2013

Consumer spending in the US accelerated in November, boosting projections for the GDP growth in the fourth quarter. While incomes grew as well, the rate of increases from the same period last year has slowed. With confidence improving,…

My view remains that Europe is in an incipient but unstable recovery vulnerable to exogenous shocks. However, I do not believe this recovery means that crisis is over. Rather, this is a lull before continued stagnation forces Europe to make…

News links for 23 Dec 2013

For the fourth quarter of 2013, 103 companies in the S&P 500 have announced negative earnings revisions. Only nine have disclosed positive profit assessments. The ratio of negative-to-positive, 11.4:1, exceeds the previous high…

Since the Fed announced the reduction in securities purchases ("small taper"), the treasury curve has undergone some strange adjustments. Why would the 5-year note sell off the most while the long bond rallied?

Standard macroeconomic theory did not help foresee the crisis, nor has it helped understand it or craft solutions. This columns argues that both the New Classical and New Keynesian complete markets macroeconomic theories not only did not…

In principle I think Krugman is right to have a go at micro foundations. I have criticised the concept myself for ignoring the potential for research paradigms that are purely macroeconomic in nature. In this sense, the fact that Krugman…

There is no question that labor force participation in the US has been falling as more people drop out of the workforce. But that measure could be misleading because as the population ages, the workforce will shrink naturally. Perhaps a…

News links for 21 Dec 2013

Solving Germany's investment problem requires both low interest rates and increased government investment. The ECB is at least attempting to address the first of these. But when is the German government going to accept its responsibility…