Topic Category: Economy

President Obama recently hosted the U.S.-Africa Leaders Summit in Washington, D.C. He welcomed over 40 African heads of state and their outsized entourages to what was a festive affair. Indeed, even the Ebola virus in West Africa failed to dampen spirits in the nation’s capital. Perhaps it was the billions of dollars in African investment, announced by America’s great private companies, that was so uplifting.

Monthly U.S. headlines trumpeting the death of inflation hide a painful truth for American families: rapidly rising food prices. News reports rarely mention this pain because the economists’ preferred inflation metric, so-called “core CPI,” omits both food and energy due to concerns about their volatility.

The Bureau of Economic Analysis (BEA) recently announced that it would start reporting a new data series as part of the U.S. national income accounts. In addition to gross domestic product (GDP), the BEA will start reporting gross output (GO). This announcement went virtually unnoticed and unreported — an unfortunate but not uncommon oversight on the part of the financial press. Yes, GO represents a significant breakthrough.

In 2013, U.S. Gross Domestic Product (GDP), at $16.8 trillion, was nearly twice China’s $9 trillion, according to the International Monetary Fund (IMF). But when adjusting for Purchasing Power Parity, which is estimated to reflect the “real cost of living” across countries, China’s economy is projected to surpass the United States’ later this year, says the International Comparison Program (ICP). Is this realistic?

A new power boom from a seemingly unlikely source is taking hold across the globe. As greater oil and natural gas production output capture headlines, global hydroelectric power generation is expanding at an historic rate. Spurring this growth is the World Bank which has committed funds to dozens of global hydro projects in Africa, South Asia, and South East Asia, according to the Washington Post.

The summer driving season is still weeks away, but rising U.S. gas prices are already back in the news. Recently, the average price for regular gasoline at U.S. gas stations hit $3.6918 a gallon — the highest since March 22, 2013 and up 43 cents this year. Much of this price depends on global supply and demand, but certainly not all of it.

In the decade following the horrors of World War I, peace was celebrated at every opportunity. The supporters of a bridge connecting Buffalo and Fort Erie, Ontario, seized upon that tide and in 1927 the Peace Bridge was born. Today it is operated by the Public Bridge Authority. It is ironic that a bridge passionately dedicated to peace has in recent years ignited a war between those who see it as an engine of commerce driving perhaps the largest sector of our economy and others who see it as a threat to the health of those living nearby.

In the wake of the Edward Snowden revelations, many nations expressed shock and dismay over the mass surveillance of their citizens and governments. In turn, on March 12 the European Union (EU) Parliament passed a resolution and new law relating to data privacy. This will have profound implications for every U.S. tech company, as well as anyone who uses the internet.

The key question facing policymakers in 2014 will be how to energize the economy and lower the rate of unemployment while avoiding another financial crisis caused by asset price inflation and a misallocation of credit. The Fed seems concerned with deflation, but the real risk is that the Fed’s bloated balance sheet, and the extraordinary run-up in the monetary base during the last five years, will begin to show up in inflationary increases in the monetary aggregates.