Category Archive: 8) Economics

The ECB interventions in the year 2000



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Ricardo’s Comparative Cost Theory, Heckscher-Ohlin Model and the Product Lifecycle Theory



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History of Wrong Forecasts by Swiss and Fed Economists: Update September 2013

Or how to talk down and how to talk up an economy with wrong forecasts   American and Swiss mentalities are very different, the Americans have the tendency not to care about the future a lot, the Swiss, however, do things only after careful consideration of potential risks. This tendency can be proven economically with … Continue reading...

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Quantitative Easing, its Indicators and the Swiss Franc, Update FOMC September 2013

The main drivers of demand for Swiss francs are the euro crisis, but even more, the behavior of American investors, who go out of the dollar in the fear of further bad US economic data and of Quantitative Easing. This will push down the dollar, and both safe-havens like the CHF, gold or the Japanese …

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Overlending and Global Imbalances in Current Accounts

Some extracts from BIS Working Papers No 419 Caveat creditor: The Bank for International Settlement stresses the importance of getting "overlending" under control.

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History of the Net External Position of Banks



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ECB’s Monetary Transmission



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Bank of Japan Balance Sheet



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Explaining Richard Koo to Paul Krugman, to Austrian Economists and the SNB



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Why negative interest rates are contractionary, the base money confusion

From FT Alphaville: Excess reserves do not mean banks are not lending, and enforcing negative rates may do more harm than good because it is ultimately contractionary rather than expansionary.

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How to Spot and Avoid an Investment Bubble

Investment "bubbles" have been inflating and bursting for hundreds of years.

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Balance of Payments Crisis: Did the Fed Cause the Euro Crisis with Excessive Monetary Easing?

The Fed's excessive monetary easing QE2 caused an inflationary period, that created a balance of payments crisis during which the Eurozone members were obliged to introduce excessive austerity measures.

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The Inflation Lie? Why and When Inflation Will Come Back

The so-called "inflation lie" : money printing does not create inflation. The cyclical slowing in emerging markets shows that it actually did cause inflation, just not in developed economies yet.

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Richard Koo’s newest paper: About the Ineffectiveness of Monetary Expansion



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Are Asset Price Bubbles Needed to Make the US Economy Recover?

About the trade-off between economic recovery and financial stability In the recent post on gold prices, we maintained that the Fed will raise interest rates far later than most FOMC members admit. This would imply that the years of financial repression will continue and investors will push up asset prices, incl. gold, instead. Many libertarians …

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