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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***“Real Socialism” Has Indeed Been Tried — And It’s Been a Disaster – Ryan McMaken
5 mei
May 5th marks the 200th Anniversary of Karl Marx’s birth, and in spite of inspiring a wide variety of political movements that have caused countless human rights disasters, Marx continues to be an object of admiration among many intellectuals and artists. One such example can be seen in Raoul Peck’s new film The Young Karl Marx which portrays Marx is a principled radical with a laudable thirst for justice.
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Russell Napier: The Rising Dollar Will Trigger The Next “Systemic Banking Crisis” – tyler Durden
5 mei
Fresh off his successful call earlier this year that the US dollar would strengthen in the coming months, macroeconomic strategist and market historian Russell Napier joined MacroVoices host Erik Townsend to discuss why he favors deflation and why he has such a bullish view on the US dollar.
Echoing David Tepper’s concerns that the equity highs for the year might already be in, and that a 10-year yield above 3.25% could lead to market chaos, Napier said he sees interest rates rising sharply in the coming months as the dollar strengthens – a phenomenon that will push the US back into deflation.
Napier’s thesis relies on one simple fact: With the Fed and foreign buyers pulling back, who will step into the breach and buy Treasurys?
The answer is – unfortunately for anybody who borrows in dollars – nobody. In fact, the Fed is expected to allow $228 billion in Treasury debt to roll off its balance sheet this year.
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Europe needs a broader discussion of its future – Guntram Wolff
4 mei
When thinking about what will determine the prosperity and well-being of citizens living in the euro area, five issues are central. This column, part of VoxEU’s Euro Area Reform debate, argues that the important CEPR Policy Insight by a team of French and German economists makes an important contribution to two of them, but leaves aside some of the most crucial ones: European public goods, a proper fiscal stance and major national reforms. It also argues that its compromise on sovereign debt appears unbalanced.
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Groundhog day in Argentina – John H. Cochrane
4 mei
My friend and colleague Alejandro Rodriguez, director of the Department of Economics at CEMA in Buenos Aires, wrote me a few emails that Argentina seems to be blowing up again in very interesting and sad ways. I haven’t seen any coverage in the US media.
Argentina is going through some fun times (for macroeconomists)… After a two day holiday markets opened yesterday and the peso kept falling (-3%) despite the rate hike (300bps) on friday and the continued drain of reserves. We are trapped with Bill Murray in Groundhog Day. Same thing today… markets open with pressure on the peso. The central bank sold 300 millon of reserves in less than 10 minutes early in the morning when liquidity is at its lowest and it couldn´t sopt the run. Soon after it announced another rate hike of 300bps. Short term debt that expires on may 16 has a yield of 38.7% APR and there are 680 billon pesos of it waiting to mature in less than two weeks. Still the market did not respond and the peso kept falling, more than 8% with respect to yesterday´s close….
Naturally my interest is particularly peaked by a country whose central bank seems powerless to stop inflation and devaluation in a time of fiscal stress. In fact, there are indications that raising interest rates, by making interest costs larger, make the fiscal problem worse and make devaluation worse, not better.
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How China Became The World’s Number One International Financial Donor – Valentin KATASONOV
5 mei
At the spring meeting of the International Monetary Fund (IMF) and the World Bank (WB), the head of the US Treasury Department, Steven Mnuchin, touched upon a delicate subject: the financing of IMF and WB members by China and several other developing countries. He called these countries “non-transparent creditors” that do not coordinate their operations with the IMF, thereby destabilising the international loan market. Mnuchin noted that this practice creates problems for the debtor countries when it comes to the debt restructuring process.
These arguments are a cover for the US official’s barely disguised irritation at the fact that China is going against Washington’s usual way of doing things on the international loan market, where it has reigned supreme for many years and directed the market using the US-controlled International Monetary Fund. Steven Mnuchin then implied that Washington expected Beijing to coordinate its loan decisions for certain countries with the IMF.
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Financial globalisation and bank lending: The limits of domestic monetary policy – Jin Cao, Valeriya Dinger
3 mei
The effectiveness of monetary policy in dictating banking activities is one of the keys to understanding how efficient monetary policy is in tuning the real economy. This column uses data on Norwegian banks to show that efficiency may be eroded by international financial flows in a small open economy. This raises several challenges for central banks and financial regulatory agencies in such economies.
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Is the Eurocrisis Over? – Philipp Bagus
30 april
In 2017, for the first time ever, all Euro zone countries had a government deficit below 3% of GDP, thereby complying with the Stability and Growth Pact. Does this mean that the euro crisis is officially over? Have pessimists been wrong? Can governments boost government spending as they rejoice?
There are several reasons why the euro crisis is far from being over and government finances still unsustainable.
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Update on the Most Splendid Rental Bubbles & Crashes in the US – Wolf Richter
1 mei
Chicago rents collapse, New York’s swoon, Southern California’s boom. And the US average hides all the drama on the ground.
The situation with rents in the most expensive US rental markets can be summarized like this: Free-fall in Chicago, where the median asking rent for two-bedroom apartments has plunged 32% from its peak, a similar collapse in rents in Honolulu, double-digit declines from the peak in New York City and Washington DC, mixed movements in the Bay Area, a blistering boom in Southern California, and everything in between.
Watered down into a tidy nationwide average, the median asking rent for one-bedroom apartments in the US rose 1.4% in April compared to a year ago, to $1,185. And for two-bedroom apartments, it rose 2.2% from a year ago to $1,422.
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The natural geography of regional trade agreements and why it is changing over time – Lionel Fontagné, Gianluca Santoni
30 april
Country-pairs self-select in regional trade agreements, and this endogeneity biases the estimation of the impact of such agreements within a gravity framework. This column uses a framework for predicting which countries should engage in RTAs based solely on economic determinants, including global value chains, and compares this ‘natural’ geography of agreements with the actual geography. The results suggest that the endogenous geography of RTAs is shaped by the development of GVCs.
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Taking the Pulse of a Weakening Economy – Charles Hugh Smith
4 mei
Corporate buybacks provide the key analogy for the economy as a whole.
Central banks have been running a grand experiment for 9 years, and now we’re about to find out if it succeeds or fails. For 9 unprecedented years, central banks have pushed the pedal of monetary stimulus to the metal: near-zero interest rates, monumental purchases of bonds, mortgage-backed securities, stocks and corporate bonds, injecting trillions of dollars, yuan, yen and euros into the global financial system, all in the name of promoting a “synchronized global recovery” that in many nations remains the weakest post-World War II recovery on record.
The two goals of this unprecedented stimulus were 1) bringing consumption forward and 2) generating a “wealth effect” as the owners of assets rising in value would translate their perception of feeling wealthier into more borrowing and consumption that would then feed a self-sustaining virtuous cycle of expansion.
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***The Eurasian Landbridge: Linking regional value chains – Richard Pomfret
1 mei
A dramatic development in the 2010s has been establishment of overland rail freight services between the EU and East Asia. This column, the first in a two-part series, look at the catalyst for the Eurasian Landbridge rail services and it’s impact on trade costs. While traffic on the Landbridge is still small compared to China-EU maritime trade, there is potential for further service improvement with implications for global value chains across Eurasia.
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Why Fractional Reserve Banking Poses a Threat to Market Stability – Robert P. Murphy
4 mei
On April 16, 2018 I participated in a debate with George Selgin, hosted by Gene Epstein’s Soho Forum. I was arguing in the affirmative for the resolution: “Fractional reserve banking poses a threat to the stability of market economies.” The full video is available here (and note that some of my remarks allude to the opening comedy from Dave Smith before the debate). Rather than summarize the live debate, in the present post I’ll lay out the position I took and how it was influenced by my study of Joe Salerno’s writings on the topic—in particular Chapter 5 of this collection.
Instability, not Fraud
In order to focus the debate on the issue of economic instability, I purposely avoided all talk of “fraud.” Although Block and Davidson (2011) for example think that the ethics of fractional reserve banking (FRB) were key in evaluating the merits of the practice, I thought most people have already made their minds up on this score.
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Jobs, Sliced and Diced – Wolf Richter
4 mei
Where they went, where they came from.
Employers added 164,000 jobs in April, seasonally adjusted, according to the Bureau of Labor Statistics, based on its survey of about 651,000 work sites of 149,000 businesses and government agencies. It was the 91st month in a row of gains, the longest such period in the history of the data.
The trend has been solid but not spectacular: For the 12-month period ended in April, employers added 2.27 million jobs (not seasonally adjusted). This is in the middle of the range since 2012. The chart below shows the 12-month change in payrolls going back to 2000:
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The Real Driver of Rising Inequality – Lance Taylor
1 mei
Wage suppression—not monopoly power—is fueling corporate profits and the growing gap between rich and poor
Income distribution and employment are crucial macroeconomic indicators. Profits are key to distribution. Ther share in the value of output has risen steadily since around 1980. Households near the top of the size distribution of income receive business profits through various channels including interest, dividends, capital gains, proprietors’ incomes, and even labor compensation—which in US statistics includes profit-related items such as bonuses and stock options. Rising household inequality can be traced directly to higher profits fed by slower growth of real wages than of productivity (Taylor and Ömer, 2018).
The employment rate or the ratio of employment to the working age population, fluctuates around 60%. It hit a post-WWII high of 64% in 1990 at the peak of a business cycle, dropped to 55% in the wake of the Great Recession, and now is nearing 62%.
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A Germany without fiscal transfers – Marcel Henkel, Tobias Seidel, Jens Südekum
4 mei
Germany shifts a massive amount of fiscal transfers across jurisdictions every year. This column argues that this limits the degree of economic disparities across regions, but comes at the cost of lower national productivity and output. Still, in terms of welfare, Germany would not be better off if all fiscal transfers were abolished.
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