Articles By: Claus Vistesen

Claus Vistesen

Claus Vistesen is a Danish economist who specialises in macroeconomics. His primary research interests include demographics, macroeconomics and international finance.

Here are my most recent posts

The lower bound of central bank effectiveness

The lower bound of central bank effectiveness

Through the lens of someone looking at economies with rapidly ageing populations we can simply say that this problem arises because there isn’t any consumption to pull forward! Fisher’s interest theory was always valid, it is merely that in the context of a rapidly ageing population the consumption smoothing mechanism breaks for obvious and quite logical reasons. Quite simply, even in ZIRP you are not stealing a sufficient amount of “future” growth to kick-start the recovery because such future growth is not there.

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The big disconnect between leverage and spreads

The big disconnect between leverage and spreads

Market based information is telling us that spreads and leverage are now disconnected, fundamentals remain in-line with theory. Companies with higher net debt also have poorer liquidity positions.

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Japan: Negative current account will pressure currency

Japan: Negative current account will pressure currency

Remember that the rest of the world has so far accepted the experiment that is Abenomics not only because Japan has been running a current account deficit (thus making it more reasonable for Japan to weaken its currency), but also because the depreciation has so far been orderly. With a growing negative current account, the wheels are now set in motion for a decidedly disorderly depreciation of the JPY and one that could ultimately be life threatening for the Japanese economy.

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And the award for EM safe haven of choice goes to …

And the award for EM safe haven of choice goes to …

By Claus Vistesen … China! At least this is the conclusion from some fascinating number crunching from JPMorgan’s Flow & Liquidity team in their report last week. I had a feeling that this was the case looking at the surge in Chinese FX reserve growth (capital inflows) in the past 6-12 months, but it is still interesting to see such […]

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As labor force participation declines, should the Fed tweak its forward guidance?

As labor force participation declines, should the Fed tweak its forward guidance?

The issue should be well known for US economy watchers. The unemployment rate has declined noticeably but if we factor in the declining labour force participation rate the picture looks largely unchanged. Should the Fed, then, shift focus to some alternative measure of labor market slack?

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The Civil War in Macroeconomics

The Civil War in Macroeconomics

In principle I think Krugman is right to have a go at micro foundations. I have criticised the concept myself for ignoring the potential for research paradigms that are purely macroeconomic in nature. In this sense, the fact that Krugman puts his weight behind this critique is important.

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Yield Bubble Intact and Inflating

Yield Bubble Intact and Inflating

Emerging economies are reeling as rising US bond yields are squeezing the most vulnerable and funding intensive parts of the market. But the squeeze in EM yields is merely an hors d’oeuvre to what is likely waiting in the wings.

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When Safe Havens Fall

When Safe Havens Fall

So what is a safe haven you might ask? Well I certainly don’t have the final answer, but I would suppose it should as many as the following characteristics as possible.

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Emergency Liquidity Assistance In The Eurozone – Draghi’s Irreversible Euro Put Explained

Emergency Liquidity Assistance In The Eurozone – Draghi’s Irreversible Euro Put Explained

While the ECB may certainly now buy as many peripheral bonds as it wishes if it deems convertibility risk to be a real issue money is already trickling into cash strapped peripheral economies through the arcane tool of emergency liquidity assistance (ELA)

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The Denial on Housing in Spain

The Denial on Housing in Spain

This post highlights a brilliant piece of journalism by Bloomberg reporters Sharon Smyth, Neil Callanan and Dara Doyle. The story takes us to Spain and Ireland and the former’s denial with regards its housing market. A passage that was particularly staggering was the comments by Miguel Angel Garcia Nieto, mayor of Avila (a town showcased in the article), that this is just an interim soft spot as a result of the crisis and that oversupply and overcapacity will eventually be absorbed. Hope, as they say, springs eternal.

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The Curious Case Of Liquidity Traps And Missing Collateral – Part 1

The Curious Case Of Liquidity Traps And Missing Collateral – Part 1

In this first post of a series of 3-5 posts, I try to present the building blocks of the argument as I see them and answer the question of why the traditional view on the liquidity trap does not apply in the current situation.

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Time Unlikely To Be A Healer For Portugal’s Economy

Time Unlikely To Be A Healer For Portugal’s Economy

Despite comparisons with Greece, Portugal is not in entirely the same situation, at least not yet it isn’t. Crucially, Portugal is currently under no obligation to deal with international or national creditors to increasing government debt issuance courtesy of joint aid programme administered by the EU and the IMF. So far so good. Portugal has time and while I am as certain as an economist can be that the country will need debt restructuring, the time between here and there may still prove crucial.

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