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Global economic future news and discussion

Discussions about the economic and financial ramifications of PEAK OIL

Re: Global economic future news and discussion

Unread postby Graeme » Thu 30 Oct 2014, 17:07:43

The State Of The Global Economy In 28 Anecdotes

Deutsche Bank analysts recently published their “Equity House View” report, which includes a map of anecdotes from various businesses around the world. They cover industrials as well as consumer goods makers.

All together, it offers a nice snapshot of the world.

“The picture from Corporates is positive in the US, mixed but not bearish on Europe and is largely negative on China,” Deutsche Bank analysts write.

Check it out:


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Re: Global economic future news and discussion

Unread postby Graeme » Sun 02 Nov 2014, 17:39:48

The world economy is flying with only one engine

The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, only one of its four engines is functioning properly: the Anglosphere (the United States and its close cousin, the United Kingdom).

The second engine – the eurozone – has now stalled after an anaemic post-2008 restart. Indeed, Europe is one shock away from outright deflation and another bout of recession. Likewise, the third engine, Japan, is running out of fuel after a year of fiscal and monetary stimulus. And emerging markets (the fourth engine) are slowing sharply as decade-long global tailwinds – rapid Chinese growth, zero policy rates and quantitative easing by the US Federal Reserve, and a commodity super-cycle – become headwinds.

So the question is whether and for how long the global economy can remain aloft on a single engine. Weakness in the rest of the world implies a stronger dollar, which will invariably weaken US growth. The deeper the slowdown in other countries and the higher the dollar rises, the less the US will be able to decouple from the funk everywhere else, even if domestic demand seems robust.

Falling oil prices may provide cheaper energy for manufacturers and households, but they hurt energy exporters and their spending. And, while increased supply – particularly from North American shale resources – has put downward pressure on prices, so has weaker demand in the eurozone, Japan, China, and many emerging markets. Moreover, persistently low oil prices induce a fall in investment in new capacity, further undermining global demand.

Meanwhile, market volatility has grown, and a correction is still underway. Bad macro news can be good for markets, because a prompt policy response alone can boost asset prices. But recent bad macro news has been bad for markets, owing to the perception of policy inertia. Indeed, the European Central Bank is dithering about how much to expand its balance sheet with purchases of sovereign bonds, while the Bank of Japan only now decided to increase its rate of quantitative easing, given evidence that this year’s consumption-tax increase is impeding growth and that next year’s planned tax increase will weaken it further.

As for fiscal policy, Germany continues to resist a much-needed stimulus to boost eurozone demand. And Japan seems to be intent on inflicting on itself a second, growth-retarding consumption-tax increase.


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Re: Global economic future news and discussion

Unread postby Graeme » Tue 25 Nov 2014, 16:11:56

OECD sees global economy in low gear

The OECD's Economic Outlook, released on Tuesday, said there would be only a moderate expansion of global output in the next two years as large risks and vulnerabilities persisted.
The organization forecast global growth to come in at 3.25 percent this year, followed by a 3.75 percent rise next year and just under 4 percent in 2016.

Economies in OECD member countries would continue to be supported by accommodative monetary policies and slow improvements on labor markets.

The report noted the speed of recovery from the global financial crisis remained unimpressive, but singled out the US and Britain where shrewd policy action had led to above-average growth incentives.


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Re: Global economic future news and discussion

Unread postby Graeme » Fri 28 Nov 2014, 17:10:56

The lonely locomotive

THERE is a spring in America’s step these days. A revision released this week raised annualised economic growth in the third quarter to 3.9%; it has averaged more than 4% in the past two quarters. The irrepressible stockmarket keeps hitting new highs, the most recent on November 26th. Job growth is accelerating. This is all the more remarkable because the rest of the world has hit the buffers. Japan has slid into recession, Europe is flirting with deflation and China has cut interest rates as growth flags. On November 25th the OECD, a club mainly of rich countries, said its members’ economies will grow just 1.8% this year and 2.3% next, about half a point slower than projected in May. Risks, it said, are on the downside.

Why the divergence? In part, it is a statistical quirk. America’s economy shrank in the first quarter, so its recent strength is from a low base. Output in the third quarter was up an unspectacular 2.4% from a year earlier; the pace of growth in the current quarter will probably be similar. That is still much better than the rest of the world, though, for which there are two main reasons: trade remains a small part of America’s economy, and the rest of the world’s misfortunes actually help, by lowering interest rates and the oil price.


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Re: Global economic future news and discussion

Unread postby Graeme » Sun 30 Nov 2014, 17:35:07

Falling oil prices offer the west a great chance to refashion itself. Let’s seize it

For the past 18 months, the world’s biggest oil producer has been the US. Saudi Arabia, eat your heart out. Courtesy of the fracking revolution, the US will maintain this new standing for the foreseeable future, according to official projections.

The world as we’ve known it for the past 50 years is being stood on its head. Which provides cause for optimism. But an international landscape increasingly dominated by nationalist firebrands, conservative zealots and policy makers in thrall to austerity economics is always apt to waste opportunities.

One first good result of this oil price shift, however, was witnessed at Opec’s meeting in Vienna last week. The once feared cartel of oil-exporting countries, with Saudi Arabia at its core, a cartel that at one time commanded more than half of global production, is now a shadow of its former self. Opec’s members were unable to agree to cut production because most are strapped for cash and had no choice but to maintain levels.


But western governments cannot hope that economic benefits will arrive automatically. These are new times. It has been obvious since the 2008 financial crisis that the economic landscape is wholly different. Digitisation is gnawing away at established companies’ business models and empowering new insurgents at an escalating pace. And this is happening in a world in which there is a massive overhang of private debt and where banks are still nursing damaged balance sheets.

Uncertainty and fear abound. Interest rates in Britain alone have been pegged at 0.5% for more than five years. But still business is reluctant to invest, not knowing what technologies to back or not knowing how much demand there will be for new products and services. We live in an era of stagnation, “secular stagnation”, as former US treasury secretary Larry Summers has described it.

So falling oil prices offer the world economy a great opportunity. But if it is not leapt upon purposefully by aggressively expansionary economic policy, secular stagnation might worsen. Because energy prices affect all goods and services, their fall could reinforce the trend for the general price level to fall further and so accelerate deflation and all the ills that go with it.

This is the moment for the EU and the European Central Bank to throw down the gauntlet to Germany. Last week, the European Commission launched a plan with at least an eye-catching top line – to trigger an additional ¤300bn spending on vital infrastructure across the continent. Except it was a phantom ¤300bn, with Germany insistent that it should involve no extra spending by the commission, nor by governments, nor extra borrowing by the European Investment Bank. Why? Because there was an alleged risk of inflation.

However, with oil prices falling by a third in a few months, the risk is non-existent. Rather, the problem is of the opposite order: not seizing the moment to launch a genuine economic stimulus of some scale.


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Re: Global economic future news and discussion

Unread postby dorlomin » Sun 30 Nov 2014, 17:44:19

AndyA wrote:When it comes to chaotic systems, random walk is generally the most accurate.

Eh?

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Re: Global economic future news and discussion

Unread postby Graeme » Mon 01 Dec 2014, 20:37:35

Oil’s plunge to buoy global economy: A $1.3-trillion boost to consumer

The outlook for the global economy is “much brighter” with Brent crude at $70 (U.S.) a barrel, just shy of where it stands today, compared to June’s $110, said Julian Jessop of Capital Economics in London.

“Roughly speaking, the $40 fall in the price of oil represents a transfer of annual income of around $1.3-trillion from oil producers to oil consumers, equivalent to 1.7 per cent of global GDP,” Mr. Jessop said in a report today.

“Of course, oil producers are spenders, too, so the net effect on world demand will be much smaller,” he added.

“But on plausible assumptions about the relative propensities to spend global GDP could easily be between 0.5 per cent and 1 per cent higher as a result of the decline in oil prices.”

Of course, some countries and sectors will still be “big losers,” he added.

More money in the pockets of Americans as energy costs tumble, just as an example, will help juice the U.S. economy, which is also a win for Canada.

“Let’s not forget that there are many winners from what is effectively a positive supply shock,” said senior economist Robert Kavcic of BMO Nesbitt Burns, adding that consumers are “the clear and immediate beneficiaries” of the plunge in crude.


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Re: Global economic future news and discussion

Unread postby Graeme » Wed 03 Dec 2014, 17:36:29

Global economy to expand at solid pace in Q4 -PMI

The global economy will expand at a solid pace in the final quarter, albeit less strongly than during the summer months after inflows of new business slowed in November, a survey showed on Wednesday.

JPMorgan's Global All-Industry Output Index, produced with Markit, fell to a seven-month low of 53.2 from October's 53.5 but has now held above the 50 mark that divides growth from contraction for more than two years.

"November saw global economic growth continue its gradual slowdown from the highs of the middle of the year," said David Hensley, a director at JPMorgan.


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Re: Global economic future news and discussion

Unread postby Graeme » Sat 06 Dec 2014, 18:37:25

China surpasses U.S. to become largest world economy

For the first time in decades, the U.S. is no longer the largest economy in the world, and China has become number one, the International Monetary Fund says.

The IMF recently released the latest numbers for the world economy, stating that China will produce $17.6 trillion in terms of goods and services-- compared with $17.4 trillion for the U.S.

Just 14 years ago, the U.S. produced nearly three times as much as the Chinese, Dow Jones’ MarketWatch reported.

But each country reports its data in its own currency, according to the IMF website. In order to compare data, each country's statistics must be converted into a common currency. But there are several ways to manage that conversion and each can result in very different answers.

Another measure of an economy’s strength is its “purchasing power parity” or PPP—the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.

China now accounts for 16.5% of the global economy when measured in real PPP terms, compared with 16.3% for the U.S.

Prices aren't the same in each country, Business Insider suggests. The same shirt will cost you less in Shanghai than in San Francisco, so comparing countries without taking these factors into account is not always reliable.

Though the average Chinese citizen earns a lot less than the average American, simply converting a Chinese salary into dollars underestimates how much purchasing power that person, and therefore that country, might have.

So the IMF measures both GDP in market-exchange terms, and PPP terms. On the purchasing-power basis, China is overtaking the U.S. right now and becoming the world's biggest economy.


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Re: Global economic future news and discussion

Unread postby dolanbaker » Sat 06 Dec 2014, 18:55:55

Well that happened a bit quicker than was previously expected!
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Re: Global economic future news and discussion

Unread postby Graeme » Tue 09 Dec 2014, 19:22:47

Investors, the global economy is in the perfect zone

Concerns over the pace of world economic growth, and of China’s economy in particular, are not a good reason to sell your equities.

That is the argument of John Dessauer, a former multinational banker based in Europe who has extensive experience in China. For the past three decades he has been an investment adviser in the U.S., and he currently provides weekly commentary at his advisory firm’s website .

I checked in with Dessauer on Tuesday morning, New York time, as the stock market was plunging, with the Dow Jones Industrial Average off by as much as 220 points on global economic worries. (It fell 51 points at the close. The S&P 500 was little changed.) Far from expressing concern, he urged treating any selloff as a buying opportunity.

Dessauer bases his optimism on something he says few are aware of or appreciate: The world economy’s growth rate is in the perfection zone — healthy, but not so high as to ignite fears of inflation. He cites the International Monetary Fund’s latest forecast of 3.8% world economic growth in 2015, which he suspects will soon be revised upward because of the stimulus created by lower oil prices.

“Global growth of 3% to 4% is an investor’s dream,” Dessauer says. “It’s amazing to me that the financial press is fostering the widespread perception that the world economy is headed for a recession. That is far from reality.”


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Re: Global economic future news and discussion

Unread postby dolanbaker » Wed 10 Dec 2014, 02:23:28

Sounds like someone's terrified that the arse is about to fall out of the market and he could be left holding the baby. But he's right that a low growth situation is not a recession.
Graeme wrote:Investors, the global economy is in the perfect zone

Concerns over the pace of world economic growth, and of China’s economy in particular, are not a good reason to sell your equities.

That is the argument of John Dessauer, a former multinational banker based in Europe who has extensive experience in China. For the past three decades he has been an investment adviser in the U.S., and he currently provides weekly commentary at his advisory firm’s website .

I checked in with Dessauer on Tuesday morning, New York time, as the stock market was plunging, with the Dow Jones Industrial Average off by as much as 220 points on global economic worries. (It fell 51 points at the close. The S&P 500 was little changed.) Far from expressing concern, he urged treating any selloff as a buying opportunity.

Dessauer bases his optimism on something he says few are aware of or appreciate: The world economy’s growth rate is in the perfection zone — healthy, but not so high as to ignite fears of inflation. He cites the International Monetary Fund’s latest forecast of 3.8% world economic growth in 2015, which he suspects will soon be revised upward because of the stimulus created by lower oil prices.

“Global growth of 3% to 4% is an investor’s dream,” Dessauer says. “It’s amazing to me that the financial press is fostering the widespread perception that the world economy is headed for a recession. That is far from reality.”


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Re: Global economic future news and discussion

Unread postby Graeme » Thu 11 Dec 2014, 21:20:57

A multi-speed global economy

IN the coming year, “divergence” will be a major global economic theme, applying to economic trends, policies and performance. As the year progresses, these divergences will become increasingly difficult to reconcile, leaving policymakers with a choice: overcome the obstacles that have so far impeded effective action, or risk allowing their economies to be destabilised.

The multi-speed global economy will be dominated by four groups of countries.

The first, led by the United States, will experience continued improvement in economic performance. Their labour markets will become stronger, with job creation accompanied by wage recovery. The benefits of economic growth will be less unequally distributed than in the past few years, though they will still accrue disproportionately to those who are already better off.

The second group, led by China, will stabilise at lower growth rates than recent historical averages, while continuing to mature structurally. They will gradually re-orient their growth models to make them more sustainable — an effort that occasional bouts of global financial-market instability will shake, but not derail. And they will work to deepen their internal markets, improve regulatory frameworks, empower the private sector, and expand the scope of market-based economic management.

The third group, led by Europe, will struggle, as continued economic stagnation fuels social and political disenchantment in some countries and complicates regional policy decisions. Anaemic growth, deflationary forces, and pockets of excessive indebtedness will hamper investment, tilting the balance of risk to the downside. In the most challenged economies, unemployment, particularly among young people, will remain alarmingly high and persistent.

The final group comprises the “wild card” countries, whose size and connectivity have important systemic implications. The most notable example is Russia. Faced with a deepening economic recession, a collapsing currency, capital flight and shortages caused by contracting imports, President Vladimir Putin will need to decide whether to change his approach to Ukraine, re-engage with the West to allow for the lifting of sanctions, and build a more sustainable, diversified economy.


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Re: Global economic future news and discussion

Unread postby Graeme » Fri 12 Dec 2014, 17:59:20

Crystal Ball: Top 10 economic predictions for 2015

The global economy muddled along this year, with the resurgence in the U.S. economy helping to offset slowing growth in Europe, Japan and China.
So, where does this leave the world economy in 2015?

"Positive fundamentals are in place for the momentum in the global economy to improve during 2015," said Nariman Behravesh, Chief Economist at IHS, which expects global growth to pick up to 3 percent from an estimated 2.7 percent this year.

IHS outlined its top 10 economic predictions that make up its global outlook:

1. U.S. economy will power ahead

The world's largest economy will continue to outperform its peers, driven by strengthening domestic demand, specifically consumer spending.

The dynamics underpinning consumer spending—which accounts for 70 percent of gross domestic product (GDP)—remain very positive, including strong jobs growth, improved household finances and low gas prices. The economy will grow in the 2.5 to 3 percent range, IHS predicts.


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Re: Global economic future news and discussion

Unread postby copious.abundance » Tue 16 Dec 2014, 02:34:00

Presented without further comment.

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Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Swiss National Bank will cut interest rate to minus 0.25%

Unread postby dolanbaker » Thu 18 Dec 2014, 18:14:27

When banks really don't want your money, then you know some-thing’s wrong!

http://www.bbc.com/news/business-30528404
Switzerland's National Bank (SNB) will bring in a negative interest rate cutting the value of large sums of money left on deposit in the country.

The Bank is imposing a rate of minus 0.25% on "sight deposits" - a form of instant access account - of more than 10m Swiss francs ($9.77m).

It is trying to lower the value of the Swiss franc, which has risen recently.

Russia's market meltdown and a dramatic plunge in the oil price have led investors to seek "safe havens".
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Re: Global economic future news and discussion

Unread postby Graeme » Sun 21 Dec 2014, 16:43:07

A falling oil price is good for the world economy

Lower oil prices are not a good thing for Vladimir Putin, Russia’s president: that much is clear. But what about for everyone else? The sharp fall in crude over the past three months has produced an unusual amount of concern that, with inflation already dangerously low across much of the developed world, cheaper oil will worsen the problem.

Such fears are misplaced. To think that lower oil prices are a net negative for the world economy, and particularly for the advanced economies, is to misunderstand the problem with deflation and the cures for it.

A falling overall price level, by and of itself, is not necessarily a bad thing. China periodically slipped into deflation from the late 1990s onwards as it embarked on an extraordinary period of expansion. But with economic growth at the time at or near double-digit rates, that reflected rapid productivity growth rather than excess supply. Any slowdown in demand could easily be met by reducing interest rates.

The same is not true today for the advanced economies, particularly those within the eurozone. There, with demand too weak to match productive capacity and interest rates at or near zero, a sustained fall in the price level means that real interest rates rise. Higher real rates will encourage households further to postpone consumption and create a vicious circle of slow growth and excess capacity.

Yet while lower oil prices will have a one-off arithmetic effect on the price level and hence reduce inflation, that should boost growth rather than retarding it. Lower oil prices may hurt capital-intensive extractive industries in the medium term, but they benefit households almost immediately through cheaper petrol and other fuels. An unexpected fall in the general price level raises real incomes. This is particularly welcome in the UK, where real median household incomes last year were six per cent lower than before the global financial crisis, despite a relatively healthy economic recovery.


FT

The Guardian view on falling oil prices: mixed blessing

Christmas came early for drivers this year, with a steady fall in the price at the pump of 15p a litre since the summer. Underlying the cheaper petrol is a mighty oil crash, with the price of a barrel of Brent crude near halving, from $116 in June to a mere $63 on Friday night. The frightening exposure of the big oil producers is on plain view in Russia, but – in years gone by – the oil-importing western economies as a whole would, like cheering motorists on forecourts, have regarded cheap fuel as an unalloyed boon.

This time, however, a decidedly uneasy air surrounds oil’s big dip. At first blush, this seems baffling. Oil’s ups and downs have reliably given rise to an equal and opposite swing in the mood of industry. All three late 20th-century slumps – 1974, 1980-81 and 1990-91 – followed hot on the heels of costlier crude. Less often stressed is the way that oil’s great reverses have pumped fuel into the economic engine. Britain credits (or blames) its then-chancellor’s policies for its rapid late 1980s expansion with the phrase “Lawson boom”, but the effective collapse of the Opec cartel’s discipline and the associated halving of the crude price in 1986 was just as important. For all the new-age talk about living on thin air in the late 1990s, the dotcom boom got going amid another glut of the gloop that lubricates western prosperity.

History, then, points to cheaper oil being a pedal pressed to the metal, a potential means of the world finally putting some pace into the less-than-great recovery that has followed the Great Recession. The IMF is just one voice that takes this conventional view. Optimists point to the rising role of shale gas in reducing America’s addiction to imported oil. Industry experts have been saying that shale would prove a game-changer for many years now, but – on this sunny reading – what’s recently changed is that the markets are finally paying attention. As they grasp that unpromising rocks can sometimes contain as much locked-up energy as oil wells, the perennial panic about imminent “peak” oil production recedes, and there is less reason to indulge in speculative stock-piling. Supply floods back into the market, prices drop and the economy should begin to hum.

The more anxious interpretation starts by suggesting a different root cause – demand instead of supply. Oil has dipped 40%, pessimists fear, because the world no longer expects a return to economic full pelt, as that used to be understood before the crisis, nor to the growing appetite for hydrocarbons that used to go with it. Europe, Japan and – relative to its own vigorous standards – China, have all been looking anaemic this year. Like low blood pressure after a heart attack, then, cheap oil should arguably be regarded not as a sign of rude health, but rather as a consequence of malaise. In the eurozone especially, where price rises of a mere 0.3 percentage points now separate a continent and deflation, any further falls in energy costs could make the difference.


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Re: Global economic future news and discussion

Unread postby Graeme » Fri 26 Dec 2014, 16:12:32

UK just pips France to fifth place in global economies league table

There’s definitely good news and bad news for the UK in the latest league tables of global economies drawn up by a leading economic consultancy.

Economic patriots will be cheered by calculations which put the UK ahead of France as the world’s fifth biggest economy. On the downside, this appears to be mainly because Britain now includes earnings from drugs and prostitution in its GDP figures, which France as yet does not.

The 2014 economic league table by London-based Cebr Global also concedes that in reality France might still be bigger, given the relatively tiny margins involved. The UK economy is estimated to be worth $2,828bn (£1,818bn) in total, a mere £1bn bigger than the French.

In June, the UK economy received a statistical boost of £65bn after earnings from drugs and the sex trade were included for the first time, under new EU rules.

While it pushed up GDP by almost 5%, economists stressed it was a mere accounting measure and should not be taken as a sign of increased economic vitality. France has yet to take this step.

Britons should enjoy their relatively lofty perch while they can. Apart from being possibly pushed back into sixth by the French next year, India’s economy is forecast to overtake the UK’s as early as 2018. It is now estimated to be the world’s ninth biggest, up from 1oth last year.

Among the losers in this year’s table is Russia, which dropped from eighth to 10th thanks to a weak rouble and low oil price. One oddity of this is that it pushes Italy, hardly undergoing an economic purple patch at the moment, up a place to eighth.

Among the big hitters, the US remains the world’s largest economy by some distance – it is said to be worth $17,528bn, compared with China’s $10,028bn – and Cebr Global predicts the pair will swap places in 2025. By 2030, according to the forecasts, the global top five will be China, US, India, Japan and Brazil, with the UK predicted to be back up to sixth, having just overtaken Germany.


theguardian

4 Expert Predictions for the Global Economy in 2015

As 2015 dawns, instability in Russia, stagnation in Europe, and uncertainty in China are being offset by a sharp drop in oil prices that the International Monetary Fund says could boost global economic growth by as much as 0.8 percent above the expected 3.8 percent.

The United States “faces a debt reckoning,” writes Guardian finance and economics editor Heidi Moore. U.S. consumer debt worth $3.2 trillion and the resurgence of subprime lending are both danger signs for an economy that otherwise appears to be on the mend.

Europe too could face trouble in 2015 without major structural reform, argues the Council on Foreign Relations’ Robert Kahn. Growth and investment remain low, unemployment is “sky-high,” and early elections could once again put Greece “on a collision course with the rest of Europe.”

China, which is in the midst of a delicate rebalancing act, will de-emphasize GDP growth in favor of structural, financial, and energy reform, writes the Paulson Institute’s Damien Ma.

Finally, CFR’s Edward Alden foresees that 2015 could see “breakthroughs in global trade liberalization.” U.S.-led trade agreements with both Asia and Europe promise to boost growth, although they face significant obstacles at home and abroad.


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Graeme
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Re: Global economic future news and discussion

Unread postby Graeme » Sun 28 Dec 2014, 15:29:35

The Big Economic Unknowns of 2015, From Unemployment to Oil

I wish I knew where the economy will be heading next year. If I did, I might become rich. But, alas, I don’t — and even if we don’t always acknowledge it, no economists do.

Too much uncertainty clouds the crystal ball to be confident that any particular course of events will play out in the real world. But we do know something about the sources of that uncertainty, and in a season for sharing, I’d like to offer six questions whose eventual resolution will shape the economic year ahead:

■ How much slack really remains in the labor market?

The unemployment rate stands at 5.8 percent. If it continues on its current trajectory, it will have fallen an additional half a percentage point by mid-2015, putting it at a level that some economists see as effectively full employment.

Yet much of the reduction in unemployment reflects a decline in the share of the population in the work force. If a stronger economy were to induce these people to return to work, the recovery would still have a long way to run before we got to full employment. Moreover, millions of those who are counted as employed remain stuck in part-time jobs but want full-time work.


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Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
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Graeme
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Re: Global economic future news and discussion

Unread postby Graeme » Tue 30 Dec 2014, 16:43:35

How Will The Global Economy Do In 2015? Here's What You Should Know

The world can be a scary place, George Osborne seems to like suggesting, with every other economy in choppy waters as Britain's economy enjoys increasingly smooth sailing.

Speaking in October, the Chancellor said: "Britain is part of a global economy, but that doesn’t mean Britain is just going to be buffeted by the storms....The eurozone risks slipping back into crisis. Britain cannot be immune from that."

As 2015 nears, HuffPostUK asked various City experts to assess where the risks will lie for the global economy. Will we see Britain rocked by the storms, or emerge to even sunnier waters?

Europe in the doldrums

The economic drama looks set to continue on our own doorstep as Mario Draghi and European leaders try to pull the Eurozone back from the brink.

The European Central Bank boss infamously pledged to do "whatever it takes" to hold the Eurozone together last time a breakup loomed in 2012, and economists suggest that Italy and Greece's ailing economies will pile on the pressure.

The most popular political party in Greece, Syriza, wants to renege on the terms of Greece’s €240bn loan from the EU and IMF. Italy has a shrinking economy, government debt of €2,300bn and all three main opposition parties are anti-euro.

There are concerns that the Eurozone could slip into a Japanese scenario of deflation and little growth. Given the internal political tensions around the monetary policies being promoted by the European Central Bank in the face of German opposition, the Eurozone may be doomed to a poor performance in 2015 even if the euro weakens further as the possibility of fuller Quantitative Easing approaches.


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Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
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