Global ETF News Older than One Year
The Fiscal and Financial Risks of a High-Debt, Slow-Growth World
March 28, 2024-Higher long-term real interest rates, lower growth, and higher debt will put pressure on medium-term fiscal trends and financial stability
Inflation-adjusted interest rates are well above post global financial crisis lows, while medium-term growth remains weak. Persistently higher interest rates raise the cost of servicing debt, adding to fiscal pressures and posing risks to financial stability.
Decisive and credible fiscal action that gradually brings global debt levels to more sustainable levels can help mitigate these dynamics.
Public debt sustainability
Debt sustainability depends upon four key ingredients: primary balances, real growth, real interest rates, and debt levels. Higher primary balances—the excess of government revenues over expenditures excluding interest payments-and growth help to achieve debt sustainability, whereas higher interest rates and debt levels make it more challenging.
For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.
Source: imf.org
IMF Working paper-Global Value Chain and Inflation Dynamics
March 22, 2024-Summary:
We study the inflationary impacts of pandemic lockdown shocks and fiscal and monetary stimulus during 2020-2022 using a novel harmonized dataset of sectoral producer price inflation and input-output linkages for more than 1000 sectors in 53 countries. The inflationary impact of shocks is identified via a Bartik shift-share design, where shares reflect the heterogeneous sectoral exposure to shocks and are derived from a macroeconomic model of international production network.
First, using a simple three-period model, we show how policy delay worsens inflation outcomes, but can mitigate or even reverse the output decline that occurs when policy responds without delay. Then, using a calibrated new Keynesian framework and two measures of loss that incorporate a "balanced approach" to weigh inflation and the output gap, we find that loss is monotonically increasing in the length of the delay. Loss is reduced if policy, when it does react, is more aggressive. We find that pandemic lockdowns, and subsequent reopening policies, were the most dominant driver of global inflation in this period, especially through their impact on aggregate demand. We provide a decomposition of lockdown shock by sources, and find that between 20-30 percent of the demand effect of lockdown/reopening is due to spillover from abroad. Finally, while fiscal and monetary policies played an important role in preventing deflation in 2020, their effects diminished in the recovery years.
Source: imf.org
World Happiness Report 2024: Most comprehensive picture yet of happiness across generations
March 20, 2024-Fresh insights from the World Happiness Report 2024, released today (March 20), paint the richest picture yet of happiness trends across different ages and generations.
The findings, announced today to mark the UN's International Day of Happiness, are powered by data from the Gallup World Poll and analysed by some of the world's leading wellbeing scientists.
Experts use responses from people in more than 140 nations to rank the world's 'happiest' countries. Finland tops the overall list for the seventh successive year, though there is considerable movement elsewhere:
Serbia (37th) and Bulgaria (81st) have had the biggest increases in average life evaluation scores since they were first measured by the Gallup World Poll in 2013, and this is reflected in climbs up the rankings between World Happiness Report 2013 and this 2024 edition of 69 places for Serbia and 63 places for Bulgaria.
The next two countries showing the largest increases in life evaluations are Latvia (46th) and Congo (Brazzaville) (89th), with rank increases of 44 and 40 places, respectively, between 2013 and 2024.
Source: worldhappiness.report
World Happiness Report 2024: Most comprehensive picture yet of happiness across generations
March 20, 2024--Fresh insights from the World Happiness Report 2024, released today (March 20), paint the richest picture yet of happiness trends across different ages and generations.
The findings, announced today to mark the UN's International Day of Happiness, are powered by data from the Gallup World Poll and analysed by some of the world's leading wellbeing scientists.
Experts use responses from people in more than 140 nations to rank the world's 'happiest' countries. Finland tops the overall list for the seventh successive year, though there is considerable movement elsewhere:
Serbia (37th) and Bulgaria (81st) have had the biggest increases in average life evaluation scores since they were first measured by the Gallup World Poll in 2013, and this is reflected in climbs up the rankings between World Happiness Report 2013 and this 2024 edition of 69 places for Serbia and 63 places for Bulgaria.
Source: worldhappiness.report
World Happiness Report 2024: Most comprehensive picture yet of happiness across generations
March 20, 2024--Fresh insights from the World Happiness Report 2024, released today (March 20), paint the richest picture yet of happiness trends across different ages and generations.
The findings, announced today to mark the UN's International Day of Happiness, are powered by data from the Gallup World Poll and analysed by some of the world's leading wellbeing scientists.
Experts use responses from people in more than 140 nations to rank the world's 'happiest' countries. Finland tops the overall list for the seventh successive year, though there is considerable movement elsewhere:
Serbia (37th) and Bulgaria (81st) have had the biggest increases in average life evaluation scores since they were first measured by the Gallup World Poll in 2013, and this is reflected in climbs up the rankings between World Happiness Report 2013 and this 2024 edition of 69 places for Serbia and 63 places for Bulgaria.
Source: worldhappiness.report
JPMorgan Asset Management plans to manage $1 trillion in active exchange-traded funds within five years
March 19, 2024--March 19, 2024--JP MORGAN Asset Management (JPMAM) chief executive George Gatch has set an ambitious target to expand assets in the group's active exchange-traded funds (ETF) business by more than five times to US$1 trillion in five years, from the current US$164 billion.
Speaking at its international media conference in London last week, Gatch said the growth of actively managed ETFs, in a space dominated by passive index trackers, is "one of the most fundamental changes in the asset management market".
Source: businesstimes.com.sg
Passive funds leave actives languishing
March 15, 2024--Assets in US index-trackers now outstrip those in stock selectors as investors opt for a smoother ride
Water can dramatically change the landscape, as the slow but steady process of erosion creates cliffs, caves and oxbow lakes.
A similarly remorseless transformation has been occurring in the fund management industry as active managers (those who like to select stocks) have been outcompeted by passive managers (those who track an index).
It was a sign of the times at the end of last year when the amount of assets invested in US passive funds reached $13.3tn, according to Morningstar, just pipping the $13.2tn invested in active funds. Another signal in January was the decision of Abrdn, the active manager, to shed a tenth of its staff in a cost-cutting exercise, having previously lost most of the vowels in its name.
Source: ft.com
Impact Investing Market Forecast to Reach $1061.14 Billion by 2028-In-Depth Research Report Released
March 12, 2024--The "Impact Investing Global Market Report 2024" report has been added to ResearchAndMarkets.com's offering.
The impact investing market has been witnessing exponential growth, fueled by increasing demand for sustainable investment opportunities and the strategic development of ESG-compliant products.
According to a recent market research report, which provides comprehensive insights into this dynamic sector, the impact investing market size is foreseen to experience a significant expansion from $478.15 billion in 2023 to an impressive $1061.14 billion by 2028.
Source: Research and Markets
How Inflation Radically Changes Economic Ideas
March 7, 2024-Inflation teaches us that supply, not demand, constrains our economies, and government borrowing is limited
The unexpected resurgence of inflation is a slap in the face, telling us that the consensus ideas of economic policy are wrong and need to change. Fortunately the "new" ideas we need are well tested and sitting on the shelf.
Inflation comes when aggregate demand exceeds aggregate supply.
The source of demand is not hard to find: in response to the pandemic's dislocations, the US government sent about $5 trillion in checks to people and businesses, $3 trillion of it newly printed money, with no plans for repayment. Other countries enacted similar fiscal expansions and reaped inflation in proportion. Supply is more contentious. Supply did shrink during the pandemic. But inflation spiked after the pandemic was largely over, and many "supply shock" industries were producing as much as before but could not keep up with demand.
Source: imf.org
Red Sea Attacks Disrupt Global Trade
March 7, 2024-In the first two months of 2024, Suez Canal trade dropped by 50 percent from a year earlier while trade through the Panama Canal fell by 32 percent, disrupting supply chains and distorting key macroeconomic indicators
In the past few months, global trade has been held back by disruptions at two critical shipping routes.
Attacks on vessels in the Red Sea area reduced traffic through the Suez Canal, the shortest maritime route between Asia and Europe, through which about 15 percent of global maritime trade volume normally passes.
Instead, several shipping companies diverted their ships around the Cape of Good Hope. This increased delivery times by 10 days or more on average, hurting companies with limited inventories.
On the other side of the world, a severe drought at the Panama Canal has forced authorities to impose restrictions that have substantially reduced daily ship crossings since last October, slowing down maritime trade through another key chokepoint that usually accounts for about 5 percent of global maritime trade.
Source: imf.org