It happened exactly the same in Argentina, during the 2000's crisis. People would opt to spend their money on luxury or durable goods, in order to secure the value of their current savings, instead of keeping it and face a possible massive devaluation. Businesses typically also do the same in these circumstances, opting to stock goods instead of keeping liquidity, for the same reason - securing the value of the money they have.
Friday, 17 July 2015
Wednesday, 15 July 2015
Massively injecting money in the economy and cutting interest rates to prevent an already over-heated market to auto-correct is like brewing the perfect storm for an economy. Now, you do that on the third biggest economy in the world (I am considering the Eurozone as the first one, though most of the people would dispute me) and you are creating a really big global bomb. Let's see if China can come out of this one.
Posted by Ricardo at 12:18
From Augusto Mateus, former Economy Minister.
Posted by Ricardo at 12:15
Friday, 26 June 2015
Harvard Business Review published a very good and well thought sequence of two articles, the first dedicated to robots and their impact in productivity and Labour and the second on the rising inequality we are seeing everywhere in the world, as wealth created by Labour decreases vs the importance of Capital revenues. Both of them are amazing articles on their own, but, as soon as you realize in the second technology might actually be the rising force between the divergence of Labour and Capital, than, their combination becomes especially powerful. A must read!
Posted by Ricardo at 17:07
Friday, 5 June 2015
Wednesday, 11 March 2015
I think this article that summarizes Cecchetti's main idea that the financial sector may be currently too big for the current economic models is a good read - I really recommend it, especially as the plumbing analogy really helps one to understand the problem.
Posted by Ricardo at 11:39