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Coronavirus: A timeline of how the deadly COVID-19 outbreak is evolving

8:23 am

Biden unveils Covid relief plan to stimulate US economy – leading macroeconomic influencers

US President-elect Joe Biden unveiled bold investments as part of the coronavirus relief package to combat the virus surges across the nation. The virus has killed more than 384,000 American people, and created an unemployment backlash that has hammered the economy.

Gregory Daco

Gregory Daco, an economist, shared an article on Biden’s $1.9 trillion Covid relief plan which calls for unemployment support, stimulus cheques, and more. The coronavirus rescue package titled the American Rescue Plan has been unveiled to provide resilience to households and businesses till the vaccine is widely distributed across the country.

Some plans the President-elect has called for include direct payments of $1,400 to be provided to most citizens, bringing the total relief to $2,000, allocation of $50bn toward Covid-19 testing, and $20bn towards a national vaccine programme in collaboration with states, tribes, and territories, among others..

According to Biden officials, this is first of the two spending initiatives by Biden which is sought to be implemented during the first two months of his presidency. The second bill is expected in February and will focus on long-term goals such as climate change, job creation, reforming infrastructure, and combating racial inequalities.

Konstantina Beleli

Konstantina Beleli, an economist, re-tweeted on how US unemployment claims have hit the highest levels since the start of the coronavirus pandemic in March. According to the Labour Department, US weekly jobless claims spiked to 965,000 last week, amid a slowdown in job hiring due to pandemic restrictions, and the highest levels ever reported since mid-August.

Economists claim that this is a sign the economy is still stuttering, in part because of restrictions in the hospitality and the restaurant sectors across states. The overall number of Americans receiving some kind of benefits spelled from 19 to about 18.5 million that included those who were covered under the pandemic emergency programme that was extended in an eleventh hour deal in December.

The Joe Biden administration has called upon an economic relief plan that focuses on stimulus cheques, the infusion of more cash to boost vaccinations, and efforts to re-open schools. Biden has also pledged to raise the minimum wage to $15 per hour and hopes to tackle taxes too. Consequently, he urged the big corporations and the wealthy to begin to pay.

Approximately, 140,000 jobs were lost in the US in December alone.

Richard Murphy

Richard Murphy, an economic justice campaigner, shared an article on a new department of education (DfE) guidance that has set the government in a different course to address disadvantaged children going hungry during the February half-term holiday. Murphy believes that this could be a distraction from Covid deaths.

According to the fresh guidance, schools have been advised not to provide lunch parcels or vouchers to children during the half term, as the government has already extended support to families and children outside the term time through the Covid winter grant scheme.

An earlier intervention by Marcus Rashford, the footballer and anti-poverty campaigner in November prompted the government to allocate $232.5m as part of a winter package.

However, the Local Government Association (LGA) stated that the winter grant was never meant to replace the free school meal provision during the school holidays and was part of the government’s efforts to cushion low-income families during the nationwide lockdown. The LGA further urged ministers to assist in providing these food vouchers to children during the half term.

7:31 am

Brazilian data reports modest efficacy for CoronaVac – leading macroeconomic influencers

Economists believe that Brazil needs better communicators about the efficacy of the vaccine trials being conducted for coronavirus in the country. Delayed announcement of results and inability to compare results with other trials or vaccines have led to the latest setback for vaccination efforts.

Pedro Nicolaci da Costa

Pedro Nicolaci da Costa, a Federal Reserve and economy watcher at Market News International, re-tweeted on Brazilian data reporting a modest 50.4% efficacy for China’s CoronaVac vaccine in preventing the symptomatic infections of Covid-19 in a clinical trial. The figure, as a result, did not qualify for regulatory approval and was below the rate announced.

This came as a disappointment for Brazil, as CoronaVac was one of the two vaccines lined up for immunisation during the second wave of the Covid-19 outbreak in the country. Several scientists had protested against the partial data released by the Butantan biomedical centre just days ago, with President Jair Bolsonaro now criticising and questioning the origins of the coronavirus vaccine.

Chinese vaccine trials across the world have been raising significant concerns about not being subject to the same public scrutiny as the US and European alternatives. Brazil’s national immunisation programme relies on CoronaVac and ChAdOx1 nCoV-2019 vaccine developed by Oxford University and AstraZeneca Plc, neither of which having received regulatory approval in the country.

However, Ricardo Palacios, medical director for clinical research at Butantan, confirmed that none of the volunteers who had been inoculated with CoronaVac had to be hospitalised with Covid symptoms.

Nouriel Roubini

Nouriel Roubini, an economist, shared an article on a fragile economic recovery in 2021 despite a flurry of promising coronavirus vaccines developed in 2020. Roubini stated that defeating the virus still remains a monumental task, and the wounds inflicted by the pandemic will take time to heal.

He further explains that while white-collar workers are sustained with the help of the existing financial reserves, the unemployed or partially employed workers who are surviving on meagre wages are growing poorer by the day. The pandemic is therefore sowing the seeds of more social unrest in 2021.

Despite financial markets reporting new highs in the end of 2020, and central banks across advanced economies lowering their policy rates, the gap between Wall Street and Main Street has widened. In addition, Covid-19 has accelerated the concentration of stock market wealth in the US, the article detailed.

Jonathan Portes

Jonathan Portes, a professor of economics and public policy at the School of Politics and Economics of King’s College, London, shared an article on the rights and wrongs he has learnt about the Covid-19 lockdowns, and how the economy could bounce back quickly.

He emphasises on two key arguments in his article, one that there is no direct trade-off between health and economies. Therefore, the argument that the economic damage caused by lockdowns would cost the country more than Covid-19 itself, was untrue.

The second argument he made is related to worrying less about short-term economic impacts than about long-term consequences. Therefore, restrictions or lockdowns could impact the gross domestic product (GDP) in the short run but did not have to necessarily damage the economic and social fabric of the country in the long run.

Portes also highlighted there was no evidence to support the uptick of suicides or deteriorating mental health during the lockdowns in the UK or elsewhere. However, he also added that there was no serious debate on whether lockdowns worked or helped in reducing the spread of the virus.

7:06 am

US witnesses a rapid decline in labour force participation – leading macroeconomic influencers

Economists believe that the rapid fall in labour force participation since the start of the coronavirus pandemic in February, will further increase the challenge of future labour market recovery in the US.

Claudia Sahm

Claudia Sahm, an economist, re-tweeted about the margins of slack in the US labour market during the coronavirus pandemic. According to the US Bureau of Labour Statistics (BLS), the decline in labour force participation since February is now a bigger factor to consider than the rise in temporary or non-permanent unemployment.

Although reports suggested that the US economy added 661,000 jobs in September, the number of workers on temporary layoffs declined by 1.5 million, but the number of workers unemployed for other reasons rose. In addition, approximately 3.8 million unemployed people since February reported being on temporary layoffs and would consider returning to work only after the pandemic and the lockdowns.

Reports also found that the temporary layoffs increased to 4.6 million in September, much higher than in February since the start of the Covid-19 crisis. Economists also remain apprehensive of how many temporarily laid off workers will return to their employers and when they may do so.

Linda Nazareth

Linda Nazareth, senior fellow for economics and population change at the Macdonald Laurier Institute, shared an article on the challenges and uncertainties around self-employed workers getting vaccinated in the US. For instance, janitors, nurses, midwives, and others who are self-employed in jobs that expose them to the SARs-CoV-2 infection, are looking for answers as to when they will be vaccinated, the article noted.

Most of these workers remain worried about the risk of exposure, as they have been interacting with numerous people on a daily basis.

The disparities are so wide that even state-licenced midwives have not received the Covid-19 vaccine despite frontline workers and staff being prioritised for inoculations before all other citizens.

The problem arises from the fact that these midwives are independent practitioners and are therefore neglected from the first supplies of the vaccines being prioritised for staff in hospitals and healthcare systems.

According to a study by UC Berkeley researchers, independent contractors and self-employed workers constituted 12% of California’s entire workforce. Nurses, physical therapists, and physicians who aren’t directly associated with hospitals, have posted questions online.

Edward Miguel

Edward Miguel, Oxfam Professor of Environmental and Resource Economics at the University of California, shared a video by Rachel Glennerster, a development economist, at the Zurich conference on public finance in developing countries. Glennerster shares her views on the economic consequences of Covid-19 in low- and middle-income countries.

In her opinion, there is high uncertainty around the scale of underreported deaths caused by Covid-19, especially in countries such as India. With regards to regional deaths per millions, Africa and Asia reported far fewer deaths. She also added that the trajectories of the pandemic varied by regions based on various factors such as data quality, demographic structure, comorbidities, policies, and the geography and temperature conditions.

Glennerster further added that low- and middle-income countries weren’t at a good place when the Covid-related economic shocks hit. The banking sector was in a difficult situation to weather the shocks and public finance never quite recovered with each successive shock. This led to increasing levels of debt or debt distress among these countries.

6:46 am

Covid-19 to hold up human capital development – leading macroeconomic influencers

Global economic output is expected to expand by four percent in 2021 but will still remain more than five percent below pre-pandemic trends.

Harry A Patrinos

Harry A Patrinos, an education economist and manager at the World Bank, discusses how the Covid-19 is most likely to hold up human capital development. He shared a World Bank Group Flagship report that highlights how the pandemic will lead to longer unemployment spells, higher rates of school dropouts, increased income disparities, reduced learning-adjusted years of education, and lower future earnings.

The pandemic has forced governments and firms to adapt to a changing economic landscape, where protecting the poor has become imperative, while at the same time having to build effective policies to allow labour, capital, and innovation for a greener and stronger post-Covid recovery.

The World Bank report also highlighted how investments have collapsed in many emerging and developing economies in 2020 due to the virus crisis but will eventually resume in 2021. However, despite digital technology advancements, the increase will not be enough to compensate for the large 2020 decline, experts added.

Economists believe that mounting climate and environmental challenges will also affect policy changes by governments in 2021. Consequently, countries will embark on a greener, smarter, and equitable recovery path by increasing investments in green projects, phasing out fossil fuel subsidies, and offering incentives for sustainable technologies that will, in turn, create more jobs, reduce carbon emissions, and help tackle climate change problems.

Simon Wren-Lewis

Simon Wren-Lewis, an economist, tweeted about thoughts around handling Covid-19 by governments being messed up. He shared an article on why the UK’s Covid crisis should be personal for many, highlighting the major errors the government has made and none inevitable.

For instance, around 16 million of the population in the UK, that is, a quarter of the nation, are people aged over 60 years. Consequently, they are one of the largest sections of the population to be affected by the pandemic, as they come with added co-morbidities. Therefore, whether the government handled or mishandled the pandemic situation should be certainly personal to them, the article noted.

The National Health Service (NHS) is currently at breaking point, with overwhelmed hospitals and tired frontline workers. The article notes that one of the biggest errors of the government was not to implement restrictions on time and to relax them when not required. As a result, even though people could be blamed for not following the rules, the government should have planned around how people actually behaved rather than how they should behave.

Right from allowing cases to rise since the start of the pandemic, to getting them back down, and implementing sound test and tracing systems, the central government left the local government health teams to tackle tracing while wasting huge amounts of money on other measures, the article detailed.

Robin Brooks

Robin Brooks, chief economist at the Institute of International Finance (IIF), shared an infographic on employment-population ratios for prime-age. The infographic revealed that women were doing better than men during the Covid-19 recession in the US.

Data further found the prime-age employment for women in the US to be -4.1 percentage points below December 2019 compared to -4.2 percentage points for prime-age men (black). Additionally, employment for prime-age women doubled the pace of male employment during the fourth quarter of 2020.

8:02 am

Rwanda emerges as world leader in the fight against Covid-19 – leading macroeconomic influencers

Economists believe that despite poor healthcare systems marked by lack of ventilators, intensive care unit beds, and funds, Rwanda has emerged as a clear winner in the fight against Covid-19, reporting low mortalities and virus spread through community participation, equity, trust and patient centrism.

Steve Keen

Steve Keen, an economist and author, shared a Project Syndicate article on Rwanda has set a shining example of how to fight the coronavirus pandemic and safeguard public health as against other advanced economies who have been struggling to battle the virus spread and associated morbidities.

The article notes how low and technologically less advanced economies like Africa have not only survived the pandemic but provide lessons on how to manage crises in the future. Despite weak health systems and warnings, these countries have been resilient in their fight against the coronavirus pandemic.

Rwanda rebuilt its healthcare system after the 1994 genocide, and just 26 years later, has emerged as a world leader in responding to the pandemic. For instance, Covid-19 death tolls in the US exceeded 330,000 out of a population of 330 million, while Rwanda reported just 62 deaths amongst a population of 12.3 million.

Adam Tooze

Adam Tooze, director of the European Institute, shared an article on the Peruvian government inking a deal with pharmaceutical company Sinopahrm, to supply one million doses of the Covid-19 vaccine to the country this month. Peru has been working with the company on its phase 3 trials, with Peru’s National Institute of Health overseeing the procurement and 11,000 volunteers already vaccinated since the start of the trials in September.

Francisco Sagasti, the Peruvian President, stated that the phase 3 trials conducted in the country were crucial and made it better to avail the coronavirus vaccine and verify its effectiveness among the population.

The Sinopahrm vaccine trials are currently being carried out at the Cayetano Heredia Peruvian University and the National University of San Marcos. According to reports, Peru has reported over 1 million Covid-19 cases and over 37,000 deaths.

Howard Archer

Howard Archer, chief economic advisor to the EY ITEM Club, shared an article on how around 4,000 financial firms were at a risk of collapsing due to the coronavirus pandemic, according to the Financial Conduct Authority (FCA). The UK regulator surveyed 23,000 financial firms last year to check their resilience during the coronavirus pandemic and found small and medium-sized firms to be the most vulnerable.

Sheldon Mills, the FCA’s executive director of consumers and competition, further stated that these and approximately 30% had the potential to cause damage in case of heightened risks of failure.

The survey also reported a drop in liquid assets such as cash among payments and electronic money, insurance intermediaries and brokers, and investment management firms, which is required during a downturn.

The FCA, however, cautioned interpreting the survey’s results, as it was conducted only among those financial firms that are regulated by the FCA. Additionally, the survey took place before the government’s extension of the furlough schemes, the announcement of new restrictions and vaccine developments, the article noted.

8:41 am

Rising unemployment rates likely to cause violent unrest in the US – leading macroeconomic influencers

Economists believe that the rising unemployment rates in the US is likely to lead to civil unrest, violent protests, and political and economic disputes. They believe that analysing trends of past crises with current conditions can help leaders prepare for future uncertainties.

Jason Schenker

Jason Schenker, an economist and chairman of The Futurist Institute, shared an article on how the economics of the stomach is a real thing. In a LinkedIn post, Schenker explains how 20 million people in the US still remain without jobs because of the coronavirus pandemic, which is most likely to result in some of the most belligerent outcomes such as political upheaval, violent unrest, and uncertainty.

Schenker examines the revolts and revolutions of the past, the impact of Covid-19 in 2020 on the job market and the economy, and futurist scenarios in his book The Economics of Revolt and Revolution. He states that the labour market takes a long time to recover from negative economic shocks, even when the recession ends.

Despite financial markets doing well during a crisis like the current pandemic, it is not the economy and the economy is not the labour market, which takes even longer to recuperate, Schenker adds. Therefore, analysing historic trends and the current data is important for crafting future scenarios and preparedness for leaders.

Prof. Steve Hanke

Prof. Steve Hanke, an economist at the John Hopkins University, shared an article on how Brazil has been able to achieve a trade surplus of $51bn in 2020, a 6% increase from the previous year because the coronavirus pandemic hit imports more than its exports.

The Economic Ministry further revealed Brazil to have exported goods worth $209.9bn in 2020, a decline from the previous year’s exports of worth $225.4bn. Additionally, imports fell from $177.3bn in 2019 to $158.9bn in 2020.

Brazil reported a 7% increase in exports to Asia that amounted to $99.2bn, almost half of the country’s total exports. However, its exports to North and South America slumped by one-fifth each to $29.5bn and $22.7bn respectively, the article detailed.

The Economy Ministry is also expecting a $53bn trade surplus next year.

Charles Kenny

Charles Kenny, senior fellow and the director of technology and development at the Centre for Global Development, shared an article on the Thai Shippers’ Council remaining upbeat about export recovery this year despite a rise in Covid-19 infections in the country.

Nationwide lockdowns have created a labour shortage in farm and agricultural industries such as the fisheries and food processing industries which rely heavily on migrant workers. However, despite the migrant crisis, the Council expect exports to rebound to 3-4% growth this year, driven primarily by the arrival of Covid-19 vaccines, the speedy economic recovery of China, and the Regional Comprehensive Economic Partnership pact.

Chairwoman Ghanyapad Tantipipatpong stated that the Council has also requested the government to provide the necessary aid to manufactures amid the rise in Covid-19 infections. These include state service fee and utility fee reduction and the extension of soft loan schemes in the next two months.

7:00 am

Lawmakers push billionaires to pay as New York faces Covid-caused financial crunch – leading macroeconomic influencers

While unemployment and food lines grew during the pandemic, New York billionaires saw their wealth increase by $77bn to a total of $600bn.

Justin Hendrix

Justin Hendrix, cofounder and CEO of Tech Policy Press, a non-profit media venture concerned with the intersection of technology and democracy, re-tweeted an article on a group of lawyers and advocates protesting for billionaires and the wealthy to pay higher taxes in the wake of New York facing a Covid-caused financial crisis.

Legislators and grassroots organisations rallied outside the Gov. Cuomo’s Manhattan office, an Invest In Our New York Campaign initiative, to lift the state out of the financial crisis caused by the growing pandemic by closing the loopholes enjoyed by wealthy New Yorkers and raising revenue through updating the tax code.

The progressive leaders also called out the passage for the Invest in Our New York Act, a legislative package that will support the state in its economic recovery, reduce budget deficits, and enable in re-building New York with at least $50bn in revenue. The package will push six bills to create a tax system where the wealthy will pay higher taxes and will also apply new levies on income earned from stocks.

Konstantina Beleli

Konstantina Beleli, an economist, re-tweeted about how the Labour leader Sir Keir Starmer called for a massive, immediate, and round-the-clock effort to vaccinate the public in a TV address. He challenged UK Prime Minister Boris Johnson to ensure that the UK is the first country in the world to vaccinate its entire population against the coronavirus disease.

As England entered into its third phase of the lockdown, Starmer demanded a new contract between the government and the UK citizens that while people stayed home, the government should be able to deliver the vaccines.

Aiming to be the first country in the world to have its entire population vaccinated, the Labour leader stated that millions of vaccines would be arriving in every village, town, street, and at every general practitioner (GP) surgery by the end of the month.

Reports suggest that approximately 1.3 million people across the UK have received one dose of the Covid-19 vaccine, among which 23% of those are aged above 80 years.

Catherine Swift

Catherine Swift, an economist, re-tweeted an article comparing Canada with other Organisation for Economic Co-operation and Development (OECD) countries on Covid deaths and gross domestic product (GDP) change. The article highlighted that the country was not doing as well as expected when compared to other countries.

The fight against Covid-19 was conducted against several rounds to understand the impact of the health crisis in high-income advanced economies. Data revealed that by the end of the third round, that is, between January and September 2020, Canada reported 246 deaths per million with a GDP change of -4.6%.

The report also found that nine countries including Australia, Denmark, Austria, Germany, South Korea, Finland, New Zealand, Switzerland, and Norway had fared better than Canada in fighting the pandemic after the three rounds, reporting a smaller decline in GDP and lower Covid deaths.

Economists are further evaluating a fourth round to compare the performance of countries in their battle against the Covid-19 crisis. Experts believe that countries have initially failed in their border control, mass testing, restrictions, and contract testing strategies to curb cases and deaths, and are now having to impose severe lockdowns while at the same time having to provide monetary and fiscal support to fight the virus spread.

7:11 am

US experiences alarming rise in home prices amid Covid – leading macroeconomic influencers

Economists believe that the coronavirus pandemic is changing the usual trends on home prices across the US. Smaller metropolitan markets such as Kansas City, Indianapolis, Austin, Memphis, and others, are experiencing strong price gains as Covid pushes people out of some of the largely occupied cities on the US coasts.

Gregory Daco

Gregory Daco, chief US economist at Oxford Economics, re-tweeted about home prices rising faster in the middle of the US as the coronavirus pandemic forces people out of the large cities on the coasts. Historically, these cities have witnessed a sharp rise in property prices due to leaner supply and high demand. However, this is not the case now say economists, who point at smaller metropolitan markets such as Indianapolis, Cincinnati, Cleveland, Kansas City, Memphis, Pittsburgh, Austin, Texas, Idaho, and Boise to be experiencing the strongest price gains.

Reports have suggested a remarkable rise in home prices of about 8.4% in October 2020 compared to last year, and a 7% up since September 2020 which is being considered as the largest monthly increase in a decade.

According to the Federal Housing Finance Agency, home prices in the smaller cities have now increased by 10% compared to the previous year, the article noted. These cities have been known to be affordable, and with more inventory of homes available for sale. However, the sudden strong price gains in these smaller markets is indicative of the prevalence of remote working trends and how people are making the move from more expensive markets to affordable markets due to the pandemic.

Marcin Piatkowski

Marcin Piatkowski, an economist, re-tweeted an article on how the Organisation for Economic Co-operation and Development (OECD) warned governments on re-thinking constraints on public spending. According to Laurence Boone, chief economist at OECD, fresh fiscal austerity risks public backlash after the coronavirus crisis, and that the mistakes of 2010-2011 should be avoided.

She also calls for international locations to achieve long-term sustainable goals rather than resorting to short-term targets for public deficits and debt, the article noted. Consequently, Boone emphasised the need for governments to continue to provide fiscal coverage to induce public spending and decrease taxes, in order to help revive economies and overcome unemployment trends as the coronavirus pandemic eases.

Economists believe that this could be a fundamental shift for Europe, where European Union (EU) treaties are driving international locations to cut debt to 60% of the gross home product, whilst in the UK, the federal government has pledged to reduce the debt burden, the article highlighted.

John Cassidy

John Cassidy, a writer at The New Yorker, shared an article on Chicago Federal Reserve President Charles Evans’ views on a long accommodative monetary policy. According to Evans, even though the vaccines may help in curbing the ongoing coronavirus pandemic to some extent in 2021, the US central bank will still have to adopt a long accommodative monetary policy.

Evans further stated the need for economists to be equipped for a period of low interest rates and the expansion of the nation’s balance sheet, to achieve the primary goals of full employment and stable prices. However, reports suggested that the US economy was far from achieving either with a 6.7% unemployment rate in November 2020 and inflation lingering below 2% goal for years now, the article noted.

He also convinced markets of a healthier recovery from the pandemic, with Fed asset purchases expected to continue and no further tightening of the monetary policy. This could support both, a strong job market and a sound inflation rate, the article detailed.

7:25 am

Strict measures to control the spread of Covid-19 the best economic policy – leading macroeconomic influencers

Experts and analysts remain divided between Covid-19 lockdowns and its impact on the economy. While countries across the world adopted different strategies with varying levels of success, an effective strategy to control the spread of coronavirus appears to be the best strategy, macroeconomic influencers share their views on the Covid-19 impact.

Angella MacEwen

Angella MacEwen, economist at CUPE National, shared an article on how Canada handled the Covid-19 pandemic compared to other countries. During the initial stages of the pandemic, Canada performed poorly as the government and public health officials were unprepared. Between April and June the government was able to control coronavirus infections by imposing restrictions and lockdowns, but the country’s GDP shrunk by 13.4%.

Several countries followed a similar strategy of imposing lockdowns and restrictions during the period. The article noted that those countries that imposed strict restrictions during the initial stages kept the deaths per million low but also had a low decline in GDP. The approach to handling the pandemic was considered as a trade-off between health and the economy by several experts. The article noted that this is not the case and that an aggressive action to control the spread of Covid-19 is the best economic policy.

Justin Hendrix

Justin Hendrix, co-founder and CEO of Tech Policy Press, shared an article on the chaos surrounding the administration of Covid-19 vaccine in the US. Despite more than 13 million doses being dispatched, only 4.2 million have been delivered to frontline health-care workers and senior citizens.

Elderly people have been forced to wait in long queues as confusion prevailed over administration of the vaccine. Although the development of the vaccine was handled by the government, administration was passed onto states without taking into consideration the support and funds they need.

Overworked and underfunded public health workers in states are struggling to disburse the vaccine. The article noted that the policies adopted by the former President Ronald Reagan was the primary cause for the current situation. The impact of the budget cuts implemented by Reagan weakened the country’s public health infrastructure and has further worsened during the current pandemic, the article added.

Stephany Griffith-Jones

Stephany Griffith-Jones, an economist specialising on financial crises, shared an article on the views expressed by Labour leader Sir Keir Starmer on the need to implement another lockdown in the UK as the virus is going out of control. Starmer added that lockdowns should be the first step to controlling the virus.

The daily new cases in the UK have exceeded 50,000 even as Prime Minister Boris Johnson indicated towards another lockdown in the next few weeks. Starmer noted that the lockdown should be implemented immediately, and a targeted lockdown of most affected areas should continue to control the virus.

Guntram Wolff

Guntram Wolff, Economist and Director of Bruegel, a think tank, tweeted on how experts are suggesting that vaccination will lead to herd immunity, but evidence is lacking to support this claim. He shared the US Food and Drug Administration’s (FDA) briefing document on Pfizer and BioNTech’s vaccine.

The document states that data is limited regarding the effectiveness of the vaccine against transmission of the SARS-CoV-2 virus from individuals who are infected despite vaccination. Additional information from clinical trials and vaccine use is needed to ascertain whether the vaccine is effective in preventing transmission particularly from individuals with asymptomatic infection, the document added.

9:13 am

UK extends Covid job subsidy scheme until end of April – leading macroeconomic influencers

Economists believe that UK’s late announcement of previous extensions to the loan guarantee and job retention schemes have caused more people to lose their jobs. The Bank of England estimates Britain’s economy to have shrunk by 11% this year, the biggest fall ever.

Howard Archer

Howard Archer, chief economic advisor to the EY ITEM Club, a UK forecasting group, shared an article on the British finance minister Rishi Sunak’s announcement of extending the government’s coronavirus job subsidy scheme until the end of April. According to the minister, businesses will be able to procure Covid loans till the end of March 2021.

Sunak made the announcement as part of the long-term plans laid out in March, as he aims to cut down on public borrowings earmarked as $540bn. The UK has spent approximately $63bn to support nearly 10 million jobs since the start of the pandemic. It has also given banks guarantees on $91bn of lending to businesses who were losing their income due to the coronavirus crisis, the article detailed.

The loan guarantee scheme was due to end on January 31, while the job retention programme was due to end on March 31. Sunak has been heavily criticised for not announcing previous extensions on time, as some employers already laid off their staff.

David Wessel

David Wessel, a journalist and director of the Hutchins Centre on Fiscal and Monetary Policy, shared an article on how the Republican Party of the US wants to limit Federal emergency lending programmes as part of the year end Covid relief bill. Talks on the $900bn coronavirus could trickle onto the weekend, the article noted.

One of the most worrisome issues being discussed by the White House and Congressional leaders is how much power should rest with the Federal Reserve and what should be the structure of the new round of stimulus checks, the article detailed.

Economists believe that lawmakers should be able to pass at least a makeshift spending bill by Friday to avoid a government shutdown on Saturday, after which, they could continue negotiating the stimulus bill over the weekend.

One of the most contentious issues is to design the eligibility for the stimulus checks, and also over the Republicans demanding limits on the Federal Reserve and Treasury Department’s emergency lending programmes as part of the Covid relief bill. On the other hand, Democrats believe that such restrictions will coerce the ability of the new Biden administration to stabilise the economy during a prolonged downturn, the article highlighted.

Konstantina Beleli

Konstantina Beleli, an economist, shared an article on how most economists have forecasted the US labour market to cool off until the Covid vaccines are distributed. Jobless claims rose to 885,000 with layoffs remaining high in the previous week, indicative that the economy was entering a winter slowdown due to a rise in Covid infections and tighter restrictions on business activities, the article detailed.

Economists also found job claims to have dramatically fallen from a peak high of approximately 7 million in March, but to be gradually increasing as per the four-week moving average. However, weekly numbers were observed to be volatile around holidays and seasonal adjustments.

Many economists expect the labour market to cool until the distribution of vaccines, which will cause a spurt in business activities and job hiring in the second quarter of 2021. Although job claims declined in many US states last week, they continued to rise in some populous states such as California and Illinois, which are currently witnessing a rise in Covid cases and tighter restrictions, the article noted.

8:11 am

Zimbabwe children malnourished as Covid crisis deepens – leading macroeconomic influencers

Economists believe that food shortages and lockdowns have led to an acute rise in malnutrition cases among children in Zimbabwe. Data reveals that one in three children in the country are malnourished amid a deepening health crisis.

Prof. Steve Hanke

Prof. Steve Hanke, an applied economist at the John Hopkins University, shared an article on one in three children in Zimbabwe suffering from malnourishment due to food shortages and economic insecurity of lockdowns. In his views, what is making the scenario worse is the unstoppable Covid-19 disease and inflation, which is raging at 379.23% per year.

According to a Zimbabwe Vulnerability Assessment (ZimVac) report the proportion of children receiving the minimum acceptable diet necessary for growth and development fell to 2.1% in 2020 from 6.9% in 2019. Matabeleland, a region located in the south-west of the country, reported the highest rates of global acute malnutrition, with approximately 74,267 children aged five years and below going hungry and with an estimated 38,425 suffering from acute malnutrition.

Breastfeeding mothers are unable to feed themselves or their children due to prevailing drought conditions and coronavirus lockdowns, the article noted. Most of them are surviving on one meal per day, supplemented by a sorghum drink called maheu.

ZimVac has expressed concerns over infant and child malnutrition, with only 19% of the women in their childbearing age having met the minimum nutritional limit in 2020, compared to 43% in 2019. Humanitarian agencies suggest that these factors have to led to high maternal and child mortality rates in the country.

Claudia Sahm

Claudia Sahm, an economist, shared her views on the need for the long-term unemployed to get extended support and benefits from the government till the end of next year. In her views, the pandemic is here to stay and will last until another year. She calls out to the Congress to not forget the people who have lost their jobs since the start of the coronavirus pandemic.

Lawmakers are continuing their negotiations on a bill to extend unemployment benefits through a $748bn Covid relief package that will provide 16 weeks of $300 weekly bonus to unemployed workers, through April 2021.

Sahm believes that the expiration of the Care Act benefits on December 31 will hurt those who have been without a job for the longest. According to economists, some 1 million workers were reported out of work for the longest period of 26 weeks in November. In addition, approximately 742,000 people applied for unemployment insurance in early December, the article noted.

Data further revealed that unemployment claims have been the highest than in any past recession, and worse still has edged up recently after having declined for one month. Therefore, despite vaccine rollouts, the long-term unemployed will need continued assistance in 2021 within a backdrop of 1 million new coronavirus cases being reported on a weekly basis in the US, according to Sahm.

Branko Milanović

Branko Milanović, an economist, re-tweeted on the pandemic pushing forward the globalisation of labour. Milanović believes that Covid-19 is the first global event in the history of mankind. He also opines that it will enter history books as a global event and is a unified experience, where both adults and the elderly and younger generations are aware of its existence and threat.

In his views, Covid-19 would have been less feared if it was less random. Looking past the damages, he believes that it is a global event marked by virtual experiences that is seamless and equal for everyone. According to him, a global labour market will come into existence without the need for migration. Workers will stay put but work in factories and offices miles away.

Therefore, the pandemic advocates for greater globalisation and mobility of labour already existent in some segments of the world economy such as software design and call centres, he added.

7:55 am

Nursing home workers form a Covid transmission network – leading macroeconomic influencers

Nursing homes accounted for 40% of the US Covid-related mortalities towards the end of August, highlighting the urgent need to cut SARS-CoV-2 transmission routes in these facilities. Direct connections between nursing homes bridges other clusters of homes, potentially importing or exporting SARS-CoV-2 infection across different subnetworks.

Frolian Ederer

Frolian Ederer, an economist, re-tweeted on how nursing home workers shifting across facilities were forming a Covid transmission network according to the Proceedings of the National Academy of Sciences (PNAS) of the United States of America, a scientific journal.

Experts suggest that even in non-pandemic times, understaffing at long-term care facilities and nursing homes leads to poor services and regulatory violations. As a result, care facilities rely on staffing agencies to employ nurses and nurse aides on an on-call basis. This, as a result, leads to some of the cross movement of workers between facilities, the paper noted.

Researchers found that a major challenge of nursing homes was that every connection was a possible link to other connections and to the SARS-CoV2 transmission. For instance, the Alabama subnetwork reported eight Covid cases among its residents and 30 confirmed or suspected coronavirus cases among its staff.

This facility is directly connected to another nursing home in Alabama, which reported 68 residents and 48 staff members to have contracted the Covid-19 infection. Again, both of these facilities are connected to other nursing homes.

Konstantina Beleli

Konstantina Beleli, an economist and journalist, re-tweeted a CNBC article on how the Covid relief bill will cushion 19 million Americans against unemployment. The Bipartisan Covid-19 Emergency Relief Act of 2020 will provide extra benefits to the long-term unemployed, and to some self-employed and gig workers, the article detailed.

According to lawmakers and unemployment experts, these are temporary measures and more support maybe needed in the near future. The Covid relief bill, if passed, will be the first after the CARES Act in March, and is expected to extend expiring aid programmes and increase the weekly benefits by $300.

In another significant move, the bill allows states to waive off the requirement that self-employed, gig workers, contractors, and freelancers repay the benefits in certain situations, the article noted. The bill will also amend rules pertaining to workers who lost their jobs during the start of the pandemic and protect them against losing their benefits after an year.

Peter Orszag

Peter Orszag, the CEO of Financial Advisory at Lazard and columnist, re-tweeted about approximately 300,000 people having died in the US because of the Covid-19 disease. He further adds that an additional 40,000 have died due to other complications and health care faulters. As hospitals turn their entire attention towards Covid-19 patients, their non-Covid utilisation rates have dropped swiftly.

Orszag also questions if that much healthcare utilisation just disappears without it harming health outcomes. He also adds that one theory did suggest that this could happen, as there are lots of inefficiencies in healthcare; therefore, it is possible to reduce spending without harming outcomes. However, it was not clear what kinds of spending to avert outside of Covid or the kinds to cut back on to eliminate harm.

In his views, Covid is hurting people in more ways than one, and therefore, a fiscal relief is important to support healthcare needs of low-income Americans and higher education in the long run.

Looking past the health crisis, he states that 2021 could be a strong economic year because of the built-up savings or the demand among US households. In addition, the arrival and distribution of vaccines could boost economic activities, thereby adding trillions to the economy.

6:50 am

Oregon gets its first batch of coronavirus vaccines – leading macroeconomic influencers

A four-state review panel at Oregon declared the Pfizer-BioNTech coronavirus vaccine safe and effective for use and awaited its first consignment on Monday. While healthcare workers will be the first ones to be vaccinated, economists believe the process could take months. However, rigorous programmes are in place to vaccinate 70% of the adults by Autumn, the threshold for achieving herd immunity.

Tim Duy

Tim Duy, an economist, re-tweeted an article on the Oregon Health Authority (OHA) expecting the first batch of coronavirus vaccines to arrive on Monday. Although it was unclear if the public would be inoculated immediately and how many people would be vaccinated on the first day, a scientific review panel declared the Pfizer vaccine safe and effective for use against the Covid-19 disease, the article highlighted.

The review panel also called for the vaccine to be administered immediately in Oregon, Washington, California, and Nevada. State officials announced that they would be receiving 35,100 doses of the Pfizer-BioNTech vaccine in the current week to initially inoculate its frontline healthcare workers and long-term care facilities staff.

Health authorities also confirmed that by the end of December, Oregon’s total vaccine capacity will reach between 197,500 and 228,400 doses. These totals include Moderna’s yet-to-be approved vaccine for people who are yet to receive their second shot. Officials also stated that Oregon’s December allotment was enough to vaccinate approximately 100,000 residents, the article further detailed.

David Wessel

David Wessel, a journalist and director of the Hutchins Centre on Fiscal and Monetary Policy, shared an article on the next six months after vaccine approvals being vaccine purgatory, a period where people will despair, worry and be confused about who will be prioritised for inoculations and how long will people have to wait their turn.

While the end of the pandemic is in sight, economists believe that developed nations such as the US will take several months for people to be vaccinated to resume normal life. Therefore, the next six months will be chaotic for people, with possibilities in vaccine delays, fights over prioritising inoculation, and how the vaccinated are recovering and how they should exercise caution, the article detailed.

The question before nations is how long will the purgatory last, and how effective will programmes such as the Operation Warp Speed be in meeting their required deadline of vaccinating nearly all of the US by June, the article noted.

Economists further believe that vaccine developers such as Pfizer and Moderna, the FDA-approved forerunners in the vaccine race, cannot remain complacent and hit delays in manufacturing. Likewise, AstraZeneca and Johnson & Johnson need to fast-track approval of their vaccine candidates early next year.

Additionally, one’s anguish will also depend on where one lives. For instance, every state in the US is authorised to use the vaccines the way it wants once it receives them. Consequently, one could qualify as an essential worker in Illinois but not in Indiana. Therefore, the process of vaccine administration will be local, flexible, and most likely inconsistent and unfair, the article noted.

Branco Milanovic

Branco Milanovic, an economist, shared an ABC News clip on Bill de Blasio, the NYC mayor expressing his views on all forms of restrictions to be enforced at the moment to break the second wave of the coronavirus infections in the US.

Governors and state officials have deemed it necessary to go for a complete shutdown like the one at the end of Spring, Blasio added.

This directly implied that people and companies would have to reconsider and readjust to working remotely as the likelihood for stricter restrictions increased. He further adds that although the shutdown could last for few weeks, officials are not ruling out preparedness for extended lockdowns and restrictions given the rise in infection rates across the country.

 

7:40 am

Europeans distrustful about Covid-19 vaccines – leading macroeconomic influencers

Vaccine challengers have existed since vaccines were introduced. Economists believe that anti-vaccine sentiments and resistance against the newly developed coronavirus vaccines could hamper the uptake and fight against the Covid-19 disease.

Konstantina Beleli

Konstantina Beleli, an economist, re-tweeted an article on how many Europeans are sceptical about the Covid-19 vaccines. According to an economist article, despite clinical trials revealing the safety and efficacy of coronavirus vaccines, a number of people in Europe remain hesitant about being administered with the newly developed vaccines, thereby making the fight against the Covid-19 disease even more difficult.

According to a sample survey by Ipsos Mori, approximately 46% of the French, highest among other Europeans, and more than 40% of Poles and Hungarians refuse to be vaccinated with the coronavirus vaccines.

A number of conspiracy theories are also black painting the new coronavirus vaccines, calling them Bill Gates’ efforts to insert chips into the body, the article noted. Economists believe that while the 18th and 19th century reactions against vaccines were mainly religious, today’s resistance against the vaccines is due to political reasons.

As elites fear and distrust the new generation of Covid vaccines, politicians believe that people will eventually agree to get vaccinated in countries like France and Italy. Governments will have to bolster their Covid-19 vaccination programmes, to the effect that they are carried out smoothly and effectively, the article noted.

Steve Keen

Steve Keen, an economist, re-tweeted an article on how economists, politicians, and develop nations are getting everything wrong about the climate change, Covid-19 crisis, and the economic meltdown. In his views, the world is even less prepared to deal with the global climate crisis ahead of it, compared to what it was for the 2007 global financial crisis.

Economists suggest that Ann Pettitfor’s book ‘The Coming First World Debt Crisis’ was the first to warn of the 2007 Global Financial Crisis, the article noted. However, a decade since it began, the burden of excessive private debt still exists. Additionally, the world is now gripped with the pandemic, and the urgent need to address the climate change.

Keen believes that mainstream economists have ignored the signs of the approaching global financial crisis and the coronavirus health emergency. However, climate change needs to be dealt with differently, and hence, mainstream economists should be ignored.

Market mechanisms suggested by mainstream economists will not be able to cope with the climate crisis just as they have proved to be ineffective for the Covid-19 crisis. Therefore, war-time measures such as carbon rationing and government funding into efforts such as a Green New Deal are likely to help sustain the economy, the article detailed.

Dr Shirley Yu

Dr Shirley Yu, a political economist, re-tweeted on how China’s household debt surged by approximately $379.62bn, or almost 3.5 times than that of the US in the first six months of 2020 during the coronavirus crisis, according to data collected by the Bank for International Settlements (BIS) and the Wall Street Journal (WSJ).

Data further revealed that Chinese household debt as a share of the gross domestic product (GDP) stood at 59.1%, up by 3.9% in the first half of the year, and higher than most developed countries.

The pandemic has caused many people to invest in a second or third home due to inflation fears, thereby driving the property boom. Consequently, rapid expansion of investments in real estate have contributed more towards China’s economic recovery post-Covid than the recoveries made in retail sales and exports, the article noted.

8:37 am

Humanitarian relief faces huge funding deficit amid Covid crisis – leading macroeconomic influencers

Economists believe that despite donor contributions, the funding for coronavirus humanitarian relief measures has been able to cover merely half of the global population. Over 25,000 health and humanitarian personnel from 397 organisations were transported on about 1,450 flight to provide immediate assistance.

Adam Tooze

Adam Tooze, the director of the European Institute, shared an article on how the initial funding of $29bn to curb the coronavirus pandemic surged to $39bn in mid-November to support nearly 265 million of the 441 million people across 64 countries. The Global Humanitarian Overview for 2020 found that donors gave approximately $17bn to inter-agency plans towards the end of November 2020. However, despite the generous contributions, the gap between requirements and funding has never been larger, approximately $22bn.

The overview for 2021 further revealed that 235 million will need humanitarian assistance in the year ahead, indicating 1 in 33 people need help globally compared to 1 in 45 people in the previous year. The United Nation (UN) and partner organisations are working towards protecting almost 160 million people across 56 countries with funding requirements of approximately $35bn.

Despite the pressure of the pandemic on donor economies, additional funding was secured on several occasions, the article detailed. However, humanitarian organisations and non-governmental organisations (NGOs) continue to be underfunded and have been unable to carry out activities planned in 2020.

Gregory Daco

Gregory Daco, an economist, shared a Wall Street Journal (WSJ) survey that found that US economic recovery will cool further before getting a vaccine boost in the second quarter of 2021. Daco states that real-time data point at a slow entry into 2021, with the health situation deteriorating, employment softening and moderate spending.

Economists have also slashed their earlier projections of economic growth and job creation in the first quarter of 2021 but raise it for the second quarter, the article noted. The recent surge in coronavirus cases and logistic challenges involved in distributing the Covid-19 vaccines across the country will be the major drivers for the slowing down of the economy in the first quarter.

Forecasters have predicted the US economy to expand at a 1.9% annual rate between January and March 2021, a decline from 3.3% growth recorded in November. The labour market is also expected to add less than 295,000 new jobs every month during the first quarter, down from 440,000 according to the November survey, the article noted.

However, the rollout of coronavirus vaccines in the second quarter will not only add points to the annualised growth rate, but also accelerate jobs and hiring in the US.

Claudia Sahm

Claudia Sahm, an economist, re-tweeted about the hidden fourth wave of the pandemic in the US being severe psychic distress. According to a new Gallup survey, Americans’ assessment of mental health has been the worst since the past two decades, the article highlighted.

Ken Duckworth, the chief medical officer of the National Alliance on Mental Illness, states that it will not be a great year for those with a prior history of mental health illness or those suffering from seasonal affective disorder, a condition marked by depression due to reduced exposure to sunlight. In addition, social isolation, fewer connections, and uncertainty around the virus crisis, is most likely to add to the stress and anxiety of people.

The US has been struggling to keep up with mental health problems, much before the pandemic and greater now, with rural and marginalised communities in the urban setting most affected. In June, the Centres for Disease Control and Prevention (CDC) reported 40% of the US adults to be suffering from one severe mental or behavioural condition as a result of the pandemic.

8:07 am

Ban on indoor dining puts low income workers at risk – leading macroeconomic influencers

Economists believe that the recent federal guidance to ban indoor dining has thrown NYC restaurant businesses into limbo. The industry employs thousands of low income workers who are on the edge of survival with no form of aid.

Christophe Barraud

Christophe Barraud, a chief economist, shared an article on indoor dining being banned again in New York City (NYC) early next week and just before the festive season due to an alarming increase in coronavirus cases. Andrew Mark Cuomo, NYC’s governor, announced a new restriction model that will clamp down on indoor dining in any region if hospitalisation rates did not stabilise for five days.

The restaurant industry has been facing a deep crisis since the start of the pandemic, with lots of businesses having shut down in early Spring putting low income workers out of jobs. As restaurateurs adapted to the new normal by shifting to takeout and delivery and then gradually moving outdoors and safely back indoors, they seem to be barely hanging on, the article detailed.

Federal health officials recently laid down some measures deemed necessary to curb the virus spread. While the agency recommended schools to stay open and re-open, they warned against eating at indoor restaurants, citing it to be “particularly high-risk scenarios” as diners would have to remove their masks, which goes against the urgent need to limit the virus spread.

While NYC restaurants will close indoor dining, restaurants in other regions will have to reduce indoor dining capacity from 50% to 25% if hospitalisation rates did not decline. California is also adopting a similar patchwork approach to shut down to curb the virus spread in regions, the article noted.

James Picerno

James Picerno, a financial journalist, shared an article about US job openings witnessing a spike of up to 6.7 million in October but hiring slowed down with the resurgence of Covid-19. This led to further lay offs and firing since June, the article detailed.

The Labour Department reported job posting to rise to 6.65 million in October from 6.49 million in September. However, employers hired 5.81 million people, compared to 5.89 million workers in September. The department also found companies and government agencies to have laid off 1.68 million people, up from 1.44 million in September. Experts suggested that this could have been caused by the removal of temporary census workers.

The US job market has been recovering slowly since Spring when the pandemic hit the country hard causing millions to lose their jobs. Employers slashed as many as 22 million jobs in the first two months of the pandemic, but gradually started recalling furloughed employees to work. However, the job rebound is slow and threatened by the recent spike in Covid-19 infections across the country.

The Labour Department also reported a steady decline in job creation by employers, from 4.8 million jobs in June to a dismal 245,000 jobs in November 2020.

Robert Palmer

Robert Palmer, a tax reform campaigner and executive director of Tax Justice UK, re-tweeted about a wealth tax to fund Covid recovery. In his views, too often during the crisis, the government has been playing on its back foot but that should not be the case when the next shock hits.

Experts from the Warwick University and London School of Economics announced a plan that could raise $348bn through a one-off 5% wealth tax on millionaires. The Wealth Tax Commission comprises lawyers, economists, professionals, and think tanks who advise the rich and wealthy.

The wealth tax will be paid by UK residents with personal wealth above a set threshold. It will include all assets but not debts such as mortgages. The tax will be paid in instalments over a five-year tenure and will apply on the wealth above the threshold, the article highlighted. The tax will not only aid in Covid recovery but also gain the trust of people about the government confronting issues related to inequality, and racial and gender injustices, the article highlighted.

8:06 am

House prices set to rise in Australia in 2021 – leading macroeconomic influencers

Economists believe that the global coronavirus pandemic and the related recession were not enough to destabilise house prices, at least in the short run. As evidence suggests, the cost of property in Australia is set to rise in the next three years.

Stephen Koukoulas

Stephen Koukoulas, an economist and research fellow at Per Capita, a progressive think tank, re-tweeted on the global pandemic and deep recession not being enough to weaken house prices in Australia, with the cost of property set to climb in 2021.

While some experts forecasted a 40-45% dip in house prices in the next three years starting from September 2018 when house merchants feared the collapse in house prices, the chances of a 35% price fall before the end of 2021 are also looking slim, with cost of property set to rise in the year ahead, Koukoulas highlighted.

The Australian Bureau of Statistics (ABS) further revealed that house prices in eight capital cities rose 0.8% in the third quarter of 2020 and was 4.5% higher than in 2019. Data also suggested that Sydney’s house prices rebounded 9.2% after the second quarter of 2019, while Melbourne prices were up 8.5% and the eight capital cities were up 7.0% respectively.

Although unofficial house price data for the fourth quarter of 2020 confirm rising prices across all cities, driven and supported by low interest rates, it is likely to be offset by the low demand linked to low immigration and increased supply from new construction activity, Koukoulas adds.

Dany Rodrik

Dany Rodrik, an economist at the Harvard Kennedy School, re-tweeted on how the US was losing good middle-class jobs due to automation, rise of the gig economy, deindustrialisation, and global competition much before the coronavirus hit. In his views, the new Biden administration needs to create skilled-specific jobs to revive the labour market and the economy that has currently been marred by the Covid-19 health crisis.

More than 20 million jobs have been lost in the US during the pandemic, with barely half having been regained, also indicative of how gravely the less educated and disadvantaged communities have been impacted by the job losses. Findings from a Pew Research Centre survey has further revealed that 58% of the upper- and middle-income adults have returned to their old jobs or got new ones, while just 43% of the lower-income adults have been able to do the same.

Ridrisk writes that in order to restore the health of the US labour market, which has been polarised for long, good jobs have to be created by addressing both the supply and demand sides of the problem. This implies that workers should be equipped with the skills and training required to do a specific job, while on the demand side, there should be enough productive firms to employ and engage these people.

Wonkmonk

Wonkmonk, an economic policy activist, shared an article on how governments can create a green, and job-rich global recovery with a debt-financed green investment plan combined with carbon pricing that can help boost economic growth for years and create 12 million jobs until 2027. Addressed by economists Kristalina Georgieva and Rajiv J Shah, the article states how a strong, coordinated, green public investment can help tackle both crises – climate change and the Covid-19 crisis.

The efforts of all economies are targeting towards getting people back to work and in re-starting economic activities, the article noted. Leaders at the Paris Peace Forum and later at the G20 summit have advocated the need for a green, coordinated effort to jump-start recovery and reduce the impact of climate catastrophe.

Some of the largest economies have committed to over $12tn in fiscal spending to tackle the coronavirus crisis, the article noted. However, experts believe that the synchronisation of investments is important, suggesting that if countries acted alone, it would amount to two-thirds of more spending to achieve the same outcomes.

7:15 am

Greatest vaccine effort in history underway – leading macroeconomic influencers

Countries across the globe are striking deals to secure vaccine access in a desperate measure to get relief from the worst global pandemic. Economists believe that getting these shots across to as many people and countries to stop the virus rage, will be the greatest logistical challenges ever.

Gregory Daco

Gregory Daco, an economist, shared an article on the greatest vaccine effort in history, with the UK leading the pack to clear the first shot from Pfizer and BioNTech. The US is also making similar efforts and has succeeded in developing the Moderna vaccine candidate, mRNA-1273, which revealed 94.5% efficacy in its early stage data.

Experts believe that by the end of the year millions will be inoculated, and billions across the globe. The article elucidates how nine potential vaccines are being tracked around the globe, on the basis of national procurement deals to patients being administered doses. According to the data collected, 7.85 million doses of Covid-19 vaccines have already been allotted.

Economists believe that this maybe enough to meet the vaccine requirements of at least half the world, if administered evenly. However, it is a known fact that the economically richer countries have placed higher bets on these vaccines with extensive supply agreements, while the need for ultra-cold storage requirements make it even more difficult for tropical countries and emerging markets to bag the vaccine deals, the article detailed.

Meanwhile, countries like Russia and China are carving their own path and are most likely to depend on domestically produced vaccines such as the Sputnik V and Sinopharm-made vaccine. The two countries authorised these vaccines in July and expect their entire populations to be vaccinated.

Ian Bremmer

Ian Bremmer, a political scientist and foreign affairs columnist at TIME, re-tweeted on what is likely to happen when Covid-19 vaccine rollouts begin. Experts suggest that now the urgency has shifted from racing to find a vaccine to racing to ensure that it will be enough for the world.

As Pfizer, Moderna and AstraZeneca grab successive deals for vaccine procurement, economists worry that the limited supply of vaccines will be a great challenge to meet both the domestic and international demands. For instance, the world’s advanced democracies who are leading the pack in vaccine development have reserved their first run of vaccines for frontline workers and nursing home residents, while the second round is being reserved for essential workers, the article detailed. However, debates continue around the term ‘essential’ and which category of workers to be prioritised.

Another problem being faced by advanced economies such as the US is the longstanding vaccine scepticism. This implies that despite the government paying for the shots, many will not want to take it. Additionally, once the initial distribution phase ends, countries will be grappling with the problem of inequality again with a quicker uptake of inoculations among the wealthy and rich compared to the poorer sections of the population, the article noted.

Prem Sikka

Prem Sikka, an accountant and academic, re-tweeted on how retailers such as B&Q, Tesco, Morrisons, Sainsbury’s, Asda, Aldi, Lidl, and others are returning the Covid business rates relief that they may not need. Experts suggest that the insurance companies, banks, Amazon, Microsoft, and Google should also be doing the same as their businesses have boomed during the coronavirus pandemic.

B&Q, a wholly owned subsidiary of Kingfisher, decided to return $173m of Covid business rates relief to the government, along with other big retailers such as Tesco, Morrison’s Sainsbury’s, Asda, Aldi, Lidl, Pets at Home, and B&M promising to pay back $2.6bn to the UK government, the article noted.

However, a number of retailers such as Marks & Spencer and the John Lewis Partnership do not want to return the exceeding emergency taxpayer support, stating that they need the government’s support to meet the financial strains of the Covid-19 crisis, the article detailed.

7:18 am

Managerial talent can help weather Covid-19 shocks – leading macroeconomic influencers

Economists believe that managerial practices have helped economies in cushioning large economic shocks; and although it is too early to study the effects of managerial talent on the Covid-19 crisis, it has highlighted the need for swift reorganisation of tasks and logistics.

Linda Yueh

Linda Yueh, an economist, shared an article about how managerial practices influence the ability of economies to weather large shocks such as the Great Recession and the more recent Covid-19 crisis. The article draws useful insights from the Great Recession to understand how to build managerial talent and logistics in cushioning economic shocks from crises such as the coronavirus.

Research suggests that countries with a higher quality of management prior to the Great Recession were able to limit employment losses by moderating real wage growth, the article noted. However, economists also believe that the effect of management quality on macroeconomic outcomes could be quantitatively different for Covid-19 and its recovery, but qualitatively similar.

The Covid-19 crisis has highlighted the importance of the swift reorganisation of tasks and logistics to cushion economic shocks. This implies rapidly deploying teleworking and online services, reorganising supply chains, and supporting firms to preserve skills, production, as well as market shares.

Many studies have suggested that effective managers respond to exogeneous microeconomic shocks by reallocating workers to preserve, develop and utilise workers’ skills, maintain their incentives and satisfaction, and preserve productivity, the article detailed.

Felix Salmon

Felix Salmon, a chief financial correspondent, shared an article on the perils of mass transit facing huge service cuts across the US due to the Covid-19 crisis, and the effects on local gross domestic product (GDP). According to economists, the rationale for cities is that people stay close to carry out their economic activities and do not spend most of their time on travelling. However, if transit networks are diminished in a dozen or more centres of economic output, then it could impact the national economy, the state.

Transportation systems across the US are facing huge financial losses set off by the pandemic and reduced ridership. They also fear that the pandemic cripple service for months and years to come and are therefore pleading to Washington for assistance. While Boston shut down its ferries and commuter rail services, Washington eliminated its late-night metro service, Atlanta its bus service, and New York City announced plans to slash its subway service by 40% and commuter rail service by half.

Apart from the fact that transportation systems such as buses and trains allow people to commute to key business areas such as restaurants, hotels and stores that have already been battered because of the virus outbreak, the collapse in transportation agencies have hurt low-income riders and minorities the most, as they are the largest users of buses and subways, the article noted.

Ian Bremmer

Ian Bremmer, a political scientist, shared an article on the European Union (EU) going ahead with the $909bn fund, despite Poland and Hungary having vetoed its proposed Covid-19 economic recovery bill last month. In spite of the two eastern EU states having objected to EU’s provision to disburse funds to the bloc through 2027, Ursula Von der Leyen, the EU president intends to pass the bill even if the veto is not lifted at Brussels on December 10.

The states say that they are not backing down from their decision and waiting for Germany – which holds the rotating presidency of the Council of the European Union till the end of the year – to compromise. Until then, the current political deadlock continues, the article noted.

8:06 am

Covid shrinks US labour market, pushing women and baby boomers out – leading macroeconomic influencers

The pandemic has shrunk the US labour market, rendering women, low-wage workers, and baby boomers out of work, with many not even looking for jobs. Economists believe that the depressing effect on the labour force may linger, as the supply of people either working or looking for jobs has declined sharply since the virus outbreak.

Greg Ip

Greg Ip, chief economics commentator for The Wall Street Journal, shared an article on how the coronavirus pandemic has pushed nearly 4 million Americans out of the labour market, a 2.2% contraction in the US workforce, with economists fearing that many wouldn’t return at all. The article further notes that women, low-wage workers, and baby boomers have been the worst affected, with many not only having lost their jobs but also not looking for jobs.

When lockdowns were lifted after March, the demand for workers witnessed a sudden rise, a phenomenon economists did not expect. Consequently, unemployment rates fell by more than half to 6.9% between April to October, correcting more than two-thirds of the initial rise.

However, economists believe that the health of the US workforce is overstated, as the supply of people either working or looking for jobs has declined. For instance, just one-third of the workers, mainly those working in low-wage sectors such as retail, hospitality, and others, who have lost their jobs since February 2020 state that they want a job but aren’t looking for one.

Economists believe that the effects of the pandemic will continue to depress the labour force, marked by  a major retreat of baby boomers who constitute the productive workforce, women being forced to reduce their working hours or stop working altogether, thereby making a return much harder, and unskilled workers less likely to find well-paid jobs.

Stephen L Ross

Stephen L Ross, an urban economist, re-tweeted about President-elect Joe Biden’s new economic team and its focus on Covid labour crisis. The team comprises inequality and labour market specialists as leaders, suggesting the government is looking at prioritising progressive policies directed at minority workers and women in particular, according to Diane Swonk and Grant Thornton who spoke to Reuters about the new team.

The Biden team is looking to address the immediate crisis of nearly 12 million Americans being stripped off their unemployment benefits on December 26, along with programmes supporting student loan forbearance and protection from evictions also to end, the article noted.

The President has also called for lawmakers to pass the Heroes Act, a bill in the House of Representatives that will extend unemployment benefits and provide direct financial support to households, among other efforts, the article noted. The economic team, comprising Janet Yellen, Cecilia Rouse, Heather Boushey, and Jared Bernstein, will be focusing at stabilising households, boosting productivity, alleviating poverty, and reducing inequality through measures such as pushing to increase the federal minimum wage to at least $15 per hour, the article detailed.

Martin Sandbu

Martin Sandbu, an economics commentator, re-tweeted an article by Adam Tooze, a historian and Director of the European Institute, on how the frail euro zone recovery depends entirely on its guarantee by the European Central Bank (ECB).

According to the author, although optimists might see a light at the end of the tunnel with vaccines in the pipeline, and inoculations to begin towards the end of the year, and restrictions lifted, it may be just like the calm between the banking crisis of 2008 and the euro zone crisis that followed.

Tooze explains that the European economy is on complete life support in 2020. Schemes have been designed to support millions of jobs, guarantees of credit have been issued, but if all this ends prematurely, and if recession takes a hold, losses and bad loans will cascade through the financial system, he further added.

7:55 am

Covid resurgence slows economic activity across US districts – leading macroeconomic influencers

Recent spikes in coronavirus cases in the US has led to reduced economic activity across several districts in the US. Experts state that Philadelphia and three of the four midwestern districts have reported a downward trend in early November.

Pedro Nicolaci da Costa

Pedro Nicolaci da Costa, a Federal Reserve and economy correspondent at Market New International, shared insights from the recent Fed Beige Book, a report on the current economic conditions published by the US Federal Reserve Board. The report highlighted four districts with little or no economic growth. As Covid-19 cases surged across the country, Philadelphia and three out of four of the midwestern districts confirmed slow economic activity in the beginning of November.

Although business activity during the Beige Book period was stable but lower since the Covid-19 outbreak in Philadelphia, it adopted a downward trend in November when coronavirus cases resurfaced. This led to heightened concerns over layoffs, evictions, bankruptcies, and foreclosures. Meanwhile, modest rise in jobs, wages and inflation were also reported from the district.

Kansas City also reported stable economic activity. However, consumer spending fell slightly in November after rising in the previous month, indicative of a slow economy. Some sectors reported increased levels of activity such as manufacturing, wholesale trade, transportation, and residential real estate. The energy sector remained steady, while the agricultural sector reported moderate improvement.

Faisal Islam

Faisal Islam, an economics editor at the BBC, shared a Resolution Foundation report on safeguarding governments’ financial health during the coronavirus crisis by taking examples from the previous crises. The report anticipated double-digit hits to the gross domestic product (GDP), as well as borrowing earlier in March, weighing the losses to be the same as during the Spanish Flu and Ebola crises, rather than the 0.5 to 1% annual losses in GDP following the SARS outbreak.

The report also speculated economic impacts to last for months, if social distancing measures were to continue for indefinite periods. Although the current pandemic cannot be compared to the East Asian countries’ V-shaped recovery from SARS in 2003, Spanish Flu and Ebola outbreaks are more relevant precedents for the current Covid-19 crisis, the article noted. All three crises are marked by peaks and troughs of losses and output, making it difficult for economies to return to pre-outbreak levels.

The report also probed into governments’ deficit, which is expected to rise into high single or double digits as a proportion of the GDP. Taking an example of West Africa, the report highlighted how economies ran into 5% and 9% deficits during the peak of the Ebola outbreak. Likewise, the fiscal measures adopted during the coronavirus pandemic has been unparalleled and may even lead to wartime levels of government borrowing.

Daniel Lacalle

Daniel Lacalle, an economist, shared an Automatic Data Processing (ADP) employment report that shows that US companies have been adding fewer jobs than forecasted. Job recovery seems to be continuing but at a sluggish pace.

Experts attribute the slow recovery in employment to the successive coronavirus flare-ups in the country, fear of additional lockdowns, the likelihood of higher taxes and more labour market rigidity. All this combined is making it difficult for employers to hire faster.

7:00 am

Developing countries lose out due to low prevalence of remote working jobs – leading macroeconomic influencers

Economists believe that the ability of people to work determines their livelihoods, especially in crises such as the Covid-19, which has caused millions of workers to lose their jobs or be exposed to the virus. While advanced economies rapidly adopt remote working, occupational structures are preventing working from home in developing countries.

Stephen L Ross

Stephen L Ross, an urban economist, re-tweeted an article on how feasible working from home is in developing countries. The article noted that people’s economic experience of Covid-19 depends partly on whether they are able to work from home. Additionally, poorer countries have fewer jobs that can be done at home, resulting in more workers losing their jobs or being exposed to the virus while working.

In countries like Brazil, low-qualified workers are less likely to do their job at home. Therefore, the impossibility to switch to a home environment is forcing people to leave their houses for work during the pandemic. Evidence suggests that by May 2020, about 14% of the Brazilians employed were working remotely, while 37% of the employees with a tertiary education were able to work from home, and only 1%  of the workers with no school leaving certificate were able to work remotely.

Data from the Skills Toward Employability and Productivity (STEP) survey also found that ten developing countries including Bolivia, China, Armenia, Georgia, Colombia, Kenya, Ghana, Laos, Vietnam, and Macedonia, had only 13% of the employed population working from home.

Wonk Monk

Wonk Monk, an economic policy activist, shared an article by Gavyn Davies, the chairman of Fulcrum Asset Management on the risks of global Covid debt bridge. He states that the markets seem unconcerned about how the pandemic has left borrowing at all-time highs.

The start of the Covid-19 pandemic had sent clear signs for the global economy to extend public and private debt in order to avoid a persistent and deeper depression. This unprecedented explosion in debt, however, helped provide a bridge over the collapsed world output, that in turn helped mitigate corporate bankruptcies and household hardships.

With much progress being made on the vaccine development front, investors feel confident about the end of this debt bridge, states the author. However, the surge in borrowing this year has been called the largest wave in a great debt tsunami.

The Institute of International Finance (IIF) reported a rise in the ratio of global debt to gross domestic product (GDP) from 320% in 2019 to 365% in 2020. Although the IIF unambiguously regards this as more trouble., financial markets seem to have ignored these warnings, the article noted.

Kenneth Cukier

Kenneth Cukier, a senior editor at The Economist, re-tweeted an article written by Katy Milkman, a Wharton School of the University of Pennsylvania professor, who explains how behavioural science offers the key to getting more people vaccinated against the Covid-19 disease. A catastrophe can unfold if people reject immunisations, Milkman adds.

As Covid-19 vaccines come to a near approval and administration stage, the new challenge facing societies is its uptake. Experts believe that if few agree to immunise, it will leave the world in further chaos and with limited use of the vaccines.

A survey sample finds that approximately 60-80% of the population are required to get vaccinated and receive the antibodies, either through vaccines or from those recovered, to achieve herd immunity that will protect the entire world. However, the survey also suggested that despite three-fourths of the people willing to be vaccinated across 15 countries, about 33% strongly agreed to get immunised, and about 40% somewhat agreed.

Experts therefore believe that persuasion and follow-up is the only way to ensure global immunity. In America, for instance, 72% of the population agreed to get vaccinated when the vaccine was made available; however, by September, just 51% agreed to get immunised, the article detailed.

8:40 am

US on verge of double-dip recession and dollar crash – leading macroeconomic influencers

Economists believe that the pandemic is causing the US economy to plunge into a double-dip recession and is also exerting great pressure on the dollar. They are calling for fiscal support to address the difficult economic situation, citing that the economy is heading towards a hole in savings more than ever in history.

Nouriel Roubini

Nouriel Roubini, an economist, shared an article on how the virus surge in the US is leading to a double-dip recession and dollar crash according to Yale University’s economist Stephen Roach. He further adds that the rise in coronavirus cases is disrupting Wall Street’s hopes for a V-shaped economic recovery.

Rubini also predicted the US to economy to face further lockdowns in the days ahead, as he spoke to CNBC’s Trading Nation. However, he also adds that these lockdowns may not be as severe than the ones in spring but could lead to undeniable damages and shock the global economy into recession. Roach therefore believes that investors should be vigilant.

Roach also predicts a temporary relapse in the economy, mostly in the beginning of 2021. He has also called out for a 1% dip in gross domestic product (GDP) in the first quarter of 2021 but said could be more significant. He also warns of continued and intense pressure on the dollar, with the need for fiscal relief to address the economic crisis.

Dr Jennifer Robson

Dr Jennifer Robson, an associate professor at Kroeger College, Carleton University, re-tweeted an article on government’s debt sustainability in Canada’s post-Covid future. The International Monetary Fund (IMF) has forecasted Canada’s general government debt, including federal and provincial, to exceed 100% of its GDP, the article noted. Economists worry whether the country will be able to sustain the vast accumulation of debt, not seen since World War II.

Additionally, experts explain that Canada’s debt sustainability depends on the fiscal health of its provinces. Steady rise in provincial debts, Covid-induced economic shock, and mounting healthcare costs for the aged have exerted great pressure on government debt. However, a working paper analysis for the Canadian Tax Journal by Dr Trevor Tombe, finds long-term effects of the increase in federal debt from Covid-19 to be small compared to the significantly larger challenges faced by provincial governments.

Giving his projection of debt to GDP ratios for Canada, pre-and post-Covid, Tombe concluded that the large increase in Covid-related federal debt has been outdone by the increase in provincial debt. Additionally, despite the virus-induced economic shock, federal finances have remained sustainable.

Brian Riedl

Brian Riedl, an economist and senior fellow at the Manhattan Institute, re-tweeted about how the Covid relief compares to the Great Recession stimulus. He tweeted that about 70% felt that the government provided less stimulus during the Great Recession and that the response to the 2008 recession was much smaller. However, adding it all up, the Great Recession saw as much response as during Covid-19.

According to Committee for a Responsible Federal Budget (CRFB) calculations, Covid-19 relief totalled about $2.5 trillion for the next five years, a proportion that was equally attributed for the Great Recession between 2008 and 2012. However, recent analysis finds that the Great Recession funds were mostly distributed over the five years, but the Covid relief was spent over just six months.

CRFB data further revealed that the Great Recession cost the federal government 2.4% of the GDP, compared to Covid-19 that has cost the government 2.3% of the GDP. Additionally, economic rescue measures will also cost the US government 12% of the GDP in the fiscal year 2020, compared to 1% in 2008 and 4% in 2009.

7:35 am

Swedish life expectancy falls after more than a century – leading macroeconomic influencers

Statistics Sweden data states that the country’s falling life expectancy is directly tied to the coronavirus pandemic. The agency confirms that the fall has become apparent, especially after a clear rise in life expectancy rates for more than a century.

Constantin Gurdgiev

Constantin Gurdgiev, an economist, re-tweeted about how Swedish life expectancy is set to decline for the first time over a century due to the coronavirus pandemic. The country’s statistics agency, Statistics Sweden stated that the average life expectancy of people living in the country has risen between 1900 and 2019. However, the current fall to 80.8 in the year through August for men and 84.4 among women has become clearly visible.

Reports suggest that the country is harder hit by the coronavirus pandemic compared to its Nordic neighbours such as Finland, Norway, and Denmark, and has reported much higher Covid-19 mortality rates. Additionally, Sweden’s old age homes were particularly hard hit by pandemic deaths.

However, authorities have now jumped into action, completely banning social interactions to fight the virus spread, and with argument around not imposing lockdowns becoming more controversial. Sweden has been one of the hardest hit nations in Europe, and also the slowest in containing transmission of the disease.

John Ashcroft

John Ashcroft, an economist, shared an article on cutting UK overseas aid in the name of Covid fiscal prudence being purely nonsense. Economists believe that Rishi Sunak’s saving of up to $5bn is ridiculously small, excessively bad value for money and also politically a clumsy call.

The article further elucidated that the Chancellor, Rishi Sunak, has warranted a cut in international aid and a public sector pay freeze for millions, except for the National Health Service (NHS) staff and workers earning less than $32,012 every year.

Like-minded Conservative MPs such as Andrew Mitchell, international development secretary under David Cameron, have expressed their disregard to the Chancellor’s decision. Mitchell believes that there should be no debate over international aid, and that Rishi Sunak should have strong reasons to explain why the UK should stop allocating 0.7% of its national income as financial assistance, every year, to poorer nations.

Sunak however, held a different argument that the economic collapse meant that Britain could not afford the financial assistance, and that a fiscal emergency meant prioritising resources and focusing on providing job immunity and public services, the article noted.

Jonathan Portes

Jonathan Portes, a professor of economics and public policy at King’s College, London, shared an article on the UK government’s approach to tackling Covid-19 risks becoming the worst of all possible worlds. Had the government imposed restrictions in September, it would have saved more lives and money, according to Portes.

In an open letter published by openDemocracy, leading economists Simon Wren-Lewis and Jonathan Portes call for short-term but deep circuit-breaker lockdowns. As households and businesses face tighter restrictions during UK’s second lockdown, economists explain that partial closure of hospitals and other sectors without providing financial support will not be helping in reducing infection rates, death rates, or in protecting the NHS.

Economists also believe that such a move will require the Treasury’s support, especially with regards to extending furlough and busines support schemes introduced in March, and added support to the self-employed and those surviving on Universal Credit.

7:13 am

UK economy better off due to lockdowns – leading macroeconomic influencers

UK economists believe that the lockdowns have caused less economic damage than what the pandemic would have otherwise caused. While some believe no trade-off exists between lives and livelihoods, others believe there may be small or larger trade-offs.

Tim Harford

Tim Harford, an economist and author, re-tweeted an article on UK’s latest Centre for Macroeconomics (CfM) survey of economists, which aimed at evaluating the members’ response to how the pandemic and mitigation measures affected economic activity and if any trade-off existed between lives and livelihoods.

Economists believe that the lockdowns have caused limited economic damage compared to what the pandemic would have caused in the absence of lockdowns. Some experts opine that the recession could have been 50-70% deeper in the absence of lockdowns and fiscal support, and a fifth of the survey respondents believe that the UK economy is better off due to the lockdowns.

A majority of them also believe that the economic costs of the second lockdown, which commenced on 5 November and is due to end on 2 December, have been limited relative to the milder restrictions imposed in March. A major difference between the two lockdowns is the re-opening of the education sector, with schools, colleges and universities having returned to normal. The UK’s National Health Service (NHS) Test and Trace scheme has also offered new mitigation measures, the survey highlighted.

Yannis Koutsomitis

Yannis Koutsomitis, a European affairs analyst, shared an article on European Central Bank’s (ECB) minutes of the monetary policy meeting held in October. According to policymakers, the pandemic poses long-lasting effects both on the demand and supply side, Koutsomitis tweeted.

Economic developments have been sluggish and uneven across sectors, the article noted. The service sector, in particular, being hard hit by the restrictions on social activity and movement. Near-term price pressures also remained subdued due to a wakened demand, especially in the travel and tourism sectors.

A bank lending survey for the third quarter of 2020 also found credit standards for firms to tighten and the intention to do the same for households, despite a rise in households’ net demand for loans in the third quarter compared to a fall in firms’ demand. However, the euro area economy is focused at supporting favourable financing conditions and an expansionary fiscal stance, the article highlighted.

Samuel Tombs

Samuel Tombs, an economist, shared the latest indicators for the UK economy and society based on several surveys, data, and experiments. The Office for National Statistics (ONS) Business Impact of Covid-19 Survey (BICS) revealed a 3 to 4% hit to the gross domestic product (GDP) from the lockdown 2.0, a painful hit but better than the first.

Initial results from Wave 18 of the BICS that took place between 2 November and 15 November, found that approximately 75% of the businesses had been trading for over two weeks. It also found that about 13% of the businesses had stopped trade and did not intend to start in the next two weeks.

With respect to the social impacts of the coronavirus, work from home remained stable at 30% in Great Britain. Meanwhile, travel to work increased to 56%. In addition, adults continued to shop for essentials, food, and medicines, while 97% of the adults adhered to the mandate of face coverings, according to BICS.

6:51 am

UK to experience a third wave of Covid after Christmas – leading macroeconomic influencers

The UK government’s decision to ease coronavirus restrictions over the festive period will lead to a third wave of infection, amounting to increased transmission, unnecessary deaths and overrun hospitals, say scientists.

Richard Murphy

Richard Murphy, a chartered accountant and political economist, shared an article on UK scientists warning of a third wave of Covid infection after Christmas. Scientists believe that the recent decision taken by the UK government to ease restrictions during Christmas will only amount to a third wave of the pandemic. The warnings came after the government announced that three-household groups of any size could gather during the festive period.

The government’s long-planned “Christmas Bubbles” concept was also brushed aside, with ministers having stated that it would require individuals to take a personal decision on risking the older populace and others, the article noted.

Some scientists, however, have strongly recommended against families meeting indoors during the winter. Two advisors to the Scientific Advisory Group for Emergencies (Sage) agreeably believe that the relaxation will overrun hospitals such as UK’s National Health Service (NHS) in the new year.

With the country already experiencing high infection rates among younger people, the decision to allow people to meet in groups for hours and with older relatives, would only enhance the risk for a disease spread and deaths, the article detailed.

Chad Stone

Chad Stone, a chief economist, re-tweeted an article on long-term unemployment and how policy advisors were repeatedly sounding the alarms for months but have gone unheard. According to a research paper by policy advisor Elizabeth Pancotti and senior fellow at the Century Foundation, Andrew Stettner, the joblessness spell will continue in the US, leading to further erosion of workers’ skills, their confidence, and with most likely to be even discriminated by their employers.

The research also found that the long-term unemployed were likely to face successive and recurring periods of unemployment, while also having to face the risk of dropping out of the labour market for an indefinite period.

Experts believe that the new President-elect Joe Biden will face the weakest labour market ever in the US history, with rising unemployment, a deteriorating economy, and widening inequality, the article highlighted. Additionally, the solutions he has to offer such as the massive infrastructure investments, clean energy and technology, will be difficult to achieve with a divided and hostile Congress. This undercuts the central goal to rescue the nation from a grieved workforce that has been marred by layoffs during the pandemic.

David Smith

David Smith, an economics editor of The Sunday Times, re-tweeted an article on Rishi Sunak, the Chancellor of the Exchequer having presented his Spending Review 2020 to the Parliament maintaining that his immediate priority would be to protect the lives and livelihoods of people against the coronavirus pandemic, allocating approximately $74bn to fight the virus in 2021.

The governmental process has sought to prioritise funding to support the nation’s response to Covid-19, deliver stronger public services, and invest heavily in UK’s recovery. Consequently, the review pointed towards $133bn capital spending on infrastructure, greener recovery, and the creation of new jobs.

The Chancellor also announced an increase in core departmental spending by $19.8bn in cash terms next year compared to 2020/21. This being an average growth of 3.8% from 2019/20, the fastest in 15 years, the article noted.

7:07 am

Covid deepens urban income and racial inequalities – leading macroeconomic influencers

Most cities in the US are left on their own to tackle the Covid-induced recession, with the only alternative to cut budgets. Economists believe that these cuts hit hardest on those least able to absorb them, i.e. the poor and minority households.

Teresa Ghilarducci

Teresa Ghilarducci, a labour economist focusing on retirement security, re-tweeted about how US cities face Covid surges and budget crises due to repeated lockdowns, and also protests as to which sectors should close. According to Bridget Fisher, Director of SCEPA’s Critical Public Finance project, the pandemic has deepened urban income and racial inequalities, with city budgets being limited to deal with these issues.

He further goes on to state that the disease and death rates are much higher among low-income and non-white populations in the US, such as the Latinos in Los Angeles according to data. He also stated that cities are unfairly advantaged in terms of their budget, with some not getting all the economic benefit. As a result, the politics are out of line with the economics.

Cities close or near to New York, Los Angeles or Chicago also politically do not capture the tax benefits that the economy produces, he added. It is therefore, one structural aspect to consider when the budget allocation is going bad. The other aspect is that cities and states have to balance their budgets unlike the federal government.

With revenues of all types being hit by the pandemic, sales taxes, income taxes and property taxes are all slowing down and will be revalued. Therefore, the only saviour here can be the federal government who can run deficits and ensure putting in more money into cities which they are currently not doing, he emphasised.

Helmut Reisen

Helmut Reisen, an economist, shared an article on how the French government has assembled an expert commission to pay off the Covid-19 debt mountain. Olivier Dussopt, the Secretary of State to the Ministry of Public Action and Accounts, stated that almost a dozen highly professional officials will be tasked to lay down the post-Covid course for the financially battered country. Among all the high-profile business leaders and economists will be Beatrice Weder di Mauro, a Swiss-Italian who advised Angela Merkel, the German Chancellor.

Emmanuel Macron, the President of France, stated that he wanted to avoid taxes to cover the massive financial aid borrowed to save the economy from the coronavirus crisis, the article noted.

The government has already announced approximately $547bn in subsidies and state-backed loans to support the hard-hit sectors such as airlines, automakers, winemakers and small business owners. It has also covered the large bulk of salaries for employees forced to stay home to limit layoffs.

France’s central bank has predicted a GDP decline by almost 10% this year, depending on how long the Covid restrictions will continue thereby limiting government actions. The President further plans to allow some stores to re-open before the holiday season begins as Covid cases decline, the article highlighted.

Megan Greene

Megan Greene, a global economist, re-tweeted an article by Peter Conti-Brown, a Wharton assistant professor, on what’s next for the Treasury-Fed Covid-19 lending facilities. The article noted that the Treasury’s Sceretary Steven Mnuchin’s letter to the Federal Reserve Chair Jerome Powell in November has raised some vital questions after the emergency lending facilities, especially the ones targeted to mid-sized businesses and state and local governments.

Mnuchin’s letter addresses the Treasury’s inability to make new commitments after the December 31 as part of the unified response to the Covid-19 crisis along with the Federal government. He however addressed the need to return the unused funds by the Federal Reserve that can be utilised by the Congress to re-appropriate the $455bn.

Although the Fed is most likely to return the unused funds to the Treasury, it has plenty of options, creativity, and bandwidth to adapt, the author noted. For instance, it can change its theory of emergency lending or completely engage in this lending on its own.

6:59 am

Tackling private debt for Covid-19 resilience – leading macroeconomic influencers

Macroeconomic influencers believe that the number of jobs lost during the Covid-19 pandemic, can be moderated by tackling the effect of the pandemic on private debt that has directly impacted people’s jobs and livelihoods.

Prof. Steve Keen

Prof. Steve Keen, an applied economist at the John Hopkins University, re-tweeted his views on how tackling private debt can aid in providing greater Covid-19 resilience. In his view, the impact of private debt on livelihoods and jobs has been ignored far too long by mainstream economists, one of the reasons why the US walked blindfolded into the financial crisis in 2008.

According to Keen, private debt and unemployment have a staggering correlation that somewhat resembles a Rorschach Blot on a graph. He states that when credit goes up, unemployment goes down and vice versa.

The global pandemic has had a massive blow on people’s jobs and security across the globe. While the US hit a record high of 192,000 Covid cases in a day recently, tens and millions of Americans are at a risk of losing their unemployment benefits in the upcoming month with the expiration of Cares Act provisions.

Meanwhile, in the UK, one in every two young people seem to be unemployed, with the Covid-19 disease hammering people out of employment despite Chancellor Rishi Sunak having spent billions of pounds on furloughs to save jobs.

Adam Tooze

Adam Tooze, a historian and director of the European Institute, shared an article on a Federal Financial Stability Report which states that small businesses have been more adversely affected by the Covid-19 pandemic. Furthermore, strains related with the performance of small business debt may worsen significantly, the report highlighted.

The report suggests that although business debt vulnerabilities seem to have moderated after significantly rising due to the pandemic, they appear to be high relative to the historical change. For instance, vulnerabilities in the leveraged loan market have lessened since May, especially for the larger firms and for sectors that have been less hit by Covid-19 pandemic.

In addition, as households continue to report loss in earnings because of busines closures and rise in unemployment and job losses, household credit quality has been mitigated through new expanded programmes such as direct stimulus payments in the Cares Act, unemployment insurance, and resumption of economic activities, the report emphasised.

John Van Reenen

John Van Reenen, a professor at the London School of Economics and Massachusetts Institute of Technology (MIT), on a no-deal Brexit to be costlier in the long run than the economic damages caused by the Covid-19 pandemic.

Andrew Bailey, the governor of the Bank of England, stated that a failure to strike a deal before the Brexit transition expired in December would stress the London and Brussels economic partnership, leading to disruptions in cross-border trade and loss of goodwill.

While UK’s chancellor, Rishi Sunak believes that Covid-19 posed a greater threat to the economy than a no-deal Brexit scenario, a London School of Economics analysis has earlier predicted that the long-term economic effects of a no-deal Brexit could be two or three times greater than the pandemic-induced scarring over the long term.

7:15 am

Income inequalities rise within advanced economies – leading macroeconomic influencers

Reports suggest that disposable income has risen the most for the top 10% of earners in recent decades. Poorer families have benefited much less from the wider economic growth in most countries. In addition, middle and low incomes were barely higher or less in many countries in 2016 than what they were ten years prior.

Adam Tooze

Adam Tooze, a historian and Director of the European Institute, shared an Organisation for Economic Co-operation and Development (OECD) Economics data that found striking results with respect to high-income economies’ strategies and policies to mitigate inequality. For instance, Adam Tooze tweeted that although Germany was significantly less unequal to the US after taxes and benefits, the country was not more socially mobile as measured by father and son’s incomes. In fact, the UK was much better.

The OECD report further highlighted that Americans born into low-income families are more likely to remain at the bottom on the income ladder than their European counterparts. Additionally, the data found that US children born in the early 1980s were less likely to earn more than their parents did at the age of 30.

The report also noted how escaping the economic divide has become near to impossible, and how poor policies have left millions vulnerable due the Covid-19 pandemic. Consequently, the wider economic gains disproportionately benefit the wealthier classes.

The Gini coefficient that measures income distribution across population segments found the US to be the most unequal high-income economy in the world. The disparities in income reflect a surge in income among the rich population segments, compared to a slow or even falling incomes among the poorer sections. Meanwhile, the middle class has shrunk across the US, Germany, Canada, and Sweden.

Adam Posen

Adam Posen, an economist and President of the Peterson Institute for International Economics (PIIE), shared an article on how China felt the need for more women leaders in state-owned enterprise (SOE). The article noted that the country is looking to deepen SOE reforms as many of them are losing money and are a drag on the economic growth. The China is looking to place gender diversity in SOE leadership on the reform agenda, as part of the post pandemic recovery.

The article noted that women are significantly underrepresented in leadership positions in China’s SOE sector. For instance, out of the 800 senior executives in central nonfinancial SOEs, only 5% are women. And about 7% of women represent central financial SOEs out of the approximately 233 senior executives according to the PIIE report.

The lack of women corporate leaders in China’s SOEs has resulted from many factors including gender discrimination, and the candidate pool of women executives from which leaders are selected to be limited.

Research has found a positive co-relation between board gender diversity and firm performance in publicly traded private firms, but not for state-controlled firms, especially in the context of leaders in private firms being more profit-driven than state firms. These factors suggest the importance of addressing gender diversity in market-oriented reforms within SOEs.

Robin Brooks

Robin Brooks, a chief economist at the Institute of International Finance (IIF), shared a chart on the International Monetary Fund (IMF) gross domestic product (GDP) growth forecasts in 2020.

Brooks is of the opinion that the Covid-19 pandemic is a temporary shock; therefore, there is little reason that the drop in actual or real GDP in 2020 should go hand in hand with the fall in potential GDP. The US, however, is an exception, he added.

Economists believe that the notion of potential GDP used by the IMF maybe the same as used by many central banks, which is that it was partially driven by a supply shock. As a result, the sharp drop in output did not lead to a significant fall in inflation during the pandemic.

8:46 am

London experiences weaker recovery and jobs decline than the rest of the UK – leading macroeconomic influencers

The coronavirus pandemic has led to a record exodus of migrant workers from the UK, with  London’s workforce having almost shrunk by hundreds of thousands. Experts believe that if foreign-born workers do not return, labour and skills shortage will further strain its recovery.

Jonathan Portes

Jonathan Portes, a professor of economics at the King’s College London, re-tweeted an article that discusses the impact of the coronavirus pandemic on London’s economy and its labour market. According to the London Intelligence report, although London experienced some recovery over the summer, its recovery was much weaker than the rest of the UK. Its labour market particularly suffered with a sharp decline in jobs and no job creation.

The pandemic has also affected inner and outer London differently, the article detailed. For instance, Central London witnessed the deepest and longest drop in the consumer economy, while workers located in outer London remain most impacted by the drop in economic activity. Private rents in outer London have also risen continually during the pandemic, the article highlighted.

Additionally, London has witnessed a sharp and steeper increase in unemployment benefits since the start of the pandemic and at the end of October. For instance, the London Intelligence data found that the 300,000 new unemployment claims had been requested for in October, 170% higher than the same period in the previous year. The rise was again steeper compared to the rest of the UK, where claims rose by 120% for the same period, the data found.

Experts believe that although the claimant count dropped since the first lockdown, it is most likely to increase with a second phase of the virus and related restrictions, and due to uncertainties around the coronavirus job retention scheme that covers wage costs for furloughed employees.

Stephany Griffith-Jones

Stephany Griffith-Jones, an economist specialising on financial crises, re-tweeted on why the world needed a bigger response to tackle the coronavirus pandemic. She proposes options along with her collaborators, such as the need for a debt relief for green and inclusive recovery, greater support for emerging and developing economies, and strengthening the global financial safety net (GFSN) to manage the economic effects of Covid-19.

In the view of economists, low- and middle-income countries with unsustainable debt burden should receive substantial debt relief by creditors to provide the fiscal space for bigger investments in Covid-related response efforts, both social and health, greener strategies and climate emergency.

The other important aspect to address is emergency financing to developing and emerging economies, who are hard hit by the crashing commodity prices and depreciation of their currencies. Experts believe that there is an urgent need to reform and expand the GFSN in response to the Covid-19 health crisis.

Though meetings with the IMF and the World Bank in April this year called for the doubling of emergency facilities and the creation of short-term liquidity line to balance external shocks, the measures have been inadequate experts opine.

Dr Arvind Virmani

Dr Arvind Virmani, an economist, forecasts the gross domestic product (GDP) of India to remain unchanged since May 2020 at -5%, while others forecasted it to be as low as -10% initially and now have begun to raise it. This implies a lack of understanding of lockdowns and its impact on the economy.

He further shares a revised chart on India’s GDP. According to the chart, India’s GDP is estimated to contract by 10.6% in the fiscal year 2021 compared to an earlier forecasted contraction of 11.5%. Likewise, GDP growth is estimated to be 10.8% for the fiscal year 2022 compared to an earlier projection of 10.6%.

10:48 am

Millions to lose federal unemployment aid by the end of the year – leading macroeconomic influencers

Experts believe that approximately 12 million workers face the risk of losing federal unemployment benefits by the end of the year if the US Congress does not reach a re-authorisation deal for a second coronavirus stimulus. Millions are expected to lose their homes and meet their basic health and food needs with the economy dipping further in the next few months.

Dean Baker

Dean Baker, a senior economist at the Centre for Economic and Policy Research, re-tweeted on how nearly 12 million people in the US will lose federal unemployment benefits if lawmakers are unable to agree on a second coronavirus relief package.

The onset of the virus saw the Congress spring to action with new unemployment programmes and boosted benefits worth $600 per week. However, lawmakers assumed the pandemic to be in control in a few months, with the extra stimulus having exhausted in July. Additionally, the unemployment aid is due to end despite rising infections in the country, the article noted.

Approximately seven million gig workers and Uber drivers under no payroll benefits, are expected to lose the Pandemic Unemployment Assistance benefits extended by the Congress, as suggested by the Century Foundation that has been tracking unemployment claims during the pandemic.

An additional 4.6 million workers are also expected to lose the Pandemic Emergency Unemployment Compensation extended to those who had lost jobs for an indefinite period, the article highlighted.

Howard Archer

Howard Archer, the chief economic advisor to the EY ITEM Club, shared an article on a Reuters poll of economists who revealed that the euro zone economy was likely to be already in double-dip recession with the gross domestic product (GDP) contracting to 7.4% in 2020. They also pointed at a muted recovery in 2021 despite expectations for a $592bn monetary stimulus.

As Europe grapples with the second wave of the virus, forecasters predict the euro zone economy to shrink to 2.5% in the fourth quarter of 2020 after reporting a record high of 12.6% in the third quarter. Many felt that a double-dip recession was already happening in the last quarter of the year.

However, forecasters predict the economy to grow 0.8% in the first quarter of 2021, and at 5.0% in 2021. Some economists are looking at the availability of vaccines for distribution and administration as an upside potential to recover next year, the article noted.

Michael Clemens

Michael Clemens, a development economist, re-tweeted an article on countries adopting different strategies to mitigate the worst effects of the Covid-induced job crisis globally. The article compares the steps taken by Greece to the rest of Europe and North America. Experts believe that managing labour shocks like Covid-19 requires protecting the jobs in the short-run, extending support to where the shock persists and reoccurs, and crucially enabling job creation when conditions are better.

The pandemic has affected the labour markets gravely and disproportionately, highlighting how it adjusted based on factors such as the severity of the pandemic, the country’s economy, and social contracts between employers and employees. Broadly, countries have adopted two models to protect their workers, the article noted. The first being cash transfers and unemployment insurance to support those who lost jobs, and the second to retain employees through subsidies, short-term compensation, and layoff restrictions.

Greece, among other European countries adopted the job retention approach right in the initial months of the pandemic. And although it managed the virus well through lockdowns and restrictions, it suffered a severe economic downturn and is expecting a further dip during November lockdowns. However, with virtually no jobs created in these months, the country did not report a rise in unemployment when the markets re-opened in early May. In fact, the number of separations were found to be much lower than the previous years, the article noted.

7:55 am

Generation Covid lose out amid economic fallout – leading macroeconomic influencers

According to a survey, young adults aged under 30 years are currently experiencing a heightened sense of anxiety amid everlasting restrictions and unemployment. This is translating into growing resentment among younger adults against their older counterparts, who may be economically sound and hold greater power.

Andrea Garnero

Andrea Garnero, labour market economist at the Directorate for Employment, Labour and Social Affairs of the OECD, re-tweeted an article on how the how the kids of today are losing out because of endless restrictions and unemployment. According to a Financial Times survey, there is growing resentment among people under their 30s as the pandemic disallows activities to resume and people to step out.

The survey further revealed a heightened sense of anxiety among the young adults, who now feel confined because of the growing pandemic. Many of them felt like they had returned to home-schooling, with no interactions, nowhere to go and no extracurriculars. Many had even converted their four-bedroom apartments into a gym, bakery, or food hall.

As per reports, the US has the highest share of young adults, aged between 18 to 29 years, living at home. And although they are at a lesser risk of contracting the disease, data reveals that young adults and students are suffering more than others from the economic fallout caused by the pandemic.

Diane Coyle

Diane Coyle, an economist and a professor of public policy at the University of Cambridge, re-tweeted a discussion on how UK’s Covid response money should be spent to shape the future of the economy, as well as the environment. The discussion between economists Diane Coyle and Dr Matthew Agarwala, highlighted some key findings from the Wealth Economy report that revealed that UK’s response to the coronavirus pandemic stood at over $397bn, and over $13 trillion across the globe. Economists believe that these funds should be invested in a resilient recovery.

The discussion further emphasised on the areas that governments should spend on. For instance, governments’ economic recovery plan should be focused at investments in public funds and in people’s health and skills to deliver the ‘levelling up’ agenda.

The report further highlighted that governments’ spending should be focused at geographical inequalities such as improving people’s access to education, nature, employment that directly impact the productivity and potential of individuals.

Howard Archer

Howard Archer, the chief economic advisor to the EY ITEM Club, a non-governmental economic forecasting group, shared an article on how a McKinsey study highlights Britain’s growing skills shortage over the upcoming decade as the Covid-19 pandemic splits the job market. The UK will have to retrain and reskill its workers to brace the shift to a digitally driven economy, the article noted.

The analysis further reported that approximately 94% of the workforce lacked the skills required in 2030. The coronavirus pandemic has skewed the job market in one direction, which has led to a skills shortage in supply chain analytics and ecommerce fields, while low-skilled jobs are lost and less likely to return.

Consequently, job insecurities have increased for those involved in sales, retail, restaurants and hotel businesses, which usually hires part-time or younger workers. The report stated that one-third of the workforce lacked basic digital skills required by 2030, and that over 10 million people were unskilled to take up any communication, decision-making or leadership roles.

7:01 am

Moderna’s coronavirus vaccine reveals 94.5% efficacy – leading macroeconomic influencers

Moderna is the second company after Pfizer to show 94.5% efficacy of its coronavirus vaccine candidate in its preliminary trials. The company claims it has a longer shelf life when refrigerated and at room temperature, making it easier to store and use unlike the Pfizer candidate that requires refrigeration.

Justin Wolfers

Justin Wolfers, a professor at the University of Michigan, shared an article on Moderna’s vaccine trial which showed 94.5% efficacy against the Covid-19 disease, joining Pfizer in the race to fight the virus crisis. Wolfers tweeted that approximately 95 people had contracted the coronavirus disease in Moderna’s study, out of which five were vaccinated and 90 were administered placebo shots of saltwater.

Wolfers states that the data revealed a huge difference between the two groups, with 11 out of the 95 cases severely affected and part of the placebo group. Economists believe that if the placebo group got Covid at a rate of 20 times that of the vaccine group, then the vaccine could be effective for use.

Moderna is the second company to report preliminary results from a large testing trial, but experts state that there are months before it is marketed and commercialised. Both Moderna and the front runner Pfizer have sought the US Food and Drug Administration (FDA) emergency use authorisation to start vaccinating the populations.

Officials state that the two companies can produce enough vaccine for 20 million people or more in the US by December 2020. Frontline staff, emergency workers, and residents of nursing homes should be the first ones to receive vaccination, they opine.

Ian Bremmer

Ian Bremmer, a political scientist and author, discussed how the world is entering into a second year of the coronavirus pandemic, with some countries such as the Americas and Europe dealing with dire scenarios with the onset of the second or even third wave of infection. The US has surpassed 10 million Covid-19 active cases, the article noted. Although midwestern countries remain most affected, the current wave stretches across the country.

According to John Hopkins, in Latin America, Argentina, Brazil, Mexico, and Peru continue to be major Covid-19 hotspots reporting some of the highest per capita mortality rates in the world.

In Europe, the resurgence of the virus has continued to strain previous hotspots such as Italy and Spain. Additionally, the virus is now spreading towards the south as compared to the first wave which hit northern Italy in spring. Hospitalisations have also been witnessing an all-time high in France, the UK, and the Czech Republic.

Stephany Griffith-Jones

Stephany Griffith-Jones, an economist specialising on financial crises, re-tweeted on a comprehensive debt relief proposal by the Global Development Policy Centre that outlines a green and inclusive recovery from the Covid-19 health crisis for the private sector as well as middle-income countries.

According to experts, emerging markets and developing economies are facing the highest risk to fight the health crisis and protect their vulnerable sections. Additionally, the global economic slowdown has caused many developing countries to use just 30-70% of the government revenue to service debt payments.

The Group of 20 (G20) actively initiated the Debt Service Suspension Initiative (DSSI) in the early months of the crisis to suspend debt service payments for selected low-income countries in the beginning of 2021. However, experts believe it has not been enough to solve the core problems of these countries.

The report calls for the need to go beyond the DSSI requiring all creditors groups to provide a substantial debt relief and not just a suspension to struggling economies, along with the fiscal space for green and inclusive recovery.

7:05 am

Labour calls for emergency laws to stop misleading anti-vaccination news – leading macroeconomic influencers

The Labour party in the UK has called for immediate laws to stamp out dangerous anti-vaccine content online.

Within hours of progress of the Pfizer/BioNTech vaccine announcement, online posts were popping up on social media platforms such as Facebook and Instagram. The misleading information included chats and comments on vaccines causing deliberate harm, the government inserting chips to alter DNA and vaccines as weapons of genocide.

Chris Dillow

Chris Dillow, an economist, shared his views on how Labour’s stand to introduce new emergency laws to stop anti-vaccination fake content online could reinforce anti-vaxxer’s conspiracy theories. Labour is pressing for criminal and financial charges for social media firms who are not removing misleading or fear inducing stories about vaccines, the article noted. The news comes right after progress was announced in the development of the first Covid-19 vaccine.

The government is taking the matter extremely seriously, and has restored commitment from firms such as Google, Facebook, and Twitter to tackle anti-vaccine content online. According to social media firms, false content is described as either being disputed or misleading and have been actively removing such posts as per the terms of their contract, the article highlighted.

However, according to Dillow, the Labour move on this issue rather than on government corruption or its incompetence was a huge disappointment and could lead to bigger problems with anti-vaxxers.

The Labour party also believed that mere commitment by the platforms to disengage or removed government-flagged content was not enough.

Jonathan Ashworth, Shadow Secretary of State for Health and Social Care, stated that such content was exploiting the fears of people and initiated mistrust against the government and institutions. As a result, the party was interested in working with the government to promote vaccine adoption and build trust.

Dr Arvind Virmani

Dr Arvind Virmani, an economist, discussed how economic forecasting has become extremely difficult with uncertainties revolving around the pandemic, which is being compared to the Great Depression or the World War II. However, he also states that forecasting may have become easier with lockdowns, given that the nature and extent of the lockdown is understood.

While analysing the Indian lockdown, for instance, it was found that the entire economy was shut down, except those meant for essential goods and services, largely contributed by agriculture and related sectors.

The Foundation for Economic growth and Welfare (EGROW Foundation) a non-profit research organisation, Virmani added, has estimated that agriculture constitutes 40% of the Gross Value added (GVA) and employs approximately 55% of the work force in the country. This part of the economy has not suffered a setback, he added. Although other economic activities contributing 60% to the GVA and employing 45% of the workers has remained shut from the end of March.

Studying the lockdown patterns in India have thereby helped in estimating that the gross domestic product (GDP) in the first quarter of FY21 to be around -35% year-on-year, according to economists. The whole year’s projection is difficult to establish, with further breakdown of the non-essential category, Virmani added.

Lawrence Lepard

Lawrence Lepard, an investment manager and economist, shared his views on how the first lockdown in the US Treasury (UST) failed to work properly. This prompted the Federal Reserve (Fed) to effectively back it out, after which both gold and Bitcoin destroyed the Treasury on a relative basis.

Lepard further believes that a virus resurgence leading to another Covid-19 lockdown would have the undoubted support of the Fed, thereby reducing the pressure on the UST.

8:07 am

Economic tools aid response to Covid-19 – leading macroeconomic influencers

Leading epidemiologists believe that the tools of economics are helping them to better understand the impact of the Covid-19 disease. Therefore, a collaboration between modelling policies and endogenous factors is pertinent to combat the virus spread.

David Flynn

David Flynn, an economics commentator and historian, re-tweeted on the importance of economists working alongside epidemiologists to assess the impact of the Covid-19 pandemic and design an effective strategy to curb its spread. The article shared by the American Economic Association (AEC) highlights how Boston University epidemiologists such as Eleanor Murray believe that economic tools have helped her better understand the impact of the virus.

Eleanor highlights the importance of economists in studying and responding to Covid-19 in the Journal of Economic Perspectives. She stated that economists were important from the point of view of understanding the impact of the pandemic on businesses and economic activities, and in understanding how people would receive payments.

She also discussed why estimated cases and deaths in some of the early models either by the London Imperial College or the Institute for Health Metrics and Evaluation were widely different because in both the cases researchers were trying to evaluate the spread of the disease, and compare the current health crisis with previous pandemics and outbreaks to derive an appropriate response mechanism.

David Andolfatto

David Andolfatto, an academic, shared an article on how the pandemic has clogged the global economy with paper currency. The article elucidates how the Covid-19 outbreak has caused a global increase in the cash-build up across economies such as Canada, the US and UK. However, despite the increase in banknotes circulation since the Covid outbreak, ATM cash withdrawals declined by 60% in the UK, the article highlighted.

Economists first believed that the unusual rise in banknotes circulation across western countries in March and April, may have been the result of cash withdrawals as people wanted enough resources to deal with the virus crisis. However, experts have learnt over the months that the rise in cash-in-circulation has not resulted because of withdrawals as people were spending less and most of the immediate and necessary transactions were taking place digitally.

Experts believe that the only explanation for the persistent rise in banknotes in the economy is the result of less cash being returned to banks and ATMs. Consequently, individuals and businesses are not redepositing the cash into banks, which is leading to a clog and preventing the smooth and regular flow of returns. In the case of Europe, withdrawals of euro bank notes have exceeded returns between 2007 and 2020. This has led to cash bulge in the economy over time. However, European Central Bank’s (ECB) data reveal that there has been a sharp decline in both during the pandemic, with returns of cash plunging to a level that has caused the huge cash build-up in circulation.

Ben White

Ben White, a chief economic correspondent, re-tweeted on the new president of the US, Joe Biden being faced with deep wounds from Covid-19, a staggering economy, and a Republican Senate. While Obama faced similar challenges to deal with during his term as president, experts believe that he had better tools to deal with the challenges ahead of him.

Despite the vaccine development rush, the country still awaits a dark winter with new virus outbreaks, and meagre sings of a second fiscal stimulus. Economists believe that the Biden team would have to eventually depend on the Federal Reserve to act, which would lead to investors becoming richer.

Additionally, the US economy is still grappling with high unemployment rates and is approximately 10 million short of jobs since the pandemic hit. Small businesses stay helpless and at the verge of bankruptcy as they hope for more Federal support. Consequently, the current course of the virus coupled with the prospect of a divided Congress pose the toughest choices for the Biden team ahead, economists opine.

7:57 am

Women disproportionately impacted by Covid-19 – leading macroeconomic influencers

Women have been disproportionately impacted from the slowing down of the Australian economy, a year of natural disasters, and the Covid-19 health crisis and related economic contraction. Experts believes that the long-standing gender inequities that existed prior to the virus crisis have been exposed and intensified by the pandemic.

Jim Stanford

Jim Stanford, an economist, re-tweeted an article on the need to address gender inequality in rebuilding after the Covid recession. Contributed by a senior economist at Centre for Future Work, Alison Pennington, the article summarises how women have been excessively impacted Covid-19 induced recession. Unlike other recessions, where economic contraction began in male-dominated sectors such as construction, this one whether at home or workplaces has impacted women disproportionately.

Women have been over-represented in insecure and low-paid jobs and carried out a majority of unpaid domestic and care labour before the pandemic. Today, a majority of the women who represent frontline workers and essential work are most likely to be under-paid or have insecure jobs, due to discrimination or assumptions that they are less skilled or the work being handled is complicated or difficult to be effectively performed by women.

Experts are of the opinion that government responses have not been adequate to remove these gender inequalities. Women faced violence and harassment before the pandemic, while Covid-19 has intensified the risks further at workplaces and at home. According to reports, approximately 21% or 1.3 million women workers have lost their job due to the Covid-19 crisis or are constantly facing pressures to prove their capacity to work and be paid for it.

Colin Williams

Colin Williams, a public policy professor, shared an article on the likelihood of a million people in the UK planning to give up self-employment because their earnings had been exhausted due to the Covid-19 pandemic. A London School of Economic (LSE) study revealed that the two-decade long trend of people choosing to work for themselves was under threat, much ahead of the release of the official data that was most likely to report a jump in unemployment rates.

The LSE’s Centre for Economic Performance (CEP) study further found that in August, when economic activities resumed after the first lockdown, about 58% of the UK’s self-employed workforce had less work than earlier. About one-fifth of the self-employed workers contemplated quitting work altogether, rising to 58% for those below 25 years.

Stephen Machin, co-author of the report and director of CEP stated that self-employment, a key trend in the labour market, was showing early signs of reversing. The CEP, who surveyed 1,500 self-employed workers, also found that approximately 32% of the surveyed workers had less than 10 hours of work every week in August.

Simon Wren-Lewis

Simon Wren-Lewis, an economics professor, re-tweeted an article on building a green stimulus for Covid-19 recovery. Borrowing aggressively from the New Economic Foundation (NEF) analysis published earlier this year, the Labour party announced a £28.3bn ($37.5bn) boost in priority projects over the next 18 months that would help the country reach zero carbon and create approximately 400,000 full-time jobs by the end of 2021.

The Labour’s Green Economic Recovery plan aims at alleviating the unemployment crisis and meeting the climate emergency. This would directly contribute towards providing 400,000 clean and green jobs across the country, retain workers through emergency training programmes focused at enhancing the skills of people towards greener initiatives, and rebuild business with a national investment bank that will help reach a net-zero economy.

Experts believe that the Covid-19 crisis and its economic impact is taking place against the backdrop of a climate emergency. Although carbon emissions have fallen due to reduction in economic activities and travel, future higher emissions are being predicted without structural changes. The country also faces high unemployment rates which is expected to rise to 1.5 and 3.1 million towards the end of 2021, up 1.8 million from 2019.

7:08 am

Federal policymakers remain optimistic – leading macroeconomic influencers

Federal policymakers remain optimistic about a virus resurgence posing lower risks to the US economy. They believe that the economy will grow next year with rebounding economic activities. Policymakers have also requested for a second relief package to prevent the economy from long-lasting damages.

Pedro Nocolaci da Costa

Pedro Nocolaci da Costa, a federal reserve and economy correspondent, re-tweeted an article on Robert Kaplan’s, the Dallas Federal Reserve Bank President, optimism about a virus resurgence posing lower risks, particularly with regards to overwhelmed hospitals in certain parts of the country.

Although the country is currently recovering from a deep contraction, new coronavirus cases have surged in the US, prompting authorities to impose stricter restrictions in some  cities in Texas and Utah.  Kaplan believes that the economy will be 2.5% smaller towards the end of this year but will grow about 3.5% next year as economic activities rebound. However, he agrees that the rise in infections will slow the pace of economic growth in the last quarter of the year and early next year, the article noted.

Kaplan also believes that the risk of households running out of the savings provided by the government’s first stimulus package is not evident yet. Therefore, the fiscal aid has managed to keep household spending from declining in the event of rising unemployment and a slowed economy.

William E Spriggs

William E Spriggs, an economist and professor, shared an article investigating the truth around the number of applicants having applied for unemployment insurance benefits amid the coronavirus pandemic and the number who have received payments when they needed it. According to data collected from the US Department of Labor and the US Treasury, only half of the applicants received unemployment insurance payments amid the six-month long Covid-19 recession.

The CARES Act provision that offered an additional $600-per-week in unemployment assistance, also known as the Pandemic Unemployment Compensation (PUC) made the stakes higher to receive unemployment insurance. In addition, those who received the benefits were first offered and then ripped off a baseline of economic security that nearly 25 million people depended on.

Reports suggest that more than one million filed for unemployment benefits every week and since the beginning of the recession. However, the percentage of claims being paid jumped from less than half in the end of April to more than half, or 56%, by the end of August. This is indicative of the ongoing delays in payments, leaving workers waiting for basic life-sustaining needs.

David Beckworth

David Beckworth, a senior research fellow at the Mercatus Center at George Mason University and a former international economist, discusses the economy, the social capital project, the K-shaped recovery and monetary policy for a post-Covid economic recovery with Alan Cole, a senior economist at the Joint Economic Committee of Congress.

Discussions revolved around the top priority of economic policy to avoid future downturns and recessions such as the Great Recession and Covid-induced one today. Another revelation by the Social Capital Project examined the lives of prime-age men without jobs that indicated poor mental health, isolation and lower participation in civic activities.

The economists also discussed output gaps caused by a spending pullback in consumption and investments that often lead to a decline or even slowing down in nominal gross domestic product (GDP). Consequently, shocks in nominal GDP or the money spent create shocks on the real GDP or the good and services purchased, and output gaps as prices become volatile in nature.

7:40 am

US jobless claims rise amid Covid recession – leading macroeconomic influencers

Economist believe that joblessness and unemployment are the not the same thing, and despite US jobs having improved since the Covid-19 outbreak jobless claims seem to have risen above 21.5 million which is more than double the number of unemployed workers reflected in reports.

Jason Schenker

Jason Schenker, an economist, shared his views on how US jobs had improved since the initial outbreak of Covid-19 and the associated recession. However, it was important to understand the scale of improvement, he added. For instance, the latest US jobs report found 11 million people to be unemployed in the US in October, with the actual number being probably higher than reported

He also highlighted the difference between joblessness and unemployment, especially to understand employment data stating that while the US Bureau of Labor Statistics was responsible for unemployment rate statistics, the US Department of Labor handled the joblessness data.

According to data collected from the Prestige Economics and the Futurist Institute, for instance, the latest unadjusted weekly jobless claims found more than 21.5 million people to have claimed for jobless insurance benefits during the week ending October 17. This was double the number of people reported unemployed according to the monthly jobs report.

Antonio Fatas

Antonio Fatas, an economics professor, re-tweeted about how fundamentally misguided economists’ fears were about zombie firms or money-losing firms that have managed to stay afloat either due to abundant profit or Federal Reserve and Treasury support. He believes that weakening businesses are consequence of a weak economy and the cause of one, therefore experts should stop worrying about them draining the economy, leading to slower recovery and productivity. In fact, he believes that policy initiative to kill or shut these firms will dismiss employees and pay off creditors, turning the risk of a recession into a depression.

According to Deutsche Bank Securities, about one in every five publicly traded US companies is a zombie firm, which is has doubled the since 2013. The Post and The Economist summarised the growing size of zombie firms in the US to be a rising concern to stabilise the economy.

A 1990s research on Japan reveals that the existence of zombie firms in an industry makes it difficult for other non-zombie firms to thrive and do better. It is further argued that the gaps in financial regulation and bankruptcy procedures cause creditors and banks to delay foreclosure of nonperforming loans to zombies. This enables them to function if they can continue to pay their employees, implying that better regulation can shut down zombies and allow efficient competitors to grow and thereby boost economic growth.

However, experts believe that the cost of killing zombie firms in an already low operating economy could be high. For instance, killing zombie firms will wipe out the incomes of workers to spend on goods and services. This decline in spending will further cause the GDP to decline more than 100% of what the firms could produce via a Keynesian multiplier effect where the economy does better when the government spends.

Diane Coyle

Diane Coyle, an economist, re-tweeted on the scarring effects of downturns on young workers. Studies spanning Europe, Japan, and North America have further concluded that labour market entry during a downturn can cause earnings to fall for up to 10 years after graduation.

The Australian data collected between 1991-2017 reveals that the Covid-19 shock has reignited the scarring effect of the Great Recession, raising concerns about the future earning capacities of the so called ‘corona class’ and the class of 2010 which was still recuperating from the Great Recession brunt.

Recessions disrupt the worker-firm match quality, leading to scarring effects fading with time when workers move to more productive firms. Experts suggest that a timely stimulus and structural reforms can help reduce the scarring effects of a recession.

8:19 am

Victoria lockdowns confront new Covid-era work reality – leading macroeconomic influencers

As the recession deepens, millions remain unemployed, while insecure workers continue to face hardships. Experts believe that the pandemic is a clarion call to create not just more jobs, but quality jobs through more secure labour markets.

Jim Stanford

Jim Stanford, an economist, re-tweeted on how the pandemic has shone light on the growing menace of insecure work, mass displacements, remote working trends, and polarisation, with those in the most insecure jobs removed first in the crisis. More than half of Australia is employed in precarious, temporary, casual, and part-time jobs or are self-employed, the article by Centre for Future Work noted. Precarious jobs led to not just greater job losses during the coronavirus crisis, but greater community spread of the virus as many were in the practices in private aged care systems where people held multiple jobs leading to transmission between facilities.

The Victoria lockdowns have revealed that work from home, once a novelty, is now wearing thin despite the relaxation in top-down workplace practices. Well-paid professionals in permanent jobs are also incurring social and economic costs, with risks mounting to run their homes, work long hours, and face income and job insecurities.

Australians’ tendency to work overtime is also expected to be accelerated by the home workplaces. For instance, the Australian Council of Trade Unions (ACTU) found that at least 40% of the people working from home are working overtime and most of them are not being paid for the extra work hours.

Working during the pandemic has also heightened the levels of anxiety among communities, with many subjected to mental health problems. Reports suggest that more than half the people working from home have increased stress, depression and are inclined to self-harm.

James Picerno

James Picerno, an editor, shared an article on how US weekly unemployment claims seemed to have dropped slightly over the last week, indicating labour market recovery while the Covid-19 pandemic intensifies and fiscal support ends. Despite the recent decline in claims, it is too early to generate optimism as the country continues to witness rising claims beyond any previous recession since the 1970, Picerno added.

Additionally, the economy is most likely to plunge into another period of uncertainty as the government delays a second coronavirus relief package and no signs of business investments.   Chris Rupkey, chief economist at MUFG in New York, stated that it is most likely that a second wave of layoffs will hit the economy due to rising coronavirus cases, and already hit businesses will be forced to stay shut or bankrupt furthering the removal of workers.

State unemployment benefits fell to a seasonally adjusted 751,000 for the week ended October 31. While claims remained above the 665,000 peak during the 2007-09 recession, they have dropped from 6.867 million in March.

Alberto Bagnai

Alberto Bagnai, a politician and economist, re-tweeted on southern European governments’ refusal to fully participate in the fiscal integration of a new €750bn ($886bn) jointly funded facility that seeks to provide loans and grants to member states as part of the Next Generation EU project.

Several countries such as Spain and Italy remain unmindful of the dangers of their own finances and their refusal to the loans make the European Central (ECB) less likely to purchase their sovereign bonds, which in turn will increase their rates and cause budget pressures.

Economists elucidate that Southern governments’ refusal to accept the EU loans made it difficult for the ECB to provide the monetary support through bond purchases. Therefore, countries should commit now if they want the ECB to continue providing them the support, the article noted.

8:12 am

Trump’s approval ratings fell amid a resilient economy – leading macroeconomic influencers

The US government defied dire predictions of a slowdown in 2019, with wages rising, unemployment falling and markets soaring. The strong GDP and an upswing in the stock market gave Trump a powerful message to own. However, polls revealed an overall fall in his approval ratings even though the economy stays resilient.

Ben White

Ben White, a chief economist correspondent and columnist, tweeted on how pundits have underestimated the importance of pre-pandemic economic growth for US citizens. He shares a 2019 piece depicting how Trump defied doubters with a surging economy. Even though the economy displayed resilience, Trump’s overall approval seemed to be falling as per polls, the article noted. Polls further revealed that the reason why the White House was focusing on the economy was because Trump’s approval rating fell to 39% due to the Muller report, but his rating on economy remained as high as 58%.

Republicans were also worried about Trump’s irrational moves that could reignite a sharper slowdown of the economy, leading to US pulling out of the North American Free Trade Agreement (NAFTA) or Trump imposing sharp tariffs on the automobile sector. The economy was already vulnerable due to a sharp decline in federal spending. Renewed trade wars could further push growth down, economists believed.

 

Mohamed A El-Erian

Mohamed A El-Erian, a businessman, discussed how markets seemed to be rationally configured even though it was quite volatile now. However, the upswing in the stock market, low yields and the pressure on the banks, was consistent with how the economic challenges had to be met with and Covid-19 fought against in a divided country.

He further added that a second fiscal stimulus cannot be expected, and therefore fed intervention was important to remove bad outcomes and to understand that overcoming Covid-19 will not be easy or quick. Therefore, the stay-at-home stocks are better.

David Rothschild

David Rothschild, an economist, shared his views on how the senate was going to block all necessary relief to New York to recover from the Covid-19 health crisis, with taxes increasing taxes and/or reduction in services.

Yet, the federal government was going to receive $22bn more in the form taxes. Therefore, he did not conform much to the idea of federal dependent states like Kentucky receiving subsidies from tax rich states.

Daniela Gabor

Daniela Gabor, an economics professor, re-tweeted about a chart shared by chief economist Robin Brooks. The chart highlighted the daily tracker of real money flows and how economists warned that a big risk-off was building in emerging markets.

The real red flag was how the weak inflows were, as compared to the big outflows in the beginning of 2020. The most near-term catalyst of change could be the US election. However, the much bigger and underlying risk-off driver were the huge Covid-19 second waves across all places, Brooks added.

9:01 am

San Francisco a ghost town amid high taxes and lockdown restrictions – leading macroeconomic influencers

San Francisco is currently experiencing desertion due to rise in Covid-19 infections. The city first announced stay at home restrictions in March that led to a 12,200 virus cases and 145 deaths among its 900,000 residents. However, a recent flare in cases is forcing residents to re-locate to suburbs with little hope of the city re-opening.

Prof. Steve Hanke

Prof. Steve Hanke, a John Hopkins economist, shared an article on how San Francisco is turning into a ghost town amid rising taxes and looming lockdown restrictions. This has caused many businesses and residents to shut shop and leave town. Those living in the Bay Area are beginning to wonder why they are paying skyrocketing taxes for a city that has completely shut down business activities and movement to curb the Covid-19 virus infection and fatality rates.

Reports suggest that the entire downtown is deserted, with no sign of food trucks and local workers. Even the big techs have abandoned the city to work remotely, residents have moved out into the suburbs for safety and rents are crashing in the city, the article noted.

Business owners are sceptical about the city returning to normal. They suspect that it could take up to 10 years looking at the pace at which people are leaving the city. San Francisco was re-opened recently due to a fall in coronavirus cases. However, city dwellers believe that it is temporary and that case numbers are likely to rise in the winter ahead and therefore it is not long for the state and local governments to take draconian measures to tackle the health crisis.

Konstantina Beleli

Konstantina Beleli, an economist and consultant, discusses how cities across the world are facing heightened degrees of poverty and inequality due to the Covid-19 pandemic. Reiterating the words of Claudia López, the Mayor of Bogota, she adds that the poverty rates in a capital of 7 million citizens have risen to 26% in 2020, up 15% from 2019. Additionally, unemployment rates have doubled to 19% in cities where half the workers are engaged the informal economy.

The article elucidates how the coronavirus pandemic has exposed pockets of the once invisible urban poverty that has forced city mayors to become frontline responders and directly intervene in health and welfare measures to support the worst-hit and poorest sections of the population.

The World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus stated that the implications of the virus are being experienced the most in urban cities, forcing city mayors to take bold actions. Claudia López, Bogota’s first mayor, for instance, has ordered a direct monthly funding to approximately 7,000 households that will continue through till the end of her entire term of three years.

Howard Archer

Howard Archer, a chief economic advisor, shared his views on how the UK public’s inflation expectations have stabilised in October after a spike in September with the second wave of the coronavirus pandemic. Inflation in a year’s time stayed put at 3.2% in October, according to Citi Bank and YouGov reports.

Inflation also seemed to have eased to 3.5% from 3.6% in September in five to 10 years’ time, the article further noted. Citi economists are of the opinion that household inflation expectations held steady, but further spike could inflict more challenges.

7:20 am

For-profits US colleges make a comeback amid the Covid-19 pandemic – leading macroeconomic influencers

Experts opine that policymakers, students and voters alike should be worried about the rise in for-profits colleges in the US, that has been witnessing an upward trend much before the current recession and the pandemic, induced mainly by the administration’s inattentiveness to regulate and restrict predatory recruitment practices.

Susan Marie Dynarski

Susan Marie Dynarski, an economist, re-tweeted on the resurgence of for-profits colleges in the US, driven mainly by the Covid-19 recession, closure of public and non-profit institutions and favourable government policies. The influencer shares an article by Stephanie Cellini, a public policy and economics professor, on why this should be a reason for concern.

A National Student Clearinghouse report found an alarming increase of undergraduate enrolments in for-profits, which rose by 3% over the previous year compared to a sharp 9% decline in public community colleges.

The data saw more alarming patterns for first-time enrolments. According to the report, enrolments in for-profits colleges rose by 13% for first-time students aged between 21 and 24 years, and by 15% among those aged between 25 and 29 years. The author warns that it is a concerning trend as for-profits produce lower earnings and higher debt for students than other institutions.

Peter Morici

Peter Morici, an economist and national columnist, shared an article about US state governments and cities paying millions of dollars to consulting firms to help fight the Covid-19 health crisis. While the federal government has left the states to tackle the pandemic on their own, the struggle for unemployment insurance claims and medical supplies have led state government to pay huge sums of money to consultants for delivering medical equipment and also staff call centres to manage worker benefits.

However, some states are reaping minimum benefits for the millions being provided to consultants, the article noted. This could be the reason states are facing yawning budget gaps, Morici added.

McKinsey and Deloitte Consulting are the two major US consulting firms that have acquired $182m-worth coronavirus contracts. Caroline Buckee, an epidemiology professor at Harvard’s T.H. Chan School of Public Health is of the opinion that consultants are looking at the health crisis as a massive economic opportunity to derive maximum gains from.

Daniel Lacalle

Daniel Lacalle, a chief economist and author, shared his views on inflation not being a social policy and that real inflation has more than doubled the official levels during the Covid-19 pandemic. In fact, a study by Alberto Cavallo, a Harvard professor, he adds, stated that the official inflation does not reflect the changes in consumptions patterns.

Another Wall Street Journal article stated that prices of essential goods were rising to up to three times the rate of official consumer price index, despite the overall inflation number remaining subdued. Therefore, while the prices for hospitality, leisure and technology fell, those for essential and daily goods rose faster than nominal and real wages.

Although central banks claim that the price rise is not due to monitory policy but market forces, he adds, it is the former which induces the price rise. Therefore, it is no surprise that the European Central Bank is constantly worried about low inflation, amid rising protests on the loss of purchasing power and savings of the middle class in the Eurozone, he adds.

7:47 am

A prolonged recession can drive down asset performance further – leading macroeconomic influencers

Experts believe that investors need to adjust their expectations and seek assets that are both competitive and sustainable, while being aware of the risks related with higher-returning assets.

Shane Oliver

Shane Oliver, an economist, re-tweeted on what investors maybe expecting amid the global crash in economies caused by the pandemic. The article shared highlighted that despite one of the deepest crises since the Great Depression, stock markets showed resilience and investors were rewarded for their confidence.

Investors will be looking at adjusting their expectations for returns based on several factors in the context of stable but low yields. These factors will have to generate capital growth but are currently softening at the macroeconomic level. For instance, households are still reluctant to take debt, there is low growth of the labour force compounded by unemployment, and growth in political risks and geopolitical tensions.

While bonds are likely to remain low, infrastructure and commercial property are expected to do relatively well, with Asian and emerging markets showing greater growth potential, the article noted.

Andrew Sentence

Andrew Sentence, a business economist, shared a chart on how the second phase of lockdown in the UK will drive double-dip recession in the fourth quarter. Based on the results of the first lockdown phase that was imposed in April and May, it is expected that the country’s gross domestic product (GDP) will fall by approximately 8% in November.

However, the loss is approximately 17% of the GDP a year ago, he further added. This loss is the result of government policies, rather than the pandemic, Andrew tweeted. A peak in coronavirus cases in August and related deaths has alarmed policymakers and has led governments to force further restrictions in the winter across Europe.

Nathan Nunn

Nathan Nunn, an economics professor, re-tweeted on a Stanford University study that stated that President Donald Trump’s campaigns held between June and September have led to a rise in about 30,000 new infections and more than 700 deaths.

Stanford authors examined the impact of the Trump rallies that took place between June 20 and September 30 and found that the communities where the rallies were held faced a spike in infections and mortalities compared to regions which did not host rallies. The study also revealed that public health warnings were not complied with, such as wearing masks and avoiding large gatherings to curb the spread of the Covid-19 disease.

The president has been continuously criticised for holding public rallies in states that are currently experiencing severe coronavirus outbreaks and not wearing a mask himself. Authors stated that the study was conducted to caution policymakers about the trade-offs related to holding large public events and rallies.

Luis Garicano

Luis Garicano, an economist and politician, re-tweeted about his interview with Jakob von Weizsäcker, chief economist of the German ministry of finance and ex-member of the European Parliament. Jakob talks about the recovery and transition of Germany in the eurozone crisis. He stated that Europe was facing a real macroeconomic problem, where some countries which had not been so hard-hit by the first wave of infections are now worse off and forced to adopt tougher restrictions and public health measures.

He also adds that in the last crisis, it was much easier for the monetary policy to lower interest rates, but today the interest rates are zero or even negative. Therefore, fiscal policy needs to play a more prominent role in lifting the economies.

About the idea that this could be a Hamiltonian moment for Europe, or the proper funding of the present debt, he stated that careful steps have to be taken as large sums of money is involved and that Europeans will have to see initiatives through such as the European unemployment reinsurance programme.

8:23 am

US economy reported record growth in the third quarter, but Covid-19 scars last – leading macroeconomic influencers

The US economy grew at a historic pace in the third quarter. However, experts believe that this could be temporary with dwindling government support, and the scars left behind by the Covid-19 recession are likely to take a year or more to heal.

Konstantina Beleli

Konstantina Beleli, an economist, shared an article on the US economy posting record growth in the third quarter, a direct result of the injection of $3 trillion as part of the pandemic relief package that drove consumer spending. However, experts believe that the health and economic damages caused by the Covid-19 crisis could take over a year for the country to recover.

The gross domestic product (GDP) surged at 7.4% on a year-on-year basis in the third quarter, after having dipped to a low of 9.0% from April to June this year. The Commerce Department, however, stated that the 33.1% annualised growth rate was not enough to ease the human tragedy caused by the global pandemic, with thousands of US citizens still unemployed and more dead.

Economists had predicted a 31% growth in GDP between July and September, as the economy slipped into recession in February. The government’s relief package has helped boost consumer spending which alone contributed 76.3% to the spike in GDP. However, depleting funds and uncertainties around a second round of rescue, swell in cases and restrictions on businesses, are indicative of a slow recovery from the pandemic.

Shane Oliver

Shane Oliver, an economist, shared a chart on Eurozone’s economic confidence. He tweeted that it remains unchanged at 90.9 in October. He further added that although the European Central Bank (ECB) was on hold, it will take definitive actions and measure all methods in the December meeting to back the loss in impetus in the recovery and the rise in coronavirus cases.

Therefore, more quantitative easing (QE) or relief packages will be made available by the central bank to boost economic activities through the purchase of government bonds or financial assets, along with cheap bank funding, he added.

Adam Tooze

Adam Tooze, a historian and professor, re-tweeted on the US economy having to grow at 4.5% annually starting from the fourth quarter of 2020 to return to normalcy by the end of 2022. Despite the massive surge in GDP of 7.4% in the third quarter, which is equal to a 33.1% annualised growth rate, the US economy had a long way to recovery, he added. The article shared by the influencer highlights that the US economy remains distressed and 3.5% worse off than it was towards the end of 2019.

The article however emphasises on a rapid drop in living standards, where the average American being 11% worse off in the second quarter and 5% worse off in the third quarter due to the growing pandemic.

The Bureau of Economic Analysis data further confirmed a huge gap in economic activity in the third quarter compared to the trend implied by 2017-2019 growth rate. However, the rebound in growth has been much faster than in the financial crisis, wherein the drop in GDP was further stained by a slow recovery. However, the danger still looms for the US economy, which is less likely to achieve the 4.5% annual growth rate amid high unemployment rates and erratic government support.

Claudia Sahm

Claudia Sahm, an economist, re-tweeted about a KPMG and Haver Analytics chart that highlighted the services component of GDP, which is far below recent range. She added that services consumption normally remains stable, while goods consumption falls during a recession. As a result, people do go out to meet their essential needs and run errands such visiting a dentist or getting a haircut.

On the contrary, the chart reveals that the coronavirus pandemic has led to a fall in services consumptions and a rise in goods consumption, she added.

7:26 am

Covid recovery demands bigger thinking – leading macroeconomic influencers

Experts believe that a proper Covid-19 recovery must start with bigger thinking among leaders.

House prices have risen in many Australian cities due to Covid, and the home ownership rate has dipped to its lowest in 60 years, making it even harder for younger people to own a house.

Andrew Leigh

Andrew Leigh, member of the Australian house of representatives and a former economics professor, shared an article on how today’s crises demand greater thinking in the parliament. For instance, he tweeted that at the end of the World War II, federal governments aimed to lower unemployment rates and increase house ownership, and this strategy worked for Australia. He further adds that a white paper produced in 1945 focused on the need for high-skilled jobs, ways to increase productivity, and ensuring that workers received a fair share of the output.

Leigh further emphasises the need for the government to focus on full employment rather than stall for a long period of elevated unemployment to overcome the damages inflicted by the coronavirus pandemic, especially on inequality. A Harvard-based researcher, for instance, revealed that two-fifths of the jobs in Australia can be done at home. However, there were huge gaps between high and low-paid occupations. For example, less than one-fifth of the jobs paying less than $800 for a week permitted telework, compared to more than three-fifths of the jobs that paid more than $1600 per week.

He believes that Australian leaders will have to think bigger to reduce inequality in the rebuild. For instance, improve access to universities, provide funding to universities, and improve the quality of schools.

Fabio Ghironi

Fabio Ghironi, an economics professor, shared a chart on the monthly and quarterly US gross domestic product (GDP). Providing insights from the chart, Fabio tweeted that the GDP had not yet returned to pre-Covid levels.

The chart also highlighted the quarterly change in average from the first quarter to second quarter to be -9.0%, while it progressed to +7.5% from the second quarter to the third, indicating gains in Q3 which actually took place in Q2, he added. Experts predict a period of below-trend growth after 2020, thereby balancing the risks between a recession and continued trend-like growth.

Analisa Packham

Analisa Packham, an economist, re-tweeted on how data confirmed that approximately 15% of Americans lived in households where at least one member used unemployment insurance benefits to meet the spending needs incurred in the previous week in mid-August. The data further revealed a lack of progress among communities of colour during the Covid-19 crisis, where Latinx adults were more likely to have used their savings or sold items to procure the needs in the previous week.

Data further supported the fact that the US was experiencing what is being referred to as ‘K-shaped recovery’, where higher-income households have almost fully recovered from the pandemic woes and disease, while lower-income communities are continuing to suffer.

Growing concern over the progress of lower-income families, and more specifically people of colour, is expected to be a result of underrepresentation among unemployment insurance (UI) recipients and were therefore receiving lesser benefits.

Data collected from the first phase of the US Census Bureau’s Household Pulse Survey further revealed that 15% of households were unable to pay their rent, with Latinx and black communities being the most affected.

8:45 am

Latinx workers face devastating job losses in the Covid-19 recession – leading macroeconomic influencers

Economists believe that Latinx workers have suffered more economic distress than their white counterparts since the spread of the Covid-19 disease in the US. Approximately 14.7 million Latinx workers lost their jobs since February 2020, with payroll enrolments being 10% below its February levels in the end of June.

Marie Mora

Marie Mora, an American economist, thanked Sarah Jacobson, an environmental economist for having heard of her talk on the pandemic and its impact on Latinx workers with Scott Horsley, an economics reporter for the non-profit media organisation, National Public Radio (NPR). Mora talked about how Latinx communities are suffering disproportionately due to the Covid-19 recession because of their overrepresentation in some of the worst hit industries where job losses are much higher.

Additionally, further outbreak of the disease in Arizona, Texas, California, and Florida, where a larger section of the US Latinx communities live, suggest that Latinx workers are facing the worst economic distress and health damages than their white counterparts since Covid-19 began spreading.

Latinx communities in the US work under a bigoted immigration regime where workers are disempowered at workplaces through low wages, and lower access to both health care and better job opportunities. With the spread of the pandemic, the communities have become even more vulnerable to inadequate workplace safety.

Caroline Krafft

Caroline Krafft, an economist, shared an Economists & Crises report revealing how Covid-19 has unfolded a state of crises, thereby escalating climate urgency and racial injustices that have further widened the gap between communities and societies.

The report, which is based on a survey conducted among 920 economic students across the world, investigated how well-prepared communities, economists, and governments, were to face the pandemic and the social and environmental crises arising from it. Approximately 78.5% of the students agreed that the health crisis should be a turning point in how economics is taught.

The report further highlighted the importance of rethinking economics, and economists receiving training methods that are critical, interdisciplinary, and pluralist to tackle real world problems.

Eric Mayersson

Eric Mayersson, a senior economist, re-tweeted on how eurozone banks are pulling back from lending households and businesses as they prepare to tackle the rise in bad loans that are arsing due to the second wave of Covid-19. A European Central Bank (ECB) survey revealed the tightening of credit standards on loans to firms, indicating vulnerability of hard-hit sectors and uncertainties revolving around prolonged fiscal support.

As a result, consumers and eurozone companies find themselves losing access to bank credit, in the event of even more tighter government restrictions because of the resurgence of coronavirus infections. Spanish banks reported the most drastic tightening of their lending standards and decline in loan demands in the third quarter, compared to French and Italian banks, the survey detailed.

David Wessel

David Wessel, a journalist and writer, shared an article on how foreign direct investment fell drastically in the US and Europe in the first half of 2020, but not in China. The United Nations Conference on Trade and Development (UNCTAD) data reported a 61% drop in inflows in the US, 29% in Europe, and only 4% in China, indicating that the largest economy had suffered more damage from the pandemic.

On the contrary, China seemed to have attracted foreign investments amounting to $76bn in the first half of the year, as compared to US which attracted $51bn. The US ranks first in global investments of businesses overseas, while China follows next.

UNCTAD had earlier forecasted China to be a big loser in March, as the country was the epicentre of the disease and expected global investment flows to decline by 15% through 2020. However, China reopened its economy in April and contained the virus with fewer restrictions, than the US and Europe which remained closed during the period.

7:24 am

Projected global GDP growth rate in Q3 may not represent true growth – leading macroeconomic influencers

Experts and analysts have forecast global GDP to grow at more than 30% in the third quarter. However, as countries across the world struggle with rising unemployment rates and struggling business sectors, these figures may be misleading and not indicate true growth. Macroeconomic influencers share their views on the Covid-19 impact.

David Wessel

David Wessel, director of Hutchins Center on Fiscal & Monetary Policy, shared an article on how third quarter GDP figures may be misleading. Analysts have projected a growth rate of more than 30% in the third quarter, although these figures may not translate into actual growth.

The global economic growth may still be 4% lower than that in 2019, even if the projected 30% growth is registered as forecasted by analysts. Further, growth data in the US is reported on an annualised basis and any changes in growth can be misleading. Considering the low level of growth rates in the previous two quarters, any growth in the third quarter may seem huge.

The article notes that the ideal way to look at GDP growth is to measure other factors such as the number of hours worked, which are still low and unemployment rates, which continue to grow. Direct action will be needed to address these issues and stimulate growth, the article noted

Matthew E. Kahn

Matthew E. Kahn, Bloomberg Distinguished Professor of Economics and Business at Johns Hopkins University, shared an article on how the pandemic has worsened the already existing issues in the Chinese economy. The country has achieved four decades of fast growth lifting majority of the people from poverty, but the pandemic has exposed weaknesses in this approach.

China has focused more on infrastructure spending and providing tax breaks to large corporations instead of supporting families affected by the pandemic. Using this approach is expected to widen the gap between the rich and poor families, which is already one of the highest in the world. Millions of low and middle group families are having to work fewer hours and taking loans, while rich families have not felt the impact of the pandemic.

Families living in rural areas have been most affected by the pandemic, as the government has made little effort to alleviate their problems and focused more on urban areas. Despite these issues, China may still declare that it is free from poverty, the article added.

Howard Archer

Howard Archer, chief economic advisor EY ITEM Club, shared an article on how the new lockdowns initiated in the UK are impacting job recovery. Job postings have been majorly affected in urban areas in Scotland and southern England, according to data from the Centre for Cities (CfC), a think tank.

The new lockdowns are expected lead to further decline in job postings over the next few months. Job recovery was most affected in sectors directly impacted by the lockdowns including retail, leisure and arts. Service jobs particularly may become scarce as the lockdowns continue.

The unemployment rate in the UK for the three months ending August stood at 4.5%, which is highest in the last three years. The government has devised a plan to protect and create jobs across the UK, while also providing support to local businesses to deal with the impact of the new lockdowns, the article added.

James Picerno

James Picerno, editor at US Business Cycle Risk Report, shared an article on the how economic growth in September in the US declined sharply to +0.27 from +1.11 in August, according to data from the Chicago Fed National Activity Index (CFNAI).

The index takes the weighted average of 85 economic indicators of national economic activity to measure growth rate. A positive index indicates growth above trend, while negative index indicates growth below trend.

Picerno noted that despite the decline in the index, it still indicates above average growth. Further, the three-month average of the index indicates a stronger growth.

10:54 am

Countries will struggle to return to growth until vaccine becomes available – leading macroeconomic influencers

As second wave of Covid-19 infections continues to impact countries across the world, the possibility of a V-shaped recovery for the global economy remains weak until the availability of a vaccine. China, however, has managed to move towards V-shaped recovery due to the early containment measures adopted. Macroeconomic influencers share their views on the Covid-19 impact.

Ludovic Subran

Ludovic Subran, group chief economist at Allianz, shared an article on how China is on the way to achieving a V-shaped recovery even in the absence of a fully tested vaccine. China’s economy expanded by 4.9% in the third quarter, while other countries were trying to manage the Covid-19 pandemic.

The article noted that the measures undertaken by China to control the virus played a key role in enabling activity to return to normal within few months. Further, the country is insulated from fluctuations in the global demand compared to other countries. The article also highlighted that until the global availability of a vaccine, other countries will struggle to achieve the China’s growth.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared his views on recession and weak economic recovery. He noted that injection of liquidity in the current pandemic crisis may create a situation where stimulus and funds may be directed to the wrong side of the economy. Stimulus packages and aid will, therefore, defeat the purpose of encouraging investors and companies to invest more in activities that will support the economy, he added.

Lacalle opined that a large part of the liquidity injection goes towards sovereign debt and companies that already had enough credit and capital to survive the pandemic. He added the funds are being used towards sectors that already had high structural imbalances such as airlines and automotive. Lacalle noted that directing funds towards micro companies and small businesses is essential to avoid a prolonged recovery from the pandemic.

Brett House

Brett House, deputy chief economist Scotia Economics, shared statistics on the performance of Latin American countries amid the pandemic. According to the data, inflation across Mexico remained above the upper limit set by Bank of Mexico. Core inflation remained at 4.4% on a year-on-year basis.

Further, Argentina’s economy registered a marginal growth of 1.1% on a month on month basis. However, 14 of the main sectors in the country underperformed on an annual basis except for financial services that registered a growth of 4.4%. The country’s trade surplus also declined from $1.4bn to $0.6bn.

Colin Williams

Colin Williams, professor of public policy at the University of Sheffield, shared an article on analysis conducted by Resolution Foundation, a thinktank, on the flaws in UK Chancellor Rishi Sunak’s $16.55bn (£12.7bn) self-employment income support scheme (SEISS). The research has indicated that the scheme disbursed $1.69bn (£1.3bn) to workers who did not lose any income due to the pandemic, while more than 500,000 people did not receive any support.

The article noted that 78% of claimants under the SEISS lost income but the amount lost by several claimants was smaller than the amount claimed. Further, 67% of self-employed people who lost income due to the pandemic did not claim for income under the scheme. Strict eligibility and weak assessment rules were attributed as the reasons for the issues with the scheme. Some of the applicants were unable to prove their eligibility for the scheme, the article added.

7:48 am

Second Covid-19 wave sends Europe GDP into ‘double dip’ territory – leading macroeconomic influencers

Experts believe that European countries returning to lockdowns may result in another gross domestic product (GDP) stumble. While manufacturing countries such as Italy, Germany, and Belgium seem to be doing slightly better, Spain, France, and the Netherlands will be witnessing shrinking GDP in the fourth quarter.

Ludovic Subran

Ludovic Subran, group chief economist at Allianz, shared his views with financial news network Cheddar, on how the rise in coronavirus cases in Europe could send the region into a second phase of recession. He added that countries like France, Spain, Ireland, and the Netherlands are mostly likely to return to lockdown, resulting in double-dip in Europe’s economy. Even though the dip will not be as severe as -20% in the second quarter, it will be daunting for service-driven economies, as policymakers and governments will have to take crucial decisions regarding increased expenditure on curfew restrictions and more, he further added.

Allianz research further predicts shrinking GDP in Q4 2020, with an estimated -1.3% quarter-over-quarter GDP drop in Spain, -1.1% quarter-over-quarter GDP drop in France, and -1.0% quarter-over-quarter GDP drop in the Netherlands.

Lisa D Cook

Lisa D Cook, an academic economist, re-tweeted on how the current economic situation amid the coronavirus pandemic and the government’s response compares to the recession in the 2000s. In an interview with the CBS News, Lisa explains how the situation is no different and that history is repeating itself, with just one stimulus package passed, while what the country really needs is something much larger for a vibrant and robust recovery.

Lisa further added that more investments were necessary in current times, and there were no lessons learnt from the 2008-2009 recession. The recession of the late 2000s was slow and elongated, implying that people and businesses were severely hurt.

Steve Keen

Steve Keen, a prominent critic of conventional economics, re-tweeted on his insights on climate change, calling out to economists that they have got it all wrong and that this economic hit is going to be much larger and graver than Covid-19. In an interview with tcn tv Steve calls out the inherent weaknesses in modelling climate change. He also outlines the impact of incorrect modelling on the society, about vested interests, and the importance of re-thinking economic analysis from the perspective of climate change.

Steve is assertive that climate change will eclipse the pandemic and there will be no surviving from it. He urges on the need to get rid of the coal and fossil fuels, and the need to transition to greener efforts and energy conservation. Though he agrees Covid-19 should be the priority of governments, he also states the importance of reducing the pressure on the biosphere and rapidly bringing forward renewables.

Dina D Pomeranz

Dina D Pomeranz, an economics professor, re-tweeted about a new blog by Rachel Glennerster, a development economist and researcher that summarises the ten new resources on the socio-economic impacts of Covid-19. New data on households and firms in Central Mozambique, for instance, reported dipping trends, with approximately 72% of the households unable to buy food, she added.

She further adds that a Rajashekar & Bower’s IGC-funded research provides evidence that overcrowding presents as much risk for Covid-19 transmission as population density did. The research also identified overcrowded hotspots in Rwanda’s cities and Kigali. Other social and economic impact of Covid-19 included the importance of energy investments and designing fiscal stimulus in Life Insurance Corporations (LIC).

8:24 am

The world economy will need consistent support from governments and financial institutions to survive the threat of ‘long economic Covid’ – leading macroeconomic influencers

The pandemic has had a crushing blow on the world economy, with the threat of ‘long economic Covid’ looming in most parts of the world. With many businesses hurt, the second wave of the disease is expected to increase the financial fragility among rich as well emerging and developing economies.

Erik Fossing Nielsen

Erik Fossing Nielsen, group chief economist at Unicredit, shared an article by Martin Wolf who states that Covid-19 has not just crippled the healthcare system and people forever, but also the economy. Therefore, what started as a ‘long Covid’ threat will lead to a ‘long economic Covid’ threat, leading to years of debility. Policymakers are of the opinion that governments cannot retract from providing support in current times as they did after the 2008 financial crisis or they will have to bear the cost of inaction.

On the contrary, governments will have to fill in the gaps as the private sector pulls back. The International Monetary Fund (IMF) has already forecasted a dip in economic activity, which is most likely to keep private investments passive. The IMF also predicts slow growth of real gross domestic product (GDP) per head from 2019 to 2025, the article noted.

Brett House

Brett House, the vice-president and deputy chief economist at Scotiabank, re-tweeted on how governments’ response to the second wave of Covid-19 will determine how quickly world economies can spring back. Canada’s economy is witnessing a gradual recovery pattern and even outpacing that of its US counterparts, proof of effective measures in place to tackle the virus, added Jean-François Perrault, the senior vice-president and chief economist of Scotiabank. However, Quebec and Ontario are still reporting a record increase in cases, and therefore, this could be the resting point for Canada to recover from the health crisis.

Scotiabank predicts a global GDP dip of 4.1% in 2020, and rebound of 5.4% in 2021, as compared to an earlier forecast of 3.9% fall in 2020 and rebound of 5.6% in 2021. Although the unemployment levels remain above pre-Covid levels, governments’ fiscal support is keeping the global economies afloat. However, any untimely withdrawal of government support, like the one taking place in the US, can throw the economy into a sluggish pace next year, Scotiabank noted.

Stephen Tapp

Stephen Tapp, deputy chief economist and trade research director at Export Development Canada, shared insights from IMF’s fiscal monitor that reveals governments’ fiscal responses to the growing pandemic and their recovery plans. A staggering $12 trillion have been added globally to extend lifelines to households and firms, the publication highlighted. However, this and the global recession has contributed to a rise in global public debt. Experts believe that governments should providing fiscal support quickly, and help people get back their jobs as well as support struggling firms.

Policymakers are faced with urgent and painful trade-offs, with the health and education sectors having to the bear the brunt of the Covid-19 impact, the publication highlighted. Strained economies will need to focus on vulnerable sections and eliminate spending. The IMF has predicted falling standards of living in most parts of the world, with extreme poverty expected to reach 80 to 90 million.

Charlie Robertson

Charlie Robertson, global chief economist at Renaissance Capital, tweeted on an article shared by Justin Sandefur, a development economist on the conflicting perspectives of economists on how different policies were being adopted by different countries to curb the disease. Robertson agrees that countries such as the US should have had a focus on stringent lockdown measures and on the reduction in economic activity to help curb the spread of the Covid infection.

However, he also added that many countries such as Vietnam were not able to curb the infection even with lockdown restrictions. Instead, he tweets that the GDP lost from lockdowns could have been utilised to save lives and infused into the healthcare system.

10:03 am

Europe may face double dip recession as second wave of Covid cases rise – leading macroeconomic influencers

Even before the actual coronavirus outbreak was fully controlled, many countries in Europe are now facing a second wave of infections. The previously projected growth forecasts remain doubtful as a double dip recession seems more likely. Macroeconomic influencers share their views on the Covid-19 impact.

Rafael Domenech

Rafael Domenech, head of economic analysis of BBVA Research, shared an article on how a second wave of coronavirus infections and restrictions in Europe is threatening to cause a double dip recession in the region. Several countries in Europe including Germany, France, UK, Italy, Spain, and the Netherlands have announced measures to control the rise in coronavirus cases.

Experts predict that the second wave will result in negative growth in the fourth quarter of 2020. The European Central Bank’s earlier prediction that the region will grow by more than 3% now seems unlikely. It also casts doubt on the forecast of recovery in the euro zone to pre-pandemic levels by 2022.

Additional monetary easing and fiscal aid may be needed to address the damage caused by the second wave, the article noted.

Nauro Campos

Nauro Campos, professor of economics at University College London, shared an article on how the UK may lose 37% in foreign direct investment (FDI) after Brexit, according to a study conducted by the University College London and the London School of Economics. Discussions on a trade deal with the European Union (EU) have reached an impasse as a no trade deal Brexit seems likely.

The study found that one of the main reasons for the UK attracting FDI was its membership to the EU, which provides investors with access to other markets in Europe market without having to pay additional taxes and face red tape. The UK is estimated to have lost €89bn ($105.58bn) in FDI in 2018 after a referendum to exit the EU are put forward, the article added.

James Picerno

James Picerno, editor at US Business Cycle Risk Report, shared an article on China’s economy growing by 4.9% in the third quarter of 2020 compared to the same period in 2019. The growth is, however, lower than the 5.2% growth estimated by Chinese economists although it was still higher than other countries.

The slow recovery of consumption, shift in consumer behaviour and lower household income in the Chinese economy was impacting recovery. Further, poor recovery in the global market as coronavirus cases continued to rise across various countries was also impacting recovery.

Christopher May

Christopher May, professor of political economy, shared an article on the economic consequences of the Covid-19 pandemic. The rise in infection cases lead to reduction in production, business closures and lockdowns on the supply side, while on the demand side layoffs and loss of income lead to reduced household income, the article noted.

The article added that the US and UK are expected to experience the lasting effects of the pandemic, while China is expected to fare 50% better. China’s recovery is also expected to have a positive impact on the emerging Asian markets. Other emerging markets such as Turkey, South Africa, and Saudi Arabia are expected to experience at least eight quarters of low economic activity.

7:34 am

V-shaped recovery for US economy doubtful as unemployment claims continue to rise – leading macroeconomic influencers

Experts and economists initially forecast the US economy to recover by the end of the year. The growth posted in the second quarter was also encouraging. However, the slowdown in the third quarter raises questions about the forecasted recovery, macroeconomic influencers share their views on the Covid-19 impact.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how the number of unemployment claims increased to the highest levels last week since August. The four-week average of the claims increased to more than 860,000, indicating that a greater number of people are losing their jobs.

Further, several companies have announced layoffs pointing towards a slower than expected economic recovery. According to a survey conducted by the Wall Street Journal, more than half of experts and economists surveyed noted that they did not expect the labour market to return to pre-pandemic levels until 2023. The results of the survey indicate a slower recovery than that predicted six months ago.

Christophe Barraud

Christophe Barraud, an economist, shared an article on a draft budget approved by Italy’s government that aims to support the economy amid the rising coronavirus cases. The budget will focus on the healthcare sector and provide support to families in the form of loans and mortgage payments.

The government projects a contraction of 10.5% in GDP in 2020. Approximately €4bn ($4.7bn) has been allocated for sectors that have been most impacted by the pandemic. Further, the furlough programme has been extended by 18 weeks and €13bn ($15.2bn) has been allocated for providing tax breaks to underdeveloped regions of the country.

The government has also made temporary tax breaks for the middle class permanent and set aside €8bn ($9.37bn) for improving the taxation system.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared an article on the US budget deficit in 2020 totalling $3.13tn, which is three times higher than the previous year deficit of $1.4tn. The deficit was majorly caused by the $2.2tn CARES Act, which was aimed at providing additional unemployment benefits to those affected by the pandemic.

Contributions from tax collections totalled $1.61tn, which is $203bn less than that estimated in the budget. Corporate tax collections were also lower than the budget estimate by $51.8bn in addition to social insurance and retirement collections, which were $2.1bn less than estimated.

Celestine Chukumba

Celestine Chukumba, economist and founder of Tory Capital, shared statistics from the US Department of Health & Human Services (CDC) on the prevalence of obesity being at 42.4% in 2017-2018 in the US. The data showed that obesity also led to various other conditions such as heart disease, diabetes, and cancer. Further, the annual medical cost of obesity was $1,429 higher than those with normal weight at $147bn in 2008.

Chukumba noted that the US was already an unhealthy nation before the arrival of the Covid-19 disease due to the obesity rates, and that this was a factor in the US having the highest number of Covid-19 cases in the world.

Howard Archer

Howard Archer, chief economic advisor to EY ITEM Club, shared an article on the comments made by the Bank of England Governor Andrew Bailey on the uncertainty facing the UK economy as coronavirus cases continue to rise. Bailey noted that the UK economy is expected to contract to a level 10% below 2019 levels.

The UK is experiencing a second wave of coronavirus infections forcing the government to impose restrictions on bars and restaurants. Bailey noted that the right economic policies are needed to be chosen based on the condition of the economy.

7:14 am

Millions of people in the US going into poverty due to Covid-19 pandemic – leading macroeconomic influencers

Latest research has indicated that millions of people have been pushed into poverty due to the impact of the Covid-19 pandemic. As infection cases continue to rise and without additional aid, more people are expected to be impacted. Macroeconomic influencers share their views on the Covid-19 impact.

Justin Wolfers

Justin Wolfers, professor at the University of Michigan, shared an article on the number of people in poverty growing to eight million in the US, according to research conducted by Columbia University. The $2tn stimulus package announced by the US government initially helped in saving millions of people from poverty. The aid, however, has now exhausted pushing millions into poverty.

Although the job market has witnessed improvement since May, the rebound in the economy is too slow to offset these benefits. The economy is showing further signs of contraction due to increasing layoffs, rising coronavirus cases and lack of progress on stimulus talks. Minority groups including Black and Latino people are most affected due to the impact on the industries that they mostly employed.

Arvind Subramanian

Arvind Subramanian, professor at Ashoka University, shared an article on how emerging economies should not be too concerned about the predictions by western economists that their export-led model is no longer viable. The article noted that the end of globalisation as forecast by some experts is exaggerated.

Although exports of goods have declined by 21% of world GDP compared to 25% decline in the 2008 financial crisis, exports of services are continuing and increasing from 6.5% of GDP to 7%. Services exports are expected to continue as the pandemic forces physical distancing.

As companies in western economies ask employees to permanently work from home, these jobs can be relocated easily and cheaply to developing economies. Further, developing economies can offer alternative to China’s exports as the country’s competitiveness is decreasing along with its share of low-skill exports.

Western economists and policy advisers should promote open markets and prevent protectionism to avoid major impact on the poorer economies of the world, the article noted.

Caroline Krafft

Caroline Krafft, economist and associate prof at St. Kate’s Economics and Political Science, shared an article on the impact of the pandemic on the Middle East and North Africa (MENA) region. Countries such as Jordan and Tunisia have been particularly impacted by the pandemic.

Jordan has emerged as a regional hotspot for coronavirus infections and the country’s economy contracted by 3.6% in the second quarter. The tightening of coronavirus restrictions including lockdowns has further exacerbated the decline particularly impacting the hospitality industry.

Tunisia is also facing similar issues as the economy contracted by 8% and GDP declined by 12%. The tourism sector, which accounts for 12% of the country’s GDP, has been impacted the most followed by the textile industry.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on the European Central Bank (ECB) not planning for an immediate stimulus plan despite contraction of the economy and rising coronavirus cases. With new lockdown measures being implemented across the euro zone, the economic activity is expected to be further impacted.

Policy makers at the ECB plan to wait until December to gain more clarity on various aspects including inflation and growth forecasts enabling them to evaluate the overall economic damage. Securing approval for a stimulus package by considering all the factors affecting the economy will also be more likely, the article noted.

Linda Yueh

Linda Yueh, economist at University of Oxford, shared an article on how small gatherings are contributing to rise in coronavirus cases in the US, according to the US Centers for Disease Control and Prevention (CDC). With the Thanksgiving holiday coming up, the CDC noted that continued mitigation steps are needed to control the spread of infections in the household setting.

The CDC also noted that a coronavirus vaccine may become available by the end of year. The centre added that the initial supply of vaccines will be low but aims to distribute the vaccine as soon as large quantities become available.

8:09 am

US labour market policies need to focus on addressing inequalities in the market – leading macroeconomic influencers

The inequalities that existed in the US labour market have now been exacerbated amid the Covid-19 pandemic. Robust labour market policies need to be formulated to address these inequalities. Macroeconomic influencers share their views on the Covid-19 impact.

Larry Mishel

Larry Mishel, an economist, shared an article on how the Covid-19 pandemic is exacerbating the already existing labour market inequalities in the US. According to the latest report from the US Bureau of Labor Statistics (BLS), more people were found to be leaving the work force than jobs being created by employers.

Further, new jobs being created were lower than the previous months and permanent layoffs were increasing with 3.7 million workers being permanently laid off. Several firms including Disney, United Airlines, Wells Fargo, and Salesforce have announced permanent layoffs.

The article noted that the pandemic is unevenly impacting different groups of workers particularly black people, older workers and women. Issues such as low wages, access to good jobs and retirement policies need to be addressed, the article noted.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on comments made by the Organisation for Economic Co-operation and Development (OECD) that the UK should focus more on the unemployment issue in the country rather than public finances.

The UK economy is projected to shrink by 10.1% in 2020 before growing by 7.6% in 2021. The tightening of restrictions imposed due to the coronavirus pandemic, however, is expected to further slowdown the economy.

The OECD recommends that the UK government should implement measures to help unemployed workers find jobs and later focus on the structural deficit. The organisation also noted that tax breaks for individuals and businesses should be reduced and property taxes on wealthy homes should be increased.

The OECD further added that the UK should strike broader trade deals across the world to reduce the impact caused by Brexit.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on the fall in Latin American currencies, following J&J’s announcement on pausing its clinical trial on Covid-19 vaccine and the gloomy outlook shared by International Monetary Fund on emerging markets.

Brazil’s real declined the most among Latin American currencies by 1%, followed by the Mexican peso, which fell by 0.1%. The article noted that recovery of emerging markets will be dependent on the availability of Covid-19 vaccine.

James Picerno

James Picerno, editor at US Business Cycle Risk Report, shared an article on the pausing of Eli Lilly’s ACTIV-3 clinical trial on monoclonal antibody treatment for coronavirus by health regulators in the US over safety concerns.

The ACTIV-3 clinical trial was designed to test the monoclonal antibody treatment in combination with antiviral drug remdesivir. It is part of several clinical trials being undertaken by the National Institute of Health’s Activ programme, aimed at accelerating Covid-19 vaccine development.

The monoclonal antibody treatment was developed using blood samples taken from one of the first coronavirus patients. Monoclonal antibodies are separated from the blood and designed to act as immune cells against the coronavirus.

7:59 am

Covid-19 pandemic to cause lasting damage to living standards – leading macroeconomic influencers

The Covid-19 pandemic has resulted in high unemployment rates and bankruptcies, while threatening to have a lasting effect on living standards. While people and economies shift to new sectors, the adjustment is expected to be long and painful. Macroeconomic influencers share their views on the Covid-19 impact.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on comments made by the International Monetary Fund (IMF) that the Covid-19 pandemic will cause “lasting damage” to people’s living standards. The pandemic is expected to result in huge job losses with women and low-skilled workers projected to be most affected. Bankruptcies and extreme poverty are also expected to increase.

Governments may be forced to increase taxes on wealthy people and companies by raising progressive taxes. Taxing high income brackets and affluent individuals will provide access to finance enabling governments to tackle the pandemic, while limiting economic contraction.

The IMF also noted that the pandemic may wipe out some sectors of the economy and that tourism and commodity related economies will be the most affected. The impact of the damage to living standards caused by the pandemic is expected to last for a long time, as the adjustment and shift from struggling sectors to new sectors such as digital technology will be slow.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared his article on how bankruptcies are rising despite trillions of dollars in liquidity being poured into the economy. He noted that companies are going bankrupt at a faster pace compared to the Great Depression. Solvency crisis cannot be addressed through liquidity as it only disguises risk but does not resolve the issues associated with solvency such as lack of cash flow, he added.

More than 10% of companies across major economies in the world are on the verge of bankruptcy, according to Moody’s. Lacalle attributes the increase in bankruptcies to the policies adopted during the 2008 crisis. These policies kept sovereign bond yields at low levels and increased liquidity injections, which ultimately benefitted large corporations and kept solvency ratios low. The lockdowns initiated during the pandemic further exacerbated the solvency crisis, he added.

Lacalle recommends the need for open markets and flexible restructuring mechanisms to address the solvency crisis.

Gregory Daco

Gregory Daco, chief US Economist at Oxford Economics, shared an article on Johnson & Johnson (J&J) pausing the clinical trials for a Covid-19 vaccine under development, after a patient fell sick. J&J is the second company to have paused clinical trials after AstraZeneca.

Experts noted that such pauses are common and indicate that the regulatory safeguards aimed at protecting the public are in place. Pharmaceutical companies are facing mounting pressure from governments and politicians for quick delivery of a vaccine and such incidents raise safety concerns, the article added.

John Ashcroft

John Ashcroft, an economist, shared an article on China’s imports growing beyond pre-pandemic levels by 13.2% for the first time since June. Exports also grew by 9.9% in September on a year-on-year basis. The increase in exports comes as markets start to reopen across the world giving a boost to shipments from China.

Food shipments accounts for majority of the imports including grain imports, which increased by 35% from the previous year and meat shipments increased by 40.5%. Electrical and mechanical goods accounted for majority of the exports and increased by 11.8% compared to the previous year.

As Europe and the US experience a second wave of Covid-19 infections, it is unclear as to whether it will affect the Chinese economy.

Linda Yueh

Linda Yueh, economist at University of Oxford, shared an article on China’s plans to test more than nine million people in the city of Qingdao after 12 new infections were discovered at the Qingdao Chest Hospital. The hospital is treating travellers from abroad although the exact source of the infection is still unknown.

The cases were linked to patients of the hospital apart from a taxi driver. The hospital as well as other locations visited by the taxi driver have been placed under lockdown as part of containment measures. The cases occurred after the Golden Week holiday in the country, during which millions of people travelled domestically.

7:40 am

Covid-19 pandemic leading to the creation of new digital jobs – leading macroeconomic influencers

The Covid-19 pandemic has led to widespread unemployment across the world but has also accelerated digitalisation. New digital jobs are expected to be created over the next five years due to the pandemic. Macroeconomic influencers share their views on the Covid-19 impact.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how the pandemic is accelerating digitalisation. The article notes that although the pandemic has led to the loss of more than 250 million jobs globally, it has also provided opportunities to generate digital jobs.

According to Microsoft, the pandemic is expected to create 149 million new jobs by 2025. Software development jobs will account for majority of these jobs at 65%, followed by cloud and data at 15% and data analysis and machine learning at 13%. Cybersecurity and privacy and trust are expected to account for 4% and 1% of jobs respectively.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on the UK economy. The article notes that the UK GDP is projected to contract by 10.1% in 2020 and grow by 6% in 2021.

The UK economy grew by 17% in the third quarter aided by increase in consumer spending as lockdown restrictions were lifted. The growth registered in Q3 is expected to decline as the furlough scheme ends and unemployment levels increase.

The economy is not expected to return to pre-pandemic levels until the second half of 2023. Low consumer spending, lockdown restrictions, increase in unemployment levels and slow Brexit negotiations are some of the factors that are expected to impact growth, the article noted.

Adam Tooze

Adam Tooze, director of European Institute, shared an article on greater debt relief programmes requested by poor and indebted economies. These countries have been greatly impacted by the pandemic and its economic consequences as little help pours in from advanced economies.

The G20 nations had reached an agreement to postpone debt payments for 73 of the world’s poorest countries for three years. However, confusion prevails over which lenders should be involved in the agreement. Private lenders are still receiving payments and only three of the 73 nations have been able to seek debt relief from private creditors.

Finance ministers from the poor economies, particularly in Africa, have criticised western economies over not providing enough monetary support. To support their economies, they are planning to request $100bn a year in support, which is fraction of the stimulus delivered in the US and Europe.

Robert Palmer

Robert Palmer, Head of Tax Justice UK, shared an article on how  some US companies are rewriting bonus plans to ensure that executive pay is not adversely affected due to the pandemic. Some of these companies are expected to remain unaffected due to the pandemic as they have received federal aid.

Companies are adding non-financial metrics to bonus calculations and ignoring missed targets. It is estimated that at least 20 companies have changed their bonus plans, according to a report from Semler Brossy Consulting Group.

The article notes that the changes to bonus plans are an example of the problems with performance-based pay. Paying exorbitant amounts of incentives to executives under the current pandemic environment is not appropriate, the article adds.

 

10:41 am

Lockdowns should not be used as the primary method for controlling Covid-19 pandemic – leading macroeconomic influencers

Countries across the world used lockdowns and social distancing measures to control the spread of the Covid-19 virus. The strategy, however, led to widespread unemployment, business closures and poverty. Lockdowns may not be ideal method for controlling the pandemic. Macroeconomic influencers share their views on the Covid-19 impact.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared an article on the views expressed by officials from the World Health Organisation on avoiding lockdowns as the primary method of controlling the spread of the Covid-19 infection.

The article notes that lockdowns have produced devastating effects including poverty, job losses and business closures. Lockdowns have also led to increase in domestic violence, mental health issues and increased levels of stress and anxiety.

The officials recommend the use of focused protection wherein the most vulnerable people of the population are protected, while less vulnerable should be allowed to resume normal life.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how the UK National Health Institute will not be able to handle the increased number of coronavirus cases. Hospitals around the UK have approximately 500 beds but the number of patients is more than 3,100.

The UK is planning to implement tougher lockdown restrictions as the number of infections rise despite opposition from various politicians and experts. The new restrictions are expected to lead to the closure restaurants and pubs along with a 10pm hospitality curfew.

Steve Keen

Steve Keen, an economist, shared an article on how wearing masks and hygiene precautions adopted to prevent the spread of Covid-19 pandemic have helped in reducing 99.8% influenza cases in New Zealand. During the months of winter, the country witnesses at least 1,600 deaths due to influenza especially in older people with pre-existing conditions.

The precautions taken in response to Covid-19 have helped in reducing the mortality rate to 5%. Other respiratory illnesses such as the common cold and rhinoviruses, however, have not been controlled as some pathogens are not affected by such measures, the article added.

The number of influenza cases are expected to continue to remain low as the country moves into summer. The number of cases during the next year will depend on the border control responses adopted by the country, the article highlighted.

Christophe Barraud

Christophe Barraud, an economist, shared an article on how emerging markets in Asia will have to be prepared to handle the oncoming wave of ratings downgrades. After an initial slump in capital flows, emerging markets witnessed an increase in investments. However, as a second wave of infections grips the northern hemisphere, this recovery is slowing down.

The World Bank forecast in June that emerging economies will shrink by 2.5%. Government debt in emerging economies was at 34% of GDP during the last financial crisis in 2008 and at the end of 2019, it was 53%. Emerging economies are, therefore, in a much vulnerable position and at risk of a deeper crisis.

Rating agencies have been cautious in providing their ratings, with S&P Global Ratings issuing 23 downgrades or 17% of rated emerging economies. The impact of the pandemic is expected to be most on emerging economies in Asia, that were growing due to globalisation. As countries revaluate their supply chains and plan to reshore their operations, Asian economies will be most affected, the article noted.

 

7:21 am

Unemployment claims in the US continue to remain above pre-pandemic levels – leading macroeconomic influencers

The US economy showed some signs of recovery in the third quarter of 2020 but unemployment claims continue to remain above pre-pandemic levels. Layoffs are expected to rise over the next few months hampering recovery. Macroeconomic influencers share their views on the Covid-19 impact.

Ben Casselman

Ben Casselman, economics/business/data reporter for the New York Times, shared an article on applications for unemployment benefits continuing to remain high in the US. More than 800,000 people filed for new claims in the last week, according to the US Labour Department. Further, 464,000 people filed applications for benefits under the federal Pandemic Unemployment Assistance programme.

The article noted that the level of claims is still very high indicating a slowdown in recovery. Experts opine that without additional aid, layoffs will rise even as millions of workers who lost their jobs early in the pandemic still remain unemployed.

Rupa Subramanya

Rupa Subramanya, an economist, shared an article on India’s GDP forecast to decline by 9.6% in 2020-2021, according to a report from the World Bank. The forecast is a sharp decline from the previous estimate of 3.2% in June. The Indian economy is expected to return to growth in 2022 at a rate of 5.4% provided lockdown restrictions are lifted completely.

India recorded the sharpest decline in GDP at 23.4% in the third quarter, which is the biggest decline among global economies. As lockdown restrictions are lifted and businesses open up, the economy is showing some signs of recovery.

The South Asian region is expected to experience a severe recession, with regional growth forecast to contract by 7.7%. Small businesses and informal workers have been the hardest hit due to the pandemic, the article noted.

Martin Sandbu

Martin Sandbu, European economics commentator at the Financial Times, shared an article on the European Central Bank’s (ECB) plans to launch a digital euro. The ECB has released a report on how a digital euro will be designed and its potential uses and disadvantages.

The report notes that the ECB wants to be ready with a digital means of payment as people are opting for digital payments instead of cash. It also elaborates on a number of conditions that the currency needs satisfy to address any concerns.

After an initial technical experimentation, the ECB will undertake an investigation phase and decide on whether to develop a digital euro or not, the report added. The article noted that a digital euro may become available by the end of 2025.

Claudia Sahm

Claudia Sahm, a policy analyst, shared an article on JPMorgan Chase’s plans to commit $30bn over the next five years towards narrowing the racial wealth gap. The bank will offer loans for the Black and Latino community to enable access to affordable housing and boost minority-owned businesses.

JPMorgan has allocated $8bn for the funding of 40,000 mortgages of minority home buyers, while $14bn is allocated to fund 100,000 affordable rental units. The bank will also lend $2bn to small businesses and open new branches to better serve areas of Chicago, Los Angeles and Detroit.

Sahm noted that the news was encouraging but also sad, because the wealthy financiers are coming forward to help minorities instead of the Federal Reserve. She questioned as to what the Federal Reserve is doing to help minorities especially in the current pandemic induced recession.

Colin Williams

Colin Williams, professor of public policy at Management School, University of Sheffield, shared an article on a report from the UK National Audit Office that taxpayers may lose up to £26bn ($34.9bn) from the loans distributed under the government-backed bounce-back loan scheme (BBLS).

A total of £38bn ($49.13bn) has been borrowed by 1.3 million businesses under the scheme, which may increase to £43bn ($55.6bn) by the end of November. The scheme is characterised by limited credit checks and fraudulent applications, which may result in up to 60% of customers failing to repay the loans, the article noted.

As a result, taxpayers may have to pay between £15bn ($19.39bn) and £26bn ($34.9bn) to cover bad debts created by the scheme.

7:43 am

ECB pledges support to ride out Covid second wave – leading macroeconomic influencers

Stagnating growth in the Eurozone is being tackled by monetary support to help protect jobs. Macroeconomic influencers share their views on the Covid-19 impact.

Francesco Saraceno

Francesco Saraceno, Italian economist, shared an article on European Central Bank (ECB) President Christine Lagarde’s plans to retain monetary support until the crisis created by the Covid-19 pandemic is over. She noted that the policies adopted in the euro area have helped in protecting jobs and increasing productivity.

The support measures should be continued to ensure recovery as new infections are forcing governments to impose restrictions, the article noted. Germany is the only country in the euro area to have reported a growth although a drop in industrial production was noted last month.

Growth in France is also forecast to stagnate over the last quarter of the year, while other European countries in the south are facing tough conditions as the hospitality and tourism industry is impacted.

John Ashcroft

John Ashcroft, economist, shared an article on how the recovery achieved in the US economy in the last quarter is on the verge of collapsing due to US President Donald Trump’s decision to end stimulus talks. Without financial aid, 26 million people who are currently receiving unemployment payments will not be able to access basic necessities.

The unemployment payments have already declined by $900 per week to $300 per week, which is not sufficient to pay rent and purchase food. Lack of spending minimises the circulation of money within the economy thereby hurting recovery, the article noted.

Several companies have already announced plans for massive layoffs with 75,000 announced in the last week alone and further layoffs expected without financial aid. Further, the National Restaurant Association has warned that 40% of restaurants are at risk of closing over the next few months.

Jim Tankersley

Jim Tankersley, Tax and economics reporter at The New York Times, shared an article on digital services taxes. Finance ministers and other experts from the G20 have cautioned that a failure to reach a consensus on digital taxes between the US and European Union by the end of the year could pose a threat to the global economy.

A deal on digital services taxes will set the standard for how and where online activity is taxed. If a deal is not closed, European countries will impose taxes that may attract retaliatory tariffs from the US. Trade tensions may follow and impact the global economic growth, the article noted.

The US is not in favour of the deal as it may impact other sectors apart from technology. A report from the Organisation for Economic Co-operation and Development has revealed that international tax changes may increase global corporate taxes by approximately $100bn.

Aleksandr V. Gevorkyan

Aleksandr V. Gevorkyan, economics professor at The Peter J. Tobin College of Business, shared a report on global capital flows released by the global association of the financial industry (IIF). The report forecasts a deep economic recession in 2020 with global GDP falling by 4.1% and recovering in 2021 to 5.8%.

Capital flows in emerging economies and China is expected to be $528bn in 2020 and $664bn in 2021. Further, recovery in emerging economies across the world is expected to be asymmetric. Emerging economies in Asia and Middle East region are expected to recover faster than those in Latin America, the report added.

James Picerno

James Picerno, editor at US Business Cycle Risk Report, shared an article on the outlook for the US economy in the fourth quarter of 2020. The article noted that consumer spending was a key factor in reviving the economy in the third quarter. With stimulus talks stalled, the outlook for Q4 looks bleak.

The upcoming flu season and election could deteriorate the health situation in the absence of additional aid. The lack of support to businesses and local governments will cause GDP to decline by 1.5% in Q4, the article added.

8:15 am

Lack of stimulus for US economy could slow down recovery – leading macroeconomic influencers

The long discussions between the Republicans and Democrats on the next round of stimulus ended abruptly without hopes for additional aid for businesses and households. In the absence of stimulus, the recovery of the US economy is expected to remain slow. Macroeconomic influencers share their views on the Covid-19 impact.

Claudia Sahm

Claudia Sahm, a policy analyst, shared an article on the comments made by Federal Reserve chair, Jerome H. Powell, after US President Donald Trump abruptly called off stimulus talks ending hopes for providing additional aid for people affected by the pandemic.

Powell noted that lack of support could lead to a weak recovery and cause hardship for both households and businesses. He noted that the risks of overdoing stimulus are smaller in comparison to the damage that lack of support will cause including household insolvencies and business bankruptcies.

Powell also noted that prolonged recovery will lead to increased job losses and economic disparity as low income groups, people of colour and women were most likely to be affected. He opined that recovery will be stronger if monetary policy and fiscal policy work together.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared an article on how furloughed jobs are not providing the true picture of unemployment rate in the euro zone. According to Eurostat, the unemployment rate increased to 7.4% in the US in August, while in the euro area it was 8.1%.

The US does not have a subsidised unemployment scheme and if the same calculations used for the US are applied to the euro zone, the unemployment rate in the latter would be higher at 11%. The Organisation for Economic Co-operation and Development (OECD) estimates that the unemployment rate in the euro zone will increase above 10% after the furlough schemes end.

The furlough job schemes were introduced to protect jobs, while businesses recovered from the impact of the pandemic. Several of the companies that signed up for the furlough scheme, however, are on the verge of bankruptcy. The article noted that furlough schemes will only work if strong policies are implemented to protect businesses.

Richard Price

Richard Price, chief economist at UK Department for International Trade, shared an article on how world trade is showing signs of recovery although this recovery may be impacted by the changes in the pandemic. The World Trade Organization (WTO) has revised its forecast for the volume of world merchandise trade in 2020 to fall by 9.2% from the previous forecast of 12.9%.

The recovery of world trade was attributed to the surge in activity in June and July, after lockdowns were eased. The WTO noted that the pace of recovery may slow down once the pent up demand is cleared and business inventories are replenished.

The volume of world merchandise trade in 2021 is expected to increase by 7.2% in 2021. The WTO also noted that these estimates are subject to change and may be impacted by how the pandemic is evolving and the corresponding government responses.

Luis Garicano

Luis Garicano, an economist and Member of the European Parliament, shared an article on how central banks of various countries face the difficult task of containing inflationary pressures and maintaining financial stability as government debt rises amid the pandemic.

The general government debt as a share of GDP will rise from 71% in 2007 to 132% in 2020, according to the International Monetary Fund (IMF). The article noted that such a huge increase in government debt is likely to impact the inflation fighting capabilities of central banks.

Experts and economists, however, note that central banks are well equipped to handle the increase in government debt with tools such as interest on reserves and reverse repos.

10:57 am

Advanced economies should increase public investment to boost economic recovery from Covid-19 pandemic – leading macroeconomic influencers

The International Monetary Fund (IMF) has recommended an increase in public investment as a means to recover from the damage caused by the pandemic. Starting with small scale projects, the IMF recommends transformational projects that can benefit everyone in a post-Covid-19 economy. Macroeconomic influencers share their views on the Covid-19 impact.

Wonkmonk

Wonkmonk, economic policy activist, shared an article on the IMF’s call to developed economies to increase public investment to enable a strong economic recovery from the pandemic. The IMF noted that advanced economies should not worry about public debt but rather take advantage of low borrowing costs to increase spending particularly on infrastructure.

The IMF’s comments are in stark contrast to its usual concerns with public debt in rich countries although the organisation cautioned that the public investments should be made in such as way that it does not affect the debt dynamics. The IMF noted that increasing public investment by 1% could increase GDP by 2% in two years and generate millions of jobs.

Several countries have already pledged to increase public investment including the UK, which plans to increase spending by 1% of national income. The IMF also cautioned that developing and poor countries should be wary of spending as they do not have access to finance. These countries should focus on efficient public investment management to ensure money is spent effectively.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on how retail sales in Euro zone were higher than expected in August due to an increase in online purchases. Retail sales across 19 countries in the Euro zone increased by 4.4% compared to the previous month and 3.7% on a yearly basis.

The figures for July, however, were revised downwards to 1.8% on a monthly basis and 0.1% on a yearly basis. The increase in sales in August attributed to a 12.4% monthly and a 23.8% yearly rise in mail and internet orders, the article noted.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on the soaring inflation in Sudan. Food prices in the country have tripled in the last one year and cost of health services increased by 90%, according to the United Nations. Sudan is already suffering from problems of underdevelopment, poverty, disease outbreaks and violence.

Compared to 2019, the food prices in the country have increased by approximately 240% as inflation reached 170% in August. The depreciation of the Sudanese pound is further eroding the purchasing power of families. Sudan declared a state of emergency to prevent the Sudanese pound from falling against the US dollar.

The economic problems have been further compounded by floods that have affected more than 800,000 families. The European Union along with the World Bank have pledged to provide direct financial aid of $190m to the affected families in Sudan, the article noted.

Adam Posen

Adam Posen, president Peterson Institute for International Economics, shared an article on how the curbs imposed by the US on imports of semiconductors and other equipment from China will impact the latter’s phase one purchase targets.

The restrictions imposed by the US are aimed at limiting Huawei from having access to US semiconductors, while also preventing US-based manufacturers from selling to other countries that sell to Huawei. The curbs could also impact US by cutting sales of semiconductor manufacturing equipment, the article noted.

For the first eight months of the year, semiconductors and other equipment accounted for 25% of China’s imports covered by the phase one agreement signed with the US. The restrictions are expected to impact China’s purchase pledge for 2020, the article added.

7:40 am

Unemployment rate increasing among women in the US due to Covid-19 pandemic – leading macroeconomic influencers

The Covid-19 pandemic is forcing millions of women to rethink their employment status as they are forced to stay home and take care of their children in the absence of childcare. The decline in the number of women in the workforce will not only impact economic recovery but also increase the gender wage gap. Macroeconomic influencers share their views on the Covid -19 impact.

Heather Long

Heather Long, Washington Post economics correspondent, shared an article on how the Covid-19 pandemic is disproportionately affecting women, who were instrumental in pulling the US out of the last recession. The pandemic is expected to undo years of economic gains made for women. The majority of the impact is expected to be on women of colour and women with children.

The unemployment rate among Black and Hispanic women is estimated at more than 10%, according to data from the US Labor Department. Further, many women aged between 25 and 54 are leaving the workforce to care for their children increasing the participation gap between men and women.

Even after a vaccine is found millions of women may still not be able to return to the workforce, which will slow down economic recovery and increase the wage gap between men and women.

Konstantina Beleli

Konstantina Beleli, European civilisation economist, shared an article on the US Federal Reserve’s plans to limit capital payouts by 34 big banks such as JP Morgan Chase, Citigroup, Wells Fargo and Bank of America. These banks will be prohibited from making share buybacks and will also need to cap dividends.

The move is aimed at ensuring lenders have sufficient capital to handle the economic impact of the pandemic. Banks will not be able to pay higher dividends than that paid in the second quarter, under the new policies.

Marshall Steinbaum

Marshall Steinbaum, assistant professor of economics at the University of Utah, shared an article on how small corporations are at risk of being taken over by large corporations amid the pandemic. More than 400,000 small businesses have perished, while millions more are at risk due to the impact of the pandemic.

Large corporations had higher cash reserves at the start of the pandemic and received tax reduction benefits apart from subsidised loans from the Federal Reserve. These corporations, therefore, are better positioned to handle the impact of the pandemic compared to smaller businesses.

The article notes that to avoid these large corporations from acquiring small businesses, strong antitrust laws should be implemented. Further, merger guidelines should be updated to stop firms from acquiring based on the ‘failing firm defence’, the article added.

Claudia Sahm

Claudia Sahm, policy analyst, shared an article on the trend in job postings in the US, which is a measure of labour market activity. Data from Indeed.com, an employment-related search engine, indicates that trend in job postings was 17.5% lower than that of the same period in 2019. This is the lowest gap observed since March when trend in job postings was 39.3% lower than that in 2019.

The trend improved over May, June and July before stagnating at 20% in August and improving in September. The hospitality and tourism sector is the most affected with postings remaining below 40% compared to 2019. Job postings, however, have improved in sectors such as construction, driving, loading and stocking, and childcare. Slow rebound in dental and beauty and wellness sectors has also been observed.

Job postings for high-wage sectors have declined the most by 23% compared to 2019. Further, job postings have declined the most in bigger metros at 25% compared to 7% in smaller metros.

Christophe Barraud

Christophe Barraud, an economist, shared an article on China’s five year plan aimed beyond growing its gross domestic product (GDP). China’s development plan for 2021-25 is expected to be focused on the quality of growth and security.

China till now has focused on the speed of growth to maintain a medium to high economic growth rate. For the next five year plan, however, the country plans to focus on high-quality growth. China is expected to face challenges from external factors including protectionism adopted by other countries, the article added.

8:27 am

Covid-19 pandemic may widen inequality between poor and rich countries – leading macroeconomic influencers

The Covid-19 pandemic may undo years of progress made on anti-poverty efforts and increase inequality across the world. Unless steps are taken to address this, it could lead to social and economic disparities globally. Macroeconomic influencers share their views on the Covid -19 impact.

Robert Palmer

Robert Palmer, Head of Tax Justice UK, shared an article on how the Covid-19 pandemic will widen inequality unless appropriate actions are taken, according to Kristalina Georgieva, the International Monetary Fund’s (IMF) managing director. She noted that the pandemic threatens to affect the most vulnerable countries and push millions into poverty.

Georgieva added that the pandemic may cause inequality by leading to reduced exports, capital inflows, and remittances, which will impact more than 70 countries. She recommends four approaches that can help in addressing these issues including making health a priority to ensure the handling of the pandemic.

Increased spending on various areas such as education and curbing corruption apart from transitioning towards a low-carbon digital economy will also help in addressing the inequality. Georgieva also noted that rich countries should increase aid and resources in the form of grants, loans and relief to poor countries.

Dean Baker

Dean Baker, senior economist at the Center for Economic and Policy Research, shared an article on the unemployment rate in the US compared to other countries. The unemployment rate in the US in August was 8.4% compared to 2.9% in Japan, 3.4% in the UK, 4.4% in Germany and 6% in Denmark.

The unemployment rate in the US is, however, lower than that in Italy and Canada, which have witnessed an unemployment rate of 9.7% and 10.2%, respectively. Although the US economy has improved since April, it still has a long way to go before recovering completely, Baker noted.

Daniel Lacalle

Daniel Lacalle, chief economist Tressis SV, shared an article on how the higher taxes, huge spending programmes and labour rigidities announced by US Presidential candidate Joe Biden will have a negative impact on growth and jobs as witnessed in other European Union countries.

Lacelle noted that these policies will not generate revenues needed to reduce the budget deficit. These policies are expected to generate $3.5tn in revenues over a period of ten years or 1.4% of gross domestic product, according to the Committee for a Responsible Federal Budget, while Biden spending plans is estimated to be at $5.4tn.

Biden’s plans are based on the assumption that the US is home to large corporations generating billions of dollars in revenues. Taxes hikes, however, are expected to impact small and medium-size enterprises due to increase in labour costs making it difficult for the economy to recover.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how despite the Central Bank of Turkey’s (CBT) hike in interest rate by 200 basis points the Lira is still trading at all time low rates.

The limit on foreign exchange transactions with foreign entities was also raised to enable increased market access. The steps were taken by the bank to restore confidence in the Lira.

The article also noted that the Turkish government needs to tackle inflation and adopt a more orthodox monetary policy. The Turkish economy has contracted by 10% in the second quarter and is expected to shrink in 2020.

Richard Murphy

Richard Murphy, visiting professor of accounting at Sheffield University Management School, shared an article on how the increased costs of handling the Covid-19 pandemic will impact the spending plans announced by UK Chancellor Rishi Sunak.

The Institute for Fiscal Studies (IFS), a think tank, noted that if 25% of the £70bn ($90bn) allocated to tackle the pandemic is repeated, the government will be need to find more money for the current year’s budget or announce cuts.

Spending on continuous programmes such as the NHS test and trace could result in huge amounts of money being spent on healthcare, while other public services face budget cuts. The IFS also noted that the spending plans announced by Sunak may lead to public spending accounting for a higher share of national income.

7:55 am

Covid-19 driven unemployment increasing food insecurity in the US – macroeconomic influencers

The Covid-19 pandemic has led to an unprecedented increase in unemployment rates across the world. The most affected are the low and middle income group families with children by increasing their food insecurity. Although the US has provided assistance to address this issue, many families are still struggling to feed their children. Macroeconomic influencers share their views on the Covid -19 impact.

Trevon D Logan

Trevon D Logan, professor of economics at Ohio State University, shared an article on how one in three families with children in the US are experiencing food insecurity due to the unemployment caused by the pandemic. The level of food insecurity is higher than the peak of the Great Recession.

The article notes that food insecurity is common during an economic downturn but the current pandemic is disproportionately affecting families with children and children themselves. Majority of the children from low-income groups depended on schools to provide two of their meals but as schools remain closed they are deprived of these meals.

The pandemic Electronic Benefit Transfer (EBT) programme has provided some of the money to replace the meals that children receive at school but it is not sufficient, the article added. Further, those children who are not in school and in daycare did not qualify for the programme depriving them of much needed meals.

Luis Garicano

Luis Garicano, professor of economics at the University of Chicago, tweeted on the projections made by the European Central Bank (ECB) on GDP levels in Europe. The ECB noted that the GDP will recover to pre-pandemic levels by late 2022, however, containment measures will play a key role in ensuring recovery.

In 2020, GDP levels are expected to decline by 8%, while rebounding by 5% and 3.2% in 2021 and 2022. Further, the ECB noted that inflation levels in 2020 are expected to be at 0.3% and increase to 1% and 1.3% in 2021 and 2022.

Konstantina Beleli

Konstantina Beleli, a European civilisation economist, shared an article on how half of the undocumented migrants in the US pay income taxes, according to a report from the Institute of Taxation and Economic Policy, a think tank.

The report notes that undocumented migrants paid $11.7bn in income taxes per year or an average of 8% of their income. The top 1% of earners, however, paid only 5.4% of their income, the report added.

The article added that the problem plaguing the working and middle class in the US is not immigration but rather a system that has allowed three Americans to accrue more wealth than the combined savings of the bottom 50% of all Americans.

Peter Martin

Peter Martin, Member of the Order of Australia, shared an article on a survey conducted among 49 leading economists in Australia on boosting unemployment benefits versus personal income tax cuts. Majority of the economists support a budget that will boost social housing and JobSeeker unemployment benefits rather than reducing personal income tax.

The survey was conducted by a committee of the central council of the Economics Society. The economists were offered various options including JobSeeker unemployment benefits, wage subsidies after the expiry of JobKeeper, cash payments to households, infrastructure spending, personal income tax cuts, and company tax cuts.

Social housing was the most popular option selected by economists as it will help in addressing homelessness, while also providing a lasting benefit. Boosting the JobSeeker unemployment benefits was the second most preferred option as it would help in increasing spending. Funding education and training was the third most preferred option as it will assist the young people in securing jobs.

Charles Kenny

Charles Kenny, senior fellow at Center For Global Development, shared an article on how the recession induced by the Covid-19 pandemic is increasing political instability in developing countries. Majority of the developing countries were able to recover from the recession in 2009-2010 increasing the daily incomes of middle class to $10-$15 per person.

The pandemic, however, threatens to pose greater risk to middle class households. According to estimates from a study at King’s College London, a contraction of 10% of GDP in developing countries could push 180 million people to the threshold of poverty. Such conditions often give rise to social and political tensions.

The article notes that under such conditions the International Monetary Fund and other global banks should offer lending programmes to developing countries. Such programmes can help in providing cash transfers to struggling households and ensuring children do not go hungry.

8:51 am

Major industrial firms in China register positive growth for four straight months – leading macroeconomic influencers

Industrial companies in China registered profits for the fourth straight month in August although the growth is lower than that of 2020. Despite the growth, the recovery of China from the impact of the Covid-19 pandemic remains uneven, with industrial production growing by 5.6% in August compared to the previously year. Macroeconomic influencers share their views on the Covid -19 impact.

John Ashcroft

John Ashcroft, an economist, shared an article on how some of the largest industrial firms in China have registered a positive growth continuously for four months until August. Profits, however, were down by 4.4% compared to the same period during the previous year.

The recovery in China was mostly noted in the manufacturing, electrical machinery and raw material sectors. In August, the profits increased by 19.1% compared to the previous year although the growth was still lower than 19.6% in July.

Linda Yueh

Linda Yueh, economist at University of Oxford, shared an article on how the Covid-19 pandemic has led many people to forego medical screening due to the withdrawal of employer-sponsored health insurance and lack of financial security. As a result, cancer screenings for various types of cancers declined by 65%-95% during May and by 30%-35% in mid-June.

The article notes that people who do not have access to employer-sponsored health insurance can opt for a health plan under the Affordable Care Act or Medicaid. Life insurance companies can fill in the gaps for patients who do not qualify for any of these policies. These companies can help in ensuring continued care for people with life-threatening conditions.

Life insurance companies can offer zero interest loans to policyholders to make payments for treatments. Such an approach is profitable for life insurance companies as it helps avoiding a large payout by extending the life of policyholders.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins, shared an article on US-based pharmaceutical companies planning to leave Turkey if the country fails to meet debt payments. Turkey’s government hospitals are estimated to owe approximately $2.3bn to pharmaceutical companies.

Despite assurances from President Tayyip Erdogan, the pharmaceutical companies are yet to receive payments and are considering reducing their exposure to the Turkish market. The article notes that this will not be in the best interests of Turkey as bilateral trade accounted for $21bn in 2019, which the two countries aim to increase to $100bn.

These goals have been hampered due to the sanctions imposed on Turkish steel by the US and the removal of Turkey from a consortium to produce F-35 jets. The policies have impacted Turkish companies to enter the US market, the article added.

Jo Michell

Jo Michell, associate professor of economics at Bristol Business School, shared an article on the Labour party’s recommendation of pausing the return of students to universities as the UK is struggling to contain a second wave of coronavirus infections. The article noted the need for an efficient testing system before reopening universities and evaluating options for remote learning.

Thousands of students are already in lockdown at various universities and return of more students to universities may lead to a wave outbreaks. The party noted that return of students may expose them to the outbreak at a time when it is resurging, when they should be self-isolating.

Howard Archer

Howard Archer, chief economic advisor to EY ITEM Club, shared an article on Bank of England’s (BoE) comments on how negative interest rates can help an economy recover. Negative interest rates in the euro zone and Japan have indicated how it reduces the borrowing costs for companies, the article noted. The BoE has reduced interest rates to below 0.1% and boosted the asset purchase programme by £300bn ($382bn).

The bank noted that it did not expect the UK economy to have a V-shaped recovery due to a second wave of coronavirus infections and rising unemployment rates. Further, the overall weak global economic outlook along with second wave of infections in other countries is expected to impact the recovery of the UK economy, the article added.

7:47 am

Covid-19 impacting state and local tax revenues in US – leading macroeconomic influencers

The Covid-19 pandemic is impacting state and local tax revenues similar to any other recession. The level of impact, however, is far higher than historical figures. Macroeconomic influencers share their views on the Covid-19 impact.

David Wessel

David Wessel, director of Hutchins Center on Fiscal & Monetary Policy, shared an article on how state and local tax revenues have been impacted by the Covid-19 pandemic in the US. The impact of income tax revenues is recorded to be low as most of the employment losses are concentrated on low-wage workers.

Sales and other tax revenues, however, have fallen sharply compared to historical figures due to fall in consumption rate as more people are staying home. As a result, revenues generated from taxes and fees imposed on the tourism, travel and hospitality sectors have plummeted.

Revenues of state and local governments are expected to decline by 5.5% in 2020 and 5.7% in 2021, the article added. The fiscal aid provided by the government has helped in offsetting some of the revenue losses but state and local governments are expected to face further shortfalls forcing them to make spending cuts.

Any such spending cuts are expected to impact the economic recovery of the country, the article added.

Howard Archer

Howard Archer, Chief Economic Advisor to EY ITEM Club, shared an article on the new plans announced by UK Chancellor Rishi Sunak to assist workers and businesses impacted by the new restrictions imposed to curb the spread of coronarivus. The new plans include a job support scheme that will replace the existing furlough scheme, assistance for the self employed, apart from business loans and VAT cuts.

Under the job support scheme, the government will subsidise the pay of employees who are working fewer than normal working hours. The government and the employer will together pay for the hours that employees are not able to work.

The government is also providing a grant to the self employed to cover three months of profits from November to January. Further, business loans will be provided with the duration of repayment extended from six years to ten years and reduction of monthly repayments to half. A 15% reduction in VAT for the tourism and hospitality sector has also been announced from January to March.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how wealthy businessmen with close relations with the former and current President have fuelled the economic crisis in Venezuela. The article notes that the wealth of these businessmen is often derived from government contracts that are meant to service the poor.

These businessmen also known as boligarchs have moved vast sums of public money meant for housing and other basic services out of Venezuela, which has led to the collapse of the country. For example, Alejandro Ceballos Jiménez, a construction mogul, is estimated to have moved approximately $116m from public housing contracts to offshore bank accounts.

Banks in Europe and the US have also played a vital role in facilitating the transfer of money out of Venezuela despite signs of financial improprieties. More than $4.8bn is estimated to have been transferred out of the country between 2009 and 2017 in suspicious transactions. Approximately 70% of this amount is estimated to be public money and included a connection to a government entity such as the Ministry of Finance, according the article.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how cyberattacks have increased amid the pandemic. The cyberattacks are not just limited to scams and schemes but are also being carried out by national intelligence agencies trying to steal information on the development of vaccines. For example, cyberattacks on the World Health Organization increased by five times during the early stages of the pandemic.

The article attributes the increase in cyberattacks to a range of factors including how hacking is longer being carried out by a single person. Cyberattacks are increasingly being performed by employees of national security agencies. Countries are investing additional resources in improving their cyber skills to level the playing field against their rivals.

Further, the advent of technologies such as 5G and internet of things where all devices are interconnected is making targets easily available. The article notes that so far the damage of cyberattacks has been economic and unless governments and technology companies take necessary action, these attacks may lead to public disasters.

7:53 am

Adopting a cooperative approach to development of Covid-19 vaccine essential to control the pandemic – leading macroeconomic influencers

An effective vaccine against the Covid-19 virus is the best way to curb the pandemic. Although many companies and countries are surging ahead with the development efforts, the question about how the vaccine will be distributed across the world remains. Macroeconomic influencers share their views on the Covid -19 impact.

Adam Tooze

Adam Tooze, director of European Institute, shared an article on how a vaccine is the best solution to curbing the Covid-19 pandemic yet it is triggering a new set of problems. The US has already declined to participate in the UN sponsored COVAX programme.

Further, countries across the world are moving ahead with their own vaccine development programmes. Russia, for example, approved an unproven vaccine, while China has approved the use of a vaccine for its military.

The article notes that the real problems will arise when a vaccine becomes available. Governments of rich countries have already signed agreements to procure four billion doses of vaccines. A lack of equitable distribution may damage the reputations of the countries who try to monopolise the vaccine, the article added.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how South Dakota adopted Sweden’s no lockdown approach. The unemployment rate reached 10.6% and the death rate was similar to neighbouring states, he added.

The article notes that the state adopted a non-interventionist approach to handling the pandemic by trusting its citizens to use common sense in practicing good hygiene and social distancing. People aged above 65, however, were ordered to stay at home.

The state also did not enforce a mask wearing policy similar to Sweden permitting local authorities to make the decisions. The article notes that despite the free approach used by the state, the number of deaths and infections were low compared to other states questioning the effectiveness of lockdown measures.

South Dakota is the fifth least densely populated state in the US.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how the UK now has the fifth highest death toll due to Covid-19. The country is experiencing a second wave of infections, which has led the government to impose a new set of restrictions to curb the spread of the virus.

The restrictions include limits on the number of people who can attend a social gathering and re-imposition of work from home orders. These measures are also expected to be imposed in Northern Ireland, Scotland and Wales.

James Picerno

James Picerno, editor of US Business Cycle Risk Report, shared an article on how majority of the people in the US are expected to be vaccinated by July 2021. Approximately 700 million doses of vaccines are expected to be available by March or April, according to the U.S. Centers for Disease Control and Prevention (CDC).

Officials from Operation Warp Speed will be responsible for deciding how the vaccines are allocated.

7:29 am

Stock markets across Europe slide over possible new lockdowns, according to leading macroeconomic influencers

Stock markets across Europe witnessed one of the sharpest declines in recent months over reports of new lockdowns and measures that are planned to be implemented to curb the resurgence of infection cases. The sectors that were already impacted by the previous lockdown measures suffered most of the damage indicating at a slowdown in global economic recovery over the next few months. Macroeconomic influencers share their views on the Covid -19 impact.

John Ashcroft

John Ashcroft, an economist, shared an article on how stock markets across the world slumped after reports of additional lockdowns emerged. The UK’s index of leading shares, for example, had its sharpest decline since June of 3.4% or 202.76 points.

Further, the UK-focused FTSE 250 declined by 4% or 698.90 points to 16,870.78, which is its worst decline since mid-April. The pan-continental Stoxx 600 index also closed down by 3.2%, which is the biggest decline since June.

Oil prices also witnessed the sharpest decline in two weeks after fears that new lockdowns will impact the demand for fuel. Prices of Brent crude declined by 4% or $1.70 to $41.44 a barrel.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on an open letter signed by doctors and health professionals in Belgium to Belgian authorities and media. These professionals recommend that the lockdown measures be lifted and normalcy restored.

The open letter mentions that the infection rate in countries that have implemented lockdowns and those that did not was similar. The lockdown measures implemented had no relation to the rate of infection as it has not led to a lower mortality rate.

The coronavirus infection should be treated as any other flu virus and people should be allowed to develop immunity, while people with weak immunity should be protected the letter added. The letter further noted that the impact of social distancing and lockdowns is detrimental on the physical and mental well being of people.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on the rising tensions between the US and China. The US has adopted a range of sanctions, bans and restrictions on China including a travel warning to Hong Kong following the enforcement of a national security law in the city.

The US also banned the import of certain goods including computer parts, clothing and cotton after reports emerged that they were made by slave labour. Another action implemented by the country includes the sanctions imposed on Union Development Group, a Chinese company, for demolition of land in Cambodia, where the Belt and Road Initiative is being undertaken. China’s TikTok and WeChat have also been banned in the US.

The article notes that the rising tensions will depend on who the next President of the US will be. If President Donald Trump is re-elected, the tensions may escalate, the article added.

Jonathan Portes

Jonathan Portes, professor of economics at King’s College London, shared an article on how restricting visa availability for immigrants is a wrong move. The article notes that immigrants do not take away jobs but rather create them and also boost the economy.

The visa restriction policies in the UK are based on the assumption that those born in the UK are likely to fill in the jobs that were held by immigrants. The article notes that this assumption is a myth and such policies will create a hostile environment for immigrants.

The article adds that immigrants have an economic value, which should not be ignored. The restrictive visa policies will only increase the skill shortages in the future.

Prem Sikka

Prem Sikka, Emeritus Professor of Accounting, shared an article on the number of deaths in the US reaching 200,000 within nine months of the start of the pandemic. The US now has the highest number of deaths, most of which comprise of people of colour and immigrants.

The article also highlighted the surge in infection rate in the UK, France, and Spain. Israel became the first country in the world to implement a second lockdown although protests erupted accusing the government of mishandling the pandemic.

8:52 am

Hospitality industry in the UK on the brink of collapse as new restrictions imposed, according to leading macroeconomic influencers

The UK is facing resurgence in cases forcing the government to take drastic measures to curb the infection rates. A new set of restrictions and the possibility of another national lockdown threaten to wipe out many sectors particularly the hospitality industry. Macroeconomic influencers share their views on the Covid -19 impact.

John Ashcroft

John Ashcroft, economics and financial markets expert, shared an article on how the hospitality industry in the UK is on the verge of collapsing. Owners of pubs and restaurants have warned that the new restrictions and a possible national lockdown are putting the industry and millions of jobs at risk.

Owners and operators in the hospitality industry are calling for the implementation of various steps including extension of the current furlough scheme until the end of October, extension of the VAT cut and reduction in beer duty.

The new restrictions are expected to impact the recovery of the UK’s economy and the recent increase in GDP growth may be short-lived, the article noted.

Max Roser

Max Roser, researcher at University Of Oxford, shared an article on the latest restrictions imposed by the UK government. The new restrictions imposed are aimed at curbing the resurgence in infections cases in the country.

These restrictions are focussed more on limiting social and personal interactions, while interactions being made for economic or commercial purposes have been excluded. The strategy was adopted to limit the implementation of a national lockdown and reduce the impact on GDP by allowing commercial activities to continue.

A complete assessment of the new rules, however, indicates that they may do more harm than good by impacting the overall well-being of the people. The article notes that the perceived impact of these restrictions on the society have been ignored, while trying to maximise the GDP.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, shared his views on how gold prices are rising due to increase in money supply. People across the world are aiming to increase the purchasing power of their savings by investing in gold.

Further, central banks are purchasing more gold as they increase money flow and to diversify their own reserves. Prices of gold as well as silver have been rising due to these factors as people try to maximum their savings and escape currency debasement.

Lacalle also expressed his thoughts on the speculations that the US dollar may be losing its status as a global reserve currency. He noted that the US dollar will continue to be the global reserve currency as there is no other alternative. For example, the euro has its own risks of redenomination and the yuan cannot be a global currency as China imposes massive capital controls.

Professor Steve Hanke

Professor Steve Hanke, an economist at Johns Hopkins University, shared a chart on how the US is losing its status as a superpower. A poll conducted by Pew Research Center has revealed that majority of respondents from countries such as Germany, the Netherlands, Italy, Belgium, Australia, and France felt that China is emerging as the biggest economic power.

The US was considered as the biggest economic power by respondents from Japan and South Korea. Hanke noted that the indiscriminate use of sanctions has impacted the soft power held by the US.

8:00 am

China expected to be the only country among G20 to post growth in 2020 – leading macroeconomic influencers

China’s economy was earlier predicted to contract but new estimates show that the country may post growth during the year. This growth, however, may not result from the usual exports but rather domestic consumption. Macroeconomic influencers share their views on the Covid -19 impact.

Ray Fisman

Ray Fisman, economics professor at Boston University, shared an article on how China is the only G20 country expected to witness a positive economic growth in 2020, according to the Organisation for Economic Cooperation and Development (OECD).

The OECD has revised its forecast for China’s growth to 1.8% from the previous forecast of 3.7% contraction in June. China has brought the coronavirus outbreak under control and has been able to reopen businesses enabling a quicker economic rebound than previously expected.

China’s recovery, however, will not be a driver for global growth as the country’s economy is now more dependent on domestic consumption rather than exports. The OECD also noted that the global economy is slowly moving towards recovery as household spending on consumer durables increased.

Howard Archer

Howard Archer, chief economic advisor to EY ITEM Club, tweeted on the monetary policies announced by the Bank of England during the September meeting. The bank aims to keep interest rates at 0.1% and keep targeted stock of asset purchases at £745bn.

Jeffrey Dorfman

Jeffrey Dorfman, Georgia’s state fiscal economist, shared an article on how the unemployment claims in the US may be over counted. Unemployment claims have been used as indicators for the unemployment rate in the US economy, but these claims may be plagued with errors and double counting, the article noted.

Experts believe that the fraudulent claims for unemployment insurance as well as the number of people receiving payments under the Pandemic Unemployment Assistance programme may overstate the true unemployment numbers by millions.

The ways in which the data is collected from different local and state unemployment offices also contributes to the miscalculation of the actual unemployment figures, the article noted. Although the official figures may still overstate the number of people unemployed, it may also underestimate the number of people whose livelihoods have been impacted by the pandemic.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on Venezuela and Iran defying US sanctions by trading oil. Venezuela received two million barrels of South Pars condensate, which state oil company, Petroleos de Venezuela SA (PDVSA), will use to blend with its crude oil.

PDVSA has been trying to address low production and revive its refining network, which is left crippled after years of mismanagement. This is the first time the country has imported oil, after the US imposed sanctions on the country.

Venezuela is facing a severe shortage of fuel as people are queuing up in long lines for hours or even days.

Stephen Tapp

Stephen Tapp, deputy chief economist and trade research director at Export Development Canada, shared an article on Canada’s economic recovery amid the Covid-19 pandemic. According to the latest figures, Canada’s economy has started to recover although economic activity is still 13% below pre-Covid-19 levels.

Financial markets have started to rebound although oil prices have weakened. Consumer spending has also returned to normal as labour data indicates that more people have started to return to work.

A recent in increase in Covid-19 cases, however, has led some provincial governments to impose restrictions. This could cause some setbacks to the recovery of the economy, the article noted.

7:10 am

US economy may recover to pre pandemic levels by Q2 2021, according to leading macroeconomic influencers

The US economy was earlier projected to return to pre Covid-19 levels by the fourth quarter of 2021. New analysis indicates that the country’s economy may recover sooner than previously forecast. Macroeconomic influencers share their views on the Covid -19 impact.

Daniel Lacalle

Daniel Lacalle, chief economist at Tressis SV, tweeted about the projected recovery of the US economy. The US GDP is expected to recover to pre-Covid-19 levels two quarters earlier of Q2 2021 than the previously projected Q4 2021, according to Morgan Stanley.

Lacalle added that the recovery will mainly be supported by debt-fuelled government spending with the private sector requiring more time to recover.

Antonio Mele

Antonio Mele, economist at LSE Department of Economics, shared an article on the job crisis in the UK. The planned redundancies in the UK are twice that of the previous recession in 2008, according to statistics from the Institute for Employment Studies (IES).

More than 380,000 jobs were reported to be at risk between May and July 2020. Further, 445,000 jobs may be made redundant between July and September, according to the IES. Although the planned redundancies and actual redundancies may differ, the number of redundancies announced is still higher compared to the previous recession.

The UK government’s ‘Plan for Jobs’ programme may help in protecting and supporting job creation apart from the £2bn ($2.38bn) kickstart scheme that supports employers in creating training and apprenticeship positions.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how the stimulus package announced by the UK government is giving rise to a wave of fraudulent claims under the job retention scheme. The error and fraud rate in the scheme is estimated to be between 5% and 10% causing the government to lose £3.5bn ($4.49bn) to fraudulent claims.

Apart from the job retention scheme, the Bounce Back Loan programme has also witnessed fraudulent applications. The loans are self-certified and banks are not liable for them hence background checks are rarely conducted. According to the Policy Exchange think tank, the fraud and error rate in these schemes could cost the government between £1.3bn ($1.66bn) and £7.9bn ($10.14bn).

Adam Tooze

Adam Tooze, director of European Institute, shared his article on the politics surrounding central banks and foreign exchange. The US Federal Reserve recently announced its new policies of targeting higher inflation in the US economy, which some experts feared would weaken the US dollar’s global dominance as a reserve currency.

During the European Central Bank (ECB) press conference, several market experts and commentators expected the bank to comment on the euro’s appreciation against the dollar. Tooze noted that commenting on exchange rates does not fall under the tasks of a central bank as the main focus is on ensuring price stability.

The ECB should focus on formulating fiscal and monetary policies that restore the balance in the euro area. Such actions will ensure that the exchange rate values will restore themselves, Tooze added.

6:52 am

Wearing masks may generate immunity against Covid-19 virus, according to leading macroeconomic influencers

Research has indicated that wearing masks can help in limiting the exposure of the Covid virus and in turn generate an immune response in the body. Masks can help in increasing asymptomatic cases and slow the spread of the disease. Macroeconomic influencers share their views on the Covid -19 impact.

Adam Ozimek

Adam Ozimek, chief economist at Upwork, shared an article on how wearing masks can help in providing immunity against the Covid-19 virus. Research published in the New England Journal of Medicine notes that wearing masks can help in reducing the severity of the virus.

Wearing a mask can help in creating a form of inoculation that can generate immunity against the virus and slow its spread as a vaccine is awaited. The research indicates that the amount of virus a person is exposed to determines the severity of the illness.

Masks can help reduce the amount of virus a person is exposed to and induce an immune response, while ensuring that a large proportion of new infections are asymptomatic.

Colin Williams

Colin Williams, professor of public policy at University of Sheffield, shared an article on the rise in Covid-19 cases in the UK. According to research conducted at the Imperial College London, the number of cases is doubling every 7.7 days. At this rate, the UK will have 10,000 new cases each day in the next two weeks.

Although social distancing rules have been tightened, only 46% of adults are maintaining social distancing, according to the Office for National Statistics. Further, as universities start to reopen the infection rate is projected to rise.

David Wessel

David Wessel, director of Hutchins Center on Fiscal & Monetary Policy, shared an article on the Federal Reserve’s recommendation for additional stimulus from the government. Democrats and Republicans in the US are yet to reach a consensus on the next round of stimulus.

Research indicates that increased spending rather than lower rates will stimulate the economy and help in preventing a deeper recession for the US.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how the composition of foreign students in the US. The US President Donald Trump previously announced at the start of the pandemic that foreign students may be forced to return if universities do not reopen.

India and China account for 52% of all international students arriving in the US. During the 2019-2019 academic year, international students contributed $41bn to the US economy. As universities formalise their plans for the next semester, the future of approximately one million students remains uncertain.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on Sudan declaring an economic emergency after the Sudanese dollar declined sharply. The country had declared a national emergency for three months after flooding led to several deaths.

The article notes that officials blamed the manipulation caused by opposing transitional government for the fall in the Sudanese dollar. Sudan is primarily a gold producer and had implemented steps to open up its markets by moving trade to private investors. The move, however, caused people to sell gold above market price aimed at moving the exchange rate. The government is setting up special courts to curb smuggling and other illegal activities.

8:33 am

US dollar not at risk of collapse as a reserve currency – leading macroeconomic influencers

The weakening of the US dollar and the new policies proposed by the Federal Reserve led to speculations that the US dollar is losing its dominance as a global currency. However, there is ‘push back’ that these speculations are exaggerated because ‘there are no other contenders’ for a reserve currency. Macroeconomic influencers share their views on the Covid -19 impact.

Daniel Lacalle

Daniel Lacalle, an economist and author, tweeted on how the US dollar index lost 10% since March and the speculations surrounding its collapse as a reserve currency. He noted that these speculations are false and that the US dollar index has weakened only relative to the Euro and the Yen.

Lacalle added that the status of the US dollar as a reserve currency is not at risk as there is no other contender. The Euro is at risk of redenomination due to political and economic issues and the Yuan cannot be considered as a global currency until the country maintains capital controls.

Ian Bremmer

Ian Bremmer, a political scientist and author, shared an article on how the UK government plans to rewrite the terms negotiated for its exit from the European Union (EU). The article noted that such a move may breach international law.

UK’s exit agreement provided Northern Ireland the same trade rules as the rest of the EU, which was a primary condition included in the Good Friday Agreement signed in 1998 between the UK and Republic of Ireland.

The new terms of the agreement may alter these guarantees putting an open Irish border in jeopardy. Further, the US may not support any moves that block the borders between the Republic of Ireland and Northern Ireland. Any future US-UK free trade agreement may be undermined by the UK’s plans to renegotiate the terms of its exit, the article noted.

Prof. Steve Hanke

Prof. Steve Hanke, economist at Johns Hopkins University, shared an article on how New York City’s Metropolitan Transportation Authority (MTA) is struggling to stay afloat. The MTA is posting losses of $200m per week as fare revenues and tolls are continuing to fall.

Fewer passengers are using public transportation due to the Covid-19 pandemic. Passenger numbers are 75% below the numbers in 2019. Federal funding of $12bn may help the MTA survive through the year and the next. Without funding, the MTA may need to resort to drastic measures including 40% reduction in subway and bus journeys.

In addition, several capital projects may be delayed, employees may be laid off and fares will likely be increased. The MTA has been facing fiscal problems for more than a decade and the new challenges are complicating existing issues.

Adam Ozimek

Adam Ozimek, chief economist at Upwork, shared an article on the challenges faced by the restaurants industry in the US amid the Covid-19 pandemic. Bars and restaurants have been held responsible for outbreaks in some of regions in the US due to the close proximity and enclosed spaces in these established spaces.

Public health experts have noted that continued restrictions on these spaces are essential to prevent any further spike in infections. Shuttering these businesses for too long can drive thousands of them into bankruptcy.

A more focussed strategy that can allow restaurants to open with outdoor dining and allowing bars to remain partially open along with federal aid is essential for the industry to survive, the article noted.

wonkmonk

wonkmonk, an economic policy activist, shared an article on how global output has been growing but the pandemic still casts a shadow on the forecasts. The worldwide Purchasing Manager’s Index (PMI) surveys for August indicated the fastest growth during the year.

The JPMorgan Global PMI increased from 51 in July to 52.4 in August, which is the highest increase recorded since March 2019. The PMI indicate an expansion of 3% in the annual rate of GDP.

The global PMI had declined to an all time low of 26.2 in April, following lockdown measures implemented across the world.

7:50 am

Climate change may adversely impact financial markets, according to leading macroeconomic influencers

Wildfires and flooding have become increasingly common due to the effects of climate change. As these changes increase, they are expected to majorly impact a financial system already under pressure from the Covid-19 pandemic. Macroeconomic influencers share their views on the Covid -19 impact.

Matthew E. Kahn

Matthew E. Kahn, Bloomberg Distinguished Professor of Economics and Business at Johns Hopkins University, shared an article on how a new report from the US Commodity Futures Trading Commission has highlighted the impact of climate change on financial markets.

The report states that the disruptions caused by climate change can threaten the fundamental conditions that support the country’s financial system. President Donald Trump had downplayed the impact of climate change on economic growth. The new report is a first from a government entity highlighting the damage that climate change can have on financial markets.

The first risk posed by climate change is expected to be rising prices of homes and mortgage default rates due to the wildfires and flooding. Climate change is also expected to impact agricultural commodity prices, the report added.

David Dayen

David Dayen, executive editor at The Prospect, shared an article on AstraZeneca and the University of Oxford’s Covid-19 vaccine trial being put on hold after one of the participants fell sick after receiving the vaccine. Although the step has been described as routine for such trials, it is expected to delay the clinical trial for the vaccine.

AstraZeneca initially reported positive data from the clinical trial in July raising hopes for a vaccine at the earliest opportunity. However, pausing the clinical trial now raises questions on how long it will take for a vaccine to be available to control the pandemic that has impacted the world.

Nine pharmaceutical companies that are carrying out phase three clinical trials on Covid-19 vaccine including AstraZeneca, GlaxoSmithKline and Sanofi released a statement committing to developing a vaccine based on ethical and scientific principles.

Pedro Nicolaci da Costa

Pedro Nicolaci da Costa, Federal Reserve & economy correspondent at Market News International, shared an article on the increasing pressure on the Federal Reserve to increase main street lending. Without the lending facility, the economy will witness a K-shaped recovery, in which large corporations will survive but small businesses may fail.

The Federal Reserve is distributing loans through large banks who are reluctant to offer them to small businesses. The article notes the Fed should explore extending loans through private lenders who can provide tailored loans to small businesses and help them survive.

Andreas Peichl

Andreas Peichl, professor of economics at the University of Munich, shared an article on how Germany’s stimulus measures have helped the country in addressing the downturn caused by the pandemic. As a result, Germany is performing much better than other industrialised countries.

The country’s Economics Ministry has revised its earlier forecast a downturn of 6.3% to 5.8% in 2020 and a growth of 4.4% in 2021. The government has earmarked an economic stimulus package of €130bn ($146bn) for the country for 2020 and 2021.

Germany’s central bank, however, has noted that the stimulus spending for 2020 will result in easing the recession by only 1% considering the huge amount of spending.

Prof. Steve Hanke

Professor Steve Hanke, economist at Johns Hopkins University, shared an article on more than 10,000 deaths related Covid-19 in Argentina. The majority of the infection cases are concentrated in the Buenos Aires metropolitan area putting the healthcare system under great stress.

Despite having a strict lockdown, the country has not been able to control the spread of the virus. Quarantine measures have been gradually relaxed but some regions are still under various forms of lockdown. Hanke noted that the situation in the country remains dismal as inflation has increased to 37.25% per year.

 

7:32 am

Lack of further stimulus for the US economy could prolong recovery, according to leading macroeconomic influencers

The Democrats and Republicans are yet to reach a consensus on further stimulus package for the US economy. The delay in releasing stimulus into the economy could worsen the unemployment rate and force states to increase spending cuts. Macroeconomic influencers share their views on the Covid -19 impact.

Adam Posen

Adam Posen, president of Peterson Institute for International Economics, shared an article on how additional stimulus is essential for the US economy to recover from the impact of the Covid-19 pandemic.

The Democrats propose a stimulus package of $3.4tn, while the Republicans have proposed $1tn. Lack of consensus on the stimulus may result in spending cuts by states causing a deeper recession, loss of between 4% and 5% of GDP and an increase in unemployment by 4% to 5%, the article noted. Black families and minorities are expected to be worst affected.

Mark Weisbrot

Mark Weisbrot, co-director of Center for Economic & Policy Research, shared an article on how states in the US are in a financial crisis due to lack of further stimulus from the government. States have started to implement several fiscal measures to cut funding and even Medicaid as Democrats and Republicans are deadlocked over the next round of stimulus.

Experts have already warned that any further reduction in spending could affect the economic recovery from the pandemic and impact state and local services. Programmes for education, public safety and health care remain at risk of funding cuts as the deadlock continues.

State and local governments are expected to face budget shortfalls of up to $500bn by 2022, according to Moody’s Analytics. In the absence of further aid, states and local governments will be forced to make further spending cuts that can impact all activities funded by the government.

Cdns 4 Tax Fairness

Canadians for Tax Fairness, an organisation promoting fair taxation, shared an article on how philanthropy benefits the rich. The article notes that the money donated through philanthropy often goes for elite causes rather than helping the poor.

The UN general assembly has cautioned governments to assess the potential risks and side effects involved in taking money from the rich donors. Individuals donating through philanthropy may divert focus from actual causes that need attention.

Further, governments across various countries offer tax exemptions to encourage people to donate. The move to abolish such tax exemptions to ensure that the rich cannot claim anything more than what tax payers can has been made several times but never implemented.

As the pandemic increases inequality among people, proposals to impose taxes on the rich have been put forth. While imposing taxes may need altering government policies, the focus of philanthropy should be on working to achieve democracy and equality, the article notes.

Kevin Denny

Kevin Denny, economist at University College Dublin, shared an article on how Ireland’s GDP figures may not be an actual representation of the country’s economy. According to official figures from the Central Statistic Office (CSO), Ireland’s economy contracted by only 6.1% in the second quarter compared to an average of 12% across the Euro area.

The modified domestic demand figures, which is an alternate measure of economic activity, indicate that the economy contracted by 16.4%. The difference between the CSO’s figures and modified domestic demand figures is attributed to €37.8bn ($44.58bn) in net exports of goods and services during the quarter according to the CSO.

Based on modified domestic demand figures, however, Ireland is officially in recession.