News & Commentary:

Articles/Commentary

Europe is moving ever closer to Britain
Vernon Bogdanor (FT) May 1, 2016
If the UK stays it may be joined in an outer circle by other EU states.

Fiscal and monetary policy can be uneasy bedfellows
Shahin Vallée (FT) May 1, 2016
Quantitative easing and negative rates offer rapidly diminishing returns.

Britain flirts with economic insanity
Robert J. Samuelson (WP) May 1, 2016
Leaving the European Union would be a bad idea all around.

Asia’s next growth frontier
Peter Drysdale (EAF) May 1, 2016
Realising Asia’s growth potential depends on mobilising the will in Asian polities to undertake the next round of reforms that are essential to lifting productivity and accelerating the structural change that will deliver it.

The Fusion of Civilizations
Kishore Mahbubani and Lawrence H. Summers (FA) May 1, 2016
The case for global optimism.

The Clean Energy Revolution
Varun Sivaram and Teryn Norris (FA) May 1, 2016
Fighting climate change with innovation.

The Refugee Crisis Is Humanity's Crisis
Brad Evans and Zygmunt Bauman (NYT) May 2, 2016
Refugees have been stripped of their humanity, insofar as it is supposed to grant "inalienable" rights they are denied.

The Diabetic Economy
Paul Krugman (NYT) May 2, 2016
Chronic weakness in Europe and what it means.

Ending America’s Slow-Growth Tailspin
John H. Cochrane (WSJ) May 2, 2016
The U.S. economy needs a dramatic legal and regulatory simplification.

How Brexit Could Help All of Europe
Ferghane Azihari (Mises Daily) May 2, 2016
Brexit could open new perspectives for the old continent, not by bringing more protectionism but by bringing more competition between governments.

Britain Can't Afford to Quit the EU
Bloomberg View May 2, 2016
Studies say leaving the EU would badly hurt the U.K. economy.

Why Currency Markets Seem Erratic
Mohamed Aly El-Erian (Bloomberg View) May 2, 2016
Exchange rates no longer seem to respond "normally" to interest-rate differentials among central banks.

European exchange landscape: too fragmented
Jan Schildbach and Martin Waibel (DB Research) May 2, 2016
In September 2015, the European Commission set out its action plan to establish a Capital Markets Union in order to push for stronger and more integrated capital markets in the EU to better complement bank finance. Creating deeper and more liquid stock markets is crucial in this respect, and also a precondition for European financial centres to regain their position in a global context. Indeed, the total number of stock exchanges operating independently in the EU is astonishingly high, especially in eastern and south-eastern European countries. In addition, market capitalisation is highly concentrated in only a handful of exchanges, and in smaller markets also tends to be lower relative to economic size.

The Global Growth Funk
Nouriel Roubini (Project Syndicate) May 2, 2016
The IMF and others have recently revised downward their forecasts for the global economy – yet again. Little wonder: The world economy has few bright spots, with both actual and potential output growth declining in advanced and emerging economies alike.

Central Bankers Gone Wild?
Mojmír Hampl (Project Syndicate) May 2, 2016
Sweeping criticisms of developed-country central banks are all the rage, with observers claiming that, since 2008, central banks have been far too activist, overstepping their mandates and damaging the economy. This narrative is patently wrong, and it is time for monetary policymakers to say "enough" and set the record straight.

Ripples of risk
Dennis Bams, Magdalena Pisa and Christian C. P. Wolff (VoxEU) May 2, 2016
In the absence of full information about small businesses’ risk of loan default, banks are unable to accurately calculate counterparty risk. This column suggests that banks can use industry and linked-industry data to better establish counterparty risk, because distress from one industry is transmitted to supplier and customer industries. A reliable and easily available signal for such distress is any failure reported by S&P. In the absence of full information about small businesses’ risk of loan default, banks are unable to accurately calculate counterparty risk. This column suggests that banks can use industry and linked-industry data to better establish counterparty risk, because distress from one industry is transmitted to supplier and customer industries. A reliable and easily available signal for such distress is any failure reported by S&P.

Business cycle synchronisation and the Bretton Woods nostalgia
Eric Monnet, Damien Puy (VoxEU) May 2, 2016
Business cycles are generally viewed as having been less correlated during the Bretton Woods period, 1950-1971. This column discusses findings from a new database of quarterly industrial production for 21 countries from 1950 to 2014 based on IMF archival data. As it turns out, business cycle synchronisation was as strong before 1971 as it was after (up till the Global Crisis began in 2007). Moreover, deeper financial integration tends to de-synchronise national outputs from the world cycle, at least in non-crisis periods. Business cycles are generally viewed as having been less correlated during the Bretton Woods period, 1950-1971. This column discusses findings from a new database of quarterly industrial production for 21 countries from 1950 to 2014 based on IMF archival data. As it turns out, business cycle synchronisation was as strong before 1971 as it was after (up till the Global Crisis began in 2007). Moreover, deeper financial integration tends to de-synchronise national outputs from the world cycle, at least in non-crisis periods.

A vote to leave the EU will make Britain poorer
FT View May 3, 2016
Weighing up the economic case on Brexit.

We are completely unprepared for the robot revolution
Martin Ford (FT) May 3, 2016
The cognitive capability that sets humans apart as a species is being encroached upon by machine learning.

Weakening Growth in Sub-Saharan Africa Calls for Policy Reset
IMF Survey May 3, 2016
After a prolonged period of strong economic growth, sub-Saharan Africa is set to experience a second difficult year as the region is hit by multiple shocks, the IMF said in its latest Regional Economic Outlook for Sub-Saharan Africa.

Asia: Growth Remains Strong, Expected to Ease Only Modestly
IMF Survey May 3, 2016
Growth in Asia and the Pacific is expected to remain strong at 5.3 percent this year and next, accounting for almost two-thirds of global growth.

A tentative upturn in the eurozone economy
FT View May 3, 2016
Given huge disparities in the bloc, this is no time for more austerity.

Rise of the robots is sparking an investment boom
Richard Waters and Tim Bradshaw (FT) May 3, 2016
Global influx of machines set to open hot new tech market.

Brexit: sovereignty is not the same as power
Martin Wolf (FT) May 3, 2016
The very fact that the UK is holding a vote on membership of the EU shows that it is sovereign.

China’s recovery: not solid
David Wilder (FT) May 3, 2016
Survey findings underline fragility of credit-fuelled uptick.

A nightmarish reprise of the financial crisis for European banks
Patrick Jenkins (FT) May 3, 2016
The flow of poor data from the continent’s biggest lenders is far from over.

Populist Policies Let Brazil’s Tomorrow Slip Away
Eduardo Porter (NYT) May 3, 2016
The soaring hopes fed by a subsidized, state-directed, commodity-fueled economy have lately come crashing back to earth.

China’s Commodities Bubble
WSJ May 3, 2016
The debt-fueled buying frenzy has global consequences.

Faulty Political Narratives
Ricardo Hausmann (Project Syndicate) May 3, 2016
Across Latin America, voters who, until recently, were enthusiastic about their leftist governments seem to be having a change of heart. But if voters are now jettisoning the left and its supposedly “pro-people” policies, it is not because they now prefer the “class enemy.”

Reinventing Europe
Joschka Fischer (Project Syndicate) May 3, 2016
Of all the crises facing the EU, the most dangerous may be the crisis of trust that has taken root in many of its member states. Without a renewed vision for Europe, the nationalist forces that have taken advantage of the vacuum of political courage will grow in strength and endanger the European project.

A Possible Cure for Japan's Low Inflation
Narayana Kocherlakota (Bloomberg View) May 3, 2016
To achieve its goals, the central bank may have to aim higher.

A Vote to Stay in the EU Isn't a Vote for Europe
Clive Crook (Bloomberg View) May 3, 2016
Remaining in the EU will only make Britons hate it more.

Emerging Markets Should Go for the Gold
Kenneth Rogoff (Project Syndicate) May 3, 2016
For some time, rich countries have argued that it is in everyone’s collective interest to demonetize gold. But there is a good case to be made that a shift in emerging markets toward accumulating gold would help the international financial system function more smoothly and benefit everyone.

Measuring the Value of Free
Charles Bean (Project Syndicate) May 3, 2016
Reliable economic statistics are essential to effective policymaking, business planning, and the electorate’s ability to hold decision-makers to account. And yet, in an increasingly digital economy, the methods we use to measure output are becoming increasingly obsolete.

Iran tries to end its isolation but so much stands in the way
David Gardner (FT) May 4, 2016
A nation whose young population wants to open up to the world remains stuck.

China’s fizz goes flat, even with far bigger credit stimuli
James Kynge (FT) May 4, 2016
Price swings mask the fact that money is no longer energising economic muscles.

A risible case for Brexit based on dubious data
Chris Giles (FT) May 4, 2016
Erecting unnecessary trade barriers would threaten Britain’s relative prosperity.

Argentina’s economic rise fuels rivalry with Brazil
Benedict Mander, Samantha Pearson and John Paul Rathbone (FT) May 4, 2016
South America’s two largest economies jealously eye each other’s handling of economic reform and corruption.

EU, US Negotiators Push for 2016 Deal, Though “TTIP Light” Not an Option
Bridges, Volume 20, Number 16 May 4, 2016
Negotiators for an EU-US trade and investment deal concluded their thirteenth round of talks on Friday, with both sides reiterating their wishes to conclude an agreement this year, so long as it does not force a compromise on substance.

US Treasury Report Sets Up "Monitoring List" of Five Major Trading Partners
Bridges, Volume 20, Number 16 May 4, 2016
Five of the US' top trading partners have now been put on a "monitoring list," according to a recent report by the US Treasury Department on exchange rate policies. However, these countries fell short of meeting the necessary criteria for “enhanced analysis” under Washington’s new trade enforcement laws.

EU, Japan Leaders Call for Trade Talks to Conclude in 2016
Bridges, Volume 20, Number 16 May 4, 2016
The European Union and Japan should aim to conclude their negotiations for a sweeping free trade deal this year, leaders from both sides said on Tuesday, following high-level meetings in Brussels.

Britain Can Still Be Master of Its Fate Within the EU
Holger Schmieding (WSJ) May 4, 2016
Rules from Brussels can border on the absurd, but what hurts the U.K. most are the policies its own politicians enact.

Regulators Want to Slow Runs on Derivatives
Matthew S Levine (Bloomberg View) May 4, 2016
New rules will try to make repo safe, but not too safe.

Fragile Currency-War Truce May Fracture
Mark Gilbert (Bloomberg View) May 4, 2016
A currency free-for-all threatens the global economic recovery.

Imagining a New Bretton Woods
Yanis Varoufakis (Project Syndicate) May 4, 2016
The 1944 Bretton Woods conference featured a clash between Harry Dexter White, the US representative, and John Maynard Keynes, representing a fading British Empire. Today, a straightforward question must be asked: Would Keynes’s discarded plan be more appropriate for our post-2008 multipolar world?

The Fed’s Risky New Mandate
Alexander Friedman (Project Syndicate) May 4, 2016
As the US Federal Reserve inches closer to achieving its targets for the domestic economy, it faces growing pressure to normalize monetary policy. But the domestic economy is no longer the Fed’s sole consideration in policymaking, which nowadays all but explicitly recognizes the need to promote global financial stability.

Reinforcing the Eurozone and protecting an open society
Giancarlo Corsetti, Lars P Feld, Ralph S.J. Koijen, Lucrezia Reichlin, Ricardo Reis and Hélène Rey (VoxEU) May 4, 2016
The sovereign debt and refugee crises prove that Europe has failed to design institutions robust enough to weather difficult times. Coordinated actions are needed, but these are difficult to implement because of the political climate. This column presents the 2nd Monitoring the Eurozone report, in which the authors propose institutional changes that are politically feasible and can help restore growth and prosperity to the Eurozone. The sovereign debt and refugee crises prove that Europe has failed to design institutions robust enough to weather difficult times. Coordinated actions are needed, but these are difficult to implement because of the political climate. This column presents the 2nd Monitoring the Eurozone report, in which the authors propose institutional changes that are politically feasible and can help restore growth and prosperity to the Eurozone.

Completing the Eurozone banking union
Nicola Borri and Pietro Reichlin (VoxEU) May 4, 2016
Most commentators agree that a European banking union would end the ‘deadly embrace’ between creditors and governments. This column argues that a banking union would be welcome, but that current proposals are dogged with problems. To resolve these, we should stop discussing debt restructuring and instead enhance the borrowing capacity of the European Stability Mechanism. A programme to buy capital in financial institutions unable to raise it directly on the market should also be set up. Most commentators agree that a European banking union would end the ‘deadly embrace’ between creditors and governments. This column argues that a banking union would be welcome, but that current proposals are dogged with problems. To resolve these, we should stop discussing debt restructuring and instead enhance the borrowing capacity of the European Stability Mechanism. A programme to buy capital in financial institutions unable to raise it directly on the market should also be set up.

Emerging markets face credit threat from ageing populations
Elaine Moore (FT) May 5, 2016
Creditworthiness faces risks as falling fertility changes population dynamics.

We should embrace robots, not fear them
Andrew McAfee (FT) May 5, 2016
Technological progress offers enormous benefits to all of us.

The ECB should change course before it is too late
David Folkerts-Landau (FT) May 5, 2016
Bank should consider reversing its policy of negative interest rates.

China trade barriers won’t stop cross-border ecommerce
Richard Wells (FT) May 5, 2016
Consumer longing for foreign goods motivated by more than price, with product authenticity and trust key.

China’s Growing Middle Class Fuels a Consumption Boom
Allen Cheng (II) May 5, 2016
Consumers have overtaken investment as the biggest driver of the economy, and urbanization should sustain growth for years to come

Kyiv's New Leadership and Ukraine's Economic Prospects
Alexander J. Motyl (WA) May 5, 2016
As before, Ukraine's new leadership holds the keys to the reforms that will invigorate the economy. From agriculture to IT, local and foreign investors are watching with keen interest.

The Book That Will Save Banking From Itself
Michael Lewis (Bloomberg View) May 5, 2016
In “The End of Alchemy,” former Bank of England head Mervyn King lays out a plan to redeem modern finance.

EU Refugee bonds
Giancarlo Corsetti, Lars P Feld, Ralph S.J. Koijen, Lucrezia Reichlin, Ricardo Reis, Hélène Rey and Beatrice Weder di Mauro (VoxEU) May 5, 2016
The large wave of refugees arriving from the Middle East and Northern Africa is one of the major challenges facing the EU today. In this column, the authors of the 2nd Monitoring the Eurozone report outline their proposal for one measure to help deal with the refugee crisis – EU refugee bonds. EU-wide bonds are an appropriate way to finance the response to the crisis due to the immediate costs for some countries and the future benefits for others of integrating refugees. The large wave of refugees arriving from the Middle East and Northern Africa is one of the major challenges facing the EU today. In this column, the authors of the 2nd Monitoring the Eurozone report outline their proposal for one measure to help deal with the refugee crisis – EU refugee bonds. EU-wide bonds are an appropriate way to finance the response to the crisis due to the immediate costs for some countries and the future benefits for others of integrating refugees.

The ‘real’ explanation of the Feldstein-Horioka puzzle
Nicholas Ford and Charles Yuji Horioka (VoxEU) May 5, 2016
The Feldstein-Horioka puzzle concerns why levels of investment and saving are correlated across countries. This is puzzling because financial markets can rapidly move capital between countries, and there is no reason why the best investment opportunities should be in a saver’s home country. This column posits a disarmingly simple solution to this longstanding puzzle – global capital markets cannot by themselves achieve net capital transfers between countries. This solution may have implications for related issues such as the interaction of interest rates, exchange rates, and current account imbalances. The Feldstein-Horioka puzzle concerns why levels of investment and saving are correlated across countries. This is puzzling because financial markets can rapidly move capital between countries, and there is no reason why the best investment opportunities should be in a saver’s home country. This column posits a disarmingly simple solution to this longstanding puzzle – global capital markets cannot by themselves achieve net capital transfers between countries. This solution may have implications for related issues such as the interaction of interest rates, exchange rates, and current account imbalances.

The FDI premium from EU membership
Randolph Bruno, Nauro F. Campos, Saul Estrin and Meng Tian (VoxEU) May 5, 2016
The current Brexit debate has highlighted questions about the benefits and costs of EU membership. This column considers the effect of membership on foreign direct investment (FDI). Using several measures, EU membership is found to increase FDI inflows by 14–38% between 1985 and 2013. These results support arguments for economic integration, and indicate that, like international trade, FDI is a key channel through which payoffs are delivered. The current Brexit debate has highlighted questions about the benefits and costs of EU membership. This column considers the effect of membership on foreign direct investment (FDI). Using several measures, EU membership is found to increase FDI inflows by 14–38% between 1985 and 2013. These results support arguments for economic integration, and indicate that, like international trade, FDI is a key channel through which payoffs are delivered.

Fears and joys of a life with social robots
Illah Nourbakhsh (FT) May 6, 2016
For the first time we will cohabit with an intelligent alien species.

Emerging Europe Moves Ahead but Slower
IMF Survey May 6, 2016
Most of Central, Eastern, and Southeastern European economies (CESEE) continue to record robust growth, while Russia and other countries in the Commonwealth of Independent States (CIS) remain in recession, says the IMF in its latest Regional Economic Issues report.

Central Banking’s Final Frontier?
Anatole Kaletsky (Project Syndicate) May 6, 2016
As central bankers worldwide continue to struggle to boost growth, inflation, and unemployment, the real issue is not whether more powerful monetary instruments are still available. The question is whether using them is necessary – or even threatens to do more harm than good.

Is Globalization Really Fueling Populism?
Daniel Gros (Project Syndicate) May 6, 2016
The prevailing explanation for the surge of populism in Europe and the US is that the "losers of globalization" are rebelling against the establishment that embraced trade liberalization. But the available data do not bear this out.

Why Corruption Matters
William J. Burns and Michael Mullen (Project Syndicate) May 6, 2016
World leaders are increasingly recognizing that corruption is a menace to development, human dignity, and global security. At the upcoming anti-corruption summit in London, those leaders – together with representatives from business and civil society – will have the opportunity to align action with words.

China’s financial system: The coming debt bust
Economist May 7, 2016
It is a question of when, not if, real trouble will hit in China.

Our crony-capitalism index: The party winds down
Economist May 7, 2016
Across the world, politically connected tycoons are feeling the squeeze.

The case for free trade
Cecília Hornok and Miklós Koren (VoxEU) May 7, 2016
Most economists view trade as benefiting countries overall but leading to winners and losers within nations. This column summarises a recent survey about winners and losers from globalisation prepared in the context of the FP7 COEURE project. It stresses that the policy debate should focus on identifying and compensating the losers from globalisation rather than on considering protectionist measures that are detrimental to growth. Most economists view trade as benefiting countries overall but leading to winners and losers within nations. This column summarises a recent survey about winners and losers from globalisation prepared in the context of the FP7 COEURE project. It stresses that the policy debate should focus on identifying and compensating the losers from globalisation rather than on considering protectionist measures that are detrimental to growth.

Estimating border effects in international trade: User beware
Cletus C. Coughlin and Dennis Novy (VoxEU) May 8, 2016
Borders impede trade, and a major objective of research in international trade has been to identify by how much. This column argues that bilateral trade data can give a misleading picture. Larger countries have inherently smaller border effects because their data aggregate over more space and economic activity. Trade economists need to think harder about how slicing up the map at the level of countries drives estimates of important policy variables. Borders impede trade, and a major objective of research in international trade has been to identify by how much. This column argues that bilateral trade data can give a misleading picture. Larger countries have inherently smaller border effects because their data aggregate over more space and economic activity. Trade economists need to think harder about how slicing up the map at the level of countries drives estimates of important policy variables.

Mozambique’s fallout from the credit boom
FT View May 8, 2016
The ‘Tuna bonds’ expose the irresponsible side of recent lending.

Brexit is too high a price to pay over migration
FT View May 8, 2016
Britain can manage the inflow of EU migrants by investing more.

Regional politics likely to take bigger role in Saudi oil policy
Roula Khalaf (FT) May 8, 2016
Ali al-Naimi’s exit signals how much things are changing.

The Indo-Pacific Century
Patrick Mendis and Dániel Balázs (Globalist) May 8, 2016
Will Sri Lanka be the flagship nation of a new dynamic?

China fights for market economy status
Lucy Hornby and Shawn Donnan (FT) May 9, 2016
Beijing had thought trade advantage would come automatically at end of this year.

China companies borrow to repay debts in latest credit binge
James Kynge (FT) May 9, 2016
Share of borrowing used to refinance debt is rising, study shows, as impact on GDP growth is falling.

Saudi Arabia’s reforms show serious intent
FT View May 9, 2016
Reorganising government underlines the urgent need for change.

An innovative yet double-edged approach to financial regulation
John Thornhill (FT) May 9, 2016
A watchdog with the ‘right touch’ sounds ominously like one with a ‘light touch’.

Russia’s Gloomy Prospects
Anders Åslund and Simon Commander (Project Syndicate) May 9, 2016
Over the past decade, Russian President Vladimir Putin’s regime has degraded the institutions that are essential to the functioning of a modern economy. And yet, even as crony capitalism cripples GDP growth and undermines real wages, Putin has given no sign that he intends to change course.

Helicopters on a Leash
Adair Turner (Project Syndicate) May 9, 2016
Monetary finance – or "helicopter drops" of newly printed cash – is the one policy that will always stimulate nominal demand, even when other policies, such as debt-financed fiscal deficits or negative interest rates, are ineffective. And there is no reason why rules cannot be devised to mitigate the political risk of excessive use.

The Global Financial System’s Weakened Defenses
Stefan Gerlach (Project Syndicate) May 9, 2016
Eighty-five years ago this month, Credit-Anstalt, by far the largest bank in Austria, collapsed. The parallels to the 2008 collapse of the US investment bank Lehman Brothers are strong – and crucial for understanding today’s financial risks.

Das House Kapital: The evolution of housing wealth
Volker Grossmann and Thomas Steger (VoxEU) May 9, 2016
The ratio of wealth to income has increased substantially since WWII. Despite the key role of housing wealth in this process, an appropriate macroeconomic model that can explain recent history and assess the future is still lacking. This column presents a novel macroeconomic model designed to investigate the evolution of housing wealth in a growing economy with a fixed overall land supply. A key implication is that rising house and land prices are natural phenomena in a growing economy. Further, rising wealth-to-income ratios appear to be an important trigger for the long-term growth of the finance industry. The ratio of wealth to income has increased substantially since WWII. Despite the key role of housing wealth in this process, an appropriate macroeconomic model that can explain recent history and assess the future is still lacking. This column presents a novel macroeconomic model designed to investigate the evolution of housing wealth in a growing economy with a fixed overall land supply. A key implication is that rising house and land prices are natural phenomena in a growing economy. Further, rising wealth-to-income ratios appear to be an important trigger for the long-term growth of the finance industry.

Rethinking the Politics of Trade
William A. Galston (WSJ) May 10, 2016
Wage insurance for workers and more enforcement tools for the government.

EM recovery will not last, IIF data show
Jonathan Wheatley (FT) May 10, 2016
Pick-up in activity is driven by credit, while structural headwinds remain, industry group says.

Germany is the eurozone’s biggest problem
Martin Wolf (FT) May 10, 2016
The monetary union will fail if it is run for the benefit of creditors alone.

Why China Won’t Devalue the Yuan
Michael Pettis (CFR/WSJ) May 10, 2016
Given China’s surplus economy, a weak currency could undermine growth and incite a trade war.

The IMF's Global Tug-of-War
Carmen Elena Dorobat (The Austrian) May 10, 2016
It seems like every other news story about the International Monetary Fund (IMF) reflects (at least in passing on the Fund's uneven treatment of developed and developing countries.

The Role of Law in Financial Stability
IMF Survey May 10, 2016
An upcoming IMF conference will examine the role that the law plays in contributing to financial stability, and the need to empower regulators and enhance transparency and accountability in the financial sector.

Europe Sells Out
Guy Verhofstadt (Project Syndicate) May 10, 2016
Europe’s refugee crisis is far from solved, but there are signs that the agreement finalized by the EU and Turkey on March 18 is reducing the flow of refugees and migrants from Turkey to Greece. The problem is that the deal is undermining the values on which the EU was founded.

Building Stability for Indian Growth
Raghuram Rajan (Project Syndicate) May 10, 2016
In their efforts to stimulate demand by pursuing increasingly aggressive monetary policies, advanced economies are imposing tremendous risks on emerging-market countries such as India. To cope, India must build a domestic platform of macroeconomic stability.

The Middle East’s New Renaissance
Mohammed Fairouz (FP) May 10, 2016
It’s time to let go of outmoded — and parochial — ideas about what 'culture' and 'civilization' in the Arab world is supposed to look like.

Germany Appears to Cave on Greek Debt
David Francis (FP) May 10, 2016
In a possible reconciliation over Greece's debt crisis, Germany appears to be ready to offer some concessions.

Greece’s fundamental problem with monetary unions: Past and present
Matthias Morys (VoxEU) May 10, 2016
The first century of modern Greek monetary history has striking parallels to the country’s current crisis, from repeated cycles of entry and exit from the dominant fixed exchange rate system, to government debt built-up and default, to financial supervision by West European countries. This column compares these two episodes in Greece’s monetary history and concludes that lasting monetary union membership can only be achieved if both monetary and fiscal policies are effectively delegated abroad. Understandable public resentment against ‘foreign intrusion’ might need to be weighed against their potential to secure the long-term political and economic objective of exchange rate stabilisation. The first century of modern Greek monetary history has striking parallels to the country’s current crisis, from repeated cycles of entry and exit from the dominant fixed exchange rate system, to government debt built-up and default, to financial supervision by West European countries. This column compares these two episodes in Greece’s monetary history and concludes that lasting monetary union membership can only be achieved if both monetary and fiscal policies are effectively delegated abroad. Understandable public resentment against ‘foreign intrusion’ might need to be weighed against their potential to secure the long-term political and economic objective of exchange rate stabilisation.

Double bank runs, liquidity risk management, and Basel III
Filippo Ippolito, José-Luis Peydró, Andrea Polo and Enrico Sette (VoxEU) May 10, 2016
By providing liquidity to credit line borrowers and depositors, banks are potentially exposed to simultaneous runs on their assets and liabilities. This risk became a reality when the European interbank market froze in the summer of 2007. This column discusses the risk of double-bank runs, liquidity risk management by banks and the implications for the regulation of the financial sector, in particular Basel III. In 2007, banks with a larger exposure to the interbank market suffered a spike in drawdowns on their outstanding credit lines to firms, and were effectively exposed to a ‘double-run’. Importantly, this fragility was mitigated by active pre-crisis liquidity risk management by banks. By providing liquidity to credit line borrowers and depositors, banks are potentially exposed to simultaneous runs on their assets and liabilities. This risk became a reality when the European interbank market froze in the summer of 2007. This column discusses the risk of double-bank runs, liquidity risk management by banks and the implications for the regulation of the financial sector, in particular Basel III. In 2007, banks with a larger exposure to the interbank market suffered a spike in drawdowns on their outstanding credit lines to firms, and were effectively exposed to a ‘double-run’. Importantly, this fragility was mitigated by active pre-crisis liquidity risk management by banks.

Japanese investors in Britain depend on the links to Europe
Hiroaki Nakanishi (FT) May 11, 2016
The UK should not squander its influence in the world’s largest bloc.

China’s flawed case for market economy status
FT View May 11, 2016
Beijing needs to reform more if it is to enjoy full WTO privileges.

African borrowers take pragmatic view of IMF loans
David Pilling (FT) May 11, 2016
The fund is no longer so hell-bent on pushing neoliberal medicine down recipients’ throats.

The City would have a strong hand to play post-Brexit
Ruth Lea (FT) May 11, 2016
Commercial interests will prevail — a deal with London will be done.

Berlin should be careful what it wishes for
Mark Mazower (FT) May 11, 2016
There is no good alternative to helping the Greeks in the task before them.

Nigeria needs Britain’s help in tackling corruption
William Wallis (FT) May 11, 2016

Fighting Corruption Critical for Growth and Macroeconomic Stability
IMF Survey May 11, 2016
By vigorously reducing corruption, countries can improve economic stability and boost growth and development, according to a new IMF staff paper.

Rescaling China’s Debt Mountain
Barry Eichengreen (Project Syndicate) May 11, 2016
The IMF estimates that 15% of Chinese loans to nonfinancial corporations are at risk, implying that the book value of the bad loans could be a quarter of national income. Policymakers have three options – none of them painless – for addressing the problem.
Some progress has been made but Buhari still has much work ahead of him.

Russia's Economy in 2016
Himani Pant (Diplomat) May 11, 2016
Falling oil prices and sanctions drive home the need for structural economic reform in Russia.

Should the Middle Class Fear the World's Poor?
Marshall Steinbaum (Boston Review) May 11, 2016
Globalization hurts the working class by enabling plutocrats, not by creating competition with the world's poor.

The triple crises that face Brazil’s new leader
FT View May 12, 2016
Temer as head of state is no national saviour but he can stabilise the country.

Colombia and the ‘intelligent austerity’ of life after oil
Lucinda Elliott and Richard House (FT) May 12, 2016
President Santos tells investors that oil price decline has been ‘a blessing in disguise’.

Saudi Arabia is a kingdom on the cusp of transformation
Mohammed Alyahya (FT) May 12, 2016
Some say the country’s future lies in the success of its Vision 2030 plan.

Asia risks repeating Europe’s errors
Philip Stephens (FT) May 12, 2016
The handling by China and the US of North Korea is an important test and opportunity.

Questions Loom for TPP Timing as Rhetoric Escalates on US Campaign Trail
Bridges, Volume 20, Number 17 May 12, 2016
Two months ahead of the nominating conventions for the US’ main political parties, the remaining presidential contenders continue to escalate their rhetoric on trade deals, including the Trans-Pacific Partnership Agreement (TPP).

The Economics of Brexit: A German View
Holger Schmieding (Globalist) May 12, 2016
Why Germany will not expend too much energy on a favorable deal for the UK if it quits the EU.

Fairness and Free Trade
Dani Rodrik (Project Syndicate) May 12, 2016
This year, the US and the EU must decide whether they will begin to treat China as a “market economy” in their trade policies. Unfortunately, even as the debate intensifies, the terms of the choice ensure that nothing will be done to address the world trade regime's deeper flaws.

Overcoming Latin America’s Skills Mismatch
Martin C. Spicer (Project Syndicate) May 12, 2016
Latin America could be on the verge of an epochal economic transformation – but only if employers can find workers with the skills they need. The way forward lies in expanding access to high-quality education, which would create the workforce needed to boost economic productivity, raise living standards, and reduce inequality.

Of Two Minds on China
Terry Lautz (YaleGlobal) May 12, 2016
One side of China pursues openness and reforms; another side insists that unity and stability are paramount

Liquidity Requirements and the Lender of Last Resort
Tim Sablik (FRB Richmond Econ Focus) May 12, 2016
The financial crisis of 2007-2008 was just the latest chapter in a long debate over how to minimize the risk of bank runs and other liquidity crunches

Goodbye, Globalization?
Jessie Romero (FRB Richmond Econ Focus) May 12, 2016
Why trade growth has slowed down — and what it might mean for the global economy

Britain after Brexit would sacrifice access for independence
Martin Wolf (FT) May 13, 2016
We could still have free movement of people and the EU’s rules but the City would suffer.

Eurozone’s So-Called Recovery Masks A Dark Secret: Mercantilism
John Weeks (Pieria) May 13, 2016
Broad opposition in Europe to the Trans-Atlantic Trade and Investment Partnership has prompted its supporters to summon the “protectionist” spectre.

Kim Announces Vague Five-Year Economic Vitalization Plan
Gordon G. Chang (WA) May 13, 2016
Kim Jong Un has announced a five-year economic plan to revive North Korea's economy. But his nuclear ambitions and lack of reform policies, resources, and foreign investment doom the prospects.

Improving Governance in the Arab World
Marwan Muasher (Project Syndicate) May 13, 2016
Five years ago, the eruption of the Arab Spring uprisings brought to the fore the inadequacy of the region's outdated social contracts in the face of current political and economic challenges. Yet Arab governments still seem not to have gotten the message.

Manna from Helicopters
Michael Biggs (Project Syndicate) May 13, 2016
Our current methods of calculation treat so-called helicopter money – the injection of funds into the economy by the central bank – as a temporary increase in the monetary base. The change is, in fact, permanent, with important implications for fiscal policy.

Turning Crisis into Success in Germany
Kemal Dervis (Project Syndicate) May 13, 2016
A recent opinion poll indicates that the far-right Alternative for Germany party is rapidly gaining ground, with its popular support reaching 15%, compared to around 5% a year ago. But, with an effective refugee-integration strategy, this dangerous trend can be reversed.

TTIP Must Die So the West Can Live
Hans Kundnani (FP) May 13, 2016
Free-market evangelists say the U.S.-EU trade deal is essential to the future of transatlantic diplomacy. But dangerous economics could unravel centuries of partnership.

ECB grants debt relief to all Eurozone nations except Greece
Paul De Grauwe (VoxEU) May 13, 2016
Greece may be about to get some debt relief, although there is still resistance to the idea. This column argues that the ECB has been providing other Eurozone countries with debt relief since early 2015 through its programme of quantitative easing. The reason given for excluding Greece from the QE programme – the ‘quality’ of its government bonds – can easily be overcome if the political will exists to do so. It is time to start treating a country struggling under the burden of immense debt in the same way as the other Eurozone countries are treated. Greece may be about to get some debt relief, although there is still resistance to the idea. This column argues that the ECB has been providing other Eurozone countries with debt relief since early 2015 through its programme of quantitative easing. The reason given for excluding Greece from the QE programme – the ‘quality’ of its government bonds – can easily be overcome if the political will exists to do so. It is time to start treating a country struggling under the burden of immense debt in the same way as the other Eurozone countries are treated.

Managing sudden stops
Barry Eichengreen and Poonam Gupta (VoxEU) May 13, 2016
The recent reversal of capital flows to emerging markets has pointed to the continuing relevance of the sudden stop problem. This column analyses the sudden stops in capital flows to emerging markets since 1991. It shows that the frequency and duration of sudden stops have remained largely unchanged, but that global factors have become more important in their incidence. Stronger macroeconomic and financial frameworks have allowed policymakers to respond more flexibly, but these more flexible responses have not guaranteed insulation or significantly mitigated the impact. The recent reversal of capital flows to emerging markets has pointed to the continuing relevance of the sudden stop problem. This column analyses the sudden stops in capital flows to emerging markets since 1991. It shows that the frequency and duration of sudden stops have remained largely unchanged, but that global factors have become more important in their incidence. Stronger macroeconomic and financial frameworks have allowed policymakers to respond more flexibly, but these more flexible responses have not guaranteed insulation or significantly mitigated the impact.

Understanding China’s Rise: The Role of Captive Savings
Alessandro Magnoli Bocchi and Francisco Quintana (RGE Econ Monitor) May 13, 2016
Over the last three decades, China’s contribution to global growth tripled. The interplay of three domestic factors enabled a growth acceleration: abundant cheap labour flocked into the industrial sector and accepted the financial repression of its savings, which in turn funded massive investment via subsidized lending to state-owned enterprises (SOEs). This model is now exhausted.

Special and differential treatment for developing countries reconsidered
Emanuel Ornelas (VoxEU) May 14, 2016
For over half a century, one pillar of the world trading system has been the principle of ‘special and differential treatment’ (SDT) for developing countries. This column explores how SDT has impacted trade policy around the world. Although this strategy aims to help developing countries, in design and practice it seems to be biased against them. While there is no support for SDT as a growth-promoting strategy, there is a clear need for further research that explicitly tackles the empirical challenges that it presents. For over half a century, one pillar of the world trading system has been the principle of ‘special and differential treatment’ (SDT) for developing countries. This column explores how SDT has impacted trade policy around the world. Although this strategy aims to help developing countries, in design and practice it seems to be biased against them. While there is no support for SDT as a growth-promoting strategy, there is a clear need for further research that explicitly tackles the empirical challenges that it presents.

Fragile recovery in emerging markets
FT View May 15, 2016
Policymakers would be ill advised to slack off reform.

Brexit would be a challenge for Berlin
Charles Grant (FT) May 15, 2016
It would heighten resentment of the country’s power among many Europeans.

Brazil: Tales of everyday agony
Joe Leahy and Samantha Pearson (FT) May 15, 2016
The decline from emerging market star to struggling nation is taking its toll on Rio’s citizens.

Brazil’s Chance to Save Itself
Mary Anastasia O’Grady (WSJ) May 15, 2016
The interim president inherited an economic crisis. Reform, not new taxes, is essential.

Where Oil Prices Go From Here
Daniel Yergin (WSJ) May 15, 2016
With political change in Saudi Arabia and the market rebalancing, look for $50 a barrel by the fall.

Stop picking on the GDP
Robert J. Samuelson (WP) May 15, 2016
Let’s not alter our standard measure of economic growth to cater to political goals.

The consequences of Japan’s shrinking
Shiro Armstrong (EAF) May 15, 2016
Japan's economic power is shrinking, Shiro Armstrong suggests in this week's lead essay, that this imposes a third constraint on national ambitions and how they might be achieved.

Africa has to go through its own industrial revolution
Kingsley Moghalu (FT) May 16, 2016
The continent is in thrall to orthodoxies suited to more mature economies.

Mexico: political risk on the rise
Dan Bogler (FT) May 16, 2016
Foreign investors and Mexicans alike are disappointed with the government’s unfulfilled promises.

Securing Better Money Through Currency Competition
Jp Cortez (Mises Daily) May 16, 2016
Competition is a good thing.

Trump: Business Corruption and a “Horrible Law”
Frank Vogl (Globalist) May 16, 2016
Five steps U.S. corporations should take to create a fairer society in the age of globalization.

Trade Is a National Security Imperative
Robert B. Zoellick (WSJ) May 16, 2016
Abandoning the Pacific pact will tell America’s Asian allies that the U.S. is yielding to China. They will accommodate accordingly.

The Economic Consequences of Brexit
Philippe Legrain (Project Syndicate) May 16, 2016
Many in the UK claim that, outside the EU, their country could quickly negotiate a bespoke agreement with the EU that offers all the benefits of membership and none of the costs; strike better trade deals with other countries; and reap huge benefits from scrapping EU regulations. These arguments border on delusion.

Saudi Arabia’s Bold Vision for Economic Diversification
Mohamed A. El-Erian (Project Syndicate) May 16, 2016
The attention attracted by Saudi Arabia's new Vision 2030 economic agenda is not surprising. If the Kingdom can establish the institutions and incentives needed to transform its economy, other countries that face similar challenges, in the region and beyond, may be inspired to follow suit.

Immigration, free movement and the UK referendum
Jonathan Portes (VoxEU) May 16, 2016
Migration is the most important issue for many likely voters in the upcoming UK referendum on EU membership, despite the fact that the economic impacts on the UK of recent EU migration appear to have been relatively benign. This column looks at these impacts, the implications of the UK’s “renegotiation” of its relationship with the EU, and post-Brexit policy options. A vote to Remain will unequivocally be a vote for the status quo in this area. A vote to Leave, however, will take us into new territory for UK immigration policy, with potentially significant consequences. Migration is the most important issue for many likely voters in the upcoming UK referendum on EU membership, despite the fact that the economic impacts on the UK of recent EU migration appear to have been relatively benign. This column looks at these impacts, the implications of the UK’s “renegotiation” of its relationship with the EU, and post-Brexit policy options. A vote to Remain will unequivocally be a vote for the status quo in this area. A vote to Leave, however, will take us into new territory for UK immigration policy, with potentially significant consequences.

Debunking ‘fiscal alchemy’: The role of fiscal councils
Roel Beetsma and Xavier Debrun (VoxEU) May 16, 2016
The success of independent central banks is often used to argue in favour of independent fiscal councils with the aim of promoting sound fiscal policies. But unlike central banks, fiscal councils have no policy levers to pull – they can bark but never bite. This column explores the theoretical foundations and practical implications of fiscal councils. The evidence suggests that independent councils can mitigate the deficit bias. They do this by subjecting the ‘fiscal alchemy’ to systematic, rigorous, and highly publicised scrutiny. The success of independent central banks is often used to argue in favour of independent fiscal councils with the aim of promoting sound fiscal policies. But unlike central banks, fiscal councils have no policy levers to pull – they can bark but never bite. This column explores the theoretical foundations and practical implications of fiscal councils. The evidence suggests that independent councils can mitigate the deficit bias. They do this by subjecting the ‘fiscal alchemy’ to systematic, rigorous, and highly publicised scrutiny.

The Ottoman legacy dies hard in the Middle East
David Gardner (FT) May 17, 2016
Even devotees of centralised rule concede they may have to give ground to federalism.

Fracking will provide a buffer for consumers as oil price rises
Ed Crooks (FT) May 17, 2016
The response of the shale industry will be key.

China becomes global leader in development finance
James Kynge (FT0 May 17, 2016
China’s development lending eclipses loans from all six western-backed multilateral institutions.

Venezuela’s Downward Spiral
NYT May 17, 2016
President Nicolás Maduro has ordered a state of emergency to suppress public outrage at his government’s failures.

Pols need to be brave on trade
Jennifer Rubin (WP) May 17, 2016
Here's hoping Clinton doesn't believe her anti-TPP spin.

Iran — Achieving its Potential in the Global Economy
David Lipton (IMF) May 17, 2016
With important sanctions lifted, Iran has a new opportunity to deepen its integration into the global economy.

The Best Way to Strengthen Ties With Asia? Ratify TPP
Bloomberg View May 17, 2016
A trade deal would lift all economies, without pitting the U.S. against China.

Austerity Worked for Latvia
Leonid Bershidsky (Bloomberg View) May 17, 2016
Never mind the naysayers, belt-tightening was the way to go.

The Way Back for Monetary Policy
Lee Jong-Wha (Project Syndicate) May 17, 2016
The central banks of major advanced economies have been navigating uncharted territory in recent years, deploying a range of unconventional monetary-policy tools that have had benefits, but have not stabilized the world economy. The time has now come to head back toward more familiar policy terrain.

Trumping the Dollar
Benjamin J. Cohen (Project Syndicate) May 17, 2016
Donald Trump recently suggested that the US should negotiate with its creditors to buy back much of its debt at a discount – in effect, a partial default on trillions of dollars of liabilities, intended to reduce the burden of debt service for taxpayers. There could be few more effective ways to destroy America's global standing and influence.

The Evidence on Education Reforms
Bjørn Lomborg (Project Syndicate) May 17, 2016
It is almost universally agreed that more education is good for society. But it turns out that some popular educational policies achieve very little, while others that are often overlooked can make a huge difference.

Europe's Four Horsemen of the Apocalypse
Harold Evans (K@W) May 17, 2016
Will They Ride Again?

What’s your (sur)name? Intergenerational mobility over six centuries
Guglielmo Barone and Sauro Mocetti (VoxEU) May 17, 2016
Societies characterised by a high transmission of socioeconomic status across generations are not only more likely to be perceived as ‘unfair’, they may also be less efficient as they waste the skills of those coming from disadvantaged backgrounds. Existing evidence suggests that the related earnings advantages disappear after several generations. This column challenges this view by comparing tax records for family dynasties (identified by surname) in Florence, Italy in 1427 and 2011. The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago. This persistence is identified despite the huge political, demographic, and economic upheavals that occurred between the two dates. Societies characterised by a high transmission of socioeconomic status across generations are not only more likely to be perceived as ‘unfair’, they may also be less efficient as they waste the skills of those coming from disadvantaged backgrounds. Existing evidence suggests that the related earnings advantages disappear after several generations. This column challenges this view by comparing tax records for family dynasties (identified by surname) in Florence, Italy in 1427 and 2011. The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago. This persistence is identified despite the huge political, demographic, and economic upheavals that occurred between the two dates.

Japan can do a lot better than selling the yen
FT View May 18, 2016
Resorting to currency intervention would be an admission of failure.

Brexiters have bet the bank on the triumph of emotion over reason
Philip Stephens (FT) May 18, 2016
The goal was always to harness the myriad grievances of voters to revolt against Brussels.

Bring on the long-delayed dawn of the robot age
Chris Giles (FT) May 18, 2016
Automation should help everyone be better off, as long as there is a fair distribution of the spoils.

The Collapse of the Global Trading System
Jean-Pierre Lehmann (Globalist) May 18, 2016
The notion that trade per se fosters peace and prosperity is fanciful.

The Real Lesson Behind Brazil's Mess
Christopher Langner (Bloomberg View) May 18, 2016
Brazilians should be proud that their fiscal responsibility law has teeth.

Germany Is Very, Very Tired
John Micklethwait (Bloomberg View) May 18, 2016
Exhaustion in Europe's powerhouse could pose a bigger threat to the EU than a British exit would.

Fighting the Next Global Financial Crisis
Robert J. Shiller (Project Syndicate) May 18, 2016
As long as we have an economic system that produces economic growth by rewarding inspired actors and investors, we will face the risk that the inspiration can be temporarily drowned out by sudden adverse talk and stories. That is why the most urgent regulations will always be time- and context-specific.

Another Greek Deadline Looms, but Perhaps With a Silver Lining
Jim Werner (II) May 18, 2016
Tentative signs of progress on debt relief and reform are keeping recovery hopes alive, but the country needs to get its banks lending again.

Will a New Vision for Saudi Arabia Work?
K@W May 18, 2016
Saudi Arabia has unveiled a bold plan to be less dependent on oil. While the plan makes sense in theory, observers say, it is difficult for resource-rich nations to successfully diversify.

Worlds of Inequality
Miles Corak (TAP) May 18, 2016
The winners and losers of globalization. Must it be this way?

The leverage ratio myth
Patricia Jackson (VoxEU) May 18, 2016
An ongoing issue for banking regulation is the extent to which regulators should move away from risk-sensitive capital requirements towards simpler requirements, such as the leverage ratio. This column looks at the evidence that has influenced the debate and shows that none of the analyses to date has tested the risk-based credit requirements of Basel II against leverage. It also sets out two new tests that do test Basel II and produce a different result from the earlier analyses, highlighting the importance of risk sensitivity. An ongoing issue for banking regulation is the extent to which regulators should move away from risk-sensitive capital requirements towards simpler requirements, such as the leverage ratio. This column looks at the evidence that has influenced the debate and shows that none of the analyses to date has tested the risk-based credit requirements of Basel II against leverage. It also sets out two new tests that do test Basel II and produce a different result from the earlier analyses, highlighting the importance of risk sensitivity.

'Low-for-long' interest rates and net interest margins of banks
Stijn Claessens, Nicholas Coleman and Michael Donnelly (VoxEU) May 18, 2016
Since the Global Crisis, interest rates in many advanced economies have been low and, in many cases, are expected to remain low for some time. Low interest rates help economies recover and can enhance banks’ balance sheets and performance, but persistently low rates may also erode the profitability of banks if they are associated with lower net interest margins. This column uses new cross-country evidence to confirm that decreases in interest rates do indeed contribute to weaker net interest margins, with a greater adverse effect when rates are already low. Since the Global Crisis, interest rates in many advanced economies have been low and, in many cases, are expected to remain low for some time. Low interest rates help economies recover and can enhance banks’ balance sheets and performance, but persistently low rates may also erode the profitability of banks if they are associated with lower net interest margins. This column uses new cross-country evidence to confirm that decreases in interest rates do indeed contribute to weaker net interest margins, with a greater adverse effect when rates are already low.

Flexible budget rules are in the eurozone’s interest
FT View May 19, 2016
But reprieves for Spain and Portugal will deepen divisions with Berlin.

Hackers target the weakest links in the global financial chain
Gillian Tett (FT) May 19, 2016
Cross-border security leaves a lot to be desired.

EU Trade Ministers Review Next Steps for US, Canada Pacts
Bridges, Volume 20, Number 18 May 19, 2016
The European Commission has confirmed plans to submit a proposal to the European Council in June for signing the 28-nation bloc’s trade deal with Canada, amid continued questions over the pact’s potential fate in the ratification stages.

EU, Mercosur Exchange Offers, Amid Brazil Political Turmoil
Bridges, Volume 20, Number 18 May 19, 2016
The EU and Mercosur exchanged offers on goods and services in their trade talks last week, in an effort to give new momentum to the long-running negotiations. The move comes amid a turbulent political situation in Brazil, which has raised concerns over the potential broader implications for the region and beyond.

EU Lawmakers Debate China "Market Economy" Status
Bridges, Volume 20, Number 18 May 19, 2016
EU parliamentarians approved a non-legislative resolution last week calling for treating China's exports to the 28-nation bloc in a "non-standard" way until the Asian economic giant meets EU requirements for being deemed a market economy.

Time for Brazil to Look Outward
Mac Margolis (Bloomberg View) May 19, 2016
Part of restoring the nation's lost fortunes will mean regaining its old foreign policy mojo.

Populism Is Holding Poland Back
Bloomberg View May 19, 2016
The new government is taking too many chances on the economy.

Leaving Europe Is a Risk the UK Shouldn't Take
Michael R Bloomberg (Bloomberg View) May 19, 2016
A British exit from the European Union would likely cause more harm than good.

Supply Side, Demand Side, or Innovation Side?
Edmund S. Phelps (Project Syndicate) May 19, 2016
It has become impossible to deny the so-called secular stagnation gripping the world’s developed economies: Wealth is piling up, but real wages are barely rising and workforce participation is on a downward trend. And policymakers have no plausible idea about how to boost potential and actual growth.

Brexit and New Europe
Laszlo Bruszt and Nauro F. Campos (Project Syndicate) May 19, 2016
A British exit from the EU would impose immense economic costs on Central and Eastern European member states. But a victory by those who want the UK to stay could be even more costly, strengthening illiberal politicians and stripping citizens of much of their say in key EU-level decisions.

Education Cannot Wait
Gordon Brown (Project Syndicate) May 19, 2016
Many of the 75 million young people whose education has been interrupted by conflict and crisis are likely to spend their school-age years without entering a classroom, their talents undeveloped and their potential unlocked. But now there is hope that education will no longer be regarded as an unaffordable luxury when crises erupt.

The U.N.’s World Humanitarian Summit Is a Total Mess
John Norris (FP) May 19, 2016
The world urgently needs a new aid architecture to grapple with a global refugee crisis. But the U.N.’s humanitarian summit in Istanbul could do more harm than good.

The Bandits’ Banker
Max Siollun (FP) May 19, 2016
David Cameron is right that Nigeria is “fantastically corrupt.” He just forgot to mention that Britain is making it worse.

The new normal that never was
Mark Cliffe (VoxEU) May 19, 2016
The extended period of low growth following the Global Crisis was denoted the ‘New Normal’ by some. This column argues that the period is still ongoing, and would be more usefully described as the ‘New Abnormal’. Far from being an equilibrium, the low growth was achieved by progressively more aggressive and unprecedented monetary policy actions, in response to a series of financial panics. Furthermore, the aftershocks of the Crisis are still colliding with a series of profound structural changes to and instabilities in the global economy. The extended period of low growth following the Global Crisis was denoted the ‘New Normal’ by some. This column argues that the period is still ongoing, and would be more usefully described as the ‘New Abnormal’. Far from being an equilibrium, the low growth was achieved by progressively more aggressive and unprecedented monetary policy actions, in response to a series of financial panics. Furthermore, the aftershocks of the Crisis are still colliding with a series of profound structural changes to and instabilities in the global economy.

The conflicting currents of Beijing’s five-year plan
Robert Zoellick (FT) May 20, 2016
Strategy is about consolidation of power and party revitalisation.

Vietnam’s new leaders grapple with debt
Gavin Bowring (FT) May 20, 2016
Amorphous government reflects preoccupation with economic and political stability.

How the West (and the Rest) Got Rich
Deirdre N. McCloskey (WSJ) May , 2016
The Great Enrichment of the past two centuries has one primary source: the liberation of ordinary people to pursue their dreams of economic betterment.

Money Doesn't Buy as Long a Life as It Used To
Cass R Sunstein (Bloomberg View) May 20, 2016
Inequality is shrinking in at least one area: mortality rates.

Assigning Blame for Greece's Unbearable Debt
Mark Whitehouse (Bloomberg View) May 20, 2016
Europe's leaders had a chance to give the country a break. Instead, they left their own taxpayers on the hook.

Will Brexit Destroy Britain and Europe?
Philippe Legrain (Project Syndicate) May 20, 2016
On June 23, British voters will decide in a referendum whether to remain in the EU or go it alone. Advocates of remaining, including Prime Minister David Cameron, may have the better arguments, but the future of the UK – and of Europe – is unlikely to be determined by reason alone.

The Greening of African Technology
Graça Machel (Project Syndicate) May 20, 2016
When it comes to fighting climate change – from which Africa will suffer disproportionately – the focus is often on technological innovation. But we must also remember the fundamental ideas and skills that have been around for millennia: how to think for the long term and how to work together.

In Defense of Denmark
James Kirchick (FP) May 20, 2016
With right-wing parties on the rise in Sweden and Germany, the restrictive immigration policies of cold-hearted Copenhagen are beginning to look awfully sensible.

What the world can learn from Argentina's holdout saga
Juan José Cruces and Eduardo Levy Yeyati (VoxEU) May 20, 2016
As Argentina’s protracted and litigious restructuring saga comes to an end, it is natural to ask what lessons the world can draw from this contentious process. This column takes a close look at Argentina’s ordeal, revealing just how idiosyncratic it has been. While it is therefore less influential than most people think, the long script yields important and unexpected lessons. As Argentina’s protracted and litigious restructuring saga comes to an end, it is natural to ask what lessons the world can draw from this contentious process. This column takes a close look at Argentina’s ordeal, revealing just how idiosyncratic it has been. While it is therefore less influential than most people think, the long script yields important and unexpected lessons.

Competition and creation of bank liquidity
Liangliang Jiang, Ross Levine and Chen Lin (VoxEU) May 20, 2016
By creating liquidity, banks improve the allocation of capital and accelerate economic growth. This column uses evidence from US banks between 1984 and 2006 to evaluate the impact of competition amongst banks on their liquidity creation. It finds that an intensification of competition in the banking industry materially reduces liquidity creation. Furthermore, the evidence suggests that more profitable banks experience a smaller reduction in liquidity creation because of their ability to better absorb risk. Similarly, an intensification of competition reduces liquidity creation more among small banks, who are more engaged in relationship lending. By creating liquidity, banks improve the allocation of capital and accelerate economic growth. This column uses evidence from US banks between 1984 and 2006 to evaluate the impact of competition amongst banks on their liquidity creation. It finds that an intensification of competition in the banking industry materially reduces liquidity creation. Furthermore, the evidence suggests that more profitable banks experience a smaller reduction in liquidity creation because of their ability to better absorb risk. Similarly, an intensification of competition reduces liquidity creation more among small banks, who are more engaged in relationship lending.

Central banks and recessions
Economist May 21, 2016
Do economic recoveries die naturally, or are they killed?

What is blocking business investment and productivity growth? A fresh focus on the problems of fragmentation in the world economy
Adrian Blundell-Wignall (OECD Insight) May 21, 2016
More than seven years after the global financial crisis reached its trough the world economy is still sputtering.

How much we work: The past, the present, and the future
Timo Boppart and Per Krusell (VoxEU) May 21, 2016
The rise of automation and, more generally, IT-driven structural change in the labour market have made policymakers and researchers worry about ‘disappearing jobs’ and a dire future for employment. This column examines data from several countries to get a long-term view of labour supply. To the extent that productivity improvements continue, hours worked will indeed likely fall. But this will not necessarily be a bad thing and jobs will not necessarily disappear. The rise of automation and, more generally, IT-driven structural change in the labour market have made policymakers and researchers worry about ‘disappearing jobs’ and a dire future for employment. This column examines data from several countries to get a long-term view of labour supply. To the extent that productivity improvements continue, hours worked will indeed likely fall. But this will not necessarily be a bad thing and jobs will not necessarily disappear.

Too much globalisation can be taxing
Peter Egger, Sergey Nigai and Nora Strecker (VoxEU) May 21, 2016
Increased globalisation since the mid-1990s has eroded some of the tax bases of many economies. At the same time, demand for public goods has risen and governments face the challenge of financing greater public expenditure with lower tax revenues. This column discusses tax policy responses to increasing globalisation, showing that since the mid-1990s governments in OECD countries have increasingly relied on revenues from employee-borne rather than firm-borne taxes. Due to the greater mobility of capital and high-skilled workers, who are able to escape higher taxes more easily, the middle classes have carried much of the additional tax burden. Increased globalisation since the mid-1990s has eroded some of the tax bases of many economies. At the same time, demand for public goods has risen and governments face the challenge of financing greater public expenditure with lower tax revenues. This column discusses tax policy responses to increasing globalisation, showing that since the mid-1990s governments in OECD countries have increasingly relied on revenues from employee-borne rather than firm-borne taxes. Due to the greater mobility of capital and high-skilled workers, who are able to escape higher taxes more easily, the middle classes have carried much of the additional tax burden.

Private news and monetary policy
Ippei Fujiwara and Yuichiro Waki (VoxEU) May 21, 2016
Central banks may well possess private information about future economic conditions. This column asks whether such information should be communicated to the public. While it is crucial for the central banks to communicate their policy action plans to the private sector, guidance that helps the private sector form more accurate forecasts of future shocks can be undesirable and destabilising. Central banks may well possess private information about future economic conditions. This column asks whether such information should be communicated to the public. While it is crucial for the central banks to communicate their policy action plans to the private sector, guidance that helps the private sector form more accurate forecasts of future shocks can be undesirable and destabilising.

Brexit can only damage UK’s financial colossus
FT View May 22, 2016
The City of London will be diminished if the country leaves the EU.

The IMF and calling Berlin’s bluff over Greece
Wolfgang Munchau (FT) May 22, 2016
If Europe wants to continue to ‘extend and pretend’ so be it. But it should be with their own money.

Inequality and the monopolies of unfettered techno markets
Izabella Kaminska (FT) May 22, 2016
Companies cut costs rather than improve process so as to grab market share.

How Anti-Trade Nativism Wrecked the Ancient Greeks
Barry Strauss (WSJ) May 22, 2016
Cleon was an Athenian demagogue, a shrewd operator known for violence and for getting things done.

The High Cost of Ultralow Interest Rates
Paul H. Kupiec (WSJ) May 22, 2016
They discourage saving and undermine personal responsibility, making government dependency more tempting.

British wellbeing 1780-1850: The impact of industrialisation
Daniel Gallardo Albarrán (VoxEU) May 22, 2016
Industrialisation has been the key to modern economic growth and rapidly rising incomes, but some question whether it is always a blessing when taking a broader view of human wellbeing. While the recent rise of China and other Asian economies has transformed the lives of millions, the experience of Britain in the 19th century shows a more mixed picture of development. This column presents a unified framework for measuring British wellbeing over the period 1780-1850, which shows that better health and higher income levels alternated in improving overall wellbeing, until declining health in the 1840s led to stagnating wellbeing. Industrialisation has been the key to modern economic growth and rapidly rising incomes, but some question whether it is always a blessing when taking a broader view of human wellbeing. While the recent rise of China and other Asian economies has transformed the lives of millions, the experience of Britain in the 19th century shows a more mixed picture of development. This column presents a unified framework for measuring British wellbeing over the period 1780-1850, which shows that better health and higher income levels alternated in improving overall wellbeing, until declining health in the 1840s led to stagnating wellbeing.

Investors labour under delusion Brazil is a quick fix
Alberto Gallo (FT) May 23, 2016
Brazil’s structural problems will take steam out of rally in assets.

Austria’s race to the right is a lesson to mainstream parties
Heather Grabbe (FT) May 23, 2016
Vienna election result shows how the politics of fear can run out of control.

The G-7 Agenda in Japan: Revive Global Prosperity
Shinzo Abe (WSJ) May 23, 2016
The subjects we will address include terrorism, international maritime laws and global health.

Transferring transfer prices
Melinda Brown (OECD Insight) May 23, 2016
International trade is one of the pillars of globalisation and one of the jobs of customs officers is to help trade contribute to socio-economic development by making sure that goods flow efficiently across borders. Ensuring that customs duties are collected in a fair, effective, and efficient manner is a major part of this task.

Big Banks' Risk Does Not Compute
Mark Buchanan (Bloomberg View) May 23, 2016
The financial system's hazards may be mathematically unknowable.

Trump's Worried About the Wrong China Threat
Tom Orlik (Bloomberg View) May 23, 2016
Tens of millions of Chinese white-collar workers could soon drive down middle-class wages globally.

A Debt Agenda for the G7
Martin Feldstein (Project Syndicate) May 23, 2016
On May 26-27, the heads of the Group of Seven leading industrial countries will gather in Japan to discuss common security and economic problems. A major common problem that deserves their attention is the unsustainable increase in the major developed countries’ national debt.

Make America Trade Again
Anders Fogh Rasmussen (Project Syndicate) May 23, 2016
No matter how much some US presidential candidates may deride free trade, it remains the backbone of the American economy. Without it, the US would be significantly poorer and its global influence would diminish significantly.

Time for India to Stretch its Wings
Mujobu Moyo (Project Syndicate) May 23, 2016
The World Bank's International Development Association program supports 77 of the poorest countries in the world – half of which are in Africa. But 20% of its resources go to a single country, which no longer needs it: India.

America’s Saving Perils
Stephen S. Roach (Project Syndicate) May 23, 2016
American politicians love to blame China and trade deals as the major source of pressure on US jobs and wages. But when it comes to the trade deficits that are weakening America's middle class, the US made its own bed, in the form of a massive saving deficit.

China's Coming Demographic Crash
Gordon G. Chang (WA/Around Asia) May 23, 2016
China's new two-child policy is too late to avert a population crash, and for the first time in recorded history China won't be the world’s most populous country.

The Potential Fallout of Brexit
John Cassidy (New Yorker) May 23, 2016
A decision to leave the European Union would create a period of deep economic uncertainty in the U.K.

Vietnam Could Be the Biggest Loser if Obama Can’t Deliver TPP
David Francis (FP) May 23, 2016
Obama's trade deal, the TPP, is looking less and less likely to pass -- and if it doesn't, the biggest loser will probably be Vietnam.

Donald Trump’s trade policies are dangerous
Catherine Rampell (WP) May 23, 2016
Trump’s bluster masks the real effects that tariffs would have on the U.S. economy.

The growing threat from online bank robbers
FT View May 24, 2016
A series of heists forces the Swift cross border network to tighten up.

The slow grind towards debt relief for Greece
FT View May 24, 2016
Eurozone creditor governments need to give Athens more fiscal room.

Brazil finds silver-lining in Petrobras probe
John Paul Rathbone (FT) May 24, 2016
The political weather is changeable but institutions are holding firm.

Renminbi bonds: swift execution
Lex (FT) May 24, 2016
China’s currency needs to depreciate. The question is how.

Russia May Be Toxic, But Domestic Investors Don't Mind
Leonid Bershidsky (Bloomberg View) May 24, 2016
Russia's bond offering was still oversubscribed even though Western banks and clearing organizations stayed away.

Workers Get a Little More of the Income Pie
Noah Smith (Bloomberg View) May 24, 2016
Tightening job markets have interrupted a 25-year decline in the share of GDP going to labor.

Last Man Standing
Mark Leonard (Project Syndicate) May 24, 2016
Much of modern geopolitics seems to be following the plot from Game of Thrones, with many countries under so much political and economic stress that their only hope is that their rivals collapse before they do. So their governments cling to power while exploiting rivals’ internal weaknesses.

Rediscovering Fiscal Policy at the G7
Jeffrey Frankel (Project Syndicate) May 24, 2016
At the G7 summit in Ise-Shima, Japan, developed-country leaders would do well to spend less time discussing currency wars, and more time discussing fiscal policy. After all, unlike monetary policy, which has failed to lift the world economy out of its long malaise, fiscal policy is a powerful tool for boosting activity.

Rethinking Retirement Ratios
Brigitte Miksa (Project Syndicate) May 24, 2016
The coming pension crunch could be even worse than most people believe, because the tools used to measure the economic impact of aging are not properly calibrated. There is a huge disparity between the number of people traditionally counted as being retired and those who actually depend on pensions to live.

Can Globalization Still Deliver?
David Lipton (IMF) May 24, 2016
With so many questioning whether globalization and interconnectedness are worth the trouble, and some seeing only trouble, I think it is important to assess what more globalization can do to boost living standards. What will it take to reap the benefits more fully, spread those benefits more fairly, limit the costs and ward off the risks? Can we renew a spirit of internationalism, now that we live in a world where no single country can be the guardian of globalization?

With Eye on China, Obama Strengthens Ties With Vietnam
Murray Hiebert (YaleGlobal) May 24, 2016
The US lifts an arms embargo for once nemesis Vietnam, but the latter does not want China to worry

High-frequency trading: Reaching the limits
Orçun Kaya (DB Research) May 24, 2016
The tremendous growth momentum in high-frequency trading seems to have reached its limits in recent years. The increasing cost of infrastructure and relentless competition within the industry are probably the first to blame. In addition, high-frequency trading firms are hardly participating in those dark pools where large block transactions are executed. Both trends are challenging their business model and trading strategies as high-frequency traders have seen their revenues and profits erode. Furthermore, forthcoming tighter prudential regulatory oversight may lead to an overhang of capacity in the high-frequency trading industry.

Low expectations for the G-7 summit
Barry P. Bosworth (Brookings) May 24, 2016
Seven of the world’s wealthiest nations meet today in Japan, but as their dominance over the global economy continues to wane, so too does their ability to solve the world’s toughest problems.

Saudi Arabia's Oil Strategy in a Time of Glut
Jim Krane (FA) May 24, 2016
Why the Kingdom wants to pump more.

Brazil: A lack of Temer-ity
Dan Bogler (FT) May 25, 2016
New government faces intractable problems and shows few signs of implementing bold solutions.

Corruption and car fumes clog up Mexico City
Jude Webber (FT) May 25, 2016
Notebook: Ninety minutes to drive 4km but still Mexicans use their cars.

The ‘Brexit’ referendum is the most important vote in Europe in a half-century
George F. Will (WP) May 25, 2016
Americans should pay close attention: This debate concerns matters germane to their present and future.

Obama "Confident" of TPP Passage, Touting Trade Benefits During Asia Trip
Bridges, Volume 20, Number 19 May 25, 2016
US President Barack Obama said on Monday that he is "confident" that his country’s Congress will be able to ratify a sweeping 12-country trade deal, even as election politics and public debate continue to pose questions for the agreement's actual prospects going forward.

In Uncertain Economic Climate, APEC Trade Ministers Eye Areas for Growth
Bridges, Volume 20, Number 19 May 25, 2016
Trade ministers from 21 Asia-Pacific economies meeting in Arequipa, Peru, last week called for progress in a series of areas, with a view to "regain economic momentum" in light of worrisome growth prospects at both the regional and global levels.

Merkel On the Brink?
J.D. Bindenagel (Globalist) May 25, 2016
Germany at a crossroad of domestic and foreign policy change.

Nigeria Needs Prices That Work
Bloomberg View May 25, 2016
Africa's largest economy should junk its damaging foreign-exchange controls.

New Deal Aims to Forget Greece, Not Forgive It
Leonid Bershidsky (Bloomberg View) May , 2016
IMF and eurozone officials took care of their political problems, not Greece's economic ones.

Closing the Middle East’s Education Deficit
Anne-Marie Slaughter and Lauren Bohn (Project Syndicate) May 25, 2016
According to the UN, ongoing conflicts in the Middle East and North Africa are depriving more than 13 million children of an education, while the youth unemployment rate is the highest in the world. Governments and international institutions need to recognize that the problem is no longer a mere "development" issue.

How the West Was Lost
Carl Bildt (Project Syndicate) May 25, 2016
Recent political discourse on both sides of the Atlantic suggests that the US and Europe are turning away from the policies of openness that have historically driven their economic success. That is bad news for the West – and for the rest of the world.

China’s Incomplete Growth Strategy
Yu Yongding (Project Syndicate) May 25, 2016
While China's leaders should be applauded for their commitment to implementing painful structural reforms, they are ignoring the present. In fact, China faces two separate challenges: the long-term issue of a declining potential growth rate and the immediate problem of below-potential actual growth.

The Trade Costs of Leaving the EU
Roderick Abbott (Project Syndicate) May 25, 2016
The “Brexiteers” – those who want Britain to leave the EU – argue that their goal would be virtually cost-free and have no effect on the UK’s global trade. But when British voters cast their ballots in the June referendum on the question, they must consider how the free-trade benefits they now enjoy could be maintained after Brexit.

Anomalous trading prior to Lehman’s failure
Thomas Gehrig (VoxEU) May 25, 2016
During normal operations, price discovery is an important feature of decentralised market trading. But the process can be distorted when markets are under great stress, such as during the run up to the collapse of Lehman Brothers in 2008. This column uses trading data from the days leading up to and following the collapse to show that price discovery at US stock exchanges remained remarkably efficient, even at the height of the turmoil. During normal operations, price discovery is an important feature of decentralised market trading. But the process can be distorted when markets are under great stress, such as during the run up to the collapse of Lehman Brothers in 2008. This column uses trading data from the days leading up to and following the collapse to show that price discovery at US stock exchanges remained remarkably efficient, even at the height of the turmoil.

Why the global trade slowdown may matter
Cristina Constantinescu, Aaditya Mattoo and Michele Ruta (VoxEU) May 25, 2016
Trade has been growing more slowly since the Great Recession not only because global GDP growth is lower, but also because trade itself has become less responsive to GDP. The causes of the changing trade-income relationship have been studied, but its consequences have not. This column presents a simple framework to assess some of the demand-side and supply-side implications. The change hurts growth, although the quantifiable effects are not large. Trade has been growing more slowly since the Great Recession not only because global GDP growth is lower, but also because trade itself has become less responsive to GDP. The causes of the changing trade-income relationship have been studied, but its consequences have not. This column presents a simple framework to assess some of the demand-side and supply-side implications. The change hurts growth, although the quantifiable effects are not large.

A Brexit myth of Brussels (mis)rule
Philip Stephens (FT) May 26, 2016
Good or bad, imaginative or dull, the important decisions have been taken at home.

The self-inflicted dangers of the EU referendum
Martin Wolf (FT) May 26, 2016
Cameron might soon be known as the man who left the UK in far-from-splendid isolation.

Brexit campaigners find an issue to rally round: migration
Sebastian Payne (FT) May 26, 2016
It is striking how similar Johnson’s language is to that of Farage.

IMF economists put ‘neoliberalism’ under the spotlight
Shawn Donnan (FT) May 26, 2016
Is the fund throwing darts at wider area of economic orthodoxy?

Africa Seeks to Rev Growth Engines Amid Downturn
IMF Survey May 26, 2016
This is a critical moment for sub-Saharan Africa, which faces slowing growth, but with the right policies many countries in the region are well positioned to ride out the storm, according to the latest issue of the IMF’s quarterly magazine, Finance & Development (F&D).

OECD Compendium of Productivity Indicators 2016: Eternal numbers to outlive long date
OECD Statistics Directorate May 26, 2016
Productivity, productivity, wherefore art thou?

Venezuela Collapses, Colombia Rises
Michael J. Totten (WA) May 24, 2016
As if the two countries had swapped places, Colombia is far from the no-go zone it once was, while Venezuela now verges on “failed state” status after years of doomed socialist policies.

Europe's Pointless 'Breakthrough' on Greece
Bloomberg View May 26, 2016
It'll stave off an immediate crisis, but that's about all.

A Post-Referendum Agenda for Britain
Chris Patten (Project Syndicate) May 26, 2016
Even if voters in the UK choose to remain in the EU, Prime Minister David Cameron will have an unpleasant mess to clean up. Rather than focus on the home front, Cameron should take the lead in putting in place a credible European policy for dealing with mass migration

EU Single Market: A game changer for economic integration
Jean-Marc Fournier (VoxEU) May 26, 2016
The limits of the European Single Market have often been highlighted. This column argues that although implicit barriers remain, the Single Market has delivered substantial benefits to member countries. New empirical evidence is presented of the trade and FDI gains that Central and Eastern European countries have enjoyed since joining the Single Market. On top of making regulations more competition-friendly, regulatory harmonisation can boost the economic links between countries. The limits of the European Single Market have often been highlighted. This column argues that although implicit barriers remain, the Single Market has delivered substantial benefits to member countries. New empirical evidence is presented of the trade and FDI gains that Central and Eastern European countries have enjoyed since joining the Single Market. On top of making regulations more competition-friendly, regulatory harmonisation can boost the economic links between countries.

Narendra Modi and India’s Dashed Economic Hopes
Aatish Taseer (NYT) May 27, 2016
When the prime minister was elected two years ago, he promised serious market reforms. He has yet to deliver.

How Venezuela Fell Into Crisis, and What Could Happen Next
Rick Glastone (NYT) May 27, 2016
Questions and answers on Venezuela’s economic crisis, and the implications for the country’s future and for President Nicolás Maduro.

The size of the reversal of the supercycle is bigger than you think: And too big to be dealt with by monetary policy in advanced economies
Adrian Blundell-Wignall (OECD Insight) May 27, 2016
The real economy will always seem to be disconnected from the financial economy during periods when the need for structural change is so overwhelming that it can hardly be otherwise.

Brexit: Two Unexpected Winners
Soner Cagaptay (Globalist) May 27, 2016
Erdogan’s embrace of nationalist rhetoric and actions could have important repercussions on Turkish foreign policy.

Twin Tests for the EU
Hans-Werner Sinn May 27, 2016
Two decisions in June will shape the future of Europe: the ruling by Germany's Constitutional Court on whether the Bundesbank may participate in the ECB's bond-buying program and the UK's referendum on continued EU membership. Whatever the outcome, the era of unconditional trust in the EU and its institutions has come to an end.

EU Refugee bonds
Giancarlo Corsetti, Lars P Feld, Ralph S.J. Koijen, Lucrezia Reichlin, Ricardo Reis, Hélène Rey and Beatrice Weder di Mauro (VoxEU) May 27, 2016
The large wave of refugees arriving from the Middle East and Northern Africa is one of the major challenges facing the EU today. In this column, the authors of the 2nd Monitoring the Eurozone report outline their proposal for one measure to help deal with the refugee crisis – EU refugee bonds. EU-wide bonds are an appropriate way to finance the response to the crisis due to the immediate costs for some countries and the future benefits for others of integrating refugees. The large wave of refugees arriving from the Middle East and Northern Africa is one of the major challenges facing the EU today. In this column, the authors of the 2nd Monitoring the Eurozone report outline their proposal for one measure to help deal with the refugee crisis – EU refugee bonds. EU-wide bonds are an appropriate way to finance the response to the crisis due to the immediate costs for some countries and the future benefits for others of integrating refugees.

Reinforcing the Eurozone and protecting an open society
Giancarlo Corsetti, Lars P Feld, Ralph S.J. Koijen, Lucrezia Reichlin, Ricardo Reis, Hélène Rey and Beatrice Weder di Mauro (VoxEU) May 27, 2016
Europe has failed to design institutions robust enough to weather difficult times, as the sovereign debt and refugee crises prove. This column introduces CEPR’s new Monitoring the Eurozone report, Reinforcing the Eurozone and Protecting an Open Society, which argues that coordinated actions are urgently needed. The institutional changes proposed by the authors are politically feasible and would help restore prosperity to the Eurozone. Europe has failed to design institutions robust enough to weather difficult times, as the sovereign debt and refugee crises prove. This column introduces CEPR’s new Monitoring the Eurozone report, Reinforcing the Eurozone and Protecting an Open Society, which argues that coordinated actions are urgently needed. The institutional changes proposed by the authors are politically feasible and would help restore prosperity to the Eurozone.

How bank networks amplify financial crises: Evidence from the Great Depression
Kris James Mitchener and Gary Richardson (VoxEU) May 28, 2016
The Global Crisis emphasised the fragility of international financial networks. Despite this, there has been little historical research into how networks propagate financial shocks. This column explores how interbank networks transmitted liquidity shocks through the US banking system during the Great Depression. During banking panics, the pyramided-structure of reserves forced troubled banks to reduce lending, thus amplifying the decline in investment spending. The Global Crisis emphasised the fragility of international financial networks. Despite this, there has been little historical research into how networks propagate financial shocks. This column explores how interbank networks transmitted liquidity shocks through the US banking system during the Great Depression. During banking panics, the pyramided-structure of reserves forced troubled banks to reduce lending, thus amplifying the decline in investment spending.

South Korea–China FTA falls short on reform
Jeffrey Schott and Eujin Jung (EAF) May 29, 2016
The South Korea–China FTA was a disappointing agreement.

Asia growth pessimism is not warranted
Juzhong Zhuang (OECD Insight) May 29, 2016
While secular stagnation for the global economy is still a debated hypothesis, for developing Asia, a downbeat view of its economies and policies is clearly overdone.

In Australia, All That Glitters Isn't Gold
Satyajit Das (Bloomberg View) May 29, 2016
The nation's financial sector is on shakier ground than many realize.

The trade-off between efficiency and equity
Torben M. Andersen and Jonas Maibom (VoxEU) May 29, 2016
Theory and empirical data contest the direction of causality in the relationship between economic performance and income inequality – a relationship that is of great political importance. This column uses evidence from OECD countries to show that the relationship is not linear. While some countries can improve economic performance only at the cost of increasing economic inequality, other countries can improve both economic performance and equality without such a trade-off. Theory and empirical data contest the direction of causality in the relationship between economic performance and income inequality – a relationship that is of great political importance. This column uses evidence from OECD countries to show that the relationship is not linear. While some countries can improve economic performance only at the cost of increasing economic inequality, other countries can improve both economic performance and equality without such a trade-off.

The productivity puzzle that baffles the world’s economies
FT View May 30, 2016
Slowing output per hour is worrying but little understood.

A misplaced mea culpa for neoliberalism
FT View May 30, 2016
The International Monetary Fund should stick to its knitting and tackle the decline in productivity.

Successful central banks focus on greater purchasing power
John Greenwood (FT) May 30, 2016
Interest rates are not a solution for the Japanese and eurozone economies.

Collusion keeps debt problems at bay in China’s private sector heartland
Sun Yu (FT) May 30, 2016
Extend and pretend is merely delaying the inevitable and making its impact that much more severe.

Nigeria: Running on empty
Maggie Fick (FT) May 30, 2016
Critics say President Buhari’s policies are adding to its worst economic crisis in generations.

The mystery of weak US productivity
Edward Luce (FT) May 30, 2016
Economic output is the ultimate test of our ability to create wealth.

European Money Doesn’t Like Greece
Mark Whitehouse (Bloomberg View) May 30, 2016
The latest bailout agreement won't bring back the capital the country needs.

Argentina’s Eternal Debt Problem
Carmen Reinhart (Project Syndicate) May 30, 2016
Argentina has emerged from nearly 15 years of the most litigious sovereign default in modern times, enabling the country to reenter the global financial system and build a more stable and prosperous future. It is an opportunity that Argentines must be careful not to squander.

The Limits of Oil’s Rebound
Anatole Kaletsky (Project Syndicate) May 30, 2016
Since last August, when it became clear that the lifting of sanctions on Iran would unleash a massive increase in global oil supplies, $50 has proved to be a ceiling for the trading range of a barrel. But now that this level has been exceeded, will it again become a floor?

Reigniting Emerging-Economy Growth
Michael Spence (Project Syndicate) May 30, 2016
It is no secret that emerging economies are facing serious challenges, which have undermined their once-explosive growth and weakened their development prospects. Whether they return to the path of convergence with the advanced economies will largely depend on how they approach an increasingly complex economic environment.

Washington threatens to undermine the WTO
FT View May 31, 2016
The US is wrong to try to manipulate the dispute settlement process.

Central banks as pawnbrokers of last resort
Martin Wolf (FT) May 31, 2016
Lord King offers a novel alternative to the alchemy of banking.

Malaysia: relaxed over the ringgit
Dan Bogler (FT) May 31, 2016
Here is one emerging market that does not expect to be rattled by a Fed hike.

Christine Lagarde’s response to the Wetherspoon beer mats
Alan Beattie (FT) May 31, 2016
The questions posed to the head of the fund are easy to answer.

Greece, Still Paying for Europe's Spite
Yanis Varoufakis (NYT) May 31, 2016
The country's creditors would rather grind Athens than see their loans being repaid.

Game Changing Trade Regulations in US Shake Up Corporate Supply Chain Responsibility
Roel Nieuwenkamp (OECD Insight) May 31, 2016
Some recent developments in the United States may have even more impact on supply chain responsibility with global trade implications.

McKinsey and the Saudi Mirage
Stephan Richter (Globalist) May 31, 2016
why the Saudi attempt to modernize their society is bound to fail.

Currency Manipulation by the United States Is Alive and Well
Tommy Behnke (Mises Daily) May 31, 2016
Last month, central bankers and finance leaders from the Group of 7 (G-7) advanced economies met in Sendai to discuss the global economy at large

Abe's Next Step in Japan's Economic Recovery
Bloomberg View May 31, 2016
Delaying a sales tax will help, but the prime minister needs to do more.

U.S. Election's Anti-Trade Tone Tops Worries of Emerging Countries
Mohamed Aly El-Erian (Bloomberg View) May 31, 2016
Protectionist rhetoric by presidential candidates now is a greater threat than the Fed's policy shift.

A British Test of Reason
Jean Pisani-Ferry (Project Syndicate) May 31, 2016
If voters in the UK decide in the country's referendum on June 23 to leave the EU, it will not be for economic reasons; indeed, it is more than apparent that Brexit would carry huge economic costs. So why does the outcome of the vote remain far from certain?

Moving From Debt to Equity in China
Andrew Sheng and Xiao Geng (Project Syndicate) May 31, 2016
A spate of recent commentary has been warning of the vertiginous rise in China’s debt, which jumped from 148% of GDP in 2007 to 249% at the end of the third quarter of last year, placing it on par with debt levels in the EU and the US. Should the world be worried?

Liberals to the Barricades
Andrés Velasco (Project Syndicate) May 31, 2016
Liberal democracy is humankind’s greatest political achievement, but liberal democrats around the world are reluctant to make the case for it. No wonder they are losing the battle for citizens’ hearts and minds.

Insurance and systemic risk: No easy conclusions
Christian Thimann (VoxEU) May 31, 2016
The IMF’s latest Global Financial Stability Report devotes for the first time a chapter to the systemic risks potentially associated with the insurance sector and how regulatory bodies should respond. This column examines the key points and proposes a way forward for the global regulatory framework for insurance. In particular, it argues for the importance of not treating the sector in the same way as the banking sector as the two operate very different business models. Similarly, for an activity-based approach, a regulatory focus on just nine ‘systemically important’ insurers rather than the sector as a whole is flawed.

Public development banks: A new perspective
Marcela Eslava, Xavier Freixas (VoxEU) May 31, 2016
Public development banks play a significant role in the allocation of credit to businesses that may be unable to attain credit under normal circumstances, despite generating positive externalities. But there is concern that lending by these institutions may end up being allocated inefficiently. This column considers the costly screening that banks must do to allocate funds. It finds that the inefficient allocation of credit may arise when banks are unable to fully internalise the benefits of possible projects. Direct lending and the implementation of subsidies for intermediated lending are two possible ways to counter expensive screening.