Global Financial Crisis - Readings

Ryoichi IMAI

2010/04/21

Gregory Mankiw

In 1936, Keynes wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.” In 2008, no defunct economist is more prominent than Keynes himself. - What would Keynes have done?

What is the Fed to do? Nov. 20, 2008.
New Keynesian Economics.

"Dear Mr. President" Advice from six Nobel laureates on fixing the economy, Newsweek Oct. 22, 2008.

Kenneth Rogoff embraces inflation.

Robert Lucas, Jr.: Bernanke Is the Best Stimulus Right Now

FRB Balance Sheet Debate:

James D. Hamilton: Federal Reserve Balance Sheet

Gesell Taxation

Greg Mankiw: It May Be Time for the Fed to Go Negative

Willem Buiter: Negative interest rates: when are they coming to a central bank near you?
Willem Buiter and Panigirtzoglou (2003): Overcoming the Zero Bound on Nominal Interest rates with Negative Interest on Currency: Gesell's Solution.

Labor Market Debate

John Quiggin: Refuted economic doctrines #8: US labor market superiority
Betting with Bryan Caplan

Schmidt, Rho, and Fremstad (2009) U.S. Unemployment Now As High as Europe

Bryan Caplan: I'll Bet On It: In the Long-Run, European Unemployment Will Be Higher
Unemployment, Labor Market Regulation, and Sour Grapes

Alan Blinder: Crazy Compensation and the Crisis

James Hamilton: Oil Prices and the Economic Downturn
Supply, demand, and the price of oil
Consequences of the Oil Shock of 2007-08

Positive:

*Romer and Bernstein: The Job Impact of the American Recovery and Reinvestment Plan

Krugman: The Conscience of a Liberal
*Getting fiscal
War and Non-Remembrance
Don't know much about history
*Paul Krugman recommends us to learn more from Japan's experiences:

Adam P. Posen (1998) Fiscal Policy Works When It Is Tried in Restoring Japan's Economic Growth.

Skeptical:

Mankiw: Fiscal Policy Puzzles
*Spending and Tax Multipliers,  
How Not to Stimulate the Economy

*John Taylor: Why Permanent Tax Cuts Are the Best Stimulus

*Cogan, Cwik, Taylor and Wieland (2009): New Keynesian versus Old Keynesian Government Spending Multipliers
Smets-Wouters (2003) Model:

*Hall and Woodford: Measuring the Effect of Infrastructure Spending on GDP with a comment by Robert Gordon.

Success or Failure of the Modern Macroeconomics?:

The Current Academic Economics, Neo-Classical or Keynesian, Is Useless.

Willem Buiter: The unfortunate uselessness of most ’state of the art’ academic monetary economics
Business Week: What Good Are Economists Anyway?

John Quiggin: Refuted/Obsolete Economic Doctrines
Refuted/obsolete economic doctrines #7: New Keynesian macroeconomics

Supplementary Readings

General

Robert E. Hall and Susan E. Woodward (2008), Financial Policy: Looking ahead

Barry Eichengreen and Kevin H. O’Rourke: A Tale of Two Depressions

Paul Krugman (2008), The Return of Depression Economics and the Crisis 2008, forthcoming.

Krugman, Paul (1994), The Myth of Asia's Miracle, Foreign Affairs.

McKinnon, Ronald, and Kenichi Ohno (1997), Dollar and Yen, MIT Press.

Ito, Takatoshi  (2004) Exchange rate regimes and monetary policy cooperation: Lessons from East Asia and Latin America, Japanese Economic Review, 55(3), 240-266.

Crisis in Theory

Franklin Allen

Credit Crisis Interview: Franklin Allen on Past Crises, June 20, 2008

Allen and Gale (2007), Understanding Financial Crises, Ch.1

Global Imbalances and Carry Trade

Ricardo Caballero

Ricardo Caballero and Arvind Krishnamurthy (2008): Global Imbalances and Financial Fragility

Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas (2008): Financial Crash, Commodity Prices and Global Imbalances

Hyun Song Shin

Plantin and Shin (2008): Carry Trades and Speculative Dynamics
Adrian, T., and H. S. Shin (2008) Liquidity and Financial Contagion
Shin, Hyun Son (2008), Risk and Liquidity,  2008 Clarendon Lectures in Finance

Jacques Olivier (2000): Growth-Enhancing Bubbles, International Economic Review 2000 Volume 41 Issue 1, Pages 133 - 152

Neoclassical or Monetarist View

Mulligan, Casey B on the myths, on the crisis. and the mortgage forgiveness.

Brad DeLong: The Geithner Plan FAQ

Paul Krugman: Geithner plan arithmetic

Tyler Cowen: Someone has to be wrong

Greg Mankiw: And I did not even get a citation

NY Times: Will the Geithner Plan Work?