Discover and read the best of Twitter Threads about #macroeconomic

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Economics 101 for you, your family, aunts and uncles:

A thread explaining why we need to reconsider how we deal with our finances in the current circumstances.

A thread 🧵👇
Situation: You owe money to X individuals currently.

You need to pay this back.

It is set at a variable rate, which means it can change over time.

If this is you, then keep reading.
Some basic concepts to establish first.

Central banks of every nation set the base rate.

Commercial banks that me and you borrow from, set their interest rate from the "base" interest rate.
Read 16 tweets
A few months ago, #markets expected U.S. #inflation to peak by mid-2022 at around 7% to 8% at the headline level and then anticipated that generalized #price gains would decline into year end, closing the year around 4%.
However, the tragic war now unfolding with Russia’s attack upon Ukraine has not only sent #energy prices skyrocketing but it has led to much greater uncertainty over #economic growth and #MonetaryPolicy reaction functions, in Europe and indeed around the world.
Core #CPI (excluding volatile #food and #energy components) came in at 0.5% month-over-month and 6.4% year-over-year. Meanwhile, headline CPI data printed at 0.8% month-over-month and came in at 7.9% year-over-year, the greatest increase over a 12-month period since January 1982.
Read 17 tweets
I was listening to a witty politician on the TV!
I guess that's more than enough to detest economics as a subject when you find that some sinister fellow uses statistics to fool the masses.
Also, #Macroeconomic Indicators are the most fungible indicators that can be manipulated.
Gosh, people are writing so much on the forms of economic recovery that we might see in the foreseeable future!
Will productivity lead to employment gains?
That is one question not being asked.
Many people have become jobless due to the pandemic and its negative outcomes.
Because, once a white-collar person loses his job, then it becomes so difficult to regain a foothold in the labour market.
Blue-collar workers and zero contract hour workers are in a different leg of the job market.
Read 4 tweets
A #thread on our recent paper in @PLOSNTDs examining ecological #evidence-base for #DiseaseControl management practices for #KyasanurForestDisease #AcademicTwitter #Scicomm #OneHealth; paper led by @SarahBurthe from @MonkeyFever_ consortium
#Diseasecontrol strategies originate through endorsements by Governments/academia/authorities; they're often not field-tested robustly; even when they are, evidence is limited to one sector (cf. #OneHealth #Intersectoral approaches);
#publichealth approaches ought to be contextual & their effectiveness ought to be evaluated, yet strategies for disease control often spread through word of mouth and are sometimes untested;
Read 50 tweets
I am humbled and privilleged to note that my #Research paper; "Sources of #Unemployment in #Lesotho" is now available and can be accessed via the People's Republic of #China's National #Science and #Technology #Library - #NSTL. I give thanks 😎 Image
So far this year, I have successfully published three #Research articles in #Macroeconomics & #Finance, with another two in press. I am currently hammering away at a handful of working papers which will most certainly find a home in reputable #Journals, come 2021 🙏🏽🙂 Image
Im currently internalising the very insightful reviewer comments on my latest #Research paper titled; "Investigating Determinants of Commercial Bank Spreads in #Lesotho", from the good folks over at the globally reputable #International #Journal of #Finance & #Economics #IJFE 😊 ImageImage
Read 52 tweets
What are the implications of excess global financial market volatility on economic growth? Are there threshold effects in the relationship between growth & excess global volatility for individual countries? How should we model the nonlinear effects in a multi-country setting? 1/n
We answer these questions in recent work with Alexander Chudik @DallasFed, M Hashem Pesaran @USCDornsife @TrinCollCam, @mraissi80 @IMFNews & @arebucci1 @JHUCarey @cepr_org @nberpubs: ideas.repec.org/p/cam/camdae/2… #TGVAR 2/n
The #Covid19 #pandemic has been a shock like no other, initiating simultaneous demand and supply disruptions. In addition, it led to a sharp tightening in global #financial market conditions during the first quarter of 2020. 3/n Image
Read 23 tweets
In a recent paper, with Alexander Chudik @DallasFed, M Hashem Pesaran @USCDornsife, @mraissi80 @IMFNews & @arebucci1 @JHUCarey, we develop a threshold-augmented dynamic multi-country model (#TGVAR) to quantify the #macroeconomic effects of #Covid19: econ.cam.ac.uk/research/cwpe-… 1/n Image
Key challenges with the empirical #economic analysis of #Covid19 include the following: how to identify the shock, how to account for its non-linear effects, & how to quantify its effects while accounting for spillovers, common global factors, network effects and uncertainty. 2/n
We contribute to the literature by addressing these issues in a coherent multi-country framework. We offer an identification strategy for the #Covid19 shock considering that a synthetic control method cannot be applied in the context of a global #pandemic. 3/n
Read 23 tweets
Since the 08 financial crisis, real interest rates of many advanced economies have fall into negative territory. But China's real interest rate has risen notably since 2012 after going down all the way in 2000-2011, according to CF40 #Macroeconomic Policy Report: 1/6 Image
The drop of real interest rate in China in 2000-2011 was caused by several reasons, including longer life expectancy, as well as lower dependency ratio, rising income inequality and fall of the relative prices of capital goods. 2/6
Also, the period between 2000 and 2011 saw the peak of industrialization in China, when the government generated more than expected income, household income soared and saved it passively and companies greatly narrowed the difference between saving and investment. 3/6
Read 6 tweets
Since the 08 financial crisis, real interest rates of many advanced economies have fall into negative territory. But in China it has risen notably since 2012 after going down all the way in 2000-2011. Here’s some explanations given by a recent CF40 #Macroeconomic Report: 1/6 Image
The drop of real interest rate in China in 2000-2011 was caused by several reasons, including longer life expectancy, as well as lower dependency ratio, rising income inequality and fall of the relative prices of capital goods. 2/6
Also, the period between 2000 and 2011 saw the peak of industrialization in China, when the government generated more than expected income, household income soared and saved it passively and companies greatly narrowed the difference between saving and investment. 3/6
Read 6 tweets
TREAD:China’s #GDP grew by 3.2% yoy in Q2,but high-frequency data in Jun show that the recovery is slowing down in some sectors. For its economy to return to pre-pandemic level,a few more quarters are still needed,according to a CF40 #Macroeconomic report to be released soon: 1/7
PRODUCTION recovery in China has begun slowing down, particularly for some downstream industries like textile, papermaking, wine and beverages, agricultural byproducts etc. 2/7 ImageImageImage
CONSUMPTION recovery lacks momentum. Demand for durable consumer products such as commercial houses and cars is improving following the peak of the pandemic, but the recovery has shown sign of slowing down. 3/7 ImageImage
Read 7 tweets
Some personal good news in hard times: Joined with wonderful coauthors @Chris_ptz @pvillenueve we just published our paper „The macroeconomic effects of social security contributions and benefits” in the Journal of Monetary Economics doi.org/10.1016/j.jmon… #econtwitter Thread: Image
The gist of the paper is to estimate #macroeconomic #multiplier effects of spending on #socialsecurity vs. cutting contributions. The literature shows it is hard to estimate such effects, because spending and revenues are highly endogenous to the business cycle./2
We did a lot of nitpicking work conducting a time series of timing+size+circumstances of major legislations of social security in GER 1970q1-2018q4 (inspired by seminal work of Cristina+David Romer 2010 AER). This shall identify exogenous changes for causal analysis./3
Read 21 tweets
#CF40 #MACROECONOMIC POLICY REPORT The Great Depression and Roosevelt’s New Deal by senior fellow Zhang Bin: new.cf40.org.cn/uploads/ZB2020… #COVID19 #novelcoronavirus #economics
The #GreatDepression and Roosevelt’s #NewDeal are very precious historical treasures, of enduring significance to future generations as to avoid great depressions, carry out relief programs,reinvigorate economy &implement reforms.Key measures for the current crisis may include:
1. Maintaining credit growth and preventing deflation are cure for avoiding severe depression. The excessive tightening of credit led to the Great Depression, which ended following the restoration of credit, and economy could not recover from the Great Depression without help.
Read 8 tweets
#CF40 #MACROECONOMIC POLICY REPORT: The Great Depression and Roosevelt’s New Deal led by senior fellow Zhang Bin: new.cf40.org.cn/uploads/ZB2020… #COVID19 #novelcoronavirus #economics
The novel coronavirus is wreaking havoc on China and the global economies, as economic activities come to a standstill and unemployment rate skyrockets. The #GreatDepression and the #NewDeal are valuable experience and lessons for the current economic situation.
1. Maintaining credit growth and preventing deflation are cure for avoiding severe depression. The excessive tightening of credit led to the Great Depression, which ended following the restoration of credit, and economy could not recover from the Great Depression without help.
Read 8 tweets
Lets talk about #Oil and why the price of the #US benchmark #WTI West Texas Intermediate has turned negative FOR THE FIRST TIME EVER...
Some of you are waking up to what might read or sound like another disaster. Just when you were learning how to deal with #COVID19, you hear about a so called plunge in the #Price of #Oil. But what does it mean to have oil in negative territory & why is that the case? Lets see...
In the main we will talk a bit about simple matters of #supply & #demand while touching on the #future as far as #consumer outlooks & #perception / #confidence are concerned. I would like us to start in 2016, a quick recap...what happened to #Oil?
Read 20 tweets
1/5) Crises in #emergingmarkets are often rooted in a few key #macroeconomic imbalances and can manifest in similar ways. But there is no one-size-fits-all model for managing crises. | Mr. Athanasios Arvanitis of #IMF| Watch his full remarks here: Image
2/5) #IMF focuses on different dimensions while assisting a country in developing a homegrown stabilization program. Watch his full remarks here:
3/5) The approach emphasizes the need to diagnose the roots of a country’s crisis, trends & developments in the balance sheets of various #economic agents & their interconnectedness, &country-specific dynamics that affect the political #economy of reforms:
Read 5 tweets
Lets talk about #Argentina and the #IMF. Specifically, lets talk about the biggest IMF #Bailout in #History...
Before we start talking about #Argentina & how the #IMF has extended to them a #Bailout that is by far the biggest in the organisation's history, let us first appreciate what the functions of the IMF are...
The #IMF’s main goal is to ensure #stability of the #international #monetary & #financial #system. It helps resolve crises, and works with its 189 member countries to promote #growth & alleviate #poverty...
Read 12 tweets
Lets talk about John Maynard #Keynes and his #Passion for #Art...
John Maynard #Keynes is perhaps most famous for his 1936 Magnum Opus, The General #Theory of #Employment, #Interest, and #Money in which he argued for a more active role of #FiscalPolicy in #Macroeconomic management...
It is hardly disputable that #Keynes' work, and his subsequent roles during the #BrettonWoods era marked a significant intellectual shift in the way we have come to understand #Economics as a discipline...
Read 11 tweets
Lets talk about how important it is to frequently #Review #CentralBank #MonetaryPolicy #Frameworks...
I will set things off by pointing out that the various facets of #BusinessCycles (early, mid, late / boom & busts) consistently keep reminding us that what goes up, must come down. We might find ourselves in a prolonged #expansion, but eventually it decelerates into a #recession
As part of #Macroeconomic management (counter cyclical), a #CentralBank's objective (through its #MonetaryPolicy) is to maintain #PriceStability & #FinancialStability & in other cases, to promote #FullEmployment. It does this hand in hand with #FiscalPolicy...
Read 15 tweets
Let us talk about the #SouthAfricanReserveBank & what we can expect from their #MonetaryPolicy in 2020...
The #SouthAfricanReserveBank #SARB #MonetaryPolicyCommittee #MPC will conclude its first meeting of 2020 tomorrow 16th January 2020...The #KeyPolicyRate, the #RepoRate is currently 6.5% and #Inflation (#CPI inflation) is within the Bank's 3%-6% target range, at 3.6%...
The #SARB #MPC will consider #domestic #regional & #global #economic / #macroeconomic developments in deciding on its policy stance. The SARB is an inflation targeting #CentralBank whose mandate is to ensure #Price & #Financial #Stability necessary to support economic #Growth...
Read 6 tweets
While opening up can help improve financial sector’s efficiency, it could also increase fluctuations. It’s important to maintain #macroeconomic stability during the process of financial opening up, said Huang Yiping, Chairman of CF40 Academic Committee:
mp.weixin.qq.com/s/8z8vsLL5aDhe…
Financial opening up can even trigger #financialcrisis without proper management of fluctuations. The biggest problem many emerging economies face following financial opening-up is the sudden stop of capital flows, leading to deterioration in the national balance sheet.
Monetary policy by making countercyclical adjustment can help buffer shock caused by sudden stop of flow. Besides,as macro-prudential policy can further enhance stability, these two policies should be combined during financial opening up, the so called “two-pillar #macro policy.”
Read 5 tweets
As free #trade could bring decline in marginal benefits&rise in marginal costs,it's not a sure policy choice. Here are several key points from the latest special report by cf40 senior fellow Zhang Bin on the #Macroeconomic Policy Choice in the Context of #China-US Trade Dispute.
While,to date, the negative effects of protectionist measures taken by US on China have been within acceptable range, it’s necessary for #Chinese policymakers to consider the proper responsive measures, which could include:
1) fiscal and monetary policies should focus on maintaining a stable aggregate demand. Specifically, the report suggests that China adopt a floating #exchange rate regime, leave sufficient space for monetary policies, and maintain a moderate #inflation.
Read 5 tweets
Latest #macroeconomic data released by #China shows a conspicuous drop of #housing price in major cities. This could signal the arrival of an adjustment period for the country’s housing market. mp.weixin.qq.com/s/yCaLMtc7NTWv…
In a recent article, cf40 member Zhong Wei found five signs that may signal the end of an era when “people could get rich overnight by simply buying a house in #China.” 1.A strong #economic cycle with high growth rate and high profitability has passed;
2. A slowing down growth rate of household income; 3. Declining housing transactions in first-tier cities. The growth rate of rent in big cities has also dropped; 4. Decreasing household savings and increasing #debts;
Read 4 tweets
#China’s fiscal approach amid ongoing external economic &trade uncertainties:
1. Maintain steady growth of “broad #credit”-the sum of debts&loans to residents, firms & govts, which not just creates #debt but also financial assets which can help increase purchasing power.
2. Currently, the #credit and loan growth out of general govt spending and local govt financing platforms is a main stabilizer of #China’s #macroeconomic growth.
3. More “special #bonds” should be issued to support #infrastructure investments that generate low cash flow and are less profitable, meanwhile clarifying the #market-government boundary.
Read 7 tweets
Suggestions on #China’s #macroeconomic development in the next step:

1. Defuse #risks in the #financial system. The key is to defuse the implicit #debt of local #governments, which requires fiscal support.
2. Increase #infrastructure #investment projects in megalopolis and ease approval procedures for them.

3. Use proper #monetarypolicy to ensure adequate #market #liquidity and ensure reasonable growth of broad #credit.
4. Develop financial instruments such as equity-based REITs, develop individual pension accounts, promote supply-side financial reform.

5. Increase residential land supplies in cities with #population inflow; relax control on #realestates.

By Zhang B.:
mp.weixin.qq.com/s/fsn6JwmziNQJ…
Read 3 tweets

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