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23 апреля, 15:01

The Franco-German relationship: What France’s election means for Germany

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Main image:  Emmanuel Macron outside the chancellery in Berlin IN MAY 2012 a freshly elected François Hollande took off for Germany on his first foreign visit as president, determined to forge a close alliance with Angela Merkel. His plane was hit by lightning and had to turn back to Paris. Maybe it was an omen. Mr Hollande never achieved the reboot he had sought; a function of crises in both countries, poor chemistry between the two leaders and the growing gap between struggling France and the booming economy across the Rhine.Paris sees Berlin as patronising and uncollegiate. Berlin sees Paris as dysfunctional and unreliable. The two have been through shocks—the refugee crisis in Germany and the terror attacks in France—that prompted “no strong bond of cooperation between the two countries, despite the potential to set an example to the rest of the EU”, write Josef Janning and Manuel Lafont Rapnouil of the European Council on Foreign Relations.Yet the two are irredeemably interdependent. Berlin needs Paris to help keep the euro zone together, deal with the root causes of the refugee crisis in the Middle East and Africa (Mrs Merkel is increasingly taking an interest in the latter) and make Europe more self-sufficient in defence. There is even talk of Germany “buying into” France’s nuclear deterrent if ...

21 апреля, 15:48

Taking stock: To understand Britain today, look to the 17th century

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Main image:  DAMN her eyes! I took over as Bagehot only the other day, on April Fools’ Day, having not focused on British politics since 1993. I was gently easing myself into my new job—getting my parliamentary pass, having lunch with MPs who happened to have been at Oxford with me, planning a trip out to the mysterious North. And now I have an election to cover!Theresa May’s decision to call a general election has been thoroughly chewed over by now. This was obviously a good call. Labour is as weak as it has ever been; Mrs May will be able to stamp her own authority on her party; shifting the next general election from 2020 to 2022 means that she won’t be negotiating with the EU against the sound of a ticking clock. I also sense that this could be a highly significant election. Mrs May is hardly an electrifying politician—she’s a competent grind with an unpleasant willingness to play to the Daily Mail. But she’s operating in electrifying times—and she has an interesting sense that something has gone wrong with globalisation and that we need to reach back into our national traditions, our sense of ourselves as a community, to fix it.This is the first election to be called in the post-globalisation era. British politics since the 1980s has been dominated by liberal globalisation: dismantling the ...

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20 апреля, 21:55

Daily chart: Competitiveness at school may not yield the best exam results

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Main image:  EVERY three years the OECD, a club of mostly rich countries, tests hundreds of thousands of high-school pupils across the world on maths, reading and science. Its Programme for International Student Assessment (PISA) has become the leading benchmark for international educational comparisons, and has prompted policymakers to learn lessons from the best-performing school systems. The latest PISA study, conducted in 2015, assessed more than half a million students in 72 countries. For the first time, it also asked respondents in 53 countries broader questions about their social and emotional well-being, addressing their relationships with peers, parents and teachers. The findings, published on April 19th, suggest that students’ family circumstances and psychological well-being matter just as much as schooling does for their eventual performance.One strong conclusion from the study is the importance of students’ desire to succeed, regardless of their natural aptitude. In general, the 25% of pupils describing themselves as the most motivated attain average test scores that correspond to an extra year’s worth of schooling relative to those of the bottom 25%. However, not all forms of motivation are equal.The OECD distinguishes between external motivation, produced by pressure from others, and ...

20 апреля, 17:49

Infra dig: How and when to use private money in infrastructure projects

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Print section Print Rubric:  How and when to use private capital in infrastructure projects Print Headline:  Private matters Print Fly Title:  Paying for infrastructure UK Only Article:  standard article Issue:  Why an election offers the chance of a better Brexit Fly Title:  Infra dig Main image:  20170422_FNP001_0.jpg WHEN the Indiana Toll Road was opened in 1956, there were eight pairs of travel plazas, or rest stops, along the 156-mile (250km) stretch linking Chicago to Ohio and points eastward. As cars became faster and less thirsty, travellers had less reason to stop regularly for petrol or snacks. Three of the travel plazas closed in the 1970s. Restaurants shuttered, even if offered free rent. The remaining plazas, dwindling in number, fell into disrepair. The abiding memory some road users had of Indiana was of grubby toilets along the toll road. Those ...

17 апреля, 08:46

The Economist explains: Why America’s Federal Reserve might make money disappear

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Main image:  BEFORE the financial crisis, America’s Federal Reserve held assets worth around $850bn. Today, the central bank’s balance-sheet is more than five times as large, at $4.5trn. It grew during and after the financial crisis as the Fed purchased vast quantities of government bonds and mortgage-backed securities using newly created money, most of it under a policy known as quantitative easing (QE). Now the Fed is preparing to sell some assets, and retire the corresponding money. Why and how will it do this?The Fed resorted to QE to stimulate the economy after it had moved the short-term interest rate, its usual policy instrument, as low as it could go. Debate rages over how, exactly, QE worked; Ben Bernanke, the former Fed chairman, once quipped that the policy “works in practice but not in theory”. But it is clear enough that QE pushed up the price of long-term bonds. This put downward pressure on long-term interest rates (which move inversely to bond prices). Today, however, the Fed, now led by Janet Yellen (pictured), is raising short-term rates, as it tries to keep a lid on inflation. So—the logic goes—it should also shrink its balance-sheet, to push up long-term rates.There are different ways to shrink the balance-sheet. The most aggressive approach would be to sell bonds. This would ...

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14 апреля, 17:35

Up and down: Trends in the air-freight business

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Print section UK Only Article:  standard article Fly Title:  Up and down Main image:  20170415_blp910.jpg WHEN people think of air travel they picture planes full of passengers. But air cargo is as vital—perhaps more—to the global economy. Only 1% of exports by volume go in aircraft but because they tend to be the most expensive goods, they account for 35% of global trade by value. Nearly everyone has used products delivered by aircraft, from vaccinations in poor countries to smartphones in rich ones. Cargo airlines such as FedEx Express and Emirates Skycargo have had a difficult few years. Global trade growth has stalled, and along with it demand for air freight. Inanimate air cargo mostly rides in the same planes as the live sort; when rising passenger demand encouraged airlines to buy more planes, the additional cargo capacity flooded the industry, causing air-freight prices to slide. Industry revenues have fallen from a peak of $67bn in 2011 to $50bn now, according to IATA, a trade group. Yet the mood at the World Air Cargo Symposium in March in Abu Dhabi was cautiously optimistic. For the first time since the global ...

12 апреля, 17:51

A country mile: Rescuing Myanmar’s farmers from the debt trap

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Print section Print Rubric:  The struggle to rescue Myanmar’s farmers from poverty and indebtedness Print Headline:  A country mile Print Fly Title:  Rural finance in Myanmar UK Only Article:  standard article Issue:  As Turkey votes on a new constitution, it is sliding into dictatorship Fly Title:  A country mile Location:  DALA TOWNSHIP, YANGON Main image:  Living on borrowed rice Living on borrowed rice WHEN Myo Than was a young man, his family had 12 hectares of farmland in Dala, a rural township just across the river from Yangon, Myanmar’s biggest city. His mother sold most of it after his father died. Mr Myo Than grows rice on what’s left, but water shortages mean he reaps just one harvest each year. He borrows money from the Myanmar Agricultural Development Bank (MADB)—1.5m kyats ($1,100) ...

12 апреля, 17:51

L-EFTA behind: The EFTA countries show how hard Brexit will be for Britain

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Print section Print Rubric:  To understand the trade-offs that Brexit Britain must make, look to EFTA Print Headline:  L-EFTA behind Print Fly Title:  The European Free Trade Association UK Only Article:  standard article Issue:  As Turkey votes on a new constitution, it is sliding into dictatorship Fly Title:  L-EFTA behind Location:  OSLO AND REYKJAVIK Main image:  20170415_FND002_0.jpg NORWAY offers much to envy. The food is tasty, public services are great and the people are impossibly good-looking. Its trade policy looks equally desirable. Though it trades heavily with the EU, Norway can also strike trade deals all over the world, either operating in concert with the three other members of the European Free Trade Association (Iceland, Liechtenstein and Switzerland) or on its own. Members of ...

12 апреля, 17:51

Free exchange: Why the Federal Reserve should keep its balance-sheet large

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Print section Print Rubric:  Why the Federal Reserve should keep its balance-sheet large Print Headline:  On balance Print Fly Title:  Free exchange UK Only Article:  standard article Issue:  As Turkey votes on a new constitution, it is sliding into dictatorship Fly Title:  Free exchange HOW much money should exist? The Federal Reserve must soon confront this deep question. The Fed has signalled that towards the end of 2017 it will probably begin to unwind quantitative easing (QE), the purchase of financial assets using newly created bank reserves. The central bank’s balance-sheet swelled from about $900bn on the eve of the financial crisis to about $4.5trn by 2015 as it bought mortgage-backed securities and government debt (see chart). If and when the Fed shrinks its balance-sheet, it will also retire the new money it created. Economists such as Milton Friedman popularised the study of the quantity of money in the 1960s and ...

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11 апреля, 18:44

Money Talks: Podcast: The remarkable calmness of gold

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Main image:  20170411 15:08:56 Comment Expiry Date:  Wed, 2017-04-26

06 апреля, 17:42

Jewel in the crown: What China can learn from the Pearl river delta

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Print section Print Rubric:  The Pearl river delta is China’s most dynamic, open and innovative region, says Vijay Vaitheeswaran. Can it show the way for the rest of the country? Print Headline:  Jewel in the crown Print Fly Title:  The Pearl river delta UK Only Article:  standard article Issue:  What the country can learn from the Pearl river delta Fly Title:  Jewel in the crown Main image:  20170408_SRP059_0.jpg LIBERAL ECONOMICS MAY have gone out of fashion, but not before working miracles in some parts of the world. To witness one of them, visit the Luohu immigration-control point on Shenzhen’s border with Hong Kong, where some 80m crossings are made every year. Since Deng Xiaoping designated the mainland Chinese city as a special economic zone in 1980, putting out the welcome mat for foreign investment and encouraging private enterprise, trillions of dollars ...

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06 апреля, 17:42

Asia makes, China takes: The PRD is exporting jobs but producing more goods for the home market

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Print section Print Rubric:  The delta’s factories are doing a U-turn Print Headline:  Asia makes, China takes Print Fly Title:  Diversification UK Only Article:  standard article Issue:  What the country can learn from the Pearl river delta Fly Title:  Asia makes, China takes Main image:  20170408_src198.png “THE GREAT CONVERGENCE”, a recent book by Richard Baldwin, argues that throughout most of the industrial era the know-how and culture essential for high-end manufacturing remained cloistered in the factories of the rich world. That led to a divergence between the fortunes of the West and the rest. But once the cost of communications started plunging, after 1990, such knowledge flowed more freely. Western multinationals built world-class factories in remote places, unpacking and outsourcing their manufacturing operations and supply chains. China was one great ...