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The Curious Case of the Romanian Yield Curve
The single biggest evidence in favour of a recession looming on the horizon, which is on the lips of every single pundit in advanced economies at present, is an atypical relationship between the yields of government bonds of different maturities, called the inversion of the curve. Short term government borrowing has become more expensive than long term government borrowing, which goes against basic tenets of economic theory such as time preference. This atypical relationship between long term and short term maturities is thought to predict a recession, because the only reason why borrowing would become more expensive in the short run than in the long run seems to be a flight on the part of creditors to safe, highly liquid and easy to exchange assets, which pushes up demand for the near-end of the curve, and a pessimistic growth outlook for the future, which pushes down demand for the far end of the curve. In the United States, the model-economy in this regard, the inversion of the curve has so far predicted every recession in the last decades. More
Smith, Hayek and the Virus: Entrepreneurial Responses in Times of Crisis
The world is struggling with despair in the face of an uncaring threat at the moment of writing these ideas: that word is not even worth mentioning any longer, since it is probably on the lips (and in the ears) of the majority of people worldwide. ‘Probably’ and ‘majority’ are only used here in order to respect a certain journalistic demeanor in writing which requires some precautionary – thus, not categorical – statements. Indeed, some children might not truly understand what goes on during the present time; so might some minority of people living in any given disconnected and remote settlement (if such disconnection still exists) and, unfortunately, so does some whimsical category of people – even grown-ups – who, although they have heard about the danger, behave as if they do not understand what is happening (which, again, with precautionary measures, might just be the case: their ignorant behavior simply denotes a lack – inability? – of understanding). Or, the more despicable, they did understand, but they simply want to make a spectacle of their ability to break the law (because, hey, isn’t it so, they are ‘smarter’, ‘wiser’, ‘brighter’). More
Think Fast: Interactive Filmmaking Puts Consumers in the Spotlight (Or Is It Just an Illusion?)
In 1967, the cinephiles attending that year’s edition of Expo Montreal were left with the experience of a lifetime, having been submerged into a new dimension of film-making. Radúz Činčera’s vision brought the audiences a new perspective, as his new movie, Kinoautomat, enabled the viewers to take a stand on the chance to direct the scenario by themselves. Thus, the trajectory of the film could be chosen and so, the viewers used voting buttons to decide the course of events in One Man and His House, a black and white satire on democracy written and directed by members of the Czech New Wave cinema (BOZAR 2020). A few generations later, as the technological revolution is unfolding, so does the shift towards a more digitized shape of the interactive movie. The now-renowned director’s daughter, Alena Činčerová, has carried on the work of her father, having restored and adapted the voting system by making it wireless, thus allowing any intrigued viewer to choose his own plot from the comfort of his home. More
The Romanian Leu, Koruna, Zloty and Forint in Pandemic: A Comparison in Terms of Stability and Its Effects
The Romanian leu was much more stable during the pandemic than the currencies of Central European countries with a similar exchange rate regime – the Czech Republic, Poland and Hungary. Data published by the National Bank of Romania shows a much lower devaluation of our national currency against the euro, of only 1.95% between January and October, well below the levels recorded by Czech koruna (-7.38%), Polish zloty (-6.44%) or Hungarian forint (-7.78%). More
Invitation to the European Resource Bank Meeting
Economic think tanks, entrepreneurs, institutes, and intellectuals assemble annually at the European Resource Bank meeting to discuss the challenges to the free market, individual liberty, and free enterprise facing Europe and the world. This year the event is in Prague, Czech Republic, and will be an exciting three day conference from 13 April through 15 April, 2018. It will be hosted in cooperation with the CERGE-EI Foundation and will take place at the Center for Economic Research and Graduate Education – Economics Institute. More
Not Too Young to Run
Leadership is influence, while influence is quality and substance. Looking at the age reduction bill, and how that will reshape Nigeria’s political space, Nigerians would need to ask themselves, is the plan to kick out the old people because they are outdated, and replace them with the young ones because they are perceived to have the capacity to do better? More
The Market Economy – Between Self-Testability and State Intervention
In principle, a market economy is understood as that institutional structure of a society which allows the self-regulation of the economic system. It should be noted that the freedom of the market is not sufficient to either ensure or guarantee such a self-regulation. Despite the fundamentalism of the libertarians, there are many cases (not accidentally, but necessarily) when the free market fails to self-regulate. I want to insist on the idea that such a structural incapacity should not be interpreted from a moral point of view, but objectively (in such a perspective, the so-called market failures are well known). I do not discuss here the issue of the free market failures, but a larger issue: could we really speak about an area of social (or economic) activity where the state is “allowed” to normatively intervene and, correlatively, about a “sacred” area of the social (or economic) activity where the state is “not allowed” to normatively intervene? More
Drifting Away
Summers in Germany are usually temperate. The humid winds from the West and from the North keep temperatures at a decent average, letting people enjoy sunny, but not torrid days, while also safeguarding some vital sales of the traditional beer. Away from the proverbial workaholism, Germans can also find their ways for letting off steam. Some of them do it in the ‘Biergartens’ of the ‘Vaterland’, while most of the others jump on the plane to Mallorca to work on a tan which is unavailable back home. “Little Germany”, as Mallorca has come to be known, offers cheese cubes, roast pork (to put it ‘simply’: “Schweinebraten”) or apple salads next to traditional paellas in what has become a ‘saxon-iberic’ mix meant at attracting tourists. More
Nudges – The Paradigm of the Oriented Free Choice
Referring to the extremes of economic behavior we can say that they are: a) the imperative norm and b) the absolute autonomy (we refer here to the individual freedom, which does not take into account the free choice of others). Focusing on the concept of freedom, it represents, according to Jonge (in his book “Rethinking Rational Choice Theory”), the autonomy of desires and not freedom of action. In Rawls’ opinion, freedom is first in the hierarchy of interests, higher interests becoming normative. More
A Strategy of Subversion
Half a century ago the German sociologist Helmut Schelsky succinctly dissected the political strategy of left-wing radicals in West Germany and the West generally. His essay, “The New Strategy of Revolution,” remains one of the best summaries of an ongoing strategy of cultural subversion.Directed towards the “conquest of the system,” the revolutionary strategy depicted by Schelsky, which was inspired by the Italian communist Antonio Gramsci and implemented by Rudi Dutschke, is premised on destroying the most significant features of political democracy. It bids to root out the fundamental political and social ideals and the corresponding patterns of life of the major groups within the system by discrediting the values, intellectual outlook, and institutional foundations of these groups, their ideals, and even the most ordinary interactions of their members. A useful comparison may be drawn with what Thomas Farr calls “China’s Second Cultural Revolution,” where Xi Jinping’s government controls the commanding heights and is endeavoring to introduce a utilitarian, soft-power “social credit” system to fine-tune its control. More
Making History While Snacking: Microwave Meets Marketplace
World War II, going on between 1939 and 1945, was one of the bloodiest confrontations in the world. It cannot be overstated how much this conflict changed the course of history, for better (if anything good can be related to wars) or worse. For instance, many of our modern inventions directly originate in the war period. More
Democracy at Play – or at Risk – in America
In democratic societies, elections are determined by the vote of the people. The democratic process in the United States elected President Trump in 2016. Four years later, after all legal votes are counted and verified, the same process may require that he peacefully transfer that power to someone else. Clearly, from now until the inauguration on January 20, 2021 it will take many state election procedures and court battles in key battleground states to clear up all uncertainties about this election’s popular vote. The democratic process relies not only on the belief of the citizens in it, but also upon their patience with procedures that are comprehensive and time-consuming. Accordingly, President Trump might have jumped the gun when he claimed, “If you count the legal votes, I easily win”. More
