Friday, 28 October 2016
Their point (at least as I see it – they might not agree with my interpretation of their thinking) is that it makes no sense for the state to issue so much money that it then has to pay interest to “money holders” (i.e. the private sector) to induce it not to spend some of that money, and with a view to curbing inflation. I.e. why not just issue less money and pay no interest to anyone? I agree with that.
Having said that, there’s a slight complexity here, namely that the state acts in at least two capacities: 1, issuer of money, and 2, investor in infrastructure. And there are some arguments (pretty feeble ones) for funding infrastructure via interest yielding bonds. (Milton Friedman and Warren Mosler opposed ANY SORT of government borrowing, and quite right, I think).
But if it is accepted that infrastructure is funded via borrowing rather than via tax and money printing, there’s a glaring self contradiction there as follows. The conventional economic wisdom is that when stimulus is needed, demand should be increased by cutting interest rates, and that’s done by having the central bank print money and buy back the above bonds. But that amounts to funding infrastructure (after the event so to speak) via money printing, which contradicts the above idea that infrastructure should be funded by borrowing!
In short, the conventional economic wisdom is in a muddle on the subject of borrowing to fund infrastructure. So let’s so to speak leave advocates of the conventional wisdom to wallow in the mess they’ve made for themselves, and return to Mosler and Forstater’s basic point, as I see it, which is:
The state as money issuer should issue enough money to bring full employment, but not so much that the state needs to borrow some of it back and hence artificially raise interest rates. That’s not to say that interest rate adjustments should NEVER be used: they’re a useful tool to have in reserve. But the AIM should always be Mosler and Forstater’s zero rate.
Wednesday, 26 October 2016
Two Harvard economics professors have spent the years since the 2008 crisis claiming that stimulus brings a serious problem, namely rising government debt. That’s Kenneth Rogoff and Carmen Reinhart (though there are other equally clueless economists at Harvard).
To access their works, just Google their names and “government debt”.
The first flaw in the idea that more stimulus (i.e. more deficit) means more debt is that (as Keynes said), deficits can be funded via borrowed money, OR PRINTED MONEY. Thus there’s no need for extra debt at all! Of course the AMOUNT printed can’t be so much as to cause excess inflation, but if it’s just right, it will cure the recession while not causing excess inflation. Indeed, the effect of QE is to fund the deficit via printed money, which makes you wonder whether Rogoff and Reinhart (R&R) have heard of QE, or if they have, whether they know what it consists of.
Another ploy of R&R’s is to use emotionally loaded phrases to back their arguments (since they are evidently short of “logic loaded phrases”). For example they refer the “debt overhang” instead of the more accurate phrases “national debt” or “government debt”. Well clearly something which is “overhanging” and about to drop on your head is a threat. I’m worried stiff (ho ho).
Another emotionally charged phrase they use is “financial repression”. Financial repression is their name for the collection of measures which may need to be used to reduce excessive government debt, like raised taxes or excess inflation which cuts the real value of the debt and robs creditors. Well clearly any form of “repression” must be horrible, disastrous, nasty, harmful, cruel, bad – add synonyms to taste. I’m in emotional turmoil as a result of “financial repression” (ho ho again).
Incidentally, when searching for R&R articles, the latter two emotionally charged phrases can help.
However, credit where credit is due, their “financial repression” point does contain a small element of truth, not that that basically gets their argument anywhere. So let’s examine so called financial repression.
The basic flaw in financial repression.
The basic flaw is thus. Government debt (and the considerable quantities of base money now sloshing around as a result of QE) are ASSETS as viewed by the private sector. More particularly they are liquid assets: i.e. they are easily swapped for consumer goodies and other items. And if the private sector has what it thinks is an excessive stock of those assets, it will try to spend away those liquid assets, as a result of which demand and inflation will become excessive. So in that circumstance, government has to impose some sort of deflationary measure, like raising taxes and confiscating some of that money / liquid asset.
However, the sole purpose of that extra tax is to keep demand down to a level where the economy can meet that demand. I.e. the purpose is NOT TO cut GDP: the purpose (and hopefully the actual effect) is simply to prevent excess inflation. Now excess inflation actually REDUCES living standards, thus ironically, the effect of the above extra tax (if excess inflation has already started) is to RAISE living standards, not to cut them. At the very least the effect of the extra tax is to prevent a fall in GDP. But you won’t find anything about that “prevent a fall” point in R&R’s works.
It’s beginning to look like we can take the phrase “financial repression” with a big pinch of salt.
R&R’s mistake there is to confuse microeconomics with macroeconomics. Paying off debts, as we all know is a painful process. Or at least it is in the case of microeconomic entities like a household: that is, the household has to earn money and far from spending that money on consumer goodies, it has to repay money to relevant creditors. In contrast, macroeconomics does not work the same way as microeconomics: one gets bizarre results like the above mentioned phenomenon of raised taxes actually INCREASING living standards.
Incidentally, the above “prevent a fall in GDP” point applies in a closed economy, but not open economies (as more astute readers may have noticed). Open economies are considered below.
Having set out the basic flaw in financial repression, the real world involves a few complexities not mentioned above. So let’s consider them. But as you’ll see, those complexities do not basically dent the latter conclusion, namely that “financial repression” is largely a mirage.
First, having said above that demand becomes excessive because the private sector has an excessive stock of money / liquid assets, another possible effect of that excess stock is that holders of those assets demand a higher rate of interest for holding the assets which could be in part down to creditors losing confidence in a government’s ability or willingness to repay the debt. Creditors may demand a higher rate of interest for that reason.
Well that’s not a problem for a country which issues its own currency: it can very easily cut interest rates. And that’s done by having the central bank print money and buy back the debt (and/or abstain from rolling over debt as it matures).
Of course printing money and buying up government debt (QE effectively) is likely to be stimulatory and/or inflationary (though precious little inflation stemmed from QE over the last few years). But if the latter “print and buy” policy DOES PROVE INFLATIONARY, that can be remedied very easily by raising taxes. And as explained above, the purpose of those taxes is simply to supress inflation: thus those extra taxes as such do not cut living standards.
However, there is an effect on living standards where FOREIGNERS withdraw money from the relevant county as a result of the fall in interest rates: the country’s currency falls in value on foreign exchange markets, and that depresses living standards. On the other hand there will have been an equal and opposite effect when those foreigners first purchased debt. So in a sense, that’s a wash.
The next complexity: politics.
It was claimed above that raising taxes is easy. It should however be said that raising taxes can be POLITICALLY difficult. I.e. raising taxes is no problem from the strictly technical and economic point of view, but the politics can be tricky.
The solution there is to let the elevated interest rates run for a few more years than is strictly desirable and raise taxes more slowly. That is not ideal: it is not a “GDP maximising” strategy, but it’s the least bad real world solution to the problem.
Why let government debt rise at all?
Having admitted that an elevated stock of government debt and/or base money can cause significant problems, it might be tempting to claim a solution is not to let that stock rise at all, which is more or less what R&R propose. Well the answer to that is that if we do NOTHING about recessions then excess unemployment and inadequate GDP will just linger for God knows how long: two decades instead of five years?
Conclusion: the optimum or GDP maximising policy is to always to aim to let the private sector have a stock of state liabilities (government debt and base money) which induces the private sector to spend at a rate that results in the economy running at capacity. Or as Keynes put it, “Look after unemployment and the budget will look after itself”.
Tuesday, 25 October 2016
Saturday, 22 October 2016
To implement fractional reserve banking it’s first necessary to rob people of their existing stock of money.
Summary. Assume a full reserve bank system: that’s a system where the only form of money is government issued money. If private banks are then allowed to print money (which is what fractional reserve consists of), interest rates fall and borrowing, lending and debts rise. For every dollar of new borrowing (aka debt) there’s a dollar of new money (private bank created money). That new money will be inflationary unless government implements some sort of compensatory deflationary measure like raising taxes and robbing the private sector of its existing stock of government created money.
To put that the other way round, switching from a fractional reserve system to full reserve (i.e. doing the switch in the opposite direction) reduces lending and borrowing, which is deflationary. But the solution is easy: have the state print money and spend it into the private sector. I.e. private sector, so to speak, gets back the above money that was robbed from it.
Which of the two systems, full and fractional reserve, most closely resembles a genuine free market and is thus most likely to maximise GDP? The answer is full reserve because under full reserve, borrowers have to pay the full cost of borrowing: they are not subsidised by private money printing.
Assume a full reserve banking system: that’s a system or economy where the only form of money is state issued money. It’s also a system under which those who want their money loaned out bear the risks involved – which is actually perfectly normal in simple economies. E.g. if Robinson Crusoe lends a fishing rod to someone in a desert island economy and the borrower loses the rod and cannot recompense Crusoe, the reality would probably be that Crusoe would bear the loss rather than the loss being born by the economy as a whole (which would be the equivalent an FDIC type deposit insurance system).
Also, under full reserve, the fact that lenders bear risks means that if they lend via a bank, then those lenders are effectively shareholders in the bank rather than depositors.
Fractional reserve is then allowed.
If fractional reserve banking is then allowed, that means there is private bank created money as well as the central bank created money, and in the case of private banks, they LEND out that money rather than, as is the case with central banks and governments, simply spend the money into the private sector.
Fractional reserve bankers get their scheme off the ground by making depositors a “too good to be true” offer, which is: 1, you deposit $X with us, we lend some of that out so that you get interest, and 2, we guarantee you’ll get your money back (maybe instantly or maybe, in exchange for more interest, after a delay). That offer is too good to be true because lending money is risky and that flatly contradicts the promise by banks to depositor that they’ll get their money back.
The net effect of introducing fractional reserve is a big increase in loans and hence deposits, and private banks can easily make those extra loans because they haven’t had to pay for the new money they’re lending out: they just print it! So the net effect is that loans and hence deposits rise and interest rates fall. But that fall in interest rates means people will want to hold FEWER, not more deposits. So they’ll try to spend away their increased stock of deposits. In short, inflation ensues, unless government takes some sort of deflationary counter measure, like raising taxes and robbing the citizenry of part of its stock of base money.
George Selgin actually set out the latter scenario (switching from full reserve to fractional reserve) in an article entitled “Is Fractional-Reserve Banking Inflationary” published by “Capitalism Magazine”. Start at his third paragraph if you like. As he explains, the effect is inflationary, at least for a while. To be exact, he says inflation reduces the real value of base money to the point at which the amount left is only just enough to enable private banks to settle up with each other.
He assumes that no “deflationary counter measure” is taken, which means that inflation rips, and the citizenry are robbed via inflation rather than via extra tax. But the effect is the same. (Incidentally that is not to suggest Selgin would agree with the basic thrust of this article: it’s just that as it happens he made the same point as is made here about the switch from full to fractional reserve being inflationary)
Having said that the switch from full to fractional reserve is inflationary, there are actually several details in that narrative that are missing above. So let’s now fill in some of the details (which Selgin also missed out).
I’ll take it stage by stage, starting with a full reserve scenario. So having assumed full reserve, let’s assume private banks are allowed to go for fractional reserve. The first thing that happens before any new loans are made is that those shareholder / depositors find things have changed a bit. That is, instead of being shareholder / depositors, they are now bog standard depositors: i.e. instead of carrying any risk themselves, they pay deposit insurance. But if those shareholder / depositors and the new insurer both gauge the risks correctly, they’ll charge the same for covering the risks. Ergo the charge made by banks to relevant borrowers remains unchanged.
As to depositors who previously sought total safety at the central bank, they can now enjoy total safety plus instant or more or less instant access to their money at the same time as having their money loaned on and hence being able to earn interest (a contradiction in terms of course).
In short, “shareholder / depositors” and “want total safety depositors” are now merged into the same group or category. But they then share the interest coming from borrowers, so there is less interest per depositor. That’s not a problem for the former “want total safety depositors” because SOME INTEREST is better than none. So that’s an incentive for that type of saver to save more, i.e. accumulate more deposits. On the other hand former “shareholder / depositors” lose out, thus they will “dis-save”: i.e. try to spend away some of their money.
Absent some sort of detailed survey into the attitudes of depositors, it is difficult to say which of those two effects predominate. However I’ll make the bold assumption that the two effects more or less cancel out, or at least that any net effect there is dwarfed by the next effects to which we now turn.
Next: banks lend more.
As intimated above, fractional reserve enables private banks to lend more, something which is easy for them to do because they don’t have to pay anything for the new money they’re lending out – they just create it out of thin air, or “print” it. I.e. private banks can cut interest rates and lend more.
That extra lending initiates another effect of the switch, namely that given that borrowers do not borrow other than to spend the money borrowed, an increase in lending means an increase in spending (i.e. an increase in aggregate demand). However, that effect is temporary, because once the additional loans have all been spent, the “extra spending” effect comes to a halt.
Clearly that would be an important point to consider given a real world switch from full to fractional reserve (or vice versa). However, given that the effect is temporary, I’ll ignore it for the sake of brevity.
The switch causes excess deposits.
As explained above, switching to fractional reserve means more loans and hence more deposits (given that “loans create deposits” as the saying goes).
Borrowers will be happy with that: lower interest rates enable borrowers to borrow more. But depositors won’t be happy: interest rates have fallen and to make matters worse, the result of private banks increased lending is increased deposits.
Depositors will thus almost certainly have more deposits than they want, thus they’ll try to spend away the excess. Hence the inflation to which Selgin refers.
As already explained, government could just let inflation rip, which is the scenario that Selgin assumes. That means savers or “money holders” are robbed.
An alternative is for government to impose some sort of deflationary counter measure, like raising taxes, i.e. robbing the citizenry of part of its stock of money.
Another possible deflationary measure is for government or “the state” to raise interest rates, and it can do that by wading into the market and offering to borrow at above the going rate of interest, and as regards interest, well the state can just send the bill to the taxpayer.
Also note that the purpose of that borrowing is NOT TO invest in infrastructure or anything like that: the sole purpose is to discourage spending by the private sector. In effect, that’s just another form of robbery or confiscation.
So which is best: full or fractional reserve?
My answer to that is: “whichever is nearer to a genuine free market”.
But there is a slight problem there namely that money is not and never has been a purely free market phenomenon: that is, there has to be some sort of nation-wide agreement as to what form the nation’s money shall take: gold coins, cowrie shells or whatever. And indeed, the historical evidence supports that: that is, in numerous civilisations, money was introduced by a ruler, king etc, not by market forces. Thus there is an inevitable element of “government monopoly” about money.
Nevertheless, there are other characteristics of free markets that different bank or monetary systems might or might not have.
In particular, a genuine free market is one in which customers normally pay the full cost of the goods and services they purchase.
A bank system where banks obtain some of the money they lend out simply by printing the stuff is not a market in which customers are paying that full cost.
There is certainly a case for printing and distributing more money from time to time (via helicopter drops or similar), but there is no reason for any sector of the economy to have preferential access to that new money.
A genuine free market is also one in which fraudulent or dubious promises are not allowed: like the basic promise that fractional reserve banks make: “deposit your money with us, and we’ll lend it on while guaranteeing your money is totally safe”.
And finally, given a perfectly functioning free market, recessions are cured essentially by helicopter drops, i.e. distributing money to a wide selection of people and institutions, not just banks. That is, in a perfectly functioning free market and given a recession, wages and prices fall, which increases the real value of base money, which in turn induces those with a stock of money to spend more – a phenomenon know as the Pigou effect.
All in all, full reserve banking shares important characteristics with free markets.
Wednesday, 19 October 2016
The article is by Stephen Koukoulas who according to article is “a Research Fellow at Per Capita, a progressive think tank.” Gosh. He’s “progressive” is he? That’ll impress the rather large proportion of Guardian readers who are cuckolds. (Article title is: "Economic growth more likely...")
And it’s not just me who thinks that self-styled “progressives” are often not all that bright: Bill Mitchell (left of centre Australian economics prof) has made that point over and over.
Anyway, the “multiplier” is simply the idea, widely accepted in economics, that the ULTIMATE effect on GDP of different types of spending varies widely. And the particular instance of that phenomenon that Koukoulas deals with is the different effect on GDP of donating money to the rich as compared to donating it to the poor.
As Koukoulas rightly points out, the poor spend a larger proportion of any increase in income than the rich, thus the ultimate effect on GDP of giving $X to the poor is larger than the effect of giving $X to the rich. Thus it seems that we get better value for money from giving money to the poor.
Unfortunately that argument does not stand inspection and for reasons set out below. I’ve actually set out the flaws in the multiplier before on this blog, but to get any point across one normally has to repeat it ad nausiam, so here goes – for the umpteenth time.
First, to attack the multiplier IS NOT to attack equality enhancing measures Koukoulas refers to. I.e. if it can be shown that higher taxes on the rich and more generous benefits or lower taxes for the poor brings big social benefits, no one can object to that.
But that’s quite separate from the strictly economic claim, namely that there’s a case for giving preference to high multiplier types of spending because the ultimate effect on GDP is higher per dollar of expenditure.
The basic flaw in the latter idea is that stimulus dollars cost nothing in real terms. To illustrate, if stimulus consists of helicopter drops (i.e. literally printing $100 bills and giving a bundle of those bills to every household in the country), the real cost of doing that is minute compared to the face value of those dollars.
As Milton Friedman put it, "It need cost society essentially nothing in real resources to provide the individual with the current services of an additional dollar in cash balances."
Of course stimulus does not normally consist of overt helicopter drops, but conventional stimulus actually comes to almost the same thing. Indeed, conventional fiscal stimulus (government borrows $X, spends $X and gives $X of bonds to borrowers) followed by the central bank printing money and buying back some of those bonds so as to keep interest rates stable or even reduce them, comes to EXACTLY the same thing as a helicopter drop (assuming that by “helicopter drop” one means dropping money onto government departments, state schools, etc as well as households).
Thus given a number of different ways of getting the economy up to capacity, A, B, C etc, the only important point (as far as economic rather than social considerations are concerned) is the effect on GDP. The number of stimulus dollars needed to effect A, B, C etc is irrelevant. I.e. the multiplier is irrelevant.
Tuesday, 18 October 2016
It’s quite widely recognized that a significant proportion of the economics profession are not interested in reality: rather, they’re interested in erecting complex theories and models with a view to keeping themselves employed at the taxpayer’s expense. But when it comes to a blatant disregard for reality, the “sticky price channel”, which I stumbled across recently takes some beating.
A guide to the sticky price channel is set out under the heading “The Sticky Price Channel” in a recent CEPR article by Carlos Garriga and Finn Kydland. The article title is “Keeping Policy Rates Persistently Low…”.
The paragraph that claims to explain the sticky price channel runs as follows. (Incidentally I’m not promising that this para is an accurate description of the sticky price channel, but having Googled the phrase “sticky price channel”, this para seems to have got the idea roughly right, far as I can see.)
“The sticky price channel is the central mechanism of monetary policy transmission in the modern macro literature. A number of texts (e.g. Woodford 2003, Galí 2015) describe this channel in detail.1 The key element of this channel is the so-called ‘New-Keynesian Phillips curve’. According to this relationship, aggregate output depends negatively on the expected change in the inflation rate. If today’s inflation is high relative to tomorrow’s expected inflation – that is, the expected change in inflation is negative – aggregate output is relatively high today. The microeconomic foundations for this relationship are driven by the costly adjustment of prices at the firm level. Consider a firm that faces a cost of adjusting its price. When the aggregate price level increases, and thus inflation increases, the firm finds itself with a higher demand, as its products look relatively cheap. If the increase in the aggregate price level is expected to only be temporary, the firm does not find it profitable to incur the adjustment cost of changing its price. Instead, it increases output to satisfy the higher demand. In equilibrium, all firms facing price adjustment costs behave this way and, as a result, aggregate output increases. However, when the increase in inflation is expected to be highly persistent, the cost of changing the price is worth paying and the firm adjusts its price, rather than output. In equilibrium, all firms behave this way and, as a result, aggregate output does not change. The sticky price channel is thus most potent when changes in policy rates, and thus inflation, are only temporary.”
Now if you didn’t fall about laughing at that, here’s why you should have.
First, why would any government implement monetary stimulus (or indeed fiscal stimulus) given a significant amount of inflation? It wouldn’t!! Put another way, when inflation rises above the 2% target, governments and central banks normally turn off the stimulus tap.
Raising prices is costly?
Second, the idea that raising prices is costly is a joke. A supermarket chain can raise all its prices nowadays by pressing a key on a computer keyboard. The cost of doing that is negligible compared to what supermarkets spend on wages, purchasing food to sell and so on.
And in the case of small businesses which are not quite so computerised as supermarkets – e.g. small hotels and restaurants – where they want to adjust prices, they’d have to re-print menus etc. Well shock horror! That’s not going to ruin any hotel or restaurant.
And if there are any small hotels or restaurants out there who don’t know how to set up a desktop printer, I’m happy to offer instructions.
And this ere “sticky price theory” is according to the above paragraph “…the central mechanism of monetary policy transmission in the modern macro literature...”. If that’s the case, most macro-economists should check in with their shrink.
Why expand sales when they’re not profitable?
A third problem is this passage:
“Consider a firm that faces a cost of adjusting its price. When the aggregate price level increases, and thus inflation increases, the firm finds itself with a higher demand, as its products look relatively cheap. If the increase in the aggregate price level is expected to only be temporary, the firm does not find it profitable to incur the adjustment cost of changing its price. Instead, it increases output to satisfy the higher demand.”
Now hang on. Let’s make the not unreasonable and simplifying assumption that the typical firm is making a standard return on capital or a “normal profit” as economists sometimes call that, at the start of the above mentioned inflationary period.
Once that inflation has started, and given that the firm does not raise its prices pro rata, it will then be making a LESS THAN normal profit, or even a loss. Now what’s the point in bothering with extra sales if they’re not profitable? None!
Indeed, why bother selling ANYTHING? Strictly speaking it could make sense for the owner of a business in that situation to simply close down the business temporarily and go on a fishing holiday, till profitability returns.
In practice, nine times out of ten, businesses obviously don’t do that when faced with making low or zero profits for a while because they risk losing regular customers. So what they often do is to keep supplying regular customers, while telling new customers their demands just cannot be met.
Indeed there’s a second reason for ignoring those new customers. It’s a reasonable bet that the new customers have simply been attracted by the artificially low prices the firm is demanding. I.e. when things return to normal, those new customers may vanish. To that extent it makes sense (unless the firm is desperate to buy market share) to politely tell the new customers their orders cannot be met.
A fallacy of composition.
A fourth error in the sticky price theory is in the sentence that follows on from the latter quote. The sentence reads “In equilibrium, all firms facing price adjustment costs behave this way and, as a result, aggregate output increases.”
Now hang on: inflation by definition is a situation where a significant proportion of the country’s firms are increasing their prices!!! I.e. you can’t assume inflation and then in the next breath assume firms are not increasing prices!
To be more accurate, there is no sharp dividing line between what might be called a micro and a macro scenario. We’ve dealt above with the purely micro scenario: i.e. situation where an individual firm faces generally rising prices while it keeps its own prices constant.
At the other extreme there is what might be called a “pure macro scenario”. That’s where inflation is running at X%pa because EVERY firm is raising its prices by X%pa. In that scenario it’s clearly a nonsense to suggest that the typical firm will expand sales and output because its prices have risen less than the general increase in prices.
The whole “sticky price channel” looks to me like a train wreck, or something so near a train wreck that it can be ignored.
So what is the “central mechanism of monetary policy transmission”?
And finally, having ridiculed one alleged “central mechanism of monetary policy transmission”, there is perhaps an onus on me to set out what I think the real “central mechanisms” are. So here goes. But be warned: they’re very boring, simple and straightforward, which is perhaps why some economists don’t like them. To repeat, what many economists want is complexity because complexity keeps them employed. Anyway, I propose the “mechanisms” are as follows.
First, there is interest rate cuts. The result of those cuts is to encourage more borrowing and when money is borrowed and spent demand rises. That’s simple enough.
Second, there is QE. That consists of the central bank printing money and buying sundry safe assets. That leaves the private sector with an excess stock of cash, which induces the private sector to spend in one way or another. That raises demand. That’s also simple enough.
Third, there is helicoptering, which is a mixture of monetary and fiscal policy. Helicoptering consists of having the state print money and spend it and/or give it away to households. When a household finds it has more cash, it tends to spend some of it (gasps of amazement). That increases demand.
Alternatively, if the new money is directed towards public spending, than that extra spending also increases demand. (Incidentally, helicoptering is more common than many people think: that is, when government implements standard fiscal stimulus (government borrows $X, spends it and gives $X of bonds to lenders) and then then central bank prints money and buys back some of those bonds (which the CB is quite likely to do at least to some extent) then to the extent the latter “buy back” takes place, that whole exercise equals helicoptering.
Sunday, 16 October 2016
Australian residential dwelling stock value to GDP ratio 1880-2016.
Private nonfinancial debt as % of GDP.
Contributions to EU budget.
Fed remittances to the Treasury.
Gender gap in PhDs.
GDP losses due to pollution.
England: population of the North as % of total population.
The effect of QE.
Which countries host the most refugees?
Which nationalities consider religion important?