tag:blogger.com,1999:blog-36227136.post7861310971762347618..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: Tackling the slow, painful decline: A bad day of economic data for the eurozoneOEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-36227136.post-86581249013143834852013-02-15T15:52:29.735+00:002013-02-15T15:52:29.735+00:00Open Europe's "we should relish this"...Open Europe's "we should relish this" relating to some nebulous undetailed g:good news" is absurd.<br /><br />The Euro is crippling not only the eurozone - it's doing that massively - but also those on the periphery and World Trade in general. It should have been abandoned years ago but even now would be better for all than continuing with the farce. <br /><br />Over the gates somewhere in Brussels should be inscribed "Abandon hope all ye who enter here" for there is NO HOPE from the Greeks, Spaniards, Portuguese, Italians and - er - the French. christina speightnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-75753424743625208282013-02-15T13:56:11.069+00:002013-02-15T13:56:11.069+00:00Nearly all official forecasts are rubbish and this...Nearly all official forecasts are rubbish and this is likley to be another one.<br />REASONS<br />1. They work with the same models as before (in much shorter cycles). Which simply not work here. Cycle is much longer so downturn and therefor time required for recovery. That is if you want to look incycles. Anyway if seen as a correction it works more or less similar.<br />2. Several models even miss the deleveraging. Last 1-2 decades basically all growth can be explained by either the private sector or the government borrowing more than would be sustainable seen GDP growth. There was likely some room for overborrowing, but not that much and not that long. This is now reversed/corrected. Leading to less government expenditure and less consumption. Working with a simple multiplier for the overborrowing is easiest. Which also gives you a heartattack because how much the Western economies have grown without that overborrowing stimulus (hardly anything).<br />Another way to look at it is seen that the economy has been on steroids and now has to go cold turkey. Question being where should you start from the bubblephase or a corrected one?<br />3. What you do see is first people extend spending on durables and investments. After some time there is a catch up effect. However this effect is nowhere near big enough to get the economy going again.<br /><br />What works better is see where new growth should come from. Divide into 3 or 4 (seen export/or export minus import as a seperate item) sectors.<br />Add say 1% after 2-3 year for the catch up (for roughly 1 year or so).<br />France:<br />-Government will cut (zero growth at best);<br />-French consumers (will not spend more, confidence is extremely low and incomes are not rising but taxes are), leading to some negative growth;<br />-business. Like Spain nobody is investing and foreign investors are running for the door. Probably exports slightly up and imports down (if you put that here, could be seperate or spread over all 3 other sectors, but you have to be consistent and correct when necessary, so you got everything but nothing double). Zero growth at best.<br />Overall leading to some negative growth. Catch up is not even happening in Germany now and France is always behind so nothing to add from there.<br /><br />This has given much better results than the standard models used by IMFs and ECBs. It cost them too much time to come up with other ones. And their very weak point they never explain like here where the growth should come from.<br />In this crisis if you cannot see where growth should come from it is very unlikley to happen.<br />Good thing you can judge official figure in 5 minutes or so this way.<br />Can make a similar model on productivity an size of the labor force. Compare the 3. But always keep asking where does the growth come from. With all these estimates it is mainly from the formula used not from real life. Difficult to get data a lot comes indirectly from GDP stuff. Which is as said most likley not accurate. Riknoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-27923102978599584242013-02-15T13:40:09.308+00:002013-02-15T13:40:09.308+00:00"The absence of any credible policy for corre..."The absence of any credible policy for correcting this in the current electoral campaign should be of grave concern to all of Europe."<br /><br />Italy's economic straits are its own business. It is a sovereign nation.<br /><br />And there is no such political entity as "Europe," and OpeEurope does its readers a disservie by constantly -- and for pro-EUSSR purposes -- insidiously reinforcing the notion that there is.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-65416854612619517202013-02-14T21:42:12.282+00:002013-02-14T21:42:12.282+00:00"The worst is over". Olli rehn two years..."The worst is over". Olli rehn two years ago...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-73379028523524146532013-02-14T14:14:30.873+00:002013-02-14T14:14:30.873+00:00The only larger part of the EZ that could pull the...The only larger part of the EZ that could pull the economy of the ground is Germany. And it looks like that aint going to happen.<br />Looking at Merkel's own economic policies they were/are nearly as appaling as those of the rest.<br /><br />She simply has been lucky mainly becuse the German economy is for a large part based on the sector that did much better than the other ones: the hitec industry.<br />Look at the rest:<br />-not tackling costwise aging;<br />-want to increase entitlements (to get reelected);<br />-discussion ober stating with a minimum wage;<br />-unable to get back to a surplus iso of a deficit even with 3% growth of GDP;<br />-now proposes taxraises for large companies.<br />If you look at above list it looks Hollande or Milliband, but it is Merkel.<br />With as difference thet Germany can probably afford these things,for the time being. Riknoreply@blogger.com