Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inflation’

Europe May Finally End Its Painful Embrace of Austerity

Posted by hkarner - 9. Oktober 2016

Date: 07-10-2016
Source: The New York Times

Hammond CCPhilip Hammond, Britain’s chancellor of the Exchequer, said this week that the government would borrow more to finance new infrastructure projects.

LONDON — As Europe has grappled with the trauma of a devastating financial and economic crisis, policy makers have consistently relied on one approach to managing the damage — budget austerity.

Shrink government spending by trimming pensions and cutting social programs, the logic runs, and the markets will gain confidence in the tough-minded people in charge. Confident markets make for happy markets. Money will pour in, and good times will roll.

Even as prosperity has remained painfully elusive across much of Europe, leaders have time and again renewed their faith in the virtues of this harsh medicine.

Until now. Europe is re-examining the merits of austerity. Some policy makers are flashing tentative signs that they may be prepared to slacken their grip on public coffers to spur growth and improve the lot of ordinary people suffering joblessness and diminished wealth. In the clearest sign of this shift, the heavily indebted Italy is increasingly inclined to challenge Germany — the guardian of austerity — to loosen European purse strings. Den Rest des Beitrags lesen »

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Wir spielen japanisches Roulette

Posted by hkarner - 24. September 2016

22.09.2016 | 18:25 | Josef Urschitz (Die Presse)Urschitz1

Kolumne Weil Nullzinsen und Gelddrucken weitgehend wirkungslos blieben, probiert Japan jetzt die totale staatliche Manipulation des Zinsmarktes. Ein ziemlich gefährliches Experiment.

Dass die Verschuldung der Industriestaaten auf konventionelle Weise – etwa durch bloßes ausgabenseitiges Sparen – nicht mehr einzufangen ist, gilt unterdessen als gesichert. Dass Staaten zum Zweck des Schuldenabbaus immer stärker auf die Vermögen ihrer Staatsbürger schielen, auch. Was sich ändert, sind die angedachten beziehungsweise angewandten Methoden.

• Begonnen hat es vor ungefähr fünf Jahren mit dem Vorschlag des Internationalen Währungsfonds und des globalen Beratungskonzerns Boston Consulting, die entgleisten Schuldenstände der Industriestaaten mittels einer allgemeinen Vermögensabgabe wieder auf ein tragfähiges Niveau (also ungefähr 60 Prozent des BIPs) zu drücken. Diese Vermögensabgabe hätte beim damaligen Schuldenstand ungefähr 30 Prozent der angehäuften Finanz-, Immobilien- und sonstigen Vermögen ausmachen müssen. Jetzt wäre es natürlich schon deutlich mehr. Eine bestechend einfache (und nach dem Zweiten Weltkrieg in einigen Ländern auch praktizierte) Methode, die in Demokratien in Friedenszeiten aber einen entscheidenden Haken hat: Sie führt wahrscheinlich zum sofortigen Sturz der Regierung. Den Rest des Beitrags lesen »

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Avoiding another Eurozone Crisis while avoiding the Five Presidents‘ Report: Part I

Posted by hkarner - 8. Juni 2016

Mike Wickens 07 June 2016, voxeu

Professor of Economics, University of York and Cardiff Business School; CEPR Research Fellow; CESifo Fellow

The introduction of European Monetary Union in 1999 was intended as a fundamental and permanent change to the economic and political systems of member countries. It was designed to promote economic growth, price stability, full employment, and political integration. So far it has achieved none of these. To the contrary, it has made them all worse; it has resulted in major policy conflicts between member countries, fiscal crises, unsustainable sovereign debt, large current account imbalances, unstable and near insolvent banks, a volatile financial system, and the ECB adopting highly controversial monetary policies outside its original remit which border on fiscal policy. Den Rest des Beitrags lesen »

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So funktioniert der globale Neustart

Posted by hkarner - 27. April 2016

Die Weltwirtschaft hat sich aufgehängt – Goldreserven neu bewerten

Eine Meinungsmache von Daniel Stelter, beyond the obviousStelter Back to Mesopotamia

Was kommt früher? Der deflationäre Crash unseres globalen Schuldenturms oder die inflationäre Geldentwertung? Statt noch auf Jahre in der wirtschaftlichen Eiszeit gefangen zu bleiben, spricht viel für einen globalen Neustart. So könnte er funktionieren.

Die westliche Welt befindet sich in einem gigantischen Ponzi-Schema . In den dreißig Jahren bis zum Ausbruch der Finanzkrise hat sich die Verschuldung der westlichen Welt mehr als verdoppelt. Laut Bank für Internationalen Zahlungsausgleich stieg die reale Verschuldung der Nicht-Finanz-Unternehmen um den Faktor drei, die der Staaten um den Faktor vier und jene der privaten Haushalte um den Faktor sechs.

Seit 2008 hat sich der Trend dank tiefer Zinsen und aktiver Geldpolitik weiter beschleunigt. Laut McKinsey wachsen die Schulden von Staaten (9,3 Prozent per anno), privaten Haushalten (2,8 Prozent) und Nicht-Finanzunternehmen (5,9 Prozent) seit 2007 weltweit weiterhin drastisch und immer noch schneller als die Wirtschaft. Den Rest des Beitrags lesen »

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ECB Will Act Forcefully If Necessary to Fight Low Inflation, Says Praet

Posted by hkarner - 6. April 2016

Date: 05-04-2016
Source: The Wall Street Journal

Central Bank economist says persistent missing of inflation target deeply damaging to economy

“The need for a superior policy mix is no excuse for central banks to be passive when their mandates are under threat,” said Peter Praet, the European Central Bank’s chief economist.

FRANKFURT—An extended period of low inflation in the eurozone would be very harmful, the European Central Bank’s chief economist Peter Praet said Monday, underscoring the monetary authority’s readiness to pump more cash into the economy, if such action were needed to boost price pressures.

The most recent data published last week showed the inflation rate in the currency bloc was minus 0.1% on the year in March, well off the central bank’s medium-term target of just below 2%. Den Rest des Beitrags lesen »

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Unconventional Monetary Policy on Stilts

Posted by hkarner - 1. April 2016

Photo of Nouriel Roubini

Nouriel Roubini

Nouriel Roubini, a professor at NYU’s Stern School of Business and Chairman of Roubini Global Economics, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

APR 1, 2016, Project Syndicate

NEW YORK – With most advanced economies experiencing anemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy – reducing policy rates via open-market purchases of short-term government bonds – to a range of unconventional policies. Although the zero nominal bound on interest rates – previously only a theoretical possibility – had been reached and zero-interest-rate policy (ZIRP) had been implemented, growth remained anemic. So central banks embraced measures that didn’t even exist in their policy toolkit a decade ago. And now they are poised to do so again.

The list of unconventional measures has been extensive. There was quantitative easing (QE), or purchases of long-term government bonds, once short-term rates were already zero. This was accompanied by credit easing (CE), which took the form of central-bank purchases of private or semi-private assets – such as mortgage- and other asset-backed securities, covered bonds, corporate bonds, real-estate trust funds, and even equities via exchange-traded funds. The aim was to reduce private credit spreads (the difference between yields on private assets and those on government bonds of similar maturity) and to boost, directly and indirectly, the price of other risky assets such as equities and real estate. Den Rest des Beitrags lesen »

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Europe’s Emerging Bubbles

Posted by hkarner - 29. März 2016

Photo of Hans-Werner Sinn

Hans-Werner Sinn

Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich, is President of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council. He is the author, most recently, of The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs.

MAR 28, 2016, Project Syndicate

MUNICH – The European Central Bank’s latest policy moves have shocked many observers. While the goal – to prevent deflation and spur growth – is clear, the policies themselves are setting the stage for severe instability.

The policies in question include setting the interest rate on the ECB’s main refinancing operations to zero; raising monthly asset purchases by €20 billion ($22.3 billion) to €80 billion; and pushing the interest rate on money that banks deposit with the ECB further into negative territory – to -0.40%. Moreover, the ECB has launched a new series of four targeted longer-term refinancing operations, which also carry negative interest rates. Banks receive up to 0.4% interest on ECB credit that they take themselves, provided they lend it out to private businesses. Den Rest des Beitrags lesen »

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New Rules for the Monetary Game

Posted by hkarner - 22. März 2016

Photo of Raghuram Rajan

Raghuram Rajan

Raghuram Rajan is Governor of the Reserve Bank of India.

MAR 21, 2016, Project Syndicate

NEW DELHI – Our world is facing an increasingly dangerous situation. Both advanced and emerging economies need to grow in order to ease domestic political tensions. And yet few are. If governments respond by enacting policies that divert growth from other countries, this “beggar my neighbor” tactic will simply foster instability elsewhere. What we need, therefore, are new rules of the game.

Why is it proving to be so hard to restore pre-Great Recession growth rates? The immediate answer is that the boom preceding the global financial crisis of 2008 left advanced economies with an overhang of growth-inhibiting debt. While the remedy may be to write down debt to revive demand, it is uncertain whether write-downs are politically feasible or the resulting demand sustainable. Moreover, structural factors like population aging and low productivity growth – which were previously masked by debt-fueled demand – may be hampering the recovery. Den Rest des Beitrags lesen »

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Low Inflation and Government Debt

Posted by hkarner - 15. März 2016

By on March 14, 2016  RGE EconoMonitor

Government debt typically refers to nominal GDP, generally rising in postwar Oecd countries. Last crisis was an exception, firstly displaying in 2009 a nominal recession affecting 27 out of 34 countries. To understand reasons and implications, I evaluate in Table 2 for six Oecd countries (US, UK, Germany, France, Italy and Spain) how in last crisis the Debt-to-GDP components changed their weight with respect to previous 2000-07 evidence.

Table 1- Cumulated % Changes in the 2008-13 Crisis

Screen Shot 2016-03-14 at 2.36.47 PM

United States

The Deficit/GDP share almost doubles in the 2008-13 years in which the average Debt-to-GDP ratio, about constant before, rises more than 50% with respect to the 2000-07 data. Thus, the deficit contribution to the debt increase jumps from 47% to a massive 87% share.

Looking at annual episodes, the deficit weight is very large in 2002-3 when the debt ratio starts to increase after the 2001 events. However, it is only during the Great Recession that the deficit weight deeply rises because of  expansionary policies, maintained until recovery is achieved. Den Rest des Beitrags lesen »

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Inflation Target Draws Fire From All Sides

Posted by hkarner - 15. März 2016

Date: 14-03-2016
Source: The Wall Street Journal

Economists disagree on whether a 2% goal is too high or too low, while some say adjusting it in either direction would hurt central banks’ credibility

FRANKFURT—Central bankers over the past two decades pursued 2% inflation
as a Goldilocks standard—neither too hot nor too cold. After years of undershooting in advanced economies, some economists now say that target should be adjusted.

Trouble is, they can’t agree whether it should be higher or lower.

One faction says ultralow inflation rates are the result of long-term economic trends like globalization and aging populations that are reducing prices everywhere and that central banks fight at their peril.

Another takes the opposite view, arguing the inflation target should be raised to help central bankers avoid their current fix: With interest rates at or near zero and inflation rates low, they can’t cut the real interest rate—after subtracting inflation—as far below zero as they would like to stimulate the economy. Den Rest des Beitrags lesen »

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