Everyday the blogosphere offers an enormous amount of in-depth analysis on any imaginable topic. The world of macroeconomics and economic forecasting is no exception. To keep themselves updated on the latest information, our in-house team of economists scan the world wide web and gather what they consider the most interesting, appealing, informative or just curious blog posts from experts in the field of global economics. Here’s the list of the Top 4 posts from this week. Check it out!

  1. CFR – Development Channel – Evan Axelrad: ‘The Role of Government in Agriculture

    In this post, Evan Axelrad provides some insights about the credit constraints and productivity issues that some developing countries are facing today. Based on a report by the Initiative for Smallholder Finance (ISF) that analyzes the history of agriculture finance systems in developed countries, Evan Axelrad defends that public intervention should not replace funding from private institutions but supplement it. In addition, the government has to combine subsidized loans with initiatives that boost productivity. While the ISF report suggests that there is a positive correlation between developed agriculture finance systems and increased farm size, the author warns that small tenant farmers contribute to food security and preserve the environment. ” –  Ricard Torné

  2.  Bruegel Blog – Silvia Merler: ‘Fact of the week: Russia sanctioned from all sides’

    Silvia Merler, associate fellow at Brussels-based think tank Bruegel, writes an interesting piece on the recent sanctions imposed to Russia by the European Union. She mentions that the decision to expand sanctions follows the unprecedented ruling by an arbitration court in The Hague regarding Yukos, which was Russia’s largest oil company. She underlines that the firm “used to be”, because it does not exist anymore, as the Russian government seized the company ten years ago, following the imprisonment of its principal and controversial shareholder, Mikhail Khodorkovsky. After the arrest, Yukos was broken up and nationalized and most of its assets were transferred to Rosneft. Now, Yukos’ former shareholders are awarded USD 50 billion in damages to be paid by the Russian Federation. The award is larger than any prior international arbitration award.   Ricardo Aceves

  3.  Eval Central – Leonardo Corral and Heath Henderson : ‘Development that works: can land markets reduce land inequality in developing countries?’

    Leonardo Corral and Heath Henderson comment on the relationship between land inequality and economic growth.  Land inequality is said to hold back growth and poverty reduction.  Credit and labor market imperfections, tenure insecurity, household characteristics, managerial experience and human capital are seen as determinants of land inequality. The authors cite a recent empirical study based on Paraguayan data that shows that land accumulation is significantly affected by the initial farm size as well as the farm’s titles and that identifies three different growth clusters for the Paraguayan case. Furthermore, the blog authors provide some estimates on how a potential reform affects growth clusters and inequality.” – Teresa Kersting

  4. Money and Banking – Stephen G. Cecchetti and Kermit L.Schoenholtz: ‘Inflation Expectations: How Credibility Pays Off’

    In this blog post, Stephen G. Cecchetti and Kermit L.Schoenholtz talk about inflation expectations and their importance on the economy. According to the authors, keeping inflation expectations under control is the first step to keeping the inflation rate under control. They  analyze historical data on the inflation rate in the United States and point out two main things. First, medium-term inflation expectations fluctuate with actual inflation. Second, long-term inflation expectations are fairly stable. The reason why long-term inflation expectations are stable is the credibility of the Federal Reserve’s commitment to price stability. One of the biggest advantages of stable inflation expectations is the impact on private spending after a negative shock in the economy. If inflation expectations were to drop sharply, this would drive up the expectations of the real interest rate, which in turn, would postpone private spending. This could depress the economy and put downward pressure on inflation, which will drive output down even further. Stable inflation expectations alone aren’t sufficient to avoid business cycles. However, they help keep deep recessions from becoming historic depressions. – Dirina Mançellari

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