Economic Analysis

Here is an article from the NYT by Paul Krugman on Europe.  And a slide deck he refers to.  The slide deck shows us a number of things:

• Output and capacity utilization are well below potential
• The crisis reduced Europe's potential GDP
• Investment has tanked
• US productivity is way higher than Europe's
• Interest rates are low
• People do not expect inflation (or expect low inflation)
• Bank lending to the private sector has tanked
  

Krugman is arguing for a Keynesian fiscal response to tackle the demand deficiency.

Here is an article from the NYT on the Phillips Curve. Janet Yellen thinks it's still important ... others don't.

This is a video on coordination games and Keynes.  Slides are here.

This is a recap of our discussion on Brazil.

Here is the recap for this week (last week)

We are discussing Brazil for the next two weeks so I am posting some articles from The Economist.

A special report on Brazil: September 2013

Some more recent articles

Custo Brasil

And the IMF's change of heart about Capital Controls ... although it would appear they still are no substitute for good macro policies and a sound financial system.

Bottom line is that many governments look to demand side policies to fix business environment or supply side problems - it just does not work. This is funny because fixing the supply side is 'in the hands of the government' as it were - the issues are purely domestic, yet they appear to make little progress on infrastructure, education, taxes, institutions, corruption ....  instead they call for 'global regulation' and 'international coordination' of demand side issues.

In 2016-17 things are looking up for Brazil (at some point things are so bad, that they do have to get better) and the government has tried to do something about the labour market and pensions.

Here are two articles from the NYT on QE.  QE may be coming to an end but interest rates are likely to remain low for some time.

Just in case you are optimistic about the world economy.  Don't be.  There are risks of deflation in Europe.  This article explains why positive inflation is a good thing.

Here are some articles from the NYT and The Economist on Spain and an interesting podcast from Planet Money (NPR) on one Caja in Spain.

This article explains the different types of unemployment: Frictional, Cyclical, Structural.

And then I have a series of articles on Spain from 2009 to 2014.  The 2009 article is explaining the dual labour market in Spain (something we talked about).  The more recent articles (2012-2014) are about reforms.

This is a recent article on the Spanish recovery from the NYT, apparently things are finally back to where they were before the crisis.  So it has taken a decade.

And a podcast from NPR on Cajasur in Cordoba