Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

24 April 2019

Former White House economist: U.S. 'shooting ourselves in the foot' in trade war

Aarthi Swaminathan

A former White House official believes that President Donald Trump’s art of the deal is akin to “shooting ourselves in the foot” when it comes to the U.S. economy

As the U.S.-China trade negotiations drag on without a firm end date, “the Trump administration's gotten themselves into a bit of a fix where the options don't look terribly good,” Chicago Council on Global Affairs senior fellow Phil Levy told Yahoo Finance’s On The Move (video above). “This all has to do with their desire to keep their options open to strike at the Chinese whenever they want, or whenever they think the Chinese have done something wrong.”

Levy, who was formerly a senior economist for trade on former President George W. Bush’s Council of Economic Advisers, said that the administration’s strategy in trying to solve the various issues America has with China — which range bilateral trade deficits to unfair trade practices — had already been talked about by “at least two administrations.”

We need a reskilling revolution. Here's how to make it happen

Børge Brende

Valuing human capital not only serves to equip individuals with the knowledge and skills to respond to systemic shifts, it also empowers them to take part in creating a more equal, inclusive and sustainable world.

Education is and will remain critical for promoting inclusive economic growth and providing a future of opportunity for all. But as the technologies of the Fourth Industrial Revolution create new pressures on labour markets, education reform, lifelong learning and reskilling initiatives will be key to ensuring both that individuals have access to economic opportunity by remaining competitive in the new world of work, and that businesses have access to the talent they need for the jobs of the future.

The Fourth Industrial Revolution is causing a large-scale decline in some roles as they become redundant or automated. According to the 2018 Future of Jobs Report, 75 million jobs are expected to be displaced by 2022 in 20 major economies. At the same time, technological advances and new ways of working could also create 133 million new roles, driven by large-scale growth in new products and services that would allow people to work with machines and algorithms to meet the demands of demographic shifts and economic changes.

22 April 2019

Pakistan’s Economic Woes: The Way Forward

By Shahroo Malik

Pakistan’s economic woes – dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit, and current account deficit – are nothing new, and once again, the country finds itself knocking on the doors of the International Monetary Fund (IMF) for what will be its 22nd loan. While the exact amount of this package has not been determined, Pakistan already owes the IMF billions from previous programs. Indeed, 30.7 percent of Pakistan’s government expenditure is earmarked for debt servicing, which cannot be supported by its decreasing revenues. Already on the Financial Action Task Force’s (FATF) grey list, and with the current Pakistan Tehreek-e-Insaaf (PTI) government enjoying internal institutional consensus on the national agenda, Pakistan must focus its attention on resolving its economic woes before it finds itself on the shores of bankruptcy.

Current State of the Economy

Is the World Economy Headed for a Fall?


The International Monetary Fund (IMF) has once again cut its global growth forecast for 2019. In its new semi-annual World Economic Report, the organization now projects a 3.3% growth rate, down from the 3.5% it predicted in January, 3.7% in October and 4% a year ago. Key reasons for the downward revisions: the U.S.-China trade war and the potential for a disorderly Brexit.

Added to those concerns is a general tightening of monetary policy globally, particularly the spate of interest rate increases in the U.S. IMF chief economist Gita Gopinath wrote that with 70% of the global economy seeing a slowdown in growth, it is “a delicate moment right now.”

What might strike some as the relatively small size of the recent decreases in the IMF’s forecast belies the large impact such cuts in growth can bring on the ground to people and businesses, particularly in countries already struggling that could easily be tipped into a recession. At the same time, it’s worth noting that each of the IMF concerns has been partly ameliorated more recently. The immediate Brexit risk has been pushed back by a deadline extension to October, the outlook for the U.S.-China trade war – at this moment at least — looks more sanguine, and the Fed has clearly become more dovish, making further rate increases this year unlikely and raising the possibility of a rate cut.

We need a reskilling revolution. Here's how to make it happe

Børge Brende

As the world faces the transformative economic, social and environmental challenges of Globalization 4.0, it has never been more important to invest in people.

Valuing human capital not only serves to equip individuals with the knowledge and skills to respond to systemic shifts, it also empowers them to take part in creating a more equal, inclusive and sustainable world.

Education is and will remain critical for promoting inclusive economic growth and providing a future of opportunity for all. But as the technologies of the Fourth Industrial Revolution create new pressures on labour markets, education reform, lifelong learning and reskilling initiatives will be key to ensuring both that individuals have access to economic opportunity by remaining competitive in the new world of work, and that businesses have access to the talent they need for the jobs of the future.

This chart shows the fall in coal-power plants being planned around the world

Douglas Broom

Coal is widely acknowledged as one of the most polluting ways to generate electricity. The International Energy Agency (IEA) calculates that this one fuel alone has been responsible for a third of all global warming in modern times.

So, the news that the amount of planned new coal-fired generating plants reached a new low last year must be good for the planet. The amount of planned capacity fell by over a third last year and was 84% down on the figure for 2015.

But although fewer new coal-fired power stations are being planned, those already approved are still being built. Global Energy Monitor says there was a 12% increase in the amount of coal-fired capacity under construction last year. And the IEA reported this week that coal usage rose last year for the second year in a row, reversing two years of decline up to 2016 and contributing to a 1.7% increase in CO2 emissions.

Banking on the Future of Cryptocurrencies


Charlie Lee is lauded in cryptocurrency circles as the creator of Litecoin, an alternative to Bitcoin he conceived in 2011 as a Google software engineer. Today, Litecoin is the sixth-largest crypto with a market cap of $5 billion. It bears many similarities to Bitcoin, but also has important differences: Transactions are confirmed 75% faster, it has greater liquidity with four times more coins in circulation, and it is more resistant to manipulation by miners holding 51% control of the network.

In 2017, Lee sold his entire stake in Litecoin and now serves as managing director of the Litecoin Foundation, which seeks to advance Litecoin and develop blockchain technologies for the social good. At the recently held second annual Penn Blockchain Conference, Lee sat down with Knowledge@Wharton to talk about the philosophy behind Litecoin’s creation, whether cryptos will replace hard currency and what’s next for him.

An edited transcript of the conversation follows.

Is the World Economy Headed for a Fall?


The International Monetary Fund (IMF) has once again cut its global growth forecast for 2019. In its new semi-annual World Economic Report, the organization now projects a 3.3% growth rate, down from the 3.5% it predicted in January, 3.7% in October and 4% a year ago. Key reasons for the downward revisions: the U.S.-China trade war and the potential for a disorderly Brexit.

Added to those concerns is a general tightening of monetary policy globally, particularly the spate of interest rate increases in the U.S. IMF chief economist Gita Gopinath wrote that with 70% of the global economy seeing a slowdown in growth, it is “a delicate moment right now.”

What might strike some as the relatively small size of the recent decreases in the IMF’s forecast belies the large impact such cuts in growth can bring on the ground to people and businesses, particularly in countries already struggling that could easily be tipped into a recession. At the same time, it’s worth noting that each of the IMF concerns has been partly ameliorated more recently. The immediate Brexit risk has been pushed back by a deadline extension to October, the outlook for the U.S.-China trade war – at this moment at least — looks more sanguine, and the Fed has clearly become more dovish, making further rate increases this year unlikely and raising the possibility of a rate cut.

21 April 2019

PAKISTAN’S ECONOMIC WOES: THE WAY FORWARD

by Shahroo Malik

Pakistan’s economic woes – dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit, and current account deficit – are nothing new, and once again, the country finds itself knocking on the doors of the International Monetary Fund (IMF) for what will be its 22nd loan. While the exact amount of this package has not been determined, Pakistan already owes the IMF billions from previous programs. Indeed, 30.7% of Pakistan’s government expenditure is earmarked for debt servicing, which cannot be supported by its decreasing revenues. Already on the Financial Action Task Force’s (FATF) grey list, and with the current Pakistan Tehreek-e-Insaaf (PTI) government enjoying internal institutional consensus on the national agenda, Pakistan must focus its attention on resolving its economic woes before it finds itself on the shores of bankruptcy.

Current State of the Economy

Alan Greenspan: Can the U.S. Economy Stay on Top?


The markets are jittery about a possible recession. The U.S. Federal Reserve’s decision earlier this year to ease off further interest rate increases in 2019 as it keeps a watchful eye on economic signals — after doing four hikes in the previous year — has only buttressed those fears.

But former Fed Chairman Alan Greenspan does not see a recession on the horizon, based on an indicator his firm constructed and tracks. “Right at the moment, that particular series shows we’re still deleveraging. It’s very difficult to envisage that sort of economy going into a recession,” he said during an interview with Wharton professor Kent Smetters, faculty director of The Penn Wharton Budget Model, at a forum focused on Greenspan’s new book, Capitalism in America: A History, which he co-authored with Adrian Wooldridge of The Economist.

Greenspan’s consulting firm developed an indicator that tracks a company’s capital appropriations at the time its board authorizes an investment, instead of waiting for the decision to be reflected in the expenditures report months later. This signal has been an “extraordinarily effective leading indicator of recessions,” Greenspan noted.

20 April 2019

Oil Market Update: Checking in on Venezuela


In recent days, while oil markets have reacted to fast moving developments in Algeria, Sudan, and Libya, the governance stalemate in Venezuela has continued. The country’s humanitarian crisis continues to devolve, and neighboring nations are feeling the impact of increasing numbers of refugees. Given our previous reporting on the state of play in Venezuela, we thought it useful to update our assessment of market impacts as we move into spring post-maintenance season and examine the implications of recent crude oil and product shipments.

It’s been almost three months since Juan Guaido, the then-newly elected leader of the National Assembly, invoked Article 233 of the country’s constitution and assumed Venezuela’s presidency, pending new elections. On February 11, we published a commentary assessing potential impacts on the global oil market and outlining a series of scenarios for what the coming months were likely to bring in Caracas.

18 April 2019

Peaceful Coexistence 2.0

DANI RODRIK

Today’s Sino-American impasse is rooted in “hyper-globalism,” under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world’s largest trading economy is a regime in urgent need of repair.

CAMBRIDGE – The world economy desperately needs a plan for “peaceful coexistence” between the United States and China. Both sides need to accept the other’s right to develop under its own terms. The US must not try to reshape the Chinese economy in its image of a capitalist market economy, and China must recognize America’s concerns regarding employment and technology leakages, and accept the occasional limits on access to US markets implied by these concerns.

The term “peaceful coexistence” evokes the Cold War between the US and the Soviet Union. Soviet leader Nikita Khrushchev understood that the communist doctrine of eternal conflict between socialist and capitalist systems had outlived its usefulness. The US and other Western countries would not be ripe for communist revolutions anytime soon, and they were unlikely to dislodge the Communist regimes in the Soviet bloc. Communist and capitalist regimes had to live side by side.

Multilateralism’s Crisis Is an Opportunity

LIU ZHENMIN

Increasingly destructive natural disasters, geopolitical shifts, and glaring inequalities have forced the international community to acknowledge that existing frameworks for addressing global issues collectively are in need of an overhaul. In fact, this may be the world's last chance to get serious about sustainable development.

NEW YORK – When Cyclone Idai hit Mozambique, Malawi, Zimbabwe, and Madagascar last month, it left almost one thousand people dead, and hundreds of thousands more homeless, hungry, and threatened by disease. According to one estimate, more than $1 billion worth of infrastructure could have been lost.

Such catastrophes have become depressingly familiar. Idai was the latest in a series of extreme weather events showing us that the devastating effects of climate change lie not in some distant future, but in the present. Worse, the world’s poorest and most vulnerable communities are being hit the hardest. Mozambique – the country that suffered the most damage from Idai – will have to rebuild with both hands tied behind its back, because it is currently stuck in negotiations to restructure its unsustainable debt.

Unlocking the economic potential of Central America and the CaribbeanApril 2019 | Article

By Andres Cadena, Julio Giraut, Nicolas Grosman, and Andre de Oliveira Vaz


Over the past 15 years,1 the economies in Central America and the Caribbean (CAC) recorded an average annual GDP growth of around 4 percent, higher than the growth rates achieved by the Latin American average and most developed economies, but well below most other developing regions; regions such as South Asia and sub-Saharan Africa—and countries such as China or India—exhibited average annual growth of more than 5 percent during this period.

However, growth has not been sustained by all CAC countries. In fact, only three countries (Costa Rica, the Dominican Republic, and Panama) have grown above the regional average over the last 30 years, and only the former two exhibited higher than average growth rates in both analyzed periods. Indeed, most nations have presented high volatility in economic growth since 1987 (Exhibit 1).

17 April 2019

Labor Is In High Demand In The U.S.

by Felix Richter

The number of job openings in the United States dropped to an 11-month low of 7.1 million by the end of February, according to new figures released by the U.S. Bureau of Labor Statistics this week. Despite the 538,000 decline in job openings, the number of unfilled positions still exceeded the number of jobless, which stood at 6.2 million in February, according to the BLS.

The number of job openings has now continuously exceeded the level of unemployment in the U.S. since March 2018, indicating high demand for labor, especially in the private sector where 6.4 million positions were unfilled at the end of February. The fact that qualified workers are a scarce resource these days should benefit workers, as the normal reaction to demand exceeding supply is rising prices, i.e. wages.

16 April 2019

Economics Sure, but Don’t Forget Ethics with Artificial Intelligence

Richard Kuzma and Tom Wester

The widening rift between the Pentagon and Silicon Valley endangers national security in an era when global powers are embracing strategic military-technical competition. As countries race to harness the next potentially offsetting technology, artificial intelligence, the implications of relinquishing their competitive edge could drastically change the landscape of the next conflict. The Pentagon has struggled—and continues to struggle—to make a solid business case for technology vendors to sell their products to the Defense Department. This is made especially urgent by Russia and China’s increasing artificial intelligence capabilities and newly created national strategies. While making the economic case to Silicon Valley is critical, building a lasting relationship will necessitate embracing the ethical questions surrounding the development and employment of artificial intelligence on the battlefield. Ultimately, this requires more soul-searching on the part of both military leaders and technologists.

It is hard to overstate the importance of ethics in discussions of artificial intelligence cooperation between the military and private sector. Google chose not to renew a Department of Defense contract with Project Maven—a Defense Department project using artificial intelligence for drone targeting—when thousands of employees protested the company’s involvement. Thousands of artificial intelligence researchers followed their letter by signing a pledge to not build autonomous weapons. Computer science students from Stanford and other top-tier universities, a primary talent pipeline for tech companies, wrote a letter to Google’s chief executive officer saying they would not interview with Google if it did not drop its Maven contract. 

The IMF Paints a Less Robust Economic Picture for 2019


As Stratfor laid out in its annual and second-quarter forecasts, while the global economy is cooling, it is not necessarily heading toward recession. In its latest World Economic Outlook released April 9, the International Monetary Fund (IMF) downgraded its estimates of expected annual growth for most countries in 2019. The IMF now expects the global economy to grow by 3.2 percent, down 0.3 percentage points from its January estimate. The change in expectations was driven by slowing economies in the developed world.

15 April 2019

An economist explains how to go carbon neutral in our lifetim

Nicholas Stern

Fear and despair are an understandable reaction to climate change. Unless we radically change the way we live, we're on the path to a terrifying future of wild storms, scorched earth and conflict. In fact, it's already happening.

But the way the world economy works is not set in stone. Professor Nicholas Stern, one of the most influential economists in the field of climate change, argues that we already have all the tools we need to turn the economy carbon neutral and create a better future for humanity.

At Davos this year, as the youth activist Greta Thunberg urged leaders to act as if "our house is on fire," I talked to Professor Stern about what it would really take to change course. This is an edited transcript of the interview.

What will happen if the world economy carries on with business as usual?

An economist explains the pros and cons of globalization

Gita Gopinath

As we enter the fourth wave of globalization, driven by the digital revolution, there is renewed debate over whether it is a beneficial force: powering economic growth, and allowing the spread of ideas to improve people’s lives; or whether it erodes communities, and widens the gap between the elites and the rest of the world.

Globalization results in increased trade and lower prices. It heightens competition within domestic product, capital, and labour markets, as well as among countries adopting different trade and investment strategies.

But how do these impacts net out? What are the positive and negative effects of globalization? The below is an edited transcript of a conversation with Gita Gopinath, Chief Economist of the International Monetary Fund (IMF).

Overall, what are the advantages of globalization?

10 Ways Central Banks Are Researching Blockchain Technology Today

By Ashley Lannquist, Blockchain Project Lead at the World Economic Forum

While research and experimentation with blockchain technology across sectors have been underway for the past several years, few organizations have deployed the technology. Although central banks are among the most cautious and prudent institutions in the world, a recent whitepaperpublished by the World Economic Forum indicates that these institutions, perhaps surprisingly, are among the first to implement blockchain technology.

Central bank activities with blockchain and distributed ledger technology are not always well known or communicated. As a result, there is much speculation and misunderstanding about objectives and the state of research. Dozens of central banks around the world are actively investigating whether blockchain can help solve long-standing interests such as banking and payments system efficiency, payments security and resilience, as well as financial inclusion.