In the past few weeks, Portugal and Greece have returned to the markets in moves seen in Brussels as heralding a rebound in Southern Europe. In reality, a fragile recovery has barely begun and will take years. On Sunday (4 May), Portugal’s Prime Minister Pedro Passos Coelho announced that his government will not seek a … Read more
This Great Graphic comes from Markit’s Chris Williamson. It illustrates that the German good producing sector has fallen on hard times again. The economy contracted by 0.2% in Q2. Another decline in Q3 cannot be entirely ruled out, though it may just escape with something just above stagnation. The main cause that most politicians and economists will focus on … Read more
It’s a perfect score for Germany’s economic reports so far this week—perfectly negative. In two days we’ve seen two macro updates for Europe’s biggest economy and in both cases the numbers were deeply disappointing. Yesterday we learned that new manufacturing orders suffered a substantially larger-than-expected decline in August, followed by today’s news that industrial output plunged 4% during that … Read more
Chris Mayer attended our Post Keynesian conference at UMKC last week. He published the following in Capital&Crisis, Agora Financial’s newsletter. This is republished with his permission. Chris has a knack for putting things simply and clearly. Enjoy. Understanding Modern Money By Chris Mayer “We can’t run out of money,” economist L. Randall Wray said. The … Read more
You’ve probably seen references to the work of my colleague (and former student), Pavlina Tcherneva in recent days. If not, take a gander at this: Uneven Gains: The Benefits of Economic Expansions are Increasingly Going to the Richest Americans, by Neil Irwin. The bottom 90 percent used to take home a majority of the income … Read more
A year ago (https://www.economonitor.com/thoughtsacrossatlantic/2013/09/13/to-eu-or-not-to-eu/) we analysed the real convergence during last two decades in both the 13 member states that joined the EU on or after 2004 and the EU Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). The new EU members that were relatively poor a generation ago showed more significant improvement … Read more
Reviewing the borrowing costs of European nations, a visiting intelligent alien may conclude that the European economic crisis is over and rehabilitation complete. 10-year government bond rates for Spain, Portugal, Ireland and Greece are 2.20%, 3.12%, 1.67% and 6.15% respectively. Equivalent rates for Germany, France and Italy are 0.97%, 1.31% and 2.39%. Comparable rates for … Read more
By Reza Moghadam and Ranjit Teja: As inflation has sunk in the euro area, talk of quantitative easing (QE)—and misgivings about it—have soared. Some think QE is not needed; others that it would not work; and yet others that it only creates asset bubbles and may even be “illegal.” In its latest report on the euro area, the IMF assesses … Read more
By Charles Kennedy: More than 400 shale oil and gas wells will be drilled outside of the US in 2014, most of them in China and Russia, while Europe largely sits on the sidelines of the so-called revolution, according to energy consulting firm Wood Mackenzie Ltd. The geological conditions—not to mention the public support—for a shale … Read more
Without a diplomatic solution, the sanctions against Russia will have an adverse impact on its economy, but could also push Europe to a triple-dip recession. Last March – after months of escalation in the Crimea and Eastern Ukraine – President Obama initiated sanctions against Russia in financial services, energy, defense and related materials sectors. New … Read more