« Mr Kristol, you get a C in economics! | Main | My early life as a political scientist »

February 26, 2008

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c891753ef00e5508287138833

Listed below are links to weblogs that reference Dealing with capital flows:

» Xanax withdrawal symptoms. from Order xanax online.
Buy xanax. Cheap xanax. Xanax prescription. Buy xanax online. [Read More]

Comments

Per Kurowski

When Rodrik and Subramanian say that one should not be “too optimistic about the potential of prudential regulation to stem excessive risk-taking” they are more right than they have ever imagined in their wildest dreams or wildest hypothesis.

In fact, it was precisely the running away from the risks, forced upon the financial market by the regulators through their minimum capital requirements for the banks and that was based exclusively on risk-assessments carried out by the regulator’s own outsourced risk overseers, the credit rating agencies that set us up to all what is currently happening.

But I must acknowledge that the risk that is present when everyone follows down the same path of knowledge is not really the typical risk that PhDs think about.

Per Kurowski

Having for more than thirty years argued about the dangers for the bathtubs of a small economies to lie completely open next to the global financial oceans exposed to their tsunamis I could not but fully agree with the general direction indicated by Dani Rodrik Arvind Subramanian in their “Why we need to curb global flows of capital”.

Having said that I would much rather use the term “slow” than “curb” because it is the speed of how the financial resources move that causes the most damages.

jb

So what are the arguments against a Tobin Tax?

th

I am surprised by the extent to which Dani wants to emphasise the role of capital flows in the current US crisis.

If we assume the bubble has been in housing and credit markets (hard to argue US equities have been in a recent bubble given valuations) then foreign purchases would have needed to play a significant role in lowering US interest rates. While there is no doubt something to that, other factors can explain low US bond yields (the 'conundrum' a couple of years back) which may have been more significant than foreign purchases. (See Jonathan Wright's work).

Other significant factors in the current crisis (e.g. mis-selling, the role of the credit rating agencies etc...) do not seem related to capital flows.

A new model of financial globalization may be needed, but I don't see that the recent US crisis is strong supporting evidence.

SteveB

A great article. You state that an increase in East Asian currencies should be done unilaterally, if necessary. How in practice could our nation accomplish that?

Eco

Dani,

I am simpathetic to your and Arvind's thesis, but I must warn you that it will be misread and potentially feed into very bad economic policies down South, where those fond of capital levies are stopped short by the threat of capital outflows (e.g. in Brazil).

It happened before. Your message on the benefits of a competitive exchange rate was recently read in Brazil as in favor of lax monetary policies, even in face of very expansionary fiscal policies. The point you made that fiscal policies could contribute to an undervalued currency was completely lost among Brazilian economists of the left (whose every waking thought calls for a renewed struggle to avoid letting the economy plunge into a new Great Depression).

nicholas shaxson

Generally good article, as far as it goes, but a criticism of certain aspects of it is contained here: http://taxjustice.blogspot.com/2008/02/capital-flows-be-braver-and-dont-forget.html The blog ends like this: "In summary, we like Rodrik's and Subramanian's latest piece. But we urge its authors to factor secrecy more centrally into their analyses, and to be braver about what might now be possible." Comments welcome in return.

robertdfeinman

Someone reads FT and then writes semi-literate emails?

This would make an interesting subject for study by a sociologist or education philosopher. Are schools turning out people who can read, but not write?

Mark Koyama

There is an good response to the FT piece, by my co-blogger here
http://oxonomics.typepad.com/oxonomics/2008/02/in-defence-of-c.html#more

The post ends by asking: 'doesn’t citing capital flows as causative in episodes of turmoil overlook the microeconomic decisions that ultimately bring these phenomena about?'

Butter

The article would make someone think that economists have one arm.

"Financial globalisation has not generated increased investment or higher growth in emerging markets." - How then do you respond to the lead article by Mr. Henry in this quarter's JEL? Have you been making the same mistakes he warns us of when running your data?

"Countries that have grown most rapidly have been those that rely least on capital inflows." -Probably because they have a more developed domestic financial sector.

"Nor has financial globalisation led to better smoothing of consumption or reduced volatility." - The enhanced ability to borrow must in some way enhance one's ability to smooth consumption. Volitility is a real problem and one worth having an intelligent discussion on, which you seem, at times, capable of. But just to play devil's advocate, I think that most African countries would be happy to have a fiancial crisis because it would imply that someone had bothered to invest there in the first place.

"If you want to make an evidence-based case for financial globalisation today, you are forced to resort to indirect and speculative arguments." - See neoclassical economic theory and the article referenced above.

Dani Rodrik

Butter (I know a cat by that name)--

Don't take my word for it. Listen to Ken Rogoff et al. from their paper on "Financial Globalization: A Reappraisal":

"In Table 3A, we provide an overview of the empirical literature that aims to establish a causal relationship between financial openness and growth. While some of these studies conclude that there are growth benefits associated with international financial integration, the majority of them tend to find no effect or a mixed effect (results that are not robust across alternative specifications) for developing countries. This confirms our claim that, if financial integration has a positive effect on growth, it is apparently not robust, especially once the usual determinants of growth are controlled for."

Emmanuel

Dr. Rodrik, I posted a reply to your article together with Dr. Subramanian on Martin Wolf's blog which featured this discussion. Though I am skeptical of the proposals you have outlined, I hope to have done so in a civil and well-informed way :-)

http://blogs.ft.com/wolfforum/2008/02/we-must-curb-international-flows-of-capital/#comments

crack

Recently the online game Runescape instituted a version of capital curbs. It is trying to combat the exchanging of real world money for runescape world goods. I think such a community would be a great place to experiment with various economic regulation. Right now they have a system that effectively limits the opportunities for trading real world items for runescape world items, but this has also severely hampered the runescape economy. This despite the fact that they have a near perfectly efficient market at their disposal.

Again, I realize its not exactly consequential, and the game is run as a for profit enterprise so I don't think they should be offered charity. I still think it offers a great chance for studying regulations and markets if some one of enough stature approaches them.

timberland  boots

Great work,webmaster,nice design!

nike sb

Beautiful site!

cheap jordan shoes

Excellent site. It was pleasant to me.

cheap jordan shoes

Excellent site. It was pleasant to me.

soft cialis

I really like this blog, you are very good making them. I say that the issue discussed in this blog is quite interesting and of high quality.

Viagra Online

hello friend congratulation you did a great work with this post about Dealing with capital flows!! thanks for sharing

generic viagra

That capitalism is great bro! keep it up.

generic viagra

Tdo this excellent, but the only question that anger is declining every day?

generic viagra

Hello
nice post. I have been wondering about this topic,so thanks for sharing. I will certainly be subscribing to your blog.

 Viagra kaufen

You have a very good blog that the main thing a lot of interesting and useful!

Comprar Viagra


Your blog is very interesting and I like to read it!

Inversiones financieras

Like your article very much!!!
Keep it up..

rolex watches

This is clearly replica watches the job for our legal fraternity to engage the establishment to necessary breitling watches steps by filing petitions in various courts. IF one fails another should be cartier watches filed taking every one to task. It is rolex watches useless to suggest ways and means to solve tag heuer watches the day to day problem to well paid employees tissot watches of government controlled establishments. Only active omega watches judiciary will resolve this problem.
http://www.watchvisa.com
http://www.watchvisa.com/breitling-watches.html
http://www.watchvisa.com/cartier-watches.html

rado watches

Why is everyone just montblanc watches willing to accept power cuts? Don't you think that patek philippe watches having continious power is your right? If people aren't going to demand rado watches 24X7 power, don't expect anything zenith watches to change. The government needs to look at other sources parmigiani watches of power generation. The only solution is more power panerai watches production. Nothing less.
http://www.watchvisa.com/montblanc-watches.html
http://www.watchvisa.com/patek_philippe-watches.html
http://www.watchvisa.com/rado-watches.html
http://www.watchvisa.com/tudor-watches.html

bvlgari watches

They should take up building BVLGARI Watches dams for power generation. We should FRANCK MULLER watches learn from china. They have the world's largest dam for power CHANEL Watches production, it alone produces 22,000 MW of LONGINES Watch power. So, unless the government opens up the economy more for iwc watches foreign investors, this power cut problem is a life long disease every hublot-watches india will need to face.
http://www.watchvisa.com/bvlgari-watches.html
http://www.watchvisa.com/chanel-watches.html
http://www.watchvisa.com/franck_muller-watches.html

Supra Skytop Black Purple

Tdo this excellent, but the only question that anger is declining every day?

rolex watches

People usually say :"Seeing is believing." http://www.tt88times.com
Each attempt has a corresponding gain, in part or obvious, or vague. At least we have the kind of satisfaction After I bought this watch ,in a sense,it means a great deal to me. http://www.fashionhairfu.com

rolex watches

People usually say :"Seeing is believing." http://www.tt88times.com
Each attempt has a corresponding gain, in part or obvious, or vague. At least we have the kind of satisfaction After I bought this watch ,in a sense,it means a great deal to me. http://www.fashionhairfu.com

Nike Air Jordan

The good news, thank you!

nike air jordan

I'm surprised your so good thoughts. I'd like to become your good friend. Before I believe a good pair of shoes as my faithful friend, and so i always find the the most suitable and favorite shoes, if you agree with my view, you can look at my site

nike air jordan

I'm surprised your so good thoughts. I'd like to become your good friend. Before I believe a good pair of shoes as my faithful friend, and so i always find the the most suitable and favorite shoes, if you agree with my view, you can look at my site.

vibram five fingers

It's great to hear from you and see what you've been up to. In your blog I feel your enthusiasm for life. thank you.

coach handbags

Today, with the development of science and technology, the internet is beginning to play a more and more important role in our life. More and more people are staring to use the intent. Thanks to the intent which make me lives so wonderful.

coach sale

Someone who makes you laugh until you can't stop; Someone who makes you believe that there really is good in the world. Someone who convinces you that there really is an unlocked door just waiting for you to open it. This is Forever Friendship.

lachou

I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people, http://www.jerseysky.com it is the sorrow of many democracy, I like the western and northern state policy.
http://www.cheapsaleing.com

lachou

I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people, http://www.jerseysky.com it is the sorrow of many democracy, I like the western and northern state policy.
http://www.cheapsaleing.com
http://www.nikeairmaxshoe.ocm

air jordans

Morality is the custom of one's country; cannibalism is moral in a cannibal country.Do you understand?

jordan shoes

I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

jordan shoes

I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

jordan shoes for sale

I think this is a great post. One thing that I find the most helpful is number five. Sometimes when I write, I just let the flow of the words and information come out so much that I loose the purpose. It’s only after editing when I realize what I’ve done. There’s defiantly a lot of great tips here I’m going to try to be more aware of.

jordan shoes

I’ve seen progression in every post. Your newer posts are simply wonderful compared to your posts in the past. Keep up the good work!

ugg caspia

I read so many different articles.butI like your articles,and hope you will write more,and better.i will assit to reading them,thanks.

Nike Air Max

This is good article. A friend without faults will never be found.

Dubai Sale

Dubai is a financial hub as well as a focal point to accelerate global imports and exports. Dubai, in actual fact, promotes businesses and trading to a great level. Whether you are a simple shopper, business giant or a small & medium enterprise owner, Dubai is a city for you.

Account Deleted

We are pleased to state that we have been professionally thriving in our efforts to assist scholars accomplish high standards. Read testimonials from our clients and returning customers.

Essay Writing

Account Deleted

Savers point a Dubai friendly e-portal owned by Saverspoint.com, has been an active online guide for residents, tourists and promotions of Dubai.

Offers in Dubai

3Dhomemovies

Even if I don't always agree with your posts, I always appreciate reading them. Hotels in Columbus

oyunlar

I seem to remember a little document called Constitution, it talks about pursuit of happiness and Human Rights for Americans and democracy in USA. orjin krem I don't remember it postulated pursuit of Globaloonie, Free Trade, Supernation Federation run by Jeffry Sachses of this world.

Account Deleted

This case was written as an exam case for first-year course, Global Economies and Markets.

Property Investment USA
Property Management Firms

Account Deleted

Nice post. This post is different from what I read on most blog. And it have so many valuable things to learn.Thank you for your sharing!
event management

Account Deleted

Nice information provided here which is very useful to everyone...I am not a huge fan of this side, there do seem to be a lot these days...
laptops in lahore

Account Deleted

Raf
raf

Thanks to you ...

Account Deleted

Awesome site! You’ve some quite interesting posts.. Nice background too haha. Keep up the nice work, Ill make sure to come across and find out really your page!
Vienna Hotels

Account Deleted

Raf
raf

Good Job ...

Account Deleted

Many places and centers offer business and trade promotions to both buyers and supplier.What about the differences in skill intensities across industries? The job losses in the relatively unskilled-labor intensive battery industry should have little effect on the relatively skilled-labor intensive machinery
sexshop
sexyshop
sexshop online

Teslapow

I think Cheney's been consuming an excellent present much higher than a fifth. How to Build a Shed

Account Deleted


Awesome, Very interesting issue that after a very successful. Nicely written article good work ! Thanks for the great piece of sharing. Enjoy to read your write . Thanks a lot
Creating History Together With ArenaBetting Piala Eropa 2012 http://seotoolinfo.com/2012/06/creating-history-creating-history-together-with-arenabetting-piala-eropa-2012/
Agenliga Sebagai Agen Bola Online Untuk Euro 2012 http://seotoolinfo.com/2012/06/agenliga-agenliga-com-sebagai-agen-bola-online-untuk-euro-2012/

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment