News & Commentary:

Articles/Commentary

Brexit begins: Britain’s brutal encounter with reality
Economist Apr 1, 2017
Time to be honest about the trade-offs ahead.

Parliamentary Democracies Are Just Better at Resisting Populism
Leonid Bershidsky (Bloomberg View) Apr 1, 2017
A clear advantage is emerging for countries that don't directly elect a president.

Europe’s Illiberal Establishment
Yanis Varoufakis (Project Syndicate) Apr 1, 2017
The European Union's liberal establishment – in London and around the continent – is aghast at how populism is tearing Europe apart. Like the Bourbons, they have learned nothing and forgotten nothing.

How to get Britain back into the EU
Wolfgang Münchau (FT) Apr 2, 2017
There is no point doubling down on economic arguments.

The Truth About the China Trade Shock
WSJ Apr 2, 2017
New evidence shows that imports made firms and workers more competitive.

Tweaking a ‘disaster’
WP Apr 2, 2017
Mr. Trump’s bluster on NAFTA may prove hollow, but it soured relations with Mexico and Canada.

How will Trump and Xi approach trade issues?
David Dollar (EAF) Apr 2, 2017
Trump must recognise that 'threatening high tariffs is not likely to encourage China to yield and would backfire by hurting the US economy.

Zombies Are Eating Asia
Michael Schuman (Bloomberg View) Apr 2, 2017
Efforts to keep unviable businesses alive are preventing a recovery.

Illiberal Stagnation
Joseph E. Stiglitz (Project Syndicate) Apr 2, 2017
Vladimir Putin and other post-communist autocrats sell their system of “illiberal democracy” on the basis of pragmatism, not some universal theory of history. But while they have certainly been effective in stirring nationalist sentiment and stifling dissent, they have been less successful at nurturing long-term economic growth.

Delivering on Promises to the Middle Class
Michael Spence and David Brady (Project Syndicate) Apr 2, 2017
US President Donald Trump owes his electoral victory largely to the older white middle- and working-class voters who have missed out on the benefits of economic growth over the last 30 years. But his administration's economic program will not deliver the reversal of economic fortune his key constituency was promised.

Did the U.S. Just Pull Out of a Global Anti-Corruption Group?
Adam Davidson (New Yorker) Apr 2, 2017
Officials in the Trump Administration appear to be quietly sidelining an agreement meant to make government relationships with oil-and-gas companies more transparent.

Global repercussions of the US tight oil boom
Lutz Kilian (VoxEU) Apr 2, 2017
Technological advances caused a boom in the production of ‘tight’ oil in the US, starting in 2008, which has changed how the US is affected by movements in global fuel prices. This column identifies how the US tight oil boom contributed to the decline of global oil prices in 2014-16, and how it has changed the way oil price shocks are transmitted – not just in the US but in the global economy, explaining how European gasoline prices have been less responsive than the US price of gasoline to shocks. Technological advances caused a boom in the production of ‘tight’ oil in the US, starting in 2008, which has changed how the US is affected by movements in global fuel prices. This column identifies how the US tight oil boom contributed to the decline of global oil prices in 2014-16, and how it has changed the way oil price shocks are transmitted – not just in the US but in the global economy, explaining how European gasoline prices have been less responsive than the US price of gasoline to shocks.

A small outcrop reminds Britain of Brexit’s perils
FT View Apr 3, 2017
Gibraltar is unlikely to break EU talks, but this is just the beginning.

Test of nerve awaits investors as Q2 dawns
FT Apr 3, 2017
French elections stand out, but US earnings, Trump and Opec will be influential.

Amicable Brexit divorce hinges on cash settlement
Gideon Rachman (FT) Apr 3, 2017
The question for Berlin is: who will fill the hole in the EU budget when Britain goes.

Mexico Ready to Play the Corn Card in Trade Talks
Kirk Semple (NYT) Apr 3, 2017
Much of the corn Mexico consumes comes from the United States, potentially making it a useful lever in negotiations over Nafta.

A World Unsafe for Democracy
Bret Stephens (WSJ) Apr 3, 2017
Freedom rests on wings of butterflies—and the moral confidence of America.

Is China’s innovation strategy a threat?
Robert Kalcik (Bruegel) Apr 3, 2017
A number of recent contributions accuse China of acquiring technology from abroad without respecting international rules. We review the current debate that focuses on China’s supposed push to modernise its industry and the challenges for advanced economies. By leapfrogging to high-tech manufacturing products, the strategy threatens the competitive advantage of the US and the EU. The international rules-based order is put to a test facing large-scale government support to high-value added sectors and anti-competitive behaviour.

Scaling Back: A Look at Six Key Macro Risks and Economic Drivers
Joachim Fels (PIMCO) Apr 3, 2017
We are now more confident in our baseline view that the global economic expansion will be strengthening and broadening over our cyclical horizon.

Reinvigorating Productivity Growth
Christine Lagarde (IMF) Apr 3, 2017
Productivity growth is an essential part of fostering growth that reliably raises the income of all citizens, because it is the most important source of higher income and rising living standards over the long term. It allows us to substantially grow the economic pie, creating larger pieces for everyone.

Europe’s Firm But Fair Approach to Brexit
Bloomberg View Apr 3, 2017
Draft guidelines for EU negotiators wisely allow room for compromise.

Bond Markets Are Looking More Perilous by the Day
Charles Lieberman (Bloomberg View) Apr 3, 2017
The risk now is that the Fed is forced to normalize rates at a faster pace, disrupting markets.

China's Success Explains Authoritarianism's Allure
Tyler Cowen (Bloomberg View) Apr 3, 2017
It's natural for people to want to copy a strong government and economic powerhouse.

What's Really Driving the Trade Deficit With China
Michael Pettis (Bloomberg View) Apr 3, 2017
Hint: It's not cars or clothes or computers.

Putin Is Up, But Russians Are Feeling Down
Leonid Bershidsky (Bloomberg View) Apr 3, 2017
Even with the economy on the mend, protesters have returned to the streets.

The GDP Is a Flawed But Magical Indicator
Leonid Bershidsky (Bloomberg View) Apr 3, 2017
It isn't an exact science, but the results usually make sense.

The Truth About Development Aid
Mark Suzman (Project Syndicate) Apr 3, 2017
The Trump administration recently proposed deep cuts in US foreign aid investments. But, when it comes to addressing many of the world’s greatest inequities, aid matters as much as ever – and perhaps even more – for reasons that are not widely understood.

Artificial Intelligence and Artificial Problems
J. Bradford DeLong (Project Syndicate) Apr 3, 2017
It is unhelpful to stoke fears about "the rise of the robots" or the possibility that artificial intelligence will take American jobs. If public policy ensures a fair balance of relative incomes across society, technological progress in a market economy need not impoverish unskilled workers.

The spread of modern manufacturing to the poor periphery
Kevin O'Rourke and Jeffrey Williamson (VoxEU) Apr 3, 2017
The Great Divergence in living standards between the West and the Rest is being eroded as developing economies rapidly industrialise. This column explores the origins of modern industrial growth in regions that fell behind the West during the Great Divergence. Modern manufacturing growth in the global periphery dates back to the interwar period, and in some regions much earlier. It depended on a complex interaction between factor endowments, the global context, economic policies, and luck. The Great Divergence in living standards between the West and the Rest is being eroded as developing economies rapidly industrialise. This column explores the origins of modern industrial growth in regions that fell behind the West during the Great Divergence. Modern manufacturing growth in the global periphery dates back to the interwar period, and in some regions much earlier. It depended on a complex interaction between factor endowments, the global context, economic policies, and luck.

The eurozone recovery stays happily on track
FT View Apr 4, 2017
Governments must aim for dynamic economies and stable politics.

Chinese finance is storing up trouble for the rest of the world
Martin Wolf (FT) Apr 4, 2017
Given its macroeconomic imbalances, China could unleash global mayhem.

Donald Trump will make trade fair again
Wilbur Ross (FT) Apr 4, 2017
The president will take measured and rational action to correct any unfair practices.

There is a case for universal basic services, not income
Diane Coyle (FT) Apr 4, 2017
Simply paying people will not help if the fabric of a thriving economy is lacking.

China’s export of capital offers new opportunities for Africa
David Dollar and Astrid R.N. Hass (FT) Apr 4, 2017
Countries should develop policies to attract labour-intensive production leaving China.

The Challenge at Mar-a-Lago: Wooing China to Drop Its Tariffs
Bill Lane (WSJ) Apr 4, 2017
Beijing joined the WTO in 2001 on terms that no longer make sense for an industrial powerhouse.

Greece Needs More Official Debt Relief—But How Much and at What Price?
Jeromin Zettelmeyer (PIIE) Apr 4, 2017
Europe’s Greece problem, which brought the euro area to the brink of a breakup in 2015, is back in the headlines. And so, too, is the issue of whether Greece can succeed without more debt relief—an issue on which European officials remain at loggerheads with the International Monetary Fund (IMF) and among each other.

Home is where the talent is
Brian Caplen (Banker) Apr 4, 2017
Brexit will send some jobs to Paris and Frankfurt but the most important factor keeping banks in London is the talent pool.

Falling Real Yields Are the Key to Understanding Today's Markets
Ben Emons (Bloomberg View) Apr 4, 2017
Negative rates are weighing on the dollar, helping push asset prices to record or near-record highs.

New Currency Peg Is No Panacea for Iceland
Mohamed Aly El-Erian (Bloomberg View) Apr 4, 2017
Managing a small, open economy is becoming a lot harder amid trade and economic fluidity.

Housing Boom Is Anything But as Ownership Loses Appeal
Gary Shilling (Bloomberg View) Apr 4, 2017
There is little correlation between the number of U.S. households and the population aged 25 to 44.

Growing Out of Populism?
Kenneth Rogoff (Kenneth Rogoff) Apr 4, 2017
After nine dreary years of downgrading their GDP forecasts, macroeconomic policymakers around the world are shaking their heads in disbelief. Despite a populist-propelled wave of political tumult, global growth is actually set to outperform expectations in 2017.

The Truth About NAFTA
Laura Tyson (Project Syndicate) Apr 4, 2017
As US President Donald Trump considers bids for building a “beautiful wall” to control immigration on the US-Mexico border, his administration is also poised to renegotiate the North American Free Trade Agreement. As US officials move forward, they would do well to recognize some basic facts.

The conduct of monetary policy in a diverse monetary union
Enrico Perotti (VoxEU) Apr 4, 2017
The members of the Eurozone are diverse in terms of their institutional quality. This column outlines the redistributive effects created by the rigid structure of a monetary union next to its direct effects on monetary credibility, and highlights the general equilibrium benefits that core countries draw from it and the cost paid by the productive sector in ‘weaker’ countries. Europe faces a clear challenge, but the success of the transition to the banking union suggests that collective efforts towards institutional evolution can succeed. The members of the Eurozone are diverse in terms of their institutional quality. This column outlines the redistributive effects created by the rigid structure of a monetary union next to its direct effects on monetary credibility, and highlights the general equilibrium benefits that core countries draw from it and the cost paid by the productive sector in ‘weaker’ countries. Europe faces a clear challenge, but the success of the transition to the banking union suggests that collective efforts towards institutional evolution can succeed.

The role of rainfall in Africa's ethnic conflicts
Andrea Guariso and Thorsten Rogall (VoxEU) Apr 4, 2017
There is a lively debate about the role of inequality as a trigger of ethnic conflicts. This column reports groundbreaking research into the effect of the amount of regional rainfall on crops, which is used to measure inequality between ethnic groups. Inequality caused by the weather's effect on crops has a large and significant impact on the prevalence of ethnic conflict. This effect is strongest when a lack of rainfall penalises ethnic groups with no access to power. There is a lively debate about the role of inequality as a trigger of ethnic conflicts. This column reports groundbreaking research into the effect of the amount of regional rainfall on crops, which is used to measure inequality between ethnic groups. Inequality caused by the weather's effect on crops has a large and significant impact on the prevalence of ethnic conflict. This effect is strongest when a lack of rainfall penalises ethnic groups with no access to power.

US retreat from global financial system lets China in
Henny Sender (FT) Apr 5, 2017
Companies are having to look closer to home to raise capital.

Net Asian FDI falls to record low
Steve Johnson (FT) Apr 5, 2017
Foreign investment in China crumbles even as Chinese companies open their wallets.

Economics unpicks Mandela’s grand bargain for South Africa
David Pilling (FT) Apr 5, 2017
The conditions of the majority black population have barely changed since apartheid.

Signals from Brazil
John Authers (FT) Apr 6, 2017
Finance minister Henrique Meirelles is upbeat about reforms to the country’s economy.

How Trump Can Improve the Messy U.S.-Chinese Economic Relationship
Neil Irwin (NYT) Apr 5, 2017
A time to pick the right fights, while resisting the urge to announce a big splashy deal.

How Trump can stop China from eating our lunch
Robert D. Atkinson (WP) Apr 5, 2017
The president is right about China’s trade policies, but tariffs and isolationism won’t solve the problem.

Do Border Adjusted Taxes Affect Trade or the Exchange Rate?
Caroline Freund and Joseph E. Gagnon (PIIE) Apr 5, 2017
As the United States considers moving to a destination-based cash flow tax, there is growing concern about the impact of the proposed border adjustment on trade.

Lesson Learned (Again) from Macroeconomic Populism in Venezuela
Monica de Bolle (PIIE) Apr 5, 2017
The Venezuelan debacle presents too many lessons to distill, and the consequences of the sovereign default that will inevitably follow the regime's complete implosion are uncertain. Nonetheless, what Venezuela's plight does not leave in doubt is that macroeconomic populism sows the seed of its ultimate demise, both economically and politically.

To Shrink the Trade Deficit With China, Tax Carbon
Ted Halstead (Bloomberg View) Apr 5, 2017
The most effective border-adjustment policy would create jobs and fight climate change.

Small European Currencies Are Just a Headache
Leonid Bershidsky (Bloomberg View) Apr 5, 2017
Currency pegs have outlived their usefulness. Countries should embrace floating exchange rates or join the euro.

Trump and Xi Could Break the System
Michael Schuman (Bloomberg View) Apr 5, 2017
The two leaders have one thing in common: a disdain for rules.

Europe's Addiction to Bailing Out Banks
Ferdinando Giugliano (Bloomberg View) Apr 5, 2017
Effective regulation means letting some banks fail.

Brazil Really Needs Its Most Hated Politician
Mac Margolis (Bloomberg View) Apr 5, 2017
President Michel Temer may be the country's last best hope for badly needed reforms.

How to Build China's City of the Future
Adam Minter (Bloomberg View) Apr 5, 2017
More high-profile special zones have failed than have succeeded.

Japan Can Teach U.S. How to Overcome National Rot
Noah Smith (Bloomberg View) Apr 5, 2017
Instead of wasting time on partisan political fights and culture wars, the country's leaders targeted real problems.

Europe’s Other Populist Problem
Anders Åslund (Project Syndicate) Apr 5, 2017
The policies that European governments have pursued since the 2008 financial crisis have crowded out sorely needed structural reforms. But if European countries are going to keep their populists at bay, they will need to make the changes needed to deliver higher long-term growth.

The European Art of the Deal
Harold James (Project Syndicate) Apr 5, 2017
Although critics often complain about the EU's internal negotiating process, it has undoubtedly produced positive results, especially in the tumultuous years since the 2008 financial crisis. The same cannot be said of US President Donald Trump's brand of deal-making, which has produced no deals.

Corporate Governance at Saudi Aramco
Alissa Amico (Project Syndicate) Apr 5, 2017
Since the announcement last year that shares of Saudi Aramco, the world’s largest oil company, would be up for sale, the media have been abuzz with speculation. Observers familiar with Saudi Arabia – not to mention the macroeconomic context – remain skeptical of the prospect of an imminent IPO.

The New Trans-Pacific Partnership
Anaïs Faure (Diplomat) Apr 5, 2017
The Pacific Alliance and ASEAN are crafting a key partnership of their own.

China Down: The Weight of the Past on China’s Struggle for Development
Richard Westra (WFR) Apr 5, 2017
A characterization of China’s 21st century meteoric growth in terms of its post World War II socialist development and the particular modalities of the post 1978 market reform process. It is argued that no state can free itself from generalised patterns of global accumulation as these have shaped the world economy from the 1980s into the present. Thus, despite decades of high growth, China will never become an advanced economy as did South Korea. Rather, China’s development path as the consumer goods assembly hub of the world has saddled it with mounting travails that portend the breakdown of its current order. How, then, will China egress from its economic girdles?

Routes for Latin America and the Caribbean to grow
Andrew Powell and José Juan Ruiz Gómez (VoxEU) Apr 5, 2017
Latin America and the Caribbean needs higher growth without increasing debt. This column, based on the new 2017 IDB macroeconomic report, argues that completing intra-regional trade integration is a low-hanging fruit. Trade deals abound, the region has advanced, but regional trade is low – current agreements are too complex and inconsistent. A bottom-up, concrete, politically viable action plan is outlined. Deeper integration would boost growth in any scenario, but the pay-off is even larger if the world becomes more protectionist. Latin America and the Caribbean needs higher growth without increasing debt. This column, based on the new 2017 IDB macroeconomic report, argues that completing intra-regional trade integration is a low-hanging fruit. Trade deals abound, the region has advanced, but regional trade is low – current agreements are too complex and inconsistent. A bottom-up, concrete, politically viable action plan is outlined. Deeper integration would boost growth in any scenario, but the pay-off is even larger if the world becomes more protectionist.

The global corporate saving glut
Peter Chen, Loukas Karabarbounis and Brent Neiman (VoxEU) Apr 5, 2017
Corporate saving has increased relative to GDP and corporate investment across the world over the past three decades, reflecting how the global decline in the labour has led to increased corporate profits. This column characterises these trends using national income accounts and firm-level data, and relates them to firm characteristics and the accumulation of financial assets. In response to declines in the components of the cost of capital, a model with capital market imperfections generates an increase in corporate saving similar to that found in the data. Corporate saving has increased relative to GDP and corporate investment across the world over the past three decades, reflecting how the global decline in the labour has led to increased corporate profits. This column characterises these trends using national income accounts and firm-level data, and relates them to firm characteristics and the accumulation of financial assets. In response to declines in the components of the cost of capital, a model with capital market imperfections generates an increase in corporate saving similar to that found in the data.

Why Trump’s Anti-Globalisation Agenda is Bad for America
Devashish Mitra (WFR) Apr 5, 2017
The Trump administration has been capitalising on the “dark-side of globalisation”. However, an anti-globalisation campaign might not be the best for the United States.

As Donald Trump blusters on trade, Brussels leads
FT View Apr 6, 2017
The EU’s calmer approach to negotiations gives it an edge.

Trump-style tariffs against China would shoot US in the foot
Max Zenglein (FT) Apr 7, 2017
Proposals for punitive levies would hurt American industry and boost Beijing’s resolve.

Britain’s dismal productivity is its biggest policy challenge
Martin Wolf (FT) Apr 6, 2017
The data suggest that bad management is both rife and persistent.

Spain: Boom to bust and back again
Tobias Black (FT) Apr 6, 2017
The economy is finally set to return to its pre-crisis level. But have the reforms come at too high a price?

ADB Identifies the Keys to Economic Progress
Philip Bowring (Asia Sentinel) Apr 7, 2017
Get your investment priorities right.

UK, Trading Partners Begin Laying Groundwork for Post-Brexit Deals
Bridges, Volume 21, Number 12 Apr 6, 2017
US President Donald Trump signed two trade-focused executive orders last week, with the former relating to trade deficit data and the latter on enforcing the collection of duties at the border. The US leader is also preparing to meet with Chinese President Xi Jinping this week, in a high-profile meeting that is expected to focus heavily on trade.

UK, Trading Partners Begin Laying Groundwork for Post-Brexit Deals
Bridges, Volume 21, Number 12 Apr 6, 2017
The UK continues informally exploring the option of foreign trade deals with non-EU partners for once the Brexit talks are completed, with officials reporting continued discussions with countries such as Canada and Switzerland.

IMF Chief Warns of Productivity Slowdown, Calls for Boosting Trade
Bridges, Volume 21, Number 12 Apr 6, 2017
A continued state of mediocre productivity growth could have harsh implications for social stability and living conditions around the world, said International Monetary Fund (IMF) Managing Director Christine Lagarde this week, who called for making trade part of the solution.

Not So Fast
Joachim Fels (PIMCO) Apr 6, 2017
Headline U.S. inflation as measured by personal consumption expenditures (PCE) rose 2.1% year-over-year in February 2017, finally exceeding the Fed’s 2% inflation target. But it’s probably not cause for great celebration. Core inflation remains below target, for one thing, and headline may drop again soon unless oil prices climb steeply. The Fed recently emphasized that its inflation target is “symmetric,” meaning a certain level of overshoots and undershoots are equally tolerated and there is no promise to correct deviations once they have occurred. To achieve a 2% average inflation target over time, the Fed may have to temporarily aim at above 2% inflation in “normal” times – that is, when the policy rate is not at the effective lower bound. Will the Fed overshoot 2% inflation as long as the fed funds rate is not at the lower bound? Perhaps not. For one thing, it is not clear whether the Fed could reliably engineer a significant overshoot even if it wanted to. Also, the current Fed appears to be in opportunistic tightening mode, and a future Fed (with different membership) may not want or be able to overshoot the target.

Traders Need to Start Giving the Euro and Pound Some Respect
Jason M Schenker (Bloomberg View) Apr 6, 2017
Markets may be discounting the potential for the ECB and BOE to tighten monetary policy.

Market Prejudices Lead to Big Mistakes for Investors
Mark Grant (Bloomberg View) Apr 6, 2017
From the Fed to OPEC, the game is rapidly changing and preconceived notions must be reevaluated.

What the Trump-Xi Meeting Will Mean for Markets
Komal S Sri-Kumar (Bloomberg View) Apr 6, 2017
Bringing some calm to trade relations.

China's Banks Are Still in Trouble
Christopher Balding (Bloomberg View) Apr 6, 2017
Analysts are cheering. But serious problems lurk beneath the surface.

Europe’s Reform Opportunity
Herman Van Rompuy, Janis A. Emmanouilidis and Fabian Zuleeg (Project Syndicate) Apr 6, 2017
The EU has emerged from the most dangerous phase of the eurozone crisis, but it isn't out of the woods yet. Barring the worst-case scenario of populist victories in the French and German elections this year, European leaders should seize the moment to pursue more ambitious reforms.

Race to the Top: The Case for the Financial Stability Board
Nathan Sheets (PIIE) Apr 6, 2017
The Financial Stability Board (FSB) has helped strengthen international financial regulatory standards, and as a result, the global economy—and hence the US economy—is more resilient and better able to support strong, sustainable, and balanced growth. The FSB has provided a framework to encourage other jurisdictions to toughen their regulatory regimes in line with steps taken in the United States. The FSB, however, does not have a perfect track record. Sheets suggests several areas where the governance, transparency, and the work program of the FSB could be improved. He argues that supporters of the FSB's work need to do a better job of presenting the case for international cooperation and showcasing the FSB's accomplishments. The United States has played a leadership role in the FSB since the group’s inception, and important benefits have flowed to the US economy as a result. If it fails to maintain its leadership position, he warns, other countries will step in to fill the vacuum, resulting in rules and practices in the global economy and financial system that evolve in directions that are inconsistent with US national interests.

Focus Germany: Investment: Public, residential – gradually picking up
Apr 6, 2017
In international debate public investment is often regarded as a useful lever for promoting higher domestic demand. Despite international criticism and political declarations of intent, public investment in Germany has only increased moderately over the past two years and has remained average, at best, on an international scale. In the coming years, however, public investment is expected to grow significantly. The current investment plans for the federal budget are 40% higher than those adopted in 2013. Public contracts for the construction industry in 2016 were between 15 and 27% above the average of the previous 10 years. The excellent state of the public finances at the various government levels also supports the prospect of increasing investment growth. However, severe capacity shortages in the construction industry are likely to mean that the high demand for investment will not quickly lead to an increase in construction activity. (Further articles: German housing market, Corporate bond boom in Germany, Result of the Saarland election).

Gut feelings can work in favour of immigrants
Tim Harford (FT) Apr 7, 2017
If we imagine restrictive migration policies apply to our lives, we see their flaws.

PEPFAR saves millions of lives in Africa. Keep it fully funded.
George W. Bush (WP) Apr 7, 2017
We are on the verge of an AIDS-free generation, but the people of Africa still need our help.

Myths about US foreign aid
George Ingram (Brookings) Apr 7, 2017
Many myths exist surrounding the current extent and necessity of U.S. foreign aid. George Ingram unpacks the most common misconceptions and explains why President Trump should reconsider his proposed cuts to foreign assistance programs.

We Know What Causes Trade Deficits
Joseph E. Gagnon (PIIE) Apr 7, 2017
On March 31, President Donald Trump ordered a study of the causes of the US trade deficit that will focus on trade barriers and unfair trade practices in foreign countries. Economists, however, broadly agree that trade barriers do not cause trade deficits.

Tech Startups and the Cities That Seduced Them
Richard Florida (Bloomberg View) Apr 7, 2017
Creative and innovative people are drawn to certain urban centers by other creative and innovative people. And walkability helps.

One Fact Constraining Globalization: It's a Big Planet
Tyler Cowen (Bloomberg View) Apr 7, 2017
Trade is remarkably resilient among neighboring countries.

Why Is Putin’s ‘Private Slush Fund’ Courting Jared Kushner?
Elias Groll (FP) Apr 7, 2017
Development bank Vnesheconombank greases a lot of Russia’s foreign-policy goals. And then it went to the White House.

The Migrant Boon
Ian Goldin and Jonathan Woetzel (Project Syndicate) Apr 7, 2017
Many of the immigration debates now raging around the world reflect the faulty assumption that admitting immigrants is an act of largesse – and a costly one, at that. But destination countries that take a thoughtful, long-term approach to immigration can capture large and tangible economic benefits.

What Next for Trump and Xi?
Rana Mitter (Project Syndicate) Apr 7, 2017
Donald Trump’s “America first” approach to US foreign policy would seem to create an opening for China to assert itself more forcefully on the world stage. But that assumes what remains to be seen: whether China’s leaders can reinvigorate their country’s decaying socioeconomic model.

What has bank capital ever done for us?
Òscar Jordà, Björn Richter, Moritz Schularick and Alan Taylor (VoxEU) Apr 7, 2017
Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies from 1870 to 2013 and for the post-WW2 period, and holds both within and between countries. The authors of this column reach this conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital. Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies from 1870 to 2013 and for the post-WW2 period, and holds both within and between countries. The authors of this column reach this conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.

The international elasticity puzzle is worse than you think
Lionel Fontagné, Philippe Martin and Gianluca Orefice (VoxEU) Apr 7, 2017
With Brexit and the election of Donald Trump, tariffs and exchange rates are back at the centre stage of policy debates. This column revisits the assumptions economists make when estimating how tariffs and exchange rates affect exporters’ performance. It argues that the elasticity of firm-level exports to firm-level export prices is an important factor that should be taken into account. Using French firm-level data, it finds that exporters react even more strongly to firm-level electricity cost shocks than to tariff or exchange rate shocks. With Brexit and the election of Donald Trump, tariffs and exchange rates are back at the centre stage of policy debates. This column revisits the assumptions economists make when estimating how tariffs and exchange rates affect exporters’ performance. It argues that the elasticity of firm-level exports to firm-level export prices is an important factor that should be taken into account. Using French firm-level data, it finds that exporters react even more strongly to firm-level electricity cost shocks than to tariff or exchange rate shocks.

Religious decentralisation and autocracy: The case of Islam
Emmanuelle Auriol and Jean-Philippe Platteau (VoxEU) Apr 7, 2017
The extent to which Islam is responsible for the problems encountered in countries in which it dominates has been the subject of much attention. This column explores the effect of religions with differing organisational structures on progressive institutional reforms, state corruption, and political stability. Decentralised religions such as Islam are more conducive to institutional stagnation and political instability than centralised religions such as Catholicism or Eastern Christianity, with negative consequences for long-term development. The extent to which Islam is responsible for the problems encountered in countries in which it dominates has been the subject of much attention. This column explores the effect of religions with differing organisational structures on progressive institutional reforms, state corruption, and political stability. Decentralised religions such as Islam are more conducive to institutional stagnation and political instability than centralised religions such as Catholicism or Eastern Christianity, with negative consequences for long-term development.

Greece’s creditors must act to end the gridlock
FT View Apr 9, 2017
Uncertainty over the bailout risks sending recovery into reverse.

The US must work on its economic relationship with China
Lawrence Summers (FT) Apr 9, 2017
Global co-operation matters more than short-term gain.

The US college debt bubble is becoming dangerous
Rana Foroohar (FT) Apr 9, 2017
Student loans are now 90 per cent public, in an eerie echo of the housing crisis.

Euro exit for Italy or France would be a trauma
Wolfgang Münchau (FT) Apr 9, 2017
The ERM exit showed that monetary regime changes are as complex as a war.

India Loses Faith in Trade
Mihir Sharma (Mihir Sharma) Apr 9, 2017
A major pan-Asian deal looks increasingly at risk.

Ballpoint pens and the danger of China’s ‘one-dragon’ policy
Hiroshi Murayama (Nikkei Asian Review/FT) Apr 10, 2017
In manufacturing, doing it all yourself is not always the smart choice.

Brexit and the Banks: Fight or Flight?
Barbara Casu (WFR) Apr 9, 2017
This article discusses the key implications of Brexit for the UK financial services industry, looking at the differences between: membership vs. access; passporting rights vs. equivalence principle; customs union vs. free trade agreement.

The Fed Could Use Less Book Learning and More Street Smarts
Joe Ricketts (WSJ) Apr 10, 2017
Academic economists are fine, but business leaders and bankers would bring an important perspective.

The Rising Importance of the ‘Secondary City’
Darryle Ulama (Brink) Apr 10, 2017
Intermediate cities are among the fastest growing and most creative places in the world, and often the economic engine of their larger counterparts

Brexit’s Real Purpose: Killing the EU?
Rupert Strachwitz (Globalist) Apr 10, 2017
From Murdoch to Mercer, there are deep-pocketed billionaires around the world that want to see the EU emasculated, if not abolished.

Let Europe Compete for London's Business
Bloomberg View Apr 10, 2017
Rivalry over jobs in finance will be good for the EU.

Impressive Market Resilience Shouldn't Be Taken for Granted
Mohamed Aly El-Erian (Bloomberg View) Apr 10, 2017
The uncertain political outlook in Europe, crisis in the Middle East, and rising tensions and North Korea have been shrugged off.

China Finally Halts Outflows. Now What?
Christopher Balding (Bloomberg View) Apr 10, 2017
Trapping money at home is only creating new problems.

Urban Inequality Is a Crisis, But Don't Blame Techies for It
Richard Florida (Bloomberg View) Apr 10, 2017
In the search for solutions, remember: Cities that are magnets for innovators also have more economic mobility.

Crouching Donald, Paper Tiger
Barry Eichengreen (Project Syndicate) Apr 10, 2017
Donald Trump’s comments about China during the US presidential campaign didn’t exactly bolster high hopes for Sino-American relations once he was elected. But the two leaders' summit at Mar-a-Lago showed that even a president as reckless as Trump knows that the US cannot afford to antagonize the Chinese.

China tosses a trade bone to the White House
FT View Apr 10, 2017
Beijing’s decision is economically insubstantial but politically savvy.

Forget empire — Britain wants less of the world, not more
Janan Ganesh (FT) Apr 10, 2017
What should strike observers is the relative absence of imperial neurosis.

Rainfall set to boost growth in southern Africa
Steve Johnson (FT) Apr 10, 2017
Drought conditions send food inflation spiralling on eastern side of continent.

Emerging markets are set to lead globalisation
Wang Wen (FT) Apr 10, 2017
We should embrace the next wave, rather than fomenting a backlash.

Trade: The benefits of foreign banks
Stijn Claessens and Neeltje van Horen (VoxEU) Apr 10, 2017
Foreign banks can be important for trade. They can increase the availability of external finance for exporting firms and help overcome information asymmetries. This column shows that firms in emerging markets tend to export more when foreign banks are present, especially when the parent bank is headquartered in the importing country. In advanced countries, where financial markets are more developed and information is more readily available, the presence of foreign banks does not play such a role. Financial globalisation through the local presence of foreign banks can thus positively affect real integration. Foreign banks can be important for trade. They can increase the availability of external finance for exporting firms and help overcome information asymmetries. This column shows that firms in emerging markets tend to export more when foreign banks are present, especially when the parent bank is headquartered in the importing country. In advanced countries, where financial markets are more developed and information is more readily available, the presence of foreign banks does not play such a role. Financial globalisation through the local presence of foreign banks can thus positively affect real integration.

Robots and jobs: Evidence from the US
Daron Acemoglu and Pascual Restrepo (VoxEU) Apr 10, 2017
As robots and other computer-assisted technologies take over tasks previously performed by labour, there is increasing concern about the future of jobs and wages. This column discusses evidence that industrial robots reduced employment and wages between 1990 and 2007. Estimates suggest that an extra robot per 1,000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, the decline of routine jobs, offshoring, other types of IT capital, or the total capital stock. As robots and other computer-assisted technologies take over tasks previously performed by labour, there is increasing concern about the future of jobs and wages. This column discusses evidence that industrial robots reduced employment and wages between 1990 and 2007. Estimates suggest that an extra robot per 1,000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, the decline of routine jobs, offshoring, other types of IT capital, or the total capital stock.

Germany rallies the EU’s economic liberals
FT View Apr 11, 2017
Berlin’s efforts to promote post-Brexit laissez-faire are unconvincing.

China faces a tough fight to escape its debt trap
Martin Wolf (FT) Apr 11, 2017
The country needs to rebalance its economy before opening up capital flows.

Blame technology not globalisation for rising inequality, says IMF
Gemma Tetlow (FT) Apr 11, 2017
Advanced-economy workers feeling effect of technological change, study finds.

How Technology Liberates Human Capital
Michael Milken and Igor Tulchinsky (WSJ) Apr 11, 2017
Digital innovation and robots are opening new possibilities for workers across the U.S. economy.

Currency Manipulation Has Another Meaning for Traders
Ben Emons (Bloomberg View) Apr 11, 2017
Hedging can help explain some of the recent seemingly head-scratching moves such as the dollar's weakness.

Tax Havens Can Be Surprisingly Close to Home
Mark Buchanan (Bloomberg View) Apr 11, 2017
The U.K., the Netherlands and Switzerland play bigger roles than they might have realized.

Management Practices Matter More Than You Think
Peter R Orszag (Bloomberg View) Apr 11, 2017
To understand macroeconomic changes, look at how individual companies are run.

How Markets Overcame Past Geopolitical Crises
Ben Carlson (Bloomberg View) Apr 11, 2017
Investors have recovered from even some of the most disastrous events.

Calling the Protectionists’ Bluff
Daniel Gros (Project Syndicate) Apr 11, 2017
Most reports about globalization in recent years have focused on its difficulties, such as declining levels of trade and the abandonment of “mega-regional” trade agreements. But, although new trade deals can spark controversies, it is highly unlikely that protectionism will prevail.

Too Late to Compensate Free Trade’s Losers
Dani Rodrik (Project Syndicate) Apr 11, 2017
Gone are the days when policy elites confidently asserted that globalization benefits everyone: we must, they now concede, accept that economic openness produces both winners and losers. But, as Donald Trump's US presidency is showing, buying the losers' support with strong social protections is no longer a viable option.

The Insecurity of Inequality
Kaushik Basu (Project Syndicate) Apr 11, 2017
Global inequality today is at a level last seen in the late nineteenth century – and it is continuing to rise. As the consequences feed through to geopolitics, eroding stability, the need to devise new rules, re-distribution systems, and even global agreements is no longer a matter of morals; increasingly, it is a matter of survival.

Government quality and returns to infrastructure investment
Riccardo Crescenzi, Marco Di Cataldo and Andrés Rodríguez-Pose (VoxEU) Apr 11, 2017
Transport infrastructure investment is a cornerstone of growth-promoting strategies around the world. However, investment in new infrastructure is not always conducive to stronger economic performance. This column argues that the lack of positive economic returns may be due to institutional failures mitigating the growth effects of public capital expenditures. In contexts marked by weak and inefficient governments and widespread corruption, different types of road investments yield low or no economic returns.

Austerity in the aftermath of the Great Recession
Christopher House, Christian Proebsting and Linda Tesar (VoxEU) Apr 11, 2017
Austerity policies implemented during the Great Recession have been blamed for the slow recovery in several European countries. Using data from 29 advanced economies, this column shows that austerity policies negatively affect economic performance by reducing GDP, inflation, consumption, and investment. It also warns that efforts to reduce debt through austerity in the depths of the economic recession were counterproductive.

Progress on benchmarking macroprudential policy strategies
Domenico Lombardi and Pierre Siklos (VoxEU) Apr 11, 2017
Macroprudential policies increasingly lie at the heart of how central banks jointly manage of price and financial stability. However, consensus over best practice has yet to emerge. This column presents an improved indicator to measure individual economies’ macroprudential policy capacity. Improvements include incorporating the shadow banking sector, and distinguishing the types of institutions that wield authority. Results suggest that improvements continue to be made with respect to the development of an international financial system with improved resilience to shocks.

India’s ambitious plan to tax goods and services
FT View Apr 12, 2017
Modi’s government should allow companies more time to adjust.

Britain needs to stop holding referendums
Sebastian Payne (FT) Apr 12, 2017
EU vote was flawed and there are better forms of democracy.

How Trump Will Make the Trade Deficit Worse
Mark Thornton (Mises Daily) Apr 12, 2017
Donald Trump campaigned on the economic issues of international trade, immigration, and jobs. He condemned international trade, immigrants, and the economic policies of countries such China and Mexico. As such, he should be made an honorary member of the mid-19th century “Know Nothing” political party.

Europe's Continental Divide is Market's Game of Risk
Mark Grant (Bloomberg View) Apr 12, 2017
From Greece to France to Italy, Europe once again poses big problems for investors globally.

China’s Evolving Economic Statecraft
Greg Levesque (Diplomat) Apr 12, 2017
Beijing’s use of commercial actors to carry out Party-state objectives requires a coordinated response.

Europe’s Surprising Tech Success
William Echikson (Project Syndicate) Apr 12, 2017
Europe is often viewed as a digital laggard, running far behind the US and Asia. But two new reports tell a very different story, showing how European startups are now taking the lead in artificial intelligence, creating new tech hubs, and attracting investment from traditional industrial stalwarts.

The Trump-Xi Summit Paves the Way to New Realism in US-Chinese Trade
Dan Steinbock (WFR) Apr 12, 2017
Despite preliminary pessimism, the Trump-Xi Summit showed greater trade pragmatism than initially expected, even though it was overshadowed by a raw display of US military power.

Economic Snapshot for Latin America
Ricardo Aceves (Focus Economics) Apr 12, 2017
Regional outlook leaves much to be desired.

Delights and perils of the global economic upswing
FT View Apr 13, 2017
Populism did not create the global recovery but it could ruin it.

The UK’s negotiating position on Brexit is a fantasy
Chris Giles (FT) Apr 13, 2017
Britain will have to budge and make concessions despite howls of protest.

Ideas of protectionism or ditching the euro stalk the French vote
Jean Tirole (FT) Apr 13, 2017
Voters seek change but these options will not help workers.

US, Chinese Leaders Aim for Negotiated Trade Outcomes Within 100 Days
Bridges, Volume 21, Number 13 Apr 13, 2017
US President Donald Trump and Chinese President Xi Jinping have agreed to negotiate a set of trade outcomes within just over three months, officials say, following two days of talks at the American leader’s resort in Florida.

WTO, IMF, World Bank Chiefs Call for Backing Trade, Domestic Adjustment Policies
Bridges, Volume 21, Number 13 Apr 13, 2017
Domestic steps such as providing more worker training and supporting housing, credit, and infrastructure policies can play a valuable role in addressing some of the labour market changes that result from trade, according to the heads of the World Trade Organization (WTO), International Monetary Fund (IMF), and the World Bank Group.

G20 Digital Ministers Unveil Roadmap, Trade Priorities
Bridges, Volume 21, Number 13 Apr 13, 2017
Ministers from the Group of 20 (G20) major advanced and emerging economies met in the German city of Düsseldorf from 6-7 April for talks on how to expand internet access and support the development of the digital economy, including through trade.

How Blockchain Can Restore Trust in Trade
Wolfgang Lehmacher and Jesse McWaters (BRINK) Apr 13, 2017
Blockchain technology could alleviate the pressure from threats to the supply chain and the security apparatus and become the new gold standard for trade.

Stop Pretending on Greek Debt
Bloomberg View Apr 13, 2017
Greece can't prosper unless the European Union breaks the cycle of falling growth and rising indebtedness.

The Ruble May Be Down, Though Not Out
Jason M Schenker (Bloomberg View) Apr 13, 2017
There are reasons to expect the Russian currency to strengthen, including gains in global growth.

America's Dangerous Amnesia About World Order
Francis J Gavin (Bloomberg View) Apr 13, 2017
The relative peace of the last eight decades has been the exception, not the rule.

Humankind: The Post-Truth Species
Yuval Noah Harari (Bloomberg View) Apr 13, 2017
The myths we decry today are what has always separated us from the other animals.

Powering Africa’s Transformation
Carlos Lopes, Aliko Dangote and Tony Elumelu (Project Syndicate) Apr 13, 2017
As African economies continue to place more emphasis on services and manufacturing, productivity and growth will improve. But African countries’ success presupposes that they generate and manage energy sustainably, which means making the most of the continent's abundant renewable-energy resources.

Tax reforms and top incomes
Enrico Rubolino and Daniel Waldenström (VoxEU) Apr 13, 2017
The link between tax progressivity and the income distribution is the subject of intense debate. This column presents new evidence from tax reforms during the 1980s and 1990s to examine how reduced progressivity affects top income shares. Reduced progressivity boosted top incomes, particularly for those in the top 0.1% of earners. Income tax changes are therefore a plausible candidate for explaining the recent surge in income inequality. The link between tax progressivity and the income distribution is the subject of intense debate. This column presents new evidence from tax reforms during the 1980s and 1990s to examine how reduced progressivity affects top income shares. Reduced progressivity boosted top incomes, particularly for those in the top 0.1% of earners. Income tax changes are therefore a plausible candidate for explaining the recent surge in income inequality.

Ethnic segregation and spatial income inequality
Roberto Ezcurra and Andrés Rodríguez-Pose (VoxEU) Apr 13, 2017
Spatial inequality is understood as a function of geography or administrative planning, but its relation to ethnic segregation is less well understood. This column analyses this relationship using regional data for 71 countries with different levels of economic development. The degree of spatial concentration of ethnic groups is a robust and highly significant predictor of within-country income disparities. More ethnically segregated countries experience higher levels of spatial inequality and are thus more prone to conflict. Spatial inequality is understood as a function of geography or administrative planning, but its relation to ethnic segregation is less well understood. This column analyses this relationship using regional data for 71 countries with different levels of economic development. The degree of spatial concentration of ethnic groups is a robust and highly significant predictor of within-country income disparities. More ethnically segregated countries experience higher levels of spatial inequality and are thus more prone to conflict.

Brazil’s Never-Ending Corruption Crisis
Brian Winter (FA) Apr 13, 2017
Why radical transparency Is the only fix.

Trump’s Weak-Dollar Temptation
WSJ Apr 14, 2017
Reagan and Clinton presided over a strong currency—and success.

On China, Trump Realizes Trade and Security Mix
Noah Feldman (Bloomberg View) Apr 14, 2017
This flip-flop is promising for future foreign policy.

Capital Keeps Flowing into Latin America
José Antonio Ocampo (Project Syndicate) Apr 14, 2017
Though Latin America – and South America, in particular – has been in crisis for years, foreign capital has continued to flow into the region. Are the days of sudden stops and abrupt reversals in external financing over?

The Second Year of Europe
Richard N. Haass (Project Syndicate) Apr 14, 2017
Of all the challenges confronting the EU, France’s upcoming presidential election holds the most significance for Europe’s future, and perhaps that of the world. But even if one of the two establishment candidates prevails, much will remain uncertain.

A Turning Point for Europe
Benedicta Marzinotto (Project Syndicate) Apr 14, 2017
The rise of European populism in 2016 gave new urgency to longstanding efforts to unify European Union and eurozone member states around shared social, political, and economic goals. Following the French and German elections this year, Europe may have a new opportunity – perhaps its last – to do just that.

European and Asian incomes in 1914: New take on the Great Divergence
Peter Lindert (VoxEU) Apr 15, 2017
The debate over how the real income gaps between countries have evolved over the centuries has heated up since the 1990s. This column argues for a reshuffling of the global ranks between Columbus and WWI. Findings include that (i) the real income gap between northwest Europe and the major Asian countries was greater since the 1500s than previously estimated; (ii) contrary to all previous estimates, Mughal India around 1600 was already far behind both Japan and Northwest Europe; and (iii) average incomes in North America were already higher than in Britain or France in the late 17th century, long before Maddison’s suggested catching-up date for the US versus Britain of around 1900. The debate over how the real income gaps between countries have evolved over the centuries has heated up since the 1990s. This column argues for a reshuffling of the global ranks between Columbus and WWI. Findings include that (i) the real income gap between northwest Europe and the major Asian countries was greater since the 1500s than previously estimated; (ii) contrary to all previous estimates, Mughal India around 1600 was already far behind both Japan and Northwest Europe; and (iii) average incomes in North America were already higher than in Britain or France in the late 17th century, long before Maddison’s suggested catching-up date for the US versus Britain of around 1900.

Zimbabwe’s cash cows are signal of desperation
FT View Apr 16, 2017
The new collateral regime exposes Mugabe’s economic mismanagement.

Donald Trump beats a retreat over China’s currency
FT View Apr 16, 2017
The rethink is welcome but doubts over presidential caprice multiply.

A two-speed post-Brexit Europe is best avoided
Hans-Werner Sinn (FT) Apr 16, 2017
EU member states should focus on striking a free-trade deal with Britain.

Chinese buyers fuel Brooklyn real estate boom
Rana Foroohar (FT) Apr 16, 2017
World property markets have become totally disconnected from national economies.

The shadow hanging over central bank control
Wolfgang Münchau (FT) Apr 16, 2017
In modern finance, money and debt have become increasingly commingled in a risky way.

‘Crude Volatility’, by Robert McNally — a story of boom and bust
Anjli Raval (FT) Apr 17, 2017
Analysis of the history and future of oil prices predicts a bumpy ride.

London’s housing crisis is abetted by illicit funds
FT View Apr 17, 2017
Revealing the true ownership of UK property may help stop the rot.

American farm belt anxious about Trump trade threats
Shawn Donnan (FT) Apr 17, 2017
Conservative rural states depend on agricultural exports to Mexico and China.

Avoid the Crony-Capitalist Temptation
Stanley A. Weiss (WSJ) Apr 17, 2017
The new Office of American Innovation could do a lot of good.

Why Don't All Jobs Matter?
Paul Krugman (NYT) Apr 17, 2017
Economic pain, beyond coal and manufacturing.

Emerging Markets Are Bouncing Back From a Six-Year Slowdown
Landon Thomas Jr (NYT) Apr 17, 2017
A faster-than-expected recovery in emerging markets, and the implications for global growth, are likely to be hot topics at the I.M.F. spring meetings.

Why China is beating the U.S. at innovation
Paul Davidson (USAT Apr 17, 2017
For decades, America lost factories and jobs to China but retained a coveted title: the world's leader in inventing and commercializing new products.

The "Big Bond": How to Maintain African Growth While Reducing the Fiscal Burden on Donors
Nancy Birdsall and Ngozi Okonjo-Iweala (CGD) Apr 17, 2017
Sub-Saharan African countries are at a critical juncture. With China's slowdown and the collapse in commodity prices, growth slipped to 3.4 percent in 2015, on average just over half what it has been for the past 15 years. Estimated growth for 2016 is below the population growth rate of about 2 percent, thus negative in per capita terms.

The global economic recovery is real, but can it last?
Eswar Prasad and Karim Foda (Brookings) Apr 16, 2017
The newly updated Brookings-Financial Times TIGER index reveals a broad-based and stable global economic recovery, despite political uncertainty ahead.

Japan Needs More People
Bloomberg View Apr 17, 2017
A demographic crisis is looming, and tweaks to the country’s immigration system don’t go far enough.

Saudi Bonds Provide Much-Needed Breathing Room
John Sfakianakis (Bloomberg View) Apr 17, 2017
The changing oil market may not allow the kingdom to simply wait until prices recover.

Bond Traders Blink as Geopolitical Risks Flare Up
Scott Dorf (Bloomberg View) Apr 17, 2017
Geopolitical risks are more smoke than fire at this point.

What a New Glass-Steagall Wouldn’t Do
Mark Whitehouse (Bloomberg View) Apr 17, 2017
Limiting the risk of runs is at least as important as splitting commercial and investment banking.

The Coming French Revolution
Zaki Laïdi (Project Syndicate) Apr 17, 2017
The upcoming French presidential election will likely come down to a contest between two political outsiders: Emmanuel Macron and Marine Le Pen. A victory for either one would herald a political revolution for France.

A Big Bond for Africa
Nancy Birdsall and Ngozi Okonjo-Iweala (Project Syndicate) Apr 17, 2017
At a time when Africa is facing serious economic challenges, aid from its traditionally generous foreign donors, including the US and Europe, is set to shrink, owing to political and economic constraints. But there may be a way to help Africa recover its growth in a way that Western leaders and their constituents find acceptable.

A new bargaining perspective on sovereign debt restructuring
Marcus Miller and Sayantan Ghosal (VoxEU) Apr 17, 2017
Lacking some supra-national, overseeing authority, sovereigns in default typically renegotiate with their creditors. In these negotiations, the owed principal typically receives a ‘haircut’. This column explores whether overburdened sovereign debtors can strategically leverage delay as they bargain with their creditors. Under asymmetric information, a delay in the form of offers that the debtor knows won’t be accepted can work out in the debtor’s favour. The findings suggest that strategic delay can be used to show where restructuring is necessary. Lacking some supra-national, overseeing authority, sovereigns in default typically renegotiate with their creditors. In these negotiations, the owed principal typically receives a ‘haircut’. This column explores whether overburdened sovereign debtors can strategically leverage delay as they bargain with their creditors. Under asymmetric information, a delay in the form of offers that the debtor knows won’t be accepted can work out in the debtor’s favour. The findings suggest that strategic delay can be used to show where restructuring is necessary.

Brexit: Whither the Pound?
Pierre-Olivier Gourinchas and Galina Hale (FRBSF Econ Letter) Apr 17, 2017
People of the United Kingdom voted to exit the European Union last June, a process dubbed “Brexit.” The persistent depreciation of the British pound since the vote suggests that U.K. economic conditions will be weakened over the long run following the separation from the EU. This projection of a persistent economic loss is based on the expected reversal of earlier gains from trade with other EU members and reduced cross-border labor flows.

Do Digital Currencies Pose a Threat to Sovereign Currencies and Central Banks?
Daniel Heller (PIIE) Apr 17, 2017
As long as central banks continue to pursue stability-oriented monetary policies, they will have little reason to fear that the bitcoin system will replace them.

America’s tax reform plan requires a road map
FT View Apr 18, 2017
Closing loopholes and cutting rates would be better than a border tax.

The fearless market ignores perils ahead
Robin Wigglesworth (FT) Apr 18, 2017
Volatility index has become the basis for aggressive products that create their own risks.

Dealing with America’s trade follies
Martin Wolf (FT) Apr 18, 2017
Its policies will fail to reduce deficits — for which foreigners will be blamed.

How Western civilisation could collapse
Rachel Nuwer (BBC) Apr 18, 2017
Some possible precipitating factors are already in place. How the West reacts to them will determine the world’s future.

When Low-Wage Workers Are Better than Robots
Justin Murray (Mises Daily) Apr 18, 2017
Time and time again, these pages have listed numerous benefits of automation and robotics. The discussions point out that mechanization doesn’t make us poor, that attempting to tax machines is counter-productive. Automation even makes our jobs safer as we can offload dangerous tasks to a metal creation.

US Exporters Could Face High Tariffs without NAFTA
Mary Amiti and Caroline Freund (PIIE) Apr 18, 2017
An underappreciated benefit of the North American Free Trade Agreement (NAFTA) is the protection it offers US exporters from extreme tariff uncertainty in Mexico.

Why the MiFID II deadline needs second extension
Brian Caplen (Banker) Apr 18, 2017
Even by the standards of post-crisis EU regulation, MiFID II is ambitious and expensive. A second deadline extension is needed.

Workers Made Germany Into the World's Best Economy
Noah Smith (Bloomberg View) Apr 18, 2017
Both exports and wages are on the rise from the depths of the financial crisis.

Bond Investors Shouldn't Panic Over French Elections
Komal S Sri-Kumar (Bloomberg View) Apr 18, 2017
Europe’s political turmoil may spell opportunity.

The Mullah-Led Development Model
Nadeem ul Haque (Project Syndicate) Apr 18, 2017
A longstanding debate in economics – and among social scientists more broadly – centers on how best to deliver international aid to developing countries. A response from the Islamic world may hold important lessons for devising the best way forward.

The Path to Universal Education
Jakaya Kikwete (Project Syndicate) Apr 18, 2017
Even as many low- and middle-income countries have stepped up their commitment to improving and expanding education opportunities, the sector has remained chronically underfunded. An International Finance Facility for Education could be the key to changing that.

Macri’s Disappointing First Year in Argentina
Martin Guzman (Project Syndicate) Apr 18, 2017
When President Maurizio Macri came to power in December 2015, his administration needed to address Argentina's fiscal and external imbalances, without undoing the progress in social inclusion that had been made over the previous decade. His approach, based on four key pillars, has not achieved that.

How Middle Eastern Immigrants Boost US Competitiveness
Sami Mahroum (Project Syndicate) Apr 18, 2017
Inventors from predominantly Muslim countries are vital to US innovation. President Donald Trump’s proposed travel ban, if enacted in whole or part, would do more than cheapen the American dream: it would weaken the country’s standing as the world’s capital of new ideas.

Why Renegotiating NAFTA Could Disrupt Supply Chains
Mary Amiti, Caroline Freund and Tyler Bodine-Smith (PIIE) Apr 18, 2017
Supply chains have become increasingly interlinked across the US-Mexico border. The North American Free Trade Agreement (NAFTA), allowing tariff-free commerce between the United States, Canada, and Mexico, has facilitated this integration.

Brexit: A new industrial strategy and rules on state aid
Nicholas Crafts (VoxEU) Apr 18, 2017
Depending on the outcome of negotiations, Brexit potentially changes the rules that govern the use of industrial policy. The UK government has in mind risky policy reforms that appear to be incompatible with EU rules on state aid. This column argues that this is an unheralded downside of a hard Brexit. Depending on the outcome of negotiations, Brexit potentially changes the rules that govern the use of industrial policy. The UK government has in mind risky policy reforms that appear to be incompatible with EU rules on state aid. This column argues that this is an unheralded downside of a hard Brexit.

The pitfalls of having to buy and hire American
FT View Apr 19, 2017
Donald Trump’s review of visas and procurement carries serious risk.

China’s capital controls dent inbound investment
Don Weinland (FT) Apr 19, 2017
Global investors fear funds could become trapped after restraints on outflows.

Why we love free trade — sometimes
Robert J. Samuelson (WP) Apr 19, 2017
Americans’ attitudes on trade are confusing, inconsistent and variable.

“Buy American, Hire American!”: A Worrisome Slogan
Gary Clyde Hufbauer and Cathleen Cimino-Isaacs (PIIE) Apr 19, 2017
In calling for a policy of “Buy American, Hire American,” President Donald Trump has resurrected and embellished a slogan that has been around at least since the Great Depression.

A NAFTA World Cup could be just what North America needs
Arturo Sarukhan (Brookings) Apr 19, 2017
With tensions running high across the continent, the United States, Canada, and Mexico’s joint bid to host the 2026 soccer World Cup could be a much-needed boon to North American diplomacy and unity.

Liberating the World Bank (From the US)
Lex Rieffel (Globalist) Apr 19, 2017
Reforms to make the World Bank less dependent on the United States would enable them to be more effective.

Free Trade With South Korea Is Working
Bloomberg View Apr 19, 2017
Once again, the Trump administration picks the wrong fight.

Theresa May’s Brexit Gamble
Bloomberg View Apr 19, 2017
If the vote makes Britain less divided and more pragmatic, it will leave everyone better off. Fingers crossed.

America Needs More Foreign Investment
Noah Smith (Bloomberg View) Apr 19, 2017
It would be bad news for workers if the U.S. did anything to slow the flow of capital from overseas.

High Stock Prices and Low Bond Yields Can't Last
Mohamed Aly El-Erian (Bloomberg View) Apr 19, 2017
Geopolitics and economic policy will determine the new balance.

The Philippine Peso Squeeze
Dan Steinbock (WFR) Apr 19, 2017
In the first quarter, the Philippine peso depreciated against the US dollar. Internationally, this was attributed to President Duterte’s policies. In reality, it has a lot to do with the expected US rate hikes. But there is a reason why misguided geopolitics now overshadows Philippines.

The Low Cost of Ending Poverty
Bjørn Lomborg (Project Syndicate) Apr 19, 2017
For the first time ever, eradicating poverty worldwide is within humanity’s financial reach. So why do our political leaders repeatedly adopt expensive policies that achieve much less – and why do these poor choices go unchallenged?

Can the EU Handle President Le Pen?
Mark Leonard (Project Syndicate) Apr 19, 2017
Marine Le Pen is the only candidate confident of progressing to the French presidential election’s runoff after Sunday’s first-round vote. So why, asks Mark Leonard, Director of the European Council on Foreign Relations, hasn’t the EU made plans to deal with the nightmare scenario of her ultimate victory?

The Force Behind the Thousands Protesting Corruption in Slovakia? Teenagers.
Emily Tamkin (FP) Apr 19, 2017
Teenagers are the force behind the thousands of people protesting corruption in Slovakia.

Ricardo and comparative advantage at 200
Douglas Irwin (VoxEU) Apr 19, 2017
The idea of comparative advantage is an essential part of every economists’ intellectual toolkit. On the 200th anniversary of the publication of “On the Principles of Political Economy and Taxation”, this column salutes David Ricardo’s achievement of setting out the theory for comparative advantage for the first time. The idea of comparative advantage is an essential part of every economists’ intellectual toolkit. On the 200th anniversary of the publication of “On the Principles of Political Economy and Taxation”, this column salutes David Ricardo’s achievement of setting out the theory for comparative advantage for the first time.

Impact of immigration barriers on native workers
Michael Clemens, Ethan Lewis and Hannah Postel (VoxEU) Apr 19, 2017
Many claim that immigrants negatively affect the labour market prospects of native workers in advanced countries. This column studies a large change in immigration restrictions in the US – the 1965 exclusion of almost half a million Mexican seasonal farm workers (braceros) from the US labour market. The bracero exclusion did not increase the employment or wages of native workers, and technology adoption was one of the adjustment channels. Many claim that immigrants negatively affect the labour market prospects of native workers in advanced countries. This column studies a large change in immigration restrictions in the US – the 1965 exclusion of almost half a million Mexican seasonal farm workers (braceros) from the US labour market. The bracero exclusion did not increase the employment or wages of native workers, and technology adoption was one of the adjustment channels.

Taking aim at the World Bank is self-defeating
FT View Apr 20, 2017
A US cut in contributions will only cede strategic ground to China.

A British pledge on aid will send a message to the world
Martin Wolf (FT) Apr 20, 2017
Spending on development is an important way to show Brexit does not mean isolationism.

Emerging market capital flows turn positive
Steve Johnson (FT) Apr 20, 2017
First inflows since 2014 despite China continuing to ship capital.

The pendulum swings between globalisation and nation state
Stephen King (FT) Apr 20, 2017
This time it is the richest countries that are seeking the safety of their borders.

China bond party attracts few takers
Gabriel Wildau (FT) Apr 20, 2017
Beijing wants foreigners to invest in its debt market but fears over defaults have hit demand.

Teeing Up Trump Tariffs
WSJ Apr 20, 2017
The President paves the way for higher taxes on U.S. steel consumers.

A young prince is reimagining Saudi Arabia. Can he make his vision come true?
David Ignatius (WP) Apr 20, 2017
Deputy Crown Prince Mohammed bin Salman outlines ambitious plans, including liberalization of the entertainment sector.

Reducing Poverty in India with the Power of Digital Payments and UBI
Anit Mukherjee (CGD) Apr 20, 2017
Demonetization is yesterday’s news. The India of today is going full steam ahead towards a digital economy powered by financial inclusion, the mobile revolution, and Aadhaar—the biometric ID system that now covers 90 percent of its 1.3 billion population. And the social compact of the future will restructure subsidies and provide a basic income for the poor.

In a year of big political decisions, China's economy appears stable
David Dollar (Brookings) Apr 20, 2017
After facing a long slowdown in investment growth, China’s first-quarter economic numbers forecast a year of financial stability ahead of the all-important 19th Chinese Communist Party Congress.

Will reducing foreign assistance be a blessing or a curse for Africa?
Angelle B. Kwemo (Brookings) Apr 24, 2017
With U.S. foreign aid programs facing an uncertain future, Angelle Kwemo calls on African leaders to build prosperity through trade engagement, local development efforts, and regional integration.

Reconciling the IMF's 3 Growth Messages
Mohamed Aly El-Erian (Bloomberg View) Apr 20, 2017
The new normal gives way to the "new mediocre."

Alarm Bells Start Ringing for U.K. Economy
Ferdinando Giugliano (Bloomberg View) Apr 20, 2017
Slowing wages and rising inflation have begun to squeeze living standards.

There Is No Easy Fix For the German Surplus
Leonid Bershidsky (Bloomberg View) Apr 20, 2017
Germany's advantage is temporary but not necessarily unfair.

A Bridge to Universal Education
Gordon Brown (Project Syndicate) Apr 20, 2017
At the World Bank and the IMF’s upcoming annual spring meetings, delegates will reinforce the case for multilateral cooperation. In particular, they will be discussing the International Finance Facility for Education, a bold plan to ensure that all of the world’s 1.6 billion boys and girls are in school and learning.

The G20’s Time for Climate Leadership
Teresa Ribera (Project Syndicate) Apr 20, 2017
With US President Donald Trump dialing back the clock on climate policy, the G20 is now confronting its biggest challenge yet. It will be up to German Chancellor Angela Merkel and other world leaders to overcome US (and Saudi) resistance and stay the course on climate action.

Will Economic Illiteracy Trigger a Trade War?
Jeffrey D. Sachs (Project Syndicate) Apr 20, 2017
US President Donald Trump and his commerce secretary, Wilbur Ross, repeatedly commit an economic fallacy that first-year economics students learn to avoid. And their embrace of economic ignorance could lead to disaster.

The Emptiness of Trump’s “Buy American” Order
Adam Davidson (New Yorker) Apr 20, 2017
It’s not possible, or even advisable, to insure that an entire production chain will occur in one country.

Is South Africa Facing More Economic Trouble Ahead?
Jeffrey Herbst and Murray Leibbrandt (K@W) Apr 20, 2017
Hopes have receded for a steady recovery of South Africa's fragile economy with the downgrade earlier this month of the country's credit rating to junk status.

Populism’s Rise Reshapes Global Political Risk
Kingsley Chiedu Moghalu (YaleGlobal) Apr 20, 2017
Risks of populism include substituting conviction for facts and threats to independent impartial institutions meant to safeguard democracy’s integrity

Robots Don’t Eat Chocolate
James Meek (LRB) Apr 20, 2017
All factories must close one day, but there’s something particularly brutal about a factory being closed because its owners have found cheaper labour elsewhere.

Global investor sentiment will turn ultimately on China
James Kynge and Jonathan Wheatley (FT) Apr 21, 2017
The reflation trade started with Trump, but Chinese demand will be definitive.

The Crisis of Western Civ
David Brooks (NYT) Apr 21, 2017
Faith in the West has collapsed and, amazingly, people have been slow to rise to defend it.

How Best to Tax Business
N. Gregory Mankiw (NYT) Apr 21, 2017
Congressional proposals for changing the corporate tax go far beyond a simple discussion of tax rates. Fundamental shifts could affect business behavior.

Should Theresa May Ditch the Aid Target?
Owen Barder (CGD) Apr 21, 2017
Aid is amazingly good value for money. For the same money the British government willingly spends to save a life in the UK, we save around 10,000 lives in the developing world.

How Robots Could Save American Manufacturing and Create Jobs
Nikolaus Correll (BRINK) Apr 21, 2017
There has been plenty of hand-wringing about how automation is making manufacturing jobs obsolete. However, automation may actually increase the number of available jobs. The real risk lies elsewhere: China is slowly encroaching on—and may soon surpass—America’s automated industrial competitiveness.

EU After Brexit: Like 20 Fewer Economies
Globalist Apr 21, 2017
The drop from EU-28 to EU-27 will be a big one in terms of GDP lost.

Post-Brexit Europe: Population and Economic Policy/A>
Globalist Apr 21, 2017
For the EU, Brexit means a shift toward smaller countries and less free-market countries.

How to Break Europe's Financial 'Doom Loop'
Bloomberg View Apr 21, 2017
The connection between banks and public borrowing still threatens financial stability.

'Fight Inequality!' Is a Poor Rallying Cry
Tyler Cowen (Bloomberg View) Apr 21, 2017
There's evidence that people don't mind economic gaps as much as pundits think they do.

Portugal Is a Keynesian Mirage
Ferdinando Giugliano (Bloomberg View) Apr 21, 2017
Lisbon's fiscal miracle reflects deep cuts in capital spending.

The EU's Brexit Strategy Is to Play for Time
Leonid Bershidsky (Bloomberg View) Apr 21, 2017
Leaked position papers show the EU wouldn't mind a slow, uncomfortable divorce.

Most Workers Have Held Off the Machines So Far
Noah Smith (Bloomberg View) Apr 21, 2017
But the worry is that upheaval will follow some huge technological shift.

Development Beyond the Numbers
Selim Jahan (Project Syndicate) Apr 21, 2017
Despite the impressive development gains that many countries have made in recent decades, hundreds of millions of people are still being left behind. Worse, because official statistics are based on national averages, they are now in danger of being forgotten.

A Practical Agenda for Revolutionary Times
Ngaire Woods (Project Syndicate) Apr 21, 2017
As the world’s financial leaders gather for the IMF and World Bank spring meetings, many working people around the world are demanding radical change, because they sense that their voices are not being heard. By repeatedly making the case for globalization without addressing these concerns, elites may be doing more harm than good.

Brexit, globalisation, and de-industrialisation
Jim Tomlinson (VoxEU) Apr 21, 2017
Many commentators have portrayed Britain’s referendum decision to leave the EU as being motivated by a popular rejection of globalisation. This column argues that in seeking to understand the economic basis of the Brexit vote, we should concentrate not on globalisation but on the long-term impact of de-industrialisation, which has left a legacy of a much more polarised service sector labour market, with large numbers of people condemned to poorly paid and insecure jobs. Many commentators have portrayed Britain’s referendum decision to leave the EU as being motivated by a popular rejection of globalisation. This column argues that in seeking to understand the economic basis of the Brexit vote, we should concentrate not on globalisation but on the long-term impact of de-industrialisation, which has left a legacy of a much more polarised service sector labour market, with large numbers of people condemned to poorly paid and insecure jobs.

Eligibility easing and the lender of last resort
Thomas Huertas (VoxEU) Apr 21, 2017
Central banks helped contain the Global Crisis using a policy of 'eligibility easing'. The policy expanded the collateral that could be used to access liquidity facilities and the range of counterparties that could request liquidity. This column argues that although eligibility easing successfully reduced the need for central banks to act as lender of last resort or to provide emergency liquidity assistance, the time has come to determine its future role as a macro-prudential tool. Central banks helped contain the Global Crisis using a policy of 'eligibility easing'. The policy expanded the collateral that could be used to access liquidity facilities and the range of counterparties that could request liquidity. This column argues that although eligibility easing successfully reduced the need for central banks to act as lender of last resort or to provide emergency liquidity assistance, the time has come to determine its future role as a macro-prudential tool.

The Basel process: Good intentions and unintended consequences
Thomas Gehrig and Maria Chiara Iannino (VoxEU) Apr 21, 2017
The first Basel Accord initiated what has become a three decade-long process of regulatory convergence of the international banking system. This column argues that by trying to regulate minimal capital standards, the Basel process itself contributed to an ever-increasing shortfall in aggregate bank capital. Consequently, European banks have become increasingly exposed to systemic risk, suggesting that expansive monetary policy could adversely affect the resiliency of banks. The first Basel Accord initiated what has become a three decade-long process of regulatory convergence of the international banking system. This column argues that by trying to regulate minimal capital standards, the Basel process itself contributed to an ever-increasing shortfall in aggregate bank capital. Consequently, European banks have become increasingly exposed to systemic risk, suggesting that expansive monetary policy could adversely affect the resiliency of banks.

The Limits of Economic Optimism
Kemal Dervis (Project Syndicate) Apr 22, 2017
As the annual spring meetings of the World Bank and the IMF commence, these institutions, along with many private-sector actors, are projecting significantly faster growth this year than in 2016. Is their buoyant outlook warranted?

Central Bankers and Inclusive Growth: Building a Framework for Financial Inclusion
David Lipton (IMF) Apr 22, 2017
Central banks can foster an environment supportive of inclusion by enabling a level playing field for competition.

Mauricio Macri’s reforms provide the best hope for Argentina
FT View Apr 23, 2017
The economics are working but the politics is the weakest point.

Venezuela’s broken system cannot fix itself
Daniel Lansberg-Rodriguez (FT) Apr 23, 2017
Protests highlight weaknesses that keep Maduro in power.

German surplus hands eurozone dilemma to France
Wolfgang Münchau (FT) Apr 23, 2017
Washington should forge an alliance with Paris to confront Berlin.

By Trashing Mexico, Trump Hurts the U.S.
Robert B. Zoellick (WSJ) Apr 23, 2017
Without Nafta, American businesses would lose protection from populism south of the border.

China's Control Problem
Christopher Balding (Bloomberg View) Apr 23, 2017
A mundane bank scam reveals a systemic risk.

What Markets Should Conclude From France's Election
Mohamed Aly El-Erian (Bloomberg View) Apr 23, 2017
The anti-establishment wave isn't over.

Best of three scenarios for world trade
Razeen Sally (EAF) Apr 23, 2017
Trump's withdrawal from the TPP is a dangerous signal of disengagement from Asia. Without US leadership on economic openness, the world economy will certainly be worse all-round and more unstable.

The operation and demise of the Bretton Woods system
Michael Bordo (VoxEU) Apr 23, 2017
Beginning in 1944, the Bretton Woods system played a major role in shaping the global economy in the post-war period. This column describes how although it was successful in bringing about exemplary and stable economic performance in the 1950s and 1960s, familiar confidence and liquidity problems, as well as inflationary pressure and central bankers’ responses to it, ensured that Bretton Woods was short-lived. Nonetheless, legacies of the system, like the dollar standard, remain with us and will likely be with us for some time to come. Beginning in 1944, the Bretton Woods system played a major role in shaping the global economy in the post-war period. This column describes how although it was successful in bringing about exemplary and stable economic performance in the 1950s and 1960s, familiar confidence and liquidity problems, as well as inflationary pressure and central bankers’ responses to it, ensured that Bretton Woods was short-lived. Nonetheless, legacies of the system, like the dollar standard, remain with us and will likely be with us for some time to come.

Adaptive Markets, by Andrew Lo — emotional investment theory
John Authers (FT) Apr 24, 2017
A remarkable new paradigm puts human instinct at the heart of market behaviour.

Emerging markets file more patents than the west
Stephen Johnson (FT) Apr 24, 2017
China leads the way as innovation heads east.

Investment in women unleashes global gains
Ivanka Trump and Jim Yong Kim (FT) Apr 24, 2017
Female economic empowerment brings dividends for families, businesses and nations.

Macron, Le Pen and the limits of nationalism
Gideon Rachman (FT) Apr 24, 2017
The original core of the EU is hardening an internationalist stance.

How emerging markets can attract capital to their power sectors
Julian Critchlow (FT) Apr 24, 2017
Four steps to making energy investment viable and profitable.

A Better Idea for Bankrupt Big Banks
Stephen E. Hessler (WSJ) Apr 24, 2017
Unlike Dodd Frank, the new act would require that parties with the same legal rights receive the same treatment.

Brighter Outlook for Commodities Suggests a Fresh Look at Investment Benefits and Risks
Greg E. Sharenow (PIMCO) Apr 24, 2017
Over the next 12 months, continued economic growth, coupled with supply-side normalization and a maturing business cycle, should create room for a continued price recovery for commodities. Among specific sectors, we’re broadly constructive on both oil and natural gas due to strong demand and insufficient investment in supply, and we see scope for improvement in industrial metals prices. We’re more cautious on agriculture. Along with broader geopolitical risks that typically affect commodities markets, several policy uncertainties are prevalent today, including OPEC, U.S. tax policy, trade, and central bank activity. Commodities could potentially reclaim a diversifying role in portfolios, given growing inflation risks and shrinking correlations between commodities and other assets.

Broken Politics and a Fragile World Economy
Bloomberg View Apr 24, 2017
Even if the new politics doesn't bring the ceiling down, it could hurt growth in the long term.

Cracking the Mystery of Labor's Falling Share of GDP
Noah Smith (Bloomberg View) Apr 24, 2017
There are four main theories, each of which falls apart under scrutiny.

Investors Underestimating the Economy and the Fed
Charles Lieberman (Bloomberg View) Apr 24, 2017
Describing the expansion as weak implies that faster growth is feasible and desirable. That’s incorrect.

Liberalism in the Trenches
Ana Palacio (Project Syndicate) Apr 24, 2017
After a dizzying few months, in which Donald Trump’s young presidency threw the entire post-1945 global order into question, the geopolitical status quo appears to have reemerged. But this is no time for complacency: defenders of the liberal international order still need a comprehensive foreign-policy strategy.

How to Renegotiate NAFTA
Jeffrey Frankel (Project Syndicate) Apr 24, 2017
With US President Donald Trump’s administration seemingly committed to its campaign promise to renegotiate the North American Free Trade Agreement, it is worth asking how the 23-year-old deal could be improved. In fact, it could be strengthened in several ways.

New Life for the SDR?
Mohamed A. El-Erian (Project Syndicate) Apr 24, 2017
The rise of anti-globalization political movements and the threat of trade protectionism have led some people to wonder whether a stronger multilateral core for the world economy would reduce the risk of damaging fragmentation. If so, enhancing the role of the IMF's incipient global currency may be the best option.

The Coming Technology Policy Debate
Michael J. Boskin (Project Syndicate) Apr 24, 2017
Technological progress brings far-reaching benefits, but it also poses increasingly serious threats to humankind. With governments and citizens already struggling with the consequences of recent innovations – from job displacement to security risks – technology policy is likely to take center stage in the coming decade.

An asset management company for the Eurozone
Thorsten Beck (VoxEU) Apr 24, 2017
Nine years after the onset of the Global Crisis, the problem of non-performing assets is still acute in the Eurozone. This column takes stock of the different proposals to deal with the issue. It argues that a Eurozone-level asset management company can resolve bank fragility and spur economic recovery, but warns that lack of political will and legal barriers can impede the creation of such an agency. Nine years after the onset of the Global Crisis, the problem of non-performing assets is still acute in the Eurozone. This column takes stock of the different proposals to deal with the issue. It argues that a Eurozone-level asset management company can resolve bank fragility and spur economic recovery, but warns that lack of political will and legal barriers can impede the creation of such an agency.

The persistent headache of sluggish investment
M. Ayhan Kose, Franziska Ohnsorge and Lei (Sandy) Ye (VoxEU) Apr 24, 2017
Investment growth in emerging market and developing economies has slowed sharply since 2010. This column argues that this slowdown reflects a range of factors, including negative terms-of-trade shocks, slowing FDI inflows, weak activity, and rising private debt burdens and political risk. Policymakers can boost investment directly through public investment, and indirectly by taking measures to improve overall growth prospects and the business climate. Investment growth in emerging market and developing economies has slowed sharply since 2010. This column argues that this slowdown reflects a range of factors, including negative terms-of-trade shocks, slowing FDI inflows, weak activity, and rising private debt burdens and political risk. Policymakers can boost investment directly through public investment, and indirectly by taking measures to improve overall growth prospects and the business climate.

Inequality Is About Access to Public Goods, Not Income
Claude Fischer (Boston Review) Apr 24, 2017
We can't fix inequality without universal public goods that redistribute wealth and security. Examples include Medicare, Medicaid, and Obamacare. But under the current regime, we will be lucky to keep even the public goods we already have.

Measuring Interest Rate Risk in the Very Long Term
Jens H.E. Christensen, Jose A. Lopez, and Paul L. Mussche (FRBSF Econ Letter) Apr 24, 2017
Insurance companies write policies to cover potential risks far into the future. Because the life of these contracts can extend well beyond the 30-year maturities for the longest U.S. Treasuries, it’s difficult to measure the interest rate risk involved. A new study describes how the long-term interest rates required to evaluate such long-lived liabilities can be extrapolated from shorter-maturity bond yields using a standard yield curve model. These extrapolations are a useful tool since they have very small errors relative to the yield curve variation typically considered for risk management.

The End of Foreign Aid As We Know It
Bryant Harris, Robbie Gramer, and Emily Tamkin (FP) Apr 24, 2017
President Donald Trump’s vow to put “America first” includes a plan to drastically cut assistance to developing countries and fold USAID into the State Department.

China’s money is a mixed blessing for Pakistan
FT View Apr 25, 2017
The US cannot cede all influence over its unreliable ally to Beijing.

A costly and incoherent stance on UK migration
FT View Apr 25, 2017
Theresa May’s hardline approach is incompatible with an open economy.

An upswing in the world economy is not sustained growth
Martin Wolf (FT View) Apr 25, 2017
The question is whether politics will give the necessary support to long-term recovery.

Growth Can Solve the Debt Dilemma
Stephen Moore (WSJ) Apr 25, 2017
Hitting a 3% target would result in an economy that’s nearly $13 trillion larger in 30 years.

Donald Trump's Trade Policy Is in Disarray
NYT Apr 25, 2017
Threats and rhetoric have given way to a more complicated reality, and fiscal policy that can do more damage than bad trade deals.

The Low-Inflation World May Be Sticking Around Longer Than Expected
Neil Irwin (NYT) Apr 25, 2017
It will take more than a U.S. presidential election, a few months of solid global growth and a recovery in oil prices to fix it.

The World Needs More Bad Schools
Justin Sandefur (CGD) Apr 25, 2017
A UN commission is calling for a doubling of global aid for education, without any clear reform agenda to raise learning levels in the world's failing school systems. That might be ok: bad schools in poor countries still seem to produce big benefits.

What are China’s global economic intentions?
Marek Dabwoski (Bruegel) Apr 25, 2017
At this January's Davos meeting, Chinese President Xi Jinping announced to a surprised audience that China would be the world’s new champion of globalisation. A functioning global trade system is in China's interest.

The Informal Sector: What Do We Know So Far?
Anna Diofasi, Vijaya Ramachandran and Alan Gelb (CGD) Apr 25, 2017
The informal sector is a major source of economic activity and job opportunities in poor countries as well as emerging economies. In sub-Saharan Africa, the size of the informal sector is estimated to employ over 70 percent of the population. Why do businesses remain informal? What gains in productivity or profitability do they forego by as a result of that choice?

The EU: Like Building a Cathedral
Stephen Green (Globalist) Apr 25, 2017
Will the “cathedral” – aka the EU – ever be completed? Is it worth the effort? Or might it fall down and bankrupt its builders?

Examining Geopolitical Risks under a Different Lens
Evan Freely (BRINK) Apr 25, 2017
Today’s risks are no longer constrained by borders. Emerging markets represent the highest level of risk in terms of corporate assets and investments. However, the rise of nationalism and populism, mixed with the destabilizing power of new technology, has raised the risks in surprising other regions as well.

Derisking – does the damage outweigh the gains?
Brian Caplen (Banker) Apr 25, 2017
The problems caused by anti-money laundering regulation have hit smaller countries, smaller banks and therefore the poorer members of society. Have matters gone too far?

Let's Get to Work on a Global Energy Grid
Zhenya Liu (Bloomberg View) Apr 25, 2017
Future energy, information and transportation networks will improve productivity and reduce pollution worldwide.

OK, Maybe Globalization Isn't Dead
Justin Fox (Bloomberg View) Apr 25, 2017
World trade just made a big jump. That seems worth noting.

Germany’s Coming Silver Age
Michael Heise (Project Syndicate) Apr 25, 2017
Record levels of migration to Germany over the last two years have called into question population projections. But because German society will still continue to age in the coming decades, policymakers must resist the temptation to postpone or water down politically painful retirement and pension-policy decisions.

Will London Survive Brexit?
Howard Davies (Project Syndicate) Apr 25, 2017
Brexit has set a hungry cat among the financial pigeons of the City of London. No one yet knows what kind of access to the EU’s single financial market UK-based firms will have, and European centers have spotted an opportunity to claw some of this business back.

Inconvenient Truths About the US Trade Deficit
Martin Feldstein (Project Syndicate) Apr 25, 2017
Reducing the US trade deficit requires Americans to save more or invest less. On their own, policies that open other countries’ markets to US products, or close US markets to foreign products, will not change the overall trade balance.

Uniting Against Malaria
Julie Essiam and Joy Phumaphi (Project Syndicate) Apr 25, 2017
Building a prosperous African economy that works for all will be impossible, unless the continent eradicates the diseases that continue to deplete its communities of their most valuable resource: healthy people. One such disease is malaria, which in many African countries knocks a percentage point off annual economic growth.

The interconnectedness between EU banks and shadow banking entities
Jorge Abad, Marco D'Errico, Neill Killeen, Vera Luz, Tuomas Peltonen, Richard Portes and Teresa Urbano (VoxEU) Apr 25, 2017
The Global Crisis highlighted how linkages between banks and shadow banking entities can lead to the amplification of shocks across borders and sectors, prompting policymakers to seek to improve the monitoring framework for assessing the interconnectedness of the shadow banking system. This column documents the cross-sector and cross-border exposures of EU banks to globally domiciled shadow banking entities. Among the findings are that 60% of these exposures are to shadow banking entities domiciled outside the EU and hence outside its supervisory powers, and that approximately 65% of the exposures are to non-money market fund investment funds, finance companies, and securitisation entities. The Global Crisis highlighted how linkages between banks and shadow banking entities can lead to the amplification of shocks across borders and sectors, prompting policymakers to seek to improve the monitoring framework for assessing the interconnectedness of the shadow banking system. This column documents the cross-sector and cross-border exposures of EU banks to globally domiciled shadow banking entities. Among the findings are that 60% of these exposures are to shadow banking entities domiciled outside the EU and hence outside its supervisory powers, and that approximately 65% of the exposures are to non-money market fund investment funds, finance companies, and securitisation entities.

The Return of Vulture Capitalism
K. Sabeel Rahman (Boston Review) Apr 25, 2017
If Trump's CHOICE Act passes, we will see a return to the conditions of the 2008 financial crisis. In the short run, liberals must protect what they can of financial regulation. But what should progressives do about financial reform in the long run?

The Death and Life of Social Democracy
Pierpaolo Barbieri (FA) Apr 25, 2017
Why idealism eventually beats populism.

Large or small? How to measure bank size
Jan Schildbach (DB Research) Apr 25, 2017
Policymakers, clients and bankers themselves wish to know what constitutes a large bank. What is the right indicator to look at if a supervisor is interested in systemic importance and risks to financial stability? What is the right indicator to look at if a company needs a bank that can provide large-scale financing and take on substantial hedging risks? Various measures are currently in use, each with strengths and shortcomings. Regulators and academics mostly look at total assets, an accounting figure. Others reach conclusions from Tier 1 capital or market cap, two regulation- and market-based indicators. This study discusses these and other measures in detail. It draws quantitative comparisons, including across countries and different financial systems, and proposes one indicator that is best suited to measure bank size.

Xi’s grandiose urban ambitions hit the wall IMG SRC="ft.gif" ALT="Financial Times Subscription Required">
Jamil Anderlini (FT) Apr 26, 2017
The Chinese president’s latest plan for a new city may be a step too far.

Big mining groups rebound to extract a profit
Jamie Smyth (FT) Apr 26, 2017
Resource companies are again making money, and promising to ‘learn the lessons’ of a boom that left them drowning in debt.

An American Recession and the World
George Friedman (Geopolitical Futures) Apr 26, 2017
The U.S. appears to be on the cusp of a cyclical recession.

What China’s rising leadership means for international institutions
G. John Ikenberry and Darren Lim (Brookings) Apr 26, 2017
With the creation of the Asian Infrastructure Investment Bank, China is offering alternatives to global institutions. G. John Ikenberry and Darren Lim examine how Beijing might use this approach to challenge the U.S.-led international order.

Bond Market Reaches a Crossroad. Here's What to Do.
Mark Grant (Bloomberg View) Apr 26, 2017
It no longer shares the stock market’s enthusiasm.

A World Turned Inside Out
Stephen S. Roach (Project Syndicate) Apr 26, 2017
Slowly but surely, a bruised and battered global economy now appears to be shaking off its deep post-2008 malaise. But this hardly means that the world is returning to normal; on the contrary, the global growth dynamic has undergone an extraordinary transformation during the last nine years.

Fixing Fixed-Investment Incentives
Jim O'Neill (Project Syndicate) Apr 26, 2017
No one can say for sure why business investment has not increased in recent years, even during periods of buoyant economic growth. But, contrary to the conventional wisdom, one can be sure that business leaders' collective fear of economic uncertainty is not the prime culprit.

The Sino-American Employment Challenge
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 26, 2017
Following Chinese President Xi Jinping’s summit with US President Donald Trump earlier this month, it seems that the status quo in the bilateral relationship will be maintained. As the two leaders cope with job-destroying technological disruptions, that could be very good news for Chinese and US workers alike.

Why Europe Still Needs Cash
Yves Mersch (Project Syndicate) Apr 26, 2017
With the digital revolution generating ever-faster and more convenient means for settling transactions, old-fashioned paper money and coins would seem to have no future. But the three main reasons for abolishing them do not withstand scrutiny.

Theory and evidence for the last two decades of tariff reductions
Lorenzo Caliendo, Robert Feenstra, John Romalis and Alan Taylor (VoxEU) Apr 26, 2017
Tariff barriers today are small on average, suggesting only limited welfare gains from their removal. This column argues, however, that the current generation of standard trade models have missed an important source of gains from trade by neglecting the more complex case of a world with production linkages and multiple sectors. Under monopolistic competition, the effects of firm entry may be so powerful, that optimal tariffs are not positive but negative. Even the removal of small positive tariffs could thus produce significant welfare gains. Tariff barriers today are small on average, suggesting only limited welfare gains from their removal. This column argues, however, that the current generation of standard trade models have missed an important source of gains from trade by neglecting the more complex case of a world with production linkages and multiple sectors. Under monopolistic competition, the effects of firm entry may be so powerful, that optimal tariffs are not positive but negative. Even the removal of small positive tariffs could thus produce significant welfare gains.

Democracy and meritocracy
Ernesto Dal Bó, Frederico Finan, Olle Folke, Torsten Persson and Johanna Rickne (VoxEU) Apr 26, 2017
Ancient Athenians drew lots to determine who served in public office, but oligarchs at that time (and ever since) have argued that there is a trade-off between competence and fair representation. This column uses Swedish population data on cognitive and leadership ability to argue that democracy in Sweden has created government by competent people who are representative of all walks of life. Sweden’s inclusive meritocracy suggests that electoral democracy can help us avoid the tension between representation and competence. Ancient Athenians drew lots to determine who served in public office, but oligarchs at that time (and ever since) have argued that there is a trade-off between competence and fair representation. This column uses Swedish population data on cognitive and leadership ability to argue that democracy in Sweden has created government by competent people who are representative of all walks of life. Sweden’s inclusive meritocracy suggests that electoral democracy can help us avoid the tension between representation and competence.

Beware Remainers — tactical voting works both ways
Sebastian Payne (FT) Apr 27, 2017
Diverting the Tories from their Brexit path will be hard.

Nafta in Neverland
WSJ Apr 27, 2017
Does Trump know that Mexican tariffs on U.S. goods are close to zero?

How to Go From the Third World to the First
John Tamny (WSJ) Apr 27, 2017
South Korea is one of only two countries to have managed 5% growth for five decades. Its economy is now the world’s 13th largest. John Tamny reviews “The New Koreans” by Michael Breen.

Xi Jinping’s Dilemma
Richard McGregor (NYT) Apr 27, 2017
The Chinese economy should be liberalized. But doing so could lead to a weakening of Communist Party control.

US Officials Eye Next Steps on Trade with Europe, Japan, NAFTA Partners
Bridges, Volume 21, Number 14 Apr 27, 2017
The past weeks have seen a flurry of trade activity in Washington and beyond, including a trip by US Vice President Mike Pence to Asia; meetings between top American and European trade officials; and an escalation in the US-Canada row over softwood lumber that could have implications for broader trade talks.

IMF-World Bank Spring Meetings Highlight Inclusive Growth, Trade Potential
Bridges, Volume 21, Number 14 Apr 27, 2017
Finance and development officials concluded the 21-23 April Spring Meetings of the International Monetary Fund (IMF) and World Bank Group (WBG), which saw discussions focus on topics such as trade, inclusion, and sustainable, continued economic growth.

New Chair of WTO Agriculture Negotiations Restarts Talks 
Bridges, Volume 21, Number 14 Apr 27, 2017
Kenyan Ambassador Stephen Karau told WTO members on Wednesday 26 April that he would seek to pick up talks on agricultural trade from where they had left off, in the first negotiating session he convened as the new chair on the topic.

WTO Ministerial Prep: Argentine FM Makes Case for Multilateralism in Geneva Visit
Bridges, Volume 21, Number 14 Apr 27, 2017
Argentine Foreign Minister Susana Malcorra stressed the value of multilateralism during a trip to Geneva, Switzerland, this week, months before her country is due to host the WTO’s Eleventh Ministerial Conference (MC11).

Do we understand the impact of artificial intelligence on employment?
Georgios Petropoulos (Bruegel) Apr 27, 2017
Artificial intelligence is already transforming the world of work, but the future is hard to predict. Some see most jobs at risk of automatisation, while others argue robots will only take on a narrow range of tasks in the coming decades. Nevertheless, we need a broad debate to prepare the appropriate economic policy response to the new industrial revolution.

What the US Might Learn from Singapore
Peter A. Coclanis (WA) Apr 27, 2017
The seriousness with which US politicians and policy makers deliberate fails to measure up to the seriousness of the global challenges ahead. Perhaps Singapore can offer a lesson.

How Do We Fix Finance?
Martin Hutchinson (Globalist) Apr 27, 2017
What the United States needs to put monstrous and mostly self-serving financial institutions in proper check.

Bilateral or Multilateral: Which Trade Partnerships Work Best?
K@W Apr 27, 2017
The new administration’s trade advisors, led by economist Peter Navarro, argue that greater dependence on bilateral — rather than multilateral — trade agreements will enable U.S. negotiators to craft provisions that provide maximum advantages for U.S. exporters and consumers. What are the arguments in favor of, and against, such an approach?

The Fading American Dream: Declining Mobility and Increasing Inequality
Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang (Evonomics) Apr 27, 2017
Absolute mobility has declined sharply in US because of the growth in inequality.

What Mandate for Theresa May?
Chris Patten (Project Syndicate) Apr 27, 2017
The UK prime minister's decision to call a snap election reflects her hope of winning a large, docile majority in Parliament for whatever Brexit agreement she concludes with the EU. But, however large her victory in June turns out to be, if she strikes a bad deal – or no deal at all – her government can expect a very rough ride.

A Better Way from ‘R’ to ‘D’
Edward Jung (Project Syndicate) Apr 27, 2017
When people talk about nurturing innovation, they typically focus on government funding for basic research, expanding access to higher education, building tech hubs and incubators, and so on. But a crucial element of innovation is often absent from these discussions: the final product.

Russia’s Neo-Feudal Capitalism
Anders Åslund (Project Syndicate) Apr 27, 2017
Vladimir Putin's model of crony capitalism seems to be a deliberate effort to emulate the success of Russia’s old feudal system – a system that, after all, lasted for centuries. But in today’s world, such a system not only seems outdated; it also poses a genuine threat to social and political stability.

Where to Build Trump’s Wall?
Ricardo Hausmann (Project Syndicate) Apr 27, 2017
Any economy’s success is heavily influenced by the performance of that sliver of activities that sells its products to outsiders. And what is true for countries is true for states, cities, and towns, which is why policies to address disruption from foreign trade are often – and increasingly – irrelevant.

Five Scenarios for Brexit – With Only One Good Outcome
Joergen Oerstroem Moeller (YaleGlobal) Apr 27, 2017
Negotiations on Britain’s withdrawal from the European Union will be acrimonious – yet should not overlook the need for future cooperation

Drivers of the post-crisis slump in the Eurozone and the US
Robert Kollmann, Beatrice Pataracchia, Rafal Raciborski, Marco Ratto, Werner Roeger and Lukas Vogel (VoxEU) Apr 27, 2017
The Global Crisis led to a sharp contraction and long-lasting slump in both Eurozone and US real activity, but the post-crisis adjustment in the Eurozone and the US shows striking differences. This column argues that financial shocks were key determinants of the 2008-09 Great Recession, for both the Eurozone and the US. The post-2009 slump in the Eurozone mainly reflects a combination of adverse aggregate demand and supply shocks, in particular lower productivity growth, and persistent adverse shocks to capital investment linked to the poor health of the Eurozone financial system. Mono-causal explanations of the persistent slump are thus insufficient. Adverse financial shocks were less persistent for the US. The Global Crisis led to a sharp contraction and long-lasting slump in both Eurozone and US real activity, but the post-crisis adjustment in the Eurozone and the US shows striking differences. This column argues that financial shocks were key determinants of the 2008-09 Great Recession, for both the Eurozone and the US. The post-2009 slump in the Eurozone mainly reflects a combination of adverse aggregate demand and supply shocks, in particular lower productivity growth, and persistent adverse shocks to capital investment linked to the poor health of the Eurozone financial system. Mono-causal explanations of the persistent slump are thus insufficient. Adverse financial shocks were less persistent for the US.

Exchange rate prediction redux
Yin-Wong Cheung, Menzie Chinn, Antonio Garcia Pascual and Yi Zhang (VoxEU) Apr 27, 2017
Previous assessments of nominal exchange rate determination have focused on a narrow set of models. Using data for six currencies, this column examines the performance of an expanded set of models at various forecast horizons. No model consistently outperforms a random walk benchmark, although the purchasing power parity model does fairly well. Overall, combinations of model, specification, and currency that work in one period will not necessarily work well in another. Previous assessments of nominal exchange rate determination have focused on a narrow set of models. Using data for six currencies, this column examines the performance of an expanded set of models at various forecast horizons. No model consistently outperforms a random walk benchmark, although the purchasing power parity model does fairly well. Overall, combinations of model, specification, and currency that work in one period will not necessarily work well in another.

US invests too little, not too much in China
Yukon Huang (FT) Apr 28, 2017
With similar barriers to entry, EU investment in China has grown more rapidly.

China trade is no path to growth for Latin America
Jude Webber (FT) Apr 28, 2017
As China moves up, region is moving down the value chain, says USB.

Is Germany Really Poverty-Stricken?
Daniel Stelter (Globalist) Apr 28, 2017
Fake facts, presented under the cover of academic neutrality, become a 2017 election topic in Germany.

All Those Bubble Sightings Turned Out to Be Mirages
Noah Smith (Bloomberg View) Apr 28, 2017
Sounding an alarm about market excesses is easy. Getting the timing right is really hard.

Another Reason Trump Should Like Free Trade
Mark Buchanan (Bloomberg View) Apr 28, 2017
Research suggests that it helps secure the U.S. supply of crucial mineral resources.

Learning from China’s Industrial Strategy
Richard Kozul-Wright and Daniel Poon (Project Syndicate) Apr 28, 2017
While the world watches anxiously for signs of US President Donald Trump’s next move vis-à-vis China, Chinese leaders remain focused on the next stage of their country's ongoing economic transformation. What they do should interest everyone – especially US policymakers.

Has France Really Rejected Populism?
Mark Roe (Project Syndicate) Apr 28, 2017
Beneath the surface of France’s first-round presidential election results is a potential coalition that should give pause to those celebrating the supposed triumph of liberal democracy. Even if the French electorate rejects anti-establishment policies this time around, today's large minority could become tomorrow's majority.

On the heterogeneous impact of free trade agreements
Scott Baier, Yoto Yotov and Thomas Zylkin (VoxEU) Apr 28, 2017
There is a large empirical literature examining the effects of free trade agreements. However, most studies to date have focused on a common average effect across all agreements or have assumed that the effects are common across similar types of agreements. This column examines heterogeneity in the effects of free trade agreements. Along with across-agreement heterogeneity, substantial within-agreement heterogeneity is observed. The effects of a specific agreement can be starkly different for two trading partners. There is a large empirical literature examining the effects of free trade agreements. However, most studies to date have focused on a common average effect across all agreements or have assumed that the effects are common across similar types of agreements. This column examines heterogeneity in the effects of free trade agreements. Along with across-agreement heterogeneity, substantial within-agreement heterogeneity is observed. The effects of a specific agreement can be starkly different for two trading partners.

Global value chains and the increasingly global nature of inflation
Raphael Auer, Claudio Borio and Andrew Filardo (VoxEU) Apr 28, 2017
In the past two decades, international trade has been transformed by the rise of global value chains. This column suggests that the rise of global value chains can help resolve the puzzle of the increasingly global nature of domestic inflation. Their expansion has greatly increased international competition for both intermediate and final goods and services, meaning price pressures arising from economic slack in one country become more relevant for others. This may be changing the trade-offs central banks face when managing domestic inflation. In the past two decades, international trade has been transformed by the rise of global value chains. This column suggests that the rise of global value chains can help resolve the puzzle of the increasingly global nature of domestic inflation. Their expansion has greatly increased international competition for both intermediate and final goods and services, meaning price pressures arising from economic slack in one country become more relevant for others. This may be changing the trade-offs central banks face when managing domestic inflation.

The Globalists Are In Charge, For Now
John Cassidy (New Yorker) Apr 27, 2017
After Trump’s reversal on NAFTA, economic nationalists such as Steve Bannon appear to have lost yet another battle.

The fate of NAFTA
Economist Apr 29, 2017
Donald Trump takes aim at Canada’s trade with the United States.

Africa: A Massive Tragedy That Could Be Avoided
Frank Vogl (Globalist) Apr 29, 2017
The issue of the intense connection between corruption and violence fails to secure the attention it deserves.

Milk Wars Curdled U.S.-Canada Relationship Long Ago
Stephen Mihm (Bloomberg View) May 1, 2017
Trump blames Canada, but both sides have been fighting dirty since the 1930s.

Reprieve or Reform in Europe?
Michael Spence (Project Syndicate) Apr 29, 2017
With the pro-EU Emmanuel Macron seemingly headed toward the French presidency, the immediate threat to the EU and the eurozone appears to have subsided. But unless Europe addresses flaws in growth patterns and pursues urgent reforms, the longer-term risks to its survival will continue to mount.

EU leaders set their terms for a negotiated Brexit
FT View Apr 30, 2017
The framework for talks agreed by the 27 is tough but reasonable.

How Turkey and Europe lost that loving feeling
Sinan Ulgen (FT) Apr 30, 2017
EU membership is no longer a realistic prospect for Ankara.

Emmanuel Macron will have to make a decisive move on Europe
Wolfgang Münchau (FT) Apr 30, 2017
The most exciting promise of his candidacy is the agenda for eurozone reform.

Mexico calls on Trump to reuse TPP deals to reanimate Nafta
Jonathan Wheatley and Jude Webber (FT) Apr 30, 2017
Treat us as partner against low-cost Chinese producers, says economy minister.

China's Plan to Subvert the Global Dollar Standard
Alasdair Macleod (Mises Daily) Apr 30, 2017
Gold is central to China's future trade-settlement policy.

Inequality indices as tests of fairness
Ravi Kanbur and Andy Snell (VoxEU) Apr 30, 2017
Observed inequality has limitations for normative assessment, which raises the question of whether inequality measurement is redundant and should be replaced by the study of the underlying causes of inequality. This column argues that even in the context of the ‘process versus outcomes’ question, overall indices of inequality still maintain their relevance, but now as statistical tests of fairness. Observed inequality has limitations for normative assessment, which raises the question of whether inequality measurement is redundant and should be replaced by the study of the underlying causes of inequality. This column argues that even in the context of the ‘process versus outcomes’ question, overall indices of inequality still maintain their relevance, but now as statistical tests of fairness.

The real economic benefits of easy central bank access
Vincent Bignon and Clemens Jobst (VoxEU) Apr 30, 2017
Data constraints have made it difficult to establish a causal link between the design of central bank eligibility frameworks and economic outcomes. In this column, the authors argue the series of non-agricultural economic crises in 19th century France caused by phylloxera – a disease that devastated vineyards in the country – allows the confounding factors that normally impede the investigation of lending of last resort policies to be disentangled. Regions that benefitted from easier access to central bank refinancing exhibited lower default rates, as firms could more easily smooth liquidity shocks. Importantly, the lower default rates were not the result of the central bank bailing out the private sector by buying up worthless assets. Data constraints have made it difficult to establish a causal link between the design of central bank eligibility frameworks and economic outcomes. In this column, the authors argue the series of non-agricultural economic crises in 19th century France caused by phylloxera – a disease that devastated vineyards in the country – allows the confounding factors that normally impede the investigation of lending of last resort policies to be disentangled. Regions that benefitted from easier access to central bank refinancing exhibited lower default rates, as firms could more easily smooth liquidity shocks. Importantly, the lower default rates were not the result of the central bank bailing out the private sector by buying up worthless assets.