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.

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ECB Tapering May Trigger “Disorderly Restructuring” of Italian Debt, Return to National Currency – Don Quijones
18 mei
Here’s the staggering scale of the Italian government’s dependence on the ECB’s bond purchases, according to a new report by Astellon Capital: Since 2008, 88% of government debt net issuance has been acquired by the ECB and Italian Banks. At current government debt net issuance rates and announced QE levels, the ECB will have been responsible for financing 100% of Italy’s deficits from 2014 to 2019.
But now there’s a snag.
Last month, the size of the balance sheet of the ECB surpassed that of any other central bank: At €4.17 trillion, the ECB’s assets have soared to 38.8% of Eurozone GDP. The ECB has already reduced the rate of purchases to €60 billion a month. And it plans to further withdraw from the super-expansionary monetary policy. To do this, according to Der Spiegel, it wants to spread more optimistic messages about the economic situation and gradually reduce borrowing.
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The World’s Central Banks Are Frozen with Fear – Ryan McMaken
16 mei
2016 was supposed to be the year that the Federal Reserve “normalized” its policies. As much as two years ago — after years of a near-zero target rate — the Fed was swearing that it would begin to raise rates back to “normal” levels and cut its balance sheet.
That never happened.
Yes, the Fed has increased its target rate from 0.25 percent to 1 percent over the past 19 months. But if we look at this in context, it would be absurd to declare a target rate of 1 percent as anything other than an easy-money stance. Remember that throughout the 1990s, the Federal Funds rate was usually between 5 percent and 6 percent.
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The bank competition myth – Cameron K. Murray
16 mei
Australian banks are upset. Their $30 billion per year gravy train of profits from the Australian people is finally being slowed down.
A levy on bank liabilities of 0.06% annually was announced as part of the 2017 Federal government budget, and is expected to raise about $1.5 billion per year, or 5% of bank profits.
To be clear, the banking system is a regulated cartel. Its primary function is to provide a public good in the form of the money supply of the country. As such, we would expect it to be uncompetitive, and use tight regulatory controls to ensure that the privileged position of private banks is not being abused.
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International inflation synchronisation through global value chains – Raphael Auer, Andrei Levchenko, Philip Sauré
19 mei
Inflation has been shown to co-move across countries, but whether this is due to common shocks or propagation via real and financial channels has not been established. This column argues that global value chains propagate cost pressures across borders, thereby synchronising inflation. As international input linkages represent a direct link between foreign marginal costs and domestic production costs, their prevalence has a significant effect on the extent to which optimal monetary policy is inward-looking.
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How Magical is the Keynesian Multiplier? – Frank Shostak
18 mei
For most economists and financial commentators, the heart of economic growth is the increase in the demand for goods and services. The view is that increases or decreases in demand are behind rises and declines in the economy’s production of goods and services. It is also held that the economy’s total output increases by a multiple of the change in expenditure by government, consumers, or businesses.
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Want to Understand Rising Wealth Inequality? Look at Debt and Interest – Charles Hugh Smith
19 mei
“Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must).”
I often refer to debt serfdom, the servitude debt enforces on borrowers. The mechanism of this servitude is interest, and today I turn to two knowledgeable correspondents for explanations of the consequences of interest.
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The end of silver as a unit of account – Ricardo Fernholz, Kris Mitchener, Marc Weidenmier
18 mei
There has been speculation that the dollar may soon be displaced by the euro or renminbi as the primary international currency. This column examines the demise of silver-based monetary standards in the 19th century to explore price dynamics when a money ceases to function as a global unit of account. According to new data on the historical prices of agricultural commodities, silver ceased functioning as a global price anchor in the mid-1890s. Over the same period, the volatility of agricultural commodity prices also declined.
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Balance Sheet Normalization, Or Not – C.Jay Engel
17 mei
Politicians, bureaucrats, and media talking heads specialize in saying one thing but meaning something else. In Fed world, something referred to as “balance sheet normalization” would be thought to be a return of balance sheet levels to pre-crisis numbers (roughly $850 billion). But common sense does not prevail. Instead, as it turns, normalization doesn’t mean a return to normal.
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Adding a piece to the productivity puzzle: Management practices – Nicholas Bloom, Erik Brynjolfsson, Lucia Foster, Ron Jarmin, Megha Patnaik, Itay Saporta Eksten, John Van Reenen
17 mei
Disentangling the relationship between management practices and productivity has been hampered by the absence of large sample data across plants and firms. This column exploits a new survey covering US manufacturing to show that management practices vary both among and within companies. Furthermore, management practices are just as important for productivity as a number of other factors associated with successful businesses, such as technology adoption.
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China cannot finance the Belt and Road alone – Alicia García-Herrero
12 mei
The One Belt One Road initiative holds great promise for the global economy, but will need a huge amount of finance. Initial presumptions that China would be able to provide all the finance are now unrealistic. Other partners should consider providing finance for some aspects, especially Europe – which has a lot to gain from the project.
There is no doubt that Asia needs infrastructure. The Asian Development Bank (ADB) recently increased its already very high estimates of the amount of infrastructure needed in the region to 26 USD trillion in the next 15 years, or 1.7 USD trillion per annum (Chart 1). The great thing about the China driven Belt and Road initiative is that it aims to address that pressing need, especially in transport and energy infrastructure. But this is easier said than done. The a-priori is that the financing will be there thanks to China’s massive financial resources.
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***This Is How an Asset Bubble Gets Unwound these Days – Wolf Richter
17 mei
What the slow crash of classic car prices says about the future of other asset classes.
The global asset class of collector cars – these beautiful machines are perhaps one of the most enjoyable asset classes to play in – is quietly but persistently and very unenjoyably experiencing a downturn that parallels and in some aspects already exceeds the one during the Financial Crisis.
The index for collector car prices in the May report by Hagerty, which specializes in insuring vintage automobiles, fell 0.68 points to 160.06, down nearly 10% year-over-year, and down 14%, or 25.8 points, from its all-time high in September 2015 (185.86).
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US Household Debt Rises to All-Time Highs – Ryan McMaken
17 mei
Following the 2008 financial crisis, many observers were surprised by how much many Americans began saving. From 2009 to 2012, total household debt fell considerably, dropping by more than 12 percent from 2008 to 2013.
According to the Wall Street Journal, that drop was described by Fed researchers as “an aberration from what had been a 63-year upward trend reflecting the depth, duration and aftermath of the Great Recession.”
Since 2013, though, household debt has again marched upward. And now, according to the New York Fed, household debt in the US has now topped its previous pre-crisis level.
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***Wild health care proposal – John H. Cochrane
18 mei
I found a lovely post on health care full of wild ideas at market-ticker.org. You may not agree with all the proposals — wild even by my standards. But it is full of interesting detail on what’s wrong with the microeconomics of health care delivery, as opposed to the usual focus on health insurance, and who pays, ignoring the vast dysfunction of the underlying market.
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***The Backlash to Spain’s New Property Boom Has Begun – Don Quikones
16 mei
Spain is in the grip of a property boom. Whereas the last bubble was driven largely by the rampant construction and sale of new homes, with the country at one point accounting for more housing starts than Germany, France, Britain and Italy combined, the focal point of the new boom is the smaller but fast-growing rental apartment market.
Spain has traditionally been a country of home-owners, with an average ownership rate of 78.5%, 10 percentage points above the EU average. But things are changing.
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Behavioural economics: What we know and how it could be mainstreamed – Beryl Chang, Fabrizio Ghisellini 21 mei
Behavioural economics has identified phenomena that standard models could not explain. But its critics warn that it is becoming little more than a ‘pile of quirks’. This column argues that the future development of behavioural economics should focus on a streamlining process that will clarify core issues, fill conceptual gaps, and create tractable models. Behavioural models will only become a coherent alternative to homo economicus if this process occurs.
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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.