Tag: Free exchange
An Expert’s Guide to Trumponomics
A leading economist has issued stark warnings about the Trump era and its impact on the American and global economy. We ask if the new President’s monetary policy is likely to succeed or fail. And with Trump being an economic populist, what will be his attitude to The Fed?
Davos in the spotlight
China’s President has addressed the World Economic Forum, the first Chinese head of state to do so. We assess his message to Donald Trump. Plus the author of the “Second Machine Age” Erik Brynjolfsson on why governments are failing to address the downsides of automation. And Harvard’s Ken Rogoff examines the The Curse of Cash and why reducing our dependency on it might be a good thing.
A flood of false headlines probably did not swing America’s election
DONALD TRUMP often presents himself as the great enemy of fake news. He has a pronounced tendency to accuse his opponents of peddling it. But some suspect it helped to deliver him the White House. One story, widely shared on social media in the run-up to the American election, alleged that the Clinton Foundation bought $137m in illegal arms and organised a child sex ring operating out of a pizza shop in Washington, DC. If this kind of ludicrous story influenced voters and helped push Mr Trump into the presidency, then the implications for American democracy are grim. Speaking truth to power is harder in a world where lies are cooked up for clicks.
A new working paper by two economics professors, Hunt Allcott of New York University and Matthew Gentzkow of Stanford University, is the first major study to have a data-driven crack at this topic. Though they do not estimate the impact of fake news directly, their…Continue reading
Wage growth surges, just in time for the Trump presidency
THE news that average wages grew by 2.9% in December, the final full month of the Obama presidency, provides more evidence that America’s labour market is heating up. For some time, America has been creating plentiful jobs—2016 was the fifth consecutive year with more than 2m job gains. But wage growth has been weak enough to cast doubt on the labour market’s strength. A commonly cited reason for paltry pay rises was the number of 25- to 54-year-olds—dubbed “prime age” workers—who had stopped looking for work after the recession, and hence were no longer counted as unemployed. Wages, the argument went, would not pick up until they were encouraged back to work.
With the average pay-cheque now growing faster than at any time since 2009—when layoffs of low-paid workers were artificially boosting average wagesContinue reading
The most profitable time of the year
We look at the decline in holiday spending in America and ask what surprises 2017 could bring. And Adrian Wooldridge takes on the ghosts of capitalism past, present and future
We wish you a merry reorganisation
In a Money talks special, Anne McElvoy brings in Suzane Heywood and Stephen Heidari-Robinson, authors of Reorg: How to get it right. They delve into the art and science of reorganising a business
Keep the costs of trade in perspective
ECONOMISTS are realising that they have got some things about trade wrong in the past. Just because trade can make everyone better off, doesn’t mean it will, for instance (at least without some help from politicians). That new research, and this year’s political ructions, are generating some reflection on these issues among economists is a good thing. But it is important to maintain one’s perspective. Tim Duy has not done that, I think, in this stemwinder of a post on the effects of American trade policy. He quotes Noah Smith, who says:
[I]n the 1990s and 2000s, the U.S opened its markets to Chinese goods, first with Most Favored Nation trading status, and then by supporting China’s accession to the WTO. The resulting competition from cheap Chinese goods contributed to vast inequality in the United States, reversing many of the employment gains of the 1990s and holding down U.S. wages. But this sacrifice on the part of 90% of the American populace enabled China to lift its…Continue reading
The Federal Reserve at last manages to lift rates in 2016
ON DECEMBER 14th, finance and economics journalists gathered for a long-awaited Federal Reserve announcement: that the Fed’s benchmark interest rate would rise once more, by 25 basis points, to a range between 0.5% and 0.75%. If the scene looked familiar, well, no surprise there. It was December a year ago that the Federal Reserve announced another increase in its benchmark interest rate, of 25 basis points—the first in nearly a decade. It was also December a year ago that Fed projections suggested that rates would soar upward in 2016, to close to 1.5% by year’s end. The Fed has repeated that tradition as well; the projections published today repeat last year’s heroic call, of a rate near 1.5% one year hence.
Whether the third act of the holiday tradition—an inevitably disappointing performance of inflation and wage growth, which forces the Fed to abandon all but one of its expected rate hikes—will also be repeated remains to be seen….Continue reading
The Fed finally manages to lift rates in 2016
TODAY, finance and economics journalist gathered for a long-awaited Federal Reserve announcement: that the Fed’s benchmark interest rate would rise once more, by 25 basis points, to a range between 0.5% and 0.75%. If the scene looked familiar, well, no surprise there. It was December a year ago that the Federal Reserve announced another increase in its benchmark interest rate, of 25 basis points—the first in nearly a decade. It was also December a year ago that Fed projections suggested that rates would soar upward in 2016, to close to 1.5% by year’s end. The Fed has repeated that tradition as well; the projections published today repeat last year’s heroic call, of a rate near 1.5% one year hence.
Whether the third act of the holiday tradition—an inevitably disappointing performance of inflation and wage growth, which forces the Fed to abandon all but one of its expected rate hikes—will also be repeated remains to be seen. In some important ways, conditions…Continue reading