GDP and Other Mysteries

The statistics that drive our big-picture economic thinking — GDP, unemployment figures, and inflation rates, among others — have come to be regarded as nearly sacrosanct. Investors, policymakers, and everyday consumers rely on them to make decisions trivial and earthshaking alike, often measured in trillions of dollars. Zachary Karabell, in his book The Leading Indicators: A Short History of the Numbers That Rule Our World, traces the history of these numbers and questions how useful they actually are.

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Lead, America, or Get Out of the World’s Way

The United States is doing a poor job of leading the global economy. But apparently we won’t let anyone else lead it either. In a world increasingly defined by the global flow of goods and services, Washington finds not just curiously adrift but actively at odds with itself and a coherent approach.

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Right Said Fed

Last week, Federal Reserve Chair Janet Yellen held her first press conference, where just a few brief words managed to upend the financial markets. When asked about the possible timing of raising short-term interest rates, she explained that there would be a “considerable period” between the end of the bond buying program—currently being wound down at a rate of $10 billion a month—and an increase in rates. What’s “a considerable period”? Nothing too specific, maybe “about six months.”

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After Words with Zachary Karabell

Zachary Karabell talked about his book, The Leading Indicators: A Short History of the Numbers that Rule Our World, in which he argues that gross national product, balance of trade, unemployment, inflation, and consumer confidence should no longer be the primary basis for business plans or monetary policy. He argued that the information revolution has made considerably more data available. He spoke with Wall Street Journal reporter Kimberly Strassel.

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If the World Is Getting Richer, Why Do So Many People Feel Poor?

In a widely-read statement in his annual foundation letter, Bill Gates took an unabashedly optimistic approach to the world this week. Not only did he tout the massive material progress evident everywhere in the world over the past decades, but he also predicted that as more countries accelerate their transformation from rural poverty to urban middle class societies, poverty as we know it will disappear within the next two decades. “By 2035, there will be almost no poor countries left in the world,” Gates wrote. “Almost all countries will be what we now call lower-middle income or richer.”

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Bitcoin: Bubble? Maybe. The Wave of the Future? Definitely.

Bitcoin. The world’s newest and hottest virtual currency. It has become the story du jour for a financial media hungry for stories, and its sudden surge in recent weeks, going from a price of less than $200 barely a month ago to $1,200 last week, certainly attracted attention. And of course, rarely do things gain so much so fast without a concomitant fall.

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The Youth Unemployment Crisis Might Not Be a Crisis

There’s no doubting that worldwide, kids are out of work. In the United States alone, the unemployment rate for 15 to 24-year-olds is about 16 percent, nearly twice the national average. In parts of Europe, the figures are much worse, with a whopping 56 percent youth unemployment rate in Spain alone — representing about 900,000 people. But do these high numbers represent a global labor market crisis that imperils future growth, as the headlines warn? Maybe not. Maybe instead, they’re evidence of a generation of college graduates determined not to settle, which bodes well for our future.

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The Upside of a 'De-Americanized' World

This current bout of Washington absurdity has reached its denouement, for now. Though resolved for the next few weeks, these debates seem certain to continue, especially with the debt compromise only good until February. Overall, the result has been to accelerate a trend that has been gathering steam for at least the last five years: the move away from a Washington-centric world and towards a new, undefined, but decidedly less American global system.

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Zachary Karabell: U.S. - China Relations

After more than a decade of intimate economic relations, China and the United States have become deeply intertwined. Historian Zachary Karabell maintains that while neither country is fully at ease with this partnership, the occasional tension over intellectual property, human rights, and regional strategy pales in comparison to the deepening and on-going economic bonds that tie the two countries together.

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Obama and Xi's weekend getaway

This weekend, President Obama and China's new leader Xi Jinping will meet at a retreat outside of Los Angeles. The two men are scheduled to spend six to seven hours covering a range of issues that confront the two countries, from the increasingly fraught issue of hacking and cybersecurity to what to do about an evermore unpredictable and rogue North Korea.

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