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Missing the anti-inflation central bankers.
In two recent posts, Martin Feldstein and Andrew Sentance (former member of the Bank of England monetary policy committee) criticize the recent actions of central banks to bring inflation back to its...
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The Greek Dra(ch)ma is back?
One more round of negotiations between Greece and the rest of is European partners to seek a last-minute solution before the Greek government runs out of money. Negotiations could end up going in any...
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Interest rates: natural or artificial?
The debate about who is responsible for the low level of interest rates that has prevailed in most economies over the last years heated up when Ben Bernanke wrote a series of blog posts on what...
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Greece: negotiating without trust
The Eurozone and Greece are going through the last hours of a negotiation to ensure release of additional funds from the previous agreement and possibly setting the basis for the next one.The leaked...
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Did the IMF provide support to Syriza?
The IMF published yesterday a preliminary analysis on the debt sustainability of the Greek government. The timing of the publication, a couple of days ahead of the referendum, has triggered a variety...
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Micromanagement of European reforms
The agreement between Greece and its Euro partners is full of very detailed policies to be approved by the Greek government in the coming week. How did we end up in a situation where the domestic...
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A third scenario for stock markets
Robert Shiller on the New York Times argues that the stock market is expensive by historical standards using the cyclically-adjusted price earnings ratio (CAPE) that he has made popular through his...
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Savings glut and financial imbalances
Martin Wolf in today's Financial Times discusses the reasons for low interest rates and suggests some interesting scenarios for the years ahead. I agree with most of what he says but I have doubts...
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GDP growth is not exogenous
Ken Rogoff in the Financial Times argues that the world economy is suffering from a debt hangover rather than deficient demand. The argument and the evidence are partly there: financial crises tend to...
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The missing lowflation revolution
It will soon be eight years since the US Federal Reserve decided to bring its interest rate down to 0%. Other central banks have spent similar number of years (or much longer in the case of Japan)...
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Counting backwards to the next recession
In most advanced economies business cycles can be well characterized by a succession of long expansion phases that are interrupted by short recessions. Given this pattern it is sometimes natural to...
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BIS redefines inflation (again)
An interview with Hyun Song Shin, economic adviser and head of research at the BIS, reposted in the BIS web site reminds us of the strange and heterodox views that the BIS (and others) have about the...
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A 2016 recession would be different
If the US or the Eurozone entered a recession this year, a few macroeconomic variables would look very different relative to previous recessions.1. The Yield curve would be very steep. Unlike in any...
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ECB: I cannot do whatever it takes
The ECB just announced a further reduction in interest rates, extended its QE program by increasing the rate at which buys assets, beefed up the TLTRO program and extended its horizon. It all sounds...
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Central Banks need to get real (not nominal)
While the ECB and Bank of Japan are exploring negative interest rates, the US Federal Reserve is preparing us for a slow and cautious increase in short-term interest rates. Long-term rates remain at...
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World growth: mediocre or pathetic?
The recent disappointing performance of the world economy has been labelled as the "new mediocre" by Christine Lagarde, the "new reality" by Olivier Blanchard and the "new normal" by many others.How...
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How informative is the slope of the Yield Curve?
The yield curve is becoming flatter. The difference between the 10-year and 2-year government bond is now approaching 1%. The yield curve tends to get flatter when the economy reaches the end of an...
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The asymmetry of inflation or the ECB?
From this Financial Times article: In yesterday's press conference Mario Draghi was asked about the possibility of changing the ECB's inflation target. His answer is very revealing about the extreme...
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9, 8, 7, 6.7,... Speculating on China growth
The deceleration of China's GDP growth rate has been seen both as a natural transition towards more sustainable growth rates and a sign that the Chinese model of growth is coming to an end. How does...
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Experts, facts and media
Jean Pisani-Ferry has written a very interesting post about the need for trusted experts in a democracy. The post addresses the criticisms that economic experts have received as a result of the Brexit...
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You can lower interest rates but can you raise inflation?
Last week the Bank of England lowered their interest rates. This combined with previous moves by the ECB and the Bank of Japan and the reduced probability that the US Federal Reserve will increase...
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The stock market looks cheap
How expensive is the US stock market? Have the strong gains since the financial crisis of 2008 built yet another massive bubble that will require a correction? Some investors fear that recent stock...
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The OECD procyclical revision of fiscal policy multipliers
The OECD just published its November 2016 Global Economic Outlook. Their projections suggest an acceleration of global growth rates in particular in countries with plans for a fiscal expansion. In the...
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Make the Risk Premium small again
In one my previous posts I looked at the stock market valuations in the US to conclude that they were in line with recent historical data. In fact the stock market looked cheap relative to most years...
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Moving Blog Location
New Year, new address and look for my blog. The new address is http://antoniofatas.blogspot.comIf you have been subscribing to this blog, you can change your subscription by going to this new...
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