Will Cleveland get an economic boost from the GOP Convention?

The Republican National Convention is coming to Cleveland, and boosters are cheering the millions of dollars it will bring to northeast Ohio’s businesses.  There are lots of impact studies of previous Republican and Democratic nominating conventions. Each seems to produce more eye-popping figures than the last. However, some academics and journalists suggest these conventions really have no impact on the local economy.

Which is the true story? Continue reading

What is Brazilian President Dilma Rousseff’s real crime?

Dilma Rousseff, Brazil’s first female president, is about to go on trial. She is temporarily suspended from office while Brazilian politicians debate whether she broke the country’s laws.

Her crime is she allegedly borrowed about US$11 billion from Brazil’s state banks – about one percent of GDP – to fund long-running social programs for small farmers and the poor while trying to get reelected, which concealed a budget deficit. Continue reading

Why is corruption so costly?

The news is currently filled with stories of corruption.  A global group of media outlets just broke the story of secret offshore bank accounts in Panama, which suggests widespread corruption in the Russian government and elsewhere. For months, stories of the Brazilian government’s bribery scandal have filled the news. Other headline-grabbing events include Malaysia’s prime minister allegedly siphoning almost a billion dollars from a state development fund. Continue reading

How do we know if the world is in a global recession?

Since the start of this year, stock markets around the world have fallen as panicked investors have begun believing that the world is slipping into economic malaise.  This fear has also driven down prices of commodities like oil and copper and impelled some central banks, like Japan’s, to make dramatic efforts to boost growth. The concerns are being magnified by memories of the worldwide recession of 2008 and 2009, when many countries experienced widespread joblessness, business bankruptcies and homelessness.

While national and international leaders cannot prevent worldwide economic downturns, a coordinated response among them can mitigate some of the impact. But it’s hard to rally government resources to this cause without the ability to determine whether we are actually in a recession or not.

So how do we know when the world is in a recession and such a response is needed? Continue reading

Fed interest rate hike may have less of an impact than you think

There is a very high chance the Federal Reserve will raise interest rates next week.  It would be the first time the Federal Open Monetary Committee (FOMC) – the Fed’s rate-setting team – has lifted its benchmark rate since 2006, beginning the so-called return to normal.  Economists, traders and policymakers have been pontificating, prognosticating and placing bets about this decision for a long time, because the impact is expected to be far-reaching.

So how will higher rates affect you? Continue reading

Three reasons why most of us shouldn’t worry about the global stock market meltdown

On Monday, the world’s stock markets continued to fall after suffering steep losses the previous week.  The Dow Jones Industrial Average, one of the most widely followed indexes, opened for trading by dropping more than 1,000 points in the first six minutes, or about 6.5%. This thousand-point drop was the largest intraday plunge in the index’s history. Continue reading

What Happens When Greek Banks Are Shut? A Personal Story

The Greek government shut all banks in the country on June 29 after the European Central Bank capped emergency funding to the lenders.  Cash withdrawals from ATMs are now limited to €60 a day (about US$67) for Greek citizens. Foreigners who can find an ATM with cash are exempt from the limit, but cash-poor tourists are finding it very hard to find ATMs with money.

Continue reading

Jeb Bush promises 4% growth. Could ‘President Bush III’ deliver?

Jeb Bush recently announced his candidacy for president by declaring that “our country is on a very bad course” and promised to fix this with the striking promise of “4% growth, and the 19 million new jobs that come with it.”

The former governor stated in his speech that he grew the Florida economy by that much every year during his two terms in office. Can he deliver the same growth in gross domestic product (GDP) for the entire US if elected? Continue reading

The U.S.’s Economy Did NOT Shrink by 0.7% This Past Winter

Recently, business headlines around the world announced that the “U.S. Recovery Stumbles Yet Again.” These headlines trumpeted news that the U.S. economy shrank by 0.7% during the first quarter of 2015. This 0.7% figure is a large exaggeration of what actually happened to the economy last winter. Continue reading

How Much Will the Northeast Blizzard Cost the U.S. Economy?

A major blizzard has started that is shutting down most of the Northeast corridor of the USA. Cars and trucks are being banned from the roads. Subway and train service is shutting down. People are being warned that two to three feet of snow will fall on Philadelphia, New York and Boston. Flights are being canceled in droves and there are scenes of panic buying in supermarkets.  How much will this blizzard cost the U.S. economy? Continue reading

Does a Booming Stock Market Really Help Holiday Sales?

On Friday the U.S. stock market hit another all-time high!  The rising stock market is leading to articles in places like the WSJ and CNBC that suggest a booming stock market is good for holiday sales.  Unfortunately for stores, restaurants and online retailers, no matter what the stock market does there will not be much impact on their sales because of one simple reason. Continue reading