World Economics

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The Informal Economy: Who Wins, Who Loses and Why We Care
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Giovanna Maria Dora Dore, World Economics, March 2019
The informal economy is one of the most complex economic and political phenomena of our time. It exists in rich and poor countries alike, and currently employs almost half of the world’s workers, about 1.8 billion people. •At a value of US$10 trillion, the informal economy is the second-largest economy in the world, after the economy of the United States (at US$14 trillion) and before that of China (at US$8.2 trillion). High taxes, labour costs and social security infrastructures, undeclared work and underreporting are among the most powerful drivers of informality. Measures promoting behavioural changes can help counter its growth, even though controls and penalties remain more popular as tools in the fight against the informal economy. The informal sector remains the fastest-growing part of the world economy and we need a better understanding of what it means for business and society and why it is the preferred operating sector for many entrepreneurs.
Saudi Arabian Labour Market Data Outlines the Challenges of Reform
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Brian Sturgess, World Economics, March 2019
Saudi Arabia’s Council of Ministers approved an ambitious National Transformation Programme (NTP) in June 2016 with the aim of carrying out a complete restructuring of the economy. The implementation of Vision 2030 has major implications for the structure of Saudi Arabia’s labour market with the creation of 1.2 million non-oil private sector jobs, most of which are expected to be taken up by citizens. Official data shows the labour market has a number of distinctive features which will challenge the implementation of Vision 2030: an overreliance on expatriate labour; a preference by nationals for public sector jobs; a gender imbalance; persisting structural unemployment and problems in balancing labour supply and demand. The government is attempting to change the operation and structure of the labour market by a set of policies involving quotas, subsidies, taxes, penalties and the provision of information services, but for a number of reasons change is unlikely to proceed smoothly in the next few years.
An Economic Comparison of Greece and Italy
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Theodore Pelagidis, World Economics, December 2018
In Greece and Italy, populist parties have taken power in recent years, a result of coalition between radical left and far-right parties. Both countries are of concern to the European Commission—Greece’s ‘enhanced surveillance’ could end in another bail-out program; Italy is pursuing its budget deficit dispute. Greece and Italy share many economic structural weaknesses in the size of public sector deficits, in the taxation of labour, corporate taxes, and high levels of regulation. Finally, the current and future growth rates of both Greece and Italy are inadequate and the political climate is highly polarized, radical, with no culture of compromising.
America’s Dangerously Opaque Public Accounting Systems
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Avantika Chilkoti, World Economics, March 2012
The current global economic crisis has highlighted the problems that result from governments’ archaic and erroneous accounting practices. The Financial Report of the United States Government is scrutinised with the same pedantry that an auditor or long-term investor uses when studying the financial statements of a listed company. What emerges is an all too clear picture of the extent and the root of America’s economic crisis. USA Inc. is found to have a net worth of minus $44 trillion, a symptom of unfunded liabilities that have grown as entitlement expenditure has rocketed. As well as changes in policy, it is the external auditing of government accounts that is suggested as a potential panacea for this global epidemic.
From Big Macs to iMacs
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Jonathan Haskel & Holger Wolf, World Economics, June 2000
The authors review recent international price comparisons to examine the veracity of claims about “rip-off Britain”. They reach three conclusions. First, methodologically, the data requirements for a meaningful price comparison are very demanding and most of the evidence does not meet these standards. Second, price differences within countries seem, in many cases, to be just as high if not higher than price differences between countries. Third, for most goods, the difference between the UK and the rest of the EU seems to be minor relative to the difference between the EU and the United States. The real puzzle is the comparatively high prices in the EU.
The Black Economy - Benefit frauds or tax evaders?
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Jim Thomas, World Economics, March 2000
One answer to the question "How Rich are We?" is to compare levels of National Income either across countries or for a single country over time. However, the relevance of this approach depends on how accurately National Income measures the output of goods and services of a country. While it is difficult to measure, the Black Economy represents the output of goods and services that is not generally captured in the National Income Accounts. This article discusses the problems of measuring the size of the Black Economy and speculates on the questions of who is involved and how. The relative importance of Tax Evasion versus Benefit Fraud is discussed.

Extending the UK National Accounts
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Amanda Rowlatt, World Economics, March 2000
The national accounts measure economic activity. The UK is developing "satellite accounts" which use the framework of the national accounts but aim to quantify other aspects of living standards. This article starts by comparing satellite accounts with the use of indicators to measure the quality of life. It then reports on progress with the UK environmental accounts, and with the household accounts, which measure the productive unpaid work done in the home. It concludes with a discussion of the scope for developing a wider range of satellite accounts for the UK.

Displaying: 1-7 of 7