Vocabulary

to generate a pickup in inflation – вызвать рост инфляции; inflation implications – последствия (роста) инфляции

tight labor market – сокращение рынка рабочей силы; сокращение предложения на рынке рабочей силы; to tighten the labor market – вызвать сокращение предложения на рынке рабочей силы; tight Fed policy – жесткая денежно-кредитная политика (политика повышения процентных ставок); loose Fed policy – либеральная денежно-кредитная политика (политика снижения процентных ставок)

payroll slots = jobs

resource utilization – использование ресурсов

production capacity glut – излишек производственных мощностей

elevated prices – выросшие цены

to restrict economic activity – вызвать замедление экономической активности; сдерживать экономическую активность

trade-weighted dollar – курс доллара, взвешенный относительно корзины валют основных торговых партнеров в соответствии с их удельным весом в торговле

business facilities – производственные мощности предприятий

unit labor costs – издержки на оплату труда в пересчете на единицу продукции

monthly job growth – ежемесячный рост количества рабочих мест

Exercises

1. Answer the following questions:

1. What does NAIRU stand for?

2. What does the term “tight labor market” mean?

3. What is the Federal Reserve? What is its main function?

4. What’s the name of the Fed policy? What’s its Russian equivalent?

5. Why may 2006 be different from the late ‘90s? Expand on it.

2. Paraphrase the following:

the clunkiest phrase economists ever devised; inflation implications; new payroll slots; hourly pay; economy’s forward thrust; elevated energy prices; job growth was hobbled by hurricanes; a moving target; the jobless rate dipped; in the late ‘90s; Fed began totighten; production capacity glut; the Fed voiced its concerns; consumer confidence; companies have been exceptionally hesitant to invest and hire.

3. Give the antonyms to the following:

to tighten (the policy); jobless rate; dipped; inflation; to soar; to accelerate; domestic demand; peak; strong demand; economic expansion; the growth is picking up; to decline; fuzzy; to hike rates; to hire; vigorous growth.

4. Pay special attention to translation of the underlined phrases:

1. With demand still strong, the recent robust job gains suggest…(Krasnov § 14)

2. The trade-weighted dollar has fallen 15% from its peak in 2002, with further declines likely this year.

3. That’s a recipe for faster increases in unit labor costs. (Kr. § 6)

4. Should the Fed keep hiking rates in the face of a tighter labor market?

5. They rely less on greater productivity.

6. The other side of stronger job markets.

7. The jobless rate had dipped below 4% with little evidence that inflation pressures were building. (Kr. ex.5 page 58)

8. Little wonder why January consumer confidence hit a 3.5-year high.

Relative economic performance

Les miserables

Is the economy in a better or worse state than ten years ago? The "misery index" (the sum of unemployment and inflation rates) is a back-of-the-envelope gauge of economic health. The higher the score, the greater the economic misery. It was invented by Arthur Okun, an American economist, just after the first oil crisis of the 1970s caused a sharp rise in both unemployment and inflation. Jimmy Carter popularized the misery index during his successful presidential campaign in 1976.

The classic misery index makes America's economy look pretty good, compared both with the past few decades and with much of Europe, burdened by higher jobless rates. But like many people when they hit 30, the index may be due for a spruce-up.

Merrill Lynch's economists have come up with a broader, international index. In addition to unemployment and inflation, it also adds interest rates and the budget and current- account balances, but then subtracts GDP growth (a good thing). In other words, the index not only reflects how cheery an economy feels today, but, by including budget and external balances, it also captures the ability of a country to sustain its merriment. For example, a large budget deficit probably implies higher taxes in future.

This new index could wipe the smile off the faces of exuberant Americans. The United States has the highest score, i.e, it has the most wretched economy among the big G7 countries, thanks to its huge deficits. In the 1990s, by contrast, before its imbalances exploded, its index was one of the lowest. The United States is the only country to have seen a large increase in its misery index over the past decade. Virtually all the other G7 countries - including Europe - have seen sizeable improvements.

Japan, after a decade of woe, is now back to where it was in 1994. However, Japan's misery index is somewhat misleading, since, in effect, it treats deflation as good, not bad.

The superstar that deserves to smile is Canada. Over the past decade it has seen the biggest reduction in its misery index of any G7 economy. It is the only country running both current-account and budget surpluses - in happy contrast to its southern neighbour.

The Economist, 2006

Notes

1. misery index – индекс неблагополучия, невзгод: комбинирует показатели безработицы и инфляции, отражает степень уверенности потребителей в будущем и вляет на спрос

2. back-of-the-envelope gauge – оценка, не требующая сложныз расчетов

3. merriment – зд. рост экономики и связянное с ним благосостояние общества

4. exuberant – spending too much, beyond one’s means