Yves here. This is a short but important debate over how much to worry about the upcoming train wreck in emerging markets when the Fed finally gets around to tightening. Pettifor sees it as a potential global crisis event; Macrobusiness sees it as a typical emerging markets bust. The Pettifor viewpoint seems more on target. First, […]
Read more...Despite the market jitters of last Friday, which were triggered in part by the recognition that the odds of Greece reaching a deal with its creditors are far lower than had been widely assumed, Greek-related coverage has ratcheted down, even as Greece seems certain not to get any funds released in the April 24 Eurogroup meeting and is very likely to miss the end of April deadline for getting its reforms approved by the Troika and Eurogroup.
Read more...Nobel Prize winner Robert Merton and Arlin Muralidhar have charged ZIRP and QE happy central banks with economic malpractice.
Read more...How Fed policies exacerbate inequality and dampen growth.
Read more...Elizabeth Warren makes a bold call for wide-ranging, serious financial reform.
Read more...A Greek default does not mean an inevitable Grexit. But even in the event of a default in the Eurozone, the costs to Greece of staying in the Eurozone are set to rise.
Read more...Aversion to Hillary Clinton among bona fide progressives is far more acute than Democratic party loyalists recognize.
Read more...Looking at slavery from the financial perspective, 1837 looks a lot like the Crash of 2007 – 2008.
Read more...The financial media has attributed considerable importance to the fact that many of America’s close allies, including the UK, Australia, and Israel, have joined China’s new infrastructure bank against the clearly-stated desires of the US. While these moves seem to signal America’s declining influence, it does not necessarily follow that the infrastructure bank is destined to become a major international institution any time soon.
Michael Pettis deflates some of the hype surrounding this initiative, arguing that it is less significant from a geopolitical and practical perspective than virtually all commentators assume. China is simply not about to become the issuer of the reserve currency any time soon, and that limits how much financial clout it will have.
Read more...The orthodox German view of the Eurozone crisis gets shellacked at an important INET panel.
Read more...Concerns about deflation – falling prices of goods and services – are rooted in the view that it is very costly. This column tests the historical link between output growth and deflation in a sample covering 140 years for up to 38 economies. The evidence suggests that this link is weak and derives largely from the Great Depression. The authors find a stronger link between output growth and asset price deflations, particularly during postwar property price deflations. There is no evidence that high debt has so far raised the cost of goods and services price deflations, in so-called debt deflations. The most damaging interaction appears to be between property price deflations and private debt.
Read more...Until we jettison the neoliberal liturgy repeated daily in the press, universities, central banks, and Treasury departments, Schäuble’s Foibles will continue to rule.
Read more...Economists generally, and especially neoliberal economists, take Jevons’s “proof” that markets maximize utility for all participants at face value, and have exalted it into a principle for the organization of society. The proof doesn’t stand up to close examination.
Read more...Can capital flows mitigate or even eliminate the problems generated by secular stagnation?
Read more...Arthur Berman links overproduction of expensive oil and shale gas to access to cheap financing. In other words, the shale gas boom and bust is in large measure a by-product of ZIRP and QE
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