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Daily Archives: May 30, 2011

Global imbalances and the financial crisis: Link or no link?

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Global imbalances and the financial crisis: Link or no link? by Claudio Borio and Piti Disyatat, Working Papers No 346, May 2011.

  • “Global current account imbalances have been at the forefront of policy debates over the past few years. Many observers have recently singled them out as a key factor contributing to the global financial crisis. Current account surpluses in several emerging market economies are said to have helped fuel the credit booms and risk-taking in the major advanced deficit countries at the core of the crisis, by putting significant downward pressure on world interest rates and/or by simply financing the booms in those countries (the “excess saving” view). We argue that this perspective on global imbalances bears reconsideration. We highlight two conceptual problems: (i) drawing inferences about a country’s cross-border financing activity based on observations of net capital flows; and (ii) explaining market interest rates through the saving-investment framework. We trace the shortcomings of this perspective to a failure to consider the distinguishing characteristics of a monetary economy. We conjecture that the main contributing factor to the financial crisis was not “excess saving” but the “excess elasticity” of the international monetary and financial system: the monetary and financial regimes in place failed to restrain the build-up of unsustainable credit and asset price booms (“financial imbalances”). Credit creation, a defining feature of a monetary economy, plays a key role in this story.”

    • G8 Declaration – Renewed Commitment For Freedom and Democracy

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    G8 Summit of Deauville – May 26-27, 2011: “We discussed new issues such as the Internet which are essential to our societies, economies and growth. For citizens, the Internet is a unique information and education tool, and thus helps to promote freedom, democracy and human rights. The Internet facilitates new forms of business and promotes… Continue Reading

    Google: Find searches that correlate with real-world data

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    Official Google Blog – Mining patterns in search data with Google Correlate: “…[Using] Google Correlate, which we’re launching today on Google Labs…you can upload your own data series and see a list of search terms whose popularity best corresponds with that real world trend. In the example below, we uploaded official flu activity data from… Continue Reading

    EU Commission sets out "blueprint" for Intellectual Property Rights to boost creativity and innovation

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    EUROPA press release: “Intellectual property rights (IPR), which comprise patents, trademarks, designs and geographical indications, as well as copyright (authors’ rights) and rights related to copyright (for performers, producers and broadcasters), have been around for centuries. Often, without our even realising, they affect our daily lives: they protect the technology we use (cars, mobile phones,… Continue Reading

    Fact Sheet on Decommissioning Nuclear Power Plants

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    Fact Sheet includes Decommissioning Status for Shut Down NRC-Licensed Power Reactors (As of April 2011): “When a power company decides to close its nuclear power plant permanently, the facility must be decommissioned by safely removing it from service and reducing residual radioactivity to a level that permits release of the property and termination of the… Continue Reading

    EIA: Indonesia Country Analysis Brief

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    Indonesia Country Analysis: “Though no longer a net exporter of oil, Indonesia is a leading exporter of both coal and natural gas. As domestic energy needs grow, Indonesia is increasingly trying to focus on securing energy sources for its domestic market. Indonesia has the largest population in Southeast Asia and the fourth largest population in… Continue Reading

    EU: Environment: New maps give Europeans close-up picture of air pollution from diffuse sources

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    News release: “The Europe-wide register aims to help Europeans actively engage in decisions affecting the environment. New online maps published by the European Commission and the European Environment Agency, in close cooperation with the Joint Research Centre, the Commission’s in-house science service, allow citizens for the first time to pinpoint the main diffuse sources of… Continue Reading

    NASA First Federal Agency to Launch Platform Using Slideshare

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    Federal Computer Week: “NASA is the first federal agency to venture into creating an aggregation network on the SlideShare Web platform, officials announced May 16. The NASA Universe network that started May 16 on SlideShare provides links to the agency’s videos, slide presentations and other documents shared from SlideShare channels sponsored by NASA headquarters and… Continue Reading