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Contents contributed and discussions participated by Haydn W

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Haydn W

Greece's leader warns Merkel of 'impossible' debt payments - FT.com - 0 views

www.ft.com/...b5-11e4-982a-00144feab7de.html

Foreign Debt Greece EU

shared by Haydn W on 24 Mar 15 - No Cached
  • Greece’s leader warns Merkel of ‘impossible’ debt payments
  • Alexis Tsipras, the Greek prime minister, has warned Angela Merkel that it will be “impossible” for Athens to service debt obligations
  • The warning, contained in a letter sent by Mr Tsipras to the German chancellor and obtained by the Financial Times, comes as concerns mount that Athens will struggle to make pension and wage payments at the end of this month and could run out of cash before the end of April.
  • ...12 more annotations...
  • just before Ms Merkel agreed to meet Mr Tsipras on the sidelines of an EU summit last Thursday and invited him for a one-on-one session in Berlin
  • Mr Tsipras warns that his government will be forced to choose between paying off loans, owed primarily to the International Monetary Fund, or continue social spending.
  • He blames European Central Bank limits
  • “Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations during the spring and summer . . . it ought to be clear that the ECB’s special restrictions when combined with disbursement delays would make it impossible for any government to service its debt,” Mr Tsipras wrote.
  • He said servicing the debts would lead to a “sharp deterioration in the already depressed Greek social economy
  • Mr Tsipras was rebuffed in efforts to secure quick financing from either the ECB or eurozone lenders at Thursday’s Brussels meeting
  • In an interview, Luis de Guindos, Spanish finance minister, said his eurozone counterparts would not sign off on any new bailout funding until a full set of approved reforms was passed
  • Mr Tsipras’s five-page letter is particularly critical of the ECB
  • The Greek prime minister insisted the ECB should have returned to “the terms of finance of the Greek banks”
  • Far from going easier on Athens, the ECB is considering whether to give its guidance to Greek banks more authority by making it a legally binding requirement not to add to their T-bill holdings.
  • He also criticised the ECB for only increasing the amount of emergency central bank loans to Greek lenders “at shorter intervals than normal and at rather small increments”
  • Mr Tsipras wrote that Athens was “committed to fulfilling its obligations in good faith and close co-operation with its partners”, he also warned Ms Merkel that a failure to find short-term funding could lead to much bigger problems.
Haydn W

What are multinationals doing to champion rights of millions trapped in modern-day slav... - 0 views

www.theguardian.com/...ations-compliance-human-rights

Multinational Corporations The Guardian Fair Trade Slavery

shared by Haydn W on 10 Mar 15 - No Cached
  • What are multinationals doing to champion rights of millions trapped in modern-day slavery?
  • With almost 21 million people working in forced labour conditions in the global economy, companies are being made to clean up their act
  • In a world of complex supply chains, migrant workers, sub-suppliers and a constant squeeze on costs, corporate leaders and their stakeholders are keenly aware of the risk of labour exploitation.
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  • No industry or region is fully insulated from the social deficit which has emerged from the rise of the modern global economy.
  • Given the influence and impact that multinational corporations have, there is significant scope for corporate leaders to champion reform and action in this area.
  • However, the ILO estimates that 44% of those working in forced labour are also victims of trafficking (pdf).
  • The fight to eradicate the scourge of forced and child labour, sometimes referred to as modern-day slavery, has re-emerged as a defining issue in this century
  • The International Labour Organization (ILO) estimates that almost 21 million people are currently working in some form of forced labour, with 14.2 million in economic activities such as agriculture, construction, domestic work or manufacturing (pdf).
  • Beginning in California in 2012, following effective campaigning and lobbying to then-governor Arnold Schwarzenegger, mandatory corporate disclosure of a company’s non-financial activities has been on the rise.
  • From US President Obama’s executive order on trafficking and federal procurement, to the UK Modern Slavery Bill’s recent amendment to include supply chain disclosure provisions, to the EU’s adoption of a non-financial reporting directive, compulsory transparency around global corporate practices – including human rights, labour and social impacts and policies – is the latest tool being employed by legislators to place social expectations on corporations.
  • multinational corporations have grown significantly in terms of size, assets, resource control and revenue, not to mention societal influence.
  • This growth has been accompanied by growing expectations by society and government.
  • It is, of course, critical to recognise that the global corporate supply chain can be a force for good.
  • However, with their multiple levels of subcontracting, particularly throughout impoverished regions where labour laws are non-existent or not enforced, global labour and product supply chains also provide fertile ground for inhumane practices and working conditions.
  • The United States Department of Labor, for example, has produced a list of 136 goods produced in 74 countries using forced labour, child labour, or both.
  • Many leading companies already understand that their strategies shape the lives of millions. The most forward-thinking believe that business is an integral pillar of society and recognise that the people they rely on at home and abroad are central to building sustainable and lasting businesses.
  • And since mandatory disclosure requires all multinationals to take notice and action rather than just the industry leaders, this ultimately helps level the playing field.
  • Some believe supply chain transparency laws do not constitute any real change from the prevailing corporate-driven model for CSR, while others oppose increased regulation and oversight as unnecessary state intervention, believing that industry led efforts have the best chance of success.
  • it is a combination of corporate leadership and regulation in this area which will help ensure all market participants rise to acceptable standards.
  • The trend away from voluntary reports towards mandatory social reporting for global corporations is here to stay and may represent a first step towards increased legislative requirements
  • No matter where one believes the solutions lie, the ultimate goal is a global economy free from forced labour, trafficking and other abuses. For the millions of victims who go out into the world seeking work in the hope of building better lives, we must commit to seeking the best path forward.
Haydn W

Will ′Modinomics′ help boost India′s development? | Asia | DW.DE | 12.01.2015 - 1 views

www.dw.de/...a-18185326

Economic Development India DW

shared by Haydn W on 10 Feb 15 - No Cached
  • Will 'Modinomics' help boost India's development?
  • In a bid to transform India's economy, PM Narendra Modi has pledged unlimited reforms at a summit in Gujarat.
  • Indian PM Narendra Modi pledged to slash red tape and banish India's reputation as a hard place to do business. Modi spoke of his plans to lift hundreds of millions of Indians out of poverty, including the opening of more than 100 million bank accounts
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  • More than six months into Modi's rule, India's economic growth remains sluggish, with GDP expanding at an average of 5.2 percent in the first three quarters of 2014.
  • Kerry told the summit the United States looks forward to stronger trade and diplomatic ties with India. Kerry's visit to the South Asian nation, his second in six months, comes just a few weeks before US President Barack Obama is due in New Delhi for talks.
  • Rajiv Biswas, Asia-Pacific Chief Economist at the analytics firm IHS, says that while replicating the Gujarat model across a large and politically disparate country such as India will be difficult, PM Modi's management style is likely to accelerate economic development in significant parts of India, particularly in states where his Bharatiya Janata Party (BJP) holds state government.
  • Haydn W on 10 Feb 15
     
    This interview details the style of policy making to promote growth initated by Narendra Modi, the Indian Prime Minister. Economic growth and development is arguably the most important area of policy in India and will be a huge focal point of any international discussions centered around the region.
Haydn W

ECB's Draghi says euro zone must 'complete' monetary union | Reuters - 0 views

www.reuters.com/...b-draghi-idUSKBN0K90IW20141231

Reuters EU ECB Monetary Union

shared by Haydn W on 19 Jan 15 - No Cached
  • ECB's Draghi says euro zone must 'complete' monetary union
  • (Reuters) - Euro zone countries must "complete" their monetary union by integrating economic policies further and working towards a capital markets union, European Central Bank President Mario Draghi said.
  • Draghi said structural reforms were needed to "ensure that each country is better off permanently belonging to the euro area".
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  • He said the lack of reforms "raises the threat of an exit (from the euro) whose consequences would ultimately hit all members"
  • He said an economic union would make markets more confident about future growth prospects -- essential for reducing high debt levels -- and so less likely to react negatively to setbacks such as a temporary increase in budget deficits.
  • Unifying capital markets to follow this year's banking union would also make the bloc more resilient.
  • Haydn W on 19 Jan 15
     
    This article, from news agency Reuters, outlines Mario Draghi's, head of the European Central Bank (ECB), statement in Italy this week, regarding the Eurozone, a form of monetary integration. Draghi outlined the need for European countries to complete the monetary union and integrate policy to avert another crash. 
Haydn W

Falling oil prices offer the west a great chance to refashion itself. Let's seize it | ... - 1 views

www.theguardian.com/...west-chance-refashion-policies

The Guardian USA Russia Oil Prices Balance of Payments

shared by Haydn W on 05 Dec 14 - No Cached
  • Falling oil prices offer the west a great chance to refashion itself. Let’s seize it
  • For the past 18 months, the world’s biggest oil producer has been the US.
  • One first good result of this oil price shift, however, was witnessed at Opec’s meeting in Vienna last week. The once feared cartel of oil-exporting countries, with Saudi Arabia at its core, a cartel that at one time commanded more than half of global production, is now a shadow of its former self.
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  • the US will maintain this new standing for the foreseeable future, according to official projections.
  • It should be no surprise, then, that in the past rising oil prices were associated with recessions and falling oil prices with booms. If the oil price carries on falling back towards $50 a barrel, and if history is any guide, the western economy should respond – to the good.
  • But although particular companies may lose out, the first-round effect of this fall should provide good news. High oil prices depress economic activity. They suck money from consumer spending and redirect it to oil-exporting countries, which typically hoard it in elephantine foreign exchange reserves or unspent  bank deposits. It is a tax by the few on the many.
  • With the US needing to buy less oil on international markets and China’s growth sinking to its lowest mark for 40 years, there is now, amazingly, the prospect of an oil glut. The oil price instantly nosedived to its lowest level for four years, around $70 a barrel – down more than a third in three months.
  • Suddenly, the balance of economic advantage with Russia, no less dependent on oil and gas exports, will flip. Russia’s 2014 budget was based on an oil price of $100 a barrel. At $70 a barrel, the economy will contract by at least 3% in 2015, the country will run a balance of payments deficit and the government’s finances will spin out of control.
  • The chances of Russia sustaining a surrogate war in Ukraine have suddenly been reduced. All good news.
  • But western governments cannot hope that economic benefits will arrive automatically. These are new times.
  • Uncertainty and fear abound. Interest rates in Britain alone have been pegged at 0.5% for more than five years. But still business is reluctant to invest, not knowing what technologies to back or not knowing how much demand there will be for new products and services. We live in an era of stagnation, “secular stagnation”
  • So falling oil prices offer the world economy a great opportunity. But if it is not leapt upon purposefully by aggressively expansionary economic policy, secular stagnation might worsen.
  • Haydn W on 05 Dec 14
     
    The recent fall in oil prices, largely due to America's newfound dominance in the market, will cause Russia to experience a balance of payments deficit, according to this article from the Guardian. This is based on Russia's overestimate of the forecast for the global oil price and can be said to be an example of how global prices often influence balance of payments for countries, especially when it concerns national resources.
Haydn W

The return of the US dollar | Mohamed El-Erian | Business | theguardian.com - 4 views

www.theguardian.com/...d-el-erian-return-of-us-dollar

shared by Haydn W on 18 Nov 14 - No Cached
  • The return of the US dollar The resurgence of the US currency could be the first promising step in steering the world economy away from crisis
  • The US dollar is on the move. In the last four months alone, it has soared by more than 7% compared with a basket of more than a dozen global currencies, and by even more against the euro and the Japanese yen.
  • Two major factors are currently working in the dollar’s favour
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  • Second, after a period of alignment, the monetary policies of these three large and systemically important economies are diverging, taking the world economy from a multi-speed trajectory to a multi-track one.
  • First, the United States is consistently outperforming Europe and Japan in terms of economic growth and dynamism – and will likely continue to do so – owing not only to its economic flexibility and entrepreneurial energy, but also to its more decisive policy action since the start of the global financial crisis.
  • With higher US market interest rates attracting additional capital inflows and pushing the dollar even higher, the currency’s revaluation would appear to be just what the doctor ordered when it comes to catalysing a long-awaited global rebalancing – one that promotes stronger growth and mitigates deflation risk in Europe and Japan.
  • ECB President Mario Draghi signalled a willingness to expand his institution’s balance sheet by a massive €1 trillion ($1.25 trillion).
  • Furthermore, sudden large currency moves tend to translate into financial-market instability.
  • There is also the risk that, given the role of the ECB and the Bank of Japan in shaping their currencies’ performance, such a shift could be characterized as a “currency war” in the US Congress, prompting a retaliatory policy response.
  • Today, many of these countries have adopted more flexible exchange-rate regimes, and quite a few retain adequate reserve holdings.
  • an appreciating dollar improves the price competitiveness of European and Japanese companies in the US and other markets
  • But a new issue risks bringing about a similarly problematic outcome: By repeatedly repressing financial-market volatility over the last few years, central-bank policies have inadvertently encouraged excessive risk-taking, which has pushed many financial-asset prices higher than economic fundamentals warrant.
  • This is not to say that the currency re-alignment that is currently underway is necessarily a problematic development; on the contrary, it has the potential to boost the global economy by supporting the recovery of some of its most challenged components. But the only way to take advantage of the re-alignment’s benefits, without experiencing serious economic disruptions and financial-market volatility, is to introduce complementary growth-enhancing policy adjustments, such as accelerating structural reforms, balancing aggregate demand, and reducing or eliminating debt overhangs.
  • The US dollar’s resurgence, while promising, is only a first step. It is up to governments to ensure that the ongoing currency re-alignment supports a balanced, stable, and sustainable economic recovery. Otherwise, they may find themselves again in the unpleasant business of mitigating financial instability.
  • Haydn W on 18 Nov 14
     
    This article details the so called resurgence of the US dollar, in terms of currency value. The currency itself has risen by around 7% against other currencies but Guardian economist Mohamed El-Erian warns that without the appropriate accompanying central bank policies, the rise of the dollar could cause further market volatility and at worst a new crash. El-Erian calls for governments to enact policy to support balance the current currency realignment. 
Haydn W

NBRD: Belarus pursues balanced exchange rate policy | Economy | Headlines - 1 views

eng.belta.by/...hange-rate-policy_i_77318.html

Exchange Rates Belarus

shared by Haydn W on 16 Nov 14 - No Cached
  • MINSK, 14 November (BelTA) - Belarus pursues a balanced exchange rate policy and has been reducing the exchange rate of the Belarusian ruble gradually
  • Deputy Chairman of the Board of the Belarus National Bank Sergei Kalechits said at the Belarus-UK investment forum in London on 14 November
  • "We pursue quite a balanced exchange rate policy which is aimed at gradual reduction of the exchange rate. On the one hand, this is a reaction to the devaluation of the currencies of Belarus' major trading partners, which allows us to maintain the competitiveness of domestic exports,"
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  • Sergei Kalechits also noted the National Bank pays great attention to the efficiency of credit resources. "This, too, is a key to the monetary stability," he said.
  • In general, an important element in raising foreign investment and improving the investment climate is the macroeconomic and monetary stability, primarily due to the lower inflation. "This is what our monetary policy is aimed at. Due to objective reasons, this rate is still fairly high,” he said.
  • The second goal that our monetary policy is aimed at maintaining the country's international reserves,” Sergei Kalechits noted.
  • Haydn W on 16 Nov 14
     
    This article from Belarusian news agency BeITA explains the exchange rate policy of the Belarusian National Bank, as described by Deputy Chairman Sergei Kalechits. It explains policy regarding the managed float status of the Belarusian Ruble and how the government pursues a balanced policy surrounding the currency, aiming to reduce the interest rate whilst maintaining competitive advantage with domestic exports.
Haydn W

EU, China Reach Tentative Deal to End Telecom Equipment Tariff Threat - WSJ - 3 views

online.wsj.com/...pment-tariff-threat-1412870909

Wall Street Journal Tariff China EU

shared by Haydn W on 28 Oct 14 - No Cached
  • The European Union and China have reached a tentative deal that will end the threat of punitive import tariffs on Chinese telecommunications equipment makers
  • Chinese Minister of Commerce Gao Hucheng and the EU Trade Commissioner Karel De Gucht are expected to meet in Brussels on Oct. 18 after the Asia-Europe summit meeting in Milan to complete the agreement, an EU official said.
  • The agreement would sweep away the cloud of tariffs that has been hanging in particular over Huawei, which has become a major supplier of equipment to European telecommunications companies.
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  • The European Commission, the EU’s executive arm, in 2013 said it was ready to start investigations into imports of mobile telecommunications equipment made by Huawei and ZTE, claiming the two companies received unfair subsidies from the Chinese government and were “dumping” their products onto the EU market at rock-bottom prices.
  • The agreement will create an entity to review the market-share of Chinese equipment manufacturers in the EU and European companies
  • China has also committed to further discussions on the hefty loans and loan guarantees that the government gives to Huawei and ZTE to finance their exports, mostly to the developing world, the official said.
  • That represents a modest victory for the EU in an area that is highly sensitive for the Chinese government.
  • Haydn W on 28 Oct 14
     
    The European Union have reached an agreement with China to end the threat of EU tariffs on Chinese telecommunications equipment. The tariff was going to be imposed as a form of protectionism to protect the European manufactures Ericsson, Nokia and Alcatel against the Chinese firms Huawei and ZTE. The Chinese firms are able to produce equipment cheaper than the European firms, due to more abundant natural resources, but also, crucially through subsidies from the Beijing government. The deal reached on October 9th, sees the Chinese companies granted a share of the market, but not access to it fully, as this is reserved for the European firms, to protect EU economic growth in such a tempestuous time, showing that, forms of protectionism still exist in the market, despite this agreement.
Haydn W

BBC News - US and EU 'make progress' in free trade area talks - 2 views

www.bbc.co.uk/...business-29482892

BBC EU USA Free Trade

shared by Haydn W on 21 Oct 14 - No Cached
  • US and EU 'make progress' in free trade area talks
  • Officials from the United States and the European Union say they have made progress as they seek to sweep away trade barriers.
  • If successful an agreement would create the world's biggest free trade zone.
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  • The planned agreement is known as the Trans-Atlantic Trade and Investment Partnership or TTIP.
  • Mullaney said they have "progressed from discussing general approaches to the spadework of reviewing the many proposals that each side has put on the table."
  • They are trying to do that by eliminating tariffs (taxes on imported goods) and removing what Mr Mullaney called "non-tariff obstacles".
  • But while trade officials get on with detail, some of the general principles continue to generate vocal opposition.
  • Perhaps the most controversial area is the provision for foreign investors to go to an international tribunal for compensation if a government breaks the rules in a way that harms the company's interests.
  • he opposition to this idea has been taken up by the German government, so it remains uncertain whether it would appear in any final agreement.
  • Other critics are concerned that an agreement will drive down standards of consumer protection and food safety and will cost jobs.
  • They also complain that the texts that negotiators are working on are not made public.
  • Haydn W on 21 Oct 14
     
    Talks are taking place between the EU and the USA to create the worlds biggest free trade area. In many goods the US is seen to have an absolute advantage in producing many goods but they also rely on European countries to provide many components to US businesses. This trade deal, although opposed by Unions and other activitists is seen by many to be vastly beneficial to the two parties.
Haydn W

IMF warns UK of lingering housing and mortgage market risks - Business News - Business ... - 3 views

www.standard.co.uk/...gage-market-risks-9780019.html

Supply-Side London UK Housing

shared by Haydn W on 07 Oct 14 - No Cached
  • IMF warns UK of lingering housing and mortgage market risks
  • The UK faces lingering risks from housing and mortgage markets despite remaining on track for the fastest growth among the world’s leading economies this year, the International Monetary Fund said today.
  • has pencilled in growth of 3.2% this year — unchanged from its last July update despite a slew of downgrades for several members of the stagnating eurozone.
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  • This is the highest rate forecast among advanced economies, although the IMF has trimmed global forecasts amid fears over a “weak and uneven” recovery in Europe and parts of Asia.
  • The body, led by Christine Lagarde, said the “US and the UK in particular are leaving the financial crisis behind”
  • The Bank of England has identified the housing market as a “blinking warning light” on the economy’s dashboard following the introduction of the Help to Buy scheme last year
  • In June it introduced limits on high loan-to-income home loans to prevent borrowers over-extending themselves, while tighter mortgage lending criteria are slowing runaway prices.
  • The Bank’s latest credit conditions survey found a “significant” fall in the availability of home loans in the past three months after eight successive quarters of expansion.
  • The IMF also warned that more measures such as tax incentives and freeing up land were necessary to improve the rate of housebuilding and keep a lid on runaway house prices.
  • “Supply-side measures are crucial to safeguard housing affordability and mitigate financial stability risks,” it added.
  • Household debt levels remain high at 140% of GDP and, if the Bank’s limits on the lending market fail to gain traction, it may be forced to raise interest rates instead
  • Haydn W on 07 Oct 14
     
    This article from the London Evening Standard details how the IMF have warned the UK government over remaining household debt and the dangers it poses to the economy. The IMF have also called for 'supply side measures... to safeguard housing affordability' - a growing problem in both London and the UK as a whole.
Haydn W

Income distribution of New York City: What does it take to be rich? - 1 views

www.slate.com/...t_does_it_take_to_be_rich.html

Income Distribution USA New York Slate

shared by Haydn W on 28 Sep 14 - No Cached
  • So You’re Rich for an American. Does That Make You Rich for New York?
  • New Yorkers have a notoriously skewed sense of wealth—at least when they work in industries like finance or media and live in Manhattan or Brooklyn. It’s hard not to, seeing how we’re surrounded by expensive restaurants, expensive apartments, and expensively dressed people who seem able to afford it all.
  • If I mention that a six-figure salary counts as rich in much of the country—that just $250,000 gets you into the top 2 percent—the response is usually, “Sure, but that’s not New York rich.”
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  • The greater New York metro area may be home to an enormous share of the country’s 1 percenters, and it's certainly a magnet for exorbitant, plutocratic wealth. But in the city itself, the basic income curve isn’t that exceptional. In the entire U.S., according to the Census, about 22 percent of households earn six figures. In NYC, it’s about 25 percent.
  • Real estate here is expensive, and we don’t get much square footage for our buck. But as I wrote yesterday, the high rents in this city are balanced out somewhat by the low, low cost of commuting on the subway. (Not paying for a car, or gas, or car insurance is pretty financially sweet.)
  • Combine that with the fact that salaries are somewhat higher than average here, and New York is reasonably affordable compared with other large cities.
  • The upshot: If you’re rich by U.S. standards, you’re probably also rich by New York standards. Now, if you do want to see a city where incomes are crazily out of line with the national norm, check out San Francisco, where 39 percent of households make six figures—it really is becoming a city for the rich.
  • Haydn W on 28 Sep 14
     
    This article from Slate tackles the issue of income distribution in one of the most notoriously expensively cities on Earth - New York. The article relates the economic principles learned this week to real life and the cost of living in a bustling city, with an interesting conclusion that might surprise some.
Haydn W

Mexican Central Bank Head Warns of Spillover Effects of Dramatic Monetary Policies - WS... - 0 views

online.wsj.com/...702304811904579587782635533664

Mexico Central Bank Wall Street Journal Monetary Policy

shared by Haydn W on 27 May 14 - No Cached
  • SINTRA, Portugal—The head of Mexico's central bank said Tuesday that he supports the dramatic measures that central bankers in advanced economies have taken to stabilize their economies, but emerging markets must be mindful of the spillover effects these policies may have.
  • "The unconventional monetary policies have…established the ground for a recovery in economic activity," said Agustin Carstens, governor of Mexico's central bank
  • One byproduct of these policies has been to pump new money into financial markets. Some of that money has found its way to emerging markets as investors sought higher-yielding assets.
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  • The inflows have led to higher exchange rates in emerging markets, Mr. Carstens said, weakening exports, as well as a compression of interest rates, leading to bubbles in some real-estate markets.
  • "Authorities need to think about how they can spread, through time, the adjustment process,"
  • More broadly, emerging economies "shouldn't depend on advanced economies to generate growth," Mr. Carstens said.
  • Haydn W on 27 May 14
     
    Agustin Carstens, governor of the Central Bank of Mexico warns about the spillover affects into the developing world from advanced economies' banks' monetary policies. Money has found its way into emerging markets leading to higher exchange rates and weakening exports according to Carstens. This is a dangerous bubble that could be liable to burst should growth pick up soon. Overall this article provides an interesting insight into how one countries policy choices can have global consequences and how international economics really is.
Haydn W

France's Fiscal Policy Targets Very Challenging Says IMF - NASDAQ.com - 0 views

www.nasdaq.com/...enging-says-imf-20140515-00278

Nasdaq France Fiscal Policy IMF

shared by Haydn W on 20 May 14 - No Cached
  • PARIS--French President Francois Hollande has chosen the right path to repair the country's economy and finances, but its fiscal targets are very challenging, the International Monetary Fund said Thursday.
  • At the start of the year, the socialist leader switched from a policy of tax increases to spending cuts to bring down the budget deficit.
  • The planned reduction in taxes mean that the cutbacks to spending relative to trend will need to be very large if public finances are to be brought back to balance
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  • If the government delivers the EUR50 billion ($68.5 billion) of savings over 2015 to 2017 that would be "remarkable by historical standards," the IMF said.
  • data on Thursday showed the French economy remained weak at the start of this year, while Germany posted better-than-expected growth. France escaped the wider euro-zone recession that followed the bloc's debt crisis, but it has failed to post strong growth for the last two years and the government has repeatedly missed its targets for bringing down the deficit.
  • Mr. Hollande launched a Responsibility Pact, under which payroll taxes on businesses would be cut in an effort to boost investment and recruitment
  • The IMF said the measures in the Responsibility Pact would only slowly boost growth to around 1% this year and 1.5% in 2015. It also warned there are risks of a weaker rebound and that inflation would remain around 1% with the economy operating well below capacity.
  • The IMF said the European Central Bank--which indicated last week it may launch stimulus measures in June--could do more to help France meet its targets.
  • "More accommodative monetary conditions would help with the implementation of the fiscal program and bring forward the benefits of structural reforms," the fund said.
  • Haydn W on 20 May 14
     
    This article details France's success in it's road to recovery following the Eurozone sovereign debt crisis. This week the IMF has hailed president François Hollande's cutback path to repair the countries economy but commented that his targets may be 'very challenging.' This comes after the French government has delivered vast savings through austerity measures whilst retaining general stability despite the rise of far-right groups like The Front National. In my opinion for a country in the eurozone Hollande's France seems to be doing well for itself on the road to recovery and could set an example for other Eurozone countries, like Greece and Portugal.
Haydn W

Inflation Forecast 2014-2014: Continued Mild Price Increases - 1 views

www.forbes.com/...continued-mild-price-increases

Forbes Inflation Unemployment Phillips Curve Trade-off

shared by Haydn W on 03 May 14 - No Cached
  • Inflation is likely to remain mild in the next two years, but first a caution: none of the inflation forecasting models is doing a good job these days.
  • the Phillips Curve was our primary way of looking at inflation. William Phillips found an inverse relationship between inflation and unemployment over the period 1861-1957. This simple approach was used here in the United States in the 1960s and 70s.
  • With lower unemployment you would expect greater inflation. However, the Phillips Curve does not explain why inflation didn’t go down much when our unemployment rate was high a few years ago.
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  • Milton Friedman said “Inflation is always and everywhere a monetary phenomenon . . . .” The relationship was solid for a long time, though financial changes in the 1990s made the theory harder to apply.
  • Unfortunately, the expectations-augmented Phillips Curve has not worked well in recent years. One study found that the predicted inflation for 2010 was negative 4.3 percent, while actual inflation was still positive.
  • Different theories tell us that the actual dynamics by which inflation changes are influenced not only by unemployment but also by inflation expectations.
  • Two different money concepts have been used, the money supply (such as the M2 definition) and the monetary base Recent data for both concepts indicate that inflation should have been much higher in recent years. The fact that inflation has accelerated very little suggests that in the current environment, the money-inflation connection is not very tight.
  • Haydn W on 03 May 14
     
    This article from Forbes is primarily titled to be a forecast about inflation in the coming fiscal year but it also interestingly (and relevant to our studies) discusses the different arguments and criticism surrounding the modelled Phillips Curve. The article also contains an interesting graph that is based on recorded statistics about inflation and unemployment which helps to demonstrate the problems with the Phillips Curve model. 
Haydn W

Japan's consumer inflation set to reach five-year high | World news | The Guardian - 0 views

www.theguardian.com/...sumer-inflation-five-year-high

The Guardian Japan 'Inflation

shared by Haydn W on 19 Apr 14 - No Cached
  • Country sees core consumer prices soar as sales tax hike forms part of PM Shinzo Abe's plan for reviving moribund economy
  • Core consumer prices in Tokyo, a leading indicator of nationwide inflation, appear to have risen by the largest amount for 22 years in April after an increase in Japan's sales tax drove up prices
  • The poll also suggested the headline figure for Japan's nationwide consumer inflation may have reached a five-year high in March
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  • Higher inflation is a key aim of the economic policies of the country's prime minister, Shinzo Abe, who was elected in 2012
  • Japanese consumer prices are expected to keep showing steady headway towards the Bank of Japan's 2% inflation target. But the erosion of consumer spending power due to the sales tax increase – to 8% from 5% – underlines the need for long-stagnant wages to catch up with inflation to underpin consumption and help economic recovery.
  • The core consumer price index for Tokyo, available a month before the nationwide data, is likely to have increased 2.8% in April from a year earlier
  • Haydn W on 19 Apr 14
     
    Japan's inflation rate continues to rise according to this article from the Guardian. Prime minister Shinzo Abe aims to boost the inflation rate in the country to an approximate 2% level but, as typical with many countries, wages have not caught up with these levels and thus consumer spending power has been reduced drastically. Other interesting things to note are the rise in electricity and gas prices contributing to the increased CPI data.
Haydn W

Rules on unemployment benefits tightened to end 'signing on' culture | Politics | The G... - 2 views

www.theguardian.com/...nt-benefits-signing-on-culture

Unemployment UK The Guardian Jobs

shared by Haydn W on 13 Apr 14 - No Cached
  • Rules on unemployment benefits tightened to end 'signing on' culture
  • Jobless will have to take 'basic steps' towards finding work before they can claim, as part of government push on welfare
  • The government is to hail the end of the "signing on" culture when it announces that unemployed people will have to take "basic steps" towards finding work before they can claim benefits.
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  • the employment minister, will launch a significant government push on welfare this week by saying that unemployed people must prepare for their first interview with a Jobcentre Plus adviser by preparing a CV.
  • McVey will highlight tough new rules for newly unemployed people. She will say: "With the economy growing, unemployment falling and record numbers of people in work, now is the time to start expecting more of people if they want to claim benefits.
  • "This is about treating people like adults and setting out clearly what is expected of them so they can hit the ground running.
  • In return, we will give people as much help and support as possible to move off benefits and into work because we know from employers that it's the people who are prepared and enthusiastic who are most likely to get the job.
  • Haydn W on 13 Apr 14
     
    This new policy, outlined from the UK government's recent budget announcement aims to get young people out of the so called welfare culture and into employment. From around the end of the Second World War there has been a rapid increase in people leaving education and signing onto unemployment benefits. With these tougher measures the government hopes to prepare these people for work and curb the relative 7 - 8% unemployment rate. However the government has faced severe criticism, notably for their lack of efforts to get university graduates into jobs since raising university fees here from £3000 per year to £9000 when they came to power in 2010.
Haydn W

South Africa at 20: Storms behind the rainbow - Opinion - Al Jazeera English - 1 views

www.aljazeera.com/...-behi-2014320155339545752.html

Aggregate Supply South Africa GDP Mandela

shared by Haydn W on 30 Mar 14 - No Cached
  • April 27 marks the 20th anniversary of South Africa's first democratic elections.
  • Many things have improved in South Africa since 1994, to be sure. State racism has ended, and the country now boasts what some have described as the most progressive constitution in the world. People have rights, and they know that there are institutions designed to protect and uphold those rights. Still, everyday life for most South Africans remains a struggle - a struggle that is infinitely compounded by the sense of disappointment that accompanies it, given the gap between the expectations of liberation and the state of abjection that the majority continues to inhabit.
  • South Africa's unemployment rate in 1994 was 13 percent - so bad that most were convinced it could only get better. Yet today it is double that, at about 25 percent.
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  • Still, when the ANC assumed power in 1994 it implemented a progressive policy initiative known as the Reconstruction and Development Programme (RDP). The RDP was designed to promote equitable development and poverty reduction
  • South Africa also boasts a reputation for being one of the most unequal countries in the world. Not only has aggregate income inequality worsened since the end of apartheid, income inequality between racial groups has worsened as well.
  • According to the 2011 census, black households earn only 16 percent of that which white households earn. About 62 percent of all black people live below the poverty line, while in the rural areas of the former homelands this figure rises to a shocking 79 percent.
  • The ANC's Black Economic Empowerment programme has succeeded in minting new black millionaires (South Africa has 7,800 of them now), but can't seem to manage the much more basic goal of eliminating poverty.
  • during the negotiated transition of the 1980s and early 1990s. The apartheid National Party was determined that the transition would not undermine key corporate interests in South Africa, specifically finance and mining. They were willing to bargain away political power so long as they could retain control over the economy. And so they did.
  • The ANC was forced to retreat from its position on nationalisation and an IMF deal signed just before the transition deregulated the financial sector and clamped down on wage increases.
  • And that's according to official statistics; a more reasonable figure, according to most analysts, is probably closer to 37 percent. The situation is particularly bad for young people. The Economist recently reported that "half of South Africans under 24 looking for work have none. Of those who have jobs, a third earn less than $2 a day."
  • Despite its successes, this policy framework was abandoned a mere two years later. Mbeki and then Finance Minister Trevor Manuel held clandestine discussions with World Bank advisors toward drafting a new economic policy known as GEAR (Growth, Employment, and Redistribution, even though it accomplished precious little of the latter).
  • Given these contradictions, it's no wonder that South Africa is ablaze with discontent, earning it the title of "protest capital of the world".
  • Early this year some 3,000 protests occurred over a 90-day period, involving more than a million people. South Africans are taking to the streets, as they give up on electoral politics. This is particularly true for the young: Nearly 75 percent of voters aged 20-29 did not participate in the 2011 local elections.
  • The government's response has been a mix of police repression - including the recent massacre of 44 striking miners at Marikana - and the continued rollout of welfare grants, which now provide a vital lifeline to some 15 million people.
  • So far the protests have been focused on issues like access to housing, water, electricity, and other basic services, but it won't be long before they coalesce into something much more powerful
  • as they did during the last decade of apartheid. There are already signs that this is beginning to happen. The Economic Freedom Fighters, recently founded by Julius Malema, the unsavory former leader of the ANC Youth League, is successfully mobilising discontented youth and making a strong push to nationalise the mines and the banks.
  • It seems that the ANC's legitimacy is beginning to unravel and consent among the governed has begun to thin. It is still too early to tell, but the death of Mandela may further widen this crack in the edifice of the ruling regime, as the ANC scrambles to shore up its symbolic connection to the liberation struggle.
  • In short, the situation in South Africa over the past 20 years opens up interesting questions about the meaning of democracy. What is democracy if it doesn't allow people to determine their own economic destiny or benefit from the vast wealth of the commons? What is freedom if it serves only the capital interests of the country's elite? The revolution that brought us the end of apartheid has accomplished a great deal, to be sure, but it has not yet reached its goal. Liberation is not yet at hand.
  • Haydn W on 30 Mar 14
     
    From Al Jazeera I chose this article about the poor state of the economy in South Africa, 20 years after Nelson Mandela and the ANC came to power, ending the system of political, social and economic segregation, Apartheid. Despite reforms in the 90's the majority of wealth and power is still held by rich whites. With around 30% unemployment rate and young people struggling to find work many feel only anger and resentment to the current ANC government led by Jacob Zuma. Economically speaking South Africa's imports are up and exports down, reducing GDP as AS is shifted left. This is especially evident in industries like mining and banking which many are now calling for to be nationalised. 20 years on from Nelson Mandela's historic victory in the 1994 general election, South Africa, despite being free of the shackles of segregation is not in the boom many predict. The ANC must be careful in there actions, should they, following the death of Madiba lose contact with his legacy and what he stood for.
Haydn W

Demand soars: Sydney houses start going for more than $1m over reserve price | theteleg... - 1 views

www.dailytelegraph.com.au/...story-fni0cx12-1226861645598

aggregate demand

shared by Haydn W on 22 Mar 14 - No Cached
  • Demand soars: Sydney houses start going for more than $1m over reserve price
  • ORDINARY suburban homes in Sydney are selling for more than $1 million over reserve owing to intense ­demand and sparse supply.
  • Two properties broke this mark in the first eight weeks of this year’s selling season.But industry experts ­refuse to speculate that Sydney is in the grip of a property bubble, saying the extraordinary prices were a sign of intense buyer fever.
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  • “People are now happier than ever to pay the premium price for the property they want. But now even the ordinary homes, if you want to call them that, are ­inviting extraordinary prices.”
  • “Sydney’s average appreciation for property has gone up by 14 per cent in the last 15 months. That’s enormous and if it continues, there’s room for worry,” he said. “But at the moment the market just appears excited.”Yellow Brick Road founder Mark Bouris was cautious not to hype the property price hikes.“You’d have to be careful in the investor market ­because when aggregate ­demand is so high you have to start considering that their pricing is potentially above where it should be,” he said.
  • Last month, a three-bedroom apartment in Kirribilli sold for $4.325 million, shattering the $3 million reserve.
  • Haydn W on 22 Mar 14
     
    This article explains how rising AD has lead to house prices rising exponentially in Sydney, Australia. Houses are selling for around $1 million AUD over reserve and a three bedroom apartment recently sold for $4.3 million breaking the $3 million reserve. The rising demand for houses is typical of economies at the moment as most workers want to move to large cities to secure jobs. 
Haydn W

Ukraine Uncertainty Depressing Growth and Investment | The Moscow Times - 5 views

www.themoscowtimes.com/...495734.html

Macroeconomic Activity Moscow Times Ukraine Russia

shared by Haydn W on 08 Mar 14 - No Cached
  • As world leaders increase or trash their political clout depending on their audience and the statements they make about the situation in the Ukraine, some analysts were revising Russian GDP growth estimates to as low as 1.1 percent for the year.
  • Wednesday was a calmer day on the stock markets, following a dip of 10.8 percent Monday morning that vaporized near $60 billion of valuation from Russian companies.
  • Although Russia has seen some short-term budget benefits from ruble devaluation and increasing oil prices, the current impasse is not helping to fight stagnation or attract investment.
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  • The ruble strengthened slightly to 36 against the dollar and 49.4 against the euro Wednesday evening. This was well above the lows reached on Monday
  • Tightening fiscal policy was topped by possibly impending U.S. sanctions, including economic ones, followed by President Vladimir Putin's claims that Russia may use force in Ukraine if necessary.
  • The heap of these latest events has caused some analysts to revise their overall economy forecasts.
  • PSB Research said Wednesday it would decrease its initially modest GDP growth estimates for the year from the range of 1.5 to 1.8 percent to 1.1 to 1.3 percent.
  • Political standoff will also further stimulate the outflow of capital, Fedotkova said, as investors are reluctant to channel their money into the country that may be possibly involved in any kind of military activity
  • As for businesses, a recent survey done by the Gaidar Institute suggests that more than a third of CEOs and owners of private companies would consider investing in production this year if the price for equipment went down and if the macroeconomic outlook were more certain, Vedomosti reported Monday. At the same time macroeconomic uncertainty was a headache for only 10 percent of surveyed state-controlled companies. No margin of error was given for the survey.
  • Haydn W on 08 Mar 14
     
    This article explains how the recent stand-off crisis in Ukraine is having a negative effect on the Russian economy, with the Rouble taking a further fall and GDP growth estimates being revised downwards. Predictably sanctions imposed by the west on Russia in response to the occupation of Crimea, an autonomous region of Ukraine populated largely by ethnic Russians, have affected businesses in Russia. We learn from the article that some $60 billion valuation has been lost by Russian companies in light of the tensions. This article relates to the macroeconomic concept of circular flow being a complex process with international trade and governments being involved majorly in proceedings.
Haydn W

Asda takes fight to discounters as sales fall - Telegraph - 2 views

www.telegraph.co.uk/...discounters-as-sales-fall.html

Oligopoly UK Supermarkets Market The Telegraph

shared by Haydn W on 02 Mar 14 - No Cached
  • Asda takes fight to discounters as sales fall
  • Asda’s chief executive has insisted that he is countering the rise of discount retailers Aldi and Lidl
  • Andy Clarke said recently-introduced price cuts had begun to pay off
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  • Despite this, Asda’s like-for-like revenues fell 0.1pc in the final three months of 2013 against the same quarter a year ago. This was the first fall since 2010, and means that three of the UK’s “Big Four” supermarkets saw declines in the period, with only J Sainsbury bucking the trend.
  • Asda announced a £1.3bn investment in cutting prices and improving quality in November
  • Asda’s market share declined from 17.6pc a year earlier to 17.1pc in the final quarter of the year, according to data from Kantar Worldpanel
  • Aldi and Lidl grew from a combined 5.8pc to 7.1pc.
  • Wal-Mart, the US giant behind Asda, also revealed a sales decline. The world’s biggest retailer said like-for-like sales fell 0.4pc in the quarter.
  • Haydn W on 02 Mar 14
     
    This article details the rise of so called 'budget supermarkets' Aldi and Lidl in the UK taking market share from the 'Big Four' supermarkets Asda, Tesco, Sainsbury's and Morrisons. The supermarket industry in the UK is a prime example of an oligopoly, I'd argue that there isn't perhaps a better example anywhere as this market features all the tell-tale signs; the four supermarkets often compete in price wars, especially Asda, the store mentioned here. Also the firms often collude and fix prices across the board together. The market, however is changing with other firms entering the market to provide cheaper alternatives to the ' Big Four' whom so many consumers have become disenfranchised with.
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