Over the last year we have witnessed a deteriorating climate in Russian-Western relations - or at least this has been the perception. The Russian financial crisis has accelerated the trend in Russia to blame the West - in particular the US - for their troubles. In America and Europe a new debate has been spawned on what kind of Russia we are now dealing with. Old truths, or old perceptions, are being questioned and relations are being reassessed.
There is substantial evidence that new information technologies are in many ways transforming the operations of modern economies. More than half of employees use a computer at work in the most advanced industrial countries. About 10 per cent of the value of all private investment in fixed non-residential capital is devoted to computers and peripheral equipment in the United States and some other economies. This share goes up to 25 per cent when investment in information processing equipment is included. Nevertheless, all spending on information technology, including hardware, software and services, does not amount to more than 3-4 per cent of nominal GDP in these countries. The share is, however, increasing rapidly, indicating that a steady state has not yet been reached.
The rapid diffusion of computers has widely changed the consequences of computer use on the labour market. While at the beginning of the eighties knowledge of computers was an obvious advantage in a career, this same knowledge is now so commonplace that the inability to use these tools is widely seen in many industries as a professional handicap. In relation to such drastic transformations, changes in the North American wage structure during the eighties in favour of the better educated have been interpreted by many analysts as evidence of skill-biased technical change. Evidence outside the US, and in particular in Europe, seems to support the idea that similar transformations affected most other labour markets.
The leading index increased 0.3 percent, the coincident index increased 0.3 percent, and the lagging index decreased 0.2 percent in December. Taken together, the three composite indexes and their components show a healthy economy: The leading indicators point to a continuation of the expansion, which has become the second longest on record. The coincident indicators show aggregate activity rising at a more moderate pace than GDP's rise of 5.6 percent (annualized) in the 4th quarter of 1998. There is no evidence of cyclical imbalances that would jeopardize the economy's stability.
The leading index increased 0.6 percent, the coincident index increased 0.2 percent, and the lagging index decreased 0.1 percent in November. Taken together, the three composite indexes and their components show a healthy economy with bright prospects in 1999. The coincident indicators point to GDP rising between 2.5 and 3 percent (annualized) in the 4th quarter of 1998. The leading indicators point to a continuation of the expansion through at least early 1999. The economy shows no evidence of cyclical imbalance.
The leading index increased 0.1 percent, the coincident index increased 0.1 percent, and the lagging index decreased 0.1 percent in October. Taken together, the three composite indexes and their components show a healthy economy. The coincident indicators show the 4th quarter of 1998 starting with a relatively slow pace of growth (compared to the coincident index's rise of rise 3.0 percent and GDP's rise of 3.7 percent, annualized, during the first 3 quarters of 1998. The leading indicators show no serious impediments to moderate, or even strong, economic growth in 1999. There is almost no evidence of cyclical imbalances that would jeopardize the economy's stability.
Both the leading and coincident indexes held steady, while the lagging index fell 0.1 percent in September. Taken together, the three composite indexes and their components show a slowing, but still healthy economy. The coincident indicators suggest the expansion advanced in the 2 to 2.5 percent range in the 3rd quarter of 1998, compared with constant- dollar GDP showing a 3.3 percent increase (annualized). It is premature to predict a recession based on the leading indicators. The lagging indicators have moderated, giving less reason to worry that cyclical imbalances will soon jeopardize the economy's stability.lances could jeopardize the economy's stability.
The leading index held steady, the coincident index increased 0.6 percent, and the lagging index increased 0.4 percent in August. Taken together, the three composite indexes and their components show a healthy economy. The coincident indicators point to GDP rising at a 2.5 to 3.0 percent pace (annualized) in the 3rd quarter of 1998. The leading indicators point to a continuation of the expansion through at least early 1999. The lagging indicators suggest a need to be concerned that cyclical imbalances could jeopardize the economy's stability in 1999.
The leading index decreased 0.2 percent, the coincident index increased 0.1 percent, and the lagging index increased 0.6 percent in June. Taken together, the three composite indexes and their components show a moderating economy: The coincident indicators point to economic activity rising at faster pace than the latest GDP figures, but slower than the 4th quarter of 1997 and the 1st quarter of 1998. (The coincident index rose 3.1 percent while GDP rose 1.4 percent, annualized, in the 2nd quarter of 1998). A two-month decline in the leading indicators signals slower growth ahead and only a slight risk of a contraction. The lagging indicators show slight evidence of cyclical imbalances that could jeopardize the economyÕs stability.
America's annual trade deficit, already large by historical standards, could reach a new record in 1998, fueling protectionist sentiment in Congress. Political fallout from the trade deficit numbers could impede efforts to reduce barriers to trade in the United States and abroad. Contrary to popular conception, the trade deficit is not caused by unfair trade practices abroad or declining industrial competitiveness at home. Trade deficits reflect the flow of capital across international borders, flows that are determined by national rates of savings and investment. This renders trade policy an ineffective tool for reducing a nation's trade deficit.