The Persistent Decline in Asset Utilization and the Investment-q Paradox

This is a paper by Gustavo Grullon and David Ikenberry. Here is the abstract Despite Tobin’s q nearly doubling since the mid-1970s, the rate of corporate investment has fallen dramatically. We shed light on this paradox by decomposing q into three components relating to valuation, profitability, and asset utilization. This decomposition reveals that investment is […]

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Some Alternative Monetary Facts

… is the name of a recent IMF working paper by Peter Stella, Manmohan Singh and Apoorv Bhargava. The title is inspired by a 1995 paper “Some Monetary Facts” against which they argue amongst other things. As the following charts show we have recently seen an explosion in both base money and M2 in the […]

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Monetary Policy Under Financial Repression

Monetary Policy Under Financial Repression is a great blog post by Michael Pettis, in which he explains the nature of financial repression (although I believe there are different interpretations/definitions) and puts it into historical context. Financial repression is one of the tools that generated enormous GDP growth in China in the past decades, similarly though […]

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