CENTRAL BANKS AND CLIMATE
Common wisdom around central bank independence (CBI) is increasingly a matter of debate. Before the Covid-19 crisis, a growing number of scholars and commentators have proposed means by which central banks can address looming climate catastrophe—either by integrating new risks into their assessments, or by promoting more active resource allocation—and argued that central bank's attention to climate risk has focused too squarely on financial stability.
In a 2018 working paper, SIMON DIKAU and ULRICH VOLZ outline how, despite the "second-best" nature of this kind of intervention, the shift is already occurring:
"Allocating financial resources toward or away from certain sectors and companies implies favoring certain segments of the economy over others and appears to be incompatible with our modern understanding of independent central banks. Nonetheless, many central banks in emerging and developing economies have resorted to these policies as viable, second-best solutions to promote sustainable development and green investment. The notion of the neutrality of monetary policy has come under intense scrutiny more recently, not least in the context of discussions about the distributional consequences of the negative interest and quantitative easing policies adopted by major central banks. It is apparent that central banks in developing and emerging economies especially, and in Asia in particular, have been at the forefront of using a broad range of instruments to address environmental risk and encourage green investment."
Full paper available here.
- On VoxEU, Markus K. Brunnermeier and Jean-Pierre Landau on the applicability of central banking tools for the climate crisis: "The conventional wisdom on monetary policy is that it has no impact on long-term growth; its influence is mostly felt on a 1.5 to 2.5 years horizon. By contrast, climate change is all about the long term; effects and policies materialize and matter over several decades." Link.
- An IMF report by Pierpaolo Grippa, Jochen Schmittmann, and Felix Suntheim surveys the field: "Climate change will affect monetary policy by slowing productivity growth (for example, through damage to health and infrastructure) and heightening uncertainty and inflation volatility." Link.
- As governor of the Bank of England, Mark Carney gave an oft-cited 2015 speech, proposing a scheme of physical risks, liability risks, and transition risks. Link. And Jean Boivin argues for abandoning CBI in the face of Covid. Link.
The geography of US immigration detention
Assistant Professor of Sociology at Washington University in St. Louis MARGOT MOINESTER studies the growth of US immigration enforcement. In a 2018 paper in Demography, Moinester examines the spatial variation in detention practices and outcomes across states.
From the paper:
"Focusing on the practice of immigration detention, the study analyzes the records of all 717,160 noncitizens detained by Immigration and Customs Enforcement (ICE) in 2008 and 2009—a period when interior enforcement was at its peak—to estimate states’ detention rates and examine geographic variation in detention outcomes, net of individual characteristics. Findings reveal substantial state heterogeneity in immigration detention rates, which range from approximately 350 detentions per 100,000 noncitizens in Connecticut to more than 6,700 detentions per 100,000 noncitizens in Wyoming. After detainment, individuals’ detention outcomes are geographically stratified, especially for detainees eligible for pretrial release. These disparities indicate the important role that geography plays in shaping individuals’ chances of experiencing immigration detention and deportation."
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- "As in the 19th century, the lines between the imperial core and its dependencies are blurred, those dependencies have differential status in the imperial hierarchy, and a single currency is an important bulwark of that empire." New Phenomenal World post by UVA economic historian Herman Mark Schwartz, on the geopolitics of the global dollar system. Link.
- Join us on Tuesday July 21 for the second in our Social Wealth seminar series. Yakov Feygin will present on "Sovereign Wealth Funds and Public Wealth Building Institutions in the Context of the Global Dollar System." To attend, please RSVP at firstname.lastname@example.org, to read more about the series click here, and click here to view a recording of the first session with Naomi Zewde.
- On Thursday July 23, we are co-sponsoring The Dial's event with Zachary Carter on his bestselling and widely-lauded biography of Keynes, The Price of Peace. Carter will be in conversation with Ian Kumekawa, author of The First Serious Optimist, a book about A.C. Pigou and the birth of welfare economics. Link to the event page.
- Elizabeth Linos looks at the electoral effects of the Honduran PRAF conditional cash transfer, finding major rewards for mayors, despite their being randomly assigned to the treatment. Link.
- A tale of two wage subsidies: comparing American and Australian responses to Covid. By Steven Hamilton. Link.
- A new paper by Mark Ellis on southern sociologist TJ Woofter Jr.'s contributions to New Deal policymaking. Link.
- From Nathan Tankus' Notes on the Crises, a great piece by Philip Rocco on fiscal federalism and the defunct Advisory Commission on Intergovernmental Relations. Link. For more on the ACIR: a paper by Bruce McDowell marking its shuttering in 1996. Link.
- Alexander Kentikelenis and Sarah Babb on "norm substitution" and the transformation of the IMF. Link.
- Inés Berniell et al on the impact of noncontributory Argentine pension reform on household gender relations. Link.
- On academic urban legends: "I draw upon a case in which a decimal point error appears to have misled millions into believing that spinach is a good nutritional source of iron." Link.
- A new paper by Sriram Balasubramanian, Rishabh Kumar, and Prakash Loungani on the locational variation in living standards in India. Link.
- "At the end of the eighteenth century, the large-scale warfare that confronted the major European powers exceeded their financial capabilities. By the 1790s, French, British, and Dutch naval crews resorted to mutiny on an enormous scale. They were driven by fatigue, harsh conditions of service, and disagreements with higher command. Decades later, the Real Armada witnessed a series of riots, resembling those of its rival powers but linked to the struggles for independence in the Hispanic-American colonies. During the 1810s and 1820s, naval mutinies developed alongside progressive radicalism and a growing desire to engage in politics—which explains why more than one crew ended up delivering their vessel to anti-colonial factions." On the "republican" mutinies in the Spanish Navy, by Vera Moya Sordo. Link.