OPEC Scrambles to React to Falling Oil Demand From China

https://www.nytimes.com/2020/02/03/business/energy-environment/china-oil-opec.html

With the outbreak of Coronavirus, Chinese oil demand has fallen to 20% or 3 million barrels per day. This has hit oil markets really hard and fast. We are seeing the impact as Brent crude reduced its price to $56 per barrel, a fifteen percent drop in one month. This market event has concerned the officials of Organisation of the Petroleum Exporting Countries and Russia. Henceforth they will be meeting in Vienna, headquarters of OPEC on Tuesday and Wednesday. The officials want to cut back on oil production to stabilize the oil prices, especially, Saudi Arabia whose main oil exporting country is China. By reducing the crude production, these countries will see a reduction in their revenues. Although, it is too early to predict, but still, what do you think would be a likely economic outcome by implementing this economic policy?

Not Enough Homes for Sale

Currently, low unemployment and mortgage rates are to the advantage of the homebuyers. The amount of homes purchased in 2019 skyrocketed in comparison to the past three years. As a result, there is excess demand for houses and not enough supply. In fact, the inventory of existing homes are at the lowest point since 1982. Therefore, many individuals who want to take advantage of the favorable housing market have decided to build their homes from the ground up, which has hit a 13-year high.

Certain economists argue that there are positive external benefits for building homes for scratch, particularly in low-income communities where gentrification is on a rise. Three economists have determined that building one large new apartment complex in a low-income community actually reduces rent costs within 800 feet of that property. While this result is not consistent with the theory behind gentrification, the justification for this result is that the newer buildings attract relocating workers, which prevents current landlords from pricing out existing residences.

There are two very important questions that can be gathered from this. One, does an individual's right to own property justify building new homes even in areas where building more residential homes can be problematic for the local environment? Does the problem of gentrification interfere with individuals property rights (as discussed in class)? A link to the relevant article is below: \

https://blogs.wsj.com/economics/2020/01/23/newsletter-the-number-of-homes-for-sale-is-at-a-record-low/

Brexit is happening : What happens next

 In the hours before the United Kingdom’s formal departure from the European Union, hundreds of politically-minded Britons flocked to the streets and public spaces of London’s Westminster district, the centuries-old home of the country’s legislature.

It has been an often contentious and occasionally fraught three-and-a-half years since a slim majority of voters opted for a future outside the world’s largest political bloc. And on a night when that nation-altering 2016 referendum vote would become a reality, there were far more supporters of Brexit out in public than there were opponents.It has been almost half a century since the United Kingdom signed up to join other major European nations in a precursor to the EU, and the decision to begin unpicking the political, legal and constitutional threads that have bound this island nation to the European continent for so many years has proved painful for many on both sides of the English Channel. 

Boris Johnson, the prime minister who effectively surfed to power on a wave of populist resentment about British membership of the EU, broadcast a message late Friday calling the formal act of separation “an astonishing moment of hope.”He acknowledged that there would be those who felt “a sense of anxiety and loss,” but insisted that Britain’s exit from Europe was “not an end but a beginning.”

In one sense this precise moment of parting occurs only on paper, since the U.K. will continue to abide by the EU’s rules and regulations for the next 11 months during an implementation period agreed with the EU to give businesses and citizens time to adjust to as-yet uncertain new circumstances. 

What could this mean for businesses in the UK and EU and what could this mean for United Kingdom's trading activities? 

https://www.cnbc.com/2020/01/31/brexit-is-happening-what-happens-next.html

U.S. Growth at Slowest Since 2016

https://www.nytimes.com/2020/01/30/business/economy/gdp-numbers.html

While GDP continues to grow at a steady rate, that rate is frustratingly slow for many. Hovering around 2%, growth through 2019 was weaker than it was through 2017 and 2018. Even though GDP growth remains steady, it seems to be masking some weak spots in the economy. Both consumer spending and business investment slowed, while much of the growth was attributed to a temporary decline in imports. This could, in part, be due to an aging population. This is despite the White House's promises of a growth rate of 3-4%. Though there have been some instances of a growth rate of over 3% through the past couple of years due to various stimulus packages, those rates have quickly died off back down to ~2%. Of course, this raises the question of how voters will view this growth during the upcoming presidential election. Some will view the steady growth as a sign of a healthy economy, while others will say that it hasn't lived up to promise or expectation.

Many other factors could be at play, chiefly among them Boeing's struggles and the ongoing trade war with China. While President Trump's promises of a smaller trade deficit have come to fruition, many economist warn that it can fall for many reasons, not all of them being good ones. Due to a slowing American economy and shrinking demand of foreign goods due to tariffs, imports have fallen. This does not necessarily mean U.S. production has increased, only that imports have decreased relative to exports. Many businesses are hesitant to invest because they are unsure of what the future holds. This could exacerbate the sluggish economy down the road.

UK Rates Held as Brexit Clarity Shores Up Economic Surveys

The Bank of England decided to maintain interest rates amid signs of potential improvement in the British Economy because of Brexit. Although the Bank indicated it might be in a position to reduce interest rates they choose to not do so. The bank said in a statement that its Monetary Policy Committee voted 7-2 to keep the key U.K. interest rate unchanged at 0.75%. This was surprising because people expected interest rates to go down. Due to Prime Minister Boris Johnson's win during the general elections seems to have smoothed over uncertainties that prevailed prior. Johnson's majority in Parliament allowed for the success of the Brexit withdrawal bill, which has caused significant improvement in some survey data. According to the New York Times, the decision to maintain interest rates helped support the pound, which was trading 0.6% higher at $1.3093. However, it is still early to be able to determine the impact that Brexit will continue to have on the economy. In part it is due to the lack of clarity concerning the economic relationship between the EU and Britain.

I think that we can expect in the future are many negotiations during the 11 month transition period. Since Britain has a time frame to be able to deliver on a new trade agreement with the EU they will hopefully be more flexible. I believe that the results of these negotiations will influence further surveys and public opinion. Having to adapt to new immigration rules as well as big infrastructure change will only add to the pressure Britain will have to endure.
https://www.nytimes.com/aponline/2020/01/30/business/bc-eu-britain-economy.html

Trump says the Fed should cut rates so the US could pay down its $23 trillion debt

President Donald Trump proposed to the Federal Reserve to lower interest rates with the goal of lowering the $23 trillion debt the US has incurred. He believes that the US' lending rates aren't competitive with other global markets. He believes we're two years late to begin this policy since inflation hasn't risen during that time. The current benchmark that the Fed sets is between 1.5-1.75%. He still complains about high rates even though they've lowered them 3 times this last year. During Trump's administration the national debt has risen to $23 trillion, a 16.4% increase. This is an example of an economic policy from class. Do you agree with Trump's proposal to lower interest rates more than they are now?

https://www.cnbc.com/2020/01/28/trump-says-the-fed-should-cut-rates-so-the-us-could-then-focus-on-paying-off-refinancing-debt.html

Coronavirus Impact on Wall Street

An article published by Jeffry Bartash of Market Watch on the first of February, 2020, suggests the damages that will be inflicted on Wall Street by the spread of the Coronavirus in China and other parts of the world. Bartash starts by explaining that the fear factor of the virus alone has already had a negative impact on the stock market. The Dow Jones Industrial Average, or DJIA, decreased 600 points on Friday. The impacts on the U.S. that are already present include flight suspensions and the temporary shutdown of U.S. companies in China. However, these impacts are likely to grow because of the status that China has in the world. China is home to the second largest economy and one fifth of global GDP, along with being the largest center of manufacturing in the world. It is also one of the largest trading partners of the U.S. and a decrease of good and services leaving China would greatly harm U.S. economy. Bartash also predicts a .5% decrease in U.S. GDP during 2020.

I agree with Bartash's argument that the U.S.'s economy will suffer throughout the coming year. Not only will the Coronavirus's impact on China harm the U.S., but the countries in which the virus is spreading will also have an impact. Tourism to China and neighboring countries from the U.S. will decrease, along with tourism to the U.S. from China. This will decrease revenue for both countries. The World Health Agency has declared the virus an international emergency, but it will also have a strong impact on economies.

https://www.marketwatch.com/story/coronavirus-spreads-damage-to-wall-street-could-the-us-economy-be-next-2020-02-01

Wilbur Ross Says Coronavirus Could Bring Jobs Back to the U.S.

The recent trade war has been used to help bring jobs back to the US. Wilbur Ross says that the Coronavirus could assist in these efforts. While the Coronavirus is a horrible epidemic mainly occurring in China, it will make companies reconsider where they want to locate their operations. He also cited that in the past, the SARS outbreak and the African Swine Fever, which both occurred in China, help prove the risk associated with operating in China. These are all risks that companies will have to take on if they want to operate in China. While jobs are already returning to the US, Wilbur Ross believes that the Coronavirus will help accelerate this change.

I believe that Wilbur Ross makes a good point to mention the amount of risk involved with operating in China. Having this risk, in addition to the tariffs implemented by the Trump administration, will cause more companies to move there operations back to the US, and new companies will be more willing to keep there operations in the US. Do you think the Coronavirus could have a positive impact on the US economy in the future due to the points Wilbur Ross has made?


https://www.nytimes.com/2020/01/30/business/economy/wilbur-ross-coronavirus-jobs.html

European Economic Growth Slows Almost to Zero

Recent economic figures, from the European Union, have shown that the European economy is stagnating and in danger of falling into a recession. Specifically, these figures show “the 28 countries in the European Union growing by only 0.1 percent during the last three months of 2019.” The article notes that several economic and political factors have played an important role in this economic stagnation. Some of these factors include Brexit, widespread transportation strikes in France, and declining world trade. Also, the author notes that the threat of the coronavirus is another unknown and may have negative effects on the European economy as a whole.

https://www.nytimes.com/2020/01/31/business/economy/european-union-eurozone-economy.html

Is the UK Leaving a Defeat for the EU

With Britain's recent departure from the European Union it comes into question how the two parties will be affected. In the article titled A Texas-Size Defeat for the EU: Brexit is Here, the author compares the separation to Texas leaving the United States. While the article mainly focuses on the European Unions side of things it's noted that both parties are in for troubles. The European Union hopes that it can maintain a close relationship with Britain but a lot of internal factors need to be handled as well. 

Economically, Britain was the leading economy for the European Union, with their departure there is fear that the other strong nations such as Germany and France will be unable to keep the regional unit afloat without the help of the United Kingdom. It also comes into question how trade will be handled between the two now given that the European Union has made up around 50% of the United Kingdoms imports and exports during their time in the EU. Finally politics come into play, the United Kingdom held a large amount of pull when it came to decisions in the European Union and without them there is a  noted fear that tensions between other member countries may rise due to the United Kingdom no longer playing an intermediary. The one thing that is positive for the European Union is that there is little to no fear that other member countries are going to be leaving the EU any time soon. The United Kingdoms separation from the EU was nothing less of an internal struggle for Britain and this has led other member countries to see it as much more of a hassle then a way out at the time being. Only time will tell the fate of these two but until they both find an equilibrium internally, their relationships with each other may be strained. 
https://www.nytimes.com/2020/01/29/world/europe/brexit-brussels-eu.html?searchResultPosition=1

Trump Just Signed the U.S.M.C.A. Here’s What’s in the New NAFTA.

President Trump has finally signed the new trade agreement between the United State's foreign neighbors, Mexico and Canada. The United States-Mexico-Canada Agreement, or the USMCA, was set in place to overturn the North American Fair Trade Agree, or NAFTA. The USMCA is more so revision of this 25 year old year old foreign trade agreement. The Trump administration classifies this agree as a hug win for themselves. Some of the biggest changes of the agreement impact the dairy and automobile industries. Under the USMCA, Canada has increased trade further with the American dairy industry by opening up trade in products such as milk and cheese. Regarding the automobile industry, companies manufacturing cars now much have at least 75% of the parts in the automobile sourced from either Canada, the US, or Mexico to qualify for zero tariffs. This number was only around 62% under NAFTA. The USMCA is set to be reviewed every 6 years, and if one of the three countries decides to pull away from the agreement, the USMCA will be repealed after 16 years. Do you think the USMCA is an improvement from NAFTA? Will the USMCA have more success the its predecessor trade agreement?


https://www.nytimes.com/2020/01/29/business/economy/usmca-deal.html

Trade War With China

The ongoing trade war with China has not been easy to fix. It is as well, difficult to be able to tell what president Trump plans to do, and what he will do. According to the article, Mr. Trump said his plan was to take all American companies out of China, but looking from an economic perspective, this would not be the best idea. One of our biggest trade partners is China, and with the planned rising tariffs, the domestic prices of goods will increase significantly. On top of that, China is beginning to trade more with other countries in order to replace what we are costing them. This will have a negative downturn on the U.S. economy in the long run. As proven in economics before, trade allows us to reach a potential of efficiency and production much higher than we would on our own without trade. Trump shortly after his statement took it back by saying he only wishes he imposed even higher tariffs sooner. The article states "..American leverage in the trade war is weakened by the president's failure to work with allies in a concerted approach to change China's course." Going off of this, they are right by saying this has had a negative impact because this trade dispute has impacted U.S. allies like Germany.

It appears that president Trump keeps changing his mind and/or perspective on his decisions and his thinking. This has been shown through numerous Twitter posts he has had about what he may or may not do in order to end or win this trade war. With the confusion back-and-forth, it is difficult to tell what will happen in the future regarding this trade war with China. It will be interesting to see how this will also affect prices and other allies of the U.S. as well as China. What do you think the best step forward would be?

https://www.nytimes.com/2019/08/25/world/europe/trump-offers-contradictory-signals-on-china-trade-war.html

Policymakers fret over risk to global growth from China virus outbreak

Many policymakers have spoken out about how China's virus outbreak could effect the global economy. Jerome Powell, the U.S. Fed Reserve Chair, held a conference on Wednesday, highlighting keys facts about he virus. He explained that if China's economy slows down, it will affect the U.S. economy as well as many other countries that are in connections with China.

Even though many policymakers have spoken out about the outbreak, The International Monetary Fund is being more cautious about the matter, and has explained that it is too early to tell the effects it will have on the economy. 

I think that the slow down of the U.S. economy, along with the global economy, will all depend on how quickly the outbreak is contained.

People are also comparing this outbreak to the 2002-2003 SARS (Severe Acute Respiratory Syndrome) which ended up leading to around 800 deaths. 

Many people are saying that the global economy will be hit harder this time around seeing as China accounts for a larger share of the world economy? Would you agree with this statement? Why or why not?

https://www.reuters.com/article/us-china-health-global-economy/coronavirus-outbreak-poses-risk-to-u-s-feds-economic-outlook-idUSKBN1ZS38E

Despite a Truce, US-EU Trade Relations are Still Tense

Recently, there was a tense meeting at the World Economic forum in Davos, Switzerland, and at center stage was a potential dispute between France and the United States. The US (specifically President Trump) expressed their displeasure over France's recent tax on digital services, affecting mainly US companies like Amazon, Facebook, and Google. The United States planned a response with $2.4 billion in potential taxes on French champagne and other luxuries.

This was all resolved on January 19th, with a truce of sorts between the two countries cancelling any taxes or tariffs between each other. But this did not stop any further issues. The US pressured the British government that any similar digital tax that was proposed similar to the French would not go unpunished. Britain then announced they would negotiate trade talks with the European Union before the States. With deals to formalize with China, and then Canada and Mexico, it is interesting to wonder how free these trade deals are with the leverage the American government has been attempting to use for their own benefit.

 https://www.economist.com/finance-and-economics/2020/01/25/despite-a-truce-us-eu-trade-relations-are-still-tense

U.S. 2019 GDP was Slowest Growth in 3 Years

Reporter, Jeff Cox, analyzed the percentages of growth of the the past three years and the main contributors that have caused these fluctuations between them. In 2019,the U.S. fourth quarter GDP only rose 2.1%. Overall, 2019 had only 2.3% of growth which is the slowest it has been since 2016. It has been reported that this is directly due to lack of business investments and is a consequence of the major trade war with China. Due to the trade war, imports fell 8.7%. Not only has the trade war impacted imports but it has severely impacted private domestic investment. Investments fell 6.1% this past quarter which is a huge difference from the 1% it dropped the previous quarter. To think things couldn't get any worse, the national debt is now past $23 trillion. Trump has been pushing for Jerome Powell to cut interest rates in order to help pacify the debt but can that really help in the long run? 

https://www.cnbc.com/2020/01/30/us-gdp-q4-2019-first-reading.html

Stocks Fall As Global Fears Of Coronavirus

Officials have confirmed nearly 2,890 cases of the deadly virus around the world, including five in the U.S Stocks fell Monday as concerns surrounding spread of the deadly coronavirus triggered fear around the globe. The Dow Jones Industrial Average fell 384 points, 1.32%. Monday and the S&P 500 dropped 43 points or 1.3%. The Nasdaq composite also slid, falling 145 points, or 1.56%, as deaths from the coronavirus climbed to at least 80. 

Health officials have confirmed nearly 2,890 cases of the virus around the world, including five in the U.S. across four states. At its lowest level since October, the yield on the 10-year U.S. Treasury fell as much as 1.61% on Monday.As fears rise, tourism is taking a hit and airline stocks United and Delta tumbled nearly 4%, while American slid 5.3%. Travel stocks Expedia and Marriott International dropped 2.3% and 1.6% respectively.Consumer stocks with exposure in China, including Apple and Nike dipped 2.35% and 1.5%, respectively.

As the virus throws global stocks into a state of fluctuation, Will this have a further shock in the stock market due to the scale of the problem? 

https://www.usnews.com/news/economy/articles/2020-01-27/stocks-fall-as-global-fears-of-coronavirus-rise 

China’s Slowing Growth Underlines Stress Facing Its Economy in 2020 

According to the article posted by the Wall Street Journal on January 17, 2020, 

the authors James T. Areddy and Chao Deng try to prove China’s economy has lost 

business confidence because China’s GDP growth decreased from 6.6% in 2018 to 6. 

1% in 2019. Additionally, some private-sector economists warn that China’s economy 

could slip even further this year to GDP growth below 6%. It is the lowest level in nearly 

three decades. Even China’s government policy for this year includes finalizing a 

decade-long push to double income levels and the size of the economy from 2010, 

while lifting living standards for a remaining five million people still considered severely 

impoverished. 

The two authors try to analyze and predict the whole of China’s economy based 

on the situation of the Shenzhen market. Shenzhen’s electronics makers were hurt by 

tariffs on their goods in the US, but also by the more cautious business appetite in other 

countries. Because of the trade war between the US and China, many investors and 

companies are more careful to make investments in China. There are a number of non- 

trade factors, too, including mass protests that roiled next-door Hong Kong for more 

than half a year, which drew attention to the risk of social unrest. Shenzhen’s celebrated 

technology companies like telecommunications-equipment maker Huawei Technology 

Co. and drone maker SZ DJI Technology Co. are facing new security from the US and 

other countries. 

In order to keep the headline growth figures up, China’s government has 

invested more in construction, which carries the risk of undoing the effort to limit debt. 

In Shenzhen, policymakers are pushing construction of a new district called Qianhai, 

pitching it as an experimental financial hub in the shadow of China’s increasingly 

unreliable financial hub, Hong Kong. At the same time, Shenzhen’s exports and 

consumption weakened, dragging down the city’s growth from a pace of 6.6% by the 

third quarter compared with 7.4% in the first half of 2019. The authors cite someone’s 

opinion: “if Shenzhen’s economy can’t survive, then forget about China’s,” to guess the 

whole country’s economic problem just based on one city. 

The authors overemphasize the decrease in the growth rate of GDP in China. 

Even as the growth rate of China’s GDP decreases, it still grows. There are lots of 

internal and external factors for the decrease in the growth rate of GDP. If China has a 

good deal with other countries, such as signing a deal marking a pause in the trade war 

with the US., the trade will recover. As technology keeps developing, 5G technology 

might recover some growth rate of GDP in China. The authors are very biased to 

conclude that China’s economy is slowing, just based on the situation of Shenzhen, 

which is just a single city in China. Even in China, there remain five million people who 

are still considered severely impoverished. China has 1.435 billion of people. Five 

million is only 0.35% of the whole population. By comparison, in the US, the rate is 11.8 

percent. The authors still want to use this evidence to prove China’s economy is 

weakening. 

Do you think China’s slowing GDP growth rate in recent years will have significant 

effects on China’s economy in the future? 

https://www.wsj.com/articles/chinas-economic-growth-slows-to-6-1-as-trade-and- 

business-confidence-suffer-11579236022?mod=searchresults&page=1&pos=2 

https://www.statista.com/statistics/200463/us-poverty-rate-since-1990/

The U.S. economy still isn’t firing on all cylinders. Here’s what needs to change

https://www.marketwatch.com/story/the-us-economy-still-isnt-firing-on-all-cylinders-heres-what-needs-to-change-2020-01-18

In the past few quarters the U.S economy has been slowing down, while also the consumer side has been the reason that GDP hasn't gone off a cliff. There has been an incredible amount of turmoil due to the trade war, and because of that other factors of GDP have slowed down, most notably investment. The recent trade deals may be helpful with investment but that is unlikely to actually help enough to get the economy "firing on all cylinders". Economists are still hopeful that with time that the economy will get back to what they think it can be at. What do you believe businesses will be doing in the upcoming quarters in terms of investment? And along with that, what do you think will be happening to consumer confidence if investment does increase/decrease?

China Poised to Buy More From U.S., at the Expense of U.S. Allies

As the United States and China have reached a temporary truce in their costly trade war, Beijing has agreed to buy $200 billion of American-made goods in over two years. Critics wonder how China can continue with its commitment to purchase a large quantity of goods from the United States over a short period of time. Simple, by reallocating orders that have gone to American allies (agriculture for Latin America and manufactured goods from Europe and East Asia) to American exporters and the Chinese government's ability to tell state-run companies to purchase more American goods.

But with the signing of Phase 1 deal between the two countries, American allies will soon face a loss of a substantial amount of business that they have enjoyed the past few years with China when they decreased imports of American goods and found other substitutes in Europe and Latin America. Other than the loss of China's giant consumer economy with the trade deal, American allies also dislike the continuation of the 25% tariffs the United States has on a wide range of Chinese-made goods subsidized by the government. The tariffs could divert the Chinese-made goods to Europe and other places when the allies would rather export their own goods instead of being flooded by Chinese alternatives.

Is the beginning of the U.S.-China trade agreement alleviating the battered global economy or is it undermining the international trading system?

https://www.nytimes.com/2020/01/23/business/economy/china-us-trade-deal-allies.html

World financial markets rocked by China coronavirus

https://www.theguardian.com/business/2020/jan/23/financial-markets-china-coronavirus-outbreak-economy


There is a new virus outbreak that started in one of China's booming car manufacturing city. With the growing concern over the spread of the virus, China is trying to contain the virus and shut down four other cities, and also banned travel during the Lunar New Year, where people are expected to travel across the country to celebrate with their friends and families. With this travel ban, people are now fearing that this virus would affect economic growth and slow down the economy. But, China has dealt with a similar situation before in the 2003 Sars virus outbreak, which caused an estimated decline in China's GDP growth between one and two percentage points. But, it's a different time now and China is a booming economic giant for countries worldwide. There was a strong recovery following the Sars outbreak and this gives hope to people that the coronavirus may also have little impact if it can be contained. According to some of the economists, if this virus is not contained, tourism, retail sales, and travel would be hit in the next few months.
Do you think this coronavirus could be contained and how big of an impact would this virus had on the world's economy?

Brexit Leading Firms to Set Up Shop in Germany

According to an article put out by Reuters , with impending Brexit deals to be made over the next year, Germany has also reported around two dozen British-based firms opening offices in Germany, which could lead to offering at least 680 new jobs. For Britain, this could be signaling a disdain for the upcoming Brexit, while for Germany it will be a great way to capitalize on their close trade partner leaving the European Union. Most of these companies were in the Finance and Business Services industry, a little under a third being IT Services, and the other 40% being a mix of other industries.

It is important to note that these moves were likely in response to potential new tariffs and taxes to be paid through the exportation of good to Germany and the EU. In addition to this, Germany is the UK's second largest partner to whom they export goods. Do you believe that this could signal economic trouble lying ahead for the UK, or will their "business as usual" promises come to fruition?

Washington and Brussels put pressure on Brexit Britain

As Great Britain plans on exiting European Union on January 31st 2020, it hopes to improve trade relations with United States. In order to achieve this goal, Great Britain will have to comply with United States standard of trading which includes no digital tax on American companies operating in United Kingdom, abort its plan on letting Chinese company Huawei plant 5G cellular networks in U.K. and finally put maximum pressure on Iran so that it proves its loyalty to Washington. These trade terms aren't favorable and so Chancellor Sajid Javid hopes to improve trade with European Union bloc according to his recent talk at World Economic forum.However, EU is giving a tough time to U.K as European commission is planning to block U.K. from securing same rights as other European countries for, they fear that U.K will gain competitive advantage over European bloc and eventually move away from trading with her European counterparts. With the current scenario laid out, it is fascinating to see IMF being optimistic of Brexit Britain performing well above than France and Germany. Do you think IMF prediction of Brexit Britain would turn out true with all constraints imposed by Washington and Brussels? https://www.ft.com/content/6a9800c2-3d16-11ea-b232-000f4477fbca

Following the trade war with China, Trump mentions that he is interested in possibly posing automotive tariffs on European countries. The UK and Italy have discussed tax delays to prevent this from happening; however, Treasury Secretary Steven Mnuchin said that that will cause Trump to implicate the tariffs sooner. Trump is also discussing making some tax cuts again, while Jerome Powell has raised Federal Fund Rates. Trump said if they didn't GDP would have been higher. What positive or negative effects do you think economic tariffs on exports to Europe would have on our economy?

China's birth rate hits lowest level in modern history

According to Chao Deng of Marketwatch.com, China's birht rate fell by 4% in 2019, marking the third consecutive year of birth rate decline. While the Chinese government is putting in efforts to reverse this trend, it is already having consequences: nearly one fifth of China's population is age 60 or older, the population is swiftly aging, and the workforce is shrinking as more Chinese citizens retire. This may have negative impacts on the economy due to the price of labor increasing, not to mention healthcare as a larger portion of the population is elderly. Japan and South Korea apparently face similar problems, but on a much smaller scale than China is facing. They do, however, have a story to tell; other Asian countries who have experienced this phenomenon have shown that once declining, it is extremely difficult to get birth rate back up. This will likely bog down development in China to some extent, and experts at Capital Economics predict that China's growth rate will decrease by half a percentage point each year until 2030.

What do you think the Chinese government can do, if anything, to manage the impacts of this trend? What other consequences can you see arising from it that are not discussed in this article?

https://www.marketwatch.com/story/red-flag-for-economic-growth-as-chinas-birth-rate-hits-lowest-level-in-modern-history-2020-01-21

U.S. Union Membership Hits Another Record Low

Union membership has been declining for the past couple of decades, however, the number of union members fell by 170,000 in 2019 which was a year when US employers added more than 2.1 million jobs. This reduction in the share of the workforce in labor unions now amounts to 10.3%, the lowest portion recorded since 1983. Marick Masters, a business professor at Wayne State University, said, "The big picture presents the now familiar story of a gradual decline in unions across most industries". 

Considering that we are still experiencing the largest economic growth period in history, more and more people are entering the labor market which in context should lower working wages. Do you expect there to be a resurgence in unions in the near future? Is the decline in union membership responsible for stagnating wages?

China’s Improving Economic Data Masks Deeper Problems

https://www.nytimes.com/2020/01/16/business/economy/china-economy-gdp.html

Despite the increase in consumer spending, favorable trade deal with the U.S and standing as the second-largest economy, China is still facing a battle with its slowing economic growth figures. Since China opened up to the world about four decades ago, it has been facing some major challenges, and the largest one being their tendency to borrow. The country is loaded with trillions of dollars of debt, and this resulted in an annual growth rate of 6.1 percent reported last Friday. This is the slowest pace it has faced in the past 29 years, and careless borrowing has harmed the economy in the short run. As a result, China's corporate sector has been struggling to pay their bills as they are strapped for cash. The auto and property industry, two key drivers of growth, have been struggling with their sales alongside. Chinese companies will find it expensive to borrow in the future if their current debts are not curbed. Certain companies did not improve their sales, despite having borrowed large sums of money, and Larry Hu, chief economist at the Macquarie Group said these red flags indicate that the economy's recovery Is not likely in the next four quarters. 

What measures do you think China might take to alleviate the economic pressure from their debts?

US Economic Growth to top 3% in 2020?

The White House's top economic advisor, Larry Kudlow, believes that the US economy has a very realistic chance of topping 3% in 2020. This would be a very significant achievement, as we saw slower than normal growth in 2019 that caused many to believe a recession was looming. However, after a strong Q4 in 2019, partly due to holiday sales, the stage has been set for a promising 2020 economy. A major contributor in that assumption would be the manufacturing industry, which has seen an unexpected rise in output numbers early in 2020.

Do you see his as a sign of the threat of a nearby recession disappearing?

Why Iran's Economy Has Not Collapsed Amid U.S. Sanctions And 'Maximum Pressure'

https://www.npr.org/2020/01/16/796781021/why-irans-economy-has-not-collapsed-amid-u-s-sanctions-and-maximum-pressure

The U.S. has imposed many sanctions on Iran which has put Iran's economy in jeopardy. Perhaps, the U.S. was too optimistic that these sanctions would crash Iran's economy and end the regime. This is partly due to the fact that Iran has been under sanctions since the 80's, so they know how to find ways to operate even with harsh U.S. sanctions. This year Iran's GDP is on track to decrease 9%. But during the hostage crisis they're GDP decreased 50% and the economy still didn't crash. Part of the reason they have been able to stand these harsh sanctions is because they have good relations with some regional partners that help keep them afloat. Do you see Iran's economy failing in the near future or do you think they'll be able to hold of for the long run?