Regulators should put a stop to tactics that delay the introduction of generic drugs.
Read this article from The Economist here.
donderdag 13 augustus 2009
Economists, economics, and the crisis
This column outlines tough questions about economics and economists raised by the global crisis.
Read the full article here.
woensdag 12 augustus 2009
Will they sing the same tune? Measuring convergence in the new European system of financial supervisors
Read the CEPR Policy Insight here.
Germany’s new fiscal rule: A responsible approach to fiscal sustainability
Though Germany’s 2006 new fiscal rule was designed as a discipline to achieve fiscal sustainability, it could be a valuable “exit” mechanism from the crisis-linked build-up of public debt. Contradicting criticisms of the new rules as too constricting, this column argues there are few constraints on the ongoing counter-cyclical fiscal policy, and provisions allow for future flexibility. Ironically, the more serious risk is that the flexibility could weaken implementation.
Read the full article here.
The Laffer Curve: Understanding the Relationship Between Tax Rates, Taxable Income, and Tax Revenue
The Laffer Curve shows the relationship between tax rates and tax revenues, with the insight that taxable income is not predetermined. The Laffer Curve is best known for demonstrating that, at a certain point, higher tax rates fail to produce more revenue, but the key insight is the much more modest point that changes in tax rates cause changes in taxable income, which leads to some level of revenue feedback. Politicians on both sides often exaggerate, with Republicans sometimes arguing that the Laffer Curve means that "all tax cuts pay for themselves." Some Democrats, by contrast, argue that tax policy has no impact on economic performance. This paper uses real world evidence to demonstrate that certain tax cuts can have a positive impact on economic performance and that "supply-side" tax cuts therefore do not "cost" the government much in terms of foregone tax revenue. This paper further explains how the Joint Committee on Taxation's revenue-estimating process is based on the untenable theory that changes in tax policy - even dramatic reforms such as a flat tax - do not effect economic growth. In other words, the current system assumes the tax rates have no impact on taxable income. Because of congressional budget rules, this leads to a bias for tax increases and against tax cuts. This paper explains that "static scoring" should be replaced with "dynamic scoring."
Read the paper here.
Les leçons de la crise financière n'ont pas été retenues
Lorsque la bombe des subprimes a éclaté aux Etats-Unis en août 2007, peu d'économistes se sont inquiétés des répercussions hors du secteur de la finance. Leurs modèles intégraient peu de variables financières. Il y avait toujours de riches investisseurs pour aider les établissements bancaires, les banques centrales et soutenir les marchés. ...
Lisez la suite de l'article ici.
dinsdag 11 augustus 2009
Interventionnisme conservateur
A ce stade de la lutte mondiale contre la dépression, les mesures prises par les banques centrales, Trésors publics et gouvernements apparaissent très conservatrices. Presque tout ce qui a été fait - augmentation des dépenses, baisse des impôts, recapitalisation des banques, achat des actifs à risque, opérations sur les marchés et mesures destinées à augmenter la liquidité - correspond à une politique qui date de presque deux siècles, au début de la révolution industrielle.
Pour lire la suite de l'article, cliquez ici.
maandag 10 augustus 2009
ICN: comptes nationaux trimestriels 2009-01
Consultez ici le rapport de l'Institut des Comptes Nationaux reprenant des données sur le PIB et l'emploi en Belgique pour le premier trimestre 2009.
Man vs. Mutt
In the last few years, I have had the opportunity to compare the human and veterinary health services of Great Britain, and on the whole it is better to be a dog.
Read the full article here.
Jobs paradox?
Some readers have asked how it’s possible for unemployment to fall when the economy is still losing jobs, albeit at a slower rate. The answer is a bit annoying. ...
Read Krugman's column here.
Insurance against systemic crises: The real contract between society and banks
The crisis is a brutal reminder of the fragility of banks. This column suggests that managers of large banks be obliged to purchase insurance against systemic crises. This would create incentives for them to be concerned about the stability of the banking system as a whole.
Read the full column here.
Does creditor protection mitigate the likelihood of financial crises and their effect on the stock market?
Finding reliable indicators that predict the likelihood and severity of crises across countries has been a frustrating quest for economists. This column suggests that countries with better creditor protection suffer less when a crisis hits.
Read the full column here.
Ten pointers on how to think like a German
Germany approaches national elections next month having suffered its worst recession since the second world war. Until recently, the scale of its economic contraction – almost 4 per cent in the first three months of this year – would have been inconceivable for such an advanced, politically stable industrial nation.
Yet it has been hard to sense an acute crisis. Living in Germany in the late 1990s, when the country was suffering its post-unification hangover, there was more self-reproach and debate about its economic model. The lesson of the current crisis is that however much the world’s economies have converged, Germany ticks differently.
Here are 10 surprising aspects of the German economy and economic thought that together could explain why the Teutons are toughing it out.
First, Germany might beat the UK and US in escaping from recession. As global prospects brighten, its export-led economy is firing up. Industrial orders – which lie close to the German soul – are up 13 per cent since February. June export and industrial production data on Friday even left open a possibility that second-quarter growth figures this week could be positive.
Jörg Krämer, chief economist at Commerzbank and previously one of the great German gloomsters, reckons gross domestic product could grow by as much as 1 per cent in the current quarter. If you are American, and prefer bigger-looking annualised numbers, that would be a 4 per cent rise. True, Germany’s fortunes hang on the world outlook; Mr Krämer expects only a “mini-V” shaped recovery, with growth remaining “anaemic” longer term. But anything other than weakly positive growth would diverge from the trend over the past decade.
Second, consumers have been unfairly maligned. Germany has long consumed too little, while investing heavily and running large trade surpluses, thus contributing to global economic imbalances. So since the start of the crisis, Berlin has been berated internationally for not doing enough to boost domestic demand. In fact, consumer spending rose by 0.5 per cent in the first quarter – the most since mid-2007 – thanks largely to government incentives for new car sales, and stable employment. Goldman Sachs reckons consumer spending rose 0.2 per cent in the second quarter, while the US had a 0.3 per cent fall.
Third, Berlin still doesn’t get it. Economists rubbed their eyes in disbelief at the May interview in Die Zeit with Peer Steinbrück, finance minister, in which he apparently forgot about the notoriously conservative shopping habits of his compatriots, to complain that “as a society we have, compared to what we have produced, consumed too much and invested too little”.
Fourth, unemployment has actually fallen since April in eastern Germany, which is less export-dependent than the country overall. Joblessness there is still unforgivably high, and nobody expects the downward trend to last. But the fall shows jobs are not being shed as rapidly as in previous recessions, thanks largely to government-funded short-time working schemes.
Five, politicians still think they can create jobs just by announcing targets. Frank-Walter Steinmeier, the Social Democratic challenger in September’s elections, pledged last week to create 4m jobs by 2020. Perhaps he had forgotten how worthless similar pledges by former chancellors Helmut Kohl and Gerhard Schröder eventually proved.
Six, the housing market, which has been flat for a decade, is stirring. The latest Bundesbank bank lending survey showed demand for home loans recovering much faster than in the eurozone as a whole. Young Germans see this is a good time to lock in at low interest rates. Or maybe, disheartened by financial assets, they are turning to bricks and mortar to save for their old age.
Seven, in spite of everything, relying on exports and trade surpluses is still widely seen as the only option for a rapidly ageing society. Germany’s birth rate fell to just 8.2 per 1,000 population last year, the lowest in the European Union. Politicians fret about a rising phobia towards children, as shown in complaints about noisy kindergartens in residential areas. “Society has to an extent fallen out of the habit of thinking of the needs of children – because, quite simply, there are not so many of them,” a Social Democrat social policy spokesman told a local newspaper recently.
Eight, Germans might not be as worried about future inflation as popularly supposed. An FT/Harris poll last month showed that people in the US were more worried that actions by governments and central banks would trigger short-term inflation.
Nine, Germans’ holidays remain inviolable. The same FT poll showed that just 9 per cent would reduce their holiday budget this year.
Ten, German beer sales may be tumbling because of the crisis – sales in the first half of 2009 were the lowest since reunification – but organisers of Munich’s Oktoberfest say hotel bookings are in line with previous years. The beer festival will be in full flow as the country votes on September 27. It takes more than a global crisis to stop Germans putting on traditional dress and dancing on the table.
FT, Augustus 10 2009
vrijdag 7 augustus 2009
Financial liberalisation and democracy: The role of reform reversals
Will the current crisis reverse the past two decades of democratisation and financial liberalisation? This column documents the complex, non-linear relationship between political and financial reform. Financial liberalisation often reverses as countries move from autocracy to democracy, as “partial democracies” are less liberalised, and there are big differences between de jure and de facto liberalisation.
Read the full article here.
Global imbalances have grown further
The necessary “global rebalancing” has not even begun. This is a prerequisite to prevent a new global crisis in the future. ...
Lees het volledige artikel hier.
De Belgische economie herleeft! (of toch niet?)
De discussie vandaag gaat vooral over het feit of de Belgische economie al dan niet aan het heropleven is. Het korte antwoord daarop is dat de verslechtering van de afgelopen maanden gestopt is. En dat er hoop is dat de situatie de volgende maanden zal verbeteren. ....
Lees het volledige artikel hier.
China: bogus boom?
To read this Economic Outlook from the American Entreprise Institute for Public Policy Research, click here.
Hospitalisation à domicile : l'étude de la Drees
Poussée par les pouvoirs publics, appréciée des patients, l'hospitalisation à domicile se développe à un rythme soutenu. Le nombre de places disponibles a été multiplié par 1,7 entre 2000 et 2006, selon une étude de la Drees.
Pour consulter l'étude, cliquez ici.
woensdag 5 augustus 2009
dinsdag 4 augustus 2009
The German fiscal stimulus in perspective
The German authorities faced a chorus of criticism for responding slowly to the crisis. This column says that their delayed stimulus package could and should have been bigger and better. Nonetheless, the Germans deserve commendation for putting the package on solid footing by a new rule regarding fiscal sustainability.
Read the article here.
Labour market institutions and income inequality
The recent debate on trends in inequality in industrial countries has been marred by the lack of consensus about the relevant concept of inequality. Labour economists are concerned with inequality in earnings, macroeconomists with movements in the wage share, while policy-makers tend to focus on household income inequality. We provide a unifying framework to study the relationship between these three concepts of inequality and the way in which labour market institutions affect them. Institutions emerge as a key determinant of inequality, yet they play different roles depending on the extent to which they complement or substitute each other. As a result, we are able to propose a set of inequality minimizing institutions. Institutions that decrease inequality are, however, associated with higher unemployment, and our analysis allows us to quantify the magnitude of this trade-off.
Read the report here.
maandag 3 augustus 2009
How a Little Inflation Could Help a Lot
BECAUSE fiscal stimulus has not yet been a striking success, perhaps it’s time to consider new monetary remedies for the economy.
Read the article here.
Could an early warning system have predicted the crisis?
The 2008 global financial crisis has led to renewed calls for “early warning models” to reduce the risks of future crises. But this column says that few of the characteristics suggested as potential causes of the crisis actually help predict the intensity and severity of the crisis across countries. That bodes poorly for the performance of future early warning models.
Read the article here.
How Latin American banks are performing in the crisis
Although the economic slowdown has indirectly affected the region’s banks, they will probably remain profitable and well capitalized.
Read the article here.
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