International Economics: IB Economics

A must-watch: a very simple introduction to what the IMF actually does. It will be added to my presentation on international financial organisations asap.

It highlights the role of the IMF as a short-term lender to help ensure financial stability.

Another excellent World Bank clip that looks at the importance of water to development, highlighting the challenges facing the rapidly growing Indian economy. World Water Day is marked by focus on the five areas where World Bank intervention is helping manage this scarce resource: access to drinking water, managing groundwater extraction, improving irrigation, treating wastewater and improving information about reservoir management to mitigate natural disasters.

US-China trade talks look set to continue next week, with a number of issues yet to be resolved, and lots of negotiating still to be done.

Nouriel Roubini looks at why the Federal Reserve has become increasingly dovish. He suggests that economic conditions have changed, not least with regards to inflation and the effects of President Trump's trade war.

However, I'm not sure that the 'need to show independence' is a valid argument given that one of the most outspoken critics of the Fed, calling for looser monetary policy has been the President himself.

Larry Elliott looks at the current policy 'du jour' - modern monetary theory (MMT). In essence, it means that government's should print money to escape a recession; in essence, it's a monetary reworking of Keynesianism - provided there are spare resources, spending on public works could get the economy back to full employment. The worry though, is that any expansion of the monetary supply is going to result in inflation. 

It is - as they say - a lovely example of what goes around comes around. Keynesianism in monetarist clothing?  

The opportunity cost of Brexit goes well beyond our borders - here the port of Dublin is reported as having to build new infrastructure to cope with the need for more customs checks among other things. 

This World Bank clip looks at Kenya's vulnerability to climate change and the measures that it's taken to increase food and energy security and foster resilience to climate change shocks.

Depending upon your point of view, great news for Greece, in that the latest IMF data reveals that its one of the best performing Eurozone economies. Or, bad news for the rest of the Eurozone?

Either way, Greece has suffered greatly since 2009 but there's still a long way to go: unemployment is still nearly 20%, and the reforms adopted by the Greek government are yet to be completed.

Another economy slides into recession - you might use this as a prompt to remember the definition of a technical recession, and think about what has caused the Turkish recession, as well as reflecting on the wider macroeconomic effects.

Another Brexit story - but with a remarkable angle this time. This BBC piece looks at the potential impact of Brexit on the Kenyan flower trade, not a link that's immediately obvious.

However, the prospect of a no-deal Brexit could see Kenya go from getting unrestricted access to the UK market via an EU trade deal, to facing tariffs of 8.5-12% reducing their ability to export to the UK.

Good news for development in Zambia - one of my favourite sub-Saharan nations. The World Bank and Zambia have renewed the Country Partnership Framework (CPF) focusing on specific developmental objectives.

It's interesting to note the emphasis placed on institution-building, and the notion that the transition to better functioning markets needs to be supported by attempts to lessen the burden on the most vulnerable, notably the rural poor. It also indicates why the Washington Consensus of the later 20th century was so unpopular... 

Another aspect of President Trump's trade policy: the US is targeting India and Turkey, focusing on the notion of 'unfair trade practices'. In India's case, it's for not allowing the US 'reasonable' access to its markets. In Turkey's case, the US argues it no longer needs preferential trade status.

Is this good policymaking, or simply the playground bully wanting to get their own way?  

A big boost for the Cypriot economy, with the news that ExxonMobil has discovered large natural gas deposits. You should be able to think of the possible benefits of this for the supply-side and, by definition, LRAS.

However, the experience of some economies is that natural resources are a curse, not a blessing. In LICs we talk of the 'resource curse', in HICs we talk of 'Dutch disease' - you might think about what this means and why it happens. And then you might reflect upon whether the discovery of natural gas is going to be as beneficial as it might first appear.

Hint: you might think about what's likely to happen to the value of the 'Cypriot' currency in response to this news. But what is the currency of Cyprus? And what are its major industries?

It seems that no-one's ready for no-deal.

If ever something were made more likelier to happen...

A very photogenic World Bank piece looking at the impact of climate change of Mt.Kenya's glaciers and Kenya more generally, as lots of World Bank/NGO bigwigs climb the mountain as part of a 25Zero project to investigate the impact of climate change on development. It is sobering stuff.

A snapshot of the prevailing mood - with a majority of respondents to an OECD survey advocating higher taxes on the rich to support the poor. The OECD sees this as a disturbing outcome - but in some senses it's predictable.

A Gini co-efficient of 0.40 has long been seen as the point at which income inequality becomes an issue and a number of leading economies are getting closer to that point. What's worse though, is the fact that the public perception of rising inequality is largely founded on the super-rich and they are, indisputably getting richer a lot quicker than the rest of us.  

The impact of Brexit is going to affect a lot of people, not least those businesses located close to the Irish border. This Guardian article examines how they're going to be affected.

Tax avoidance on a grand scale? It seems that there's a lot of UK property owned by a number of firms registered in tax havens. Apart from the tax implications of this, I wonder how many of them are vacant, and how many of them are, ultimately, owned by politicians., although not in that particular order.

Another World Bank clip that looks at the importance of mobility to development - sustainable mobility increases factor mobility, enhances the provision of healthcare and education and, by definition, developmental outcomes.   

Fundamentally, it is all about enhancing the efficient operation of markets - both product and factor markets.

If you want to see how damaging hyperinflation can be - read on. This article looks at the complete collapse of the Venezuelan economy and how the ordinary Venezuelan is struggling to make ends meet.

Competitor wants large rival broken up.

Apparently that's news - however, Australian media giant Newscorp wants to see Google's search engine and advertising platform split up. But it would, wouldn't it?

The first part of this Observer Business Leader about the need for the US and China to agree a trade deal is a good summary of where we currently stand. In the post-Cold War era, the results of this trade war appear to have been nothing other than mutually-assured destruction.

A slowing of Eurozone growth has forced the hand of the European Central Bank: as a result the Bank has issued Forward Guidance to the effect that it has effectively said that interest rates aren't going to go up for the rest of the year; similarly, it has engaged in a new round of lending to commercial banks designed to stimulate spending.

The concern is that 0.2% growth in the last quarter of 2018 is a foretaste of things to come, and what with the Italian recession, the bank feels that it needs to take action sooner rather than later.

Yesterday's news - who would have thought it? The US trade deficit continues to widen, despite the protectionism of President Trump who, let's face it, probably thinks that this outcome is impossible.

However, you might think about why protectionism isn't a good solution to a trade deficit - does it make domestic firms more efficient, for example? And then you might think about other measures that might have proved better response to this situation.

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!