European Economic Issues

Fresh Approaches to Boosting GDP

An interesting piece in the NYTIMES notes:

“As of September, all European Union countries will be required to take fuller accounting of trade in sex, drugs and other underground businesses as part of an overhaul of economic measurements by Eurostat, the European statistics agency. The point of counting everything, including the wages of sin, is to get a more accurate reading of each country’s gross domestic product. Because G.D.P. is such an important number — one that can sway national policies and make or break politicians — the European Union wants numbers “better reflecting the economic environment,” Vincent Bourgeais, a Eurostat spokesman, said. With European Union governments obliged to reduce debt as a percentage of their economies, the changes are also expected to make growth rates from Spain to Sweden look better, possibly also making debt ratios seem rosier.”

France Fixes Book Prices

Apparently, a long standing French law limits book discounts:

 “Its 1981 “Lang law,” named after former Culture Minister Jack Lang, says that no seller can offer more than 5 percent off the cover price of new books. That means a book costs more or less the same wherever you buy it in France, even online.”

EU versus Silicon Valley

http://www.theguardian.com/technology/2014/jul/06/google-amazon-europe-goes-to-war-power-digital-giants

UPDATE: International Affairs - A Complex Triangle

Germany-Russia-US

http://www.spiegel.de/international/germany/as-us-scandals-grow-germans-seek-greater-political-independence-a-979695.html

Asset Prices - Booms vs. Bubbles

An interesting piece by Neil Irwin considers the global rise in asset prices:
http://www.nytimes.com/2014/07/08/upshot/welcome-to-the-everything-boom-or-maybe-the-everything-bubble.html

Silicon Valley and Innovation

An excellent WSJ article asks: Is Silicon Valley Funding the Wrong Stuff?

The article highlights the less than impressive nature of recent innovations coming out of Silicon Valley:

 “And you don't have to be a venture capitalist to question whether, from the perspective of net social benefits, or even just long-term return on capital, the problem of replacing instant messaging is a better investment than countless other potential businesses in the $16 trillion real economy.”

This goes to the crux of the Robert Gordon thesis on slowing technological progress.  See earlier post –

http://vivekjayakumar.blogspot.com/2014/06/tech-progress-and-long-term-economic.html

GDP - A Flawed Yet Important Economic Measure

David Pilling examines the modern obsession with GDP measurement:
http://www.ft.com/cms/s/2/dd2ec158-023d-11e4-ab5b-00144feab7de.html#axzz36bm7E6dr

UPDATE: Government Role and GDP Measurement

http://www.nytimes.com/2014/07/07/opinion/our-mismeasured-economy.html

Developments in International Finance

Global Monetary Order – In Need of Direction

http://www.economist.com/news/finance-and-economics/21606322-after-150-years-monetary-experimentation-world-remains-unsure-how

Overreaching Tax Laws

http://www.economist.com/news/finance-and-economics/21605911-americas-fierce-campaign-against-tax-cheats-doing-more-harm-good-dropping

RBI to Try Gold Swaps

http://in.reuters.com/article/2014/07/03/india-rbi-gold-swap-idINKBN0F81NC20140703

A Fundamental Debate in Macroeconomics

University of Chicago economist John Cochrane has an interesting op-ed in today’s WSJ – “The Failure of Macroeconomics”. He posits the following key question in his piece:

“Where macroeconomists differ, sharply, is on the causes of the post-recession slump and which policies might cure it. Broadly speaking, is the slump a lack of "demand," which monetary or fiscal stimulus can address, or one of structural sand-in-the gears that stimulus won't fix?”

US Labor Market Conditions

Neat Graphic from WP:
http://www.washingtonpost.com/wp-srv/special/business/jobs-report/

Analysis of June BLS Report:

http://www.bloombergview.com/articles/2014-07-03/reading-the-jobs-report-s-tea-leaves