Coppola Comment

Lots of people have been celebrating the Spanish recovery. "From boom to bust to export-led recovery", crowed one Twitter commentator. This is the reality: Well, real GDP growth is now positive. I suppose that is a recovery, sort of. Though 0.5% growth is not exactly robust. In the UK we call 0.5% growth "stagnation", not recovery.* But look at this: Note the red at the far right. That is deflation. Consumer prices in Spain are falling by about 0.5%, according to the latest figures. To be sure, this is an annual chart: using annual GDP figures, NGDP is about 1%. I don't call that much of a recovery. And I doubt if the Spanish see it as recovery, either. This is GDP per capita: Yes, the Spanish are worse off now than they were in 2003. Ouch. So if the "recovery" is largely due to falling consumer prices flattering real GDP, what about those exports? Here's the Spanish current account: This looks like something of a success...

Researchers at the Federal Reserve recently produced a fascinating article in which they argued that severe recessions such as that in 2008-9 leave permanent economic scars.This set of charts shows the effect of the 2008-9 recession on real GDP trend growth for four economic areas - the US, the UK, the Euro area and Canada: This reminds me of the four-image game on the UK's satirical current affairs show " Have I Got News For You ". Spot the odd one out, and explain why.....and no, it isn't the one you think it is. Actually each chart has a claim to be the odd one out, which just goes to show how the economic effects of the financial crisis varied by country. Or perhaps more accurately, how the response to the crisis by monetary and fiscal authorities varied. These charts show a significant drop in trend RGDP for all four economic areas: Canada, which had neither a property market crash nor a banking crisis, shows the smallest fall. Interestingly - and c...

In the post this morning: three communications from UKIP, two from the Conservatives, one from Labour. This is a pretty typical day. Every day brings more confetti through the letterbox, most of it from UKIP and the Conservatives. All of it goes straight in the bin. I also get emails from the Conservatives, phone calls from the Conservatives, visits from the Conservatives.....I told an opinion pollster who rang recently (yes, I get lots of those too) that the Conservatives look desperate to me. I'm utterly sick of their flood tactics.  But now UKIP have adopted the same tactics. Spam, spam, spam. They are nearly as bad as the PPI leeches. Spamming my letterbox, mailbox and voicemail merely annoys me. I don't need more information. I know what all of the main candidates are offering. Heaven knows, they've told me enough times. I've read Kelly Tolhurst's six-point plan, headed up by the biggest non-issue of this by-election - immigration. I've read Mark...

"So tief im Abendrot, wie sind wir wandermüde.....is das etwa der Tod?" - R. Strauss, Four Last Songs, no. 4 " Im Abendrot " Japan  is in recession. Will it ever escape from its deflationary trap? Indeed, should it even try to? Or would it be better for it simply to accept that its future is gentle decline into a comfortable (and highly automated) old age? Is it becoming the land of the setting sun? My thoughts on this are at Pieria .

At Forbes, more on Russia's currency problems: After the Central Bank of Russia (CBR) established free float with the condition that it would intervene to protect domestic financial stability, the ruble immediately rallied , but then fell again. Many people forecast dire consequences . I admit I was a little worried, but I thought the ruble would stabilize once markets became used to the lack of routine intervention from the CBR. After all, the whole point of allowing a free float is to enable the currency to find its own level – and more importantly, restore control of monetary policy to the central bank. When a country operates a fixed exchange rate system, it de facto adopts the monetary policy of whichever country issues the currency to which it pegs its own currency. In the case of the ruble, that is the United States. And as I have noted before , because China has large US$ reserves and a currency peg to the US$, the Fed’s policy is to a degree determi...

  Older people tend to want their pensions and benefits protected and the burden of cuts to be borne by the young. Of course, this is only natural: Most people want government to spend more money on them than on anyone else. This applies regardless of their tax contributions (those who don’t pay tax often demand more than those who do). And it is completely understandable. After all, charity begins (and when times are hard, ends) at home. But it is also foolish. In my latest post at Pieria , I explain why older people should be demanding that governments invest in the young. 

Poppies, at the Tower of London, turning the moat blood-red. A wonderful memorial to the British and Commonwealth servicemen who died in the First World War.  One of them was my great-uncle, Henry Dodson Noon. We've always referred to him as "Uncle Dodson", so Dodson is the name I shall use in this post. Dodson was born in 1894 in Eastwood, Nottinghamshire, the son of George Henry Noon and his wife Mary Catherine Noon, my great-grandparents, who were farmers. In 1911, at the age of 17, he emigrated to Australia. My mother always said it was "because there was no money in farming in Britain". Indeed, farming was at that time in long-term decline: Dodson was not the only farmer's son to emigrate. Nonetheless, he doesn't seem to have become a farmer in Australia either. His Australian Army papers show his occupation as "butcher". In 1914 he joined the 16th Battalion AIF . After training near Perth and Melbourne, he embarked with t...