Föhrenbergkreis Finanzwirtschaft

Nach den kristallklaren Aussagen des Föhrenbergkreises zur Finanzwirtschaft aus dem Jahr 1999 gibt es jetzt einen neuen Arbeitskreis zum Thema.

Mit ‘austerity’ getaggte Beiträge

Needed in Europe: More Inflation

Geschrieben von hkarner - 27. Januar 2014

Date: 26-01-2014
Source: The Wall Street Journal

Stagnant Prices Restrains Recovery in Weaker ‘Peripheral’ Countries Such as Spain, Italy

As Europe’s economy recovers from its crisis, afflicted countries such as Spain and Italy are trying to pare their debts while also becoming more internationally competitive.

The trouble is, it’s hard to do both at once. And the euro zone’s weak inflation is making it even harder.

So, even as the world’s economic elite welcomed a strengthening global recovery at last week’s gabfest in Davos, Switzerland, the euro zone’s wounds are likely to heal only very slowly—and might even reopen.

Here’s why:

Until the crisis, the euro zone’s “periphery” countries, mostly in Southern Europe, had higher inflation than the region’s “core” economies around Germany. The periphery countries’ products became too expensive, often leading to unsustainably large trade deficits paid for by borrowing from abroad. Den Rest des Beitrags lesen »

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WFC Studie: Sparpolitik kostet jährlich 2,3 Billionen US-Dollar

Geschrieben von klausgabriel - 15. Januar 2014

Handelsblatt.com, 14/1

Hamburg, 14.01.2014 – Öffentliche Sparpolitik führt dazu, dass Arbeitskräfte und Produktionsmöglichkeiten ungenutzt bleiben. Eine Studie<http://worldfuturecouncil.us7.list-manage.com/track/click?u=fdf5f8a04d91dd7a784016d69&id=42cb4832b1&e=94b5679fae> der Stiftung World Future Council (WFC) gibt den Wert der dadurch weltweit verlorenen Produktion mit rund 2,3 Billionen US-Dollar an. Das entspricht dem Bruttoinlandsprodukt von Großbritannien. Allein die Eurozone verliert durch die Austeritätspolitik rund 580 Milliarden Euro.

Jakob von Uexküll, Gründer des World Future Council und des Alternativen Nobelpreises, kommentiert das Ergebnis: „Angesichts der gewaltigen Herausforderungen von Klimaschutz und Armutsüberwindung ist es absurd, dass wir so große ökonomische Potenziale ungenutzt lassen.“ Den Rest des Beitrags lesen »

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The Great Malaise Drags On

Geschrieben von hkarner - 6. Januar 2014

Date: 06-01-2014
Source: Project Syndicate
Stiglitz CC

JOSEPH E. STIGLITZ

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, was Chairman of President Bill Clinton’s Council of Economic Advisers and served as Senior Vice President and Chief Economist of the World Bank. His most recent book is The Price of Inequality: How Today’s Divided Society Endangers our Future.

NEW YORK – There’s something dismal about writing year-end roundups in the half-decade since the eruption of the 2008 global financial crisis. Yes, we avoided a Great Depression II, but only to emerge into a Great Malaise, with barely increasing incomes for a large proportion of citizens in advanced economies. We can expect more of the same in 2014.

In the United States, median incomes have continued their seemingly relentless decline; for male workers, income has fallen to levels below those attained more than 40 years ago. Europe’s double-dip recession ended in 2013, but no one can responsibly claim that recovery has followed. More than 50% of young people in Spain and Greece remain unemployed. According to the International Monetary Fund, Spain can expect unemployment to be above 25% for years to come. Den Rest des Beitrags lesen »

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The euro debate Greece is not having

Geschrieben von hkarner - 3. Dezember 2013

Macropolis, 20/11, Yiannis Mouzakis
You may be amongst those who are not convinced of the devastating effect that the policy mix
and pace of fiscal contraction in Greece is having on society. If so, you may subscribe to the
official line trotted out by the country’s lenders that the program is helping the country regain
competitiveness and the economy fix its external imbalances. This is the greater cause that is
demanding such a sacrifice. There is no gain without pain, goes the argument.
However, more than three years into the troika program there is very little evidence that one
of these key objectives has actually been achieved. It is extremely doubtful whether the Greek
economy is indeed regaining part of the competitiveness it lost after joining the euro.

There is no dispute that Greece’s current account, from a staggering deficit of close to 35
billion euros in 2008, is nearing balance. But the majority of the correction of the trade deficit
is covered by a collapse in imports due to domestic demand almost evaporating after three
years of austerity and disposable incomes plummeting by almost a third.
It is a fact that Greek exports are on the rise and that 2013 will be a record year for tourism
but Greece’s total exports will still fall short of the 56-billion-euro level they reached in 2008, a
time when the country was uncompetitive, if you believe the prevailing argument.
In a June document evaluating its involvement in the Greek program back in May 2010, the IMF
includes the chart below, which shows that although labour costs have nosedived since 2010,
prices — which really reflect how competitive you are — have hardly moved to cover the lost
competitiveness. Den Rest des Beitrags lesen »

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A Fiscal Scold, Merkel Softens Tone at Home

Geschrieben von hkarner - 3. November 2013

Date: 02-11-2013
Source: The New York Times

Merkel ccChancellor Angela Merkel is being pushed to accept policies for Germany that would include its first minimum wage and sharply increased spending on infrastructure, education and energy.

BERLIN — A German government that has for years preached austerity as the sole path to prosperity, both at home and abroad, is poised to break open its pocketbook.

As Chancellor Angela Merkel, known for her insistence on fiscal rectitude, negotiates for her third term with her only viable coalition partner, the Social Democrats, she is being pushed to accept a range of leftist policies that would sharply increase government spending.

Among the measures being demanded are a minimum wage — the country’s first — of $11.50 an hour, equal pensions in the east and the west, equal pay for men and women, higher child care payments, a tax increase for the wealthy, and sharply increased funding for infrastructure, education and energy.

There is little change for the moment in Germany’s attitude toward its neighbors. While Greece, Italy, Spain and even France are hacking away at long-cherished parts of their social safety net to meet the demands of Berlin and their international creditors, Ms. Merkel, a conservative, and her unyielding finance minister, Wolfgang Schäuble, are resisting any sort of redistribution of funds within the euro zone. Den Rest des Beitrags lesen »

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The Failure of Free-Market Finance

Geschrieben von hkarner - 6. September 2013

  Turner CCJust a brilliant analysis! Yes, it is that simple! (hfk) 

Date: 05-09-2013
Source: Project Syndicate, Adair Turner

LONDON – Five years after the collapse of the US investment bank Lehman Brothers, the world has still not addressed the fundamental cause of the subsequent financial crisis – an excess of debt. And that is why economic recovery has progressed much more slowly than anyone expected (in some countries, it has not come at all).

Most economists, central bankers, and regulators not only failed to foresee the crisis, but also believed that financial stability was assured so long as inflation was low and stable. And, once the immediate crisis had been contained, we failed to foresee how painful its consequences would be.

Official forecasts in the spring of 2009 anticipated neither a slow recovery nor that the initial crisis, which was essentially confined to the United States and the United Kingdom, would soon fuel a knock-on crisis in the eurozone. And market forces did not come close to predicting near-zero interest rates for five years (and counting).

One reason for this lack of foresight was uncritical admiration of financial innovation; another was the inherently flawed structure of the eurozone. But the fundamental reason was the failure to understand that high debt burdens, relentlessly rising for several decades – in the private sector even more than in the public sector – were a major threat to economic stability. Den Rest des Beitrags lesen »

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Der Euro ist nicht zu retten

Geschrieben von hkarner - 5. September 2013

Helmut Kohl willigte in die Währung ein, um die Europäisierung voranzutreiben. Doch das Gegenteil trat ein. Was wir erleben, ist die Isolierung Deutschlands Von Dominik Geppert

Dieser Artikel erschien in der Zeitung  DIE WELT. 5/9

DIE WELT 

Bei allem Enthusiasmus für die europäische Einigung war Bundeskanzler Kohl sich bewusst, dass sein Entgegenkommen in der Währungsfrage gegen traditionelle deutsche Positionen verstieß. Er habe seine Entscheidung “gegen deutsche Interessen” getroffen, sagte er dem amerikanischen Außenminister James Baker drei Tage nach dem entscheidenden EG-Gipfel in Straßburg im Dezember 1989. Aber der Schritt sei politisch wichtig gewesen, weil Deutschland Freunde brauche.

Die gegenwärtige Krise hat diese Überlegung als Trugschluss entlarvt. Statt durch die Aufgabe der DMark Freunde zu gewinnen, sieht sich Deutschland in Europa Feindseligkeit und Misstrauen gegenüber, wie zu keinem Zeitpunkt seit dem Ende des Zweiten Weltkriegs. Die Politik der Einbindung und Selbsteinbindung Deutschlands stößt an ihre Grenzen – nicht durch bösen Willen, sondern weil dem Dilemma der deutschen Größe durch diese Form der Europäisierung nicht beizukommen ist. Den Rest des Beitrags lesen »

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Europe’s False Recovery

Geschrieben von hkarner - 18. August 2013

Date: 17-08-2013
Source: TIME

When is a recovery not a recovery? When it comes in the euro zone.

On Wednesday, Europe officially vaulted out of its longest recession since the creation of the single currency, growing 0.3% after shrinking exactly that much in the first quarter. While that still only adds up to 0% growth, European officials are already lauding their “success” and attempting to rebrand their much maligned economic formula of austerity. “The data … supports, in my view, the fundamentals of our crisis response: a policy mix where building a stability culture and pursuing structural reforms supportive of growth and jobs go hand in hand,” said Olli Rehn, the E.U.’s Commissioner for Economic and Monetary Affairs.

The markets, desperate for a bit of good news in Europe, are now hoping for more: investors are more bullish on euro-zone equities than at any time since January 2008, according to a monthly fund managers’ poll from Bank of America Merrill Lynch. But a better European stock market presupposes continued economic growth. And if you look closely as the last quarter recovery, it’s built on shaky foundations, like a one-off weather-related rebound (German and French construction picked up after a long, slow, cold winter), as well as a boost in export demand from outside Europe that German manufacturers themselves say probably won’t continue. Credit is still tight, which will constrain business investment, and while consumer spending has picked up a bit, French and German shoppers can’t make up for a lack of demand in countries like Spain, Italy and the Netherlands, which are still in recession. Meanwhile, some 20 million people in the euro zone are still out of a job — a record 12.1%. That’s unlikely to change anytime soon. Den Rest des Beitrags lesen »

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Overt Money Financing of Fiscal Deficits: Navigating Article 123 of the Lisbon Treaty

Geschrieben von hkarner - 23. Juli 2013

Authors: Biagio Bossone & Richard Wood · July 22nd, 2013 · RGE EconoMonitor

This column finds that current monetary and fiscal policies are misplaced and are largely impotent. It is argued that greater coordination between monetary and fiscal policy could provide substantial policy synergies needed to stimulate economic growth without increasing public debt. Practical policy options are reviewed.

Current austerity and quantitative easing policies are proving ineffective in the new era of historically low interest rates, high public debt, deleveraging, credit and liquidity crises, and recession/depression.

Recovery is failing to take hold with sufficient force, and some countries are sliding deeper into depression. Deflationary tendencies remain strong and unemployment is entrenched.

Austerity

Many economies are entrapped in austerity straitjackets. While effective in certain circumstances – for example, when the economy is growing strongly or can rely on external growth – austerity fails to achieve its own objectives if applied during recession/depression. In such circumstances, austerity is counter-productive: fiscal revenues contract, budget deficits increase, and public debts are pushed upward. Austerity aggravates recession or depression. Aggregate demand and output are dragged down, unemployment rises, and where price rigidities prevail real incomes fall. Prosperity is denied, confidence collapses, and wealth is ruined. Den Rest des Beitrags lesen »

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When is the time for austerity?

Geschrieben von hkarner - 22. Juli 2013

Alan Taylor University of California), 20 July 2013, voxeu

Recent austerity policies have been guided by ideology rather than research. This column discusses research that reconciles disparate estimates of fiscal multipliers in the literature. It finds that common identification assumptions are problematic. Matching methods based on propensity scores show how contractionary austerity really is, especially in economies operating below potential.

In 1809, on a battlefield in Portugal, the first recognisable medical trial evaluated bloodletting on a sample of 366 soldiers allocated into treatment and control groups. The cure was shown to be bogus. It was the beginning of the end of pre-modern medicine. Yet problems of allocation bias— i.e., ‘insufficient randomisation’ – pervaded poor experimental designs until the landmark British Medical Research Council trials of patulin and streptomycin in the 1940s. Since then the randomised controlled trial has been the foundation of evidence-based medicine.

Is a similar evidence-based macroeconomics possible? One pressing and highly topical context is the effects of austerity on output (see Alesina and Ardagna 2010, Guajardo et al. 2011). This might seem like a natural and helpful line of debate. Natural, since experimental techniques drawn from medicine have been fruitfully incorporated in other fields of economics. Helpful, for some, since more clarity on fiscal impacts might be welcome, given the uproar over European and UK austerity programs. Den Rest des Beitrags lesen »

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