June 1, 2010

How much trade has been lost in the Great Recession?

This post examines the latest OECD data, to see which economies have been most affected by “lost trade” during the Great Recession, especially as it is being rewritten in the light of eurozone/PIIGS crisis. It turns out that the nature of the exporting sector, and not the government’s finances, has determined a country’s trading success since 2008, with drug-exporting Ireland and Switzerland among the least affected, while Finland (ICT) and Japan (cars) find themselves among the most affected. Read more

Untangling Europe’s “web of debt”

This post examines the so-called “web of debt” across the EU, a graphic published in a recent New York Times article. By using gross debt statistics, and regardless of the borrower’s sector, the chart misses the obvious point that the markets are worried primarily about government debt. Indeed, the logic of the chart forces the authors into almost the completely wrong conclusion about the UK! Read more