News & Commentary:

March 2014 Archives


Reforming Nigeria Foreign Affairs Subscription Required
Ngozi Okonjo-Iweala (FA) Mar 1, 2014
A Conversation With Ngozi Okonjo-Iweala.

The Mobile-Finance Revolution Foreign Affairs Subscription Required
Jake Kendall and Rodger Voorhies (FA) Mar 1, 2014
How cell phones can spur development.

(Mis)leading Indicators
Zachary Karabell (FA) Mar , 2014
Why our economic numbers distort reality.

Tectonic Shifts
Nicolas Véron (F&D) Mar 1, 2014
Banking union is a longterm process that will dramatically reshape Europe’s financial system.

Europe’s Road to Integration
Reza Moghadam (F&D) Mar 1, 2014
History points to integration to overcome a tough crisis.

Whither the Euro?
Kevin Hjortshøj O’Rourke (F&D) Mar 1, 2014
Historians may wonder how it came to be introduced in the first place.

Senior Shock
Patrick Imam (F&D) Mar 1, 2014
The graying of advanced economies may make monetary policy less effective.

The Dollar Reigns Supreme, by Default
Eswar Prasad (F&D) Mar 1, 2014
International currency arrangements have come under scrutiny in the aftermath of the global financial crisis.

Harbingers of Recessions
John C. Bluedorn, Jörg W. Decressin, and Marco E. Terrones (F&D) Mar 1, 2014
Changes in asset prices are good predictors of economic downturns.

In Search of a Stable Electronic Currency New York Times Subscription Required
Robert J. Shiller (NYT) Mar 1, 2014
Bitcoin has fluctuated wildly in value, but it could indirectly point the way toward a system of better pricing and risk management.

A trade agreement nobody should want
Serge Halimi (LMD) Mar 1, 2014
You can safely bet that the Transatlantic Partnership Agreement (TPA) will not feature as much in the forthcoming European elections as the extradition of illegal immigrants or the (alleged) teaching of "gender theory" in French schools.

Who’s Afraid of Tapering?
Koichi Hamada (Project Syndicate) Mar 1, 2014
The Federal Reserve’s exit from quantitative easing has financial markets and policymakers worried, with warnings of capital-flow reversals and collapsing asset prices dominating policy discussions worldwide. But, given that most major economies operate under a flexible exchange-rate regime, such concerns are largely unwarranted.

Wallets Wide Shut
Mohamed A. El-Erian (Project Syndicate) Mar 1, 2014
With profitability at or near record levels, cash holdings by the corporate sector in Europe and the US have reached an all-time high – and are earning very little at today’s near-zero interest rates. But, for at least six reasons, firms are not investing in capacity and creating the jobs that these economies need.

The finance and growth nexus in low-income countries
Nauro F Campos & Stefan Dercon (VoxEU) Mar 1, 2014
Financial development and growth have long been linked. This column argues that there remain fundamental lacunae in our understanding of the finance-growth nexus. Three main areas for future research are identified: aid, institutions and technology.

Retaliation in the WTO
Diego Bonomo (VoxEU) Mar 1, 2014
When a dispute in the WTO does not reach any resolution, the offended member country can request the right to retaliate against the offender. This column reviews the profile of most common retaliation-requesting members. There is a preference among certain countries to either pursue retaliation, or resist compliance. The magnitude of requests and the means of retaliation are also discussed. Overall, requesting retaliation is an important tool of analysis, as it often reveals a country’s goals in the WTO disputes.

Bitcoin reflects flawed financial system Financial Times Subscription Required
Ruchir Sharma (FT) Mar 2, 2014
The monopoly of central banks is enshrined in law – but the law alone will not guarantee the status quo indefinitely.

Turkey typifies emerging markets’ plight Financial Times Subscription Required
Wolfgang Münchau (FT) Mar 2, 2014
Analysts often blame capital flight from the emerging world on foreign speculators – but usually it is well-informed locals who get out first.

Fund managers present meaningful risks Financial Times Subscription Required
John Authers (FT) Mar 2, 2014
Should biggest funds be regulated as systemically important financial groups? The US Treasury’s Office of Financial Research is inclined to say yes.

Venezuela: In search of a solution Financial Times Subscription Required
John Paul Rathbone, Andres Schipani and Marc Frank (FT) Mar 2, 2014
Cuba has the most at stake in helping its closest ally find a peaceful resolution to violent protests that have brought parts of the country to a standstill.

The Roots of Venezuela's Disorder Wall Street Journal Subscription Required
Mary O'Grady (WSJ) Mar 2, 2014
Russia and Cuba are reaping what they've sown in Latin America.

Negative rate shocks
Tomas Hirst (Pieria) Mar 2, 2014
Allowing central banks to "go negative" would not have prevented the Great Recession.

The ECB is irrelevant and the Euro is a failure
Frances Coppola (Pieria) Mar 2, 2014
Monetary conditions in the Euro area are horrible, and there is little the ECB can do about it.

The Revolution Will Not Be Supervised Foreign Affairs Subscription Required
Francisco Toro (FA) Mar 2, 2014
The dangers of Venezuela's leaderless protests.

Ukraine: Geopolitical Risk Rising For Global Markets
Francesc Balcells (PIMCO) Mar 2, 2014
Following Russia's military intervention in Crimea, the situation in Ukraine remains extremely fluid. The outcome will determine to a large extent the systemic nature of the crisis and its impact on global markets, not just Europe. Russia stands to lose the most if this conflict should escalate into a full-fledged military confrontation, given the country's financial, economic and reputational stakes.

Making city lights burn brighter
Danny Leipziger & Shahid Yusuf (VoxEU) Mar 2, 2014
Urbanisation and GDP per capita are positively correlated across countries. However, when the sample is restricted to developing countries, urbanisation and growth are more loosely related – particularly in Africa. This column argues that the low share of manufacturing in developing-country cities may help to explain this discrepancy. Strengthening urban finances, embracing technology, improving skills, and stimulating the formal sector will help cities to promote growth. Since decisions affecting urban development can have lasting impact, longer-term planning deserves greater attention than it is currently receiving.

We do not have to live with inequality Financial Times Subscription Required
Jonathan Ostry (FT) Mar 3, 2014
Making the tax system more redistributive improves the distribution of income, which appears to lead to higher growth.

Europe’s private placement market puzzle Financial Times Subscription Required
Patrick Jenkins (FT) Mar 3, 2014
The region may yet make a success of private placements – partly through its own initiatives, and partly if good fortune stops smiling on the US.

Norway’s oil fund caught in paradox Financial Times Subscription Required
Richard Milne (FT) Mar 3, 2014
Oil-rich country to examine whether the world’s largest sovereign wealth fund should stop investing in any companies related to fossil fuels.

Belief in easy money boosts active funds Financial Times Subscription Required
Pauline Skypala (FT) Mar 3, 2014
Investors still favour active fund management despite data to the contrary that show the outperformance of passive investment vehicles.

Technology: Rise of the replicants Financial Times Subscription Required
Richard Waters (FT) Mar 3, 2014
Rapid advances in artificial intelligence now threaten the jobs of educated white-collar workers who are competing not with peers but machines.

The Economic Levers That Might Stop Putin Wall Street Journal Subscription Required
Robert M. Kimmitt and Stephen A. Myrow (WSJ) Mar 3, 2014
Russia may end up making itself an easy target for bond and currency speculators.

South Korea's Wildly Plausible Growth Plan
William Pesek (Bloomberg) Mar 3, 2014
South Korean President Park Geun Hye campaigned on a pledge to build a "creative economy," and the blueprint she announced on Feb. 25 would more than deliver -- but only if it's implemented expeditiously and wisely.

Emerging Economies on Their Own
José Antonio Ocampo (Project Syndicate) Mar 3, 2014
Both ECB President Mario Draghi and US Federal Reserve Chair Janet Yellen recently asserted that their policy decisions would account only for domestic conditions. In other words, emerging economies – though subject to significant spillover effects from advanced-economy monetary policy – are on their own.

From Poverty to Empowerment
Subir Gokarn and Anu Madgavkar (Project Syndicate) Mar 3, 2014
Extreme poverty is finally in retreat in India, having reached 22% in 2012 – less than half the rate in 1991. But escaping abject destitution, as defined by the official poverty line, is not the same as achieving a decent standard of living.

Europe - The Path to Sustainable Economic Growth
Christine Lagarde (IMF) Mar 3, 2014
Thanks to the formidable actions over the past five years, Europe—and Spain—are now turning the corner. Yet the task is far from finished. Growth remains too low and unemployment too high for us to declare victory on the crisis.

Asian crisis equals American opportunity
John H. Makin (AEI) Mar 3, 2014
Geopolitical tensions between China and Japan have the potential to affect US and global economic growth. Because US economic and political interests are more naturally aligned with those of Japan, the Obama administration should reemphasize its support of Japan's role in Asia. Japan's movement toward full sovereignty should include pledges by the United States and Japan to protect each other's interests in the event of conflict. This rearticulated US-Japan alliance need not threaten China, but rather serve as a reminder that actions that advance Chinese interests at the expense of US-Japan interests will not be tolerated.

Fed Tapering News and Emerging Markets
Fernanda Nechio (FRBSF Economic Letter) Mar 3, 2014
In 2013, the Federal Reserve publicly described conditions for scaling back and ultimately ending its highly accommodative monetary policy. Some emerging market countries subsequently experienced sharp reversals of capital inflows, resulting in sizable currency depreciation. But others did not. Variations in financial market reactions from one country to another appear to have been related to differences in economic conditions, which partly reflected a country’s policies before the Fed’s tapering comments.

Education, language and identity
Irma Clots-Figueras & Paolo Masella (VoxEU) Mar 3, 2014
Language is not only a tool of communication but also of empowerment and cultural identity. This column presents evidence that mandatory instruction in Catalan strengthened perceptions of regional identity and boosted political support for Catalanist parties. This evidence of the efficacy of multiculturalist policy should instruct policymakers in ethnically diverse societies.

The Great Divide over Market Efficiency
Clifford Asness and John Liew (II) Mar 3, 2014
The Nobel committee decided to split the economic prize between Eugene Fama and Robert Shiller — and that’s okay.

There is no easy path to democracy Financial Times Subscription Required
Martin Wolf (FT) Mar 4, 2014
The basic needs for a stable, liberal system are true citizens, honest guardians, proper markets and just laws.

The human progress economists miss Financial Times Subscription Required
John Kay (FT) Mar 4, 2014
The most important source of advance comes not from doing the same things better but from achieving the same objective in a completely different way.

All China’s roads lead to a lower renminbi Financial Times Subscription Required
Henny Sender (FT) Mar 4, 2014
As China deals with its concerns over hot money inflows, overheating property markets and lending growth, the renminbi is no longer a one-way bet.

High-end hoodies unmask Asean’s ‘promise’ Financial Times Subscription Required
Jeremy Grant (FT) Mar 4, 2014
Doing business in the region means bridging the gap between rhetoric about Asean’s promised and the harsh realities on the ground.

Unexpected Africa: Investigating New Ways to Think About the Continent Financial Times Subscription Required
Tom Marshall (NYT) Mar 4, 2014
In this lesson, we seek to challenge preconceptions with articles that offer new perspectives and defy stereotypes. From poverty and war to arts and entertainment, the world’s second largest continent is far more complex than it may seem.

The Wages of Yen Depreciation Wall Street Journal Subscription Required
WSJ Mar 4, 2014
Japanese are getting inflation, but not the pay raises to match.

Bitcoin Debacle: The Myth of Virtual Money
Peter Morici (Globalist) Mar 4, 2014
Bitcoin is another scheme that simply does not match hyper-libertarian expectations.

A Semi-Defense of the Efficient-Market Hypothesis
Jonathan Weil (Bloomberg) Mar 4, 2014
It would be an awful thing for investors if the Supreme Court took away their right to sue as a class in securities-fraud cases. Oral arguments are tomorrow.

Financial Innovation in the Wild
Philippe Douste-Blazy and Robert Filipp (Project Syndicate) Mar 4, 2014
The international trade in endangered species is a multibillion-dollar business, ranging from timber to exotic pets to luxury leather products. But the permitting system is technologically outdated and susceptible to abuse from fraud and corruption.

The Kingpins’ Mexico
Sergio Aguayo (Project Syndicate) Mar 4, 2014
In the coming years, Mexico will continue to be characterized by a combination of solid macroeconomic numbers, chronic inequality, and structural violence. In this context, the capture of Joaquín “El Chapo” Guzmán – one of the world’s most wanted criminals – is just a footnote in a much more complicated story.

Combating Konzo
Michael J. Boivin (Project Syndicate) Mar 4, 2014
Eradicating preventable diseases in Sub-Saharan Africa requires money, education, government support, planning, and, not least, an interest from the community and the wider world in solving the problem. Konzo, a neurological disorder caused by improperly prepared cassava, is a case in point.

Malthus, Marx, and Modern Growth
Kenneth Rogoff (Project Syndicate) Mar 4, 2014
The promise that each generation will be better off than the last is a fundamental tenet of modern society. But will future generations, particularly in advanced economies, realize such expectations?

The economic impact of inward FDI on the US
Theodore H. Moran & Lindsay Oldenski (VoxEU) Mar 4, 2014
The US has once again ranked among the top two recipient countries for foreign direct investment. This column examines the effects of these large FDI inflows on the US domestic economy. Foreign multinationals are – alongside US-headquartered American multinationals – the most productive and highest-paying segment of the US economy. In addition, they provide positive spillovers to US firms. About 12% of the total productivity growth in the US from 1987 to 2007 can be attributed to productivity spillovers from inward FDI.

Investment: A better bubble Financial Times Subscription Required
James Mackintosh (FT) Mar 5, 2014
The current froth in technology stocks is driven by revenue. That does not make it rational.

Value in emerging markets is eroding fast Financial Times Subscription Required
John Authers (FT) Mar 5, 2014
Crisis creates opportunities in markets, but they are becoming more difficult to identify, particularly in the emerging economies.

Quest to trigger inflation has failed Financial Times Subscription Required
Satyajit Das (FT) Mar 5, 2014
If inflation does not increase then a key strategy – increasing equity and real asset prices to encourage consumption via the wealth effect – may fail.

Misuse of migration statistics Financial Times Subscription Required
John McDermott (FT) Mar 5, 2014
The main reason why we should pay attention to government research in this field is because it is used by politicians to mislead a sceptical electorate.

Keep Korea's Economic Laboratory Open
William Pesek (Bloomberg) Mar 5, 2014
It's very clear why President Park Geun Hye chose Lee Ju Yeol to run the Bank of Korea. The former deputy governor boasts 35 years at the central bank,

China's Li Doesn't Believe His Own Numbers
Adam Minter (Bloomberg) Mar 5, 2014
China’s Premier Li Keqiang isn’t the sort of man to blush in public. But yesterday, when he went in front of China’s national legislature and targeted 7.5%

Deleveraging Is a Drag
A. Gary Shilling (Bloomberg) Mar 5, 2014
Investment outlook for 2014, Part 1.

East Africa’s Prosperity Gap
Michael Meyer (Project Syndicate) Mar 5, 2014
East Africa appears to be doing well, with annual economic growth rates averaging around 6% and trade and foreign investment on the rise. But, across the region, the richest are the overwhelming beneficiaries of economic growth, while the poorest are falling further behind.

A New Progressive Political Economy
David Sainsbury (Project Syndicate) Mar 5, 2014
The 2008 financial crisis revealed major flaws in neoliberal capitalism, and the last 35 years have shown that the neoliberal model has not performed well relative to the previous 30 years in terms of economic growth, financial stability, and social justice. The time has come for a credible progressive alternative.

Blue is the New Green
Yasser Al-Saleh (Project Syndicate) Mar 5, 2014
In recent years, calls to replace conventional “brown” economic development with a lower-carbon “green growth" model have been growing increasingly loud. But there is a third, more competitive option: a “blue” economy driven by business-level innovation, rather than top-down policies.

China’s regional and bilateral trade agreements
Chunding Li & John Whalley (VoxEU) Mar 5, 2014
After joining the WTO in 2001, China has entered into a number of trade agreements. Those currently in consideration are substantially larger than the initial ones. China, more than any other large economy, needs to attempt to enhance its export growth, which has turned negative in 2013. This column discusses some of China’s trade agreements and summarizes the implemented negotiation strategy. The impact of these trade agreements on China’s economic growth also deserves attention.

The World in 2020
Jim O‘Neill and Alessio Terzi (Bruegel) Mar 5, 2014
Making Europe more fexible in a changing world.

Even if everyone is immoral, there are ways of reducing corruption by changing institutional rules Recommended!
Pranab Bardhan (Indian Standard) Mar 5, 2014
On growth versus welfare, the Gujarat model and the limits of decentralisation.

Ukraine fails to trigger risk repricing Financial Times Subscription Required
Ralph Atkins (FT) Mar 6, 2014
Investors tend to view events through a markets-tinted lens and take fright when politicians turn out to have other motivations.

What the ‘suppressed’ report says Financial Times Subscription Required
John McDermott (FT) Mar 6, 2014
Ultimately, there is evidence that could be used and misused by both sides of the migration and jobs debate.

Quantitative easing and share prices Financial Times Subscription Required
Andrew Smithers (FT) Mar 6, 2014
As rises in the monetary base ease, this will also be true of the stock market.

Asia's Trilateral Trade Talks New York Times Subscription Required
NYT Mar 6, 2014
Enhancing economic ties may be the best way to reduce political tensions.

The Myth of the Great Wages 'Decoupling' Wall Street Journal Subscription Required
Donald Boudreaux and Liya Palagashvili (WSJ) Mar 6, 2014
There is no disconnect between productivity and worker pay if you use more accurate measures.

Cut Off the Russian Oligarchs and They'll Dump Putin Wall Street Journal Subscription Required
Garry Kasparov (WSJ) Mar 6, 2014
Target their assets abroad, their mansions and IPOs in London, their yachts. Use banks, not tanks.

Counter Putin by Liberating U.S. Natural Gas Wall Street Journal Subscription Required
John Boehner (WSJ) Mar 6, 2014
The de facto ban on exports should have been stopped long ago. Now world events demand it.

The Growth Killers
A. Gary Shilling (Bloomberg) Mar 6, 2014
Still living with the consequences of the financial crisis.

White House Trade Agenda Highlights TPP 2014 Target
Bridges Weekly Trade News Digest, Volume 18, Number 8 Mar 6, 2014
The US is hoping to finish the 12-country Trans-Pacific Partnership (TPP) talks by the end of this year, according to a report that was submitted to Congress on Tuesday. This year's Annual Trade Policy Agenda, which outlines the US executive branch's priorities for the upcoming year, comes at a time when the Obama trade agenda has come under growing scrutiny from both lawmakers and the US public.

Divisions Apparent as EU Ministers Debate 2030 Climate, Energy Goals
Bridges Weekly Trade News Digest, Volume 18, Number 8 Mar 6, 2014
Over a dozen EU ministers have joined together to call for a rapid agreement on the trading bloc's 2030 climate and energy goals, either at a leaders' summit later this month or in June. This week's meetings marked the first occasion of the new framework being formally discussed at the ministerial level by the 28 member states.

EU Reiterates Trade Offer as Ukraine-Russia Situation Escalates
Bridges Weekly Trade News Digest, Volume 18, Number 8 Mar 6, 2014
The EU has reiterated its earlier pledge to ink a trade deal with Kiev, as international tensions over Ukraine's future escalated further over the weekend following the incursion of Russian military forces into the Crimean peninsula. The fall-out has also put Moscow's membership in the G-8 into question, while substantially worsening Russia's economic and political ties with the EU and US.

EU Trade Ministers Pledge T-TIP Support As Talks Enter Next Stage
Bridges Weekly Trade News Digest, Volume 18, Number 8 Mar 6, 2014
EU trade ministers meeting in Athens last week pledged their full support to the ongoing trade talks with the US, as part of a broader push on both sides to allay concerns from public interest groups over the proposed Transatlantic Trade and Investment Partnership (T-TIP). With the fourth round of negotiations set to begin in less than one week, the planned agreement has received amped-up attacks from a diverse collection of critics on both sides of the Atlantic.

The Hidden Advantage (and Disadvantage) of Chinese Subsidies
Usha Haley and George Haley (Globalist) Mar 6, 2014
Will Chinese subsidies end up killing China’s economy?

Zombies and Glass Houses: Chinese Industrial Subsidies
Usha Haley and George Haley (Globalist) Mar 6, 2014
Is China serious about closing down unsustainable firms?

What Makes Greece Special?
Daniel Gros (Project Syndicate) Mar 6, 2014
The news from Greece these days has been dominated by the announcement that the government achieved a primary budget surplus in 2013. But another, much more important news item has received much less attention: Greece exported less in 2013 than in 2012.

China’s Shadow Menace
Yao Yang (Project Syndicate) Mar 6, 2014
The US Federal Reserve’s move to exit from quantitative easing is stoking fears of a hard economic landing in China. But China’s strong economic fundamentals mean that policymakers have the space to avoid such an outcome – as long as they get the country's shadow banking system under control.

Europe’s Middle-Age Trap
Edoardo Campanella (Project Syndicate) Mar 6, 2014
European policymakers have finally recognized the severity of their youth-marginalization problem. But, just over the horizon, there looms another social catastrophe that they have yet to acknowledge; this time, it is middle-aged workers who are poised to suffer.

Redistribution, inequality, and sustainable growth
Andrew Berg, Jonathan D Ostry & Charalambos Tsangarides (VoxEU) Mar 6, 2014
Inequality has the potential to undermine growth. However, greater redistribution requires higher tax rates, which reduce incentives to work and save. Moreover, the evidence that inequality is bad for growth might simply reflect the fact that more unequal societies choose to redistribute more, and those efforts are antithetical to growth. This column presents evidence from a new dataset on pre- and post-tax inequality. The authors find that income equality is protective of growth, and that redistributive transfers on average have little if any direct adverse impact on growth.

A better measure of the standard of living
Clara Capelli & Gianni Vaggi (VoxEU) Mar 6, 2014
The GNI is often regarded as the best indicator of a country’s living standards, but it does not record unilateral transfers – most importantly remittances – which are amongst the largest types of income inflows to developing countries. For many developing countries GNDI is significantly larger than GNI, from 3% for India to 75% for Liberia. This column argues that GNDI is preferable, since GNI masks heterogeneity in purchasing power.

What the collapse of the Ming Dynasty can tell us about American decline
Noah Smith (The Week) Mar 6, 2014
Everyone likes to compare the U.S. to Rome, but this 16th century superpower is a far more salient comparison

Put Your Portfolio on the Defensive
A. Gary Shilling (Bloomberg) Mar 7, 2014
Stocks could have a rougher year.

America's Natural Gas Lever New York Times Subscription Required
Michael Wara (NYT) Mar 7, 2014
The United States’s new gas abundance offers a chance to temper Russia’s ability to flout international norms with impunity.

The Secret History of the Financial Crisis
Harold James (Project Syndicate) Mar 7, 2014
Though official history portrayed the world's major central banks as embracing coordinated action to rescue the global financial system from disaster, the reality is that the Fed played the leading role. In fact, the Fed has effectively emerged from the crisis as the world’s central bank, while the IMF has been left on the sidelines.

Education’s Buy-Down Option
Nicholas Burnett and Nisma Elias (Project Syndicate) Mar 7, 2014
Last year was an important one for developing countries, if only because the world was reminded of the true value of education there. With the issue in the spotlight, new trends are gaining momentum, many of them merging with “innovative finance” – a concept much beloved by cash-strapped development policymakers and practitioners.

A Top-Heavy Focus on Income Inequality New York Times Subscription Required
Sendhil Mullainathan (NYT) Mar 8, 2014
Outrage at the very wealthy may be impeding a national discussion of how to raise the living standards of the bottom 20 percent.

A cult that gives growth a bad name Financial Times Subscription Required
Samuel Brittan (FT) Mar 9, 2014
Economists’ obsession over gross domestic product gives the concept an unnecessary air of mystification. A review of ‘GDP’, by Diane Coyle.

What to do about market inefficiency? Financial Times Subscription Required
John Authers (FT) Mar 9, 2014
Most money is placed in markets by agents acting for the owners and the incentives of these two groups can differ considerably.

American Gas for Europe Wall Street Journal Subscription Required
WSJ Mar 9, 2014
More pleas for Obama to reduce Western dependence on Putin.

Aiding Ukraine
Lawrence Summers (WP) Mar 9, 2014
How to best provide financial support.

The Innovation Enigma
Joseph E. Stiglitz (Project Syndicate) Mar 9, 2014
Around the world, there is enormous enthusiasm for the type of technological innovation symbolized by Silicon Valley, with many attempting to replicate the ingenuity that they regard as America’s true comparative advantage. But there is a puzzle: it is difficult to detect the benefits of this innovation in GDP statistics.

What is at stake in Crimea?
Yuriy Gorodnichenko & Gérard Roland (VoxEU) Mar 10, 2014
The speed at which events in Ukraine are unfolding is astounding. This column argues that the real goal of Russian President Putin is to make the February 2014 changes look like a failure. Root causes of the Ukrainian protest also exist in Russia and a victory of reform forces in Kiev could encourage stronger protest movement in Russia than that of 2011-2013 and potentially lead to a similar outcome.

Missing gains from trade?
Marc J. Melitz & Stephen Redding (VoxEU) Mar 10, 2014
Recent research has sought to quantify the magnitude of the welfare gains from trade. One of the main findings from this literature is that the gains from trade are relatively modest. This column suggests a channel that the standard approach typically abstracts from. It argues that trade induces changes in domestic productivity through a more efficient organisation of production within the supply chain.

Lives at stake in TPP trade deal
Martin Khor (AT) Mar 10, 2014
The US-led Trans Pacific Partnership trade agreement threatens to cut off the potential supply of generic medicines that can save lives as countries negotiating the deal are being asked to accept intellectual property rights that go well beyond normal standards. That makes the trade talks a matter of life and death.

Treaties can help China advance Financial Times Subscription Required
Robert Zoellick (FT) Mar 10, 2014
Reciprocal investment agreements can strengthen the country’s economic governance and contribute to a rules-based international economy

Venezuela exposes regional disunity Financial Times Subscription Required
John Paul Rathbone (FT) Mar 10, 2014
South America has advanced since dictatorship and default. However, the response to Nicolás Maduro’s problems also shows how far the region still has to go.

‘Safe’ assets needed to tackle savings mismatch Financial Times Subscription Required
Michael Diekmann (FT) Mar 10, 2014
Securitisation could bridge the gap between the need to invest savings on the one hand and the need to make huge capital investments on the other.

Private equity: Apollo’s race to the top Financial Times Subscription Required
Henny Sender (FT) Mar 10, 2014
A deep understanding of debt and a series of successful bets have helped the US investment firm become the most powerful player in the industry.

Yen-Pinching Undercuts Japan’s Push Against Years of Deflation New York Times Subscription Required
Hiroko Tabuchi (NYT) Mar 10, 2014
After years of falling prices, many Japanese have the mind-set that they need to save, not spend, putting a burden on the economy.

America Needs to Rethink 'Retirement' Wall Street Journal Subscription Required
Nicholas Eberstadt and Michael W. Hodin (WSJ) Mar 10, 2014
Unleashing the economic power of older workers is essential for U.S. prosperity.

How About Aiding Freedom Instead of Autocrats? Wall Street Journal Subscription Required
William Easterly (WSJ) Mar 10, 2014
The U.S. has given more than $1 billion to dictator-ruled Tajikistan, one of many nations in the aid blind spot.

Investing for the Next Shock
A. Gary Shilling (Bloomberg) Mar 10, 2014
Some possible shocks to the economy.

Duties Without Borders
Joseph S. Nye (Project Syndicate) Mar 10, 2014
In recent centuries, the nation has been the collectivity for which most people were willing to make sacrifices, and even to die, and most political leaders have seen their primary obligations to be national in scope. In a world of globalization, however, many people identify with multiple collectivities.

In Praise of Foxy Scholars
Dani Rodrik (Project Syndicate) Mar 10, 2014
In a world of diverse and changing circumstances, economists and other social scientists can do real harm by applying the wrong model. Unfortunately, they get virtually no training in how to choose among the alternatives.

Haiti’s Shadow Sanitation System
Jonathan M. Katz (New Yorker) Mar 12, 2014
Four years into a cholera epidemic, a trip to the bathroom, for many Haitians, means looking for an open field.

The spectre of eurozone deflation Financial Times Subscription Required
Martin Wolf (FT) Mar 11, 2014
The ECB is failing to do its job. The aim must be to raise inflation, particularly in surplus countries.

China, trade, aid and Africa Financial Times Subscription Required
Luke Patey and Zhang Chun (FT) Mar 11, 2014
Europe and China can learn from the other’s engagement in the continent.

Central banks in forward guidance rethink Financial Times Subscription Required
John Plender (FT) Mar 11, 2014
Where policy was related to labour market thresholds, the data failed to behave as expected, so policy makers need to make a fresh start.

North Korea: Glimmer of hope Financial Times Subscription Required
Simon Mundy (FT) Mar 11, 2014
Growing trade with China is gradually opening up the economy and giving the population a taste of freedom that may prove difficult to reverse.

A Relentless Widening of Disparity in Wealth New York Times Subscription Required
Eduardo Porter (NYT) Mar 11, 2014
The economic forces concentrating more and more wealth into the hands of the fortunate few are almost sure to prevail for a long time, according to a new book by the economist Thomas Piketty.

Private Credit and Public Debt in Financial Crises
Òscar Jordà, Moritz Schularick, and Alan M. Taylor (FRBSF Economic Letter) Mar 10, 2014
Recovery from a recession triggered by a financial crisis is greatly influenced by the government’s fiscal position. A financial crisis puts considerable stress on the government’s budget, sometimes triggering attacks on public debt. Historical analysis shows that a private credit boom raises the odds of a financial crisis. Entering such a crisis with a swollen public debt may limit the government’s ability to respond and can result in a considerably slower recovery.

Lloyds Currency Trader Front-Ran Himself
Matt Levine (Bloomberg View) Mar 11, 2014
Remember when that guy at UBS manipulated Libor just to mess with his rival at UBS? That's one of my favorite Libor manipulations. FX, not so different.

Will the IMF Lose Ukraine?
Mitchell A. Orenstein (Project Syndicate) Mar 11, 2014
No successful Eastern European government has been asked to impose a dramatic austerity and reform program prior to democratic elections. If the IMF insists that Ukraine's interim administration impose austerity immediately, the country will be forced to break uncertain new ground at a particularly dangerous time.

Putin’s Imperial Road to Economic Ruin
Sergei Guriev (Project Syndicate) Mar 11, 2014
The debate around Crimea is no longer centered on international law: Russian President Vladimir Putin has publicly recognized that he does not feel bound by it and does not care if the rest of the world deems Russia’s actions illegal. What is not clear is whether Russia’s economy can bear the burden of Putin’s objectives in Ukraine.

It is time that Bitcoin grew up Financial Times Subscription Required
John Gapper (FT) Mar 12, 2014
You cannot challenge currencies and disrupt the global payments industry and act as if your parent has opened the bedroom door without knocking.

Setbacks will not undo Nigeria’s progress Financial Times Subscription Required
Ngozi Okonjo-Iweala (FT) Mar 12, 2014
The country’s future lies not in oil and gas but in non-oil sectors.

Prospect of ECB QE drives EU bond rally Financial Times Subscription Required
Laurence Mutkin (FT) Mar 12, 2014
Government bonds in the eurozone periphery have performed strongly while core bonds have been quite stable, rather than weakening.

Fund managers are closet index huggers Financial Times Subscription Required
John Authers (FT) Mar 12, 2014
Study finds ‘closet indexing’ is rife in US active funds. Can these funds justify the fees they charge for active management?

African banks: Fragile dream Financial Times Subscription Required
William Wallis (FT) Mar 12, 2014
An institution created to embody stability and unity came close to failure at the hands of the very factors it was meant to defeat. The removal of its CEO could provide a second chance.

China Moves on Banking Reforms New York Times Subscription Required
NYT Mar 12, 2014
Higher interest rates and privately owned banks can help strengthen the nation’s banking system.

China's Quiet Lehman Moment Wall Street Journal Subscription Required
Joseph Sternberg (WSJ) Mar 12, 2014
A solar-power company's default makes investors reconsider assumptions about the government.

Reform Would Advance U.S. Interests
Robert Kahn (CFR) Mar 12, 2014
The situation in Ukraine underscores the need for the U.S. Congress to act on International Monetary Fund (IMF) reform and thereby strengthen the Fund's hand in tackling international economic crises.

Yuan Dive?
Barry Eichengreen (Project Syndicate) Mar 12, 2014
Since December, when the US Federal Reserve began tapering its monthly purchases of long-term assets, emerging-market currencies have fallen across the board, with the Chinese renminbi recently joining the trend. But when it comes to the renminbi's exchange rate, the People's Bank of China, not the Fed, calls the tune.

Education Without Borders
Gordon Brown (Project Syndicate) Mar 12, 2014
A century and a half ago, the Red Cross established the norm that health care could – and should – be provided even in conflict zones. Now Lebanon is the site of a pilot program to advance the idea that providing education for refugee children is equally feasible – and no less important.

New evidence on the durability of social norms
John Helliwell, Shun Wang & Jinwen Xu (VoxEU) Mar 12, 2014
Social norms have been shown to have important effects on economic outcomes. This column discusses new evidence showing that social norms are deeply rooted in long-standing cultures, but do evolve in reaction to major changes. It draws on a fully global sample involving migrants in more than 130 countries, using seven waves of the Gallup World Poll.

The big bubble danger is bonds Financial Times Subscription Required
Gillian Tett (FT) Mar 13, 2014
As in 1999, nobody knows when the turning point will come. But the more money that floods into fixed income, the more risky any reversal.

How our lives become an asset class Financial Times Subscription Required
Evgeny Morozov (FT) Mar 13, 2014
Having disrupted Madison Avenue, tech titans armed with better data, better engineers and better databases will disrupt Wall Street.

The furtive folk of global finance Financial Times Subscription Required
Gary Silverman (FT) Mar 13, 2014
We might at last see the faces of Wall Street’s hidden power players.

Crimea focuses minds at US-EU trade talks Financial Times Subscription Required
Shawn Donnan (FT) Mar 13, 2014
Immediate crisis in Ukraine has its trade dimensions. It was born out of tussle between Brussels and Moscow over trading ties.

Coco bonds risk turning into coco pops Financial Times Subscription Required
Ralph Atkins (FT) Mar 13, 2014
‘Coco’ bonds, rapidly gaining in popularity, are so-called not because of their sugary coating but because they are ‘contingent convertible’ capital.

Soaring Prices Fuel Frustrations Among Weary Argentines New York Times Subscription Required
Jonathan Gilbert (NYT) Mar 13, 2014
Since the peso was devalued, Argentines have grappled with one of the world’s highest inflation rates, tilling the ground for social unrest, including a strike by schoolteachers and police sit-ins.

Fixing Ukraine’s Economy New York Times Subscription Required
NYT Mar 13, 2014
International aid can help, but the country’s leaders still have to end wasteful subsidies and find ways to raise exports.

The Fed's Taper Is Already Paying Off Wall Street Journal Subscription Required
David Malpass (WSJ) Mar 13, 2014
Bank lending rose sharply in January and February. At this rate we may see real growth.

Turning the Ukrainian Crisis Into the IMF's Gain Wall Street Journal Subscription Required
Judy Shelton (WSJ) Mar 13, 2014
Along came a nice crisis for the Obama administration to exploit on behalf of the International Monetary Fund.

Sound Policy Design: the Efficient Way to Cut Inequality
IMF Survey Mar 13, 2014
Growing inequality in recent years has put pressure on fiscal policy. While the question of how much redistribution the state should do rests with national governments, policy design has a critical bearing on the effects on efficiency and growth.

In Washington, Azevêdo Calls for US Leadership in Doha Deal
Bridges Weekly Trade News Digest, Volume 18, Number 9 Mar 13, 2014
The US must continue to show leadership on the multilateral stage if the WTO is to succeed in its efforts to complete the Doha Round trade talks, the organisation's Director-General Roberto Azevêdo said in Washington on Monday, making a strong public push in favour of the global pact.

EU to Re-visit National GMO Ban Issue
Bridges Weekly Trade News Digest, Volume 18, Number 9 Mar 13, 2014
EU environment ministers agreed last week to re-open discussions on a legislative proposal that would allow member states to restrict or prohibit the cultivation of genetically modified organisms (GMOs) in all or part of their territory, even after they have been authorised at the EU level.

Canada, South Korea Clinch Trade Agreement
Bridges Weekly Trade News Digest, Volume 18, Number 9 Mar 13, 2014
Canadian Prime Minister Stephen Harper and his South Korean counterpart, President Park Geun-Hye, confirmed on Tuesday that their two countries had concluded negotiations for a bilateral trade pact. The news, announced in Seoul on Tuesday, marks Ottawa's first trade agreement with an Asia-Pacific partner.

Revised WTO Govt Procurement Deal to Take Effect in April
Bridges Weekly Trade News Digest, Volume 18, Number 9 Mar 13, 2014
The revised WTO Government Procurement Agreement (GPA) will enter into force on 6 April, trade officials confirmed this week. The changes to the pact are expected to generate US$100 billion in increased market access, in addition to the US$500 billion already covered by the existing deal.

Mexico’s Peace Potential
Steve Killelea (Project Syndicate) Mar 13, 2014
Mexico ranks above the global average in terms of life expectancy, youth empowerment, and child-mortality rates. But violence remains endemic, and perhaps the biggest challenge to curtailing it is perceived state corruption, which directly undermines the government’s effectiveness.

Coming Together and Falling Apart
Michael J. Boskin (Project Syndicate) Mar 13, 2014
An EU Association Agreement could be a huge boon to the Ukrainian economy. But free-trade agreements presuppose the existence of established political borders, and Ukraine is not the only country that might come apart.

Why the ECB Should Buy American
Jeffrey Frankel (Project Syndicate) Mar 13, 2014
The European Central Bank needs to ease monetary policy further. And, with purchases of member governments' bonds a risky – and possibly illegal – proposition, loading up on US Treasuries would be the best way to go about it.

Good Governance and Economic Performance
Kemal Dervis (Project Syndicate) Mar 13, 2014
It is the nature of governance that determines whether people deploy their talents and energy in pursuit of innovation, production, and job creation, or in rent seeking and lobbying for political protection. The contrast is starkest in emerging countries, but differences also exist among the advanced economies.

Global Economics between Jerusalem and Athens
Branko Milanovic (Globalist) Mar 13, 2014
What is the ultimate destination of economic history?

What Misfiring America Can Learn From Europe
George R. Tyler (Globalist) Mar 13, 2014
U.S. income inequality is a direct result of the U.S. top-heavy corporate model and short-termism.

Industry-centric economic measurement
Mike Orszag, Urvi Shriram & Dennis J Snower (VoxEU) Mar 13, 2014
Economic performance is increasingly defined by the idiosyncratic characteristics of companies operating across national borders, making anachronistic the treatment of the country as the basic unit of economic analysis when measuring performance. This column presents a new way of measuring economic performance and describes the Economic Performance Index (EPI) developed by the Global Economic Symposium and Towers Watson. Heterogeneous activity at the industry level better informs decision-makers acting in specific contexts.

Economic flaws in the German court decision
Paul De Grauwe (VoxEU) Mar 13, 2014
The German constitutional court declared the OMT program to against EU law. This column argues that the economic logic used by the German judges was flawed – based on economic theories that have been rejected empirically.

Piigs might fly - Opportunities still exist in peripheral Europe
Andrew Lyddon (Pieria) Mar 14, 2014
The peripheral economies of the eurozone- Portugal, Ireland, Italy, Greece and Spain - are once more back among the financial headlines.

Fiat Money and Business Cycles in Emerging Markets
Roger McKinney (Mises Daily) Mar 14, 2014
After the stock market collapse of 2008 and a decline of 3.4 percent for U.S. GDP in 2009, investors rushed to stash funds in emerging markets (EM) where economies were growing at a 3.1 percent annual rate. But the US stock market fell in January of this year largely due to financial trouble in emerging markets.

Emerging Markets’ Bubble Troubles
Jomo Kwame Sundaram (Project Syndicate) Mar 14, 2014
Emerging economies have been pursuing policies with little regard for the lessons of recent financial crises. Countries like India, Brazil, South Africa, and Indonesia have been hit by the Fed’s gradual exit from quantitative easing – and the asset bubbles that it has fueled.

Fallen Tiger, Shaken Dragon
Minxin Pei (Project Syndicate) Mar 14, 2014
Chinese President Xi Jinping is poised to cage the biggest political “tiger” – a corrupt top official – in the history of the People’s Republic. But the imminent arrest of former internal security chief Zhou Yongkang reconfirms a profoundly worrisome fact: the Middle Kingdom remains deeply corrupt.

Data and Development
Mahmoud Mohieldin and Grant James Cameron (Project Syndicate) Mar 14, 2014
Since 2000, development efforts have been guided by the Millennium Development Goals, which set targets in areas ranging from poverty to disease, to be achieved by 2015. In formulating the next development agenda, measuring the MDGs’ successes, and identifying where progress has lagged, is critical – and doing so demands better data.

Beyond Inflation Targets
David Cobham (Project Syndicate) Mar 14, 2014
The 2008 financial crisis made it clear that monetary policy should focus on more than the prices of goods and services. How should a revised mandate for central banks be structured to maintain their focus on low inflation while allowing monetary policy to address other issues when appropriate?

Ukraine's Odious Bonds: Part I
Anna Gelpern (PIIE) Mar 14, 2014
Ukraine's debt payments over the next two years could easily eat up most of the pledged aid from the United States and the European Union. Russia holds one of the biggest claims coming due in 2015, for $3 billion in Ukrainian bonds it bought to throw a lifeline to President Viktor Yanukovych. Ukraine should not pay the $3 billion. The United Kingdom should make the bonds unenforceable under English law. It took similar measures in 2003 to protect Iraq and in 2010 to protect heavily indebted poor countries from creditor lawsuits.

Russia and China: Who's the Boss in the Relationship Now?
Alexei Bayer (Globalist) Mar 14, 2014
While China performs as a responsible part of the global economy, Russia revels in its pariah status.

Japan’s pension giant: Risk on Economist Subscription Required
Economist Mar 15, 2014
The world’s largest pension fund is changing the way it invests, with big consequences for the market.

The Regulatory Confidence Cycle
Mark Roe (Project Syndicate) Mar 15, 2014
Late last month, the Federal Reserve released the transcripts of meetings held by the policy-setting Federal Open Markets Committee in 2008, during the run-up to the financial crisis. Unfortunately, many of those reading the transcripts appear to be missing the big picture.

Eastern European credit crunch and foreign bank funding
Erik Feyen, Raquel Letelier, Inessa Love, Samuel Munzele Maimbo and Roberto Rocha (VoxEU) Mar 15, 2014
Eastern Europe was hit especially hard by the credit crunch during the global financial crisis. This column presents new evidence suggesting that reliance on foreign funding was more important than foreign bank ownership per se in exacerbating the post-crisis credit contraction. These findings point to the need to put more emphasis on the discussion of bank business models, regulatory standards, and supervisory arrangements.

Un-American Tuna Wall Street Journal Subscription Required
wsj Mar 16, 2014
Why your kid can't get a tuna sandwich at school.

Why gaining from value investing is hard Financial Times Subscription Required
John Authers (FT) Mar 16, 2014
Famous style of investing influenced Warren Buffett but requires exhaustive research and offers fewer target shares in a bull market.

China's Struggle to Forget New York Times Subscription Required
Yu Hua (NYT) Mar 16, 2014
The slogans of the Mao era proclaimed an end to class society. Today it's back.

Welcome to the 19th Century Wall Street Journal Subscription Required
WSJ Mar 16, 2014
Putin and the new Bonapartes see a weak and retreating West.

Skilled immigration and US jobs: Firm-level evidence
William Kerr, William Lincoln & Sari Pekkala Kerr (VoxEU) Mar 16, 2014
Though skilled immigration is of great importance to the US, no consensus has been reached in the public discourse about its effects on citizen workers and economic growth. This column looks at a different perspective of this relationship. It explores the effect of skilled immigrants on the employment structures of US firms using employer-employee data. The results show the total skilled employment by the firm increases with increases in skilled immigrant employment. However, the employment expansion is greater for younger natives than for their older counterparts.

Growth and reserves: Impact in crisis times
Matthieu Bussière, Gong Cheng, Menzie D. Chinn & Noëmie Lisack (VoxEU) Mar 16, 2014
The financial crisis that swept the global economy at the end of 2008 provides a natural experiment to test the proposition that international reserves are useful during crises. This column presents cross-country evidence based on a panel of 112 emerging and developing countries. Countries with more reserves relative to short-term debt fared better.

Matteo Renzi: A young man in a hurry Financial Times Subscription Required
Guy Dinmore (FT) Mar 17, 2014
Italy’s 39-year-old prime minister has unveiled a dramatic plan to revive the country’s sluggish economy but critics claim his numbers do not add up.

China faces an unpalatable cure for debt Financial Times Subscription Required
Minxin Pei (FT) Mar 17, 2014
The day of reckoning has arrived. Beijing has two unpalatable options: prop up ailing borrowers or allow them to fail.

Fed drains punchbowl but others replenish Financial Times Subscription Required
James Paulsen (FT) Mar 17, 2014
Overall, monetary policy may be more accommodative today than it was when the Federal Reserve was expanding its quantitative easing programme.

Why Democrats Should Back the President on Free Trade Wall Street Journal Subscription Required
Mack McLarty (WSJ) Mar 17, 2014
Bill Clinton saw the promise of the global economy—and America reaped the benefits.

China's Threat to American Farm Exports Wall Street Journal Subscription Required
Henry I. Miller (WSJ) Mar 17, 2014
The ban on imports of a genetically engineered corn sends shock waves through U.S. agriculture.

Iran and the Rule of Law
J.D. Bindenagel (Globalist) Mar 17, 2014
To take its place on the global stage, Iran must learn the lessons of a 1992 terrorist trial in Germany.

China and Its Currency Grow Up
Jim O'Neill (Bloomberg View) Mar 17, 2014
China's new rule for permitted fluctuations in the renminbi shows its currency is becoming more normal.

Migration on the Move
Peter Sutherland and William Lacy Swing (Project Syndicate) Mar 17, 2014
Migration – when it is safe, legal, and voluntary – is the oldest poverty-reduction and human-development strategy. Fortunately, it seems that this long-ignored reality is finally sinking in, with world leaders signaling their willingness to include migration in the post-2015 development agenda.

Ukraine Versus the Vultures
Ngaire Woods and Taylor St John (Project Syndicate) Mar 17, 2014
Amid all of its other troubles, Ukraine cannot pay its creditors. Yet even the best efforts by the IMF, the US, and the European Union to restructure the country's debt will be hobbled by investment agreements that they themselves have pressed on Ukraine and many other emerging economies.

The Poverty of Renewables
Bjørn Lomborg (Project Syndicate) Mar 17, 2014
According to UN Secretary-General Ban Ki-moon, “Climate change harms the poor first and worst,” because the poor are the most vulnerable and have the least resources with which to adapt. But, because current policies to address global warming make energy much more costly, they harm the world’s poor much more.

Voters reward performance: Evidence from India
Poonam Gupta & Arvind Panagariya (VoxEU) Mar 17, 2014
Do voters care about economic outcomes? Evidence on this question, especially in the context of developing countries, is rather scant. This column reports the findings from analysis of the 2009 parliamentary elections in India. Voters favoured parties that delivered high growth in their states and rejected those that did not. The authors also find that voters preferred candidates who had served in the parliament before, were wealthy, educated, and affiliated with a large party.

Trans-Pacific Partnership: The economic impact
Cathleen Cimino & Gary Clyde Hufbauer (VoxEU) Mar 17, 2014
In an op-ed for the New York Times, Paul Krugman calls the Trans-Pacific Partnership (TPP) “No big deal”. This column looks at Krugman’s main arguments against the TPP. First, Krugman suggests spending political capital on domestic initiatives, and not on the TPP. Second, he argues that the pay-off from TPP will be trivial since tariffs are already low. The column points to a larger message in Krugman’s op-ed, namely that the era of globalization and policy-driven liberalisation is over.

Is there room for more than one international currency?
Livia Chitu, Barry Eichengreen & Arnaud Mehl (VoxEU) Mar 17, 2014
The dollar remains dominant in the global monetary system. The clearest sign for its prevailing status is the dollar’s role as an exclusive currency used in the global oil market. This column suggests that there is room for more than one international currency even in a market as homogenous as the oil one. This is consistent with the view that network increasing returns are not as strong as sometimes supposed, first-mover advantage is not everything, and incumbency is no guarantee for continued dominance.

Time for Fed tightening could be nigh Financial Times Subscription Required
Philipp Hildebrand (FT) Mar 18, 2014
If the labour market is indeed beginning to tighten, then wage growth will surely respond and the central bank will have to act.

China’s ‘Lehman moment’ is nothing like it Financial Times Subscription Required
Simon Rabinovitch (FT) Mar 18, 2014
Chinese companies face big challenges after a credit binge, but it is facile to think that they are headed for a replay of the 2008 financial crisis.

Turkey: The Erdogan-Gulen showdown Financial Times Subscription Required
FT Mar 18, 2014
Profiles of the two men locked in a conflict that threatens the legitimacy of the country’s government.

The Economic Roots of American Retreat Wall Street Journal Subscription Required
William A. Galston (WSJ) Mar 18, 2014
Enduring a jobless recovery has discouraged many from supporting a robust U.S. foreign policy.

Stress Tests Won't Prevent the Next Financial Crisis Wall Street Journal Subscription Required
Rosa Abrantes-Metz (WSJ)/I> Mar 18, 2014
Expected losses under invented scenarios tell us little about risk and reality.

Beijing's Money Moves Wall Street Journal Subscription Required
WSJ Mar 18, 2014
Deposit-rate reform counts for more than a wider yuan band.

High-Speed Traders Still Trading Faster than Low-Speed Traders
Matt Levine (Bloomberg View) Mar 18, 2014
If you co-locate your chair next to mine, you'll be able to read my posts literally minutes faster than anyone else. Fees are quite reasonable.

Misleading Indicators
Edward Jung (Project Syndicate) Mar 18, 2014
Reliance on GDP and other traditional indicators may be sabotaging the development of thriving innovation economies. While GDP measures the market value of all goods and services produced within a country, many stars of the digital age produce no goods and provide free services.

Rethinking the Monetization Taboo
Adair Turner (Project Syndicate) Mar 18, 2014
Now that the pace of the US Federal Reserve’s “tapering” of its asset-purchase program has been debated to death, attention will soon turn to prospects for interest-rate increases. But a far larger question looms: How will central banks return balance sheets swollen by unconventional monetary policy to “normal” levels?

Politics-Proof Economies?
Michael Spence and David Brady (Project Syndicate) Mar 18, 2014
Governments’ inability to act decisively on their economies’ growth, employment, and distributional challenges has emerged as a major source of concern worldwide. But, as a recent study has shown, there is little correlation between a country’s relative economic performance and how “functional” its government is.

How Measuring GDP Encourages Government Meddling
John P. Cochran (Mises Daily) Mar 18, 2014
In a review of Diane Coyle’s GDP: A Brief but Affectionate History, aptly titled “Measuring the Unmeasurable,” James Grant highlights many of the difficulties involved in aggregate statistical attempts to measure economic activity. Grant summarizes critical problems in one succinct sentence, “Imagine deciding which nation produces what in a global supply chain. Or correcting price for quality improvements. The mind boggles.”[1]

The returns to currency speculation: Evidence from Keynes the trader
Olivier Accominotti & David Chambers (VoxEU) Mar 18, 2014
John Maynard Keynes traded currencies using a discretionary and fundamentals-based strategy. This column shows that he underperformed rules-based carry, momentum and value strategies. The returns to these strategies in the 1920s and 1930s were time-varying and are in part explained by the contemporary limits to arbitrage. The excess returns might also represent compensation for exposure to the considerable macroeconomic volatility of the time.

Ensuring the European Resolution Fund is large enough
Thomas Huertas & María J Nieto (VoxEU) Mar 18, 2014
The European Resolution Fund is intended to reach €55 billion – much less than the amount of public assistance required by individual institutions during the recent financial crisis. This column argues that the Resolution Fund can nevertheless be large enough if it forms part of a broader architecture resting on four pillars: prudential regulation and supervision, ‘no forbearance’, adequate ‘reserve capital’, and provision of liquidity to the bank-in-resolution. By capping the Resolution Fund, policymakers have reinforced the need to ensure that investors, not taxpayers, bear the cost of bank failures.

Chinese internet: Mobile wars Financial Times Subscription Required
Charles Clover (FT) Mar 19, 2014
China’s big three online rivals are transforming inefficient sectors of the economy. But critics fear that they aim to monopolise all aspects of life.

A Modi win may make India more Chinese Financial Times Subscription Required
David Pilling (FT) Mar 19, 2014
The frontrunner to be the next Indian prime minister favours implementation over prevarication, and is more about making the economic pie bigger than slicing it up fairly.

Crimea fallout hits Moscow markets Financial Times Subscription Required
Patrick Jenkins (FT) Mar 19, 2014
There are parallels with the western banks that expanded in the run-up to the 2007-08 crisis on the basis of fickle financing.

South Africa's Squandered Promise Wall Street Journal Subscription Required
Robert I. Rotberg Mar 19, 2014
The post-Mandela era has been marked by corruption, crime and too few jobs. Elections in May offer hope.

A Gas Export Strategy Wall Street Journal Subscription Required
WSJ Mar 19, 2014
Opponents don't understand energy markets or price expectations.

Gulf Countries Should Refine Policies to Ensure Financial Stability
IMF Survey Mar 19, 2014
The experience of the boom and bust in 2008-09 demonstrates the vulnerability of the member countries of the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—to credit and asset price cycles, and makes macroprudential policies especially important, says IMF.

Why has the Eurozone bond market stabilised?
Yanis Varoufakis (Pieria) Mar 19, 2014
Europe’s apparent ‘stabilization’ can be pinned down to two factors.

Uncertainty and the Great Trade Collapse: New evidence
Dennis Novy & Alan Taylor (VoxEU) Mar 19, 2014
The recent global crisis hit output, but the decline in international trade was twice as big. Standard models of trade fail to account for the severity of the event. This column proposes a new model that argues the great trade collapse was due to uncertainty. The uncertainty lead firms to postpone orders. As a result, trade declined substantially more than production. Data from the US for the past 50 years show quantitatively large effects of uncertainty shocks on the trade.

EZ fiscal shock absorber: Lessons from insurance economics
Daniel Gros (VoxEU) Mar 19, 2014
Since the onset of the sovereign debt crisis, the argument for a system of fiscal transfers to offset idiosyncratic shocks in the Eurozone has gained adherents. This column argues that what the Eurozone really needs is not a system which offsets all shocks by some small fraction, but a system which protects against shocks which are rare, but potentially catastrophic. A system of fiscal insurance with a fixed deductible would therefore be preferable to a fiscal shock absorber that offsets a certain percentage of all fiscal shocks.

How to Sanction Russia Foreign Affairs Subscription Required
Lee S. Wolosky (FA) Mar 19, 2014
And why Obama's current strategy won't work.

The Dismal Art Recommended!
James Surowiecki (Democracy) Mar 19, 2014
Economic forecasting has become much more sophisticated in the decades since its invention. So why are we still so bad at it?

Pimco: A sovereign under siege Financial Times Subscription Required
Stephen Foley (FT) Mar 20, 2014
‘Bond King’ Bill Gross faces a stern test of leadership as the firm he founded seeks to regain investor confidence after a management upheaval.

Berlin needs a lead role on world stage Financial Times Subscription Required
Norbert Rottgen (FT) Mar 20, 2014
With close economic ties to Russia and an established relationship with Moscow comes great responsibility.

Failure to share Big Data imperils finance Financial Times Subscription Required
Gillian Tett (FT) Mar 20, 2014
An invaluable early warning system is beyond reach because countries do not trust each other.

The Responsible Way to Rein in Super-Fast Trading Wall Street Journal Subscription Required
Gary Cohn (WSJ) Mar 20, 2014
At Goldman Sachs, we would back these measures to limit the risk and instability that technology gains brought.

Sweatshops: A Way Out of Poverty
Benjamin Powell (Mises Daily) Mar 20, 2014
Sweatshops are part of the development process that leads to better conditions

China’s next challenge
Robert J. Samuelson (WP) Mar 20, 2014
Escaping the “middle-income trap.”

EU-US Trade Talks Press Forward as Leaders’ Summit Approaches
Bridges Weekly Trade News Digest, Volume 18, Number 10 Mar 20, 2014
EU and US negotiators met in Brussels last week for their fourth round of bilateral trade talks, which saw some signs of progress, albeit limited. Many observers had hoped to see some early indications on how difficult areas – such as the level of tariff elimination or harmonisation of regulations – might be resolved, given next week's bilateral leaders' summit on the trans-Atlantic talks.

UN Climate Talks on 2015 Deal Begin Ramping Up
Bridges Weekly Trade News Digest, Volume 18, Number 10 Mar 20, 2014
This year's UN climate negotiations kicked off again last week in Bonn, Germany with delegates dipping their toes into what is expected to become a torrent of negotiations over the coming year. Parties to the UN Framework Convention on Climate Change (UNFCCC) have targeted the December 2015 Conference of the Parties (COP) due to be held in Paris, France as the deadline for agreeing to the terms of a new global climate change treaty.

WTO Hears Appeals in Seal Ban Dispute
Bridges Weekly Trade News Digest, Volume 18, Number 10 Mar 20, 2014
The high-profile debate on the EU's seal products ban returned to the WTO this week, with the organisation's Appellate Body hearing appeals from Canada, Norway, and the EU on the subject. The case has received widespread notoriety both due to its emotive content and also since it deals with the thorny topic of how public morality goals relate to international trade rules.

ITA Talks Remain Stalled, with Some Eyeing APEC for Breakthrough
Bridges Weekly Trade News Digest, Volume 18, Number 10 Mar 20, 2014
Four months after talks were suspended, efforts to update the list of products covered in the WTO's Information Technology Agreement remain stalled. However, some participants – including the US – are now calling for a breakthrough in time for a May meeting of Asia-Pacific trade ministers.

Azevêdo: Consultations on Doha Work Plan Off to "Excellent Start"
Bridges Weekly Trade News Digest, Volume 18, Number 10 Mar 20, 2014
Initial consultations on a Doha work programme are off to a productive start, WTO Director-General Roberto Azevêdo reported to members last week. However, much remains to be done if the 159-member body is to have a plan by December for renewing the multilateral trade talks, now in their 13th year.

New Financing for Africa’s Roads, Rail Without High Debt
IMF Survey Mar 20, 2014
As Central African countries seek new sources of financing for infrastructure, policymakers will have to avoid high indebtedness, a conference in Cameroon hears. The event examines how to leverage existing financing and promote innovative alternatives.

Why Do High Frequency Traders Never Lose Money?
Matt Levine (Bloomberg View) Mar 20, 2014
I know there are people who do not believe that "liquidity provision" is a thing, but the people who pay for it seem to believe in it, so what does that tell you?

The Global Economy’s Tale Risks
Robert J. Shiller (Project Syndicate) Mar 20, 2014
Fluctuations in the world’s economies are largely due to the stories we hear and tell about them. In Japan, "Abenomics" has created a powerful narrative of positive change, whereas the stories being told in other advanced countries are far scarier.

South Korea’s Feminine Future
Lee Jong-Wha (Project Syndicate) Mar 20, 2014
After five decades of rapid economic progress, South Korea's potential for sustained growth is faltering, owing to its working-age population's imminent decline and rising emerging-market competition. In order to improve its prospects, South Korea must maximize its human-capital resources by boosting women's employment rate.

The great escape from death and deprivation
Angus Deaton (VoxEU) Mar 20, 2014
The world has become healthier and wealthier since 1960, as measured by life expectancy and GDP per capita. In this column Angus Deaton introduces his new book and argues that the world is indeed a better place than it used to be, albeit with big setbacks, and that progress opens up vast inequalities.

Bali tips balance for WTO Doha agenda
Roberto Azevedo (AT) Mar 21, 2014
Last year was a good one for the World Trade Organization, with overall trade growth recovering somewhat and 2013 culminating in the momentous Bali Package. And although there was a worrying rise in protectionism last year, 2014 still represents a chance to put the rest of the Doha agenda back on track.

New Way to Bet on Commodities: Just Bet on Commodities
Matt Levine (Bloomberg View) Mar 21, 2014
Two-way bets on natural gas, or the VIX, are a whole lot easier than trying to store natural gas, or the VIX for that matter. Where would you put the VIX?

The Wolves of Wall Street
Robert Skidelsky (Project Syndicate) Mar 21, 2014
As head of the brokerage firm Stratton Oakmont, Jordan Belfort fleeced investors of hundreds of millions of dollars in the early 1990’s. But Martin Scorsese’s recent film, based on Belfort's memoirs, does not do justice to all of the reputable investment banks that shorted the products they were selling.

Closing Africa’s Agricultural Gender Gap
Melinda Gates (Project Syndicate) Mar 21, 2014
Agriculture offers Africa its best opportunity to turn a vicious cycle of poverty into a virtuous cycle of development. But if Africa hopes to spark an agricultural transformation, countries will first need to remove one of the main barriers holding the sector back: a pervasive gender gap in farm productivity.

Historical lessons for TARGET imbalances
Michael Bordo (VoxEU) Mar 21, 2014
Since 2007, there has been a buildup of TARGET imbalances within the Eurosystem – growing liabilities of national central banks in the periphery matched by growing claims of central banks in the core. This column argues that, rather than signalling the collapse of the monetary system – as was the case for Bretton Woods between 1968 and 1971 – these TARGET imbalances represent a successful institutional innovation that prevented a repeat of the US payments crisis of 1933.

Internationalisation, innovation, and productivity of firms
Carlo Altomonte, Tommaso Aquilante, Gábor Békés and Gianmarco I.P. Ottaviano (VoxEU) Mar 21, 2014
Internationalisation and innovation policies are frequently considered to be key drivers of growth. This column documents a strong positive association between internationalisation, innovation, and productivity at the firm-level across seven European countries. This association continues to hold after controlling for country, size, industrial sector, and firm specific characteristics, with some evidence of causality running from innovation to internationalisation. The analysis suggests that policymakers should coordinate, if not integrate, innovation and internationalisation policies in order to boost productivity and growth.

The Euro Is Not Overvalued (Nor Is Any Other Currency)
Frank Hollenbeck (Mises Daily) Mar 22, 2014
A common argument for dumping the Euro is that it is overvalued, and that the ECB (European Central Bank) is unwilling to correct this so-called “problem.”

The limited economic impact of the US shale gas boom
Mathilde Mathieu, Oliver Sartor & Thomas Spencer (VoxEU) Mar 22, 2014
The US unconventional energy boom has reversed the decline of domestic production, lowered oil and gas imports, reduced gas prices, and created political space for tougher regulations on coal-fired power plants. This column argues that it is not a panacea, however. Even if current estimates prove accurate, the long-run benefits to the US economy will be relatively small. Improving energy efficiency and promoting low-carbon technologies will be just as important as before – especially for the EU, given its more limited known reserves of unconventional oil and gas.

Political roots of a rent-seeking racket Financial Times Subscription Required
Martin Sandbu (FT) Mar 23, 2014
An analysis of close ties between governments and bankers is a fine addition to standard economic models but leaves questions hanging.

Play the long game on sanctions Financial Times Subscription Required
Wolfgang Munchau (FT) Mar 23, 2014
The region should address its dependence on Russian energy and cash, and its policy towards its eastern neighbours.

Putin's Potemkin Economy Wall Street Journal Subscription Required
Ruchir Sharma (WSJ) Mar 23, 2014
There are few sources of income other than oil and gas, and wealthy Russians are moving $60 billion a year out of the country.

Back to realpolitik
Robert J. Samuelson (WP) Mar 23, 2014
History, culture religion and pride often trump economics.

How High-Speed Traders Are Like Fish
Mark Buchanan (Bloomberg View) Mar 23, 2014
High-frequency traders might actually help regular investors make better decisions.

Buy Sheep, Avoid Goats of Emerging Markets
A. Gary Shilling (Bloomberg View) Mar 23, 2014
Since the start of 2014, investors have fretted over emerging markets. And they should. Some have performed better than most; some should be avoided.

The Missing Shale Miracle
Nikos Tsafos (FA) Mar 23, 2014
Why cheap energy won't spark a U.S. manufacturing renaissance.

China must put reform pledges to the test Financial Times Subscription Required
Henry Paulson (FT) Mar 24, 2014
Whole parts of the economy remain protected and as a result Beijing forestalls entrepreneurship and innovation, and limits job creation.

Tranquil markets mask geopolitical risk Financial Times Subscription Required
Mohamed El-Erian (FT) Mar 24, 2014
Markets love consistent trends, and the pattern of quickly fading geopolitical disruptions has been profitable for some time, but risks are building.

Japanese debt: Still climbing Financial Times Subscription Required
Ben McLannahan (FT) Mar 24, 2014
‘Abenomics’ has shaken up stock and property markets, but JGBs have stayed calm. Critics warn that the country cannot ignore its debt mountain forever.

Congress Can Help the U.S. By Reforming The IMF Wall Street Journal Subscription Required
Christine Lagarde (WSJ) Mar 24, 2014
The past few years are a stark reminder why we need an international 'first responder' backed by ample resources.

Getting Emerging Markets' Goats
A. Gary Shilling (Bloomberg View) Mar 24, 2014
A guide to understanding which emerging-market countries are sheep -- those with well-managed economies -- and goats, with their poorly run economies.

Taiwan trade pact vital for growth
Dan Steinbock (AT) Mar 24, 2014
The occupation of Taiwan's legislative chambers by students protesting against the latest proposed trade pact with mainland China highlights the island's changing position in international trade and why it needs regional integration with China and emerging Asia.

Darkening in the East
Doug Noland (AT) Mar 24, 2014
Against a darkening geopolitical backdrop, all key indicators point to the beginning of the end to China's historic credit and economic bubbles. Although it appears controllable at the moment, recall subprime. This crisis is in the earliest phase.

Brazil-India partnership would be win-win
Abhismita Sen (AT) Mar 24, 2014
As BRICS partners and rising world powers, Brazil and India are characterized by a mix of astounding growth and lingering poverty and underdevelopment. By joining forces in areas as diverse as education, entertainment and disaster management, both countries can play to their strengths and shore up their weaknesses.

Lagarde Points to Next Steps in China’s Transformation
IMF Survey Mar 24, 2014
China could ensure more sustainable, higher-quality growth in future by unleashing the services sector, creating a modern, globally-integrated financial sector, and by adopting measures to safeguard the environment, says the head of the IMF.

Serious Sanctions on Russia: To Be Imposed or Threatened?
Gary Clyde Hufbauer (PIIE) Mar 24, 2014
How quickly should the West ratchet up sanctions on Russia following its annexation of Crimea? This debate is dividing experts in Europe and the United States. Some commentators and observers, such as my colleague Anders Åslund and the columnist Charles Krauthammer, argue that because Vladimir Putin has effectively been channeling Adolf Hitler and is planning an imminent invasion of eastern Ukraine, if not of Russian-speaking areas all over Europe, the strongest possible sanctions should be imposed immediately.

How Ukraine Can Use Sanctions to Counter Russia's Aggression
Anders Åslund (PIIE) Mar 24, 2014
With its annexation of Crimea, Russia has become a rogue state in international affairs. Russia appears certain to cause Ukraine great suffering, well beyond the annexation of Crimea, but Ukraine can also impose significant economic damage on Russia.

Europe: How to Stabilize Ukraine
Holger Schmieding (Globalist) Mar 24, 2014
Focusing on three things – jobs, trade and free travel – can work wonders.

Ukraine and the Crisis of International Law
Jeffrey D. Sachs (Project Syndicate) Mar 24, 2014
As frightening as the Ukraine crisis is, the more general disregard of international law in recent years must not be overlooked. Without diminishing the seriousness of Russia’s recent actions, we should note that they come in the context of repeated violations of international law by the US, the EU, and NATO.

Climate and Competitiveness
Thomas Fricke (Project Syndicate) Mar 24, 2014
As Europe’s debt crisis fades, another economic disaster seems to be looming – the price of energy. But are Europe’s highly ambitious climate policies – which seek to increase costs for “bad” energy sources – really destroying the continent’s industrial base, as critics claim?

The ECB should do QE via forex intervention
Jeffrey Frankel (VoxEU) Mar 24, 2014
The Eurozone needs to further ease monetary policy because under the current low inflation and high unemployment periphery countries need to suffer painful deflation. However, the ECB faces challenges other central banks do not face. This column proposes a way to overcome some of these hurdles. It argues that the ECB should buy US treasury securities, lowering the foreign exchange value of the euro. That would be the best way to restore the export sector of the periphery countries.

Stress Testing the Fed
Jens H.E. Christensen, Jose A. Lopez, and Glenn D. Rudebusch (FRBSF Economic Letter) Mar 24, 2014
The Federal Reserve has purchased a large amount of longer-term bonds since December 2008. While these purchases have helped support a strengthening economy, the Fed’s resulting financial position may incur significant declines in bond values and net income when interest rates rise. However, analyzing a range of possible future interest rate scenarios—and their associated probabilities—shows that potential losses associated with these declines are very likely to be manageable.

The Future of Europe
George Soros and Gregor Peter Schmitz (NYRB) Mar 24, 2014
Even with oil over $100 a barrel, Russia’s economy is not growing. Putin turned aggressive out of weakness. He is acting in self-defense. He has no scruples, he can be ruthless, but he is a judo expert, not a sadist—so the economic weakness and the aggressive behavior are entirely self-consistent.

China’s struggle for a new economy Financial Times Subscription Required
Martin Wolf (FT) Mar 25, 2014
The big question is whether corrective economic forces could overwhelm the ability of the authorities to manage the needed adjustments smoothly.

Get your finances in order and stop blaming Germany Financial Times Subscription Required
Otmar Issing (FT) Mar 25, 2014
The countries now in trouble have caused their own problems through their own policy mistakes.

How America Loses a Job Every 43 Seconds Wall Street Journal Subscription Required
Matthew J. Slaughter (WSJ) Mar 25, 2014
For every immigrant hired at technology companies, an average of five additional employees are added as well.

Obama's IMF Gambit Wall Street Journal Subscription Required
Mar 25, 2014
He tries and fails to jam Republicans on aid to Ukraine.

London loses top spot
Martin Hutchinson (AT) Mar 25, 2014
New York has supplanted London as the world's premier financial center. The difference at present is still small, but the change has been a long time coming - nearly three decades - and will not be reversed.

Striking a Balance: Risks and Opportunities in Emerging Market Debt
Francesc Balcells and Anton Dombrovsky (PIMCO) Mar 25, 2014
We believe the risk of a full crisis in emerging markets is greatly diminished as the initial conditions of such economies nowadays are quite different. Although there are vulnerable credits out there, the mark-to-market volatility in the financially strong emerging market economies can present advantages as longer-term fundamentals reassert themselves. By monitoring key triggers and employing a differentiated investment approach, investors may be able to take advantage of attractive valuations in emerging market debt.

Europe's Newest Steps Forward to Deal with Failing Banks
Jacob Funk Kirkegaard (PIIE) Mar 25, 2014
After 16 hours of marathon negotiations, the European Union struck a deal on March 20 to create a single resolution mechanism (SRM) and single resolution fund (SRF) for failing European banks. In theory, the contours of how to shut down such a bank are now clearer, but we still need the fine print.

Gross Domestic Wellbeing
Gus O'Donnell (Project Syndicate) Mar 25, 2014
Since the global financial crisis, the recognition has slowly taken hold that, during the boom that preceded it, economists were blind to the potential consequences of failure – and to the true cost of “success.” What is needed now is a new, more comprehensive policy target that emphasizes human wellbeing above output.

Kermit’s Bankers
Andrew Sheng (Project Syndicate) Mar 25, 2014
Sesame Street’s Kermit the Frog once lamented that “it’s not easy bein’ green.” Today, this sentiment is surprisingly relevant to the global economy, only it is becoming green that is the problem, owing to the challenge of redefining the metrics, institutions, and policies that govern how investors evaluate economic activities.

Deconstructing the Euro
João Ferreira do Amaral and others (Project Syndicate) Mar 25, 2014
The eurozone’s current travails stem from the fact that the euro’s exchange rate does not align with member countries' economic positions – a problem that cannot be resolved within the currency union. The only way to restore balance to Europe is to pursue a controlled segmentation of the eurozone, led by Germany and France.

Abenomics hinges on wages and taxes Financial Times Subscription Required
David Pilling (FT) Mar 26, 2014
The radical policy designed to banish deflation has been judged a qualified success but there are concerns that the effort will simply peter out.

How to make a fortune in value investing Financial Times Subscription Required
John Authers (FT) Mar 26, 2014
By combining two popular approaches to value investing, much of the associated risk is mitigated while still taking advantage of equity index gains.

Saudi Arabia: A kingdom on guard Financial Times Subscription Required
Roula Khalaf (FT) Mar 26, 2014
Alarmed by the rise of political Islam in the region, the House of Saud is taking an increasingly hardline approach against dissent at home and becoming more aggressive abroad.

Q&A: Why the Dollar Remains the Reserve Currency New York Times Subscription Required
David Barboza (NYT) Mar 26, 2014
Economists called it the “dollar trap.”

We Do Not Live in a Post-Scarcity World
William L. Anderson (Mises Daily) Mar 26, 2014
Jeremy Rifkin long has perfected the art of adding two and two and getting five.

Natural Resources Can Play Key Role in Inclusive Growth
IMF Survey Mar 26, 2014
If natural resource development is properly managed, the associated revenue can be used to speed up growth, reduce inequality, and lift people out of poverty.

The IMF Debacle: Congress Is Making It Harder, Not Easier, to Help Ukraine
Edwin M. Truman (PIIE) Mar 26, 2014
Once again, the US Congress has balked at approving the International Monetary Fund (IMF) reform package crafted by the United States in Korea four years ago. On Tuesday, March 25, the Democratic leadership in the Senate pulled the IMF reform provision from legislation intended to support Ukraine. In the process, they hung IMF Managing Director Christine Lagarde and Representative Maxine Waters (D-CA) out to dry, rebuffing their appeals on Tuesday to include the IMF in the legislation.

Two Shepherds, Two Cultural Revolutions?
Stephan Richter (Globalist) Mar 26, 2014
Pope Francis and China’s Xi Jinping face stunningly similar challenges.

The World's Poor Have Rights Too
Clive Crook (Bloomberg View) Mar 26, 2014
"The Tyranny of Experts" argues that to speed development the West must recognize the poor as individuals with rights.

Flying Blind in Venezuela
Raul Gallegos (Bloomberg View) Mar 26, 2014
Venezuela's restrictions on capital flows have taken a toll on airlines that serve the country and lead consumer to speculate in foreign exchange black markets.

Latin America’s Ukraine
Jorge G. Castañeda (Project Syndicate) Mar 26, 2014
Paradoxically, whereas the Western powers are probably powerless in Ukraine, Latin America’s major players could exert great influence in stopping the unfolding economic, political, and human-rights catastrophe in Venezuela. But doing so requires what most Latin American governments sorely lack: vision and courage.

Why Are Rich Countries Democratic?
Ricardo Hausmann (Project Syndicate) Mar 26, 2014
All advanced economies' governments are not only large and complex, comprising thousands of agencies that administer millions of pages of rules and regulations; they are also democratic – and not just because they hold elections every so often.

Infrastructure Unbound
Bertrand Badré (Project Syndicate) Mar 26, 2014
In emerging and developing economies, it is estimated that an additional $1-1.5 trillion in annual investment will be required through 2020 to meet growth targets. But simply increasing infrastructure investment is not enough to boost GDP and foster job creation.

The chartbook of economic inequality
Tony Atkinson & Salvatore Morelli (VoxEU) Mar 26, 2014
Inequality – long ignored – is now centre stage in debate about economic policy around the globe. This column introduces the Chartbook of Economic Inequality, a summary of long-run changes in economic inequality for 25 countries over more than 100 years.

Japan must cut depreciation allowances Financial Times Subscription Required
Andrew Smithers (FT) Mar 27, 2014
If Tokyo’s fiscal deficit is to be brought down, then the cash surplus generated by the corporate sector must be reduced too.

Protect Britain in a two-speed Europe Financial Times Subscription Required
George Osborne and Wolfgang Schäuble (FT) Mar 27, 2014
As the euro area continues to integrate, it is important that countries outside the eurozone are not at a systematic disadvantage in the EU.

Eurozone risks losing its good looks Financial Times Subscription Required
Ralph Atkins (FT) Mar 27, 2014
The surplus in the final quarter of 2013 hit almost 3% of gross domestic product – the highest since the euro was launched in 1999.

Reforms can bring prosperity to Ukraine Financial Times Subscription Required
Leszek Balcerowicz (FT) Mar 27, 2014
Kiev can release its great potential, just as Poland did in 1989, if it embarks on economic and political restructuring.

The best of times is making way for the worst Financial Times Subscription Required
Philip Stephens (FT) Mar 27, 2014
The great prosperity globalization has brought to the east and south sits beside the risks that accompany the passing of an old order.

How Putin May Save The Euro Zone Wall Street Journal Subscription Required
Austan Goolsbee (WSJ) Mar 27, 2014
The monetary union now seems more attractive to smaller countries with weak economies.

China’s Shadow Banking Malaise New York Times Subscription Required
Peter Boone and Simon Johnson (NYT) Mar 27, 2014
A severe slowdown in China’s economy would have a modest ripple effect, particularly on global commodity prices, but would not provoke a global crisis.

WTO Panel Finds Chinese Export Restrictions on Rare Earths Illegal
Bridges Weekly Trade News Digest, Volume 18, Number 11 Mar 27, 2014
A WTO dispute panel has found that China's restrictions on rare earths exports are in breach of global trade rules, in a highly-awaited ruling that focused heavily on how to balance natural resource policies with international trade obligations.

Leaders Call for Strong EU-US Trade Deal as Ukraine Crisis Deepens
Bridges Weekly Trade News Digest, Volume 18, Number 11 Mar 27, 2014
Efforts to forge a trans-Atlantic trade pact will lead to a substantial boost in growth and jobs while lessening Europe's economic dependence on Russia, leaders from the US and EU affirmed on Wednesday at a high-level summit in Brussels. Both sides also reiterated earlier promises not to weaken domestic environmental and consumer protections as a result of the bilateral trade pact.

Farm Subsidies: Cairns Group Paper Riles India, China
Bridges Weekly Trade News Digest, Volume 18, Number 11 Mar 27, 2014
An informal paper by the Cairns Group of farm exporters has found that trade-distorting agricultural subsidies in developed countries are four times those of poorer countries, as a share of the value of production. However, the paper, which was presented at an informal WTO meeting last week, has sparked concern from India and China, who question the methodology used to calculate their own farm support levels.

Australia-Japan Trade Talks Push for April Finish
Bridges Weekly Trade News Digest, Volume 18, Number 11 Mar 27, 2014
Ministerial-level meetings this week to advance negotiations for a Canberra-Seoul trade pact continued to struggle over automobile and agriculture tariffs, despite hopes that the two sides would be able to announce significant progress ahead of Australian Prime Minister Tony Abbott's visit to Japan next month.

The Ukrainian Crisis: A Question of the World’s Future
Anatol Zukerman (Globalist) Mar 27, 2014
What is the rational course to take? Should we continue to be driven by warmongers?

The Weakening Case for Loosening Money
Ramesh Ponnuru (Bloomberg View) Mar 27, 2014
The Fed's monetary policy has been too tight since the financial crisis. It should commit to stabilizing nominal spending.

Wanted in India: The World's Toughest Economist
Chandrahas Choudhury (Bloomberg View) Mar 27, 2014
India may be the world's most complex economic challenge. And the country is set to appoint a new finance minister.

The Monetary Cosmopolitans
Richard S. Grossman (Project Syndicate) Mar 27, 2014
In recent years, countries have increasingly turned to foreigners and people with considerable foreign experience to assume top positions at their central banks. In doing so, they are combating the "groupthink" that has long impeded policymakers' ability to develop innovative responses to new challenges.

The End of Chinese Central Planning
Stephen S. Roach (Project Syndicate) Mar 27, 2014
Since Deng Xiaoping’s reforms of the early 1980’s, senior Chinese policymakers have paid less and less attention to central planners’ numerical growth targets. Now they are close to taking the final step in the long journey to a market-based economy, by adopting a flexible framework in which GDP growth currently does not come first.

The Gulf States’ Widening Gulf
Bülent Aras (Project Syndicate) Mar 27, 2014
Saudi Arabia’s recent decision to withdraw its ambassador from Qatar has revealed the gravity of the crisis in the Gulf Cooperation Council, composed of the Kingdom’s most immediate neighbors. Indeed, Gulf politics is shifting toward a new balance in the wake of the Saudi-UAE rapprochement and the recent attempt to isolate Qatar.

The Importance of Being Boring
Simon Johnson (Project Syndicate) Mar 27, 2014
The IMF is an immensely useful organization, able to deliver substantial amounts of financial and technical assistance at short notice to almost any place in the world. It also has the great advantage of almost always being perceived as incredibly boring.

"Mind the Gap": Adapting to a Post-Crisis World in Transition
Virginie Maisonneuve (PIMCO) Mar 27, 2014
Barring any sharp deterioration in global geopolitical risk, the medium term outlook for equities is quite positive in an environment where we see subdued growth and inflation amid healing economies. From a markets standpoint, valuations are not very expensive - they're not cheap, but they're not expensive versus historical standards for the market overall. While stress points around geopolitics (Russia, elections in EM, maturing of the Chinese financial system) and new models (adapting to the outcomes of the post-transition world) will create uncertainty, they can provide fertile hunting ground for investors.

The Eiffel group: ‘A political community of the euro’
Agnès Benassy-Quéré & Shahin Vallee (VoxEU) Mar 27, 2014
The recent crisis has highlighted some problems in the current structure of the Eurozone, such as the lack of political integration. This column introduces the Eiffel group – a group of French experts – and its call for a ‘political community of the euro’. The economic and political rationales behind the proposal are discussed in detail. This proposal (also shared by experts in other countries) calls for a debate about the architecture and institutions underpinning the European Monetary Union.

What happiness conceals Recommended!
John Quiggin (Aeon) Mar 27, 2014
For years, economists have laboured on the riddle of happiness. If they studied misery instead, they might get somewhere

Big data: are we making a big mistake? Financial Times Subscription Required
Tim Harford (FT) Mar 28, 2014
Big data is a vague term for a massive phenomenon that has rapidly become an obsession with entrepreneurs, scientists, governments and the media.

All Roads Lead to Beijing
John Berthelsen (Asia Sentinel) Mar 28, 2014
China creates a huge economic fief.

Argentina Saves Some Money by Embracing GDP Reality
Matt Levine (Bloomberg View) Mar 28, 2014
Argentina issued some warrants that were like "we'll pay you 5% of whatever we say GDP growth is," and then they said GDP growth was really high, which was nice for the warrants. But false.

America’s Neglected Financial Children
Nancy Birdsall and Devesh Kapur (Project Syndicate) Mar 28, 2014
The US Congress recently rejected a modest appropriation that would have shored up financing for the IMF and enhanced emerging economies' role. While events in Ukraine may force Congress finally to agree to the funding increase, the question of why US lawmakers rejected the measure in the first place remains vital.

Self-Insurance or Self-Destruction?
Gene Frieda (Project Syndicate) Mar 28, 2014
Though the Federal Reserve is turning a blind eye to the spillover effects of its monetary policy, the impact on emerging economies has been profound. Will the foreign reserves that these countries have built up in recent years prove adequate to protect their financial systems, as liquidity flows back toward developed economies?

Running in Place
Andrés Velasco (Project Syndicate) Mar 28, 2014
Chile is a case of successful pro-market reform, argues Sebastián Piñera, who stepped down from the presidency on March 11. He is wrong: The Chilean economy has expanded; but growth has had little to do with the former president’s policies – and, worse, it is proving to be unsustainable.

Europe’s banking problems and secular stagnation
Jakob de Haan & Jan Willem van den End (VoxEU) Mar 28, 2014
While many economists argue that demand stimulus is needed, this column argues that supply side measures are necessary to avoid secular stagnation. In the Eurozone, it is necessary to clean up and strengthen the balance sheets of banks, which can kick-start the flow of new lending. The comprehensive assessment by the ECB is an important step in this direction.

Sustainable growth requires a long-term focus
Ian Goldin & Pascal Lamy (VoxEU) Mar 28, 2014
Excessive short-termism is always a problem for policy, but the Global Crisis has brought it sharply into focus. This column introduces a report that discusses how a shift to longer-term solutions is necessary and possible. A key message is that businesses as well as governments need to take a longer-term view. The report identifies ways to overcome the current impasse in key economic, climate, trade, security, and other negotiations.

New roles for technology: Rise of the robots Economist Subscription Required
Economist Mar 29, 2014
Prepare for a robot invasion. It will change the way people think about technolog.

Holding back half the nation Economist Subscription Required
Economist Mar 29, 2014
Women's lowly status in the Japanese workplace has barely improved in decades, and the country suffers as a result. Shinzo Abe would like to change that.

Thin capitalisation rules and corporate leverage
Jennifer Blouin, Harry Huizinga, Luc Laeven & Gaëtan Nicodème (VoxEU) Mar 29, 2014
Multinationals take advantage of heterogeneity in tax deduction rules by reallocating debt to high-tax countries. This reduces tax revenue and distorts the trade-off between debt and equity financing. Some countries have enacted thin capitalisation rules that restrict deductibility when the debt-to-leverage ratio exceeds a certain threshold. This column provides evidence that such rules are only effective when restrictions are automatic, rather than allowing for government discretion.

Sanctions: War by other means Financial Times Subscription Required
Geoff Dyer (FT) Mar 30, 2014
Financial restrictions on Russia reflect growth in the use of targeted measures in spite of a mixed record of success.

ECB talks too much and acts too little Financial Times Subscription Required
Wolfgang Munchau (FT) Mar 30, 2014
It’s showtime. Quantitative easing is the only big policy tool left to do the heavy lifting.

China’s debts do not presage implosion Financial Times Subscription Required
Peter Sands (FT) Mar 30, 2014
Equating China’s debt problem with what occurred in the US and Europe before the global financial crisis ignores some important differences.

Witness to the painful birth of a nation Financial Times Subscription Required
Katrina Manson (FT) Mar 30, 2014
A first-hand account offers an even-handed, insightful perspective on the creation of South Sudan and a bleak assessment of its future.

Cherry blossoms and a spring-loaded tax Financial Times Subscription Required
John Authers (FT) Mar 30, 2014
Japan is still the world’s third-largest economy, and its third-largest stock market. Any shift from the paralysis of the past two decades would have ramifications across the globe.

President Putin’s economic Achilles heel Financial Times Subscription Required
Gavyn Davies (FT) Mar 30, 2014
Whether the global financial markets could turn a blind eye to Russian troops in eastern Ukraine seems doubtful, but Putin must know that the Russia would be the economic loser.

What Europe Can Learn From the U.S. Bank Crisis Wall Street Journal Subscription Required
Benn Steil and Dinah Walker (WSJ) Mar 30, 2014
Stress tests will not be credible until the European Stability Mechanism can directly recapitalize banks.

A permanent slowdown?
Robert J. Samuelson (WP) Mar 30, 2014
The U.S.’s dynamic economy may be over.

Delivering the Eurozone ‘Consistent Trinity’
Marco Buti, Maria Demertzis & João Nogueira Martins (VoxEU) Mar 30, 2014
Although progress has been made on resolving the Eurozone crisis – vulnerable countries have reduced their current-account deficits and implemented some reforms – more still needs to be done. This column argues for a ‘consistent trinity’ of policies: structural reforms within countries, more symmetric macroeconomic adjustment across countries, and a banking union for the Eurozone.

Captured in a tiger hunt Financial Times Subscription Required
Jamil Anderlini and Lucy Hornby (FT) Mar 31, 2014
The demise of Zhou Yongkang, once one of the most powerful men in China, has as much to do with politics as with graft.

Private equity needs a less shadowy state Financial Times Subscription Required
Patrick Jenkins (FT) Mar 31, 2014
Policy makers need to think beyond the systemic risk in banking to calm what could possibly be another boom-and-bust in the making.

Reports of death of EM are exaggerated Financial Times Subscription Required
Russ Koesterich (FT) Mar 31, 2014
Volatility is par for the course with emerging markets, and many reasons that first attracted investors to the asset class still hold true.

China’s debts do not presage implosion Financial Times Subscription Required
Peter Sands (FT) Mar 31, 2014
Equating China’s debt problem with what occurred in the US and Europe before the global financial crisis ignores some important differences.

Pakistan Punts on India Trade Financial Times Subscription Required
WSJ Mar 31, 2014
Another delay in granting 'most-favored-nation' status as promised.

Why Key Long-Term Trends Matter to Stock Pickers
Virginie Maisonneuve (PIMCO) Mar 31, 2014
The combination of demographic changes, climate change and the ongoing shift in emerging markets over the next 30 years will have long-term consequences for supply and demand factors and business sustainability for many companies. The impact of these long-term trends must not be underestimated. It is crucial for equity investors to not only be attuned to them, but also to understand how companies are adapting to the shifts in the global corporate operating environment.

Let them eat cake! IMF the equality champion?
Bretton Woods Observer Mar 31, 2014
The IMF released papers accepting the case against inequality, however it shows no indication of changing its demands upon borrowing countries.

Ukraine Isn't Worth Another Cold War
Pankaj Mishra (Bloomberg View) Mar 31, 2014
The one thing that is certain to keep Putin in power longer, as well as weaken his opponents, would be a Western overreaction like those of the Carter and Bush administrations in 1979 and 2001.

Forget Bitcoin, African E-Money Is the Currency-Killer
Leonid Bershidsky (Bloomberg View) Mar 31, 2014
An e-money system that originated in Kenya is now spreading to Asia and Eastern Europe. The rich world should take notice: It is a more serious revolution than Bitcoin.

Big Banks Benefit From Government Subsidies
IMF Survey Mar 31, 2014
Reforms since the global financial crisis have reduced, but not eliminated the implicit government subsidy afforded to banks considered “too important to fail” because their failure would threaten the stability of the financial system.

Emerging Markets Can Manage Evolving Mix of Global Investors
IMF Survey Mar 31, 2014
The mix of investors in emerging market stocks and bonds has evolved considerably over the past 15 years, which has made capital flows and asset prices in these countries more sensitive to events outside their own borders, according to new research from the International Monetary Fund.

The Changing Face of Global Risk
Nouriel Roubini (Project Syndicate) Mar 31, 2014
The world’s economic, financial, and geopolitical risks are shifting. But, as in the run-up to the global financial crisis in 2008, investors seem unable to estimate, price, and hedge tail risks properly.

Will Vladimir Putin Bolster the Eurozone?
Jean Pisani-Ferry (Project Syndicate) Mar 31, 2014
Jacek Rostowski, Poland’s finance minister until last November, recently suggested that Russian President Vladimir Putin would not have dared to annex Crimea if he had not observed Europe agonizing over a solution to the euro crisis. Is Rostowski right?

A Healthy Path to Chinese Consumption Growth
Martin Feldstein (Project Syndicate) Mar 31, 2014
China’s economic policymakers want to shift the country’s production away from exports and heavy industry, and to increase the share of consumption in GDP. A relatively simple institutional change could do much to promote the latter goal.

Managing Climate Risk
Chris Field and Vicente Barros (Project Syndicate) Mar 31, 2014
Though not all of the future consequences of climate change are known, the range of realistic outcomes is deeply worrying. That is why the latest report from the Intergovernmental Panel on Climate Change explicitly frames the issue as a risk-management challenge.

The price of political uncertainty
Bryan T. Kelly, Lubos Pastor & Pietro Veronesi (VoxEU) Mar 31, 2014
Despite obvious ties between political uncertainty and financial markets, the nature of this connection has not been studied in detail. This column describes a theoretical framework for evaluating the influence of political uncertainty on financial markets. Political uncertainty commands a risk premium, especially when the economy is weak. By raising firms’ cost of capital, it depresses investment and real activity. Furthermore, by raising risk premia, political uncertainty destroys market value.

Fiscal adjustment, growth, and credit constraints
Emanuele Baldacci, Sanjeev Gupta & Carlos Mulas-Granados (VoxEU) Mar 31, 2014
The recent debate on the link between austerity and growth has focused on the short run. This column discusses recent research into the link between fiscal consolidation and medium-term growth under different financial conditions. If credit is not available to consumers and investors, private demand is less able to compensate for cutbacks in public demand, so large spending cuts can have a negative effect on growth. Difficult financial conditions probably explain why fiscal adjustments that worked in the 1990s have not produced similar beneficial effects on growth in recent years.

Forces of Divergence
John Cassidy (New Yorker) Mar 31, 2014
Is surging inequality endemic to capitalism?

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