Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

When China and America spar over technology, it is about far more

Posted by hkarner - 5. Mai 2018

Date: 03-05-2018
Source: The Economist: Banyan

Nearly all high tech has military implications, and stirs national pride

WHEN President Donald Trump threatened punitive tariffs in the spring on $150bn of Chinese goods, some Chinese observers thought this was a trade war that could be finished before it really began. To weaken America’s resolve, robust retaliation was threatened against American goods, from soyabeans to bourbon. To overcome it entirely, barriers to certain Chinese markets, such as for cars and credit cards, could be dismantled. China could even offer to cut America’s $375bn bilateral trade deficit, over which Mr Trump obsesses, without too much loss of face.

Oh halcyon days! As The Economist went to press, Mr Trump’s senior economic officials, including Steven Mnuchin, the treasury secretary, Wilbur Ross, the commerce secretary, and Robert Lighthizer, the United States Trade Representative, were about to sit down in Beijing with their Chinese counterparts. The aim was to avert a trade war that now seems increasingly likely. The notion that Mr Trump will declare victory after a few polite Chinese concessions appears less plausible. His beef with China, shared by many American policymakers and business folk, goes deeper. Den Rest des Beitrags lesen »

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Financial inclusion is making great strides

Posted by hkarner - 5. Mai 2018

Date: 03-05-2018
Source: The Economist

Nearly a quarter of the world’s population remains unbanked. But mobile phones are helping to change that, writes Simon Long

AS THE EBOLA virus was devastating parts of west Africa in 2014, Sierra Leone’s difficulties were compounded by its emergency-response workers going on strike. They were risking their lives, but were often paid erratically and not in full. Sometimes they travelled long distances to collect the money, in cash, to find that it had been disbursed to an impostor, or that the official paying it out would take a cut. So the government switched to making the payments digitally, to the workers’ mobile-phone accounts. That way they were paid in a week in full, rather than after a month with deductions. Thanks to lower costs and reduced fraud, the new system was millions of dollars cheaper. The strikes ended; lives were saved.

According to a report by the Better than Cash Alliance, a partnership based at the UN of governments, companies and organisations promoting digital payment, Sierra Leone was well placed to make this change in two respects: about 95% of the country was covered by a mobile-phone signal; and 90% of the emergency workers had mobile phones. Even so, the obstacles were formidable. Only 15% of the workers had mobile-money accounts. Opening one could be hampered by a lack of documentation, made worse by the country’s severe shortage of surnames (most people share just ten of them). Biometric identification, such as fingerprints, raised fears of infection from the Ebola virus (a problem that was solved by facial-recognition technology). But they got there in the end. Den Rest des Beitrags lesen »

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More than 1,000 economists warn Trump his trade views echo 1930s errors

Posted by hkarner - 5. Mai 2018

Date: 04-05-2018
Source: The Guardian

President’s ‘economic protectionism’ harkens back to errors that fueled Great Depression, say experts including 14 Nobel winners

Trump’s rhetoric harkens back to mistakes that drove the world into the Great Depression, the economists say.

Over a thousand economists have written to Donald Trump warning his “economic protectionism” and tough rhetoric on trade threatens to repeat the mistakes the US made in the 1930s, mistakes that plunged the world into the Great Depression.

The 1,140 economists, including 14 Nobel prize winners, sent the letter on Thursday amid an escalating row over trade between the US and the European Union. Trump has imposed tariffs on steel and aluminium imports but has granted temporary reprieves to the EU, Australia and other countries.

“In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act,” the authors write, citing a trade act that many economists argue was one of the triggers for the Great Depression. Den Rest des Beitrags lesen »

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Financial inclusion in the rich world

Posted by hkarner - 4. Mai 2018

Date: 03-05-2018
Source: The Economist

Tech and data offer hope of more financial inclusion in developed countries, too

HACKNEY IN NORTH-EAST London prides itself on being one of the capital’s most ethnically diverse boroughs. The council identifies only 36% of the population as “white British”. Dalston Junction, a now-trendy part of the borough, buzzes with a down-at-heel sort of cosmopolitanism: a Caribbean bakery; the Halal Dixy Chicken shop; the Afro World wig-and-extensions parlour; dozens of outlets for Lycamobile (“call the world for less”) and for money-transfer firms.

It is also diverse in wealth. Nearby gentrification is sprouting in a few trendy coffee bars and a sleek creperie. But Hackney is also, on a measure of “multiple deprivation”, the 11th most deprived of more than 400 local-authority areas in Britain. Dalston has more than the usual number of charity-run second-hand shops and at least four pawnbrokers.

Competing with this last group is a branch of Oakam, a British lender set up in 2006. It advertises itself as an “alternative to doorstep lenders”, the traditional financiers for those beneath the bar set by mainstream banks. Originally aimed at recent immigrants, it extended its reach to the rest of those “lacking access to basic financial services”—a group it puts at 12m across Britain. A report published in March 2017 by a House of Lords committee estimated that 1.7m adult British residents have no bank account; 40% of the working-age population have less than £100 ($140) in cash savings; and 31% show signs of financial distress. Den Rest des Beitrags lesen »

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Where will the next crisis occur?

Posted by hkarner - 3. Mai 2018

Date: 02-05-2018
Source: The Economist: Buttonwood

Corporate debt could be the culprit

INTEREST rates are heading higher and that is likely to put financial markets under strain. Investors and regulators would both dearly love to know where the next crisis will come from. What is the most likely culprit?

Financial crises tend to involve one or more of these three ingredients: excessive borrowing, concentrated bets, and a mismatch between assets and liabilities. The crisis of 2008 was so serious because it involved all three—big bets on structured products linked to the housing market, and bank-balance sheets that were both overstretched and dependent on short-term funding. The Asian crisis of the late 1990s was the result of companies borrowing too much in dollars when their revenues were in local currency. The dotcom bubble had less serious consequences than either of these because the concentrated bets were in equities; debt did not play a significant part. Den Rest des Beitrags lesen »

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The fight over a customs union is a proxy for a bigger Brexit battle

Posted by hkarner - 28. April 2018

Date: 26-04-2018
Source: The Economist

Brexiteers see a customs union as the first step towards a closer alignment with the Europe

IT WAS hardly discussed during the referendum campaign. Yet the question of whether to seek a customs union with the European Union after Brexit has become an unexpected political flashpoint. Theresa May’s government is against the idea, but fears that Parliament is not on its side. Earlier this month the House of Lords voted that Britain should stay in a customs union. With Labour and a clutch of Tory rebels in favour, the Commons may soon follow suit.

The customs union is really a proxy for a bigger question: how closely aligned should Britain stay with the EU after Brexit? Mrs May is in a quandary. She wants to reassure pro-Brexit Tories that she is sticking to her red lines of leaving the single market and customs union, creating scope for regulatory divergence and an independent trade policy. But she also wants a workable deal that satisfies businessfolk and prevents a hard border in Ireland. Den Rest des Beitrags lesen »

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Technology can tackle investors’ flaws

Posted by hkarner - 28. April 2018

Date: 26-04-2018
Source: The Economist: Buttonwood

Forget about beating the market

TECHNOLOGY has transformed finance. Consumers bank and buy their insurance policies online. They use technology to manage their pensions and other investment portfolios. But can tech improve returns? Only if it is used wisely.

If it is cheaper to trade, then costs will take a smaller chunk out of long-term returns. Technology also allows fund managers to replicate stockmarket indices, giving investors access to broadly diversified equity portfolios for a fraction of a percentage point in annual fees.

But the ease and cheapness of trading, along with the vast range of options available, create a terrible temptation. Worldwide there are nearly 7,400 exchange-traded funds (ETFs) and related products. These funds are not used only by “buy and hold” investors. Nearly half of the top 20 traded securities on American markets, by value, are ETFs. Den Rest des Beitrags lesen »

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Many results in microeconomics are shaky

Posted by hkarner - 28. April 2018

Date: 26-04-2018
Source: The Economist: Free exchange

The third in our series on the shortcomings of the economics profession

MICROECONOMISTS are wrong about specific things, Yoram Bauman, an economist and comedian, likes to say, whereas macroeconomists are wrong in general. Macroeconomists have borne the brunt of public criticism over the past decade, a period marked by financial crisis, soaring unemployment and bitter arguments between the profession’s brightest stars. Yet the vast majority of practising dismal scientists are microeconomists, studying the behaviour of people and firms in individual markets. Their work is influential and touches on all aspects of social policy. But it is no less fraught than the study of the world economy, and should be treated with corresponding caution.

For decades non-economists have attacked the assumptions underlying economic theory: that people are perfectly informed maximisers of their own self-interest, for instance. Although economists are aware that markets fail and humans are not always rational, many of their investigations still rely on neoclassical assumptions as “good enough” descriptions of the world. But this “101ism”, as Noah Smith, an economist and journalist, calls it, is less prevalent than it was in the 1950s and 1960s, when researchers like Gary Becker reckoned everything from crime to marriage could be described in terms of rational self-interest. Since the 1970s, as Roger Backhouse and Béatrice Cherrier describe in “The Age of the Applied Economist”*, a new collection of essays, the field has taken a decidedly empirical turn. Den Rest des Beitrags lesen »

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European political parties shift right

Posted by hkarner - 28. April 2018

Date: 26-04-2018
Source: The Economist

According to a new survey

EVERY four years researchers at the University of North Carolina and other institutions ask experts to place Europe’s political parties on various spectrums. The latest version of the Chapel Hill Expert Survey reviewed 132 parties in 14 EU countries, including the five biggest.

It finds that since 2014, socialist, Christian democrat and conservative parties have as a group moved towards more restrictive immigration policies and that the liberal, Christian democrat and especially conservative ones have increased their tendency to deploy anti-establishment or anti-elite rhetoric.

There is still a gap between Europe’s mainstream and the fringes—but it seems to be narrowing.

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Apple against pie: How liberal democracy fell apart

Posted by hkarner - 27. April 2018

Date: 26-04-2018
Source: The Economist

Yascha Mounk’s diagnosis is more convincing than his cure

The People vs Democracy: Why Our Freedom is in Danger and How to Save It. By Yascha Mounk. Harvard University Press; 393 pages; $29.95 and £17.99.

DEMOCRACY is going through its worst crisis since the 1930s. The number of countries that can plausibly be described as democracies is shrinking. Strongmen are in power in several countries that once looked as if they were democratising, notably Russia, Turkey and Egypt. The United States—the engine room of democratisation for most of the post-war period—has a president who taunted his opponent with chants of “lock her up” and refused to say if he would accept the result of the election if it went against him.

But what exactly is the nature of this crisis? And what is driving it? Yascha Mounk’s “The People vs Democracy” stands out in a crowded field for the quality of its answers to these questions. Mr Mounk provides an admirable mixture of academic expertise and political sense. He teaches at Harvard University, where he has busied himself collecting opinion-poll data, but he grew up in pre-1989 West Germany, where the distinction between real and pretend democracy was more than just academic. He also takes the trouble to unpick terms that too many commentators on this subject take for granted. Den Rest des Beitrags lesen »

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