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Sunday, February 8

8th Feb - W/E: Linkfest

Previously on MoreLiver’s:

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Syriza and the French indemnity of 1871-73Michael Pettis
Michael Pettis explains the euro crisis (and a lot of other things, too)FT
Pettis On European Policymakers' "Terrifyingly Low Level Of Sophistication"ZH

Greece: Greenspan predicts exit from euro inevitableBBC
"The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated - actually even just fiscally integrated won't do it." [audio]

Even sorting out Greece’s debts may not be enough to repair the euroThe Economist
There is little reason to think that exhortations for more understanding now have more chance of succeeding than in the past. Europe will find a way to muddle through, and the fissures will grow mossy again. Until the next earthquake.

Spain and Podemos: Can they?The Economist
The Spanish answer to Syriza shows its strength ahead of November’s election

Welcome to Europe, where the bond market is upside downQuarz

On the Size of the Government Spending Multiplier in the Euro AreaBank of France

Bank of Italy Boosts GDP Growth Estimates on ECB MeasuresBB

Shifts in euro area Beveridge curves and their determinants Suomen Pankki

Strategy Sweden: Riksbank call a risky business – Nordea
Riksbank: Monetary policy for yesterday's problems – Nordea
Danish central bank fiercely defends currency peg – FT
Denmark Pledges More to Come If Speculators Still Doubt Peg – BB

Battle for Ukraine: How the west lost PutinFT
The first of two articles examines how the west misread the Russian leader’s determination

Battle for Ukraine: How a diplomatic success unravelledFT
Second part of the series looks at the fate of the Minsk accord

Ukraine Summit Is Unsuccessful; U.S. Contemplates Next Steps – BB
Europe and U.S. clash over how to confront Putin on Ukraine – Reuters
Merkel-Hollande mission ends with promise of more talks – FT
Merkel warns Ukraine peace plan may fail, but worth the effort – FT
Nato discusses arming UkraineFT

SNB's Jordan says will be active in FX market if needed – Reuters
SNB’s Jordan: economy could contract from cap decision – WSJ
Swiss National Bank Hints At Capital Controls – ZH

Can Greece Make a Deal with Europe?
Part 1: Why and When a Deal Must Be Struck – PIIE
Part 2: What Kind of Deal Can Greece Hope For? – PIIE

Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit – ZH
Can Greece Make a Deal with Europe? Part 1: Why and When a Deal Must Be Struck – PIIE
Greece's Caa1 government bond rating on review for downgrade – Moody’s
S&P Downgrades Greece, Suggests Worst Case: Bank Runs And Capital Controls – ZH
Different delivery, one message to Greece's new leaders – Reuters
Greece Gambles On Armageddon, Warns It "Only Has Weeks Of Cash Left" – ZH
Yanis Varoufakis, Greek finance minister – FT
Defiance and Charm: A Measured First Week for New Greek Leader – Spiegel
The enforcer: How the ECB can dictate terms to the Greek government – The Economist
Rare growth-linked debt could work for GreeceReuters

The ECB’s early adopter problemFT
Money injections have (at least) temporary distributive effects: they increase inequality if a richer group gets the money first, and decrease it, if the newly created money goes to a group that was relatively poorer.

Should the ECB Helicopter Adjust Its Dropping Zone?CEP
It may make sense for Draghi’s helicopter to review its dropping zone. Or, at least, the pilots should explain to us why they are targeting the top of the pyramid rather than its bottom. - See more at:

Cross-border lending on the mend in the euro zoneReuters

U.S. Employment Situation – January 2015Global Macromonitor

The Macroeconomic Effects of the FED’s Unconventional Monetary PoliciesFED
Did the Fed’s QE actually do anything for the real economy?FT

February Macro Update: A Trend of Consistently Better Growth Fat Pitch

Technology and Finance: Drivers of a Profit Margin ExplosionPhilosophical Economics
The profit margin expansion seen in the U.S. corporate sector over the last two decades has been driven largely by gains in the financial and technology sectors. I examine arguments for and against the sustainability of this shift.

Not kicking the habit: The world is still addicted to debtThe Economist

What Central Bank Defeat Would Look Like, In ChartsZH

Why the future's bright for passive investingTradingFloor
Peter Garnry: Passive investing may make up over 30% of the market * Tackling the active vs. passive debate * Ray Dalio's 'all-weather approach' works

Government spending multipliers: Evidence from US historical datavoxeu
There is no consensus among economists about the size of the multiplier of government purchases. It is not clear either how multipliers vary with the state of the economy. This column presents new evidence on this issue using large historical data set from the US. The findings suggest that there is no evidence that fiscal multipliers differ by the amount of unemployment or the degree of monetary accommodation.

Explaining the Boom-Bust Cycle in the U.S. Housing MarketFED
Shifting lending standards (as measured by a loan-to-equity limit) were an important driver of the episode while movements in the mortgage interest rate were not…the U.S. housing boom was a classic credit-fueled bubble involving over-optimistic projections about future housing values, relaxed lending standards, and ineffective mortgage regulation.

Debt and fiscal adjustment: Historical evidencevoxeu
Fiscal consolidation is back at the top of the policy agenda. This column provides historical context by examining 91 episodes of fiscal consolidation in advanced and developing economies between 1945 and 2012. By focusing on cases in which the adjustment was necessary and desired in order to stabilise the debt-to-GDP ratio, the authors find larger average fiscal adjustments than previous studies. Most consolidation episodes resulted in stabilisation of the debt-to-GDP ratio, but at a new, higher level.

The illusion of monetary policy independence under flexible exchange ratesvoxeu
The conventional ‘trilemma’ view is that countries that allow free capital flows can still pursue independent monetary policies as long as they allow flexible exchange rates. This column examines the pass-through of Federal Reserve interest rates to policy rates in Chile, Colombia, and Mexico. The author concludes that, to the extent that central banks take into account other central banks’ policies, there will be ‘policy contagion’ and that, even under flexible rates, monetary policy will not be fully independent.

Globalisation everywhere but in the growth numbersvoxeu
Understating the relationship between trade and growth is still at the core of the economics profession. This column seeks to identify the pathways by which globalisation affects economic growth looking at the case of Belgium in the decades preceding the First World War. It argues that the collapse in fixed export costs promoted the entry of uncompetitive firms into export markets and as the trade component of GDP rose, the share of high performing firms contracted, slowing growth.

Persistent Overoptimism about Economic GrowthFED
Possible explanations for this pattern include missed warning signals about the buildup of imbalances before the crisis, overestimation of the efficacy of monetary policy following a balance-sheet recession, and the natural tendency of forecasters to extrapolate from recent data.

How to choose a ”good” monetary regimeLars Christenssen

When central bank losses matterSimon Wren-Lewis
This is a post about why the taboo against helicopter money or money financed fiscal stimulus is irrational once we have Quantitative Easing, but might nevertheless be in the interest of some groups.

Box: Oil and debt (February 2015) – BIS
BIS says financial flows partly to blame for oil collapse – FT
Unravelling the petrodollar liquidity enigma – FT
About that $9 trillion global non-bank credit exposure… - FT
Busting currency pegs, Saudi Arabia edition – FT
BIS: There’s an the oil-debt-dealer nexus – FT

Negative Yields Send a Gloomy MessageWSJ
The message being sent by Europe’s long-dated negative yields is that deflation and low growth are embedded economic prospects.

The Treasury Market's Legendary Liquidity Has Been Drying UpBB
A year ago, you could trade about $280 million of Treasuries without causing prices to move, according to JPMorgan Chase & Co. Now, it’s $80 million.

Gavyn Davies: How negative can interest rates go?FT
Early indications suggest that the effective lower bound on rates, at least for short periods, may be lower than economists have previously supposed.

Scarcity of Safe Assets, Inflation, and the Policy TrapFED
We construct a model in which all consolidated government debt is used in transactions, with money being more widely acceptable. When asset market constraints bind, the model can deliver low real interest rates and positive rates of inflation at the zero lower bound. Optimal monetary policy in the face of a financial crisis shock implies a positive nominal interest rate. The model reveals some novel perils of Taylor rules.

Something economists thought was impossible is happening in EuropeVOX

Negative Interest Rates: Capital's Reproduction ProblemMarc to Market

The Fed's Stunning Primer For Life In A Negative Interest Rate WorldZH

Battle of the Economics Bloggers – View / BB
Noah Smith gets market monetarism wrong – Scott Sumner

Saying the obvious – Simon Wren-Lewis
Is democratic Keynesianism possible? – Chris Dillow
'Is Democratic Keynesianism Possible?' – Mark Thoma

The Billionaires at Burning ManBB
Move over, Google Bus. There's a new symbolic fight over tech money, class, and privilege

Where Is Germany's Gold?BB
Almost half of Germany’s gold is stored in vaults under the streets of Manhattan. Or is it?

Jan Hurri: Näin Suomen Pankin tuki karkaa ulkomaille TalSa
Euroalueen keskuspankin vasta päättämissä valtionlainaostoissa on outo pohjoinen ulottuvuus. Elvytykseen tarkoitettu raha valuu eri euromaihin vaihtelevalla teholla. Viro jää miltei ilman, ja Suomenkin osuudesta suurin osa karkaa ulkomaille. Esimerkiksi Venäjälle.

Pieni piiri päättää ylimmän  johdon palkkioista HS
HS selvitti, ketkä päättävät toimitusjohtajien ja hallitusten jäsenten palkkioista. Esiin nousivat työeläkeyhtiöt, yritysjohtajat ja suuromistajat.

"Venäjän rahat riittävät vain vuoden tai kaksi" – TE

Lyhennysvapaa: Ei mörkö eikä pelastus – Roger Wessman
Roger Wessman: kannattaako pitää lyhennysvapaata? – MarketNoze

Kreikan tie ulos eurosta: "Jos EKP ei anna jatkaa ELA-ohjelmaa..." – TE
Korsikalainen äänestys – Henri Myllyniemi / US
Pureeko kreikkalaisten teatteri saksalaisiin? – TalSa
Varman Murto: "Kreikan poistuminen eurosta on vaihtoehto C" – TE
Nordea: Suomen Kreikka-lainat lähes arvottomia – tappiot jopa 2,5 miljardia euroa – IS

  1992 ”Toiminta valtion kassakriisissä”-raportti
Tässä ovat Koiviston tilaaman salaisen raportin tylyt esitykset – TalSa
Suomelta loppuivat rahat täysin yllättäen 1992 – Koivisto hermostui – IS
Raimo Sailaksen kauhea syksy – TalSa
IS: Suomessa valmisteltiin kassakriisissä poikkeustoimia 1992 – Verkkouutiset
Rajun raportin kirjoittaja vahtii valtion rahoja – TalSa

Turvattomat ajat suosivat vallassa olevia, mutta Sipilä on jo tavoittamattomissa – IL
Miksi joku saa vaaleissa valtavasti ääniä ja joku toinen taas ei ollenkaan? – HS
Keskustan nousu ja kokoomuksen alamäki pysähtyivät – IL
SS: Kyselyn mukaan kansa säästäisi maahanmuutosta – Verkkouutiset

Professori Virén: Lopettakaa hölynpöly elvytyksestä, se on moraalitontaVerkkouutiset
Taloustieteen professorin mukaan elvytys nykytilanteessa ei ole vain väärää politiikkaa vaan myös moraalinen ongelma.

Keskusta ei halua veronkorotuksia – menoleikkauksia kahdella miljardillaYLE
Keskustan puheenjohtajan Juha Sipilän mukaan keskustan veromallissa on sekä veronkevennyksiä että veronkiristyksiä, mutta kokonaisveroaste ei saa nousta.

Sipilä kokoomuksen kosiskelusta: Erojakin onYLE
Keskustan Juha Sipilä kehuu kokoomuksen ulostuloa hallitustavoitteidensa kanssa, mutta toppuuttelee puolueiden samankaltaisuuksia. Demarit ja perussuomalaiset moittivat kokoomuksen piilottelevan, kenen taskulle se vaalien jälkeen käy.

Alexander Stubb: Näpertely ei riitäVerkkouutiset
Kokoomusjohtaja tulkitsee Evan selvityksen perusteella, että suomalaiset haluavat järjestää hyvinvointivaltion uudelleen.

Sipilä: Natosta ei kirjausta hallitusohjelmaanYLE
Sipilä kannattaa kuitenkin Nato-selvityksen teettämistä, mitä pääministeri Alexander Stubb myös on ehdottanut.