http://www.VoxEU.org Recent Jeffrey Frankel articles on VoxEU.org en http://www.VoxEU.org/index.php?q=node/8938 Jeffrey Frankel, 29 January 2013

2013 marks the 100th anniversary of US federal income tax and the establishment of the Federal Reserve. What lessons have we learnt about macroeconomic policy since then? This column assesses the postwar lessons and argues that fiscal expansion is much more likely to be effective in the short term than any monetary expansion stimulus. Indeed, compared with fiscal policy, monetary policy seems more alchemy than science.

Full Article: Monetary alchemy, fiscal science]]> Tue, 29 Jan 2013 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8938 http://www.VoxEU.org/index.php?q=node/8826 Jeffrey Frankel, 19 December 2012

The time is right for the world’s central banks to rethink how they conduct monetary policy. This column argues that central banks should follow the lead of Mark Carney, the Bank of England’s new Governor, in considering a move to nominal GDP targeting. If nominal GDP targeting is introduced in two distinct phases, its introduction can deliver the advantage of some stimulus now – when it is needed – while satisfying central bankers’ reluctance to abandon their cherished low inflation target.

Full Article: Central banks can phase in nominal GDP targets without damaging the inflation anchor]]> Wed, 19 Dec 2012 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8826 http://www.VoxEU.org/index.php?q=node/8541 Jeffrey Frankel, 2 October 2012

Cultural generalisations are dangerous. Sometimes, however, statistical relationships are so strong that it is worth pondering their significance. Are some groups more likely to take responsibility for their personal behaviour than others with respect to their sexual behaviour, physical fitness, financial dependency on the federal government? The fearless social scientist will not shrink from confronting these questions.

Full Article: Which of the 50 states practise personal responsibility?]]> Tue, 02 Oct 2012 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8541 http://www.VoxEU.org/index.php?q=node/8320 Jeffrey Frankel, 7 August 2012

Is austerity good or bad? This column argues that it is as foolish to argue this question as it would be to debate whether it is better to drive on the left or right. Procyclical fiscal policy, on the other hand, is another question.

Full Article: The Procyclicalists: Fiscal austerity vs. stimulus]]> Tue, 07 Aug 2012 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8320 http://www.VoxEU.org/index.php?q=node/8162 Jeffrey Frankel, 27 June 2012

Solutions to the Eurozone crisis must balance the evils of austerity and moral hazard. This column argues that the blue/red Eurobonds proposal might just get this balance right.

Full Article: Could Eurobonds be the answer to the Eurozone crisis?]]> Wed, 27 Jun 2012 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8162 http://www.VoxEU.org/index.php?q=node/8106 Jeffrey Frankel, 19 June 2012

The current economic crisis has called into question the role of monetary policy, particularly inflation targeting and its oversight of asset bubbles and supply side shocks. This column is an obituary to inflation targeting and call for nominal GDP targeting to replace it.

Full Article: Inflation targeting is dead: Long live nominal GDP targeting]]> Tue, 19 Jun 2012 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/8106 http://www.VoxEU.org/index.php?q=node/7346 Valentina Bosetti, Jeffrey Frankel, 28 November 2011

The signatories of the UN Convention on Climate Change will meet again this week in Durban, South Africa. But time is running out if they are to come up with a successor to the Kyoto Protocol, especially with the US at loggerheads with China and India. This column proposes a novel yet pragmatic solution.

Full Article: How to agree on emissions targets and a successor to Kyoto]]> Mon, 28 Nov 2011 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/7346 http://www.VoxEU.org/index.php?q=node/7075 Jeffrey Frankel, 10 October 2011

Over the last few years, use of China’s currency for international trade has been growing steadily. Some argue this is the start of a journey that will see the renminbi displace the dollar and become the international reserve currency within a decade. This column asks whether such prophecies are realistic by looking at how other international currencies established themselves.

Full Article: The rise of the renminbi as international currency: Historical precedents]]> Mon, 10 Oct 2011 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/7075 http://www.VoxEU.org/index.php?q=node/6677 Jeffrey Frankel, Carlos A. Vegh , Guillermo Vuletin, 23 June 2011

With the ongoing financial turmoil in Europe, many emerging market countries are now deemed less risky than so-called “advanced” countries. This column examines why this is the case and finds that the cyclicality of a country’s fiscal policy – a sign of its riskiness – is inversely correlated with the quality of the country’s institutions.

Full Article: How developing nations escaped procyclical fiscal policy]]> Thu, 23 Jun 2011 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/6677 http://www.VoxEU.org/index.php?q=node/6517 Jeffrey Frankel, 16 May 2011

It is a year since Greece was bailed out by EU and IMF and there are many who label it a failure. This column says that while there is plenty of blame to go around, there were three big mistakes made by the European Central Bank. Number one: Letting Greece join the euro in the first place

Full Article: The Greek debt crisis: The ECB’s three big mistakes ]]> Mon, 16 May 2011 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/6517 http://www.VoxEU.org/index.php?q=node/5595 Jeffrey Frankel, 2 October 2010

Over the last decade, the volatility of commodity prices has led many Latin American and Caribbean countries to demand a currency regime that accommodates terms-of-trade shocks. This column compares proposals for “product price targeting” with exchange-rate and CPI targeting. It finds that product price targeting would be more effective at stabilising the real domestic prices of tradable goods.

Full Article: What nominal anchor should commodity exporters’ monetary policies target?]]> Sat, 02 Oct 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5595 http://www.VoxEU.org/index.php?q=node/5258 Jeffrey Frankel, George Saravelos, 1 July 2010

Can “early warning indicators” predict which countries are most vulnerable to a crisis? This column argues that, contrary to findings released last year, early warning indicators were useful in identifying which nations were hit hardest by the Global Crisis from 2008 to 2009. The authors argue that the level of central bank reserves was particularly useful. Other useful early warning indicators include real effective exchange rate overvaluation, current accounts, and national savings.

Full Article: Early warning indicators and the 2008-09 crisis: New evidence]]> Thu, 01 Jul 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5258 http://www.VoxEU.org/index.php?q=node/4879 Jeffrey Frankel, 16 April 2010

Much of the debate over China’s exchange-rate policy has focused on the effect on the US and other western economies. This column provides a comprehensive summary of China’s exchange-rate policy over the last five years and argues that it would also be in China’s interest to let its currency appreciate – and now is as good a time as any.

Full Article: A win-win proposal: Let the renminbi appreciate]]> Fri, 16 Apr 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/4879 http://www.VoxEU.org/index.php?q=node/3780 Jeffrey Frankel, 18 July 2009

Is a credible multilateral climate change agreement feasible? This column says that such global cooperation is necessary and attempts to address the political hurdles. The proposed emissions reduction plan develops formulas to cap atmospheric concentrations of carbon dioxide at 500 ppm while obeying political constraints regarding cost, fairness, and timing.

Full Article: Designing a politically feasible multilateral climate change agreement]]> Sat, 18 Jul 2009 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/3780 http://www.VoxEU.org/index.php?q=node/2736 Jeffrey Frankel, 24 December 2008

Trade among euro members has increased 10-15% since the introduction of the euro, a far smaller effect than estimated prior to the currency's introduction. What explains the discrepancy between the European experience and previous history? This column explores the difficulty of explaining the difference.

Full Article: The Euro at ten: Why such small trade effects? ]]> Wed, 24 Dec 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/2736 http://www.VoxEU.org/index.php?q=node/1691 Jeffrey Frankel, 23 September 2008

Here one of the world’s leading international economists, a former member of Clinton’s Council of Economic Advisors, comments on the growing consensus that the Paulson Plan has got the wrong end of the stick.

Full Article: The emerging consensus against the Paulson Plan]]> Tue, 23 Sep 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/1691 http://www.VoxEU.org/index.php?q=node/1482 Jeffrey Frankel, 29 July 2008

In CEPR Policy Insight No. 25, Jeffrey Frankel discusses the merits of a peg to the export price for countries specialized in the production of a mineral or agricultural commodity.

Full Article: Peg the Export Price]]> Tue, 29 Jul 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/1482 http://www.VoxEU.org/index.php?q=node/1381 Jeffrey Frankel, 9 July 2008

The Gulf States’ dollar peg is causing them harm. One of the world’s leading international macroeconomists argues that they should “peg the export price” as this delivers automatic accommodation to terms of trade shocks while retaining the credibility-enhancing advantages of a nominal anchor.

Full Article: Time to lose the dollar peg: Gulf States]]> Wed, 09 Jul 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/1381 http://www.VoxEU.org/index.php?q=node/1178 Jeffrey Frankel, 29 May 2008

Low inventory levels might seem to belie the theory that soaring commodity prices are attributable to low interest rates. In this column, Jeffrey Frankel defends his argument, pointing to production decisions and cross-country comparisons.

Full Article: Monetary policy and commodity prices]]> Thu, 29 May 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/1178 http://www.VoxEU.org/index.php?q=node/1002 Jeffrey Frankel, 25 March 2008

The standard story for high commodity prices is rapid growth by China, India and company. But world growth is slowing, while commodity prices still hit new highs. This column suggests that the key may be low real interest rates.

Full Article: An Explanation for Soaring Commodity Prices]]> Tue, 25 Mar 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/1002 http://www.VoxEU.org/index.php?q=node/989 Jeffrey Frankel, 18 March 2008

One of the world’s leading international economists explains how the euro could surpass the dollar as the premier international currency and examines the geopolitical implications of such a shift.

Full Article: The euro could surpass the dollar within ten years]]> Tue, 18 Mar 2008 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/989 http://www.VoxEU.org/index.php?q=node/316 Jeffrey Frankel, 25 June 2007

Quantitative emission targets for the 21st century must be set sequentially, a decade at a time, within a long-term framework. A good analogy is the GATT, which produced 50 years of trade liberalisation, the specifics of which the original signers could only have guessed.

Full Article: Kyoto’s replacement: targets in a framework]]> Mon, 25 Jun 2007 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/316 http://www.VoxEU.org/index.php?q=node/217 Jeffrey Frankel, Shang-Jin Wei, 23 April 2007

The authors of CEPR DP6264 analyse the precise nature of China's exchange rate regime from July 2005 to early 2007 and make some surprising discoveries.

Full Article: Signs of modest but steady increase in flexibility in Chinese exchange rate regime]]> Mon, 23 Apr 2007 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/217