Rediseño y mudanza
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Estreno diseño y dirección. A partir de ahora, el blog se podrá leer en
http://www.andaryver.mx/
Hace 10 años
15.12.09
En defensa del Consumidor
De acuerdo con Gabriel Zaid:
"Hacen falta leyes y organismos que faciliten las acciones colectivas de los consumidores. Los poderes económicos tradicionales (el Estado, las centrales obreras, los organismos patronales) han ignorado históricamente a los consumidores, aunque se trata de la misma población desde otra perspectiva del crecimiento económico. Es ilusorio ganar más produciendo más "satisfactores" cuando no son satisfactorios."
A Gold Bubble?
Nouriel Roubini commented:"Gold prices rise sharply only in two situations: when inflation is high and rising, gold becomes a hedge against inflation; and when there is a risk of a near depression and investors fear for the security of their bank deposits, gold becomes a safe haven."
"The last two years fit this pattern. Gold prices started to rise sharply in the first half of 2008, when emerging markets were overheating, commodity prices were rising, and there was concern about rising inflation in high-growth emerging markets. Even that rise was partly a bubble, which collapsed in the second half of 2008, when – after oil reached $145, killing global growth –the world economy fell into recession. As concerns about deflation replaced fear of inflation, gold prices started to fall with the correction in commodity prices."
"[...]Eventually, central banks will need to exit quantitative easing and zero-interest rates, putting downward pressure on risky assets, including commodities. Or the global recovery may turn out to be fragile and anemic, leading to a rise in bearish sentiment on commodities – and in bullishness about the US dollar."
"Another downside risk is that the dollar-funded carry trade may unravel, crashing the global asset bubble that it, together with the wave of monetary liquidity, has caused. And, since the carry trade and the wave of liquidity are causing a global asset bubble, some of gold’s recent rise is also bubble-driven, with herding behavior and “momentum trading” by investors pushing gold higher and higher. But all bubbles eventually burst. The bigger the bubble, the greater the collapse."
14.12.09
"Too big to manage" & "too big to fail"
Accordingly with Howard Davies
"[...] The overriding conclusion that emerges from any analysis of these unhappy events is that nothing will ever be the same again: the relationship between the state and the markets needs to be rethought. A new “social contract” between finance and the people, through their governments, is required."
"That is easy to say, but governments, individually and collectively, are still struggling to redefine the terms of that contract. Progress has been painfully slow, partly because officials have been fire-fighting, and partly because urgent domestic political imperatives compete with the desire to establish new, globally applicable mechanisms that would provide a stable underpinning for the international financial system and prevent regulatory arbitrage and the de-globalization of finance."
"[...] The overriding conclusion that emerges from any analysis of these unhappy events is that nothing will ever be the same again: the relationship between the state and the markets needs to be rethought. A new “social contract” between finance and the people, through their governments, is required."
"That is easy to say, but governments, individually and collectively, are still struggling to redefine the terms of that contract. Progress has been painfully slow, partly because officials have been fire-fighting, and partly because urgent domestic political imperatives compete with the desire to establish new, globally applicable mechanisms that would provide a stable underpinning for the international financial system and prevent regulatory arbitrage and the de-globalization of finance."
10.12.09
El Desencanto
El lunes por la tarde me encontré con la última publicación de José Woldenberg "El Desencanto" (bajo el sello de Cal y Arena) inicié una breve lectura y decidí adquirir el libro al día siguiente (liquidity constraint); sin embrago se agoto. Trataré de rastrearlo en la Porrúa o en última instancia me lanzo a Gadhi.
Mientras comparto parte de la reseña que realizó Rafael Pérez Gay en la presentación del libro:
"Hace algunos meses, José Woldenberg me entregó el original de su nuevo libro. No lo leí en tres patadas, me tomé una o dos semanas, pero desde las primeras páginas supe que estaba leyendo un libro duro, triste. Es una novela, una crónica, una historia política, una memoria personal, un homenaje a la amistad. Ante todo, este libro revisa la historia moderna de la izquierda mexicana y se dedica a la construcción de un personaje, Manuel Martínez, un hombre comprometido con sus sueños, o mejor, un sueño: la invención de un nuevo sistema político, la búsqueda de un país menos desigual, la creación de una izquierda como opción de gobierno para el porvenir. Al final de su vida segada por el azar y en la plenitud de la madurez, Martínez emprende la última aventura, la exploración de las obras de siete escritores arrastrados por el sueño de la Revolución soviética: el desencanto."
Mientras comparto parte de la reseña que realizó Rafael Pérez Gay en la presentación del libro:
"Hace algunos meses, José Woldenberg me entregó el original de su nuevo libro. No lo leí en tres patadas, me tomé una o dos semanas, pero desde las primeras páginas supe que estaba leyendo un libro duro, triste. Es una novela, una crónica, una historia política, una memoria personal, un homenaje a la amistad. Ante todo, este libro revisa la historia moderna de la izquierda mexicana y se dedica a la construcción de un personaje, Manuel Martínez, un hombre comprometido con sus sueños, o mejor, un sueño: la invención de un nuevo sistema político, la búsqueda de un país menos desigual, la creación de una izquierda como opción de gobierno para el porvenir. Al final de su vida segada por el azar y en la plenitud de la madurez, Martínez emprende la última aventura, la exploración de las obras de siete escritores arrastrados por el sueño de la Revolución soviética: el desencanto."
8.12.09
Los Empresarios Oprimidos
"The reading of books is growing arithmetically; the writing of books is growing exponentially" – Zaid
En el Número 132 de Letras Libres podemos encontrar una invitación a la lectura de "Empresarios Oprimidos" por Gerardo Esquivel.
En el Número 132 de Letras Libres podemos encontrar una invitación a la lectura de "Empresarios Oprimidos" por Gerardo Esquivel.
"[..] lo que mucha gente no sabe es que Zaid es un precursor en la discusión sobre el enorme potencial de los pequeños empresarios en una economía como la mexicana. Así es: antes de que se pusiera de moda el tema de los microcréditos en México y antes de que se hablara a nivel mundial de la contribución de Muhammad Yunus, del Grameen Bank o del desarrollo de las microfinancieras y, por supuesto, mucho antes de la propuesta de changarrización del presidente Fox o del éxito financiero del Banco Compartamos, ya Zaid había enfatizado las ventajas de productividad de las pequeñas empresas, lo relativamente barato que podría ser el generar ingresos por esta vía y la gran contribución que esto podría tener para el verdadero progreso de la economía mexicana."
Por acá otras reseñas sobre la obra de Gabriel Zaid (miembro de El Colegio Nacional – Discurso de ingreso)
Vs. los Queda-Bien & la "Cleptocracia Rotativa"
Denise Dresser en pro de la rendición de cuentas:
"En México no hay reelección, pero sí hay trampolín. Cada tres años entran diputados y salen otros; cada seis años, entran senadores y salen otros. Aterrizan en el presupuesto público, viven de las partidas de los partidos, hacen como que legislan y después se van. Saltan de la Cámara de Diputados al Senado y de allí a una presidencia municipal o a una diputación local, para regresar eventualmente al Congreso. Hacen todo eso sin haber rendido cuentas jamás porque no existe un mecanismo para castigarlos si no cumplen."
"Con demasiada frecuencia la democracia mexicana termina capturada por poderes fácticos porque no cuenta con el contrapeso de la ciudadanía. Como la supervivencia política de un diputado no depende de la reelección en la urnas sino de la disciplina partidista y la buena relación con Televisa y TV Azteca, los partidos acaban embolsados. Este comportamiento condenable existe y persiste, pero no porque la clase política mexicana tenga una propensión genética a la corrupción, descubierta al descifrar el genoma mexicano. El problema no es cultural sino institucional; los políticos en México se comportan así porque pueden. Porque no hay suficientes mecanismos institucionales para acotar el poder de los partidos -o sus dueños- y aumentar el poder de quienes, con su voto, los eligieron."
"En México no hay reelección, pero sí hay trampolín. Cada tres años entran diputados y salen otros; cada seis años, entran senadores y salen otros. Aterrizan en el presupuesto público, viven de las partidas de los partidos, hacen como que legislan y después se van. Saltan de la Cámara de Diputados al Senado y de allí a una presidencia municipal o a una diputación local, para regresar eventualmente al Congreso. Hacen todo eso sin haber rendido cuentas jamás porque no existe un mecanismo para castigarlos si no cumplen."
"Con demasiada frecuencia la democracia mexicana termina capturada por poderes fácticos porque no cuenta con el contrapeso de la ciudadanía. Como la supervivencia política de un diputado no depende de la reelección en la urnas sino de la disciplina partidista y la buena relación con Televisa y TV Azteca, los partidos acaban embolsados. Este comportamiento condenable existe y persiste, pero no porque la clase política mexicana tenga una propensión genética a la corrupción, descubierta al descifrar el genoma mexicano. El problema no es cultural sino institucional; los políticos en México se comportan así porque pueden. Porque no hay suficientes mecanismos institucionales para acotar el poder de los partidos -o sus dueños- y aumentar el poder de quienes, con su voto, los eligieron."
7.12.09
Eight Failures
Stiglitz listed the following Crisis' Triggers:
1) Too-big-to-fail banks have perverse incentives; if they gamble and win, they walk off with the proceeds; if they fail, taxpayers pick up the tab.
2) Financial institutions are too intertwined to fail; the part of AIG that cost America's taxpayers $180 billion was relatively small.
3) Even if individual banks are small, if they engage in correlated behavior – using the same models – their behavior can fuel systemic risk;
4) Incentive structures within banks are designed to encourage short-sighted behavior and excessive risk taking.
5) In assessing their own risk, banks do not look at the externalities that they (or their failure) would impose on others, which is one reason why we need regulation in the first place.
6) Banks have done a bad job in risk assessment – the models they were using were deeply flawed.
7) Investors, seemingly even less informed about the risk of excessive leverage than banks, put enormous pressure on banks to undertake excessive risk.
8) Regulators, who are supposed to understand all of this and prevent actions that spur systemic risk, failed. They, too, used flawed models and had flawed incentives; too many didn't understand the role of regulation; and too many became "captured" by those they were supposed to be regulating.
[...] These are not matters of black and white: the more we limit the size, the more relaxed we can be about these and other details of regulation. That is why King, Paul Volcker, the United Nations Commission of Experts on Reforms of the International Monetary and Financial System, and a host of others are right about the need to curb the big banks. What is required is a multi-prong approach, including special taxes, increased capital requirements, tighter supervision, and limits on size and risk-taking activities.
Such an approach won't prevent another crisis, but it would make one less likely – and less costly if it did occur.
Economic Cycles
Harold James commented:
"In the nineteenth-century world, people rapidly picked themselves up after downturns and went back to business as usual. In that sense, the phenomenon of the business cycle looked relatively permanent and unchanging. Nowadays, however, a cyclical collapse comes as a great surprise. In its aftermath, we start to reinvent our view of economics. Every ten years or so, we think that a particular model of growth is so broken that it cannot be resurrected. The world needed to be rethought in 1979, 1989, 1998, and 2008."
"[…] But each wave of collapse breeds a greater degree of disillusion about particular institutions, which are blamed for the outcome. It may be the welfare state in the 1970’s, the Communist Party apparatus in the 1980’s, the Asian industry and trade ministries in the 1990’s, or the nexus of the US Treasury and Wall Street in the 2000’s."
"As each institution is eroded, there is less and less left in the way of alternatives. That is also true of currencies."
"The dollar has been knocked off its pedestal by the crisis, but any conceivable substitute is obviously even more flawed and more problematical. The euro is the composite currency of an area with a poor growth record and an inadequate response to the economic crisis. The renminbi is still non-convertible. So there is no master currency at all any more."
4.12.09
2.12.09
30.11.09
Global Financial Rules
Accordingly with Lorenzo Bini Smaghi:
"[…] if financing were to become easier, it would be unclear how both creditors and debtors would perceive the risk of excessive imbalances. The real danger is that adjustment would take place even later, with imbalances left to accumulate for a longer period of time. Under these circumstances, crises could be even greater, and the adjustments harsher – as occurred under the last world currency, the gold standard."
"A viable international financial system requires a mechanism to keep imbalances in check. An essential element of such a mechanism is to give the IMF a prominent role in two areas: strong and effective surveillance in order to prevent crises, and responsible lending to countries in need, but with appropriate limits and conditionality."
"We don’t need to reinvent the wheel; we just need to follow up on the commitments made ten years ago. Dealing with the short-run challenges of the current crisis should not distract us from the objective of preventing future meltdowns."
"The right reform for the Fed"
En The Washington Post Ben Bernanke apunta "The right reform for the Fed" - Now more than ever - [...] needs a strong, nonpolitical and independent central bank with the tools to promote financial stability and to help steer our economy to recovery without inflation.
Adicionalmente:
"Working with other agencies, we have toughened our rules and oversight. We will be requiring banks to hold more capital and liquidity and to structure compensation packages in ways that limit excessive risk-taking. We are taking more explicit account of risks to the financial system as a whole."
"We are also supplementing bank examination staffs with teams of economists, financial market specialists and other experts. This combination of expertise, a unique strength of the Fed, helped bring credibility and clarity to the "stress tests" of the banking system conducted in the spring. These tests were led by the Fed and marked a turning point in public confidence in the banking system."
"There is a strong case for a continued role for the Federal Reserve in bank supervision. Because of our role in making monetary policy, the Fed brings unparalleled economic and financial expertise to its oversight of banks, as demonstrated by the success of the stress tests."
Source: The Washington Post
Adicionalmente:
"Working with other agencies, we have toughened our rules and oversight. We will be requiring banks to hold more capital and liquidity and to structure compensation packages in ways that limit excessive risk-taking. We are taking more explicit account of risks to the financial system as a whole."
"We are also supplementing bank examination staffs with teams of economists, financial market specialists and other experts. This combination of expertise, a unique strength of the Fed, helped bring credibility and clarity to the "stress tests" of the banking system conducted in the spring. These tests were led by the Fed and marked a turning point in public confidence in the banking system."
"There is a strong case for a continued role for the Federal Reserve in bank supervision. Because of our role in making monetary policy, the Fed brings unparalleled economic and financial expertise to its oversight of banks, as demonstrated by the success of the stress tests."
Source: The Washington Post
JEP gana el Premio Cervantes
José Emilio Pacheco, galardonado con el Premio Cervantes 2009
Ministerio de Cultura
Cuarto mexicano en ganar el Cervantes
Ministerio de Cultura
Cuarto mexicano en ganar el Cervantes
26.11.09
"Africa at Risk "
Accordingly with Meles Zenawi
"[...] Africa is the only continent that has not industrialized. Indeed, since 1980’s the industrialization that had taken place in Africa has by and large been reversed. Africa has thus contributed nothing to the historical accumulation of greenhouse gases through carbon-based industrialization. Moreover, its current contribution is also negligible, practically all of it coming from deforestation and degradation of forests and farmland."
"[...] Africa is the only continent that has not industrialized. Indeed, since 1980’s the industrialization that had taken place in Africa has by and large been reversed. Africa has thus contributed nothing to the historical accumulation of greenhouse gases through carbon-based industrialization. Moreover, its current contribution is also negligible, practically all of it coming from deforestation and degradation of forests and farmland."
24.11.09
S&P/Case-Shiller Home Price Indices
"Data through September 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index improved in the third quarter of 2009, posting its second consecutive quarterly increase and further improvement in its annual rate of return."
"The 10-City and 20-City Composites continue to show monthly improvement in their annual return figures. Both composites emerged from double-digit annual declines with September’s report, the first time in 21 months. In addition, 19 of the 20 metro areas saw improvement in their annual returns compared to the previous month, Cleveland being the only exception." Full Report
23.11.09
Only time will tell
Accordingly with Barry Eichengreen:
"China is making a big push to encourage greater international use of its currency, the renminbi. It has an agreement with Brazil to facilitate use of the two countries’ currencies in bilateral trade transactions. It has signed renminbi swap agreements with Argentina, Belarus, Hong Kong, Indonesia, South Korea, and Malaysia. Last summer, it expanded renminbi settlement agreements between Hong Kong and five mainland cities, and authorized HSBC Holdings to sell renminbi bonds in Hong Kong. Then, in September, the Chinese government issued in Hong Kong about $1 billion worth of its own renminbi-denominated bonds."
"All of these initiatives are aimed at reducing dependence on the dollar both at home and abroad by encouraging importers, exporters, and investors to make more use of China’s currency. The ultimate goal is to ensure that China eventually gains the flexibility and financial prerogatives that come with being a reserve-currency country."
"China is making a big push to encourage greater international use of its currency, the renminbi. It has an agreement with Brazil to facilitate use of the two countries’ currencies in bilateral trade transactions. It has signed renminbi swap agreements with Argentina, Belarus, Hong Kong, Indonesia, South Korea, and Malaysia. Last summer, it expanded renminbi settlement agreements between Hong Kong and five mainland cities, and authorized HSBC Holdings to sell renminbi bonds in Hong Kong. Then, in September, the Chinese government issued in Hong Kong about $1 billion worth of its own renminbi-denominated bonds."
"All of these initiatives are aimed at reducing dependence on the dollar both at home and abroad by encouraging importers, exporters, and investors to make more use of China’s currency. The ultimate goal is to ensure that China eventually gains the flexibility and financial prerogatives that come with being a reserve-currency country."
Start with Free Elections
Accordingly with Daron Acemoglu:
"And yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions - the rule of law and security and a governing system that offers opportunities to achieve and innovate. That's what determines the haves from the have-nots - not geography or weather or technology or disease or ethnicity."
"Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments."
"And yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions - the rule of law and security and a governing system that offers opportunities to achieve and innovate. That's what determines the haves from the have-nots - not geography or weather or technology or disease or ethnicity."
"Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments."
20.11.09
PIB de México
De acuerdo con INEGI
"En su comparación anual, el PIB disminuyó 6.2% en el lapso julio-septiembre de este año con relación a igual trimestre de 2008; producto de las caídas en las tres grandes actividades que lo conforman."
"En su comparación anual, el PIB disminuyó 6.2% en el lapso julio-septiembre de este año con relación a igual trimestre de 2008; producto de las caídas en las tres grandes actividades que lo conforman."
Por componentes, las Actividades Terciarias descendieron 6.5% y las Secundarias lo hicieron en 6.6%; en tanto que las Actividades Primarias mostraron una variación de -1.1% en el tercer trimestre de 2009 con relación al mismo trimestre del año previo.
"La economía del país registró una variación anual de -8.1% en los primeros nueve meses de este año. Por grandes grupos de actividades, el PIB de las Actividades Secundarias mostró una reducción de -9.3%, el de las Terciarias -8% y el de las Primarias aumentó 0.9%, en el lapso en cuestión."
Cifras desestacionalizadas muestran que PIB del tercer trimestre de 2009 presenta un nivel similar al registrado en el primer trimestre de 2005, y la peor contracción observada en el penúltimo trimestre del año en las últimas dos décadas. Considerando tasas interanuales si la economía mexicana experimenta una contracción de 3.5% en el último trimestre del año, al cierre de 2009 la actividad económica presentará una caída de 7% (la peor de América Latina)
Cifras desestacionalizadas muestran que PIB del tercer trimestre de 2009 presenta un nivel similar al registrado en el primer trimestre de 2005, y la peor contracción observada en el penúltimo trimestre del año en las últimas dos décadas. Considerando tasas interanuales si la economía mexicana experimenta una contracción de 3.5% en el último trimestre del año, al cierre de 2009 la actividad económica presentará una caída de 7% (la peor de América Latina)
NO al "Rentismo"
Según Denise Dresser:
"El problema de México es no la falta de acuerdos, sino la prolongación de un pacto inequitativo que lleva a la concentración de la riqueza en pocas manos; un pacto ineficiente porque inhibe el crecimiento económico acelerado; un pacto autosustentable porque sus beneficiarios no lo quieren alterar; un pacto corporativo que Felipe Calderón -a veces- critica, pero cuyo gobierno no logra reescribir apelando a los ciudadanos. Y así como durante siglos hubo un consenso en torno a que la tierra era plana, en el país prevalece un consenso para no cambiar."
19.11.09
Thik the worst is over? Wrong - US Unemployment
Accordingly with Nouriel Roubini:
"[The jobs just are not coming back] There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation."
"[...] it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more."
18.11.09
Bernanke's Outlook for the Economy
"On the Outlook for the Economy and Policy" by Ben Bernanke
"How the economy will evolve in 2010 and beyond is less certain. On the one hand, those who see further weakness or even a relapse into recession next year point out that some of the sources of the recent pickup--including a reduced pace of inventory liquidation and limited-time policies such as the 'cash for clunker' program--are likely to provide only temporary support to the economy. On the other hand, those who are more optimistic point to indications of more fundamental improvements, including strengthening consumer spending outside of autos, a nascent recovery in home construction, continued stabilization in financial conditions, and stronger growth abroad."
"My own view is that the recent pickup reflects more than purely temporary factors and that continued growth next year is likely. However, some important headwinds--in particular, constrained bank lending and a weak job market--likely will prevent the expansion from being as robust as we would hope."
A New World Architecture
Accordingly with George Soros:"Twenty years after the fall of the Berlin Wall and the collapse of communism, the world is facing another stark choice between two fundamentally different forms of organization: international capitalism and state capitalism. The former, represented by the United States, has broken down, and the latter, represented by China, is on the rise. Following the path of least resistance will lead to the gradual disintegration of the international financial system. A new multilateral system based on sounder principles must be invented."
17.11.09
Medidas ante la Inseguridad
Consulta Mitofsky publicó hace algunos días la encuesta "Medidas ante la inseguridad / Opiniones Ciudadanas"; algunos resultados son:
"Cuando se revisan los 8 conceptos evaluados, vemos que el incremento de castigos y los retenes son las medidas más aceptadas [Feb07 94.8% y 86.8% contra Jul09 96.6% y 90.4% respectivamente]. Aparece con alta aprobación la 'pena de muerte a delitos graves [76.6%] y alcanza mayoría de desaprobación 'hacerse justicia por propia mano' [Feb07 71.6% contra Jul09 51.4%], medida a todas luces inadecuada y generadora de mayores problemas ya que significaría la renuncia ciudadana a vivir en un estado de derecho regido por las leyes."
Un análisis sobre los resultados se puede encontrar en José Antonio Crespo.
Fuente: Consulta Mitofsky & Excélsior
"Cuando se revisan los 8 conceptos evaluados, vemos que el incremento de castigos y los retenes son las medidas más aceptadas [Feb07 94.8% y 86.8% contra Jul09 96.6% y 90.4% respectivamente]. Aparece con alta aprobación la 'pena de muerte a delitos graves [76.6%] y alcanza mayoría de desaprobación 'hacerse justicia por propia mano' [Feb07 71.6% contra Jul09 51.4%], medida a todas luces inadecuada y generadora de mayores problemas ya que significaría la renuncia ciudadana a vivir en un estado de derecho regido por las leyes."
Un análisis sobre los resultados se puede encontrar en José Antonio Crespo.
Fuente: Consulta Mitofsky & Excélsior
Por una estrategia de largo plazo
De acuerdo con Jorge Chabat"Si los 'grupos rudos' de Mauricio Fernández prosperaran, ¿a quién habría que llamar luego para combatirlos? ¿A otros grupos de limpieza todavía más rudos?"
"Ciertamente, es más fácil plantear salidas espectaculares que tener una estrategia de largo plazo que resuelva el problema. Lo primero da votos —aunque al final también da más víctimas. Lo segundo tiene costos políticos. Mauricio Fernández está actuando simplemente como un político oportunista: plantea 'soluciones' que le van a dar apoyo popular inmediato, como la introducción de los sapos en Australia. El problema será cuando los sapos se conviertan en plaga. Pero tal vez para entonces él ya no será alcalde de San Pedro Garza García. Esa ya no será su bronca. Será de los habitantes de ese municipio, algunos de quienes hoy aplauden entusiastas la llegada de los sapos cañeros…"
Fuente: El Universal
12.11.09
WSJ survey
Findings of the last (Nov09) WSJ survey:
"On average [analysts] expect the Federal Reserve to raise interest rates around September 2010, a politically sensitive time considering midterm elections will be right around the corner and unemployment is forecast to still be over 9.5%."
"Emerging markets and commodities are the most likely places for another bubble to develop, according to economists, but they only put slightly better than 1-in-3 odds of such an unsustainable run-up in asset prices occurring in the next two years."
"More than half of the respondents see a U-shaped recovery with some slowness followed by solid growth, and 31% forecast a stronger, V-shaped recovery. Just 11% of economists expect an L-shaped rebound where economic activity stabilizes at a low level, and only 7% see a double-dip recession—another drop in gross domestic product after a short rebound—as the most likely scenario."
"On average [analysts] expect the Federal Reserve to raise interest rates around September 2010, a politically sensitive time considering midterm elections will be right around the corner and unemployment is forecast to still be over 9.5%."
"Emerging markets and commodities are the most likely places for another bubble to develop, according to economists, but they only put slightly better than 1-in-3 odds of such an unsustainable run-up in asset prices occurring in the next two years."
"More than half of the respondents see a U-shaped recovery with some slowness followed by solid growth, and 31% forecast a stronger, V-shaped recovery. Just 11% of economists expect an L-shaped rebound where economic activity stabilizes at a low level, and only 7% see a double-dip recession—another drop in gross domestic product after a short rebound—as the most likely scenario."
Source: WSJ
11.11.09
Cobrar Conciencia
De acuerdo con Mauricio Merino:
"[L]a confianza se hace trizas y los mexicanos vemos cómo se van rindiendo, poco a poco, las instituciones destinadas a proteger nuestros derechos sustantivos. Es un error gravísimo y lo menos que puede pedirse es cobrar conciencia de estos hechos, antes que mandar al diablo las instituciones."
Fuente: El Universal
"[L]a confianza se hace trizas y los mexicanos vemos cómo se van rindiendo, poco a poco, las instituciones destinadas a proteger nuestros derechos sustantivos. Es un error gravísimo y lo menos que puede pedirse es cobrar conciencia de estos hechos, antes que mandar al diablo las instituciones."
Fuente: El Universal
10.11.09
Doom & LAM (Capital Controls & Outlook)
Un par de artículos sobre LAM por Dr. Doom
Capital Controls
"The danger, of course, is that even when controls are removed, capital inflows will not return. However, as economist Willem Buiter noted in February: 'The example of Malaysia, which imposed capital controls during the Asian crisis of 1997 suggests that foreign capital either has a short memory or can be convinced'."
Latin America Outlook
"Though global liquidity will remain elevated in the upcoming quarters, favoring Latin American asset classes, market anxiety about the timing of exit strategies around the world represents a significant risk. Miscalculations in exit strategies and disappointing economic results pose the main risks to Latin American market dynamics in 2010."
Source: Forbes.com
Capital Controls
"The danger, of course, is that even when controls are removed, capital inflows will not return. However, as economist Willem Buiter noted in February: 'The example of Malaysia, which imposed capital controls during the Asian crisis of 1997 suggests that foreign capital either has a short memory or can be convinced'."
Latin America Outlook
"Though global liquidity will remain elevated in the upcoming quarters, favoring Latin American asset classes, market anxiety about the timing of exit strategies around the world represents a significant risk. Miscalculations in exit strategies and disappointing economic results pose the main risks to Latin American market dynamics in 2010."
Source: Forbes.com
Are potential "asset-price bubbles" always dangerous?
En un artículo publicado en Financial Times Frederic Mishkin identifica dos tipos de asset-bubbles: "pure irrational exuberance bubble" (Mild) y "a credit boom bubble" (Severe). Las burbujas del segundo tipo (feedback loop) presentan las siguientes características:
"[…] exuberant expectations about economic prospects or structural changes in financial markets lead to a credit boom. The resulting increased demand for some assets raises their price and, in turn, encourages further lending against these assets, increasing demand, and hence their prices, even more, creating a positive feedback loop. This feedback loop involves increasing leverage, further easing of credit standards, then even higher leverage, and the cycle continues. [...] Eventually, the bubble bursts and asset prices collapse, leading to a reversal of the feedback loop."
A diferencia de la perspectiva de Dr. Doom, Mishkin señala que:
"But if bubbles are a possibility now, does it look like they are of the dangerous, credit boom variety? At least in the US and Europe, the answer is clearly no. Our problem is not a credit boom, but that the deleveraging process has not fully ended. Credit markets are still tight and are presenting a serious drag on the economy."
Source: FT.com
"[…] exuberant expectations about economic prospects or structural changes in financial markets lead to a credit boom. The resulting increased demand for some assets raises their price and, in turn, encourages further lending against these assets, increasing demand, and hence their prices, even more, creating a positive feedback loop. This feedback loop involves increasing leverage, further easing of credit standards, then even higher leverage, and the cycle continues. [...] Eventually, the bubble bursts and asset prices collapse, leading to a reversal of the feedback loop."
A diferencia de la perspectiva de Dr. Doom, Mishkin señala que:
"But if bubbles are a possibility now, does it look like they are of the dangerous, credit boom variety? At least in the US and Europe, the answer is clearly no. Our problem is not a credit boom, but that the deleveraging process has not fully ended. Credit markets are still tight and are presenting a serious drag on the economy."
Source: FT.com
De la tortillería al Diseño de Software
Denise Dresser plantea retos y describe el deplorable estado de la educación en México. Considero que "La Revolución Educativa" es la gran reforma que México necesita. Citó:
"[…] Urge derribar la pared mediante un cambio de actitud, un cambio en los maestros y un cambio en las reglas. Urge un conocimiento básico de la deplorable situación de la educación actual para reformarla, porque de momento tenemos lo que nos ofrece y con eso nos conformamos. Urge mejorar a los maestros, porque ningún cambio puede hacerse sin o contra ellos, pero tampoco ningún cambio significativo puede dejar sin modificar profundamente la estructura institucional vigente, creada para un modelo autoritario y vertical, corporativo y opaco. Urge cambiar las reglas para que la educación no sea vista como un instrumento de ingeniería social del régimen o de reclutamiento electoral del gobierno, sino un trampolín para la prosperidad de los mexicanos."
Fuente: El Mañana
"[…] Urge derribar la pared mediante un cambio de actitud, un cambio en los maestros y un cambio en las reglas. Urge un conocimiento básico de la deplorable situación de la educación actual para reformarla, porque de momento tenemos lo que nos ofrece y con eso nos conformamos. Urge mejorar a los maestros, porque ningún cambio puede hacerse sin o contra ellos, pero tampoco ningún cambio significativo puede dejar sin modificar profundamente la estructura institucional vigente, creada para un modelo autoritario y vertical, corporativo y opaco. Urge cambiar las reglas para que la educación no sea vista como un instrumento de ingeniería social del régimen o de reclutamiento electoral del gobierno, sino un trampolín para la prosperidad de los mexicanos."
Fuente: El Mañana
9.11.09
"Es que soy bajo de pecho"
A propósito de las declaraciones de la semana pasada. Comparto un interesante artículo sobre "el fin" de la recesión en México.
De acuerdo con Arturo Herrera:
"¿[C]ómo se determina cuándo finaliza una recesión? Ésta es una pregunta que ha acompañado a la macroeconomía casi desde su inicio, las metodologías usualmente aceptadas son las desarrolladas por el National Bureau of Economic Research (NBER) en Estados Unidos. El criterio que por mucho tiempo utilizó esta organización (y que por cierto se sigue manteniendo en muchos países) es que un periodo de expansión termina cuando hay dos caídas consecutivas en términos reales en la serie desestacionalizada (es decir la que ajusta asuntos estacionales como navidad, vacaciones de semana santa, etc.) del Producto Interno Bruto (PIB) trimestral. Dos trimestres, no uno. De manera simétrica, una recesión terminaría cuando el PIB crece durante dos trimestres consecutivos."
"Esto del sobreoptimismo y la aversión a la pérdida me hacen recordar a Obelix, el robusto personaje del cómic francés Asterix y Obelix. Cuando sus amigos en son de broma le recuerdan que está gordito, Obelix responde indignado que eso es falso, lo que pasa dice, 'es que soy bajo de pecho'."
Fuente: El País
De acuerdo con Arturo Herrera:
"¿[C]ómo se determina cuándo finaliza una recesión? Ésta es una pregunta que ha acompañado a la macroeconomía casi desde su inicio, las metodologías usualmente aceptadas son las desarrolladas por el National Bureau of Economic Research (NBER) en Estados Unidos. El criterio que por mucho tiempo utilizó esta organización (y que por cierto se sigue manteniendo en muchos países) es que un periodo de expansión termina cuando hay dos caídas consecutivas en términos reales en la serie desestacionalizada (es decir la que ajusta asuntos estacionales como navidad, vacaciones de semana santa, etc.) del Producto Interno Bruto (PIB) trimestral. Dos trimestres, no uno. De manera simétrica, una recesión terminaría cuando el PIB crece durante dos trimestres consecutivos."
"Esto del sobreoptimismo y la aversión a la pérdida me hacen recordar a Obelix, el robusto personaje del cómic francés Asterix y Obelix. Cuando sus amigos en son de broma le recuerdan que está gordito, Obelix responde indignado que eso es falso, lo que pasa dice, 'es que soy bajo de pecho'."
Fuente: El País
6.11.09
4.11.09
TWENTY YEARS AGO
En esta nota citó algunos artículos en los que se realiza una evaluación de la esperanza y progreso, la ambigüedad del What if, y el cambio en la geopolítica (el nacimiento de la Asia Moderna) tras la caída del muro de Berlín.
Ian Buruma invita a la promoción de la justicia, la equidad y la libertad en el mundo:
"Still, 1989 was a good time to be alive (except in China, where the democrats were put down). Many of us felt that we were seeing the dawn of a new liberal age, in which freedom and justice would spread, like fresh flowers, across the globe. Twenty years on, we know this was not to be."
"[…] what is needed to revive liberal idealism is a set of new ideas on how to promote justice, equality and freedom in the world. Reagan, Thatcher, and Gorbachev, assisted in the end of an ideology, which once offered hope, and inspired real progress, but resulted in slavery and mass murder. We are still waiting for a new vision, which will lead to progress, but this time, we hope, without tyranny."
Por otra parte, Meyer nos plantea un escenario What if Evolución vs. Revolución
"[What if] Strictly speaking, the Wall would not have fallen. It would have been opened, not breached. The Communists, not the people, would have done it. Change might have come by evolution, not revolution. Might Krenz (Communist boss of the German Democratic Republic) and the Communist reformers who had seized power just weeks earlier have been able to channel popular unrest, or even defuse it? Instead of a unified Germany today, could there still be two Germanys, East and West?"
Finalmente, Chellaney señala la reconfiguración geopolítica global a partir de la caída del muro y enfatiza el nuevo rol económico de Asia.
"For Asia, the most important consequence of the fall of the Berlin Wall was that the collapse of communism produced a shift from the primacy of military power to economic power in shaping the international order. To be sure, rapid economic growth also occurred during the Industrial Revolution and in the post-WWII period. But in the post-Cold War period, economic growth by itself has contributed to altering global power relations."
Ian Buruma invita a la promoción de la justicia, la equidad y la libertad en el mundo:
"Still, 1989 was a good time to be alive (except in China, where the democrats were put down). Many of us felt that we were seeing the dawn of a new liberal age, in which freedom and justice would spread, like fresh flowers, across the globe. Twenty years on, we know this was not to be."
"[…] what is needed to revive liberal idealism is a set of new ideas on how to promote justice, equality and freedom in the world. Reagan, Thatcher, and Gorbachev, assisted in the end of an ideology, which once offered hope, and inspired real progress, but resulted in slavery and mass murder. We are still waiting for a new vision, which will lead to progress, but this time, we hope, without tyranny."
Por otra parte, Meyer nos plantea un escenario What if Evolución vs. Revolución
"[What if] Strictly speaking, the Wall would not have fallen. It would have been opened, not breached. The Communists, not the people, would have done it. Change might have come by evolution, not revolution. Might Krenz (Communist boss of the German Democratic Republic) and the Communist reformers who had seized power just weeks earlier have been able to channel popular unrest, or even defuse it? Instead of a unified Germany today, could there still be two Germanys, East and West?"
Finalmente, Chellaney señala la reconfiguración geopolítica global a partir de la caída del muro y enfatiza el nuevo rol económico de Asia.
"For Asia, the most important consequence of the fall of the Berlin Wall was that the collapse of communism produced a shift from the primacy of military power to economic power in shaping the international order. To be sure, rapid economic growth also occurred during the Industrial Revolution and in the post-WWII period. But in the post-Cold War period, economic growth by itself has contributed to altering global power relations."
3.11.09
RBS & Lloyds get 31.3 billion pounds in second Bank Bailout
"Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc will receive 31.3 billion pounds ($51 billion) in a second bailout from the U.K. taxpayer as the two banks agreed to cap bonuses.""Today’s bailout for RBS and Lloyds follows the 37 billion pounds the two lenders received last year and will bring the government’s stake in RBS to more than 84 percent from 70 percent. Barclays Plc, the U.K.’s second-biggest bank, and HSBC Holdings Plc, Europe’s largest, haven’t taken state aid."
See Bloomberg for the full article
Risky asset prices have risen too much, too soon
De acuerdo con Nouriel Roubini:
"Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply, while government bond yields have gently increased but stayed low and stable."
"Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply, while government bond yields have gently increased but stayed low and stable."
"Easy money, quantitative easing, credit easing and massive inflows of capital into the US via an accumulation of forex reserves by foreign central banks makes US fiscal deficits easier to fund and feeds the US equity and credit bubble."
Agrega:
Agrega:
"But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments."
Source: FT.com
30.10.09
Stocks Slide
According with NYT:
"Stocks plunged Friday in the face of weak consumer data, erasing a powerful rally the day before and ending a pattern of monthly gains."
"By the end of trading, the three major stock averages had more el tema dethan given up the 2 percent gains they made on Thursday, when enthusiasm over economic growth data sent stocks surging."
"The Dow Jones industrial average closed down 249.85 points, or 2.5 percent, to 9,712.73, according to preliminary calculations. The Standard and Poor’s 500-stock index was off 29.93 points, or 2.81 percent, to 1,036.18, and the Nasdaq composite showed a decline of 52.44 points, or 2.50 percent, to 2,045.11."
Meanwhile, VIX Volatility Index hits highest level since july.
29.10.09
US Economic Growth
Algunas reacciones a la cifra de crecimiento económico de EEUU correspondiente al tercer trimestre de 2009 - GDP’s 3.5% rise; y un cuadro comparativo de episodios de recuperación - Comparing Expansions (Interactive Graphics).
Economics Profession
Como respuesta a la crisis económica y financiera actual Akerlof y Stiglitz señalan la necesidad de nuevos desarrollos en la teoría económica. Recomiendan alejarse del equilibrio competitivo y la racionalidad de los agentes, y enfocarse en la economía experimental "Behavioral Economics", modelos de redes, modelos basados en agentes, modelos de innovación.
"[W]hile some economists were pushing the idea of self-regulating, fully efficient markets that always remain at full employment, other economists and social scientists have been exploring a variety of different approaches. [vs.] These include agent-based models that emphasize the diversity of circumstances; network models, which focus on the complex interrelations among firms (such as those that enable bankruptcy cascades); a fresh look at the neglected work of Hyman Minsky on financial crises (which have increased in frequency since deregulation began three decades ago); and innovation models, which attempt to explain the dynamics of growth."
Source: Project Syndicate
"[W]hile some economists were pushing the idea of self-regulating, fully efficient markets that always remain at full employment, other economists and social scientists have been exploring a variety of different approaches. [vs.] These include agent-based models that emphasize the diversity of circumstances; network models, which focus on the complex interrelations among firms (such as those that enable bankruptcy cascades); a fresh look at the neglected work of Hyman Minsky on financial crises (which have increased in frequency since deregulation began three decades ago); and innovation models, which attempt to explain the dynamics of growth."
Source: Project Syndicate
26.10.09
Hacer cumplir las Leyes
Gabriel Zaid señala que "la Democracia [en México] ha traído una obsesión legislativa", pero se necesita, "[…] Cumplir y hacer cumplir las leyes que ya existen es más urgente que negociar otras."
"Las imposibles Grandes Soluciones (que sirven para regatear ventajas partidarias o personales) son el pretexto perfecto para desentenderse de la buena solución posible en este caso, sin más, dentro de las leyes que ya existen. Cumplir y hacer cumplir las leyes que ya existen es más urgente que negociar otras. Antes que mejores leyes, urgen mejores gobiernos."
"Juzgar es gobernar. Un poder judicial que gobernara bien, empezando por su propia casa, haría mucha diferencia. La confianza en la justicia es capital para la democracia, y desgraciadamente no existe. Hay muchas quejas, y no todas se refieren al ministerio público y la policía. La mayor parte de los mexicanos no cree en la probidad de los jueces."
"Las imposibles Grandes Soluciones (que sirven para regatear ventajas partidarias o personales) son el pretexto perfecto para desentenderse de la buena solución posible en este caso, sin más, dentro de las leyes que ya existen. Cumplir y hacer cumplir las leyes que ya existen es más urgente que negociar otras. Antes que mejores leyes, urgen mejores gobiernos."
"Juzgar es gobernar. Un poder judicial que gobernara bien, empezando por su propia casa, haría mucha diferencia. La confianza en la justicia es capital para la democracia, y desgraciadamente no existe. Hay muchas quejas, y no todas se refieren al ministerio público y la policía. La mayor parte de los mexicanos no cree en la probidad de los jueces."
23.10.09
Social Democracia en América Latina
Según Jorge Lanzaro entre los gobiernos de izquierda de América latina se pueden identificar dos tipos: las manifestaciones populistas (Venezuela, Bolivia y Ecuador), y por otra parte las experiencias de tipo social democrático (Brasil, Chile y Uruguay).
[…] These social democrats were once part of a socialist, revolutionary, or reformist left, tightly allied with labor unions. But they ultimately accepted the market economy, and came to lean toward ideological moderation and to compete for votes in the political center. At the same time, motivated by their political competition and their own leftist ideology, these social democratic governments emphasize both economic growth and social inclusion.
El próximo 25 de octubre se celebrará la primera ronda de la elección presidencial en Uruguay. Después de haber gobernado bajo un esquema de mayoría con el apoyo de los grupos de izquierda y apoyos sindicales, el Frente Amplio (FA) y el Partido Nacional (PN) enfrentan una situación muy reñida por el voto.
Por un lado se ubica el candidato de centro-izquierda José Mujica con 48% de las preferencias electorales y en alianza con el ex-ministro de finanzas Danilo Astori. El PN de orientación centro-derecha muestra como candidato al ex-presidente Luis Alberto Lacalle con 30% de las intenciones. En caso de no lograr la mayoría absoluta alguno de los candidatos hacia el 29 de noviembre se celebrará una segunda ronda.
[…] These social democrats were once part of a socialist, revolutionary, or reformist left, tightly allied with labor unions. But they ultimately accepted the market economy, and came to lean toward ideological moderation and to compete for votes in the political center. At the same time, motivated by their political competition and their own leftist ideology, these social democratic governments emphasize both economic growth and social inclusion.
El próximo 25 de octubre se celebrará la primera ronda de la elección presidencial en Uruguay. Después de haber gobernado bajo un esquema de mayoría con el apoyo de los grupos de izquierda y apoyos sindicales, el Frente Amplio (FA) y el Partido Nacional (PN) enfrentan una situación muy reñida por el voto.
Por un lado se ubica el candidato de centro-izquierda José Mujica con 48% de las preferencias electorales y en alianza con el ex-ministro de finanzas Danilo Astori. El PN de orientación centro-derecha muestra como candidato al ex-presidente Luis Alberto Lacalle con 30% de las intenciones. En caso de no lograr la mayoría absoluta alguno de los candidatos hacia el 29 de noviembre se celebrará una segunda ronda.
For the moment, the patient is stable
Barry Eichengreen señala que es complicado poder determinar el valor tipo de cambio en el corto plazo (vs. euro o vs. yen o vs. renminbi o vs. una canasta de divisas), el mismo se equivoco en "Why Now is a Good Time to Sell the Dollar". Señala que la volatilidad del dólar en los últimos meses se origina por la re-configuración del apetito al riesgo global. Sin embargo dos factores estructurales deben de considerarse como claves:
The one thing that could precipitate the demise of the dollar would be reckless economic mismanagement in the US. One popular scenario is chronic inflation. But this is implausible. Once the episode of zero interest rates ends, the US Federal Reserve will be anxious to reassert its commitment to price stability. There may be a temptation to inflate away debt held by foreigners, but the fact is that the majority of US debt is held by Americans, who would constitute a strong constituency opposing the policy.
The other scenario is that US budget deficits continue to run out of control. Predictions of outright default are far-fetched. But high debts will mean high taxes. The combination of loose fiscal policy and tight monetary policy will mean high interest rates, sluggish investment, and slow growth. Foreigners – and residents – might well grow disenchanted with the currency of an economy with these characteristics.
The one thing that could precipitate the demise of the dollar would be reckless economic mismanagement in the US. One popular scenario is chronic inflation. But this is implausible. Once the episode of zero interest rates ends, the US Federal Reserve will be anxious to reassert its commitment to price stability. There may be a temptation to inflate away debt held by foreigners, but the fact is that the majority of US debt is held by Americans, who would constitute a strong constituency opposing the policy.
The other scenario is that US budget deficits continue to run out of control. Predictions of outright default are far-fetched. But high debts will mean high taxes. The combination of loose fiscal policy and tight monetary policy will mean high interest rates, sluggish investment, and slow growth. Foreigners – and residents – might well grow disenchanted with the currency of an economy with these characteristics.
Three stylized facts for achieving Growth
Accordingly with Michael Spence:
1) A 1% slowdown in advanced-country growth translates into roughly $350 billion of missing aggregate demand every year, in addition to the shortfall because of rebalancing in the US.
2) […] countries with current-account surpluses such as Germany, Japan and China must recognize that their own growth (and that of others) depends on reducing the global savings-investment imbalance, which will result in narrowing external deficits elsewhere. This needs to be done on a sustained basis following the withdrawal of extraordinary fiscal stimulus.
3) […] everyone must recognize their stake in restoring balanced advanced-country growth as much and as soon as possible in order to counter the ongoing shortfall in aggregate demand. After all, advanced countries account for about two-thirds of global GDP, so slow growth in these countries will inevitably impede global growth and truncate the growth potential of much of the developing world. This challenge, however, is very complex because deleveraging and rebalancing cannot be completed overnight.
1) A 1% slowdown in advanced-country growth translates into roughly $350 billion of missing aggregate demand every year, in addition to the shortfall because of rebalancing in the US.
2) […] countries with current-account surpluses such as Germany, Japan and China must recognize that their own growth (and that of others) depends on reducing the global savings-investment imbalance, which will result in narrowing external deficits elsewhere. This needs to be done on a sustained basis following the withdrawal of extraordinary fiscal stimulus.
3) […] everyone must recognize their stake in restoring balanced advanced-country growth as much and as soon as possible in order to counter the ongoing shortfall in aggregate demand. After all, advanced countries account for about two-thirds of global GDP, so slow growth in these countries will inevitably impede global growth and truncate the growth potential of much of the developing world. This challenge, however, is very complex because deleveraging and rebalancing cannot be completed overnight.
21.10.09
Our distrust is very expensive
It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence. Kenneth Arrow
Accoringly with Davies:
"That fall in confidence affected banks, the stock market, and the government and its regulators. Furthermore, the survey [Financial Trust Index] showed that declining trust was strongly correlated with financial behavior. In other words, if your trust in the market and in the way it is regulated fell sharply, you were less likely to deposit money in banks or invest in stocks. So falling trust had real economic consequences."
Accoringly with Davies:"That fall in confidence affected banks, the stock market, and the government and its regulators. Furthermore, the survey [Financial Trust Index] showed that declining trust was strongly correlated with financial behavior. In other words, if your trust in the market and in the way it is regulated fell sharply, you were less likely to deposit money in banks or invest in stocks. So falling trust had real economic consequences."
20.10.09
Sweden’s Financial Crisis Synthesis
Bäckstrom sintetiza los efectos de la crisis financiera que sufrió Suecia a principios de la década de los noventa.
a) Most of the banking system fell into deep crisis. One bank went into liquidation, while the rest of the system required extensive governmental emergency aid.
b) Property values fell by approximately 35% over four years. Equities fell by 55% over a three-year period.
c) Despite the central bank’s 500% interest rate, it was impossible to defend the Swedish krona, which was pegged to the euro’s forerunner, the European Currency Unit or Ecu. The krona depreciated by around 25% in the autumn of 1992, a year after the crisis began.
d) The crisis triggered a sharp economic downturn. GDP fell by 7% over three years, and unemployment rose by 7% over five years.
e) During a three-year period, government debt increased by about 50%, with the public deficit reaching 12% of GDP. Falling GDP led to declining tax revenues, while rising unemployment led to an automatic increase in public expenditure.
a) Most of the banking system fell into deep crisis. One bank went into liquidation, while the rest of the system required extensive governmental emergency aid.
b) Property values fell by approximately 35% over four years. Equities fell by 55% over a three-year period.
c) Despite the central bank’s 500% interest rate, it was impossible to defend the Swedish krona, which was pegged to the euro’s forerunner, the European Currency Unit or Ecu. The krona depreciated by around 25% in the autumn of 1992, a year after the crisis began.
d) The crisis triggered a sharp economic downturn. GDP fell by 7% over three years, and unemployment rose by 7% over five years.
e) During a three-year period, government debt increased by about 50%, with the public deficit reaching 12% of GDP. Falling GDP led to declining tax revenues, while rising unemployment led to an automatic increase in public expenditure.
Greenhouse gases numbers
Nicholas Stern apunta algunas posibles tendencias, consecuencias y recomendaciones sobre el efecto de los gases de efecto invernadero:
1. Concentrations of carbon dioxide and other greenhouse gases in the atmosphere have reached 435 parts per million (ppm) of CO2-equivalent, compared with about 280 ppm before industrialization in the nineteenth century.
2. [C]oncentrations could reach 750 ppm by the end of the century. Should that happen, the probable rise in global average temperature relative to pre-industrial times will be 5˚C or more.
3. It has been more than 30 million years since the earth’s temperature was that high [5˚C]. The human species, which has been around for no more than 200,000 years, would have to deal with a more hostile physical environment than it has ever experienced.
4. To avoid the severe risks that would result from a rise in global average temperature of more than 2˚C, we must get atmospheric concentrations below 450 ppm. This will require a cut in annual global emissions from about 50 gigatonnes of CO2-equivalent today to below 35 gigatonnes in 2030, and less than 20 gigatonnes by 2050.
5. Today, per-capita annual emissions in the European Union are 12 tonnes, and 23.6 tonnes in the United States, compared to six tons for China and 1.7 tons for India. As the projections for 2050 suggest that the world’s population will be about nine billion, annual per-capita emissions must be reduced to approximately two tons of CO2-equivalent, on average, if the global annual total is to be less than 20 gigatonnes.
1. Concentrations of carbon dioxide and other greenhouse gases in the atmosphere have reached 435 parts per million (ppm) of CO2-equivalent, compared with about 280 ppm before industrialization in the nineteenth century.
2. [C]oncentrations could reach 750 ppm by the end of the century. Should that happen, the probable rise in global average temperature relative to pre-industrial times will be 5˚C or more.
3. It has been more than 30 million years since the earth’s temperature was that high [5˚C]. The human species, which has been around for no more than 200,000 years, would have to deal with a more hostile physical environment than it has ever experienced.
4. To avoid the severe risks that would result from a rise in global average temperature of more than 2˚C, we must get atmospheric concentrations below 450 ppm. This will require a cut in annual global emissions from about 50 gigatonnes of CO2-equivalent today to below 35 gigatonnes in 2030, and less than 20 gigatonnes by 2050.
5. Today, per-capita annual emissions in the European Union are 12 tonnes, and 23.6 tonnes in the United States, compared to six tons for China and 1.7 tons for India. As the projections for 2050 suggest that the world’s population will be about nine billion, annual per-capita emissions must be reduced to approximately two tons of CO2-equivalent, on average, if the global annual total is to be less than 20 gigatonnes.
19.10.09
¿Coraje? ¿Audacia Reformista?
Denise Dresser en El Mañana apunta sobre la decisión de liquidar LyFC.
Sin duda el Presidente ha demostrado en días recientes la intención de combatir privilegios, confrontar cotos y desmantelar cuellos de botella que han retrasado la modernización de México. Ahora le falta hacerlo consistentemente. Ahora necesita enseñar que los cojones tan celebrados están bien puestos, y que los usará para enfrentar intereses atrincherados dondequiera que estén: tanto en la izquierda como en la derecha; tanto en el mundo sindical como en el ámbito empresarial. Porque si no lo hace, la confrontación con el Sindicato Mexicano de Electricistas terminará por ser una demostración de fuerza, más que un acto de buen gobierno.
El Presidente ha desplegado valor para cerrar una empresa ineficaz, pero no el suficiente como para impedir su simple absorción por parte de otro monopolio público con pocos incentivos para ofrecer un servicio mejor y más barato.
Sin duda el Presidente ha demostrado en días recientes la intención de combatir privilegios, confrontar cotos y desmantelar cuellos de botella que han retrasado la modernización de México. Ahora le falta hacerlo consistentemente. Ahora necesita enseñar que los cojones tan celebrados están bien puestos, y que los usará para enfrentar intereses atrincherados dondequiera que estén: tanto en la izquierda como en la derecha; tanto en el mundo sindical como en el ámbito empresarial. Porque si no lo hace, la confrontación con el Sindicato Mexicano de Electricistas terminará por ser una demostración de fuerza, más que un acto de buen gobierno.
El Presidente ha desplegado valor para cerrar una empresa ineficaz, pero no el suficiente como para impedir su simple absorción por parte de otro monopolio público con pocos incentivos para ofrecer un servicio mejor y más barato.
Too low for too long
John Taylor considera que la prevención de Burbujas en los precios de los activos, se logra con la no creación [To Prevent Bubbles, Don’t Create Them]
"By deviating from the rule and keeping interest rates too low, the Fed caused the acceleration in housing prices. If the Fed had simply conducted monetary policy as it had in the 1980s and 1990s, we would likely not have had the housing boom"
" […] adding asset prices to the equation [Taylor Rule] would not address the real problem. Saying that adding asset prices to the central bank’s rule would prevent bubbles is like saying that requiring hikers in the forest to carry cell phones to call the fire department will prevent the damage from forest fires they start. By the time they call and the fire trucks arrive, the heat and flames will have caused tremendous damage. Far better to prevent hikers from starting fires in the first place. Far better for central bankers not to create bubbles in the first place."
"By deviating from the rule and keeping interest rates too low, the Fed caused the acceleration in housing prices. If the Fed had simply conducted monetary policy as it had in the 1980s and 1990s, we would likely not have had the housing boom"
" […] adding asset prices to the equation [Taylor Rule] would not address the real problem. Saying that adding asset prices to the central bank’s rule would prevent bubbles is like saying that requiring hikers in the forest to carry cell phones to call the fire department will prevent the damage from forest fires they start. By the time they call and the fire trucks arrive, the heat and flames will have caused tremendous damage. Far better to prevent hikers from starting fires in the first place. Far better for central bankers not to create bubbles in the first place."
15.10.09
IRENA
Kandeh Yumkella in Project-Syndicate
A decade ago, renewable energy was viewed as an unwelcome offspring of fossil fuels, but the recent establishment of the International Renewable Energy Agency (IRENA) indicates that governments worldwide are taking “renewables” seriously. With mounting concerns about climate change and volatility in oil and other fossil-fuel prices, renewables are finally becoming a viable proposition.
Big business is spending billions of dollars to explore the opportunities that renewables can bring. There are serious plans to turn the Sahara desert’s heat and sunlight into Europe’s major power source, supplying energy to half a billion people. Some estimates suggest it could cost up to $60 billion to start sending Sahara power to Europe a decade from now. With public support, progress could be much faster. The price tags are huge, but the current economic and financial crisis has taught us not to be afraid of ten-digit numbers.
14.10.09
Multidisciplinary Research, Nobel Prize 2009
The Nobel committee’s decision, like earlier awards to Amartya Sen[,] Daniel Kahneman [and Coase] is a welcome shot in the arm for research that crosses disciplinary boundaries in the social sciences.
Source: ECONOMIST.com
Source: ECONOMIST.com
13.10.09
Current financial crisis stylized facts (Export-Led vs. Dollar Crisis)
These stylized facts follow Kenneth Rogoff’s article
1. Global Imbalances – euphemism for the huge US trade deficit and the corresponding trade surpluses elsewhere, not least China (70% of the excess funds saved by China, Japan, Germany, Russia and Saudi Arabia).
2. Cheap money from abroad juiced an already fragile financial regulatory and supervisory structure that needed discipline more than cash.
3. America’s current-account deficit has now shrunk to just 3% of its annual income, compared to nearly 7% a few years ago.
4. Reinhart & Rogoff find that if financial crises hold one lesson, it is that their aftereffects have a very long tail.
5. Any real change in the near term must come from China [This economy] needs to strengthen its social safety net and to deepen domestic capital markets before consumption take off - consumption represents 35% of national income.
Source: Project-Syndicate.org
1. Global Imbalances – euphemism for the huge US trade deficit and the corresponding trade surpluses elsewhere, not least China (70% of the excess funds saved by China, Japan, Germany, Russia and Saudi Arabia).
2. Cheap money from abroad juiced an already fragile financial regulatory and supervisory structure that needed discipline more than cash.
3. America’s current-account deficit has now shrunk to just 3% of its annual income, compared to nearly 7% a few years ago.
4. Reinhart & Rogoff find that if financial crises hold one lesson, it is that their aftereffects have a very long tail.
5. Any real change in the near term must come from China [This economy] needs to strengthen its social safety net and to deepen domestic capital markets before consumption take off - consumption represents 35% of national income.
Source: Project-Syndicate.org
12.10.09
A period of higher short-run price volatility
Robert Shiller writing for the New York Times:
Could the more extreme recent shift mean that home prices will just keep rising this time?
For a home buyer who borrows 90 percent of the money to acquire a house, an appreciation rate of 11.2 percent offers an investment bonanza. By putting a small amount of money down, investors stand to make a large gain if home prices climb. That is the power of leveraging. Recently, however, home buyers have also experienced the unpleasant consequences of leverage when home prices fall. Investing in a home during the wild past few years has been like gambling in a casino: You can leave with riches or empty pockets.
At the moment, it appears that the extreme ups and downs of the housing market have turned many Americans into housing speculators. Many people are still playing a leverage game, watching various economic indicators as well as the state of federal bailout programs […] in an effort to time their home-buying decisions.
Could the more extreme recent shift mean that home prices will just keep rising this time?
For a home buyer who borrows 90 percent of the money to acquire a house, an appreciation rate of 11.2 percent offers an investment bonanza. By putting a small amount of money down, investors stand to make a large gain if home prices climb. That is the power of leveraging. Recently, however, home buyers have also experienced the unpleasant consequences of leverage when home prices fall. Investing in a home during the wild past few years has been like gambling in a casino: You can leave with riches or empty pockets.
At the moment, it appears that the extreme ups and downs of the housing market have turned many Americans into housing speculators. Many people are still playing a leverage game, watching various economic indicators as well as the state of federal bailout programs […] in an effort to time their home-buying decisions.
Some reactions to Nobel Prize in Economics
Accordingly with Steven D. Levitt
What’s interesting is that in the ensuing 15 years, it seems to me that economists have talked less and less about Williamson’s research, at least in the circles in which I run. I suspect most assistant professors of economics have barely heard of him. Yet I suspect the older generation of economists will applaud this choice.
The reaction of the economics community to Elinor Ostrom’s prize will likely be quite different. The reason? If you had done a poll of academic economists yesterday and asked who Elinor Ostrom was, or what she worked on, I doubt that more than one in five economists could have given you an answer. I personally would have failed the test. I had to look her up on Wikipedia, and even after reading the entry, I have no recollection of ever seeing or hearing her name mentioned by an economist. She is a political scientist, both by training and her career — one of the most decorated political scientists around.
Paul Krugman
Oliver Williamson’s work underlies a tremendous amount of modern economic thinking; I know it because of the attempts to model multinational corporations, almost all of which rely to some degree on his ideas. I wasn’t familiar with Ostrom’s work, but even a quick scan shows why she shared the prize: if the goal is to understand the creation of economic institutions, it’s crucial to be aware that there is more variety in institutions, a wider range of strategies that work, than simply the binary divide between individuals and firms.
What’s interesting is that in the ensuing 15 years, it seems to me that economists have talked less and less about Williamson’s research, at least in the circles in which I run. I suspect most assistant professors of economics have barely heard of him. Yet I suspect the older generation of economists will applaud this choice.
The reaction of the economics community to Elinor Ostrom’s prize will likely be quite different. The reason? If you had done a poll of academic economists yesterday and asked who Elinor Ostrom was, or what she worked on, I doubt that more than one in five economists could have given you an answer. I personally would have failed the test. I had to look her up on Wikipedia, and even after reading the entry, I have no recollection of ever seeing or hearing her name mentioned by an economist. She is a political scientist, both by training and her career — one of the most decorated political scientists around.
Paul Krugman
Oliver Williamson’s work underlies a tremendous amount of modern economic thinking; I know it because of the attempts to model multinational corporations, almost all of which rely to some degree on his ideas. I wasn’t familiar with Ostrom’s work, but even a quick scan shows why she shared the prize: if the goal is to understand the creation of economic institutions, it’s crucial to be aware that there is more variety in institutions, a wider range of strategies that work, than simply the binary divide between individuals and firms.
Nobel Prize in Economics
"for her [Elinor Ostrom] analysis of economic governance, especially the commons"
"for his [Oliver Williamson] analysis conomic governance, especially the boundaries of the firm"
9.10.09
Un golpe de recuerdos te modela...
Un golpe de recuerdos te modela
como a la nube el soplo imprevisible.
¡La música y la enamorada tela
que cruza por tus ojos! Suprimible
y oscuro lo demás, aquí te espera,
frente a mi vida absorta o despiadada,
un país al que vuelves, pasajera
del eterno sabor de tu mirada.
-¿Será tú lo que miro? ¿Y a qué sombra
de tu soñar inmóvil pertenece
la antigua calidad en que me abismo?
Pero de pronto en mí tu voz me nombra
como un golpe de rara luz que acrece.
¡Oh música y milagro de lo mismo!
Cintio Vitier
como a la nube el soplo imprevisible.
¡La música y la enamorada tela
que cruza por tus ojos! Suprimible
y oscuro lo demás, aquí te espera,
frente a mi vida absorta o despiadada,
un país al que vuelves, pasajera
del eterno sabor de tu mirada.
-¿Será tú lo que miro? ¿Y a qué sombra
de tu soñar inmóvil pertenece
la antigua calidad en que me abismo?
Pero de pronto en mí tu voz me nombra
como un golpe de rara luz que acrece.
¡Oh música y milagro de lo mismo!
Cintio Vitier
8.10.09
Theory is crystallized history
A commentary of DeLong
[…] After all, economic theory should be grappling with economic history. […]Someone observes some instructive case or some anecdotal or empirical regularity, and says, “This is interesting; let’s build a model of this.” After the initial crystallization, theory does, of course, develop according to its own intellectual imperatives and processes, but the seed of history is still there. What happened to the seed?
This is not to say that the macroeconomic model-building of the past generation has been pointless. But I do think that modern macroeconomists need to be rounded up, on pain of loss of tenure, and sent to a year-long boot camp with the assembled monetary historians of the world as their drill sergeants. They need to listen to and learn from Dick Sylla about Alexander Hamilton’s bank rescue of 1825; from Charlie Calomiris about the Overend, Gurney crisis; from Michael Bordo about the first bankruptcy of Baring brothers; and from Barry Eichengreen, Christy Romer, and Ben Bernanke about the Great Depression.
[…] After all, economic theory should be grappling with economic history. […]Someone observes some instructive case or some anecdotal or empirical regularity, and says, “This is interesting; let’s build a model of this.” After the initial crystallization, theory does, of course, develop according to its own intellectual imperatives and processes, but the seed of history is still there. What happened to the seed?
This is not to say that the macroeconomic model-building of the past generation has been pointless. But I do think that modern macroeconomists need to be rounded up, on pain of loss of tenure, and sent to a year-long boot camp with the assembled monetary historians of the world as their drill sergeants. They need to listen to and learn from Dick Sylla about Alexander Hamilton’s bank rescue of 1825; from Charlie Calomiris about the Overend, Gurney crisis; from Michael Bordo about the first bankruptcy of Baring brothers; and from Barry Eichengreen, Christy Romer, and Ben Bernanke about the Great Depression.
7.10.09
¿La estetización de un crimen en el arte es impune? ¿En la realidad puede ser punible?
Del Blog de Rafael Rojas:
Si el gusto de Polanski por las ninfetas hubiera sido una obsesión liberada por medio del cine, como Balthus liberó la suya en la pintura o Lewis Carroll en sus fotografías de Alice Liddel, la musa de Alicia en el país de las maravillas, hoy el creador de Repulsión no sería un convicto, además de uno de los grandes cineastas de la segunda mitad del siglo XX.
Si el gusto de Polanski por las ninfetas hubiera sido una obsesión liberada por medio del cine, como Balthus liberó la suya en la pintura o Lewis Carroll en sus fotografías de Alice Liddel, la musa de Alicia en el país de las maravillas, hoy el creador de Repulsión no sería un convicto, además de uno de los grandes cineastas de la segunda mitad del siglo XX.
Por un Sistema Nacional de Rendición de Cuentas
Mauricio Merino apunta:
Si tuviéramos mayor conciencia sobre la importancia de la administración pública y mayor capacidad de indignación, buscaríamos evitar que nos quiten lo poco que se había ganado. [Con] un consejo amplio de evaluación, control y vigilancia de los recursos públicos (con representantes de las OSC, de los medios, del trabajo, del capital y la academia), capaz de construir un verdadero sistema nacional de rendición de cuentas y de poner en manos de la sociedad las funciones a las que el gobierno ha decidido renunciar. Es decir, estaríamos exigiendo que en lugar de volver a los años del presidente Echeverría, México se ponga a la vanguardia de la gestión pública en el mundo.
Fuente: ELUNIVERSAL.com.mx
Si tuviéramos mayor conciencia sobre la importancia de la administración pública y mayor capacidad de indignación, buscaríamos evitar que nos quiten lo poco que se había ganado. [Con] un consejo amplio de evaluación, control y vigilancia de los recursos públicos (con representantes de las OSC, de los medios, del trabajo, del capital y la academia), capaz de construir un verdadero sistema nacional de rendición de cuentas y de poner en manos de la sociedad las funciones a las que el gobierno ha decidido renunciar. Es decir, estaríamos exigiendo que en lugar de volver a los años del presidente Echeverría, México se ponga a la vanguardia de la gestión pública en el mundo.
Fuente: ELUNIVERSAL.com.mx
6.10.09
Europe Financial Regulation
Overall, financial integration has greatly contributed to economic growth in Eastern Europe. Industries that depend heavily on external finance grew faster in countries with large capital inflows than in countries with more modest inflows. BUT the rapid expansion of credit brought about by foreign financial intermediaries using various channels (including direct lending, lending via banking subsidiaries, and lending via leasing subsidiaries) has fueled asset booms and heightened exposure to foreign-exchange risk. In the absence of effective regulation, financial integration has made the region vulnerable to a sudden and massive contraction of capital inflows.
Proposal
[W]hen the effects of a financial institution’s activities are sufficiently large, the country affected should be allowed to assume regulatory power, irrespective of the institution’s domicile.
The authors believe
[…] that an effect-based approach, based on an agreed threshold, would minimize the negative consequences of more host-country intervention in regulation and supervision.
Project-Syndicate, Berglof & Pistor
Proposal
[W]hen the effects of a financial institution’s activities are sufficiently large, the country affected should be allowed to assume regulatory power, irrespective of the institution’s domicile.
The authors believe
[…] that an effect-based approach, based on an agreed threshold, would minimize the negative consequences of more host-country intervention in regulation and supervision.
Project-Syndicate, Berglof & Pistor
Announcement of the Prize in Economic Sciences
On Monday, October 12, 1:00 p.m. CET, 11:00 a.m. GMT at the earliest; the Royal Swedish Academy of Sciences will announce the names of the 2009 Laureates in Economics Sciences.
For a live transmission see Nobelprize.org
All Laureates in Economic Sciences
For a live transmission see Nobelprize.org
All Laureates in Economic Sciences
En defensa de la ineficiencia, una compañía quebrada y un sindicato beligerante
[LyFC] emplea a 44 mil personas aunque podría operar con 8 mil 500. Las transferencias y los subsidios gubernamentales para mantenerla funcionando equivalen a dos veces el presupuesto del programa Oportunidades y a 157% del presupuesto de la UNAM.
[…] el privilegio de gozar con un contrato colectivo que otorga el ascenso con base en la antigüedad, sin tomar en cuenta el desempeño o la capacitación. El privilegio de que un trabajador no tenga que ponerse al corriente aunque se haya ausentado del trabajo.
El Mañana, Denise Dresser
[…] el privilegio de gozar con un contrato colectivo que otorga el ascenso con base en la antigüedad, sin tomar en cuenta el desempeño o la capacitación. El privilegio de que un trabajador no tenga que ponerse al corriente aunque se haya ausentado del trabajo.
El Mañana, Denise Dresser
5.10.09
Markets have gone up too much, too soon, too fast
Accordingly with Bloomberg Nouriel Roubini said:
I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.
In the short run we need monetary and fiscal stimulus to avoid another tipping point and to avoid deflation, but now this easy money has already started to create asset bubbles in equities, commodities, credit and emerging markets
S&P 5000 (from Oct08 to date)
Dow Jones (from Oct08 to date)
I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.
In the short run we need monetary and fiscal stimulus to avoid another tipping point and to avoid deflation, but now this easy money has already started to create asset bubbles in equities, commodities, credit and emerging markets
S&P 5000 (from Oct08 to date)
Dow Jones (from Oct08 to date)
We are facing many crises
The 64th opening of the General Assembly asks us to rise to an exceptional moment. We are facing many crises – food, energy, recession, and pandemic flu – occurring all at once. If ever there were a time to act in a spirit of renewed multilateralism, a time to put the “united” back into the United Nations, it is now.
[…] And that is what we are doing, as action on three issues of historic consequence demonstrates. […] the threat of catastrophic climate change, […] nuclear disarmament, [and] turning the corner to recovery (from financial Recession).
Project-Syndicate, Ban Ki-moon
[…] And that is what we are doing, as action on three issues of historic consequence demonstrates. […] the threat of catastrophic climate change, […] nuclear disarmament, [and] turning the corner to recovery (from financial Recession).
Project-Syndicate, Ban Ki-moon
Confidence, Confidence and Trust
On a fundamental level, all crises share causes and cures but they also have many differences. The cure is made up of two ingredients: 1) regain confidence to resolve a crisis; and 2) preserve confidence to prevent a crisis from repeating itself. Given the international dimension of this crisis and the proliferation of cross-border banking, the cure for this crisis also involves a third component – trust between authorities to enhance cross-border crisis management.
Stefan Ingves at the Eurofi Forum
Stefan Ingves at the Eurofi Forum
2.10.09
At the Mortgage Broker's...
Una síntesis del inicio de la crisis actual (Selección Adversa y Daño Moral)
RSG Investment Bank, "Trust the 'Really Smart Guys' for all your investment needs"
RSG Investment Bank, "Trust the 'Really Smart Guys' for all your investment needs"
60th anniversary of the PRC’s founding
China’s government is making massive preparations for a grand National Day parade in Beijing’s Tiananmen Square to celebrate both the 60th anniversary of the PRC’s founding and the 30th anniversary of Deng Xiaoping’s program of “reform and opening up.”
China has been formulating a whole series of new, well-considered policies and forging ahead with bold decision-making to tackle one daunting problem after another. […] its leaders have undertaken the most impressive infrastructure program in history, implemented a highly successful economic stimulus package, and now are moving into the forefront of green technology, renewable energy, and energy efficiency – the activities out of which the new global economy is certain to grow.
Project-Syndicate, Orville Schell
What happens next? For all our sakes, I hope that the future does not derail China’s economic progress, though it will be a surprise if it does not challenge its arthritic and adamantine political system.
Project-Syndicate, Chris Patten
1.10.09
US Spending Multipliers
Accordingly with Robert Barro
[...] The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.
[...] The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.
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