Looking at things from the perspective of development economics and political economy of the future, I suggest we talk of “emancipating” economies. It’s a huge difference compared to “emerging” markets, as this time they are treated like subjects rather than objects. While in the case of “emerging markets” society is something less significant, a part … Read more
Insurance is an essential part of the financial infrastructure of a market economy. By spreading losses among members of a group with similar exposure, insurance encourages people to take prudent risks while protecting individuals from ruin in case they are the unlucky ones. Not all risks are insurable, however. Attempts to insure the uninsurable create … Read more
Recent data suggests some moderation in the world’s two biggest economies, the US and China, and some improvement in the weak sister of the major economies, the euro area. This Great Graphic that was posted on Business Insider captures this. At the same time, it is important to recognize that cross-country comparisons are misleading. For example, China’s flash PMI … Read more
Harping on about disequilibrium in Europe’s labor market is hardly surprising, given high and in fact gradually rising unemployment. Even though the region should have been recovering for couple of years now, the rate for the EU-27 currently stands at 11%, with Greece and Spain displaying the worst results, with 26.9% of their labor force … Read more
Here’s a nice piece from my friend Lynn Parramore at Alternet, summarizing a recent conference held in Rio: How Big Finance Crushes Innovation and Holds Back Our Economy. Here’s the conclusion, which is very much in line with my post from Monday: “the U.S. financial sector no longer serves the productive sector—in fact, it may … Read more
In my research for an article about the cross section of national income, I ran across this piece in Forbes by Tim Worstall. In this article, he uses proprietary Bloomberg and WSJ data for 2012 corporate offshore cash holdings to assess that corporate profits abroad are driving a reasonable share of the increase in the … Read more
If you can forgive the following gratuitous self-promotion of my upcoming book, I have a story to tell you about the U.S. employment picture. A story that you may find far more interesting than the media and government-led backslapping that has been forthcoming on “jobs days” in the first half of 2013: “Economists are notorious … Read more
In my effort to move away from covering Europe exclusively on this blog, I’ve returned to a little niche of economic data that had intrigued me in the past: US national income accounts/accounting. This time I’ll look at national income, specifically corporate profits – I’ve written about it before, and my colleague Ed Dolan covered it on … Read more
In economics there is the notion of economic rent—payment in excess of what is required to mobilize factors of production. For example, such rents accrue to those who have “cornered the market”—by artificially restricting supply of some resource, they are able to dictate usurious terms to buyers. We call them “rentiers”.Here’s the point that is … Read more
Although climate change catches the headlines, it is not the only doomsday scenario out there. A smaller but no less fervent band of worriers think that peak phosphate—a catastrophic decline in output of an essential fertilizer—will get us first. One of the worriers is Jeremy Grantham of the global investment management firm GMO. Grantham foresees … Read more