Nov. 24, 2024 –When the US election was called for Donald Trump the night of November 5, the stock market rose but the bond market fell. The yield on 10-year US government bonds increased from 4.3 % to 4.4%, where it remained 10 days later. The long-term rate had been below 4.0 % in September. The combination – stock market up but bond market down – strongly suggests that the news of Trump’s victory was seen as implying higher government budget deficit and debt numbers in the future.
November 11, 2024 – The two areas where Donald Trump worries me the most are US foreign policy and long-run damage to norms of truth, democracy, and respect for the rule of law. But these areas are not top priorities for much of the American public. Rather, voters are consistently reported to be most concerned with the economy. They asked, “Are we better off than we were four years ago” and answered “no.” This is itself remarkable, since four years ago would be November 2020, when covid deaths were running 10,000 per week and unemployment was 6.7 %, versus 4.1 % today.
October 25, 2024 — Why have some countries grown rich and others not? The three winners of this year’s Nobel Prize — Daron Acemoglu, Simon Johnson and Jim Robinson — offered a one-word answer: Institutions. Specifically, “inclusive institutions,” which refers to an open society, accountable government, economic freedom, and the rule of law.
To illustrate concretely, the World Bank offers country-by-country indicators of six aspects of institutional quality: control of corruption, voice and accountability, government effectiveness, absence of violence, regulatory quality, and rule of law. At the top of the rankings are Denmark and Finland. At the bottom are Equatorial Guinea and South Sudan. Across a broad set of countries, these indicators are indeed highly correlated statistically with national income per capita.