International trade is like bacon: you can never have too much of it. It is now almost 200 years since the British economist David Ricardo first wrote at length about the virtues of international trade. His Theory of Comparative Advantage explains why it is advantageous for a country to focus on making whatever goods or services it is best placed to make, and then to exchange those goods or services with other countries whose productive skills lie elsewhere. It has
Data released this morning pointed to easing manufacturing and mining activity in South Africa, and erased hopes of a sustained bounceback following better-than-expected second quarter GDP figures. Africa’s most industrialised economy has long faced a range of economic ills, from low educational attainment and persistently high unemployment through to world-leading levels of inequality. Worryingly, economic performance is getting worse. Since the current President, Jacob Zuma, was elected to office in 2009, GDP growth has averaged 1.7% versus a 4.4% average
Last week it was reported that a delegation of EU statisticians is due to visit Dublin within the next few weeks to run a fine-tooth comb through Ireland's latest set of GDP statistics. As readers of Thank Fathom it's Friday will no doubt recall, government statisticians last month revised their estimate of growth in 2015 from an already impressive 7.8%, to a literally incredible 26.3%. Such a substantial change was bound to raise a few eyebrows. But if there is any
Mexico's IPC stock index has been among the world's best performing equity indices this month, up around 4% in local currency and 7% in US dollars. The Mexican peso has also been one of the world's best performing currencies in August. A risk-on mood among investors, higher commodity prices and a rally in emerging market assets more generally have helped. But Mexico has outperformed most other emerging markets and the reason for this seems to be the diminishing prospects of
What determines a country's success at the Olympics? Demographics must play a part. The laws of probability tell us that people with the potential to be the best in the world, in any field of human endeavour, are more likely to be found in big countries than in small countries. But, from a selector's perspective, knowing that you have the natural talent is one thing - finding it, and nurturing it is something else entirely. That is why a country's
"Out along the edge Is always where I burn to be The further on the edge The hotter the intensity Highway to the danger zone Gonna take you right into the danger zone" Kenny Loggins, from the opening scenes of Top Gun, 1986 Yesterday, the Bank of England joined us, and many other organisations, in forecasting that UK growth next year would be somewhere between 0% and 1%. But as our chart shows, that is a dangerous place to be.
It may be a coincidence that the results of the EU banking stress tests are scheduled for publication as soon as the closing bell sounds at the New York Stock Exchange later today. Whether this timing was planned or not, at least it will give investors and EU decision makers ample time to decide how to react, or panic, before financial markets open on Monday morning. It may be too late to avert an Italian banking crisis whatever the results. Alas, non-performing
The Bank of England published this week a working paper that analysed the consequences of issuing so-called central bank digital currency (or CBDC). According to the authors, the macro-economic outcomes seem favourable to say the least – reductions in real interest rates, distortionary taxes and transactions costs could permanently raise the level of GDP by as much as 3%. Drawing parallels between CBDC and Bitcoin, some commentators have questioned whether the Old Lady has adopted the adage “If you can’t
While many of us in the UK have been struggling to understand the consequences of last month’s Brexit vote, our neighbours across the Irish Sea have seized the opportunity to release a rather staggering set of economic data. Ireland’s Central Statistical Office this week revised up its estimate of growth last year from an already impressive 7.8%, to a literally incredible 26.3%. Talk about rubbing salt into the wound! Readers will not be surprised to learn that last year’s growth
"I know what you're thinking about," said Tweedledum; "but it isn't so, nohow." "Contrariwise," continued Tweedledee, "if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic." From Lewis Carroll’s - Through the Looking-Glass Gove and Johnson, the Tweedledum and Tweedledee of British politics, sent shockwaves through Westminster yesterday by reversing roles within a couple of eventful hours. If that left you confused, you’re not alone. But markets were largely