SAO PAULO | By Marcus Nunes | The strong counteracting monetary policy response to permanent Social Security benefit increases likely explains why their effects were relatively short-lasting and did not spread to broader economic indicators, say Christy and David Romer.
WASHINGTON | By Pablo Pardo | Germany’s Foreign Affairs Minister, Frank-Walter Steinmeier, finishes his two-day visit to Washington today with at least some unintended achievement: the U.S. and Germany agree on the importance of a truly independent and democratic Ukraine. The revolution in Kiev and the menacing attitude of Russia have prompted an unexpected rapprochement between Berlin and Washington. However, a real warming up of US-German relations seems improbable.
NEW YORK | By Robert Johnson via Next New Deal | The pensions crisis has far-reaching implications for the future of the U.S. economy: the state and local government sector is about 14 percent of the American workforce. What broke the system, and how do we fix it? Beyond the economic crisis, which put enormous pressure on state and municipal budgets, poor decision-making and the influence of big money interests has led to the underfunding of some state and city public pensions.
SAO PAOLO | By Marcus Nunes | Let´s see. For his memoirs as Fed Chairman Greenspan pocketed 8 million from Penguin. Given PCE inflation Bernanke should get at least 9 million from the same editor. But Bernanke´s book is worth more. Greenspan presided over the Great Moderation. Great Moderations don´t give rise to dramas as does a Great Recession (Lesser Depression).
MEXICO CITY | By David Brunat | It’s crystal clear: the automotive industry is going to drive the Mexican economy soon, says the country’s Automotive Industry Association AMIA, who predicts that in 5 years they will be producing 4 million units -and replace Japan as the second-largest exporter of cars to the United States.
MADRID | By Laura Alcaide (Guest post) | Spaniards, and Europeans in general, are reluctant to let lobbies participate in the political arena. Although it is true that these powerful groups can move the threads behind the scenes, as it happens with many industries in Washington, they can also make consumers’ voices heard and help citizens to fight nepotism and corruption.
FAIRFAX | By Tyler Cowen via Marginal Revolution | It is hard to look at pictures of Kiev and think “that looks like a safe sovereign credit,” but even with the recent run-up Ukraine still has a market-implied default hazard at only about 60% of the level of Argentina.
As there is no perfect model or even a template for democracy, one cannot avoid the realities that underlie the role of corruption in any country — realities which must be dealt with for transparency to become a national value. “Affecting all EU Member States, corruption costs the European economy around €120 billion per year. Corruption undermines citizens’ confidence in democratic institutions and the rule of law; it hurts the European economy and deprives States from much-needed tax revenue”, Cecilia Malmstrom, EU commissioner for Home Affairs, has recently stated.
MADRID | By J.P. Marín Arrese | Will the Sidney growth strategy fly? Germany and the ECB have voiced open scepticism on its merits. So long as growth continues to gain momentum, they is little chance surplus countries might revamp domestic demand in a co-ordinated effort for anchoring recovery. They will put into practice the well-seasoned “wait and see” strategy.
BEIJING | By Andy Xie | The fact that emerging market economies have not borrowed in foreign currencies means there’s a way out, and a soft landing will be helped if China keeps its currency stable.