News & Commentary:

Articles/Commentary

Satellite Images Can Pinpoint Poverty Where Surveys Can't
Sendhil Mullainathan (NYT) Apr 1, 2016
Information that can be gathered from novel sources, using algorithms, can help determine the best places to spend limited resources.

Uncertain Economics Influence ‘Brexit’ Talk
Steven Erlanger (NYT) Apr 1, 2016
Proponents of Britain’s exit from the European Union are trying to convince the country that any freedom it gains would not be offset by the risks to prosperity.

How Hedge Funds Held Argentina for Ransom
Martin Guzman & Joseph E. Stiglitz (NYT) Apr 1, 2016
By extracting a lavish settlement, U.S. vulture investors demonstrated how they could put a whole country's recovery on hold.

Lessons from 125 Years of US Bond and Stock Returns
Julien Acalin and Joseph E. Gagnon (PIIE) Apr 1, 2016
US investors face the prospect of low returns on their main financial assets: stocks and bonds. Is there any reason to believe that stocks are a worse investment than bonds in the future?

Dumping Rousseff Alone Won't Save Brazil
Mac Margolis (Bloomberg View) Apr 1, 2016
The entire political culture needs a thorough shaking out.

Soaring Productivity Is Missing From the Numbers
Barry L Ritholtz (Bloomberg View) Apr 1, 2016
We produce more with less because of technology. But data measurement hasn't kept up.

Unconventional Monetary Policy on Stilts
Nouriel Roubini (Project Syndicate) Apr 1, 2016
With most advanced economies experiencing anemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy – reducing policy rates via open-market purchases of short-term government bonds – to a range of unconventional policies. And now they are poised to do so again.

Role of virtual proximity in international finance
Christiane Hellmanzik and Martin Schmitz (VoxEU) Apr 1, 2016
Over the past two decades, the ICT revolution has changed the meaning of distance. But we still do not fully understand the impact of the internet on economic activity such as international transactions. This column shows that virtual distance has an important impact on international investment flows, and more so on portfolio equity than on portfolio debt investment. Over the past two decades, the ICT revolution has changed the meaning of distance. But we still do not fully understand the impact of the internet on economic activity such as international transactions. This column shows that virtual distance has an important impact on international investment flows, and more so on portfolio equity than on portfolio debt investment.

Free trade in America: Open argument
Economist Apr 2, 2016
The case for free trade is overwhelming. But the losers need more help

Following the Mugabe model: Spot the difference
Economist Apr 2, 2016
Venezuela today looks like Zimbabwe 15 years ago.

Brazil’s Middle-Class Revolt
Mary Anastasia O'Grady (WSJ) Apr 3, 2016
The effort to impeach President Dilma Rousseff is a sign of a maturing democracy.

Solving the productivity mystery
Robert J. Samuelson (WP) Apr 3, 2016
Although productivity seems dry, it reflects something that is dynamic and amorphous — a nation’s economic culture.

China Wants to Power the World
Adam Minter (Bloomberg View) Apr 3, 2016
A Global Energy Interconnection would create a supergrid that spans the globe.

Entrepreneurship contagion: Evidence from Italy
Luigi Guiso, Luigi Pistaferri and Fabiano Schivardi (VoxEU) Apr 3, 2016
Entrepreneurship often concentrates in certain geographic locations, with Silicon Valley the most famous example today. While a large literature focuses on these cross-location differences in entrepreneurial density, questions remain about the supply of entrepreneurial skills across locations. Using Italian data, this column investigates whether selection into entrepreneurship is affected by learning opportunities in adolescence. Those who grow up in an area with higher entrepreneurial density are found to be more likely to become entrepreneurs themselves. They are also more likely to succeed and earn a higher income. Entrepreneurship often concentrates in certain geographic locations, with Silicon Valley the most famous example today. While a large literature focuses on these cross-location differences in entrepreneurial density, questions remain about the supply of entrepreneurial skills across locations. Using Italian data, this column investigates whether selection into entrepreneurship is affected by learning opportunities in adolescence. Those who grow up in an area with higher entrepreneurial density are found to be more likely to become entrepreneurs themselves. They are also more likely to succeed and earn a higher income.

Fed flip-flops reflect global uncertainty
Mohamed El-Erian (FT) Apr 4, 2016
Markets engaged in an unhealthy codependency with bank policy

China workers ‘to account for 12% of global consumption’
Steve Johnson (FT) Apr 4, 2016
Spending per head to more than double by 2030, says McKinsey, with education a top priority.

The Panama papers and the concealed wealth of nations
FT Apr 4, 2016
Data leak is a reminder of scale of money laundering and tax evasion.

Greece needs to keep the IMF at the table
FT Apr 4, 2016
Tsipras is putting short-term political gain ahead of national interest.

The world has too many workers. Here’s one way to fix it.
Jim Tankersley (WP) Apr 4, 2016
Maybe the problem is simple: too many workers.

Emerging Economies Affect Global Financial Changes
IMF Survey Apr 4, 2016
Changes in emerging market asset prices explain over a third of the rise and fall in global equity prices and exchange rates, according to new research from the International Monetary Fund.

Insurance Sector Contributes More Risk to Financial System since Crisis
IMF Survey Apr 4, 2016
Life insurers in major advanced economies have contributed more risk to the financial system as a whole since the global financial crisis, according to new research by the International Monetary Fund.

Africa’s Petrostates Are Imploding
Luke Patey (FP) Apr 4, 2016
The implosion of Africa’s petrostates are setting off a dramatic shift in the economic balance of power on the continent.

How to Save Europe From Itself
Thomas Piketty, Jeremy Adelman, and Anne-Laure Delatte (FP) Apr 4, 2016
At the heart of Europe’s numerous crises is a broken democracy. It can be fixed by establishing a more representative parliamentary chamber.

Time Is Running Out (Again) for Greece
Bloomberg View Apr 4, 2016
Greece needs debt relief. There's no way around it.

Will Britain Choose Irrelevance?
Dambisa Moyo (Project Syndicate) Apr 4, 2016
Membership in a European community of 500 million people provides the UK with considerable influence over geopolitics and the global economy. As the world becomes ever more daunting and complex, maintaining that influence is clearly in the country’s interest.

Europe’s Renminbi Romance
Nicola Casarini and Miguel Otero-Iglesias (Project Syndicate) Apr 4, 2016
The Chinese are losing confidence in their currency, the renminbi, but that hasn't stopped the West – and Europe in particular – from doubling down on it. Europe's efforts to turn the renminbi into a viable reserve currency could succeed, but only if China embraces further market liberalization.

Differing Views on Long-Term Inflation Expectations
Jens H.E. Christensen and Jose A. Lopez (FRBSF Econ Letter) Apr 4, 2016
Persistently low price inflation, falling energy prices, and a strengthening dollar have helped push down market-based measures of long-term inflation compensation over the past two years. The decline in inflation compensation could reflect a lower appetite for risk among investors or decreased market liquidity. A third alternative supported by recent research suggests that the decline reflects lower long-term inflation expectations among investors. Projections indicate the underlying expectations will revert back to typical long-run levels only slowly.

Economic consequences of Brexit
Swati Dhingra, Hanwei Huang, Gianmarco I.P. Ottaviano, Thomas Sampson and John Van Reenen (VoxEU) Apr 4, 2016
The economic consequences of leaving the EU are at the heart of the Brexit debate. This column studies how changes in trade and fiscal transfers to the EU following Brexit would affect living standards in the UK. Across a range of scenarios, Brexit leads to lower income per capita, but the magnitude of the loss depends on what trade policies the UK adopts post-Brexit. To minimise the economic costs of Brexit, the UK would have to remain closely integrated into the Single Market. The economic consequences of leaving the EU are at the heart of the Brexit debate. This column studies how changes in trade and fiscal transfers to the EU following Brexit would affect living standards in the UK. Across a range of scenarios, Brexit leads to lower income per capita, but the magnitude of the loss depends on what trade policies the UK adopts post-Brexit. To minimise the economic costs of Brexit, the UK would have to remain closely integrated into the Single Market.

Returns to German savings invested abroad
Matthias Busse and Daniel Gros (VoxEU) Apr 4, 2016
Through the Eurozone rescue mechanisms, Germany provided the periphery with hundreds of billions in debt at very low rates. There is a widely held notion that these savings would have been better used at home. This column challenges this notion, presenting evidence that Germany’s net asset position held up well, remaining much higher than domestic returns. The main reason is that Germany’s part in the rescue operations was actually much smaller than its claims towards the periphery. Through the Eurozone rescue mechanisms, Germany provided the periphery with hundreds of billions in debt at very low rates. There is a widely held notion that these savings would have been better used at home. This column challenges this notion, presenting evidence that Germany’s net asset position held up well, remaining much higher than domestic returns. The main reason is that Germany’s part in the rescue operations was actually much smaller than its claims towards the periphery.

Signs Are Promising That Economies Can Rise as Carbon Emissions Decline
Coral Davenport (NYT) Apr 5, 2016
The question is whether what happened in 21 countries can be a model for the rest of the world.

Still the Best Insurance
George Melloan (WSJ) Apr 5, 2016
Fed officials past and present often disparage gold. But if it’s so worthless, the author asks, why does the U.S. have more than 8,000 tons?

Large Banks and Small Banks Are Allies, Not Enemies
Jamie Dimon (WSJ) Apr 5, 2016
The financial-services industry relies on the healthy interdependence of banks of all sizes.

Is Ukraine's Economic Potential Its Destiny?
Alexander J. Motyl (WA/Orange Blues) Apr 5, 2016
Ukraine can attract world-class investment once Kyiv decides to implement the legal, judicial, and property rights reform necessary to make it happen.

Who's Responsible for the Next Crisis
Narayana Kocherlakota (Bloomberg View) Apr 5, 2016
By encouraging debt, Congress has made the U.S. prone to instability.

Don't Cry for Argentina's Investors
Matthew A Winkler (Bloomberg View) Apr 5, 2016
With a new president in office, markets expect growth and the retreat of inflation.

Living Free and Equal
Rebeca Grynspan (Project Syndicate) Apr 5, 2016
In the quarter-century since the publication in 1990 of the first Human Development Report, the world has made astounding strides in reducing poverty and improving the health, education, and living conditions of hundreds of millions of people. And yet, as impressive as these gains may be, they have not been distributed equally.

Europe’s Generational War
Harold James (Project Syndicate) Apr 5, 2016
As populations in Europe and Japan age, the demographic pyramid is rapidly inverting, and a clash of generations is emerging, with the middle-aged and elderly protecting their interests at the expense of the younger and future generations. Labor mobility can help, but what will happen when opportunities abroad are depleted as well?

China's Offensive in London
Philippe Le Corre (FA) Apr 5, 2016
Why Beijing wants to invest in the United Kingdom.

Government Intervention reduces banking globalisation
Anya Kleymenova, Andrew K Rose and Tomasz Wieladek (VoxEU) Apr 5, 2016
Post-crisis banking is in trouble, with cross-border bank lending significantly slower than before. Many economists think that this is down to complications from government ownership. This column argues that although government ownership is not the only possible friction or reason for cross-border bank lending, it is an inhibitor of cross-border bank activity in both the UK and the US. If the same mechanism applies to other countries around the world, then global banking intermediation may rebound once again, once banks are privatised. Post-crisis banking is in trouble, with cross-border bank lending significantly slower than before. Many economists think that this is down to complications from government ownership. This column argues that although government ownership is not the only possible friction or reason for cross-border bank lending, it is an inhibitor of cross-border bank activity in both the UK and the US. If the same mechanism applies to other countries around the world, then global banking intermediation may rebound once again, once banks are privatised.

Fear and loathing of a world without borders
Ivan Krastev (FT) Apr 6, 2016
In Europe there is fear that foreigners will compromise traditions.

How the Middle East and North Africa can benefit from low oil prices
Shanta Devarajan (Brookings) Apr 6, 2016
The sharp drop in oil prices has brought long-awaited economic policy changes to the Middle East and North Africa.

Emerging Markets Show More Resilience to Capital Flow Cycle
IMF Survey Apr 6, 2016
Despite lower capital inflows and higher capital outflows since 2010, emerging market economies have remained resilient.

Structural Reforms in Advanced Economies: Pressing Ahead and Doing them Right
IMF Survey Apr 6, 2016
With sluggish growth in many advanced economies, now is a good time to make a big push for additional product and labor market reforms to boost jobs and growth, according to new IMF research.

Panic over, but what's next for markets?
Keith Wade (Pieria) Apr 6, 2016
Having recovered their composure after a tumultuous start to 2016, investors are now looking for a new catalyst, but what will it be and where next for markets?

The Case for Higher Estate Taxes
Caroline Freund (Project Syndicate) Apr 6, 2016
Smart economic policy should aim not only to reduce inequality, but also to steer resources toward productive forms of wealth creation, while limiting less productive forms. And, because inheriting money does little to stimulate growth, an attractive set of measures are estate and inheritance taxes.

Western Mistakes, Remade in China
Adair Turner (Project Syndicate Apr 6, 2016
To achieve its goal of joining the world’s high-income countries, China's government has rightly urged for a “decisive role for the market.” But banking is different, as the last seven years of reliance on bank-based capital allocation in China has shown.

US politics is closing the door on free trade
Philip Stephens (FT) Apr 7, 2016
Without America, momentum will be lost. The danger will be of a slide into outright protectionism.

A world order reshaped by Vladimir Putin’s ambition
Eugene Rumer (FT) Apr 7, 2016
The image of Russia as weak and withdrawn from the international arena is wrong.

Tensions Run High on US Presidential Campaign Trail as TPP Debate Continues
Bridges, Volume 20, Number 12 Apr 7, 2016
Tensions in the US over the Trans-Pacific Partnership (TPP) continue running high as the presidential contest moves forward – posing renewed questions over when and whether Washington lawmakers will ratify the deal, even as the White House continues to make the case for its swift passage. Meanwhile, deliberations on the TPP are now underway in the legislature of another major member – Japan.

Anti-Trade America?
Kenneth Rogoff (Project Syndicate) Apr 7, 2016
The rise of anti-trade populism in the US presidential election campaign portends a dangerous retreat from the country's role in world affairs. In the name of reducing inequality at home, candidates in both parties would stymie the aspirations of hundreds of millions of people in the developing world to join the middle class.

The Emancipation Gap in Arab Education
Ishac Diwan (Project Syndicate) Apr 7, 2016
Educated Arabs are much less emancipated politically and socially, on average, than their peers in other parts of the world. If Arab societies are ever to become more open, their education systems will have to embrace and promote values appropriate to that goal.

Globalization’s Toll: Tata Steel’s Expansion Dream
Dilip Hiro (YaleGlobal) Apr 7, 2016
Slowed growth in China led to its increased steel exports, Tata Steel’s plans to end operations in Britain.

How a Tariff on Chinese Imports Would Ripple Through American Life
Michael Schuman (NYT) Apr 7, 2016
Despite persistent criticism over the negative effects of trade with China, the economic benefits for Americans shouldn’t be overlooked.

A Trade Lesson in Trump Scarves
WSJ Apr 8, 2016
Maybe he should join the movement of textile jobs back to the U.S.

The Deflation Bogeyman
Daniel Gros (Project Syndicate) Apr 8, 2016
Central banks throughout the developed world have been overwhelmed by the fear of deflation. They shouldn’t be: Across the developed world, financing conditions are extremely favorable; the broadest price indices are increasing steadily; GDP continues to grow; and the labor market is improving.

Looking for Signs of Life in Emerging Markets
Paul J. Lim (NYT) Apr 9, 2016
Emerging-market stocks could again become one of the best-performing asset classes, but another “supercycle” may be years away.

Is China the Country Facing a Hard Landing?
Laurence Brahm (II) Apr 9, 2016
The three-ring circus that is the 2016 U.S. presidential election makes for an uncomfortable juxtaposition with China’s investments in the poorest countries.

Brazil’s nightmare: No end in sight
Robert J. Samuelson (WP) Apr 10, 2016
No one knows where the nation’s mix of economic disappointment and political disillusion is leading.

The World Is Still Becoming One
Philip McKibbin (Globalist) Apr 10, 2016
The biggest political challenge of the 21st century will not be terrorism. It will be borders.

Bringing Europe’s Migration Crisis Under Control
George Soros (Project Syndicate) Apr 10, 2016
The EU’s first expulsion of refugees has exposed the fundamental flaws in its new migration policy. While the forcible return of asylum-seekers to Turkey has caught the world’s attention, an equally troubling issue has hardly been discussed: the underfunding of Europe’s response to the crisis.

Concentrated Power Drives Extreme Income Inequality and Slows Economic Growth
Jordan Brennan (Evonomics) Apr 11, 2016
The concentration of corporate power.

Europe’s Rule-of-Law Crisis
Guy Verhofstadt (Project Syndicate) Apr 11, 2016
Hungary and Poland are now jeopardizing hard-won European democratic norms – and thus undermining the very purpose of European integration. The sad reality is that, were they to apply for EU membership today, neither country would be admitted.

The IMF delivers a stark warning to national governments
Martin Sandbu (FT) Apr 12, 2016
The world has taken a turn for the worse and politicians are much to blame.

How to Save Nigeria’s Economy and Stop Corruption
Walter Lamberson (NYT) Apr 12, 2016
President Buhari needs to give up the quixotic currency peg and let the naira’s value fall.

Global Economy Faltering from Too Slow Growth for Too Long
IMF Survey Apr 12, 2016
Global growth continues, but at a sluggish pace that leaves the world economy more exposed to risks, says the IMF’s latest World Economic Outlook (WEO).

The Brexit Alarm
Barry Eichengreen (Project Syndicate) Apr 12, 2016
The British campaign to leave the European Union is tapping into the same primordial sentiments as Donald Trump is in the US. Exposure to international trade and finance, which is what EU membership entails, may have benefited the UK as a whole, but it has not worked to everyone’s advantage.

Russia’s potential growth rate ‘close to zero’
Steve Johnson (FT) Apr 13, 2016
Shrinking labour force undermines Moscow’s ability to pull out of recession.

We have the ‘least ugly’ economy
Robert J. Samuelson (WP) Apr 13, 2016
But we shouldn’t feel insulated from some sickly economies’ troubles.

The Yen Flashes Danger
WSJ Apr 13, 2016
Negative interest rates appear to have backfired on Japan.

Slow Growth Is a Fact of Life in the Post-Crisis World
Olivier Blanchard (FT/PIIE) Apr 13, 2016
Once the acute phases of the financial and euro crises were over, it was clear that it would take time for advanced economies to recover. The history of past financial crises gave a clear warning that recovery would typically be long and painful.

Coping With a New Reality
IMF Survey Apr 13, 2016
In a context of fragile and uneven global economic recovery, a comprehensive policy response is needed to reduce vulnerabilities and improve growth prospects, the IMF said today in the latest Fiscal Monitor.

IMF Warns of Threats to Financial Stability
IMF Survey Apr 13, 2016
Over the last six months, global financial stability risks increased because of higher economic risks and uncertainty, falling commodity prices, and concerns about China’s economy, according to the International Monetary Fund’s latest Global Financial Stability Report.

What’s Wrong With Negative Rates?
Joseph E. Stiglitz (Project Syndicate) Apr 13, 2016
One reason for the lingering effects of the 2008 financial crisis is central banks' continued reliance on a flawed economic model. As long as policymakers focus on interest rates instead of on the flow of credit, the problem of deficient aggregate demand is unlikely to be resolved.

A Progressive Logic of Trade
Dani Rodrik (Project Syndicate) Apr 13, 2016
Progressives should not buy into a false and counter-productive narrative that sets the interests of the global poor against the interests of rich countries’ lower and middle classes. With sufficient institutional imagination, the global trade regime can be reformed, to the benefit of both.

The long view in EM – middle-income trap, demographics and economic growth
Markus Jaeger (DB Research) Apr 13, 2016
A number of factors, including the decline in commodity prices, sizeable corporate foreign-currency debt, a strengthening dollar and the prospect of higher US interest rates, are weighing on the economic and financial outlook in the emerging markets (EM). The relative lack of reform combined with a weakening of some of the structural factors that underpin growth has raised concern about the medium-term outlook in many, but not all EM.

Fixing US-China trade and investment
Derek Scissors (AEI) Apr 13, 2016
The election-driven diatribes about the US-China economic relationship are correct that there are serious problems but wrong about what the problems actually are. The most basic evidence shows trade deficits do not cause US unemployment. Neither does the dollar-yuan exchange rate. China's accession to the WTO did considerable harm to US manufacturing employment 15 years ago. The main problems now are that American comparative advantage is being blunted by China's intense protection of state-owned enterprises and equally intense theft of intellectual property. Diagnosing the wrong ills will lead to the wrong cures. The US should not try to balance the trade deficit or sanction China for having the wrong currency policy. Instead, the US should sanction Chinese firms that benefit from stolen intellectual property, postpone a bilateral investment treaty, and not granting market economy status until China becomes a much better partner.

The Elusive Boost from Cheap Oil
Sylvain Leduc, Kevin Moran, and Robert J. Vigfusson (FRBSF Econ Letter) Apr 13, 2016
The plunge in oil prices since the middle of 2014 has not translated into a dramatic boost for consumer spending, which has continued to grow moderately. This has been particularly surprising since the sharp drop should free up income for households to use toward other purchases. Lessons from an empirical model of learning suggest that the weak response may reflect that consumers initially viewed cheaper oil as a temporary condition. If oil prices remain low, consumer perceptions could change, which would boost spending.

Globalisation is changing, not going into reverse
Minouche Shafik (FT) Apr 14, 2016
Policymakers must ensure these new patterns are safe.

Greece has defied doom-mongers — now the IMF must do its bit
Alexis Tsipras (FT) Apr 14, 2016
After six years of recession, we are laying the foundations for recovery.

China’s Weakness Is Not About GDP
Leland R. Miller and Derek Scissors (WSJ) Apr 14, 2016
Tepid borrowing, spending and hiring foreshadow tough economic times.

A New Map of Poverty, a New Approach to International Aid
Bill Gates (WSJ) Apr 14, 2016
When 70% of the world’s poorest people live in nations defined as middle income, it’s time for change.

How to Achieve Durable Development Despite Hard Times
IMF Survey Apr 14, 2016
Low-income developing countries need to diversify their economies, promote inclusion, and close infrastructure gaps by tapping both domestic resources and foreign funding to sustain growth.

Global Growth Fears Loom Over IMF-World Bank Spring Meetings
Bridges, Volume 20, Number 13 Apr 14, 2016
The pace of global economic growth has been "too slow for too long," warned the International Monetary Fund (IMF) on Tuesday, suggesting that a continuation of this trend could have serious long-term ramifications.

Trade Officials Push for Canada-EU Deal's Ratification, Despite Hurdles
Bridges, Volume 20, Number 13 Apr 14, 2016
Trade officials are pressing for the ratification of a bilateral EU-Canada trade pact to occur this year, amid continued public scepticism and a separate row over visa-free travel that some officials say could be damaging to the FTA approval process.

In Referendum, Dutch Voters Reject EU-Ukraine Association Agreement
Bridges, Volume 20, Number 13 Apr 14, 2016
Dutch citizens voted last week against a political and economic Association Agreement between the EU and Ukraine in a result that has been billed by some analysts as a potential sign of growing difficulties in the 28-nation European Union.

The Truth about Chinese Unemployment Rates
Zhang Jun (Project Syndicate) Apr 14, 2016
Since 2002, even as China’s economy has undergone significant changes, its official unemployment rate has remained remarkably steady. But a careful look at data from the urban household survey tells a far more complex story – one with important potential implications for the country's growth path.

The Risks of China’s Failure – and Success
Arvind Subramanian (Project Syndicate) Apr 14, 2016
China is the one country that might be able to jump-start the sputtering global economy’s recovery; and yet its own economic growth is based on a foundation that is increasingly showing signs of strain. The dilemma is that both Chinese failure and success carry risks for the world economy.

Unsustainable Development Goals?
Ngaire Woods (Project Syndicate) Apr 14, 2016
In a challenging global economic and geopolitical environment, achieving the just-launched Sustainable Development Goals will be possible only if the world makes the most of every multilateral development dollar. And a growing body of evidence indicates that that may mean giving those dollars directly to those who need them.

How to break the links: Housing, banking and business cycles
Avinash Persaud (VoxEU) Apr 14, 2016
Since the breakup of Bretton Woods in the early 1970s, the housing market has been at the centre of the biggest banking crises across the world. This column considers the nexus between housing, banking, and the economy, and how these ties can be broken. It argues for two modest regulatory changes in banking and insurance. These would result in life insurers and pension funds providing mortgage finance, better insulating the economy and homeowners from the housing cycle. Since the breakup of Bretton Woods in the early 1970s, the housing market has been at the centre of the biggest banking crises across the world. This column considers the nexus between housing, banking, and the economy, and how these ties can be broken. It argues for two modest regulatory changes in banking and insurance. These would result in life insurers and pension funds providing mortgage finance, better insulating the economy and homeowners from the housing cycle.

Financial cycles, labour misallocation, and economic stagnation
Claudio Borio, Enisse Kharroubi, Christian Upper and Fabrizio Zampolli (VoxEU) Apr 14, 2016
Some analysts claim that secular stagnation is responsible for the disappointing post-crisis economic performance. This column provides a different explanation that points to an unsuspected villain: the misallocation of resources (in our case, labour) during the pre-crisis financial boom and the long shadow it has cast post-crisis. The findings draw on an empirical analysis covering more than 20 advanced economies over 40 years. They add strength to the view that the economy has been struggling with the legacy of a major financial boom and bust that has left long-lasting scars on the economic tissue. They also raise broader questions about the interpretation of hysteresis effects, the need to incorporate credit developments in the measurement of potential output and the design of policy more generally, and the role and effectiveness of monetary policy in the short and long term. Some analysts claim that secular stagnation is responsible for the disappointing post-crisis economic performance. This column provides a different explanation that points to an unsuspected villain: the misallocation of resources (in our case, labour) during the pre-crisis financial boom and the long shadow it has cast post-crisis. The findings draw on an empirical analysis covering more than 20 advanced economies over 40 years. They add strength to the view that the economy has been struggling with the legacy of a major financial boom and bust that has left long-lasting scars on the economic tissue. They also raise broader questions about the interpretation of hysteresis effects, the need to incorporate credit developments in the measurement of potential output and the design of policy more generally, and the role and effectiveness of monetary policy in the short and long term.

The ECB can make a difference if deeds match words
Nick Ligthart and Ashoka Mody (VoxEU) Apr 14, 2016
Many claim that monetary policy has hit diminishing returns. They use that as an explanation for the slower economic growth and low inflation in the Eurozone. This column argues that the main problem is that the ECB acted late and with half-measures to the Global Crisis, which was seen as falling short of its promises. The real problem is thus not a lack of ammunition, but a lack of credibility. Many claim that monetary policy has hit diminishing returns. They use that as an explanation for the slower economic growth and low inflation in the Eurozone. This column argues that the main problem is that the ECB acted late and with half-measures to the Global Crisis, which was seen as falling short of its promises. The real problem is thus not a lack of ammunition, but a lack of credibility.

Public sector needs to do a better job with assets
Martin Wolf (FT) Apr 15, 2016
Professional management might raise an extra income of $2.7tn annually.

How an activist approach on trade could stimulate global demand
Roberto Azevêdo (FT) Apr 15, 2016
It can be used to drive growth and job creation — albeit at a slower rate.

Structural Reforms Necessary, Politically Difficult
IMF Survey Apr 15, 2016
Reforms to the structure of a country’s economy to make it more productive and boost long-term growth are among the toughest to achieve, given opposition from vested interests, the rise of populism, and competing views about which reforms to undertake, when, and how.

Conflicts and the Refugee Crisis: An International Call for Action
IMF Survey Apr 15, 2016
Efforts to deal with the current and unprecedented refugee crisis require a “bigger, bolder, and broader” approach IMF’s Christine Lagarde told a seminar at the IMF-World Bank Spring Meetings.

A Lehman Lesson for the British Pound
Mark Gilbert (Bloomberg View) Apr 15, 2016
Currency crises are dangerous things.

The Task Ahead for Brazil
Camila Villard Duran (Project Syndicate) Apr 15, 2016
Brazil is confronting a triple crisis: a severe economic downturn, a corruption scandal that has ensnared the commanding heights of the economy and politics, and a government crisis that may soon culminate in the impeachment of President Dilma Rousseff. All of this underscores the need to overhaul Brazil’s economic institutions.

Getting Past Slow Growth
Kemal Dervis (Project Syndicate) Apr 15, 2016
Despite the doom and gloom that dominates most economic debate today, it is likely that continued rapid increases in prosperity are possible. But only ambitious social and economic reforms that focus on improving inclusiveness, together with global cooperation, can make it happen.

Solar energy: Follow the sun
Economist Apr 16, 2016
Solar power is reshaping energy production in the developing world.

Business in Africa: Making Africa work
Economist Apr 16, 2016
The continent’s future depends on people, not commodities.

Business in Africa: 1.2 billion opportunities
Economist Apr 16, 2016
The commodity boom may be over, and barriers to doing business are everywhere. But Africa’s market of 1.2 billion people still holds huge promise, says Daniel Knowles

The world economy: System says slow
Economist Apr 16, 2016
The IMF sees political danger in the economic doldrums.

Global Crisis in the US vs the Eurozone: Banks and monetary policy
Alex Cukierman (VoxEU) Apr 16, 2016
Both the US and the Eurozone reacted to the Global Crisis by injecting liquidity and loosening monetary policy. This column argues that despite the similarities in the behaviour of bank credit, the behaviour of bank reserves has been quite different. In particular, while US bank reserves have been on an uninterrupted upward trend since Lehman’s collapse, EZ bank reserves have fluctuated markedly in both directions. At the source, this is due to differences in the liquidity injections procedures between the Eurozone and the Fed. Both the US and the Eurozone reacted to the Global Crisis by injecting liquidity and loosening monetary policy. This column argues that despite the similarities in the behaviour of bank credit, the behaviour of bank reserves has been quite different. In particular, while US bank reserves have been on an uninterrupted upward trend since Lehman’s collapse, EZ bank reserves have fluctuated markedly in both directions. At the source, this is due to differences in the liquidity injections procedures between the Eurozone and the Fed.

China’s Dubious Growth
WSJ Apr 17, 2016
Nominal GDP surges due to stimulus, and so does debt.

US wealth inequality: Quantifying the driving factors
Markus Poschke and Baris Kaymak (VoxEU) Apr 17, 2016
Recent decades have seen a remarkable increase in the concentration of wealth in the hands of the wealthiest in the US. This column examines which factors may have driven this increase. The evidence points to higher wage inequality, often attributed to new developments in the technology of production, as the main driving force, followed by tax cuts for top earners and more generous public transfers as secondary factors. Recent decades have seen a remarkable increase in the concentration of wealth in the hands of the wealthiest in the US. This column examines which factors may have driven this increase. The evidence points to higher wage inequality, often attributed to new developments in the technology of production, as the main driving force, followed by tax cuts for top earners and more generous public transfers as secondary factors.

Collapse of Doha talks highlights the rise of Mohammed bin Salman
Roula Khalaf (FT) Apr 18, 2016
The influence of the deputy crown price over Saudi oil policy is growing.

Connections, not armies, make countries powerful
Anne-Marie Slaughter (FT) Apr 18, 2016
States that control information are the ones that shape events.

Securing Peace With Trade and Diplomacy
Chuck Hagel and Bob Kerrey (WSJ) Apr 18, 2016
Presidential candidates on both sides seem to have forgotten the lessons of the post-Vietnam War era.

Humanity’s Future – Fragile or Hyperconnected, or Both?
Andrew C. Revkin (NYT) Apr 18, 2016
How changing flows of money, information and trade are rendering old notions of borders and geopolitics obsolete.

Aid trend is reversing: More money to the poorest
Erik Solheim (OECD Insight) Apr 18, 2016
Global development aid reached a record high in 2015. Being inspired to do even better, we should also focus on the main purpose of aid. Is it to be the salt or the oil in the water?

U.S. Trade Policy: Populist Anger or Out-of-Touch Elites?
Jeff Faux (Globalist) Apr 18, 2016
Just how disconnected is the business elite and Washington policy class from the way most Americans actually experience the U.S. economy?

China's Future: Neither Boom Nor Bust
Arthur R Kroeber (Bloomberg View) Apr 18, 2016
Like Japan, the country appears headed for a period of genteel decline.

The Financial Threats That Machines Can See
Mark Buchanan (Bloomberg View) Apr 18, 2016
What's next, and when? Ask an algorithm.

Untried, Untested, Ready: Remedies for the Global Economy
Bloomberg View Apr 18, 2016
The stubbornly persistent global slump demands bolder thinking.

Plans To Talk Up the Oil Price Backfired
Leonid Bershidsky (Bloomberg View) Apr 18, 2016
Saudi Arabia would rather have no deal than let Iran increase production.

G-20 Delivers Empty Warning on Global Economy
Mohamed Aly El-Erian (Bloomberg View) Apr 18, 2016
A correct assessment of the deteriorating global economy wasn't backed up by new policies.

How to Save Brazil
Luiz Felipe d'Avila (Project Syndicate) Apr 18, 2016
While President Dilma Rousseff's potential impeachment throws Brazil's politics into disarray, the country's economy is facing its worst recession in 80 years. To get Brazil back on track, urgent action is needed to revive the economy, rebuild business confidence, and restore public trust in government.

Breaking Free from Fossil Fuels
Payal Parekh (Project Syndicate) Apr 18, 2016
Record-breaking global temperatures, plummeting fossil-fuel prices, historic investments in renewable energy, and global pressure to honor climate pledges are all coming together to create the ideal setting for this world-changing shift. To complete it, we must confront those who are profiting from global warming.

Gains from trade and openness: 1830 to 2014
Giovanni Federico and Antonio Tena-Junguito (VoxEU) Apr 18, 2016
The slowdown of global trade growth since the Global Crisis has raised concerns across the world. This column puts recent changes into perspective by presenting evidence on the export/GDP ratio and a rough measure of the gains from trade back to 1830. It shows that the interwar period was marked by a reversal of globalisation that makes recent trends look like a small blip. The slowdown of global trade growth since the Global Crisis has raised concerns across the world. This column puts recent changes into perspective by presenting evidence on the export/GDP ratio and a rough measure of the gains from trade back to 1830. It shows that the interwar period was marked by a reversal of globalisation that makes recent trends look like a small blip.

Q. and A.: Ning Zhu on the ‘Guaranteed Bubble’ in China’s Economy
Chris Buckley (NYT) Apr 19, 2016
Professor Zhu, a scholar at the Shanghai Advanced Institute of Finance, says government guarantees have encouraged hazardous levels of leverage as the economy slows.

Chile: Turning copper into wine
Lucy Hornby (FT) Apr 19, 2016
The commodity-dependent nation’s wine exporters have their sights on China’s casual drinkers.

Mission creep at the World Bank must stop
FT View Apr 19, 2016
Crisis lending should be the job of the International Monetary Fund.

Why We’re Reviewing Asset Management
Jacob J. Lew (WSJ) Apr 19, 2016
Assessing risk is vital to identify emerging threats before they can do damage.

Trump's Trade Policy Is a Big Loser
C. Fred Bergsten (PIIE/US News) Apr 19, 2016
A centerpiece of Donald J. Trump's presidential campaign has been his pledge to impose sizable tariffs on imports from China and Mexico. He wants to punish US companies that offshore manufacturing to other countries by taxing them heavily and imposing tariffs on their sales to the United States. No president can act aggressively on such matters, however, without congressional assent unless she or he were willing to abrogate US law and violate longstanding US international commitments.

Mario Draghi and Germany’s Fiscal Fetish
Hans-Helmut Kotz (Project Syndicate) Apr 19, 2016
The European Central Bank is under sustained political attack from Germany, a country that has long prided itself on defending the principle of central-bank independence. But, with monetary policy having replaced fiscal policy as the key policy tool to stimulate growth, might the old dogma be outdated?

China’s $5 Trillion Opportunity
Fred Hu and Jonathan Woetzel (Project Syndicate) Apr 19, 2016
In a world of economic turmoil, China has an advantage that others lack: a clear path forward. By raising productivity, China can address its growth challenges, reduce the risks of financial crisis, and complete its transition to a consumption-driven, high-income economy, with a large and affluent middle class.

How Germany Views Brexit
Clemens Fuest (Project Syndicate) Apr 19, 2016
On June 23, British voters will decide whether the United Kingdom should leave the European Union. For Germany, Europe’s largest economy, the consequences of Brexit could be grave, with the costs far outweighing any benefits.

US banks’ behaviour and bond issues after Lehman’s fall
Alex Cukierman (VoxEU) Apr 19, 2016
Following the collapse of Lehman Brothers, there was a fall in growth rates of net banking credit and total net new bond issues. This column discusses these events in detail. It also suggests that the decrease in credit was mainly due to supply shrinkage. The persistence of credit arrest beyond the two years following Lehman’s collapse is due to gradual enactment of tougher banking regulations along with growing awareness of low bailout probabilities. Following the collapse of Lehman Brothers, there was a fall in growth rates of net banking credit and total net new bond issues. This column discusses these events in detail. It also suggests that the decrease in credit was mainly due to supply shrinkage. The persistence of credit arrest beyond the two years following Lehman’s collapse is due to gradual enactment of tougher banking regulations along with growing awareness of low bailout probabilities.

Quantitative Easing: An Underappreciated Success
Joseph E. Gagnon (PIIE) Apr 19, 2016
After short-term interest rates in many advanced economies fell below 1 percent, central banks turned to quantitative easing (QE) to support economic growth. They purchased massive and unprecedented amounts of long-term bonds in an effort to reduce long-term borrowing costs. Nevertheless, recovery from the Great Recession proved disappointingly slow. Recently, some central banks have pushed short-term interest rates slightly below zero to provide an additional boost to growth. The slow recovery and the turn to negative rates have raised questions about the benefits of QE bond purchases and whether their effectiveness has reached a limit. Gagnon reviews the outpouring of research on QE and its effects and finds overwhelming evidence that QE does ease financial conditions and supports economic growth. The channels are similar to those of conventional monetary policy. QE can be especially powerful during times of financial stress, but it has a significant effect in normal times with no observed diminishing returns. Rarely, if ever, have economists studying a specific question reached such a widely held consensus so quickly. But this consensus has yet to spread more broadly within the economics profession or the wider world.

Obama's Cautious and Calibrated Approach to an Assertive China
Robert Sutter (YaleGlobal) Apr 19, 2016
Whether the US-China relationship after Obama continues with confrontation or cooperation may be in Xi’s hands.

Matteo Renzi’s clarion call for Africa should be heeded
FT View Apr 20, 2016
A surge in funds is needed but his eurobonds idea is a non-starter.

There is a trade-off between citizenship and migration
Branko Milanovic (FT) Apr 20, 2016
Immigration threatens to diminish the premiums enjoyed in rich countries.

Glitzy Bangkok puts a gloss on Thailand’s rising credit risk
Gavin Bowring (FT) Apr 20, 2016
Luxury developments surge ahead but elsewhere real estate and credit cycles may be turning.

India knocks China from top of FDI league table
Courtney Fingar (FT) Apr 20, 2016
Mega projects put Indians in global lead as slowing growth and rising costs hit Middle Kingdom.

Out of Africa, Part II
Thomas L. Friedman (NYT) Apr 20, 2016
A farming village too parched to sustain crops is also losing its men, who leave in search of work to support their families.

No more Fed follies
Desmond Lachman (AEI/US News) Apr 20, 2016
The central bank needs a better plan for the next time the US economy falters

Quicksand Kingdom: A Shaky Saudi Home Front
Alon Ben-Meir (Globalist) Apr 20, 2016
Domestic prospects look bleak for the Kingdom of Saudi Arabia.

The Hitchhiker’s Guide to the Islamic State
Marwan Hisham (FP) Apr 20, 2016
An accidental tour into the heart of the caliphate’s oil smuggling economy.

How Finance Took Over the Economy
Noah Smith (Bloomberg View) Apr 20, 2016
Competition doesn't seem to erode the industry's huge profits.

The Case Against Helicopter Money
Michael Heise (Project Syndicate) Apr 20, 2016
With the ECB's expansionary policies having failed to push inflation rates back up to the authorities' target of “below but close to 2%,” some economists are now advocating so-called “helicopter drops” – that is, financing private consumption with the printing press. Such a move would be a huge mistake.

The Migration Superpowers
Mark Leonard (Project Syndicate) Apr 20, 2016
Though much has been written about how a world on the move is changing national politics, there has been little consideration of its geopolitical effects. But the mass movement of people is already enabling countries to benefit in three ways.

The Promise of E-Procurement
Bjørn Lomborg (Project Syndicate) Apr 20, 2016
The international community has time and again reaffirmed its intent to stamp out corruption, most recently last year, when the UN adopted the Sustainable Development Goals. And now new research from Bangladesh points such efforts in a promising direction.

How inheritances influence wealth inequality
Mikael Elinder, Oscar Erixson and Daniel Waldenström (VoxEU) Apr 20, 2016
The distributional effect of inherited wealth has been a long-standing question in economics. This column presents new evidence on the issue using population-wide register data from Sweden. The findings show that inheritances decrease wealth inequality but increase the absolute dispersion of wealth. The equalising effect of inheritances is diluted, however, by the fact that less wealthy heirs consume most of their inherited wealth, whereas wealthier heirs tend to save theirs. The distributional effect of inherited wealth has been a long-standing question in economics. This column presents new evidence on the issue using population-wide register data from Sweden. The findings show that inheritances decrease wealth inequality but increase the absolute dispersion of wealth. The equalising effect of inheritances is diluted, however, by the fact that less wealthy heirs consume most of their inherited wealth, whereas wealthier heirs tend to save theirs.

So investors, what if the oil price heads south again?
Michael Mackenzie (FT) Apr 21, 2016
Strong oil and weak dollar influence shares, EM, junk debt and FX.

Net cash flows into EM corporate debt ‘could turn negative’
Steven Johnson (FT) Apr 21, 2016
Repayment of interest and principal may exceed issuance, buoying the market.

Asean demand for travel takes off
Liz Chong and Hafiz Noor Shams (FT) Apr 21, 2016
Low-cost airlines in the Philippines and Vietnam make most of cheap fuel prices.

Five Big Truths About Trade
Alan S. Blinder (WSJ) Apr 21, 2016
In 2000, the U.S. jobless rate was 4%, despite a trade imbalance larger than today’s. How could that be?

Officials Call for "Forceful, Balanced" Policy Mix at IMF-World Bank Meet
Bridges, Volume 20, Number 14 Apr 21, 2016
With downside risks to the global economy on the rise and growth still sluggish, countries need "to buttress confidence" in their respective policies and put in place a "more forceful and balanced policy mix," said finance ministers and central bank chiefs on Saturday 16 April in Washington.

At Brussels Meet, Countries Spar Over Steel Crisis' Causes, Solutions
Bridges, Volume 20, Number 14 Apr 21, 2016
The state of the international steel market took centre stage this week at a high-level meeting in Brussels, with government officials and industry representatives debating over what steps to take in order to curb the burgeoning global crisis.

The Fed’s Gamble on Surplus Labor
Larry Hatheway (Project Syndicate) Apr 21, 2016
In recent weeks, the US Federal Reserve has adopted a more gradual approach to policy normalization, causing commodity and emerging markets to surge. While these developments may not make sense at first glance, there is a logical thread that explains them – and it centers on a potentially high-stakes gamble.

The Post-Crisis Economy’s Long Debt Hangover
Carmen Reinhart (Project Syndicate) Apr 21, 2016
With the largest economies, nearly eight years after the global financial crisis, burdened by high and rising levels of public and private debts, it is baffling that comprehensive restructuring does not figure prominently among policymakers' options. Indeed, at last week's G-20 meeting, debt was the proverbial elephant in the room.

Should Britain Leave the EU?
Michael J. Boskin (Project Syndicate) Apr 21, 2016
The UK will vote in June on whether or not to remain in the EU. If British voters are to make the right choice, they will have to cut through the hyperbolic claims being made by leaders on both sides of the debate and consider carefully what so-called “Brexit” would really mean for their country.

How America Can Reap the Benefits of Brexit
Peter E. Harrell (FP) Apr 21, 2016
A British departure from the EU could be a good thing for the United States — with some careful planning.

Fast exchange rate pass-through
Barthélémy Bonadio, Andreas Fischer and Philip Sauré (VoxEU) Apr 21, 2016
According to standard estimates, exchange rate shocks affect import prices only slowly. This column presents evidence that challenges this view. Focusing on the large, unanticipated change in the Swiss franc in 2015, it shows that a change in import prices materialised very quickly. Prices started to move on the second working day after the exchange rate shock, and the medium-run pass-through of roughly 50% was reached after six additional working days. According to standard estimates, exchange rate shocks affect import prices only slowly. This column presents evidence that challenges this view. Focusing on the large, unanticipated change in the Swiss franc in 2015, it shows that a change in import prices materialised very quickly. Prices started to move on the second working day after the exchange rate shock, and the medium-run pass-through of roughly 50% was reached after six additional working days.

When Bitcoin Grows Up
John Lanchester (LRB) Apr 21, 2016
I’m not sure whether bitcoin is likely to be the most consequential of all the developments in cryptography: peer-to-peer lending and non-bank payment systems seem to me at least as likely to change lives, especially the lives of the poor. But there’s no denying that bitcoin is the best story.

Crisis in Brazil
Perry Anderson (LRB) Apr 21, 2016
In January 2015 Dilma Rousseff began her second presidency. Within three months, huge demonstrations packed the streets of the country’s major cities, at least two million strong, demanding her ouster. In Congress, the Brazilian Social Democracy Party and its allies moved to impeach her. How had it come to this?

How the rise of finance has warped our values
Mike Konczal (WP) Apr 22, 2016
A focus on profit turns the economy into a piggybank and people into portfolios.

The Fed's Dilemma
Julien Acalin and Jan Zilinsky (PIIE/People's Daily) Apr 22, 2016
The US Federal Reserve faces an uneasy choice. Despite solid rates of growth in the United States and China, the two engines of the world economy, the global economic environment has been characterized by sudden swings of mood and economic performance in the first months of this year, as evidenced by large movements in some major stock markets and commodities prices.

Losing the U.K. Wouldn't Be So Bad for Europe
Leonid Bershidsky (Bloomberg View) Apr 22, 2016
A British exit could tighten unity and make the EU more globally competitive.

The Price Britain Would Pay for Divorcing Europe
Clive Crook (Bloomberg View) Apr 22, 2016
How much is Britain willing to pay for sovereignty?

Why the U.S. Doesn't Want Britain to Secede
Bloomberg View Apr 22, 2016
Have a good laugh at the historical irony. But then do the math. Economically, a U.K. exit would be lose-lose-lose.

Cheap Oil’s Silver Lining for the Gulf
Nasser Saidi (Project Syndicate) Apr 22, 2016
Plunging oil prices have inflicted a massive shock on the economies of Middle East producers. What these countries have to understand is that, unlike past price declines, this one will not be transitory – and thus represents a perfect moment to launch comprehensive economic reforms.

The Brazil Syndrome
Anders Åslund (Project Syndicate) Apr 22, 2016
Slumping growth, if not outright contraction, in most of the world’s major emerging economies has been rightly attributed to China’s slowdown and plummeting commodity prices. But weak external conditions have also exposed profound governance failures – and not just in Brazil.

Time for Debt Reduction in Greece
Mohamed A. El-Erian (Project Syndicate) Apr 22, 2016
With Greece's cash balances severely stressed, another round of contentious discussions with its creditors has begun. The only way to escape this vicious cycle, and enable Greece finally to leave its troubles behind, is to stop kicking the can down the road and agree to a credible debt-reduction program.

Is Ethiopia the New China?
Zemedeneh Negatu (K@W) Apr 22, 2016
Manufacturers like its low-cost labor.

Financial regulation: Not yet an efficient outcome
Angus Armstrong and E Philip Davis (VoxEU) Apr 22, 2016
Since the Global Crisis, a number of regulatory policies have been discussed, proposed and sometimes implemented to address shortcomings in the regulatory framework. This column presents the views of the speakers at a recent conference on whether we have reached an efficient outcome. For most of the speakers, the answer was a resounding “no”. Since the Global Crisis, a number of regulatory policies have been discussed, proposed and sometimes implemented to address shortcomings in the regulatory framework. This column presents the views of the speakers at a recent conference on whether we have reached an efficient outcome. For most of the speakers, the answer was a resounding “no”.

Towards a fiscal union for the Eurozone
Céline Allard and John C Bluedorn (VoxEU) Apr 22, 2016
The turbulence experienced by the Eurozone in 2010-12 highlighted the shortcomings of the currency union. This column suggests that the crisis was exacerbated by a combination of a lack of market adjustment mechanisms, rapid financial integration, and underlying design issues. While substantial progress has been made to address some architectural issues, minimal elements of a fiscal union are still needed in our view to increase the union’s resilience to shocks and to prevent the re-emergence of broader economic and financial stress. The turbulence experienced by the Eurozone in 2010-12 highlighted the shortcomings of the currency union. This column suggests that the crisis was exacerbated by a combination of a lack of market adjustment mechanisms, rapid financial integration, and underlying design issues. While substantial progress has been made to address some architectural issues, minimal elements of a fiscal union are still needed in our view to increase the union’s resilience to shocks and to prevent the re-emergence of broader economic and financial stress.

The revenge of globalisation’s losers
Wolfgang Münchau (FT) Apr 24, 2016
Its failure in the west is down to democracies’ inability to cope with the economic shocks.

Africa: Between hope and despair
David Pilling (FT) Apr 24, 2016
Optimism surrounding the continent has evaporated with the collapse in commodity prices.

Review: ‘Taxing the Rich: A History of Fiscal Fairness in the United States and Europe’, by Kenneth Scheve and David Stasavage
Hugo Greenhalgh (FT) Apr 24, 2016
Making the rich pay their fair share.

China’s commodities rebound: it’s for real
Rafael Halpin (FT) Apr 24, 2016
Investors are wrong to expect a linear decline in China’s need for raw materials.

The Lessons of Our Bond War
Paul Singer (WSJ) Apr 24, 2016
After years of avoiding its obligations, Argentina made a deal with my firm and others that sends a good message on lending.

El Salvador’s Market Economy Under Siege
Mary Anastasia O'Grady (WSJ) Apr 24, 2016
A broke government wants to loot private pension accounts.

U.K. Exit Could Be Good for Europe
Clive Crook (Bloomberg View) Apr 24, 2016
Britain's departure could spark some bold thinking by the European Union.

Building common fiscal policy in the Eurozone
Guido Tabellini (VoxEU) Apr 24, 2016
In order to preserve financial integration and stability, the Eurozone needs to build elements of a common fiscal policy. This column, first posted 12 February 2016, discusses how this could be done. It proposes the creation of a European Fiscal Institute, modelled on principles similar to those used for the ECB. Such an establishment would require treaty and constitutional reforms in member states, which would not be politically feasible in the short term. In order to preserve financial integration and stability, the Eurozone needs to build elements of a common fiscal policy. This column, first posted 12 February 2016, discusses how this could be done. It proposes the creation of a European Fiscal Institute, modelled on principles similar to those used for the ECB. Such an establishment would require treaty and constitutional reforms in member states, which would not be politically feasible in the short term.

A bold bid to transform Saudi Arabia’s economy
FT View Apr 25, 2016
It would be dangerous to disappoint hopes of a less stifling society.

Will Saudi Arabia’s ambitious reform programme work?
David Gardner (FT) Apr 25, 2016
Mohammed bin Salman hopes to rebalance its economy away from oil.

Cheap Oil Means a New Reality for Middle East, North Africa Region
IMF Survey Apr 25, 2016
Growth in the Middle East, North Africa, Afghanistan, and Pakistan region remains subdued owing to low oil prices and deepening regional conflicts, said the IMF in its latest regional assessment.

TTIP Rhetoric and Reality: Europe’s Regulations at Risk
Frank Ackerman (Globalist) Apr 25, 2016
The real agenda is not eliminating lingering trade barriers, but compelling downward harmonization.

Argentina’s Triumphant Return to Capital Markets
Mohamed Aly El-Erian (Bloomberg View) Apr 25, 2016
The enthusiasm of investors could be premature.

Winning Friends Is an Expensive Business
Christopher Balding (Bloomberg View) Apr 25, 2016
Forcing Venezuela to pay for loans in oil was a terrible idea.

The Poverty of the Wealth Effect
Barry L Ritholtz (Bloomberg View) Apr 25, 2016
Higher asset prices don't cause faster economic growth. They reflect it.

German Scorn Could Kill the Transatlantic Trade Deal
Therese Raphael (Bloomberg View) Apr 25, 2016
Many of them just don't trust the U.S. to do the right thing.

The Euro's Next Existential Crisis
Mark Gilbert (Bloomberg View) Apr 25, 2016
For once, it isn't Greece that threatens to spark a crisis. It's Portugal.

America’s Trade Deficit Begins at Home
Stephen S. Roach (Project Syndicate) Apr 25, 2016
Thanks to fear mongering on the US presidential campaign trail, the trade debate and its impact on American workers is being distorted at both ends of the political spectrum. What the candidates won’t tell voters is that the trade deficit and the pressures it places on hard-pressed middle-class workers stem from domestic policies.

Europe’s Dangerous Nostalgia
Javier Solana (Project Syndicate) Apr 25, 2016
With every failed policy to aid economic recovery, Europeans have felt increasingly disenchanted, fueling populist sentiment and demands for a return to national sovereignty. But, while the economic pain that many feel is certainly real, the nationalists’ diagnosis of its source is false.

How to Finance Global Reflation
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 25, 2016
In recent years, unconventional monetary policy has shown that liquidity can be created against global savings, with relatively little impact on inflation, provided there is excess capacity in production and insufficient aggregate demand. It is time to take advantage of this newfound knowledge to revive the world economy.

Latin America’s Foxy Leaders
Andrés Velasco (Project Syndicate) Apr 25, 2016
A new kind of Latin American leader – moderate, intellectually humble, and prone to gradualism – has been in ascendance since the 1990s. The elder statesman of this generation of pragmatists, Patricio Aylwin, who led Chile from dictatorship to democracy a quarter-century ago, died last week.

Saudi Arabia Plans to Break Its ‘Addiction’ to Oil
Keith Johnson (FP) Apr 25, 2016
Deputy Crown Prince Mohammed bin Salman unveiled a sweeping plan to diversify the Saudi economy and wean its excessive reliance on oil by 2030.

Safeguarding the euro – balancing market discipline with certainty
Thorsten Beck (VoxEU) Apr 25, 2016
A lot has been achieved in terms of institution building to turn the Eurozone into a sustainable currency union. The Eurozone Crisis, however, has shown that the Eurozone is still not a properly functioning currency union. This column, first posted 12 February 2016, points to three areas of further reform to achieve such a goal. These include the disentanglement of sovereigns and banks, completion of a banking union, and an institutional convergence for a fully integrated financial system. A lot has been achieved in terms of institution building to turn the Eurozone into a sustainable currency union. The Eurozone Crisis, however, has shown that the Eurozone is still not a properly functioning currency union. This column, first posted 12 February 2016, points to three areas of further reform to achieve such a goal. These include the disentanglement of sovereigns and banks, completion of a banking union, and an institutional convergence for a fully integrated financial system.

Europe’s leap into the quantum computing arms race
Anjana Ahuja (FT) Apr 26, 2016
The €1bn plan is the latest EU future and emerging technologies megaproject.

Re-run of 1980s-style default wave ‘unlikely’
Steve Johnson (FT) Apr 26, 2016
Commodity exporters instead face sovereign downgrades and ‘long, hard grind’.

Arguments for Brexit do not add up
Martin Wolf (FT) Apr 26, 2016
The top 10 points in favour of an exit and how to rebut them.

The Mirage of a Return to Manufacturing Greatness
Eduardo Porter (NYT) Apr 26, 2016
As the candidates for president grapple with a vanishing manufacturing base, their solutions ignore the reality of an irrevocable change in the global economy.

Fed Still Uneasy About Steady Rate Hikes
Pedro Nicolaci da Costa (PIIE) Apr 26, 2016
Nobody minds a little attention now and again, but with all the drama and speculation hovering over Federal Reserve policy in recent years, policymakers likely enjoy some time away from the spotlight

Brexit: 7 Economic Myths
Kallum Pickering (Globalist) Apr 26, 2016
Sobering facts for those who advocate leaving the European Union.

Debt, not reserves, to constrain China’s cross-border buying spree
Alicia García-Herrero (Bruegel/Brink) Apr 26, 2016
Despite an $800 billion drain on China’s foreign reserves over the last 20 months, Chinese firms have been on a buying spree that has only accelerated since the beginning of the year.

Japan's Growing Poverty Defies Glib Explanations
Noah Smith (Bloomberg View) Apr 26, 2016
Conservatives blame personal behavior. Liberals point to free-market excesses. Neither is right.

Swift Hack Is a Story of Globalization and Poverty
Leonid Bershidsky (Bloomberg View) Apr 26, 2016
The messaging system on which most bank transfers depend has proved vulnerable in poor countries.

Why Are Central Banks on Trial Again?
Howard Davies (Project Syndicate) Apr 26, 2016
Central banks have been on a roller-coaster ride in the last decade, from heroes to zeroes and back again. Following the addition of a broad array of new supervisory functions over the past decade, their fortunes and reputations appear to be headed for another downswing.

Roman Europe?
Anatole Kaletsky (Project Syndicate) Apr 26, 2016
As the EU disintegrates, Germany has shown that it cannot provide the leadership needed to save it. With the UK, France, and Spain unwilling or unable to take on the role, that leaves Italy, which is resuming its historic role as a source of Europe’s best ideas and leadership in politics, and also, most surprisingly, in economics.

OPEC’s Control Over Global Oil Prices Slips Away
Chris Miller (YaleGlobal) Apr 26, 2016
In a competitive oil market with regional rivalries, OPEC members fail to coordinate production levels.

The Protestant Reformation, economic institutions, and development
Jeremiah Dittmar and Ralf Meisenzahl (VoxEU) Apr 26, 2016
Throughout history, most states have functioned as kleptocracies and not as providers of public goods. This column analyses the diffusion of legal institutions that established Europe’s first large-scale experiments in mass public education. These institutions originated in Germany during the Protestant Reformation due to popular political mobilisation, but only in around half of Protestant cities. Cities that formalised these institutions grew faster over the next 200 years, both by attracting and by producing more highly skilled residents. Throughout history, most states have functioned as kleptocracies and not as providers of public goods. This column analyses the diffusion of legal institutions that established Europe’s first large-scale experiments in mass public education. These institutions originated in Germany during the Protestant Reformation due to popular political mobilisation, but only in around half of Protestant cities. Cities that formalised these institutions grew faster over the next 200 years, both by attracting and by producing more highly skilled residents.

Speculators march into China commodities
Henry Sadnerson (FT) Apr 27, 2016
Mania grips trading in futures contracts as daily volumes soar.

Why edgier markets are here to stay in 2016
Richard Madigan (FT) Apr 27, 2016
The longer the investment cycle goes on, the trickier markets will get.

Brazilians turn to retail therapy
Richard House (FT) Apr 27, 2016
Premium beer and lipstick are the only products holding up as economy collapses

The City of London can survive and thrive after Brexit
Michael Geoghegan (FT) Apr 27, 2016
The EU will want to ensure it retains unfettered access to the UK.

The growing effects of China’s failure to reform
FT View Apr 27, 2016
Beijing must ensure that future stimulus is more profitably deployed.

Latin America’s Economic Slowdown Continues
IMF Survey Apr 27, 2016
As the global recovery continues to struggle to gain its footing, growth in Latin America and the Caribbean has been marked down further and is likely to contract for the second consecutive year in 2016, the IMF said.

The Economic Consequences of Brexit
OECD Insights Apr 27, 2016
Brexit would be a major negative shock to the UK economy, with economic fallout in the rest of the OECD, particularly other European countries.

The trillion dollar ocean
Claire Jolly (OECD Insights) Apr 27, 2016
For some, the ocean is the new economic frontier.

With Currency, Everything Is Relative
Frank Shostak (Mises Daily) Apr 27, 2016
What Determines a Currency’s Value?

The World Needs More U.S. Government Debt
Narayana Kocherlakota (Bloomberg View) Apr 27, 2016
The scarcity of safe assets is hurting the economy.

Saving the Planet One Light Bulb at a Time
Mark Gilbert (Bloomberg View) Apr 27, 2016
Market forces can fill gaps left by governments in addressing climate change.

Managing Debt in an Overleveraged World
Michael Spence (Project Syndicate) Apr 27, 2016
In the years since the 2008 global financial crisis, austerity and balance-sheet repair have been the watchwords of the global economy. And yet today, more than ever, debt is fueling concern about growth prospects worldwide.

Latin America’s Moment
Richard N. Haass (Project Syndicate) Apr 27, 2016
Much of the world’s attention is understandably focused on developments in the Middle East, Europe, and Asia. But an unintended consequence of this focus is that many governments, corporations, and people are missing much of what is going on in Latin America – and much of what is going on is good.

Is Jim Kim Destroying the World Bank — or Saving it From Itself?
Andrew Rice (FP) Apr 27, 2016
Jim Kim is out to salvage the World Bank's global relevance. But his radical reforms have critics calling for his head.

Trade costs of border controls in the Schengen area
Gabriel Felbermayr, Jasmin Gröschl and Thomas Steinwachs (VoxEU) Apr 27, 2016
The refugee crisis has placed Europe’s Schengen Agreement under stress, with some calling for the reintroduction of identity checks and other border controls. This column presents new estimates of the potential costs of such controls. On average, the removal of controls at one border acts like the removal of a 0.7% tariff. The controls currently notified to the EU Commission could lower EU GDP by around €12.5 billion. The full demise of Schengen would be about three times as costly. The refugee crisis has placed Europe’s Schengen Agreement under stress, with some calling for the reintroduction of identity checks and other border controls. This column presents new estimates of the potential costs of such controls. On average, the removal of controls at one border acts like the removal of a 0.7% tariff. The controls currently notified to the EU Commission could lower EU GDP by around €12.5 billion. The full demise of Schengen would be about three times as costly.

Meta-analysis of the economic impact of Brexit
Juergen Matthes and Berthold Busch (VoxEU) Apr 27, 2016
Studies attempting the quantify the economic effects for the UK of Brexit have come up with conflicting results – ranging from significant advantages to marked losses. Using a meta-analysis, this column shows this can be explained by different methods and assumptions, as well as varying coverage of effects. The forward-looking, model-based studies are unable to capture many positive effects of economic integration on welfare and growth. In comparison, backward-looking studies tend to find significantly larger trade effects of economic integration agreements. The meta-analysis suggests that in case of Brexit, GDP losses for the UK in the range of 10% or more cannot be ruled out in the long run. Studies attempting the quantify the economic effects for the UK of Brexit have come up with conflicting results – ranging from significant advantages to marked losses. Using a meta-analysis, this column shows this can be explained by different methods and assumptions, as well as varying coverage of effects. The forward-looking, model-based studies are unable to capture many positive effects of economic integration on welfare and growth. In comparison, backward-looking studies tend to find significantly larger trade effects of economic integration agreements. The meta-analysis suggests that in case of Brexit, GDP losses for the UK in the range of 10% or more cannot be ruled out in the long run.

Fighting deflation with unconventional fiscal policy
Francesco D'Acunto, Daniel Hoang, Michael Weber (VoxEU) Apr 27, 2016
The Eurozone faces zero inflation paired with low economic growth. With monetary policy hobbled by the zero lower bound, it is time to think more broadly. This column discusses the theoretical and empirical evidence on ‘unconventional fiscal policy’. Such policies aim to increase growth and inflation in a budget-neutral fashion, while keeping the tax burden on households constant. The Eurozone faces zero inflation paired with low economic growth. With monetary policy hobbled by the zero lower bound, it is time to think more broadly. This column discusses the theoretical and empirical evidence on ‘unconventional fiscal policy’. Such policies aim to increase growth and inflation in a budget-neutral fashion, while keeping the tax burden on households constant.

How rich nations benefit from EU membership
Nauro F. Campos, Fabrizio Coricelli, Luigi Moretti (VoxEU) Apr 27, 2016
One common concern about membership of the EU is the notion that poorer members have more to gain than richer ones. This column focuses on the countries that joined the EU in 1973 (Denmark, UK and Ireland) and in 1995 (Austria, Finland and Sweden). The authors estimate that these rich countries benefited substantially from joining the EU. Furthermore, while the benefits from EU membership to poorer countries tend to be mostly in terms of per capita income, for richer countries the benefits tend to be mostly in terms of productivity. One common concern about membership of the EU is the notion that poorer members have more to gain than richer ones. This column focuses on the countries that joined the EU in 1973 (Denmark, UK and Ireland) and in 1995 (Austria, Finland and Sweden). The authors estimate that these rich countries benefited substantially from joining the EU. Furthermore, while the benefits from EU membership to poorer countries tend to be mostly in terms of per capita income, for richer countries the benefits tend to be mostly in terms of productivity.

Emerging market flows maintain their momentum in April
Jonathan Wheatley (FT) Apr 28, 2016
Strong inflows help to compensate for outflows at start of year, though analysts warn of turbulence.

Obama, EU Leaders Make TTIP Push as "Brexit" Debate Escalates
Bridges, Volume 20, Number 15 Apr 28, 2016
US President Barack Obama met with a series of EU national leaders over the past week to call publicly for negotiations on the Transatlantic Trade and Investment Partnership (TTIP) to speed up in the coming months, particularly given his limited time left in office.

EU Trade Chief Outlines Possible Areas for Updating WTO Rulebook
Bridges, Volume 20, Number 15 Apr 28, 2016
EU Trade Commissioner Cecilia Malmström outlined on Tuesday a series of topics which, she suggested, could be constructive areas for future discussion as WTO members brainstorm how to move forward in a "post-Nairobi" negotiating landscape.

The income of the world’s poor is going up, but they’re $1 trillion poorer. What’s going on?
Deborah Hardoon (FP2P) Apr 28, 2016
According to the stats, the poorest half of the people are getting poorer even though their incomes are rising.

Economic Crisis This Year? Let’s Look at the Forecast
Patrick Artus (II) Apr 28, 2016
Whereas a cyclical slowdown may be in the cards for the next 12 months, regulatory reforms instituted after 2008 have helped buffer against a more dire outcome.

Global banking network’s role in shock transmission
Galina Hale, Tümer Kapan and Camelia Minoiu (VoxEU) Apr 28, 2016
Since the Global Crisis, cross-border lending among banks and its role in the transmission of financial shocks have gained a lot of attention. This column describes evidence from direct and indirect lending exposures among a large number of banks. The findings show that a larger number of exposures to banks in countries experiencing a systemic banking crisis reduces profitability and the supply of new credit. Both direct and indirect connections have economically significant effects, supporting the notion that interconnected systems are prone to shock transmission. Since the Global Crisis, cross-border lending among banks and its role in the transmission of financial shocks have gained a lot of attention. This column describes evidence from direct and indirect lending exposures among a large number of banks. The findings show that a larger number of exposures to banks in countries experiencing a systemic banking crisis reduces profitability and the supply of new credit. Both direct and indirect connections have economically significant effects, supporting the notion that interconnected systems are prone to shock transmission.

Do not let migration determine Britain’s place in Europe
Martin Wolf (FT) Apr 29, 2016
A dynamic economy can gain from importing people who both want to work and have the skills to do so.

China warns off commodities market punters
Lucy Hornby and Yuan Yang (FT) Apr 29, 2016
Regulator turns to text message warnings to retail speculators in latest effort to prevent a bubble.

The Uberization of Banking
Andy Kessler (WSJ) Apr 29, 2016
The fintech entrepreneur behind SoFi wants to move lending away from the big banks and onto your smartphone.

Obituary: Association of Southeast Asian Nations (1967-2016)
Philip Bowring (Asia Sentinel) Apr 29, 2016
Born in the Cold War, the treaty organization lapsed into irrelevance.

Closed borders will make Europe collapse
Carlo Bastasin (Brookings) Apr 29, 2016
Economic downturn, growing inequality, and an influx of foreign refugees are contributing to the rapid rise of authoritarian politics across the European Union. There is an urgent need for a recommitment to open borders and trade to prevent a return to the war-ridden Europe of old.

The “28 pages”: A Diversion From Real US-Saudi Issues
Gareth Porter (Globalist) Apr 29, 2016
When will the real contradictions between United States and Saudi interests finally begin to be openly acknowledged?

Time for a Global Restart, But How?
Daniel Stelter (Globalist) Apr 29, 2016
It seems we are headed for a deflationary wave or a wave of hyperinflations. But there is an alternative.

Mexico's Faltering Fight Against Corruption
Bloomberg View Apr 29, 2016
The ruling party is standing in the way of needed reforms.

Brexiteers Are Pining for Empire
Pankaj Mishra (Bloomberg View) Apr 29, 2016
The hope is that isolation will again make Britain great.

Money from Heaven?
Koichi Hamada (Project Syndicate) Apr 29, 2016
The world economy is struggling with persistently weak aggregate demand, below-target inflation, and slow or no growth. But these conditions, however troubling, should not lead central bankers to implement reckless policies – above all the “helicopter drops” that many are now advocating.

Japan’s Economic Quandary
Martin Feldstein (Project Syndicate) Apr 29, 2016
The Japanese economy is a paradoxical mixture of prosperity and failure. And, in a significant way, its prosperity makes its failures – beginning with its outsize budget deficit and government debt – difficult to address.

Don’t Do Stupid Economic Stuff
Jean Pisani-Ferry (Project Syndicate) Apr 29, 2016
For seven decades, the US government has been the ultimate fireman of the global system. Over that period, it has dealt with myriad crises worldwide and has learned to value discretion more than policy consistency.

The Next Global Boom – and Bust
Simon Johnson (Project Syndicate) Apr 29, 2016
The medium-term scenario for the global economy is unlikely to be stagnation. But the biggest question is whether a return to robust global growth is possible without debt-fueled overconsumption, overinvestment, and overexpansion of government spending.

Rescue Helicopters for Stranded Economies
J. Bradford DeLong (Project Syndicate) Apr 29, 2016
With interest rates in many countries at or near zero, aversion to fiscal expansion reflects raw ideology, not pragmatic considerations. That means a flanking move might be required, one that takes advantage of the fact that “monetary policy” is and always has been “fiscal policy.”

Saudi Arabia’s Reform Path
Ishac Diwan (Project Syndicate) Apr 29, 2016
Nearly two years after oil prices began their precipitous decline, leading global producers are facing the prospect of major adjustments that will have far-reaching economic, social, and political consequences. In this context, how viable is Saudi Arabia new Vision 2030 plan for ensuring sustainable long-term growth?

Taking Stock: Income Inequality and the Stock Market
Michael T. Owyang and Hannah Shell (FRBSL Econ Synopses) Apr 29, 2016
Financial crises affect high-income earners disproportionately because of their exposure to riskier assets.

Fiscal policy remains critical for much of the world economy
Jason Furman and Jay C. Shambaugh (VoxEU) Apr 29, 2016
In terms of GDP and unemployment, the US’s recovery from the crisis was relatively rapid. This was in large part due to forceful fiscal policy conducted by the Obama Administration. This column surveys the lessons for other economies, which have seen less-convincing recoveries. Around the world, increased spending and tax cuts over the last eight years have had positive effects. Continuing recovery will require concerted action in these directions. In terms of GDP and unemployment, the US’s recovery from the crisis was relatively rapid. This was in large part due to forceful fiscal policy conducted by the Obama Administration. This column surveys the lessons for other economies, which have seen less-convincing recoveries. Around the world, increased spending and tax cuts over the last eight years have had positive effects. Continuing recovery will require concerted action in these directions.

The 21st-century economy: How to measure prosperity
Economist Apr 30, 2016
GDP is a bad gauge of material well-being. Time for a fresh approach.

Economics of TPP: Winners and losers
Peter A. Petri and Michael Plummer (VoxEU) Apr 30, 2016
The Trans-Pacific Partnership faces serious a political challenge in the US, with some viewing it as primarily benefitting the wealthy. This column argues that it will slightly favour middle- and low-income US households, while also generating substantial benefits for poorer developing countries. As with any trade agreement, the gains and losses will be asymmetrically distributed, but the gains should permit ample support for individuals adversely affected.

Effects of aid on growth: Quasi-experiment evidence
Sebastian Galiani, Stephen Knack, Lixin Colin Xu and Ben Zou (VoxEU) Apr 30, 2016
A key problem in exploring how foreign aid affects economic growth is the endogeneity of aid in growth models. This column tackles the problem by exploiting an income threshold which, though arbitrary, is a key criterion in allocating scarce foreign aid resources. The evidence shows that, among poor countries where it is a large source of funding, foreign aid increases short-run economic growth.

Cross-border resolution regimes: Game-theoretic considerations
Ester Faia and Beatrice Weder di Mauro (VoxEU) Apr 30, 2016
The default of key financial intermediaries like Lehmann Brothers, as well as the global banking panic following the 2007-2008 financial crises, set in motion the path for a fundamental restructuring of the global financial architecture. This column argues that the most pressing question has been how to design an efficient mechanism for resolution of significantly important banks. Bail-in, as opposed to bailout, has been the worldwide solution. But this presents issues for global banks, which must adhere to the rules in many different jurisdictions.