International Economics: IB Economics

The latest jobs data from the US illustrates that the economy is still rebounding at a decent pace, making it unlikely that the Federal Reserve are going to lower interest rates in the near future, because of fears that there still might be the prospect of inflation picking up.

The wider concern, is that this also implies that other economies are going to follow suit and it reduces the likelihood of short-term rate cuts elsewhere. 

Former US Secretary of Labor, Robert Reich, has a piece in today's Guardian arguing that the recent outbreak of strikes in the US is a good thing. His reasoning is that returns to workers - effectively, pay - have lagged behind returns to capital - profit - and that strikes are an attempt to correct this imbalance. He argues that the only workers to have gained are top executives - surprise, surprise - and that this needs addressing. 

The US has good news from tis labour markets,with joblessness reaching a 50 year record low and another half a million jobs being added in January. That said, it's a single month, and it's difficult to see this as part of a trend. 

This World Bank clip looks at how gender inequality is perpetuated in South Asia and how this impinge upon the developmental prospects in the region. The organisation is committed to tackling the issue, removing barriers to female participation in the labour market and in doing so overcome the social norms that have impeded development.

This is a really interesting argument about the nature of full employment in the Australian economy, noting that for university graduates there aren't very many jobs available, and those that are can be low-paid and relatively insecure. 

As a result, despite a seemingly healthy unemployment rate of 4%, it seems to be the case that an important measure of the health of the economy might be the level of under-employment which would better indicate the loss of potential output. 

Whilst the past decade has seen significant gains for women across the globe, the coronavirus pandemic has threatened to undo this - with rises in violence against women, and entrench them in informal labour markets, and at the current rate of progress, it will take another century to produce gender equality. 

This clip looks at how the World Bank is prioritising tackling gender-based inequality in building back after the pandemic 

This is a lovely example of what is meant by the term 'under-employment' and illustrates exactly what this implies for an economy. In this case, Japan is used as our case study, with rigidities - and downright sexism - meaning that many ex-housewives cannot find a job commensurate with their qualifications. 

As a result, many highly qualified women struggle to re-enter the labour force despite policy initiatives like Shinzo Abe's "Womenomics", and Japan's productive capacity suffers as a result. 

This World Bank clip looks at the importance of Early Years education, and the absence of poor quality childcare, to development. 

Without it, not only does it harm education and family welfare outcomes, but it also limits female participation in the labour market, and may damage the ability of small firms to grow. 

It's perhaps the important part of the whole education package, and requires more thought if intended to enhance developmental outcomes.  

A nice little clip from Reuters, showing how a motorbike leasing scheme has improved the standard of living for some women in rural Zimbabwe. 

The solar-powered three-wheeled bikes have allowed women to have greater mobility, boosting incomes, and also improved healthcare, in allowing a greater number of women than previously to give birth in hospital. Both enhance development.  

Another fascinating insight into policy debates on the Continent, this time French pension plans are under the microscope, with Emmanuel Macron having conceded ground to strikers and kept the age at which French people get full pensions at 62, instead of the 64 that he proposed. To put this into context, in Germany the pensionable age is 67, and it's in the process of increasing to that in the UK too.

President Macron has done a fair amount to make French labour markets more flexible, increasing the ease of hiring and firing, for instance. However, with the future of work in a post-industrial society increasingly precarious, it will be fascinating to see how long France will be able to maintain this position. 

Lovely World Bank clip that highlights the importance of female participation in the labour force but in areas which are traditionally seen as the preserve of men. This clip suggests that should women buck gender stereotypes and work in male-dominated sectors there are greater returns to be had.

The Economist looks at the notion of a universal basic income - in Stockton, California, a city with above-average unemployment, the Mayor has introduced an experiment to give 100 people $500 per month.

It's seen as way of getting money into the hands of the working poor, and reducing poverty, in a world where the future of work seems increasingly insecure.

Despite record job growth, this Guardian piece suggests that drilling down into the US jobs market reveals a number of worrying factors - notably a hollowing out of mid-level jobs and stagnant wages in many sectors. 

It seems that Making America Great Again is harder than it appears. 

The latest data from the US suggests that unemployment has just ticked upwards to 3.9% although job creation was higher than expected. It might confirm the view that over-obsessing about a single month's data might not be a good thing.

This sort of article is economic gold dust: it could be microeconomic, looking at the effect of removing fuel subsidies and efficiency, or macroeconomic, looking at how microeconomic policy has macroeconomic implications, notably for economic growth, the efficient functioning of labour markets and unemployment, or even developmental economics, because of the impact of the policy of living standards.

An excellent beginning of term starter for Year 13 perhaps, getting them to revise issues that you've looked at last year? 

This is a fascinating article that details how COVID has affected the US labour market, with implications for the wider macroeconomy. According to the National Bureau of Economic Research (NEBR) as well as 250,000 people of working age dying from the virus, around 500,000 have also left the labour force. This represents a supply-side shock and will have implications for other macroeconomic objectives too.  

This story is one that's been many years in the making and will have economic implications well into this century but many developed economies are facing the demographic challenge of shrinking populations, none more so than Japan.

Japan now has the lowest number of children under 14 since 1950. This has massive implications for its labour market, its supply-side and its public finances. Labour shortages, the economic implications of LRAS shrinking and the cost of maintaining  an ageing population could all slow growth in an economy which has already struggled to generate much in the way of growth in the last 30 years. 

On International Women's Day, the International Finance Corporation are celebrating the role of women in developing economies, in this case their support for female-owned businesses such as this bathroom hardware business in Sri Lanka.

Increased entrepreneurship, and increased female participation in the labour market are important drivers of inclusive development.

Mixed labour market data from the US, slower than expected jobs growth but overall, unemployment is down to 4.2%, wages are up and the only cloud on the horizon is the Omicron variant which has introduced some uncertainty into proceedings. 

Another fascinating IMF clip looking at how having different levels of workers' rights has impacted on the fortunes of workers during, and after, the coronavirus pandemic. 

There's a particular focus on inequality, and the clip also highlights the differences between the formal and informal sectors of the economy. 

It seems that coronavirus has not affected the President's judgment: he's announced a tightening of requirements for a popular temporary visa. 

However, it's likely that business groups are going to object to this; it reduces the supply of skilled foreign labour and might have adverse supply-side consequences. Again, there's some interesting economics here, with the President suggesting that the current system has been abused "at the expense of American workers".

Of course, these American workers aren't being employed because the foreign workers are more productive, so interventions of this type aren't going to enhacne economic efficiency.

The ILO have flagged up the very real prospect of substantial hysteresis for the so-called "lockdown generation", as young people struggle to find work in the aftermath of the pandemic. 

This World Bank clip looks at the issue of gender equality in Malaysia and looks at how Malaysia might make more of women of working age, to enhance the economy's productivity capacity boosting growth, and creating the right environment to entice women back into the labour force. 

Fascinating interview with Christine Lagarde that highlights the role that women have to play in economic growth. She suggests that increasing female participation could boost growth by 35%, which makes you think about the global PPF, if you will. 

Without higher levels of female participation, we're producing well inside inside the PPF: however, how can we foster increased participation. You might think about the policies that are needed to increase female participation - and remember, people respond to incentives. so think about a range of factors: pay differentials, the cost and availability of childcare, and all sorts of other factors. Even in the developed world, it's empirically true that women commute for less time than men, so this sort of thing would also be an issue. 

Lots of chance for good economists to practice their evaluative skills here!

This International Finance Corporation clip looks at the importance of tackling the lack of childcare in Sri Lanka: it's an important cog in promoting female participation in the labour force, in a country where women only represent 36% of the labour force and anything that increases this could potentially boost GDP by up to 20%.

This gives you some illustration of why development is such a multi-faceted issue - in why getting women working is such an important part of the development puzzle.