The Economist Explains: “Why the German economy is in a rut“, The Economist, 21 October 2014. In the second quarter of this year the German economy shrank by 0.2%. Economists expect it to contract again in the third quarter, meaning that the economy will technically be in recession. Some believe that the economy will not grow until the middle of next year. This performance has taken some people by …Read More
Meltzer, P. J. (2014) “The Importance of the Internet and Transatlantic Data Flows for US and EU Trade and Investment“, Global Economy & Development – Brookings Institute, Working Paper 79, October 2014. The most globally significant bilateral trade and investment relationship is between the US and the EU An increasing amount of this economic relationship is underpinned by cross-border flows of data. Cross-border data flows between the US and …Read More
Hugh, E. (2014) “Does The Secular Stagnation Theory Have Any Sort of Validity?“, A Fistful of Euros: European Opinion Blog, 20 October. In a number of blog-posts (Paul Krugman’s Bicycling Problem, On Bubble Business Bound, The Expectations Fairy) I have examined some of the implications of the theory of secular stagnation. But I haven’t up to now argued why I think the hypothesis that Japan and some parts of …Read More
Dixon, H. (2014) “A New Euro Crisis?“, Reuters Breaking Views, 20 October. The markets are right to worry about the euro zone, the epicentre of last week’s fright. Its three big economies -Germany, France and Italy- are, in their own ways, stuck. There is, in theory, a grand bargain that might shift the malaise. This would involve deep structural reform by Berlin as well as Paris and Rome; quantitative …Read More
Reinhart, M. C., Trebesch, C. (2014) “Sovereign-debt relief and its aftermath: The 1930s, the 1990s, the future?“, VoxEU Organisation, 21 October. To work towards resolving Europe’s ongoing debt crisis this column looks to the past. From the recent emerging market debt crisis (1980s-2000s) and the interwar episode of the 1920s-1930s we learn that debt write-downs and defaults are able to be postponed but not prevented. Punishment for default is …Read More
Dolan, E. (2014) “Why Should Europe (or Anyone Else) Fear Deflation?“, Economonitor Blog, 20 October. Europe is fearful as it teeters on the brink of deflation. As the chart shows, September consumer prices in the eurozone were just 0.3 percent higher than in the same month a year earlier. That is far below the 2 percent inflation target set by the European Central Bank (ECB). Five countries were already …Read More
Mitchell, B. (2014) “The UK recovery is a false dawn“, Bill Mitchell Blog: Modern Monetary Theory … macroeconomic reality, 18 October. A few weeks ago (October 1, 2014), I wrote in this blog – British economic growth shows that on-going deficits work – that the British Chancellor was overseeing an expanding fiscal deficit and public debt ratio, which despite the rhetoric to the contrary, was supporting growth and helping …Read More
Durden, T. (2014) “The ECB Changes Its Mind Which Bonds It Will Monetize, Then It Changes It Again“, ΘZeroHedge, 20 October. To get a sense of just how chaotic, unprepared, confused and in a word, clueless the ECB is about just its “private QE”, aka purchases of ABS, which should begin in the “next few days” (but certainly don’t hold your breath) – let alone the monetization of public …Read More
Chambers, D. & Dimson, E. (2014) “The British origins of the US endowment model“, VoxEU Organisation, 20 October. Yale University has generated annual returns of 13.9% over the last 20 years on its endowment – well in excess of the 9.2% average return on US university endowments. Keynes’ writings were a considerable influence on the investment philosophy of David Swensen, Yale’s CIO. This column traces how Keynes’ experiences managing …Read More
Michaelides, Al., (2014), “Cyprus: from boom to bail-in”, Economic Policy, Vol. 29, Issue 80, pp. 639-689. This is a case study of how a country nearly reached bankruptcy in March 2013, within five years of entering the eurozone. The magnitude of the requested assistance is extremely large relative to GDP (100%) and studying this event provides useful lessons for avoiding such crises in the future. The crisis resulted from a …Read More
