Impact of US Monetary Policy on Global Economies
The US monetary policy is the Federal Reserve’s actions and communications to achieve the economic goals set by Congress. Some of those goals include maximum employment, moderate long-term interest rates, and stable prices. The US monetary policy significantly impacts the global economies mainly through the ‘global financial cycle’. Changes in the US interest rates influence ... Read more
EuroGroup – Money For Nothing And Your Debt For Free?
There’s an interesting question about “analysis” which confronts anyone who seriously wants to engage in it: do you organize your focus around what you want to happen (practical policy emphasis) or do you concentrate your efforts in detailing and outlining what you think will happen? Naturally the closer you are to having an ideological discourse ... Read more
Spain’s “Good” Deflation?
Spain’s domestic economy is booming, or so the story goes, and in no small part this boom comes thanks to the arrival of what is being termed the “good kind of deflation”, the sort everyone would like to have, a world where prices fall, real incomes rise, jobs are created, and everyone gets to live ... Read more
Eurocrisis Round Two, Blame the Germans Edition
“What strikes me, also, is the extent of intellectual confusion that remains.” – Paul Krugman, Europanic 2.0 “The problem is that Germany has continued to maintain highly competitive labor costs and run huge surpluses since the bubble burst — and that in a depressed world economy, this makes Germany a significant part of the problem.” ... Read more
Is Japan Back In Recession?
“People should seriously consider that Japan’s economy may have fallen into recession despite the weaker yen and a stock rally from the BOJ’s easing and the flexible fiscal policy by Abe’s administration,” said Maiko Noguchi, senior economist at Daiwa Securities. “Initial expectations that the economy could withstand the negative effects of a sales tax hike ... Read more
Does Abenomics Work? – The Doubts Grow
Is something in the air? Do I detect a change in consensus on the way things are going in Japan? Certainly a slew of articles have been published in the financial press over the last month questioning where the Abenomics experiment is headed for. The general conclusion seems to be that wherever it is it ... Read more
Is Growth Destined to Slow?
There’s a spirited debate raging among economists about the long-run potential for growth in the US economy. Among those who expect that the future will suffer a lesser rate of growth is Robert Gordon, an economics professor at Northwestern and a member of the Business Cycle Dating Committee at the National Bureau of Research. In ... Read more
As Demand Improves, Time to Focus More on Supply
By Olivier Blanchard The dynamics that were emerging at the time of the October 2013 World Economic Outlook are becoming more visible. Put simply, the recovery is strengthening. In our recent World Economic Outlook, we forecast world growth to be 3.6 percent this year and 3.9 percent next year, up from 3.0 percent last year. In advanced economies, we forecast ... Read more
Q3:2014 US GDP Nowcast: +2.5%
The surprisingly strong rebound in second-quarter GDP growth will suffer a substantial bout of deceleration in the third quarter, according to the Capital Spectator’s median econometric nowcast. The US economy is projected to increase 2.5% (real seasonally adjusted annual rate) in the July-through-September period, down from the 4.0% rate reported by the Bureau of Economic Analysis (BEA) ... Read more
The Italian Runaway Train
There has been lot’s of debate in the press and in academic circles over the last week or so about whether Italy’s latest contraction constitutes a triple dip recession or simply a continuation of what’s been going on over many many years. This is an interesting theoretical nicety, but in fact what is happening in ... Read more