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Posts Tagged ‘growth’


Posted on March 27, 2012 - by

Can JPMorgan Chase Find Growth Overseas?

Where’s your company generating its sales?

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Posted on March 24, 2012 - by

Can Overseas Sales Drive Exxon’s Growth?

Where’s your company generating its sales?

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Posted on February 17, 2012 - by

This Stock Bundles Growth and Value

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Posted on December 1, 2011 - by

Checking the Quality of Qualcomm’s Growth

These two simple metrics can save you a lot of pain.

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Posted on October 23, 2011 - by

How Rosy Is Ruby Tuesday’s Growth?

These two simple metrics can save you a lot of pain.

View full post on Fool.com: The Motley Fool


Posted on March 19, 2011 - by

Is opera good for growth?

TODAY’S “Oh, really?” moment comes courtesy of Jack Ewing at Economix:

Modern Germans may still be harvesting significant economic benefits from extravagant opera houses built by spendthrift Baroque princes, according to a study published this month by the Ifo Institute for Economic Research in Munich.

The economists behind the study, Oliver Falck, Michael Fritsch and Stephan Heblich, argued that Baroque opera houses attract well-educated workers who prefer to live near cultural amenities. Proximity to an opera house can increase regional growth by as much as 2 percentage points, they wrote.

They concluded that political leaders should think twice before reducing culture spending.

Oh, really?

The study by Mr. Falck and the other economists examined 29 opera houses built before 1800 or just afterward. By limiting themselves to venues constructed before the advent of the industrial revolution, the authors sought to eliminate the possibility that opera houses were a result, rather than a cause, of regional economic growth.

The study corrected for other factors that might explain higher growth, like the presence of a university or seaport. Some opera venues were in major cities like Berlin, Munich and Hamburg, but others were in smaller cities like Bautzen, Passau and Stralsund.

The authors also looked at regions with similar characteristics, minus the opera house.

Ok, maybe there’s something to this. Maybe most smart people really like opera enough to move to cities that have opera houses, thereby making those cities more productive. But colour me sceptical.

The authors of the paper go to great lengths to control for other factors that might bias their results. They only look at opera houses built before or immediately after 1800, that is, prior to the industrial revolution. And they control for local economic conditions at the time of construction of the opera house. But does that necessarily mean that it’s the present impact of the opera houses that’s driving growth?

Here’s my alternative explanation: education levels are persistent. It’s quite possible that courts built opera houses in the 18th century for reasons of prestige, and those opera houses attracted skilled musicians and music lovers in the decades thereafter. And it’s those 19th century concentrations of educated individuals that are responsible for high skill levels and growth now. Not the opera.

Seem strange? Have a look at this:

As you can see, there’s a tight relationship between school enrolment in 1900 and income a century later. Ed Glaeser wrote on this back in 2009:

One reason that historical education levels have such predictive power is that educational investment is extremely persistent. School enrollments in 1900 can explain more than 72 percent of the variation in years of schooling across countries today, as measured by data collected by Robert J. Barro and Jong-Wha Lee; a similar degree of persistence occurs across United States cities.

Educated parents and teachers produce educated children; societies that invested in schooling a century ago still generally do so today. Moreover, education has an extraordinarily high contemporaneous relationship with national income levels.

Before I sign off on job-creating opera-construction initiatives, I’d like to see an effort to control for education levels a century ago.

View full post on Free exchange


Posted on February 3, 2011 - by

harmon.ie by Mainsoft Logs 400% Growth, Simplifying Enterprise Collaboration

harmon.ie by Mainsoft Logs 400% Growth, Simplifying Enterprise Collaboration
LOTUSPHERE, ORLANDO, Fla.–(BUSINESS WIRE)–HARMON.IE BY MAINSOFT LOGS 400% GROWTH, SIMPLIFYING ENTERPRISE COLLABORATION. ABB, Amway, American Water & Others Invest In ‘Social Email’ to Bring Collaboration to ALL Users

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Posted on January 27, 2011 - by

The Fed remains worried about growth

YESTERDAY, the Federal Reserve released its first policy statement of the new year, and observers learned a few things. First, the Federal Open Market Committee remains wary about the weakness of the American economy:

Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.

I think the economic data that was coming in through December moved expectations from too pessimistic to perhaps a little too optimistic. Recent datapoints have been a little off—jobless claims have yet to hit the sub-400,000 level touched in late December, durable goods orders have softened a bit, and home prices are disappointing (though the housing figures should be treated with caution). The underlying trend in the numbers is clearly toward an accelerating recovery, but even a 4% real growth rate in 2011, which is possible, implies a long period of economic slack ahead.

Secondly, the shift in the make-up of the FOMC has not meaningfully altered the commitment to current policy, at least not yet. With the new year, perpetual dissenter Thomas Hoenig lost his voting status, but demand-side sceptics like Narayana Kocherlakota and Richard Fisher gained a vote. But the Fed’s policy has not changed—the plan to purchase $600 billion in additional assets remains on track and the language on extended low rates is still in place—and indeed, the statement was supported unanimously for the first time in ages.

What remains uncertain is how this policy path will develop as the year proceeds. If commodity prices rise into the summer, will the consensus on the FOMC stand? It would be surprising if such a rise led to a big increase in core inflation given the huge slack in the labour market, but it’s difficult to hold back rate increases when headline inflation jumpts to near 3%. If the unemployment rate does begin to drop meaningfully, will disputes arise over just where the new natural rate lies?

For now, the Fed’s path remains easy. With unemployment too high and inflation too low, the central bank should adopt an aggressively expansionary approach. But can Ben Bernanke keep the hawks in line as recovery continues? We’ll have to see.

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Posted on December 28, 2010 - by

Growth is good

I AGREE with Adam Ozimek that this is a daft view of the impact of population shifts on economic performance:

For the economy, a slower increase in the population raises concerns about American competitiveness. But it could actually be a good thing. A number of economists, including the Federal Reserve Chairman Ben Bernanke are worried about the lack of inflation and income growth in the United States. Fewer workers could drive up salaries. What’s more, fewer new Americans might help slow government spending. That may curtail the rising US federal debt, which many think will soon cause interest rates to jump and hold down US GDP growth. “At a time of fewer government resources, fewer new people might not be such a bad thing,” says New Hampshire’s Johnson.

When we look at something like the research by Claudia Goldin and Lawrence Katz on labour supply and income changes, we see a story in which wages of skilled workers rise because the economy’s production of skilled workers slows, relative to what the economy demands. But when we’re talking about slower population growth, we’re talking about slower growth in aggregate demand. That’s not the sort of thing that places upward pressure on incomes. Meanwhile, we could see rising real incomes as slower population growth leads to slower growth in consumer prices, but that’s obviously not inflationary.

The point concerning government spending is simply bizarre. Projected growth in federal spending is largely due to rising spending on entitlements, especially Medicare and Medicaid. Slower population growth isn’t going to limit this spending growth; it will just increase the dependency ratio and the expected per capita burden of taxation. This is likely to slow growth, exacerbating the process of government deleveraging. It may also lead to greater financial security and increased savings, and a nation of savers is likely to demand a tighter monetary policy.

Indeed, all of the above is precisely what has been observed in Japan, where population growth slowed, halted, and eventually reversed. Per capita incomes have risen only very slowly, government debt is enormous, households are heavy savers, and deflation is endemic. Population growth isn’t a cure-all, but in the present economic situation it’s likely to make the resolution of a range of problems much easier.

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Posted on November 25, 2010 - by

South Africa unveils new economic growth plan

South Africa unveils new economic growth plan
South Africa has revealed its New Economic Growth Path plan, which has set an ambitious target of creating five million jobs over the next decade, through slashing unnecessary red-tape, improving competition in the economy and stepping up skill development in Africa’s biggest economy.

Read more on People’s Daily