Raghuram Rajan was one of the few economists who warned of the global financial crisis before it hit. Now, as the world struggles to recover, it's tempting to blame what happened on just a few greedy ...bankers who took irrational risks and left the rest of us to foot the bill. InFault Lines, Rajan argues that serious flaws in the economy are also to blame, and warns that a potentially more devastating crisis awaits us if they aren't fixed.
Rajan shows how the individual choices that collectively brought about the economic meltdown--made by bankers, government officials, and ordinary homeowners--were rational responses to a flawed global financial order in which the incentives to take on risk are incredibly out of step with the dangers those risks pose. He traces the deepening fault lines in a world overly dependent on the indebted American consumer to power global economic growth and stave off global downturns. He exposes a system where America's growing inequality and thin social safety net create tremendous political pressure to encourage easy credit and keep job creation robust, no matter what the consequences to the economy's long-term health; and where the U.S. financial sector, with its skewed incentives, is the critical but unstable link between an overstimulated America and an underconsuming world.
InFault Lines, Rajan demonstrates how unequal access to education and health care in the United States puts us all in deeper financial peril, even as the economic choices of countries like Germany, Japan, and China place an undue burden on America to get its policies right. He outlines the hard choices we need to make to ensure a more stable world economy and restore lasting prosperity.
Using an extended Kaya decomposition, we identify the drivers of long-run CO2 emissions since 1800 for Denmark, France, Germany, Italy, the Netherlands, Portugal, Spain, Sweden, the UK, the United ...States, Canada and Japan. By considering biomass and carbon-free energy sources along with fossil fuels, we are able to shed light on the effects of past and present energy transitions on CO2 emissions. We find that at low levels of income per capita, fuel switching from biomass to fossil fuels is the main contributing factor to emissions growth. As income levels increase, scale effects, especially income effects, become dominant. Technological change proves to be the main offsetting factor in the long run. Particularly in the last decades, technological change and fuel switching have become important contributors to the decrease in emissions in Europe. Our results also contrast the differentiated historical paths of CO2 emissions taken by these countries.
•We study the long-run drivers of CO2 emissions in twelve developed economies.•We use novel data and apply an extended Kaya decomposition.•At low levels of income per capita, fuel switching is usually the main CO2 driver.•Scale effects are most important at higher levels of income and in the long-run.•Technological change is the main offsetting factor in the long-run.
Partisan conflict and policy uncertainty are frequently invoked as factors contributing to slow post-crisis recoveries. Recent events in Europe provide ample evidence that the political aftershocks ...of financial crises can be severe. In this paper we study the political fall-out from systemic financial crises over the past 140years. We construct a new long-run dataset covering 20 advanced economies and more than 800 general elections. Our key finding is that policy uncertainty rises strongly after financial crises as government majorities shrink and polarization rises. After a crisis, voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis. Importantly, we do not observe similar political dynamics in normal recessions or after severe macroeconomic shocks that are not financial in nature.
This paper provides an overview of the long-term impacts of the Columbian Exchange—that is, the exchange of diseases, ideas, food crops, technologies, populations, and cultures between the New World ...and the Old World after Christopher Columbus' voyage to the Americas in 1492. We focus on the aspects of the exchange that have been most neglected by economic studies; namely the transfer of diseases, food crops, and knowledge between the two Worlds. We pay particular attention to the effects of the exchange on the Old World.
Power to the people Kander, Astrid; Malanima, Paolo; Warde, Paul
2014., 20140105, 2014, 2014-01-05, 20130101, 2013, Letnik:
46
eBook, Book
Power to the Peopleexamines the varied but interconnected relationships between energy consumption and economic development in Europe over the last five centuries. It describes how the traditional ...energy economy of medieval and early modern Europe was marked by stable or falling per capita energy consumption, and how the First Industrial Revolution in the eighteenth century--fueled by coal and steam engines--redrew the economic, social, and geopolitical map of Europe and the world. The Second Industrial Revolution continued this energy expansion and social transformation through the use of oil and electricity, but after 1970 Europe entered a new stage in which energy consumption has stabilized. This book challenges the view that the outsourcing of heavy industry overseas is the cause, arguing that a Third Industrial Revolution driven by new information and communication technologies has played a major stabilizing role.
Power to the Peopleoffers new perspectives on the challenges posed today by climate change and peak oil, demonstrating that although the path of modern economic development has vastly increased our energy use, it has not been a story of ever-rising and continuous consumption. The book sheds light on the often lengthy and complex changes needed for new energy systems to emerge, the role of energy resources in economic growth, and the importance of energy efficiency in promoting growth and reducing future energy demand.
News implied volatility and disaster concerns Manela, Asaf; Moreira, Alan
Journal of financial economics,
January 2017, 2017-01-00, 20170101, Letnik:
123, Številka:
1
Journal Article
Recenzirano
We construct a text-based measure of uncertainty starting in 1890 using front-page articles of the Wall Street Journal. News implied volatility (NVIX) peaks during stock market crashes, times of ...policy-related uncertainty, world wars, and financial crises. In US postwar data, periods when NVIX is high are followed by periods of above average stock returns, even after controlling for contemporaneous and forward-looking measures of stock market volatility. News coverage related to wars and government policy explains most of the time variation in risk premia our measure identifies. Over the longer 1890–2009 sample that includes the Great Depression and two world wars, high NVIX predicts high future returns in normal times and rises just before transitions into economic disasters. The evidence is consistent with recent theories emphasizing time variation in rare disaster risk as a source of aggregate asset prices fluctuations.
The “New History of Capitalism” grounds the rise of industrial capitalism on the production of raw cotton by American slaves. Recent works include Sven Beckert's Empire of Cotton, Walter Johnson's ...River of Dark Dreams, and Edward Baptist's The Half Has Never Been Told. All three authors mishandle historical evidence and mis-characterize important events in ways that affect their major interpretations on the nature of slavery, the workings of plantations, the importance of cotton and slavery in the broader economy, and the sources of the Industrial Revolution and world development.
Increasing markups have recently gained prominence as a leading explanation for the increasing share of income going to capital since the 1980s. However, the existing analysis has been limited to the ...United States, covers only short periods, and generally does not control for potentially important confounders. Constructing data for the share of income going to capital and markups based on Tobin's q over the period 1870–2018 for 21 advanced countries, this research examines the ability of markups to explain the movements of income shares and the tendency for factor shares to converge toward constants in the long run. We find strong support for the markup hypothesis.
Abstract
Using newly constructed spatially disaggregated data for London from 1801 to 1921, we show that the invention of the steam railway led to the first large-scale separation of workplace and ...residence. We show that a class of quantitative urban models is remarkably successful in explaining this reorganization of economic activity. We structurally estimate one of the models in this class and find substantial agglomeration forces in both production and residence. In counterfactuals, we find that removing the whole railway network reduces the population and the value of land and buildings in London by up to 51.5% and 53.3% respectively, and decreases net commuting into the historical center of London by more than 300,000 workers.
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