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Savings and investment, being different activities carried on by different people Man återkommer ständigt till Keynes och Hayek.
Har den ekonomiska "vetenskapen" inte kommit längre?
Själv brukar jag med en dåres envishet upprepa följande ord, första gången den 5 december 2009 Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Men väljarna och därmed deras medlöpande politiker är rädda för budgetunderskott och vill hellre att villaägarna skall låna än att staten skall göra det.
Yet today, I have come around to the idea that the debt problem is so pervasive, there is only way one forward - inflate.
But anyway, in macro, most models use Rational Expectations, so let's think of "behavioral" as just meaning "non-RE".
I'm seeing macro people taking behavioral ideas more seriously.
The orthodox view is that the US can always achieve full employment by active use of fiscal and monetary policy tools.
Experience since 2000 and especially since the financial crisis suggests this may be difficult.
As I have argued elsewhere, huge current account surpluses in some countries forced deficit countries into financial excesses as an ultimately unsustainable way to maintain demand in line with potential output.
The Need for Different Classes of Macroeconomic Models This is is my third piece on dynamic stochastic general equilibrium models DSGEs Olivier Blanchard PIIE January 12, 2018 The first, a PIIE Policy Brief, was triggered by a project, led by David Vines, to assess how DSGEs had performed during the financial crisis namely, badly and how they could be improved.
That brief went nearly viral by the standards of blogs on DSGEs.
Although lots of jobs were created in the impressive recovery from the dark days of the global financial crisis, other elements of the labor market did not respond as would be expected based on historical experience.
El-Erian, Bloomberg 4 January 2018 Wage growth has remained rather anemic, even in the context of indicators of labor shortages.
In addition,at 62.
Cyclical factors, including an unbalanced macroeconomic policy stance that has relied excessively and for too long on unconventional monetary measures and madehave played a role.
Martin Sandbu, FT 4 January 2018 The main argument for a higher inflation target was put forward : a higher inflation target makes it easier to cut real inflation-adjusted rates deeper still should the economy require it.
Since then, a higher inflation target has won steadily more adherents.
Under inflation targeting, a central bank is only committed to bring inflation back to the 2-per cent rate.
In any case, I very much agree.
An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy The fiscal theory of the price level FTPLa macroeconomic doctrine that has lately been receiving considerable attention.
Koichi Hamada, Special Economic Adviser to Japanese Prime Minister Shinzo Abe, Project Syndicate, 28 December 2018 Sims explained, contrary to popular belief, aggregate demand and the price level inflation are not dictated only — or even primarily — by monetary policy.
This summer, the BoJ and then the ECB both changed their mantra from whatever it takes to less is more targeting steeper yield curves and the transmission mechanism of stimulus to the real economy, moving away from unlimited asset purchases.
To them the jump from 0.
I would start with a fundamental reappraisal of modern macroeconomic governance — from independent central banks and inflation targeting to deregulated financial markets and fiscal policy targets.
Put simply, if we, the liberal establishment, fail to do this, the populists will do it for us.
Wolfgang Münchau, FT 18 December 2018 Much of what we today think of as normal was established quite recently.
Central banks were not always independent.
Direct inflation targeting is common today, but was unknown before the 1990s.
These observations are mild compared with those of Paul Romer, chief economist of the World Bank, who has written of his profession, comparing it with string theory in physics.
Mr Romer portrays modern macroeconomics as a racket held together by people who protect their influence Era of quantitative easing is drawing to a close arguably the greatest monetary policy experiment since John Law began dabbling with fiat paper money in France Mr Mnuchin plans that would restore the status of the Treasury department as the vital driver of economic policy.
For those who can remember the pre-crisis era, it felt like a throwback to heavyweight predecessors such as Robert Rubin, Lawrence Summers and James Baker III.
Connally does not endorse the conclusions of the Warren Commission.
When asked if he believed the Warren Commission's findings he said: "Absolutely not.
I do not, for one second, believe the conclusions of the Warren Commission.
FT 4 November 2018 They are: A Bernanke global savings-glut.
A Rogoffian-Minskyite crisis of overleverage and debt overhang.
A Summers secular-stagnation chronic crisis.
DeLong points out that each leads to different policy recommendations Monetary policy in a low-rate world Some of the greatest cheerleaders for fiscal tightening a few years back are undergoing a Damascene conversion that is something to behold.
That is two percentage points below the 2007 rate, and four percentage points — some 5m missing jobs — below the 2000 peak.
In 2018 economists at the IMF rendered their verdict on these austerity programmes: they had done far more economic damage than had been initially predicted, including by the fund itself.
What had the IMF got wrong when it made its earlier, more sanguine forecasts?
It had dramatically underestimated the fiscal multiplier.
Highly Recommended We are all Keynesians now, so let's get fiscal Monetary policy is close to the limits.
And without banks creating new loans and injecting money into the broader economy, economic activity grinds to a halt.
But undue reliance on monetary policy is problematic.
Atlanta Fed's gauge of "sticky-price" inflation in the US soared to a post-Lehman peak of 3 pc The subprime crisis, the euro crisis, the China slowdown, the oil bust.
But surely these events are connected.
Milton Friedman reasserted the pre-Keynesian view of how market economies work.
Robert Skidelsky, Project Syndicate 23 Febr 2018 The global financial crisis of 2008 bears this out.
The collapse discredited the more extreme version of the optimally self-adjusting economy; but it did not restore the prestige of the Keynesian approach.
An even bigger shock to the pre-2008 orthodoxy than the collapse itself was the revelation of the corrupt power of the financial system and the extent to which post-crash governments had allowed their policies to be scripted by the bankers.
To control financial markets in the interests of full employment and social justice lies squarely in the Keynesian tradition.
Federal Reserve did the only thing it could: flood the financial system with liquidity.
The move to so-called easy money arguably saved the world from a worse fate and radically changed the economic backdrop as well as the landscape for financial markets.
As in the early 1930s, policy orthodoxy has pathological qualities.
Wolfgang Münchau, FT 7 February 2018 - Visst beror dagens problem i ekonomin i någon mån på missgrepp i slutet av 80-talet och början av 90-talet.
Men i grunden har Sverige inte hamnat i en stabiliseringspolitisk kris.
Underskottet i statsbudgeten beror djupare sett på att vi försöker överbrygga en konjunkturnedgång när det i själva verket handlar om en grundläggande strukturell förändring.
Caruana and Greenspan about stocks and shocks Martin Wolf: What might central banks do if the next recession hit while interest rates were still far below pre-2008 levels?
The Return of the Original Phillips curve?
They follow the same path that destroyed their finances in the past.
Wall Street is desperately packaging the increasing amounts of subprime slime in new derivatives of mass destruction and peddling them to clients, while shorting those same derivatives.
When home prices begin to tumble, these derivatives will self-destruct again.
What is happening today is nothing more than rearranging the deck chairs on the Titanic.
Central bankers now seem to be implicitly and perhaps even unconsciously returning to pre-monetarist views: tradeoffs between inflation and unemployment are real and can last for many years.
Martin Sandbu, FT Free Lunch, 26 August 2018 Noah Smith has picked up on the curious pattern as has Brad DeLong before him.
In short: companies can borrow at very low rates and that is also true for real inflation-adjusted borrowing costs.
Andreas Cervenka om Stephen Williamson Världsekonomins medicin sedan 2008 fungerar inte Augusti 2018 Stephen Williamson, ekonom och chef på den amerikanska centralbanken Federal Reserves filial i St Louis, har gjort en genomgång av de åtgärder som Fed bedrivit sedan finanskrisen bröt ut på allvar 2008: nollränta och massiva stödköp av olika tillgångar med hjälp av nytryckta pengar.
Stephen Williamsons slutsats är att politiken misslyckats: den har inte fått upp inflationen och bevisen för att stödköpen blåst liv i ekonomin är i bästa fall svaga.
Eftersom vi talar om den strategi som dominerat hela världsekonomin sedan finanskrisen är det här lite tråkiga nyheter.
The British government, by the way, has been in debt for more than three centuries, an era spanning the Industrial Revolution, victory over Napoleon, and more.
I know that may sound crazy.
This term, coined by philosopher Thomas Kuhn, refers to the dread moment when scientists learn that up is down, black is white and everything they thought they understood about the world is wrong.
Simply put, we live in a world in which there is too much supply and too little demand.
The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing.
Finland is mired in a recession that has lasted for much of the past three years.
Knepet är att trycka nya centralbankspengar som sedan används för att köpa statspapper.
Räntorna pressas, och en viktig effekt är att valutan tappar i värde.
Men åtgärderna är kriminellt senkomna och beslutet tas långt efter både Storbritannien och USA.
OECD understryker att ECB:s sedelpress inte kommer att räcka för att lyfta Europas ekonomier.
If investors perceived that the central bank of Italy, for example, were taking on unaffordable risks when buying Italian government bonds, at that point the price of those bonds would fall, the implicit interest rate paid by the Italian government would rise, and the whole point of QE would be blown up.
Former Federal Reserve Chairman Ben Bernanke believes history has already vindicated the novel efforts of the U.
Federal Reserve is headed down a familiar — and highly dangerous — path.
Steeped in denial of its past mistakes, the Fed is pursuing the same incremental approach that helped set the stage for the financial crisis of 2008-2009.
The consequences could be similarly catastrophic.
It is a well-deserved ascendancy.
He is brilliant, wide-ranging, readable, and the point of his rapier is very sharp.
He correctly predicted and described the Long Slump; though whether he did so entirely for the right reasons is an interesting question.
He demolished claims by hard-money totemists that zero rates and quantitative easing would lead to spiralling inflation in a global liquidity trap, as he calls it — or in a China-led world of excess supply and deficient demand, as others would put it.
So it is disconcerting to find myself on the wrong side of his biting critique.
What matters is the quantity of money.
Large scale money creation is a very powerful weapon and can always create inflation.
Under a fiat money system, a government should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.
Ultimately, economic progress depends on creativity.
One prominent argument lately has been that what is needed most is Keynesian economic stimulus — for example, deficit spending.
After all, people are most creative when they are active, not when they are unemployed.
On all four counts, Germany is wrong.
The Germans have a name for their unique economic framework: ordoliberalism.
Finanskriskommittén Riksgäldens garantiprogram för bankerna infördes 2008.
Sammanlagt ställdes bankgarantier för 354 miljarder kronor.
The lights are again flashing red on the dashboard of the world economy, David Cameron warned yesterday.
Just to extend the metaphor, the plane is flying on empty, having pretty much exhausted its fiscal and monetary reserves, and there is no sign of a safe landing strip in sight.
Jeremy Warner, Telegraph, 18 Nov 2018 The only things that seem to keep us going at all, raising us somewhat above the economic disaster zone of much of the rest of Europe, are continued very high levels of deficit spending and the parallel stimulus of ultra accommodative monetary policy.
These are the things that truly mark the UK, and the much larger US economy, out from the pack — willingness to mortgage our futures in pursuit of short-term growth, in the hope that this eventually provides the wherewithal to meet the payments on our growing debt obligations.
If everyone proceeded along these lines together, then perhaps a virtuous circle of growth — and thus declining indebtedness — might be generated.
It is the economics of the Thirties we seem to be returning to The US Federal Reserve and other western central banks have failed to anticipate this deflation environment, persistently undershoot their inflation targets and appear powerless to reverse the trend.
At some point, we will probably wonder if it is time for the anti-deflation baton to pass to governments.
George Magnus, FT December 24, 2018 The writer is a senior independent economic adviser to UBS Skriande uppenbart - Quantitative Easing Ordinarily, the role of tax and spending in smoothing economic cycles is to stand back and let monetary policy do the job.
But these are not ordinary times.
In the advanced world, weak growth and the threat of deflation have driven monetary policy towards its limit.
In such circumstances, fiscal policy has an important counter-cyclical role.
Financial Times editorial 7 November 2018 Within the rich world, the US recently exited QE3, its third bout of quantitative easing.
It might not have had to go so far had fiscal policy, expansionary immediately after the crisis, not encountered severe congressional dysfunction with fights over the debt ceiling and the fiscal cliff.
Normal times will not resume across the world economy for a while to come.
Governments need to grasp the fact that fiscal policies matter for growth and inflation in the short as well as the long run.
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Det skrev jag på min blogg första gången Gunnar Hökmark var en gång vänlig mot mig när jag på Timbro beklagade mig över att jag kände mig så ensam.
Är man först är man alltid ensam tröstade han mig med.
Ett annat lika klokt men kanske inte lika vänligt Hökmarskt bon mot var också träffsäkert "Bara för att man själv förstår något är det inte säkert att andra inte förstår det".
John Maynard Keynes Is the Economist the World Needs Now Politicians ignored Keynes in 1937.
Doing so again could tank the economy Quantitative easing may sown the seeds of the next great markets disaster those who prophesied that these trillions of dollars of debt purchases would spark uncontrollable inflation have been proved wrong.
But QE could still prove toxic.
Robert Peston, BBC Economics editor, 29 October 2018 If there has been inflation, it has been in asset prices, rather than in items of everyday consumer expenditure.
The market price of the purchased bonds has been increased.
And investors who received all those hundreds of billions of dollars from the Fed, pumped that money into shares and william hill bet calculator lucky 15 each way and even the bonds of other countries, from India to Canada.
QE probably helped prevent the Great Recession being deeper and longer.
But by inflating the price of assets beyond what could be justified by the underlying strength of the economy, it may sown the seeds of the next great markets disaster.
The better alternative is to stick the needle straight into the veins of the economy - building roads, railways or nuclear power stations.
Det är oklart varför målet är just 2 procents inflation, med hur mycket Sverige har missat målet, och hur stor skada detta eventuellt gjort för sysselsättningen.
Även om samtliga dessa frågetecken skulle rätas ut är det alltjämt tveksamt om riksbanken med sin styrränta kan göra något åt inflationen.
Andreas Bergh, kolumn SvD 3 november 2018 Riksbanken har sänkt räntan till noll.
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Carl-Johan Westholm och Jeffrey D.
Sachs: alla investeringar are not equal The Greater Depression First it was the 2007 financial crisis.
Then it became the 2008 financial crisis.
Next it was the downturn of 2008-2009.
We would not, it was believed, have to move on to the next label, which would inevitably contain the dreaded D-word.
High quality global journalism requires investment.
Normally, when an economy slips into recession, the standard response is to cut interest rates.
This encourages us to spend, rather than save, giving the economy an immediate boost.
Things become more difficult if nominal interest rates are already low.
Prof Sims, who won the Nobel Prize in 2011 for studying "cause and effect in the macroeconomy", says monetary policy cannot do the trick either once interest rates have dropped to zero.
He dismisses the monetary effects of quantitative easing as trivial.
At best, he says, QE is a bluff intended to show resolve and change psychology.
Ambrose Evans-Pritchard, August 21st, 2018 Christopher Sims — a monetary expert, who now thinks money indicators have been rendered "essentially obsolete" by modern finance — says it may be impossible to reverse deflation in the Western economies by any normal means, in which case we are in trouble.
Draghi is running out of legal ways to fix the euro The ECB should starting buying equities and junk bonds.
It should subsidise mortgages and consumer credit.
All these measures would be effective.
Most would be illegal.
This surely helped the bond market to recover, and took the heat out of the eurozone crisis.
But it was at best a partial victory because it made everybody, including the ECB itself, complacent.
OMT ended all crisis resolution.
The ECB should starting buying equities and junk bonds.
It should subsidise mortgages and consumer credit.
It could fund an investment programme in transport infrastructure, energy networks and scientific research, by buying debt to fund such projects at zero interest rates.
All these measures would be effective.
Most would be illegal.
The one thing the central bank can do without any legal problems would be to drop the silly macroeconomic model — known asafter its authors — on which it has been relying for too long.
Recovery is far from complete, and the wrong policies could still turn economic weakness into a more or less permanent depression.
Paul Krugman, New York Times 14 August 2018 European officials eagerly embraced now-discredited doctrines that allegedly justified fiscal austerity even in depressed economies And the European Central Bank, or E.
We academic economists knew what to do do deal with the financial crisis that started in 2007 and to quickly restore normal levels of output relative to potential and of potential output growth.
But even though we knew what to do, we were not allowed to speak with one voice.
Brad DeLong, July 28, 2018 It was a not to do what Japan did in the 1990s, and b take the advice of a long line of policy-oriented economists starting from the Say-Malthus debate of the 1810s and 1820s which Malthus won and continuing through Mill, Bagehot, Wicksell, Keynes, Minsky, Kindleberger, Tobin, and many many others But even though we knew what to do, we were not allowed to speak with one voice.
Other academic economists — including many whom I formerly counted as of note and reputation — elbowed their way into the debate.
They had either never bothered to learn the literature from Malthus to Tobin, had forgotten it, or were blinded by ideology.
Why is this prophet so lonely?
And where are the bond vigilantes?
For decades, economic growth in America was driven by a powerful and sustainable force: increased consumption paid for by the rising incomes for middle-class and working-class Americans.
But somewhere around 1980, that model broke down.
I admire the Bank for International Settlements.
Yet this is what it has done, most recently in its latest annual report.
Or to hold back on quick fixes for output slowdowns, even if such measures threaten to add fuel to unsustainable financial booms.
Or to address balance sheet problems head-on during a bust when seemingly easier policies are on offer.
In its annual report, Bank for International Settlements BIS spelled out the risks of relying too heavily on monetary policy to stimulate the economy.
BIS warned that central banks including the Bank of England and US Federal Reserve could keep monetary policy loose for too long, with potentially damaging consequences.
Conventional wisdom has it natural interest rates have fallen With debt in the developed world standing at higher levels than before the financial crisis, one of the more disturbing threats to financial stability is an unexpectedly sharp rise in global interest rates.
The International Monetary Fund pointed out this month that housing can do a lot of damage.
An increase in prices provides an initial spur to the wider economy: construction activity is boosted and homeowners grow richer.
But as a boom continues, leverage grows and price rises become unsustainable.
The bursting of a bubble devastates bank balance sheets and leaves behind an economy that must painfully reallocate productive resources from a bloated construction industry to other sectors.
Jag är inte ensam - I argued in 2003 that the housing market was becoming dangerously over-valued and that at some point average click at this page would fall by about 20pc.
I made my prediction too early.
One of the more important insights about the state of the European economy In their magnificent book House of Debt, Atif Mian and Amir Sufi find that what is outwardly disguised as a credit crunch is in reality a fall in demand for loans.
Their analysis lends credence to the idea of a balance sheet recession När Carl Bildt och Göran Persson styrde Sverige Claudio Borio, the BIS's chief economist, says this refusal to let the business cycle run its course and to purge bad debts is corrosive.
It steals growth and prosperity from the future, and pulls the interest rate structure far below its Wicksellian natural rate.
US vs UK median real wage growth since 1988 Accelratorn - Varför är den bortglömd?
Det var Basics, vill jag minnas.
Why, at the moment it was most needed and could have done the most good, did economics fail?
Only the ignorant live in fear of hyperinflation Failure to understand the monetary system has made it more difficult for central banks to act Martin Wolf, FT April 10, 2018 Fortunately the Bank of England is providing much needed education.
So here are seven fundamental points about how it really works as opposed to how people think it does.
The act of saving does not increase deposits in banks.
If your employer pays you, the deposit merely shifts from its account to yours.
This does not affect the quantity of money; additional money is instead a byproduct of lending.
What makes banks special is that their liabilities are money — a universally acceptable IOU.
In the UK, 97 per cent of broad money consists of bank deposits mostly created by such bank lending.
But when customers repay, it is torn up.
Understanding the monetary system is essential.
One reason is that it would eliminate unjustified fears of hyperinflation.
That might occur if the central bank created too much money.
But in recent years the growth of money held by the public has been too slow not too fast.
His presentation at the IMF Research Conference is, justifiably, getting a lot of attention.
The St Louis Federal Reserve — the last bastion of monetary orthodoxy in the Fed family — has just published a paper that basically deems quantitative easing to be useless.
John Maynard Keynes was right all along.
This is well explained in a recent paper by the Bank of England, which points out that money in the modern economy is largely created by commercial banks making loans.
It is a common misconception to think that banks only lend what they can borrow from depositors.
Ambrose Evans-Pritchard, 11 March 2018 Britain has just carried out one of the greatest victimless crimes in modern financial history.
It is in effect wiping out public debt worth 20pc to 25pc of GDP — on the sly — without inflicting serious macroeconomic damage or frightening global bond markets.
Even now, housing has only partly recovered, while consumers are still held back by the huge debts they ran up during the bubble years.
And the stimulus was both too small and too short-lived to overcome that dire legacy.
Even more importan, is the huge natural experiment Europe has provided on the effects of sharp changes in government spending.
Would they tell us if they thought we were heading for a new recession?
Rex Nutting, MarketWatch, Feb.
Most of them thought the recession would be shallow and brief.
Most of them thought the Fed would begin raising interest rates very quickly once the storm passed.
Laughing all the way to an economic crash How the central bank coped with a crisis US GDP at the end of 2018 was 86.
That's actually 3 points below where it was when the recession ended.
I said that, without hedging, and ridiculed the fashionable case for austerity.
But what was radical, if you like, was my style, not my content.
Consider what happened in 1936.
You can argue that Mr.
Investors have long assumed that a corporate spending revival will nurture a building economic recovery.
CNBC, 22 January 2018 Davos One of the big stories here is that despite returning growth, business investment of the type that drives innovation, productivity gain and income growth is still as dead as a dodo.
So there is definitely something of a problem.
Jeremy Warner, Telegraph, 23 Jan 2018 The issue really comes down to whether you think it a supply-side issue, or simply one of absent demand.
Unconventional monetary policy, he argued, was no match for the problem, and in any case ran the risk of creating asset bubbles and renewed financial instability.
He also expressed grave concerns about the distributional consequences of sustained periods of negative real interest rates.
Rolf Englund blog 5 december 2009: - Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
Men väljarna och därmed deras medlöpande politiker är rädda för budgetunderskott och vill hellre att villaägarna skall låna än att staten skall göra det.
Strategin synes vara att det gäller att stabilisera, helst höja, villapriserna så att konsumenterna främst i USA skall återgå till att konsumera med lånta pengar, dvs just det som ledde fram till katastrofen.
Many are convinced that the US is a victim of secular economic stagnation and that its power and influence are waning inexorably as a result.
It is politically dysfunctional, its political class has been bought by Wall Street bankers with an efficiency and cynicism not seen since Cosimo de Medici bought up the 15th century papacy.
John Plender, Financial Times 7 January 2018 Can Policy Boost Growth?
Some economic experts have suggested that US may be in a period of secular stagnation, or protracted slow growth, similar to what followe Depression.
They propose further monetary and fiscal stimulus, but those have proven to provide only a temporary boost for short-term growth.
Makin, American Enterprise Institute, 6 January 2018 Traditional macro policy also will not boost long-term growht.
While improving long-term growth is difficult, the best places to begin are with advances in a tax reform, deregulation, and freer trade.
These structural measures, along with efforts to re high levels of policy uncertainty, might help boost sustainable, long-term economic growth.
Vi tackar P för länken Secular stagnation Since the start of this century, annual US gross domestic product growth has averaged less than 1.
And all this is in the face of negative real interest rates for terms of more than five years and extraordinarily easy monetary policy.
A long time ago, the debate between monetarists and Keynesians was the debate in macro.
But it was a rather limited debate: both sides generally used the same model IS-LMand so it was all about parameter values.
More recently, but before the recession, that debate had largely gone away, but since then it seems to have come back.
This post asks why that is.
Om bostadspriserna i Sverige börjar falla leder det till att konsumtionen går ner.
Det slår också mot sysselsättningen.
Detta mardrömscenario har inträffat i andra länder och då fört med sig en långvarig recession med hög arbetslöshet.
Sverige tillhör de relativt fåtaliga som hittills har klarat sig, trots att skuldsättningen är högt uppdriven även här.
Enligt riksbankschefen ger detta dock inget skydd mot kommande bakslag, som i värsta fall också kan leda till en ny finanskris.
De svenska bankerna har tillgångar som motsvarar fyra gånger Sveriges hela BNP.
De har haft sina problem.
Och under oss har vi Storbritannien, Danmark och Spanien och de har haft sina problem — Samtidigt vet vi att mer än hälften av bankernas finansiering sker utomlands och det betyder att man där kan ha synpunkter på vår bolånemarknad.
I slutändan är det de utländska placerarnas syn på oss som är avgörande.
Basic economics said that austerity in an already depressed economy would deepen the depression.
Political scientists tell us that voters are myopic närsyntathat they judge leaders based on economic growth in the year or so before an election, not on overall performance in office.
So a government can preside over years of depression, yet win re-election if it can engineer an uptick late in the game.
The answer to the first question is the global financial crisis.
Martin Wolf, Financial Times 19 December 2018 The panic led to sharp declines in financial sector profits, financial intermediation and economic activity.
The fiscal deterioration was then the result of these declines.
The present value of lost output would be close to five times annual GDP.
The Hubble bubble theory of the continuous expansion of the financial universe All of which is a whimsical way of suggesting that perhaps Larry Summers has a point.
Conservatives and the cult of home-ownership Promoting house-buying is a form of stimulus that does not overtly add to the fiscal deficit The U.
Treasury yield curve has lost its forecasting power An ideal leading indicator would exclude components such as the yield curve that behave perversely during times of financial stress, said Morgan Stanley economist Ellen Zentner.
She suggested investors look at the Duncan Leading Indicator, devised in 1977 by Wallace Duncan, then of the Federal Reserve Bank of Dallas.
Secular stagnation Since the start of this century, annual US gross domestic product growth has averaged less than 1.
And all this is in the face of negative real interest rates for terms of more than five years and extraordinarily easy monetary policy.
Larry Summers has argued that the short-term real interest rate consistent with full employment fell to minus 2 or 3 per cent sometime in the middle of the last decade.
This was due to an ex-ante global saving glut, possibly reinforced by a weakening in ex-ante investment demand.
Because currency has a riskless zero nominal interest rate, nominal interest rates on other financial instruments cannot fall much below zero.
The resulting unemployment is self-perpetuating.
Why stagnation might prove to be the new normal In the past decade, before the crisis, bubbles and loose credit were only sufficient to drive moderate growth Lawrence Summers, December 15, 2018 Is it possible that the US and other major global economies might not return to full employment and strong growth without the help of unconventional policy support?
The implication of these thoughts is that the presumption that normal economic and policy conditions will return at some point cannot be maintained.
Even if the economy accelerates next year, this provides no assurance that it is capable of sustained growth at.
Darrell Delamaide, MarketWatch, 20 November 2018 The hallmarks of this situation are deflation and underinvestment, which means monetary authorities will be forced to keep interest rates at zero.
Unemployment tends to rise when GDP growth falls below about 2.
Han känner att han inte kommer fram, drar gasen - räntan - i botten, men motorn, penningmängden, svarar inte.
Grant drar också en mycket tänkvärd parallell mellan England och USA på 1920-talet och Japan och USA på 1980- och 90-talen.
England hade 1925 under finansminister Churchill återgått till guldmyntfonten på en då orealistisk växelkurs den som rådde före första världskriget.
Bank of England förmådde USA att sänka räntan mot slutet av 1920-talet.
Detta ledde till att aktiespekulanterna fick ny kraft inför 1929.
I mitten på 1980-talet var det USA som på hotellet Plaza ägt av Donald Trump fick japanerna att sänka sin ränta, vilket ledde till den japanska bubbla som nu spricker och hotar hela världsekonomin.
Maybe we face an age of secular stagnation, in which the zero lower bound is normal.
Permanent fiscal stimulus may be necessary to maintain demand.
Suppose, as Summers asks us to imagine, that the U.
Instead, he sketched out a disturbing future of chronically weak demand and slow economic growth.
But his was a bravura performance.
I anledning av Summers Det kanske är så att utan bubblor och snabb kreditexpansion skulle vi inte haft de tillväxttal vi kommit att vänja oss vid.
Det tycks finnas en underliggande och långsiktig stagnation som dolts av excesserna de senaste två decennierna.
Larry Summers, Paul Krugman, Gavyn Davies Utan bubblor kollapsar ekonomin Andreas Cervenka, SvD Näringsliv 19 november 2018 Enda sättet att få någon som helst fart på ekonomin verkar alltså vara att blåsa upp nya bubblor, vilket ser ut att vara vad Federal Reserve och andra kanske gör just nu, i alla fall att döma av utvecklingen på världens börser och kreditmarknader.
Ett sätt att sammanfatta Larry Summers tal är just detta: utan bubblor kollapsar ekonomin.
Han konstaterar till och med allt som görs i syfte att förhindra en ny kris, som tillexempel bankregleringar för att hindra ansvarslös utlåning, blir kontraproduktivt.
Slutsats: enda sättet att hålla igång hjulen är att låta Wall Street löpa amok!
Men väljarna och därmed deras medlöpande politiker är rädda för budgetunderskott och vill hellre att villaägarna skall låna än att staten skall göra det.
Strategin synes vara att det gäller att stabilisera, helst höja, villapriserna så att konsumenterna främst i USA skall återgå till att konsumera med lånta pengar, dvs just det som ledde fram till katastrofen.
Detta kan inte vara klokt.
Their government should, too".
Growth rates have remained stubbornly low and unemployment rates unacceptably high, partly because the increase in money supply following QE has not led to credit creation to finance private consumption or investment.
Not that long ago, macroeconomists were congratulating central bankers and central bankers were, of course, congratulating themselves over doing a pretty good job of getting this right.
Inflation, occasional commodity shocks aside, was indeed low and stable, and from 1985 to 2007 the real economy was fairly stable too.
Then came catastrophe — and as so often happens, when the house collapses you find the skeletons that were lurking in the closet all along.
The stability of prices and output masked an underlying unsustainable growth in leverage Paul Krugman, New York Times blog, September 25, 2018 Since the US economy shows no signs of having been overheated on average from 1985 to 2007, the argument that the Fed should nonetheless have set higher rates is an argument that the Fed should have kept the real economy persistently depressed, and unemployment persistently high.
This would guard against bubbles and excessive leverage, while leaving monetary policy free to pursue conventional goals.
This is not a new fear: worries about secular stagnation, about a persistent shortfall of demand even at low interest rates, were very widespread just after World War II.
At the time, those fears proved unfounded.
Broadly speaking, for possibly longer and for at least 115 years - since the publication of Swedish economist Knut Wicksell's Geldzins and Guterpreis - economists have divided into two camps with respect to what a central bank like the Federal Reserve system really is.
The lessons from Sweden Lennart Erixon, Department of Economics, Stockholm University, September 4, 2018 The main conclusion in this article is that the fiscal austerity measures in the mid-1990s delayed the Swedish economic recovery and that neither these measures nor the fiscal rules were responsible for the impressive Swedish macroeconomic performance in the following period.
A small open economy like Sweden in the 1990s may well be able to tighten its way back to vitality in a the middle of a global boom, but if half Europe does so in unison in a slump, it will inflict carnage.
Broadly speaking, for possibly longer and for at least 115 years - since the publication of Swedish economist Knut Wicksell's Geldzins and Guterpreis - economists have divided into two camps with respect to what a central bank like the Federal Reserve system really is.
One camp, call it the Banking Camp, sees a central bank as a bank for bankers Brad DeLong, August 31, 2018 Because people make exceptionally large mistakes, orthodox neoclassical economics does not work very well.
A more helpful guide is the Swedish-Austrian theory of the business cycle, developed by Knut Wicksell, the Swedish economist, and Friedrich Hayek, the Austrian, in the 1920s and 1930s.
During such periods, they argued, the real interest rate is too low and monetary policy too loose, given the over-optimistic view of prospective returns on capital.
Are zero interest rates a subsidy to banks?
Back and forth between Leijonhufvud and Krugman Axel Leijonhufvud: The two pioneers of modern monetary economics — Irving Fisher and Knut Wicksell.
Economics employs partial differential equations like those in a Black-Scholes account of derivatives markets, equations that look remarkably like ones familiar from physics.
Alex Rosenberg and Tyler Curtain, New York Times, August 24, 2018 Alex Rosenberg is the R.
Taylor Cole Professor of Philosophy and chair of the philosophy department at Duke University.
He was recently named the 2018 recipient of the Robert Frost Distinguished Chair of Literature at the Bread Loaf School of English, Middlebury College, Vt.
Economics may be dismal, but it is not a science The failures of economics in the recent crisis are most evident in two areas: the inadequacies of the efficient market hypothesis, the bedrock of modern financial economics, and the irrelevance of recent macroeconomic theory.
That 1999 Time magazine cover is finally catching up with Lawrence Summers.
The cult of home ownership is dangerous and damaging You would think that the residential property bubble and subsequent crisis of the past decade would make people leery of widespread home ownership, and governments reluctant to pump it up.
Yet, here we are again Three more years of zero interest rates Whether it's in the long term interests of the economy is another matter.
Savers are again punished, and the profligate rewarded.
Raghuram Rajan, Project Syndicate, June.
A new way of thinking has recently taken hold in the German capital Wolfgang Schäuble sounded almost like a new convert extolling the wonders of heaven as he raved about his latest conclusions on the subject of saving the euro.
On Monday 13th May, I participated in a debate on austerity organised by the New York Review of Books, held in the Sheldonian Theatre, Oxford.
Those arguing in defence of austerity were Meghnad Lord Desai and Sir John Redwood MP.
On my side was Lord Robert Skidelsky.
Here is the speech I presented: Austerity has failed.
It has failed in the UK and it has failed in the eurozone.
Its failure was predictable and, by some at least, predicted.
Martin Wolf, May 23, 2018 Fed History Shows Punch Bowl Goes as Jobs Rise An improving labor market rather than accelerating inflation made the Federal Reserve decide to end its last three episodes of easy monetary policy.
How the Case for Austerity Has Crumbled Volcker helped cut the unemployment rate to an eight-year low of 5.
Från arkivet Kaletsky i Kapitalism 4.
USA:s tidigare centralbankschef Paul Volcker är mest känd för att ha blivit tillsatt av Ronald Reagan för att få ner inflationen, vilket lyckades genom en hård åtramning med recession som följd.
Det ryktet kvarlever med märklig kraft.
Men Kaletsky menar att det var Paul Volcker som ledde återgången till "demand management".
Där återfinns längst nere i hörnet, alldeles i början på det diagram som stiger mot höjderna över hela nästa sidan, ett datum.
Det datum som där angavs som utgångspunkt för uppgången på börsen var den 12 augusti 1982.
Vad var det då, frågar man sig, som hände fredagen den 13 augusti, som satte fart på världens aktiebörser.
Jo, det som hände den dagen var att Mexiko förklarade att man inte längre kunde betala sin utlandsskulder.
Paniken stod på lur, sammanbrott hotade västvärldens banksystem.
Den amerikanske centralbankschefen Paul Volcker agerade snabbt, fixade fram några kortfristiga miljarder dollar från kontot för stratgisk lagring av olja och betalade Mexiko i förskott för framtida oljeleveranser.
Men han gjorde inte bara det.
Han satte också högsta fart på de amerikanska sedelpressarna.
And believe me, it will be enough.
Rightly or wrongly, markets concluded that the risk of an outright default on Spanish bonds had largely disappeared.
At this point the economic case for austerity — for slashing government spending even in the face of a weak economy — has collapsed.
Ending stimulus has never been a problem — in fact, the historical record shows that it almost always ends too soon.
Paul Krugman, May 7, 2018 finds making some easily refuted claims about the nature of the stimulus debate in the winter of 2008-2009, and my role in particular.
It isn't a compliment.
The Fed wants interest rates to be below the rate of inflation to give homeowners and businesses a strong incentive to borrow and spend, generating jobs.
Stiglitz, Project Syndicate 25 April 2018 Joseph E.
Deflation increases the real inflation-adjusted debt burden, as well as the real interest rate.
Though there is little evidence of the importance of small changes in real interest rates, the effect of even mild deflation on real debt, year after year, can be significant.
Roach, Project Syndicate 25 April 2018 Stephen S.
The reason is not hard to fathom.
That leaves a huge sum of excess liquidity sloshing around in global asset markets.
Where it goes, the next crisis is inevitably doomed to follow.
Another surprise is that the mistakes, by two eminent Harvard professors, were spotted by a student doing his homework.
His professors at the University of Massachusetts Amherst had set his graduate class an assignment - pick an economics paper and see if you can replicate the results.
It's a good exercise for aspiring researchers.
No matter how he tried, he just couldn't replicate Reinhart and Rogoff's results.
Harvard economists, Carmen Reinhart and Kenneth Rogoff Did an Excel coding error destroy the economies of the Western world?
First, they omitted some data; second, they used unusual and highly questionable statistical procedures German Foreign Minister Guido Westerwelle maintained Germany's position, warning against a move away from austerity.
Although this policy is "fundamentally right," it has nevertheless "reached its limits," he told a conference in Brussels.
The greater conceptual error was to conflate correlation and cause This was the paper seized upon by Tea Party Republicans, scorched-earth Schaublerians and Rehnites in Europe, our own dear Chancellor George Osborne, and Austro-liquidationists the world over, to back calls for draconian, pro-cyclical, fiscal tightening.
Central bankers say they are flying blind Growing concern at IMF over the long-term side-effects of interest rates close to zero Some of the leading figures in central banking conceded they were flying blind when steering their economies.
It is troubling for monetary policy experts that their crisis-fighting tools — rates stuck at zero, money printing operations to bring down longer-term interest rates and encourage private sector spending, and efforts to calm financial market fears — might have nasty side-effects.
The central bankers were clear that they had got it wrong before the crisis, allowing themselves to be lulled, by stable inflation, into thinking they had eliminated financial vulnerabilities.
Lorenzo Bini Smaghi satt i högsta ledningen för ECB mellan juni 2005 och november 2011 Centralbankerna har en tendens att hela tiden fortsätta stimulera ekonomin med billiga pengar lite för länge.
Om fastighetsbubblor, Anders Borg, Irving Fisher och Cornucopia Nice charts It is weird that inflation has remained so stable, despite huge shortfalls in output, relative to pre-crisis trends, and prolonged high unemployment.
Understanding why this is the case is important because the answer determines the correct policy action.
Rosy Scenario Note the graph below.
CBO forecasters assume that GDP will recover back to its former trend line, instead of simply growing from a lower base; and that is where they get their obscenely rosy 4 % increases.
John Mauldin, 13 April 2018 What happens if we land in a recession instead?
Not only do we not get back to that trend, we drift farther from it!
Will the CBO then project 5% GDP growth for three years running to get us back to the original trend?
That would be no more absurd than what they are doing now.
The reality is that no politician or government agency can forecast a recession.
None of us really know when the next recession will happen.
Theoretically, we could go another 10 years without one.
It is also possible that the government will reveal that there really are aliens in Area 51.
Lew, to persuade Europe to consider shifting its focus from budget balance to growth highlighted a deep trans-Atlantic policy gulf "RECONSTRUCTING MACROECONOMICS" LSE: What should economists and policymakers learn from the financial crisis?
Obama did what people in Washington do when they want to sound serious: he spoke, more or less in the abstract, of the need to make hard choices and stand up to special interests.
Key to the debate is rethinking a number called the fiscal multiplier, a gauge of how much growth can be generated for each dollar spent by the government.
DeLong and Summers argue that, with short-term interest rates near zero, the multiplier right now is at its most powerful.
Well, here's another in a similar vein she might like to ask when she next returns to matters financial.
En snabb minskning av hushållens skulder skulle slå hårt mot konsumtionen och är inte önskvärd.
Det säger finansminister Anders Borg och spår att bostadsmarknaden kommer att befinna sig i stagnation de kommande 10-20 åren.
Anders Borg säger att hushållens skuldsättning är bekymmersam och att en eventuell lånebubbla skulle bli kostsam och leda till en långvarig lågkonjunktur som skulle riskera att slå ut de vanliga ekonomisk-politiska instrumenten.
Kommentar av Rolf Englund: En tolkning av Anders Borgs uttalande om att bostadsmarknaden kommer att befinna sig i stagnation de kommande 10-20 åren är att han anser att bopriserna nu har nått en platå.
Dessvärre brukar bubblor se ut som den amerikanska bostadsbubblan En annan stor ekonom, Irving Fisher har också talat om en plateau: In October 1929, Professor Irving Fisher of Yale University, a great guru of the markets, earned immortality with the pronouncement: "stock prices have reached what looks like a permanently high plateau.
They spent the money on cars, televisions, vacations and fancy home upgrades.
It was seemingly endless equity, until suddenly that equity was gone.
John Maynard Keynes proposed burying money in disused coal mines to be dug up by unemployed workers, while Milton Friedman suggested dropping money out of helicopters for citizens to pick up.
Stephanie Flanders, BBC Economics editor, 12 October 2012 Let the helicopters start to drop money.
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
BIS effective exchange rate indices Today we live in a world of fiat money and mostly floating rates.
The last vestige of the gold standard was swept away in August 1971, when Richard Nixon suspended the convertibility of the dollar into gold.
For one country to accuse another of waging a currency war in 2018 is therefore absurd.
It dutifully lists the sorts of things that can be done to help: But then goes on to finger a "demand shock" as the real culprit.
All else is "less relevant".
Today, the US private sector is saving a staggering 8 per cent of gross domestic product — at zero interest rates, when households and businesses would ordinarily be borrowing and spending money.
But the US is not alone: in Ireland and Japan, the private sector is saving 9 per cent of GDP; in Spain it is saving 7 per cent of GDP; and in the UK, 5 per cent.
Interest rates are at record lows in all these countries.
Vi lever med våra etablerade sanningar Det är antaganden som sällan eller aldrig ifrågasätts, därför att vi intalar oss att de måste vara korrekta En sådan så kallad sanning är att Japan fullständigt misslyckats med hanteringen av sin finanskris som bröt ut kring 1990 Japan For three years economic policy throughout the advanced world has been paralyzed, despite high unemployment, by a dismal orthodoxy.
Every suggestion of action to create jobs has been shot down with warnings of dire consequences.
If we spend more, the Very Serious People say, the bond markets will punish us.
If we print more money, inflation will soar.
Nothing should be done because nothing can be done, except ever harsher austerity, which will someday, somehow, be rewarded.
We have, after all, done even worse.
That is, the problem is mainly political and intellectual, rather than strictly economic.
For the risks of action are much smaller than the Very Serious People want you to believe.
Consider, in particular, the alleged dangers of debt and deficits.
Suddenly it is game on in Tokyo — and the world is watching.
For the past 15 years Japan has been trying to shrink its way out of its problems.
That did not work.
Now it is about to try the opposite approach.
Now Japan could become another kind of example.
If the pedal-to-the-metal reflationary policies of Shinzo Abe, the recently elected prime minister, succeed, there will be a profound impact on post-crisis policy making everywhere.
De uppdrivna priserna kollapsade — i Japan föll värdet på kommersiella fastig­heter med 87 procent — samtidigt som den privata sektorn gick från att låna pengar till att börja spara och amortera i stor skala.
En liknande typ av kris har de senaste åren inträffat i länder som USA, Storbritannien, Spanien och Irland.
I dag jublas det bland många högbelånade innerstadsbor när räntan sänktes ytterligare ett steg till 1 procent.
I glädjeyran kan det vara värt att påminna om att vi har en ränta och räntebana som indikerar att vi går mot en djup lågkonjunktur.
Sverige har enligt officiell statistik både högre arbetslöshet och styrränta än USA.
Hur ska man då se på hushållens höga skulder?
Är det inte legitimt att oroa sig för dem?
DN-ledare 19 december 2012 Det är något fel med den ekonomiska debatten i Sverige just nu.
För ett par år sedan trodde Riksbanken och regeringen att det värsta var över.
Finanskrisen hade ebbat ut och svensk ekonomi återhämtat sig så till den grad att utländska bedömare talade om Pippi Långstrump-tillväxt.
Den svenska ekonomin är sammanvävd med den europeiska.
När eurokrisen fördjupas slår det hårt mot Sverige, eftersom merparten av exporten går till andra EU-länder.
Hur ska man då se på hushållens höga skulder?
Är det inte legitimt att oroa sig för dem?
Att värna om finansiell stabilitet är en av Riksbankens uppgifter.
Men det kräver en mer sammanhängande analys än vad som hittills presenterats och det är långtifrån säkert att just räntepolitiken är det mest effektiva medlet för att minska riskerna.
Dessutom var argumentet mer giltigt de år bostadspriserna och krediterna ökade.
Nu är det verkliga orosmolnet i svensk ekonomi den stigande arbetslösheten.
Stigande huspriser och skulder är Sveriges största bekymmer just nu Targeting the level of nominal gross domestic product - NGDP A quiet revolution is sweeping over central banks.
The past five years have led central banks to a revolutionary situation.
Fed said it would keep interest rates close to zero until the US unemployment rate falls below 6.
For a central bank, let alone the Fed, to tie rates to the economy in this way was without precedent.
The Teuto-Calvinists believe that the fiscal multiplier is around 0.
This disastrous error is now clear beyond any reasonable doubt.
Ambrose Evans-Pritchard, 3 October 2012 The Teuto-Calvinists believe — or profess to believe, since much of their dogma is national self-interest dressed up as theory — that the fiscal multiplier is around 0.
That is to say, fiscal retrenchment worth 1pc of GDP will cut output by half as much, william hill bet calculator lucky 15 each way around 0.
There is pain, william hill bet calculator lucky 15 each way at least there is gain.
This is based on the IMF's analysis of fiscal crises over the decades.
Well, it has not worked out like that.
Ireland has contracted at nearly seven times the speed, Spain four times, and Greece three times.
The multiplier is nearer 2.
So what went wrong?
It is blindingly obvious.
Greece, Spain and Italy cannot devalue.
Most of Europe is tightening fiscal policy in lockstep.
They are all dragging each other down.
It is synchronised policy suicide.
Budgetbalans är inte det yttersta tecknet på ett lands välmående.
Socialdemokraterna borde välkomna Anders Borgs omsvängning i stället för att låta som finansministern gjorde förr.
Peter Wolodarski, signerat DN 23 september 2012 Finansministern kan tänka taktiskt och låta statens utgifter växa därför att valet 2018 närmar sig.
Inte heller kan man utesluta att finansministern faktiskt ändrat uppfattning.
Kritiken mot regeringens sparnit har varit hård, särskilt från ekonomer men också från de egna alliansleden.
Vilken förklaring som är giltig vet jag inte; Borgs överoptimistiska prognoser i finansplanen visar att hans uppsåt kan ifrågasättas.
It's hard to think of a British man born in the 1880s whose name you hear more often, in current debates, than John Maynard Keynes.
I've made a TV series, with help from the Open University, about three economic thinkers from the past who have something interesting to tell us about the financial crisis and how to get past it: Friedrich Hayek, Karl Marx and, tonight, Keynes.
Detta är första svaret hos Google när man söker Rolf Engund Martin Wolf och Rolf Englund om att den som har en sedelpress går inte i konkurs.
Det inlägget har tydligen väckt intresse på nätet.
Men jag kan väl inte ha varit den förste att påpeka detta uppenbara faktum, och därigenom visa de på ett grundläggande och ofrånkomligt konstruktionsfel i den gemensamma valutan, euron?
Rolf Englund 27 July 2012daterad den 7 november, lustigt nog samma dag som jag lagt utefter att inte ha fått in det i Financial Times.
Jag letar vidare på nätet och finner Is the United States in danger of bankruptcy?
The US Treasury will never run out of dollars.
The reason is relatively simple.
The US government owns a printing press.
Men förmodligen ingår det i varje elementär lärobok i nationalekonomi, väl?
The fact that it has expanded at barely more than a 2 per cent pace — the weakest recovery ever — speaks to the secular headwinds from debt-burdened households, structural unemployment and retrenchment at state and local government level.
David Rosenberg, Financial Times, 1 August 2012 Unfortunately, people are regularly fooled by rising asset prices, particularly rising house prices, into borrowing more than they should.
In making such mistakes, they will always be encouraged by the foolish, the ill-informed and, above all, the self-interested.
Now consider what happens when the asset prices start to fall.
It has already begun.
Bernanke was not paying full attention because he disdains the quantity of money theory of Milton Friedman and countless others before him - including Keynes - as hocus pocus.
Yet the moneratists were right.
They saw the steam engine coming straight down the tracks.
I have no doubt that this would bring about a full recovery very fast if conducted with enough panache, but is it possible to marshal political consent for such revolutionary action?
The Tea Party Congress, like Europe's bourgeousie, would rather wallow in liquidation, Puritan cleansing, and mass default than tolerate the possibility of a solution.
On the other hand, there is people who argue that As every effort to re-inflate and perpetuate the credit bubble is made, the words of Austrian economist Ludwig Von Mises lurk ominously nearby: Peak Prosperity, 10 July 2012 There is no means of avoiding the final collapse of a boom brought about by credit expansion.
The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system 10y TIPS David Glasner is unhappy with Allan Meltzer, who wrote an absurd op-ed in the WSJ in which Meltzer, among other things, just makes stuff up — claiming that markets are signaling fear of inflation when they are in fact doing no such thing.
Failed Keynesianism caused the economic crisis Tim Worstall, Telegraph June 29th, 2012 - they are trying to get economists to sign up to their version of what went wrong with the world economy and what we should do about it.
I can't sign it as I'm not an economist.
But even if I were, I wouldn't — because they've made a very bad error in the analysis of the basic cause of the crisis.
Leave entirely aside their advice on what should be done now; I'd argue that what went wrong is the perfect proof of why Keynesian demand management of the economy will never work Det finns vissa likheter mellan Europas eurokris idag och den process som ledde fram till den stora depressionen i början av 1930-talet i USA.
Både eurozonen och USA hade bundit sin valuta på ett sätt som initialt gjorde det omöjligt att vidta kraftfulla motåtgärder mot den begynnande krisen.
Danne Nordling 11 juni 2012 Chefredaktören för Dagens Nyheter, Peter Wolodarski, där han jämförde vissa drag i USA i början av 30-talet med dagens kris i Europa.
Den osunda konsumtionen under 20-talet skulle bestraffas med fattigdom som skulle lära folk att leva ett mera moraliskt liv.
Krisen var helt enkelt ett nödvändigt "reningsbad" som andra senare kallat svåra konjunkturnedgångar.
Därför var det fel, mest av moralistiska skäl, att vidta motåtgärder.
Genom att tredubbla olika inkomstskatter 1934-38 lyckades Roosevelt också uppnå budgetbalans.
Detta skedde dock till priset av en ny, Det är senare keynesiansk mytbildning som skapat bilden av Roosevelt som en företrädare för Keynes' politik.
Någon egentlig krislösning framkom inte i USA utan rustningsutgifterna inför andra världskriget löste problemet med arbetslösheten och produktionsminskningen Mellon lät tusentals banker gå i konkurs efter ett flertal förödande bankrusningar.
Återigen väcks frågan hur man ska möta en kraftig nedgång i den ekonomiska aktiviteten efter en finansiell krasch.
Sker det bäst med åtstramning eller med motverkande åtgärder som håller uppe efterfrågan?
Betraktar man de senaste årens utveckling i Europa inser man att 30-talskollapsen inte alls är obegriplig eller omöjlig att upprepa.
Den dystra sanningen är ju att eurokrisen bär på många av de frön som en gång framkallade den stora depressionen.
Highly recommended Det fungerar inte att få fart på Europas ekonomier genom att spä på redan ohållbart stora skulder, eftersom effekterna då uteblir.
Istället för att låna mer bör Europa satsa mer på frihandelsavtal och underlätta handeln med tjänster inom Europa.
Everything else is commentary.
This is the moral I draw from Now!
I wish there were a way of getting finance ministers to learn by heart the chapter on the folly of their deficit obsession.
Keynes faced similar hostility when he tried to rescue capitalism from the Depression.
An economy is not like an indebted family.
Your spending is my income, and my spending is your income.
So what happens if everyone simultaneously slashes spending in an attempt to pay down debt?
A learned article making the case that high unemployment is the result of our failure to adapt to rapid technological change, and that there are no easy answers.
In particular, welfare programs designed to protect workers from the costs of change are making things much worse.
Paul Krugman, New York Times 9 May 2012 In the two years after the article was published, as the US began its military buildup and demand increased as a result, employment rose by 20 percent — the equivalent of adding 26 million jobs today.
Source: The American Economic Review, Vol.
Den merkantila principen och analogin med ett vanligt hushåll är fel Danne Nordlling 20 maj 2012 De länder som lyckats forcera fram ett exportöverskott borde förstå att det förutsätter att andra har förmåtts acceptera ett underskott.
Men istället gör man merkantilismen till moralisk norm och fördömer de länder som har underskott.
De ska förpakta sig att driva svångremspolitik för att få bort underskottet i statsfinanserna inom några år.
Sannolikt tror man att det automatiskt också kommer att eliminera exportunderskottet.
En återbetalning förutsätter att Grekland mfl skaffar sig ett handelsöverskott.
Då måste Tyskland skaffa sig ett underskott.
Känns det rätt för Angela Merkel och hennes arga väljare?
Merkantilismen och analogin med vanliga hushåll är tydligen fel.
Europas politik verkar styras av ett ekonomiskt tankefel.
Några fasta växelkurser och konstlade valutaunioner, som medger uppbyggnaden av gigantiska obalanser, ska man inte ha.
The 2012 rivals can be named: Hayek v Keynes In a fusillade of debates and speeches President Barack Obama and his Republican challengers have firmly established the economic policy combat lines for next year.
Steven Rattner, FT 12 September 2011 Friedman and Keynes Many economists agree that the drastic measures taken probably prevented a repeat of the Great Depression.
Unemployment tends to rise when GDP growth falls below about 2.
The chancellor was told by his Treasury officials that unless a rescue plan was announced by the time the City opened for business the following morning, there was no guarantee that cashpoints would work and that cheques would be honoured.
The possibility of global financial implosion concentrated minds wonderfully; bailout plans were announced that ensured disaster was averted.
Co-ordinated and collective action meant there was no return to the 1930s, and within six months most countries were recovering.
Larry Elliott, Guardian, 31 May 2011 China's economy is now almost a third bigger than it was at the start of 2008, while India's has grown by almost a quarter.
The US and Germany have recouped all the ground lost in the Great Recession.
För ekonomer DeLong and Summers: Fiscal Policy in a Depressed Economy: Conference Draft Brookings 22 March 2012 zc Spotting a banking crisis is not like predicting the weather Short-term weather forecasts are better than medium-term economic forecasts John Kay, Financial Times, August 13, 2018 In contrast, severe recessions, property bubbles and bank failures are relatively infrequent, and calibration by economists has come to mean tweaking models to better explain the past rather than revising them to better predict the future — a particularly dangerous methodology when there are many reasons to think that the underlying structure of the economy is in a state of constant flux.
The objective of monetisation has not been to put money in the hands of consumers and businesses but to put money in the vaults of banks.
To be fair, the central bankers who disbursed it hoped some might work through to the real economy.
But their primary objectives were to underwrite the past losses of the banking system and allow the strengthening of bank balance sheets.
That is why these mechanisms for printing money have won plaudits rather than excoriation from the traditional defenders of sound currency.
The reputation of economists, never high, has been a casualty of the global crisis.
Once, not so long ago, Americans thought their central bank near omnipotent.
As economist Paul Krugman put it in 1997, the U.
It did just that when financial troubles struck in 1998, keeping the boom roaring for two more years.
Today, no such intervention is possible.
The Fed quickly slashed its interest-rate target to near zero during the crisis of late 2008.
Ryan Avent, Bloomberg 22 February 2018 I USA var så kallade National Banks länge förbjudna att lämna lån mot säkerhet i fastigheter.
Banker skulle inte vara pantlånare.
Grant beskriver spekulationsvågorna gällande mark, fastigheter och aktier och främst 1920-talets utveckling fram mot kulmen 1929.
Han uppehåller sig mycket vid den av andra föga uppmärksammade frågan om hur det kom sig att det tog så lång tid, ända fram till 1950-talet, innan lusten att låna kom tillbaka.
Det erinrar om dagens situation där I USA centralbankschefen Greenspan försöker uppnå en "soft landing" på ekonomins hangarfartyg.
Han känner att han inte kommer fram, drar gasen - räntan - i botten, men motorn, penningmängden, svarar inte.
Bank of England raised interest rates to 7 per cent in 1920.
Coupled with the consequent deflation, the result was extraordinarily high real interest rates.
This, then, was how the self-righteous fools in the British establishment greeted the hapless survivors of the hellish war.
What happens if a large, high-income economy, burdened with high levels of debt and an overvalued, fixed exchange rate, attempts to lower the debt and regain competitiveness?
This question is of current relevance, since this is the challenge confronting Italy and Spain.
Andrew Huszar vittnar om intern kritik bland Fed-chefer som varnade för att QE inte fungerade som det var tänkt.
Hans egna köp av bostadsobligationer hjälpte inte vanliga amerikaner.
Bankerna lånade inte ut, och de lån som gavs blev inte billigare.
Däremot gjorde bankerna själva enorma vinster.
Andreas Cervenka, SvD Näringsliv 12 november 2018 Några år senare, efter insatser på svindlande 4 000 miljarder dollar, konstaterar han att Federal Reserve inte lyckats få USA:s ekonomi att växa mer än marginellt.
Istället har stimulanserna bara minskat trycket på Washington att ta itu med USA:s strukturellt osunda ekonomi och blivit ett skyddsnät för Wall Streets megabanker som blivit de stora vinnarna.
As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing.
The central bank continues to spin QE as a tool for helping Main Street.
But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director, Wall Street Journal via zerohedge, 12 November 2018 Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call.
Would I come back to work on the Fed's trading floor?
Incredibly, the Fed was calling to ask if I william hill bet calculator lucky 15 each way to quarterback the largest economic stimulus in U.
How to solve the financial crisis?
Let me tell you a little secret, folks.
A few years of nice profits will help offset the big losses from past blunders Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
QE - What If the Fed Has It All Wrong?
Inflating asset prices without having a definitive impact on the economy other than, most importantly, preventing a lethal debt-deflation spiral.
By Denis Ouellet, via John Mauldin, 25 September 2012 This is the 4th major intervention from the Fed since 2009, each one apparently inflating asset prices without having a definitive impact on the economy other than, most importantly, preventing a lethal debt-deflation spiral.
For as the Financial Policy Committee itself points out, the banks sell at a discount of around a third to net asset value because of uncertainty about the value of assets that are difficult to price and a well justified conviction that the assets are overvalued.
John Plender, Financial Times 4 December 2012 Treasuries have turned anything but risk-free The global financial system is hostage to a big rise in borrowing costs when the retreat from QE puts an end to the current era of extraordinarily low interest rates.
John Plender, FT 22 October 2018 The rise in bond yields will thus inflict big capital losses on bond holders.
Neither the Fed nor anybody else can know how those losses will be distributed around an increasingly complex system.
How far bonds have been hedged or leveraged is likewise unclear.
Jag tycker det är skriande uppenbart att räntan världen över är för låg och att en större del av stimulanserna borde ske via finanspolitiken.
The greatest ever monetary experiment Throughout history monetary experiments have shown a nasty tendency to blow up.
I repeat: this experiment is vast.
Mario Draghi of the European Central Bank committed to buying eurozone sovereign debt without limit.
Federal Reserve chairman Ben Bernanke announced an open-ended asset purchase programme aimed specifically at a weak US labour market.
Then at the Bank of Japan Masaaki Shirakawa announced an aggressive expansion of monetary easing, increasing the size of asset purchases and extending the deadline for the purchasing programme.
Stephen Cecchetti and colleagues at the Bank for International Settlements have calculated that the primary fiscal surplus as a percentage of gross domestic product must swing over 10 years by 15 percentage points in the UK, 14 per cent in Japan, 11 per cent in the US and 9 per cent in France just to stabilise public debt at the pre-crisis level.
How likely are their governments to pull off this awesome trick?
The Trouble with Printing Money QE3 reflects a colossal failure to address our predicament Chris Martenson, September 18, 2012 Now we have two of the most important central banks, that of the U.
The bigger worry is that the benefits of QE3 are so unclear, because the transmission mechanism is so muddled, while the potential costs are so high.
But what the Fed did not reveal was that while almost all of the voting committee members supported QE3, several non-voting members did not under the Federal system, the regional presidents vote on a rotating basis.
Indeed, if you include those non-voting members, around a third of the committee was wary, if not unhappy, with QE3.
Nobody really knows what will work to get the economy back on course.
Pengaskapandet sker när banker beviljar lån.
Andreas Cervenka, SvD Näringsliv 2 september 2012 En vanlig uppfattning är att banker tar kunders sparpengar och lånar ut dessa till andra kunder.
Det är ett synsätt som härstammar från äldre skolboksmodeller.
Så fungerar det inte i den moderna finansvärlden.
En bank behöver inte vänta på att någon sätter in pengar för att kunna låna ut.
Allt mer av utlåningen har gått till spekulation i stigande priser på tillgångar, som hus och aktier.
Prisuppgången föder mer krediter, som i sin tur driver upp priserna, vilket gör att bankerna lånar ut ännu mer och så vidare i en självförstärkande virvelvind.
På pappret ser det bra ut, bankerna tjänar pengar och ekonomin går för högtryck.
I själva verket kan allt vara ett luftslott.
Detta blir uppenbart först på vägen ned.
Banker har nämligen inte bara förmågan att skapa pengar utan också att destruera dem, vilket sker när krediter dras in och dåliga lån skrivs ned.
Det gör att börsen och fastighetspriser rasar, utlåningen sjunker ännu mer och så vidare.
Petrol costs in Germany and across much of Europe are now at record levels in local currencies.
This is a remarkable state of affairs given the world economy is close to a double-dip slump right now, the latest relapse in our contained global depression.
Har Borg knäckt den keynesianska koden?
Man håller igen när det går trögt och gasar på när hjulen rullar.
Det är inte ortodox konjunkturpolitik, om man så säger.
This doctrine has an undeniable emotional appeal to people who are themselves comfortable.
But these are times of madness, dressed in good suits.
The Economic History of the Twentieth Century The Great Crash and the Great Slump Paul Krugman och jag om finanspolitiken som stimulans i stället för räntan Sannolikt lämnar Grekland euron Resten av Europa har nu bättre chanser än för två år sedan att hantera förlusterna på de grekiska fordringarna.
SEB förordar en mer expansiv politik både för Sverige och Euroland.
Man behöver inte tro på Keynes teorier från 1930-talet för att se både den politiska och ekonomiska faran i en finanspolitik som spär på nedgången.
Det långsiktigt nödvändiga — att sanera skuldsatta ekonomier — är inte en klok strategi i ett akut läge.
You hardly need to be an economist as accomplished as Prof Garicano to figure out that ripping 3.
These are two enormously important questions raised by current circumstances in the US, the eurozone, Japan and the UK.
Martin Wolf, Financial Times April 17, 2012 Broadly speaking, I can identify three macroeconomic viewpoints on these questions: The first is the pre-1930 belief in balanced budgets and the gold standard or some other form of a-political money.
Liquidity trap Two new papers bring light from the second of these perspectives.
The other is co-authored by J.
Bradford DeLong of the university of California at Berkeley, and Lawrence Summers, former US treasury secretary and currently at Harvard university.
There is no central bank shortcut to the goal of full employment If one is really determined to boost demand, production and employment by pumping money into the economy, the clear preference should be for the fiscal pumps.
Vad som sker just nu i Europa är något helt annat än vad Sverige genomförde på 1990-talet.
Att skära ner i en liten ekonomi när resten av världen går bra och dessutom bli belönad med lägre och lägre ränta är en sak.
I Sverige vågar dock nästan ingen säga det av rädsla för att stöta sig med våra modiga män och kvinnor på finansdepartementet.
Vi är helt irrationella i den här frågan.
Jag kan i själva verket tycka att Tyskland leder saneringen av Europas ekonomi just genom att agera bromskloss.
Merkels lite buttra motsträvighet fyller en viktig funktion som motvikt mot röster och stater som bara vill brassa på med stödåtgärder utan att bekymra sig över myntets baksida.
SvD-ledare Claes Arvidsson 24 mars 2012 Istället för att satsa oss ur kristider innebär arbetslinjen att vi arbetar oss ur de besvärliga perioderna.
Medicinen är något beskare men sockerpiller hjälper bara mot inbillade problem.
Att blåsa på under lågkonjunktur för att spara i högkonjunktur har traditionellt lett till att spenderbyxorna behållits på även i goda tider.
The failure to make a compelling political argument against this proposition has been crucial in limiting the feasible scale of the fiscal response to the crisis.
Simon Wren-Lewis has another very good blog post, this time on the very weak case for demanding fiscal austerity right now, even if you believe fiscal consolidation is needed in the long run.
Paul Krugman, New York Times 19 February 2012 Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals.
The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge.
Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.
I dag kan vi konstatera att Krugman haft fel inte bara om Baltikum, Grekland, Sverige och USA utan också om Storbritannien.
Märkligt nog har han fått stöd av den traditionellt konservativa internationella valutafonden som borde ha vetat bättre men nu får dela skammen med Krugman.
Some economists are so concerned about the present rapid rise in government debt that they favour immediate fiscal tightening.
Others are so concerned about the risk of renewed recession, and are so unconcerned about the risks from extra public debt, that they demand immediate fiscal easing on a large scale.
Gavyn Davies, Financial Times 24 February 2012 In many economies, this debate has now reached a stand-off, in which governments are trying to reduce deficits and debt only very gradually, while hoping that a recovery in private expenditure will keep the economy out of recession.
The result, which satisfies nobody, is very slow GDP growth and a continuing rise in public william hill bet calculator lucky 15 each way ratios.
Only in countries where the risk of a debt crisis has turned into grim reality i.
So far, the results of this shift have not been at all encouraging.
Economists are divided as to whether the Fed can or should do anything Some call for the Fed to be much more aggressive.
Others say that a slow and painful recovery is inevitable Here, four economists suggest what options they think the Fed chairman should be mulling ahead of his Jackson Hole speech.
BBC 25 August 2011 What is the real rate of interest telling us?
The real interest rate on US and UK government debt is currently near to zero Bond yields have been extraordinarily low in the developed world in recent times because the economies have been stuck in, or very near, a liquidity trap.
Longer term government interest rates have remained positive, but at 1.
Treasury Secretary Timothy Geithner warned heavily indebted countries not to resort to draconian measures to fix their budgets, according to congressional testimony released on Monday The truth, although nobody on the right will ever admit it, is that Friedman was basically a Keynesian — or, if you like, a Hicksian.
Paul Krugman, NYT blog 14 March 2012 His framework was just IS-LM coupled with an assertion that the LM curve was close enough to vertical — and money demand sufficiently stable — that steady growth in the money supply would do the job of economic stabilization.
These were empirical propositions, not basic differences in analysis; and if they turn out to be wrong as they havemonetarism dissolves back into Keynesianism.
I have a dream.
It is to create an, or rather, the, Hayek-Friedman-Keynes Synthesis Re-elected with 61 percent of the vote in 1936, President Franklin D.
Roosevelt told his supporters, "Now I'm going back to do what they call balance the budget.
How often have you read such remarks?
It is a cliché.
As the McKinsey Global Institute study points out, it is also false.
McKinsey Global Institute study Sweden and Finland, both hit by big crises in the early 1990s, are good examples Martin Wolf, March 13, 2012 The benign story unfolds like this: a big increase in leverage ends in a huge financial crisis; the government promptly restructures the financial system; excessively indebted private borrowers reduce their obligations by slashing spending; central banks cut interest rates; the resulting collapse in activity and profits pushes the government into huge fiscal deficits, which also support the economy; finally, the economy recovers, helped by exports, and the government begins its fiscal retrenchment.
Thus the temporary rise in fiscal deficits helps protect the economy from the forced private retrenchment.
The alternative would be a depression, in which mass bankruptcy, not repayment, lowers debt.
Den hemska sanningen om John Hassler, Göran Persson och kronkursförsvaret This was not what was supposed to happen Krugman om Trichet och åtstramning som ger tillväxt Economists And Post-Crisis Policy Also Ireland Henry Farrell and John Quiggin have posted their fascinating paper on the rise and temporary, I think fall of Keynesian economics in the aftermath of the financial crisis Det finns starka skäl att tillåta ganska stora underskott i en lågkonjunktur, när skatteinkomsterna faller samtidigt som de offentliga utgifterna snarare behöver stiga än sjunka.
Men det behövs också någon form av regel eller spärr som gör att det inte uppstår budgetunderskott även i mer normala tider.
SNS Konjunkturrådsrapport 2012 debattartikel GP SNS Konjunkturråd 2012: Det stabiliseringspolitiska regelverket kan förbättras — även i Sverige Det är djupt tragiskt att Grekland ska få lida så mycket genom att helt amatörmässiga föreställningar om nationalekonomi ska tillgodoses Det finns inte några korrekta och samtidigt accepterade teorier om hur stora kriser av dagens typ ska hanteras Det såg vi redan i Sverige i början av 90-talet Danne Nordling, 16 februari 2012 Det är de mest okunniga väljarna i Tyskland, Finland och Holland som tycks få styra politiken gentemot Grekland.
De tror att ett ett lands ekonomi fungerar på i princip samma sätt som ett vanligt hushålls.
Men sedan finns det sådana som Daniel Gros som legitimerar nedskärningspolitiken genom att tala om sparande.
Det hela bottnar i att nationalekonomins "neoklassiska skola" urartade på ett sätt som gör att det inte finns några korrekta och samtidigt accepterade teorier om hur stora kriser av dagens typ ska hanteras.
Det såg vi redan i Sverige i början av 90-talet.
The debate on the correct setting for fiscal policy at a time of recession is probably the oldest debate in macro-economics.
One key element in the debate is the trade off between supporting output growth in the short term, versus the need to control the growth of public debt in the long term.
Gavyn Davies, FT 5 February 2012 There are some economists who do not recognise that this trade off exists at all, because they claim that an increase in the fiscal deficit cannot impact aggregate demand, even in the short run.
But this is not a view which I believe to be supported either by empirical research or by economic theory except on some very restrictive assumptions about Ricardian Equivalence or Says Law.
Sometimes, advocates on both sides of the debate assume that the answer is obvious.
Supporters of fiscal easing tend to take it as axiomatic that higher public debt will have no effect on inflation or interest rates, and frequently quote the example of Japan in support of their argument.
Meanwhile opponents of fiscal william hill bet calculator lucky 15 each way take it as equally axiomatic that a fiscal crisis is to be avoided at all costs, and quote the examples of Greece, Italy and Spain to support their case.
The big divide is between those — the Austrians — who hold that the mistakes are made by governments while the solution is to let the distorted financial edifice collapse and those — the post-Keynesians — who hold that a modern economy is inherently unstable, while letting it collapse would take us back to the 1930s.
I am decidedly in the latter camp.
One might not expect much from economists, but one would surely expect them to warn us of a crisis on this scale.
Der Spiegel, 13 February 2012 They do not control it, and so they are in the same position aswhere the countries became indebted in dollars.
It was a situation that led to a lost decade there.
Europe now faces a lost decade.
Om man har en sedelpress går man inte i konkurs It looks increasingly clear that sub-sovereign eurozone borrowers are in a different position from a sovereign country, such as the UK Martin Wolf, Financial Times 2 February 2012 Financial Times: Italien har ingen sedelpress Just like the banks in 2008, Italy cannot print money to alleviate its problems Det som Tyskland fruktar, dvs.
Paul Krugman, January 28 January 2012 Indeed, Broder's column - which I mercifully did not read at the time - is worse than I imagined - That the Washington Post Published and Kept on Publishing David Broder Is Reason Enough for It to Shut Down Today and Never Reopen Brad DeLong January 28, 2012 David Cameron låter som Johanna Möllerström.
Det är inget beröm.
Nuvarande statsfinansiella regelverk försvårar förbättringar.
Carl-Johan Westholm, DN Debatt 25 januari 2012 På Strängs tid var statsbudgeten uppdelad i en driftsida och en kapitalsida, dvs en åtskillnad mellan utgifter för konsumtion och för investeringar.
Men Sträng såg allt i ett.
Totalbalanseringen gjorde att statens tillgångar oavbrutet ökade, då investeringarna antogs vara lönsamma.
Istället menade Ohlin att investeringar kunde lånefinansieras.
Avkastningen på dessa borde bli högre än ränteutgiften, och värdet högre än kostnaden.
På regeringarna Fälldins tid 1976-82, med de ekonomiansvariga ministrarna Gösta Bohman och Ingemar Mundebo, försvann denna uppdelning, Järnvägen har grovt eftersatt underhåll och starkt ökad efterfrågan.
Nuvarande statsfinansiella regelverk försvårar förbättringar.
Det blir många försenade, inställda och även urspårade tåg.
Regering och riksdag borde med ett separat beslut låta finansieringen ske vid sidan av det överskottsmål för Sveriges offentliga finanser totalbalans på 1 procent som funnits sedan krisen i början av 1990-talet.
SJ och Trafikverket borde få rätt att låta Riksgälden ge ut obligationer över åren för att betala upprustningen av järnvägen.
Det kan vara sant.
Men det kan också vara sant att den som aldrig sätter sig i skuld kan begränsa sin frihet.
European governments have signed a "suicide pact" by imposing fiscal austerity plans that will collapse their economies, Joseph Stiglitz, the liberal economist, has warned.
The consensus is turning against austerity The German chancellor remains a believer.
This weekend she said that Greece could rebuild its economy despite austerity.
She accepts that spending cuts alone won't work, but she believes that structural reforms have to be forcefully implemented although they take time.
The big divide is between those — the Austrians — who hold that the mistakes are made by governments while the solution is to let the distorted financial edifice collapse and those — the post-Keynesians — who hold that a modern economy is inherently unstable, while letting it collapse would take us back to the 1930s.
I am decidedly in the latter camp.
Martin Wolf, Financial Times, January 3, 2012 The dominant theoretical paradigm holds that a financial crisis cannot happen and cannot matter if it does happen, at least provided broad money is not allowed to collapse.
In this view, the only things now holding economies back are structural rigidities and policy-induced uncertainties.
This is, in my view, a fairy story, based on theories that reduce capitalism to a barter economy under a thin monetary veil.
Far more persuasive, to me, are views that accept that people make important mistakes.
The big divide is between those — the Austrians — who hold that the mistakes are made by governments while the solution is to let the distorted financial edifice collapse and those — the post-Keynesians — who hold that a modern economy is inherently unstable, while letting it collapse would take us back to the 1930s.
I am decidedly in the latter camp.
In his prescient 1986 masterpiece, laid out his financial instability hypothesis.
A lengthy period of tranquillity will raise fragility: people will underestimate dangers and overestimate opportunities.
In the eurozone this shift to fiscal austerity is running alongside a still bigger experiment: the construction of a currency union around a structurally mercantilist core among countries with negligible fiscal solidarity, fragile banking systems, inflexible economies and divergent competitiveness.
Inept politicians It looks like 2012 will be the year of self-induced sluggishness.
History teaches that financial crises are followed by years of weakness.
But some of the current pain is unnecessary.
A more calibrated approach with more financing and more structural reforms makes far more sense.
Inept politicians have placed a big burden on central banks, which will have to take more unconventional measures, such as quantitative easing see article.
Lawrence Summers, FT October 23, 2011 Most policy failures in the US stem from a failure to appreciate this truism and therefore to take steps that would have been productive pre-crisis but are counterproductive now with the economy severely constrained by lack of confidence and demand.
Third, stabilising the housing market will require doing something about the large and growing inventory of foreclosed properties.
Recent events have given us a dramatic demonstration of the reality of nominal wage stickiness.
Despite crushing unemployment, wages in Ireland and Latvia have come down only slightly — but Iceland, by letting its currency devalue, achieved a quick 30 percent fall in wages relative to the euro zone.
Keynes Finding the human causes of this financial crisis can set us on the road to recovery The starting point is to recognise that this proto-depression is not natural or inevitable.
It is not the result of destruction through earthquake, or famine.
It results from human actions and inactions.
So why did the prime minister change his speech at the last minute?
Tim Harford, FT October 7, 2011 - Aha, this is the famous paradox of thrift?
The paradox of thrift is the idea that when we all try to pay off our debts, in fact we end up more indebted than ever.
Tim Harford is economics leader writer for the Financial Times and writes on Saturdays.
EU finance ministers this week will discuss whether governments with the strongest public finances can provide some budget stimulus to help william hill bet calculator lucky 15 each way flagging economic growth in the 27-nation bloc.
That means governments with the strongest finances—Germany, the Netherlands, Sweden, Finland and Luxembourg—could run smaller surpluses or bigger deficits than expected, diplomats said.
WSJ 2 October 2011 "There are countries for which fiscal consolidation is less useful than others," said one diplomat.
I really wonder about the state of economics education.
Stable expectations of a sound economic environment… Mankiw: Business Investment as a Key to Recovery: "he most volatile component of G.
The subpar recovery has coincided with a historically weak investment recovery.
Compare our recent experience with that of the early 1980s, when the nation last experienc….
While the sluggish housing market can explain the slow pace of residential investment, it is not the whole story… Governments are pushing austerity; bankers are hoarding cash; a recession looms in the United States and Europe.
Posen has a solution: a shock-and-awe display of coordinated central bank attacks aimed at reviving sluggish economies.
Posen is no academic scribbler or lonely blogger New York Times 17 Sept 2011 Mr.
Posen said before a roomful of small-business leaders and bankers.
Roger Bootle, 11 Sepember 2011 G-7 Torn Between Stimulus and Cuts The inability of finance ministers and central bankers from the Group of Seven nations to come up with a decisive response so far to problems of growth was reflected in U.
Wall Street Journal, September 10 2011 The difficulty in coming up with a common solution was reflected in the group's communique, which hovered between backing stimulus and backing austerity.
The prime minister revels in his pre-Keynesian views.
When weak demand is the immediate constraint on output, that is simply terrifying.
Alice's Adventures in Wonderland The prospect that one of these people may well be our next president is, frankly, terrifying.
Suddenly, you find yourself in a fantasy world where nothing looks or behaves the way it does in real life.
And since economic policy has to deal with the world we live in, not the fantasy world of the G.
Finanskrisen blev speciell för Sveriges del.
Exporten säckade ihop, vilket slog hårt mot BNP och de anställda i industrin, men många andra fick det bättre ekonomiskt tack vare jobbskatteavdrag, höjd lön och sänkta räntor.
Interndevalvering Grekland står sannolikt inför en nationell kollaps.
Den europeiska makteliten har fastslagit att vägen till ekonomisk balans i de sydeuropeiska eurokrisländerna är s k interndevalvering.
David Cameron låter som Johanna Möllerström.
Det är inget beröm.
Finanspolitiken har varit för stram i recessionen, menar Calmfors.
Socialdemokraterna har av taktiska skäl anslutit sig till en felaktig politik.
Och journalisterna undviker att ställa frågor Danne Nordling 25 april 2012 Socialdemokrater av olika slag tycks göra allt för att låtsas som om problemet inte existerade.
Och journalisterna undviker att ställa frågor av principiell natur.
Socialdemokraterna var snarare först med en omorientering mot mer finanspolitisk konservatism, som också skett i de flesta andra länder.
Det är ett synsätt som överlåter stabiliseringspolitiken till penningpolitiken - tyvärr med ödesdigra risker för successiv uppbyggnad av bostads- och fastighetsbubblor med våldsamma kriser som följd.
Och i år kommer finanspolitiken enligt regeringens egna beräkningar att vara åtstramande trots en förväntat svag konjunktur.
Lars Calmfors, kolumn DN, 24 april 2012 Detta verkar spegla finansministerns alldeles egna syn på finanspolitiken: om det blir dåliga tider ska politiken stramas åt för att öka handlingsutrymmet ifall det skulle bli ännu sämre längre fram.
Med denna uppläggning tenderar finanspolitiken att bli procyklisk så att den förstärker, i stället för motverkar, konjunktursvängningarna.
Riksbanksdirektionens majoritet vill inte stimulera konjunkturen genom fler räntesänkningar av rädsla för att det kan leda till alltför höga fastighetspriser.
I den situationen är en mer expansiv finanspolitik önskvärd.
Finansministerns argumentation är alltför grov.
Synpunkter om en lite mer expansiv politik bemöts reflexmässigt med att vi då kan hamna i Greklands eller Spaniens situation.
Sanningen är förstås att Sverige med sina starka offentliga finanser spelar i en helt annan division.
Tyvärr har regeringens argumentation på denna punkt haft så starkt genomslag att Socialdemokraterna av taktiska skäl inte vågar ifrågasätta den.
Anders Borgs motivering för den försiktiga budgeten är den internationella osäkerheten och de risker som en konjunkturavmattning innebär.
Det kan låta klokt.
Men det finns samtidigt skäl att reflektera över principerna för regeringens finanspolitik.
Det är en olämplig konjunkturpolitik med större reformer i goda tider än i dåliga, vilket blir fallet om konjunkturdämpningar får leda till att utrymmet för reformer revideras ner.
En sådan procyklisk finanspolitik förstärker konjunktursvängningarna.
Lars Calmfors, Kolumn DN 22 sept 2011 Budgeten är utformad så att det faktiska finansiella sparandet blir precis noll nästa år.
Det verkar som om regeringen infört ett ytterligare budgetmål: att undvika underskott även i en lågkonjunktur av det slag som förutses.
Om målet uppnås, kommer förmodligen överskottsmålet, som ju gäller över en hel konjunkturcykel, att överskridas.
Ett sådant budgetbalansmål kan därför innebära en avsevärd skärpning av de budgetpolitiska ambitionerna.
Riksbankens inflationsmål bör höjas från nuvarande 2 till 3 eller 4 procent för att skapa bättre möjligheter att möta framtida kriser.
Det skall bli intressant att se hur de svenska ny-hooveristerna skall ta emot President Obamas senaste stimulanspaket på 447 miljarder dollar.
SvD genom Johan Ingerö om Obamas stimulanspaket på 447 miljarder dollar The U.
Markets and governments swap roles Stephanie Flanders, BBC Economics editor, 7 September 2011 There was a time, not so long ago, when politicians were profligate and the markets begged for restraint.
Now it is politicians - on both sides of the Atlantic - who demand fiscal restraint and spending cuts.
While the financial markets seem to be looking for stimulus.
Interest rates are already extremely low.
And the talk in Washington - and across Europe - is all of fiscal austerity.
This has many on Wall Street extremely concerned.
The biggest constraints on action in the major developed economies now have less to do with those economic realities and more to do with political paralysis, misplaced fears about inflation and moral hazard, and unwarranted disaffection with the efficacy of the traditional fiscal tools of tax cuts and investment to encourage growth.
Tim Geithner, FT 8 September 2011 It is time to take the bull by the horns and say that fiscal policy should aim to balance the economy and not just the national budget, especially at times when monetary policy cannot do the job on its own.
Samuel Brittan, FT, 8 September 2011 How can we do this without giving every spending authority an excuse for going on a spree when it likes?
I suggest that the national budget should be divided into three parts.
Listen to the markets.
They are saying: borrow and spend, please.
Yet those who profess faith in the magic of the markets are most determined to ignore the cry.
Martin Wolf, FT 6 September 2011 Are the markets mad?
Yes, insist the wise folk: the biggest risk is not slump, as markets fear, but default.
I cannot be the only person who fears that the situation we are in is causing Martin Wolf's mind to crack.
The worst of the euro crisis is yet to come The most disturbing aspect about the eurozone right now is that every crisis resolution strategy depends on a moderately strong economic recovery.
Riksbankens inflationsmål bör höjas från nuvarande 2 till 3 eller 4 procent för att skapa bättre möjligheter att möta framtida kriser.
So how do we address this crisis?
Kommentar av Rolf Englund: Klas Eklund var Trotskyist, "trottare", som han, som chefsekonom på SEB, leende brukade säga, Men Trotsky var inte snäll The current UK depression will be the longest since at least the first world war.
All this is disturbing enough.
What is even more disturbing is the near universal view that almost nothing can be done to change the prognosis.
Martin Wolf, Financial Times, 1 September 2011 Worse, what almost no one initially foresaw is now seen as next to irremediable.
In anBill Martin, at the Centre for Business Research at Cambridge, forcefully attacks this pessimism.
His conclusion is that the problem has been the collapse in demand, not in potential supply.
Worse, he notes, the longer output remains depressed, the more likely it is that supply potential will be needlessly damaged.
The private sector is seeking to improve balance sheets, by paying down its debt.
Frightened by deficits, the government is now trying to do the same.
This can add up, without a prolonged slump in activity, if and only if the economy shifts into huge external surplus.
My answer is: no, because the first one did not end.
The fading out of the stimulus is already and noticeably leading to substantial withdrawal of government demand.
Paul Krugman, New York Times 3 September 2011 Look, in particular, at actual government purchases of goods and services — governments at all levels buying stuff — which is what standard macroeconomics says should have the highest multiplier, since unlike transfers and tax cuts it is by definition spent rather than saved.
Att Merkel och Sarkozy lägger förslag som i bästa fall är ineffektiva och i värsta fall direkt dubiösa är bara en del av Europas problem.
En annan del är att dessa ledare — men långt ifrån bara de — skjuter in sig så ensidigt på makroekonomin.
Det känns inte 100-procentigt säkert att den här åtgärdslistan kan ställa Europas affärer till rätta om åtgärderna mot all förmodan skulle bli verklighet Det hägrande överskottet i de offentliga finanserna uteblir helt.
Desto viktigare alltså att hålla i; vad motsatsen leder till finns många otäcka exempel på ute i Europa.
DN-ledare 27 augusti 2011 Konjunkturinstitutet har angett det så kallade reformutrymmet till 30 miljarder kronor, men Borg ser bara 10—15 miljarder.
Därtill kan spelrummet inte användas som tänkt, utan tyngdpunkten landar på tillfälliga efterfrågestimulanser och arbetsmarknadspolitik.
Men regeringen måste akta sig för att bli för passiv.
Ekonomin kan behöva robust stöd.
Regeringen nu räknar med ett årligt inkomstbortfall på 50—60 miljarder kronor under mandatperioden, jämfört med tidigare prognoser.
Av det 30 miljarder kronor stora reformutrymme som Borg skissade på i våras, återstår sannolikt inte mer än max hälften.
Det skulle inte äventyra stabiliteten i de offentliga finanserna, det skulle däremot dämpa nedgången i efterfrågan och därmed tillväxtfallet.
Men eftersom Moderaterna investerat allt i imagen av ekonomiskt ansvarstagande sätter Reinfeldt och Borg stopp.
Nu kan de säga "skapa säkerhetsmarginaler" lika ofta som "vara garant för ordning och reda i de offentliga finanserna".
And, to the extent that policies have a common theme, it is the wrong one: politicians across the rich world are taking too short-term a view of fiscal austerity The Economist, editorial print 27 augusti 2011 Today there is no boldness the euro-zone crisis is the epitome of politicians doing too little too late.
There is no co-ordination.
And, to the extent that policies have a common theme, it is the wrong one: politicians across the rich world are taking too short-term a view of fiscal austerity—a bout of budget-cutting which will only increase the risk of another recession.
Reinfeldt och Borg kommer att argumentera för att skjuta på skattesänkningar.
Moderaterna trycker på pausknappen.
Rent sakligt talar fortfarande mer för än emot att sänka skatterna nästa år.
Det skulle inte äventyra stabiliteten i de offentliga finanserna, det skulle däremot dämpa nedgången i efterfrågan och därmed tillväxtfallet.
Säkert är det inte.
Men sannolikheten är sisådär 70 procent.
Men eftersom Moderaterna investerat allt i imagen av ekonomiskt ansvarstagande sätter Reinfeldt och Borg stopp.
Nu kan de säga "skapa säkerhetsmarginaler" lika ofta som "vara garant för ordning och reda i de offentliga finanserna".
Det låter bra Expressen-ledare 18 augusti 2011 The crusade for a balanced-budget amendment that roiled American politics this summer reached Paris this week, with the announcement from Nicolas Sarkozy and Angela Merkel that every country in the euro zone would commit to passing a balanced-budget amendment to their constitutions by next summer.
Wall Street Journal 18 August 2011 Who says there's no tea party in Europe?
Alas, who says that Europe is immune from the tea party's bad ideas?
We doubt it would be possible to get 17 democracies to approve such an amendment.
We doubt even more that it would be possible to enforce those amendments — certainly not any more than it proved possible to enforce the Maastricht Treaty rules for the currency union, which France and Germany were among the first to violate.
A reporter asked Perry what he would do about the Federal Reserve.
Standing next to a "Perry President" sign, the governor replied, "If this guy prints more money between now and the election, I don't know what y'all would do to him in Iowa, but we would treat him pretty ugly down in Texas.
A Federal Reserve spokesman said the central bank had no comment.
CNN 16 August 2011 Christine Lagarde urged policy makers to include measures to support economic growth in the short term as they implement fiscal tightening plans under market pressure.
Fiscal policy is all used up.
With interest rates at zero and its balance sheet engorged, the Federal Reserve is powerless too.
Revised figures for recent growth show a failing recovery — and there is nothing anybody can do.
Clive Crook, FT August 14, 2011 This is wrong.
Policymakers could act if they chose to.
Over the next few months, it is especially important that the Fed shows some gumption — but the point applies more broadly.
Politics, not economics, has neutered US policy.
Men om alla följer detta mode och drar åt till sista hålet så riskerar den ekonomiska cirkulationen att skadas rejält, skriver Per Lindvall.
The Greenspan put is not out of the money: it simply no longer exists.
As Buttonwood notes, valuations are still not cheap based on long-term earnings trends.
Skuldproblemen i Europa och USA beror i grund och botten på en ohållbar budgetpolitik.
Lättnaderna i EU:s stabilitetspakt har visat sig få ödesdigra konsekvenser för Europa och USA:s grundproblem är ju inte att man hade problem att höja skuldtaket, nu senast.
Problemet är att det har höjts tio gånger på tio år.
Man lånar för att ha råd med de befintliga lånen.
Till syvende och sist handlar västvärldens ekonomiska problem om att regeringar under lång tid har spenderat mer än vad de har.
Mer av samma kommer bara att göra saker och ting värre.
The first point is correct but the second is not quite right.
Throughout the crisis — and before it — Keynesian economists provided a coherent interpretation of events Joseph Stiglitz, August 9, 2011 Throughout the crisis — and before it — Keynesian economists provided a coherent interpretation of events.
Pre-crisis, America, and to a large extent the world economy, was sustained by a bubble.
The breaking of the bubble has left a legacy of excess leverage and real estate.
Consumption will therefore remain weak and austerity on both sides of the Atlantic now ensures the state will not fill the void.
Given this, it is not surprising that companies are unwilling to invest — even those that can get access to capital.
The Federal Reserve pledged for the first time to keep its benchmark interest rate at a record low at least through mid-2018 in a bid to revive the flagging recovery after a worldwide stock rout.
Interest rate cuts work their way through to the real economy by a number of transmission channels.
The banks, of course.
The bank-bailout channel will be the only monetary transmission mechanism to function like clockwork.
So do not be fooled by anybody who says that the central bank should cut interest rates for the benefit of innocent citizens Nouriel Roubini och Arne "Ratos" Karlsson oense Another recession may not be preventable.
But policy can stop a second depression.
Nouriel Roubini Ett så kraftigt kursfall förutsätter att man tror det ska bli en global djup recession, och det tror inte jag säger Arne Karlsson, vd på Ratos Jag har tidigare hävdat att det enda genomförbara sättet att förkorta den kommande perioden av smärtsamma nedskärningar och långsam tillväxt är en bibehållen måttlig inflation på till exempel 4—6 procent i flera år.
Kenneth Rogof, William hill bet calculator lucky 15 each way DN 16 augusti 2011 Inflation är ju en orättvis och godtycklig överföring av kapital från sparare till låntagare, men en sådan övergång är faktiskt den kortaste vägen till snabbare återhämtning.
Det är den väg man kommer att ta, något Europa just nu får känna av.
Somliga anser att minsta antydan om en ens blygsamt förhöjd inflation är kätteri.
Men stora kontraktioner är till skillnad från recessioner mycket sällsynta och inträffar kanske en gång på 70 eller 80 år.
Nu måste centralbankerna offra lite av den trovärdighet som de samlar på sig i normala tider.
Ett lån i dag på två miljoner kostar 56 000 kronor om året i räntor efter skatteavdrag.
Om vi får en inflation på 5-6 procent kan räntan stiga med ytterligare ett par procentenheter till säg 7.
Då ska lönekronorna räcka till räntebetalningar på 98 000 kronor om året.
US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.
Everyone agrees that bold action is required, but what kind of bold action?
Kenneth Rogoff, Financial Times August 8, 2011 It is far from clear that any huge temporary fiscal stimulus will rev up the engine enough to achieve self-sustaining growth.
Higher government debt adds an overhang of higher expected future taxes on top of pre-existing private debt overhang.
True, in the classic analysis of a zero interest rate liquidity trap, the ideal policy is a money-financed temporary surge in government spending.
But the canonical model completely ignores debt overhang.
The eurozone is a modern version of the gold standard with the expectation that long and painful adjustment processes in deficit countries would unfold without a systemic crisis.
Miguel Carrion, Eurointelligence 19 July 2011 At Bretton Woods, Lord Keynes proposed an International Clearing Union with a surplus recycling mechanism and penalties for both deficit and surplus countries.
Today, we ignore at our peril that trade imbalances cannot be moderated by taking corrective action on the deficit side alone, especially in the presence of a fixed-exchange-rate regime such as the gold standard of Keynes' time or a monetary union without fiscal union where the central bank's price stability mandate trumps concerns over financial stability or full employment.
This was invented by the leading US economist, Irving Fisher, after he had bankrupted himself in the 1929 stock market crash.
We also studied historical financial crisis as well as the existing literature that was available at the time.
There are four deflationary spirals presently at work in the world economy, i.
Each of these deflationary spirals can be dealt with when they occur in isolation.
They become lethal when they interact with each other.
Raising taxes or cutting spending has side effects that cannot be ignored.
Either one or both will make it more difficult for the economy to grow.
This is true for all times and countries.
For the last several years, the real growth in GDP has come from the US government borrowing money.
Without that growth in debt, we would be in what most would characterize as a depression.
This is why Paul Krugman and his fellow neo-Keynesians argue that we need larger deficits, not smaller ones.
For them the issue is final aggregate consumer demand, and they believe you can stimulate that by giving people money to spend and letting future generations pay for that spending.
And sine WW2 they have been right, kind of.
But others and I am in this camp argue that business-cycle recessions are normal and that recoveries would come anyway, and are not caused by increased government debt and spending but by businesses adjusting and entrepreneurs creating new companies.
Correlation is not causation.
Just because recoveries happened when the government ran deficits does not mean that they were the result of government spending.
Grekland, Persson och Jens Henriksson Det blir inte bättre av att det blir sämre The Sorrow and the Pity of Another Liquidity Trap I had read Hicks.
I even knew Hicks.
But I thought that his era, the Great Depression, had passed.
While Democrats favor tax increases and mild adjustments to entitlements, Republicans pound the table for trillions of dollars of spending cuts and an axing of Obamacare.
Both, however, somewhat mystifyingly, believe that balancing the budget will magically produce 20 million jobs over the next 10 years.
Stall speed Richard Yamarone notes that if year-over-year GDP growth dips below 2%, a recession always follows.
But this complacency misses two important facts about the situation: the extremism of the modern G.
Paul Krugman, New York Times, 30 June 2011 In about a month, if nothing is done, the federal government will hit its legal debt limit.
Friedman and Keynes Many economists agree that the drastic measures taken probably prevented a repeat of the Great Depression.
Truth is, the giants Friedman and Keynes have met their Waterloo in that shows few signs of recovery, a financial crisis that has suppressed growth and a looming debt crisis in Europe and the U.
Click here for a nice try, that so far has failed Together we will create The Hayek-Friedman-Keynes Synthesis Debt ceiling Although it is still very likely that Republican leaders in Congress will strike a last-minute deal with the White House, the very fact that the two sides can contemplate a fight to the death over this issue is truly frightening, not only for America but for the world as a whole.
Anatole Kaletsky, The Times July 6 2011 It reminds us that the greatest threat to global prosperity and peace in the coming decades is not global warming or public debt or the rise of China.
It is the risk that America, the nation that has led, protected and inspired the world, both politically and economically, for the past century, may now be in terminal decline.
Is it possible that the US could become a Greece with Google?
This is a question that does not bear asking — just like the question of whether the US Treasury will decide to pay its debts.
When Paul Volcker decided in 1982 that the economy had suffered enough, he loosened the reins — and it was Morning in America.
I den med rätta uppmärksammade boken, Capitalism 4.
Det ryktet kvarlever med märklig kraft.
Men Kaletsky menar att det var Paul Volcker som ledde återgången till "demand management".
This gets things exactly wrong.
The truth is that creating jobs in a depressed economy is something government could and should be doing Paul Krugman NYT 10 July 2011 Excuse No.
But what everyone knows is wrong.
Think about it: Where are the big public works projects?
Where are the armies of government workers?
There are actually half a million fewer government employees now than there were when Mr.
In the first half of last year a strange delusion swept much of the policy elite on both sides of the Atlantic — the belief that cutting spending in the face of high unemployment would actually create jobs.
The latest entry is a comprehensive review of past episodes of austerity by economists at the IMF.
This is truly a tragedy: the great progressive hope well, I did warn people is falling all over himself to endorse right-wing economic fallacies.
Greklands höger har inte någon Thatcher Lady Thatcher, dåvarande premiärminister i Storbritannien, gjorde sig först känd som skicklig politisk kommunikatör när hon inför britterna i slutet av 70-talet jämförde statens ekonomi med ett vanligt hushålls matkassa.
Man kan inte handla för mer än vad som finns i plånboken, det visste varje brittisk husmor, och detsamma gällde statens finanser.
Why austerity alone risks a disaster The debate over post-crisis monetary and fiscal policy has been heating up, on both sides of the Atlantic.
So who is right?
It will come as no surprise that economists disagree deeply.
The Arab uprisings and the world financial crisis What they have in common is the complete failure of almost all these experts to predict them.
The moral is to try to understand a bit more and compute a bit less.
Samuel Brittan, FT, May 26 2011 This elementary point has not been well covered in the so-called literature on the origins of the credit tsunami.
Alan Greenspan is criticised for intervening at the slightest sign of a downward tick.
They illustrate this by the now familiar analogy of the tipping point.
Imagine someone who keeps adding sand to a pile until it crumbles.
The foolish and common error is to blame the collapse on the last grain rather than on the structure of the pile.
Nothing has done more to discredit serious economic analysis than its identification with the guesses about output, employment, prices and so on which politicians feel obliged to make.
The fundamental error springs from the identification of scientific method with prophecies, which was demolished long ago by the philosopher of science Karl Popper.
The moral is to try to understand a bit more and compute a bit less.
Nygammal kunskap om orsak och verkan budgetunderskott och konjunktur The ECB's governors might usefully study Systematic Monetary Policy and the Effects of Oil Price Shocks, a seminal work in 1997 by a Professor Ben Bernanke of Princeton.
The reason why such shocks often lead to slumps is because policymakers make a hash of it.
The ECB seems caught in a 1970s time-warp, wedded to the fallacy that the Yom Kippur oil shock caused the Great Inflation.
The actual cause was rampant growth of the broad money supply, US spending on the Vietnam War and the Great Society, and a near ubiquitous picture of over-stimulus and over-heating across the West.
It was a demand story, not a supply shock.
No doubt ECB governors need to prove their hawkishness after Bundesbank chief Axel Weber walked out of the Eurotower in disgust, more or less stating that he did not wish to take over a body that had departed so far from orthodoxy, and succumbed to political pressure by purchasing the bonds of bankrupt states.
Abstract Macroeconomic shocks such as oil price increases induce a systematic endogenous response of monetary policy.
We develop a VAR-based technique for decomposing the total economic effects of a given exogenous shock into the portion attributable directly to the shock and the part arising from the policy response to the shock.
Although the standard errors are large, in our application, we find that a substantial part of the recessionary impact of an oil price shock results from the endogenous tightening of monetary policy rather than from the increase in oil prices per se.
Those new GDP figures I mentioned yesterday showed real household disposable income falling by 0.
That's the first time this measure has fallen since 1981.
Sverige har länge haft stora överskott i bytesbalansen och trenden fortsätter.
Under fjolårets fjärde kvartal var överskottet 53,3 miljarder kronor.
Det var en ökning från motsvarande kvartal 2009 då överskottet uppgick till 39,9 miljarder.
Under fjärde kvartalet 2010 växte Sveriges bruttonationalprodukt BNP med 7,3 procent och tillväxten för hela fjolåret blev 5,5 procent, den högsta siffran sedan 1970.
For those of us who lived through the ERM crisis of 1992 and followed German events closely at that time, all this has a familiar ring.
It was not just recession in the UK, Italy, Spain, and parts of Scandinavia that caused the fixed exchange system to blow up, it was the deadly cocktail of slumps and banking troubles in these countries combining with German overheating.
The mix triggered the final crisis.
Ever since the early 1970s, every single time oil prices have spiked sharply rising by 80pc or moreregular as clockwork the US has entered recession.
Given America's massive influence on worldwide economic sentiment, the past five global recessions have all come in the wake of sharp jumps in the price of crude.
Tack vare regeringens framgångsrika hantering av finanskrisen har Sverige inte drabbats av de underskott som nu plågar så många europeiska länder.
Detta budskap har upprepats så många gånger det senaste året att det förvandlats till ett slags sanning, höjd över varje form av ifrågasättande.
Men hur väl stämmer finansministerns version överens med vad som faktiskt inträffat?
Highly recommended "The most important graph of the year" Gavyn Davies, blogsft, December 22 2010 Because the three sectors cover all of the activities of the US economy, at home and abroad, their financial balances must sum to zero.
After 2007, falling house prices and the financial panic caused both households and companies to slash their spending relative to their income, and to generate excess cash.
The shift in the private balance was a remarkable 14 per cent of GDP, and the consequent collapse in spending caused the recession.
In comments on that post, Martin Wolf, Tom and others suggested that I should break the private sector into at least two parts, comprising the household sector and the business sector.
Here is the resulting graph: When the housing market peaked in 2005, households realised that they should correct their financial imbalance, and eventually this led to a slowdown in the economy and a collapse in the bloated financial sector.
Only then — not before — did the business sector also seek to move into financial surplus, and this combined shift by businesses and households together triggered a very deep recession.
Payroll employment is still 7.
Det ryktet kvarlever med märklig kraft.
Men Kaletsky menar att det var Paul Volcker som ledde återgången till "demand management".
Roubini: Europe needs growth to prevent a disorderly collapse of the euro area.
Portugal Åtstramningarna som har framtvingats av marknaderna gör saken inte bättre, i alla fall inte på kort sikt.
Medan länder som Tyskland och Sverige växer så det knakar väntas Portugals BNP sjunka i år, precis som investeringarna, sysselsättningen och den offentliga och privata konsumtionen.
Hur Portugal i det läget ska klara av att sänka budgetunderskottet är för många en gåta.
In the spring of 2010, fiscal austerity became fashionable.
It was more like a fad, something everyone professed to believe because that was what the in-crowd was saying.
Portugal is the next example of a country to demonstrate that austerity in the middle of a financial crisis is a sure recipe for disaster.
The mood in the bond markets is deteriorating sharply, as Portuguese, and Spanish, spreads reach new records, amid expectation that the crisis is very certain to spill over to Portugal, and possibly even to Spain.
FT Deutschland makes the remark the Portuguese spreads are about as high now as the Greek spreads were ahead of the rescue.
Mike Pence, a Republican from Indiana "The Fed can print money, but they can't print jobs," "Printing money is no substitute for sound fiscal policy CNN December 3, 2010 We ought to be looking to the Congress to embrace the kind of policies that will get this economy moving again.
Mike Pence, a Republican from Indiana, seeks to scale the dual mandate back to a single goal of focusing only on prices, and leave job creation policy up to Congress.
Between 2010 and 2018, the UK is forecast to have the third largest reduction in the share of government borrowing in national income among 29 high-income countries: only Iceland and Ireland are to cut more.
The reduction in cyclically adjusted borrowing, is even forecast to be the second largest, after Greece.
Yet the UK has had no fiscal crisis.
That makes its austerity remarkable.
That passage has been held up by many people as an example of the wrong-headedness that prevailed at the time.
But here we are, in 2010 — and something very much like that position is being forcefully advocated by Wolfgang Schauble, the government of China, Narayanan Kocherlakota, and Sarah Palin.
History lessons for a world out of balance The prevailing rhetoric about currency wars smacks of the 1930s John Plender, FT November 11 2010 The prevailing rhetoric about currency wars smacks of the 1930s, when a sauve qui peut mentality marred international monetary relations.
What are the lessons of that beggar-thy-neighbour period for Group of 20 policymakers meeting at a time of renewed uncertainty in sovereign debt markets?



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