News & Commentary:

June 2014 Archives


Blanchard’s admonitions were ill-advised Financial Times Subscription Required
Andrew Tyrie (FT) Jun 1, 2014
The International Monetary Fund’s exercise of good judgment is vital but now and again it can be faulty.

The dark side of our black gold addiction Financial Times Subscription Required
Guy Chazan (FT) Jun 1, 2014
In ‘The Secret World of Oil’, Ken Silverstein holds his nose and shines a light into a murky business on which western prosperity depends.

On Inequality Denial New York Times Subscription Required
Paul Krugman (NYT) Jun 1, 2014
It persists because there are groups with a strong interest in creating a fog of doubt.

Bitcoin's Futile Quest to Be a Currency Wall Street Journal Subscription Required
Lawrence Parks (WSJ) Jun 1, 2014
The IRS treats bitcoins as property, and any transaction using them triggers a taxable event.

This is not the 1920s
Robert J. Samuelson (WP) Jun 1, 2014
Income inequality is not as great as it once was.

Brazil's Troubles: World Cup Runneth Over
Juan de Onis (World Affairs) Jun 1, 2014
When Brazil landed this summer’s World Cup seven years ago, its fortunes were on the up and its leaders intended to showcase their country’s growing importance. Things have not gone as planned.

Piketty’s ‘Second Law of Capitalism’ vs. standard macro theory
Per Krusell & Tony Smith (VoxEU) Jun 1, 2014
Thomas Piketty’s new book has been widely praised for its empirical contribution, but his prediction of rising inequality rests on economic theory. This column argues that Piketty’s pessimistic forecast is based on an extreme – and unrealistic – assumption about households’ saving behaviour. According to standard theory, the wealth–income ratio would increase only modestly as growth falls, so declining growth would not be a powerful force for generating high inequality.

Reconciling Hayek's and Keynes' views of recessions
Paul Beaudry, Dana Galizia & Franck Portier (VoxEU) Jun 1, 2014
Hayek viewed recessions as working out excessive investments; Keynes viewed them as demand shortages. This column argues that they may not be as mutually exclusive as many think. Recessions may reflect periods of liquidation but this may be associated with inefficient adjustment involving unemployment and precautionary savings. Stimulative policy may be desirable even if it delays the full recovery.

Welcome to the Revolution Foreign Affairs Subscription Required
Edward L. Morse (FA) Jun 1, 2014
Why shale is the next shale.

Alternatives to Currency Manipulation: What Switzerland, Singapore, and Hong Kong Can Do Adobe Acrobat Required
Joseph E. Gagnon (PIIE) Jun 1, 2014
Economists have long decried the efforts of large, advanced economies to manipulate their currencies to boost net exports at their trading partners' expense. But the International Monetary Fund appears to have ignored the beggar-thy-neighbor exchange rate policies of countries with developed, highly open economies. This Policy Brief examines Switzerland, Singapore, and Hong Kong, which have actively kept the value of their currencies low since the 2008–09 global recession. In each case, greater fiscal and especially domestic monetary ease would have achieved similar macroeconomic outcomes with less currency intervention and declining current account surpluses. If such countries had adopted these strategies to increase domestic demand, the global economy would have rebounded faster.

Tremors forecast as EU and US drift apart Financial Times Subscription Required
Axel Weber (FT) Jun 2, 2014
To my mind, investors should prepare for more volatility this year. The degree of easing has been exceptional.

Foreign banks fall out of love with US Financial Times Subscription Required
Tom Braithwaite (FT) Jun 2, 2014
Ambition has been reined in since the financial crisis and overseas groups no longer boast of trading floors the size of two football fields.

China faces crucial choice over growth Financial Times Subscription Required
Manoj Pradhan (FT) Jun 2, 2014
If China chooses consumption-led growth, it could also be choosing much lower growth than the 6% or so most investors have in mind.

Australia: End of the boom Financial Times Subscription Required
Jamie Smyth (FT) Jun 2, 2014
A cooling Chinese economy has hurt the mining sector, threatening a quarter century of uninterrupted growth and prompting protests over the prime minister’s tough new budget.

The Little Miracle Spurring Inequality Wall Street Journal Subscription Required
John Steele Gordon (WSJ) Jun 2, 2014
Extreme leaps in innovation, like the invention of the microprocessor, bring with them staggering fortunes.

What Is China's Biggest Weakness?
William Pesek (Bloomberg View) Jun 2, 2014
The very thing from which China's Communist Party has derived its strength and legitimacy in the 25 years since Tiananmen -- a booming economy -- is fast becoming its biggest weakness.

Adam Smith vs. Keynes and Minsky
Mohamed A. El-Erian (Bloomberg View) Jun 2, 2014
Mohamed A. El-Erian examines how free market purists and devotees of Adam Smith must contend with the economic realities defined by Keynes and Minsky.

Fiscal Discipline and Educational Quality
Mehmet Simsek (Project Syndicate) Jun 2, 2014
In a post-industrial age in which manufacturing is becoming ever more complex and competition has become global, countries increasingly need a highly skilled and educated workforce. The first step is to create a sound macroeconomic basis for high-quality, accessible schools.

Exchange rates and trade adjustment: Fat tails matter
Filippo di Mauro & Francesco Pappadà (VoxEU) Jun 2, 2014
Trade imbalances in the Eurozone require relative price adjustments. This column argues that the traditional ‘elasticity’ approach is lacking when thinking about the adjustment magnitude. Exports adjust when exporting firms sell more (intensive margin) and new firms start exporting (extensive margin). The extensive-margin reaction depends upon the fatness of firm-level productivity distributions. Surplus-country distributions have fatter tails than deficit countries, suggesting that the price adjustment magnitude may be larger than traditional calculations suggest.

Bold reforms aid Mexico’s growth Financial Times Subscription Required
Martin Wolf (FT) Jun 3, 2014
What is needed is not just a big improvement in policy but also one in governance. This is true in Mexico and India alike.

Banking crises happen in US not Canada Financial Times Subscription Required
John Kay (FT) Jun 3, 2014
The mortgage market in Carney country is cast as enviably dull – and some might apply this to the broader financial system.

Schools must enthuse tomorrow’s coders Financial Times Subscription Required
Kenneth Baker (FT) Jun 3, 2014
Games, gadgets and apps now make up a global business yet practical skills needed to make and invent things are barely taught in schools.

QE and the Tokyo stock market (part two) Financial Times Subscription Required
Andrew Smithers (FT) Jun 3, 2014
Even at current levels of bank purchases of bonds, quantitative easing is having a marked impact on the liquidity of other domestic investors.

Bet on tech pays off in China Financial Times Subscription Required
Henny Sender (FT) Jun 3, 2014
Profiting from middle class consumption increasingly means investing less in groups that make or build physical goods and more in virtual companies.

Rate rises will come despite lower yields Financial Times Subscription Required
Richard Madigan (FT) Jun 3, 2014
The most important question now is whether the US bond market is saying something negative about a change in the macro landscape. The answer is no.

European banks: Still unstable Financial Times Subscription Required
Christopher Thomson (FT) Jun 3, 2014
The search for yield has helped fund institutions on the eurozone periphery, but concerns over their financial health remain.

Is there room at the dragon's table?
Swagata Saha (AT) Jun 3, 2014
Indian Prime Minister Narendra Modi has chosen the BRICS summit in Brazil next month as his first official foreign visit. That suggests that beyond a desire for a strong alliance of emerging nations he is intent on exerting influence with China to get India elbow room at the top table as the Asia century unfolds.

How Bold Can the ECB Be?
Mohamed A. El-Erian (Bloomberg View) Jun 3, 2014
Don't expect high drama this week when the European Central Bank announces extraordinary measures to support the economic recovery.

A Manifesto for European Change
Tony Blair (Project Syndicate) Jun 3, 2014
Complacency about anti-EU parties' strong showing in the recent European Parliament election, on the grounds that there remains a pro-European majority, is dangerous. The balance between the EU and its member states must be re-addressed, with institutions reformed to make them more accountable and closer to those they govern.

Creating a Learning Society
Joseph E. Stiglitz (Project Syndicate) Jun 3, 2014
For more than two centuries, innovation has been a critical driver of the global economy, with most of the productivity gains stemming not from major discoveries, but from small, incremental changes. This suggests that we should focus on how societies learn, and what can be done to promote learning – including learning how to learn.

The Spanish Revival
Helga Jung (Project Syndicate) Jun 3, 2014
After fighting for its life for the last two years, Spain’s economy finally seems to have moved out of intensive care: the banking sector has been deemed “cured”; demand for Spanish bonds has soared; and Spain can once again raise capital on the market at reasonable interest rates. But more must be done to ensure a stable long-term recovery.

Repairing the transmission of monetary policy through asset-backed securitisation
Markus K Brunnermeier & Yuliy Sannikov (VoxEU) Jun 3, 2014
Eurozone monetary policy transmission is broken. A key aspect of this is the failure of credit to get to small and medium enterprises, and consumers. This column uses the ‘I theory of money’ to diagnosis the problem and propose ‘prudently designed’ asset-backed securitisation as the cure. This would transform illiquid SME and consumer loans into a liquid asset class that would broaden the transmission mechanism while providing a lasting intermediation market for this segment in the Eurozone.

Mao and Forever Foreign Affairs Subscription Required
Peter Martin and David Cohen (FA) Jun 3, 2014
Xi Jinping’s authoritarian reforms.

Tiananmen split the workers of the world Financial Times Subscription Required
John Gapper (FT) Jun 4, 2014
The opening of China through economic reform and foreign investment driven a wedge into the global proletariat.

Critics should heed good IMF advice Financial Times Subscription Required
Chris Giles (FT) Jun 4, 2014
With the general election less than a year away, the fund can play a vital role in helping the main political parties produce sensible manifestos.

Angola: Gulfs apart Financial Times Subscription Required
Andrew England and Javier Blas (FT) Jun 4, 2014
Vast oil reserves and the prospect of more to come have created rapid growth but the wealth remains stubbornly concentrated among the elite.

Europe Likely to Get Negative Interest Rates. What Does That Even Mean? New York Times Subscription Required
Neil Irwin (NYT) Jun 4, 2014
Normally the bank pays you to keep your money there. When rates turn negative, you pay the bank.

The Corruption Cure: Transparency, Taxes, Trade Wall Street Journal Subscription Required
David Cameron (WSJ) Jun 4, 2014
G-7 leaders should address the crony capitalism eating away at economic and political systems.

The New Look of Globalization
Mohamed A. El-Erian (Bloomberg View) Jun 4, 2014
A new study offers a picture of how globalization is empowering people and companies in ways that were unthinkable not long ago.

Volatility Dies, Hedge Funds Lose
Mark Gilbert (Bloomberg View) Jun 4, 2014
The strange death of volatility may be sowing the seeds of the next financial crisis.

An Economist’s Guide to War and Peace
Steve Killelea (Project Syndicate) Jun 4, 2014
Stories of violent conflict fill today’s headlines, making its gruesome immediacy all too apparent. But, while commentators debate geostrategic considerations, deterrence, ethnic strife, and the plight of ordinary people caught in the middle, dispassionate discussion of the economic costs of violence are rare.

When Rajan Met Modi
William Pesek (Bloomberg View) Jun 4, 2014
There are signs Raghuram Rajan, India's central bank governor, is extending an economic olive branch to the country's new leader, which should cheer global markets.

Lessons for the G7
Stewart M. Patrick (CFR) Jun 4, 2014
The United States and its G7 partners will still need to work with Russia and China to cope with pressing transnational challenges.

Economic history and economic development
Peter Temin (VoxEU) Jun 4, 2014
Increasing the interaction between economic history and development could benefit both subfields. This column points how some recent insights from economic history can be relevant for development. The Black Death led to an improvement in agricultural technology, changed the status of women, and increased wages. This process helped the Industrial Revolution, but the technology boom was not profitable in low-income countries. These findings suggest an underlying problem of development could be the demographic patterns that keep wages low.

Raising investment in the Eurozone
Marco Buti & Philipp Mohl (VoxEU) Jun 4, 2014
Investment in the Eurozone is forecast to remain below trend until 2015, with a particularly large shortfall in the periphery. Low investment reduces aggregate demand, thus lowering short-term growth, and it also hampers medium-term growth through its effect on the capital stock. This column highlights three causes of low Eurozone investment – reduced public investment, financial fragmentation, and heightened uncertainty – and proposes a series of remedies.

Taking aim at deflation dragon Financial Times Subscription Required
FT Jun 5, 2014
ECB has shown a fresh determination to protect the eurozone. Lending is unlikely to be revived until the sector is soundly capitalised.

Iran: Rogue trader Financial Times Subscription Required
Najmeh Bozorgmehr (FT) Jun 5, 2014
Secret sanctions-evading oil deals were only the start of the corruption that thrived under Ahmadi-Nejad. Can the country clean up?

Draghi’s action has silenced the doubters Financial Times Subscription Required
Gavyn Davies (FT) Jun 5, 2014
The interest rate is as low as it can go but other measures could be intensified if the recovery continues to disappoint.

Draghi tightens central banks’ grip Financial Times Subscription Required
Ralph Atkins (FT) Jun 5, 2014
ECB move helps restore global investors’ confidence in its ability to back up promises with action if necessary.

ECB promises much and delivers little Financial Times Subscription Required
George Magnus (FT) Jun 5, 2014
Negative deposit rates are the novel part of the package, but their effectiveness is questionable.

Frankfurt yet to banish deflation threat Financial Times Subscription Required
Strephen King (FT) Jun 5, 2014
The ECB chief is relying on his reputation as the man who will “do whatever it takes” to lift market sentiment. It works so long as we believe it works.

Europe Divided Over Immigration, Work Ethics
Pallavi Aiyar (YaleGlobal) Jun 5, 2014
Aging, wealthy Europe turns on immigrants for a willingness to work for low wages.

Pittsburgh's Path to Recovery
Matthew Stepp (Globalist) Jun 5, 2014
What does it take for a major city to bounce back economically?

Piketty's Place in the Top 1 Percent
Gary Clyde Hufbauer and Cathleen Cimino (PIIE) Jun 5, 2014
As everyone knows and as Thomas Piketty has documented in his book Capital in the Twenty-First Century, income and wealth are highly skewed towards the top 1 percent. In the United States today, the top 1 percent of households command about 20 percent of personal income and control nearly 35 percent of national wealth.

US Confirms New Import Duties on Chinese Solar Products
Bridges, Volume 18, Number 20 Jun 5, 2014
The US Commerce Department announced on Tuesday that it would be imposing preliminary countervailing duties on imports of certain Chinese crystalline silicon photovoltaic products – including solar cells, modules, laminates, and/or panels. The anti-subsidy duties are significantly higher than those confirmed in a separate probe two years ago and cover an expanded scope of products, including those partly manufactured in Taiwan.

UN Group Chairs Unveil Zero Draft for Sustainable Development Goals
Bridges, Volume 18, Number 20 Jun 5, 2014
A UN group tasked with formulating a proposed set of sustainable development goals (SDGs) will for the first time consider a zero draft of a possible text at its next meeting later this month, officials confirmed earlier this week.

Obama Announces Plans to Slash Carbon Emissions from Existing Power Plants
Bridges, Volume 18, Number 20 Jun 5, 2014
The Obama Administration released plans on Monday to slash carbon dioxide emissions by an average of 30 percent from 2005 levels by 2030 on all existing American power plants, in what has been touted as one of the most far-reaching moves ever made by the US executive branch to tackle the threat of climate change.

Russia, Belarus, and Kazakhstan Announce Eurasian Economic Union
Bridges, Volume 18, Number 20 Jun 5, 2014
Russia, Belarus, and Kazakhstan inked a deal last week to formally establish an economic union between them, capping approximately two decades' worth of talks. The bloc – termed the Eurasian Economic Union – notably does not include Ukraine, and comes at a time where Moscow’s geopolitical rift with many of its Western partners shows no sign of resolution.

Lagarde: Poverty, Poor Infrastructure Risk Dampening African Growth
Bridges, Volume 18, Number 20 Jun 5, 2014
African finance ministers and central bank governors, together with the International Monetary Fund (IMF), agreed last week to ramp up their joint efforts to tackle poverty in order to sustain the strong economic performance that the continent has seen these past two decades. However, they cautioned, various policy challenges remain unresolved as the region works toward achieving sustained growth and development.

ECB's Big Bang Is Impressive, but More Is Needed
Mohamed A. El-Erian (Bloomberg View) Jun 5, 2014
The European Central Bank did today what no major central bank has done outside a major financial crisis: It pushed the rate on bank deposits to minus 0.1 percent. Impressive, but not quite enough.

Mario Draghi's Latest Flop
Bloomberg View Jun 5, 2014
The European Central Bank has failed to announce the one policy that would make a real difference to Europe's economy.

Is Malaysia Asia's Weakest Link?
William Pesek (Bloomberg View) Jun 5, 2014
From missing airplanes to jail-bound opposition leaders, Malaysia has recently made international headlines for all the wrong reasons. Will the nation's economy be next?

History Lesson on What ECB Can Do to Euro
Mark Gilbert (Bloomberg View) Jun 5, 2014
Today's ECB rate decision may turn out to be a non-event for the currency markets.

The Disenchantment of Europe
Philippe Legrain (Project Syndicate) Jun 5, 2014
The recent European Parliament elections were dominated by disillusion and despair. Though German Chancellor Angela Merkel calls the surge in support for extremists “regrettable,” her government – and EU institutions more generally – is substantially responsible for it.

Europe Is Still Standing
Daniel Gros (Project Syndicate) Jun 5, 2014
Judging from the headlines, one might get the impression that the 400 million citizens eligible to participate in the recent European Parliament voted massively against the EU. But to characterize the election result as a rejection of Europe simply is not quite accurate.

The 4% Non-Solution
Kenneth Rogoff (Project Syndicate) Jun 5, 2014
The idea of permanently raising inflation targets to 4%, first proposed by IMF chief economist Olivier Blanchard, has been endorsed by a number of other academics, including, most recently, Paul Krugman. Unfortunately, the problem of ensuring a smooth and convincing transition to a new target is perhaps insurmountable.

Capital controls in the 21st century
Barry Eichengreen & Andrew K Rose (VoxEU) Jun 5, 2014
Since the global financial crisis of 2008–2009, opposition to the use of capital controls has weakened, and some economists have advocated their use as a macroprudential policy instrument. This column shows that capital controls have rarely been used in this way in the past. Rather than moving with short-term macroeconomic variables, capital controls have tended to vary with financial, political, and institutional development. This may be because governments have other macroeconomic policy instruments at their disposal, or because suddenly imposing capital controls would send a bad signal.

How to Control the Banks
Roger E. Alcaly (NYRB) Jun 5, 2014
The most pressing task of financial reform must be to strongly limit the risks posed to the economy by large banks and other financial institutions that borrow so much. The best way to achieve this goal is to explicitly limit the extent to which they borrow to fund their operations.

Scalpers Inc.
John Lanchester (LRB) Jun 5, 2014
We want a market to be people buying and selling to and from each other, in a specific physical location, ideally with visible prices. But now the principal actors are not human beings, but algorithms; the real action happens inside computers at the exchanges, and the old market is now nothing more than a stage set whose main function is to be a backdrop for news stories about the stock market. More

The Coming of "Big Renewable"
Karel Beckman (Globalist) Jun 6, 2014
How renewable energy sparks growth in the economy of the future.

The Great Credit Mistake
Adair Turner (Project Syndicate) Jun 6, 2014
After the 2008 financial crisis, credit growth collapsed in most developed economies, including the eurozone. Whether that fall reflected low demand or constrained supply may seem like a technical issue, but it carries important implications for policymaking and economic performance – and the official answer is probably wrong.

Procyclicality of initial margin models
David Murphy, Michalis Vasios & Nick Vause (VoxEU) Jun 6, 2014
Initial margin models are often procyclical, raising margin requirements at times of market stress, which can exacerbate that stress. This column proposes quantitative measures of procyclicality both over the cycle and over liquidity planning horizons. If market participants disclosed these procyclicality measures of their margin models, this could help counterparties to anticipate potential increases in margin requirements, and to prepare accordingly.

Fast money: the battle against the high frequency traders Recommended!
Andrew Smith (Guardian) Jun 6, 2014
A 'flash crash' can knock a trillion dollars off the stock market in minutes as elite traders fleece the little guys. So why aren't the regulators stepping in? We talk to the legendary lawyer preparing for an epic showdown.

The GOP's Antique Bank Wall Street Journal Subscription Required
WSJ Jun 8, 2014
The Export-Import Bank is a flagship of crony capitalism.

Rich have advantages money cannot buy Financial Times Subscription Required
Lawrence Summers (FT) Jun 8, 2014
The differences between the rich and everyone else are not only about money but about health and opportunity.

Growing silver economy signals big winners Financial Times Subscription Required
John Authers (FT) Jun 8, 2014
Paying for the boon of a longer life will be costly. But there are some positive opportunities and it is worth exploring them.

Transatlantic trade: Hard sell Financial Times Subscription Required
Shawn Donnan (FT) Jun 8, 2014
They were hailed as a way to ‘fire up’ economies on both sides of the Atlantic. But today the EU-US trade talks are facing political obstacles.

Sierra Leone: From Blood Diamonds to a Market Economy
Jacob Conteh (Globalist) Jun 8, 2014
Forgiveness, freedom and accountability help to restore prosperity to a war-torn country.

Model risk: Risk measures when models may be wrong
Jon Danielsson, Kevin James, Marcela Valenzuela & Ilknur Zer (VoxEU) Jun 8, 2014
Risk forecasting is central to financial regulations, risk management, and macroprudential policy. This column raises concerns about the reliance on risk forecasting, since risk forecast models have high levels of model risk – especially when the models are needed the most, during crises. Policymakers should be wary of relying solely on such models. Formal model-risk analysis should be a part of the regulatory design process.

The Brain Regain
Mohammed bin Rashid Al Maktoum (Project Syndicate) Jun 8, 2014
The “brain drain” that has afflicted developing countries for decades is now going into reverse in some countries. But success requires more than plugging a leak; economic development requires countries to make active efforts to attract talent.

A primer on ‘global liquidity’
Eugenio Cerutti, Stijn Claessens & Lev Ratnovski (VoxEU) Jun 8, 2014
‘Global liquidity’ is often used to describe the impact of low US and EZ interest rates on the rest of the world. The concept is critical for understanding the global financial cycle and international spillovers. This column defines global liquidity as the ease of financing in cross-border markets and points to its potential drivers. To limit their exposures to global liquidity fluctuations nations can embrace better macro policy frameworks, consider capital flow management tools, and more stringently regulate and supervise banks.

Russia’s neighbours: Primary colours Financial Times Subscription Required
Jack Farchy (FT) Jun 9, 2014
The emergence of the Eurasian Economic Union tightens links between Moscow and former Soviet republics but raises concerns about growing isolation from the west.

Corporate tax escape trick set to backfire Financial Times Subscription Required
Luca Paolini (FT) Jun 9, 2014
Corporate profitability could suffer as the imbalance between company and household contributions becomes difficult for policy makers to defend.

How to Ride the Next Wave of Chinese Growth Wall Street Journal Subscription Required
Stephen Roach (WSJ) Jun 9, 2014
Negotiate a Bilateral Investment Treaty to exploit China's coming boom in services.

A world war between classes, not countries
Ismael Hossein-Zadeh (AT) Jun 9, 2014
As today's super-rich increasingly become a nation unto themselves, a de facto alliance between global elites is facilitating imperialist schemes of regime change. When choosing whether an act of aggression needs hard or soft power, interventionist powers are deciding whether countries like Iran or Ukraine can be divided across class lines, and if a pact can be built with their wealthy oligarchs.

IMF Must Contribute to Global Fiscal Policy Debate
IMF Survey Jun 9, 2014
The IMF must provide high-quality fiscal services to its members, especially through technical assistance and capacity building work, says Vitor Gaspar, the new Director of the IMF’s Fiscal Affairs Department.

Towards the Next Era of Growth—Reforms and Rebalancing
Christine Lagarde (IMF) Jun 9, 2014
I will touch upon three themes. First, a brief overview of the state of play of the global economy; second, a tour de table of some key players; and third, some thoughts on laying the foundations for the next era of growth.

China and India, Made for Each Other
William Pesek (Bloomberg View) Jun 9, 2014
The idea that China and India might join forces, to cooperate as much as they compete, is both seductive and ephemeral.

Is the Market Confident or Too Complacent?
Mohamed A. El-Erian (Bloomberg View) Jun 9, 2014
Maybe the VIX "fear index" really should be renamed the "complacency" or "hubris" index.

Financial Football: An Economic Guide to Brazil's World Cup
Jim O'Neill (Bloomberg View) Jun 9, 2014
With the World Cup upon us, Bloomberg View has asked some special guests from competing nations to write about their teams, their chances of success in Brazil,

Europe's Bond Yields Aren't Making Sense
Mark Gilbert (Bloomberg View) Jun 9, 2014
Record low European bond yields should trigger a questioning tickle of the hairs on the back of your neck.

Europe in a Multipolar World
Volker Perthes (Project Syndicate) Jun 9, 2014
Emerging powers’ reactions to the Ukraine crisis show that what happens in Europe no longer defines world politics, even when a major conflict is brewing there. But, though many view this crisis as being largely about Europe’s inability to resolve its own regional disputes, a peaceful outcome could bolster Europe’s global influence.

Europe’s Delivery Gap
Günter Verheugen (Project Syndicate) Jun 9, 2014
In the aftermath of the European Parliament election, Europe’s heavyweight national leaders are engaged in the usual horse-trading over who gets which EU positions. The much wiser approach would be to agree on policy priorities first and jobs later.

The ECB and Sisyphus: It won't be finished unless it does QE
George Magnus (Pieria) Jun 9, 2014
Nothing short of QE will fulfill the ECB’s role of supporting an economic recovery that it is largely the job of governments and the Commission to deliver.

Mega-regional trade deals and the global mega-mess
Jayant Menon (VoxEU) Jun 9, 2014
With the rise of mega-regional trade agreements, the world trade system resembles a jigsaw puzzle. This column discusses the difficulties involved in consolidating free trade agreements at the regional level, and argues that piecing together the blocs around the world will be even more challenging. A potential way forward is to return to the most widely used modality of trade liberalisation – unilateral actions – but this time involving the multilateralisation of preferences rather than unreciprocated reductions in tariff rates.

China Will Need A Series Of Miracles To Sustain Growth
John Maudlin (Business Insider) Jun 9, 2014
The problem is that today China is the most significant macroeconomic wildcard in the global economy.

Financial Stability and Monetary Policy: Happy Marriage or Untenable Union?
John C. Williams (FRBSF Economic Letter) Jun 9, 2014
The very real and sizable costs of using monetary policy to deal with risks to financial stability—along with the uncertain benefits of doing so—argues for finding alternative tools with more favorable tradeoffs. Policymakers should study ways to design policy frameworks that support financial stability, with only a modest cost to macroeconomic goals and anchoring inflation expectations.

Three events that shaped our world Financial Times Subscription Required
Martin Wolf (FT) Jun 10, 2014
If there is one lesson from the past 100 years it is that we are doomed to co-operate. Yet we remain tribal.

Deja vu: echoes of pre-crisis world mount Financial Times Subscription Required
John Plender (FT) Jun 10, 2014
While a financial crisis is not imminent, the seeds of one are being sown in the way described by Minsky, the theorist of capital market instability.

How 'Rogue' Is China's Aid?
Cullen S. Hendrix and Marcus Noland (WP/PIIE) Jun 10, 2014
Are China's 21st century investment, aid, and security ties disproportionately to nondemocratic countries, reflecting an affinity for authoritarian governments, or does China's interest in natural resource wealth undermine democratic institutions?

Unemployment and A Tale of Two Financial Crises
D.W. MacKenzie (Mises Daily) Jun 10, 2014
Why has the recovery been so very slow?

Greece: Grounds for Cautious Optimism
IMF Survey Jun 10, 2014
Greece has made substantial progress on fiscal and external adjustment, and the economy is set to grow in 2014 after six years of recession says Poul Thomsen, head of the IMF’s Greece team.

Brazil’s Own Goals
Matt Slaughter and Jaana Remes (Project Syndicate) Jun 10, 2014
Brazil may be in the international spotlight – hosting the World Cup this month and the 2016 Summer Olympics – but it maintains considerable barriers to the global economy. In a world that is constantly becoming more interconnected, Brazil risks being left behind.

Why This Merger Boom Is Different
Peter R. Orszag (Bloomberg View) Jun 10, 2014
Mergers and acquisitions are booming again worldwide, and this time the markets are rewarding both the companies doing the buying and the ones being sold. This may be because the economy is sluggish and interest rates are low.

Slow Your Judgments on Fast Trading
Noah Smith (Bloomberg View) Jun 10, 2014
High-frequency trading may be problematic, but it's best not to draw any hasty conclusions.

Levine on Wall Street: 21st-Century Activists and 14th-Century Markets
Matt Levine (Bloomberg View) Jun 10, 2014
Really if you have an investment strategy and it doesn't work when you backtest it over 600 years of data, you have nothing.

What If the Fed Has Created a Bubble?
Mohamed A. El-Erian (Bloomberg View) Jun 10, 2014
The Fed might be overestimating its ability to contain the financial repercussions of its stimulus efforts.

Asia's New 'Axis of Reform'
William Pesek (Bloomberg View) Jun 10, 2014
Asia's three biggest economies are suddenly experiencing a burst of change. Are we seeing the birth of a new "Axis of Reform," one which could revive the global economy?

Is Japan Turning to Voodoo Economics?
William Pesek (Bloomberg View) Jun 10, 2014
In November 2012, Tokyo unleashed one of modern history's greatest gestures of corporate welfare, driving the yen down 20 percent. Nineteen months on, have companies shared the wealth? Nope.

Wage compression and falling Latin American inequality
Eduardo Levy Yeyati & Samuel Pienknagura (VoxEU) Jun 10, 2014
Latin America’s inequality has fallen, driven by a reduction in the educational wage premium. This column discusses potential driving forces behind this phenomenon and argues that while this is a positive outcome, it may reflect a deeper malaise. A preliminary evaluation suggests that supply changes are more important than de-industrialisation. But lacklustre PISA scores support a more dismal hypothesis. The premium decrease may mirror a decline in education quality.

India must reap benefits of urbanisation Financial Times Subscription Required
David Pilling (FT) Jun 11, 2014
Modi has tapped into the aspiration created by the blending of rural and urban – which itself brings challenges and opportunities.

Crazy equities should be boring as bonds Financial Times Subscription Required
Stephen King (FT) Jun 11, 2014
The market fears its own craziness and demands a huge risk premium over short rates, 4-6% a year, versus 1% a year for bonds.

Forget targeting – try ‘positive ambiguity’ Financial Times Subscription Required
Miko Giedroyc (FT) Jun 11, 2014
A little uncertainty can go a long way toward reducing the dangers of risk-taking and put the economy on more solid ground.

Paul Volcker Calls for a New Bretton Woods conference Wall Street Journal Subscription Required
Seth Lipsky (WSJ) Jun 11, 2014
The world since the rule-based monetary system collapsed in the 1970s is not a pretty picture.

The European Central Bank’s House of Cards
Frank Hollenbeck (Mises Daily) Jun 11, 2014
The European Central Bank (ECB) recently imposed negative deposit rates and is preparing a form of quantitative easing (QE) to purchase asset backed securities, corporate bonds or possibly bailout bonds

New Global Housing Watch Throws Spotlight on Booms and Busts
IMF Survey Jun 11, 2014
The IMF’s new Global Housing Watch brings together housing market information to keep track of boom and bust cycles and to nudge policymakers to take early action to moderate housing booms.

China's Interest in Central and Eastern Europe
Valbona Zeneli (Globalist) Jun 11, 2014
The Middle Kingdom sets its eyes on Europe’s eastern half, to get a beachhead into Western Europe.

Japan: A Venetian Destiny?
John West (Globalist) Jun 11, 2014
Japan and Venice share a similar history, but Japan should change course before that history repeats itself.

Leaners of Last Resort
Barry Eichengreen (Project Syndicate) Jun 11, 2014
With Jeremy Stein’s return to his academic post at Harvard at the end of May, the US Federal Reserve Board lost its leading proponent of the view that monetary policy should be used to lean against financial excesses. In fact, monetary policy should be viewed as a last resort in this context, not as the first line of defense.

The Interest-Rate Enigma
Claudio Borio and Piti Disyatat (Project Syndicate) Jun 11, 2014
The prevailing view of today's ultra-low real interest rates in much of the world is that they largely reflects a fall in equilibrium, or “natural” rates, driven by changes in saving and investment fundamentals. But this explanation neglects the role of financial factors in pushing down real rates.

Democracy in Europe
Kemal Dervis (Project Syndicate) Jun 11, 2014
The struggle over who will preside over the European Commission has begun. But the real debate is not about the personalities involved; it is about the degree to which Europeans are prepared to create the shared political space that is needed to manage the monetary union and secure Europe’s global leadership role.

Rethinking Democracy
Dani Rodrik (Project Syndicate) Jun 11, 2014
What many call “liberal democracy” flourished only after the emergence of the nation-state and the popular upheaval and mobilization produced by the Industrial Revolution. With the nation-state now under stress from above and below, so is liberal democracy.

The Infrastructure Solution
Martin Baily and Robert Palter (Project Syndicate) Jun 11, 2014
Though the debate on infrastructure tends to focus on the need for creative financing, the real problem is not insufficient investment. Rather, the deterioration of the built environment reflects the world's fragmented approach to infrastructure planning, delivery, and operation.

Rust Belt Rising Foreign Affairs Subscription Required
Yuri M. Zhukov (FA) Jun 11, 2014
The economics behind eastern Ukraine's upheaval.

Grouchy EU bonds tell downbeat story Financial Times Subscription Required
Ralph Atkins (FT) Jun 12, 2014
Low borrowing costs should help nurture the eurozone’s nascent economic recovery, securing its longer-term stability, but how long can they last?

In Emerging Markets, What Scares Most Investors Entices Oppenheimer New York Times Subscription Required
Landon Thomas Jr (NYT) Jun 12, 2014
Mr. Leverenz, who runs America's largest emerging markets mutual fund at Oppenheimer Fund, believes that nations like China, Brazil, Russia and India are experiencing economic and social change that won't be reversed.

The US's dollar domination is coming to an end
Brian Caplen (The Banker) Jun 12, 2014
US fines on non-US banks for breaking the country's various sanctions is rankling the international community, and speeding up the rise of the renminbi and rouble as alternate trade currencies.

Leaders Weigh Climate, Economic Goals as Paris Deadline Approaches
Bridges, Volume 18, Number 21 Jun 12, 2014
National leaders from various countries have become increasingly vocal on domestic emissions reduction approaches in recent weeks, as the deadline to negotiate a new international climate deal draws ever nearer. The prime ministers of Australia and Canada jointly slammed carbon taxes and emissions trading schemes as viable solutions earlier this week, while US President Barack Obama and other officials have touted these as economically-sound ways to transition to cleaner energy sources and reduce emissions.

New Ukraine President Affirms Readiness to Ink EU Trade Pact
Bridges, Volume 18, Number 21 Jun 12, 2014
Ukraine President Petro Poroshenko took office this past weekend, immediately promising to sign a long-awaited trade deal with the European Union as soon as the latter approves the pact. The pledge came within days of a meeting of leaders from the Group of 7 industrialised countries in Brussels, where the coalition reaffirmed its readiness to impose further sanctions on Russia – including sectoral ones – should the crisis escalate further.

China to Nix Rare Earth Export Restrictions Following WTO Ruling
Bridges, Volume 18, Number 21 Jun 12, 2014
China is said to be planning to get rid of strict export quotas and duties on certain rare earth elements, media reports indicated late last week. The rumoured move comes shortly after a March 2014 ruling by a WTO dispute panel, which deemed these measures to be in violation of global trade rules and Beijing’s accession commitments.

African Union, EU Outline Priorities for Post-2015 Development Agenda
Bridges, Volume 18, Number 21 Jun 12, 2014
The African Union Commission and the European Union each released their respective priorities for the post-2015 development agenda last week, shortly after the circulation of a "zero draft" that would serve as a potential launching point for negotiating a set of Sustainable Development Goals (SDGs).

TPP: US, Japan Meet to Iron Out Automobile Trade Differences
Bridges, Volume 18, Number 21 Jun 12, 2014
US and Japanese trade officials met in Washington earlier this week in an effort to resolve some of their outstanding issues related to automobile trade, with just weeks until the next meeting of chief negotiators for the 12-country Trans-Pacific Partnership (TPP) Agreement.

Emerging Markets Face Tough Climb Back to Past Growth Levels
IMF Survey Jun 12, 2014
As the global environment turns less supportive and productivity gains of the last decade fade, growth in emerging markets will have to come from new engines, supported by a new wave of structural reforms, a new IMF study says.

It Is Lonely at the Top
Globalist Jun 12, 2014
Only 18 countries have more than a 1% share of the world’s total GDP.

China's Latest Bubble: Millionaires
William Pesek (Bloomberg View) Jun 12, 2014
China's millionaire bubble is dangerous for two reasons: it's widening the gap between rich and poor, and slowing the impetus for much-needed reforms.

It Takes a Village to Lower Inequality
Megan McArdle (Bloomberg View) Jun 12, 2014
Stronger communities can help close the bottom-to-middle inequality gap.

The Ivy Clique
Sami Mahroum (Project Syndicate) Jun 12, 2014
The relationships that are formed at elite universities are among the most influential in the world. As long as low-income countries are excluded from these social circles, they will remain unable to attract the resources they need to improve their international status and enhance their contribution to the global economy.

The IMF’s False Confession
Ashoka Mody (Project Syndicate) Jun 12, 2014
By apologizing for its criticism of Britain's dogged pursuit of fiscal austerity, the IMF has compromised on an economic principle that enjoys overwhelming academic support: The confidence “fairy” does not exist. And, by bowing to the UK’s pressure, the Fund undermined its only real asset – its independence.

Fiscal policy responses to crises: The social impacts
Carlos A. Vegh & Guillermo Vuletin (VoxEU) Jun 12, 2014
The question of whether fiscal policy should be pro- or countercyclical has become increasingly relevant during the recession. This column provides causal evidence from South American countries showing the success of countercyclical policy in improving social indicators of economic success, combined with correlative evidence from Europe. This represents a strike against the case for austerity-led growth.

The ECB's Bank Review: Kill the Zombies and Heal the Wounded
Ajai Chopra and Nicolas Véron (PIIE) Jun 13, 2014
The European Central Bank (ECB)'s comprehensive assessment of euro area banks has had an encouraging start. But complacency could still lead to another failed attempt to fix Europe's banks, with severe consequences.

A Win-Win-Win Solution for the Trans-Pacific Partnership
Adam S. Posen (Caixin/PIIE) Jun 13, 2014
The security tensions between China and the United States are spilling over rapidly into economic ones. Some outreach from both sides is required, not just to try to keep things from unnecessarily escalating, but to maintain the mutual benefits of the economic relationship.

Not So Exceptional After All
Bill Humphrey (Globalist) Jun 13, 2014
How the Netherlands provided the guidebook for America’s founding.

Mark Carney, the Ringo Starr of Central Banking
Mark Gilbert (Bloomberg View) Jun 13, 2014
Bank of England Governor Mark Carney will need every independent sinew in his body in the delicate balancing act of raising rates without trashing consumer confidence.

Economic Nationalism Endangers Indonesia
William Pesek (Bloomberg View) Jun 13, 2014
Indonesia presidential front-runner Joko Widodo's pledges to restrict foreign investment in Indonesian banks, review trade deals and raise mining taxes will do more harm than good in a nation that direly needs more inward investment.

China’s Trilemma
Yu Yongding (Project Syndicate) Jun 13, 2014
The Nobel laureate economist Robert Mundell showed that an economy can maintain two – but only two – of three key features: monetary-policy independence, a fixed exchange rate, and free cross-border movements of capital. But China is currently juggling all three – an act that is becoming increasingly difficult to sustain.

The Government as Venture Capitalist
Laura Tyson (Project Syndicate) Jun 13, 2014
Government cannot satisfy the demand for public goods and services alone. Its role should be akin to a venture capitalist, soliciting, supporting, evaluating, and scaling innovative strategies to address social problems.

Football in the time of protest
Nauro F Campos (VoxEU) Jun 13, 2014
The 2014 FIFA World Cup is upon us. This column argues that there will be plenty of partying, but also plenty of protests fuelled by the gross mismanagement and limited economic benefits from hosting the Cup. Stadia may be ready, but much planned infrastructure has already been abandoned. Indeed, rent-seeking may be one reason nations bid for the Cup. Since the returns to transportation infrastructure are higher in poor countries, the international community should work to stamp out corruption so that poor countries can continue to host mega-events like the World Cup.

Global value chain participation: Risks and opportunities
Gary Gereffi & Xubei Luo (VoxEU) Jun 14, 2014
The explosion of trade in intermediate goods has created new development opportunities, but many of the jobs at the bottom of global value chains are low-paid, insecure, and dangerous. This column argues that participation in global value chains brings risks as well as opportunities. The gains from ‘moving up the global value chain’ are not equally distributed – large, professional, high-tech firms with diversified export markets, and high-skilled workers with formalised contracts benefit the most.

The Promise of Modinomics Foreign Affairs Subscription Required
Arvind Panagariya (FA) Jun 14, 2014
How the new prime minister can bring back growth.

In search of house-price bubbles
Stefano Giglio, Matteo Maggiori & Johannes Stroebel (VoxEU) Jun 14, 2014
The existence of house-price bubbles and market efficiency are among the fundamental debates in finance, especially popular in current years. This column describes a recent test of one of the prominent models of bubbles, exploiting a unique feature of the housing markets in the UK and in Singapore. The results show that no infinitely lived bubble was present in these markets.

Shadows: risky business, global threat Financial Times Subscription Required
Jamil Anderlini (FT) Jun 15, 2014
Into the shadows: The first of an FT series investigates how China’s precarious shadow banking system could inflict severe damage on the world economy.

Time to focus a light on shadow banking Financial Times Subscription Required
Mark Carney (FT) Jun 15, 2014
The goal is to replace a system prone to excess and collapse with one that contributes to strong balanced growth.

Europe faces house of debt horrors Financial Times Subscription Required
Wolfgang Munchau (FT) Jun 15, 2014
The most likely trajectory is a long period of slow growth, low inflation and a threat of insolvency and political insurrection.

Prof Piketty’s r>g equation causes waves Financial Times Subscription Required
James Mackintosh (FT) Jun 15, 2014
The rallying cry of the professor’s supporters – that returns on capital will outpace the economy – matters not just in politics but for investors too.

The True Cost of Hidden Money New York Times Subscription Required
Jacques Lesliejune (NYT) Jun 15, 2014
A Piketty protégé’s theory on tax havens.

High-Frequency Trading Needs One Quick Fix
Andy Kessler (WSJ) Jun 15, 2014
Change Reg NMS Rule 611 to read 'best execution' instead of 'best price.'

The March of the Autocrats
Pankaj Mishra (Bloomberg View) Jun 15, 2014
The widespread craving for such efficacious GDP-boosters as Deng Xiaoping, Suharto and Augusto Pinochet wasn’t the happy ending many of us envisaged to the collapse of communism in 1989.

Why does inequality grow?
Coen Teulings (VoxEU) Jun 15, 2014
Income inequality has increased worldwide in recent years. This column discusses the role of technological progress, globalisation, and the liberalisation of labour-market institutions in this growing inequality. The liberalisation of labour market institutions has made labour markets more flexible and created many jobs. But beyond a certain point, the net effect of further liberalisation might be negative for society.

Taking another path Financial Times Subscription Required
Patrick Jenkins and Sam Fleming (FT) Jun 16, 2014
Six years after it helped spark the financial crisis, shadow banking offers potential benefits and challenges as it goes mainstream.

Safe shadow banks and sound savings Financial Times Subscription Required
Paul McCulley (FT) Jun 16, 2014
As with regular banking 100 years ago, the Fed is taking vital steps to turn informal banking into a public-private partnership.

China’s push to build a global currency Financial Times Subscription Required
James Kynge (FT) Jun 16, 2014
The political system relies on control while acceptance into global free markets needs liberalisation.

Fed still tinkering with the plumbing Financial Times Subscription Required
Tom Braithwaite (FT) Jun 16, 2014
Fed eyes ‘matched books’ where a bank will lend cash to hedge fund against its securities book and finance deal by borrowing cash against securities.

Time to take some chips off the table Financial Times Subscription Required
Mohamed El-Erian (FT) Jun 16, 2014
Central banks are trading possibility of immediate economic gains for a growing risk of financial instability later; investors should be prudent.

Don't Cry for Thee, Argentina Wall Street Journal Subscription Required
WSJ Jun 16, 2014
The Buenos Aires deadbeats lose 7-1 at the Supreme Court.

The Structures of Growth New York Times Subscription Required
David Brooks (NYT) Jun 16, 2014
What do you need to do to get better at something after you have gone through the early stages of making a lot of progress really quickly?

The Data Is Clear: Free Markets Reduce Poverty
D.W. MacKenzie (Mises Daily) Jun 16, 2014
Some Catholic clergy have, once again, denounced supporters of laissez-faire capitalism. Cardinal Oscar Rodriguez Maradiaga claims that the free market economy is “a new idol” which creates inequality, excludes the poor, and that “this economy kills.” Cardinal Maradiaga does not speak alone. He quoted Pope Francis in his recent remarks and claimed that since the Pope “grew up in Argentina,” he “has a profound knowledge of the life of the poor.”

China's Brewing Subprime Crisis
William Pesek (Bloomberg View) Jun 16, 2014
As home prices across China have fallen 10.2 percent by value in the first five months of this year, property developers are showing signs of panic.

The U.S. Should Heed the IMF's Advice
Mohamed A. El-Erian (Bloomberg View) Jun 16, 2014
The U.S. would benefit from even bolder criticism on the part of the International Monetary Fund.

Bond Vultures' Bet Against Argentina Pays Off
Noah Feldman (Bloomberg View) Jun 16, 2014
Today the Supreme Court handed a double defeat to the Republic of Argentina in its effort to default on sovereign bonds issued in 1994.

Culture: Persistence and evolution
Francesco Giavazzi, Ivan Petkov & Fabio Schiantarelli (VoxEU) Jun 16, 2014
The persistence of cultural attitudes is an important determinant of the success of institutional reforms, and of the impact of immigration on a country’s culture. This column presents evidence from a study of European immigrants to the US. Some cultural traits – such as deep religious values – are highly persistent, whereas others – such as attitudes towards cooperation and redistribution – change more quickly. Many cultural attitudes evolve significantly between the second and fourth generations, and the persistence of different attitudes varies across countries of origin.

The Age of Entropy Foreign Affairs Subscription Required
Randall L. Schweller (FA) Jun 16, 2014
Why the new world order won't be orderly.

Why clearing houses could bring chaos Financial Times Subscription Required
Simon JOhnson (FT) Jun 17, 2014
We have built them up as an officially sanctioned form of credit protection. No one feels good about where that had and could lead.

China will profit from feeding the world Financial Times Subscription Required
Ding Xuedong (FT) Jun 17, 2014
For the past 40 years, US farmland investments have outperformed stocks and bonds. Savvy investors have taken note.

Low interest rates unlikely to continue Financial Times Subscription Required
Andrew Smithers (FT) Jun 17, 2014
A look at the past raises doubts as to whether real rates and growth have been related.

Systemic risk worse than '08
Martin Hutchinson (AT) Jun 17, 2014
Since the crash of 2008, thousands of pages of financial regulations have been written and speeches bloviated about how we now understand the dangers of "too big to fail". Needless to say this is nonsense; systemic risk is worse now than it was in 2008.

Inequality and the Nature of Capital: A Reminder to Economists
Chandran Nair (YaleGlobal) Jun 17, 2014
Complaints about inequality have taken the West by storm, and that accounts for the success of the book “Capital in the Twenty-First Century” by economist Thomas Piketty. But inequality is not a new topic for developing nations.

Let Ireland Keep Its Tax Rates
Leonid Bershidsky (Bloomberg View) Jun 17, 2014
The biggest tax inversion deal in history should make U.S. legislators think about lowering the corporate tax burden rather than closing expatriation loopholes.

Argentina's Debts: US Supreme Court Sets New Ground Rules for Sovereign Debt Management Worldwide
Anna Gelpern (PIIE) Jun 17, 2014
On Monday, June 16, the US Supreme Court rang the curtain down on two key parts of the drama surrounding Argentina and its creditors, which had dragged on since the country's debt default in 2001. First, the Court refused to review decisions by the federal appeals court for the Second Circuit in New York, ordering Argentina to pay creditors holding defaulted bonds in full whenever it pays its new restructured bonds.

Is Greece Really Back?
Mohamed A. El-Erian (Bloomberg View) Jun 17, 2014
Greece's recovery hasn't been nearly as complete as markets suggest.

Who Won Europe?
Daniel Gros (Project Syndicate) Jun 17, 2014
The process of choosing the European Commission’s next president appears to be a conflict between the voice of the people, as expressed in last month’s European Parliament election, and backroom deal-making by governments. But reality is more complex, and the genuine democratic mandate did not go to the election's putative victor.

The Environment of Poverty
Bjørn Lomborg (Project Syndicate) Jun 17, 2014
Some of the world's most lethal killers stem from environmental problems, and poverty underpins many of them. So why does the world consciously choose to spend its aid money so ineffectively by devoting most of its environmental assistance to reducing greenhouse-gas emissions in developing countries?

The Development Costs of Homophobia
Adebisi Alimi (Project Syndicate) Jun 17, 2014
Development aid to governments that permit specific social groups to be ostracized can carry very real economic costs. As new loans are considered, steps should be taken to ensure that the benefits are as inclusive as possible.

Macro-stabilisation and tax rebates
Jonathan A. Parker (VoxEU) Jun 17, 2014
Governments around the world are searching for macro-stimulation instruments. This column discusses evidence showing that rebate-type payments policies generate substantial increases in demand for goods and services. In particular, a large portion of tax rebates are spent rapidly on arrival.

Regulators need firm principles and rules Financial Times Subscription Required
Paul Tucker (FT) Jun 18, 2014
As regulation becomes more stringent once again some of the substance of banking will inevitably re-emerge elsewhere.

Prudential policy is not everything Financial Times Subscription Required
Chris Giles (FT) Jun 18, 2014
Anyone thinking that curbs on risky mortgages are an alternative to higher interest rates is wrong.

Third arrow is more like 1,000 needles Financial Times Subscription Required
David Pilling (FT) Jun 18, 2014
Some of the Japanese leader’s jabs will do no good. A few may do harm. But at least some will have a positive impact.

Argentina in game of chicken over debt Financial Times Subscription Required
John Paul Rathbone (FT) Jun 18, 2014
Cristina Fernández has sworn never to succumb to the holdouts’ ‘extortion’. She must be seen to follow through on the pledge – even if she fails.

Brace for bond market bumps ahead Financial Times Subscription Required
Francesco Garzarelli (FT) Jun 18, 2014
A rebuilding of inflation expectations in the euro area and the anticipation of rate hikes in the US will lead to a steeper yield curve.

Why the U.S. Needs to Lift the Ban on Oil Exports Wall Street Journal Subscription Required
Daniel Yergin and Kurt Barrow (WSJ) Jun 18, 2014
Surprisingly, this will mean lower gas prices at the pump, and a greater supply of crude in an unstable world.

What Picketty forgot
Noel Ortega (FPIP) Jun 18, 2014
French economist Thomas Piketty's improbably popular opus of economic history, Capital in the Twenty-First Century, has been called the most important study of inequality in over 50 years. But because it fails to address the real limits on growth it can't be a roadmap for the next.

Chinese Premier Is Loaded for Bear
Jim O'Neill (Bloomberg View) Jun 18, 2014
"I can promise everyone honestly and solemnly, there won’t be a hard landing," Chinese Premier Li Keqiang says.

Fed Dishes Out Continuity
Mohamed A. El-Erian (Bloomberg View) Jun 18, 2014
The Fed's steady-as-she-goes approach, while expected, also is reassuring to markets.

Post-Crash Economics
Robert Skidelsky (Project Syndicate) Jun 18, 2014
Mainstream economics is in fact an ideology – the ideology of the free market. But the tools of economics, as currently taught, provide little scope for investigating the links between economists’ ideas and the structures of power.

Mexico’s Breakout Moment?
Mohamed A. El-Erian (Project Syndicate) Jun 18, 2014
Mexico has a good chance to realize its impressive structural-reform agenda. Doing so would give the rest of the world an important example of how such programs can be designed, implemented, and, most important, sustained until a critical mass of revitalized sectors – and thus faster growth and greater prosperity – is achieved.

India’s female economic participation
Piritta Sorsa (VoxEU) Jun 18, 2014
Female labour market participation in India is lower than in other emerging markets. This column discusses the dynamics and causes of this issue. Many women have dropped out of the labour market in the recent years, or work in low-paying jobs without social benefits and with large wage differentials. Raising female labour force participation could boost economic growth up to 2.4% with a package of pro-growth and pro-women policies.

Why standard macro models fail in crises
David F. Hendry & Grayham E. Mizon (VoxEU) Jun 18, 2014
Many central banks rely on dynamic stochastic general equilibrium models – known as DSGEs to cognoscenti. This column – which is more technical than most Vox columns – argues that the models’ mathematical basis fails when crises shift the underlying distributions of shocks. Specifically, the linchpin ‘law of iterated expectations’ fails, so economic analyses involving conditional expectations and inter-temporal derivations also fail. Like a fire station that automatically burns down whenever a big fire starts, DSGEs become unreliable when they are most needed.

Tell Narendra Modi: Human Development is More than GDP
Martha C. Nussbaum (Boston Review) Jun 18, 2014
India's new prime minister has won acclaim for driving economic growth. But his record on education and public health leaves a lot to be desired.

The Fed needs a big balance sheet Financial Times Subscription Required
Benjamin Friedman (FT) Jun 19, 2014
The central bank cannot sell what it does not own. The US Federal Reserve and other central banks should hold on to an ample supply of assets.

Beware central banks’ share-buying sprees Financial Times Subscription Required
Ralph Atkins (FT) Jun 19, 2014
With world stock markets hitting all-time highs, are central banks that are buying equities doing so at the top and encouraging others to follow?

Ruling on Argentina Gives Investors an Upper Hand New York Times Subscription Required
Floyd Norris (NYT) Jun 19, 2014
The ruling made it far less likely that genuinely troubled countries will be able to restructure their debts and increased the power of investors to prevent needed restructurings.

The Asset-Rich, Income-Poor Economy Wall Street Journal Subscription Required
Kevin Warsh and Stanley Druckenmiller (WSJ) Jun 19, 2014
The Fed's balance-sheet recovery hasn't stirred business investment, an opportunity killer for workers.

UN Climate Talks Shift to Negotiating Mode Toward 2015 Deal
Bridges, Volume 18, Number 22 Jun 19, 2014
The latest round of UN climate talks saw countries move into negotiating mode on some of the substantive details that will need to be hammered out over the next 18 months in order to successfully deliver a global climate deal by end-2015.

Argentina's Debts Aren't Just Argentina's Problem
Bloomberg View Jun 19, 2014
Investors have followed the news about Argentina's sovereign-debt case pretty calmly. Soon, they may have second thoughts.

What Will Argentina Do With Its Vultures?
Matt Levine (Bloomberg View) Jun 19, 2014
The trick to any negotiation is to act crazy to intimidate the other side. Well, the trick to some negotiations. Probably not that many.

Rebooting China
Michael Spence (Project Syndicate) Jun 19, 2014
Though China's government has expressed a willingness to accept slower growth for the sake of a more stable, sustainable economy, whether the decline will be temporary is not yet apparent. Ensuring that it is will require patience and discipline in domestic and foreign policy.

Iraq and the Oil Market
John Sfakianakis (FA) Jun 19, 2014
How much will prices rise?

An American Passion for Tyrants
David Rieff (NYRB) Jun 19, 2014
William Easterly, a former World Bank economist, argues that international development aid has not only failed since its inception to deliver on its promises, but is actually a trap for the world’s poor, whom he sees as the victims of those he calls “planners.”

The rise of the infrastructure giants
Bretton Woods Observer Summer Jun 20, 2014
World Bank’s infrastructure hegemony challenged in Asia.

Big banks & IMF: No structural reform
Bretton Woods Observer Summer Jun 20, 2014
The IMF rings more warnings about the costs of having an oversized financial sector, but fails to recommend stronger controls on the banking sector.

IMF Explores Ways to Strengthen Response to Sovereign Debt Distress
IMF Survey Jun 20, 2014
The IMF continues to consider ways to improve its lending policies for countries experiencing sovereign debt distress so that the costs of crisis resolution can be minimized for debtors, creditors, and ultimately the international financial system.

Why I Love High-Speed Trading
Clifford S. Asness (Bloomberg View) Jun 20, 2014
High-frequency trading often gets represented by people who don't understand how it works.

Europe's Worst Central Banker
Mark Gilbert (Bloomberg View) Jun 20, 2014
Polish central bank Governor Marek Belka has been caught on tape asking a government official to dismiss the finance minister. If he doesn't resign, the government should dismiss him.

What to Do When Governments Default
Mohamed A. El-Erian (Bloomberg View) Jun 20, 2014
Argentina's battle with creditors illustrates the coordination problems that arise when governments default on their debts.

China’s Real-Estate Wrongs
Yao Yang (Project Syndicate) Jun 20, 2014
With growth in China's real-estate prices easing, it seems that the government’s campaign to rein in property risk is finally taking hold. The danger now is that the housing market will collapse – bringing China’s economic prospects down with it.

Scottish independence in an interdependent world: New evidence
Andrew Hughes Hallett (VoxEU) Jun 20, 2014
The UK and Scottish governments are engaged in a set of parallel and overlapping games in the economic and political arenas. This column presents research that analyses how decisions about whether to cooperate over financial regulation, fiscal rules, and the choice of currency and monetary policy, will all have far reaching implications for a newly independent Scotland and the rest of the UK.

Central bank transparency and committee deliberation
Stephen Hansen, Michael McMahon & Andrea Prat (VoxEU) Jun 20, 2014
Central bank transparency is essential to democratic accountability. Central bankers often limit it – fearing its stifling effect on frank debate. Yet transparency may induce monetary policy committee members to be better prepared. This column discusses evidence showing that the ‘better prepared’ effect is important empirically. Exploiting a natural experiment in the Fed Open Market Committee in 1993 – and using computational linguistics tools to measure the impact of transparency on deliberation – the research shows that the net effect is a more informative deliberation process.

So Similar, So Different New York Times Subscription Required
Nicholas Kristof (NYT) Jun 21, 2014
Two women, both 20 and talented, have lives that are miles apart. Literally and otherwise, thanks to the lottery of birth.

Africa as a Global Test Case
Ludger Kühnhardt (Globalist) Jun 21, 2014
Has the time for a new global approach to Africa finally arrived?

‘The Consolations of Economics’, by Gerard Lyons Financial Times Subscription Required
Ferdinando Giugliano (FT) Jun 22, 2014
A riposte to those who argue the rise of emerging economies will cost the west dear underestimates the challenges ahead.

Role of banks recedes in wake of crisis Financial Times Subscription Required
John Authers (FT) Jun 22, 2014
Traditional banking roles are being usurped by the growth in crowdfunding, mobile payments systems and finance being provided by capital markets.

'Pikettymania' and Inequality in the U.S. Wall Street Journal Subscription Required
Alan S. Blinder (WSJ) Jun 22, 2014
The gap between top and bottom is clear. Not so clear is whether shaving the top is the best way to help the bottom.

Big Banks Kowtow to Beijing Wall Street Journal Subscription Required
L. Gordon Crovitz (WSJ) Jun 22, 2014
They are taking China's orders not to advertise in the independent press.

Is the Rupee Fairly Valued?
Martin Kessler and Arvind Subramanian (Business Standard/PIIE) Jun 22, 2014
Is the rupee fairly valued? Should the Reserve Bank of India (RBI) allow it to appreciate beyond the current rate of 60 rupees to the dollar? These are important policy questions, and will remain so, if a Modi effect continues to dominate investor sentiment in the months ahead and attracts large amounts of foreign capital into India.

Credit ratings and regulatory risk weights
Harold Cole & Thomas F Cooley (VoxEU) Jun 22, 2014
In the aftermath of the sub-prime crisis, the major credit rating agencies have been criticised for giving overly generous ratings to mortgage-backed securities. Whereas many commentators have blamed the ‘issuer pays’ market structure for distorting incentives, this column argues that the key distortion came from regulators’ use of private ratings to assign risk weights. This induced investors to focus on the risk weights attached to ratings rather than their information content, thus undermining the reputation mechanism that had previously kept ratings honest.

Robots will unleash our creativity Financial Times Subscription Required
Marc Andreessen (FT) Jun 23, 2014
In all the fear-mongering, people often forget the tech revolution has put the means of production within everyone’s grasp.

Finland is far from Europe’s best Financial Times Subscription Required
Risto Penttila (FT) Jun 23, 2014
The country’s plummeting productivity is partly down to bad luck – which came in the form of Steve Jobs – and bad policies.

Turmoil in Iraq Spells Trouble for Oil Markets Wall Street Journal Subscription Required
Gal Luft and Robert McFarlane (WSJ) Jun 23, 2014
The U.S. needs a strategy to insulate the global economy from ruinous energy shocks.

Shop till they drop
Ellen Brown (AT) Jun 23, 2014
Out-of-control central banks have taken to a corporate buying sprees, not to bail out the "too big to fail" bankrupt companies but as investments to offset bond income lost as a result of record-low interest rates. The development is all too alarming.

Slow-Growth China Is Already Here
Martin Hutchinson (Globalist) Jun 23, 2014
When China's recession comes, after decades of growth, the unrest will be considerable.

Living in the Republic of Samsung
William Pesek (Bloomberg View) Jun 23, 2014
The Organization for Economic Cooperation and Development issued a report last week on the structural weaknesses that threaten to undermine South Korea's economy. None looms larger than the chaebol.

Partial Progress in Rule Design for Orderly Failure of Cross-Border Banks
IMF Survey Jun 23, 2014
Policymakers around the world need to finish and implement their plans to deal with global banks when they fail, according to a new progress report from the International Monetary Fund.

More World Cup Goals, More Good Economic News
Jim O'Neill (Bloomberg View) Jun 23, 2014
The World Cup so far has delivered lots of goals and no outright favorite to win -- a bit like financial markets in recent weeks.

Africa’s Farms of the Future
Strive Masiyiwa (Project Syndicate) Jun 23, 2014
The recent explosion of Africa’s telecommunications sector demonstrates how the combination of effective incentives, high investment, and robust regulation can unleash a revolution. It is time to do the same for Africa's agricultural sector.

The Limits of Climate Negotiations
Jeffrey D. Sachs (Project Syndicate) Jun 23, 2014
Decarbonizing the world’s energy system requires that our production of vast and growing amounts of electricity does not boost atmospheric CO2 emissions, a zero-carbon transport fleet, and a lot more production per kilowatt-hour of power. These are mainly engineering problems, not negotiating problems.

Do capital controls deflect capital flows?
Paolo Giordani, Michele Ruta, Hans Weisfeld & Ling Zhu (VoxEU) Jun 23, 2014
Capital controls may help countries limit large and volatile capital inflows, but they may also have spillover effects on other countries. This column discusses recent research showing that inflow restrictions have significant spillover effects as they deflect capital flows to countries with similar economic characteristics.

Changes in migration policies after 1914
Drew Keeling (VoxEU) Jun 23, 2014
When nations declared war in 1914, migration policies changed. This column describes some of these changes and how they affected later migration incentives and patterns. Before 1914, migration had been peaceful and driven by market incentives. Since 1914, it has been shaped by politically determined quotas, legal restrictions, and flights from wars and oppression.

Bank of England: Crashing the party Financial Times Subscription Required
Sam Fleming and Chris Giles (FT) Jun 24, 2014
The central bank has a wide range of new tools designed to stop bubbles. Now they face their first test.

Defend Argentina from the vultures Financial Times Subscription Required
Martin Wolf (FT) Jun 24, 2014
A creditor paid more to take on the risk of a default cannot then be surprised by it.

The ‘best’ care might not keep us alive Financial Times Subscription Required
John Kay (FT) Jun 24, 2014
Spending above a base level in rich nations seems to have little effect mortality and morbidity - lifestyle matters more.

Beijing will run London’s renminbi trade Financial Times Subscription Required
Paola Subacchi (FT) Jun 24, 2014
A premature opening of the capital account could unleash damaging financial flows and undermine stability.

Don’t bank on a comfortable rate ride Financial Times Subscription Required
John Plender (FT) Jun 24, 2014
Conventional wisdom has it equilibrium or natural interest rates have fallen since the crisis, perhaps even on a permanent basis. But is it correct?

Shinzo Abe’s Bid to Shake Up Corporate Japan New York Times Subscription Required
Hiroko Tabuchi (NYT) Jun 24, 2014
A crosshatch of stock holdings allows Japan’s big corporations to protect one another from outside attempts to shake up management. The prime minister has taken aim at the practice.

China and the US: Destined to Cooperate?
Andrew Follett (Diplomat) Jun 24, 2014
Geography, economics, and energy will all push America and China closer together.

Europe’s Mario Draghi Now Starring in Bernanke’s Show
Brendan Brown (Mises Daily) Jun 24, 2014
Just as Professor Bernanke exits center stage at the end of Act I of the monetary comedy he created, the scene shifts to Frankfurt. The star of Act II is European Central Bank (ECB) chief Mario Draghi. As we pick up the story, Mr. Draghi has been launching a defense against a phantom threat of deflation.

China demand drives world gas growth
Michael Lelyveld (AT) Jun 24, 2014
Energy experts point to the arrival a "golden age" for natural gas in China, predicting that rising demand for cleaner-burning fuel will lead the world's growth in gas use over the next five years. The outlook is darker for the country's power sector, where cheap coal will still dominate as a fuel in 2019 and continue to choke cities with smog.

Don't Shortchange Short Sellers
Noah Smith (Bloomberg View) Jun 24, 2014
If we want stronger, less bubble-prone financial markets we short make it easier and less expensive for people short sell stocks.

A Trio of Economic Problems Haunting Europe
Mohamed A. El-Erian (Bloomberg View) Jun 24, 2014
A trio of economic problems -- and the weak policies perpetuating them -- may cause Europe to face a troubling economic future.

Emerging-Market Target Practice
Jeffrey Frankel (Project Syndicate) Jun 24, 2014
Since the currency crashes of the 1990s, emerging and developing countries have tended to anchor monetary policy in targets for consumer price inflation. But, given that these countries' central banks tend to miss their targets even more often than the advanced countries do, they ought to consider switching to a nominal-GDP anchor.

Free-Trade Pitfalls
Hans-Werner Sinn (Project Syndicate) Jun 24, 2014
The Transatlantic Trade and Investment Partnership, currently the subject of intense negotiations between the EU and the US, is making big waves. In order to ensure that the TTIP benefits consumers on both sides of the Atlantic, those negotiating it must recognize and avoid some key traps.

Splendid Isolation?
Richard Lambert and John Springford (Project Syndicate) Jun 24, 2014
British euroskeptics claim that EU membership has bound the UK economy by swaths of costly red tape to a bunch of moribund economies with no growth prospects. The facts, however, tell a very different story.

Global banks and liquidity risk transmission
Claudia M. Buch, James Chapman & Linda Goldberg (VoxEU) Jun 24, 2014
The international transmission of liquidity shocks is one of the key questions of banking globalisation. This column discusses a project of central bank researchers from around the world who have been exploring the role of global banks in the transmission of liquidity shocks. Using micro data from individual banks and applying common methodology are of individual interest. But more importantly, it allows us to detect common features of international bank and liquidity shock transmission.

Don't Shortchange Short Sellers
Noah Smith (Bloomberg View) Jun 24, 2014
If we want stronger, less bubble-prone financial markets we short make it easier and less expensive for people short sell stocks.

Comparative Advantage
Douglas M. Hodge (PIMCO) Jun 24, 2014
It’s been a remarkable turnabout. Just over a year ago, then-Fed Chairman Ben Bernanke introduced a five-letter word into our financial lexicon – “taper.” In the weeks that ensued, interest rates on 10-year Treasuries spiked 70 basis points. And whether it was the “Great Rotation” into stocks or the simple aversion to any form of interest rate risk, the seemingly insatiable appetite for bonds, most notably among individual investors, turned into apprehension as they rushed for the exits.

Hedge Fund vs. Sovereign Foreign Affairs Subscription Required
Felix Salmon (FA) Jun 24, 2014
How U.S. courts are upending international finance.

Indonesia: The political outsider Financial Times Subscription Required
Ben Bland (FT) Jun 25, 2014
As southeast Asia’s biggest economy prepares to elect a new president, many hope victory for Joko Widodo will consolidate its democracy and he will fix its finances.

Investors manic for ‘disrupter’ stocks Financial Times Subscription Required
Richard Bernstein (FT) Jun 25, 2014
Whereas speculative IPO markets often mirror overall stock market valuation, the current cycle’s speculation seems limited to a relatively narrow universe of stocks.

Q. and A.: William C. Kirby on 'Can China Lead?' New York Times Subscription Required
Didi Kirsten Tatlow (NYT) Jun 25, 2014
In the book “Can China Lead?”, three business school professors looked at the motors for and the constraints against greatness that China is experiencing. One of the authors, William C. Kirby, explains what they found.

Three Myths about the Ex-Im Bank
Caroline Freund (PIIE) Jun 25, 2014
Congress has begun holding hearings on the reauthorization of the US Export-Import Bank, which provides financing assistance to help US exports. TheEx-Im Bank's charter expires in September. Three myths are being perpetuated by the new House majority leader, Kevin McCarthy, and other conservatives who would like to see the Ex-Im Bank closed. Below these myths are considered in turn.

The central paradox of the 21st century
Tom Streithorst (Pieria) Jun 25, 2014
Our unheard of affluence as consumers, our precarious existence as workers both stem from the same source: inexorable productivity increases.

Banks Can Still Have Fun Prop Trading in Rates
Matt Levine (Bloomberg View) Jun 25, 2014
The Volcker Rule is not strong on internal coherence, so it can generate lots of semi-scandals.

Draghi and the Art of the Feasible
Mohamed A. El-Erian (Bloomberg View) Jun 25, 2014
Mohamed El-Erian analyzes the policy challenges facing ECB President Mario Draghi as he tries to spur economic growth in Europe.

Hard Truths About Europe’s Soft Power
Nick Witney (Project Syndicate) Jun 25, 2014
Europeans may be “postmodern,” but the rest of the world is not. Even a cursory glance at Europe’s neighborhood demonstrates the limitations of “soft” power and dispel hopes that emerging powers can be house-trained as “responsible stakeholders” in a Western-designed international system.

Income Inequality and Youth Unemployment
Mark Esposito (Project Syndicate) Jun 25, 2014
The public debate surrounding income and wealth inequality has focused on decreased social cohesion, growing slums, exploitation of labor, and pressure on middle-class households. But one effect has received relatively little attention: youth unemployment and underemployment.

Greek debt restructuring: Lessons learned
Miranda Xafa (VoxEU) Jun 25, 2014
The 2012 Greek debt restructuring was the largest one in the history of sovereign defaults. This column discusses the lessons from this historically unprecedented episode. Delaying the restructuring implied that externally held debt remained higher than it would have been otherwise. Supportive crisis management is necessary for smooth restructuring to take place in a currency union.

Low interest rates, secular stagnation, and debt
Claudio Borio & Piti Disyatat (VoxEU) Jun 25, 2014
Real interest rates have fallen to historic lows, and some economists are concerned that an era of secular stagnation has begun. This column highlights the role of policy frameworks and financial factors – particularly debt – in linking low real interest rates and sluggish economic growth. Policies that do not lean against booms but ease aggressively and persistently in busts induce a downward bias in interest rates over time and an upward bias in debt levels – something akin to a debt trap. Low real interest rates may thus be self-reinforcing and not always ‘natural’.

New World Order Recommended! Foreign Affairs Subscription Required
Erik Brynjolfsson, Andrew McAfee, and Michael Spence (FA) Jul 1, 2014
Labor, capital, and ideas in the power law economy.

Karachi: Under siege Financial Times Subscription Required
Victor Mallet and Farhan Bokhari (FT) Jun 26, 2014
The struggle against the violence in Pakistan’s commercial capital bodes ill for the country’s attempts to kick-start its spluttering economy.

An uneven recovery is no reason to relax Financial Times Subscription Required
Martin Wolf (FT) Jun 26, 2014
When interest rates rise in the UK they are likely to hit the economy harder than before, given the mountain of debt that households now bear.

Shine light on the sharks in dark pools Financial Times Subscription Required
Gillian Tett (FT) Jun 26, 2014
Simply relying on the principle of caveat emptor to keep the trading system from becoming too murky is naive, and regulators must act.

UN Group Reviews Sustainable Development Goals "Zero Draft"
Bridges, Volume 18, Number 23 Jun 26, 2014
The UN working group charged with formulating a proposed set of sustainable development goals (SDGs) met recently for its penultimate session in New York, with delegates for the first time considering a "zero draft" that will serve as a basis for the group's recommendations due out this summer.

Officials Float Potential TPP Target Dates Ahead of July Meeting
Bridges, Volume 18, Number 23 Jun 26, 2014
The 12 Pacific Rim countries negotiating a sweeping trade deal could have a document ready by the end of the year, US President Barack Obama said last Friday. Other officials, however, have been more cautious in their predictions, suggesting that 2015 might be a more likely scenario for clinching a Trans-Pacific Partnership (TPP) Agreement, in light of the domestic political climate in many countries and the various issues that remain unresolved.

Rethinking the Sino-American Relationship
Stephen S. Roach (Project Syndicate) Jun 26, 2014
In early July, senior US and Chinese officials will gather in Beijing for the sixth Strategic and Economic Dialogue. With bilateral frictions mounting on a number of fronts, the summit offers an opportunity for a serious reconsideration of the relationship between the world’s two most powerful countries.

Self-fulfilling Eurozone debt crises and the ‘Draghi put’
Marcus Miller & Lei Zhang (VoxEU) Jun 26, 2014
Like banks, indebted governments can be vulnerable to self-fulfilling financial crises. This column applies this insight to the Eurozone sovereign debt crisis, and explains why the ECB’s Outright Monetary Transactions policy reduced sovereign bond spreads in the Eurozone.

IMF issues stark tax-cheat warning
Carey L Biron (AT) Jun 27, 2014
A lack of harmonized global tax policies has allowed global corporations to indulge in widespread tax gaming, particularly hurting developing countries, staff at the International Monetary Fund say in a new paper that reform activists are branding 'revolutionary'.

Two Years Ago, Banking Union Was Euro Crisis Turning Point
Nicolas Véron (PIIE) Jun 27, 2014
Europe's banking union, constituting a supranational pooling of most instruments of banking policy, was established two years ago, in the early hours of June 29, 2012. To a greater extent than was initially realized by most observers, this step marked a watershed in the European crisis by making it possible for the European Central Bank (ECB) to stabilize sovereign debt markets. The banking union will also profoundly reshape and realign Europe's financial system and institutions, with consequences that will unfold gradually.

David Cameron Fights the Good Fight
Mohamed A. El-Erian (Bloomberg View) Jun 27, 2014
Mohamed El-Erian explores and defends David Cameron's aggressive efforts to reform appointment making at the European Commission, and says it's time for a similar reform stance toward the IMF and the World Bank.

Taking Systemic Risk Seriously
Simon Johnson (Project Syndicate) Jun 27, 2014
The nature of externalities means that financial firms do not care about the costs that they may create for others. Big and small firms can create a wide variety of externalities, and these have to be examined carefully and dispassionately – exactly as a growing number of US regulators are recommending.

Trade policy through 2013: Signs of improvement but new policy concerns
Chad P Bown (VoxEU) Jun 27, 2014
Temporary trade barriers have become more than an important bellwether for contemporary protectionism; with persistent tariff levels, they are now a primary obstacle to free trade. The World Bank’s newly updated Temporary Trade Barriers Database suggests that the Great Recession-era increases in import protection may be levelling off. Now policymakers begin to face the daunting task of dismantling all of those temporary barriers they imposed during the early phase of the crisis.

Shinzo Abe and the Three Magic Arrows
Andy Sirkis (Mises Daily) Jun 28, 2014
Despite claims to the contrary in the mass media, Japan’s economy is continuing to suffer mightily under the leadership of Prime Minister Abe Shinzo. Abe is from a famous family and he’s a convincing talker, so he was able to bamboozle people into believing that he could make Japan prosper with his three arrows. These metaphorical arrows stand for “monetary stimulus,” “fiscal stimulus,” and “structural reform.

The Open Drains of Latin America
Ricardo Hausmann (Project Syndicate) Jun 28, 2014
In developing countries, economic progress requires adapting technology that exists in other places, which necessitates engaging with those that have it. Characterizing these interactions as pure exploitation, rather than value-creating opportunities, has undermined the possibilities of many in Latin America and elsewhere.

New Hope for India
Martin Feldstein (Project Syndicate) Jun 28, 2014
The measures needed to stimulate economic performance in India will take time to implement and to produce results. But anyone who wants to judge whether the new government is acting effectively to achieve faster long-term growth should examine whether progress is being made in ten policy areas.

US economy: The productivity puzzle Financial Times Subscription Required
Robin Harding (FT) Jun 29, 2014
Long-term prosperity depends on the capacity of every American to increase output constantly. Can they?

Lethargic Europe needs investment jolt Financial Times Subscription Required
Wolfgang Munchau (FT) Jun 29, 2014
If you want to solve a demand problem, giving the banks more money for lending is surely not the answer.

Let Them Eat Cash New York Times Subscription Required
Christopher Blattman (NYT) Jun 29, 2014
Help the poor by giving them money. They won't waste it.

Inequality Is Not Inevitable New York Times Subscription Required
Joseph E, Stiglitz (NYT) Jun 29, 2014
Inexorable laws of economics aren't tearing us apart. Our policies are.

The business cycle, RIP?
Robert J. Samuelson (WP) Jun 29, 2014
Smoothing out the economy may bring long-term risks.

Revisionist powers drive world’s crises Financial Times Subscription Required
Gideon Rachman (FT) Jun 30, 2014
There has been no definitive break with the US-dominated global system yet China looks to be the challenger and, unlike Russia, it is a rising power.

Give geniuses reason to better our lives Financial Times Subscription Required
John Llewellyn (FT) Jun 30, 2014
It should not take a calamity to make us motivate inventors, engineers and scientists to unleash their talents to improve our lives.

A ‘third arrow’ will fell Japan’s demons Financial Times Subscription Required
Shinzo Abe (FT) Jun 30, 2014
We know that there can be no fiscal consolidation without economic revitalisation – which is why structural reforms are so important.

A Win-Win Possibility for China-U.S. Trade Wall Street Journal Subscription Required
Charlene Barshefsky and Long Yongtu (WSJ) Jun 30, 2014
Bilateral investment treaty talks on July 9-10 could pay big dividends.

Why Timid Reforms of Central Banks Won’t Work
Frank Hollenbeck (Mises Daily) Jun 30, 2014
The Federal Reserve System of central banking was a response to the financial panics of 1903 and 1907 that rocked the US financial system. One of the key objectives, if not the only real one, was to counterbalance the nefarious nature of fractional reserve banking. We now have experienced a century of living with a central bank and we must only conclude that it has failed as a counterbalance while making fractional reserve banking an even bigger, more nefarious master. The evidence is clear and reform of the system is not the answer. Only the abolition of this institution will begin to set our economic system on the right path.

Geopolitical Risks Cloud Future of Russian Economy
IMF Survey Jun 30, 2014
Russia’s economy continued its slow pace of growth in 2013, reflecting pre-existing structural problems and the fallout of geopolitical tensions with Ukraine.

Listen to the World's Central Bank
Leonid Bershidsky (Bloomberg View) Jun 30, 2014
Bank for International Settlements chief Jaime Caruana has renewed calls for tighter monetary policy. It's time his warnings were heeded.

A French Cure
Jean Pisani-Ferry (Project Syndicate) Jun 30, 2014
France is widely regarded as a country that has failed to embrace globalization or to modernize its economic and social model. Can it map out a way forward and rebuild prosperity?

The World’s Central Banker
J. Bradford DeLong (Project Syndicate) Jun 30, 2014
Those who fear that the Federal Reserve's monetary approach has greatly deepened the US economy’s malaise have lost the domestic policy argument. But there is another policy argument that needs to be joined, because the Fed's responsibility is global in nature.

The Lawless Sea
Andrés Velasco (Project Syndicate) Jun 30, 2014
The ocean is our planet’s life-support-system, keeping it healthy and productive. But overfishing and pollution are causing tremendous damage, and there is virtually no governance or rule of law to prevent it.

Abe’s Bullseye
Koichi Hamada (Project Syndicate) Jun 30, 2014
Over the last 18 months, the first and second "arrows" of Abenomics – expansionary monetary and fiscal policies – have achieved considerable success in spurring Japan’s economic renewal. Now it is time for Abe to launch his third and final arrow: an ambitious reform package focused on reducing barriers to growth for businesses.

Escaping the Bear Hug
Merkhat Sharipzhan (Project Syndicate) Jun 30, 2014
Three former Soviet republics – Georgia, Moldova, and Ukraine – have now signed association agreements with the European Union, despite Russia’s sometimes brutal attempts to obstruct the process. It would be naive to think that Russia will give up so easily.

Housing capital and Piketty’s analysis
Odran Bonnet, Pierre-Henri Bono, Guillaume Camille Chapelle & Étienne Wasmer (VoxEU) Jun 30, 2014
Thomas Piketty’s claim that the ratio of capital to national income is approaching 19th-century levels has fuelled the debate over inequality. This column argues that Piketty’s claim rests on the recent increase in the price of housing. Other forms of capital are, relative to income, at much lower levels than they were a century ago. Moreover, it is rents – not house prices – that should matter for the dynamics of wealth inequality, and rents have been stable as a proportion of national income in many countries.

Ukraine’s Own Worst Enemy Foreign Affairs Subscription Required
Tom Keatinge (FA) Jul 31, 2014
Why corruption is more dangerous than Putin.

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