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Saturday, August 10

10th Aug - Weekender: Linkfest

After couple of days of blogging holiday, here are some of the more interesting article links from the past couple of days. Notice the unusually large Finnish-language section.

Brussels blog round up 3 – 9 AugustEuropp / LSE
Gibraltar-Spain, Middle East peace talks, and is there any point to economic analysis?

To end the Eurozone crisis, bury the debt
Pierre Pâris, Charles Wyplosz: The Eurozone’s debt crisis is getting worse despite appearances to the contrary. How can we end it? This column presents five major options for reducing crisis countries’ debt. Looking into the details, it seems the only option that is both realistic and effective is for countries to default by selling monetised debt to the ECB. Moral hazard aside, burying the debt seems to be the only way we can end the crisis.

Why the eurozone will come apart sooner or laterFT
Samuel Brittan: The single currency has failed to become the harmonising force that it was supposed to be

The Euro Crisis – It Ain’t Over ‘Til It’s OverPragCap
Interesting note here from Bridgewater on the Euro crisis (via ValueWalk).  They cite 5 reasons why the Euro crisis isn’t over:

A Weaker Euro for a Weaker EuropeProject Syndicate
The debate about how to help deficit-ridden southern European economies is often presented as a conflict between them and the eurozone’s healthy core, particularly Germany. But a new and more important imbalance – southern Europe's trade and services deficits with China – suggests a possible solution to economic malaise: a weaker euro.
Defend Europe, if you still dareThe Telegraph

Euro area housing market monitorDanske Bank (pdf)
With regard to housing markets, the euro area looks like independent economies rather than a single market. Germany, France, Spain and Ireland appear to be at each of four distinct phases in a stylised
housing market cycle, namely boom, bubble, bust and trough.

ECB Monetary Policy in the Recession: A New Keynesian (Old Monetarist) CritiqueFED (pdf)
Use of the New Keynesian model to identify shocks points to contractionary monetary policy as the cause of the Great Recession in the Eurozone

The ECB Grows UpProject Syndicate
Barry Eichengreen: The ECB statute was not engraved on stone tablets and handed down on Mount Sinai. It is a man-made charter, and it should be treated – by the German Constitutional Court and others – as a living document that is to be interpreted in light of current events.

Forward guidance and the
Peter Praet: The ECB recently changed its monetary policy communication strategy to include a form of forward guidance. This column, written by ECB Executive Board Member Peter Praet, explains the new thinking and argues that it has contributed to more clarity over the ECB’s assessment of the outlook and its reaction function as well as helping to stabilise money-market conditions and anchor expectations more firmly.

Opening up the ECB will undermine its independenceThe A-list / FT

Monthly Bulletin, August 2013ECB (pdf)

Statistics Pocket Book, August 2013ECB (pdf)

Germany: 2013 Article IV ConsultationIMF
Germany: IMF Executive Board Concludes 2013 Article IV ConsultationIMF

German Stasis: In the Grips of Merkel's 'Lethargocracy'Spiegel
The German economy may be doing well now, but significant challenges lurk in the near future. Chancellor Merkel, though, has succumbed to the torpor of her electorate and has shown no willingness to address badly needed reforms.

Merkel's European Failure: Germany Dozes on a VolcanoSpiegel
Angela Merkel's government is forcing Southern Europe to undertake profound reforms while at the same time denying its own responsibility for the consequences of its crisis policies. Germany is risking a historic failure with its shortsighted wrangling.

Carney and the death of unreasonable expectations – Coppola Comment
Bank of England Should Emulate Fed and Repeat Itself – A Lot – WSJ
BoE Announces 7% Unemployment-Linked "Forward Guidance", Credibility Questioned – ZH
Carney reveals forward guidance for BoE – Danske Bank (pdf)
'The MPC’s Forward Guidance' – Economist’s View
The MPC’s Forward Guidance – mainly macro
Guidance on forward guidance – Free exchange / The Economist
Mixed reaction – Buttonwood / The Economist
Carney should worry about why Britain is different – Reuters
Sterling’s path, now with guidance – alphaville / FT

Europe’s bail-out programmes: What Angela isn’t sayingThe Economist
Europe has already eased debt burdens on bailed-out economies by lowering interest rates on its loans and extending maturities. Greece is getting even more help, receiving for example central-bank profits from buying its bonds. But it is still not enough. That awkward truth, already apparent before the German election, will become manifest after it.

If You Think Europe Is Fine, Look at ItalyView / BB
Simon Johnson: Troubling as Italy’s public finances may be, they are not the main reason to be concerned. There is no magic threshold above which government debt will crush the economy, and countries have grown their way out of even larger debt burdens. The problem is that Italy is growing far too slowly and has been doing so for a long time.

Periphery Business Cycle MonitorDanske Bank (pdf)
The tightening in sovereign spreads in the periphery since end of June is broadly in line with fundamentals.

The race to head the Federal Reserve: Summers v YellenThe Economist

Shrinking US deficit update, and a new debt ceiling projectionalphaville / FT

Why is the U.S.’s 1 percent so much richer than everywhere else?Wonkblog / WP

Here’s what Obama was really saying about the Fed appointmentWonkblog / WP

Achieving China’s Great PromiseiMFdirect
Managed well, these twin adjustments would allow China to prolong its economic miracle in a sustainable way, with a significant positive impact for the rest of the world.

Exclusive: China to let banks sell off loans in prelude to possible bailoutReuters
China is developing a new trading platform to enable banks to sell off loans to a wider range of investors, in a move that could pave the way for a government bailout of lenders or distressed asset sales to private investors.

Austerity with Chinese CharacteristicsForeign Affairs
Why China's Belt-Tightening Has More To Do With Confucius Than Keynes

China’s Worst Nightmare Is Turning JapaneseView / BB

BOJ Beat: Five Takeaways From Kuroda News ConferenceWSJ

Japan Index: A second setback for Abe’s experimentReuters

The Definitive Fund Flows Heatmap: 10 Years Of Capital FlowsZH

Why Stocks Aren’t Expensive, in One ChartWSJ

Monetary policy: An unfinished revolutionThe Economist

What Janet Yellen — And Everyone Else — Got WrongKrugman / NYT

Milton Friedman, UnpersonKrugman / NYT
More On The Disappearance Of Milton FriedmanKrugman / NYT

Conservative economic arguments since the crisis: A reviewNoahpinion

Bringing economics back into fiscal policymakingmainly macro

Is it possible to raise the inflation target?mainly macro

A currency is anything that two people agree is a currencyJohn Kay

Forward guidance - the latest fadTradingFloor
What is the point of forward guidance? The Fed started the trend, even the ECB has abandoned its own 'we never pre-commit' mantra and gone for it, and now the Old Lady hasn't been able to resist the peer group pressure to join the party.

The crackdown on bank misbehavior masks a troubling realityReuters

Raimo Sailas tylyttää hallitusta ylioptimismista HS

Sailas: Suomi tarvitsee oikean hallituksen IS
Valtiovarainministeriön entinen ykkösvirkamies Raimo Sailas roimii hallitusta päättämättömyydestä ja liiallisesta optimismista Kanava-lehden kolumnissaan.

Urpilainen: Taloustilanne niin paha, että rakenneuudistuksia aikaistettava HS

Urpilainen: Uudistukset tulevat kirpaisemaan jokaista TalSa

VATT:n Vartiainen: Suomella on kolme ongelmaa - kaksi omissa käsissä YLE
Kaikissa muissa Pohjoismaissa vientiteollisuus määrää tahdin, sanoo Valtion taloudellisen tutkimuskeskuksen ylijohtaja Juhana Vartiainen.

Elvyttäjien elonkerjuu Elina Lepomäki / US Puheenvuoro

Elvytys- ja uuvutustaisteluaHenri Myllyniemi / US Puheenvuoro

Sammon Stadigh roimii poliitikkoja: Pitää hyväksyä, että Suomi köyhtyyHS
Sampo-konsernin konsernijohtaja Kari Stadigh ei säästele sanojaan moittiessaan poliittisia päätöksentekijöitä. Päättäjät ovat hänen mukaansa pelkureita, jotka eivät uskalla kertoa ihmisille totuutta.

Yrityssaneerauksien määrä kasvoi alkuvuoden aikana 19,4% YoYTilastokeskus

Konkurssien määrä kasvoi alkuvuoden aikana 3,6% YoYTilastokeskus

Kilpailukyky ei parane tulosopimuksillaRisto Pennanen / TalSa
Tulosopimus ei paranna kilpailukykyä, kun valmistetaan vääränlaisia tuotteita.

Suomella velkaa huolestuttavan paljonIL
Asiantuntijat arvioivat Iltalehdelle valtiovarainministeriön tuoreen budjettiehdotuksen sisällön.

Suhdannekäänne parempaan lykkäytyyEK

Suomi jo vaaravyöhykkeellä - ”Hallitusta tarkkaillaan”Uusi Suomi

Suomen taloustilanne on vaarallinenMikael Jungner / US Puheenvuoro

Valtiovarainministeriön budjettiehdotus - verotulot kasvamassa 0,5 miljardiaYLE

Peruspalveluista leikataan 362 miljoonaa euroaVerkkouutiset

Vastikkeellisella sosiaaliturvalla on pitkät perinteetSimo Grönroos / US Puheenvuoro

Suhdanneongelmat vs rakenteelliset ongelmat (Suomen vaihevirhe)Janne Suuronen / US Puheenvuoro

Miten Suomen talous nousee suosta?Hannu Visti

Euroalueen nykyinen rahapolitiikka heikentää uudistusten tehoa ja tekee uudistuksista tarpeettoman vaikeitaTyhmyri

Rakenneuudistus on hyvinvointiyhteiskunnan purkamistaKai Nyman / Piksu


Teollisuustuotanto väheni kesäkuussa 5,7% YoYTilastokeskus

Teollisuuden uudet tilaukset kasvoivat kesäkuussa 2,2% YoYTilastokeskus

Raimo Ilaskivi vaatii hätätilahallitustaIL

Uhkaako velka jo luottoluokitusta? "Suomella on turvatyyny"TalSa
Onko Suomen luottoluokitus vaarassa, jos valtionvelka kasvaa 98 miljardiin budjettiehdotuksen mukaisesti? Ainakaan luottoluokitusyhtiö Moody'sin analyytikon mukaan huolta ei ole. Suomella on nimittäin "turvatyyny", jota ei monelta maalta löydy.

Pääkirjoitus: Parempi myöhään kuin ei milloinkaanPääkirjoitus / IS
Valtiovarainministeri Jutta Urpilainen (sd) ilmoitti tiistaina ministeriönsä sisäisen budjettiriihen yhteydessä haluavansa aikaistaa työllisyyttä ja tuottavuutta sekä työuria pidentäviä rakenneuudistuksia siten, että konkreettiset päätökset uudistuksista tehdään tämän vuoden aikana.

Hallitus taipumassa pakon edessäPääkirjoitus / ESS