Best content in Global Economy

Which Corporate Taxation for America?
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The current system, all agree, is deeply flawed: the corporate tax rate is too high by global standards, and the corporate tax base is too narrow, owing to numerous credits, deductions, and special provisions that distort economic decisions.
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Martin Feldstein explains why reports of the Greek budget deficit's elimination are muc... - 0 views

www.project-syndicate.org/...imination-are-much-exaggerated

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The Greek Budget Myth
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Green growth is a worthwhile goal - FT.com - 0 views

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shared by Gene Ellis on 30 Nov 13 - No Cached

Green growth is a worthwhile goal
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A particularly important aspect of that uncertainty is tipping points
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It is irrational to play in the climate casino without seeking to eliminate worst-case outcomes
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Externalities do not fix themselves. In the absence of effective individual property rights they require government action, in this case the action of close to 200 governments.
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Why should they do this? The answer is: because a low-carbon atmosphere is a global public good.
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It is by now impossible to be optimistic that anything like this will happen. This is partly because the needed agreement must be long-term and global. That, in turn, raises difficult questions of intragenerational and intergenerational equity.
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Suppose that, despite all the logic, it proves impossible to achieve a relevant global agreement. Does it make sense for any country or group of countries to take determined action on their own? If the aim is to deal with climate change, the answer is: absolutely not, unless the countries are China or the US.
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But it might be possible for a country to demonstrate proof of concept:
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Why the world faces climate chaos - FT.com - 0 views

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Why the world faces climate chaos
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Recasting high school, German firms transplant apprentice model to U.S. - The Washingto... - 0 views

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Recasting high school, German firms transplant apprentice model to U.S.
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The apprentices are grouped together for coursework that leads to an associate’s degree in mechatronics, a hybrid discipline pioneered in Japan and Germany that melds the basics of mechanical engineering, electronics and other areas.
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It produces workers that can program, operate and fix the machines common to the factories run by Siemens and other top companies. There used to be an elective among the 24 courses the students take. That was replaced with a logic class.
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The curriculum as it stands now, he said, is in “lockstep” with how mechatronics is taught in Germany.
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The euro crisis: Debtors' prison | The Economist - 0 views

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But the reforms often fail to work. The Spanish law is intended to promote restructuring of viable firms but in practice most insolvencies end in liquidation after lengthy court proceedings.
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High household debt helps explain why the Netherlands, along with Italy and Spain, remained in recession in the second quarter of 2013 even as the euro area in general embarked on recovery. Dutch GDP this year will be 2% lower than in 2011 and more than 3% below its previous peak, in 2008.
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it illustrates the malign effect of high debt when house prices fall
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One aim of the exercise is to identify the bad debts that are fouling up euro-zone banks and preventing the flow of new credit. This is important because parts of the single-currency area are crippled not just by public borrowing but by private debt, most of which is sitting on banking books.
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High private debt is more detrimental to growth than high public debt, according to recent research by the IMF.
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The malign effect of high private debt becomes apparent in the busts that follow credit-driven booms. Households that have borrowed too much in relation to their income trim their spending, the main component of GDP. Overleveraged firms avoid investing and concentrate on shrinking their balance-sheets by paying off loans. As bad debts erode their capital, banks become more reluctant to lend. These adverse trends reinforce each other, increasing the overall drag on growth.
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Other balance-sheet indicators also suggest that Italian business is in a bad way. For example, 30% of corporate debt is owed by firms whose pre-tax earnings are less than the interest payments they have to make. That share of frail companies is even higher in Spain and Portugal (40% and nearly 50% respectively).
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Little progress has been made to lighten the private-debt burden since the crisis began. Though it eased in Spain from 227% of GDP in 2009 to 215% in 2012, it rose over the same period in Cyprus, Ireland and Portugal. In Britain, by contrast, private debt fell from 207% of GDP in 2009 to 190% in 2012 thanks to improvements by both households and firms.
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There is an inherent contradiction between the need for debtor countries in the euro zone to regain competitiveness through lower prices and at the same time to ease excessive debt with a dose of inflation.
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Firms that have overborrowed are reluctant to embark on new ventures, and banks are in any case reluctant to lend because their balance-sheets are peppered with bad debts. This unhappy state of affairs prevails throughout southern Europe though its precise causes vary.
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