Vocabulary

robust growth – быстрый рост

long-term trend – долгосрочная тенденция

shrinking economy – замедление темпов экономического роста

to be under way – начаться( о процессе), происходить

to argue – утверждать

a rise in prices – рост цен (обратить внимание на предлог “in”)

to be up to the job – годиться, подходить для чего-либо

to extrapolate the past – опираться на опыт прошлого (в анализе)

order book – объем заказов (на предприятии)

yield curve – кривая доходов

a composite index – составной индекс

Exercises

1. Pronounce the following:

guide, embarrassingly, unpredictability, extrapolate, scrutinizing, yield

2. Find in the text the equivalents to the following:

индекс опережающих показателей; резкое снижение темпов экономического роста; активный рост экономики, замедление темпов экономического роста; прогноз (2); спад (в экономике); сокращаться (о темпах роста); средний показатель прогноза; объем производства

3. Form derivative from the following:

to expand, likely, economy, to forecast, to predict, to guide, long, to embarrass, to tend, to measure, finance

4. Find in the text phrases to match the following:

вероятность резкого экономического спада; риск невелик; иные ориетниры на будущее говорят о другом; могут оказаться более продолжительными; в конце 1981 года; как раз в том месяце, когда в США начался следующий спад; в начале 2001 года; спад уже начался; экономисты аргументируют (свои заявления) тем, что; эти экономические модели не годятся; эти модели снискали дурную славу, экономика растет быстрыми темпами, причиной спадов являются…; нет какого-то единого магического способа оценки; объединить несколько экономических и финансовых показателей; (они) вполне могут уловить изменения в экономическом климате.

Who Will Win the Prize?

The world’s best performing economies change because each decade’s problems are different.

By Richard B.Freeman

Too bad the Academy of Dismal Science doesn’t hand out Oscars for economic excellence. Throughout the ‘90s, the United States would have won, hands down. As in the movie business, however, it’s tough to repeat in the economic world. In the 1980s the winner was Japan, with lifetime employment and pay by seniority. In the 1970s, it was Gremany: apprenticeship programs, workers on boards of directors, powerful unions and an extensive social-welfare system.

Today, it’s anyone’s guess. U.S. unemployment remains low, but the economy looks weaker than it has been in decades. Employment growth remains anemic. Highly educated workers watch as major firms move good jobs to India and China. The dollar has fallen and the trade deficit has risen to new hights. The fiscal deficit is projected to go on and on. If the United States were a developing country, the IMF would be prescribing hard medicine: cut the deficit (really), run a recessin to reduce imports and produce more and cheaper exports, sell more companies and assets to China, Japan, Europe.

Many business leaders are betting on China as this decade’s star. Growth has been exceptional, giving it the best-developing-country award for the 1990s. Starting as one of the poorest countries in the world (people were starving under Mao), China has modernised with extraordinary speed, investing massively in human as well as physical capital. And making rapid progress in high-tech sectors the United States has historically dominated. But China has its own weaknesses: huge urban/rural economic disparities that could produce social disorder, corruption and a weak legal system, a poorly functioning banking system, pollution, inadequate health care and the absence of democratic processes. Developing countries that do well in one decade more often than not fail in the next. Just a few years ago Indonesia was heralded as a great economic success. Argentina was a poster economy of the IMF and World Bank.

Why is it so hard to predict which economy will lead in the future? One reason is that economic problems change. In the 1970s, the challenge was the inflationary shock of oil prices and balance-of-payments problems, which gave an edge to countries that could coordinate wage and price settlements. In the 1990s, the problem was adjusting to high unemployment and new technologies, which favoured countries with high labor mobility and ease of forming companies. Currently, the need is to adjust to the rise of China and India, with their huge populations and low wages. Politics and institutions that work best in addressing one problem don’t always work for another.

It’s natural to search for differences between the decade’s best performer and the rest of the pack. But in the end, luck seems as key as economic policies. All major economies today are based on market capitalism. The same multinationals operate around the world. Working in Europe is different from working in the United States – but not that different. Inevitably, some economies will do better than others, just as some movies do better at the box office, for reasons producers, performers and investors couldn’t foresee. Heretical though it may sound, economists and other members of the Academy of Dismal Science probably don’t know half as much as we think we do about what produces stellar economic performance.

Newsweek

Don’t just read the news, understand it

Notes

1. the Academy of Dismal Sciences – Академия наук, включающая ”псевдо-науку” экономику. (When the Nobel Prize in Economic Sciences was instituted in 1969, there was considerable opposition on the part of the members of the Royal Swedish Academy of Sciences who were prejudiced against economics as a pseudo-science which was not on a par with the other disciplines for which the prizes were awarded)

2. hands down – вне всякого сомнения

3. to pay by seniority = seniority system – система оплаты труда и должностных привилегий, определяемая длительностью работы на данном предприятии

4. apprenticeship program – система подготовки специалиста путем работы под руководством более опытного работника

5. IMF – International Monetary Fund – Международный валютный фонд (МВФ)

6. poster economy, stellar economy – чрезвычайно успешно развивающаяся экономика

7. to give an edge to – давать преимущество (кому-либо)

8. movies (which) do better at the box-office – кинофильмы, обеспечивающие большие кассовые сборы

The New Economy. What It Really Means.

By the New Economy, we mean two broad trends that have been under way for several years. The first is the globalization of business. Simply put, capitalism is spreading around the world – if not full-blown capitalism, at least the introduction of market forces, freer trade, and widespread deregulation. It’s happening in the former communist countries, in the developing world of Latin America and Asia, and even in the industrialized West – with economic union in Europe and America’s free-trade agreement. For the U.S., it means international trade and investment play a much greater role in our economic life than before. Twenty years ago, exports and imports made up 17% of our economy. Today, they account for 25%.

The second trend is the revolution in information technology. This one is all around us – fax machines, cellular phones, personal computers, modems, the Internet. But it’s more than that. It’s the digitization of all information – words, pictures, data, and so on. This digital technology is creating new companies and new industries before our eyes.

All of this entrepreneurial energy is transforming Corporate America. You can argue about whether there is a New Economy, but there sure is a new business cycle. Housing and autos used to drive the U.S. economy. Now, information technology accounts for a quarter to a third of economic growth. And remember, this is an industry that pays very good wages. And it is an industry, in which prices actually fall every year. How’s that for no inflationary growth? Furthermore, information technology affects every other industry. It boosts productivity, reduces costs, cuts inventories, facilitates electronic commerce. It is, in short, a transcendent technology – like railroads in the 19^th century and automobiles in the 20^th.

These two broad trends, globalization and information technology, are undermining the old order, forcing business to restructure. If you want to compete in global markets or take advantage of rapid technological change, you have to move quickly – and that means getting rid of layers of management. Technology makes it possible.: put a PC on everyone’s desk, network them together, and you don’t need so many middle managers. The result: a radical restructuring that is making us more efficient.

These trends can combine in powerful ways to raise Americans’ standard of living, create jobs, spur entrepreneurial effort – and do all this without boosting inflation. To the believers in the New Economy, we have here the magic bullet – a way to return to the high growth, low-inflation conditions of the 1950s and 1960s. Forget 2% real growth. We’re talking 3%, or even 4%. Forget double-digit inflation and the natural rate of unemployment. We’re talking stable prices. Forget hopelessness in the developing world. We’re talking about raising living standards in India and Brazil.

How is it possible? First of all, globalization opens new markets for our goods and services. At the same time, global competition helps to keep at least some prices in check. As trade barriers fall, cheaper goods are available around the world. Cheaper labor, too, whether you’re talking about software programmers in Russia or textile workers in China. The cheaper goods prompt people to buy more of them, and workers everywhere get the chance to share in economic growth. The result is increased global demand and a supply explosion that helps keep costs down for both labor and products. While this is happening, the information revolution is spurring capital spending and renewed efficiency.

I vote for the New Economy, properly defined. Even though we haven’t ended the business cycle, outlawed recession, or banished inflation, the business cycle really has changed. It is powered more these days by technology and trade. And this may well enable us to grow faster than before without renewed inflation. Perhaps the 4% rate is too high – enough to justify interest-rate hikes by the Federal Reserve if things don’t slow. But the 2% - to 2.5% speed limit is probably obsolete. In an era of stronger productivity growth, which may just now be starting to show up in statistics, the speed limit for the U.S. economy is probably 3% to 3.5% a year.

If that doesn’t sound like much, remember, it is a 50% improvement over what the Old Economists deem possible.

By Stephen B. Shepard, Editor-in-chief of Business Week

(Condensed from www.businessweek.com/1997)

Notes

1. to be under way - начаться, начать осуществлять

2. simply put – иными словами (если выразиться проще)

3. How’s that for noninflationary growth? - Чем не источник безинфляционного роста экономики?

4. the magic bullet – чудодейственное средство

5. natural rate of unemployment – естественный уровень безработицы: долговременная безработица, которая не зависит от темпов экономического роста ( экономисты в США считают, что это уровень чуть ниже 6%)

6. to keep in check – сдерживать

7. to share in economic growth – воспользоваться благами быстрого роста экономики

8. this may well enable us – “well” часто используется для эмфазы (усиления высказывания); перевод: Это вполне может позволить нам (обеспечить нас)

9. the 4% rate…enough to justify interest-rate hikes by the Federal Reserve – 4%-ные темпы роста экономики, которые оправдывают повышение ФРС процентной ставки. Когда экономика начинает расти слишком быстрыми темпами, грозя “перегревом”, ФРС прибегает к использованию такого инструмента денежно-кредитной политики (monetary policy), как управление процентными ставками. Это вызывает удорожание кредитов и, как результат, сокращение инвестиций в экономику, что тормозит ее рост.