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Economics in the News - April 12-18 How Economics impacts our lives on a daily basis

Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.

"Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work." -- Stephen King, author
COVID-19 has pushed many of India’s middle class into poverty. According to the Pew Research Center, 32 million of the 54 million people driven into poverty from the middle-class last year resided in India. Now a second wave of the virus has arrived, and lockdowns are being brought back in some states. The vaccination campaign has been slow with less than nine percent of the population inoculated.

Last year more than 100 million Indians were left jobless and the government has been reluctant to increase spending substantially as other developed nations have done. Economists are projecting a rebound for India in the next year. Prior to the pandemic, India had a middle-class population of approximately 99 million, according to Pew Research. [The New York Times]

Britain is the latest country to explore a digital currency. The Bank of England and the Treasury announced that they are working together to assess the benefits of a central bank digital currency being touted as “Britcoin.” The Bank of England said that if a digital currency was created, it would exist along with cash and bank deposits.

Only the Bahamas currently has a digital currency backed by state authorities, but China is testing a digital currency in several cities. The European Central Bank has said that a digital euro could be developed within four years. [Associated Press]

A new study from the Federal Reserve shows that the economic impact during the first year of the COVID-19 pandemic for smaller businesses wasn’t as bad as many experts were predicting. An estimated 800,000 businesses closed in 2020, 200,000 more than a typical year.

Barber shops, nail salons and other personal service businesses were the most impacted with more than 100,000 additional closures beyond historically normal levels. Economists say that the government aid, including the Paycheck Protection Program helped small businesses to remain in business. [The Wall Street Journal]

The United States economy continues to show signs of recovery. Retail sales climbed 9.8 percent in March, according to the Commerce Department. That’s on the heels of a 2.7 percent slump in February impacted by severe winter weather. Consumers are using their $1,400 stimulus checks and feel more secure after becoming vaccinated.

The strong sales aided the Dow Jones Industrial Average and S&P 500 to new highs. Additionally, the number of Americans filing for new unemployment benefits dropped by 193,000 from the week prior, as the 576,000 who filed claims is the lowest since the week ending March 14, 2020. [NPR]

Twelve of the world’s richest and most storied soccer clubs announced their intention to form a breakaway Super League competition that would challenge and rival the UEFA Champions League and Europa League competitions. Some of the top clubs to announce their intentions include the six largest clubs in England, including Manchester United and Liverpool. Real Madrid and Barcelona in Spain, along with Juventus and A.C. Milan in Italy.

The 12 founding members are seeking three additional founding members, along with five qualifiers each season. The teams plan to hold midweek matches in a season-long competition. The proposal would upend the economics and structure of European competition with the largest clubs and the would-be permanent founding members of the Super League keeping the largest portions of the wealth. Soccer authorities, political figures and leagues across Europe have all condemned the concept. The teams plan to begin play “as soon as practicable.” [The New York Times]

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All images credited to iStock.