Archive forInternational

China to be #1 economy before 2030

http://www.nytimes.com/2012/12/11/world/china-to-be-no-1-economy-before-2030-study-says.html?ref=business&_r=0

Every four years The National Intelligence Council reports a 30 year strategic plan that outlines what it believes the world will look like based on current trends. It believes that China will eventually surpass the United States in economic power sometime before 2030 yet the United States will clearly  play a major role in the future thanks to its eventual energy independence. This contrasts today where for many nations; their power is based off of their control of oil and other natural resources. The report forecasts that in the future the world will have a massive middle class that will be a driving force in the direction many countries take. What are currently less developed countries will soon become leading powers based on their economic development and infrastructure.

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Germany leads the way in the EU

http://www.investopedia.com/financial-edge/1212/why-germany-is-the-economic-powerhouse-of-the-eurozone.aspx#axzz2Ebur30nI

This a relativley short but interesting article explaining some of the reasons why Germany is a leading country in the world economy. While it may not be overly relevant to what we have been discussing latley in class, I have always wondered make Germany such strong economy. The article from Investopedia, explains how Germany has a complex economy (ranked # 2 in the world) and is mostly export driven with mroe than %50 percent of its GDP being a product of exports. The goods Germany produces and exports are some of the most complex in the world, and economists believe that the The strength of their infstructure allows them to move goods from place to place smoothly and efficently. However the interesting part is that Germany’s growth in GDP rarely goes above 3%, meaning it is now the flashiest country in terms of growth but it is very consisent and stable. I think this is an interesting read worth your time.

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When Cheap Foreign Labor Gets Less Cheap

This article discusses how wages are starting to rise in other foreign countries. As wages start to rise in developing countries, labor in the US starts to become more competitive. This starts to make it seem like work can be done just as well here in the US as it can be done anywhere else. With this in mind we could start to see the transfer of production back here in the US.

 

 

http://economix.blogs.nytimes.com/2012/12/07/when-cheap-foreign-labor-gets-less-cheap/?ref=economy

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Banks That Are Too Big To Regulate Should Be Nationalize

http://www.nytimes.com/2012/07/23/opinion/banks-that-are-too-big-to-regulate-should-be-nationalized.html?ref=economics

 

The link provides an article describing that few economists in the University of Chicago, who founded the modern conservative theory of economic regulation, presented a normative opinion contrasting the liberals in Washington that the big banks, JP Morgan, Goldman… which are too big to regulate should be nationalized. I found it so interesting with respect to the fact that nearly all the investment banks started out as small private agent firms. As years of developments, all those banks become the “big fishes” in the economic ocean. The investment banks could even possess the potential to trigger a economic crisis which will bring economies into recession. e.g. The bubble burst of the subprime loan markets that the investment banks packaged and sold not only brought the U.S. economics bak to 1930s, but also fluctuated the order of economics of the whole world.

Standing in antitrust point of view, I would argue that nationalizing the banks would be such a bad idea, because the banks are likely to regulate themselves under the supervision of the public after they are nationalized. As a matter of fact, nationally-owned banking system has been working efficiently and successfully in China. Nearly two thirds of the banks in China are nationalized. The reason of their effective management is that the banks’ businesses are so colossal that the banks are regulated more effectively when the banks are nationalized.

 

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Europe’s Avoidable Collision Course

http://www.nytimes.com/2012/12/02/business/euro-zone-keeps-playing-a-dangerous-game.html?adxnnl=1&ref=business&adxnnlx=1354507282-X7o21w0ZjwrlOSUtt4wx8A

 

This article discusses game theory in a different way then we ever have in class.  It talks about the debt crisis in Europe and the aid that the better countries are providing to worse off countries   What i found interesting is how the author (Cowen our textbook author), categorizes the constant cycle of bailouts and spending prisoner’s dilemma of sorts.  It also discuses the potential outcomes of these constants bailouts, which could ultimately cause a crash in multiple economies in the Euro zone, which could in turn effect markets in all parts of the globe.

 

 

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Chinese Education

http://www.nytimes.com/2012/11/22/world/asia/in-china-schools-a-culture-of-bribery-spreads.html?ref=education

I find education to be a very interesting and controversial topic when debating whether it should be a public or private good. Although all students should have equal access to an equal quality education, it is definitely a competitive system to receive a high quality education. This article talks about schools in China and how “Chinese families see their hopes for the future sold to the highest bidder.” Education has always been seen as the key to getting ahead, but the academic race only has increasingly become in favor of those who are wealthy and well-connected to have an advantage at government-run schools. Education in China is excludable and rival, making it a private good in China.

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Renewable Energy Costs in Britain

There are a lot of parallels between the issues addressed in this article and the challenges that are currently being dealt with in the US. Even with Britain’s current dismal economy, the administration is continuing to push for clean energy through nuclear and wind power. Just like in the US, these cleaner forms of energy cost more than the current forms of energy (coal and natural gas), and require economic incentives in order to even be considered. Perhaps this can be an example that even in tough economic times, the beginnings of a transition to cleaner energy forms is possible.

http://www.nytimes.com/2012/11/24/business/energy-environment/24iht-ukenergy24.html?ref=energy-environment

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World Toilet Day: November 19

World Aid has created a powerful short film to highlight the difficulties facing many women who lack access to improved sanitation facilities (toilets). I don’t usually post activist items but with today being World Toilet Day and my own research focusing on water and sanitation, I am making an exception.

http://e-activist.com/ea-action/action?ea.client.id=1676&ea.campaign.id=16839

 

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Welfare Reform in India- Cash, with Strings

This article in the Economist discusses how current attempts in welfare reform in India are aimed at reducing waste and improving efficiency. With transferring money to many people in need who lack proper identification virtually impossible, welfare is given in the form of direct food or fuel subsidies. The argument over this kind of reform is incredibly complex, taking into account corruption in the government, how the cash transfers would be used, and the impact that removing subsidies would have on the energy markets and market as a whole. Regardless of how slowly the proposed stages of change take place, it is apparent that change of this kind must come after some initial changes in government structure.

http://www.economist.com/news/leaders/21565957-why-india-should-hand-out-cash-rather-fuel-and-food-needy-cash-strings

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Who’s Worried?

http://www.economist.com/news/finance-and-economics/21565978-some-worlds-stablest-economies-are-asian-time-worry-asias-great

 This article talks about the stable growth of Asian (predominantly South East Asian) economies that might be worrying some people in the West. I find this article amusing because the author said talked about the self-correcting market that does not exist in the East as it does in the West. I have never been so aware of it, but from my knowledge of Indonesia, I do see it being true. The government does not play puppet-master in the economy, but it does step in sometime to “fix” things here and there.

My grandfather, who has been involved in the Indonesian economy for as long as I’ve remembered, talked to me about this issue a few years ago. He spoke about how “Capitalism” is not a sustainable choice for the international market. I thought he was just being ridiculous because I thought I saw that statement as a very traditional one. Yet now I see it. Capitalism has proven itself in America: imbalanced economies and frightening job losses to compensate those who are “winners” in the economy. In Indonesia, we do see polarizing economic differences, but I feel that we see it less and less every time I notice it.

Is this a “capitalist vs. non-capitalist” issue, or is this change just one that the world is not quite ready to witness?

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