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How much is the way out of global coronacials, why the regulation of the industry is often associated with an increase in its prices for consumers and how the bank’s culture is associated with the risk of its default: the main thing in the blogs of economists.

The article was first published on the ECCON website

The cost of the exit from the global coronacials is $ 50 billion: this is the cost of vaccination at least 40% of the world population by the end of 2021 and at least 60% by mid -2022, its head of Kristalin Georgiev, the chief economist Gita Gopinate and economist Ruchir Agagars about the methods proposed by the IMF, write the end of pandemia. While it is not over, the sustainable exit of the global economy from the crisis is impossible, and the condition for such a way out is mass vaccination in all countries of the world. By the end of April, less than 2% of the population of Africa were vaccinated, while more than 40% of the US inhabitants and more than 20% - Europe received a minimum of the vaccine; A year after the start of the Covid-19 crisis, more and more new cases of the disease are recorded in the world. Due to the gap in the possibilities of vaccining the trajectory of economies in developed and developing countries, it will diverge, increasing global inequality. Pandemia policy is an economic policy and it is crucial for global macroeconomic and financial stability, the authors indicate.

The measures proposed by the IMF include the free provision of vaccines to needing countries, mass testing, investments in expanding vaccines and monitoring supplies to ensure their uninterrupted. The IMF is estimated at $ 13 billion - out of the required $ 50 billion, Grants of $ 22 billion are ready to provide the G20 countries and $ 15 billion from national governments with the support of multilateral development banks. But even the additional $ 4 billion grants by the COVAX International Covax program for the completion of current orders, the removal of restrictions on cross -border streams of raw materials and vaccines and gratuitous provision of unused vaccines (about 1 billion doses by the end of 2021, according to the IMF assessment) will help to achieve global mass vaccination, economists say: to overcome global global The healthcare crisis of the country of the world can only together.

Regulation may not serve as public interests, but the search for economic rent, reminds Suzan Dudley, the founder of the Center for Regulatory Research at the University of George Washington, and the former employee of the White House Department, about the Nobel Laureate of George Stigler “Theory of Economic Regulation” about half a century ago. Previously, it was assumed that the regulation, in accordance with the theory of public interests, serves to protect consumers and correct market failures, but the measures aimed at this usually led to the establishment of higher prices for consumers. The theory of Stigler shed light on the stimuli and the consequences of economic regulation: he suggested that the main resource of the government is the force of coercion and that the groups united by rational interest are striving to convince the government to use this force in their favor and, thanks to the discretion of the interests of all the others, succeed in maximizing their own welfare. This explained, for example, why the air travel between the States regulated by the US Civil Aviation Civil Aviation Civil Aviation Council was more expensive than other internal air travels to which the rules of the Council did not apply.

The consequence of the theory of Stigler and its further development in the works of other researchers was the deregulation of the 1970-1980s, which led to an increase in efficiency, equivalent to 7–9% of GDP growth, while the most part of the benefits received consumers. However, today, it seems, they forgot about this, Dudley believes. Stegler theory shows that as soon as regulation becomes inevitable, the companies subject to him are making every effort to make it as much as possible to their interests. This can explain why Facebook now supports calls to tighten the rules of confidentiality and moderation of content - potential competitors may not be able to comply with these rules; Or why Amazon and other large companies support an increase in the minimum salary - this will cause disproportionately more harm to their not so large competitors. And the politicians offering to regulate the Bigtech-Companies proceed, as in the “achiever” times, from the fact that the regulatory authorities will have the fullness of information, skills and incentives to curb the behavior that they do not like, and exclusively in the interests of consumers, complains Dudley: “Hope again defeats experience.”

The organizational culture of banks is associated with the level of risk of their bankruptcy, and this culture can be measured quantitatively: so, its deviation is two points below the average in the sector increases the risk of bankruptcy by 50%, its economists about their new study tell on the Bank of England. Culture is a set of values separated by a group of people and determining their perception and action. It is easy to define a different type of culture, but it is quite difficult to measure: it is impossible to demand a “present culture”, like banking reports; Polls and interviews of employees can come across attempts to create an impression more favorable than in reality; Anthropological methods - for example, on observation - can lead to the fact that people will change their behavior by learning that they are being watched. Since the culture is elusive, it is better to measure it unnoticed, the economists of the Bank of England decided and gathered 20 inconspicuous indicators of the culture of banks (Unobtrusive Indicators of Culture), covering the five main directions-orientation on details, inclusive, customer-orientation, risk-orientation and good faith. Each indicator has a quantitative measurement.

For example, orientation on parts was evaluated by punctuality and accuracy of the regulatory data provided to the Bank of England; inclusion - according to the gender and age composition of senior management; Client -orientation - by the number and results of complaints filed by the Bank by consumers; risk tendency - by risk ratios in comparison with other banks; Good faith - by the frequency of internal fraud and their financial consequences. After setting “cultural assessments” to each bank and sector on average, the authors calculated the connection of culture with banking with the help of several indicators (in particular, “distances to default”-Z-SCORE, showing how standard deviations the profitability of the bank’s assets should fall for the complete exhaustion of its own capital).

It turned out that there is a statistically significant and causal relationship between the organizational culture of the bank and its risk: so, the improvement of culture by one standard deviation from the average sector reduces the risk of default by 25%. As for the cause and investigation, according to the authors, the risk affects culture, and not vice versa: more risky banks tend to hire people with increased appetite to risk, which forms a “bad” culture. The conclusions of the study are important for banking supervision, the authors believe: they demonstrate that, firstly, the indicators of the culture of banks are significant for banking risk models, and secondly, that many of the indicators traditionally related to the sphere of consumer rights are directly related to prudent supervision.

A higher minimum wage can be considered as a “tax” to search for work, says Tyler Cowen, co -author of the influential economic blog Marginal Revolution. In some economic models, the search for work is a search only of salaries, although in reality it often covers non -monetary parameters relating to working conditions. For example, a suitable position, the degree of adequacy of the boss or the presence of an air conditioner. If the minimum payment rises, this may encourage employers to reduce the quality of non -monetary conditions of the workplace or at least increase uncertainty against these conditions, Cowen thinks.

Then this will actually increase the costs per unit of searching for work-despite the fact that the searches themselves, due to the increase in the “minimum” can become more-and makes the search results less definite. In this connection, increasing the size of the minimum payment is a kind of tax to find work, the economist writes: this can further complicate the task of increasing employment.

$ 50 billion - the price of coronacial