Why the current crisis will be costly, long lasting, difficult to bring under control. Interpreting a multi-nature, multi-country, multi-hits shock

20 03 28

Daniele Langiu   daniele.langiu@gmail.com

Fabio Sdogati   fabio.sdogati@mip.polimi.it

 

In this paper we submit an interpretation, or ‘a model’, of the current crisis. We hope to shed some light on the endogenous mechanisms that are making the crisis costly both in humanitarian and economic terms, probably longer-lasting than many still imagine, or hope, and difficult to control in the absence of extreme intervention, as compared to historical, peace-time standards, by fiscal and monetary authorities the world over. Our question is: what can be said about the post-shock path of the crisis, from shock to recovery?

Continue reading “Why the current crisis will be costly, long lasting, difficult to bring under control. Interpreting a multi-nature, multi-country, multi-hits shock”

QE for Growth? Bullshit

A few years back a really small book attracted my attention because of its title. I know, that is the way it usually happens. But this one title was really special: On bullshit, by Harry G. Frankfurt, moral philosopher, Professor Emeritus of Philosophy at Princeton University (Princeton University press, 2003). Obviously, a must-buy, must-read, must try to understand. After all, it is not everyday that such an expression is used by a moral philosopher, let alone become the subject matter of a book. The opening lines of the book read as follows:

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it.”

Fast forward. In a recent post Simon Wren-Lewis, a colleague at Oxford, mentioned Professor Frankfurt and his work on bullshit. Now, before reading Professor Frankfurt, Emeritus at Princeton, I would have never thought of using such language myself. If in addition, however, Wren-Lewis uses the concept, I feel like I am free to use it myself: after all, if my majors do…

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Against the European Central Bank (not against the Euro): ECB has chosen not to fight for a stronger Union

The I.M.F is Telling Europe the Euro Doesn’t Work”. So the New York Times titles an article about a hitherto ‘secret’ imf ‘public debt sustainability analysis’ through which the fund, after just six years since the beginning of the so-called ‘Greek crisis’, realizes that the debt is (beg to differ: was made to be, by the fund itself, the ecb and the european commission) unsustainable. More on this document elsewhere and back to the title of the NYT. Continue reading “Against the European Central Bank (not against the Euro): ECB has chosen not to fight for a stronger Union”

ECB about to Cut Its Rates. So, Why Isn’t the Euro Depreciating?

Over the last few days I have been arguing that the policy measure the ECB is expected to adopt on June 5 will have effects on real economic activity that will be neither sizeable nor lasting. Save, I added, on compensations and bonuses for CEOs, CFO,s, and CIO at banks, mutual funds, and financial intermediaries in general.

Continue reading “ECB about to Cut Its Rates. So, Why Isn’t the Euro Depreciating?”