Monthly Archives: October 2012

Keith Fray

How important is the economy in deciding the result of US presidential elections? Is it really the case that, as in the often-repeated phrase from Bill Clinton’s 1992 campaign, “It’s the economy, stupid!”? If so then a look at history may be useful.

A lot of commentary in this campaign has concerned the unemployment rate, usually reiterating that the only president since the 1930s to win re-election with unemployment above 7% was Ronald Reagan in 1984. The argument is usually made that, with unemployment around 8%, President Obama faces a huge task to win. Read more

Kate Allen

As the wrangling over the European Union budget hots up, some member states are getting tetchy about their contributions. Germany, France, Italy and the UK bear the brunt of the net costs. The UK is well known for regarding its payments as excessive, and some other high-paying countries are now joining in with the complaints.

At the other end of the scale, the biggest gainer under the current budget arrangements is clearly Poland. On a per-head basis, Luxembourg does extremely well out of the system – but its net gain includes the funding costs for various EU institutions, and so its apparent extravagance is perhaps misleading. Greece and Hungary also do pretty well. On a per-head basis, Lithuania and Latvia have reason to be cheerful. Most of the recent accession states do pretty well out of the current arrangement. Read more

Partial results from Ukraine’s parliamentary election on Sunday suggest a narrow victory for the governing party of Viktor Yanukovich, president since 2010.

It is still too early to say whether Yanukovich’s Party of Regions will be able to build a working majority, and at what political cost. But the election looks unlikely to make it any easier for Yanukovich to tackle his country’s pressing economic problems.

In autumn 2010 the IMF forecast growth for this year of nearly 5 per cent. It cut that forecast to 3 per cent a few weeks ago. That’s a significant revision, bearing in mind that the Fund cut its forecast for Russia by 1 percentage point, while for the whole CIS region its forecast for this year has fallen by only half a percentage point over the past two years.

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Kate Allen

Access to electricity is one of the key factors identified by the World Bank as essential for doing business. But that is difficult and time-consuming in some surprisingly well-off countries, its research shows.

European countries come out of the research particularly badly: eight are among the world’s worst 25 performers (or seven, if you don’t consider Azerbaijan part of Europe). The only other well-off countries in this list are Russia and South Africa. Read more

Keith Fray

US President Barack Obama (L) greets Republican presidential candidate Mitt Romney (R) following the third and final presidential debate at Lynn University in Boca Raton, Florida, October 22, 2012 (SAUL LOEB/AFP/Getty Images)

(SAUL LOEB/AFP/Getty Images)

Two sets of impending economic data are likely to hit the headlines in the last days of the US presidential campaign: the first estimate of GDP for the third quarter of the year, out on Friday October 26, and the employment situation report for October, published on Friday November 2, four days before the election.

After the release of labour market data for September, President Obama’s camp made much of strong growth in hiring, up 114,000 compared with August, and a fall in the unemployment rate from 8.1 per cent to 7.8 per cent, taking the rate back to where it was when the president took office in 2009. Mitt Romney’s campaign countered that, if not for people exiting the labour market, the rate would be in double figures. Read more

Kate Allen

What have Georgia, Rwanda and Belarus got in common? According to the World Bank’s annual Doing Business project, which has been running for nearly a decade, these are the fastest improving countries in which to do business.

The most surprising inclusion for the outsider is obviously Rwanda. The central African nation has changed greatly since the horrific genocide in 1994-1995 for which it is most notorious. Just days ago, it took up a seat on the UN Security Council. And it is attempting to reduce its reliance on foreign aid donors, focusing instead on raising its own funding.

Most improved countries in which to do business since 2005 Read more

Kate Allen

The number of housing benefit claimants is rising, and thus so is the cost to the Treasury, data from the Department for Work and Pensions shows. The number of people claiming housing benefit has increased by a startling 780,000 since the beginning of 2009 to 5 million.

There are a couple of small rays of light for the government.

Firstly, the rate of increase in claimants has slowed since the general election in May 2010.

Number of housing benefit claimants Read more

In Europe and the US, they are often called “squeezed” or “worried”. In developing markets, they are “booming”, “growing” and, of course, “emerging”.

The middle classes are changing consumption habits around the world. Chart of the week takes a look at some key emerging markets and the level of middle class spending.

 

We have used data from the OECD and the Brookings Institution which define the middle class as those earning 10 to 100 dollars at purchasing power parity per day. On this basis, more than half of the globe’s middle class people are forecast to be in the Asia Pacific region in fewer then 10 years, compared to the current proportion of only one in four.

 Read more

Kate Allen

“Oh we do like to be beside the seaside, oh we do like to be beside the sea”, as the classic English music-hall song goes. But for many people, that’s no longer the case. British seaside towns – once the bastion of the country’s summer economy – now have the nation’s highest levels of insolvency, according to a data analysis by the Office for National Statistics.

Four of the five highest rates of insolvencies in 2011 (per 10,000 adult population) were areas containing seaside towns, and they make up just under half of the top 20.

Highest rates of insolvencies 2011 Read more

Kate Allen

Far too few people in the UK have the quantitative skills needed by employers and policy-makers, according to a paper published this week by the British Academy. It argues the deficit has

Serious implications for the future of the UK’s status as a world leader in research and higher education, for the employability of our graduates, and for the competitiveness of the UK’s economy.

As increasing amounts of data becomes available in large-scale databases, public debate will increasingly turn on statistical arguments, the group said, and it is therefore essential to provide citizens with the ability to understand, analyse and criticise data – indeed, this will be “ever more integral to the functioning of a democracy”.

The report comes as a new £15.5m funding programme is launched by the Economic & Social Research Council, the Higher Education Funding Council for England and the Nuffield Foundation, aiming to boost quantitative methods training in UK universities’ social science departments. Up to 15 universities will receive funding to become centres of excellence for quantitative methods training.

The British Academy traces the skills deficit back to school level, where the UK lags behind many other countries in the proportion of pupils studying maths at upper secondary level (beyond 16). This was illustrated in a paper for the Nuffield Foundation in 2010.

Maths participation rates at upper-secondary level Read more

When we started these posts for the 2012 election season, the goal was to give a purely numbers-driven look at the presidential election – a respite from the noise. Not that the media coverage isn’t useful, however it can be occasionally useful to turn off the noise and just look at the data.

Let’s get a sense of the polls for the last month and a half. Each of these graphs looks at the race(s) from September 1 to mid October.

Real Clear Politics (RCP)

Now that’s what I call volatility. After being in a dead heat in early September, Obama built a lead that hovered in the 3-4 point range for much of the month. The October 3 debate was seen as an important turning point, giving Romney some sorely needed momentum. It is important to note, however, that he had been trending up in the days preceding the event.

To the market!

Iowa Electronic Market (IEM)

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Kate Allen

Just as we thought the era of frothy housing markets was over, whispers of a German property bubble are beginning to grow. The recent data are certainly startling – since early 2010 the rate of house price growth has really taken off.

House prices in 7 German cities

But before ploughing your life savings into a buy-to-let scheme in Schleswig-Holstein, wait a second. Because a longer-term perspective shows that most German property is only just returning to the price levels of nearly two decades ago: Read more

Kate Allen

Is Iran entering hyperinflation? Some academics certainly think so. And the FT gave a heads-up on this a few weeks ago. Since then, things haven’t exactly improved. The government is trying to stop the rial from slipping into the abyss, amid increasing signs that the oil embargo is beginning to hurt.

There have been 56 previous episodes of hyperinflation*, according to an instant-classic paper published in August by Steve Hanke and Nicholas Krus. Our colleagues over on the Money Supply blog looked at the paper in more detail when it was first published. Read more

Chris Cook

John Goldthorpe, a pioneer and leader in sociology, is always worth reading. This week, he has written a piece that delivers a kicking to assumptions in Whitehall, Westminster and Fleet Street. But it also poses a significant challenge to organisations like TeachFirst.

The piece centres on the misreadings of the academic literature of social mobility. But, from there, it moves on to the limitations of an education policy on its own. His work suggests school reform is not going to improve mobility. This should be taken seriously.

He has been pointing this out for some time. But, this time, he’s done two things that ought to make this easier for journalists to follow. First, he uses smaller words than usual. Second, he talks about the media, and we are obsessed by that.

He posits why the media have not followed the argument. I rather like the idea of “media hysteresis”:

the tendency within the media, once a particular ‘line’ on any issue has become widely accepted, for this line to be maintained as the standard output, regardless of any further inputs.

Read it here. Or at least cast your eyes over the conclusion, which I have pasted below. Agree or not, they are fantastically interesting and his voice carries a level of authority usually only accorded to those of burning bushes. Read more

Kate Allen

Martin Wolf’s column today looks at some interesting historical analysis by the IMF. Tucked away in its latest World Economic Outlook is an take on high-debt-to-GDP incidents. It’s a treat for fans of economic history. The IMF dug out data on every incident since 1875 where a country’s debt topped 100 per cent of its GDP – and then tracked what happened to that ratio over the following 15 years.

The results fall into four broad periods: the last quarter of the 19th century (what the IMF calls ‘nation-building and the railroad boom’), the periods after the two world wars, and the last quarter of the 20th century (the genesis of which lay in the breakdown of the Bretton Woods system in the 1970s, the IMF says). Read more

Kate Allen

As Ben Fenton reported earlier today, Conservative party star Boris Johnson has lauded Britain’s businesses, adapting a quote from Napoleon to call Britain ‘a nation of small and medium enterprises’.

And the mayor of London is right – businesses with up to four employees make up the majority of companies in the country*, data released by the ONS last week shows. SMEs – defined in EU law as having fewer than 250 employees – comprise 99.5 per cent of businesses. And three-quarters of all firms are the smallest of small traders, with up to four employees.

UK businesses by size Read more

Valentina Romei

The UK Department for Transport is under fire over the cancellation of a deal to award a rail franchise, because of “technical flaws” in the bidding process.

The incident brings the British railway system back into the headlines, where it has often been because of contested fare rises. Complaints about the railways may be something of a national sport, but according to a survey published last month by Eurobarometer, the European Commission body that analyses public opinion, people in the UK are more satisfied with their national and regional rail system than most of their European counterparts. Read more

Kate Allen

If you’re going to have a bet this party conference season, take on an MP – that’s the obvious conclusion from an Ipsos Mori poll for the Royal Statistical Society, which suggests that our elected representatives are simply asking to be fleeced.

As part of its Parliamentary lobbying work, the RSS set a basic probability question for nearly 100 MPs. ‘If you spin a coin twice, what is the probability of getting two heads?’*

More than half of them got the answer wrong.

all MPs Read more

Valentina Romei

The US has shown a turnround after data released by the Institute for Supply management showed an index rise in manufacturing after three months of consecutive contraction. However, there are doubts whether the positive trend will continue in the the near future for the US, whereas for India, Russia and Turkey, the expansion seems more robust.

In India, manufacturing output in September expanded at a faster rate than in August, with its order book rising and new export orders increasing for the first time since June. Rising demand has also helped Turkey, in addition to new business from abroad, after a fall in output in July and August. Read more

Kate Allen

The government’s spending cutbacks are having a considerable impact on public sector employment, new data from the Office for National Statistics shows.

The total number of people in employment fell by 48,000 between September 2010 and September 2011, with the biggest net loss by far in the public administration sector, according to the new figures. The government is relying on the private sector to pick up the slack in the labour market. The tourism industry (‘accommodation & food services’) enjoyed a considerable boost in staffing numbers, perhaps thanks to the effect of this summer’s Olympic Games.

Change in employees by sector Read more