I have little doubt that the most perverse aspect of orthodox economics is the idea of monetary neutrality. Taken as nothing more than an article of faith, monetary practitioners use the principle as cover to undertake drastic and blunt intrusions into markets and economies, with no guilt over having done so because they can simply invoke neutrality and proclaim some [...]
The juxtaposition of the official unemployment rate in Japan against wage gains (losses, more precisely) raises an interesting and potentially debilitating conundrum. More workers are being employed inside Japan, but the average pay rate clearly is falling for new jobs. This, of course, sounds very familiar to Americans that have seen exactly that process play out in our versions of [...]
The running narrative all over the developed world is temporary factors. In the US it is weather-related, while Europe is seized by not enough euphoria (more on that later), and Japan by the tax increase attempt at fiscal responsibility. In the Japanese case, as it relates to the ever-important trade balance, the record debilitation in the first quarter under an [...]
I think it is very clear that the Bank of Japan is becoming more and more sensitive to swings in the Japanese stock market. Policy pronouncements, toothless as they usually are, seem to correlate very well with downturns in stock prices. Perhaps some of the Federal Reserve literature is making its way East. There were no doubts, none whatsoever, last [...]
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