Is QE2 working?
February 3, 2011 by Charlie Stedman · Leave a Comment
FEDERAL RESERVE Chairman Ben Bernanke (most influential economist of the past decade?) gave a speech today discussing the economic outlook and the Fed’s role in supporting economic activity. The Federal Open Market Committee’s policy stance, he argued, is having a positive effect on current economic conditions:
A wide range of market indicators supports the view that the Federal Reserve’s securities purchases have been effective at easing financial conditions. For example, since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation-indexed securities has risen from low to more normal levels.
Head inland to experience Spain, holidaymakers told
January 31, 2011 by Charlie Stedman · Leave a Comment
Holidaymakers in Spain and Portugal should head inland if they want to experience the true nature of the countries, it has been claimed. Rather than taking trips to the coast, Lonely Planet has recommended that visitors travel only around ten miles from the Costas to take in a “totally different atmosphere where things are still very traditional and very Spanish”. The news may be of interest to those looking to buy property in Spain, with inland locations likely to rise in popularity. “If you are looking for a distinctive Spanish or Portuguese experience then you should try and do a little bit of exploring inland rather than just sticking to beaches,” Tom Hall, travel editor at Lonely Planet, said. “Exploring inland, for example if you’re on the Costa in Spain, if you can go ten miles inland, you will often find a totally different place, a totally different atmosphere, still very traditional and very Spanish.”
Hu’s counting
January 27, 2011 by Charlie Stedman · Leave a Comment
DURING his state visit to America last week, President Hu Jintao of China offered some familiar banalities and worthy pieties, as this week’s Banyan remarks. But he also made a couple of hard, quantitative claims. In a speech on January 20th, President Hu said that cheap inexpensive imports from China had saved American consumers $600 billion over the past decade (2001-2010) and that exports to China had created over 14m jobs around the world.
Those figures were probably provided by the Ministry of Commerce, but I’ve no idea how they were calculated. (The figure of 14m jobs made an earlier appearance in a 2009 piece in the People’s Daily.) In this blogpost and a sequel, I’ll see if I can make sense of President Hu’s arithmetic.
I’ve received great help in this endeavour from Raphael Auer of the Swiss National Bank and Princeton University. In a paper* last year with Andreas Fischer, also of the Swiss National Bank, Mr Auer estimated the impact of low-wage competition on 325 American manufacturing industries—everything from cat food to artificial funeral wreaths.
Isolating the effect of foreign competition on prices can be tricky. If American d
New Builds falter in US property market
January 26, 2011 by Charlie Stedman · Leave a Comment
Housing starts in the US fell by 4.35 per cent in December, according to figures released by the Commerce Department in the country. Speaking to Overseas Property Professional, national house-building companies like KB Homes and Lennar believe that unemployment and foreclosure rates mean that demand for new builds will continue to be slow. Despite their fall in December, over the course of 2010, housing starts rose by 6.1 per cent compared to the previous year, although they still remained at the second-lowest level since records began, the news provider added. The news comes after RealtyTrac revealed that the number of homes in the US receiving a foreclosure filing is expected to grow by around 20 per cent in 2011. According to the organisation, this is a result of the high unemployment in the country and banks’ decision to resume seizures. Meanwhile, savvy investors have been told to act now if they want to capitalise on the wealth of distressed property available in the US market.
Weekend link exchange
January 20, 2011 by Charlie Stedman · Leave a Comment
TODAY’S recommended economics writing:
• Eisenhower charts of the day (Felix Salmon)
• Why have Spanish and French unemployment rates differed? (Vox)
• America must brace itself for turbulence (Financial Times)
• Less fuel also means less revenue (New York Times)
• Eurosclerosis, then and now (Paul Krugman)