Global recovery firmly underway but surrounded by risks, says OECD Economic Outlook
OECD. The global recovery is firmly under way, but is taking place at different speeds across countries and regions, according to the OECD’s latest Economic Outlook. Historically high unemployment remains among the most pressing legacies of the crisis. It should prompt countries to improve labour market policies that boost job creation and prevent today’s high […]
A Wealth Tax for the Euro Zone?
Dalton, Matthew. The sovereign-debt crisis has forced euro zone leaders to come up with creative ways for governments to reduce their budget deficits and cut their debts. So why not a wealth tax? While probably not politically feasible given that center-right governments now hold power throughout much of the euro zone, thinking through how one might work […]
Supercore! (Wonkish)
Krugman, Paul. Two questions about inflation: 1. What would the ECB be doing if it were the Fed? 2. Why have some measures of US core inflation ticked up slightly recently? On the first question, Eurostat offers us a consumer price index sans energy, food, and tobacco, which is more or less US-style core. Here’s […]
The finance-trade-growth nexus and lessons from the past
Bordo, Michael & Rousseau, Peter. How interconnected are finance, trade, and economic growth? This column looks to the past in search of an answer. Examining economies that traded across the Atlantic, it finds that finance and trade reinforced one another between 1880 and 1914 but these links were absent in the post-war period. Financial development has been […]
Built to Bust
DeLong, Bradford. In the mid-2000’s, the United States had a construction boom. From 2003-2006, annual construction spending rose to a level well above its long-run trend. Thus, by the start of 2007, the US was, in essence, overbuilt: about $300 billion in excess of the long-run trend in construction spending. When these buildings were constructed, […]
Are These Havens Really the Safest Places to go?
Cottle, David. The German government picked a good time to sell bonds this week. A market once again fretting about the euro zone’s crippled periphery was more than happy to snap up a €5 billion ($7.03 billion) offering of 10-year paper by its core Wednesday. Indeed, it wanted just a piffling 3% or so for […]