Business cycles

A Blueprint for Greece that would apply to other Europe countries

http://statecapture.blogspot.co.uk/2012/04/blueprint-for-greek-economic-...

Here is a country-by-country look at Europe's debt and deficit problems current to the end of 2011:

http://viableopposition.blogspot.ca/2012/04/country-by-country-look-at-e...

Less than half of Europe is within the 60 percent debt-to-GDP and 3 percent deficit-to-GDP guidelines as mandated by the EU despite the fact that last year was not technically a recession for most nations. Four nations alone are responsible for 69 percent of the EU27 debt.

it may be my view shifting, but I am increasingly becoming aware - as non-british EU citizen - of how partial and predictable the position of the Economist are becoming (I was once an admirer of it, and somehow I still am); basically they keep pushing the same issues

WSJ: Do you think Europe will become less of the social model that has defined it?

Draghi: The European social model has already gone when we see the youth unemployment rates prevailing in some countries.

http://blogs.wsj.com/eurocrisis/2012/02/23/qa-ecb-president-mario-draghi/

Economists and politicians are trapped in the paradigm of big government. Here's a thought. What if long term government spending prior to a recession was a very small percent of GDP. If so, then when a recession hit and government revenues fell, nobody would care about government cutting their spending to avoid a deficit.

So the proper way out of this, is to move toward smaller government. Yes its painful, but that's the only way out.

Sorry, but we have heard too many times that we need to keep spending for now in order to stimulate the economy until it starts to recover. But when the economy shows recovery, there is still no austerity. The spending increases continue. So we have reached the point where austerity is the only option.

yes

Gee - who would ever have guessed that austerity in a depression stifles growth? What shall we call something so obvious and easily forseen ? A Neon Swan?

"austerity measures are likely to make economic conditions worse while raising very little new revenue"

As a British reader, I am getting increasingly frustrated by the Economist's position on austerity - why is it good for Britain but nowhere else? Of course all western nations need a sustainable budget plan for the future, but while short term austerity (with 80% of cuts to go) destroys confidence and business investment/consumer spending in Britain, the Economist still seems to support it despite warning others off it. Is Britain some sort of economic laboratory?

If only the Euro-Zone Economy could Tweet or update its Facebook Status....

Dear friends!
I thank you for this Excellent Opportunity!
Would you Accept some thoughts from a poor professor of economics, why the world is today Suffering? For what reasons?
How could us to overcome this Situation with joy?
A secret ... I will talk to you about triangles Economic .. but beware ...!

If so, please let me know!

Respectfully

Stavri RISTO

I think TE has a bug. There are a bunch of old responses below.

The Greek crisis has been positive for the Eurozone as a whole, and the Euro has won the War to the Bottom in the Currency Wars, same as the USD.....Meanwhile, the Yen, the Real and the Pound have lost it.

here's an overview of the leading indicators for selected eurozone countries: http://im-an-economist.blogspot.com/2012/02/business-cycle-tracking-euro...

Since this is primarily a crisis of confidence, it is hard to look at the typical economic variables and conclude of a positive (or negative) upcoming trend. According to the data from November, things would have been pretty terrible right now, but no one talks anymore of a euro break-up and nationwide bankruptcies. To make better expectations on future economic behaviour, one should rather look at political decisions on how to resolve the crisis (such as reforms in Italy or Spain for example), as these may send much more reliable signals on the recovery.

It seems like EZ is out of recession. How's that for a middle finger to TE and all it's scare-mongering?

Globalisation of finance without proper regulation on lending aggravates the crisis. There need to be uniform fiscal and monitory policy across the countries in eurozone. In order for euro to stay requires a common fiscal union which can impose stringent fiscal rules as the countries with very different growth rate and trade deficit vying with each other for capital.

Wow, it's real time alright. It just jumped from -0.28 to -0.11. Recovery winter!

We had it Welcome to 2012.How many ways can you say “it’s different this time?” There’s “abnormal,” “subnormal,” “paranormal” and of course “new normal.” Mohamed El-Erian’s awakening phrase of several years past has virtually been adopted into the lexicon these days, but now it has an almost antiquated vapour to it that reflected calmer seas in 2011 as opposed to the possibility of a perfect storm in 2012. The New Normal as PIMCO and other economists would describe it was a world of muted western growth, high unemployment and relatively orderly delivering. Now we appear to be morphing into a world with much fatter tails, bordering on bimodal. It’s as if the Earth now has two moons instead of one and both are growing in size like a cancerous tumour that may threaten the financial tides, oceans and economic life as we have known it for the past half century. I also do not understand the grading of AAA BBB in the economy or terrorism I thank you Firozali A.Mulla DBA

If governments don't have the spine to carry out counter-cyclical policies, it would be better if they did nothing than to make things worse.

What a joy it is to read your blog.

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Keep up the wonderful work, and please protect free access, it pays off in the end.

2.

The eurozone trade data looks pretty good, considering that oil price has surged pass $100 a barrel in November. The decline of industrial production has also slowed to 0.1%.

Meanwhile, the US trade deficit has widened by 10% to $47.8 billion. The gap with Germany, at $4.7 billion, is the largest since October 2005.