The Unassuming Economist

From McKinsey:

“Our newest McKinsey Global Institute (MGI) report, The next big arenas of competition, tells the story of “wizard” industries that grow at fantastic rates, spawn giants, and even shape-shift. We call them “arenas of competition,” and in the past 20 years, they have come to permeate the global economy.

“If I wind back the clock to 2005, the top ten titans of industry were oil companies, retailers, pharmaceuticals…and one software company, Microsoft. The average market cap was $250 billion,” recalls Chris Bradley, a McKinsey senior partner and MGI director. “Today, nine out of the top ten have been replaced by companies that are giant—eight times bigger in value—at 1.9 trillion, and almost all are driven by new technologies and business models. Under our noses, there’s been this radical shift in the industrial landscape, and we wanted to understand why and what it looked like.”

The report identifies 12 thriving arenas that began in 2005 and previews 18 that we think could shape the future. Here, four authors, Chris; Kweilin Ellingrud, a McKinsey senior partner and MGI director; Kevin Russell, an MGI senior fellow; and Suhayl Chettih, an engagement manager, share insights from the research.”

Continue reading here.

From mint:

“There is a strong business case for inclusive leadership. Research carried out by BCG points out that inclusive leaders cut down employee attrition risk by as much as 76 per cent. Reports over the years have also correlated diverse leadership teams to not only a boost in morale, productivity, psychological safety, and belonging which results in talent retention, but also a significant improvement in financial performance.

While year-on-year business growth remains critical, McKinsey’s latest study also highlights how organisations today are keen on driving holistic impact. This values the interests and needs of all stakeholders – employees, customers and investors. Moreover, with GenZ entering the workforce, prioritising ESG goals, and a shift towards sustainable, inclusive growth become part of this changing picture.”

Continue reading here.

Walkways, Not Walls | There are benefits to better connecting macroeconomics with real estate economics | Prakash Loungani 

The Housing Affordability Crunch | A newly developed dataset shows how the pandemic’s aftermath ushered in the worst housing affordability crisis in more than a decade | Deniz Igan 

The True Cost of Living | Sharply higher borrowing costs, especially for housing, fueled a disconnect between inflation statistics and consumer sentiment | Lawrence Summers, Marijn Bolhuis, and Judd Cramer 

China’s Real Estate Challenge | Sliding property prices may presage a painful economic adjustment | Kenneth Rogoff and Yuanchen Yang 

São Paulo Reclaims Its Center | Brazil’s megalopolis combines federal and municipal programs to retrofit buildings in the downtown area | Elizabeth Johnson 

Housing Africa’s Growing Population | Deeper understanding of informality and better use of technology can build more sustainable housing markets | Kecia Rust 

How To Spot Housing Bubbles | Early detection and mitigation can help deflate asset bubbles before they burst | Enrique Martínez García 

Housing Markets and Monetary Policy | Comprehensive, country-specific understanding of housing and mortgage markets can help calibrate monetary policy | Mehdi Benatiya Andaloussi, Nina Biljanovska, and Alessia De Stefani 

Falling Out of Favor | Some countries are turning against foreign buyers as soaring property prices become political | Maria Petrakis 

Hidden Fortunes | How dirty money distorts real estate markets | Chady El Khoury 

Back to Basics | Are housing markets broken? | Hites Ahir  

Picture This | A look at rising housing cost trend | Marta Doroszczyk

From a paper by Iyanuoluwa Fatoba and Adewumi Otonne:

“This study aims to investigate fiscal policy shocks’ impact on Nigeria’s Income Inequality and
Household Poverty. Using the impulse response function and variance decomposition technique
within the Bayesian Vector Autoregressive framework (BVAR), findings from the study show that
from year 2 to 15, a 1% shock to tax revenue (i.e., when taxes are suddenly changed) generates a
reduced average impact of 0.036% on household poverty. In contrast, household poverty increases
with shocks to government expenditure (i.e., when government expenditures are suddenly altered) in
the short run, with an average impact of 0.022%. In other words, household poverty increases in the
short run (years 2 to 4) and decreases in the medium to long run (years 5 to 15) with shocks to
government expenditure. Similarly, the results show that shocks to tax revenue reduce income
inequality (years 2 to11), and it increases the gap between the rich and the poor in the long run (years
12 to 15). Meanwhile, shocks to government expenditure increase the gap between the rich and the
poor in the short to medium run (year 2 to 6) while decreasing the gap in the medium to long run
(year 7 to15). The implication of these findings suggests that shocks to tax revenue directly benefit
low-income families and individuals in Nigeria. Moreover, as unanticipated alteration of government
expenditure increases household poverty and income inequality in the short run to medium run, any
shock to government expenditure (internal or external) should be combated with pro-poor policy
action.”

From a paper by Neha Gupta, Namita Sahay, and Miklesh Prasad Yadav:

“We analyse the asymmetric impact of oil prices on the stock markets of the BRICS nations. Employing the Nonlinear Autoregressive Distributed Lag (NARDL) model, we examine the weekly data spanning from October 29, 2010, to May 28, 2021 for West Texas Intermediate (WTI) spot prices in USD per barrel, alongside stock price data from official stock market indices websites. The findings reveal a substantial long-run association of oil prices with stock markets of BRICS nations except South Africa with significant asymmetry observed in both short and long-term impacts. Specifically, fluctuations in oil prices exhibit divergent effects on stock markets within these nations necessitating nuanced policy responses. Investors and portfolio managers are encouraged to adopt nonlinear models for forecasting and portfolio management leveraging asymmetric effects for risk mitigation strategies. These suggestions underscore the importance of recognizing the nonlinear and asymmetric nature of oil price dynamics in shaping investment decisions and formulating effective policy measures to mitigate associated risks in BRICS stock markets.”