Global Economy, Competitiveness, Government Policy, Economic Environment, Recession
Brazil’s economy and manufacturing are in a technical recession, inflation is higher than desirable, and public finances are deteriorating. The country’s short-term outlook appears depressing, as the ongoing macroeconomic imbalances will have to be addressed by orthodox policies, which will in turn bring muted growth and rising unemployment.
Global Economy, Competitiveness, Foreign Trade, Imports & Exports, Economic Environment, Energy
The price of oil has decreased by 39% since June. OPEC’s decision to maintain production at its current level resulted in a sharp drop at the end of November. The main reasons for the decline are increased U.S. oil production and slowing growth in world oil consumption. Barring an outbreak of turmoil in the Middle East, the price of oil is likely to remain low.
Vehicle miles traveled per capita is on the decline, in part because of employment, demographic, and lifestyle changes. MAPI forecasts automobile production of 16.8 million units in 2015 and 17.1 million units in 2016.
Global Economy, Economic Environment, Recession, Money & Finance, Government Finance
Facing insolvency, the Argentine government defaulted on its roughly $130 billion of foreign debt in late 2001 following a four-year economic recession. Once the economy recovered, Argentina offered holders of defaulted bonds new debt instruments via sovereign restructurings in 2005 and 2010. In order to reach elevated acceptance levels, the new bonds were governed mostly under foreign law (some in Europe and some in New York) and included a “rights upon future offers” clause—giving bondholders the possibility to participate in any eventual voluntary restructuring offering better terms. As a result, 93% of the holders of defaulted debt accepted the restructurings. The remaining 7% (the “holdouts”) have been seeking payment in full via legal venues, with some turning to the U.S. courts.
Finance, Tax, U.S. Tax, Federal Tax Rules & Regulations, U.S. Tax Policy, Global Economy, Competitiveness, Government Policy, Money & Finance, Government Finance
Patriotism has little to do with an inversion, a process whereby a company moves its headquarters to another country, but in a midterm election year, it is easier for politicians to cast corporations as deserters than address root causes -- namely, the convoluted tax code.
The success of our free enterprise system over the past century—buoyed by the tremendous capacities of the industrial sector—has helped create a far wealthier and healthier society. In the span of one century in America, per capita income grew 358%, from $9,375 (in today’s dollars) to $43,000. More affluence means better healthcare and nutrition: the average life expectancy at birth grew 44%, from 55 to 79.
Europe hits the news headlines with increasing frequency these days. In addition to the faltering economy, domestic politics supply ample doses of uncertainty, testy intra-EU relations, and mounting social tensions. For businesses exposed to the European political and economic cycles, five potential risks stand out for 2014: deflation, a gas war, a third recession, a breakdown in trade negotiations, and political gridlock.
The international financial system faces a “dollar twilight dilemma” that will result in a transition from the dollarized financial system of the past seven decades to some form of multi–key currency relationship, which will include a s
Global Economy, Economic Environment, Recession, Money & Finance, GDP, Growth & Innovation, Research & Development
Nearly five years past the trough of the Great Recession, the U.S. economy still finds itself in a post-crisis era. Economic growth has been persistently sluggish, averaging 2.3% between 2010 and 2013. Labor productivity data and labor force participation data raise concerns about a weakening of potential U.S. economic growth.
Much is needed for improved potential and performance. Human capital and business dynamism challenges must be addressed. But the economy also clearly needs a stronger dose of both innovation investment and capital investment.
Global Economy, Economic Environment, Labor, Recession
The aging baby boom generation will keep the participation rate falling for at least another decade, and some individuals’ decisions to work longer will not be enough to offset the tendency to retire. In a couple of years, firms should see widespread, tight labor markets, making young talent particularly difficult to find.