The anxieties of the rich
The crisis – did it hurt high-earners? It did, says a new paper (pdf) from the OECD, but not for long. In nine OECD countries for which data are available, the top 1% of earners saw their incomes slide by 3% in 2008, followed by an even bigger fall of 6.6% in 2009. But as the incomes of high earners tend to be very responsive to economic swings, these sorts of declines in a recession aren’t such a surprise. Indeed, by 2010, the worst was over: The incomes of the top 1% rose by 4% while pretty much everyone else’s stagnated.
In the US, for example, the share of pre-tax income wending its way to the top 1% more than doubled since 1980, hitting 20% in 2012. There were notable rises in other (mostly) English-speaking countries, too, notably Australia, Canada, Ireland and the UK. More surprising, the 1% in traditionally egalitarian economies like Finland, Norway and Sweden also saw rises in their share of income, although at around 7 to 8% they were well behind US levels. Read more
OECD Economic Outlook: Global economy strengthening but significant risks remain
The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to theOECD’s latest Economic Outlook launched at this morning at the Ministerial Council Meeting and Forum in Paris.
Among the major advanced economies, recovery is best established in the United States, which is projected to grow by 2.6% in 2014 and 3.5% in 2015. The euro area will see a return of positive growth after three years of contraction: 1.2% in 2014 and 1.7% in 2015. In Japan, growth will be dented by the launch of much-needed fiscal consolidation measures, and is expected to hover at 1.2% in 2014 and 2015.
The BRIICS (Brazil, China, India, Indonesia, Russia and South Africa) are projected to see GDP growth of 5.3% this year on average and 5.7% in 2015. China will again have the fastest growth among these countries, with rates just below 7.5% in 2014 and 2015.
Cutting the Gordian knot in SME financing: the power of information
The crisis saw traditional channels of credit for SMEs drying up or becoming restricted. Deleveraging became the order of the day for governments, consumers and banks. And yet, although many SME managers think that banks won’t lend to them, a recent ECB/EC SME survey suggests that nearly two-thirds of SMEs in the EU who applied for external finance got everything they applied for. The actual bottleneck comes from increasing interest rates and even more so increasing non-interest related costs (fees, charges, commissions) which make bank loans increasingly unattractive for SMEs.
Tackling spectrum crunch: is more sharing the answer?
The spectrum used for mobile communications in the United Kingdom alone was worth USD 48 billion in 2011 according to this study. In turn, the mobile industry also supports a supply chain of infrastructure, equipment, applications and content providers, generating revenue of around USD 32 billion a year in the UK. But if the Internet economy is to continue to develop, more spectrum will be needed to accommodate the growth in smartphones and other wireless devices.A new OECD report looks at new approaches to enhance spectrum management to make more spectrum resources available for wireless communication services to meet current and future demand and, at the same time, increase the efficiency in its use.
Meet the family!
Across OECD countries, just under three out of five households are made up of a mom, dad and kids, according to the OECD Family Database. People living on their own account for more than a quarter of households and single-parent households for around a tenth. The remainder is accounted for by extended families with grandparents, families living with other families and other arrangements. Read more
Cool Japan: An Enterprising New Model?
Japan may be on the cusp of a fresh wave of “cool entrepreneurship” that could turn the country’s creative industries into a new source of growth. OECD Observer Article
OECD Forum 2014 Highlights
OECD Observer Feature