The fiscal implications of the sharp decline in commodity prices are very large. The deterioration in the 2015 primary balance in commodity exporting countries is about 5 percentage points of GDP on average, with countries like Saudi Arabia and Venezuela experiencing a particularly sharp decline.
Last week, Republican presidential candidate Donald Trump released his plan for changing the tax code. Many of the reports on the plan commented on the growth assumption and pointed out that few, if any, economists took it seriously. As a practical matter, we have seen this story before.
Investors, traders, savers and homebuyers - young and old - were fixated on last week's Federal Reserve interest rate announcement, especially in the wake of recent market volatility.
Investors have lost faith in Brazil, and rightfully so. The currency has lost 36% of its value against the U.S. dollar this year, plunging nearly 7% in the last week alone. Yields on its bond issues are spiking, as investors demand higher and higher rates to loan Brazil or Brazilian companies money.
Last May, I mused on the possibility of a tech bubble and projected that the NASDAQ would plateau for the remainder of 2015. Midway through these expectations, let's calibrate my crystal ball...
Inflation won't happen in the near future because it's as much due to misguided government policies by the modern Austerians that have stopped eurozone growth by demanding draconian cuts in government spending and budget deficits that would create growth.
The U.S. economy has been slowly rebuilding itself for more than a decade, and the Federal Reserve has played an important role. Now, however, it is a virtual certainty that the interest rate will begin increasing before the end of the year, and perhaps even by the end of September.
Will those edgy portfolio investors stampede indiscriminately out of--and wreak havoc among--middle- and low-income countries if the Fed lifts interest rates this September, for the first time in almost a decade?
The Federal Reserve Board leadership has been stressing the virtue of "transparency" regarding the factors it is considering as it approached the first increase in interest rates since 2006, potentially at it's mid-September meeting.
Couple this with the disappointing jobs growth numbers from September 4, and it is not unreasonable to expect that there is still room to push towards the twin goals of maximum employment and price stability. A premature rate hike could run the risk of halting that process.
Jobs reports are often highly anticipated by investors, but the August jobs report held even greater significance than usual. Investors hoped for a clear signal that the Federal Reserve would be expected either to raise rates during their September meeting or put off a rate hike until at least December.
When did we all turn into a bunch of babies that need to be coddled, with our policy maker parents smoothing volatility and promising a world of full employment and a perfect 2.0 percent inflation rate? It's normal for economies to experience cycles, both expansions and recessions.
China's weight in the world economy has been rising and was made excruciatingly apparent by the turmoil in U.S. equities markets over the past few weeks. Much of current stock market anxiety was at least "assembled" in China.
We have had enough of those policies that favor markets and financial institutions to the detriment of the rest of the economy. The Federal Reserve has been waiting too long to correct the current abnormal situation. The IMF is wrong to encourage it to do so.
It is important that the public have a clear idea of what is at stake in the Fed's decisions on interest rates. While many politicians and policy experts are grappling with ways to try to lower the poverty rate, the Fed will be directly preventing people from seeing pay increases.
Advocates for higher interest rates point to an improving job market as a sign that America has come back from the recession. But many activists, economists, and community groups know that raising interest rates now would stymie the many communities, particularly those of color, that continue to face persistent unemployment, underemployment, and stagnant wages.