BLOG MASH-UP OF THE WEEK

Everyday the blogosphere offers an enormous amount of in-depth analysis on any imaginable topic. The world ofmacroeconomics and economic forecasting is no exception. To keep themselves updated on the latest information, our in-house team of economists scan the world wide web and gather what they consider the most interesting, appealing, informative or just curious blog posts from experts in the field of global economics. Here’s the list of the Top 4 posts from this week. Check it out!

  1. Vox LACEA – Eduardo Lora, Nora Lustig, Ugo Panizza, Maximo Rossi: How firms cope with crime and violence

    Editors of the Vox LACEA economics blog comment on a recent report published by the World Bank, which analyzes how firms deal with  the high economic opportunity costs of crime and violence in the region. According to the report, several factors are considered as causes of crime such as individual factors (exposure to violence or substance abuse); family and peer-related factors; community factors; and societal factors. Across the Latin American and Caribbean region, the drug trade is a key factor for crime and violence because it induces clashes between criminal networks and security forces, between rival gangs, and between the gangs and local communities. Specific cases are explored in this report: the city studied include Ciudad Juárez, Medellín, Mexico City, Rio de Janeiro, and Tijuana; the country-level studies include Jamaica, Nepal, and Rwanda. – Ricardo Aceves

  2. VOX – Andrés Rodríguez-Pose and Marko Stermšek: The economics of secession: Case of the former Yugoslavia

    Andrés Rodríguez-Pose and Marko Stermšek consider the issue how whether or not achieving independence in the modern era brings economic benefits to a newly formed country. The authors use the the case of the former Yugoslavia and their “research highlights that better economic trajectories are not linked to the mere fact of seceding but by how the process of secession took place.” –Carl Kelly

  3. Mish’s Global Economic Trend Analysis – Mike Shedlock: Output Gap Idiocy; Shaky Accounting EU and US Style

    Mike Shedlock takes a look at the Italian government’s accusation that the EU’s calculation of output gaps is innacurate. The Italian economy minister Pier Carlo Padoan claims that the EU’s measure of an output gap of 3.5% of GDP is wrong, and points to the OECD’s calculated 5.1% as the right figure. Padoan argues that this difference is very important because the EU gives more leeway to member states’ fiscal matters when they have greater output gaps. The blog author, however, thinks that Italy’s argument is ridiculous. Shedlock states that, “the idea that 5.1% in the hole is better than 3.5% in the hole is of course ludicrous. It’s even more insane to propose that one has a surplus at 5.1% in the hole but not at 3.5% in the hole.”  – Carl Kelly

  4. Mainly Macro – Simon Wren-Lewis: The UK feel good factor

    In this blog post, Simon Wren-Lewis gives arguments on why are most British still worse off than before the recession, although UK GDP growth has been performing good. First, population growth is one of the reasons of the increase in GDP since 2007. However, while the level of GDP in the recent quarters was well past its 2007 peak, the level of GDP per head is well below the peak. In addition, the way GDP is distributed between wages, profits and taxes explains part of the difference between total GDP and how prosperous consumers feel. The last argument that Simon mentions is the terms of trade factor. While the price of goods we buy overseas increases relative to the price of goods produced in the UK, the people feel poor. So, although GDP may be higher than before the recession, once you take in consideration the population growth, indirect taxes as well as the terms of trade, people end up significantly poorer. – Dirina Mançellari

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