A College Kid, A Single Mom, And The Problem With The Poverty Line

A college student getting help from his parents may be below the poverty line. The mother who earns $23,000 a year is not.

» E-Mail This     » Add to Del.icio.us

via Economy http://www.npr.org/blogs/money/2013/08/27/214822459/a-college-kid-a-single-mom-and-the-problem-with-the-poverty-line?ft=1&f=1017

A College Kid, A Single Mom, And The Problem With The Poverty Line

A college student getting help from his parents may be below the poverty line. The mother who earns $23,000 a year is not.

» E-Mail This     » Add to Del.icio.us

via Economy http://www.npr.org/blogs/money/2013/08/26/214822459/a-college-kid-a-single-mom-and-the-problem-with-the-poverty-line?ft=1&f=1017

Recessions and public health: Body of research

UK Only Article: 
standard article

Issue: 

How India got its funk

Fly Title: 

Recessions and public health

Rubric: 

The impact of downturns on physical and mental health

EXAM results capture pupils’ achievements but not their enjoyment of learning. Life expectancy does not say anything about quality of life. Similarly, statistics on unemployment rates and wage levels do not tell the full story of recessions. Social scientists are increasingly interested in the effects of downturns on public health.
These effects are unclear. There is some evidence that physical health may actually improve in downturns. One paper by Christopher Ruhm, now of the University of Virginia, looking at American data from 1972 to 1991, suggests that a one-percentage-point increase in unemployment reduced mortality by 4.6 deaths per 100,000 people. “With shorter working hours, people spend more time at home with their families and may be less stressed from overwork,” suggests Stephen Bezruchka of the University of Washington.

But there is also evidence that big economic crises are correlated …

via Economic Crisis http://www.economist.com/news/finance-and-economics/21584020-impact-downturns-physical-and-mental-health-body-research?fsrc=rss

Business cycles: What does “above potential” mean?

IN A column at Vox Antonio Fatas and Ilian Mihov describe an interesting new paper of theirs which posits a third phase of the business cycle. Expansions and contractions we all know and love, but that two-way division leaves out important dynamics, they reckon. Better to describe cycles in terms of a recession, in which output falls well below trend, a recovery, in which output returns to trend, and then an expansion, in which the economy grows more or less at trend. It’s a neat approach which allows them, among other things, to isolate the cost of recessions by computing the aggregate GDP loss relative to trend. The cost is big; they peg the loss from the current cycle at $3.4 trillion and counting. Strikingly, about three-fourths of that cost has accumulated during the ongoing “recovery” phase of the cycle, during which output has been growing but remains below trend.Paul Krugman uses the piece to reflect on the nature of business cycles:I’m very much in sympathy with their underlying view about the asymmetry between booms and busts…Here’s how I’d put it: Fatas and Mihov have an Anna Karenina view of booms and busts, in which all happy economies are alike, but each unhappy economy is unhappy in – well, not exactly its own way, but certainly to its own extent. Business cycle peaks are always times when the economy is operating at capacity; troughs are times when the …

via Economic Crisis http://www.economist.com/blogs/freeexchange/2013/08/business-cycles?fsrc=rss

China’s economy: No hard landing

OUR correspondents discuss the health of China’s economy, how it might be restructured and why a financial crisis is unlikely 

via Economic Crisis http://www.economist.com/blogs/analects/2013/08/china-s-economy?fsrc=rss

Daily chart: Mixed fortunes

How economies have fared since their pre-recession peaksTHE prayed-for recovery in the euro area has finally come to pass. After a dismal 18 months in recession, GDP rose by 0.3% (an annualised rate of 1.1%) in the second quarter from its level in early 2013. The upturn was led by Germany, whose GDP grew by 0.7%. France outperformed expectations, with output up by 0.5%. The rate of decline in Italy and Spain slackened and there was a sharp rebound in Portugal, which has suffered a deep recession. Nonetheless, the pickup still leaves GDP across the euro area 0.7% lower than a year ago. Declines have been biggest in tiny Cyprus, where GDP is down by 5.2%, and in Greece, where it has fallen by 4.6%. And the record of the euro-zone economy since the peak reached before the global financial crisis is even more depressing. Output is still 3% lower; in America it is more than 4% higher. Among the big euro-zone economies only German GDP now exceeds its pre-crisis peak, by 2%. A recent European Central Bank survey forecast that GDP for the whole of 2013 would be 0.6% lower than in 2012, and that it would grow by only 0.9% in 2014. The end of the recession will give heart to European leaders but weak growth will still leave the euro area vulnerable to social and political discontent.

via Economic Crisis http://www.economist.com/blogs/graphicdetail/2013/08/daily-chart-10?fsrc=rss

Economic growth: A rickety rebound

UK Only Article: 
standard article

Issue: 

The battle for Egypt

Fly Title: 

Economic growth

Rubric: 

The global economy is gaining momentum. But only in America is the acceleration likely to last

THE dog days of August have often spelled trouble for the world economy. In 2011 America’s politicians flirted with default and the euro seemed to be heading for collapse. The summer of 2012 brought another bout of euro angst and depressing evidence that many emerging economies had stalled. But so far this season the good news has outweighed the bad.
After a year and a half of recession, the euro area’s economy has begun to grow again. Its GDP rose at an annualised rate of 1.1% in the second quarter (see article). Britain’s recovery has gathered pace. Evidence is mounting that America’s GDP grew faster in the second quarter than the initial estimate of 1.7%, and has accelerated since. Healthy retail sales, rising production orders and low jobless claims all suggest that growth could be around 2.5%. In China the main monthly indicators, from trade to industrial output, …

via Economic Crisis http://www.economist.com/news/leaders/21583686-global-economy-gaining-momentum-only-america-acceleration-likely-last?fsrc=rss

The economy: A bubble in pessimism

UK Only Article: 
standard article

Issue: 

The battle for Egypt

Fly Title: 

The economy

Rubric: 

China’s economy is inefficient, but it is not unstable

Location: 

HONG KONG

Main image: 

20130817_CND001_0.jpg

“JUST the other day we were afraid of the Chinese,” Paul Krugman recently wrote in the New York Times. “Now we’re afraid for them.” He is among a number of prominent commentators contemplating calamity in the world’s second-biggest economy. Three measures seem to encapsulate their fears. Economic growth has slowed to 7.5%, from its earlier double-digit pace. The investment rate remains ununsustainably high, at over 48% of GDP. Meanwhile, the debt ratio—ie, what China’s firms, households and government owe—has risen alarmingly, to 200% of GDP, by some estimates.

Concerns about the first number were assuaged a little this month, when China reported strong figures for trade and industrial production (which rose by 9.7% in the …

via Economic Crisis http://www.economist.com/news/china/21583691-chinas-economy-inefficient-it-not-unstable-bubble-pessimism?fsrc=rss

Euro-zone economies: Mirabile dictu

UK Only Article: 
standard article

Issue: 

The battle for Egypt

Fly Title: 

Euro-zone economies

Rubric: 

A recovery at last, but no revelation

THE prayed-for recovery in the euro area has finally come to pass. After a dismal 18 months in recession, euro-zone GDP rose by 0.3% (an annualised rate of 1.1%) in the second quarter from its level in early 2013. That outcome was a bit stronger than expected, although the outlook for growth remains weak.

Explore our interactive guide to Europe’s troubled economies

The upturn was led by Germany, whose GDP increased by 0.7%. France did surprisingly well, with output up by 0.5%. There was also some encouraging news from southern Europe. Output continued to fall in Italy and Spain but the rate of decline slackened to 0.2% and 0.1% respectively. And there was a sharp rebound in Portugal, which has suffered a deep recession: its GDP grew by 1.1%.

The pickup still leaves GDP across the euro area 0.7% lower than a year ago. The output declines since the second quarter of 2012 have been biggest in tiny Cyprus, where GDP is down by …

via Economic Crisis http://www.economist.com/news/finance-and-economics/21583650-recovery-last-no-revelation-mirabile-dictu?fsrc=rss

The euro-zone economy: The long road back

AT LONG last the second leg of the euro area’s double-dip recession seems to have come to an end. In the second quarter of this year, the euro zone grew by 0.3%, or a 1.2% annual pace. That marked the first rise in output since the third quarter of 2011. Olli Rehn, vice-president of the European Commission noted that “self-congratulatory statements suggesting ‘the crisis is over’ are not for today”, though he also mused that the figure “supports, in my view, the fundamentals of our crisis response”. Here is a bit of context—the path of real GDP for America and Britain since the fourth quarter of 2007:

And one should keep in mind that America’s economy is still operating with an estimated output gap, relative to potential, of about 5% of GDP.Still, growth is better than no growth. But there are many reasons to keep the corks in the champagne bottles for now. One is that euro-area expansion masks major internal divisions. Germany’s economy grew at a healthy clip in the second quarter, but the Greek, Italian, and Spanish economies are still stuck in recession. That is particularly worrying given that the periphery has lost the most economic ground over the past half decade; a Germany-powered recovery implies continued widening in living standards within the euro area.Once broad-based growth returns, the pace of the rebound will prove critical. The periphery has …

via Economic Crisis http://www.economist.com/blogs/freeexchange/2013/08/euro-zone-economy?fsrc=rss