> Links. Secular stagnation is not a supply side phenomenon.
Links. Secular stagnation is not a supply side phenomenon.
- More and more economists are writing about ‘secular stagnation’: a ‘lack of demand’ induced situation of lacklustre growth. think of high private debts, high inequality, high unemployment and an overgrown financial sector and a house price bust.
- In the meanwhile, a hospital in Rotterdam introduces a robot-bed-washer. And surgeons are experimenting with using 3-D printing during in-womb surgery on unborn children. Which is good: when robots wash bed, nurses have more time to wash patients (unless we embrace neoliberal ideology and only look at caring for people from a cost perspective).
- Despite such technological progress, economic growth in the Eurozone is, despite low interest rates, low oil prices and an increase in total wages, measly.
- The interesting Eurozone countries are, when it comes to the latest data on economic growth, Spain (robust growth), Greece (-1,8% decrease of nominal GDP – which is much better than expected) and Ireland (data on job growth and economic growth do not seem to match). And Germany, which still increasingly relies on foreign demand, Which is dangerous, as the growth impetus of the increase of foreign demand (measured as an increase in net exports not caused by declining imports) will eventually come to a halt – which however won’t stop the growing imbalances caused by an extreme surplus on the current account. Growth of total nominal wages in Germany must be close t 4% which, once upon a time, will lead to an expenditure boom. I will return to Ireland, but the Irish data are quite puzzling: no credit growth (to the contrary) – but a 100% increase of investment in some sectors (Q2). It seems as if some large companies are transferring intellectual ownership to Ireland.
- I was clearly wrong about Greece. Closing the banks did not tank the economy: money kept flowing. However, at this moment renewed austerity (higher VAT rates, lower pensions and the like) is starting to bite. And this is tanking the economy: net number of jobs in october -56.000. Which is extreme. I should have known about these banks, by the way, as there was no outright money destruction and bail in of depositors.