Tag Archives: Fiscal policy

Lending to SMEs and entrepreneurs is improving, but more diverse forms of financing are needed – OECD

April 14, 2016 By in Accountability, Austerity, Business Administration, Central banks, Economics, Euro Crisis, Fiscal Policy, People, Politics Tags: , , , , , , , Leave a comment
English: The logo of the Organisation for Econ...

English: The logo of the Organisation for Economic Co-operation and Development (OECD). (Photo credit: Wikipedia)

This is an important new report published by OECD. It highlights that financing for small and medium-sized enterprises (SMEs) has turned the corner from the downswing seen during the global financial crisis, but overall credit conditions remain challenging and access to external finance continues to be much tighter for SMEs than larger firms.

Source: Lending to SMEs and entrepreneurs is improving, but more diverse forms of financing are needed – OECD

I was disappointed that the report was not more critical of the major banks who despite all sorts of inducements have failed to leverage loans to SMEs. This is important because typically SMEs generate new jobs more quickly than larger firms.

What the report highlighted for me was the importance of government guarantees. Significantly, France with a socialist government and generally not friendly to entrepreneurs, we find surprisingly high government guarantees. By comparison, in the UK and Southern Europe government guarantees for SMEs are negligible. Part of the problem seems to be the monetary policy and fiscal policy are not coordinated effectively.

In my mind SMEs generally get a raw deal compared to big business. Big business has more effective political lobbying. Governments seem to rely on intermediaries in dealing with SMEs. Most importantly, there seems to be an absence of an effective industry strategy.

Thoughts?

 

RealTime Economic Issues Watch | Some Big Changes in Macroeconomic Thinking from Lawrence Summers – Adam Posen – Peterson Institute for International Economics

November 22, 2015 By in Austerity, Business Administration, Central banks, Economics, Fiscal Policy, George Osborne, Growth, Keynesian, Monetary Policy, People, Politics, Unemployment, US Election Tags: , , , , Leave a comment
White House portrait of Lawrence Summers.

White House portrait of Lawrence Summers. (Photo credit: Wikipedia)

Some of the world’s top economists put macroeconomics under the microscope. Adam Posen responds to a a lecture by Lawrence Summers. Here’s his introduction:

A lot of economists, myself included, have spoken about the need to fundamentally rethink major parts of macroeconomics following the global financial crisis.

Source: RealTime Economic Issues Watch | Some Big Changes in Macroeconomic Thinking from Lawrence Summers

This short article is highly readable. It gives us some clues as to which statistics are more reliable. We live in world where economists and politicians are frequently at loggerheads with mainstream media keen to gloss over the evidence.

Summers highlights the major global trend over the last few decades of substantial disemployment—or withdrawal from the workforce—of relatively unskilled workers.

Thoughts?