FURTHER FURTHER READING
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First off – bonuses. I’ve said I’m pragmatic, I’ll pay in the market to get the best people and to hold onto them. What more do you want to know?
– Ross McEwan, ‘Ross McEwan, RBS chief executive, answers your questions,’ Guardian Read more
Or as the FT’s Martin Wolf says on Wednesday, regarding the increasing automation of the economy …
[W]e must reconsider leisure. For a long time the wealthiest lived a life of leisure at the expense of the toiling masses. The rise of intelligent machines makes it possible for many more people to live such lives without exploiting others. Today’s triumphant puritanism finds such idleness abhorrent. Well, then, let people enjoy themselves busily. What else is the true goal of the vast increases in prosperity we have created?
If the above is true then the future depends on us being able to successfully redefine labour and purpose — and with it value itself. A new meritocracy based on progress, talent, creativity and doing the previously considered impossible (irrespective of monetary value) must in other words be nurtured. Read more
Live markets commentary from FT.com
Carney drops employment link with interest rates || Chinese exports and imports rose sharply in January || Scotland will not be allowed to share the pound || The Republican-controlled House of Representatives has voted to increase US borrowings || Janet Yellen has turned a cold shoulder to the pleas of emerging markets || Bank of England calls forex-rigging review || Investors including Pimco and BlackRock consider action against Ocwen Financial || Danone will more than double its stake in China’s leading dairy company || Toyota, “the world’s largest automaker, will recall about 1.9 million Prius vehicles || China land sales pull in record $672bn || Reckitt Benckiser upbeat despite EM turmoil || Markets Read more
So just how fast will the the Bank of England raise interest rates? For clues and pointers on its latest thinking now that employment has rapidly approached the thresholds (markers, thumb rules?) of forward guidance , the Inflation Report is out. Click to get straight to it:
We think that a revitalisation of a certain type of ABS, a so-called plain vanilla ABS, capable of packaging together loans, bank loans, capable of being rated, priced and traded, would be a very important instrument for revitalising credit flows and for our own monetary policy… Read more
Here’s the opening paragraph from Arthur Okun’s 1973 paper, Upward Mobility in a High-Pressure Economy:
The choice of an aggregate target of resource utilization remains one of the key issues facing policy makers and macroeconomists. Obviously, fuller utilization of labor and capital brings benefits in the form of extra incomes, output, and jobs; at the same time, it clearly imposes costs by increasing inflationary tendencies. Various economists see these benefits and costs very differently. Henry Wallich once suggested that macroeconomists could be classified into advocates of “high pressure” and “low pressure” operation of the economy. At the present time, the controversial range for the target unemployment rate extends from 4 to 5 percent. Generally, high-pressure advocates concede that, with existing labor market institutions, unemployment rates below 4 percent would be associated with unacceptable inflation; while most low-pressure advocates agree that unemployment rates above 5 percent are intolerable.