Past performance casts doubts over what European governments will achieve by implementing the Tobin Tax on financial transactions. Funding costs for banks and their clients, though, will surely increase.
Articles by Miguel Navascués
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Don’t worry about the external deficit. The Spanish economy needs permanent capital inflows and that isn’t really a problem when the country can generate income to cover interests and dividends. Look at Australia, suggests economist Luis Arroyo.
Behind the latest good news about better external deficit figures in Spain and the US, nominal GDP records demonstrate that Brussels is wrong: it isn’t time for savings when income drops dramatically. Spain needs credit to grow and repay its debts.
Only when private sector hiring has showed some muscle, public jobs have fallen as a percentage of the total employees in Spain. The country’s public sector needs a downsize, and this should be easy to achieve: free the public administration from party politics interests.
The Federal Reserve is hoarding Treasuries, interest rates in the US have plummeted and the inflation menace overhangs like a large knife above the American economy. Not at all, points out economist Luis Arroyo.
The US Federal Reserve can apply monetary measures as often as it wishes, but there is one factor that escapes its command and, nevertheless, stops markets from recovering. It’s called the euro.
Economist Luis Arroyo peeks at Japan’s monetary policy with some sense of vertigo. Deflation has become a real threat for the country’s recovery and should be fought sooner than later.
Will inflation rise in the US? That is the expectation of investors. Is it due to the Federal Reserve’s monetary policy? You bet. But, economist Luis Arroyo concludes, eggs end up broken when making an omelette. Or when a central bank stimulates employment.
Economist Luis Arroyo tells his colleagues not to feel outraged because the Federal Reserve’s latest monetary policies make an expansionary impact on European markets, too. It is unavoidable.
By Luis Arroyo, in Madrid | Very briefly: for those who have let themselves fall for the euphoria that unfolded after the European Central Bank…