Category Archives: Uncategorized

Rethinking competitiveness: The global value chain revolution | vox

I posted this originally in 2013, it is still very current.

Source: Rethinking competitiveness: The global value chain revolution | vox

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Finnish Independence Day – What Finland means to me

Today Finland turns 98 years old as an independent state. I don’t want to write about this week’s upheaval in labour market relations, because that is a topic for more serious thoughts. I just want to make one comment: given the European Monetary Union and its currency, and the rules and regulations setting strict limits to budgetary freedom of the Finnish government – the rules that have come from Brussels (with the approval of the Finnish Finance Minister of course) – one must really ask: is Finland an independent state? Is the Finnish parliament really (as in effectively) the supreme controlling body? These are more or less rhetorical questions and I leave further discussion for another time.

So, to the real topic: what has Finland meant for me personally? I first came to Finland in 2002 (internship at the Finnish Forest Industries Federation) and I did part of my Master’s thesis writing at the Labour Institute for Economic Research (Palkansaajien tutkimuslaitos). After I moved permanently to Finland on December 8, 2003, I was unemployed in Helsinki for a while before I found a job as a sales assistent for the German market at Marja Kurki Oy. I started working on my dissertation in 2006 and then I also moved to Turku. I got married and founded a family. Basically since 2006 I have been at the University of Turku, in various positions and with various funding.

Coming from the Netherlands, Finland has meant to me first and foremost space and nature, both of which are scarce in the Netherlands. Along the way I learnt a lot about picking mushrooms and going to sauna – and I suppose I am nearly fluent in Finnish nowadays.

Finland has also meant efficient bureaucracy to me. Coming from the Netherlands, the KELA-system is supremely easy to navigate (although I know of course that this is not always true). In any case, everything from dealing with social security to paying taxes has been very easy in my view.

Finland also has shown that because it is a small country population-wise, it is very homogeneous. In the Netherlands I don’t know of products that are likely to be literally in every home, such as Marimekko Unikko, Aalto-vases and other Iittala products, Moccamaster coffee machines (which are actually Dutch I think), Arabia Teema -plates and mugs, Hackman cutlery etc etc. They are nice and functional but it is quite amazing that there are so many products which are kind of socially obligatory to own.

One big asset is also the Finnish day-care and schooling system (all the way to the universities). I do wonder to what extent critical thinking, creativity and healthy disregard for authority are part of the school system, but it seems that it is very efficient in teaching skills. The context of this remark is that I was in a Montessori-school, where at least the latter two issues are quite prominent. At the secondary school though, creativity was “killed” due to not so good art teachers. Critical thinking was prominant in civics, history and economic classes.

But maybe interestingly enough, I think the thing that matters most for me in Finland is its music scene. Finland is small but there are so many good musicians (although less in the pop scene I dare say). It is obvious that Sibelius is a towering figure, but I personally like the works of Einojuhani Rautavaara a lot, since he frequently included e.g. bird song in his works. (e.g. this one). Finland has a very active and productive heavy metal scene, where maybe Nightwish is the name most well-known (now with a Dutch singer!) and Children of Bodom is the most influential music-wise. My personal favourite (for all kinds of reasons) is Sentenced, e.g the  instrumental song Kaamos. In the jazz world (where I include improvisational music more widely) there are too many names to mention: Juhani Aaltonen, Mikko Innanen, Raoul Björkenheim (Blixt, Krakatau), Iiro Rantala, and many others, also in the experimental folk scene. Also in the visual arts there are many important figures, but I am less familiar with those and music is my love in any case.

So, happy Independence day!

Nominal Unit Labour Costs: a crooked macro indicator

I find this debunking of the use of NULC fascinating.

Real-World Economics Review Blog

The post 2008 decline of Macro Nominal Unit Labour Costs (NULC) in Ireland was not caused by austerity of wage restraint. It was caused by the housing bust (source: Eurostat, CBS). Which can’t be explained by neoclassical macro models. But which can be explained by simple arithmetic.

NULC

The bust led to the almost complete (from the top of my head: -93% at one point!) demise of ‘high NULC’ housing construction, which caused a decline of average macro NULC in Ireland – even when average wages did not change…. But this is not the only problem

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Are the European authorities destroying the Greek economy in order to “save” it?

A rather damning comment on European policies regarding Greece.

Real-World Economics Review Blog

from Mark Weisbrot

There is a tense standoff right now between the Greek government and the European authorities – sometimes known as the Troika because it includes the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF). ECB President Mario Draghi denied this week that his institution is trying to blackmail the Greek government.

But blackmail is actually an understatement of what the ECB and its European partners are doing to Greece. It has become increasingly clear that they are trying to harm the Greek economy in order to increase pressure on the new Greek government to agree to their demands. 

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Miksi Saksaa kunnioitetaan?

‘Miksi ihmeessä siis Suomessa Saksan linjaan suhtaudutaan niin tavattoman mielistelevästi?’ – Niinpä.

Raha ja talous

saksaViime päivinä pankkien analyytikot ja pääkirjoitustoimittajat ovat esittäneet analyysejä, joissa on toisteltu Kreikan ja Syrizan hävinneen velkaneuvotteluiden ensimmäisen osan. Arvioiden taustalla sykkivää voitonriemua on vain vaivoin onnistuttu peittelemään.

Näiden analyysien osuvuus on jo sinänsä kyseenalainen, koska emme toistaiseksi tiedä, kuinka paljon Kreikan uusi hallitus joutuu tekemään sellaisia reformeja, joihin se ei olisi ollut itse valmis. Vielä kiinnostavampaa on kuitenkin se, että Kreikan oletetusta tappiosta innostuneet tahot näyttävät asettuneen tukevasti Saksan puolelle euroalueen tulevaisuutta koskevissa kiistoissa.

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Greece does battle with creationist economics: can Germany be brought into the 21st Century?

We do live in a very absurd world. I wish articles like these would pay more attention to the role of Finland in this whole farce. Small country, yes, but with a hard line.

Real-World Economics Review Blog

from Dean Baker

Europeans have been amused in recent weeks by the difficulty that Republican presidentialcandidates have with the theory of evolution. But these cognitive problems will only matter if one of these people gets into the White House and still finds himself unable to distinguish myth from reality. By contrast, Europe is already suffering enormous pain because the people setting economic policy prefer morality tales to economic reality.

This is the story of the confrontation between Greece and the leadership of the European Union. The northern European countries, most importantly Germany, insist on punishing Greece as a profligate spender. They insist on massive debt payments from Greece to the European Union and other official creditors to make up for excessive borrowing in prior years.

The current program requires that Greece’s tax revenues exceed non-interest government spending by 4.0 percent of GDP, the equivalent of $720 billion a year…

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Dear Greek, take the Euronotes and run

I first though this was implausible, but have seen other posts noting that the ECB ‘lifted the waiver’ for Cypriotic bonds in 2012-2013 before shutting Cyprus out, and according to another blog the ECB has used this measure against Greece in 2012 when negotiations got tough. I hope the ECB is not doing another ‘Cyprus’ because then it will have lost all of its credibility and the belief that it negotiates in good faith.

Real-World Economics Review Blog

Update (20:56 CET): Rumor has it that the ECB has 59,5 billion in Emergency Liquidity Assitance available. But, to be credible, it should be willing to provide backing for every single Greek deposit Euro.

The ECB is preparing a ‘Cyprus’ for Greece. So, dear Greek, exchange your deposit money for cash.

1) According to the ECB the European system of central banks still guarantees the 1:1 exchange rate of Greek bank deposit money and Cash. But the Eurosystem is preparing for a ‘Cyprus scenario’, i.e. it wants to have the possibility to renege on its promise of a guaranteed 1:1 exchange rate between Euro notes and Greek deposit money: the first line of funding of Greek banks has been cut loose  (emphasis added)

4 February 2015 – Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations

  • ECB’s Governing Council lifts current waiver of minimum credit rating requirements…

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