The Nobel Prize in Economics, awarded yesterday, highlighted the important role of expectations. The IMF’s World Economic Outlook has given the world an important barometer of expectations about the economic climate and how they change over time. This post uses IMF figures to estimate how many jobs will be lost over the period 2011-2015 in the Eurozone, the USA and in the rest of the developed world, due to politicians’ inaction on the debt crisis over the last twelve months alone.
With its future and survival increasingly topics of discussion, this post looks at the eurozone and two key questions. Firstly, are the eurozone’s member states too different to share a currency? Secondly, if the euro is to survive, will it need tax harmonisation and a big increase in federal spending? It answers these questions by comparing the eurozone and its members to the U.S. economy and its States.
The world’s richest citizens are currently fretting about serious economic problems that ultimately have as their root cause spending too much. Elsewhere, though, there are more pressing problems. In particular, drought and famine in southern Somalia pose an almost unprecedented humanitarian crisis. This post attempts to put some scale on the crisis.
The EU has released its latest consumer price survey, which found prices in Ireland are about 18% above the EU average – although that varies by sector, with clothes and footwear below average and food (and alcohol) significantly more expensive. This post tracks European countries’ changing competitiveness over time, with Ireland’s readjustment sizeable but not yet complete. Indeed a contrast with Iceland and the UK highlights the stark difference between countries that are forced to devalue and those than cannot.
The tuition fees debate in England and Wales shows no signs of cooling down. Opponents of the new scheme ignore the unfairness of the current system, while proponents ignore debt aversion on the part of students. Drawing on an innovative Colombian social enterprise that offers human capital contracts, this post makes the case for a type of “debt-for-equity” swap, where instead of debt, the UK government should take an equity stake in its graduates.
With talk of a change in the global economic pecking order, particularly around the new IMF chief, this post takes a long look at the world economy. It contrasts the current shares of world output with those of five hundred and two thousand years ago. The lessons of history – and the weight of maths – hold valuable lessons for Europe, as it seeks to find a new role in the world economy.
This post reviews the most recent IMF World Economic Outlook, the benchmark outlook on the global economy. A three-tier world economy is emerging, with China and India leading the way, and advanced economies bringing up the rear. For countries with high debt and shrinking and ageing populations, export growth is the key. Looking at the last few and next few years in Europe, a gap has emerged between leading exporters, such as Germany & Ireland, and straggling exporters, predominantly in the Mediterranean.
There is an increasing amount of talk that Ireland’s new government is prepared to do a deal with its EU partners, exchanging some of the country’s sovereignty in relation to corporate tax in return for a marginally lower interest rate on a portion of Ireland’s debt. This post discusses not only the hypocrisy and economic illiteracy on the part of Ireland’s EU partners as they push for such a move but also the costs to the Irish economy if it happened. Even leaving aside corporate tax revenues, the lost jobs, income and tax receipts make this a terrible deal for Ireland Inc.
Last week, Ireland had its most momentous election since 1932, when the Fianna Fail party that would dominate politics for 80 years was born. Aside from the politics, there are clear messages in the election. This post reviews, primarily for a non-Irish audience, two messages relating to Ireland’s debt burden – that voters do not want sovereign default but do not regard bank debt in that category – as well as the real underlying issues behind the voters’ choices.
Since 2000, China and India have replaced the OECD as the engine of global economic growth. This post, however, discusses an even more exciting picture that may be going on under the radar. Growth in sub-Saharan Africa has more than doubled to 6%, while population growth is slowing. With the region now home to one third of the world’s fastest growing economies, it might be time for the narrative of Africa’s growth to change.
