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March 10, 2018

The Politics and Economics of International Finance Research Group Meeting

Sponsored by the Weatherhead Center for International Affairs and the Mossavar-Rahmani Center for Business and Government

Conference Chairs:

Frankel, Jeffrey
James W. Harpel Professor of Capital Formation and Growth, Harvard Kennedy School.

Frieden, Jeffry A. 
Stanfield Professor of International Peace, Department of Government, Harvard University.

Schedule:

Location: Belfer Case Study Room (S020), CGIS South Building, 1730 Cambridge Street, Cambridge, MA 02138

8:30-9:00 AM: Continental Breakfast

9:00-9:10 AM: Welcome

9:00-10:20 AM: Charles Engel (University of Wisconsin),  “International Policy Coordination”

Background Material:

Summary notes for the Engel presentation.
Engel, Charles. 2018. “Macroprudential policy under high capital mobility: policy implications from an academic perspective.” Journal of the Japanese and International Economies 42(2016): 162-172
Engel, Charles. 2018. “Exchange Rate Policies.” Staff Papers, Federal Reserve Bank of Dallas No.8 (November 2009).
Engel, Charles. 2018. “International coordination of central bank policy.” Journal of International Money and Finance 67(2016): 13-24.
Frankel, Jeffrey A. 2018. “International Coordination.” NBER Working Paper Series NBER Working Paper 21878.
Engel, Charles. 2018. “Commentary: International Coordination.” Asia Economic Policy Conference, Policy Challenges in a diverging Global Economy, 15-22.

10:40-11:00 AM: Coffee Break

11:00 AM-12:30 PM: Stefanie Walter (University of Zurich) “Crisis Politics: The Political Economy of Adjustment”

Background Material:

Walter, Stefanie. 2018. “Crisis Politics in Europe: Why Austerity Is Easier to Implement in Some Countries Than in Others.” Comparative Political Studies Vol. 49(7) (2016): 841-873.
Frieden, Jeffry, and Stefanie Walter. 2018. “Understanding the Political Economy of the Eurozone Crisis..” Annual Review of Political Science 20(1) (2017): 371–90.
Dinas, Elias, Ignacio Jurado, Nikitas Konstantinidis, and Stefanie Walter. 2018. “Keeping the Euro at Any Cost? Explaining Preferences for Euro Membership in Greece..” Paper presented at European Political Science Association Meeting 2017, Milano.
Ahlquist, John, Mark Copelovitch, and Stefanie Walter. 2018. “The Political Consequences of Economic Shocks. Evidence from Poland.” CIS Working Paper Series No.97. Zurich: ETH and University of Zurich.
Walter, Stefanie. 2013. Financial Crises and the Politics of Macroeconomic Adjustment. Cambridge: Cambridge University Press. 

12:30-1:30 PM: Lunch

1:30-3:00 PM: Alan Taylor (University of California, Davis), “Macro-financial History and Macro-prudential Policy”

Background Material:

Abstract of presentation.
Schularick, Moritz, and Alan M. Taylor. 2018. “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870–2008.” American Economic Review 2012 102(2): : 1029–1061.
Jordà, Oscar, Moritz Schularick, and Alan M. Taylor. 2018. “When Credit Bites Back.” Journal of Money, Credit and Banking, Supplement to Vol. 45, No. 2 (December 2013).
Jordà, Òscar, Moritz Schularick, and Alan M. Taylor. 2018. “Betting the House.” Journal of International Economics 96 (2015) : S2–S18.
Jordà, Òscar, Moritz Schularick, and Alan M. Taylor. 2018. “Leveraged bubbles.” Journal of Monetary Economics 76 (2015) : S1–S20.
Jordà, Òscar, Moritz Schularick, and Alan M. Taylor. 2018. “MACROFINANCIAL HISTORY AND THE NEW BUSINESS CYCLE FACTS.” NATIONAL BUREAU OF ECONOMIC RESEARCH Working Paper 22743.
Jordà, Òscar, Björn Richter, Moritz Schularick, and Alan M. Taylor. 2018. “BANK CAPITAL REDUX: SOLVENCY, LIQUIDITY, AND CRISIS .” NBER Working Paper Series Working Paper 23287. 
Aikman, David, Oliver Bush, and Alan M. Taylor. 2018. “MONETARY VERSUS MACROPRUDENTIAL POLICIES: CAUSAL IMPACTS OF INTEREST RATES AND CREDIT CONTROLS IN THE ERA OF THE UK RADCLIFFE REPORT.” NBER Working Paper Series Working Paper 22380. 

3:00-3:15 PM: Coffee Break

3:15-4:30 PM: "Challenges for Monetary Policy: Communication and Asset prices."

  • Jeremy Stein (Economics Dept., Harvard University; former Member, Board of Governors of the Federal Reserve, 2012-14).
  • Stephen Cecchetti (Brandeis University; former Head of the Monetary and Economic Department at the Bank for International Settlements, 2008-13).

Two questions for discussion:

  1. Asset prices.  Is it a lesson of history that excessively easy monetary policy sometimes shows up in asset prices even when it hasn't shown up in inflation?   If so, have the major central banks been heeding this lesson?
  2. How central bankers communicate policy. While transparency and credibility-enhancing communication are desirable, attempts by major central banks to set targets  or even just to give forward guidance have failed, in the sense that subsequent behavior has deviated from the targets and guidance.  Should the major central banks accordingly give up on attempts to make more specific commitments?
  3. Financial regulation.  What do you think about recent efforts to roll back elements of the post-crisis regulatory reform agenda?”

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