19 See Sam Dillon “Obama to Seek Sweeping Change in ‘No Child’ Law,” New York Times, February 1, 2010.
20 See Haskin and Sawhill, Creating an Opportunity Society, 149.
21 Ibid., 153.
22 Ibid., 158.
23 This paragraph is based on David Deming and Susan Dynarski, “Into College and Out of Poverty? Policies to Increase the Post-Secondary Attainment of the Poor,” NBER Working Paper 15387, National Bureau of Economic Research, Cambridge, MA, 2009.
24 Susan Dynarski, The Economics of Student Aid, NBER Reporter Research Summary 2007, no. 1, National Bureau of Economic Research, Cambridge, MA, 2007.
25 OECD, Health Data 2008: Statistics and Indicators for 30 Countries (Paris: Organization for Economic Co-operation and Development, 2008).
26 The peer group consisted of Canada, France, Germany, Japan, Switzerland, and the United Kingdom. See Alan Garber and Jonathan Skinner, “Is American Healthcare Uniquely Inefficient?” Journal of Economic Perspectives 22, no. 4 (Fall 2008): 27–50.
27 This and the next paragraph rely on Garber and Skinner, “Is American Healthcare Uniquely Inefficient?”
28 Chris Peterson and Rachel Burton, US Healthcare Spending: Comparison with Other OECD Countries (Washington, DC: Congressional Research Service, 2007).
29 Andrew Pollack, “Hospitals Look to Nuclear Tool to Fight Cancer,” New York Times, December 26, 2007.
30 See Garber and Skinner, “Is American Healthcare Uniquely Inefficient?”
31 Katherine Baicker, Elliott S. Fisher, and Amitabh Chandra, “Malpractice Liability Costs and the Practice of Medicine in the Medicare Program,” Health Affairs 26, no. 3 (May–June 2007): 841–52.
32 For the highly paid workers in the financial sector, I argue that having a stake in the firm can improve incentives. However, some reasonable portion of their savings should be independent of the health of their firms.
33 See, for instance, Robert Shiller, The New Financial Order (Princeton, NJ: Princeton University Press, 2003), 118–19.
34 The next few paragraphs draw on my previous book with Luigi Zingales, Saving Capitalism from the Capitalists (Princeton, NJ: Princeton University Press, 2004).
35 Shlomo Benartzi and Richard Thaler, “Save More Tomorrow: Using Behavioral Economics to Increase Employee Savings,” unpublished manuscript, University of Chicago.
Chapter Ten. The Fable of the Bees Replayed
1 Bernard Mandeville, The Fable of the Bees (1714) (Oxford: Clarendon Press, 1957).
2 Ibid.
3 Yashwant Sinha, speech at World Economic Forum, Davos, Switzerland, January 2001.
4 Jeffry Frieden, “Global Imbalances, National Rebalancing, and the Political Economy of Recovery,” working paper, Council on Foreign Relations, New York, 2009.
5 Ibid.
6 “Leaders’ Statement: The Pittsburgh Summit,” Pittsburgh Summit, www.pittsburgh summit.gov/mediacenter/129639.htm, September 25, 2009.
7 M. Goldstein and N. Lardy, The Future of China’s Exchange Rate Policy (Washington, DC: Peterson Institute for International Economics, 2009).
8 See Dani Rodrik, “The Real Exchange Rate and Economic Growth,” working paper, Kennedy School of Government, Harvard University, 2008.
9 See George Monbiot, “Keynes Is Innocent: The Toxic Spawn of Bretton Woods Was No Plan of His,” Guardian, November 18, 2008.
10 See Eswar S. Prasad, “Is the Chinese Growth Miracle Built to Last?” China Economic Review 20 (2009): 103–23.
11 Economists will see that I am arguing here that the income effect swamps the substitution effect.
12 See Tarun Khanna and Yasheng Huang, “Can India Overtake China?” Foreign Policy (July–August 2003): 75–81.
Epilogue
1 Cited in “Counting Their Blessings,” Economist, January 2, 2010.
INDEX
The index that appeared in the print version of this title was intentionally removed from the e-Book. Please use the search function on your e-Reading device to search for terms of interest. For your reference, the terms that appear in the print index are listed below.
affordable housing mandate
Alesina, Alberto
Alger, Horatio
alpha (excess returns)
Alphatec
American International Group (AIG): bailout of compensation of employees and managers of credit default swaps of customers of financial problems of Financial Products unit of
Angeletos, George-Marios
annuities
antitrust regulations
Argentina: G-20 membership of state-owned enterprises in
Aristotle
arm’s length systems: of employment financial
Asia: economic growth in exchangerate policies in exports of financial crisis of financial systems in foreign debt of governments in recovery from crisissavings in, See also specific countries
asset-backed securities. See mortgage-backed securities
asset prices: departures from fundamentals increases in See also housing market
Australia, economic growth of
automobile industry: government
bailouts of in India
Bagehot, Walter
bailouts: of AIG of automobile industry of banks of Fannie Mae and Freddie Mac political consequences of shortcomings of
Bank of America
Bank of Japan
Bank of North Dakota
bankruptcies
banks: bailouts of boards of CEOs of compensation in competition among debt of deposit insurance for deposits in in developing countries failures of financial system roles of lending standards of loans to developing countries by mortgage-backed securities held by
mortgage lending process of off–balance sheet assets of organizational complexity of performance measurement in power of proprietary trading by regional revolving door with government risk exposures of risk managers in rural shareholders of short-term debt of state-owned stock prices of, too systemic to fail transparent structures of See also central banks; financialsystems; investment banks; regulationbanking
Barofsky, Neil
Bear Stearns
behavioral economics
Benartzi, Shlomo
benchmarking
Bernanke, Ben
Bloomberg, Michael
bond holders
bonds: covered insurers of See also government bonds; interest rates
Brandeis, Louis
Brazil: economic reforms in exchange-rate policies of financial crisis in interest spreads in
brokers, mortgage
Brown, Gordon
bubbles: development of dot-com Federal Reserve policies and in Japan, See also housing market
budget deficits, federal
buffers, capital
bureaucracies
Bush, George H. W.
Bush, George W.
Bush (George W.) administration
businesses. See firms
business schools
Calomiris, Charles W.
Camdessus, Michel
Canada, health care costs in capital: buffers contingent organizational physical requirements for banks venture See also human capital
capitalism: competitive markets in crony, free-enterprise, relationship (managed) self-interest in
Carville, James
Cassano, Joseph
Cayne, James
CDOs. See collateralized debt obligations
central banks: Chinese of developing countries objectives of purchases of dollar assets regulatory responsibilities of resources for managing crises See also Federal Reserve; interest rates; monetary policy
chaebols
Chanos, James
charitable giving
charter schools
children: Chinese one-child policy development of health and nutrition of, See also education
Chile, economic growth of
China: consumption in economic growth of energy consumption in exchange-rate intervention
by export-led growth strategy of exports of foreign reserves of interest rates in investment in middle class in one-child policy of reforms in savings in state-owned enterprises in
Chrysler
Citigroup: board members of
CEO of off–balance sheet assets of risk managers of risks taken by salaries in stock price of
climate change
Clinton, Bill
Clinton administration
CLOs. See collateralized loan obligations
cognitive capture
Cole, Shawn
collateralized debt obligations (CDOs)
collateralized loan obligations (CLOs)
colleges. See higher education
Community Reinvestment Act (CRA)
conglomerates
consumption: in China in developing countries discouragement of of energy excess in Japan of middle class political pressure for economic stimulus to in United States
contingent capital
corruption
CRA. See Community Reinvestment Act credit: benefits and costs of easy definition of democratization of
credit card debt
credit default swaps
credit markets: access to in developing countries expansion of government intervention in informal microcredit political pressure for easy credit See also subprime mortgage market
credit ratings, of mortgage-backed securities
crises. See financial crises
crony capitalism
currencies. See exchange-rate policies
current-account balances
debt: consumer government household negative views of,See also credit markets; foreign debt; mortgages
Defoe, Daniel, A Plan of the English Commerce
demand: in housing market interest rate levels and in United States, See also consumption
democracies
democratization of credit
Dennis, William
deposit insurance
deregulation
developing countries: central banks of consumption in current-account surpluses of
economic growth of excess
savings of exchange-rate policies
of, financial systems of
foreign debt of
foreign
exchange reserves of foreign
investment in microcredit
in organizational capital in
poverty in trade deficits
of trade surpluses of
Dimon, Jamie
disability payments
dot-com bubble
Douthat, Ross
early developers
earthquake, Haitian
earthquake insurance
East Asia. See Asia; specific countries
East India Company
economic growth: of developing countries financial sector role in global policy coordination for of industrial countries of late developers moderated fluctuations in monetary policy and See also export-led growth strategies; recessions
economists: debates on credit access
failings of technology used
education: accountability class sizes distance early childhood family influences and formal human capital formation improving quality of increased attainment rates inequality in intrinsic worth of No Child Left Behind Act ongoing parental choice quality of relationship to incomes school year lengths student performance of teachers teaching quality technology in, See also higher education
efficient markets hypothesis
elevator ladies
Elizabeth I, Queen
Embraer
Emmanuel, Rahm
employment: Federal Reserve policies and hiring process and jobless recoveries layoffs motivations in on-the-job training political pressure for economic stimulus portable benefits sabbaticals skills needed in technological change and temporary See also labor force; unemployment rates
employment benefits. See health insurance
energy use
England, See also United Kingdom
Enron
environmental sustainability
Europe: covered bonds held by banks firms in, See also specific countries
European Central Bank
European Union (EU)exchange-rate policies: of Brazil of China of developing countries of India of Japan
expectations hypothesis
export-led growth strategies: of China dependence on foreign consumers, in future of Germany of Japan of late developers managed capitalism and success of transition to balanced economy weaknesses of
exports: of China, of India of Japan, of South Korea of Taiwan, See also trade
The Fable of the Bees (Mandeville) family influences on education and human capital
Fannie Mae (Federal National Mortgage Association): establishment of foreign investors in government takeover of, lending to support housing prices losses of mandate of mortgage-backed securities issued by, reforms of role in subprime crisis
fault lines: consequences of in future geological income inequality in United States as interaction of arm’s-length and relationship-based financial systems political reforms needed to address systemic trade imbalances
FDIC Improvement Act of
Federal Deposit Insurance Corporation (FDIC)
Federal Home Loan Mortgage Corporation. See Freddie Mac
Federal Housing Administration (FHA)
Federal National Mortgage Association.
See Fannie Mae
Federal Reserve: Bernanke as chairman of Bernanke as governor of establishment of Greenspan as chairman of Greenspan put and healthy-economy mandate of independence of inflation-fighting policies of influence of interest-rate cuts by, interest-rate hikes by interest-rate policies of mistakes by mortgage-backed security purchases by objectives of political pressures on reforms of regulatory responsibilities of responses to recession of Survey of Consumer Finances
Federal Reserve Bank of Kansas City
Feldstein, Martin
Ferguson, Niall
FHA. See Federal Housing Administration
financial crises: of Asian (1998) in India in Japan Mexican (1994) resilience of systems resources for managing See also fault lines
financial markets See also securitization; stock market
financial systems: arm’s length, competition in deregulation of of developing countries economic growth and incentives in innovation in monetary policy and public distrust of redundancy in reforms in regulation of relationship-based resilience of, See also banks; investment banks
firms: conglomerates differences between American and other political power of regulation of,See also banks
fiscal stimulus: discretionary in jobless recoveries Keynesian doctrine of Obama administration package (2009) political
pressure for in United States
FNMA (Federal National Mortgage Association). See Fannie Mae
food prices
foreign debt: of developing countries fickleness of financers, in foreign currencies, Mexican crisis (1994) reducing short-term
foreign exchange reserves: of China of developing countries
foreign investment: in developing countries in East Asia in mortgage-backed securities in U.S. government bonds
Formosa Plastics Group
France: annuities sold by monarchy automobile industry in energy consumption in health care costs in social welfare spending in state-owned enterprises in unemployment benefits in
Franklin, Benjamin
Fault Lines: How Hidden Fractures Still Threaten the World Economy Page 35
