News & Commentary:

Articles/Commentary

Zimbabwe’s economy is in slow-motion collapse
FT View Feb 1, 2019
A national unity government is needed that can re-engage with the outside world.

Do not underestimate the risk of an iron curtain in tech
Gillian Tett (FT) Feb 1, 2019
National security concerns threaten to overshadow any breakthrough in US-China trade talks.

Bondholders brace for Venezuelan regime change
Colby Smith (FT) Feb 1, 2019
Creditors would face one of the most complicated sovereign debt restructurings in history.

Dispatch from Davos: Retooling Globalization
Gavin Power (PIMCO) Feb 1, 2019
By better embedding sustainability considerations into markets and business and investing, globalization could become a more stable, sustainable and inclusive process.

Asia’s Big Chance, Courtesy of the Fed
Daniel Moss (Bloomberg View) Feb 1, 2019
The global monetary terrain is shifting quickly. There’s a window for the region, with prospective U.S. hikes off the table.

Why Cutting Interest Rates Won't Help China
Anjani Trivedi (Bloomberg View) Feb 1, 2019
Such an easing measure, while tempting, won’t transmit through the broader economy and financial system.

Italy’s Rulers Have a Serious Problem
Ferdinando Giugliano (Bloomberg View) Feb 1, 2019
As recession arrives, Rome’s growth forecasts look like fantasy. Even if the League managed to ditch Five Star, it wouldn’t fix deep structural issues.

This Brexit Trade Myth Needs Busting Now
Therese Raphael (Bloomberg View) Feb 1, 2019
The latest attempt by hardline Brexiters to dress up a no-deal exit as acceptable should be put out of its misery now.

Feeding the Ten Billion
Line Gordon (Project Syndicate) Feb 1, 2019
Our diets are becoming less healthy, and global food production is increasingly unsustainable. A new report suggests that the planet can sustainably provide a healthy diet for ten billion people in the future, but only if we make big changes in what we eat and how we produce it.

Are Multinationals Eclipsing Nation-States?
Stefano Marcuzzi and Alessio Terzi (Project Syndicate) Feb 1, 2019
In the absence of government action to address today’s most pressing global problems, multinational corporations are stepping up to offer their own solutions. As in the seventeenth century, when European joint-stock companies built private empires, the future of sovereignty is at stake.

The euro: From monetary independence to monetary sovereignty
Lourdes Acedo Montoya and Marco Buti (VoxEU) Feb 1, 2019
Although the euro instantly became the second-most important global currency upon its creation, its internationalisation was not a primary concern for policymakers at the time. This column argues that while the euro area has full ‘monetary independence’, ‘monetary sovereignty’ needs to be built on the basis of a reassessment of the benefits and costs attached to the international role of the euro. It also argues that the former outweigh the latter. There is no silver bullet, however, that would rapidly increase use of the euro abroad. This requires a comprehensive package of measures and time.

Measuring functional specialisation in trade
Marcel Timmer, Sébastien Miroudot and Gaaitzen De Vries (VoxEU) Feb 1, 2019
A country that appears to be a dominant exporter in a particular good may in fact contribute little value when the production process is internationally fragmented. This column argues that countries today specialise in exporting activities, such as R&D, marketing or fabrication, rather than in exporting particular products. It proposes a new measure that tracks functional specialisation in international trade, and show that countries at similar levels of development can vary widely in their specialisation pattern.

The Fed makes a move in the right direction
FT View Feb 2, 2019
Domestic as well as global conditions counsel holding down rates.

No incentive for EU to blink on Irish border
Kevin O’Rourke (FT) Feb 2, 2019
Basic miscalculations over the backstop make a no-deal Brexit frighteningly likely.

The battle for Venezuela’s future
Economist Feb 2, 2019
The world’s democracies are right to seek change in Latin America’s worst-governed country.

Italy’s slump reflects trouble both at home and abroad
Economist Feb 2, 2019
The weak economy complicates a fraught fiscal position.

The Franco-German Pact Is Not the Problem
Zaki Laïdi (Project Syndicate) Feb 2, 2019
Sigmar Gabriel, a former German minister of foreign affairs and leader of the Social Democrats, has responded to the signing of a new Franco-German friendship pact by dredging up threats from the past. By ignoring threats in the present, not least Europe's lack of strategic autonomy, he does a disservice to Europe and Germany alike.

Why is Germany flirting with recession?
Gavyn Davies (FT) Feb 3, 2019
China is an important factor but temporary shocks are another cause.

How to play a winning Brexit game
Wolfgang Münchau (FT) Feb 3, 2019
It is important to remember that many choices appear binary when they are not.

Steel Tariff Profiteers
WSJ Feb 3, 2019
American steelmakers post record earnings—while others pay the bill.

Did the Fed just cave to Trump?
Robert Samuelson (WP) Feb 3, 2019
Powell’s latest moves are bringing the organization more in line with what the president wants.

Time for global leadership, Japan-style
Shiro Armstrong (EAF) Feb 3, 2019
The World Trade Organization (WTO), at the core of the multilateral trading system, is in crisis.

How We All Turned Japanese, a Tale of Global Hubris
Daniel Moss (Bloomberg View) Feb 3, 2019
The BOJ’s radical monetary policy is marking its 20-year anniversary. Raise a glass to the experiment replicated around the world.

The unpredictable rise of China
Dan Blumenthal (Atlantic) Feb 3, 2019
China is making up for the absence of attractive political principles or ideologies by creating a new empire of fear and offering increasingly strident appeals to an imperialist nationalism. That is not to say that China will collapse, but Xi has changed the nation’s internal dynamics. The result is a far less predictable course for the Middle Kingdom than materialist political-science theories might predict.

MPs must compromise before Brexit breaks our country
Lisa Nandy (FT) Feb 4, 2019
We hide behind delaying tactics but Labour must pursue conditions for an agreement.

Confusion is now the watchword for markets
Robin Wigglesworth (FT) Feb 4, 2019
Despite January’s bounce in stocks, there are plenty of signs that conviction is lacking.

Key ingredient for equities rally remains elusive
Mohamed El-Erian (FT) Feb 4, 2019
Stronger global economic growth is required if stocks are going to really regain momentum.

To Avoid a Recession, Start Spending Now
Diane Swonk (NYT) Feb 4, 2019
Congress should give the economy a bump. Once a slowdown begins, it will be too late.

China’s Online Censorship Stifles Trade, Too
Tim Wu (NYT) Feb 4, 2019
When the Chinese government blocks foreign internet companies for political reasons, the United States should treat the tactic as the anticompetitive economic strategy that it is.

Maduro Wrecked Venezuela’s Oil Industry
Daniel Yergin (WSJ) Feb 4, 2019
The dictator destroyed a world energy powerhouse. U.S. sanctions will squeeze production even further.

Tax Reform Is Covering Its Costs
Edward Conard (WSJ) Feb 4, 2019
Faster growth is on track to outpace debt in the next decade.

Trump is straining democracy at home and around the world
Michael Abramowitz (WP) Feb 4, 2019
We must stem the decline of checks and balances.

No trade deal can dictate our relationship with China
Lawrence Summers (WP) Feb 4, 2019
The economy and technology will likely overtake the terms of any agreement.

May the Best Woman Win at the World Bank
Nancy Birdsall (CGD) Feb 4, 2019
I’ve borrowed my title from this opinion piece in the New York Times about how the United States needs a woman as the next president. Like the US, the World Bank needs its next president to save it—in this case from a slide into irrelevance and obscurity if this century’s new global challenges are not addressed head on. A woman would bring fresh air and a new perspective to an institution that is still stuck in a rut. A woman would bring a new kind of leadership. She would care about the institution (as women seem to do) more than her own ambitions, and give it a new birth in this century, in a way another man might not.

A Copernican Revolution in Europe?
Martin Hüfner (Globalist) Feb 4, 2019
How European integration is regressing – and yet stabilizing.

As USMCA Moves Toward Ratification, Uncertainty Looms
Antonio Garza (Brink) Feb 4, 2019
The trilateral signing of the U.S.-Mexico-Canada Agreement on trade officially ended the negotiating phase—but it ushered in the more challenging stage of passing the agreement through each country’s legislature. Antonio Garza, a former U.S. Ambassador to Mexico, explains what risks come next.

Politics as Usual in India Again
Mihir Sharma (Bloomberg View) Feb 4, 2019
In returning to populist economics, Prime Minister Narendra Modi seems to have given up on hopes of transforming the country.

The Fed Won’t Tap the Brakes Until It’s Ready to Cause a Recession
Conor Sen (Bloomberg View) Feb 4, 2019
Congress and the White House would not thank the central bank for that.

Is the “Populist” Tide Retreating?
Joseph S. Nye (Project Syndicate) Feb 4, 2019
Strong support for immigration and globalization in the US sits uneasily with the view that “populism” is a problem. In fact, the term remains vague and explains too little – particularly now, when support for the political forces it attempts to describe seems to be on the wane.

Venezuela Shatters the Myth of Non-Intervention
Andrés Velasco (Project Syndicate) Feb 4, 2019
Mexico and Uruguay have adopted the two arguments most often repeated by backers of the Venezuelan dictatorship. They sound reasonable at first, yet, after a moment’s reflection, both arguments turn out to be cynical, nonsensical, or both.

A Second Chance to Fix Finance
Bertrand Badré and Laurence Daziano (Project Syndicate) Feb 4, 2019
Despite progress since the 2008 financial crisis, reforms of the financial sector have been fragmented rather than fundamental. In particular, the system still lacks the effective holistic regulations needed to encourage the optimal global allocation of capital.

The European Commission’s Taxing New Idea
Otmar Issing (Project Syndicate) Feb 4, 2019
The European Commission is proposing that EU tax policies be subjected to qualified-majority voting just when the balance of power in the bloc is about to shift decidedly to the southern member states. That would set the stage for a rebellion among northern members, which will have effectively lost fiscal sovereignty.

The economic geography of transition countries
Klaus Desmet, Dávid Krisztián Nagy, Dzhamilya Nigmatulina and Nathaniel Young (VoxEU) Feb 4, 2019
The economic geography of transition economies has changed dramatically over the last quarter century, with large urban areas growing fast and many smaller places facing declining populations. Using a high-resolution spatial growth model, this column projects the transition economies as a whole to perform economically well over the next decades, especially the region’s densest places. Large-scale infrastructure projects such as the Belt and Road Initiative will have a positive impact, but not more so than modest reductions of general trade frictions.

Export booms in sluggish economies
Miguel Almunia, Pol Antràs, David Lopez Rodriguez and Eduardo Morales (VoxEU) Feb 4, 2019
The recommendation that firms reduce unit and labour costs to gain international competitiveness in response to domestic economic crises is based on the assumption that domestic and foreign supply decisions are not linked at the firm level. This column shows that in a monetary union, exports can have a significant impact in mitigating domestic slumps through the ‘venting-out’ mechanism. By reducing their use of flexible inputs relative to fixed, firms can achieve a short-term decrease in marginal costs to gain competitiveness abroad. This explains how an economic crisis and an export boom can take place at the same time.

Strategic default in the international coffee market
Arthur Blouin and Rocco Macchiavello (VoxDev) Feb 4, 2019
Linking farmers to global markets could spur growth and reduce poverty, but if markets do not work well these gains cannot be realised.

The False Choice Between Economic Growth and Combatting Climate Change
Carolyn Kormann (New Yorker) Feb 4, 2019
A low tax on carbon, set to rise slowly over time, could be enough to keep emissions at reasonable levels, saving us from climate change at little, if any, cost.

How Much Could Negative Rates Have Helped the Recovery?
Vasco Cúrdia (FRBSF Econ Letter) Feb 4, 2019
The Federal Reserve dropped the federal funds rate to near zero during the Great Recession to bolster the U.S. economy. Allowing the federal funds rate to drop below zero may have reduced the depth of the recession and enabled the economy to return more quickly to its full potential. It also may have allowed inflation to rise faster toward the Fed’s 2% target. In other words, negative interest rates may be a useful tool to promote the Fed’s dual mandate.

The dollar can only escape bad US policy for so long
Jan Dehn (FT) Feb 5, 2019
Having the world’s reserve currency has allowed the US to make policy mistakes with near impunity.

Whoever runs the World Bank needs an emerging markets plan
Robert Zoellick (FT) Feb 5, 2019
Developing nations are an important source of strength in the global economy.

Europe’s Iran Trade Flop
WSJ Feb 5, 2019
An end-run around U.S. sanctions undermines Brussels’s credibility.

Mission Impossible: World Bank
WSJ Feb 5, 2019
David Malpass is an excellent choice for a miserable job.

Politicians don’t fear debt. They fear unpopularity.
Robert Samuelson (WP) Feb 5, 2019
Neuman’s Law, named for Alfred E. Neuman of Mad magazine fame, postulates that there is never a good time to raise taxes or cut federal spending.

President Xi is left over an economic barrel
Grant Newsham (AT) Feb 5, 2019
If the United States plays the right cards, Xi and China’s Communist Party will face some tough choices

China’s manufacturing becomes a casualty of US trade war
Gordon Watts (AT) Feb 5, 2019
Official PMI data in negative territory for the second straight month as Washington and Beijing try to hammer out a deal.

Donald Trump picks David Malpass to run the World Bank
Economist Feb 5, 2019
If the nomination passes, the bank will be led by one of its fiercest critics.

The President Has Mostly Wiped out US Refugee Resettlement. Other Countries Aren’t Picking up the Slack.
Michael Clemens (CGD) Feb 5, 2019
The lead White House official for immigration policy, Stephen Miller, is quoted as seeking to end all refugee resettlement in the United States. This has caused an uproar. But few appear to realize that the U.S. President, at Miller’s direction, is already most of the way there—and that this policy in the US has big implications for the rest of the world, especially if other countries fail to step up and fill the growing gap.

Why US Oil Sanctions on Venezuela Could Be Too Little, Too Late
Kimberly Ann Elliott (CGD) Feb 5, 2019
The scale of the humanitarian disaster in Venezuela is almost inconceivable. Despite the world’s largest proven oil reserves, the economy barely functions. People struggle just to survive. Store shelves are nearly empty of food, medicine and other necessities. The few goods available are out of reach for most people because of hyperinflation that the International Monetary Fund estimates reached a shocking 1 million percent in 2018. An estimated 3 million Venezuelans have already fled to neighboring countries, and more will likely join them.

The higher yield on Italian government securities is becoming a burden for the real economy
Francesco Papadia and Inês Goncalves Raposo (Bruegel) Feb 5, 2019
Francesco Papadia and Inês Gonçalves Raposo have recently written on Italian fiscal policy and the increase in the spread between Italian (BTP) and German (Bund) government. Since then, two developments have taken place: one good, and one bad.

How Will Donors Spend $170 Billion This Year and Next?
Owen Barder and Andrew Rogerson (CGD) Feb 5, 2019
In 2019–20, donors will commit roughly $170 billion of public funding to an alphabet soup of international aid organisations, many of which their citizens may never have heard of.

Worry when bank returns rise
Brian Caplen (Banker) Feb 5, 2019
Are concerns about low return on equity based on a false assumption about the cost of capital? Adjust that and the picture improves dramatically, writes Brian Caplen.

China’s “Interesting Times”
Tom Clifford (Globalist) Feb 5, 2019
As China rings in the New Year, a brief look at some of the problems the country is facing.

Is Authoritarianism Bad for the Economy? Ask Venezuela, or Hungary or Turkey.
Nisha Bellinger and Byunghwan Son (Brink) Feb 5, 2019
Seventy-one out of the world’s 195 countries saw their democratic institutions erode in recent years. When government institutions erode like this, it isn’t just bad for democracy—it also hurts countries economically. Two researchers explain why.

Pemex Suffers an Old Problem in a New Oil Market
Liam Denning (Bloomberg View) Feb 5, 2019
There’s always been a conflict between its commercial needs and the state’s, but now there’s the prospect of falling demand to consider.

Macri Floats Above Argentina’s Economic Mess
Shannon K O'Neil (Bloomberg View) Feb 5, 2019
A hapless political opposition fails to capitalize on the president’s mistakes and adapt to the future.

Russia’s Economic Growth Looks Too Good to Be True
Leonid Bershidsky (Bloomberg View) Feb 5, 2019
Under a new top statistician, recent data have been much more optimistic. That doesn’t make them correct.

Stop Worrying About the Fed’s Balance Sheet
William C Dudley (Bloomberg View) Feb 5, 2019
It’s not the threat that people seem to think it is.

The U.S. Shouldn’t Get Too Creative With Debt Sales
David A Ader (Bloomberg View) Feb 5, 2019
Demand for regular Treasuries will be ample in coming years, despite the pending surge in government borrowing.

Germany Enters the Global Economic Wars
Leonid Bershidsky (Bloomberg View) Feb 5, 2019
Economics Minister Peter Altmaier is shifting policy decisively in favor of economic sovereignty.

How EU Leaders Can Prevent a No-Deal Brexit
Anatole Kaletsky (Project Syndicate) Feb 5, 2019
British Prime Minister Theresa May’s strategy of threatening a no-deal Brexit requires a hard deadline that forces her opponents to capitulate. Without that, “running down the clock” becomes “kicking the can down the road,” which more accurately reflects May’s paradoxical combination of robotic inflexibility and exasperating indecisiveness.

What Is Xi Jinping Thought?
Steve Tsang (Project Syndicate) Feb 5, 2019
The goal of the Chinese president's guiding doctrine is not to launch a new cold war with the West, or to export China’s political model. Rather, Xi wants to shore up the authority of the party-state within his country, including by ensuring that Chinese are not exposed to liberal-democratic ideas.

Financial Stability in Abnormal Times
Kenneth Rogoff (Project Syndicate) Feb 5, 2019
Despite improvements in the financial system since the 2008 crisis, the piecemeal reforms that have been enacted fall far short of what is needed. And an inexorably growing financial system, combined with an increasingly toxic political environment, means that the next major financial crisis may come sooner than you think.

The Coming China Shock
Arvind Subramanian and Josh Felman (Project Syndicate) Feb 5, 2019
For years, China has defied the widely held view that political openness is necessary for long-term economic development. But recent macroeconomic developments now suggest that the country's exceptionalism is nearing its expiry date, with potentially devastating effects for the global economy.

Firm boundaries in global production networks
Giuseppe Berlingieri, Frank Pisch and Claudia Steinwender (VoxEU) Feb 5, 2019
Multinationals with large and complex production networks have become a dominant feature of today’s economies. But while their supply networks are large, this does not mean that they own every step of the global production chain. This column examines French firms’ decision whether to source imported inputs from independent suppliers or from affiliates. The results show that multinationals typically own and source from international suppliers that provide technologically important inputs – that is, those that account for a high share of costs.

After the storm
Saptarishi Bandopadhyay (Aeon) Feb 5, 2019
Few things tell us more about the nature of state sovereignty, and the threats to it, than the politics of disaster relief

Stop Looking for Meaning in Brexit
Alexis Papazoglou (TNR) Feb 5, 2019
This wasn't some great multi-decade reckoning. It wasn't foreordained. It was a series of accidents.

Australia: Nothing Happening Down Under
Brendan McKenna (WF) Feb 5, 2019
With Australia's economic indicators slowly deteriorating, the Reserve Bank of Australia appears unlikely to follow other central banks higher.

All eyes on Germany as Europe looks to a year of change
John Redwood (FT) Feb 6, 2019
Chinese authorities move to boost the country’s flagging economy.

Fed U-turn should put liquidity back in the spotlight
Laurence Fletcher (FT) Feb 6, 2019
Investors should remember that return of capital is as important as return on capital.

The euro in 2019: stable but very hard to love
Katie Martin (FT) Feb 6, 2019
Europe’s single currency has been immune to weakness in the eurozone.

India will rise, regardless of its politics
Martin Wolf (FT) Feb 6, 2019
There is a relatively stable consensus over the value of market-oriented reforms.

Beijing wary of history warnings from past US rivals
Lucy Hornby (FT) Feb 6, 2019
World’s second-largest economy shows similar signs of overreach as Japan and the USSR.

Interserve needs to avoid government’s ‘no-deal’ Brexit mindset
Matthew Vincent (FT) Feb 6, 2019
Time is running out but signs are emerging that deadlock for outsourcer may be broken.

What the next president of the World Bank should do
Paul Romer (FT) Feb 6, 2019
Outsourcing research would allow the institution to give help to those who need it most.

Washington’s consensus is dangerously interventionist
Janan Ganesh (FT) Feb 6, 2019
The US does not have the resources to direct the destinies of faraway nations.

China’s newly global companies falter under local debt load
Don Weinland (FT) Feb 6, 2019
Fate of foreign holdings in question as onshore credit tightens.

Trump Loves the New Nafta. Congress Doesn’t.
Jim Tankersley (NYT) Feb 6, 2019
The president’s most significant achievement on trade — a revised deal with Canada and Mexico — is imperiled amid Democratic and Republican concerns.

The Global Con Hidden in Trump’s Tax Reform Law, Revealed
Brad Setser (NYT) Feb 6, 2019
Why would any multinational corporation pay the new 21 percent rate when it could use the new “global minimum” loophole to pay half of that?

To Beat Trump, Embrace Free Trade
Fred P. Hochberg (WSJ) Feb 6, 2019
Democrats, it’s time to recognize and embrace America’s economic dominance.

Italy: Toward Growth, Social Inclusion, and Sustainability
IMF Feb 6, 2019
A new government took office in Italy in June 2018 with the goals of jumpstarting growth, fostering social inclusion, and securing financial stability. To achieve these goals, the country needs a comprehensive reform package, alongside modest and balanced fiscal consolidation, the IMF advised in its annual review of the economy.

Asset Allocation Views: Late Cycle vs. End Cycle Investing
Erin Browne, Geraldine Sundstrom and Mihir P. Worah (PIMCO) Feb 6, 2019
Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.

Time, Gentlemen, Please
Owen Barder (CGD) Feb 6, 2019
It is time for an open, fair, merit-based process to appoint the next President of the World Bank. And I’ll explain below why I think the Europeans may, at last, break the cartel that has prevented this.

Whose (fiscal) debt is it anyway?
Maria Demertzis and David Pichler (Bruegel) Feb 6, 2019
The authors map how much fiscal debt is in the hands of domestic and foreign holders in the euro area. While the market for debt was much more international prior to the crisis, this trend has since been reversed. At the same time, central banks have become important holders of fiscal debt.

The Next Shadow-Banking Crisis in India
Andy Mukherjee (Bloomberg View) Feb 6, 2019
Lenders suddenly find themselves uncomfortably exposed to India’s struggling property developers.

Brexit Delivers a $400 Trillion Truce
Lionel Laurent (Bloomberg View) Feb 6, 2019
The EU will cooperate with the City of London on derivatives clearing in the event of a no-deal departure. Don’t mistake this for a lasting global peace.

Italy Is Playing With Fire in the Bond Markets
Marcus Ashworth (Bloomberg View) Feb 6, 2019
You can see why Rome might want to seize the moment with its 30-year issue. But if things go wrong, investors won’t find it easy to forgive and forget.

Equities get a tailwind from Asia
David P. Goldman (AT) Feb 6, 2019
Emerging markets, especially China, outperform developed markets amid trade optimism

Get over it: Asia rules
Pepe Escobar (AT) Feb 6, 2019
New book helps explain why the 21st Century will be the Asian Century.

Even the Right American Is Wrong for the World Bank
Mihir Sharma (Bloomberg View) Feb 6, 2019
Nominee David Malpass understands what the institution needs but he can’t deliver it.

The UK’s Suicidal Tendencies
Ian Buruma (Project Syndicate) Feb 6, 2019
Most politicians on the left and the right – including Prime Minister Theresa May, who before the Brexit referendum was in favor of Britain remaining in the EU – know that leaving the European Union without an exit agreement would be a national calamity. So why have almost all refused to do anything to halt the slide toward a catastrophic no-deal Brexit?

The Costs of a Brexit Brain Drain
Edoardo Campanella (Project Syndicate) Feb 6, 2019
Mass emigrations of skilled workers have always been a byproduct of broader ideological and political struggles, and the looming departure of talent from the United Kingdom is no different. But never before has an established democracy experienced a catastrophic loss of human capital during a period of peace and prosperity.

The Mirage of a Global Euro
Daniel Gros (Project Syndicate) Feb 6, 2019
When the euro was introduced a generation ago, European leaders envisaged a common currency that would come to rival the US dollar as a second global reserve currency. That hope has failed to materialize – an outcome that European leaders would be wise to welcome.

Is Japan’s Sun Rising?
Jim O'Neill (Project Syndicate) Feb 6, 2019
At a time of rising populism and authoritarianism around the world, Japan stands out as a relative island of social and economic stability. And though it owes its current situation to unique economic and geopolitical circumstances, it might still have something to teach other developed countries.

When the dollar appreciates, US corporate credit tightens
Friederike Niepmann and Tim Schmidt-Eisenlohr (VoxEU) Feb 6, 2019
The issuance of syndicated loans, including leveraged loans, has grown substantially in the US. Institutional investors increasingly hold these loans. This column discusses how this has created a strong link between the dollar and US corporate credit conditions. When the dollar appreciates, institutional investors demand fewer loans on the secondary market, causing US banks to reduce lending and tighten credit standards. Risk appetite in global capital markets has become a key driver of credit supply to US firms.

The role of trade in adaptation to climate change
Christophe Gouel and David Laborde (VoxEU) Feb 6, 2019
Given our collective failure to mitigate greenhouse gas emissions, the world will have to adapt to a certain level of climate change. This may mean that as climate change impacts crops’ yield potential, new patterns of comparative advantage, and new hence trade flows, will emerge. This column examines the importance of the market adaptations in mediating welfare losses in the agricultural sector. The findings suggest a large role forinternational trade: when adjustments in trade flows are constrained, global welfare losses from climate change increase by 76%.

Credit: Lifeblood of Economy Continues to Flow
Jay H. Bryson (WF) Feb 6, 2019
Corporate bond issuance has picked up, and growth in bank credit remains solid. As long as credit continues to flow, U.S. economic growth likely will remain resilient.

US makes a poor choice for World Bank chief
FT View Feb 7, 2019
David Malpass lacks qualities of previous heads of multilateral lender.

Hello Brexiters, and welcome to your special place in hell
Robert Shrimsley (FT) Feb 7, 2019
I’m afraid there is a hard border with paradise — and you’ll need euros of course.

Universal basic income in India is a tantalisingly close prospect
Arvind Subramanian (FT) Feb 7, 2019
Biometric ID cards and the squeeze on the rural poor are propelling the idea forward.

The Financial Crisis Put a Chill on Big Bank Deals. That Ended Thursday.
Michael J. de la Merced and Emily Flitter (NYT) Feb 7, 2019
If approved, the merger of BB&T and SunTrust would create the sixth-biggest bank in the U.S., large enough to compete against the country’s largest lenders.

American manufacturing companies have a spring in their step
Economist Feb 7, 2019
The scaling back of Foxconn’s plans to make televisions in Wisconsin is offset by other good news.

How Do We Think About the Winners and Losers from Globalization?
Nicolas Lamp (Brink) Feb 7, 2019
In the past half-decade, the term “globalization” has gained an unforeseen political valence, and the ways in which people synthesize and talk about these issues has evolved. How should we think about globalization and the future of trade?

EU Leaders Are Ready for Hard Brexit. EU Firms Aren’t.
Leonid Bershidsky (Bloomberg View) Feb 7, 2019
The EU's political leaders might be well-prepared for a no-deal Brexit, but the bloc's business leaders aren't. That might help the U.K. prime minister.

Why Can’t Australia Just Be Normal?
Daniel Moss (Bloomberg View) Feb 7, 2019
There have been ups and downs in this long run without recession, and they are starting to accumulate.

India’s Central Bank Caught a Lucky Break
Daniel Moss (Bloomberg View) Feb 7, 2019
Low inflation and slower global growth warrant lower borrowing costs. Questions about independence can wait for another day.

End the US Stranglehold on the World Bank
Jesse Griffiths (Project Syndicate) Feb 7, 2019
Since the World Bank was created after World War II, its president has always been selected by the United States and backed by European powers, which enjoy a similar monopoly over the directorship of the International Monetary Fund. But with US President Donald Trump having nominated an unsuitable candidate, that may be about to change.

Debt Derangement Syndrome
J. Bradford DeLong (Project Syndicate) Feb 7, 2019
Standard policy economics dictates that the public sector needs to fill the gap in aggregate demand when the private sector is not spending enough. After a decade of denial, the Global North may finally be returning to economic basics.

China’s Difficult Balancing Act
Gene Frieda (Project Syndicate) Feb 7, 2019
China needs to keep growth high enough to maintain social stability, but also must preserve external stability via the renminbi’s exchange rate. How China manages its currency during its economic policy shift could have important global consequences.

The Good Jobs Challenge
Dani Rodrik (Project Syndicate) Feb 7, 2019
Every economy in the world today is divided between an advanced segment, typically globally integrated, employing a minority of the labor force, and a low-productivity segment that absorbs the bulk of the workforce, often at low wages and under poor conditions. How should policymakers address this dualism?

Voting patterns and the distributional consequences of trade
Raphael Auer, Barthélémy Bonadio and Andrei Levchenko (VoxEU) Feb 7, 2019
The tide has turned in international trade, with watershed political moments across the world showing the growing popularity of protectionist measures. This column analyses the relationship between the distributional effects of trade and voting patterns by modelling a scenario in which NAFTA is dismantled. It finds that the areas that voted most overwhelmingly for the Trump administration are the same as those that would experience the greatest wage decreases if NAFTA were to be revoked, due to the strong correlation in areas that face import competition from and export exposure to NAFTA partners.

Why U.S. Debt Must Continue to Rise
Michael Pettis (CEIP) Feb 7, 2019
Income inequality and trade deficits are the real drivers of U.S. debt. Unless the United States limits foreign capital inflows and addresses spiraling income inequality, growing the debt is the only way to prevent rising unemployment and a slowing economy.

Low-level inflation will prevent an economic heart attack
Tim Harford (FT) Feb 8, 2019
It goes without saying that hyperinflation is a catastrophe but it is now uncommon.

Why regulators need to worry about non-bank runs
Ben McLannahan (FT) Feb 8, 2019
Transformation of the lending landscape since the crisis brings a new set of risks.

The Brexit delusion of creating ‘Singapore upon Thames’
Martin Wolf (FT) Feb 8, 2019
Promoting a small Asian city-state as a model for Britain is magical thinking.

What I would do as the next World Bank president
David Malpass (FT) Feb 8, 2019
We must do everything possible to ensure a stronger and more stable global economy.

Emerging market currencies now far less risky
Steve Johnson (FT) Feb 8, 2019
Improvement reflects quiet revolution in governance and credibility.

Whisper it, but there’s good news on Brazilian pension reform
Jonathan Wheatley (FT) Feb 8, 2019
Investors see overhaul of bloated pension plan as crucial for country’s economic fortunes.

Two Bills to Defend Free Trade
WSJ Feb 8, 2019
Congressional action to rein in presidential tariff power is overdue.

All roads from Washington will lead to Beijing
Gordon Watts (AT) Feb 8, 2019
Next week’s trade talks will set the tone for planned Trump-Xi meeting later this month.

Gold fever is an opportunity for China
William Pesek (AT) Feb 8, 2019
This should be Beijing’s moment – if President Xi Jinping can rise to the challenge

Trump whiffs on World Bank president selection
Desmond Lachman (The Hill) Feb 8, 2019
If ever an international organization has outlived its original mandate and is in need of serious reform, it has to be the World Bank. However, it is highly questionable whether David Malpass, President Trump’s nominee to head that organization, has the experience, vision or inclination to successfully do the job.

How Can Countries Escape the Natural Resource Curse? Answer: Democracy
Thiemo Fetzer and Stephan Kyburz (CGD) Feb 7, 2019
Being more like Norway—that’s the aspiration of many resource-rich countries. But rather than raising standards of living broadly within a society, resource wealth is often associated with instability, civil conflict, repression, and political violence. This translates into poor development outcomes, feeding the notion that natural resources can be a curse.

Why Marx Loved Central Banks
Thorsten Polleit (Mises Wire) Feb 8, 2019
One of the easiest ways of asserting control over the private sector is to manage the money supply with a central bank. Naturally, Marx was rather fond of the idea.

What USTR Just Told Congress about the USMCA
Jeffrey J. Schott (PIIE) Feb 8, 2019
Two months after signing the United States–Mexico–Canada Trade Agreement (USMCA) to replace the 1994 North American Free Trade Agreement (NAFTA), the Trump administration has submitted to Congress a list of the changes in US law that are needed to comply with its terms.

A U.S.-China Trade Deal May Disappoint Investors
Komal S Sri-Kumar (Bloomberg View) Feb 8, 2019
America’s share of the global economic pie is shrinking, and its financial markets are increasingly dependent on developments elsewhere.

The Hedge-Fund Bond Trade That Keeps on Giving
Mark Gilbert (Bloomberg View) Feb 8, 2019
The “gentlemen of the spread” are about to smell blood in Italy’s bond markets again.

Can Pakistan Ride the New Tech Wave?
Asad Jamal (Project Syndicate) Feb 8, 2019
Technology, innovation, and entrepreneurship are the key ingredients for economic success in the twenty-first century, as the US and China are demonstrating. If Pakistan can also realize its huge untapped potential in these fields, the result could be a more dynamic country that is better placed to solve many of its other problems.

A Mixed Economic Bag in 2019
Nouriel Roubini (Project Syndicate) Feb 8, 2019
Since the global synchronized growth of 2017, economic conditions have been gradually weakening and will produce an across-the-board deceleration in the months ahead. Beyond that, the prospect for markets and national economies will depend on a broad range of factors, some of which do not bode well.

Resilience and Rebellion in Contemporary China
Minxin Pei (Project Syndicate) Feb 8, 2019
Two new memoirs about life in China shed valuable light on the country’s growth from an economic backwater to a modern superpower. While the Communist Party of China remains fixated on hiding and rewriting the past, ordinary Chinese are determined to write the country’s future.

The macroeconomic implications of a global trade war
Antoine Berthou, Caroline Jardet, Daniele Siena and Urszula Szczerbowicz (VoxEU) Feb 8, 2019
Escalating tensions between the US and its trading partners have made a global trade war more likely. In addition to the direct effect due to the increase in tariffs, a trade war may also affect GDP via indirect channels, such as a drop in productivity due to uncertainty and changes in the production environment. Using a multi-country model, this column shows that a global and generalised 10 percentage point increase in tariffs could reduce the level of global GDP by almost 2.0% on impact and up to 3.0% after two years, when all the additional indirect channels materialise.

Reining in shadow banking
Dirk Schoenmaker (VoxEU) Feb 8, 2019
Leveraged finance is booming, just as it was in the run-up to the Global Crisis. As before, central banks are bystanders, with only banking instruments for macroprudential policy. this column argues there are unused regulatory powers that can reign in investment funds. A cross-sectoral approach would help to rein in the current unsustainable levels of leveraged finance.

A Closer Look at China’s Supposed Misappropriation of U.S. Intellectual Property
Ana Maria Santacreu and Makenzie Peake (FRBSL Econ Synopses) Feb 8, 2019
We look at China’s record on intellectual property, which seems to have improved. Also impressive is China’s large number of patents, although the quality of those patents deserves a closer look.

The truth about big oil and climate change
Economist Feb 9, 2019
Even as concerns about global warming grow, energy firms are planning to increase fossil-fuel production. None more than ExxonMobil.

The UK must learn from its interventionist failures
Nicholas Macpherson (FT) Feb 9, 2019
Industrial policy relies on sectoral strategies and subsidies, but that is a huge mistake.

Laying the Foundations of Good Fiscal Management in the Arab World
Christine Lagarde (IMF) Feb 9, 2019
I will address two key pillars of good fiscal management: (i) strong fiscal frameworks; and (ii) good governance and transparency.

Brexit goes to the brink
Wolfgang Münchau (FT) Feb 10, 2019
History tells us we should not draw conclusions from the lack of agreement at this moment.

An A- for the U.S. Economy, but Failing Grades for Trump’s Policies
Justin Wolfers (NYT) Feb 10, 2019
The economy has been fairly strong, but economists are nearly unanimous in concluding that President Trump’s economic policies are destructive.

Flip-Flop by Fed Scrambles Outlook for World Markets
Matt Phillips (NYT) Feb 10, 2019
The central bank’s new friendly tone cascaded through the financial world in ways large and small. A look at the consequences.

China’s Looming Labor Shortage
WSJ Feb 10, 2019
Experts now say its population will start to decline in 2030.

US policy in Asia heads from bad to worse
Sheila A Smith (EAF) Feb 10, 2019
US policy in Asia will be erratic and self-serving in the coming year as the Trump administration continues to work out its issues with countries in the region bilaterally and sporadically. The more openly pugilistic US relationship with China unsettles nerves across the region.

UK: Saving the Nation from Itself by Royal Veto Power
Rachel Carnell (Globalist) Feb 10, 2019
A monarch with the temperament and selflessness of Queen Anne could save Britain from its own insanity.

Two Competing Forces Are Setting the Price of Oil
Julian Lee (Bloomberg View) Feb 10, 2019
Crude’s rally has been stalled for a month. Lower output in Venezuela and elsewhere should be a godsend for bulls, but demand worries are growing.

China’s Hunger for Capital Is Behind Market Opening
Christopher Balding (Bloomberg View) Feb 10, 2019
Authorities must improve the quality of financial statements and legal protections to revive confidence among foreign investors.

The China shock and its impact on income inequality in Vietnam
Matthias Helble, Trang Thu Le and Trinh Q. Long (VoxEU) Feb 10, 2019
The sudden rise in trade between China and the US – known as the ‘China shock’ – has been the subject of numerous studies, but the even more dramatic increase in trade between China and developing countries in Asia has been somewhat overlooked. This column studies the impact of the China shock on income inequality in Vietnam. It suggests that increased trade with China reduced income inequality. It resulted in income growth for the lowest income quantiles while higher income groups saw their income decline.

Fed appears cornered after averting market meltdown
Seemah Shah (FT) Feb 11, 2019
Short-term support for an economy in good health opens door to a surge in volatility.

How American women can help the Fed
Gavyn Davies (FT) Feb 11, 2019
Female labour participation is rising again, relaxing supply constraints on the economy.

Global economy: Why central bankers blinked
Sam Fleming and Jamie Smyth (FT) Feb 9, 2019
Amid slower growth in China, Brexit and trade disputes, banks are putting the brakes on rate rises.

Asean governments out of step on free trade
FTCR Feb 11, 2019
South-east Asians overwhelmingly support open markets. Their leaders do not.

The Maldives counts the cost of its debts to China
Simon Mundy and Kathrin Hille (FT) Feb 11, 2019
The government joins a backlash against Beijing-financed infrastructure projects.

Democrats, Debt and Double Standards
Paul Krugman (NYT) Feb 11, 2019
Don’t let the deficit scolds scare you into thinking small.

Incredible Shrinking Europe
Walter Russell Mead (WSJ) Feb 11, 2019
The Continent’s grand unity project is failing, and its global influence is fading.

Background music could drown out China-US talks
Gordon Watts (AT) Feb 11, 2019
Discussions in Beijing this week between the world’s two largest economies face added distractions.

No-deal Brexit could sink much of Asia
David Hutt (AT) Feb 11, 2019
New research shows trade-reliant poor Asian nations will be especially hard hit if the UK and EU can't come to terms on their separation.

Fed makes world safe for emerging markets
William Pesek (AT) Feb 11, 2019
The outlook is bright for Asia's emerging economies, bonds and stocks.

The U.S. Can Take on a Lot More Debt Within Limits
Noah Smith (Bloomberg View)/I> Feb 11, 2019
The austerity argument has lost ground, but that doesn’t mean the U.S. should borrow to the hilt.

On Modern Monetary Theory
Inês Goncalves Raposo (Bruegel) Feb 11, 2019
An old debate is back with a kick. The discussion around modern monetary theory first gained traction in the economic blogosphere around 2012. Recent interventions in the US and UK political arenas rekindled the interest in the heterodox theory that is now seeping into mainstream debates.

Europe Needs Competition More Than Industrial Giants
Bloomberg View Feb 11, 2019
The backlash against the Siemens-Alstom ruling threatens the EU’s biggest strength.

Letting Trump Impose Tit-for-Tat Tariffs Would Be Disastrous
Ramesh Ponnuru (Bloomberg View) Feb 11, 2019
The Reciprocal Trade Act could blow up the free-trade system.

India's Shadow Bank Tumult Casts a Widening Gloom
Andy Mukherjee (Bloomberg View) Feb 11, 2019
A wall of mistrust threatens to feed through to microlenders, hurting the poor and dragging down consumption.

Inflation Expectations Raise the Equities Anchor
John Authers (Bloomberg View) Feb 11, 2019
The diverging outlook for consumer prices could become a flashpoint for anyone allocating assets globally. Also, the debate over buybacks.

The 4 Factors That Determine the Fed’s Next Steps
Mohamed Aly El-Erian (Bloomberg View) Feb 11, 2019
A rate cut in 2020 isn’t in the cards now, but it could be later if Europe and China continue to struggle to find pro-growth policies.

The European Election Won’t Break the EU
Leonid Bershidsky (Bloomberg View) Feb 11, 2019
Even if anti-establishment forces win a third of seats in the European Parliament, they’re unlikely to cooperate enough to cause major disruption.

There’s Nothing Wrong With Stronger Banks
Mark Whitehouse (Bloomberg View) Feb 11, 2019
A decade of data suggest that higher capital doesn’t impair lending.

El Salvador’s New President Is Sitting on a Pot of Gold
Mac Margolis (Bloomberg View) Feb 11, 2019
Getting more migrant remittances into the banking system could fix a host of ills.

France and Germany Must Change the Game
André Loesekrug-Pietri (Project Syndicate) Feb 11, 2019
After years of France and Germany marching to different drummers, the two countries have finally come together to renew their post-war partnership. But now, they must go much further, by developing a new innovation, security, and governance strategy to bring the European economy into the twenty-first century.

Empowering the African Union
Donald P. Kaberuka (Project Syndicate) Feb 11, 2019
By promoting Africa’s economic integration, safeguarding its sovereignty, and projecting its voice on the world stage, the African Union was supposed to bring about the continent’s full liberation and empowerment. To complete this task, however, the AU needs adequate, predictable, and sustainable funding that comes from within.

Europe, Please Wake Up
George Soros (Project Syndicate) Feb 11, 2019
The first step to defending Europe from its enemies, both internal and external, is to recognize the magnitude of the threat they present. The second is to awaken the sleeping pro-European majority and mobilize it to defend the values on which the EU was founded.

Female autonomy generates superstars in long-term development: Evidence from 15th to 19th century Europe
Jörg Baten and Alexandra de Pleijt (VoxEU) Feb 11, 2019
Empirical evidence suggests a positive relationship between gender equality and long-term economic growth, but establishing the direction of causality has been hampered by a lack of consistent data. This column uses historical evidence on dairy farming to examine the growth effects of gender equality. Countries with greater female autonomy allowed women to contribute more to human capital formation and prosperity, leading to greater economic development in the long run.

Inflation: Stress-Testing the Phillips Curve
Òscar Jordà, Chitra Marti, Fernanda Nechio, and Eric Tallman (FRBSF Econ Letter) Feb 11, 2019
The well-known Phillips curve describes inflation as a persistent process that depends on public expectations of future inflation and economic slack, a measure of how stretched the economy’s resources are. The role of each component has changed over time. In particular, maintaining the public’s expectations that the Federal Reserve is committed to an inflation target of 2% has grown in importance over the slack component, in part because realigning expectations is costly to undo. Such considerations are important as the Federal Reserve evaluates its future policy options.

Watch out for China’s trade red lines as anniversaries loom
Tom Mitchell (FT) Feb 12, 2019
US push to ditch support for Chinese state monopolies seen as one step too far.

Spending slowdown highlights China’s dilemma
Gordon Watts (AT) Feb 12, 2019
Caught between an economic downturn and the trade war, consumer confidence takes a hit.

Jobs and Steel Tariffs
WSJ Feb 12, 2019
Border taxes produce small benefits for some, higher costs for many.

Beware the fat tails
David P. Goldman (AT) Feb 12, 2019
Investors are buying insurance in case US-China trade talks go horribly wrong.

China’s slowdown: don’t blame Trump
Brian Caplen (Banker) Feb 12, 2019
A massive contraction in shadow banking is the reason for slower growth in China, not the developing trade war with the US. Regulators everywhere should take note.

Common Values, Common Rules: How Should DAC Countries Engage with China in International Development?
Stephan Kyburz and Yunnan Chen (CGD) Feb 12, 2019
The People’s Republic of China is not a new development actor, but it is now a major one, and it brings distinct historical experiences and approaches to the table. While foreign aid and models of development have traditionally been the domain of Northern (transatlantic) countries, the emergence of new global powers—such as China—cannot be ignored. Some have framed this as a new East-West rivalry, and others even see a new Cold War on the horizon. Neither framing is constructive for those less developed countries struggling to stabilize their societies, their economies, and their security architecture.

Do tax increases always contract economies?
Samara Gunter, Daniel Riera-Crichton, Carlos Vegh and Guillermo Vuletin (Brookings) Feb 12, 2019
Does the finding of large negative tax multipliers hold in a larger sample, which also includes developing countries?

Japan’s Women Need More Than Jobs
Nobuko Kobayashi (Bloomberg View) Feb 12, 2019
If the country wants to slow its population decline, it’s going to have to abolish its two-track labor system.

Investors Have Always Struggled in Iran
Esfandyar Batmanghelidj (Bloomberg View) Feb 12, 2019
Whether the ruler in Tehran has worn a turban or a crown, the business climate has remained awful.

Gold Won’t Solve Your Budget Problems
David Fickling (Bloomberg View) Feb 12, 2019
Tapping out central banks’ coffers may seem like a good idea to cash-strapped governments. It’s only likely to cause a different set of headaches.

Brexit’s ‘Project Fear’ Has Just Become Reality
Ferdinando Giugliano (Bloomberg View) Feb 12, 2019
Britain’s politicians have had the luxury of a relatively benign economy while they dithered and squabbled over the departure. Not any more.

The U.S. Yield Curve Isn’t as Boring as It Seems
Brian Chappatta (Bloomberg View) Feb 12, 2019
A monthlong calm streak suggests a full inversion might not come to pass.

Reflections on Achieving the Global Education Goals
Amina J. Mohammed (Project Syndicate) Feb 12, 2019
In today’s deeply interconnected world, the benefits of strong and inclusive education systems are far-reaching. A quality education gives people the knowledge they need to recognize the importance of safeguarding the planet’s finite resources, appreciate diversity and resist intolerance, and act as informed global citizens.

How Foreign Aid Fuels African Media’s Payola Problem
Prue Clarke (Project Syndicate) Feb 12, 2019
In many African countries, a dirty secret of journalism is that reporters earn most of their income from payments by their sources. And the dirtiest secret of all is that the international aid community is among the most prolific payers.

Interbank contagion during the Depression
Charles Calomiris, Matthew Jaremski and David Wheelock (VoxEU) Feb 12, 2019
Banks have direct contractual exposures to one another through a variety of channels, and regulators are concerned about the systemic risk that may result from this. This column examines the Great Depression in the US and describes how important contractual contagion occurred during the Depression which significantly worsened the failure risk of banks by increasing liquidity risk. The findings call for regulatory policies that take account of potential contractual contagion, and that require minimum prudential capital and liquidity buffers to take liquidity risks into account.

On the built-in instability of cryptocurrencies
Joshua Aizenman (VoxEU) Feb 12, 2019
The fall in valuation of Bitcoin has led to a debate over whether decentralised currencies can be reliably stable. This column argues that in contrast to the success of inflation-targeting regimes, there is no feasible path towards stability of a decentralised currency. The instability of cryptocurrencies is the outcome of a systemic 'tragedy of the commons' coordination failure. This is inherent in their design.

Brexit and outward investment by UK firms
Holger Breinlich, Elsa Leromain, Dennis Novy and Thomas Sampson (VoxEU) Feb 12, 2019
Media reports suggest that some UK firms have started to move production abroad in anticipation of Brexit. Using data on announcements of new foreign investment transactions, this column reports evidence that the Brexit vote has led to a 12% increase in the number of new investments made by UK firms in EU27 countries. At the same time, new investments in the UK from the EU27 have declined by 11%. The results are consistent with the idea that UK firms are offshoring production to the EU27 because they expect Brexit to increase barriers to trade and migration, making the UK a less attractive place to invest and create jobs.

The Dormant Breadbasket of the Asia-Pacific
Maarten Elferink and Florian Schierhorn (Diplomat) Feb 12, 2019
The promise of Siberian agriculture for Asia’s growing demand for food.

The libertarian fantasies of cryptocurrencies
Martin Wolf (FT) Feb 13, 2019
Digital money needs tough regulation rather than bleating in favour of ‘innovation’.

Global refugee finance demands public-private co-ordination
Gary Kleiman (FT) Feb 13, 2019
New sources of funding are needed to fill $10bn UNHCR hole.

Markets should be careful what they wish for
Laurence Fletcher (FT) Feb 13, 2019
Investors and policymakers ought to be concerned about damaging side-effects of QE.

EM’s fate will ultimately be decided in Washington
Steve Johnson (FT) Feb 13, 2019
Federal Reserve or White House actions will determine how long rally will continue.

Brexit: no-deal fears fuel Irish business anxiety
Arthur Beesley (FT) Feb 13, 2019
Ireland stands to lose out from Brexit with some predicting recession if there is no EU-UK agreement.

Brexiteers for Argentina
WSJ Feb 13, 2019
If devalue-and-inflate is Britain’s best post-EU plan, Brexit is doomed.

Why China’s New Year Wasn’t Very Festive
Diana Choyleva (WSJ) Feb 13, 2019
As the country tries to become a consumer economy, Xi robs the biggest spenders.

Trump must hold out for a good deal with China
Marco Rubio (WP) Feb 13, 2019
American negotiators must not waste the leverage Trump has created.

US risks being shunted into trade talks cul-de-sac
Gordon Watts (AT) Feb 13, 2019
Crucial issues will still have to be resolved at the two-day meeting in Beijing before a deal is hammered out.

Signs of progress in China-US trade talks, but gaps remain big
Economist Feb 13, 2019
Negotiations hinge on how to enforce China’s pledges.

A no-deal Brexit would affect more than just British trade with the EU
Economist Feb 13, 2019
Over 30 trade agreements with other countries still need to be concluded by the end of March.

Let Bank Supervisors Do Their Jobs
Tobias Adrian and Aditya Narain (IMF) Feb 13, 2019
Healthy banking sector. Healthy economy. So goes the thinking. Banks play a vital role in economic life—whether for individual consumers, or more broadly across an entire economy—and a strong and stable banking system is a matter of public concern.

Brexit Goes to the Brink
Jacob Funk Kirkegaard (PIIE) Feb 13, 2019
Less than two months away from the prospect of crashing out of the European Union (EU) in a “no deal Brexit,” Britain is about to test the proposition that the only way to get people to do something they know is bad for them is to offer them a choice between that option and something far worse.

Public Debt: Fiscal and Welfare Costs in a Time of Low Interest Rates
Olivier Blanchard (PIIE) Feb 13, 2019
In his presidential address to the American Economic Association in early January, Olivier Blanchard explored the costs and benefits of public debt in the current environment of low interest rates. In this Policy Brief, he first summarizes his argument; he then addresses a number of objections to his conclusions and considers the practical fiscal policy implications.

How the EU could transform the energy market: The case for a euro crude-oil benchmark
Elina Ribakova (Bruegel) Feb 13, 2019
There is a strong case for an oil benchmark in euros. Trading energy markets in more than one currency is not unprecedented, and indeed used to be the norm. Europe – with its powerful currency and reliable regulatory environment – should stand a good chance of success.

Rethinking the World Bank
Bloomberg View Feb 13, 2019
Outdated assumptions hold the institution back. A leadership shift should spark a debate about its future.

Global Tilt Toward Easing Draws Succor in Asia
Daniel Moss (Bloomberg View) Feb 13, 2019
Slowing inflation vindicates India’s surprise rate cut and New Zealand’s central bank takes a dovish turn.

EU Elections: Populism’s Threat May Be Overstated
Nicola Mai and Peder Beck-Friis (PIMCO) Feb 13, 2019
European Union (EU) Parliament elections on 23-26 May 2019 look set to boost the share of populist parties in parliament by a meaningful amount and have therefore drawn the attention of financial markets. We think the election is unlikely to result in meaningful change for European politics or the markets for several reasons, including the complex governing structure of the EU and the divergent views of the populist parties themselves. From an investment perspective, higher representation in the parliament of anti-establishment and eurosceptic movements would be a marginal negative factor, but we do not view it as a game-changer.

As China Defaults Rise, Ratings Firms Are Little Help
Nisha Gopalan (Bloomberg View) Feb 13, 2019
Global grading systems of domestic bonds won’t be much of an improvement over the opaque local scales – or much comfort to foreign investors.

Russia's Growth Expectations Fall Back to Earth
Leonid Bershidsky (Bloomberg View) Feb 13, 2019
The economic data for 2018 were surprisingly rosy. The outlook for this year is sharply less upbeat.

Brexiters, Stop Fantasizing About Singapore-on-Thames
Linda Lim (Bloomberg View) Feb 13, 2019
Those who imagine the U.K. can emulate its tiny former colony don’t understand much about the real Singapore.

Trump Has Lost on the Wall. Now He Can’t Win on Trade
Jonathan Bernstein (Bloomberg View) Feb 13, 2019
His threat to unilaterally pull out of Nafta unless he gets his way is no more likely to get results than the December shutdown.

Huawei and 5G: A Case Study in the Future of Free Trade
Noah Feldman (Bloomberg View) Feb 13, 2019
The line between economic protectionism and national security precaution is hard to draw in this data-driven era.

Libor’s Replacement Is a Little Too Real
Matthew S Levine (Bloomberg View) Feb 13, 2019
That means you have to live with the ups and downs of the market.

May’s Brexit Plan Found at the Bottom of a Glass
Therese Raphael (Bloomberg View) Feb 13, 2019
Olly Robbins’s bantering in bar is the best guide for how the British prime minister plans to leave the EU.

Don’t Drink and Negotiate Brexit at the Same Time, Folks
Mark Gongloff (Bloomberg View) Feb 13, 2019
A sobering reminder of the myths Brexiters continue to peddle.

China’s Default Wave Spares the Biggest Fish
Anjani Trivedi and Shuli Ren (Bloomberg View) Feb 13, 2019
State-backed borrowers are benefiting from Beijing’s bounty at the expense of their private peers.

Helping Africa Help Refugees
Asmita Parshotam (Project Syndicate) Feb 13, 2019
Refugee management in Africa is hindered by scarce resources, social tensions, and cumbersome regulatory processes. Donors, international and regional organizations, and African governments must intensify their efforts to develop a rights-based refugee-management framework.

Playing Chicken with Europe
Chris Patten (Project Syndicate) Feb 13, 2019
The philosopher Bertrand Russell believed the Cold War nuclear standoff resembled a high-risk game played by "youthful degenerates." British Prime Minister Therea May is playing a similar game, and if her Brexit brinkmanship goes wrong, the victim would be Britain.

India’s Vote-Buying Budget
Shashi Tharoor (Project Syndicate) Feb 13, 2019
By tradition, India's pre-election budget is an “interim budget” – a modest rollover of expenditures to see the government through for a few months until a new government is elected and presents its own budget. Not this time.

A Survival Kit for the City of London
Barry Eichengreen (Barry Eichengreen) Feb 13, 2019
Edouard-François de Lencquesaing, the president of the European Institute of Financial Regulation, recently dismissed London’s post-Brexit prospects as a global financial center, calling the City's rise “a mere accident of history.” But some accidents have enduring consequences, and the consequences of this one are not going away.

How Can We Tax Footloose Multinationals?
Joseph E. Stiglitz (Project Syndicate) Feb 13, 2019
Apple, Google, Starbucks, and companies like them all claim to be socially responsible, but the first element of social responsibility should be paying your fair share of tax. Instead, globalization has enabled multinationals to encourage a race to the bottom, threatening the revenues that governments need to function properly.

Bankruptcy propagation in customer–supplier networks
Yoshiyuki Arata (FT) Feb 13, 2019
The complex networks formed through customer–supplier relationships between firms have the potential to propagate shocks across the economy. This column explores how bankruptcy is propagated through a network of approximately one million Japanese firms. Bankruptcy propagation is observed empirically, but only very infrequently and with very limited reach. This is because the increased connectivity between firms disperses bankruptcy shocks such that they immediately die out.

Official lending and debt sustainability in the euro area
Giancarlo Corsetti, Aitor Erce and Timothy Uy (VoxEU) Feb 13, 2019
During the euro area crisis, management of official loan maturities emerged as a critical item in the discussion on which instruments and strategies are most effective at ensuring debt sustainability. Using a theoretical model calibrated to Portugal and cross-country data, this column shows that lengthening loan maturities and managing debt repayment flows has substantial effects on sustainability. It also unveils a key policy trade-off in official lending between increasing the amount of safe debt (immune from rollover risk) and strengthening the incentive to default in response to negative shocks to fundamentals.

Thailand’s ‘Green Rush’
Skot Thayer (Diplomat) Feb 13, 2019
With the legalization of marijuana, Thailand hopes to carve out a stake in the global cannabis industry.

Forget Bitcoin, Try Your Mattress
David Gerard (FP) Feb 13, 2019
Cryptocurrency is about as safe as keeping your money in a sock under someone else’s bed.

Iran’s Economy Is Crumbling, but Collapse Is a Long Way Off
Keith Johnson (FP) Feb 13, 2019
Things will only get worse under Trump’s sanctions, but China, India, and other countries are still defiantly buying oil.

Leveraged loan warnings are not fear-mongering
FT View Feb 14, 2019
New dangers emerging in the credit markets should not be dismissed.

Improving employment rates helps tackle inequality
Chris Giles (FT) Feb 14, 2019
Countries that offer both flexible job markets and social protection tend to thrive.

Banks’ Brexit costs are one-off, but asset relocation is one-way
Matthew Vincent (FT) Feb 14, 2019
BofA has spent $400m on shifting employees and operations to Dublin and Paris.

Beware pools of liquidity: they could be a mirage
Bilal Hafeez (FT) Feb 14, 2019
E-trading, shrunken market-makers and retreating central banks is a triple threat.

Value of cryptocurrencies is only in the eye of holders
Andreas Utermann (FT) Feb 14, 2019
Investors should steer clear of bitcoin and the like as an investable asset despite plummeting prices.

Altmaier’s industrial strategy is wrong for Germany
Christoph Schmidt (FT) Feb 14, 2019
The right response to the rise of China is not to try to create ‘national champions’.

Saving Europe by Destroying It From Within
Joseph C. Sternberg (WSJ) Feb 14, 2019
Euroskeptics may bolster the bloc by shifting focus away from institutions and onto the needs of people.

How New Silk Roads are shaping Southwest Asia
Pepe Escobar (AT) Feb 14, 2019
Businesses in the Middle East have begun to think 'Make trade not war' and being part of China's Belt and Road scheme.

Core CPI May Tick Up Before Moderating in the Second Half
Tiffany Wilding (PIMCO) Feb 13, 2019
Rising input costs from the various import tariffs continue to support prices.

A Commitment to Shared Prosperity: The Next Chapter of Unity in Europe
Christine Lagarde (IMF) Feb 14, 2019
Europe has worked, and worked quite well. And it is important we recognize this success. History matters. You do not plant cut flowers.

Netherland's Economic Outlook in Five Charts
IMF Feb 14, 2019
Growth in the Netherlands has picked up and unemployment has fallen sharply in recent years. But real wage and productivity growth have been slow, possibly exacerbated by the increasing share of short-term labor contracts. Finally, the high savings rate and low level of domestic investment by large multinationals, as well as the high debt and illiquid assets of households, are hindering a pickup in the country's growth potential.

How to Win a Tech Cold War
Bloomberg View Feb 14, 2019
Carving out areas of American technology that are off-limits to China requires a scalpel, not a chainsaw.

India Should Call Truce in U.S. Trade Conflict
Mihir Sharma (Bloomberg View) Feb 14, 2019
Growing protectionism is going to undermine an export sector that’s already struggling.

Emerging-Market Rebound Has Room to Run
John Authers (Bloomberg View) Feb 14, 2019
The most crowded trade may be long developing-nation assets, but that doesn’t mean the consensus is wrong. Also, more on buybacks.

Japan’s Economy Isn’t Hopeless
Daniel Moss (Bloomberg View) Feb 14, 2019
A rebound in fourth-quarter GDP disappoints idealists. The economy is treading water – and that’s pretty good these days.

Troubling Times at the Bank of Italy
Ferdinando Giugliano (Bloomberg View) Feb 14, 2019
The populist government has made some worrying interventions in Consob and the central bank. It should take a leaf out of Donald Trump’s book instead.

The Fed Risks Repeating December’s Mistake
Jim Bianco (Bloomberg View) Feb 14, 2019
The economists that the central bank tends to agree with have a vastly different view of the path for monetary policy than markets.

Wage Stagnation Is One Disease With Many Causes
Noah Smith (Bloomberg View) Feb 14, 2019
First it was low productivity. Then it was health insurance. Then it was China. Then it was....

Europe's Biggest Economy Is Stuck in Limbo
Leonid Bershidsky (Bloomberg View) Feb 14, 2019
Any trade shock could ruin Germany’s hopes of even modest growth.

IDA 19 and the Private Sector Window: Time for Course Corrections
Nancy Lee and Karen Mathiasen (CGD) Feb 14, 2019
This year, donors will negotiate the 19th replenishment of IDA, the triennial fundraising exercise for the World Bank’s poorest clients. Among the major issues up for discussion will be the future of the private sector window (PSW), a $2.5 billion facility launched under IDA 18. We believe the PSW is a vital addition to the multilateral toolkit, but donors could help secure stronger performance with some significant modifications.

What Will Succeed GDP?
Diane Coyle (Project Syndicate) Feb 14, 2019
Over eight decades after its introduction, there is a widespread consensus that GDP is no longer a useful measure of economic progress. Its successor will need to be compelling and tell a persuasive story, consistent with experience, of what is happening in our economies.

Democracy Beyond Voting and Protests
Sasha Fisher (Project Syndicate) Feb 14, 2019
Around the world, distrust of government and decades of declining civic engagement go hand in hand. To stem today's populist tide, public policies must encourage citizens to reconnect with shared institutions and with one another.

A Very Greek Brexit?
George Papaconstantinou (Project Syndicate) Feb 14, 2019
Unlike the United Kingdom, Greece is one of the European Union’s smaller economies, notorious for its weak institutions and economy, and a net recipient of EU funds. And yet the Grexit near-exit from the EU in 2015 offers important lessons for the final stage of Brexit negotiations.

Chinese and US Ambitions Constrained
Joergen Oerstroem Moeller (YaleGlobal) Feb 14, 2019
Geography and financial constraints limit both nations.

The Gulf’s eastward turn: The logic of Gulf-China economic ties
Karen E. Young (AEI) Feb 14, 2019
Arab Gulf states are expanding their political and economic ties with China as a bridge strategy to create a next-generation energy market in traditional oil and gas products, as well as petrochemical production and future market access in expected areas of consumer growth. China is also a competitor in some areas where Arab Gulf states are investing in infrastructure, ports, and political outreach to secure new security partnerships, particularly in the Horn of Africa. China and the Arab Gulf states share a model and vision of economic development that is state centered and profitable to state-owned enterprises and financial institutions.

Recovery in stocks needs weaker dollar and China stimulus
Michael Mackenzie (FT) Feb 15, 2019
Earnings growth for S&P 500 groups expected to grind to virtual halt in first half.

Oil’s ‘shock and awe’ isn’t coming from Saudi Arabia
David Sheppard (FT) Feb 15, 2019
Goldman believes kingdom trying to lift prices but US shale creating the real noise.

Everything still to play for with AI in its infancy
Richard Waters (FT) Feb 15, 2019
IBM and Google’s differing approaches highlight extent to which field is wide open.

The Hong Kong property bubble that won’t burst
Emma Dunkley (FT) Feb 15, 2019
A cooling Chinese economy has not been enough to seriously dent property prices.

Economic chill hits China as trade talks continue
Gordon Watts (AT) Feb 15, 2019
Another round of discussions are planned for Washington next week in a bid to nail down an agreement.

New Zealand wakes belatedly to its China risk
Helen Clark (AT) Feb 15, 2019
While Wellington and Beijing look to boost trade ties, rising security concerns have recently roiled bilateral relations.

What can the EU do to keep its firms globally relevant?
Georgios Petropoulos and Guntram B. Wolff (Bruegel) Feb 15, 2019
There is a fear that EU companies will find it increasingly difficult to be on top of global value chains. Many argue that EU-based firms simply lack the critical scale to compete and, in order to address this problem, that Europe’s merger control should become less strict. But the real question is where the EU can strengthen itself beyond the realm of competition policy.

Measuring Trump's 2018 Trade Protection: Five Takeaways
Chad P. Bown and Eva (Yiwen) Zhang (PIIE) Feb 15, 2019
President Donald Trump’s 2018 tariff spree has resulted in 14.9 percent of US imports now being covered by some sort of special trade protection.

A Self-Driving Fix for a Population Problem
Nathaniel Bullard (Bloomberg View) Feb 15, 2019
Autonomous delivery vehicles could provide one unexpected solution to a deepening dilemma in Asia: declining fertility rates and the effect on the workforce.

Drip. Drip. Asia’s Liquidity Taps Start to Gurgle
Andy Mukherjee (Bloomberg View) Feb 15, 2019
Whisper it for now, but we may see the region’s asset markets start to operate more smoothly in the second half of the year.

One Weird Trick for Avoiding Bad Chinese Bonds
Shuli Ren (Bloomberg View) Feb 15, 2019
The private sector and companies that boast high-level connections are no substitute for genuine government debt.

Brexit: Deal or No Deal?
Therese Raphael (Bloomberg View) Feb 15, 2019
For all the parliamentary fireworks, May’s chances of leaving the EU with a deal may actually be improving. Just don’t ask for a guarantee.

What Next for Venezuela?
Anne O. Krueger (Project Syndicate) Feb 15, 2019
Even before the international community started rallying behind Venezuela's opposition leader, Juan Guaidó, the country's interim president, Nicolás Maduro, was running out of runway. It is now clear that the Chavist regime cannot survive, and that the country will need massive humanitarian and financial support after it falls.

The euro crisis in the mirror of the European Monetary System
Giancarlo Corsetti, Barry Eichengreen, Galina Hale and Eric Tallman (VoxEU) Feb 15, 2019
Why was recovery from the euro area crisis delayed for a decade? The explanation lies in the absence of credible and timely policies to backstop financial intermediaries and sovereign debt and to thereby prevent problems in banks and bond markets from feeding on one another. This column adds light and colour to this analysis, contrasting recent experience with the 1992-3 crisis in the European Monetary System, when national central banks and treasuries more successfully provided this backstop.

A decade after Lehman, puzzles and challenges in the international monetary system
Ozge Akinci, Roland Beck, Paola Donati, Linda Goldberg and Livio Stracca (VoxEU) Feb 15, 2019
While some improvements have occurred in the wake of the Global Crisis, the international monetary system still is rife with puzzles and challenges. This column summarises the latest Global Research Forum, which took stock of global financial stability a full decade on from Lehman. The starting points for many discussions were that international financial linkages remain strong, but have evolved in their composition; the US dollar continues to be the key currency for international trade and financial transactions; and banking systems have increased their resiliency and broadened their toolkits for dealing with stresses. Meanwhile, corporate debt issuance has soared and average US dollar-denominated liabilities have increased in most major emerging market economies.

Brexit uncertainty is costing the UK dearly
FT View Feb 16, 2019
Sluggish growth and parliamentary chaos points to further trouble.

Why European banks fall short on Wall Street
John Gapper (FT) Feb 16, 2019
Investor pressure on Barclays and Deutsche Bank to retrench is just the latest blow.

Why ‘covenant lite’ loans are not the menace they seem
Mark Vandevelde (FT) Feb 16, 2019
Risky debt market is dominated by contracts that have investor protections ripped out.

The biggest bank merger since the crisis may herald more
Economist Feb 16, 2019
American banking has become a battle of scale.

The war on plastic will dent oil demand
Christof Ruhl (FT) Feb 17, 2019
Companies are underestimating the importance of changed consumer attitudes.

The next three acts of the Brexit drama
Vince Cable (FT) Feb 17, 2019
The challenge will be welding a political reconciliation from our fractured parties.

What’s the Plan for Brexit? There Is No Plan
NYT Feb 17, 2019
It may be time to stop the doomsday clock and start over.

For Wall Street Banks in London, It’s Moving Time
Amie Tsang and Matthew Goldstein (NYT) Feb 17, 2019
One thing is clear about the legacy of Brexit: Financial services will be spread across Europe, with no one city again dominating the financial arena as London has.

Poland Is Europe’s Growth Champion. Can This Continue?
Marcin Piatkowski (Globalist) Feb 17, 2019
Key elements of the Polish success story resemble that of the German post-war economic story, especially relying on social and economic inclusiveness as a driver of economic success.

India’s Sleepwalking to Trouble on Builder Debt
Andy Mukherjee (Bloomberg View) Feb 17, 2019
Generous loan terms, indolent construction and a lack of market discipline have shielded the nation’s developers. That’s changing.

The OPEC+ Oil Deal Is Standing on One Wobbly Leg
Julian Lee (Bloomberg View) Feb 17, 2019
Saudi Arabia is bearing a greater burden for production cuts, while Russia is nowhere near the reductions it promised. That arrangement can’t last.

The euro – a tale of 20 years: The priorities going forward
Marco Buti, Maya Jollès and Matteo Salto (VoxEU) Feb 17, 2019
The launch of the Economic and Monetary Union in 1999 was a considerable challenge and a historic milestone. The first decade of its existence firmly established the euro as a credible construction. As this column describes, however, from 2008 onwards the economic and financial crisis in Europe laid bare the weaknesses of its initial construct. Some assumptions behind the EMU institutional setting had to be reconsidered and, in the following years, considerable efforts were made to strengthen the EMU. To complete the job, we need to rebuild trust and overcome the creditors/debtors divide.

Wellbeing measurements, Easterlin’s paradox, and new growth models
Sriram Balasubramanian (VoxEU) Feb 17, 2019
There has been considerable criticism of the general reliance on GDP as an indicator of growth and development. One strand of criticism focuses on the inability of GDP to capture the subjective well-being or happiness of a populace. This column examines new growth models, paying particular attention to Bhutan, which has pursued gross national happiness, rather than GDP, since the 1970s. It finds evidence of the Easterlin paradox in Bhutan, and draws out lessons for macroeconomic growth models.

What Britain should do after a no-deal Brexit
Wolfgang Münchau (FT) Feb 18, 2019
The UK must draw up a post-industrial economic strategy for the long term.

China’s new trade offer is better than a tariff war
Gavyn Davies (FT) Feb 18, 2019
Xi Jinping’s plan would turn the country into a deficit economy.

Austerity, by Alberto Alesina, Carlo Favero and Francesco Giavazzi
Chris Giles (FT) Feb 18, 2019
A timely defence of unpopular spending cuts as economists ditch previously held positions.

What’s Really in Your Index Fund?
Robert J. Jackson Jr and Steven D. Solomon (NYT) Feb 18, 2019
Investors love index funds, but they may not be as transparent as they seem.

Universal basic income and the Finnish experiment
Catarina Midoes (Bruegel) Feb 18, 2019
The preliminary results on the Universal Basic Income (UBI) experiment in Finland, and what they mean for the long-standing questions over the potential impact of UBI in developed countries.

Trump Upping the Ante on US-EU Trade
Holger Schmieding (Globalist) Feb 18, 2019
Will the US and EU find a compromise on trade to avert a head-on clash?

It’s the (World) Economy, Stupid!
Daniel Moss (Bloomberg View) Feb 18, 2019
Policy makers have perfected the blame game as they cast about for causes of economic malaise.

A Simple Idea to Improve Fed Communication
Mohamed Aly El-Erian (Bloomberg View) Feb 18, 2019
The central bank should eliminate its “dot plot,” which signals the direction of interest rates but can be misinterpreted by the markets.

Pakistan’s Quest for Inclusive Growth
Vaqar Ahmed (Project Syndicate) Feb 18, 2019
Pakistan’s new government is understandably preoccupied with short-term economic problems, but it must also lay the foundations for a more inclusive long-term growth model. If it succeeds, the Pakistani economy might finally start to meet the rising aspirations of the country's young population.

West Africa’s Democratic Tipping Point?
Olusegun Obasanjo, John Dramani Mahama, Ernest Bai Koroma and Saulos Chilima (Project Syndicate) Feb 18, 2019
This year and next, Nigeria, Senegal, and Côte d’Ivoire will hold general elections. Whether the votes reinforce or undermine progress toward democratic consolidation will depend not just on the commitment of national governments and the efforts of civil society, but also on the international community's support.

What Ails Europe's Economy?
Ferdinando Giugliano (Bloomberg View) Feb 18, 2019
There’s no single explanation, and that may be its weakness.

Ending America’s World Bank Monopoly
Kaushik Basu (Project Syndicate) Feb 18, 2019
David Malpass, US President Donald Trump's nominee to lead the flagship development bank, appears distinctly unsuited to the job. To protect the World Bank 's work– and the interests of the world's poor – it may be time to end the tradition whereby the American candidate always wins.

Why a US-China Trade Deal Is Not Enough
Minxin Pei (Project Syndicate) Feb 18, 2019
If the US and China fail to reach a comprehensive trade agreement, bilateral trade will plummet, and the unraveling of the US-China economic relationship would accelerate. But even if an agreement is reached, that unraveling will continue, because, at its core, the trade war has always been about security.

Why asset managers create subsidies for certain firms
Anil Kashyap, Natalia Kovrijnykh, Jian Li and Anna Pavlova (VoxEU) Feb 18, 2019
A well-known puzzle in economics is that when stocks are added to the S&P 500 index, their prices rise. Using a theoretical framework and empirical evidence, this column shows that this ‘benchmark inclusion subsidy’ arises because asset managers have incentives to hold some of the equity of firms in the benchmark regardless of the risk characteristics of these firms. As a result, asset managers effectively subsidise investments by benchmark firms. As the asset management industry continues to grow, the benchmark inclusion subsidy will only get bigger.

We need to talk about Bunds
Kate Allen (FT) Feb 19, 2019
A shortage of safe assets in the eurozone is creating market distortions.

Why markets should get set for ‘QE4’
Michael Howell (FT) Feb 19, 2019
World’s financial system has become dependent on huge central bank balance sheets.

Lessons from Jamaica for countries in debt
Nigel Clarke (FT) Feb 19, 2019
Reform of monetary policy and iron fiscal discipline have been the keys to recovery.

Will 2019 see an end to ‘Made in China’?
Gary Greenberg (FT) Feb 19, 2019
US-China relations continue to be tense and superpower rivalry is here to stay.

China’s slow reforms stack odds against multinationals
Tom Mitchell (FT) Feb 19, 2019
Trade talks can improve US access but local champions hold unassailable positions.

Fears of party influence on Chinese groups are overblown
Gu Bin (FT) Feb 19, 2019
The political leadership in Beijing exerts little control over market forces.

EM investors should make hay while the sun shines
Paul Greer (FT) Feb 19, 2019
Risks cannot be discounted but, for now, EMs are in a sweet spot.

Poverty, inequity and Brazil’s public schools
Denis Mizne (FT) Feb 19, 2019
A proper education for all is key to the country’s development.

Housing Is Already in a Slump. So It (Probably) Can’t Cause a Recession.
Conor Dougherty (NYT) Feb 19, 2019
A decline in residential real estate has led several recessions. With construction still in a multiyear slump, it seems unlikely to be the culprit this year.

ECB Is Awake and Asleep at the Same Time
Marcus Ashworth (Bloomberg View) Feb 19, 2019
Senior policy makers have recognized the risks threatening the European economy. Too bad they’re going to be incredibly slow to act.

The Fed’s 'First, Do No Harm' Policy Is Harmful
Lakshman Achuthan and Anirvan Banerji (Bloomberg View) Feb 19, 2019
Instead of pausing, the central bank may need to start cutting interest rates to avoid a recession.

Budget Deficits Still Matter
William C Dudley (Bloomberg View) Feb 19, 2019
The U.S. government has the capacity to take on more debt, but it’s not unlimited.

How High-Tax Countries Tax
Justin Fox (Bloomberg View) Feb 19, 2019
They don’t tax wealth much, their income taxes are high but not very progressive, and they rely a lot on consumption taxes.

Why the U.S. and China Can’t Make a Deal
Michael Schuman (Bloomberg View) Feb 19, 2019
They’ve turned trade talks into a test of strength, and both are overestimating their own.

Bad Jobs Data Could Bite China
Christopher Balding (Bloomberg View) Feb 19, 2019
If unemployment numbers aren’t really as rosy as they appear, Beijing’s stimulus policies could well misfire.

Trump’s Car Tariffs Would Victimize Eastern Europe, Too
Leonid Bershidsky (Bloomberg View) Feb 19, 2019
The U.S. President risks sowing the seeds of anti-Americanism in countries where it hasn't been widespread before.

Aging Singapore Tries to Avoid the Japan Trap
Andy Mukherjee (Bloomberg View) Feb 19, 2019
A strong currency and subsidies for low-income workers offer a contrasting approach to the challenge of an aging society.

The Housing Slump Down Under Is Getting Serious
Daniel Moss (Bloomberg View) Feb 19, 2019
Spending and property prices are being tightly linked. If only we could see that mystery central bank paper.

Brexit's Just One (Car) Accident Waiting to Happen
Anjani Trivedi (Bloomberg View) Feb 19, 2019
For Honda and other companies operating in the U.K., a withdrawal from the EU will be a challenge. But there are plenty of others.

Debunking Deregulation: Bank Credit Guidance and Productive
Josh Ryan-Collins (Evonomics) Feb 19, 2019
Deregulated banking in rich countries delivers more “investment” in speculative asset markets, not productive businesses.

Measuring Connectedness between the Largest Banks
Galina Hale, Jose A. Lopez, and Shannon Sledz (FRBSF Econ Letter) Feb 19, 2019
The financial crisis provided a stark example of how interconnected the financial system is. Since then, researchers have developed several ways to monitor patterns of connectedness within the banking system. A key challenge is removing the impact of conditions that affect all banks in order to highlight evidence of direct connectedness. A new measure filters these common factors from bank stock market data. Estimates using this method show how different assumptions can affect conclusions about the connections among banks.

Honda sounds a further Brexit warning to Britain
FT View Feb 20, 2019
Leaving the EU will imperil decades of success in UK carmaking.

Japan’s buyback boom has the smell of activism
Leo Lewis (FT) Feb 20, 2019
Companies are repurchasing shares at record levels — and there is a common thread.

For stocks, it’s corporate buying that really matters
John Plender (FT) Feb 20, 2019
Companies are the biggest buyers of equities through buybacks and acquisitions.

China will not surpass America any time soon
Joseph Nye (FT) Feb 19, 2019
Exaggerated fears about growing Chinese power are counter-productive.

Why banks are wary of Beijing plea to back private companies
Gabriel Wildau and Yizhen Jia (FT) Feb 20, 2019
China’s domestic lenders have good reasons to resist the state’s call to supply credit.

Plunge in Japanese exports point to dark year
William Pesek (AT) Feb 20, 2019
Tokyo's latest trade figures paint a grim story for the region.

Low growth, low risk and low returns
David Goldman (AT) Feb 20, 2019
Signs point to weaker revenue growth, but corporate credit, REITs, and other income-earning assets will likely hold up well.

As Lending Standards Fall, Worries of a New Bust Rise
George Pickering (Mises Wire) Feb 20, 2019
New research is sparking fears that junk debt could trigger a repeat of the 2008 crash.

4 lessons for developing countries from advanced economies’ past
Ivailo Izvorski and Kenan Karakülah (Brookings) Feb 20, 2019
Many of today’s poorest countries do not collect adequate revenues to build the human capital, infrastructure, and institutions needed for stronger growth and faster poverty reduction. In sub-Saharan Africa, for example, 15 of the 45 countries have revenues lower than 15 percent of GDP. Moreover, sub-Saharan Africa’s resource-rich countries have revenues that are more volatile and lower than countries that are resource-poor. Even with substantial foreign grants and loans, government spending by developing countries is lower than by advanced economies. In 2018, government spending in sub-Saharan Africa averaged 23 percent of GDP compared with 31.4 percent in middle-income countries and almost 39 percent in the advanced ones.

What to Do About the New Subprime Boom
Bloomberg View Feb 20, 2019
Stop subsidizing debt. Start paying attention.

The One Thing That Could Derail Japan’s Sales Tax Hike
Daniel Moss (Bloomberg View) Feb 20, 2019
Abe said a Lehman-like event would shelve a levy increase. We’re not there, but China’s slowdown may be a good excuse.

The U.S., Not China, Is the Real Currency Manipulator
Shuli Ren (Bloomberg View) Feb 20, 2019
The yuan has been tracking the dollar, so any volatility begins at home in Washington.

Fed Minutes Highlight Global Economic Challenges
Mohamed Aly El-Erian (Bloomberg View) Feb 20, 2019
The central bank is eager to avoid a repeat of the market-roiling flip-flop of January, but miscommunication remains a threat.

Bad Banks Really Do Hurt Your Economy
Ferdinando Giugliano (Bloomberg View) Feb 20, 2019
New research proves what the ECB has been arguing all along. The skeptics in Southern Europe should listen up.

Trump Tariff Threat Leaves EU Looking for Plan B
Lionel Laurent (Bloomberg View) Feb 20, 2019
How Europe can respond to the threat of a trade war.

China’s Recession-Proof Economy Heads to a Stress Test
Noah Smith (Bloomberg View) Feb 20, 2019
The country’s leaders seem willing to bargain away future growth to avert a slowdown.

Venezuela Isn’t Just a Failed State. It’s a Failure of the Left.
Tyler Cowen (Bloomberg View) Feb 20, 2019
Conservatives are not wrong when they say socialism deserves some blame for the nation’s collapse.

Brexit’s Lost World
Ngaire Woods (Project Syndicate) Feb 20, 2019
When the British electorate voted nearly three years ago to leave Europe behind, the world looked very different than it does today. Instead of a vibrant multinational order, Britain now faces a world challenged by Donald Trump's presidency, cooler relations with China, and electoral manipulation by hostile powers.

India’s Trifecta of Failure
Ramesh Thakur (Project Syndicate) Feb 20, 2019
With a general election approaching, India's government is planning a further extension of caste-based quotas in schools and public-sector jobs. This is typical of the two main parties' tendency to choose the path of least political resistance and defer deep reforms.

This Time Really Is Different
Christopher Smart (Project Syndicate) Feb 20, 2019
Business cycles wouldn't be cycles if there were not similarities in how firms confront changing market conditions over time. But as the current cycle nears its inevitable end, investors should not lose sight of the unprecedented technological, political, and liquidity risks that will make the next cycle uniquely perilous.

The Dialectic of Global Trade Policy
Mohamed A. El-Erian (Project Syndicate) Feb 20, 2019
It is often said that with risk comes opportunity. What initially was viewed as an unfortunate US shift to protectionism may in fact have opened a window to improve the functioning of the global economy and world trade.

The Big Tech/FinTech Disruption
Howard Davies (Project Syndicate) Feb 20, 2019
A new report by the Financial Stability Board argues that the Big Tech could “affect the degree of concentration and contestability in financial services, with both potential benefits and risks for financial stability.” Managing the risks will require much more than vigilance by banking supervisors.

Brexit and the Irish border issue
Fabrizio Marongiu Buonaiuti and Filippo Vergara Caffarelli (VoxEU) Feb 20, 2019
The border between the Republic of Ireland and Northern Ireland has become a central issue in the Brexit negotiations between the UK and the EU. This column examines the proposals put forward by the two negotiating parties, and suggests two remedies that could make the European Commission’s initial ‘backstop’ proposal, whereby Northern Ireland would remain in the European Customs Union while the rest of the UK would be excluded from it, acceptable to the UK.

The public and private marginal product of capital
Matt Lowe, Chris Papageorgiou and Fidel Pérez Sebastián (VoxEU) Feb 20, 2019
Capital doesn’t flow to developing countries as much as economic theory suggests it should, and this might imply that capital is misallocated across nations. This column argues that once public capital is removed from the equation, the evidence shows that private capital is allocated remarkably efficiently across nations. It also suggests that the inefficiencies related to the allocation of public capital across countries can be significant and much larger than those related to private capital.

Growth Alone Won’t Help the Poor
Zuhumnan Dapel (FP) Feb 20, 2019
Despite impressive economic growth numbers, Nigeria’s next government must do more to raise living standards.

Chinese investors have a bigger worry than trade war
Henny Sender (FT) Feb 21, 2019
Concern about Xi Jinping’s approach to the economy is unsettling investors.

Chinese investors have a bigger worry than the US trade war
Henny Sender (FT) Feb 21, 2019
Concern about Xi Jinping’s approach to the economy is unsettling investors.

The chilly feeling around Sweden’s struggling krona
Katie Martin (FT) Feb 21, 2019
With interest rates stuck in the freezer, the currency’s woes are unlikely to ease.

Finance v physics: even ‘flash boys’ can’t go faster than light
Gillian Tett (FT) Feb 21, 2019
High-frequency trading illuminates the real-world underpinnings of digital markets.

All Silk Roads lead to Moscow
lexander Kruglov (AT) Feb 21, 2019
The Russian capital is luring migrant workers from Central Asia, generating a new multiculturalism as well as cashing in on cheap labor

Aid Showdown in Venezuela
WSJ Feb 21, 2019
Will Maduro use violence against people bringing food and medicine?

President Tariff Man may be learning all the wrong lessons from his trade wars
Catherine Rampell (WP) Feb 21, 2019
Namely, that higher tariffs work.

Next Up in the Trade Wars: Autos
Jeffrey J. Schott (PIIE) Feb 21, 2019
The Trump administration has concluded a study to determine whether imports of autos and auto parts impair or threaten US national security. The findings (not yet released to the public) could potentially trigger restrictions on hundreds of billions of dollars of US imports and provoke another skirmish in its trade wars with key US allies in Europe and Asia.

Australia's Economic Outlook in Six Charts
IMF Feb 21, 2019
Economic growth in Australia picked up strongly in the first half of 2018, and the economy made further strides in its adjustment and rebalancing after the end of the mining investment and commodity price boom. Despite strong employment growth and declining unemployment rates, wage growth was low and underemployment still above its longer-term average. In the absence of wage or other cost pressure, inflation remained below the central bank’s 2 to 3 percent target range. After a recent housing boom, a housing market correction is now underway.

The impact of the steamship on global trade and development
Luigi Pascali (VoxDev) Feb 18, 2019
The arrival of the steamship benefitted some countries but not others, with the strength and inclusiveness of institutions playing a key role.

Africa’s Digital Generation Gap
Perseus Mlambo (Project Syndicate) Feb 21, 2019
For evidence that Africa's aged rulers are increasingly out of touch with the continent's booming youth population, look no further than the digital economy. Rather than cultivating a sector that could help to address Africa's pressing need for new jobs, African governments are stifling it with new taxes and regulations.

The AI Road to Serfdom?
Robert Skidelsky (Project Syndicate) Feb 21, 2019
Estimates of job losses in the near future due to automation range from 9% to 47%, and jobs themselves are becoming ever more precarious. Should we trust the conventional economic narrative according to which machines inevitably raise workers' living standards?

Global Inflation: Should Central Banks Be Worried?
Azhar Iqbal, Sarah House, Michael Pugliese and Brendan McKenna (WF) Feb 21, 2019
Fears of deflation have plagued the global economy for the better part of the past decade. Concerns began to ease in 2017 when growth in many of the world's major economies strengthened. But with the global economy now showing signs of a synchronized deceleration, should central banks again be worried about deflation?

The UK ‘taking back control’ includes the right to be stupid
Martin Wolf (FT) Feb 22, 2019
British farm policy should not prioritise protecting agriculture over cheap food.

Accountancy is broken; here’s my favourite idea to fix it
Madison Marriage (FT) Feb 22, 2019
Criticised by officials as rotten and decrepit — change is urgently needed.

At Venezuela’s Border, a Strange and Deadly Showdown Over Aid
Nicholas Casey, Anatoly Kurmanaev and Ernesto Londono (NYT) Feb 22, 2019
The confrontation between Maduro and the opposition now includes dueling concerts, visiting presidents, plotting military defectors — and at least two deaths.

The Dollar Is Still King. How (in the World) Did That Happen?
Peter S. Goodman (NYT) Feb 22, 2019
Despite talk that the dollar was losing dominance, it has only gained stature, reinforcing President Trump’s power to dictate foreign policy.

Britain in the Crazed Brexit Vortex
Roger Cohen (NYT) Feb 22, 2019
The land of milk and honey promised by the Vote Leave campaign in 2016 has turned into a nightmare.

Chinese defaults are canaries in the global mine
William Pesek (AT) Feb 22, 2019
The problem with 2019 is how the clock is catching up with Beijing’s stimulus efforts and the effect it will have on the economy

Sustainability and the Fallacy of Global Governance
Chandran Nair (Globalist) Feb 22, 2019
Any global effort on climate change is toothless without the cooperation of national governments and their ability to act to support their aims.

Five Takeaways from Uruguay's Economic Outlook
IMF Feb 22, 2019
Over the last decade and a half, Uruguay’s economy has been resilient—helping to reduce poverty and raise incomes to one of the highest levels in the region. But recently growth has moderated, and the country faces the challenges of low investment, declining employment, and an uncertain external climate, the IMF said in its annual economic review.

Can Trump Make a Deal with China?
Andrew Sheng and Xiao Geng (Project Syndicate) Feb 22, 2019
In the ongoing US-China trade talks, considerable progress has been made on several key trade issues, such as intellectual-property rights protection. But to defuse tensions in any sustainable way will require a more comprehensive approach, based on a fundamental shift in mindset.

America First, Fallout Later
William L. Silber (Project Syndicate) Feb 22, 2019
When assessing Donald Trump’s place in the US political pantheon, few would put him anywhere near Franklin Delano Roosevelt. Yet by pursuing a narrowly focused domestic agenda with little mind to the international implications, Trump is emulating one of FDR’s most egregious political mistakes.

The economic effects of density: A synthesis
Gabriel Ahlfeldt and Elisabetta Pietrostefani (VoxEU) Feb 22, 2019
Most countries pursue policies that implicitly or explicitly aim at promoting ‘compact urban form’, but so far these policies have not been well-grounded in evidence. This column summarises the state of knowledge on the economic effects of density on various economic outcomes. It concludes that densification policies may lead to aggregate welfare gains, but there may be regressive distributional consequences.

Monetary policy communications and household inflation expectations
Olivier Coibion, Yuriy Gorodnichenko and Michael Weber (VoxEU) Feb 22, 2019
Monetary policy increasingly relies on communication, but most households are unaware of inflation targets or monetary policy announcements. This column uses large-scale randomised controlled trial of US households to study how different forms of communication influence the inflation expectations of individuals. Reading the Federal Open Market Committee statement has about the same average effect on expectations as being told about the Federal Reserve’s inflation target. Reading a news article about the same statement cuts the effect by half.

Central bank tone moves asset prices
Maik Schmeling and Christian Wagner (VoEU) Feb 22, 2019
According to Ben Bernanke, “monetary policy is 98% talk and 2% action”.Using data on policy rate announcements and press conferences by the ECB between 1999 and 2017, this column shows that central bank tone affects asset prices, even after controlling for policy actions and economic fundamentals. The results are consistent with the idea that communication tone is a monetary policy tool that allows central banks to affect the risk appetite of market participants and the risk premia they require.

Migration to end poverty
Gharad Bryan and Melanie Morten (VoxDev) Feb 22, 2019
Removing barriers to internal migration can boost a country’s productivity, albeit modestly and with heterogonous effects on original populations.

Build the Wall—To Keep Out the BMWs and Benzes
Philippe Legrain (FP) Feb 22, 2019
U.S. President Donald Trump’s protectionist trade policy may soon affect carmakers.

China’s Entrepreneurs Are Wary of Its Future
Li Yuan (NYT) Feb 23, 2019
Behind the scenes, businesspeople worry that Beijing has become more interested in solidifying its control over people’s lives than promoting economic growth.

Reforms: Love them for the long term
István Székely and Melanie Ward-Warmedinger (VoxEU) Feb 23, 2019
While there is a large literature on the political economy of reforms, surprisingly little is known about reform reversal. Based on an investigation of reform reversals in former transition countries, this column argues that once reforms are introduced, self-enforcing social norms and social learning should catch up with the new reality to create domestic anchors. Social norms have not always been strong enough to outweigh the opportunistic behaviour of politicians seeking short-term windfall gains. External anchors, while helping to protect reforms, cannot replace domestic ones.

Bolsonaro’s reforms in Brazil begin with a bang
FT View Feb 24, 2019
Divisions in government may yet see his programme end with a whimper.

Reform the credit default swap market to rein in abuses
Henry Hu (FT) Feb 24, 2019
Windstream’s fight with Aurelius highlights complexities of ‘empty creditors’.

How the Upper Middle Class Is Really Doing
David Leonhardt (NYT) Feb 24, 2019
Is it more similar to the top 1 percent or the working class?

Is Democrats’ swing left sound policy or an economic pipe dream?
Robert Samuelson (WP) Feb 24, 2019
A full-blown panic could occur given the U.S. dollar is the international currency.

Time for bolder steps from ASEAN
Ponciano Intal Jr (EAF) Feb 24, 2019
The realignment of great power relations in the Asia Pacific is causing great geopolitical uncertainty. The Digital Revolution and Fourth Industrial Revolution are expected to accelerate, generating regional unease about its impact on lower end employment.

If Central Banks Are the Only Game in Town, We’ve Lost
Satyajit Das (Bloomberg View) Feb 24, 2019
Relying on monetary policy to prop up asset prices and smooth out global volatility is a recipe for disaster.

How to Identify a Bear Market Rally
Danielle DiMartino Booth (Bloomberg View) Feb 24, 2019
History is replete with examples of major stock market recoveries following big sell-offs, many of which turn out to be head fakes.

China's Borrowers Have an $890 Billion Problem
Anjani Trivedi (Bloomberg View) Feb 24, 2019
Cash-strapped firms are facing a wall of debt due this year. That’s a problem for industrial companies getting less government help.

Bangladesh Versus India in the Development Race
Noah Smith (Bloomberg View) Feb 24, 2019
It's a battle that pits manufacturing against services.

Misreading China’s Strength
Stephen S. Roach (Project Syndicate) Feb 24, 2019
The US believes that with Chinese growth slowing, China's leaders are desperate for a deal to end the bilateral trade war, regardless of when the current 90-day truce actually ends. But the two economies’ longer-term fundamentals compel a very different verdict about which side has the upper hand.

Regulations, immigration, and firms' offshoring decisions
Simone Moriconi, Giovanni Peri and Dario Pozzoli (VoxEU) Feb 24, 2019
Firms’ offshoring decisions depend on the size of entry costs in target countries. But the institutional and policy determinants of these costs have received little empirical attention. This column uses data on 2,000 Danish manufacturing firms to explore how costs of entry affect offshoring decisions. Higher levels of labour market rigidity, credit risk, and corruption all lower the probability of offshoring to a given country, while immigrant networks within the firm increase the likelihood of offshoring to their home countries.

Britain faces harsh truths about post-Brexit trade
FT View Feb 25, 2019
The UK will be less rather than more open after it leaves the EU.

How the shale revolution is reshaping the markets
Nick Butler (FT) Feb 25, 2019
The fast-growing industry in the US is proving doubters of its sustainability wrong.

Investors’ herd behaviour makes markets more fragile
Laurence Fletcher (FT) Feb 25, 2019
Years of quantitative easing has created greater vulnerability to sharp sell-offs.

Trump, Trade and the Advantage of Autocrats
Paul Krugman (NYT) Feb 25, 2019
China can pay him off; places with rule of law can’t.

The Obama-Trump Economic Boom
Alan S. Blinder (WSJ) Feb 25, 2019
The current expansion may soon be America’s longest, and neither inflation nor tariffs are likely to stop it.

China’s measured reflation
David P. Goldman (AT) Feb 25, 2019
Asian markets get a boost from extended deadline in US tariffs.

A Chinese Bomb: Are We Really on the Threshold of Another Global Financial Crisis?
Diego Santizo (Mises Wire) Feb 25, 2019
The Chinese debt is overwhelming not simply because of the volume, but because the figure has quadrupled in seven years.

The U.S.-China Cease-Fire on Trade Is Promising
Bloomberg View Feb 25, 2019
Disputes between the two countries can be settled without higher tariffs.

May's Brexit Deal Hinges on Just One Man
Therese Raphael (Bloomberg View) Feb 25, 2019
It’s not Jeremy Corbyn, for all his calls for another referendum.

Another Ruinous Brexit Delay
Bloomberg View Feb 25, 2019
Running out the clock comes at an astonishingly high cost to businesses.

Trump's Trade Menu Needs More Than Chicken and Rice
David Fickling (Bloomberg View) Feb 25, 2019
A lasting peace will depend on a more substantial banquet of concessions in intellectual property, technology transfer and services.

Looking to Ride This China Bull Market? Better Think Twice
Shuli Ren (Bloomberg View) Feb 25, 2019
The recent rally in mainland stocks looks a lot like 2015. But this run-up may not go quite as far.

The Time Bomb in China’s Bond Market
Shuli Ren (Bloomberg View) Feb 25, 2019
Off-budget local government debt may look attractive to investors, with juicy corporate bond yields and quasi-sovereign credit status. Be careful.

Invoking the Great Recession Is a Great Distraction
Daniel Moss (Bloomberg View) Feb 25, 2019
Malaysia’s finance minister is right to say we’re not seeing a 2008 redux. Yet the comment detracts from Asia’s bigger problem of low inflation.

A Higher Inflation Target Won't Make the Fed More Effective
Mohamed Aly El-Erian (Bloomberg View) Feb 25, 2019
Breaching the 2 percent threshold can’t offset the lack of more pro-growth policies from Congress and the administration.

Latin America’s Right Turn Could Draw Its Economies Closer
Shannon K O'Neil (Bloomberg View) Feb 25, 2019
The ascent of leaders who favor free trade opens space for real integration.

One Old Rivalry Where Hong Kong Can Beat Singapore
Andy Mukherjee (Bloomberg View) Feb 25, 2019
The Chinese city could gain an edge by guaranteeing a basic income for retirees. This week’s budget would be a good place to start the conversation.

The Fed Has Done Much to Delay the Next Recession
Timothy A Duy (Bloomberg View) Feb 25, 2019
Policy makers might not have cut interest rates, but they did the next best thing.

Should Bold Ideas Drown Out Old Ideas?
Jeffrey Frankel (Project Syndicate) Feb 25, 2019
Radical ideas are not unusual in the early stages of a US presidential election campaign, but many of the Democratic candidates for 2020 are advocating unrealistic policies. Just because a new idea seems more exciting does not make it better than an established, more practical one.

Will the US Capitulate to China?
Martin Feldstein (Project Syndicate) Feb 25, 2019
The most important problem that a bilateral deal between the United States and China needs to resolve is Chinese theft of US firms’ technology. Unless the Chinese agree to stop stealing technology, and the two sides devise a way to enforce that agreement, the US will not have achieved anything useful from Trump's tariffs.

The heterogeneous tax sensitivity of firm-level investments
Peter Egger, Katharina Erhardt and Christian Keuschnigg (VoxEU) Feb 25, 2019
The effect of taxes on firm-level investments is very heterogeneous. This column shows that the impact of corporate taxation is up to 70% higher for entrepreneurial firms than for managerial ones, while dividend taxation negatively affects the investment of financially constrained firms but entails no significant impact on cash-rich firms. Policy should provide targeted tax relief to the most constrained firms, where taxes are most harmful, if other policies are unsuccessful in improving access to external funds.

Should the ECB care about the euro’s global role?
Benoît Coeuré (VoxEU) Feb 25, 2019
There is a growing debate in Europe as to whether recent shifts in global governance should be seen as a reason to strengthen the global role of the euro. This column explains that while the ECB does not take a view on foreign policy questions, the alignment between policies that will strengthen the euro’s global role and policies that are needed to make the euro area more robust, together with the implications for monetary policy that a stronger international role of the euro would have, make the debate relevant to the central bank.

Here’s How the United States Can Keep Its Technological Edge
Michèle Flournoy and Gabrielle Chefitz (FP) Feb 25, 2019
Washington needs to do more to foster and protect the country’s innovation ecosystem.

Inflationary Effects of Trade Disputes with China
Galina Hale, Bart Hobijn, Fernanda Nechio, and Doris Wilson (FRBSF Econ Letter) Feb 25, 2019
Imports from China are an important part of overall U.S. imports of consumer and investment goods. Thus, tariffs on these imports are likely to have sizable effects on consumer, producer, and investment prices in this country. Tariffs implemented thus far may have contributed an estimated 0.1 percentage point to consumer price inflation and 0.4 percentage point to price inflation for business investment goods. If implemented, an across-the-board 25% tariff on all Chinese imports would raise consumer prices an additional 0.3 percentage point and investment prices an additional 1.0 percentage point.

Making Sense of China's Fiscal Dollars and Cents
Michael Pugliese and Nick Bennenbroek (WF) Feb 25, 2019
In this report, we take a deep dive into the public finances of the world's second largest economy, China. At first blush, China's fiscal position appears quite enviable when compared to the United States, with a much lower "official" government debt-to-GDP ratio and a smaller deficit. However, a deeper dive reveals a more worrying and uncertain outlook

Behind the façade, the UK economy is faltering
FT View Feb 26, 2019
Brexit uncertainty threatens jobs boom and strong public finances.

A China-US trade deal is likely to be only a truce
FT View Feb 26, 2019
The real frictions are over Beijing’s goals of technological dominance.

Anger over tariffs obscures a shift in global trade patterns
Susan Lund (FT) Feb 26, 2019
Developed economies that reject globalisation all stand to gain from its next chapter.

May backs down to buy herself more time on Brexit
Robert Shrimsley (FT) Feb 26, 2019
Everything now points to a delay of the Article 50 divorce process.

Trump tweet exposes oil rally’s shaky foundations
David Sheppard (FT) Feb 26, 2019
US president reminds traders gathering in London that crude is rarely a one-way bet.

What shape could a US-China trade agreement take?
James Politi (FT) Feb 26, 2019
Series of key elements to be included in the contours of a possible deal.

The emerging world is slowing — but not as much as the developed
Steve Johnson (FT) Feb 26, 2019
Gap between leading indicators in EMs and developed world is at a 6-year high.

Brexit Delayed or Denied
WSJ Feb 26, 2019
Chaos around a deal with the EU obscures bigger debates.

Is Argentina on the Brink of a Tax Revolt?
Federico Fernández (Mises Wire) Feb 26, 2019
Argentina suffers from both high taxes and high rates of tax evasion. These two things are connected. The harder it is to pay taxes, the greater the motivation to evade them.

Still Lending (Mostly) After All These Years
Nancy Lee and Asad Sami (CGD) Feb 26, 2019
Concern about relatively low development finance institution (DFI) mobilization ratios (dollars of private finance mobilized per dollar of DFI’s own commitments) is drawing attention to the product mix in DFI operations. While lending dominates most DFI operations, it is not necessarily most effective in terms of mobilization ratios. DFIs try to strike a balance between lending for their own account and opening up opportunities to private lenders, but they are often criticized for crowding into the private commercial lender space. A recent study found that guarantees, while only 5 percent of multilateral DFI commitments, account for 45 percent of the mobilization of private finance.

Bring On That Second Brexit Vote
Bloomberg View Feb 26, 2019
Labour’s Jeremy Corbyn says he’s in favor. Better late than never.

To Save Capitalism, Save Communities
Raghuram G Rajan (Bloomberg View) Feb 26, 2019
As the powers of the state and the market have expanded, we’ve neglected the damage being done to the third pillar of society.

Trump’s China Trade “Win” Will Cost the U.S.
Michael Schuman (Bloomberg View) Feb 26, 2019
The U.S. president looks likely to settle yet again for minor concessions in a high-stakes negotiation, this time with long-term consequences.

An Intruder Undermines India’s Central Bank
Andy Mukherjee (Bloomberg View) Feb 26, 2019
An expedient ruling by the bankruptcy tribunal has eroded the regulator’s ability to discipline lenders.

Vestager Is Out of Place in the New European Order
Leonid Bershidsky (Bloomberg View) Feb 26, 2019
France and Germany's industrial push is about competition with the U.S. and China, not within Europe itself.

May Keeps Everybody Locked in Brexit Purgatory
Therese Raphael (Bloomberg View) Feb 26, 2019
Her core message – her deal, no deal, or no Brexit – is unchanged.

Italy's Populist Insurgents Are Collapsing
Ferdinando Giugliano (Bloomberg View) Feb 26, 2019
Five Star has been humiliated in regional elections. Its coalition partners in the League are profiting, but need to get their timing right on seizing power.

Migration Myths vs. Economic Facts
Mahmoud Mohieldin and Dilip Ratha (Project Syndicate) Feb 26, 2019
World Bank data show that migration flows are increasing – a trend that is set to continue. Fragmented migration policies shaped by popular myths cannot manage this process effectively, much less seize the opportunities to spur development that migration creates.

Closing Africa’s Financing Gap
Guillaume Arditti (Project Syndicate) Feb 26, 2019
There is growing international recognition that the current shortfall in investment financing is a major threat to Africa's future. New investors, particularly private-sector debt funds, are needed to close the gap and realize the continent's enormous potential.

The Vietnam Model for North Korea
Le Hong Hiep (Project Syndicate) Feb 26, 2019
This week's summit in Hanoi with US President Donald Trump gives North Korean leader Kim Jong-un another chance to work toward lifting his country out of international isolation. In this regard, Kim would do well to study Vietnam's record over the past three decades.

Stock Buybacks Are the Wrong Target
Michael Spence (Project Syndicate) Feb 26, 2019
Legislation banning companies from purchasing their own shares, or conditioning buybacks on investment in workers, would not significantly alter the distribution of wealth. What it would do is undermine the broad cooperation needed to tackle income inequality and a fast-changing labor environment.

Risky Retirement Business
Carmen M. Reinhart and Christoph Trebesch (Project Syndicate) Feb 26, 2019
Regardless of whether yields in advanced economies rise, fall, or stay the same, core demographic trends are unlikely to change in the coming years, implying that pension costs will continue to balloon. Is there an asset class that can provide yield-hungry pension-fund managers what they're looking for?

Slow recoveries through fiscal austerity
Francesco Bianchi, Diego Comin, Howard Kung and Thilo Kind (VoxEU) Feb 26, 2019
During the Great Recession, several European countries implemented fiscal austerity measures to reduce sovereign debt. This column argues that such policies affect the decision to adopt new technologies and can have negative consequences for productivity and growth in the medium run. Thus, low technology adoption due to fiscal austerity can lead to slow recoveries. These, in turn, can make the fiscal stabilisation unnecessarily costly. Fiscal austerity is desirable only if it is able to quickly reduce the cost of financing debt.

The household finance landscape in emerging economies
Cristian Badarinza, Vimal Balasubramaniam and Tarun Ramadorai (VoxEU) Feb 26, 2019
Over the past few decades there has been great interest in taking formal finance to households around the world, especially in emerging economies. Using micro-level data from six emerging economies – China, India, Bangladesh, the Philippines, Thailand, and South Africa – this column creates harmonised measures of household assets and liabilities. The findings suggest that there is still much work to be done to truly financialise household balance sheets. There are many differences between the management of wealth between emerging economy and advanced economy households that we do not yet understand.

Regional Value Chains: Africa’s Way Forward
Maxime Weigert and Mohamed El Dahshan (YaleGlobal) Feb 26, 2019
Cooperative partnerships help Africa industrialize – and avoid the uncertainties of fierce global competition.

Can Venezuela Recover from Its Crisis?
K@W Feb 26, 2019
There are viable, nonviolent ways of resolving Venezuela's grave economic and political issues, experts say.

Last Exit From Brexit?
Owen Matthews (FP) Feb 26, 2019
This week, the British Labour Party announced its support for a second Brexit referendum, and Prime Minister Theresa May opened the possibility of delaying a March 29 deadline for Brexit—a dramatic series of developments in a stalled Brexit process.

Other People’s Blood
Tim Barker (n+1) Feb 26, 2019
On Paul Volcker, the rise of centralized banking, and the massive consequences of the “dizzying financialization” that began in the late 1970s.

Parliament should use a delay to rethink Brexit
FT View Feb 27, 2019
A softer withdrawal or a second referendum are the only realistic options.

A second Brexit referendum is now essential
Martin Wolf (FT) Feb 27, 2019
If democracy means anything, it means a country’s right to change its mind.

The time is ripe for a European safe asset
Paolo Savona (FT) Feb 27, 2019
Eurozone markets’ dependence on German debt creates destabilising distortions.

Beijing rhetoric belies reality of China’s private enterprise
Henny Sender (FT) Feb 27, 2019
Pledges to entrepreneurs ring hollow with founders obliged to toe Communist party line.

Is the emerging market risk cycle restarting?
Michael Howell (FT) Feb 27, 2019
Even the sniff of future US easing can be enough to push flows into EM assets.

Don’t let the UK’s economic doldrums get you down
Ken Fisher (FT) Feb 27, 2019
Short-term data overload can spook investors — look to the long term.

Brexit has rekindled Austria’s enthusiasm for Europe
Frederick Studemann (FT) Feb 27, 2019
Thirty years after the fall of the Iron Curtain, there are signs of renewed trust between neighbours.

Why Venezuela needs an oil-for-food programme
Francisco Rodríguez (FT) Feb 27, 2019
Sanctions threaten to cripple the economy; Maduro would not be the only one to blame.

How Debt Makes the Market Volatile
James Piereson (WSJ) Feb 27, 2019
Stocks are becoming more sensitive to interest-rate hikes because the global economy is overleveraged.

The inescapable irony of the Brexit crackup
Robert Samuelson (WP) Feb 27, 2019
The Brexit process has weakened Britain’s economy and promoted political polarization.

Wall of soundbites could fuel Trade War II
Gordon Watts (AT) Feb 27, 2019
The relationship between China and the US is unlikely to ‘return’ to the status quo

From Venezuela to NOPEC, trying times for OPEC
Jonathan Gorvett (AT) Feb 27, 2019
Members of oil cartel will be forced to reckon with South American country's opposition at March 17-18 meeting

How low will US growth go?
David P. Goldman (AT) Feb 27, 2019
The decline in trade is unlikely to see swift recovery, and there are reasons to worry about the US consumer

Learning Equity Requires More Than Equality
Maryam Akmal and Michelle Kaffenberger (CGD) Feb 27, 2019
Recent results from PISA-D reveal that there is a learning crisis at the top—in many countries even the middle class and “statistical elites” are failing to reach international standards for learning. While much rhetoric around equity in education focuses on bridging gaps within countries, such as between the rich and the poor, the evidence suggests that many education systems are failing to achieve high learning even for the most privileged groups, while less privileged groups do even worse. What role does achieving within-country equality across groups play in reaching universal proficiency goals as highlighted in SDG4?

In a 7-1 Decision, the United States Supreme Court Rules that the IFC Is Not Above the Law
Vijaya Ramachandran (CGD) Feb 27, 2019
The US Supreme Court decided today, in a ruling on Jam v. International Finance Corporation (IFC), that the IFC can be sued in US courts.

China’s strategy: Growth, alliances, and tech acquisition
Alicia García-Herrero (Bruegel) Feb 27, 2019
Despite the pause in the US-China trade war, the US and China are strategic competitors, and will continue to be so for the foreseeable future. China realizes that there is little room to settle long-term disputes and, as a result has shifted towards a strategy that focuses on sustaining growth at any cost, expanding alliances, and advancing its technology.

Tech Can’t Drive the U.S. Economy Forever. What’s Next?
Conor Sen (Bloomberg View) Feb 27, 2019
Probably government, led by Democrats wary of climate change and the rise of China.

May's Brexit Deal Starts to Fall Into Place
Therese Raphael (Bloomberg View) Feb 28, 2019
Whisper it, but even hardline Brexiters want a deal now.

Latvia's Central Banker Deserves His Day in Court
Leonid Bershidsky (Bloomberg View) Feb 27, 2019
The best way to understand what took place in Nordic and Baltic banks accused of money laundering is full-blown court cases.

Relax. China Only Wants a Bull Market, Not a Mad Cow
Shuli Ren (Bloomberg View) Feb 27, 2019
Regulators aren’t looking to clamp down on margin finance completely. Rather they’re looking to curb the gray-market excesses of 2015.

This Trillion-Dollar City Doesn’t Know How Rich It Is
Andy Mukherjee (Bloomberg View) Feb 27, 2019
Hong Kong is rolling in fiscal reserves and budget surpluses. It also faces questions over its long-term financial future.

Macron-Style Capitalism Is Taking Over in Europe
Lionel Laurent (Bloomberg View) Feb 27, 2019
Even the Dutch are getting into state intervention with the purchase of an Air France-KLM stake. It’s understandable, but bad news for investors.

The GovTech Latin America Needs
Carlos Santiso (Project Syndicate) Feb 27, 2019
As Latin American governments pursue a much-needed digital transformation, they should encourage and facilitate entrepreneurship in govtech, which covers innovations that focus on boosting the public sector's efficiency. This will require action on at least three fronts.

Has Monetary Easing Really Run Its Course?
Koichi Hamada (Project Syndicate) Feb 27, 2019
After years of unprecedentedly easy monetary policy in the world's advanced economies, many are warning that the stimulus potential is depleted, particularly in Japan, with its negative short-term interest rate. But this view fails to account for the exchange-rate mechanism by which monetary policy is transmitted to the real economy.

Wag the Dictator
Nina L. Khrushcheva (Project Syndicate) Feb 27, 2019
In recent decades, Russian and Chinese conglomerates have gained ever more global economic influence, making them powerful foreign-policy tools for their respective governments. But now Russian President Vladimir Putin and Chinese President Xi Jinping are learning that they are the tools.

The Case for Green Realism
Jean Pisani-Ferry (Project Syndicate) Feb 27, 2019
The transition to a carbon-neutral economy is bound to make us worse off before it makes us better off, and the most vulnerable segments of society will be hit especially hard. Unless we acknowledge and address this reality, support for greening the economy will remain shallow and eventually wane.

A Better Populism
Raghuram G. Rajan (Project Syndicate) Feb 27, 2019
The only policy that left- and right-wing populists can agree on to address economic decline is trade protectionism, which will make the world poorer. A new type of populism that puts more trust in local communities may well have a greater chance of success.

Macro reasons to loath protectionism
Davide Furceri, Swarnali Ahmed Hannan, Jonathan D. Ostry and Andrew Rose (VoxEU) Feb 27, 2019
It seems an appropriate time to study what, if any, have been the macroeconomic consequences of tariffs in practice. Using a straightforward methodology to estimate flexible impulse response functions, and data that span several decades and 151 countries, this column finds that tariff increases have, on average, engendered adverse macroeconomic and distributional consequences: a fall in output and labour productivity, higher unemployment, higher inequality, and negligible effects on the trade balance (likely owing to real exchange rate appreciation when tariffs rise). The aversion of the economics profession to the deadweight loss caused by protectionism seems warranted.

Brazilian Pension Reform in Queue
Brendan McKenna (WF) Feb 27, 2019
Brazil's President, Jair Bolsonaro, submitted his much anticipated pension reform proposal to congress last week. As developments unfold and the administration's reform proposal gets challenged in congress, we believe the Brazilian real will begin to gradually weaken over time.

To monitor risk, don’t rely on rating agencies
Kate Allen (FT) Feb 28, 2019
The canaries in markets’ coal mine are thriving but their job is to state the obvious.

Britain has a chance to think again on Brexit
Philip Stephens (FT) Feb 28, 2019
But first Parliament must reject Theresa May’s fraudulent deal.

Trump is itching to surrender to China on trade
Edward Luce (FT) Feb 28, 2019
US president’s restless desire for a deal defies the patient negotiations required.

US debt in line of fire from China trade deal
William Pesek (AT) Feb 28, 2019
Fed chairman and BlackRock CEO see trouble ahead for global markets.

Equities vs. Bonds? Look to China for Clues
Geraldine Sundstrom (PIMCO) Feb 28, 2019
Chinese stimulus could be instrumental in deciding which investors are proved right.

The Next ECB Chief Economist Is More Than a Dove
Leonid Bershidsky (Bloomberg View) Feb 28, 2019
Bank of Ireland Governor Philip Lane is also a strong advocate for a closer European monetary union.

Central Banks Signal That It's Time to Be Selective
Mohamed Aly El-Erian (Bloomberg View) Feb 28, 2019
A dovish turn suggests that you look homeward, angel.

South Korea's Economy Is Alive But Not Well
Daniel Moss (Bloomberg View) Feb 28, 2019
The central bank pays very close attention to the Fed and China. Activity at home could use some love, too.

Give Trump’s Big Stupid Trade Deal a Chance
David Fickling (Bloomberg View) Feb 28, 2019
A splashy agreement that returns things to the status quo is better than tilting at windmills around China’s industrial policy.

Draghi the Heretic Has a Vision for Europe
Ferdinando Giugliano (Bloomberg View) Feb 28, 2019
The ECB president thinks institutions (like his own) are the best bet for running the EU. It’s an unfashionable view, but one that’s worth hearing.

Don’t Destroy Globalization, Manage It
Raghuram G Rajan (Bloomberg View) Feb 28, 2019
Countries have given away power over cross-border flows unnecessarily. They should take some of it back.

Vietnam and the Dilemma of New Wealth
Tran Le Thuy (Project Syndicate) Feb 28, 2019
Vietnam's mix of one-party governance and market economics has been held up as a model for North Korean leader Kim Jong-un to emulate. But with rapid economic growth fueling rampant corruption and rising inequality, the Communist Party of Vietnam is now facing the biggest test of its leadership in decades.

Releasing the Renminbi
Yu Yongding (Project Syndicate) Feb 28, 2019
China’s authorities are committed to advancing the shift toward a market-driven economy, with a fully flexible exchange-rate regime. That means that, while it can credibly commit not to keep the value of the renminbi artificially low, it must reject US demands to keep the exchange rate stable against the dollar.

Puerto Rico on the Brink
Simon Johnson (Project Syndicate) Feb 28, 2019
After Hurricane Maria devastated the US commonwealth in 2017, President Donald Trump made a show of delivering aid, but the reality was that the island received too little assistance to make a difference for many people. And now a new disaster – one that Trump could easily prevent – is bearing down on them.

Poverty Reduction Rests on Trade
Caroline Freund and Robert Koopman (Project Syndicate) Feb 28, 2019
After a year of escalating trade conflicts, the world must not forget that open trade has been a key engine of economic growth and poverty reduction in recent decades. With the global economy now entering a broad slowdown, measures to expand economic opportunity through trade have become all the more important.

Household indebtedness did not weaken US monetary transmission post-crisis
Gaston Gelos, Federico Grinberg, Shujaat Khan, Tommaso Mancini-Griffoli, Machiko Narita and Umang Rawat (VoxEU) Feb 28, 2019
There is little evidence on whether deteriorating household balance sheets in advanced economies have made monetary policy less effective since the Global Crisis. Using US household-level data, this column shows that the responsiveness of household consumption to monetary policy has in fact diminished since the crisis, and that households with the highest indebtedness responded the most to monetary policy shocks. Since the distribution of debt did not change after the crisis, this suggests that household debt did not contribute to lessening the effects of monetary policy over time.

Effective trade costs and the current account
Emine Boz, Nan Li and Hongrui Zhang (VoxEU) Feb 28, 2019
It is commonly observed that economies specialising in sectors, such as services, that face relatively high trade costs tend to run current account deficits, while those specialising in more easily tradable sectors tend to run surpluses. This column tests the causality of this observation by constructing a measure of effective trade costs. Results show that although higher effective exporting costs are associated with lower current account balances, the impact of those costs is quantitatively limited. The findings suggest that the contribution of trade costs to observed global imbalances has been modest.

China’s Get-Rich Space Program
Namrata Goswami (Diplomat) Feb 28, 2019
Unlike other nations, China’s space ambitions are centered on wealth creation through a space-based economy.

A Weak US-China Trade Deal Might Lead to Good Things for the WTO
Patrick Leblond (CIGI) Feb 28, 2019
It appears the emerging US-China trade deal, which is expected to be signed in March, may be more superficial than some, including US Trade Representative Robert Lighthizer, would desire. An explanation of why a weak trade deal could be a good sign for the World Trade Organization.

Recent economic developments and longer-term challenges
Jerome H. Powell (FRB) Feb 28, 2019
I will start with the near-term outlook for the U.S. economy. The I will focus on an issue that is likely to be of more lasting importance: the need for policies that will support and encourage participation in the labor force, promote longer-term growth in our rapidly evolving economy, and spread the benefits of prosperity as widely as possible.