Angus Deaton has long been one of my favorite economists, with work that ranges from the technical to the extremely practical. I particularly enjoyed his thoughtful comments on GDP in rich and poor countries (they consume different products, hard to compare) and happiness research (what does it mean when poor people tell us they’re happy?). Quartz has the best short summary, but see also his collection of popular writing and Google Scholar page. Also the Nobel announcement.
Posts Tagged ‘global economy’
From the World Bank:
The number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population in 2015, according to World Bank projections released today, giving fresh evidence that a quarter-century-long sustained reduction in poverty is moving the world closer to the historic goal of ending poverty by 2030.
A lot of this comes from China and India, but you see similar patterns across the board.
China has been a constant source of speculation in the econ group here. Some thoughts (quotes approximate):
- Slowdown or crisis? Nouriel Roubini: “I don’t see a hard landing. Growth should be 6-6.5% over the next two years, 5% in the medium term.” That’s slower than we’ve seen, but would look pretty good anywhere else.
- Impact on the US? Lew Alexander, at the CGEB’s forum last week, thought the impact on the US would be small: “The US is still to a remarkable degree a closed economy. A slowdown in China is not that big a deal to the US — unless there’s a financial crisis.” That fits lots of evidence that shows only modest relations between economic fluctuations across countries. The 2008-09 financial crisis was an obvious exception, but that’s the point: it was an exception.
From today’s FT:
A leading journalist at one of China’s top financial publications has admitted to causing “panic and disorder” in the stock market, in a public confession carried on state television.
The detention of Wang Xiaolu, a reporter for Caijing magazine, comes amid a broad crackdown on the role of the media in the slump in China’s stock market, which is down about 40 per cent from its June 12 peak. Nearly 200 people have been punished for online rumour-mongering, state news agency Xinhua reported at the weekend.
Hyperinflations — annual inflation above 100 percent — have the same appeal as car accidents, it’s hard to look away. Even better, we know how they work: government deficits financed by printing money. The more money you print, the less it’s worth. It’s not complicated.
Venezuela is the latest to join the club. Hyperinflation expert Steve Hanke estimates the inflation rate at 700 percent, which means currency loses one third of its value every month. Price controls have led to widespread shortages of food, medicine, and toilet paper — there’s even a Wikipedia page on the subject.
All of this reflects poor governance: the Venezuelan government simply doesn’t work for most of its citizens.
For lovers of irony, here’s a good one. It seems LA, which is considering an increase in the minimum wage to $15, is now being pressed to offer an exemption — for employers of union workers. More here and here. Labor leaders, of course, have been “among the strongest supporters” of the policy, ostensibly because it would help poor people. As we noted in class, there’s a better way to help poor people: give them money. That’s more or less what the Earned Income Tax Credit does.
Bloomberg has a great piece on Brazil’s massive corruption scandal [lightly edited for continuity]:
Prosecutors have named 16 companies that allegedly formed a cartel to fix [government-owned oil company] Petrobras contracts between 2006 and 2014. The list includes some of Brazil’s largest construction and engineering firms. [They] say the builders got away with it by paying kickbacks, usually 3 percent, on every contract. Petrobras estimates that the graft added up to at least 6.2 billion reais, much of which, prosecutors say, was funneled to [political] parties.
The authors argue that corruption has hurt Brazil’s economy, which is going through its “worst four-year slump in twenty-five years,” but they trace the system back to the 1960s:
Publishing is going through enormous change right now. We found that out for ourselves when we entered the business with our notes for Global Economy, a course in macroeconomics for business students with an international focus. A quick summary of our experience: