News & Commentary:

Articles/Commentary

The UK is still wrestling with the incoherence of Brexit
Helen Thomas (FT) Apr 1, 2022
Possibility of another delay to imposing full import checks on products coming from the EU contrasts with previous rhetoric.

Commodity market cracks catch the eye of policymakers
Katie Martin (FT) Apr 1, 2022
Natural resources are the outlier in the reaction to the invasion of Ukraine.

Big Oil has nothing to complain about under Joe Biden
Derek Brower (FT) Apr 1, 2022
The fossil fuel industry is booming under an administration that was keen to launch a green revolution.

Is it time to worry about an emerging markets crisis?
David Lubin (FT) Apr 1, 2022
Increased risk aversion, a shift in approach by the IMF and slowing trade combine to hit developing economies.

Russia steadies rouble with harsh capital controls and investment curbs
Tommy Stubbington and Polina Ivanova (FT) Apr 1, 2022
Moscow has averted financial collapse by crimping the flow of funds out of the country.

Wonking Out: The Curious Case of the Recovering Ruble
Paul Krugman (NYT) Apr 2, 2022
Why has Russia gone all out to defend its currency?

Can Home Prices and Interest Rates Soar at the Same Time?
Emily Badger and Quoctrung Bui (NYT) Apr 2, 2022
Rising mortgage rates are supposed to cool house prices. But this time could be different.

The overstated danger of a peaking China
Denny Roy (AT) Apr 1, 2022
Several respected foreign affairs analysts have recently argued that China's relative power is peaking and will soon go into decline, prompting Beijing to behave more aggressively between now and the end of the decade. This view is well-argued and consequential, but – fortunately – questionable. A gradual return to a non-threatening foreign policy is, in fact, more likely.

Rajapaksa to blame for Sri Lanka's economic calamity
Salman Rafi Sheikh (AT) Apr 1, 2022
When Sri Lanka President Gotabaya Rajapaksa campaigned for the presidential election in 2019, he advanced a vision of political stability and economic progress after years of chaos and decline. Three years later, Sri Lanka's economy has hit rock bottom, with protests spreading across the country over electricity outages, food and medicine shortages and soaring prices.

The Fed Cannot Undo the Damage It Has Already Caused
Frank Shostak (Mises Wire) Apr 1, 2022
The Fed's unprecedented monetary expansion has created damage that it cannot undo by switching directions.

Yield Curve Inversions Signaling Caution Rather Than Recession
Marc P. Seidner (PIMCO) Apr 1, 2022
Parsing the yield curve can lead to a variety of conclusions about whether a downturn is coming, while underscoring the importance of flexibility.

Insights from past large and prolonged sovereign debt reductions in OECD countries
David Crowe, Valentine Millot and ?ukasz Rawdanowicz (OECD Ecoscope) Apr 1, 2022
Due to the COVID-19 crisis, sovereign debt in relation to GDP has increased massively, reaching the highest levels in several decades in many countries. Current low interest rates reduce concerns about debt sustainability, but high debt makes public finances vulnerable to negative shocks. Thus, governments will have to balance the need to minimise the risk of fiscal stress and the need to satisfy growing demands on public finances.

Is There Still a Global Marketplace?
Lionel Laurent (Bloomberg Opinion) Apr 1, 2022
The looming cold war economic order has businesses bracing for the worst.

'70s-Era Inflation Advice Was Hollow and Still Is
Stephen Mihm (Bloomberg Opinion) Apr 1, 2022
Tips on coping with soaring prices were everywhere a generation ago. They were mostly useless, a grim omen for those seeking similar guidance today.

State-run firms still dominate revenue among top firms in China, but the private sector is growing
Tianlei Huang and Nicolas Véron (PIIE) Apr 1, 2022
China's recent restrictions on private sector firms has raised fears that China's private sector is being crushed. But revenue data tell a different story. Privately-owned firms are increasing their share of the revenue taken by China's largest firms, indicating continued private sector growth.

Can the World Afford Russia-Style Sanctions on China?
Kenneth Rogoff (Project Syndicate) Apr 1, 2022
Many academic studies suggest that sanctions on China or a break in Sino-American economic ties probably would have a smaller quantitative impact than one might think, at least over the medium to long term. But that is a theory better left untested.

Will China Hit Its Growth Target?
Shang-Jin Wei (Project Syndicate) Apr 1, 2022
China's GDP growth target for this year looks highly challenging in light of the Ukraine war and US monetary tightening. The target remains feasible, but only if Chinese policymakers return to the sort of market-oriented reforms and regulation that have proved successful in the past.

War-induced food price inflation imperils the poor
Erhan Artuc, Guillermo Falcone, Guido Porto, and Bob Rijkers (VoxEU) Apr 1, 2022
The conflict in Ukraine has led to a surge in food prices, particularly wheat and corn. This column uses a newly developed toolkit to analyse the welfare impacts of food price inflation on households in developing countries. Average household welfare decreases in 43 of 53 countries in the sample, with an average real income loss of -1.5%. This impact varies substantially both across and within countries, with poorer households suffering systematically larger welfare losses. Protracted price increases will have long-term consequences for prosperity in many of these countries, exacerbating issues of poverty and inequality.

Managing sovereign debts held by the Eurosystem
Stefano Micossi (VoxEU) Apr 1, 2022
There have been various proposals for how to manage the sovereign debt portfolio accumulated by the Eurosystem in its efforts to raise inflation and provide emergency support in response to the pandemic. This column argues that the euro area needs a new mechanism to free the Eurosystem of the encumbrance of its sovereign portfolio. Such a mechanism cannot be provided by the Eurosystem itself, since this would eventually be inconsistent with its mandate. Instead, the European Stability Mechanism could perform that task while respecting all relevant European law.

Afghanistan's Hungry Will Pay the Price for Putin's War
Lynne O'Donnell (FP) Apr 1, 2022
The knock-on effects of Russia's war on Ukraine are hammering wheat-dependent countries such as Afghanistan.

Living in a world of higher interest rates
FT View Apr 2, 2022
Identifying who will be affected and how remains a complex task.

US tries to be the world's swing crude producer
FT View Apr 2, 2022
A wiser course would be to promote clean energy shift as a security priority.

Corporate bond markets are shrugging off the global worries
Joe Rennison (FT) Apr 2, 2022
Credit investors are still largely betting recession risk remains low.

What Shanghai lockdowns mean for China Inc
Economist Apr 2, 2022
Nothing good.

Will dollar dominance give way to a multipolar system of currencies?
Economist Apr 2, 2022
Recent trends suggest the yuan will not gain much.

The Best Way for China to Make Its Economy Sanctions-Proof
Nancy Qian (Bloomberg Opinion) Apr 2, 2022
True self-sufficiency is impossible. Rather than putting up more walls, Beijing should be looking to integrate itself even more deeply into global supply chains.

Putin Reminds the World He Still Wields a Powerful Economic Weapon
Patricia Cohen (NYT) Apr 2, 2022
The Russian leader has stabilized the ruble and kept Europe's leaders guessing by threatening to cut off energy. But he has left the country financially isolated.

Trust and monetary policy
Paul De Grauwe and Yuemei Ji (VoxEU) Apr 2, 2022
Trust impacts many aspects of economic life and plays some role in standard macroeconomic models. This column analyses the importance of trust in a more systematic way using a behavioural macroeconomic model. The authors find that large negative supply shocks lead to a bifurcation between good and bad trajectories of output, inflation, and trust. Initial conditions matter in determining which trajectory will be chosen. The model helps to understand and predict the experience of the 1970s with the supply shocks and the recent Covid supply shock.

The future of the UK economy is uncertain
Martin Wolf (FT) Apr 3, 2022
But Rishi Sunak's fiscal illusions are not the right response to a series of external shocks.

Electric vehicle start-ups face their toughest challenge: making cars
Peter Campbell (FT) Apr 3, 2022
Investors have bet heavily hoping to find the next Tesla, but many EV groups are struggling to make the production process work

Thomas Piketty Thinks America Is Primed for Wealth Redistribution
David Marchese (NYT) Apr 3, 2022
The French economist has hope for the country that, to a large extent, invented high, progressive taxation of income.

Good Luck Trying to Sanction China's 4,762 Little Giants
Shuli Ren (Bloomberg Opinion) Apr 3, 2022
Beijing is accelerating its efforts to build a defense against economic warfare.

Stocks' mysterious strength should not stop investors acting
Mohamed El-Erian (FT) Apr 4, 2022
Those heavily exposed should make the most of the strength of equities and take some chips off the table.

New reforms should stop failing Spacs in their tracks
Brooke Masters (FT) Apr 4, 2022
The blank cheque company craze is fading and the SEC is planning tighter rules to prevent a repeat.

Inflation may pave the way to a new era of globalisation
Harold James (FT) Apr 4, 2022
Price surges in the 19th and 20th centuries spurred the use of innovative technologies and changed government policies.

I'll Tax Your Feet
Ed Gresser (WSJ) Apr 4, 2022
Tariffs on goods like clothes and shoes raise costs for cheaper products that low-income families purchase, while often exempting high-end imports.

Thailand's banks not as healthy as they claim
Shawn W. Crispin (AT) Apr 4, 2022
Covid ambulance sirens are ringing out in Bangkok as the kingdom continues to grapple with record-breaking daily caseloads. But it's the warning bells sounding around Thailand's banks that are potentially the greater cause for alarm in one of Asia's worst pandemic-hit and slowest recovering economies.

Why It's Looking More like the 1970s than the 1950s.
Joseph Solis-Mullen (Mises Wire) Apr 4, 2022
It is theoretically possible that through huge gains in productivity, the US could escape inflation and stave off a recession. But don't count on it.

How Africa Can Navigate Growing Monetary Policy Challenges
Tobias Adrian, Gaston Gelos, and David Hofman (IMF) Apr 4, 2022
Tools such as foreign exchange intervention can ease the effects of shocks but need to be carefully weighed against potential longer-term costs.

This Slap From the Yield Curve Can't Be Ignored
John Authers (Bloomberg Opinion) Apr 4, 2022
We shouldn't overlook the real differences from the last significant inversions, but it's still best to make contingency plans for a recession by the end of 2023.

U.S. Economy Is Doomed Without Stronger Consumer Spending
Gary Shilling (Bloomberg Opinion) Apr 4, 2022
With real incomes in the U.S. falling and households reluctant to tap their savings, growth this year will be minimal — or worse.

Down Payments Are So Tricky as a Housing Bubble Brews
Alexis Leondis (Bloomberg Opinion) Apr 4, 2022
A guide to when it's worth borrowing more - or less - than the standard 80% of the value of your new home.

The Infrastructure of Recovery
Riccardo Puliti (Project Syndicate) Apr 4, 2022
Even before the pandemic, overall investment in physical infrastructure such as highways, power lines, and internet cables lagged behind what was needed to meet development goals. To maximize infrastructure's contribution to the global economic recovery and support green and inclusive growth, four imperatives stand out.

The End of the "Global Savings Glut"?
Jim O'Neill (Project Syndicate) Apr 4, 2022
Regardless of whether America's persistent current-account deficits really can be explained primarily by the accumulation of excess savings abroad, recent developments now promise to render this popular theory obsolete. If so, the turmoil we have seen in bond markets so far this year could be just a prelude.

Monetary policy at very low rates
Rashad Ahmed, Claudio Borio, Piti Disyatat, and Boris Hofmann (VoxEU) Apr 4, 2022
Nominal interest rates in many advanced economies have been low for more than a decade. This column presents evidence that monetary transmission to economic activity is substantially weaker when nominal interest rates fall to very low levels, and that the strength of transmission tends to wane the longer interest rates stay low. This suggests that the observed flattening of the Phillips curve has gone hand in hand with a corresponding steepening of the IS curve. If so, monetary policy trade-offs have become more challenging.

"Great Resignations" Are Common During Fast Recoveries
Bart Hobijn (FRBSF Econ Letter) Apr 4, 2022
The record percentage of workers who are quitting their jobs, known as the "Great Resignation," is not a shift in worker attitudes in the wake of the pandemic. Evidence on which workers are quitting suggests that it reflects the strong rebound of the demand for younger and less-educated workers. Historical data on quits in manufacturing suggest that the current wave is not unusual. Waves of job quits have occurred during all fast recoveries in the postwar period.

The City's nickel crisis is an embarrassing failure
Helen Thomas (FT) Apr 5, 2022
Regulators are set to review the London Metal Exchange's suspension of nickel trading but should also ask questions of themselves.

Investors hit by globalisation retreat
John Redwood (FT) Apr 5, 2022
Trade sanctions, Covid and war slow growth.

Normalising the 'new different' will be a hard task
Lena Komileva (FT) Apr 5, 2022
After the emergency response to the pandemic, central banks must make policy shifts.

The U.S. Economy Is Booming. So Why Are Economists Worrying About a Recession?
Ben Casselman (NYT) Apr 5, 2022
There is little sign that a recession is imminent. But sky-high demand and supply shortages are testing the economy's limits.

Iran's Master Class in Evading Sanctions
Mark Dubowitz and Matthew Zweig (WSJ) Apr 5, 2022
The 'central banker of terrorism' could coach Russia on how to diminish pressure from the West over the Ukraine war.

How Will Inflation End?
William A. Galston (WSJ) Apr 5, 2022
Larry Summers forecasts a major recession and high unemployment.

My inflation warnings have spurred questions. Here are my answers.
Lawrence H. Summers (WaPo) Apr 5, 2022
History is not on the side of those who forecast a soft landing for the economy.

The "Rules-Based International Order" Is Dead. Washington Killed It.
Ryan McMaken (Mises Wire) Apr 5, 2022
From globalization to sanctions, to international institutions like the UN, the US is leading a small global fragment that's little more than NATO and a handful of friends. Meanwhile, two-thirds of the global economy isn't signing on.

Sanctions and the Global Economy
Lawrence H. Summers (BRINK) Apr 5, 2022
The economic sanctions placed on Russia are unparalleled in both size and scope.

Is high inflation here to stay?
Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge (Brookings) Apr 5, 2022
For nearly a half century, global inflation rates were headed one way: down. Since the early 1970s, supported by structural factors that included globalization, better policy frameworks, big demographic changes, and rapid technological advances, the world achieved a remarkable decline in inflation. But since late 2020, the global inflation rate has risen sharply to over six percent due to unprecedented policy support for inflation, the release of pent-up demand, persistent supply disruptions, and surging commodity prices. The commodity price surge triggered by Russia's invasion of Ukraine last month is adding to these price pressures. The consequences for growth, stability, and poverty are likely to be terrible.

Long-Ago Bond Routs Still Cast a Shadow on Wall Street
Marc Rubinstein (Bloomberg Opinion) Apr 5, 2022
Traders can't be pleased Fed Chair Jerome Powell held up 1994's rate increases as a model.

How to Be a Winner From De-Globalization
John Authers (Bloomberg Opinion) Apr 5, 2022
Mexico is a prime example of an emerging market that was knocked off track by China's rise and globalization. Can it seize this new chance?

Do Rate Hikes Always Punish Growth Stocks? Think Again
Nir Kaissar (Bloomberg Opinion) Apr 5, 2022
Historical data doesn't back up the perception that tighter monetary policy favors value stocks.

Shock Therapy for Neoliberals
Joseph E. Stiglitz (Project Syndicate) Apr 5, 2022
Like previous disruptions to the global economy, Russia's war in Ukraine has highlighted the fallacy of relying on markets alone to mitigate risks and strengthen countries' resilience. Neoliberalism has failed yet another test and must finally be replaced by a new economic vision based on new values.

Why Orbán Won Again
Dorottya Szikra and Mitchell A. Orenstein (Project Syndicate) Apr 5, 2022
Hungary's general election showed that voters are willing to back a leader who violates European norms if it serves their economic interests. The challenge for Viktor Orbán's opponents is to devise economic and social policies that attract not only the growing middle class but also those left behind by Orbán's agenda.

Sanctions and the international monetary system
Markus K Brunnermeier, Harold James, and Jean-Pierre Landau (VoxEU) Apr 5, 2022
The freezing of Russian foreign exchange reserves will have long-term and systemic consequences. This column argues, however, that the dominant role of the dollar as a reserve currency will be unaffected. No other country can provide the world with a large, liquid government bond market and a fully open capital account. Sanctions may have significant long-term effects on the demand for reserves. Countries may reduce their dependence on reserves by limiting their exposure to financial shocks and partially restricting capital movements. The international monetary system may evolve towards to a new architecture, where cross-border financial integration is reduced.

Ukraine's War Has Already Changed the World's Economy
Adam Tooze (FP) Apr 5, 2022
Global economics will never be the same—but not in the ways you might think.

The US dollar's status is safe for now
FT View Apr 6, 2022
The greenback is trusted in ways other currencies cannot replicate.

The risks of Australia's 'house and holes' economy are rising
Satyajit Das (FT) Apr 6, 2022
As the country faces an election, it is increasingly reliant on housing and mining for growth.

The risks of Australia's 'house and holes' economy are rising
Satyajit Das (FT) Apr 6, 2022
As the country faces an election, it is increasingly reliant on housing and mining for growth.

Five reasons to be optimistic about the survival of globalisation
Alan Beattie (FT) Apr 6, 2022
Cross-border markets in trade, investment, data and labour have come through plenty of shocks before.

Why Tracking Putin's Wealth Is So Difficult
Mike McIntire (NYT) Apr 6, 2022
Amid speculation that oligarchs are holding cash and luxury assets for the Russian president, many of his extravagances can be traced elsewhere: the Russian state.

Wish the Fed Luck as It Seeks a Soft Landing on Inflation
Alan S. Blinder (WSJ) Apr 6, 2022
Powell's post-pandemic optimism didn't count on adverse supply shocks from the war in Ukraine.

Getting real about US interest rates
Urban C. Lehner (AT) Apr 6, 2022
The interest-rate outlook keeps getting bleaker. Fed chair Jerome Powell said Russia's invasion of Ukraine had exacerbated inflation and undermined the Fed's hopes earlier this year that price increases would soon be coming down. In shifting to a full-fledged focus on price stability, the Fed is essentially admitting its inflation-hawk critics have been right.

First Global Bank Stress Test Highlights Increased Financial Resilience
Tobias Adrian, Vikram Haksar and Ivo Krznar (IMF) Apr 6, 2022
The world's banking systems saw significant capital increases ahead of the pandemic and are resilient to very large shocks.

How Will Triple-Digit Oil Impact the Energy Transition?
Milan Taylor, Dan Blobaum and Geoff Smith (BRINK) Apr 6, 2022
After Russia's invasion of Ukraine, prices for oil and gas climbed past $100 per barrel. A sustained period of triple-digit oil prices should lead to increased opportunities for integrated energy companies to sell off their oil and gas assets and accelerate their investments in renewable energy projects.

Russia's ruble actions are monetary theater of the absurd
Patrick Honohan (PIIE) Apr 6, 2022
It would be a stretch to say that the ruble has been turned into rubble, but the sanctioning of the Bank of Russia by the United States, European Union, and other major economic powers has jolted the Russian monetary system, forcing monetary authorities to revert to a command-and-control approach largely abandoned in the 1990s. Money and banking in Russia are now caught in a Looking-Glass world in which exchange rates are not what they seem, and Russia's hard-won reputation for monetary and financial acumen, like its reputation for military prowess, is in tatters.

Europe's Hypocritical Gas Policy Isn't Sustainable
Javier Blas (Bloomberg Opinion) Apr 6, 2022
The EU can't keep funding Russia's war by paying for energy supplies.

Macron's 'Revolution' Faces a Reckoning
Lionel Laurent (Bloomberg Opinion) Apr 6, 2022
France's leader can claim an improved economy and greater European influence, but social unrest and democratic fatigue are deepening.

If Stocks Don't Fall, the Fed Needs to Force Them
William C Dudley (Bloomberg Opinion) Apr 6, 2022
Tightening financial conditions will be key to getting inflation under control.

U.S. Needs a Strategic Reserve for Green Energy
Conor Sen (Bloomberg Opinion) Apr 6, 2022
As the world moves away from oil, the government should stockpile metals and other commodities vital to the economy's transition to cleaner sources of fuel.

Is Putin's War Driving Up Commodity Prices?
Daniel Gros (Project Syndicate) Apr 6, 2022
If the Ukraine war was the main reason why commodity prices have reached their current heights, consumers should receive compensation and governments can justify higher fiscal deficits. But there is good reason to think the principal causes lie elsewhere – and that a very different policy response is in order.

Globalisation and the effective taxation of capital versus labour
Pierre Bachas, Matthew Fisher-Post, Anders Jensen, and Gabriel Zucman (VoxEU) Apr 6, 2022
Globalisation has wide-ranging effects on tax systems. This column uses a new dataset of taxes on capital and labour across countries and time to assess these dynamics. The authors document a global convergence of average effective labour and capital taxes over time, as labour taxes have increased and capital taxes fallen. However, the large fall in capital taxation in developed economies contrasts its gradual rise in developing economies, albeit from a low base. This trend is consistent with evidence suggesting the causal effect of trade integration on the tax capacity of developing economies.

Global supply chain risk and resilience
Richard Baldwin and Rebecca Freeman (VoxEU) Apr 6, 2022
Supply disruptions caused by systemic shocks such as Brexit, Covid, and Russia-Ukraine tensions have catapulted the issue of risk in global supply chains to the top of policy agendas. In some sectors, however, there is a wedge between private and social risk appetite, or increased risks due to lack of supply chain visibility. This column discusses the types of risks to and from supply chains, and how supply chains have recovered from past shocks. It then proposes a risk-reward framework for thinking about when policy interventions are necessary.

Preventing a crisis in emerging markets
FT View Apr 7, 2022
Efforts at sovereign debt relief have stalled at the wrong time.

ESG playbook for bond investors needs a rewrite
Ellen Carr (FT) Apr 7, 2022
It will take an evolution of fixed-income managers' approach to make a difference to corporate behaviour.

Time for Europe to reconnect with commodities
Paul Norman Smith (FT) Apr 7, 2022
Region risks becoming manufacturing museum unless it can secure supply of critical metals.

Branko Milanovic: 'The forces of self-interest and technology cannot be undone'
Martin Sandbu (FT) Apr 7, 2022
Inequality may have stopped rising in big countries, but what happens to global inequality now depends on Africa.

Financial warfare: will there be a backlash against the dollar?
Robin Wigglesworth, Polina Ivanova, and Colby Smith (FT) Apr 7, 2022
The sanctions freezing Russia's foreign currency reserves have created an incentive for countries to bypass the US currency

How Many Billionaires Are There, Anyway?
Willy Staley (NYT) Apr 7, 2022
Forbes thinks there are 735 of them in America. Another count finds 927. Whatever the answer, the mystery is revealing — and the number is growing rapidly.

China's financial rescue fund may be a game-changer
William Pesek (AT) Apr 7, 2022
As President Xi Jinping tries to bring order to Asia's biggest economy, he's expanding the central bank's mandate in ways that may prove game-changing. Though details remain vague, new mechanisms aim to help the People's Bank of China (PBOC) detect risks in too-big-to-fail firms and dispose of bad assets in the country's $60 trillion financial system.

Do "Inflationary Expectations" Cause Inflation? Contra Krugman, the Answer Is No
Frank Shostak (Mises Wire) Apr 7, 2022
Paul Krugman recently wrote that the reason we see high inflation is that people mistakenly believe inflation is in our future and act accordingly. This reasoning is false.

Restructuring Debt of Poorer Nations Requires More Efficient Coordination
Guillaume Chabert, Martin Cerisola, and Dalia Hakura (IMF) Apr 7, 2022
An improved common framework for debt treatment could clear a path through an increasingly complex creditor landscape.

Has the Federal Reserve Lost the Fight Against Inflation?
Bloomberg View Apr 7, 2022
The central bank has been slow to tighten monetary policy, but the bond market seems to believe that it can still get consumers prices under control before it's too late.

Equitable Capitalism or Bust
Bertrand Badré and Yann Coatanlem (Project Syndicate) Apr 7, 2022
Two decades of economic crises have exposed the flaws of a system that has grown increasingly incompatible with sustainable development and equality of opportunity. To reform capitalism requires rethinking social welfare and how public policy can tackle inequality in all its forms.

Eurozone: Slowing Growth, Faster Inflation and More Timely Monetary Tightening
Nick Bennenbroek (WF Econ Group) Apr 7, 2022
The Eurozone economy has had an unsettled start to 2022, as a temporary surge in COVID cases and Ukraine-related uncertainties have weighed on activity. From a longer-term perspective there also appears to be some softening in consumer fundamentals, and we have lowered our Eurozone GDP growth forecast for 2022 slightly to 3.1%. In contrast, Eurozone headline CPI inflation has moved sharply higher, and core inflation has also firmed, though to a much lesser extent. Still, even if price gains do not become broad-based, persistently elevated energy prices and headline CPI inflation could still prompt a response from the European Central Bank (ECB). Indeed, we now expect earlier and more rapid monetary tightening from the ECB than previously. We forecast an initial 25 bps increase in the Deposit Rate at the September 2022 meeting (compared to December previously). Beyond that, we expect a steady series of 25 bps increases at the December 2022, March 2023 and June 2023 meetings, which would lift the Deposit Rate to +0.50% by the middle of next year.

Fallout from Ukraine threatens the G20's future
Gillian Tett (FT) Apr 8, 2022
If the group becomes impotent, Washington urgently needs to find other ways to engage with emerging market players.

The lesson humble sea urchins offer about economic resilience
Tim Harford (FT) Apr 8, 2022
The internet ensured pandemic resilience. But the next crisis could be different.

Container shipping rates are going mad again
Claire Jones (FT) Apr 8, 2022
The watery part of the world economy is yet to find its anchor.

Wonking Out: Russian Gas, Acid Rain and Industrial Scaremongers
Paul Krugman (NYT) Apr 8, 2022
Why you can't trust economic advice from big business.

Globalization Is Over. The Global Culture Wars Have Begun.
David Brooks (NYT) Apr 8, 2022
We're entering the age of red world versus blue world.

Unseemly Fed-ishisms in US monetary policy
David P. Goldman (AT) Apr 8, 2022
As the worst inflation in 40 years became manifest starting a year ago, the Federal Reserve repeatedly denied that it was happening and that rising prices were only "transitory." Now that it is upon us, the Federal Reserve is raising interest rates and tightening credit conditions as a putative remedy.

The Fed Can't Fix the Economy, but It Can Break It
Jon Wolfenbarger (Mises Wire) Apr 8, 2022
Despite assurances from politicians and the media, the Federal Reserve System is not a collection of geniuses who stand guard against inflation and recession. Instead, think of the Fed policy makers as the Keystone Cops of central banking.

Debt sustainability and low interest rates: A word of caution
David Crowe, Jörg Haas, Valentine Millot, ?ukasz Rawdanowicz and Sébastien Turban (OECD Ecoscope) Apr 8, 2022
Debates about sovereign debt sustainability have revived in light of the massive increases in debt since the 2008 economic crisis and more recently during the COVID-19 pandemic. In this context, some argue that debt sustainability risks are significantly reduced as long as the interest rate is lower than the rate of GDP growth. We offer a word of caution in our recent paper: Constraints and demands on public finances: Considerations of resilient fiscal policy (Rawdanowicz et al., 2021).

The Simplest Way to Improve Monetary Policy
Clive Crook (Bloomberg Opinion) Apr 8, 2022
Persistent inflation has taken the Fed by surprise. It didn't need to happen.

Why the Federal Reserve's Shrinking Balance Sheet Matters
Mohamed A El-Erian (Bloomberg Opinion) Apr 8, 2022
The reduction will have significant implications for the economy and financial markets. Here are some key issues to watch.

Who Will Buy Bonds the Fed No Longer Wants?
Marcus Ashworth and Mark Gilbert (Bloomberg Opinion) Apr 8, 2022
The new era of inflation has only just begun to wreak havoc.

The Dollar's Reserves of Strength
Gene Frieda (Gene Frieda) Apr 8, 2022
The US-China trade war and the recent freezing of much of Russia's official foreign-exchange reserves have again raised fears of an exodus from the dollar. But no one should write the greenback's obituary just yet.

The IMF's thinking on capital controls and next steps
Anton Korinek, Prakash Loungani, and Jonathan D. Ostry (VoxEU) Apr 8, 2022
The large capital outflows from China since the onset of the war in Ukraine serve as a reminder of the volatility of capital flows. This column argues that the IMF's recent acceptance of the occasional need for pre-emptive use of capital controls to increase resilience against volatile capital flows continues the welcome evolution of the international financial institution's policies. The framework should continue to evolve to provide countries with policy space when capital flows impinge on domestic objectives (e.g. reducing inequality) or generate international spillovers.

Central bank digital currencies, community currencies, and the reinvention of money
Susana Martín Belmonte, Christian Gelleri, and Jim Stodder (VoxEU) Apr 8, 2022
Some countries have issued their own central bank digital currencies, and many European economists favour such a currency too. This column shows that when properly designed, central bank digital currencies can help stabilise the financial and monetary system. Furthermore, a complementary currency backed by a central bank digital currency can not only compensate for the demise of commercial bank money, but it can also democratise money creation. The authors also show that complementary currencies can have higher multiplier effects on local expenditure, allow central banks to control circulation velocity, and help countries in currency crises.

China's overseas lending and the war in Ukraine
Sebastian Horn, Carmen Reinhart, and Christoph Trebesch (VoxEU) Apr 8, 2022
China and Russia have built close financial ties over the past ten years, with Russia becoming the largest recipient of Belt and Road lending. Given the sums at stake, the war in Ukraine is putting China's overseas lending portfolio at higher risk than ever before. This column argues that this is likely to make Chinese state-owned banks more cautious in extending fresh international loans and in rolling over old ones. Because China is a common lender to many developing countries, they now face the added risk of a 'sudden stop' in foreign lending.

The Fall and Rise of the Russian Ruble
Cameron Abadi (FP) Apr 8, 2022
Western sanctions ravaged the ruble after Putin's invasion of Ukraine. How did the currency bounce back?

Reserve Bank of India's Time to Focus on Inflation
Brendan McKenna (WF Econ Group) Apr 8, 2022
In our view, the Reserve Bank of India's (RBI) April meeting signaled in a stark shift in the central bank's stance on monetary policy. Policymaker actions and commentary, along with the official statement and forecast revisions, indicate to us the time has arrived for the RBI to initiate its tightening cycle. The April meeting reinforced our view that RBI policymakers will lift interest rates starting in June; however, tighter monetary policy is likely not enough to prevent rupee weakness and we continue to forecast modest rupee depreciation through the end of 2022.

Vladimir Putin is taking global markets back to the noughties
Katie Martin (FT) Apr 9, 2022
Russia's war in Ukraine has revived the market preoccupation with central banks' foreign reserves.

How the Federal Reserve became a reality TV show
Gary Silverman (FT) Apr 9, 2022
Keeping up the Kardashians' way helps the central bank maintain calm in the markets — but it has its costs.

What the Treasury bill collateral crunch tells us about trust
John Dizard (FT) Apr 9, 2022
A persistent spread has opened up between two safe US government backed instruments.

A toxic mix of recession risks hangs over the world economy
Economist Apr 9, 2022
American inflation, Europe's energy crisis and China's Omicron outbreak threaten the world economy with a downturn

Omicron is dealing a big blow to China's economy
Economist Apr 9, 2022
For a timely take, analysts are turning to unconventional indicators.

Are labour markets in the rich world too tight?
Economist Apr 9, 2022
Certainly in America, and probably elsewhere.

The high stakes Indo-Pacific Economic Framework
Joshua Meltzer (EAF) Apr 9, 2022
The IPEF is an opportunity to promote US leadership and deepen US ties with Indo-Pacific countries at a critical geopolitical moment.

Ukraine needs an ambitious new Marshall Plan from Europe
Martin Sandbu (FT) Apr 10, 2022
Physically rebuilding what Putin has destroyed must wait until his war stops, but other aspects of reconstruction need not.

Few Cars, Lots of Customers: Why Autos Are an Inflation Risk
Jeanna Smialek (NYT) Apr 10, 2022
Economists are betting that supply chains for all kinds of goods will heal, shortages will ease and price gains will slow. Cars are a wild card in those forecasts.

A US Indo-Pacific framework that tries to build out China is unrealistic
Mary Lovely (EAF) Apr 10, 2022
The plan envisages unprecedented cooperation so that the strategic environment of the Indo-Pacific is fundamentally changed.

Central Banks Can Save DeFi, as Weird as That Sounds
Andy Mukherjee (Bloomberg Opinion) Apr 10, 2022
The financial metaverse would be better served by truly stable currencies but the powers-that-be need to join in.

The changing nature of globalisation
FT View Apr 11, 2022
Financial crisis, pandemic and war have put supply chains under stress.

How Putin aged into a classic oil state autocrat
Ruchir Sharma (FT) Apr 11, 2022
From an economic perspective, the Russian leader is a universal type.

Monetary policy must serve the real economy not just financial markets
Mohamed El-Erian (FT) Apr 11, 2022
Two-decade-long market dominance over monetary policy threatened by high and persistent inflation.

It's time to stop betting on a wimpy yuan
William Pesek (AT) Apr 11, 2022
China's latest inflation data offer something for everyone. Economists fretting runaway global costs are alarmed by the 8.3% jump in producer prices in March from a year earlier. Those in the "inflation-risks-are-manageable" camp focus on the milder 1.5% rise in consumer prices. The truth, as is often the case, lies somewhere in the middle.

Pakistan's new PM inherits an economic nightmare
FM Shakil (AT) Apr 11, 2022
Pakistan's new government faces major economic challenges on both the internal and external fronts. Economists say the previous Imran Khan government made a mess of the economy and failed to live up to its economic agenda of providing 10 million jobs and 5 million homes, good governance, economic growth and tax reforms.

Is this the beginning of a deglobalisation trend?
Joy Macknight (Banker) Apr 11, 2022
Megatrends, including geopolitical tensions and supply chain disruption, are shaping the future of global trade as multilateral efforts wane.

Dangerous Global Debt Burden Requires Decisive Cooperation
Vitor Gaspar and Ceyla Pazarbasioglu (IMF) Apr 11, 2022
With elevated risks to sovereign debt, a global cooperative approach is necessary to reach an orderly resolution of debt problems and prevent defaults.

How the ECB Should Begin to Normalize Monetary Policy
Lena Komileva (Bloomberg Opinion) Apr 11, 2022
The central bank needs some new tools to navigate the unique challenges that are likely to confront the euro-zone economy.

How to Break Out From the Great Stagnation
Adrian Wooldridge (Bloomberg Opinion) Apr 11, 2022
The key to higher growth lies in a well-managed transition from a tangible to an intangible economy.

There's a Bull Market in Macro Doom
Jared Dillian (Bloomberg Opinion) Apr 11, 2022
Bearish arguments are compelling because they sound smart. That's what makes them seductive to novice investors.

The IMF Needs to Mitigate Climate Transition Risk
Xiaobei He, Irene Monasterolo, and Kevin P. Gallagher (Project Syndicate) Apr 11, 2022
The potential of countries' climate policies to damage other countries' economies has not received as much attention as it deserves. Without proper international coordination, well-intended measures in major economies could further widen the income and welfare gap between rich and poor countries.

Development Economics Goes North
Dani Rodrik (Project Syndicate) Apr 11, 2022
When economists talk about global convergence, what they usually have in mind is that developing economies grow more rapidly than advanced economies, and the incomes of the world's poor rise to levels in richer economies. The irony nowadays is that we are experiencing downward rather than upward convergence.

Import liberalisation as export destruction
Holger Breinlich, Elsa Leromain, Dennis Novy, and Thomas Sampson (VoxEU) Apr 11, 2022
Import liberalisation brings down import costs and increases competition. But with scale economies, import liberalisation can also reduce the productivity of domestic industry by shrinking its scale, leading to lower exports. As this column shows, evidence from the permanent normalisation of US trade relations with China in the early 2000s reveals that increased Chinese import competition indeed reduced US exports through this channel, implying the presence of industry-level scale economies in the US. Nevertheless, aggregate US openness still increased and the liberalisation raised US welfare.

Reconciling the EU's domestic and global agendas
Marco Buti and Marcello Messori (VoxEU) Apr 11, 2022
The EU's domestic and international agendas are usually discussed in various forums. Given the fallout from the Covid crisis and the dramatic consequences of the Russian invasion of Ukraine, this column argues that these agendas should eventually merge. A central fiscal capacity is a key element for reconciling the EU's domestic and international goals. Domestically, it would help achieve a balanced policy mix and ensure an adequate supply of European public goods, and globally it would give credibility to the geo-economic role of the EU.

The role of capital controls and macroprudential measures in taming capital flows
Jean-Charles Bricongne and Rémy Lecat (VoxEU) Apr 11, 2022
Despite the large capital outflows during the Covid-19 crisis, emerging economies did not make extensive use of capital controls. Indeed, these have had limited effects on capital outflows, being more effective on inflows. This column shows that macroprudential measures on the financial sector, which are increasingly part of the policy mix, have a positive impact on outflows when applied in the origin country and a negative impact on inflows when applied in the destination country. Cooperation between origin and destination countries, both on capital controls and macroprudential measures, has more than additive effects.

The World Bank and IMF Are Getting It Wrong on Climate Change
Vijaya Ramachandran and Arthur Baker (FP) Apr 11, 2022
Rich donor countries are working to deprioritize poverty reduction and economic development in the global south.

ECB has a narrow path to tread on interest rates and spreads
Reza Moghadam (FT) Apr 12, 2022
The case for monetary tightening is becoming urgent but the central bank does have room to act.

King Dollar is in no danger of losing its world financial crown
Megan Greene (FT) Apr 12, 2022
Neither the renminbi nor cryptocurrencies pose a serious threat to the greenback's supremacy.

The problem of low returns
Philip Coggan (FT) Apr 12, 2022
Investors will have to put more money aside if they want to achieve their targets

The rest of the world should watch what is happening in Shanghai
Robin Harding (FT) Apr 12, 2022
Covid lockdown in China's biggest city will have global economic reverberations.

This Isn't Putin's Inflation
WSJ View Apr 12, 2022
The price rises began long before Russia invaded Ukraine and will be hard to stop.

Even in a Hot Economy, Wages Aren't Keeping Up With Inflation
Jason Furman (WSJ) Apr 12, 2022
Tight labor markets aren't as good for workers as D.C. economists imagine. High demand raises prices, too.

Consumer prices in America rise at their fastest pace since 1981
Economist Apr 12, 2022
How inflation is becoming more broad-based.

Real Wages Fall Again as Inflation Surges and the Fed Plays the Blame Game
Ryan McMaken (Mises Wire) Apr 12, 2022
Money printing may bring rising wages, but it also brings rising prices for goods and services. And those increases are outpacing the wage increases.

Global Trade Needs More Supply Diversity, Not Less
Davide Malacrino, Adil Mohommad, and Andrea Presbitero (IMF) Apr 12, 2022
Countries with trade partners that implemented more stringent lockdowns had a sharper drop in imports. Though trade flows have adjusted, more diversified global value chains could help lessen the impact of future shocks.

Tax Coordination Can Lead to a Fairer, Greener Global Economy
Vitor Gaspar, Shafik Hebous, and Paolo Mauro (IMF) Apr 12, 2022
Cooperation across countries can raise revenue, tackle inequality, and fight climate change.

Looking at all the wrong places to reduce the US trade deficit
Robert Z. Lawrence (PIIE) Apr 12, 2022
Explaining why trade deficits occur is not easy. Common sense seems to suggest that if America stopped importing oil, or erected new barriers to imports, or encouraged more domestic production, the trade deficit would shrink. But as economists have tried to explain for years, trade deficits result when a country spends more in total than it produces, and since the US addiction to foreign borrowing is persistent, piecemeal efforts are unlikely to reduce the US trade deficit. Trade policy cannot reduce the trade deficit. If the trade balance is viewed as a problem, the United States must either save more or invest less.

Europe needs action now on inflation to brake loss of euro trust
Jürgen Stark (OMFIF) Apr 12, 2022
The European Central Bank's asymmetric monetary policy approach, followed for several years, has now become a source of instability – the opposite of what its mandate decrees. After announcement of the 7.5% inflation rate in March, the highest since the euro began, this policy of vacillation has run its course and must now end. The time has come to brake the loss of trust in the ECB and in the stability of the euro. The longer the ECB waits, the steeper and more thorny the path ahead.

We Still Haven't Reached the Inflation Finale
Brendan Brown (Mises Wire) Apr 12, 2022
Is it too much to hope that the current inflation will "burn out" via similar mechanisms that have reined in inflation in the past?

Don't Expect Clairvoyance From the Federal Reserve
Bloomberg View Apr 12, 2022
The balance of future supply and demand is unknowable, and so is the correct path for interest rates. It would be foolish to pretend otherwise.

Is There a Market Upside to China's Covid Lockdowns?
Shuli Ren (Bloomberg Opinion) Apr 12, 2022
Policy makers have the ammunition to boost stocks as they counter an economic slowdown.

Lockdown Anger in Shanghai Won't Fade Anytime Soon
Adam Minter (Bloomberg Opinion) Apr 12, 2022
The accumulation of misery among the city's thriving middle class is undermining faith in a government that's spent decades improving Chinese living standards.

A Russian Default Is a Question of When, Not If
Marcus Ashworth (Bloomberg Opinion) Apr 12, 2022
The U.S. is smothering Russia's ability to pay its debts.

The Irish Are Rich in Foreign Investment
Tyler Cowen (Bloomberg Opinion) Apr 12, 2022
A country's GDP gives a better sense than GNP of its future economic prospects.

Eleven Themes for the New Global Economy, Part 1
Gary Shilling (Bloomberg Opinion) Apr 12, 2022
An unprecedented moment in history is upending significant parts of the world order, perhaps permanently.

The Fed Should Be Ready to Backstop the Commodities Market
Steven Kelly (Bloomberg Opinion) Apr 12, 2022
A market breakdown could have far-reaching economic consequences. The central bank must be prepared to lend emergency support.

A Cooler Jobs Market Is Just What This Economy Needs
Conor Sen (Bloomberg Opinion) Apr 12, 2022
Labor demand is poised to ease, which will help the Federal Reserve tame inflation with less risk of triggering a recession.

Europe's Economy on a Knife Edge
Barry Eichengreen (Project Syndicate) Apr 12, 2022
Before Russian President Vladimir Putin's attack on Ukraine, Europe's recovery from the damage wrought by the COVID-19 pandemic was solidifying. But now European policymakers have exactly zero control over whether their economies' rebound continues.

Hidden Carbon Subsidies Will Destroy Us
Jayati Ghosh and Debamanyu Das (Project Syndicate) Apr 12, 2022
Western governments have been heavily subsidizing their own fossil-fuel industries even as they exhort much poorer countries to do more to reduce greenhouse-gas emissions. But the full extent of these subsidies has been hidden by the methods used to measure them.

Philippe Heim and Bertrand Badre (Project Syndicate) Apr 12, 2022
Managing the fallout from recent global crises will require not just solidarity and collective action but also a stronger commitment to reducing inequality in all its forms. But governments can't do everything, while businesses – particularly banks and financial institutions – will need to do more.

The Incredible Bouncing Ruble
Sergei Guriev (Project Syndicate) Apr 12, 2022
The Russian ruble's return to its pre-war exchange rate should not be mistaken as a sign of strength or resilience. Rather, the currency has benefited from factors that will eventually become major drags on both the federal budget and the real economy.

Monetary and macroprudential policies: Trade-offs and interactions
Luc Laeven, Angela Maddaloni, and Caterina Mendicino (VoxEU) Apr 12, 2022
Monetary and macroprudential policies are key components of the central bank toolkit. This column argues that, when evaluating these policies, their trade-offs and interactions must be taken into account. Macroprudential policy may face a trade-off between credit growth and the risk, whereas the trade-off in monetary policy concerns the intermediation capacity of banks and their risk taking. While monetary and macroprudential policies can both safeguard financial stability, the authors argue that the latter should be the first line of defence. These considerations have significant implications for central banks when deciding policy actions.

Panicky Markets Are the Greatest Danger to Global Food Supply
Sarah Taber (FP) Apr 12, 2022
The loss of Ukrainian and Russian wheat can be made up elsewhere.

The supply chain crunch requires co-ordinated solutions
Ngozi Okonjo-Iweala (FT) Apr 13, 2022
Global shortages during the pandemic are down to long-term weaknesses that must be urgently addressed.

Central bankers cannot afford to ignore the pain in commodities
Karen Petrou (FT) Apr 13, 2022
Bailouts are a last resort but action will be inevitable if market stress becomes systemic.

Recession risks are rising. The United States isn't prepared.
WaPo View Apr 13, 2022
No one wants another recession, but one day — perhaps soon — it will come. The time to get ready is now.

Doing without the dollar
David P. Goldman (AT) Apr 13, 2022
The notion that the dollar's dominance in world finance might come to an end was a fringe view only five years ago when America's net foreign investment position was a mere negative $8 trillion. Now one reads forecasts of the end of the dollar era in research reports by Goldman Sachs and Credit Suisse.

Fast-Moving FinTech Poses Challenge for Regulators
Antonio Garcia Pascual and Fabio Natalucci (IMF) Apr 13, 2022
Emerging firms are quickly making inroads into critical financial services, and often taking on more risk than traditional banks.

The Right Labor Market Policies Can Ease the Green Jobs Transition
John Bluedorn and Niels-Jakob Hansen (IMF) Apr 13, 2022
Measures include job training, tax credits for lower-income workers, green infrastructure and R&D investment push, and a carbon tax.

China Can Teach the West a Lesson on Inflation
Shuli Ren (Bloomberg Opinion) Apr 13, 2022
Consumer prices are surging in the U.S. and Europe, but in China, food and energy costs are becalmed.

Eleven Themes for the New Global Economy, Part 2
Gary Shilling (Bloomberg Opinion) Apr 13, 2022
An unprecedented moment in history is upending significant parts of the world order, perhaps permanently.

Is New Zealand Raising Rates Into a Recession?
Daniel Moss (Bloomberg Opinion) Apr 13, 2022
The country has a record of being quick to increase borrowing costs during a recovery, and undo that work almost as rapidly when growth slows. It's a lesson for the rest of the world.

What to Expect as Inflation Is Getting More Entrenched
John Authers (Bloomberg Opinion) Apr 13, 2022
The focus on "peak" headline numbers shouldn't overlook that price increases are digging in and broadening.

Inflation's New Normal Will Be 4%. Get Used to It.
Allison Schrager (Bloomberg Opinion) Apr 13, 2022
Many of the forces keeping prices in check have started to reverse, but bigger gains in consumer prices won't be bad for the economy as long as they're predictable.

Supply Chain Worries Are Finally Going Viral
Tim Culpan (Bloomberg Opinion) Apr 13, 2022
A new Covid wave in China has made the world once again wake up to the risks of a concentrated manufacturing base.

It's the Uncertainty That Makes Inflation Terrible
Jessica Karl (Bloomberg Opinion) Apr 13, 2022
We can live with higher prices (and we should get used to it). It's the not-knowing part that really makes us nervous.

The Carbon Price Solution
Ben Meng and Anne Simpson (Project Syndicate) Apr 13, 2022
The net-zero transition requires the rapid development at scale of new technologies, energy-efficient infrastructure, and carbon capture and storage. A carbon price, together with the elimination of fossil-fuel subsidies, would give investors powerful incentives to finance these and other imperatives.

Overheating conditions indicate high probability of a US recession
Alex Domash and Lawrence H. Summers (VoxEU) Apr 13, 2022
As inflation accelerates in the US, the Federal Reserve will raise interest rates in the hope of achieving a soft landing for the economy. This column uses historical data on unemployment and inflation to evaluate the likelihood that the Fed can lower inflation without causing a recession. The authors find that low levels of unemployment and high inflation are both strong predictors of future recessions, and that overheating indicators today suggest a very high probability of recession over the next two years. The likelihood of the Fed achieving a soft landing in the economy appears low.

The simple economics of a tariff on Russian energy imports
John Sturm (VoxEU) Apr 13, 2022
As Russia's invasion of Ukraine continues, EU policymakers are weighing more severe sanctions. This column argues that unlike a full energy embargo, introducing small EU tariffs on energy imports from Russia could weaken the Russian economy while simultaneously making the EU better off. While larger tariffs would come at a cost to the EU, they are likely to be more efficient than other sanctions already in place.

Monetary policy and financial stability implications of central bank digital currencies
Jean-Francois Jamet, Arnaud Mehl, Cyril Max Neumann, and Fabio Panetta (VoxEU) Apr 13, 2022
Central banks around the world are exploring the possibility of issuing retail central bank digital currencies. This column takes stock of advances in research on their possible implications for financial stability and monetary policy depending on their design. It also identifies avenues for further research that could usefully inform future policy decisions on such currencies.

Currency Carry Trade by Trucks: The Curious Case of China's Massive Imports from Itself
Xuepeng Liu, Heiwai Tang, Zhi Wang, and Shang-Jin Wei (VoxChina) Apr 14, 2022
Capital controls are common in many developing countries. With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Yet, as long as there is a big difference between domestic and foreign interest rates, the incentive to engage in currency carry trade is present. Using detailed trade data reported by both mainland China's and Hong Kong's governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such "carry trade by trucks."

What the Latest Inflation Figures Mean for the Economy
John Cassidy (New Yorker) Apr 13, 2022
On the Consumer Price Index, fears of a recession, and why Biden "is getting something of a raw deal."

The U.S. Should Stop Nickel and Diming India and Bangladesh
Sanjay Kathuria (FP) Apr 13, 2022
A low-cost program designed to promote economic development has shut out two key partners in Asia.

Politicians are waking up to the fact there are votes in crypto
Eva Szalay (FT) Apr 14, 2022
As more people buy digital assets, many of them young, their appeal as a campaign tool is easy to understand.

Inflation and the Fog of War
Reuven Brenner (WSJ) Apr 14, 2022
Measures like the CPI lose meaning in economically convulsive times like the Covid pandemic years.

Fed tightening is bad news for developing Asia
William Pesek (AT) Apr 14, 2022
It's beginning to feel like 1994 all over again for developing Asia as surging inflation forces the Federal Reserve into a more aggressive tightening cycle. That year, the Fed embarked on a doubling of short-term rates in just 12 months. But this year's shock from Washington could be of another magnitude, perhaps even worse than 1994.

How can independent fiscal institutions support the resilience of public finances?
Scott Cameron, Stéphane Jacobzone, Lisa von Trapp Jörg Haas, ?ukasz Rawdanowicz, and Sébastien Turban (OECD Ecoscope) Apr 14, 2022
Public finances will face significant challenges after the Covid-19 crisis and due to the consequences of the Russian invasion of Ukraine. Government debt has reached the highest levels in decades, albeit interest payments are at historical lows. Population ageing and climate change will weigh on government budgets. Fiscal policy may also need to provide more macroeconomic stabilisation if monetary policy remains constrained by low interest rates.

Higher productivity growth boosts pay—to a greater degree in the United States than Canada
Jacob Greenspon, Anna Stansbury. and Lawrence H. Summers (PIIE) Apr 14, 2022
Worker pay has not kept up with gains in worker productivity in recent decades in the United States, Canada, the United Kingdom, and elsewhere. This raises the question: Does productivity growth actually benefit typical workers by raising their pay—or do the fruits of any increase in productivity growth flow only to investors and people with higher incomes? This question is of great interest to policymakers seeking to reinvigorate productivity growth after the productivity slowdown in recent decades.

Russia Oil Sanctions Don't Have to Be a Blunt Instrument
Margaret L O'Sullivan (Bloomberg Opinion) Apr 14, 2022
The approach used on Iran a decade ago could punish Moscow without risking the global economy.

China Will Be Deglobalization's Big Loser
Minxin Pei (Project Syndicate) Apr 14, 2022
Seven decades ago, Mao Zedong embraced economic self-reliance and foreign-policy militancy, which turned China into an impoverished pariah state. This history should be a stark warning to President Xi Jinping: if he allows Russia to divide the world with its war on Ukraine, it is China that will pay the heaviest price.

More Immigration Will Do Little to Slow U.S. Inflation
Ramesh Ponnuru (Bloomberg Opinion) Apr 14, 2022
Worker shortages and rapidly rising wages are putting strong upward pressure on prices. But importing labor is politically dicey and economically unproductive.

Preventing Developing-Economy Debt Disasters
Rabah Arezki and Mahmoud Mohieldin (Project Syndicate) Apr 14, 2022
Skyrocketing food and energy prices, together with widening sovereign bond spreads, have placed balance sheets in emerging-market and developing economies under severe strain. To avoid disaster, the international community must urgently support bold debt restructuring.

Will America Become the Saudi Arabia of Natural Gas?
Nick Butler (Project Syndicate) Apr 14, 2022
The war in Ukraine and the breakdown of Europe's longstanding energy ties with Russia are transforming the world market for natural gas. For now, Europe's ability to secure alternative supplies depends on the United States' willingness to take on a new global role that it may be reluctant to play.

Are Major Central Banks Doing Enough to Fight Inflation?
PS Commentators Apr 14, 2022
The ongoing war in Ukraine has triggered further spikes in energy and food prices, increasing the pressure on US and eurozone central bankers who had been slow to respond to earlier inflation risks. We asked PS commentators how much, and how fast, they should tighten monetary policy.

Why fiscal multipliers estimates change over time and what determines their magnitude
Atsushi Inoue, Barbara Rossi, and Yiru Wang (VoxEU) Apr 14, 2022
Estimates of ?scal policy multipliers differ widely in the literature. A possible explanation for this wide range of estimates is that the effects of ?scal shocks and the government spending multipliers vary over time, but what exactly determines them is an open question. Using a new time-varying parameter local projection with instrumental variables technique, this column sheds new light on the magnitude of time variation in the effects of fiscal policy shocks and multipliers.

The two-dimensional feature of ECB monetary policy
Lucrezia Reichlin, Giovanni Ricco, and Anshumaan Tuteja (VoxEU) Apr 14, 2022
The ECB has to decide not only on the timing and speed of exit from monetary easing, but also on the sequence. This column uses an empirical model to show that a short-term interest rate tightening in the euro area has undesired effects on output, inflation, and stock market prices if it is coupled with a widening of sovereign spreads. To be effective, the combination of monetary policy instruments as well as the sequence of the use of the tools in the announced tightening cycle must ensure both an increase in the position of the 'risk-free' yield curve and control of sovereign spreads.

Sri Lanka on the Brink
Dushni Weerakoon (FA) Apr 14, 2022
How the pandemic and war in Ukraine led to economic collapse.

The Dangers of China's Decline
Hal Brands (FP) Apr 14, 2022
As China's economic miracle fades, its leaders may become more inclined to take risks.

Why we have to focus on fixing the intangible economy
Tim Harford (FT) Apr 15, 2022
The conventional wisdom that the tangible trumps the intangible these days is wrong.

A confused market leaves investors groping for answers
Katie Martin (FT) Apr 15, 2022
Loading up with tail risk hedges is one option as uncertainty about inflation and future Fed decisions grows.

It is time to relearn the painful inflation lessons of the 1970s
Chris Giles (FT) Apr 15, 2022
Calibrating policy to avoid recession will require as much luck as judgment.

Why the Ukraine War Hasn't Crashed the Stock Market
Holman W. Jenkins, Jr. (WSJ) Apr 15, 2022
All the investment signals say Vladimir Putin can't possibly emerge victorious.

Inflation is likely to stay high. Here's how not to respond.
WaPo View Apr 15, 2022
It's time to sort sound ideas from those that aren't.

Global Economic Uncertainty, Surging Amid War, May Slow Growth
Hites Ahir, Nicholas Bloom and Davide Furceri (IMF) Apr 15, 2022
The World Uncertainty Index is climbing again as the invasion of Ukraine clouds the economic outlook.

Latin America Hit By One Inflationary Shock On Top of Another
Maximiliano Appendino, Ilan Goldfajn, and Samuel Pienknagura (IMF) Apr 15, 2022
After years of fluctuating around targets, inflation in Latin America's largest economies is the highest it's been in 15 years, having suffered two major shocks: the impact of the pandemic, and of the Russia-Ukraine war.

The End of an Economic Illusion
John H. Cochrane (Project Syndicate) Apr 15, 2022
Coming after a year of high inflation, Russia's war in Ukraine is forcing a reckoning for policymakers and commentators everywhere. New macroeconomic realities show that the days of mindless demand stimulus, guaranteed bailouts, and activist climate policies must now be put behind us.

The Forgotten Origins of Silicon Valley
William H. Janeway (Project Syndicate) Apr 15, 2022
Sebastian Mallaby's new book offers a detailed exploration of how US venture capital became the go-to model for commercializing innovations at the technological frontier. But no industry exists in a vacuum, so it is important to consider precisely why this model evolved where and when it did.

Macroeconomic effects of the 2022 sanctions on Russia
Anna Pestova, Mikhail Mamonov, and Steven Ongena (VoxEU) Apr 15, 2022
Following Russia's invasion of Ukraine on 24 February 2022, the US, Europe, and many other countries imposed new economic sanctions on Russia. This column assesses the economic effects of these sanctions using a structural vector auto-regression model of the Russian economy. The findings suggest that industrial production, consumption, and investment will all decline, and that Russian GDP will contract by -12.5% to -16.5% in 2022. Nevertheless, the Russian economy will continue to rely on its existing export model, which may be difficult to undermine, even with potential oil and gas embargoes.

Inflation-induced stock trading errors
Fabio Braggion, Felix von Meyerinck, and Nic Schaub (VoxEU) Apr 15, 2022
Inflation has resurfaced following the COVID-19 pandemic and the war in Ukraine, leading to a lively discussion on how individual investors could protect the real value of their financial wealth against rising prices. This column uses a unique dataset to provide empirical evidence that individual investors in Germany in the 1920s bought less (sold more) stocks when facing higher local inflation. The effect was more pronounced for less sophisticated investors. The authors also find a positive relationship between local inflation and forgone returns following stock sales.

The Age of Slow Growth in China
Daniel H. Rosen (FA) Apr 15, 2022
And what it means for America and the global economy.

China Is Reassessing Western Financial Power After Ukraine
Diana Choyleva (FP) Apr 15, 2022
Beijing is likely to speed up global decoupling.

Beyond Eurocentrism
Ingrid Harvold Kvangraven (Aeon) Apr 15, 2022
If you really want decolonisation, go beyond cultural criticism to the deep structural insights of economist Samir Amin

What other economic weapons could the West wheel out against Russia?
Economist Apr 16, 2022
The debate turns to escrow accounts and secondary sanctions.

What China gets wrong
Economist Apr 16, 2022
The pandemic, the economy and the war in Ukraine.

Xi Jinping's bold plan for China's next phase of innovation
Economist Apr 16, 2022
If it works, the strategy will redraw the country's economic map.

Is There a Case for the Pre-1914 Gold Standard? Yes, If You Believe Inflation Is a Bad Thing
Vibhu Vikramaditya (Mises Wire) Apr 16, 2022
Academic economists since John Maynard Keynes have mocked the classical gold standard, but when government implemented their system, we got inflation and destruction of the currency. Time to rethink the success of that gold standard.

Storm Clouds Over the Global Economy
Eswar Prasad (Project Syndicate) Apr 16, 2022
Following Russia's invasion of Ukraine and a resurgence of inflation around the world, the prospects for a robust global recovery from the COVID-19 pandemic have dimmed. Not only is the macroeconomic outlook more mixed; monetary and fiscal policymakers in major economies also will have less room for maneuver.

China's Economic Trends Hint at Cost of Zero Covid Strategy
Keith Bradsher (NYT) Apr 17, 2022
The country's lockdowns have trapped truck drivers on highways, halted production lines and forced some importers to source goods from outside China.

Cut Tariffs to Help Inflation and Ukraine
WSJ View Apr 17, 2022
A modest easing of border taxes could lower inflation by 1.3 points.

The Coming Green-Energy Inflation
Mark P. Mills (WSJ) Apr 17, 2022
Demand for metals and other commodities will keep skyrocketing unless mandates are reversed.

China's other challenge in growth: Investment in intangible assets
Harry Wu and Janet X. Hao (VoxEU) Apr 17, 2022
China expects its service sector to play an important role in helping the economy restructure. This column measures China's investment in intangibles as a good indicator of an economy's future creativity. China's services sector does not invest sufficiently in intangibles. The Chinese wholesale and retail sector, for example, spends only 1.21% of its value added on intangible assets, compared to 5.7% in the US. Chinese wholesale and retail services would have to invest heavily in building strong brands to catch up with their US counterparts.

America is struggling to counter China's intellectual property theft
FT View Apr 18, 2022
US should avoid racial profiling and raise law enforcement's tech knowhow.

Investors seeking havens must weigh geopolitical risks of China versus US
John Plender (FT) Apr 18, 2022
Reserve currency competition is all about what constitutes the least unsafe option.

It's time for a new Bretton Woods
Rana Foroohar (FT) Apr 18, 2022
Free and fair global markets require shared values.

Patriots vs globalists replaces the left-right divide
Gideon Rachman (FT) Apr 18, 2022
Nationalism is driving French politics in the presidential elections as it has done in the US and Britain.

Bleak assessments of the Russian economy clash with Putin's rosy claims.
Anton Troianovski and Patricia Cohen (NYT) Apr 18, 2022
While Vladimir Putin boasts that Russia is holding up under Western sanctions, his central bank chief and the mayor of Moscow warned that the worst was yet to come.

The Trials of Jerome Powell's Dollar
WSJ View Apr 18, 2022
Greenback strength can fight inflation if Biden and Congress let it.

A Home Is Your Castle Against Rising Inflation
Laurence Kotlikoff (WSJ) Apr 18, 2022
Mortgage rates are up to 5%, and some fear a valuation bubble. Even so, it's a good time to buy.

China's central bank showing no sign of panic
William Pesek (AT) Apr 18, 2022
China's latest gravity-defying gross domestic product (GDP) performance, a better-than-expected 4.8% first-quarter growth rate, is confounding naysayers who have pointed to notable downshifts in retail sales and industrial output as evidence global headwinds are taking a rising toll. Monetary authorities, meanwhile, seem notably unperturbed.

Private Debt to Weigh on Global Economic Recovery
Silvia Albrizio, Sonali Das, Christoffer Koch, Jean-Marc Natal, and Philippe Wingender (IMF) Apr 18, 2022
A record rise in private debt could slow the economic recovery, but the drag on growth will vary across countries and within them.

Emerging-Market Banks' Government Debt Holdings Pose Financial Stability Risks
Andrea Deghi, Fabio Natalucci and Mahvash S. Qureshi (IMF) Apr 18, 2022
Banks' holdings of sovereign debt rise to a record as governments spend to cushion pandemic impact.

The Slower the Fed, the Harder the Landing
William C Dudley (Bloomberg Opinion) Apr 18, 2022
If a recession doesn't happen in the next couple years, it will only be worse.

Globalization's Poster Child Is Facing Political Headwinds
Adrian Wooldridge (Bloomberg Opinion) Apr 18, 2022
The Indian tech giant that inspired how we looked at global business is now grappling with a very different reality.

How Is Russia's Fortress Economy Really Faring?
Clara Ferreira Marques and Scott Johnson (Bloomberg Opinion) Apr 18, 2022
The country hasn't gone into free fall even after being hit with unprecedented sanctions over its invasion of Ukraine. The future looks bleak anyway.

This Is What Living With Long-Term High Inflation Feels Like
Allison Schrager (Bloomberg Opinion) Apr 18, 2022
Americans are entering a period when consumer prices will continue to rise steadily, which will bring a whole different set of costs and benefits to a new generation.

China Is a Lone, Feeble Dove in a World of Hawks
Daniel Moss (Bloomberg Opinion) Apr 18, 2022
Don't expect Beijing's stimulus to lift the global economy when major central banks are moving in the opposite direction.

China Markets Are Only `Uninvestable' for Slackers
Shuli Ren (Bloomberg Opinion) Apr 18, 2022
Dozens of obscure bureaucratic bodies can ruin your trading day, so you've got to do your homework.

Summoning the Spirit of Bretton Woods
Liam Byrne (Project Syndicate) Apr 18, 2022
It is now obvious that poorer countries are caught in a financial vise not of their own making. The West, led by the United States, must equip the International Monetary Fund and World Bank with the tools they need to stabilize poorer economies ravaged by the spike in energy and food prices, COVID-19, and climate change.

CBDCs for the People
Agustín Carstens (Project Syndicate) Apr 18, 2022
With the rapid adoption of digital payment technologies, central banks have an opportunity to explore reforms and new tools, including by issuing their own digital currencies. Provided that policymakers get the design right, a CBDC could go a long way toward improving financial inclusion and driving innovation.

Collective moral hazard and the interbank market
Levent Altinoglu and Joseph Stiglitz (VoxEU) Apr 18, 2022
The interconnected structure of the financial system has been a focal point of debate among policymakers in the wake of recent financial crises. This column offers a theory to help explain the structure of the financial system and its consequences for risk-taking and systemic risk. The authors find that interconnectedness and excessive risk-taking reinforce one another and the anticipation of ex-post government intervention may exacerbate the systemic risk. The theory, in turn, has important implications for the design of macroprudential regulation.

Investigating the drivers of remittance fees
Thorsten Beck, Mathilde Janfils, and Kangni Kpodar (VoxEU) Apr 18, 2022
Remittances continue to be an importance source of development financing, reaching $559 billion to low- and middle-income countries in 2019, but the high cost of sending remittances is a deterrent factor. This column provides fresh evidence on both cost- and risk-based constraints and market structures that are barriers to lower remittance fees. In particular, access to financial institutions, the size and structure of the remittance market, exchange rate stability, and the prevalence of cash transactions matter for remittance costs.

Economic spillovers from the war in Ukraine: The proximity penalty
Jonathan Federle, André Meier, Gernot Müller, and Victor Sehn (VoxEU) Apr 18, 2022
The economic impact of global disasters differs vastly across space. The stock market reaction to the Russian invasion of Ukraine illustrates this clearly. This column compares the cumulative equity returns in 66 countries during a four-week window centred around 24 February 2022. The authors find a large 'proximity penalty' worth about 2.6 percentage points for every 1,000 kilometres a country is closer to Ukraine. Trade-related spillovers account for about two-thirds of this penalty.

China's Still Stumbling Economic Momentum
Brendan McKenna (WF Econ Group) Apr 18, 2022
With the Chinese Lunar New Year passed, China activity and sentiment data are now being released on a more regular schedule. Just recently, a wave of economic data were released, which in our view, suggest China's economy is still decelerating. Another wave of COVID infections and strict virus-containment policies placed pressure on consumer spending nationwide, and while Q1-2022 GDP and activity data were underwhelming, these data likely do not fully reflect the economic impact of the government's Zero-COVID approach to the virus. In our view, lockdowns will make China's 5.5% annual growth target for this year exceedingly difficult to achieve. We believe China's economy will grow only 4.9% this year, and as PBoC policymakers ease monetary policy further, the renminbi should weaken gradually over the remainder of this year.

Central bankers should think twice before pressing the brake even harder
Martin Sandbu (FT) Apr 19, 2022
The war against Ukraine has brought a new negative supply shock on top of the old one.

Corporate Tax Reform Worked
WSJ View Apr 19, 2022
Revenue is surging, exceeding what CBO and critics predicted.

Biden's Errors Worsen Inflation
Mitt Romney (WSJ) Apr 19, 2022
He needs to ditch his woke advisers and make growth the overriding priority.

Myanmar's de-dollarization looks like financial suicide
Bertil Lintner (AT) Apr 19, 2022
After a year of political, social and economic self-destruction, Myanmar's coup-installed junta appears now to be committing financial suicide with a central bank directive requiring all Myanmar citizens to change their foreign currency holdings and transmittances from overseas into local currency kyats at state-licensed banks.

China's central bank showing no sign of panic
William Pesek (AT) Apr 19, 2022
China's latest gravity-defying gross domestic product (GDP) performance, a better-than-expected 4.8% first-quarter growth rate, is confounding naysayers who have pointed to notable downshifts in retail sales and industrial output as evidence global headwinds are taking a rising toll. Monetary authorities, meanwhile, seem notably unperturbed.

War Dims Global Economic Outlook as Inflation Accelerates
Pierre-Olivier Gourinchas (IMF) Apr 19, 2022
The effects of the war will propagate far and wide, adding to price pressures and exacerbating significant policy challenges.

Financial Stability Risks Grow as War Complicates Push to Contain Inflation
Tobias Adrian (IMF) Apr 19, 2022
While no systemic event has materialized, the balance of risks has tilted more firmly to the downside.

Sri Lanka's Economic Crisis Needs a Political Fix
Bloomberg View Apr 19, 2022
Shrinking the role of the president would open the door to the broad national-unity government that the country will need to dig itself out of its debt trap.

There's No Place Like a Supply Chain Close to Home
Rachel Sanderson (Bloomberg Opinion) Apr 19, 2022
But it's complicated for European companies. Sometimes, suppliers turn out to be in regional trouble spots.

Big Oil's Windfall Creates a Quandary for the Industry
Liam Denning (Bloomberg Opinion) Apr 19, 2022
What will the companies do with all their cash? Probably not drill more to help lower gasoline prices.

What We Need for Long-Term Peace and Prosperity
Margaret Kuhlow (Project Syndicate) Apr 19, 2022
Recent crises have exposed the shortcomings of our international institutions and growth-obsessed economic models, pointing to the need for fundamental reforms. The situation demands a new global commission to reorient our systems toward sustainable, "nature-positive" development.

A Perfect Storm for Developing Countries
Ngaire Woods (Project Syndicate) Apr 19, 2022
Interrelated economic and political crises in poorer countries are putting millions of lives at risk, but mitigation is possible. Leading economies must refrain from beggar-thy-neighbor policies and use their combined resources in the IMF and the World Bank to act quickly and unconditionally to avert disaster.

Putin's War Threatens Microchips, Teeth, and Beer
Christina Lu and Robbie Gramer (FP) Apr 19, 2022
Russia's invasion has torn asunder oil and agricultural markets. But there's lots more economic carnage on the way.

Russian aggression may cause global starvation
FT View Apr 20, 2022
Rich countries have an obligation to contain growing food price crisis.

What Janet Yellen Gets Right About the World Economic Order
Thomas J. Duesterberg (WSJ) Apr 20, 2022
The U.S. should develop new trade agreements 'on terms that work better for American workers.'

Beijing unveils measures to keep supply chains moving
Jeff Pao (AT) Apr 20, 2022
China has launched 23 new measures to support the businesses and people affected by the recent Covid-19 outbreaks, according to a joint statement issued by its central bank and foreign exchange regulator. The measures are aimed at supporting entities affected by the epidemic, ensuring unimpeded flows in the economy and promoting exports.

How ASEAN Is Adapting to a Changing World
Niharika Mandhana (BRINK) Apr 20, 2022
The Association of Southeast Asian Nations has survived for decades, despite a great deal of diversity among the 10 countries that make up the regional block. But how will ASEAN navigate changing global politics, economic uncertainty and internal divisions?

Governments Need Agile Fiscal Policies as Food and Fuel Prices Spike
Jean-Marc Fournier, Vitor Gaspar, Paulo Medas and Roberto Accioly Perrelli (IMF) Apr 20, 2022
Spending imperatives from pandemic and war meet high debt and tight budget constraints.

The ECB Must Act Soon to Avoid a Currency Crisis
Marcus Ashworth (Bloomberg Opinion) Apr 20, 2022
Dollar strength and euro weakness has increased inflation, made worse by the central bank's continuing stimulus programs.

Big U.S. Banks Get a Little Taste of the 'Doom Loop'
Paul J Davies (Bloomberg Opinion) Apr 20, 2022
Deepening bond losses cut into capital ratios, which put cash payouts to investors at risk.

We Need a Carbon Market to Boost Green Energy Startups
Anne M Finucane (Bloomberg Opinion) Apr 20, 2022
Awarding carbon credits for investment would unleash billions of corporate dollars to speed development of new technologies for a cleaner world.

How Biden Can Use Inflation to His Advantage
Karl W Smith (Bloomberg Opinion) Apr 20, 2022
The president and his party have a window of opportunity while the economy is growing and interest rates are still low.

The Dollar System Is China's Hotel California
Matthew Brooker (Bloomberg Opinion) Apr 20, 2022
Beijing checked out long ago. It just can't leave.

Mariana Mazzucato and Alan Donnelly (Project Syndicate) Apr 20, 2022
This month, G20 finance ministers and central bank governors will be discussing a new financing vehicle to help all countries develop the capacity to stop future health emergencies before they get out of hand. But success ultimately will depend on whether they can embrace new governance principles and methods.

This Inflation Is Demand-Driven and Persistent
Jason Furman (Project Syndicate) Apr 20, 2022
Although inflation has risen sharply for multiple reasons, increased demand is by far the most important factor. The common argument about strangled ports, microchip shortages, and other supply-side issues simply cannot explain why advanced economies grew so briskly in 2021.

Russia's invasion of Ukraine has raised Germans' inflation expectations
Geghetsik Afunts, Misina Cato, Susanne Helmschrott, and Tobias Schmidt (VoxEU) Apr 20, 2022
Russia's invasion of Ukraine will likely pose new challenges to the global economic recovery by affecting energy prices and inflation rates. This column uses a quasi-experimental analysis to document the impact on inflation expectations of consumers in Germany. The authors find that both short-term and long-term inflation expectations increased as an immediate result of the invasion. This increase can partially be attributed to consumers' fear of soaring energy prices.

The UK growth problem will not fix itself
FT View Apr 21, 2022
It will take political pain to get the economy moving again.

Inflation rears its head in central and eastern Europe
Tony Barber (FT) Apr 21, 2022
Governments need to manage public finances prudently even as central banks raise interest rates.

Beware the rich persons' savings glut
Gillian Tett (FT) Apr 21, 2022
Since the 1990s, the private share of national wealth has soared while public wealth has shrunk.

Will the Mighty Dollar Prevent a Soft Landing From Inflation?
Joseph C. Sternberg (WSJ) Apr 21, 2022
Managing U.S. demand is only part of the Fed's challenge. Currency swings are the other problem.

US recession risk casting shade on Asia
William Pesek (AT) Apr 21, 2022
The great US recession debate is heating up as Goldman Sachs Group assigns 35% odds to an American economic downturn over the next two years. Yet what if Wall Street's most influential investment banks are underplaying risks to the world's biggest economy? To be sure, a US recession would darken Asia's outlook considerably.

Global Trade Is Battling Demand and Price Shocks
Ana Boata, Françoise Huang, and Ano Kuhanathan (BRINK) Apr 21, 2022
Russia's invasion of Ukraine and new outbreaks of COVID-19 in China will affect global trade this year by lowering volumes and raising prices.

A new aggregate measure of human capital: Linking education policies to productivity through PISA and PIAAC scores
Balázs Égert, Christine de la Maisonneuve and David Turner (OECD Ecoscope) Apr 21, 2022
Improving aggregate measures of human capital is important given the central role that education, training and skills play as a driver of economic performance.

The Second Wave of the Russian Oil Shock Is Starting
Javier Blas (Bloomberg Opinion) Apr 21, 2022
Declining crude output identified by satellite imagery heralds a longer-lasting increase in oil prices.

Inflation's Silver Lining for Housing and Offices
Conor Sen (Bloomberg Opinion) Apr 21, 2022
Rising prices will help some real estate markets avert a much worse potential outcome in a post-pandemic world.

Exploring the hidden price effect in China's official GDP estimates
Harry X. Wu and Zhan Li (VoxEU) Apr 21, 2022
Observers of the Chinese economy have long argued that the country's practices in price statistics are the major barrier to more reliable measurement of its real growth performance. This column proposes a national accounts approach to address some of the biases behind the gap between the underlying real growth rate and the 'real growth rate' reported by the statistical authorities. Compared to the official estimates, the authors' method not only exposes more volatile movements and greater impacts of external shocks, but also slower growth.

The Next Pandemic Doesn't Have to Hit So Hard
Janet Yellen, Tedros Adhanom Ghebreyesus, and Sri Mulyani Indrawati (FP) Apr 21, 2022
Investing in global health security can provide critical insurance against disaster.

Bank of England's remit needs a fundamental rethink
Gerard Lyons (FT) Apr 22, 2022
After major errors, future monetary policy should be made fit for purpose by targeting nominal GDP.

Fed fallout spreads as shift to raise US rates starts to jolt markets
Katie Martin (FT) Apr 22, 2022
The path back to tighter monetary policy is unavoidably messy.

How a Recession Might — and Might Not — Happen
Paul Krugman (NYT) Apr 22, 2022
Goldilocks and the macroeconomic bears.

Learning to Believe the Fed
WSJ View Apr 22, 2022
Market ructions point to Jerome Powell's credibility challenge.

The World Is in Crisis, and That's Good for the Economy
Shirley Yu (WSJ) Apr 22, 2022
The new cold war, like the original, will drive a new wave of technological innovation and growth.

Where the Fed went wrong on inflation
Sebastian Mallaby (WaPo) Apr 22, 2022
The central bank has messed up. A forgivable error was followed by a really serious one.

Inflation, Quick and Dirty
Jeff Deist (Mises Wire) Apr 22, 2022
Propping up congressional deficit spending, juicing equity markets, and constantly recapitalizing commercial banks are the Fed's true mandates.

War in Ukraine is Serious Setback to Europe's Economic Recovery
Alfred Kammer (IMF) Apr 22, 2022
Ukraine and Russia face the sharpest economic contractions, but other countries could also fall into recession this year.

Desperately Seeking a Mechanism for Sovereign Debt Restructuring
Anne O. Krueger (Project Syndicate) Apr 22, 2022
Past experience has shown that sovereign debt restructuring needs to be accompanied by reform programs to ensure future economic performance and debt sustainability. But in today's world, the emergence of new and more varied creditors has made the process more difficult, pointing to the need for a new global facility.

Public-Private Decarbonization
Laura Tyson and Daniel Weiss (Project Syndicate) Apr 22, 2022
To keep global warming within 1.5°C, trillions of dollars more will need to be invested in clean energy production and infrastructure every year from now until 2050. While most of that will have to come from the private sector, governments must act as the seed funders and market makers.

The Growth Engines Are Sputtering
Mohamed A. El-Erian (Project Syndicate) Apr 22, 2022
The International Monetary Fund's significant downward revision to its 2022 World Economic Outlook, just one quarter into the calendar year, has generated headlines and hand-wringing around the world. But no less important is the dour forecast for 2023, which implies a broader crisis of prevailing growth models.

Regulating the Crypto Wild West
Raghuram G. Rajan (Project Syndicate) Apr 22, 2022
The explosive growth of cryptocurrencies and digital assets has left financial authorities scrambling to understand what is going on. But though this burgeoning sector is known for its frontier spirit and commitment to innovation, plenty of the risks it poses should already be familiar to regulators.

The economic cost of trade restrictions on Russia
François Langot, Franck Malherbet, Riccardo Norbiato, and Fabien Tripier (VoxEU) Apr 22, 2022
Following the invasion of Ukraine, the EU and the international community imposed financial sanctions and trade restrictions on Russia. This column analyses the costs for Russia and the EU of further trade restrictions with varying intensity. It shows that an embargo only by the EU would cost Russia three times as much as it would cost the EU. However, if an embargo were imposed by the EU and other countries 'unfriendly' to Russia, the relative cost would be 13 times higher for Russia. The adage that there is strength in unity has never been more relevant.

Designing an effective border carbon adjustment mechanism
Goran Dominioni and Dan Esty (VoxEU) Apr 22, 2022
The EU and the US are considering proposals for border carbon adjustment mechanisms to curtail the risk of carbon leakage. This column argues that these mechanisms can better mitigate climate change and more likely comply with WTO law when designed to account for effective carbon prices in exporting countries instead of focusing on explicit carbon prices alone. While there are administrative challenges to crediting effective carbon prices, existing trade accounting methods (notably from anti-dumping and countervailing duty subsidy cases) provide ample experience and know-how to overcome these difficulties.

A European Debt Agency could create a safe asset without debt mutualisation
Massimo Amato, Everardo Belloni, Carlo Favero, Lucio Gobbi, and Francesco Saraceno (VoxEU) Apr 22, 2022
A European Debt Agency could greatly help in implementing a new fiscal policy strategy in Europe. This column identifies fluctuations in bond prices over the past 20 years that such an agency could have prevented, and argues that the agency could absorb the entire euro area debt while reducing its size due to less volatile price dynamics. A European Debt Agency could be used to hedge member states' financing from market sentiment vagaries, create a European safe asset, relieve the ECB of burden of debt management, and manage the implementation of fiscal rules efficiently.

Steering Toward Sustainable Growth
Mary C. Daly (FRBSF Econ Letter) Apr 22, 2022
The inflation outlook combined with a strong labor market leave no doubt that further monetary policy tightening is appropriate. The question is, how much and how quickly? The appropriate path of policy confronts the economic headwinds immediately ahead while also laying the groundwork for the economy we want in the future.

Why the Federal Reserve has made a historic mistake on inflation
Economist Apr 23, 2022
What comes next will set the path for the world economy.

What an end to quantitative easing means for Italian debt
Economist Apr 23, 2022
Investors will begin to follow Italy's politics again

The flood of Russian sanctions has left banks in need of help
Justine Walker (FT) Apr 24, 2022
We must acknowledge the heavy lifting in the financial sector required to make the price of war unacceptably high.

Years of policy failure and COVID throw Sri Lanka into deep crisis
Chulanee Attanayake (EAF) Apr 24, 2022
What the Sri Lankan economy needs is breathing space: for reforms to take shape, and for their results to solidify.

Political storm clouds gather over Pakistan
Shuja Nawaz (EAF) Apr 24, 2022
If the new government manages to keep its head above the choppy economic waters, it faces many domestic political issues.

The Coming Russian Struggle for New Markets for Its Oil
Julian Lee (Bloomberg Opinion) Apr 24, 2022
Diverting crude from Europe to Asia will need big discounts and a lot more ships

The Fed Is Losing Control Over the Inflation Narrative
Lisa Abramowicz (Bloomberg Opinion) Apr 24, 2022
Despite the central bank's more hawkish rhetoric, the bond market is pricing in a faster pace of consumer-price gains in the years ahead.

Which Comes First: Inflation or Political Instability?
Stephen Mihm (Bloomberg Opinion) Apr 24, 2022
In the post-World War II era, the effects of spiraling prices have varied greatly, depending on the quality of a country's institutions.

The threat of a global 'buying strike' rises as cost-of-living hits
Rana Foroohar (FT) Apr 25, 2022
History shows that consumers cutting back on discretionary spending pose a serious risk for markets.

Italy can deal with higher interest rates
Moritz Kraemer (FT) Apr 25, 2022
ECB should not let worries over country's debt stand in way of greater monetary policy action against inflation.

Central bankers agree: the dollar's still the top dog
Claire Jones (FT) May 25, 2022
The greenback remains unchallenged as the currency of choice for monetary officialdom.

Covid Lockdowns Revive the Ghosts of a Planned Economy
Li Yuan (NYT) Apr 25, 2022
China is meddling with free enterprise as it hadn't in decades. The results are familiar to those old enough to remember: scarcity, and the rise of black markets.

China's easing won't solve its many problems
David P Goldman (AT) Apr 25, 2022
China's RMB has fallen sharply, from a late February exchange rate of 6.31 to the US dollar to 6.53 on April 22, as the People's Bank of China (PBOC) reduced its benchmark short-term rate from about 2.1% to 1.5%. The rate for 7-day repurchase agreements (short-term loans against banks' securities holdings) is now at the lowest level since the 2008-9 world recession.

Asia Growth Slows on Commodities, Covid and Rising Interest Rates
Anne-Marie Gulde-Wolf, Sanjaya Panth, and Shanaka J. Peiris (IMF) Apr 25, 2022
Region's policymakers face difficult policy trade-offs and should protect the most vulnerable from rising fuel and food costs while enacting economic reforms to boost long-term growth.

Has the pandemic fundamentally changed reserve management? Insights from 119 central banks
Carmen Herrero, Philip Dongsoo Hong, Daniela Klingebiel, Robert Lucas, and Marco Ruiz (WB) Apr 25, 2022
Reserve management will likely witness lasting lessons from the pandemic for years to come.

China's recent trade moves create outsize problems for everyone else
Chad P. Bown and Yilin Wang (PIIE) Apr 25, 2022
Policy reversals on fertilizer, steel, and pork are only the latest examples.

How Long Can China's Economy Handle Zero COVID?
David Dollar (BRINK) Apr 25, 2022
Chinese President Xi Jinping's zero tolerance toward COVID has locked down an estimated 87 of the largest cities in China, as a new surge sweeps the nation.

Commodity Traders Can't Hide in the Dark Anymore
Javier Blas (Bloomberg Opinion) Apr 25, 2022
A new era of regulation is coming for the "opaque" and "unregulated" commodity-trading industry.

Downside Risks to Global Growth
Stephen S. Roach (Project Syndicate) Apr 25, 2022
In keeping with the perma-optimism deeply embedded in financial markets, the latest World Economic Outlook calls for a perfect soft landing in the $96 trillion global economy. There are at least three large reasons to be skeptical.

The Gathering Stagflationary Storm
Nouriel Roubini (Project Syndicate) Apr 25, 2022
While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy's only problems. Even without them, the medium-term outlook would be darkening, owing to a broad range of economic, political, environmental, and demographic trends.

Bank lending and exchange rate shocks
Thorsten Beck, Peter Bednarek, Daniel te Kaat, and Natalja von Westernhagen (VoxEU) Apr 25, 2022
Standard economic models typically ignore the role of the financial system in transmitting exchange rate changes to the real economy. This column uses German data to show that large banks with high net foreign currency asset exposure increase lending to export-intensive firms and – through interbank markets – to small banks without foreign currency asset exposure but with a high share of exporting firms in their portfolio. Regions with such small banks experience higher output growth following the depreciation. It demonstrates the importance of banks' balance sheet structures and interbank markets when assessing the real effects of exchange rate shocks.

Japan Finally Gets Inflation—but the Wrong Kind
William Sposato (FP) Apr 25, 2022
After decades of fighting deflation, global price rises are causing political worries.

War in Ukraine is causing a many-sided economic shock
Martin Wolf (FT) Apr 26, 2022
The conflict is a multiplier of disruption in an already disrupted world.

Energy companies are learning the lessons of the banking crisis
Cat Rutter Pooley (FT) Apr 26, 2022
Last suppliers standing will have to pay penance for the sins of those that behaved less responsibly.

Freefalling yen a soaring global risk
William Pesek (AT) Apr 26, 2022
Could the Japanese yen's 12% decline this year be an even bigger threat to global markets than inflation, Federal Reserve tightening and war in Ukraine? No one is laughing at the yen's sudden about-face and the risk of the third-most-traded currency plummeting further from the grasp of Tokyo officials notorious for micromanaging exchange rates.

Latin America Faces Unusually High Risks
Santiago Acosta-Ormaechea, Ilan Goldfajn and Jorge Roldos (IMF) Apr 26, 2022
The War in Ukraine, higher inflation, tighter financial conditions, economic decelerations of key trading partners, and social discontent may dim growth prospects.

The Other Oil Crisis Will Lead to a Hungrier World
David Fickling (Bloomberg Opinion) Apr 26, 2022
Indonesia's palm plantations produce a critical supply of edible fats to large populations in India and beyond. A policy-induced shortage will have dire consequences.

Crypto Advocates Should Be Begging for Regulation
William C Dudley (Bloomberg Opinion) Apr 26, 2022
The longer oversight is delayed, the greater the chance it won't be very innovation-friendly.

Euro Banks Are About to Confront a New Kind of Rate Risk
Paul J Davies (Bloomberg Opinion) Apr 26, 2022
Higher interest rates will boost income for lenders but will curb loan demand and cause delinquent payments to rise.

The Silver Lining of China's Iron Grip on the Yuan
Daniel Moss (Bloomberg Opinion) Apr 26, 2022
A softer currency could help offset an economic slowdown. That's an outcome the world should welcome.

The Growing Threat of Global Recession
Kenneth Rogoff (Project Syndicate) Apr 26, 2022
With luck, the risk of a synchronized global downturn will recede by late 2022. But for the moment, the odds of recession in Europe, the United States, and China are significant and increasing, and a collapse in one region will raise the odds of collapse in the others.

Can the U.S. Avoid a Recession?
K@W Apr 26, 2022
Many economists are warning of a recession, while Wall Street bulls are saying those fears are overblown. Wharton experts weigh in on what's ahead for the U.S. economy

Trade's resilience to COVID-19
Maria Bas and Ana Fernandes (VoxEU) Apr 26, 2022
The war in Ukraine has dramatically revealed the vulnerabilities of relying heavily on single foreign suppliers, following on from the COVID shock's disruption of global value chains. This column presents evidence confirming the costly export shock for products with higher reliance on foreign inputs, and on China as the main input supplier, during the pandemic. In particular, the difficulties in producing remotely highlighted the vulnerability for products with a lower degree of complexity that rely on unskilled labour. Future resilience requires smart diversification and exploitation of working-from-home production.

International Economic Outlook: April 2022
Nick Bennenbroek, Brendan McKenna, and Jessica Guo (WF Econ Group) Apr 26, 2022
Monetary policy trends and inflationary pressures remain a key theme dominating the global economic outlook. In April, policymakers around the world turned more hawkish in an effort to combat rising price growth. We now believe the Fed will raise interest rates by 50 bps in May as well as June, while we have also turned more hawkish on the outlook for many foreign central banks. We continue to forecast U.S. dollar strength against the G10 and emerging market currencies. In the G10, we believe financial markets are priced too aggressively for monetary tightening abroad, and as markets adjust to a more conservative pace of tightening, the U.S. dollar should benefit. Tighter Fed policy and higher U.S. Treasury yields should divert capital away from the emerging markets and toward the United States. We believe these dynamics can contribute to weaker emerging market currencies in 2022 as well as in 2023. China's economy is under pressure amid authorities' commitment to the Zero-COVID approach to virus containment. Authorities have locked down large swaths of the economy, complicating Chinese, and broader global growth, prospects. Capital outflows have begun, which coupled with PBoC officials accommodating renminbi weakness and diverging PBoC-Fed monetary policy trends, have seen the renminbi sell off sharply. Going forward, we expect these dynamics to continue and the renminbi to continue to trend weaker against the dollar. Softer growth in China will contribute to slower overall GDP growth, and now that we have more transparency into Russia's economy, the looming contraction in Russia's economy will be severe and also weigh on global growth. We have revised our global GDP growth forecast sharply lower, and now expect the global economy to grow at trend-like rates this year. Slower global growth and a more uncertain economic outlook in China is likely, in our view, to be another contributor to emerging market currency depreciation.

The Marshall Plan is no longer niche history
Gillian Tett (FT) Apr 27, 2022
Ukraine experts are eyeing 1948's postwar reconstruction programme as they chart a road map beyond the conflict.

The populist strongmen who are strangely keen on globalisation
Alan Beattie (FT) Apr 27, 2022
Emmanuel Macron's re-election doesn't prove very much about the future of open trade.

Tax Increases Won't Cure Inflation
WSJ View Apr 27, 2022
Another bright idea from the folks who brought you Modern Monetary Theory.

Demographics push China-India-Russia triple entente
Spengler (AT) Apr 27, 2022
US foreign policy has pushed China, India and Russia into the same strategic corner: America's humiliating abandonment of Afghanistan and its failure to defuse the Ukraine crisis has left three Asian powers with an intractable mess to clean up. For New Delhi, the price of American friendship is to carry baggage that might explode in the not-too-distant future.

The UK and the global economy after Brexit
Adam S. Posen (PIIE) Apr 27, 2022
Brexit has reduced UK trade openness, foreign direct investment (FDI) inflows, and immigration growth. New border frictions and higher transport costs pose new barriers to trade, and FDI inflows are unlikely to return to levels reached in the 1990s and 2000s.

The Hong Kong Dollar's Peg Has Become Untenable
Richard Cookson (Bloomberg Opinion) Apr 27, 2022
Pressure on government officials to break the currency's link to the U.S. dollar, already at an extreme, is only getting worse.

Britain Faces a Trilemma of High Inflation, Slowing Growth and Rising Taxes
Marcus Ashworth (Bloomberg Opinion) Apr 27, 2022
The U.K. economy faces a triple whammy of high inflation, slowing growth and rising taxes. The central bank needs to tread warily.

Pandemic Economy Is Writing a New Labor Market Playbook
Conor Sen (Bloomberg Opinion) Apr 27, 2022
Worker shortages have made companies realize mass layoffs shouldn't be the automatic response to every recession.

Energy's Future Is Both Cleaner and Dirtier
Tyler Cowen (Bloomberg Opinion) Apr 27, 2022
The same forces that are driving innovation in green energy are making the production of fossil fuels more efficient.

The Failed Bet on Russian and Chinese Reform
Michael J. Boskin (Project Syndicate) Apr 27, 2022
Russia and China shattered the belief that economic liberalization leads inevitably to greater political freedom. Maybe a new generation of reformers will show that history really does culminate in democratic capitalism, but from now on Western leaders should proceed with a healthy dose of skepticism toward grand narratives.

America Has Stopped Playing by the Monetary Rules
Yu Yongding (Project Syndicate) Apr 27, 2022
The international financial and monetary system ultimately operates on trust, with all participants assuming that others will play by the rules. By unilaterally freezing Russia's foreign-exchange reserves, the United States has powerfully undermined its own credibility, not least in China.

Time to start afresh on reviving UK markets
William Wright (FT) Apr 28, 2022
The City of London needs to be reconnected with the wider economy and with society.

The U.S. Wants to Tackle Inflation. Here's Why That Should Worry the Rest of the World.
Jamie Martin (NYT) Apr 28, 2022
Raising interest rates here could lead to a lot of misery elsewhere.

Rumors of Stagflation in First Quarter GDP
WSJ View Apr 28, 2022
The economy surprises economists by shrinking 1.4%, which should kill a tax increase.

If We Get a Recession in 2022 or 2023, It'll Be a Mild One
Alan S. Blinder (WSJ) Apr 28, 2022
In the 1970s, 'stagflation' caught policy makers by surprise. Their successors have learned the lesson.

Yuan weak today but strong tomorrow
William Pesek (AT) Apr 28, 2022
The yuan's sudden decline is knocking the world of foreign exchange off balance. The big question is – is it just a blip in China's post-2020 appreciation cycle or a new trend signaling a steady depreciation? The odds are, it's a blip. Even so, the near-term risks to Beijing's exchange rate trajectory are shifting toward the downside as 2022 unfolds.

Why the Yen Fell While the Dollar Rallied
Brendan Brown (Mises Wire) Apr 28, 2022
Will Japan ever change course on its negative interest rates? Only if voters begin to realize that the lack of inflation to date in Japan is simply good luck.

Central banks can tighten by doing nothing
Neil Williams (OMFIF) Apr 28, 2022
By debating the size of their balance sheets, central banks are showing the first sign since Covid-19 – and for only the second time since the 2008 financial crisis – that they may be worrying about excessively loose policy and the growing addiction to quantitative easing. To take some of the heavy lifting away from rate rises, quantitative tightening offers a useful, extra lever to pull. Passive QT could be the gentlest way of tightening – in effect, by doing nothing.

Africa Faces New Shock as War Raises Food and Fuel Costs
Abebe Aemro Selassie and Peter Kovacs (IMF) Apr 28, 2022
The effects of the war in Ukraine leave policymakers with little room to maneuver.

More Infrastructure Stimulus Is the Last Thing China Needs
David Fickling (Bloomberg Opinion) Apr 28, 2022
Spending more on the likes of cement and high-speed rail lines won't get capital to where it's needed to sustain real growth.

Dismal GDP Report Raises the Odds of a Recession This Year
Gary Shilling (Bloomberg Opinion) Apr 28, 2022
Bloated inventories held the economy back in the first quarter and will take many months and discounting to shrink.

Insolvent Sri Lanka Should Cancel Its Central Bank
Andy Mukherjee (Bloomberg Opinion) Apr 28, 2022
A currency board may be a better fit for the country as it navigates a perilous financial future.

The BOJ Doubles Down on a Weakening Yen
Daniel Moss and Gearoid Reidy (Bloomberg Opinion) Apr 28, 2022
The central bank is vigorously defending the era of ultra-cheap money, just as the Fed prepares to raise rates more aggressively.

The IMF Has Finally Dumped a Damaging Orthodoxy
Natalie Leonard (Bloomberg Opinion) Apr 28, 2022
It's official: Foreign money isn't always and only good for developing nations.

Will Western Sanctions Change the Global Financial System?
Howard Davies (Project Syndicate) Apr 28, 2022
Western countries' increased use of financial sanctions as a weapon of war has created a new incentive for China and other countries to explore ways to minimize the future impact of similar measures against them. The longer-term consequences for the global financial system could be far-reaching.

How to Get by Without Russian Gas
Andrés Velasco and Marcelo Tokman (Project Syndicate) Apr 28, 2022
In 2007, Chile was as dependent on imported natural gas from Argentina as Germany is today on natural gas from Russia. But in the face of a sudden supply shock, the Chilean government was able to mitigate the economic damage and lay the foundation for the country's shift to renewables.

A new aggregate measure of human capital: Linking education policies to productivity
Balázs Égert, Christine de La Maisonneuve, and David Turner (VoxEU) Apr 28, 2022
Investing in education and human capital is an important ingredient for economic growth. This column constructs a new aggregate stock measure of human capital data using OECD data on adult skills, quality of education, and mean years of schooling. The relative weights of quality and quantity are estimated rather than imposed, as they are in the existing literature. Improvements in human capital are estimated to boost productivity significantly, but only with long lags. Furthermore, simulating the impact of pre-primary education on human capital and productivity demonstrates the usefulness of the new measure for policy analysis.

How the Rajapaksas Destroyed Sri Lanka's Economy
Amita Arudpragasam (FP) Apr 28, 2022
Crony capitalism, protectionism, and corruption have caused havoc—uniting various ethnic groups, including Sinhalese Buddhists, in protest against the regime.

Palestinians Feel Economic Pain From the War in Ukraine
Robbie Gramer and Christina Lu (FP) Apr 28, 2022
A food crisis looms as the price of wheat and other staples surges.

Europe no longer trusts Moscow's energy brand
Daniel Yergin (FT) Apr 29, 2022
The EU faces hard but necessary choices if it is to end its reliance on Russian gas imports.

Tankers of Russian oil a prime target for western sanctions
Gillian Tett (FT) Apr 29, 2022
There is a potent measure available for leaders in the bid to squeeze Moscow financially.

Indian private markets brace for correction
Henny Sender (FT) Apr 29, 2022
Tighter financial conditions will challenge the flurry of new unicorns in the country.

The Courage Required to Confront Inflation
NYT View Apr 29, 2022
Inflation is the nation's primary economic problem. The Federal Reserve still needs to move cautiously as it begins to raise interest rates.

Growth Slows to a Crawl as War and Covid Grip the Biggest Economies
Patricia Cohen (NYT) Apr 29, 2022
Europe's growth in the first three months of the year was languid as the United States and China struggled to maintain momentum.

The Inflation Tax Bites Workers
WSJ View Apr 29, 2022
Private pay and benefits are booming, but they can't keep up with prices.

Germany's Tax-Cut Inflation Cure
WSJ View Apr 29, 2022
Democrats, take note: Berlin is cutting energy levies as prices rise.

How Russia's grim demographics could thwart Putin's global ambitions
Nicholas Eberstadt (WaPo) Apr 29, 2022
Russia has somehow managed to create a high-education, low-human-capital society. The syndrome was evident under the Soviets, but it is even more acute under Putin's malign rule.

As covid evolves, China's obstinance grows — at huge economic cost
David Von Drehle (WaPo) Apr 29, 2022
China's draconian "zero covid" goals are hugely misguided and could have far-reaching economic consequences.

Inflation Is Soaring. So Where's My Pay Raise?
Chris Bryant (Bloomberg Opinion) Apr 29, 2022
Workers, not companies, bear the brunt of inflation. Indexation is the great new economic divide.

Coordinating in the Dark on Inflation
Kaushik Basu (Project Syndicate) Apr 29, 2022
The fine-tuned management of surging inflation that is currently being attempted is an area where economics is at its weakest. Better global coordination of monetary policy is essential – and, as the world's largest economy, the United States will need to assume a disproportionate amount of responsibility for this effort.

The International Monetary System Is More Unfit than Ever
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 29, 2022
After World War II, the world was promised a neutral international monetary system secured by a stable reserve currency issued by a global hegemon. But, with the US dollar being weaponized through sanctions against Russia and others, it is clear that the current system is far from neutral – or sustainable.

Life or Debt in Ukraine
Maurice Obstfeld , Anna Gelpern, Yuriy Gorodnichenko, and Sean Hagan (Project Syndicate) Apr 29, 2022
Given Ukraine's current debt burden and foreseeable financing needs, its official creditors should take the lead in deferring repayments and laying the groundwork for a debt-restructuring deal. Remaining in financial markets' good graces is the last thing the Ukrainian government should have to think about right now.

Goods inflation is likely transitory, but upside risks to longer-term inflation remain
Yunjong Eo, Luis Uzeda, and Benjamin Wong (VoxEU) Apr 29, 2022
Supply chain disruptions and labour shortages coupled with demand-side pressures have seen goods inflation soaring since early 2021. This column shows that while goods inflation used to contribute to permanently higher headline inflation, such as during the Great Inflation of the 1970s, since the early 1990s it has become predominantly transitory. The current high goods inflation can therefore be expected to be somewhat short-lived. Nonetheless, the authors document that the upside risks to longer-term aggregate and sector-specific inflation remain greater than usual.

Emerging Risks Could Submerge Global Growth
Brendan McKenna (WF Econ Group) Apr 29, 2022
In our April International Economic Outlook, we highlighted how China's commitment to its "Zero-COVID policy is a key theme as well as a major risk to the 2022 global economic outlook. Lockdowns, in our view, make China's official GDP target of 5.5% unreachable, and we forecast China's economy to grow 4.5% this year. However, risks around that forecast are tilted to the downside, which in turn, tilts global growth prospects to the downside as well. Given China's stature within the global economy, negative local developments tend to cause ripple effects across the emerging markets. In this report, we update our China Sensitivity Analysis and determine that most of the larger and systemically important emerging economies are sensitive to developments in China. Should China's economy decelerate more than we currently forecast and contagion risks materialize the way our framework suggests, this year could mark the slowest pace of global expansion since the aftermath of the Global Financial Crisis in 2009.

The Fed's balance sheet is normal and political
Brendan Greeley (FT) Apr 30, 2022
Central bank choices will always help some people more than others.

Stress emerges again in Treasuries market
John Dizard (FT) Apr 30, 2022
Unusual rise in failed trades in one week in April points to strains in the financial system.

Why Everyone Is So Mad About the Economy
Annie Lowrey (Atlantic) Apr 30, 2022
Nobody escapes inflation.