SAO PAOLO | By Marcus Nunes | In “The current state of the US economy explained in one chart”, Mark Perry shows the chart above. As I argued in “The previous peak is not the appropriate benchmark” (Parts 1 & 2), just because you´ve reached or surpassed the previous peak does not mean you have achieved a complete or full recovery.
SAO PAOLO | By Marcus Nunes | According to Per Bylund, “during the recent financial crisis, Sweden has emerged as one of very few financially sound economies.” However, now the country successfully rolled back its unsustainable but world-renowned welfare state.
SAO PAULO | By Marcus Nunes | The Fed has never been comfortable with QE3; Many thought that QE ineffective; Bernanke felt compelled to clear the path for Yellen… But it has boosted “Forward Guidance” to make up (or more than make up) for the “taper”.
SAO PAOLO | By Marcus Nunes | Mr Ambrose Evans-Pritchard explains “Mario Draghi said the ECB is studying what happened in Japan at the onset of its Lost Decade in the 1990s, insisting that the EZ is unlikely to go the same way.”
SAO PAOLO | By Marcus Nunes | A hint of ‘Schadenfreud’; that´s what I gathered from this piece by James Glynn: “Australia’s “Miracle Economy” Running out of Tricks.”
SAO PAULO | By Marcus Nunes | According to Lars Christensen, central bankers around the world talk about monetary policy as being “unconventional” when they undertake “quantitative easing” to expand the money base. This term frustrates me a great deal as there is nothing unconventional about the fact that the central bank is changing the money base.
SAO PAOLO | By Mike Konczal via Marcus Nunes’ Historinhas | Should we endure a mini-recessio, i.e. more bubbles, with lower employment and output, to fight a thing called “financial instability”? I had no idea that Sweden has gone all-in on raising interest rates to fight “financial instability.” (Alas poor Lars Svensson!) Simon Wren-Lewis has details, Krugman has more, and Peter Orszag had a great column about how New Zealand is instead using regulations to fight worries about the financial system.
SAO PAULO | By Marcus Nunes | The difference between the RBA and the BoJ, the Fed or ECB is that while all four central banks have inflation targets, the RBA also has an implicit income target. If central banks determine aggregate demand, the only way to hold them genuinely responsible for what they actually do is for them to explicitly and directly target it: also known as NGDP targeting.
SAO PAULO | By Marcus Nunes | Recently, both Simon Wren-Lewis and Paul Krugman have singled Sweden as a country where the central bank has moved from targeting inflation to worrying about ‘deflating’ bubbles.
SAO PAULO | By Marcus Nunes | John Taylor talks vaguely about “policy”. To MMs, it´s very much about inadequate monetary policy.