Nouriel Roubini on Italian Political Risk

 New York University economics professor Nouriel Roubini comments on the state of the U.S. economy from Cernobbio, Italy.








 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Fed's Tools to Deal with the Bubbles are not going to work

“driven by zero policy rates in advanced economies,” with QE continuing in the Eurozone and Japan, the authorities were bent on increasing values in homes and stocks, but this can lead to asset bubbles, “and the tools to deal with these bubbles are not going to work.”




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

The Recovery is going to be Subpar

“The recovery is going to be subpar,” “I see a one percent growth in the economy in the next few years. There will also be 11 percent unemployment next year and the recovery is going to be slow. It’s going to feel like a recession even when it ends.” Roubini told CNBC .





 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Long-term Interest Rates are going to go Higher

"It's not going to be a significant surprise. As the economy recovers, as inflation goes higher, gradually long-term interest rates are going to go higher,"





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

The Dollar appreciated much faster than anyone expected

Until recently, U.S. policy makers were not overly concerned about the dollar’s strength, because America’s growth prospects were stronger than in Europe and Japan. Indeed, at the beginning of the year, there was hope that U.S. domestic demand would be strong enough this year to support GDP growth of close to 3%, despite the stronger dollar. Lower oil prices and job creation, it was thought, would boost disposable income and consumption. Capital spending (outside the energy sector) and residential investment would strengthen as growth accelerated.

But things look different today, and U.S. officials’ exchange-rate jitters are becoming increasingly pronounced. The dollar appreciated much faster than anyone expected; and, as data for the first quarter of 2015 suggest, the impact on net exports, inflation, and growth has been larger and more rapid than that implied by policy makers’ statistical models. Moreover, strong domestic demand has failed to materialize; consumption growth was weak in the first quarter, and capital spending and residential investment were even weaker. -- in Project-Syndicate







Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Booming Art Market suggests Speculative Bubble

Nearly 180 million dollars paid at auction for a Picasso painting a collector. A new auction record. And for some, another indication that we are dealing with a speculative bubble, and perhaps also with the peak of the current cycle share. source >>>



Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Nouriel Roubini on Italian political risk and emerging mark

 Sept. 6 (Bloomberg) -- New York University economics professor Nouriel Roubini comments on the state of the U.S. economy from Cernobbio, Italy. He speaks ...

Martin Baily: President Obama and Congress should quietly plan for another European financial crisis, and ensure that after the changes in U.S. financial regulations following the last crisis,...




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Boom Bubbles & Busts are normal part of Markets

What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.







 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Very volatile Environment for Bond Yields in the U.S. and Europe

"It's not going to be a significant surprise. As the economy recovers, as inflation goes higher, gradually long-term interest rates are going to go higher," said Roubini of Global Economics.


"In the short run, lack of market liquidity, lack of market makers can imply that when there are some surprises—economic and otherwise—or inflation, then you're in a very volatile environment for bond yields in the U.S. and Europe."





 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Asset Reflation can become Asset Inflation

 “Soon enough asset reflation can become asset inflation, asset inflation can become asset frothiness and eventually you have asset and credit bubbles.”




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Bond Investors shouldn't expect a Rate Riot or Rate Rage

"It's not going to be a significant surprise. As the economy recovers, as inflation goes higher, gradually long-term interest rates are going to go higher," said the co-founder and chairman of Roubini Global Economics, also known as "Dr. Doom." That said, he told CNBC's "Closing Bell" there could still be some volatility in the short term. "In the short run, lack of market liquidity, lack of market makers can imply that when there are some surprises—economic and otherwise—or inflation, then you're in a very volatile environment for bond yields in the U.S. and Europe."


 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Expensive Art Custom-Made for Money Laundering

"some people use art, especially expensive art, as a form of money laundering." Dr. Doom" said at the Milken Conference in Los Angeles





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini Warning : Art is used for Money Laundering

The world of beautiful art can get ugly. Buying and selling top art is a business with lots of secrecy and little regulation. That makes it a possible destination for people trying to avoid paying taxes or even launder money. "There is a lot of behavior that is shady at best," economist Nouriel Roubini told CNNMoney's Cristina Alesci at the Milken Global Conference in Los Angeles.
"Some people use art, especially expensive art, as a form of money laundering," said Roubini,
 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on The Greece's Debt Crisis and The EU

Nouriel Roubini, chairman of Roubini Global Economics LLC and a professor at New York University's Stern School of Business, talks about Greece's debt crisis, the global economy and financial markets. Roubini spoke Thursday with Bloomberg Television's Tom Keene.







 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Dr. Nouriel Roubini on the role of women in the Business World

Dr. Doom Nouriel Roubini warns on economic effects of gender inequality
“The case for having a stronger role of women in the business world is compelling,” Roubini said during a speech at The Next Billion: Women and the Economy of the Future conference. “Lots of work has been done, but more needs to be done.”




“Women should lean it,” Roubini said, borrowing a phrase from the title of the popular book by Sheryl Sandberg, “but governments and corporations and businesses should also lean in to make sure that there is greater opportunity to empower women in the business world.”
Roubini listed six main areas where women face challenges in the global economy:
1.     The female labour force participation rate is lower than men, which impacts both productivity and spending power.
2.     More women are becoming entrepreneurs, but there are still too many barriers, including lack of access to financing due in part to discriminatory lenders, as well as too few mentors.
3.     There are too few women on corporate boards and in executive roles. Studies have shown more women in these leadership positions help to improve the bottom line. “Supply isn’t static. It’s dynamic,” says Roubini. “You can do plenty to recruit, to nurture, to mentor, [and] retain women,” to become leaders.
4.     The “persistence of a significant gender pay gap” both in developed and emerging economies.
5.     Women influence roughly 80 per cent of consumer purchasing decisions, so should be more involved in the global economy.
6.     Women need more support to be able to balance work and family commitments.
“There has been progress in the direction of gender equality, but it’s still very limited,” said Roubini, pointing to the World Economic Forum’s Global Gender Gap Report 2014.
The report shows the global gender gap for economic participation and opportunity is 60 per cent, up a mere 4 per cent from 56 per cent in 2006.
“Based on this trajectory, with all else remaining equal, it will take 81 years for the world to close this gap completely,” the report states.
While the trends are positive, “they are too slow,” Roubini says. “So much more can be done.”


Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Everyone loses in a Currency War by Nouriel Roubini

IN A world of weak domestic demand in many advanced economies and emerging markets, policy makers have been tempted to boost economic growth and employment by going for export-led growth. This requires a weak currency and conventional and unconventional monetary policies to bring about the required depreciation.

Since the beginning of the year, more than 20 central banks have eased monetary policy, led by the European Central Bank (ECB) and the Bank of Japan (BOJ).

In the eurozone, countries on the periphery needed currency weakness to reduce their external deficits and jump-start growth.

But the euro weakness triggered by quantitative easing has further boosted Germany’s current-account surplus, which was already a whopping 8% of gross domestic product (GDP) last year.

With external surpluses also rising in other countries of the eurozone core, the monetary union’s overall imbalance is large and growing.

http://www.bdlive.co.za/opinion/2015/05/07/everyone-loses-in-a-currency-war


 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini: The New Normal for Oil Is Around $70 Per Barrel

Roubini Global Economics co-founder Nouriel Roubini comments on oil prices during an interview with Bloomberg's Stephanie Ruhle and Erik Schatzker at the Milken Global Conference in Beverly Hills, CA.




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Currency Frictions can lead eventually to Trade Frictions

Currency frictions can lead eventually to trade frictions, and currency wars can lead to trade wars. And that could spell trouble for the US as it tries to conclude the mega-regional Trans-Pacific Partnership. Uncertainty about whether the Obama administration can marshal enough votes in Congress to ratify the TPP has now been compounded by proposed legislation that would impose tariff duties on countries that engage in “currency manipulation.” If such a link between trade and currency policy were forced into the TPP, the Asian participants would refuse to join.

The world would be better off if most governments pursued policies that boosted growth through domestic demand, rather than beggar-thy-neighbor export measures. But that would require them to rely less on monetary policy and more on appropriate fiscal policies (such as higher spending on productive infrastructure). Even income policies that lift wages, and hence labor income and consumption, are a better source of domestic growth than currency depreciations (which depress real wages).  - in Project Syndicate





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Grexit an accident waiting to happen

“The risk of an unraveling occurs if there is an accident, and Greece decides to go into arrears in their payments to the IMF,” Nouriel Roubini, chairman of Roubini Global Economics, said on Bloomberg Television on April 28. “The Greeks know that if an accident occurs it’s the beginning of potentially Grexit.”




 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on Baltimore Riots : People are Desperate

"The solution can't just be to send more police in the streets or the National Guard. People are desperate. We have to deal with this issue of poverty, of unemployment and economic opportunities," economist Nouriel Roubini told CNN of the Baltimore's steep income inequality.



Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

The Dollar Joins the Currency Wars

NEW YORK – In a world of weak domestic demand in many advanced economies and emerging markets, policymakers have been tempted to boost economic growth and employment by going for export led-growth. This requires a weak currency and conventional and unconventional monetary policies to bring about the required depreciation.

Since the beginning of the year, more than 20 central banks around the world have eased monetary policy, following the lead of the European Central Bank and the Bank of Japan. In the eurozone, countries on the periphery needed currency weakness to reduce their external deficits and jump-start growth. But the euro weakness triggered by quantitative easing has further boosted Germany’s current-account surplus, which was already‎ a whopping 8% of GDP last year. With external surpluses also rising in other countries of the eurozone core, the monetary union’s overall imbalance is large and growing.

In Japan, quantitative easing was the first “arrow” of “Abenomics,” Prime Minister Shinzo Abe’s reform program. Its launch has sharply weakened the yen and is now leading to rising trade surpluses.

The upward pressure on the US dollar from the embrace of quantitative easing by the ECB and the BOJ has been sharp. The dollar has also strengthened against the currencies of advanced-country commodity exporters, like Australia and Canada, and those of many emerging markets. For these countries, falling oil and commodity prices have triggered currency depreciations that are helping to shield growth and jobs from the effects of lower exports.
http://www.project-syndicate.org/commentary/dollar-joins-currency-wars-by-nouriel-roubini-2015-05






 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini: Baltimore Riots are a symptom of income inequality

The riots in Baltimore this week may have been triggered by the death of Freddie Gray, but their roots are found in the widening gap between America's rich and poor.

That's the message from Nouriel Roubini, the economist who in 2005 correctly predicted the housing crisis and ensuing financial crash in 2008.

"We've seen race riots in parts of the United States because lots of people are poor and angry and resentful," Roubini told CNNMoney's Cristina Alesci at the Milken Global Conference in Los Angeles




 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on recent Rioting in America

What do the Baltimore riots have to do with income inequality in America? Economist Nouriel Roubini breaks it down. ?





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini: Why Greece Will Become More Compromising

Roubini Global Economics co-founder Nouriel Roubini comments on the Greek debt crisis during an interview with Bloomberg's Stephanie Ruhle and Erik Schatzker at the Milken Global Conference in Beverly Hills, CA. (Source: Bloomberg)





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

We live in a world of too much Supply and little Demand

Central banks have had no choice but to approve -and should maintain - heterodox policies given the weakness of the recovery.

Who could think that six years after the global financial crisis, most advanced economies continue floating in a soup of letters (ZIRP, QE, CE, FG, NDR and U-FX Int) of unorthodox monetary policies?

read more (in Spanish) at : http://gestion.pe/economia/roubini-vivimos-mundo-demasiada-oferta-y-poca-demanda-2130059


 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini wants to go back to Glass-Steagall

Roubini: The Volcker Rule goes in the right direction, but in my view, the model of the financial supermarket where within one institution you have commercial banking, investment banking, underwriting of securities, market-making and dealing, proprietary trading, hedge fund activity, private equity activity, asset management, insurance—this model has been a disaster. The institution becomes too big to fail and too big to manage.

It also creates massive conflicts of interest. If you look at the cases against Goldman Sachs and Morgan Stanley, leaving aside whether there was any fraud or illegal activity—that's for a court to decide—there is still a fundamental conflict of interest. These institutions are always on every side of every deal. That's an inherent conflict of interest that cannot be addressed with Chinese walls [internal company barriers between different aspects of its business].

There are no benefits from these economies of scale and scope, as we've seen from the disasters at Citigroup, AIG and others. And there are massive conflicts of interest. So I would separate all of these financial businesses under separate institutions, and I would go back to the kind of restrictions that we had under Glass-Steagall.






Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

The too Big to Fail are also too Big to be Saved

Nouriel Roubini: In my view, the financial reform bill goes in the right direction in terms of what needs to be done, but it doesn't go far enough in a number of dimensions. My view is that if banks are too big to fail, using higher capital charges and an insolvency regime is not going to work. If they're too big to fail, they're just too big, and they should be broken up.

If they're too big to fail, they're also becoming too big to be saved, too big to be bailed out, and too big to be managed. No CEO can monitor the activities of thousands of separate profit and loss statements, and the activities of thousands of different bankers and traders. So that's one dimension. We must be capable of going beyond the Volcker Rule, which is essentially Glass-Steagall-Lite. We need to go all the way and implement the kind of restrictions between commercial banking and investment banking that existed under Glass-Steagall





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on China's Slowdown

But a hard landing becomes more likely as the stimulus fades, nonperforming loans rise, the investment bust accelerates, and the problem of rolling over the debts of provincial governments and their special investment vehicles can no longer be papered over. - in Irish Times



 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Software Innovation & 3D Printing Technologies

Software innovation, together with 3D printing technologies, will open the door to those workers who are educated enough to participate; for everyone else, however, it may feel as though the revolution is happening elsewhere. Indeed, the factory of the future may be 1,000 robots and one worker manning them. Even the shop floor can be swept better and cheaper by a Roomba robot than by any worker. - in project syndicate




 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on Pseudo-Economists & Market Hacks

Writing in Project Syndicate, NYU professor Nouriel Roubini says that the doomsayers and worry warts of these policies are merely "pseudo economists and market hacks" that have "barely any knowledge of basic economics."

"This assortment of 'Austrian' economists, radical monetarists, gold bugs, and Bitcoin fanatics has repeatedly warned that such a massive increase in global liquidity would lead to hyperinflation, the US dollar’s collapse, sky-high gold prices, and the eventual demise of fiat currencies at the hands of digital krypto-currency counterparts," Roubini writes.

Yet these views have still shaped public debate on the matter, and so Roubini feels compelled to explain just what these folks got wrong.




 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Grexit Very Unlikely says Roubini

Nouriel Roubini, chairman of Roubini Global Economics LLC and a professor at New York University's Stern School of Business, talks about Greece's debt crisis, the global economy and financial markets. Roubini spoke Thursday with Bloomberg Television's Tom Keene. (Source: Bloomberg)







Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini : Probability of Greece Euro Exit Very Limited

 

Nouriel Roubini, chairman of Roubini Global Economics LLC and a professor at New York University's Stern School of Business, talks about Greece's debt crisis, the global economy and financial markets. Roubini spoke Thursday with Bloomberg Television's Tom Keene. (Source: Bloomberg)

 Watch the interview >>>>>>>>


 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

What Japan Abe needs to do

In Japan, Prime Minister Shinzo Abe's government has made significant headway in overcoming almost two decades of deflation, thanks to monetary easing and fiscal expansion.

The main uncertainties stem from the coming increase in the consumption tax and slow implementation of the third "arrow" of "Abenomics," namely structural reforms and trade liberalization.





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

European Economy on The Rebound?

Roubini Global Economics Founder Nouriel Roubini argues Europe is beginning to see a cyclical recovery and explains why Japanese equities will outperform the U.S. Watch Maria Bartiromo talk about World Markets on Opening Bell.





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini - Why The Philippines deserves an Investment Grade

Nouriel Roubini details 'shopping list' for Philippines , Renowned economist Nouriel Roubini offers an 8-point 'shopping list' for the Philippines in its pursuit of high, sustainable economic growth THE LIST. Nouriel Roubini tells audience at the Philippine Investment Summit 2013 in Manila why the Philippines deserves investment grade.





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Gold does not provide any Income

"Unlike other assets, gold does not provide any income. Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation. Now that the global economy is recovering, other assets – equities or even revived real estate – thus provide higher returns." - in A World Of Ideas








Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini : QE not Enough for Eurozone

Europe is finally going to get its own massive monetary stimulus. But that doesn't mean it can save the region's economy. A flurry of media reports suggested Mario Draghi, president of the European Central Bank, will unveil a program Thursday to buy bonds worth 50 billion euros a month, starting in March. That could inject more than one trillion euros ($1.2 trillion) into the eurozone economy by the end of 2016.

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Housing Bubbles -- Signs of Frothiness

Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.

Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates. Given anemic GDP growth, high unemployment, and low inflation, the wall of liquidity generated by conventional and unconventional monetary easing is driving up asset prices, starting with home prices.




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini: When to Expect the Next Big Market Crash

 April 22 (Bloomberg) -- New York University economics professor Nouriel Roubini talks about the outlook for the global economy and the impact of central bank policy and austerity programs on growth. Roubini spoke with Bloomberg's Sara Eisen April 19 on the sidelines of the IMF and World Bank meetings in Washington. (Source: Bloomberg)





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini with Maria Bartiromo talk about World Markets

Roubini : European Economy on the rebound?   Roubini Global Economics Founder Nouriel Roubini argues Europe is beginning to see a cyclical recovery and explains why Japanese equities will outperform the U.S.
Watch Maria Bartiromo talk about World Markets on Opening Bel







Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Asset Reflation could become Asset Inflation

Asset reflation could become asset inflation with another credit bubble leading to a bond crash, Nouriel warned. However, while that was a risk, Roubini described how a ‘new mediocre’ era of sub-par economic growth in the world was broadly positive for bonds as interest rates and inflation were likely to stay lower for longer.







 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Germany cannot stand idly by in the spending splurge

by Nouriel Roubini for Gulf News :

The latest economic data from the Eurozone suggests that recovery may be at hand. What is driving the upturn? What obstacles does it face? And what can be done to sustain it?

The immediate causes of recovery are not difficult to discern. Last year, the Eurozone was on the verge of a double-dip recession. When it recently fell into technical deflation, the European Central Bank (ECB) finally pulled the trigger on aggressive easing and launched a combination of quantitative easing (including sovereign-bond purchases) and negative policy rates.

The financial impact was immediate: in anticipation of monetary easing, and after it began, the euro fell sharply, bond yields in the Eurozone’s core and periphery fell to very low levels, and stock markets started to rally robustly.

This, together with the sharp fall in oil prices, boosted economic growth.
read more @ http://gulfnews.com/business/analysis/germany-cannot-stand-idly-by-in-the-spending-splurge-1.1487538








 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini on China's Economic hard Landing

Dr. Roubini (two): China's economic hard landing ?





 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Eurozone Recovery ? - no one should bet the farm

If the eurozone unemployment rate is still too high by the end of 2016, annual inflation remains well below the ECB’s 2% target, and fiscal policies and structural reforms exert a short-term drag on economic growth, the only game in town may be continued quantitative easing. But the ongoing weakness of the euro – fed by such policies – is fueling growth in the eurozone’s current-account surplus.

Indeed, as the euro weakens, the periphery countries’ external accounts have swung from deficit to balance and, increasingly, to surplus. Germany and the eurozone core were already running large surpluses; in the absence of policies to boost domestic demand, those surpluses have simply risen further. Thus, the ECB’s monetary policy will take on an increasingly beggar-thy-neighbor cast, leading to trade and currency tensions with the United States and other trade partners.

To avoid this outcome, Germany needs to adopt policies – fiscal stimulus, higher spending on infrastructure and public investment, and more rapid wage growth – that would boost domestic spending and reduce the country’s external surplus. Unless, and until, Germany moves in this direction, no one should bet the farm on a more robust and sustained eurozone recovery.

Read more at http://www.project-syndicate.org/commentary/eurozone-fragile-recovery-by-nouriel-roubini-2015-03#O7MCBJ4WaBTG24kh.99






Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Eurozone Growth has Resumed,but a more sustained recovery still faces many challenges

As a result of these factors, eurozone growth has resumed, and eurozone equities have recently outperformed US equities. The weakening of the euro and the ECB’s aggressive measures may even stop the deflationary pressure later this year.

But a more robust and sustained recovery still faces many challenges. For starters, political risks could derail progress. Greece, one hopes, will remain in the eurozone. But the difficult negotiations between the Syriza-led government and the “troika” (the ECB, the European Commission, and the International Monetary Fund) could cause an unintended accident – call it a “Grexident” – if an agreement on funding the country is not reached in the next few weeks

Read more at http://www.project-syndicate.org/commentary/eurozone-fragile-recovery-by-nouriel-roubini-2015-03#JYYxM8kBBSKeE3Pm.99






Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

EU Snail Pace Structural Reforms holding back Potential Growth

“Germany needs to adopt policies – fiscal stimulus, higher spending on infrastructure and public investment, and more rapid wage growth – that would boost domestic spending and reduce the country’s external surplus,” he said.

“Unless, and until, Germany moves in this direction, no one should bet the farm on a more robust and sustained eurozone recovery.”

To go to the original article, click here.




Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

The ECB's Easing of Credit is effectively Subsidizing Bank Lending

Other factors are helping, too. The ECB’s easing of credit is effectively subsidizing bank lending. The fiscal drag from austerity will be smaller this year, as the European Commission becomes more lenient. And the start of a banking union also helps; following the latest stress tests and asset quality review, banks have greater liquidity and more capital to lend to the private sector.

As a result of these factors, eurozone growth has resumed, and eurozone equities have recently outperformed US equities. The weakening of the euro and the ECB’s aggressive measures may even stop the deflationary pressure later this year.

But a more robust and sustained recovery still faces many challenges. For starters, political risks could derail progress. Greece, one hopes, will remain in the eurozone. But the difficult negotiations between the Syriza-led government and the “troika” (the ECB, the European Commission, and the International Monetary Fund) could cause an unintended accident – call it a “Grexident” – if an agreement on funding the country is not reached in the next few weeks.

Moreover, Podemos, a leftist party in the Syriza mold, could come to power in Spain. Populist anti-euro parties of the right and the left are challenging Italian Prime Minister Matteo Renzi. And Marine Le Pen of the far-right National Front is polling well ahead of the 2017 French presidential election.

Read more at http://www.project-syndicate.org/commentary/eurozone-fragile-recovery-by-nouriel-roubini-2015-03#4dUlA6XRwFzvzzCM.99





Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Signs of life in The Eurozone

By Nouriel Roubini

The latest economic data from the eurozone suggest that recovery may be at hand. What is driving the upturn? What obstacles does it face? And what can be done to sustain it?

The immediate causes of recovery are not difficult to discern. Last year, the eurozone was on the verge of a double-dip recession. When it recently fell into technical deflation, the European Central Bank finally pulled the trigger on aggressive easing and launched a combination of quantitative easing (including sovereign-bond purchases) and negative policy rates.

The financial impact was immediate: in anticipation of monetary easing, and after it began, the euro fell sharply, bond yields in the eurozone’s core and periphery fell to very low levels, and stock markets started to rally robustly. This, together with the sharp fall in oil prices, boosted economic growth.

Other factors are helping, too. The ECB’s easing of credit is effectively subsidizing bank lending. The fiscal drag from austerity will be smaller this year, as the European Commission becomes more lenient. And the start of a banking union also helps; following the latest stress tests and asset quality review, banks have greater liquidity and more capital to lend to the private sector.

As a result of these factors, eurozone growth has resumed, and eurozone equities have recently outperformed US equities. The weakening of the euro and the ECB’s aggressive measures may even stop the deflationary pressure later this year.

But a more robust and sustained recovery still faces many challenges. For starters, political risks could derail progress. Greece, one hopes, will remain in the eurozone. But the difficult negotiations between the Syriza-led government and the “troika” (the ECB the European Commission, and the International Monetary Fund) could cause an unintended accident – call it a “Grexident” – if an agreement on funding the country is not reached in the next few weeks.

Moreover, Podemos, a leftist party in the Syriza mold, could come to power in Spain. Populist anti-euro parties of the right and the left are challenging Italian Prime Minister Matteo Renzi. And Marine Le Pen of the far-right National Front is polling well ahead of the 2017 French presidential election.

Slow job creation and income growth may continue to fuel the populist backlash against austerity and reform. Even the ECB estimates that the eurozone unemployment rate will still be 9.9% in 2017 – well above the 7.2% average prior to the global financial crisis seven years ago. And austerity and reform fatigue in the eurozone periphery has been matched by bailout fatigue in the core, boosting support for a range of anti-euro parties in Germany, the Netherlands and Finland.

A second obstacle to sustained recovery is the eurozone’s bad neighborhood. Russia is becoming more assertive and aggressive in Ukraine, the Baltics, and even the Balkans (while sanctions against Russia have hurt many European economies). And the Middle East is burning just next door: the recent terrorist attacks in Paris and Copenhagen, and against foreign tourists in Tunisia, remind Europe that hundreds of homegrown jihadists could return from fighting in Syria, Iraq, or elsewhere and launch further attacks.

Third, while ECB policies keep borrowing costs lower, private and public debt in the periphery countries, as a share of GDP, is high and still rising, because the denominator of the debt ratio – nominal GDP – is barely increasing. Thus, debt sustainability will remain an issue for these economies over the medium term.

Fourth, fiscal policy remains contractionary, because Germany continues to reject a growing chorus of advice that it should undertake a short-term stimulus. Thus, higher German spending will not offset the impact of additional austerity in the periphery or the significant shortfall expected for the three-year, €300 billion ($325 billion) investment plan unveiled by European Commission President Jean-Claude Juncker.

Fifth, structural reforms are still occurring at a snail’s pace, holding back potential growth. And, while structural reforms are necessary, some measures – for example, labor-market liberalization and pension overhauls – may boost the eurozone’s savings rate and thus weaken aggregate demand further (as occurred in Germany following its structural reforms a decade ago).

Finally, Europe’s monetary union remains incomplete. Its long-term viability requires the development over time of a full banking union, fiscal union, economic union, and eventually political union. But the process of further European integration has stalled.

If the eurozone unemployment rate is still too high by the end of 2016, annual inflation remains well below the ECB’s 2% target, and fiscal policies and structural reforms exert a short-term drag on economic growth, the only game in town may be continued quantitative easing. But the ongoing weakness of the euro – fed by such policies – is fueling growth in the eurozone’s current-account surplus.

Indeed, as the euro weakens, the periphery countries’ external accounts have swung from deficit to balance and, increasingly, to surplus. Germany and the eurozone core were already running large surpluses; in the absence of policies to boost domestic demand, those surpluses have simply risen further. Thus, the ECB’s monetary policy will take on an increasingly beggar-thy-neighbor cast, leading to trade and currency tensions with the United States and other trade partners.

To avoid this outcome, Germany needs to adopt policies – fiscal stimulus, higher spending on infrastructure and public investment, and more rapid wage growth – that would boost domestic spending and reduce the country’s external surplus. Unless, and until, Germany moves in this direction, no one should bet the farm on a more robust and sustained eurozone recovery.

Copyright: Project Syndicate







Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini : Signs of Life in the Eurozone

NEW YORK – The latest economic data from the eurozone suggest that recovery may be at hand. What is driving the upturn? What obstacles does it face? And what can be done to sustain it?

The immediate causes of recovery are not difficult to discern. Last year, the eurozone was on the verge of a double-dip recession. When it recently fell into technical deflation, the European Central Bank finally pulled the trigger on aggressive easing and launched a combination of quantitative easing (including sovereign-bond purchases) and negative policy rates.

The financial impact was immediate: in anticipation of monetary easing, and after it began, the euro fell sharply, bond yields in the eurozone’s core and periphery fell to very low levels, and stock markets started to rally robustly. This, together with the sharp fall in oil prices, boosted economic growth.

Other factors are helping, too. The ECB’s easing of credit is effectively subsidizing bank lending. The fiscal drag from austerity will be smaller this year, as the European Commission becomes more lenient. And the start of a banking union also helps; following the latest stress tests and asset quality review, banks have greater liquidity and more capital to lend to the private sector.
read more @ http://www.project-syndicate.org/commentary/eurozone-fragile-recovery-by-nouriel-roubini-2015-03


Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

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Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics