Vox's Holiday Break

The Editors, 25 December 2014

The Editors wish to thank all our readers and wish them a healthful and restful holiday break. Vox will start posting again on 2 January 2014.

Bank Resolution under T-LAC: The Aftermath

Charles A.E. Goodhart, 24 December 2014

The Financial Stability Board’s recent consultative document proposes dividing global systemically important banks into holding companies and operating subsidiaries so as to insulate the latter from a major loss. This column poses the question of what will happen after the holding company is liquidated or written down in order to recapitalise the operating subsidiary – a question as yet unanswered by the Financial Stability Board.

Commodity prices: Down in dollars, up in euros

Jeffrey Frankel, 24 December 2014

Commodity prices have been falling in the US. This column argues that monetary policy has played a determining role in the falling prices trend. Monetary tightening is highly anticipated in the US, which is likely to raise short-term interest rates. At the same time, the ECB and Bank of Japan have enhanced monetary stimulus through quantitative easing. As a result, the dollar has appreciated against the euro and the yen. In this way, commodities can be down in terms of dollars and up in terms of other currencies.

Not really cricket: Home bias in officiating

Abhinav Sacheti, Ian Gregory-Smith, David Paton, 24 December 2014

There has been interest among both sports fans and academics in whether pressure from home crowds affects decision making of officials. This column investigates this problem using new data from cricket matches. The authors find that neutral umpires decrease the bias against away teams, making neutral officials very important for a fair contest. 

Christmas economics: Challenging some common beliefs

Laura Birg, Anna Goeddeke, 24 December 2014

Christmas may be not so merry as we hope. Economists have argued that gift giving is an inefficient way to allocate resources, and it is widely suggested that Christmas brings a peak in prices and the number of suicides, or even disrupts the business cycle. This column discusses some conventional wisdom about Christmas and shows that economic research in fact runs counter to some of these common beliefs.

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