News & Commentary:

Articles/Commentary

A revolution in Africa's relations with France
David Pilling (FT) Jan 1, 2020
The abandonment of the CFA franc is a potent symbol of change.

It is time to bin the efficient markets hypothesis
Paul Woolley (FT) Jan 1, 2020
Investment strategies determined by price alone are creating systematic and chronic distortions.

The Market Surged Last Year. Don't Expect the Same in 2020.
NYT Jan 1, 2020
Stocks and bonds do not have as much room to rise this year, and Wall Street has been busy trying to rein in expectations.

Latin America's 'Oasis' Descends Into Chaos
Axel Kaiser (WSJ) Jan 1, 2020
What happened to Chile? Its elites lost confidence in the principles that underlay its success.

High-tech, high risk for China's economy
Gordon Watts (AT) Jan 1, 2020
The new model was expected to take over from old sectors but the transition has been 'harder than expected'.

Another lacklustre year of economic growth lies ahead
Economist Jan 1, 2020
Better than 2019, but not much.

Exporting out of Agriculture : The Effects of the China Shock in China
Jessica Leight (VoxEU) Jan 1, 2020
This paper analyzes the effect of China's 2001 accession to the World Trade Organization on structural transformation at the local level, exploiting cross-sectional variation in tariff uncertainty faced by county economies pre-2001. Using a new panel of 1,800 Chinese counties from 1996 to 2013, we find that counties more exposed to the reduction in tariff uncertainty post-accession are characterized by increasing exports and foreign direct investment, shrinking agricultural sectors, expanding secondary sectors, and higher total and per capita GDP. In addition, when labor substitutes from non-agricultural to agricultural production in counties exposed to positive trade shocks, agricultural output declines

The Hambantota Port Deal: Myths and Realities
Umesh Moramudali (Diplomat) Jan 1, 2020
Untangling the truth about Chinese debt and Sri Lanka means cutting through some misleading media narratives.

Beijing's delicate balancing act relies on job creation
George Magnus (FT) Jan 2, 2020
For Chinese economic policymakers employment is top of the worry list.

Time for investors to rethink government bonds
Katie Martin (FT) Jan 2, 2020
Persistent negative interest rates are undermining their safe haven role.

ECB has one item left in its monetary toolkit
Eric Lonergan (FT) Jan 2, 2020
Savers and borrowers benefit if the ECB raises deposit rate while cutting loan rate.

'Gut Feelings' Are Driving the Markets
Robert J. Shiller (NYT) Jan 2, 2020
Valuations are high but investors are still willing to hold, because of a visceral emotion driven by President Donald Trump.

Is America Ready to Win the China Trade War?
Joseph C. Sternberg (WSJ) Jan 2, 2020
Amid a shrinking current-account surplus, Beijing will have no choice but economic liberalization.

Don't be fooled by the trade deal between America and China
Economist Jan 2, 2020
The planet's biggest break-up is under way.

China views Donald Trump's America with growing distrust and scorn
Economist Jan 2, 2020
And cynics in Beijing hope for his re-election.

Could ESG comparisons be made easier?
Silvia Pavoni (Banker) Jan 2, 2020
Comparing different companies' ESG credentials is akin to comparing apples and pears. But efforts are being made to find the right tools to collect sufficient data and achieve a standard methodology, as Silvia Pavoni reports.

Understanding populism
Jean Pisani-Ferry (Bruegel) Jan 2, 2020
Political identity is a group stereotype. As no camp corresponds exactly to our expectations, we choose the one to which we are closest and which is also the most distant from the ideas we reject

Europe Will Rise in 2020 as the World Melts
James G Stavridis (Bloomberg Opinion) Jan 2, 2020
Finally achieving Brexit will make the EU stronger, just in time for a host of global problems.

Ursula von der Leyen, the EU's Centripetal Force
Andreas Kluth (Bloomberg Opinion) Jan 2, 2020
The new commission president is full of ideas. But above all, she just wants to hold the European family together.

Negative Interest Rates Aren't Such a Departure After All
Aaron Brown (Bloomberg Opinion) Jan 2, 2020
A Yale professor's paper shows they have always been with us and challenges the notion of a normal level.

New Fed Voters Will Fall in Line With Powell
Timothy A Duy (Bloomberg Opinion) Jan 2, 2020
It should be a boring year for the Fed in 2020, which is what the central bank's chairman would want.

The Decline of Global Value Chains
Erik Berglöf (Project Syndicate) Jan 2, 2020
In the period leading up to the 2008 financial crisis, global value chains expanded rapidly, eventually accounting for around 70% of international trade. But in the years since, GVCs have stagnated and declined slightly in importance – and are set to undergo a massive reconfiguration in the coming decade.

Why a Cool War May Be Worse than a Cold One
Andrew Sheng and Xiao Geng (Project Syndicate) Jan 2, 2020
The unfolding Sino-American conflict is far less cut and dried than the Cold War was. Minimizing the fallout will require both sides to recognize that, in an interconnected world, efforts to strengthen their own position become self-defeating when they undermine global stability and dynamism.

When Central Banks Go Green
Willem H. Buiter (Project Syndicate) Jan 2, 2020
On a challenge as large as climate change, there are financial risks associated with making the shift to a low-carbon economy, and there are risks tied to inaction. Central banks thus have no choice but to focus more closely on the issue, with or without an expansion of their traditional policy mandates.

Credit cycles and asset returns
Josh Davis and Alan Taylor (VoxEU) Jan 2, 2020
Investor experience and academic research since the Global Crisis reflects a growing realisation that credit conditions can affect future macroeconomic outcomes. This column investigates whether credit booms throughout history have had any explanatory power to account for future asset class returns. It finds that credit booms tend to systematically predict poor returns in the near future for equities in absolute terms, and relative to bonds. An investor who had tilted their portfolio allocations based on a credit boom signal would have been able to improve portfolio performance. The contribution of the credit boom signal is meaningful when compared to other well-established signals such as momentum and value.

Stakes are high for investors betting on 2020 rebound
Michael Mackenzie (FT) Jan 3, 2020
Gap between valuations and profits looks stretched on Wall Street.

Robots will not be coming for our jobs just yet
Tim Harford (FT) Jan 3, 2020
Machines encroach on tasks, and we reorganise in response, becoming more productive.

US-China financial war is just beginning to take shape
John Dizard (FT) Jan 3, 2020
Battle lines are being drawn between American hawks and Wall Street.

Review of the Decade: Ten Trends in Global Education
Lee Crawfurd and Susannah Hares (CGD) Jan 3, 2020
The "tens" are over and it's been quite a decade in global education. The Millennium Development Goals (MDGs) became the Sustainable Development Goals (SDGs), a learning crisis was discovered, and randomized controlled trial (RCT) and private school wars showed no signs of abating. We take a look at ten trends that shaped education policy debates this decade.

Economic 'Doom Loops' Get Harder to Avoid in 2020s
Satyajit Das (Bloomberg Opinion) Jan 3, 2020
The world is struggling to stay balanced on a shaky platform of high consumption, asset prices and household debt.

The EU Is No Match for the Financial Crime Gangs
Elisa Martinuzzi (Bloomberg Opinion) Jan 3, 2020
Anyone who thinks lenders and regulators are gaining the upper hand against the money launderers is in for a rude awakening.

Central Banks Are the Biggest Risk to the Economy in 2020
Jim Bianco (Bloomberg Opinion) Jan 3, 2020
The Fed's reaction to the disruption in repo markets shows how hard it will be for policy makers to reverse their "money printing."

Five Big Macroeconomic Questions for 2020 and Beyond
Narayana Kocherlakota (Bloomberg Opinion) Jan 3, 2020
Slowing population growth, accelerating climate change, and other puzzles for the future.

How Ownership Concentration Is Happening, and Why It Matters
Alissa Amico (Project Syndicate) Jan 3, 2020
While the globalization that embodied the 1990s liberated multinational corporations, the advent of the Internet economy a decade later boosted corporate concentration further. And the adverse effects this is having on competition, wealth distribution, and fiscal transparency are likely to worsen in the coming years.

What My Younger Self Never Expected
Michael Spence (Project Syndicate) Jan 3, 2020
At the start of a new year and a new decade, it is both humbling and illuminating to reflect on major global developments that no one saw coming just a few decades ago. For those who grew up during the Cold War or in the ensuing period of American primacy, the economic and geopolitical rise of the developing world must rank high on the list.

Can Latin America Avoid Another Lost Decade?
José Antonio Ocampo (Project Syndicate) Jan 3, 2020
As Latin America enters the 2020s, it must take steps to ensure that the next five years are not lost. Yes, the international context will make a difference. But the region's governments have it within their power to improve economic performance significantly.

The Myth of Global Decoupling
Stephen S. Roach (Project Syndicate) Jan 3, 2020
The possibility of a protracted conflict between the world's two largest economies, whatever its cause, should not be taken lightly. Nevertheless, even assuming a permanent fracture between the US and China, the $87 trillion global economy is unlikely to split into two blocs in 2020 and beyond.

Inequality in Cambridge and Chicago
Angus Deaton (Project Syndicate) Jan 3, 2020
No one should doubt the intellectual contributions of Chicago School luminaries like Milton Friedman, George Stigler, James Buchanan, and Robert Lucas to economics and political economy. Yet it is hard to imagine a body of work more antithetical to broad thinking about inequality and justice.

Services trade policies and economic integration
Bernard Hoekman and Ben Shepherd (VoxEU) Jan 3, 2020
Data weaknesses hamper analysis of how policies towards imports and exports of services, foreign direct investment and, more generally, regulation affects the operation of services sectors. Based on recently released regulatory policy data for 2016, this column uses machine learning methods to recreate to a high degree of accuracy the OECD's Services Trade Restrictiveness Index to generate new estimates of services trade barriers for 23 developing countries. The analysis confirms that services policies are typically much more restrictive than tariffs on imports of goods, in particular in professional services and telecommunications. Developing countries tend to have higher services trade restrictions, but less so than has been found in research using data for the late 2000s.

East Asia's Alliances Are Falling Apart
Elliot Silverberg and Andrew Injoo Park (FP) Jan 3, 2020
2019 strained old ties to the breaking point.

The Real Way to Win Iowa and Places Like It
Indranil Ghosh (FP) Jan 3, 2020
Rural regions need a development strategy to build new industries based on unique strengths, including abundant sources of renewable energy.

The causes of a booming stockmarket are unlikely to last through 2020
Economist Jan 4, 2020
Global growth, a trade deal and lower rates have added oomph to shares.

Long-term earnings of the dot-com bubble generation
Johan Hombert and Adrien Matray (VoxEU) Jan 5, 2020
High salaries and the opportunity to work with exciting new technologies attract many graduates to jobs in the tech sector. This column examines the long-term earnings of French high-skilled workers who started their career during the last tech boom in the late 1990s. The results point to an 'ICT boom cohort discount', with high-skilled workers who started in the sector ending up earning almost 7% less than workers who started careers outside of ICT. One potential explanation for this is that human capital accumulated by high-skilled workers in a booming tech sector depreciates faster than usual because of accelerating technological change.

Active fiscal policy must be part of a new normal
FT View Jan 5, 2020
A new economic era demands use of different policy instruments.

We need global ground rules for use of AI
Diane Coyle (FT) Jan 5, 2020
It is easier to set limits while only a few players can afford the needed technology.

The business cycle ain't dead yet
Robert Samuelson (WP) Jan 5, 2020
We have a paradoxical economy that seems robust and fragile at the same time.

South Africa ended 2019 in darkness. Here's why.
Palesa Morudu (WP) Jan 5, 2020
Eskom became the greatest risk to South Africa's economy.

China trade questions confound Australia's Indo-Pacific shift
James Laurenceson (EAF) Jan 5, 2020
The comfy all-embracing Indo-Pacific idea within which Australia has chosen to frame its foreign policy has limited utility in defining a path forward in dealing with the US–China conundrum.

Global Youth Protests at Risk of Spreading to China
Noah Smith (Bloomberg Opinion) Jan 5, 2020
A slowing economy and rising inequality could erode the public's trust in their government.

China's War on Shadow Banking Can't Last Forever
Shuli Ren (Bloomberg Opinion) Jan 5, 2020
Beijing has been willing to stomach defaults in the private sector. Now even state-linked firms are looking vulnerable.

America cannot escape oil price volatility
FT View Jan 6, 2020
The shale revolution alone cannot deliver true energy independence.

Europe needs a joined-up policy towards Africa
FT View Jan 6, 2020
The EU should encourage free trade with a continent-to-continent deal.

Wall Street banks ramp up research into quantum finance
Richard Waters (FT) Jan 6, 2020
Goldman Sachs, JPMorgan and Citigroup eye potentially revolutionary technology.

Fed looks for 'boring' 2020 after a frenetic year
Colby Smith (FT) Jan 6, 2020
Outlook looks more settled following triple rate cut and easing of trade wars.

David Mann (FT) Jan 6, 2020
Long-term challenges persist but the balance of risk in the short term is positive.

Technological trends that will shape the decade
John Thornhill (FT) Jan 6, 2020
China will reinvent finance while computing power grows and genome sequencing becomes cheaper.

SocGen: making the case for European bank champions
Stephen Morris and David Keohane (FT) Jan 6, 2020
EU politicians are warming to cross-border mergers. The French lender wants to be at the forefront.

The Fed Should Speak English for a Change
Alan S. Blinder (WSJ) Jan 6, 2020
Its long-awaited policy review, expected this year, should also reconsider the 2% inflation target.

A quarter of the global pig population has been wiped out. Here's why.
Mark Essig (WP) Jan 6, 2020
A massive pig die-off is having grim repercussions.

Financial N-option will settle Trump's oil war
Pepe Escobar (AT) Jan 6, 2020
On foreign soil, as a guest nation, US has assassinated a diplomatic envoy whose mission the US had requested.

China Signals No Major Stimulus for 2020
Tianlei Huang and Martin Chorzempa (PIIE) Jan 6, 2020
From the worst economic slowdown in decades to the profound uncertainty posed by trade and technology conflicts with the United States, the Chinese economy is running into some of the most difficult challenges since the global financial crisis. Whether China will adopt a more expansionary policy to stimulate the economy has therefore attracted widespread attention. The latest signals indicate that despite all these headwinds, a rise in bond defaults, and growth coming in at the lowest levels in decades, a full-blown stimulus is probably off the table. Given China's already unsustainable debt levels, this might be good news for financial stability, even if it means the slowdown continues into 2020.

Could the U.S. economy be experiencing a hidden tech-driven productivity revolution?
Marek Dabrowski (Bruegel) Jan 6, 2020
In the last decade, most advanced economies have grown more slowly than before. Slower growth has frequently been seen as a legacy of financial crises, especially that of 2007–2009.

The Fed Should Keep Looking Forward, Not Retreat to the Past
William C Dudley (Bloomberg Opinion) Jan 6, 2020
The central bank can take four steps to support its new framework for monetary policy.

Hard as It Is, Frackers Should Ignore Iran
Liam Denning (Bloomberg Opinion) Jan 6, 2020
Higher oil prices aren't an excuse to revert to bad old habits.

Public Pensions Throw Their Weight Around in Private Debt
Brian Chappatta (Bloomberg Opinion) Jan 6, 2020
The advantage of high risk-adjusted returns could come to an end because of too many big buyers.

Enjoy That 29% Rally? You Have These Folks to Thank
Daniel Moss (Bloomberg Opinion) Jan 6, 2020
Central bankers helped investors look past slowing growth and the corrosive influence of trade wars. Expect more easing in 2020.

Why 2020 Is Harder to Predict Than 2019 Was
Tyler Cowen (Bloomberg Opinion) Jan 6, 2020
Several important political, economic and cultural trends seem to be coming to an end.

Chinese Growth Really Can Be Faster
Yu Yongding (Project Syndicate) Jan 6, 2020
Even as growth nears 6%, many Chinese economists oppose monetary and fiscal stimulus, citing everything from population aging to debt risk. But their arguments are far weaker than they seem – and far less convincing than the case for expansionary policies.

Making Stakeholder Capitalism a Reality
Laura Tyson and Lenny Mendonca (Project Syndicate) Jan 6, 2020
The recent push by big business in favor of a more socially and environmentally conscious corporate-governance model is not just empty rhetoric. With the public losing trust in business and markets, it is now in everyone's interest to reform the system so that it delivers prosperity for the many, rather than the few.

The Inequality Debate We Need
Kenneth Rogoff (Project Syndicate) Jan 6, 2020
The scientific evidence increasingly indicates that the world may soon reach a point of no return regarding climate change. So, rather than worrying almost exclusively about economic and political inequality, rich-country citizens need to start thinking about how to deal with global energy inequality before it's too late.

Banks and government bonds: A love story
Orkun Saka (VoxEU) Jan 6, 2020
European banks have been criticised for holding too much domestic government debt during the recent euro area crisis, intensifying the doom loop between sovereign and bank credit risks. This column deviates from previous research that focused on 'bad' reasons for holding sovereign debt, and points to a 'good' reason: an informational advantage that particular banks have regarding sovereigns. This seems to have had a role in the fragmentation of European government bond markets.

Inequality and trade: Simulation evidence for 54 developing nations
Erhan Artuc, Guido Porto, and Bob Rijkers (VoxEU) Jan 6, 2020
Questions about who benefits from free trade – and at what cost – have resurfaced as part of the backlash against globalisation. This column uses data from 54 low- and middle-income countries to show that in a majority of cases, trade liberalisation increases both incomes and inequality. Most of these trade-offs resolve in favour of liberalisation; despite exacerbating income disparities, trade liberalisation creates overall social welfare gains.

The Equality Conundrum
Joshua Rothman (New Yorker) Jan 6, 2020
We all agree that inequality is bad. But what kind of equality is good?

Long-Run Effects of the Earned Income Tax Credit
David Neumark and Peter Shirley (FRBSF Econ Letter) Jan 6, 2020
The Earned Income Tax Credit (EITC) substantially subsidizes earnings for low- to moderate-income families with children in the United States. Research has established that the EITC has positive short-term effects on the employment of less-educated single mothers and reduces overall poverty. The EITC may also generate higher earnings in the long run, as the short-run positive employment effects for low-skilled women accumulate into greater labor market experience that makes them more productive.

Potential Economic Implications of the Iranian Crisis
Jay H. Bryson (WF) Jan 6, 2020
Higher oil prices do not have as much of a slowing effect on the U.S. economy as they did years ago. However, the uncertainty that the crisis could impart could potentially be more meaningful.

Developing Countries Can Help Restore the WTO's Dispute Settlement System
Anabel González and Euijin Jung (PIIE) Jan 6, 2020
By refusing to fill vacancies in the World Trade Organization's (WTO) Appellate Body—the top body that hears appeals and rules on trade disputes—the Trump administration has paralyzed the key component of the dispute settlement system. No nation or group of nations has more at stake in salvaging this system than the world's big emerging-market economies: Brazil, China, India, Indonesia, Korea, Mexico, and Thailand, among others. These countries have actively and successfully used the dispute settlement system to defend their commercial interests abroad and resolve inevitable trade conflicts. The authors suggest that even though the developing countries did not create the Appellate Body crisis, they may hold a key to unlock it. The Trump administration has also focused its ire on a longstanding WTO practice of giving these economies latitude to seek "special and differential treatment" in trade negotiations because of their developing-country status. The largest developing economies, which have a significant stake in preserving a two-step, rules-based mechanism for resolving trade disputes, could play a role in driving a potential bargain to save the appeals mechanism. They could unite to give up that special status in return for a US commitment to end its boycott of the nomination of Appellate Body members.

US-Iran tensions bring risk back to markets
FT View Jan 7, 2020
Muted reaction in asset prices suggests investors are too complacent.

Even with US-Iran tensions, oil is not a one-way bet
David Sheppard (FT) Jan 7, 2020
Mighty US shale industry, along with tactical Saudi moves, should keep a lid on gains.

Digital currencies will not displace the dominant dollar
Gita Gopinath (FT) Jan 7, 2020
Proposals of a 'synthetic hegemonic' alternative face steep obstacles.

Persistent stimulus has kept global growth on track
Martin Sandbu (FT) Jan 7, 2020
Luckily, policymakers have believed their eyes rather than their theories.

Target causes of low inflation before shifting goals
Lorenzo Bini Smaghi (FT) Jan 7, 2020
Europe's central bankers want a new target. First they must look at why inflation has been so low for so long.

Economists fear US is approaching limit of monetary policy
Brendan Greeley (FT) Jan 7, 2020
Decreasing scope for easing triggers call to boost fiscal stimulus options.

The Oil Price That Hasn't Spiked
WSJ Jan 7, 2020
The small move in prices shows the strategic benefit of U.S. shale.

End of an anti-corruption era in Indonesia
John McBeth (AT) Jan 7, 2020
Popular, proficient and once-fearless KPK anti-graft body has been stripped of its independence.

Why Sweden Ended Its Negative Interest Rate Experiment
Daniel Lacalle (Mises Wire) Jan 7, 2020
Sweden launched its failed negative rate plan almost five years ago and now reverses it due to the financial risks that are created.

Reduce Inequality To Create Opportunity
Kristalina Georgieva (IMF) Jan 7, 2020
Over the past decade, inequality has become one of the most complex and vexing challenges in the global economy.

Seven Macro Themes for 2020
PIMCO Jan 7, 2020
Seven trends will have important investment implications in the year ahead. Get an inside look at the key debates at our most recent Cyclical Forum and what it means for portfolios in 2020.

Capital Controls Are Becoming Disturbingly Popular
Noah Smith (Bloomberg Opinion) Jan 7, 2020
There are reasons for countries to worry about too much foreign investment, but regulation could be a cure that's worse than the disease.

Economists Care Too Much About Inequality
Leonid Bershidsky (Bloomberg Opinion) Jan 7, 2020
The raging academic debate about income and wealth distributions shouldn't define policy making.

The Dilemma of Central Banking
Miao Yanliang (Project Syndicate) Jan 7, 2020
Once upon a time, Keynesians' focus on the short term and neoclassical theorists' attention to the long term had little trouble coexisting within the same broader monetary-policy framework. But in an age of persistently low and negative interest rates, the rules of the game have changed.

What Happened to India?
Shashi Tharoor (Project Syndicate) Jan 7, 2020
The India the world once celebrated – the world's fastest-growing free-market liberal democracy – seems to be giving way to a violent, intolerant, illiberal autocracy. It is a turn that was long in the making, reflecting the impact of eight major factors on the country's society and politics.

Isn't a Wealth Tax Common Sense?
J. Bradford DeLong (Project Syndicate) Jan 7, 2020
The wealth-tax proposals being advanced by Democratic US presidential primary contenders clearly meets the public-finance standard for an ideal form of revenue generation. So why have these plans drawn such vehement criticism from so many who should be supporting them?

Will Eurozone Policymakers Take the Long View?
Daniel Gros (Project Syndicate) Jan 7, 2020
The 2010s were an exceptional decade that called for unprecedented economic policies. Now, however, the eurozone's fiscal and monetary policymakers must think more long-term and accept that continued stimulus measures are unlikely to offset the effects of Europe's demographic decline.

Developing a policy regime to support the free flow of data
Fukunari Kimura (VoxEU) Jan 7, 2020
While national governments are already implementing various economic policies related to data flows in the real world, there is not yet a consensus on how economists should approach the topic. This column outlines a framework recently proposed by the T20 Task Force on Trade, Investment, and Globalization that classifies data flow policy into five categories and allows the appropriateness of policy from the viewpoint of economics to be discussed. As a result, it becomes possible to achieve policy harmonisation in some areas and to identify others where harmonisation cannot easily be achieved.

Shipping networks and the global implications of local shocks
Inga Heiland, Andreas Moxnes, Karen-Helene Ulltveit-Moe, and Yuan Zi (VoxEU) Jan 7, 2020
Evidence on the structure of the global container shipping network, an essential determinant of the costs of trade, is scarce. This column uses satellite data to document salient features of the network, and the expansion of the Panama Canal as a natural experiment to examine the impact this improvement to one link of the network had on worldwide trade. The analysis suggests that the expansion of the canal increased world real income by $20 billion.

Europe's Green Deal Could Open a New Front in the Trade War
Bruce Stokes (FP) Jan 7, 2020
Economic tensions with China may be soothed, but in 2020, Trump will have other trade concerns to worry about.

What Investors Need to Watch for in 2020
Mohamed El-Erian and Jeremy Siegel (K@W) Jan 7, 2020
Reduced central bank liquidity injections, higher asset prices and increased volatility are some of the risks investors face in the year ahead.

Greek economy: will reality collide with fresh optimism in Athens?
Ben Hall and Kerin Hope (FT) Jan 8, 2020
The new government has set confident growth targets, but they depend on high levels of foreign investment.

The Economy Is Expanding. Why Are Economists So Glum?
Jim Tankersley and Keanna Smialek (NYT) Jan 8, 2020
At an annual gathering of the profession, researchers presented evidence and talks that amounted to warnings on the state of the record-long expansion.

Iran's Freaking Out the Oil Market. It Shouldn't
David Fickling (Bloomberg Opinion) Jan 8, 2020
A rocket strike on two U.S. bases in Iraq sent prices surging. But factors leading to a sustained rise are absent.

Worst Economy in 42 Years Needs an Honest Look
Andy Mukherjee (Bloomberg Opinion) Jan 8, 2020
India can't fix its public finances without a frank assessment of the broken tax system.

The IMF Leaves, But Greece's Rescue Isn't Over
Leonid Bershidsky (Bloomberg Opinion) Jan 8, 2020
The country shouldn't be forced to keep paying indefinitely for mistakes it didn't make alone.

Trump's Gift to China
Minxin Pei (Project Syndicate) Jan 8, 2020
If anyone was celebrating Donald Trump's decision to kill Iran's General Qassem Suleimani, it was Chinese President Xi Jinping. After all, escalating tensions with Iran will distract the US from its competition with China, just as the 9/11 attacks did a generation ago.

Why Lebanon Deserves International Support
Charles Tannock (Project Syndicate) Jan 8, 2020
Lebanon itself needs to resolve its political crisis and implement necessary economic and fiscal reforms. But the international community must provide ample and unequivocal financial support, not least because of the heavy burden the country is bearing as a result of the war in neighboring Syria.

The Growth and Geography of RMB Trading
Yin-Wong Cheung, Robert N. McCauley, and Chang Shu (VoxChina) Jan 8, 2020
The 2019 Bank for International Settlements Triennial Foreign Exchange Survey reveals two different trends in RMB trading in 2016–2019 compared to the previous three year interval—a slowdown both in growth and in geographic diffusion. Regarding the first trend, we argue the rapid growth of RMB trading into 2014 relied on a gradual appreciation trend that encouraged a one-sided RMB internationalization. Global trading in RMB resumed its growth in 2017 with a healthier sense of two-way risk that would allow borrowing as well as investing in RMB. Regarding the second trend, we argue that Hong Kong's gain in the share of RMB trading in 2016—2019 resulted from the way that China recently opened its domestic bond market. This tilted the playing field in favor of Hong Kong. This advantage may disappear with China's further opening-up, and the market-driven geographic diffusion could re-emerge.

Let's Get Digital: A Briefing on Central Bank Digital Currencies
Erik Nelson and Jen Licis (WF) Jan 8, 2020
An increasing amount of central banks are in the process of studying central bank digital currencies (CBDC), broadly defined as digital forms of existing central bank money. Most central banks are still in the very early stages of examining CBDCs, and even those that are further along in studying the topic still appear to be several years away from issuing this new type of digital money.

China: The Year Ahead
David Schlesinger, Scott Kennedy, Sophie Richardson, Carl Minzner, Ali Wyne, & Scott W. Harold (ChinaFile) Jan 8, 2020
As 2019 drew to a close, ChinaFile asked contributors to write about their expectations for China in 2020.

Debt 'crisis' in poor countries driving public spending cuts
Steve Johnson (FT) Jan 9, 2020
Jubilee Campaign warns Sustainable Development Goals at risk because of rising debt service costs.

Why America has less to fear from an oil shock
Gillian Tett (FT) Jan 9, 2020
The country's homegrown energy boom has reduced its vulnerability.

EM banks exposed to stress in FX swaps, a spillover from US repo markets
Hung Tran (FT) Jan 9, 2020
Global financial system made vulnerable by the absence of a true lender of last resort.

Why markets are reluctant to move on to a war footing
Katie Martin (FT) Jan 9, 2020
Traders are hoping US-Iran skirmishes are just a show of strength on both sides.

Supporting Trump Tariffs, One Exemption at a Time
Liam Denning (Bloomberg Opinion) Jan 9, 2020
A steelmaker's plea for mercy shows the trade war is still stinging.

Don't Let Australia's Crisis Go to Waste
Daniel Moss (Bloomberg Opinion) Jan 9, 2020
Leaders have cover to do what they should be doing anyway: ramp up fiscal spending.

Fed's Clarida Gives Markets a Quick Reassurance
Mohamed Aly El-Erian (Bloomberg Opinion) Jan 9, 2020
The Fed vice chairman conveys that the stock market won't be derailed by a sudden change in monetary policy or a misbehaving bond market.

Central Banks Face a Year of Mounting Challenges
Mohamed A. El-Erian (Project Syndicate) Jan 9, 2020
After committing to monetary-policy normalization in 2018, the US Federal Reserve and the European Central Bank spent the past year reversing course with further interest-rate cuts and liquidity injections. Yet, given mounting medium-term uncertainties, central bankers cannot assume calm conditions in 2020.

Lebanon's Perfect Storm
Ishac Diwan (Project Syndicate) Jan 9, 2020
After years of maintaining a dysfunctional political economy based on sectarianism and rentierism, Lebanon's ruling elites are being confronted with simultaneous financial, economic, and political crises. The question now is how they respond to a reformist movement demanding fundamental change, including a new political settlement.

Stock market responses triggered by the US-China trade war
Peter Egger and Jiaqing Zhu (VoxEU) Jan 9, 2020
The US and China have been exchanging threats and imposing tariffs in a 'trade war' since early 2018. Sound statistical and holistic economic analysis of the trade dispute's consequences is difficult due to data limitations. This column scrutinises global stock market responses to assess the effects of the trade war and finds that, on average, the US and Chinese tariffs have directly hurt targeted firms/sectors abroad as intended, but they have also hurt firms at home. It also reveals unintended effects on third parties, mediated by global value chain interdependencies.

Trump's Real Trade War Is Being Waged on the WTO
Clark Packard (FP) Jan 9, 2020
The Trump administration's efforts to weaken the World Trade Organization could be its most damaging attack on the global trade system.

The World's Next Energy Bonanza
Alex Gilbert, Morgan D. Bazilian, and Sterling Loza (FT) Jan 9, 2020
Even more than fracking, tapping oceanic methane hydrates could soon upend the global energy landscape.

Two cheers for the dematerialising economy
Tim Harford (FT) Jan 10, 2020
Growth has environmental downsides, but it is also correlated with the good things in life.

Emerging market debt: a case for concern?
Erik Norland (FT) Jan 10, 2020
The US yield curve is flatter than normal, echoing conditions that preceded previous crises.

China: did everything go according to five-year plan?
Tom Hancock (FT) Jan 10, 2020
Beijing's 2020 targets provide insight into its priorities, but not all have been met.

Apple's rise highlights perils of concentration
Richard Henderson (FT) Jan 10, 2020
More flows into index funds will mean the large companies get even larger.

North needs social infrastructure, not just rail
Richard Layard (FT) Jan 10, 2020
Mental health interventions are the most cost-effective generators of happiness.

The Economy's Inequality Dividend
WSJ Jan 10, 2020
Growth is lifting low-income workers and the middle class.

A Fearful Fed Keeps Pouring Money into the Repo Market
Ryan McMaken (Mises Wire) Jan 10, 2020
Repo markets aren't as liquid as the Fed wants. This could be due to immense amounts of new government debt, or because US treasuries aren't as risk-free as many assume.

A prolonged US-Iran confrontation may spark a new economic crisis in the Middle East
Adnan Mazarei (PIIE) Jan 10, 2020
The threat of all-out war between Iran and the United States may be receding for now. But the prospect of more US sanctions and the underlying economic deterioration of the entire Middle East and North Africa (MENA) region remains a threat to stability and peace inside Iran and among its many unstable neighbors, posing dangers to the global economy.

It's a Tidal Wave of Liquidity. And Waves Crash.
John Authers (Bloomberg Opinion) Jan 10, 2020
Are easy-money policies setting up global markets for the next Minsky Moment? Plus, a 60/40 picture of a perfect year.

Economists Have No Idea What Replaces Free Trade
Noah Smith (Bloomberg Opinion) Jan 10, 2020
Spotting the failings is easy, but where's the new paradigm for global commerce?

Energy Markets Have an Interesting Year Ahead
Nathaniel Bullard (Bloomberg Opinion) Jan 10, 2020
Coal's future is looking pretty bleak, while wind and solar power continue to make steady strides around the globe.

Services Jobs Are Back on Top
Justin Fox (Bloomberg Opinion) Jan 10, 2020
The employment boom in manufacturing, mining and the like has faded, and the U.S. economy has gone back to creating mainly services jobs.

There's a $40 Billion Reason to Avoid Italy
Marcus Ashworth (Bloomberg Opinion) Jan 10, 2020
Fragile politics and the front-loading of 2020 bond sales explain Italian debt's poor performance. But yield-starved investors won't stay away forever.

Political information in the age of the internet
Filip Matesjka and Guido Tabellini (VoxEU) Jan 10, 2020
Digital technologies provide a vast and accessible supply of information for voters. And yet, research suggests that the American electorate is no better informed than it was in the late 1980s. This column argues that the digital revolution has changed the distribution of news and data, increasing informational asymmetries across issues, amplifying the influence of extremist voters, and diverting attention away from important but non-controversial policies.

Benchmark interest rates when the government is risky
Patrick Augustin, Mikhail Chernov, Lukas Schmid, and Dongho Song (VoxEU) Jan 10, 2020
Benchmark interest rates, such as LIBOR or EFFR, not only serve as indicators of the monetary policy stance but also as reference rates for the multi-trillion interest rate derivatives and mortgage markets. Since the Global Crisis, these interest rates have followed a puzzling pattern relative to the US Treasury yields, known as negative swap rates. This column describes the pattern, explains why it is puzzling, and argues that the emergence of US default risk can naturally explain negative swap spreads.

Consumers Are Resilient Even in Challenging Times
Tim Quinlan, Azhar Iqbal, and Shannon Seery (WF) Jan 10, 2020
The direct effects of the Iranian crisis on the U.S. economy appeared to be rather small. However, the uncertainty that the crisis imparts could be more material. In this report, we analyze to what extent consumer spending might potentially take a more meaningful dive if a marked cycle of violence were to take hold.

UK economic optimism depends on Brexit clarity
FT View Jan 11, 2020
Growth in 2020 will depend on politics, trade and EU negotiations.

Universal Basic Income: A Dream Come True for Despots
Antony Sammeroff (Mises Wire) Jan 11, 2020
A universal basic income can easily be weaponized as a tool to punish "antisocial" behavior such as holding "unacceptable" political views or otherwise engaging in what the state doesn't like.

Will a Credit Crisis Threaten Boris's 2020 Brexit Plans?
Alasdair Macleod (Mises Wire) Jan 11, 2020
Last month's election gave Boris Johnson a strong majority in Parliament, but two economic wildcards could trip his new government up.

Commodities may not stay cheap forever
Rana Foroohar (FT) Jan 12, 2020
There are many reasons for the US dollar to weaken, which would cause commodity prices to rise.

A forgotten rule that could help smooth Brexit
Jonathan Ford (FT) Jan 12, 2020
WTO's underlying principle is that trade shouldn't be used as a political lever.

Vanguard and the financial system: too big to be healthy?
Robin Wigglesworth and Richard Henderson (FT) Jan 12, 2020
The fund manager has grown so dramatically that it raises questions about its influence on corporate America.

The challenge for Jokowi 2.0: How to revitalise the economy
Hal Hill (EAF) Jan 12, 2020
The problem for Indonesia today is that living standards are still not rising fast enough. Without rising living standards and broad-based economic growth, there will not be enough jobs for the country's rapidly growing population. Poverty, stalled living standards and unemployment could breed resentment, extremism and unrest.

Riding through the storm: Lessons and policy implications for policymaking in EMU
Marco Buti (VoxEU) Jan 12, 2020
In December 2019, Marco Buti left the position of Director General for Economic and Financial Affairs at the European Commission at the end of a rough journey through the crisis and its aftermath. In this column, he draws the main lessons out of five key moments in the crisis for the completion of EMU and the appropriate policy mix in the euro area.

Central banks begin to grapple with climate change
Gavyn Davies (FT) Jan 13, 2020
The Fed lags behind the ECB as monetary policy faces a challenge-turned-emergency.

A narrow EU trade deal is the most likely way forward
Wolfgang Münchau (FT) Jan 13, 2020
The UK should not agree to proposals to stagger the talks, with fish as part of the first course.

How best to boost Europe's birth rates
FT View Jan 13, 2020
Working mothers need government support, not traditional values.

African oligarchs turn to Asian offshore destinations
Ricardo Soares de Oliveira (FT) Jan 13, 2020
Light regulation and a full array of services hold the prospect of good old-fashioned plunder.

Italy the biggest obstacle to eurozone banking union
Martin Sandbu (FT) Jan 13, 2020
Rome wants a 'package deal' that includes common deposit insurance scheme.

Economists cannot agree on what ails the global economy
Megan Greene (FT) Jan 13, 2020
The leading industrialised nations are suffering from both supply and demand problems.

Myanmar must weigh up the extent of its dependence on China
Thant Myint-U (FT) Jan 13, 2020
Bilateral agreements set this week could have implications for generations to come.

Give Trump's Tariffs a Fair Test
Peter Navarro (WSJ) Jan 13, 2020
Conventional economic models ignore how they boost investment and national security.

How fragile is Iran's regime?
David P. Goldman (AT) Jan 13, 2020
US sanctions are creating extreme economic conditions; birthrate dropping precipitously.

With Ten Years to the SDG Finish Line, Laws Need to Change for Gender Equality
Megan O'Donnell and Charles Kenny (CGD) Jan 13, 2020
We're a third of the way through the lifetime of the Sustainable Development Goals, which were set to transform the world by 2030. When it comes to SDG 5 on gender equality, global progress towards targets remains either unmeasured or too slow. The World Economic Forum suggests that, on current trends, economic equality between men and women is not 10, but 257 years away—55 more years than were predicted based on last year's trends. Progress has slowed for many reasons, but one major constraint on progress is thousands of laws and regulations worldwide that deny women and girls equal opportunities and protections. Local women's rights organizations, backed by meaningful financial resources and rigorous evidence, are best placed to lead the fight against legal barriers to gender equality. And it's time to ensure that these organizations receive the support they need.

Development policy in the populist era
Shanta Devarajan (Brookings) Jan 13, 2020
When people are not voting in their economic self-interest, how should development policy be designed? By emphasizing redistribution over efficiency, to signal that government is delivering to the public, thereby helping to restore people's confidence in government.

China Opens Up to Oil Majors at the Wrong Time
David Fickling (Bloomberg Opinion) Jan 13, 2020
There was a time foreign energy companies would have jumped at the chance. Now they're awash with supply.

Bank of England Drinks the Rate-Cut Kool-Aid
Marcus Ashworth (Bloomberg Opinion) Jan 13, 2020
What's the sudden rush to lower interest rates? It would be far better to let the Johnson government bed down and wait a while on Brexit.

China a Currency Manipulator? Trump Says Never Mind
Robert Burgess (Bloomberg Opinion) Jan 13, 2020
Not that it technically was one. But markets welcomed the de-escalation.

Past Interest Rates and Future Growth
Willem H. Buiter (Project Syndicate) Jan 13, 2020
In studying the roots of macroeconomic trends across the advanced economies in recent decades, it is tempting to conclude that a declining rate of output growth is the inevitable result of deeper historical forces and intractable structural factors. But secular stagnation is well within our power to reverse.

Making Impact Investing Work
Brian Trelstad (Project Syndicate) Jan 13, 2020
After decades on the margins of finance and philanthropy, impact investing is finally moving into the mainstream, with most major asset-management firms having launched impact-investment funds and strategies. But without stronger standards, greater diversity of players, and a wider focus, a promising shift could become corporate whitewash.

A network analysis of economic history
Gregori Galofré Vilà (VoxEU) Jan 13, 2020
Economic history is a thriving subset of the field. This column uses network analysis to review the development of the discipline over the last 40 years. It illustrates how economic historians are interconnected through their research, identifies which scholars are the most cited by their peers, and reveals the central debates enlivening the discipline. It also shows that the rapid increase in the number of economic history publications since 2000 has been driven more by research at universities in continental Europe than by those in the US or UK.

The origins of microfinance
Marvin Suesse and Nikolaus Wolf (VoxEU) Jan 13, 2020
There was a rapid spread of credit cooperatives in rural 19th-century Germany providing small-scale savings and loan services to previously unbanked people. This column shows how these cooperatives helped shift farm investment from grains to potentially profitable but more capital-intensive products, such as the production of meat and dairy. In cases like this, changes in the sector of economic activity are a better metric for the impact of microfinance than comparing income pre- and post-credit.

China's 2009 VAT reform and lumpy investment behaviour
Zhao Chen, Xiang Jiang, Zhikuo Liu, Juan Carlos Suárez Serrato, and Daniel Yi Xu (VoxDev) Jan 13, 2020
Tax policies that reduce firm inaction are more effective at stimulating investment than policies that simply lower the cost of investment.

A Delicate Truce in the U.S.-Chinese Trade War
Weijian Shan (FA) Jan 13, 2020
What both sides must do to forge a better peace.

Who from Out of the Labor Force Is Most Likely to Find a Job?
Marianna Kudlyak (FRBSF Econ Letter) Jan 13, 2020
The best predictor of someone from outside the labor force finding a job is how recently the person was employed, rather than their self-reported desire to work as is conventionally thought. Between 1999 and 2019, the composition of the out of the labor force group shifted towards people out of work for longer. Consequently, the pool has become less employable. This indicates that, even though the out of the labor force pool is larger, it does not signify additional labor market slack beyond that accounted for by the standard unemployment rate.

Fundamentals do not matter in China's stock markets
Michael Pettis (FT) Jan 14, 2020
It is wrong to assume that prices reflect a genuine 'view' about growth prospects.

The costs of a declining population
Robin Harding (FT) Jan 14, 2020
Some of the economic consequences are obvious: fewer people make and consume less stuff.

India's economy faces severe challenges
Arvind Subramanian (FT) Jan 14, 2020
Unreliable growth statistics have disguised the depth of the problem.

US economy: the Fed's reality check
Brendan Greeley (FT) Jan 14, 2020
US central bank's events with small business and community leaders are beginning to influence policy.

Why the Japanese yen is not the haven asset it once was
Leo Lewis (FT) Jan 14, 2020
Currency has strengthened after grim geopolitical headlines, but not by much.

Australia's Fires Test Its Winning Growth Formula
Keith Bradsher and Isabella Kwai (NYT) Jan 14, 2020
The country's vulnerable environment and growing dependence on China have raised questions about the sustainability of its economic success.

A Truce in the Currency War
WSJ Jan 14, 2020
Trump bows to economic reality on the value of China's yuan.

China insurance reforms will lift financial system
Umesh Desai (AT) Jan 14, 2020
Reforms to deepen derivatives market, stabilize financial system as China set to become biggest market.

Will corporate debt cause the next meltdown?
Brian Caplen (Banker) Jan 14, 2020
A decade on from the financial crisis there are good reasons to think that the next one will stem from weaknesses in corporate debt structures.

China-US people exchanges: No "decoupling" yet
Tianlei Huang and Jacob Funk Kirkegaard (PIIE) Jan 14, 2020
The spiraling economic confrontation between the United States and China has led to predictions that the two intertwined economies are heading toward a great "decoupling." Trade barriers, export and investment controls, and fears about national security seem likely to drive these predictions. But it turns out that on one most basic and important US-China link—human interaction and people-to-people exchanges between the two countries—the concerns about estrangement seem exaggerated. Despite tough talk about a new divide, there has not been a major break in the number of travelers and migrants flowing between the world's two biggest economies.

How We Can Score Development Agencies on Evaluation and Learning Systems
Catherine Blampied, Ian Mitchell and Rachael Calleja (CGD) Jan 14, 2020
The capacity for donors to evaluate and learn from development activities is crucial for supporting evidence-based decision-making and ultimately, aid effectiveness. In this blog post, we set out a new approach to scoring agencies on their evaluation and learning and are keen to get feedback on the proposed approach.

Living into the 22nd century
Wolfgang Fengler (Brookings) Jan 14, 2020
At the beginning of each new year, UNICEF organizes a global campaign to celebrate the birth of the year's first babies. This time, we cheered the arrival of 2020 and of a little over 392,000 new babies. The average life expectancy of a girl born today is 79.6 years—for a boy it is 76.2 years—which means that she and her peers will live to shape the rest of this century. And one thing is clear: These newborns of the decade will live in a fundamentally different world than the one their parents knew.

Six Things to Know About Peru's Economy in 2020
IMF Jan 14, 2020
Peru continues to be one of Latin America's best-performing economies, but growth has lost momentum in recent years, due to both domestic and external factors, according to the IMF's latest annual economic assessment.

How China's Policies Have Stifled Global Innovation
Robert Atkinson (Brink) Jan 14, 2020
For many years, the prevailing view was that the rapid growth of China's economy after it joined the World Trade Organization had a positive effect on developed economies, however, recent research shows that this view was overly optimistic. A new report suggests that the effect of Chinese economic growth and trade expansion has been negative for innovation in most developed nations.

Huge Debt Got Us Hooked on Petrodollars — and on Saudi Arabia
Ryan McMaken (Mises Wire) Jan 14, 2020
Petrodollars and petrodollar recycling are at the heart of what keeps the US debt and money-printing mechanism going. The geopolitical stakes are very high.

Do the Machines Driving Markets Remember 2000?
John Authers (Bloomberg Opinion) Jan 14, 2020
Quant strategies are even more overweight in this tech-led stocks rally than individual investors.

Can QE Work in India With 7% Inflation?
Andy Mukherjee (Bloomberg Opinion) Jan 14, 2020
Unconventional policies would help fight stagnation even as rising prices narrow scope for more rate cuts.

BlackRock's Climate Activism Has a Passive Problem
Mark Gilbert (Bloomberg Opinion) Jan 14, 2020
Larry Fink is putting the climate emergency at the forefront of his company's investment strategy. But trillions of dollars of passive money remain unavailable for the fight.

The Jobs Are There. Where Are the Wages?
Tyler Cowen (Bloomberg Opinion) Jan 14, 2020
The U.S. just completed one of its worst decades ever for payroll growth.

Hong Kong Could Be a Loser From the Trade Deal
David Fickling (Bloomberg Opinion) Jan 14, 2020
One way to narrow the U.S. deficit with China would be to re-route shipments through mainland ports. That could hurt the city's economy.

Don't Read Too Much Into the Strengthening Yuan
Mohamed Aly El-Erian (Bloomberg Opinion) Jan 14, 2020
Investors shouldn't count on it as an economic predictor for China and the rest of the world.

Peru's Voters Can Solve a Latin American Riddle
Mac Margolis (Bloomberg Opinion) Jan 14, 2020
How to combine a functioning polity with a flourishing economy.

Fink, Frackers and Putting the 'G' in ESG
Liam Denning (Bloomberg Opinion) Jan 14, 2020
BlackRock has the power to improve energy-sector governance, which could coincidentally help the environment too.

Protecting Trade
Raghuram G. Rajan (Project Syndicate) Jan 14, 2020
Manufacturing jobs have been moving from advanced to emerging economies for decades, but only recently has the challenge posed by emerging economies fueled a broader political response. Elites who long ignored the problem are finally feeling the competitive pressure themselves, and have responded in the most cynical way possible.

Financial Markets' Iran Delusion
Nouriel Roubini (Project Syndicate) Jan 14, 2020
A restrained reprisal by Iran following the assassination of its top military commander has led markets to conclude that the latest threat to the global economy has been removed. But just because Iran and the United States have so far avoided a full-scale war does not mean that markets are out of the woods.

Addressing Africa's Skills Mismatch
Hanan Morsy (Project Syndicate) Jan 14, 2020
Africa's youth bulge is a major asset, with the potential to drive growth and development for decades to come. But if the continent's young people are unable to find jobs suited to their education and skills, it could become a serious liability.

Democratizing the ECB
Barry Eichengreen (Project Syndicate) Jan 14, 2020
Recent tensions within the European Central Bank's Governing Council have underscored the need to manage disagreement better. The status quo, whereby the president presents a policy decision as a consensus, after which one or more Governing Council members may issue a dissenting statement, makes everyone look silly.

Spillovers and the optimal design of macroprudential measures
Steven Ongena and Raphael Auer (VoxEU) Jan 14, 2020
Targeted macroprudential policies may spill across sectors, but this does not mean that they are ineffective. This column shows how the effects of a countercyclical capital buffer designed to curb house price growth in Switzerland spilled over into commercial lending. But a model that matches the uncovered spillovers in volumes and interest rates shows that they by no means undermine the rationale for focusing policy measures on specific sectors. On the contrary, it suggests that regulators can avail themselves of this new tool to increase the overall resilience of banks Targeted macroprudential policies may spill across sectors, but this does not mean that they are ineffective.

Americans Are Investing More in China—and They Don't Even Know It
Steven Schoenfeld (FP) Jan 14, 2020
A modest trade deal can't mask major problems between Washington and Beijing. But despite those tensions, Americans are unwittingly increasing their exposure to Chinese stocks and bonds.

Why India Is Greeting the World's Richest Person With Protests—and an Antitrust Case
Ravi Agrawal and Kathryn Salam (FP) Jan 14, 2020
Amazon founder Jeff Bezos travels to India this week, where the trade lobby wants more protectionist measures as New Delhi seeks foreign investment.

The Animal Spirits Index Ends 2019 on a High Note
Azhar Iqbal (WF) Jan 14, 2020
Our Animal Spirits Index ended 2019 at 0.69, more than double its value at the start of the year. Large gains in equity markets and anticipation of a U.S.-China trade deal have been key factors behind the ASI's momentum.

BlackRock needs to deliver on climate pledges
FT View Jan 15, 2020
The world's largest asset manager promises to reshape finance.

Africa reduces industrial activity as Asia grabs market share
Steve Johnson (FT) Jan 15, 2020
Reliance on agriculture as high as in 1981, even as its importance tumbles elsewhere.

Investors should heed lessons from 2018 shake-out
Robin Wigglesworth (FT) Jan 15, 2020
Markets prove robust in face of stresses but recent history shows how slip-ups can emerge.

The fallacy behind passive fund management
Jonathan Guthrie (FT) Jan 15, 2020
Ultra-low charges created an industry that hitched a lucrative free ride on the backs of stock pickers.

Conservatives should care about inequality
Tim Pitt (FT) Jan 15, 2020
Too wide a gap between top and bottom undermines trust in the system.

Suits v hoodies: the cryptocurrency battle
Gillian Tett (FT) Jan 15, 2020
Facebook's Libra was a wake-up call for central bankers, who are now adapting to a new digital reality.

Americans are wrong to paint China as an intellectual property thief
Gu Bin (FT) Jan 15, 2020
Mow that the US has reached the top of the ladder of tech supremacy, it wants to kick it away .

Trump Hopes Trade Deals Will Boost Growth. Experts Don't Agree.
Jim Tankersley (NYT) Jan 15, 2020
Trump administration officials say the "Phase 1" deal signed Wednesday will promote growth. Many economic forecasters are less optimistic.

Trump Gets His Trade Deal, China Gets the Win
Eswar Prasad (NYT) Jan 15, 2020
China has suffered short-term pain from the trade war, but it stands to gain in the long term.

A China Trade Relief
WSJ Jan 15, 2020
The tariff truce is welcome, but the price has been high.

The Wages of Europe
WSJ Jan 15, 2020
Workers need faster productivity growth, not a higher minimum wage.

China Surrenders to Reality in the Trade Dispute
Andy Puzder and Bill Hagerty (WSJ) Jan 15, 2020
Trump's tariffs were an effective weapon, and Beijing had to bend as its economic growth slowed.

Ensuring the Benefits of Capital Flows in the Middle East
Jihad Azour and Ling Zhu (IMF) Jan 15, 2020
With global economic risks now on the rise, MENA countries would be particularly vulnerable if global risk sentiment shifts.

Stability remains key to China
Alicia García-Herrero and Jianwei Xu (Bruegel) Jan 15, 2020
The most concerning aspect for the Chinese economy will still be to hold up domestic demand. The rapidly rising household debt will put further breaks of the households' ability to purchase durable goods.

Assessing "Phase One" of the US-China Trade Deal
Barry Wood (Globalist) Jan 15, 2020
Will China really halt technology transfers that it has required under many joint venture deals with U.S. companies?

A 1980s Icon and the Limits of Symbolic Value for Markets
John Authers (Bloomberg Opinion) Jan 15, 2020
The U.S.-China trade deal is no Plaza Accord, even if there are similarities.

Trump's Trade Deal Deserves a Polite Golf Clap, at Most
Mark Gongloff (Bloomberg Opinion) Jan 15, 2020
We'll take it, of course.

Germany's Second Economic Miracle Is Ending
Andreas Kluth (Bloomberg Opinion) Jan 15, 2020
Trade wars, demography and shocks to Germany's flagship industries are a bad mix.

China's Truce With U.S. Exposes Rest of the World
Christopher Balding (Bloomberg Opinion) Jan 15, 2020
The phase one pact may lead Beijing to put more trade pressure on other countries.

Trump Wins Round One of the U.S.-China Trade War
Tyler Cowen (Bloomberg Opinion) Jan 15, 2020
The U.S. president emerges with the economy intact and his credibility enhanced.

Is America Going Fascist?
Daron Acemoglu (Project Syndicate) Jan 15, 2020
Given US President Donald Trump's propensity for racist, divisive rhetoric, it is easy to see why so many of his opponents would describe him as a modern-day Benito Mussolini or Adolf Hitler. But by implying that all Trump supporters are irredeemable extremists, such rhetoric merely plays into his hands.

A new EU-level playing field instrument
Thorsten Kaeseberg (VoxEU) Jan 15, 2020
EU competition policy appears not sufficiently equipped to deal with the challenges recently raised by Chinese state capitalism. This column discusses some of the gaps in the EU's economic toolbox, and identifies several strategic issues that will need to be addressed as the Commission looks to close these gaps with the introduction of a 'level playing field instrument'.

The post-crisis evolution of monetary policy frameworks
Anna Samarina and Nikos Apokoritis (VoxEU) Jan 15, 2020
Monetary policy frameworks have evolved since the global crisis. The column investigates the changes for 14 advanced economy central banks. Banks are defining lower, more narrow inflation targets. Transparency and commitment have been enhanced, and the monetary policy toolkit has been expanded.

Does VAT Have Higher Tax Compliance Than a Turnover Tax? Evidence from China
Jianjun Li and Xuan Wang (VoxChina) Jan 15, 2020
We study the effects of compliance with the value-added tax (VAT) by exploiting the reform that replaced business tax (BT) with VAT in China beginning in 2012. We find that replacing the BT with VAT significantly increases the reported sales and costs for treated firms, and the impact is much stronger for business-to-business (B2B) transactions than for business-to-consumer (B2C) transactions. Buyers in B2B transactions have a stronger incentive to claim invoices for input tax credit and reduce their tax liability. In B2C transactions, however, individual consumers do not need VAT credit, the reform has little impact. Moreover, firms report that since the reform they have incurred greater costs to offset their tax liability. The results indicate that VAT has a higher rate of tax compliance than a turnover tax and that the VAT system has self-enforcing properties with regard to B2B transactions.

The Uneasy Truce of Trump's Trade Deal with China
John Cassidy (New Yorker) Jan 15, 2020
It looks suspiciously like Beijing, in signing the trade agreement, has bought off the President with some nice headlines while hedging, yet again, on giving up its mercantilist practices.

The 'Phase One' Trade Deal Is Still Hypothetical
James Palmer (FP) Jan 15, 2020
The United States and China inked a preliminary agreement, but the question of its enforcement remains.

Truce in the US-China trade war is only partial
FT View Jan 16, 2020
Relations remain in a worse state than when Donald Trump took office.

The alphabet soup of green standards needs a new recipe
Gillian Tett (FT) Jan 15, 2020
A common framework for climate accounting would put pressure on top executives to act.

Beware economists bearing simple equations
Chris Giles (FT) Jan 16, 2020
Proponents of wealth taxes and the Green New Deal are relying on conflicting theories.

The Fed is the cause of the bubble in everything
Michael Howell (FT) Jan 16, 2020
We know from experience that liquidity-fuelled asset markets usually end badly.

Memo to Brexiters — free trade is no vote winner
Philip Stephens (FT) Jan 16, 2020
The aggregate gains are distributed unevenly — witness how well the top 1 per cent have done.

Five things to watch when China releases fourth-quarter GDP
Tom Mitchell (FT) Jan 16, 2020
For the first time in 2 years the spectre of a trade war does not hang over affairs.

Angela Merkel warns EU: 'Brexit is a wake-up call'
Lionel Barber and Guy Chazan (FT) Jan 16, 2020
Germany's chancellor says the bloc must be more competitive.

Trump Hopes Trade Deals Will Boost Growth. Experts Are Skeptical.
Jim Tankersley (NYT) Jan 16, 2020
Trump administration officials say the "Phase 1" deal signed Wednesday will promote growth. Many economic forecasters are less optimistic.

We need to set a new bar on what a good trade deal is
Catherine Rampell (WP) Jan 16, 2020
Whatever meager gains Trump's trade deals represent hardly look worth the pain we endured getting here.

Why Trump caved on China
Fareed Zakaria (WP) Jan 16, 2020
His chief mistake was to go it alone in forging a new trade agreement.

Home ownership is the West's biggest economic-policy mistake
Economist Jan 16, 2020
It is an obsession that undermines growth, fairness and public faith in capitalism.

Managed trade: Centerpiece of US-China phase one deal
Gary Clyde Hufbauer (PIIE) Jan 16, 2020
The new US-China agreement commits China to buy an additional $200 billion of US goods and services during 2020 and 2021, over its baseline purchases in 2017, which looks like something that many Americans can cheer. But conflicts between aspirations and achievements are almost inevitable.

Trump reverts to Obama policy on China's currency
Joseph E. Gagnon (PIIE) Jan 16, 2020
Phase one of the US-China Economic and Trade Agreement tacitly repudiates previous Trump administration policy on China's exchange rate. In 2019, the administration labeled China a currency manipulator, charging that it had deliberately devalued its currency to make the cost of its exports lower in the United States, supposedly circumventing US tariffs on Chinese goods. That charge was misplaced. China's currency value declined because of market forces. The phase one accord commits both parties to "maintain a market-determined exchange rate"—a positive step that has a potential downside for Washington. It removes one of the few tools available to either country in the future to prevent a return of large trade imbalances.

The UK seeks its own "phase one" deal on Brexit
Jacob Funk Kirkegaard (PIIE) Jan 16, 2020
After two years of threats and bluster, President Trump and China reached a "phase one" trade deal incorporating some minor wins while kicking the hard stuff down the road. Prime Minister Boris Johnson, in gearing up for trade negotiations over the economic relationship with the European Union, may well take note and look for an early ceasefire while postponing tough choices into the future.

Factors determining Russia's long-term growth rate
Marek Dabrowski (Bruegel) Jan 16, 2020
Russia's economy cannot grow at the pace recorded in the early and mid-2000s because of the different external environment, the different stage of development and serious demographic headwinds.

Who gained from global growth last decade—and who will benefit by 2030?
Homi Kharas (Brookings) Jan 16, 2020
Around the world, household final consumption expenditure rose by $18.2 trillion in 2011 PPP terms between 2010 and 2020, from $46.5 trillion to $64.8 trillion. This growth, averaging about 3.3 percent per year, was the same as the average growth over the previous forty years—a bit better than growth in the first decade of this century, a bit worse than the growth in the last decade of the last century. It represents a continuation of a period of sustained advances in material prosperity in most places across the world that has seen average real consumption per person more than doubling in the last 40 years.

The $150 Million Machine With $200 Billion at Stake for China
Alex Webb (Bloomberg Opinion) Jan 16, 2020
The U.S. has succeeded in keeping a cutting-edge semiconductor machine out of China's hands even though it's made in Europe.

There's Something Fishy About China's U.S. Food Imports
David Fickling (Bloomberg Opinion) Jan 16, 2020
American exporters eager to profit from the trade deal should probably consider seafood and offal.

China Spins a Trade-Deal Trap in Bad Debt Market
Anjani Trivedi (Bloomberg Opinion) Jan 16, 2020
The risks are clear and the rewards aren't for U.S. investors tempted by an opening in distressed assets.

Trump's Economy Isn't as Strong as the Jobs Numbers Suggest
Karl W Smith (Bloomberg Opinion) Jan 16, 2020
The U.S. economy is better than it has been for almost two decades — but only in relative terms.

The Federal Debt Is Nothing to Lose Sleep Over
Narayana Kocherlakota (Bloomberg Opinion) Jan 16, 2020
The government can borrow as much from taxpayers as it wants.

How Developing Countries Create Industrial Champions
Reda Cherif, Fuad Hasanov, and Sabine Schlorke (Project Syndicate) Jan 16, 2020
Japan, South Korea, and other Asian economies achieved high-income status through strong state interventions that helped domestic firms venture into sophisticated high-tech sectors and compete globally. By applying these lessons, today's developing countries can provide similar opportunities for their companies, as well as good returns for global investors.

Has the World Economy Reached Peak Growth?
Jim O'Neill (Project Syndicate) Jan 16, 2020
Whether or not the 2010s were a "lost decade," one thing is clear: many countries fell short of their potential, possibly squandering their last best shot of registering strong GDP growth. In the decade ahead, demographic realities will catch up to China and the West, and the world will need a productivity miracle to offset the effects.

What Could Spoil 2020?
Anatole Kaletsky (Project Syndicate) Jan 16, 2020
The most probable scenario for the global economy and financial markets this year is fairly obvious: continued GDP growth, rock-bottom interest rates, and rising equity prices. It's more useful to identify which unlikely events would alter this likely benign scenario – and consider how unlikely they really are.

Immigration Decline Signals Trouble for America's Economy
Michael Greiner (Medium) Jan 16, 2020
And our global competitive edge.

Digital money: Implications for emerging market and developing economies
Erik Feyen, Jon Frost, and Harish Natarajan (VoxEU) Jan 16, 2020
Proposals for global stablecoins have put a welcome spotlight on deficiencies in financial inclusion and cross-border payments and remittances to emerging market and developing economies. This column, part of the Vox debate on digital currencies, argues however that stablecoin initiatives are no panacea. Moreover, they pose particular development, macroeconomic and cross-border challenges for emerging market and developing economies. It remains to be seen whether stablecoins can offer a decisive comparative advantage over fast-moving fintech innovations in these countries that are built on or improve the existing financial plumbing.

Monetary policy for commodity booms and busts
Thomas Drechsel, Michael McLeay, and Silvana Tenreyro (VoxEU) Jan 16, 2020
Macroeconomic volatility in commodity-exporting economies is closely tied to fluctuations in international commodity prices. This column studies optimal policy for commodity exporters in a small open economy framework that includes a key role for financial conditions. A positive commodity price shock leads to an inefficient boom, with inflation rising and output increasing relative to its efficient level. The optimal policy lets the exchange rate appreciate and raises interest rates, with a larger appreciation required the greater the loosening in borrowing conditions. The model suggests that exchange-rate pegs are highly suboptimal for commodity exporters, exacerbating inefficient swings in commodity production. Given the prevalence of managed exchange-rate regimes in emerging and developing commodity-exporting economies, the authors discuss the practical challenges that might justify such frameworks.

US monetary policy, international risk spillovers, and policy options
Sebnem Kalemli-Ozcan (VoXEU) Jan 16, 2020
The question of how shifts in US monetary policy affect other nations is key to central bank policymaking around the world. This column combines a simple theoretical framework with macro data from 70+ countries and micro data from over a million non-financial firms in 43 of these countries to show that monetary policy spillovers from the US to the rest of the world operate through changes in risk premia, with emerging market economies most vulnerable. It also discusses the policy options available to countries to deal with the effects of these risk spillovers.

New shipping fuel rules push specialised oil towards $100 a barrel
David Sheppard (FT) Jan 17, 2020
Regulations are dripping with good intentions but come at a cost.

A demographic trap and low growth are Putin's biggest challenges
John Dizard (FT) Jan 17, 2020
Moscow has an urgent need to close the trust deficit with the public.

EM investors can no longer ignore climate change
Timothy Ash (FT) Jan 17, 2020
The benign consensus for 2020 leaves too much out of the equation.

Investing in China Is Not a Good Deal
Marco Rubio (NYT) Jan 17, 2020
It will result in American capital flowing to a regime that undermines our country. This is not a win.

China recovery hopes inspire risk taking
Umesh Desai (AT) Jan 17, 2020
Risk rally extends gains after data shows signs of recovery in China's economy.

Whoever leads in artificial intelligence in 2030 will rule the world until 2100
Indermit Gill (Brookings) Jan 17, 2020
The last two decades witnessed the rise of China as an economic power; the next 10 years will decide whether it will eventually become a superpower.

Reforming Arab economies in times of distrustReforming Arab economies in times of distrust
Rabah Arezki (Brookings) Jan 17, 2020
Rising aspirations, timid reforms.

The World Looks to Abandon the Dollar as US Sanctions Tighten Their Grip
Ryan McMaken (Mises Wire) Jan 17, 2020
The US's enthusiasm for sanctions means Europe is learning the price of doing business with the United States and with the dollar. They're now developing new ways to work around the the US-dominated financial system.

How Will the British Economy Be Reshaped by Brexit?
Caroline Atkinson (Brink) Jan 17, 2020
The Brexit story has been told and retold countless times in political terms — but now comes the economic and social reality.

Oil's Minnows Need to Start Earning Their Keep
Liam Denning (Bloomberg Opinion) Jan 17, 2020
Capital is getting costlier, forcing change on smaller E&P firms.

Closing the SDG Gap
Kevin Watkins (Project Syndicate) Jan 17, 2020
Given the technology, knowledge, and resources now available, the gap between current progress toward the Sustainable Development Goals and what is achievable remains far too wide. Closing that gap will require smart politics, new partnerships, and bold campaigning.

The Truth About the Trump Economy
Joseph E. Stiglitz (Project Syndicate) Jan 17, 2020
It is becoming conventional wisdom that US President Donald Trump will be tough to beat in November, because, whatever reservations about him voters may have, he has been good for the American economy. Nothing could be further from the truth.

The New Davos Challenge
Alexander Friedman , Jerry Grinstein, Larry Hatheway, and Charles C. Krulak (Project Syndicate) Jan 17, 2020
As political leaders and corporate titans gather in Davos, Switzerland, for the World Economic Forum's annual meeting, they would do well to consider how the abstract ideal of "stakeholder capitalism" can be translated into reality. The key to changing the behavior of economic and political elites alike is to change what is measured.

Work in the Twenty-First Century
Jane Humphries (Project Syndicate) Jan 17, 2020
Most of the reading public will have encountered scholarly predictions about the "future of work," and yet the most important elements of the debate lie in the past. As three recent books by leading economists show, understanding the history of technological change is crucial for anticipating what it will mean for employment in the decades ahead.

Understanding why states are (in)effective: Targeting reforms and tailoring policy design
Michael Best, Jonas Hjort, and David Szakonyi (VoxDev) Jan 17, 2020
Evidence from Russia shows that through appropriate policy design, policymakers can overcome existing capacity challenges within bureaucracies.

America's aggressive use of sanctions endangers the dollar's reign
Economist Jan 18, 2020
Its rivals and allies are both looking at other options.

Fed's embrace of higher inflation is 'momentous' for markets
Jennifer Ablan (FT) Jan 18, 2020
Funds pile into gold, commodities and inflation-protected bonds as hedges for price rises.

Reasons to be cynical about the trade rally
Michael Mackenzie (FT) Jan 18, 2020
Investors heading back into emerging markets are taking a political risk.

Saving Capitalism from Inequality
Robert Manduca (Evonomics) Jan 18, 2020
Robust middle incomes deliver the demand that businesses need to produce.

Trump's trade wars have not been 'easy to win'
Gavyn Davies (FT) Jan 19, 2020
The US-China phase one trade deal will ease some self-inflicted economic damage.

As World Economy Shifts Gears, Trade Growth Slows
Adam Tooze (NYT) Jan 19, 2020
The collapse of the old model of industrialism leaves deeper scars in the United States than in other nations.

US–China trade deal disappoints
Jeffrey Schott (EAF) Jan 19, 2020
Despite the pact, the trade war continues substantially unimpeded

US-China trade rapprochement round one
Yao Yang (EAF) Jan 19, 2020
The conclusion of the deal shows that the United States has not "given up" on China.

What the China Trade Deal Means for U.S. Oil Producers
Julian Lee (Bloomberg Opinion) Jan 19, 2020
It's good news that the world's biggest energy importer has agreed to buy more American oil and gas. It's a shame it's not right next door.

Can You Get $10 Billion of Stock Orders in 10 Hours?
Shuli Ren (Bloomberg Opinion) Jan 19, 2020
Active managers are still making money in China. With the market opening up to foreigners, Goldman Sachs and BlackRock are piling in.

Britain is right to refocus on Africa
FT View Jan 20, 2020
It should learn from others in treating the continent as a business opportunity.

KKR's coolness towards India speaks volumes
Henny Sender (FT) Jan 20, 2020
Private equity giant does not consider troubled economy among its top targets.

The index providers are quietly building up enormous powers
Robin Wigglesworth (FT) Jan 20, 2020
Passive investing's rise has helped make the benchmark setters the new gatekeepers of capital.

How I became a China sceptic
Gideon Rachman (FT) Jan 20, 2020
At home and abroad, Xi's hardline approach is having negative effects.

Boom in emerging market corporate debt stirs fears
Colby Smith and Robin Wigglesworth (FT) Jan 20, 2020
Hedge fund says lack of liquidity could lead to violent price declines in a crisis.

Empowering African reform and inclusion
Simon Quijano-Evans (FT) Jan 20, 2020
The fruits of recent advances must be enjoyed more widely.

How Many Tariff Studies Are Enough?
WSJ Jan 20, 2020
The trade war hits consumers and exports, two more papers say.

Tentative Stabilization, Sluggish Recovery?
Gita Gopinath (IMF) Jan 20, 2020
In the October World Economic Outlook, we described the global economy as in a synchronized slowdown, with escalating downside risks that could further derail growth. Since then, some risks have partially receded with the announcement of a US-China Phase I trade deal and lower likelihood of a no-deal Brexit. Monetary policy has continued to support growth and buoyant financial conditions. With these developments, there are now tentative signs that global growth may be stabilizing, though at subdued levels.

Making Babies to Grow Economies Won't Work
Leonid Bershidsky (Bloomberg Opinion) Jan 20, 2020
Hungary, Poland and others are offering subsidies to raise birth rates, but their efforts have been futile.

Christine Lagarde Gets a Heavy Pointer on Her ECB Review
Ferdinando Giugliano (Bloomberg Opinion) Jan 20, 2020
A 336-page ECB staff document offers much-needed guidance on the best way forward, not least the tacit suggestion of a 2% inflation target.

Trump's Backward March on Trade
Anne O. Krueger (Project Syndicate) Jan 20, 2020
After three years of the Trump administration, the economic costs of "America First" are continuing to mount, with global trade and GDP growth slowing and investment in decline. Ironically, the biggest loser has been America.

Walking the Talk of Stakeholder Capitalism
Richard Samans and Jane Nelson (Project Syndicate) Jan 20, 2020
Corporate governance is undergoing a sea change, as the longstanding principle of "shareholder primacy" gives way to broader concerns. But recognition of social, environmental, governance, and data stewardship issues is not enough; company boards must also figure out how to integrate shareholder value with corporate responsibility.

The Best Tool to Fight Climate Change
Jeffrey Frankel (Project Syndicate) Jan 20, 2020
If they are serious about tackling climate change, governments must quickly establish the expectation that the price of carbon will follow a generally rising path in the future. Lofty statements from public officials and optimal calculations from climate modelers will not do the job.

Refugees and foreign investment
Anna Maria Mayda, Christopher Parsons, Han Pham, and Pierre-Louis Vézina (VoxEU) Jan 20, 2020
While resettled refugees in the US historically exhibit remarkable success, this column shows that refugees also foster development to their origin countries through the mechanism of foreign direct investment. A 10% increase in refugees in a given commuting zone causes outward FDI flows to increase to their countries of origin, 10 to 15 years after having taken refuge, by 0.54%. Decisions made primarily for humanitarian reasons in developed host nations thus yield economic benefits for some of the world's poorest nations in the medium run.

Striking Oil Ain't What It Used to Be
Amy Myers Jaffe (FA) Jan 20, 2020
Poor countries find fossil fuels just as the rich world swears them off.

U.S.-China Trade Deal: Looking Beyond the Truce
Mauro Guillen (K@W) Jan 20, 2020
The U.S.- China trade agreement signed on January 15 is a truce but it's a step in the right direction

A partial and defective US-China trade truce
Martin Wolf (FT) Jan 21, 2020
A large problem remains: Washington does not know what it is trying to achieve.

Bulls and bears are still fighting it out over sterling
Katie Martin (FT) Jan 21, 2020
UK currency is firmly among the world's worst performers this year.

Trump's Pyrrhic Trade Victories
Robert B. Zoellick (WSJ) Jan 21, 2020
In search of easy wins, the U.S. is throwing away its best cards: fairness and the rule of law.

Unappreciated hazards of the US-China phase one deal
Chad P. Bown (PIIE) Jan 21, 2020
The centerpiece of President Donald Trump's much anticipated "phase one" trade agreement with China, signed January 15, is a commitment by Beijing to import an additional $200 billion worth of American goods and services over the next two years. Trump is certain to cite that pledge time and again in his re-election campaign. Many experts were, of course, quick to note that China's promised purchases are bound to fall short. In fact, a close look at the data—presented below—shows that the numbers are even more unrealistic than first believed.

Stakeholder capitalism arrives at Davos
Addisu Lashitew (Brookings) Jan 21, 2020
The 2020 annual meeting of the World Economic Forum opens this week with the theme of "Stakeholders for a Cohesive and Sustainable World." More than 3,000 global leaders, including 53 heads of state, will convene in the resort town of Davos on the Swiss Alpine to deliberate on pathways to "stakeholder capitalism."

"No-Deal" Brexit Is Back as a Real Possibility
Therese Raphael (Bloomberg Opinion) Jan 21, 2020
Sajid Javid's comments on Britain diverging from EU rules make a skimpy trade deal more likely. In that case, would it be worth having one at all?

The Iron Ore Party Is Drawing to a Close
Clara Ferreira Marques (Bloomberg Opinion) Jan 21, 2020
Bulls need China to start splurging on infrastructure. Even that may not be enough.

Trump's French Trade Truce Only Puts Off the Battle
Lionel Laurent (Bloomberg Opinion) Jan 21, 2020
There's little reason yet to celebrate the de-escalation between Paris and Washington, D.C., over tech taxes and tariffs.

Today's Good Times Conceal Lurking Economic Troubles
Noah Smith (Bloomberg Opinion) Jan 21, 2020
The economy provides steady wealth increases at the top and a temporary recovery for everyone else.

Davos Seeks a Better World, But Who's Going to Pay for It?
Nir Kaissar (Bloomberg Opinion) Jan 21, 2020
Shareholders will suffer when they are no longer companies' sole priority.

Finding Europe's Way in the World
Sigmar Gabriel and Michael Hüther (Project Syndicate) Jan 21, 2020
For historical reasons, Europe has long resided in the strategic shadow of the United States, which itself has underwritten decades of globalization and rapidly expanding prosperity. But the global balance of power is rapidly shifting, leaving Europe increasingly exposed.

Who Pays for the Green Deal?
Hans-Werner Sinn ( Jan 21, 2020
As laudable as they are, the European Commission's proposals for addressing climate change rely overwhelmingly on forms of financing that violate EU rules. Because the Commission is barred from assuming debt, the European Investment Bank will do so on its behalf, and the European Central Bank will ultimately be left holding the bag.

The Case for Consumption Equality
Sarita Nayyar (Project Syndicate) Jan 21, 2020
Demographic, economic, and technological trends are making the world increasingly "flat" with respect to consumption. By supporting this shift, government and private-sector leaders can help to create a more cohesive, sustainable, and inclusive future.

Why AI Will Not Abolish Work
Andrea Komlosy (Project Syndicate) Jan 21, 2020
Work will not disappear because of the introduction of artificial intelligence. But without new ways of fairly distributing paid and unpaid work, AI and other new technologies could bring about a highly divided world.

Seigniorage through periodic recoinage
Roger Svensson and Andreas Westermark (VoxEU) Jan 21, 2020
For almost 200 years, old coins were frequently declared invalid in large part of medieval Europe and had to be exchanged for new ones for an exchange fee. This column shows that frequent recoinage generates incomes for the minting authority when the tax level is low enough and the punishment for using invalid coins is high enough, and when there is a limited coin volume in circulation and also an exchange monopoly. The system is equivalent to the 20th-century idea known as the Gesell tax.

Central bank independence: Low rates, new risks
Jean Barthélemy, Eric Mengus, and Guillaume Plantin (VoxEU) Jan 21, 2020
Real interest rates are at historically low levels in advanced economies. This column looks at the implications for central bank independence. It argues that low rates, even though they relax the budget constraint of the public sector, will not necessarily strengthen central bank independence. Quite counterintuitively, in the current context of low inflation, preserving central bank independence may require that the public deficit be financed with helicopter money, rather than government debt, to prevent the government from entering into uncontrollable spending.

Bailing on ECB Rate Cut
Erik Nelson (WF) Jan 21, 2020
As a result of stabilizing activity and inflation data and more constructive comments from a range of policymakers, we no longer expect any further ECB rate cuts for the foreseeable future, and expect policymakers to strike a fairly upbeat tone at this week's policy announcement.

Activists invest hope in a greening of finance
Adam Tooze (FT) Jan 22, 2020
Willing capital markets and cheap technologies will make climate change choices easier.

Davos business leaders discover the value of workers
Andrew Edgecliffe-Johnson (FT) Jan 22, 2020
Talk of putting stakeholders first ignores mistrust among employees.

How Boris Johnson can be an example to Europe
Martin Sandbu (FT) Jan 22, 2020
The UK prime minister's pledge to overcome regional inequality is shared by other leaders.

US-China trade war gives way to a precarious peace
Alan Beattie (FT) Jan 22, 2020
Rules-based international order has lost its sense of direction.

Fears rise that US-China economic 'decoupling' is irreversible
James Politi (FT) Jan 22, 2020
Many American companies are shifting supply chains to elsewhere in Asia.

Trade War's Pain May Deepen Even as Tensions Abate
Ben Casselman, Niraj Chokshi & Jim Tankersley (NYT) Jan 22, 2020
Manufacturers and farmers struggled last year because of tariffs, and there are signs that damage is spreading to other sectors of the economy.

Sub-Saharan Africa and International Taxation: Time for Unilateral Action?
Sanjeev Gupta and Peter Mullins (CGD) Jan 22, 2020
The time has come for SSA countries, and developing countries in general, to take unilateral action—as many developed countries have—to protect their tax base.

Inequalities in human development in the 21st century
Pedro Conceição (Brookings) Jan 22, 2020
Inequalities. The evidence is everywhere. And although they may be hard to measure and summarize, there is a sense in many countries that many are approaching a precipice beyond which it will be difficult to recover. Not all inequalities are harmful, but those that are perceived as being unfair tend to be. Under the shadow of sweeping technological change and the climate crisis, those inequalities hurt almost everyone. They weaken social cohesion and people's trust in government, institutions, and each other. They are wasteful, preventing people from reaching their full potential at work and in civic life, hurting economies and societies. And when taken to the extreme, people can take to the streets.

Incorporating political risks into debt sustainability analysis
Stavros Zenios and Andrea Consiglio (Bruegel) Jan 22, 2020
DSA applies to crisis countries only, but an early warning system identifying vulnerabilities is relevant for all countries. A more general, less stringent, debt vulnerabilities analysis (DVA) could be used to assess countries' debt management policies and identify vulnerabilities, without leading immediately to policy consequences. A more general framework could also incorporate political risks that are significant determinants of debt dynamics

Preparing for a Pandemic Makes Economic Sense
Tyler Cowen (Bloomberg Opinion) Jan 22, 2020
Vaccines are one industry where the case for free trade breaks down.

What Trump Loves Is Toxic for Europe's Banks
John Authers (Bloomberg Opinion) Jan 22, 202
Negative rates are weighing heavily on the region's stricken lenders.

ECB's Strategy Review Can't Magically Solve Its Main Problem
Mohamed Aly El-Erian (Bloomberg Opinion) Jan 22, 2020
Christine Lagarde has inherited a conundrum that will be difficult to overcome without political help.

The Strength of Consumers Is Overstated
Lakshman Achuthan and Anirvan Banerji (Bloomberg Opinion) Jan 22, 2020
Weakening sales trends and wage growth underscore a sustained slowdown in spending.

Restoring Fiscal Order in the United States
John B. Taylor (Project Syndicate) Jan 22, 2020
The United States' federal budget deficit is currently projected to explode, increasing the federal debt to unprecedentedly high levels. A very gradual fiscal consolidation, with federal spending as a share of GDP declining slightly each year, would both raise economic growth and create a more resilient economy.

Building Cooperation in an Unsettled World
Børge Brende (Project Syndicate) Jan 22, 2020
While the changing nature of global power may tempt some actors to seek advantage through confrontation, the expanding field of stakeholders offers the possibility of a course correction. With the geopolitics of the new era currently in flux, there is still an opportunity to steer the world toward cooperation and away from potentially damaging competition.

Magnification of the "China Shock" Through the U.S. Housing Market
Yuan Xu, Hong Ma, and Robert C. Feenstra (VoxChina) Jan 22, 2020
The "China shock" operated in part through the U.S. housing market, which is one important reason the China shock was as big as it was. If housing prices had not responded at all to the China shock, then the total employment effect would have been reduced by more than one-half. Even when fully recognizing that housing prices responded to the China shock, the independent employment effect of the China shock is still reduced by around 30%.

Productivity heterogeneity and variation in organisational form
Stephen Lin, Catherine Thomas, and Arturs Kalnins (VoxEU) Jan 22, 2020
Why do so many transactions take place within firms rather than between independent agents via markets? This column sheds new light on this question by analysing hotel chains' decisions about whether to outsource management to independent franchisees. Properties with the lowest and the highest occupancy rates tend to be managed by franchisees, at arm's length from the hotel chain. This variation in organisational form is consistent with the authors' model in which the incentives embodied in management contracts vary with property-level productivity.

Wuhan's Virus and Quarantine Will Hit the Poor Hardest
Rui Zhong and James Palmer (FP) Jan 22, 2020
China's migrant workers are far less visible to the state than its middle class.

We politicise central banks at our own peril
Dean Turner (FT) Jan 23, 2020
When independence and credibility is at risk, everyone stands to lose.

Hong Kong has no choice but to reset its dollar peg
Tom Roderick (FT) Jan 23, 2020
Liquidity is drying up and rates could catch fire with the slightest provocation.

The world needs a Libor for carbon pricing
Gillian Tett (FT) Jan 23, 2020
Setting a price would make it easier to run economic models and explain choices to voters.

Rethinking Argentina's debt
Francisco Rodríguez (FT) Jan 23, 2020
Big haircuts are not the answer in a crisis of confidence.

How China's Virus Outbreak Could Threaten the Global Economy
Alexandra Stevenson (NYT) Jan 23, 2020
Markets have tumbled as investors worry that Chinese shoppers will stay home for the Lunar New Year holiday and beyond. Economists say the possible impact isn't yet clear.

Cambodia rice crisis signals deeper economic rot
David Hutt (AT) Jan 23, 2020
EU tariffs, intense drought and deep debts all loom darkly over nation's top crop and employer.

Trade Sanctions Are Both Immoral and Ineffective
Matheus Fialho Vieira (Mises Wire) Jan 23, 2020
Sanctions have a long history of failure. The US government's recent sanctions on Iran will likely be no different, but they will certainly be harmful to the Iranian people.

How could net balances change in the next EU budget?
Zsolt Darvas (Bruegel) Jan 23, 2020
The gap between payments into the EU budget and EU spending in a particular country has importance when EU spending does not constitute European public goods, or there are risks for their improper use. I estimate that the Juncker Commission's proposal for the next seven-year budget would lead to big reductions (as a share of GNI) in the net payments to most central European countries, while the changes for other countries seem small.

How has global trade policy shifted over the past 3 years?
Simon J. Evenett and Johannes Fritz (Brookings) Jan 23, 2020
Since January 2017, a total of 6,755 changes in policies toward international trade, cross-border investment, data flows, and labor migration were documented worldwide. To get the full picture we considered trade reforms as well as protectionist steps. Where relevant, we matched a policy change to the most fine-grained United Nations trade data available, to gauge the amount of trade affected.

Federal Reserve's Repo Market Fix Is No Fix at All
Jim Bianco (Bloomberg Opinion) Jan 23, 2020
The central bank has become the lender of first resort when it should be the lender of last resort and offer funds at a penalty rate.

There's More to the $1 Trillion Deficit Than Just Tax Cuts
Justin Fox (Bloomberg Opinion) Jan 23, 2020
Trump's bite out of revenue shares responsibility with spending growth that's out of the ordinary.

Trump's Fed Nominees Will Mean Easier Money
Narayana Kocherlakota (Bloomberg Opinion) Jan 23, 2020
If confirmed, count on Judy Shelton and Christopher Waller to push for lower interest rates.

Talented Immigrants Make the U.S. Richer, Not Poorer
Noah Smith (Bloomberg Opinion) Jan 23, 2020
Immigration foes cling to a caricature of who is allowed to live and work in the country.

Oil's Contractors Are Contracting, and That's Good
Liam Denning (Bloomberg Opinion) Jan 23, 2020
Oilfield services firms are in a sensible managed retreat, following the lead of their clients.

Teaching Old Markets New Tricks
Preston McAfee and Simon Wilkie (Project Syndicate) Jan 23, 2020
Once one starts thinking about the far-reaching benefits of economic growth, the Nobel laureate economist Robert Lucas once observed, "it's hard to think about anything else." The same could be said of "market design," a form of applied economics that promises to improve outcomes in almost every domain one can imagine.

Fiscal multipliers during the European sovereign debt crisis
Lucyna Gornicka, Christophe Kamps, Gerrit Koester, and Nadine Leiner-Killinger (VoxEU) Jan 23, 2020
Recent studies have highlighted that the fiscal multipliers used by institutional forecasters were gradually adjusted upwards as the European sovereign debt crisis developed. This column confirms this finding, using a new dataset compiled from European Commission forecasts under the Excessive Deficit Procedure of the Stability and Growth Pact. In contrast to previous claims that the fiscal multiplier rose well above one at the height of the crisis, however, the authors argue that the 'true' ex-post multiplier remained below one.

The changing nature of work in the US
Enghin Atalay, Phai Phongthiengtham, Sebastian Sotelo, and Daniel Tannenbaum (VoxEU) Jan 23, 2020
Since the late 20th century, middle-wage occupations have shrunk as a share of total employment, while occupations requiring social and analytic tasks have grown. However, little is known about the degree to which individual occupations or job titles have changed over time and the extent to which these changes have been driven by new technologies. Analysing approximately 8.7 million job ads published in newspapers during 1940–2000, this column finds that non-routine analytic and interactive tasks in jobs increased, while manual tasks declined. The majority of changes have occurred within rather than between occupations. New technologies are linked to increased intensity of non-routine analytic job tasks.

Hong Kong's Greatness Is Slipping Away
Hilton Yip (FP) Jan 23, 2020
A once-shining city has been hollowed out by Beijing's misrule.

Europe Is the New Front in Trump's Trade War
Keith Johnson (FP) Jan 23, 2020
Savoring his partial China deal and passage of the new NAFTA, the U.S. president turns his sights on America's closest allies. But he may have less success there.

International agreement on digital taxes is needed
FT View Jan 24, 2020
Unilateral measures should be paused but not abandoned altogether.

ECB must make inflation targeting fit for purpose
FT View Jan 24, 2020
Review should consider a target range combined with long-term path.

Investors wonder if coronavirus will shatter calm
Peter Wells (FT) Jan 24, 2020
Fears increase that deadly virus could hit global growth and prompt a surge in volatility.

Coronavirus and EM equities — what are the risks for investors?
Tim Love (FT) Jan 24, 2020
It is too early to say which of two opposing scenarios will play out.

Canada and USMCA: An Unexpected Success Story
John M. Weekes (Brink) Jan 24, 2020
The strength of political support in the United States for the USMCA augurs well for the future of trade cooperation in North America. Although the situation for the fate of USMCA looks a lot better than it did 12 months ago, there are still some dark clouds on the horizon.

Italy's Five Star Looks Close to Collapse
Ferdinando Giugliano (Bloomberg Opinion) Jan 24, 2020
The end of the movement would create a more stable left-right dynamic, but it's hard to feel confident in Salvini delivering essential economic reform.

How to Prevent the Japanification of East Asia's Economies
Lee Jong-Wha (Project Syndicate) Jan 24, 2020
Hong Kong, Singapore, South Korea, and Taiwan were long hailed for their economic dynamism, but now risk following the low-growth path of Japan over the last three decades. To avoid this fate, their governments must adopt a comprehensive set of policies to tackle structural weaknesses.

Net-Zero at Davos
Jules Kortenhorst (Project Syndicate) Jan 24, 2020
The World Economic Forum used its influential annual meeting in Davos this year to issue a call to arms on climate change. Corporate and finance leaders must recognize that as members of the global elite, they have a duty to lead the charge toward a clean, low-carbon economy.

The Next Big Development Challenge
Arvind Subramanian and Josh Felman (Project Syndicate) Jan 24, 2020
New strategies for reviving growth in emerging markets will have to be indigenous, rather than coming from Western institutions. But where will such strategies come from, and who will provide the intellectual leadership?

Crumbling Infrastructure – or Crumbling Cliché?
Todd G. Buchholz (Project Syndicate) Jan 24, 2020
Democratic US presidential candidate Pete Buttigieg unveiled an infrastructure plan that magically settled on the same trillion-dollar price tag that candidate Donald Trump announced in 2016. But is America's infrastructure really so bad?

Exchange rate reconnect
Andrew Lilley, Matteo Maggiori, Brent Neiman, and Jesse Schreger (VoxEU) Jan 24, 2020
The 'exchange rate disconnect' describes the difficulty of explaining exchange rate movements using classical models and fundamentals. This column presents evidence of an 'exchange rate reconnect' – a substantial co-movement of the US dollar with global risk premia and US foreign bond purchases since the Global Crisis. Though short-lived, this relationship between these factors could shed new light on the nature of financial crises and risk.

Secondary market yields around new debt auctions and ESCB purchases
Roel Beetsma and Josha van Spronsen (VoxEU) Jan 24, 2020
For the last decade, euro area countries have undertaken substantial debt issuances in order to maintain or bolster international capital market access. This column shows that the ECB's unconventional monetary policy dampens yield cycles in secondary markets for euro area sovereign debt around new debt auctions. This dampening effect tends to be larger when market volatility is higher, and this can be used to minimise any instability generated, for example, by different countries' issuances occurring close together or the spillover effects of one country's auctions on another.

Africa's lands of opportunity
Elias Papaioannou (VoxDev) Jan 24, 2020
Which African countries have the best, and worst, intergenerational mobility?

The Twilight of America's Financial Empire
Henry Farrell and Abraham Newman (FA) Jan 24, 2020
Washington's economic bullying will erode its power.

Europe Is Destined to Age—but Not to Suffer the Consequences
Nicholas Gailey (FP) Jan 24, 2020
If Europe wants to confront the issues of an aging population, it will have to think beyond migrants and into more substantive policy reform.

The next bust may not come soon, but it will hurt
Michael Mackenzie (FT) Jan 25, 2020
Era of central bank intervention has not ended the credit cycle.

The costs of America's lurch towards managed trade
Economist Jan 25, 2020
China's vow to buy more American goods carries the risk of waste and distortion.

Investors at home and abroad are piling into American government debt
Economist Jan 25, 2020
Fiscal profligacy can continue for now, but is it economically sensible?

Investors at home and abroad are piling into American government debt
Economist Jan 25, 2020
Fiscal profligacy can continue for now, but is it economically sensible?

Despite a truce, US-EU trade relations remain tense
Economist Jan 25, 2020
Posturing at Davos aside, little of substance has changed.

Argentina's "Emergency Law" Just Means More of the Same
Daniel Lacalle (Mises Wire) Jan 25, 2020
Argentina is only going to prosper when it recognizes that its fiscal and monetary imbalances are not the fault of the citizens and their small businesses, but of the government.

China: Buying Time Is Not Cheap
Gene Frieda and Stephen Chang (PIMCO) Jan 25, 2020
In prioritizing stability over all other objectives, China is borrowing from future growth while reducing policy ammunition to counter future shocks.

Rating Events: One Theme to Follow in Global Credit Markets in 2020
Sonali Pier (PIMCO) Jan 25, 2020
Alongside pockets of weakness in credit markets come pockets of opportunity for active managers who focus on rigorous bottom-up research and careful credit selection.

China Virus Poses Longer-Term Economic Threat
Mohamed Aly El-Erian (Bloomberg Opinion) Jan 25, 2020
The outbreak adds risks and complications to the country's development process.

Threatening central bank independence one tweet at a time
Francesco Bianchi, Thilo Kind, and Howard Kung (VoxEU) Jan 25, 2020
President Trump has frequently attacked the Federal Reserve, but if the markets believe that the Fed is immune to political pressure, these tweets should not affect expectations about future monetary policy. This column argues that this is not the case. Tick-by-tick fed funds futures data around the time of Trump tweets criticising the conduct of monetary policy suggest that market participants do not believe the Fed is fully independent.

The ECB should ditch its inflation target
Wolfgang Münchau (FT) Jan 26, 2020
Research shows that the policy has had an adverse effect on economic growth.

Signs of a global recovery in manufacturing
Gavyn Davies (FT) Jan 26, 2020
Markets are right to be optimistic that industrial sector will soon rebound.

Modi's culture war storms India's elite universities
Jo Johnson (FT) Jan 26, 2020
The country's hopes of transforming itself into a knowledge economy are under threat.

Did the US just concede defeat in China tech war?
David Goldman (AT) Jan 26, 2020
Washington abandons long-expected rules to tighten controls on export of components to telecom giant Huawei.

The White House offers senators a false, and poisonous, choice
Fred Hiatt (WP) Jan 26, 2020
Republicans no more than Democrats can dodge the consequences of their vote on Trump.

Prepare for Turbulence in Emerging Markets
Satyajit Das (Bloomberg Opinion) Jan 26, 2020
Developing-country models aren't equipped for structural changes underway in advanced economies.

Peak Permian Is Approaching Faster Than You Think
Julian Lee (Bloomberg Opinion) Jan 26, 2020
The region that's driving U.S. oil growth is already showing signs of peaking, making the goal of U.S. energy independence as elusive as ever.

Oil Was Sick Even Before Coronavirus Hit
Liam Denning and Mark Gongloff (Bloomberg Opinion) Jan 26, 2020
Speculative fever in December left prices vulnerable to virus fears.

Housing speculation and its economic consequences
Zhenyu Gao, Michael Sockin, and Wei Xiong (VoxEU) Jan 26, 2020
Housing speculation became a national phenomenon in the low interest rate environment of the US during the mid-2000s. This column argues that speculation, which was largely independent of the credit expansion to subprime households, contributed significantly to US housing and economic cycles in the 2000s. It led not only to greater price appreciation, economic expansions, and housing construction during the boom in 2004–2006, but also to more severe economic downturns during the subsequent bust in 2007–2009.

Nature, nurture, and intergenerational mobility
Per Engzell and Felix Tropf (VoxEU) Jan 26, 2020
The debate about the influence of 'nature versus nurture' in human achievement persists. This column contributes to this debate by linking trends in intergenerational mobility to data from nearly 50,000 twins. The findings suggest that in countries with lower rates of social mobility, family environment ('nurture') plays a more significant role than it does in countries where institutions that promote mobility enjoy wide support.

Depopulation is eastern Europe's biggest problem
Ivan Krastev (FT) Jan 27, 2020
There is a connection between the twin crises of democracy and demography.

AI will rewrite the future of fund management
Amin Rajan (FT) Jan 27, 2020
Technology is set to disrupt the industry and unleash a winner-takes-all dynamic.

A plot twist in Donald Trump's US growth story
Rana Foroohar (FT) Jan 27, 2020
The president's 'roaring geyser' narrative may be about to run out of steam.

China's Coronavirus Has Revived Global Economic Fears
Peter S. Goodman (NYT) Jan 27, 2020
The spread of the dangerous virus has spooked global markets and threatened prospects for economic growth.

Let's celebrate slow economic growth
Charles Lane (WP) Jan 27, 2020
There's little we can do to change it, anyhow.

Wuhan's silent predator will hit China's economy
Gordon Watts (AT) Jan 27, 2020
The virus-ravaged city that has merged Motown with Silicon Valley could knock 1% off the country's GDP.

Supply Chain Risks Are Magnifying in an Uncertain World
Markus Groth, Cornelius Herzog and Martin Zollneritsch (Brink) Jan 27, 2020
Manufacturing organizations are facing an unprecedented array of supply chains risks in the next few years. If not managed well, these risks may result in severe supply chain disruptions and delivery failures, with consequences for manufacturers and customers. The required elements of an effective risk management strategy, along with how to manage crises.

Did the US-China phase one deal deliver a win for US financial services?
Martin Chorzempa (PIIE) Jan 27, 2020
An inconspicuous but important element in the "phase one" trade agreement between the United States and China promises greater access to Chinese consumers and businesses for Visa, Mastercard, JPMorgan Chase, and other US financial and insurance companies. The United States has tried and failed for years to get China to open up in this area, while the United States has itself erected barriers to Chinese financial firms operating here. But will the deal, signed on January 15, 2020, fulfill its promises on financial services? The deal does embody some gains, but it is too soon to tell whether they will deliver the goods.

A New Framework to Measure Aid Effectiveness
Ian Mitchell and Andrew Rogerson (CGD) Jan 27, 2020
Are countries committed to aid effectiveness?

Libra as a currency board: are the risks too great?
Julia Anderson and Francesco Papadia (Bruegel) Jan 27, 2020
The Libra Association claims it will be analogous to a currency board regime, but they have overlooked the problems of monetary management that come with it.

Can Boris Johnson Double U.K. Growth? Don't Bet on It
John Vincent Cable (Bloomberg Opinion) Jan 27, 2020
The U.K. leaves the EU on Jan. 31. That will prove easier than the doubling of growth that the prime minister has promised.

Of Course Trump's Tariffs Hurt U.S. Manufacturing
Michael R Strain (Bloomberg Opinion) Jan 27, 2020
Protectionism isn't helping its intended beneficiaries, new research shows.

China's Economy Is Different With This Virus Outbreak
Tim Culpan (Bloomberg Opinion) Jan 27, 2020
The way people select, shop and consume has changed vastly in the 17 years since SARS.

Markets Are Getting Used to Shocks But Mask Risks
Mohamed Aly El-Erian (Bloomberg Opinion) Jan 27, 2020
The reaction to the coronavirus follows a pattern that obscures long-term challenges.

A Big Infrastructure Deal Faces a New Hurdle
Conor Sen (Bloomberg Opinion) Jan 27, 2020
The tightening labor market could be a bigger obstacle than worries about budget deficits.

Climate Change Is Real, and Really Expensive
James Nixon (Bloomberg Opinion) Jan 27, 2020
The economic case for climate action is hardening — and putting heat on policy makers. s

A Global Economy Without a Cushion
Stephen S. Roach (Project Syndicate) Jan 27, 2020
From 1990 to 2008, annual growth in world trade was fully 82% faster than world GDP growth. Now, however, reflecting the unusually sharp post-crisis slowdown in global trade growth, this cushion has shrunk dramatically, to just 13% over the 2010-19 period, leaving the world economy more vulnerable to all-too-frequent shocks.

Winning the Electrification Race
Adair Turner (Project Syndicate) Jan 27, 2020
If governments adopt bold policies to help accelerate the production of clean electricity, the world could build a zero-carbon economy fast enough to limit climate change to a manageable degree. But without such measures, a zero-carbon economy will come much too late.

Re-Engineering China's Economy
Andrew Sheng and Xiao Geng (Project Syndicate) Jan 27, 2020
The recent "phase one" trade deal between the United States and China does not resolve core outstanding bilateral issues, and the two countries' strategic rivalry will likely intensify in the medium to long term. But the accord gives China's leaders a new opportunity to develop better and more open domestic markets.

Will the Coronavirus Cause a Major Growth Slowdown in China?
Shang-Jin Wei (Project Syndicate) Jan 27, 2020
Some fear that the timing of China's coronavirus outbreak – at the start of the country's week-long New Year celebration, and in the middle of traditional school-break travels – will exacerbate the economic fallout from the epidemic. But three important factors may limit the virus's impact on Chinese and global GDP.

How to Improve on a Good Year for Global Health
Melvin Sanicas (Project Syndicate) Jan 27, 2020
The discovery of new viruses, vaccines, and treatments in 2019 was the result of investments in global surveillance, cross-sector partnerships, and scientific advances. At a time when misinformation is calling into question the validity of facts, the world needs to support science more than ever.

Tracking long-run growth in the euro area with an atheoretical tool
Mariarosaria Comunale, and Francesco Paolo Mongelli (VoxEU) Jan 27, 2020
Over the past 30 years, euro area countries have undergone significant changes and endured diverse shocks. This column assembles a large set of variables covering the years 1990-2016 and investigates possible links to fluctuations and differences in growth rates. The findings suggest a significant positive role for institutional integration in supporting long-run growth, particularly for periphery countries. Competitiveness and monetary policy also matter for sustained growth in the long run, while higher sovereign stress, equity pricy cycles, loans to non-financial corporations and debt over GDP have either mixed or negative effects in core and periphery countries.

What if economists are all wrong on productivity?
Glenn Hutchins (FT) Jan 28, 2020
Deflation may be hiding big gains from technological improvements.

Markets are much too complacent over inflation
Peter Cramer (FT) Jan 28, 2020
Investors should find ways to protect portfolios while the cost of doing so is cheap.

Spectre of stagflation looms over India and China
Robin Harding, Amy Kazmin and Don Weinland (FT) Jan 28, 2020
World's two most populous countries hit by surge in consumer prices and slowing growth.

The Fed Pretends to Listen
Donald L. Luskin (WSJ) Jan 28, 2020
Central bankers insist on promoting inflation. What we've got here is failure to communicate.

No point arguing with an index
Brian Caplen (Banker) Jan 28, 2020
With more of a bank's stock and bonds being held by passive funds, what does this mean for CEOs?

Got Brexit Done. What Now for International Development?
Mikaela Gavas and Simon Maxwell (CGD) Jan 28, 2020
"Get Brexit Done" was the Conservative Party's election-winning slogan last month. Formally, that objective has been achieved. But what does that mean for international development—for aid, humanitarian relief, trade, security, migration, climate change, and beyond? Last week we gave evidence to the House of Lords EU External Affairs Sub-Committee on development cooperation after Brexit. Below we sketch out some of our key discussion points.

A Call for Vigilance After a Strong Year for Risky Assets
Tobias Adrian and Fabio Natalucci (IMF) Jan 28, 2020
While we have seen some recent volatility, many risky asset markets around the world had a spectacular year in 2019. Equity market indices were up just over 30 percent in the United States, close to 25 percent in Europe and China, and over 15 percent in emerging markets and Japan. Emerging-market sovereign debt, U.S. high-yield debt, and emerging-market corporate debt all had returns in excess of 12 percent. Remarkably, the fourth quarter of 2019 was especially strong in China and in emerging markets.

Future of Fiscal Rules in the Euro Area
Vitor Gaspar (IMF) Jan 28, 2020
First, I will focus on the original rationale for having fiscal rules. Second, I will discuss some important lessons we have learned over the last thirty years and identify some open issues. Third, I will present some policy options.

Oil Prices and the Ripple Effects of ESG
Greg E. Sharenow (PIMCO) Jan 28, 2020
Questions about environmental, social, and governance (ESG) issues are becoming central to commodity markets and capital allocation discussions.

The Coronavirus Won't Wreck the Commodities Market
David Fickling (Bloomberg Opinion) Jan 28, 2020
Don't underestimate how much industrial stimulus Beijing will inject in the economy to keep growth on-target.

A Brutal Brexit Is Lose-Lose for the City of London and the EU
Lionel Laurent (Bloomberg Opinion) Jan 28, 2020
Eleven months of trade talks are not enough for London to offset the loss of its biggest export market. Nor is it enough for Paris, Frankfurt or Dublin.

The 'Not QE' Debate Looms Large Over Fed Decision
Brian Chappatta (Bloomberg Opinion) Jan 28, 2020
The central bank may tweak its "other" interest rate and will most likely face tough questions about its balance-sheet expansion.

Fed Surprise? Keep an Eye on Inflation Comments
Timothy A Duy (Bloomberg Opinion) Jan 28, 2020
Chair Jerome Powell may be dropping hints that the central bank needs to turn more dovish after years of falling short of its target.

Explaining the Triumph of Trump's Economic Recklessness
Jean Pisani-Ferry (Project Syndicate) Jan 28, 2020
The Trump administration's economic policy is a strange cocktail: one part populist trade protectionism and industrial interventionism; one part classic Republican tax cuts skewed to the rich and industry-friendly deregulation; and one part Keynesian fiscal and monetary stimulus. But it's the Keynesian part that delivers the kick.

The Power of AI in Emerging Markets
Frank-Jürgen Richter (Project Syndicate) Jan 28, 2020
Artificial intelligence is forecast to contribute $15.7 trillion to the global economy by 2030, delivering socioeconomic value to all sections of society over the coming years. And a substantial share of this total will accrue to emerging economies.

A silver lining of forced migration: Investment in education
Sascha O. Becker, Irena Grosfeld, Pauline Grosjean, Nico Voigtländer, and Ekaterina Zhuravskaya (VoxEU) Jan 28, 2020
Can the experience of being uprooted by force encourage people to invest in portable assets such as education? The idea has a long history but is a difficult hypothesis to test. This column combines data from historical censuses with newly collected survey data to show that Polish people with a family history of forced migration as a result of WWII are significantly more educated today than any comparison group. The results suggest a shift in preferences toward investment in human rather than physical capital, and imply that the benefits of providing schooling for forced migrants and their children may be even greater – and more persistent – than previously thought.

To End Forever War, End the Dollar's Global Dominance
David Adler and Daniel Bessner (TNR) Jan 28, 2020
In its laser focus on military restraint, the present debate about endless war overlooks the financial architecture of U.S. empire.

Market Players Wonder: Is China's Coronavirus the Next Black Swan?
Keith Johnson and James Palmer (FP) Jan 28, 2020
Traders remain jittery as experts hint at a global epidemic that could last into the summer.

Central banks swim against tide on inflation
Megan Greene (FT) Jan 29, 2020
If they are serious about their mandates, the Fed and ECB should consider other strategies.

Growth in 'south-south' trade grinds to a halt
Steve Johnson (FT) Jan 29, 2020
Slowdown comes despite rising protectionism and sluggish growth in the west.

Britain after Brexit will not be alone, but it will be lonelier
Martin Wolf (FT) Jan 29, 2020
The UK is entering a new world, going its own way while superpowers dominate.

The threat for oil is shocks to demand, not supply
David Sheppard (FT) Jan 29, 2020
Sharp fall in price after the coronavirus outbreak comes despite big outage in Libya.

A Greek Economic Revival
WSJ Jan 29, 2020
Surprise: Tax cuts and deregulation boost Europe's laggard.

Why are people protesting?
Elena Ianchovichina, Martijn Burger, and Caroline Witte (Brookings) Jan 29, 2020
Mass protests have become a common phenomenon. In 2019, they occurred in nearly every corner of the globe and in economies of all kinds—developed and developing, democracies and autocracies, places with high and low inequality, resource-rich and -poor. The incidence of strikes and demonstrations spiked in 2011—the year of the Arab Spring—and has stayed elevated since then (Figure 1). More recently protests spread to Latin America, Hong Kong, and Middle Eastern countries, including Algeria, Lebanon, Iraq, and Iran, which were relatively unaffected by the Arab Spring events. What is going on? Has the world entered a period of perpetual social unrest?

What Does the New USMCA Look Like for Mexico?
Antonio Garza (Brink) Jan 29, 2020
The new rules of the USMCA will, of course, shape Mexico's economy and investment climate, but it will also affect labor conditions in the country and its automotive manufacturing sector. Antonio Garza, former U.S. Ambassador to Mexico, explains that some rules may unleash investment, trade and better labor conditions, but they likely won't be without additional hurdles. Learn more » s

Outlook for Latin America and the Caribbean: New Challenges to Growth
Alejandro Werner (IMF) Jan 29, 2020
Economic activity in Latin America and the Caribbean stagnated in 2019, continuing with the weak growth momentum of the previous five years and adding more urgency and new challenges to reignite growth. Indeed, real GDP per capita in the region has declined by 0.6 percent per year on average during 2014–2019—a sharp contrast from the commodity boom's average increase of two percent per year during 2000–2013.

Fed's Repo Response Isn't Fueling the Stock Market
William C Dudley (Bloomberg Opinion) Jan 29, 2020
Equities are being driven by low rates and a healthy economy, not central bank T-bill purchases.

Global Corporate Tax Avoidance Might Get Harder
Christopher Smart (Bloomberg Opinion) Jan 29, 2020
An effort to coordinate international taxation will end many of the old dodges.

Inflation 'Near' 2% Doesn't Cut It Anymore for the Fed
Brian Chappatta (Bloomberg Opinion) Jan 29, 2020
The central bank confirms that its monetary policy is all about price growth now.

When China's Market Reopens, the Wild Guessing Games Begin
Shuli Ren (Bloomberg Opinion) Jan 29, 2020
Investors will be fixated on two numbers that should reveal whether Beijing is up to task. Trading won't be for the fainthearted.

Brazil's Biggest Economic Risk Is Complacency
Otaviano Canuto (Project Syndicate) Jan 29, 2020
This year can be a decisive one for Brazil's transition to a more robust and sustainable growth path – but only if the government commits to fiscal and structural reform. If Brazil's leaders fail to take this opportunity to lay the foundations for long-term prosperity, it may not be long before the economy stalls again.

Black Markets for License Plates in Chinese Megacities
Oystein Daljord, Mandy Hu, Guillaume Pouliot, and Junji Xiao (VoxChina) Jan 29, 2020
Chinese megacities ration new car sales by capping the number of license plates they issue that permit driving within city limits. Concerns regarding the fairness of this policy have led city governments to use lotteries to allocate either all or a share of the license plates. Lotteries create gains from trade that have stimulated black markets for license plates in such cities as Beijing and Hangzhou. Though black markets are usually considered undesirable, they can correct for distortionary regulations. A recent literature evaluates the trade-offs between equity and efficiency that are inherent to a city's choice of mechanism to allocate its license plates. In spite of the substantial estimated volume of trade in Beijing's black market for license plates, most of the gains from trading license plates are lost to transaction costs.

Using behavioural economics in development policy
Michael Kremer and Gautam Rao (VoxDev) Jan 29, 2020
Can the burgeoning field of behavioural economics provide important insights into development issues?

Boris Johnson's New Scramble for Africa
Stephen Paduano (FP) Jan 29, 2020
A global Britain? British Prime Minister Boris Johnson's new commitment to Africa will require Britain to diversify its investments on the continent.

The Bank of England should hold fire on rates
FT View Jan 30, 2020
Data point to weakness last year but also a bounce back in confidence.

Investors should get set for tougher macro tools
Edward Smith (FT) Jan 30, 2020
Central banks are trying to make the financial system as boom-bust resistant as possible.

Reasons to worry about our addiction to loose money
Gillian Tett (FT) Jan 30, 2020
In spite of central bank 'petrol', growth has been lower than economists might have expected.

Europe's Green Deal must reach beyond its borders
Simone Tagliapietra and Georg Zachmann (FT) Jan 30, 2020
Action in Africa and elsewhere needs a streamlined, co-ordinated approach.

India's government is prioritizing nationalism over economic renewal
Milan Vaishnav (WP) Jan 30, 2020
India is experiencing its most severe economic slowdown in three decades.

Brexit is arriving at the beginning of the end
Carl Bildt (WP) Jan 30, 2020
The process has turned out to be far more complicated than foreseen.

China's coronavirus semi-quarantine will hurt the global economy
Economist Jan 30, 2020
It may affect industries from tourism to plastic flowers.

Britain after Brexit
Economist Jan 30, 2020
Now that Britain is sailing alone, Boris Johnson needs a lodestar. Liberalism offers one.

Britain's divergence dilemma
Economist Jan 30, 2020
There will be costs to diverging from EU regulation. But there will be benefits, too.

Five Scenarios for Brexit After January 31
Denis MacShane (Globalist) Jan 30, 2020
On January 31, the UK leaves the EU Treaty as a signatory member. What happens next?

Six Charts Explain South Africa's Inequality
IMF Jan 30, 2020
South Africa suffers among the highest levels of inequality in the world when measured by the commonly used Gini index. Inequality manifests itself through a skewed income distribution, unequal access to opportunities, and regional disparities. Low growth and rising unemployment have contributed to the persistence of inequality.

How Jacques de Larosière and Paul Volcker contained the 1982–89 global debt crisis
Edwin M. Truman (PIIE) Jan 30, 2020
The most serious global financial crisis in post–World War II history, up to that point, flared up over the summer of 1982. Mexico found it was unable to service its external debts and turned to the United States and the International Monetary Fund (IMF) for help.

Fed Balance Sheet in Focus
Tiffany Wilding (PIMCO) Jan 30, 2020
As the Fed winds down its T-bill and repo programs, we don't anticipate market volatility to emerge – at least not as a result of the Fed's actions.

Europe's banking union must be cyberproofed
Guntram B. Wolff (Bruegel) Jan 30, 2020
The EU urgently needs to conduct joint preparedness exercises and create uniform information and disclosure requirements that help build a true pan-European insurance market for cyber risks

Could Central Banks Develop Their Own Digital Currencies?
Alex Privitera (Brink) Jan 30, 2020
The future of digital payments is currently pitting major tech companies against a growing number of central banks. And banks are worried about implications for financial stability — and ultimately the sovereignty of nations. How digital currencies may turn into a third form of base money and the risks that could follow.

India Can't Spend Its Way Out of a Slowdown
Mihir Sharma (Bloomberg Opinion) Jan 30, 2020
Loose fiscal policy won't spur the private investment it needs to grow.

Thanks to China, It's Year of the Black Swan
Daniel Moss (Bloomberg Opinion) Jan 30, 2020
The Wuhan virus is only the most recent surprise event to challenge Beijing's economic partners.

Modi's Many Stalemates Are a Drag on Indian Budget
Andy Mukherjee (Bloomberg Opinion) Jan 30, 2020
The government needs to come clean about its failures to salvage the economy from the distraction of identity politics.

Europe's Ballyhooed "Industrial Strategy" Might Be a Disaster
Andreas Kluth (Bloomberg Opinion) Jan 30, 2020
The EU should forget about using industrial strategy to pick winners, and get on instead with integrating its fragmented markets for services and capital.

Don't Be Fooled by the Friendly Brexit Goodbyes
Lionel Laurent (Bloomberg Opinion) Jan 30, 2020
The U.K. and European Union have agreed on quite a lot of late. But they'll both revel in finding their place in this world free from each other.

If Value Stocks Are Toxic, Why Aren't Junk Bonds?
Nir Kaissar (Bloomberg Opinion) Jan 30, 2020
They are essentially the same investment in different parts of the capital structure.

Has Davos Man Changed?
Joseph E. Stiglitz (Project Syndicate) Jan 30, 2020
The discussion at Davos this year may be part of a move in the right direction toward a more sustainable capitalism. But we need to see some proof: corporations paying taxes and livable wages, for a start, and respecting – and even advocating – government regulations to protect our health, safety, workers, and the environment.

Britain Enters the Unknown
Chris Patten (Project Syndicate) Jan 30, 2020
Compared to the threats posed by climate change and China's hostility to liberal democracy, the consequences of Brexit may seem far less significant. But the United Kingdom has chosen an odd and dangerous time to decide to go it alone.

What Kind of Great Power Can Europe Become?
Joschka Fischer (Project Syndicate) Jan 30, 2020
While EU policymakers cavil over constitutional questions about desired levels of European integration, global forces are imposing a political transformation on Europe. The only real question facing Europeans is whether they will establish themselves as a global power, or become a mere pawn of others.

Escaping the Global Complexity Trap
Carl O. Pabo (Project Syndicate) Jan 30, 2020
Democracy and capitalism, coupled with modern science, have given rise to a remarkable flourishing of thought, creativity, expression, and invention, which has entrenched the longstanding assumption that knowledge – and prospects for human control of our fate – would steadily increase. But we have now entered a phase in which increasing complexity is creating a world that no one understands in detail.

Inequality and Economic Growth
Simon Johnson (Project Syndicate) Jan 30, 2020
Economic policymakers can no longer afford to view inequality as an issue separate from boosting employment and incomes. Addressing it through a wealth tax, combined with more effective antitrust policies and enforcement, has become essential to sustaining economic growth, including by encouraging the creation and growth of new business.

The Real Brexit Negotiations Start Now
Willem H. Buiter (Project Syndicate) Jan 30, 2020
It is not an exaggeration to argue that the real negotiations about the future relationship between the United Kingdom and the European Union are starting only now. The UK can now look forward to painful grind of negotiations and policy implementation, probably lasting many years.

How ECB purchases of corporate bonds helped reduce firms' borrowing costs
Andrea Zaghini (VoxEU) Jan 30, 2020
In June 2016, the ECB launched its corporate sector purchase programme, through which it purchased corporate bonds in an effort to improve the financing conditions of euro area firms. This column argues that the programme was successful. In particular, by increasing prices and reducing yields in the targeted bond market segment, it encouraged investors to shift their investments towards similar but somewhat riskier bonds. This reduced borrowing costs for many firms, including those whose bonds were not eligible for direct purchase by the ECB.

Human capital, millwrights, and industrialisation in 18th-century England
Joel Mokyr, Assaf Sarid, and Karine van der Beek (VoxEU) Jan 30, 2020
The consensus among economic historians has been that Britain's leadership during the Industrial Revolution owed little to the school system. But recent work on human capital suggests that we should rethink this consensus on the role of human capital. This column shows how millwrights – highly skilled carpenters who specialised in constructing and repairing watermills – had a persistent effect on the mechanisation of textile- and iron-making and on the economic expansion that was taking place on the eve of the Industrial Revolution.

This will be Africa's century
Paul Jackson (FT) Jan 31, 2020
Demographics will fuel the continent's rise in a world of shrinking working-age populations.

What will India do to revive its stuttering growth?
Amy Kazmin (FT) Jan 31, 2020
Saturday's budget will seek to address one of most severe slowdowns in decades.

Britain's Brexit Shrug: Just 'Get On With It
Mark Landler (NYT) Jan 31, 2020
For the last three years, Britons have debated Brexit. Now that it is here, there is a sense of relief even though the country still must decide what sort of Brexit it wants.

The Growth Cost of Tariffs
WSJ Jan 31, 2020
GDP growth fell to a 2% annual trend in 2019. Trade friction is the culprit

China quarantined in intensive care
Gordon Watts (AT) Jan 31, 2020
Virus outbreak forces global airlines to suspend flights, WHO issues world alert and foreign companies shut down.

Who gains from trade?
Erhan Artuc, Bob Rijkers, and Guido Porto (Brookings) Jan 31, 2020
Introducing the Household Impacts of Tariffs dataset.

The Era of Boom and Bust Isn't Over
Thorsten Polleit (Mises Wire) Jan 31, 2020
Central banks have done nothing to end the boom-and-bust cycle. Instead, their unscrupulous interventions in credit markets just prolong the boom. But it's a huge mistake to assume that bringing market interest rates to zero will create a perpetual boom.

Coronavirus: One Step Back for the Global Economy
Roland Rajah (Brink) Jan 31, 2020
For a second there, the global economy was off to a slightly better start for 2020 until the Wuhan coronavirus impacted the world. We can only speculate what ultimate impact — both human and economic — the virus will have, depending on how far it ends up spreading. How the virus will impact tourism and consumer spending.

The US-China trade agreement will not put an end to geopolitical risks
Alicia García-Herrero (Bruegel) Jan 31, 2020
The agreement between the US and China should not be read so positively in Europe, especially in Germany.

Brexit: What Next for Trade and Development?
Ian Mitchell and Kimberly Ann Elliott (CGD) Jan 31, 2020
The UK officially leaves the EU on 31st January and has prioritised an independent trade policy—but how will it meet its commitment to improve access for the poorest countries?

A Trader Without Information Is a Dangerous Thing
Bloomberg View Jan 31, 2020
With China's real economy practically shut down but markets opening, investors are left parsing sparse clues about the coronavirus outbreak.

The Fed's Key Yield Curve Inverted Again. Watch Out.
Brian Chappatta (Bloomberg Opinion) Jan 31, 2020
While a recession is hardly a guarantee, previous episodes have forced the central bank's hand.

The Robots Are Coming for Fund Management Jobs
Mark Gilbert (Bloomberg Opinion) Jan 31, 2020
Japan's GPIF is harnessing artificial intelligence to help oversee its $1.6 trillion of assets.

In Defense of Cosmopolitanism
Andrés Velasco (Project Syndicate) Jan 31, 2020
Nowadays, the word "cosmopolitan" conjures an image of jet-setting, latte-sipping elitists with little or no regard for their fellow citizens. In fact, cosmopolitans are idealists for whom love of country begins with a fundamental commitment to the equal dignity of all human beings.

Lagarde's Cautious Optimism Was Too Optimistic
Ferdinando Giugliano (Bloomberg Opinion) Jan 31, 2020
The ECB president's ever-so-slight shift in tone isn't welcome in a world used to Mario Draghi's steady forward guidance.

Markets Are Ignoring Manufacturers' Glum Message
Brooke Sutherland (Bloomberg Opinion) Jan 31, 2020
Investors may not want to believe it, but the hoped-for industrial rebound looks tentative at best.

The Approaching Debt Wave
Kaushik Basu (Project Syndicate) Jan 31, 2020
The World Bank has warned that a massive debt wave is building worldwide. There is no telling who will be hit the hardest, but if vulnerable countries, from the United Kingdom to India, do not act soon, they may face severe economic damage.

The United Kingdom's Paradise Lost
Harold James (Project Syndicate) Jan 31, 2020
In imagining a post-Brexit future, UK Prime Minister Boris Johnson's government is acting as if it is entering a world of new, attractive alternatives from which to choose. But today's Conservatives seem to have forgotten what their forebear, Margaret Thatcher, always understood: there will be tradeoffs.

What the ECB's Strategy Review Must Do
Lucrezia Reichlin (Project Syndicate) Jan 31, 2020
The European Central Bank's new strategy review must recognize that economists are still a long way from understanding the dynamics of low inflation. Given this uncertainty, the ECB should aim to adopt robust policies that cause the least damage under a broad range of scenarios.

The EU's Risky Green Taxonomy
Stan Dupré (Project Syndicate) Jan 31, 2020
The European Commission's so-called "taxonomy" for classifying green investments should address three important questions. Unfortunately, the Commission's one-dimensional approach disregards two of the three, with potentially damaging consequences.

Do taxes affect firm-to-firm trade? Evidence from India
Lucie Gadenne and Roland Rathelot (VoxDev) Jan 31, 2020
Taxes affect which domestic suppliers firms choose to trade with in India, leading to less within-country trade and firm growth.

EU official export credit support
Kamala Dawar (VoxEU) Jan 31, 2020
There are now over 100 national export credit agencies, delivering approximately $215 billion in official export support to domestic firms' exports of goods, services, and investments. This column argues that governments have a collective interest in revamping the rules to prevent an export credit subsidy war and a race to the bottom in terms and conditions. This could be done through the International Working Group on Export Credits and also by the European Commission setting a gold standard by more rigorously evaluating longer-term export credit activity.

Innovation spillovers and market structure
Walker Hanlon and Taylor Jaworski (VoxEU) Jan 31, 2020
The slowing pace of economic growth in the US and Europe have rekindled fears of reduced innovation and prompted calls for institutional changes meant to increase returns on spending for research and development. This column uses the case of the US interwar aircraft industry to suggest some unforeseen hazards of such change. It recommends considering the design of innovation and antitrust policy in tandem, especially where attempts to incentivise innovation may alter the extent of competition and endogenously reconfigure market structure.

Exchange of information and bank deposits in international financial centres
Pierce O'Reilly, Kevin Parra Ramirez, and Michael A. Stemmer (VoxEU) Jan 31, 2020
Since the G20 declared in 2009 that "the era of bank secrecy is over", jurisdictions have implemented an unprecedented range of measures designed to increase tax transparency by ensuring that information on foreign financial assets would be disclosed to tax authorities. This column presents the main results from a recent study on the impact of exchange of information on foreign-owned bank deposits in international financial centres. The findings highlight the effectiveness of the expansion of automatic exchange of information and provide evidence of the success of a comprehensive multilateral approach towards tax transparency.

What Will Brexit Britain Be Like?
Sam Knight (New Yorker) Jan 31, 2020
The signs point to a kind of hybrid nation: more welcoming to foreign capital but more hostile to foreign people; greener but more conservative; freer on the world stage, but weaker.

New Reports Show That Trump's Economic Promises Were Empty
John Cassidy (New Yorker) Jan 31, 2020
The boost from President Trump's 2017 tax cuts is fading, but the resulting budget deficit will linger for decades.

Get Ready for SOFR: A Primer
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Jan 31, 2020
LIBOR has been a key benchmark borrowing rate for the past few decades, but will be phased out perhaps as early as the beginning of 2022. In the United States, SOFR has been chosen to replace it. In this report, we delve into some of the important similarities and differences between these key interest rates.