The February numbers aren’t appealing: employment growth is crashing (‘000):
Job creation has been negative in four out of the last five months – a cumulative reduction of about 400k jobs. That’s a serious divergence between the labour force numbers, and the growth of the economy as a whole.
I stumbled on this while looking for something else – the Singer-Prebisch thesis. What Singer and Prebisch found (separately and concurrently) is that the terms of trade between primary commodities and manufactures was declining over time. If true, this empirical observation has profound implications for economic development.
Let me explain that in English.
The terms of trade, put simply, is the amount of imports you can “buy” with one unit of exports. In other words, it measures the purchasing power of exports.
If your terms of trade are declining over time, you have to keep producing more and more just to be able to afford the same quantity and value of imports. But commodity production is subject to inelastic supply – it’s extremely difficult to continually ramp up production.
I respect TDM a great deal for many of things he’s done. His macro policy recommendations need a lot of work though (excerpt):
Peg ringgit to create environment of certainty in market -- Dr M
KUALA LUMPUR: The ringgit should be pegged at RM2.80 to the US dollar in order to create an environment of certainty in the market, said former Prime Minister Tun Dr Mahathir Mohamad.
Dr Mahathir said the peg would also help businesses manage the rising costs of doing business.
"If the exchange rate is fixed at one rate, it will help businesses plan their budgets for the year, knowing exactly that there the value of the ringgit will not change," he said….
March is the first month that we can see the impact on inflation from all those subsidy cuts and rate hikes in the last six months. It’s also the first month where we’re completely clear from the seasonal effect of CNY. The prognosis – nuthin’ much going on (log annual and monthly changes; 2000=100):
While the headline rate is still elevated on a y-o-y basis, price increases have fallen back to “normal” levels. Core inflation is a little higher than the average for the last 5 years, but food and energy prices barely budged.
Give credit where its due. Good policy is good policy, never mind the politics or election promises (excerpt):
Penang to go ahead with water tariff hike despite criticism
The Penang government is standing by its decision to increase water tariffs despite coming under fire over the move.
Chief Minister Lim Guan Eng (pic) said the state is willing to bite the bullet and raise water tariffs in view of climate change and the worsening drought.
He assured that Penang would still enjoy the lowest water tariffs in the country.
"We are facing a climate crisis and water consumption in Penang is the highest in the nation at 311 litres per capita per day. The national average is only 212 litres.
"Such high water consumption is not sustainable and if left unchecked, Penang will have no choice but to resort to water rationing in the future.
"We have to be a responsible government. We will bite the bullet and do this (raise the tariffs). We are willing to face the criticism," he told reporters today.
Last week’s IPI numbers gave me a headache – it’s part of another rebasing exercise, this time to 2010, which required a bit of work to splice – but things are looking up (log annual and monthly changes; seasonally adjusted; 2000=100):
I was really concerned when I first heard the news last week. After having a peek at the data, I’m don’t feel much better (log annual and monthly changes):
M2 growth is pretty weak at a tad over 6%, even after taking into account CNY effects. Overall, money supply growth has been below 8% for the last eight months. That’s uncomfortably low – lower than I’d like it to be. It implies either slower growth, or disinflationary pressure.
It used to be that being an economist, you’d end up working for the government, in academia, or in the financial sector. Nowadays, the market for an economist is much, much wider.
Take for example the following:
It’s a much wider job market than it used to be, and there’s never been a better time to be armed with an economics degree.
However, there are a couple of common threads running through all these “uncommon” jobs – a statistics/econometrics background is absolutely required, and a Masters degree is the minimum entry level qualification (PhD preferred).
Time to start hitting those books again, guys and gals.
BNM is making my life, and the lives of every economist in town, a bit more complicated (excerpt, emphasis added):
Bank Negara Malaysia is pleased to inform that starting with the December 2013 issue of the Monthly Statistical Bulletin (MSB), the set of Monetary and Banking data pertaining to the balance sheets of financial institutions (excluding tables related to loans/financing) has been revised from 2007 onwards….
...Nevertheless, users should recognise that there is a break in the historical trend between December 2012 and January 2013, especially when studying components at a more granular level.
For Monetary Aggregates (Tables 1.3, 1.3.1 and 1.3.2), data items where possible, have been aligned to meet the existing conceptual definitions. Starting January 2014, the compilation uses data collected based on the new taxonomy, which will result in a break in the historical series. In order to facilitate trend analysis, a one year back series data consistent with January 2014 has been published in the MSB.
The data revisions are all to the good, especially since it will help with cross-country comparisons.
but some of these changes will give me big headaches, especially the change in reporting from a gross to a net basis for bank balance sheets. It looks minor at a 2%-3%, but you’re fastidious about the data you use, stuff like this can drive you up the wall. There’s a half percent difference in monetary aggregates (between RM4-9b) between the old series and the new one as well. No wonder the reported growth rates looked a bit funny this month.
Oh well, there’s no stopping progress…
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