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Posts Tagged ‘Rosa’

The Growing Risk of a 2020 Recession and Crisis

Posted by hkarner - 17. Juni 2019

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, 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.

Across the advanced economies, monetary and fiscal policymakers lack the tools needed to respond to another major downturn and financial crisis. Worse, while the world no longer needs to worry about a hawkish US Federal Reserve strangling growth, it now has an even bigger problem on its hands.

NEW YORK – Last summer, my colleague Brunello Rosa and I identified ten potential downside risks that could trigger a US and global recession in 2020. Nine of them are still in play today.

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The Makings of a 2020 Recession and Financial Crisis

Posted by hkarner - 14. September 2018

Brunello Rosa is co-founder and CEO at Rosa & Roubini Associates, and a research associate at the Systemic Risk Centre at the London School of Economics.

Although the global economy has been undergoing a sustained period of synchronized growth, it will inevitably lose steam as unsustainable fiscal policies in the US start to phase out. Come 2020, the stage will be set for another downturn – and, unlike in 2008, governments will lack the policy tools to manage it.

NEW YORK – As we mark the decennial of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more relevant question is what actually will trigger the next global recession and crisis, and when.

The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession. Den Rest des Beitrags lesen »

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Italy’s Slow-Motion Euro Train Wreck

Posted by hkarner - 3. Juni 2018

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, 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.

Brunello Rosa is co-founder, CEO, and head of research at Rosa & Roubini Associates, and a research associate at the Systemic Risk Centre at the London School of Economics.

Financial markets have finally woken up to the fact that Italy could soon be ruled by a populist government with designs to take the country out of the eurozone. And, given Italy’s tepid economic performance since adopting the single currency a generation ago, there is little reason to think that the current crisis is a one-off event.

NEW YORK – The possibility of a populist, Euroskeptic government coming to power in Italy has focused investors’ minds like few other events this year. The yield differential, or spread, between Italian and German bonds has widened sharply, indicating that investors view Italy as a riskier bet. And Italian equity prices have fallen – particularly in domestic bank shares, the best proxy of country risk – while insurance premia against a sovereign default have increased. There are even fears that Italy could trigger another global financial crisis, especially if a fresh election becomes a de facto referendum on the euro.

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A “Fiscal Debit Card” (With An Expiry Date) to Boost Italy’s GDP – While Remaining Fiscally Disciplined

Posted by hkarner - 20. August 2015

Author: Brunello Rosa  ·  August 14th, 2015  · RGE EconoMonitor

Brunello Rosa is director of Western Europe, G10 rates and currencies at Roubini Global Economics. Brunello joined RGE from the Bank of England, where he mostly worked in its Markets area, in the division that implements monetary policy and provides liquidity insurance

In 2015 Italy is expected to return to growth on an annual basis after three consecutive years of contraction, and after having lost more than 9% of GDP in real terms since 2007, one year before the beginning of the global financial crisis. This is certainly a welcome development. At the same time, the major policy institutions, market participants and independent research houses (including RGE), expect Italy’s GDP in 2015 to grow only by 0.7% (median forecast), around half the pace of the Eurozone as a whole.

On the one hand, one could argue that 0.7% is already above Italy’s current (post-crisis) growth potential, which RGE estimates to be around 0.4% (vs 1.0% pre-crisis), and therefore enough to start absorbing part of the spare capacity in the economy, and potentially reduce the high unemployment rate (together with some of the recently-introduced reforms of the labour market and the three-year tax break for new hires). Den Rest des Beitrags lesen »

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Italy: Clamp Down Corruption to Jump Start Growth

Posted by hkarner - 26. Juli 2014

Authors: Brunello Rosa & Raffaele Cantone  ·  July 22nd, 2014  ·  RGE EconoMonitor

A Dialogue with the President of Italy’s Anti-Corruption Authority.

Italy’s sluggish growth is at the center of the political debate, as well a key concern for international authorities, given its implications for public debt sustainability. A number of factors can explain Italy’s low growth potential. Most of them refer to the obsolescence of large portions of Italy’s (material and immaterial) infrastructures and of its productive fabric, as well as to the underinvestment in education and R&D. However, another obstacle to Italy’s economic performance is the low effectiveness of decision-making process and bodies (both in the public and the private sector), which many consider the root cause of actual (as well as perceived) corruption.

A systematic approach to estimate the extent of corruption and decision-making ineffectiveness

Roubini Global Economics’ systematic evaluation model (based on Country Insights’ scores) allows a comparison (on a 0 to 10 scale) of the level of corruption and of the inefficiency of the decision-making processes at the international level. This would help gauging what could be the potential economic impact of a serious fight against corruption (Table 1).

Table 1: Roubini Global Economics – Country Insights Scores

Table 1 clearly shows that Italy’s investment attractiveness, business environment and effectiveness of political decision-making processes are clearly lower than those of its closest competitors (France, Germany, US, UK, and – often – Spain) and comparable to those of fast-growing emerging economies, which on the other hand can count on other competitive factors, such as low nominal wages and exchange rates kept artificially low. Moreover, the presence of organized crime, the diffusion of corruption and corruption perception (estimated by the rankings of Transparency International, which sees Italy in 69th position over 182) are at alarmingly high levels.

How Corruption Impacts Economic Activity

Corruption can affect economic activity by a number of channels. We will focus on three of them.

1) Corruption dis-incentivizes Foreign Direct Investments Den Rest des Beitrags lesen »

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