The Shifts and the Shocks

What we’ve learned – and have still to learn – from the financial crisis

The Shifts and the Shocks

In The Shifts and the Shocks, Martin Wolf - one of the world's most influential economic commentators and author of Why Globalization Works - presents his controversial and highly original analysis of the economic course of the last seven years There have been many books that have sought to explain the causes and courses of the financial and economic crisis which began in 2007-8. The Shifts and the Shocks is not another detailed history of the crisis, but the most persuasive and complete account yet published of what the crisis should teach us us about modern economies and economics. The book identifies the origin of the crisis in the complex interaction between globalization, hugely destabilizing global imbalances and our dangerously fragile financial system. In the eurozone, these sources of instability were multiplied by the tragically defective architecture of the monetary union. It also shows how much of the orthodoxy that shaped monetary and financial policy before the crisis occurred was complacent and wrong. In doing so, it mercilessly reveals the failures of the financial, political and intellectual elites who ran the system. The book also examines what has been done to reform the financial and monetary systems since the worst of the crisis passed. 'Are we now on a sustainable course?' Wolf asks. 'The answer is no.' He explains with great clarity why 'further crises seem certain' and why the management of the eurozone in particular 'guarantees a huge political crisis at some point in the future.' Wolf provides far more ambitious and comprehensive plans for reform than any currently being implemented. Written with all the intellectual command and trenchant judgement that have made Martin Wolf one of the world's most influential economic commentators, The Shifts and the Shocks matches impressive analysis with no-holds-barred criticism and persuasive prescription for a more stable future. It is a book no-one with an interest in global affairs will want to neglect. MARTIN WOLF is Associate Editor and Chief Economics Commentator at the Financial Times, London. He is the recipient of many awards for financial journalism, for which he was also made a CBE in 2000. His previous books include Why Globalization Works and Fixing Global Finance. "We have been inundated with books about the 'financial' aspects of the crisis. There have also been many books about specific institutions or memoirs by retired policy-makers. We need something different. There are two dimensions of the crisis that have received surprisingly little treatment. One is the link between developments in the macro-economy and the behaviour of the financial sector. The other is the global dimension of the crisis. Both these lie at the heart of Martin Wolf's analysis of the causes of the crisis and of his proposals to reduce the risk of another crisis. For these two reasons this is an important book that will be influential. Most important of all, it is in my view the right analysis and remedy" Mervyn King "To think straight about the causes and solutions of the financial crisis we must reject orthodox assumptions that more finance and global financial integration are limitlessly beneficial. The Shifts and the Shocks does just that, providing an intellectually sparkling and vital account of why the crisis occurred, and of the radical reforms needed if we are to avoid a future repeat" Adair Turner "Martin Wolf is unsurpassed in the world of economic journalists. His superb book may be the best of all those spawned by the Great Recession. It is analytical and rigorous without ever succumbing to fatalism or complacency" Lawrence Summers

The Shifts and the Shocks

What We've Learned--and Have Still to Learn--from the Financial Crisis

The Shifts and the Shocks

From the chief economic commentator for the Financial Times—a brilliant tour d’horizon of the new global economy There have been many books that have sought to explain the causes and courses of the financial and economic crisis that began in 2007. The Shifts and the Shocks is not another detailed history of the crisis but is the most persuasive and complete account yet published of what the crisis should teach us about modern economies and econom­ics. Written with all the intellectual command and trenchant judgment that have made Martin Wolf one of the world’s most influential economic com­mentators, The Shifts and the Shocks matches impressive analysis with no-holds-barred criti­cism and persuasive prescription for a more stable future. It is a book no one with an interest in global affairs will want to neglect.

The Best Business Writing 2013

The Best Business Writing 2013

An anthology Malcolm Gladwell has called "riveting and indispensable," The Best Business Writing is a far-ranging survey of business's dynamic relationship with politics, culture, and life. This year's selections include John Markoff (New York Times) on innovations in robot technology and the decline of the factory worker; Evgeny Morozov (New Republic) on the questionable value of the popular TED conference series and the idea industry behind it; Paul Kiel (ProPublica) on the ripple effects of the ongoing foreclosure crisis; and the infamous op-ed by Greg Smith, published in the New York Times, announcing his break with Goldman Sachs over its trading practices and corrupt corporate ethos. Jessica Pressler (New York) delves into the personal and professional rivalry between Tory and Christopher Burch, former spouses now competing to dominate the fashion world. Peter Whoriskey (Washington Post) exposes the human cost of promoting pharmaceuticals off-label. Charles Duhigg and David Barboza (New York Times) investigate Apple's unethical labor practices in China. Max Abelson (Bloomberg) reports on Wall Street's amusing reaction to the diminishing annual bonus. Mina Kimes (Fortune) recounts the grisly story of a company's illegal testing—and misuse—of a medical device for profit, and Jeff Tietz (Rolling Stone) composes one of the most poignant and comprehensive portraits of the financial crisis's dissolution of the American middle class.

Long-Run Productivity Shifts and Cyclical Fluctuations

Evidence for Italy

Long-Run Productivity Shifts and Cyclical Fluctuations

Using unobserved stochastic components and Kalman filter techniques, the paper assesses the relative importance of transitory and permanent shifts in Italian real GDP within a production function framework. Evidence suggests that the increase in hours worked that has accompanied pension and labor market reforms accounts for the bulk of low-frequency variation in growth, but points to factor utilization as the main driver of business cycle fluctuations. In contrast with the predictions of standard Real Business Cycle models, a positive shock to the underlying rate of total factor productivity growth generates a slight decline in hours, whereas the response of output to the same shock is found to be positive.

The SAGE Handbook of Media Processes and Effects

The SAGE Handbook of Media Processes and Effects

The study of media processes and effects is one of the most central to the discipline of communication and encompasses a vast array of theoretical perspectives, methodological tools, and applications to important social contexts. In light of this importance—as well as the rapid changes in the media environment that have occurred during the past 20 years—this Handbook explores where media effects research has been over the past several decades, and, equally important, contemplates where it should go in the years ahead. COVERAGE Part I offers an overview of the field and conceptualizations of media effects, along with a range of quantitative and qualitative methodologies used in the study of media effects. Part II focuses on prominent theoretical approaches to the study of media effects from a more societal perspective, tracing their historical contexts, theoretical developments, criticisms and controversies, and the impact of the new media environment on current and future research. Part III emphasizes the various factors that influence the critical functions of message selection and processing central to a host of mass media application contexts. Part IV reflects a dominant trend in the media effects literature—that of persuasion and learning—and traces related theoretical perspectives through the various contexts in which media may have such effects. Part V explores the contexts and audiences that have been traditional foci of media effects research, such as children, violence, body image, and race, addressing the theories most applicable to those contexts. Part VI highlights a concern central and unique to the communication discipline—message medium—and how it influences effects ranging from what messages are attended to, how we spend our time, and even how we think.

Yield Curve Dynamics and Spillovers in Central and Eastern European Countries

Yield Curve Dynamics and Spillovers in Central and Eastern European Countries

This paper applies the models used to study yield curve dynamics and spillovers in the U.S. and other countries to Central and Eastern European countries (CEE countries). Using the Diebold, Rudebusch, and Aruoba (2006) dynamic version of the Nelson-Siegel representation of the yield curve, the paper finds that the two-way relationship between macroeconomic and financial variables in the CEE countries is similar to the one in mature economies. However, inflation shocks have very little persistence in the CEE countries, owing to the strong convergence trends in these countries-which tend to re-anchor expectations faster. Increased convergence in policies and market integration over time are associated with a stronger correlation between the levels of the yield curves, while the curves slopes are more driven by idiosyncratic factors. Shifts in the euro yield curve are transmitted both to interest rates and inflation expectations in the CEE countries-and transmission is stronger after 2004.

Real Implications of Financial Linkages Between Canada and the United States

Real Implications of Financial Linkages Between Canada and the United States

This paper documents the extent of financial linkages between Canada and the United States and explores the impact of changes in U.S. financial conditions on financial conditions and real economic activity in Canada. It shows that close to a quarter of financing by Canadian corporations is raised south of the border. Empirical analysis using structural vector autoregressions establishes that a tightening in U.S. financial conditions has significant implications for real activity in Canada. For example, a percentage point increase in the 3- month T-bill rate, other things being equal, leads to a decline of slightly more than one percentage point in Canada''s real GDP growth after 3 quarters. That decline can be decomposed into three channels: the direct financial channel, where the slowdown is attributed to a rising cost of funds for Canadian companies raising capital in the United States; the indirect financial channel, where growth is hampered as financial conditions in Canada tighten in response to a tightening in the United States; and the trade channel, which goes through a slowing in the U.S. economy, and correspondently lower demand for Canadian exports. As would be expected from the high degree of reliance on U.S. financing, the direct financial channel proves dominant in the short term.

U.S. Beef Industry

Cattle Cycles, Price Spreads, and Packer Concentration

U.S. Beef Industry


International Dimensions of Monetary Policy

International Dimensions of Monetary Policy

United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.

Austria

Financial Sector Assessment Program Technical Note: Stress Testing and Short-Term Vulnerabilities

Austria

This technical note focuses on the Austrian banking system that exhibits considerable resilience against shocks determined by stress tests. The main sources of risk lie in the credit risk arising from exposures to Central, Eastern, and Southeastern Europe (CESE) and the Commonwealth of Independent States (CIS), indirect credit risk from foreign currency lending, and credit risk from domestic lending. The Austrian banking systems exhibits ample liquidity. In-depth discussions with the larger banks show that their modeling capacities vary.