Category: Economics
Questions On Whether Internal Devaluation Will Work For Europe
While most people are tuned in to the failure of the ruling coalition in Germany to get their man Christian Wulff elected president, there are other more important numbers out today. Unemployment in Germany fell to 7.5% in the last month. This is one of the best unemployment figures in all of Euroland. The drop
Why Stimulus Is No Panacea
I fully support deficit spending as a means to prevent a debt deflationary spiral in a deep downturn. However, there are limits to what stimulus can actually do. Stimulus is no panacea for an unbalanced economy. In particular, when large imbalances build up, deficit spending is limited and can actually perpetuate the existing imbalances and
Demographics and Macroeconomics – Part 1 (Wonkish)
Blog post series, like the vuvuzela, is the new bacon; it works with everything and with John Hempton’s recent excellent series on the economics of default in the Eurozone and Edward Hugh’s recent postings on AFOE in which he pulls out some of our old paper abstracts has inspired me to a series in which I
What might history tell us about the Greek crisis?
By Michael Pettis. With the PBoC’s currency announcement last Saturday and the surge (!) in the value of RMB on Monday (all very kindly timed to add zest to my meetings this week in Boston, New York, and Washington), you would assume that today’s entry would be all about the RMB and the effect of
Resource Hawk, Stimulus Dove
It’s not my position. But I would think someone would articulate it. It sounds like what Mark Thoma would advocate, for example. That is, someone could advocate: 1 A larger deficit in the short term. 2. Specific, clear measures to reduce deficits over the next ten years, by trimming entitlements and raising taxes. 3. Linking
A Flock of Fed Funds Forecasts
A post by Annaly Capital Management. There has been some chatter recently on the direction of traditional monetary policy (i.e., the Federal Reserve changing the Fed Funds target rate to influence the availability and cost of money and credit to help promote national economic goals), with most of it involving a pushing out of the
Money the government owes us
Just as a point of fact, it bears noting that government debt is a government liability in much the same way that bank notes are. what is the functional difference for the federal government between Treasury securities and bank notes? Both are liabilities of the federal government. But liabilities of what? The only obligation they
Delta in the Value of a Promise
By Annaly Capital Management. What is a dollar? As far as we can tell, there is no legal definition of what it is, no statement that begins, “The dollar is…” Instead, the dollar is something that is defined by other things. When the Federal Reserve was created by the Federal Reserve Act of 1913, the
Alpha Creditor Revaluations in the 1930s versus the 2010s
I am trying to make sense of the revaluation talk that surrounds the Sino-American trade relationship. Here are some thoughts on the issue. Your comments are appreciated. In the 1920s, the United States was the Alpha Creditor having taken on a huge manufacturing role after Europe’s collapse during the First World War. At the time,
Migration Flows and Economic Sustainability In The Baltics
Here’s the third in the series of paper abstracts submitted to the Bologna conference in 2007 and which weren’t considered sufficiently interesting to be selected for presentation. This time the topic is migration and the Baltics, and the authors are Aapo Markkenen and Claus Vistesen. (for the two previous abstracts, and more about what this
A Word Of Thanks To The IMF
That was the week that was, it’s over, let it go……. Well I don’t suppose it’s that often that people get the opportunity to enthuse about the International Monetary Fund. Normally you find people like Joseph Stiglitz, or Naomi Klein, who are bitterly critical (often for many of the wrong reasons, here, and here). But
Is High and Increasing Government Debt to GDP a Sign of Malinvestment?
This is a question I have been struggling with since the sovereign debt crisis began. So let me run a little of it by you. This may be half-baked but I would love some comments. In a perfect world, we would have full employment and resources allocated efficiently in society. In that world, my assumption