La « politique de civilisation » et la « refondation du capitalisme » projets emphatiques dont M. Guaino, en toute simplicité , assigne la mise en œuvre aux dirigeants de notre pays (Le Figaro, 31 janvier), se réduit plus prosaïquement, à la lecture, à un retour au capitalisme d’Etat, modèle 1945 révisé 1958.
Et dire que depuis trente ans les analystes du déclin, Français et européen, croyaient en avoir trouvé la source dans les excès de prélèvements obligatoires alliés aux erreurs majeures de l’investissement public et des subventions à fonds perdus. L’Etat moteur moralisateur de la croissance, que n’y avait-on pensé plus tôt… mais il faudrait commencer par ressusciter le minitel et le plan calcul.
Saturday, January 31, 2009
Wednesday, January 28, 2009
Clear thinking about the stimulus
The best analytical framework to date for evaluating the impact of a fiscal stimulus policy is provided by Kevin Murphy, professor at the University of Southern California for a debate with Robert Lucas, and John Huizenga,and moderated by Myron Scholes at Chicago. Even acerbic Brad De Long says so, even though he disagrees with parameters values, and thus with Murphy's conclusions.
You can find the original Power Point presentation at:
http://faculty.chicagogsb.edu/brian.barry/igm/Evaluating_the_fiscal_stimulus.pdf
You can find the original Power Point presentation at:
http://faculty.chicagogsb.edu/brian.barry/igm/Evaluating_the_fiscal_stimulus.pdf
The competition for political transfers
Teachers are certainly right when favoring left wing politicians (even when moderate as democrats generally are), especially in recession time.
From the New York Times (Wednesday, January 28), this summary outcome of recent economic policy debates:
Under the headline: “Stimulus Plan Would Provide Flood of Aid to Education”, the subtitle says it all: “Schools, universities and child care would receive $150 billion in net spending in the stimulus package scheduled for a vote in Congress”.
No wonder that classical liberals become hard to come by in univerisities.
From the New York Times (Wednesday, January 28), this summary outcome of recent economic policy debates:
Under the headline: “Stimulus Plan Would Provide Flood of Aid to Education”, the subtitle says it all: “Schools, universities and child care would receive $150 billion in net spending in the stimulus package scheduled for a vote in Congress”.
No wonder that classical liberals become hard to come by in univerisities.
Monday, January 26, 2009
European worries
This crisis could grow worse in Europe due to the reluctance of eurozone authorities to adopt an easier monetary stance. According to Hugh Hendry, founding partner of Eclectica Asset Management, in a video interview on the Financial Times (23 january, 2009), the current ECB policy is a remake of the Gold Bloc dramatic mistake, following WWI, in its ill fated tentative to maintain overvalued currencies at their pre-war level. Due to divergent inflation rates among eurozone countries, a debt default is not impossible in some member countries, leading to a "break up of the euro". A return to equilibrium through relative monetary tightness, and thus deflation - rather than through exchange rate depreciation which is much easier and less contractionary - spells trouble in a period of recession.
Desmond Lachman of the American Entreprise Institute says about the same thing in his recent paper (January 9, Australian Financial Review): "Prolonged Recession Could Shake Euro to its Core".
A suivre...
Desmond Lachman of the American Entreprise Institute says about the same thing in his recent paper (January 9, Australian Financial Review): "Prolonged Recession Could Shake Euro to its Core".
A suivre...
Saturday, January 17, 2009
Still a mild recession?
Deux mauvaises nouvelles coup sur coup en provenance des Etats-Unis:
Tout d'abord Casey Mulligan qui suit en parallèle sur son blog "Supply and demand (in that order)" l'indice de la production industrielle 2008-2009 et celui de 1929-1930, montre que la baisse en cours suit fidèlement le tracé de celle de la Grande Dépression, mais qu'elle n'a parcouru pour l'instant qu'un tiers du cheminement complet de 1929-1930. Verra-t-on en 2009 une baisse des deux autres tiers?
De plus, le site de prévisions de marché Intrade (http://www.intrade.com) cote actuellement la probablilité d'une dépression - définie comme une baisse du PIB de 10 % ou plus - à 57 % aux Etats-Unis dans l'année en cours.
Ni l'une ni l'autre de ces prévisions ne constitue un oracle. Les performances prévisionnelles sont toujours mitigées. Ainsi j'ai cité précédemment la prévision de marché pour l'élection présidentielle américaine, qui était juste, et l'avis de gros temps sur l'euro, qui ne s'est pas réalisé pour l'instant.
Mais ces deux annonces dénotent malgré tout la montée d'une certaine inquiétude.
Tout d'abord Casey Mulligan qui suit en parallèle sur son blog "Supply and demand (in that order)" l'indice de la production industrielle 2008-2009 et celui de 1929-1930, montre que la baisse en cours suit fidèlement le tracé de celle de la Grande Dépression, mais qu'elle n'a parcouru pour l'instant qu'un tiers du cheminement complet de 1929-1930. Verra-t-on en 2009 une baisse des deux autres tiers?
De plus, le site de prévisions de marché Intrade (http://www.intrade.com) cote actuellement la probablilité d'une dépression - définie comme une baisse du PIB de 10 % ou plus - à 57 % aux Etats-Unis dans l'année en cours.
Ni l'une ni l'autre de ces prévisions ne constitue un oracle. Les performances prévisionnelles sont toujours mitigées. Ainsi j'ai cité précédemment la prévision de marché pour l'élection présidentielle américaine, qui était juste, et l'avis de gros temps sur l'euro, qui ne s'est pas réalisé pour l'instant.
Mais ces deux annonces dénotent malgré tout la montée d'une certaine inquiétude.
Thursday, January 15, 2009
Reality strikes back
From the Financial Times (January 11) the following comment by David Marsh in a paper titled "France, Germany and fissures in the eurozone":
"Emu had required improbable compromises - notably, that it would work without substantial fiscal tranfers between countries of markedly different economic performance. Using a single currency to lash together 16 disparate nations has had effects similar to those among occupants of a life raft on a storm-tossed sea. The euro has provided members with an aura of robustness but also made them more prone to fissures caused by disturbances in their internal balance of forces.
... fixing exchanges rates among countries with disparate patterns of prices and productivity has led to changes in relative competitiveness. Since 1999, Germany has gained an overall competitive advantage of more than 10 per cent, while Italy has suffered a loss of nearly 40 per cent, according to Organisation for Economic Co-operation and Development figures based on unit labour costs. During much of the euro's first decade, the positive impact of generally low, stable Emu interest rates largely outweighed the negative influence of disrupted competitiveness. However, as economies contract, papering the cracks will become more difficult".
Readers of my pages in Le Figaro ("Cheminement du Futur") knew that already in 1995. Those who bought l'Erreur européenne also knew that the euro would prove detrimental to growth in many European countries (Grasset 1998, and Euro Error, Agora, 1999), while readers of my 2002 paper "Les promesses de l'euro: tout était faux" could plumb the depth of offical lies (sorry, I mean "political correctness") regarding the alleged economic advantages of the common currency.
A few American colleagues (Milton Friedman, Martin Feldstein) clearly explained that the eurozone was not an "Optimal Currency Area" and thus would be vulnerable to an asymetric shock while lacking the US compensating mechanisms. But most economists in the European academic Establishment, and in the press, did not do their homework and evaded their responsiblities by arguing about details and procedures while endorsing, at best with very minor reservation, the official creed. Some of them faulted the ECB interest rate policy stance, but cautiously avoided any direct criticism aimed at the euro.
By usual standards however, a decade for some truth to emerge from a sea of misinformation is not that long after all...
"Emu had required improbable compromises - notably, that it would work without substantial fiscal tranfers between countries of markedly different economic performance. Using a single currency to lash together 16 disparate nations has had effects similar to those among occupants of a life raft on a storm-tossed sea. The euro has provided members with an aura of robustness but also made them more prone to fissures caused by disturbances in their internal balance of forces.
... fixing exchanges rates among countries with disparate patterns of prices and productivity has led to changes in relative competitiveness. Since 1999, Germany has gained an overall competitive advantage of more than 10 per cent, while Italy has suffered a loss of nearly 40 per cent, according to Organisation for Economic Co-operation and Development figures based on unit labour costs. During much of the euro's first decade, the positive impact of generally low, stable Emu interest rates largely outweighed the negative influence of disrupted competitiveness. However, as economies contract, papering the cracks will become more difficult".
Readers of my pages in Le Figaro ("Cheminement du Futur") knew that already in 1995. Those who bought l'Erreur européenne also knew that the euro would prove detrimental to growth in many European countries (Grasset 1998, and Euro Error, Agora, 1999), while readers of my 2002 paper "Les promesses de l'euro: tout était faux" could plumb the depth of offical lies (sorry, I mean "political correctness") regarding the alleged economic advantages of the common currency.
A few American colleagues (Milton Friedman, Martin Feldstein) clearly explained that the eurozone was not an "Optimal Currency Area" and thus would be vulnerable to an asymetric shock while lacking the US compensating mechanisms. But most economists in the European academic Establishment, and in the press, did not do their homework and evaded their responsiblities by arguing about details and procedures while endorsing, at best with very minor reservation, the official creed. Some of them faulted the ECB interest rate policy stance, but cautiously avoided any direct criticism aimed at the euro.
By usual standards however, a decade for some truth to emerge from a sea of misinformation is not that long after all...
Monday, January 12, 2009
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