Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral 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. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks 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.

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Credit mechanics: A precursor to the current money supply debate – Frank Decker, Charles Goodhart
14 december
Credit mechanics and related approaches were developed by a group of German monetary economists during the 1920s-1960s. This column assesses the analysis of credit mechanics within the context of the current money supply debate, arguing that the theory qualified a one-sided, bank-centric view of money creation which is now often encountered in monetary theory. With the old standard textbook models of money creation now discredited, the authors advocate a more general approach to money supply theory involving credit mechanics.
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France in a Nutshell: “The Government Stopped Listening to the People 20 Years Ago” – CHarles Hugh Smith
12 december
The elites’ clever exploitation of politically correct cover stories has enthralled the comatose, uncritical Left, but not those who see their living standards in a free-fall.
A family member who has lived in France for decades summarized the source of the gilets jaunes protests in one sentence: “The government stopped listening to the people 20 years ago. It would be difficult to deny the generalization of this: many if not most governments stopped listening to their people decades ago, preferring instead to listen to financial and political elites and entrenched cultural elites who view commoners with disdain.
Legions of commentators are weighing in on the economic and cultural sources of France’s distemper. Many have characterized the protests as working class, broadly speaking, the multitudes who have seen an erosion in the purchasing power of their wages or pensions while France’s financial, political and cultural elites have feasted on whatever meager gains the French economy has registered in the past 20 years.
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The rise of intangible income: A global value chain perspective – Wen Chen, Bart Los, Marcel Timmer
10 december
Intangibles are on the rise, yet their measurement is elusive. This column argues that a global value chain perspective on factor incomes provides new insights. It documents a rapid increase in the share of ‘factorless’ income in global value chains in the 2000s and argues that this period should be seen as an exceptional period in the global economy during which multinational firms benefitted from reduced labour costs through offshoring, while capitalising on firm-specific intangibles at little marginal cost.
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The consequences of Italy’s increasing dependence on domestic debt-holders – Jan Mazza
6 november
Bruegel’s updated data set of sovereign bond holdings illustrates how a rising share of Italian debt is held by domestic investors – a development with particularly significant implications, in the context of the Italian government’s disagreement with the European Commission over spending plans outlined in its draft budget.
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JPMorgan: There Is A Growing Threat Of “Disorderly Transfer Of Risk” In Credit – Tyler Durden
15 december
A curious divergence has emerged within the analyst ranks at JPMorgan, where on one hand there are the bulls such as cross-asset and quant heads, John Normand and Marko Kolanovic, and equity strategists like Mislav Matejka, all of whom are urging clients to remain bullish and carry on buying stocks while ignoring the recent turbulence in the market; on the other hand there are the lone quasi-bears like Nikolaos Panigirtzoglou who writes one of the bank’s most popular weekly reports, Flows and Liquidity, and who has a habit of going against JPM’s optimistic so-called “house view.”
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What Is Economic Growth? (And What Is It Not?) – Per Bylund
13 december
There is severe confusion about the meaning of economic growth. Many seem to mistakenly think that it has to do with GDP or producing stuff. It does not. Economic growth means that an economy’s ability to satisfy people’s wants, whatever they are–that is, to produce wellbeing — increases.
GDP is a rather terrible way of capturing this using [public] statistics, and is thus corrupted by those benefiting from corrupting such figures. GDP is not growth.
Likewise, having more stuff in stores isn’t growth. Producing increasing quantities of stuff that nobody is willing to buy is the very opposite of economic growth: it is wasting our limited productive capacity. But note the word ‘willing’. Wellbeing is not about [objective] needs, but about being able to escape felt uneasiness. It can turn out to be right or wrong, but that’s beside the point. Economic growth is the increased ability to satisfy whatever wants people have, for whatever reasons they have it.
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Value chain activity in the age of changing trade alliances – Mauro Boffa, Marion Jansen, Olga Solleder
15 december
In a world where trade policies and trade alliances are changing, global value chains are likely to be affected, with implications for policymakers seeking economic development through value chain integration.This column combines information on the value-added decomposition of gross exports with information from the World Bank’s Content of Preferential Trade Agreements Database to examine which policy mixes are more conducive for value chain activity. Value-chain players are found to prefer more integrated regions.
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Europe Struggles as the ECB Pretends to Know What It’s Doing – Carmen Elena Dorobăț
12 december
The European Central Bank (ECB) is rumored to be planning a halt to its four-year quantitative easing program at the end of this week when it will stop its asset purchases while continuing to keep interest rates at current near-zero levels through 2019. The Economist laments this ‘rash’ decision, arguing that the European economy is still ‘faltering’, showing only very feeble and unstable signs of growth.
Since 2015, the ECB has bought bonds worth almost $3trn. However, core inflation has remained fairly low, exports have waxed and waned, and the Euro area has shown no clear signs of recovery after the 2008 financial collapse. Groping in the dark, The Economist blames “[p]oor weather, strikes and a bad flu season” for the shaky start of 2018, and low demand, both domestic and foreign, for the overall bleak outlook.
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***The Trucking Boom Ends – Wolf Richter
15 december
But no letup in freight rates yet.
In November, according to transportation data provider FTR, orders for new Class-8 trucks — the heavy trucks that haul the products of the goods-based economy across the US — plunged nearly 50% from July and August, 35% from October, and 15% from November 2017, to 27,500 orders, the lowest all year.
This chart shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier, which eliminates the effects of seasonality:
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How The New Silk Roads Are Merging Into Greater Eurasia – Pepe Escobar
13 december
Russia is keen to push economic integration with parts of Asia and this fits in with China’s Belt and Road Initiative.
The concept of Greater Eurasia has been discussed at the highest levels of Russian academia and policy-making for some time. This week the policy was presented at the Council of Ministers and looks set to be enshrined, without fanfare, as the main guideline of Russian foreign policy for the foreseeable future.
President Putin is unconditionally engaged to make it a success. Already at the St Petersburg International Economic Forum in 2016, Putin referred to an emerging “Eurasian partnership”.
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The threats to Chinese and US commercial interests aren’t that different – Simon Evenett, Johannes Fritz
14 december
Presidents Trump and Xi effectively declared a truce in their trade war at the recent G20 Summit in Buenos Aires, giving their trade negotiators three months to settle their differences. This column argues that focusing on the bilateral trade war overlooks similarities in the trade distortions facing Chinese and American exporters worldwide in the form of export incentives, subsidies to domestic firms, and import tariff increases. It concludes that these two trading giants have more in common than they may realise.
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The U.S. Oil Industry’s Dirty Little Secret – Nick Cunningham
13 december
Because greater fuel economy for cars is toxic for the oil industry.
The oil industry engaged in a secret public relations campaign to undermine U.S. fuel economy standards, according to a new investigation from the New York Times.
One of the main actors was the largest oil refiner in the country, Marathon Petroleum. Marathon, along with others, ran a “stealth campaign to roll back car emissions standards,” the NYT reported. The campaign argued that the U.S. no longer needs fuel economy standards because it is now such a massive producer of oil.
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Ignoring the Bureaucracy Isn’t the Same as Dismantling It – Doug French
15 december
The tweeter & tariffer-in-chief Donald Trump had a bad week post election with presidential historian Douglas Brinkley telling the Washington Post , “Trump needs adulation, so heading into the midterms, holding these rallies, he was cheered and it became narcissistic fuel to his engine,” Brinkley said. “After the midterm, it’s the sober dawn of the morning.”
DC heads are going to roll, it’s only a matter of whose and when. “He was frustrated with the trip. And he’s itching to make some changes,” said one senior White House official. “This is a week where things could get really dicey.”
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Labour in the past, present, and future: A trilemma in China – Haiyue Yu, Jin Cao, Shulong Kang
13 december
In a country where grandparents provide a significant amount of childcare, China’s plans to gradually delay retirement over the next few decades may significantly impact the labour supply and lifetime earnings of young women. Using the China Family Panel Studies survey data, this column demonstrates that the provision of grandparental childcare affects females’ income, in particular better-educated, urban females with younger children. An increase in public childcare subsidies may be required to complement the phasing-in of the retirement policy in China.
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Tax Competition: A Practical Way to a Low-Tax World – Kai Weiss
11 december
That “taxation is theft” is often the default position libertarians take when it comes to tax policy. Why? Because a “tax is a coerced contribution to state and federal revenues,” and “coercion is force.” Thus, it is “taking something of another person without that person’s consent.” It should not be the subject of this article whether or not this is true; whether taxation truly is theft.
This article, if anything, looks into the effectiveness of this claim, rather than the merit to it. “Taxation is theft,” disregarding the truthfulness of the statement, may be a good catchphrase, which can adequately and briefly describe a moral problem, and it is a good way to cheer up others who are equally outraged as oneself about the government appropriating a big chunk of your income or profit. But trying to convince other people about the rightfulness of the notion that taxes are bad by referring to these words will not necessarily result in full agreement – rather, it will probably result in astonishment. Even if you are able to convince them of the truthfulness of the statement, most people will still resort to saying something like: “a certain level of theft is needed then.”
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*** Winter is Coming to Commercial Real Estate – John McNellis
14 december
A commercial real estate developer shares his insights on how to prepare for it.
On Friday, the S&P 500 was down 2.8% for the year. Like a dead rat in the basement, everyone can smell the next recession, everyone knows it’s coming, but no one knows when. Nobody. The clever pundits give its commencement the same wide berth they would accord that moldering rat.
One acquaintance, however, rushed in where economists fear to tread and called it, proclaiming March 2020 as the next recession’s kick-off. He could be right. Having predicted five of the last three recessions, I have no idea but, at the risk of putting mittens on at the outset of Indian summer, it may be useful to consider how a real estate professional might survive a financial winter.
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Credit booms and information depletion – Vladimir Asriyan, Luc Laeven, Alberto Martin
15 december
Credit booms are perceived to fuel resource allocation and often end in crises that are followed by protracted periods of low growth. This column investigates the macroeconomic effects of credit booms using a new theory of information production. The theory predicts that when the economy enters a collateral boom, the price of collateral rises and lenders rely more on collateralisation and less on information-producing screening of entrepreneurs. Empirical evidence based on US data confirms the model’s predictions.
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