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Contents
- Note from Claudia
- Economy of the Realm of Yohannes
- Economic situation beyond the International Incidents
- Explicit target inflation rate
- Imperial Cash Rate and the Economic Palace
- Exchange rates
- Interindustry outlook
- Topic of the Year — Election bribes and lolly scrambles
- Analysis and Forecasts
December, 2018
The Year of our Lord Maxtopia
Last Month of the Year
Economic Review
Note from Claudia
Welcome to our Last Month of the Year Economic Review for 2018
My trailblazing economist nana once told me that it is a wee bit easier to forecast the weather than to forecast the economy. A meteorologist can always check the morning sky from an upstairs window. However, an economist cannot do the same, because they must wait for the most up-to-date data on the state of the economy.
Looking ahead to the start of the December 2018 quarter and the year 2019, we can see that the drivers of demand will be mixed. Following the presidential election of Marion Maréchal-Le Men in January and, subsequently, the resurgence of the protectionist Greens, we had warned the market that the government would adopt a “Yohannes First” economic policy inspired by the Nifonese Shogun Maki Kojiro’s policies, and because of that, measures such as the unilateral currency intervention will follow. The Quertz russling will then depreciate and import prices for things such as petrol and diesel on the Yohannesian continent will rise. Today, they all have come to pass.
Excessive immigration has been slashed since the GOP took the Electoral College, and as a consequence the housing market has cooled. The manufacturing export economy has grown—although only slightly—because of the introduction of new programmes such as “Marioncare” and the Infrastructure of Nation-State Significance, things that Marion Maréchal-Le Men said “have been implemented to combat the influence of international neoliberal corruption in Yohannes and to take back our nation for our people to build much-needed infrastructure for our future children.” They give us hints that a mix of stimulatory government spending and the correction of the Quertz russling to its “rightful place” will result in slightly favourable terms of trade for small and medium-sized exporters in the Nineteen Countries come 2019.
On the supply side, the economy is starting to feel the after-effects of the government’s “Yohannes First” policy. Companies are starting to struggle to find workers. The Export education industry is now struggling to fill seats. The recent focus on “quality not quantity” has resulted in less net migration from “uncivilised” countries.
The decision of the United States of America’s Federal Reserve System under the 45th President Donald Trump to hike the discount rate[Note 1] could possibly result in the United States Federal Government paying higher rate for their 10-year bond relative to many governments—including the Nineteen Countries government. This is something unprecedented. This could prevent the government from keeping the Quertz russling low vis-à-vis the Universal Standard Dollar, which was one of the main goals of the currency intervention.
Throughout 2018, we have seen many Yohannesian politicians—surprisingly, including politicians from the Christian Democratic Party—offering free lollies by using stimulatory spending schemes and proverbial handouts inside the Beltway. No doubt, we will see more of this carrot dangling approach to politics once the 116th Parliament has been formed February next year, as this year’s Last Month of the Year Economic Review’s Topic of the Year attempts to show.
Claudia—Intern, Macroeconomic Research and Advisory
Note 1: Out-of-Character (OOC) information, based on real-life event, i.e. the Federal Reserve actually hiking rate.1 • Last Month of the Year Economic Review • December 2018