University Professor of Economics, Otto-Friedrich-Universität Bamberg
[…] As widely known, the main feature of the Volcker Rule is the prohibition to commercial banks to engage in proprietary trading, whereby the customers’ deposits are used for trading activities by banks on their own behalf. In this sense, the Volcker Rule has been considered by many as just a partial reestablishment of the Glass-Steagall Act of 1933, which prohibited any institution from acting as any combination of an investment bank, a commercial bank and an insurance company.
While it is true that the recent financial crisis was not caused by proprietary trading by commercial banks, tackling this open flank in financial regulation is vital for the establishment of a sound and sustainable financial system. Indeed, as we discussed in a recent paper (Chiarella, Flaschel, Hartmann and Proaño 2012) in a stylized theoretical macroeconomic framework, an increasing orientation of commercial banks towards trading activities in detriment to their classical lending activity for real investment purposes may lead to financial and macroeconomic instability. […]
This a short excerpt of my most recent Economonitor blog post “The Volcker Rule is a Necessary, but not a Sufficient Condition for Macrofinancial Stability” with Florian Hartmann, Carl Chiarella and Peter Flaschel. You can find the blog post on the Economonitor website
Check it out!
Unfortunately, it’s in German… 😉 So if you are comfortable with that beautiful language, or just want to check out how do you say “paradox of thrift” in German, you can check it out here.
Additionally, our theoretical paper on broad and narrow banking and macroeconomic stability has been accepted for publication at Journal of Economic Behavior and Organization. You can find the most recent version of it here.
And finally, Mikael Bask (Uppsala University) and I finished a paper on learning, which is now available online here.
Some people say that a good way to start a new year is to make a recapitulation of what one did in the previous year.
In general terms, 2011 was for me one of the most demanding years of my life from the professional perspective. At The New School I taught undergraduate and graduate courses (and you can guess which level was more demanding in terms of preparation time and teaching ability…), and engaged in a number of new projects both with old coauthors and some new ones which I will continue in 2012 (the next post will be on my 2012 research outlook).
Various studies which I worked on during the past years were also published in 2011. Here are the most relevant ones:
- Flaschel, P, Greiner, A., Logeay, C. & Proaño, C.R. (2011), Employment Cycles, Low Income Work and the Dynamic Impact of Minimum Wages. A Macro Perspective. Journal of Evolutionary Economics (6 July 2011), 1-16.
- Charpe, M., Flaschel, P., Hartmann, F. & Proaño, C.R. (2011), Stabilizing an Unstable Economy: Fiscal and and Monetary Policy, Stocks, and the Term Structure of Interest Rates. Economic Modelling, 28(5), 2129-2136, Sep.
- Asada, T., Chiarella, C., Flaschel, P., Mouakil, T. Proaño, C.R. & W. Semmler (2011), Stock-Flow Interactions and Disequilibrium Macroeconomics: The Role of Economic Policy, Journal of Economic Surveys, 25(3), 569-599, July.
- Proaño, C.R., Flaschel, P., Krolzig, H.M. & Diallo, M.B. (2011), Monetary Policy and Macroeconomic Stability under Alternative Demand Regimes. Cambridge Journal of Economics 35(3), 569-585.
- Asada, T., Flaschel, P., Greiner, A. & Proaño, C.R. (2011), Sustainable Capitalism: Full-Employment Flexicurity Growth with Real Wage Rigidities. Journal of Economic Behavior and Organization, 77(4), 248-264, Mar.
- Proaño, C.R. (2011), Exchange Rate Determination, Macroeconomic Dynamics and Stability under Heterogeneous Behavioral FX Expectations. Journal of Economic Behavior and Organization, 77(2), 177-188, Feb.
In a joint effort with my former collegues at the IMK Sven Schreiber, Thomas Theobald, Sabine Stephan, Katja Rietzler, and Daniel Detzer I worked on an expertise for the the German Federal Ministry of Finance on the development of a recession forecasting model based on my IMK Working Paper 10/2010.
Toichiro Asada, Peter Flaschel and Tarik Mouakil and I publish at Macmillan the book Asset Markets, Portfolio Choice & Macroeconomic Activity where among other things we highlighted the similarities between the modeling approach of the “Bielefeld School” (Barkley Rosser’s words) and the stock-flow consistent modeling put forward by Wynne Godley and his research team.
Together with Lance Taylor and Laura Carvalho, I also “engaged” in the US fiscal debt debate through a SCEPA working paper and a SCEPA blog post, and jointly with Willi Semmler and Christian Schoder I also had my three words to say about the external debt sustainability of euro area countries at EconoMonitor.
For the complete list of my publications, go here. If you want to check my most recent working papers, go here. I hope to be able to update this website on a more regular basis this year, and I would be happy if you check it out from time to time.
Based on our recent paper on the sustainability of the Euro Area current imbalances Christian Schoder, Willi Semmler and I have just published a blog post at Economonitor. Check it out!
In a new research paper Christian Schoder, Willi Semmler and I investigate, by means of parametric and non-parametric econometric techniques, to what extent the current account imbalances in the EMU can be considered as sustainable in the long run. Our estimations show that the present EMU imbalances do not seem to be sustainable, and that the introduction of the euro, and the related reduction in the exchange rate flexibility at the national level, may have aggravated these developments. A determined economic policy coordination seems thus be necessary if long-run sustainability of the current account imbalances is to be restored.