Daily Economy Thread

[JEANBO 364]

I can't believe I haven't discovered this thread earlier. So happy I will read about economy since I'm economics student so I need as much knowledge as I can get. :)

[Hecturr 1,937]

I am crying, the norwegian currency is going down like crazy what to omg 

[Luc 4,776]

Europe has debt overhang... All the cuts from austerity have shaved off GDP it would otherwise have

Also... The benefits of low oil prices are delayed. While its true consumers save right away... Businesses wont pass savings of lower business costs to consumers right away. They also wont hire and expand right away, they will wait to see if these favourable conditions continue

Also dont forget about secular stagnation. Severe downturns tend to be U shaped not V shaped. After the downturn because unemploymet is so weak, wages wont rise much until unemoyment falls low enough for businesses to compete for labor so for a while wage inflation in Europe will be an issue

Also young ppl are the most affected by recessions. Expect delayed household formation and the housing market will take a long time to refover as young ppl will be ready to buy their first home or apartment later than usual

That could explain why even tho rates are low and the US economy is finally powering ahead... The housing market is still stagnating

Weirdly, wage inflation isn't a problem. Wages will rise 2,3% in the Netherlands next year, but inflation 1,25% only - and that was before oil went down so much so it'll probably be like 1% or 0,75%.

 

The housing market is also recovering here: see this link. In November 2014, as many houses as in November 2008 were sold.

http://www.kadaster.nl/web/Zakelijk/Vastgoedcijfers/Aantal-woningen.htm

aantal woningen verkocht = amount of houses sold

filters you should put max

 

Here you can see wage rises in Europe for 2015.

Verenigd Koninkrijk = UK

Duitsland = Germany

Griekenland = Greece

Letland = Latvia

Tsjechië = Czech Republic

Oostenrijk = Austria

the rest I think you can guess ;)

go to this site and click on the image if it's too small: http://www.z24.nl/economie/hoezo-deflatie-nederlandse-salarissen-stijgen-23-procent-in-2015-520674

[Economy 52,845]

Weirdly, wage inflation isn't a problem. Wages will rise 2,3% in the Netherlands next year, but inflation 1,25% only - and that was before oil went down so much so it'll probably be like 1% or 0,75%.

The housing market is also recovering here: see this link. In November 2014, as many houses as in November 2008 were sold.

http://www.kadaster.nl/web/Zakelijk/Vastgoedcijfers/Aantal-woningen.htm

aantal woningen verkocht = amount of houses sold

filters you should put max

Here you can see wage rises in Europe for 2015.

Verenigd Koninkrijk = UK

Duitsland = Germany

Griekenland = Greece

Letland = Latvia

Tsjechië = Czech Republic

Oostenrijk = Austria

the rest I think you can guess ;)

go to this site and click on the image if it's too small: http://www.z24.nl/economie/hoezo-deflatie-nederlandse-salarissen-stijgen-23-procent-in-2015-520674

i was refering to Europe in general especially south europe. But general inflation is influenced by many things not JUST wages. If inflation went in perfect tandem with inflation, wages in relation to cost of living would never change and would be the same everywhere but its not the case.

I can't believe I haven't discovered this thread earlier. So happy I will read about economy since I'm economics student so I need as much knowledge as I can get. :)

lol this thread has existed for a month already. I was asked by a mod if id like to have a pinned thread where i do all the updates rather than making a thread for each news individually :)

[MarryTheMonster 282]

Something happened to the Norwegian economy idk why like

 

1 dollar = 7,5 NOK -> was around 6,5

1 euro = 9 NOK -> was 8,4-5 ish

1 pound = 11,6 NOK - was 9-10

 

  I'm not pleased with this

[Luc 4,776]

i was refering to Europe in general especially south europe

lol this thread has existed for a month already. I was asked by a mod if id like to have a pinned thread where i do all the updates rather than making a thread for each news individually :)

Yeah, but all countries have a nice wage inflation besides Cyprus... Other than Cyprus there's no country with wage inflation below 1%, and Cyprus is so small that it doesn't really matter tbh.

 

Oh well, low inflation isn't that bad for now. I don't think it's smart for the ECB to buy state obligations and stuff like that, because it'll make the South European countries lazy. South European politicians are chickens tbh. They're scared to do any kind of reform, all are populists that want to keep enough seats for the new elections. Sadly the same is partly true in the rest of Europe more and more, they're scared to make retirement age higher, they're scared to let more immigrants in, they're scared to spend less on healthcare, they're scared to pump more gas and oil, and in my country they're scared to remove the mortgage interest deduction.

 

In my country honestly they should have more taxes on net worth, and without that any kind of leveling is basically useless, considering the richer will keep getting richer. With the money they earn from that they can make taxes lower for the lowest income bracket, minimum wage higher, university education free, make infrastructure even better, innovate (green), improve education, give extra money to people with university education with children, etc.

Something happened to the Norwegian economy idk why like

 

1 dollar = 7,5 NOK -> was around 6,5

1 euro = 9 NOK -> was 8,4-5 ish

1 pound = 11,6 NOK - was 9-10

 

  I'm not pleased with this

That happened today?

 

Perhaps it's because of the oil?

[Economy 52,845]

Something happened to the Norwegian economy idk why like

1 dollar = 7,5 NOK -> was around 6,5

1 euro = 9 NOK -> was 8,4-5 ish

1 pound = 11,6 NOK - was 9-10

I'm not pleased with this

petro currency

The Canadian Dollar has been falling a lot since oil began its steep decline. 1 Canadian Dollar now buys only 86 cents US and it bought 95 cents a year ago and was at equal level 2-3 years ago

Any economy high in oil has had the currency drop

Although i dont care. I live in Central Canada not Western Canada. Were not comodity based like the west of the Country were manufacturing based

So for where i live a weaker currency and cheaper energy is good!

[Economy 52,845]

Yeah, but all countries have a nice wage inflation besides Cyprus... Other than Cyprus there's no country with wage inflation below 1%, and Cyprus is so small that it doesn't really matter tbh.

Oh well, low inflation isn't that bad for now. I don't think it's smart for the ECB to buy state obligations and stuff like that, because it'll make the South European countries lazy. South European politicians are chickens tbh. They're scared to do any kind of reform, all are populists that want to keep enough seats for the new elections. Sadly the same is partly true in the rest of Europe more and more, they're scared to make retirement age higher, they're scared to let more immigrants in, they're scared to spend less on healthcare, they're scared to pump more gas and oil, and in my country they're scared to remove the mortgage interest deduction.

In my country honestly they should have more taxes on net worth, and without that any kind of leveling is basically useless, considering the richer will keep getting richer. With the money they earn from that they can make taxes lower for the lowest income bracket, minimum wage higher, university education free, make infrastructure even better, innovate (green), improve education, give extra money to people with university education with children, etc.

That happened today?

Perhaps it's because of the oil?

inflation is suppostu be lower during bad economic times anyway. Its one thing by trying to increase it by lowering interest rates and trying to increase demand for things which in term lifts up inflation

Making artificial inflation by printing money tho is a slippery slope to go down. Economists acknowledge all kinds of risks to doing that

Although QE is a bit different from regular momey printig but still. I think it should be avoided if possible

And ur right, QE would lower interest rates relative to inflation by increasing inflation and lowering bond yields simultaneously. In real value terms, they wouldnt be paying any interest as the US wasnt when it was paying 1.6% in interest while doing QE and thats roughly what inflation was

It discourages countries from making difficult needed changes by making the situation easier in the short term

[Luc 4,776]

inflation is suppostu be lower during bad economic times anyway. Its one thing by trying to increase it by lowering interest rates and trying to increase demand for things which in term lifts up inflation

Making artificial inflation by printing money tho is a slippery slope to go down. Economists acknowledge all kinds of risks to doing that

Although QE is a bit different from regular momey printig but still. I think it should be avoided if possible

And ur right, QE would lower interest rates relative to inflation by increasing inflation and lowering bond yields simultaneously. In real value terms, they wouldnt be paying any interest as the US wasnt when it was paying 1.6% in interest while doing QE and thats roughly what inflation was

It discourages countries from making difficult needed changes by making the situation easier in the short term

Yeah, and big reforms is what European countries - ESPECIALLY ITALY AND FRANCE - need. But they're lazy and have populist governments.

 

I can't believe how many people fall for populism. They simply don't get that in a debt crisis you need to make debt lower, and that's done by reforms, after which you get trust back and afterwards you have economic growth and inflation which will make the debt lower.

 

If Syriza wins the Greek elections, then Europe will lose SO much money. Billions upon billions upon billions upon billions. Like 300 billion?

[Woolfsmck 2,763]

@luc. Two points ....

European economy as a certain trade restriction that the U.S. doesn't. It's called cross border tariffs .... The U.S. and China benefit from an internal trade economy between states and provinces because they aren't crossing international borders.... Europe has numerous borders that products must cross before they can be sold, Increasing cost ,, add protectionistic rule of individual governments and it slow commerce down ... Having low fuel and interest rates encourages corporate sized investment, but general populace sees very little benefit initially.

Secondly. ... Having a set minimum wage prevents companies from abusing low skilled employees true, and considering the average ethics of most employers, I can see why it's necessary.... But consider supply and demand economics with the labor/employer market ... Hi skilled jobs pay more because employers have fewer hiring options and must offer more money to lure desirable employees. Regulating wages too much (like France) damages incentive for both employer and investor ... Employees may enjoy their regulated income until the companies they work for fail and can no longer employ them.

[Economy 52,845]

Yeah, and big reforms is what European countries - ESPECIALLY ITALY AND FRANCE - need. But they're lazy and have populist governments.

I can't believe how many people fall for populism. They simply don't get that in a debt crisis you need to make debt lower, and that's done by reforms, after which you get trust back and afterwards you have economic growth and inflation which will make the debt lower.

If Syriza wins the Greek elections, then Europe will lose SO much money. Billions upon billions upon billions upon billions. Like 300 billion?

during debt crisis to lift crisis u need to make changes that cost nothing to lift growth

Some deregulation (within reason), lifting retirement age so ppl are productive longer and pay taxes longer are ways of lifting economic growth without increasing the deficit

[Economy 52,845]

@luc. Two points ....

European economy as a certain trade restriction that the U.S. doesn't. It's called cross border tariffs .... The U.S. and China benefit from an internal trade economy between states and provinces because they aren't crossing international borders.... Europe has numerous borders that products must cross before they can be sold, Increasing cost ,, add protectionistic rule of individual governments and it slow commerce down ... Having low fuel and interest rates encourages corporate sized investment, but general populace sees very little benefit initially.

Secondly. ... Having a set minimum wage prevents companies from abusing low skilled employees true, and considering the average ethics of most employers, I can see why it's necessary.... But consider supply and demand economics with the labor/employer market ... Hi skilled jobs pay more because employers have fewer hiring options and must offer more money to lure desirable employees. Regulating wages too much (like France) damages incentive for both employer and investor ... Employees may enjoy their regulated income until the companies they work for fail and can no longer employ them.

so if u wanna transport something across Europe by train or trucks u gotta pay tax on every Country you cross?

[Luc 4,776]

so if u wanna transport something across Europe by train or trucks u gotta pay tax on every Country you cross?

I thought the entire point of the EU was preventing that? There's a free trade zone here that includes most countries besides the UK and a few others.

[Economy 52,845]

I thought the entire point of the EU was preventing that? There's a free trade zone here that includes most countries besides the UK and a few others.

thats what i thought. I dont kniw what wolfsmck was trying to say :shrug:

[Woolfsmck 2,763]

thats what i thought. I dont kniw what wolfsmck was trying to say

there are still trade restrictions and protectionist policies in place... The 'free' part relieved some of the problem ...