SAO PAULO | By Marcus Nunes | For the last four years many have touted increasing the inflation target to 4% as the best way to “cure” our ills. If I well recall, it started with the IMF, at least by its Chief-Economist Olivier Blanchard, who in an IMF publication wrote “Rethinking Macroeconomic Policy.”
SAO PAULO | By Marcus Nunes via Historinhas | “The IMF has been very generous in its suggestions on what we should do,” said Mr Draghi in a sarcastic tone on Thursday.
MADRID | By Luis Arroyo | In the last two years, the FED did not meet the inflation target (the same as the ECB, although the latter has a commitment of 2% tops), which has grown at a slower pace than announced –as we can see in the chart above (by Ryan Avent at The Economist).
SAO PAULO | By Marcus Nunes | There is a significant difference between the discourse formulated by Ms. Yellen and the one formulated by Feldstein. While the first talks about a “suffering economy,” the second insists on being preoccupied about the future of inflation.
SAO PAULO | By Marcus Nunes | The WSJ has a piece which closely reflects the consensus view on the matter: “Japan´s Sales-Tax Boost will Test Abenomics”: The tax increase is designed to pay for Japan’s ballooning social-welfare costs and to pare its huge public debt, which, at more than twice the size of the economy, is the largest among rich nations.
LONDON | By Barclays analysts | There appears to be increasing market doubt over the sustainability of the “Japan trade”. Year- to-date, the yen has rallied more than 3%, while the Nikkei is down 11%, placing it among the worst performing indices of the year. This is due in part to concerns over the impact of the forthcoming fiscal drag as the VAT hike takes effect on April 1st.
WASHINGTON | By Mike Konczal at The New Republic, via The Next New Deal | Our problem today was not caused by a lack of business and banking regulations,” argued Ron Paul in his 2009 manifesto End the Fed, which outlined a theory of the financial crisis that only implicated government policy and the Federal Reserve, while mocking the idea that Wall Street’s financial engineering and derivatives played any role. “The only regulations lacking were the ones that should have been placed on the government officials who ran roughshod over the people and the Constitution.”
BEIJING | By H.Kaixi, W. Xiaobing and Y. Ning via Caixin | Since February, state-owned oil majors have taken steps toward pilots in mixed-share ownership, following central government calls for reforms to state-owned enterprises (SOEs). In a previous round of SOE reforms launched in 1998, the top three oil majors, CNPC, Sinopec and China National Offshore Oil Co. (CNOOC) underwent asset restructurings and went public abroad. But shortly thereafter reforms came to a halt. The competition that policymakers wanted to bring about never happened.
SAO PAULO | By Marcus Nunes | In “Mind the (spending) gap,” Atif Mian and Amir Sufi of Princeton and Chicago, respectively, are on the right track but go about it the wrong way and so arrive at a wrong conclusion. They wonder: We all know that households cut back on spending dramatically during the Great Recession. Are they spending now? Has spending caught up to the trend the United States was on before?
WASHINGTON | By Pablo Pardo | Prostitution is coming out of the closet. Not by getting any official credit -it’s still an illegal activity-, but thanks to the Internet. According to a study recently released by the U.S. Urban Institute, the Web is disrupting the pimp industry, causing a supply shock followed by a demand reaction. Sex workers don’t need middlemen to find clients anymore.