More in Global Economy


4 months

Is the US Economy Having an Engels' Pause?

Consider a time period of several decades when there is a high level of technological progress, but typical wage levels remain stagnant while profits soar, driving a sharp rise in inequality. In broad-brush terms, this description fits the US economy for the last few decades. But it also fits the economy of the United Kingdom during the first wave of the Industrial Revolution in the first half of the 19th century.

4 months

Latin America: Missing Firms, Slow Growth, and Inequality

The economies of Latin America have gone through a series of different periods in the half-century or so. There was an "import substitution" period back in the 1960s and 1970s, where the idea was that government would direct industrial development in a way that would remove the need for imports from high-income countries. This was followed by the "lost decade" of the 1980s, a period of very high inflation, slow growth, and defaults on government debt. The 1990s was sometimes labeled as at time of economic liberalization or the so-called "Washington consensus." Starting around 2000, there was a "commodity supercycle" when first a global rise in commodity prices led to faster growth across much of Latin America, but then more recently a drop in commodity prices slowed down that growth.

5 months

Universal Basic Income - Combined With What Else?

The idea of a "universal basic income" has some immediate attraction along with other slogans like a guaranteed government job or single payer health insurance, the devil is in the details.

5 months

Uncertainty and the Countdown to the US Presidential Elections

·        JP Morgan analyse the impact of 14,000 presidential Tweets ·        Gold breaks out to the upside despite US$ strength ·        China backs down slightly over Hong Kong ·        Trump berates Fed Chair and China

5 months

Why The ECB Should Raise Rates

Negative rates are likely one of the reasons behind the lacklustre European growth. Negative rates have worked as a tool to transfer wealth from savers to the indebted governments that have abandoned all structural reforms, while these extremely low rates have also perpetuated overcapacity, incentivised the refinancing of zombie companies and effectively worked as a disguised subsidy on low productivity. Not only those measures have damaged banks, but they have also created very dangerous collateral impacts (read “Negative Rates Have Damaged Banks But This Is Not The Worst Effect”).

5 months

China and India Build Internal Supply Chains

One of the key questions in the escalating US trade disputes with China and other countries is how much the economy of other countries depends on trade. The answer helps to determine how much leverage the US has in trade disputes. Thus, it's interesting to note that starting about a decade ago, both India and China started reducing their dependence on exports as a source of growth, while doing more to build internal supply chains and relying more on domestic products.

5 months

US Multinationals Bring Foreign Earnings Back Home

The Tax Cuts and Jobs Act of 2017 largely eliminated taxes on US multinational corporations when they bring profits earned in other countries back to the use. As a result, there has been a dramatic rise in the dividends that U.S. parent companies received from their their foreign affiliates. Sarah A. Atkinson and Jessica McCloskey of the US Census Bureau offer some striking illustrations of this change, along with other data on international flows of investment in and out of the US economy, in "Direct Investment Positions for 2018: Country and Industry Detail," published in the August 2019 Survey of Current Business.