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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What the World’s Central Banks are Planning for Brexit – George Pickering
28 februari
With scarcely a month left until the date Britain is scheduled to leave the European Union, the monetary czars at the top of the world’s central banks are increasingly coming to terms with the fact that a ‘hard’, no-deal Brexit now seems to be the most likely outcome. Given Parliament’s recent, overwhelming rejection of Theresa May’s long-negotiated Brexit deal, and the clock rapidly running down on any hope for renegotiation, it looks like the type of Brexit looming on the horizon will be verging on a central banker’s worst nightmare: an abrupt disruption to existing institutions, with all the economic uncertainty that entails, rather than the slow, politically-managed transition period May and others were hoping for.
As the formerly remote prospect of a no-deal Brexit draws ever closer, central banks around the world have begun laying out their plans to shield their respective economies from the turmoil many mainstream analysts are expecting. Little wonder that many of these contingency plans centre around the most important, and most dangerous, policy tool in the central banker’s arsenal: their ability to inflate the money supply and keep interest rates artificially low.
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This Is The Way QT Ends: Here’s What Happens After The Fed Capitulates – Tyler Durden
2 maart
In Fed Chair Powell’s semi-annual testimony to Congress, the former lawyer underscored the fact that the Fed is nearing the end of its balance sheet reduction process. He reiterated that the Fed expects to end balance sheet runoff “later this year” and added that many key details had been worked out. He said: “My guess is we’ll be announcing something fairly soon.”
The announcement was, and was not a surprise.
It was not a surprise because the Minutes of the January 29-30 FOMC meeting had already made it clear that the Fed will end its balance sheet reduction program or Quantitative Tightening (QT) earlier than had been previously envisaged, perhaps as soon as this year, nearly one year ahead of schedule and expectations, which until recently had clustered around 2020.
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Macro reasons to loath protectionism – Davide Furceri, Swarnali Ahmed Hannan, Jonathan D. Ostry, Andrew Rose
27 februari
It seems an appropriate time to study what, if any, have been the macroeconomic consequences of tariffs in practice. Using a straightforward methodology to estimate flexible impulse response functions, and data that span several decades and 151 countries, this column finds that tariff increases have, on average, engendered adverse macroeconomic and distributional consequences: a fall in output and labour productivity, higher unemployment, higher inequality, and negligible effects on the trade balance (likely owing to real exchange rate appreciation when tariffs rise). The aversion of the economics profession to the deadweight loss caused by protectionism seems warranted.
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***Europe is Taxing and Regulating Tech, Now It’s Lagging Behind in Innovation – Daniel Lacalle
26 februari
If we analyze the ranking of the main technological companies (2017), there is not a single European among the top fifteen. The vast majority are North American and Chinese companies.
It is even more worrying. If we go to the top 50 global technology companies, only four are European, but when we analyze those four, it is more than debatable that they are leaders in innovation, patents and market power. The European indexes of “technology” include, diplomatically, a few industrial conglomerates that have long lost the technological race.
This is not by chance or bad luck. It is by design, sadly.
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Miners Eye The Moon For Trillion Dollar Payoff – Mining.com
2 maart
European scientists have announced plans to start mining the moon as early as 2025, though what they’ll be extracting is neither gold nor diamonds, but waste-free nuclear energy thought to be worth trillions of dollars.
The goal is to place a lander on the lunar surface to mine and process regolith for useful materials such as water, oxygen, metals and an isotope called helium-3, which may prove useful for fueling future fusion reactors.
Regolith, Universe Today reported, is a dust-like material that covers the lunar surface and is the result of billions of years of meteor and comet impacts. If anyone ever lives on the moon, they could use the regolith to build habitats for a base.
The mission will be in charge of the European Space Agency in partnership with ArianeGroup, Popular Mechanics reported. It will also count with the participation of Part-Time Scientists, a German group and former Google Lunar XPrize contestant.
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Consequences of “Leaving Interest Rates Very Low for a Long Time”: Bank of Canada Governor Poloz – Steve Saretsky
25 februari
A litany of problems, from too much debt to deflating housing bubbles in Vancouver and Toronto
With the Bank of Canada’s overnight interest rate stalled out at 1.75%, lower than the rate of inflation, and leaving real rates stuck in negative territory, monetary policy continues to deliver stimulus to an incredibly long and aging economic expansion, one which has witnessed record debt accumulation. That is, at least, according to Bank of Canada Governor Stephen Poloz who delivered a speech in Montreal this past week.
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Should the ECB care about the euro’s global role? – Benoît Coeuré
25 februari
There is a growing debate in Europe as to whether recent shifts in global governance should be seen as a reason to strengthen the global role of the euro. This column explains that while the ECB does not take a view on foreign policy questions, the alignment between policies that will strengthen the euro’s global role and policies that are needed to make the euro area more robust, together with the implications for monetary policy that a stronger international role of the euro would have, make the debate relevant to the central bank.
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What Happens to Europe When Germany’s Economy Slows? – Claudio Grass
1 maart
Until recently, Germany has been the seemingly unbreakable workhorse that has pulled the European economy back from the brink and kept it ticking along through a myriad of internal and external pressures, as well as political crises, over the last decade. As the undeniable leader of the bloc, the country has spearheaded and supported rescue plans for the Eurozone’s weaker links, as well as a number of controversial policies that work towards further centralization within the EU. However, with clouds now gathering over Germany’s economic outlook, concerns over potential knock-on effects on the entire monetary union are on the rise.
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Inventory Pileup Sounds Alarm for Goods-Based Economy – Wolf Richter
25 februari
“In 30 years, I’ve never seen anything like this”: CEO of warehouse operator Pacific Mountain Logistics.
Sales at merchant wholesalers (except manufacturers’ sales branches and offices) fell 1% in December 2018, compared to November, to $497.2 billion on a seasonally adjusted basis, and inched up only 1% compared to December 2017, according to the Census Bureau estimates this morning.
But inventories at these wholesalers rose 1.1% from November and jumped 7.3% from December 2017, to $661.8 billion. Over the two-year period through December, inventories have risen 11%. This includes inventories of durable and non-durable goods
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Household indebtedness did not weaken US monetary transmission post-crisis – Gaston Gelos, Federico Grinberg, Shujaat Khan, Tommaso Mancini-Griffoli, Machiko Narita, Umang Rawat
28 februari
There is little evidence on whether deteriorating household balance sheets in advanced economies have made monetary policy less effective since the Global Crisis. Using US household-level data, this column shows that the responsiveness of household consumption to monetary policy has in fact diminished since the crisis, and that households with the highest indebtedness responded the most to monetary policy shocks. Since the distribution of debt did not change after the crisis, this suggests that household debt did not contribute to lessening the effects of monetary policy over time.
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A Chinese Bomb: Are We Really on the Threshold of Another Global Financial Crisis? – Diego Santizo
25 februari
The growth of corporate credit in China has been excessive in the last five years. This credit boom is related to a substantial increase in investment after the Great Recession.
In the United States, the “debt crisis,” as Nassim Taleb called it, has not been corrected by corporations pursuing an intelligent strategy to reduce their debt. Chinese companies, however, have been following suit. Their profitability is deteriorating more and more. Some believe that the Chinese corporate debt is akin to a mountain; others, to a time bomb.
Those who suggest that the growth of local debt is stable and follows China’s development phase seem to forget that business efficiency and responsible decentralization are the keys to sustaining a credit expansion. Let’s examine each part of this argument.
Why Should We Be Paying Attention to China?
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***US is Cleanest Dirty Shirt Among Manufacturing Giants. China, Japan & Germany Sink – Wolf Richter
3 maart
The four account for 58% of global manufacturing value added. And the big exporters are getting hit.
The global slowdown in manufacturing progressed another notch in February. Among the top four manufacturing giants in the world, the US is the cleanest dirty shirt. Together, they produced 58% of the world’s “value added in manufacturing” in 2016:
China: $3.08 trillion (26% of global total)
US: $2.18 trillion (18% of global total)
Japan: $979 billion (8% of global total
Germany: $718 billion (6% of global total)
China’s small and mid-size manufacturers sink.
In February, manufacturing output declined for the third month in a row, and at the steepest rate since March 2016, according to the official Purchasing Managers Index (PMI), released by China’s National Bureau of Statistics. For these PMI measures, a value below 50 means “contraction,” and a value above 50 means “expansion”:
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The Doomsday Scenario for the Stock and Housing Bubbles – Charles Hugh Smith
27 februari
It was always folly to believe that inflating asset bubbles could solve the structural problems of a post-industrial economy.
The Doomsday Scenario for the stock and housing bubbles is simple: the Fed’s magic fails. When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed’s magic only worked the first three times: three bubbles and the game is over.
So what happens when punters realize there won’t be a fourth bubble? They sell. Bids disappear because who’s dumb enough to bet (with Japan and Europe as lessons) that more liquidity and negative interest rates will magically work when zero interest rates didn’t move the needle?
Who’s foolish enough to catch the falling knife (i.e. buying plummeting assets on the way down) on the unsupported assumption that the next dose of Fed magic will reverse a bidless market?
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An empirical analysis of effective trade costs and the current account – Emine Boz, Nan Li, Hongrui Zhang
28 februari
It is commonly observed that economies specialising in sectors, such as services, that face relatively high trade costs tend to run current account deficits, while those specialising in more easily tradable sectors tend to run surpluses. This column tests the causality of this observation by constructing a measure of effective trade costs. Results show that although higher effective exporting costs are associated with lower current account balances, the impact of those costs is quantitatively limited. The findings suggest that the contribution of trade costs to observed global imbalances has been modest.
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GDP Rose by $1.0 Trillion in 2018, US Gov. Debt by $1.3 Trillion – Wolf Richter
28 februari
Where would GDP growth be without federal borrow-and-spend?
So the dreams of 3%-plus economic growth in 2018 were fulfilled, after tax cuts and ballooning federal deficit spending, which acted as a huge stimulus: In the fourth quarter, the economy as measured by inflation-adjusted GDP grew by 0.55% from the third quarter, not annualized (we’ll get to the “annualized rate” in a moment).
This brought GDP growth for the entire year 2018 to 3.1%, according to the Bureau of Economic Analysis this morning. This places the year ahead of the top years since the Financial Crisis:
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The Second Socialist Calculation Debate: Comments at the 2018 Austrian Economics Research Conference – Samuel Bostaph
28 februari
This article discusses the influence of the initiation of the Second Socialist Calculation Debate on my own subsequent research and contributions to that debate, and briefly summarizes that research presented in articles on arguments made by Plato, Karl Marx, Friedrich von Wieser, Friedrich Hayek, Lionel Robbins, Joseph Schumpeter, and Israel Kirzner. It also mentions some of the changes in Austrian economics understanding stimulated by the Second Socialist Calculation Debate, and suggests a direction for future research.
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Immigration and wage dynamics: Evidence from the Mexican peso crisis – Joan Monras
3 maart
Arguments over the effect of immigration on labour market outcomes focus on a single number: the impact on low-skill wages. The column uses a model of the adjustment process of labour markets in the US to the peso crisis of 1995 to show there is a difference between short-run and long-run effects. The model suggests that state-level policies are unlikely to be effective.
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