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Monday, April 23, 2012

Who Wears Short-Shorts?

I expected to see this on Small Dead Animals, but I did not, so here goes:American Professors Gather In Tehran for OWS Conference. Because when you think "Summa Cum Laude Human and Women's Rights", you automatically blurt out "Tehran", don't you? Or perhaps you just needed somewhere to wear that lovely headscarf.

Bundesbank, summary April:
Germany will face perceptible demographic challenges over the next few years. The domestic labour force will shrink and age. The April Monthly Report examines the potential impact this will have on the German economy’s potential growth. The report shows that the dampening effects of demographics can be mitigated if suitable reform steps are taken by the end of this decade, thereby essentially allowing the current growth in potential output of around 1¼% per year until 2020 to be maintained.
This is conditional on the supply of labour being stabilised by further increasing labour force participation and boosting needs-based immigration. In addition, constant productivity gains need to be achieved by up-skilling the labour force and through technical progress.
The Bundesbank denizens spend a lot of time talking about debt. Maastricht debt did fall last year from 83% of GDP to 81.2% of GDP. In 2005 it was 68.6%. Thus Germans are not really anxious to take on extra debt in any way, and Weidmann makes his case in NY today.

His case is very strongly contra the mainstream of US economic theorists. But not all of them. For example, Kocherlakota gave a speech at the end of March which asserted that the Fed was reaching the limits of its ability to affect US labor markets.

The best US commentary on the Fed quandary is currently coming from Bullard of St. Louis.

Given a shrinking population, it's reasonable that Germany wouldn't want to take on more debt. Obviously, because the citizens wouldn't want a greater debt burden per capita.
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