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Bring On The Powell Put

November 27th, 2018 · Comments Off on Bring On The Powell Put

From the President down, with markets bleeding, market observers are clamoring for the Fed to lower rates – or at least not raise them further. There are some economists, like Martin Feldstein, who argue that the Fed should simply ignore this noise and keep on raising rates. The thought is that rates should be considerably […]

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Tags: Economic Policy

Deregulation Isn’t Always Pro-Growth, Even When It’s Pro-Business

October 30th, 2018 · Comments Off on Deregulation Isn’t Always Pro-Growth, Even When It’s Pro-Business

Deregulation is often believed to spur economic growth and therefore be business and shareholder friendly. However, there are instances where it is indeed business and shareholder friendly, but not market friendly, as it can confer market and pricing power to insiders. So once again, we have to stress the difference between market friendly and business […]

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Tags: Economic Policy

Perennial Tax Cuts

October 24th, 2018 · Comments Off on Perennial Tax Cuts

Tax cuts are seen by some as the necessary, indeed almost the only instrument for economic growth. A sort of magical formula for all times and circumstances. The resulting deficits should be met with public spending cuts, so the agenda really is shrinking the state. This overlooks large distributional consequences, and there is little to […]

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Tags: Economic Policy

Another Own Goal?

April 18th, 2018 · Comments Off on Another Own Goal?

The trade tensions between the US and China are heating up. Much of the US focus is on Chinese efforts to expand in high-tech industries in general and optical networking industries in particular. Hence, the US is putting sand in the wheels of the expansion of important Chinese companies like ZTE and Huawei. But these […]

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Tags: Economic Policy · Economy

The U.S.-China Race To Lead The Fourth Industrial Revolution

April 11th, 2018 · Comments Off on The U.S.-China Race To Lead The Fourth Industrial Revolution

The US Administration has reacted with alarm about China’s (2015) ambitious plan to develop industries of the future (China 2025). It is threatening China with trade sanctions, mostly targeted at thwarting, or at least slowing down these Chinese ambitions. But these Chinese ambitions aren’t anything out of the ordinary. They follow logically from their economic […]

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Tags: Economic Policy

And Now For Those Tax Cuts

September 21st, 2017 · Comments Off on And Now For Those Tax Cuts

The administration is arguing it’s now focused on tax reform, a major driver of the post-election rally in stocks. It would indeed be beneficial for stocks, but so far we have seen intentions, no concrete proposals let alone bills. And there are significant hurdles to overcome and depending on what’s actually in the bill, its […]

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Tags: The Markets

Will Trump Be The Next Ronald Reagan?

April 29th, 2017 · Comments Off on Will Trump Be The Next Ronald Reagan?

Can Trump do a Reagan? We have to wait for further details of his tax plan and see what survives Congress. However, we have to point out that there are some important historical differences which makes a repeat of the Reagan years much less likely. And this is even if you believe that tax cuts […]

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Tags: Economic Policy · Fiscal policy

The Limits Of Free Money

April 29th, 2017 · Comments Off on The Limits Of Free Money

Investors have been much more savvy about how economies behave under excess savings than many policy makers and observers. While investors piled on and made a killing, many policy makers have overly worried about the risks of accelerating inflation and the state of public finances. That doesn’t mean the near free money that a savings […]

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Tags: Economic Policy · Fiscal policy

Boom Time For Liberals

April 29th, 2017 · Comments Off on Boom Time For Liberals

The existence of excess savings over investment produces an economy that works differently. It basically enables the public sector to increase spending for free. This is most visible in the deleveraging stage after the burst of an asset bubble, where policy vice becomes virtue and public releveraging needs to compensate private deleveraging. But some of […]

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Tags: Economic Policy · Fiscal policy

A Curious Economic Riddle

April 6th, 2017 · Comments Off on A Curious Economic Riddle

From most of its economic data post financial crisis one would be inclined to think Belgium is a peripheral Southern European eurozone economy. The Dutch economy on the other hand is one of the most competitive in the world. Yet for most of the post-financial crisis period, the Belgium economy performed considerably better on growth, […]

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Tags: Economic Policy · Economy · Netherlands