Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inflation’

Central banking: After the hold, be bold

Posted by hkarner - 25. September 2015

Date: 24-09-2015
Source: The Economist

Nominal GDPIt will take more than patience to free rich economies from the zero-interest-rate world

SOMETIMES doing nothing really is better than doing something. On September 17th the Federal Reserve made the right decision to leave its benchmark interest rate, unchanged since 2008, near zero. With inflation sitting well below the Fed’s 2% target and doubts about China’s economy prevalent (see article), a rise would have been an unnecessary risk.

Yet Janet Yellen, chair of the Fed, will face a similarly tough choice in October—and possibly for many months thereafter. And whenever “lift-off” occurs, financial markets expect rates to stay historically low for years to come. The era of unconventional monetary conditions shows no sign of ending. If the rich world’s central banks are to get back to the normality they crave, their standard toolkit may not suffice. It is time to think more boldly, especially about the idea of inflation targeting.

That is because the usual relationship between inflation and unemployment appears to have broken down. In the short run, economists think these two variables ought to move in opposite directions. High joblessness should weigh on prices; low unemployment ought to push inflation up, by raising wages. Den Rest des Beitrags lesen »

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Janet Yellen: Fed wird Zinsen noch 2015 erhöhen

Posted by hkarner - 25. September 2015

Deutsche Wirtschafts Nachrichten  |  |

Die Chefin der Fed, Janet Yellen, will die Zinsen auf jeden Fall noch 2015 erhöhen. EZB-Banker dagegen räumen ein, dass niemand wisse, was nach einer Abkehr von den Niedrigzinsen geschieht – und kündigen an, in der Euro-Zone bei der Politik des billigen Geldes bleiben zu müssen.

Yellen ccDie Chefin der US-Notenbank, Janet Yellen.

Die US-Notenbank (Fed) wird nach Worten von Fed-Chefin Janet Yellen noch in diesem Jahr mit ihren Zinserhöhungen beginnen. Davon gehe sie wie die meisten ihrer Kollegen im für die Zinspolitik zuständigen Fed-Gremium (FOMC) weiterhin aus, sagte Yellen am Donnerstag in einer Rede an der Universität von Massachusetts in Amherst. Voraussetzung sei allerdings, dass die Inflation stabil bleibe und die heimische Wirtschaft stark genug sei, um die Beschäftigung anzukurbeln. Die allgemeinen konjunkturellen Aussichten nannte sie „solide“. Die jüngsten Entwicklungen der Weltwirtschaft und an den Finanzmärkten würden die Politik der Fed wohl nicht maßgeblich bestimmen, ergänzte Yellen.

Aufgrund der langen Phase extrem niedriger Zinsen drohen Zentralbanken weltweit nach Einschätzung von EZB-Chefvolkswirt Peter Praet Probleme bei einer Normalisierung der Sätze. Wenn die Zinsschraube schließlich wieder angezogen werde, dürfte sich dies schwieriger gestalten als zuvor, sagte Praet am Donnerstag vor Teilnehmern einer Konferenz. Den Rest des Beitrags lesen »

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Why the Fed Buried Monetarism

Posted by hkarner - 23. September 2015

Photo of Anatole KaletskyAnatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

SEP 22, 2015, Project Syndicate

LONDON – The US Federal Reserve’s decision to delay an increase in interest rates should have come as no surprise to anyone who has been paying attention to Fed Chair Janet Yellen’s comments. The Fed’s decision merely confirmed that it is not indifferent to international financial stress, and that its risk-management approach remains strongly biased in favor of “lower for longer.” So why did the markets and media behave as if the Fed’s action (or, more precisely, inaction) was unexpected?

What really shocked the markets was not the Fed’s decision to maintain zero interest rates for a few more months, but the statement that accompanied it. The Fed revealed that it was entirely unconcerned about the risks of higher inflation and was eager to push unemployment below what most economists regard as its “natural” rate of around 5%. Den Rest des Beitrags lesen »

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Oil prices, inflation expectations, and monetary policy

Posted by hkarner - 17. September 2015

Nathan Sussman, Osnat Zohar 16 September 2015, voxeu

Director of research and a member of the monetary policy committee, Bank of Israel; professor of economics, Hebrew University in Jerusalem

Economist at the Research Department, Bank of Israel

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Inflation, the Fed, and the Big Picture

Posted by hkarner - 4. September 2015

Carmen Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.Reinhart CC

SEP 3, 2015, Project Syndicate

CAMBRIDGE – Inflation – its causes and its connection to monetary policy and financial crises – was the theme of this year’s international conference of central bankers and academics in Jackson Hole, Wyoming. But, while policymakers’ desire to be prepared for potential future risks to price stability is understandable, they did not place these concerns in the context of recent inflation developments at the global level – or within historical perspective.

For the 189 countries for which data are available, median inflation for 2015 is running just below 2%, slightly lower than in 2014 and, in most cases, below the International Monetary Fund’s projections in its April World Economic Outlook. As the figure below shows, inflation in nearly half of all countries (advanced and emerging, large and small) is now at or below 2% (which is how most central bankers define price stability).

image: https://www.project-syndicate.org/flowli/image/reinhart2chart/original/english

Most of the other half are not doing badly, either. In the period following the oil shocks of the 1970s until the early 1980s, almost two-thirds of the countries recorded inflation rates above 10%. According to the latest data, which runs through July or August for most countries, there are “only” 14 cases of high inflation (the red line in the figure). Venezuela (which has not published official inflation statistics this year) and Argentina (which has not released reliable inflation data for several years) figure prominently in this group. Iran, Russia, Syria, Ukraine, and a handful of African countries comprise the rest.

The share of countries recording outright deflation in consumer prices (the green line) is higher in 2015 than that of countries experiencing double-digit inflation (7% of the total). Whatever nasty surprises may lurk in the future, the global inflation environment is the tamest since the early 1960s.

Indeed, the risk for the world economy is actually tilted toward deflation for the 23 advanced economies in the sample, even eight years after the onset of the global financial crisis. For this group, the median inflation rate is 0.2% – the lowest since 1933. The only advanced economy with an inflation rate above 2% is Iceland (where the latest 12-month reading is 2.2%). Den Rest des Beitrags lesen »

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What the general public knows about monetary policy

Posted by hkarner - 23. August 2015

Carin van der Cruijsen, David-Jan Jansen, Jakob de Haan 23 August 2015, voxeu

Head of Research, De Nederlandsche Bank (DNB); Professor of Political Economy, University of Groningen

Researcher at De Nederlandsche Bank

Researcher, De Nederlandsche Bank

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Low inflation in the Eurozone

Posted by hkarner - 16. August 2015

Stefano Neri, Stefano Siviero 15 August 2015, voxeu

Stefano Neri

Unit Head, Monetary Policy Unit, Monetary Analysis Division, Banca d’Italia

Head of the Economic Outlook and Monetary Policy Directorate, Bank of Italy

Low inflation: An EZ-wide issue

Eurozone inflation fell steadily in 2013 and 2014, reaching negative territory at the end of 2014 – year-on-year inflation was ‐0.2% in December and core inflation hit the historical low at 0.7% in the same month (Figure 1). Inflation fell to historically low levels not only in the countries that had been severely affected by the sovereign debt crisis, but also in those less directly influenced (Figure 2). In December 2014, no country of the Eurozone registered an inflation rate above 1%; in 12 countries out of 18 (Lithuania joined 1 January 2015) consumer price dynamics were negative. Formal econometric analysis confirms that these developments reflected mostly common rather than country-specific shocks (Delle Monache et al 2015). Den Rest des Beitrags lesen »

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No, Inflation Doesn’t Erode the Burden of Debts

Posted by hkarner - 11. August 2015

Posted on August 10, 2015 by , Naked Capitalism

By Nathan Tankus, a writer from New York City. Follow him on Twitter at @NathanTankus

It is commonly argued that inflation erodes debts. However, the usual defenses amount to little more then circular logic. Take this for example from Paul Krugman

In major economies, very few debtors have received a break. And far from being inflated away, the burden of debt has been aggravated by falling inflation, which is running well below target in America and near zero in Europe.

The source of the confusion here is that it is popular do divide key economic variables by abstract measures of the prices across the economy (such as the Consumer Price Index). This makes sense sometimes but in other situations become nonsensical. Debt is one such example. In the United States most people have debts denominated in U.S. Dollars. A useful proxy for the burden of debt is the ratio between an individual’s or sector’s nominal debt to its nominal income. Den Rest des Beitrags lesen »

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EZB-Chefökonom: “Niedrige Zinsen sind nur kurzfristige Belastung”

Posted by hkarner - 14. Juni 2015

Interview | András Szigetvari, derstandard.at, 13. Juni 2015, 08:00

Praet ccLangfristig sind die derzeitigen Niedrigzinsen für alle ein Gewinn, sagt EZB-Chefökonom Peter Praet, auch für Sparer

STANDARD: Die EZB mischt sich seit Krisenausbruch intensiv in politische Debatten ein, schreibt Ländern vor, was sie tun sollen. Überschreiten Sie nicht Ihr Mandat?

Praet: Die EZB trifft geldpolitische Entscheidungen, um ihr Ziel, die Gewährleistung von Preisstabilität, zu erreichen. Wir äußern uns hörbar zu Strukturreformen, wenn dies im Rahmen unseres vertraglich festgeschriebenen Mandats für notwendig gehalten wird. In dieser Hinsicht unterscheiden wir uns beispielsweise von der Federal Reserve in den USA, die sich nie an solchen Debatten beteiligen würde.

STANDARD: Das ist für viele ein Problem.

Praet: Oft wird uns geraten, uns allein auf Geldpolitik zu konzentrieren. Aber in einer Währungsunion haben die Länder die Flexibilität verloren, die ein eigener Wechselkurs bietet. Solide Governance und effektive Institutionen sind also von zentraler Bedeutung. Das gilt für die Arbeits- und Gütermärkte, die Justiz und für die Verwaltungsbehörden. Das ist notwendig für eine wirksamere Geldpolitik in einer Währungsunion, und deshalb sagen wir den Regierungen, dass strukturelle Reformen wichtig sind. Dabei ist es für uns nicht von Interesse, wie Länder die Reformen durchführen. Das ist ihnen überlassen. Uns interessiert, ob sie erfolgreich sind. Allerdings möchte ich selbstkritisch anmerken, dass unsere Botschaften in der Vergangenheit zu sehr wie ein Mantra klangen. Den Rest des Beitrags lesen »

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The QE Placebo

Posted by hkarner - 11. Juni 2015

Date: 10-06-2015
Source: Project Syndicate

Daniel Gros is Director of the Brussels-based Center for European Policy Studies. He has worked for the International Monetary Fund, and served as an economic adviser to the European Commission, the European Parliament, and the French prime minister and finance minister. He is the editor of Economie Internationale and International Finance.

BRUSSELS – It has now been nearly half a year since the European Central Bank declared its intention to buy some €1.1 trillion ($1.3 trillion) worth of eurozone bonds. When it first announced the so-called “extended asset-purchase program” in January, the ECB emphasized that it was only expanding an existing program, under which it had been buying modest quantities of private-sector bonds, to cover government paper. But this pretense of continuity was just that: a pretense.

In reality, by purchasing large volumes of government bonds, the ECB was crossing the Rubicon; after all, it is explicitly prohibited from financing governments. The ECB’s defense was that that the program was the only way to move inflation closer to its target of approximately 2%. Moreover, it pointed out, it was merely following the example of other major central banks, including the Bank of England, the Bank of Japan, and especially the US Federal Reserve, whose program of quantitative easing (QE) entailed the purchase of more than $2 trillion worth of long-term securities from 2008 to 2012. Den Rest des Beitrags lesen »

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