Economische aanraders 08-04-2018
Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 10 belangrijke of informatieve artikelen en interviews die de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.
De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden.
Sinds december 2015 nemen we ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.
A trade war will increase average tariffs by 32 percentage points – Alessandro Nicita, Marcelo Olarreaga, Peri da Silva
There are growing signs that a trade war is possible, and that the multilateral trading system may not be able to prevent it. This column asks what would happen with tariffs around the world if countries were to move from cooperative tariff setting within the WTO to non-cooperative tariff setting outside the WTO. It argues that that the resulting trade war with countries exploiting their market power would lead to a 32-percentage point increase in the tariff protection faced by the average world exporter.
Why Mainstream Economists Don’t See Recessions Coming – Frank Shostak
In his article released on March 21 2018 – Economics failed us before the global crisis – Martin Wolf the economics editor of The Financial Times expressed some misgivings about macroeconomics.
Economics is, like medicine (and unlike, say, cosmology), a practical discipline. Its goal is to make the world a better place. This is particularly true of macroeconomics, which was invented by John Maynard Keynes in response to the Great Depression. The tests of this discipline are whether its adepts understand what might go wrong in the economy and how to put it right. When the financial crisis that hit in 2007 caught the profession almost completely unawares, it failed the first of these tests. It did better on the second. Nevertheless, it needs rebuilding.
Martin Wolf argues that a situation could emerge when the economy might end up in self-reinforcing bad states. In this possibility, it is vital to respond to crises forcefully.
Why A Dollar Collapse Is Inevitable – Alasdair MacLeod
“Naturally, the smooth termination of the gold-exchange standard, the restoration of the gold standard, and supplemental and interim measures that might be called for, in particular with a view to organizing international credit on this new basis, will have to be deliberately agreed upon between countries, in particular those on which there devolves special responsibility by virtue of their economic and financial capabilities.” General Charles de Gaulle, February 1965
We have been here before – twice. The first time was in the late 1920s, which led to the dollar’s devaluation in 1934. And the second was 1966-68, which led to the collapse of the Bretton Woods System. Even though gold is now officially excluded from the monetary system, it does not save the dollar from a third collapse and will still be its yardstick.
This article explains why another collapse is due for the dollar. It describes the errors that led to the two previous episodes, and the lessons from them relevant to understanding the position today. And just because gold is no longer officially money, it will not stop the collapse of the dollar, measured in gold, again.
The crux of disagreement on euro area reform – Stefano Micossi
A recent report by a group of French and German economists proposed a set of reforms to improve euro area’s financial stability, political cohesion, and potential for delivering prosperity to its citizens. This column, which joins VoxEU’s Euro Area Reform debate, discusses some specific aspects of the proposals that in the author’s view deserve further clarification, and considers the overall implications of the proposals for financial stability of the euro area.
Milton Friedman’s ” The role of monetary policy” – 50 years later – Sylvia Merler
In March 1968, Milton Friedman’s “The Role of Monetary Policy” – after his famous presidential address to the American Economic Association – was published in the American Economic Review. 50 years later, economists reflect on this famous work.
What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time? – Wolf Richter
It’ll take many more sell-offs and the collapse of many more iffy stocks before this over-enthusiasm, after nine years of central bank nurturing, is finally wrung out of the market.
The Problem with a State-Cartel Economy: Prices Rise, Wages Don’t – Charles Hugh Smith
The vise will tighten until something breaks. It could be the currency, it could be the political status quo, it could be the credit/debt system–or all three.
The problem with an economy dominated by state-enforced cartels and quasi-monopolies is that prices rise (since cartels can push higher costs onto the consumer) but wages don’t (since cartels can either dominate local labor markets or engage in global wage arbitrage: offshore jobs, move to lower-wage states, etc.)
Think about the major expenses of the typical household: Internet, telephony, cable and other digital services: cartels. Airlines: cartel. Healthcare insurance, providers and Big Pharma: cartels. Defense weaponry: cartel. Higher education and student loans: cartels. Mortgages: cartel. And so on.
A recipe for monetary policy in emerging market economies – Yasin Mimir, Enes Sunel
The Global Crisis originated in developed economies but was also a large shock to emerging market economies. Based on this event, this column argues that emerging market central banks should take into account domestic and external financial variables such as bank credit, asset prices, credit spreads, the US interest rate and the real exchange rate, not just effects on inflation and real economic activity. A stronger anti-inflationary stance is needed when monetary policy aims to maintain financial stability.
Retail Real Estate Bubble Turns Manhattan Into A “Shopping Wasteland” – Tyler Durden
The Fed loves to repeat how necessary and vital inflation is for economic prosperity, but in the case of midtown Manhattan’s “prime” retail real estate, it is doing nothing but helping cause once extremely prominent shopping areas become the very same “ghost towns” they turned into during the 2008 housing crisis.
Mayor DeBlasio’s asinine solution to this issue created in part by faulty government policy: more government and more regulation.
So much for the recovery.
As if brick and mortar retail didn’t have enough problems to deal with being methodically decimated by the ever growing behemoth that is Amazon, store owners are now facing rent that is simply so high it makes it impossible for most to open retail stores and do business in once prominent areas of downtown Manhattan.
Unraveling – John H. Cochrane
Economists delight in unravelings — behavioral responses that undo bright ideas. A subsidy for skunks produces cats with white stripes. Two good ones came up this week.
As hare-brained as they are, I have to opine that the actual economic consequences of US steel import tariffs and Chinese soybean tariffs are essentially zero.
(Political comment: tariffs are taxes on imports. It would do fans of the Administration’s trade policies good to utter the correct “tax” word to describe tariffs. Or “self-inflicted sanctions.” )
Trade War or Not, China Risks a ‘Minsky Moment’ – Marshall Auerback
The transformation of China’s economy, both in terms of GDP growth rate and poverty reduction since it started its transition to the market system in the late 1970s, has arguably been the biggest macroeconomic event of the past half-century. The model that has characterized the country’s high output growth rates has followed in the footsteps of the Asian “tigers“: first, its high growth rates of capital accumulation, driven by high investment-output ratios; second, a marked outward orientation through export-led growth policies; and third, the pursuit of industrialization (in particular the production and export of manufacturing goods), a key ingredient for fast growth and development. By almost every metric, China has advanced from economic backwater to the world’s second-largest GDP (and by some measures, is now the largest economy).
But in spite of signs of renewed economic activity in March, the country’s debt build-up has provoked increasing concern amongst Beijing’s policy makers, as it points to an underlying long-term financial fragility, particularly if trade war pressures intensify. Just last October during the Communist Party Plenary, Zhou Xiaochuan, then head of the country’s central bank, warned of a “Minsky moment“:
“When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.”
Breaking the stalemate on European deposit insurance – Isabel Schnabel, Nicolas Véron 7 april
Many EU-level reports have highlighted a European Deposit Insurance Scheme as a necessary component of banking union, but none of these options has met sufficient consensus among euro area countries. The authors of this column, which joins VoxEU’s Euro Area Reform debate, propose to end the deadlock with a design that is institutionally integrated but financed in a way that is differentiated across countries.
(Zie en beluister ook de Podcast hierover vandaag)
American Houses Keep Getting Bigger — And so Does American Debt – Ryan McMaken
Measuring gains or losses in the standard of living is not a simple matter. We know that over the past century in the United States, working hours have declined, and real incomes have increased. By nearly every measure we can imagine, the standard of living in the United States has increased substantially since the late nineteenth century and early twentieth century. But how have conditions changed over just the past 15 or 25 years? That’s a lot harder to draw conclusions about, and it’s hard to guess if today’s younger adults are going to be “better off” than their parents were at the same age.
There is no single number or metric we can point to that will tell us that “Americans are now X amount better off than they were in 1990.”
Nevertheless, there are various measures we can investigate that can at least give us some insights into how living standards have changed in recent decades.
One of these is “living space.” That is, how much space does each person have in his home for daily activities?
Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.
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