The Old Allure of New Money

Practically no one, outside of computer science departments, can explain how cryptocurrencies work, and that mystery creates an aura of exclusivity, gives the new money glamour, and fills devotees with revolutionary zeal. None of this is new, and, as with past monetary innovations, a seemingly compelling story may not be enough.

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The Next New Thing in Finance — Bonds Linked Directly to the Economy

When the next big recession comes, we’ll be much better off if governments have established a new kind of bond tied to the ups and downs of the economy.

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The Trump Boom Is Making It Harder to See the Next Recession

When big shifts like recessions are on the way, economists just aren’t very good at predicting them.

The truth is that we really can’t foresee where the economy will be heading in a year or two, a limitation that is particularly troubling right now, in the midst of what may be called the Trump economic boom.

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Making the Case for Sovereign GDP-Linked Bonds

The crises that erupted in countries like Ireland and Greece a decade ago would not have been so severe had their debt been linked to their economic performance. And the same is true today: Investors around the world will continue to accept the risk, given the unlimited upside to investing in entire economies.

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Consumer Confidence Is Lifting the Economy. But for How Much Longer?

Amid the constant turmoil in domestic and global politics these days, the economy’s steady expansion has been a source of comfort. But look more closely and you will find that economic growth rests on a surprisingly amorphous base: consumer confidence.

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The World’s Priciest Stock Market

It is impossible to pin down the full cause of the high price of the US stock market. That alone should remind all investors of the importance of diversification, and that the overall US stock market should not be given too much weight in a portfolio.

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Continuous Workout Mortgages: Efficient Pricing and Systemic Implications

By Robert J. Shiller, Rafal M. Wojakowski, M. Shahid Ebrahim, and Mark B. Shackleton

This paper studies the Continuous Workout Mortgage (CWM), a two in one product: a fixed rate home loan coupled with negative equity insurance, to advocate its viability in mitigating financial fragility.

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