Bachelor
2021/2022
Tail Risks and Global Economic Policy
Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'
Type:
Elective course (Economics)
Area of studies:
Economics
Delivered by:
Department of Theoretical Economics
Where:
Faculty of Economic Sciences
When:
4 year, 2 module
Mode of studies:
offline
Open to:
students of all HSE University campuses
Instructors:
Martin G. Gilman
Language:
English
ECTS credits:
3
Contact hours:
16
Course Syllabus
Abstract
The mini-course will consider tail risks and economic policies in the major advanced economies. It may be that we are in the midst of a rare “regime change” in global macroeconomics. We will explore which is the greater tail risk: the left-side risk of a collapse of demand with ensuing recession, or the right-side risk of accelerating inflation. Efforts to minimize the risks will be explored. There is a significant probability that the world economy is about to stumble into a period of financial dislocation. The danger is that the confluence of slow real growth, low productivity increases, inflated asset prices (notably bonds, equities, and real estate) and higher public debt in many of the major G20 economies cannot be sustained much longer. The policy response to the COVID pandemic exacerbates these tendencies. As of mid-October, the imbalances between growth, debt, and asset prices in advanced economies continue to widen. The radical economic policies pursued by most of the world’s advanced economies in recent years, and even more so since the policy responses to the COVID pandemic, are an experiment in which we are all inevitably participating. Ironically, Russia is one of the few exceptions. The Bank for International Settlements, among others, has been expressing its concerns that collectively we have been unable to constrain the build-up of financial imbalances, leading to a progressive narrowing of policy options. Not only are financial imbalances now much worse than in 2008 but the concentration and power of large banks is more entrenched, shadow banking is more pervasive, and there has been a massive misallocation of capital owing to mispricing, which has exacerbated income inequality via financial repression and productivity-sapping bailouts to crippled firms. These seem to have the side effect of perpetuating unsustainable asset bubbles. It hardly seems surprising that that de-globalization has become a factor in the internal politics of too many countries.
Learning Objectives
- to develop your own assessment of whether the global economy is experiencing a bubble of historic proportions or is struggling through a long period of secular stagnation. It may come as some relief to know that nobody seems to know the answer to these questions, even those responsible for economic policy in major countries
- to appeciate how these developments may be relevant to your own career and future prospects
Expected Learning Outcomes
- develop analytical skills in applying theory to empirical aspects of the economic issues in the current international economy
- recognition that there may be no correct answers on an a priori basis to many of the critical questions about growth, employment and inflation
Course Contents
- 28 October 2021
- 11 November 2021
- 18 November 2021
- 25 November 2021
- 2 December 2021
- 16 December 2021
Bibliography
Recommended Core Bibliography
- C. Goodhart. The numbers game. The Spectator, October 2021. https://main-spectatorus-spectatorus.content.pugpig.com/2021/10/11/the-numbers-game/content.html
- George A. Akerlof. What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years. URL: https://www.aeaweb.org/articles?id=10.1257/jep.33.4.171
- Peter Skott, & Hyman P. Minsky. (1992). The Financial Instability Hypothesis by. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.5947F726
- Reinhart, C. M. . (DE-588)128390883, (DE-576)167340395. (2009). This time is different : eight centuries of financial folly / Carmen M. Reinhart; Kenneth S. Rogoff. Princeton, N.J. [u.a.]: Princeton Univ. Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edswao&AN=edswao.310946565
- William R. White. (2012). Ultra Easy Monetary Policy and the Law of Unintended Consequences *. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.77F5AE54
- Менг, Т. В. Исследование образовательной среды: проблемы, подходы, модели : монография / Т. В. Менг. — Санкт-Петербург : РГПУ им. А. И. Герцена, 2011. — 98 с. — ISBN 978-5-8064-1616-3. — Текст : электронный // Лань : электронно-библиотечная система. — URL: https://e.lanbook.com/book/5588 (дата обращения: 00.00.0000). — Режим доступа: для авториз. пользователей.
Recommended Additional Bibliography
- «Central Banks Keep Shooting Themselves in the Foot». The interview with William White. https://themarket.ch/interview/william-white-central-banks-keep-shooting-themselves-in-the-foot-ld.3053
- Ben S. Bernanke. (2012). The Great Moderation. Book Chapters. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.h.hoo.bookch.4.6
- Reinhart, C., Kirkegaard, J., & Sbrancia, B. (2011). Financial repression redux. MPRA Paper. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.pra.mprapa.31641
- Robert J. GORDON. (2015). Secular Stagnation on the Supply Side: U.S. Producivity Growth in the Long Run. Communications & Strategies, (100), 19. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.idt.journl.cs10001