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This analysis by Mackintosh in WSJ points out that the low to negative interest  policy of the ECB has hurt savers, bank profits, and makes the ECB unpopular, yet it has shown tangible signs of success in creating jobs. This is true even though unemployment in the EU is still over 10% in some countries. He says that the unemployment is back to where it was in Nov. 1998 before the euro. There are 7.5 million jobs created in EU since beginning of 2014, the point at which ECB went to ultra low interest rates. This is above the 6.3 million created in the U.S. upto 1st quarter 2016. Big difference now is that companies and households are borrowing as rates fell. Inflation at 0.2% in August 2016 for EU is a weak spot, but considering where the EU was just 2-3 years before in 2013, the change is a largely positive one.

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Binyamin Applebaum cites different experts on how U.S. Fed policy could play out in 2017-2019. He cites Fed governor Dudley that there is increased uncertainty under the Trump administration, and other economists who say that aging population, lack of innovation, and steady growth under the Obama administration with falling unemployment, make it unlikely that growth will jump well above 2%. The Fed's own forecasts are for for under 2% growth in 2017 and 2018, and Applebaum says this is not expected to change by much. Janet Yellen does not see a huge stimulus as a positive, says Applebaum, because it would increase the deficit at the wrong time. He cites Yellen who prefers to see more fiscal space now that unemployment is down to 4.6%. Steady growth in the view of Fed officials has taken up much of the backlog of people looking for work since the 2008 crisis. Yellen sees some fiscal space as desirable with high debt to GDP ratio at 77 percent, so that the government could respond to some adverse event in the future. A Republican Congress is also averse to sudden increases in the deficit. See the link to views about the uncertainty of how things can play out in a separate article by Neil Irwin of NYT. ...

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Krugman points to some striking facts about China in 2011. Consumer spending in China is only 35% of GDP and has declined over the years. There are no signs of rebalancing the economy away from exports by increasing consumer spending. China's dependence on exports for trade surpluses is greater than ever. Beyond this there is another disturbing fact. With weak consumer spending and heavy investment spending at about half of GDP, Kugman raises the question where is all that increase in spending going? Real estate investment takes up about half of the increase in investment spending, as the share of GDP of real estate investment almost doubles compared to figures for 2000. Much of the rest of the increase Krugman attributes to firms selling to the construction industry. The speculative fever, the corruption at the local level, the shadow banking system which is not protected and unsupervised, the poor quality of statistics, suggest a bubble phenomena that may not be under control of policy makers, and risks damaging China economy and the world economy in 2012-2013. After all China's economic and financial planners and banks are no better than America's or Japan's, where asset bubbles burst causing serious damage....

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Using a new methodology India's statistics agency revises growth for 2013 to 5.1%, for 2014 fiscal year to 6.9%. Growth for 2015 is forecast at 7.4%. For the 3 months Oct-Dec. 2014 the growth in GDP was at 7.5%. Changes in methodology include computing it at market price, not at factor cost. This adds up consumer and firm spending instead of producer costs.

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Difficulties facing China from an overheating economy, a property bubble in many cities,, and a 22.5% jump in March in the broadest measure of money supply being the latest signs of trouble. The government announcement will show the economy growth at 12% rate in the 1st quarter of 2010 vs. 8.7% in 2009. The problem is that China may have acted too aggressively when the central bank increased money supply and state-owned banks in China's centralized banking system were ordered to jack up the lending. The $586 billion stimulus sent even more money to construction and energy companies. Without effective steps and fast the Chinese economy could run into serious problems.

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With the reduced demand for Fannie and Freddie mortgages with coupons under 5%, the Fed steps in and purchases $192 billion of 4% and 4.5% conforming mortgages on a gross basis by March 25, 2009. The move helps support falling house prices in the U.S. and reduces mortgage rates. It also helps banks improve profits. Estimates show the top 10 banks increased their holdings of securities issued by Fannie and Freddie and government agencies by $128.6 billion or 30% in 4th quarter 2008, which can be marked up in future quarters.

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Spain's central bank was lauded for macroprudential supervision before the housing bubble burst. Will China's central bank and financial authorites which have managed the housing bubble upto this point face similiar problems? Can China be the sole exception even as housing bubbles burst with wide repercussions in the U.S., UK and Spain? Nicholas Lardy, of the Peterson Institute of international Economics, says urban housing stock makes up 41% of Chinese household wealth in 2011. The same figure for the U.S. is 26%. Chinese buyers invest in homes because low interest rates on savings accounts cannot keep up with inflation. Real estate investment was 13% of GDP in 2011. Home ownership is a recent development in China, only since 1990, Chinese have never experienced large price declines. Household debt as a percentage of disposable income has increased significantly in recent years, up to 53.6% in 2011 from 31.3% in 2008, according to Lardy.

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John Taylor on the dangers of a loose U.S. monetary policy and the effects this had in fueling a housing bubble in Spain, Ireland and other EU countries. Taylor points to the bubble ocurring in emerging market economies from low interest rates. Taylor says the ECB's interest rate moves in 2003-2005 were affected by the Fed's low interest rates. He estimates the ECB set rates about two percentage points too low leading to housing bubbles in EU countries. A similiar process is taking place today with the Fed's near zero interest rate policy. Taylor points to interest rates in a group of 18 emerging market economies- including Brazil, China, India, Mexico and Turkey, which have held interest rates on average about 5 percentage points below widely used benchmarks fueling a doubling of global commodity prices between 2009-2011. The U.S. Fed's policies make it harder for central banks in emerging market economies to take aggresssive action against bubbles developing in these countries. Taylor says his does not mean that the Fed should not pay attention to the U.S. unemployment rate and long term unemployed, but should keep in mind the negative effects of slowing demand in emerging market economies and in the EU as a result of its monetary policy of keeping rates at near zero for long periods of time. This feeds back to the U.S. economy at a critical time....

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Chinese government data show that inflation was 3.1% in May 2010. The spread of wage increases in manufacturing after a series of strikes at Hon Hai and Honda Motor suggest that price pressures will grow even further. Analysts warn that China's central bank will have to raise interest rates to control the boom in the economy and property markets; that merely reining in credit will not work. They also suggest the need for swifter action in revaluing the yuan. As wage increases spread throughout manufacturing, this will eventually be reflected in higher prices of end products.

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China's limited monetary and fiscal options in 2012, with the housing bubble limiting the option of increasing construction spending to spur growth, and inflation limiting monetary policy. The central bank's decision to reduce the reserve requirement by 0.5% is not expected to do much for economic growth, as there is enough money to lend. The problem is that there is not enough demand for loans in the current environment.

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Experts say China's official GDP figures are unreliable and cannot be verified. Transparency is sorely lacking. The methodology, inflation assumptions and other basis for the calculations are not presented, so that many of the numbers cannot be reproduced. The official figure for 1st quarter GDP growth is 7%, from China's Bureau of National Statistics. GDP growth estimates developed by Capital Economics show 4.9% growth, by Citi 4.6%, by the China Center of the Conference Board 4%. Since 2012 the Capital Economics estimates are just above 5%, and the Conference Board estimates about 4%, showing that the growth rate has slowed markedly since 2012. As Communist party chief of Liaoning province, the current prime minister showed serious doubts about the GDP numbers and preferred to rely on figures for rail cargo, electricity consumption, bank loans.

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Allan Meltzer says a Fed QE III woud be bad monetary policy. He puts several questions to Bernanke- how the Fed and Ben Bernanke can know now what is the right interest rate policy in mid 2013, and what reason can the Fed give for adding excess reserves when U.S. banks have $1.6 trillion in idle reserves at the Fed. Meltzer cautions the Fed and other policymakers not to pay attention only to short term forecasts, which can be susceptible to large errors. And calls for attention to the long term consequences of their actions. One point he emphasizes is that the unemployment problem cannot be resolved with short term policy actions nor can it be resolved in a short time. It will take population growth, falling housing prices and rising rents to create opportunities for new construction. Another change is the transition to a less consumption driven and more export oriented economy. This transition which has started will also take time. He urges the Congress and the administration to focus on: reducing corporate tax rates by closing loopholes, long-term reductions in entitlement spending, a 5 year moratatorium on new regulations, and the Fed adopting an explicit inflation target between 0% and 2%....

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Macroprudential policies of central banks in S. Korea, Indonesia, China, Canada, and other countries, as concerns grow about a housing and credit bubble.

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Keith Bradsher visits Guangzhou, China, just as prime minister Wen Jiabao tells the National People's Congress that China is changing its priorities from high growth to sustainable development. As recently as 2007 GDP growth reached 14%! The minimum wage is expected to rise 13% each year under the five year plan. Even with the increase in wages owning an apartment is unaffordable in Guangzhou- a 1000 square feet apartment costs upward of $300,000, showing the extent to which the bubble in real estate prices affects young people who cannot afford to own an apartment. A new graduate with marketable skills such as computer engineering makes about $6000 a year, putting owning an apartmet beyond reach. Another change he notices today is that during visits to construction sites he does not see flood lit sites at night. This used to be the case because builders were scrambling to build. With government policies discouraging the property bubble there is no longer a need for work at night. The focus now has shifted to build low income housing....

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The annual report on China by the IMF points to a diminishing margin of safety and higher risks for delays in needed economic changes from earlier infrastructure and construction focussed policies which neglected Chinese consumers and savers. The IMF pointed to risks from the shadow banking system and the real estate bubble that need to be addressed.