Why Greeks Are Overworked While Germans Go Home Early

As we learned in class, Germans have a constitution that lay out economic goals, including full employment.  In a study posted by IEE, they discuss how the workers in South European countries put in more hours than in those in North European countries, such as Germany.  But the article goes on to discuss how while in Spain unemployment changed dramatically during the recession, in Germany it was the hours worked while unemployment remained low.

The study, while trying to indicate that South Europeans are harder workers, might instead indicate that these countries have something they could learn from German practices.  As German GDP per working hour, while the lower end of Northern countries, is still higher than the best measure in Southern countries.  So perhaps it is not working hard that can necessarily bring a country out of a slump, working smart might be the way to go.

Read the Article Here

Valuing the long-beaked echidna

http://www.economist.com/news/finance-and-economics/21596943-setting-price-nature-useful-exercise-up-point-valuing

This article examines how economists are adapting to environmental needs. No longer do economists follow Adam Smith's model that says nature is unlimited in its resources. The problem that economists now face is how to place numbers on resources such as the long-beaked echida, clean air, or fresh water. In order to change policy decisions, economists are attempting to allocate numerical values to parts of the natural environment the same way manufactured goods are given numerical values.

The article states that there are two types of value that nature provides - use value and non-use value. Use value parts of nature include water and bees, which both provide resources used by humans. Non-use parts of nature do not necessarily provide resources to humans, but humans still value them. An example of a non-use part of nature cited in the article is a lion. People value lions because they are "charismatic." The article notes that use value goods that produce a good or resources are often easier to place a numerical value. The article also notes that when  market values are affected by nature, a numerical value of nature can be derived. Third, surveying people about how much they value certain aspects of nature is a way to place numerical values on non-use aspects of nature. The article concludes by recognizing that economics will never be able to completely capture the value of nature.

Shots called, now what?

http://www.economist.com/blogs/easternapproaches/2014/02/ukraines-new-dawn

This articles discusses Ukraine's situation post revolution. People won the independence from corrupt dictatorial regime but whether they won a better life fully independent of Russia is still to be seen. The article discusses control of resources in the hands of a very small elite, consisting of oligarchs and politicians. Former President Yanukovych was one of the leading faces behind the extension of his political career to benefitting his personal business goals. But after the events of last week consisting of violent clashes between protesters and police the reality of the political situation in Ukraine has been revealed to the global community. That reality includes Kremlins influence in the domestic policymaking of Ukraine.

Article asks several important questions, such as what will happened to Russian bail-out package, which has been feeding president's regime? The other question posed is the oil prices and just a general partnership between Russia and Ukraine. It will take years before Ukraine will be strong enough independently to withstand Russia. Therefore, people of Ukraine have to elect the right leaders and become part of the process of rebuilding institutions that will help the country to develop economically. It s a very bright day in the life of the country and its people but the future is still very uncertain.

Abe's Reflationary Policies Aren't Cutting It

Widely hailed for his standout economic policies, Japanese prime minister Shinzō Abe has gone about weakening the yen in order to promote exports and reduce the widening trade deficit. Alas, while Abe's logic is sound, the numbers suggest that the trade deficit still stands at a solid ¥2.79 trillion ($23.7 billion), and export growth, while rising, is still far outstripped by import growth. This has rendered Japanese companies pessimistic about the future barring further stimuli, and the national bank seems likely to comply. So, what's to be done? At some point, the inflation will have to yield to common-sense concerns about any kind of currency devaluation. Much of the task ahead is psychological: Abe wants to convince firms that the economy is sufficiently stable, such that they can grow and export more. Bolstering tariffs seems like another common-sense endeavor. But the government also has to be reasonable with which industries it decides to burden with tariffs: in the wake of the Fukushima disaster, the country's had to bump up fuel imports to compensate for lost nuclear energy production. Perhaps if the Abeites can find a way to bring about economic stimulus without trashing the yen--through careful taxation strategies, among other things--a decent solution to the export crisis can be achieved.

Netflix to Pay Comcast for Smoother Streaming

Netflix has agreed to pay Comcast to ensure that their movies and television shows stream smoothly to Netflix customers. Lately congestion in the internet has been a negative factor causing interruptions for customers trying to stream Netflix movies and TV shows. This deal will make Comcast the dominant provider of broadband in the U.S, especially after their purchase of Time Warner Cable. It took a while for Netflix to cave in and pay someone else for this service, but it will more than likely ensure their rising dominance as well. It is said that they are going to compensate the middlemen internet providers who were providing this service for Netflix before. This deal is huge for Netflix after they said that if providers don't interconnect with its servers its business and operating results could be adversely affected because of increased cost. The financial impact of this deal is still unclear and only time will tell if the effect will be great.http://online.wsj.com/news/articles/SB10001424052702304834704579401071892041790?mod=WSJ_hp_LEFTWhatsNewsCollection

Can Scotland be independent of the Britain ?

A recent discussion in England is whether Scotland should separate itself for Britain. Currently although being part of England, Scottish don't have the right to vote for the government in London, thus the benefit of having a representative government is taken away from people. However, forming an independent state is not something simple. 

A survey carried out by Korn Ferry questioned 29 chairmen of 32 FTSE100 companies. The survey shows that two- thirds of FTSE 100 chairmen believe that Scottish independence would be bad for the British business. It also shows that 86 % believed it would be bad for business if the UK left the EU. 

On one hand, Chairman of Standard Life worries independence would threaten the loss of its UK tax exemption rights, which negatively affect its pension business, BP chief executive warned uncertainties for energy sector, chief executive of J Sainsbury warned higher food prices and chairman of Orion Group worries his recruitment business would have to move out of Scotland due to uncertainties. 

On the other hand, Royal bank of Scotland said it could adjust and continue doing business on both sides and TSB Bank said its issue was not related to the independence debate. 

Previous survey of 33 retail chairmen also showed concerns about higher costs for consumers due to higher costs in the supply chain and extra administration.

The new system (new government, new currency, new policies, new administration, etc.) probably will cost a lot more than the benefit of being independent. It may cause to the opposite effect of synergies, in which both UK and Scotland will be worsen off by more than just short term cost. Although the matter was brought up, I think this is rather impossible. However, it is possible that some political policies may change regarding the relationship between UK and Scotland

http://www.ft.com/cms/s/0/757b884c-9be6-11e3-afe3-00144feab7de.html#axzz2uBmeK16S

EU Approves Sanctions on Ukraine

There has been a lot of violence in Ukraine in the past week due to findings about some of its leadership, and sanctions had been made against them.  These sanctions include asset freezes, visa bans for those responsible, and a ban on exports while the ban on arms was dropped.  The EU officials said it was not likely that the Ukraine's top leaders would be hit with sanctions right now, but if the situation continues to worsen, more leaders will be sanctioned.




http://online.wsj.com/news/articles/SB10001424052702304914204579394461852462306

Losing Momentum in the "Fast-track" to Trade

This article discussed the importance of the United States’ participation in the global economy and Obama’s current policies as consistent with free trade and global partnership.  Since his first term, Obama has made more progress in developing trade deals with the EU.  The progress made with the administration thus far also brings a new face to what the United States is capable of bringing to the global market.  What complicates these improvements is the current Congressional disputes.  Unfortunately, the President cannot simply pass such policies without the “fast-track” system in Congress, due to amendments being added.  However, speculation is that after the return from the mid-term break, Congress will back the fast-track system and approve trade agreements.  Such deals on the table result in an approximate $600 billion increase in the world’s output, with nearly a third accruing to the US.  Potential benefits could result in a decrease to education and healthcare.  With much more delay, officials fear a loss in momentum and resulting progress being lost.  Opposition to the fast-track policy could dismantle agreements, and Obama’s delay in progress may actually increase the inequalities of the global trade system. 

http://www.economist.com/news/leaders/21596934-barack-obamas-unwillingness-fight-free-trade-expensive-mistake-how-make-world

European Union Imposes Sanctions Against Ukraine

In the past week, there has been terrible violence in Ukraine. The rebels began protesting against the government because many figures are deeply involved with serious criminal organizations. The government began to respond violently which resulted in many casualties for both parties. As an attempt to end the violence, the European Union voted on Thursday to impose sanctions against those who are responsible for the violence in Ukraine. The sanctions have been approved that include a travel ban to the countries that make up the 28-nation bloc and the freezing of assets held in European countries. The European Union has stated the sanctions will target "those responsible for human rights violations, violence and use of excessive force." Because many of the Ukrainian government officials that have been engaging in corrupt activities spurred the protests, the United States has already cancelled the visas of the individuals responsible. The main goal is to find a peaceful solution to the protests and sanctions could further include restricting Ukrainian imports on items such as firearms, ammunition, vehicles equipped with water cannons, and anti-riot protection gear for government officials. It is encouraging to see the European Union get involved hopefully can bring a peaceful solution to the violence.

http://abclocal.go.com/kgo/story?section=news/national_world&id=9438879

Economics of Food Subsidies

In the past food subsidies have been the go-to method of ensuring that citizens in developing countries in developing countries. However, it is difficult for many of these governments in developing countries to maintain these subsidies, and the money can often go to the wrong people. Studies have shown that food vouchers may be a more viable option for these developing countries. Researchers at the International Food Policy Research Institute composed a new paper that analyzed the results of an experience that World Food Programme had conducted in Ecuador. The study found handouts to be the least effective. They were three times as expensive as voucher in boosting calorie intake by 15%, and four times more costly in enriching the quality of diet. The vouchers encouraged Ecuadorians to buy healthier foods because of the restrictions on the vouchers.

http://www.economist.com/news/finance-and-economics/21596987-why-food-vouchers-are-policy-worth-considering-developing-countries-feeding

Global Banking

http://www.economist.com/news/finance-and-economics/21596960-avoid-another-crisis-fed-further-fragments-global-finance-inglorious

This article talks about a new rule that the Fed has implemented towards foreign banks. They now must meet the same standards for capital and liquidity as American banks. The Fed sees this as a necessity for the global banking system. Foreign-owned banks previous leaned on their "parents" for support but now this rule will change how they must operate.