Fight against corona: chancellery wants regional differences

No broad relaxation, but greater regional differences in the fight against corona – that is the course of the federal government. NRW Prime Minister Laschet is promoting relaxation and pointing out damage to the measures.

The federal government does not expect a broad and uniform relaxation of the corona measures. This emerges from an interim balance of the previous restrictions by Chancellery Minister Helge Braun, which was sent to the MPs of the grand coalition last Friday and from which the news agency dpa quoted.

Accordingly, it says in the letter that when reviewing the measures with the federal states "it must also be taken into account that the epidemic does not spread evenly in Germany, but that the situation may vary from region to region". This could mean "that restrictions in certain regions must be maintained or tightened again after loosening them in the meantime," continues Braun. In order to avoid overloading the health system in the long term, it is "too early" to lift the contact restrictions..

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The saga of icesave a new cepr policy insight

Icelandic banks started experiencing increasing problems raising funds in international capital markets in 2006 and hit on the thought of establishing Internet banks in Europe. The European financial passport made that simple to accomplish, and the rating agencies favoured the move, see e.g. the Moody’s (2006) report.

As I explain in greater depth in CEPR Policy Insight No. 44, there are essentially two ways a bank can do that, by a branch or subsidiary. Landsbanki opted to create branches, beneath the name of Icesave, supervised and insured from Iceland. They offered above-market interest levels, starting in October 2006, eventually amassing £4.5 billion in the united kingdom. This may have already been done initially with the encouragement of the united kingdom FSA, being concerned about the funding position of Landsbanki.

In 2008, the FSA became concerned and applied increasing pressure on Landsbanki to limit deposits, to which it responded by needs to raise deposits in holland in-may 2008, eventually collecting €1.7 billion there.

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The roots of the italian stagnation

Competitiveness measures the cost of foreign goods in accordance with that of domestic goods. Different measures of competitiveness (or its reciprocal, the true effective exchange rates, see Chinn 2006 for more) depend on consumer prices or on unit labour costs, and use weights produced from trade shares to compute a ‘foreign goods’ basket. The machine labour costs measure is specially interesting because it isn’t suffering from firms’ pricing policies which might vary as time passes and markets.

The machine labour costs-based indexes for Italy (green line) and Germany (blue) are shown in Figure 1. Between your first quarter of 2001 and the last of 2011, unit labour cost in Italy rose by 23 percentage points a lot more than in its trading partners (a genuine appreciation), while unit labour costs in Germany declined by 9.7 percentage points (a genuine depreciation). What explains the huge rise in the Italian relative unit labour costs?

Figure 1 . Unit labour cost-based real effective exchange rates

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The royalty of cap madness

These numbers are striking, but are representative? Focusing on how much bad press is generated by data on dooH niboR schemes, the European Commission long resisted releasing the numbers for the EU all together. Former Agricultural Commissioner Franz Fischler released detailed data for 2001 that presents CAP payments by farm size, where size is measured by farm income. It confirms the skewed-ness of CAP payments for the EU15:

  • The gigantic farms take into account only 0.2% of most EU farms; the common payment to these farms is €780,000 each year.
  • The 1.5% biggest farms get 27% of the amount of money; the payment-per-farm averaged over-all farms in this group is €70,000 each year.
  • The most notable 6% of the farms by size get half the amount of money (53%); the payment-per-farm averaged over-all farms in this group is €30,000 each year.
  • The 52% smallest farms share only 4% of the CAP money included in this; the payment-per-farm averaged over-all farms in this group is €425 each year.
  • The Fischler data allows someone to generate similar figures for each EU15 Member State (see my online essay for details).

It really is an Orwellian world in which a policy that taxes all European to finance transfers to rich landowners is widely seen as socially progressive. The CAP’s digressive features ought to be reformed within the newly expanded EU’s budget plan and the Central Europeans will be the obvious ones to push because of this. I estimate that the EU’s CAP budget could possibly be cut by €7 billion without touching CAP payments to 90% of EU farms. That one reform could settle the complete budget issue – the brand new members can keep their structural funds, the Brits can keep their rebate and almost all French farmers can keep their CAP payments. Of course, that is a pipe dream. It could entail taking €7 billion a year from the hands of Europe’s best lobbyist with perhaps a tenfold effect on their wealth – an unlikely event by any measure. But as Freedom-of-Information acts pry loose detailed data for all EU members, the tangle of financial and political-financial linkages that protect payments to Europe’s richest landowners in the name of social solidarity should come to light. The kids of Robespierre will revolt. EU leaders should hope that occurs after they have gone office. For EU voters – and their representatives in the EU Parliament – it cannot come quickly enough.

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The roots of shadow banking

The ‘shadow banking’ sector can be an ill-defined financial segment that expands and contracts credit beyond your regulatory perimeter.

  • It had been critical in the build-up and demise of the credit boom.

While much reduced since 2008, in america its size still exceeded bank assets in 2011.

  • What have we learned because the crisis on shadow banking?

By definition, shadow banking isn’t an accurate category. In this column, I concentrate on financial intermediaries that take credit risk.

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The roots of health inequality and the value of intra-family expertise

The roots of health inequality and the worthiness of intra-family expertise

Yiqun Chen, Petra Persson, Maria Polyakova

Poorer folks have worse health at birth, are sicker in adulthood, and die younger than richer people. Aside from socioeconomic status, contact with informal health expertise could also affect health. Using data from Sweden, this column examines whether having a doctor in the family impacts health. It concludes that differences in contact with informal health expertise can take into account a number of the observed patterns of health inequality, even within an environment with universal medical health insurance and equal formal usage of healthcare.

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The role of trade in adaptation to climate change

The role of trade in adaptation to climate change

Christophe Gouel, David Laborde

Given our collective failure to mitigate greenhouse gas emissions, the world will need to adapt to a particular degree of climate change. This might imply that as climate change affects crops’ yield potential, new patterns of comparative advantage, and therefore new trade flows, will emerge. This column examines the need for the marketplace adaptations in mediating welfare losses in the agricultural sector. The findings suggest a big role for international trade: when adjustments in trade flows are constrained, global welfare losses from climate change increase by 76%.

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The role of trade credit financing in international trade

The role of trade credit financing in international trade

Katharina Eck, Martina Engemann, Monika Schnitzer

Credits extended bilaterally between firms, so called trade credits, are particularly expensive yet many firms utilize it, specifically for international transactions. This column argues that such cash-in-advance financing serves as a credible signal of quality. Data from a distinctive survey of German firms show that it fosters export participation specifically for firms that generally have the best difficulties in entering foreign markets.

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The roles of economic integration and monetary policy in currency unions

In here are some, we discuss both of these issues.

The left panel of Figure 1 shows that there are only not a lot of forces pulling the various countries of a currency union towards one another. This could be the case, nonetheless it does not necessarily must be the case. Economic integration plays a significant role here. The more economically integrated the countries are, that’s, the more open they are one to the other and the more they trade with each other, the stronger is this pulling force. That is intuitive. If a country within an economic depression is economically very integrated with other countries in the currency union whose economies are doing better, the weaker economy should be able to export too much to the stronger economies (due to gaining competitiveness in the downturn), which stabilises the economy. Vice versa, economies in a boom begins importing more from other countries, which dampens the boom. That is stabilising for the currency union all together.

The blue lines in Figure 2 show economic instability in a currency union (CU) as a function of the parameter γ, which may be the parameter representing how economically integrated the countries are (the red line may be the comparison value of a homogeneous economy, and therefore there is a unitary country of similar size as the complete currency union, abbreviated by EC). It really is seen that for a sufficiently advanced of economic integration, economic behaviour in the currency union is stable (instability in this graph is thought as observing deviations greater than 10% from the steady state).

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Fight against money laundering: scholz defends cash transactions

Scholz: Not so many. Neither do we either – at least I suspect. But therefore it is still right that we try to create a structure in which we can monitor this. We do that with the things that are happening now. This is a great step forward after many have longed for. Now it is coming about and for now I am happy.

daily topics: Do you have specific information about the money launderers? How many terrorists and mafiosi are here in the market?

Scholz: One can only appreciate that. But there is reason to be very serious here. And so I hope that public coverage of the law can help prevent too much resistance to legislation. Because some have already criticized that the law is far too strict. I think it’s spot on.

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