Concerns grow over economic proposals ahead of French elections. Is economics a losing game for women? Economists reveal the costs of sanctions. Economic indicators show Michigan's unemployment rate remains stable in May.
Sources:
https://www.euronews.com/my-europe/2024/06/21/concerns-grow-over-economic-proposals-ahead-of-french-snap-elections
https://www.ft.com/content/e1d2a4d4-df3e-43ac-ba67-0aaf6b51dc45
https://phys.org/news/2024-06-economists-reveal-sanctions.html
https://www.detroitchamber.com/economic-indicators-michigan-unemployment-rate-remains-stable-in-may/
Outline:
(00:00:00) Introduction
(00:00:38) Concerns grow over economic proposals ahead of French elections
(00:02:48) Is economics a losing game for women?
(00:06:48) Economists reveal the costs of sanctions
(00:09:54) Economic Indicators: Michigan Unemployment Rate Remains Stable in May
Simply Economics
Concerns over French Economic Proposals, Gender Bias in Economics, Costs of Sanctions, Michigan’s Stable Unemployment Rate
Concerns grow over economic proposals ahead of French elections. Is economics a losing game for women? Economists reveal the costs of sanctions. Economic indicators show Michigan's unemployment rate remains stable in May.Sources:https://www.euronews.com/my-europe/2024/06/21/concerns-grow-over-economic-proposals-ahead-of-french-snap-electionshttps://www.ft.com/content/e1d2a4d4-df3e-43ac-ba67-0aaf6b51dc45https://phys.org/news/2024-06-economists-reveal-sanctions.htmlhttps://www.detroitchamber.com/economic-indicators-michigan-unemployment-rate-remains-stable-in-may/Outline:(00:00:00) Introduction(00:00:38) Concerns grow over economic proposals ahead of French elections(00:02:48) Is economics a losing game for women?(00:06:48) Economists reveal the costs of sanctions(00:09:54) Economic Indicators: Michigan Unemployment Rate Remains Stable in May
- Duration:
- 12m
- Broadcast on:
- 21 Jun 2024
- Audio Format:
- mp3
(upbeat music) - Good morning and welcome to Simply Economics. It's Friday, June 21st. On today's show, concerns grow over economic proposals ahead of the French elections and economists reveal the costs of sanctions. Plus we explore whether economics is a losing game for women. This coverage and more up next. I'm David and you're listening to Simply Economics. French business leaders are expressing concerns about the economic policies proposed by political parties ahead of the upcoming SNAP parliamentary elections. The elections were called after President Emmanuel Macron dissolved the National Assembly following the far right national rally party's strong performance in European elections. For more on this, we turn to our correspondent in Paris. What are the key economic issues at play in this election? Well, David, there are stark differences between the economic visions being put forward by the main political parties. The far right national rally, which is currently leading in the polls, has unsettled many in the business community with proposals like reversing recent pension reforms. The party's leader, Jordan Bardella, has tried to reassure employers, promising things like tax cuts for companies, but many remain skeptical about the fiscal responsibility of their plans. And what about the other major parties? Where do they stand on economic policy? President Macron's centrist alliance is emphasizing a pro-business approach and warning against what they call the crazy economic proposals of their opponents. Finance Minister Bruno Lemair in particular has stressed the need to lower the budget deficit and maintain stability. Meanwhile, the left-wing popular front is calling for increased spending on social programs, which they argue will be balanced by economic growth and higher taxes on the wealthy. With all this uncertainty, how are businesses and markets reacting? Many business leaders are taking a cautious approach right now, freezing investments, pausing hiring, and in some cases, even taking out loans to prepare for potential economic headwinds. There are doubts about the feasibility of both the National Rally and left-wing party's economic promises. In the markets, French stocks have recovered a bit after some fluctuations, but the gap in borrowing costs between French and German bonds suggests ongoing weariness among investors. Much will depend on the outcome of the two-round election on June 30th and July 7th. High stakes indeed for the French economy in this snap election. Thank you for that update from Paris. We'll be watching closely to see how this unfolds. Shifting our focus now, a new report is shedding light on the challenges women face in the field of economics. Despite some progress in recent years, the share of women in economics remains stubbornly low at just 25.7% in the UK. And the problem is even more acute at senior levels with women holding only a small fraction of top academic positions. For more on this, we're joined now by simply economics correspondent Celeste. So break this down for us. What did the report find in terms of the representation of women in economics? The report paints a pretty stark picture, David. While the overall share of women in economics has increased somewhat in recent years, progress has largely stalled out. And when you look at the senior ranks of the profession, the numbers are even more dismal. In the UK, for example, women make up just 36.5% of lecturers, 26.3% of readers, and a mere 18.3% of full professors. So there's clearly a major leaky pipeline problem where women are falling out of the field as they move up the academic ladder. And why is that exactly? What's driving this gender imbalance, especially at the higher levels? Well, the report points to a number of systemic gender biases that stack the deck against women at pretty much every stage of their careers. For starters, research has shown that women's work is often held to a higher standard than men's. Their papers may be subjected to greater scrutiny in the peer review process. And there's evidence that women tend to get less credit for joint work with male co-authors. All of this feeds into a vicious cycle where women struggle to publish as much, which hurts their citation numbers and makes it harder to find collaborators, all of which are key to attaining tenure and advancing to those senior positions. And of course, this is on top of the usual challenges women face in male-dominated fields, like a lack of mentors and role models and an academic culture that can often be hostile or unwelcoming to women. It's a complex and multifaceted problem to be sure, but why does it matter? Some might argue that as long as the work is good, the gender of the economist shouldn't matter. What's your take on that? - I think that view really misses the point. The fact is, diversity or lack thereof among economists has real implications for the kinds of questions that even get asked, much less answered in the field. Women and men often have different life experiences and perspectives that can lead them to focus on different issues and approach problems in different ways. So when women are underrepresented, especially in influential senior roles, it means that whole areas of inquiry may be getting short shrift. We end up with a narrower impoverished economics, and given the outsized influence economists have on policy making, that has consequences for society as a whole. - Important points. So what can be done to start addressing some of these imbalances and biases? - There's no easy fix, but the report does lay out some recommendations. A lot of it comes down to being more proactive about supporting and promoting women at every stage of the pipeline. That means things like making sure women have equal access to research funding and opportunities, and working to root out bias in hiring and promotion decisions. Mentoring is also hugely important for keeping women in the field and helping them advance. More broadly, there needs to be a real reckoning with the culture of economics and academia to make it a more inclusive and welcoming place for women and minorities. Because right now, the status quo is shutting out a lot of talented people and diverse perspectives, and economics is worse off for it. - Thanks for breaking it down for us, Celeste. Now let's shift our focus to another economic topic. A new study by economists in Germany has analyzed the effects of sanctions on both the targeted countries and those imposing the sanctions with some interesting findings. For more, we're joined by our economics correspondent. So what did this study look at in terms of the economic impacts of sanctions? - The researchers focused on two major cases of economic sanctions in recent years. Those imposed on Iran in 2012 over its nuclear program and sanctions placed on Russia after its annexation of Crimea in 2014. They looked at detailed data on prices, prosperity metrics like GDP and international trade flows to assess how the sanctions impacted the economies of Iran and Russia, as well as the countries that participated in the sanctions. By analyzing this empirical evidence, they aim to quantify the real economic costs on both sides. - And what were the key takeaways in terms of the effects on the sanctioned countries like Iran and Russia? - As you might expect, the study found that economic sanctions do generally reduce gross domestic product and overall prosperity in the targeted countries, which is of course the primary goal. However, the magnitude of the impact can vary quite a bit depending on the country and the specific sanctions package. The researchers note that sanctions tend to be most effective when they are multilateral, meaning many countries participate and when they target key sectors or economic choke points for the sanctioned country. - But the study also looked at potential downsides for the country's imposing sanctions, correct? What did they find there? - Yes, this is an important point that often gets overlooked. While the sanctioned countries bear the brunt of the economic pain, the sanctioning countries can also suffer negative impacts to their own economies. Sanctions disrupt established trade relationships and can lead to the loss of key import and export markets. The study found evidence of reduced GDP growth and welfare losses in some of the sanctioning countries, especially when there were strong, pre-existing economic ties to the sanctioned country. So there are definitely economic risks and trade-offs to consider. - Interesting. So what's the takeaway then for policymakers weighing the use of sanctions as a geopolitical tool? - I think the study highlights the need for a prudent and strategic approach to designing sanctions policy. The authors suggest that an ideal sanctions coalition would include countries that have relatively low trade exposure to the target country to minimize the self-inflicted economic harms. They also emphasize the importance of multilateral cooperation and carefully targeting sanctions for maximum effectiveness. At the end of the day, sanctions can certainly impose economic costs, but they are not without risks and trade-offs that need to be carefully balanced. - Thanks for breaking down that complex and often controversial economic policy tool. Now let's turn our attention to the latest jobs report out of Michigan. The state's unemployment rate held steady at 3.9% in May for the fourth month in a row, and Michigan also added 8,000 jobs over the month. Here to discuss what this means for Michigan's economy is our simply economics correspondent. So what do you make of this jobs report? - The steady unemployment rate and job growth are certainly positive signs for Michigan's labor market. The state's jobless rate has been hovering around 4% since late 2021, which matches the national unemployment rate. This suggests that Michigan's job market is keeping pace with the U.S. as a whole. Additionally, the fact that initial jobless claims in Michigan have remained stable since January points to the underlying strength and resilience of the state's employment situation. - That's an encouraging assessment. Although interestingly, this strong labor market picture seems to be at odds with how many Michigan voters are feeling about the broader economy. Can you shed some light on that disconnect? - Yes. The Detroit Regional Chamber's latest Michigan voter poll in May revealed a significant gap between the job market data and economic sentiment. A full 61% of respondents said they see the state economy as either weakening or already in a recession. Over half, 52% believe Michigan's economy is headed in the wrong direction. Yet at the same time, a whopping 85% of workers said they are not worried about losing their jobs. So while Michiganders are feeling pessimistic about the overall economy, that concern hasn't translated into widespread job insecurity, at least not yet. - Why do you think there is such a stark divergence between the public's economic outlook and the labor market realities on the ground? There could be a few factors at play. Even though jobs remain plentiful, inflation is still running high, which may be coloring people's views of the economy and their own financial situations. Many may also be wary of a potential slowdown or recession on the horizon, even if it hasn't materialized in a major way yet. The memory of past downturns could be fueling some of that economic anxiety as well. Whatever the reasons for this disconnect, it will be important to monitor whether Michigan's labor market can maintain its momentum in the face of this consumer pessimism. - Thanks for that insightful analysis of the Michigan Jobs Report and what it means in the context of broader economic sentiment in the state. And with that, we wrap up our stories for today. Thanks for listening to Simply Economics. We'll see you back here tomorrow. (gentle music) [BLANK_AUDIO]