What are the risks to growth?

July 19, 2010

Mike Dicks, chief economist and blogger at Barclays Wealth, has identified what he sees as the three biggest problems facing the global economy, and conveniently found that they are linked with three separate regions.

Some good econ reads from the Blogosphere

July 6, 2010

From the econ blogosphere:

UK BUDGET
– The libertarian Adam Smith Institute says here that the UK government should look at every government job, programme and department, and ask whether they are really needed. “Do we really need new school buildings….? Should taxpayers really stump up for free bus passes, or winter fuel and Chistmas bonuses for wealthy pensioners?”

Watch price of booze for inflation tips, says Cleveland Fed

May 19, 2010

What do the price of infants’ clothing and alcohol have in common? They are “sticky prices” that rarely change.

Inflation expectations: It depends on how you ask

April 20, 2010

How high or low are the public’s expectations for future inflation? It depends on how you ask the question, according to New York Fed research.
The closely-watched Michigan Survey of Consumers asks questions about “prices in general” to measure expected and perceived inflation.
But New York Fed researchers found survey questions that use the word ‘prices’ instead of ‘inflation rate’  “may bias expectations upwards.”
Responses to questions about “prices in general,” were significantly higher than responses for “the rate of inflation” when asking for expectations of the next 12 months, they found.
Why?  Questions that used the word ‘prices’  “focused respondents relatively more on personal price experiences and elicited expectations that were more strongly correlate to the expected price increases for food and transportation,” the researchers wrote.
The Federal Reserve keeps a close eye on inflation expectations, as they can become a self-fulfilling prophecy.
Read the full report here

Confidence vs. reality on Europe’s fiscal front

By Michael Winfrey
March 16, 2010

What do Poland, the European Union’s brightest economic light, and Greece, its dimmest, have in common? Both have plans to cut their budget deficits to the Union’s  prescribed 3 percent level by 2012, and both of those plans depend on a lot of ifs.

Mission not accomplished at central banks

March 15, 2010

U.S.  and Japanese monetary policy does not always move hand in glove, but meetings of  the countries’ respective central banks in the next few days are likely to spell out the same thing — that the job of economic recovery is by no means over.

Unleashing the forces of Hellas

February 26, 2010

IMG_4640

Greece is a country that has always punched above its weight. Its population, after all, is barely more than Chad’s. But it has rarely grabbed as much attention as now with a debt crisis that has gone as far as having some people predict the downfall of the whole house of euro.

Are CDS markets the euro zone’s iceberg?

February 15, 2010

icebergIn an unfortunate turn of phrase at the height of his country’s current debt crisis, Greek Finance Minister George Papaconstantinou on Monday compared his government’s Herculean task in slashing deficits and debts as akin to changing the course of the Titanic. Sadly, we all know where the great “unsinkable” ended up almost a century ago and I’m sure,  given the chance, Mr Papaconstantinou would have chosen another metaphor. But if the Greek economy (or perhaps the euro zone at large?) is to be cast as the Titanic, then what is its potential iceberg?

Political economy and the euro

February 8, 2010

The reality of  ‘political economy’  is something that irritates many economists – the ”purists”, if you like. The political element is impossible to model;  it often flies in the face of  textbook economics;  and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow.  And political economy is all pervasive in 2010 – Barack Obama’s proposals to rein in the banks is rooted in public outrage; reading China’s monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring’s UK election. The list is long, the outcomes uncertain, the market risk high.

Rapping with Hayek and Keynes

February 8, 2010

Gettin’ down with the dismal science