Posts tagged…Macroeconomics
Trade ‘imbalances’ are misleading
Mon, Jul 12 2010Alexandro Jara, the Deputy Director-General of WTO
"[R]elying on conventional trade statistics gives a distorted picture of trade imbalances between countries. As we saw when looking at the Chinese content of the iPad, what counts is not the imbalances as measured by gross values of exports and imports, but how much valued added is embedded in these flows.
The WTO estimate, based on IDE-Jetro…
Read more…A whiff of luddism
Wed, Jun 02 2010Ken Rogoff—the Cassandra of the financial markets crisis—insinuates a moral lesson from a another technical disaster without, however, actually defining one.
"If ever there were a wake-up call for Western society to rethink its dependence on ever-accelerating technological innovation for ever-expanding fuel consumption, surely the BP oil spill should be it. Even China, with its ‘boom now, deal…
The cost of Renminbi adjustment
Mon, Apr 12 2010Yang Yao, Editor of the China Economic Quarterly, points out that Obama's health budget calculations may depend on Chinese savings
"Stopping the sale of Treasury bonds to China would benefit the US. First, it would prevent Chinese savings depressing demand for American goods. Second, it would discourage the US government from deficit spending and prevent skyrocketing government debts. Third, it…
Tea leaves
Fri, Feb 26 2010A hiccup? Or a sign that imported deflation—via low-priced Chinese imports—will now start to slow?
"‘Labour availability is tight right now in Guangdong compared to other regions,’ said Paul Hussey, chief executive of Strix. The Isle of Man company, which dominates the global market for thermostatic controls on electric kettles, maintains most of its manufacturing operations in the provincial…
Chinese savings rate & the gender balance
Sat, Feb 06 2010Fascinating. A strong, explanatory correlation appears between very high household savings rates and the male-gender imbalance.
"…[E]conomists and policymakers have looked with concern to the large Chinese current account surplus and large US current account deficit, or global imbalances, much of their discussion has focused on changing exchange rate policy. None of the discussion about global…
Two strikes from recession, not three
Sat, May 16 2009
Lindsay Tanner's claim reads like part of a narrative that has been prepared by the Rudd government.
"The challenge for the government now is that whereas Hawke and Keating had ’86 terms of trade, ’87 stock market crash, ’90 recession, we’ve had all three, in effect, within the space of about a year and all feeding off each other in various kind of negative synergy ways." Extract from Business…
Bad plus bad equals worse
Fri, Apr 17 2009The key piece of bad news, today, from Chapter 3 of the IMF World Economic Outlook
Recessions that are associated with both financial crises and global downturns have been unusually severe and long-lasting. Since 1960, there have been only 6 recessions out of the 122 in the sample that fit this description… On average, these recessions lasted almost two years. Moreover, during these recessions…
Micro-macro
Sun, Apr 12 2009Tim Harford—discussing the dissing of macro—quotes P J O'Rouke:
"[M]icroeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things that they are wrong about generally" Extract from Tim Harford in the Financial Times
“What is to be done?”
Sat, Apr 11 2009Lenin recommended it. Now Simon Johnson moves from blaming the elites to organizing against them.
"We have to break up any bank that's 'too big to fail' so that we can have a functional free market. We need serious reform that fixes the root causes in our political and economic system: excessive influence of banks, dangerous compensation systems, and massive consolidation that does nothing to…
Is it a V or an L-shaped recession?
Thu, Apr 09 2009The case for a "V":
"Aided by substantial policy stimulus, growth in the Chinese economy should begin to accelerate in the first half of 2009 and the US recession should bottom out around mid-year with recovery accelerating to about a 4 percent annual rate by the fourth quarter. Recoveries in other countries will likely lag a little behind those in China and the United States. But, aided by a…
A spoon-full of toxin
Mon, Apr 06 2009When 'Uncle Joe' Stiglitz criticizes a program for 'socializing losses', there must be something seriously wrong.
The Geitner Plan for the U.S. banking system appears on the surface to be a way to create and isloate bad banks. These new institutions will be built by a partnership of government and private investors who will buy-up and hold the 'toxic' assets pending the market placing a firm and…
The Quiet Coup
Sun, Mar 29 2009If you can't let the banks fail and won't take over their assets, they own you.
"[W]e face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy [owing to the Geitner…