Tobias Adrian, Arturo Estrella, NY Fed: Monetary Tightening Cycles and the Predictability of Economic Activity. Eleven of fourteen monetary tightening cycles since 1955 were followed by increases in unemployment; three were not. The term spread at the end of these cycles discriminates almost perfectly between subsequent outcomes, but levels of nominal or real interest rates, as well as other interest rate spreads, generally do not.
Charles Calomiris, NBER: Banking Crises and the Rules of the Game. Banking crises properly defined consist either of panics or waves of costly bank failures. These phenomena were rare historically compared to the present. A historical analysis of the two phenomena reveals that they do not always coincide, are not random events, cannot be seen as the inevitable result of human nature or the liquidity transforming structure of bank balance sheets, and do not typically accompany business cycles or monetary policy errors. Rather, risk-inviting microeconomic rules of the banking game that are established by government have always been the key additional necessary condition to producing a propensity for banking distress, whether in the form of a high propensity for banking panics or a high propensity for waves of bank failures.
Alan S. Blinder, VoxEU: On the measurability of offshorability. Fear of offshoring may force its way back onto policy agendas soon. This column uses a survey of individual workers to measure the offshorability of particular jobs and says that about 25% of US jobs are offshorable. Surprisingly, routine tasks are not more offshorable but those held by more educated workers are.
Courtney Coile, Phillip B. Levine, NBER: The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement. Recent dramatic declines in U.S. stock and housing markets have led to widespread speculation that shrinking retirement accounts and falling home equity will lead workers to delay retirement. Yet the weakness in the labor market and its impact on retirement is often overlooked. If older job seekers have difficulty finding work, they may retire earlier than expected. On net, we predict that the increase in retirement attributable to the rising unemployment rate will be almost 50 percent larger than the decrease in retirement brought about by the stock market crash.
J. Bradford DeLong, UCLA: The anti-history boys. If you asked a modern economic historian like me why the world is currently in the grips of a financial crisis and a deep economic downturn, I would tell you that this is the latest episode in a long history of similar bubbles, crashes, crises, and recessions. But if you ask the same question of a modern macroeconomist you will find that he says that he does not know, and that macroeconomic models attribute economic downturns to various causes. Most, he points out, “rely on some form of large quarterly movements in the technological frontier. Some have collective shocks to the marginal utility of leisure. If modern macroeconomists do not reconnect with history – if they do not realize just what their theories are crystallized out of and what the point of the enterprise is – then their profession will wither and die
Anne Boschini, Astri Muren, Mats Persson: Constructing Gender in the Economics Lab. Several experimental studies on altruism have found women to be more generous than men. We investigate whether observed gender gaps in generosity can be explained by experimental setting, where some settings are more conducive than others to activating gender identity and social norms. In a dictator game we study priming along two dimensions: 1) some subjects enter their gender on the first page of the questionnaire (Pre) while others enter their gender on the last page (Post) and 2) some subjects are seated in single-sex rooms (Homogeneous) while others are seated in gender-mixed rooms (Mixed). It turns out that gender differences occur (women are more generous than men) only for the combination Pre and Mixed. The effect is driven by males: men are sensitive to priming, while women are not.
Andrew Ross Sorkin, Vanity Fair: Wall Street’s Near-Death Experience. With the implosion of Lehman Brothers, in September 2008, the realization dawned: Morgan Stanley and Goldman Sachs could be next. In an extensive excerpt from his new book, the author reveals the incredible scramble that took place—desperate phone calls, seat-of-the-pants merger proposals, flaring tempers—as Washington got tough and Wall Street titans Lloyd Blankfein and John Mack fought for survival.
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