For another example of really bad analysis from the IMF (2011), see:
“ Raising the Consumption Tax in Japan: Why, When, How?”
http://www.imf.org/external/pubs/ft/sdn/2011/sdn1113.pdfSome quotes from the summary:
“ [IMF] Staff analysis reported here suggests that a gradual increase in the consumption tax [in Japan] dfrom 5 percent to 15 percent over several years—a level that is still modest by OECD standards—could provide roughly half of the fiscal adjustment needed to put the public debt ratio on a downward path within the next several year.”
“Experiences elsewhere, as well as the specific circumstances of Japan, suggest that the strategy for raising the consumption tax be guided by the “four Ss”—it should start Sooner rather than later, be raised by Stepwise increases, Sustained for some time, and retain the very Simple current structure of the consumption tax: [….]”
“Japan’s experience in raising the consumption tax will set an important example for other countries.”
My comments: (1) The IMF staff has not learnt anything from Japan’s own experience in raising tax rates of later 1990s and early 2000s. (2) Start sooner = in the middle of a recession!
Tanweer Akram
Daily Archives: January 19, 2012 @ 4:49 pm (Thursday)
Sweden Should Sell More Bonds to Tap Foreign Demand, SEB Says
Total nonsense.
The do have their own currency, last I checked.
Sweden Should Sell More Bonds to Tap Foreign Demand, SEB Says
Jan 19 (Bloomberg) — Sweden should borrow more to take advantage of demand and increase investments in the largest Nordic economy, SEB AB Chief Economist Robert Bergqvist said.
The Nordic region has emerged as a haven as European leaders struggle to contain a sovereign debt crisis now in its third year. Swedish 10-year bonds are trading at a yield of 14 basis points less than benchmark German debt as of 10:56 a.m. in Stockholm.
“If you look at other countries in Europe that now must save money, cut budget deficits and bring down government debt, in Sweden we can make investments for the future, so I hope the government is using this very nice situation to borrow money to make investments in infrastructure, education,” Bergqvist said in an Jan. 17 interview Stockholm. “This would strengthen the Swedish position in the long term.”
Some foreign investors are concerned about the level of liquidity in the market, he said. “They want to see more government debt.”