Economics and International Affairs Blog

Sunday, November 9, 2014

Global Population Dynamics and Economics

Tyler Cowen in his NYTIMES piece observes:

“Many economists are uncomfortable with population issues, perhaps because they aren’t covered in depth in the standard graduate curriculum, or because they touch on topics that may be culturally controversial or even politically incorrect. That’s unfortunate. In the future, population economics — and associated social issues — are likely to be at front and center of our most important policy concerns.”

From an economic development perspective, David Bloom’s article in the Science journal is a must read:

http://www.sciencemag.org/content/333/6042/562.abstract

Friday, November 7, 2014

Rethinking the 'Fragile Five' Club of Emerging Markets

Two interesting pieces on emerging markets:
India and The ‘Fragile Five’ Tag

http://investors-corner.bnpparibas-ip.com/finance-and-investing/india-cuts-loose-fragile-five/

Russia and Brazil Look Suspect

http://www.economist.com/news/finance-and-economics/21631134-emerging-economies-hit-hard-times-brazil-and-russia-look-particularly-weak

Update – Russian Ruble Takes a Tumble

Wednesday, November 5, 2014

Crucial Stage for Abenomics

Where is Japan’s economy headed?

http://www.nytimes.com/2014/11/06/business/in-japan-moves-to-stimulate-economy-reach-a-critical-stage.html

Japanese policymakers ought to consider postponing the second stage of consumption tax hike (that is scheduled to go into effect next year).

Monday, November 3, 2014

Business Leaders Don't Always Understand Economics

Paul Krugman offers interesting insights into why business leaders often provide lousy economic advice (especially, macroeconomic policy advice):

http://www.nytimes.com/2014/11/03/opinion/paul-krugman-business-vs-economics.html

Krugman observes:

“… So think of what happens when a successful businessperson looks at a troubled economy and tries to apply the lessons of business experience. He or (rarely) she sees the troubled economy as something like a troubled company, which needs to cut costs and become competitive. To create jobs, the businessperson thinks, wages must come down, expenses must be reduced; in general, belts must be tightened. And surely gimmicks like deficit spending or printing more money can’t solve what must be a fundamental problem.

In reality, however, cutting wages and spending in a depressed economy just aggravates the real problem, which is inadequate demand. Deficit spending and aggressive money-printing, on the other hand, can help a lot.”

Abenomics and the Japanese Yen

Aggressive expansion of the monetary base by Bank of Japan (a key aspect of the so-called 'Abenomics' program) has certainly succeeded in weakening the Japanese currency:

Exchange rate is shown as dollars per yen -