Whoever would have thought that some people once called economics the most dismal of sciences? Certainly, as the current crisis goes on and on, those of us who consider ourselves to be economists scarcely are able to find the time to squeeze in a dull moment, even here and there. But even at a broader level, interest in that most dismal of dismal topics - the theory and practice of central banking - seems now to fire up levels of enthusiasm here in Spain that make even the appetising prospect of a forthcoming Real Madrid-Barça football match pale in intensity. Even if it is the case, I have to admit, that the everyday Johnny (or Jill) come lately sitting in the bar still - truth be told - prefers the sports columns of the daily newspapers, or the lacivious details of the latest romantic adventure of one of the rich ...

German voters gave Chancellor Angela Merkel the green light for a second term on Sunday, along with a clear mandate to form a new government with the liberal Free Democrat Party (FDP). But just what exactly is the new government likely to do? Merlek has been quick to pour cold water on any idea of early tax cuts, “I expect we’ll agree very quickly on tax policy, especially when you look at the leeway we have with the budget," she is quoted as saying.br /br /Angela Merkel's room for maneuver is limited by the fact that Germany has been steadily racking up debt to tackle the crisis. Only today the Federal Statistical Office have said that the deficit in the overall public budget increased to euro 57.2 billion in the first six months of this year from euro 6.9 billion a year earlier as spending rose sharply (8.1%) and revenue ...

With Japan having general elections today and Germany facing them next month, I though now might be as good a time as any to have a look at a topic which could turn out to be very important in the months to come: the real underlying rate of unemployment in both these countries.br /br /While the present focus of most press attention is on the fact that GDP in Germany and Japan nudged upwards between April and June (over Q1), we should never forget that this increase follows substantial falls in output. Japan’s real GDP fell at a record pace in Q4 2008 and Q1 2009 (annualized declines of 13.5% and 14.2%, respectively), and German GDP fell by a quarterly 3.5 percent in Q1 and an annual 6.7% - making for the fourth consecutive quarter of negative growth. In both cases the fall in output was accompanied by only a ...

Well, euphoria in Germany is certainly on the rebound, with a sudden surge in the ZEW investor confidence index and newspaper articles all over the place predicting the imminent renaissance of European economic growth, despite the fact that in 3 of the 5 big European economies - the UK, Italy and Spain - there is little in the way of evidence to back this view up.br /br /The French economy is certainly holding up reasonably well, but the situation in Germany still remains deeply problematic due to the complete dependence of the economy on exports. Despite this we have a shower of articles (Below I present an extract from a href="http://www.ft.com/cms/s/0/ab84cf5a-8e2d-11de-87d0-00144feabdc0.html"Frank Atkins writing in the Financial Times/a) explaining how "Europe's Economic Recovery is Gaining Steam" and the "German economic recovery powers ahead". I have already written up a a href="http://globaleconomydoesmatter.blogspot.com/2009/08/germanys-economy-returns-to-timid.html"an extensive summary of the actual state of play in the ...

The German economy, Europe’s largest, unexpectedly returned to growth in the second quarter, technically bringing an end to its worst recession since World War II. The euro climbed 0.2 percent to $1.4248 on release of the report.br /br /But don't get carried away just yet, since while gross domestic product rose a seasonally adjusted 0.3 percent from the first quarter, when it plunged 3.5 percent, the most since quarterly data were first compiled in 1970, compared with Q1 2008 Compared with the second quarter of 2008, the price-adjusted GDP product was down 7.1%, while after adjustment for calendar variations, economic performance decreased 5.9% on a year earlier as the quarter had three working days less than the same period of the previous year.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/SoP27Hnvo0I/AAAAAAAAOzc/lo7OyDbYK0w/s1600-h/german+GDP+1.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 206px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5369406676274225986" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SoP27Hnvo0I/AAAAAAAAOzc/lo7OyDbYK0w/s400/german+GDP+1.png" //abr /br /Household and government final ...

The eurozone economies moved sideways in June, with the flash reading on the composite purchasing managers index (which covers both industry and services) for the 16 nation euro area rising to 44.4, fractionally above the 44 registered in May. So we are just where we were before, contracting more slowly than in Q1, but still contracting, and the fiscal bullet is now almost spent.br /br /Not without importance was that the reading came in significantly weaker than the consensus expectation for a sharp increase to 45.3. So the market *has* been getting ahead of itself.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SkDGDQDTy0I/AAAAAAAAOac/Wee8t9xG8f8/s1600-h/eurozone+pmi.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 228px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5350494116466903874" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SkDGDQDTy0I/AAAAAAAAOac/Wee8t9xG8f8/s400/eurozone+pmi.png" //abr /br /On the face of it, the index is now consistent with a quarterly drop in GDP of around 0.5 percent, well below the 2.5 percent fall registered in the first quarter. However ...

GfK AG’s forward looking German consumer sentiment index for July increased to 2.9 from a revised 2.6 in June. But sentiment is still on a very low level, and in general the story is the same as the IFO one yesterday, it's all about expectations. But are these expectations well founded?br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/SkC_vbYG2jI/AAAAAAAAOaU/zYGbVED6MUM/s1600-h/gfk+one.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 199px;" src="http://2.bp.blogspot.com/_ngczZkrw340/SkC_vbYG2jI/AAAAAAAAOaU/zYGbVED6MUM/s400/gfk+one.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5350487178839775794" //abr /br /With all the talk in the press and by politicians that the economic downturn may be coming to an end, consumer hopes of economic stabilization are intensifying and accordingly, economic expectations are increasing moderately. The fact that the employment market has remained fairly robust is likely to be one reason for this. Reports that the inflation rate stood at 0% in May are having a positive effect on income expectations and the propensity to buy. br /br /Economic expectations increased for the ...

German business confidence rose for the third month in a row in June. The Ifo institute in Munich reported that its business climate index, based on a survey of 7,000 executives, increased to 85.9 from 84.3 in May. The index reached a 26-year low of 82.2 in March. As far as I can see, this isn't exactly a whole big deal. Just more of the same for now.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sj9Pkr6PS9I/AAAAAAAAOaE/brfe6_UKUDQ/s1600-h/German+IFO.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 246px;" src="http://3.bp.blogspot.com/_ngczZkrw340/Sj9Pkr6PS9I/AAAAAAAAOaE/brfe6_UKUDQ/s400/German+IFO.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5350082374020320210" //abr /br /In terms of areas of activity, retail sales show no improvement, construction is up slightly, and manufacturing keeps hovering near the bottom.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sj9PRw7movI/AAAAAAAAOZs/pMSXE71kGhg/s1600-h/german+ifo+2.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 238px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5350082048950706930" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sj9PRw7movI/AAAAAAAAOZs/pMSXE71kGhg/s400/german+ifo+2.png" //abr /br /Ifo’s measure of expectations increased to 89.5 from 86 while a gauge of current conditions eased to 82.4 ...

Quietly clicking my way through Bloomberg last Sunday afternoon, a href="http://www.bloomberg.com/apps/news?pid=newsarchiveamp;sid=aC4zbsgMD6x8"I came across this/a:br /br /br /blockquotestrongFacebook Members Register Names at 550 a Second/strongbr /br /Facebook Inc., the world’s largest social-networking site, said members registered new user names at a rate of more than 550 a second after the company offered people the chance to claim a personalized Web address.br /br /Facebook started accepted registrations at midnight New York time on a first-come, first-served basis. Within the first seven minutes, 345,000 people had claimed user names, said Larry Yu, a spokesman for Palo Alto, California-based Facebook. Within 15 minutes, 500,000 users had grabbed a name. /blockquotebr /br /Mein Gott, I thought to myself, if 550 people a second are doing something, they can't all be wrong. So I immediately signed up. Actually, this isn't my first experience with social networking since I did try Orkut out some years back, but ...

Everything in Germany is going up, except it seems the real economy - and except of course prices, which were stationary in May (that is a change of 0% year on year - the lowest inflation rate for over 20 years). Anyway, today it was the turn of investor confidence to put in another good reading. In fact German investor confidence rose to what is effectively a three-year high in June. Aparently investors feel the recession in Europe’s largest economy is bottoming out.br /br /The ZEW Center for European Economic Research said its index of investor and analyst expectations increased to 44.8 from 31.1 in May - the highest reading since May 2006.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/SjecgalrecI/AAAAAAAAOZE/J5pWpLh8j7w/s1600-h/german+zew.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 212px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5347915163232860610" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/SjecgalrecI/AAAAAAAAOZE/J5pWpLh8j7w/s400/german+zew.png" //abr /br /Unfortunately, there is little real evidence to support this highly optimistic view of the ...