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ApprovedBusinessBusiness and finance

Toshiba admits to a ruinous overpayment for an American nuclear firm

Ritual contrition

THE probe in 2015 into one of Japan’s largest-ever accounting scandals, at Toshiba, an electronics and nuclear-power conglomerate that has been the epitome of the country’s engineering prowess, concluded that number-fiddling at the firm was “systemic”. It was found to have padded profits by ¥152bn ($1.3bn) between 2008 and 2014. Its boss, and half of the board’s 16 members, resigned; regulators imposed upon it a record fine of $60m.

Now its deal-making nous is in doubt too. In December 2015—the very same month that it forecast hundreds of billions of yen in losses for the financial year then under way, as it struggled to recover from the scandal—Toshiba’s American arm, Westinghouse Electric, bought a nuclear-construction firm, CB&I Stone & Webster. One year on, on December 27th, Toshiba announced that cost overruns at that new unit could lead to several billions of dollars in charges against profits.

Its shares fell by 42% in a three-day stretch as investors dumped them, fearing a write-down that could wipe out its shareholders’ equity, which in late September stood at…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Supervisors put off finalising reforms to bank-capital rules

SOME banks find existing capital requirements too taxing. To no one’s surprise, on December 23rd Monte dei Paschi di Siena, at present Italy’s fourth-biggest bank, asked the Italian state for help, having failed to raise from the private sector €5bn ($5.2bn) in capital demanded by the European Central Bank before the year’s end. Three days later Monte dei Paschi said that the ECB had redone its sums—and concluded that the stricken lender faced an even bigger shortfall, of €8.8bn.

Plenty of other European banks—in far better nick than poor old Monte dei Paschi, which is overloaded with bad loans—are grumbling that they too may eventually have to find more capital. They have spent years plumping up cushions that the financial crisis showed to be worryingly thin, but fear that proposed adjustments to Basel 3, the latest global standards, will require more. The Basel Committee on Banking Supervision, which draws up the standards, had hoped to agree on the revisions by the end of 2016. It’s not there yet: on January 3rd an imminent meeting of central-bank governors and supervisors, to approve the changes, was postponed.

The…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Anthony Atkinson, a British economist and expert on inequality, died on January 1st

“TIME is of the essence,” wrote Sir Anthony Atkinson, a British economist, in a report on measuring global poverty, published in July 2016. His sense of urgency may have been influenced by another constraint. In 2014 Sir Anthony had been diagnosed with incurable cancer. Some might have paused; he sped up. He chaired the World Bank commission that produced the poverty report, and wrote a book, “Inequality: What Can Be Done?”, in just three months. On January 1st, his time ran out.

In his lifetime, he was tipped for a Nobel prize. On his death, fellow economists rushed to describe him as “one of the all-time greats” and emphasised his extraordinary “decency, humanity and integrity”. The two were linked. For him, economics was about improving people’s lives.

A six-month stint volunteering as a nurse in a hospital in deprived inner-city Hamburg was an early influence. He saw poverty, and went on to spend his life combating it. He fought his battles gently—shying away from the adversarial style he experienced as a student at Cambridge—but with rigorous precision and an unfailing sense of social justice.

As…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

The high economic costs of India’s demonetisation

MOST economists might hazard a guess that voiding the bulk of a country’s currency overnight would dent its immediate growth prospects. On November 8th India took this abstruse thought experiment into the real world, scrapping two banknotes which made up 86% of all rupees in circulation. Predictably, the economy appears indeed to have been hobbled by the sudden “demonetisation”. Evidence of the measure’s costs is mounting, while the benefits look ever more uncertain. 

At least the new year has brought a semblance of monetary normality. For seven weeks queues had snaked around banks, the main way for Indians to exchange their old notes for new ones or deposit them in their accounts. That is over, largely because the window to exchange money closed on December 30th. The number of fresh notes that can be withdrawn from ATMs or bank counters is still curtailed, but the acute cash shortage is abating, at least in big cities.

As data trickle through, so is evidence of the economic price paid for demonetisation. Consumers, companies and investors all wobbled in late 2016. Fast-moving consumer goods, usually a reliable growth sector, retrenched…Continue reading

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ApprovedBusinessBusiness and finance

The three Rs behind global banks’ recovery

IN THE Bible, seven years of feast were followed by seven years of famine. For banks there have been ten lean years. Subprime-loan defaults started to rise in February 2007, causing a near-collapse of the industry in America and Europe. Next came bail-outs from governments, then years of grovelling before regulators, mass firings of staff and quarter after quarter of poor results that left banks’ shareholders disappointed. Now, a decade later, the moneylenders are quietly wondering if 2017 is the year in which their industry turns a corner.

Over the past six months the FTSE index of global bank shares has leapt by 24%. American banks have led the way, with the value of Bank of America rising by 67%, and that of JPMorgan Chase by 39%. In Europe BNP Paribas’ market value has risen by 52%. In Japan shares in the lumbering Mitsubishi UFJ Financial Group—the rich world’s biggest bank by assets—have behaved like those of a frisky internet startup; they are up by 57%. Predictions about global banks’ future returns on equity have stopped falling, note analysts at UBS, a Swiss bank. Some of the biggest casualties of the financial crisis are even…Continue reading

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BusinessBusiness and finance

Nestlé looks for ways to boost stale growth as consumers snub unhealthy food

LARGE food companies have long been among the world’s most solid, with reassuringly consistent returns even in hard times. None would seem steadier than Nestlé, based in the Swiss town of Vevey, on a lake near snowy peaks. For its 150th anniversary in 2016 it opened a new museum filled with corporate heirlooms: the first written notes about a new product called milk chocolate, laid out in black cursive; an old tin of Nescafé, used by soldiers as a stimulant in the second world war; and an early can of Henri Nestlé’s infant formula, which in 1867 saved the life of a premature baby.

It has come a long way since then. It sold goods worth nearly $90bn in 189 countries in 2015. Of the 30,000 cups of coffee sipped around the world each second, Nestlé estimates, one-fifth are cups of Nescafé. But the industry it presides over is in upheaval. On January 1st a new chief executive, Ulf Mark Schneider (pictured), took over. He is the first outsider to get the top job since 1922, and his background—running a health-care firm, not selling chocolate bars or frozen pizza—suggests the main source of worry for the business.

More and more…Continue reading

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Business and financeFinance and economics

The “WTO option” for Brexit is far from straightforward

THE two sides of the Brexit debate do not agree on much, but they agree on this: if Britain fails to reach a trade deal with the EU it will have to revert to the “WTO option”. This involves trading only under rules set by the World Trade Organisation. The Leave camp is happy with this idea; Remainers less so. But the awkward truth is that the WTO option is not much of a fallback. Becoming an independent WTO member will be tortuous.

It is puzzling that Brexiteers, whose campaign was summed up as “Vote Leave, take back control”, seem happy with the WTO option. The WTO is truly global, with only a handful of countries outside it (zealous as they are about sovereignty, Brexiteers do not want to join the ranks of Turkmenistan and Nauru). But forsaking one unelected, unaccountable bureaucracy in Brussels for another housed in a leafy district of Geneva seems perverse. WTO members are at the mercy of its “dispute-settlement” regime, which allows other countries to enforce penalties.

Inconsistency has its upside. Membership of the WTO appears to be good for trade. Most economists believe Britain’s overall trade will suffer if…Continue reading

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Business and financeGulliver

Virtual-reality headsets on planes mean we can isolate ourselves from irritating cabin-mates

IN THE early days of commercial flight, people would dress up to take to the air and marvel at the fact that they, members of a heretofore land-bound species, were flying through the sky. Nowadays we clamour for the opposite mindset: one in which we do our best to pretend we are not flying at all.

Such denial has moved a step closer. A French startup called SkyLights has produced a 3-D virtual-reality (VR) headset, with noise-cancelling headphones, that envelops travellers in a cinematic world completely removed from their airborne surroundings. In mid-December, XL Airways, a French low-cost carrier, became the first airline to offer SkyLights to flyers. For $16 per flight, travellers can immerse themselves in new Hollywood releases, in their own individual theatres.

For travellers who want to get away from the many annoyances of flying—from the screaming child in the next row, the loud conversation across the aisle, the seatback movie selection that seems to consist entirely of lowbrow sequels—SkyLights and similar technology could be a godsend. And yet there’s something sad, something resigned, about confining oneself to an…Continue reading

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ApprovedBusiness and financeFinance & EconomicsFinance and economics

Sub-national currencies struggle to survive

Five Bowies make a Winston

TUCKED away in a corner of Brixton, in south London, a rainbow-coloured ATM dispenses cash, looking for all the world like any other. But the notes it spews out are not pounds sterling. They are Brixton pounds (B£). Not to be mistaken for silly Monopoly money, the Brixton pound can actually be spent, legally: the currency, which has a fixed one-for-one exchange rate with sterling, is accepted at over 150 local shops and businesses. It can even be used to pay local taxes.

Launched in 2009, this is one of many such initiatives. Local currencies have been adopted in other towns and cities in Britain, such as Bristol, Exeter and Totnes. Elsewhere, examples include the eusko, used in the French Basques; BerkShares, used in western Massachusetts; and the Ithaca Hour, in Ithaca, New York. Barcelona plans an experiment in 2017.

Such schemes aim to boost spending at local retailers and suppliers, by encouraging the recirculation of money within a community. Because the currency is worthless outside its defined geographic area, holders spend it in the neighbourhood, thus creating a “local…Continue reading

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Business and financeGulliver

2017 might be even worse for business travellers than 2016

2016 was not a great year for business travellers. In Britain, the Brexit referendum and related collapse in the value of the pound made travelling abroad costly; transport strikes meant getting around was an ordeal for those who stayed put. In continental Europe, terror attacks targeted airports and tourist spots, while striking workers blockaded sea ports, grounded airlines and nobbled the air-traffic control system. America, meanwhile, had to deal with mammoth security lines at airports and Asian travellers had to contend with a slowdown in China, the world’s biggest business-travel market.

Sadly, 2017 does not look like it is going to be any better. Indeed, things could get worse. First of all there are oil prices. For travellers, the low cost of fuel was a rare bright spot in 2016. Cheaper flights meant more chance to chip away at the corporate-travel budget. Now the oil price is creeping back up, which means purse-strings may be tightened. Indeed, some airlines are already looking to offset rising costs by charging for drinks on long haul…Continue reading

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Business and financeGulliver

Why President Trump might be a boon for autonomous vehicles

DONALD TRUMP’S election has generated much uncertainty about the future of travel to America, but one group of travellers might have reason to celebrate: those who hope to ride in driverless cars.

The Obama administration hasn’t exactly cracked down on this emerging technology. The 15-point guidelines released in September by the National Highway Traffic Safety Administration, which cover everything from data protection to allowing a sober person to take control of the vehicle in the event of a malfunction, are voluntary for now, although the agency does plan to formalise them soon. But under Mr Trump, regulation of autonomous vehicles could be far more laissez-faire—or even actively supportive.

The first clues come from his early appointments. Most notable is Elaine Chao, the former secretary of labour under George W Bush (and wife of Senate Republican leader Mitch McConnell) whom Mr Trump has tapped to become secretary of transportation. Ms Chao…Continue reading

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ApprovedBusiness and financeFinance and economics

The state steps in to rescue Monte dei Paschi di Siena

FOR months, a bail-out had seemed likely; for weeks, unavoidable. On December 23rd it became fact. Monte dei Paschi di Siena, Italy’s third-largest bank and Europe’s most troubled, announced it had requested state help. The European Central Bank (ECB), Monte dei Paschi’s supervisor, had given it until the end of the year to find €5bn ($6.2bn) in equity, but the bank’s attempts to raise the money from the private sector failed. Paolo Gentiloni, Italy’s new prime minister, said that “today represents a turning-point [for the bank] and a reassurance for its depositors and its future”.

That is the hope. The Tuscan lender’s problems have been rumbling for years. In 2007 it ill-advisedly bought Antonveneta, another Italian bank, from Spain’s Santander for €9bn in cash; more tales of mismanagement have emerged since. Monte dei Paschi has already had two state bail-outs, and raised €8bn from share issues in 2014 and 2015. Its gross non-performing loans amount to one-third of its book. In this summer’s European stress tests, it ranked 51st of 51 institutions. In the past year its stockmarket value has fallen by 88%, to a piddling…Continue reading

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Business and financeGulliver

A domestic flight in Libya turns into a European hijacking crisis

NEWS that a domestic flight operated by Afriqiyah Airways, a state-owned Libyan airline, has been hijacked and flown to Europe should shock and appal an industry that has, since 9/11, spared no expense to end the scourge of such horrors. Events are still unfolding, but it is clear that two men claiming to have grenades forced the aircraft, an Airbus A320, to bypass its intended destination of Tripoli and fly on to Malta, the tiny Mediterranean island nation situated between Libya and Italy. Few details have emerged about the motives or demands of the hijackers. But, at the time of writing, all passengers and some crew had been released, signalling a peaceful end to the crisis.

Aviation in Libya is a messy affair. Afriqiyah lost one aircraft during the 2011 uprising against Muammar Qaddafi, and another two during the 2014 assault by Islamist militias on Tripoli International Airport. Several other planes are awaiting repairs after that assault, which all but destroyed the capital’s main airport (flights are now operated from the nearby Mitiga Airport, a former military base). Another of Afriqiyah’s planes was supposed to be leased to Turkish Airlines, but has been impounded…Continue reading

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ApprovedBusiness and financeFinance and economics

Germany’s biggest lender reaches a settlement with America’s Department of Justice

WELL, it might have been worse. Early on December 23rd Deutsche Bank announced that it had reached a settlement “in principle” with America’s Department of Justice (DoJ), over claims that it had mis-sold residential mortgage-backed securities (RMBSs) in 2005-07, in the run-up to the financial crisis. Deutsche says the agreement is worth $7.2bn—a far cry from the $14bn that the DoJ demanded in September, sending Deutsche’s share price reeling. Credit Suisse said that it too had struck a deal, worth $5.3bn. However, the DoJ is suing Barclays, with which it had also been negotiating, and two of its bankers. Barclays says it will fight the complaint.

Deutsche, Germany’s biggest bank, has always insisted that it would not pay anything like as much as the DoJ had asked for. Although $7.2bn is more than analysts had expected, investors will probably see the deal as good news: Deutsche will fork out only—“only”—$3.1bn in cash and pay the rest as “consumer relief”, such as changes to borrowers’ loans, which will be spread over five years. On the morning of the announcement the bank’s shares were trading 3-4% up.

Such…Continue reading

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Business and financeGulliver

More Americans will be flying over Christmas. Can airports cope?

SOME 45.2m passengers are expected to fly on America’s airlines during the three-week holiday season that began last Friday. That is 3.5% more than flew during the same period last year, adding volume to an already-high baseline: the days around Christmas and New Year typically see 23% more travel than the rest of the year.

That is likely to exacerbate the woes that plagued American airports in 2016 even when travel volumes were normal. The main problem has been that the Transportation Security Administration (TSA), in its wisdom, cut the number of screeners at security checkpoints. It did so anticipating that 25m people would sign up for its PreCheck programme, which allows pre-cleared passengers to bypass some security elements and speed up the process. Instead, fewer than 10m did. The result, predictably, was a worsening bottleneck at airports across the country. (The TSA is so desperate to encourage more people to sign up that it has hired a company to drive coaches around the country recruiting PreCheck members. We’ll see how that…Continue reading

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Business and financeGulliver

More Americans will be flying over Christmas. Can airports cope?

SOME 45.2m passengers are expected to fly on America’s airlines during the three-week holiday season that began last Friday. That is 3.5% more than flew during the same period last year, adding volume to an already-high baseline: the days around Christmas and New Year typically see 23% more travel than the rest of the year.

That is likely to exacerbate the woes that plagued American airports in 2016 even when travel volumes were normal. The main problem has been that the Transportation Security Administration (TSA), in its wisdom, cut the number of screeners at security checkpoints. It did so anticipating that 25m people would sign up for its PreCheck programme, which allows pre-cleared passengers to bypass some security elements and speed up the process. Instead, fewer than 10m did. The result, predictably, was a worsening bottleneck at airports across the country. (The TSA is so desperate to encourage more people to sign up that it has hired a company to drive coaches around the country recruiting PreCheck members. We’ll see how that…Continue reading

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Business and financeGulliver

A YouTube star says he was forced off a flight for speaking Arabic

DELTA AIR LINES found itself at the centre of a social-media storm when Adam Saleh, a YouTube personality who posts about life as a Muslim American, was removed from one of its flights for—apparently—no greater crime than speaking Arabic. Mr Saleh is not the first passenger of Middle Eastern descent to allege discriminatory treatment by airline staff and passengers. But, true to his profession, he may be the first to have recorded an encounter in real time (see link). At the time of writing, nine hours after disembarkation, his video had been retweeted an incredible 556,000 times on Twitter.

According to Mr Saleh, who has 2.2m followers on YouTube, the incident began when he telephoned his Arabic-speaking mother while waiting to depart from London for New York. At this point, he claims, a female passenger told him to speak in English—kicking off an angry exchange between him, the woman and her husband. At some point between that encounter and the beginning of the video, more than 20 passengers reported feeling uncomfortable about Mr Saleh’s behaviour. He was subsequently removed from the…Continue reading

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ApprovedBusinessBusiness and finance

A new industry has sprung up selling “indoor-location” services to retailers

“LOOK up there,” says Edward Armishaw of Walkbase, a Finnish retail-analytics firm, as he points to a small white box above a column clad in mirrors. The sensor—and over a hundred others like it hidden around this department store in London’s Oxford Street—tracks the footsteps of customers through the pings their smartphones emit in search of a Wi-Fi network. Quite unaware, a shopper in a silver puffa jacket ambles past and over to the fitting room. Whether she moves to the till will be logged by Walkbase and its client.

Think of it as footfall 2.0. For many years shops used rudimentary “break-beam” systems—lasers stretched across their entrances—to count people in and out. Only recently have they begun to follow customers inside their buildings, says Nick Pompa of ShopperTrak, an American firm whose work with 2,100 clients worldwide, including malls in Las Vegas and in Liverpool, makes it a giant in the area.

Tracking technologies are ingenious. Some flash out a code to smartphone cameras by means of LED lighting; others, such as IndoorAtlas, a startup with headquarters in California and Finland, monitor how devices disrupt a store’s geomagnetic field. With smartphone ownership rising, the market for tracking phones indoors could grow fivefold between now and 2021, to a total of $23bn, says Research and Markets, a market-research…Continue reading

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ApprovedBusinessBusiness and finance

Our Schumpeter columnist pens a dark farewell

IT WAS in 1942 that Joseph Schumpeter published his only bestseller, “Capitalism, Socialism and Democracy”. The book was popular for good reason. It was a tour de force of economics, history and sociology. It coined memorable phrases such as “creative destruction”. But it was a notably dark book. At a time when people were looking for hope during the life-and-death struggle with Nazism, Schumpeter offered only gloom. “Can capitalism survive?” he asked. “No, I do not think it can.”

This column was inspired by the young Schumpeter’s vision of the businessperson as hero—the Übermensch who dreams up a new world and brings it into being through force of intellect and will. On its debut in September 2009, we argued that Schumpeter was a perfect icon for a business column because, unlike other economists, he focused on business leaders rather than abstract forces and factors. But as Schumpeter grew older, his vision darkened. He became increasingly preoccupied not with heroism but with bureaucratisation, and not with change but with decay. The same is true of the outgoing author of this column.

It would be…Continue reading

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The Christmas spending bump flattens

The holiday season’s hold on Americans is getting weaker. In 1994, according to the Census Bureau, retailers earned $82bn (in 2015 dollars) more in sales during November and December than they would have without the seasonal effect of the holidays. That worked out at $310 per person. In 2015 seasonal sales during these months were just $76bn, or $240 per person. The decline in seasonal shopping is steepest in December. For that, blame three things. The growth of e-commerce has made it easier for people to shop for seasonal gifts whenever they want. Gift cards under the Christmas tree push purchases into January. And millennial shoppers are having an impact on sales: they tend to prefer experiences to yet more stuff.

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ApprovedBusinessBusiness and finance

In Japan, a new kind of business school is retraining jaded salarymen

THE Institute of Social Human Capital in Tokyo is an unusual sort of business-training school. Those who attend it (two-thirds are men) have mostly quit or taken redundancy packages from big Japanese firms, and are trying to start again. Shedding the habits of a lifetime begins by breaking down barriers: former salarymen laugh nervously as they share a bento-box lunch with strangers, blindfolded (the idea is that they must use their other four senses to communicate).

The way to prepare them for a second career is to get them interacting as individuals, not as corporate workers or business partners, says Matsuhiko Ozawa, a director of the Institute, which specialises in this sort of course. In a country that sets great store by formal introductions, the students have not even exchanged business cards. Names, titles and personal information are banned (the ex-salarymen use made-up names) to avoid reproducing the old office hierarchies that exist outside the classroom. “We start from scratch and help these people find themselves again,” says Mr Ozawa.

For years, the salarymen rode a career escalator that rewarded them less for skills than…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Japanese banks grapple with ultra-low interest rates

BANKS the world over are wrestling with low interest rates. Nowhere have they grappled for longer than in Japan. Although the Bank of Japan (BoJ) introduced negative rates only in January, almost 20 months after the European Central Bank, its rates have been ultra-low for years: they first hit zero in 1999. In its long battle against deflation, it pioneered “quantitative easing”—buying vast amounts of government bonds—which depresses longer-term rates and thus banks’ lending margins. Since September the BoJ has also aimed to keep the ten-year bond yield at around nought, while holding its deposit rate at -0.1%.

Banks have had some relief lately: since Donald Trump’s election in November, the yield curve has steepened slightly—and share prices have leapt—as American interest rates have risen and the yen has tumbled. But on December 20th the BoJ kept policy on hold.

For Japan’s biggest lenders, negative rates are “an irritant, not a catastrophe”, says Brian Waterhouse of CLSA, a broker. Every tenth of a percentage point below zero, he estimates, shaves 5% from the earnings of the three “megabanks”: Mitsubishi UFJ…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Thomas Schelling, economist and nuclear strategist, died on December 13th, aged 95

WITHIN half an hour of waking up on October 10th 2005, Thomas Schelling received four phone calls. The first was from the secretary of the Nobel Committee, with news that he and Robert Aumann had jointly won that year’s prize for economics. During the fourth call, when asked how winning felt, he answered: “Well, it feels busy.” He was nothing if not truthful. He also confessed to feeling confused about which bit of his work had won the prize.

It might have been his work on addiction—flicked off like ash from his own struggles with smoking. Economists must understand, he wrote, the man who swears “never again to risk orphaning his children with lung cancer”, yet is scouring the streets three hours later for an open shop selling cigarettes. Mr Schelling’s work laid (largely unacknowledged) foundations for future behavioural economists. In his thinking, addicts have two selves, one keen for healthy lungs and another craving a smoke. Self-control strategies involve drawing battle lines between them.

The prize could also have been for his work on segregation, showing how mild individual preferences could lead to extreme group…Continue reading

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ApprovedBusinessBusiness and finance

Indian business prepares to tap into Aadhaar, a state-owned fingerprint-identification system

THERE are two ways to sign up to Jio, a new and irresistibly priced mobile-telephony service which Mukesh Ambani, the boss of Reliance Industries, a conglomerate, launched in September 2016 and which is luring tens of millions of new customers each month. One way requires a wad of documents, multiple signatures and plenty of patience, since Jio takes days or weeks to go through “know-your-customer” procedures. The second way is magically simple: the person rests a finger on an inch-wide scanner, and if the print matches the identity the customer is claiming, Jio downloads the information it needs from the Indian authorities and activates the phone line within minutes.

Jio is tapping a database called Aadhaar, after the Hindi word for “foundation”. It is a cloud-based ID system that holds the details of over a billion Indians. The government’s purpose in setting it up in 2009 was to help the state correctly direct welfare payments to those entitled to them. By early 2017 all Indian adults should have provided their fingerprints, iris scans, name, birth date, address and gender in return for a single, crucial, 12-digit number.

In the public…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

What not to expect in 2017

IF 2016 was a year of shocks, what will the next 12 months bring? It is time for the annual tradition (dating all the way back to 2015) when this column tries to predict the surprises of the coming year.

By definition, a surprise is something the consensus does not expect. A regular survey of global fund managers by Bank of America Merrill Lynch (BAML) points to what most people believe. Following the election of Donald Trump, investors are expecting above-trend economic growth, higher inflation and stronger profits. They have invested heavily in equities and have a much lower-than-normal exposure to bonds.

So it is not too difficult to see how the first surprise might play out. Expectations for the effectiveness of Mr Trump’s fiscal policies are extraordinarily high. But it takes time for such policies to be implemented, and they may be diluted by Congress along the way (especially on public spending). Indeed, it may well be that demography and sluggish productivity make it very hard to push economic growth up to the 3-4% hoped for by the new administration. Neither fiscal nor monetary stimulus has done much to lift Japan out of its torpor,…Continue reading

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Business and financeGulliver

The best cities for some last-minute Christmas shopping

CHRISTMAS in New York is a time when, in the words of Meyer Berger, the city tries “to match the gems from her endless treasure chest against the winking and sparking brilliants in Heaven’s vault”. Only grinches fail to succumb to the seasonal spirit when the snow is falling in Manhattan, the steam is rising from the pavements and the lights twinkle. For many, though, Christmas means one thing: the chance to shop. New York may be magical, but is it the best place to stock up on gifts? Gulliver decided to compare the Big Apple with other shopping draws around the world. 

To be a good place to shop, a city first needs a wide selection of things to buy. We used a ranking by CB Richard Ellis, a real-estate firm, to assess the penetration of global retailers in cities around the world. Second, it must not break the bank. So we applied cost-of-living data from The Economist Intelligence Unit, our sister company, both on the average cost of a night’s stay and the price of the sort of items Christmas…Continue reading

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