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 zijn.

Sinds begin 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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If You Want More Jobs and More Job Stability, Disrupt More, Not Less – Charles Hugh Smith
21 juni
Reducing disruption to protect the privileged status quo is akin to poisoning the patient to “protect them from harm.”
Two recent studies reflect the ongoing rapid transformation of the U.S. economy: The New Map of Economic Growth and Recovery (eig.org)
The U.S. Labor Market Is Far More Stable Than People Think (itif.org)
I’ve addressed the dynamic mix of technical and entrepreneurial skills, social and financial capital and infrastructure of opportunities required to successfully navigate this transformation in my books Get a Job, Build a Real Career and Defy a Bewildering Economy and The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.
Here’s the problem in a nutshell: job growth, new businesses and wage gains are becoming increasingly concentrated in a small number of geographic regions and a narrow class of workers / entrepreneurs while the overall economy struggles to maintain productivity gains, which are ultimately the only sustainable source of prosperity.
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The Myth of the Output Gap – Frank Shostak
22 juni
The GDP framework and the output gap is an abstraction that does little more than provide justification for the interventions of government officials.
According to popular thinking, the key cause behind either inflation or deflation is the difference, or the gap, between what an economy is producing and its potential output. Potential output is the maximum amount of goods and services an economy can turn out when it is at full capacity.
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Market Capitalism is Broken: Why Adam Smith Would be Outraged by Modern Finance – John Batelle
15 juni
Every so often a book comes along that works its way into a majority of the interesting conversations you have with both friends and colleagues. Such is the case with Rana Foroohar’s Makers and Takers: The Rise of Finance and The Fall of American Business. Foroohar was kind enough to send me an early draft to read several months ago, and I found myself quoting from it in nearly everything I subsequently wrote, in every talk I gave, and even in various Slack channels at work. Makers and Takers is that rare work of journalism that both appears at a fortuitous moment in history, and captures the essence of that moment’s core narrative.
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Trade invoicing in major currencies in the 1970s-1990s: Lessons for renminbi internationalisation – Hiro Ito, Masahiro Kawai
24 juni
China’s authorities have been promoting the renminbi as an international currency for international trade, investment, and finance. This column examines the experiences of the dollar, yen, and deutschmark from the 1970s to the 1990s. As long as China’s neighbouring economies keep using the dollar for international trade and financial activities, the rise of the renminbi as a trade invoicing currency may be as fast as the rise of China itself.
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Has China reached its debt limit? – Daniel Fernández Méndez
21 juni
Half of the world´s economies (emerging and the developed) are seeing a slowdown in their economic growth. This could potentially be a sign of a new global crisis. Are we at the doorstep of a new global recession?
We have already reported in a previous article and in our reports that there exists little risk of a global recession. This time the analysis will take in account the debt accumulated by the private sector (households and businesses).
Usually, recessions stem from an economic boom marked by an enormous increase in credit extended to the private sector, however, credit extended to private sectors in the leading economies of the world has not seen recently a significant increase. This situation goes in clear contrast with that of 2007. The obvious exception is China, which sees huge growth in credit extended to the private sector.
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East Asian economies and financial globalisation in the post-crisis world – Joshua Aizenman, Hiro Ito
23 juni
In the aftermath of the Asian financial crises in the late 1990s and the early 2000s, many Asian emerging market economies started rapidly increasing their international reserve holdings. This column assesses the East Asian economies’ openness to cross-border capital flows and exchange rate arrangements over the past decades. Financial globalisation has made asset prices and interest rates in these economies more vulnerable to global movements of capital, and to US monetary policy. If China succeeds in efforts to internationalise its currency, the dynamics between the US and Asia will most likely change. For now, however, the Asian region’s international finance continues to be dollar-centric.
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Here’s What Fueled the Rally in Stocks since February – Wolf Richter
23 juni
We have another post-Financial Crisis record on our hands!
Share buybacks by S&P 500 companies during the three-month period of February through April soared 15.1% from a year ago, to $166.3 billion, according to FactSet, the highest since Q3 2007, which had set an absolute record of $178.5 billion, just as the Financial Crisis was cracking the glossy veneer of the banks.
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How Brexit would affect the EU power distribution – László Kóczy
20 juni
Much of the discussion about Brexit has focused on the UK and has ignored the another party – the European Union. This column examines how the UK leaving the EU would affect the distribution of power among the remaining member states. The larger members such as France and Germany would likely benefit directly from Brexit, at least in terms of power.
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What Does It take to Be Upper Middle Class? – Charles Hugh Smith
22 juni
What’s left unsaid is much of the upper middle class is prospering due to privileged positions that are increasingly at risk of disruption.
What does it take to be upper middle class? According to one analyst, the answer is: at least $100,000 a year for a family of three. The Growing Size and Incomes of the Upper Middle Class (Urban Institute).
The paper claims the upper middle class has grown from 12.9% of the population in 1979 to 29.4% in 2014–in essence, the shrinkage of the “middle class” is not just from households dropping down the ladder but millions of households climbing up to the upper middle class.
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IMF Warns That Inequality, Poverty, Low Productivity Growth, Falling Workforce Participation Will Drag on US Growth -Yves Smith
23juni
The IMF’s Christine Lagarde presented the results of IMF’s latest consultation with the US, in which it cut its 2016 growth forecast from 2.4% to 2.2% and endorsed the Fed’s newly cautious stance on interest rate increases. Press stories focused on her discussion of the “four headwinds” that threaten to impede US growth over the long haul: declining labor force participation, high poverty rates, rising inequality, and falling productivity growth.
What Lagarde has done is describe some of the drivers of what is already acknowledged as the “new normal” or “secular stagnation”. And to the agency’s credit, it did not treat inequality and poverty as inevitable result of technological change, which is often the excuse invoked to put a Panglossian face on an economic system that has been reengineered to favor the few at the expense of the many.
The report recommends a set of policy changes, but not surprisingly, is unwilling to flag underlying drivers, like a lack of labor bargaining power; the serious cutbacks of government investment in research and development; weak anti-trust enforcement, which allows businesses to extract economically unproductive rents; and overfinancialization, which the IMF has called out in earlier reports. Nevertheless, for an analysis from an authoritative body that does not break neoliberal china, this is still pretty stern stuff.
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*** From Investment-Grade to Bankruptcy in 4 Months: Why Ratings Agencies are Still a Joke – Wolf Richter
21 juni
The largest bankruptcy in Brazil’s history occurred on Monday when telecommunications carrier Oi SA threw in the towel. On Tuesday, it also filed for Chapter 15 bankruptcy protection in the US. A euro-denominated debt payment is coming due in less than a month, and it doesn’t have the money.
It owes creditors 65 billion reais ($19 billion). This includes 50 billion reais in bonds and bank loans, some of them denominated in foreign currencies.
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Deconstructing deindustrialisation – Andrew B. Bernard, Valerie Smeets, Frederic Warzynski
22 juni
Deindustrialisation is a major policy concern in high-income countries not only because of resulting unemployment, but also because of the long-run implications for growth. This column uses evidence from Denmark to analyse whether it is being measured in the right way. A substantial fraction of the decline in manufacturing actually reflects the changing nature of production. Service sector firms that still perform many of the value-adding activities of traditional manufacturing firms should not be overlooked by policymakers.
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Rajan on cash transfers and corruption – John H. Cochrane
22 juni
Raghu Rajan, who just announced he is stepping down as Governor of the Central Bank of India, gave a very interesting speech, that bears among other things on the question of social programs vs. cash transfers.
A big problem with government provided assistance in India is that the provision is corrupt:
Our [India’s] provision of public goods is unfortunately biased against access by the poor. In a number of states, ration shops do not supply what is due, even if one has a ration card – and too many amongst the poor do not have a ration card or a BPL card; Teachers do not show up at schools to teach; The police do not register crimes, or encroachments, especially if committed by the rich and powerful; Public hospitals are not adequately staffed and ostensibly free medicines are not available at the dispensary; …I can go on, but you know the all-too-familiar picture.
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*** Please don’t Pop my Bubble! – Charles Hugh Smith
24 juni
So ride your bubble of choice up–stocks, bonds, housing, bat guano, take your pick–but it’s best to keep your thumb on the sell button.
One person’s bubble is another person’s “fair market value.” What is clearly an outrageously overvalued asset perched at nosebleed levels of central-bank fueled speculative euphoria is to the owner an asset at “fair market value.”
But beneath the euphoric confidence that valuations can only drift higher forever and ever is the latent fear that something could stick a pin in “my bubble”– that is, whatever bubblicious asset we happen to own and treasure as a source of our financial wealth could be popped, destroying not just our financial bubble but our psychological bubble of faith in permanent manias.
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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.