27 October 2011

Are we out of it already?

The ESFS has been increased to 1 trillion euros and the Greeks will get a 50% writedown of their debt. US GDP is expanding at fastest pace, and the markets are having a blast: FTSE up almost 2.5%, DAX about 4.5% and the DOW 1.75%...

However, as Eurointelligence notes: " So is this a comprehensive agreement? Of course it is. They did what they set out to do. Will it solve the crisis? Of course, it will not. The probability that the Greek deal will come unstuck is close to 100%. " They argue that it's not clear that the Banks will meet their 'voluntary' targets (of about 100 billion euros) and if they did, it may not suffice to stabilise Greece's debt...

20 October 2011

Buiter on the Euro Area Crisis

"Two important parts of likely processes that will lead to a resolution are being held out by the refusal of the ECB to lend its support to necessary recapitalisation of banks through debt to equity conversions or the restructuring of sovereign debt. So it is not just that 27 countries are hard to coordinate...there is also wilful procrastination, ignorance and lack of leadership." (around 9mins30)

19 October 2011

Wages and unemployment in the current crisis

Andrew Watt tackles the claim that excessive wages are the cause of unemployment. This is in response to the claim by Tommaso Monacelli, Vincenzo Quadrini and Antonella Trigari that firms' deleveraging weakens their bargaining power vis-a-vis workers, leading to excessive claims.

18 October 2011

New report by the European Foundation for the improvement of Living and Working conditions

New report by the European Foundation for the improvement of Living and Working conditions is out. It reports the latest developments in working conditions and industrial relations. The graph below (page 3) displays the real GDP growth rates for different EU countries in 2009 and 2010.

06 October 2011

Representing Middle class interest

Jared Bernstein has a couple of Graphs that are worth a thousand words. The first graph displays the evolution of real median familly income  over the past two decades. The second plots real median income growth in two periods: from 1992 to 2000 and between 2002 and 2007. 

What this shows is that rule by the democratic party has been much more successful at advancing workers' wages. So, it does make a difference who is in power and the Republicans have been either unwilling or unable to promote real income growth.

Dunleavy on Cameron's Government

David Cameron is running a ‘ring-donut’ government with a weak centre, and his feeble grip on policy coordination suggests a failure of statecraft

The Organisation for Economic Cooperation and Development at 50