Monetary-Fiscal Nexus 2

Relevant topic for the pandemic-hit economies. 

https://www.jstor.org/stable/25825247?seq=1

The Fiscal-Monetary Policy Nexus

Watch the Video by Prof. Ricardo Reis.  r < g < mu

Economic Stabilization Policies Post-Crisis

Here is an article on fiscal stabilization policies. The keywords? Procyclical. Government efficiency.  Threshold.

https://www.sciencedirect.com/science/article/abs/pii/S0261560614002071

Tracking Global Economic Recovery

WorldBank Blog - A Baseline to track the recovery. There is data visualising  on PPP-based GDP per-capita for selected countries.  

https://blogs.worldbank.org/opendata/size-world-economy-2019-baseline-which-measure-impact-covid-19-and-track-economic-recovery

Top Reads Charts of the Week from the IMF Blog

Soon we will say goodbye to 2020. May next year bring joy to the world. Happy charting.

https://blogs.imf.org/2020/12/21/top-10-charts-of-the-week-for-2020/

China to be World's Biggest Economy by 2028

 Excerpt:

"Europe accounted for 19 per cent of output in the top 10 global economies in 2020 but that will fall to 12 per cent by 2035, or lower if there is an acrimonious split between the EU and Britain, the CEBR said.

It also said the pandemic's impact on the global economy was likely to show up in higher inflation, not slower growth.

"We see an economic cycle with rising interest rates in the mid-2020s," it said, posing a challenge for governments which have borrowed massively to fund their response to the COVID-19 crisis.

"But the underlying trends that have been accelerated by this point to a greener and more tech-based world as we move into the 2030s."

https://www.ndtv.com/world-news/china-to-overtake-us-as-worlds-biggest-economy-by-2028-report-2343781

A Tale of Three Depressions

Great Depression, Great Recession and Covid-19 Pandemic.

Excerpt:

"Today we face great uncertainty about the sustainability of the revivals in industrial production observed in Figures 2 and 3. Will these strong revivals be maintained? There is a risk of second and third waves of the pandemic, and so there is still a risk of new economic downturns. Much will depend on the willingness of the monetary and fiscal authorities to continue to support the economy by monetary and fiscal expansions if these second and third waves occur. All this is still very uncertain. It is not to be excluded that the recovery will turn out to be W-shaped (or some other letter) rather than V-shaped."

https://voxeu.org/article/tale-three-depressions

Bitcoin's Energy Consumption

Another angle on digital currency.

https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption

International Reserves for Countries Worldwide

The reserves position internationally. USD is still the King, so far. Which country will be the currency's King-Maker 5 years from now?

https://www.gfmag.com/global-data/economic-data/international-reserves-by-country

By Spitzl - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=17950606

IMF Explores Digital Currency as International Reserves

KEY TAKEAWAYS

• A new IMF paper states that the international reserve ecosystem will become less stable after the introduction of digital currencies.
• The paper's authors state that the U.S. dollar will retain its dominant status in the international reserve ecosystem even after the introduction of digital currencies

https://www.investopedia.com/imf-explores-digital-currency-use-in-international-reserve-ecosystem-5093192

Causes and Consequences of Economic Restructuring

The article was published in 2008. The economic cost of restructuring. We need to unlearn and relearn post pandemic-hit growth.

Alvin Toffler is credited with saying: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

https://www.federalreserve.gov/pubs/feds/2008/200841/200841pap.pdf

Counting 2021

May 2021 be one good wonderful year.

https://www.lazardassetmanagement.com/uk/en_uk/research-insights/outlooks/global-outlook-2021

8 Landmarks in Gig History

Excerpt:

Earlier in history: Researchers have compared gig work to piecework, a work payment structure in which jobs are broken down into smaller tasks or done by multiple people. This method of work has been around for hundreds of years.

1915: Jazz musicians used the term “gig” for “job” confirmed in 1915, but potentially as early as 1905

1940s: World War II prompts opening of the first large companies promoting gig-type work, offering temporary labor to businesses needing to fill workforce gaps

1995: Craigslist is introduced, providing local San Francisco-based online classifieds devoted to jobs, items wanted and for sale, gigs, services, resumes, housing, and more. The service has now expanded to cover 70 countries.

1999: The freelancing website Elance, now known as Upwork, launched – allowing freelancers to use the internet to find new projects and clients.

2008: Airbnb launches, allowing people to rent their homes to guests – giving them the opportunity to play hotelier for one night or 365.

2009: The ridesharing app, Uber, is released and lets people drive their own vehicles to taxi customers from point A to point B.

2012: Lyft joins the rideshare market and expands quickly over the next few years to rival Uber

2014: In the U.K., employees are granted the right to request flexible work after continuous full-time employment of 26 weeks - these shifts continue to vary across the globe

Now: 36 percent of U.S. workers take part in the gig economy, Gallup defines this as having “an alternative work arrangement as their primary job”. That adds up to roughly 57 million Americans, up from 53 million in 2015. The number of people in the gig economy is only expected to increase to 43 percent by 2020.

https://www.peopleready.com/blogs/associate-blog/8-major-moments-in-gig-economy-history

ASEAN Response to Economic Recovery

Excerpt:

"COVID–19 has been disrupting economic activities around the world, and Southeast Asia is no exception. The effects of this pandemic are unequal. The region’s 2020 GDP is estimated to shrink by 4.2% overall, but the services sector — tourism especially — has been hit harder than the manufacturing sector. Small- and medium-sized enterprises (SMEs) have been suffering more than large firms. As a result, the Association of Southeast Asian Nations (ASEAN) introduced several initiatives meant to manage the crisis and ensure post-COVID recovery. While this is laudable, to more effectively facilitate economic recovery, ASEAN should operationalize an ASEAN small- and medium-sized enterprise recovery facility, opening special financing tools to such firms. It should also set up rules that ensure international flows of people, as well as address trade protectionism, which could hinder ASEAN’s recovery effort."

https://www.brookings.edu/blog/order-from-chaos/2020/12/17/aseans-perspective-on-economic-recovery/

Rumi

CERI - Covid Economic Recovery Index

Excerpt:

"COVID Economic Recovery Index (CERI) that measures the degree to which countries have the right policies, institutions, and factors in place to rapidly recover to pre-COVID-19 levels of socioeconomic performance.1 The index covers three elements:

Health Resilience measures the extent to which a country is exposed to the risk of major health effects due to COVID-19, including through health system capacity, pre-existing health risk factors, and pandemic preparedness.

Absorptive Capacity describes the degree to which a country’s economy will be affected by the COVID-19 crisis, e.g. due to reliance on vulnerable sectors, international connectivity, social resilience, or labour-market performance.

Economic Resilience reflects a country’s capacity to recover and rebuild to pre-COVID-19 levels (Halegatte 2014). It is influenced by factors such as labour market adaptability, governance, and social capital, but also financial system robustness."

https://voxeu.org/article/recovery-capacity-readiness-new-economic-landscape

The ABCs of post-Covid Economic Recovery

Let's learn all the economic recovery alphabets.

https://www.brookings.edu/blog/up-front/2020/05/04/the-abcs-of-the-post-covid-economic-recovery/

Trade Impact of Covid-19

Excerpt:

"Anecdotal evidence for such contagion already appearing is abundant. A recent article in Barron’s, for example, quotes the CEO of company that provides supply-chain software: “In the last two decades, China became the factory of the world,” says Girish Rishi. “Consumer packaged goods, automotive, apparel, high-tech. I can’t tell you which sector is not getting impacted.”"

https://www.incae.edu/sites/default/files/covid-19.pdf#page=52

Pandemic Recession

NBER Working Paper, May 2020 on the recovery period.

https://www.nber.org/system/files/working_papers/w27105/w27105.pdf

Pandemic and Social Unrest

A new article in the IMF Blog. Still on Inequality. Policy responses should address this issue. 

https://blogs.imf.org/2020/12/11/when-inequality-is-high-pandemics-can-fuel-social-unrest/

Prof Mankiw on Low Interest Rate

Excerpt:

"Moreover, some of the causes of low interest rates might give reason for concern. For example, if they reflect low growth expectations, then counting on strong growth to reduce the debt-to-G.D.P. ratio, as the United States did after World War II, might not be an option.

In the end, low interest rates are a double-edged sword. We don’t yet know which edge will be sharper."

https://www.nytimes.com/2020/12/04/business/low-interest-rates-puzzle.html

On historical returns of portfolio allocations

https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

Future Restaurant. 

Biden's Tax Policy

Excerpt:

"If Biden tries to pass expensive bills in 2021 — like on infrastructure or climate change — he'll have an immediate need "to raise revenue to pay for the associated spending," Rohit Kumar, co-leader of the Washington national tax services practice at PwC U.S., tells Axios."

https://www.axios.com/wealthy-biden-taxes-shield-assets-d6cca211-a73e-49e9-bec0-dad6c3a32989.html

The One Letter of the Economic Recovery

More on the Shape of Economic Recovery. 

https://econlife.com/2020/08/the-k-alphabet-economic-recovery/

A K-Shaped Recovery

Here is the telltale sign of the K-Shaped economic recovery.

https://www.us.jll.com/en/trends-and-insights/research/economic-insight-k-shaped-recovery

A V-Shaped vs K-Shaped economy in the US

Brexit and the Three Thorny Issues

Governance, Fishery and Competition. These are the three issues haunting Brexit before the 31 December dateline. China's digital currency and Biden's winning might change the global landscape.

https://www.reuters.com/article/us-britain-eu-talks-idCAKBN28F0SY

Yuan Internationalisation

The impact of China's digital currency.

https://www.eastspring.com/insights/what-would-be-the-impact-of-china-s-digital-currency

New Financial revolution - Digital Currency

 China leading the race in Central Bank's digital currency. 

https://asia.nikkei.com/Spotlight/Caixin/In-depth-China-s-digital-currency-ambitions-lead-the-world

"Meat Cartel" and Halal Requirement

A few days ago, the issue resurfaced.1,500 tonnes of frozen meats estimated to value at RM30 million.

https://www.therakyatpost.com/2020/12/03/meat-cartel-selling-repackaged-fake-halal-frozen-meats-busted-in-johor/

Malaysia and Economic Recovery

In Tinta Minda, BERNAMA. Malay article.

Excerpt:

"Laporan prestasi ekonomi negara pada suku ketiga pada 2020 yang diumumkan Bank Negara Malaysia (BNM) pada Jumaat lepas tidaklah memberikan sebarang kejutan kepada banyak pihak. Seperti yang dijangka, fasa pemulihan ekonomi negara telahpun membuahkan hasil melalui pembukaan semula semua sektor ekonomi dan pemansuhan halangan pergerakan pada Mei 2020 yang tertakluk kepada prosedur operasi standard (SOP).

Jika dibandingkan dengan pertumbuhan ekonomi pada suku kedua 2020 iaitu -17.1%, fasa pemulihan ekonomi negara sudahpun bermula pada suku ketiga dengan mencatatkan kadar pertumbuhan negatif yang semakin mengecil iaitu -2.7%.

Prestasi pemulihan ekonomi negara adalah jauh lebih baik berbanding dengan negara-negara lain, misalnya Indonesia (-3.5%), Singapura (-7%), Filipina (-11.5%), Eropah (-4.3%), dan Great Britain (-9.6%). Hanya dua negara sahaja yang mencatatkan kadar pertumbuhan ekonomi yang positif dalam suku ketiga tahun 2020 iaitu China (4.9%), dan Chinese Taipei (3.3%)."

https://www.bernama.com/bm/tintaminda/news.php?id=1902455

Finding the Vaccine for Covid-19

There is a 32 minutes video as well. It took years to develop vaccine. 

https://www.aljazeera.com/economy/2020/11/30/brexit-deal-in-sight-uk-urges-eu-to-move-on-fishing-rights

Source: Internet