Rabu, 05 September 2012
Jumat, 15 Juni 2012
All Articel 5
Because a Large majority of the forecast statements in our sample
were qualitative in nature. it was necessary to convert them into
quantitative data in order to evaluate them. (2) We used a method for
scoring qualitative in Formation employed by Goldfarb and others [2005] to evaluate qualitative forecasts from the Great Depression. This proCedure converts qualitative statements into quantitative data.
The individual forecasts provided qualitative assessments about both the current state and the future direction of the economy. These two types of assessments were analyzed separately. We scored each statement using an optimism-pessimism scale that ranged from - 1 to 1 with gradations or steps of 1/4
For example% 1 was assigned to any quotation indicating that the economy was doing very well and would expand strongly. Statements that the economy was already in a deep recession, or would be in a particularly had recession, were given a score of - 1. Any citation indicating the economy's direction was unclear was given a 0. Table 1 presents the relationship between the scores and the paraphrased statements.
Validation of the scoring procedure
Goldfarb and others [2005] validated their methodology by comparing their scores for the forecasts made with the monthly analyses of economic conditions published in the 1929-30 issues of the Federal Reserve Bulletin. Similarly. we verify the appropriateness of our scoring of the business economists' qualitative statements by comparing our results with an analogous scoring of the qualitative statements in various issues of the Federal Reserve Beige Book. Compiled periodically by each of the 12 Federal Reserve Banks, the Beige Book is a qualitative analysis of economic conditions within each Banks region. (3) Released two weeks before each FOMC meeting, the Beige Book contains information about the state of the US. economy that the FOMC considers in setting monetary policy. The Beige Book is important in this decision context because it becomes available before certain official U.S. macroeconomic data are released.4 Although this information is anecdotal, previous research showed that the Beige Book generally provides valid information about the current direction of the U.S. economy [see Fettig and others 1 999; Balke and Yucel 2000; Ginther and Zavodny 2001; Balke and Petersen 2002; and Armesto and others 2009].
A comparison of the Beige Book information with our scores poses several possible technical problems. The first involves timing. While our data constitute a time series of monthly observations, the Beige Book is not published monthly because the FOMC meets on'ly eight times a year. Thus, there are missing observations for some months.
Second, economic conditions are described differently across the Federal Reserve districts. Some branches tend to be much more conservative in their descriptions while others use more extreme language to describe similar events. Thus, the scores assigned to each Banks statements may not be consistent. Finally, it has also been noted that some districts are better than others at accurately gauging the state of their regional economy: some seem to focus only on the city where the district bank is located [Armesto and others 20091. Despite these potential discrepancies, most analyses that scored the Beige Book statements and compared them with actual macroeconomic data fOUnd that this source generally tracked the U.S. economy well. Therefore, we can be relatively confident thai by using the same scoring scale and adjusting for missing dates. the beige Book should be an excellent benchmark for evaluating the business economists statements about the U.S. economy.
The closing date ['or collecting data for the Beige Book was used to determine the date to which the average scores was attributed. For example February 26, 2007 was the closing date for collecting data that were in the March 2007 report. Consequently, the date assigned for the inFormation in the March Beige Book was February 2007.
In scoring the statements in every Beige Book, particular attention was paid to the primary sentence that described the state of each regional economy. The scorings were identical to those applied to the Wall (5) freer Journal articles, but with particular attention paid to key words, such as "modest growth and 'sluggish growth.' The Beige Book score assigned to each month was the average of the scores obtained from the statements of 12 Regional Banks.
The individual forecasts provided qualitative assessments about both the current state and the future direction of the economy. These two types of assessments were analyzed separately. We scored each statement using an optimism-pessimism scale that ranged from - 1 to 1 with gradations or steps of 1/4
For example% 1 was assigned to any quotation indicating that the economy was doing very well and would expand strongly. Statements that the economy was already in a deep recession, or would be in a particularly had recession, were given a score of - 1. Any citation indicating the economy's direction was unclear was given a 0. Table 1 presents the relationship between the scores and the paraphrased statements.
Table 1, Criteria for Scoring Qualitative Forecasts
General Mindset Score Condition Diagnosed or Forecast
Optimism 1 The economy is strong or will expand
very strongly
3/4 The economy is growing
normally or will definitely continue
to grow
1/2 The economy is growing at a "modest"
pace or will do well barring
unforeseen events
1/4 There is some risk of a recession or
downturn < 30%, or the economy will
still grow
but slower than usual
Neutral 0 It is unclear where the economy is
or where it will go because the
signs are mixed
Pessimism 1/4 The economy is visibly slowing,
"decelerating," or there is quite a
bit of risk of a recession,
>30% but <60%
-1/2 The economy is "sluggish'7, barely
growing, or there is >60% risk of
recession
-3/4 The economy is declining, will
contract, or there are mild
recession conditions
-l Recession conditions are here or
imminent and it is worse than any
recession in recent history
Separate scores were assigned to statements about the current
situation and to projections about the future condition of the economy.
We thus could separately examine the economists' assessment of the
current situation and their forecasts of the future on the
aforementioned scale. Two time series of these scores were then
constructed by averaging the scores of the individual forecasts made in
each month--one time series for the statements about the present and
another about the future.
Validation of the scoring procedure
Goldfarb and others [2005] validated their methodology by comparing their scores for the forecasts made with the monthly analyses of economic conditions published in the 1929-30 issues of the Federal Reserve Bulletin. Similarly. we verify the appropriateness of our scoring of the business economists' qualitative statements by comparing our results with an analogous scoring of the qualitative statements in various issues of the Federal Reserve Beige Book. Compiled periodically by each of the 12 Federal Reserve Banks, the Beige Book is a qualitative analysis of economic conditions within each Banks region. (3) Released two weeks before each FOMC meeting, the Beige Book contains information about the state of the US. economy that the FOMC considers in setting monetary policy. The Beige Book is important in this decision context because it becomes available before certain official U.S. macroeconomic data are released.4 Although this information is anecdotal, previous research showed that the Beige Book generally provides valid information about the current direction of the U.S. economy [see Fettig and others 1 999; Balke and Yucel 2000; Ginther and Zavodny 2001; Balke and Petersen 2002; and Armesto and others 2009].
A comparison of the Beige Book information with our scores poses several possible technical problems. The first involves timing. While our data constitute a time series of monthly observations, the Beige Book is not published monthly because the FOMC meets on'ly eight times a year. Thus, there are missing observations for some months.
Second, economic conditions are described differently across the Federal Reserve districts. Some branches tend to be much more conservative in their descriptions while others use more extreme language to describe similar events. Thus, the scores assigned to each Banks statements may not be consistent. Finally, it has also been noted that some districts are better than others at accurately gauging the state of their regional economy: some seem to focus only on the city where the district bank is located [Armesto and others 20091. Despite these potential discrepancies, most analyses that scored the Beige Book statements and compared them with actual macroeconomic data fOUnd that this source generally tracked the U.S. economy well. Therefore, we can be relatively confident thai by using the same scoring scale and adjusting for missing dates. the beige Book should be an excellent benchmark for evaluating the business economists statements about the U.S. economy.
The closing date ['or collecting data for the Beige Book was used to determine the date to which the average scores was attributed. For example February 26, 2007 was the closing date for collecting data that were in the March 2007 report. Consequently, the date assigned for the inFormation in the March Beige Book was February 2007.
In scoring the statements in every Beige Book, particular attention was paid to the primary sentence that described the state of each regional economy. The scorings were identical to those applied to the Wall (5) freer Journal articles, but with particular attention paid to key words, such as "modest growth and 'sluggish growth.' The Beige Book score assigned to each month was the average of the scores obtained from the statements of 12 Regional Banks.
All Articel 4
1. Large Countries as Models in the Twentieth Century
For some countries that gained their independence in the twentieth century, the Soviet Union became the country to emulate. Toward the end of the century, of course, the socialist model lost its appeal. It became evident to all that Russia and the other members of the Soviet bloc had failed miserably. At the same time, east Asian economies had ridden capitalism to prosperity.
Although the issue of market economics vs. socialism had been settled by 1990, there remained competing models of capitalism. At the time, many thought the lesson of the 1980s had been that Japan's variant of capitalism was the best model and that other countries around the world should and would follow it. The model was said to include such institutions as: strategic trade policy, administrative guidance, relationship banking, life-time employment, collusive industrial groupings (keiretsu), and corporate governance that seeks to maximize the capital stock and long-term market share rather than short-term profits. (1)
As it turns out, there is indeed such a thing as accumulating too much capital. The Japanese model quickly lost its luster in the 1990s as the speculative bubbles of the late-1980s burst and the economy sunk into two decades of stagnation. From this, many drew the lesson that the U.S. variant of capitalism had been the best model all along. The touted institutions included American-style corporate governance: securities markets, rating agencies, accounting standards, generous compensation for CEOs (tied, for example, to options), and pursuit of profitability and share prices rather than sheer size. The United States began the 1990s with military triumph in Kuwait and ended it with the longest economic expansion in its history. Other countries should and would follow the American model.
The American model in turn lost its attractiveness in the decade of the 2000s. Its reputation for competence and integrity took some heavy blows, including the Enron-type accounting scandals of 2001, failing incomes among blue collar workers, the subprime mortgage crisis and ensuing recession, massive budget deficits, the occupation of Iraq and associated failures, and disasters in the Gulf of Mexico.
Where should countries look for a model, now? Some will respond, "China." It is undeniable that the rate of growth sustained by China over the last three decades is a miracle of history. But I find it difficult to think of many Chinese institutions that I would recommend that other countries try to copy [Williamson 2012]. Even today, China's status as the world's second largest economy owes more to the size of its population than to its GDP per capita, which has still to rise above the median level in global rankings.
We are accustomed to looking to large countries for innovations that push out the frontier of governance. But some smaller countries, and countries on the periphery, have experimented with policies and institutions that could usefully be adopted by others.
Small countries tend to be trade-dependent, and open to new ideas. Countries that are small, newly independent, remote, or emerging from a devastating war often find it easier politically to institute radical reforms than do the United States or other large, established countries. Not all the experiments will succeed. But some will. Those innovations that succeed may be worthy of emulation by others.
Let us begin with examples from countries that are small in size, but have relatively high per capita incomes.
2. Ideas from Small Advanced Economies
New Zealand adopted a comprehensive set of liberalization reforms, known as "Rogernomics," after Roger Douglas, a Minister of Finance, starting in 1984. Perhaps its Labor Party should even be given credit for pioneering the principle that left-of-center governments can sometimes achieve economic liberalization better than their right-of-center opponents [Nagel 1998]. New Zealand's monetary authorities pioneered inflation targeting in 1990, originally as part of a larger strategy of holding individual civil servants accountable for yearly goals. Canada in 1991 and then many other central banks over the subsequent two decades followed New Zealand in adopting inflation targeting.
Estonia led the way in simplifying its tax system by means of a successful flat tax in 1994, followed by other small countries in Central/Eastern Europe and elsewhere. (2) Switzerland in 2001 put into its constitution the "debt brake." This was not a rule that the actual budget be balanced, like the impractical Stability and Growth Pact of the euro countries, but rather a rule that the structurally adjusted budget be balanced [Danniger 2002]. Germany emulated Switzerland in 2009, by putting a similar debt brake into its constitution and would like the other 16 members of the eurozone to follow suit.
Ireland recognized the importance of foreign direct investment and encouraged it by instituting a low corporate tax rate. The strategy to become the Celtic Tiger succeeded--economic growth averaged in excess of 7 percent per annum between 1995 and 2007--though the economy entered an unsustainable bubble toward the end of this period.
Canada has shown how to run a crisis-free banking system. It is not by breaking up banks that are "too big to fail" into small bits. The Canadian system is concentrated in five large banks, which hold more than 80 percent of bank assets, but the authorities have never had to bail them out. Public policy in Ottawa does not seek artificially to increase the extent of owner-occupied housing by encouraging loans that the households may not be able to repay: mortgage interest is not tax deductible, a 20 percent down payment is standard (unless the borrower takes out insurance), and mortgages are "full recourse" loans (defaulting does not let the borrower off the hook). The result is that Canada achieves the same level of home ownership as the United States, but with far less leverage, fewer defaults, and no systemic crises [Perry 2010].
Sweden in 1992 showed how to move aggressively to rescue a banking system in crisis while yet taking steps so that the taxpayer eventually gets all or most of his money back [Dougherty 2008; Larsen and Giles 2009]. (3) This example helped inspire the U.S. government's redesign of the Troubled Asset Relief Program in early 2009.
More broadly, the Scandinavian countries, after deciding that they had swung too far in the high-spending socialist direction in the 1970s, made some adjustments in the 1990s [Aslund 2010; Becker, 2007; Borg 2010]. The "Nordic model" has by now shown that it is possible to combine a high level of social protection, social services, and corporatist labor relations with market economics, fiscal responsibility, and free trade. According to Anders Aslund [2010], Denmark was the pioneer in the 1980s, in which case we should call this the Scandinavian model, followed in the 1990s by Sweden under the prime ministership of Carl Bildt. High female participation in the labor force is one ingredient in the formula. Sweden's comprehensive school voucher system may be another.
For some countries that gained their independence in the twentieth century, the Soviet Union became the country to emulate. Toward the end of the century, of course, the socialist model lost its appeal. It became evident to all that Russia and the other members of the Soviet bloc had failed miserably. At the same time, east Asian economies had ridden capitalism to prosperity.
Although the issue of market economics vs. socialism had been settled by 1990, there remained competing models of capitalism. At the time, many thought the lesson of the 1980s had been that Japan's variant of capitalism was the best model and that other countries around the world should and would follow it. The model was said to include such institutions as: strategic trade policy, administrative guidance, relationship banking, life-time employment, collusive industrial groupings (keiretsu), and corporate governance that seeks to maximize the capital stock and long-term market share rather than short-term profits. (1)
As it turns out, there is indeed such a thing as accumulating too much capital. The Japanese model quickly lost its luster in the 1990s as the speculative bubbles of the late-1980s burst and the economy sunk into two decades of stagnation. From this, many drew the lesson that the U.S. variant of capitalism had been the best model all along. The touted institutions included American-style corporate governance: securities markets, rating agencies, accounting standards, generous compensation for CEOs (tied, for example, to options), and pursuit of profitability and share prices rather than sheer size. The United States began the 1990s with military triumph in Kuwait and ended it with the longest economic expansion in its history. Other countries should and would follow the American model.
The American model in turn lost its attractiveness in the decade of the 2000s. Its reputation for competence and integrity took some heavy blows, including the Enron-type accounting scandals of 2001, failing incomes among blue collar workers, the subprime mortgage crisis and ensuing recession, massive budget deficits, the occupation of Iraq and associated failures, and disasters in the Gulf of Mexico.
Where should countries look for a model, now? Some will respond, "China." It is undeniable that the rate of growth sustained by China over the last three decades is a miracle of history. But I find it difficult to think of many Chinese institutions that I would recommend that other countries try to copy [Williamson 2012]. Even today, China's status as the world's second largest economy owes more to the size of its population than to its GDP per capita, which has still to rise above the median level in global rankings.
We are accustomed to looking to large countries for innovations that push out the frontier of governance. But some smaller countries, and countries on the periphery, have experimented with policies and institutions that could usefully be adopted by others.
Small countries tend to be trade-dependent, and open to new ideas. Countries that are small, newly independent, remote, or emerging from a devastating war often find it easier politically to institute radical reforms than do the United States or other large, established countries. Not all the experiments will succeed. But some will. Those innovations that succeed may be worthy of emulation by others.
Let us begin with examples from countries that are small in size, but have relatively high per capita incomes.
2. Ideas from Small Advanced Economies
New Zealand adopted a comprehensive set of liberalization reforms, known as "Rogernomics," after Roger Douglas, a Minister of Finance, starting in 1984. Perhaps its Labor Party should even be given credit for pioneering the principle that left-of-center governments can sometimes achieve economic liberalization better than their right-of-center opponents [Nagel 1998]. New Zealand's monetary authorities pioneered inflation targeting in 1990, originally as part of a larger strategy of holding individual civil servants accountable for yearly goals. Canada in 1991 and then many other central banks over the subsequent two decades followed New Zealand in adopting inflation targeting.
Estonia led the way in simplifying its tax system by means of a successful flat tax in 1994, followed by other small countries in Central/Eastern Europe and elsewhere. (2) Switzerland in 2001 put into its constitution the "debt brake." This was not a rule that the actual budget be balanced, like the impractical Stability and Growth Pact of the euro countries, but rather a rule that the structurally adjusted budget be balanced [Danniger 2002]. Germany emulated Switzerland in 2009, by putting a similar debt brake into its constitution and would like the other 16 members of the eurozone to follow suit.
Ireland recognized the importance of foreign direct investment and encouraged it by instituting a low corporate tax rate. The strategy to become the Celtic Tiger succeeded--economic growth averaged in excess of 7 percent per annum between 1995 and 2007--though the economy entered an unsustainable bubble toward the end of this period.
Canada has shown how to run a crisis-free banking system. It is not by breaking up banks that are "too big to fail" into small bits. The Canadian system is concentrated in five large banks, which hold more than 80 percent of bank assets, but the authorities have never had to bail them out. Public policy in Ottawa does not seek artificially to increase the extent of owner-occupied housing by encouraging loans that the households may not be able to repay: mortgage interest is not tax deductible, a 20 percent down payment is standard (unless the borrower takes out insurance), and mortgages are "full recourse" loans (defaulting does not let the borrower off the hook). The result is that Canada achieves the same level of home ownership as the United States, but with far less leverage, fewer defaults, and no systemic crises [Perry 2010].
Sweden in 1992 showed how to move aggressively to rescue a banking system in crisis while yet taking steps so that the taxpayer eventually gets all or most of his money back [Dougherty 2008; Larsen and Giles 2009]. (3) This example helped inspire the U.S. government's redesign of the Troubled Asset Relief Program in early 2009.
More broadly, the Scandinavian countries, after deciding that they had swung too far in the high-spending socialist direction in the 1970s, made some adjustments in the 1990s [Aslund 2010; Becker, 2007; Borg 2010]. The "Nordic model" has by now shown that it is possible to combine a high level of social protection, social services, and corporatist labor relations with market economics, fiscal responsibility, and free trade. According to Anders Aslund [2010], Denmark was the pioneer in the 1980s, in which case we should call this the Scandinavian model, followed in the 1990s by Sweden under the prime ministership of Carl Bildt. High female participation in the labor force is one ingredient in the formula. Sweden's comprehensive school voucher system may be another.
All Articel 3
The concerns expressed by the U.S. electorate about the status of
manufacturing employment are not without factual basis. The loss in U.S.
manufacturing employment has been significant: since 2000, the U.S.
Bureau of Labor Statistics [2012] reports that more than 5.5 million
jobs had been lost through 2011. This manufacturing displacement has
resulted in painful employment transition for many Americans--especially
during the prolonged recession of the last few years. However, the
manufacturing sector has been making a surprising comeback and actually
added 109,000 jobs in 2010 following 12 straight years of declines, and
manufacturing companies added another 225,000 jobs in 2011. While real
GDP increased by only 1.7 percent in 2011, the manufacturing component
of U.S. industrial production grew at more than two times that rate (4.0
percent) during the same period.
The fact that the manufacturing sector is now being given credit as the "shining star" of the U.S. economic recovery provides some evidence counter to the common assumption that America's manufacturing sector is in a perpetual state of decline. In fact, the rebound in U.S. manufacturing output and employment over the last two years might be reflecting the initial effects of several favorable long-term factors that are expected to revitalize the domestic manufacturing sector in the near future. According to a recent report from the Boston Consulting Group [2011]:
At "The National Summit" convened by the Detroit Economic Club in June of 2009, some of the nation's business, government, and academic leaders met to create a consensus set of policy recommendations for increasing America's competitiveness in the four disciplines of technology, energy, environment, and manufacturing [National Summit 2009]. The final initiative, "America's To-Do List," released in December 2009, consists of 10 strategic initiatives, and includes: "Develop a national manufacturing strategy that re-establishes an environment for U.S. businesses to thrive and compete on a global basis" [National Summit 2009]. Such a national manufacturing strategy consists of, for example, an integrated set of tax, trade, education, labor, and business regulation policies that is designed to help strengthen the U.S. manufacturing sector and maintain its global leadership. "The United States today is alone among industrial powers in not having a strategy or even a procedure for thinking through what must be done when it comes to manufacturing," says Thomas A. Kochan, an economist at the Massachusetts Institute of Technology [Uchitelle 2011]. Over the last few years, a variety of U.S. industry associations, including the National Association of Manufacturers; an academic institution (the Industrial College of the Armed Forces); an industry-labor organization (the Alliance for American Manufacturing); as well as the Executive Office of the President, among others, have all proposed their own variants of a national manufacturing strategy. In 2010, the Democrat-controlled House of Representatives passed H.R. 4692. the "National Manufacturing Strategy Act," but this bill did not become law. This legislation included a primary charge that the President proposes a quadrennial "National Manufacturing Strategy."
The fact that the manufacturing sector is now being given credit as the "shining star" of the U.S. economic recovery provides some evidence counter to the common assumption that America's manufacturing sector is in a perpetual state of decline. In fact, the rebound in U.S. manufacturing output and employment over the last two years might be reflecting the initial effects of several favorable long-term factors that are expected to revitalize the domestic manufacturing sector in the near future. According to a recent report from the Boston Consulting Group [2011]:
Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world. We expect net labor costs for manufacturing in China and the United States to converge by around 2015. As a result of the changing economics, you're going to see aSome analysts have proclaimed that China has now surpassed the United States in manufacturing output in dollars [Yeebo 2011], and the most recent international data from the United Nations [2011] confirm the fact that China's manufacturing output of U.S.$1.922 trillion in 2010 was slightly ahead of the U.S.$1.855 trillion of manufacturing output produced in the United States. Although China may have displaced the United States as the world's largest manufacturing nation, the measured productivity of the average American manufacturing employee has increased significantly in recent years and exponentially surpasses that of his/her Chinese counterpart [Yeebo 2011]. Therefore, in terms of manufacturing output-per-worker, it is likely that the United States will remain among the world's most productive manufacturing economies for many decades to come. Nevertheless, while U.S manufacturing remains preeminent in the global economy, many critics believe the nation is overdue for a "national manufacturing strategy."
At "The National Summit" convened by the Detroit Economic Club in June of 2009, some of the nation's business, government, and academic leaders met to create a consensus set of policy recommendations for increasing America's competitiveness in the four disciplines of technology, energy, environment, and manufacturing [National Summit 2009]. The final initiative, "America's To-Do List," released in December 2009, consists of 10 strategic initiatives, and includes: "Develop a national manufacturing strategy that re-establishes an environment for U.S. businesses to thrive and compete on a global basis" [National Summit 2009]. Such a national manufacturing strategy consists of, for example, an integrated set of tax, trade, education, labor, and business regulation policies that is designed to help strengthen the U.S. manufacturing sector and maintain its global leadership. "The United States today is alone among industrial powers in not having a strategy or even a procedure for thinking through what must be done when it comes to manufacturing," says Thomas A. Kochan, an economist at the Massachusetts Institute of Technology [Uchitelle 2011]. Over the last few years, a variety of U.S. industry associations, including the National Association of Manufacturers; an academic institution (the Industrial College of the Armed Forces); an industry-labor organization (the Alliance for American Manufacturing); as well as the Executive Office of the President, among others, have all proposed their own variants of a national manufacturing strategy. In 2010, the Democrat-controlled House of Representatives passed H.R. 4692. the "National Manufacturing Strategy Act," but this bill did not become law. This legislation included a primary charge that the President proposes a quadrennial "National Manufacturing Strategy."
All Articel 2
Economic history shows us that there have been some well-defined
patterns in inflation and interest rates over the last 150 years. (1)
Indeed, David Hackett Fischer
[1996] extends this study back to 1224. Perhaps the most well-known
treatment of long-waves was the work of Nicolai Kondratieff [1925], who
suggested that there was a long-wave of about 50 years duration. His
work was never fully developed because Joseph Stalin
felt that it conflicted with Marxist doctrine and Kondratieff was sent
to Siberia in 1930 and was executed in 1938. However, the idea was taken
up by Joseph Schumpeter [1954] and by William Fellner
[1956]. They divided the long-wave into two phases--an upgrade and a
downgrade--and observed that business downturns were more severe and
recoveries weaker in downgrades. Professor Fellner felt that the concept
was useful even though he believed that long-waves could not be
extrapolated into the future with any precision.
In the spirit of that idea, my earlier paper [Synnott 1995] focused on the third phase of an idealized 56 year wave, from 1988 to 2002, as suggested by Figure 1. Using the historical experience of a previous "third phase," from 1876 to 1890, as a guide, 1 made some observations about likely financial and economic developments in future years. The next section of this paper reviews those projections in the light of what actually happened.
1. Review of Developments Since 1994
If the center line of Figure 1 is taken as the longrun average rate of inflation, the "third-phase" represents a period not only of slowing inflation but of low inflation or actual deflation. (This was particularly acute in Japan.) One might expect in this environment that corporate profitability would be under intense pressure. This was certainly true of the 1876-90 period, when virtually the entire American railroad industry became bankrupt and was reorganized by J.P. Morgan. Another severely affected industry was cotton textiles, as new technologies and high costs in New England led to a shift of the industry to the South.
Of course, declining agricultural prices and wholesale prices generally put great pressure on farmers and small businesses, leading to continuing political struggles in the latter part of the 19th century. Table 1 lists some characteristics of the Third Phase periods (1876-90, 1932-46 and 1988-2002) drawing heavily on the 1876 -90 experience as well as what we knew, in 1994 about our current period.
Table 1. Characteristics of the Third Phase
Downward pressure on prices
Many commodity prices below the cost of production
Corporate mergers, restructuring and bankruptcies
Commercial real estate--declining rents and values
Intense Credit Pressures
Rising and high debt burdens
Bank loan losses
Political Tensions
Zero-Sum Thinking
Pressures for income redistribution
Depression of spirit
Protectionism
Emergence of new engines of growth
New products and industries
Major infrastructure projects spurred by low long-term interest rates
What happened?
As anticipated in my 1995 paper, the Third Phase (1988-2002) proved exceptionally difficult. The savings and loan crisis in 1989, the Mexican peso crisis in 1995. the Asian financial crisis in 1997-98, the Long-Term Capital Management problem in 1998 (Lowenstein 2000), and the dot.com boom and bust in 1998-2002 roiled world financial markets and led the Federal Reserve (and the Bank of Japan) to pursue aggressively easy monetary policies. In the United States this monetary reflation led to a surge in house prices, a boom in housing construction, and a huge bad-credit expansion.
The conclusions of my 1995 paper (pages 15-16) mainly came true--particularly that U.S. economic growth was "likely to lag behind other centers--especially those in Southeast Asia." This period also saw "increased political turmoil in the industrialized world as restive electorates strive to find political solutions to high unemployment."
However, despite significant monetary stimulus, overall inflation in the United States and other industrialized countries remained low, and interest rates were much lower than expected.
What did not happen?
First, the federal government did not shift spending toward long-term investment. Rather the U.S. involvement in two costly and protracted wars has resulted in a crowding-out of productivity-enhancing investments in infrastructure. Second, the U.S. economy, following the collapse of the housing boom and the crisis in the financial system, has yet to get onto a sustainable growth path.
2. Lessons from the History of 1890-1904 (Phase 4)
One should have paid more attention to this period when thinking about the Fourth Phase of the Long Wave. The end of the 19th century saw the emergence of three new industrial powers: the United States, Germany, and Japan, boosting world economic growth but setting the stage for conflict with the old industrial powers--Britain and France. Today, we in the United States are seeing the emergence of China and India as major economies. Have we learned enough to avoid repeating the mistakes of the past?
In the United States, low prices for farmers and pressure on wages pitted debtors against creditors and led to political conflict over whether to stay on the Gold Standard. (William Jennings Bryan was the several-times Democratic candidate for President and is remembered for his "Cross of Gold" speech.) During the "Gay Nineties" there were three recessions and one serious financial crisis (in 1893). The crisis was resolved only by a huge goldloan to the U.S. government by the House of Morgan. While the public debate was largely about whether the U.S. dollar should be backed by gold or by silver, the real question was whether the United States would devalue with respect to the British pound, which was then defined in terms of gold. If we had devalued, European investors who had bought great quantities of bonds to finance American railroads and municipal improvements would have lost heavily. J.P. Morgan as the conduit for foreign capital would probably have had a very hard time attracting foreign investment to finance American industrialization.
Still, difficult as this period was in many ways, important new industries emerged--electric power, automobiles, chemicals, modern steel-making, for examples--and the individual railroad companies were combined into a modern efficient system. This in turn enabled the expansion of the cotton textile industry in the southern United States and the growth of a national market for goods.
Then the discovery of gold in Alaska and new mining techniques in South Africa led to a world-wide monetary reflation. Figure 2 shows that commodity prices rose and the overall wholesale price index was on a gently rising trend by the late 1890s and early 1900s.
Figure 3 shows a moving average rate of change in the Producer Price Index (formerly the wholesale price index) from 1862 to 2006. World War II, of course, caused a price surge that was out of synchronization with the other long-wave peaks.
Note that since 2002, wholesale price inflation has been on a gently rising trend. This, as will be seen later, is importantly related to a significant use in the prices of crude oil and a number of
In the spirit of that idea, my earlier paper [Synnott 1995] focused on the third phase of an idealized 56 year wave, from 1988 to 2002, as suggested by Figure 1. Using the historical experience of a previous "third phase," from 1876 to 1890, as a guide, 1 made some observations about likely financial and economic developments in future years. The next section of this paper reviews those projections in the light of what actually happened.
1. Review of Developments Since 1994
If the center line of Figure 1 is taken as the longrun average rate of inflation, the "third-phase" represents a period not only of slowing inflation but of low inflation or actual deflation. (This was particularly acute in Japan.) One might expect in this environment that corporate profitability would be under intense pressure. This was certainly true of the 1876-90 period, when virtually the entire American railroad industry became bankrupt and was reorganized by J.P. Morgan. Another severely affected industry was cotton textiles, as new technologies and high costs in New England led to a shift of the industry to the South.
Of course, declining agricultural prices and wholesale prices generally put great pressure on farmers and small businesses, leading to continuing political struggles in the latter part of the 19th century. Table 1 lists some characteristics of the Third Phase periods (1876-90, 1932-46 and 1988-2002) drawing heavily on the 1876 -90 experience as well as what we knew, in 1994 about our current period.
Table 1. Characteristics of the Third Phase
Downward pressure on prices
Many commodity prices below the cost of production
Corporate mergers, restructuring and bankruptcies
Commercial real estate--declining rents and values
Intense Credit Pressures
Rising and high debt burdens
Bank loan losses
Political Tensions
Zero-Sum Thinking
Pressures for income redistribution
Depression of spirit
Protectionism
Emergence of new engines of growth
New products and industries
Major infrastructure projects spurred by low long-term interest rates
What happened?
As anticipated in my 1995 paper, the Third Phase (1988-2002) proved exceptionally difficult. The savings and loan crisis in 1989, the Mexican peso crisis in 1995. the Asian financial crisis in 1997-98, the Long-Term Capital Management problem in 1998 (Lowenstein 2000), and the dot.com boom and bust in 1998-2002 roiled world financial markets and led the Federal Reserve (and the Bank of Japan) to pursue aggressively easy monetary policies. In the United States this monetary reflation led to a surge in house prices, a boom in housing construction, and a huge bad-credit expansion.
The conclusions of my 1995 paper (pages 15-16) mainly came true--particularly that U.S. economic growth was "likely to lag behind other centers--especially those in Southeast Asia." This period also saw "increased political turmoil in the industrialized world as restive electorates strive to find political solutions to high unemployment."
However, despite significant monetary stimulus, overall inflation in the United States and other industrialized countries remained low, and interest rates were much lower than expected.
What did not happen?
First, the federal government did not shift spending toward long-term investment. Rather the U.S. involvement in two costly and protracted wars has resulted in a crowding-out of productivity-enhancing investments in infrastructure. Second, the U.S. economy, following the collapse of the housing boom and the crisis in the financial system, has yet to get onto a sustainable growth path.
2. Lessons from the History of 1890-1904 (Phase 4)
One should have paid more attention to this period when thinking about the Fourth Phase of the Long Wave. The end of the 19th century saw the emergence of three new industrial powers: the United States, Germany, and Japan, boosting world economic growth but setting the stage for conflict with the old industrial powers--Britain and France. Today, we in the United States are seeing the emergence of China and India as major economies. Have we learned enough to avoid repeating the mistakes of the past?
In the United States, low prices for farmers and pressure on wages pitted debtors against creditors and led to political conflict over whether to stay on the Gold Standard. (William Jennings Bryan was the several-times Democratic candidate for President and is remembered for his "Cross of Gold" speech.) During the "Gay Nineties" there were three recessions and one serious financial crisis (in 1893). The crisis was resolved only by a huge goldloan to the U.S. government by the House of Morgan. While the public debate was largely about whether the U.S. dollar should be backed by gold or by silver, the real question was whether the United States would devalue with respect to the British pound, which was then defined in terms of gold. If we had devalued, European investors who had bought great quantities of bonds to finance American railroads and municipal improvements would have lost heavily. J.P. Morgan as the conduit for foreign capital would probably have had a very hard time attracting foreign investment to finance American industrialization.
Still, difficult as this period was in many ways, important new industries emerged--electric power, automobiles, chemicals, modern steel-making, for examples--and the individual railroad companies were combined into a modern efficient system. This in turn enabled the expansion of the cotton textile industry in the southern United States and the growth of a national market for goods.
Then the discovery of gold in Alaska and new mining techniques in South Africa led to a world-wide monetary reflation. Figure 2 shows that commodity prices rose and the overall wholesale price index was on a gently rising trend by the late 1890s and early 1900s.
Figure 3 shows a moving average rate of change in the Producer Price Index (formerly the wholesale price index) from 1862 to 2006. World War II, of course, caused a price surge that was out of synchronization with the other long-wave peaks.
Note that since 2002, wholesale price inflation has been on a gently rising trend. This, as will be seen later, is importantly related to a significant use in the prices of crude oil and a number of
All Articel 1
In this paper, ire study the time-varying total risk of value and
growth clocks. The objective is 10 investigate the contention that the
market factor's ability to explain the value premium is limited.
Inspired by Person and Harvey [1999], ire revisit the role of the market
beta in the presence of aggregate economic factors. We discuss the
incorporation of aggregate economic conditions in the context of
multifactor risk models and provide cross-sectional evidence on the
relationship between average returns and postranking betas for
book-lo-market BE/ME) sorted portfolios. We show that the ineffective
role of the market beta can be altered by incorporating aggregate
economic risk factors in the cross-sectional asset pricing tests of size
and BE/ME sorted portfolios. No previous study provides such a
decomposition of. the cross-sectional role of the market beta in the
presence of macroeconomic risk factors.
Business Economics (2012) 47, 104-118.
doi:10.1057/be.2012.6
Keywords: firm sire, book-to-market equity, macroeconomic risk factors, stock returns, value premium
The most basic prediction of the capital asset pricing model of Sharpe [1964], Lintner [1965], and Black [1972] (the SLB model) is that average stock returns are positively i elated to market betas. The finance community has conducted a large number of studies that do not support this central prediction of the SLB model and refer to them as asset pricing anomalies. (1) In the wake of the seminal work of Fama and French [1992] and Lakonishok and others [1994]. researchers have extensively used firm size (that is, market capitalization), book-to-market ratio (that is, the ratio of book equity (BE) to market equity (ME)), and other firm-level characteristics, in order to explain various anomalous cross-sectional patterns.
For example, it is widely recognized that portfolios of stocks with high BE/ME ratios--so-called value stockstend to have higher average returns than portfolios of stocks with low BE/ME ratios. or "growth" stocks [Chan and Lakonishok 2004]. The general consensus among financial economists is that a traditional market beta fails to explain any such existing anomalous patterns in average stock returns, and therefore some measure of risk related to financial performance of the firms that constitute the portfolio may complement the explanation.
Business Economics (2012) 47, 104-118.
doi:10.1057/be.2012.6
Keywords: firm sire, book-to-market equity, macroeconomic risk factors, stock returns, value premium
The most basic prediction of the capital asset pricing model of Sharpe [1964], Lintner [1965], and Black [1972] (the SLB model) is that average stock returns are positively i elated to market betas. The finance community has conducted a large number of studies that do not support this central prediction of the SLB model and refer to them as asset pricing anomalies. (1) In the wake of the seminal work of Fama and French [1992] and Lakonishok and others [1994]. researchers have extensively used firm size (that is, market capitalization), book-to-market ratio (that is, the ratio of book equity (BE) to market equity (ME)), and other firm-level characteristics, in order to explain various anomalous cross-sectional patterns.
For example, it is widely recognized that portfolios of stocks with high BE/ME ratios--so-called value stockstend to have higher average returns than portfolios of stocks with low BE/ME ratios. or "growth" stocks [Chan and Lakonishok 2004]. The general consensus among financial economists is that a traditional market beta fails to explain any such existing anomalous patterns in average stock returns, and therefore some measure of risk related to financial performance of the firms that constitute the portfolio may complement the explanation.
Rabu, 13 Juni 2012
ANEKA RESEP OBAT KUNO INSYA ALLAH YANG MUJARAB
Berpuluh - puluh bahkan ratusan tahun yang lalu nenek moyang kita telah mewarisi kepada kita resep membuat obat Tradisional yang ternyata sangat mujarab dan manjur khasiatnya untuk menjaga kesehatan kita agar tetap dalam kondisi yang prima, atau untuk mengobati tubuh kita,.... maklum dulu dokter jauh, malah dukunnya banyak.... hehehehe.....
Tradisi ini bermula dari kalangan Para Raja yang banyak mempunyai selir. Bagai mana seorang Raja bisa menggauli permaisuri dan puluhan selirnya cantik - cantik itu tanpa terganggu kesehatannya atau tanpa berkurang kekuatannya? Bagaimana cara permasuri dan selir - selir itu menjaga kesehatan maupun kecantikannya?
Seringkali pula obat - obatan moderen itu terbukti kemanjurannya, akan tetapi tidak terjangkau harganya! Padahal ada cara yang lebih mudah, murah dan praktis untuk mengobati tubuh kita!
Semoga tulisan ini Insya Allah mampu menjawab pertanyaan - pertanyaan di atas...
1.AGAR BUAH DADA MONTOK
Wanita yang sudah dewasa pasti mendambakan buah dadanya nampak montok. Lebih -lebih bagi ibu - ibu rumah tangga yang sering melahirkan, sebab orang tersebut buah dadanya sudah mengendor. Pokoknya lebih sering dia menyusui, akan lebih kendor payu daranya.
Untuk mengatasi hal tersebut diatas dapat anda lakukan dengan cara tradisioal. Cobalah ikuti petunjuk kami dibawah ini!!
Ambillah segelas susu encer atau susu sapi murni. Sediakan sepotong jahe, sebesar ibu jari saja. Bakarlah jahe dalam pemanggangan ( open ) sampai hangus, kemudian keprak dengan benda keras agar jahe menjadi gepeng.Masukan kedalam gelas yang sudah berisi susu. Diamkan kira - kira 1 jam, lalu minumlah.
Meminum susu campur jahe ini dilakukan setiap malam hari, niscaya tubuh sehat dan payudara bisa menjadi kencang dan montok.
2.SUPAYA RAPAT
Apabila anda sudah minum jamu galian rapet, tetapi hasilnya belum nampak dan tidk memuaskan hati, bisa mempergunakan ramuan ini.
Ambil buah pinang, iris halus - halis tipis, jemurlah irisan - irisan buah pinang itu sehingga kering, kemudian tumbuklah menjadi halus. Setiap malam hari sedulah setengah sendok teh bubuk pinang ini dengan satu cangkir air panas . Minumlah seduhan air pinang ini berikut ampasnya. Jika anda melakukannya dengan rajin selama satu minggu. Setiap malam minuman seduhan air pinang ini, maka anda akan memiliki kerapetan yang menakjubkan sekali, sehingga anda sangat dimanja dan disayang suami. Meminum dengan teratur 3 hari sekali seduhan bubuk pinang ini mempunyai pengaruh sangat baik untuk menjaga kelestarian kerapetan yang sudah anda miliki.
3.CARA MENYEBUHKAN BATU GINJAL
Jikalau kebetulan anda menderita sakit batu ginjal, yaitu kencing batu, maka dapat disembuhkan dengan meminum air perasan daun kumis kucing.
Ambillah dua puluh lembar daun kumis kucing, tumbuklah dan peraslah ambil airnya setengah gelas, minumlah setiap pagi. Hanya dalam satu minggu sakit batu itu sudah lenyap.
Tetapi jika anda tak tahan dengan rangsang bau daun kumis kucing, bisa anda rebus sebanyak 30 lembar kumis kucing. Pergunakan 2 gelas air dan biarkan mendidih sampai air godokan tinggal seengah gelas, baru diangakat dari api dan tuang kegelas. Minumlah air godokan tersebut. Hasilnya akan sama baiknya dengan perasan air kumis kucing.
3. CARA MENGOBATI BATUK.
Melalui pernapasan penularan batuk itu bisa terjadi. Batuk itu sangat menyiksa bagi sipenderita. Apa bila penyakit batuk Kingkhus yaitu batuk berkepanjangan. Kalau sipenderita sudah batuk - batuk, sunguh sangat kasihan sekali karena dapat menghentkan pernapasan. Bahkan ada yang sampai pingsan. Oleh karena itu berhati - hatilah jika anda bercakap - cakap dengan sipenderita Kingkhus, kemungkinan anda akan terserang juga kalau kondisi badan anda tidak benar - benar sehat.
Jika ada diantara anda atau mungkin anak anda yang terserang penyakit demikian, ikutilah resep ini.
Lobak unggu 2 batang, kemudian diparut, setelah itu diperas pakai kain. Ambil air perasan tadi dan campurkan sedikit garam. Aduklah sampai semacam ramuan. Minumlah 2 kali sehari yaitu pagi dan sore, sekali minum hanya seperemapat cangkir saja. Insya Allah batuk anda akan sembuh dalam waktu yang singkat (1 minggu)
Lakukan secara rutin agar penyakitnya hilang sama sekali.
......bersambung.......
Tradisi ini bermula dari kalangan Para Raja yang banyak mempunyai selir. Bagai mana seorang Raja bisa menggauli permaisuri dan puluhan selirnya cantik - cantik itu tanpa terganggu kesehatannya atau tanpa berkurang kekuatannya? Bagaimana cara permasuri dan selir - selir itu menjaga kesehatan maupun kecantikannya?
Seringkali pula obat - obatan moderen itu terbukti kemanjurannya, akan tetapi tidak terjangkau harganya! Padahal ada cara yang lebih mudah, murah dan praktis untuk mengobati tubuh kita!
Semoga tulisan ini Insya Allah mampu menjawab pertanyaan - pertanyaan di atas...
1.AGAR BUAH DADA MONTOK
Wanita yang sudah dewasa pasti mendambakan buah dadanya nampak montok. Lebih -lebih bagi ibu - ibu rumah tangga yang sering melahirkan, sebab orang tersebut buah dadanya sudah mengendor. Pokoknya lebih sering dia menyusui, akan lebih kendor payu daranya.
Untuk mengatasi hal tersebut diatas dapat anda lakukan dengan cara tradisioal. Cobalah ikuti petunjuk kami dibawah ini!!
Ambillah segelas susu encer atau susu sapi murni. Sediakan sepotong jahe, sebesar ibu jari saja. Bakarlah jahe dalam pemanggangan ( open ) sampai hangus, kemudian keprak dengan benda keras agar jahe menjadi gepeng.Masukan kedalam gelas yang sudah berisi susu. Diamkan kira - kira 1 jam, lalu minumlah.
Meminum susu campur jahe ini dilakukan setiap malam hari, niscaya tubuh sehat dan payudara bisa menjadi kencang dan montok.
2.SUPAYA RAPAT
Apabila anda sudah minum jamu galian rapet, tetapi hasilnya belum nampak dan tidk memuaskan hati, bisa mempergunakan ramuan ini.
Ambil buah pinang, iris halus - halis tipis, jemurlah irisan - irisan buah pinang itu sehingga kering, kemudian tumbuklah menjadi halus. Setiap malam hari sedulah setengah sendok teh bubuk pinang ini dengan satu cangkir air panas . Minumlah seduhan air pinang ini berikut ampasnya. Jika anda melakukannya dengan rajin selama satu minggu. Setiap malam minuman seduhan air pinang ini, maka anda akan memiliki kerapetan yang menakjubkan sekali, sehingga anda sangat dimanja dan disayang suami. Meminum dengan teratur 3 hari sekali seduhan bubuk pinang ini mempunyai pengaruh sangat baik untuk menjaga kelestarian kerapetan yang sudah anda miliki.
3.CARA MENYEBUHKAN BATU GINJAL
Jikalau kebetulan anda menderita sakit batu ginjal, yaitu kencing batu, maka dapat disembuhkan dengan meminum air perasan daun kumis kucing.
Ambillah dua puluh lembar daun kumis kucing, tumbuklah dan peraslah ambil airnya setengah gelas, minumlah setiap pagi. Hanya dalam satu minggu sakit batu itu sudah lenyap.
Tetapi jika anda tak tahan dengan rangsang bau daun kumis kucing, bisa anda rebus sebanyak 30 lembar kumis kucing. Pergunakan 2 gelas air dan biarkan mendidih sampai air godokan tinggal seengah gelas, baru diangakat dari api dan tuang kegelas. Minumlah air godokan tersebut. Hasilnya akan sama baiknya dengan perasan air kumis kucing.
3. CARA MENGOBATI BATUK.
Melalui pernapasan penularan batuk itu bisa terjadi. Batuk itu sangat menyiksa bagi sipenderita. Apa bila penyakit batuk Kingkhus yaitu batuk berkepanjangan. Kalau sipenderita sudah batuk - batuk, sunguh sangat kasihan sekali karena dapat menghentkan pernapasan. Bahkan ada yang sampai pingsan. Oleh karena itu berhati - hatilah jika anda bercakap - cakap dengan sipenderita Kingkhus, kemungkinan anda akan terserang juga kalau kondisi badan anda tidak benar - benar sehat.
Jika ada diantara anda atau mungkin anak anda yang terserang penyakit demikian, ikutilah resep ini.
Lobak unggu 2 batang, kemudian diparut, setelah itu diperas pakai kain. Ambil air perasan tadi dan campurkan sedikit garam. Aduklah sampai semacam ramuan. Minumlah 2 kali sehari yaitu pagi dan sore, sekali minum hanya seperemapat cangkir saja. Insya Allah batuk anda akan sembuh dalam waktu yang singkat (1 minggu)
Lakukan secara rutin agar penyakitnya hilang sama sekali.
......bersambung.......
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