ALL BLOG POSTS
Scott Sumner has a great post on the very scary state of US housing finance. This is something that many Europeans might not realise, but when it comes to housing finance the US is likely one of the most socialist countries among the developed economies of the world.
This morning we got strong GDP numbers from Japan for Q1. The numbers show that it is primarily domestic demand - private consumption and investment - rather than exports, which drive growth.
Most economists pay little or no attention to nominal GDP when they think (and talk) about the business cycle, but if they had to explain how nominal GDP is determined they would likely mostly talk about NGDP as a quasi-residual. First real GDP is determined - by both supply and demand side factors - and then inflation is simply added to get to NGDP.
As geopolitical tensions in Ukraine have been rising I have found myself thinking about the impact of such events on markets and economies. One thing is to understand what is actually going on and another thing is to understand the economics of such events. How are geopolitical tension or terror impacting investment and consumption decision?
When I started working in the financial sector nearly 15 years ago – after 5 years working for government – one thing that really puzzled me was how my new colleagues (both analysts and traders) where thinking about exchange rates.
Today I talked to an Israeli friend about the state of the Israeli economy and particularly about the importance of monetary policy. One can really characterise the Israeli economy as being 'boring' in the sense that growth, inflation and markets have been quite stable in recent years - despite of the "normal" political (and geopolitical) uncertainty in Israel.
Some economists get the reputation of always being negative (or positive). I myself have been struggling with that imagine, but have been trying to get rid of it - If you are constantly bearish on the world you will often be wrong. However, ultra-bearishness can be a good "media strategy". Somebody who is known as an über-bear Nouriel Roubini aka Dr. Doom.
I got this from Erwan Mahé's excellent newsletter Thaler's Corner:
Mark Perry at the American Enterprise Institute provides a great overview of the Hoover Institution’s “Collected Works of Milton Friedman”.