tag:blogger.com,1999:blog-35870642009-11-24T15:49:53.223+01:00No-one Gets Left BehindEdward Hughnoreply@blogger.comBlogger2028125tag:blogger.com,1999:blog-3587064.post-85998734938143585342009-11-06T00:13:00.000+01:002009-11-06T00:14:30.518+01:00

Nouriel Robini is not a man who is known for mincing his words. “We have the mother of all carry trades,” he tells us, “Everybody’s playing the same game and this game is becoming dangerous.” There is a “wall of liquidity” sweeping the planet, pushing asset prices ever higher in one country after another. I wholeheartedly agree.Investors across the globe are taking advantage of the ultra low

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-12560585575175171012009-11-03T23:21:00.000+01:002009-11-03T23:23:34.669+01:00

Well, if John Lennon had still been around today he would undoubtedly have entitled his song Norwegian oil, but whatever way you want to put it Norway is back in the news, and this time not because of adolescents who find themselves with no alternative to sleeping overnight in the bath-tub, but rather because its central bank has been put in a position where it has little alternative but to raise

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-37704044235586796992009-11-03T15:18:00.000+01:002009-11-03T15:20:02.161+01:00

A spectre is haunting Europe, but this time it is not the spectre of revolt by the popular masses, or even one of yet another wave of bank bailouts. No, the spectre which is currently stalking the corridors of Europe's most prestigous institutions is one of a Spanish economy which stays on a flatline while Europe's other economies, one by one, start to struggle back to life. And the main reason

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-51464054547491792572009-10-30T00:07:00.000+01:002009-10-30T00:08:58.234+01:00

Finland, we have recently been told, is the world's most prosperous nation, and it is deemed to be prosperous not only in monetary and financial terms, but also in terms of the implicit wealth of its democracy and governance. This striking assessment is to be found in the latest edition of what is known as the "Prosperity Index", an initiative launched by the Legatum Institute, a London-based

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-71860402933457557542009-09-11T19:59:00.001+02:002009-09-14T11:33:06.420+02:00

'As far as I am concerned, this is ... the most complex crisis we've ever seen due to the number of factors in play'Spanish Economy Minister Pedro Solbes speaking to the Spanish radio station Punto Radio September 2008“‘The global imbalances have to add up to zero and so, if the US is going to be less the consumer importer of last resort, then other countries are going to need to be in different

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-84361432904868210502009-08-14T11:02:00.001+02:002009-08-18T15:07:41.424+02:00

The non-biblical concept of original sin, as Claus Vistesen notes in this post, when propounded in its standard Obstfeld & Krugman textbook version refers to the situation where many developing economies who are not able to borrow in their own currencies feel forced to denominate large parts of their sovereign and private sector debt in non-domestic currencies in order to attract capital from

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-1730099271712626792009-08-09T10:29:00.000+02:002009-08-09T10:36:37.881+02:00

According to a once-upon-a-time post on the Economist's Certain Ideas of Europe Blog Edward Hugh “was very cross” about some of the journalism they were serving up over at that prestigious journal. Well, not to worry, since this time he is hopping mad. And the issue which lies behind his wrath is essentially the same one, how to interpret and understand the demographic processes which are

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-58789034021869563052009-07-14T21:36:00.000+02:002009-07-14T21:37:27.478+02:00

This post accompanies my recent piece on Sweden. I have been scratching my head and trying to see what could be learnt from making a comparison between Finland and Sweden. Some of the differences are obvious - one is in the euro, and the other isn't, once can adjust monetary policy and currency values, and the other can't. Others are less so. Finland's goods trade surplus has been declining

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-49566298746279377062009-07-14T21:34:00.000+02:002009-07-14T21:36:35.546+02:00

Basically this post accompanies the Swedish monetary policy and devaluation post I have recently put up on the Global Economy Matters Blog. But first some theoretical structure from Claus Vistesen.As we can see above, the idea is that as median population age rises the current account dynamics of a country change. The last ageing phase of the diagram is purely speculative at this point. Basically

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-24199391756166944192009-07-13T13:25:00.000+02:002009-07-13T13:26:28.674+02:00

The International Monetary Fund this week forecast the recession in Bulgaria would be deeper than it previously predicted. Such a decision should come as no surprise to anyone, since the country's economic dynamics in both the short and long term look extremely unstable, and Bulgaria is now almost certainly headed towards a series of more or less hair-raising roller-coaster rides. Even the

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-45354525156179345442009-06-20T11:49:00.000+02:002009-06-20T12:26:34.592+02:00

Quietly clicking my way through Bloomberg last Sunday afternoon, I came across this:Facebook Members Register Names at 550 a SecondFacebook Inc., the world’s largest social-networking site, said members registered new user names at a rate of more than 550 a second after the company offered people the chance to claim a personalized Web address.Facebook started accepted registrations at midnight

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-52919796877234240532009-06-10T08:38:00.000+02:002009-06-10T08:39:38.309+02:00

"As long as excessive debt is not digested, both monetary and fiscal policies are inefficient. There is not much of an alternative. Either to let the economy collapse, in order to reduce debts, and then use fiscal policy to revive it, or inundate the insolvent economy with public credit, to avoid the collapse, and loose the ability of fiscal policy to pull it out of a prolonged lethargy. Either a

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-24578488459189820792009-06-07T16:31:00.001+02:002009-06-09T18:06:44.608+02:00

The Latvian economy is certaily stuck in a hard and not especially pleasent place at the moment, and really one chart tells it all, since as we see above the local interbank overnight interest rates have been storming upwards and through the roof over the last two weeks. As a result of this unfortunate state of affairs the country has attained a higher profile in the international news media than

Edward Hughnoreply@blogger.com2tag:blogger.com,1999:blog-3587064.post-71708588135129635202009-05-28T13:15:00.001+02:002009-05-28T13:15:24.680+02:00

This is one of the key points I have been hammering here on this blog for some weeks now. There is clear evidence of most economies globally "stabilising" at this point, you could even stretch it to say that the "worst is over" - since I doubt we will go back to the dreadful days of December and January (see German manufacturing PMI chart below) - when it was like someone had given a very sharp

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-72148340375099490472009-05-23T11:49:00.001+02:002009-05-24T12:02:02.512+02:00

As Paul Krugman recently pointed out, one of the central points they made in the latest IMF World Economic Outlook was that recessions caused by financial crises tend to get resolved on the back of export-lead booms, with countries normally emerging from the crisis with a positive trade balance of over 3 percent of GDP. The reason for this is simple, since consumers are so laden-down with debt

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-3323106137264624042009-05-20T12:04:00.000+02:002009-05-24T12:05:20.641+02:00

Iceland, why on earth Iceland? Well, the issue I have in mind concerns the independence and viability of central bank monetary policy (especially in a small open economy like Hungary's) and the role interest rates, and investor sentiment, and yield differentials, and oh yes, I almost forgot, that notorious vehicle so beloved by investors the "carry trade" in producing a situation where financial

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-54700531858623118472009-05-18T12:06:00.000+02:002009-05-24T12:06:43.302+02:00

"For what it’s worth, a key conclusion from the IMF’s new World Economic Outlook is that recessions caused by financial crisis typically end with export booms, with the trade balance improving,on average, by more than 3 percent of GDP. I find this a disturbing result: we’re now suffering from a global financial crisis, which means that the usual driver of recovery will only be available if we can

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-73308442444985313032009-05-14T12:07:00.000+02:002009-05-24T12:08:01.102+02:00

“The 60 billion euros they announced is peanuts for an economy the size of the euro zone,” economics professor and former Bank of England policy maker Willem Buiter said at a conference in Dublin yesterday. “I expect they will announce more or that the recession in the euro zone will be longer and deeper than would otherwise be necessary. They have a record of being somewhat behind the curve.”

Edward Hughnoreply@blogger.com1tag:blogger.com,1999:blog-3587064.post-11456406624093396412009-03-22T10:51:00.002+01:002009-03-22T10:59:28.358+01:00

European Monetary Affairs Commissioner Joaquín Almunia recently, and possibly totally inadvertently, stumbled on a very interesting argument. Here it is:"Who is crazy enough to leave the euro area? Nobody," Almunia said. "The number of candidates to join the euro area increases. The number of candidates to leave the euro area is zero."Reductio Ad AbsurdumNow you don't need a PhD in economics to

Edward Hughnoreply@blogger.com2tag:blogger.com,1999:blog-3587064.post-84587346671986318262009-03-02T13:52:00.000+01:002009-03-02T13:58:04.702+01:00

He's at it again. Last year he was busily trying to worry us all that inflation was set to get completely out of hand among the 16 countries who make up the eurozone. Now the President of the European Central Bank, Jean-Claude Trichet, is hard at it on another tack and is busying himself trying to convince us that there is no credible deflation threat facing these countries. Apart from getting it

Edward Hughnoreply@blogger.com4tag:blogger.com,1999:blog-3587064.post-9026962125935351902009-02-22T21:17:00.000+01:002009-02-22T21:27:17.388+01:00

“It’s 20 years after Europe was united in 1989 – what a tragedy if you allow Europe to split again.”Robert Zoellick, World Bank president, in an interview with the Financial Times(Click On Image To View Video)World Bank president, Robert Zoellick, made a call this week - in an interview with the Financial Times - for a European Union-led and co-ordinated global support programme for the economies

Edward Hughnoreply@blogger.com1tag:blogger.com,1999:blog-3587064.post-79302029062042235892009-02-18T23:40:00.000+01:002009-02-18T23:42:19.479+01:00

Wolfgan Munchau was complaining only last weekend about the extraordinary narrow-mindedness of Europe's economic and political leadership in the face of the current financial and economic crisis, from Ireland in the West to Hungary in the East, and from Greece in the South to Sweden in the North. But more than narrow mindedness what we are faced with is innocence and inability to react, and

Edward Hughnoreply@blogger.com2tag:blogger.com,1999:blog-3587064.post-61649573266295975222009-02-10T10:44:00.000+01:002009-02-10T10:47:28.235+01:00

Keynes’s genius – a very English one – was to insist we should approach an economic system not as a morality play but as a technical challenge.Martin Wolf, Financial TimesThe euro fell again yesterday, by 1.1 percent against the dollar (to $1.2860) and by 1.2 percent against the yen (to 117.52 yen). The change, even if quite large in a short space of time, is hardly dramatic, but what is of more

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-40765445919199482432009-02-07T13:27:00.001+01:002009-02-07T13:34:41.645+01:00

You see, this isn’t a brainstorming session — it’s a collision of fundamentally incompatible world views.Paul KrugmanAs a wise man recently said, failure to act effectively risks turning this slump into a catastrophe. Yet there’s a sense, watching the process so far, of low energy. What’s going on?Paul KrugmanFirst, focus all attention on reversing the collapse in demand now, rather than on the

Edward Hughnoreply@blogger.com0tag:blogger.com,1999:blog-3587064.post-15751874274465550422009-02-01T16:01:00.001+01:002009-02-01T16:37:16.923+01:00

Russia's current woes can be readily summed up in just one single variable - the value of the ruble - and this value, as we all know, is falling. Almost uncontrollably so.The bank’s target will be “very quickly” breached without more intervention, said Gaelle Blanchard of Societe Generale SA in London. “Right now the market is convinced it wants to see the ruble lower,” Blanchard said. “As long

Edward Hughnoreply@blogger.com0