Showing posts from January, 2020

World Employment and Social Outlook Trends 2020

The International Labour Organization (ILO) recently released its principal report of the upcoming year of 2020. The "World Employment and Social Outlook: Trends 2020" publication brings to the forefront the trends seen in the global workforce whether and how they are enhancing or inhibiting economic growth. The organization identified four forces that are changing the way we work and grow as a global society.

As seen by the growth of inequality in most economies, "the lack of inclusiveness" is likely to "impair the ability of lower-income countries to reduce poverty and improve working conditions" especially in conditions of slower economic expansion. Despite largescale technological advancements that cause low-income economies to see an accelerated growth rate in high productivity jobs, those economies have lagged against their higher-income, more industrialized peers. The report points out that "between 2000 and 2018, the employment share of agric…

Trade War Effects on Foreign Exchange

The US-China trade war has been one of the more influential economic events over the past 2 years and has played a big part in defining President Trump's performance as leader of the US. Peterson Institute for International Economics recently reviewed how his tariffs have impacted exchange rates in the dollar and renminbi markets. The analysis begins with the theoretical assumption that tariffs should lead to appreciation in the imposer's currency while the currency of the imposed will depreciation. Of course, the trade war included retaliatory tariffs, so the dynamics have been analyzed both ways.
The main theoretical framework is built with the initial assumption that the imposing country is at full employment. After the tariff is imposed, inflationary forces are increased by demand for labor and domestic currency. With a central bank that wants to keep monitor inflation, interest rates increase and the domestic currency appreciates. The model applies in the opposite way as …