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State of the Art: Economic Development Through the Lens of Paintings | Mostly Economics
Clément Gorin, Stephan Heblich & Yanos Zylberberg in this NBER article trace economic development through historical paintings: This paper analyzes 630,000 paintings from 1400 onward to uncover how visual art reflects its socioeconomic context. We develop a learning algorithm to predict nine basic emotions conveyed in each painting and isolate a context effect—the emotional signal shared across artworks…
Is China Really Growing at 5 Percent? | Mostly Economics
William L. Barcelona, Danilo Cascaldi-Garcia, Jasper J. Hoek, and Eva Van Leemput1 in this Fednotes: Chinese authorities recently announced a growth target of "around 5 percent" for 2025, the same as their 2024 target. Five percent is about half the pace of growth that China sustained from the 1980s to the early 2010s, but it…
A Teacher Writes to Students Series (47): Corporates and Food Sovereignty | Mostly Economics
A Teacher Writes to Students Series (47): Corporates and Food Sovereignty Annavajhula J C Bose, PhD Department of Economics (Retd.), SRCC. DU The food sovereignty movement is pitted against the corporates all over the world. What is this movement and why is it anti-big-business? On the one hand, the Harvard Business School eggs you on…
100 years of Britian return to Gold Standard: Revisiting the Norman Conquest of $4.86 | Mostly Economics
During World War I, Britain and other countries stopped following gold standard. In 1925, Britain returned to gold standard amidst lot of debates and discussions. Andrew Bailey, Governor of Bank of England reflects on 100 years of one of the major decision in British economic history: Two other things before I get properly started. First,…
Hiroshima: Resilience of city structure after the atomic bombing | Mostly Economics
Kohei Takeda and Atsushi Yamagishi in this voxeu research: Cities have faced a host of shocks throughout history, including earthquakes, hurricanes, coastal flooding, and storm surges, as well as wartime destruction, such as in the current Russia-Ukraine conflict. This column looks at one of the most dramatic events in history, the atomic bombing of the…
The Penny Dilemma | Mostly Economics
The US government has decided to withdraw the penny (1 cent coin) from circulation. Oz Shy of Atlanta Fed analyses what this would mean for transactions: In summary, economic theory suggests that removing the penny is likely to reduce the burden of cash payments in the economy, although the effect appears relatively small in our…
The future of money | Mostly Economics
Sethaput Suthiwartnarueput, Governor of the Bank of Thailand, gives an ineresting speech on future of money. Before discussing future, he discusses basics of money. The main purpose of money and the monetary system is to facilitate exchange. At its most essential, this system consists of 3 elements: (1) a unit of account (UOA), (2) a…
All Indian cities fit to host olympics but not fit to keep its people | Mostly Economics
India's political class has a new fascination: Hosting Olympics. Some of them are telling us how some of the cities where there jurisdiction lies are fit to host olympics! Really? I mean when none of the cities are fit to keep its people, they are fit to host olymipcs? Where do these leaders get this…
Analysis of Government Borrowing Calendars | Mostly Economics
Payal Ghose of Clearing Corporation of India Ltd analyses the borrowing calendar of Indian goverment over two decades: The release of the calendar for issuance of marketable dated securities is a closely tracked event in the Indian government securities (G-Sec) market following the announcement of the quantum of gross borrowing for the upcoming fiscal year…
Balance Sheet Channel of Monetary Policy Transmission: Insights from Indian Manufacturing Firms | Mostly Economics
Bhavesh Salunkhe, Sapna Goel, Amit Kumar, Preetika, Kunal Priyadarshi and Satyananda Sahoo in this RBI Bulletin article analyse impact of monetary policy on manufacturing firms: Monetary policy plays a key role in influencing investment in fixed assets of manufacturing firms through the balance sheet channel – a mechanism where interest rate changes affect a firm’s…
Kalecki and the Stucturalist View of Economic Development | Mostly Economics
Jan Toporowski of SOAS discusses Kalecki's view of development in this INET article: This paper commemorates the 70th anniversary of Kalecki’s seminal lecture in Mexico on financing economic development. The first part of this paper outlines the theoretical model underlying Kalecki’s view of development financing. A second part of the paper summarizes the foundations of…
Interview of David Engerman: Development economics was a Global South project | Mostly Economics
David Engerman of Yale Univ has written this book (yet to read): Apostles of Development: Six Economists and the World They Made. Chanpreet Khurana of Moneycontrol interviews Prof Engerman: The six economists of Engerman's book - Jagdish Bhagwati, Amartya Sen and Dr Manmohan Singh from India, Rehman Sobhan from Bangladesh (then East Pakistan), Mahbub ul…
Next-generation monetary and financial system | Mostly Economics
Hyun Song Shin of BIS has laid a path for Next-generation monetary and financial system: Tokenisation represents a transformative innovation to both improve the old and enable the new. It paves the way for new arrangements in cross-border payments, securities markets and beyond. Tokenised platforms with central bank reserves, commercial bank money and government bonds…
Economic Models of Cultural Transmission | Mostly Economics
Alberto Bisin & Thierry Verdier in this NBER article survey economic models of cultural transmission: In this chapter we survey recent advances in modeling cultural transmission in the economics literature. We first present the basic canonical model of the evolution of cultural traits in the social sciences. Both Economics and Evolutionary anthropology build on this…
75th Anniversary of Bank of Korea | Mostly Economics
Bank of Korea (Korea's central bank) commemorated its 75th anniversary. Chang Yong Rhee, Governor of the Bank of Korea gave a speech on the occasion: Seventy-five years ago, the Bank of Korea took its first step with the mission of contributing to the sound development of the national economy through pursuing price stability. Since that…
Organized crime and banks: assessing the effects of anti-mafia police actions on lending | Mostly Economics
A team of ECB economists (Bruno Buchetti, Michele Fabrizi, Elisabetta Ipino, Ixart Miquel-Flores and Antonio Parbonetti) on how and whether mafia influencea bank lending: The infiltration of legitimate businesses by organized crime, particularly Mafia organizations, has long been a challenge in many parts of the world, including Italy. These criminal activities disrupt fair competition, suppress…
100 years of Central Bank of Albania: From the gold standard to inflation targeting | Mostly Economics
Banka E Shqiperese or Bank of Albania was established in 1925 and is celebrating its 100 years. Governor Gent Sejko gives a speech on the occasion: It is a special pleasure for me to welcome you to this significant event, which celebrates the 100th anniversary of the Bank of Albania’s foundation. Today’s conference represents a…
Uttarakhand crash shows how cheap a pilgrim’s life is | Mostly Economics
Cdr KP Sanjeev Kumar, a former Navy test pilot digs deep into tender documents issued by Uttarakhand Civil Aviation Development Authority (UCADA) to show how tourist lives ar cheap in India: In the post, Cdr Kumar compares how heli services in Mumbai High with Uttarakhand which is worth reading. One is professional and another anything…
How South Africa’s cricket team moved from being ‘chokers’ to ‘clutchers’ | Mostly Economics
Sports scientist Mogammad Sharhidd Taliep in TheConversation article discusses difference between chokers and clutchers: In sports psychology, choking has been defined as: An acute and considerable decrease in skill execution and performance when self-expected standards are normally achievable, which is the result of increased anxiety under perceived pressure performance decline when highly motivated individuals are subjected to…
Making Germany Grow Again | Mostly Economics
Ulrike Malmendier and Claudia Schaffranka in this IMF F&D article write on Germany's economic woes and way forward: More than a quarter century after The Economist first dubbed Germany the “sick man of Europe,” the label applies again. And this time, the illness is a chronic condition, requiring a long-term treatment plan. The new government’s fiscal plan to fund infrastructure investment and…
Should Czech Republic adopt Euro? | Mostly Economics
Aleš Michl, CNB Governor analyses pros and cons of Euro adoption in this speech: The pros and cons of having an independent monetary policy Two main advantages: First, exchange rate flexibility. A stronger koruna makes imports cheaper, which helps fight inflation. On the other hand, a weaker koruna supports exports during a recession. We can…
How French firms navigated the inflation surge: Lessons for expectations and decision making | Mostly Economics
Erwan Gautier, Frederique Savignac and Olivier Coibion in this voxeu research show that French firms response to inflation surge in 2022 was much muted: As inflation surged globally, economists and policymakers focused their attention on the expectations of households and financial markets – but relatively little was known about the inflation expectations of firms. Using…
Swans and Financial Stability: White swan, Grey swan and Black swans | Mostly Economics
Central bankers are often given labels of certain birds: hawks, doves, owls etc. Daniel Barth and Stacey Schreft in this Fed research paper categorise financial stability events as different colours of swans: This article refines the concept of black swans, typically described as highly unlikely and catastrophic events, by clearly distinguishing between knowable and unknowable…
This Time Must be Different: Lessons from Sri Lanka’s Recovery and Debt Restructuring | Mostly Economics
Gita Gopinath on Sri Lanka's impressive recovery after its 2022 crisis: This conference comes not only at the mid-point of Sri Lanka’s IMF-supported economic reform program, but also at a moment when the global economy is facing powerful crosscurrents—slowing growth, rising tariffs, and a rapidly changing global economic order alongside profound uncertainty. Countries are being…
The Fed’s Mandate Trilemma & The Evolution of Central Banking in the United States | Mostly Economics
Stephen B. Kaplan of George Washington University points to Fed's trilemma: price stability, unemployment and financial stability. Following the 2008 financial crisis, the Federal Reserve restored its historic financial stability mandate with new monetary tools to help mitigate the credit crunch and stimulate the economy. This article develops a new theory about the Fed’s mandate trilemma,…
Fifth helicopter crash in Uttarakhand | Mostly Economics
It has been a month since I suffered a personal tragedy in the helicopter crash during the chardham strategy at Uttarakhand. Since then, there have been four more crashes. The recent one led to the death of all the seven passengers. I mean tell me one country where there have been so many helicopter crashes…
Cry for me South Africa | Mostly Economics
One was in tears when South Africa lost in so many close World Cup matches they were expected to win. One is in tears when South Africa won the World Test Championship final when they were expected to lose. Either way South African cricket is more about emotions & tears than fun & joy. Such…
Frederick Forsyth | Mostly Economics
In the mayhem, I forgot to pay tribute to Frederick Forsyth. His books were a revelation on my young mind with exciting plots and sub-plots woven masterfully in the overall story. Whether it was the Day of the Jackal or Odessa File, one just picked the book and then turne the pages feverishly as the…
One language, one nation: Language policy and economic integration | Mostly Economics
Tamara Gurevitch, Peter Herman, Yoto Yotov and Farid Toubal show how a one language policy intended to unify ends up doing the opposite fragment: Language policy is not merely symbolic – it shapes the direction of trade, the allocation of subsidies, and a country’s internal cohesion. Using new data on linguistic diversity across and within…
The Grievance Doctrine: What if trade policy was about revenge, power, and punishment? | Mostly Economics
Richard Baldwin speaks to Tim Philips on how US Govt is using grievance doctrine as its policy: What if trade policy wasn’t really about trade at all? What if it was about revenge, power, and punishment, tariffs as tantrums and diplomacy as drama? You won’t find the Grievance Doctrine in economics textbooks, but there is…
Necessity entrepreneurs vs Opportunity entrepreneurs | Mostly Economics
Melanie Koch and Marco Langiulli in this BancaD'Italia paper differentiate between Necessity entrepreneurs and Opportunity entrepreneurs: Our work studies the differences between 'necessity' entrepreneurs, who start a business because they perceive their job market prospects as grim, and 'opportunity' entrepreneurs, who have a business idea they want to pursue. We assess whether the two kinds…
Is Macroeconomics a Mature Science? | Mostly Economics
Timothy Taylor of ConversableEconomist Blog in this post asks: Is Macroeconomics a Mature Science? He referes to a recent paper from Olivier Blanchard on Convergence in Macroeconomics. Macroeconomics is at times unfavorably compared to weather forecasting. But weather forecasts have in fact become more accurate over time: a forecast for four days inthe future, made today,…
Good riddance to the penny | Mostly Economics
American government has decided to phase out penny, the one cent coin. Tad DeHaven in this Cato post says it is good riddance: Do you enjoy getting pennies back in change when you pay for something with cash? Probably not. Pennies are generally a nuisance for both buyer and seller and often just get tossed…
Trautwein’s Challenge to the History of Economics | Mostly Economics
In 2017, Prof Hans-Michael Trautwein in his Presidential Address to European Society questioned marginalisation of history of economic thought and the state of economics: ......the main reason why historians of thought do not get much of a hearing these days is the marginalisation of their field within economics. This deplorable development, too, is a result…
Risk Management in Monetary Policymaking: The 1994-95 FOMC Tightening Episode | Mostly Economics
Kevin L. Kliesen in this St Louis Fed paper: The 1994-95 tightening episode was one of the most notable in the FOMC’s history because the FOMC raised the policy rate by 300 basis points in a year, despite headline and core CPI inflation trending lower prior to the beginning of tighter policy in February 1994.…
Significant, but not systemic: The challenge of China’s efforts to rival Western financial predominance | Mostly Economics
Martin Chorzempa and Lukas Spielberger in this PIIE article: Despite worldwide concerns about the US dollar, the Chinese renminbi is not yet ready to be a serious contender for leading international currency status. This Policy Brief examines three of the most important Chinese approaches to increasing the renminbi’s role as an international settlement currency: promote…
Moving History: Migration has propelled human progress for hundreds of thousands of years | Mostly Economics
Ian Goldin in IMF F&D article writes how migration is central to humanity: The history of migration is the story of humanity and its progress. It’s a story of peaceful cooperation and exchange, but also of violence. Terrible things have been done to compel people to migrate against their will. Yet despite the suffering, migration…
Number of autocracies more than democracies: first time in 20 years | Mostly Economics
V-Dem's recent report on Democracy shows the continued decline of democracies and rise of autocracies across the world. For the first time in 20 years, number of democracies are lower than autocracies. Key findings: Level of democracy for the average world citizen is back to 1985; by country averages, it is back to 1996. Democracy…
Incremental reform of banking law in India | Mostly Economics
K.P. Krishnan, Ajay Shah, Susan Thomas, Diya Uday, Harsh Vardhan in this XKDR paper: A banking sector regulator must be non-partisan and separate from government. However, the banking sector in India comprises banks of many kinds: private banks, public sector banks, cooperative banks, and regional rural banks. The laws that govern the sector have evolved…