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The Crisis
Alan Greenspan [pdf] [html]

[Keywords: economic crisis, financial intermediation; JEL: E32, E44]

This article reviews the causes of the crisis, explores the nature of financial intermediation, presents a set of reforms to overcome the deficiencies of the regulatory structure and examines the role of monetary policy in the current crisis. It concludes that it is essential to increase regulatory capital requirements and liquidity of banks and increase the guarantees of financial products that are traded globally.

Rethinking Macroeconomic Policy
Olivier Blanchard, Giovanni Dell'Ariccia and Paolo Mauro [pdf] [html]

[Keywords: macroeconomic policy, macroprudential regulation, inflation targets, automatic stabilizers; JEL: E44, E52, E58, G38, H50]

The great moderation lulled macroeconomists and policymakers alike in the belief that we knew how to conduct macroeconomic policy. The crisis clearly forces to question that assessment. This paper reviews the main elements of the pre-crisis consensus, identify where we were wrong and what tenets of the pre-crisis framework still hold, and take a tentative first pass at the contours of a new macroeconomic policy framework.

The $100 Billion Question
Andrew G. Haldane [pdf] [html]

[Keywords: financial crisis, systemic risk; JEL: G01, G18]

This article examines the costs of banking pollution and the role of regulation and restrictions on the financial system in tackling it. It studies the benefits of such restrictions in terms of modularity, robustness and incentives, and the costs in terms of the economies of scale and the economies of scope that are exhausted at relatively modest level

The Current Crisis and the Culpability of Macroeconomic Theory
Paul Ormerod [pdf] [html]

[Keywords: rational agents, rational expectations, risk, uncertainty; JEL: E20, E32, E60]

The ideas of modern macroeconomics provided the intellectual justification of the economic policies of the last 10 to 15 years. It is these ideas which the financial crisis falsified. The dominant paradigm in macroeconomic theory over the past 30 years has been that of rational agents who form rational expectations about the future and make optimal decisions. The aim of the paper is to study how these agents deal with risk and uncertainty, the source of the problems of the discipline of economics, the economy and the financial crisis. Modern macroeconomics has responsibility for the financial crisis, because imposes its intellectual foundation to a world that operates in situations involving risk that are systematically underestimated and leads to not recognized situations of genuine uncertainty.

Cultural Economics. A Recent Specialisation of Economics
Luis Antonio Palma M. and Luis Fernando Aguado Q. [pdf] [html]

[Keywords: cultural economics, Baumol's cost-disease, cultural policy, cultural goods, cultural industries; JEL: Z11, B30]

Cultural economics has recently been included in the development of Economics. The seminal paper Performing Arts: The Economic Dilemma by William Baumol and William Bowen, much acknowledged by specialists and from which this specialisation originates, dates back to 1966. In spite of its short life, cultural economics is a dynamic area for applying economic analysis to diverse subjects such as: “Baumol's cost-disease”, cultural policy, models of consumption of cultural goods, concepts of capital and cultural value, organisational and managerial structures of cultural companies, the functionary of art markets and the development of the sector's economic accounts.

Political Economy of the Reform of the Colombian Pension System
Álvaro Martín Moreno R. and Fabio Ortiz [pdf] [html]

[Keywords: pension system, political economy; JEL: H55, E61]

This paper offers a critical analysis of the arguments against the public pensions system. It shows that the defense of the fully funded system based on its solvency and its ability to automatically cope with the processes of aging society are mere fallacies. In fact, it can be shown that the pay-as-you-go and fully funded systems are equivalent, facing the same problems in the long term. Finally, projections of conventional indicators show that the cries of alarm of Fedesarrollo and BBVA have no solid foundation.

The 1876-1877 Civil War in the Northeastern Colombian Andes
Edna Carolina Sastoque R. and Mario García M.[pdf] [html]

[Keywords: civil wars, Colombia, 19th Century; JEL: N46, N56]

This paper seeks to understand from a regional perspective the causes of the civil war of 1876-1877 in the Northeastern Colombian Andes. An approximation is made to the urban hierarchy in the current Colombian departments of Santander and Norte de Santander between 1853 and 1875. The conditions leading to conflict and the change in that hierarchy are presented. In addition, intervening players and the location of the events of the war are identified. It concludes that the group that fell in urban hierarchy was the one that started the war and that this hierarchical change was one of the causes of the war.

Changes in Road Concessions in Uruguay: An Analysis Based on Auctions Theory
Andrés Pereyra [pdf] [html]

[Keywords: road concessions, auction theory; JEL: H54]

In this paper we analyze the impact on the value of future investments that would derive from the privatization of a state-owned road concessionaire, taking into account the ability of the government to handle the asymmetry of information vis à vis the concessionaire. A model based on auction theory is developed in order to quantify the expected impact on government from the privatization of the concessionaire assuming the concession contract is not modified. We conclude that if the government decides to privatize the concessionaire, significant changes are required in the concession contract, especially in the absence of institutional transformations that would improve the government supervisory and control capability.


Revista de Economía Institucional
Universidad Externado de Colombia
Cra. 1 No. 12-68 Casa de las Mandolinas
Bogotá, Colombia
(571) 2826066 ext. 1307

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