Relevant and even prescient commentary on news, politics and the economy.

The IMF’s Flexible Credit Line

by  Joseph Joyce The IMF’s Flexible Credit Line The policy conditions attached to the disbursement of an IMF loan have long been the subject of controversy. In the wake of the global financial crisis, the IMF introduced a new lending program—the Flexible Credit Line—that allowed its members to apply for a loan before a crisis […]

The People’s Verdict on Globalization

by Joseph Joyce The People’s Verdict on Globalization The similarities in the electoral appeals of businessman Donald Trump and Senator Bernie Sanders have been widely noted (see, for example, here, here and here). Both men attract voters who feel trapped in their economic status, unable to make progress either for themselves or their children. Moreover, […]

The Repercussions of Financial Booms and Crises

 by Joseph Joyce The Repercussions of Financial Booms and Crises Financial booms have become a chronic feature of the global financial system. When these booms end in crises, the impact on economic conditions can be severe. Carmen M. Reinhart and Kenneth S. Rogoff of Harvard pointed out that banking crises have been associated with deep […]

China’s Vulnerable External Balance Sheet

by Joseph Joyce China’s Vulnerable External Balance Sheet China’s capital outflow last year is estimated to have totaled $1 trillion. Money has been channeled out of China in various ways, including individuals carrying cash, the purchase of foreign assets, the alteration of trade invoices and other more indirect ways. The monetary exodus has pushed the […]

Monetary Policy in an Open Economy

by Joseph Joyce Monetary Policy in an Open Economy The recent research related to the trilemma (see here) confirms that policymakers who are willing to sacrifice control of the exchange rate or capital flows can implement monetary policy. For most central banks, this means using a short-term interest rate, such as the Federal Funds rate […]

The Enduring Relevance of “Manias, Panics, and Crashes”

by Joseph Joyce The Enduring Relevance of “Manias, Panics, and Crashes” The seventh edition of Manias, Panics, and Crashes has recently been published by Palgrave Macmillan. Charles Kindleberger of MIT wrote the first edition, which appeared in 1978, and followed it with three more editions. Robert Aliber of the Booth School of Business at the […]

Dilemmas, Trilemmas and Difficult Choices

by Joseph Joyce   Dilemmas, Trilemmas and Difficult Choices In 2013 Hélène Rey of the London Business School presented a paper at the Federal Reserve Bank of Kansas City’s annual policy symposium. Her address dealt with the policy choices available to a central bank in an open economy, which she claimed are more limited than […]

The Continuing Dominance of the Dollar: A Review of Cohen’s “Currency Power”

by Joseph Joyce The Continuing Dominance of the Dollar: A Review of Cohen’s “Currency Power” Every year I choose a book that deals with an important aspect of globalization, and award it the Globalization Book of the Year, also known as the “Globie.” Unfortunately, there is no cash prize to go along with it, so […]

Capital Flows, Credit Booms and Bank Crises

by Joseph Joyce Capital Flows, Credit Booms and Bank Crises Studies of the impact of capital inflows have established that debt inflows can lead to bank crises (see here and here). Unlike equity, payments on debt are contractual and can not be cancelled if there is an economic downturn, which intensifies any shocks to the […]

The IMF and the Return of Structural Conditionality in Europe

The IMF has increased in importance over the last few years, especially in Europe.  Prof. Joyce writes on the background of its evolution. by Joseph P. Joyce  is a Professor of Economics at Wellesley College and the Faculty Director of the Madeleine Korbel Albright Institute for Global Affairs. The IMF and the Return of Structural Conditionality […]