Some longer background articles that I've come across in the past week.
Previously on MoreLiver’s:
2-Nov Weekender: Weekly Support (updated)
2-Nov Special: Payrolls (updated)
EUROPE
Europe's Unfinished Currency: the political economics
of the Euro – LSE
Dr Thomas Mayer is Senior Fellow at the Center of Financial
Studies at Goethe University Frankfurt and Senior
Advisor to Deutsche Bank’s management and key clients. From 2010 to 2012 he was
Chief Economist of Deutsche Bank Group and Head of Deutsche Bank Research. He
has previously held positions at Goldman Sachs and the International Monetary
Fund. (audio
mp3, presentation
pdf
Weekly Brussels blog roundup: defeat for UK government over EU budget, populism vs.
technocracy, and would independence help or hurt Catalonia’s economy? – europp
/ LSE
Self-defeating austerity? – voxeu.org
EU
governments have individually embraced severe austerity programmes in an effort
to avoid becoming the next Portugal. This column presents results from
the National Institute Global Econometric Model suggesting that the
individually rationale polices are leading to collective folly. Keynes’
'paradox of thrift' is in full swing since EU nations continue to act like
small open economies while in fact they are a large closed economy.
…this pain
is not in any way inevitable. It comes because austerity is being undertaken
when monetary policy can do very little to counteract these effects. In more
normal times, which means once the recovery is sufficiently underway such that
interest rates begin to rise again, this scale of austerity will have a much
smaller impact on GDP. In principle, its impact could be completely offset by monetary
policy.
TARGET2 as a
scapegoat for German errors – voxeu.org
A systemic Eurozone breakup would be the mother of all
financial crises. This column – a rejoinder to Hans-Werner Sinn’s recent column
– agrees that Germany would
lose massively from a breakup, but argues that the ultimate source is the €600
billion current account surpluses it ran with other EZ nations during the good
years, not the TARGET2 system. German banks lent vast amounts to peripheral
countries without doing a proper credit analysis. No-one other than Germany itself is
responsible for taking on these risks.
Since the fall of the Soviet
Union, Russia has
become increasingly addicted to oil, which has underwritten bad policies and
allowed Putin to buy off key constituencies and the masses. But petroleum could
also hold the key to Russia’s salvation.
The supply of cheap oil is running out, and Russia’s best
hope of responding to the coming crunch is making the sort of changes liberal
reformers have been pushing for years.
Charlemagne: Bribesville II – The
Economist
Silvio
Berlusconi is taking revenge cursing everyone around him
‘Why should Germans support poorer Spanish
regions if Catalans object?’ – alphaville
/ FT
Any
assessment of European economic governance must acknowledge the slow,
contradictory nature of intergovernmental decision-making, in which national
assertion, fueled by upsurges in popular anti-EU sentiment, has led to a
stop-and-go process. Viewed in these terms, Europe's political class has failed to lead.
Silvio Berlusconi, Italy’s
three-time prime minister and the country’s dominant politician for two
decades, has now been convicted and sentenced to prison. But few people in Italy – or in Europe – believe
that Berlusconi will fade from Italian, and European, politics anytime soon.
Although there is little truth behind the
‘Godfather’ stereotype, mafia infiltration remains a serious problem in Italian
politics – europp
/ LSE
Slight upward revision to Euro-area PMIs – Nordea
America could do better than Barack Obama;
sadly, Mitt Romney does not fit the bill
Many of the
charges most frequently leveled against the economic policymaking record of
Barack Obama are overstated.
US Presidential
Election: How will financial assets react to the outcome? – Danske
Bank (pdf)
ASIA
AUSTRALIA
Typically
when reserves increase, it is due to action by the central bank. However, as
the Wall Street Journal points out, this is not the case in Australia.
Its reserves rose due to the inaction of the RBA.
It simply did not convert the foreign currency inflows as it typically
does.
Prime
Minister Julia Gillard's government has developed a bold plan for embracing the
"Asian Century." Can words be turned into deeds?
Address by
Mr Philip Lowe, Deputy Governor of the Reserve Bank of Australia, at the
Commonwealth Bank Australasian Fixed Income Conference Dinner, Sydney, 30-Oct 2012
.
INDIA
Kenneth
Rogoff: Just a couple of years ago, India was developing a reputation as an
attractive investment location, with heads of state virtually tripping over one
another to meet business leaders in Mumbai and pave the way for further trade
and investment. Now their interest has faded, along with India's macroeconomic numbers.
JAPAN
Today we
look at the future of Japan. The bad news suggests some tough
times ahead, but their unique strengths (some wrongly considered weaknesses)
suggests the 21st century might become a century of the rising sun over Japan.
Charts from Deutsche Bank
CHINA
Communist
Party leaders struggle to manage a tense transition
Chinese mafia’s
“state within a state” – El
País / presseurop
The arrest of the “godfather” of the Chinese mafia in Spain in
mid-October has lifted the veil on crime within the community and reflects the
power, complexity and international cohesion of these criminal groups.
Double Paradox: Rapid
Growth and Rising Corruption in China; Capitalism From Below: Markets and
Institutional Change in China – Foreign
Affairs
The politicization of prosecutions for corruption in China makes
official data untrustworthy, but Wedeman has still found plausible ways to
assess different types of corruption and their frequency. Nee and Opper come at
the question of business-government relations in China from a
different angle, but their findings converge with Wedeman’s. Their main point
is that the Chinese market economy was created not from above, by the state,
but from below, by entrepreneurs.
Arne Westad argues that China’s role in
international affairs over the past 250 years has been determined by the
country’s restless irresolution and its immense capacity for change. In this
lecture he will discuss the significance of China’s past
for its behaviour in international affairs today.
(audio) World Weekly with Gideon Rachman – The
World / FT
China’s new leadership faces many
challenges