Has austerity failed? In the sense of expansionary fiscal contraction, it has. Expansionary fiscal contraction, in short, suggests that government contraction will immediately expand the private sector. That particular interpretation of fiscal austerity has clearly failed to bear out in countries under crisis. It is like the argument that says reducing taxes will increase government […]

Does anybody know why the leading indicator went up in October? I see the money supply went up, which means demand for money went up, which in turn suggests there were increase in economic activities. But why?

There are always victims in an economic recession. It can push individuals into desperation and force them potentially to do something that they would not otherwise do. It can turn the man on the streets into a criminal. There is a relationship between economic recessions and unemployment rates and there is a relationship between unemployment […]

There have been talks of recession hitting the United States again. Extremely shocking manufacturing data from the US today is probably partly fueling the talks. Although prediction is a risky game, there are various indicators one can use to gauge the likelihood of a recession. One of them is the US treasury yield curve. An inverted yield […]

For some economists, such as Prescott (1996), the renewed interest in growth over the last 20 years stems from their belief that business cycle fluctuations ”˜are not costly to society’ and that it is more important for economists to worry about ”˜increasing the rate of increase in economy-wide productivity and not smoothing business fluctuations’. This […]

The Department of Statistics releases the Industrial Production Index today: Sectors Index October 2009 % Changes Year-on-Year % Changes Month-on-Month IPI 106.5 0.7 5.7 Mining index 96.4 -2.7 2.3 Manufacturing index 109.9 1.0 7.0 Electricity index 123.1 13.4 7.7 The important column is the year-on-year one. The Industrial Production Index (IPI) in October 2009 posted […]

[2078] Of a good sign?

I should really be at University Library right now but I just could not resist blogging about this. The latest Industrial Production Index produced by the Department of Statistics has it that electricity output increased and more importantly, it increased based on year-on-year basis in July 2009. This means, electricity output has been increasing on […]

I am holding the view that the RM67 billion government spending-based fiscal stimulus as announced will not be helpful. The market will show a swing independently of spending. The swing is already happening in spite the fact that government spending has been insignificant so far. Furthermore, the magnitude of government spending is pale in comparison […]

[2008] Of it is a race, then

The federal government has set a timeline: IPOH, June 13 (Bernama) — The impact of the first and second stimulus packages totalling RM67 billion announced by the government, can only be seen in the third and fourth quarters of this year, said Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah. He said the ministries […]

Whatever the results may be for the gross domestic product growth rate for the first quarter of the year, let us be clear about one thing. The two fiscal stimulus packages have only insignificant impact, if not at all, to Malaysian economy in that period. Any effort to paint the stimulus packages as having helped […]

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