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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***Why Economics Cannot Be Understood through Experimentation – Frank Shostak
1 september
In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of econometrics and econometric model building is an attempt to create a laboratory where controlled experiments can be conducted.
Building an Economic Model
The idea of having such a laboratory is very appealing to economists and politicians. Once the model is built and endorsed as a good replica of the economy, politicians can evaluate the outcomes of various policies.
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Design choices for central bank digital currency – Sarah Allen, Srđan Čapkun, Ittay Eyal, Giulia Fanti, Bryan Ford, James Grimmelmann, Ari Juels, Kari Kostiainen, Sarah Meiklejohn, Andrew Miller, Eswar Prasad, Karl Wüst, Fan Zhang
4 September
Many central banks are considering, and some are even piloting, central bank digital currency. This column provides an overview of important considerations for central bank digital currency design. While central banks already provide wholesale digital currency to financial institutions, a retail central bank digital currency would expand access to more users and provide opportunities for innovative central banking. The design must balance these benefits with the potential risks created by retail central bank digital currency deployment.
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Sound Money Is Key to Defending Our Liberties – Thorsten Polleit
2 september
The title of this article epitomizes what the Austrian economist Ludwig von Mises (1881–1973) called the “sound money principle.” As Mises put it:
The sound-money principle has two aspects. It is affirmative in approving the market’s choice of a commonly used medium of exchange. It is negative in obstructing the government’s propensity to meddle with the currency system.1
And further:
It is impossible to grasp the meaning of the idea of sound money if one does not realise that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of right.2
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Open economy challenges: Global currencies and trading networks – Silvana Tenreyro
4 September
Understanding the nature of the global economy remains an important and interesting topic of discussion for both policymakers and researchers. This column presents a summary of two recent evaluations of aspects of the open economy. The author summarises work concerning global currencies and trading networks, offering insights into how the research agenda on each area may evolve over the coming years.
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Why Entrepreneurs—Unlike Politicians—Seek to Truly Serve the Public – Ludwig von Mises
The consumers by their buying and abstention from buying elect the entrepreneurs in a daily repeated plebiscite as it were. They determine who should own and who not, and how much each owner should own.
As is the case with all acts of choosing a person—choosing holders of public office, employees, friends, or a consort—the decision of the consumers is made on the ground of experience and thus necessarily always refers to the past. There is no experience of the future. The ballot of the market elevates those who in the immediate past have best served the consumers. However, the choice is not unalterable and can daily be corrected. The elected who disappoints the electorate is speedily reduced to the ranks.
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Dual interest rates give central banks limitless fire power – Eric Lonergan, Megan Greene
3 September
The low interest rate environment since the Global Financial Crisis has led economists and analysts to suggest that major central banks have run out of monetary policy tools with which to face major downturns, including the Covid-19 crisis. This column argues that a dual interest rate approach could help to eliminate the effective lower bound and given central banks infinite fire power. By employing dual interest rates, central banks can go beyond targeting short-term interest rates and providing emergency liquidity to provide a stimulus across the economy. As political support for fiscal stimulus in the face of the Covid-19 crisis wanes, central banks can and should step in with overwhelming force.
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Work from Home Gets Entrenched: Embraced by Workers & Businesses in the UK, it’s Upending Real Estate, Retail, Restaurants, Bars, Cafés – Nick Corbishley
3 september
“The contract between society and business has changed forever. The office will become a convening place where you get teams together, but the work will be done in people’s homes.”
One of the UK’s largest outsourcing companies, Capita plc, which employs 45,000 people across the country, has just done what many other companies have been thinking and talking about doing since the virus crisis began: it announced that it is permanently closing more than a third of its offices. As a result, the leases on almost 100 workplaces will be terminated.
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How Capitalists Serve the Public Interest – Antony Sammeroff
5 september
The view of the day is that the “greedy rich” are sitting on stacks of cash hidden away in Swiss bank accounts or the Cayman Islands that are doing nothing but fueling their acquisitive vanity while actively preventing the emancipation of their fellow man. With a little redistribution, those stacks of cash could eradicate poverty from the face of the earth and fund social programs that would help the many. After all, who really needs a billion dollars, let alone several billion?
The greatest challenge defenders of the market economy face today may be to convince the general public that private wealth actually fulfills a social function that is beneficial to all, and that it is an indispensable one. Redistributing wealth that is earned legitimately through the voluntary exchange of goods and services will actually prove harmful to everybody, and actively hinder the abolition of poverty.
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Debt matters – John H. Cochrane
4 september
Last week, the U.S. passed a milestone — US federal debt in private hands exceeded 100% of GDP. But does all this debt matter, or is worrying about debt passé?
This debate has been going on among economists for a while. One does not need to go to the incoherence of “modern monetary theory” to find support for the view that debt has few consequences. Olivier Blanchard, of MIT and the IMF, in his Presidential Address to the American Economic Association, (excellent summary here) declared that “there may be no fiscal costs” of additional debt. The core of his argument is that the interest rate on government debt may be lower than the growth rate of the economy so the US can roll over debt forever.
Larry Summers, ex treasury secretary, President of Harvard, and adviser to presidents, surely the preeminent policy economist of our generation, has advocated that additional debt-financed spending may have so strong a multiplier as to pay for itself. (Paper here) As a result “expansionary fiscal policies may well reduce long-run debt-financing burdens,” a super-Keynesian version of the Laffer curve
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Tesla Not Added to S&P 500 Index, Shares Plunge After-Hours: Triple-WTF Chart of the Year Turns into Sharp Spike – Wolf Richter
4 september
Four Days of Free-Fall Mania. Dream goes up in smoke. Passed over by Etsy, Teradyne, and Catalent.
After regular trading hours on Friday, S&P Dow Jones Indices announced which companies would join the S&P 500 Index, and Tesla, tragically, wasn’t on the list. In response in after-hours trading, Tesla shares plunged 7% to $387.
Shares [TSLA] are now down 25% in four days of trading from the after-hours peak on Monday, August 31, in a sort of free-fall mania.
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5 Reasons The Fed’s New Policy Won’t Create Inflation – Lance Roberts
4 september
At the recent Jackson Hole Economic Summit, Jerome Powell unveiled the Fed’s new monetary policy designed to create inflation. In today’s #Macroview, we will discuss the 5-reasons why the Fed will not get inflation, and why deflation is the bigger risk.
The current assumption is that the Fed’s new policy will lead to higher inflation.
“The new policy regime is an important evolution in our thinking about how to achieve our goals and another step toward greater transparency, The policy change positions us for success in achieving our maximum employment and price stability goals in the future.” – Fed Reserve Bank of NY, John Williams, via WSJ
What exactly is this new policy? Well, that’s the interesting part, no one actually knows.
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Working from home: The polarising workplace – Abigail Adams-Prassl, Teodora Boneva, Marta Golin, Christopher Rauh
2 September
Working from home during the Covid-19 pandemic has provided shelter from both the health risks and the economic shock brought about by the pandemic. This column uses survey data from the US and the UK to demonstrate systematic variation in individuals’ ability to work from home both across and within occupations and industries. In addition, men and workers with a college degree can do a substantially higher share of their tasks from home, while workers on low incomes report being able to do a smaller share. This polarisation has increased over the course of the pandemic, as workers who were already able to carry out a large share of tasks remotely have become able to do even more from home.
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Inflation – Running Out Of Road – Alasdair Macleod
3 september
If you think that price inflation runs at about 1.6% you have fallen for the BLS’s CPI myth. Two independent analysts using different methods — the Chapwood Index and Shadowstats.com – prove that prices are rising at a far faster rate, more like 10% annually and have been doing so since 2010.
This article discusses the consequences of price inflation suppression, particularly in the light of Jerome Powell’s Jackson Hole speech when he downgraded the importance of price inflation in the Fed’s policy objectives in favour of targeting employment.
It concludes that the reconciliation between the BLS CPI figure and the true rate of price inflation is inevitable and will be catastrophic for the Fed’s policy of suppressing interest rates, its maximisation of the “wealth effect” of inflated financial asset prices, and for the dollar itself.
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<strong>The Fed’s Latest Lie: It Can Make Everything Go Back to Normal – Brendan Brown
3 september
The Fed Emperor’s New Clothes Show is a continuous comedy without laughter. The latest act, the virtual Jackson Hole conference (August 27), was dreadful.
The show’s audiences are accustomed to the Fed chair and his board delivering solemn pronouncements about their aims—low inflation, high employment, and financial stability. These officials play their parts according to script. They never explain how they will fulfill their promise—it is all boast and no substance. The assembled courtiers, including the financial media representatives who form part of the Fed’s propaganda machine, never ask difficult questions. Those inclined toward skepticism fear exposing their own lack of knowledge or losing their jobs.
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The Economy Continues To Unravel Despite All Stimulus Measures – Brandeon Smith
3september
Since the pandemic lockdowns were first implemented in the US I have been more concerned with the government and central bank response than the virus itself. As I have noted in past articles, the pandemic restrictions and subsequent economic and social crisis events they help to create will cause far more deaths than Covid-19 ever will. Not only that, but the actions of the Federal Reserve continue to con the American public into believing that there is some kind of “plan” to stop the crash that THEY engineered.
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Europeans Discover The Myth About ‘Safety Nets’ The Hard Way – John Tammy
27 augustus
Economic discussions would be much better if it were understood that no one receives dollar, euro, yen, pound or yuan “aid.” They receive the goods that those currencies can be exchanged for. Money on its own doesn’t feed, shelter or clothe. It’s only useful insofar as it’s accepted by the producers of actual goods and services.
This simple truth is hopefully useful as a backdrop to what’s happening in Europe right now.
As Liz Alderman of the New York Times reported on Tuesday, Europeans are presently suffering rather painful job cuts. In Alderman’s words, “At BP, 10,000 jobs. At Lufthansa, 22,000. At Renault, 14,600.”
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The Wild Ride of the Giant 5 Stocks (APPL, MSFT, AMZN, GOOG, FB) v. the Rest of the Market – Wolf Richter
5 september
Suddenly, a whiff of “Don’t fight the Fed?”
Over the last two trading days, Thursday and Friday, the Giant 5 stocks combined fell by 7.4% in value. The Nasdaq dropped 6.2% over those two days. For Apple, the most giant of them all, the selloff started on Wednesday:
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Protectionism and “Weak Dollar” Trade Policy – Christopher E. Baecker
1 augustus
Until disco came back to me at dance clubs and via the great “boogie nights” in the 1990s, I didn’t recall a whole lot from my childhood in the 1970s. Trying to build my own “Speed Racer” and being in awe of the rock group KISS stand out.
“Too many dollars chasing too few goods” was another. That was the catchphrase used to describe the inflationary times, and it would be the last time monetary issues/policy would make sense to me for many, many years.Why We Use Money
It’s not my favorite topic to deal with in class. Explaining money on the other hand, is pretty straightforward.
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China Moves Away From US Dollar, Ahead Of Digital Yuan – Shaurya Malwa
4 september
In brief
China is reducing exposure to the US dollar amidst fears of massive inflation.
The country has sold over $109 billion worth of US bonds in the first half of 2020.
Its upcoming digital yuan is a contender to the US dollar’s long-held global dominance.
China is likely to reduce its holdings of US Treasury bonds to just under $800 billion from the current level of more than $1 trillion, according to local news outlet Global Times.
A major reason for the reduced exposure is the record amounts of US dollars being printed by the country’s Federal Reserve, leading to fears among investors and central banks of imminent inflation. Another is US President Donald Trump’s repeated attacks on the Chinese administration, the report said.
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***The Collapsing Universities—and What We Can Do About It – Llewellyn H. Rockwell Jr.
5 september
America’s universities have been taken over by the Left, but the way they are reacting to the fake covid-19 crisis gives us a chance to reconstitute higher education on sound free market principles.
In the name of “diversity,” academic standards have been gutted. Here are some examples. Emily Walton, a sociology professor at Dartmouth, teaches her students about
“white blindness” Everyone learns, but I find that the small handful of white students in the class usually learn the most. That’s because for the first time in their lives, they begin to look at themselves as members of a racial group. They understand that being a good person does not make them innocent but rather they, too, are implicated in a system of racial dominance.
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Complex Europe: Quantifying the cost of disintegration – Gabriel Felbermayr, Jasmin Gröschl, Inga Heiland
6 September
Rising anti-European sentiments over the past decade have prompted economists to assess the economic consequences of undoing Europe. Focusing on trade, this column uses a state-of-the-art sector-level gravity model to estimate the cost savings achieved through each individual step of integration and then simulate the economic consequences of reversing those steps. The results suggest that if all steps were to be reversed, EU manufacturing exports would drop by 26% and services exports by 12%. A complete breakdown of the EU would also generate significant real consumption losses for all EU members, with small open economies and younger and poorer EU members from central and Eastern Europe having the most to lose.
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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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