RSS feedoutput gap
’Carry trade = quantitative easing
Can prolonged periods of negative real interest rates ever be good for economies in a globalised world?
Anders Aslund, senior fellow of the Peterson Institute for International Economics, argues no.
The UK’s vanishing productivity (and the data’s gone too)
FT Alphaville loves data mysteries — and there’s something particularly ironic about fourth-quarter UK productivity data not being, erm, produced on time.
Anyway, the UK’s Office for National Statistics said earlier this week that the Q4 productivity numbers scheduled for Wednesday would be delayed until April 7 because of “data quality issues.”
More on that commodities vs global demand chart
We posted this chart from the San Fran Fed (via Mark Thoma) in yesterday’s further reading list, but it’s worth a second look:
More than anything, this reminds us of the “missing chart” that we stole from John Kemp and wrote about a little while back:
Further further reading
For the commute home, or while worrying about what Friday may bring,
- ‘What if the stock market was a bond?’
- One hundred ways to reduce the federal deficit.
- A good, basic summary of Saudi Arabia’s importance.
James Bullard on QE2 and the ‘global output gap’
James Bullard delivered an interesting, chart-rich speech on inflation, QE2 and global output gaps on Thursday. (And yes, ‘interesting’ is all subjective.)
The now non-voting St Louis Fed President was a strong advocate of QE2 as a way to reverse alleged deflationary pressures.
Selling England by the pound…
… is the title of the 1973 album from ‘prog rockers’ Genesis, and it also sums up the UK’s inflation problem, according to Bank of England hawk, Andrew Sentance.
In a speech at the Institute of Economic Affairs ‘State of the Economy’ conference on Thursday,
The pre-emptive UK rate hike
Citigroup’s Michael Saunders and Ann O’Kelly, on this week’s Bank of England rate decision:
We expect that the MPC will leave rates on hold at the upcoming [February 10] meeting. However, we believe it may well be a much closer call than many expect,
John Kemp: There is no global output gap
It’s no secret we at FT Alphaville ♥ John Kemp.
And we output gaps. Or at least, certain policymakers’ over-reliance on them.
So it’s with some joy that we read the latest from the Reuters columnist,
Inflated expectations and spare capacity concerns
As Nicolas Sarkozy has noticed, worries about global inflation have picked up in the first weeks of 2011.
And according to two notes out on Monday this is not just down to rising commodity prices; there is also a lack of spare capacity that is being reflected in rising core inflation and increased expectations.
Beveridge redux
Maybe there’s not so much to this Beveridge Curve business after all.
As we’ve written previously, many economists and other observers have been discussing in recent months the rather large and persistent gap between job openings and the high unemployment rate,
Inflating the output gap at the BoE
. . . the risks to the Committee’s central view of a gradual recovery of output remain to the downside.
That’s Bank of England governor Mervyn King testifying to the UK Treasury Committee about the February inflation report.
Fishing for QE clues
Thursday’s FT has an interview with the Bank of England’s executive director for markets, Paul Fisher, on the subjects of quantitative easing, inflation, deflation, the output gap, money supply, and the UK economy in general.
Fed slacker fightback
Here’s further evidence that the Fed is somewhat split on the output gap theory and the amount of ‘slack’ in the US economy — and by extension, the inflation and deflation risks that face it.
Slack occurs when the output gap is a negative number — when the economy is below its full potential.
Non-slacker at the Fed
Reuters columnist Rolfe Winkler points us to a recent speech and presentation by Fed governor James Bullard.
The speech, Winkler says, is a direct refutation of economist Paul Krugman’s ideas that inflation,
Work work work work…
The French are lazy.
Germans are efficient.
And Brits and Americans are…
Well, the Brits and Americans just work.
Thanks to the FT’s Money Supply blog for pointing us in the direction of the UK’s Office for National Statistic’s international comparisons of productivity,
Don’t fear the inflation, Goldman says
Goldman Sachs is putting an end to the deflation vs inflation debate, once and for all!
In a 30-page research note out on Wednesday, the bank comes down firmly on the side of (moderate) deflation in the near-term.
Deflation dead and deader, Federal Reserve-style
Here’s an interesting little chart from BofA Merrill Lynch.
Economy watchers should by now be familiar with the concept of the output gap – a measure of the amount of ‘slack’ in the economy; the bigger the output gap,
Inflation gestation
So where’s the deflation which Bank of England governor Mervyn King is so desperate to avoid?
The UK’s rate of inflation is slowing — but it’s certainly not nearing deflation levels. The Consumer Prices Index annual inflation rate was 1.6 per cent in August,