New CB's role

A note by WB chief economist. I see the new trend that the central bank's role is changing from a traditional lender of last resort to a more proactive financial agency to enhance growth and address unemployment, which was traditionally realm of government's structural reform. I am a little bit concerned on this trend, because it will surely buy time for the government to do its homework in advanced economies - structural reform in labor market, establishment of social security system etc.  

Austerity measures raises the concern over inter-temporal equity

Simon Johnson's excellent article on inter-temporal equity over fiscal austerity. Standard economic model that assumes indefinite time horizon may not be useful here. His quote...very true.

"Today’s children did not play a role in any of these policy mistakes. The preschoolers who are about to lose access to Head Start weren’t even born when they were made."