Claessens, Stijn, Coleman, Nicholas, Donnelly, Michael, (2016), “Low interest rates and banks’ net interest margins”, Voxeu, 18 May Since the Global Crisis, interest rates in many advanced economies have been low and, in many cases, are expected to remain low for some time. Low interest rates help economies recover and can enhance banks’ balance sheets and performance, but persistently low rates may also erode the profitability of banks if they are associated with …Read More

Shiller, Robert J., (2016), “Fighting the Next Global Financial Crisis”, Project Syndicate, 18 May What do people mean when they criticize generals for “fighting the last war”? It’s not that generals ever think they will face the same weapon systems and the same battlefields. They certainly know better. The error, to the extent that the generals make it, must operate at a more subtle level. Generals are sometimes slow to get …Read More

Minenna, Marcello, (2016), “Helicopter Money: An Old Novelty”, Social Europe, 17 May Times have surely changed: as little as three years ago, Quantitative Easing was considered a remote hypothesis, EU inflation was well over 2% and only a small fraction of “heretics” (including myself) dared to discuss “helicopter money” as a measure to revive the economy. The “money from helicopters”, dubbed complete madness by Milton Friedman from 1948, has been a taboo …Read More

Den Haan, Wouter, Ellison, Martin, Ilzetzki. Ethan, McMahon, Michael, Reis, Ricardo, (2016), “The future role of unconventional monetary policy: CFM Survey results”, Voxeu, 17 May Quantitative easing is called ‘unconventional monetary policy’, but monetary policy could get much more ‘unconventional’. Things like ‘helicopter money’, abolishing currency and negative nominal interest rates have entered the public policy debate. This column reports the views of leading experts on the future role of unconventional monetary policy, and what …Read More

Cohen-Setton, Jérémie, (2016), “Regulation and growth”, Bruegel, 16 May Noah Smith writes that it’s easy to look around and find examples of regulations that protect incumbent businesses at the expense of the consumer — for example, the laws that forbid car companies from selling directly to consumers, creating a vast industry of middlemen. You can also find clear examples of careless bureaucratic overreach and inertia, like the total ban on sonic …Read More

Caicedo, Santiago, Lucas, Robert E., Jr., Rossi-Hansberg, Esteban, (2016), “Learning, career paths, and the distribution of wages”, Voxeu, 14 May A large part of people’s wages rewards the knowledge embedded in them that they use in a production endeavour. Knowledgeable individuals specialise in hard, complicated tasks, while less knowledgeable ones specialise in simpler, more common tasks. This column uses a dynamic model of knowledge accumulation over time and career paths to find an …Read More