Economic Indicators

Economics Slowdown and Crime In America

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It might be  of little comfort to their residents, but there was at least some good news for the American states hardest hit by recession, in the regional crime data recently released by the US Department of Justice. Nationwide, crime rates have been falling for two decades, a trend that continued through the recession. The latest figures reveal the surprising depth of the decline in property crime between 2007 and 2010. In the states which suffered the biggest drops in per-person income, such as Nevada, the rate of property crime has also come down most. If such crime is a rational act, one might expect it to increase as residents get poorer and more desperate for cash.

 But the recession also hit the incomes of the victims of crime, perhaps reducing the opportunities for criminals to steal from them. This second effect seems to have been greater during the recession, and in fact the correlation is strongest during its worst period, 2008-09. 

Other plausible explanations can’t be ruled out; perhaps criminals, or at least those most likely to commit crime, are migrating to growing states. Others may be reducing police budgets less, or locking up more criminals, for reasons unrelated to economic performance. Whatever the cause, the general downward trend in crime is some small relief in tough economic times.

United States and National Debt Statistics

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U.S. Debt Ceiling Crisis
Created by OANDA

WHILE Congressmen trade over concessions and budget cuts, the clock continues to tick on America’s debt. Barack Obama has set a deadline of July 22nd for Congress to agree on a deal. On August 2nd, the $14.294 trillion threshold at which by law America can no longer borrow money, will be reached.  In a recent Post at Economist  says ” if  that happens, America will default on its debt, triggering “a huge financial calamity” according to Ben Bernanke, the Federal Reserve chairman. On June 30th, there remained just $25m left in the kitty. Congress has acted a total of 91 times since June 1940 to either raise, extend or alter the definition of the debt limit—36 times under Democratic presidents. And they have done so with some 300 days to spare on average. 

This graph shows that $9.2 Trillion of the $12 Trillion supply-sider increase in national debt is considered problematic by economists. They say it is fine to increase the debt in step with national income. Republicans say the whole $12 Trillion is a problem.

How America compares with AAA debtors
THE maths underlying the downgrade of America’s sovereign debt by Standard & Poor’s may or may not have been lop-sided, but it is true that the country’s debt burden does not compare well with those of other countries that still get AAA ratings. The attention of the markets has turned to France and, in particular, its banks (whose shares are now covered by a ban on short-selling). Yet France would appear to have more room for manoeuvre than America does.

Central Bank Interest Rate : Country Comparison

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Source : Which Way To Pay/Trading Economics

Inflation Rate Across Major Economies:2007-2010

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This page has a list of countries ranked by Inflation Rates. The most well known indicator of inflation is the Consumer Price Index (CPI) which measures the average price of consumer goods and services purchased by households. In sum, Inflation is the rate at which the general level of prices is rising. High rates of inflation are often associated with fast growing economies where the demand for goods and services is higher that the country’s productive capacity. The fight against inflation is done by central banks which control the money supply by increasing or decreasing short term interest rates. For instance, the Governing Council of the European Central Bank aims at keeping annual inflation under 2% to promote price stability and sustainable growth.

Ease of Doing Business : Global Comparison

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The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work claims to show that the effect of improving these regulations on economic growth is strong.

The Top 20 Countries for Doing Business

The  Ease of Doing Business index is based on the study of laws and regulations, with the input and verification by more than 8,000 government officials, lawyers, business consultants, accountants and other professionals in 183 economies who routinely advise on or administer legal and regulatory requirements.
The Ease of Doing Business index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation’s proximity to large markets, quality of infrastructure, inflation, or crime. A nation’s ranking on the index is based on the average of 10 subindices:
  • Starting a Business – Procedures, time, cost and minimum capital to open a new business
  • Dealing with construction permits – Procedures, time and cost to build a warehouse
  • Employing workers – Difficulty of hiring index, rigidity of hours of index, difficulty of redundancy index, rigidity of employment index, redundancy costs
  • Registering property – Procedures, time and cost to register commercial real estate
  • Getting credit – Strength of legal rights index, depth of credit information index
  • Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
  • Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
  • Trading across borders – Number of documents, cost and time necessary to export and import
  • Enforcing contracts – Procedures, time and cost to enforce a debt contract
  • Closing a business – Index of recovery rate which is a function of time, cost and other factors such as lending rate and the likelihood of the company continuing to operate

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Data from World Bank