Economics

With Some Greek Relief, Attention Turns Toward U.S. and Canadian Economic Data


Kicking the can just far enough down the road to push the Greek drama off center stage, the diverging monetary policies reemerged this week as a key force. Yellen and Carney's comments underscore that less accommodative monetary policies are coming for the US and UK, while much of the rest of the high-income countries (and many emerging markets) are still in an easing mode.

Why 2016 Presidential Candidates Should Talk About 'Classes'


In the 2016 presidential race, candidates from both major parties are looking for ways to address inequality.

Partly, they must do so because seven years after the 2008 crash, many Americans still are not getting ahead, according to several analyses by the Economic Policy Institute think tank. In fact, that is nothing new. Factoring in inflation, wage growth has stagnated for the bottom 90% of Americans since 1979.

Using the Power Bestowed Upon You for Good


It may seem that after several recent electoral defeats of prominent national dynasts, Asia’s ‘ruling families’ are in decline. However, a closer look suggests that reports of their political deaths are premature.

The most prominent recent setback was the crushing defeat of the Nehru-Gandhi dynasty-run Indian Congress Party in the May 2014 elections, which swept the Hindu nationalist Bharatiya Janata Party (BJP) to power and left the Congress Party with only 44 seats in the Indian parliament.

The Tangible Benefits to China from its Low Carbon Trajectory


China has submitted its formal pledge to the UN climate negotiations. China’s target is a 60–65 percent reduction in the emissions intensity of its economy compared to 2005 levels by 2030, with carbon dioxide emissions peaking around 2030, and ‘best efforts’ made to peak earlier. China’s pledge will require a sustained policy effort, and it tallies with underlying trends in the economy and with overarching national policy priorities.

The ECB Leaves Policy Unchanged, but Greece Gets More ELA


The ECB left policy unchanged.  The economic assessment was unchanged, in line with the staff forecasts made last month.  The asset purchases continue to go smoothly.  Inflation bottomed earlier this year, and it expects to remain low over the next several months before rising later in the year.  He saw the recent drop in oil prices as boosting the purchasing power of consumers, but did not link it to new pressure on headline inflation.  Both the supply and demand of credit has improved.

Central Bank Monetary Policies Going Their Own Way


The US dollar remains bid.  Yellen's comments and the Beige Book signal that the Federal Reserve is still on track to raise rates this year.  In contrast, as the Draghi will make clear today, the ECB is committed to completing its unorthodox easing. 

Yesterday the Bank of Japan trimmed its inflation forecasts.  It no longer expects to hit its target until after 2018.  Many continue to expect the BOJ to provide more stimuli.  Derision met the news that China's GDP expanded by 7% last quarter.  Expect more stimuli from the PBOC.

Africa as a Teaching Tool on Austerity and Structural Change


Some have asked what Africa can learn from Greece.  I argue that Greece (and others) can learn a lot from the African experience.

Debt is on the rise again not just in Greece, but also across the world. A decline in commodity prices with a strengthening of the US dollar makes debt unsustainable in many economies. These developments have led to rising proportions of government revenues being spent on debt servicing and debt accounting for higher and higher proportions of total GDP.

The UK's National Living Wage Plan: Pay Increases and Job Losses


We have become used to living with the productivity puzzle but the labour market figures released today now add a labour market conundrum. The total number of people in work fell by nearly 70,000 comparing the three months to May 2015 with the previous three months – the first significant dip in the figures since 2010. But why? We would normally associate sharp falls like this with the onset of recession, and there is absolutely no sign of that.

Yellen Moves Yields


Those regional Federal Reserve banks that want to hike the discount rate are gradually increasing.  Last month, the Richmond Fed joined four other regional Fed banks (Dallas, Kansas City, Philadelphia, and Cleveland). 

The New Development Bank is a Linchpin for the BRICS' Countries


Greece was the first non-member to be offered BRICS membership, even though ironically the association of the emerging economies is yet to take off. The New Development Bank (NDB) operated by the five member-countries of Brazil, Russia, India, China and South Africa (BRICS) is all set to take off with an intention to develop economic relations amongst developing countries. It is considered to be an important institution since it is the first to be created by emerging countries with the hope to finance many important projects.