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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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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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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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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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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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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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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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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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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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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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