Writing by numbers is wrong route to right message 30 May 2017 World Bank Chief Economist Paul Romer wants staff to write more clearly. His rules include a strict limit on the frequency with which they can use “and”. The quest for simplicity is welcome. But as economists know, the pursuit of numerical targets can lead to perverse outcomes.
Review: A premature requiem for the liberal order 26 May 2017 Globalisation is in retreat and democracy under attack. Two new books foresee a gloomy future for the Western-led economic and political system. Yet just as some were too quick to proclaim its triumph in 1989, the obituaries sparked by Donald Trump’s election may prove too hasty.
Hadas: The next financial crisis could be in forex 24 May 2017 Foreigners are happy to hold U.S. dollars, but a swelling supply of currency brings risks of a disastrous loss of confidence. With overseas greenbacks at 11 pct of world GDP and global politics fractious, the dilemma identified by Robert Triffin in 1960 remains all too pertinent.
Euro rally is on probation 23 May 2017 The single currency is at six-month highs above $1.12. The euro zone economy’s improving health is being acknowledged, and French political risk has diminished even as it has risen in the United States. Yet options prices show little conviction that the gains will continue.
Suicide bombing brings tragic twist to UK election 23 May 2017 The attack that killed at least 22 concertgoers in Manchester is Britain’s deadliest in more than a decade. Its aftermath will dominate the remaining two and a half weeks of campaigning. As in other European countries, economic issues will take a back seat to security concerns.
Zimbabwe takes monetary lunacy to the next level 22 May 2017 The African state suffered hyperinflation in 2007 after paying bills by printing its own currency. A decade on, it is doing so by printing U.S. dollars instead. The idea of conjuring foreign currency from nowhere with the tap of a keyboard sounds too good to be true – and is.
Wasted time is U.S. healthcare’s big hidden cost 22 May 2017 America spends 18 pct of GDP on the medical-industrial complex, almost double most countries and for poorer results. Yet the figure excludes the effort of finding approved doctors, getting reimbursed and the like. That makes the potential gains of health reform even greater.
Japan’s job market is more brittle than it looks 19 May 2017 Unemployment is 2.8 pct and the country is on its longest growth streak in a decade. But some can only find part-time work, unions speak for just a minority, and productivity is patchy. So wage growth is anaemic - thwarting Premier Shinzo Abe's push for more inflation.
Britain’s joyless job boom is nothing to celebrate 17 May 2017 A record three of every four working-age Britons is employed. But prices are rising faster than wages, and a post-Brexit crackdown on immigration threatens to limit further expansions in the workforce. That makes declining productivity an even bigger cause for alarm.
Hadas: Puerto Rico, Greece and bad-faith debt 17 May 2017 Both the U.S. territory and the euro zone laggard have fine beaches, irresponsible governments and a debt crisis. The most just and helpful response to such debacles is to force reckless lenders to write off loans. That’s a hard sell. Thankfully, few sovereigns are so careless.
Review: Piketty is more stimulating when he’s wild 12 May 2017 Too much of the economist's bestseller on inequality was standard-issue theory. As a new anthology of essays on the book makes clear, much is wrong or missing in his reasoning. A critic’s call for "wild Piketty" rings true. The topic needs a broad, multi-disciplinary approach.
Macron inherits healthy economy – and will need it 12 May 2017 The French president-elect is taking over at a propitious time. Growth is picking up, unemployment has probably peaked and the budget deficit is expected to fall under the EU limit for the first time in a decade this year. That gives him some scope to sweeten unpalatable reforms.
If Britain cools on markets, others lose too 11 May 2017 The country’s two main political parties are both promising to intervene in high household electricity prices. In energy, market forces haven’t worked as they should. Yet if Britain backs away from its instinct to be mostly hands-off, other countries lose a reason to go forward.
Hadas: Solidarity is cure to Baumol’s cost disease 10 May 2017 William Baumol showed how differences in productivity put wage pressure on artists and other inefficient workers. The economist, who died last week, was right, but his analysis was too individualistic. The challenge is to find fair ways to share out the fruits of prosperity.
What’s Britain’s real Brexit bill? 9 May 2017 Negotiators may demand the UK pay 100 bln euros as part of an orderly EU exit. Avoiding this would mean leaving without a trade deal, which would hit future growth. This Breakingviews calculator estimates how much output and tax revenue Britain stands to lose in a chaotic Brexit.
Italy adds bum note to Macron’s ode to joy 8 May 2017 Emmanuel Macron took the French presidency, but that still leaves Italy as Europe’s other crisis-in-waiting. Elections are coming, disruptive parties are stronger and unemployment higher than in France. Growth-friendly policies and more fiscal leniency could mitigate the risk.
Millennial vigor helps drive U.S. employment gains 5 May 2017 U.S. employers added 211,000 positions in April, reducing the jobless rate to its lowest level in 10 years. Moreover, unemployment among young people is finally echoing the national picture as they are joining the workforce in bigger numbers. It’s a sign of a broadening recovery.
Review: Can we avoid another financial crisis? 5 May 2017 That's the question Steve Keen sets out to answer in his new book. He concludes that a capitalist economy can no better avoid another blowup than a dog can avoid attracting fleas. It’s only a matter of time. If the Australian economist is correct, we don’t have long to wait.
Greek bonds are the last of the ECB free rides 5 May 2017 Athens has pledged to cut pensions and raise taxes, and could soon be eligible for European Central Bank bond purchases. That would push up prices just as other euro zone bonds start going the other way. Europe could drag its heels, but the likelihood of a messy default is low.
Hadas: Basic income is basically confused 3 May 2017 As new technology threatens job security, the dream of giving all citizens a simple payment is making a comeback. But the idea is too expensive to be practical. It also ignores the biggest drawback of modern welfare states: that lives are complicated and people are not angels.