A picture is worth a thousand words…
So starting this week we are launching a new type of bitesize post: short and snappy, based around one or two charts.
To get the ball rolling, the first two will be published today, with more to come later this week. But don’t worry- our longer, regular, posts aren’t disappearing. From next week onwards we’ll be publishing a mixture of bitesize posts and regular length ones.
John Lewis, Managing Editor
Energy is the fundamental currency of the physical world, while GDP is the imperfect catch-all measure of economic progress. The plot shows electricity generation per capita against GDP per capita for 2015. The bubble areas represent population size, while the colours are the fraction of power which is produced from renewable sources – with light green a high percentage and dark green a low percentage.
For most of the 18th-20th centuries, government bonds usually behaved like a risky asset. When equity prices fell, bond yields rose, i.e. bond and equity returns were positively correlated (bond prices move inversely to yields). But since the mid-2000s, bond and equity returns have been negatively correlated, i.e. bonds became a hedge for risk. Before this, the last time this correlation was near zero for a prolonged period was the long depression in the late 19th century.
There are two ways people can make their resources go further when buying a home.
One is to increase the loan-to-value (LTV) ratio and hence increase the amount available to buy a house for a given deposit.
The other is to lengthen the term over which the mortgage is repaid, which increases the size of loan associated with a given level of monthly repayments.
With trade negotiations apparently looming, one may wonder with whom the UK trades most. Given the geospatial aspect of the data, perhaps a map may help. Even better, how about a cartogram?
Cartograms can be formed by distorting a map so that the areas of countries correspond to the relative values of some measure.
Thomas Viegas and Gabija Zemaityte.
Many things have being trending down globally over the recent decades: real interest rates, productivity, world trade, you name it! And it’s generally acknowledged that these falls are problematic for policymakers. However, there is one downward trend which has been welcomed with open arms…
Since the financial crisis the UK’s fiscal and current account balances have persistently been in deficit. These ‘twin’ deficits are significant in historical terms, with a record peacetime fiscal deficit in 2009 and a record current account deficit in 2015. But how closely related are these ‘twins’ and do they pose a risk to financial stability? Using a new ‘from-whom-to-whom’ dataset I find that the two deficits are not directly related to each other and are being financed through relatively stable channels.
My earlier post arguing that robotisation wouldn’t destroy jobs, slash wages or drastically shorten the working week prompted many thoughtful responses. Richard Serlin and others countered, arguing that if automation affects all sectors, then displaced workers may have nowhere to go. Others asked if the sheer scale, speed and scope of robotisation might make it much more disruptive. Or if wages fall, who will be able to buy the extra output? And Noah Smith raised the prospect that robotisation might eventually differ from earlier waves of innovation by replacing rather than complementing human labour. This post attempts to respond to those points, expand on the original post and explain why I’m still relatively relaxed about robots.
Inflation breakevens and inflation swap rates have fallen a lot in recent years. Big falls have often occurred amid deteriorating risk sentiment. This isn’t a new phenomenon. Looking across markets and time periods, I show that measures of financial market inflation compensation tend to fall when risk sentiment worsens. What’s more, this effect is asymmetric – inflation compensation doesn’t rise by as much when risk sentiment improves.
Sometimes the obvious questions are the hardest to answer. In this post I ask how much of what the Bank and the financial industry in general write can actually be read by a broad audience. Based on my findings, I suggest that both must try harder if claims of accessibility are to be meaningful.