Cities today concentrate more than half of the world population and more than 80% of global GDP. The underlying dynamics explaining their ever increasing importance are the result of a variety of positive externalities (thicker labor markets, knowledge spillovers, input sharing…) generating self-reinforcing effects. These rapid waves of urbanization have key implications for the production of goods and services, environmental quality and human development. The world is one of density spikes and disparities, driven by the unstoppable ascendance of metropolises. Greener and more inclusive cities should be promoted in order for them to remain livable. In this respect, public policies have an important role to play
2019 has been dominated by uncertainty, in particular about trade tensions and hard Brexit risk, as well as mounting concern about the slowdown of the global economy. his has led to additional policy easing by the ECB whereas the Federal Reserve has reversed course by cutting the federal funds rate on several occasions. This has further reduced the remaining policy leeway of central banks, a subject that will be analysed in the context of the strategic reviews by the Fed and the ECB. It has also led to increased calls for fiscal stimulus. Equity markets have delivered surprisingly strong returns with investors preferring to look at the role of lower interest rates, rather than at the weakening of the profits outlook
We monitor uncertainty by means of different metrics and several have eased as of late. Starting top left and moving clockwise, the economic policy uncertainty index, which is based on media coverage, has declined although it remains at a high level...
Based on business surveys, the cyclical environment, globally, seems to have stabilised. A similar picture emerges for the eurozone and China, whereas in the US it is mixed. Stability’ characterises the monetary policy outlook. After the announcements in September, the ECB can afford to wait before making a judgment of the effectiveness of its policy stance. For the Federal Reserve, it seems that the bar for envisaging a change in the federal funds rate is high, even more so when it’s about considering a rate hike. Stabilisation of economic data and a stable, very accommodative monetary stance provide reasons for being hopeful, but this supposes that uncertainty doesn’t increase again. In this respect, unfortunately, the situation remains very opaque
Certain gases in the atmosphere, such as carbon dioxide (CO2), are largely opaque to the Earth’s infrared radiation and keep heat at the Earth’s surface trapped, like a lid. This is the greenhouse effect, identified in 1824 by French mathematician Joseph Fourier. Its intensity has always varied, but human activity has caused it to disrupt. Since the pre-industrial era – generally accepted as the period from 1850 to 1900 – human activity has caused 2,000 billion tonnes of CO2 to be released into the atmosphere, increasing the Earth’s temperature by 1°C. That increase is now accelerating. It will reach 3-5°C by 2100 if carbon emissions continue at their current trend. Few species can adapt to that rate of change, which is a hundred times faster than during interglacial periods of warming
Recent business surveys such as the purchasing managers’ indices, point towards a broad-based stabilisation in October. This is a welcome development after a prolonged downward trend. However, in a historical perspective, the recent readings are low or, looking at the manufacturing sector, very low. This points to an ongoing subdued growth environment. Going forward, a sideways movement of these surveys should increase the likelihood of a growth acceleration: when the frequency of bad news drops, confidence should eventually rebound, fuelling spending, all the more so given the very accommodative financial and monetary conditions.
Revenue of older people mainly consists of state and occupational pensions and income from savings and work. In countries that have, relatively speaking, more generous pension benefits, labour participation of the elderly is relatively low. In France, only 3% of people older than 65 still work, compared to almost 20% in the US and 25% in Japan. Moreover, the French old age poverty rate, the percentage of seniors (66+) whose income is lower than 50% of the median household income, is among the lowest in the OECD. The chart shows that, in general, there is a positive relationship between the percentage of revenue of older people coming from work and their at-risk-of-poverty rate. It thus seems that, when seniors feel financially constrained, they decide to work longer
The US-China trade conflict and Brexit have been acting as a headwind for growth for a considerable time now. Recent developments have raised expectations that these sources of uncertainty may have peaked. Should it turn out to be the case, this could spur spending by unleashing pent-up demand by companies or households. However, in an environment of slowing global growth and, quoting the IMF, a precarious outlook for next year, we probably will see a more limited reaction, with other sources of concern taking over from the previous ones: uncertainty make have peaked in certain areas, but is likely to migrate to other.
