The actions of credit rating agencies have come under intense scrutiny – in particular during the recent Global Financial Crisis and the current sovereign debt crises in Europe. The provision of accurate and unbiased sovereign ratings is crucial for the global economy as rating decisions affect the borrowing costs of states (e.g., Afonso et al. … Read more
Measures of ‘international competitiveness’, for example those based on broad wage, unit labour cost and price parameters are approximations only[1]. Some are more relevant than others. The purpose of this short article is to review the progress of external account adjustment and internal devaluation in Eurozone countries Unit Labour Cost Comparison Unit labour cost-based measures … Read more
In 2012, the share of the emerging economies in the rivalry for foreign direct investment (FDI) exceeded that of the advanced economies, for the first time. At the same time, the United States, through still by far the largest recipient of such inflows, has been steadily losing ground to emerging economies. The United States has … Read more
I couldn’t help but notice several misconceptions about Tuesday’s midnight’s emergency rate hike. Here is the introduction to my latest Hurriyet Daily News (HDN) column. One of those misconceptions gave the column its title. To quote directly from the column: “Some have also argued that the rate hike hurt the ruling Justice of Development Party’s … Read more
According to today’s advance estimate from the Bureau of Economic Analysis, U.S. real GDP expanded at an annual rate of 3.2 percent in the fourth quarter of 2013. That brought GDP growth for the entire year to 2.74 percent, nearly equaling the 2.77 percent of 2010, which was the strongest since the recovery began. As … Read more
I’m always shocked at the objections raised against the Job Guarantee—especially by those on the Official Left. Here is what WE propose: Let’s provide a job at a decent wage to anyone willing to work. Here’s the reaction from the crazy right: Zimbabwe! Weimar! You fiat money proponents would destroy the value of our currency. … Read more
By Lambert Strether of Corrente.Yves is traveling, so I’m manfully stepping up to the plate on a financial topic: A survey of opinion on Friday’s Emerging Markets rout. I have to say, though, that the timing is awfully weird. All the Davos Men are angsting about another 1914, and lo and behold! A crisis appears! Or … Read more
The idea of a universal basic income (UBI) has been getting a lot of attention recently, sparked in part by the Swiss decision to hold a referendum on the idea. A UBI differs from other income support policies in that it provides a cash grant, large enough to meet basic needs of living, to every … Read more
In a scenario of capital flight, the BCB must intervene also via FX reserves sales. When, in late May, the FED announced the tapering, market reaction was dramatic. Yet, when it announced, in late December, the actual plan it intends to put into effect starting this month, reactions were not as intense. The chart shows … Read more
“It was obdurate government callousness to misery that first stoked the flames of rage and frustration. With unemployment a scourge in Negro ghettoes, the government still tinkers with half-hearted measures, refuses still to become an employer of last resort. It asks the business community to solve the problems as though its past failures qualified it … Read more