New paper on "Old Bonds"

Conflicts of Interest, Reputation, and the Interwar Debt Crisis: Banksters or Bad Luck?
(with Marc Flandreau and Norbert Galliard)

This paper builds a new dataset with detailed information on the universe of
foreign government bonds issued in New York in the 1920s and uses these data to
describe the behavior of the financial intermediaries which operated in the New
York market during the period leading to the interwar debt crisis. The paper
starts by showing that concerns over reputation played an important role in
intermediaries‘ underwriting choices. Next, the paper checks whether banks
managed to charge abnormal underwriting fees on bonds that would eventually
default and finds no evidence of such practice (―banksterism‖). The paper
concludes by discussing some parallels between the experience of the 1920s and
the current debate on the "originate and distribute" model.

The paper is here
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Social mobility in Italy: The second lowest in the OECD

The paper is here

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New paper with Ricardo Hausmann on abstinence versus redemption

Abstract:

This paper updates our previous work on the level and evolution of original sin. It shows that while the number of countries that issue local-currency debt in international markets has increased in the past decade, this improvement has been quite modest. Although we find that countries have been borrowing at home, thanks to deepening domestic markets, we document that foreign participation in these markets is more limited than what is usually assumed. The paper shows that the recent decline of currency mismatches and the consequent ability to conduct countercyclical macroeconomic policies is due to lower net debt (abstinence) and not to redemption from original sin. We conclude that original sin continues to make financial globalization unattractive and developing countries have opted for abstinence because foreign currency debt is too risky. The promised paradise of financial globalization will need to wait for redemption from original sin.

The full paper is here.
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Redemption or Abstinence

Our (Ricardo Hasumann and I) new piece on original sin is here.

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More evidence that housing prices in Geneva are too high

The rental yield in Zurich is twice that of Geneva. This is not because rental prices are lower (they are basically the same) but because houses are much more expensive to buy: Here

Older posts: here, here; here

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Stuff I did not remember having written about

The cultural values of Islam (Written in 2002, probably because I was pissed off at Oriana Fallaci, but why was I qualified to wrote about this???).

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Singer and Easterly

Well worth 46 minutes on Boxing Day

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Excellent Hamilton post

On stock prices (also read the November 2008 and Spring 2009 posts)

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JB on DM

Here. methink: he too kind. But at least he says:

Moyo is less convincing, however, when she tries to argue that aid itself has been the crucial factor holding Africa back, and she verges on deliberate provocation when she proposes terminating all aid within five years -- a proposal that is both impractical (given existing long-term commitments) and unhelpful (since an abrupt withdrawal of aid would leave chaos in its wake).

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Feynman on rubber bands

the great physicist talks like a character from "The Sopranos"

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Worse than losing your computer in a taxi

Lily Sussman's story
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Surely

Surely, no sentence beginning with the word ‘surely’ can validly contain a question mark at its end? However, one paradox is enough for one article …” This was Paul Samuelson
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Paul Samuelson passed away

Here's Krugman
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Strange and interesting places

Here

This place is not too far from Cafasse

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Back from Beirut...

The traffic is out of control, people claim that it is because the city has now several working traffic lights. Here is Dani Rodrik on traffic lights and institutions.
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Website I shoudl check daily

The browser (thanks to manu manu)
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For the price of a one bedroom apartment in Geneva

Here's the story

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Nudge

Just finished reading the book and liked it a lot. Here's the website

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Housing Bubble in Geneva

I've been claiming that there's in housing bubble in Geneva and that price will fall (here and here) and I've been trying to do an econometric study but I've not been able to get data, but look at this for the US, doesn't it look like a Geneva story?

Dastrup and Carson look at how the magnitudes of the price declines correlate with a number of other community characteristics such as overbuilding (as measured by growth in building permits relative to the local labor force), extent of subprime lending, owner-occupied units, and fundamentals such as median income. Dastrup and Carson find that all of these measures were statistically significantly related to the magnitude of the housing price decline. But by far the most important variable was the magnitude of the previous price run-up, which all by itself can account for more than half of the observed variance in the size of the price decline across different communities.

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The are shutting down..

..The Blade (check out the purple shirts). Too bad, it was a great DC institution even for the straight readers (I was once reading a copy on park bench in Dupont, somebody sat next to me, but when he was what I was reading he moved away quickly)

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Back from China

Behind the great firewall there was no Blogger or Facebook. When I got got back, I read this great quote: Jesus probably didn't know much about macroeconomics, even though he was God.

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Heroes in unexpected places

Here

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Housing prices: Geneva versus Switzerland

This an update. The old post is here

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Autometrics

Trying to learn more about it.

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Mercedes Sosa

I'm listening to the CD they gave us at LACEA. Gracias a la vida

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