I Am Not Alone

Krugman annoys others, too. Not just me. I just came across a piece by David Backus, a professor at NYU Stern, which describes his irritation by Krugman. I cannot agree more with David when he says that.

“And to be fair, there are two Paul Krugmans.  I admire the brilliant expositor of economic ideas.  I’m less enchanted with the political partisan who can’t resist using cheap debating tricks in what could be a useful exchange of ideas.  Even worse, he sometimes mixes the two, disguising politics as economic analysis.”

Negative TIPS Yields!

Indeed it sounds as impossible, but it is a reality. Even though it initially sounds as a very-very bad thing about the economy, it is the opposite. It means that investors believe that we will have inflation and they even accept a negative yield. So strong is their belief that prices will increase. This may prove right or wrong. This conviction is definitely due to the QE2. TIPS investors bet that the program will work and we will have inflation. Remember that for TIPS the face value is not fixed, like in Treasuries. The face value increases or decreases according to the inflation rate. Hence, negative yields can exist and it can be rationalized by a big probability of inflation, or higher values of inflation than previously thought, or both of the above.

Here I give some articles on this phenomenon. Article in Yahoo!Finance, in Bloomberg, in Reuters and in FT.

Roubini about Greece and Europe

An article with the interesting opinions of Roubini on Greece, Europe and Euro. The article is in Greek.

Pissarides, Azariadis and Ioannides’ Article On Kathimerini

In Kathimerini.gr the Nobel laureate economists Christopher Pissarides together with economists  Costas Azariadis and Ioannis Ioannides give their opinions on what the policies that will bring the Greek economy out of its dark state are. The main emphasis is on policies that enhance growth by making structural reforms in all the economic activity in the country, enhancing the private sector by reducing corporate taxes and by convincing the public that an unprecedented effort to transform the whole country is taking place in order to get behind these efforts themselves. In the article you will find a lot of interesting data about the Greek economy. The article can be found here and it is in Greek.

A Greek Cypriot Along With Two Americans To Receive The Nobel Prize In Economics

Christopher Pissarides, a Greek Cypriot born in Nicosia and faculty at LSE was awarded the Nobel prize in economics for 2010, along with Peter Diamond from MIT, and Dale Mortensen from Northwestern University, for their contributions in search theory and its applications. The Swedish Royal Academy of Sciences stated that they are nominated the prize “for their analysis of markets with frictions”.

Here is the link to the official announcement and here is the official document from the prize committee highlighting the contributions of the prize recipients.

The Real Estate and Credit Meltdown Discussion From USC

A good discussion that took place before I start my blog but I think it is good to include in order to get a better understanding of what happened, where we are, and where we are heading.