The Damaging Effects of Global Inequality

World Bank economist Branko Milanović has a great introduction to global inequality in his The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality. He uses history, literature, and stories straight out of today’s newspapers, to discuss one of the major divisions in our social lives: between the haves and the have-nots. 

Milanovic reveals just how rich Elizabeth Bennet’s suitor Mr. Darcy really was; how much Anna Karenina gained by falling in love; how wealthy ancient Romans compare to today’s super-rich; where in Kenyan income distribution was Obama’s grandfather; how we should think about Marxism in a modern world; and how location where one is born determines his wealth. 

He goes beyond mere entertainment to explain why inequality matters, how it damages our economics prospects, and how it can threaten the foundations of the social order that we take for granted.

The book, by the lead economist with the World Bank’s research division and one of the world’s leading experts on inequality, was discussed in a three part series in Think Progress:

Part 1:  Inequality: The Global View
Part 2: Five Things You Might Not Know About Inequality
Part 3: Why Rich People Hate Talking About Inequality

See also Finance & Development magazine on inequality.
         Branko Milanovic's article: More or Less
                                 podcast interview on inequality  
          IMF research: Andy Berg and Jonathan Ostry

Inequality may be hazardous to your growth
How inequality affects savings behavior

Branko Milanović talking about inequality research:

Tribute to Chinua Achebe

Good write-up in the Guardian on Nigerian author Chinua Achebe, the father of African literature, who died in Boston, aged 82:

"African literature burst onto the world stage with Achebe's 1958 novel Things Fall Apart, which portrays an Igbo yam farmer's fatal struggle to come to terms with British colonialism in the late 19th century. It remains the best-selling novel ever written by an African author, having sold more than 10-million copies in 50 different languages. Nelson Mandela, who read his books during his 27-year incarceration, once said of him: "He was the writer in whose company the prison walls came down."

Chinua Achebe peered deep into the Nigerian psyche

"Achebe's works do not fear to challenge those post-colonial, independent regimes in Africa who abuse personal power in every possible way – from banning political opposition, to corruption. His novel A Man of the People, a biting satire on corruption in freed African regimes, uses the blade of humour to alert us to official greed and the cant which legitimises it."  from "A mind able to penetrate the mystery of being human."

New York Times ran an eloquent obituary:

In his writing and teaching Mr. Achebe sought to reclaim the continent from Western literature, which he felt had reduced it to an alien, barbaric and frightening land devoid of its own art and culture. He took particular exception to "Heart of Darkness," the novel by Joseph Conrad, whom he thought “a thoroughgoing racist.” 

Do You Still Prefer Print?

Lots of people do. Laura Miller writes in Salon:

"If print could talk, it would surely be telling the world, Mark Twain-style, that reports of its demise have been greatly exaggerated. The market for e-books grew exponentially after Amazon introduced the Kindle, and it’s still one of the most fascinating and unpredictable sectors of a once hidebound industry. But the early-adapter boom is showing signs of flagging and the growth of the e-book market appears to be leveling out. E-books are definitely here to stay, but it seems that many, many readers — a threefold majority, in fact — still prefer print."

Read the Salon article. 

Wired on the future of book publishing.

What  about reselling your ebook? Does it pass your sniff test !!

Democracy Pays Off

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoğlu
My rating: 5 of 5 stars

A nation's poverty or prosperity may have as much to do with politics as economics, says Daron Acemoglu.

The MIT professor argues that more democratic countries with inclusive political institutions create sustained prosperity, while “extractive” authoritarian regimes lead toward poverty.

Acemoglu discusses why China is not the exception.

Listen to an interview with Acemoglu: http://www.imf.org/external/podcast/2...

Exploring the Irrational

MIT professor Dan Ariely

Ariely, behavioral economist and author of Predictably Irrational, discusses the irrational decisions that influence our dating lives, our workplace experiences, and our general behavior, up close and personal.

In The Upside of Irrationality, Ariely explores the many ways in which our behavior often leads us astray in terms of our romantic relationships, our experiences in the workplace, and our temptations to cheat. Blending everyday experience with groundbreaking research, Ariely explains how expectations, emotions, social norms and other invisible, seemingly illogical forces skew our reasoning abilities.

He also talks about Wall St. bonuses, incentives, and the role of emotions in the workplace. 

Little Book of Economics

Harvard professor Greg Mankiw gives a thumbs up to Greg Ip, the U.S. Economics Editor of The Economist, based in Washington, D.C.:

"A terrific, very quick, and nontechnical introduction in economics (more macro than micro) is Greg Ip's Little Book of Economics. In case you don't know him, Greg writes for The Economist magazine and was previously at the Wall Street Journal. He now has a new edition of his book, together with an online guide to suggested readings."

See his website

Reexamining Economics

The global economic crisis and the subsequent weak recovery has shaken up macroeconomics.

A conference on the theme “Macro and Growth Policies in the Wake of the Crisis” took place at the IMF’s Headquarters in Washington, DC on March 7-8, 2011. The conference was hosted by four of the world’s most noted economists, including two Nobel laureates: Michael Spence (Stanford University), Joseph Stiglitz (Columbia University), Olivier Blanchard (Economic Counselor and Director of Research at the IMF), and David Romer (University of California, Berkeley). The event brought together leading policymakers and academics from both advanced and emerging countries, as well as representatives from civil society, the private sector, and the media.

The aim of the conference was to distill the policy lessons of the global financial crisis. Participants focused on six key areas: monetary policy, fiscal policy, financial intermediation and regulation, capital account management, growth strategies, and the international monetary system. They also sought to make concrete policy recommendations for how to revive sustainable growth while safeguarding macroeconomic and financial stability.

Review in F&D magazine
LSE review

Conference website In the Wake of the Crisis: Leading Economists Reassess Economic Policy by Michael Spence
My rating: 5 of 5 stars

The global economic crisis has challenged Economics to the core. This is the first pass at reexamining Economics in the light of lessons learned and still being learnt.

The IMF held a conference of leading economists in 2011. Conference co-host and Nobel Prize winner Joseph Stiglitz noted that “the models that were used before the crisis neither predicted the crisis nor gave us a framework for responding to the crisis when it happened.”

IMF Chief Economist Olivier Blanchard said: "The global economic crisis taught us to question our most cherished beliefs about the way we conduct macroeconomic policy." http://blog-imfdirect.imf.org/2011/03...

This book is a collection of thoughts following the crisis and an examination of the future direction of the international monetary system.

View all my reviews

How Fiscal Policy Can Help Battle Climate Change

Efforts to control atmospheric accumulations of greenhouse gases that threaten to heat up the planet are in their infancy. Although the International Monetary Fund is not an environmental organization, environmental issues matter for the organization's mission when they have major implications for macroeconomic performance and fiscal policy. Climate change clearly passes both these tests. 

A new book, Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers, provides practical guidelines for the design of fiscal policies (carbon taxes and emissions trading systems with allowance auctions) to reduce greenhouse gases.

Providing incentives

Not only are these instruments potentially the most effective at exploiting emission reduction opportunities in the near and longer term, but they can also generate for many countries a valuable new source of government revenue. The chapters, written by leading experts, explain the case for fiscal policies over other approaches; how these policies can be implemented; reasonable levels for emissions prices; policies for the forest sector; appropriate policy for developing countries; the most promising fiscal instruments for climate finance; and lessons to be drawn from prior policy experience.

This is essential reading for policymakers in finance and environment ministries in developed and developing countries alike, and others grappling with balancing environmental and development concerns.

Purchase your copy:

• IMF Bookstore: Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers
• Amazon: Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers 

Also available to IMF eLibrary subscribers: 

• Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers

  + on Goodreads

Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers by International Monetary Fund (IMF)
My rating: 5 of 5 stars

Clearly written book on how taxes and other instruments can help in the battle against climate change by reducing energy-related carbon dioxide emissions (which account for about 70% of projected greenhouse gas emissions). By some of the leading experts in the field.

View all my reviews

Krugman on Keynes' General Theory -- "probably the most important book in Economics."

Nobel Prize winning economist Paul Krugman provides a new introduction to The General Theory of Employment, Interest and Money by English economist John Maynard Keynes. Krugman says it is probably the most important book in Economics.

Currencies -- the Role of the Dollar

University of California Economics Professor Barry Eichengreen discusses what factors could lead to the rise or fall of the U.S. dollar and the future of other international currencies.

Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System, by Barry Eichengreen, Oxford University Press.

Book discussion at the IMF:

Discussants --

Min Zhu, Deputy Managing Director
James Boughton, Fund Historian, Moderator
Barry Eichengreen, Professor of Economics and Political Science, University of California, Berkeley
Ted Truman, Senior Fellow, Peterson Institute
Isabelle Mateos y Lago, Advisor, Strategy, Policy, and Review Department

IMF Survey magazine report of the book discussion

Eichengreen’s new work challenges the view of inertia in the international monetary system, arguing that the dollar overtook the pound sterling in just one decade following the formation of the U.S. Federal Reserve. As such, the system can evolve quickly. Like the dollar one hundred years ago, once the prerequisites are in place, currencies of economies that are large and important in global trade and finance can internationalize rapidly.

Changing Times -- Bookshops in Kolkata

Fascinating video about College Street in Kolkata -- the throbbing home of a maze of old book shops and stalls and this traditional place of learning and trading hosts the largest non-trading book fair in the world every year. But encroaching globalization, in the form of a modern and fancy book mall being built opposite, casts a shadow over this traditional and treasured place.

Hard Bound -- Birth of a Book

Wonderful video on how bound hardback books are made:

The book being printed is Suzanne St Albans’ 'Mango and Mimosa' published as part of the Slightly Foxed series.

Video shot, directed & edited by Glen Milner

Paying the Price for Inequality

Economists Joseph Stiglitz and Paul Krugman agree on many things. But the two have been at odds over whether economic inequality is holding back the recovery. Stiglitz says it is, and Krugman, while agreeing the inequality is unfortunate, says it is not. "Economics is not a morality play," Krugman observes. See Krugman vs Stiglitz in the New Republic. 

Stiglitz talks about his book, "The Price of Inequality: How Today's Divided Society Endangers Our Future," in the video below.

Stiglitz passionately describes how unrestrained power and greed are writing an epitaph for the American dream.

New York Times review

Review in the Observer

All for One -- F&D magazine on inequality

Banking on Europe

The IMF has published a new policy paper on banking supervision in Europe as part of its Staff Discussion Note series. The paper, titled "A Banking Union for the Euro Area," argues that a union is the logical conclusion of the idea that integrated banking systems require integrated prudential oversight.

The case for a banking union for the euro area is both immediate and longer term. 

Moving responsibility for potential financial support and bank supervision to a shared level can reduce fragmentation of financial markets, stem deposit flight, and weaken the vicious loop of rising sovereign and bank borrowing costs. In steady state, a single framework should bring a uniformly high standard of confidence and oversight, reduce national distortions, and mitigate the buildup of concentrated risk that compromises systemic stability. "Time is of the essence," the paper argues.

Read an article in IMF Survey magazine

Eating Better

An economic approach to food

How to find the best tortillas while traveling in Mexico? Why is American food often so bad today? Is agribusiness good for the global economy? Prolific author, blogger and economist Tyler Cowen takes on these questions--and many more--in his new book, “An Economist Gets Lunch New Rules for Everyday Foodies.”

Cowen's economic approach to good food applies the following principle: “Food is a product of economic supply and demand, so try to figure out where the supplies are fresh, the suppliers are creative, and the demanders are informed.” 

Read a review in F&D magazine: Food for Thought 

Listen to a podcast interview with Tyler Cowen.

Spies, Gold, and Whitewash

Interesting review in the latest Finance & Development magazine by Eric Rauchway, History Professor at the University of California at Davis, of the "The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order," by Benn Steil.

Rauchway says the book is marred by "far-reaching claims based on inadequate evidence," particularly about the role of White, who was a senior U.S. Treasury official now believed to have given intelligence clandestinely to the Soviet Union (a subject touched on by IMF historian James Boughton).

The 1944 Bretton Woods conference laid the foundations of the modern international monetary system, but little was known about the exact proceedings of that historic gathering, until now. A U.S. treasury economist’s discovery of the original transcript of that meeting provides an insight into the characters and the intense debate surrounding the birth of two major international organizations. Listen to this podcast with Kurt Schuler

Read the F&D books section. 

New York Times review : "... should become the gold standard on its topic. The details are addictive. But be warned: the book is dense...  Perhaps that is what is missing here — an unmistakable voice, a sense that this rich history is told by one mind. The book sometimes reads like a succession of brilliant but loosely connected graduate seminar papers — an assemblage, a very fine one, but an assemblage nevertheless."

The History of EMU

Princeton History Professor Harold James’s Making the European Monetary Union combines a concise historical narrative of the events leading up to the European Monetary Union (EMU) with a thought-provoking account of its origin, performance, and problems. This in-depth history will appeal to academic readers looking for extensive details about the EMU."This fascinating and well-written book couldn’t be timelier," says LSE Fellow John Ryan.

Full review here.