Labour Share of GDP and the Balassa-Samuelson Effect
- Date: 11/12/2015
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- Andrew Bloomfield, CFA
The labour share of GDP appears to be an important catalyst in the workings of the Balassa-Samuelson effect. Understanding it can allow us to better infer currency valuations and the rate at which productivity growth translates into exchange rate appreciation. The Balassa Samuelson effect postulates that productivity varies more by….
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Swiss Interest Rates: Lower for Longer ?
- Date: 07/12/2015
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- Andrew Bloomfield, CFA
Has the SNB reached the Zero Lower Bound? After last week’s ECB deposit rate cut, we assess the likelihood of further accommodative monetary policy in Switzerland. By applying a Taylor Rule approach to reveal the SNB’s own estimate of the neutral real interest rate, we estimate that there is indeed….
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Japan’s Current Account: Out of the Red, Safely into the Black?
- Date: 03/11/2015
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- Andrew Bloomfield, CFA
A combination of lower oil prices and the weak Yen have helped restore the trade balance to health but a naïve scenario analysis suggests that the trade balance is still subject to uncertainty from energy price and exchange rate dynamics. Worries may eventually shift from energy issues to saving rates….
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Asian “Currency Manipulation” : Mainly a US Concern ?
- Date: 29/10/2015
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- Andrew Bloomfield, CFA
The US has had a long standing concern about what it perceives to be excessive “currency manipulation” on the part of some countries, especially in Asia. This concern is primarily driven by the large and persistent US current account deficit, which will necessitate significant relative currency adjustments for it to….
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