Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

World Economy

When will Ronaldo dive? Insights from behavioural economics

With all the investment banks getting in on the act, here’s another shameless attempt to cash in on the World Cup. When will Ronaldo dive? What can behavioural economics tell us about this? After a quick poll, to profile Ronaldo, this post looks at three schools of thought in economics that might reveal something about when Ronaldo will dive: how people are biased to the present, how people value fairness and how people dislike ambiguity. Read more

How much trade has been lost in the Great Recession?

This post examines the latest OECD data, to see which economies have been most affected by “lost trade” during the Great Recession, especially as it is being rewritten in the light of eurozone/PIIGS crisis. It turns out that the nature of the exporting sector, and not the government’s finances, has determined a country’s trading success since 2008, with drug-exporting Ireland and Switzerland among the least affected, while Finland (ICT) and Japan (cars) find themselves among the most affected. Read more

Untangling Europe’s “web of debt”

This post examines the so-called “web of debt” across the EU, a graphic published in a recent New York Times article. By using gross debt statistics, and regardless of the borrower’s sector, the chart misses the obvious point that the markets are worried primarily about government debt. Indeed, the logic of the chart forces the authors into almost the completely wrong conclusion about the UK! Read more

India, the sleeping giant of urbanisation

This post explores the now freely available World Development Indicators, from the World Bank. In particular, it looks at urbanisation and the role for cities in development and creating wealth and well-being. Over the past 50 years, China in particular has urbanised fast. Over the next 50, India may be the centre of city growth. This presents development challenges but on balance is a huge opportunity. Read more

With commodity prices rising, inflationary pressures start to mount in the eurozone

Inflation in the eurozone has jumped up in recent months from -0.5% to +1.0%. This post examines the likely pressures on eurozone inflation in 2010, by looking at the prices of commodities. Using World Bank data on commodity prices, it finds rapid inflation in commodities since late 2009. With the current over-reliance of macroeconomic policy on interest rates, this poses a threat to eurozone growth. Read more

We need to talk about Britain

With so much of the focus of the media and markets on Greece and its PIGS neighbours in the eurozone, one could easily forget that the UK will have the largest deficit in the EU this year and next. This post suggests that being outside the eurozone is a two-way street for the UK. The lack of restraint on its fiscal policy is already showing, with a simple index of government finance statistics placing the UK finances as the weakest of 24 developed countries. Read more

A reality check on rich-country inequality

This post reviews the ILO’s Global Wage Report and in particular its expanding dataset on internal inequality between top and bottom earners. While inequality has fallen in many countries, including Ireland, there is no strong evidence of a global trend in that direction. The figures contain an important reminder: even the poorest in wealthy countries live in conditions that average earners in most other countries would happily take. Read more

Reforming taxes on work the big challenge to EU competitiveness

This post reviews the latest Paying Taxes report by the World Bank. It highlights a huge challenge for the EU, which aims to become the most competitive economy in the world, as very few of its member states have a globally competitive regulatory system. An analysis of the report’s figures shows the EU has attempted to build its success on efficient corporate tax systems, while labour taxes remain hugely inefficient. Read more

Which countries have been displaced most by the global recession? The Russia effect

This post examines global economic growth and investigates which parts of the world have been knocked out of their economic stride by the 2008/2009 recession. It finds that, just as there was a China effect in who has rebounded fastest this year, there has been a Russia effect – or certainly a post-Soviet effect – looking at those economies worst hit. Both findings highlight the importance of regional and continental economic links, even in a globalised world. Read more

Which countries have seen their economies rebound fastest? The China effect

The IMF has published its latest growth forecasts. This post gives an overview of the headline stats and analyses the revisions to the 2009 figures. It finds that while some countries in most regions of the world, with the possible exception of the Americas, have seen their growth prospects this year significantly improve, the largest concentration is around China. This suggests a regional dimension to the global economy that is likely to prove important in the medium ter. Read more