"Emerging Markets Unable To Continue The Heavy Lifting"
|
|
- Sabrina McCoy
- 7 years ago
- Views:
Transcription
1 "Emerging Markets Unable To Continue The Heavy Lifting" After his departure from UBS, Andy Lees went radio silent while setting up his own research company, AML Macro. We are now happy to be able to bring to our readers' the occasional report from Lees, who has traditionally been one of our favorite macro analysts, and whose insights are usually months ahead of the mainstream. Emerging Markets Unable To Continue The Heavy Lifting AML Macro Limited In the last few days we have seen reports suggesting Brazilian household debt and service payments are weighing on growth, that Southeast Asia s commercial credit is approaching its pre-1997 financial crisis peak of 75% GDP, and that South Korea s household debt has reached 164% of disposable income compared with 138% in the US at the start of the housing crisis. Chinese debt rose 15% in excess of GDP last year from 191% to 206%. Its corporate cash flow is around 50% of profitability whilst loan growth is way in excess of the banks return on equity meaning the growth is dependent on a continual supply of new capital to the banks. Over the last few years whilst the developed economies have struggled to reduce their debt relative to GDP (the most successful of the major economies has probably been the US which has taken non-financial sector debt down from a high of % GDP to % GDP) the developing economies have taken advantage of cheap funding to inflate their debt levels dramatically, leaving the global debt position worse than in Brazilian households spent 21.3% of their income paying debt in November, close to the record 22.6% in October 2011, and double the 10.6% in the US. Household debt has doubled since 2005 to 44.6% of annual income as households have borrowed to buy cars and household goods etc. Default rates are now at 30 month highs, weighing on economic growth. Falling unemployment and interest rates have unleashed unprecedented demand from Brazil s growing middle class in recent years, encouraged by tax breaks and credit incentives, but rising prices are now leading to a drop in real wages making the accumulated debt unsustainable. Late last year the IMF released a report entitled Non- Financial firms in Latin America: A Source of Vulnerability? It suggested that rising corporate debt levels are increasing the risk of firms becoming exposed to a funding shock. Leverage has risen since the Lehman crisis, with the increase in debt burden evident from the rising debt-to-sales ratio. As West LB says of Brazil, I think these numbers show the exhaustion of a growth model based on consumption. The government will have to find other ways to stimulate the economy. South Korea s household debt ended 2012 at KRW959.4trn. Debt reached 164% of disposable income in 2011 compared with 138% in the US at the start of the housing crisis. The quality of the debt is also deteriorating according to the Samsung Economic Research Institute. The president needs measures to stymie the rising danger of a massive default crisis. Hi Investment says the government will have to bear most of the cost of the overdue loan and mortgage payments, which will worsen the budget deficit and government debt. With debt reaching dangerous levels, South Korea desperately needs to boost exports otherwise growth will slump lifting default rates. Even before we consider the implications of
2 the currency war, where is South Korea going to export to as economy after economy has reached their debt limits. Increasingly, because of insufficient productivity growth, the only possible buyer of their goods is going to be the Fed or some other central bank with printed money. Reuters reports that Southeast Asia s heady growth in recent years has been debt fuelled, and is beginning to resemble the unsustainable mid-1990 s boom. Authorities are shy to raise rates as they want to maintain growth as long as possible, and presumably they know as well as anyone, the risks to the outstanding debt if the economy slows. Growth is strong across the region. Whilst the credit intensity of the economies is not as pronounced as China s, commercial credit as proportion of GDP for the region s 5 largest economies Indonesia, Malaysia, Singapore, Thailand and the Philippines is approaching its pre-1997 crisis peak of 75%. It suggests a few more years of credit-fuelled growth will make a repeat of a 1997 financial crisis a distinct possibility. Presumably an early unwind of QE by the Fed would bring forward this date. China s ability to keep sustaining growth by running imbalances with the rest of the world has not only pushed the developed economies debt to unsustainable levels, but it is reaching its limits with the emerging markets as well. Unfortunately China won t be able to continue running imbalances as the rest of the world simply cannot afford to buy its exports. The cumulative global misallocation of capital means world productivity growth is simply not strong enough to sustain the scale of growth the world has been used to. China s total factor productivity growth has slumped since 2007, requiring nearly 1/3rd more capital relative to GDP than in 2007 to achieve a 35% lower growth rate. The excess capital thrown off has slumped with its current account surplus falling from 10.7% GDP to 2.6% GDP. With the developed economies already choked by debt, China redirected its surplus capital through a change in the terms of trade to those commodity producing countries that could afford it, but the consequence has been soaring emerging market debt levels. For China to maintain GDP growth given its declining productivity growth, it will have no choice but to consume down its current account surplus and stock of FX reserves. If countries haven t got sufficient productivity to take on more debt, they are certainly not going to be able to pay down existing debt unless the social and political system is strong enough to accept the austerity it would infer. Instead China will have to accept freshly printed money from the Fed or some other central bank rather than the assets it thought it had gained access to. The fact that we are moving to currency wars would seem to be a tacit acknowledgement that this is now the case; the game has changed from one of absolute growth to one of relative growth within a productivity constrained world. A recent report highlighted that since 2005 global liquids (oil) production excluding ethanol has risen by just 2.2mbpd, leaving a significant shortfall against the previous trend. Over the period exports had fallen by 1.9m bpd and available net exports, defined as global net exports minus China and India s combined imports, fell from 40m bpd in 2005 to 35m bpd in 2011, helping to explain stagnant global GDP growth, particularly outside the US. A simple extrapolation of the trend would imply that by 2030 China and India would be consuming 100% of global net exports. This is not going to happen, but it highlights that China and India s growth is becoming increasingly expensive to achieve as there is simply not the global scale of productivity needed to drive the kind of numbers we need ( With the oil sector s expenditure now 1.5
3 times cash flow, the oil price may not be sucking capital from the rest of the economy, but clearly the oil companies are. In 2007, developed economies debt reached its limit relative to GDP. Five years later the world is reaching the same constraint. The misallocation of capital has taken on global proportions with emerging market debt soaring relative to GDP. Whilst China has some small capacity to boost growth a little further, Japan clearly does not, and increasingly neither does Asia as a whole. Asia s trade surplus (inclusive of India and Japan) has swung from a surplus of USD38.8bn in October 2007 to a deficit of USD12.7bn. Whilst international savings as measured by world FX reserves are still rising rapidly suggesting a surplus of capital being created, the picture is somewhat different when the Swiss foreign currency reserves are removed. Asia s (inclusive of India and Japan s) trade deficit. Japan s income surplus is being consumed to finance its trade deficit, with the result that its international reinvestment rates are falling. Rather than Toyota NA reinvesting in plant and equipment, its income stream is being consumed by Japanese households who can no longer produce sufficient to sustain their own consumption, let alone pay down their debt. The consequence has been a USD162bn fall in Japan s net foreign investments between 2009 and 2011 and a fall in the US gross investment ratio down to 15.48% GDP. In Japan itself the budget deficit is consuming more than half the gross savings, leaving people to question whether the net investment ratio is actually positive at all. The fact that Abe has targeted 2% inflation, the currency is falling and the BOJ is aggressively buying bonds to finance the budget has simply facilitated what would otherwise have been imposed by the
4 markets as the current deficit increasingly means that Japan can no longer fund its own consumption, and therefore that consumption, or domestic investment, must gradually be priced out one way or another. QE can only be described as genuinely effective if it lifts productivity sufficiently for debt to fall relative to GDP, which has clearly not been the case, at least not yet. Instead it has supported GDP, but at the cost of adding to debt and to the misallocation of capital, ie it has added to the scale of problems we face. It has only been successful in the sense that we have been blinded to the damage it is doing, which is in declining investment ratios in the developed world and collapsing return on investment in China. That s not so bad if we can keep pushing back the day of reckoning. The difficulty arises when the damage becomes immediate, such that the government can no longer fool us into believing that everything is ok; the opportunity cost of strong future growth turns into an immediate loss of economic output, rising unemployment and deteriorating living standards. In an interview on CNBC (written up on zero hedge) - Stanley Druckenmiller highlights that since 1994 US entitlement spending has risen from 50% of federal outlays to 67%, and will rise by a further USD700bn over the next 4 years as demographics kick in. At the moment the market is blind to the damage it is doing, but as Stanley says a simple normalising of interest rates back to where they were before QE, would add an extra USD500bn a year to the government s interest bill, somewhat putting the USD85bn sequester into perspective. He also reminds us of the irrationality of the financial markets by highlighting that the Greek bond market was perfectly fine until February 2010, but within 2 weeks it had collapsed. The fact that we are moving to currency wars seems an acknowledgement that we are reaching the limits again. The fact that Brazil s economy is choking from its debt-fuelled growth, or that people are now starting to talk about the rising danger of a massive default crisis in South Korea, or that Southeast Asia s credit is approaching its pre-1997 peak of 75% GDP, suggests that we are getting close to the point where debt has once again reached its limit relative to GDP and the lost opportunity cost is about to become a real cost once again. With this in mind, whilst EU politicians may offer an extension to those countries missing their budget targets, do the financial markets still have the ability to facilitate that extension? Can sterling avoid its decline turning into a rout? Some of the emerging market debt is relatively small and the necessary rebalancing of the economy should be relatively easy to achieve, but even if it is only a cyclical limit as oppose to the structural limits of the developed economies, it is coinciding at the same time and will add to the global problem. As data on world GDP growth would suggest, it is not just Brazil where the numbers show the exhaustion of a growth model based on consumption.
5 World GDP Growth
Politics, Surpluses, Deficits, and Debt
Defining Surpluses and Debt Politics, Surpluses,, and Debt Chapter 11 A surplus is an excess of revenues over payments. A deficit is a shortfall of revenues relative to payments. 2 Introduction After having
More informationEcon 202 Section 4 Final Exam
Douglas, Fall 2009 December 15, 2009 A: Special Code 00004 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 4 Final Exam 1. Oceania buys $40
More informationThe Credit Card Report May 4 The Credit Card Report May 4 Contents Visa makes no representations or warranties about the accuracy or suitability of the information or advice provided. You use the information
More informationTHE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics
THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics The current financial crisis in the capital markets combined with recession
More informationFISCAL POLICY* Chapter. Key Concepts
Chapter 11 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic
More informationA BRIEF HISTORY OF BRAZIL S GROWTH
A BRIEF HISTORY OF BRAZIL S GROWTH Eliana Cardoso and Vladimir Teles Organization for Economic Co operation and Development (OECD) September 24, 2009 Paris, France. Summary Breaks in Economic Growth Growth
More informationI. Introduction to Aggregate Demand/Aggregate Supply Model
University of California-Davis Economics 1B-Intro to Macro Handout 8 TA: Jason Lee Email: jawlee@ucdavis.edu I. Introduction to Aggregate Demand/Aggregate Supply Model In this chapter we develop a model
More informationChapter 12: Gross Domestic Product and Growth Section 1
Chapter 12: Gross Domestic Product and Growth Section 1 Key Terms national income accounting: a system economists use to collect and organize macroeconomic statistics on production, income, investment,
More informationEmerging Markets Weekly Economic Briefing
214 Emerging Markets Emerging Markets Weekly Economic Briefing Why rapid debt growth in China might be a risk Is China facing an imminent financial crisis? The rapid expansion of credit in China since
More information3. a. If all money is held as currency, then the money supply is equal to the monetary base. The money supply will be $1,000.
Macroeconomics ECON 2204 Prof. Murphy Problem Set 2 Answers Chapter 4 #2, 3, 4, 5, 6, 7, and 9 (on pages 102-103) 2. a. When the Fed buys bonds, the dollars that it pays to the public for the bonds increase
More informationWorking Paper 198 M A C R O E C O N O M I C S F I N A N C I A L M A R K E T S E C O N O M I C P O L I C Y S E C T O R S
ECONOMIC RESE ARCH Working Paper 198 February 10, 2016 M A C R O E C O N O M I C S F I N A N C I A L M A R K E T S E C O N O M I C P O L I C Y S E C T O R S Gregor Eder Emerging markets: Asian companies
More informationa) Aggregate Demand (AD) and Aggregate Supply (AS) analysis
a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis Determinants of AD: Aggregate demand is the total demand in the economy. It measures spending on goods and services by consumers, firms, the
More informationSection 2 Evaluation of current account balance fluctuations
Section 2 Evaluation of current account balance fluctuations Key points 1. The Japanese economy and IS balance trends From a macroeconomic perspective, the current account balance weighs the Japanese economy
More informationCurrency Crisis in Thailand:
Currency Crisis in Thailand: The Leading Indicators By Quan B. Lai Among the developing countries across the globe, those in Southeast Asia have experienced the most economic success within the last several
More informationThe labour market, I: real wages, productivity and unemployment 7.1 INTRODUCTION
7 The labour market, I: real wages, productivity and unemployment 7.1 INTRODUCTION Since the 1970s one of the major issues in macroeconomics has been the extent to which low output and high unemployment
More informationP R E S S R E L E A S E
Hong Kong, May 22, 2013 Survey reveals corporate overdue payment in Asia Pacific region deteriorated in 2012 - Companies are less optimistic about recovery of global economy in 2013 A survey of corporate
More informationThe Return of Saving
Martin Feldstein the u.s. savings rate and the global economy The savings rate of American households has been declining for more than a decade and recently turned negative. This decrease has dramatically
More informationNo boom, (probably) no bust
No boom, (probably) no bust Global Economic & Market Outlook Riga May 10, 2016 Harald Magnus Andreassen +47 23 23 82 60 hma@swedbank.no The global economy: Growth is normal 3 OK, growth in rich countries
More informationProject LINK Meeting New York, 20-22 October 2010. Country Report: Australia
Project LINK Meeting New York, - October 1 Country Report: Australia Prepared by Peter Brain: National Institute of Economic and Industry Research, and Duncan Ironmonger: Department of Economics, University
More informationEcon 202 Section H01 Midterm 2
, Spring 2010 March 16, 2010 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section H01 Midterm 2 Multiple Choice. 2.5 points each. 1. What would
More informationEcon 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5
Econ 202 Final Exam 1. If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment
More informationZIMELE PERSONAL PENSION PLAN
ZIMELE PERSONAL PENSION PLAN ABRIDGED REPORT TO THE SCHEME MEMBERS FOR THE YEAR ENDED 31 ST DECEMBER 2015 TABLE OF CONTENTS Advisors To The Fund... 3 Trustee s Report... 4 Statement Of Trustee s Responsibilities...
More information- 168 - Chapter Seven. Specification of Financial Soundness Indicators for Other Sectors
- 168 - Chapter Seven Specification of Financial Soundness Indicators for Other Sectors Introduction 7.1 Drawing on the definitions and concepts set out in Part I of the Guide, this chapter explains how
More informationStatistics Netherlands. Macroeconomic Imbalances Factsheet
Macroeconomic Imbalances Factsheet Introduction Since the outbreak of the credit crunch crisis in 2008, and the subsequent European debt crisis, it has become clear that there are large macroeconomic imbalances
More information2. UK Government debt and borrowing
2. UK Government debt and borrowing How well do you understand the current UK debt position and the options open to Government to reduce the deficit? This leaflet gives you a general background to the
More informationThe History of Crisis. Background Information: The Financial Crisis and Fair Value
The History of Crisis What is going on? Privatisation of money supply Financialisation: commodification of money and debt (linked to accounting) Deregulated global flow of capital (but not labour) (linked
More informationPROJECTION OF THE FISCAL BALANCE AND PUBLIC DEBT (2012 2027) - SUMMARY
PROJECTION OF THE FISCAL BALANCE AND PUBLIC DEBT (2012 2027) - SUMMARY PUBLIC FINANCE REVIEW February 2013 SUMMARY Key messages The purpose of our analysis is to highlight the risks that fiscal policy
More information1997 Asian Financial Crisis
1997 Asian Financial Crisis. Ed Vallorani 12/14/2009 Table of Contents Background 1 Japan The Lost Decade 4 Country Information China 6 Hong Kong 6 Taiwan 7 Indonesia 8 Japan 8 Korea 9 Philippines 10 Singapore
More informationEC2105, Professor Laury EXAM 2, FORM A (3/13/02)
EC2105, Professor Laury EXAM 2, FORM A (3/13/02) Print Your Name: ID Number: Multiple Choice (32 questions, 2.5 points each; 80 points total). Clearly indicate (by circling) the ONE BEST response to each
More informationBest Essay from a First Year Student
RBA ECONOMICS COMPETITION 2010 Appreciation of Australia s real exchange rate: causes and effects Best Essay from a First Year Student ASHVINI RAVIMOHAN The University of New South Wales Appreciation of
More informationEconomics 101 Multiple Choice Questions for Final Examination Miller
Economics 101 Multiple Choice Questions for Final Examination Miller PLEASE DO NOT WRITE ON THIS EXAMINATION FORM. 1. Which of the following statements is correct? a. Real GDP is the total market value
More informationPeak Debt and Income
Peak Debt and Income! Ronald M. Laszewski ( 25 July 21) Just over two years ago, in a paper on Peak Debt, I analyzed the effect that reaching a limit on the amount of debt that can be supported by personal
More information2013 2014e 2015f. www.economics.gov.nl.ca. Real GDP Growth (%)
The global economy recorded modest growth in 2014. Real GDP rose by 3.4%, however, economic performance varied by country and region (see table). Several regions turned in a lackluster performance. The
More informationAdjusting to a Changing Economic World. Good afternoon, ladies and gentlemen. It s a pleasure to be with you here in Montréal today.
Remarks by David Dodge Governor of the Bank of Canada to the Board of Trade of Metropolitan Montreal Montréal, Quebec 11 February 2004 Adjusting to a Changing Economic World Good afternoon, ladies and
More informationTable 1: Resource Exports Per cent of total nominal exports; selected years
Australia and the Global market for Bulk Commodities Introduction The share of Australia s export earnings derived from bulk commodities coking coal, thermal coal and iron ore has increased over recent
More informationStrategy Document 1/03
Strategy Document / Monetary policy in the period 5 March to 5 June Discussed by the Executive Board at its meeting of 5 February. Approved by the Executive Board at its meeting of 5 March Background Norges
More informationImpact of Global Financial Crisis on South Asia
Impact of Global Financial Crisis on South Asia February 17, 2009 - The global financial crisis hit South Asia at a time when it had barely recovered from severe terms of trade shock resulting from the
More informationWorld Economic Outlook
World Economic Outlook Transitions and Tensions Rupa Duttagupta Deputy Division Chief Research Department, IMF United Nations, Project LINK Meetings, October 21, 213 1 Global growth dynamics are in transition
More informationCHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY
CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY Learning goals of this chapter: What forces bring persistent and rapid expansion of real GDP? What causes inflation? Why do we have business cycles? How
More informationFISCAL POLICY* Chapter. Key Concepts
Chapter 15 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic
More informationPractice Problems on Current Account
Practice Problems on Current Account 1- List de categories of credit items and debit items that appear in a country s current account. What is the current account balance? What is the relationship between
More informationGundlach The Scariest Indicator in the World
Gundlach The Scariest Indicator in the World November 19, 2015 by Robert Huebscher Those Federal Reserve governors who intend to vote for an increase in rates at their December meeting need to take a close
More informationStatement to Parliamentary Committee
Statement to Parliamentary Committee Opening Remarks by Mr Glenn Stevens, Governor, in testimony to the House of Representatives Standing Committee on Economics, Sydney, 14 August 2009. The Bank s Statement
More informationWith lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy.
The Digital Economist Lecture 9 -- Economic Policy With lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy. There is still great debate about
More informationQ&A on tax relief for individuals & families
Q&A on tax relief for individuals & families A. Tax cuts individuals What are the new tax rates? The table below shows the new tax rates being rolled out from 1 October 2008, 1 April 2010 and 1 April 2011,
More informationBOFIT Forecast for China 2013 2015
BOFIT Forecast for China 18.9.2013 BOFIT Forecast for China 2013 2015 Bank of Finland BOFIT Institute for Economies in Transition Bank of Finland BOFIT Institute for Economies in Transition PO Box 160
More informationMacroeconomics Machine-graded Assessment Items Module: Fiscal Policy
Macroeconomics Machine-graded Assessment Items Module: Fiscal Policy Machine-graded assessment question pools are provided for your reference and are organized by learning outcome. It is your responsibility
More informationBe prepared Four in-depth scenarios for the eurozone and for Switzerland
www.pwc.ch/swissfranc Be prepared Four in-depth scenarios for the eurozone and for Introduction The Swiss economy is cooling down and we are currently experiencing unprecedented levels of uncertainty in
More informationJoseph E. Zveglich, Jr.
Joseph E. Zveglich, Jr. Assistant Chief Economist, Asian Development Bank 1 Overseas Development Institute London, 12 April 2012 Key messages Developing Asia to maintain growth momentum despite weak global
More informationIntroductory remarks by Jean-Pierre Danthine
abcdefg News conference Berne, 15 December 2011 Introductory remarks by Jean-Pierre Danthine I would like to address three main issues today. These are the acute market volatility experienced this summer,
More informationChapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.)
Chapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.) Chapter Overview This chapter introduces you to a formal analysis of fiscal policy, and puts it in context with real-world data and
More informationAustralia: The Miracle Economy
DISCUSSION PAPER SERIES IZA DP No. 7505 : The Miracle Economy P.N. (Raja) Junankar July 2013 Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor : The Miracle Economy P.N. (Raja)
More informationPublic Debt in Developing Countries
Public Debt in Developing Countries Has the Market-Based Model Worked? Indermit Gill and Brian Pinto The World Bank Capital Flows and Global External Imbalances Seminar April 4 2006 In Principle: Government
More informationGovernment and public sector debt measures
Introduction Government and public sector debt measures 1. One measure of governments performance in managing the public finances is the level of public sector debt. The definition and responsibilities
More informationStatement by. Janet L. Yellen. Chair. Board of Governors of the Federal Reserve System. before the. Committee on Financial Services
For release at 8:30 a.m. EST February 10, 2016 Statement by Janet L. Yellen Chair Board of Governors of the Federal Reserve System before the Committee on Financial Services U.S. House of Representatives
More informationU.S. Fixed Income: Potential Interest Rate Shock Scenario
U.S. Fixed Income: Potential Interest Rate Shock Scenario Executive Summary Income-oriented investors have become accustomed to an environment of consistently low interest rates. Yields on the benchmark
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Suvey of Macroeconomics, MBA 641 Fall 2006, Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Modern macroeconomics emerged from
More informationPersonal debt ON LABOUR AND INCOME
ON LABOUR AND INCOME Personal debt Although the economy and population are almost times the size of s, the two countries show several similarities. Both have relatively high per-capita income and living
More informationCAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS. Bryan Taylor
CAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS Introduction Bryan Taylor The recent devaluations in Asia have drawn attention to the risk investors face
More informationJanuary 29, 2009. Testimony of. Brad Setser Fellow, Geoeconomics Council on Foreign Relations 1. Before the Senate Budget Committee
January 29, 2009 Testimony of Brad Setser Fellow, Geoeconomics Council on Foreign Relations 1 Before the Senate Budget Committee The Global Outlook 1 The Council on Foreign Relations takes no institutional
More information6. Gross Domestic Product by Country
6. Gross Domestic Product by Country The economies of the six countries studied for this report have flourished, allowing for the very high growth rates in research and development (R&D) investment and
More informationAN AUGMENTED TRADE-WEIGHTED INDEX OF THE AUSTRALIAN DOLLAR 1
AN AUGMENTED TRADE-WEIGHTED INDEX OF THE AUSTRALIAN DOLLAR 1 Introduction Trade-weighted exchange rate indices provide a guide to a country s exchange rate against the currencies of its trading partners,
More informationSweden 2013 Article IV Consultation: Concluding Statement of the Mission Stockholm May 31, 2013
Sweden 2013 Article IV Consultation: Concluding Statement of the Mission Stockholm May 31, 2013 Sweden s economy performed well through the crisis, but growth has moderated recently 1. Growth has slowed
More informationSvein Gjedrem: Prospects for the Norwegian economy
Svein Gjedrem: Prospects for the Norwegian economy Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at Sparebank 1 SR-Bank Stavanger, Stavanger, 26 March 2010. The text below
More informationGeneral Certificate of Education Advanced Subsidiary Examination June 2013
General ertificate of Education dvanced Subsidiary Examination June 2013 Economics EON2 Unit 2 The National Economy Friday 17 May 2013 1.30 pm to 2.45 pm For this paper you must have: an objective test
More informationDOMINION GLOBALIZATION WORKSHOP
DOMINION GLOBALIZATION WORKSHOP Financial Sector Dennis Encarnation Harvard University For more information, please contact me at www.encarnation.com SERVICES Financial Services & Capital Markets Topics:
More informationScotland s Balance Sheet. April 2013
Scotland s Balance Sheet April 2013 Contents Executive Summary... 1 Introduction and Overview... 2 Public Spending... 5 Scottish Tax Revenue... 12 Overall Fiscal Position and Public Sector Debt... 18 Conclusion...
More information3 Red ink rising: how worrying is the UK economy s total debt burden?
3 Red ink rising: how worrying is the UK economy s total debt burden? There has been much concern in recent years about the UK s rising public debt burden and many commentators have been concerned for
More informationIs there a revolution in American saving?
MPRA Munich Personal RePEc Archive Is there a revolution in American saving? John Tatom Networks Financial institute at Indiana State University May 2009 Online at http://mpra.ub.uni-muenchen.de/16139/
More informationMACROECONOMIC AND INDUSTRY ANALYSIS VALUATION PROCESS
MACROECONOMIC AND INDUSTRY ANALYSIS VALUATION PROCESS BUSINESS ANALYSIS INTRODUCTION To determine a proper price for a firm s stock, security analyst must forecast the dividend & earnings that can be expected
More informationSAMPLE PAPER II ECONOMICS Class - XII BLUE PRINT
SAMPLE PAPER II ECONOMICS Class - XII Maximum Marks 100 Time : 3 hrs. BLUE PRINT Sl. No. Form of Very Short Short Answer Long Answer Total Questions (1 Mark) (3, 4 Marks) (6 Marks) Content Unit 1 Unit
More informationA PLAN FOR A DEBT-FREE ALBERTA
A PLAN FOR A DEBT-FREE ALBERTA Table of Contents Step 1 - Eliminating the Annual Deficit... 139 Step 2 - Eliminating the Net Debt... 139 Step 3 - Creating a Debt-Free Alberta... 142 Repaying Accumulated
More informationEcon 202 Section 2 Final Exam
Douglas, Fall 2009 December 17, 2009 A: Special Code 0000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 2 Final Exam 1. The present value
More informationThe global economy in 2007
Introduction The global economy in 27 Global output grew 3.8 percent in 27, receding slightly from 4 percent in 26. The downturn was greatest in high-income economies, where growth fell from 3 percent
More informationGundlach s High-Conviction Investment Idea By Robert Huebscher December 26, 2012
Gundlach s High-Conviction Investment Idea By Robert Huebscher December 26, 2012 Count Jeffrey Gundlach among those who expect Japan s currency to collapse because it can t service its debt. Japan s challenges
More informationGrowth and volatility will define global economy in 2016, says PineBridge Investments
Growth and volatility will define global economy in 2016, says PineBridge Investments PineBridge Investments forecasts 2.7% GDP growth in the United States Eurozone growth projected to slightly improve
More informationThe U.S. and Midwest Economy in 2016: Implications for Supply Chain Firms
The U.S. and Midwest Economy in 2016: Implications for Supply Chain Firms Rick Mattoon Senior Economist and Economic Advisor Federal Reserve Bank of Chicago Right Place Supply Chain Management Conference
More informationEast Asia - A Case Study in the Global Economy
Opening Speech by Toshihiko Fukui, Governor of the Bank of Japan At the 14th International Conference hosted by the Institute for Monetary and Economic Studies, Bank of Japan, in Tokyo on May 30, 2007
More informationUnderstanding the Student Loan Explosion. Implications for students and their families. Sponsored by:
Understanding the Student Loan Explosion Implications for students and their families Sponsored by: Understanding the Student Loan Explosion: Implications for students and their families True wisdom is
More informationEconomics 212 Principles of Macroeconomics Study Guide. David L. Kelly
Economics 212 Principles of Macroeconomics Study Guide David L. Kelly Department of Economics University of Miami Box 248126 Coral Gables, FL 33134 dkelly@miami.edu First Version: Spring, 2006 Current
More informationObjectives for Chapter 18: Fiscal Policy (This is a technical chapter and may require two class periods.)
1 Objectives for Chapter 18: Fiscal Policy (This is a technical chapter and may require two class periods.) At the end of Chapter 18, you will be able to answer the following: 1. How is the government
More informationExam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing assumption.
Exam 1 Review 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high
More informationThe Solution is the Problem
11 LP May/June 2009 Special Issue The Solution is the Problem MARKETS AT A GLANCE Eric Sprott David Franklin The US government raised $705 billion worth of new debt in 2008. The debt was raised to pay
More informationTHE RETURN OF CAPITAL EXPENDITURE OR CAPEX CYCLE IN MALAYSIA
PUBLIC BANK BERHAD ECONOMICS DIVISION MENARA PUBLIC BANK 146 JALAN AMPANG 50450 KUALA LUMPUR TEL : 03 2176 6000/666 FAX : 03 2163 9929 Public Bank Economic Review is published bi monthly by Economics Division,
More informationMEASURING A NATION S INCOME
10 MEASURING A NATION S INCOME WHAT S NEW IN THE FIFTH EDITION: There is more clarification on the GDP deflator. The Case Study on Who Wins at the Olympics? is now an FYI box. LEARNING OBJECTIVES: By the
More informationPERSONAL RETIREMENT SAVINGS ACCOUNT INVESTMENT REPORT
PENSIONS INVESTMENTS LIFE INSURANCE PERSONAL RETIREMENT SAVINGS ACCOUNT INVESTMENT REPORT FOR PERSONAL RETIREMENT SAVINGS ACCOUNT () PRODUCTS WITH AN ANNUAL FUND MANAGEMENT CHARGE OF 1% - JULY 201 Thank
More information1. Firms react to unplanned inventory investment by increasing output.
Macro Exam 2 Self Test -- T/F questions Dr. McGahagan Fill in your answer (T/F) in the blank in front of the question. If false, provide a brief explanation of why it is false, and state what is true.
More information18th Year of Publication. A monthly publication from South Indian Bank. www.sib.co.in
To kindle interest in economic affairs... To empower the student community... Open YAccess www.sib.co.in ho2099@sib.co.in A monthly publication from South Indian Bank 18th Year of Publication SIB STUDENTS
More informationIntroduction to Macroeconomics 1012 Final Exam Spring 2013 Instructor: Elsie Sawatzky
Introduction to Macroeconomics 1012 Final Exam Spring 2013 Instructor: Elsie Sawatzky Name Time: 2 hours Marks: 80 Multiple choice questions 1 mark each and a choice of 2 out of 3 short answer question
More informationCHAPTER 5. CIRCULAR FLOW MODELS
HAPTER 5. RULAR FLOW MODEL The behavior of a macroeconomic system is determined by the interactions of a great many actors and institutions. The first step in studying an economy is to simplify the picture
More informationFactoring Exchange Rate Policy into your Investment Strategy: Risks Facing Andean Countries
Factoring Exchange Rate Policy into your Investment Strategy: Risks Facing Andean Countries September 2011 Dr. Eliot Kalter President, E M Strategies Senior Fellow, The Fletcher School Ekalter@EMStrategies.com
More informationDO NOT WRITE ANY ANSWERS IN THIS SOURCE BOOKLET. YOU MUST ANSWER THE QUESTIONS IN THE PROVIDED ANSWER BOOKLET.
SPECIMEN MATERIAL AS ECONOMICS 713/2 Paper 2 The national economy in a global context Source booklet DO NOT WRITE ANY ANSWERS IN THIS SOURCE BOOKLET. YOU MUST ANSWER THE QUESTIONS IN THE PROVIDED ANSWER
More informationThe Mexican Economy: Facts and Opportunities
Manuel Sánchez Santander Global Fixed Income Summit London, England, September 20, 2012 Contents 1 Structural features 2 Recent developments and outlook 3 Inflation and monetary policy 4 Economic challenges
More informationLecture 2. Output, interest rates and exchange rates: the Mundell Fleming model.
Lecture 2. Output, interest rates and exchange rates: the Mundell Fleming model. Carlos Llano (P) & Nuria Gallego (TA) References: these slides have been developed based on the ones provided by Beatriz
More informationRecent Developments in Local Currency Bond Markets (LCBMs) 1. October 2013
Recent Developments in Local Currency Bond Markets (LCBMs) 1 October 2013 Given the importance of local currency bond markets (LCBMs), including in the context of the work now underway on financing for
More informationChina s Economic Reforms and Growth Prospects. Nicholas Lardy. Anthony M Solomon Senior Fellow. Peterson Institute for International Economics
China s Economic Reforms and Growth Prospects Nicholas Lardy Anthony M Solomon Senior Fellow Peterson Institute for International Economics Paper Prepared for the CF-40 PIIE 2014 Conference Beijing May
More informationRecent trends of dynamically growing and developing life insurance markets in Asia
Recent trends of dynamically growing and developing life insurance markets in Asia Tomikazu HIRAGA, Ph.D. and LL.M. General Manager for Asia, NLI Research Institute Asia is a growth market where foreign
More informationTax planning may have contributed to high indebtedness among Swedish companies
Tax planning may have contributed to high indebtedness among Swedish companies Gunnar Blomberg, Jyry Hokkanen and Sofia Kåhre The European Commission has identified in a survey of potential imbalances
More informationOil and the Real Economy: Interview with Andrew Oswald
Oil and the Real Economy: Interview with Andrew Oswald March 17, 2000 Question You believe that the economy is about to enter a period of slow-down and possibly sharp recession? Why? Prof Oswald Because
More informationIreland and the EU 1973-2003 Economic and Social Change
Ireland and the EU 1973-2003 Economic and Social Change Table 1 Population, 1971-2002 viii Table 2 Population of the provinces ix Table 3 Births, deaths and life expectancy ix Table 4 Numbers in education
More information