Beyond the Crisis: Sustainable Growth and a Stable International Monetary System, Speech by Dominique Strauss-Kahn, Managing Director of the International Monetary Fund Sep 4, 2009
A number of countries have already undertaken green stimulus measures for example, to improve energy efficiency that are helping to sustain aggregate demand and employment. These measures could also have powerful induced effects on technological innovation. (IMF News)
More jobs on the scrap heap Sep 4, 2009
This will tax aggregate demand for US made goods and services and limit job gains. Consequently, as the economy expands, businesses will struggle to find enough capital, and the trade deficits will create a shortage of demand for US goods and services and new layoffs will begin once the stimulus spending ends. (Asia Times Online)
Republic of Serbia - Stand-By Arrangement-Second Review, Aide Memoire Sep 4, 2009
This risk is underpinned by stubbornly high inflation expectations, and pressures anticipated in the last quarter, including a seasonal spike in food prices; continued recovery of oil prices against a likely stabilized or rebounding aggregate demand; potential exchange rate pressures due to increased import demand; and further hikes in regulated prices. 13. (IMF News)
Central bankers stuck in a hole Sep 1, 2009
Central bankers, as well as politicians, are urging banks to extend loans, irrespective of risk, with the purpose of stimulating aggregate demand and employment. Realizing that banks have become reluctant to lend unconditionally and throw money into the trash can, central banks have decided to circumvent the banking system and lend directly to the subprime markets, thus they are directly responsible for the eventual losses that will surely follow - while coining their activity as "creative". (Asia Times Online)
IMF adopts irrigationplan during a flood Aug 25, 2009
The Group of 20 (G-20) summit in London in 2009 called for unorthodox monetary policy as a way to boost aggregate demand, not only in the countries that were deeply affected by the crisis, but also in countries whose financial systems remained relatively sound ... This would provide many countries free purchasing power and would powerfully expand world aggregate demand and re-establish prosperity. (Asia Times Online)
Stiglitz: Dollar Reserve System Falling Apart Aug 22, 2009
Stiglitz said a new global reserve system would be good for global aggregate demand, global stability and global equity. "It's very hard to have a globally integrated financial system based on a single currency when there's such uncertainties about the economic fortunes of that particular country," he said. (Newsmax)
The U.S. economy will experience a U-shaped recovery and the recession will come to an end this year, a leading U.S. economist said recently. • Global economic recovery requires delicate sustaining acts Aug 19, 2009
"First, rebalancing from public to private spending. Second, rebalancing aggregate demand across countries, with a shift from domestic to foreign demand in the United States and a reverse shift from foreign to domestic demand in the rest of the world.". On the national front, he said that the fiscal response to the crisis was to increase government spending, lower taxes, and accept much larger fiscal deficits. (Xinhuanet, China)
Data suggest recession in the U.S. far from over Aug 18, 2009
Thus, there is a global slackening of aggregate demand relative to the glut of supply capacity, which will impede a robust global economic recovery. Double-dip recession There are also now two reasons to fear a double-dip recession. (Xinhuanet, China)
Pakistan lowers interest rate as economy improves: official Aug 16, 2009
He added that, "these positives reflect contraction in aggregate demand, much-needed fiscal consolidation and an improved balance of payments position.". However, he said, these achievements had not been without cost. (Yahoo! Asia News)
India's less reliant on monsoon now: Mark Mobius Aug 15, 2009
This is a risk to aggregate demand, to pricing a risk already for a much stretched fiscal balance. Is the Indian drought bothering you. (India Times)
The costs of macroeconomic instability Aug 13, 2009
Higher interest rates tend to slow the growth of the economy because it could reduce the level of aggregate demand for domestic goods and services. Exchange rate could strongly influence the demand for the countrys export as higher inflation rates affect consumers income and for that matter the purchasing power. (Ghana Web, Ghana)
The bill will fall duefor crisis failures Aug 13, 2009
It assumes unlimited supply of oil, food and everything else, and calls instead for outright deployment of fiscal policy to re-establish aggregate demand at its boom level. To achieve this end, Obama's budget will increase the US fiscal deficits that have ranged between 1% and 3% of gross domestic product (GDP) to about 14% of GDP. The immediate goal of Obama's policy was to create demand at any cost. (Asia Times Online)
Read Hannity's America Aug 7, 2009
The Washington Times reports the study, produced by the government Energy and Information Administration, found that cap-and-tax "increases the cost of using energy, which reduces real economic output, reduces purchasing power and lowers aggregate demand for goods and services.". By the way, under cap-and-tax, the manufacturing sector would lose 2. (Fox News)
Business.view: Clunky but effective Aug 5, 2009
Cash-for-clunkers has many benefits beyond simply getting more money passing through the hands of consumers and into aggregate demand. Tackling the liquidity trap answers one criticism of the scheme that it is simply pulling forward demand from the future, rather than creating additional demand. (The Economist)
Pimco's McCulley Says Federal Reserve Won't Increase U.S. Rates Until 2011 Aug 2, 2009
What Im worried most about is simply a shortfall in global aggregate demand relative to supply potential ... Its difficult to see where private sector aggregate demand is going to come through as the world is delevering and trying to increase its savings rate, McCulley said. (Bloomberg -- US)
No escape for Fed Jul 30, 2009
In 2008, realizing the impotence of aggressive monetary policy to stem an economic recession because of the reluctance of banks to lend to subprime borrowers, a wave of foreclosures, and households' over-indebtedness, Bernanke urged the government to run record fiscal deficits as a direct way to hike up aggregate demand and avert economic recession. Now, he has realized that the Fed has totally lost its independence and has to accommodate large fiscal deficits through maintaining near-zero... (Asia Times Online)
* Working together, US, PRC can help worlds economy Jul 29, 2009
If there is going to be more aggregate demand, it can come from only one place. That place is not Europe or Japan, where debts are even higher than in the US X and the demographic preconditions for servicing them less favorable. (Taipei Times, Taiwan -- World Business)
Matt Reed: Economist weighs in on issues Jul 26, 2009
Slotkin: The 'pro' of stimulus is that you're trying to stimulate aggregate demand, you're trying to inject some spending into the economy. That is the only way to close this gap. (Florida Today)
It'stime to revampthe Federal Reserve Jul 25, 2009
Accordingly, it became the most encompassing institution, with its powers extending to achieve the highest level of aggregate demand. Certainly politicians imposed the 1946 full-employment act, but paradoxically, the full employment mandate has been self-defeating. (Asia Times Online)
US economy dip 'less than feared' Jul 16, 2009
"Moreover, it seemed likely that economic activity was in the process of levelling out, and the considerable improvements in financial markets over recent months were likely to lend further support to aggregate demand.". Stimulus measures. (BBC News -- Americas)
Federal Reserve sees rebound in second half of 2009 Jul 16, 2009
" The report added: "Moreover, it seemed likely that economic activity was in the process of levelling out, and the considerable improvements in financial markets over recent months were likely to lend further support to aggregate demand. " Although the overall economic outlook was better, the Fed also raised its forecast for unemployment, saying the jobless rate would peak this year in a range of 9.8 to 10.1 percent, compared with its April forecast of 9.2 to 9.6 percent. The Fed also addressed... (Channelnewsasia.com)
Obama's Stimulus Plan: Failing by Its Own Measure Jul 15, 2009
"The various forms of fiscal stimulus are expected to provide powerful upward pressure on aggregate demand and to aid recovery," Romer's group says. But while the stimulus plan may eventually reach its goal, a look at the paper Romer and Bernstein wrote back in January shows that at least for now, the stimulus plan is at best off to a slow start. (Time.com)
Retail Sales in U.S. Probably Rose, Factory Slump Eased as Recession Waned Jul 12, 2009
Aggregate demand is still amazingly weak. Things arent falling apart, but dont expect a robust recovery. (Bloomberg -- US)
Transcript of a Press Conference on the Updates of the International Monetary Fund's World Economic Outlook and Global Financial Stability Report Jul 11, 2009
In particular, the actions undertaken by governments and central banks have succeeded in doing something which is very important, mainly in stabilizing banks' financial condition, in reducing funding pressures and counterparty risk concerns; and, in addition, they have provided support to aggregate demand. And as a result of this more favorable environment, risk appetite has returned and we have seen a shift out of safe havens to riskier, cyclical assets, and in capital market we are seeing a... (IMF News)
No end in sight toUS jobless rise Jul 10, 2009
The Fed, with a view to boosting aggregate demand and reabsorbing unemployment, has decided to inject trillions of dollars in new long-term liquidity under various lending facilities at a time when the banking has been overloaded with toxic assets and consumers were over-indebted ... Inflationists have taken advantage of costless money-printing to debase money and push unsafe credit with a view to boosting aggregate demand and employment. (Asia Times Online)
UN may be best broker of new reserve currency Jul 9, 2009
The build-up of reserves contributes to global imbalances and insufficient global aggregate demand, as countries put aside hundreds of billions of dollars as a precaution against global volatility. Not surprisingly, the US, which benefits by getting trillions of dollars of loans from developing countries now at almost no interest was not enthusiastic about the discussion. (Sydney Morning Herald -- Business)
SA must raise its savings rate to foster economic growth Jul 7, 2009
On the other hand, a higher savings rate and reduced spending is putting a brake on already sluggish aggregate demand. Fortunately, fiscal policy has, over the past number of years, created space for increased spending by saving the windfall gains from above-potential growth. (Business Report, South Africa)
COMMENT: Casting A Wide Net Jul 7, 2009
All these have high multiplier effects on aggregate demand and will continue the strong impetus to restore growth. The expenditure programme will be financed to the tune of Rs 6. (India Times, India)
* UN conference agreement seeks to tackle global economic crisis Jul 6, 2009
The build-up of reserves contributes to global imbalances and insufficient global aggregate demand, as countries put aside hundreds of billions of dollars as a precaution against global volatility. Not surprisingly, the US, which benefits by getting trillions of dollars of loans from developing countries X now at almost no interest X was not enthusiastic about the discussion. (Taipei Times, Taiwan -- World)
The 2009 Budget is not Growth Aggressive Jul 4, 2009
Indeed this is a deflationary policy whose consequence is likely to lead to a decline in aggregate demand and economic growth ... The deflationary effect on growth of such a decline in this spending category, which includes investments, administration and service and actually drives domestic aggregate demand for goods and services, would be felt much in real terms, given the projected expected inflation of about 15. (Ghana Web, Ghana)
* Was Greenspan wrong to keep interest rates low for so long? Jul 3, 2009
In the 1920s, Swedish economist Knut Wicksell defined it as the interest rate at which, economy-wide, desired investment equals desired savings, implying no upward pressure on consumer prices, resource prices or wages as aggregate demand outruns supply, and no downward pressure on these prices as supply exceeds demand. On Wicksells definition X the best, and, in fact, the only definition I know of X the market interest rate was, if anything, above the natural interest rate in the early... (Taipei Times, Taiwan -- Business)
Bernanke still a speed demon Jul 1, 2009
Besides its arbitrary nature, the output gap has less relevance for the US economy, which has an external current account deficit ranging from 5% to 7% of GDP, implying that US aggregate demand far exceeds its actual GDP. Similarly, an output gap has little relevance for Zimbabwe, which is running extraordinary large current account deficits. In both cases, demand far outstrips supply. (Asia Times Online)
Asian employment at risk Jun 29, 2009
"Granted, it is a lagging indicator of the cycle, but without a strong recovery in aggregate demand it will be difficult to create new jobs, and so unemployment can remain stubbornly high, hindering the economic recovery.". Hong Kong, Korea, Malaysia, Singapore, Taiwan and Thailand are most exposed in Asia to the global crisis, Nomura said. (India Times)
France -- 2009 Article IV Consultation Mission, Concluding Statement Jun 29, 2009
The jump in unemployment this year and next could further shake confidence and weaken private consumption, which has been the bedrock of aggregate demand thus far ... The fiscal response to support aggregate demand in 2009-10 has been appropriate. (IMF News)
Brazil's Central Bank Expects 2009 Gross Domestic Product to Expand 0.8% Jun 27, 2009
Consumption, which accounts for the bulk of aggregate demand, is relatively resilient, policy makers said in a quarterly report released today. Monetary policy, without hurting the commitment to the inflation target, and fiscal policy tend to help the recovery of economic activity. (Bloomberg -- Latin America)
Press Release: Statement of the IMF Mission to Colombia Jun 27, 2009
With the reversal of food price increases and weak aggregate demand, inflation pressures have abated and inflation is now expected to fall to near four percent. The external current account deficit has increased owing to a drop in exports, but has been partly offset by lower imports and, given Colombia s continued access to capital markets, has remained financed. (IMF News)
Guest commentary: Why Harvard, MIT should have given more Jun 25, 2009
In mid 2009 it is clear that aggregate demand is falling rapidly. There was modest growth (c 1. (Cambridge Chronicle, MA)
Apples vs. Doughnuts Jun 25, 2009
That's whyfollowing the advice of economists from across the spectrumwe passed the , a massive addition to aggregate demand designed to help get the economy moving again. It's still early, but there are signs that the crisis may be attenuating, andat the very leastthe rate of GDP decline is now much smaller. (Slate)
* Catching a glimpse of the new economic normal Jun 24, 2009
The large hole (on the order of US$700 billion or more) in global aggregate demand will have to be filled over time by a compensating increase in consumption in surplus economies, such as China and Japan ... But such measures may increase X and will be harder to phase out over time X in the context of a shortfall in aggregate demand. (Taipei Times, Taiwan -- World Business)
Bankers perpetuate crisis Jun 5, 2009
Their policy of excessive monetary expansion and negative real interest rates aimed at boosting credit, real aggregate demand and employment, and depreciating exchange rates (tantamount to competitive devaluations that became a scourge during the Great Depression) has forced unprecedented flow of credit into the subprime market, the only market that can absorb, unproductively and without limit, such massive credit flows. Credit expansion of this size will never be repaid. (Asia Times Online)
Possibly Encouraging Future Signs f... Jun 5, 2009
The remaining companies have to reorder, even at a lower level of aggregate demand. As their business begins to go up, they absorb some of what their competitors might otherwise have done. (Suite101.com)
Press Release: IMF Executive Board Approves US$336 Million Exogenous Shocks Facility Arrangement for Tanzania and Completes Fifth Review Under the Policy Support Instrument May 30, 2009
Real GDP growth is expected to fall significantly in 2009, as key sectors of the economy, including exported cash crops and tourism, face a severe downturn and cutbacks in foreign investment weaken aggregate demand. The authorities expansionary fiscal and monetary policies in the current situation are appropriate to cushion the effects of the crisis. (IMF News)
Liquidity drownsmeaning of 'inflation' May 27, 2009
Thus deflation in the equity market (falling share prices) has been cushioned by newly issued money, while aggregate wage income continues to fall to further reduce aggregate demand ... Rather, it is money destruction as a restorer of value while it produces a misleading and confusing effect on aggregate demand. (Asia Times Online)
Public Information Notice: IMF Executive Board Concludes 2009 Article IV Consultation with the Republic of Slovenia May 24, 2009
1 percent of GDP to attenuate the drop in aggregate demand and to alleviate distress of the most vulnerable groups. The fiscal deficit is expected to deteriorate to 4. (IMF News)
Fed official: Expect dragging recession May 23, 2009
"Major fiscal policy stimulus is under way and should add to aggregate demand in a timely way, unless consumers and businesses turn exceedingly cautious.". But the speed of any recovery could be slow, Stern warned. (Daytona Beach News Journal -- Local)
The Falling Value Of The Cedi And Inflation May 15, 2009
I must say that higher interest rates tend to slow the growth of the economy because it could reduce the level of aggregate demand for domestic goods and services. Exchange rate could strongly influence the demand for the countrys export as higher inflation rates affect consumers income and for that matter the purchasing power. (Ghana Web, Ghana)
Outlook for jobs hits a new low May 11, 2009
Andrew Smith, chief economist at KPMG, which helped with the research, said that while low wage increases and cuts could reduce business costs, lower incomes also depress aggregate demand. "Whichever way you look at it, the labour market outlook remains bleak - even though some data is showing signs that the freefall in economic activity may be coming to an end," he said. (BBC News -- UK)
Sticky times May 5, 2009
To fight this, Keynesians task governments with pushing money into the system to increase aggregate demand, buying up those previously fallow resources. My trouble with this business about stickiness begins with a historical perspective: Before governments began micro-meddling in the economy, prices seemed less sticky. (Townhall.com)
The mirage of recovery May 5, 2009
The basic economics advocated by the Obama team were simple: trillions of dollars in stimulus package and government expenditures would boost real aggregate demand for consumption and investment and automatically lead to economic recovery and full employment ... Doctor Bernanke's reasoning was simple: zero interest rates combined with unlimited credit to the sub-prime markets ought to hike up aggregate demand in such a powerful way that it blasts away recession and secures fast growth and full... (Asia Times Online)
* A balanced global economy is needed, not quick picker-uppers Apr 29, 2009
But this will lead to the global economy running at a lower level of aggregate demand unless the surplus countries expand spending in their domestic markets. So thats one problem. (Taipei Times, Taiwan -- World Business)
Inflation Doves Put Faith in Output-Gap Religion: Caroline Baum Apr 17, 2009
For starters, aggregate measures -- aggregate demand, aggregate supply -- and inflation are macroeconomic concepts. Prices are set at the firm, or micro level. (Bloomberg -- Columnists)
Animal spirits must be brought to heel to fix crisis Apr 16, 2009
Following this target, aggregate demand should be sufficiently high that firms producing good products at a price the public would want to pay will be able to sell them ... The sticker shock involved will be large, but the costs, in terms of lost output, of not meeting either the credit target or the aggregate demand target will be larger. (Business Report, South Africa)
Depression Lurks Unless There's More Stimulus Apr 15, 2009
Following this target, aggregate demand should be sufficiently high that firms producing good products at a price the public would want to pay will be able to sell them ... The sticker shock involved will be large, but the costs in terms of lost output of not meeting either the credit target or the aggregate demand target will be yet larger. (Bloomberg -- Columnists)
Obama: U.S. Not "Out Of The Woods" Apr 15, 2009
"They have been designed to increase aggregate demand, get credit flowing again to families and businesses, and help them ride out the storm. And taken together, these actions are starting to generate signs of economic progress.". The speech, which key aides had signaled in advance would not contain any major announcements, came as Mr. Obama nears his symbolic 100-day mark in office, important because that has become a traditional marker by which to judge new administrations. (CBS News)
Averting Depression as Consumer in U.S. Fades: Stephen Roach Apr 14, 2009
With the risk of a depression viewed as completely unacceptable to the global body politic, the full force of the policy arsenal is being aimed at jump-starting aggregate demand -- irrespective of the consequences such results might imply for a new build-up of global imbalances ... This crisis and the wrenching recession it has spawned are all about a destabilizing shift in the mix of global saving and aggregate demand. (Bloomberg -- Columnists)
Zimbabwe: Comesa - Anxiety As Customs Union Readies to Open Apr 11, 2009
The news of an impending customs union has already set Zimbabwe's companies on the edge as many of them face numerous barriers to competitiveness ranging from lack of working capital, limited access to international lines of credit, high input costs, depressed aggregate demand, loss of skilled workers, to low capacity utilisation, which increases their average costs. "It is regrettable that the government rushes to sign protocols to open our market without looking at our own position, whether we... (allAfrica.com)
Give and take Apr 10, 2009
Well, increasing the demand for food by $80 a month times 8 million households ain't a lot, I guess, but a $640 million addition to the aggregate demand for food is sure NOT going to make prices go down, if that is what you think. And it is this very same idea that "prices go up when the money supply goes up" that makes me tell you, seemingly for the thousandth time, to buy gold, buy it right now, and buy lots of it, because prices for lots of things will go up, and up, and up from here, and for... (Asia Times Online)
Fed exec says economic growth will resume Apr 10, 2009
"Major fiscal policy stimulus is now under way and should add to aggregate demand in a timely way unless consumers and businesses turn exceedingly cautious.". Stern leads the Fed's ninth district, which includes the Dakotas, Minnesota, Montana, the Upper Peninsula of Michigan and parts of northwestern Wisconsin. (Sioux City Journal, IO)
Nigeria: CBN Cuts Interest Rate to Boost Lending Apr 9, 2009
Lamenting that the outlook for inflation in the near term remains uncertain, he however, said: "The staff estimates indicates that inflation cold decelerate to single-digit by mid-2009, in response to subdued aggregate demand, lower impact of imported inflation and the near-completion of the pass through effect of the depreciation of the naira.". Soludo said provisional data indicated that broad money (M2) declined by 1. (allAfrica.com)
READ THE MINUTES: FOMC meeting of March 17-18 Apr 9, 2009
Fiscal and monetary policies were likely to contribute significantly to aggregate demand in coming quarters. Participants expressed a variety of views about the strength and timing of the recovery, however. (USA Today -- Money)
G-20 makes it worse Apr 8, 2009
A simple economic principle evaded those experts: the real aggregate demand is downward sloping: a depreciation of money in the form of a rising general price level depresses real output. Some call it long-term stagflation. (Asia Times Online)
Protectionism threatens economic recovery Apr 1, 2009
"There is now a danger of an incremental buildup of restrictions that could slowly strangle international trade and undercut the effectiveness of policies to boost aggregate demand and restore sustained growth globally," he said. Gerard Lyons, chief economist of Standard Chartered Bank, said in an exclusive interview with Xinhua that world leaders at the G20 summit need to make clear and detailed commitments to prevent protectionism. (Xinhuanet, China)
Employment Policies and Social Sustainability: The Human Dimension in the Global Economy, Speech by John Lipsky, First Deputy Managing Director of the International Monetary Fund, at G8 Social Summit 2009, Rome Apr 1, 2009
Second, expansionary monetary and budget policies are needed to support aggregate demand both this year and next. However, with the impact of monetary policy weakened by financial system problems and with interest rates in key economies already approaching zero, innovative credit policy also may be needed in some economies. (IMF News)
* China must boost domestic demand Mar 27, 2009
The governments initial policies aimed at raising aggregate demand focused on major infrastructure spending, including roads and mass transit. But the more significant strategy is to alter government policies in ways that will lead to higher spending by Chinese consumers and that raise the level of those government outlays, like health care, which directly benefit Chinese households. (Taipei Times, Taiwan -- Sports)
Inflation inches closer to 0% Mar 27, 2009
Even as inflation inches close to zero, economists and policy makers ruled out chances of deflation a sustained decline in prices on account of fall in aggregate demand that may encourage consumers to delay spending, hurting economic growth. They argue that deflation would kick in only if the industrial output contracts in the range of 5-7. (India Times)
