Who just posted this right-wing market monetarist interpretation of recent events? Well, the euro area has had a (slightly) shrinking population aged 15-64 since 2008, while the US has not (although our growth is slowing). How does this affect the picture, and what changes? Europe still does badly, but not by as bad a margin […]

The view that QE is ineffective is pretty widely held—except in the asset markets. Earlier today, Mario Draghi hinted than another round of QE might be coming later in the year, if the global economy continues to be weak.  The euro fell 2% against the dollar, and European stock indices rose sharply.  Even Wall Street […]

Yes, you read that correctly.  Here’s a recent news story: FRANKFURT (Reuters) – U.S. rate hikes could have greater global repercussions than in the past and affect the euro zone more in some respects than the domestic market, European Central Bank Vice President Vitor Constancio said on Thursday. A Federal Reserve rate rise would have […]

Vaidas Urba sent me the latest ECB report: The March 2015 ECB staff macroeconomic projections for the euro area foresaw annual HICP inflation at 0.0% in 2015, 1.5% in 2016 and 1.8% in 2017. In comparison with the Eurosystem staff macroeconomic projections published in December 2014, the inflation projection for 2015 had been revised downwards, mainly […]

So it looks like it will be one trillion euros in QE, somewhat more than the markets expected.  A few comments: 1.  The policy would have been far more effective if done a year or two ago.  It will still be somewhat effective, but not a game changer.  Think “less bad times” in the eurozone, […]