Trust and Economic Growth

Economies in which people trust each other grow at lot faster than ones in which there's lots of mutual suspicion. That's the message of this new paper.
This finding is not new, and it accords with common sense. People who trust each other are more likely to invest in physical or human capital, more likely to engage in market for lemons transactions, more likely to exchange know-how, and more likely to invest in productive activity rather than rent-protection or extraction.
But until now, the link between trust and growth has been difficult to unravel...more>>

Trade Openness and Inflation

Changes in openness to trade can disrupt the inflation forecasting on which many nations' monetary policies depend. New research suggests an innovative time-series openness measures that addresses some of the shortcomings of existing measures...more>>

Benjamin Friedman, James Galbraith, and Allan Meltzer on the Problems with Inflation Targeting

The purpose of this is mainly so that I have a searchable archive of this material, I doubt it will be of that much interest generally. It's three statements on monetary policy by Benjamin Friedman, James Galbraith, and Allan Meltzer, and a video of the hearing so the post is quite long...more>>

Greg Mankiw's Blog: The Phillips curve is alive and well...

Greg Mankiw's Blog: The Phillips curve is alive and well...

Greg Mankiw's Blog: Taxing the Rich

Greg Mankiw's Blog: Taxing the Rich

Economics and...: Keynesian Fiscal Policy

Economics and...: Keynesian Fiscal Policy

What can we learn from successful autocracies?

Autocracies are bad, but are sometimes economically successful. Empirical analysis provides lessons on how to institutionalise good government in a wider context....more>>