Rubrics » Bridging News
The “Avenger” from SpaceX and Tesla
The main purpose of this essay is to highlight the life and the entrepreneurial journey of one the most influential people of the moment and how he permanently changed the world with his abilities and perception of things.Elon Reeve Musk was born on June 28, 1971, in Pretoria, one of South Africa’s three capital cities. His father is a wealthy and hard-working South African engineer and his mother is a Canadian former model (the oldest woman to appear in Covergirl campaign) and a nutritionist. In his early life, he grew up with his siblings, his brother Kimbal (currently an environmentalist and venture capitalist) and sister Tosca (now an award-winning producer and director). More
Remarks on the 2020 Romanian GDP Estimate – Reduced for the 3rd Time in the Official Forecast
The GDP 2020 estimate has been reduced for the third time in a row in the so-called Preliminary Autumn Forecast for the budget amendment published by the specialty National Commission. From an economic result of RON 1,141.4 billion according to the estimate issued in February, we went to RON 1,082.1 billion in April’s estimate, to RON 1,058.0 billion in August and now we reached RON 1,050.5 billion. More
Can Trade Wars Be Good for the Economy?
With the world economic community focused on US President Donald Trump’s acrobatics of escalating and deescalating trade battles, the question naturally arises if there’s actually any truth to his two-part statement, or tweet, that “trade wars are good, and easy to win”. Indeed, protectionism is an economic policy older than the science of Economics itself, but according to the classical theory of Smith and Ricardo it is just the oldest folly in the history of Economics. Modern neoclassical Economics incorporates and strongly validates the Smithian and Ricardian condemnation of protectionism, allowing deviations from it only in some exceptional and clearly specified situations. The explanation neoclassical Economics offers for the persistence of protectionism as a policy has changed however, replacing folly with a rational public choice theory of concentrated benefits for the beneficiaries and dispersed costs for those harmed. But is protectionism and its long history really just a folly? More
Japan and the European Union, Pushing Forward Free Trade
After concluding negotiations in December 2017, European and Japanese officials announced the world’s largest free trade agreement (FTA), which would remove almost 99% of the tariffs between the European Union (EU) and Japan. On July 17th, 2018, at the EU-Japan summit in Tokyo, the two parties signed the Economic Partnership Agreement (EPA), bringing it closer to implementation. The EPA has been praised by the EU trade chief Cecilia Malmstrom as “the biggest trade agreement we have ever negotiated for the European Union”. More
The Reference Social Indicator – Between Necessity and Moral Obligation
The Reference Social Indicator (RSI) comes to our attention after a ten-year period in which its value has not changed. The lack of political stability and, sometimes, the irresponsibility of governing parties creates the risk of deviating the value of RSI, established by political decision, from the economic, social and moral significance with which this indicator is invested.Considering the consequences generated by the possible arbitrary situation in setting the RSI value, it is necessary in the near future to identify a methodological anchor for the dynamic adjustment of the RSI value, avoiding the incidence of the political factor in this matter. It is therefore necessary to identify a relevant macroeconomic indicator for anchoring the Reference Social Indicator (RSI), so that its variation can be done automatically (via the automatic stabilization mechanism) without the conjunctural intervention of the political factor. More
Ruling over Central Banking…doms
The independence of the central banks – mysterious or miraculous entities in the eyes of masses – is practically an inexhaustible topic for scholars-economists and political scientists, as well as for business-persons and policy-makers.Still, the ultimate bill-payer of all institutional settings and governance organizations is the consumer-citizen.For this character this bell (of the debate) tolls. More
BNR’s Inflation Bias
The National Bank of Romania’s (BNR) recent decision to leave its interest rate unchanged, despite inflation surpassing the 4% threshold, has been justified as a prudent decision in the face of international uncertainties with adverse effect on growth and “preemptive” rate cuts in several advance and emergent economies, but it is also a testimony to the Bank’s inflationary bias and even of its shaky real policy independence. More
Taxation of Wage Earnings for Pension Purposes in Romania, since 1950
The income tax has increased about four times in Romania since 1950, according to data published by the National Institute of Statistics (INS). The evolution of gross and net earnings shows that we have reached a doubling compared to the period before the political regime change, which occurred in 1989 (see data presented in extenso and centralized by decades in the table below). More
WaitSafe in the Pandemic: How to Fluently Reconcile Social Distancing with Personal Mobility
The easing of the lockdown ignited with the advent of COVID-19 pandemic is still subject to strict conditions, as communities need to accommodate sanitary safety concerns with solutions for the freedom of movement for individuals, as the latter is a crucial feature for the “health” of the socio-economic fabric. More
Romania’s Public Debt Relative to GDP – Implications
The public debt officially measured by the Romanian Ministry of Finance based on the European methodology advanced, in July 2020 alone, almost as much as in the whole second quarter, when Romania was caught in the middle of the pandemic-induced crisis shock and the quarterly GDP decreased by 12.3% compared to the previous quarter. The explanation for the relative increase as a public debt share of GDP (2.1 percentage points in Q2 and 2 pp in just one month, July 2020) is not limited to the increase by about 40% of the additional monthly borrowed amounts (RON 13.5 billion compared to the monthly average of 9.7 billion in full pandemic), but also in the reduction of the reporting base by over RON 20 billion (approx. EUR 4.1 billion) as a result of the methodology used. More
Plus ça change, plus c'est la même chose
In his article “Opioids and Paternalism”, Dr. David Brown described the new face of American drug addiction, “the new underclass is stymied by economic obsolescence, a sense of victimhood, and an exaggerated view of its own physical damage”. One of my former professors used to say, “don’t re-invent the wheel unnecessarily” to convey the idea that one does not need to create new analyses and methodologies for every problem. In addition to Dr. Brown’s sound scientific and psychological observations, I believe that we may also look to history for enlightenment regarding the current malaise. More
How the Latest Trump Tariffs Will Affect Romania
On March 1st, US President Donald Trump announced that his administration will unilaterally introduce new tariffs on steel and aluminum imports in the United States of America. Officially motivated by national security concerns under the World Trade Organisation (WTO) rules, the announcement follows a similar decision to unilaterally introduce new tariffs on imported solar panels and washing machines, for reasons of unfair competition, taken at the end of January. Along with pressures for a redrawing of the North-American Free Trade Agreement (NAFTA) with Mexico and Canada and the retreat from the Trans-Pacific Partnership (TPP), the decision constitutes the most palpable expression to date of the United States’ new protectionist trade policy, to which Donald Trump alluded to since he was campaigning on an “America first” platform for the White House back in 2016. But unlike the solar panels and washing machines tariffs of a month and a half ago, which targeted primarily Chinese, South Korean and other Asian economies, the new steel and aluminum tariffs risk triggering a full-scale trade war with the European Union’s – still – 28 nations trade bloc, Romania included. More
