This time is different

Recessions that are associated with systemic banking crisis (A systemic financial crisis affects a large share of a country’s financial system) tend to be deep and protracted.

The key recurring precursors of a systemic financial crisis: a real estate bubble, high levels of debt (depends how we measure this one), chronically large current account deficits, and signs of slowing economic activity.

Now for my friend OSR and zeitgeist etc... US history shows that this time is not different and that the crisis (or debt default) is not different from other times.

four previous systemic financial crises that the US has experienced since 1870. These include:

·         The crisis of 1873 (called the Great Depression until the 1930s),

·         The 1893 crisis,

·         The panic of 1907, and

·         The Great Depression.

Given that all of the earlier crises predate the creation of deposit insurance in 1933, and that three of the four crises predate the establishment of a central bank in the US, one could well quibble about the claim that the relevant institutions are more comparable across centuries in the US than across advanced countries over the last 30 years.

Cyprus is short of data to compare systemic crisis. Cyprus was a developing country until 1980's.. And then we experienced the Economic miracle.  However we should have known that countries experiencing sudden large capital inflows are at a high risk of having a debt crisis. This time is different? No this is the first banking crisis.

Things will change. They always do. But how much we will suffer until this is done nobody knows.

original article of this time is differrent by Carmen M Reinhart, Kenneth Rogoff http://www.voxeu.org/article/time-different-again-us-five-years-after-onset-subprime-0

Read more...

Ανάπτυξη, Ανάπτυξη, Ανάπτυξη. Οταν ακουγεται κάτι πολλές φορές είναι σωστό. Είναι όμως;

Should Cyprus instead of concentrating on economic growth to adapt the King of Bhutan index of Gross National Happiness index? Is Government's target the Happiness of the citizens or not?

Here you can fnd what kig of Bhutan is talking about
http://www.ophi.org.uk/wp-content/uploads/Ura-et-al-Bhutan-Happiness-Chapter.pdf?cda6c1


and Obert Skidelsky questioning growth here http://www.project-syndicate.org/commentary/economic-equality-and-life-satisfaction-by-robert-skidelsky

The first factor to undermine the pursuit of growth was concern about its sustainability. Can we continue growing at the old rate without endangering our future? As the Stern Review of 2006emphasized, we must sacrifice some growth today to ensure that we do not all fry tomorrow.

A more recent concern focuses on the disappointing results of growth. It is increasingly understood that growth does not necessarily increase our sense of well-being. So why continue to grow? The groundwork for this question was laid some time ago. In 1974, the economist Robert Easterlin published a famous paper, “Does Economic Growth Improve the Human Lot? Some Empirical Evidence.” 

Above a rather low level of income (enough to satisfy basic needs), Easterlin found no correlation between happiness and GNP per head. In other words, GNP is a poor measure of life satisfaction.

But another finding has also started to influence the current debate on growth: poor people within a country are less happy than rich people. In other words, above a low level of sufficiency, peoples’ happiness levels are determined much less by their absolute income than by their income relative to some reference group. We constantly compare our lot with that of others, feeling either superior or inferior, whatever our income level; well-being depends more on how the fruits of growth are distributed than on their absolute amount.

Put another way, what matters for life satisfaction is the growth not of mean income but of median income – the income of the typical person. In rich societies over the last three decades, mean incomes have been rising steadily, but typical incomes have been stagnating or even falling. In such cases, it is not more growth that we want, but more equality.

Read more...

η υπερβολική λιτότητα δεν οδηγεί πουθενά. Θα πρέπει να σταματήσει. Παραδέχετε ότι έκανε λάθος το ΔΝΤ. Οι εφημερίδες 'πέζουν πελλό'

από:

http://www.sofokleous10.gr/portal2/toprotothema/toprotothema/2012-10-16-21-20-59-2012101676596/

Το Διεθνές Νομισματικό Ταμείο έχει δημοσιεύσει τα αποτελέσματα μιας μελέτης, τα οποία δείχνουν ότι ο αντίκτυπος της δημοσιονομικής λιτότητας στην ανάπτυξη είναι υψηλότερος από ότι είχε προηγουμένως εκτιμηθεί. Το πολιτικό συμπέρασμα είναι προφανές: η υπερβολική λιτότητα δεν οδηγεί πουθενά. Θα πρέπει να σταματήσει.

άρθρο του David Karsbol

http://www.tradingfloor.com/posts/why-the-imf-is-wrong-and-gdp-surprises-from-african-countries-1578924898?utm_source=notifications&utm_medium=email&utm_campaign=new-post



άρθρο του Καζάκη

http://dimitriskazakis.blogspot.com/2012/10/blog-post_16.html

Ενώ βρισκόμαστε ένα βήμα πριν από το Μνημόνιο, οι περισσότερες εφημερίδες δεν καλύπτουν το θέμα (νομίζω εκτός από το http://www.nomisma.com.cy/el-gr/greece/52/14236?pgn=0). 

Αν κάλυψαν το θέμα και αλλες εφημερίδες ενημερώστε με.

Read more...

Νόμπελ Οικονομίας 2012

Σε μια εποχή που ίσως ήρθε το τέλος του καπιταλισμού όπως τον γνωρίζαμε, που οι αγορές δεν μπορούν να ρυθμίσουν τα πάντα, που όλοι φτωχεύσαμε και περιμένουμε όλες τις απντήσεις από οικονομολόγους γκουρου,

το βραβείο Νόμπελ Οικονομίας για το 2012 πάει στους Άλβιν Ροθ και Λόιντ Σάπλεϊ για την «θεωρία των σταθερών κατανομών και την εφαρμογή του σχεδιασμού της αγοράς» και οχι στους Rogoff και Reinhart που ασχολήθηκαν με το χρέος των χωρών.

Τι μας λέει αυτό... Τα οικονομικά δεν είναι πολιτική

Το νόμπελ πάει σε μια θεωρία των παιγνίων που εν μέρει δεν έχει καμιά σχέση με την πραγαμτικότητα (πραγματική οικονομία)

Τα οικονομικά είναι κοινωνική επιστήμη

Εν τέλει έχουν τα οικονομικά σχέση με την κρίση; Ποια η σχέση του οινομολόγου, του λογιστη και  του πολιτικού (δικηγόρου);

Read more...