The Italian Runaway Train

There has been lot’s of debate in the press and in academic circles over the last week or so about whether Italy’s latest contraction constitutes a triple dip recession or simply a continuation of what’s been going on over many many years. This is an interesting theoretical nicety, but in fact what is happening in […]

Secular Stagnation Part 1 – Paul Krugman’s Bicycling Problem

“What’s really happening fast is the demographic transition, with Europe very quickly turning Japanese.” Paul Krugman – For Bonds, This Time is Different Ever since Larry Summers gave his game-changing speech at last autumn’s IMF research conference the back-and-forth flow of arguments about secular stagnation has been almost non-stop (indeed Larry himself now has a […]

Spain: The Land Where Incipient Deflation Becomes Good News for Headline GDP (Updated 29/05/2014)

The Spanish National Statistics Office (INE) today published the first detailed estimate of Spain’s Q1 GDP. Basically they confirm the gist of the original Bank of Spain numbers (see my report of 25 March below) although there are some important nuances. In my earlier report, I stressed that Spain’s Q1 surge was as much a […]

Greek Re-entry (or Grentry) Not the Game Changer Many Think it Is

There is no doubt that Greece’s recent bond sale was an exciting and even invigorating moment for many people. The WSJ’s Simon Nixon, for example, called it “a symbolically important moment for the euro crisis”. Reuters’ Marius Zaharia suggested the speed of the come back could even be a game-changer for the heavily indebted southern […]

The Euro Area Needs a Growth Stimulus Package

For several months, the outlook for the euro area has improved thanks to the positive results that have been achieved over the national and European level.  Budget deficits have decreased considerably since 2011, particularly in the countries hardest hit by the crisis.  Trade deficits of these countries have disappeared through fiscal consolidation and structural reforms […]