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Gene Ellis

A Declining Euro Can't Cure All Ills - WSJ.com - 0 views

online.wsj.com/...3754904577531032942698056.html

shared by Gene Ellis on 17 Jul 12 - No Cached
  • but what would in normal times be a boon for the region may not help as much now, experts say.
  • Before the crisis, actions such as the European Central Bank rate cuts two weeks ago would have had a twofold effect in reviving the economy: Banks would have passed the lower rate on to their clients, while foreign-exchange markets would have marked the currency down, giving exporters better chances to sell their products abroad.
  • In today's polarized euro zone, it isn't that simple. For one thing, tThere is no certainty that euro-zone banks will pass on the cut in borrowing costs.
  • ...5 more annotations...
  • Even if they did, he explained, the euro zone's problems are now so acute that few companies seem to want to borrow.
  • Mario Boselli, chairman of the Italian Chamber of Fashion, frets that larger emerging economies still account for only 10% of total Italian exports. "This is not enough" to offset the weakness in developed economies, he says.
  • Both Mr. Boselli and Philip Halpin, an adviser to the Irish Exporters' Association, say the euro would have to fall as low as $1.10 (from about $1.23 currently), to produce a robust export-led recovery.
  • Ludovic Subran, chief economist at French trade-credit insurer Euler Hermes, warns that might not be enough. Such a depreciation would have little effect in France because high taxes and rigid labor costs reduce the potential benefits, he says.
  • Any euro-zone economy would benefit from a drop in the euro to the extent that it can redirect more resources to external markets. But the willingness and ability of businesses to do that differs across the region. Nadio Delai, chairman of Italian research and consultancy firm Ermeneia, say a host of smaller, less prestigious Italian shoe and textile companies have started to export to emerging markets, riding the coattails of more famous names.
Gene Ellis

Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Webe... - 0 views

www.telegraph.co.uk/...-ECB-strongman-Axel-Weber.html

shared by Gene Ellis on 24 Jan 14 - No Cached
  • Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber
  • Harvard professor Kenneth Rogoff said the launch of the euro had been a "giant historic mistake, done to soon" that now requires a degree of fiscal union and a common bank resolution fund to make it work, but EMU leaders are still refusing to take these steps.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said.
  • ...8 more annotations...
  • Mr Rogoff said Europe is squandering the "scarce resource" of its youth, badly needed to fortify an ageing society as the demographic crunch sets in.
  • "If these latent technologies are not realised, Europe will wake up like Rip Van Winkel from a long Japan-like slumber to find itself a much smaller part of the world economy, and a lot less important."
  • Mr Rogoff said debt write-downs across the EMU periphery "will eventually happen" but the longer leaders let the crisis fester with half-measures, the worse damage this will do to European society in the end.
  • Mr Weber, who resigned from the Bundesbank and the ECB in a dispute over euro debt crisis strategy, said new "bail-in" rules for bond-holders of eurozone banks will cause investors to act pre-emptively, aiming to avoid large losses before the ECB issues its test verdicts. "We may see that speculators do not wait until November, but bet on winners and losers before that," he said.
  • Sir Martin said the eurozone is pursuing a reverse "Phillips Curve" - the trade off between jobs and inflation - as if it were testing "what level of unemployment it is prepared to tolerate for zero inflation".
  • Pierre Nanterme, chairman and chief executive officer of Accenture, said Europe is losing the great battle for competitiveness, and risks a perma-slump where debt burdens of 100pc of GDP prevent governments breaking free by investing in skills and technology.
  • He said Europe is falling further behind as the US basks in cheap energy and pours funds into cutting-edge technology. "A lot is at stake. If in 12 to 24 months no radical steps are taken to break the curse, we might have not just five, ten, but twenty years of a low-growth sluggish situation in Europe," he said.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said
Gene Ellis

BBC News - Battle of the knowledge superpowers - 0 views

www.bbc.co.uk/...education-14949538

knowledge

shared by Gene Ellis on 10 Jan 14 - No Cached
  • Instead of basking in the reflected glory of a prize winner funded by European grants, she said she had to listen to a speech attacking the red-tape and bureaucracy - and "generally embarrassing the hell out of me".
  • But the knowledge economy does not always scatter its seed widely. When the US is talked about as an innovation powerhouse, much of this activity is based in narrow strips on the east and west coasts. A map of Europe measuring the number of patent applications shows a similar pattern - with high concentrations in pockets of England, France, Germany and Finland.
  • Jan Muehlfeit, chairman of Microsoft Europe, explained what was profoundly different about these new digital industries - that they expand at a speed and scale that would have been impossible in the traditional manufacturing industries. Governments trying to respond to such quicksilver businesses needed to ensure that young people were well-educated, creative and adaptable, he said.
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  • There were 11 million jobs lost, half of them in the United States, and with low-skilled workers and manufacturing the hardest hit.
  • From a standing start, China now has 12% of graduates in the world's big economies - approaching the share of the UK, Germany and France put together. The incumbent superpower, the United States, still towers above with 26% of the graduates.
  • Gene Ellis on 10 Jan 14
     
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  • Gene Ellis on 10 Jan 14
     
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Gene Ellis

How Jean Tirole's Work Helps Explain the Internet Economy - NYTimes.com - 0 views

www.nytimes.com/...lain-the-internet-economy.html

shared by Gene Ellis on 15 Oct 14 - No Cached
  • How Jean Tirole’s Work Helps Explain the Internet Economy
  • He also said that industries should be regulated differently depending on their distinct characteristics.
    • Gene Ellis
      Gene Ellis on 15 Oct 14
       
      excellent point!
  • ...9 more annotations...
  • Many Internet companies, for instance, give their products away free, which means that antitrust law built on pricing is irrelevant. But a result is they grow so fast that they can quickly become monopolies.
  • “He’s helping us think about what is one of the greatest challenges of our time, how to deal with what feel like friendly monopolists,” said Tim Wu, a Columbia Law School professor who studies Internet policy and antitrust. “Amazon, Google and the others give us all this stuff for free or lower prices, so we love them, but are they dangerous in ways we don’t always see?”
  • In the 2002 paper with Jean-Charles Rochet, Mr. Tirole defined two-sided markets, or markets that “get both sides on board” by charging more to one set of customers in order to increase demand by others.
  • In the tech industry, it explains why Google, Facebook and Twitter offer their services free – the more people who use them, the more advertisers they can attract. Likewise, Amazon lowered the price of its new phone to 99 cents in part because smartphones succeed when they have a lot of apps – and developers won’t want to build apps for Amazon’s phone unless a lot of people are using it.
    • Gene Ellis
      Gene Ellis on 15 Oct 14
       
      nice example...
  • For regulators, tech companies have been a riddle in part because they do not follow the behavior of typical monopolies: Many do not charge for their products, and companies that offer entirely different products are nonetheless competitors. For instance, Google’s chairman, Eric Schmidt, argued in a speech on Monday that Google’s biggest competitor in search is Amazon and in mobile is Facebook — even though neither one is a search engine.
  • “Inspired by him and others like him, our effort was to try to move beyond the traditional understanding of something like an aluminum cartel who just raised their prices on aluminum and everything got more expensive,” said Mr. Wu, who was a senior adviser to the Federal Trade Commission on antitrust matters.
  • For consumers, the costs include absorbing advertisers’ ad spending by paying more for their products, being tracked and shown personalized ads, and giving up privacy.
  • our end-users do not internalize the impact of their purchase on the other side of the market.”
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