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Browsing Category
Political Economy
Chart of the Day: Debt Deflation in the Eurozone
When I see the chart for Euro zone NPLs and look at the numbers, I think debt deflation. And this is exactly the problem with the euro zone's policy mix.
“Merkel knows best what’s happening in Europe”
These are the words of European Commission President José Manuel Barroso in a recent interview with Die Welt, a German newspaper. Rather than translate this article in full, I want to put it in context given Barroso's outburst about…
The A-b-e of economics and Japan’s shrinking population trap
Japan is stuck in a shrinking population trap, and neither monetary nor fiscal policy will adequately solve the problem. Continuing to run fiscal deficits in a deflationary environment will only means that government debt is pushed onward…
Beyond their ken: The Spanish contraction machine is well-oiled
The current crisis – which is arguably no longer a crisis but rather a way of life – has all now gotten so complex that the issues involved are almost certainly, and in principle, “beyond their ken.” Spain’s economy will continue to march…
The ECB will act to avoid a deflationary spiral
Whatever the case, the ECB will have to act in order to avoid the dangers of a deflationary spiral, which could take the Eurozone years (or even decades) to exit.
On Latvia and Ireland as austerity models
Earlier in the week, ECB German board member Jörg Asmussen delivered a speech on the challenges of the economic crisis for countries in Central and Eastern Europe. The part which caught most people's eyes was his commentary on Latvia and…
Enrico Letta’s Italy
The first left-right coalition in Italy since 1946 has survived its first confidence motion in both chambers. As difficult as it may have been to break the political logjam, the hard work lies ahead for Prime Minister Letta.
On why the German EU positions will change after the German General Elections
A recent FT article points out that the electoral campaign positioning has already started. And it has the Social Democrats in bed with the Green Party to an unusual degree. The way the Greens and the SPD are talking makes me believe it…
Spain: Running from the Bulls?
There have been three recent developments in Spain: the new record high unemployment, the earnings reports of several large banks, and the government's new fiscal forecasts and strategy.
Spanish 10-year yields continued to trend lower…
Some thoughts on what’s next for Italy
Italy is getting closer to putting together a grand coalition government. This has always seemed to us the most likely scenario, but the route to it has been circuitously torturous. Three considerations have led to President Napolitano…