News & Commentary:

Articles/Commentary

China's stimulus sceptics need not fear side-effects this time
Jianguang Shen (FT) Jun 1, 2020
The country faces a different and more urgent challenge to the one it faced in 2008.

Delisting Chinese companies plays into their hands
Jesse Fried (FT) Jun 1, 2020
Controlling shareholders and Beijing are likely to exploit a ban to further their objectives.

A return to the Licence Raj will stall India's reopening
Stephanie Findlay (FT) Jun 1, 2020
The pandemic has become an unwelcome flashback to the red tape and slow growth of the past.

Poor Countries Face a Debt Crisis 'Unlike Anything We Have Seen'
Mary Williams Walsh and Matt Phillips (NYT) Jun 1, 2020
Dozens of countries that borrowed from private investors have debt payments coming due as their economies have crashed because of the coronavirus.

US, China and global rebalance
Philip S Golub (LMD) Jun 1, 2020
Covid-19 has sharply slowed the global economy, forcing the great powers to review industrial and trade strategies. The US and many other countries are trying to reduce their supply dependence on China.

Brazil's Crisis Stokes Iron Ore's Glow
Clara Ferreira Marques (Bloomberg View) Jun 1, 2020
Threats to supply from the pandemic are combining with China's recovery to lift prices. Don't expect an early reversal.

The U.S. Gets Serious About Catching Up to China in R&D
Noah Smith (Bloomberg View) Jun 1, 2020
Legislation would devote $20 billion a year to building new research centers around the country.

Saving the Most Vulnerable from COVID-19
Simon Johnson, Galit Alter, Tess Cameron, and Michael Mina (Project Syndicate) Jun 1, 2020
Much emphasis has been placed on building lab capacity for polymerase chain reaction tests, the gold standard for detecting the COVID-19 virus. But such a strategy is unlikely to prove politically and financially sustainable. And too many people would still die.

Europe's Non-Hamiltonian Muddle
Nouriel Roubini and Brunello Rosa (Project Syndicate) Jun 1, 2020
Although any joint EU action should be welcomed, the current COVID-19 response plan hardly amounts to a radical break with business as usual. Far from a long-awaited embrace of debt mutualization, the newly proposed European recovery fund risks being both politically unpalatable and economically inadequate.

How to Reset the US Pandemic Response
Roman Frydman and Gernot Wagner (Project Syndicate) Jun 1, 2020
Whether the problem is COVID-19 or climate change, the market on its own will not produce a sufficient quantity of goods – like masks, vaccines, or environmentally sustainable growth – that benefit society. Capitalizing on America's private-sector dynamism will require the state to create incentives to produce such "social goods."

What the G20 Should Do Now
Ngozi Okonjo-Iweala , Erik Berglöf, Helen Clark, and Gordon Brown (Project Syndicate) Jun 1, 2020
Without further G20 action, the pandemic-induced recession will only deepen, hurting the world's poorest and most marginalized people the most. Because the group represents 85% of global GDP, it has the capacity to mobilize resources on the scale required – and its leaders must do so immediately.

Graphing the Pandemic Economy
Michael Spence and Chen Long (Project Syndicate) Jun 1, 2020
In a fast-evolving crisis like a pandemic, GDP and other conventional economic metrics are simply too slow to be useful for policymakers who need to make decisions about when to lock down and reopen parts of the economy. Fortunately, real-time mobility data has opened a window into the world that COVID-19 has wrought.

The lasting scars of the Covid-19 crisis
Jonathan Portes (VoxEU) Jun 1, 2020
Both economists and policymakers have highlighted the danger that the short-term measures taken to limit the spread of Covid-19 could lead to lasting economic damage. This column identifies and discusses five conceptually separate channels that could lead to such 'scarring' and attempts a very rough quantification of the potential impacts in both the short to medium term and longer term. Policy will eventually need to 'pivot' from helping firms survive and preserving jobs to helping workers into new jobs.

On the relationship between automation technologies and skilled labour
Masayuki Morikawa (VoxEU) Jun 1, 2020
The impact of new automation technologies on the labour market has attracted the attention of researchers and policymakers. This column presents new survey-based evidence on the complementarity between automation technologies and human skills. The proportion of high-skilled workers is higher in firms using AI and big data technologies, but lower in those using robots. The Covid-19 shock may have long-lasting impacts on the structure of the labour market through the diffusion of new automation technologies.

China and the COVID-19 Debt Crunch
Hannah Ryder (Diplomat) Jun 1, 2020
Is relief from China the answer to the debt woes of COVID-19?

The Great Unequalizer
Mohamed A. El-Erian and Michael Spence (FA) Jun 1, 2020
The pandemic is compounding disparities in income, wealth, and opportunity.

How Taiwan Can Turn Coronavirus Victory Into Economic Success
Evan A. Feigenbaum and Jeremy Smith (FP) Jun 1, 2020
Taiwan beat the virus with efficient government and advanced technology—the same ingredients that power the economy.

Why Erdogan Won't Ask the IMF for Help
Aykan Erdemir and John A. Lechner (FP) Jun 1, 2020
Turkey's economy is a mess, but its president won't seek an IMF loan because the conditions would mean giving up his extensive patronage network.

The Political Economy of Economic Policy
Jeffry Frieden (F&D) Jun 1, 2020
We should pay closer attention to the interactions between politics, economics, and other realms.

The Long Economic Hangover of Pandemics
Òscar Jordà, Sanjay R. Singh, and Alan M. Taylor (F&D) Jun 1, 2020
History shows COVID-19's economic fallout may be with us for decades.

Reckoning with Systemic Hazards
Ann Florini and Sunil Sharma (F&D) Jun 1, 2020
The 21st century is set to be one of massive disruptions that pose serious threats to society.

On Central Bank Independence
Paul Tucker (F&D) Jun 1, 2020
The author of Unelected Power discusses constitutionalist central banking in a world of inert politics.

Lifelines in Danger
Antoinette Sayeh and Ralph Chami (F&D) Jun 1, 2020
The COVID-19 pandemic threatens to dry up a vital source of income for poor and fragile countries.

The Devil Is in the Details
Era Dabla-Norris and Aleksandra Zdzienicka (F&D) Jun 1, 2020
If properly designed, tax-based fiscal consolidation does not have to be politically costly.

Caught by a Cresting Debt Wave
M. Ayhan Kose, Franziska Ohnsorge, Peter Nagle, and Naotaka Sugawara (F&D) Jun 1, 2020
Past debt crises can teach developing economies to cope with COVID-19 financing shocks.

For Johnson, Covid-19 is now an economic crisis
Robert Shrimsley (FT) Jun 2, 2020
For all the talk of 'following the science', the decisions have always been political.

Three good reasons not to dabble in negative interest rates
Huw van Steenis (FT) Jun 2, 2020
The evidence that this policy tool works is too weak to justify the risks.

There are risks to liquidity from rock-bottom rates
Robert Armstrong (FT) Jun 2, 2020
Despite vanishing yields, money market funds provide vital flexibility.

Why Wall Street is calm in the face of US unrest
Michael Mackenzie (FT) Jun 2, 2020
Investors can point to history for examples of stock market rallies through social upheaval.

The economics of America's civil unrest
Spengler (AT) Jun 2, 2020
High consumption and low savings helped set the stage for the explosion of violence across America.

Triple-funding whammy stalks emerging markets
Brian Caplen (Banker) Jun 2, 2020
What can banks and fintechs do to lower the costs of sending remittances as emerging markets face economic meltdown?

The EU's Recovery Budget: How Prominent is International Development?
Mikaela Gavas and Anita Käppeli (CGD) Jun 2, 2020
What's changed since the last iteration of the MFF?

How the Great Lockdown Saved Lives
Pragyan Deb, Davide Furceri, Jonathan D. Ostry and Nour Tawk (IMF) Jun 2, 2020
The Great Lockdown, despite its enormous short-term economic costs, has saved hundreds of thousands of lives.

The Independence of the Central Bank at Risk
Peter Bofinger, Martin Hellwig, Michael Hüther, Monika Schnitzer, Moritz Schularick and Guntram B. Wolff (Bruegel) Jun 2, 2020
The ruling of the German Federal Constitutional Court (GFCC) of May 5 on the ECB's monetary policy affects not only the relation of Germany to the European Central Bank (ECB) and the Court of Justice of the European Union (ECJ) but also the constitutional foundations of monetary policy.

How Businesses Can Navigate the Minefield of Social Unrest
Kara Alaimo (Bloomberg View) Jun 2, 2020
Sincere messages of support, paired with well-placed donations and changes to corporate practices, can help companies get through the chaos unscathed.

Japan's Banking Minnows Swim in Risky Waters
Nisha Gopalan (Bloomberg View) Jun 2, 2020
For Shinsei and Aozora, a global pandemic may not be the best time to consider striking overseas deals.

It's Time to Kill This Deficit Bogeyman
Daniel Moss (Bloomberg View) Jun 2, 2020
Australia's historical obsession with balancing the budget puts at risk the good work its central bank has done to restore the economy.

Stocks' Extreme Disconnect Demands a Perfect V
John Authers (Bloomberg View) Jun 2, 2020
There's a way to make sense of this rally, as long as there's a swifter economic recovery than anyone thinks possible.

Take China's U.S. Farm Threats Seriously, Not Literally
David Fickling (Bloomberg View) Jun 2, 2020
Curbing imports has been a tried-and-tested way of turning the diplomatic screws. But all is not lost for American producers.

The Planet After the Pandemic
André Hoffmann (Project Syndicate) Jun 2, 2020
Unlike previous recent disease outbreaks, COVID-19 has spurred unprecedented state intervention, with governments worldwide developing and implementing comprehensive recovery strategies. This provides a golden opportunity to entrench environmental protection and restoration in our economic systems.

What the G20 should do now
Erik Berglöf, Gordon Brown, Helen Clark, and Ngozi Okonjo-Iweala (VoxEU) Jun 2, 2020
Our world is at a critical moment. May 30th saw the highest daily figure recorded worldwide for new cases of COVID-19, with countries on every continent attempting to stop the transmission of the virus and save lives. In this letter to world leaders, more than 230 former world leaders and leading global health experts and economists underline the urgency of addressing the medical emergency and providing debt relief to the poorest countries and more resources to the international financial institutions delivering immediate relief to countries facing the effects of an unprecedented, global crisis. They also call for the global health and financial architecture to be further strengthened, and in parts redesigned, to enhance our preparedness and capacity to act with speed and at scale to fight future crises.

The U.S. Election Will Determine Assad's Future
Iyad Yousef (FP) Jun 2, 2020
Washington's approach to Syria won't change, but divergent approaches to Iran could have an indirect effect on the Syrian economy—and the Assad regime.

Poorer countries need long-term economic help
FT View Jun 3, 2020
International support has staved off a financial crisis, but should go much further.

Public equity markets are flagging when we need them the most
Anne Richards (FT) Jun 3, 2020
Governments should broaden opportunities for people to own stakes in the Covid recovery.

The EU rises to meet the Covid-19 crisis
Martin Wolf (FT) Jun 3, 2020
A radical plan from Germany and France transforms Europe's possibilities.

Are we heading into another Depression?
Various (FT) Jun 3, 2020
Economists and analysts give their views on the global economy as countries relax coronavirus lockdowns

Unrigging the Poverty Trap
WSJ Jun 3, 2020
What do struggling workers lose when they make an extra buck?

Dollar demand at 2-month low as Covid fades, yuan stable
Uwe Parpart (AT) Jun 3, 2020
With much of the world returning to work dollar demand is receding rapidly.

Covid-19 and emerging economies: What to expect in the short- and medium-term
Alicia García-Herrero (Bruegel) Jun 3, 2020
As Brazil, Russia, India and Mexico record the fast spread of the Covid-19 contagion, a third wave of the pandemic is reaching the emerging world. As a result, business sentiment has decreased in March and April in the region. What's more, as emerging economies gradually moved towards tighter mobility restrictions, the lack of mobility is set to weigh on the economic outlook. In fact, the International Monetary Fund (IMF) is expecting the emerging world to enter a recession of -1 percent in 2020, which could be worse than the aftermath of the global financial crisis in 2008.

The Great Reset
Kristalina Georgieva (IMF) Jun 3, 2020
First, let me first talk about green growth. Second, let me talk about smarter growth. And that takes me to my third point—fairer growth.

Courage under Fire: Policy Responses in Emerging Market and Developing Economies to the COVID-19 Pandemic
Martin Mühleisen, Vladimir Klyuev, and Sarah Sanya (IMF) Jun 4, 2020
A whole new world.

The Most Hated Rally in History Just Won't Stop
John Authers (Bloomberg View) Jun 3, 2020
This 10-week-old upswing may have already taken the mantle from the post-2009 bull market.

Taxation Can Be Done Right in Post-Pandemic World
Lionel Laurent (Bloomberg View) Jun 3, 2020
The fight over how to pay for the recovery has begun, and it will spill over into geopolitics and cross-border trade.

The Mighty U.S. Dollar Is Having a Wobble
Marcus Ashworth (Bloomberg View) Jun 3, 2020
Maybe it's time for the Fed to rein in the unlimited stimulus.

Big Job Gains Are Coming, But Not Yet and Not Enough
Conor Sen (Bloomberg View) Jun 3, 2020
As the country slowly ends lockdowns, businesses in coming months will need to hire back millions of workers.

Argentina's Good Behavior Won't Deliver It From Economic Pain
Mac Margolis (Bloomberg View) Jun 3, 2020
Constructive debt talks are just a prelude to hard policy choices.

Time for a Great Reset
Klaus Schwab (Project Syndicate) Jun 3, 2020
Tragedy need not be the only legacy of the COVID-19 crisis. On the contrary, the pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future.

A COVID-19 Response for the World's Poor
Erik Berglöf, Gordon Brown, Helen Clark, and Ngozi Okonjo-Iweala (Project Syndicate) Jun 3, 2020
The poorest countries in Africa, Asia, and Latin America are facing pandemic-induced economic and public-health emergencies that demand immediate action. G20 leaders therefore must agree now on measures to prevent the current recession from deepening, and to mitigate its impact on the world's most vulnerable people.

Deglobalization Will Hurt Growth Everywhere
Kenneth Rogoff (Project Syndicate) Jun 3, 2020
Even if the United States turns a blind eye to deglobalization's effects on the rest of the world, it should remember that the current abundant demand for dollar assets depends heavily on the vast trade and financial system that some American politicians aim to shrink. If deglobalization goes too far, no country will be spared.

From Riots to Reform in America
Jorge G. Castañeda (Project Syndicate) Jun 3, 2020
Mass protests and rioting following the killing of yet another African-American by a white police officer have compounded multiplying crises in the United States. Between the COVID-19 pandemic, a looming economic depression, and persistent racism, the American social contract has never been in more need of reform.

Human Mobility Restrictions and the Spread of the Novel Coronavirus (2019-nCoV) in China
Hanming Fang, Long Wang, and Yang Yang (VoxChina) Jun 3, 2020
We provide a rigorous examination of the causal impact of human mobility restrictions, particularly the lockdown of the city of Wuhan on January 23, 2020, on the containment and delay of the spread of the Novel Coronavirus (2019-nCoV) in China. We employ various difference-in-differences strategies to disentangle the lockdown effect on human mobility reductions from other confounding effects, including a panic effect, a virus deterrence effect, and a Spring Festival effect. We find that the lockdown of Wuhan significantly reduced the within-city movements and cross-city migration with Wuhan, and the enhanced social distancing policies in the 63 Chinese cities outside Hubei province have been effective in containing the spread of the novel coronavirus. We also estimate that, had the government not enacted the historic lockdown of the city of Wuhan, the COVID-19 cases in China would be 64.81% higher in the 347 Chinese cities outside Hubei province, and 52.64% higher in the 16 non-Wuhan cities inside Hubei.

Coronavirus credit support: Don't let liquidity lifelines become a golden noose
Çagatay Bircan, Ralph De Haas, Helena Schweiger, and Alexander Stepanov (VoxEU) Jun 3, 2020
As lockdown measures continue, or are relaxed only gradually, many small businesses continue to experience significantly reduced turnover. This column reports on a firm-level analysis across 16 emerging markets, and three Western European comparator countries, in order to gauge the potential risks associated with debt-driven COVID-19 support. The overall goal is to prevent a wave of bankruptcies that could break valuable relationships between firms and their suppliers and employees. However, liquidity support in the form of additional bank lending may create debt-overhang problems in the future and therefore requires careful targeting.

Social networks and consumption patterns during a pandemic
Christos Makridis and Tao Wang (VoxEU) Jun 3, 2020
Aggregate consumption has seen an unprecedented drop as a consequence of COVID-19 and the resulting lockdowns. Rather than focus on ways that specific policies or the spread of the virus have altered consumption patterns during the pandemic, this column explores the impact of social networks. Combining card transaction data with indices of social connectedness from Facebook shows that a 10% increase of infections in socially connected counties is associated with a 0.64% decline in local consumption expenditures, suggesting that social networks can sharply amplify the effects of an underlying shock.

Flattening the pandemic and recession curves
Pierre-Olivier Gourinchas (VoxEU) Jun 3, 2020
Public health policy, at least in all semi-decently run countries, has aimed to 'flatten the Covid-19 curve' by imposing drastic social distancing measures and promoting health practices to reduce the transmission rate. This column, taken from a VoxEU eBook, explains how, in the short run, flattening the infection curve inevitably steepens the macroeconomic recession curve. Fortunately, economic policy can act decisively to also flatten this curve.

Who benefits from trade liberalisation? A case from Japan
Youngmin Baek, Kazunobu Hayakawa, Kenmei Tsubota, Shujiro Urata, and Kenta Yamanouchi (VoxEU) Jun 3, 2020
Anti-globalisation sentiment has been spreading around the world in recent years. Since trade liberalisation is one of the representative characteristics of globalisation, investigating who benefits from it, and to what extent, can be an important starting point in analysing the causes of anti-globalisation sentiment and promoting liberalisation. This column explains how the rent from trade liberalisation, in the form of tariff reductions, is distributed among foreign producers, wholesalers, and consumers by investigating the tariff pass-through for each player.

The South Korean Economy: An Update
Michael Pugliese and Hop Mathews (WF Research) Jun 3, 2020
On March 5, we published a report examining the South Korean economy in the context of its COVID-19 outbreak. In this report, we look at how the South Korean economy has fared since early March as well as the country's economic outlook.

Global Mobility Report
Jay H. Bryson, Mike Schumacher, Zachary Griffiths, and Erik Nelson (WF Research) Jun 3, 2020
In this weekly report, we use data from Apple and Google to track mobility to various destinations and by various modes of transportation in selected large economies.

Taking stock: Continental vs. global value chains
Jochen Moebert (DB Research) Jun 3, 2020
As a consequence of the COVID-19 crisis continental value chains could gain in importance. Our network analysis illustrates the global trade network pre-COVID-19. We depict the global trade network of 90 countries as well as the most important intracontinental trade relationships. Trade links between Asian and American countries seem especially vulnerable to a reorganization of global value chains.

An Asian strategy for recovery and reconstruction after COVID-19
Various (EAF) Jun 3, 2020
A compact for multilateral cooperation between Asian nations can be the starting point.

Three compass points for an EU-China policy
Philip Stephens (FT) Jun 4, 2020
Europe is nothing without its commitments to human dignity, democracy and the rule of law.

Investors should prepare for a welcome return of inflation
Rob Burnett (FT) Jun 4, 2020
The forces driving the disinflation of the past 40 years appear to be in retreat.

Pandemic exposes Europe's reliance on imports
Ben Hall (FT) Jun 4, 2020
Growth of global supply chains means shocks can ripple across economies.

The ECB Never Says Never
WSJ Jun 4, 2020
The eurozone's central bank delivers more stimulus. Hurray?

How Financial Institutions Can Help America Heal
Rodney E. Hood (WSJ) Jun 4, 2020
Tools to pay for education and build wealth should be more widely available.

As risk-off mode sets in, dollar decline halts, yuan steady
Uwe Parpart (AT) Jun 4, 2020
Chinese currency likely to weaken before the strength of China's economy kicks in to lift it.

China leads world economic recovery
David P. Goldman (AT) Jun 4, 2020
Analysts are surprised that a Caixin survey of service industries shows clear signs of expansion.

The pandemic is hurting China's Belt and Road Initiative
Economist Jun 4, 2020
How will Xi Jinping's biggest project survive?

Is there a role for options insurance in equity portfolios?
Economist Jun 4, 2020
Nassim Taleb and Cliff Asness, two high-level thinkers on finance, disagree.

More World Bank Borrowers Will Need Grants, Not Loans. As a Result, More World Bank Donors Will Need to Pony Up
Scott Morris, Clemence Landers and Alysha Gardner (CGD) Jun 4, 2020
In a previous blog, we noted that IDA, the World Bank's lending arm for poor countries, has an important mechanism for providing relief to low-income countries facing debt distress. Rather than providing relief on repayments from existing loans, IDA's debt sustainability framework adjusts future financing from loans to grants for countries at high risk of debt distress. As some have called on the World Bank to join the G20 debt repayment standstill, we argued that it is better to ensure a positive "net flow" of resources to IDA countries, which relies in part on the flow of grant resources to countries the Bank has deemed unable to take on new debt. But what happens to IDA's loans-to-grants model when a large number of IDA countries trigger the risk thresholds? Can IDA afford its commitment to debt sustainability?

COVID 19: Assessing the Global Political Fallout
Holger Schmieding (Globalist) Jun 4, 2020
The COVID 19 pandemic and the ensuing mega-recession may shape political debates and choices for a long time.

The Brexit Regulatory Bonfire Begins...in the EU
Lionel Laurent (Bloomberg View) Jun 4, 2020
U.K.-led restrictions on investment research are being picked apart on the continent. It may be too little, too late.

What the Fed Can Do to Speed the Recovery
Narayana Kocherlakota (Bloomberg View) Jun 4, 2020
Put a cap on long-term interest rates.

The Weird and Not-So-Wonderful World of Asian QE
Daniel Moss (Bloomberg View) Jun 4, 2020
Central banks are doing everything they can to revive growth. But blurring the line with fiscal spending comes with risks.

Too Much Uncertainty? The World Has Always Been Like This
Barry Ritholtz (Bloomberg View) Jun 4, 2020
What's changed is that many of the self-delusions we use to cope have broken down.

Italy's Bond Investors Have a New Heroine
Marcus Ashworth (Bloomberg View) Jun 4, 2020
Christine Lagarde's massive pandemic response at the ECB is mitigating the economic fallout of Covid-19. So far, she's deserving of high marks.

Education Is Crucial to Africa's COVID-19 Response
Jean-Marc Bernard, Brahima Coulibaly, and Rebecca Winthrop (Project Syndicate) Jun 4, 2020
COVID-19 has presented African policymakers with a barrage of difficult choices. But if governments continue to invest in education alongside health, social protection, and economic-recovery initiatives, they will bolster young people's wellbeing and enhance the welfare of families, communities, and countries.

So far, so good: And now don't be afraid of moral hazard
Charles Wyplosz (VoxEU) Jun 4, 2020
Within a few days of the publication of the first Vox eBook on Covid-19, the authorities came up with a raft of decisions that were coherent with the economists' analyses. But there is a risk that moral hazard considerations derail the policy responses. This column, taken from the second Covid-19 eBook, argues that casting moral hazard aside will be the acid test of the ability of member countries of the euro area to coordinate in a meaningful way when needed.

The Endangered Asian Century
Lee Hsien Loong (FA) Jun 4, 2020
America, China, and the perils of confrontation.

Merkel leads a bolder eurozone crisis response
FT View Jun 5, 2020
ECB shows its resolve after Berlin's well-designed stimulus plan.

The risks of lifting lockdowns prematurely are very large
Martin Wolf (FT) Jun 5, 2020
The UK entered the lockdown too late and is now leaving too early.

The economy won't snap back after Covid-19
Tim Harford (FT) Jun 5, 2020
Activities that were already marginal are likely to struggle to return.

Wealthy investors ride the storm
Stefan Wagstyl (FT) Jun 5, 2020
The rich have a more optimistic financial outlook than those who manage their money.

The Economy Rises From the Dead
WSJ Jun 5, 2020
The job market heals faster than expected as the lockdowns ease.

The US unemployment rate is higher than it looks—and is still high if all furloughed workers returned
Jason Furman and Wilson Powell III (PIIE) Jun 5, 2020
The official unemployment rate rose from 3.5 percent in February 2020 to 13.3 percent in May (down from its value in April). Even this very large official increase understates the increase in the unemployment rate from a historically-comparable perspective because it counts an extra 4.9 million people who were "not at work for other reasons" as employed and also because 6.3 million people have left the labor force since February, more than would be expected even conditional on this large increase in unemployment. Adjusting for these factors our "realistic unemployment rate" was 17.1 percent in May, down from the April value but still higher than any other unemployment rate in over 70 years.

Long Lines at Ikea Don't Spell Retail Boom
Andrea Felsted (Bloomberg View) Jun 5, 2020
The post-pandemic retail environment will be even tougher.

Fed's Coronavirus Rescues Invite Bigger Bailouts
Bill Dudley (Bloomberg View) Jun 5, 2020
Ending the cycle of saving investors and markets from themselves is going to be really hard.

The Jobs Market Is Recovering, But We Might Blow It
Conor Sen (Bloomberg View) Jun 5, 2020
A V-shaped recovery is possible if Congress approves more stimulus money now.

There Are Two Recessions, Not One
Justin Fox (Bloomberg View) Jun 5, 2020
The lower-paid industries that were hammered hardest by Covid-19 are starting to come back. The rest of the economy might take longer.

This Time, Europe Hasn't Thrown Away Its Shot
John Authers (Bloomberg View) Jun 5, 2020
Common borrowing is a historic step that would address a critical flaw in the single currency zone's architecture.

Investing in African Logistics
Aubrey Hruby and Aubrey Rugo (Project Syndicate) Jun 5, 2020
If economic and commercial opportunities were not enough motivation for investors to tackle the short-term constraints on e-commerce in Africa, the COVID-19 pandemic should be. Without more advanced logistics and infrastructure, the continent will struggle to deliver essential supplies safely.

Give Argentina a Break
Patrick Bolton (Project Syndicate) Jun 5, 2020
It is no secret that Argentina has a debt-sustainability problem, which is why its government has gone to such lengths to work with the International Monetary Fund on a solution. But, rather than recognizing that COVID-19 has complicated matters, Argentina's private-sector creditors continue to stand in the way.

The Post-COVID State
Daron Acemoglu (Project Syndicate) Jun 5, 2020
Given the nature and scale of the demands being placed on modern states, it is clear that "business as usual" will no longer suffice, even if it remains the easiest option. For citizens in the world's democracies, the choice ultimately will be between various forms of abdication and concerted action.

Flattening the COVID-19 curve: What works
Nikos Askitas, Konstantinos Tatsiramos, and Bertrand Verheyden (VoxEU) Jun 5, 2020
In an attempt to mitigate the spread of COVID-19, countries around the world have implemented a number of lockdown policies, which varied in timing and intensity. This column presents the findings of an evaluation study across 135 countries on the effects of these policies on the daily incidence of COVID-19 and on various population mobility patterns. Policies preventing close contacts in large groups, such as public events, private gatherings, and schools are the most effective in reducing new infections. These effects are mediated by changes in population mobility patterns, which are consistent with time-use and epidemiological factors.

No-Deal Brexit Looks Likelier Than Ever After the Pandemic
Keith Johnson (FP) Jun 5, 2020
The U.K. and EU still find themselves far apart on crucial issues—with time running out.

China Is Weaponizing Globalization
Matt Schrader (FP) Jun 5, 2020
The Chinese Communist Party has turned global ties into its own tools.

Is the COVID-19 crisis an opportunity to boost the euro as a global currency?
Grégory Claeys and Guntram B. Wolff (Bruegel) Jun 5, 2020
The euro never challenged the US dollar, and its international status declined with the euro crisis. Faced with a US administration willing to use its hegemonic currency to extend its domestic policies beyond its borders, Europe is reflecting on how to promote it currency on the global stage to ensure its autonomy. But promoting a more prominent role for the euro is difficult and involves far-reaching changes to the fabric of the monetary union.

Investors swept up in optimism need to ask themselves two questions
Michael Mackenzie (FT) Jun 6, 2020
Few have paused to assess the effectiveness of each dollar, euro and pound expended.

Broad rally could be signal to take the money and run
Bryce Elder (FT) Jun 6, 2020
UK stock markets seem fixated on the best-case scenario emerging from Covid-19 crisis.

Coronavirus Shutdowns: Economists Look for Better Answers
Eduardo Porter (NYT) Jun 6, 2020
Researchers are developing models for more targeted closings (and reopenings) that would curb the spread of infection at a less severe economic cost.

Don't Lose the Thread. The Economy Is Experiencing an Epic Collapse of Demand.
Neil Irwin (NYT) Jun 6, 2020
A rip in the fabric of the economy won't be healed easily, and denial of the severity of the crisis won't solve it.

Can Hong Kong remain a global financial centre?
Economist Jun 6, 2020
The $10trn financial hub is in the eye of a geopolitical storm.

Governments Have Crippled the World's Economies. Revolution May Soon Follow.
Thorsten Polleit (Mises Wire) Jun 6, 2020
Mises knew: "Mass unemployment destroys the moral foundations of the social order. The young people…forced to remain idle, are the ferment out of which the most radical political movements are formed."

An Air Travel Rebound Could Be Around the Corner
Brooke Sample (Bloomberg View) Jun 6, 2020
The industry is increasingly optimistic.

Big Error on Jobs Forecast Could Have Policy Ramifications
Mohamed A. El-Erian (Bloomberg View) Jun 6, 2020
The May unemployment report risks misleading lawmakers into a false sense of confidence about a recovery.

The health vs wealth trade-off and COVID-19 policymaking
Shaun P. Hargreaves Heap, Christel Koop, Konstantinos Matakos, Asli Unan, and Nina Weber (VoxEU) Jun 6, 2020
The behavioural interventions to control the spread of COVID-19 present trade-offs between health and wealth. To be successful, an understanding of how the public currently values lives over economic loss is needed. A survey experiment in the US and UK finds that people highly prioritise saving lives, but this valuation will change as economic losses mount. Individual differences in valuation also predict individual compliance with COVID-19 policies, and information on COVID-19 deaths and income losses can affect valuations. Caution in relaxing the lockdown will help build public support and mitigate polarising effects and, through increasing compliance, improve its economic efficacy.

The World's Weakest Strongman
Stephen M. Walt (FP) Jun 6, 2020
Donald Trump's use of violence and division isn't a symbol of authority—it's a sign of desperation.

British jobs depend on reopening the economy
John Spellar (FT) Jun 7, 2020
If the UK does not get back to work, Covid-19 could be more devastating than Thatcherism.

This recovery will be greener than the last one
Pilita Clark (FT) Jun 7, 2020
The economic impacts of the pandemic are unlikely to stifle environmental concerns.

We need to revisit the idea of a Pigou wealth tax
Ian Kumekawa (FT) Jun 7, 2020
The economist was the first to study environmental costs and one of the first to analyse inequality.

Covid debt mountains are a challenge for next decade
Gavyn Davies (FT) Jun 7, 2020
Treasury bond issuance and central bank QE must work in tandem for economic recovery.

Private markets need to be dragged further from the shadows
Jonathan Ford (FT) Jun 7, 2020

Economic distancing from China and the world would carry heavy costs
Shiro Armstrong (EAF) Jun 7, 2020
Economic nationalism is gathering momentum in many countries and that will make the world poorer, weaker and less secure.

COVID-19 doesn't spell the end of supply chains
Ken Heydon (EAF) Jun 7, 2020
Concerns about national security and sovereignty are strengthening the forces of protectionism.

Remaking the global system after COVID-19
Peter Gourevitch and Deborah Seligsohn (EAF) Jun 7, 2020
Efficiency is not the only consideration, and sometimes it fails us when we need security, stability, equity.

Vietnam Breaks Out of the Covid Tourist Trap
Clara Ferreira Marques (Bloomberg View) Jun 7, 2020
Holidaymakers are back, and they're mostly local. That may be a model for the rest of the world.

Saudi Arabia Lays Down the Law to the Oil Market
Julian Lee (Bloomberg View) Jun 7, 2020
Calling out OPEC's laggards may help rescue the group's reputation.

Production networks and epidemic spreading: Re-opening the UK economy
Anton Pichler, Marco Pangallo, R. Maria del Rio-Chanona, François Lafond, J. and Doyne Farmer (VoxEU) Jun 7, 2020
Many governments are slowly unwinding their economies from nationwide lockdowns. However, re-opening the economy entails a serious trade-off between fostering economic output and keeping the spread of infection low. This column reports several re-opening scenarios for the UK economy, documenting their projected impacts on both GDP and the spread of the virus. The results suggest that it is best to re-open upstream industries first, as they provide a large direct and indirect economic boost at a relatively lower cost in terms of further epidemic spreading.

The UK and EU are facing the most extreme version of Brexit
Wolfgang Münchau (FT) Jun 8, 2020
Political miscalculations have harmed negotiations that could well fail to secure a trade deal.

Pandemic starts process of EMs decoupling from each other
Fabiana Fedeli (FT) Jun 8, 2020
China, Taiwan and South Korea are among farthest ahead on the path of normalisation.

A new global crisis is looming in east Asia
Gideon Rachman (FT) Jun 8, 2020
China's pride and paranoia are a dangerous mix for the world.

Rising markets and inequality grow from the same root
Robert Armstrong (FT) Jun 8, 2020
Covid-19 puts workers under immense strain, while asset owners feel much less pain.

Despite Recession, Stock Markets Turn Positive for the Year
Matt PhillipS (NYT) Jun 8, 2020
The S&P 500 climbed back above where it began the year on the same day that economists said the United States fell into a recession in February.

Central Bankers Have Crossed Bright Lines to Aid Economies
Jeanna Smialek and Jack Ewing (NYT) Jun 8, 2020
Across the world, the pandemic is forcing the people who make monetary policy to rewrite old playbooks. More experimentation may be coming.

Trump is running on the economy without a plan to rebuild it
Catherine Rampell (WP) Jun 8, 2020
It's certainly not the greatest the country has ever seen.

US producers set to torpedo OPEC+ oil rally
Tim Daiss (AT) Jun 8, 2020
Oil prices have recently surged after an historic collapse but could fall again as US producers begin to come back on stream

Central Bankers Gone Wild: It's a New Era at the Fed
Robert P. Murphy (Mises Wire) Jun 8, 2020
When people are scared they let the authorities get away with all sorts of nonsense. We're seeing this with the Federal Reserve right now.

Policy responses to COVID-19 in Latin America: Big steps in a small space
Jens Arnold, Paula Garda, Alberto Gonzalez-Pandiella, Robert Grundke, Nicolas Ruiz and Enes Sunel (OECD Ecoscope) Jun 8, 2020
Latin American economies are facing important challenges in the face of the COVID-19 pandemic. The outbreak will exacerbate the region's deep inequalities along many dimensions, which calls for a strong policy reaction to protect vulnerable households and firms. Still, the need for big steps contrasts with the severely limited fiscal space that most economies in the region have. Squaring this circle is not trivial, but well-designed temporary policies can go a long way to save livelihoods and prevent permanent scars, especially for disadvantaged groups.

Resilience in Developing Nations
Nancy Birdsall, Karen J. Greenberg and John Berger (CGD/Vital Interests) Jun 8, 2020
An overview of the wellbeing of people in developing nations and how their prospects have changed in the past decades.

Don't Be Fooled by Stocks. The Economy Needs More Aid.
Tim Duy (Bloomberg View) Jun 8, 2020
Even though employers unexpectedly added jobs in May, the percentage of unemployed not on temporary layoff surged.

Ben Bernanke Sees a Big If on the Path to Recovery
Noah Smith (Bloomberg View) Jun 8, 2020
In a Q&A the former Fed chief says the central bank is doing most of what it can. But unless the pandemic is brought under control, the recession will drag on.

Economic Nationalism Is a Wrong Turn for Covid-Hit India
Andy Mukherjee (Bloomberg View) Jun 8, 2020
Modi gives voice to a "buy local" campaign to counter pandemic crisis and border tensions with China.

A Crash in the Dollar Is Coming
Stephen Roach (Bloomberg View) Jun 8, 2020
The world is having serious doubts about the once widely accepted presumption of American exceptionalism.

OPEC's Doctrine of Mutually Reassured Destruction
Liam Denning (Bloomberg View) Jun 8, 2020
A new agreement reinforces that the group has limited, bad options for managing the oil market.

We're Back at the Top of the Stocks Helter-Skelter
John Authers (Bloomberg View) Jun 8, 2020
The scale of monetary easing hinted at the strength of the recovery to come.

Rage Against the Pandemic
Barry Eichengreen (Project Syndicate) Jun 8, 2020
It has been widely noted that the social turmoil unfolding in the wake of George Floyd's death may worsen the already-acute COVID-19 crisis. But the connection running in the other direction – from the pandemic to the demonstrations – has received far less attention.

China's "Peaceful Rise" Vanishes in Thin Air
Shashi Tharoor (Project Syndicate) Jun 8, 2020
With the world's attention focused on the pandemic, Chinese troops have been establishing fixed positions in areas that even it considers to be on the Indian side of the disputed Line of Actual Control. The message is clear: China is now the region's preponderant power, and everyone else should fall in line.

Explaining the Pandemic Performance Differential
Jim O'Neill (Project Syndicate) Jun 8, 2020
Although a country's success in managing the COVID-19 crisis depends on many variables, there is a striking correlation between today's performance and past economic-development rankings. Countries that have consistently achieved broadly shared dynamic growth have proved far more capable of containing the first wave of the pandemic.

Which Economic Stimulus Works?
Joseph E. Stiglitz and Hamid Rashid (Project Syndicate) Jun 8, 2020
During the initial shock from COVID-19, it was understandable that governments and central banks would respond with massive injections of liquidity. But now policymakers need to take a step back and consider which forms of stimulus are really needed, and which risk doing more harm than good.

Envisioning a Blue Recovery
Erna Solberg and Tommy Remengesau Jr. (Project Syndicate) Jun 8, 2020
The impact of the COVID-19 crisis is global, and national recovery efforts must be globally focused to seize shared opportunities. Nowhere is this more evident than in the global domain that unites us – the ocean.

Unconventional fiscal policy to exit the COVID-19 crisis
Francesco D'Acunto, Daniel Hoang, and Michael Weber (VoxEU) Jun 8, 2020
The German administration has just released their €130 billion economic stimulus package, the most prominent measure of which is an unconventional fiscal policy in the form of a sudden drop in VAT. The aim is to create a future path of increasing sales taxes by increasing prices and hence stimulating inflation expectations and aggregate demand today. This column argues that earlier episodes have shown that unconventional policy is effective because it is easily understood by non-expert households and households react to it strongly. Alternative unconventional measures, instead, such as forward guidance, are largely ineffective in part because households do not understand what such policies imply for their consumption.

To ease the health–wealth trade-off, reallocate digital property rights
Dennis Snower (VoxEU) Jun 8, 2020
Contact-tracing and risk-tracing technologies could help ease the 'health–wealth trade-off' confronting many countries in the wake of COVID-19. But privacy and security concerns are preventing such technologies from being widely adopted. This column suggests a way to ease those concerns by endowing individuals with property rights to the digital information that concerns them. A 'self-sovereign identity system' could assure users that their data would be exploited only for specified purposes, such as containing a pandemic. The data would revert to being private property once the pandemic is over.

All Epidemiology Is Local
Robert Malley and Richard Malley (FA) Jun 8, 2020
Developing countries won't find a one-size-fits-all solution to coronavirus.

The Rise of Strategic Corruption
Philip Zelikow, Eric Edelman, Kristofer Harrison, and Celeste Ward Gventer (FA) Jun 9, 2020
How states weaponize graft.

A new policy toolkit is needed as countries exit COVID-19 lockdowns
Olivier Blanchard, Thomas Philippon, and Jean Pisani-Ferry (PIIE) Jun 8, 2020
The measures that most governments took in response to the sudden collapse in economic activity during the COVID-19 lockdowns nearly exclusively focused on protecting vulnerable workers and firms. These measures included unemployment benefits, grants, transfers, loans at low rates, and tax deferrals. As lockdowns are lifted, governments must shift policies toward supporting the recovery and design measures that will limit the pain of adjustment while preserving productive jobs and firms. This Policy Brief explores how such measures can be designed, with particular emphasis on Europe and the United States. The authors propose a combination of unemployment benefits to help workers, wage subsidies and partially guaranteed loans to help firms, and debt restructuring procedures for small and medium-sized companies handicapped by excessive legacy debt from the crisis.

For the Rural Poor, the Coronavirus Crash Isn't Here Yet
Ahmed Mushfiq Mobarak (FP) Jun 8, 2020
Prolonged lockdowns will exacerbate food and income insecurity during the agricultural lean season.

EU curbs on Chinese state aid are overdue
FT View Jun 9, 2020
Action on subsidies is a sensible step but fraught with difficulties.

Economists are hunting for alternative indicators of recovery
Megan Greene (FT) Jun 9, 2020
US data suggest that being allowed to go out and spend is less important than feeling confident to do so.

Second space age is creating fresh investment opportunities
Luke Ward (FT) Jun 9, 2020
New frontiers are being opened up by a wave of innovation in space technology.

Germany's 'ka-boom' stimulus marks a surprising change
Martin Sandbu (FT) Jun 9, 2020
Keynesian countercyclical policy should remedy a neglect of investment.

Collapsing rates leave investors dangerously exposed to equity risk
Paul Britton (FT) Jun 9, 2020
The classic portfolio — 60% stocks, 40% government bonds — no longer makes sense.

Why I'm Not Worried About America's Trillion-Dollar Deficits
Stephanie Kelton (NYT) Jun 9, 2020
Our country's myth about federal debt, explained.

The World Needs an Effective WTO More Than Ever
Bloomberg View Jun 9, 2020
If allowed to do its job, the global trade-promotion agency would be a vital asset.

From Great Lockdown to Great Transformation
Kristalina Georgieva (IMF) Jun 9, 2020
y the end of 2020, 170 countries—almost 90 percent of the world—will be worse off with lower per capita income.

Fed Needs Better Answers on Runaway Markets and Inequality
Brian Chappatta (Bloomberg View) Jun 9, 2020
The central bank's urgency to backstop liquidity and functionality runs the risk of leaving poorer Americans and minorities behind.

Crash Lesson No. 1? Don't Ignore the Fed's Gusher
John Authers (Bloomberg View) Jun 9, 2020
The fastest stock-market recovery has marched in tandem with the fastest money supply growth since records began.

Stock Market Has Almost Always Ignored the Economy
Nir Kaissar (Bloomberg View) Jun 9, 2020
There has never been a reliable relationship between equities and GDP or the broader political or social environment.

Brokers, or Just Broken? What China's Reforms Won't Fix
Anjani Trivedi (Bloomberg View) Jun 9, 2020
Fiddling with financial ratios can't make Beijing's capital markets more appealing.

The U.S. Economy Will Need Stimulus Well Beyond July
Peter R. Orszag (Bloomberg View) Jun 9, 2020
It's too soon to count on consumer demand to support the economy.

What do Vietnam and Cristiano Ronaldo have in common?
Jacques Morisset (Brookings) Jun 9, 2020
Vietnam is the success story of the past 25 years.

The Illusion of a Rapid US Recovery
James K. Galbraith (Project Syndicate) Jun 9, 2020
America's economy – based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts – was in many ways prosperous. But it was a house of cards, and COVID-19 has blown it down.

Preventing an Emerging-Market Meltdown
Andrés Velasco (Project Syndicate) Jun 9, 2020
Emerging markets today account for more than two-fifths of global GDP measured at market exchange rates, and nearly three-fifths after adjusting for differences in purchasing power. If these economies crash, then rich-country citizens will also be the victims of an economic catastrophe long foretold and clearly avoidable.

COVID-19, populism, and sustainable development
Christian Kroll (VoxEU) Jun 9, 2020
Concerns are growing that the COVID-19 crisis could be exploited by populists claiming to be the voice of those who have been 'left behind'. This column presents a new framework which could help shed light on the relationship between sustainable development and populism. Progress on the Sustainable Development Goals may be associated with diminishing electoral support for populism, but humanity must still get better at turning the trade-offs between SDGs into synergies. During the COVID-19 recovery, an effective way to prevent populists from exploiting the crisis may involve making the SDGs the policy blueprint.

Insights into post-COVID-19 fiscal policies
Sebastian Barnes and Eddie Casey (VoxEU) Jun 9, 2020
The Covid-19 crisis has highlighted the role of fiscal policy and transformed the outlook for public finances. This column explores economic and fiscal scenarios for a small euro area country to 2025. Due to the high uncertainty, it argues for a state-contingent approach to policy. Low interest rates, if maintained, along with 'high-altitude' debt dynamics could create substantial headroom for the fiscal response and make future adjustments to put the debt ratio on a downward path more manageable.

Next Generation EU: A recovery plan for Europe
Maarten Verwey, Sven Langedijk, and Robert Kuenzel (VoxEU) Jun 9, 2020
As Member States start to ease restrictions linked to the COVID-19 pandemic on citizens and businesses, EU leaders and institutions have turned their attention towards the medium-term recovery of their economies. In late May, the Commission presented its proposals for a recovery plan. This column provides a brief overview of the economic rationale for collective action and an assessment of the expected impact of the recovery plan proposed by the Commission.

The Next Liberal Order
G. John Ikenberry (FA) Jun 9, 2020
The age of contagion demands more internationalism, not less.

How to Make Trade Work for Workers
Robert E. Lighthizer (FA) Jun 9, 2020
C harting a path between protectionism and globalism.

The Animal Spirits Index Remains in Negative Territory
Azhar Iqbal and Hop Mathews (WF Econ Group) Jun 9, 2020
Our Animal Spirits Index increased marginally in May, but remained well in negative territory. That said, four of the five components improved on the month, suggesting sentiment is moving in the right direction.

A market rally built on shaky foundations
FT View Jun 10, 2020
Recovery in equity prices is driven in part by absence of alternatives.

Covid-19 will hit developing countries hard
Martin Wolf (FT) Jun 10, 2020
The permanence of the losses caused by the pandemic depends on the size of the scars.

Credit crisis is at the heart of India's weakness
Benjamin Parkin (FT) Jun 10, 2020
Asia's third-biggest economy is not simply a victim of havoc wrought by the pandemic.

Gap between haves and have-nots is widening sharply
Peter Atwater (FT) Jun 10, 2020
Paths of the K-shaped recovery have diverged too far, for consumers and businesses.

We must resurrect EU Capital Markets Union
Thomas Wieser (FT) Jun 10, 2020
Recovering from Covid-19 requires deep markets.

How's the Economy Doing? Watch the Dentists
Sarah Kliff (NYT) Jun 10, 2020
A crucial indicator of whether Americans feel safe returning to normal activities.

China's high-tech dream could come at a price
Gordon Watts (AT) Jun 10, 2020
Debt risks stalk 'new infrastructure' push costing trillions of dollars and linked to Made in China 2025.

DFC Puts Its Foot on the Pedal
Clemence Landers and Jocilyn Estes (CGD) Jun 10, 2020
Signs of progress on LMIC portfolio.

After the lockdown, a tightrope walk toward recovery
Laurence Boone (OECD Ecoscope) Jun 10, 2020
The spread of Covid-19 has shaken people's lives around the globe in an extraordinary way, threatening health, disrupting economic activity, and hurting wellbeing and jobs.

Strengthening Economic Institutions for a Resilient Recovery
Antoinette Sayeh (IMF) Jun 10, 2020
Strengthening economic foundations can have the greatest long-term impact on the economic and social wellbeing of people.

Fed Shifting Focus From Crisis Management to Easy Financial Conditions
Tiffany Wilding (PIMCO) Jun 10, 2020
We expect the Federal Reserve will continue to conduct asset purchases at its current pace through year-end, and eventually commit to keeping interest rates on hold through 2022. This should help ensure easy financial conditions and support the economic recovery.

If Development Finance Institutions Are Providing Aid, They Should Act Accordingly
Charles Kenny (CGD) Jun 10, 2020
what does this imply for donor DFI business models?

America's Great(er) Recession Will Last for Years
Noah Smith (Bloomberg View) Jun 10, 2020
The upbeat employment numbers for May probably don't point to a quick recovery.

Fed Shoots Down Notion of a V-Shaped Recovery
Mohamed A. El-Erian (Bloomberg View) Jun 10, 2020
Powell leaves open questions about the possible extent of future asset purchases and the disconnect between Wall Street and Main Street.

The U.S. Fed Has Stamped All Over Volatility
Marcus Ashworth (Bloomberg View) Jun 10, 2020
For the Fed, dampening down volatility in the financial markets has been key to bringing things back under control. The battle isn't quite over yet.

Europe's Rescue Package Gives Bond Yields a Chance
Mark Gilbert (Bloomberg View) Jun 10, 2020
A top-rated borrower offering a yield premium to Germany will find a warm welcome.

Powell's Ready to Play the Fresh Prince of Bubbles
John Authers (Bloomberg View) Jun 10, 2020
The Fed chairman has made clear that shoring up the real economy overrides concerns about asset-price inflation.

The Shape of Asia's New Cold War
Yoon Young-kwan (Project Syndicate) Jun 10, 2020
China's decision to demolish the "one country, two systems" arrangement in Hong Kong appears to be a fait accompli, and in fact seems to have been preordained. Viewed in a broader context, the move represents a major salvo in a new cold war that is already playing out across three critical dimensions.

The Moment When America Fell Behind
Jules Kortenhorst (Project Syndicate) Jun 10, 2020
Although governments everywhere are scrambling to contain the economic fallout from COVID-19, some are approaching the task more strategically than others. The European Union and China, in particular, are focusing on long-term investments in clean energy, whereas America is doubling down on the past.

COVID-19 and the Bio-Revolution
Michael Chui and Matthias Evers (Project Syndicate) Jun 10, 2020
As the novel coronavirus infects millions worldwide and ravages the global economy, our best hope to overcome it is a new and rapidly evolving generation of biological tools and capabilities. But addressing COVID-19 only scratches the surface of what biological innovation can do.

Europe's New Deal Moment
Daniel Gros (Project Syndicate) Jun 10, 2020
US President Franklin D. Roosevelt's 1930s reforms are now accepted as an essential part of America's "economic constitution." The longer-term challenge for the European Union will be to implement its COVID-19 crisis measures in such a way that they, too, come to be seen as useful economic stabilization tools when more normal times return.

Less Globalization, More Multilateralism
Kemal Dervis (Project Syndicate) Jun 10, 2020
While some degree of deglobalization may be desirable today, this process also carries grave risks, from skyrocketing production costs to geopolitical conflict. The only way to mitigate those risks is through enhanced multilateral cooperation.

A Sustainable Recovery Must Be More Than Green
Mark Cliffe (Project Syndicate) Jun 10, 2020
While climate activists are pushing for green policies to be included in the COVID-19 response, most governments remain focused on the immediate public-health and economic emergencies. If reformers want to make the most of the recovery, they will need to offer proposals that serve both the planet and ordinary people.

Post-COVID-19 Reconfiguration of the Global Value Chains and China
Hanming Fang and Bernard Yeung (VoxChina) Jun 10, 2020
COVID-19 does not change the fundamentals. Instead, COVID-19 heightens worries, reveals China's strengths, but expedites ongoing changes. It is economics, so what should China be wary of?

Flush: What Record Savings Mean for Spending
Tim Quinlan, Michael Pugliese, and Shannon Seery (WF Econ Group) Jun 10, 2020
The recent sharp upturn in the saving rate means U.S. households are sitting on more cash than they have in a long time. We expect the windfall to augment incomes that may have been hobbled by the crisis and allow for consumer spending to grow faster than might otherwise have been possible.

FOMC Remains Prepared To Do "Whatever It Takes"
Jay H. Bryson (WF Econ Group) Jun 10, 2020
The FOMC made no major policy changes today, but it left little doubt that it will do "whatever it takes" to help the economy climb out of its pandemic-induced crater.

Effects of U.S. Supply Chain Re-Orientation: Part II
Jay H. Bryson and Hop Mathews (WF Econ Group) Jun 10, 2020
In the second report in a two-part series, we analyze which domestic industries could potentially benefit from increased production if industries re-orient their supply chains back toward domestic vendors.

COVID-19: Crisis resilience made in Germany
Stefan Schneider, Sebastian Becker, Barbara Boettcher, Eric Heymann, and Marc Schattenberg (DB Research) Jun 10, 2020
Germany has got COVID-19 under control faster than many other countries. It also recorded one of the lowest infection fatality rates among the G10 countries. The complete fiscal policy U-turn in response to COVID-19 induced economic damage should allow the German economy to weather this crisis better than many other countries – although the impact will still be massive. We have identified six structural features of the German society contributing to its superior collective resilience. Due to these features we expect the German recession in 2020 to be less severe than in most other industrial countries. This crisis resilience should also further improve Germany's relative position among the major industrial economies once COVID-19 has been overcome. And this will increase pressure on Germany to play an even more supportive role within EMU/EU in the medium term.

The many stages of grief over balance sheet repairs
Kate Burgess (FT) Jun 11, 2020
Investors and market face more denial, depression and anger in coronavirus recovery.

Bad things happen when finance front-runs the economy
Mohamed El-Erian (FT) Jun 11, 2020
Governments need to ensure durable growth that benefits more than the well-off in society.

Lockdown easing will only work if trust is restored
Chris Giles (FT) Jun 11, 2020
As Covid-19 infections fall, the government needs to act to prevent more economic harm.

China's Street Vendor Push Ignites a Debate: How Rich Is It?
Li Yuan (NYT) Jun 12, 2020
The premier's suggestion to empower a "stall economy" and focus on low-income workers leads some to ask whether the world's No. 2 economy is as prosperous as it seems.

What US-China decoupling does and doesn't mean
Urban C. Lehner (AT) Jun 11, 2020
Decoupling has been slow so far but it doesn't mean it won't happen.

How manufacturing might take off in Africa
Economist Jun 11, 2020
It won't be the same as it was in East Asia.

The Global Economic Reset—Promoting a More Inclusive Recovery
Kristalina Georgieva (IMF) Jun 11, 2020
Policymakers must do everything in their power to promote a more inclusive recovery, one that benefits all segments of society.

The Fed's monetary stance is too tight given its economic forecast
Joseph E. Gagnon (PIIE) Jun 11, 2020
The Federal Open Market Committee (FOMC or Fed) made no changes to its monetary policy stance at its June 2020 meeting. But the first update to its forecast since December showed inflation and employment below their goals for at least 2 1/2 years. An outlook that bad for that long is a clear sign that policy is too tight.

The US retreat from East Asia is costly
Peter A. Petri and Michael G. Plummer (PIIE) Jun 11, 2020
When President Donald Trump said in his inaugural address that trade "protection would lead to great prosperity and strength" and withdrew from the Trans-Pacific Partnership (TPP) agreement, many East Asians were unfazed. Trump was a businessman. He might bargain for better trade deals but would not abandon America's lucrative partnerships with the world's most dynamic region. Three years on, with a US-China trade war in full swing and the World Trade Organization under siege, these hopes have faded.

Well-Designed Tax Reforms Can Improve Income Distribution in Developing Countries
Sanjeev Gupta and João Tovar Jalles (CGD) Jun 11, 2020
Following the 2015 Addis Ababa Action Agenda, many have recognized the importance of implementing fiscal reform for increasing revenue in developing countries. In this context, many developing countries are gradually reforming their tax systems to make them more efficient and equitable, and are seeking technical advice and financial assistance from several donors and international institutions, such as the IMF and World Bank. In many cases, it is valuable to ask whether these reforms have made developing country tax systems more equitable. In a recently published paper we examine the experience of 45 developing countries (23 emerging and 22 low-income countries) over the 2000-2015 period and find that tax reforms have raised the income share of the poorest population groups within countries. We also use the Gini index— an index that measures inequality—to look at the resultant inequality in these countries and find that inequality of disposable income has lessened over time.

How to keep remittances flowing
Mahmoud Mohieldin and Dilip Ratha (Brookings) Jun 11, 2020
In 2020, the economic crisis caused by COVID-19 pandemic is expected to lead to a 20 percent decline in migrant remittance flows to LMICs. The decline in remittance flows would be even sharper in poorer countries and fragile and conflict-affected countries. The overall decline in external financing, especially with the significant decline of portfolio investment, can cause hardships for nations in managing their external payment needs, for essential imports and foreign debt service. Risks of households falling back into poverty and food insecurity have risen.

The Fed Is Choosing Banks Over People
Narayana Kocherlakota (Bloomberg View) Jun 11, 2020
Falling short of its mandate means letting America down.

Blame the Fed for the Disconnect in Markets
Jim Bianco (Bloomberg View) Jun 11, 2020
The central bank has fostered an unprecedented amount of risk-taking at the expense of the long-term health of the economy.

Singapore Won't Feast on Hong Kong's Fund Famine
Andy Mukherjee (Bloomberg View) Jun 11, 2020
Despite their perennial rivalry, talk of a huge inflow of jittery deposits to the city-state is overblown.

The Ugly Side of Germany's $1.5 Trillion Stimulus
Andreas Kluth (Bloomberg View) Jun 11, 2020
All over Europe, but notably in Germany, Covid-19 is becoming an excuse to embrace state capitalism.

The Post-Pandemic Social Contract
Dani Rodrik and Stefanie Stantcheva (Project Syndicate) Jun 11, 2020
While many recent proposals for reforming capitalism would substantially change the way our economies operate, they do not fundamentally alter the narrative about how market economies should work; nor do they represent a radical departure for economic policy. Most critically, they elide the central challenge we must address: reorganizing production.

The Economic Consequences of Disrupted Global Supply Chains
Dalia Marin (Project Syndicate) Jun 11, 2020
Given the importance of broken supply relationships in the current downturn, this recession is likely to be unique. To anticipate the recovery therefore requires understanding the COVID-19 pandemic's effects on global supply chains.

From richer to poorer: COVID-19 phases in Germany
Thomas Plümper and Eric Neumayer (VoxEU) Jun 11, 2020
Is Covid-19 a 'rich man's disease', as many citizens in poorer countries believe it to be? This column descibes how in Germany, infections began with individuals returning from skiing holidays. In the first phase of the pandemic, infection rates were higher in richer areas and lower in more socially deprived districts. In the second phase, the ability to socially distance oneself mattered more – an ability that is itself socioeconomically stratified. Richer districts are now seeing fewer new infections, and the initial safety advantage of more socially deprived districts has disappeared.

COVID-19 and UK public finances
Ethan Ilzetzki (VoxEU) Jun 11, 2020
Public debt has risen to unprecedented peacetime levels, due to policies put into place to address the economic fallout from COVID-19. Nevertheless, as this column reveals, the Centre for Macroeconomics panel was nearly unanimous that the Treasury should not take any action to decrease the deficit in the upcoming budget. The panel is split on when it would be wise to publicly announce long-run plans to address the deficit and the debt. The majority of the panel supports a mix of financing options when action is taken, with tax increases receiving strong support and not a single panellist supporting public spending cuts.

COVID-19, asset prices, and the Great Reallocation
Marco Pagano, Christian Wagner, and Josef Zechner (VoxEU) Jun 11, 2020
Whether COVID-19 will trigger a massive reallocation of capital and labour is a key question for policymakers and investors alike. This column shows that asset markets reveal large cross-sectional differences in the repricing of industries before, during, and after the onset of COVID-19. Firms that are more resilient to social distancing significantly outperformed in the six years before and during the COVID-19 outbreak. Looking into the future, stock options imply that investors require significantly lower returns from more pandemic-resilient firms. Governments would be unwise to ignore these signals, directing public financial resources mainly to prop up ailing low-resilience firms.

Global Mobility Report
Jay H. Bryson, Erik Nelson, Mike Schumacher, and Zachary Griffiths (WF Econ Group) Jun 11, 2020
In this weekly report, we use data from Apple and Google to track mobility to various destinations and by various modes of transportation in selected large economies.

Jay Powell's stark message to the markets
FT View Jun 12, 2020
Federal Reserve is right to rule out any near-term interest rate rises.

Covid-19 crisis highlights the euro's untapped potential
Fabio Panetta (FT) Jun 12, 2020
World's second currency can deliver more benefits to eurozone states if privileges are shared.

The global gold market is breaking up
John Dizard (FT) Jun 12, 2020
Dominance of traditional banks and families that were the previous masters is ending.

High streets face a 'new normal' with old problems
Vidhya Alakeson (FT) Jun 12, 2020
The UK must come to terms with a permanent shift in consumer trends.

It seems rash to bet that the worst is over for US oil stocks
Derek Brower (FT) Jun 12, 2020
Energy shares may be beaten down but they are still far from cheap.

After the Pandemic, a Global Hunger Crisis
Arif Husain (NYT) Jun 12, 2020
The loss of income caused by the pandemic could increase the number of people suffering acute hunger to more than quarter a billion by December.

You Now Get Almost Nothing for Your Money, but It Could Be Worse
Jeff Sommer (NYT) Jun 12, 2020
In this crisis, money is priceless, yet banks and money market funds will pay you close to zero in interest for years. That's if everything turns out well.

How Huawei can work around US chip ban
David P. Goldman (AT) Jun 12, 2020
The chip ban gives the world an enormous incentive to circumvent the US

Inequality, the SDGs, and the human rights movement in the US and around the world
Sarah Mendelson (Brookings) Jun 12, 2020
Can the United States support democracy and human rights around the world as we have for four decades, even as racial inequalities, disparities, and inequities at home are more evident than any time in recent history?

Argentina and Its Creditors Should Strike a Deal
Bloomberg View Jun 12, 2020
If they fail, they'll compound the country's suffering.

Bond Issuers Are Living in the Land of Milk and Honey
Marcus Ashworth (Bloomberg View) Jun 12, 2020
Syndicated bonds are booming in Europe, making this a golden moment for governments raising money and for the investment banks that run the sales.

Don't Give Up on Bringing Manufacturing Back to the U.S.
Noah Smith (Bloomberg View) Jun 12, 2020
Tariffs, threats and trade wars didn't work, but more cooperation between government and industry might.

Private Equity Isn't What Retirement Savers Need
Alexis Leondis (Bloomberg View) Jun 12, 2020
The median private-equity fund performance has basically matched the S&P. Is that worth the risks and high fees?

Building a Better Post-COVID World
Mohamed ElBaradei (Project Syndicate) Jun 12, 2020
If the COVID-19 pandemic has made one thing clear, it is that we are one human family. Only by recognizing this – by taking care of one another, as well as the planet on which we all depend – can any of us hope for a better future.

How People Power Strengthens the Rule of Law
Doug Coltart (Project Syndicate) Jun 12, 2020
Dynamic grassroots movements are especially needed in authoritarian states where institutions are fundamentally broken. But even in established democracies, the recent failure of supposedly strong institutions to prevent the rule of law from being undermined has shown that there is no substitute for an active and organized citizenry.

Modi's Fiscal Follies
Jayati Ghosh (Project Syndicate) Jun 12, 2020
If households decide to save more and consume less during an economic slump, then the correct policy response is to increase government spending. Unfortunately, Indian Prime Minister Narendra Modi's government is doing the opposite during the current pandemic-induced downturn – with potentially disastrous consequences.

Social ties and 'hometown favouritism' towards local officials in China
Raymond Fisman, Yongxiang Wang, Jian Chu, and Songtao Tan (VoxEU) Jun 12, 2020
Hometown auditors report lower suspicious expenditures, implying that social ties are associated with greater leniency.

Retail exuberance does not explain big rally in stocks
Bryce Elder (FT) Jun 13, 2020
A bull market such as this relies on contrarianism, not inexperience.

Building resilience should not lead to trade barriers
FT View Jun 13, 2020
Companies should be given incentives to make supply chains more robust.

Investors reset for Fed's single-minded pursuit of policy goals
Michael Mackenzie (FT) Jun 13, 2020
US central bank's priority is to absorb shocks, even if it means inflating asset prices.

Retail exuberance does not explain the big rally in stocks
Bryce Elder (FT) Jun 13, 2020
A bull market such as this relies on contrarianism, not inexperience.

The 'retail bros' betting on a quick market recovery
Katie Martin, Richard Henderson, and Eric Platt (FT) Jun 13, 2020
Traders like Dave Portnoy are driving up some stocks but fund managers question the fundamentals of the broader rally.

Italy, Europe and the Global Recovery in 2021
Kristalina Georgieva (IMF) Jun 13, 2020
You can choose to be brave or choose to be crazy. Regardless, it is so very important that Italy steps up in this critical year of 2021.

The Scandinavian Model Won't Work in Chile
José Niño (Mises Wire) Jun 13, 2020
Chile is the most prosperous country in South America precisely because it has (so far) avoided adopting the socialist policies being pushed on it by left-wing reformers.

Inflation after the pandemic: Theory and practice
Charles Goodhart (VoxEU) Jun 13, 2020
The correlation between monetary growth and inflation has an historic pedigree as long as your arm. This column argues that rejecting the likelihood of (eventually) rising velocity following the current massive monetary expansion requires an alternative theory of inflation that has successfully eluded all of us thus far. Ignoring the potential inflationary dangers is the equivalent to an ostrich putting its head in the sand, and while the path towards disinflation may be well known, it simply isn't available today.

How the selfie generation will cope with a new Depression
Pilita Clark (FT) Jun 14, 2020
Today's workers are better off than their 1930s forebears in many ways — but by no means all.

Poverty and populism put Latin America at the centre of pandemic
Michael Stott and Andres Schipani (FT) Jun 14, 2020
With infections rising despite lockdowns, leaders fear another lost decade and a new debt crisis.

Break the China Habit? Lobsters, Lights and Toilets Show How Hard It Is
Damien Cave, Motoko Rich and Jack Ewing (NYT) Jun 14, 2020
The risks of relying economically on the Asian superpower have never seemed clearer. But as the world tries to get moving again, it needs China more than ever.

How 'long economic waves' could save capitalism
Robert Samuelson (WP) Jun 14, 2020
Similarities between a Russian economist's theory in the 1930s and the recent tumultuous behavior of the U.S. and global markets are hard to miss.

Asian economies positioned to ride out crisis
Brad Setser (EAF) Jun 14, 2020
Asian countries are well-placed to handle the financial implications of the crisis, particularly the increase in public debt, but with some notable exceptions.

Stock Exuberance Poses Risk to Broader Economy
Mohamed Aly El-Erian (Bloomberg View) Jun 14, 2020
Hertz is a prime example of retail investor fervor that could have negative consequences.

Oil Demand Isn't Roaring Back Yet
Julian Lee (Bloomberg View) Jun 14, 2020
Lifting lockdowns won't immediately mean traveling, commuting and working like before Covid-19.

The Megacity is Dead. Long Live the Megacity
Daniel Moss (Bloomberg View) Jun 14, 2020
The coronavirus has drained the appeal of living in Asia's densely packed metro areas. But reverse migration is easier said than done.

China's Tech Champions Have Big Homegrown Problems
Shuli Ren (Bloomberg View) Jun 14, 2020
For a top chipmaker like Tsinghua Unigroup, even the blessing of the "paramount leader" can't ensure success.

How the Coming Crash in the Dollar Will Unfold
Stephen S Roach (Bloomberg View) Jun 14, 2020
The argument that there is no alternative to the U.S. currency makes little sense.

Manufacturing Gives Iran a Lifeline
Esfandyar Batmanghelidj (Bloomberg View) Jun 14, 2020
Private-sector growth has compensated for the sanctions squeeze on oil exports, but a new threat looms.

Developing economies borrow more despite debt relief initiative
Jonathan Wheatley (FT) Jun 15, 2020
G20 appeal for investors to restructure fizzles out as capital inflows return.

Regulation is masking the true condition of insurers
Jonathan Ford (FT) Jun 15, 2020
Rules that encouraged investment in risky assets could come back to bite them.

Why businesses need to embrace discontinuity
Kishore Sengupta (FT) Jun 15, 2020
Incremental change suffices for normal times — but not for the aftermath of a pandemic.

The super-rich have a history of doing well out of a global crisis
Rhymer Rigby (FT) Jun 15, 2020
As usual, the wealthy find themselves ready to ride the rebound.

China's consumers need to 'shop till they drop'
Gordon Watts (AT) Jun 15, 2020
The retail sector will be crucial to stimulate a recovery for the world's second-largest economy.

Combating COVID-19: How Should Banking Supervisors Respond?
Tobias Adrian and Ceyla Pazarbasioglu (IMF) Jun 15, 2020
The role of the bank supervisor has never been so essential.

Kurzarbeit: Germany's Short-Time Work Benefit
IMF Country Focus Jun 15, 2020
The COVID-19 pandemic has generated renewed interest in short-time work programs—the state-sponsored work-sharing schemes aimed at saving jobs. Kurzarbeit, Germany's short-time work program, is widely considered the gold standard of such programs.

Digitalizing Sub-Saharan Africa: Hopes and Hurdles
IMF Country Focus Jun 15, 2020
Across sub-Saharan Africa, digital technologies are driving change—from kids learning to code outside Niger's capital, to drones delivering medicines to remote communities in Sierra Leone. This is all helping to build resilience.

Inequality is Overstated—and Overrated
Robert Blumen (Mises Wire) Jun 15, 2020
Measures of wealth inequality overstate actual inequality in terms of the standard of living of wealthy people relative to the rest.

Corporate sector vulnerabilities during the Covid-19 outbreak: assessment and policy responses
Lilas Demmou (OECD Ecoscope) Jun 15, 2020
The liquidity crisis may turn into a global corporate solvency crisis.

A Case Study for Second Wave Lockdowns
Clara Ferreira Marques (Bloomberg View) Jun 15, 2020
With coronavirus infections surging as economies reopen, officials will need to consider unorthodox alternatives. Pakistan offers some lessons.

Don't Give Trump His Transatlantic Trade War
Lionel Laurent (Bloomberg View) Jun 15, 2020
The virus won't repair U.S. ties with Europe, but an election might. In the meantime, everyone should sit tight.

Housing Is Hot With the Economy in the Deep Freeze
Conor Sen (Bloomberg View) Jun 15, 2020
A slowdown in construction and a halt to foreclosures squeezed supply, while low rates spurred demand.

Companies Need to Share More of Their Riches With Workers
Leo E Strine and Kirby M Smith (Bloomberg View) Jun 15, 2020
Want a fairer system? Have compensation committees broaden their mandate beyond executive pay.

Fed's Powell Can Send a Forceful Message to Congress
Timothy A Duy (Bloomberg View) Jun 15, 2020
Don't underestimate the central bank's commitment to the current pace of asset purchases.

Fed Doesn't Really Need to Buy Corporate Bonds
Brian Chappatta (Bloomberg View) Jun 15, 2020
Even though the debt market is running smoothly, the central bank apparently doesn't want one of its new facilities to go to waste.

A Case of Tech Theft Shows the Real U.S. Weak Spot
Tim Culpan (Bloomberg View) Jun 15, 2020
It's going to be hard for America to defend its IP borders in far-off lands that are part of the supply chain.

What's in a Recession?
Jeffrey Frankel (Project Syndicate) Jun 15, 2020
After months of plummeting output and employment, the National Bureau of Economic Research has determined its official start date for the current recession in the United States. Far from being late to the disaster, the NBER is early by its usual standards – and has provided the most definitive ruling one can hope for.

United States of Despair
Anne Case and Angus Deaton (Project Syndicate) Jun 15, 2020
America finds itself in the grips of two epidemics, each of which has exposed deep inequalities across races and levels of educational attainment. Between rising "deaths of despair" among working-class whites and higher COVID-19 mortality rates among African-Americans, the stunning secular decline in US life expectancy will continue.

The World Waits for No Country
Richard N. Haass (Project Syndicate) Jun 15, 2020
It comes as no surprise that the American public and their elected officials have focused their energies on domestic challenges. The problem is that much is happening in the world that calls out for American attention and is not getting it.

The automation channel of pandemic-induced uncertainty
Sylvain Leduc and Zheng Liu (VoxEU) Jun 15, 2020
The COVID-19 pandemic has raised concerns about the future of work. The pandemic may become recurrent and necessitate repeated adoptions of social distancing measures, creating substantial uncertainty about worker productivity. This column presents a theoretical framework suggesting that such job uncertainty reduces aggregate demand, and dampens business investment in general. However, automation may provide one way for businesses to cope with the uncertainty about worker productivity. It appears that pandemic-induced job uncertainty could stimulate automation investment, despite declines in aggregate demand.

Import dependence on essential medical goods during a pandemic
Fernando Leibovici and Ana Maria Santacreu (VoxEU) Jun 15, 2020
The ongoing COVID-19 pandemic has led to a massive increase in the demand for essential medical equipment. This column discusses recent findings on the role of international trade of essential medical goods in exacerbating or mitigating the impact of a pandemic. The effects depend crucially on the countries' trade imbalances in essential medical goods. Net importers of these goods are relatively worse off during a pandemic than net exporters. Although the welfare losses of net importers are lower in a world with high trade barriers, they benefit from reducing barriers once the pandemic arrives.

The political scar of epidemics
Cevat Giray Aksoy, Barry Eichengreen, and Orkun Saka (VoxEU) Jun 15, 2020
What will be the political legacy of the COVID-19 pandemic? This column uses data from the 2006-2018 Gallup World Polls to show that epidemic exposure during an individual's 'impressionable years' of 18 to 25 has a persistent negative effect on trust in political institutions and leaders, especially in democracies. Combined with other evidence that trust is important for limiting the spread of infection, this raises the spectre of a circular, self-reinforcing spiral in which poor public health policy leads to deeper distrust, further undermining the effectiveness of public health policy.

We Can't Afford Not To
Mary C. Daly (FRBSF Econ Letter) Jun 15, 2020
Three crises—health, economic, and social—are converging into one difficult moment in American history. Everyone has been affected, but the highest costs are falling on those least prepared to bear them. The path forward will require investments in "opportunity infrastructure" that maximize individual potential, reduce inequities, and lay the foundation for long-term economic growth.

The ungoverned globe
Benjamin Studebaker (Aeon) Jun 15, 2020
The end of the liberal order would unleash chaos; its continuance means unconstrained economic suffering. What to do?

The Looming Bank Collapse
Frank Partnoy (Atlantic) Jun 15, 2020
The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it. (July/August 2020 issue)

Big Oil faces up to a future beyond petroleum
FT View Jun 16, 2020
The pandemic is set to accelerate the shift away from fossil fuels.

Countries should grab an old weapon in Covid fightback: annuities
Laurence Mutkin (FT) Jun 16, 2020
This alternative to bonds can help both states and yield-deprived investors.

Commodity exporters look to demand from China to boost recovery
David Fyfe (FT) Jun 16, 2020
Economics, not geopolitics, will ultimately determine the country's import portfolio.

Debt investors bet on emerging markets as 'QE' begins to travel
Colby Smith (FT) Jun 16, 2020
Analysts say local stimulus efforts could help to buttress countries' Covid-19 recoveries.

Torrent of new money keeps investments afloat for now
John Redwood (FT) Jun 16, 2020
When to withdraw economic support will be a hugely difficult balancing act.

The UK's fight for free trade cannot be fudged
Robert Shrimsley (FT) Jun 16, 2020
Deals require hard choices and the courage to compromise — the early signs are worrying.

'Frugal four' warn pandemic spending must be responsible
Stefan Lofven (FT) Jun 16, 2020
There is no such thing as new or fresh money. Rescue funds will have to be paid back.

How Covid-19 will change the world
Martin Wolf (FT) Jun 16, 2020
The society that will emerge will probably be even less co-operative and effective.

Whatever Happened to Brexit?
WSJ Jun 16, 2020
The prospect of a no-deal exit should focus minds in Brussels.

The fourth rescue bill needs to repair damage done to the economy and national security
Hugh Hewitt (WP) Jun 16, 2020
Will the Pentagon get on board and push for the measures everyone else seems to have rallied around?

The Great Lockdown through a Global Lens
Gita Gopinath (IMF) Jun 16, 2020
Aside from its unprecedented scale, the Global Lockdown is playing out in ways that are very different from past crises.

U.S. Economic Outlook and Monetary Policy
Richard H. Clarida (FRB Board) Jun 18, 2020
The coronavirus pandemic poses the most serious threat to maximum employment and, potentially, to price stability that the United States has faced in our lifetimes. There is much that policymakers—and epidemiologists—simply do not know right now about the potential course that the virus, and thus the economy, will take. But there is one thing that I am certain about: The Federal Reserve will continue to act forcefully, proactively, and aggressively as we deploy our toolkit—including our balance sheet, forward guidance, and lending facilities—to provide critical support to the economy during this challenging time and to do all we can to make sure that the recovery from this downturn, once it commences, is as robust as possible.

Facing the crisis: the role of tax in dealing with COVID-19
Vitor Gaspar, Navid Hanif, Ceyla Pazarbasioglu, and Pascal Saint-Amans (IMF) Jun 16, 2020
International tax cooperation must be part and parcel of a set of effective and well-coordinated multilateral actions to respond to the crisis.

Unlocking Islamic finance
Brian Caplen (Banker) Jun 16, 2020
Better standardisation and more widespread use of fintech would give the industry a boost.

The Long Climb
Joachim Fels (PIMCO) Jun 16, 2020
Get an inside look at our most recent macroeconomic views and what we believe are important considerations for the gradual, bumpy road to recovery.

Gender discrimination at work is dragging China's growth
Eva (Yiwen) Zhang and Tianlei Huang (PIIE) Jun 16, 2020
A widening gender gap in labor force participation and earnings has accompanied China's economic achievements since the beginning of Deng Xiaoping's economic liberalization. A major factor driving this trend has been the loosening of state control over the marketplace, which has given private sector firms and even state-owned enterprises more latitude in a competitive economic environment to discriminate against women in the workforce and in pay. At the same time, state-supported childcare facilities have declined, putting a burden on women seeking employment and on firms that would have to pay a premium to hire women.

Bond Traders Love the Fed. The PBOC? Not So Much
Shuli Ren (Bloomberg View) Jun 16, 2020
Interest rate volatility engineered by China's central bank has market players staring into the abyss.

Maybe Someday These Fed Rescues Will Backfire
Mark Gongloff (Bloomberg View) Jun 16, 2020
But for now, there's nothing to do but sit back and enjoy them.

Europe Is in Danger of Another Sovereign Debt Doom Loop
Marcus Ashworth and Elisa Martinuzzi (Bloomberg View) Jun 16, 2020
ECB stimulus will encourage banks to hold more national bonds. This is potentially dangerous for the euro zone, as we saw in 2012.

Guess Who Outperforms World in Coronavirus Mayhem
Matthew A Winkler (Bloomberg View) Jun 16, 2020
Africa is the biggest economic and financial surprise in these perilous times.

Japan's New Wave: Cash, Bankruptcies and Inequality
Anjani Trivedi (Bloomberg View) Jun 16, 2020
Covid-19 will widen the wealth gap. Bigger firms will survive, while the small decide it's not worth it.

Biden Must Avoid Obama's Mistakes on the Economy
Karl W Smith (Bloomberg View) Jun 16, 2020
It's not enough to stem a financial crisis; a president also must work to ensure the recovery.

WTO Needs Reform to Be the World's Nimble Trade Referee
Chuck Grassley (Bloomberg View) Jun 16, 2020
It's in American interests to lead the way to a fairer playing field.

A Life in Development
Ruti Teitel (Project Syndicate) Jun 16, 2020
As Argentina faces yet another standoff with its creditors, economists and policymakers should acknowledge that no one, including the IMF, has a compelling strategy to generate sustainable economic growth and prosperity. What Latin America needs is policies designed to improve people's lives, not prove some grand theory.

Strengthening Africa's Best Pandemic Defense
Assia Sidibe (Project Syndicate) Jun 16, 2020
Ensuring that the continent's small and medium-size enterprises have access to the capital and expertise they need is critical to combating COVID-19 effectively. African-owned solutions that are adapted to local conditions and create valuable employment opportunities may be the key to mitigating the pandemic's economic impact.

A New Development Vision for Latin America
Mario Pezzini, Sebastián Nieto Parra, and Juan Vázquez Zamora (Project Syndicate) Jun 16, 2020
Although Latin America has a long development journey ahead of it, the region's policymakers must now respond urgently to citizens' demands. By moving quickly to tackle the causes of popular frustration, governments can bolster wellbeing, trust, and long-term prosperity.

Firm Priorities for Fragile States
David Cameron, Ellen Johnson Sirleaf, and Donald P. Kaberuka (Project Syndicate) Jun 16, 2020
The rich world can no longer reassure itself that poor countries will avoid the worst of the COVID-19 crisis by virtue of their isolation. The pandemic is now hitting these countries especially hard, underscoring the urgent need for renewed global action.

Inequality and poverty effects of the lockdown in Europe
Juan C. Palomino, Juan Gabriel Rodríguez, and Raquel Sebastian (VoxEU) Jun 16, 2020
Enforced social distancing and lockdown measures to contain COVID-19 restrict economic activity, especially among workers in non-essential jobs who cannot 'telework'. These have implications for inequality and poverty. This column analyses the capacity of individuals in 29 European countries to work under lockdown and the potential impact of a two-month lockdown on wages and inequality levels. There will be substantial and uneven wage losses across the board and poverty will rise. Inequality within countries will worsen, as it will between countries although to a lesser extent.

A theory of repression and growth traps
Viral Acharya, Raghuram Rajan, and Jack Shim (VoxEU) Jun 16, 2020
While many theories of international borrowing emphasize its advantages, it has proven difficult to empirically establish a correlation between a developing country's use of foreign financing and good outcomes such as stronger growth. This column proposes a theoretical framework that reconciles the above puzzle. It establishes that a developing country's propensity to save is essential in determining whether the government's ability to borrow in international markets is welfare improving for its citizens or not. Hence, debt is not always 'odious' and alternative policies such as debt ceilings may prove more useful, especially in the midst of the current pandemic.

Negative interest rate policies can signal a commitment to prolonged monetary accommodation
Oliver de Groot and Alexander Haas (VoxEU) Jun 16, 2020
The magnitude of the COVID-induced economic downturn is forcing central banks around the world to rethink the set of monetary policy tools available to them. Many central banks have long shied away from negative interest rates, concerned about the impact on bank profits and financial stability. This column explores how negative interest rate policies can be used by central banks to signal a commitment to a prolonged period of monetary accommodation. Using a quantitative monetary model, it shows that the signalling channel of negative interest rates can result in a rise in banks' net worth even if net interest margins shrink.

Europe Must Stand Up to China Before It's Too Late
Ian Bond (FP) Jun 16, 2020
The EU must defend its values rather than caving to economic pressure from Beijing.

Potential Regional Impacts of a Second Wave of COVID-19
Mark Vitner and Charlie Dougherty (WF Econ Group) Jun 16, 2020
While most state and local economies have begun to partially re-open, new outbreaks of the coronavirus appear to be cropping up around the country. Re-imposed restrictions could potentially set back the national recovery.

Emerging markets can use quantitative easing, too
FT View Jun 17, 2020
Countries that are able to borrow in their own currency face fewer risks.

A bad UK-EU trade deal is better than no deal
FT View Jun 17, 2020
Chances of a breakdown have receded, but any accord this year will be thin.

It is critical to design our Covid-19 recovery for green challenges
Ban Ki-moon (FT) Jun 17, 2020
Global society has been violently rocked but we must collaborate to change behaviour.

Investors want reforms that break through 'wall of resistance'
Zsuzsanna Hargitai (FT) Jun 17, 2020
Legacies of the past remain and are holding the country back, says EBRD regional chief.

A battle over the EU's fiscal rules is looming
Martin Sandbu (FT) Jun 17, 2020
Calls for clarity will intensify as bloc debates recovery fund and seven-year budget.

The Rich Cut Their Spending. That Has Hurt All the Workers Who Count on It.
Emily Badger and Alicia Parlapiano (NYT) Jun 17, 2020
The steepest declines in spending during the coronavirus recession have come from the highest-income places.

Reopen the Economy, More Open Than Ever
Anders Fogh Rasmussen (WSJ) Jun 17, 2020
For Western democracies to flourish, they must first reject statism as the model for post-Covid governance.

Hezbollah head prefers China to IMF for Lebanon bailout
Alison Tahmizian Meuse (AT) Jun 17, 2020
Hezbollah chief claims China is poised to fill Lebanon's economic gap through train, port and power plant outlays

COVID 19: Assessing the Global Corruption Fallout
Frank Vogl (Globalist) Jun 17, 2020
Corruption is bad today, but bound to get worse. Governments' response to the COVID 19 pandemic amplifies the opportunities for abuse.

Could services drive globalization in the post-COVID-19 world?
Addisu Lashitew and Abdul Erumban (Brookings) Jun 17, 2020
A growing chorus of expert opinion predicts that COVID-19 will slow down the forces of globalization, with obituaries being written for its impending death. The pandemic, many say, will be the final straw in a long chain of events that have dented the momentum of global integration, including the China-U.S. trade war, Brexit, and economic nationalism in many parts of the world. As businesses and policy makers shift emphasis from economic efficiency to resilience and flexibility, the process of reshoring production is expected to accelerate, hastening the end of global economic integration.

Flattening the unemployment curve? Policies to support workers' income and promote a speedy labour market recovery
Cyrille Schwellnus, Michael Koelle, and Balazs Stadler (OECD Ecoscope) Jun 17, 2020
The spread of COVID-19 across countries and measures taken by governments to contain it – including shutdowns of many business and restrictions on travel and mobility – have led to employment losses that dwarf those experienced during the economic crisis of 2008-09 in terms of both speed and magnitude. The OECD projects the OECD-wide unemployment rate to increase by around 6 percentage points between the fourth quarter of 2019 and the second quarter of 2020 as compared to an increase of around 2 percentage points between the third quarter of 2008 and the second quarter of 2009.

The EU's recovery fund proposals: crisis relief with massive redistribution
Zsolt Darvas (Bruegel) Jun 17, 2020
Poorer European Union countries and those hardest hit economically by the COVID-19 crisis could obtain up to 15% of their GNI in grants and guarantees from the EU's proposed recovery instruments. Yet the proposal would represent a net benefit for all EU countries, even if there is only a small positive economic impact over the long-term. The proposed very long-maturity loans would lead to non-negligible benefits, exceeding 1% of GDP for some countries.

Understanding the Impact Of COVID-19 On Essential Medicine Supply Chains
Anthony McDonnell, Kalipso Chalkidou, Prashant Yadav and Dan Rosen (CGD) Jun 17, 2020
The COVID-19 pandemic has triggered unprecedented measures by national governments around the world, trade disruptions, and a deep and global economic crisis. All of these factors are, in turn, threatening the supply of essential medicines and other commodities. This is felt most acutely in developing countries (for example, early discussions highlight how Kenya is exposed to medicine shortages), but also in wealthy nations. The widespread nature of these problems reflects a highly complex and highly globalised supply chain for medicines and healthcare commodities. In this blog we outline some of the challenges in the global supply of medicines and introduce a methodology that will enable countries to spot early challenges in supply, allowing them as well as global development partners and industry to plan ahead and pre-empt falling short.

Street Vendors Won't Save China's Economy
Adam Minter (Bloomberg View) Jun 17, 2020
A new push to welcome informal workers back onto the streets will create more problems than it solves.

The Fed Is Headed in the Same Direction as the ECB
Marcus Ashworth (Bloomberg View) Jun 17, 2020
Europe's central bank has blazed a $250 billion trail on corporate bonds. The lesson for Jay Powell is that it's much easier to start buying than to stop.

Greece Looks Like a Safer Destination Now
Ferdinando Giugliano (Bloomberg View) Jun 17, 2020
Athens hopes that its handling of Covid-19 will help tourism. International investors are certainly warming up to the country.

Yield-Curve Control Could Complicate Fed's Exit Strategy
Brian Chappatta (Bloomberg View) Jun 17, 2020
At some point the central bank is going to have to tighten policy, and unwinding all its measures will get tricky.

If Zombie Companies Don't Die, We'll Pay a Price
Noah Smith (Bloomberg View) Jun 17, 2020
The U.S. needs a plan for putting them out of their misery once the Fed stops propping up the economy.

The Baby Boomer Investing Era Is Coming to an End
Conor Sen (Bloomberg View) Jun 17, 2020
Bonds did great while rates were falling, but now out-of-favor investments will do better as governments use more fiscal stimulus.

The Cape Cod Theory of Pandemic Response
Peter R Orszag (Bloomberg View) Jun 17, 2020
Why the debate over the design of future fiscal stimulus measures needs to start now.

Sustainable Development Starts with Children
Helen Clark (Project Syndicate) Jun 17, 2020
The emergence of teen climate activists like Greta Thunberg is no gimmick. In fact, to galvanize climate action and achieve sustainable development, children must be put at the center of national strategies, and giving them a healthy future must be placed above all other concerns.

How Europe Can Live with China
Carl Bildt (Project Syndicate) Jun 17, 2020
With the United States abandoning one global commitment after another, Europe must develop its own strategy for managing China's geopolitical rise. The best approach will be to strike a balance – underpinned by realism – between engagement and competition.

Automation, globalisation, and vanishing jobs
Ester Faia, Sébastien Laffitte, Maximilian Mayer, and Gianmarco Ottaviano (VoxEU) Jun 17, 2020
Understanding the effects of automation and offshoring on labour markets and growth has been a significant topic of interest. This column argues that automation and offshoring fundamentally affect the matching between firms and workers and do so in contrasting ways. It predicts that automation will increase firms' and workers' job selectivity and decrease employment, while offshoring will have the opposite effect. Empirical evidence as well as a quantitative model support this hypothesis and provide a mechanism of technological change typically missed in standard neoclassical reasoning.

The economic effects of COVID-19 containment measures
Pragyan Deb, Davide Furceri, Jonathan D. Ostry, and Nour Tawk (VoxEU) Jun 17, 2020
Containment measures to halt the spread of the 2019 coronavirus pandemic entail large short-term economic costs. This column attempts to quantify these effects using daily global data on real-time containment measures and daily indicators of economic activity. Over a 30-day period from implementation, containment measures have, on average, led to a loss of about 15% in industrial production. Macroeconomic policy measures have however mitigated some of these economic costs. Stay-at-home requirements and workplace closures are most effective in curbing both infections and deaths but are also associated with the largest economic costs.

Decomposing demand and supply shocks during COVID-19
Pedro Brinca, Joao B. Duarte, and Miguel Faria e Castro (VoxEU) Jun 17, 2020
Recent academic discussions have sought to understand whether the economic impact of the COVID-19 crisis and associated lockdown should be ascribed to demand or supply shocks. This debate is of some importance since the underlying shock can have significant implications for stabilisation policy. This column tries to answer these questions by using data on hours worked and wages to estimate labour demand and supply shocks for the aggregate economy and for different sectors through an econometric model. It finds that while labour supply shocks accounted for a larger share of the fall in hours, both shocks were important.

COVID-19 fiscal stimulus measures and household spending in the US
Scott Baker, R.A. Farrokhnia, Michaela Pagel, Steffen Meyer, and Constantine Yannelis (VoxEU) Jun 17, 2020
After a steep decline in spending, US households responded rapidly to the receipt of COVID-19 stimulus payments. Still, relative to similar programs in 2001 and 2008, spending on durables decreased. This column uses high-frequency transaction data to analyse consumption responses to shelter-in-place orders and government-issued stimulus checks across income levels and locations. It shows that larger increases in spending on food and payments--from credit cards to rents and mortgages--reflect a short-term debt overhang and suggest that direct payments failed to stimulate aggregate consumption.

Global Mobility Report
Jay H. Bryson, Erik Nelson, Mike Schumacher & Zachary Griffiths (WF Econ Group) Jun 17, 2020
In this weekly report, we use data from Apple and Google to track mobility to various destinations and by various modes of transportation in selected U.S. states as well as several large foreign economies.

Opponents of more IMF lending may have blood on their hands
Ricardo Hausmann (FT) Jun 18, 2020
If that sounds dramatic, it is nothing compared with the death and suffering that can still be avoided.

In these markets the normal rules do not seem to apply
Seema Shah (FT) Jun 18, 2020
It is treacherous for investors when negative forces can turn positive so quickly.

Cargo ship crews are stuck at sea
Economist Jun 18, 2020
A crewing crisis.

The state-budget train crash
Economist Jun 18, 2020
Why this could cost lives and set back economic recovery.

Even if COVID-19 Goes Away, the Economy Isn't Going Back to "Normal"
Brendan Brown (Mises Wire) Jun 18, 2020
When the current panic and crisis began, we were already in the late stages of a long asset price bubble. The crisis has exposed the fragility of the current system and we won't be going back to where we were before.

The Unemployment Pandemic: Addressing America's Jobs Crisis
Jason Furman (PIIE) Jun 18, 2020
The unemployment crisis is severe. Unemployment insurance has played a critical role both for the workers who have lost their jobs and for the economy as a whole. Unemployment insurance has both positive and negative effects on labor supply, and it can have positive effects on labor market matches. Jobs are currently constrained primarily by lack of demand by employers not by lack of supply of people interested and willing to work. Expanded unemployment insurance should continue and adjust with changes in the unemployment rate. The abrupt expiration of any form of expanded unemployment insurance at the end of July would create problems both for those workers directly affected and for the economy as a whole, reducing GDP by about 2½ percent in the second half of this year—more than a typical year's worth of economic growth. The unemployment insurance system had major shortcomings before the COVID-19 crisis, and it should be permanently reformed. Much more is needed to protect jobs, create jobs, and foster economic recovery.

How Europe is taking another page from US financial history
Jacob Funk Kirkegaard (PIIE) Jun 18, 2020
As the European Union begins to contemplate how its perhaps €500 billion new joint debt to help the economy recover from the pandemic will eventually be repaid, a profound fiscal question arises. Will new sources of direct EU revenues be agreed to repay the debts, or will member states be asked to contribute more funds to do so? Europe, ironically, can once again turn to US history, this time from the 19th and early 20th centuries, when the federal government had not yet acquired the right to levy direct income taxes on Americans.

The Most Troubling China-India Conflict Is Economic
David Fickling (Bloomberg View) Jun 18, 2020
Dwindling trade between Asia's giants removes a restraint on military escalation.

Fear of Infection Hurt the Economy More Than Lockdowns
Noah Smith (Bloomberg View) Jun 18, 2020
There is a middle way — lockdown lite — that allows most activity to continue without snuffing out business.

Killing Bank Profits Is a Pretty Desperate Move
Anjani Trivedi (Bloomberg View) Jun 18, 2020
Asking lenders to pass on their earnings to support small businesses shows China's financial system was failing in the first place.

A Tidal Wave of Bankruptcies Is Coming
Mary Williams Walsh (NYT) Jun 18, 2020
Experts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving.

The Pandemic Must End Our Complacency
Bertrand Badré and Yves Tiberghien (Project Syndicate) Jun 18, 2020
With an economic downturn as severe as the Great Depression and political conditions similar to those in the run-up to World War I, an international system built on globalization now hangs in the balance. The world desperately needs effective collective leadership – and not just to contain COVID-19.

Resilience versus robustness in global value chains: Some policy implications
Sébastien Miroudot (VoxEU) Jun 18, 2020
Some governments assert that global value chains create economic vulnerabilities in times of a pandemic. This column, taken from a recent Vox eBook, examines recent experiences and the risk-management literature. It concludes that it is a mistake to equate self-sufficiency with robustness – putting all the eggs in one basket is still not a good idea. It is also a mistake to focus on production location when the imperative is to radically scale up production of vital medical supplies. Importantly, international supply chains will be needed to produce the billions of doses of COVID-19 vaccine we will soon need to manufacture and distribute.

What price to pay for monetary financing of budget deficits in the euro area
Paul De Grauwe and Sebastian Diessner (VoxEU) Jun 18, 2020
There is growing acceptance that some form of monetary finance is needed, if not inevitable, in light of the severity of the downturn in the euro area. This column argues that while a monetisation of the deficits induced by the COVID-19 crisis would eventually increase the price level so that, after a return to economic normalcy, inflation would rise for a couple of years, this is a price worth paying to avoid future sovereign debt crises in the euro area. Moreover, the ECB, as the most independent central bank in the world, would be well equipped to prevent the inflationary upsurge from becoming permanent.

Inequality: What has happened, why care, and what can be done
Ken Mayhew and Samuel Wills (VoxEU) Jun 18, 2020
Inequality within most developed countries is higher today than it was 30 years ago. Growth in emerging economies has reduced inequality between nations, but the benefits have been unevenly spread within those economies. This column analyses what has happened, why we should care, and what can be done about inequality. Governments have not focused enough on pre-market policies that prevent inequality arising in the first place. Post-market interventions should be seen as too little, too late. Instead, we need a call-to-arms for governments to re-focus on the deep underlying drivers of inequality.

The role of social capital in the spread of Covid-19
Alina Kristin Bartscher, Sebastian Seitz, Sebastian Siegloch, Michaela Slotwinski, and Nils Wehrhöfer (VoxEU) Jun 18, 2020
In the absence of viable medical responses to combat the ongoing Covid-19 pandemic, policymakers have appealed to the social responsibility of their citizens to comply with social distancing rules. This column explores how regional differences in social capital can affect the spread of Covid-19, focusing on seven European countries. The results suggest that areas with high social capital registered between 12% and 32% fewer Covid-19 cases from mid-March until mid-May. A case study of Italy validates the independent role of social capital, showing a consistent reduction in excess deaths and documenting a reduction in mobility prior to the lockdown as a mediating channel.

The Bank Business Model in the Post-Covid-19 World
Elena Carletti, Stijn Claessens, Antonio Fatás, and Xavier Vives (VoxEU) Jun 18, 2020
The effects from the Covid-19 crisis come on top of the combination over the past decade of persistently low interest rates, regulatory changes, and competition from shadow banks and new digital entrants that challenged the traditional bank business model pre-Covid-19. The second report in the CEPR/IESE series on The Future of Banking tackles these crucial challenges, examining the competitive responses of the different players – both incumbents and new entrants – and the associated policy and regulatory issues.

In a digital age, cash still has its attractions
FT View Jun 19, 2020
Habits are changing fast, but it is too soon to declare the end of banknotes.

How to rescue global co-operation on tax
FT View Jun 19, 2020
Europe should hold off on digital levies until US politics is clearer.

The British must learn from coronavirus mistakes
Martin Wolf (FT) Jun 19, 2020
Scale of the forecast economic decline reflects the failure to manage the pandemic effectively.

Emerging markets to face 'judgment day' as QE goes global
Colby Smith (FT) Jun 19, 2020
At least a dozen central banks in the developing world are buying bonds and other assets.

The Rich Cut Their Spending. That Has Hurt All the Workers Who Count on It.
Emily Badger and Alicia Parlapiano (NYT) Jun 19, 2020
The steepest declines in spending during the coronavirus recession have come from the highest-income places.

Can Pax Americana Survive the Coronavirus?
Nicholas Eberstadt (WSJ) Jun 19, 2020
The pandemic could mark the end of the postwar age of globalization.

Covid second wave casts a cloud over oil rally
Tim Daiss (AT) Jun 19, 2020
An OPEC+ production cut deal has bolstered oil prices but rising signs of a coronavirus resurgence threaten to erase the gains.

Will COVID-19 create a new surge in poverty in the Western Balkans?
Jamele Rigolini, Marc Tobias Schiffbauer, and Edith Kikoni (Brookings) Jun 19, 2020
The World Bank Regional Economic Report estimates that, in the absence of government responses, more than 400,000 people in the region could fall into poverty (based on a threshold of $5.50 [2011 PPP] per person per day), and the share of the middle and upper classes (with incomes above $5.50 [2011 PPP] per person per day) would shrink substantially across the region, between 2 and 10 percentage points depending on the country and the length of the crisis.

On the changing asymmetry of global spillovers
Rabah Arezki and Yang Liu (Brookings) Jun 19, 2020
A casual look at data on the evolving structure of trade and financial interdependence suggests that global spillover may indeed be asymmetrical and changing.

Migration to Advanced Economies Can Raise Growth
Philipp Engler, Margaux MacDonald, Roberto Piazza, and Galen Sher (IMF) Jun 19, 2020
Immigrants in advanced economies increase output and productivity both in the short and medium term.

Policy responses to COVID-19: no worker should be left behind
Maria Chiara Cavalleri and Orsetta Causa (OECD Ecoscope) Jun 19, 2020
While the magnitude of the COVID-19 crisis unfolds, millions of people and workers worldwide wonder what the future holds for them. In response to the pandemic, OECD governments implemented unprecedented measures to stop the spread of the virus. Facing the risk of a severe recession, many governments implemented extensive policy packages to help workers and firms weather the COVID-19 storm. Some workers have been more affected than others because of the nature of their work. Those working in the tourism industry and in service sectors involving personal contact, such as hospitality, sports and entertainment, have been suffering the most from the shutdown and the widespread restrictions in mobility. These are sectors where activity is likely to remain affected for quite some time even as economies slowly recovery.

Robot M&A May Be in Post-Pandemic Future
Brooke Sutherland (Bloomberg View) Jun 19, 2020
As hard-hit markets stabilize, industrial dealmaking will reflect a changing landscape, says Houlihan Lokey.

Europe's Frugal Four Are Right About Two Things
Ferdinando Giugliano (Bloomberg View) Jun 19, 2020
Sweden and Denmark would be right to ask why a recovery fund is EU-wide, and Austria and the Netherlands are right to worry about how it will be spent.

U.S. Supply-Demand Mismatch Risks Shortages and Higher Prices
Conor Sen (Bloomberg View) Jun 19, 2020
Consumers seem willing to spend again, but production is a long way from catching up.

China's Economic Crossroads
Kevin Rudd and Daniel Rosen (Project Syndicate) Jun 19, 2020
Given China's failure to follow through on the marketization policies that it announced seven years ago, it is reasonable to be suspicious of the government's latest reform push. Much will depend on what Chinese leaders fear more: disruptive change, or a creeping malaise of their own making.

Boosting firm productivity through joining multinational supply chains
Alonso Alfaro Ureña, Isabela Manelici, and Jose P. Vasquez (VoxDev) Jun 19, 2020
Domestic firms that start supplying to multinational corporations see their productivity grow between 6% and 9%.

Policy communication during COVID
Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber (VoxEU) Jun 19, 2020
The COVID-19 pandemic has resulted in some of the largest monetary and fiscal policy responses around the world. This column uses a large-scale survey of US households during the pandemic to study how new information about the coronavirus and associated policy responses affect households' expectations. It finds that such information treatments have little effect on both households' economic beliefs and future spending plans. This result is a fundamental challenge to workhorse models used by macroeconomists in which the rapid and endogenous adjustment of household expectations is a key driver of macroeconomic outcomes.

The equity shortfall of Italian firms in the COVID crisis
Elena Carletti, Tommaso Oliviero, Marco Pagano, Loriana Pelizzon, and Marti Subrahmanyam (VoxEU) Jun 19, 2020
The COVID-19 induced crisis has caused severe distress for the economy. This column estimates the profit and equity shortfalls triggered by the COVID-19 shock for a representative sample of Italian companies, including large, medium and small companies. A three-month lockdown is found lead to an aggregate annual drop in profits of €170 billion, with an implied equity erosion of €117 billion. Some 17% of all firms, employing over 800,000 workers, are estimated to face severe distress. Small and medium enterprises are affected disproportionately, with 17.2% of affected compared with 6.4% of large firms.

Covid-19 and Brexit: Contrasting sectoral impacts on the UK
Josh De Lyon and Swati Dhingra (VoxEU) Jun 19, 2020
Despite the Covid-19 pandemic, the UK has been continuing its preparations to leave the EU by the end of 2020. Covid-19 has had a huge negative impact on the UK economy and Brexit will present another profound change in circumstances for UK businesses. Analysing real-time business survey data from the UK, this column shows that sectoral impacts of Covid-19 and Brexit are very different. Sectors that have suffered less during the lockdown are the ones that are exposed to bigger negative impacts from Brexit, as measured by actual effects since the Brexit vote and predicted effects from higher trade barriers with the EU.

The stock market and the economy: Insights from the COVID-19 crisis
Gunther Capelle-Blancard and Adrien Desroziers (VoxEU) Jun 19, 2020
During the COVID-19 pandemic and the related economic fallout, the response of the stock markets has raised concerns as well as questions. This column explores the surprising trends. There is some evidence that shareholders have favoured the less vulnerable firms, and that credit facilities and government guarantees, lower policy interest rates, and lockdown measures mitigated the decline in stock prices. However, fundamentals only explain a small part of the stock market variations at the country level. Overall, it is hard to deny that the links between stock prices and fundamentals have been loose at best.

There is a way to make UK aid more effective — this merger is not it
Rory Stewart (FT) Jun 20, 2020
The Foreign Office takeover of DfID is a mistake, but an opportunity has opened up to end the problems caused by central control.

Darker corners of debt markets offer refuge to investors
Michael Mackenzie (FT) Jun 20, 2020
Challenging outlook for stocks shifts focus on to areas that now appear stressed.

Monetary Insanity Is No Basis for Common Ground
Andy Mukherjee (Bloomberg View) Jun 20, 2020
Indians shouldn't be expected to sell the family jewels to help authorities battle Covid-19's economic impact.

Services trade policy since the Great Recession
Ingo Borchert, Joscelyn Magdeleine, Juan Marchetti, and Aaditya Mattoo (VoxEU) Jun 20, 2020
Despite the growing importance of services in output and trade, there has been relatively little information on how services policies have evolved over the past decades. This column presents evidence on services trade policies from a new database created by the World Bank and WTO. It reveals that higher income economies are more open on average than developing economies, but the chronology of reform varies across sectors. In addition, while explicit restrictions are being lowered, regulatory scrutiny is increasing in most sectors, especially in higher income economies.

The impact of COVID-19 on insurers
Divya Kirti and Mu Yang Shin (VoxEU) Jun 20, 2020
The grim impact of COVID-19 – extensive financial dislocations across asset classes and potentially large increases in morbidity and mortality – could pose a challenge to the insurance industry, particularly life insurers. This column urges central banks looking to preserve credit supply to account for changes in insurer risk appetite, which could take place well before capital levels approach regulatory thresholds. Financial stability assessments should examine the implications of the pandemic for insurers, which operate in some countries on a comparable scale to banks.

Merger would damage UK's development clout
FT View Jun 21, 2020
Subsuming DfID back into the Foreign and Commonwealth Office risks politicising aid.

A truly ugly transatlantic trade war is looming
Wolfgang Münchau (FT) Jun 21, 2020
Both the US and EU are being unreasonable, be it over digital taxes, food, gas or cars.

Will public debt be a problem when the Covid-19 crisis is over?
Gavyn Davies (FT) Jun 21, 2020
There is unanimity about macroeconomic policy for now, but not about exit strategy.

The mother of all bailouts isn't finished yet
Robert Samuelson (WP) Jun 21, 2020
The $3.4 trillion Heroes Act may be necessary, but it may reinforce a bad precedent.

Not All Oil Is Equal. As Economies Recover, Which Oils Should Stay in the Ground?
Deborah Gordon (BRINK) Jun 21, 2020
It could take as long as a decade for the economy to fully recover from the pandemic. Oil markets will remain in flux while global producers and refiners rebalance supply with demand, and new oil market choices will need to be squared with climate risks.

Geopolitics After COVID 19: Conflict or Cooperation?
Andrés Ortega (Globalist) Jun 21, 2020
In absolute terms, all states or groups of states around the globe are going to emerge weakened from the 2020 Coronavirus crisis. | By Andrés Ortega

America Is on the Road to Relapse Not Recovery
Niall Ferguson (Bloomberg View) Jun 21, 2020
The U.S. isn't following the example of countries that have shown what a "smart reopening" entails.

Buyer Beware: Oil Stockpiles Are Enormous
Julian Lee (Bloomberg View) Jun 21, 2020
Enough oil has gone into storage to drive every U.S. truck around the world five times.

China's Embrace Is Driving Hong Kong Away
Michael Schuman (Bloomberg View) Jun 21, 2020
Refusing to appreciate the former colony's unique history and identity has led Beijing into a crisis that now threatens to ruin the city.

Firm age, productivity, and intangible capital
Kaoru Hosono, Miho Takizawa, and Kenta Yamanouchi (VoxEU) Jun 21, 2020
How do firms grow as they age after establishment? What drives high growth rates for young firms? Using a large dataset from Japan for the period from 1995 to 2015, this column argues that the accumulation of intangible capital plays a significant role in the growth of physical productivity, which, in turn, accounts for a major part of sales growth as firms age. Of the three types of intangible capital – organisational capital, software, and R&D stocks – organisational capital explains a large part of the sales growth.

Real time weakness of global economy post COVID-19
Danilo Leiva-León, Gabriel Pérez-Quirós, and Eyno Rots (VoxEU) Jun 21, 2020
The Global Weakness Index (GWI) is a real-time measure of how weak the global economy is. This column uses GWI to assess the repercussions of the coronavirus (COVID-19) crisis in real time. It finds that, after the release of certain soft indicators on 2 March 2020, the GWI increased sharply – much faster than in the 2008 crisis. Moreover, the index remained at a record high at the time of writing, 14 May 2020.

The real 'Money Heist' is taking place in private equity
Jonathan Ford (FT) Jun 22, 2020
The depressing part is the willingness of pension funds simply to hand over the swag.

A wave of liquidity will continue to wash over emerging markets
Jonathan Wheatley (FT) Jun 22, 2020
Big tests await but many Covid-19-stricken nations have been able to raise money cheaply.

FCA's new top dog has to prove he is more than a Treasury mandarin
Kate Burgess (FT) Jun 22, 2020
Nikhil Rathi quits LSE for financial watchdog; Saga's customers keen to carry on cruising.

A wave of liquidity will continue to wash over emerging markets
Jonathan Wheatley (FT) Jun 22, 2020
Big tests await but many Covid-19-stricken nations have been able to raise money cheaply.

America Doesn't Need an Industrial Policy
Thomas J. Duesterberg (WSJ) Jun 22, 2020
But there are several things Washington could do to make the economy more resilient and secure.

Covid-19 will accelerate march of the robots
Gordon Watts (AT) Jun 22, 2020
Tech revolution threatens an unemployment crisis in China and developed world after gathering pace during pandemic.

Mismanaging the US Economy: How Trump Defeats Himself
George Tyler (Globalist) Jun 22, 2020
The prospects for a solid U.S. recovery are dim. Trump and the Republicans' economic choices have made matters worse.

To Bolster Global Health Security, What About IMF Gold?
Nancy Birdsall and Amanda Glassman (CGD) Jun 22, 2020
The world's developing countries have a desperate need for increased international assistance to deal with the coronavirus and its frightening economic fallout. In the 70 poorest, low-income countries, mostly in Africa, almost a million people are facing a daily battle just to stave off hunger, and millions more are at acute risk of falling into extreme poverty, all for no fault of their own or even of their own governments. So there are immediate and compelling calls (UN, IMF, G20, Oxfam) for trillions of dollars of additional economic support to poor countries for the duration of the recessionary effect of the pandemic.

You've Got Money: Mobile Payments Help People During the Pandemic
Sonja Davidovic, Delphine Prady and Herve Tourpe (IMF) Jun 22, 2020
Social assistance and cash transfers.

Japan's Work Culture Gets a Needed Covid-19 Shock
Bloomberg View Jun 22, 2020
Remote work may have finally persuaded the nation's corporate leaders that endless hours at the office are a waste.

Here's Why China Wants Trump to Win
Henry Brands (Bloomberg View) Jun 22, 2020
The U.S.-led global order hasn't been under this much stress in 70 years.

Retail Investors' Sprint Runs Into Headwinds
Mohamed Aly El-Erian (Bloomberg View) Jun 22, 2020
Technicals have been carrying the stock market higher, but it is becoming a heavier burden.

China Faces a Rice Bowl Dilemma After Covid
Clara Ferreira Marques (Bloomberg View) Jun 22, 2020
The risk to food supply chains is reviving a push for self-sufficiency. That comes with an environmental cost.

Central Bank Reserves Can't Be Taken for Granted
Andrew Bailey (Bloomberg View) Jun 22, 2020
The current scale of central bank balance sheets mustn't become a permanent feature.

If U.S. Stocks Are a Bubble, They're Hardly Alone
Mark Gilbert (Bloomberg View) Jun 22, 2020
Blaming the market renaissance on "Robinhood Bros" misses a broader picture.

A $10 Trillion Fed Balance Sheet Is Coming
William C Dudley (Bloomberg View) Jun 22, 2020
The enormous figure deserves attention, but for now the risks seem manageable.

Reviving the WTO
Ngozi Okonjo-Iweala (Project Syndicate) Jun 22, 2020
The World Trade Organization has an irreplaceable role to play in transforming countries' economic prospects and the lives of people around the world. Although the COVID-19 crisis has brought the organization's deteriorating health into sharp focus, its further decline is not inevitable.

What the Global Pandemic Response Is Missing
Anne O. Krueger (Project Syndicate) Jun 22, 2020
While developing countries' debt levels have received ample attention in recent months, little has been said about a more immediate problem: their inability to acquire the medical supplies needed to fight COVID-19. To minimize the negative impact, a non-market allocation mechanism must be quickly established.

COVID-19: Putting the Chinese policy reaction into context
Robert Gilhooly, Carolina Martinez, and Abigail Watt (VoxEU) Jun 22, 2020
China has implemented a wide range of measures to support the economy through the ongoing coronavirus shock. This column examines China's policy response, and suggests that the recent loosening in financial conditions should support activity over the next six to nine months, but it will only be at best half that seen in 2016 and a third of that after the Global Crisis given the relative change in financial conditions thus far. Moreover, the policy levers are at best only 40% of that deployed during the Global Crisis. This contrasts with the approach of many other countries, which have reacted more aggressively to the coronavirus shock.

COVID-19 in Developing Economies
Simeon Djankov and Ugo Panizza (VoxEU) Jun 22, 2020
At the beginning of the COVID-19 pandemic, it was hoped that warm weather and younger populations would shield many developing countries from the virus. This hope has not been realised. While the pandemic is mostly under control in many advanced economies, some developing countries in Africa and Latin America are registering an increase in the number of cases and may suffer long lasting consequences from the pandemic. This eBook, Co-published with the International Development Policy journal at the Graduate Institute in Geneva, summarises the early work focusing on developing and emerging economies.

Germany Is Finally Ready to Spend
Joseph de Weck (FP) Jun 22, 2020
In the long run, the COVID-19 pandemic may change Europe's economy for the better.

The Great Pause Was an Economic Revolution
Bruno Macaes (FP) Jun 22, 2020
Governments stopped the world in its tracks during the pandemic--and our relationship to the economy will never be the same again.

Are Banks Exposed to Interest Rate Risk?
Pascal Paul and Simon W. Zhu (FRBSF Econ Letter) Jun 22, 2020
While banks seem to face inherent risk from short-term interest rate changes, in practice they structure their balance sheets to avoid exposure to such risk. Nonetheless, recent research finds that banks cannot offload all of the interest rate risk they are naturally exposed to. Historically, banks' profit margins reflect their compensation for taking on interest rate risk and their stock prices are highly sensitive to changes in interest rates. These findings can help practitioners assess banks' risk exposures and may have implications for unconventional monetary policy.

Long live the new monarchs of the bond market
Robin Wigglesworth (FT) Jun 23, 2020
Scale of central bank action to fight pandemic emblematic of profound shift.

Markets may look optimistic but they are masters of disguise
Katie Martin (FT) Jun 23, 2020
Despite exuberant retail traders, most investors are more cautious than they appear.

Credit defaults are soon to sweep across Europe, like the US
Robert Smith (FT) Jun 23, 2020
Central bank stimulus cannot defy the financial laws of gravity governing defaults.

Long live Jay Powell, the new monarch of the bond market
Robin Wigglesworth (FT) Jun 23, 2020
Scale of central bank action to fight pandemic emblematic of profound shift.

Credit defaults are soon to sweep across Europe, like the US
Robert Smith (FT) Jun 23, 2020
Central bank stimulus cannot defy the financial laws of gravity governing defaults.

Coronavirus and personal debt: the Americans living on a 'knife edge'
Robert Armstrong (FT) Jun 23, 2020
Although US consumers' debt levels are lower than in 2008, a swift end to payment holidays would leave millions vulnerable.

Insurers join World Bank to help small businesses in poorer nations
Jonathan Wheatley (FT) Jun 24, 2020
Scheme will provide up to $5bn in loans to help enterprises hit by coronavirus.

Trump's Immigration Gift to China
WSJ Jun 23, 2020
His limits on foreign workers will send more U.S. jobs overseas.

An exploding coronavirus crisis shows Modi is not up to the task of leading India
Rana Ayyub (WP) Jun 23, 2020
As with each case of sickness, the economic pain also seems to be spreading and is being felt more widespread.

Welcome Transparency on Debt from the World Bank
Masood Ahmed (CGD) Jun 23, 2020
The World Bank has just released country-by-country data on the debt owed to individual creditors by the 73 countries eligible to participate in the G20-sponsored debt service suspension initiative. This is a welcome contribution to enhancing transparency of just who owes what to whom and how much debt service these countries are expected to pay to each creditor this year and for four years to come. President Malpass and his team should be commended for putting this information in the public domain—exactly the type of global public good the World Bank, with its detailed debtor reporting database, is well placed to provide. The intention is to update this data every week, which is an important incentive to countries and creditors alike to ensure that the numbers being used are accurate.

China and the Trans-Pacific Partnership: In or out?
Gary Clyde Hufbauer, Jeffrey J. Schott, and Zhiyao (Lucy) Lu (PIIE) Jun 23, 2020
The Trans-Pacific Partnership (TPP) was designed in 2016 to be almost China-proof, with stringent obligations requiring transparency and trade liberalization. As former US Trade Representative Michael Froman put it, Chinese participation would be welcomed only when China could meet TPP's terms, which it was far from doing. The United States was not keeping China out; China was just not ready to come in.

The Fed's Risky Business Is Worth It
William C Dudley (Bloomberg View) Jun 23, 2020
Saving the U.S. economy matters much more than the health of the central bank's balance sheet.

The Stock-Market Recovery Makes a Lot of Sense
Barry L Ritholtz (Bloomberg View) Jun 23, 2020
The plunge in February and March was overdone based on the decline in earnings.

Pricing GDP-linked bonds
Fernando Eguren-Martin (BOE BankUnderground) Jun 23, 2020
GDP-linked bonds are sovereign debt instruments with repayments linked to the evolution of a country's GDP. Originally proposed by Shiller in the 90s, they have recently been re-invoked in the debate around the policy response to the Covid-19 pandemic. These instruments present an obvious attraction for issuers: repayments are lower at times when the economy is growing relatively slowly, which typically coincides with lower tax earnings. A greater share of the risk of weak growth is then transferred to investors, who will require a compensation given they are typically risk-averse. Therefore, while the design is attractive ex-ante, a relevant question facing sovereigns willing to issue this type of instrument is `at what cost?'. In this post (and in an underlying Staff Working Paper) we provide some tentative answers.

The Stock-Market Recovery Makes a Lot of Sense
Barry L Ritholtz (Bloomberg View) Jun 23, 2020
The plunge in February and March was overdone based on the decline in earnings.

A Central Pillar of the EU Is Under Threat
Ferdinando Giugliano (Bloomberg View) Jun 23, 2020
Under pressure from powerful national governments, Covid-19 and a court ruling, Europe's commitment to antitrust is wavering.

Bank of England Wants to Remove the QE Punch Bowl
Marcus Ashworth (Bloomberg View) Jun 23, 2020
For a central banker in febrile times, Andrew Bailey is sending out some bold signals on reducing the BOE's balance sheet.

A Weaker Dollar Is Just What the World Needs
John Authers (Bloomberg View) Jun 23, 2020
This downward trend marks the easing of a funding squeeze and the Fed's determination to engineer an economic recovery.

The Great Debt Cleanup
Daron Acemoglu (Project Syndicate) Jun 23, 2020
Now that the COVID-19 pandemic has ushered in a steep economic downturn, highly indebted emerging markets and developing countries are facing potentially ruinous fiscal crises, the costs of which will fall on ordinary citizens. Fortunately, there is a way to address the problem that is both practical and just.

Post-Pandemic Economic Leadership Begins in America
Mohamed A. El-Erian (Project Syndicate) Jun 23, 2020
No matter how big an economy is, it is heavily influenced by US economic growth, financial stability, and policy spillovers. With the COVID-19 crisis, the evolution of the global economic-policy paradigm has become an urgent matter, and the rest of the world must not suffer the consequences of a US that does too little, too late.

The COVID Shock to the Dollar
Stephen S. Roach (Project Syndicate) Jun 23, 2020
No country can afford to squander its saving potential – ultimately, the seed-corn of long-term economic growth. That's true even of the United States, where generations of policymakers have come to regard the long-standing belief in American exceptionalism as though it applied to the laws of economics.

Money and debt: Paying for the crisis
Jean-Pierre Landau (VoxEU) Jun 23, 2020
The simultaneous increase in public debt and central banks' balance sheets in advanced economies results in important policy trade-offs. In effect, the 'monetisation' of government debts by central banks transforms current credit and funding risks into future inflation risk. Low interest rate and inflation rate create a conducive policy space for financing exceptional public expenditures in response to the COVID-19 shock. This column argues that, in the presence of very low and stable inflation expectations, this is an optimal policy mix. To be sustainable, the perspective of fiscal dominance must be eliminated and central banks' independence must be respected and reinforced.

Monetary policy and the post-COVID-19 housing recovery
Bruno Albuquerque, Martin Iseringhausen, and Frederic Opitz (VoxEU) Jun 23, 2020
The COVID-19 shock has ended the eight-year long US housing market expansion. At the same time, the Federal Reserve and the US Government have deployed significant resources to help weather the ongoing crisis. But the trajectory of the post-COVID-19 recovery remains uncertain. Using a time-varying parameter model, this column suggests that the next US housing recovery may exhibit similar features to the 2012-19 expansion: a sluggish response of housebuilding to rising demand, but a strong response of house prices.

Preserving capital in the financial sector to weather the storm
Thorsten Beck, Francesco Mazzaferro, Richard Portes, Jean Quin, and Christian Schett (VoxEU) Jun 23, 2020
On 27 May, the ESRB General Board adopted a wide-ranging recommendation to suspend pay-outs across different segments of the European financial system until the end of 2020. This column discusses why arguments for such restrictions weigh stronger than ownership and management rights during these unprecedented times. It provides a rationale for why the recommendation is a wide-ranging one, including banks, investment firms, insurance companies and CCPs and referring to all voluntary pay-outs, including dividends, share buy-backs and variable remuneration to material risk-takers.

EU firms in the post-COVID-19 environment
Debora Revoltella, Laurent Maurin, and Rozália Pál (VoxEU) Jun 23, 2020
COVID-19 and the related lockdowns have taken their toll on the EU corporate sector. This column uses an accounting approach and ORBIS firm-level data to assess the medium-term strategic choices for firms. Assuming three months of lockdown and under different normalisation scenarios, cumulative net revenue losses of EU companies are estimated in the range of 13-24% of EU GDP. These losses create a difficult trade-off for firms between protecting investments and increasing their leverage. To properly accompany the recovery, policies to ease access to credit should be matched to enhanced instruments for long-term, equity-type financing.

Japan Radically Increased Immigration—and No One Protested
Martin Gelin (FP) Jun 23, 2020
To cope with demographic challenges and labor shortages, Japan's right-wing government has boosted immigration. How did it avoid the political backlash plaguing the West?

Reasons to fear the march of the zombie companies
FT View Jun 24, 2020
Policymakers must encourage investment in new businesses and jobs.

Death to the CFA franc. Long live the CFA franc
David Pilling (FT) Jun 24, 2020
Plans for eight west African nations to launch a 'liberated' currency have gone awry.

How coronavirus reminded me that life is a risky business
Patti Waldmeir (FT) Jun 24, 2020
'What do I — and people like me — do now that the world is reopening without us?'

The dangerous war on supply chains
Martin Wolf (FT) Jun 24, 2020
Protectionism in a crisis only concentrates risk domestically and diminishes economies of scale.

A Swiss-Japanese alliance that has thrived in the crisis
Kana Inagaki (FT) Jun 24, 2020
Roche and Chugai provide lessons on how to keep a cross-border partnership intact.

Low interest rates are a tax on savers
Don Ezra (FT) Jun 24, 2020
Central bankers cannot find a way to help borrowers without hurting savers.

Covid-19 crisis will bring change to mining industry
Tom Butler (FT) Jun 24, 2020
Community engagement and social performance will be differentiating factor between companies.

Asset managers can help society while rebuilding wealth
Nicolas Moreau (FT) Jun 24, 2020
The $50tn fund industry has the clout and moral legitimacy to shape corporate decisions.

Corporate rescues should come with strings attached
Patrick Jenkins (FT) Jun 24, 2020
Regulators should apply lessons learnt in 2008 from saving the banks.

Pound is becoming an emerging market currency, says BofA analyst
Eva Szalay (FT) Jun 24, 2020
Brexit has permanently altered investors' views on sterling, warns strategist.

The Jobs We Need
NYT Jun 24, 2020
Workers have been left behind as the U.S. economy expanded and chief executive salaries skyrocketed over the last four decades.

France and the Art of Getting Back to Work
Jean-Marc Vittori (Globalist) Jun 24, 2020
After the Corona pandemic, French firms' management teams have great difficulty convincing their employees … to return to the office.

Germany's short-time work scheme: can its past success be replicated?
Alexandra Effenberger, Michael Koelle and Andrew Barker (OECD Ecoscope) Jun 24, 2020
Germany has avoided a large jump in unemployment in the early stages of the COVID-19 recession, just as it did during the global financial crisis (GFC). One important factor in this success is the well-established short-time work (STW) scheme (Kurzarbeit), whereby the government subsidises wage payments for employees whose hours are cut at companies in temporary distress. Countries such as Austria, Switzerland and Italy have similar established schemes, while others such as the UK, Denmark and Latvia have just recently implemented job retention schemes. A number of questions are pertinent for countries looking to learn from the German experience: how many jobs have been saved by STW, what are the fiscal costs and how much does the scheme's success depend on the specific institutional settings in Germany?

Why the Central Bank "Bailout of Everything" Will Be a Disaster
Daniel Lacalle (Mises Wire) Jun 24, 2020
The largest fiscal and monetary support plan since WW II has been instigated with two dangerous collateral effects: the rise of zombie companies and the collapse of small businesses and startups.

Cyclicals 2.0: Green and Digital
Geraldine Sundstrom (PIMCO) Jun 24, 2020
The text book rules about where to invest following a recession may not apply in a post-pandemic world; more than bricks and mortar, stimulus efforts are green and digital now.

Reopening from the Great Lockdown: Uneven and Uncertain Recovery
Gita Gopinath (IMF) Jun 24, 2020
We are now projecting a deeper recession in 2020 and a slower recovery in 2021.

The Great Value Rebound Was Another Head Fake
John Authers (Bloomberg View) Jun 24, 2020
Growth stocks are stretching their lead again, surpassing even the peak of the 2000 dotcom bubble.

Germany Quietly Avoids a Disastrous Confrontation
Andreas Kluth (Bloomberg View) Jun 24, 2020
Last month, the country's top judges threatened to wreck Europe's monetary and legal order. Now the problem's being solved.

A 100-Year Bond at Less Than 1%? It's No Big Deal
Marcus Ashworth (Bloomberg View) Jun 24, 2020
Nothing says it's cheap to borrow quite like Austria's latest century bond.

Don't Repeat This Crisis Error Once Dark Hours Pass
Daniel Moss (Bloomberg View) Jun 24, 2020
Some policy makers in Asia are wavering on extending stimulus. They should resist the temptation to end support too early.

Explaining China's Economic Resilience
Zhang Jun (Project Syndicate) Jun 24, 2020
It is naive to believe that forced technological decoupling, trade sanctions, or forced changes to global supply chains will put an end to China's future economic expansion. If critics are too short-sighted to see this, it will be their loss.

The Main Street Manifesto
Nouriel Roubini (Project Syndicate) Jun 24, 2020
The historic protests sweeping America were long overdue, not just as a response to racism and police violence, but also as a revolt against entrenched plutocracy. With a growing number of Americans falling into unemployment and economic insecurity, while major corporations take bailouts and slash labor costs, something had to give.

What Today's Bailouts Can Do for Tomorrow's Economies
Saadia Zahidi (Project Syndicate) Jun 24, 2020
With governments around the world having already injected some $9 trillion into the economy, there can be no doubt that the COVID-19 pandemic has ushered in a new era in which public policy will play a larger economic role than seemed imaginable just a few months ago. How should governments embrace the opportunity?

Africa Is More Resilient Than You Think
Landry Signé (Project Syndicate) Jun 24, 2020
The short-term shock of the COVID-19 pandemic and its economic fallout will have a significant impact across Africa. But the continent has a newfound resilience and will come back stronger, especially if African governments seize the current opportunity for effective leadership.

How to Aid Syria Without Aiding Assad
Charles Thépaut (FP) Jun 24, 2020
U.N. agencies have submitted themselves to government control and approval. Donors must demand higher humanitarian standards or send their money through other channels.

What do recoveries from past US recessions teach us about the recovery from the pandemic recession?
Robert Hall and Marianna Kudlyak (VoxEU) Jun 24, 2020
The global COVID-19 pandemic has led to job loss of catastrophic proportions in the United States. This column looks at recoveries from recessions over past 70 years to assess how the US labour market might recover from this job loss of unprecedented magnitude. Remarkably consistent recoveries have occurred in the US after every recessionary shock that caused a spike in unemployment, and there are reasons to believe that the recovery from the current shock will be more rapid, because unemployment contains a much larger fraction of workers on temporary layoff than in previous recoveries. However, there is a great deal of uncertainty about the possible recovery rate.

The Hidden Cost of Trade Liberalization: Input Tariff Shocks and Worker Health in China
Haichao Fan, Faqin Lin, and Shu Lin (VoxChina) Jun 24, 2020
Can intermediate input trade liberalization affect worker health in a developing country like China, and if so, how? Do the impacts differ between skilled and unskilled workers? What are the welfare implications of input tariff reductions once health factors are considered? Professors Haichao Fan of Fudan University, Faqin Lin of China Agricultural University, and Shu Lin of the Chinese University of Hong Kong develop a theoretical model and present empirical evidence to show how input trade liberalization affects worker health and its heterogeneity across skill levels using China's World Trade Organization (WTO) accession as a natural experiment.

Will It Be a Summer of Stimulus for Congress?
Michael Pugliese and Hop Mathews (WF Econ Group) Jun 24, 2020
When Congress returns from recess in mid-July, it will face a critical few-week period to consider additional fiscal stimulus. We view the odds of another large (>$500 billion) bill as a bit better than fifty-fifty.

Global Mobility Report
Jay H. Bryson, Erik Nelson, and Mike Schumacher (WF Econ Group) Jun 24, 2020
In this weekly report, we use data from Apple and Google to track mobility to various destinations and by various modes of transportation in selected U.S. states as well as several large foreign economies.

Risks from a Resurgence in COVID-19
Charlie Dougherty, Shannon Seery, Erik Nelson, and Zachary Griffiths (WF Econ Group) Jun 24, 2020
Cases of COVID-19 are rising rapidly in many U.S. states. So far, local authorities have been hesitant to re-impose draconian lockdown measures like those implemented in March and April. But even without state-wide lockdowns and business closures, economic activity can still take a meaningful hit in areas where new virus cases are rising sharply.

IMF downgrades are a warning to the world
FT View Jun 25, 2020
Fund's forecasts reflect the fact that the pandemic is not under control.

Net-zero goals for oil companies do not tell the whole story
Mike Coffin (FT) Jun 25, 2020
Without interim targets, groups are vulnerable to accusations of 'greenwashing'.

How to invest when 'safe' assets are no longer really safe
Sophie Huynh (FT) Jun 25, 2020
Investors were unsettled during Covid sell-off when Treasuries dropped alongside equities.

Germany flexes its muscles on foreign investment
Joe Miller (FT) Jun 25, 2020
Berlin has taken a stake in vaccine developer CureVac and is tightening rules on overseas money more broadly.

López Obrador's anti-corruption push is failing
Jude Webber (FT) Jun 25, 2020
Average bribe to public officials has soared despite president's anti-graft rhetoric.

US capitalism has been shattered
Henry Kaufman (FT) Jun 25, 2020
The coronavirus response is paving a path to government control of the economy.

Africa needs its own 'repo' market
Vera Songwe (FT) Jun 25, 2020
G20 central banks should spur recovery from the crisis by backing a new lending vehicle.

Covid-19 crisis sparks global debt risks
Gordon Watts (AT) Jun 25, 2020
Fears of a US dollar plunge add to worldwide economic concerns after IMF paints a grim picture amid virus pandemic.

Virus stress is back, and with it, the US dollar
Uwe Parpart (AT) Jun 25, 2020
US jobless claims numbers critical in gauging the country's economic recovery.

The IMF downgrades its global growth forecasts
Economist Jun 25, 2020
High debts and high asset prices worry Washington wonks.

A Never-Ending Story of Bailouts, Moral Hazard, and Low Economic Growth
Klajdi Bregu (Mises Wire) Jun 25, 2020
The history of bailouts in the United States is a record of broken promises and growing moral hazard.

CDI 2020: China's Commitment to Development
Ian Mitchell and Euan Ritchie (CGD) Jun 25, 2020
Isn't development finance China's strength?

The US has outspent France on job retention and other support for SMEs but had less success
Jérémie Cohen-Setton and Jean Pisani-Ferry (PIIE) Jun 25, 2020
Job retention schemes and other support for small and medium-sized enterprises (SMEs) that governments in the United States and Europe introduced in response to the COVID-19 pandemic have had mixed success. The US program has been more expensive but less effective than the French approach at curbing unemployment. From March to May 2020, the United States spent 1.8 percent of its 2019 GDP on job retention schemes, most notably on the Paycheck Protection Program (PPP), while France's chômage partiel (partial unemployment) scheme and fonds de solidarité (solidarity funds) for SMEs cost a combined 1.4 percent of its 2019 GDP.

Financial Conditions Have Eased, but Insolvencies Loom Large
Tobias Adrian and Fabio Natalucci (IMF) Jun 25, 2020
Amid the human tragedy and economic recession caused by the COVID-19 pandemic, the recent surge in risk appetite in financial markets has caught analysts' attention. After sharp declines in February and March, equity markets have rallied back, in some cases to close to their January levels, while credit spreads have narrowed significantly, even for riskier investments. This has created an apparent disconnect between financial markets and economic prospects. Investors seem to be betting that lasting strong support from central banks will sustain a quick recovery even as economic data point to a deeper-than-expected downturn, as shown in the June 2020 World Economic Outlook Update.

Scotland Should Start a Sovereign Wealth Fund
Mark Gilbert (Bloomberg View) Jun 25, 2020
Standalone investment vehicles would be the best way for nations to channel their state aid into equity holdings.

Invest in Public and Private Infrastructure Right Now
Karl W Smith (Bloomberg View) Jun 25, 2020
The federal government can help fund all of it, at very low cost.

Fed Repeats Error of 2008 With Tight Money
Ramesh Ponnuru (Bloomberg View) Jun 25, 2020
There is a lot more the central bank can do, and inflation is not a worry.

America's Uncertain Recovery
Michael J. Boskin (Project Syndicate) Jun 25, 2020
Predicting the speed and strength of the United States' recovery from the current recession is extremely difficult. But what is clear is that policymakers must boost incentives to work in normal times when jobs are plentiful, while strengthening the safety net for when they are not and for those who are unable to work.

No More Free-Lunch Bailouts
Mariana Mazzucato and Antonio Andreoni (Project Syndicate) Jun 25, 2020
With governments spending on a massive scale to save industries and mitigate the economic fallout from COVID-19, they should be positioning their economies for a more sustainable future. Fortunately, far from remaining taboo, using state aid to change private-sector behavior has become common sense.

The China "Constrainment" Doctrine
Chris Patten (Project Syndicate) Jun 25, 2020
Liberal democracies must defend their belief in a global order based on credible international agreements and the rule of law. So, although democratic governments should be prepared to offer China incentives for good behavior, they must be prepared to deter bad behavior vigorously.

Trade shocks and credit reallocation: Lessons from Italy
Stefano Federico, Fadi Hassan, and Veronica Rappoport (VoxEU) Jun 25, 2020
In a period where the backlash against trade and globalisation is at historical high point, it is crucial to understand the frictions that prevent a full realisation of the gains from trade. This column takes evidence from Italy and contributes to the debate by identifying a novel channel: the endogenous funding constraint of banks whose loan portfolios are affected negatively by the liberalisation. There are spillovers between 'losers' and 'winners' from trade that operate through banks, which hinder the reallocation of resources towards firms that should actually expand after the liberalisation.

COVID-19 and the macroeconomic effects of automation
David Bloom and Klaus Prettner (VoxEU) Jun 25, 2020
Over the last decade there has been a tremendous progress in automation. Many tasks previously seen as un-automatable can now be performed without human labour, and the number of industrial robots in use has increased sharply. This column describes the recent trends in automation and argues that its principal effects are to increase output per capita at the expense of rising inequality. Advancing technologies have mainly replaced the routine tasks of low-skilled workers, while the incomes robots generate flow to wealthier capital owners. The current COVID-19 pandemic is likely to reinforce these trends, raising the need for a policy response.

Covid and the nature of capitalism
Philippe Aghion, Helene Maghin, and André Sapir (VoxEU) Jun 25, 2020
The COVID-19 pandemic has shed light on the structural dichotomy between the models of capitalism operating in Europe and the US; the former offers better protection for its citizens while the latter shows greater economic dynamism. This column argues that for all the harm COVID-19 has caused, the crisis has also provided an opening to rethink the versions of capitalism practised on both sides of the Atlantic. Some degree of convergence towards a better model is desirable, the authors suggest, and perhaps even possible.

The battle to be Asia's premier financial centre
FT View Jun 26, 2020
Regional rivals are poised to take advantage of Hong Kong's clash with Beijing.

The work-from-home revolution is only just beginning
Richard Waters (FT) Jun 26, 2020
With new tools to remove barriers within and between organisations, the crisis brings alluring glimpse of the future.

'Atrocious' governance in oil and gas allows huge rewards for failure
Myles McCormick (FT) Jun 26, 2020
Top executives are taking big bonuses even as companies stagger into bankruptcy.

Hail the dawn of a V-shaped recovery
Merryn Somerset Webb (FT) Jun 26, 2020
Ditch today's bias to misery. Normal times will be back soon.

Sterling has not become an emerging market currency
Jemima Kelly and Claire Jones (FT) Jun 26, 2020
And neither will it any time soon.

Sterling has not become an emerging market currency
Yuan Yang and Nian Liu (FT) Jun 26, 2020
And neither will it any time soon.

Global policy co-operation would strengthen the recovery from the pandemic
Nigel Pain and Véronique Salins (OECD Ecoscope) Jun 26, 2020
The COVID-19 pandemic saw governments throughout the world impose stringent containment measures to contain the spread of the virus, including the partial or total shutdown of the activity in many sectors. These necessary measures succeeded in slowing the spread of infections and reducing the death toll, but have severely impacted economic activity, with GDP declines of more than 20% in many countries during shutdowns and a surge in unemployment.

Outlook for Latin America and the Caribbean: An Intensifying Pandemic
Alejandro Werner (IMF) Jun 26, 2020
Latin American countries should be cautious in reopening their economies and allow science and data to guide the process.

The Fed Just Bungled Its Bank Stress Tests
Natasha Sarin (Bloomberg View) Jun 26, 2020
A more thorough reckoning is needed to bolster confidence.

A Biden Presidency May Be Just What Markets Need
Conor Sen (Bloomberg View) Jun 26, 2020
Donald Trump's economic plan failed to alter the U.S.'s slow-growth trend. An agenda that shifts income to workers should do better.

India's Economy Is Ailing From More than Covid-19
Mihir Sharma (Bloomberg View) Jun 26, 2020
The virus is only going to make a growth slowdown caused by declining investment even worse.

The Triple Crisis Shaking the World
Joschka Fischer (Project Syndicate) Jun 26, 2020
More than just a public-health disaster, the COVID-19 pandemic is a history-defining event with far-reaching implications for the global distribution of wealth and power. With economies in free-fall and geopolitical tensions rising, there can be no return to normal: the past is passed, and only the future counts now.

A Stronger Recovery Through Better Accounting
Willem H. Buiter, Ian Ball, and Dag Detter (Project Syndicate) Jun 26, 2020
Given that the COVID-19 crisis demands unprecedented levels of stimulus spending, policymakers should use the occasion to adopt a more flexible form of public-sector accounting. Insofar as public-sector assets like infrastructure add to the state's "net worth," they should be put to use generating new revenue flows.

The American Muddle
Andrew Sheng and Xiao Geng (Project Syndicate) Jun 26, 2020
Longstanding and bipartisan pretensions of American exceptionalism, rising domestic concerns, and a lack of policy clarity suggest that, even if Donald Trump is voted out in November, the US-led cooperation the world needs will not soon emerge. But another four years of Trump would almost certainly make matters worse.

The Retreat from Globalization
William H. Janeway (Project Syndicate) Jun 26, 2020
The COVID-19 pandemic has hastened a process that began with the collapse of Lehman Brothers in 2008 and has gained further momentum during the era of Donald Trump. The second great wave of globalization is over, and everything from trade and technology to finance and economic governance has become vulnerable to radical change.

A new measure of openness
Jean Imbs and Laurent Pauwels (VoxEU) Jun 26, 2020
Exposure to foreign shocks is often thought to be highly dependent on foreign trade and measures of openness usually build exclusively on measures of direct trade. This column argues that in a world of global value chains, focusing on direct trade gives a distorted view of the exposure to foreign shocks. It proposes a new measure of openness which computes the fraction of gross output sold to downstream customers located abroad. This measure finds most sectors to be more open and this increased openness is estimated to cause rises in productivity and contagion, without observable effects on growth.

From Smoot-Hawley to 'America first' and 'strategic sovereignty'
Koen Berden, Joseph Francois, and Fredrik Erixon (VoxEU) Jun 26, 2020
Calls for more protectionism have been on the rise for some time now, and have surged again with the Covid-19 pandemic. This column points to similar policies and their negative consequences during the Great Depression. Discussing similarities and differences of the economic situation between then and now and drawing on lessons from the Great Depression, it highlights the very negative consequences of increasing protectionism.

Foreign Worker Visas Are the Tech Industry's Dirty Secret
Vivek Wadhwa (FP) Jun 25, 2020
Trump's suspension of visas will only prolong the recession. Here's how to reform them instead.

Resurgence in COVID-19 Threatens to Derail the Recovery
Mark Vitner and Charlie Dougherty (WF Econ Group) Jun 26, 2020
New case growth and hospitalizations appear to be accelerating primarily in the Sun Belt. Even without new lockdowns, the economic toll from acute COVID-19 outbreaks in multiple metro areas will begin to add up.

Governments' tech spending could help keep equity rally alive
Michael Mackenzie (FT) Jun 27, 2020
Investors going for growth should not ignore companies outside of America.

China's Rise Heralds Return of the Domino Theory
Henry Brands (Bloomberg View) Jun 27, 2020
Seventy years ago the Korean War raised legitimate fears that one U.S. loss could set off communist victories across the globe.

China Should Join Trade Deal the U.S. Abandoned
Henry Huiyao Wang (Bloomberg View) Jun 27, 2020
Chinese membership in the successor to the Trans-Pacific Partnership would help revive the post-pandemic global economy.

The world's poor cannot protect themselves well from the novel coronavirus
Caitlin Brown, Martin Ravallion, and Dominique van de Walle (VoxEU) Jun 27, 2020
Recommendations to limit the spread of COVID-19 call for social distancing, washing, and access to information and treatment. However, people need to be in household environments that allow them to follow those recommendations. This column examines the relationship between poverty and the adequacy of the home environment. There is a strong wealth effect both within and between countries, where the poor are less likely to have the kind of dwellings and infrastructure to follow WHO recommendations. Complementary policies to address such inadequate home environments are needed.

Corporate rescues need a strategic purpose
FT View Jun 28, 2020
Britain should use the pandemic to spell out its industrial policy goals

The safe-asset shortage after Covid-19
Gavyn Davies (FT) Jun 28, 2020
Demand has outstripped supply since 2009 but the latest crisis may help to redress the balance.

A rapid rebound would challenge EU contradictions
Wolfgang Münchau (FT) Jun 28, 2020
While welcome, swift economic recovery would pose awkward questions for monetary and fiscal policy.

Pension funds are playing a loser's game in alternative assets
Jonathan Ford (FT) Jun 28, 2020
High fees have morphed into a benefit-free annual donation to the finance industry.

Powell Has Become the Fed's Dr. Feelgood
James Grant (WSJ) Jun 28, 2020
Overprescription of monetary medicine has the economy addled, addicted and searching for a fix.

It's Hard to Be the Next China, Not Impossible
Andy Mukherjee (Bloomberg View) Jun 28, 2020
The main obstacle to India becoming an export powerhouse may be the pull of its own protectionist past.

Trump's Inaction Makes Oil Market Management Harder
Julian Lee (Bloomberg View) Jun 28, 2020
Whatever happens with the pandemic, an oil output deal that doesn't include the world's biggest producer makes it even harder to do.

China's Financial System Is Running Out of Room
Anjani Trivedi (Bloomberg View) Jun 28, 2020
Beijing must resist watering down rules to clean up wealth management as angry mom-and-pop investors want their money back.

Why private capital will benefit from the crisis
Robin Wigglesworth (FT) Jun 29, 2020
Private markets are one of the few areas where decent investor returns still look feasible.

EU debt plan makes sense and is worth backing
Karel Lannoo (FT) Jun 29, 2020
Next month European leaders should endorse eurobonds to counter Covid-19 crisis.

The EU needs a €5tn tech and green investment plan
Corrado Passera (FT) Jun 29, 2020
If Europe is to remain globally relevant, a game-changing approach is required.

Capitalism After the Coronavirus
Al Gore and David Blood (WSJ) Jun 29, 2020
The pandemic provides an opportunity to build a resilient, healthy, fair and zero-carbon economy.

As the Pandemic Surges in Poor Countries, Why Does the IMF Still Forecast a Milder Economic Crisis for Them?
Justin Sandefur and Arvind Subramanian (CGD) Jun 29, 2020
IMF forecasts of growth in 2020, April versus June 2020.

Vietnam's Success in Containing COVID-19 Offers Roadmap for Other Developing Countries
Era Dabla-Norris, Anne-Marie Gulde-Wolf, and Francois Painchaud (IMF) Jun 29, 2020
The father of the Vietnamese nation, Ho Chi Minh, once noted that: "The storm is a good opportunity for the pine and the cypress to show their strength and their stability." Vietnam has so far shown strength and stability in weathering the COVID-19 storm, and offers a successful example of how a developing country can fight a pandemic.

Revisiting the White Swans of 2020
Nouriel Roubini (Project Syndicate) Jun 29, 2020
At the start of the year, when COVID-19 was barely on anyone's radar outside of China, the global economy was entering a fraught phase, facing a range of potentially devastating tail risks. And though the pandemic has since turned the world on its head, all of these threats remain – and some have become more salient.

Broadband for All
John B. Taylor and Jack Mallery (Project Syndicate) Jun 29, 2020
By driving a large share of work and education online, the COVID-19 pandemic has likely triggered a permanent change in many economic sectors. That makes closing the digital divide and ensuring universal Internet access more urgent than ever.

How Inequality Fuels COVID-19 Deaths
Jeffrey D. Sachs (Project Syndicate) Jun 29, 2020
High inequality undermines social cohesion, erodes public trust, and deepens political polarization, all of which negatively affect governments' ability and readiness to respond to crises. This explains why the United States, Brazil, and Mexico account for nearly half of the world's reported deaths since the start of the pandemic.

Europe's Self-Help Moment
Mark Leonard (Project Syndicate) Jun 29, 2020
The COVID-19 crisis has created an opening for stronger collective European action. But policymakers must understand that the demands of voters across the continent for greater cooperation do not reflect an appetite for institution-building, but rather a deeper anxiety about losing control in a perilous world.

Credible emerging market central banks could embrace quantitative easing to fight COVID-19
Gianluca Benigno, Jon Hartley, Alicia García-Herrero, Alessandro Rebucci, and Elina Ribakova (VoxEU) Jun 29, 2020
Emerging economies are fighting COVID-19 and the economic sudden stop imposed by the containment and lockdown policies, in the same way as advanced economies. However, emerging markets also face large and rapid capital outflows as a result of the pandemic. This column argues that credible emerging market central banks could rely on purchases of local currency government bonds to support the needed health and welfare expenditures and fiscal stimulus. In countries with flexible exchange rate regimes and well-anchored inflation expectations, such quantitative easing would help ease financial conditions, while minimising the risks of large depreciations and spiralling inflation.

The Unequal Impact of COVID-19: Why Education Matters
Mary C. Daly, Shelby R. Buckman, and Lily M. Seitelman (FRBSF Econ Letter) Jun 29, 2020
Since COVID-19 hit the United States, more than 20 million American workers have become unemployed and countless others have left the labor force altogether. While the labor market disruptions have affected workers in a wide set of industries and occupations, those without a college degree have experienced the most severe impact. Addressing gaps in educational attainment will be important to creating better economic resiliency for individuals against future shocks.

Unemployment and inflation in the Covid-19 recession
David Baqaee and Emmanuel Farhi (VoxEU) Jun 29, 2020
Covid-19 is an unusual combination of supply and demand shocks. These shocks propagate through supply chains, causing different sectors to become demand-constrained or supply-constrained. This column uses a disaggregated Keynesian model to identify the shocks, classify the sectors, and draw implications for policy. Negative sectoral supply shocks and shocks to the sectoral composition of demand generate more than 7% inflation, and this inflation is kept in check by a large negative aggregate demand shock. There is considerable slack in economy, with 6% Keynesian unemployment, but it is concentrated in certain sectors. As a result, untargeted aggregate demand stimulus, while desirable, is less effective than in a typical recession.

How remittances affect long-run economic change in rural labour markets
Taryn Dinkelman (VoxDev) Jun 29, 2020
Labour migration acts as one of the conduits for capital to flow from rich to poor countries. In 2019, remittances from international migrants were on course to be the largest source of foreign...

Why a Trade War With China Is a Bad Idea for India
James Crabtree (FP) Jun 29, 2020
New Delhi risks responding to a deadly border skirmish by making its economy more insular. Few things would benefit Beijing more.

What happens when asset prices are in the grip of central banks?
John Plender (FT) Jun 30, 2020
Markets contemplate financial repression of the kind operated by the Fed around WW2.

Is Europe's recovery set to mirror China's?
Claire Jones (FT) Jun 30, 2020
Buoyed by state support, consumers could provide more of a lift. But with global demand weak, production looks set for a slower return to form.

The COVID Crisis Supercharged the War on Cash
Claudio Grass (Mises Wire) Jun 30, 2020
The COVID panic gave the world's regimes a new reason to claim that physical cash should be outlawed. But this is just one of many strategies now in play to end the relative privacy and freedom cash provides.

Reopening Asia: How the Right Policies Can Help Economic Recovery
Chang Yong Rhee (IMF) Jun 30, 2020
Asia is heavily dependent on global supply chains and cannot grow while the whole world is suffering.

Redesigning UK Aid for Research and Development
Euan Ritchie, Lee Robinson and Charles Kenny (CGD) Jun 30, 2020
The right way to support technology R&D.

Sunny Third-Quarter Economic Outlook Turns Cloudier
Mohamed Aly El-Erian (Bloomberg View) Jun 30, 2020
Confidence is waning in economic improvement as the Covid-19 situation worsens in several states.

The Road to COVID-19 Enlightenment
Ricardo Hausmann (Project Syndicate) Jun 30, 2020
We have yet to identify the best explanations for countries' varying success in controlling the pandemic, which obviously is enormously valuable when designing public-health strategies with potentially huge consequences. But knowledge does not advance just by formulating plausible hypotheses.

The COVID Class War
Yanis Varoufakis (Project Syndicate) Jun 30, 2020
The European Union's proposed recovery fund to counter the pandemic's economic fallout seems destined to leave the majority in every member state worse off. Finance will again be protected, if badly, while workers are left to foot the bill through new rounds of austerity.

Making Multinationals and the Wealthy Pay
José Antonio Ocampo and Tommaso Faccio (Project Syndicate) Jun 30, 2020
The poor and vulnerable are already suffering the most from the COVID-19 pandemic; they must not be left to carry the economic burden of rescue packages as well. It is time for those who have the most – and have long avoided paying their fair share – to start pulling their weight.

Eight priorities to strengthen international cooperation against Covid-19
Aida Caldera and Shashwat Koirala (VoxEU) Jun 30, 2020
International cooperation amplifies individual countries' efforts; in the fight against the COVID-19 pandemic, international cooperation is not only useful, but indispensable. This column discusses eight priorities to strengthen international cooperation against COVID-19, both in the short term for crisis response, and to facilitate an inclusive and sustainable recovery. In the short run, cooperation between governments is needed to curb the pandemic and expedite exit from the crisis. In the medium and long run, internationally coordinated policies can facilitate recovery and the rebuilding of socioeconomic systems in inclusive and sustainable ways and help prepare for future risks and pandemics.

Just-in-time supply chains after the Covid-19 crisis
Frank Pisch (VoxEU) Jun 30, 2020
The Covid-19 pandemic has re-opened debate about the merits and drawbacks of highly coordinated global supply chains in manufacturing. This column documents the economic relevance, geographical properties and ownership structure of French manufacturing firms in international just-in-time supply chains – as well as potential implications for global value chains in a post-Covid-19 world. Just-in-time supply chains are likely to become more prevalent, contribute to further regionalisation of international trade, and generate an increase in multinational production.

Usable bank capital
Alissa Kleinnijenhuis, Laura Kodres, and Thom Wetzer (VoxEU) Jun 30, 2020
The COVID-19 induced 'Great Lockdown' has cast doubt on the efficacy of bank buffers in supporting the real economy in times of crisis. Despite accommodative regulatory and supervisory action, banks remain hesitant to draw on their buffers to maintain credit provision. Recognising the difficulty in judging the demand for credit in the midst of the COVID-19 crisis, this column focuses on the potential supply of credit and explores the obstacles to 'usability' of bank capital. It concludes that the current capital framework falls short: there is not enough 'usable capital', and the disincentives to actually draw it down are too strong. Finally, it recommends improvements in current capital framework to overcome these issues.

Addressing Population Challenge Is Not Impossible
Joe Bish (YaleGlobal) Jun 30, 2020
Societies can avoid a world population of 10.8 billion and related disasters.