In December 2008, the Federal Reserve took the specific policy interest rate that it targets--the so-called "federal funds interest rate"--down to the range of 0% to .25%. The Fed then held the federal funds interest rate at this near-zero level for seven years, until December 2015. Since then, the Fed has raised the federal funds interest rate eight times in small steps, with the most recent step at its September 27 meeting, so that it now is in the range of 2% to 2.25%. How much higher is the Fed going to go?
The US stock market is close to being in a corrective phase -10% off its highs. Global debt has passed $63trln – well above the levels of 2007. Interest rates are still historically low, especially given the point in the economic cycle. Predictions of a bear-market may be premature, but the headwinds are building.
Back in 1990, the World Bank defined an "absolute poverty" line. It was based on the actual poverty lines as chosen by the governments of low-income countries around the world, and thus can be taken to represent those people who are beneath the most basic minimums for basic necessities like food, shelter, and clothing. This poverty line has been updated over time to adjust for changes in prices and exchange rates, and currently stands at $1.90 in consumption per person per day. The World Bank provides an overview of global poverty in its annual "Poverty and Shared Prosperity" report for 2018, titled "Piecing Together the Poverty Puzzle." Here are some points that caught my eye.
Both technological developments and international trade can disrupt an economy, and in somewhat similar ways, but many people have very different reactions to these forces. To illustrate the point, I sometimes pose this question:
Markets for beer, wine and spirits offer can patterns of broad cultural interest--and for the college teacher, may serve to attract the attention of students as well. Kym Anderson, Giulia Meloni, and Johan Swinnen discuss "Global Alcohol Markets: Evolving Consumption Patterns, Regulations, and Industrial Organizations" in the most recent Annual Review of Resource Economics (vol. 10, pp. 105-132, not freely available online, but many readers will have access through a library subscription). The authors take a global perspective on the evolution of alcohol markets. Here are a few points of the many that caught my eye.
If you go back 70 years, the share of women and men living together before marriage was under 1%. If you go back 50 years, it was less than 10%. Now, about 70% of men and women live together before marriage.
Remittances are money sent back to a home country by emigrants. On a global basis, remittances to developing countries topped $400 billion in 2017, far exceeding foreign aid to those countries, similar in size to flows of loans and equity investment in those countries, and beginning to approach the level of foreign direct investment in those countries.