Dirk Niepelt

In a CEPR discussion paper, Elhanan Helpman concludes that trade played an appreciable role in increasing wage inequality, but that its cumulative effect has been modest, and that globalization does not explain the preponderance of the rise in wage inequality within countries.

In the NZZ, George Sheldon questions the efficiency and usefulness of taxes levied on immigrants. He argues that firms rather than immigrants would likely end up paying and that a tax levied at the firm level would thus be more efficient. Moreover, he points out that an immigration tax might reduce incentives to emigrate.

On his blog, Tyler Cowen summarizes the economics in Theodor Herzl’s “The Jewish State.” Herzl favored selling European homes and businesses of departing Jews and buying land in Argentina or Palestine, at a profit, through a land acquisition company incorporated in London. Poor Jews from Romania and Russia would supply cheap labor and be rewarded by their own houses eventually. Herzl favored short working weeks, a democratic monarchy or the aristocratic republic of Renaissance Venice....

On his blog, John Cochrane reports about a Hoover panel including him, Charles Plosser, and John Taylor. Cochrane focuses on the liability side. He favors a large quantity of (possibly interest bearing) reserves for financial stability reasons. Plosser focuses on the asset side and is worried about credit allocation by the Fed, for political economy reasons. Taylor favors a small balance sheet. Cochrane also talks about reserves for everyone, but issued by the Treasury.

In the FT, Vanessa Houlder reports about the tax evasion business. The new regulatory environment has led to portfolio adjustments and new types of behavior, and it exposes vast differences in enforcement across countries: Diamonds in vaults rather than financial assets. Trusts in South Dakota rather than anonymous bank accounts. Moving to a different country rather than just shifting assets. FATCA versus the Common Reporting Standard. The article also links to an article by Kara Scannell...

The Eurogroup has approved short-term debt measures for Greece. The explanations on the ESM website are not very precise. A chronology of the Greek debt crisis and the European institutions.

On his blog, James Hamilton summarizes a Bank of England working paper by Lukasz Rachel and Thomas Smith on the determinants of low real interest rates.

On Alt-M, Larry White discusses three aspects of the Indian “demonetization” experiment. The transition from old notes blocks “honest” currency transactions, reduces income, and harms the poor who don’t have access to alternative means of payment. Because not all old notes will be redeemed, the transition into new notes will generate seignorage revenue for the government on the order of USD 40 billion, according to White’s estimates. Not all groups or industries get access to the new...

NZZ, November 29, 2016. HTML, PDF. Central banks are increasingly interested in employing blockchain technologies, and they should be. The blockchain threatens the intermediation business. Central banks encounter the blockchain in the form of new krypto currencies, and as the technology underlying new clearing and settlement systems. Krypto currencies bear the risk of “dollarization,” but in the major currency areas this risk is still small. New clearing and settlement systems benefit...

In the Welt, Karsten Seibel reports about the Bundesbank pondering over digital money. The Riksbank does the same.