Author Archives: Edward Hugh

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

A Face That Launched A Thousand Ships

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An unlikely Helen, Spain’s deputy prime minister, Maria Teresa Fernandez de la Vega, that’s for sure. Yet outside a few thousand years difference in timing the two seem to have been cut out for one and the same the same historical role: urging the boats to go back. Indeed the only thing which really separates them might be the magnitude of the problem to hand, since Coalición Canaria president Paulino Rivero suggested this weekend that what might be involved were not a mere 1,000 ships, but anything between 10,000 and 15,000 currently being built along the Mauritanian and Senegalese coastlines.

Joking aside this post is about tragedy, a human tragedy. According to the NGOs who are involved some 3,000 people have already died in attempting to make the hazardous crossing, a crossing which was actually completed over this weekend by a record 1,200 people in 36 hours.

As well as tragedy the post is also about folly, the folly of those economists who think low fertility isn’t an important economic issue. This opinion was recently expressed by respected US economist Greg Mankiw, (on his blog) who described the very idea that it might be as ‘wrong headed’ and, to boot, suggested that a poll of the world’s top ten economists would draw a blank on names who thought that low fertility was among Europe’s major economic problems. I am sure Mankiw is right about the poll, and this is why I use the expression ‘folly’. So what do I mean?
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In Search of Lost Time

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Time is a fascinating concept. Today we learn that, according to the Oxford English Dictionary, ‘time’ is top noun in use terms in the English language. Interesting statistic that, especially as time is such an integral component in our decision making process.

Also in today’s news we learn from Dr. Kunio Kitamura of the Japan Family Planning Association that “”Japanese people simply aren’t having sex”.

Now why should these two little details be interesting, and what connection could there be between them?
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The Catalan Statute

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Well here in sunny Catalonia we don’t have a fooball team of our own right now, so maybe that’s why we chose this precise moment to hold a referendum about our future.

Now the first thing to get straight is that despite all the direst predictions, Spain is still here the morning after the big vote, and in one piece, I just touched the floor to prove it. Indeed 11 footballers (some of them Catalan) will also come to earth on German turf tonight just to graphically illustrate the point. So it does seem that some of the concerns raised in the coments to this post were well wide of the mark.

Some issues do, however, remain.
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French Shop As Germans Save

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This just about sums it up:

French shoppers, scarcely distracted by riots in March, increased spending significantly in the first quarter of this year, with purchases of household durable goods soaring, official data showed on Friday. The robust spending growth is almost certain to have helped eurozone economic growth rebound in the first quarter of 2006.

Meanwhile:

the outlook for German consumer spending remains poor – highlighting the underlying weakness of the eurozone economy…..German households have been hit by falling real wages and house prices. Germans have also continued to save at a furious pace because of their fears about the future of the welfare state.

Hollowing Out In Moldova?

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The Moldovan population has fallen from more than 4.3 million people in 1989, to just 3.4 million in 2004 excluding the separatist Transnistria area in the east, rising to a bit under 3.8 million if one includes Transnistria’s resident population. Randy McDonald asks:

Moldova’s example demonstrates that, when economic conditions become sufficiently bad and/or when the benefits accuring to emigrants become sufficiently great, regional and national populations can contract at speeds more reminiscent of wartime depopulation than anything else. Where Moldova goes now, perhaps any number of relatively small and relatively impoverished states (Serbia, Paraguay, Cuba, Laos, Lesotho) in the future, perhaps–who knows?–even much larger countries.

Don’t miss this important post.

Too Old To Work For Ericsson?

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Well if you’re over 35 you may be. That’s the implication of today’s decision to offer redundancy to workers in the 35 – 50 age group:

Ericsson, the telecoms equipment maker, on Monday offered a voluntary redundancy package to up to 1,000 of its Sweden-based employees between the ages of 35 and 50. The unprecedented move is designed to make way for younger workers.

This fits in with the findings of ongoing research by Italian economist Francesco Daveri. See especially working paper 309: “Age, technology and labour costs”, which examines the case of Finland and especially Nokia (available on this page, abstract pasted at the bottom of this post).

Details below the fold:
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Gazprom, Iran and EU Energy

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Well just in case the Iranian situation wasn’t difficult enough in and of itself (or here), there are always some around who will seek to take short-term benefit from the temporary embarassment of others. So this week, as June delivery oil prices spiked up around the 74 dollar a barrel mark, it became just a little bit clearer who might be doing what.
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Sego On The Up And UP?

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Ségolène Royal’s ratings in the opinion polls are certainly on the up-and-up. According to a poll, published in Le Figaro yesterday she won the backing of 34 per cent of respondents (against 30% for Sarkozy). It seems like there will be a battle for the Presidency in 2007 after all, and that Emmanuel may have been unduly pessimistic about her chances. The FT has the story here. However:

In spite of her popularity, Ms Royal faces ferocious opposition from rival Socialist candidates – possibly including her partner, François Hollande, the party secretary – to clinch her party’s nomination.

Ms Royal’s popularity appears partly due to her novelty as a serious female candidate – the former environment minister appeared on the cover of five magazines last week – as well as her maverick campaigning style. Ms Royal has launched a website called desirsdavenir.org (desires for the future), encouraging the public to contribute to a “participative forum” and promising to adopt the best ideas.

Her critics have argued that her “wiki-programme” has only exposed the hollowness of her ideology but it has certainly aroused the interest of France’s internet users.

Italian Elections, Now The Serious Part Starts

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At the time of writing Berlusconi is still filibustering, but it seems to be simply that, rather than any serious attempt to derail the outcome of the electoral process. Meantime the financial markets are adapting themselves to the new reality.

I too am gearing myself up for what looks like being a very bumpy ride ahead. I have dusted off some of the rust from an old weblog I used to maintain – Italian Economy Watch. Many of the posts I have been putting up are simply recycled versions of material which has appeared here at Afoe, but it does at least serve the useful purpose of keeping all the posts tidily in one place. Recent posts include The Future Of Italy’s Young, Addio, Dolce Vita, Or Twilight of the Idols?, Italy Had Zero GDP Growth In 2005, Les Jeux Sont Faits, and The Italian Government Has A New Crisis.

But talking of new crisises, I fear Italy has a pretty old one (puns intended), and the ratings agencies are only just starting to get their minds round the problem.
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Italian Elections

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Well it’s not official yet, but the first exit poll has Berlusconi trailing:

An exit poll Monday showed conservative Italian Premier Silvio Berlusconi trailing center-left challenger Romano Prodi in parliamentary elections. The Nexus poll indicated that Prodi’s coalition received between 50 and 54 percent of the vote in both the upper and lower chambers of parliament, while Berlusconi’s coalition received 45-49 percent.

Obviously this is the ‘early days’ stage, and we shouldn’t jump to conclusions. I will be updating as the day (or night) wears on.

Update I: It’s looking firmer for Prodi. More exit polls are coming up with similar results. For example the Piepoli Institute’s exit polls for Sky TG24 have given the Prodi coalition 52 percent to 47 percent for Berlusconi’s centre-right and for both houses.

Update II. Tobias has now posted more extensively. First thing Tuesday morning the outcome is still in doubt, and those who were sceptical about the early exit polls were right to be so. Prodi is now claiming victory, but this is being challenged vigorously by the Berlusconi camp. The margin is wafer thin for the lower house (the Chamber of Deputies, or ‘Camera’), with Prodi’s having 49.80 per cent of the vote as compared to 49.73 per cent for Berlusconi’s House of Freedoms (a difference of a mere 25,000 votes). Naturally calls for a recount abound. The position of the Senate is still in doubt. There is currently a one seat difference between the camps (in favour of Berlusconi) but six more seats based on overseas votes are still to be allocated.

Wikipedia have a substantial entry on the elections themselves, and another on the Italian parliament, which may prove useful in understanding things if the final out come is ultimately a ‘hung’ parliament.