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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Finance and growth: The direction of causality – Eilyn Yee Lin Chong, Ashoka Mody, Francisco Varela Sandoval
17 january
Recent research suggests a point beyond which the benefits of financial development diminish, and further development can even hurt growth. This column describes how a negative relationship between credit and growth emerged strongly after 1990 and was particularly pronounced in the Eurozone, consistent with the notion that an overgrown financial sector weakens economic growth potential. It also argues that slower growth leads to more rapid financial sector expansion. Policymakers need to be aware of the possibility that causality runs in both directions.
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German Inflation Anxiety Could Bring an Election Shock in 2017 – Brendan Brown
19 januari
The ECB’s increasingly shrill mantra that it makes policy for the monetary union as a whole and not for its largest member (Germany) could well cause a black swan to appear — in the form of a German political shock this autumn. The Frankfurt-based officials have been ignoring the historical observation of Nobel Prize-winning economist Robert Mundell that central banks of federal unions are intuitively alert to symptoms of monetary instability in their dominant economic member — for example: Ontario in Canada and New South Wales in Australia. (California, at around 13% of the US economy does not qualify as “dominant.”)
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What Will Prick the “Leveraged Share Buyback” Craze? – Wolf Richter
20 januari
There may be a day when we look back at the current craze of “leveraged share buybacks” – as Fitch Ratings calls these creatures of financial engineering – the way
we now look back at the craze of leveraged buyouts (LBO) just before it all came apart during the Financial Crisis.
If a company with a torrent of free cash flow uses some of this cash to invest and expand, and then uses some of the remaining cash to pay dividends and repurchase its own shares, few people would quibble with it.
The problem for bondholders, and stockholders ultimately, arises when a company doesn’t generate enough cash to pay for its investments, dividends, and share buybacks, and ends up borrowing to fund share buybacks, thus increasing its debt burden while hollowing out its equity capital.
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Risk, surprises and safe-haven currencies – Adrian Jäggi, Martin Schlegel, Attilio Zanetti
18 januari
Identifying the exact triggers for safe-haven flows in not easy, nor is tracking the ways in which demand for safe havens materialises. This column uses an empirical analysis of movements of the Swiss franc and Japanese yen since 2000 to show that these safe-haven currencies reacted strongly to non-domestic macro surprises, especially during the Global Crisis, and that this is in addition to the expected reaction to general changes in the risk environment. Oddly, for European macro surprises, only German data influence safe-haven currencies.
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World’s Worst Tax Haven Threatens to Expand its Operations – Don Quijones
18 januari
The UK chancellor, Philip Hammond, recently suggested that if the EU fails to budge over granting the UK market access after Brexit, Britain could transform its economic model into that of a corporate tax haven. In other words, in the event of a so-called “Hard Brexit”, which is the only option that would offer the UK any hope of self-rule in the foreseeable future, the British government would extend the City of London’s business model to the rest of the UK.
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David Rosenberg: “The Travesty Is We Have 23.5 Million Americans Aged 25-To-54 Outside The Labor Force” – Tyler Durden
21 januari
I don’t think we have a productivity problem — in fact, the demise of productivity is vastly overstated and that is because the Bureau of Labor Statistics (BLS) is likely vastly overstating labor input, and I’m talking here about how hours worked are estimated.
But the real travesty, and what I think deserves top priority (but I don’t see it), is that we have, in addition to 7.5 million officially unemployed (a number that is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million Americans aged 25-to-54 who reside outside the confines of the labor force. And at a time when job openings are at record highs.
The problem is that unqualified applicants for these openings also are at a record high. The number of jobs available that are not being filled because the skill set is absent is at an unprecedented level — and this was an overriding theme in the latest edition of the Fed’s Beige Book.
The question is what is in the policy playbook to redress this situation?
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Ending too big to fail – Stephen Cecchetti, Kim Schoenholtz
18 januari
‘Too big to fail’ is an enduring problem for financial authorities and regulators. While forbidding government bailouts may be a popular move, the strategy lacks credibility. This column examines the proposals of the Minneapolis Plan to End Too Big to Fail. The plan has many virtues that tackle systemic problems and that build on the Dodd-Frank Act’s crisis prevention and management tools. However, further analysis of the plan is still needed to ensure that its measures aren’t circumvented.
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Oxfam’s Hypocrisy on Private Wealth – Mateusz Machaj, Mateusz Benedyk
18 januari
Earlier this week, the Oxfam organization published a “report” about global inequality. It’s not really a report, since most of it consists of babble-economics with little empirical foundation, and the hard data that it includes comes from an external source: the Credit Suisse Report. In any case, this data indicates that there is a lot of poverty in the world, whereas in some other places there is relatively much more wealth. This has led to loudly shouted statements in the media of how 8 people in the world have more wealth than half of the world population combined.
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25 Years of Neocon-Neoliberalism: Great for the Top 5%, A Disaster for Everyone Else – Charles Hugh Smith
20 januari
It cannot be merely coincidental that the incomes and wealth of the top 5% have pulled away from the stagnating 95% in the 25 years dominated by neocon-neoliberalism.
One unexamined narrative I keep hearing is: “OK, so neocon-neoliberalism was less than ideal, but Trump could be much worse.” Let’s start by asking: would Syrian civilians agree with this assessment? The basic idea in the “OK, so neocon-neoliberalism was less than ideal, but Trump could be much worse” narrative is that the modest problems created by neocon-neoliberalism will pale next to what Trump will do, implying jackbooted Waffen SS troops will soon be marching through America on Trump’s orders.
This narrative is yet another example of American parochialism: since neocon-neoliberalism didn’t cause American cities to be bombed and its institutions demolished, it’s really not that bad.
Try telling that to the Iraqis, Libyans and Syrians who have been on the receiving end of neocon-neoliberalism policies. The reality is very unpleasant: for those targeted by America’s neocon-neoliberalism, nothing worse is imaginable, because the worst has already happened.
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Did The Free Market Kill Coal? – Riley Keaton
20 januari
Would you like to know my secret to turning my environmentalist friends into stalwart defenders of the marketplace? The answer is simple: coal.
You would be amazed by the reversal in rhetoric witnessed right before your eyes, typically accompanied by a big dose of schadenfreude aimed at Appalachian people.
The “free market killed coal” adage apparently qualifies as ironic humor in leftist circles. Never mind the tens of thousands of families, hundreds of communities, a plethora of near-bankrupt school districts, and so many others left behind in the wreckage of coal’s decline. Environmentalists may even laugh as states who have endured generation after generation of poverty face choppy fiscal seas, forcing indelicate, hammer-doing-a-scalpel’s-job reductions in infrastructure, education, and health spending. None of these things seem to matter when it isn’t their political constituency on the destructive end of creative destruction.
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How deregulation and globalisation interact to boost economic growth – Sean Dougherty, Sarra Ben Yahmed
20 januari
Globalisation offers many benefits, some of which cannot be separated from other types of policy. This column examines how the benefits from removing regulations that impede competition are partly contingent on openness to import competition. Using recent firm-level analyses of productivity growth, it argues that those firms that contribute the most to overall growth could also be held back by reduced openness, harming overall advances in incomes.
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Inflation Gets Real (Not Just Nominal) in Argentina – Bianca Fernet
17 januari
Well it’s 2017. Here in Argentina we find ourselves awash in the bitter fruits that have sprung up from the seeds of austerity sown in 2016. Don’t get me wrong, it had to be done, but it’s definitely not something people are smiling about. And while inflation may have slowed in December, at 1.2 percent in a month it’s still biting pretty hard. After inflation clocked in over 40 percent for 2016, it’s hard to get excited by that slowdown.
What’s going to happen with inflation, and what does that mean for the future of Argentina’s economy? The answer may lie between two hamburger patties stuck together by mystery special sauce.
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Baby boomers begin to drain cash in the US – Damien Klassen
18 januari
The WSJ has a piece out on the demographic effects of the baby boomers retiring:
The largest generation in U.S. history has to start pulling its retirement money this year, kicking off a mandatory movement of cash that could total hundreds of billions in the coming decades.
U.S. law requires anyone age 70 ½ or older to begin annual withdrawals from their tax-sheltered retirement accounts and pay taxes on those distributions. The oldest of the nation’s 75 million baby boomers cross that threshold for the first time this month, according to a U.S. Census Bureau estimate of when that demographic group began.
The obligatory outflows from 401(k)s and IRAs are expected to ripple through the U.S. economy, the stock market and a money-management industry that relies heavily on fees from boomers’ tax-sheltered savings plans and assets.
This is one of our six mega trends, the change in dependency ratios globally:
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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.