News & Commentary:

Articles/Commentary

China’s domestic credit rating agencies see no debt problem
James Kynge (FT) Jul 1, 2016
Message that all is in order from local groups is in contrast to warnings from offshore.

Venezuela’s democratic façade has completely crumbled
Moisés Naim and Francisco Toro (WP) Jul 1, 2016
Hugo Chávez’s populist promise has given way to corruption and brutality as the Venezuelan people suffer.

A plan to deal with the next pandemic
Jim Yong Kim (WP) Jul 1, 2016
The Pandemic Emergency Financing Facility will get money where it is needed faster, allowing a faster response to the next deadly outbreak.

A World in Crisis, and No Genius in Sight
Peggy Noonan (WSJ) Jul 1, 2016
An old order is being swept away, and political leaders everywhere seem lost.

Paris Club 60th Anniversary—Keynote Address
Christine Lagarde (IMF) Jul 1, 2016
From the IMF's perspective, the Paris Club has played an invaluable role in resolving a number of difficult crises. However, with new emerging vulnerabilities, and structural shifts in the landscape of official finance, I see three major areas where it will be important for the Paris Club to continue to adapt. I believe it should (1) broaden its membership to include other major official creditors, (2) extend financing innovations in recent Paris Club agreements, and (3) address the issues raised by public holdings of sovereign bonds.

Brexit Is a Disastrous Experiment in Deglobalization
C. Fred Bergsten (PIIE) Jul 1, 2016
Brexit is an experiment in deglobalization. As the pound tanks and British politics implode, investment will dry up and the entire United Kingdom will almost certainly plunge into recession.

US and Global Trade: Economic Fact and Political Fiction
Pedro Nicolaci da Costa (PIIE) Jul 1, 2016
Proponents of more open trade may have oversold its benefits during the 1990s heyday of commercial liberalization. Now they are reaping some consequences as anti-trade rhetoric vastly exaggerates its costs, with an impressive amount of political traction.

Brexit is a Wake-Up Call for Development Economists
Vijaya Ramachandran and Jennifer Richmond (CGD) Jul 1, 2016
The Brexit vote illustrates what can happen when people feel their job opportunities are suffering due to liberalized trade policies. If we want open migration and trade policies, we need to focus on domestic job losses.

Brexit: What a Difference a Week Makes
Jan Zilinsky and Pedro Nicolaci da Costa (PIIE) Jul 1, 2016
Britain’s decision to part ways with the European Union in a referendum last week was a classic example of what former US Defense Secretary Donald Rumsfeld might call a “known unknown.”

The UK Opts Out: Four Major Effects
Stephan Richter (Globalist) Jul 1, 2016
High time for a reality check on what the British vote really means – for the UK, Europe and the world.

The English Patient: Help Needed
Thomas Mayer (Globalist) Jul 1, 2016
A “Brexit light” would help heal the divisions of British society and lead to a more flexible EU.

Blame the Brexit Liars, Not the Duped Voters
Tim Farron (Bloomberg View) Jul 1, 2016
Britain's relationship with Europe is still worth fighting for.

Brexit Forces Stretched Central Banks to Do More with Less
Mohamed Aly El-Erian (Bloomberg View) Jul 1, 2016
The Fed, BOE and ECB go it alone as political polarization continues to sideline other economic policy makers.

Post-Brexit, the Real Risk Is Europe Could Fail
Jean-Michel Paul (Bloomberg View) Jul 1, 2016
The single currency and border-free travel are closely linked. The EU's survival depends on whether it can now rescue them.

The Soviet Union Had a Brexit of Its Own
Leonid Bershidsky (Bloomberg View) Jul 1, 2016
But as the EU splinters, there is no moral high ground.

Why Are Voters Ignoring Experts?
Jean Pisani-Ferry (Project Syndicate) Jul 1, 2016
Academics and policymakers may be tempted to respond to events like Brexit by dismissing what looks like a celebration of ignorance and retreating into ivory towers. What they really need to do is stop lecturing, be more humble, and stop looking only at the aggregate effects of policy decisions.

The Limits to Green Growth
Lili Fuhr, Thomas Fatheuer and Barbara Unmüßig (Project Syndicate) Jul 1, 2016
Instead of rethinking our economies, in order to reconcile their functioning with environmental imperatives, the prevailing conception of the green economy seeks to quantify nature so that it can be reconciled with existing economic systems. That is a formula for little more than business as usual with a coat of green paint.

Innovation and Its Discontents
Calestous Juma (Project Syndicate) Jul 1, 2016
Technological innovation is often extolled for its power to overcome major development challenges, fuel economic growth, and propel societies forward. Yet innovations frequently face high barriers to implementation, with governments sometimes banning new technologies outright – even those that could bring far-reaching benefits.

Impact of trade agreements: New approach, new insights
Swarnali Ahmed Hannan (VoxEU)) Jul 1, 2016
The Trans-Pacific Partnership has renewed interest in understanding the impact of trade agreements. This column employs a new approach – synthetic controls– to understand the impact of past trade agreements. The results show that trade agreements can generate substantial gains: on average, an increase of exports by 80 percentage points over ten years. The export gains are higher when emerging markets have trade agreements with advanced markets. Interestingly, all the countries in NAFTA have gained substantially due to the agreement.

The greatest reshuffle of individual incomes since the Industrial Revolution
Branko Milanovic (VoxEU) Jul 1, 2016
The effects of of globalisation on income distributions in rich countries have been studied extensively. This column takes a different approach by looking at developments in global incomes from 1988 to 2008. Large real income gains have been made by people around the median of the global income distribution and by those in the global top 1%. However, there has been an absence of real income growth for people around the 80-85th percentiles of the global distribution, a group consisting of people in ‘old rich’ OECD countries who are in the lower halves of their countries’ income distributions.

Democracy in Decline
Larry Diamond (FA) Jul 1, 2016
How Washington can reverse the tide.

Foreign policy: Our bulldozers, our rules
Economist Jul 2, 2016
China’s foreign policy could reshape a good part of the world economy.

A Radical Proposal After Brexit: End the European Union and Begin Destructive Creation
Peter Turchin (Evonomics) Jul 2, 2016
Why the European Union should start over.

How to Transform an Education System
Jakaya Kikwete (Project Syndicate) Jul 2, 2016
From 2000 to 2009, primary-school enrollment rates in Tanzania more than doubled, from just over four million pupils to 8.5 million, or 96% of all primary-school-age children. Other developing and middle-income countries – many of them in Africa – should emulate the country's education-first model.

Brexit uncertainty calls for stable monetary policy
Andrew Sentance (FT) Jul 3, 2016
We should put QE on hold until we have clear economic data.

Britain must pursue its EU exit options
Wolfgang Münchau (FT) Jul 3, 2016
Joining the EEA is one solution, or the country could pursue a bilateral trade agreement.

The Brexit vote will leave a long-lasting legacy
Philip Stephens (FT) Jul 3, 2016
After a rancorous referendum, there will be a shift in the tone of discourse.

The Brexit Surprise and emerging markets
Barry Eichengreen, Poonam Gupta and Anderson Ospino (VoxEU) Jul 3, 2016
The surprise outcome of the UK’s EU membership referendum is in some ways analogous to the ‘Taper Tantrum’ (the correction in financial markets following Ben Bernanke’s May 2013 suggestion that the US central bank was contemplating reducing its rate of security purchases). This column looks at whether the Brexit Surprise has had analogous effects on emerging markets. Emerging economies felt a strong negative impact that was larger and more widespread than in the case of the Taper Tantrum. Where the Taper Tantrum was mainly a financial shock, the Brexit Surprise is evidently perceived as having real as well as financial consequences.

Immigrants and cultural assimilation
Ran Abramitzky and Leah Boustan (VoxEU) Jul 3, 2016
Attitudes toward immigration policy are driven by fears about cultural diversity, not just individual economic circumstances. This column looks back at the Age of Mass Migration (1850-1913), when 30 million migrants moved from Europe to the US, to examine whether such fears are justified. US Census data from 1920 reveals that recent immigrants gave their children more foreign names than long-standing immigrants, which suggests that cultural assimilation did take place over time. This assimilation had economic benefits for children, both in school and in the labour market.

TPP is a structural reform: Let’s evaluate it with structural models
Fabio Ghironi (VoxEU) Jul 3, 2016
Debate surrounding the Trans-Pacific Partnership (TPP) is raging. Economists on different sides of the debate have used different arguments and tools to support their positions. This column surveys several recent studies and the strategies they employ in modelling the potential effects of TPP. It argues that structural models need to start from micro foundations, and need to incorporate trade and macro dynamics. The general results of these studies lend support to those who think that TPP will be beneficial.

Island economies struggle to diversify
Courtney Fingar (FT) Jul 4, 2016
Over-reliance on tourism, resources and finance leaves many vulnerable to external shocks.

The Impact of Financial Globalization on the Brexit Vote
Joseph P. Joyce (CEF) Jul 4, 2016
The reasons for the majority vote in favor of the United Kingdom leaving the European Union will be studied and analyzed for years to come.

What Does Freedom Mean in China?
Justin Fox (Bloomberg View) Jul 4, 2016
Decades of market reforms have created space citizens didn't have before.

Globalization’s Political Fault Lines
Nouriel Roubini (Project Syndicate) Jul 4, 2016
The UK’s narrow vote to leave the EU is the proverbial canary in the coalmine, signaling a broad populist/nationalist backlash – at least in advanced economies – against globalization. But growing anti-establishment sentiment does not necessarily spell doom for a process that continues to yield net benefits for the global economy.

Where Europe Still Lives
Erik Berglöf (Project Syndicate) Jul 4, 2016
When history comes to a turning point, it’s useful to maintain a broad perspective on events as they unfold. Watching the passage of the UK’s Brexit referendum from Lviv, in Western Ukraine, drives the point home.

Brexit versus Grexit: Why you might call a referendum and then reject its outcome
Lubos Pastor (VoxEU) Jul 4, 2016
Britain voted for Brexit, but many seek ways to avoid it. This draws comparison with the events of almost exactly a year ago when the Greek government ignored the outcome of the Greek bailout referendum. This column argues that the Greek government hoped the result would crash the EU’s stock markets and thus strengthen its bargaining power. When this failed to materialise, the government ignored the plebiscite and signed the bailout extension. In the Brexit case, the observed market drops do not qualify as a collapse and so the referendum’s outcome is likely to be implemented.

EU trade deal bows to the power of parliaments
FT View Jul 5, 2016
Brussels cedes ratification of pact with Canada to member states.

Life after Brexit: the end of risk-on?
Jonathan Wheatley (FT) Jul 5, 2016
EM assets may be due another step down, and DM central banks may have lost their power to prevent it.

Tackling the productivity paradox: The OECD Global Forum on Productivity
Catherine L. Mann and Andrew W. Wyckoff (OECD Insights) Jul 5, 2016
The nexus of slowing productivity growth and rising inequality is capturing the attention of policymakers and researchers.

Brexit: Bad News for Remittances
Matt Collin and Matt Juden (cgd) Jul 5, 2016
The British public’s shock decision to leave the European Union (EU) has wide-ranging implications, including for remittance flows. In this blog, we explore the plausible consequences of Brexit for those who depend on remittances from the UK.

State of Play in the Chinese Steel Industry
Zhiyao (Lucy) Lu (PIIE) Jul 5, 2016
Steel overcapacity is a global problem and China, the world’s largest steel-producing country, is at the center of the debate over how to deal with it. To complicate matters, China expects to be accorded “market economy status (MES)” in December 2016 as provided in its accession protocol to the WTO, which could affect its trading partners’ ability to use trade laws to combat the alleged dumping of steel products.

Voodoo Banking Isn't the Answer
Michael Schuman (Bloomberg View) Jul 5, 2016
Negative rates are a terrible idea. There are better ones.

The Real Libor Scandal May Be Who Isn't in Court
Mark Gilbert (Bloomberg View) Jul 5, 2016
The junior troops seem to be getting court-martialed while the generals escape their day in court.

Innovation Doesn't Always Start in the Garage
Noah Smith (Bloomberg View) Jul 5, 2016
Sorry, disruptors. Big companies with large R&D budgets produce most of the breakthroughs.

Brexit Might Have Cost Banks $165 Billion
Mark Whitehouse (Bloomberg View) Jul 5, 2016
An NYU model says that's how much more capital they would need in a crisis.

The EU's Inflexible Bank Rules Risk an Italian Brexit
Melvyn Krauss (Bloomberg View) Jul 5, 2016
Italy needs pro-growth policies and a bank rescue if it is to avoid financial turmoil and its own EU exit.

Want to Help the Economy? Learn to Trust.
Betsey A Stevenson (Bloomberg View) Jul 5, 2016
People are losing faith in institutions and in one another. That's bad for growth.

China's $5 Trillion Opportunity
Justin Fox (Bloomberg View) Jul 5, 2016
Productivity gains are good for China's economy, but layoffs are bad for stability.

Hungary's Manipulative Referendum
Leonid Bershidsky (Bloomberg View) Jul 5, 2016
A question on refugees is designed to get the result that Prime Minster Viktor Orban wants.

India’s Censored Fight Back
Shashi Tharoor (Project Syndicate) Jul 5, 2016
The practice of film censorship is yet another relic in India of a bygone colonial era, the values of which Indians have too readily internalized. Nearly seven decades after independence, it is time for Indians to recognize that the country's democracy is mature enough to do away with censorship altogether.

Securing Post-Brexit Europe
Ana Palacio (Project Syndicate) Jul 5, 2016
The EU's new Global Strategy on Foreign and Security Policy provides a coherent guiding vision and flexible framework for adopting concrete policies, which is exactly what Europe needs today. The question is whether European leaders can overcome their parochialism and seize the opportunity.

Modi Goes to Africa
Ashok Sajjanhar (Diplomat) Jul 5, 2016
India's prime minister seeks to secure partnerships in Mozambique, South Africa, Tanzania, and Kenya.

The job race: Machines versus humans
Daron Acemoglu and Pascual Restrepo (VoxEU) Jul 5, 2016
Many economists throughout history have been proven wrong in predicting that technological progress will cause irreversible damage to the labour market. This column shows that so far, the labour market has always adapted to the replacement of jobs with capital, using evidence of new types of skilled jobs between 1970 and 2007. As long as the rate of automation of jobs by machines and the creation of new complex tasks for workers are balanced, there will be no major labour market decline. The nature of new technology, and its impact on future innovation potential, has important implications for labour stability. Many economists throughout history have been proven wrong in predicting that technological progress will cause irreversible damage to the labour market. This column shows that so far, the labour market has always adapted to the replacement of jobs with capital, using evidence of new types of skilled jobs between 1970 and 2007. As long as the rate of automation of jobs by machines and the creation of new complex tasks for workers are balanced, there will be no major labour market decline. The nature of new technology, and its impact on future innovation potential, has important implications for labour stability.

Technological progress: The other side of the coin
Ines Stelk, Steven Bosworth and Dennis J Snower (VoxEU) Jul 5, 2016
How the trend towards individualism in societies affects economic welfare is debatable, but it is generally agreed that the role of technological progress in spurring individualism is substantial. Exploring the impact of technological progress in a model of individual utility, this column finds that the direct positive effects of technological progress, in the form of innovation and economic growth, may be offset by the indirect negative effects resulting from greater positional competition at the expense of caring activities. How the trend towards individualism in societies affects economic welfare is debatable, but it is generally agreed that the role of technological progress in spurring individualism is substantial. Exploring the impact of technological progress in a model of individual utility, this column finds that the direct positive effects of technological progress, in the form of innovation and economic growth, may be offset by the indirect negative effects resulting from greater positional competition at the expense of caring activities.

Sanctions on Russia and sanctioning countries' exports
Matthieu Crozet and Julian Hinz (VoxEU) Jul 5, 2016
Economic sanctions serve as a foreign policy tool, but they can also hurt domestic firms doing business in the target country. This column looks at the effects of sanctions imposed by 37 countries on Russia over the conflict in Ukraine. The estimated loss of exports to Russia totalled $3.2 billion per month between December 2013 and June 2015. This loss was mostly incurred by European economies and in products not targeted by retaliations. French firm-level data points to a deterioration of trade finance services as the dominant mechanism. Economic sanctions serve as a foreign policy tool, but they can also hurt domestic firms doing business in the target country. This column looks at the effects of sanctions imposed by 37 countries on Russia over the conflict in Ukraine. The estimated loss of exports to Russia totalled $3.2 billion per month between December 2013 and June 2015. This loss was mostly incurred by European economies and in products not targeted by retaliations. French firm-level data points to a deterioration of trade finance services as the dominant mechanism.

Can a Consummate Insider Bring the Change the U.N. Desperately Needs?
Colum Lynch (FP) Jul 5, 2016
Susana Malcorra wants to run the U.N. But can she shake up an institution that she's been so instrumental in shaping?

EM investing after Brexit: buy the dollar
Jonathan Wheatley (FT) Jul 6, 2016
It’s the US dollar that matters to EM investors, but not in the way many think.

If Europe is to survive Brexit, it must fix its banks
Reza Moghadam (FT) Jul 6, 2016
Risk-sharing faces political resistance in creditor nations such as Germany.

Hungary’s referendum is another vote against EU integration
Neil Buckley (FT) Jul 6, 2016
The real protest is against distant policymaking.

Emerging markets focus on dollar amid Brexit turmoil
Roger Blitz and Joe Leahy (FT) Jul 6, 2016
Emerging market fortunes will once again follow those of the US, say strategists.

Brexit Has Nothing on Obama’s Global Amexit
Kenneth R. Weinstein (WSJ) Jul 6, 2016
The president’s abdication from leadership has unnerved America’s allies and made the world a more dangerous place.

Post-Brexit Uncertainty Increases
Jacob Funk Kirkegaard (PIIE) Jul 6, 2016
After the United Kingdom’s vote to leave the European Union on June 23, financial indicators in London fell dramatically, costing the UK its AAA credit rating. Then the indicators stabilized amid signs that the actual divorce might not happen soon. More recently, they have resumed their slide.

China's Growing Debt: Are the Fault Lines Beginning to Show?
K@W Jul 6, 2016
Despite appearances, China is not on the brink of financial crisis. Rather, the real risk of the country's credit overhang is a slow burn that threatens to lay waste to economic reforms.

Damage Control in the European Union
Bloomberg View Jul 6, 2016
Managing Brexit will demand patience and flexibility.

Brexit Is in Limbo, If Britannia Waives the Rules
Mark Gilbert (Bloomberg View) Jul 6, 2016
Not everyone thinks Britain has no choice but to leave.

Brexit Demonstrates the Power of the Old
Narayana Kocherlakota (Bloomberg View) Jul 6, 2016
Aging populations require a different approach to managing economies.

Fed Rates Are the Wrong Tool to Fight Bubbles
Noah Smith (Bloomberg View) Jul 6, 2016
Regulation is the better approach for preventing financial markets from overheating.

Three Antidotes to the Brexit Crisis
Narayana Kocherlakota (Bloomberg View) Jul 6, 2016
The Fed needs to boost capital, lower interest rates and make borrowing easier for banks.

Russia Is Not Dying From a Brain Drain
Leonid Bershidsky (Bloomberg View) Jul 6, 2016
Vladimir Putin's policies haven't led to a mass exodus.

From Brexit to the Future
Joseph E. Stiglitz (Project Syndicate) Jul 6, 2016
The EU is preparing to take a tough line with Britain, in order to deter other member states from following it out of the Union. But it is the neoliberal agenda that has prevailed for the last four decades, benefiting only the top 1%, that has fueled voter anger on both sides of the Atlantic.

Globalisation and polarisation in the wake of Brexit
Wolfgang Keller and Hâle Utar (VoxEU) Jul 6, 2016
Recent shifts in political sentiment regarding EU membership have been caused in part by a growing hostility towards globalisation. This column uses Danish evidence to analyse whether globalisation causes a polarisation of jobs in developed countries, and in particular whether it causes a loss of middle-income jobs. Rising import competition can increase income inequality, but it also accounts for a substantial part of all high-wage employment gains. The task for policymakers is to make these gains felt by the majority of citizens. Recent shifts in political sentiment regarding EU membership have been caused in part by a growing hostility towards globalisation. This column uses Danish evidence to analyse whether globalisation causes a polarisation of jobs in developed countries, and in particular whether it causes a loss of middle-income jobs. Rising import competition can increase income inequality, but it also accounts for a substantial part of all high-wage employment gains. The task for policymakers is to make these gains felt by the majority of citizens.

The IMF Confronts Its N-Word
Rick Rowden (FP) Jul 6, 2016
Last month, the International Monetary Fund admitted that some of its most championed policies did not create economic growth and actually exacerbated inequality.

The World’s Rising Powers Have Fallen
Suzanne Nossel (FP) Jul 6, 2016
ears that rising economic powers like Brazil, India, and South Africa would challenge U.S. global influence were misguided -- but what comes next could be far worse.

Europe's Generation Gap
Edoardo Campanella (FA) Jul 6, 2016
How pensioners are threatening the continent's future.

A British model for a post-referendum European future
FT View Jul 7, 2016
A Brexit strategy must be based on consent, prosperity and security.

Brexit and sterling: burn, baby, burn
Jonathan Guthrie (FT) Jul 7, 2016
A weaker currency has upsides, as corporate news shows.

Why leaving will make almost everybody unhappy
Martin Wolf (FT) Jul 7, 2016
If access to the single market is retained, the UK would be subject to all relevant EU regulations.

Transatlantic trade treaties are no quick fix for Brexit
Gillian Tett (FT) Jul 7, 2016
It turns out the Leavers might have been foolish to brush off the ‘back of the queue’ warning.

Sterling’s decline is a sign of political uncertainty
George Magnus (FT) Jul 7, 2016
The pound’s status reflects new risks.

Africa’s population boom is both danger and opportunity
David Pilling (FT) Jul 7, 2016
The biggest problem is jobs. Robots may beat workers to the punch.

Why Britain Belongs in a New Nafta
Robert B. Zoellick (WSJ) Jul 7, 2016
After Brexit, the U.S. must help prevent Europe from slipping into nativism and protectionism.

Why Traders Have Lost Their Touch
Satyajit Das (Bloomberg View) Jul 7, 2016
The Masters of the Universe are looking pretty fallible.

EU Commission: CETA to Face Votes in National Parliaments
Bridges, Volume 20, Number 25 Jul 7, 2016
The European Commission proposed on Tuesday that a planned trade deal with Canada be signed and provisionally applied, while also announcing that it would be submitting the pact for approval from all EU national parliaments, as well as the European Parliament and Council.

Draft US Democratic Party Platform Notes Mixed Feelings on TPP
Bridges, Volume 20, Number 25 Jul 7, 2016
Lawmakers from the US Democratic Party wish to see trade deals that feature stronger environmental and labour protections, while having mixed feelings on the merits of the 12-country Trans-Pacific Partnership (TPP) Agreement, according to a draft version of the party’s platform released on 1 July.

Why Is Brexit Causing Trouble for Italy’s Banks?
Nicolas Véron (PIIE) Jul 7, 2016
Italy’s banking problems have been simmering for quite some time and that fears associated with Brexit and controversial efforts by the Italian authorities to rescue domestic banks have further complicated the issue.

Avoiding Europe's Next Banking Crisis
Bloomberg View Jul 7, 2016
Italy needs leeway to shore up its shakiest lenders.

Brexit Casts Doubt on the Wisdom of Crowds
Mark Buchanan (Bloomberg View) Jul 7, 2016
Research suggests that smaller groups can make better decisions, particularly on complex issues.

The Brexit Alarm
Adair Turner (Project Syndicate) Jul 7, 2016
Contrary to glib assumptions, globalization of capital, trade and migration flows are not “good for everyone.” If we do not address its adverse effects, Britain’s exit from the EU will be neither the last nor the worst consequence.

Britain’s Moment of Truth
Daniel Gros (Project Syndicate_ Jul 7, 2016
Sovereignty in Europe is a balancing act, and the track record for smaller states that have chosen stronger national control doesn't bode well for the UK. Such countries invariably lose influence in the EU – and end up with less national control as well.

Only More Europe Can Beat Europe’s Nationalists
Guy Verhofstadt (Project Syndicate) Jul 7, 2016
The UK's Brexit referendum has not had contagious effects in Europe, but EU leaders should not sit on their hands. With Britain gone, the EU will be less divided and finally in a position to deliver a new vision for Europe that counters the empty promises of populist nationalism.

Direct Democracy and Brexit
Peter Singer (Project Syndicate) Jul 7, 2016
Brexit opponents have suggested that, because referenda have no constitutional status in Britain, and Parliament must make the final decision, the result of the June 23 popular vote should be ignored. Are they right?

Animal spirits and the optimal level of the inflation target
Paul De Grauwe and Yuemei Ji (VoxEU) Jul 7, 2016
Low inflation targets can cause economies to hit the zero lower bound during deflationary periods caused by even mild shocks. In such circumstances, central banks lose their ability to stimulate the economy. This column assesses the risk of this happening using a model that endogenises self-perpetuating optimism and pessimism in the economy. Given agents’ intrinsic chronic pessimism during times of recession, central banks should raise their inflation targets to 3 or 4% to preserve their ability to stimulate the economy when needed. Low inflation targets can cause economies to hit the zero lower bound during deflationary periods caused by even mild shocks. In such circumstances, central banks lose their ability to stimulate the economy. This column assesses the risk of this happening using a model that endogenises self-perpetuating optimism and pessimism in the economy. Given agents’ intrinsic chronic pessimism during times of recession, central banks should raise their inflation targets to 3 or 4% to preserve their ability to stimulate the economy when needed.

Euro Area At The Crossroads: No Time For Complacency
IMF Survey Jul 8, 2016
Recovery in the euro area has strengthened, but the medium-term outlook remains weak and is endangered by lack of collective action, says the IMF in its latest review of the currency union.

“A temple of growth”: The OECD and economic growth as its organisational ideology
Matthias Schmelzer (OECD Insights) Jul 8, 2016
One of the OECD’s major tasks is to “redefine the growth narrative”, as stated repeatedly by Secretary-General Angel Gurría when specifying his mandate at the helm the Organisation and at many high-level events since.

Brexit’s Political Risks Overwhelm Economic Analysis
Jacob Funk Kirkegaard (PIIE) Jul 8, 2016
When Wall Street strategists start wading into political analysis, it’s often a sign that fear has gripped financial markets. So it is with the United Kingdom’s referendum decision to exit the European Union.

Defusing Migration
Peter Sutherland (Project Syndicate) Jul 8, 2016
Throughout the developed world, populist demagogues are claiming that migration is draining national resources and eroding national sovereignty. Their lies have already pushed voters in the UK to reject the EU, and must be corrected before they cause even more damage.

Realizing the Potential of China’s G20 Presidency
José Antonio Ocampo (Project Syndicate) Jul 8, 2016
In the run-up to September’s G20 summit in Hangzhou, China, there has been much talk about strengthening global macroeconomic cooperation and reforming the international monetary system. This is far from the first time these topics have come up, but the time may be ripe for genuine progress.

The Roots of Middle East Mistrust
Timur Kuran (Project Syndicate) Jul 8, 2016
Arabs have substantially less trust in strangers, foreign or otherwise, than, say, Europeans – a reality that hampers everything from business development to governance. The first step in addressing the trust deficit is to understand its causes.

The Promise of Regrexit
George Soros (Project Syndicate) Jul 8, 2016
Just as Brexit was a negative shock, the response to it – a massive swing in popular sentiment in favor of the European Union – has been a positive shock. Europe's leaders should seize the opportunity to save the EU by fundamentally reforming it.

How to End Hunger
Hilal Elver and Jomo Kwame Sundaram (Project Syndicate) Jul 8, 2016
Ending hunger and poverty in a sustainable way, as world leaders promised to do last September, is morally right, politically beneficial, and economically feasible. The upcoming High-Level Political Forum on Sustainable Development presents an important opportunity to establish the way forward.

Sinking deeper into our addiction to oil
FT View Jul 10, 2016
The world’s dependence on the Middle East is growing.

‘Age of Discovery’, by Ian Goldin and Chris Kutarna
Gillian Tett (FT) Jul 10, 2016
We should take lessons from the first age of globalisation – the Renaissance.

An EEA-minus deal for the UK is wishful thinking
Wolfgang Münchau (FT) Jul 10, 2016
Britain’s idea is like John Major’s hard ecu: France and Germany are not interested.

Fixing American Finance
WSJ Jul 10, 2016
High capital is better than betting on the foresight of regulators.

Wanted in Delhi: Experts
Mihir Sharma (Bloomberg View) Jul 10, 2016
Bureaucrats can't be the source of ideas a fast-growing economy needs.

Britain’s Long Goodbye
Project Syndicate Jul 10, 2016
The UK’s shocking vote to leave the EU continues to generate uncertainty at home and abroad, not least because of the rapid meltdown of British politics. The EU’s future remains in limbo, but the Union could thrive – if its leaders learn what they must from the Brexit calamity.

China’s new normal inches on
Ross Garnaut (EAF) Jul 10, 2016
China is undergoing profound changes in its economic policy and structure.

Yen and dollar highs offer macro hedge funds some relief
Henny Sender (FT) Jul 11, 2016
Macro hedge funds get some relief, but search for yield is going to get tougher.

A renewed nationalism is stalking Europe
Tony Barber (FT) Jul 11, 2016
The instinct to defend national self-interest has soared amid the eurozone’s struggles.

EM companies ‘going backwards’ on transparency
Steven Johnson (FT) Jul 11, 2016
Chinese firms accused of failing to tackle the threat of corruption and tax evasion.

Can We Ignore the Alarm Bells the Bond Market Is Ringing?
Neil Irwin (NYT) Jul 11, 2016

Starting Over on Tariffs: Post-Brexit Trade Agreement Partners for the United Kingdom
Chad P. Bown (PIIE) Jul 11, 2016
In the wake of the Brexit vote, the UK business secretary announced the exploration of free trade agreement (FTA) talks with India. The same announcement mentioned potential UK FTA talks on upcoming official government trips to the United States, China, Japan, and South Korea.
Interest rates are ultralow across the globe. Here’s what that may be telling us about the economic future.

What’s in a World Bank Income Classification?
Lindsay Dolan (CGD) Jul 11, 2016
Every July 1, the World Bank releases updated income classifications for the new fiscal year, often resulting in headlines about various countries’ graduations to “middle income” status. But despite the global attention to these classifications and graduations, there is still widespread confusion about their meaning and significance. Let’s explore three myths that could be leading you astray. ent to EU and non-EU nationals; there would still be a considerable degree of preference for the former. The negotiations would likely be legally, economically, and politically complex, but this does not mean that it is not worth trying.

Europe’s bad loan problem could last a generation
Brian Caplen (Banker) Jul 11, 2016
Banking union is another EU policy stuck halfway.

Government Holds the Promise of Faster Growth
Noah Smith (Bloomberg View) Jul 11, 2016
Investing in public goods boosts productivity, the one thing that makes all of us richer.

Here's How to Avoid Another Brexit
Clive Crook (Bloomberg View) Jul 11, 2016
Europe's leaders have to rethink their commitment to free migration across EU borders.

Why Advanced Economies Need to Learn From Developing Nations
Mohamed Aly El-Erian (Bloomberg View)n Jul 11, 2016
Brexit and the tumbling U.S. Treasury yields show that investors and policy makers can no longer rely on familiar patterns.

Europeans Still Want to Stick Together
Leonid Bershidsky (Bloomberg View) Jul 11, 2016
Brexit hasn't strengthened pro-EU parties, but it hasn't helped the copycats either.

A Strategy to Unite and Safeguard Europe
Federica Mogherini (Project Syndicate) Jul 11, 2016
In the wake of the UK's “Brexit” vote, the purpose – and even the viability – of the European Union is being questioned as never before. In fact, Europe’s citizens and the world need a strong EU now more than ever – one that marries a shared vision to common action.

The Abdication of the Left
Dani Rodrik (Project Syndicate) Jul 11, 2016
The political backlash against globalization, evident in the UK's Brexit referendum, was predictable. The bigger surprise is the decidedly right-wing tilt the political reaction has taken, which partly reflects the left's role in leading the hyper-globalization movement at crucial junctures.

Weak growth is Italy’s fundamental problem
FT View Jul 12, 2016
There is a limit to what EU partners can expect of Renzi for now.

An end to facile optimism about the future
Martin Wolf (FT) Jul 12, 2016
Measured growth is lagging because invention and innovation has slowed.

Help the decile of discontent to help themselves
Diane Coyle (FT) Jul 12, 2016
Aim policy at improving some skills and leave the rest to robots.

There is life in sovereign bonds if you know where to look
Felix Martin (FT) Jul 12, 2016
In the hunt for yield, emerging market monetary policy should reassure investors.

Hopes rise for emerging markets growth
Jonathan Wheatley (FT) Jul 12, 2016
An uptick in commodity prices and a rebound in EM equities and currencies have revived optimism.

Structural Forces Weigh on Future U.S. Growth
Ali Alichi (IMF Survey) Jul 12, 2016
While the U.S. economy is doing well, continued solid growth hinges on addressing long-term issues of falling labor force participation, weak productivity, rising income polarization, and high poverty rates, the IMF said in its annual review on the state of the U.S. economy.

How Venezuela Fell Apart
K@W Jul 12, 2016
Today's Venezuela is a landscape where armed guards fend off consumers desperate to purchase scarce essentials. Creating a country where investment can once again flow will be a decades-long challenge.

Trade Deals Left for Dead May Rise Again
Paula Dwyer (Bloomberg View) Jul 12, 2016
Both parties' platforms leave the door open to saving global treaties.

A Quarter Century of Market Reform Leaves India Richer With Wider Inequality
Dilip Hiro (YaleGlobal) Jul 12, 2016
India joined global markets with its 1991 New Economic Policy, lifting GDP, but the income gap widened

All that glitters may not be EM gold
Steven Johnson (FT) Jul 13, 2016
Emerging market stocks look temptingly cheap — for a reason.

South Sudan, the world’s youngest failed nation
FT View Jul 13, 2016
Robust international engagement is necessary to halt the slide to war.

Think Governments Are a Mess? Markets Don't
Matthew A Winkler (Bloomberg View) Jul 13, 2016
There's violence, instability and stagnation, true. Yet there's also a lot of faith in sovereign bonds.

Stop Being So Gloomy About Brexit
Ashoka Mody (Bloomberg View) Jul 13, 2016
The Bank of England should bolster confidence by holding back on stimulus.

Traders Leaving London Would at Least Escape the Rain
Mark Gilbert (Bloomberg View) Jul 13, 2016
Paris, Berlin and Dublin are among those trying to persuade its financiers to relocate.

Remaking Britain
Gordon Brown (Project Syndicate) Jul 13, 2016
As Theresa May takes over as Prime Minister, at least seven uncertainties surround the UK's future. When and how Britain leaves the EU – and whether it can get out of it intact – is just the start of the challenges that lie ahead.

Global Cooperation as a Life-and-Death Issue
Jim O'Neill (Project Syndicate) Jul 13, 2016
While governments, industry, and international organizations have made important strides over the last two years in tackling the threat posed by rising antimicrobial resistance, the truth is that their work has barely begun. If we are to prevent the slow-motion car crash of surging AMR, our leaders must hit the brakes hard.

What’s the Problem With Protectionism?
Barry Eichengreen (Project Syndicate) Jul 13, 2016
Economists are all but unanimous in arguing that the macroeconomic effects of US presidential candidate Donald Trump’s trade proposals would be disastrous. But just because economists agree doesn’t mean they’re right.

Maximum sustainable debt: A new measure
Fabrice Collard, Michel Habib and Jean-Charles Rochet (VoxEU) Jul 13, 2016
Since the Global Crisis, sovereign debt levels have exploded in many OECD countries. This column presents a new measure of government debt – maximum sustainable debt. This measure takes account of the fact that a shortfall in growth naturally increases the probability of default, while allowing for the possibility of rollover. Applications to recent data suggest that without sufficient institutional constraints, governments will generally borrow up to a level close to the maximum that can be sustained. Since the Global Crisis, sovereign debt levels have exploded in many OECD countries. This column presents a new measure of government debt – maximum sustainable debt. This measure takes account of the fact that a shortfall in growth naturally increases the probability of default, while allowing for the possibility of rollover. Applications to recent data suggest that without sufficient institutional constraints, governments will generally borrow up to a level close to the maximum that can be sustained.

Argentina and Brazil Grow Together
Shannon K. O'Neil (FA) Jul 13, 2016
Why the countries should embrace trade—and each other.

Britain’s chance to show the world how to do stimulus
Stephanie Flanders (FT) Jul 14, 2016
The prime minister should go beyond big-ticket infrastructure schemes.

Saudi Arabia’s non-oil sector slips into recession
Steve Johnson (FT) Jul 14, 2016
Contraction driven by government spending cuts as oil revenues slide.

Theresa May (and Angela Merkel) should play Brexit long
Philip Stephens (FT) Jul 14, 2016
Unravelling four decades of political and economic integration will be complex and costly.

Developed and emerging markets: the old relationship breaks down
Jonathan Wheatley (FT) Jul 14, 2016
Economies no longer moving in sync as credit cycle and policymakers exert pressure.

G-20 Trade Ministers Pledge "Political Leadership" to Boost Growth, Prosperity
Bridges, Volume 20, Number 26 Jul 14, 2016
Trade ministers from the G-20 coalition of major advanced and emerging economies concluded a two-day meeting in Shanghai, China, on Sunday, calling for increased efforts to tackle sluggish trade and economic growth, while providing political signals on specific topics such as industrial overcapacity and environmental goods.

EU, China Leaders Agree to Establish Steel "Platform"
Bridges, Volume 20, Number 26 Jul 14, 2016
Leaders from the EU and China have agreed to set up a platform for discussing ways to address steel overcapacity – an issue that has been hotly debated in recent months, in light of the sector's ongoing struggles.

Doubling Down on Development
Christine Legarde (IMF) Jul 14, 2016
There is one group of countries that would be particularly affected by a breakdown of cooperation. Ironically, it is precisely those countries that offer promise to the future global economy as populations in advanced and emerging markets are aging, limiting their future role in global growth. Of course, I am talking here of the group of low-income countries.

Toward a Europe of the Regions? Brexit’s Real Implications
Rupert Strachwitz (Globalist) Jul 14, 2016
What do European citizens and politicians need to think about after the British vote?

A Post-Brexit Opportunity Europe Shouldn't Miss
Nicolas Veron (Bloomberg View) Jul 14, 2016
The EU should finally implement its long-delayed capital markets union.

Overcoming Our Inordinate Fear of Inflation
Noah Smith (Bloomberg View) Jul 14, 2016
Recessions cause much more harm than rising prices, yet many people see them as equally bad.

The Return of Ireland’s Housing Bubble
Stefan Gerlach (Project Syndicate) Jul 14, 2016
After having endured the collapse of its housing market less than a decade ago, Ireland has lately been experiencing a blistering recovery in prices, which already have risen in Dublin by some 50% from the trough in 2010. Is Ireland setting itself up for another devastating crash?

The Federalist Threat to Europe
Anders Borg (Project Syndicate) Jul 14, 2016
Brexit has led many EU leaders and observers to call for further European integration and centralization of power. But the federalist temptation should be resisted at all costs, for both economic and political reasons.

The Case for Muddling Through Brexit
Benjamin J. Cohen (Project Syndicate) Jul 14, 2016
Although the UK will leave the EU, the two sides still share many traditions, including a knack for reaching messy compromise. Given how close the Brexit vote was, and how damaging a full rupture with the EU would be, this shared tradition is likely to define the future of the bilateral relationship.

Africa’s Post-Brexit Opportunity
Calestous Juma (Project Syndicate) Jul 14, 2016
African pundits and public officials were quick to lament the new cloud of economic uncertainty created by the UK's decision to leave the EU. But, the long-term outlook for Africa is more promising than many believe, because many of the continent's economies will not remain forever dependent on commodity exports.

Brexit, Trump, and Globalization’s Have-Nots
Jeffrey Frankel (Project Syndicate) Jul 14, 2016
Two political events that are attracting global attention these days – the vote in the United Kingdom to leave the EU and Donald Trump’s presidential campaign in the US – have much in common. Perhaps understanding the parallels between the two campaigns will help US voters avoid taking a similar path in November.

Voting Islamist: It’s the economy, stupid
Maleke Fourati, Gabriele Gratton and Pauline Grosjean (VoxEU) Jul 14, 2016
It is typically argued that the rising popularity of Islamist parties in parts of the Arab world reflects votes from the poor and disenfranchised. This column challenges this perspective, arguing that Islamist parties gain political support from the middle classes, due in large part to neoliberal economic policies. Using survey and electoral data from Tunisia, it shows that belonging to the middle class and living in a rich district together affect the decision to vote for the religious party more than actually being religious. These findings suggest that the same framework used to analyse political competition in the West can be fruitfully applied to the Muslim world. It is typically argued that the rising popularity of Islamist parties in parts of the Arab world reflects votes from the poor and disenfranchised. This column challenges this perspective, arguing that Islamist parties gain political support from the middle classes, due in large part to neoliberal economic policies. Using survey and electoral data from Tunisia, it shows that belonging to the middle class and living in a rich district together affect the decision to vote for the religious party more than actually being religious. These findings suggest that the same framework used to analyse political competition in the West can be fruitfully applied to the Muslim world.

Designing effective automatic stabilisers of the business cycle
Alisdair McKay and Ricardo Reis (VoxEU) Jul 14, 2016
Brexit has raised the possibility of a recession on both sides of the Atlantic. Unable to use traditional remedies like monetary or fiscal policy stimulus, policymakers may consider automatic fiscal stabilisers. This column examines the impact of automatic stabilisers through social insurance on the business cycle, and how its impact can be used to mitigate recession. Unemployment insurance or food stamps would be better than progressive taxes at stimulating aggregate demand. The main economic channels policymakers must consider are those related to risk and precautionary savings. Brexit has raised the possibility of a recession on both sides of the Atlantic. Unable to use traditional remedies like monetary or fiscal policy stimulus, policymakers may consider automatic fiscal stabilisers. This column examines the impact of automatic stabilisers through social insurance on the business cycle, and how its impact can be used to mitigate recession. Unemployment insurance or food stamps would be better than progressive taxes at stimulating aggregate demand. The main economic channels policymakers must consider are those related to risk and precautionary savings.

The Kismet of Basic Science
Henry I. Miller (Project Syndicate) Jul 15, 2016
Those who argue that tinkering, rather than fundamental research, is the main source of technological innovation don't understand the nature of tinkering. Publicly funded basic science provides the fertile substrate from which technological breakthroughs often sprout.

A New Playbook for China and ASEAN
Chin Tong Liew and Wing Thye Woo (Project Syndicate) Jul 15, 2016
The ruling in The Hague against China’s territorial claims in the South China Sea is a watershed moment for international law and an unmistakable warning to China about its strategic assertiveness in Southeast Asia. While China's leaders refuse to recognize the ruling, that doesn’t mean they are undisturbed by it.

China’s Scientific Revolution
Joseph Jimenez (Project Syndicate) Jul 15, 2016
China's economy has undergone radical transformation in recent years, and it is now at a new threshold where it can support world-class research in science and technology. As Chinese consumers continue to demand more medical treatments, China will play an increasingly central role in the life-sciences research of the future.

Sovereign and banking risk
Giorgio Barba Navaretti, Giacomo Calzolari and Alberto Franco Pozzolo (VoxEU) Jul 15, 2016
Eurozone countries are facing a stalemate in the completion of the Banking Union, at the heart of which is the regulation of banks’ sovereign exposures. This column introduces the latest issue of European Economy, which examines the interactions between banks and sovereign risk, the build up of sovereign risk during the crisis, and the policy proposals on the table to severe the loop and, more broadly, to finally complete the Banking Union. Eurozone countries are facing a stalemate in the completion of the Banking Union, at the heart of which is the regulation of banks’ sovereign exposures. This column introduces the latest issue of European Economy, which examines the interactions between banks and sovereign risk, the build up of sovereign risk during the crisis, and the policy proposals on the table to severe the loop and, more broadly, to finally complete the Banking Union.

China's outward investment explodes, and peaks?
Derek Scissors (AEI) Jul 15, 2016
Chinese investment around the world set a record pace in the first half of 2016, exceeding its full-year total from just four years ago. The upsurge is largely due to investment in the United States, mostly from acquisitions by private Chinese firms. By sector, China continues to diversify. Energy remains most important in construction, but has been eclipsed thus far this year by investment in technology and entertainment. The investment boom can't last. China's financial resources are still massive but dwindling. Lack of reciprocal access to the Chinese market will begin to alienate recipient countries. With Chinese companies now a notable presence in the US, American policy should emphasize the rule of law. Companies that break American law should be barred; those that follow the law welcomed.

Rethinking Capital Controls
Barry Eichengreen (Milken Institute Review) Jul 15, 2016
conomists are taught – and taught and taught – to appreciate the virtues of free markets. But they are also trained to be alert to circumstances in which markets, left to their own devices, produce less-than-optimal results. Sorting out the cases in which markets fail to generate efficient use of productive resources and justify government intervention can be tricky, though.

Industrial strategy as a slick slogan, and as reality
FT View Jul 17, 2016
UK government help to the economy needs to be carefully judged.

Asset management: Actively failing
Stephen Foley (FT) Jul 17, 2016
As investors pour into index funds, asset managers are seeking new strategies to keep them on side.

How to make Brexit manageable
Wolfgang Munchau (FT) Jul 17, 2016
The master plan was as clear on the general direction as it was naive about the technical details.

Brexit uncertainty makes the case for a lower rate
Gertjan Vlieghe (FT) Jul 17, 2016
There should be an immediate interest rate cut and extra measures.

Coups Don't Depress Economic Growth
Tyler Cowen (Bloomberg View) Jul 17, 2016
Turkey's economy isn't likely to be affected much by the military uprising, historical research shows.

Churning over China: Anatomy of a Slowdown
Pedro Nicolaci da Costa and Jan Zilinsky (PIIE) Jul 18, 2016
China’s economic opaqueness, including doubts about the veracity of official figures, is one the biggest blind spots for policymakers and businesses around the world trying to plan for a highly unpredictable future.

British Trade After Brexit: It's Complicated
Kimberly Ann Elliott (CGD) Jul 18, 2016
While the United Kingdom (UK) is working out its relationship status with Europe, it will also have to resolve its trade relations with the rest of the world. The UK will need to establish the foundation on which new trade relationships will be built—that means bringing its membership in the World Trade Organization (WTO) up to date.

The Failure of Free Migration
Robert Skidelsky (Project Syndicate) Jul 18, 2016
The horrendous Bastille Day attack in Nice by a French-Tunisian man will give National Front leader Marine Le Pen a massive boost in France's presidential election next spring. Even if she loses, the era of free labor mobility is drawing to a close – another casualty of neoliberalism's misplaced faith in markets.

How Slow Will China Go?
Lee Jong-Wha (Project Syndicate) Jul 18, 2016
While China's economic development has been exceptional in many ways, its growth trajectory resembles that of Japan and South Korea. If China is to manage the challenges it currently faces – in particular, sharply decelerating growth – it should look to these countries' experience for guidance.

Wage inequality: The spatial dimension
Erling Barth, Alex Bryson, James Davis and Richard B. Freeman (VoxEU) Jul 18, 2016
Income inequality has risen throughout the advanced world. Various explanations have been suggested for this, but these tend to focus on who you are. This column shifts the focus to where you work. Data from the US reveal that over the period 1992-2007, two-thirds of the rise in earnings dispersion was due to increased variation across establishments. Moreover, almost 80% of the increase in earnings dispersion among workers who remained at the same establishment from year to year was due to a widening of wages across establishments rather than within establishments. Income inequality has risen throughout the advanced world. Various explanations have been suggested for this, but these tend to focus on who you are. This column shifts the focus to where you work. Data from the US reveal that over the period 1992-2007, two-thirds of the rise in earnings dispersion was due to increased variation across establishments. Moreover, almost 80% of the increase in earnings dispersion among workers who remained at the same establishment from year to year was due to a widening of wages across establishments rather than within establishments.

Britain needs a plan to mitigate the Brexit shock
FT View Jul 19, 2016
There is no room for dogma in assessing demands of fiscal stimulus.

Turkey’s turbulence tests wider rally in emerging market
Roger Blitz (FT) Jul 19, 2016
Failed coup splits EM investors over Turkey in a low-yield world.

There is a job for regulators in the space economy
John Thornhill (FT) Jul 19, 2016
Nasa has a major role to play in shaping the extraterrestrial private sector.

Coups becoming rarer, but exact a high price
Steve Johnson (FT) Jul 19, 2016
Successful coups bad for growth in democracies; unsuccessful ones worst in autocracies.

Global elites must heed the warning of populist rage
Martin Wolf (FT) Jul 19, 2016
Real income stagnation over a longer period than any since the war is a fundamental political fact.

European Red Tape Is a Bogus Justification for Brexit
Simeon Djankov (PIIE) Jul 19, 2016
Did the European Union’s ship of state run aground on misleading anecdotes? It would appear so.

The Hidden Risk to Sovereign Bonds
Mark Gilbert (Bloomberg View) Jul 19, 2016
It's no longer inflation; annulment is looking like the bigger risk.

Venezuela Gets a New Comandante
Bloomberg View Jul 19, 2016
Did the military just take over the country with the world's largest oil reserves?

The Arab World’s Water Insecurity
Brahma Chellaney (Project Syndicate) Jul 19, 2016
The greater Middle East is home to most of the world’s poorest states or territories in terms of fresh water. This shortage – exacerbated by exploding populations, depletion and degradation of natural resources, and popular discontent – is casting a shadow over these countries’ future.

More Europe, Less Brussels
Carl Bildt (Project Syndicate) Jul 19, 2016
For too long, the European project has invoked the Europe of Charlemagne that existed more than a thousand years ago. If the EU is to survive, it should tap far more fertile sources of inspiration than an illiterate warrior whose empire fell apart soon after his death.

This Is Europe’s Last Chance to Fix Its Refugee Policy
George Soros (FP) Jul 19, 2016
The EU’s piecemeal solutions are coming apart. Only a surge of financial and political creativity can avoid a catastrophe.

How to fix Italian banks
Yakov Amihud and Carlo Favero (VoxEU) Jul 19, 2016
The public debate over how to resolve the problem of Italian banks centres on whether there should be a government bailout, or whether banks’ bondholders should bear the burden. Absent from the discussion is what will happen to the banks’ stockholders, who should theoretically be wiped out before bondholders are asked to undergo a haircut. This column addresses the problem of who will manage the banks if stockholders quit. The Italian government should require banks to issue deep discount rights, which is a coercive way to raise equity and thus strengthen the banks’ balance sheet and their solvency. The public debate over how to resolve the problem of Italian banks centres on whether there should be a government bailout, or whether banks’ bondholders should bear the burden. Absent from the discussion is what will happen to the banks’ stockholders, who should theoretically be wiped out before bondholders are asked to undergo a haircut. This column addresses the problem of who will manage the banks if stockholders quit. The Italian government should require banks to issue deep discount rights, which is a coercive way to raise equity and thus strengthen the banks’ balance sheet and their solvency. P>The unhappy story of British industrial strategy
Geoffrey Owen (FT) Jul 20, 2016
May should beware the unintended consequences of state intervention.

Article 50: The Brexit divorce paper
Alex Barker (FT) Jul 20, 2016
Just 262 words in the Lisbon treaty will dictate the talks — and shape the UK’s ties with Europe.

Emerging markets party as lower for longer morphs into forever
Jonathan Wheatley (FT) Jul 20, 2016
Search for yield draws pension and sovereign wealth funds to risk.

A Brexit Economic Slump
NYT Jul 20, 2016
It is up to Britain's new prime minister, Theresa May, and her team to come up with a strategy to minimize the economic damage.

China’s Rare-Earths Bust
WSJ Jul 20, 2016
A new Honda engine shows the limits of Beijing’s coercion.

Brexit Shock Fueling Capital Inflows to Emerging Markets—But Should They Be Celebrating?
Liliana Rojas-Suarez (CGD) Jul 20, 2016
More than $3.4 billion inflows into Emerging Markets (EMs) in the week following Brexit—the largest weekly amount on record—looks like good news. Yes, but here is why EMs should not relax in a time of global uncertainty.

How Britain Should Brexit
Bloomberg View Jul 20, 2016
The U.K.'s opening offer should minimize disruption and benefit both sides.

Could India Be the First to Get Rid of Cash?
Mihir Sharma (Bloomberg View) Jul 20, 2016
Switching to electronic payments would help eliminate the problem of "black money."

World Bank Brings in an Economics Upstart
Noah Smith (Bloomberg View) Jul 20, 2016
Paul Romer, the bank's new chief economist, is a great choice for finding solutions for the slowdown in global productivity.

The Case for Constructive Populism
Kemal Dervis (Project Syndicate) Jul 20, 2016
There is an urgent need for a moderate, humanist populism that can counter the extremists with simple yet powerful ideas that resonate with millions. Our democracies, when faced with dire challenges, have found such voices before.

Poor Leadership Makes Bad Globalization
Jorge G. Castañeda (Project Syndicate) Jul 20, 2016
Popular backlash against disruptive change is inevitable, and occasionally serves as a useful counterweight to heedless leadership. What is new today is the extent of the backlash in Europe and North America, which many pundits and policymakers believed were better equipped than ever to manage change.

2016: The Theory Behind a Very Bad Year (and It’s Only Half Over)
David A. Bell (FP) Jul 20, 2016
The pace of violent and chaotic events around the world is speeding up. That’s probably not a coincidence.

Global disorder: from Donald Trump to the South China Sea
Philip Stephens (FT) Jul 21, 2016
The belligerence of domestic politics is spilling on to the world stage.

African investment: putting FDI into the SDGs
Courtney Fingar (FT) Jul 21, 2016
Private sector funding is need to plug investment gap, along with a change of focus.

TTIP Negotiators Reiterate 2016 Goal, While Noting Market Access Gaps
Bridges, Volume 20, Number 27 Jul 21, 2016
US and EU officials reaffirmed last week that they still aim to clinch a bilateral trade and investment pact this year, while acknowledging that much work remains in areas such as market access following the latest round of negotiations in Brussels, Belgium.

EU Commission Outlines Overall Plan to Revise Anti-Dumping Investigations
Bridges, Volume 20, Number 27 Jul 21, 2016
European Commission officials outlined on Wednesday the overall approach they intend to propose in revising their anti-dumping legislation, in light of the expiry this December of certain provisions of China’s WTO accession protocol.

US: Free Trade and Moral Hypocrisy
Jeff Faux (Globalist) Jul 21, 2016
U.S. elites claiming moral superiority by demanding that other people do the sacrificing on trade issues is unprincipled hypocrisy.

Global Security and Democratic Governance Falter as Historic Rivalries Reemerge
Richard Weitz (YaleGlobal) Jul 21, 2016
Amid rising nationalism, the democratic powers of the West struggle to retain openness and economic integration

Britain Negotiates Its EU Exit With a Weak Hand
Leonid Bershidsky (Bloomberg View) Jul 21, 2016
To maintain its pre-eminence, Britain's financial sector needs Europe.

How to Reboot Britain's Economy After Brexit
Mark Gilbert (Bloomberg View) Jul 21, 2016
The U.K. economy needs a fiscal boost, not more austerity.

China Should Make It Easier to Become Chinese
Adam Minter (Bloomberg View) Jul 21, 2016
To attract highly skilled immigrants, offer dual citizenship.

Britain in Search of a Country
Chris Patten (Project Syndicate) Jul 21, 2016
Those who campaigned for the UK to leave the EU, largely on the basis of lies and delusion, have no idea what to do next. But now that the Brexiteers have broken all the crockery in the shop, it is imperative to piece together Britain's national interest from the shards.

The EU’s Bold New Strategy
Javier Solana (Project Syndicate) Jul 21, 2016
Federica Mogherini, the EU’s high representative for foreign affairs, and her team have presented a Global Strategy for European Security that has clearly defined aims befitting conditions within and beyond Europe's borders. For the faltering European project, the strategy comes just in time.

Deserting the Battle for Britain
Kevin Hjortshøj O'Rourke (Project Syndicate) Jul 21, 2016
Why haven’t the Irish developed the same level of animosity toward immigrants from the EU as the UK has, especially given the austerity imposed by European institutions after the financial crisis of 2008? The British press is partly to blame, but the abdication political leadership in the UK matters more.

The Global Economy’s Hesitation Blues
Robert J. Shiller (Project Syndicate) Jul 21, 2016
Economic slowdowns can often be characterized as periods of hesitation: consumers hesitate to buy a new house or car, thinking that the old house or car will do just fine for a while longer. Viewed from this perspective, how worried should we be about the effects of hesitation today?

A mechanism proposal for Eurozone sovereign debt restructuring
Jochen Andritzky, Lars P Feld, Christoph M Schmidt, Isabel Schnabel and Volker Wieland (VoxEU) Jul 21, 2016
To make the no-bailout clause credible and to enhance the effectiveness of crisis assistance, private creditors should contribute to crisis resolution in the Eurozone. This column proposes a mechanism to allow for orderly restructuring of sovereign debt as part of ESM programmes. If debt exceeds certain thresholds, the mechanism triggers an immediate maturity extension. In a second stage, a deeper debt restructuring could follow, depending on the solvency of a country. The mechanism could be easily implemented by amending ESM guidelines. To make the no-bailout clause credible and to enhance the effectiveness of crisis assistance, private creditors should contribute to crisis resolution in the Eurozone. This column proposes a mechanism to allow for orderly restructuring of sovereign debt as part of ESM programmes. If debt exceeds certain thresholds, the mechanism triggers an immediate maturity extension. In a second stage, a deeper debt restructuring could follow, depending on the solvency of a country. The mechanism could be easily implemented by amending ESM guidelines.

Ethnic favouritism: Not just an African phenomenon
Giacomo De Luca, Roland Hodler, Paul Raschky and Michele Valsecchi (VoxEU) Jul 21, 2016
Ethnic favouritism is widely regarded as an African phenomenon, or at most a problem of poor and weakly institutionalised countries. This column uses data on night-time light intensity to challenge these preconceptions. Ethnic favouritism is found to be as prevalent outside of Africa as it is within, and not restricted to poor or autocratic nations either. Rather, re-election concerns appear to be an important driver of the practice. Ethnic favouritism is widely regarded as an African phenomenon, or at most a problem of poor and weakly institutionalised countries. This column uses data on night-time light intensity to challenge these preconceptions. Ethnic favouritism is found to be as prevalent outside of Africa as it is within, and not restricted to poor or autocratic nations either. Rather, re-election concerns appear to be an important driver of the practice.

Implications of the Trans-Pacific Partnership for the World Trading System
Jeffrey J. Schott, Cathleen Cimino-Isaacs, and Euijin Jung (PIIE) Jul 21, 2016
The Trans-Pacific Partnership (TPP), signed in February 2016 but not yet ratified, stands to benefit not only its members but also nonparticipating countries around the world. Its innovative rules governing digital trade, state-owned enterprises (SOEs), environmental policies and other areas, and its positive impact on strategic relations with US allies, will reshape trade relations in the Asia-Pacific region and globally. TPP precedents could also help revive multilateral trade negotiations in the World Trade Organization.

India eyes oil demand growth top spot
Anjli Raval (FT) Jul 22, 2016
Modi’s industrialisation programme piques interest of international energy companies.

Millennials’ tastes shape China’s outbound acquisitions
James Kynge (FT) Jul 22, 2016
Generation’s distinctive needs spur Chinese companies’ M&A sprees.

Is China Stealing Jobs? It May Be Losing Them, Instead
Michael Schuman (NYT) Jul 22, 2016
With a slowing domestic economy, rising costs and stiffer foreign competition, China’s laborers are losing jobs, including to the United States.

The challenge: How can foreign direct investment fulfil its development potential?
Karl P. Sauvant (OECD Insights) Jul 22, 2016
International investment, and in particular foreign direct investment, has an important role to play in helping to achieve the Sustainable Development Goals.

Things Are Looking Up for Emerging-Markets Debt
Pierre-Yves Bareau (II) Jul 22, 2016
Improved economic policies and better chances for yield compared with developed markets are two reasons for the outlook for the asset class.

How Bad Is Taiwan’s Economy?
Frank S.T. Hsiao (Diplomat) Jul 22, 2016
Compared to other economies around the world, Taiwan is doing just fine.

Brexit Means Brexit: May’s Time or May…hem?
Paul Goldschmidt (Globalist) Jul 22, 2016
Message to London: The UK’s relationship with the EU cannot be reduced to satisfying purely economic and financial interests.

The British Leadership Disease
Lucy P. Marcus (Project Syndicate) Jul 22, 2016
Ethical political leadership is in short supply worldwide, from the US to Turkey to the Philippines. But perhaps the most striking instance of dishonest leadership has been in the UK, where the Brexit referendum and its aftermath have caused more instability than Britain experiences in a typical decade.

How China’s ‘Currency Manipulation’ Enhances the Global Role of the U.S. Dollar
Michael Pettis (FP) Jul 22, 2016
But it's not quite that simple. In fact, Beijing benefits from the dollar’s dominance.

An econophysics perspective of trade liberalisation
Yuichi Ikeda, Hideaki Aoyama, Hiroshi Iyetomi, Takayuki Mizuno, Takaaki Ohnishi, Yohei Sakamoto and Tsutomu Watanabe (VoxEU) Jul 22, 2016
Econophysics is an emerging field applying theories and methods from physics to economic problems and data. This column explores the collective motions of trade and the effects of trade liberalisation, using global data from the past two decades. Econophysics methods reveal how business cycles synchronise, and how economic risk propagates throughout the global economic network. The results also highlight inherent problems of structural controllability that are induced during economic crises. Econophysics is an emerging field applying theories and methods from physics to economic problems and data. This column explores the collective motions of trade and the effects of trade liberalisation, using global data from the past two decades. Econophysics methods reveal how business cycles synchronise, and how economic risk propagates throughout the global economic network. The results also highlight inherent problems of structural controllability that are induced during economic crises.

How secular stagnation spreads and how it can be cured
Gauti B Eggertsson and Lawrence H. Summers (VoxEU) Jul 22, 2016
The secular stagnation hypothesis suggests that low interest rates may be the new normal in years to come. This column argues that this prospect should not only lead to a major rethinking of policy from the perspective of individual economies, but also a major rethinking about monetary and fiscal policy in the international context, the role of international capital flows, and the role of policy coordination across borders. In times of secular stagnation, events such as Brexit or the recent turbulence in Turkey have much larger spillover effects than under normal circumstances. The secular stagnation hypothesis suggests that low interest rates may be the new normal in years to come. This column argues that this prospect should not only lead to a major rethinking of policy from the perspective of individual economies, but also a major rethinking about monetary and fiscal policy in the international context, the role of international capital flows, and the role of policy coordination across borders. In times of secular stagnation, events such as Brexit or the recent turbulence in Turkey have much larger spillover effects than under normal circumstances.

Paul Romer: Back to a U.S.-Dominated World Bank?
Helmut Reisen (Globalist) Jul 23, 2016
Choosing Romer as World Bank chief economist attempts to restore past U.S. dominance in development banking.

EU-Turkish customs union: How to proceed
Gabriel Felbermayr, Rahel Aichele and Erdal Yalcin (VoxEU) Jul 23, 2016
New EU trade agreements could adversely affect Turkey as a non-EU member. This column presents new findings of an economic analysis in which different trade policy scenarios are considered. The results point to a clear policy recommendation – Turkey and the EU should mutually deepen their customs union by including the agriculture and service sectors as soon as possible. New EU trade agreements could adversely affect Turkey as a non-EU member. This column presents new findings of an economic analysis in which different trade policy scenarios are considered. The results point to a clear policy recommendation – Turkey and the EU should mutually deepen their customs union by including the agriculture and service sectors as soon as possible.

The World Bank recruits a true freethinker
FT View Jul 24, 2016
Romer’s ideas are fascinating, unorthodox and politically risky.

India reform is unfinished business
Gaurav Dalmia (FT) Jul 24, 2016
Modi needs to shake-up regulatory bodies, the police and the legal process.

Brexit: London can safeguard its global city status
Saskia Sassen (FT) Jul 24, 2016
A financial centre is created over time and the process is complex.

The high price of Europe’s misguided pragmatism
Wolfgang Munchau (FT) Jul 24, 2016
The sustainable solution consists of a more integrated eurozone and a less integrated EU.

Will Robots Ravage the Developing World?
Christopher Balding (Bloomberg View) Jul 24, 2016
As automation spreads, it's threatening a crucial model of economic advancement.

‘Verteilungskampf’, by Marcel Fratzscher
Martin Sandbu (FT) Jul 25, 2016
A deliciously iconoclastic book that highlights Germany’s economic underbelly.

Bank regulators, be careful what you wish for
Simon Samuels (FT) Jul 25, 2016
Basel committee takes aim at traditional lending and the response is ferocious.

Lael Brainard, Donning a Global Lens, Champions Low Rates at Fed
Binyamin Applebaum (NYT) Jul 25, 2016
The Fed is expected to again pass on an opportunity to raise its interest rate, a move partly owing to the efforts of Ms. Brainard, a Fed governor.

Economic and Political Freedoms Diverge in Eastern Europe
Simeon Djankov and Owen Hauck (PIIE) Jul 25, 2016
Political analysts often assume that economic and political freedoms go together. Increase property rights and the opportunities for private business, and the emerging middle class will demand stronger political rights as well. This logic turns out to be wrong.

The Next European Financial Capital: London
Simeon Djankov (PIIE) Jul 25, 2016
The race to succeed London as the next European financial capital is on. “We know that groups based in the City are planning to leave for Dublin, Amsterdam, Frankfurt, and Paris,” French Prime Minister Manuel Valls told journalists on July 2.

UK Trade Policy After Brexit: Are Open Markets Enough?
Peter S. Rashish (Globalist) Jul 25, 2016
Making the most of the new UK government international trade strategies.

A Vacuum of Leadership on Trade
Bloomberg View Jul 25, 2016
Governments should help the global economy realize its full potential.

Seeing China Through Its Economic History
Tyler Cowen (Bloomberg View) Jul 25, 2016
Don't be too sure that slower growth will promote instability. That's not what's happened before.

Japan's Risky Stimulus Decision
Christopher Wood (Bloomberg View) Jul 25, 2016
"Helicopter money" may make political sense, but it could also undermine confidence in the central bank.

The Failure of Europe's Stress Tests
Mark Whitehouse (Bloomberg View) Jul 25, 2016
A tool that was supposed to help make the financial system stronger reveals only weak leadership.

What the Fed Will and Won't Do this Week
Mohamed Aly El-Erian (Bloomberg View) Jul 25, 2016
Central bankers won't announce a rate hike this week, but they won't take the possibility off the table for later this year.

America’s Exploding Deficit
Martin Feldstein (Project Syndicate) Jul 25, 2016
Although the US debt-to-GDP ratio doubled in the past decade, the Obama administration and Congress ignored the problem, focusing instead on the annual deficit’s decline since 2012 and the relative stability of the deficit as a share of GDP. But the debt should be a top priority for whoever moves into the White House next year.

The Globalization Disconnect
Stephen S. Roach (Project Syndicate) Jul 25, 2016
The lesson of Brexit and of the rise of Donald Trump is that globalization, while seemingly elegant in theory, is flawed in practice. Those who worship at the altar of free trade must come to grips with this glaring disconnect.

Why Countries Never Thrive Without Activist Government Investment
William Berkson (Evonomics) Jul 25, 2016
History shows that economies have never grown through minimizing government involvement in the economy

Labour market recovery since the Great Recession
Stefano Scarpetta, Mark Keese and Paul Swaim (VoxEU) Jul 25, 2016
The labour market recovery in OECD countries has been steady but slow since the Great Recession. More worrying is the fate of wage growth over the same period. This column assesses the implications of stagnation in the labour market for growth, wages, and inequality. It finds that structural weaknesses in labour market performance have become more visible as markets recover from the Great Recession. The policy response must include macroeconomic policies aimed at strengthening investment, and structural policies to support growth while nudging workers towards higher-skilled jobs. The labour market recovery in OECD countries has been steady but slow since the Great Recession. More worrying is the fate of wage growth over the same period. This column assesses the implications of stagnation in the labour market for growth, wages, and inequality. It finds that structural weaknesses in labour market performance have become more visible as markets recover from the Great Recession. The policy response must include macroeconomic policies aimed at strengthening investment, and structural policies to support growth while nudging workers towards higher-skilled jobs.

A reformed Vladimir Putin is the model of economic sobriety
Ruchir Sharma (FT) Jul 26, 2016
His strategy is all defence and no offence, bringing stability but not growth.

Ethiopia seen as hottest market for exporters
Steve Johnson (FT) Jul 26, 2016
Brazil and South Africa likely to provide slim pickings as incomes stagnate.

The world leans ever more on America
Stephanie Flanders (FT) Jul 26, 2016
Time to forget the UK referendum effect and look at the big picture.

The real cause of EM crises? Blame the Fed
Jonathan Wheatley (FT) Jul 26, 2016
Role of US interest rates in provoking currency, banking and debt problems.

Why Dropping the Trans-Pacific Partnership May Be a Bad Idea
Eduardo Porter (NYT) Jul 26, 2016
The pact has few friends left in Washington, but America’s Asian allies may see backing off as a betrayal of Washington’s commitment to the region.

US Exit From WTO Would Unravel Global Trade
Pedro Nicolaci da Costa and Cathleen Cimino-Isaacs (PIIE) Jul 26, 2016
In his latest attack on US trade policy, Republican presidential candidate Donald J. Trump has threatened to exit the 163-country World Trade Organization (WTO), which the United States played a leading role in creating and fostering.

The Soft Brexit Option
Alan Riley (Globalist) Jul 26, 2016
The advocates of a hard Brexit underestimate the costs and complexity of their favored strategy.

Clinton’s Trade Opportunism
WSJ Jul 26, 2016
She gets no benefit from trying to ‘me-too’ Trump on protectionism.

Brexit Knocks Confidence But the Sky Hasn't Fallen
Mark Gilbert (Bloomberg View) Jul 26, 2016
The early signs are that Brexit hasn't triggered an economic meltdown.

The Death of OPEC
Anas Alhajji (Project Syndicate) Jul 26, 2016
Saudi Arabia killed OPEC, and there is no reviving it. But, as competition in energy markets shifts from crude to refined products, new opportunities for cooperation are likely to emerge, resulting in a more efficient and resilient global energy market.

India’s Digital Revolution Poised to Propel Services
Nandan Nilekani (YaleGlobal) Jul 26, 2016
The India Stack – connecting bank accounts, unique ID numbers and mobile phones – will deliver massive productivity in services

Brexit and the EU's fatal flaw
Kevin Hassett and Glenn Hubbard (AEI/FA) Jul 26, 2016
The European Union wasn't destined to fail, but a competition-stifling cartel isn't likely to stay in power.

The Economic Consequences of Brexit
Swati Dhingra (FA) Jul 26, 2016
Ninety-six percent of economists agree that a Brexit would have substantial economic cost to the U.K. economy. The magnitude they're thinking of is about a one percent to three percent decrease in British GDP over the next five years after Brexit, and a bigger two percent to eight percent drop over about 15 years.

Why Italy’s Banks Are a ‘Doom-Loop’ Risk that Could Bury the Eurozone
Franklin Allen (K@W) Jul 26, 2016
Italy's shaky banks could threaten the entire eurozone financial system if officials are not careful in implementing new bailout regulations, notes Franklin Allen, a Wharton emeritus professor of finance.

Failed states and the paradox of civilisation
Ernesto Dal Bó, Pablo Hernandez-Lagos and Sebastián Mazzuca (VoxEU) Jul 26, 2016
While cases of state failure have risen in the last decade, most notably in the Middle East and sub-Saharan Africa, they are not a new phenomenon. Historical evidence from the early modern period, and even the Bronze Age, shows that the majority of formed states have failed rather than thrived. This column introduces the ‘paradox of civilisation’ to characterise the obstacles settlements face in establishing civilisations. The paradox defines the success of a civilisation as a trade-off between the ability to produce economic surplus and to protect it. It is therefore important to correctly balance military and economic support when providing aid. While cases of state failure have risen in the last decade, most notably in the Middle East and sub-Saharan Africa, they are not a new phenomenon. Historical evidence from the early modern period, and even the Bronze Age, shows that the majority of formed states have failed rather than thrived. This column introduces the ‘paradox of civilisation’ to characterise the obstacles settlements face in establishing civilisations. The paradox defines the success of a civilisation as a trade-off between the ability to produce economic surplus and to protect it. It is therefore important to correctly balance military and economic support when providing aid.

What’s ahead for the WTO: Looking around the corner and beyond
Ricardo Meléndez-Ortiz (VoxEU) Jul 26, 2016
Trade ministries, just as other parts of government, need to respond to calls from the public and from global leaders for action on major issues. This column argues that armed with potential policy options identified through the E15Initiative, the WTO is equipped to contribute to solutions in many areas. Purposeful efforts over the coming months and years could help to boost the WTO’s essential and valuable place in ensuring a responsive and inclusive furtherance of globalisation and trade and investment integration that delivers sustainable development outcomes for all. Trade ministries, just as other parts of government, need to respond to calls from the public and from global leaders for action on major issues. This column argues that armed with potential policy options identified through the E15Initiative, the WTO is equipped to contribute to solutions in many areas. Purposeful efforts over the coming months and years could help to boost the WTO’s essential and valuable place in ensuring a responsive and inclusive furtherance of globalisation and trade and investment integration that delivers sustainable development outcomes for all.

After the power plays, Xi must now reform
FT View Jul 27, 2016
The new economy China needs cannot be built on production targets.

Britain’s premature bid for global trade deals
FT View Jul 27, 2016
The UK first needs to decide its economic relationship with the EU.

Chinese default exposes creditor anger at political interference
Gabriel Wildau (FT) Jul 27, 2016
Fate of a state-owned zombie could set precedent for debt disputes.

China bonds are in vogue
James Kynge (FT) Jul 27, 2016
There are attractive returns to be had for yield refugees from Europe.

Theresa May is yet to stamp her authority on Brexit vision
Sebastian Payne (FT) Jul 27, 2016
Trade conflicts highlight the difficulty of laying a path to a new deal.

Vladimir Putin Is His Economy's Worst Enemy
Bloomberg View Jul 27, 2016
He can't revive growth without respecting the rule of law.

Can the World Deal With a New Bank Crisis?
Satyajit Das (Bloomberg View) Jul 27, 2016
The traditional tools needed to recover aren't likely to be available this time.

A New Normal for the U.S. Economy: Slow and Steady
Conor Sen (Bloomberg View) Jul 27, 2016
The industrial recession that just ended didn't spread to other sectors. That shows the economy is rebuilding with resilience.

A Brief History of (In)equality
J. Bradford DeLong (Project Syndicate) Jul 27, 2016
For the last 250 years, at least six historical processes, and as many as a dozen, have influenced the global distribution of income and wealth. That is why economists and policymakers alike must avoid oversimplification in the pursuit of conceptual clarity.

Reversing Brexit
Anatole Kaletsky (Project Syndicate) Jul 27, 2016
Instead of rushing Brexit, Europe’s leaders should be trying to avert it, by persuading British voters to change their minds. The aim should not be to negotiate the terms of departure, but to negotiate the terms on which most British voters would want to remain.

Growth in a Time of Disruption
Michael Spence (Project Syndicate) Jul 27, 2016
Developing countries are facing major obstacles – many of which they have little to no control over – to achieving sustained high growth rates. With reversal of these trends – from low advanced-economy growth to the rise of digital technologies like robotics – out of the question, adaptation is the only option.

The insurance sector and systemic risk
Gaston Gelos and Nico Valckx (VoxEU) Jul 27, 2016
In recent years, the life insurance sector has become more systemically important across advanced economies. This increase is largely due to growing common exposures and to insurers’ rising interest rate sensitivity. This column analyses the evolution of the insurance sector’s contribution to systemic risk. Overall, life insurers do not seem to have markedly changed their asset portfolios toward riskier assets, although smaller and weaker insurers in some countries have taken on more risk. The findings suggest that supervisors and regulators should take a more macroprudential approach to the sector. In recent years, the life insurance sector has become more systemically important across advanced economies. This increase is largely due to growing common exposures and to insurers’ rising interest rate sensitivity. This column analyses the evolution of the insurance sector’s contribution to systemic risk. Overall, life insurers do not seem to have markedly changed their asset portfolios toward riskier assets, although smaller and weaker insurers in some countries have taken on more risk. The findings suggest that supervisors and regulators should take a more macroprudential approach to the sector.

Concerns over political influence at the IMF
FT View Jul 28, 2016
The fund must continue to reduce the undue dominance of Europe.

Africans a shadow of their former selves
Steve Johnson (FT) Jul 28, 2016
Average height falls for 30 years amid poor nutrition, rising population and structural change.

Eurozone must complete banking union to avert crisis
William Rhodes (FT) Jul 28, 2016
Stress test results will put the focus on weaknesses.

Helicopter Money: Why Some Economists Are Talking About Dropping Money From the Sky
Neil Irwin (NYT) Jul 28, 2016
History shows the dangers of a government financing itself using its ability to create money. But here’s why it’s being considered anyway.

Glass-Steagall-Trump-Clinton Act
WSJ Jul 28, 2016
The GOP joins Sanders and Warren in pointless re-regulation.

The Dollar—and the Fed—Still Rule
Ruchir Sharma (WSJ) Jul 28, 2016
Americans may think the U.S. is in hock to China, but Beijing’s economic fate lies in Washington’s hands.

China’s SOE Reform—The Wrong Path
Nicholas R. Lardy (PIIE) Jul 28, 2016
A key component of China’s SOE reform strategy —mergers of the largest firms in the same industry—seems very unlikely to improve the efficiency of bloated state-owned enterprises. Instead, the government should increase competition by allowing the entry of private firms into sectors where a handful of state firms exercise market power and it should subject money-losing state owned firms to hard budget constraints. These policies offer the best prospect for increasing productivity and sustaining China’s economic growth.

G-20 Finance Ministers: Economic Recovery "Weaker" Than Hoped
Bridges, Volume 20, Number 28 Jul 28, 2016
The global economic recovery remains "weaker than desirable," said finance ministers and central bank governors from the G-20 coalition of major advanced and emerging economies, following a 23-24 July meeting in Chengdu, China.

Azevêdo: Time for WTO Members to Shift to Action-Oriented Mode
Bridges, Volume 20, Number 28 Jul 28, 2016
WTO Director-General Roberto Azevêdo has encouraged members to shift from "reflection to action" mode, as delegations prepare to consider what outcomes they might strive for at the organisation’s 2017 ministerial conference.

Time to Rethink Inflation in India
Mihir Sharma (Bloomberg View) Jul 28, 2016
The central bank's new target looks at the wrong measure.

The Real Roots of Populism
Andrés Velasco (Project Syndicate) Jul 28, 2016
Precisely because populism – whether leftist or rightist – is ugly, menacing, and destructive, its growing strength calls for nuanced explanation. A weak grasp of causes would lead to poorly conceived solutions – at which point populism truly would be unstoppable.

What’s New About Today’s Low Interest Rates?
Carmen Reinhart (Project Syndicate) Jul 28, 2016
In an era when public debt write-offs are widely viewed as unacceptable and governments are often reluctant to write off private debts, sustained negative real returns are the slow-burn path to reducing debt. Absent a surprise inflation spurt, this will be a long process.

Brexit Blues in Central Europe
Joji Sakurai (YaleGlobal) Jul 28, 2016
Eurosceptic rhetoric among Hungary, Poland and other Central Europe EU newcomers belies strong attachments

Brexit Blues
John Lanchester (LRB) Jul 28, 2016
Whoever came up with the ‘Take back control’ slogan had spent more time listening than talking. The Remain campaign failed to do that. The dominant note out there in the country since the credit crunch and Great Recession has been one of bafflement, of bewilderment and disorientation. How did this happen? How did we get here? Why does nobody listen to us, why does nobody care about us?

The US student debt bubble is a study in financial dysfunction
Rana Foroohar (FT) Jul 29, 2016
A degree is no longer a ticket to social mobility for poorest Americans.

Turkey's Crackdown on the Economy
Bloomberg View Jul 29, 2016
Erdogan's purge puts the country's economic progress at risk.

China’s Economic Reforms: Global Outlook
Fabio Ghironi and Mercy A. Kuo (Diplomat) Jul 29, 2016
Whether or not TPP is ratified, no one stands to gain from economic war between the U.S. and China.

The TPP Isn't Just a Trade Deal
Noah Smith (Bloomberg View) Jul 29, 2016
What the critics miss is that the treaty would cement U.S. alliances with Asian countries seeking to offset China's regional ambitions.

Beyond Structural Reform in China
Andrew Sheng and Xiao Geng (Project Syndicate) Jul 29, 2016
There is reason to believe that China’s supply-side rebalancing is moving in the right direction. But unless China’s leaders also tackle the challenges posed by market and bureaucratic inefficiencies, the objective of strong and sustainable growth will remain out of reach.

Saving Freedom of Movement in Europe
Hans-Werner Sinn (Project Syndicate) Jul 29, 2016
It is impossible to meet all of the following EU goals: internal freedom of movement, a welfare state, and inclusion of migrants in host countries’ welfare systems. Unless the third objective is abandoned, the Union will disintegrate.

Overcoming the Poisonous Politics of Protectionism
Simon Tilford (Project Syndicate) Jul 29, 2016
Hillary Clinton faces an election that has come to revolve around the legitimacy of a political establishment that she epitomizes. And no issue has fueled that challenge – in the US and Europe alike – more powerfully than international trade.

Fixing the saving problem in Latin America and the Caribbean
Eduardo Cavallo and Tomás Serebrisky (VoxEU) Jul 29, 2016
The Latin American and Caribbean region is trapped in a vicious cycle of low savings and poor use of these savings. This column describes how this problem is reinforced by the current financial system, and prescribes three remedies to policymakers and households to break the cycle. The government should create a better environment for saving and develop a better financial system, but it should also tackle investment distortions and fix broken pension systems. Meanwhile, a change in saving culture should be encouraged from the ground up, with financial education offered to citizens early on in their lives. The Latin American and Caribbean region is trapped in a vicious cycle of low savings and poor use of these savings. This column describes how this problem is reinforced by the current financial system, and prescribes three remedies to policymakers and households to break the cycle. The government should create a better environment for saving and develop a better financial system, but it should also tackle investment distortions and fix broken pension systems. Meanwhile, a change in saving culture should be encouraged from the ground up, with financial education offered to citizens early on in their lives.

Why Voters Don't Buy It When Economists Say Global Trade Is Good
N. Gregory Mankiw Jul 30, 2016
Many people are willing to move away from international economic engagement even as experts overwhelmingly call for a different approach.

Why Is the Stock Market So High? Ask the Bond Market
Jeff Sommer (NYT) Jul 30, 2016
Bonds have risen sharply in value, and their yields have plummeted. That has made stock prices look cheap and dividends seem generous, driving up the market.

Is the Chinese Economy Closed?
David Dollar (EABER) Jul 30, 2016
China is unusual in that it is a developing country that has emerged as a major investor. China itself is an important destination for foreign direct investment, and opening to the outside world has been an important part of its reform program since 1978. But China’s policy is to steer FDI to particular sectors.

Financial stability: Minsky’s moment
Economist Jul 30, 2016
The second article in our series on seminal economic ideas looks at Hyman Minsky’s hypothesis that booms sow the seeds of busts.

Abenomics: Overhyped, underappreciated
Economist Jul 30, 2016
What Japan’s economic experiment can teach the rest of the world.

Post-Brexit industrial strategy must have science at its heart
John Kingman (FT) Jul 31, 2016
Britain’s great research universities are the envy of the rest of the world.

There is no such thing as hard or soft Brexit
Bernard Jenkin (FT) Jul 31, 2016
Britain should look to leave the EU as swiftly and simply as possible.

Putting the Customer First in China
Adam Minter (Bloomberg View) Jul 31, 2016
To build a services-based economy, first concentrate on improving service.

The West’s Decline Would Hurt China
Minxin Pei (Project Syndicate) Jul 31, 2016
From the British vote to leave the EU to the presidential candidacy of Donald Trump in the US, these are trying times for Western democracies. While Chinese leaders may be tempted to gloat, their own legitimacy depends on the success of countries that are, after all, China's main trading partners.

The political economy of culture and ethnicity
Klaus Desmet, Ignacio Ortuño-Ortin and Romain Wacziarg (VoxEU) Jul 31, 2016
The current refugee crisis has highlighted the importance of understanding how ethnic and cultural differences affect social cohesion. This column investigates the links between ethnicity and culture, and the relationship between diversity and civil conflict. It finds that globally, there appears to be little overlap between ethnic identity and cultural identity. Also, ethnic diversity per se has no effect on civil conflict. It is when differences in culture coincide with differences in ethnicity that conflict becomes more likely.