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THE Swedish economy is, by all accounts, booming. Output, adjusted for inflation, has grown by 2.8% on average since 2009 and rose by a robust 3.2% last year. In April Swedish inflation nearly hit the target of 2% aimed at by the Riksbank, Sweden’s central bank. Yet the Riksbank has chosen to leave interest rates at an extraordinarily low level: below zero, in fact, at -0.50%. In addition, it is increasing stimulative asset purchases, known as quantitative easing (QE). What is the Riksbank up to?Sweden’s central bank is not alone in erring on the side of dovishness. Even as post-crisis doldrums give way to steady growth, central banks worldwide tend to remain cautious, because often faster growth has not yet led to high inflation. American economic growth has been chirpy for years, and unemployment in America has just fallen to a 16-year low of 4.3%, yet the Federal Reserve’s target range is still only at 0.75-1%. The Fed is tightening—it has ended its own QE programme and begun lifting rates—but at a slower pace than it aimed to achieve two years ago. In the euro area, the European Central Bank (ECB) is still buying bonds by the barrel in an effort to keep inflation moving towards its target. Small, open economies face the additional complication that capital flows from abroad can …

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UK politicsRead more British election coverageTHERE is plenty of evidence that incumbent governments do better in elections when the economy is strong. In the last year or so, the British economy has not looked too bad. In 2016 average earnings rose by 2.2%, the joint-highest growth seen since the economic downturn in 2008. Unemployment is around 4.5% and the employment rate is at its highest since records began. Theresa May will reap the rewards of decent growth at the election—just as things start to turn sour. Economists, of course, had believed at the time of the Brexit referendum last June that a vote to Leave would push the economy into recession almost immediately. In the event, they were proved spectacularly wrong. Consumer confidence was barely affected: those who voted Leave had little reason to feel concerned about the future (after all, they had got what they wanted), whereas for Remain voters, Brexit seems vague and a long way off. GDP grew by 0.5% in the third quarter of 2016 and 0.7% in the fourth, leaving Britain with the fastest growth of any G7 economy for 2016 as a whole. Yet something related to the Brexit referendum—the tumble in the value of sterling—is now causing the economy to slow. The British economy is highly dependent on consumer spending. With …

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Volunteers distribute free food at the mobile pantry in Hurley, Va. Poverty in the coal-mining region is 29 percent, twice the national average. Unemployment is also high, and younger families are moving out.

Pantries in southwest Virginia — where poverty is rampant and coal jobs are vanishing — will take whatever they can get to stock bare shelves. Some also offer help with health care and job training.

(Image credit: Pam Fessler/NPR)

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Women who say they have not been fed for five days line up for food in Aug. 2016 at the Bakassi camp in Maiduguri, Nigeria.

Oxfam calls the level of inequality in the country “obscene.” The disparity is only growing, the charity says, in light of what it describes as the misallocation of the country’s resources.

(Image credit: Sunday Alamba/AP)

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STEPHEN POLOZ, the governor of the Bank of Canada, has been warning Canadians about piling up debt to buy overpriced houses since he took office four years ago. At first he used bankerly language, pointing to the risk of a “disorderly unwinding of household-sector imbalances”. Lately, with household debt at record levels and house prices in Toronto and Vancouver continuing to rise, he has started to speak clearly. “It’s time to remind folks that prices of houses can go down as well as up,” he said on April 12th.
Various levels of government have been trying to restrain house prices (which Mr Poloz has encouraged to rise by keeping interest rates low). The federal government has tightened conditions for the mortgage-insurance policies it sells to lenders, which cover more than half of mortgages by value. Last year the government of British Columbia, Vancouver’s province, slapped a tax of 15% on foreign buyers. Ontario, whose capital is …

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The data economy demands a new approach to antitrust

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LONDON AND NEW YORK

THOUSANDS of second-hand cars, ranging from dented clunkers to Bentleys, glisten under the evening floodlights at Major World, a car dealership in Queens, a borough of New York. “Business has been good,” says a crisply-dressed salesman, scurrying between prospective customers. Almost everyone who wants to buy a car at Major World can get approved for a loan, he explains, regardless of their credit score, or lack of one: when banks turn buyers down, the dealership offers them its own in-house financing.
In both America and Britain new-car sales …

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Cape Fear

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TEN years ago this month investors were pretty confident. True, there were signs that problems in the American housing market would mean trouble for mortgage lenders. But most people agreed with Ben Bernanke, the Federal Reserve chairman, that “the impact on the broader economy…seems likely to be contained.” The IMF had just reported that “overall risks to the outlook seem less threatening than six months ago.”
That was reflected in market valuations. In May 2007 the cyclically-adjusted price-earnings ratio (CAPE), a measure that averages profits over ten years, was 27.6 for American equities (see chart). That ratio turned out to be the peak for the cycle. As the …

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