Category Archives: Economics

What is helicopter money?

The possibility that central banks might resort to extreme monetary measures, including helicopter money, is much debated in monetary policy circles. But what is “helicopter money”? * In normal times, central banks in developed countries try to control inflation and the level of economic activity by controlling the short term interest rate. But since the… Continue Reading

Key finance concepts: exchange rates

Exchange rates are among the most important macrofinancial prices, influencing many aspects of an economy. This post introduces exchange rates and their importance for macroeconomic adjustment * What is an exchange rate? An exchange rate is a ratio, the price of one currency relative to another. All prices are ratios, but normally they’re expressed in… Continue Reading

Some modestly good news in the energy world

The BP Statistical Review of World Energy was published last week. It contains two pieces of particularly encouraging information. First. in 2015 coal demand fell sharply. Second, carbon emissions from energy rose at the slowest rate for 25 years (other than the immediate aftermath of the financial crisis). The report is summarised by BP’s group chief… Continue Reading

Rising monopoly power may partly explain US inequality and productivity slowdown

A new theme in explaining slow growth and productivity and rising inequality: greater monopoly power in the US. * I’ve been thinking about my forthcoming teaching for the Cambridge Advanced Leadership Programme in June, which is always an interesting session, with a lively and challenging group of delegates from across the world. I try to… Continue Reading

IMF study: corporate profitability positively associated with women in senior positions

On International Women’s Day it’s nice to report some more interesting research from the International Monetary Fund (IMF), this time showing that gender diversity in senior corporate positions is positively associated with corporate profitability. * The IMF authors (Lone Christiansen, Huidan Lin, Joana Pereira, Petia Topalova and Rima Turk) studied the gender diversity and profitability… Continue Reading

Some mostly good news on gender equality

Women’s access to health, education, economic opportunity and political power have been improving but the picture is very uneven geographically. Although most indicators improve with economic development the variation shows that a lot can be done even before countries reach western living standards. * Those who think of the International Monetary Fund (IMF) as mainly… Continue Reading

Markets versus economics

The turbulent financial markets in early 2016 can be seen as a battle between two groups of ideas – the economists see little reason for sudden concern but the markets are worried about hidden risks * Global stock markets performed worse in the first few weeks of 2016 than in living memory. Since markets are supposed… Continue Reading

The IMF includes the RMB in the SDR basket

On 30 November 2015 the IMF voted to include the RMB (the Chinese “people’s currency” denominated in yuan) in the basket of currencies it uses to calculate the value of the Special Drawing Rights, from October 2016. This is largely symbolic but should encourage further international financial reform in China. * What does it actually… Continue Reading