Purchasing power parity theory – Kent Tribune http://kenttribune.com/ Mon, 18 Oct 2021 18:43:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://kenttribune.com/wp-content/uploads/2021/05/icon.png Purchasing power parity theory – Kent Tribune http://kenttribune.com/ 32 32 NZD outperforms, but only slightly higher https://kenttribune.com/nzd-outperforms-but-only-slightly-higher/ https://kenttribune.com/nzd-outperforms-but-only-slightly-higher/#respond Mon, 18 Oct 2021 18:43:00 +0000 https://kenttribune.com/nzd-outperforms-but-only-slightly-higher/

Trading for the new week started with mixed performance for stock markets, rising global rates, volatile energy markets and modest currency moves. There was more action in the New Zealand market, with rates rising after a huge print from the CPI, but resulting in only a modest gain for the NZD.

There hasn’t been much news overnight, but traders are watching energy markets closely, given their recent inflationary boost and the movement in gas and oil prices has been volatile. European gas prices experienced another roller coaster, jumping another 15% before falling again. There were few signs that Russia was helping to support the market, with no signs that Gazprom was looking to reserve additional gas transit capacity through Ukraine or Poland and its gas export data showed a decline so that domestic demand in Russia was increasing.

Oil prices hit new multi-year highs, with Brent crude hitting $ 86 a barrel and WTI almost at $ 84, before slumping slightly for the day, both just a few dollars off their highs. Bloomberg reported that the global oil supply deficit had worsened after OPEC + cut production 15% deeper than expected in September, after a 16% deficit in August, according to delegates with knowledge of the topic. This reflected the inability of some members to increase production to agreed volumes due to lack of investment, exploration and other issues.

US economic data has been mixed, with an unexpected drop in industrial production of 1.3% m / m in September attributed to the impact of Hurricane Ida as supply shortages hit the auto sector. Meanwhile, confidence among home builders in the United States unexpectedly rose in October, despite rising materials prices and supply shortages.

Released yesterday, China’s economic activity data for September and the third quarter were mostly on the lower expectations side, with GDP growth of 4.9% year-on-year. The economy is grappling with a number of headwinds, including lockdown restrictions as well as its zero tolerance for COVID19 outbreaks, a weaker real estate sector and the energy crisis that has resulted in power cuts and shutdowns of ‘widespread factories.

US equity futures were weaker during the Asian trading session and the S & P500 opened some 0.5% weaker before returning to positive territory, now up 0.2%. Previously, the Euro Stoxx 600 index closed down 0.5%.

Global rates continue to climb as traders contemplate a tightening of monetary policy ahead. US rates are higher across the curve, led by the stomach. The 10-year rate hit a high of 1.62%, before taking off, to fall back to 1.58%, up 1bp for the day and slightly lower from the New Zealand close.

A number of global investment banks have advanced their calls for rate hikes in the UK, which now forecast a hike as early as next month after BoE Governor Bailey said over the weekend that the central bank “will have to act” to prevent higher inflation expectations from becoming more entrenched. . The market is anticipating more than 100bp hikes over the next year and the implied tightening is even more significant, given the fact that the BoE has said it will stop reinvesting bonds held under its program. QE once the bank rate hits 0.5%.

Higher UK rates, with the 2-year bond up some 13 basis points, have done little to support the pound as traders fear the BoE may overreact to a rising supply-induced inflation amid key headwinds for the UK economy. . The GBP is down slightly to 1.3740. Most major currencies show little movement against the USD, contained within plus or minus 0.15%. The NZD was the best performer, rising 0.3% to around 0.7090, a modest but explainable performance in the face of soaring interest rates, as we note below. The NZD crosses are all slightly higher for the day, although the relative strength of the Euro means the NZD / EUR is fairly stable around 0.61.

Yesterday New Zealand had another monster CPI impression, with annual headline inflation of 4.9% and Statistics NZ’s core measures average of 4.1%. The RBNZ sector factor model estimate for core inflation, which moves slowly, has low volatility and is very slow to adapt to new trends, showed a record 0.3% increase in l Annual increase to 2.7% alongside upward revisions to recent data.

Inflation data far exceeded market expectations, even though most of us were ready for a big result. Inflationary pressures were widespread and included a 4.5% rise in non-tradable goods inflation, strongly linked to excesses in the domestic real estate market, a market normally considered to be under the control of monetary policy. The data provided further confirmation that monetary policy was overly accommodative and that the market rightly incorporated more rate hikes into the curve.

The OIS market moved to assess an almost equal chance of a 50 basis point increase in OCR next month and incorporated a further rise of around 25 basis points by the start of the market. next year. An OCR of more than 2% is now priced for the end of next year. All of this translated into higher swap rates and a steeper curve, with the 2-year rate rising massive 28bp to 1.93% and the 10-year rate up 15bp to 2, 49%. The NZGB curve showed a similar flattening bias.

The NZD has reacted sparingly to the data, which is not surprising given that high inflation is a double-edged sword. In fact, our estimate of the short-term fair value of NZD has fallen slightly, with higher rates not keeping up with higher inflation (real rates matter more than nominal rates). The purchasing power parity theory also means that higher inflation means a lower estimate of long-term fair value.

The data has been a wake-up call to RBA watchers, with a significant rise in rates on the Australian curve as the market now experiences a 25 basis point rate hike by August 2022 and two rate hikes. here the end of next year. The market will be watching RBA trading closely this week, after the April 24 bond moved away from the policy target of 0.1%. The market rightly sees policy tightening well ahead of the RBA’s rhetoric, which has always been that the bank doesn’t see the terms for a rate hike until 2024. This direction seems more ludicrous by the day as other central banks are tilting in a more hawkish direction.

Finally, Prime Minister Ardern announced that Auckland will remain on Level 3 Alert for at least two more weeks and at the end of the week some vaccination targets will be provided that will offer a conditional path to easing restrictions. . The current lockdown, which is strict by global standards, is expected to last much longer than initially expected, leading to widespread downward revisions to fourth-quarter GDP estimates.

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Blog: Favoring Salty and Spicy Foods Is A Sign Your Ancestors May Have Been Poor https://kenttribune.com/blog-favoring-salty-and-spicy-foods-is-a-sign-your-ancestors-may-have-been-poor/ https://kenttribune.com/blog-favoring-salty-and-spicy-foods-is-a-sign-your-ancestors-may-have-been-poor/#respond Thu, 14 Oct 2021 15:28:15 +0000 https://kenttribune.com/blog-favoring-salty-and-spicy-foods-is-a-sign-your-ancestors-may-have-been-poor/

The Big Mac Index is well known as an informal measure of countries’ economic standards and consumption capacities. But in fact, there is also the pickle index, the lipstick index and the ultimate indicator of everyday life – the regional index of food flavors. What do the saltier, bolder tasting foods of provinces like Hunan, Jiangxi, and Shandong, and the light and light flavors of Jiangsu Province say about the relative states of their regional economies?

After a recent thesis discussion, I had a meal with my students in the school cafeteria. One of the students who is not a local complained, “The food in the Hangzhou school cafeterias is just not salty enough. The dishes are mostly sweet. I once had dinner with my native friend from Hangzhou. All the meat dishes were seasoned with sugar. And none were spicy enough. His remarks are representative of many views on Jiangnan cuisine. Some students from Hunan, Jiangxi, and Shandong nodded.

As an economics teacher, I like to use examples from everyday life to sharpen the economics of my students. The way foods are flavored differently in various regions is undoubtedly a good subject of economics.

Light and lean

So, I asked, “If what you think of Jiangnan cuisine is true, then what are the economic characteristics of the regions that offer saltier and spicier foods?”

The students were silent for a moment. Then the student who commented on Hangzhou food earlier said, “I think the places with saltier and spicier cuisines are the ones that were underdeveloped in the past. Even so far, some of these areas may still be underdeveloped. “

The other students nodded in agreement, each supporting their claims with evidence. Even in Zhejiang, the eating habits of Hangjiahu Plain are different from those of the southwestern mountainous city of Quzhou.

Food from Jiangnan region is generally mild in flavor. If I put my finger on one specific preference that these people may have, it would be that they love sweet foods. But in an area so representative of Jiangnan region, like Zhejiang, there is a small town named Quzhou whose locals adore a contrasting style of spicy and strong flavors, a cuisine that has gained a solid reputation. The famous “three heads, one foot” (三 头 一掌) are a local specialty made from strongly spiced rabbit, duck and fish heads, as well as duck feet. Today, no one takes care of rabbit heads and duck heads. But because the standard of living was previously poor in the region, the poor ate duck heads and rabbit heads, and dishes featuring them gradually became local specialties.

Stronger flavors to overcome hardships

In ancient times, fresh vegetables, meat, and eggs were not widely available to the poor. So, in addition to loving spicy food, the poor also enjoyed salty foods. The savory and spicy flavors are actually formed by the trials of life.

If we measured the ratio of the consumption of spicy food in different regions to the total consumption of their respective residents, maybe we would see a map of China’s economic development. If we apply this map to a China of the past, it would be a more accurate description of the local economic situation. Indeed, after reform and opening up, while many regions experienced rapid development in a few decades, the eating habits of people formed over thousands of years could not be easily changed.

These habits are like an economic code: they reveal a person’s hometown and other historical and cultural information.

However, one of the students asked, “Today, whether we have lunch in Beijing, Shanghai, Hangzhou or Guangzhou, there are fondue restaurants and stalls selling spicy food everywhere. Are we saying that these regions are underdeveloped?

Certainly not. Even the student who asked the question was quickly answered by saying, “Ah yes, it’s because there are a lot of people like us who have come to live in the big cities from our respective hometowns. The student who complained earlier added: “Fortunately, there are many restaurants near the school that serve spicy and fragrant food. Otherwise our meals would be too simple and dull.

Caught in a pickle

“Fuling zhacai” (榨菜, pickled mustard) is a specialty of the Fuling district in Chongqing. Featuring a mustard plant native to the neighborhood, it is a local specialty made with a particular technique. Along with pickled cucumber from France and sweet and sour red cabbage from Germany, it is among the three most famous pickled foods in the world. Because it is so unique, it is one of the most popular dishes among migrant workers as it gives them a taste of home. Therefore, changes in Fuling zhacai’s sales patterns often reflect trends in population mobility, especially the flow of rural migrant workers to cities. This in turn reflects changes in regional economies and labor migration trends.

Pickled mustard. Photo: VCG

Therefore, China has formed a unique index illustrating the trends in population mobility called the “pickle index”. This can be used to infer trends in population mobility based on changes in sales volumes of popular Fuling zhacai in various regions over a few years and later to determine the population in and out of a particular region. In this way, the competent authorities would be able to formulate the policies best suited to the region on the basis of various population structures. For example, following the financial crisis of 2007-2008, the sales volume of Fuling zhacai in southern China declined year-on-year from 49% in 2007 to 29.99% in 2011. This suggests that the population of the southern China after the financial crisis was fast.

Besides the pickle index, which is packed with Chinese flavors, there are other indexes that measure economic volatility, such as those jokingly called “lipstick index” and “hemline index”.

Other lifestyle indicators

The lipstick index was proposed by Leonard Lauder, the former CEO of The Estee Lauder Companies. Analyzing actual data on the company’s revenue, Lauder found that during the recession of the 1990s, lipstick sales in the United States had actually risen against the tide.

The lipstick index shows that when the economy is in recession, consumption is reduced due to the economic downturn. This indicates that women are becoming cautious about their spending, allowing themselves to buy only relatively cheaper cosmetics such as lipstick. So, the worse the economy goes, the better the lipstick sales.

Economists seem to think the lipstick index is not a good indicator of an economic downturn and often treat it as a joke. But many people think it is an inverse indicator of economic development. However, the economic recession caused by the Covid-19 pandemic since 2020 could refute the index. Indeed, everyone wore face masks during the pandemic, so there was less need to wear lipstick. McKinsey tracked beauty sales on Amazon for a four-week period between March and April 2020. He found retail sales in the ‘lip care and color’ category fell 15% – the largest ever decline – with prices falling by 28%. .

Closely linked to economic prosperity is the direction of the stock market, which in turn is predicted by the Hem Index, also known as the “bare knees, bull market” indicator. The American stock market was quite slow in 1900, and American women’s skirts were very long, which seemed quite simple and boring. Before the Great Depression of 1929, women’s hems had increased but fell again when the economic crisis hit.

It has been said that the American who discovered this index believed that the emotions of women reflected the career plight of bankers and investors – when the stock market is sluggish, investors are dejected and less likely to notice the appeal of investors. women. But as soon as the stock market improves, women’s clothing will naturally become sexier as men’s attitudes change. Without a doubt, there is an assumption implicit in this story that bankers and investors are mostly male.

Notes of coffee with milk

Pickle Index, Lipstick Index, and Hem Index are just simple economic metrics that never really get taken seriously. However, the Big Mac Index – another informal economic indicator – has actually entered macroeconomics textbooks. The index was invented by the British financial weekly The Economist in 1986 and is published annually as a “light guide” to whether currencies are at their correct level based on the power parity theory. purchase (PPA).

Assuming a floating exchange rate is allowed, PPP, as defined in The Economist’s Big Mac Index, is the notion that “in the long run, exchange rates should move towards the rate that would equalize price of an identical basket of goods and services ”in any two countries. But how do you choose what goes into this identical basket? After all, each country has different production capacities for different products, and putting different products in that basket would lead to different results.

McDonald’s has become a symbol of globalization, and the price of a Big Mac allegedly reflects the economic level and consumption capacity of the country. The reason the Big Macs were chosen is that this product is available in many countries, its product specifications are the same almost everywhere, and local McDonald’s dealers negotiate their own prices for the raw materials. These factors allow a more meaningful comparison of the currencies of various countries and provide an informal assessment of their PPP.

In 2004, The Economist developed its Tall Latte Index, similar to the Big Mac Index, except that McDonald’s Big Mac is replaced by Starbucks Big Latte. The emergence of this index is not only based on Starbucks’ successful global expansion, but also on the highly globalized coffee bean trade. The Big Mac index therefore ranks poorly compared to the Tall Latte index in terms of precision.

All aspects of economic life come together to form an organic whole. The intricacies of many great economic fluctuations actually manifest themselves in seemingly insignificant everyday experiences, which can then form an economic code. As long as we are observers, we will discover many of their secrets.

Translated by Grace Chong of ThinkChina.

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Why the United States dominates the Nobel Prize https://kenttribune.com/why-the-united-states-dominates-the-nobel-prize/ https://kenttribune.com/why-the-united-states-dominates-the-nobel-prize/#respond Tue, 12 Oct 2021 08:17:36 +0000 https://kenttribune.com/why-the-united-states-dominates-the-nobel-prize/

Credit: PIXTA / CC0 public domain

More than eight of the 13 Nobel Laureates this year are American citizens, expanding the historic trend in the power of American universities and the ability to attract the world’s best talent.

American universities consistently dominate the “Global Top 100” rankings, with a mix of magnificent giving and a private “Ivy League” with leading state universities.

Since the first Nobel Prize was awarded in 1901, the United States has won 400 medals, followed by the United Kingdom with 138 medals and Germany with 111 medals. These figures include people from several countries.

“I am truly grateful for the opportunity given to me in this country,” said Ardem Patapoutian, co-winner of the 2021 Nobel Prize in Medicine for his work on neural receptors linked to touch in the United States. Is indicated as follows. Press conference after his victory.

An Armenian-American who grew up in Lebanon recognized his success with the state-funded system of the University of California, where he obtained a bachelor’s and post-doctoral degree, and the Scripps Institute, which has two bases . paddy field. Decades.

The University of California also has David Julius, a co-laureate from the University of California at San Francisco. In total, UC staff and faculty members won 70 Nobel Prizes. This is one of the totals earned by France, the fourth largest country.

Basic search

Atsushi Manabe, co-winner of this year’s Physics Awards, who left Japan in the 1950s for groundbreaking climate model research in Princeton, NJ, could go where curiosity has taken him in the United States. I told reporters that I was able to do it. To its success.

Co-laureate in chemistry, David McMillan is also a professor at Princeton University, which left Scotland for the United States in the 1990s and received a bachelor’s degree from Maria Ressa, who won the Philippino American Peace Award. in 1986. ..

Monday’s economics awards were shared by Canadian-American David Card, Israeli-American Joshua Angrist (both from Princeton University) and American-Dutch Guido Invens (Stanford University).

Funding basic research, defined as research aimed at improving understanding of scientific theory and subject matter, is at the heart of America’s victory, said David Baltimore, 1975 Nobel Prize in Medicine co-winner. I told AFP.

This is a “leak indicator”. Indeed, compared to applied research, dividends can often be paid unpredictably after years or decades.

“It is also the strength of our research institutes and universities that dates back to the founding of Harvard University centuries ago, and their continued support is uninterrupted,” said the California Institute of Technology. Baltimore, honorary president and distinguished professor of biology, added.

The emphasis on basic research in the United States dates back to the aftermath of World War II and the founding of the National Science Foundation in 1950. Federal funding I went to college today.

Philanthropy and private donations are also playing an increasingly important role in funding.

China is catching up with the United States in terms of total research funding ($ 469 billion vs. $ 569 billion adjusted for purchasing power parity in 2017), but challenges related to academic freedom and ability to attract talent that I have. American Chemical Society.

Reward young people and immigrants

Just as a wealthy country with a strong sports infrastructure dominates international competitions like the Olympics, being the world’s largest economy makes the United States a scientific powerhouse.

“For example, scientists will find more job opportunities not only in universities, but also in industry, government laboratories and other opportunities,” Chen told AFP.

Mark Kastner, professor emeritus of physics at MIT, added that American universities have long provided their own laboratories for talented young researchers.

“In places like Europe and Japan, there were large groups led by very experienced teachers, and young people only came in when they retired, and by then they no longer had their skills. better ideas. I don’t necessarily have it, ”he said.

For example, Harvard neurobiologist Catherine Dulac won the 2021 Breakthrough Prize for her research on parenting instincts, but it was precisely for this reason and for the sexism that she decided to return to France in her twenties. She told AFP last year that she refused.

Looking to the future, some fear that the decline in the number of immigrants could jeopardize American excellence.

Stefano Bertuzzi, who emigrated from Italy and is now CEO of the American Society for Microbiology, told AFP:

But lately he and Kastner have become concerned about the growing trend of foreign exclusion and nationalism, which is pulling the United States away from the destination of choice.

This is especially true for Chinese students who came under the scanner during the administration of former President Donald Trump due to espionage concerns.

Nobel laureate in physics says Italian research is underfunded

© 2021 AFP

Quote: Why the United States dominates the Nobel Prize (October 12, 2021) Obtained from October 12, 2021 https://phys.org/news/2021-10-states-domates-nobels.html

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Xi could be the answer to Biden’s prayers https://kenttribune.com/xi-could-be-the-answer-to-bidens-prayers/ https://kenttribune.com/xi-could-be-the-answer-to-bidens-prayers/#respond Mon, 04 Oct 2021 09:08:05 +0000 https://kenttribune.com/xi-could-be-the-answer-to-bidens-prayers/

(MENAFN- Asia Times) In his September phone conversation with US President Joe Biden, Chinese President Xi Jinping offered cooperation between their countries on climate change, the Covid-19 pandemic and economic recovery. Biden is expected to accept Xi’s offer, as it could be the answer to the President’s prayers.

History will say that cooperation brings prosperity while confrontation harms both the United States and China, but America more so.

Benefits of cooperation

A relatively fluid trade relationship between China and the United States had brought significant benefits to both countries. As America’s factory and market, China has brought economies of scale to American companies, increasing their competitiveness in the international market. China buying large amounts of American products, from foodstuffs to advanced semiconductor chips, has promoted and supported the financial viability of American companies. This has increased economic and employment growth in the United States and China.

China has benefited from US trade and investment, especially in terms of technological advancement and management know-how. The transfer of advanced technologies and management methods from US companies to their Chinese joint venture partners has improved production efficiency.

It can therefore be argued that the United States has played an important role in China’s rapid economic rise, helping it to become the world’s second-largest economy in terms of nominal exchange rate and the largest in terms of power parity. purchase in only about 40 years.

But that close relationship between the United States and China came to an end during the Trump presidency. Fearing that China’s rise to power poses a threat to national security, Donald Trump has declared a trade war, imposing tariffs on more than US $ 350 billion of Chinese goods. The excuses for the trade war were to reduce the US current account deficit with the Asian giant and bring US industry back home.

Impact of the clash

However, Trump’s policies backfired, harming the United States more than China. Tariffs have undermined economic growth because they have raised production costs and consumer prices in the United States. Even more ironically, tariffs actually increased the United States’ trade deficit and reduced manufacturing activity.

According to the International Monetary Fund, the Chinese economy grew by 6.8%, 2.3%, 8.5% in 2019, 2020 and 2021 respectively. Growth figures for the United States for the same period were 2.1%, -3.5% and 6.4% respectively. The pre-Trump annual growth figures were much higher, estimated at over 8%.

Trump banning Chinese-made tech products from the US market and US companies from selling semiconductor chips to China has slowed the Asian country’s technological advance. Preventing US companies from selling advanced chips and chip-making equipment to China, for example, has cost Huawei $ 30 billion in revenue and harmed its smartphone business in 2020.

But the company survived and remained profitable, seeing profits rise 6.5% in the same year, according to the company’s rotating chairman. Indeed, the company has broadened its field of activity, for example by adding smart cars to its business lines.

In addition, China has become the main destination for foreign direct investment (FDI) in 2020, estimated at more than $ 142 billion. The China Global Television Network (CGTN) reported on October 1 that China received an astonishing $ 442 billion in FDI in the first six months of 2021. Much of the FDI came from the United States. .

In short, China has withstood trade and technology wars well. Or at the very least, American companies are not in tune with their government on the “Chinese threat”.

Yet many Western pundits have pounced on each other to say that China is collapsing due to issues such as the Evergrande saga and power shortages. Whether these “experts” are right or wrong, time will tell. But history is not on their side.

The case of American-Chinese cooperation

It is clear that the United States being “tough” or creating conflict against China is shooting itself in the foot. Biden should therefore seriously consider his Chinese counterpart’s offer of cooperation on climate change, the pandemic outbreak and economic recovery.

China could certainly help the United States (and the world) curb the spread of the pandemic. His lockdown measures may seem “draconian” in the United States, but they have worked, giving the term “short-term pain for long-term gain” a whole new meaning.

China’s insistence that the origins of the virus be determined by science and that countries or regions that had the coronavirus before it appeared in Wuhan be investigated is reasonable. Finding the origins would help countries prevent another pandemic.

In other words, China has vast experience and expertise in combating the Covid-19 pandemic and other diseases. Accessing Chinese experiences and information would go a long way in stopping this pandemic and future ones.

The same goes for climate change. China is arguably the world’s largest developer and producer of green energy equipment. With help from China, Biden could more easily switch from fossil fuels to renewables. This would help the US president meet his emission reduction targets.

Resetting the US-China trade and investment relationship will be crucial, if not essential, for the US economic recovery. China’s comparative advantage in manufacturing has made American companies efficient and competitive in the international market. The huge Chinese market had absorbed huge amounts of American goods and services.

Ken Moak has taught economic theory, public policy and globalization at the university level for 33 years. He is co-author of a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.


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Definition of the Starbucks Index https://kenttribune.com/definition-of-the-starbucks-index/ https://kenttribune.com/definition-of-the-starbucks-index/#respond Sat, 02 Oct 2021 07:00:00 +0000 https://kenttribune.com/definition-of-the-starbucks-index/

What is the Starbucks Index?

The Starbucks Index refers to a purchasing power parity (PPP) measure that compares the cost of a large latte in local currency against the US dollar in 16 countries.

The purpose of the Starbucks Index is to show the purchasing power of each national currency represented, which is reflected in the cost of a latte in that country in US dollars. For example, a latte that costs significantly less in one country suggests an undervalued currency.

Key points to remember

  • The Starbucks Index measures purchasing power parity by comparing the relative prices of a large latte in 16 countries.
  • Purchasing power parity states that the prices of like goods in one country must be equal when valued in the currency of another country.
  • The index indicates that a currency is overvalued when a large latte costs more in US dollars in a country and undervalued when it costs less in dollars.
  • Originally created by The Economist, other publications have created their version of the index.
  • The index has limitations because it does not take into account several factors, including labor costs and economic conditions in each country.

How the Starbucks Index works

The Starbucks Index was created in 2004 by The Economist, a global publication, featuring a weekly print issue and online articles.

The Starbucks Index gives an overview of the exchange rates that should be based on the price of a large latte. It does this by comparing the price in several countries in US dollars. The theory suggests that a large latte in one country should cost the same in another country after the exchange rate is applied.

In other words, the two currencies are at par when the lattes have the same value in both countries. A currency is considered overvalued if the cost of a latte is more than the price paid by an American consumer in US dollars and undervalued if it costs less. Let’s say a large latte in the United States costs $ 3.50, $ 4.00 in China, and $ 1.50 in Thailand. According to the index, the Chinese renminbi would be considered overvalued against the US dollar, while the Thai baht would be undervalued.

Purchasing Power Parity allows you to compare prices between countries with different currencies, although it is not a perfect measure.

Purchasing Power Parity (PPP)

Purchasing power parity is a popular macroeconomic analysis measure used to compare economic productivity and living standards between countries. It compares different currencies through a basket of goods approach. This implies that two currencies are in equilibrium, which happens when the currencies are at par when a basket of goods is at the same price in both countries, taking into account the exchange rates between the two currencies.

Relative purchasing power parity (RPPP) may be a more precise measure. The RPPP takes into account the difference between the inflation rates of two countries (or the pace of the price increase) to determine the changes in the exchange rate between the two countries over time. The RPPP develops the idea of ​​purchasing power parity and complements the theory of absolute purchasing power parity.

Starbucks Index vs. Other Indices

Indices using other products, such as the Big Mac, and similar Starbucks indices, using the price of a large latte, were created to measure purchasing power between the United States and others. country.

The Wall Street Journal Latte Index

The Wall Street Journal compared prices in US dollars in more than a dozen major cities around the world with its own Latte Index based on prices in Starbucks stores. According to its latest post in 2018, the WSJ found that a latte cost $ 3.45 in New York City, $ 4.24 in Singapore and $ 5.76 in Zurich, Switzerland.

Finder’s Latte Index

The online publication Finder also has a Starbucks Index, which calculates latte prices in US dollars in 76 different countries. The most recent index was released in 2019. According to the results, a Starbucks large latte in New York City was the 16th most expensive.

Below are examples of latte costs in US dollars:

  • Denmark: $ 6.05
  • Singapore: $ 4.50
  • United States: $ 4.30
  • United Kingdom: $ 3.58
  • Canada: $ 3.15
  • Brazil $ 2.43

The study was corrected for the cost of labor and taxes. Northern Europe and Asia were two of the most expensive regions.

The Big Mac Index

The Starbucks Index is based on the Big Mac Index, which The Economist also launched, described as “a light guide to whether currencies are at their ‘correct’ level.”

The Big Mac Index – or Big Mac PPP – is used to measure purchasing power parity between nations using the price of a Big Mac McDonald’s as a benchmark. The Big Mac Index works the same as the Latte Index, replacing the Basket of Goods with the Big Mac. Although the cost of a basket of goods varies when comparing the United States to another country, the Big Mac is generally the same price in each country.

For example, in June 2021, The Economist reported that the Big Mac cost £ 3.49 in Britain, while in the US it cost $ 5.65, implying an exchange rate of 0 , 62 ($ 3.49 / $ 5.65). In other words, the index showed an exchange rate of 0.62 British pence to one US dollar. However, the real exchange rate was 0.73 British pence per dollar, and taking the difference he suggested that the British pound was 15% undervalued against the US dollar.

Starbucks Index review

Applying global comparison or product prices as a viable measure of purchasing power can be difficult. The indices do not take into account several variables when comparing currencies, including differences in product quality, consumer attitudes and economic conditions in each country.

Although the inputs to the products and the way they are produced and distributed are consistent across all countries, the Starbucks and Big Mac indices do not take into account differences in the following:

  • Costs associated with labor for store staff
  • The price of the storefront
  • Additional costs under the franchise license to operate the restaurant
  • Raw material costs, including store construction costs and various ingredients if locally sourced
  • Costs of importing and acquiring all necessary inputs, such as machinery and equipment

These factors can influence the price of Starbucks latte or the Big Mac, thus lowering the ratio relative to the cost of the US version of the product.

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Mandatory readings https://kenttribune.com/mandatory-readings/ https://kenttribune.com/mandatory-readings/#respond Thu, 23 Sep 2021 20:37:00 +0000 https://kenttribune.com/mandatory-readings/

I am not talking about the violence that happens to people who are not black. Of course, due to the richness of the Anti-Darkness, it doesn’t just affect black people, it affects everyone in the world, even those who benefit from it. And, I always write specifically about black people because they are my people, and because it is they who are at the heart of this violence.

I don’t like the term fatphobia. I think the way it has been used, since its popularization, has been very bastard. I think people use the word fatphobia and it trivializes all the weight of anti-fat violence. A lot of times you’ll hear fatphobia related to someone not being able to get into a club or something like that. All of those interpersonal things matter, sure, but anti-fat violence isn’t just your take that doesn’t give you extra weed or whatever. It’s a real, violent thing that has a very, very long history and permeates every part of our world.

I think anti-pregnancy kind of gets to the point – in a very similar way to anti-blackness – more than just talking about racism and fatphobia. When I think of those two words I think a lot about liberalism and how liberalism bastards language and removes all contexts and meanings from the language we use.

Born on an RAF base to Barbadian immigrant parents in 1963, June and Jennifer, the third and fourth of what would eventually be five children, were noticeably different from their peers almost from birth. Infants fought to be breastfed simultaneously. When they entered school in a Welsh village at age four they were reluctant, but by age eight, although they were reading and writing proficiently, they had simply stopped talking – to their teachers, to their classmates. class and even their parents, beyond a few non-verbal noises. and monosyllabic answers to routine questions.

Shyness, writes journalist Marjorie Wallace in her definitive book The silent twins, became the “charitable explanation” for their silence, although many sensed that something more sinister was going on. The most common theory was that Jennifer, the youngest by ten minutes and widely considered to be the least intelligent, was in control of her sister. “Jennifer was arresting June,” a therapist who treated the girls told Wallace. “I watched and could barely detect the slightest movement of my eyes, but I know she was stopping June.” One teacher even went so far as to call Jennifer “bad”. June and Jennifer were talking to each other in what sounded like quick gibberish, but they would even stop that if someone else entered the room. Eventually, an elective mutism specialist determined, after slowing down the audio recordings she made of their speech, that the twins spoke normal English but so quickly that it was unrecognizable to the average listener.

It is not uncommon for twins to develop their own language; rarely do they become as fiercely codependent as the Gibbons girls. They moved in languid tandem. The only physical activity they seemed to enjoy with ease was horseback riding, but if one fell, the other immediately followed suit. When bullied – which they probably would have been, as the only black kids in town, even if they hadn’t behaved so oddly – they huddled together with their arms on the shoulders, as if to erect a small fortress for two. An attempt at the special high school they were attending to separate them went disastrously: June, who was temporarily transferred to a mental hospital while her sister stayed at home, stopped eating and moving, even for wipe away the constant stream of tears that flowed over her. face.

A graceful Streamline Moderne designed by AC Martin and Samuel Marx and completed in 1939, the May Co. building was dubbed “the store of tomorrow” when it opened, casually marking the west gate of the Miracle Mile. Its main architectural element was a gleaming, multi-storey cylinder at its corner covered with gold leaf mosaic tiles, a shape that has been compared to a perfume bottle.

After May Co. closed the store in the 1990s, the building languished. But the team at Renzo Piano Building Workshop, Piano’s namesake architecture studio, gave new life to this beautiful structure. In combination with Geffen’s brash new theater, the architect redesigned the western edge of a multi-block cultural complex that also includes the La Brea Tar Pits & Museum, as well as the LACMA where he designed two other buildings: the Broad Contemporary Art Museum and the Resnick Pavilion.

This is not a trivial renovation and expansion.

Shakespeare’s Richard III arrived on a New York stage 200 years ago this month. This king stood before a black audience. And he was played by a black man.

He was the star of a production of the African Theater, widely regarded as America’s first black theater. The company’s lifespan was short – only two or three years – but its founder, performers, and heritage changed American drama.

The history of African theater reflects many conversations that still take place today around race and art form. How can black producers and artists get the support and resources they need to tell their stories? What does an exclusively black space look like?

Forgive my cynicism, but it is difficult to reconcile the dismay expressed by this incident by Harris and Mayorkas, both children of immigrants, with their past actions. In June, Harris traveled to Guatemala, where she laconically told Central Americans not to come to the United States. A month later, Mayorkas did exactly the same in Miami, issuing his warning to Cubans and Haitians considering sailing to Florida.

The United States government has been dealing with mass deportation for over a quarter of a century.

The hopeful ending is in keeping with Nas’ vision – it’s the same guy who supercut his videos garishly like the Marvel movies, after all. Yet even with occasional missteps, the album holds the promise of a new kind of pop star: an out-of-the-ordinary black rapper and singer who combines his omnivorous and genre music, outspoken lyrics, and social media knowledge. to triumph in an industry that threatened its authenticity from the jump. His music is always radio primed to work well alongside Olivia Rodrigo’s pop-punk or Doja’s earworm rap, but he uses both his music and his fame to explicitly carve out a unique space for himself. for queer people who feel as lonely as him growing up and emphatically insisting on a brighter future. With MONTERO, he is already building it for them.

Forty years later, in terms of purchasing power parity, China has almost caught up with Russian GDP per capita. This is true whether we are looking at the bottom half or the top fraction of the income distribution. Multiplied by its giant population, China’s GDP is now more than nine times that of Russia. Russia retains its powerful nuclear arsenal and is among the top three exporters of fossil fuels. But as a world power, it is now completely eclipsed by China. In the 1950s, it was aid from the Soviet Union that supported China during the Korean War and propelled Maoist industrialization. Today, it is Russia which regards China, both as its strategic and economic support.

What explains this shocking reversal of fortunes? China’s rise and Russia’s decade of humiliation both took place against the backdrop of the unipolar moment and the Washington Consensus. Neoliberal ideas were hegemonic. Western economists oversaw the disaster in Russia. In Russia and Eastern Europe, shock therapy – global and sudden price liberalization (also known as the Big Bang); fiscal austerity to consolidate budgets and reduce aggregate demand; and privatization – has become synonymous with the cruel recklessness of the market economy.

China, on the other hand, has benefited from globalization but has retained a high degree of autonomy in economic policy. It went much better. How did China escape? Why did the Soviet bloc succumb?

  • Katrina vanden Heuvel explains why we must break down the military-industrial complex that President Eisenhower warned us against:

And Pentagon officials regularly quit their government positions to sit on boards of directors or lobby on behalf of – you guessed it – defense contractors. A recent Government Accountability Office report found that between 2014 and 2019, 1,718 former senior defense ministry officials and procurement officials went to work for many of the country’s largest defense contractors. Generals have made their fortunes joining corporate boards to use their experience in leading a conflict that has spanned 20 years, cost taxpayers billions of dollars and claimed 176,000 lives. people – to fail in its main purpose. As columnist Eric Alterman writes, the question of who won the war on terror has a clear answer: “the ex-generals and admirals and other defense contractors who made millions out of it.”

The result is that decisions about whether or not to engage in military conflicts are shaped by people who have a vested interest in perpetuating those conflicts. The media regularly invite former military and public officials to comment on US defense policies, without revealing their financial interests in those policies. In just 10 days in August, retired General Jack Keane appeared 16 times on Fox News; Retired General Barry McCaffrey has appeared 13 times on MSNBC; and retired Army General David H. Petraeus has appeared six times on MSNBC, CNN and Fox News. Keane chairs a manufacturer of military vehicles, McCaffrey has a long history of not disclosing conflicts of interest, and Petraeus sits on the boards of two companies with defense interests.

The required reading is posted every Thursday afternoon and includes a short list of art-related links to long-form articles, videos, blog posts, or photo essays that are worth a second look.

Jenkins’ new short, the centerpiece of a MoMI exhibition on The Underground Railroad, uses his signature techniques to confront the viewer.

The new documentary Bob Ross: happy accidents, betrayal and greed draws the curtain to expose the realities of Bob Ross, Inc. but does it go far enough?

You don’t need a train ticket to see the five Bradford glass mosaic murals at the L train 1 Avenue stop.

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]]> https://kenttribune.com/mandatory-readings/feed/ 0 Equity measures for multi-capital accounting https://kenttribune.com/equity-measures-for-multi-capital-accounting/ https://kenttribune.com/equity-measures-for-multi-capital-accounting/#respond Mon, 20 Sep 2021 15:55:52 +0000 https://kenttribune.com/equity-measures-for-multi-capital-accounting/
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    How war and arms sales exacerbate global poverty https://kenttribune.com/how-war-and-arms-sales-exacerbate-global-poverty/ https://kenttribune.com/how-war-and-arms-sales-exacerbate-global-poverty/#respond Fri, 10 Sep 2021 07:00:00 +0000 https://kenttribune.com/how-war-and-arms-sales-exacerbate-global-poverty/

    Poverty has many roots, and it has many causes. but among these causes, war and arms sales are one of the greatest obstacles to development and poverty reduction. War and the arms trade may have fattened the pockets of some businesses and individuals, but millions of people have been plunged into poverty. Sociologists and economists argue that once a country experiences conflict, it faces a reversal in its economic development, because when war or armed conflict breaks out, its consequences extend far beyond casualties. Wars directly destroy homes, hospitals, businesses, schools, infrastructure and other national resources worth billions of dollars, resulting in low or negative economic growth, increasing unemployment which in turn creates poverty and worsens income inequalities.

    According to the Institute for Economics and Peace (IEP), the estimated economic cost of armed conflict, war and violence to the global economy in 2020 was $ 14.960 billion, in terms of power parity. purchase (PPA). This figure is equivalent to 11.6% of global GDP.

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    Today, in nearly 50 conflict zones around the world, around 1.5 billion people live under the threat of violence. These countries spend up to 59% of their GDP on the effects of violence. Syria, with its ongoing civil war, suffered the greatest economic impact with almost 60% of its GDP lost due to the conflict in 2019, followed by Afghanistan (50%) and South Sudan (46% ). From Syria to Yemen, from Haiti to Mali, from South Sudan to Venezuela, from Afghanistan to Myanmar, political crises, wars and armed conflicts have forced millions of people to flee their homes.

    According to the United Nations High Commissioner for Refugees (UNHCR) Global Trends Report, by the end of 2020, more than 8.24 million people have fled war or persecution. The report also confirms that only five countries account for more than two-thirds of all refugees: Syria (68 lakh), Venezuela (54 lakh), Afghanistan (28 lakh), South Sudan (22 lakh) and the Myanmar (11 lakh). These displaced people are forced to seek safety in neighboring countries, where they live in makeshift camps in horrific conditions, often struggling to meet basic needs such as health, education, food, shelter, etc. water and sanitation, to name a few.

    Today, about 9.2 percent of the world’s population, or about 68.9 million people, live in extreme poverty on less than $ 1.90 a day, according to the World Bank. Of the 17 Sustainable Development Goals (SDGs), ending extreme poverty by 2030 is part of a comprehensive global agenda, but the intensification of wars, armed conflict and violence suggests that the goal global goal of ending extreme poverty by 2030 will be missed by a large margin. New research estimates that the number of people living in extreme poverty is expected to reach around 75 crore by the end of 2021. Meanwhile, projections from the World Bank, the Organization for Economic Co-operation and Development (OECD ) and others estimate that by 2030, 50-64% of the world’s poor will live in countries affected by fragility, conflict and high levels of violence. Today, only a handful of economically and politically powerful global elites set the world’s rules. For several years, these powerful nations have been preaching “world peace”, but the question remains: are they really practicing what they preach?

    Take, for example, the United States, the world’s leading economic power. Since its birth on July 4, 1776, the country has been at war for 93% of its existence. As they try to be noble by claiming that they have gone to war because they are “fighting for justice”, “for democracy” or “fighting terrorism and dictatorship”, the whole world knows what the real motive behind these wars and conflicts is. , and who are the beneficiaries of these wars.

    According to new data released by the Stockholm International Peace Research Institute (SIPRI), arms sales by the 25 largest arms production and military service companies (armaments companies) totaled $ 361 billion. dollars in 2019. That year, the top five arms companies were all based in the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. These five companies together recorded $ 166 billion in annual arms sales. A total of 12 U.S. companies are in the top 25 for 2019, accounting for 61% of the combined arms sales of the top 25. These companies have benefited enormously from the growth in global military spending. SIPRI noted that global military spending in 2020 amounted to US $ 1,981 billion.

    The top five spenders in 2020, which together accounted for 62% of global military spending, were the United States, China, India, Russia and the United Kingdom, according to SIPRI. With an estimated military budget of $ 778 billion, the United States remained the world’s biggest spender in 2020, accounting for 39% of global military spending, followed by China ($ 252 billion, 13%), India ( $ 72.9 billion, 3.7%), Russia ($ 61.7 billion, 3.1%) and the United Kingdom ($ 59.2 billion, 3%). In 2019, the combined military spending of the 27 EU Member States amounted to € 186 billion.

    Following the terrorist attacks of September 11, 2001, the United States launched an international war on terrorism. A report from Brown University’s “Costs of War” project found that 20 years of post-9/11 wars cost the United States an estimated $ 8 trillion and more than 929,000 people, including the United States military, Allied fighters, opposition fighters, civilians, journalists and aid workers – have died as a direct result of the war. The report also confirms that the US wars after 9/11 forcibly displaced at least 38 million people in Afghanistan, Iraq, Pakistan, Yemen, Somalia, the Philippines, Libya and Syria. This number exceeds the total population displaced by every war since 1900, with the exception of World War II.

    Considering the current circumstances of the world, it doesn’t seem like a very pleasant place at the moment; there is too much hatred, conflict, war, double standards and hypocrisy. It is truly unfortunate that while billions of dollars are spent killing people, there is much less money spent on keeping people alive. The United States spent $ 2.26 trillion on its war in Afghanistan. Spending that kind of money in any country should have lifted most people out of poverty, but sadly, in 2020, 47.3% of the Afghan population was still living below the national poverty line.

    Recall that world leaders once pledged to “end poverty in all its forms everywhere” by 2030, and we are nine years away from that deadline. Interestingly, the SIPRI report states that military spending amounts to 2.3% of global gross domestic product and that 10% of that money would be enough to finance the global goals agreed by the United Nations to end poverty and to hunger by 2030.

    Therefore, if the so-called “saviors” of the world are serious about the goal of eradicating extreme poverty in the world and establishing peace and prosperity, then they must stop war and oppression now. , and change their mindset, attitude and policies in ways that can reduce international tensions. They must understand that war will never bring peace and prosperity to the world; it only adds to the hatred and enmity among nations and hinders efforts to alleviate poverty. The extreme poverty in our world could quickly become a thing of the past if only a portion of their monstrous military budgets could be diverted to humanitarian goals, investing in infrastructure such as the construction of schools, hospitals and hospitals. skills development institutions in countries in difficulty.

    Abu Afsarul Haider is an entrepreneur.

    Email: afsarulhaider@gmail.com

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    75 Years of Independent India Travel: Perspectives from Bangladesh https://kenttribune.com/75-years-of-independent-india-travel-perspectives-from-bangladesh/ https://kenttribune.com/75-years-of-independent-india-travel-perspectives-from-bangladesh/#respond Tue, 07 Sep 2021 07:00:00 +0000 https://kenttribune.com/75-years-of-independent-india-travel-perspectives-from-bangladesh/

    India, known as the Indian subcontinent for centuries, was a very rich region in terms of culture, economy and civilizations. For example, at the end of the 17th century, India’s share actually represented a quarter of the world economy. From history we see that Europeans came to this region to change their destiny. In fact, India had a rich maritime heritage and has played an important role in world trade and economy for centuries. A British scholar, John M. Hobson, in his book The Eastern Origins of Western Civilizations, argues that “until the end of the 18th century India was more powerful and more extensive than the great European powers.”

    So it was India, an economic power, a maritime power and certainly a soft power. But the 200 years of British domination and exploitation have caused India to decline in all parameters. Against British exploitation, India became a sovereign nation state on August 15, 1947. India’s independence in 1947 is a landmark event in world history. And as a citizen of Bangladesh, the independence of India is crucial for me for several reasons.

    First of all, I believe that if India had not been independent, Bangladesh might not have emerged as a sovereign nation state in 1971. Without India’s material, moral and diplomatic support, independence of Bangladesh would not be possible. It is important to note that 1, 6, 61 Indian soldiers sacrificed their lives for the liberation of Bangladesh. This is how the Indians fought for the independence of Bangladesh which is well recognized in Bangladesh. Moreover, when 10 million refugees from Bangladesh took refuge in various states of India, including West Bengal, the people of those states supported them wholeheartedly. The spirit of 1971 remains the cornerstone of Bangladesh-India relations.

    Second, From an “international hopeless case”, Bangladesh is today a miracle of development. And behind such success, we must also recognize India’s role over the past 50 years.

    Third, India is a versatile land with great geographic, linguistic, religious, cultural and ethnic diversity. In fact, the impressive development record, continued prosperity, stability, sustainability of the world’s largest democracy, strong democratic institutions, and a vibrant civil society, including media and academia, is an inspiring story for many. in the region and beyond. And to create an identity of the South Asian region on the international stage, Indian independence was crucial.

    Fourth, a stronger and prosperous India is good for the countries of South Asia and the region as a whole and beyond. During these 75 years, India has achieved impressive successes from agricultural production to nuclear and space technology, from Ayurveda to biotechnology. Thus, if India were not independent, it might not be able to excel in the fields of science, technology and innovations which have ripple effects in the region.

    Finally, the independence of India has value from the point of view of international relations. It must be remembered that India emerged during the period of the Cold War, where power politics predominantly dominated world politics. In such a context, India advocated for decolonization, argued for South-South cooperation and avoided aligning with power blocs. India emphasized peaceful international relations, a rules-based order. In fact, India played a crucial role in the success of the Bandung Conference of 1955. It should also be noted that India hosted the very first Conference on Relations with Asia in March-April 1947, precursor of the Bandung conference.

    I would like to stress here that by 2021, India must play a leading role as a regional power. As a citizen of Bangladesh, I believe there are some issues that can be taken into consideration on the occasion of India’s 75 years of independence.

    First of all, after 75 years of independence from India, I am convinced that India must focus more on its soft power than on its hard power. With around 1.35 billion inhabitants, investment in human development and human security is becoming necessary for India.

    Second, I think India needs to focus more on institution building in the region. In this case, it should be noted that India is doing a great job in promoting regional awareness through the University of South Asia. However, with the exception of the University of South Asia, we do not see as much success from SAARC. In fact, it won’t be wrong to claim that SAARC is not functioning well due to the Indo-Pakistani rivalry. In such a context, India can strengthen BIMSTEC. I think it is high time to move forward the Bay of Bengal region which has remained a conflict free region for years. There is also a need to strengthen the BRICS, the BCIM Economic Corridor and the Indian Ocean Rim Association, where India can play a crucial role.

    Third, there is increasing militarization in the Indian Ocean region which does not benefit any coastal state. In order to make the Indian Ocean region a zone of peace, India can play a leading role.

    Fourth, in 2015, Indian Prime Minister Narendra Modi launched Security and Growth for All in the Region (SAGAR) with a major focus on the maritime domain, which is very encouraging for the region. We can mention that maritime terrorism, piracy, armed robberies against ships, marine plastic pollution, climate change and ocean acidification, the emergence of dead zones, overfishing, IUU fishing are of serious concerns for the coastlines of the Bay of Bengal region including India. In this case, a regional approach becomes imperative where India must play an important role.

    Fifth, On February 8, 2019, the late and former Indian Foreign Minister Sushma Swaraj at the 5th India-Bangladesh Joint Consultative Committee Meeting mentioned that no less than 90 bilateral agreements have been signed between Bangladesh and the India since Narendra Modi’s 2015 visit to Bangladesh (Indian Ministry of Foreign Affairs, 2019). I would like to reiterate here that this was only possible thanks to a strong political will from Delhi and Dhaka to deepen the ties. And this enhanced relationship has impacted millions of people across borders. I still believe that strong political will is enough to change the South Asian region and the Bay of Bengal region, where India can play a crucial role.

    Sixth, I believe that nurturing people-to-people contacts becomes important in any bilateral relationship. In this case, the relaxation of the visa regime, the increase in the volume of scholarships, the volume of cultural exchange programs, including student and teacher exchanges, musicians will be imperative to accelerate people-to-people contacts. in the region where India can play a leading role. . It is very encouraging that in 2019 the number of visas issued by India to Bangladeshi citizens has crossed the 1.5 million mark, which is imperative for the promotion of people-to-people contacts.

    Seventh, I firmly believe that the strengthening of university cooperation between India and its neighbors is becoming necessary. India can do a study; how many Indian study centers are available in the region and how many Indian institutes focus on neighborhood studies? It is important to promote joint research and collaboration between academics and researchers in the region. The center for Indian studies in the region should be promoted where the Indian high commission on those particular countries can play a vital role. Although there is a Center for Japan Studies and a Center for East Asian Studies with a primary focus on China and Japan at Dhaka University, there is no such center. studies on India in Bangladesh. It is important to establish an India Studies Center / Institute at Rajshahi University which will be dedicated to promoting knowledge on Indian affairs, Bangladesh-India relations.

    Eighth, the world of 1945 and 2021 is not the same. Likewise, India in 1947 and India in 2021 are not the same. For example, in 1947 India was a poor country with a large population impoverished and suffering from food shortages. The situation for the industry was not good enough either. The country also faced challenges such as national integration and nation building in the post-partition era. In 2021, India is the third largest economy in terms of PPP (purchasing power parity) while the country has the third largest pool of scientific and technical experts in the world. It is one of the key countries in the global economy and the global supply chain. The country has made an enormous contribution to the field of international peace and security through its contributions of active troops to United Nations peacekeeping missions. So, I firmly believe that the United Nations Security Council needs to be reformed. And as the representative of South Asia, India can be a permanent member of the Security Council. Indian neighbors can actively help India to become a member of the Security Council.

    Ultimately, there is a possibility of rising protectionism, less cooperation in the post-pandemic world. The coronavirus crisis has also shown the world the apparent lack of global leadership when it is absolutely necessary. The coronavirus crisis has also shown us the importance of the region, regionalism and regional cooperation in dealing with any pandemic or common challenge. So, I think in the production, sharing and trade of vaccines, India’s neighbors, including Bangladesh, should be given top priority. Because in this era of interdependence of so many factors and dimensions, if the people of their neighbors remain at risk from the pandemic, India’s security would also be threatened or vice versa.

    I conclude by saying that the fate of India is closely linked to that of its neighbors because we say that we can change our friends but not our neighbors. In fact, neighbors matter in the context of security, development, peace and prosperity. Therefore, India, along with its neighbors in South Asia and the Bay of Bengal, can work collectively in international forums for common causes such as global health governance, climate change and free trade. Regionally, India taking its neighbors with confidence, can constructively cooperate for a prosperous and peaceful South Asia and Bay of Bengal region in the post-COVID-19 world, which would ultimately benefit to all.

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    SA against the richest countries in the world burger by burger https://kenttribune.com/sa-against-the-richest-countries-in-the-world-burger-by-burger/ https://kenttribune.com/sa-against-the-richest-countries-in-the-world-burger-by-burger/#respond Mon, 06 Sep 2021 07:00:00 +0000 https://kenttribune.com/sa-against-the-richest-countries-in-the-world-burger-by-burger/

    After Statistics South Africa (Stats SA) released updated estimates of gross domestic product (GDP) in South Africa, following a complete rebasing of the data, we now have a better understanding of where there is ‘South Africa in the richest countries of the world. .

    The richest countries in the world

    Enterprise technology writes that the revised estimate of GDP in 2020 is now R5.521 billion, an increase of 11% from the previous estimate of R4.973 billion, an addition of R548 billion to output estimated. The annual growth rate for 2020 has been revised from -7.0% to -6.4%.

    The rebasing of the GDP figure in USD (using a comparable conversion) is $ 335.2 billion, making South Africa the 36th largest economy in the world, up from 37th ($ 301 billion). While South Africa is in 36th place between Malaysia (35) and Bangladesh (37), the top 10 looks like this:

    1. United States
    2. China
    3. Germany
    4. UK
    5. India
    6. France
    7. Italy
    8. Canada
    9. Korea, Rep.
    10. Russian Federation

    Purchasing power parity

    GDP alone does not necessarily give us the full picture of economic value. It is reported that currencies like the rand have more purchasing power compared to major currencies like dollar or euro due to the concept of purchasing power parity (PPP).

    This is what the Big Mac Index is trying to calculate. Since July 2021, The Economist updated its Big Mac Index, showing how the rand continues to be one of the most undervalued currencies in the world, against the US dollar.

    The Big Mac Index

    In a previous article, Enterprise technology writes that the Big Mac is selected for comparison because the popular fast food meal is widely available and remains fairly consistent in price; however, this is by no means an exact measurement even though it has become a worldwide standard.

    What they found was that a Big Mac costs Rand 33.50 in South Africa and $ 5.65 in the United States. The implied exchange rate is R5.93 per dollar. The difference between that and the real exchange rate – 14.66 rand to the dollar at the time of the report – suggests that the rand is undervalued by 59.6%, which is the third most undervalued currency measured by l index in July.

    The gross index does not tell the whole story of currency valuation, however. Therefore, due to PPP, the cost of producing a Big Mac is cheaper in poorer countries, and that is why The economist fper capita GDP actors – to draw a more precise conclusion.

    A simple price comparison

    “It should be emphasized that it is common for poor countries to appear cheap compared to rich countries in a simple price comparison.” The Economist said, noting that in most countries, “the price of a burger is about what you would expect given the country’s GDP per person.”

    In the group’s adjusted index, the South African currency is still significantly undervalued (7th), but less than when it comes to simple conversion data.

    In PPP terms, a Big Mac costs 59.2% less in South Africa ($ 2.28) than in the United States ($ 5.65) at market exchange rates.

    Based on the differences in GDP per person, the index suggests that the rand is undervalued by 29.6% and is expected to be around 10.32 rand to the dollar.

    The Hong Kong dollar is said to be the most undervalued currency against the US dollar, by up to 45.7%.

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