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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Geneva Reports on the World Economy 15: Exit Strategy (CEPR flashback 2) – The Editors
08 April 2017
Central banks are now moving towards exiting from quantitative easing and other unconventional monetary policies. This column highlights a 2013 CEPR/ICMB report that examined the policy challenges surrounding this difficult and unprecedented task. It explores ways policymakers could handle exit and its long-run implications. This is part of the CEPR Flashbacks series that highlights the relevance of past CEPR reports to today’s challenges.

Our CEPR Flashbacks highlight past CEPR reports relevant to today’s challenges. This column highlights a report first published in 2013, which examined how the exit from unconventional monetary policies could be handled by policymakers, what the post-exit world will look like, and the long-run implications for central banks.
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***War on Cash Puts ECB, EU on Collision Course with Germany – Don Quijones
7 april
Relations between Germany, and the ECB have curdled in recent times over a key issue: the role of cash. Germans have a soft spot for physical lucre while the ECB and Europe’s executive branch, the European Commission, have openly expressed their desire to suppress, or even punish, its use.
For Germany’s central bank, the Bundesbank, the war on cash is a war on personal freedom and choice, in the name of saving a financial system and its absurd negative interest rates. Last year Bundesbank president Jens Weidmann warned that it would be “disastrous” if people started to believe cash would be abolished — an oblique reference to the risk of negative interest rates and the escalating war on cash triggering a run on cash.
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What has bank capital ever done for us? – Òscar Jordà, Björn Richter, Moritz Schularick, Alan Taylor
7 april
Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies from 1870 to 2013 and for the post-WW2 period, and holds both within and between countries. The authors of this column reach this conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.
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Getting Serious Now? Senators Warren, McCain, Cantwell, and King Introduce New Glass-Steagall Act – Wolf Richter
6 april
Earlier today, I reported on a confidential meeting yesterday where White House economic advisor and ex-Goldman executive Gary Cohn had dropped a bombshell by speaking in support of reverting to a version of the Glass-Steagall Act. It had once separated commercial banks from all other financial activities, but was repealed in 1999 – with terrible consequences that ended in the Financial Crisis.
The digital ink on that article wasn’t even dry when Senator Elizabeth Warren (D-Massachusetts), who’d been part of that meeting, announced today that she and three other senators – John McCain (R-Arizona), Maria Cantwell (D-Washington), and Angus King (I-Maine) – would re-introduce “the 21st Century Glass-Steagall Act.”
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What’s Left To Drive The Recovery? Not Much – John Rubino
7 april
US growth, such as it is, has lately been driven by a handful of hot sectors. Car sales have set records, high-end real estate is generally way up, and federal spending – based on last year’s jump in the national debt – is booming.
But now the private sector part of that equation is shifting into low gear. Cars in particular:
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Fannie and Freddie’s New Bubble – Doug French
5 april
Fannie Mae and Freddie Mac still have housing blood on their hands from the 2008 financial crash. However, the giant GSEs, placed in government conservatorship in September 2008, have now, virtually all by themselves, created another bubble, this time in the multifamily rental market.
Fannie and Freddie made 53% of all apartment loans in 2016, that’s down from their combined 68% market share in 2012. So, their conservator, The Federal Housing Finance Agency (FHFA), recently eased the GSE’s lending caps so they can crank out, even more, loans.
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Consumption vs. GDP – John H. Cohchrane
2 april
Random Critical Analysis has a really interesting blog post from a while ago, on the difference between consumption and income as measures of well being. The level of data analysis and detail on that blog is really impressive.
The narrow question is whether the US spends “too much” on healthcare. A counterargument has always been, what else should we spend money on? As a society gets wealthier, it’s natural to spend more on health care, just as we spend more on art, travel, and so forth.
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FOMC Minutes: Continued Talk of Balance Sheet Strategy – C.Jay Engel
6 april
The minutes from the March FOMC meeting were released yesterday and we discover that the balance sheet theme is really coming together. The massive portfolio held by the Fed is allegedly going to be reversed over the coming years. The way to initiate this shrinkage in the balance sheet is to first stop reinvesting the return that it is making on all the bonds it holds. In the minutes, we learn that they are considering two options for how to do this:
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From “Dissensus” To “Democrazy”: A Warning From Deutsche Bank – Tyler Durden
8 april
Last October, Deutsche Bank’s credit derivatives expert Aleksandar Kocic, one of the best stream-of-consciousness, James Joyceian writers among the Wall Street sell-side, penned what was at the time the best summary why the existing politcal system was fracturing with every passing day. As Kocic put it, the most likely origin of the anti-global sentiment expressed in the past year, in the UK with Brexit and in the US with Donald Trump – incidentally, Kocic wrote his essay three weeks before Trump won – was the result of a “buildup of discontent due to failure to develop a convincing response to economic slowdown in the last years.”
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***Commercial Bankruptcies Spike, Consumer Bankruptcies Jump for First Time since 2010, but Don’t Blame the Oil Bust – Wolf Richter
8 april
Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012. They’re up 8% year-over-year. Over the past 24 months, they soared 37%! At 3,658, they’re at the highest level for any March since 2013.
Commercial bankruptcy filings skyrocketed during the Financial Crisis and peaked in March 2010 at 9,004. Then they fell sharply until they reached their low point in October 2015. November 2015 was the turning point, when for the first time since March 2010, commercial bankruptcy filings rose year-over-year.
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The global corporate saving glut: Long-term evidence – Peter Chen, Loukas Karabarbounis, Brent Neiman
5 april
Corporate saving has increased relative to GDP and corporate investment across the world over the past three decades, reflecting how the global decline in the labour has led to increased corporate profits. This column characterises these trends using national income accounts and firm-level data, and relates them to firm characteristics and the accumulation of financial assets. In response to declines in the components of the cost of capital, a model with capital market imperfections generates an increase in corporate saving similar to that found in the data.
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Has Middle Class America Been Fleeced? – Hunter Lewis
8 april
Noah Smith, writing in Bloomberg, says that middle class America has indeed been fleeced by our national economic policies. We agree. But which policies have been responsible?
Smith mentions and immediately dismisses trade, immigration, economic regulation, and welfare policies. The real villain in his view is an alleged turn toward managing the economy on free market lines: “Your prosperity was taken by the very people who promised to ensure and enhance it. The decades from 1980 through 2008 were the age of neoliberalism — the ideology of the free market.”
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The conduct of monetary policy in a diverse monetary union – Enrico Perotti
4 april
The members of the Eurozone are diverse in terms of their institutional quality. This column outlines the redistributive effects created by the rigid structure of a monetary union next to its direct effects on monetary credibility, and highlights the general equilibrium benefits that core countries draw from it and the cost paid by the productive sector in ‘weaker’ countries. Europe faces a clear challenge, but the success of the transition to the banking union suggests that collective efforts towards institutional evolution can succeed.
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The second original sin of healthcare regulation – John H. Cochrane
5 april
Whenever I advance one or another view of how a relatively free health care and insurance market could work a lot better than the mess we have now, the obvious question comes up: Well, what about the homeless person with a heart attack? You won’t let him die in the gutter will you?
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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.