The IMF is spouting a stream of press releases (that it calls “World Economic Outlook” revisions) to show…well I’m not sure what. That it’s relevant again, I suppose, and ready to take charge. But it’s wise to treat their projections with the same care you would any others: a warning sign for me was noticing that some of their revised analysis is based on annualized 3-month percent changes in output and trade. Bound to be volatile. So it’s a good idea to put these projections in context, as I attempt to do in this chart.
I’ve noticed quite a few visitors to this site have used one or other of the search engines to look for basic information on the WTO, such as the WTO’s ‘objectives’. It’s not something I often provide: the WTO itself does a lot of that, and pretty well, too.
Over the past decade or so, I’ve been commissioned by the WTO to write several books about the Agreements, about the history of WTO and about the politics of trade. For one reason or another not all of these projects lead to a publication (my bio contains a list of those that did).
One such project was a sort of ‘experiment’ at presenting the WTO to junior, middle and senior high-school students.
The updated Bureau of Meteorology data for 2008 show that the ‘anomaly’ has fallen back to just over 0.3 of a degree. This graph (click the thumbnail) has been created from BOM data using the R code from this post.
“To some people R is just the 18th letter of the alphabet. To others, it’s the rating on racy movies, a measure of an attic’s insulation or what pirates in movies say.” extract from NY Times
Should I be embarrassed, as an Australian, that one of my favorite languages comes from New Zealand?
The problem is well-expressed by Barry Ferguson writing in The Age (of all places):
“Now is the time when companies with unsustainable business models, with outdated product ranges, too much debt, inadequate boards and management, and poor corporate governance, will be exposed. It is a time when legendary economist Joseph Schumpeter’s gales of creative destruction do their best work.
The primary manifestation of the Government’s problems is the bail-out. While there is a case to support the banks based on the pervasive nature of the impacts, there is much less of a case for supporting the production and retail ends of the car industry and child-care centres. These interventions will lessen our economy’s ability to adjust to a post-recession global economy.” extract from Barry Ferguson
A longer exposition of the same point is offered by Daron Acemogelu in a recent Policy Insight paper for CEPR that repays reading. He points out that
Counter-trade, or ‘bartering’, is not a sustainable way to finance commodity supply. It attracts attention from time-to-time; such as when the former Soviet states were split from the mother-ship in 1990 and found themselves short of cash. Experience shows, every time, that it means trading one form of illiquidity (lack of credit) for another even less tractable (too many Soviet trucks, or thousands of tonnes of low-grade manganese, or a dam-full of cloudy vegetable oil).
“In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil.” extract from Financial times
The use of non-transparent denominators in place of transparent ones (like cash) is too attractive to fraudsters—often in the shape of a ‘state-owned’ enterprise—that want to launder their excesses and disguise their failures.
The re-introduction of intervention-buying and export subsidies for milk products in the EU comes after the steady fall of EU milk/milk-product prices to near the (undistorted) world market price over the past decade. The ‘gap’ between the distorted EU price and the undistorted world price is the ‘nominal rate of assistance’ (NRA) to EU milk that can be plotted in the Agricultural Incentives Database.