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Constantin Gurdgiev: True Economics

Constantin Gurdgiev, a Russian economist based in Dublin, is the creator of True Economics. His blog covers economic ideas and analysis on current news stories and global economic events. Given the level of detail, this blog is more suited for people familiar with intermediate macroeconomic concepts.

23/6/21: Covid19 Deaths and Income Inequality

An interesting, although intuitively straight forward note on the determinants of Covid19 deaths: As Youyang Gu @youyanggu states, "I believe income inequality is the single best predictor of total Covid deaths in the US. Not income, but income *inequality*. The R^2 is surprisingly high: 0.35."There are some potentially important issues with this analysis (some are explored here:...

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20/6/21: COVID19: Europe and EU27

Updating pandemic numbers for the past week for EU27 and Europe:As the charts clearly show, Europe experienced significant declines in new cases and deaths in recent weeks, in part due to improved rates of vaccinations.The third wave is now clearly behind us in both the EU27 and Europe, although European cases are remaining at much higher levels than those in the EU27. A similar pattern is evident in deaths.In terms of Covid19 mortality (deaths per 1,000 cases) the rate of mortality has been...

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19/6/21: COVID19: Worldwide Data

With some time passing since my last update, and the rates of vaccinations ramping up globally, it is easy to forget the simple, but devastating fact: we are still in a global pandemic. Here are the latest weekly totals for new cases and new deaths, worldwide:Just as the charts show,New cases have fallen significantly from the pandemic peak (Wave 4), but remain above the prior trough between Waves 3 and 4. New deaths recorded are still at extremely high levels, and showing an uptick...

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8/6/21: World is more VUCA. Less Risk.

 For those who have been my students in recent years none of this will come as a surprise: the world around us is becoming less 'risk-driven' and more 'VUCA-prone'. By VUCA, of course, we mean volatile, uncertain, complex and ambiguous. Here is a neat summary via McKinsey:None of the above data sets are 'risk' in any structured or definitional sense of that terms. None carry known, easy-to-define probability distributions, none have strictly identifiable impact distributions and none adhere...

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8/6/21: This Recession Is Different: Corporate Profits Boom

Corporate profits guidance is booming. Which, one might think, is a good signal of recovery. But the recession that passed (or still passing, officially) has been abnormal by historical standards, shifting expectations for the recovery to a different level of 'bizarre'.Consider non-financial corporate profits through prior cycles: Chart 1 above shows non-financial corporate profits per 1 USD of official gross value added in the economy. In all past recessions, save for three, going into...

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6/6/21: BRIC PMIs for May: Volatile Growth and Surging Inflationary Pressures

BRIC PMIs for May 2021 show uneven pace of recovery within the group of the largest Merging and Middle Income economies and a uniform evidence of pressure on inflation side.Brazil: Manufacturing PMI is currently running at 53.0 for 2Q 2021 for two months into the quarter, down from 1Q 2021 reading of 55.9. This marks second consecutive quarter of decreases in Manufacturing sector activity in Brazil. Brazil Services PMI is currently running at a deeper recessionary reading of 45.6, compared...

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5/6/21: Ireland PMIs for May: Booming Growth and Inflation Signals

 Both inflationary pressures and economic activity indicators are going through the roof in May, signaling a roaring run for 2Q 2021 growth. Manufacturing PMI for Ireland is up at 64.1 in May, compared to 60.8 in April. This is a historical high for the series, for the second month in a row.Services PMI for Ireland moved up from April's 57.7 to May reading of 62.1. This marks third consecutive month of above 50 readings, with all of these being statistically above 50.0 line. Construction...

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13/5/21: BRIC Composite PMIs April 2021: Recovery Fragile, Inflation Heating Up

April PMIs for BRIC economies show continued strengthening in the recovery in China and Russia, moderation in the recovery momentum in India and deepening collapse in the recovery in Brazil.Since we are into the first month of the new quarter, there is not enough data to go about to meaningfully analyze quarterly dynamics. Hence, I am only looking at Composite PMIs:PMIs in April run stronger, compared to 1Q 2021 averages for Russia (Services only), and China (Services and Manufacturing),...

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