Tuesday, 15 October 2013

Some thoughts on the McCallum work (wonkish)

by Jaime Bravo - jbravo@beneficiomarginal.com

Bennet McCallum was a reputed economist who highlighted some of the biggest questions in the economics field. Many of his questions still need to be resolved. It is the case of the gravity puzzle and the equations needed to solve the border puzzle. In the international trade literature, the border puzzle refers to the phenomena committed to study how borders participate of global trade - in the classical scenario, free trade. This theory has been developed by many economists. However, I decided to bring it to here as a part of the McCallum model because of the relevance of a paper published by Professor Anderson from Boston College and by Professor Van Wincoop from the University of Virginia - see references. The authors present that the McCallum model, based on the border puzzle, has some good points. Firstly, it correlates bilateral trade with GDP (Image 1) and with distance and other relevant factors for trade. They take into account, too, the commercial barriers established by modern states.

Saturday, 5 October 2013

Quantitative easing? What's that?

by Viva Avasthi

quantitative easing
This diagram shows the first part of the quantitative easing process.
Credit to awadvisors.com

You've probably heard of 'quantitative easing' when listening to the news, or read a bit about it and its implications while perusing various newspapers. It may have sparked your interest, but you might have found that in trying to do a little research on the topic you ended up having masses of technicalities to understand and opinions to wade through. If that's the case, you'll hopefully find this series useful.

The most recent reportage on quantitative easing (also known as QE) involved the US Federal Reserve's announcement in June of this year that it would scale back on its QE, and then its unexpected decision last month to postpone the scaling back. Both announcements (in June and in September) drastically affected markets and the economies of countries outside of the US, most notably India and China. The impact of the use of QE in the US will be explored in more detail in another article; this article will look at how QE works, when and where it was developed, why it's used and what the perceived risks of its usage are.

Although the theory, which I shall explain shortly, is quite straightforward, QE is fairly complex when applied to and analysed in the real world. The reason for this is that it depends upon what Keynes referred to as 'animal spirits', whether other countries are also using QE and how clear the channels which QE works through are, among other factors which can be difficult to predict and influence. That's one of the reasons why predicting the success of QE has been difficult in the past and why many people believe that QE has not been an effective policy tool at all.

Friday, 4 October 2013

Blurred Lines?

by Clemency Flitter 

blurred lines, robert thicke, rape culture
Blurred Lines has been heavily criticised for condoning rape
It is said that in the West we live in an equal and progressive society; but how can that be the case when almost half of men (between the ages of 18-25) believe it is okay to continue to pursue sexual relations with a woman even if she has changed her mind and is no longer giving consent? Perhaps even more worryingly a further 1 in 4 men said that they would have sex with someone they knew was unwilling. These statistics will not be helped by songs such as 'Blurred Lines', heavily criticised for trying to blur the line between consent and rape. This song, which contains the lyrics such as “And that's why I'm gon' take a good girl. I know you want it”, has even been banned from 5 UK universities but this has not stopped it spending weeks as a No 1 hit. How can we call ourselves a progressive and modern society when rape culture is still so pervasive, a big issue, but one people still refuse to address?

Wednesday, 2 October 2013

A Series on Quantitative Easing

by Viva Avasthi

quantitative easing

Over the next week I'll be exploring the ins and outs of quantitative easing (QE), looking at the topic from these perspectives and in this order:

  1. Quantitative Easing? What's that?
    • With explanations of what QE is, why it's used and how it works.
  2. QE in the United Kingdom
    • With a heavy focus on how it works and how successful it has been.
  3. QE in Europe
    • How has the Eurozone handled QE?
  4. QE in the United States of America
    • With a look into how the USA's decisions have affected global markets and other countries.
  5. Quantitative Easing: A Summary