Things to Read at Night on February 18, 2015
Must- and Shall-Reads:
- : Financial Crisis: The Banking Rules that Died by a Thousand Small Cuts
- : Financial development and output growth: Evidence from East Asia and Latin America
- : Four American Health Care Fixes Neither Party Will Touch
- : The Migrant Story Behind Thriving Global Tech
- : Why Do Macroeconomists Think They Know Macroeconomics?
- : “In a world in which the private sectors of big economies suffer chronic demand deficiency syndrome, we are sure to see a hunt for such scraps of demand as exist…. At the very least, US spenders will, once again, have to pull not only their own economy but much of the rest of the world…. This is unlikely to work for very long… going to be quite hard work. The Fed must take due note….”
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(2014): Why Does Financial Sector Growth Crowd Out Real Economic Growth? (Basel: BIS) http://www.bis.org/publ/work490.pdf “We… concluded that the level of financial development is good only up to a point, after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental…. Financial sector growth benefits disproportionately high collateral/low productivity projects… the strong development in sectors like construction, where returns on projects are relatively easy to pledge as collateral but productivity (growth) is relatively low…. Where financiers employ the [most] skilled workers… productivity growth is lower than it would be had… entrepreneurs attract[ed] the [most] skilled labour…. [Thus] financial booms in which skilled labour work for the financial sector, are sub-optimal when the bargaining power of financiers is sufficiently large…. We focus on manufacturing industries and find that industries that are in competition for resources with finance are particularly damaged by financial booms… manufacturing sectors that are either R&D-intensive or dependent on external finance suffer disproportionate reductions in productivity growth when finance booms…”
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: “Here’s a chart saying ‘the rich have gotten poorer since 2007’. Here’s a chart showing the wealth of the rich. They don’t seem to be getting poorer. @Adennisdillon: @BenDWalsh Other problem is picking a bubble year as a baseline. -
: The Economics of Fraudulent Accounting: “We argue that earnings management and fraudulent accounting have important economic consequences. In a model where the costs of earnings management are endogenous, we show that in equilibrium, low productivity firms hire and invest too much in order to pool with high productivity firms. This behavior distorts the allocation of economic resources in the economy. We test the predictions of the model using firm-level data. We show that during periods of suspicious accounting, firms hire and invest excessively, while managers exercise options. When the misreporting is detected, firms shed labor and capital and productivity improves. Our firm-level results hold both before and after the market crash of 2000. In the aggregate, our model provides a novel explanation for periods of jobless and investment-less growth.”
Should Be Aware of:
- Financier)
- : “I’m really beginning to think that embracing everything Ben Carson considers ‘politically correct’ is a pretty good basic guide to ethical living.”
- : George Washington, Slave Catcher
- : Your Digital Strategy Shouldn’t Be About Attention
- : [Romance and Flensing at Boskone(http://www.maxgladstone.com/2015/02/romance-and-flensing-at-boskone/)
- : “The deeper problem with Wiesel…. Wiesel is acutely, and understandably, sensitive to the harm Jews suffer. Yet he is largely blind to the harm Jews cause…. Wiesel notes that the Iranian threat is particularly vivid now because Jews will soon celebrate Purim, when they read about ‘a wicked man in Persia named Haman’ who tried to ‘annihilate, murder and destroy the Jews.’ But on Purim Jews also read about what happens after… Persia’s Jews ‘with the stroke of the sword, and slaughter, and destruction… slew of their foes seventy and five thousand.’ If the Book of Esther offers a haunting warning of the violence Jews can suffer, why does it not also warn us of the violence Jews can inflict? And if Wiesel is so alarmed by threats of nuclear annihilation, why does he keep embracing his former patron Sheldon Adelson, who in 2013 urged the United States to drop an ‘atomic weapon’ in the Iranian desert, and then, if the Iranians don’t halt their nuclear program, drop one ‘in the middle of Tehran’ so the Iranians are ‘wiped out’…”