International Economics: Pre-U Economics
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Currency war could cause lasting damage to world economy

Currency war could cause lasting damage to world economy | International Economics: Pre-U Economics | Scoop.it
Mohamed el-Erian: In order for some currencies to depreciate, others must appreciate - here is where things get interesting, complex, and potentially dangerous
Graham Watson's insight:

An essential article to help you understand the nature of global trade and the influence of exchange rates on trade. The whole question of exchange rate manipulation is examined as are the dire consequences of a trade war.

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Cranbrook Economics's curator insight, January 27, 2013 1:29 PM

Hopefully this will refresh you year 13's into thinking about Exchange Rates and Currency issues from our pre-Unit 3 studies in September. Remember how significant Exchange Rates are to a countries trade balance (X-M) and how a country, if it wished and operated a Managed Exchange Rate, could intervene to make it exports artificially more compeitive. Have a read!!!

Mr Livingstone's BUSS4 External Environment's curator insight, February 24, 2013 10:41 AM

low currency means more competitvely priced exports.. Boost GDP!

International Economics: Pre-U Economics
A collection of articles relating to the 'international' elements of Economics and relating to the Pre-U syllabus
Curated by Graham Watson
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Whatever the IMF thinks, we are a long way from the boom time of 2007 | Larry Elliott

Whatever the IMF thinks, we are a long way from the boom time of 2007 | Larry Elliott | International Economics: Pre-U Economics | Scoop.it
Christine Lagarde may be optimistic about the global economy but there are good reasons why the heady growth seen before the financial crisis won’t come back
Graham Watson's insight:
The salad days of 2007. Great days.

However, as Larry Elliott points out, the world has changed since then. But as he points out, the IMF appear not to have noticed. He argues that 2007 represented peak America, peak growth, peak globalisation and peak democracy. A lot has changed since then.
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Inequality: We can do something about it!

Excessive inequality has gone up in most countries in the last 30 years. It is detrimental to growth but not inevitable. With properly designed policies from health and education to income redistribution, governments can help reduce it.

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This IMF clip looks at rising inequality over the last thirty years, and reflects upon what the IMF can do to help nations tackle in-country inequality, and offset the effects of technology and globalisation on inequality via supply-side policies.
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Volkswagen to pay $2.8bn for cheating on US diesel emissions tests

Volkswagen to pay $2.8bn for cheating on US diesel emissions tests | International Economics: Pre-U Economics | Scoop.it
Judge issues order to follow deal with justice department after VW admits 600,000 cars were programmed to turn on pollution controls during testing
Graham Watson's insight:
Just another small bill for VW in the aftermath of the emissions scandal - $2.8bn - taking its total costs of the exercise to somewhere near $15bn.

A mere bagatelle!
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Trump launches investigation into steel dumping - BBC News

Trump launches investigation into steel dumping - BBC News | International Economics: Pre-U Economics | Scoop.it
Investigation is designed to stop countries from exporting artificially cheap steel to the US.
Graham Watson's insight:
As reported yesterday, President Trump is investigating 'dumping' of steel. You should be aware of exactly what 'dumping' entails, and also why it's so hard to prove.

And even if dumping occurs, aren't consumers benefiting from this?

One wonders whether the government investigation is working inductively - from conclusion to evidence.
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The Guardian view on the IMF: a global institution in an age of protection | Editorial

The Guardian view on the IMF: a global institution in an age of protection | Editorial | International Economics: Pre-U Economics | Scoop.it
Editorial: The International Monetary Fund’s boss, Christine Lagarde, needs an answer for the car worker in Michigan
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A very interesting, and possibly slightly predictable Guardian riposte to the IMF trying to define a role for itself yesterday: can the institution justify its role to a car worker in Michigan.

It might smack of the excellent Mitchell and Webb "Job Justification Hearings" - but that's not a bad thing in my mind.
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Helping boost growth and jobs

The IMF works with governments around the world to modernize their economic policies and institutions. This helps countries strengthen their economy an
Graham Watson's insight:
This clip shows what the International Monetary Fund (IMF) does: it's a straightforward look at how the institution provides support for governments to try to ensure inclusive growth.
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Britons are working one week less per year than two decades ago

Britons are working one week less per year than two decades ago | International Economics: Pre-U Economics | Scoop.it
Workers in the UK are working the equivalent of a week's work less a year than they did 20 years ago, new figures have revealed.
Graham Watson's insight:
You might be surprised by the fact that we're working less than we used to. However, I'll wager that you'll be even more surprised by the country whose workers who work the 4th longest hours in the world, according to the OECD. 
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Why the market for fossil fuels is all burnt out

Why the market for fossil fuels is all burnt out | International Economics: Pre-U Economics | Scoop.it
‘I usually put a £5 bet on the oil price – and I’m collecting,” smiles Prof Dieter Helm.
Graham Watson's insight:
I'll put this story in the International Economics section of the board, because it is a truly global story. However, in this interview Dieter Helm, whose latest book "Burn Out: The End Game for Fossil Fuels" was released last month, summarises its main arguments.

I confess to having not read it, which is rare, however, his position is that the oil industry is in near-terminal decline and that those companies that fail to realise this are going to go to the wall quicker than they can imagine. The main problem, as he sees it, seems to be that the companies are sat on oil reserves that are going to be a depreciating asset in a world where the rise of the electric car is going to significantly reduce the demand for oil. 
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Higher interest rates. Great idea. Here’s why it won’t happen

Higher interest rates. Great idea. Here’s why it won’t happen | International Economics: Pre-U Economics | Scoop.it
The Bank of England, IMF and other policymakers see ongoing low rates as dangerous but can’t see how to change things. There is a way, of course …
Graham Watson's insight:
Phillip Inman writes a thought-provoking article about current concerns about low interest rates and whether or not, as some would like, we're at a point where interest rates are likely to move back towards more 'normal' interest rates, around 4-6%.

His conclusion? It's not likely to happen, as Inman writes: global Finance Ministers aren't going to be able to increase rates, not least because "they cannot agree on the reason for the current predicament".

He suggests one or two alternative solutions - higher wealth taxes, and depreciation of the pound, in the case of the UK. However, neither of these suggestions is without its drawbacks.
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World Bank chief plays down prospect of €3bn Greek loan 

World Bank chief plays down prospect of €3bn Greek loan  | International Economics: Pre-U Economics | Scoop.it
The President of the World Bank has dampened the prospect of handing billions of euros to Greece to boost jobs and growth as he signalled that securing board approval would be difficult.
Graham Watson's insight:
Szu Ping Chan clearly works as hard as I do: this appeared yesterday, dispelling the rumours that the World Bank is about to give Greece a loan to help it out of its current position. The Greeks have endured a tough near-decade of austerity.

However, the fact that he Greeks have asked for World Bank help is indicative of their plight, and unemployment is still nearly 25%, with youth unemployment far higher.
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Should Zambia ban food imports? - BBC News

Should Zambia ban food imports? - BBC News | International Economics: Pre-U Economics | Scoop.it
The reversal of a ban on certain food imports has angered Zambian producers.
Graham Watson's insight:
This BBC clip looks at Zambian economy's dilemma: the government wanted to protect its farmers and imposed restrictions on the import of foreign-produced fruit and vegetables. However, this contravenes international law and thus the restrictions have been repealed, to the detriment of farmers.

It shows how protectionism is a vexed issue - how it benefits a small, narrowly defined group but at the expense of a broader constituency who might be faced with price increases.
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Global recovery gathers steam as employment hits record high 

Global recovery gathers steam as employment hits record high  | International Economics: Pre-U Economics | Scoop.it
A surge in hiring across the world’s developed economies has pushed employment rates to a record high, underlining the recovery which is taking part across much of the globe.
Graham Watson's insight:
The OECD reports that the global economy is recovering and employment levels are rising, improving standards of living,

Of course, being the Telegraph, this is tied in to the apparent 'strength' of the UK economy.
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Trump's trade agenda: Just what are his priorities? - BBC News

Trump's trade agenda: Just what are his priorities? - BBC News | International Economics: Pre-U Economics | Scoop.it
Trade was one of the dominant themes in Donald Trump's election campaign, but what are his priorities?
Graham Watson's insight:
This BBC piece is short on techincal detail but highlights the fact that despite his campaign rhetoric, President Trump's trade position is more nuanced. It looks in particular, at the US relationship with countries with which it runs trade deficits: China, Mexico and Germany and concludes that the extreme positions adopted in his presidential campaign aren't reflected in the conduct of policy.
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IMF meeting drops anti-protectionism pledge - BBC News

IMF meeting drops anti-protectionism pledge - BBC News | International Economics: Pre-U Economics | Scoop.it
But the global body believes protectionist policies could choke off improving global growth.
Graham Watson's insight:
Interesting how, with all the material that the IMF has published this week, the anti-protectionism pledge is omitted from the closing note of their spring meeting.

Hypocrisy or pragmatism? You choose. Perhaps pragmatism is what hypocrites call hypocrisy.
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Protectionism is rising the world over. Our best defense is fighting inequality | Wally Adeyemo

Protectionism is rising the world over. Our best defense is fighting inequality | Wally Adeyemo | International Economics: Pre-U Economics | Scoop.it
When the IMF and World Bank meet this week, they must work to restore faith in globalization – or risk that it falls prey to isolationists
Graham Watson's insight:
This Guardian piece puts up a stout defence of globalisation and argues that international institutions need to be at their most courageous to stand up to the current wave of populism, and convince people of the benefits of globalisation. This will require a real focus on inclusive growth and convincing people that the alternative, isolationism, is far worse.
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US discriminating against Chinese firms, says TCL boss - BBC News

US discriminating against Chinese firms, says TCL boss - BBC News | International Economics: Pre-U Economics | Scoop.it
The boss of electronics firm TCL tells the BBC a takeover would have gone through if his company was European.
Graham Watson's insight:
On the other hand, has the trade war already begun?

Certainly, this article highlights the fact that Li Dongsheng of consumer electronics firm TCL has alleged that US regulators have blocked the agreed purchase of an American technology firm. And if that's not protectionism, I don't know what is.
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World Bank chief echoes Bill Gates's warning to Theresa May on aid

World Bank chief echoes Bill Gates's warning to Theresa May on aid | International Economics: Pre-U Economics | Scoop.it
Jim Kim says reneging on the UK’s commitment to spend 0.7% of GDP on aid could lead to a rise in conflict and migration
Graham Watson's insight:
The president of the World Bank, JIm Kim, has told Theresa May that the UK should stick to its commitments regarding its aid budget, otherwise it will increase the risk of conflict and worsen the problems associated with migration.

Additionally, in a post-Brexit world, any withdrawal from international commitments will diminish Britain's global standing even further.
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Donald Trump praises 'historic day for American steel' as he launches investigation into imports

Donald Trump praises 'historic day for American steel' as he launches investigation into imports | International Economics: Pre-U Economics | Scoop.it
President Donald Trump has launched an investigation into Chinese and other foreign imports of steel – raising the spectre of a trade war, but an initiative praised by the president as an “historic day for American steel”.
Graham Watson's insight:
Always nice to see a President who has a grasp of the fundamentals of trade policy: protect the interests of the few, and increase costs, albeit by a relatively small amount, for the many.

One wonders if the President has done Econ 101, but given how clever he is, one also wonders whether he'd have to.
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Why exporting isn't just about shipping - BBC News

Why exporting isn't just about shipping - BBC News | International Economics: Pre-U Economics | Scoop.it
Services cannot be put on a boat and shipped, yet they way they are traded globally is increasingly important.
Graham Watson's insight:
The BBC's Andrew Walker looks at the growth in the service sector, as it accounts for an increasing proportion of international trade. In the past, there was a tendency to see services as (a) non-tradeable (b) shipping.

That view is increasingly being challenged. 
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IMF says pace of global economic growth is picking up - BBC News

IMF says pace of global economic growth is picking up - BBC News | International Economics: Pre-U Economics | Scoop.it
The International Monetary Fund says the global economy "could be at a turning point".
Graham Watson's insight:
The IMF's assessment of the state of the global economy is optimistic: the latest World Economic Outlook suggests that growth has picked up to "3.5%, up from 3.1% predicted in 2016."

However, potential headwinds include the prospect of trade wars and prospects for sub-Saharan Africa aren't as happy - with growth only just going to exceed population growth.
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Globalization Backlash: Should South Asia Worry?

Despite possible protectionism, South Asia, the fastest growing region in the world, has an opportunity to increase exports to create jobs and accelerate growth. How could this be achieved? An update from World Bank Chief Economist for South Asia, Martin Rama

Graham Watson's insight:
Today sees the launch of the World Bank's bi-annual South Asia Economic Focus - looking at how the regon is performing and the challenges that it still faces.

For example, I was unaware that it is the world's fastest growing region, but I was aware of the nature of some of its problems, notably high inflation and the need to create jobs. Nevertheless, for someone interested in the region, it was an fascinating clip.
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Trump, trade, interest and aid make for a challenging IMF summit

Trump, trade, interest and aid make for a challenging IMF summit | International Economics: Pre-U Economics | Scoop.it
With world tensions rising and globalisation in retreat, ministers and business leaders have much to discuss this week in Washington
Graham Watson's insight:
Katie Allen summarises the issue that the IMF will be discussing this week, highlighting five themes likely to dominate the spring meeting: protectionism and trade, productivity, political uncertainty, migration and the possiblity of higher US interest rates.
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Trump can’t have it both ways with US trade deficit

Trump can’t have it both ways with US trade deficit | International Economics: Pre-U Economics | Scoop.it
Another day, another campaign promise is thrown to the winds.
Graham Watson's insight:
This is a first-rate article that highlights the link between the level of debt in an economy and the trade deficit. Whilst it starts by highlighting the extent to which President Trump appears to have rowed back on many campaign promises,  it is excellent in making clear the link between debt and the current account position. I'd quote it - but there's simply too much good economics in this Juliet Samuel article.
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Stop meddling with the tax system, IMF warns governments

Stop meddling with the tax system, IMF warns governments | International Economics: Pre-U Economics | Scoop.it
Governments must stop meddling with the tax system and renew efforts to slash red tape and crack down on tax dodgers to boost living standards, according to the International Monetary Fund.
Graham Watson's insight:
This article highlights the IMF position regarding the reforms required to encourage economic growth: the standard measures - cutting red tape and cracking down on tax dodgers. What it wants to happen, is for governments to stop fiddling with the tax system at the margin and focus on more substantive supply-side reform.
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Building a More Resilient Global Economy

As the world economy is gaining momentum, what is needed is a foundation of sound domestic policies combined with a steadfast commitment to international cooperation, to create a more resilient and inclusive global economy says Christine Lagarde.

Graham Watson's insight:
As a follow up to the latest IMF assessent of the state of the global economy, this IMF clip splices together Christine Lagarde's original speech and some nice ainmation to highlight current issues and the threats to global stability.
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