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Gene Ellis

The Limits to ECB Policy - The Euro Crisis - WSJ - 0 views

blogs.wsj.com/...the-limits-to-ecb-policy-2

shared by Gene Ellis on 08 Mar 13 - No Cached
  • Although it has yet to be implemented or even clearly delineated, the mere threat of an ECB bond-buying program, which is what the OMT boils down to, has been enough to drive down yields and reopen the fixed-income markets to the single currency’s struggling sovereigns.
  • Those in employment don’t want their salaries to adjust downwards and insist on maintaining regulations that protect them from competition from the unemployed. Impossible to justify regulatory barriers to entry remain in many employment sectors (such as French rules that make becoming a ski guide almost as onerous as it is to get a pilot’s license).
  • ultimately, politicians will have to make the decisions on whether the euro zone can be saved by choosing to accept either inflation or massive, and unlimited, cross-border transfers or painful unwinding of past excesses through internal devaluation and restructuring.
Gene Ellis

Why the Baltic states are no model - FT.com - 0 views

www.ft.com/...c7-11e2-80f9-00144feabdc0.html

shared by Gene Ellis on 04 May 13 - No Cached
  • Olivier Blanchard, the IMF’s economic counsellor, stated last June that “many, including me, believed that keeping the peg was likely to be a recipe for disaster, for a long and painful adjustment at best, or more likely, the eventual abandonment of the peg when failure became obvious.” He has been proved wrong.
  • According to the IMF, Latvia tightened its cyclically adjusted general government deficit by 5.3 per cent of potential GDP between 2008 and 2012,
  • But Greece’s tightening was 15 per cent of potential GDP between 2009 and 2012.
  • ...8 more annotations...
  • These huge recessions do matter. For Latvia, the cumulative loss from 2008 to 2012 adds up to 77 per cent of the country’s pre-crisis annual output. On the same basis, the loss was 44 per cent for Lithuania and 43 per cent for Estonia.
  • In brief, Latvia, worst-hit of the Baltic countries, suffered one of the biggest depressions in history. It is recovering. But it has not yet fully recovered. Are its policies a model for others? In a word, no.
  • These states have four huge advantages
  • First, according to Eurostat, Latvian labour costs per hour, in 2012, were a quarter of those of the eurozone as whole, 30 per cent of those in Spain and half those of Portugal.
  • Second, these are very small and open economies
  • Its trade partners hardly notice Latvia’s adjustment. But they would notice a comparably large Italian one.
  • Third, foreign-owned banks play a central role in these economies. For the eurozone, this is the alternative to a banking union: let banks with fiscally strong host governments take over the weaker financial systems.
  • inally, the Baltic states have embraced their European destiny as an alternative to falling back into Russia’s orbit.
Gene Ellis

Europe Eyes Trade Pact With Obama - NYTimes.com - 0 views

rendezvous.blogs.nytimes.com/...ope-eyes-trade-pact-with-obama

europe eyes trade pact obama

shared by Gene Ellis on 08 Nov 12 - No Cached
  • “A car tested for safety in the United States could be sold in Europe without further tests, while a drug deemed safe by Brussels would not have to be approved as well by the U.S. government,” according to a Reuters report that cited examples of the benefits of a free-trade agreement.
Gene Ellis

Why Germany Prefers Regulation to Stimulus - NYTimes.com - 0 views

economix.blogs.nytimes.com/...prefers-regulation-to-stimulus

germany regulation stimulus nytimes nytimes com com GDP

shared by Gene Ellis on 01 May 12 - No Cached
  • Gene Ellis on 01 May 12
     
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