1,035 research outputs found
Real business cycles: a legacy of countercyclical policies?
Get PDFIf business cycles are caused mostly by changes in productivity, rather than by monetary and financial disturbances, what role do monetary and fiscal policies play? In this article, Satyajit Chatterjee discusses the possibility that countercyclical monetary and fiscal policies have played an important role in reducing the severity of business cycles since World War II but that additional countercyclical policies that try to offset movements in productivity aren't likely to be beneficialBusiness cycles
Why does countercyclical monetary policy matter?
Get PDFSatyajit Chatterjee outlines the mainstream view of the benefits of countercyclical monetary policy and the challenge posed to it by recent microfoundations-oriented research. He also considers how this challenge may alter our views about the benefits of countercyclical monetary policy.>Monetary policy
De-leveraging and the financial accelerator: how Wall Street can shock main street
Get PDFThe severity of the recent economic downturn raises questions about the role of financial markets in modern market economies. Why did rising defaults in a relatively small portion of the U.S. housing market cause a financial crisis? Why do financial crises have outsized adverse effects on the rest of the economy? As a general rule, a decline in economic activity in the nonfinancial sector, such as occurs during a typical recession, induces greater restraint on the part of the financial sector and that restraint - manifested usually in a pullback of credit and funding - in turn causes further setbacks to the nonfinancial sector. In the academic literature, this feedback effect is called the financial accelerator. In "De-Leveraging and the Financial Accelerator: How Wall Street Can Shock Main Street," Satyajit Chatterjee looks at what underlay the financial shock that emanated from Wall Street in the fall of 2007. Then he focuses on the channels through which the financial accelerator works and how the accelerator can turn a financial market disruption into a deep recession.Financial crises ; Recessions
"The fruits of independence": Satyajit Ray, Indian nationhood and the spectre of empire
Get PDFChallenging the longstanding consensus that Satyajit Ray's work is largely free of ideological concerns and notable only for its humanistic richness, this article shows with reference to representations of British colonialism and Indian nationhood that Ray's films and stories are marked deeply and consistently by a distinctively Bengali variety of liberalism. Drawn from an ongoing biographical project, it commences with an overview of the nationalist milieu in which Ray grew up and emphasizes the preoccupation with colonialism and nationalism that marked his earliest unfilmed scripts. It then shows with case studies of Kanchanjangha (1962), Charulata (1964), First Class Kamra (First-Class Compartment, 1981), Pratidwandi (The Adversary, 1970), Shatranj ke Khilari (The Chess Players, 1977), Agantuk (The Stranger, 1991) and Robertsoner Ruby (Robertson's Ruby, 1992) how Ray's mature work continued to combine a strongly anti-colonial viewpoint with a shifting perspective on Indian nationhood and an unequivocal commitment to cultural cosmopolitanism. Analysing how Ray articulated his ideological positions through the quintessentially liberal device of complexly staged debates that were apparently free, but in fact closed by the scenarist/director on ideologically specific notes, this article concludes that Ray's reputation as an all-forgiving, ‘everybody-has-his-reasons’ humanist is based on simplistic or even tendentious readings of his work
From cycles to shocks: progress in business-cycle theory
Get PDFBoom leads to recession, recession to boom, and the economy is caught in a self-sustaining cycle. Or is it? More recent economic theory states that cyclical fluctuations in the economy are caused by shocks and other disturbances that continually buffet the economy. In this article, Satyajit Chatterjee examines the historical process by which the explanation of fluctuations in the economy has evolved from a theory of cycles to one of shocks.Business cycles
Agglomeration economies: the spark that ignites a city?
Get PDFIn "Agglomeration Economies: The Spark That Ignites a City?" Satyajit Chatterjee discusses his research, which questions this belief. He finds that while agglomeration economies are important, they're not the most important factor in the spatial concentration of employment. The combined effects of factors unrelated to agglomeration economies, such as the availability of natural resources and local economic policies, appear to account for the bulk of the spatial concentration of U.S. employment.Employment (Economic theory)
The economic logic of a fresh start
Get PDFA debtor’s right to have his or her debts dismissed or discharged via a bankruptcy proceeding is referred to as the law’s “fresh start” provision. Fresh start has been — and continues to be — a controversial feature of the U.S. bankruptcy law. Lately, the law has come under scrutiny because of the dramatic rise in personal bankruptcy filings over the past 25 years. In “The Economic Logic of a Fresh Start,” Satyajit Chatterjee explains the economic logic underlying the fresh start concept. He also argues that this logic can explain why opposition to a discharge policy has waxed and waned over time. ; Also issued as Payment Cards Center Discussion Paper No. 08-04Bankruptcy
Taxes, homeownership, and the allocation of residential real estate risks
No full textHome equity is the predominant form of savings for most Americans because it helps them save on taxes. However, homeownership also determines how the risks of fluctuations in the value of residential real estate are borne. In this article, Satyajit Chatterjee looks at how the tax benefit of homeownership has moved households toward undiversified investments in risky residential real estate by making it costly for them to rent their homes. He also points out the often overlooked risk-allocation consequences of proposed changes in the U.S. tax code.Housing ; Real property ; Taxation
The Taylor curve and the unemployment-inflation tradeoff.
Get PDFThe subject of our next article, "The Taylor Curve and the Unemployment-Inflation Tradeoff," by Satyajit Chatterjee, is finding an optimal monetary policy menu. In the past, monetary policy options were described in terms of a tradeoff between the unemployment rate and the inflation rate, the so-called Phillips curve. Macroeconomists no longer view the Phillips curve as a viable “policy menu” because its use as such is inconsistent with mainstream macroeconomic theory. In the late 1970s, John Taylor suggested an alternative set of options for policymakers to consider, one that is consistent with macroeconomic theory. These alternative options involve a tradeoff between the variability of output and the variability of inflationUnemployment ; Inflation (Finance) ; Monetary policy
A theory of asset price booms and busts and the uncertain return to innovation
Get PDFMany observers believe that turbulence in asset prices results from bouts of optimism and pessimism among investors that have little to do with economic reality. While psychology and emotions are no doubt important motivators of human actions, an explanation for asset price booms and busts that ignores the fact that humans are also thinking animals does not seem entirely satisfactory or plausible. In this article, Satyajit Chatterjee presents a counterpoint to the view that “it’s all psychology.” He reports on a theory of asset price booms and busts that is based entirely on rational decision-making and devoid of psychological elements. The explanation suggests that asset price booms and crashes are most likely to occur when the value of the asset in question depends on an innovation whose full profit potential is initially unknown to investors.Asset pricing
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