International Macroeconomic Policy:
Theory and Evidence from
Recent Financial Crises
ECON-GB2380.10
Fall 2019
(*)
denotes a required reading
I. AN OVERVIEW OF THE WORLD
ECONOMY
I. 1. Global Macroeconomic Performance
After the Global Financial Crisis
Current Economic
Conditions in the Global Economy and Policy Issues; Upside and Downside Risks:
- Roubini, Handout on Macroeconomic Issues
and Vulnerabilities in the US and Global Economy (*)
- Roubini and Backus, Lectures in
Macroeconomics, Chapter 1. (*)
- Krugman,Obstfeld and Melitz, Chapter 13
(*)
- Global
Outlook:
- IMF
World Economic Outlook Update, July 2019 (*)
- The Economist, Survey of The Global Economy (to be published
in October 2019) (*)
- IMF World Economic Outlook,
September 2019 Chapter 1 (to be published in early October 2018 ) (*)
- World
Bank, Global Economic Prospects, June 2019 (*)
- BIS Quarterly Review,
Jun 2019 (*)
- Roubini, The
Anatomy of the Coming Recession, Aug 2019 (*)
- Roubini, The
Growing Risk of a 2020 Recession and Crisis, Jun 2019 (*)
- Rachman, The
Saudi Oil Crisis, Volatile Leaders and the Risk of Escalation, Sep 2019
(*)
- Mackenize, A
Fluid and Crude Awakening, Sep 2019 (*)
- Harding, Recessions
Have Become Rarer and More Scary, Sep 2019
(*)
- Butler, Saudis
Ill-Prepared to Handle Oil Attack Disruption, Sep 2019 (*)
- Various Authors, Trade,
Trump and China, Project Syndicate, May 2019 (*)
- Rudd, What’s
Next For China’s Political Economy? Aug 2019 (*)
- Roubini, The
Coming Sino-American Bust-Up, Jun 2019 (*)
- Roubini, Bi-polar
Markets in the New Mediocre, Apr 2019 (*)
- Davies, Global
Policy Adjust to the Surprising Effects of Trade Wars, Jul 2019 (*)
- Davies, How
China Dodged a Trade War Recession. Sep 2019 (*)
- Davies, World
Economy Still Vulnerable In Spite of G20 Tariff
Truce, Jun 2019, (*)
- Various Authors, The
Gathering Economic Storm, Sep 2019 (*)
- Wolf, The
Case for Sane Globalism Remains Strong, July 2019 (*)
- Rajan, The
True Toll of The Trade War, Sep 2019 (*)
- Wolf, Bretton
Woods at 75: Global Cooperation Under Threat, Jul 2019 (*)
- El-Erian,
Market
Reflect Too Much Confidence in US-China Trade Deal, Sep 2019 (*)
- El-Erian,
Relying
on Liquidity Risks Leaving Investors in Hot Water, Aug 2019 (*)
- Niimani, Japan
Has Its Own Form of Populism and We Can Learn From
It, Sp 2019 (*)
- FT Editorial Board, The
Escalating Trade War Will Deepen Global Gloom, Sep 2019 (*)
- Authers, Game
Theorists Will Never See Iran’s Godot Coming, Sep 2019 (*)
- PIMCO, Pimco
Blog
- PIMCO, Secular
Outlook: Dealing with Disruption, May 2019 (*)
- Goldman Sachs, Trade
Wars 3.0 Jun 2019 (*)
- Goldman Sachs,
Dissecting the Market Disconnect, Jul 2029 (*)
-
- U.S.
Economy:
- Testimony
of Chairman Jerome Powell, Federal Reserve Board's semiannual monetary
policy report to the Congress July 2019
(and Report)
(*)
- Davies, Will
the Fed Want More than ‘Insurance Cuts’ in Interest Rates?, Jul 2019
(*)
- Barro, Trump’s
Mercantilist Mess, Sep 2019 (*)
- Eichengreen, Trump’s
Cross of Gold, Aug 2019 (*)
- Frankel, The
Currency Manipulation Game, Aug 2019 (*)
- Eichengreen, Did
Dudley Do Right? Sep 2019 (*)
- Greene, Consumers
Cannot Carry the US Economy Forever, Sep 2019 (*)
- Henderson, A Recession
is Already Here in US Corporate Profits, Sep 2019 (*)
- Europe
and Eurozone:
- Various Authors, The
Future of the Eurozone, Sep 2019 (*)
- Davies, Mario
Draghi Prepared to Pass the Baton at the ECB, Aug 2019 (*)
- Sinn, The
ECB’s Beggar Thy Trump Strategy, Sep 2019 (*)
- Various Authors The
Faintest Hour (of the Brexit UK), July 2019 (*)
- Various Authors, The
Future of Europe, Project Syndicate, June 2019 (*)
- Sandbu, Eurozone
wakes up to ECB’s fiscal message as economy weakens, Sep 2019 (*)
- Arnold,
ECB
Prepared to Cut Rates Again, Says Its Chief Economist, Sep 2019 (*)
- Emerging
Markets:
- El-Erian,
Don’t Be Seduced by Emerging Markets Bulls or Bears, Mar 2019 (*)
- Various Authors, Trade,
Trump and China, Project Syndicate, May 2019 (*)
- Rudd, What’s
Next For China’s Political Economy? Aug 2019 (*)
- El-Erian,
Who
Lost Argentina, Again? Sep 2019 (*)
- Yongding, The
Renminbi’s Bid for Freedom, Sep 2019 (*)
- Ghosh, The
IMF’s Latest Victims, Aug 2019 (*)
- Grenville, Will
the IMF Finally Learn from Argentina? Sep 2019 (*)
- Rogoff, As
Populists Rise Latin American Economies Will Fall, Jun 2019 (*)
- Velasco, Saving
Venezuela, Aug 2019 (*)
- Inozemtsev Putin
Doesn’t Care About Economic Growth, Jun 2019 (*)
- Wolf, India
After Narendra Mody’s Electoral Earthquake, Jun
2019 (*)
- Schipani, Brazil:
Jair Bolsonaro Pushes Culture War Over Economic
Reform, Aug 2019 (*)
- Donaldson, Can
Ramaphosa Do It? May 2019 (*)
- Rachman, The
Saudi Oil Crisis, Volatile Leaders and the Risk of Escalation, Sep 2019
(*)
- Butler, Saudis
Ill-Prepared to Handle Oil Attack Disruption, Sep 2019 (*)
- Johnson,
Negative Yields Leave EM Investors with Nowhere to Hide, Sep 2019 (*)
- Gardner, Trump,
Erdogan and the Curious Case of US-Turkey Relations, Sep 2019 (*)
- Pillling, Africa
Poised ‘to Play a Major Role in the World’, Sep 2019 (*)
- FT Editorial Board, Indian
Economy Needs Revolution, Not Tinkering, Sep 2019 (*)
- Monetary
Policy Debates:
- Rogoff, How
Central Bank Independence Dies, May 2019 (*)
- Summers and Stansbury, Whither
Central Banking? Aug 2019 (*)
- Davies, Monetary
Policy for the Next Recession, Jul 2018 (*)
- Roubini, The
New Abnormal in Monetary Policy, Jul 2017 (*)
- Blanchard, Ten
Take Aways from The Rethinking Macro Policy:
Progress or Confusion? May 2015 (*)
- Goldman Sachs, Helicopter
Money, 2016 (*)
- Goldman Sachs, Negative
Interest Rates 101, 2016 (*)
- Farmer, Central
Banking’s Bankrupt Narrative, Sep 2019 (*)
- Hildebrand, Central
Banks Will Need New Tools to Combat the Next Downturn, Sep 2019 (*)
- Barscht, Bovin,
Fischer and Hildebrand, Dealing
with the Next Downturn, Aug 2019 (*)
- Tett, Central
Banks Are Rethinking Their Roles, Sep 2019 (*)
- Greene, Central
Banks Can No Longer Afford to Act in Isolation, Aug 2019 (*)
- Goldman Sachs, Central
Banks Independence, Aug 2019 (*)
The Global
Financial Crisis of 2008-09: Causes and Post Mortem; Productivity Slowdown,
Global Debt Threats, Secular Stagnation, Backlash Against Globalization,
Cartelization and the New Global Geopolitical Dis-Order
- Roubini and Mihm, Chapters Introduction, 1, 2, 10, Conclusion and
Outlook (*)
- Various Authors, Lehman
Lessons, Project Syndicate, Sep 2018 (*)
- Anteyomaso, Rosa and Roubini, Ten
Years After the Global Financial Crisis: Causes, Outcomes, Lessons
Learnt, Sep 2018 (*)
- Wolf, Saving
Liberal Democracy From the Extremes, Sep 2018
(*)
- Rogoff, Crash
Time, Sep 2018 (*)
- Various Authors, Ten
Years After the Financial Crisis: An Economic Parley, Sep 2018 (*)
- Davies, Have
They Really Fixed Financial Instability? Jul 2017 (*)
- Various Authors, The
Debt Threat, May 2018 (*)
- Blanchard and Summers, Rethinking
Stabilization Policies: Back to the Future Nov 2017 (*)
- Wolf, The
Tide of Globalization Is Turning, Sep 2016 (*)
- Goldman Sachs, The
Productivity Paradox, 2016 (*)
- Various Authors, In
Search of Productivity, May 2018 (*)
- Wolf, The
Economic Origins of the Populist Surge, Jun 2017 (*)
- Roubini, Populists
and Productivity, Jun 2016 (*)
- Roubini, Globalization
Political Fault Lines, Jul 2016 (*)
- Wolf, Capitalism
and Democracy, The Odd Couple, Sep 2017 (*)
- Various Authors, Project
Syndicate, Globalization RIP? 2016 (*)
- Wolf, Capitalism
and Democracy: The Strain Is Showing, Aug 2016 (*)
- Foroohar, (*)
- Tyson and Lund, America’s
Uneven Future of Work, Sep 2019 (*)
- Stiglitz, Is
Stakeholder Capitalism Really Back?, Aug 2019 (*)
- Summers, If
Business Roundtable CEOs Are Serious About Reform, Here Is What They Should
Do, Aug 2019 (*)
- Philippon The
Great Reversal, 2019
- Furman, Orszag
and Powell US Firms are Less Dynamic than they Used to Be, Apr 2019 (*)
- Various Authors, The
Cartelization of the World, Sep 2018 (*)
- Blankenburg and Kozul-Wright, The
Rentiers Are Here, Sep 2017 (*)
- Kurz, The
New Monopolists, Sept 2017 (*)
- Stiglitz and Summers, The
Debate on Secular Stagnation, Sep 2018 (*)
- Various Authors, Strongmen
at Bay? Aug 2018 (*)
- Various Authors, How
the West Was Lost, Jun 2018 (*)
- Rodrik, Should
We Worry About Income Gaps Within or Between Countries? Sep 2019 (*)
Other Background
Readings and Materials (not required readings):
I. 2. Current Account, External Debt and
Financial Crises: Emerging Market Economies and Advanced Economies
- Roubini
and Setser "Bailouts or Bail-ins?
Responding to Financial Crises in Emerging Economies", Chapter 2.
(*)
- Roubini and Backus, Lectures in
Macroeconomics, Chapter 1. (*)
- Krugman,Obstfeld and Melitz, Chapter 13
(*)
- Roubini and Mihm, Chapters 3, 4, 5 (*)
- Feldstein, Inconvenient
Truths About The US Trade Deficit, Apr 2017 (*)
- "The
Balance Sheet Approach to Financial Crises", by Mark Allen, Brad Setser, Christian Keller. Nouriel
Roubini and Christoph Rosenberg, IMF, Dec 2002
- Roubini
and Setser "The U.S. as a Net Debtor: The
Sustainability of the US External Imbalances", Sep 2004. (*)
- Borio, On the Centrality of the
Current Account in International Economics, BIS, Aug 2015 (*)
- Various Authors, The
Greenback’s Payback, Jul 2018 (*)
- Feldstein, Does
Addressing Bilateral Trade Imbalances Work? Jun 2017 (*)
- Velasco, Decoding
Currency Crises, Sep 2018 (*)
- Spence, Emerging
Vulnerabilities in Emerging Economies, Sep 2018 (*)
- Various Authors, Emerging
Markets Meltdown, Project Syndicate, Sep 2015 (*)
- Roach, The
Current Account Counts, Aug 2018 (*)
I. 3. International Indicators:
Exchange Rates and Interest Parity Conditions
II. EXCHANGE RATES AND
FINANCIAL CRISES
II. 1. Exchange Rates in the
Short-Run and Long Run
II. 2. Money, Interest Rates
and Exchange Rates
II. 3. Fixed Exchange Rates,
the Dynamics of Currency Crises and Crisis Contagion
- Roubini
and Setser "Bailouts or Bail-ins?
Responding to Financial Crises in Emerging Economies", Chapter 2.
(*)
- Roubini and Backus, Lectures in
Macroeconomics, Chapter 8 (*)
- Krugman, Obstfeld and
Melitz Chapter 18 (*)
- The Mexican Peso
Crisis", IMF, 1995; in case package (*)
- Roubini and Mihm, Chapter 5 (*)
- Frankel, The
Chimera of Currency Manipulation, Project Syndicate, June 1015 (*)
II. 4. Financial crises and their resolution in
EM and DM: The Bail-in vs. Bailout Debate, Unconventional Monetary Policies
(ZIRP, QE, CE, FG), Fiscal Policy and Sovereign Risk
- Roubini
and Setser "Bailouts or Bail-ins?
Responding to Financial Crises in Emerging Economies", Chapters 1,
6, 8. (*)
- Krugman, Obstfeld and
Melitz, Chapters 18, 21 and 22 (*)
- Roubini and Mihm, Chapters 6, 7, 10, Conclusion, Outlook (*)
- Roubini, Handout on
Bailouts vs Bail-Ins (to be sent by email)
- Rogoff, A
New Deal for Debt Overhangs? Project Syndicate, Aug 2015 (*)
- Dervis, A
Balance Sheet Approach to Fiscal Policy, Project Syndicate, Aug 2015
(*)
- Blanchard and Zettelmeyer, Will Rising
Interest Rates Lead to Fiscal Crises? Jul 2017 (*)
- Roubini, Ten
QE Questions, Feb 2013 (*)
- Roubini, Unconventional
Monetary Policy on Stilts, Apr 2016 (*)
- Davies, Monetary
Policy for the Next Recession,, Jul 2018 (*)
- Roubini, The
New Abnormal in Monetary Policy, Jul 2017 (*)
- Davies, Central
Bank Disputes: Yellen versus Borio, Sep 2017
(*)
- Blanchard, Ten
Take Aways from The Rethinking Macro Policy:
Progress or Confusion? May 2015 (*)
- Various Authors,
Monetary Myopia, Aug 2018, (*)
- Goldman Sachs, Negative
Interest Rates 101, 2016 (*)
- James, Money
for Nothing, Sep 2019 (*)
- Rogoff, The
Austerity Chronicles, April 2019 (*)
- Furman and Summers, Further
Thoughts on the Costs and Benefits of Deficits, Apr 2019 (*)
- Summers, Responding
to some of the critiques of our paper on secular stagnation and fiscal
policy, Mar 2019 (*)
III. CURENT POLICY ISSUES
III. 1 The Right Exchange Rate Regime for
Emerging Markets and Advanced Economies:
The Inconsistent Trinity Principle
Fixed versus Flexible Exchange Rates: Which is Best?
Currency Boards (Hong Kong, Bulgaria)
Dollarization (Panama, Ecuador, El Salvador)
Monetary Unions (European Monetary Union)
A Global Gurrency? Or a Gold Standard?
III. 2. Current Global Macro and Financial
Issues:
Global Economy: Return to Sustained Growth in
Developed Markets or a Slowdown Ahead? Is the Slowdown of Emerging Markets
Cyclical or Structural? Are Some of Them at Risk of Financial Crises?
US Economy: Return to High Potential Growth or Cyclical Expansion? Is
Potential Growth Lower? The Debate on Secular Stagnation
Fed and Other Central Banks’ Policies and Implications for the Bond and
Stock Market. Unconventional Monetary Policies in Developed Markets: Zero
Policy Rates, QE, Credit Easing (CE) and Forward Guidance. Should We Worry
About Inflation or Deflation?
Eurozone and Future the European Monetary Union: Will It Survive? The Return
of Sovereign Risk in Advanced Economies.
Japan's economic prospects: Will Abenomics Work or Fail?
China: Soft or Hard or Bumpy Landing? Can China Rebalance in Time?
Prospects and Risks for Emerging Market Economies in the Short and Long Run
Geo-Political Risks and Oil Prices; Why Have Markets So Far Ignored Rising
Geo-Political Risks? What are the Prospects for Oil Prices?
Prospects for Major Currencies: Euro, Dollar, Yen, RMB and Other Currencies
III.3. Open Issues in the
International Financial System
The 2008-2009 Global Financial Crisis and Its
Aftermath: Have We Fixed the System? Will Crises Occur Again and When?
Reform of the Regime of Supervision and Regulation of the Financial System in a
World of Financial Globalization
Is there a Risk of a Populist Backlash Against Globalization? Technology,
AI, Inequality and the Future of Work
Are We in a G-20 or a G-0 World? Geo-Political Risks in the Global Economy
Asset Bubbles and Monetary Policy: The Role of Macro-Prudential Supervision
Versus Policy Rates In Addressing Financial Stability
Systemic Risk and Financial Crises: Asset and Credit Booms and Busts.
Housing Bubbles and Busts: Still Ongoing and Where? Blockchain
and Crypto-Currencies: A Bubble or the Future of Money?
Capital Mobility, Hot Money and Capital Controls: Return to Restrictions on
Capital Flows and FDI?
The Emergence of the BRICS (Brazil, Russia, India, China, South Africa) in
the Global Economy: Over-Hyped or Not? “Next Eleven”?
- Roubini
and Setser "Bailouts or Bail-ins?
Responding to Financial Crises in Emerging Economies", Chapters 1 and
9 (*)
- Krugman, Obstfeld and Melitz, Chapters 18, 21-22 (*)
- Roubini and Mihm, Chapters 8,
9
- Various Authors, Lehman
Lessons, Project Syndicate, Sep 2018 (*)
- Antetomaso, Rosa and Roubini, Ten
Years After the Global Financial Crisis: Causes, Outcomes, Lessons Learnt,
Sep 2018 (*)
- Wolf, Saving
Liberal Democracy From the Extremes, Sep 2018
(*)
- Various Authors, Ten Years After the Financial Crisis:
An Economic Parley, Sep 2018 (*)
- Eichengreen, The
Promise and Peril of Macroprudential Policy Project Syndicate, Aug
2015 (*)
- Boskin, The
Bloom is Off the BRICS, Project Syndicate, June 2015 (*)
- Goldman Sachs, Dreaming
With BRICs: The Path to 2050 (Brazil, Russia,
India, China), October 2003
- O’Neill, The
Next Eleven and the World Economy, Apr 2018 (*)
- Paul, No
Robo Apocalypse, Jul 2018 (*)
- Bughin and Van Zeebroeck,
The Promise and Pitfall of AI, Sep 2018 (*)
- Citigroup Technology
at Work, The Future of Innovation and Work, Feb 2015
- Roubini, Rise
of The Machines: Downfall of the Economy?, Dec 2014 (*)
- Spence, Automation,
Productivity, and Growth, Project Syndicate, Aug 2015 (*)
- Benioff, On
The Cusp Of An AI Revolution, Sep 2016 (*)
- Tyson and Lund, America’s
Uneven Future of Work, Sep 2019 (*)
- Rodrik, Should
We Worry About Income Gaps Within or Between Countries? Sep 2019 (*)
- Wolf, The
Economic Origins of the Populist Surge, Jun 2017 (*)
- Roubini, Whistling
Past the Geopolitical Graveyard, May 2017 (*)
- Roubini, Globalization
Political Fault Lines, Jul 2016 (*)
- Rogoff, Crypto-Fool’s
Gold, Nov 2017 (*)
- Roubini Blockchain’s
Broken Promises, Jan 2018 (*)
- Eichengreen, The
Stable-Coin Myth, Sep 2018 (*)
- Roubini and Byrne, The
Blockchain Pipe Dream, Mar 2018 (*)
- Roubini
Initial Coin Scams, May 2018 (*)
- Roubini, Why
Central Bank Digital Currencies Will Destroy Cryptocurrencies, Nov 2918 (*)