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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What Gives Cryptocurrencies Their Value – Peter St. Onge
1 december
The value of cryptocurrencies like bitcoin, just like any other kind of money, comes fundamentally from what you can do with it. As a follow up to What Backs Bitcoin, I want to dig into that value.
The idea, which comes from Austrian economist Carl Menger, is that just as a shovel’s value comes from its ability to dig, a currency’s value comes from its ability to help you do two things: transactions and savings.
Think of transactions as the money you carry in your wallet or checking account, and savings as the rest of what you have in the bank or buried in the yard. It’s worth mentioning here that that vast majority of money demand is indeed savings, making up 90% or more of all money demand.
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Banks as buyers of last resort for government bonds – Daniel Gros
27 november
A key remaining issue for the completion of the Banking Union is the concentrated exposure of banks in many countries to their own sovereign. This column argues that the belief that banks should be allowed to buy large amounts of their own sovereign so they can stabilise the market in a crisis is mistaken for two reasons: banks are only intermediaries, and banks have higher cost of funding. The overall conclusion is that governments should make it more attractive for households (and other real money investors) to hold government debt directly.
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Bitcoin and Bubbles – John H. Cochrane
30 november
So, what’s up with Bitcoin? Is it a “bubble?” A mania of irrational crowds?
It strikes me as a fairly pure instance of a regularly occurring phenomenon in financial markets, one that encompasses some “excess valuations” in stock markets, gold and commodities, and money itself.
Let’s put the pieces together. The first equation of asset pricing is that price = expected present value of dividends. Bitcoin has no cash dividends, and never will. So right off the bat we have a problem — and a case that suggests how other assets might have value above and beyond their cash dividends.
Well, if the price is greater than zero, either people see some “dividend,” some value in holding the asset, beyond its cash payments; equivalently they are willing to hold the asset despite a lower expected return going forward, or they think the price will keep going up forever, so that price appreciation alone provides a competitive return. The first two are called “convenience yield,” the latter is a “rational bubble.”
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***Stock Market Lazes Happily on a Powerful Time Bomb, and the Fed Begins to Worry – Wolf Richter
29 november
Pointing at “excesses,” “distortions,” and “imbalances.”
Margin debt in the stock market hit another record, $561 billion at the end of October, up 16% from a year ago, the New York Stock Exchange reported on Tuesday. Margin debt and the stock market move together. And even on an inflation-adjusted basis, the surge has been breath-taking.
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Minimum Wage Laws Have Many Victims – Aayush Priyank
1 december
Minimum wage laws are often put forward as regulations that help everyone. If anyone is hurt, it is wealthy capitalists who can afford to lose a little money. Unfortunately, this is rarely the reality. In order to decode the impact of minimum wage laws, one has to examine the effects on multiple levels, examining both the seen and the unseen consequences. Increases in wages have to be paid for somehow, and given the interdependent relationship of a market, there are three major players who are impacted by minimum wages: employers, employees, and the consumers.
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Diagnosing the Italian disease – Bruno Pellegrino, Luigi Zingales
28 november
Italy stands out among developed countries for its large public debt and chronically low productivity growth. The country’s productivity growth disease cannot be addressed without understanding why aggregate labour productivity abruptly stopped growing around 1995. This column argues that the most likely cause is Italian firms’ non-meritocratic managerial practices, which meant they failed to capitalise on the ICT revolution.
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Eight Heresies of Monetary Policy – John H. Cochrane
29 november
As background, the first graph reminds you of the current situation and recent history of monetary policy.
The federal funds rate is the interest rate that the Federal Reserve controls. The funds rate rises in economic expansions, and goes down in recessions. You can see this pattern in the last two recessions. Since about 2012, though, when following history you might have expected the funds rate to rise again, it has stayed essentially at zero. Very recently it has started to rise, but very slowly, nothing like 2005.
The black line is reserves. These are accounts that banks have at the Fed. Crucially, these bank accounts now pay interest. Starting in 2008, reserves grew dramatically from about $20 billion to $2,500 billion. The three cliffs are the three quantitative easing’ episodes. Here, the Fed bought bonds and mortgage backed securities, giving banks reserves in exchange.
Inflation initially followed the same pattern as in the last recession. It fell in the recession, and bounced back again in 2012.Inflation has been slowly decreasing since. 10 year government bonds have been quietly trending down, with a bit of an extra dip during the recession.
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***Daylight saving saves no energy – Zuzana Irsova, Tomas Havranek, Dominik Herman
2 december
The original rationale for daylight saving time was energy savings. This column reveals, however, that the modern empirical literature on the topic finds no savings on average. The extent of savings is related to latitude – regions at higher latitude enjoy slightly more savings, but subtropical regions consume more energy because of daylight saving time. Even in Scandinavia, the savings amount to just 0.3% of annual energy consumption. Policymakers must look at other effects of daylight saving time to justify the continued use of the policy.
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Japan’s tight labour market generates deflation… – David Llewellyn-Smith
1 december
Just a quick observation today as Japan released its October unemployment rate at 2.8%, way below supposed full employment. Yet it’s still waiting for wage inflation to kick in, for about twenty years now…
Japan is unique in some ways with its social contract between dead wood salarymen and other stabilising institutions, still as the leading indicator for our post-crisis developed economies it’s hardly irrelevant:

balance sheet recessions and their aftermath take generations to restore animal spirits for debt;
aging population;
advancing automation.

What it doesn’t have that other DMs do is inequality but that’s also a powerful deflationary force. Nor does it have a flood of cheap migrant labour which equally deflationary, especially when you’re already over-supplied.
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Carmageddon for Tesla – Wolf Richter
1 december
This is where Hype Goes to Die.
Today was the monthly moment of truth for automakers in the US. They reported the number of new vehicles that their dealers delivered to their customers and that the automakers delivered directly to large fleet customers. These are unit sales, not dollar sales, and they’re religiously followed by the industry.
Total sales in November rose 0.9% from a year ago to 1,393,010 new vehicles, according to Autodata, which tracks these sales as they’re reported by the automakers. Sales of cars dropped 8.2%. Sales of trucks – which include SUVs, crossovers, pickups, and vans – rose 6.6%. Strong replacement demand from the hurricane-affected areas in Texas papered over weaknesses elsewhere. As always, there were winners and losers.
And one of the losers was Tesla.
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Corporations Can’t Oppress Us without the State’s Help – Zachary Yost
27 november
In a piece recently published at The American Conservative entitled “Americans, We Aren’t So Tough, and It Shows” I discussed the way in which a confluence of factors such as the decay of the intermediary institutions of civil society and economic insecurity leads to individuals being vulnerable and anxious. This vulnerability, I argued, leads to political tribes seeking to control the power of the state in order to prevent its massive power from being used against them, with the end result being increasing civil strife over the institutions of political power. In order to try and reduce such conflict, I argued that power should be dispersed throughout society, rather than concentrated with the state, in part by the revitalization of the institutions of civil society.
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Twin peaks: Understanding the distribution of export intensity across the world – Fabrice Defever, Alejandro Riaño
1 december
Received wisdom suggests that the majority of exporters in a country sell most of their output domestically. This column presents recent research that casts doubt on this assumption. The distribution of export intensity varies substantially and in most countries there are ‘twin peaks’, with some firms exporting a lot of their output, and others a little. This would be consistent with a standard model of international trade if the model were adjusted to recognise that firms differ in the demand they face in each market.
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How Market Competition Really Works – Cameron K. Murray
1 december
One of the best models of competitive markets in an economy is an evolutionary one that embeds the ideas that cooperation and competition operating at different levels. The basic ingredients of the evolutionary approach are:

Variation – A process that varies inheritable traits at any reproducible unit (organism, tribe/colony, cell).
Selection – A process whereby the environmental conditions determine the reproductive success of a reproducible unit.
The result is a process of adaptation.
A firm (or any organisation) can be considered a reproducible unit.
The market and society as the environment which determines success and reproduction
Relative success matters for reproduction (firm growth and continued existence) rather than an absolute success.
Success depends on the local environment at each point time – there is no timeless correct way to do things, and there are environmental niches (sometimes temporary).
The success of markets in delivering efficient output is, therefore, the result of within-firm cooperation, and between-firm competition.
Without market level selection pressure, firms can become internally competitive, losing efficiency.

These ideas might make more sense with an example.
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Short Sellers Are Aggravating China’s Bond Rout – Tyler Durden
2 december
After the Party Congress finished in October and China’s centrally planned markets were released (somewhat) from the vice-like grip which had prevailed during the proceedings, we noted the comment from Huachuang Securities that China’s bond holders may be about to get hit by “daggers falling from the sky”, referring to deleveraging. They were right, to some extent, as first the government bonds, then corporate bonds sold off during November. This was driven by the authorities tightening credit conditions and redemptions in Wealth Management Products, which led to some unravelling in the latter Ponzi scheme. However, as Bloomberg explains, another factor has been at work, a rise in short-selling, which might not please the central planners.
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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.

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