04-24-2017, 11:17 PM
Ultimately, it was hoped, abandoning the peseta/lira/etc for the euro would promote integration with the wealthy northern core and convergence to higher living standards. (As it turns out, convergence was much more successful among the central and eastern European countries that didn’t join the euro.) The risk of the strategy was that Spain/Italy/etc, by losing monetary sovereignty, would be vulnerable to the kinds of crises that had afflicted many poorer countries in the 1980s and 1990s. Euro area countries that grew accustomed to net inflows of capital would have to rely on debt restructuring and wage cuts if the financial account ever reversed.
If you like the euro, why not just call for a global gold standard? | FT Alphaville
Exchange rates affect the economy through a financial channel, as well as the trade channel. The financial channel works in the opposite direction to the trade channel. In emerging market economies especially, a weakening of the domestic currency against the dollar saps both cross-border bank lending and investment. Such effects flow through the dense interconnections of dollar lending in the global financial system. In devising policy for financial stability, a tight focus on underlying causes (excess leverage and funding risk) rather than on the symptoms (capital flows) stands a better chance of being more effective in addressing the vulnerabilities as they emerge.
Accounting for global liquidity: reloading the matrix
Scott Galloway is a marketing professor at the NYU Stern School of Business and the founder of business intelligence firm L2. Galloway appears on this week's episode of The Bottom Line with Henry Blodget and explains how Amazon could eliminate the existence of brands with voice technology. The following is a transcript of the video: So I think the biggest thing in technology in 2017 is voice. I think Amazon has effectively conspired with voice and technology and half a billion consumers to kill brands. When you go into a store, you see the packaging, you see the endcaps, you might see pricing go up and down. All of these things that big brands ranging from Unilever and Procter & Gamble to Kraft and Heinz have spent billions of dollars and generations building.
The chart illustrates that with every postwar expansion, as the economy grew, the bottom 90% of households received a smaller and smaller share of that growth. Even though their share was falling, the majority of families still captured the majority of the income growth until the 70s. Starting in the 80s, the trend reverses sharply: as the economy recovers from recessions, the lion’s share of income growth goes to the wealthiest 10% of families. Notably, the entire 2001-2007 recovery produced almost no income growth for the bottom 90% of households and, in the first years of recovery since the 2008 Great Financial Crisis, their incomes kept falling during the expansion, delivering all benefits from growth to the wealthiest 10%. A similar trend is observed when one considers the bottom 99% and top 1% percent of households (for details, as well as complete business cycle data, see here).
Inequality Update: Who Gains When Income Grows? - New Economic PerspectivesNew Economic Perspectives
The attack that injured one Borussia Dortmund player and led to a Champions League game being postponed earlier in April looks to have been an attempt to manipulate the stock market. The German police on Friday arrested a man on suspicion of planting the explosives that injured Spanish defender Marc Bartra on April 11, accusing the man of attempted murder, inflicting serious bodily harm, and causing an explosion. The suspect, a 28-year-old man identified by prosecutors as Sergei V, had reportedly bought options on Borussia Dortmund's stock worth roughly €78,000 (£65,000; $83,600).
Borussia Dortmund bus attack was share scam gone wrong - Business Insider