AI and Geoeconomics

          Famous Samurai in Battle - Hideyo A Zero-Sum Game “Currency war” is ministerial parlance for lowering the value of your nation’s currency so your exports are cheaper and your imports more expensive. That helps domestic growth. It can also drive up inflation—which in the case of deflationary Japan is not such a bad thing. Critics call it a beggar-thy-neighbor policy because trade is a zero-sum game : If one country racks up bigger surpluses, another must run bigger deficits. Competitive devaluation is even blamed by some economists for contributing to the Great Depression. Quantitative Easing in Japan The recently-elected Japanese government of Prime Minister Shinzo Abe is trying to end years of chronic deflation and recession by putting the Bank of Japan under pressure to weaken the yen as a way to boost exports. Japan's new government is pressing the Bank of Japan to set a 2% inflation target, doubl...

Introducing the AD-AS model The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand and aggregate supply. It is based on the theory of John Maynard Keynes presented in his work The General Theory of Employment, Interest, and Money . Two variables are represented by the model. The quantity variable on the horizontal axis is now represented by real gross domestic product (Y) . This is the measure of the true value of annual national production, and is adjusted for inflation. The level of price inflation P is represented on the upright axis. A suitable economic statistic for this value would be the rate of inflation as determined by the Implicit Price Deflator, the value used to compute real GNP from nominal, inflated GNP. Aggregate demand is simply the total of all levels of spending in the national income accounts; consumption, investment, government purc...

Le premier ministre chinois, Wen Jiabo, a indiqué le jeudi 2 février à l’occasion de la visite en Chine de la chancelière Angela Merkel,  que son pays étudiait sérieusement différentes options pour participer au financement du Fonds Européen de Stabilité Financière (FESF)  et de son successeur  permanent le Mécanisme Européen de Stabilité (MES) à travers le FMI. Conjointement, le Président de l’Eurogroupe (qui rassemble les ministres des finances des Etats membres de la zone euro) Jean-Claude Junker, a rappelé que les leaders européens allaient devoir franchir de nouvelles étapes pour coordonner leurs politiques économiques : « Nous avons un marché intérieur, nous avons une monnaie commune, mais nous n’avons pas d’autorité de centralisation économique ».