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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Modern Monetary Collectivism – Joakim Book
1 december
These days, MMT—modern monetary theory—is all the rage.
Most people, especially among those criticizing this (post)modern way of looking at money and government spending, have focused on the macroeconomic parts of the illusive MMT promise. The gist of the MMT framework is that we can all have nice things if only government officials would adopt the commonsensical view of MMT. (Yes, yes, there are real capacity constraints, but we’ll wave them away).
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Is There Really A China Economic Miracle? – Daniel Lacalle
15 November
The year 2020 will be an extremely tough year for the European economy. Added to an unprecedented drop is a strong impact in the fourth quarter due to the new lockdowns. Morgan Stanley estimates that the eurozone’s GDP will fall by 2.2% in the fourth quarter, a 7% drop in the full year 2020. In addition, the investment bank lowers the outlook for 2021 with a rebound of only 5% in the average of the euro area, delaying the recovery of 2019 GDP to 2023.
The “jobless recovery” is even more worrying. The apparently spectacular rebound data for the third quarter resulted in zero job creation. Unemployment in the eurozone in September stood at 8.3% and in Spain at 16.5%, not counting the millions of furloughed jobs in Europe.
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Central Bank Of Uzbekistan Introduces Parallel Currency: Gold – Jan Nieuwenhuijs
5 december
Since November 2020, the central bank of Uzbekistan (CBU) issues sealed gold bars with a QR-code for real time verification. With these new bars CBU aims to stimulate gold to be used as a store of value, as well as promote the circulation of gold.
More and more governments and central banks around the world are promoting gold as a store of value. Not surprisingly, as gold has proven to preserve its purchasing power over thousands of years, and it’s becoming ever more clear the future of fiat currencies is shaky (yes, central banks are aware of this).
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Target the spread? – John H. Cochrane
4 december
The Fed wants to control inflation. Now, it targets the nominal interest rate. But to do that it has to guess what the right real interest rate is. Nominal interest rate = real interest rate plus expected inflation.
Guessing the right price is hard for any planner, and guessing the right asset price doubly hard. If the Fed wants to target inflation, why not target the spread between real and indexed bonds, and let the level of interest rates float to wherever they want to go by market forces?
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Why Does Bitcoin Have Value? – Jeffrey Tucker
5 december
Even after eleven years experience, and a per Bitcoin price of nearly $20,000, the incredulous are still with us. I understand why. Bitcoin is not like other traditional financial assets. Even describing it as an asset is misleading. It is not the same as a stock, as a payment system, or a money. It has features of all these but it is not identical to them. What Bitcoin is depends on its use as a means of storing and porting value, which in turn rests of secure titles to ownership of a scarce good. Those without experience in the sector look at all of this and get frustrated that understanding why it is valuable is not so easy to grasp.
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Antitrust in the digital economy: Views of leading economists on the market dominance of technology giants – Romesh Vaitilingam
30 november
In October 2020, the US Department of Justice launched a federal antitrust lawsuit against Google, accusing the firm of abusing its dominance in the market for internet search. The IGM Forum at Chicago Booth invited its panels of leading US and European economists to express their views on the nature of the market dominance of Google and other technology giants in the digital economy, and what the appropriate policy response might be. As this column reports, among other results, when asked whether the imposition of some kind of regulation or a fundamental change in antitrust policy is warranted, a larger proportion of experts on the European panel agreed than of those on the US panel.
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***Covid Is Revealing the Cancerous Underbelly of U.S. Healthcare – Charles Hugh Smith
4 december
If you still believe that America’s Sickcare is “the finest in the world” and is endlessly sustainable, please study these three charts and extend the trendlines.
I’ve long been making the distinction between healthcare and sickcare: healthcare is the service provided by frontline operational caregivers (doctors, nurses, aides, technicians, etc.) and sickcare is the financialized system of Big Hospital Corporations, Big Insurers, Big Pharma, etc. and their lobbyists that keep the federal money spigots wide open.
This financialized sickcare system is being consumed by the cancer of greedy profiteering pursued by self-serving insiders. The delivery of healthcare is secondary to maximizing revenues and profits by any means available.
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Why Government Stimulus Sometimes Looks like It Revives the Economy – Frank Shostak
1 december
Once an economy falls into an economic slump and the level of unemployment begins to rise most commentators are of the view that it is the duty of the government and the central bank to step in to counter the rise in unemployment. Some commentators are of the view that the lowering of unemployment can be achieved without any cost given that the unemployed individuals are idle
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Breakeven Inflation Is Breaking Out – Bryce Coward
5 december
Inflation expectations as priced by the Treasury market are hitting 18 month highs just now. As the reader can see, inflation expectations across all treasury maturities are at cycle highs.
This is happening coincident with growing expectations for the $908bn bipartisan stimulus deal and widespread expectations that the Fed will ease in some additional way at their next meeting 12 days from now.
That these two events are anticipated by the market does pose some near-term downside risk for inflation expectations, since there is now room for disappointment. Even still, keeping the long game in mind is useful.
Inflation expectations as priced by the Treasury market are hitting 18 month highs just now. As the reader can see, inflation expectations across all treasury maturities are at cycle highs.
This is happening coincident with growing expectations for the $908bn bipartisan stimulus deal and widespread expectations that the Fed will ease in some additional way at their next meeting 12 days from now.
That these two events are anticipated by the market does pose some near-term downside risk for inflation expectations, since there is now room for disappointment. Even still, keeping the long game in mind is useful.
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The Jobs Report is a Mess, December Will Be Messier – Wolf Richter
4 december
The cut-off date (Nov. 14) kept much of the hit from the Covid spike out of the data. Then there are the long-term hits to the American job market, such as rampant globalization.
Everyone seems to be baking the highly anticipated potential future vaccines into the economic cake, but what has been happening for weeks is a spike in Covid cases across the US that has already triggered economic restrictions, including various versions of stay-at-home orders in Los Angeles County, San Francisco, and some other Bay Area counties, with restaurants closed for outdoor dining, strict capacity restrictions in retail stores, and many other restrictions. These moves are ahead of the State of California’s new framework for dealing with the spiking infections.
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Privacy, Power, Fiscal Policy, the Poor: Four Reasons to Worry about CBDCs – Wolf von Laer
2 december
It has become clear by now that central bank digital currencies, or CBDCs, will be in our future and the technology will fundamentally change the use of money and the economic system as a whole.
The world’s biggest economies and their central banks have announced they are working on CBDCs: the US Federal Reserve, the Bank of Canada and the European Central Bank are trailing behind the People’s Bank of China, which already is testing its CBDC with more than fifty thousand citizens. The Bahamas issued its central bank digital currency—the “sand dollar”—in October.
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2021 is Already Optimized for Failure – Chales Hugh Smith
30 november
One sure way to identify a system “optimized for failure” is if all the insiders are absolutely confident the system is “optimized for my success”.
I often discuss optimization here because it offers an insightful window into how systems become fragile and break down. When we optimize something, we’re aiming to get the most bang for our buck: maximize our efficiency, profit, productivity, etc., while minimizing our costs.
To maximize our goal, whatever it is–profits, power, whatever– we strip away redundancy and buffers because these add costs and don’t boost our desired output. They create resilience, i.e. the ability to survive disruptions, but the logic of optimization is relentless: get rid of all extraneous costs, because resilience doesn’t boost the bottom line.
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Managerial practices influence the ability of economies to weather large shocks – Gilbert Cette, Jimmy Lopez, Jacques Mairesse, Giuseppe Nicoletti
2 december
The COVID-19 crisis has highlighted the importance of the swift reorganisation of tasks and logistics in cushioning economic shocks. While it is too early to study the effects of managerial talent on resilience to the COVID-19 crisis, useful insights can be drawn from the experience of the Great Recession. This column shows that countries with a higher quality of management before the Great Recession have been more able to limit employment losses. This was achieved through the ability to moderate real wage growth.
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Deflation Doesn’t Undo the Problems Caused by Past Inflation – Frank Shostak
5 december
By a popular way of thinking, it is the role of the central bank to make sure that economy follows a path of stable economic growth and prices. The economy is perceived to be like a spaceship that occasionally slips from this trajectory.
Following this way of thinking when economic activity slows down and strays from the path of stable economic growth and stable prices, it is the duty of the central bank to give it a push, which will put it back on track. The push is given by means of a loose monetary policy, i.e., lowering interest rates and raising the growth rate of money supply.
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Franchise Relations Deteriorate As Pandemic Wreaks Havoc On Small Business – Tyler Durden
5 december
According to a new WSJ report, the virus pandemic has unleashed enormous stress, destroying the cozy relationships between franchisees and executives at burger chains, hotels, and other types of shops.
WSJ’s Micah Maidenberg and Heather Haddon outline how the virus-induced downturn in the economy has led store owners and corporate execs at Subway, Econo Lodge, and other companies “to bicker publicly like never before.”
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Just in Time for Holiday Shopping Season: UK Fashion Giant Arcadia Crashes into Bankruptcy – Nick Corbishley
1 december
Asset stripping by its owner, years of brick-and-mortar meltdown, topped off by the Pandemic. Suppliers, landlords, and pensioners twist in the wind.
One of the UK’s largest brick-and-mortar fashion retailers, Arcadia, has crashed into administration, becoming the country’s biggest corporate casualty of the Pandemic so far, according to its administrator Deloitte. But it had already been weakened by years of brick-and-mortar meltdown and by asset stripping by its owners.
Arcadia employs 13,000 workers and runs 422 stores in the UK as well as 22 outlets overseas, a far cry from the more than 2,000 outlets it operated globally in 2004 when current owner, Philip Green, took over the company.
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How monetary policy affects investment in the euro area – Elena Durante, Annalisa Ferrando, Philip Vermeulen
30 november
Monetary policy affects firms’ investment behaviour through an interest rate channel and a balance sheet channel. This column uses investment data from over one million firms in Germany, Spain, France, and Italy to analyse the transmission of monetary policy shocks. It finds heterogeneity in the effects depending on firm size and industry – young firms and those producing durable goods react more strongly than the average firm. Embedding these findings into macroeconomic models used in policymaking would enhance the information available to decision makers.
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When Governments Confiscate Wealth to Fund Government Programs – Ludwig von Mises
30 november
The entrepreneurs try to undertake only such projects as appear to promise profits. This means that they endeavor to use the scarce means of production in such a way that the most urgent needs will be satisfied first, and that no part of capital and labor will be devoted to the satisfaction of less urgent needs as long as a more urgent need, for whose satisfaction they could be used, goes unsatisfied.
When the government intervenes to make possible a project which promises, not profits, but losses, then there is only talk in public of the need which finds satisfaction through this intervention; we do not hear anything of the needs which fail to be satisfied because the government has diverted to other purposes the means of satisfying them. Only what is gained by the government action is considered, not also what it costs.
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***From a common empire to colonial rule: Commodity market disintegration in the Near East – Laura Panza
5 december
Political disintegrations have the potential to cause large disturbances in international trade. This column investigates the effect of the breakup of the Ottoman Empire on commodity market integration in the Near East. Rising political and economic nationalism, tariff wars, and other protectionist practices prevailed over trade cost-reducing forces, leading to the disintegration of regional markets. At the same, new trade ties were created and colonial market linkages strengthened, despite the anti-global environment of the interwar era. However, the process of trade diversion reflected a shift from multilateralism to bilateralism.
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Untangling financial aid effects in a randomised trial – Josh Angrist, David Autor, Amanda Pallais
6 december
The US government and private organisations spend substantial amounts on financial aid for college students. Does this lead more students to complete college, or simply reimburse students who would have earned degrees anyway? This column reports on a randomised controlled trial with a private provider of post-secondary grant aid in Nebraska. It finds that awards increase enrolment and that recipients are considerably more likely to enrol at a four-year, rather than a two-year, college. Awards also boost bachelor’s degree completion rates in particular among subgroups that are typically less likely to complete a college degree.
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Why Central Bank Digital Currencies Are a Bad Idea – Tomas Forgac
30 november
Central bank digital currencies (CBDC) are being sold with the narrative of protecting consumers who are increasingly moving to cashless payments. Some say that these cashless payments will rob us of the privacy advantages of cash while exposing us to bank runs, payment network blackouts, and foreign financial adversaries.
Yet while these risks are real, they would be negligible had it not been for the central banking and financial regulators’ interventions into the market. CBDCs make these interventions worse and introduce some new, much bigger ones.
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***The State of American Restaurants, by City: The Catastrophe of the Second Wave – Wolf Richter
29 november
Despite the rampant indoorification of outdoor dining.
The second wave of the Pandemic is gripping the restaurant business that had already been battered by the first wave. Given the exploding infection rates across the US, restaurants had to dial back their services, and in a number of cities even outdoor dining is now off-limits. And in many cities where it’s not off-limits, the winter weather makes it very difficult, despite the conceptually dubious indoorification of outdoor dining, with sidewalk buildings fashioned of plastic sheets, plexiglass, wood, and steel.
The number of “seated diners,” a daily measure OpenTable provides to track walk-ins and diners with reservations, has been dropping since the end of October, compared to the same weekday in the same week last year. At the end of October, the seven-day moving average of the number of seated diners across the US was down 40% from a year earlier.
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Climate Change Policy Isn’t Worth Its High Cost – Lipton Matthews
5 december
Numerous thought leaders agree that climate change is the defining issue of the twenty-first century. To garner widespread support for their cause, activists often present climate change as an existential risk. We are repeatedly told that there is incontrovertible evidence that humans are the main cause of climate change and that its effects are cataclysmic. Failing to uphold any of these positions can result in great reputational damage for pundits and scholars. Due to fear of backlash many choose to remain silent. Revisiting the history of climate change, however, would temper the hysteria of climate alarmism. Climate change is not a new phenomenon, and neither is it synonymous with disasters. By showing that the mainstream position on climate change is misguided, we will demonstrate that radical recommendations are unwarranted and hence more likely to inflict damage than prosperity.
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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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