Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inflation’

Time for Helicopter Money?

Posted by hkarner - 4. März 2016

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Kemal Derviş

Kemal Derviş, former Minister of Economic Affairs of Turkey and former Administrator for the United Nations Development Program (UNDP), is a vice president of the Brookings Institution.

MAR 3, 2016, Project Syndicate

WASHINGTON, DC – “Out of ammo? The Economist recently asked of monetary policymakers. Stephen Roach has called the move by major central banks – including the Bank of Japan, the European Central Bank, and the Bank of Sweden – to negative real (and, in some cases, even nominal) interest rates a “futile” effort that merely sets “the stage for the next crisis.” And, at the February G-20 finance ministers meeting, Bank of England Governor Mark Carney reportedly called these policies “ultimately a zero-sum game.” Have the major advanced economies’ central banks – which have borne the burden of sustaining anemic post-2008 recoveries – really run out of options?

It certainly seems so. Central-bank balance sheets have swelled, and policy rates have reached their “near zero” lower bounds. There is plenty of cheap water, it seems, but the horse refuses to drink. With no signs of inflation, and growth still tepid and fragile, many anticipate chronic slow growth, with some even fearing another global recession. Den Rest des Beitrags lesen »

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„Die Überkapazitäten bei Banken gehören abgebaut“

Posted by hkarner - 29. Februar 2016

 Interview Alexander Hahn28. Februar 2016, 12:00, derstandard.at

 Wie es um den Bankensektor bestellt ist und welche Lehren die EZB aus der Stagnation in Japan gezogen hat, erklärt ihr Vertreter Luc Coene. Zudem erläutert er, wie er einen Austritt der Briten aus der EU einstuft.

STANDARD: Haben Sie sich zu Beginn Ihrer Karriere im Jahr 1973 vorstellen können, in einer Welt mit negativen Zinsen zu leben?

Coene: Nein, das habe ich nicht erwartet. Ich habe nicht einmal gedacht, dass so etwas überhaupt möglich ist.

STANDARD: Wodurch ist es möglich geworden?

Coene: Das ist ein Nebeneffekt der extrem niedrigen Inflation. Was soll man tun, wenn man bei null angekommen ist? Daher haben wir entschieden, mit den Zinsen in den negativen Bereich zu gehen. Die Banken horten viel Geld, das wir in der Wirtschaft sehen wollen. Daher drängen wir die Banken auf diese Weise, etwas mit dem Geld zu machen. Den Rest des Beitrags lesen »

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Japan’s Wrong Way Out

Posted by hkarner - 6. Februar 2016

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Adair Turner

Adair Turner, a former chairman of the United Kingdom’s Financial Services Authority and former member of the UK’s Financial Policy Committee, is Chairman of the Institute for New Economic Thinking. His latest book is Between Debt and the Devil.

FEB 5, 2016, Project Syndicate

LONDON – Financial markets were surprised by the Bank of Japan’s recent introduction of negative interest rates on some commercial bank reserves. They shouldn’t have been. The BOJ clearly needed to take some new policy action to achieve its target of 2% inflation. But neither negative interest rates nor further expansion of the BOJ’s already huge program of quantitative easing (QE) will be sufficient to offset the strong deflationary forces that Japan now faces.

In 2013 the BOJ predicted that its QE operations would deliver 2% inflation within two years. But in 2015, core inflation (excluding volatile items such as food) was only 0.5%. With consumer spending and average earnings falling in December, the 2% target increasingly looks out of reach. Den Rest des Beitrags lesen »

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What are market inflation expectations and why do they matter?

Posted by hkarner - 22. Januar 2016

Date: 21-01-2016
Source: The Economist

WITH stockmarkets tumbling and the oil price below $30, some economists are once again worrying about global deflationary pressure. Low inflation can be toxic for economies when interest rates are also low (see a previous Explains). One warning light that is flashing red in America is market expectations of inflation, which have plummeted to lows not seen since the financial crisis. How are market inflation expectations measured, and why do they matter?

There are two popular measures of how much inflation markets expect. One is the difference between the return investors make on government bonds which are indexed to rise with inflation, and the return they make on bonds with no such protection. This gap—known as the treasury inflation protected securities (TIPS) spread—should rise and fall with investors’ reckoning of how much inflation is in the pipeline. Today, the five-year TIPS spread stands at around 1.1%—well below the Fed’s 2% inflation target. The second method relies on the market for interest-rate swaps. These are contracts where one party agrees to pay a fixed interest rate over a given period, in exchange for the other paying the inflation rate. Den Rest des Beitrags lesen »

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Distributional consequences of asset price inflation in the Eurozone

Posted by hkarner - 4. Dezember 2015

Klaus Adam, Panagiota Tzamourani 03 December 2015, voxeu

Professor of Economics, University of Mannheim; Research Professor, Deutsche Bundesbank; Vice Chair, EABCN; Research Fellow, CFS and CEPR

Statistician in the Research Centre, Deutsche Bundesbank

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A Hard Look at a Soft Global Economy

Posted by hkarner - 24. November 2015

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Michael Spence

Michael Spence, a Nobel laureate in economics, is Professor of Economics at NYU’s Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, Senior Fellow at the Hoover Institution at Stanford University, Academic Board Chairman of the Asia Global Institute in Hong Kong, and Chair of the World Economic Forum Global Agenda Council on New Growth Models. He was the chairman of the independent Commission on Growth and Development, an international body that from 2006-2010 analyzed opportunities for global economic growth, and is the author of The Next Convergence – The Future of Economic Growth in a Multispeed World.

NOV 23, 2015, Project Syndicate

MILAN – The global economy is settling into a slow-growth rut, steered there by policymakers’ inability or unwillingness to address major impediments at a global level. Indeed, even the current anemic pace of growth is probably unsustainable. The question is whether an honest assessment of the impediments to economic performance worldwide will spur policymakers into action.

Since 2008, real (inflation-adjusted) cumulative growth in the developed economies has amounted to a mere 5-6%. While China’s GDP has risen by about 70%, making it the largest contributor to global growth, this was aided substantially by debt-fueled investment. And, indeed, as that stimulus wanes, the impact of inadequate advanced-country demand on Chinese growth is becoming increasingly apparent. Den Rest des Beitrags lesen »

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Don’t Fear a Rising Dollar

Posted by hkarner - 16. November 2015

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Anatole Kaletsky

Anatole 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.

NOV 16, 2015, Project Syndicate

LONDON – The US Federal Reserve is almost certain to start raising interest rates when the policy-setting Federal Open Markets Committee next meets, on December 16. How worried should businesses, investors, and policymakers around the world be about the end of near-zero interest rates and the start of the first monetary-tightening cycle since 2004-2008?

Janet Yellen, the Fed chair, has repeatedly said that the impending sequence of rate hikes will be much slower than previous monetary cycles, and predicts that it will end at a lower peak level. While central bankers cannot always be trusted when they make such promises, since their jobs often require them deliberately to mislead investors, there are good reasons to believe that the Fed’s commitment to “lower for longer” interest rates is sincere. Den Rest des Beitrags lesen »

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The Eurozone’s Minsky Conundrum

Posted by hkarner - 12. November 2015

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Daniel Gros

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.

NOV 12, 2015, Project Syndicate

BRUSSELS – Stubbornly low inflation has the European Central Bank worried. But its response – essentially just more quantitative easing – could backfire, exacerbating imbalances and generating serious financial instability.

As it stands, the headline consumer price index in the eurozone hovers around zero, and even core inflation remains below 1% – too far for comfort from the ECB’s target of around 2%. While a new round of weakness in global commodity prices earlier this year contributed to these figures, it does not explain the weakness in longer-term inflation expectations, which have improved little since March, when the ECB started its massive €60 billion ($66.3 billion) per month bond-buying program.

But instead of rethinking its strategy, the ECB is considering doubling down: buying even more bonds and lowering its benchmark interest rate even further into negative territory. This would be a serious mistake. Den Rest des Beitrags lesen »

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The Fed’s Communication Breakdown

Posted by hkarner - 3. November 2015

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Kenneth Rogoff

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. His most recent book, co-authored with Carmen M. Reinhart, is This Time is Different: Eight Centuries of Financial Folly.

NOV 2, 2015, Project Syndicate

CAMBRIDGE – Nothing describes the United States Federal Reserve’s current communication policy better than the old saying that a camel is a horse designed by committee. Various members of the Fed’s policy-setting Federal Open Markets Committee (FOMC) have called the decision to keep the base rate unchanged “data-dependent.” That sounds helpful until you realize that each of them seems to have a different interpretation of “data-dependent, to the point that its meaning seems to be “gut personal instinct.” Den Rest des Beitrags lesen »

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