Financial Networks and Contagion,” a recent paper by Matthew Elliott, Benjamin Golub, and Matthew Jackson, uses network theory to study how financial interdependencies among governments, central banks, investment banks, and other institutions can lead to cascading defaults and failures.
While the model is quite technical, the main theoretical findings are … More >
Last week I returned from my second trip to Africa in one month, this time to Ethiopia. I went there as an advisory board member of Food Secure, a large EU research consortium on food security. This was my first time in East Africa, Addis is about 3000 feet above … More >
As it turns out, many of the same people who deny that climate change is a problem also deny that government default would be a problem. No doubt there are several reasons: the fact that Barack Obama is on the opposite side of both issues; the general impermeability of ideologues to facts … More >
On Robin Greenwood and David Scharfstein: The Growth of Modern Finance:
The financial sector does six things:
Payments–so that your web of exchange can span the world, rather than just be limited to people you know well and can trust not to welsh on the deal
Security–so that your command over economic resources … More >
At the end of the 2008, the seriousness of the financial crisis and the resulting collapse in production and employment coupled with the Federal Reserve’s exhaustion of its traditional monetary policy-management took, the open-market operation, raised the possibility that the U.S. government should consider using activist expansionary fiscal policy as … More >
Bank of England Governor Mark Carney, in an interview earlier this month, pointed out that there are no women on the Monetary Policy Committee (MPC). There also happen to be no female ministers in the Treasury. Carney suggested,
“What we have to do at the Bank of England is grow top … More >
Recently I learned one of my dear colleagues, Bob Evenson from Yale University, passed away. Bob grew up on a farm in the Minnesota and got his PhD at the University of Chicago. He became a leading development economist, and taught for more than 30 years mostly at Yale.
My early … More >