News & Commentary:

Articles/Commentary

Own the Goals
John W. McArthur (FA) Apr 1, 2013
Since their inception in 2000, The Millennium Development Goals have revolutionized the global aid business, using specific targets to help mobilize and guide development efforts. They have encouraged world leaders to tackle multiple dimensions of poverty simultaneously and provided a standard for judging performance. As their 2015 expiration looms, the time has come to bank those successes and focus on what comes next.

The City and Europe: Ties that bind
John Thornhill and Patrick Jenkins (FT) Apr 1, 2013
Pressure for the City to switch its focus from the eurozone to emerging markets is building but divorce from the EU would harm both parties.

Questions for the world’s next trade chief
Robert Zoellick (FT) Apr 1, 2013
The WTO is at risk of being pushed aside. The action is shifting to other venues, such as the US-EU trade negotiation.

Oil demand is set to fall in the age of gas
Seth Kleinman (FT) Apr 1, 2013
Long-held beliefs about energy demand and prices are being turned on their head by fracking and fuel-efficiency measures.

China left out of Obama free trade party
Geoff Dyer (FT) Apr 1, 2013
Washington is negotiating with the EU and states in the Asia-Pacific region. It hopes to establish standards that Beijing would be obliged to respect.

The Global Economy on the Fly
Nouriel Roubini (Project Syndicate) Apr 1, 2013
In a fragile global environment, has America become a beacon of hope? While the US is experiencing several positive economic trends, Europe continues to stagnate, and China will be vulnerable to a hard landing in 2014 unless its new leaders accelerate the pace of reform.

A Pacific Island Prefers Chinese Investment to U.S. Welfare
Neil Mellen (WSJ) Apr 1, 2013
For decades, American aid did little but promote dependency. Now here comes a Chinese entrepreneur.

Unconventional Monetary Policy and the Dollar
Reuven Glick and Sylvain Leduc (FRBSF) Apr 1, 2013
Although the Federal Reserve does not target the dollar, its announcements about monetary policy changes can affect the dollar's exchange value. Before the 2007-09 financial crisis, the dollar's value generally fell when the Fed lowered its target for the federal funds rate. Since the crisis, the Fed's announcements of monetary policy easing through unconventional means have had similar effects on the dollar's exchange rate.

Survival of the Brokest in Cyprus Bailout
Jonathan Weil (Bloomberg) Apr 1, 2013
Just when it looked like the banking crisis in Cyprus couldn't get any weirder, here's another odd twist: The broke are buying the broke.

Cyprus’s Dangerous, Necessary Capital Controls
Bloomberg View Apr 1, 2013
Picture not being able to cash a check, transfer money electronically or withdraw more than $385 a day from your bank. Or imagine being searched by airport gendarmes making sure you aren’t taking more than $3,800 of your own money out of the country.

The Euro Can’t Afford Dijsselbloem’s Rookie Mistakes
Melyvn Krauss (Bloomberg) Apr 1, 2013
How is it that a man like Jeroen Dijsselbloem, with no knowledge of or experience in financial markets, can get appointed to lead the euro-area group of finance ministers, one of the most influential and sensitive jobs in Europe?

Asia royalty rises provoke investor fury
Jeremy Grant (FT) Apr 2, 2013
Dramatic royalty hikes are causing a lather as they are seen as a disguised attempt to remove funds from emerging markets divisions.

Why China’s economy might topple
Martin Wolf (FT) Apr 2, 2013
As the experience of Japan has shown, managing a shift from a high-growth model to a lower-growth model is very tricky.

Can We Feed the World?
Gordon Conway (Project Syndicate) Apr 2, 2013
Despite recent agricultural advancements, chronic hunger remains pervasive, particularly in developing countries. Only by taking concerted action to bolster innovation, strengthen market linkages, support smallholder farmers, and encourage visionary political leadership, can we guarantee food security for all.

The IMF Shouldn’t Abandon Austerity
Anders Aslund (Bloomberg) Apr 2, 2013
For years, the International Monetary Fund helped to ensure global financial stability. Lately it has changed its mind on what used to be a core principle -- and, strangely enough, it appears to have done so on the basis of a single far-from-convincing working paper.

Algeria: A giant afraid of its shadow
Borzou Daragahi (FT) Apr 3, 2013
The country, a north African powerhouse, has been reluctant to flex its muscle in the region despite the turmoil surrounding it.

New orthodoxy means EM currency gains
Andreas Utermann (FT) Apr 3, 2013
New set of norms at central banks and how they deal with inflation has implications for investors in the bond, equities and currency markets.

Capitalism's Corruptions
Daniel Henninger (WSJ) Apr 3, 2013
On capitalism, Pope Francis, Barack Obama and François Hollande aren't singing from the same hymnal.

So Much for the Libor Gold Rush
WSJ Apr 3, 2013
In addition to huge quantities of high dudgeon, the Libor interest-rate fixing scandal produced a huge legal gold rush: By some estimates, private claims against the banks were set to reach $176 billion.

Crisis averted or crisis created?
Robert J. Samuelson (WP) Apr 3, 2013
Economic policies may lead to future problems.

Save more to improve infrastructure in Latin America and the Caribbean
Eduardo Cavallo (VoxEU) Apr 3, 2013
Latin America and the Caribbean have less infrastructure than the rest of the world. What they have is also of much poorer quality. This column argues that to reap the rewards of good infrastructure, Latin American and Caribbean countries must increase both investment and saving over the long-term by creating institutional capacity, strengthening the rule of law, and building stable macroeconomic-policy frameworks. It won’t be easy.

The Meaning of Cyprus
Daniel Gros (Project Syndicate) Apr 3, 2013
The crisis in Cyprus represents an extreme and special case in many respects. But the way that the problem arose, and the solution that was finally adopted, is likely to have very important consequences for the way that Europe addresses its banking problems.

Asia’s Resource Scramble
Brahma Chellaney (Project Syndicate) Apr 2, 2013
Asia is the world’s most resource-poor continent, and its overexploitation of the resources that it does possess has created an environmental crisis that is contributing to regional climate change. This could have significant implications for Asia’s ostensibly unstoppable rise – and thus for the West’s supposedly inevitable decline.

BRICS Without Mortar
Joseph S. Nye (Project Syndicate) Apr 3, 2013
The recent BRICS summit in South Africa, with its announcement of plans for a new development bank, appeared to herald the group's transformation from a catchy acronym coined by investors into a viable organization. But the five BRICS countries remain too politically and economically diverse to act in a unified manner.

Income and schooling
Markus Brückner & Mark Gradstein (VoxEU) Apr 4, 2013
Average income per capita is strongly correlated with more schooling, but this relationship is more complex than it appears. This column presents new research showing that a large part of the correlation is attributed to the causal effect of economic prosperity on the formation of human capital via schooling.

Asia’s SWFs must shed political shackles
Henny Sender (FT) Apr 4, 2013
Investment considerations rather than political ones should be paramount in running North Asia’s sovereign wealth funds, says Henny Sender

Unfair Trade
Amrita Narlikar and Dan Kim (FA) Apr 4, 2013
Despite the claims of its champions, the fair-trade movement doesn't help alleviate poverty in developing countries. Even worse, it is just another direct farm subsidy of the kind most conscientious consumers despise. In the long term, the world needs free trade, not fair trade.

Where the Yangtze meets the Congo
Brendan P O'Reilly (AT) Apr 4, 2013
Expectations that China is baiting a neo-colonial trap in Africa ignore Beijing's pledges that economic and cultural relations rest on an equal plain, and that burgeoning ties were built on mutual anti-Western contempt. As European diplomats wring hands over no-strings aid and human rights, Africa and China can reflect on a decade that's seen the continent experience its fastest growth in history.

The Long Mystery of Low Interest Rates
Kenneth Rogoff (Project Syndicate) Apr 4, 2013
As policymakers and investors continue to fret over the risks posed by today’s ultra-low global interest rates, academic economists continue to debate the underlying causes. While everyone accepts that a global savings glut is at the root of the problem, no one has provided a convincing explanation of what, exactly, is driving it.

Europe’s Perpetual Crisis
Yannos Papantoniou (Project Syndicate) Apr 4, 2013
The Cyprus bailout deal is a watershed in the unfolding eurozone crisis, but imposing losses on banks’ depositors violates the deposit-insurance guarantee that forms part of the proposed European banking union, while the imposition of capital controls further erodes the monetary union’s foundations. So, is Europe chasing its tail?

A banking union for the Eurozone
Giovanni Dell'Ariccia, Rishi Goyal, Petya Koeva-Brooks & Thierry Tressel (VoxEU) Apr 5, 2013
The crisis has highlighted the need for, and difficulties with, a Eurozone banking union. This column argues that, to make a union, you need three crucial ingredients: common supervision, a single resolution mechanism, and common safety nets. The power to control and the resources to rescue must work in parallel. Eurozone leaders have taken the first critical steps, but further progress is needed to strengthen the financial architecture of the single currency.

Taiwan tries its luck with free-trade zones
Jens Kastner (AT) Apr 5, 2013
Taiwan will soon establish six free-trade zones, a prelude to numerous others, in a bid to boost investment from overseas and compete more effectively with rival South Korea. The move is backed by a raft of reforms that perhaps most crucially will permit mainland Chinese involvement.

Seven Dumb Things Bankers Say
Mark Whitehouse (Bloomberg) Apr 5, 2013
Many of the arguments used to justify the size of the largest U.S. financial institutions simply don’t stand up to scrutiny.

How the South Sea Bubble Created U.K.'s Modern Monarchy
Carolyn Harris (Bloomberg) Apr 5, 2013
The bubble of 1720 precipitated England’s first stock-market crash. In August of that year, shares in the South Sea Company reached a peak of 1,000 pounds and dropped to 150 pounds by the end of September.

A world of cheap money
Economist Apr 6, 2013
The Federal Reserve is making a better job of it than the European Central Bank.

Buttonwood: Where did all the money go?
Economist Apr 6, 2013
As Cypriots are discovering, wealth can prove to be illusory

Financial crises: Questions and lessons
Stijn Claessens & M Ayhan Kose (VoxEU) Apr 7, 2013
Recent financial crises have understandably renewed academic interest in properly understanding their causes and consequences. This column surveys a rapidly growing literature. Although we rudimentarily understand the main types of crisis, their main explanatory factors, and the real and financial sector implications, there remain a number of important open questions for future research.

Beware of Economists Peddling Elegant Models
Mark Buchanan (Bloomberg) Apr 7, 2013
Mathematics can be beguilingly elegant. It can also be dangerous when people mistake its elegance for truth.

Why Rescue Fragile Banks? Outsource Them Instead
Joshua Rosner (Bloomberg) Apr 7, 2013
Executives of the largest U.S. banks warn that efforts to make the financial system safer will harm their global competitiveness. They conjure a world in which foreign institutions, supported by government subsidies, dominate the business of providing banking services to multinational corporations.

Why Making Europe German Won’t Fix the Crisis
Ivan Krastev and Georgi Ganev (Bloomberg) Apr 7, 2013
Most people see Europe’s economic crisis as a cautionary tale of good and bad policy making, in which fiscally prudent countries, such as Germany, remain stable, while reckless ones, such as Greece, unravel.

This is a golden age of global growth
Arvind Subramanian (FT) Apr 7, 2013
What we are seeing, despite the crises, is convergence with a vengeance. An unequal world is becoming less so.

An optimist’s view from the edge of the abyss
Ralph Atkins (FT) Apr 7, 2013
Ian Goldin’s insider’s view depicts a world as endowed as it is endangered by rapid integration.

Post-industrial myths
Robert J. Samuelson (WP) Apr 7, 2013
The U.S. still makes plenty of things.

Europe welcomes Gulf funds
Ardeshir Ommani (AT) Apr 8, 2013
Plans by Qatar to launch a US$100 billion sovereign wealth fund to invest in European construction throw a harsh spotlight on economic prospects of the Arab world, including some of the world's highest income inequality and unemployment rates. European support for the pact at a high level suggests the North Atlantic Treaty Organization has agreed to commit itself to protecting the rule of the emir in return for geopolitical and economic support.

Is more finance better? Disentangling intermediation and size effects of financial systems
Thorsten Beck, Hans Degryse & Christiane Kneer (VoxEU) Apr 8, 2013
Growing the financial sector was viewed as a viable 21st-century competitiveness policy for small, agile nations in the 2000s. Things have changed. This column reviews the empirical literature arguing for a distinction between two roles: finance as intermediation or facilitator, and finance as a growth sector in itself. Evidence suggests that, for rich nations, finance stimulates growth but makes it more volatile, whereas for developing nations its function as a facilitator raises long-term growth and reduces volatility.

Three New Lessons of the Euro Crisis
Arvind Subramanian (Project Syndicate) Apr 8, 2013
While some observers argue that the key lesson of the eurozone’s baptism by fire is that greater fiscal and banking integration are needed to sustain the currency union, many economists pointed this out even before the euro’s introduction. The real lessons of the euro crisis lie elsewhere – and they are genuinely new and surprising.

Abenomics and Asia
Lee Jong-Wha (Project Syndicate) Apr 8, 2013
Japanese Prime Minister Shinzo Abe’s economic agenda seems to be working for his country. The question now is whether Abenomics can achieve its goals without destabilizing the world economy, especially neighboring Asian economies.

India’s Patently Wise Decision
Joseph E. Stiglitz and Arjun Jayadev (Project Syndicate) Apr 8, 2013
The Indian Supreme Court’s refusal to uphold the patent on Gleevec, the blockbuster cancer drug developed by the Swiss pharmaceutical giant Novartis, is good news for many of those in India suffering from cancer. If other developing countries follow India’s example, it will be good news elsewhere, too.

Days of inflation targeting are numbered
Ian Harnett and David Bowers (FT) Apr 8, 2013
The days of inflation targeting are numbered and the great rotation is likely to be less about asset allocation and more about sectors.

Thatcher Policies Still Resisted by Europe
John F. Burns & Alan Cowell (NYT) Apr 8, 2013
Margaret Thatcher's conservative prescriptions for her country's economy have never found fertile soil on the Continent, not even amid a gloom at least as dark as that of '70s Britain.

BRICS challenge IFIs: Out of the frying pan into the fire?
Bretton Woods Update No. 85 Apr 8, 2013
Large middle-income countries jointly initiated alternatives to the World Bank and IMF in March, but advocates are not satisfied with either set of institutions. While challenge to the IMF has been welcomed, civil society actors fear that a new development bank would serve "vested interests" and could lead to "exploitation".

New World Bank strategy accused of being "unambitious" and "cosmetic"
Bretton Woods Update No. 85 Apr 8, 2013
World Bank president Jim Yong Kim's new overarching strategy on ending absolute poverty and creating shared properity elicits criticism for ineffectively tackling inequality and sustainability.

US deadlock stalls IMF governance reform
Bretton Woods Update No. 85 Apr 8, 2013
The IMF governance debate goes beyond the mathematics of voting shares and representation, bringing to the fore critical questions about the Fund's legitimacy.

IFIs on capital flows: new tune, same song?
Bretton Woods Update No. 85 Apr 8, 2013
While the IMF-supported banking sector restructuring in Cyprus includes a strict set of restrictions on capital movements, the World Bank and IMF are failing to embrace a more pragmatic approach to capital account regulation.

G20 working on international financial architecture, while the IMF "to bury its head in the sand"?
Bretton Woods Update No. 85 Apr 8, 2013
The G20's agenda on the international financial architecture looks to tackle sovereign defaults, but not 'currency wars'.

Funny money and super-rich
Martin Hutchinson (AT) Apr 9, 2013
Contrary to the left's fond belief, the increasing inequality and the crass behavior of the super-rich are responses not to inadequate levels of taxation but to two decades of monetary policy that has imposed negative real interest rates on the world economy. High tax rates only cement the current wealth structure in place.

Taiwan: Time to change gear
Sarah Mishkin and David Pilling (FT) Apr 9, 2013
As growth stalls and reliance on China grows, the country must reform to preserve its status as one of Asia’s successes.

Prosperity requires more than rule of law
John Kay (FT) Apr 9, 2013
When China asks how to establish the institutions to support a stable, wealthy economy, it is not enough to reply ‘property rights’.

China is still learning to be a regulator
Simon Rabinovitch (FT) Apr 9, 2013
China’s inexperience and capacity constraints are almost as big a shortcoming as its bias against foreign companies. It is new to corporate regulation.

An Oldie: The 'Offshore' Witch Hunt
Holman Jenkins (WSJ) Apr 9, 2013
What public interest is served by invading the financial privacy of innocent citizens?

Is the Fed Blowing a New Housing Bubble?
Edward Pinto (WSJ) Apr 9, 2013
Stagnant real incomes suggest that rising home prices reflect artificially low interest rates.

Germans Are Poor and Italians Are Frugal. Huh?
Jack Ewing (NYT) Apr 9, 2013
A survey of European household debt and wealth turns up some surprising results but a caveat is in order.

Low-Income Countries Show Comeback in Growth Performance
IMF Survey Apr 9, 2013
Low-income countries have bounced back in the past two decades. Analysis in the IMF’s latest World Economic Outlook (WEO) suggests that dynamic low-income countries are on a stronger economic footing today than before the 1990s, and therefore better placed to stay on course.

Inflation Likely to Remain Stable, IMF Study Concludes
IMF Survey Apr 9, 2013
In contrast to previous recessions, inflation has not fallen sharply during the Great Recession, and it is unlikely to spike as the recovery strengthens, according to a new study by the IMF. There is little risk of monetary policy repeating the mistakes of the 1970s and igniting stagflation.

The Global Growth Quest
Mohamed A. El-Erian (Project Syndicate) Apr 9, 2013
The last few years have highlighted the declining potency of long-standing growth models. Moreover, the search for more robust growth models will take much longer and be more complicated than many recognize – especially as the world economy pivots away from unfettered globalization and high levels of leverage.

Germany’s Choice
George Soros (Project Syndicate) Apr 9, 2013
Contrary to popular opinion in Germany and elsewhere, the euro crisis – for which Germany is disproportionately responsible, owing to its dominant position – is far from over. Despite the complex political and economic origins of Europe’s current malaise, the solution can be summed up in one word: Eurobonds.

Cyprus Can Save Itself by Fleeing the Euro
Megan Greene (Bloomberg) Apr 9, 2013
Cypriots sitting in the cafes here on Nicosia’s Ledra Street are asking one another if there isn’t an alternative to their island’s bailout.

The Swiss Miracle?
Roland Benedikter and Lukas Kaelin (FA) Apr 9, 2013
The whole of Europe seems to be in economic and political crisis. But there is a small area of calm at the continent's core: Switzerland. Although much of what makes the country successful would not translate to the rest of Europe, the parts of its political framework that encourage popular legitimacy would -- and they would go a long way toward solving other European governments' problems.

The Asian Noodle Bowl when preferences are underused
Jayant Menon (VoXEU) Apr 10, 2013
So far, research on the impacts of free trade agreements in east Asia assume the full utilisation of preferences. This column argues that newer evidence suggests that this assumption is made in error: estimated uptake is particularly low in east Asia. If we assume a more realistic utilisation rate in estimating impacts, results suggest that actual utilisation rates significantly diminish the benefits from preferential liberalisation, but in a non-linear way. In the absence of Doha, the multilateralisation of preferences, even without reciprocity, is the practical route that is most likely to deliver the greatest benefits to WTO members.

Measuring the clarity of central-bank communication
Bulír, A., M. Cihák & D-J. Jansen Apr 10, 2013
Quality, clear communication is a very powerful tool for central banks because it influences expectations. This column presents new research on central-bank communications, using a formal measure of clarity – the ‘Flesch-Kincaid grade level’. The picture is varied: there are significant and persistent differences in clarity over time and across countries. However – and worryingly – the financial crisis is associated with unclear communication for some central banks.

How the East Was Won
Daniel Henninger (WSJ) Apr 10, 2013
Because Thatcher and Reagan dissented from the orthodoxies of their time, the world's people are freer.

Scapegoating Germany is easy but wrong
Marcel Fratzscher (FT) Apr 10, 2013
European governments need to convince their citizens that fundamental changes are necessary and will be fruitful.

EMs must respond to US industrial revival
Manoj Pradhan (FT) Apr 10, 2013
The shale gas ‘revolution’, a remarkable story, is already making the US more competitive, forging strong reindustrialisation.

Powers on the Mend
Ian Bremmer and David Gordon (NYT) Apr 10, 2013
Both China and the United States are bouncing back, opening the way for strong long-term relations.

The keys to a knowledge economy
Mark Zuckerberg (WP) Apr 10, 2013
Immigrants can help take our nation to new heights — if we let them.

The Use and Abuse of Monetary History
Barry Eichengreen (Project Syndicate) Apr 10, 2013
The Federal Reserve and the European Central Bank have been invoking specific historical analogies to defend their monetary-policy approaches. But, in appealing to events that are seared into popular consciousness, officials often fail to test their analogies' "fitness" with current conditions, leading to serious policy distortions.

The Two Innovation Economies
William Janeway (Project Syndicate) Apr 10, 2013
For 250 years, technological innovation has driven economic development. But the economics of innovation are very different for those at the frontier and followers who are striving to catch up.

Innovation in Development Finance
Jomo Kwame Sundaram (Project Syndicate) Apr 10, 2013
More than four decades ago, the world’s wealthiest countries pledged that at least 0.7% of their GDPs would be devoted to official development assistance. Although fewer than a half-dozen countries have met this goal, new financing schemes could close the gap between promises and reality.

What the World Needs from the BRICS
Dani Rodrik (Project Syndicate) Apr 10, 2013
It can be cause only for celebration that the world’s largest developing economies are holding regularly meetings and establishing common initiatives. Nonetheless, it is disappointing that Brazil, Russia, India, China, and South Africa have chosen to focus on infrastructure finance as their first major area of collaboration.

Germans Are Poorest in the Euro Area. Really?
Megan Greene (Bloomberg) Apr 10, 2013
With a title like “The Eurosystem Household Finance and Consumption Survey," the European Central Bank’s latest piece in its Statistics Paper Series doesn't sound like a page-turner. It has received a lot of attention, though, because of its conclusion that the poorest households in the euro area are German.

Thatcher, Merkel and the Euro
Holger Schmieding (Globalist) Apr 10, 2013
What legacy did Britain's "Iron Lady" leave for Europe's crisis-stricken countries?

Global Investing in 2013: Policy Dominance, Active Management and a New Paradigm in Currencies
Scott Mather (PIMCO) Apr 10, 2013
With policies and politics driving markets more than fundamentals, active management is critical. We expect that the impact of ongoing global policy experimentalism on real economic growth and financial markets will likely vary substantially from country to country, creating both risks and opportunities. With flexible, active global strategies investors can potentially benefit from a broader opportunity set and the ability to go off benchmark in an effort to both avoid risks and tap opportunities.

Is the Federal Reserve breeding the next financial crisis?
Ambrogio Cesa-Bianchi & Alessandro Rebucci (VoxEU) Apr 11, 2013
Many economists think that the US Federal Reserve’s loose monetary stance in the 2000s fuelled the US housing bubble. Is the Fed thus responsible for the Global Crisis? This column discusses evidence suggesting that monetary policy was, in fact, not to blame. Rather, it was the absence of an effective regulatory function that created the mess we’re in now. It is not fair to blame the Great Recession only on the Fed’s monetary-policy stance nor is the Fed now breeding the next US financial crisis.

Full Article: Distorted beliefs and the financial sector
Ing-Haw Cheng, Sahil Raina & Wei Xiong (VoxEU) Apr 11, 2013
The subprime crisis narrative focuses on incentives: ‘they knew it was risky, but didn’t care’. This column argues in favour of a more nuanced explanation, that distorted beliefs also mattered. An analysis of personal home transactions by mid-level managers in the mortgage-securitisation business shows that they increased their personal housing exposure during the boom. ‘Groupthink’ and distorted beliefs in the financial sector is something to take seriously if we want to prevent future crises.

Bank of Japan Monetary Plans Fuel Currency Debate
Bridges Weekly Trade News Digest, Volume 17, Number 12 Apr 11, 2013
Concerns over developed country monetary policy – including its impact on export competitiveness – have continued to escalate in recent weeks, as the Bank of Japan announced plans last Thursday to double its monetary base over the next two years by pursuing an aggressive strategy of monetary easing. Signs from the US Federal Reserve, meanwhile, have hinted at the possibility that its own controversial easing programme could slow down as early as this summer.

UN Process Inches Forward on Sustainability Goals
Bridges Weekly Trade News Digest, Volume 17, Number 12 Apr 11, 2013
Efforts to develop a global development framework beyond 2015 – the completion date of the Millennium Development Goals (MDGs) – have continued to advance in recent weeks, with the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda holding its final formal meeting in Bali, Indonesia on 25-27 March.

India Court Rejection of Drug Patent Reignites Debate on Health Innovation, Access to Medicines
Bridges Weekly Trade News Digest, Volume 17, Number 12 Apr 11, 2013
The Indian Supreme Court has announced that it will be denying pharmaceutical company Novartis a patent for Glivec, a cancer drug, in a decision that will effectively allow generics producers in the country to continue selling the unbranded equivalent at a fraction of the original’s price. Last week's landmark ruling has since reignited debate among officials and analysts alike over the balance between fostering innovation and ensuring affordable access to medicines.

Director-General Candidates Weigh In on Future of WTO
Bridges Weekly Trade News Digest, Volume 17, Number 12 Apr 11, 2013
As the whittling down of WTO Director-General candidates begins in earnest, ICTSD – the publisher of Bridges – has released a new publication aimed at helping to better understand the future of the World Trade Organization from the perspective of those vying for its leadership. This "living document" – which will be expanded and updated as the Director-General appointment process unfolds – is part of an ongoing process initiated by ICTSD to help gain a better understanding of the key issues influencing the multilateral trading system.

Extended Period of Low Interest Rates Can Rekindle Financial Risks
IMF Survey Apr 11, 2013
Several years of exceptionally low interest rates and bond buying by some advanced economy central banks have improved some indicators of banks’ health while supporting the economy and financial stability, according to new research from the International Monetary Fund.

China’s Unlikely Rival: Japan
William Pesek (Bloomberg) Apr 11, 2013
Of all the nightmares Chinese President Xi Jinping figured he would have to face, a resurgent Japan Inc. surely wasn’t among them.

Lust for Gold
Paul Krugman (NYT) Apr 11, 2013
In modern America, everything is political. And that goes for investments as well as voting.

China Belongs in the Pacific Trade Talks
David Dreier (WSJ) Apr 11, 2013
This is a hinge moment for the global economy. Don't leave Beijing out.

Energy: More buck, less bang
Sylvia Pfeifer and Guy Chazan (FT) Apr 11, 2013
As oil companies venture further into remote areas in search of the world’s remaining reserves, their costs have soared.

Tackling graft should be China’s priority
Roderick MacFarquhar (FT) Apr 11, 2013
To transform so corrupt a system from top to bottom would make cleansing the Augean stables simplicity itself.

Market Insight: Japan should heed lessons of Volcker’s war
Gillian Tett (FT) Apr 11, 2013
The battle that ex-US Federal Reserve chairman Paul Volcker fought 35 years ago left him keenly aware of how limited central bank powers really are.

Hungary a nightmare for foreign groups
Neil Buckley (FT) Apr 11, 2013
Viktor Orbán’s corporate sparring may boost his popularity for now, but at a steep long-term cost to Hungary’s investment image and economic outlook

Do all roads lead to fiscal union? Options for deeper fiscal integration in the eurozone
Stefan Vetter (DB Research) Apr 11, 2013
The current crisis has demonstrated that the eurozone is still a very heterogeneous economic area. As the common monetary policy cannot stabilise a country which experiences an asymmetric shock, there is a growing debate about whether the architecture of the eurozone needs to be complemented by fiscal stabilisation instruments. While the synchronisation of business cycles and an effective absorption of regional shocks would be in the interest of all the euro countries, the main question is how this could be put into practice without creating undesirable incentives. After all, a deeper fiscal integration would hardly be manageable without redistribution components.

Financial Globalization in Reverse?
Martin N. Baily and Susan Lund (Project Syndicate) Apr 12, 2013
For three decades, financial globalization had seemed inevitable, until the 2008 crisis exposed the dangers, with the globalized financial system’s intricate web of connections becoming a conduit for contagion. Cross-border capital flows abruptly collapsed, and, almost five years later, they remain 60% below their pre-crisis peak.

Jose Barroso's Implausibly Upbeat Take on Europe
Clive Crook (Bloomberg) Apr 12, 2013
The president of the European Commission is also optimistic about an EU/U.S. trade agreement.

Ringfencing and consolidated bank stress tests
Eugenio Cerutti & Christian Schmieder (VoxEU) Apr 13, 2013
The bank ‘stress-test’ is now a crucial crisis-fighting tool. This column discusses research into the shortcomings that arise from ‘ringfencing’, that is, the implicit or explicit regulations that hope to favour domestic markets. Notably, ringfencing could significantly increase some banks’ capital needs.

Is inflation targeting dead? Central banking after the Crisis
Richard Baldwin & Lucrezia Reichlin (VoxEU) Apr 14, 2013
Inflation targeting did not prevent financial instability before the Crisis nor did it provide sufficient stimulus after the Crisis. In a new Vox eBook, 14 world-renowned scholars, practitioners and market participants analyse inflation targeting and its future. They argue that inflation targeting should be refined not replaced. Indeed, it is needed now more than ever to keep expectations anchored while the advanced economies work their way through today’s slow growth, rickety banks, and over-indebted public sectors.

Aid for trade: Can it be evaluated?
Olivier Cadot & Jaime de Melo (VoxEU) Apr 14, 2013
Programmes that help developing nations trade are a key part of the global trade and development agenda. But do such policies work? This column summarises lessons from a recent workshop on the issue. One promising way forward is to use benchmarking from existing data sets to identify the aid’s effectiveness.

Japan Trade Deal May Revive Globalization
Bloomberg View Apr 14, 2013
The U.S. and Japan agreed to terms last week allowing Japan to join talks on the Trans-Pacific Partnership, another step toward creating the world’s most important free-trade initiative. The emerging pact has far- reaching implications for domestic policy in Japan and elsewhere, and could offer a new approach to global as well as regional trade liberalization.

The riddle of a currency with many values
Wolfgang Münchau (FT) Apr 14, 2013
The euro is not worth the same amount across the region – Spain and Germany already have different currencies.

Commodities: Tougher times for trading titans
Javier Blas (FT) Apr 14, 2013
China’s growth has led to spectacular profits and influence but the cooling of the supercycle raises questions about whether they are ‘too big to fail’.

The Antisocial Network of Bitcoins
Paul Krugman (NYT) Apr 14, 2013
The fruitless search for dehumanized money.

The President's Free-Trade Path to Prosperity
Tom Donilon (WSJ) Apr 14, 2013
A new accord with the U.S. brings Japan one step closer to joining the game-changing Trans-Pacific Partnership.

Treasury's Yen Confusion
WSJ Apr 14, 2013
The U.S. wants a weaker Japanese currency except when it doesn't.

The Eurozone crisis and EU institutional change: A new CEPR Policy Insight
Stefano Micossi (VoxEU) Apr 15, 2013
The Eurozone crisis has produced rapid institutional change with executive powers over national economic policies shifting to the EU. This column introduces a new CEPR Policy Insight that analyses the changes and shifts of power among the EU’s institutions. What is clear is that further reforms are needed in order to safely and accountably underpin new executive power.

Measuring the credit crunch
Michiel Bijlsma, Andrei Dubovik & Bas Straathof (VoxEU) Apr 15, 2013
The Global Crisis hit firms hard, making the terms of getting credit worse and thus amplifying the recession. This column discusses new research that isolates the ‘credit crunch’ element from other outcomes of recession. Crisis-linked credit drops caused a 5.5 percentage-point reduction in industrial growth in 2008, with a stronger effect in countries with more highly leveraged banks. The evidence clearly suggests that more attention should be paid to credit supplies to firms at the onset of financial crises.

Economic Policy’s Narrative Imperative
Kemal Dervis (Project Syndicate) Apr 15, 2013
The eurozone crisis highlights the need for a narrative that explains public policy and generates political support for it. While central bankers can provide such narratives to financial markets, political leaders must provide the messages that encourage long-term investment, electoral support for reform, and hope for the future.

Battleground Budget
Michael Spence (Project Syndicate) Apr 15, 2013
The world’s developed economies, of which the US is by far the largest and systemically most important, face a range of difficult political and social choices. President Barack Obama’s proposed federal budget acknowledges and addresses those choices and tradeoffs directly and fully for the first time in the post-crisis period.

How to Kill a Banking Union the German Way
Megan Greene (Bloomberg) Apr 15, 2013
Germany's insistence on EU treaty change to create a banking union is an attempt to block banking union, using the oldest trick in the playbook of EU bureaucracy.

Australia Must Wean Itself From China
William Pesek (Bloomberg) Apr 15, 2013
Viewed from afar, even the bad news in Australia looks pretty good. Unemployment reached a three- year high last month and is now all of 5.6 percent. Leaders such as U.S. President Barack Obama and French President Francois Hollande would kill for such a number. Australia has avoided a recession for 21 years, boasts a budget remarkably close to surplus and continues to enjoy low inflation. On any economic report card, the country deserves a string of A’s.

Slovenia Isn't Cyprus, Yet
Tim Judah (Bloomberg) Apr 15, 2013
When I saw him last week, Slovenian Finance Minister Uros Cufer had just sat through a grueling public presentation by officials from the Organization for Economic Co-operation and Development, in which they painted a grim picture of the state of affairs in his country. He was clearly in a foul mood.

Europe is no longer Spain’s solution
Gideon Rachman (FT) Apr 15, 2013
As the country’s economic woes continue, its people are losing faith in national and European institutions.

China needs to set its services free
Xu Qiyuan (FT) Apr 15, 2013
The country is now a factory that is too big for the world market and it must develop its service sector to spark new growth.

We tried a Tobin tax and it didn’t work
Magnus Wiberg (FT) Apr 15, 2013
Europe should learn from Sweden’s experience of a transaction levy, which led to sharp falls in share and bond trading volumes.

The agony and ecstasy of broken markets
Mohamed El-Erian (FT) Apr 15, 2013
Riding wave of liquidity may eventually end in tears if real economies do not respond adequately to central bank policies.

Debating the Tiger's Rise
Sadanand Dhume (WSJ) Apr 15, 2013
India would have had 175 million fewer poor people by 2008 had it embarked upon free-market reforms in 1971 instead of 1991.

Europe Split Over Austerity as a Path to Growth
Annie Lowrey (NYT) Apr 15, 2013
Europe is divided over the road to recovery: Is strict belt-tightening or an easing of monetary policy and some stimulus best?

Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff
Thomas Herndon, Michael Ash and Robert Pollin (PERI) Apr 15, 2013
Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. They find that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0:1 percent as published in Reinhart and Rogoff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower. The authors also show how the relationship between public debt and GDP growth varies significantly by time period and country. Overall, the evidence we review contradicts Reinhart and Rogoff's claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

Reinhart-Rogoff Response to Critique
Carmen Reinhart and Kenneth Rogoff (WSJ) Apr 16, 2013
A new paper by Thomas Herndon, Michael Ash and Robert Pollin calls into question research on public debt and its effects on growth by Harvard University economists Carmen Reinhart and Kenneth Rogoff. This is their response.

The Bitcoin Bubble and a Bad Hypothesis
John Quiggin (National Interest) Apr 16, 2013
The sudden drop in the value of Bitcoins, the hot new Internet currency, has added urgency to the question of whether Bitcoin is the way of the future, or just another bubble. Not to keep readers in suspense, the answer is a bubble, but a particularly interesting example of one. In particular, Bitcoin represents what ought to be the final refutation of the efficient-markets hypothesis, which still guides most regulation of financial markets.

Are Germans really poorer than Spaniards, Italians and Greeks?
Paul De Grauwe & Yuemei Ji (VoxEU) Apr 16, 2013
A recent ECB household-wealth survey was interpreted by the media as evidence that poor Germans shouldn’t have to pay for southern Europe. This column takes a look at the numbers. Whilst it’s true that median German households are poor compared to their southern European counterparts, Germany itself is wealthy. Importantly, this wealth is very unequally distributed, but the issue of unequal distribution doesn’t feature much in the press. The debate in Germany creates an inaccurate perception among less wealthy Germans that transfers are unfair.

The much-needed EU pivot to east Asia
Patrick A Messerlin (VoxEU) Apr 16, 2013
Mega-regional trade arrangements are being negotiated in Asia. This column asks how Europe should respond and assesses which Asian trade deals would provide the biggest boost and the best insurance against discriminatory effects. The evidence tentatively suggests Europe’s best bets are Japan and Taiwan.

Accounting: Stalking the Big Four
Adam Jones and Simon Rabinovitch (FT) Apr 16, 2013
Homegrown auditors are already eroding the influence of established western firms in China and could have an impact on international financial markets.

Debt threat to China’s financial system
Jamil Anderlini (FT) Apr 16, 2013
China’s banking system, tightly controlled by the Communist party, is unlikely to undergo calamitous collapse, but slow erosion is probably under way.

How central banks beat deflation
Martin Wolf (FT) Apr 16, 2013
Inflation targeting has revitalised macroeconomic stabilisation, giving policy makers room to risk expansionary measures.

The Immigration Windfall
WSJ Apr 16, 2013
A new study shows the potential economic benefits of reform.

What’s Stopping Europe?
Allan H. Meltzer (Project Syndicate) Apr 16, 2013
After five years of decline in living standards in much of Europe, voters oppose more austerity and further retrenchment without growth. Restoring a sound euro requires policies that revive growth, rein in government spending, and reform heavily regulated labor and product markets.

Fear of Fracking
Jeffrey Frankel (Project Syndicate) Apr 16, 2013
Against all expectations, US emissions of carbon dioxide have fallen back to 1995 levels, owing almost entirely to hydraulic fracturing, the process of extracting natural gas from shale. Why, then, are environmentalists overwhelmingly opposed to the new technology.

Hyperactive Monetary Policy: The Good, the Bad and the Ugly
Lupin Rahman, Mohit Mittal and Josh Thimons (PIMCO) Apr 16, 2013
Hyperactive monetary policy can provide a boost to short-term growth but is unlikely to lead to escape velocity. Hyperactive monetary policy (HMP) is in full force as fiscal policy retreats. The benefits of HMP outweigh the costs for now. Despite cyclical growth, we will likely not achieve escape velocity and eventually the costs will likely overtake the benefits.

Augmented inflation targeting: Le roi est mort, vive le roi
Richard Baldwin & Daniel Gros (VoxEU) Apr 17, 2013
The Bank of Japan has now joined the club of central banks practising a new, post-Crisis form of inflation targeting. This column discusses the new goals, new tools and new challenges of ‘augmented inflation targeting’. Despite economists’ worries and the many unknowns ahead, there really is no alternative in a post-Crisis world. Augmented inflation targeting is here to stay.

The ECB Is the Odd Central Bank Out
Evan Soltas (Bloomberg) Apr 17, 2013
The European Central Bank is the last major central bank without an aggressive monetary easing program.

Central Banks’ Outdated Independence
Mario I. Blejer (Project Syndicate) Apr 17, 2013
In the post-crisis world, advanced-country central banks’ goals are no longer limited to price stability. This shift has inevitably reduced central-bank independence, because the pursuit of GDP growth, job creation, and financial stability are clearly political decisions, which should not be made by unelected officials.

Capitalists for Inclusive Growth
Lynn Forester de Rothschild (Project Syndicate) Apr 17, 2013
The need for inclusive economic growth that can create good jobs and combat rising levels of income inequality has never been more urgent. But today’s debates about how to achieve such growth are too narrowly focused on the role of governments and policymakers, thus neglecting the private sector's role.

How the Falling Yen Can Save the Euro
Melvyn Krauss (Bloomberg) Apr 17, 2013
Japan’s new bond-buying program amounts to a declaration of currency war against its trading partners, no matter how you sugarcoat it. Yet it may also prove constructive for the euro area, jolting Germany to at last adopt more growth-friendly policies. How else is Europe to overcome the deflationary sting of a depreciated yen, if not with a growth boost from the German government?

Why the G-20 Finance Ministers Are Wrong
Bloomberg View Apr 17, 2013
Finance ministers and central-bank governors of the Group of 20 major economies are in Washington for their semi-annual discussion of the world’s dismal economic prospects. The prediction for output and jobs, catalogued in forecasts prepared for their meeting, is unacceptable. It’s also avoidable, if leaders in the U.S. and especially the European Union rethink their policies.

Reinhart-Rogoff on Debt and Growth: Fake but Accurate?
Josh Barro (Bloomberg) Apr 17, 2013
Carmen Reinhart and Ken Rogoff have not given a satisfying defense against the accusation that their blockbuster 2010 paper on growth is built on a data error.

The Rise of China's Reformers?
Evan A. Feigenbaum and Damien Ma (FA) Apr 17, 2013
Most observers are gloomy about the prospects for serious economic reform in China. But they ignore a central lesson of recent Chinese history: reform is possible when the right mix of conditions comes together at the right time. And the very circumstances that facilitated the last major burst of economic reform in the 1990s are largely present today.

Austerity after Reinhart and Rogoff
Robert Pollin and Michael Ash (FT) Apr 17, 2013
A main plank in the case for the strategy adopted in the US and Europe is riddled with faults.

The IMF must quit the troika to survive
Ousmène Mandeng (FT) Apr 17, 2013
The organisation has been unduly influenced by its largest shareholders at the cost of its independence.

A weak yen is not the solution for Japan
Axel Merk (FT) Apr 17, 2013
Investors have become complacent about monetary easing around the world.

US-EU talks: Cuts both ways
James Politi and Joshua Chaffin (FT) Apr 17, 2013
Washington and Brussels hope to forge the world’s largest free-trade agreement but agriculture is contentious.

Nouriel Roubini: eurozone austerity is making things worse
Antonia Oprita (Emerging Markets) Apr 17, 2013
The austerity in the eurozone, in the absence of policies to boost growth, will make the crisis worse rather than fix it, Roubini said

German exports virtually immune to yen depreciation
Eric Heymann and Heiko Peters (DB Research) Apr 18, 2013
In January the Japanese central bank raised its inflation target from 1% to 2%. At his first central bank meeting in April, the new governor surprise BoJ watchers with considerably more aggressive monetary easing than had been expected. This change of monetary regime is seen as a risk for other export nations – notably Germany. However, such concern is only partly justified for Germany.

Why is this global recovery different?
M Ayhan Kose, Prakash Loungani & Marco E Terrones (VoxEU) Apr 18, 2013
The Great Recession has been followed by a ‘Not-So-Great Recovery’. Why the recovery has been weak and protracted remains a matter of debate. This column argues that one specific aspect of the current global recovery makes it different from previous ones. Over the course of past recoveries, both monetary and fiscal policies maintained an accommodative stance. In this global recovery, fiscal and monetary policies in advanced economies are pushing in opposite directions.

Macroprudential rebalancing
Jean-Pierre Landau (VoxEU) Apr 18, 2013
Low interest rates and bank deleveraging combine to produce slow growth and rising financial risks in advanced economies. This column argues that appropriate macroprudential policies could contribute to redirecting risk taking, promoting growth and reducing uncertainty through more orderly deleveraging in the financial sector.

Fighting financial protectionism
Dirk Schoenmaker (VoxEU) Apr 18, 2013
International banking is under threat in the aftermath of the Global Crisis Supervisors across the world are pushing for a split of international banks into national subsidiaries. This column discusses ‘financial protectionism’, offering some governance solutions that may help to international banks. These solutions boil down to burden sharing. In Europe, the first step is banking union.

"Rapid Acceleration" Needed to Ensure Results at WTO Ministerial, Lamy Warns
Bridges Weekly Trade News Digest, Volume 17, Number 13 Apr 18, 2013
With the WTO's ministerial conference in Bali, Indonesia fast approaching, members must adopt a "change in mind-set" if they are to complete their negotiations on a package of Doha Round deliverables in time, Director-General Pascal Lamy warned last week.

Japan Receives US Backing for Entry into Trans-Pacific Talks
Bridges Weekly Trade News Digest, Volume 17, Number 13 Apr 18, 2013
Washington officially signed off on Tokyo's entry into the Trans-Pacific Partnership negotiations last week, bringing the Asian economy one step closer to formally becoming a member of the 11-country group.

Candidate Field Narrows for WTO Director-General's Race
Bridges Weekly Trade News Digest, Volume 17, Number 13 Apr 18, 2013
The first cut in the race for the position of WTO Director-General took place last week, after four candidates were deemed as not having sufficient support to make it to the leadership contest's second stage. The process to whittle down the remaining list of five candidates – which come from either Asia-Pacific or Latin American countries – to three is already underway, with the second round of consultations kicking off on Tuesday.

WTO Reins in 2013 Trade Growth Forecast
Bridges Weekly Trade News Digest, Volume 17, Number 13 Apr 18, 2013
The WTO on 10 April cut its projected trade growth forecast for 2013 by more than one percentage point, based on trade figures and trends seen in 2012. The organisation says that slow economic growth in developed economies, high rates of unemployment, and the eurozone crisis in 2012 will likely result in a growth rate of only 3.3 percent over 2013 – down from an earlier projected rate of 4.5 percent.

The ECB Should Stop Saying Its Hands Are Tied
Evan Soltas (Bloomberg) Apr 18, 2013
The ECB doesn't have a single mandate.

Slovenia Bailout Would Be Spanish-Cypriot Mongrel
Megan Greene (Bloomberg) Apr 18, 2013
The ink on the provisional bailout agreement for Cyprus was hardly dry last month before bond markets shifted their attention to Slovenia, another small euro- area country with a banking problem. The Slovenian government’s borrowing costs subsequently shot up.

Can China Adapt?
Zhang Jun (Project Syndicate) Apr 18, 2013
Many economists are becoming increasingly pessimistic about China's economic prospects, pointing to Japan as evidence that, after three decades, breakneck growth may be coming to an end. China can avoid Japan's fate, but only if its new leadership ensures that the country's economic institutions remain flexible and open to change.

Move From ‘Three-speed’ To ‘Full-speed’ Global Recovery, Urges Lagarde
IMF Survey Apr 18, 2013
The global economy can move beyond an uneven recovery to achieve “full-speed” if countries take customized action on a range of policy fronts, IMF Managing Director Christine Lagarde said at the 2013 IMF-World Bank Spring Meetings.

Wake up to the #Twitter effect on markets
Gillian Tett (FT) Apr 18, 2013
Investors or regulators need to spend more time thinking about the way social media can affect financial markets.

Italy: Lost in stagnation
Guy Dinmore (FT) Apr 18, 2013
The ruined and abandoned city of L’Aquila epitomises the despair of a nation paralysed by political and economic torpor.

Gold's Plunge Is Cause for Optimism
John Tamny (WSJ) Apr 18, 2013
It signals strength in the dollar that could reorient investment away from hedges and toward economic growth.

The Excel Depression
Paul Krugman (NYT) Apr 18, 2013
Did a coding error basically destroy the economies of the Western world? You be the judge.

Distilling the macroeconomic news flow
Alessandro Beber, Michael W Brandt & Maurizio Luisi (VoxEU) Apr 19, 2013
Timely measurement of the state of the economy traditionally relies on low-frequency observations of a few economic aggregates referring to previous weeks, months, or even quarters. This column presents a new method of a real-time approach to timely and more accurate macroeconomic news.

IMF, World Bank spineless with Gulf's dictators
Hossein Askari (AT) Apr 19, 2013
The spineless treatment of the Persian Gulf oil dictatorships by the International Monetary Fund and the World Bank has little impact on their rulers' self-enriching policies. With a bit of backbone, the organizations could recommend, inter alia, full disclosure of offshore accounts exceeding US$1 million of all rulers worldwide.

Europe Needs More Inflation
Evan Soltas (Bloomberg) Apr 19, 2013
By its own reasoning, the European Central Bank has set its inflation target too low.

Banker Steps Into the Role of Superhero
Chrystia Freeland (NYT/Reuters) Apr 19, 2013
In the stagnant world economy today, we have designated central bankers as our superheroes, and we are relying on their magical monetary powers to restart global growth.

A Dose of Reality for the Dismal Science
Adam S. Posen (PIIE/FT) Apr 19, 2013
For a few years, advocates of rapid fiscal austerity have argued as though public debt is like a black hole—once it reaches a certain size, it collapses in on itself under its own weight and pulls the economy down with it. Crisis awaits the spendthrift. A 2010 academic paper by Carmen Reinhart and Kenneth Rogoff, two eminent economics professors, provided many pundits and politicians with the desired evidence for this instinctive view. They seemingly found that economic growth fell off sharply when national debts reached 90 percent of gross domestic product.

Stuck in a Trap? Escape-Artist Korea Has Pointers
William Pesek (Bloomberg) Apr 20, 2013
Five years after the worst economic crisis since the Great Depression, developing nations confront a nasty pair of threats: an excruciatingly slow global recovery, and the tsunami of easy money that rich-world central bankers have unleashed as they try to revive their own economies.

The future of Europe-wide stress testing
Daniel C Hardy & Heiko Hesse (VoxEU) Apr 20, 2013
The IMF has recently argued that Europe’s financial sector has done much to address the recent financial crisis. This column argues that vulnerabilities remain, and calls for intensified efforts. Europe-wide stress tests will play a crucial role: selective asset-quality reviews and a high degree of transparency would add credibility and reduce uncertainty. Europe-wide stress tests will need to focus on structural, cross-border, and funding-related issues.

The economy: Climbing, stretching and stumbling
Economist Apr 20, 2013
China’s disappointing new growth figures are not the end of the world.

IMF Outlines Steps to Energize Global Recovery
IMF Survey Apr 20, 2013
A broad mix of policies is needed to help put the global economy on a sustained and balanced growth path, the IMF said as it wrapped up the 2013 Spring Meetings against a backdrop of an uneven global recovery.

IMF Has Clear Role in Interconnected World
IMF Survey Apr 20, 2013
As economies become increasingly interconnected and interdependent, there is a major role for international organizations such as the IMF, panelists told a seminar at the IMF-World Bank Spring Meetings.

Africa Enjoying Dynamic Growth but Challenges Remain
IMF Survey Apr 20, 2013
African countries are focusing on improving their infrastructure and tackling unemployment to maintain their dynamic growth, said panelists at an IMF conference.

Brazil: The creaking champions
Joe Leahy (FT) Apr 21, 2013
The boom has peaked, putting a strain on companies that had enjoyed political and economic support from the state.

Perils of placing faith in a thin theory
Wolfgang Münchau (FT) Apr 21, 2013
Policy makers loved the Reinhart and Rogoff thesis because two eminent economists were saying their instincts were correct.

Private lives of the monetary superheroes
Claire Jones (FT) Apr 21, 2013
Neil Irwin’s ‘The Alchemists’ praises the central bankers’s boldness but skates over their weak spots.

The end of macro magic
Robert J. Samuelson (WP) Apr 21, 2013
Economists lose faith in once-trusted policies.

From Brazil to Wikipedia
Yuri Takhteyev (FA) Apr 21, 2013
For technologies from the global South, worldwide success usually means shedding local ties and, should all go well, returning home triumphant. It is a treacherous road, and most of the benefits of such projects will never make it to the communities in which they started. But the alternative strategy of focusing on local problems and solutions is even less appealing. Read

Googling systemically important insurers
Mardi Dungey, Matteo Luciani & David Veredas (VoxEU) Apr 22, 2013
An unintended consequence of tighter banking regulation is that businesses are looking beyond banks for their loans. This column argues that this arbitrage opportunity may create systemic risks, including amongst major insurance companies. Using a new methodology, evidence tentatively suggests that insurers are indeed becoming systemic.

Europe in Depression?
Federico Fubini (Project Syndicate) Apr 22, 2013
Today, as southern European countries experience high levels of unemployment, huge savings and potential demand for consumer and capital goods remain locked up in northern Europe. It is time for northern European countries to use their huge excess savings to support growth.

How to Boost Foreign Investment
Ana Palacio (Project Syndicate) Apr 22, 2013
Economic globalization, together with a rebalancing of power between the world’s north and south, has made developing countries, and many companies within them, key global economic actors. This provides a new rationale for strengthening the international framework to protect foreign investment.

Suffer the Children, Suffer the Country
Jeffrey D. Sachs (Project Syndicate) Apr 22, 2013
Investing in the health, education, and skills of children offers the highest economic returns to any country. A new UNICEF study shows which high-income countries are doing well when it comes to making these investments – and which are doing poorly.

Lending in the Dark
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 22, 2013
The proliferation of China’s opaque, loosely regulated (or unregulated) shadow-banking system has been raising fears of possible financial instability. But just how extensive – and how risky – is shadow banking in China?

When Roosevelt Ditched the Gold Standard
Philip Scranton (Bloomberg) Apr 22, 2013
To bring the economy out of the Great Depression, President Franklin D. Roosevelt took the U.S. off the gold standard in 1933.

Migrant workers shape China’s future
James Kynge (FT) Apr 22, 2013
The shift of blue-collar labour from surplus to shortage has turned the tables in favour of those longing for consumer rewards.

Commodities: Against the grain
Gregory Meyer (FT) Apr 22, 2013
Ethanol was trumpeted as the super-fuel that would end US dependency on oil imports, but demand has stalled.

Retrenching banks hit local lenders in far-flung parts
Patrick Jenkins (FT) Apr 22, 2013
Emerging market trade is underpinning the global recovery, but it could falter if the big banks retrench further from smaller markets.

Misuse of collateral creates systemic risk
Satyajit Das (FT) Apr 22, 2013
Rather than reducing risk, as theory would suggest, collateral in practice creates different risks for a number of reasons Read

Africa's Lesson in Self-Reliance
Sammy Kum Buo (NYT) Apr 22, 2013
The saga of Mali shows that the nations of Africa bear primary responsibility for the continent's problems and their solutions.

Toward an Immunized World
Ban Ki-Moon and Bill Gates (Project Syndicate) Apr 23, 2013
For a child, receiving a vaccine takes just a moment (and perhaps a few tears). But such moments are crucial for getting children off to a healthy start in life, and for advancing progress on global health and development goals.

Two Policy Prescriptions for the Global Crisis
Kaushik Basu (Project Syndicate) Apr 23, 2013
One thing that experts know, and that non-experts do not, is that they know less than non-experts think they do. This much was evident at the just-completed Spring Meetings of the International Monetary Fund and the World Bank Group.

Should Germany Exit the Euro?
Hans-Werner Sinn (Project Syndicate) Apr 23, 2013
Those who advocate the creation of Eurobonds do not not recognize the real nature of the monetary union's problems. The ongoing financial crisis is merely a symptom of the eurozone’s underlying malady: its southern members’ loss of competitiveness.

Medieval monetary practices
Anthony Hotson (VoxEU) Apr 23, 2013
Medieval monetary practices reveal an alternative approach to currency stabilisation. This column examines the role of Mint prices as a device for stabilising the medieval bullion market. This might seem to be of limited relevance to managing modern currencies, yet a longer historical view helps to highlight different approaches to currency stabilisation. This raises a question for modern policymakers: should the price of some of the asset counterparts of today’s money be anchored, as bullion prices once were under the Mint system?

Latvia: Reaching for the euro
Richard Milne (FT) Apr 23, 2013
Despite the pain that eurozone countries such as Greece and Cyprus are enduring, the Baltic state has joined the queue to become a member of the once sought-after club.

Austerity loses an article of faith
Martin Wolf (FT) Apr 23, 2013
Reinhart and Rogoff argued that growth slows sharply when the debt ratio exceeds 90 per cent of output – but the UK defied this.

Global banking and regulation already fractured
John Plender (FT) Apr 23, 2013
System diversity is reduced by pushing banks in a monoline direction.

Solutions Remain Elusive After Financial Crisis
Eduardo Porter (NYT) Apr 23, 2013
A series of financial shocks have jolted the economy in recent decades, but the experts are no closer to understanding how such problems develop.

Europe's Sovereign Debt Problem: A Call for a Clear Destination
Andrew Bosomworth and John Henning Fock (PIMCO) Apr 24, 2013
Without political commitment to a common fiscal destination, the long-term instability and market distortions within Europe's capital markets are likely to intensify. To preserve the euro, the eurozone must develop federal fiscal policies that tackle significant economic, cultural and societal differences and define a credible roadmap to achieving structural reforms, a banking union, political union and fiscal union. Historical precedents in Europe may help guide the way.

Spain: Stuck on the sidelines
Tobias Buck (FT) Apr 24, 2013
The growing ranks of unskilled and unemployed youth pose a challenge to the economy and threaten the fabric of society.

Call in the nerds – finance is no place for extroverts
Apr 24, 2013
The people most likely to go into the riskier areas of financial services are precisely those least suited to judging risk, writes Sarah Gordon

Bank of Japan action threatens emerging Asia
Frederic Neumann (FT) Apr 24, 2013
The sharp rise in liquidity will push up inflationary pressure and possibly stoke asset bubbles.

Learning From China, But What?
Yu Hua (NYT) Apr 24, 2013
Skeptics wonder if a new scholarship is really about doing business.

Learning From China, But What?
Simon Romero (NYT) Apr 24, 2013
On paper, Paraguay is the fastest-growing country in the Americas, but its economic success exists only in pockets: more than 30 percent of the population lives in poverty.

Hybrid Humans
Parag Khanna (Project Syndicate) Apr 24, 2013
Technology-fueled development is causing historical eras to become cumulative, rather than linear. In order to describe emerging socio-technological patterns – including the merging of scientific disciplines and the fusion of human life with progress in these fields – the current era should be called the “Hybrid Age.”

The Reinhart-Rogoff brawl
Robert J. Samuelson (WP) Apr 24, 2013
Their mistake spawns outlandish allegations.

Measuring financial development
Martin Cihák, Asli Demirgüç-Kunt, Erik Feyen & Ross Levine (VoxEU) Apr 25, 2013
Is there too much financial development, or too little? Can economists even measure it well? This column argues that commonly used measures of financial development are poor proxies of what the financial system actually does, presenting a new worldwide database that aims to fill some of the gaps. There needs to be a stronger link between the theory and measurement of financial development.

Public debt and economic growth, one more time
Ugo Panizza & Andrea F Presbitero (VoxEU) Apr 25, 2013
The very public Rogoff-Reinhart kerfuffle has focused on what is not true. This column reviews the evidence on what is true. It suggests that the debt-growth link is more complex than commonly thought. While there is evidence that public debt is negatively correlated with economic growth, there is no study that makes a strong case for a causal relationship going from debt to growth.

Japan Gets TPP Invite, As APEC Calls for Faster WTO Talks
Bridges Weekly Trade News Digest, Volume 17, Number 14 Apr 25, 2013
The eleven countries currently negotiating the Trans-Pacific Partnership (TPP) Agreement formally invited Japan into their ranks this weekend, pending the conclusion of their respective domestic procedures. The news of Tokyo's invite comes just over a month after Japanese Prime Minister Shinzo Abe announced that his country would be pursuing a seat at the table in the trans-Pacific negotiations.

"Cultural Exception" Proves Early Sticking Point in EU-US Pact Preparations
Bridges Weekly Trade News Digest, Volume 17, Number 14 Apr 25, 2013
Fears that Brussels' planned negotiations with Washington on a bilateral trade and investment pact could lead to the loss of the controversial "cultural exception" has fuelled debate among EU trade officials this past week, with France being one of the most vocal in stressing the need for preserving the policy.

WTO Stakeholder Panel Outlines Future Trade Challenges
Bridges Weekly Trade News Digest, Volume 17, Number 14 Apr 25, 2013
Governments are facing a series of "convergence challenges" on the future of the international trading system, according to a report issued on Wednesday by a 12-member panel convened by WTO Director-General Pascal Lamy.

WIPO Draft Treaty for Visually Impaired in Final Stages, Though Difficult Issues Remain
Bridges Weekly Trade News Digest, Volume 17, Number 14 Apr 25, 2013
Members of the World Intellectual Property Organization (WIPO) have made their last adjustments to a draft treaty on copyright limitations and exceptions for the visually impaired and print disabled, officials announced last week. However, sources say, some key issues still remain unresolved, with less than two months to go before the UN body begins negotiating the final version of the treaty.

Global Recovery, Poverty Reduction Dominate IMF-World Bank Meetings
Bridges Weekly Trade News Digest, Volume 17, Number 14 Apr 25, 2013
Sobering trade and global growth estimates require a switch from a "three-speed recovery" to a full-speed one, top officials at the International Monetary Fund (IMF) and World Bank Spring Meetings said last week. Along with noting that a mix of policies would be needed to support this change – and that monetary policy alone is insufficient in solving the struggles of Japan and other developed economies – another major outcome of the high-profile gathering was the endorsement of a World Bank goal to end extreme poverty by 2030.

Big Banks’ Tall Tales
Simon Johnson (Project Syndicate) Apr 25, 2013
There are two competing narratives about recent financial reform efforts and the dangers that very large banks now pose around the world. One is wrong; the other is scary.

The Competition Factor
Joaquín Almunia and Eduardo Perez Motta (Project Syndicate) Apr 25, 2013
So far, macroeconomic policy has borne both the blame for economic malaise and the hope that it can be overcome. But we should be devoting as much attention to the microeconomic problems – such as poor incentives and market failures – that led us into the crisis in the first place.

Asia's Next Tigers? Burma, the Philippines, and Sri Lanka
Peter A. Coclanis (World Affairs) Apr 25, 2013
Fifty years ago, Burma, Sri Lanka, and the Philippines seemed ready to boom economically. Yet takeoff never happened. Could they now be on the path of recovery and growth? Read More

The pros and cons of a floating currency
Martin Wolf (FT) Apr 25, 2013
The UK’s flexible exchange rate has given it monetary and fiscal policy autonomy but not a big adjustment in the current account.

Debt, Growth and the Austerity Debate
Carmen M. Reinhart and Kenneth S. Rogoff (NYT) Apr 25, 2013
The economic discussion of debt has falsely equated a finding of a negative association between debt and growth with an unambiguous call for austerity.

Reinhart and Rogoff: Responding to Our Critics
Carmen M. Reinhart and Kenneth S. Rogoff (NYT) Apr 25, 2013
In an appendix to an Op-Ed essay, two Harvard economists defend their findings that high public debt is associated with lower economic growth.

I Brought the Euro to Greece
Yannos Papantoniou (FA) Apr 25, 2013
The finance minister who steered Greece into the common currency club argues that the country's problems today are not an inevitable result of having adopted the euro -- and they can be resolved without abandoning it.

Asia: ‘The Explosive Transformation’
Pankaj Mishra (NYRB) Apr 25, 2013
“Let some people get rich first,” the Chinese leader Deng Xiaoping proclaimed a generation ago, inaugurating a strange new phase in his country’s—and the world’s—history. It now seems clear that nowhere has capitalism’s promise to create wealth been affirmed more forcefully than in post–World War II Asia.

Should Eurozone current-account surpluses be reduced?
Alexandr Hobza & Stefan Zeugner (VoxEU) Apr 26, 2013
Current-account deficits have caused problems in several Eurozone countries, but surpluses are also an issue. This column argues that surpluses are detrimental to the welfare of the population to the extent they are driven by structural weaknesses affecting demand. Addressing these issues through structural reforms, while letting wages and prices respond flexibly to market signals, would be welfare-enhancing for the surplus countries.

Welcome to resource-shock era
Michael T Klare (AT) Apr 26, 2013
You may not be able to tell yet, but according to global experts and the United States intelligence community, the earth is already shifting under you. Whether you know it or not, you're on a new planet, a resource-shock world of a sort humanity has never before experienced.

Putin Is Shocked by Falling Economic Growth, but We Should Not Be
Anders Aslund (PIIE) Apr 26, 2013
Russia’s growth rate has fallen suddenly and sharply, and President Vladimir Putin has become publicly agitated in response. After a time of passivity in economic policy, significant changes are to be expected. The dominant concern relates to economic growth, which has almost ground to a halt. On April 22, Putin used these alarmist words at [...]

Long Live China’s Slowdown
Stephen S. Roach (Project Syndicate) Apr 27, 2013
China doubters around the world have been quick to pounce on slower-than-expected GDP growth in the first quarter of this year. But slower growth is actually good for China – provided that it reflects the long-awaited shift to an economic structure that draws greater support from domestic private consumption.

Refereeing Reinhart-Rogoff Debate
Betsey Stevenson & Justin Wolfers (Bloomberg) Apr 28, 2013
The discovery of an error in an influential research paper by Harvard University economists Carmen Reinhart and Kenneth Rogoff has sparked an academic firestorm. It’s time to sort through the wreckage.

Germany Should End Austerity, Not Ireland
Megan Greene (Bloomberg) Apr 28, 2013
Anti-austerity fever is sweeping Europe as policy makers decide the way to get from crisis to growth involves higher spending. Well, not so fast.

A light on India’s Dickensian underworld
Amy Kazmin (FT) Apr 28, 2013
Jan Breman’s ‘At Work in the Informal Economy of India’ argues that the country is storing up problems by neglecting its exploited ‘labour nomads’.

Wise withdrawal from currency war talk
Barry Eichengreen (FT) Apr 28, 2013
Central banks have accepted that the US and Japan are going for global growth, and not just running down their currencies.

The Caribbean: A darkening debt storm
Robin Wigglesworth and Benedict Mander (FT) Apr 28, 2013
The region is struggling to conquer its mountain of debt and its economic fragility is exacerbating the strategic dangers posed by organised crime.

Do We Need New Global Institutions?
Ian Goldin (Globalist) Apr 28, 2013
What is the world to do when national governments retreat from global commitments?

Asia Faces Shifting Risks, New Foundations for Growth
IMF Survey Apr 29, 2013
After a year of subdued economic performance, growth in Asia is set to pick up this year driven largely by continued robust domestic demand, says the IMF in its latest Regional Economic Outlook, which predicts growth will reach about 5¾ percent in 2013.

The Trapdoors at the Fed’s Exit
Nouriel Roubini (Project Syndicate) Apr 29, 2013
It may be too soon to say that many risky assets have reached bubble levels, and that leverage and risk-taking in financial markets is becoming excessive. But the reality is that credit and asset/equity bubbles are likely to form in the next two years, owing to loose US monetary policy.

When Is Government Debt Risky?
J. Bradford DeLong (Project Syndicate) Apr 29, 2013
A government that does not tax sufficiently to cover its spending will eventually run into all manner of debt-generated trouble. But it cannot happen as long as interest rates remain low, stock prices remain buoyant, and inflation remains subdued.

China’s New Path
Martin Feldstein (Project Syndicate) Apr 29, 2013
The opaque nature of China’s government makes it difficult to see where Chinese economic policy is heading, and thus how the Chinese economy will develop in the years ahead. But China’s new leaders have signaled where they want the economy to go, and, most important, they have put talented people in charge of the process.

Why the China Dream Might Be a Mirage
William Pesek (Bloomberg) Apr 29, 2013
If global economists are distraught over the gloomy numbers coming out of China, imagine how Xi Jinping must feel.

Cost of Doing Business in Russia Can Be Prison
Leonid Bershidsky (Bloomberg) Apr 29, 2013
Back in Soviet days, trading for a profit was considered a crime. If government prosecutors have their way in the case of opposition activist Alexei Navalny, Russia -- purportedly a market economy -- could be imprisoning someone for such “speculation” again.

Europe Should Rethink Austerity
Bloomberg View Apr 29, 2013
European Union governments are starting to relax their austerity-first approach to economic policy. Better late than never; we’ve been advising them to do just that for months. It’s a shame the new thinking, however welcome, is too limited and incoherent.

India gets it wrong with growth optimism
Kunal Kumar Kundu (AT) Apr 29, 2013
The latest official review of India's economy projects a relatively bullish view of economic growth in the year ahead. History is against its forecasting being close to reality, while the present outlook plays down domestic hurdles and makes mistaken assumptions about global demand.

Think Again: European Decline
Mark Leonard & Hans Kundnani (FP) Apr 29, 2013
Sure, it may seem as if Europe is down and out. But things are far, far better than they look.

Ireland: Bleak houses
Jamie Smyth (FT) Apr 29, 2013
Once seen as a poster child for austerity, the country faces a mortgage crisis that could trigger mass evictions and jeopardise stability.

Not all European states can be Germany
Alexander Privitera (FT) Apr 29, 2013
Replicating German labour reforms in other eurozone countries is not a magic potion and could be a dangerous poison.

Austerity exposes threat from tax havens
Jeffrey Sachs (FT) Apr 29, 2013
These centres are not merely gaps in the global financial system; they are the system.

Debt and Growth: A Response to Reinhart and Rogoff
Robert Pollin and Michael Ash (NYT) Apr 29, 2013
There is some threshold beyond which piling on public debt yields lower economic growth, but the evidence suggests that the United States and Europe are not anywhere close to it.

Debt and Growth
WSJ Apr 29, 2013
Attacking Reinhart-Rogoff to revive the spending machine.

How 'Food for Peace' Hurts Foreign Farmers
James Bovard (WSJ) Apr 29, 2013
For a half-century the program has done more to feed special interests than help the hungry.

Did the euro kill governance in the periphery?
Jesús Fernández-Villaverde, Luis Garicano & Tano Santos (VoxEU) Apr 30, 2013
By the end of the 1990s, under the incentive of Eurozone entry, most peripheral European countries were busy undertaking structural reforms and putting their fiscal houses in order. This column argues that the arrival of the euro, and the subsequent interest-rate convergence, loosened a tide of cheap money that reversed the incentives for further reforms. As a result, by the end of the euro’s first decade, the institutions and governance in the Eurozone periphery were in worse shape than they were at the start of the decade.

Why India Slowed
Raghuram Rajan (Project Syndicate) Apr 30, 2013
Unlike many equally poor countries, India has a strong entrepreneurial class, a reasonably large and well-educated middle class, and a number of world-class corporations that can be enlisted in the effort to provide public goods. Why, then, has India’s GDP growth slowed so much, from nearly 10% in 2010 and 2011 to 5% today?

The Erosion of Europe
Joschka Fischer (Project Syndicate) Apr 30, 2013
The Cyprus crisis revealed the full extent of the political disaster that the eurozone crisis has wrought: the EU is disintegrating at its core. Europeans’ current crisis of confidence concerning Europe is far more dangerous than renewed market anxiety, because it cannot be overcome with another liquidity injection by the ECB.

Who’s Afraid of the Big Bad Debt?
Ricardo Hausmann (Project Syndicate) Apr 30, 2013
The ongoing debate over findings by the economists Carmen Reinhart and Kenneth Rogoff that high public debt weakens economic growth is considered important because it is supposed to have implications for the choice between austerity and fiscal stimulus. In fact, the debate's relevance is limited largely to the US.

Education as the Key to Turkey's Prosperity
Mehmet Simsek (Globalist) Apr 30, 2013
Turkey's finance minister argues that there is no bigger economic development task for his country than improving the quality of education — especially for women

Big Banks Still Aren’t Safe Enough
Bloomberg View Apr 30, 2013
Some of the world’s largest banks are announcing spring makeovers. Earnings have improved, expenses are lower and capital ratios are higher. Today, for example, Deutsche Bank AG said its first-quarter earnings rose 19 percent and that it had sold almost 3 billion euros ($4 billion) of new stock.

Paul Krugman’s Proud War on Fools, Knaves and Lunatics
Clive Crook (Bloomberg) Apr 30, 2013
Could I say a word about Paul Krugman? A recent blog post by the eminent economist and New York Times columnist struck me as out of the ordinary, even for him. Krugman was responding to critics who accuse him of seeing everybody who disagrees with him as either a fool or a knave. He says that’s not right: Many of those who disagree with him are sociopaths.

Out to break the banks
Shahien Nasiripour and Tom Braithwaite (FT) Apr 30, 2013
Despite reams of legislation to rein in large institutions, US regulators and lawmakers fear that they are still too big to fail.

Why the Baltic states are no model
Martin Wolf (FT) Apr 30, 2013
What is possible for very small and open economies is close to impossible for large, relatively closed economies.

Shaky pillars for an Indian revival
James Crabtree (FT) Apr 30, 2013
Corporations have downed tools and there are few signs of industrialists picking them up again as they bide time until after next year’s elections.

A Truly Great Leap Forward
Charles Wolf Jr (WSJ) Apr 30, 2013
By the early 1980s, self-employed barbers and street vendors in China earned more than surgeons and nuclear scientists.

Is It Crazy to Think We Can Eradicate Poverty?
Annie Lowrey (NYT) Apr 30, 2013
The end to extreme poverty might very well be within reach. But is the bar too low?