Noted for January 17, 2013
Report of JPMorgan Chase & Co. Management Task Force Regarding 2012 CIO Losses
Adam Posen is no fan of more expansionary fiscal policy in Japan: Japan should rethink its stimulus: "What happens when an economy runs out of fiscal space?… [P]ublic debt exceeds a certain limit and financial confidence collapses…. At times this scenario holds true…. Japan demonstrates a different reality…. Japan was able to get away with… high deficits… [because] Japan’s banks were induced to buy huge amounts of government bonds… Japan’s households accepted… persistently low returns… market pressures were limited by… few foreign holders of JGBs… [and] the share of taxation and government spending… was low…. Each of these factors enabling the ongoing fiscal deficits has had its costs…. The case for continued deficit spending in Japan ended by mid-2003. Though it is often overlooked, Japan’s economy recovered well following a rectification of financial and macroeconomic policies… [f]rom 2003 to 2007, per capita real income growth was the same in Japan as in the US…. Mr Abe’s new fiscal stimulus initiative is therefore questionable…. [C]ombined with monetary expansion and a likely consumption tax rise in the near future, I expect its multiplier and thus short-run impact to be high. The additional stimulus in Japan is counterproductive because it adds to the long-term costs without addressing Japan’s real problem: a return to deflation and an overvalued exchange rate…. When a large country with its own currency reaches its fiscal limit, growth ends not with a bang but a whimper of declining vitality and diminishing resilience."
Aaron Swartz Memorial JSTOR Liberator sets public domain academic articles free
Alan Blinder: Alan Blinder: The Debt Ceiling Is Scarier Than the Fiscal Cliff: "If the borrowing limit isn't raised, then spending would contract by 6% of GDP, followed by a swift recession."
Lawrence Christiano, Roberto Motto, and Massimo Rostagno: Risk Shocks: R"We augment a standard monetary DSGE model to include a Bernanke-Gertler-Gilchrist financial accelerator mechanism. We fit the model to US data, allowing the volatility of cross-sectional idiosyncratic uncertainty to fluctuate over time. We refer to this measure of volatility as 'risk'. We find that fluctuations in risk are the most important shock driving the business cycle."
Chang-Tai Hsieh, Erik Hurst, Charles I. Jones, and Peter J. Klenow: The Allocation of Talent and U.S. Economic Growth: "Over the last 50 years, there has been a remarkable convergence in the occupational distribution between white men, women, and blacks. We measure the macroeconomic consequences of this convergence through the prism of a Roy model of occupational choice in which women and blacks face frictions in the labor market and in the accumulation of human capital. The changing frictions implied by the observed occupational convergence account for 15 to 20 percent of growth in aggregate output per worker since 1960."
Eduardo Porter on Ray Fisman and Tim Sullivan's The Org: The Underlying Logic of the Office: When Privatization Works, and Why It Doesn’t Always
Matthew Yglesias: The powers that be hate Social Security: Here's why.: "Important People absolutely despise Social Security…. There's a deep logic to their hatred…. Important People care a lot about The Economy. The Economy consists of adding up all the economically valuable stuff… bought and sold…. You've got this big scheme to levy taxes on working people who are participating in The Economy and transfer money to people who've dropped out of The Economy…. If they didn't get that money, they'd probably have to work longer and spend more years being part of The Economy. And they'd have to spend their working years being thriftier…. The Economy thrives on incentives (if you work, we'll give you money) and desperation (if you want money, you have to work) and Social Security is a double-wammy, reducing the incentives of workers and reducing the desperation of the elderly…. [T]here's an essential tension here. Most of us like the idea of spending funds on bolstering the living standards of elderly people. But the Job Creators who want public policy to serve the needs of The Economy are always going to dislike that idea."
Jim Tankersley: No, inflation still isn’t a problem: There’s still a lot wrong with the U.S. economy. "Unemployment remains stubbornly high…. Growth remains too weak…. [D]im hopes for the 12 million-plus Americans who are currently looking for work…. Working-class wages are stuck in neutral. A yawning gap between the richest of the rich and everyone else…. Know what’s not a problem? Inflation."
Michael Ignatieff: The Needs of Strangers
Josh Marshall: On Swartz and MIT: "Swartz and his lawyers were not looking for a free pass. They had offered to accept a deferred prosecution or probation, so that if Swartz pulled a stunt like that again, he would end up in prison. Marty Weinberg, who took the case over from Good, said he nearly negotiated a plea bargain in which Swartz would not serve any time. He said JSTOR signed off on it, but MIT would not."
