Posted by hkarner - 18. Dezember 2014
A smart analysis, typical Economist! (hfk)
Source: The Economist
The world economy in 2015 will carry troubling echoes of the late 1990s
A FINANCIAL crash in Russia; falling oil prices and a strong dollar; a new gold rush in Silicon Valley and a resurgent American economy; weakness in Germany and Japan; tumbling currencies in emerging markets from Brazil to Indonesia; an embattled Democrat in the White House. Is that a forecast of the world in 2015 or a portrait of the late 1990s?
Recent economic history has been so dominated by the credit crunch of 2008-09 that it is easy to forget what happened in the decades before. But looking back 15 years or so is instructive—in terms of both what to do and what to avoid.
Then, as now, the United States was in the vanguard of a disruptive digital revolution. The advent of the internet spawned a burst of innovation and euphoria about America’s prospects. By 1999 GDP was rising by more than 4% a year, almost twice the rich-country average. Unemployment fell to 4%, a 30-year low. Foreign investors piled in, boosting both the dollar and share prices. The S&P 500 index rose to almost 30 times earnings; tech stocks went wild.
The optimism in America stood in stark contrast to gloom elsewhere, as it does today. Japan’s economy had slipped into deflation in 1997. Germany was “the sick man of Europe”, its firms held back by rigid labour markets and other high costs. Emerging markets, having soared ahead, were in crisis: between 1997 and 1999 countries from Thailand to Brazil saw their currencies crash as foreign capital fled and dollar-denominated debts proved unpayable. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: china, Economist, Economy, Europe, Japan, Recession, USA | Leave a Comment »
Posted by hkarner - 3. Dezember 2014
Source: Project Syndicate
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.
CAMBRIDGE – Japanese Prime Minister Shinzo Abe’s recent policy decisions – to increase monetary stimulus dramatically, to postpone a consumption-tax increase, and to call a snap election in mid-December – have returned his country to the forefront of an intense policy debate. The problem is simple: How can aging advanced economies revive growth after a financial crisis? The solution is not.
It is now clear that the first round of Abe’s reforms – known as “Abenomics” – has failed to generate sustained inflation. Hopes for continued recovery have now given way to two consecutive quarters of negative growth. The question is whether Abenomics 2.0 will put Japan’s economy back on the path to renewed prosperity.
My own view is that the “three arrows” of Abenomics 1.0 basically had it right: “whatever it takes” monetary policy to restore inflation, supportive fiscal policy, and structural reforms to boost long-run growth. But, though the central bank, under Governor Haruhiko Kuroda, has been delivering on its side of the bargain, the other two “arrows” of Abenomics have fallen far short. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: Abenomics, Deflation, Europe, Finanzkrise, Japan, Project Syndicate, Rogoff | Leave a Comment »
Posted by hkarner - 3. Dezember 2014
Source: Project Syndicate
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.
NEW YORK – The recent decision by the Bank of Japan to increase the scope of its quantitative easing is a signal that another round of currency wars may be under way. The BOJ’s effort to weaken the yen is a beggar-thy-neighbor approach that is inducing policy reactions throughout Asia and around the world.
Central banks in China, South Korea, Taiwan, Singapore, and Thailand, fearful of losing competitiveness relative to Japan, are easing their own monetary policies – or will soon ease more. The European Central Bank and the central banks of Switzerland, Sweden, Norway, and a few Central European countries are likely to embrace quantitative easing or use other unconventional policies to prevent their currencies from appreciating.
All of this will lead to a strengthening of the US dollar, as growth in the United States is picking up and the Federal Reserve has signaled that it will begin raising interest rates next year. But, if global growth remains weak and the dollar becomes too strong, even the Fed may decide to raise interest rates later and more slowly to avoid excessive dollar appreciation.
The cause of the latest currency turmoil is clear: In an environment of private and public deleveraging from high debts, monetary policy has become the only available tool to boost demand and growth. Fiscal austerity has exacerbated the impact of deleveraging by exerting a direct and indirect drag on growth. Lower public spending reduces aggregate demand, while declining transfers and higher taxes reduce disposable income and thus private consumption. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: austerity, Central Banks, currency, ECB, Euro, Japan, Project Syndicate, QE, Roubini | Leave a Comment »
Posted by hkarner - 25. November 2014
Eine aggressivere Notenbank, höhere Inflationsraten und mehr staatliche Ausgaben. Bei einer Konferenz in Wien kritisierten Ökonomen Europas Politik scharf
Wien – Die Oesterreichische Nationalbank hat sich einige namhafte Ökonomen zu ihrer jährlichen Konferenz geladen, bei der es um den Stand der wirtschaftlichen Integration Europas geht. Aus Höflichkeit dem Gastgeber gegenüber haben sie sich mit Kritik an der jetzigen Wirtschaftspolitik Europas jedenfalls nicht zurückgehalten. Einer der anerkanntesten Geldpolitikexperten der Branche, Lars Svensson, legt der Europäischen Zentralbank nahe, einen Gang zuzulegen. Sie solle “alles” tun, um für mehr Inflation zu sorgen. “In der Hoffnung, dass irgendetwas davon funktioniert.”
Dazu gehöre es auch, riskantere Wertpapiere aufzukaufen. Der ehemalige Vizepräsident der schwedischen Zentralbank saß neben OeNB-Governeur Ewald Nowotny, als er das Thema ansprach. Nowotny hat sich im EZB-Rat laut gut informierten Kreisen gegen den Aufkauf von riskanteren Papieren aus Zypern und Griechenland ausgesprochen. Dass das japanische Pendant zur EZB, die Bank of Japan, nun einen aggressiveren Kurs einschlägt, begrüßt Svensson. “Wir wissen nicht, ob das Erfolg hat. Jetzt ist aber nicht die Zeit für Vorsicht, sondern für Maßnahmen.” Die potenziellen Vorteile seien viel größer als die potenziellen Kosten. Auch eine höhere Inflationsrate könnte Europa dabei helfen, den Berg an Schulden, den viele Länder mit sich tragen, abzubauen.
Posted in Artikel | Getaggt mit: ÖNB, Central Banks, ECB, Japan, Standard, Svensson | Leave a Comment »
Posted by hkarner - 24. November 2014
Japan’s recession is not paving the way for sustained growth. It is prolonging new debt and liquidity and thus deteriorating fiscal discipline.
In the last quarter, Japan’s economy fell into recession. In the West, it was characterized as “unexpected.”
The realities are precisely the reverse. With its third ’lost decade,’ Japan has entered an era of massive monetary expansion that it not adequately supported by the fundamentals of its economy.
Any premature exit from more fiscal stimulus and monetary easing will backfire, as the last two quarters have now demonstrated. So Tokyo will seek to resolve its gigantic debt challenge by taking more debt.
That’s not the solution but part of the problem.
From contraction to recession
In the three months through September, Japan’s GDP contracted by an annualized 1.6 percent, as a result of the sales tax hike in April.
Consumption accounts for some 60 percent of the Japanese economy, but remains fragile. When household assets rose to a record in late June, Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) saw it as a sign of success. In reality, the 3 percent tax hike and the Bank of Japan’s (BOJ) historical easing have boosted living costs faster than incomes.
Companies are reluctant to invest, even as major firms enjoy record profits. A year ago, there was much talk about “Japan is back.” But even though the yen has slid 13 percent against dollar, exports added only 0.1 percent to GDP. Instead, the GDP is driven by unsustainable government spending. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: Abenomics, Japan, RGE Monitor, Steinbock | Leave a Comment »
Posted by hkarner - 23. November 2014
Source: The Wall Street Journal
Policy Makers’ Actions Send Markets Higher, but Raise New Questions
Are China’s surprise rate cuts and ECB President Mario Draghi’s comments on potentially additional stimulus enough to boost global growth?
In three striking developments over the past two weeks, major central banks have once again placed themselves at the center of efforts to pump up a flagging global economy, sending markets higher but raising new questions about whether policy makers are finding the right solutions to nagging economic problems.
The People’s Bank of China Friday announced a surprise reduction in benchmark lending and deposit rates, the first cut since 2012 after other measures to boost faltering economic growth failed. European Central Bank President Mario Draghi said Friday the ECB is ready to take new measures to boost inflation, now near zero, his strongest signal to date that it is getting closer to buying a broader swath of eurozone bonds. That followed an announcement last week by the Bank of Japan that it would ramp up its own securities-purchase program known as quantitative easing, or QE, after the Japanese economy fell into recession.
The moves are in one sense an endorsement of the Federal Reserve’s approach to postcrisis economics, just as the U.S. central bank is pulling away from its own low interest-rate policies. The Fed last month ended a six-year experiment with bond purchases and has begun early-stage discussions about when to start raising short-term interest rates as the U.S. economy improves. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: Central Banks, china, ECB, Japan, QE, WSJ | Leave a Comment »
Posted by hkarner - 20. November 2014
von Jörg Hackhausen und Jan Mallien, handelsblatt.com
19.11.2014, 16:08 Uhr
Mit einer historischen Geldschwemme kämpft Japan gegen die Dauerkrise. Doch es hilft alles nichts. Die japanische Wirtschaft rutscht wieder in die Rezession ab. Ein Vorgeschmack darauf, was Europa erwartet.
Japan wankt: Die historische Geldschwemme verpufft – und die Wirtschaft schrumpft.
Düsseldorf. Er wurde gefeiert als Superman, als Wunderheiler. Shinzo Abe hatte den Japanern versprochen, er werde das Land aus der Lethargie reißen. Und zunächst schien es tatsächlich so, als könne der Ministerpräsident sein Versprechen einhalten. Er ließ Geld in gigantischem Ausmaß drucken, er bürdete dem hochverschuldeten Land neue Schulden auf. Ein Wirtschaftswunder sollte her, koste es, was es wolle. Heute – fast zwei Jahre später – wird klar: Es war nur ein Strohfeuer. Japan steckt schon wieder in der Rezession. Im dritten Quartal ist die Wirtschaft des Landes erneut geschrumpft. Ein Schock.
„Diese Politik musste scheitern und sie ist gescheitert“, urteilt Jörg Krämer, Chefvolkswirt der Commerzbank. „Auf Dauer lässt sich das Wachstum nicht durch das Anwerfen der Notenpresse erhöhen.“
Die drittgrößte Volkswirtschaft der Welt steckt seit mehr als zwei Jahrzehnten fest in einer verhängnisvollen Kombination aus sinkenden Preisen und schrumpfender Wirtschaft. Zudem ist der Staat so hoch verschuldet wie kein anderes Industrieland. Die Schuldenquote liegt bei 240 Prozent der Wirtschaftsleistung. Die Verbindlichkeiten müssen von einer alternden Bevölkerung zurückbezahlt werden. Nicht wenige Beobachter fürchten, dass auch in Europa eines Tages „japanische Verhältnisse“ drohen. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: Abenomics, Debt, Growth, Handelsblatt, Japan, Krugman | Leave a Comment »
Posted by hkarner - 19. November 2014
Well David Cameron, perhaps learning a lesson from his stockbroker father, got his timing right.
On the morning that he warns (in the Guardian) that red lights are flashing on the dashboard of the global economy, Japan announces that it has unexpectedly crashed into recession.
Japan is still the world’s third biggest economy. And its economic contraction, which caught markets by surprise, coincides with the prolonged flatlining of the eurozone (which was confirmed on Friday) and what looks like a long-term deceleration of growth in China.
Apart from India and Mexico, most of the rest of the developing world and the so-called Brics – notably Brazil and Russia – are finding the going much tougher.
There are two apparent beacons in the gloom – the UK and US, where annual growth in national income is around 3%.
So what do the US and UK have in common?
They have central banks that have kept the cost of money cheaper than it has ever been for five years, their public-sector austerity has been less severe than billed, and their labour markets are more flexible than most in the developed world. Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: BBC, BRICs, G20, Japan, Recession, Tax Evasion | Leave a Comment »
Posted by hkarner - 18. November 2014
Source: The Wall Street Journal
Surprise Contraction Stirs Calls for Stimulus Measures to Revive Economy
Japan reported a second consecutive quarter of economic contraction.
TOKYO—Recession in the world’s third-largest economy has Japanese Prime Minister Shinzo Abe readying another major economic stimulus and preparing to call snap elections amid rising clamor over the wisdom of his “Abenomics” reforms.
A surprise announcement early Monday that the economy contracted for a second straight quarter makes it “absolutely necessary to take countermeasures,” said Etsuro Honda, an architect of Mr. Abe’s economic policy, in an interview with The Wall Street Journal. He called for a new $25 billion in cash handouts and tax cuts. (Latest News: Abe Administration Officials Defend Policies) Den Rest des Beitrags lesen »
Posted in Artikel | Getaggt mit: Abenomics, Japan, WSJ | Leave a Comment »
Posted by hkarner - 9. November 2014
Source: The Economist: Buttonwood
Economic policies are diverging in the developed world as deflation looms
CENTRAL banks in the developed world are no longer acting in tandem. When the financial crisis broke in 2007-08, most banks eased monetary policy significantly. But in late October, two days after the Federal Reserve ceased its third programme of asset purchases, the Bank of Japan stepped up its bond-buying. This divergence seems likely to have a big effect in the medium term, not least in the currency markets.
The Bank of Japan said it was expanding its programme of asset purchases (known as quantitative easing, or QE) from ¥60-70 trillion to ¥80 trillion ($700 billion) a year. Its aim is to ward off deflation, a persistent problem over the past 20 years. The Tokyo stockmarket jumped sharply on the news but the biggest economic impact may be on the exchange rate. The yen fell more than 2% against the dollar on the day of the announcement—a big move by currency-market standards—and hit a seven-year low against the greenback on November 3rd.
The dollar has been gaining ground more broadly in recent months (see chart). This seems largely due to America’s relatively strong recovery (by the rich world’s feeble standards) and the perception that this will lead the Fed to raise interest rates sooner than other central banks. The market’s view of when the first rate rise will come has varied a lot, but the Fed’s latest statement was seen as fairly hawkish; the current consensus is some time in November or December next year. Those investors who like to play the “carry trade”—borrowing money in a low-yielding currency to invest in a higher-yielding one—can already exploit the big gap in yields between Treasury bonds and German or Japanese government debt. Higher short-term interest rates will give them another incentive to buy the dollar.
For Japan, a weaker yen is broadly positive. It pushes up inflation by raising the cost of imports and boosts the prospects of Japanese exporters by making them more competitive in global markets. Exchange rates are a zero-sum game, however: if Japanese exporters gain market share, some other country’s exporters must lose it. And if competition from Japan forces producers in other countries to lower their prices, the effect could be to export deflation to the rest of the world.
Over the past 12 months, for example, the yuan has risen nearly 15% against the yen. That has put pressure on Chinese manufacturers to cut prices; the Chinese producer-price index has fallen for 30 consecutive months, the longest decline since the late 1990s. In turn, that puts further downward pressure on American inflation; since 1995, there has been a 70% correlation between Chinese producer prices and American consumer prices, according to Deutsche Bank.
If other central banks in the developed world respond to the yen depreciation by loosening monetary policy, then the net effect on economic growth would be positive. But the Fed and the Bank of England have stopped easing and the European Central Bank seems reluctant to adopt QE. The extra burst of Japanese QE may only offset a planned rise in the consumption tax, so the net effect on global demand could be zero. Den Rest des Beitrags lesen »
Posted in weitere Artikel | Getaggt mit: Central Banks, currency, Deflation, Economist, Fed, Japan | Leave a Comment »