Noted for January 25, 2013
How Can We Know How Much Government Debt Is too Much? By Looking at Prices as Well as Quantities

Things to Revisit and Rethink

  • Robin Greenwood and David Scharfstein: The Growth of Modern Finance: "The U.S. financial services industry grew from 4.9% of GDP in 1980 to 7.9% of GDP in 2007. A sizeable portion of the growth can be explained by rising asset management fees, which in turn were driven by increases in the valuation of tradable assets, particularly equity. Another important factor was growth in fees associated with an expansion in household credit, particularly fees associated with residential mortgages. This expansion was itself fueled by the development of non-bank credit intermediation (or “shadow banking”). We offer a preliminary assessment of whether the growth of active asset management, household credit, and shadow banking – the main areas of growth in the financial sector – has been socially beneficial."

  • Brad DeLong: Japanese Convergence and Non-Convergence and the Financial Crisis of the Early 1990s

  • Liaquat Ahmed: Timothy Geithner On Populism, Paul Ryan, And His Legacy