News & Commentary:

Articles/Commentary

Markets must prepare for more volatility
Axel Weber (FT) Jan 1, 2018
Never before have central bank balance sheets been so large and interest rates so low.

Free Trade Has Been a Boon for Energy Independence
Merrill Matthews (WSJ) Jan 1, 2018
Nafta delivers a triple win for the U.S., Canadian and Mexican oil and natural-gas industries.

What to Expect From the Global Economy in 2018
James A. Haley (CIGI) Jan 1, 2018
For more than 70 years, a number of international agreements have made the global economy a wellspring of economic prosperity. It is too early to say whether the Trump administration's disruptions in 2017 will have lasting effects, but three trends warrant close monitoring at the onset of 2018.

Can China Internationalize the RMB?
Saori N. Katada (FA) Jan 1, 2018
Lessons from Japan.

Short-term gains can lull us into long-term losses
Freek Vermeulen (FT) Jan 2, 2018
Tacit processes such as innovation too often lose out in favour of cost cutting.

New world disorder and the fracturing of the west
Martin Wolf (FT) Jan 2, 2018
The geopolitical situation remains tense, although the world economy is improving.

Peak Growth: Three Reasons the Global Economy Could Top Out in 2018
Joachim Fels (PIMCO) Jan 2, 2018
The conclusion from PIMCO’s latest Cyclical Forum is that 2017–2018 could well mark the peak for economic growth in this cycle and that investors should start preparing for several key risks that lie ahead in 2018 and beyond.

China's Silk Road needs Western thread
Brian Caplen (Banker) Jan 2, 2018
Western banks and companies need to engage in China's world-changing Silk Road project or face being left on the sidelines.

An Unusually Balanced US Recovery
Olivier Blanchard and Colombe Ladreit de Lacharrière (PIIE) Jan 2, 2018
Economic expansions come to an end in many ways. Usually they succumb to an unanticipated, adverse shock. Sometimes however, they die from their own dynamics, from imbalances that sustain the expansion but that cannot go on forever: An increasing current account deficit leads to worries about external debt and triggers a sudden stop; a consumption boom naturally comes to an end when consumers have adjusted to their new level of spending; a housing boom turns out to have been excessive, triggering a housing bust.

Europe’s MiFID II Challenge to U.S. Finance
Bloomberg View Jan 2, 2018
The new rules are proving tough to implement, but they'll give Europe an edge in the end.

Markets Benefited From What Didn't Happen in 2017
Mohamed Aly El-Erian (Bloomberg View) Jan 2, 2018
Nine expected events didn't materialize, leading to a banner year.

5 Things to Fear in a Strong Global Economy
Daniel Moss (Bloomberg View) Jan 2, 2018
An unpredictable Fed. Chinese debt. Downward spirals. Trump tweets. Southeast Asian politics. (Hello, 2018.)

Markets Show Ardor for Tax Plan in Stocks, Not the Dollar
Neil Dutta (Bloomberg View) Jan 2, 2018
Earnings and the economy remain the primary driver for equities, while events in Washington now appear to be more of a tailwind.

Land Is Underrated as a Source of Wealth
Noah Smith (Bloomberg View) Jan 2, 2018
In the long term, housing does about as well as stocks. It's also a major driver of inequality.

A New Commodities Boom Doesn't Mean Ecological Doom
Mac Margolis (Bloomberg View) Jan 2, 2018
The world's renewed appetite for natural riches once again tests Latin America.

Democracy in Iran? The Demographics Say Yes
Leonid Bershidsky (Bloomberg View) Jan 2, 2018
It takes a maturing population to succeed at revolution. Think of Tunisia's. And Iran's.

The Missing Ingredients of Growth
Michael Spence and Karen Karniol-Tambour (Project Syndicate) Jan 2, 2018
Several positive macroeconomic trends suggest that the global economy could finally be in a position to achieve sustained and inclusive growth. But whether that happens will depend on whether governments can muster a more forceful response to changing economic and technological conditions.

Why Low Inflation Is No Surprise
J. Bradford DeLong (Project Syndicate) Jan 2, 2018
The persistence of low inflation in developed countries in recent years has confounded central bankers and economic policymakers, because they believe that declining unemployment should drive up aggregate demand, and thus prices. But what if many of the assumptions underlying the conventional wisdom about inflation no longer apply?

D-Day Venezuela
Ricardo Hausmann (Project Syndicate) Jan 2, 2018
As conditions in Venezuela worsen, the solutions that must now be considered include what was once inconceivable. A negotiated political transition remains the preferred option, but military intervention by a coalition of regional forces may be the only way to end a man-made famine threatening millions of lives.

Has China’s Economic Growth Finally Stabilized?
Yu Yongding (Project Syndicate) Jan 2, 2018
Though China’s financial system is fraught with vulnerabilities, many economists believe that the country has at last entered a new period of stable growth of about 6.5% per year – an assessment echoed by the IMF. Given slowing fixed-asset investment growth, however, they would do well to rein in their expectations.

Does Trade Fuel Inequality?
Jeffrey Frankel (Project Syndicate) Jan 2, 2018
To explain the rise in inequality that began in the 1980s and has accelerated since the turn of the century, many have pointed out that indicators of globalization, such as the trade-to-GDP ratio, have also been rising rapidly over the same period. But does that correlation imply a causal link between trade and inequality?

The rate of return on everything
Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick and Alan Taylor (VoxEU) Jan 2, 2018
The rate of return on capital plays a pivotal role in shaping current macroeconomic debates. This column presents findings from a new dataset covering returns of major asset classes in the advanced economies over the last 150 years. The data offer new insights on several long-standing puzzles in economics, and uncover new relationships that seem at odds with some fundamental economic tenets.

The sources of export success
Stephen Redding and David Weinstein (VoxEU) Jan 2, 2018
Existing research on export heterogeneity between countries has typically focused on the importance of individual factors. This column presents a unified framework for understanding these contributions in concert. Using US and Chilean data, it demonstrates that products within firms, firms within sectors, and sectors in aggregate are indeed imperfect substitutes. It further shows that models that assume no quality shifts and no changes in variety perform poorly on trade data.

The geopolitics of international currency choice
Barry Eichengreen, Arnaud Mehl and Livia Chitu (VoxEU) Jan 2, 2018
Economists have provided detailed analyses of the economic basis of international currency status, but they have paid less attention to the geopolitical underpinnings. This column sheds light on the geopolitical premium enjoyed by the US thanks to its security alliances and ‘dollar diplomacy’.

The Global Economic Expansion: Mind the Risks
Jay H. Bryson (WF) Jan 2, 2018
A global economic expansion has been in train for eight years, and we look for it to continue in 2018 and 2019. That said, there are risks associated with any forecast, and readers would be well advised to be mindful of some of the more prominent risks at present.

What’s Ahead for the U.S. Economy in 2018
Jeremy Siegel (K@W) Jan 2, 2018
It was an unexpectedly stellar year for U.S. stock markets in 2017. According to Wharton finance professor Jeremy Siegel, since most of the good news regarding the economy has been baked into indexes now, markets will likely take a breather in 2018.

Iran and the oil price
Nick Butler (FT) Jan 3, 2018
Increasing oil exports would be an obvious way to fund more public spending.

China economy stable but housing to hit growth
FTCR Jan 3, 2018
Real estate again weakest link as FTCR Business Activity Index drops below 50.

For Bond Traders, 2018 Won't Be Business as Usual
Scott Dorf (Bloomberg View) Jan 3, 2018
The Fed, inflation and increased Treasury supply are likely to cause yields to shift higher in a parallel move.

To Resist the Robots, Invest in People
Stephen Groff (Project Syndicate) Jan 3, 2018
Widespread automation has yet to come to Asia's developing economies; but it will soon enough, and governments would do well to start preparing their workforces now. In addition to appropriate tax and labor-market policies, publicly provisioned vocational and skills-training programs will play a crucial role.

Clustering does not make firms more resilient
Kristian Behrens, Brahim Boualam and Julien Martin (VoxEU) Jan 3, 2018
Policymakers strive to encourage resilience among firms. We often assume that industry clustering creates resistance to shocks. This column uses the evidence from Chinese imports in the Canadian textile industry to show that firms in clusters were in fact no more resilient to the ‘China shock’.

China’s protectionism comes home to roost
FT View Jan 4, 2018
The US block of the Ant/MoneyGram deal is part of a larger backlash.

UK braces itself for low growth and rising rates
Chris Giles (FT) Jan 4, 2018
The FT’s annual survey offers an outlook to displease both sides of the Brexit divide.

Greece risks complacency as its bailouts wind down
Tony Barber (FT) Jan 4, 2018
Europe views the country as a locus of stability after Tsipras’s remarkable turnround.

Britain has made itself a Brexit straitjacket
Philip Stephens (FT) Jan 4, 2018
In setting out red lines, Theresa May has created a bespoke trap for the UK on trade.

The global economy is ignoring President Trump. Should it?
David J. Lynch (WP) Jan 4, 2018
President Trump had been in the White House for just three weeks when the analysts at Fitch Ratings in London decided that he was a threat to the global economy.

Is the Elephant Graph Flattening Out?
Justin Sandefur (CGD) Jan 4, 2018
The World Inequality Report updates and extends the famous elephant curve, showing slower gains for much of the globe, and even more concentration of economic growth in the top 1 percent.

China Fails to Woo U.S. With Financial Sector Opening
Alicia García-Herrero (Brink) Jan 4, 2018
When China announced reforms to open up its financial sector, the reaction from the Trump administration was muted at best. Reaction from investors was also muted. The announcement has not fully cast away doubts about the speed and depth of the opening going forward.

A Tool for Making Sense of the Cryptocurrency Markets
Aaron Brown (Bloomberg View) Jan 4, 2018
Filter out the noise and focus on the important trends.

Markets Are Less Stable Than They Seem
Satyajit Das (Bloomberg View) Jan 4, 2018
Central banks have created the illusion of calm. It won't last.

Who Runs This World? Look Beyond the Ballot
Daniel Moss (Bloomberg View) Jan 4, 2018
Trump, Brexit and other chaos seemingly hasn't perturbed markets. Perhaps because central bankers have quietly taken over.

Short-Term Thinking Distorts Economic Policy
Michael R Strain (Bloomberg View) Jan 4, 2018
Higher taxes could reduce inequality quickly, but not as effectively as patiently increasing productivity.

A Good German Idea for 2018
Yanis Varoufakis (Project Syndicate) Jan 4, 2018
While many Europeans agree that institutional reforms are needed to revive integration efforts, there is deep disagreement on what to do, and how to do it. The place to start is to recognize, with Immanuel Kant, that to be rational means more than being able to deploy your means efficiently in order to achieve your ends.

Europe Between Trump and Xi
Zaki Laïdi (Project Syndicate) Jan 4, 2018
French President Emmanuel Macron is trying to advance a new kind of "offensive multilateralism." But unless the European Union as a whole embraces the cause, Europe risks becoming a casualty of China’s efforts to bend the multilateral system to its own will or, worse, Trump’s efforts to dismantle it altogether.

China’s Soft and Sharp Power
Joseph S. Nye (Project Syndicate) Jan 4, 2018
As democracies respond to China’s use of information warfare, they have to be careful not to overreact. Much of the soft power that democracies wield comes from civil society, which means that these countries' openness is a crucial asset.

Household inequality and the consumption response to shocks
Gene Amromin, Mariacristina De Nardi and Karl Schulze (VoxEU) Jan 4, 2018
A widening gap between rich and poor has been extensively documented for many countries and economies. This column explores how the wealth gap affects output and consumption changes in response to aggregate shocks. Lower- and higher-wealth households face different borrowing constraints, and have different marginal propensities to consume. Different levels of access to financial liquidity thus play a major role in the overall consumption dynamics during an economic downturn.

How merchant guilds became obsolete
Prateek Raj (VoxEU) Jan 4, 2018
In medieval Europe, trade depended on personal relationships, which were usually mediated by merchant guilds. The column argues that increasing incentives to do business with merchants outside the guild system, and the availability of better information about those trading partners, led to the decline of merchant guilds in the 16th century. This occurred first in coastal cities that were early adopters of printing technology.

Corruption, bribery, and public sector hiring in developing countries
Jeff Weaver (VoxDev) Jan 4, 2018
Government jobs are often allocated based on bribes and patronage. How does this process work, and can this lead to good outcomes?

Brexit raid on a British financial success story
FT View Jan 5, 2018
Paris’s assault on UK fund management would be counterproductive.

The UK's Brexit options
Douglas A. Rediker (Brookings) Jan 5, 2018
Following the United Kingdom and European Union's agreement on the terms of their “divorce” last month, an explanation of the gap between British political expectations and the likely outcome of the next round of Brexit negotiations.

Europe Can't Afford a Leaderless Germany
Bloomberg View Jan 5, 2018
Maybe Germany can get by without a government, but the euro zone needs a leader in Berlin.

Stock Investors Will Benefit Most From Corporate Tax Overhaul
Ben Carlson (Bloomberg View) Jan 5, 2018
Inequality will worsen because the wealthy are by far the largest owners of equities.

Commodities' Modest 2018 Growth Will Be Offset by Risk
Shelley Goldberg (Bloomberg View) Jan 5, 2018
Here are the major macroeconomic forces influencing global prices.

Europe Shouldn't Let a Good Recovery Go to Waste
Ferdinando Giugliano (Bloomberg View) Jan 5, 2018
The euro-zone boom can only last so long. Now is the time to complete the monetary union.

What Makes an Inventor?
Philippe Aghion, Ufuk Akcigit, Ari Hyytinen and Otto Toivanen (Project Syndicate) Jan 5, 2018
Economists have long examined the factors determining whether someone becomes an inventor, and they have generally found that the best step aspiring innovators can take is to be born to the right parents. But new research suggests that household income may be masking the influence of other related factors.

Will Global Trade Survive 2018?
Robert A. Manning (FP) Jan 5, 2018
Under Trump, the international trade regime is at risk. This year could see it topple.

Africa’s Generational War
John Githongo (FP) Jan 5, 2018
Last year was a good one for Africa’s autocrats. But young Africans have launched a democratic revolution — and they’ve got the numbers on their side.

India’s Economic Woes Are Piercing Modi’s Aura of Invulnerability
Jeffrey Gettleman & Hari Kumar (NYT) Jan 6, 2018
Prime Minister Narendra Modi’s policies are being criticized as India’s hot economy cools. But with society so polarized, his Hindu base still appears solid.

Iran’s Protesters Want One Thing: Accountability
Laura Secor (NYT) Jan 6, 2018
The impulse to separate the economic from the political malaise risks missing the point.

Why Trump Is Probably to Blame for the Weak Dollar
Leonid Bershidsky (Bloomberg View) Jan 6, 2018
According to the Mercury and Mars hypothesis of currency choice, "America First" hurts the American currency.

Creativity and freedom
Michel Serafinelli and Guido Tabellini (VoxEU) Jan 6, 2018
Innovation is often concentrated in certain geographic areas, or ‘creative clusters’. This column uses novel data on famous births to explore the dynamics of creativity in European cities between the 11th and 19th centuries. The results show that creativity tends to precede economic prosperity, and that city institutions that protect personal and economic freedoms are conducive to radical innovation in a variety of domains.

Three trends to move markets in 2018
Rana Foroohar (FT) Jan 7, 2018
Wages and corporate spending among the topics to watch in business and economics.

Big German banks muscle in on retail
Olaf Storbeck (FT) Jan 7, 2018
Deutsche and Commerzbank aim to win business from struggling local savings banks and co-operatives.

Trump Courts Economic Mayhem
Robert B. Zoellick (WSJ) Jan 7, 2018
This year we’ll find out how serious he is about protectionism. So far the signs aren’t good.

Modi’s anxious search for growth
Suman Bery (EAF) Jan 7, 2018
There's no consensus on why India's growth has remained lacklustre. But India's twin balance sheet problem is one reason.

Why India and China must take the lead in the Asian century
Dhiraj Nayyar (EAF) Jan 7, 2018
India needs to capture a much larger share of the global market than its present 1.6 per cent and it needs a greater share of foreign investment.

Banking union is not enough to save the eurozone
Euclid Tsakalotos (FT) Jan 8, 2018
Economic recovery should not obscure need for reform of Europe’s financial system.

An Ominous New Year for India
Mihir Sharma (Bloomberg View) Jan 8, 2018
Just as growth picks up, macro numbers are looking shaky.

Investors Should Heed the Warning From Treasuries
Komal S Sri-Kumar (Bloomberg View) Jan 8, 2018
Bonds, not stocks, have been the better predictor of the two recessions in the 21st century.

5 Things to Watch on Global Energy Front in 2018
Nathaniel Bullard (Bloomberg View) Jan 8, 2018
Trends in electric buses, fewer cars and U.S. oil exports in 2017 could tell us a lot about the future.

Giddy Markets and Grim Politics
Kenneth Rogoff (Project Syndicate) Jan 8, 2018
Economists have endless debates about whether culture or institutions lie at the root of economic performance. But there is every reason to be concerned that the recent wave of populism is a threat to both.

How to Break Up Europe’s Axis of Illiberalism
Slawomir Sierakowski (FP) Jan 8, 2018
If the EU really wants to punish Poland, it should turn up the pressure on Hungary.

China’s War on Poverty Could Hurt the Poor Most
Eugene K. Chow (FP) Jan 8, 2018
The Chinese government is pushing people out of rural squalor — and into urban dependence.

On three canonical responses to labour saving technical change
Ravi Kanbur (VoxEU) Jan 8, 2018
Technological innovation is broadly accepted as a driving force behind diverging wage trends in the last three decades. If this is set to continue, policymakers must choose how to respond to the ensuing income inequality. This column assesses two established policy response ideas – state-sponsored formal education, and tax and transfer mechanisms – and postulates a third, namely, that the pace and distributional effects of technological change should themselves be policy goals. A policy intervention that would make innovation more labour intensive would be the most powerful response of all.

Valuation Ratios for Households and Businesses
Thomas Mertens, Patrick Shultz, and Michael Tubbs (FRBSF Econ Letter) Jan 8, 2018
Current valuation ratios for U.S. equities and household net worth are high relative to historical benchmarks. The cyclically adjusted price-to-earnings ratio reached its third highest level on record recently, and the ratio of household net worth to disposable income, which includes a broad set of household assets, stands at a record high. Such extreme values of these ratios have historically been followed by reversions toward their long-run averages. However, other current factors, such as low interest rates, caution against bearish forecasts.

The world economy hums as politics sours
Martin Wolf (FT) Jan 9, 2018
But growth remains vulnerable to financial crises, inflation shocks and war.

The weaponisation of the language of trade
Rebecca Harding (FT) Jan 9, 2018
Linking foreign and domestic policy with populist rhetoric presents a nation as victim.

Are Big Brands the next market bubble?
Miles Johnson (FT) Jan 9, 2018
Investors may find their assumptions about consumer packaged goods companies prove costly.

Emerging market sovereigns tap buoyant bond demand
Steven Johnson (FT) Jan 9, 2018
Funds see record inflows despite deteriorating valuations and weaker credit quality.

Global investors can ill-afford to ignore China’s equities
Howard Wang and Jennifer Wu (FT) Jan 9, 2018
Landmark inclusion of A-shares on MSCI’s emerging market index is just the beginning.

Beijing's Grip on Internet Finance Is Tightening
Martin Chorzempa (PIIE) Jan 9, 2018
The days of laissez-faire are numbered for financial technology companies in China.

Trade and Central Banks Will Make Life Painful for Investors
Jared Dillian (Bloomberg View) Jan 9, 2018
You want to be bullish when monetary policy is loose and bearish when it's getting less accommodative.

Why the Bank of Italy Wants to Change the Subject
Ferdinando Giugliano (Bloomberg View) Jan 9, 2018
Rome wants the ECB to be tougher on Germany and France.

The Economy May Be Set for a Supply-Side Surprise
Timothy A Duy (Bloomberg View) Jan 9, 2018
The Fed could be too pessimistic about the fundamental capacity for growth.

The Fed Just Can't Quit Its Forward Guidance Habit
Daniel Moss (Bloomberg View) Jan 9, 2018
Markets now rely on hints from central bankers, a clever art from an institution that used to speak with one voice.

In Defense of Economic Populism
Dani Rodrik (Project Syndicate) Jan 9, 2018
Populists’ aversion to institutional restraints extends to the economy, where they oppose obstacles placed in their way by autonomous regulatory agencies, independent central banks, and global trade rules. But while populism in the political domain is almost always harmful, economic populism can sometimes be justified.

The effectiveness of hiring credits: French evidence from the Global Crisis
Pierre Cahuc, Stéphane Carcillo and Thomas Le Barbanchon (VoxEU) Jan 9, 2018
Despite their widespread use in the US and across Europe during the Global Crisis, the empirical evidence on the effectiveness of hiring credits is unclear, particularly in the context of recessions. This column uses the French hiring credit programme of 2008-09 to show that credits can be very effective at boosting job creation at low cost when they are unanticipated and temporary.

Social structure and conflict in sub-Saharan Africa
Jacob Moscona, Nathan Nunn and James Robinson (VoxEU) Jan 9, 2018
In recent years, it has become clear that characteristics of pre-colonial African societies are an important determinant of their current economic development. This column evaluates the hypothesis that segmentary lineage organisation – a common social structure among ethnic groups in sub-Saharan Africa – causes more conflict today. Ethnic groups in Africa with a social structure marked by kinship are found to show a greater propensity for violent conflict.

Ethiopia needs to change its authoritarian course
FT View Jan 10, 2018
Economic achievements remain fragile without political settlement.

Traditional growth measures are a red herring
David Pilling (FT) Jan 10, 2018
Invented in the manufacturing age, GDP is unsuited to the digital economy.

Can Accommodative Monetary Policies Help Explain the Productivity Slowdown?
Maurice Obstfeld (IMF) Jan 10, 2018
JThe current cyclical upswing should not obscure the widespread and persistent productivity slowdown we have seen across advanced, emerging, and low-income countries alike since the global financial crisis (GFC).

Dollar May Hold the Key to the Global Rally in Stocks
Ben Emons (Bloomberg View) Jan 10, 2018
A resurgence in the U.S. currency can tighten financial conditions and reverse some of the good spirits currently embedded in global markets.

The Pensions That Ate Latin America
Mac Margolis (Bloomberg View) Jan 10, 2018
Budget-busting safety nets disproportionately benefit the well-off, aggravating a fiscal crisis.

Bond Market's Bulls Are Shaken, If Not Shattered
Scott Dorf (Bloomberg View) Jan 10, 2018
There are unmistakable signals from central banks that the era of unlimited liquidity is ending.

Why Is Japan Populist-Free?
Ian Buruma (Project Syndicate) Jan 10, 2018
Contemporary Japan may have its flaws, but it is now much more egalitarian than the United States, India, or many countries in Europe. By remaining a country of, by, and for the middle class, where the most affluent tend to be discreet, Japan has avoided the dangerous politics roiling developed and developing countries alike.

Ready or Not for the Next Recession?
Barry Eichengreen (Project Syndicate) Jan 10, 2018
Policymakers normally respond to recessions by cutting interest rates, reducing taxes, and boosting transfers to the unemployed and other casualties of the downturn. But, for a combination of economic and political reasons, the US, in particular, is singularly ill-prepared to respond normally.

Europe Has Completely Turned the Tables on Brexit
Leonid Bershidsky (Bloomberg View) Jan 10, 2018
Britain is paying for threatening to walk away from the EU without a deal.

Selective Default by Local Governments in China
Haoyu Gao, Hong Ru and Dragon Yongjun Tang (VoxChina) Jan 10, 2018
We identify bank loans to China’s local government financing vehicles and find that 1.7% of the loans that matured during the sample period failed to make the due payments. The LGFV loan default rate is much higher for commercial banks than for the China Development Bank, which provides more comprehensive financing for local governments than typical commercial banks. This selective default pattern is weaker during the ¥4-trillion stimulus period but stronger after 2010 when commercial banks exited the LGFV market.

Tight monetary policy is not the answer to weak productivity growth
Maurice Obstfeld and Romain Duval (VoxEU) Jan 10, 2018
The widespread and persistent productivity slowdown witnessed since the Global Crisis had already begun in advanced and low-income countries prior to the crisis. This column argues that the crisis amplified the slowdown by creating ‘productivity hysteresis’, and that monetary policy played an ambiguous role. Policymakers must now address the legacies of the crisis through innovation, education policies, and structural reforms.

Private data, not private firms: The real issues in Chinese investment
Derek Scissors (AEI) Jan 10, 2018
The main development in 2017 for China's investment around the world was the curbing of private Chinese investment in the US and the expansion of state-owned enterprises' investment in Europe. There were signs late in the year that Beijing could allow more private spending in 2018. The United States, at least, may not be interested. American skepticism grew first due to a wave of attempted Chinese technology acquisitions and most recently with the possibility of Americans' personal data being held by Chinese companies. Formal US restrictions are pending. The Belt and Road Initiative consists primarily of Chinese construction projects rather than investment. These continue to be substantial, but there was no sign of intensified activity in 2017, and the extreme dollar figures some associate with Belt and Road are currently unreasonable.

Earmarking tax revenue comes back into fashion
FT View Jan 11, 2018
Hypothecation is economically ill-advised if politically astute.

Flashing red metrics give the US Federal Reserve a reason to act
Jason Cummins (FT) Jan 11, 2018
The right question is whether new risks to financial stability have arisen.

Brazil remains priced for perfection in the eyes of investors
Andres Schipani and Joe Leahy (FT) Jan 11, 2018
Elections this year seen retaining the country’s recent reform drive.

Donald Trump’s difficult decision on steel imports
Economist Jan 11, 2018
Being the world’s trade policeman is tough work.

How China won the battle of the yuan
Economist Jan 11, 2018
Capital controls, economic strength and a bit of luck go a long way.

What a China Response to U.S. Tax Cuts Means for the Yuan
Tracy Chen (Bloomberg View) Jan 11, 2018
Whatever happens, expect a a drag on the Asian's nation's current-account balance and a subdued exchange rate.

Higher Oil Prices Won't Deter Consumers or the Fed
Neil Dutta (Bloomberg View) Jan 11, 2018
The increase is not enough to pressure the central bank's inflation goals.

What's Happened in the 10 Years Since the Economy Fell Apart
Justin Fox (Bloomberg View) Jan 11, 2018
The Great Recession gave way to a long, slow recovery. There's something to be said for endurance.

Why We Have to Talk About a Bubble
Jean-Michel Paul (Bloomberg View) Jan 11, 2018
The prolonged program of quantitative easing has sent asset prices soaring, even if traditional signs of inflation are muted.

Accelerating Africa’s Energy Transition
Charlotte Aubin (Project Syndicate) Jan 11, 2018
Rebalancing Africa’s energy mix to include greener forms of power is an environmental and economic imperative. But the most efficient way for Africa to move away from fossil fuels will be to recognize that the oil sector still has a vital role to play in Africa’s energy future.

The Danger in Today’s Good Economic News
Kemal Dervis (Project Syndicate) Jan 11, 2018
Failure to stem the rise of inequality will fuel social tensions and already-resurgent nationalism, producing disruptions that will ultimately lead to losses for everyone. That is why today’s good growth news may not be as promising as many believe.

Good Times at Last?
Jim O'Neill (Project Syndicate) Jan 11, 2018
Despite today's unprecedented political risks and large-scale geopolitical realignments, key economic indicators from around the world are looking better than they have in years. But whether global economic growth exceeds 4% this year will depend on central bankers' ability to strike the right monetary-policy balance.

GDP at risk
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Jan 11, 2018
The likelihood of another crisis-induced plunge in GDP is much lower today than it was a decade ago, but we are still at an early stage of building a financial stability policy framework that corresponds to the inflation-targeting framework that forms the basis for monetary policy. This column describes a step forward in developing such framework – the concept and measurement of GDP at risk, which helps us to understand the linkages between the financial sector and the real economy at an aggregate level.

Nations Are Wielding Their Sovereign Wealth Funds as Tools of Power
Adam Ereli and Theodore Karasik (FP) Jan 11, 2018
Sovereign wealth funds have become powerful political tools.

How the Eurozone Might Split
Mark Blyth and Simon Tilford (FA) Jan 11, 2018
Could Germany become a reluctant hegemon?

A simple story about a complex bond market
FT View Jan 12, 2018
It is a little too easy to believe that the long bull market is finally over.

Nationalisation: the wrong answer to a real question
Martin Wolf (FT) Jan 12, 2018
Shifting ownership would not solve the problems facing the rail and utility industries.

Watch the bond market, not equities
Gillian Tett (FT) Jan 12, 2018
Governments and leveraged borrowers would suffer if interest rates rise quickly.

The lesson for diagnosing a bubble
Tim Harford (FT) Jan 12, 2018
It is easy to laugh at past follies exaggerated for comic or sermonising effect.

Don’t write off green investing in China
Henny Sender (FT) Jan 12, 2018
Beijing’s efforts to cut pollution could be a smart move to back.

For Bond Investors, Low Expectations in a Low-Yield World
Carla Fried (NYT) Jan 12, 2018
Small portfolio tweaks, emerging markets and money market funds are options — but prospects for big profits are rare.

Global Elite? At Davos? That’s News to Mnuchin
Alan Rappeport (NYT) Jan 12, 2018
President Trump’s trip to the World Economic Forum is raising eyebrows in Washington given the event’s reputation as a retreat for the “globalists” he disdains.

Corporate Tax Reform Favors Domestic Production, Not US Multinationals
Gary Clyde Hufbauer and Zhiyao (Lucy) Lu (PIIE) Jan 12, 2018
The Tax Cuts and Jobs Act of 2017 (TCJA) signed into law by President Donald Trump in December slashed the US corporate tax rate from 35 to 21 percent, starting January 1, 2018. The new law makes the United States a more attractive place for both US and foreign firms to do business.But for US multinational corporations (MNCs), the law is not exactly a New Year’s gift for their operations abroad.

Cryptocurrencies Steal Volatility Away From Stocks
Dean C Curnutt (Bloomberg View) Jan 12, 2018
Earnings drive fluctuations in equities, but there are no such yardsticks for bitcoin -- only the waxing and waning of enthusiasm for a potentially revolutionary asset class.

Why More Sanctions Won’t Help Venezuela
Francisco Rodríguez (FP) Jan 12, 2018
The people, not the government, will pay the price.

Bond markets: Is the bull run over?
Robin Wigglesworth (FT) Jan 13, 2018
A sell-off in government bonds has triggered fresh concern that a three-decade boom in the $50tn market could be coming to an end.

Vietnam’s economy stays its course despite external headwinds
Suiwah Leung (EAF) Jan 13, 2018
The fundamentals of Vietnam's economy remain strong, with GDP growing by 6.4 per cent last year. The government appears committed to keeping budget deficits and public debt levels under control and determined to make the most of the proceeds of continuing divestment from state-owned enterprises. But the country's strong dependence on international trade and investment exposes its economy to geopolitical risks as well as growing protectionist sentiments globally.

Does the Fed need a new playbook?
Robert J. Samuelson (WP) Jan 14, 2018
Just because we can overhaul the central bank, it doesn’t mean we should.

Vietnam’s diplomatic acrobatics in the post-American era
Thomas Jandl (EAF) Jan 14, 2018
The fundamental economic and geopolitical drivers which made Vietnam an enthusiastic participant in the TPP process are still present, with energies now focused on securing a bilateral deal with the US.

Dubai's the Very Model of a Modern Mideast Economy
Matthew A Winkler (Bloomberg View) Jan 14, 2018
Saudi Arabia is trying to reduce its dependence on oil. A neighbor has already done it.

How to fix Russia’s broken banking system
Andrei Movchan (FT) Jan 15, 2018
The central bank is blind when it comes to oversight despite draconian regulations.

Angola woes risk sharpening focus on Africa’s debt
Steven Johnson (FT) Jan 15, 2018
A potential debt restructuring is likely to prompt questions about sub-Saharan region.

Ensuring a Sustainable Global Recovery
David Lipton (IMF) Jan 15, 2018
I would like to offer an overview of the outlook for the global economy and the Asia-Pacific region. And since the fortunes of both are so closely linked to China, I will also outline some key policy challenges facing Beijing.

Who Will Profit Off the Next Crash?
Satyajit Das (Bloomberg View) Jan 15, 2018
Predicting another crisis is easier than making money off of it.

How Britain Could Change Its Mind About Brexit
Anatole Kaletsky (Project Syndicate) Jan 15, 2018
Nigel Farage, the former UK Independence Party leader, now says that the June 2016 Brexit referendum could be overturned. He's right, and the first requirement is to dispel the aura of inevitability surrounding Britain's withdrawal from Europe.

Europe’s Doom Loop in Reverse
Daniel Gros (Project Syndicate) Jan 15, 2018
Unlike before the 2011-2012 crisis, the eurozone seems to be locked in a benign credit cycle, in which lower risk premia allow both banks and governments to refinance at lower rates, more credit is available for the real economy, and the resulting recovery increases government revenue. But how long can this cycle persist?

Making America’s Deficits Great Again
Jeffrey Frankel (Project Syndicate) Jan 15, 2018
The new tax legislation pushed through by Donald Trump and congressional Republicans is virtually certain to raise the budget deficit and, in turn, the current-account deficit. Whatever the resemblance to the Reagan-era tax cuts of 1981-1983, it's not morning in America.

Low inflation for longer
Thomas Hasenzagl, Filippo Pellegrino, Lucrezia Reichlin and Giovanni Ricco (VoxEU) Jan 15, 2018
The ECB's Survey of Professional Forecasters supports the ECB’s view that inflation in the Eurozone will pick up and will be back within the central bank's target range in 2019. This column disagrees. Using a model that formalises the widely held view that inflation dynamics are a function of three components – long-term expectations, the Phillips curve, and oil price movement – it forecasts Eurozone inflation in 2019 at only 1.1%, a rate which is close to that implied by the bond markets.

The positive and negative effects of offshoring on domestic employment
Brian Kovak, Lindsay Oldenski and Nicholas Sly (VoxEU) Jan 15, 2018
The impact of offshoring on domestic employment is hotly debated as the US looks to renegotiate trade treaties, but the existing literature is conflicting in its conclusions. This column employs the variation in the timing of US treaties to infer the causal effect of tax treaty-induced changes in foreign affiliate employment on changes in US domestic employment. Employment declines at some firms are offset by expanded employment at others, yielding a modest positive net effect of offshoring on US employment, albeit with substantial employment dislocation and reallocation of workers.

Emerging markets seek to forge their own paths
FT View Jan 16, 2018
Assets and economies have done well despite higher US interest rates.

Global recovery is a chance for the emerging world
Martin Wolf (FT) Jan 16, 2018
A policy push to improve education and productivity can stop a slowdown in growth.

Stocks Are Headed for a Fall
Martin Feldstein (WSJ) Jan 16, 2018
The Fed is playing catch up, and as inflation and rates rise, asset prices will revert to previous norms.

Firming Core CPI Inflation Points to Rise in 2018
Jeremie Banet (PIMCO) Jan 16, 2018
We expect U.S. core CPI of around 2.1% by the end of 2018 – a modest acceleration relative to 2017.

How to Avoid Indicator Scandals: Three Ways to Fix the Doing Business Index
Alan Gelb and Vijaya Ramachandran (CGD) Jan 16, 2018
On Friday, the World Bank’s chief economist, Paul Romer, told the Wall Street Journal that the Bank unfairly influenced its own competitiveness rankings. He highlighted the case of Chile which suffered lower rankings on the Doing Business index during the Bachelet administration versus the Piñera years, and recalculated these rankings on his personal blog. Today, he issued a clarification of his views.

Mixed Reviews for the Single Resolution Board
Nicolas Véron (PIIE) Jan 16, 2018
The establishment in 2015 of the Single Resolution Board (SRB), a new agency of the European Union, is one of the most significant European banking reforms of recent years. The SRB was set up to quickly resolve banks that are failing or likely to fail, as part of a wider effort to break the vicious cycle between banks and sovereigns that nearly destroyed the euro area in 2011–12.

Big is the only way in banking
Brian Caplen (Banker) Jan 16, 2018
For all the talk of boutiques and fintechs, the banking market is more unequal than ever and the future promises more of the same.

The EU Should Let the City Thrive
Bloomberg View Jan 16, 2018
Despite Brexit, there's room for a deal on financial services.

When Picking Cryptocurrency Winners, Don't Think Long Term
Aaron Brown (Bloomberg View) Jan 16, 2018
Will governments smash digital currencies, or will digital currencies smash government monopolies on money? Neither extreme is likely.

It’s Still Getting More Expensive to Be Poor
Mark Whitehouse (Bloomberg View) Jan 16, 2018
Inflation is higher for households with the lowest incomes.

The Fed Is Losing Control of the Financial Markets
Lena Komileva (Bloomberg View) Jan 16, 2018
The flip-side of tolerating easier financial conditions while U.S. growth is robust is valuation distortions in markets.

Liberal Democracy in Africa Can Wait
Simplice A. Asongu (Project Syndicate) Jan 16, 2018
Since the election of President Donald Trump, the United States, which remains one of Africa’s top donors, has focused more on the principles China favors – like political stability, trade, and counterterrorism – than on democracy and human rights. Is the Beijing Model better for Africa in the short and medium term?

While Germany Slept
Helmut K. Anheier (Project Syndicate) Jan 16, 2018
Many Germans may prefer the modesty and incrementalism that have characterized Angela Merkel’s past chancellorships. But a minority government forced to muster coalitions of the willing to address the critical issues confronting Germany and Europe could escape the constraints of such expectations, enabling much-needed reform.

Embracing the New Age of Automation
Christopher Pissarides and Jacques Bughin (Project Syndicate) Jan 16, 2018
With rapid advances in automation and artificial intelligence in recent years, many are worried about a jobless future and sky-high levels of inequality. But the large-scale technologically driven shift currently underway should be welcomed, and its adverse effects should be managed with proactive policies to reinvest in workers.

Informal taxation: A new regime
Benjamin Olken (VoxDev) Jan 16, 2018
Informal taxation is common in developing countries. Ben Olken presents facts on this new system based on 10 surveys around the world.

The effort students put into standardised tests varies widely by country
Francesca Borgonovi, Collin Hitt, Jeffrey A. Livingston, Sally Sadoff and Gema Zamarro (VoxEU) Jan 16, 2018
The Programme for International Student Assessment is a global standardised test of students’ mathematics, reading, and science skills. This column describes how the results of various studies using different approaches all find evidence that many students who take the PISA do not try as hard as they can, and that the level of effort varies widely across countries. The findings illustrate that a combination of ability and motivation may be more important than ability alone.

Fantasy Island
Saul Elbein (FP) Jan 16, 2018
Exporting British Columbia’s abundant energy resources should have been a slam dunk. How did a multibillion-dollar dream go up in smoke?

The Answers Are Out There
Various (FP) Jan 16, 2018
Contrary to conventional wisdom, solutions to many of the world’s toughest problems already exist — you just need to know where to look for them.

Private debt can help drive African growth
Runa Alam and Ibrahim Sagna (FT) Jan 17, 2018
There are opportunities for investors that traditional capital markets cannot reach.

China’s Economic Growth Looks Strong. Maybe Too Strong.
Keith Bradsher (NYT) Jan 17, 2018
The country reported higher annual growth, but implausibly smooth numbers prompt experts to look for other ways to assess the world’s No. 2 economy.

Killing Nafta Would Ruin American Farmers
Karl Rove (WSJ) Jan 17, 2018
And given how many live in red states, it would doom the GOP in the 2018 elections.

The millionaire class is booming
Robert J. Samuelson (WP) Jan 17, 2018
It’s conceivable that 10 percent of households are now in the club.

The rise and fall of bitcoin
Economist Jan 17, 2018
Investors in bitcoin are learning some very old lessons.

The International Finance Corporation’s Mission Is Facilitating Risky Investments—So Why Is It Taking on Less and Less Risk?
Vijaya Ramachandran and Charles Kenny (CGD) Jan 17, 2018
The IFC is designed to catalyze investments in countries that investors might consider too risky to invest in alone. But our recent analysis of IFC’s portfolio found that it is shying away from risky investments, raising serious questions about whether the IFC is focusing on the places where it can make the most difference.

Reconciling Opportunity and Resilience in Changing Times
John Drzik (Brink) Jan 17, 2018
The world’s major countries have been enjoying solid economic growth over the past few months, and this recovery clearly creates opportunity for expansion and innovation. However, the operating risk for companies in today’s global environment should not be underestimated. Building resilience against a wide and expanding array of potential shocks is required for sustainable success.

Initial Coin Offerings Require New Regulations
Martin Chorzempa and Daniel Heller (PIIE) Jan 17, 2018
The term “initial coin offering” (ICO) has entered the lexicon to describe the method used by thousands of individuals and businesses to raise more than $3 billion in bitcoin and other digital currencies to fund new enterprises and products.

Bitcoin Isn't the Future of Money
Bloomberg View Jan 17, 2018
How should central banks proceed with cryptocurrencies? Very carefully.

Sorry, Bitcoin Fans. Digital Currency Is Still a Dream.
Joe Nocera (Bloomberg View) Jan 17, 2018
I've been waiting for decades for someone to invent a currency for online purchases. And still am.

Please Remove the Punchbowl Before Markets Get Any Crazier
Jared Dillian (Bloomberg View) Jan 17, 2018
There's a great big pile of evidence that financial markets have reached the speculative mania phase.

The Wrong Way to Pressure China
Michael Schuman (Bloomberg View) Jan 17, 2018
Too many mergers are being upheld without a clear rationale.

China’s Bond Sell-Off Won't Signal a Global Bear Market
Tracy Chen (Bloomberg View) Jan 17, 2018
But that doesn’t mean it will be a buying opportunity, yet.

New U.S. Tax Rules Are a Gift to Europe
Leonid Bershidsky (Bloomberg View) Jan 17, 2018
U.S. legislators have effectively established an optimal corporate tax range for the EU -- something France and Germany have long tried and failed to do.

Is Global Warming Making Us Hungrier?
Bjørn Lomborg (Project Syndicate) Jan 17, 2018
After achieving dramatic gains against hunger and famine, the world runs the risk of backsliding, owing to poorly considered choices. But if we accept the claim that climate change is to blame for a recent uptick in global hunger and malnutrition, we also risk embracing the costliest and least effective solutions.

GDP Should Be Corrected, Not Replaced
Urs Rohner (Project Syndicate) Jan 17, 2018
The hazards of relying solely on gross domestic product as a measure of overall economic activity have become obvious over time, especially as corporate profits have outpaced GDP growth in key economies. But none of the flaws in GDP are fatal, and policymakers should focus on fixing them, rather than seeking an entirely new framework.

Rural Property Rights and Agricultural Productivity
A. V. Chari, Elaine M. Liu, Shing-Yi Wang and Yongxiang Wang (VoxDev) Jan 17, 2018
The Rural Land Contracting Law (RLCL), announced in 2003, is a landmark law for agricultural households in rural China. It provides new legal protections for leasing agricultural land. In theory, increasing free market exchanges of land should improve agricultural productivity by facilitating the movement of land towards the most productive users. We find that the property rights reform led to a 10 percent increase in land rental activity among rural households, a redistribution of land towards more productive farmers, and a 7 percent increase in the aggregate productivity of land. We also observe an increased responsiveness of land allocation across crops to changes in crop prices.

How to reconcile risk sharing and market discipline in the euro area
Agnès Bénassy-Quéré, Markus K Brunnermeier, Henrik Enderlein, Emmanuel Farhi, Marcel Fratzscher, Clemens Fuest, Pierre-Olivier Gourinchas, Philippe Martin, Jean Pisani-Ferry, Hélène Rey, Isabel Schnabel, Nicolas Véron, Beatrice Weder di Mauro and Jeromin Zettelmeyer (VoxEU) Jan 17, 2018
The euro area continues to suffer from critical weaknesses that are the result of a poorly designed fiscal and financial architecture, but its members are divided on how to address the problems. This column proposes six reforms which, if delivered as a package, would improve the euro area’s financial stability, political cohesion, and potential for delivering prosperity to its citizens, all while addressing the priorities and concerns of participating countries.

Cycles in Credit, Economics and National Finance
John E. Silvia, Azhar Iqbal and Shannon Seery (WF) Jan 17, 2018
Business cycle trends differ across major sectors; while some series are mean-reverting, others are shifting over time. Careful analysis leads to a better understanding of 'normalcy.'

Regulatory stress tests and the blind scales of justice
Paul H. Kupiec (AEI) Jan 17, 2018
One of the newest fads in banking regulation is the use of econometric models to simulate a bank's performance over a hypothetical multiyear economic stress scenario and then using the "stress test" results to calibrate the bank's minimum regulatory capital requirement. This regulatory approach for setting capital requirements has become popular in the US and Europe, yet there is no evidence that regulators' econometric stress test models generate accurate forecasts of bank performance under stress scenario conditions. Regulators keep the specific details of their stress test models confidential, inhibiting independent verification of their models' accuracy. These and other features of regulatory stress tests raise important legal issues and create the potential for costly misallocations of banking resources.

‘Make Trade, Not War’ is China’s daring plan in the Middle East
Pepe Escobar (AT) Jan 18, 2018
Under the Belt and Road Initiative, Beijing aims to connect western China to the eastern Mediterranean.

To improve global health, tax the things that are killing us
Lawrence Summers (FT) Jan 18, 2018
The world is going through a huge health transition, where the problems of the 6bn people who live in emerging markets are increasingly the problems of the 1bn people in rich countries .

Brexit: Political power trumps mutual interest
Chris Giles (FT) Jan 18, 2018
Britain’s shortcoming is that only sees the world from London’s perspective.

How to stop countries sliding back into civil war
Economist Jan 18, 2018
Ensuring that peace holds may mean striking a grubby deal.

US Looks Towards System-Shaping Trade Agenda as New Year Begins
Bridges, Volume 22, Number 1 Jan 18, 2018
US trade negotiating activity is picking up as the new year gets underway, with some meetings already taking place in early January and others planned for later this month. Separately, a series of reports from domestic investigations on select trade issues are due to be released within the first weeks of this year, with potentially significant implications for Washington’s trading relationships.

Spotlight on Global Economy as Davos Approaches, Trade Ministers to Consider WTO Next Steps
Bridges, Volume 22, Number 1 Jan 18, 2018
A host of officials, including several world leaders, are preparing to descend on the Swiss alpine town of Davos next week for four days of high-level discussions which are expected to touch on questions regarding how to improve global cooperation on issues such as the economy, trade, and climate change.

Singapore Becomes ASEAN Chair, Charts Path for Future of Regional Integration and Cooperation
Bridges, Volume 22, Number 1 Jan 18, 2018
Last week, Singaporean Prime Minister Lee Hsien Loong launched his country’s chairmanship of the Association of Southeast Asian Nations (ASEAN) for 2018. As the Philippines passes along the baton to their city-state neighbour, Lee commenced the agenda-setting process and outlined directions for the bloc’s future with a focus on regional economic integration.

Getting Practical With Emerging Risks
Richard Smith-Bingham (Brink) Jan 18, 2018
The extraordinary velocity of change is spurring many companies to question not just their basic resilience, but also their expectations of risk management. As our new report contends, risk leaders should devote more resources to grappling with emerging threats, which requires looking beyond the issues that can immediately and easily be anchored to business performance.

Venezuela's Ill-Advised "Cryptocurrency" Scheme: An Update
Monica de Bolle and Martin Chorzempa (PIIE) Jan 18, 2018
Beset by political and economic crises, the Venezuelan government provided more details in early January about its plan to issue a new so-called cryptocurrency called the “petro,” which it hopes to use to avoid a financial meltdown.

Why the World Bank Should Ditch the "Doing Business" Rankings—in One Embarrassing Chart
Justin Sandefur and Divyanshi Wadhwa (CGD) Jan 18, 2018
Last week the World Bank's Chief Economist, Paul Romer, told the Wall Street Journal the Bank had manipulated its own competitiveness rankings to undermine Chile's socialist government, and hinted Chile might not be alone—then he retracted the claim. Romer's conspiracy theories probably aren't credible, but neither are the Doing Business numbers.

Faltering Nafta Talks May Set U.S. Markets' Future
Komal S Sri-Kumar (Bloomberg View) Jan 18, 2018
Canada and Mexico are the two largest destination for U.S. exports.

Japan and Europe Start the Central Bank Reset
Daniel Moss (Bloomberg View) Jan 18, 2018
Yes, the global economy really is improving. And yes, officials are going to respond accordingly.

China's Real Offshore Disaster
Adam Minter (Bloomberg View) Jan 18, 2018
There isn't much left for a million tons of light oil to kill.

German Support Unlocks Euro-Zone Change
Ferdinando Giugliano (Bloomberg View) Jan 18, 2018
Germany had been an obstacle to more fiscal integration in Europe. Not any more.

Weaker Dollar Won’t Derail Global Growth
Mohamed Aly El-Erian (Bloomberg View) Jan 18, 2018
Europe and Japan could counter the greenback's decline.

Fear the Stock Market's Exuberance, Not the Economy
Timothy A Duy (Bloomberg View) Jan 18, 2018
A drop in equities isn't likely to trigger a recession, and the next recession will be milder than the last two.

Low Economic Volatility Won't Keep Markets Calm Forever
Ben Carlson (Bloomberg View) Jan 18, 2018
Stability itself can create instability when investors become too complacent.

How to Fix the Euro Zone Without Setting Off Alarms
Leonid Bershidsky (Bloomberg View) Jan 18, 2018
A proposal by prominent French and German economists is designed to defeat facile arguments against reform.

Reconsidering the ‘China shock’ in trade
Robert Feenstra, Hong Ma, Akira Sasahara and Yuan Xu (VoxEU) Jan 18, 2018
International trade has become a focus of political debates in the US and around the world, but while previous studies focus on the job-reducing effect of the surging imports from China or other low-wage countries on the US employment, the job-creating effect of exports has receive much less attention. This column employs two approaches – an instrumental variable regression analysis and a global input-output approach – to argue that the negative effects of import competition on US employment are largely balanced out once the country’s job-creating export expansion is taken into account.

Management and the wealth of nations
John Van Reenen (VoxDev) Jan 18, 2018
A 15-year survey of 12,000 firms across 34 countries shows that management practices explain a large share of productivity gaps.

China’s Bid to Upend the Global Oil Market
Keith Johnson (FP) Jan 18, 2018
Could a new oil futures contract mark a seismic shift in Beijing’s efforts to globalize its currency?

Chinese Economic Outlook: Further Slowing in Store?
Jay H. Bryson and Abigail Kinnaman (WF) Jan 18, 2018
The Chinese economy continued to expand in Q4, with real GDP growth coming in slightly above consensus at 6.8 percent on a year-ago basis. However, we look for the Chinese economy to slow in the coming quarters, and in this report we discuss key risks to our outlook that remain areas to watch.

The Roar of the Animal Spirits: A New Index
John E. Silvia, Azhar Iqbal, Harry Pershing and Shannon Seery (WF) Jan 18, 2018
Major U.S. equity indices are at all-time highs, with the S&P 500 index closing above the 2,700 mark in early January for the first time ever. Whispers that animal spirits are at play are being heard around the markets. In this special report, we introduce a new index to quantify the animal spirits.

Current Economic Development is Unsustainable. How Can We Reverse this Trend?
Jacques Prescott (WFR) Jan 18, 2018
Despite tremendous efforts at the global and local levels, real progress towards sustainability seems to be deterred by the dark forces of the markets, financial systems and corporate lobbies. What can be done to reverse the situation and achieve sustainable results?...

This Way Up: New Thinking About Poverty and Economic Mobility
Tamar Jacoby (AEI) Jan 18, 2018
The challenge of ensuring economic mobility is more pressing than ever. Too many poor people are trapped in safety-net programs that relieve material hardship but do nothing to help them escape from poverty, while a neglected working class struggles to keep up with globalization. More than 50 years after the War on Poverty, a wealth of new conservative thinking is percolating in Washington and beyond, including fresh ideas about policy and proposals that look beyond government to harness the power of communities. This booklet of short essays commissioned by Opportunity America in conjunction with AEI showcases some of the best of this new thinking — proposals for welfare reform, wage subsidies, workforce training, school choice, and restoring the norms of marriage and responsible parenting, among other topics.

Populist swing alarms financial titans
Gillian Tett (FT) Jan 19, 2018
The biggest perceived 2018 danger is that somebody uses weapons of mass destruction.

The vanishing of China risk
David P. Goldman (AT) Jan 19, 2018
China equity market risk is now on par with developed markets, but Chinese stocks are still much cheaper -- now they should outperform

Davos Is an Opportunity to Talk about Migration Solutions
Michael Clemens and Kate Gough (CGD) Jan 19, 2018
As world leaders convene in Davos this week, the global migration crisis finds itself buried in the agenda.

Big News From China: Its Implosion Didn't Happen
Daniel Moss (Bloomberg View) Jan 19, 2018
Somehow the nation once seen as a major swing factor has become the rock on which global growth depends.

Higher Yields in 2018 Don't Mean Market Turmoil
Mohamed Aly El-Erian (Bloomberg View) Jan 19, 2018
Thank better growth dynamics in the U.S. and Europe.

Eurozone Outlook: Economic Growth Masks Underlying Fragility
By Nicola Mai (PIMCO) Jan 19, 2018
Economic recovery is in full swing but investors should remain vigilant of the long-term risks

The Payoff and Peril of Smart Infrastructure
Stuti Joshipura (Brink) Jan 19, 2018
The benefits of smart infrastructure are substantial but the risks are severe, and proper risk planning is not keeping up with implementation. Insurers, governments and technologists must work together to address this issue.

Is This the End of Money?
Geoffrey Garrett (K@W) Jan 18, 2018
The age of cryptocurrencies.

India’s Urban Awakening
Ejaz Ghani (Project Syndicate) Jan 19, 2018
Urbanization advances economic development, but it also poses major challenges, from managing congestion and pollution to ensuring that growth is inclusive and equitable. India has the tools it needs to overcome these challenges, and can do so if its leaders must use them wisely.

Why societies cooperate
Eugenio Proto, Aldo Rustichini and Andis Sofianos (VoxEU) Jan 19, 2018
Three attributes are often suggested to generate cooperative behaviour – a good heart, good norms, and intelligence. This column reports the results of a laboratory experiment in which groups of players benefited from learning to cooperate. It finds overwhelming support for the idea that intelligence is the primary condition for a socially cohesive, cooperative society. Warm feelings towards others and good norms have only a small and transitory effect.

Microeconomic shocks drive aggregate fluctuations in Europe
Christian Ebeke and Kodjovi Eklou (VoxEU) Jan 19, 2018
The economics profession has generally explained large movements in macroeconomic aggregates such as GDP or employment by shocks to other aggregates. This is in part due to the difficulty of translating micro or localised shocks into macro-relevant ‘news’. This column argues that idiosyncratic shocks at the biggest European firms are behind 40% percent of aggregate GDP fluctuations in Europe. These results have implications for the effectiveness of traditional demand-side policies in the fine-tuning of granular economies.

There is 'little doubt' about the promised bounty of genetically modified crops
Gary W. Brester (AEI) Jan 19, 2018
The US has allowed genetically modified (GM) technologies to be used since 1996, while the European Union has banned their use. Over 90 percent of US corn and soybean acreage is planted to a GM variety. US corn and soybean crop yields have increased more than European crop yields since the adoption of GM technologies. Although factors other than GM technologies could be responsible for increasing differences between US and European corn and soybean yields, European wheat yields (for which GM technologies are not commercially available in either region) have continued to increase relative to US wheat yields. The trade-offs associated with banning GM technologies involve lower worldwide food output, higher unit production costs, higher food prices, increased input usage, and especially for the world's poorest citizens, more food insecurity, hunger, and malnutrition.

Our Big Mac index shows fundamentals now matter more in currency markets
Economist Jan 20, 2018
Since last July, cheap currencies have narrowed the gap against the dollar.

How Corruption and Cronyism in Banking Fueled Iran’s Protests
Thomas Erdbrink, David D. Kirkpatrick and Nilo Tabrizy (NYT) Jan 20, 2018
Thousands lost their savings in the collapse of shady banks, part of a broader economic system plagued by insider dealing, mismanagement and inefficiency.

Trump’s big choice at Davos
Lawrence Summers (FT) Jan 21, 2018
Will he reassure his audience that the US believes in strong global institutions?

Oil shock fails to disturb optimistic mood
Gavyn Davies (FT) Jan 21, 2018
Rising oil prices have frequently spelt the end of global economic upswings but not this time.

China: market bulls beat the shorts — for now
Robin Wigglesworth and Gabriel Wildau (FT) Jan 21, 2018
Big bets on the collapse of the country’s indebted economy have largely failed. Did the hedge funds misread the signs or were they just too early?

China’s breathtaking transformation into a scientific superpower
Robert J. Samuelson (WP) Jan 21, 2018
The best response to this technological competition — reinvigorate America’s own technological base.

Why Venezuela Suffers
Mary Anastasia O’Grady (WSJ) Jan 21, 2018
The regime enters phase two of its plan for a Pan-American revolution.

China’s economy enters a new season of stability
Yu Yongding (EAF) Jan 21, 2018
China's corporate debt-to-GDP ratio is actually falling.

The View From the Bitcoin Bubble
Nathaniel Popper (NYT) Jan 22, 2018
A Times tech reporter explains how he ended up on the cryptocurrency beat — and what a strange assignment it’s been since then.

With Davos Approaching, the Global Economy Is Surging, but Growth Could Stall
Michael Schuman (NYT) Jan 22, 2018
A robust and ‘synchronized’ recovery has been slow in coming, and some fear growth will peak next year.

How to Invest in an Overpriced World
Burton G. Malkiel (WSJ) Jan 22, 2018
Two strategies that work: broad diversification and rebalancing. Also, try to minimize your costs.

If You’re Looking for Digital Opportunities in Davos, Here Are Some Big Ones
Alan Gelb, Anit Mukherjee and Kyle Navis (CGD) Jan 22, 2018
For the policymaker looking to improve services and the delivery of benefits, or for the financial institution trying to expand its customer base, the gap between technical solutions and the situation of the average technology user represents fertile ground for the many new opportunities that the digital economy provides.

Davos attendees should beware the slowing of potential growth
Ayhan Kose (Brookings) Jan 22, 2018
While solid growth gives leaders much to celebrate as they gather for the World Economic Forum, Ayhan Kose says there are two threats to global recovery that should not be overlooked.

Cryptocurrency Markets Aren't All the Same
Leonid Bershidsky (Bloomberg View) Jan 22, 2018
Different flavors of digital money reflect emerging bets on promising applications. It's not just mindless speculation anymore.

Trump Has an Opening in China
Christopher Balding (Bloomberg View) Jan 22, 2018
Both Trump and the Chinese government have bad ideas on trade. That may offer a chance for progress.

Why Markets Shrug Off Political Turmoil
Mohamed Aly El-Erian (Bloomberg View) Jan 22, 2018
In the last few years, investors have ignored expert advice about a long list of issues.

Germany's Economy Needs More Investment
Ferdinando Giugliano (Bloomberg View) Jan 22, 2018
Despite a boom, more spending would make up for years of wage restraint.

Securing the Digital Transition
Carl Bildt (Project Syndicate) Jan 22, 2018
Within a few decades, the Internet has transformed the global economy and rendered the old Westphalian order increasingly obsolete. But without a new governance framework to manage cyber threats and abuses, what has been a boon to globalization could become its undoing.

Oil’s Uncertain Comeback
Mohamed A. El-Erian (Project Syndicate) Jan 22, 2018
Unless there is a notable geopolitical shock, traditional oil producers should treat the recent oil-price gains as a temporary windfall, not a permanent state of affairs. To prolong the price recovery as long as possible, they should reinforce their collective production discipline.

The Stupid Economy
Harold James (Project Syndicate) Jan 22, 2018
Advances in automation and artificial intelligence already pose a clear threat to countless occupations, just as the technologies of the Industrial Revolution did for many forms of manual labor in the nineteenth and twentieth centuries. But this time, it is not just our jobs that are in danger.

Modi and Bibi Are Brothers in Arms
S. Samuel C. Rajiv (FP) Jan 22, 2018
India and Israel won’t let ideology get in the way of booming bilateral trade,

How Do Banks Cope with Loss?
Rhys Bidder, John Krainer and Adam Shapiro (FRBSF Econ Letter) Jan 22, 2018
When lenders experience unexpected losses, the supply of credit to borrowers can be disrupted. Researchers and policymakers have long sought estimates of how the availability of loans changes following a shock. The sudden oil price decline in 2014 offers an opportunity to observe precisely how affected lenders altered their portfolios. Banks that were involved with oil and gas producers cut back on some types of lending—consistent with traditional views of bank behavior. However, they expanded other types of lending and asset holdings with a bias towards less risky securities.

The liberal international order is sick
Martin Wolf (FT) Jan 23, 2018
Delegates need to consider what is to be done to save the model from wreckage.

Private equity: flood of cash fuels buyout bubble fears
Javier Espinoza (FT) Jan 23, 2018
The buyout sector is on a tear as investors hunt for higher returns. But as competition and valuations increase, some fear a dangerous new cycle.

How global economic growth can drive fight against inequality
Christine Lagarde (FT) Jan 23, 2018
From corruption to climate change, the threats to our economies and our world ignore borders.

Central banks are not the culprit behind a weaker dollar
John Plender (FT) Jan 23, 2018
Falling reserve currency has loosened global financial conditions.

Trump Starts His Trade War
WSJ Jan 23, 2018
His new tariffs punish many for the sake of three companies.

Italy's Big Banking Mystery
Marcello Minenna (WSJ) Jan 23, 2018
The country’s financial institutions are regaining their health, yet they’re hardly increasing corporate lending.

Mr. Trump’s Tariffs Will Not Bring Back Manufacturing Jobs
NYT Jan 23, 2018
The president’s trade move could backfire with his working-class base.

The Bank of Japan needs a new target – one that isn’t deflation
William Pesek (AT) Jan 23, 2018
The bank concluded a two-day policy meeting on Tuesday with no change in policy. That is a mistake.

TPP Redux: Why the United States Is the Biggest Loser
Jeffrey J. Schott (PIIE) Jan 23, 2018
On the first anniversary of President Trump’s announcement that the United States would withdraw from the Trans-Pacific Partnership (TPP), the remaining 11 signatories in that pact have agreed in Tokyo to enter into a revised pact without US participation. The biggest loser from their agreement, not surprisingly, is the United States.

Increasing External Debt and Electoral Cycles in Emerging Markets: How Do They Affect Prospects for Long-Term Growth?
Liliana Rojas-Suarez (CGD) Jan 23, 2018
Recently, the World Bank published its latest Global Economic Prospects report, which highlights a welcomed cyclical recovery for all major regions of the world following recent slow growth. I was pleased to participate in a panel discussion at CGD analyzing the report’s findings, and to share my perspectives both on its implications and on future global outlooks—¬-especially for emerging market and developing economies.

It’s Time for a Code of Conduct on Transparency for Financiers Backing PPPs
Michael Jarvis and Charles Kenny (CGD) Jan 23, 2018
Public-Private Partnership models continue to proliferate, backed by multilateral development banks old and new. But the volume of PPPs in developing countries has stagnated since the global financial crisis, and they won’t deliver unless they are designed and implemented well. Making more and better public-private investments will take a far greater commitment to transparency from participants in the deals. Financiers—MDBs in particular—should take the lead.

The Economy's So Rosy, Let's Talk About Recession
Daniel Moss (Bloomberg View) Jan 23, 2018
We don't know what will cause it, or when. But it's coming, and central banks are unprepared.

IMF Outlook Adds to the Allure of Oil and Metals
Jason M Schenker (Bloomberg View) Jan 23, 2018
Commodity-focused nations are likely to benefit significantly from a global economy that appears to be firing on all cylinders.

A Basic Income for Everyone? It's Not a Crazy Idea
Noah Smith (Bloomberg View) Jan 23, 2018
Machines might displace lots of workers. Here's a possible fix.

The World’s Priciest Stock Market
Robert J. Shiller (Project Syndicate) Jan 23, 2018
It is impossible to pin down the full cause of the high price of the US stock market. That alone should remind all investors of the importance of diversification, and that the overall US stock market should not be given too much weight in a portfolio.

Making Migration Work
Michael Spence (Project Syndicate) Jan 23, 2018
The UN is right to underscore the benefits of broad-based international cooperation on migration, particularly regarding measures that could, over time, reduce migrant flows by improving conditions in source countries. But, to be politically acceptable in virtually any country, such cooperation must respect national sovereignty.

Asia’s Central Banks Should Prepare to Raise Interest Rates
Lee Jong-Wha (Project Syndicate) Jan 23, 2018
In the wake of the global economic crisis, Asia’s central banks, like their counterparts in the advanced economies, took on a leading role in supporting domestic growth. But, as the global economic recovery gains momentum, the time has come to begin tightening monetary policy.

A Year of Successes in Global Health
Melvin Sanicas (Project Syndicate) Jan 23, 2018
Progress on a number of human development indicators exceeded expectations in 2017, with global health benefiting from 18 major successes. Even in a mediocre year, eradication of numerous diseases, expansion of universal health care, and much more saved millions of lives.

Central banks to the rescue
Bryane Michael (VoxDev) Jan 23, 2018
Could central banks co-investing in private companies hold a possible solution to many developing government budgetary issues?

The macroeconomic performance paradox: A new model
Wendy Carlin and David Soskice (VoxEU) Jan 23, 2018
Following the post-financial crisis recession, the UK and other high-income countries have experienced slow growth and stagnant productivity, along with both low inflation and, more recently, low unemployment. This column introduces an intuitive macroeconomic model that helps explain this puzzling combination.

Productivity and secular stagnation in the intangible economy
Jonathan Haskel and Stian Westlake (VoxEU) Jan 23, 2018
Many economists have suggested that slowing technical innovation is behind the secular stagnation and slowdown in total factor productivity growth that have plagued many advanced economies since the Global Crisis. This column argues that the recent rise of the intangible economy could play an important role. An assessment of measurement trends and the properties of intangible investment across the globe suggests that total factor productivity growth will continue to be low until governments design the institutions an intangible economy needs, and until its commercial, legal, and ethical norms are worked out.

Global value chains and firm heterogeneity
Koji Ito, Ivan Deseatnicov and Kyoji Fukao (VoxEU) Jan 23, 2018
The study of global value chains has become increasingly relevant as production becomes more and more fragmented across countries. This column uses evidence from Japan to evaluate recent theories that such chains have caused some of the country’s industries to become less competitive. The findings suggest that considering production for exports and domestic sales separately may provide a more complete picture of firm heterogeneity within industries, and a more complete picture of interconnected countries at the industry level.

Economic policy uncertainty: Detrimental to capital markets and bank lending
Orçun Kaya (DB Research) Jan 23, 2018
Economic policy uncertainty in Europe has risen to extraordinarily high levels. This stands in stark contrast to conventional measures of financial market uncertainty which are at historical lows. Uncertainty surrounding economic policies has negative spillover effects to the rest of the economy. It tends to be transmitted to capital markets and to result in higher financing costs for companies. Significant cross-country transmission of economic policy uncertainty is observable within the EU, with the UK being a net exporter. In addition, banks could turn out to be a central channel through which economic policy uncertainty is transmitted to the real economy, via subdued lending to non-financial corporations, in particular to SMEs.

China Needs Better Credit Data to Help Consumers
Martin Chorzempa (PIIE) Jan 23, 2018
Formidable barriers stand between the modern financial system and the hundreds of millions of Chinese citizens still using costly informal credit.

Tactical mis-step from Donald Trump on trade
FT View Jan 24, 2018
Tariffs on solar panels and washing machines are foolish, not ruinous.

Southern Africa faces a full-scale revolution
David Pilling (FT) Jan 24, 2018
The economic imperative means the region is a place investors would do well to watch.

Latin American populism fears overdone as stocks play catch-up
John Authers (FT) Jan 24, 2018
Elections in Brazil and Mexico unlikely to deliver populist policies that investors fear.

The U.S. Can No Longer Hide From Its Deep Poverty Problem
Angus Deaton (NYT) Jan 24, 2018
We might direct assistance to the millions of Americans whose suffering is as bad as that of poor people in Africa or Asia.

How U.S. Tariffs Will Hurt America’s Solar Industry
Varun Sivaram (NYT) Jan 24, 2018
President Trump’s action will slow down the deployment of clean energy, discourage investments in innovation and destroy jobs.

Making the Dollar Weak Again
WSJ Jan 24, 2018
Mnuchin and Trump want to reduce U.S. purchasing power.

When it comes to Davos, it’s inequality, stupid
Pepe Escobar (AT) Jan 24, 2018
This is what ‘the great and the good’ in the business world will not be discussing during the annual talk-fest at the Swiss luxury resort.

Asia is taking the lead in promoting free trade
Economist Jan 24, 2018
Asian voters know open markets have lifted billions of them out of poverty.

Can China Really Dethrone the Dollar?
Daniel Lacalle (Mises Wire) Jan 24, 2018
The reports of the end of the US dollar are greatly exaggerated.

Davos and Development: What to Expect at this Year’s World Economic Forum
Holly Shulman, Alan Gelb, Anit Mukherjee, Kyle Navis, Michael Clemens, Kate Gough, Nancy Lee and Cindy Huang (CGD) Jan 24, 2018
As world leaders gather to kick off the World Economic Forum Annual Meeting in Davos, Switzerland, CGD’s experts weigh in to shed some light on the ongoing debates, with innovative evidence-based solutions to the world’s most urgent challenges, and also discuss what’s not on the agenda but should be.

Trump's New Tariffs Will Hurt the U.S.
Bloomberg View Jan 24, 2018
This is no way to resolve trade disputes.

Meet the New Leaders on Global Trade
Bloomberg View Jan 24, 2018
Abandoned by the U.S., the 11 countries in the Trans-Pacific Partnership trade pact are going ahead anyway.

Modi Disappoints at Davos
Mihir Sharma (Bloomberg View) Jan 24, 2018
This was India's moment to lead. The prime minister seemed reluctant to.

China, U.S. Treasuries and Temporary Truths
Steven Englander (Bloomberg View) Jan 24, 2018
There are some problems with the idea that China is mulling sales of Treasuries in an attempt to strengthen its hand in trade negotiations.

U.S. Investors Need to Shed Their Home-Country Bias
Ben Carlson (Bloomberg View) Jan 24, 2018
American financial assets are expensive, but foreign markets offer higher yields.

The Euro's Surprises May Just Be Getting Started
Jason M Schenker (Bloomberg View) Jan 24, 2018
The realities of a strong economy will put pressure on the ECB to start mapping out an exit strategy from its ultra-accommodative measures.

China’s Great City Rivalries
Zhang Jun (Project Syndicate) Jan 24, 2018
In recent years, as China’s economy has become increasingly reliant on high-tech and modern service industries, jobs and growth have become concentrated in a few high-productivity cities. In fact, it is this inter-urban competition that has driven China’s economic transformation.

The Long-term Persistence of Informal Finance in China
Jinyan Hu, Chicheng Ma and Bo Zhang (VoxChina) Jan 24, 2018
By using data on 137 counties in north China, we find that the density of financial institutions (Qianzhuang and Diandang) in the late Qing period has a significant positive effect on the number and total assets of small loan companies, a dominant institution of informal finance today. The persistent effect of historical financial institutions can be explained by Confucian culture, which instills integrity, lineage solidarity and acquaintance networks.

US import surges as a pretext for protectionism
Simon Evenett and Johannes Fritz (VoxEU) Jan 24, 2018
On 22 January 2018, President Trump imposed safeguard duties on imported washing machines and solar panels and cells. This column analyses import surges into the US from 2006 to 2016 to put these tariff increases in perspective. Using a simple, theory-inspired method for identifying surges, it finds that during 2014-6 a category of manufactured good in the US had a one-in-32 chance of witnessing an import surge each year. US import surges aren’t concentrated in sectors where China has severe excess capacity either.

Bank risk weights under Basel are not comparable
Zsofia Doeme and Stefan Kerbl (VoxEU) Jan 24, 2018
Risk weights define each bank's minimum capital requirements, but many doubt the comparability of the risk weights that banks report. This column quantifies the variability of these weights across banks, and finds that the country where a bank is headquartered creates statistically significant and economically important differences. Model output floors, as recently agreed upon by the Basel Committee, would reduce this unintended risk weight heterogeneity.

Foreign direct investment, global value chains, and local development
Vito Amendolagine, Andrea Presbitero, Roberta Rabellotti and Marco Sanfilippo (VoxEU) Jan 24, 2018
A new wave of foreign direct investment has swept sub-Saharan African countries, with inflows becoming more diversified both geographically and sectorally. This column presents an analysis that shows a high degree of complementarity between involvement in global value chains and FDI. Policies supporting the entry and upgrading of countries in such chains – especially via a strong institutional setting and a well-educated labour force – can help maximise the spillovers from foreign investment.

BoJ: Don't Even Think About Normalization
Tim Quinlan and Shannon Seery (WF) Jan 24, 2018
Although the Bank of Japan (BoJ) has dialed back the pace of its bond purchases, the message from Governor Kuroda is that the BoJ remains fully committed to its accommodative monetary policy stance. In this special report we update our read of the situation, which is that the BoJ is stuck in a mode where it must signal its intent to remain ultra-accommodative even though it must eventually (and arguably already has) dial it back.

Too Much Recession: How About Price Cycles?
John E. Silvia, Azhar Iqbal and Harry Pershing (WF) Jan 24, 2018
For decision makers, too much focus is spent on trying to predict when the next recession will hit. Instead, much is lost by overlooking the behavior of critical prices over and between financial cycles.

U.S. Sanctions Weapon Is Under Threat — but Not From Bitcoin
Keith Johnson and Elias Groll (FP) Jan 24, 2018
Forget cryptocurrencies. The real threat to American sanctions power is rapid technological innovation in finance.

China’s Understanding of Global Order Shouldn’t Be Ours
Aaron Friedberg (FP) Jan 24, 2018
Contrary to what he suggests, if the liberal international system gets reduced to economics, it will no longer exist.

The banking reform that can help unite the EU
FT View Jan 25, 2018
Agreement on a common deposit scheme is the key to deeper reform.

Playing politics with France’s falling birth rate
Anne-Sylvaine Chassany (FT) Jan 25, 2018
Immigration could be the only way the country’s population will grow.

A sliding dollar may come back to bite Trump
Gillian Tett (FT) Jan 25, 2018
Speculation grows over whether the US plans to use a weaker currency to support growth.

China’s date with real financial deleveraging will have to wait
George Magnus (FT) Jan 25, 2018
The state is conflicted as regulator, owner and participant in the finance sector.

The Mnuchin Dollar and the Draghi Euro
WSJ Jan 25, 2018
Both sides risk losing the competitive-devaluation game.

How Blockchain Can End Poverty
Phil Gramm and Hernando de Soto (WSJ) Jan 25, 2018
Two-thirds of the world’s population lacks access to a formal system of property rights.

Initial Coin Offering (ICO) Mania and Its Implications for Technology-Led Social Enterprise
Michael Pisa (CGD) Jan 25, 2018
One of the bubblier aspects of the recent enthusiasm for all things blockchain has been the rise in popularity of initial coin offerings (ICOs), also known as token sales. By design, the acronym calls to mind the more traditional fundraising model of initial public offerings (IPOs), in which companies sell equity stakes to investors. With ICOs however, companies use blockchain technology to issue digital assets (usually referred to as tokens or coins) to investors rather than equity stakes. Another key difference—at least for the time being—is that ICOs are virtually unregulated. In fact, many of the advantages ICOs have over more traditional fundraising platforms derive from their unregulated status.

Pacific Nations Clinch Comprehensive Trade Accord
Bridges, Volume 22, Number 2 Jan 25, 2018
The 11 remaining Trans-Pacific Partnership (TPP) countries are set to sign their final agreement this March in Chile, after chief negotiators from the participating economies resolved the last sticking points during meetings in Tokyo this week.

US President Confirms Hefty Tariffs on Solar Products, Washing Machines
Bridges, Volume 22, Number 2 Jan 25, 2018
In a landmark trade move, US President Donald Trump has approved the imposition of global safeguard tariffs on imported solar cells or modules, as well as large washing machines for home use, with a few exceptions for countries that met certain requirements.

World Leaders in Davos Call for Cooperation to Tackle Global Challenges
Bridges, Volume 22, Number 2 Jan 25, 2018
The World Economic Forum Annual Meeting in Davos-Klosters, Switzerland, is now well underway, with various international leaders already taking the stage over the past few days to weigh in on the global economy’s challenges and opportunities. Major topics on the agenda have included women’s economic empowerment, climate change, trade and markets, and the future of globalisation and multilateralism.

A US trade war with China – tougher than the Japanese edition
Grant Newsham (AT) Jan 25, 2018
President Trump just fired his first shot in an economic war with the People's Republic of China, by imposing tariffs on Chinese-made solar panels. One almost feels nostalgic for the 1980s trade battles with the Japanese – who were similarly portrayed as threatening and bent on world domination. Such fears proved overblown – as Japan’s ‘bubble’ burst and it settled into a decades-long economic funk. Might things play out similarly with the PRC?

The End of the 'Strong Dollar' Policy (Yes, Again)
Daniel Moss (Bloomberg View) Jan 25, 2018
Don't believe everything Treasury secretaries say.

China's Banks Are Improving (Sort Of)
Christopher Balding (Bloomberg View) Jan 25, 2018
Capital ratios are still too low. But there are signs of progress.

Medieval Wisdom on When to Start Worrying About the Bond Market
Stephen Mihm (Bloomberg View) Jan 25, 2018
The Middle Ages could tell us whether we need to think about the rally's end. Or not.

Why Economic Recovery Won’t Defeat Populism
Andrés Velasco (Project Syndicate) Jan 25, 2018
During the last few years, a lively debate has taken place between advocates of economic and political/social explanations of populism. The issue is far from settled, but even if the economic explanation is right, it does not follow that the current global recovery will make much of a political difference.

The Bank of Japan’s Moment of Truth
Takatoshi Ito (Project Syndicate) Jan 25, 2018
After years of deflation, Japan's labor market is the tightest it has been in decades, and the Bank of Japan is still providing significant stimulus to the economy. But with inflation still well below target, central bankers are finding themselves between a rock and a hard place.

Changing population distribution: The roles of nature and history
Vernon Henderson, Tim Squires, Adam Storeygard and David Weil (VoxDev) Jan 25, 2018
The dynamic interplay of geography, technology, economic growth, and history has changed the way population is distributed.

Rebasing Maddison
Jutta Bolt, Robert Inklaar, Herman de Jong and Jan Luiten van Zanden (VoxEU) Jan 25, 2018
Research on long-run economic development has relied heavily on the database compiled by Angus Maddison. This column presents a new version of the Maddison Project Database based on historical growth data, but also incorporating historical cross-country income comparisons. The revisions shed new light on patterns of long-term development and cross-country income convergence.

Blockchain’s Broken Promises
Nouriel Roubini (Project Syndicate) Jan 26, 2018
Boosters of blockchain technology compare its early days to the early days of the Internet. But whereas the Internet quickly gave rise to email, the World Wide Web, and millions of commercial ventures, blockchain's only application – cryptocurrencies such as Bitcoin – does not even fulfill its stated purpose.

Trend reversal of old-age labour force participation in Germany
Axel Börsch-Supan, Irene Ferrari, Nicolas Goll and Johannes Rausch (VoxEU) Jan 26, 2018
Retirement ages in industrialised countries have been rising over the last three decades as more people work later into their lives. This column focuses on Germany, examining this trend and the contributing factors. Despite comparable trends in health, educational attainment, and spouse’s labour force participation, these three factors do not appear to explain the rise in retirement age. Instead, changes to public pension rules seem to be the key driver.

How to Lose a Trade War
Stephen S. Roach (Project Syndicate) Jan 26, 2018
The Trump administration's imposition of so-called safeguard tariffs on imports of solar panels and washing machines is directed mainly at China and South Korea. But, while neither country is responsible for America's large trade deficit, further protectionist measures seem certain – and will leave US consumers worse off.

Is Germany Catching Trump’s Tax Disease?
Marcel Fratzscher (Project Syndicate) Jan 26, 2018
The fiscal policies proposed by Germany’s emerging grand coalition government look very American. Like the US Republicans' recent tax legislation, they are likely to bring limited short-term benefits to a few and huge long-term costs to many more.

The importance of frontier knowledge for the generation of ideas
Alessandro Iaria, Carlo Schwarz and Fabian Waldinger (VoxEU) Jan 26, 2018
Access to existing knowledge fuels basic scientific progress and is key to the development of new technologies. This column studies how the decline in scientific cooperation that occurred during and after WWI affected science and innovation. The interruption of international knowledge flows led to stark declines in both the volume and quality of scientific production. This points to the merits of opening up access to scientific journals and of discerning what constitutes frontier research.

The U.K. Economic Outlook: What About Brexit Uncertainty?
Jay H. Bryson and Abigail Kinnaman (WF) Jan 26, 2018
The British economy expanded only modestly in Q4, with real GDP rising 1.5 percent year over year. In this report, we examine the uncertainties surrounding Brexit negotiations and our outlook for 2018.

Never Mind the Troika, Here’s Rouvikonas
Alexander Clapp (FP) Jan 26, 2018
Greece’s prolonged austerity has given rise to a movement of middle-class anarchism.

Inequality and recessions
Gene Amromin, Mariacristina De Nardi and Karl Schulze (FRB Chicago Fed Letter) Jan 26, 2018
The increase in inequality over the past several decades has received widespread attention from both academics and the public at large. While much of this discourse centers on either the causes or normative implications of increasing inequality, it is important to ask whether the widening gap between the rich and poor has any direct effects on macroeconomic aggregates and, in particular, on the severity of the Great Recession, when output and consumption dropped precipitously and were slow to recover.

The gaping hole in global economic governance
FT View Jan 27, 2018
Davos produced few ideas on compensating for US destructiveness.

Low-income countries’ convergence grinds to a halt Premium
Steve Johnson (FT) Jan 27, 2018
Poorest nations falling further behind middle-income states in GDP per capita terms.

Trump in Davos: dollar talk adds to trade war fears
Sam Fleming and Shawn Donnan (FT) Jan 27, 2018
Despite the president’s efforts to charm the global elite, many countries are worried about unpredictable American economic policy.

Every One of the World’s Big Economies Is Now Growing
Peter S. Goodman (NYT) Jan 27, 2018
For the first time since the global economic downturn, there is a wave of expansion that is creating jobs, lifting fortunes and tempering fears of popular discontent.

Speed under sail during the early Industrial Revolution
Morgan Kelly and Cormac Ó Gráda (VoxEU) Jan 27, 2018
The consensus among economic (but not maritime) historians that maritime technology was more or less stagnant for 300 years until iron steamships appeared in the mid-19th century is largely based on indirect measures, such as changes in the cost of shipping freight or the length of voyages. This column instead looks directly at how the speed of ships in different winds improved over time. The speed of British ships rose by around half between 1750 and 1830 (albeit from a low base) thanks to innovations like the copper plating of hulls and the move from wooden to iron joints and bolts.

Culture vs. economics: What causes poverty?
Charles Murray (AEI) Jan 27, 2018
The left says poverty is mostly about economics. The right says culture has at least as much to do with it. Charles Murray offers his view.

The Next Money-Fund Bailout
WSJ Jan 28, 2018
Republicans want to tee up mutual funds for taxpayer guarantees.

Dollar weakness driven by monetary policy after all
Gavyn Davies (FT) Jan 29, 2018
Dollar has weakened in face of Fed tightening but ‘puzzle’ explained by expectations about ECB policy.

What Venezuela’s chaos means for the oil market
Nick Butler (FT) Jan 29, 2018
The effects of the country’s collapse have begun to hit its core business.

Beware emerging markets’ rising public debt levels
Kate Allen (FT) Jan 29, 2018
Investors in search of yield warned of fiscal challenges ahead.

Oil Boom Gives the U.S. a New Edge in Energy and Diplomacy
Clifford Krauss (NYT) Jan 29, 2018
Having survived a slump, shale drilling is surging as prices recover, limiting market upheaval and providing Washington with strategic leeway.

Leaving Nafta Would Cost $50 Billion a Year
Matthew J. Slaughter (WSJ) Jan 29, 2018
America’s gross domestic product is now 0.2% to 0.3% larger than it would be without the agreement.

Beijing Attacks Hong Kong’s Rule of Law
Martin Lee (WSJ) Jan 29, 2018
The latest outrage: a three-month jail term for 21-year-old activist Joshua Wong.

To Understand China's Growth, Look at Its Tourists
Tracy Chen (Bloomberg View) Jan 29, 2018
The country's consumers are flexing muscles abroad. Leisure travel will be followed by investment and plenty of jobs in nations they visit.

The World Bank Is Searching for Meaning
Noah Smith (Bloomberg View) Jan 29, 2018
Top economist Paul Romer's stormy tenure and departure highlight deeper problems.

Don't Bet Against the Fed’s Rate Forecast
Timothy A Duy (Bloomberg View) Jan 29, 2018
The central bank is likely to stick to three hikes in 2018.

When Talking About the Dollar, Boring Is Best
Ferdinando Giugliano (Bloomberg View) Jan 29, 2018
The reaction to U.S. Treasury Secretary Steve Mnuchin's remarks on the dollar was a reminder that currency conventions matter.

What I Learned at Davos
Larry Hatheway (Project Syndicate) Jan 29, 2018
Davos man must change. But that cannot mean rejecting the core commitment to the view that human ingenuity, fostered by open societies and rewarded by markets, remains the sturdiest foundation for the advancement of humankind.

The Road to a European Transfer Union
Hans-Werner Sinn (Project Syndicate) Jan 29, 2018
In the decade since the 2008 global financial crisis and the subsequent euro crisis, European policymakers have consistently relied on Northern European countries to foot the bill for the rest of the eurozone. But what will happen in the coming decades when Northern baby boomers retire and the coffers run dry?

Independent fiscal councils and the conduct of fiscal policy: Insights from a new eBook
Roel Beetsma and Xavier Debrun (VoxEU) Jan 29, 2018
The proliferation of independent fiscal councils raises the question as to how toothless watchdogs can effectively prevent harmful policies. Even though these councils do not control any policy lever, high hopes rest in their ability to foster more stabilising and financially responsible fiscal policies. Are such hopes justified considering sketchy theory and limited evidence? What factors seem to make certain councils more effective than others? And what political conditions are conducive to establishing effective institutions? This column introduces some of the key issues related to the effectiveness of independent fiscal councils and discussed in a new eBook.

The impact of the Green Revolution on structural change
Jacob Moscona (VoxDev) Jan 29, 2018
The introduction of high-yield crop varieties led to greater entrenchment in the agricultural sector, while reducing urban and industrial growth.

Chinese expansion should be welcomed, not contained
Alastair Campbell (FT) Jan 30, 2018
The west is not the donor but the suppliant to participate in China’s growth.

After Globalization, a New Specter Could Feed Populist Politics
Eduardo Porter (NYT) Jan 30, 2018
Job-killing imports from China gave rise to the dynamics that led to President Trump’s election. Artificial intelligence could provide the next wave

Coming Soon: More Brexit Confrontations
Jacob Funk Kirkegaard (PIIE) Jan 30, 2018
Since early December, phase 1 of Britain's negotiation with the European Union over the terms of its exit have seemed to be on track, thanks to Prime Minister Theresa May's capitulation on payments to the European Union, citizens' rights, Northern Ireland, and other issues. But a number of factors are at work to ensure that the calm will not last. The European Union's greater economic and political strength and negotiating leverage will come into play in coming months.

Branches are alive and kicking
Brian Caplen (Banker) Jan 30, 2018
Banks may be closing branches in developed countries, but in emerging markets they are opening new ones.

Why Now Is the Wrong Time to Increase the Deficit
Alan S. Blinder (WSJ) Jan 30, 2018
In a growing economy, the federal government should shore up its long-run fiscal position, not blow it out.

It Matters Where Solar Panels Are Made
Justin Fox (Bloomberg View) Jan 30, 2018
It's a lot tougher to innovate when the technology doesn't start at home.

The International Economic Consequences of Mr. Trump
Jean Pisani-Ferry (Project Syndicate) Jan 30, 2018
What has fundamentally changed with the Trump administration is not that it behaves more selfishly than its predecessors, but that it seems unconvinced that the global system serves US strategic interests. For the rest of the world, the key question is whether the global system is resilient enough to survive its creator’s withdrawal.

Africa’s Arrival
Kaushik Basu (Project Syndicate) Jan 30, 2018
According to a new report by the African Development Bank, the continent's 54 countries grew by 2.2%, on average, in 2016, and 3.6% in 2017; in 2018, the AfDB report predicts, growth will accelerate to 4.1%, supported by some of the world's fastest-growing economies. Has Africa's moment finally arrived?

China’s Search for Quality Growth
Andrew Sheng and Xiao Geng (Project Syndicate) Jan 30, 2018
China’s leaders have demonstrated a willingness to accept lower rates of GDP growth as they shift toward a more balanced growth model that emphasizes human wellbeing. It will not be easy to realize the vision of "people-centered" development that President Xi Jinping announced in October 2017, but the country is on the right track.

China’s Irresistible Rise
Jim O'Neill (Project Syndicate) Jan 30, 2018
When China released its official economic data for 2017, many commentators quibbled about the data's reliability. But what they should have been talking about is China's undeniable importance to the global economy, which is becoming increasingly reliant on China's transition from industrial production to domestic consumption.

The revaluation of international banks following the crisis
Ata Bertay, Asli Demirgüç-Kunt and Harry Huizinga (VoxEU) Jan 30, 2018
Banks that internationalise can enjoy additional profit opportunities and diversification benefits as national business cycles are not perfectly synchronised. This column uses an international sample of banks in 113 countries during 2000-2015 to show that the relative valuation of international banks from high-income countries rose following the Global Crisis as they increased their loan losses, adjusted their international asset allocations, and received generous ‘too-big-to-fail’ subsidies. International banks headquartered in developing countries experienced no such revaluation following the crisis.

Eurozone Economic Outlook: Does Monetary Tightening Lie Ahead?
Jay H. Bryson and Abigail Kinnaman (WF) Jan 30, 2018
The economic expansion in the Eurozone is firmly underway, with real GDP increasing 2.7 percent in Q4 year over year. In this report, we highlight the solid growth seen across multiple sectors of the Eurozone economy at present, as well as discuss the European Central Bank's (ECB) transition towards policy normalization and eventual tightening.

Globalization Survived Populism Once—and It Can Again
Suzanne Berger (Boston Review) Jan 30, 2018
Forget retraining and compensation programs. History offers a better way forward.

A rare chance to create a pan-eurozone safe asset
FT View Jan 31, 2018
Europe’s central bank should kick-start a market that would lessen risk to stability.

Global trade works when we all play by the rules
Theresa May (FT) Jan 31, 2018
As China opens up to the world, its economy is already helping British businesses.

Saudi Arabia’s corruption crackdown risks scaring off investors
David Gardner (FT) Jan 31, 2018
Crown prince Mohammed bin Salman is combining populism at home with hawkishness abroad.

The case for GDP growth bonds
Gary Kleiman (FT) Jan 31, 2018
Securities work as automatic stabilisers and offer upside as ailing economies recover.

The long profitable march of digital China
Pepe Escobar (AT) Jan 31, 2018
The dragon is on fire when it comes to high-tech industries but a trade war with the US looms

The Fed: More Confident on Outlook and Inflation Target
Richard Clarida (PIMCO) Jan 31, 2018
The Federal Reserve reinforced the case for a hike in March and two more later this year.

China's Central Bank–Backed Digital Currency Is the Anti-Bitcoin
Martin Chorzempa (PIIE) Jan 31, 2018
The Chinese love bitcoin, but their government hates it.

Winning the Cold Currency War
Joachim Fels (PIMCO) Jan 31, 2018
Investors in Europe are more optimistic than they have been in years, but there is growing concern that U.S. dollar weakness could make the euro too strong.

Modi Should Keep His Fiscal Promises
Bloomberg View Jan 31, 2018
Investors expect a backsliding budget. India's government should surprise them.

Britain Has Lost Its Bearings on Brexit
Leonid Bershidsky (Bloomberg View) Jan 31, 2018
Nearly 600 days after the vote, it can't or won't tell the EU what it wants.

China Borrows a Lot of Money from the World Bank, and That’s Okay
Scott Morris (CGD) Jan 31, 2018
As the World Bank makes a case to its shareholders for a capital increase this year, they are grappling with an uncomfortable truth: one of their biggest borrowers, China, happens to hold the world’s largest foreign exchange reserves, is one of the largest recipients of foreign direct investment, enjoys some of the best borrowing terms of any sovereign borrower, and is itself the world’s largest sovereign lender.

Trumponomics Is Failing on Growth
Simon Johnson (Project Syndicate) Jan 31, 2018
After campaigning as a businessman who would usher in a new golden age of growth in America, US President Donald Trump's economic track record in 2017 proved disappointing. Despite large tax cuts and little standing in the way of Trump's deregulatory agenda, the US economy has performed no better under his administration than under the last.

Are Oil Prices Heading for Another Spike?
Carmen M. Reinhart and Vincent Reinhart (Project Syndicate) Jan 31, 2018
The decline in the dollar’s exchange rate seems to have gathered momentum, in part because the person who has his signature on US currency, Treasury Secretary Steve Mnuchin, seems unperturbed by its weakness. If it continues, will energy costs spiral upward?

Janet Yellen May Be Leaving the Fed at the Right Time
John Cassidy (New Yorker) Jan 31, 2018
In his State of the Union address, Donald Trump took credit for the robust economy. Meanwhile, Yellen, the person primarily responsible, was preparing to leave her job.

Privatization and Productivity in China
Yuyu Chen, Mitsuru Igami, Masayuki Sawada and Mo Xiao (VoxChina) Jan 31, 2018
Privatization has boosted Chinese firms’ productivity, both in the short run and the long run. Consumer-oriented industries saw larger gains than “strategic” (heavily regulated) sectors. Chinese patents and “new product” surveys seem less reliable, because any statistics become useless once they become policy targets.

Monetary policy with negative nominal interest rates
Gauti Eggertsson, Ragnar Juelsrud and Ella Getz Wold (VoxEU) Jan 31, 2018
Economists disagree on the macroeconomic role of negative interest rates. This column describes how, due to an apparent zero lower bound on deposit rates, negative policy rates have so far had very limited impact on the deposit rates faced by households and firms, and this lower bound on the deposit rate seems to be causing a decline in pass-through to lending rates as well. Negative interest rates thus appear ineffective in stimulating aggregate demand.

Trade and investment disputes: The role of economists
Marion Jansen, Joost Pauwelyn and Theresa Carpenter (VoxEU) Jan 31, 2018
International economic dispute settlement is under increased scrutiny. How are decisions made about the ‘fairness’ of national or foreign policies? How are damages to be paid by governments to private investors calculated? This column introduces a book with contributions from academics and practitioners that explore whether economists can be of use in addressing these and other contentious questions in international trade and investor–state disputes.