment’. In Contributions to Modern Economics. New York, San Francisco: Academic Press. Rodrik, D. 2004. ‘Industrial Policy for the 21st Century’. CEPR Discussion Paper 4767. Rogoff, K. and C. Reinhart. 2010. ‘Growth in a Time of Debt’. American Economic Review 100, no. 2: 573–8. Roland, A. and P. Shiman. 2002. Strategic Computing: DARPA and the Quest for Machine Intelligence, 1983–1993. Cambridge, MA: MIT Press. Roush, W. 2010. ‘The Story of Siri, from Birth at SRI to Acquisition by Apple – Virtual Personal Assistants Go Mobile’. Xconomy.com, 14 June. Available online at http://www.xconomy.com/san-francisco/2010/06/14/the-story-ofsiri-from-birth-at-sri-to-acquisition-by-apple-virtual-personal-assistants-go-mobile/ (accessed 2 July 2012).

 

pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

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3D printing, balance sheet recession, banking crisis, Bernie Sanders, Bretton Woods, business climate, Carmen Reinhart, central bank independence, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, forward guidance, full employment, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, Martin Wolf, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, paradox of thrift, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Steve Jobs, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, trickle-down economics, universal basic income, very high income

In the US, the cumulative amount committed by the Federal Reserve to shoring up the financial system has been calculated at between $7.77 trillion by Bloomberg—Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress, Bloomberg Markets, 28 November 2011, http://www.bloomberg.com/news/articles/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income (accessed 12 April 2016)—and $29 trillion by James Felkerson, $29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient, Working Paper No. 698, Levy Economics Institute of Bard College, 2011, http://www.levyinstitute.org/pubs/wp_698.pdf (accessed 12 April 2016). 7 OECD, General government deficit (indicator), 2016, doi: 10.1787/77079edb-en (accessed 12 April 2016). 8 Testimony to the Congressional Committee on Oversight and Government Reform, 23 October 2008, https://www.gpo.gov/fdsys/pkg/CHRG-110hhrg55764/html/CHRG-110hhrg55764.htm (accessed 12 April 2016). 9 R. J. Shiller, Irrational Exuberance, Princeton, NJ, Princeton University Press, 2000. 10 C. Reinhart and K. Rogoff, ‘Growth in a time of debt’, American Economic Review, vol. 100, no. 2, 2010, pp. 573–8. 11 L. Laeven and F. Valencia, Systemic Banking Crises: A New Database, IMF Working Paper No. 224, November 2008. 12 J. A. Turner, Between Debt and the Devil: Money, Credit, and Fixing Global Finance, Princeton and Oxford, Princeton University Press, 2016. 13 Unemployment was lower in 2014 than in 2007 in five OECD countries: Chile, Germany, Israel, Japan and Poland.

 

pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, Long Term Capital Management, Louis Pasteur, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, means of production, Mikhail Gorbachev, millennium bug, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, open economy, Plutocrats, plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Washington Consensus, working poor, éminence grise

Portsmouth’s predicament compares starkly with the current approach favoured by its south-coast neighbours, Southampton, of building up the side over time. 3 Margot Finn (2003) The Character of Credit: Personal Debt in English Culture, 1740–1914, Cambridge University Press. 4 McKinsey Global Institute (2010) ‘Debt and Deleveraging: The Global Credit Bubble and its Economic Consequences’, report. 5 Carmen Reinhart and Kenneth Rogoff (forthcoming) ‘Growth in a Time of Debt’, prepared for the American Economic Review Papers and Proceedings. 6 McKinsey Global Institute (2010) ‘Debt and Deleveraging: The Global Credit Bubble and its Economic Consequences’, report. 7 Richard Koo (2008) The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession, John Wiley & Sons. 8 Robert Chote, Carl Emmerson and Jonathan Shaw (eds) (2010) The Green Budget 2010, Institute for Fiscal Studies. 9 Ken Coutts and Robert Rowthorn (2009) ‘Prospects for the UK Balance of Payments’, University of Cambridge Centre for Business Research Working Paper No. 394. 10 Kenneth Rogoff (2003) ‘Globalisation and Global Disinflation’, presented to the Conference on Monetary Policy and Uncertainty: Adapting to a Changing Economy, Federal Reserve Bank of Kansas City. 11 Olivier Blanchard and John Simon, ‘The Long and Large Decline in US Output Volatility’, Brooklyn Papers on Economic Activity 1 (2001): 135–64. 12 On similar themes, see Jonathan McCarthy and Egon Zakrajsek (2003) ‘Inventory Dynamics and Business Cycles: What Has Changed?’

 

pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

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3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar

That is why consistent and carefully calibrated fiscal consolidation remains necessary in Europe.” http://ec.europa.eu/commission_2010-2014/rehn/documents/cab20130213_en.pdf 203 Eurostat, general government consolidated gross debt. Code: tsieb090. In the eurozone as a whole this was 85.4 per cent of GDP in 2010, 87.3 per cent in 2011 and 90.6 per cent in 2012. 204 Carmen Reinhart and Kenneth Rogoff, "Growth in a Time of Debt", NBER working paper 15639, January 2010 205 http://www.nextnewdeal.net/rortybomb/guest-post-reinhartrogoff-and-growth-time-debt 206 A point eloquently made by Adam Posen here: http://www.ft.com/cms/s/0/a6d94b02-a774-11e2-9fbe-00144feabdc0.html 207 Thomas Herndon, Michael Ash and Robert Pollin, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff", 15 April 2013.

 

pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

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bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, investor state dispute settlement, invisible hand, Kenneth Rogoff, knowledge economy, labour market flexibility, labour mobility, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

Brown (Chicago: University of Chicago Press, 2010), pp. 35–68. 57 See, for example, Dean Baker, “The Myth of Expansionary Fiscal Austerity,” Center for Economic and Policy Research, October 2010, available at http://cepr.net/documents/publications/austerity-myth-2010-10.pdf; and Arjun Jayadev and Mike Konczal, “The Boom Not The Slump: The Right Time For Austerity,” Roosevelt Institute, 2010, available at http://scholarworks.umb.edu/cgi/viewcontent.cgi?article=1026&context=econ_faculty_pubs. 58 See, for example, International Monetary Fund, “Will It Hurt? Macroeconomic Effects of Fiscal Consolidation,” chapter 3 in 2010 World Economic Outlook. 59 Eurostat figures for the eurozone for March 2016. 60 See, for example, International Monetary Fund, “Will It Hurt?” 62 Carmen M. Reinhart and Kenneth S. Rogoff, “Growth in a Time of Debt,” American Economic Review 100, no. 2 (May 2010): 573–78. 62 By now, there is a large literature on the subject. See, for example, Thomas Herndon, Michael Ash, and Robert Pollin, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Cambridge Journal of Economics 38, no. 2 (2014): 257–79; Ugo Panizza and Andrea F. Presbitero, “Public Debt and Economic Growth: Is There a Causal Effect?

 

pages: 726 words: 172,988

The Bankers' New Clothes: What's Wrong With Banking and What to Do About It by Anat Admati, Martin Hellwig

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bonus culture, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, diversified portfolio, en.wikipedia.org, Exxon Valdez, financial deregulation, financial innovation, financial intermediation, George Akerlof, Growth in a Time of Debt, income inequality, invisible hand, Jean Tirole, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, margin call, Martin Wolf, moral hazard, mortgage debt, mortgage tax deduction, Nick Leeson, Northern Rock, open economy, peer-to-peer lending, regulatory arbitrage, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, shareholder value, sovereign wealth fund, technology bubble, The Market for Lemons, the payments system, too big to fail, Upton Sinclair, Yogi Berra

“Debt Folklore and Cross-Country Differences in Financial Structure.” Journal of Applied Corporate Finance 10: 102–107. Rajan, Uday, Amit Seru, and Vikrant Vig. 2010. “The Failure of Models to Predict Models.” Working paper. University of Chicago, Chicago. Reinhart, Carmen M., and Kenneth Rogoff. 2009. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press. ———. 2010. “Growth in a Time of Debt.” American Economic Review 100 (2): 573–578. Reiss, Peter. 1990. “Economic and Financial Determinants of Oil and Gas Exploration Activity.” In Asymmetric Information, Corporate Finance and Investment, ed. R. Glenn Hubbard. Chicago: University of Chicago Press. Ricardo, David. 1817. “The Principles of Political Economy and Taxation.” London. Full text available at http://www.econlib.org/library/Ricardo/ricP.html.