Apple: the next iMac would adopt a new design and an Apple Silicon processor this year

For the first time since 2012, Apple would finally renew the design of its iMac. In 2021, Apple is preparing at least three new desktop Macs. According to Bloomberg's Mark Gurman, who also released information on future MacBook Pros and iPhone 12 successors in recent days, Apple will announce an iMac and two Mac Pros in 2021. The transition to Apple Silicon processors gives a new blows to the computers of the Californian giant.     iMac: finally an edge-to-edge screen This year, the iMac could change completely. Mark Gurman indicates that the borders of his screen would be much smaller, like Pro Display XDR, the ultra high-end screen launched by Apple with the Mac Pro in 2019. The back of the computer would also abandon the curvature in favor of a completely flat frame.  This new iMac would also be equipped with an Apple Silicon processor, probably a more powerful chip than the Apple M1 chip currently present in the MacBook Air, MacBook Pro and Mac mini. The 2021 iMac is reportedly

Economic recovery: beware of the crowding-out effect | France

The health crisis we are going through is both a demand shock (households no longer consume because businesses are closed) and a supply shock (companies no longer produce because they are closed). To deal with this, the measures put in place by the French government are essentially Keynesian, shared by the other European countries and guaranteed by a relaxation of the budgetary constraints of the Maastricht Treaty. Keynesianism is a school of thought founded by British economist John Maynard Keynes. For Keynesians, the state has a role to play in the economic field (especially in the context of a stimulus policy) because the markets left to themselves do not necessarily lead to the economic optimum.

Economic recovery: beware of the crowding-out effect

Among the many measures announced, the President of the Republic Emmanuel Macron announced a few days after the start of containment a plan of 45 billion euros to support businesses to protect against the decline in investments, production difficulties and bankruptcies which would result in rising unemployment. For its part, the use of partial unemployment, also used by former President of the Republic Nicolas Sarkozy in 2009, is taking on an unprecedented scale. This system once again demonstrates its social and economic relevance, in particular because it addresses both the revival of supply and demand.

  • It is indeed a relevant remedy for three essential reasons:
  • It guarantees an income to all employees deprived of their work, thus inviting a resumption of consumption as soon as the health crisis is brought under control.
  • It also guarantees businesses the resumption of production (itself supported by the return of consumption).

Finally, it offers companies the opportunity to consider their human resources beyond the only cost that they represent: these are skills that guarantee them a resumption of activity as efficiently as possible, supported by orders that adjust labor law until the end of 2020.

An increase in potentially risky debt

Faced with these measures of exceptional magnitude, European governments do not have the cash necessary to finance the recovery, issue treasury bills and increase the amount of their debt. In the case of France, the Minister of Economy Bruno Le Maire also warned on March 17 of a deterioration in public finances beyond 100% of GDP, which raises the debate on the sustainability of public debt in the post-crisis. Because there is a debate, the experts do not agree on the maximum debt threshold which would theoretically constitute an economic risk: if some establish it around 90% of GDP, others emphasize that this indicator is incomplete and disempowering , preferring to study public debt with regard to government revenues, with a ratio of 1 to 5 to be sustainable.

On the other hand, there is unanimity on the existence of a risk of crowding-out effect underlying a fiscal stimulus financed by debt, also called “Barro-Ricardo theorem”. Specifically, up to a certain threshold, public debt is neutral on household consumption and business investment decisions. The fiscal stimulus, whatever its form - lowering taxes, increasing social assistance or more generally public spending - has a multiplier effect on the economy, allowing demand to increase more than proportional to the initial financial injections of the state. But when the threshold of public debt is exceeded, households and businesses are worried about the future and question the sustainability of a stimulus policy which they may consider too costly.

Fearing that the government may decide to readjust its finances by raising taxes for example, households and businesses anticipate and substitute consumption and investment with savings: demand is no longer revitalized by the multiplier.This is the crowding-out effect, and the debt creates even more deficit and debt, because the demand added by the injections of the State then comes to replace, rather than in addition to, normal demand.

What the 2008 crisis taught France

After the 2008 crisis, unemployment created a demand shock, significantly slowing household consumption, business investment, and exports. The remedy is then purely Keynesian and the famous multiplier will notably allow France to maintain its level of consumption, even at the height of the crisis in 2010. But the crisis will last and the debt created by the States to support their national economies will be deemed unsustainable: the stimulus measures can only be cyclical, austerity will quickly return to the front of the scene forcing European governments to tighten the purse strings.

In this context, French economic growth will take time to reach a satisfactory level, and the hopes of the President of the Republic at the time, Fran├žois Hollande, will be dashed in this area. Its “60 commitments for France”, by combining rigor and revival, will find it difficult to contain the crowding out effect specific to the European Union. Indeed, following the manipulation of information from Greece announced in 2010 by its Prime Minister, Europe has increased its attention to the Maastricht indicators, considered as the conditions necessary for the stability of the Union and its currency. The European Semester was then created in order to validate the orientations of budgetary policies of the European countries members of the euro zone. By regularly recalibrating the budgets proposed by States like that of Italy in 2018, this body will permanently anchor in the collective unconscious the debate on the amounts of public debts. It will also influence the perception of households and businesses as to the merits of the stimulus policies implemented by Fran├žois Hollande.

Limit the crowding-out effect "whatever it costs"

To date, the way in which European states and institutions are managing the Covid-19 crisis seems to take into account the mistakes of economic governance of the past. The stakes are immense and economists are already alerting to a possible “coronavirus” tax, like Jean-Marc Daniel, professor at ESCP, during his visit to the C in the air broadcast on March 28th. To limit the crowding-out effect after this exceptional crisis, fiscal rules were set aside on March 20 with the consent of the entire eurozone. The European Stability Mechanism, the euro area financial crisis management system adopted in 2012, could be mobilized for the most fragile states like Italy. For its part, the European Central Bank (ECB) quickly entered the scene, ensuring that the States repurchase debt securities through an open market operation of 750 billion euros necessary to finance the exceptional measures taken by the countries. This operation consists of an intervention by the central bank on the money market through purchases and sales of securities in exchange for liquidity.

The European monetary authorities are thus using the same tools as during the various crises, tools which seem to have reached their limits. This is why new avenues are emerging in the debate, such as the “monetary helicopter” which consists of distributing money directly to consumers and businesses. One could also imagine that the outright cancellation of debts, of the State as those of private companies, is considered. However, there is little chance that such a measure will be adopted. Indeed, as Emmanuel Macron said in April 2018, during a visit to the Rouen University Hospital Center (CHU), "there is no magic money". A moratorium, that is to say a pause in the repayment of loans would seem more appropriate.