demographics

Japan’s deflation problem is overdetermined – there are multiple causes at work, any one of which could account for the observed phenomenon. Those who have been following the debate can simply choose their favourite – balance sheet…

There are two potential issues with the current re-leveraging cycle. First, the increase in the latest report, outside of real estate related mortgages as shown in the chart below, was primarily driven by increases in student and auto loan…

Falling activity rates are often blamed on the long-term unemployed giving up the quest for work. And indeed the US does have a long-term unemployment problem at the moment. Research by Alicia Munnell, director of the Center for Retirement…

The danger of Japan's current policy (Abenomics) is that the outcome could turn out to be the exact opposite of what was originally intended. With wages stagnant, these import-driven price increases are hitting the Japanese consumer quite…

There is no question that labor force participation in the US has been falling as more people drop out of the workforce. But that measure could be misleading because as the population ages, the workforce will shrink naturally. Perhaps a…

While the US housing market remains relatively robust, it is likely to face a couple of headwinds going forward. One is the lower affordability index. The other is the recent slowdown in net household formation.

Martin Wolf has written a column in the FT with which I agree, claiming that Germany is a weight on the world. The essence of his argument is that Germany’s export-led growth model is a ‘beggar-thy-neighbor’ policy in a world short of…

When the working age population grows faster than the broad population, demographics become a tailwind as far as economic growth is concerned. Hence, what is likely to become a significant headwind for advanced economies in terms of…

The argument that China is forcefully urbanizing, and that this urbanization will guarantee growth rates above 7-8% for many more years, is almost sheer nonsense. Urbanization is a cost, and if China borrows to fund this cost, its debt will…

By Sober Look Rumors have been circulating for some time in the media that China is considering scrapping the one-child policy that was launched back in 1979. But the nation's official paper suggested last week that although plans to…