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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A plan to save the euro – Jeffry Frieden
23 mei
For the euro area to be stable and move forward productively, substantial improvements in its operation are required. This column, part of the VoxEU Euro Area Reform debate, argues that the proposals in the recent CEPR Policy Insight are necessary if the euro area is to avoid another catastrophic crisis and that they would go a long way towards addressing the legitimate concerns of citizens in both the core and periphery of the euro area.
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Jitters – John H. Cochrane
26 mei
Or, “the beginning of the end, or the end of the beginning?” Or, “from demand to supply?”
An Op-Ed for The Hill with some extras:
The economic expansion and stock market runup have been going on for a decade, and a case of the jitters seems to be spreading. How long can this go on? Is the end around the corner?
After years of quiet, the stock market suddenly became volatile again last March. Volatility is a sign of uncertainty, and often presages a decline. Stock prices are high relative to earnings and dividends, which often precedes a fall. Short term interest rates have risen, and long term rates and short term rates are nearly the same. An inverted yield curve, when short term rates are higher than long term rates, is one of the most reliable warning signs of a recession. The unemployment rate is down to 3.9%, a level that historically has only happened at business cycle peaks — that were soon followed by troughs. House prices and credit are up too, as they were at recent peaks. Is it time to worry?
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***Saving — not Spending — Is the Engine of Economic Growth – Frank Shostak
24 mei
Most economists concur with the view that what keeps the economy going is consumption expenditure. Furthermore, it is generally held that spending, rather than individual saving, is the essential condition for production and prosperity.
Savings is seen to be detrimental to economic activity as it weakens the potential demand for goods and services.
In this framework of thinking, economic activity is depicted as a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.
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America 2018: Dicier by the Day – Charles Hugh Smith
25 mei
Scrape all this putrid excrescence off and we’re left with a non-fantasy reality: everything is getting dicier by the day.
If we look beneath the cheery chatter of the financial media and the tiresomely repetitive Russian collusion narrative (that’s unraveling as the Ministry of Propaganda’s machinations are exposed), we find that America in 2018 is dicier by the day.
The more you know about the actual functioning of critical subsystems, the keener your awareness of the system’s fragility, reliance on artifice and an unceasing flow of “free money.” Keynesian economics boils down to a very simple premise: a slowing or stagnant economy can be goosed by distributing plenty of “free money” which can be freely blown on either speculation or goods and services.
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Fiscal rules and the role of the Commission – Thomas Wieser
21 mei
The proposals on fiscal frameworks and rules in the recent CEPR Policy Insight on euro area reform showcase the multiple dimensions of the fundamental dilemmas we are confronted with in the governance of the euro area. This column, part of the VoxEU debate on Euro Area Reform, looks at the challenges to the central role of the Commission that have arisen as the rules-based fiscal framework has been severely compromised.
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Freight Costs, Volume, Demand All Surge across Trucking & Rail, Inflation Fears Heat Up – Wolf Richter
21 mei
The Transportation Boom after the Transportation Recession.
The Cass Truckload Linehaul Index, which tracks per-mile full-truckload pricing but does not include fuel and fuel surcharges – and therefore is not impacted by surging diesel prices – jumped 8.2% in April compared to a year ago, the largest year-over-year increase in the data going back to 2005:
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Problems With the Market Monetarist Approach to “Explaining” the Economy – Robert P. Murphy
21 mei
Many economists who subscribe to some version of the Phillips Curve have been puzzled by the tepid nominal wage growth in recent years, even though the official unemployment rate has collapsed and we should be in “overheating” territory at this point. (This same, falsified framework led Krugman back in 2010 to warn of impending price deflation—ending with “Japan, here we come”—though curiously, he hasn’t since apologized for using a model that gave the wrong predictions about price movements in the wake of the financial crisis.) In this context, Scott Sumner offers a much more straightforward explanation, based on his Market Monetarist framework, that attributes nominal wage growth to Fed policy, rather than any “micro” considerations. Yet as I’ll demonstrate, Sumner’s breezy explanation is seductively simple, and smuggles in a lot of his theoretical assumptions in the guise of macro tautologies.
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The Next Recession Will Be Devastatingly Non-Linear – Charles Hugh Smith
23 mei
May 23, 2018
The acceleration of non-linear consequences will surprise the brainwashed, loving-their-servitude mainstream media.
Linear correlations are intuitive: if GDP declines 2% in the next recession, and employment declines 2%, we get it: the scale and size of the decline aligns. In a linear correlation, we’d expect sales to drop by about 2%, businesses closing their doors to increase by about 2%, profits to notch down by about 2%, lending contracts by around 2% and so on.
But the effects of the next recession won’t be linear–they will be non-linear, and far more devastating than whatever modest GDP decline is registered. To paraphrase William Gibson’s insightful observation that “The future is already here — it’s just not very evenly distributed”: the recession is already here, it’s just not evenly distributed– and its effects will be enormously asymmetric.
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***Wall Street Mega-Landlords Piled into Spain’s Rental Property Boom, and Now it Hits a Wall? – Don Quijones
24 mei
Blackstone Group, Cerberus Capital and others face a problem.
Demand for rental housing in Spain may have hit a wall, so to speak, while supply remains more or less unchanged, according to a new study by the real estate agency Fotocasa: Last year, 14% of Spanish adults had rented or were looking to rent a new property; this year, this figure has slumped to 9%.
The most notable reduction occurred in the youngest age range (18-24) where the number of people who had rented a new property or were looking to rent one plunged from 29% to 15% in the space of just one year. In the 25-34 year-old demographic the demand for rental property fell from 28% to 19%.
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The ‘suprasecular’ stagnation – Paul Schmelzing
24 mei
Growth rates have been stubbornly low since the financial crisis, and many have noted that the interest rate environment has been weakening since the 1980s. This column places recent episodes in the context of longer-term economic history, going back to the 14th century. Trends over recent decades are generally in line with a long-term ‘suprasecular’ trend of declining real rates. Negative real rates could become a more frequent phenomenon, and indeed constitute a ‘new normal’.
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How Institutional Dysfunction Has Enabled Poor Economic Policy Thinking – Rob Johnson
26 mei
In a memo for the G20, INET calls for changes to the evaluation of economic research to ensure that economic theory—and policy—is more rigorous, innovative, and in service to society.
The findings in this memo, “Research Evaluation in Economic Theory and Policy: Identifying and Overcoming Institutional Dysfunctions,” will also be presented by INET at the G20 Global Solutions SummitBerlin on Tuesday, May 29.
The problem this essay addresses can be framed in terms of two quotations from Alexis de Tocqueville. The first comes from his famous speech in the French Chamber of Deputies just prior to the outbreak of the Revolution of 1848: “We are sleeping on a volcano….do you not see that the earth is beginning to tremble. The wind of revolt rises; the tempest is on the horizon.” The second is from Democracy in America: “When the past no longer illuminates the future, the spirit walks in darkness.”
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Riskiest Junk Bonds Still Blissful in La-La Land, High-Grade Bonds Bleed. Apple’s Fault? – Wolf Richter
24 mei
The Fed will keep tightening until these junk bonds buckle.
High-grade corporate bonds have had a hard time. Yields have surged as prices have fallen. The S&P bond index for AA-rated corporate bonds is down 3.2% so far this year. Losses are concentrated on bonds with maturities of 15 years and over. They’re down 7%, according to Bloomberg. As prices have declined, yields have surged, with the average AA yield now at 3.47%, up from around 2.2% in mid to late-2016:
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The Elite under Capitalism – Ludwig von Mises
[Economic Freedom and Interventionism (1980)]
A long line of eminent authors, beginning with Adam Ferguson, tried to grasp the characteristic feature that distinguishes the modern capitalistic society, the market economy, from the older systems of the arrangement of social cooperation. They distinguished between warlike nations and commercial nations, between societies of a militant structure and those of individual freedom, between the society based on status and that based on contract. The appreciation of each of the two “ideal types” was, of course, different with the various authors. But they all agreed in establishing the contrast between the two types of social cooperation as well as in the cognition that no third principle of the arrangement of social affairs is thinkable and feasible.
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Here’s How Money Is Destroying the World Through Addiction – Mike Sosteric
24 mei
In a widely cited confessional in the New York Times in 2014, former Wall Street trader Sam Polk outed himself as a recovering wealth addict.
He intimated a toxic childhood and an abusive parent (a common theme in the biographies of addicts).
He revealed the exhilaration (a well-known symptom of dopamine release) at the power that money provided him.
He admitted that he abused money like he abused alcohol and cocaine — to feel better about himself.
In the powerful throes of his deep addiction, his “fixes,” including cash bonuses, were never big enough. Like the “users” on Wall Street who fly into addiction-fueled rages, he would do anything, including bringing harm to others, to amass more cash. A typical addict, he didn’t care as long as he could have more.
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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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