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22 июня, 16:43

The art of the deal: The promise and pitfalls of privatising public assets

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Print section Print Rubric:  The promise and pitfalls of privatising public assets Print Headline:  The art of the deal Print Fly Title:  Privatisation UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  The art of the deal Location:  WASHINGTON, DC Main image:  20170624_USP002_0.jpg DONALD TRUMP ran for office promising to spur the private sector to rebuild America’s roads, bridges and airports. But it seems that Republicans want to start their modernisation in the sky. On June 21st House Republicans unveiled a bill that would privatise air-traffic control, a policy the president announced earlier this month. If the administration is to be believed, this is just one of many privatisations that could increase efficiency and ...

22 июня, 16:43

Financial assets, made in China: China enters the big leagues of global markets

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Print section Print Rubric:  Index inclusions will force investors to buy Chinese stocks and bonds Print Headline:  Financial assets, made in China Print Fly Title:  Global markets UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Financial assets, made in China Location:  SHANGHAI Main image:  20170624_FND001_0.jpg FROM shoes to shirts and phones to fridges, made-in-China goods have blanketed the globe over the past three decades, entering every country and just about every home. But one kind of Chinese good few abroad dare touch: its financial assets. Outsiders own less than 2% of its shares and bonds, far below the levels of foreign ownership seen in other markets. Capital barriers and financial risks have put investors off. ...

22 июня, 16:43

Free exchange: The Federal Reserve risks truncating a recovery with room to run

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Print section Print Rubric:  Janet Yellen’s productivity scepticism could prove self-fulfilling Print Headline:  Diminished expectations Print Fly Title:  Free exchange UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Free exchange WHEN it comes to inflation, the Federal Reserve sometimes resembles a child freshly emerged from an age-inappropriate horror film. To its members, runaway price increases seem to lurk in every oddly shaped shadow. On June 14th America’s central bank raised its benchmark interest rate for the third time in six months, even as inflation lingered below its 2% target, as it has for most of the past five years. Some critics reckon the Fed’s 2% inflation target is too constraining. Indeed, in recent comments on a letter from prominent economists calling for a higher target, Janet Yellen, the chairman, signalled openness to the idea. But the ...

22 июня, 16:43

When the gloves come off: British business prepares for a bare-knuckle fight with the government

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Print section Print Rubric:  Business squares up for a bare-knuckle fight against too hard a Brexit Print Headline:  When the gloves come off Print Fly Title:  The government and business UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  When the gloves come off Main image:  20170624_BRD001_0.jpg IT HAS been a dispiriting year for many British businesspeople. Most voted to remain in the EU in last year’s referendum. They accepted defeat, but then looked on in horror as Theresa May, the new prime minister, veered towards an extreme form of hard Brexit, promising to leave the single market and customs union and to impose harsh migration restrictions. This has been accompanied by a ceaseless flow of vitriol from politicians on all sides, triggered in part by the controversial bankruptcy of BHS, a ...

15 июня, 17:53

Buttonwood: Getting the most out of business taxes

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Print section Print Rubric:  Does it matter how nations pluck the corporate goose? Print Headline:  The business of tax Print Fly Title:  Buttonwood UK Only Article:  standard article Issue:  A landslide legislative victory would make France’s president a potent force Fly Title:  Buttonwood ONE of the hottest debates in economic policy at the moment is how to ensure companies are paying the optimal amount of tax. On the right, politicians think that a lower corporate-tax rate will lead to more business investment and thus faster economic growth. Hence the initial stockmarket enthusiasm after President Donald Trump was elected on a platform that included cuts in business taxes. On the left, the belief is that business is not paying its “fair share” of tax and that it can be further squeezed to pay for spending commitments. Hence the promise of the Labour Party in Britain’s recent election campaign to push the corporate-tax rate up ...

15 июня, 17:53

The age of Merkron: Restarting the Franco-German engine

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Print section Print Rubric:  Emmanuel Macron’s triumph restarts the Franco-German engine Print Headline:  The age of Merkron Print Fly Title:  Paris-Berlin relations UK Only Article:  standard article Issue:  A landslide legislative victory would make France’s president a potent force Fly Title:  The age of Merkron Location:  BERLIN Main image:  Macron and Merkel find a little magic Macron and Merkel find a little magic FOR Germany, Emmanuel Macron was the dream candidate. Where his far-left and far-right rivals for the presidency bashed Berlin, he defended it. During his two campaign visits he was, to quote one German official, “pitch perfect” on his country’s problems. Several of Mr Macron’s inner circle are German-speakers with close links to Berlin. Withered Franco-German ties are already ...

15 июня, 17:53

Free exchange: The perils of nationalisation

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Print section Print Rubric:  Expanded state ownership is a risky solution to economic ills Print Headline:  National treasure Print Fly Title:  Free exchange UK Only Article:  standard article Issue:  A landslide legislative victory would make France’s president a potent force Fly Title:  Free exchange WHEN Jeremy Corbyn unveiled his Labour manifesto ahead of the recent British election, opponents gawked at pledges to renationalise the postal and rail systems. Such enthusiasm for state ownership smacks of a philosophy long since abandoned by leaders on both left and right. Despite Labour’s decent electoral performance, nationalisation is not everywhere on the march; on June 5th Donald Trump made public his desire to privatise air-traffic control. But the rise of Mr Corbyn and Bernie Sanders hints at a weakening of the rich-world consensus that the less of the economy owned by government, the better. That is a pity. Expanded state ...

14 июня, 14:09

The 1914 effect: The globalisation counter-reaction

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Main image:  WHEN the Archduke Franz Ferdinand (pictured right) was assassinated in 1914, there were few initial indications that world war would follow. In retrospect, many people have argued that the killing was a freak event that should not have resulted in the folly of war.But was the subsequent war really an exogenous event? Or was it the near-inevitable consequence of the tensions resulting from the first great era of globalisation? If Franz Ferdinand had survived, maybe something else would have triggered the conflict. If the latter possibility is right, that may be a warning sign for the current era.From 1870 to 1914, the first great era of globalisation saw rapid economic growth, trade that grew faster than GDP, mass migration from Europe to the New World and convergence of real wages between the old and new worlds. In Europe, GDP per capita grew more than 70%; in the new world, (Argentina, Australia, Brazil, Canada and the United States) it doubled. Trade grew from 5.9% of global GDP to 8.2%. In many European countries growth was much higher; nearly 15% in the UK and 18% in Belgium. This occurred despite the restoration of tariffs in many countries in the 1880s onwards. Transport costs were falling fast thanks to the railway and the steamship which meant that prices for goods like wheat, ...

13 июня, 20:15

Daily chart: Around the world, beer consumption is falling

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Main image:  THE world appears to have passed peak booze. The volume of alcoholic drinks consumed globally fell by 1.4% in 2016, to 250bn litres, according to IWSR, a research firm. It is the second consecutive year of decline, and only the third since data started to be collected in 1994. The drop-off is caused by people drinking less beer, which accounts for three-quarters of all alcohol drunk by volume. Worldwide beer consumption shrank by 1.8% to 185bn litres last year. Yet because the drinking-age population of the world grew by 1% in that time, beer consumption per drinking-age adult declined even more, by 3.2%. The overall decline is almost entirely because of downturns in three of the five biggest markets. China, Brazil and Russia accounted for 99.6% of the global decrease in the volume of beer drunk in 2016.Both economics and changing tastes play a part. China overtook America to become the world’s biggest market for beer by volume in 2001. It now quaffs a quarter of all beer. But consumption per person peaked in 2013 and dropped further last year. One reason is that Chinese drinkers are turning away from cheap local brews towards premium products and imported beers. Beer’s appeal is also waning among older drinkers. Over-30s are moving to wine and over-40s favour baijiu, the national spirit. ...

12 июня, 23:29

Speaker of the pack: Michel Barnier is impatient for Britain to get its Brexit points in order

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Print section UK Only Article:  standard article Fly Title:  Speaker of the pack Location:  BRUSSELS Main image:  20170617_eup502_0.jpg  MICHEL BARNIER, the French diplomat who will lead the European Union’s Brexit negotiations, is keen to project an air of strength and stability. Asked if he is worried that the talks could blow up, he wanders over to his desk and picks up a mug emblazoned with the mantra “Keep Calm and Negotiate”, declaring: “There won’t be any drama from my side.” Speaking to eight European newspapers, including The Economist, in his first interview since securing the Brexit job last July, Mr Barnier refuses to be drawn out on the chaos unfolding across the English Channel after last week’s general election, in which the ruling Conservative Party failed to win an overall majority. But he expresses his concern that no talks have taken place in the two-and-a-half months since Theresa May, the Prime Minister, triggered the two-year process for Britain’s withdrawal under Article 50 of the EU Treaty. “We haven’t negotiated, we haven’t ...

09 июня, 07:55

The Economist explains: Why is Swedish monetary policy so loose?

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Main image:  THE Swedish economy is, by all accounts, booming. Output, adjusted for inflation, has grown by 2.8% on average since 2009 and rose by a robust 3.2% last year. In April Swedish inflation nearly hit the target of 2% aimed at by the Riksbank, Sweden’s central bank. Yet the Riksbank has chosen to leave interest rates at an extraordinarily low level: below zero, in fact, at -0.50%. In addition, it is increasing stimulative asset purchases, known as quantitative easing (QE). What is the Riksbank up to?Sweden’s central bank is not alone in erring on the side of dovishness. Even as post-crisis doldrums give way to steady growth, central banks worldwide tend to remain cautious, because often faster growth has not yet led to high inflation. American economic growth has been chirpy for years, and unemployment in America has just fallen to a 16-year low of 4.3%, yet the Federal Reserve’s target range is still only at 0.75-1%. The Fed is tightening—it has ended its own QE programme and begun lifting rates—but at a slower pace than it aimed to achieve two years ago. In the euro area, the European Central Bank (ECB) is still buying bonds by the barrel in an effort to keep inflation moving towards its target. Small, open economies face the additional complication that capital flows from abroad can ...

08 июня, 17:46

Air travel: President Trump wants to privatise air-traffic control

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Print section Print Rubric:  The president wants to privatise air-traffic control Print Headline:  Roger, Tango Romeo…ump Print Fly Title:  Air travel UK Only Article:  standard article Issue:  — Terror and the internet — Theresa May’s failed gamble Fly Title:  Air travel Main image:  20170610_wbp501.jpg IN JUNE 1956 a TWA Constellation collided with a United Air Lines DC-7 over the Grand Canyon in Arizona, killing all 128 people on both aircraft. At the time it was the worst ever airline disaster. Struggling with outdated technology and a post-war boom in air travel, overworked air-traffic controllers failed to spot that the planes were on a collision course. That crash led to the creation of a new body, which became the Federal Aviation Administration (FAA), in charge of running and modernising the world’s biggest air-transport system. With that system ...