Blog Mash-Up of the Week

Everyday the blogosphere offers an enormous amount of in-depth analysis on any imaginable topic. The world of macroeconomics and economic forecasting is no exception. To keep themselves updated on the latest information, our in-house team of economists scan the world wide web and gather what they consider the most interesting, appealing, informative or just curious blog posts from experts in the field of global economics. Here’s the list of the Top 5 posts from this week. Check it out!

  1. True Economics – Constantin Gurdgiev: ‘Welcome to Surreal Irish National Accounts’

    Dr. Constantin Gurdgiev comments on the state of Irish national accounts, arguing that GDP and GNP figures are inflated as a result of the distorting presence of some multinational companies in the country. He also raises concern over tax arbitrage effects on Ireland’s official statistics. This relevant blog post contributes to the current debate as Ireland has recently been dubbed a tax haven by the U.S. Senate. – Mateusz Reimann

  2. The Everyday Economist – Josh Hendrickson: ‘How much capital?’

    Hendrickson discusses how the financial reform requires banks to hold more capital, that is, banks should finance using more equity relative to debt. The author states that in a Modigliani-Miller world, banks should be indifferent between debt and equity and takes a step back from the policy response and asks why banks overwhelmingly finance their activities with debt. His arguments provide interesting issues to the debate. – Karina Azar

  3. The Market Monetarist – Lars Christensen : ‘Toilet paper shortage is always and everywhere a monetary phenomenon’

    Christensen takes the fun title as an opportunity to comment on Venezuela’s monetary policy. According to the author, being a commodity-export country, Venezuela should implement an Export Price Norm i.e. the Central Bank should peg the country’s currency to the price of the main export good to maintain nominal GDP stability; in Venezuela’s case the price of oil in Venezuelan bolivar. – Pamela Pogliani

  4. ThinkMarkets – Andreas Hoffmann: ‘The Euro: a Step Toward the Gold Standard?

    Andreas Hoofman, from the University of Leipzig, makes an interesting commentary on Jesus Huerta de Soto’s argument that the euro is a proxy for the gold standard. De Soto points out that like when “going on gold” European governments gave up monetary sovereignty by introducing the euro. In addition, De Soto argues that like the classical gold standard, the common currency forces reforms upon countries that are in crisis because governments cannot manipulate the exchange rate and inflate away debt. Therefore, to limit state power and to encourage reforms he views the euro as second best to the gold standard from a free market perspective. However, Hoffman recognizes that he has some trouble with De Soto’s conclusions on the view that adhering to the euro (as did adhering to gold) gives an extra impetus for market reform. – Ricardo Aceves

  5. Real-World Economics Review Blog – Merijn Knibbe: ‘Graphs of the day – the investment slump in the Eurozone’

    Merijn Knibbe uses the fable of the ant and the grasshopper to explain the current investment situation in the Eurozone. According to the author, what the ant did was invest in new inventories, instead of saving money, and translated into economics it would mean that the worst that the Eurozone can do is to stop real investment. Merijn describes that investments are highly volatile and that they can plummet during a recession but they can also recover fast. However, this recovery is not happening now as policy makers prefer to invest in debt securities rather than spending money in the real world. – Ricard Torné

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