Mike Norman Economics

This time in the dollar.

China may be behind this latest surge in oil. If so, look out. And gold will follow.

From a new paper by Antonio Fatas: “This paper studies the negative loop created by the interaction between pessimistic estimates of potential output and the effects of fiscal policy during the 2008-2014 period in Europe. The crisis of 2008 created an overly pessimistic view on potential output among policy makers that led to a large adjustment in fiscal policy during the years that followed. Contractionary fiscal policy, via hysteresis effects, caused a reduction in potential output that...

Chinese President Xi Jinping has called for a robot revolution in manufacturing to boost productivity. Wages in China are rising, and it's becoming harder to compete with cheap labor. An aging population in China also necessitates automation. The working-age population, people age 15 to 64, could drop to 800 million by 2050 from 998 million today. Chinese robotic growth is forecast to exceed 20 percent annually through 2020. Interesting article to read in full. China's socialist ideology...

On June 24, 2018, the Bank of International Settlements (BIS) released their – Annual Economic Report 2018 – which contains their latest analysis of the global economy including the risks they think the current growth process faces. It is full of myth and like previous statements from the BIS it only serves to perpetuate the policy mentalities that caused the global financial crisis. These multilateral organisations (including the BIS, IMF, World Bank, OECD etc) have become the harbingers...

John Haidt says the working class mainly vote conservative  but one of the reasons for this is to much immigration which the working class blame on the liberals. But mass immigration  has really been the policy of the right wing neoliberals as businesses wanted cheaper labour to compete with the third world. Also, immigration pushed up demand for housing which was good for landlords and bankers as the value of rents and mortgages rose. Immigration just pushes up GDP. In the end people love...

Someone finally asked Obama administration officials to own up to the rise of ISIS and arming jihadists in Syria.   Mahdi Haden, of the Intercept, nailed Ben Rhodes, Obama's National security adviser, down about Obama's arming and funding if ISIS and other terrorist groups fighting in Syria. Ben Rhodes, backed into a corner, finally admitted it but said the U.S. wasn't as bad as the others, meaning  Saudi Arabia and Qatar, etc, as if that makes it okay.  Anyway, none of ever mainstream...

We got long crude again at $64. It’s closing in on $73. What now?

The Kalecki profit equation -- named after the economist Michal Kalecki -- describes how aggregated profits are determined by national accounting identities. (Note that Jerome Levy came up with a similar approach earlier; the equation is sometimes referred to as the Kalecki-Levy profit equation.) The results are perhaps not obvious if we look at profits from a bottom up perspective. From the perspective of business cycle analysis, the key point to note is that net investment is a source of...

The global economy could be on the cusp of a productivity boom—and big opportunities for companies. Tidbit: However, capturing the productivity potential of advanced economies may require a focus on promoting both demand and digital diffusion in addition to more traditional supply-side approaches. McKinsey Five Fifty — A quick briefing in five—or a fifty-minute deeper dive The Coming Boom?