How We’ve Lost Our Moorings as a Society
https://www.nytimes.com/2024/05/28/opinion/trump-civility-society.html
https://www.nytimes.com/2024/05/28/opinion/trump-civility-society.html
Attention Economy
Wednesday, May 29, 2024
Home Insurance and Inflation
Home Insurance Is Clobbering Consumers. Yet It’s Barely Counted in Inflation.
https://www.nytimes.com/2024/05/29/business/economy/home-insurance-inflation.html
https://www.nytimes.com/2024/05/29/business/economy/home-insurance-inflation.html
Will Europeans Work More Hours?
Persuading Europeans to work more hours misses the point
https://www.ft.com/content/2a6c183f-b659-404d-9dec-136fb39e8434
Shrinking workforce would be better tackled by helping those who don’t want a job to work a little, research suggests
https://www.ft.com/content/2a6c183f-b659-404d-9dec-136fb39e8434
Shrinking workforce would be better tackled by helping those who don’t want a job to work a little, research suggests
Tuesday, May 28, 2024
Yield Curve Inversion
Wall Street’s Favorite Recession Indicator Is in a Slump of Its Own
https://www.wsj.com/finance/investing/wall-streets-favorite-recession-indicator-is-in-a-slump-of-its-own-ee885cb9
Treasury yields have been inverted for the longest stretch on record
https://www.wsj.com/finance/investing/wall-streets-favorite-recession-indicator-is-in-a-slump-of-its-own-ee885cb9
Treasury yields have been inverted for the longest stretch on record
Behavioral Nudges
The Problem with Behavioral Nudges
https://www.wsj.com/economy/consumers/decision-making-research-behavior-2e5060c1
The benefits of steering people toward making better decisions has become conventional wisdom. But the evidence suggests it doesn’t work quite as well as we hoped.
https://www.wsj.com/economy/consumers/decision-making-research-behavior-2e5060c1
The benefits of steering people toward making better decisions has become conventional wisdom. But the evidence suggests it doesn’t work quite as well as we hoped.
Sunday, May 26, 2024
Economics of the Global Energy Challenge
Greenstone, Michael. 2024. "The Economics of the Global Energy Challenge." AEA Papers and Proceedings, 114: 1-30.
Abstract
Rather than facing an isolated climate change challenge, this paper argues that the world must confront the Global Energy Challenge (GEC) that requires all countries to make trade-offs between three often competing and interrelated goals: inexpensive and reliable energy, clean air, and limiting damages from climate change. This paper presents seven facts that help illuminate the contours of the GEC and the interactions between the three goals. It concludes by outlining potential solutions: pricing energy at its full social cost, investing in technical and policy innovation, improving information on pollution and climate damages, and treating energy as a private good.
Abstract
Rather than facing an isolated climate change challenge, this paper argues that the world must confront the Global Energy Challenge (GEC) that requires all countries to make trade-offs between three often competing and interrelated goals: inexpensive and reliable energy, clean air, and limiting damages from climate change. This paper presents seven facts that help illuminate the contours of the GEC and the interactions between the three goals. It concludes by outlining potential solutions: pricing energy at its full social cost, investing in technical and policy innovation, improving information on pollution and climate damages, and treating energy as a private good.
Math Education Debate
Fixing the Calamity in U.S. Math Knowledge Starts with Algebra
https://www.nytimes.com/2024/05/21/opinion/algebra-math-racial-gap.html
The Algebra Problem: How Middle School Math Became a National Flashpoint
https://www.nytimes.com/2024/05/22/nyregion/middle-school-math-algebra.html
https://www.nytimes.com/2024/05/21/opinion/algebra-math-racial-gap.html
https://www.nytimes.com/2024/05/22/nyregion/middle-school-math-algebra.html
Business Readiness and Promising Emerging Markets
Creating a “Goldilocks” Business Climate
https://www.project-syndicate.org/commentary/business-ready-improving-conditions-for-human-ingenuity-by-indermit-gill-2024-10
To address the problems associated with its “Doing Business” rankings, the World Bank Group has developed a new analytical framework to assess an economy’s “business readiness.” While factors like the regulatory burden on enterprises still matter, so do the quality of regulations and public services.
Business Ready
https://www.worldbank.org/en/businessready
https://www.project-syndicate.org/commentary/business-ready-improving-conditions-for-human-ingenuity-by-indermit-gill-2024-10
To address the problems associated with its “Doing Business” rankings, the World Bank Group has developed a new analytical framework to assess an economy’s “business readiness.” While factors like the regulatory burden on enterprises still matter, so do the quality of regulations and public services.
https://www.worldbank.org/en/businessready
India, Indonesia Stand Out for EM Investors in Aging World
https://www.bloomberg.com/news/articles/2024-05-26/india-indonesia-standout-for-em-investors-in-aging-world
https://www.bloomberg.com/news/articles/2024-05-26/india-indonesia-standout-for-em-investors-in-aging-world
Understanding India’s evolving middle classes
https://eastasiaforum.org/2024/05/21/understanding-indias-evolving-middle-classes/
https://eastasiaforum.org/2024/05/21/understanding-indias-evolving-middle-classes/
Friday, May 24, 2024
Rise of India's Service Sector
What India’s clout in white-collar work means for the world
https://www.economist.com/leaders/2024/05/23/what-indias-clout-in-white-collar-work-means-for-the-world
In time its tech firms could be as formidable as China’s manufacturers
Global firms are tapping India’s workers like never before
https://www.economist.com/business/2024/05/23/global-firms-are-tapping-indias-workers-like-never-before
They want their brains more than their brawn
https://www.economist.com/leaders/2024/05/23/what-indias-clout-in-white-collar-work-means-for-the-world
In time its tech firms could be as formidable as China’s manufacturers
Global firms are tapping India’s workers like never before
https://www.economist.com/business/2024/05/23/global-firms-are-tapping-indias-workers-like-never-before
They want their brains more than their brawn
History Lesson: Inevitable Backlash to Excessive Immigration
Lessons of the 1924 Immigration Act
https://www.wsj.com/articles/lessons-of-the-1924-immigration-act-cfc0c443
America welcomes newcomers, but there are always limits.
Related:
https://www.washingtonpost.com/history/2024/05/24/johnson-reed-act-immigration-quotas-trump/
https://www.wsj.com/articles/lessons-of-the-1924-immigration-act-cfc0c443
America welcomes newcomers, but there are always limits.
Related:
https://www.washingtonpost.com/history/2024/05/24/johnson-reed-act-immigration-quotas-trump/
UK Tories Face Electoral Disaster
Britain to World: Don’t Let What Happened to Us Happen to You
https://www.wsj.com/economy/britain-to-world-dont-let-what-happened-to-us-happen-to-you-09d24e5c
In bid for re-election, Conservatives’ economic record is hobbled by bad luck and bad choices
https://www.wsj.com/economy/britain-to-world-dont-let-what-happened-to-us-happen-to-you-09d24e5c
In bid for re-election, Conservatives’ economic record is hobbled by bad luck and bad choices
Keir Starmer seeks an Attlee-style landslide without having to explain why he deserves one
https://www.telegraph.co.uk/news/2024/05/24/starmer-seeks-attlee-style-landslide-without-explaining-why/
All parties are evasive about how dangerous our current situation is. I fear that is because they don’t know what to do about it
https://www.telegraph.co.uk/news/2024/05/24/starmer-seeks-attlee-style-landslide-without-explaining-why/
All parties are evasive about how dangerous our current situation is. I fear that is because they don’t know what to do about it
Neither party has an economic plan to escape stagnation, and neither has my vote
https://www.telegraph.co.uk/business/2024/05/24/neither-party-economic-plan-escape-stagnation/
https://www.telegraph.co.uk/business/2024/05/24/neither-party-economic-plan-escape-stagnation/
Investing and Feelings
What Our Brains Know About Stocks—but Won’t Tell Us
https://www.wsj.com/finance/investing/what-our-brains-know-about-stocksbut-wont-tell-us-880d5d72
Going on gut feelings when you invest is often a terrible idea. New research helps explain why it can sometimes be beneficial.
https://www.wsj.com/finance/investing/what-our-brains-know-about-stocksbut-wont-tell-us-880d5d72
Going on gut feelings when you invest is often a terrible idea. New research helps explain why it can sometimes be beneficial.
“Attempt to be fearful when others are greedy and to be greedy only when others are fearful” – Warren Buffet
Thursday, May 23, 2024
Rise of Mesoeconomics
The Rise of Mesoeconomics
https://www.project-syndicate.org/onpoint/mesoeconomics-study-of-networks-supply-chains-key-to-successful-industrial-policies-by-william-h-janeway-2024-05
Forget macro and micro, it’s mesoeconomics that matters
https://www.ft.com/content/79cf81af-5073-4c73-938b-93e8ac08c74d
https://www.project-syndicate.org/onpoint/mesoeconomics-study-of-networks-supply-chains-key-to-successful-industrial-policies-by-william-h-janeway-2024-05
https://www.ft.com/content/79cf81af-5073-4c73-938b-93e8ac08c74d
Global Equities
Emerging markets are the next great stock market play
https://www.telegraph.co.uk/business/2024/05/23/emerging-markets-are-next-great-stock-market-play/
The case has seldom been stronger for investors to back the developing world
Japan’s Stock Market Is Booming. It Isn’t All About the Weak Yen.
https://www.wsj.com/finance/currencies/japans-stock-market-is-booming-it-isnt-all-about-the-weak-yen-1813ed2b
Although some prominent companies such as Toyota are benefiting from a weaker Japanese currency, the broad impact is mixed
https://www.telegraph.co.uk/business/2024/05/23/emerging-markets-are-next-great-stock-market-play/
The case has seldom been stronger for investors to back the developing world
Japan’s Stock Market Is Booming. It Isn’t All About the Weak Yen.
https://www.wsj.com/finance/currencies/japans-stock-market-is-booming-it-isnt-all-about-the-weak-yen-1813ed2b
Although some prominent companies such as Toyota are benefiting from a weaker Japanese currency, the broad impact is mixed
Forget the Magnificent 7 – Why You Should Invest in Europe’s Fantastic 5
https://www.thornburg.com/article/forget-the-magnificent-7-why-you-should-invest-in-europes-fantastic-5/
https://www.thornburg.com/article/forget-the-magnificent-7-why-you-should-invest-in-europes-fantastic-5/
Wednesday, May 22, 2024
Forecasting Economic Turning Points
Why economist forecasts of a US recession were so wrong
https://www.ft.com/content/9d96e0e1-0067-4a37-abcf-3f288116e04c
The Black Swan Risk Now Is a US Recession
https://www.bloomberg.com/news/newsletters/2024-05-22/the-black-swan-risk-now-is-a-us-recession
https://www.ft.com/content/9d96e0e1-0067-4a37-abcf-3f288116e04c
https://www.bloomberg.com/news/newsletters/2024-05-22/the-black-swan-risk-now-is-a-us-recession
Return of the Everything Rally?
Risky Bonds Join the Everything Rally
https://www.wsj.com/finance/investing/risky-bonds-join-the-everything-rally-3ca8b318
The premium paid by high-yield debt falls to near pandemic-era lows.
https://www.wsj.com/finance/investing/risky-bonds-join-the-everything-rally-3ca8b318
The premium paid by high-yield debt falls to near pandemic-era lows.
Job Market Prospects Dim for Class of 2024
Companies Want Fewer Grad Hires This Year
https://www.wsj.com/lifestyle/careers/jobs-ai-disruption-2024-college-graduates-f72247ab
Companies are hiring fewer fresh graduates and rethinking their needs for entry-level talent
https://www.wsj.com/lifestyle/careers/jobs-ai-disruption-2024-college-graduates-f72247ab
Companies are hiring fewer fresh graduates and rethinking their needs for entry-level talent
Higher Education: Supply versus Demand
Colleges Ramp Up Debt Sales in Frenzied Race for New Students
https://finance.yahoo.com/news/colleges-ramp-debt-sales-frenzied-110008368.html
The crux of the challenges many schools face comes down to the basic economic principles of supply and demand. There are simply too many colleges and not enough students.
The number of high school graduates are expected to drop 10.4% between 2026 to 2037, according to the Western Interstate Commission for Higher Education. Pennsylvania alone has 88 private four-year institutions, of which 81 have 5,000 undergraduate students or less, according to federal data.
https://finance.yahoo.com/news/colleges-ramp-debt-sales-frenzied-110008368.html
The crux of the challenges many schools face comes down to the basic economic principles of supply and demand. There are simply too many colleges and not enough students.
The number of high school graduates are expected to drop 10.4% between 2026 to 2037, according to the Western Interstate Commission for Higher Education. Pennsylvania alone has 88 private four-year institutions, of which 81 have 5,000 undergraduate students or less, according to federal data.
Related:
My take from Jan 2022: Is the US higher education bubble about to burst?
https://thehill.com/opinion/education/590971-will-the-us-higher-education-bubble-finally-burst/
https://thehill.com/opinion/education/590971-will-the-us-higher-education-bubble-finally-burst/
The Politics and Economics Behind the U.S. Shift Towards Protectionism
Biden’s China Tariffs Are the End of an Era for Cheap Chinese Goods
https://www.nytimes.com/2024/05/18/business/biden-china-tariffs.html
Democrats and Republicans once joined forces to engage economically with Beijing, driven by a theory that America would benefit from outsourcing production to countries that could manufacture certain goods more cheaply, in part by paying their workers low wages. Economists knew some American workers would lose their jobs, but they said the economy would gain overall by offering consumers low-cost goods and freeing up companies to invest in higher-value industries where the United States had an innovation advantage.
The parties are now competing to sever those ties.
How America exploits “free trade” to secure its hegemony.
https://www.newstatesman.com/ideas/2024/05/joe-biden-tariffs-nixon-art-trade-war
Reaganomics Is on Its Last Legs
https://www.theatlantic.com/ideas/archive/2024/05/tariffs-free-trade-dead/678417/
Joe Biden’s new tariffs on Chinese goods mark the decisive rejection of an economic orthodoxy that dominated American policy making for nearly half a century.
The U.S. Finally Has a Strategy to Compete With China. Will It Work?
https://www.wsj.com/economy/the-u-s-finally-has-a-strategy-to-compete-with-china-will-it-work-ce4ea6cf
Tariffs Push Up Costs. But Not Always Inflation
https://www.wsj.com/economy/trade/tariffs-push-up-costs-but-not-always-inflation-fa2e828b
Biden’s decision to raise tariffs on roughly $18 billion of goods from China has revived a long-running debate in economics over who ultimately pays such tariffs.
https://www.nytimes.com/2024/05/18/business/biden-china-tariffs.html
Democrats and Republicans once joined forces to engage economically with Beijing, driven by a theory that America would benefit from outsourcing production to countries that could manufacture certain goods more cheaply, in part by paying their workers low wages. Economists knew some American workers would lose their jobs, but they said the economy would gain overall by offering consumers low-cost goods and freeing up companies to invest in higher-value industries where the United States had an innovation advantage.
The parties are now competing to sever those ties.
How America exploits “free trade” to secure its hegemony.
https://www.newstatesman.com/ideas/2024/05/joe-biden-tariffs-nixon-art-trade-war
https://www.theatlantic.com/ideas/archive/2024/05/tariffs-free-trade-dead/678417/
Joe Biden’s new tariffs on Chinese goods mark the decisive rejection of an economic orthodoxy that dominated American policy making for nearly half a century.
The U.S. Finally Has a Strategy to Compete With China. Will It Work?
https://www.wsj.com/economy/the-u-s-finally-has-a-strategy-to-compete-with-china-will-it-work-ce4ea6cf
Tariffs Push Up Costs. But Not Always Inflation
https://www.wsj.com/economy/trade/tariffs-push-up-costs-but-not-always-inflation-fa2e828b
Biden’s decision to raise tariffs on roughly $18 billion of goods from China has revived a long-running debate in economics over who ultimately pays such tariffs.
South Africa's Political Future
The future starts in South Africa
https://www.newstatesman.com/international-content/2024/05/future-starts-south-africa-jacob-zuma
The country’s political disintegration offers a glimpse into how Western democracies could fail.
https://www.newstatesman.com/international-content/2024/05/future-starts-south-africa-jacob-zuma
The country’s political disintegration offers a glimpse into how Western democracies could fail.
Monday, May 13, 2024
Long-Term Consequences of Shifting Demographics
From the baby boom to the baby bust
https://www.ft.com/content/ab4ce770-18cf-4025-8714-186f16a4f145
Martin Wolf:
“…a shrinking population would in the long run help rebalance human demands with the carrying capacity of the planet and the health of the other species with which we share it”.
https://www.ft.com/content/ab4ce770-18cf-4025-8714-186f16a4f145
Martin Wolf:
“…a shrinking population would in the long run help rebalance human demands with the carrying capacity of the planet and the health of the other species with which we share it”.
Birthrates are falling fast across countries, with
economic, social and geopolitical consequences
Increased longevity will bring profound social
change
People will have to work longer and pension systems
will need to be transformed
Shrinking populations mean a poorer, more fractious world
https://www.economist.com/finance-and-economics/2024/05/23/shrinking-populations-mean-a-poorer-more-fractious-world
Has Europe already reached its demographic tipping point?
https://www.ft.com/content/71a515d9-e473-48b6-a6a0-bf839d1bb41e
https://www.economist.com/finance-and-economics/2024/05/23/shrinking-populations-mean-a-poorer-more-fractious-world
https://www.ft.com/content/71a515d9-e473-48b6-a6a0-bf839d1bb41e
What will Europe look like in the future?
https://www.spectator.co.uk/article/what-will-europe-look-like-in-the-future/
https://www.spectator.co.uk/article/what-will-europe-look-like-in-the-future/
https://www.project-syndicate.org/commentary/china-will-not-become-high-income-economy-anytime-soon-by-yi-fuxian-2024-05
Related:
Sunday, May 12, 2024
Can the Dollar Remain Pre-Eminent?
The fight to dethrone the dollar
Attempts to challenge the dollar have only
strengthened its dominance
Dangers of dollar nationalism hang over the world
economy
Even more serious than Fed rate rises would be a
politically driven devaluation of the US currency
A rising dollar spells trouble for investors
It may feel like a good thing – but a strong greenback
comes at a considerable cost It’s not right for poor countries to fund the rich
https://www.theguardian.com/commentisfree/2024/apr/24/the-guardian-view-on-globalisations-discontent-its-not-right-for-poor-countries-to-fund-the-rich
As TS Eliot put it, “between the idea and the reality … falls the shadow”. A paper out last week calculates that the bottom four-fifths of humanity finance the richest fifth to the tune of $660bn a year. The reason, say Gastón Nievas and Alice Sodano of the Paris School of Economics, is that wealthy countries have become the world’s bankers, able to squeeze debtors. Poor nations borrow in rich-world currencies because they run deficits in energy and food, while exporting low-value goods relative to their imports. Markets are liberalised in poor countries and profits flow to the global north.
The US is the biggest winner, with the eurozone being a close second, draining $160bn annually from the poor. Every year, developing nations forgo 2%-3% of their GDP, sums better spent on education, health and the environment. Globalisation’s big winners in the developing world have lost out too. The gains of the G8 group of industrialised nations are “paid by trade surpluses and financial losses of the Brics”.
Related:
https://wid.world/news-article/the-us-exorbitant-privilege-has-become-a-rich-world-privilege-new-study-calls-for-a-reform-of-the-international-monetary-system/
https://www.theguardian.com/commentisfree/2024/apr/24/the-guardian-view-on-globalisations-discontent-its-not-right-for-poor-countries-to-fund-the-rich
As TS Eliot put it, “between the idea and the reality … falls the shadow”. A paper out last week calculates that the bottom four-fifths of humanity finance the richest fifth to the tune of $660bn a year. The reason, say Gastón Nievas and Alice Sodano of the Paris School of Economics, is that wealthy countries have become the world’s bankers, able to squeeze debtors. Poor nations borrow in rich-world currencies because they run deficits in energy and food, while exporting low-value goods relative to their imports. Markets are liberalised in poor countries and profits flow to the global north.
The US is the biggest winner, with the eurozone being a close second, draining $160bn annually from the poor. Every year, developing nations forgo 2%-3% of their GDP, sums better spent on education, health and the environment. Globalisation’s big winners in the developing world have lost out too. The gains of the G8 group of industrialised nations are “paid by trade surpluses and financial losses of the Brics”.
https://wid.world/news-article/the-us-exorbitant-privilege-has-become-a-rich-world-privilege-new-study-calls-for-a-reform-of-the-international-monetary-system/
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