Category Archives: International Economics

Bitesize: Global growth: The *old* normal?

Alexander Naumov.

“Too slow for too long”, referring to global GDP growth, was the title of a recent IMF publication. But is world economic growth really that slow? Looking at the data over the past several decades, global growth since the crisis does not appear particularly weak; at least not in a historical perspective

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Filed under Bitesize, International Economics

Bitesize: Has the FOMC increased its focus on foreign risks?

Dan Wales and Emil Iordanov.

Have FOMC discussions changed since the end of 2015? Are the committee more concerned about international risks now?

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Filed under Bitesize, International Economics, Macroeconomics, Monetary Policy

Bitesize: Sovereign debt, default and “r-g”

Mark Joy.

Government debt as a share of GDP is at its highest since WWII in advanced economies and since the 1980s debt crises in emerging markets, but so far, apart from Greece, Ukraine and some high-profile close calls in the euro area, this level of debt has caused barely a stir in financial markets. So is it okay to stop worrying?

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Filed under Financial Stability, International Economics, Macroeconomics

Bitesize: Power and progress

Arthur Turrell.

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.

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Filed under International Economics, Macroeconomics

Bitesize: Mapping the UK’s trade

Jonathan Fullwood.

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.

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Bitesize: The improvement in the gender labour force participation gap

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…

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Filed under Bitesize, Economic History, International Economics, Macroeconomics

The economic effects of globalisation: a view from two of the Bank’s Agents

Will Holman and Tim Pike.

The openness of the UK economy — measured by international trade and labour flows — has increased substantially in the past twenty years (Charts 1 (a) and (b)). In this post we explore three structural changes to the economy arising from globalisation that we have observed daily in our visits to companies around the UK. These are increases in: (a) openness of product markets; (b) access for UK businesses to overseas labour; and (c) outsourcing of non-core activities to lower-wage economies. There is a long-running debate whether globalisation of markets has weakened the link between domestic factors, such as the amount of domestic slack (spare capacity among UK-based firms and workers), and inflationary pressures. In our view, these structural changes have provided an additional source of slack in product and labour markets that has borne down on UK inflation in recent years. Looking to the future, the vote on 23rd June to leave the EU might affect the pace of change of these forces, making future trends uncertain.

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Filed under International Economics, Macroeconomics, Monetary Policy

Global Investment – The Role of Emerging Markets

Alexander Naumov.

Capital investment is one of the fundamental building blocks of future productivity growth and anticipating future developments in global investment is a major concern for policymakers. This note makes two observations: 1) Despite weak investment in advanced economies, investment is not weak globally – as a share of world GDP, capital investment is currently at the highest level since 1990; 2) Emerging market economies, particularly China and commodity exporters, disproportionally contributed to the recent strength in global investment, but that contribution is now at risk.

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Filed under International Economics

Transmitting liquidity shocks across borders: evidence from UK banks

Robert Hills, John Hooley, Yevgeniya Korniyenko and Tomasz Wieladek.

When funding conditions became much more difficult in the recent financial crisis, how did UK banks react?  Did they adjust their domestic and external lending to different degrees?  Did foreign-owned banks behave differently from UK-owned banks, and did it make a difference whether they were a branch or a subsidiary?  Did the other features of their balance sheet make a material difference to their lending behaviour?  Our research suggests that the answer to all of these questions is “yes”.

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Filed under Banking, Financial Stability, International Economics