Dirk Niepelt

The Economist reports about the “American Redoubt” in the U.S. North West. Water, land, game, guns and bounty hunters.

In the FT, Amy Kuzmin reports that after debating for nearly a decade, India’s parliament has approved a long-awaited overhaul of the country’s fragmented tax system … The bill … will amend the constitution to permit replacing the current patchwork of national, state and local levies with a single, unified value added tax system. He expects the reform “to create a genuine single market” and hails it as “one of the most significant reforms to the Indian economy since liberalisation began...

In the Journal of Economic Perspectives, Tyler Cowen and Alex Tabarrok question whether NSF funds are allocated efficiently. They write: First, a key question is not whether NSF funding is justified relative to laissez-faire, but rather, what is the marginal value of NSF funding given already existing government and nongovernment support for economic research? Second, we consider whether NSF funding might more productively be shifted in various directions that remain within the legal and...

In an NBER working paper entitled “The Scandinavian Fantasy: The Sources of Intergenerational Mobility in Denmark and the U.S.,” Rasmus Landersø and James J. Heckman argue that [m]easured by income mobility, Denmark is a more mobile society, but not when measured by educational mobility. … Greater Danish income mobility is largely a consequence of redistribution … policies. While Danish social policies for children produce more favorable cognitive test scores for disadvantaged children,...

In a recent NBER working paper, Luca Benati, Robert E. Lucas, Jr., Juan Pablo Nicolini, and Warren Weber report estimates of long-term money demand. They write: [U]sing annual data on money (M1, for us), nominal GDP, and short term interest rates from 31 countries over periods that range in some cases to over 100 years. We find remarkable stability in long run money demand behavior in many countries, and an equally surprising sameness across different countries. In some cases of...

In the FT, Rachel Sanderson and Martin Arnold report that the board of Monte dei Paschi is about to approve a recapitalization led by JPMorgan in order to avoid the alternative, a bailin according to European rules. Other news sources reported that the European Commission had made it clear that it rejected the proposal by Italy’s prime minister (supported by the ECB president) to change the rules and let the Italian government finance the recapitalization. EU finance ministers and Angela...

The Independent Evaluation Office of the International Monetary Fund released a critical report on IMF supported policies in Greece, Ireland and Portugal. It questions the legitimacy of certain decisions. The executive summary states that [t]he IMF’s pre-crisis surveillance mostly identified the right issues but did not foresee the magnitude of the risks … missed the build-up of banking system risks … shared the widely-held “Europe is different” mindset … Following the onset of the...

On his blog, Lukas Hässig suggests that a leading Swiss banker might have exploited insider information. The comments to the post are even more revealing than the article.

In a paper, Larry Ball argues that inadequate collateral and lack of legal authority were not the reasons that the Fed let Lehman fail. … … the primary decision maker was Treasury Secretary Henry Paulson–even though he had no legal authority over the Fed’s lending decisions. … evidence supports the common theory that Paulson was influenced by the strong political opposition to financial rescues. … Another factor is that both Paulson and Fed officials, although worried about the effects of...

Adjusted for GDP, The Economist’s Big Mac Index suggests that the Swiss Franc is 9 percent over valued relative to the US Dollar while the Euro is 17 percent under valued.