Wednesday, 3 September 2014

Draghi's Jackson Hole speech has been misunderstood.






















At Pieria, I dissect what Draghi actually said at Jackson Hole on 22nd August, and conclude that he has not called for short-term monetary and fiscal stimulus to kickstart growth, as some have argued:
"Some analysts have claimed that this speech was Draghi's “Abenomics” moment. Nouriel Roubini argues that Draghi has outlined a similar “three arrows” approach:
  • structural reforms in periphery countries
  • fiscal easing focused on investment and on demand stimulus in the core
  • quantitative and credit easing
But Roubini, like others, ignores the context of this speech. It is not fundamentally about restoring growth in the short term. Nor is it about the balance of monetary and fiscal policy, or about the responsibilities of core versus periphery. In fact it is not about short-run economic policy at all. It is about unemployment."
Specifically, it's about cyclical unemployment becoming structural, and the prospect of permanently elevated unemployment, a lower participation rate and lower trend growth. A whole generation thrown on the scrap heap.....

Draghi's proposals for addressing this are radical. Read more here.

1 comment:

  1. No point in training young people to do pointless jobs in financial capitals and their wider corporate operations on some bleak Canadian plain.
    Give them a free gift of a diploma in something or other - A licence to waste time.
    Ireland has seen a third decline ~ in its female population of age 20 to 24 since 2009
    Y2009 : 354.4 Thousand
    Y2014 : 244.3
    Like most females they are programmed to follow the money which has been artifically concentrated as a result of extreme usury practices in the eurozone.
    We can clearly see the function of jobs is not to create wealth and never has under capitalism , its a secondary function of capitalism / bank scarcity operations.
    These consumer soldiers are again fighting the good fight for capitalism.
    Their life force will be extracted in their quest to follow the (scarce) token system.

    http://www.cso.ie/en/releasesandpublications/er/pme/populationandmigrationestimatesapril2014/

    Only near death will they come to realize their quest was worse then pointless.
    Draghi is doing his job with the utmost perfection..
    His job is to extract time units from us proles.
    Providing "jobs" is one such mechanism.

    ReplyDelete