Archive for August, 2013

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

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

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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

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How India got its funk

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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

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

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

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

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The battle for Egypt

Fly Title: 

Economic growth

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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