2015 World Growth Statistics- The (not so) Great Recession leaves a scar

2015 World Growth Statistics- The (not so) Great Recession leaves a scar

Orange County Divorce LawyerTHE global financial crisis was a scarring experience for rich economies. A sharp short-term decline in GDP has given way to steady erosion in growth relative to pre-crisis hopes. Yet as a chapter in the International Monetary Fund’s new World Economic Outlook explains, the emerging world is also entering an age of diminished expectations. The IMF reckons that potential output in advanced economies was already on the decline in the years before the crisis, thanks to weak productivity growth (as the IT-driven boom of the 1990s petered out) and ageing workers. Potential growth is an estimate of an economic speed limit—how rapidly an economy can grow before inflationary overheating sets in—determined by growth in the labour force, the capital stock and productivity. The crisis squeezed investment, amplifying underlying weakness. Potential growth, which averaged 2.2% from 2001-07 dipped to 2.0% on the eve of the crisis and to 1.5% in 2013-14 according to the Economist.

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People are happier when they are young and rich

Happiness Chart

ONE frequent stumbling block for the European project is the fact that different countries want different things. Recent Eurostat polling on self-reported happiness highlights those divergences. As usual, Scandinavians are the happiest people in Europe and retired Danish women are the cheeriest among them, reporting a happiness score of 8.5 out of 10. In general, geography is the best predictor of merriness, followed by pay. At all income levels a step up one quintile on the income scale makes people more content. Yet the poorest 20% of Danes are more joyful than the richest Greeks.  According to The Economist.

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World Social and Economic Trends 2015

World Trends 2015A new report from the World Economic Forum ranks the 10 most important global trends, based on a poll of 1,592 leaders from academia, business, government, and non-profits.

Here are some data points that compare and contrast the public’s views around the world with the trends identified by the experts.

1. Rising societal tensions in the Middle East and North Africa – People in this region were mostly dissatisfied with their country direction, according to the Pew Research Center’s survey of people across the globe this year. This includes particular disappointment in Lebanon (88% dissatisfied), the Palestinian territories (87%) and Tunisia (81%).

2.  Widening income disparities  – One of the most striking findings from our recent survey of general publics across the globe was the degree to which people see the gap between rich and poor as a major challenge. In 31 of 39 nations, half or more of those polled said inequality is avery big problem in their country.

3. Persistent structural unemployment – The spring survey found that two-thirds or more in most countries say a lack of employment opportunities is a very big problem. When asked which of the four issues – inflation, unemployment, inequality or debt – the government should address first, 22 of the 39 publics surveyed said jobs.

4. Intensifying cyber threats – U.S. policy experts were very concerned about the threat of cyber-attacks from China, according to our survey last year. However, while the World Economic Forum survey identified cyber threats as a top concern, 47% of experts admitted they have limited knowledge of the problem.

5. Inaction on climate change – A median of 54% or more of people surveyed in Canada, Europe, the Asia Pacific, Latin America and Africa saw global warming as a major threat to their countries, according to our global survey. However, only 40% of Americans and a median of 42% in the Middle East region regarded global climate change as a major concern.

6. Diminishing confidence in economic policies – In our polls conducted across the globe, people voiced widespread concerns about economic conditions in their countries. Indeed, attitudes were particularly grim in European countries, such as France (only 9% said good), 4% said the same in Spain, 3% in Italy and just 1% in Greece. Nevertheless, in emerging markets such as China, 88% of the people said their economy was doing well.

7.  A lack of values in leadership – Between 2007 and 2012, confidence in Organization for Economic Co-operation and Development (OECD) national governments declined from 45% to 40% on average, making it difficult for national authorities to mobilize support for necessary reforms, according to a recent report by the OECD. In the U.S., public trust in government has fallen substantially since 1958 and is near an all-time low.

8.   The expanding middle class in Asia – More than any other region, Asians are hopeful about the economic prospects for the next generation. In contrast to Asia’s relatively positive outlook, majorities in the United States, Canada, and throughout Western Europe believe the economic future will be worse for the next generation.

9.  The growing importance of megacities – Life is increasingly lived in the world’s urban centers. According to the United Nations Population Division, more than half of the world’s population lives in urban areas. However, not all of the world’s regions are equally urban. Africa, for example, is predicted to reach 50 percent urbanization by 2035.

10. The rapid spread of misinformation online – One-third (30%) of the world’s youth have been active online for at least five years, according to the International Telecommunication Union. Social networking has also spread around the world. In 19 of 21 countries, about three-in-ten or more of those polled use sites such as Facebook, according to our survey last year.

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Who controls the world’s wealth?

Child Support Laws

GLOBAL wealth has increased from $117 trillion in 2000 to $262 trillion this year. That comes to $56,000 for each adult on earth. But the fortune is far from evenly distributed. In 1906 the Italian economist Vilfredo Pareto observed that 80% of land was owned by just 20% of the Italian population. Today 94.5% of the world’s household wealth is held by 20% of the adult population, according to new data from Credit Suisse.

Wealth is so unevenly distributed, that you need just $3,650 (less debts) to count yourself among the richest half of the world’s population. A mere $77,000 brings you among the wealthiest 10%. And just $798,000 puts you into the ranks of the 1%—within the reach of many white-collar urban professionals in the West. Hence, more than 35m people carry such a plump purse. Among the three billion adults at the bottom with less than $10,000 in wealth, 90% reside in developing countries. Yet 15% of millionaires live in developing countries too.

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The World Economic Outlook for 2015 is Not Pretty

2015 World Economic OutlookBack in January the IMF thought the world might manage growth of 3.7% this year. That dropped to 3.6% in April, to 3.4% in July, and to 3.3% in the new report. If growth is written down any more then this year’s performance will come in below that in 2013, of 3.3%, making 2014 the fourth consecutive year in which global output has slowed relative to the prior year’s showing. The steady deterioration in the global economy’s performance is remarkable for several reasons, including just how long it has taken the world to catch on to the trend.

The news could get worse in future, the IMF reckons. Its current projections assume sensibly accommodative fiscal and monetary policy, as well as a decline in geopolitical tensions. That is disconcerting. The growth slowdown since 2010 is already one of the most dramatic of the last 40 years, comparable to the swoons that accompanied the Latin American crises of the late 1980s and the Asian crisis of the late 1990s (though not as large as the drop in 2008-9). Officials in Washington, gathered for the autumn meetings of the World Bank and IMF, will be hoping the outlook shocks governments into decisive action to support global growth. Unfortunately, policy makers seem to be growing inured to bad economic news.

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Unemployment Drops as Labor Force Participation Drops- Unusual

Irvine Child Support LawyerAMERICA has experienced a puzzling decline in the share of people either working or looking for work. Historically the “labour-force participation rate” fell during recessions as some of the unemployed gave up looking for work, and rose amid recoveries as discouraged workers returned, according to an interesting article in the The Economist

Since the height of the Great Recession in 2009, America’s unemployment rate has fallen from 10% to 6.1%.
During this period, the labour-force participation rate—the share of the population 16 and over that is either working or looking for work—has fallen to 62.8 percent, a 36-year low.
This combination is unusual. In past recoveries, declining unemployment has led to rising, not falling, labour force participation.

Not this time. The recovery is now five years old, yet the participation rate continues to drop, currently 62.8% from 66% in 2007. Cyclical factors may be at play: the slow recovery has driven an inordinate number of people out of the work force (or into part-time work); they may return as the economy improves. Yet the aging population means a growing portion of people have retired, and are not coming back.

The relative contribution of these two factors is crucial to the Federal Reserve. If cyclical factors are significant, then the unemployment rate understates slack in the labour market and the Fed can take its time about raising interest rates. If structural factors predominate, then the unemployment rate, at 6.1%, is a fair reading of slack and the Fed may need to move soon.

On September 17th Janet Yellen, the Fed chairman, suggested that she held the former view. “There is,” she said, “a meaningful cyclical shortfall.” But that may not last if both unemployment and participation continue to slip.

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