tag:blogger.com,1999:blog-8764541874043694159.post9035738666353912299..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Why is global trade so weak? Frances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-8764541874043694159.post-65018634377557391152016-10-19T16:54:18.714+01:002016-10-19T16:54:18.714+01:00Consumption patterns vary quite a lot with age.
...Consumption patterns vary quite a lot with age. <br /><br />In particular, older people spend much less on goods (they already have everything) and much more in services (notably health care, catering). As the entire Europe and large parts of Asia (especially Japan, but also China) are rapidly "greying", a corresponding shift is to be expected.<br /><br />Meanwhile, the younger generations do not find jobs, or poorly paid ones, and see their income squeezed by "fixed costs" such as housing rents, insurance, and health care.<br /><br />Is it a surprise that international trade diminishes as a consequence?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46504776505993377402016-10-12T10:54:50.661+01:002016-10-12T10:54:50.661+01:00Francis are you sure the causation does not run th...Francis are you sure the causation does not run the other way ? Meaning decreasing value of exports from EMs to DMs due to sluggish DM growth but also lower oil prices -i.e. smaller EM trade surpluses - also causes a decrease in EM net foreign investment ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-77821186048222100852016-10-09T12:47:56.671+01:002016-10-09T12:47:56.671+01:00Brick says
A quick browse of the IMF report and i...Brick says<br /><br />A quick browse of the IMF report and its four chapters worries me a little because I see some confirmation bias in the report. The key message seems to be that commodity prices have dented world trade with protectionist trade policies particularly around anti dumping also playing a part. There is a a suggestion that perhaps developing nations should move a little faster in liberalising subsidised industries. <br /><br />There are some interesting bits of information scattered throughout the report that hint at some different policy response options. Take for instance the 15 percent drop in native females in the UK in high skilled jobs since 2000 or the number of highly educated workers in low skilled jobs in the UK reaching above 35 percent compared to much lower levels in other countries. Then look at the nominal unit labour cost annual rate of change for advanced economies and compare it to head line inflation (labour costs are shrinking). I see commodity price indices show a drop since 2005 except for food which is up around 40 percent (If I am reading the chart correctly which is doubtful). Industrial production in advanced economies is pretty much flat since 2010. You can also see banking pulling credit from some emerging economies.<br /><br />So it looks like we are in a race to the bottom for workers rights with significant reductions in skilled job opportunities (We have a world trade organisation but no world workers organisation)(Should trade tariffs be based on workers rights?). Inflation may be very different for the poorest in the economy and head line inflation may be the wrong measure for wage negotiations (Central banks could publish a better inflation rate for this). Government Tax receipts due to shrinking labour costs are con-straining their ability to act. The velocity of money globally is reducing due to a combination of tightening banking rules, poor investment opportunities and the rich or retired trying to protect their asset wealth. At the same time we have people starving, crumbling infrastructure if it even exists. Seems like a good opportunity to print money globally on the back of the SDR (Special Drawing rights) system to combat a global problem. Hopefully Francis will have spotted something I have missed and I look forward to reading about it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-82133385858326705512016-10-07T14:42:21.308+01:002016-10-07T14:42:21.308+01:00And the baby boomers are retiring and spending les...And the baby boomers are retiring and spending less.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-88930928241071432112016-10-05T15:10:51.867+01:002016-10-05T15:10:51.867+01:00Hi Francis!
I thought we had four major cb's ...Hi Francis!<br /><br />I thought we had four major cb's qe'ing government deficits? BoE, BoJ, ECB and the fed?<br /><br />Is not "flat growth" good enough? Chart 1 shows world gdp growth pottering around 2 to 3 percent since 1981. Growth on growth would put an exponential on top of the exponential we already have. I doubt if the planet would be able to sustain that.RPhttps://www.blogger.com/profile/17695303458973909485noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-69386134062455557242016-10-05T14:52:11.580+01:002016-10-05T14:52:11.580+01:00Demetrius,
I am with you 150% on this. And so are...Demetrius,<br /><br />I am with you 150% on this. And so are a lot of my friends.<br /><br />We all have a smart phone, which replaces a whole plethora of devices, telephone, maps, books, encyclopedia, camera, alarm clock, music player, television, compass, barometer, torch.....<br /><br />Scientists are working to increase agri-yields by up to 1,000%. <br /><br />But basically I simply do not want or need all the expensive stuff that loses 80% of its price immediately.<br /><br />I have rediscovered cooking at home.<br /><br />Economists and bankers have simply lost the plot. Somehow they all think that the new round pegs of human economic behaviour should fit into their old square peg models of the last fifty years.<br /><br />The hammers they are using are causing a lot of pain.RPhttps://www.blogger.com/profile/17695303458973909485noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-86277734768636848022016-10-05T14:32:39.006+01:002016-10-05T14:32:39.006+01:00Inflation is the bankers' tactic to confiscate...Inflation is the bankers' tactic to confiscate wealth.<br /><br />And I have yet to see a single coherent analysis of why reaching 2% inflation will fix any issue whatsoever. It would only allow the central bankers to sit back, pat themselves on the back and say "job done".<br /><br />The "debt dynamic", or how to keep the banks solvent, requires not only a 2% inflation, but also wage increases considerably above that level. This is hardly going to happen.<br /><br />Carnie, it now seems, has been brought in to sink the gbp down to parity with the usd. This is a tried and tested third world tactic to boost exports and encourage inward investment. Unfortunately the uk has not much left in the way of stuff that the world wants to buy, and productivity gains in selling each other overpriced housing do not bring in forex to pay for the imports.<br /><br />And what happens if the uk managed to ramp up inflation to say 10% with corresponding wage increases? As it is unlikely that this "British wealth increase" will be accepted by the rest of the world, it will be reflected in the exchange rate until noodle soup sellers in Asia can afford to take a holiday and wonder how the mighty uk became relegated to a "developing nation".RPhttps://www.blogger.com/profile/17695303458973909485noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26773803635381373482016-10-05T13:09:40.740+01:002016-10-05T13:09:40.740+01:00I am not spending as much, as is the case with man...I am not spending as much, as is the case with many like me. Moreover, I will not in the future be spending anything like the amounts in the past.Demetriushttps://www.blogger.com/profile/17198549581667363991noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-12876432302063990302016-10-05T12:21:58.038+01:002016-10-05T12:21:58.038+01:00“The developed world is struggling to get inflatio...“The developed world is struggling to get inflation off the floor…”. I’d have phrased that a bit differently. Something like:<br /><br />“The average ten year old knows how to get inflation off the floor. Robert Mugabe knows how to boost inflation. But the West’s leading economists are struggling with the “problem”. All of which proves that most professional economists are prats.”<br /><br />But doubtless readers of this blog already know that.<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-72366855072704529842016-10-05T09:52:24.987+01:002016-10-05T09:52:24.987+01:00Was about to answer something in a similar vein. W...Was about to answer something in a similar vein. Will add that the qualification of "sluggish" seems tied to a mean reversion of the immense Chinese investment flow of the 2000-2009 era. The paper by the ECB is actually pretty interesting in this regard (http://www.ecb.europa.eu/pub/pdf/scpops/ecbop178.en.pdf?ada8c9e466ff8893f3cc7526d225918a). <br />Following all this, I wonder to what extent the accumulated external financing by exporters along with the slowing of export growth (and thus the smaller resources to sustain this financing) will feed on itself. Working through the numbers now.Boris Serge Apollinairehttps://www.blogger.com/profile/02874775745815815528noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-21107014911167330612016-10-04T22:23:38.801+01:002016-10-04T22:23:38.801+01:00Correlation is not causation, as you say. At the r...Correlation is not causation, as you say. At the risk of pre-empting your next post, is it not likely that the fall in cross-border lending and weakness in global trade are both symptoms of the bigger underlying problem, i.e. sluggish growth in consumption and investment as economies everywhere (DM and EM) struggle with excessive debt burdens, both private and public? This would also explain the apparent contraction in Eurodollar money supply as the global banking system deleverages. The fall in cross-border lending would be entirely consistent with that phenomenon.Fyodorhttp://alizaybak.netnoreply@blogger.com