This update of the key World Economic Outlook projections from 24th January 2012, forecasts more moderate growth for the world. Earlier projections of 4.0% growth in global output for 2012 is reduced to 3.25%. This is on the back of a mild recession in the euro area economy due to the rise in sovereign yields, the effects of bank deleveraging on the real economy, and the impact of additional fiscal consolidation.
In this January 2012 speech US Federal Reserve Governor Elizabeth A. Duke, she shares her views and insights on the prospects of an economic recovery in the USA.
The Year in News 2011
Coverage of Economy and International News Jump in a Year of Major Breaking Stories. The faltering U.S. economy was the No. 1 story in the American news media in 2011, with coverage increasing substantially from a year earlier when economic unease helped alter the political landscape in the midterm elections, according to The Year in the News 2011, a new report conducted by the Pew Research Center's Project for Excellence in Journalism.
Charlie Rose: Niall Ferguson of Harvard University on his book “Civilization: The West and the Rest”
Charlie Rose interview with British historian of modern imperialism, Niall Ferguson. Ferguson is the Laurence A. Tisch Professor of History at Harvard University, a Senior Research Fellow of Jesus College, Oxford University and a Senior Fellow of the Hoover Institution, Stanford University. Ferguson is best known for his book ‘The Pity of War’ (1998) and he is also the author of ‘The War of the World’ (2006).
Asset Price Booms and Current Account Deficits
In this Economic Letter from the Federal Reserve Bank of San Francisco by Paul Bergin, he analyses how before the global financial crisis of 2007-2009, the United States and several other countries posted large current account deficits. Many of these countries also experienced asset price booms. Evidence suggests the two developments were linked. Rising asset values in the United States permitted households to borrow more easily to boost consumption, while the net sale of debt securities abroad financed current account deficits. The fall in some asset prices since the crisis can make it easier to reduce current account imbalances.
BBC - Business Daily - BRICs - 4 Russia
Should Russia be a BRIC?
The country is a leading global supplier of oil, gas and metals. But is it too dependent on those volatile commodity markets? In this last Business Daily broadcast on BRICs, Andrew Walker speaks to Igor Yurgens, an adviser to the current President Dmitry Medvedev. But Russia is a challenging place to work. The World Bank ranks it 120 out of 183 in its survey on the ease of doing business. Still, many Russians are immersing themselves in the cold waters of business. Peter van Dyk braves the freezing temperatures of Asbest, a town in the Ural mountains, to meet some of Russia's entrepreneurs.
BBC - Business Daily - BRICs - 3 Brazil
How Brazil has transformed itself from a Latin American also-ran into a dynamic modern economy.
In this third Business Daily broadcast in the series, Justin Rowlatt puts the B into BRICs, exploring the incredible renaissance of Brazil. He travels to the edge of the Amazon to visit one of the most efficient farms on the planet and interviews its owner, Blairo Maggi, the man they call "The King of Soya". Senator Maggi describes how Brazil pioneered super-efficient agriculture and the challenges of developing the country's manufacturing industry in the face of competition from fellow BRIC, China. Brazil isn't just an agricultural power, it also has vast reserves of iron ore and other minerals. The icing on the cake was the recent discovery of oil - tens of billions of barrels of the stuff. Brazil's vast oil reserves have transformed the fortunes of the country and the national oil company, Petrobras. Justin Rowlatt asks Petrobras chief executive, Jose Sergio Gabrielli de Azevedo, if he believed the Brics designation means anything. And in a rainy Brasilia, Justin Rowlatt meets up with a lynch-pin of Brazil's trade with China, Charles Tang. Mr Tang is the chairman of the Brazil China Chamber of Commerce. He argues that the BRIC nations have different strengths and weaknesses but do have various interests in common.
BBC - Business Daily - BRICs - 2 China
Can China save the world's economy?
That is the question posed in this BBC Business Daily broadcast. The country has seen incredible growth in the past decade but is it the economic powerhouse that could save the world? In the second of the BBC's week of programmes looking at the BRIC countries (Brazil, Russia, China and India) Damian Grammaticus is in Beijing. He speaks to Professor Li Daokui, an economist who serves as a policy adviser to the Monetary Policy Committee of the People's Bank of China, who says that while China's growth has been exceptional, the country needs to focus on reform in the coming years. Plus he asks Michael Pettis, Professor of Finance at Peking University, where the idea of China being able to save the world comes from. And Michael Bristow visits the village of Yihezhuang, one of China's poorest villages.
BBC - Business Daily - BRICs - 1 India
What are the challenges of bringing together rich India and poor India?
That is the question posed in this BBC Business Daily broadcast. In the first of a week of programmes from the BRIC countries (Brazil, Russia, India and China) Nidhi Dutt reports from Mumbai on how the Indian nation is transforming itself into a powerful 21st Century economy. And what are the benefits of being a Bric? We hear from K V Kamath Chairman of Infosys Ltd, India's second largest software company and Adi Godrej, Chairman of Godrej Group one of India's most trusted brands. Plus Shilpa Khanon speaks to Montek Singh Ahluwalia, the deputy chairman of India's planning commission.
GlobalBiz: Argentina - Ten Years On: 12 Nov 11
Nine years ago Peter Day visited Argentina at its lowest economic ebb. It had defaulted on its overseas debts. The country was in chaos with rampant unemployment and the banks had closed their doors to their customers. But today things appear better as a commodities boom raises Argentina’s boat. It was a crisis similar in many ways to the one now swamping parts of Europe – so Global Business asks whether Argentina has any lessons for the likes of Greece and Italy. Producer: Richard Berenger Editor: Stephen Chilcott
Foreclosures, House Prices, and the Real Economy
Institute for Monetary and Economic Studies - Bank of Japan - Discussion Paper Series 2011-E-27 by Atif Mian, Amir Sufi, and Francesco Trebbi.
A central idea in macroeconomic theory is that negative price effects from the leverage-induced forced sale of durable goods can amplify negative shocks and reduce economic activity. The autors examine this idea by estimating the effect of U.S. foreclosures in 2008 and 2009 on house prices, residential investment, and durable consumption. They show that states that require judicial process for a foreclosure sale have significantly lower rates of foreclosures relative to states that have no such requirement. Using state laws requiring a judicial foreclosure as an instrument for actual foreclosures, as well as a regression discontinuity design around state borders with differing foreclosure laws, they show that foreclosures have a large negative impact on house prices. Foreclosures also lead to a significant decline in residential investment and durable consumption. The magnitudes of the effects are large, suggesting that foreclosures have been an important factor in weak house price, residential investment, and durable consumption patterns during and after the Great Recession of 2007 to 2009.
Analysis of the Republican Debate and President Obama's Jobs Speech
Acclaimed interviewer and broadcast journalist Charlie Rose engages Americas best thinkers, writers, politicians, athletes, entertainers, business leaders, scientists and other newsmakers in one-on-one interviews and roundtable discussions. This September 8th 2011 episode provides an analysis of the Republican Debate and President Obama's Jobs Speech with Andy Stern, president of the Service Employees International Union, John Heilemann of 'New York Magazine,' Nia-Malika Henderson of 'The Washington Post,' Carl Schramm, President and CEO of the Ewing Marion Kauffman Foundation, Kenneth Rogoff of Harvard University & Mark Halperin, senior political analyst for Time magazine.
InBiz: Prize Performers
At a time of grave crisis, some of the world's top Nobel Prize winning economists have been meeting for a conference on an idyllic Bavarian island. The BBC's Peter Day was there to find out if they had any ideas about how to get out of the mess we're in and what their predictions are for the future. Producer: Neil Koenig Editor: Stephen Chilcott
Market Phoenixes and Banking Ducks Are Recoveries Faster in Market-Based Financial Systems?
In this 2011 International Monetary Fund working paper by Julien Allard and Rodolphe Blavy notes that recoveries vary considerably across countries: this IMF paper compares recoveries in bank-based and market-based economies and finds that market-based economies experience significantly and durably stronger rebounds than the bank-based ones (in particular the more bank-based economies of continental Europe). Further, stronger recoveries also tend to be associated with broader economic flexibility. IMF findings suggest that dealing with bank sector vulnerabilities is paramount to support the recovery. In the medium term, structural policies to deepen financial markets are useful, but need to be complemented with structural measures to address rigidities more broadly in the real economy.
When Will Residential Construction Rebound?
In this Economic Letter (2011-23, 7/25/2011) from the Federal Reserve Bank of San Francisco, William Hedberg and John Krainer write that over the past several years, U.S. housing starts have dropped to around 400,000 units at an annualized rate, the lowest level in decades. A simple model of housing supply that takes into account residential mortgage foreclosures suggests that housing starts will return to their long-run average by about 2014 if house prices first stabilize and then begin appreciating, and the bloated inventory of foreclosed properties declines.
What does Hair Cutting have in Common with Financial System Liquidity Management?
Here Andrew G Haldane, Executive Director, Financial Stability and member of the Financial Policy Committee from the Bank of England helps connect the dots.
The Role of the State
In this 1966 Reith Lecture entitled 'The Role of the State', Professor John Kenneth Galbraith explores the relationship states have with large Corporations. He argues that the state and private industry are moving closer together and warns there is a danger that the state could become too involved with industry, and consequently policies could be influenced by these corporations.
US Economy - The Vigilante
This 2011 "The Atlantic" article explores Bill Gross' (founder and co–chief investment officer of PIMCO) thinking on US Treasury Bonds, and why he has been not only a seller, but placing active bets against them.
Canada in a Multi-Polar World
In this 2011 Bank of Canada speech, by Governor of the Bank of Canada, Mark Carney he discusses the change in global market dynamics with emerging nations accounting for nearly three quarters of global economic growth. The emerging economies stand in stark contrast to the weakened position of the advanced economies and this is impacting on monetary policy in Canada and Australia.
New Zealand - IMF Country Report
The Big Fish Small Pond Problem
In this 2011 speech by Economist and Executive Director - Financial Stability, Bank of England, Andrew G. Haldane discusses the potential problems being created by developed nations (the "Big Fish") investing too much money in emerging economies (the "Small Pond"), thereby creating asset price bubbles in those countries. This issue has led to changing attitudes to once frowned upon market interventions by the emerging economy governments.
Tailwinds and Headwinds: How Does Growth in the BRICs Affect Inflation in the G7?
In this 2011 Bank of England working paper, Anna Lipinska (Economist at the Monetary Analysis, Monetary Assessment and Strategy Division),and co-author Stephen Millard (Senior Economist at the Monetary Analysis, Structural Economic Analysis Division), suggest that at least initially and under certain monetary policy settings, and oil production assumptions, the G7 nations enjoy more of an inflationary tailwind (i.e. lower inflation) rather than a headwind (i.e. higher inflation from having inflation exported from the BRIC economies).
How Do Business and Financial Cycles Interact?
In this 2011 International Monetary Fund working paper, Professor of International Finance Policy, University of Amsterdam and Assistant Director/Division Chief, Financial Studies, Research Department, International Monetary Fund, Stijn Claessens et al. find that strong linkages exist between different phases of business and financial cycles. This is particularly true for recessions associated with financial disruption episodes, especially house price busts, these recessions tend to be longer and deeper than other recessions.
In the 2011 International Monetary Fund working paper, Economist at the Asia and Pacific Department of the IMF, James P. Walsh recommends that in setting monetary policy - especially in poorer nations where food is a larger part of the consumption basket - it is unwise to exclude food inflation from core inflation measures as is widespread practice, due to volatility in food prices.
The Paradigm Shifts: Global Imbalances, Policy, and Latin America
http://www.bankofcanada.ca/wp-content/uploads/2011/03/sp260311.pdf
In this 2011 Bank of Canada speech to the Inter-American Development Bank, Governor of the Bank of Canada, Mark Carney examines how both commodity price fluctuations and capital flows are leading to global imbalances with particular focus on Latin America.
Let it Grow: How Monetary Policy can Support Sustainable Economic Growth
In this 2011 Bank of England speech by Economist and External Member of the Monetary Policy Committee of the Bank of England from October 2006 to May 2011, Andrew Sentance again makes the case for a tightening in interest rates to keep the inflation genie tightly in the bottle.
In this 2011 International Monetary Fund working paper, Economist at International Monetary Fund, Pritha Mitra examines the different impact capital flows have on GDP, depending on which sectors they are directed. Not surprisingly, capital flows directed at real estate have the most significant impact on GDP, suggesting that investments in education and infrastructure in emerging nations could lead to less volatile GDP growth.
Recent Surge in Global Commodity Prices
In this 2011 Bank of Japan Review by Economist of the International Department at the Bank of Japan, Yasunari Inamura et al. looks at various factors that have led to resurgent commodity prices since 2009.
Modelling Inflation in Chad
In this 2011 International Monetary Fund working paper, Economist and former Consultant, Middle East and North Africa Department at The World Bank, Tidiane Kinda examines what factors most influenced inflation in Chad. This study provides a valuable insight into inflationary cost pressures in emerging economies - many of which are involved in manufacturing for developed nations.
In this 2011 Bank of Canada working paper, Economist and Principal Researcher, Canadian Economic Analysis Department, Bank of Canada, Oleksiy Kryvtsov and co-author, Economist and Assistant Professor of Economics, New York University, Virgiliu Midrigan examine how inventory levels and the cost of production responds to monetary policy shocks in the context of the Canadian economy. We think that some of the similarities between the Canadian and the Australian economy make this article all the more relevant.
Patchwork Nation: Census Raises Questions About Detroit's Future
Ten Good Reasons to Tighten
In this 2011 Bank of England speech by Economist and External Member of the Monetary Policy Committee of the Bank of England from October 2006 to May 2011, Andrew Sentance provides a fascinating insight into differences in opinion about monetary policy within the Monetary Policy Committee and provides his arguments for an early monetary tightening.
The Progress of Recovery and Challanges for Policymakers
In this 2011 speech, former Economics Professor and President and CEO of the Federal Reserve Bank of Philadelphia, Charles I. Plosser provides his thoughts on the economic recovery of the USA in the context of his voting tenure on the Federal Open Market Committee.
Household Finances and Economic Growth
http://www.bankofcanada.ca/wp-content/uploads/2011/01/sp100111.pdf
In this speech by Bank of Canada Deputy Governor, Agathe Côté she discusses household finances, which account for around 60% of aggregate demand in Canada. She discusses how monetary policy - amongst other factors - is framed by giving appropriate consideration to the state of household finances in a post Global Financial Crisis economic landscape.
Investment Objectives of Sovereign Wealth Funds - A Shifting Paradigm
In this 2011 International Monetary Fund working paper, Senior Economist at International Monetary Fund, Peter Kunzel et al. examine the impact of the Global Financial Crisis on asset allocations and investment strategies of sovereign wealth funds and the stabilising influence they have in the global economy due to their longer-term investment strategies relative to most other investors.
In this 2011 NPR KQED Radio program, Jared Diamond - author of Guns, Germs and Steel - talks about Haiti and the Dominican Republic and why neighbors on the same island developed along very different paths.
A Barrel of Oil or a Bottle of Wine: How Do Global Growth Dynamics Affect Commodity Prices?
http://www.imf.org/external/pubs/ft/wp/2011/wp1101.pdf
In this 2011 International Monetary Fund working paper, Economists Serhan Cevic and Tahsin Saddi Sedik examine two very different commodities, but find that in each instance, it is the growth in aggregate demand that drives commodity prices rises rather than supply constraints. With most incremental growth for commodities driven by emerging nations, their demand will have a greater significance in determining price fluctuations.
Sovereign Risk
This document by the Fraser Institute provides a detailed review of the extent to which various economies around the world allow personal choice, voluntary exchange, freedom to compete and security of privately owned property. A useful reference, as a global marketplace sees more and more companies dealing in overseas markets with sovereign risk often not well understood by investors.
Global Imbalances in Retrospect and Prospect
In this 2010 speech by Economist and Executive Director - Financial Stability, Bank of England, Andrew G. Haldane provides proof for what many of us have always suspected, and that is that financial markets and public policy are becoming too short-term focussed.
What Drives House Prices in Australia? A Cross-Country Approach
In this 2010 International Monetary Fund working paper, Senior Economist in the Asia and Pacific Department of the International Monetary Fund, Patrizia Tumbarello and co-author, Economist at International Monetary Fund, Shengzu Wang look at the Australian housing market and find that it might be overvalued by only 5% to 10% and that any price correction is likely to be orderly given broader financial stability of the banking system. However, high indebtedness of households and deleveraging in combination with a fall in house prices could negatively impact household spending.
Do We Know What We Need to Know to Lean Against the Wind?
In this 2010 speech by US Economist and External Member of the Monetary Policy Committee of the Bank of England, Adam S. Posen, he examines whether or not a policy response of tightening monetary policy pre-emptively can prevent or pop asset bubbles - that is to lean against the wind. His findings are startling...
After the Recession: Thoughts on the Growth Potential of the United Kingdom
http://www.bankofengland.co.uk/publications/speeches/2010/speech461.pdf
In this 2010 Bank of England speech by former Economics lecturer at Cambridge University and Monetary Policy Committee, Martin Weale discusses to what extent the Global Financial Crisis has crimped the growth potential of the United Kingdom economy and to what extent monetary policy can be used to stimulate the economy without pushing up inflation.
Financial Reform
http://www.bankofengland.co.uk/publications/speeches/2010/speech447.pdf
In this 2010 Bank of England speech by Executive Director, Prudential Regulation Authority (PRA) - Deputy CEO designate, Andrew Bailey discusses the need for on-going financial reform - indeed he talks about the transition over a two year time frame to a new system of financial regulation in the UK - in order to re-establish financial stability.
Global Imbalances in Retrospect and Prospect
In this 2010 speech by Economist and Executive Director - Financial Stability, Bank of England, Andrew G. Haldane considers past and future current account balances, capital flows and savings rates, highlighting some dramatic changes.
Indonesia: Selected Issues - IMF Country Report
This 2010 selected issues paper for Indonesia was prepared by a staff team of the International Monetary Fund. Various issues relating to the Indonesian economy are discussed, providing a good snapshot of the economic situation of this important neighbour nation.
How a New Jobless Era Will Transform America
In this 2010 "The Atlantic" article, in the aftermath of the Global Financial Crisis, Author and Deputy Managing Editor of The Atlantic Magazine, Don Peck considers the social, economic, and cultural implications of long term unemployment on the USA Society.
Is private equity misleading investors?
This 2010 BBC World Service - Business Daily program is about the fierce new debate that has been stirred up about private equity, an industry which buys up under-performing companies to run them better and sell them on again at a profit. Questions have been raised about whether private equity firms are actually making as much money for their investors as they claim. They come in a controversial report from the British think-tank, the Centre for the Study of Financial Innovation. Its author, former banker Peter Morris, explains his concerns about the size of private equity fees, and the way that financial returns are expressed. Lesley Curwen puts these concerns to private equity boss, Jon Moulton, who is the chairman of Better Capital. He agrees that some members of the industry have "over-stated their case" and says "private equity is struggling to show that it's a really seriously superior activity."
Interpreting the World Trade Collapse
In this 2010 quarterly bulletin from the Bank of England's International Advisory Division, Silvia Domit and Tamarah Shakir examine why from the end of 2008 world trade collapsed at a faster rate than GDP and why it subsequently recovered much faster, by focussing on UK export demand.
The Short-Run Macroeconomics of Aid Inflows: Understanding the Interaction of Fiscal and Reserve Policy
In this 2010 International Monetary Fund working paper, Economist and Assistant Director and chief of the Development Macroeconomics Division in the IMF’s Research Department, Andrew Berg et al. examine the effects of "aid surges" on interest rates, exchange rates and inflation, where the aid is added to the central bank's reserves rather than immediately absorbed into the economy. The recent experience of Uganda provided the real life example of what can happen. Interestingly, in their conclusion, the authors note that their findings might be applicable to the macroeconomics of natural resources booms in low-income countries...
Countering the Cycle—The Effectiveness of Fiscal Policy in Korea
In this 2009 International Monetary Fund working paper, HSBC Chief Economist for India and ASEAN, Leif Lybecker Eskesen examines how effective the decisive and proactive fiscal measures of the Korean authorities were in stemming the fallout of the Global Financial Crisis, especially in the context of the high openness of Korea's economy.
Optimal Monetary Policy During Endogenous Housing-Market Boom-Bust Cycles
This 2009 Bank of Canada working paper by Hajime Tomura from the Bank of Canada considers how monetary policy can be optimised to stabilise output and inflation in an environment where endogenous boom-bust cycles in house prices can occur.
Heterogeneous Beliefs and Housing-Market - Boom-Bust Cycles in a Small Open Economy
This 2009 Bank of Canada working paper by Hajime Tomura from the Bank of Canada examines the co-existence of optimistic credit-constrained borrowers and pessimistic savers who respectively take and provide mortgage loans and generate expectation-driven boom-bust cycles in house prices.
Monetary Policy in Turbulent Times
In this 2009 speech, Economist and External Member of the Monetary Policy Committee of the Bank of England from October 2006 to May 2011, Andrew Sentance outlines the factors that shook the UK economy during the Global Financial Crisis and what monetary policy is now most appropriate to navigate the recovery.
Globalization: The Concept, Causes, and Consequences
In this 1998 speech, Chief Economist for the South Asia Region at the World Bank, John Williamson explains why he believes that globalisation is technology driven and therefore here to stay. He goes on to discuss political consequences and social implications that need to be considered in the context of globalisation of the world economy.
In this interview, Economist Tyler Cowen discusses some of the ideas from his recently published book "The Great Stagnation: Why Hasn't Recent Technology Created More Jobs?", in which he challenges commonly held beliefs about technological progress and jobs.