Carry trade = quantitative easing
Can prolonged periods of negative real interest rates ever be good for economies in a globalised world? Anders Aslund, senior fellow of the Peterson Institute for International Economics, argues...
View ArticleThe UK economy: it’s the supply, stupid
Don’t panic. With all the talk of ratings downgrades for the US, and actual real-life here-and-now downgrades in some of the eurozone peripherals, have we all been sufficiently worried about the UK? It...
View ArticleThe collective good of demand needs YOU!
From HSBC’s Global Macro Economics team on Thursday: Matters are being made worse because the world’s savers would rather buy Treasuries than global goods.Continue reading: The collective good of...
View ArticleWhy the UK output gap could be a chasm
Capital Economics put out a cracker of a note on UK output this week. It’s taken us a while to get through it but we wanted to do it justice. Here’s the key extract: ‘Supply pessimists’ point to high...
View ArticleOn the long-lasting hit to UK productivity
Let’s look at the latest from the UK’s Office for Budget Responsibility (our emphasis): The combination of more robust employment and much weaker GDP growth than we expected together create a...
View ArticleThe mystery of UK slack
As Mark Carney outlined at Wednesday’s press conference for the BoE inflation report, much-awaited ‘forward guidance’ will be linked to unemployment falling through the 7 per cent level. But it will...
View ArticleInflated worries, part 1 — an overview of US inflation pressures
Here’s a rough sketch of the variables influencing US inflation, which has been remarkably low for two years running: 1) The remaining labour market slack, including a staggering and resilient...
View ArticleWhy the Eurozone output gap could be a chasm
A few years ago Capital Economics made a strong case that the UK output gap — or how much slack there is in the economy — was being grossly under estimated by one and all. Their note prompted a...
View ArticleThe great growth destruction?
Strangely enough, even as the importance of the output gap measure has been increasing the last few years, informed estimates about it have remained few and far between. As the IMF explains, that’s...
View ArticleJeb Bush’s growth goal isn’t outlandish
Jeb Bush, a presidential candidate who won’t be at this year’s Camp Alphaville, wants the US economy to grow at 4 per cent per year. Lots of people are sceptical this is possible. After all, the last...
View Article“Extreme” doesn’t mean what it used to, Sanders vs the CEA
You’d think it wouldn’t be news when allies of an incumbent politician criticise the policies of an outsider seeking to change the status quo, but lots of folks were impressed by the publication of “An...
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