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Entries from February 2015

Serving 2 Masters At A Time?

February 14th, 2015 · Comments Off on Serving 2 Masters At A Time?

Monetary policy cannot serve both economic stability and financial stability at the same time. The use of monetary policy to achieve financial stability is a blunt instrument, producing widespread collateral damage in the economy. Monetary policy should be aimed at economic stability. In order to achieve financial stability, new instruments are needed, here we discuss […]

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Tags: Monetary policy

We Actually Do Know What Works

February 14th, 2015 · Comments Off on We Actually Do Know What Works

There is much frettening about what are often called unprecedented expansionary policies. While these policies do have risks and drawbacks, historical evidence strongly suggests that they work under conditions similar to what many economies experienced in the aftermath of the 2008 financial crisis. Conceptually, it’s also not terribly difficult to explain why these policies work, […]

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Tags: Economic Policy

The Japanese Endgame

February 10th, 2015 · Comments Off on The Japanese Endgame

Some argue Abeconomics has already failed. Others argue it will end in hyperinflation, or in a massive capital flight, or a bond market crash, or all of the above. Others argue that Japan won’t reach the escape velocity needed to bring its debt situation under control. While we can’t discard these risks entirely, we think […]

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Tags: Japan

A Russian Default?

February 10th, 2015 · Comments Off on A Russian Default?

It’s no secret that Russia is plagued by the crash in the oil price and Western sanctions, but there are also a host of structural economic problems. If the present conditions endure or worsen, there is a reasonable chance that Russia will default on part of its foreign debt, mostly in the hands of private […]

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Tags: Russia

Where Else Will You Go With Your Money?

February 2nd, 2015 · Comments Off on Where Else Will You Go With Your Money?

We analyze some mechanisms producing a slow shift of fund from the real economy to the financial economy. This shift is very beneficial for shareholders in the short and perhaps medium term, where else are you going to go with your money? But in the longer-term, this model has distinct disadvantages. Where Else Will You […]

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Tags: Economy

Solar And Oil Are Only Marginally Related

February 2nd, 2015 · Comments Off on Solar And Oil Are Only Marginally Related

The sell-off in solar stocks has accelerated in recent months, although there are few signs of any imminent slow down in the solar market. Most observers relate this sell-off to the fall in oil price. We investigate possible links between the oil price and solar stock performance and see little of substance. Solar And Oil […]

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Tags: Solar sector