I stubbornly do not find proposals from those who disagree with the pension reform. the obviousness of the problems is obvious. some measures are needed. some suggest something(an increase in the period of retirement and something else, maybe), others are against. everything is clear and logical.
and what are the proposals for solving the problem from the trade unions? they are not completely stupid (although socialists), or everything is really running like that?
was Japan's finance minister long enough, но самое интересно – this is his answer to Japanese problems 1920-1930 х годов. After the boom, with the fall of international trade, the economy collapsed, a plus, they say, what was the credit crunch. The answer was intuitively Keynesian – growth in government spending.
History lessons are, that economic recovery has not solved all the problems. This primarily concerns political stability, во вторую – stimulating the economy inevitably led to fears about the stability of public finances. В конечно счете, in 1936 it took a year to apply an exit strategy" – cut costs and tighten monetary policy. And it seems like everything would be fine, but the military took offense and interrupted the minister's life.
Germany lives its 30s and fear of hyperinflation, Japan – your own and fear & quot; exit strategies" and mass mitigation. In the United States, seems, history lessons learned. Nevertheless, Takahashi's example can be instructive in that sense, that exit strategy is a dangerous thing – and if applied too early and if applied too late.
decrease in budget revenues – very big problem. at all, when it comes to all sorts of ratios such as debt / GDP, etc., you need to look at what happened. for example, debt / gdp growth in the 30s was not caused by debt growth, and the decline in GDP. etc.
вот что бывает, if the models do not include 3%, and 4% nominal growth.
Spain said on Wednesday it would restore €500m cut from the state infrastructure investment budget for next year in a slight easing of its austerity plans, but would fulfil its promises to keep cutting the annual budget deficit in line with agreed targets. …… Spanish officials say the extra €500m – which represents only about 0.05 per cent of the country’s gross domestic product – was made possible in part because the cost of servicing the country’s debt is lower than forecast. :) …… Ms Salgado insisted that Spain remained on track to meet its budget targets, with the deficit expected to fall from 11.2 per cent of GDP in 2009 to 9.3 per cent this year, 6 per cent in 2011, 4.4 per cent in 2012 and 3 per cent – the nominal European Union limit – in 2013.
Hungary has revealed that it was asked by North Korea to write-off more than 90 per cent of its outstanding debt in the latest indication of the secretive totalitarian regime’s financial distress. Hungary’s economy ministry told the Financial Times that North Korean negotiators had tabled the request in November 2008 during a meeting in Pyongyang. The revelation follows a report in the FT last week that Pyongyang had asked the Czech Republic to write-off 95 per cent of its Kc186m ($10m) debt. The cash-strapped totalitarian state offered to settle 5 per cent of the debt in ginseng, a root that is said to combat lethargy and impotence.
In order not to insert both articles, actually, what the second disagrees with.
First, a different assessment of the current policy path: Prof Rogoff believes that central banks worldwide are about to start to tighten – and will tighten faster the larger are current deficits, and so additional deficit spending over the next three years is unlikely to generate much if any demand. I believe that the Bank of England and the European Central Bank are about to do so – but should not. And I see the Federal Reserve as recognising the weakness of the recovery and as unwilling to take contractionary monetary policy steps to offset the effects of Office of Management and Budget fiscal policy or Treasury banking policy stimulus.
Second, a different assessment of the speed limit of recovery: Prof Rogoff sees the economy now as suffering from structural maladjustments generated by the expansion of the 2000s in which workers must be trained in new kinds of jobs and shifted over to different sectors in which they have no previous experience, and that that process cannot proceed rapidly without generating inflationary pressures that will destabilise confidence in price stability. I see an economy in which there is enormous slack pretty much everywhere – empty retail storefronts in Berkeley just to my left, anyone? – in which even the US housing stock is no longer above its trend, and in which we are currently building houses at half the trend pace. If output in even our single-family residential-housing sector is significantly depressed below its steady-state growth value – if, economy-wide, 10 per cent of the spending that ought to be there is missing – then we need not policies that carefully create new jobs only in the appropriate sectors but instead policies that create new jobs pretty much anywhere.
Third, an inappropriate linkage between short-term and long-term policy horizons that are not connected: as best as I can figure out, CBO director Doug Elmendorf’s judgment as expressed in his recent Long-term Budget Outlook is that if the policies enacted in the Obama Health Care Reform Bill can be sustained then it has reduced projected primary US federal deficits over the next 50 years by $12,600bn. That’s 16 stimulus packages the size of the Obama 2009 ARRA stimuli. That’s 370 times as much as this afternoon’s unemployment insurance extension. Solidifying the long-term foundations of fiscal sanity is, as Larry Summers said in his contribution, completely at right angles to the question of how much the US federal government does to boost demand and be a good customer for world businesses over the next two years when private households and businesses are not going to be such good customers. You can do both – and we should be doing both – and the Obama administration has taken major strides at doing both. And even big short-term stimulus measures have a trivial effect on the long-term budget picture.
DeLon's problem consists of 2 parts: 1) fiscal stability – main risk 2) spending cuts won't trigger a recession. thereby not increasing the debt burden even more
1)* main risk – the economic growth. deleveraging will take a long time anyway, painful and sad. if not, then the problem is absent in the principle. over-debt problem is not addressed gently. or economic growth, or F(P). in other words – the solution to the problem of public debt seems like a tit in the hands, in fact, it's pie in the sky.
2)* approve, that recovery will overcome cost reductions – strong stake. so far we see, that those who did not believe in the possibility of the Great Recession, didn’t believe in the “new norm”" and likely fiscal problems, continue to disbelieve in the possibility of long-term balancing below potential GDP (with a higher output, including due to a decrease in potential GDP)). though, this is the tenth case. the question of the risks that you are willing to take. The IMF has never understood the psychology of markets. Policy (Europe, germany) blinded by the problems of Greece in the first case and the euphoria of the export boom (which was already rather, than there is) in the second case.
Problems (?) Rogoff’a состоит из 2х частей: 1) favorable political moment, now you can do, what is difficult to do during a boom. this should not be underestimated. 2) & quot; Promise Tetanus & quot;. plan government spending cuts, it doesn’t mean to realize. as the practice of budget planning during the Clinton surplus shows, you can be very wrong in calculations (By the way, round trip)).
my least favorite part of ektheory has always been comparing the effectiveness of economic policy, because it all depends on the context really. from historical features. Nevertheless. do not judge strictly, but now the increase in taxes is much preferable to the reduction in government spending (in fire order).
a small document from JPiMorganov on cutting government spending in Canada in the 90s. Key factors that significantly aided the consolidation in Canada are generally missing today
The World Bank considers how the cost reduction will positively affect growth in the long term. . Their models somehow gave birth to the idea of, that accelerating the rate of cuts in government spending will improve the prospects for emerging economies by 2012 year, read – at once. Where heresy comes from is not difficult to guess. The guys counted, that spending cuts will calm the markets – hence the reduction of all kinds of spreads there, and off we go. If you remember, that people far from the markets never understand their behavior and given how the IMF has tried to calm the markets in Latin America… Think, that everyone understands how unrealistic their models are. With all my real respect and respect.
ECB issued . The brightest moment, this is the part about the fiscal situation. In the analysis of the pros / cons of cost cutting, the comrades cite the example of Finland, Belgium and Ireland 90s. There is a problem. The world economy is not in the 90s, cost cuts will take place at a new level (not individual countries, and region / regions) and in completely different growth rates of the global economy. It's just such a comparison in itself (I understand that you need to write about something) raises further doubts about the performance of the ECB. More and more terrified.
On the other hand. Periods of economic growth and stability have not traditionally been used to address structural problems. As Paulson wrote, in Washington something can only be done in a crisis. Therefore, it is better even now, what else in the next n-years. Yes, this is not the smartest move, a step to coerce the markets. The problem is, that inadequate people respond to adequate markets, who are unlikely to be able to follow the thin line of maintaining the minimum, but growth.
The practical conclusion is, that the consensus is too optimistic in a period of one to several years. As well as being overly pessimistic about the long-term problems of budget deficits and public debt (especially in the USA). This means, what's the raw material – this is not the best asset for the coming years. Promotions will be better (with competent selection or good active management). In longran, years from 5 for example stocks are cheap.
This is not a calculation, logical estimates only.
The Office for Budget Responsibility is created in Britain (GIANT) – this (not)dependent organization (sorry, I could not resist. I can't believe that, that this is not a political move) which will issue budget forecasts. Here , and here they are . The document is large and takes time to read. At the moment it is important to know, that the forecast for economic growth was underestimated (pier, the previous government deliberately inflated forecasts. somewhere we already heard it ..). By the way, tax revenues improved slightly, which slightly reduced the need to issue debt, what the markets liked very much.
What you want to pay attention to first of all, this is the GDP gap.
As seen from the graph, previous prediction of the bad guys" was slightly worse. At this point we turn to the second British topic. – Inflation.
For now, a few words about the GDP gap. Much of the gap calculation is based on unemployment. But, in post-boom periods, some jobs go away forever, What means, that the full load of resources based on the new structure of the economy will be less, than when basing on the old pre-bubble structure.
From here – Central Bank expects, that inflation will be low since the GDP gap is large. If the Central Bank overestimates the size of the negative gap, then the reaction to inflationary pressures will be belated. By the way, this is the most real reason to be afraid of high inflation., not monetary – look in the forum, afraid, but we don't think.
What happens to inflation.
1) The Barclays Survey of Inflation Expectations (BASIX) – inflation expectations survey showed, what are the british waiting for 3,4% in a year, in two years 3,8% what is the maximum with 1995 of the year.
2) UK inflation will be published tomorrow, all kinds of rumors are crawling around the market about, that rising expectations – this is what pushes inflation up, therefore the Bank of England will think and do something.
and now, from the Bank of England – a graph of how expectations and actual figures compare (By the way, for the US, expectations are even less useful).
And the third. (short-term financing facility for the non-financial sector)!
The Bank itself said: Although there were no asset purchases financed by central bank reserves, the Bank continued to purchase sterling commercial paper and operate as a buyer and seller in the sterling corporate bond market, with net purchases financed by the issuance of Treasury bills.
Ie. no QE, just needed to support the market in difficult times. But still, interestingly;)