With the timing of the latest G20 meeting set to coincide with the run-in to the German elections a href="http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100001043/germany-declares-economic-war/"acrimonious debate has not been absent/a, but even as the passions generated by the arrival of voting day subside, it is clear that just beneath the surface their lie some simmering problems which simply will not go away. Despite the fact that nothing is really on the table that will make that much difference in the short run, I think the structural transformation that they are carrying out at G20 level is going to be very important in the longer term in finding eventual solutions.br /br /According a href="http://www.ft.com/cms/s/0/268529ce-a8ec-11de-b8bd-00144feabdc0.html"to Bertrand Benoit in the Financial Times/a the G20: "will endorse a report from the Financial Stability Board that calls for bonuses to be linked to the long-term success of financial companies and not excessive risk taking." Well this of course sounds absolutely ...

Hungary's economic correction still fails to convince. Indeed I am not the only one who remains unconvined by the viability of what is currently taking place it seems, since according to the opposition supporting local daily newspaper Magyar Hírlap, none other than the Hungarian Prime Minister himself may be having doubts, as he is reportedly thinking of leaving the helm of the struggling ship placed under his charge before the next general election, which is scheduled to take place sometime early next year.br /br /If this version of events is ultimately confirmed it will only add to the IMFs growing problems out East, since events in Latvia are not going at all according to their liking - see FT Alphaville's Izabella Kaminska's "a href="http://ftalphaville.ft.com/blog/2009/09/18/72706/another-latvia-wobble/"Another Latvian wobble/a" of last Friday - and indeed Latvia’s government rapidly cobbled together another 275 million lati ($575.6 million) in spending cuts for 2010 yesterday after ...

Russia’s central bank this week lowered its main interest rates for the seventh time since April 24 - lowering the refinancing rate a further quarter percentage point. The decision came hard on the heels of the announcement that the Russian economy suffered a record economic contraction in the second three months of the year and refelect the growing recognition that the country now faces a painfully slow recovery. Just how painful things might become will form the subject matter of this report.br /br /strongRisks Rising On All Frontsbr //strongbr /Bank Rossii cut the refinancing rate to 10.5 percent from 10.75 percent (following a quarter point reduction on August 10), and lowered the repurchase rate charged on central bank loans to 9.5 percent from 9.75 percent, effective from tomorrow. The bank has now cut the rates six times since April 24. Nonetheless Russia’s benchmark refinancing rate is still the second-highest in ...

blockquote'As far as I am concerned, this is ... the most complex crisis we've ever seen due to the number of factors in play'br /Spanish Economy Minister Pedro Solbes speaking to the Spanish radio station Punto Radio September 2008br /br /“‘The global imbalances have to add up to zero and so, if the US is going to be less the consumer importer of last resort, then other countries are going to need to be in different positions as well."br /Director of the US president’s National Economic Council Larry Summers, speaking over lunch with the FT’s Chrystia Freeland./blockquotebr /br /Basically what we now have before us - as Pedro Solbes pointed out before being uncerimoniously defenestrated from the inner circle of the Spanish government - is an extremely complex situation and problem set. The background has evidentally been an unprecedented global financial and economic crisis, but this crisis has affected countries ...

a href="http://1.bp.blogspot.com/_ngczZkrw340/SqeIfEhvvOI/AAAAAAAAPG0/gIej76YsWCU/s1600-h/Latvia+exports.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 260px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5379418347289951458" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SqeIfEhvvOI/AAAAAAAAPG0/gIej76YsWCU/s400/Latvia+exports.png" //abr /br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sqduz5AQyYI/AAAAAAAAPGc/VPWJ-B5zMVI/s1600-h/quarterly+constant+price+imports+and+exports.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 257px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5379390117671651714" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sqduz5AQyYI/AAAAAAAAPGc/VPWJ-B5zMVI/s400/quarterly+constant+price+imports+and+exports.png" //abr /Latvia’s economy shrank a revised 18.7 percent in the second quarter of 2009 over a year earlier in what was the second-steepest drop in the entire European Union (worsted only by Lithuania) according to detailed data released by the statistics office yesterday. The contraction, which is now the largest since quarterly records began in 1995, was revised down from a preliminary estimate of a 19.6 percent annual drop. And Latvia's problem can easily be seen in the above charts which show the most recent movement in exports, and quarterly data for constant price imports and exports. The Latvian economy grew driven by domestic consumption and ...

The non-biblical concept of original sin, as a href="http://fistfulofeuros.net/afoe/economics-and-demography/escaping-original-sin-in-hungary/"Claus Vistesen notes in this post/a, when propounded in its standard Obstfeld amp; Krugman textbook version refers to the situation where many developing economies who are not able to borrow in their own currencies feel forced to denominate large parts of their sovereign and private sector debt in non-domestic currencies in order to attract capital from foreign investors - as evidenced most recently in the countries of Central and Eastern Europe. Well, piling insult upon injury, I'd like to take Claus's point a little further, and do so by drawing on another well tried and tested weapon from the Krugman armoury, the idea of the "eternal triangle".br /br /As is evident, the reality which lies behind the current crisis in the EU10 is complex, and has its origin in a variety of causes. But one key factor has undoubtedly been the decisions ...

According to a once-upon-a-time post on the Economist's a href="http://www.economist.com/blogs/certainideasofeurope/2007/07/a_fistful_of_reply.cfm#list-comments"Certain Ideas of Europe Blog/a Edward Hugh “was very cross” about some of the journalism they were serving up over at that prestigious journal. Well, not to worry, since this time he is hopping mad. And the issue which lies behind his wrath is essentially the same one, how to interpret and understand the demographic processes which are currently so evidently affecting our societies. In what is simply the latest episode in a long and sorry saga (if you want documentation, please see the comments Claus Vistesen and I nailed to their "Wall" in the above linked post) this week's print issue contains a href="http://www.economist.com/sciencetechnology/displaystory.cfm?story_id=14164483"a research review from their science and technology correspondent/a who is evidently not backward in coming forward with headline grabbing claims. According to the said corresponedent the demographic transition (a process which has been ongoing for over ...

by Claus Vistesen: Copenhagenbr /br /According to a href="http://www.amazon.com/International-Economics-MyEconLab-1-semester-Student/dp/0321488830"the well known textbook in international economics/a by Maurice Obstfeld and Paul Krugman [1] the notion of original sin refers to the fact that many developing economies are not able to borrow in their own currencies but are forced to denominate large parts of their sovereign debt in order to attract capital from foreign investors. The argument then goes that if and when the goings get tough those countries will face difficulties paying off their liabilities and once the dust have settled the sin, as it were, has only become more binding when these same economies yet again venture onto international capital markets.p/p pIt is interesting to ponder this story in relation to Eastern Europe where far from being a sin the ability to denominate liabilities in foreign currencies such as Euros and Swiss Francs was almost seen as a virtue of ...

div class="body" pBy Claus Vistesen: Copenhagenbr //ppAccording to a href="http://www.amazon.com/International-Economics-MyEconLab-1-semester-Student/dp/0321488830"the well known textbook in international economics/a by Maurice Obstfeld and Paul Krugman [1] the notion of original sin refers to the fact that many developing economies are not able to borrow in their own currencies but are forced to denominate large parts of their sovereign debt in foreign currency in order to attract capital from foreign investors. The argument then goes that if and when the goings get tough those countries will face difficulties paying off their liabilities and once the dust have settled the sin, as it were, has only become more binding when these same economies yet again venture onto international capital markets./p pIt is interesting to ponder this story in relation to Eastern Europe where far from being a sin the ability to denominate liabilities in foreign currencies such as ...

a href="http://2.bp.blogspot.com/_ngczZkrw340/Sl-DPT0bIUI/AAAAAAAAOsk/VTNecCmHJ1A/s1600-h/hungary+population.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 219px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5359146380635611458" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/Sl-DPT0bIUI/AAAAAAAAOsk/VTNecCmHJ1A/s400/hungary+population.png" //abr /br /Just what the hell is going on in Hungary? This is the question which even the most cursory inspection of the latest round of data coming out of the country leads me to ask myself. What the hell is going on and just what kind of correction is this the IMF are presiding over here?br /br /In May, according to the latest data from the Hungarian statistics office, in the Hungarian private sector real wages were up, and employment was down. Meanwhile in the public sector, real wages were down, but employment was up (contrary to what was supposed to be happening). A recent programme to get workers off the unemployment roles and back to work seems to have had the perverse and contradictory impact of offsetting the ...