News and Analysis: 8-19 Oct 12 | EmergingFrontierMarkets.com

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Posted on Fri, 19 Oct 12:

Reinhart and Rogoff: Sorry, US econ recoveries really aren't different, Bloomberg, 16 Oct 12:
Recently, a few op-ed writers, incl K Hassett, G Hubbard and J Taylor--who are advisers to Romney--as well as M Bordo, who supports the candidate, have stressed that the US is 'different' in that its recoveries from recessions associated with financial crises have been rapid and strong, say co-authors of This Time is Different: Eight centuries of financial folly (2009)/Harvard profs (Bordo: Financial recessions don't lead to weak recoveries, WSJ) [courtesy Stanford U]

The global wealth pyramid, Credit Suisse, 10 Oct 12:
Examining the patterns of wealth ownership across all adults in the world through the lens of the 'wealth pyramid', the Global Wealth Report 2012 analyzes not only the top echelons of wealth holders, but also the 'middle' and 'bottom' parts of the pyramid, which other studies tend to ignore. The report aims to provide the most reliable and comprehensive data on global household wealth, covering all components of wealth and spanning the entire wealth spectrum

In today's Asia, how do we define 'middle class'?, Caixin Media/China, 28 Sep 12 [transl. by Worldcrunch]:
We often hear about the rise of the middle class, but what exactly is the 'middle class'? Making it even more complex is the fact that 'middle class' can have several meanings. Therefore, if a comparison is to be made between places, it's probably better to do so using a purely econ viewpoint. So we posed 2 identical questions in 10 Asian cities where we conducted surveys. And we investigated more than 500 respondents in each city (Meet the 'C' class--Brazil's rising middle class, Folha de Sao Paulo)

Posted on Wed, 17 Oct 12:

Lawrence Summers: The world is stuck in a vicious cycle, FT, 15 Oct 12 [courtesy Harvard]:
If the global economy was in trouble before the WB-IMF meetings in Tokyo last week, it is hard to believe that it is now smooth sailing. While there is agreement on the need for more growth and job creation in the short run and on containing the accumulation of debt in the long run, there are deep differences of opinion both within and across nations as to how this can be accomplished, says Pres Obama's Nat'l Econ Council fmr dir/Harvard prof (Schäuble: Europe's reforms are working, WSJ) [courtesy German Fin Min]

John Taylor: The Romney cure for Obama-induced economic ills, WSJ, 3 Oct 12 [courtesy Stanford U]
When my students ask me how Romney's program will improve the economy, I begin by stressing the basic problems and then address the usual counterpoints. 1st is the obvious: the economy is getting worse, not better. Real personal income fell by 3.8% at an annual rate in Aug. Unemployment has been stuck above 8%. Econ growth in the most recently reported 2nd quarter was a minuscule 1.3%. The Obama admin counters with a rosier view, says Romney econ adviser/Stanford prof (Tyson: Closing America's jobs deficit, Proj Syndicate) [courtesy WEF blog]

Land, water, and energy pressures threaten poor's food security--hunger report, Int'l Food Policy Res Inst, 11 Oct 12 [PDF]:
Unsustainable use of land, water, and energy is threatening the food security of the poorest, acc to the 2012 Global Hunger Index, released by Welthungerhilfe, Concern Worldwide, and IFPRI. It finds that hunger remains serious, with 20 nations having levels of hunger that are 'alarming' or 'extremely alarming'. The 3 nations with extremely alarming levels are Burundi, Eritrea, and Haiti (16 Oct--World Food Day | Policy options for riding out food, fuel price spikes, IMF Survey Mag)

Posted on Mon, 15 Oct 12:

Bernanke believes easing doesn't endanger emerging markets, Industry Leaders Mag, 14 Oct 12:
US Fed chair Bernanke tried to reject arguments that the US central bank's stimulus was causing destabilizing flows of capital to emerging markets. In his speech at an IMF-Bank of Japan conference in Tokyo, he said that the Fed's moves to bolster US job growth will not have any unwanted consequences in emerging markets. He defended the US central bank's easing measures which have been the subject of strong criticism. Opponents of these moves maintain that the easing is to blame for destabilizing capital flows (Bernanke's speech)

UCLA's Shapley, Harvard's Roth win Nobel prize for game theory's use in "stable allocations", Nobel Found., 15 Oct 12:
This year's prize concerns a central econ problem: how to match different agents as well as possible. For example, students have to be matched with schools, and donors of human organs with patients in need of a transplant. How can such matching be accomplished as efficiently as possible? What methods are beneficial to what groups? Shapley used so-called 'cooperative' game theory to study different matching methods. And Roth recognized that Shapley's theoretical results could clarify the functioning of important markets in practice

Backhouse/Bateman: How can history stimulate new economic thinking?, Inst New Econ Thinking (blog), 12 Nov 11:
While we were writing Capitalist Revolutionary: John Maynard Keynes (2011), we spent some time thinking about how history can be relevant to economics. Our aim in the book is to recover the historical Keynes from the Keynesianism that dominated the period after WW2 and which re-emerged in '08, but of what relevance is this to policy if we do not want to claim that he holds the answers to all our current problems? So how then can history that pays attention to context be relevant?, ask Univ Birmingham prof and Denison Univ provost

Posted on Fri, 12 Oct 12:

IMF's Lagarde and Germany's Schauble clash over austerity, New Europe, 12 Oct 12:
Speaking at the IMF's annual meeting in Tokyo, IMF head Lagarde said that more time should be given to struggling European economies, such as Greece, Portugal and Spain, to meet their budget cut commitments. However, Lagarde's calls for more growth stimulus were rejected by German Finance Min Schäuble, who said "it does not build confidence" when policy is changed midway through its course (IMF and Europe in dangerous game of brinkmanship over failing Greek bailout, Guardian)

Jose Antonio Ocampo: Has the Fed started a 'currency war'?, Project Syndicate, 8 Oct 12 [via Japan Times]:
The Fed's recent decision to launch a 3rd round of 'quantitative easing' has revived accusations by Brazil's finance minister that the US has unleashed a 'currency war'. In emerging-markets that are already struggling with the impact of rapid currency appreciation on their competitiveness, expansionary measures announced in recent weeks by the central banks in EU and Japan have heightened the sense of alarm, says fmr UN undersec-gen/Columbia U prof (Fed defends quantitative easing amid 'currency war' fallout, Euromoney)

Bringing banking to the masses, one phone at a time, Dallas Fed Economic Letter, Oct '12:
An estimated 1.7 bln people have cell phones but no bank account. In Africa, for example, cell phone subscriptions outnumber bank accounts in many nations. With mobile banking--also known as branchless banking--individuals and firms can use their phones to make deposits and withdrawals, transfer funds and pay bills. The technology can bring services to those with no previous banking relationship. Kenya's system, launched in '07 and known as M-Pesa ('M' for mobile, 'Pesa' for money in Swahili), is a good example

Posted on Wed, 10 Oct 12:

Jose Viñals: Time not on our side -- Tough decisions needed to strengthen financial stability, IMF (blog), 10 Oct 12:
Recent policy actions in Europe, US, emerging markets, and here in Japan, where I'm attending the IMF-World Bank annual meetings, have improved investor sentiment and helped markets rebound in recent months. But the principal risk remains the euro zone, while a potential political impasse in the US could result in a possible push over the 'fiscal cliff', says IMF financial counsellor/fmr Bank of Spain deputy gov (Blanchard: Global economy -- Some bad news and some hope)

Can the Nobel Laureate in Economics be predicted?, Thomson Reuters ScienceWatch, Sep '12:
This year's group of 'Citation Laureates'--researchers whose landmark discoveries and advances, not to mention their measurable esteem in the scientific community, place them within reach of science's highest prize. Among them, these researchers in economics have shown themselves to be "of Nobel class": MIT's Stephen Ross, Oxford's Anthony Atkinson, Princeton's Angus Deaton, and Yale's Robert Shiller (Methodology for the Citation Laureates and Nobel Prize review)

Coffers: Why we make bad decisions about money (and what we can do about it), Big Think, 19 July 12:
Why does it feel better to be paid hourly than to receive a salary? Why are we willing to gamble, even when we know there's a 'house advantage'? If you've ever looked back at a rash decision you made and wondered "what was I thinking?," take heart: you're not stupid, even the smartest people make irrational choices, says Daniel Kahneman, a psychologist who won the Nobel prize in economics (Before you make that big decision..., Harvard Bus. Rev) [PDF, courtesy Daily Decision-making]

From our archive: Knowledge on fire--Girls' schools in Afghanistan face highest risk of violence, Afg Min Educ/CARE Int'l/World Bank, 6 Jan 10

"Stop teaching and running the girls' school, otherwise you will be slaughtered." That was the message sent to the Headmaster of a girls' school in Logar, just south of Kabul, when masked gunmen assaulted him just outside of his house. Acc to a new joint report titled Knowledge on Fire: Attacks on Education in Afghanistan, attacks on schools are increasing at an alarming rate. Girls are at particular risk of attacks aimed at keeping them out of school

Posted on Mon, 8 Oct 12:

What now for Venezuela's economy?, BBC News, 8 Oct 12:
Pres Hugo Chavez has won his bid for another six years in power. But what can he do to revive the nation's economy? His econ strategy is running into trouble. The nation is beset by crumbling infrastructure, an overvalued currency and underperforming industry. Thanks to his social programs, poorer Venezuelans have certainly benefited from the nation's oil wealth more than they did under what he has called the rotten elites. But the way in which his admin has spent the oil proceeds has been opaque

Growth to slow in East Asia in 2012, but domestic demand will play key role in rebound next year, World Bank, 8 Oct 12:
Econ growth in the East Asia/Pacific region may slow down this year, before recovering in 2013. Growth in developed nations will remain modest, with recovery in the region to be driven mainly by strong domestic demand in developing nations, said the bank in its 'East Asia/Pacific Econ Data Monitor', released today. It says that weak exports and lower investment growth will cut down China's GDP growth this year (Jobs are a cornerstone of dev't, says World Dev't Report)

Excerpt from a newly minted MacArthur 'genius', PBS NewsHour (blog), by P Solman, 2 Oct 12:
For a 33-year-old, Harvard economist Raj Chetty has a distressingly high number of accomplishments, to which he now adds the status of MacArthur 'genius' Fellow. But people should be anything but distressed by his work for--following his father who advised the PM as India began to shift away from state socialism--his goals are to improve his nation's standard of living, esp. for those at the lower end. His nation is the US (His profile at MacArthur Found. | One of the 16 geniuses who give us hope, Esquire)

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