Skip to main content

Home/ Global Economy/ Group items tagged feature

Rss Feed Group items tagged

Filter: All | Bookmarks | Topics Simple Middle
Gene Ellis

http://www.richmondfed.org/publications/research/region_focus/2012/q1/pdf/feature1.pdf - 1 views

www.richmondfed.org/...feature1.pdf

shared by Gene Ellis on 09 Feb 14 - No Cached
  • Gene Ellis on 09 Feb 14
     
    The Dream behind the Eurozone
Gene Ellis

Eurozone: Looking for growth | vox - 0 views

www.voxeu.org/...eurozone-looking-growth

looking growth vox

shared by Gene Ellis on 25 Mar 13 - No Cached
  • Empirical evidence suggests deleveraging episodes accompanied by a housing crisis will take on average five and a half years across high-income OECD countries (or seven years when accompanied by a banking crisis (Aspachs-Bracon et al. 2011, IMF 2012).
  • Little resolution of banking-sector difficulties in the Eurozone suggests that deleveraging and credit will probably remain slow and impaired for much longer than previously thought. Recoveries that happen without credit are, on average, a third longer than recovery episodes with credit (Darvas 2013).
  • Damages to trend growth are notoriously difficult to assess,
  • ...10 more annotations...
  • In addition, observed GDP growth tends to be revised until several years after the first estimate
  • Our work is based on a simple Solow growth-accounting methodology.
  • A common feature of all economies is a collapse in productivity, which is typical of a big recession. In addition, Spain and Italy also underwent a very sharp labour contraction.
  • The additional effect of ageing.
  • A downside risk is that investment growth does not recover fully (for example, because banks fail to provide the necessary funding). In this case, we assume investment growth is only half what it was before the onset of economic turmoil.
  • We also estimate productivity through a convergence equation, which would slightly lift productivity in peripheral countries in the future.
  • This exercise suggests that in the absence of policy reforms, trend growth will have been damaged significantly, by at least one percentage point, post-crisis, compared with pre-crisis levels,
  • In the event that investment fails to recover quickly
  •  or unemployment levels take longer to fall than in previous recovery episodes, then trend growth would be significantly lower for longer. Trend growth might well remain negative in Spain and Italy, and may fail to increase for Germany or France.
  • this exercise shows the damage will indeed be long lasting, permanently impairing growth in a context of an ageing population that needs higher growth capacity than ever before.
Gene Ellis

French Tax Proposal Tackles Data Harvest by Google and Facebook - NYTimes.com - 0 views

www.nytimes.com/...n-web-giants-data-harvest.html

shared by Gene Ellis on 26 Feb 13 - No Cached
  • Internet companies like Amazon.com, Facebook and Google stay largely out of reach of tax collectors in large European countries like Britain, France and Germany by routing their sales through smaller countries, like Ireland and Luxembourg, where corporate tax rates are lower. The companies insist that such practices are permitted under European Union law and international taxation treaties.
  • France and other countries have begun talks to change those conventions, so Internet companies could be taxed in the country where a sale takes place, rather than in the location where the transaction is recorded. But that could take many years, with no guarantee of any change.
  • A recent study by Ovum, a research firm in London, showed that 81 percent of Internet users in France would use a “do not track” feature on Web sites if it were readily available. That was the highest percentage in any of the 11 countries surveyed.
Gene Ellis

The Eurozone's Delayed Reckoning by Nouriel Roubini - Project Syndicate - 0 views

www.project-syndicate.org/...pe-s-crisis-by-nouriel-roubini

shared by Gene Ellis on 19 Dec 12 - No Cached
  • For starters, the European Central Bank’s “outright monetary transactions” program has been incredibly effective: interest-rate spreads for Spain and Italy have fallen by about 250 basis points, even before a single euro has been spent to purchase government bonds.
  • The introduction of the European Stability Mechanism (ESM), which provides another €500 billion ($650 billion) to be used to backstop banks and sovereigns, has also helped, as has European leaders’ recognition that a monetary union alone is unstable and incomplete, requiring deeper banking, fiscal, economic, and political integration.
  • But, perhaps most important, Germany’s attitude toward the eurozone in general, and Greece in particular, has changed. German officials now understand that, given extensive trade and financial links, a disorderly eurozone hurts not just the periphery but the core.
  • ...10 more annotations...
  • GDP continues to shrink,
  • Moreover, balkanization of economic activity, banking systems, and public-debt markets continues, as foreign investors flee the eurozone periphery and seek safety in the core.
  • Likewise, competitiveness losses have been partly reversed as wages have lagged productivity growth, thus reducing unit labor costs, and some structural reforms are ongoing.
    • Gene Ellis
      Gene Ellis on 19 Dec 12
       
      This, indeed, is the crux of the matter.
  • either the eurozone moves toward fuller integration (capped by political union to provide democratic legitimacy to the loss of national sovereignty on banking, fiscal, and economic affairs), or it will undergo disunion, dis-integration, fragmentation, and eventual breakup.
  • but countries like Germany, which were over-saving and running external surpluses, have not been forced to adjust by increasing domestic demand, so their trade surpluses have remained large.
  • German leaders fear that the risk-sharing elements of deeper integration
  • imply a politically unacceptable transfer union whereby Germany and the core unilaterally and permanently subsidize the periphery.
  • Of course, Germany fails to recognize that successful monetary unions like the United States have a full banking union with significant risk-sharing elements, and a fiscal union whereby idiosyncratic shocks to specific states’ output are absorbed by the federal budget. The US is also a large transfer union, in which richer states permanently subsidize the poorer ones.
    • Gene Ellis
      Gene Ellis on 19 Dec 12
       
      These are key features, built into the over-representation of the poorer, smaller, more agricultural, states; as well as in the central institutions.
  • But the fundamental crisis of the eurozone has not been resolved, and another year of muddling through could revive these risks in a more virulent form in 2014 and beyond. Unfortunately, the eurozone crisis is likely to remain with us for years to come, sustaining the likelihood of coercive debt restructurings and eurozone exits.
  • Gene Ellis on 19 Dec 12
     
    Late 2012 reading
Gene Ellis

Mastering business management studies online - 0 views

www.deccanherald.com/...management-studies-online.html

shared by Gene Ellis on 10 Jan 13 - No Cached
  • The free online mini MBA is a condensed version of a full fledged MBA & is aimed at providing a solid foundation in current business theory and practices.
  • Online video lectures and case studies by top management faculty will cover subjects like Fundamentals of Accounting, Principles of Marketing, Managing Human Resource, Essentials of Business Communication and Business Strategy.
  • “The pedagogy involves pre-recorded video learning modules with fully interactive and collaborative features like the discussion forums, online chats, quizzes and live virtual classrooms. The entire course content will be made available on an anytime, anywhere learning mode using the “portable classroom” model.
Gene Ellis

George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views

www.guardian.co.uk/...ave-eu-from-euro-crisis-speech

shared by Gene Ellis on 09 Apr 13 - No Cached
  • The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
  • Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
  • The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
  • ...37 more annotations...
  • The crisis is almost entirely self-inflicted. It has the quality of a nightmare.
  • My interpretation of the euro crisis is very different from the views prevailing in Germany. I hope that by offering you a different perspective I may get you to reconsider your position before more damage is done. That is my goal in coming here.
  • I regarded the European Union as the embodiment of an open society – a voluntary association of equal states who surrendered part of their sovereignty for the common good.
  • The process of integration was spearheaded by a small group of far sighted statesmen who recognised that perfection was unattainable and practiced what Karl Popper called piecemeal social engineering. They set themselves limited objectives and firm timelines and then mobilised the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Excellent point!
  • Unfortunately, the Maastricht treaty was fundamentally flawed. The architects of the euro recognised that it was an incomplete construct: a currency union without a political union. The architects had reason to believe, however, that when the need arose, the political will to take the next step forward could be mobilized. After all, that was how the process of integration had worked until then.
  • For instance, the Maastricht Treaty took it for granted that only the public sector could produce chronic deficits because the private sector would always correct its own excesses. The financial crisis of 2007-8 proved that wrong.
  • When the Soviet empire started to disintegrate, Germany's leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.
  • The financial crisis also revealed a near fatal defect in the construction of the euro: by creating an independent central bank, member countries became indebted in a currency they did not control. This exposed them to the risk of default.
  • Developed countries have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that have to borrow in a foreign currency run the risk of default. To make matters worse, financial markets can actually drive such countries into default through bear raids. The risk of default relegated some member countries to the status of a third world country that became over-indebted in a foreign currency. 
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Again, another excellent point!
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Not quite... Maggie Thatcher, a Conservative; and Gordon Brown, of Labour, both recognized this possible loss of sovereignty (and economic policy weapons they might use to keep the UK afloat), and refused to join the euro.
  • The emphasis placed on sovereign credit revealed the hitherto ignored feature of the euro, namely that by creating an independent central bank the euro member countries signed away part of their sovereign status.
  • Only at the end of 2009, when the extent of the Greek deficit was revealed, did the financial markets realize that a member country could actually default. But then the markets raised the risk premiums on the weaker countries with a vengeance.
  • Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade.
  • In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default.
  • In retrospect, that was the root cause of the euro crisis.
  • The burden of responsibility falls mainly on Germany. The Bundesbank helped design the blueprint for the euro whose defects put Germany into the driver's seat.
  • he fact that Greece blatantly broke the rules has helped to support this attitude. But other countries like Spain and Ireland had played by the rules;
  • the misfortunes of the heavily indebted countries are largely caused by the rules that govern the euro.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Well, yes, but this is an extremely big point.  If, instead of convergence, we continue to see growth patterns growing apart, what then?
  • Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it.
  • Austerity doesn't work.
  • As soon as the pressure from the financial markets abated, Germany started to whittle down the promises it had made at the height of the crisis.
  • What happened in Cyprus undermined the business model of European banks, which relies heavily on deposits. Until now the authorities went out of their way to protect depositors
  • Banks will have to pay risk premiums that will fall more heavily on weaker banks and the banks of weaker countries. The insidious link between the cost of sovereign debt and bank debt will be reinforced.
  • In this context the German word "Schuld" plays a key role. As you know it means both debt and responsibility or guilt.
  • If countries that abide by the fiscal compact were allowed to convert their entire existing stock of government debt into eurobonds, the positive impact would be little short of the miraculous.
  • Only the divergences in competitiveness would remain unresolved.
  • Germany is opposed to eurobonds on the grounds that once they are introduced there can be no assurance that the so-called periphery countries would not break the rules once again. I believe these fears are misplaced.
  • Losing the privilege of issuing eurobonds and having to pay stiff risk premiums would be a powerful inducement to stay in compliance.
  • There are also widespread fears that eurobonds would ruin Germany's credit rating. eurobonds are often compared with the Marshall Plan.
  • It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds. In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting the others introduce them.
  • Individual countries would still need to undertake structural reforms. Those that fail to do so would turn into permanent pockets of poverty and dependency similar to the ones that persist in many rich countries.
  • They would survive on limited support from European Structural Funds and remittances
  • Second, the European Union also needs a banking union and eventually a political union.
  • If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. 
Gene Ellis

German and French banks call the shots - European, Business - Independent.ie - 0 views

www.independent.ie/...ks-call-the-shots-2607577.html

german french banks ireland debt

shared by Gene Ellis on 11 Jul 12 - No Cached
  • German and French banks call the shots Print Email  NormalLargeExtra Large ShareNew  0  0   Also in European Debt crisis: European shares edge lower and growth worries persist Bank of England's Tucker 'wasn't encouraged to lean on Barclays' Draghi keeps door open to further interest rate cuts Marks and Spencers sales hit by summer deluge Spain's debt tops 7pc danger level as Madrid gets more time European Home "Shocking" 2012 HoroscopeWhat Does 2012 Have In Store For You? Shockingly Accurate. See Free!www.PremiumAstrology.comExpat Health InsuranceQuick, Compare, Trusted Website Expatriate Health Insurance Quoteswww.ExpatFinder.com/Instant-Quoteshttp://www.googleadservices.com/pagead/aclk?sa=L&ai=BMEejVeb8T8fDKoSG_QaAhrTCB-q_1OYBmoqphxvAjbcB0NkREAMYAyDgw6kIKAU4AFD4gumFAmCpsL6AzAGgAairsfEDsgESd3d3LmluZGVwZW5kZW50LmllyAEB2gFfaHR0cDovL3d3dy5pbmRlcGVuZGVudC5pZS9idXNpbmVzcy9ldXJvcGVhbi9nZX
  • d, for reasons best
  • known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.
  • ...1 more annotation...
  • Top of the list are German banks, to whom we owe €92bn with a further €38bn of other exposures. Does the fact that Irish banks potentially owe their counterparts up to €146bn explain the German government's implacable opposition to any write-down of the Irish banks' debts? After the British and the Germans, it is the French banks -- with total Irish bank loans of almost €32bn and a further €23bn of other exposures -- who have the biggest exposure to Ireland. Does this provide at least a partial explanation for French president Nicolas Sarkozy's truculence when faced with Irish requests that senior bondholders be forced to accept a haircut?
Gene Ellis

The science of global warming has changed a lot in 25 years. The basic conclusions have... - 0 views

www.washingtonpost.com/...te-report-tell-us-anything-new

shared by Gene Ellis on 29 Oct 13 - No Cached
  • ack in 1990, the IPCC relied on just two relatively crude models. Today, the IPCC can take advantage of 45 different models that incorporate a wide range of features of the Earth's climate, from ocean biology to changes in soil. Their accuracy has improved considerably since 1990. But it's unclear if those models can keep improving significantly.
  • And even in its 2007 assessment report, the IPCC could only explain about 60 percent of the rise in sea-level that had already occurred in the previous half-century. Nowadays, however, climate scientists can account for virtually all of the past sea-level rise,
Gene Ellis

Out of Europe's Jobs Crisis, Voices of the Young - Multimedia Feature - NYTimes.com - 0 views

www.nytimes.com/...voices-of-the-young.html

shared by Gene Ellis on 14 Dec 13 - No Cached
  • Out of Europe’s Long Jobs Crisis, Voices of the Young
Gene Ellis

The problem with TTIP | vox - 0 views

www.voxeu.org/...problem-ttip

shared by Gene Ellis on 05 Feb 15 - No Cached
  • The problem with TTIP
  • The TPP is a deep international integration arrangement between the US and 11 other Pacific states, which would cover 40% of world GDP and over 30% of world trade. It seeks to address as series of issues that 21st century commerce, but arguably its most obvious feature is that it excludes China – the world’s largest international trader and before long the world’s largest economy. There are, of course, the ritual genuflections towards ‘open regionalism’ – China can join if only it will agree to the necessary policy requirements – but this is about as much use as saying the Chief Rabbi can dine with you while insisting that the menu contains pork.
  • By signing TTIP Europe would be tying itself to a static rather than a dynamic part of the world economy and substantially reinforcing the US’s exclusionary policies.
  • ...9 more annotations...
  • In the areas that are sound, it is mainly that TPP members will probably have to approach the US norms faster than desirable, and possibly faster than they can effectively administer. But there are also areas in which the TPP is not in the interests of most non-US members.
  • However, it is generally accepted that TTIP is more important to Europe than to the US, which greatly strengthens the US’s hand in negotiations.
  • it is widely accepted that the deeper intra-European integration fostered by the Single Market initiative was a major contributor to European prosperity between 1992 and 2007
  • he US has strongly promoted Investor-State Dispute Arbitration in which foreign-owned private firms can seek settlements against governments for taking actions that are not prohibited by the agreements but which reduce the value of investments that the firms have made in member countries.
  • For states that do not have a lot of, say, social or environmental legislation at the time TPP is signed, Investor-State Arbitration threatens to make progress in these dimensions difficult.
  • f China, India or Brazil felt that these disciplines were too arduous or just did not fit, the world trading system would be effectively be split with arguably the most dynamic areas excluded. And given that the TPP would be attractive to smaller economies and that the latter would probably be offered quite accommodating terms, the split would probably deepen rather than the opposite.
  • This reads very much like an agreement to cooperate to make sure that outcomes in the trading system are as the US and EU want them – and with around half of world GDP between them and a further 15% in the rest of TPP, it suggests that the choice facing other will be capitulation vs. exclusion. I fear the latter.
  • Champions of the multilateral system must be much more explicit about its virtues and value – and among these I include Europe (middle-sized countries with a strong belief in negotiated outcomes and order) and China (which has been a massive beneficiary of open markets and non-discrimination to date).
  • urope had better get on with an internally driven liberalisation, especially of services and utilities markets, to stimulate the recovery quite independent of the outside pressures of a trade negotiation;
1 - 13 of 13
Showing 20▼ items per page