Repensar la política macroeconómica

The great moderation lulled macroeconomists and policymakers alike in the belief that we knew how to conduct macroeconomic policy. The crisis clearly forces to question that assessment. This paper reviews the main elements of the pre-crisis consensus, identify where we were wrong and what tenets of the pre-crisis framework still hold, and take a tentative first pass at the contours of a new macroeconomic policy framework.macroeconomic policy, macroprudential regulation, inflation targets, automatic stabilizers

Repensar la política macroeconómica

La gran moderación adormeció a los macroeconomistas y a los diseñadores de política con la creencia de que sabían cómo orientar la política macroeconómica. La crisis obliga claramente a cuestionar esa valoración. El artículo revisa los principales elementos del consenso anterior a la crisis, identificando dónde se estaba equivocados y qué principios del marco anterior a la crisis aún se mantienen; también, se da un primer paso para esbozar un nuevo marco de política macroeconómica

Inequality, credit and financial crises

In the three decades leading up to the financial crisis of 2008/09, income inequality rose across much of the developed world. This has led to a vigorous debate as to whether widening inequality was somehow to blame for the crisis by driving private sector credit booms. However, despite growing interest, empirical evidence on an inequality-fragility relationship is limited. Based on a panel analysis of eighteen OECD countries for the years 1970-2007, this study finds a statistically significant, positive relationship between income concentration and private sector indebtedness, once other traditional drivers are controlled for. The implications are twofold: (i) the view that the distribution of income is irrelevant to macroeconomic stability, as implicit in mainstream approaches, needs a second look; (i) to make the financial system more robust, policy-makers should cast the net wider than regulatory and monetary policy reforms, and consider the effects of changes to the income distribution

Does lending behaviour of banks in emerging economies vary by ownership? Evidence from the Indian banking sector

While much has been discussed about the relationship between ownership and financial performance of banks in emerging markets, literature about cross-ownership differences in credit market behaviour of banks in emerging economies is sparse. Using bank-level data from India, and a portfolio-choice model, for nine years (1995-96 to 2003-04), we examine banks’ behaviour in the context of emerging credit markets. Our results indicate that, in India, the data for the domestic banks fit well the aforementioned portfolio-choice model, especially for private banks, but the model cannot explain the behaviour of foreign banks. In general, allocation of assets between risk-free government securities and risky credit is affected by past allocation patterns, stock exchange listing (for private banks), risk averseness of banks, regulations regarding treatment of NPA, and ability of banks to recover doubtful credit. It is also evident that banks deal with changing levels of systematic risk by altering the ratio of securitized to non-securitized credit. These results have implications for disbursal of credit to small and medium enterprises in India

Comment on “Marine plastic debris emits a keystone infochemical for olfactory foraging seabirds” by Savocaet al.

In their recent paper, Savoca and collaborators (2016) showed that plastic debris in the ocean may acquire a dimethyl sulfide (DMS) signature from biofouling developing on their surface. According to them, DMS emission may represent an olfactory trap for foraging seabirds, which explains patterns of plastic ingestion among procellariiform seabirds. This hypothesis is appealing, but some of the data that Savoca et al. used to support their claim are questionable, resulting in a misclassification of species, as well as other decisions regarding the variables to include in their models. Furthermore, with their focus on a single lifestyle trait (nesting habit) of dubious relevance for explaining plastic ingestion, Savoca et al. neglect the opportunity to explore other factors that might provide better ecological insight. Finally, we are deeply concerned by the conservation policy recommendation proposed by Savoca et al.—to increase antifouling properties of consumer plastics—which constitutes a substantial environmental risk and delivers the wrong message to decision-makers. The reduction of plastic consumption, waste prevention, and proactive reuse through a circular economy should be at the heart of policy recommendations for future mitigation efforts.info:eu-repo/semantics/publishedVersio

Consumer credit information systems: A critical review of the literature. Too little attention paid by lawyers?

This paper reviews the existing literature on consumer credit reporting, the most extensively used instrument to overcome information asymmetry and adverse selection problems in credit markets. Despite the copious literature in economics and some research in regulatory policy, the legal community has paid almost no attention to the legal framework of consumer credit information systems, especially within the context of the European Union. Studies on the topic, however, seem particularly relevant in view of the establishment of a single market for consumer credit. This article ultimately calls for further legal research to address consumer protection concerns and inform future legislation

Bank competition and stability: Cross-country heterogeneity

This paper documents large cross-country variation in the relationship between bank competition and bank stability and explores market, regulatory and institutional features that can explain this variation. We show that an increase in competition will have a larger impact on banks’ fragility in countries with stricter activity restrictions, lower systemic fragility, better developed stock exchanges, more generous deposit insurance and more effective systems of credit information sharing. The effects are economically large and thus have important repercussions for the current regulatory reform debate