Suchergebnisse

This collection of essays reflects on how modern economics has been shaped by Joseph Stiglitz. High-profile authors spanning microeconomics, macroeconomics, inequality, development, law and economics, and public policy take up the central debates and discoveries of the field and provide insights on the future directions of academic economics

Abstract
This paper reviews the IMF DSA (Debt Sustainability Analysis) framework. We first examine the concept of debt sustainability, and argue that the evaluation exercise necessarily entails putting into question market expectations embodied in yield spreads. When the views of the analyst on the capacity of debt repayment differ from the ones reflected in market interest rate premiums, the use of market interest rates for assessing debt sustainability leads to an inconsistency that will in turn bias the assessment. We then show that IMF projections for assessing debt sustainability have been repeatedly biased, which may have contributed to distort the timing of sovereign debt restructurings and the consequent processes of renegotiation. We conclude with a discussion on how the existing DSA framework could be improved.

AbstractThe 2008 Global Financial Crisis, and the myriad other crises confronting economies around the world, exposed the inadequacies of the Dynamic Stochastic General Equilibrium models. These models not only hadn't predicted the crisis, its occurrence was completely outside of their framework. The framework assumes there are no macroeconomic inconsistencies—all plans are realized, all budget constraints honoured. But after each instance in which that assumption is proved wrong, say in a crisis, the DSGE models assume that kind of event won't happen again. By contrast, our framework explains why these inconsistencies arise and investigates the consequences, shows how large changes in the aggregate demand could trigger inconsistencies, explains the origins of such changes, and explains why decentralized market forces may be disequilibrating. We identify the crucial departures from the Arrow–Debreu assumptions underlying our results. We analyse the policy implications of this alternative theory, which typically are distinctly different from those of the standard model.

Abstract
This paper provides an explanation for situations in which the fundamental state variables describing the economy do not change, but aggregate consumption experiences significant changes. We present a theory of pseudo-wealth—individuals' perceived wealth that is derived from expectations of gains in bets arising from heterogeneous expectations. This wealth is divorced from society's real assets. The creation of a market for bets necessarily generates positive pseudo-wealth. Changes in the magnitude of differences of prior beliefs will lead to changes in expected wealth and hence to changes in consumption, implying instability in aggregate and individual consumption and ex post intertemporal consumption misallocations. Moreover, 'completing markets' through the creation of a new market for bets can increase individual and aggregate risk. With a utilitarian social welfare function, completing markets leads to lower welfare ex post, but the first theorem of welfare economics (evaluating each individual's well-being on the basis of her ex ante beliefs) still holds, raising unsettling questions for welfare analysis. We also show that if the planner uses beliefs that are consistent, then the betting equilibrium would be Pareto inferior.

Acknowledgments -- Introduction / Martin Guzman, Jose Antonio Ocampo, and Joseph E. Stiglitz -- General issues of sovereign debt restructuring -- Fixing sovereign debt restructuring / Martin Guzman and Joseph E. Stiglitz -- Sovereign debt of developing countries : overview of trends and policy perspectives / Marilou Uy and Shichao Zhou -- Public debt, private power : the political economy of sovereign debt governance / Skylar Brooks and Domenico Lombardi -- Two case studies : Argentina and Greece -- From the Pari passu discussion to the illegality to pay / Sergio Chodos -- Title TBD / Yanis Varoufakis -- Improvements to the contractual approach -- Count the limbs : designing robust aggregation clauses in sovereign bonds / Anna Gelpern, Ben Heller, and Brad Setser -- Contractual and voluntary approaches to sovereign debt restructuring : there's still more to do / Richard Gitlin and Brett House -- Creditor committees in sovereign debt restructurings : understanding the benefits and addressing concerns / Timothy Desieno -- Sovereign debt restructuring : a cosean perspective / James Haley -- Proposals for a multinational framework for sovereign debt restructuring : principles, elements, and institutionalization -- A brief history of sovereign debt resolution, and a proposal for a multilateral instrument / Jose Antonio Ocampo -- Towards a multilateral framework for recovery from sovereign insolvency / Barry Herman -- Making a legal framework for sovereign debt restructuring operational / Jurgen Kaiser -- Perspectives on a sovereign debt restructuring framework : less is more / Richard Conn -- Towards a framework for sovereign debt restructuring : what can public international law contribute? / Robert Howse -- Debts, human rights, and the rule of law : advocating a fair and efficient sovereign insolvency model / Kunibert Raffer -- Index.

"In this edited collection, Joseph Stiglitz and Martin Guzman present a series of studies on contemporary macroeconomic issues. The book discusses a set of key lessons for macroeconomic theory following the recent global financial crisis and explores unconventional monetary policy in a post-crisis world."--Publisher's description.