PARIS | Francesco Saraceno | I was puzzled by Daniel Gros’ recent Project Syndicate piece, in which he claims that Germany’s dominance of the EMU may be coming to an end. Gros’ argument is based on two facts. The first is the slowing growth rate of Germany; the second, more geo-political, is the lack of willingness (or of capacity) to manage, the crises that face the EU (in particular the refugees crisis).
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Fernando Barciela | Passos Coelho won the elections in Portugal with 38.6% of the vote, but lost his majority in parliament. Even though he has been tasked with forming a new government, Portuguese left parties have adopted a pragmatic approach which makes an agreement between the Socialist Party, Communist Party and Bloco de Esquerda increasingly likely. For the time being, they have already appointed Eduardo Ferro Rodrigues, a socialist, as the President of the parliament.
Yang Gang via Caixin | China also has second-most household wealth after the United States, according to an annual report by researchers at Credit Suisse Group, a leading global financial services company.
James Alexander via Historinhas | Yet again today we saw the “zero (long and variable) lags” in monetary policy. Central bankers moving markets and thus changing NGDP Expectations happens all the time. It’s perfectly rational too.
The amount of unemployed people in Spain – the country’s biggest problem – fell below 5 million in the third quarter of the year, for the first time since 2011. The jobless rate dropped 1.19 percentage points to 21.18%, while the employment rate rose 1%. But the improvement is exclusively due to temporary work contracts.
Fernando Barciela | Spain has some abilities, which were inconceivable three decades ago. A position which has been achieved through our companies’ hard work,” says Regino Moranchel, former CEO of Indra, the leading Spanish technological company and one of the four most important European companies by stock market capitalisation.
Markets are trying to glean any hint about whether or not the ECB will confirm additional stimulus during its monthly meeting today. Most analysts forecast a QE reinforcement in quantity, as well as in term, before year-end or in 2016. But there is also a minority who bet on the central bank just adding corporate debt to the cocktail.
Alberto Forchielli via Caixin| The BRICS, MINT and others are nice, but CIVET is better because it has Vietnam, the happy exception to recent slowdowns.
James Alexander via Historinhas | There is only monetary policy, defined as the value of money relative to real goods and services. All else is just tools: official short term policy rates, IOER, targeting or guidance, QE, fiscal policy. In the “monetary offset”, the tool of expansionary fiscal policy is offset if the overarching policy tool is inflation targeting.