Financial Trends
Labor Market Policies and The Green Transition
There is a consensus around the world about the necessity of building a greener economy, based on the concerns over potential job losses. The solution is a long-term process but with the proper set of policies, countries should be able to achieve net-zero greenhouse-gas emissions by 2050. The correct use of these policies will also reduce the harm to workers in emission-intensive industries, like utilities, and will include job-training programs along with investment opportunities in green technologies. For countries with an advanced economy, the policy packages will be designed to achieve zero-net greenhouse-gas emissions by 2050 and would have to shift their employment levels by 1 percent from higher to lower-emission levels, over the next decade. This shift is significant for markets that are starting to emerge in 2022 at roughly 2.5%. One of the main reasons for employment levels to shift in these advanced economies is that a minority of the jobs are related green-intensive, which means that they can improve the environmental sustainability, or pollution-intensive, which means that they are predominant in highly polluting sectors. The majority of jobs in these economies are typically neutral- neither green-intensive nor pollution-intensive. In order to make the transition smoother and more efficient, there need to be higher wages given to green-intensive jobs as in advanced economies, they earn 7 percent more than the average pollution-intensive job.
Private Debt’s Impact on Global Economic Recovery
There will be a historic rise in the amount of private debt that could potentially slow down the economic recovery, however, its growth will vary across countries. Governments across the world were successful in lowering the economic struggles caused by the pandemic through the provision of liquidity forms of credit guarantees, concessional lending, and moratoriums on the payments of interest. Despite these strategies proving to be effective, they caused a spike in private debt and similar financial conditions since the global financial crisis in 2008, during the recession. The global private debt levels significantly increased by 13 percent of the world’s GDP levels in 2022, which is a faster rate than the rise during the recession in 2008. The pandemic continues to impact the finances of households and firms which has reflected the differences in each country’s policy responses and the sectoral composition of their economies. A study by the International Monetary Fund reported that private debt levels are more likely to increase in areas where indebtedness is more concentrated among financially stretched households and vulnerable firms, fiscal spaces are limited, and where the insolvency regimes are inefficient. Consumers in China and South Africa witnessed the largest increase in household debt levels among the countries that shared their debt levels. Households with vulnerable low-income and financial institutions are usually unable to withstand high levels of both public and private debt, causing it to drastically increase this year.
Financial Guidance
“A journey of a thousand miles must begin with a single step.” — Lao Tzu
Everything big, like a multi-nation corporation, started with something smaller, such as someone deciding to open a small business. Big things come as a result of small steps, so if something is progressing slowly or not at the speed you wish, don’t be discouraged.
Money Fact
The penny is the only coin to have the figure on the front face right, as all other coins have the figures facing left.