Working, working…

The Central Bank of Turkey’s policies, that is… The April trade deficit, at USD 9.1bn, was significantly lower than expectations of around USD 10bn, on the back of both stronger-than-expected exports and especially lower-than-expected imports: So are the Central Bank’s policies starting to work their magic? Maybe, but it is too early to say. After […]

Greek Melt Up?

The European Union will have a final bailout for Greece “by the end of June and have ruled out a “total restructuring” of the nation’s debt” according to Jean-Claude Juncker, head of the group of euro-area finance ministers. Stocks rose around the world. The Stoxx Europe 600 Index climbed 1%, while the MSCI World Index […]

Weighing the Week Ahead: Economic Transition from Stimulus?

The long list of government stimulus and assistance programs were all intended to be temporary.  As the programs gradually end, one question is paramount: Will there be a successful transition from government stimulus to a self-sustaining economic recovery? Some economists are maintaining solid growth forecasts for the remainder of the year.  They see the current […]

It’s Official: Housing Double Dip Is Here

Case Shiller is out, and it confirms what we have known for quite some time: Without artificial government stimulus, Housing is going lower. The double dip in Housing has now been officially recognized: “Data through March 2011, released today Case-Shiller Home Price Indices show that the U.S. National Home Price Index declined by 4.2% in […]

Why Privatisation Is Not the Panacea for Greece

How should Greece try to reduce its debt? Some say Greece should privatise some of its ports and tourist hotspots. While on paper such a move might significantly reduce the debt, this column argues that these calculations rely on some shaky assumptions. Such a sale could make Greece worse off overall.  George Papaconstantinou, Greece’s minister of finance, […]

Unemployment and Output Gaps in a New Keynesian DSGE

The output gap is big and negative; the unemployment gap is big and positive. From “Unemployment in an Estimated New Keynesian Model” (ungated version), by Jordi Galí, Frank Smets, and Rafael Wouters: In this paper we have developed a reformulated version of the Smets-Wouters (2007) framework that embeds the theory of unemployment proposed in Galí […]

The Truth About the American Economy

The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down. Home prices are down. Jobs and wages are going nowhere. It’s vital that we understand the truth about the American economy. How did we go from the Great Depression to 30 […]

UK: Is Osbourne Cutting Too Hard or Not Hard Enough?

Is George Osborne cutting too fast or not fast enough? The Office for National Statistics’ second estimate of GDP in the first quarter, as expected, left the rise in GDP unchanged at 0.5%, following the 0.5% fall in the fourth quarter of last year. I will not go over old ground on the reliability of […]

Here’s to Hoping: Wage, Salary, and Income Gains

There are reasons to expect the second half of the year to be be stronger than the first. Here are two: (1) the rebound in industrial activity following supply chain disruptions, and (2) possible impetus to investment spending coming from the depreciation allowance that expires this year. These factors, though, are just dressing up what […]

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