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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Five Reasons for Central Banks: Are They Any Good? – Karl-Friedrich Israel
21 februari
In a time when Federal Reserve reforms are discussed more openly than ever before, it seems appropriate to also think about the more fundamental question of whether central banks are needed in the first place. In 1936, Vera C. Smith (later Lutz) published her doctoral dissertation The Rationale of Central Banking written under Friedrich A. von Hayek at the London School of Economics. Smith reviewed the economic controversies around central banking from the nineteenth to the early twentieth century in France, Belgium, Germany, England, Scotland, and the United States.
Smith made very clear that central banks are not the result of natural developments in the banking sector, but come into existence through government favors.
So what are the justifications for central banks? Smith identified five main arguments for central banks from an economic point of view. Although Smith has written with a gold standard as the underlying monetary system in mind, it is interesting to look at these arguments with the benefit of hindsight more than 80 years later. Has any one of the arguments actually made a strong or even conclusive case for central banking?
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This is Why World Trade is the Weakest Since 2009 – Wolf Richter
21 februari
World Trade has been on our worry-list for a while, most recently in December [World Trade Falls to 2014 Level, just in Time for a “Trade War”]. Why has world trade refused to boom recently? And it wasn’t just last year. But last year was particularly crummy. Lackluster global demand gets blamed. But that’s using a broad brush to sketch a troublesome development.
Now the alarmed World Bank, in its report, Trade Developments in 2016 (PDF), barely blames the usual suspects for this lackluster global demand, but identifies a new and dominant one: “policy uncertainty.”
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Long Run Fed Targets – John H. Cochrane
21 februari
What should the Fed’s long-run interest rate target be? The traditional view is that the glide path should aim at 4% — 2% real plus 2% inflation.
3%?
One big question being debated right now is whether the “natural” real rate of interest — r* or “r-star” in econspeak — has declined below 2%.
Over the long run, the Fed cannot control the real rate of interest — that comes from how much people want to save and what opportunities there are for investment, i.e. the marginal product of capital. So, if the real rate of interest is now permanently lower, say 1%, then one might argue that the glide path should aim for 3% long-run interest rate — 1% real plus 2% inflation target — not 4%.
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Macroprudential stress tests: A new analytical tool – Vítor Constâncio
22 februari
The Global Crisis and its aftermath led to greater use of stress tests and to the establishment of macroprudential policy as a new policy area. In this column, ECB Vice-President Vítor Constâncio introduces new suite of analytical tools that support the design and calibration of macroprudential policy. The tools go well beyond the requirements of the traditional solvency stress tests applied to banks, and include a broader set of institutions than just banks, an analysis of the financial cycle, as well as an assessment of systemic risk levels associated with the economic and financial shocks considered in adverse scenarios.
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Which is Worse — A Trade Surplus or a Trade Deficit? – Antony P. Mueller
22 februari
Germany is currently the country with the largest trade surplus, and many Germans think that this is a good thing. In the United States, the situation is the reverse. The US has the world’s largest trade deficit. It amounts to USD 502.25 billion for 2016.
A country’s trade balance is equal to the difference between a country’s national savings and its gross investment. Savings reflect the difference between income and consumption. Thus, a country with a surplus consumes or invests too little given its income. That is the case with Germany. In America, it is the other way around.
How is this disparity possible? It is possible because the dollar and the euro are both fiat monies. Different from the gold standard, countries can now get along with persistent trade imbalances. These trade imbalances, in turn, permit grave domestic discrepancies among income, consumption, and investment.
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*** This Rally in Stocks is Doomed: Goldman – Wolf Richter
22 februari
Stocks have surged to new highs since the election, from already very lofty levels, on the theory that the Trump Administration and Congress would create policies that would pile enormous benefits on Corporate America – and do so pronto. This includes, as President Trump called it, a “phenomenal tax plan,” deregulation for Wall Street and other sectors, and additional government spending, particularly a $1-trillion boost to infrastructure spending and some plus-sized moolah for the military.
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Gross capital inflows to banks, corporates, and sovereigns – Stefan Avdjiev, Bryan Hardy, Sebnem Kalemli-Ozcan, Luis Servén
24 februari
Capital flows play a key role in the transmission of real and financial shocks across countries, but empirical work on flows by sector is scarce. This column uses a newly constructed dataset of capital inflows for 85 countries, broken down by borrowing sector, to show that private debt flows are negatively correlated with global risk appetite, while borrowing by sovereigns is positively correlated with risk appetite. This and other results discussed show the importance of splitting capital inflows into their borrowing sectors when designing policy to manage macrofinancial risk.
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The Problem with Gold-Backed Currencies – Charles Hugh Smith
23 februari
Any currency is only truly “backed by gold” if it is convertible to gold.
There is something intuitively appealing about the idea of a gold-backed currency –money backed by the tangible value of gold, i.e. “the gold standard.”
Instead of intrinsically worthless paper money (fiat currency), gold-backed money would have real, enduring value–it would be “hard currency”, i.e. sound money, because it would be convertible to gold itself.
Many proponents of sound money identify President Nixon’s ending of the U.S. dollar’s gold standard in 1971 as the cause of the nation’s financial decline. If our currency was still convertible to gold, the thinking goes, the system would never have allowed the vast pile of debt to accumulate.
The problem with this line of thinking is that it is disconnected from the real-world mechanisms of capital flows and the way money is created in our financial system.
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European integration and populism: Addressing Dahrendorf’s quandary – Marco Buti, Karl Pichelmann
22 februari
With its current competences lacking the ability to address distribution effects, the EU is seen as an agent of globalisation rather than a response to it. At the same time, it is charged with undermining national autonomy, identity, and control. This column sets out five guiding principles for policy articulation at the EU level for a new positive EU narrative.
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Miserable 21st Century – John H. Cochrane
20 februari
Nicholas Eberstadt in Commentary, (HT Marginal Revolution) offers a revealing look at what’s wrong with “middle” America’s stagnation. Read the whole thing, but the following snapshot jumped out at me.
He starts with a review, probably familiar to readers of this blog, of the sharp decline in work rates, even among prime-age men and women.
As of late 2016, the adult work rate in America was still at its lowest level in more than 30 years. To put things another way: If our nation’s work rate today were back up to its start-of-the-century highs, well over 10 million more Americans would currently have paying jobs.
Why are so many not working, not studying for work, and not even looking for work? What is going on in their lives? One answer:
The opioid epidemic of pain pills and heroin that has been ravaging and shortening lives from coast to coast is a new plague for our new century…
According to [Alan Krueger’s] work, nearly half of all prime working-age male labor-force dropouts—an army now totaling roughly 7 million men—currently take pain medication on a daily basis.
I think Krueger had a different idea in mind: that they are in pain, indicated by medication, so can’t be expected to work. How the explosion in disability jibes with a much safer workplace is an interesting puzzle to that view. Eberstadt has a different interpretation, and the lovely thing about facts is they are facts, not interpretations.
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***Instant Tax Collection: As Bitcoin Surges to Record High, China Prepares its Own Digital Currency; Exploring the Digital Downside – Mike Mish Shedlock
24 februari
Bitcoin hit an all-time high of $1,172.09. Traders are happy because the SEC is expected to rule on a Bitcoin ETF by March 11.
Meanwhile, Bloomberg reports China Is Developing its Own Digital Currency.
After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central banks to issue digital money that can be used for anything from buying noodles to purchasing a car.
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It Gets Ugly in Brazil – Wolf Richter
24 februari
The price of corruption.
In a stunning deterioration, the unemployment rate in Brazil spiked to 12.6% in the rolling three-month period through January, a record in the new data series going back to 2012, according to Brazil’s statistical agency IBGE. Up from 11.8% in the three-month period through October. Up from an already terribly high 9.5% a year ago. And more than double the 6.2% in December 2013.
Economists had expected the unemployment rate to rise to 12.4%. After three years of underestimating the political, fiscal, and economic fiasco in Brazil, they’re still underestimating it.
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Globalisation and economic nationalism – Italo Colantone, Piero Stanig
20 februari
The revival of nationalism in western Europe, which began in the 1990s, has been associated with increasing support for radical right parties. This column uses trade and election data to show that the radical right gets its biggest electoral boost in regions most exposed to Chinese exports. Within these regions communities vote homogenously, whether individuals work in affected industries or not.
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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.