Russia santioned from all sides
Yesterday, the EU introduced new sanctions targeted at specific sectors of the Russian economy. This came one day after an international arbitration court in The Hague had decided for an unprecedented ruling related to Yukos, an oil company with a very controversial fate. On Monday a Tribunal of the Permanent Court of Arbitration in The Hague ruled unanimously that Russia shall pay 50 billion USD to shareholders of Yukos, which back in 2003 used to be Russia’s biggest oil company. It “used” to be, because Yukos actually does not exist anymore.
Read more: http://www.bruegel.org/nc/blog/detail/article/1408-fact-of-the-week-russia-sanctioned-from-all-sides/?utm_source=Bruegel+Update&utm_campaign=55f8c62f16-Bruegel+Update_Week_31_2014&utm_medium=email&utm_term=0_cb17b0383e-55f8c62f16-275191758
Is the BRICS rise over?
The BRICS name is certainly here to stay, and in terms of global governance, their influence is likely to rise as a group because of the agreement to set up a joint development bank
On one level, this seems like a rather odd time to be asking such a question, especially when the BRICS political leaders have just agreed to set up a joint development bank to be headquartered in Shanghai. So the BRICS name is certainly here to stay, and in terms of global governance, their influence is likely to rise as a group because of this development. Previously, the BRICS political leaders meetings had failed to agree anything specific and even once the creation of such a bank was first mooted, for the past two years, they appeared to have difficulties in agreeing where it might be located and how it should be capitalised. At this Fontaleza meeting in Brazil, they have confounded sceptics by agreeing not only both these key things, but also to have the first head of the Bank to be an Indian.
Read more: http://www.bruegel.org/nc/blog/detail/article/1404-is-the-brics-rise-over/?utm_source=Bruegel+Update&utm_campaign=55f8c62f16-Bruegel+Update_Week_31_2014&utm_medium=email&utm_term=0_cb17b0383e-55f8c62f16-275191758
The Big Mac (index) and euro area adjustment
Pia Hüttl on 28th July 2014
Following up on previous comments on the Big Mac index and euro area adjustment, the latest data-update suggests a slow-down in the price adjustment between euro area countries taking place since the beginning of the crisis. Source: The Economist. Note: the price for Portugal in July 2012 are considered an outlier, interpolation has been used to correct for this. The chart above shows that there was nearly no change in big mac prices over the last year (blue bar, July 2013 to July 2014), except for Greece.
While one could still observe major downward price adjustments of big mac burgers in Greece and Ireland in the period from 2011 to 2012, and to a lesser extent from 2012 to 2013, the price adjustment has stopped in Ireland and even reversed in Greece over 2013-2014.
A similar picture emerges when looking at inflation developments (see below). Inflation in the euro area has been falling since late 2011, and has been below one percent since October 2013. Core-inflation, a measure that excludes volatile energy and unprocessed food price developments, has followed suit.
Read more: http://www.bruegel.org/nc/blog/detail/article/1406-chart-of-the-week-the-big-mac-index-and-euro-area-adjustment/?utm_source=Bruegel+Update&utm_campaign=55f8c62f16-Bruegel+Update_Week_31_2014&utm_medium=email&utm_term=0_cb17b0383e-55f8c62f16-275191758
Policy challenges for the next 50 years
Growth will slow and economic activity will shift, with skills being crucial and wage inequality rising
Global growth will slow from 3.6% in 2010 - 2020 to 2.4% in 2050 - 2060 -- due to ageing and gradual deceleration in emerging economies -- and will be increasingly driven by innovation and investment in skills.
The global economic balance will continue to shift towards the current non-OECD area, which will have an economic structure and exports increasingly similar to those of the OECD. Global integration is likely to continue, but at a slower pace. Still, increases in trade intensity will be significant, and by 2060 euro area exports to Asia and emerging economies may be equivalent to 15% of GDP and similar in size to trade within the euro zone
Read more: http://www.oecd.org/eco/lookingto2060.htm