News & Commentary:

Articles/Commentary

On the measuring and mis-measuring of Chinese growth
Hunter Clark, Maxim Pinkovskiy and Xavier Sala-i-Martin (VoxEU) Jul 1, 2017
Unofficial indicators of Chinese GDP often suggest that Beijing’s growth figures are exaggerated. This column uses nighttime light as a proxy to estimate Chinese GDP growth. Since 2012, the authors’ estimate is never appreciably lower, and is in many years higher, than the GDP growth rate reported in the official statistics. While not ruling out the risk of future turmoil, the analysis presents few immediate indications that Chinese growth is being systematically overestimated.

Exchange rates and the Swiss economy
Willem Thorbecke and Atsuyuki Kato (VoxEU) Jul 1, 2017
Since 2007, there have been large changes in the Swiss franc. This column shows that exchange-rate appreciations do not affect the exports, profits, or stock returns of Swiss companies making sophisticated products. In contrast, rises in the franc decrease the exports, profits and stock returns of firms producing medium-high-technology goods. An economy’s production structure is important for weathering exchange-rate fluctuations.

President Trump’s destructive path on steel
FT View Jul 2, 2017
The White House should back down from protectionist threats.

Nomura is back in expansion mode
Laura Noonan and Leo Lewis (FT) Jul 2, 2017
As the investment bank seeks to grow, has it learnt the lessons of 2008 and its acquisition of Lehman assets?

How to Revive Central America
Mary Anastasia O’Grady (WSJ) Jul 2, 2017
A new report suggests reducing barriers to entrepreneurship.

Divided G7 an opportunity for Asia and the G20
Adam Triggs (EAF) Jul 2, 2017
The G7 is falling apart. Russia has been isolated. The United Kingdom has isolated itself. Germany continues a tense relationship with much of Europe. The NATO alliance has been rocked and the future of the European Union remains uncertain. The United States appears determined to oppose its oldest allies on climate, trade, immigration and perhaps still on Russia.

Europe's Deadly Paralysis on Migration
NYT Jul 3, 2017
While thousands of Africans continue to flee horrific conditions, European nations still appear unprepared.

Oh! What a Lovely Trade War
Paul Krugman (NYT) Jul 3, 2017
Hey, let's do something stupid to please the base.

China was the real victor of Asia’s financial crisis
James Kynge (FT) Jul 3, 2017
Even now, Beijing embraces international capital only on its own terms.

China’s interbank bond market in five charts
Gabriel Wildau (FT) Jul 3, 2017
New Hong Kong ‘bond connect’ scheme eases access to world’s third-largest market.

Germany has no need to seize control of the ECB top job
David Marsh (FT) Jul 3, 2017
Jens Weidmann would have more power as finance minister than following Mario Draghi.

Merkel, Trump, Xi and the contest for global leadership
Gideon Rachman (FT) Jul 3, 2017
Uncertainty reigns as the task to identify the world’s kingpin comes into focus at G20.

How to Clear the First Brexit Hurdle
Bloomberg View Jul 3, 2017
Britain and the EU don’t need to fall out over treatment of each other’s citizens.

What Stock Investors Need to Know, and Why
Mohamed Aly El-Erian (Bloomberg View) Jul 3, 2017
Global markets have done great so far in 2017. Are the gains sustainable?

China Bond Connect Has Potential to Shift PBOC Policy
Ben Emons (Bloomberg View) Jul 3, 2017
Watch how Chinese government bond yields respond to inflation and growth data going forward given the impact of foreign investor inflows.

What History Says About Low Volatility
Aaron Brown (Bloomberg View) Jul 3, 2017
Volatility is lower than average historical levels, but it’s at levels typical of the bottom of a quiet period between two crises.

The Global Growth Slump: Causes and Consequences
John C. Williams (FRBSF Econ Letter) Jul 3, 2017
Demographic factors like slowing population and labor force growth, along with a global productivity slowdown, are fundamentally redefining achievable economic growth. These global shifts suggest the disappointing growth in recent years is a harbinger of the future. While the causes of the growth slump are well defined, the consequences will be shaped by choices that policymakers are grappling with around the globe.

Consolidating Latin America’s Gains
Andrés Velasco (Project Syndicate) Jul 3, 2017
The political opening that occurred in many of the region's countries in the 1930s and 1940s eventually gave way to the political disarray of the 1960s and the dictatorships of the 1970s and 1980s. A similar political opening is occurring today, and sustaining it will require fresh thinking and novel policies.

Can “Mercron” Deliver for Europe?
Mark Leonard (Project Syndicate) Jul 3, 2017
If French President Emmanuel Macron and German Chancellor Angela Merkel have one thing going for them, it is their own mutual desire to make their partnership work. Ideally, they will enter into an open political marriage from which all of Europe will benefit, rather than an exclusive relationship that breeds resentment.

Containing the Trump Threat in Europe
Guy Verhofstadt (Project Syndicate) Jul 3, 2017
During his upcoming visit to Poland, US President Donald Trump will likely stoke populist sentiments and encourage the government's illiberalism. It is now up to Europe’s leaders and the more responsible members of Trump’s administration to prevent him from harming the EU – and an alliance upon which global stability rests.

The European banking union at three
Thorsten Beck (VoxEU) Jul 3, 2017
The recent resolutions of the Spanish Banco Popular and of two smaller Italian banks – Veneto Vanca and Banca Popolare di Vicenza – can be seen as a first important test for the banking union. This column assesses the progress made over the past three years. It argues that a ‘never bailout’ rule is inefficient, especially if referring to legacy problems; that a crisis should be resolved before a new regulatory framework is put in place; that to avoid national solutions, we need to go to a complete banking union; and finally, that the process will take some time, and new institutions and regulations are only a small step. The recent resolutions of the Spanish Banco Popular and of two smaller Italian banks – Veneto Vanca and Banca Popolare di Vicenza – can be seen as a first important test for the banking union. This column assesses the progress made over the past three years. It argues that a ‘never bailout’ rule is inefficient, especially if referring to legacy problems; that a crisis should be resolved before a new regulatory framework is put in place; that to avoid national solutions, we need to go to a complete banking union; and finally, that the process will take some time, and new institutions and regulations are only a small step.

Economics of the populist backlash
Dani Rodrik (VoxEU) Jul 3, 2017
Populism has been on the rise for quite some time, and it is doubtful that it will be going away. This column argues that the populist backlash to globalisation should not have come as a surprise, in light of economic history and economic theory. While the backlash may have been predictable, however, the specific forms it took were less so, and are related to the forms in which globalisation shocks make themselves felt in society. Populism has been on the rise for quite some time, and it is doubtful that it will be going away. This column argues that the populist backlash to globalisation should not have come as a surprise, in light of economic history and economic theory. While the backlash may have been predictable, however, the specific forms it took were less so, and are related to the forms in which globalisation shocks make themselves felt in society.

New data on global earnings inequality
Olle Hammar and Daniel Waldenström (VoxEU) Jul 3, 2017
Recent studies have analysed trends in global income inequality, but for most people in the world, labour earnings represent the vast majority of their income. This column uses a new global database on occupational earnings since 1970 to examine trends in earnings inequality between countries’ high- and low- earners, between countries, and between occupational groups. Global earnings inequality has fallen over the past half-century, and so has inequality within occupations, with main equalisation in the late 1990s and 2000s. Recent studies have analysed trends in global income inequality, but for most people in the world, labour earnings represent the vast majority of their income. This column uses a new global database on occupational earnings since 1970 to examine trends in earnings inequality between countries’ high- and low- earners, between countries, and between occupational groups. Global earnings inequality has fallen over the past half-century, and so has inequality within occupations, with main equalisation in the late 1990s and 2000s.

China Opens Its Bond Market To International Investors
David Francis (FP) Jul 3, 2017
Wall Street has long wanted to invest in Chinese debt. Now it will have the chance.

Pakistan Can’t Afford China’s ‘Friendship’
C. Christine Fair (FP) Jul 3, 2017
Pakistan's elites think Chinese cash can save the country. They're wrong.

Development to the rescue of finance – the Bank’s 'cascade' approach
Bretton Woods Observer Jul 3, 2017
World Bank unveils cascade concept that privileges private over public finance. De-risking in order to attract private sector investments threatens to shift risks to public sector and result in third wave of privatisation.

Deepening World Bank and AIIB cooperation: Locking in a failed development model?
Bretton Woods Observer Jul 3, 2017
Co-financing arrangements and increased World Bank-AIIB cooperation on mega-infrastructure projects represent a dangerous global trend that threatens human rights and locks in a failed development model.

Slowing German trend growth does not seem to be a major issue in the electoral campaign
Marc Schattenberg (DB Research) Jul 3, 2017
The developed industrial countries have experienced a steady decline in trend growth since the mid-70s – and Germany is no exception. The robust cyclical upswing is veiling this creeping erosion of growth. The demographic developments will considerably weigh on trend growth in the medium and the longer term. They will dampen labour supply, capital formation and total factor productivity. By 2025, trend growth looks set to halve again, to only ¾%. The electoral programmes of the established parties incorporate different positions on this key issue, as is to be expected.

An EU-Japan pact shows how free trade strides on
FT View Jul 4, 2017
As America and Britain turn inward, the rest of the world integrates.

A diminished Britain must be realistic about the Brexit talks
Simon Fraser (FT) Jul 4, 2017
The other 27 EU members hold the whip hand in the negotiations.

China is the biggest threat to Asian emerging markets
Henny Sender (FT) Jul 4, 2017
Beijing’s ambition to be more reliant on domestic consumption may not be good for neighbours.

Ethiopia bids to become the last development frontier
John Aglionby (FT) Jul 4, 2017
The authoritarian government is building low-cost manufacturing hubs but must also deal with social and political challenges.

Risks remain amid the global recovery
Martin Wolf (FT) Jul 4, 2017
Financial weakness, debt and fears of a collapse in co-operation are hurdles.

Sri Lanka leads ranking in FDI diversification
Cathy Mullan (FT) Jul 4, 2017
Country has spread its appeal beyond tourism to lead fDi Intelligence annual ranking.

Sovereignty still makes sense, even in a globalised world
Robert Tombs (FT) Jul 4, 2017
The great empires of the past have expired, and nation states remain.

Hamilton, the EU and the Upside to Shared Debt
Komal S Sri-Kumar (Bloomberg View) Jul 4, 2017
France and Germany need a history lesson: The first U.S. Treasury secretary made the 13 states issue common debt.

China's Electric Cars Are Actually Pretty Dirty
Mark Buchanan (Bloomberg View) Jul 4, 2017
The technology is only as clean as its sources of power.

What Future for Global Leadership?
Harold James (Project Syndicate) Jul 4, 2017
With global leadership now in question, the G20’s upcoming summit in Hamburg on July 7-8 could be the group’s tensest meeting ever. China and Germany increasingly regard themselves as the new defenders of the international order, but neither can fill America's shoes.

Brexit to Nowhere?
Joschka Fischer (Project Syndicate) Jul 4, 2017
The new political uncertainty in the UK since the June 8 snap election will not make the ongoing Brexit talks any easier. The EU must now negotiate with a severely weakened counterpart, while bearing in mind that the UK will still be important to Europe even after it leaves.

On the joint evolution of institutions and culture
Alberto Bisin and Thierry Verdier (VoxEU) Jul 4, 2017
The recent literature has assumed that institutions and culture are distinct drivers of growth and development. Building on a new theoretical model, this column argues that culture and institutions interact to determine socioeconomic outcomes. The framework can be used to explain the persistence (or otherwise) of extractive institutions, the formation of civic capital, and the emergence of property rights protection. The recent literature has assumed that institutions and culture are distinct drivers of growth and development. Building on a new theoretical model, this column argues that culture and institutions interact to determine socioeconomic outcomes. The framework can be used to explain the persistence (or otherwise) of extractive institutions, the formation of civic capital, and the emergence of property rights protection.

Ukraine’s economy has turned a corner
David Clark (FT) Jul 5, 2017
Reform, not military power, will determine the country’s future.

The eurozone’s strange low-wage employment boom
Claire Jones (FT) Jul 5, 2017
The bloc’s painful crisis may have had long-term effects in the jobs market.

America Once Led the World on Tax Reform
Sarah H. Ketterer (WSJ) Jul 5, 2017
‘We’re going to do what we have to do to remain competitive,’ a Canadian official said in 1986.

Trump's Risky Offshore Oil Strategy
Bob Graham and William K. Reilly (NYT) Jul 5, 2017
The president's move to weaken safety on offshore drill rigs and expand drilling in the oceans threatens workers and beaches.

Progress on Global Development Commitments, or More of the Same? CGD Experts Share Hopes and Predictions for 2017 G20 Summit
Scott Morris, Jeremy Konyndyk, Liliana Rojas-Suarez, Rachel Silverman, Tanvi Jaluka and Mayra Buvinic (CGD) Jul 5, 2017
Each of the G20 summits of the past seven years has suffered in comparison with the London and Pittsburgh Summits of 2009, when the imperative of crisis response motivated leaders, finance ministers, and central bankers to coordinate effectively with each other. Subsequent summits have lacked the same sense of urgency and have failed to deliver any kind of agenda that can be pinpointed as clearly as “saving the global economy.” This week’s summit in Hamburg, Germany promises more of the same, with the real possibility that the G20’s stock could fall even further at the hands of a non-cooperative US delegation.

Will Trump Invoke National Security to Start a Trade War?
Chad P. Bown, Cathleen Cimino-Isaacs and Melina Kolb (PIIE) Jul 5, 2017
The Trump administration's tough stance on trade includes consideration of the unusual strategy of labeling certain imports as a threat to national security and thus potentially subject to steep tariffs.

Greece Has Eliminated Its Trade Deficit, But at a High Cost
Colombe Ladreit de Lacharrière and Melina Kolb (PIIE) Jul 5, 2017
Greece has erased what used to be a very large current account deficit between 2007 and 2016. This would appear to be good news, but it is not. The reason is that the deficit was reduced by Greece cutting back on imports, not on boosting exports, a result of a dramatic drop in economic output. A...

What to expect from the G-20 summit in Hamburg
Colin I. Bradford (Brookings) Jul 5, 2017
After world leaders were met by anti-capitalist protestors at the start of the G-20 summit in Hamburg, Colin Bradford explains why this elite group of nations is feeling pressure to reshape the global economy so that it serves the many and not just the few.

The Destabilizing Effect of Cheap Oil
Andrés Ortega (Globalist) Jul 5, 2017
The fall in the value of oil has far reaching knock-on effects.

Africa's Demography Is Not Its Destiny
Bloomberg View Jul 5, 2017
The United Nations’ latest population projections are a call to action.

Europe's Smaller But Tougher Migrant Crisis
Leonid Bershidsky (Bloomberg View) Jul 5, 2017
The migrant flows into Italy are much tougher to tackle than the refugee crisis of 2015-2016.

Keep Eye on Sovereign Debt for Next Minsky Moment
Alberto Gallo (Bloomberg View) Jul 5, 2017
The recent turmoil in bonds offers a good example of what's to come as the global economy recovers and central bankers curb stimulus.

The New Economy Needs to Go a Bit Retro
Conor Sen (Bloomberg View) Jul 5, 2017
Companies like Uber and Facebook found they can't quite revolutionize transportation and media without providing transportation and creating media.

Why More Jobs Means Lower Commodity Prices
Shelley Goldberg (Bloomberg View) Jul 5, 2017
The reasons? For one, economic growth and technological advancements lead to efficiency.

The Fed Follows a Script, But Inflation Isn't Playing Its Part
Daniel Moss (Bloomberg View) Jul 5, 2017
Where are the wage increases that should go along with such low unemployment?

Investing in Africa’s Educators
Samantha Williams (Project Syndicate) Jul 5, 2017
When global leaders gather in Hamburg this week for the G20 summit, the new G20-Africa Partnership will take center stage. But those committed to helping Africa should focus squarely on the nuts and bolts of aid and development – and that means investing in local leadership.

The Art of the Surplus
Christoph M. Schmidt (Project Syndicate) Jul 5, 2017
Germany’s persistently high – and, lately, rising – current-account surplus may not be on the official agenda of this week’s G20 summit in Hamburg, yet it is bound to provoke tensions among the assembled leaders. That's why some potentially damaging misconceptions about the external imbalance need to be addressed.

Shaking Russia’s Weak Economic Hand
Kenneth Rogoff (Project Syndicate) Jul 5, 2017
Despite the steep drop in oil prices that began in 2014, Russia has managed to escape a deep financial crisis. But while the economy is enjoying a modest rebound after two years of deep recession, the future no longer seems as promising as its leadership thought just five years ago.

A G20 Refugee Agenda
Syed Munir Khasru (Project Syndicate) Jul 5, 2017
The scale of the world's forced migration crisis has revealed troubling structural flaws in the very organizations tasked with addressing it. Weak mandates, insufficient funding, and failed governance systems have hurt the ability of intergovernmental agencies to act with authority in the name of the most vulnerable.

Growing, shrinking, and long-run economic performance
Stephen Broadberry and John Joseph Wallis (VoxEU) Jul 5, 2017
Most analysis of long-run economic performance abstracts from short-run fluctuations and seeks to explain improved performance through an increase in the rate of growth. Using data on annual rates of change of per capita income reaching back to the 13th century for some countries, this column show that improved long-run performance has actually occurred primarily through a decline in the rate and frequency of shrinking. Structural change, technological change, demographic change and the changing incidence of warfare offer at best a partial explanation; a full understanding requires a consideration of institutional change. Most analysis of long-run economic performance abstracts from short-run fluctuations and seeks to explain improved performance through an increase in the rate of growth. Using data on annual rates of change of per capita income reaching back to the 13th century for some countries, this column show that improved long-run performance has actually occurred primarily through a decline in the rate and frequency of shrinking. Structural change, technological change, demographic change and the changing incidence of warfare offer at best a partial explanation; a full understanding requires a consideration of institutional change.

Transition to clean technology
Daron Acemoglu, Ufuk Akcigit, Douglas Hanley and William Kerr (VoxEU) Jul 5, 2017
Substantial headway has been made in the transition to clean technology, but recent political developments threaten this progress. This column examines the transition process using a microeconomic model of competition in production and innovation between clean and dirty technologies. The results suggest that production taxes can deal with dirty emission externalities, while research subsidies are sufficient to redirect innovation towards clean technologies. However, delaying intervention will drastically slow down the overall transition. Substantial headway has been made in the transition to clean technology, but recent political developments threaten this progress. This column examines the transition process using a microeconomic model of competition in production and innovation between clean and dirty technologies. The results suggest that production taxes can deal with dirty emission externalities, while research subsidies are sufficient to redirect innovation towards clean technologies. However, delaying intervention will drastically slow down the overall transition.

Getting rid of non-performing loans in Europe
Giorgio Barba Navaretti, Giacomo Calzolari and Alberto Pozzolo (VoxEU) Jul 5, 2017
There is a growing awareness that non-performing loans generate risks of financial instability and constrain lending growth, and that coordinated action to solve the problem in Europe is both necessary and achievable. This column discusses proposals for state-supported vehicles, such as asset management companies, put forward by the main international organisations and prominent scholars to deal with the large backlog of non-performing loans. Part of this backlog will be resolved through market-based solutions, but due to market failures and capital shortages of critical banks, state-supported schemes are also deemed necessary. There is a growing awareness that non-performing loans generate risks of financial instability and constrain lending growth, and that coordinated action to solve the problem in Europe is both necessary and achievable. This column discusses proposals for state-supported vehicles, such as asset management companies, put forward by the main international organisations and prominent scholars to deal with the large backlog of non-performing loans. Part of this backlog will be resolved through market-based solutions, but due to market failures and capital shortages of critical banks, state-supported schemes are also deemed necessary.

Relationship between the Chinese housing and marriage markets
Shang-Jin Wei and Xiaobo Zhang (VoxDev) Jul 5, 2017
An unfavourable ratio of young men to young women could explain simultaneously skyrocketing housing prices and rising home ownership.

A Different Ever Closer Union
George Friedman (GPF) Jul 5, 2017
The U.S. and Poland have similar interests, particularly when it comes to Russia.

The focus on the G20 summit will be wrongly directed
Mohamed El-Erian (FT) Jul 6, 2017
There are serious challenges to consider instead of personalities.

The Japan-EU Trade Warning
WSJ Jul 6, 2017
U.S. protectionism will hurt U.S. companies as countries cut other deals.

In a Remote Village, Witnessing Miracles
Nicholas Kristof (NYT) Jul 6, 2017
Being born with clubfoot in a poor country is no longer an automatic life sentence.

EU, Japan Set to Announce Political Deal in Trade Talks
Bridges, Volume 21, Number 24 Jul 6, 2017
Leaders from the EU and Japan are meeting on Thursday in Brussels, Belgium, where they are expected to announce a political agreement on a future trade deal, following several weeks of round-the-clock negotiations to bring the talks to this advanced stage.

Trade, Globalisation in the Spotlight as G20 Leaders Head to Hamburg Summit
Bridges, Volume 21, Number 24 Jul 6, 2017
Leaders from the G20 will be arriving in Hamburg, Germany, for their annual summit this weekend, which will feature high-profile discussions on free and fair trade, steel, protectionism, and international climate action.

Pacific Alliance Eyes New Trade Deals with Creation of “Associate Member” Role
Bridges, Volume 21, Number 24 Jul 6, 2017
The Latin American trading bloc known as the Pacific Alliance has begun talks for free trade agreements (FTAs) with Australia and New Zealand, respectively, following a summit that also welcomed both of those countries and two others as incoming “associate members” of their group.

Private Equity and Passive Investors Are on a Collision Course
Danielle DiMartino Booth (Bloomberg View) Jul 6, 2017
Call it the latest in a long line of unintended consequences thanks to interest rates being held too low for too long.

Cash Falling Out of Fashion; Is it Doomed to Disappear?
Bhaskar Chakravorti (Brink) Jul 6, 2017
Cash is being displaced in so many ways that it’s hard to keep track. There are credit cards and electronic payments; apps such as Venmo, PayPal and Square Cash; cryptocurrencies that operate outside the purview of central banks. Is cash about to disappear?

The G-19 Must Prove Trump Wrong
Bloomberg View Jul 6, 2017
At their meeting in Germany this week, leaders of the world's big economies can show that multilateralism still works.

What the G-20 Should Be Talking About
Victoria Bateman (Bloomberg View) Jul 6, 2017
Economic shocks are inevitable. How can governments prepare for them?

The U.S. Needs to Invest in Minds, Not Miners
Caroline Freund and Christine McDaniel (Bloomberg View) Jul 6, 2017
Otherwise the job market will leave a lot of men behind.

Bond Market's Positive Vibes Suddenly Disappear
Scott Dorf (Bloomberg View) Jul 6, 2017
Threats are evident from hawkish central bankers, improved economic data and ominous trading patterns.

The 5 Most Important Things the G-20 Won't Do
Leonid Bershidsky (Bloomberg View) Jul 6, 2017
All Angela Merkel can do in Hamburg is try to keep the peace.

India Finds Reform, Not Reformers
Mihir Sharma (Bloomberg View) Jul 6, 2017
There's good news about the GST, bad news and truly appalling news.

Why Build Financially Inclusive Economies?
Mark Suzman (Project Syndicate) Jul 6, 2017
The lack of access to even the most basic financial services makes it difficult for an estimated two billion people to save money and effectively participate in the global economy. When G20 leaders meet in Germany this week, digital financial inclusion must remain at the top of the agenda.

The Inflation Target Trap
Daniel Gros (Project Syndicate) Jul 6, 2017
Central banks have a problem: economic growth is accelerating, but inflation has failed to take off. But perhaps the solution is not to continue trying to raise inflation – for most people, growth without inflation is ideal – but rather for central banks to end their preoccupation with inflation targeting.

Saving Emerging Markets From Trump
Erik Berglöf (Project Syndicate) Jul 6, 2017
US President Donald Trump has managed to sow doubts about the entire framework of global trade and economic openness. Mexico, like other emerging economies, is right to bemoan Trump's agenda; but there are still measures its government can take to improve growth.

Trump’s Gift to Europe
Joseph S. Nye (Project Syndicate) Jul 6, 2017
At a recent conference in France, a number of Europeans surprised their American guests by arguing that President Donald Trump might be good for Europe. With Trump returning to Europe for the G20 summit in Hamburg, it's worth asking whether they are right.

The G20’s Misguided Globalism
Dani Rodrik (Project Syndicate) Jul 6, 2017
The failure to maintain open trade policies is not really a failure of global cooperation, but rather a failure of domestic policy. On trade and many other issues, the G20 and other international fora should limit the scope of collective action to policies aimed at supplying genuine public goods.

Why Trump Went to Warsaw
Slawomir Sierakowski (Project Syndicate) Jul 6, 2017
The founder of Poland’s Krytyka Polityczna unpacks the energy politics that lay behind the US president’s visit. Is an opening for US gas exports really in the country’s interest?

Awe trumps rules: An update on this year’s G20 protectionism
Simon Evenett and Johannes Fritz (VoxEU) Jul 6, 2017
The year to date has seen profound changes in G20 protectionist dynamics.This column presents the lastest Global Trade Report, which asks whether President Trump’s bluster has accomplished what the G20 failed to deliver – namely, less protectionism. The year to date has seen profound changes in G20 protectionist dynamics.This column presents the lastest Global Trade Report, which asks whether President Trump’s bluster has accomplished what the G20 failed to deliver – namely, less protectionism.

Foreign banks and the international transmission of monetary policy
Asli Demirgüç-Kunt, Bálint Horváth and Harry Huizinga (VoxEU) Jul 6, 2017
Monetary policies pursued by lending countries may have negative spillovers for financial stability in emerging markets, because monetary policy is transmitted through its effect on the aggregate supply of cross-border loans. This column uses data on the international syndicated loan market to argue that foreign bank ownership in a borrower country reduces the negative impact of lender-country monetary policy on cross-border syndicated loan supply. This suggests that countries could stabilise their cross-border credit supply by reducing restrictions on foreign bank entry into local markets. Monetary policies pursued by lending countries may have negative spillovers for financial stability in emerging markets, because monetary policy is transmitted through its effect on the aggregate supply of cross-border loans. This column uses data on the international syndicated loan market to argue that foreign bank ownership in a borrower country reduces the negative impact of lender-country monetary policy on cross-border syndicated loan supply. This suggests that countries could stabilise their cross-border credit supply by reducing restrictions on foreign bank entry into local markets.

Capital inflows: The good, the bad, and the bubbly
Glenn Hoggarth, Carsten Jung and Dennis Reinhardt (VoxEU) Jul 6, 2017
Partly as a result of the Global Crisis, assessments of capital inflows and their impact on market efficiency and technology transfer have begun to take into account their association with financial crises. This column argues that the riskiness of inflows depends on the type of lender and its currency denomination. It finds that equity flows are more stable than debt flows, non-banks more stable than banks, and local currency more stable than foreign. Macroprudential policies can support the stabilisation of inflows. Partly as a result of the Global Crisis, assessments of capital inflows and their impact on market efficiency and technology transfer have begun to take into account their association with financial crises. This column argues that the riskiness of inflows depends on the type of lender and its currency denomination. It finds that equity flows are more stable than debt flows, non-banks more stable than banks, and local currency more stable than foreign. Macroprudential policies can support the stabilisation of inflows.

Yet Again, No 'Trump Bump' in Economic Growth
Jack Denton (PS) Jul 6, 2017
Two major Federal Reserve Banks say that gross domestic product growth for the second quarter of 2017 will end up being significantly lower than expected by many economists.

How Trump Is Taking Advantage of a Divided Europe
Masha Lipman (New Yorker) Jul 6, 2017
In Poland, the President played on growing economic divisions that threaten to create a “two-tiered” E.U.

Government Policy and Labor Productivity
Stanley Fischer (FRB Governors) Jul 6, 2017
I will consider the role that policy may play through each of three channels: tangible and intangible investment, labor quality, and innovation.

An Aging Population Explains Most—But Not All—of the Decline in the US Labor Force Participation Rate Since 2007
Harris Eppsteiner, Jason Furman and Wilson Powell III (PIIE) Jul 7, 2017
The aging of the US population explains 79 percent of the decline in the participation rate.

South Korea Is the New Front in Trump’s Trade Strategy
Gary Clyde Hufbauer and Cathleen Cimino-Isaacs (PIIE) Jul 7, 2017
After bashing trade relations with China, Mexico, and Europe since taking office, President Trump has set his sights on renegotiating the Korea-US Trade Agreement (KORUS) in force since 2012.

The G-20’s new Compact with Africa: A promising initiative requiring sustained commitment
Amar Bhattacharya and Brahima Sangafowa Coulibaly (Brookings) Jul 7, 2017
The G-20's Compact with Africa shows promise through its novel approach, but Amar Bhattacharya and Brahima Coulibaly argue that long-term commitment on both sides is necessary for it to succeed.

Does China’s ‘One Belt, One Road’ Threaten an East-West Rift Within Europe?
Malgorzata Jakimów (Brink) Jul 7, 2017
China’s massive ‘Belt and Road Initiative’ (BRI) is a strategy intended to win other countries over rather than coercing them. It seems to be working… but at what cost? European countries are now competing with each other, vying for China’s attention and cash. Regardless of the economic benefits, the EU still sees BRI as a threat.

Britain Isn't Greece, Prime Minister
Bloomberg View Jul 7, 2017
Enough austerity. The government can afford to raise spending where that would help the economy.

The Future of Work Demands Big Ideas
Bloomberg View Jul 7, 2017
The modern economy isn’t just about digging holes and bashing metal.

Italy's Bank Bailout Serves German Interests Too
Melvyn Krauss (Bloomberg View) Jul 7, 2017
The Italian solution helps stabilize the broader banking crisis and removes an obstacle to tighter monetary policy.

Euro's Short Squeeze May Just Be Getting Started
Jason M Schenker (Bloomberg View) Jul 7, 2017
For traders, the downside isn’t the biggest risk to the shared currency, but rather the potential for further appreciation.

America Is Struggling With Economic Rot
Noah Smith (Bloomberg View) Jul 7, 2017
Even before the Great Recession there were signs that the U.S. had deep structural problems.

Mauricio Macri Should Be Getting Nervous
Mac Margolis (Bloomberg View) Jul 7, 2017
Voters are souring on his market-minded reforms, and midterms are just a few months away.

The G20’s Role Reversals
Project Syndicate Jul 7, 2017
The list of pressing global issues confronting G20 leaders seems to grow every year. But this year, the very countries that once brought solutions to the table may be the biggest problems of all.

The G20 and the Inequality Crisis
Helle Thorning-Schmidt (Project Syndicate) Jul 7, 2017
In 2009, the G20's emergence as the world’s leading forum for addressing global economic challenges helped pull the world back from the brink of depression. Today, the G20 must play a similar role in addressing a challenge that has become no less urgent.

Unlocking Girls’ Potential
Thoai Ngo (Project Syndicate) Jul 7, 2017
Giving girls the skills and knowledge they need to become productive women who can participate in the twenty-first-century economy empowers them in all aspects of their lives. It is the right thing to do for global development – and for girls and women themselves.

Risk, return, and skill in the portfolios of the wealthy
Laurent Bach, Laurent Calvet and Paolo Sodini (VoxEU) Jul 7, 2017
A growing literature conjectures that wealthy households earn higher average returns, which can further exacerbate wealth inequality. Using Swedish administrative data, this column shows that the wealthy indeed earn higher returns on their asset portfolios. These high returns are primarily due to high levels of compensated risk. Households at the top of the wealth distribution further exhibit highly heterogeneous investment performance due to high levels of idiosyncratic risk. A growing literature conjectures that wealthy households earn higher average returns, which can further exacerbate wealth inequality. Using Swedish administrative data, this column shows that the wealthy indeed earn higher returns on their asset portfolios. These high returns are primarily due to high levels of compensated risk. Households at the top of the wealth distribution further exhibit highly heterogeneous investment performance due to high levels of idiosyncratic risk.

The spanning hypothesis and risk premia in long-term bonds
Michael D. Bauer and James Hamilton (VoxEU) Jul 7, 2017
Several recent empirical papers have challenged the ‘spanning hypothesis’, which holds that the level, slope, and curvature of bond yield curves are sufficient to forecast returns and estimate bond risk premia This column argues that these studies suffer from a previously unrecognised standard error bias. Controlling for this bias, false positives are found to be between six and twelve times more likely, suggesting that the evidence against the spanning hypothesis is substantially less convincing than would appear from the studies. Several recent empirical papers have challenged the ‘spanning hypothesis’, which holds that the level, slope, and curvature of bond yield curves are sufficient to forecast returns and estimate bond risk premia This column argues that these studies suffer from a previously unrecognised standard error bias. Controlling for this bias, false positives are found to be between six and twelve times more likely, suggesting that the evidence against the spanning hypothesis is substantially less convincing than would appear from the studies.

Why Germany’s current-account surplus is bad for the world economy
Economist Jul 8, 2017
The country saves too much and spends too little.

G20 is desperately trying to save a failed world order
Nick Dearden (Aljazeera) Jul 8, 2017
The G20 agenda utterly fails to break with the tired, broken free-market policies that brought devastation to our world.

The myth of Britain’s decline
Robert Tombs (Spectator) Jul 8, 2017
Our glory days are not over – they’re in full swing.

France’s detox from debt is Macron’s toughest task
FT View Jul 9, 2017
Slimming the state matters more than hitting the EU deficit target.

Modi's Strongman Economics
Adam Roberts (NYT) Jul 9, 2017
Prime Minister Narendra Modi's economic promises are so extraordinary they must be taken with a deep slurp of salty lime juice.

Trump threat drives Japan and China closer
Yoichi Funabashi and Harry Dempsey (EAF) Jul 9, 2017
We may be witnessing a game change in the China–Japan relationship.

Why Bitcoin Is Booming
John O. McGinnis and Kyle W. Roche (WSJ) Jul 9, 2017
It’s become a trusted alternative when fiat money’s value is corrupted by politics.

New Bailouts Prove ‘Too Big to Fail’ Is Alive and Well
Neel Kashkari (WSJ) Jul 9, 2017
Regulators keep insisting bondholders will take losses, but then they’re reluctant to impose them.

Trump’s trade trap
Robert J. Samuelson (WP) Jul 9, 2017
The president’s foreign policy is extraordinary: a voluntary surrender of power and influence.

Impacts of outward foreign direct investment
Kazunobu Hayakawa and Toshiyuki Matsuura (VoxEU) Jul 9, 2017
Foreign direct investment has generally been found to have positive effects for firms in their home country. There are, however, concerns about potential negative effects for other domestic firms in the investing firm’s supply chain. This column uses Japanese firm-level data to explore the supply chain effects of foreign direct investment. Foreign direct investment does not appear to have adverse effects on domestic transaction networks. Rather, the positive effects of firms’ foreign investing are found to spread to the whole economy through their supply chains. Foreign direct investment has generally been found to have positive effects for firms in their home country. There are, however, concerns about potential negative effects for other domestic firms in the investing firm’s supply chain. This column uses Japanese firm-level data to explore the supply chain effects of foreign direct investment. Foreign direct investment does not appear to have adverse effects on domestic transaction networks. Rather, the positive effects of firms’ foreign investing are found to spread to the whole economy through their supply chains.

The robot revolution blurs the line between man and machine
John Thornhill (FT) Jul 10, 2017
Humanoid bots feed an impulse to wonder what makes us human, rather a creepy challenge.

Fears of trouble if tide goes out on emerging market bond ETFs
Jonathan Wheatley and Robin Wigglesworth (FT) Jul 10, 2017
Flood of money into this debt could later cause problems in a falling market.

Banking union success can be replicated on the fiscal front
Enrico Perotti (FT) Jul 10, 2017
A grand bargain between the core and periphery eurozone will ensure its survival.

Rules alone won’t ensure good governance in Asia
Ken Koyanagi (Nikkei Asian Review/FT) Jul 10, 2017
The region must embrace transparency to truly supervise corporate conduct.

The G-20: Another Vacuous Meet-and-Greet
Walter Russell Mead (WSJ) Jul 10, 2017
As the empty summit rituals unfolded, the great powers were busy making history.

How to Squeeze China
William McGurn (WSJ) Jul 10, 2017
Force ruling elites to choose between North Korea and American colleges for their kids.

The Bernanke-Yellen Bubble-Depression
Mark Thornton (Mises Daily) Jul 10, 2017
In a recent article I advocated for a new way of naming business cycles. The new approach emphasizes the cause rather than the effect. So instead of the “housing bubble” and “financial crisis,” we should refer to the Greenspan-Bernanke Crisis. Here we will turn our attention to the current situation.

Retuning the KORUS FTA
Jeffrey J. Schott (PIIE) Jul 10, 2017
On June 30, President Trump talked trade with newly elected Korean President Moon Jae-in. It didn’t go well.

Design Thinking: the New DNA of the Financial Sector
Josemaria Siota and Inigo Ania Principal (Brink) Jul 10, 2017
The banking industry faces digital disruption, an increase in regulatory demands, and changes in customer preferences. Fintech startups and emerging technology firms have—unsurprisingly—jumped at these challenges. But according to new research, a surprising contingent has also embraced the coming disruption: legacy banks.

Long-Term Outlook for Australia: Less Rosy
Robert Mead (PIMCO) Jul 10, 2017
After 25 years of steady economic growth, Australia is on the verge of wresting bragging rights from the Netherlands for the longest period on record without a recession. The future may not be as rosy.

The Inflation Numbers Yellen Should Be Talking About
Daniel Moss (Bloomberg View) Jul 10, 2017
Prices are cooling in China, which should worry anyone watching the recovery in the U.S.

Asia's Financial Crisis Still Has 5 Things to Teach Us Now
Mohamed Aly El-Erian (Bloomberg View) Jul 10, 2017
The West could learn a thing or two 20 years after the region plunged into turmoil.

Asia’s Unhappy Anniversary
Barry Eichengreen (Project Syndicate) Jul 10, 2017
This month marks the 20th anniversary of the Asian financial crisis. While such milestones are not exactly cause for celebration, they at least afford an opportunity to look back and examine what has changed – and, no less important, what hasn’t.

The New Abnormal in Monetary Policy
Nouriel Roubini (Project Syndicate) Jul 10, 2017
Financial markets are starting to get rattled by the winding down of unconventional monetary policies in many advanced economies. But such policies may not be gone for long, because a new recession or financial crisis would force central banks to deploy measures such as quantitative easing and negative interest rates once again.

How Healthy Is the Global Financial System?
Mohamed A. El-Erian (Project Syndicate) Jul 10, 2017
In recent weeks, policymakers on both sides of the Atlantic have affirmed the financial system’s soundness and stability. And yet, it would be premature to declare victory: while some financial risks have been eliminated, others have migrated into less regulated non-bank activities.

Is the Indian Economy Poised for a New Phase of Growth?
K@W Jul 10, 2017
Far-reaching structural reforms, cleaner bank balance sheets and a rash of new investable savings have spurred hopes of lucrative stock market returns in India.

What's Holding Back Business Formation?
Patrick Kiernan and Huiyu Li (FRBSF Econ Letter) Jul 10, 2017
The pace of business start-ups in the United States has declined over the past few decades. Economic theory suggests that business creation depends on the available workforce, and data analysis supports this strong link. By contrast, the relationship between start-ups and labor productivity is less well-defined, in part because entrepreneurs face initial costs that rise with productivity, specifically their own lost income from alternative employment. Overall, policies that incorporate improving labor availability may help to boost new business growth.

Sunlight as disinfectant: Disclosure requirements and corruption in India
Raymond Fisman (VoxDev) Jul 10, 2017
Disclosure requirements weed out ‘bad’ politicians by encouraging exit from politics and increasing the likelihood of incumbents being re-elected. “Sunlight,” Justice Louis Brandeis famously wrote, “is said to be the best of disinfectants.” It’s an alluring notion – that transparency and free access to information will root out corruption and malfeasance in government.

Be The Business is a welcome initiative to improve UK productivity
John Thornhill (FT) Jul 11, 2017
Practical advice, not theoretical economics, is needed.

Gig economy workers need more choice not more flexibility
Jonan Boto (FT) Jul 11, 2017
Government should encourage companies to improve employment options.

China backs economic power with political muscle in Africa
David Pilling and Charles Clover (FT) Jul 11, 2017
Long-held policy of non-interference tested in pursuit of resources.

The middle class is not shrinking as much as it thinks
Sarah O'Connor (FT) Jul 11, 2017
Automation has often taken routine jobs that have been replaced by better ones.

Is a More Prosperous World More Secure? Not as Trump Sees It
Eduardo Porter (NYT) Jul 11, 2017
The president has abandoned a policy consensus that alleviating poverty around the world is a key to reducing the chances of instability and conflict.

Reaccelerating Convergence in Central, Eastern and Southeastern Europe—The Role of Governance and Institutions
Poul Mathias Thomsen (IMF) Jul 11, 2017
During the first twenty years of the transition process—and here I leave out the period following the global financial crisis—countries in the region benefitted from a confluence of positive developments that are unlikely to be replicated.

The G-20 progress that failed to grab headlines
Homi Kharas (Brookings) Jul 11, 2017
While the media focused on protests and personal dynamics between leaders at last week’s summit in Hamburg, the substantive work of the Group of 20 moved forward quietly behind the scenes.

Why Africa’s sky-high returns are China-bound
Brian Caplen (Banker) Jul 11, 2017
Banks in Africa have the highest returns on capital in the world, and the potential in other sectors is equally huge. But, writes Brian Caplen, China is so far ahead in the investment game on the continent that it may be difficult for rivals to catch up.

India After the G-20 Summit
Sanjeev Ahluwalia (Globalist) Jul 11, 2017
How does India fit into the world economy? Does the world's soon to be most populous nation have a viable economic strategy?

The Macron Revolution Should Be About Growth
Bloomberg View Jul 11, 2017
The budget deficit is hardly France's biggest problem. So why is the government wasting precious political capital on the issue?

Central Banks' Focus on Financial Stability Has Unintended Consequences
Ben Emons (Bloomberg View) Jul 11, 2017
A much shallower path of monetary policy tightening might be in the cards

Why China May Never Democratize
Tyler Cowen (Bloomberg View) Jul 11, 2017
Freedom is no longer inevitable. Nationalism is.

How Foreign Aid Helps Grand Rapids, Michigan
Marcela Escobari (Bloomberg View) Jul 11, 2017
What happens in Central America doesn't stay in Central America.

U.S. Is Still a Global Leader. Trump Can't Change That.
Conor Sen (Bloomberg View) Jul 11, 2017
Trump's America is dying. The rest of the nation is a growing, shining city on a hill.

The G20’s Harmony Without Trump
Jeffrey D. Sachs (Project Syndicate) Jul 11, 2017
Following the G7 meeting in late May, German Chancellor Angela Merkel lamented that Europe could no longer fully rely on the US. Behind the scenes, she and the highly professional German diplomatic corps worked overtime to secure consensus – minus America – at the G20 summit in Hamburg.

Trump’s Unethical Aid Cuts
Peter Singer (Project Syndicate) Jul 11, 2017
When US President Donald Trump justifies cutting foreign aid on the grounds that other countries are not paying their fair share, many people believe him. In reality, it is the US that is not paying its fair share.

What Money Managers Miss in Currency Carry Trades
Nikolai Roussanov (K@W) Jul 11, 2017
why money managers who do both commodity and currency carry trades could be overloading on risk.

Singapore: Designing the Future in the Midst of Uncertainty
Lester Gunnion (WFR) Jul 11, 2017
The Singapore government has a vision of transitioning to higher-value-added industries, and thus boosting productivity, by focussing on skill development, innovation, and global integration. However, this process is likely to face both external and internal challenges.

Populism's Perfect Storm
Rogers Brubaker (Boston Review) Jul 11, 2017
The appeal of populism—left and right—is affective, predicated on an enchantment with a charismatic leader. But populism thrives equally on an affective disinvestment from politics as usual. It rides on an exceptionality easily proven hollow. In fact, the very forces that sustain populist politics could eventually undermine populism.

Japan needs Abenomics, with or without the man
FT View Jul 12, 2017
The voters’ priority is the economy and it should be Abe’s as well.

Inflation-adjusted emerging market bond yields hit record high
Steve Johnson (FT) Jul 12, 2017
Anomaly emerges as central banks fail to keep pace with tumbling inflation.

Governance of natural resources still has far to go
Adrienne Klasa (FT) Jul 12, 2017
Only a fifth of oil or mining economies manage their wealth well.

Why the ‘Brussels effect’ will undermine Brexit regulatory push
Alan Beattie (FT) Jul 12, 2017
Vital industrial sectors are likely to upset optimistic predictions that Britain will be able to easily negotiate new deals with the EU.

Nigeria has let a crisis go to waste
David Pilling (FT) Jul 12, 2017
Economic collapse was meant to spur diversification — that has not happened.

Introducing MAGAnomics
Mick Mulvaney (WSJ) Jul 12, 2017
The Trump agenda for achieving 3% economic growth.

What's Driving Global Populism?
David Gordon (Mises Daily) Jul 12, 2017
Donald Trump’s victory in the November 2016 election for president of the United States astonished the world. Though he had never held political office, he won the Republican nomination. The leading polls predicted his loss to Hillary Clinton in the general election, but he prevailed. How was this possible? John Judis’s book was written before Trump’s ultimate triumph, but it offers an important account of the reasons for Trump’s rise to prominence. Unfortunately, this account rests on bad economics.

Aid for Trade’s 2.0 upgrade
Jorge Moreira da Silva (OECD Insights) Jul 12, 2017
Access to global digital trade can give the development agenda the boost it needs.

How to make finance a force for sustainability
Dirk Schoenmaker (Bruegel) Jul 12, 2017
Traditional finance focuses on financial return, considering the financial sector separate from both society and the environment. In contrast, sustainable finance considers financial, social and environmental returns in combination. A framework for sustainable finance will move from the narrow shareholder model to a broader stakeholder model.

The International Tax Dimension of Economic Growth in Asia
Mitsuhiro Furusawa (IMF) Jul 12, 2017
I will discuss some of the key issues that need to be addressed in the coming years—including domestic revenue mobilization. I will then turn to the topic of international tax policy.

The Liberal International Order: Just Who Shredded It?
Stephan Richter (Globalist) Jul 12, 2017
Blaming Putin cannot cover up the noxious combination of collective U.S. amnesia and the transparent shift of accountability for the proper conduct in international affairs.

India Will Pay for Populism
Mihir Sharma (Bloomberg View) Jul 12, 2017
Writing off farmers' debts is politically expedient but economically foolish.

The Caution Light Blinking in Yellen's Testimony
Daniel Moss (Bloomberg View) Jul 12, 2017
Appearances this week by two Fed officials give insight into the push for rate increases -- not too many, and not too fast.

India’s Botched Tax Reform
Shashi Tharoor (Project Syndicate) Jul 12, 2017
Many in India have long advocated a national goods and services tax, which has the potential to unify India's national market, making the economy more transparent, digitized, and efficient. But the GST that Prime Minister Narendra Modi's government has just implemented is likely to be a source of confusion and frustration.

Asia’s Hierarchies of Humiliation
Devesh Kapur (Project Syndicate) Jul 12, 2017
With nationalism on the rise across Asia, leaders have strong incentives to craft a version of history that advances their cause, and few historical memories are as effective for this purpose as those of traumatic humiliation. China has mastered this dangerous approach, but it can be seen elsewhere, too, including in India.

A New Course for Economic Liberalism
Sebastian Buckup (Project Syndicate) Jul 12, 2017
Neoliberal economics has reached a breaking point. As a result, the traditional left-right political divide is being replaced by a split between those seeking forms of growth that are less inclined toward extreme concentration of wealth and opportunity and those seeking to end such concentration by closing open markets and societies.

Why robots won’t steal all our jobs
Robert J. Samuelson (WP) Jul 12, 2017
New technologies inspire new jobs, a study concludes.

The local dynamics of complex warfare
Hannes Mueller, Dominic Rohner and David Schönholzer (VoxEU) Jul 12, 2017
The nature of military and social conflict has changed in the last three decades, particularly in the way it impacts civilians locally. This column presents new research that models localised conflict based on the spatial configuration of groups, using evidence from conflict in Northern Ireland. The model can help target policies at the origin of attacks and with attempts to change the interaction between local groups, reducing conflict in the short-to-medium term. The nature of military and social conflict has changed in the last three decades, particularly in the way it impacts civilians locally. This column presents new research that models localised conflict based on the spatial configuration of groups, using evidence from conflict in Northern Ireland. The model can help target policies at the origin of attacks and with attempts to change the interaction between local groups, reducing conflict in the short-to-medium term.

Import competition and the quality of domestic goods
Mary Amiti and Amit Khandelwal (VoxDev) Jul 12, 2017
Lower tariffs promote quality upgrading of products close to the world quality frontier, but discourage quality upgrading for those far away from it. Firms must produce high-quality goods to be competitive in international markets (Kremer 1993, Grossman and Helpman 1991), but how do they transition from producing low- to high-quality goods? In a recent study, we focus on how tougher import competition affects firms’ decisions to upgrade the quality of their goods (Amiti and Khandelwal 2013).

Economic Growth — in the World and in China
Robert J. Barro (VoxChina) Jul 12, 2017
Lessons for China’s economic growth — past and future — can best be drawn by studying the determinants of growth for many countries over long periods of time.

Making Monetary Policy Great Again
Ryan Avent (Democracy) Jul 12, 2017
A tour of a history of the Federal Reserve and monetary policy: where it's gone wrong, how it can be improved, and how Donald Trump might make it worse.

Chinese investment: Revenge of the state
Derek Scissors (AEI) Jul 12, 2017
China’s investment around the world grew 9 percent in the first half of 2017, nearing $100 billion. However, much of this was due to a single transaction. Otherwise, investment would have dropped. Investment in most countries and sectors is lower. For example, Chinese investment in the US for January–June fell approximately 50 percent, although it still hit $17 billion. The most important development: The Chinese state is back with a vengeance. Its share of spending reversed years of declines, and Chinese regulators hold the key to the investment trajectory. China’s global construction activity is underappreciated. The much-touted Belt and Road initiative is an investment dud, but construction is considerable. Reform of the Committee on Foreign Investment in the United States is likely next year. It should provide needed resources to protect advanced technology. Other American action should distinguish between Chinese firms that break the law and others that should be welcomed.

Viktor Orban’s Hungary has crossed to Europe’s dark side
Philip Stephens (FT) Jul 13, 2017
The campaign against George Soros digs up the demons of anti-Semitism.

Why prediction of a firm renminbi was a winning bet
Jennifer Hughes (FT) Jul 13, 2017
Beijing keen to keep currency steady ahead of this autumn’s 19th Congress.

Why EM investors should beware indices
Kate Allen (FT) Jul 13, 2017
Bond benchmarks ‘only include 1 in 10 instruments’, Ashmore says.
Pro-Europeans ought to exploit May’s problems to drive change in public opinion.

The G20’s Commitment to Basel III: How will Emerging Markets be Affected? A New CGD Working Group Investigates
Liliana Rojas-Suarez (CGD) Jul 13, 2017
CGD is establishing a high-level Working Group, composed of leading experts on Basel III and economic development, that will identify challenges for emerging markets’ financial stability and development derived from the global implementation of Basel III. Effective and appropriate implementation of Basel III’s recommendations could make a huge contribution to global financial resilience with the attendant benefits for development progress. The G20’s commitment on this issue is welcome.

Germany’s successful G20 presidency
Noe van Hulst (OECD Insights) Jul 13, 2017
How should we assess the German presidency of the G20?

G20 Leaders Sign Off on Hamburg Declaration
Bridges, Volume 21, Number 25 Jul 13, 2017
Leaders from the G20 coalition of advanced and emerging economies concluded their annual summit on Saturday 8 July, which saw them sign off on a final declaration after two days of intense talks and several months of preparations.

EU Policy Review Highlights Trade Negotiating Agenda, WTO Ministerial Prep
Bridges, Volume 21, Number 25 Jul 13, 2017
WTO members conducted a comprehensive review of the EU’s trade policies last week, examining issues such as the implications of Brexit on the bloc’s trading relationships; the EU’s investment court system and wider negotiating agenda; and the global trade body’s upcoming ministerial conference in Argentina this December.

WTO, OECD Chiefs Press for Better Connectivity in Kicking Off “Aid for Trade” Review
Bridges, Volume 21, Number 25 Jul 13, 2017
The biennial "Global Review of Aid for Trade" kicked off on Tuesday 11 July at WTO headquarters, with the heads of multiple international agencies calling for greater efforts to improve digital connectivity, lower trade costs, and improve infrastructure through the Aid for Trade initiative.

EU, Mercosur Negotiators Press On, Eyeing Deal in Near Term
Bridges, Volume 21, Number 25 Jul 13, 2017
Negotiators from the EU and Mercosur continued their efforts to advance towards a region-to-region Association Agreement and related trade deal, holding their twenty-eighth negotiating round in Brussels, Belgium, from 3-7 July.

Brazil: A Fallen Hero and the Start of a New Era?
Frank Vogl (Globalist) Jul 13, 2017
Lula’s sentence is a signal to all of Latin America that justice can prevail. From Mexico to the tip of Argentina, corruption has pervaded politics for decades. Now is the time to fix it for good.

Who's Afraid of a Big Bad Bond Bump? (Not China)
Matthew A Winkler (Bloomberg View) Jul 13, 2017
In May, Moody's saw reasons to worry about Chinese government debt. Investors had other ideas.

Finding Value in Cryptocurrencies
Aaron Brown (Bloomberg View) Jul 13, 2017
What matters to a long-term investor is the share of the global economy this money will represent over the next few decades.

Saying There's a Bubble in ETFs Makes Little Sense
Ben Carlson (Bloomberg View) Jul 13, 2017
The shift to low-cost investment funds represents an enormous wealth transfer to investors in the form of lower fees. This is a huge win for the investor class.

National Wealth Still Depends on Making Some Stuff
Noah Smith (Bloomberg View) Jul 13, 2017
Apps, patents and social media aren't enough to power an economy that provides a good living for all.

The Imperialist People’s Republic of Africa?
Hannah Ryder (Project Syndicate) Jul 13, 2017
To call China a colonial power is to diminish the true horrors that were faced by colonized communities. But that does not mean that African countries can be complacent as Chinese actors continue to deepen their economic engagement with the continent.

Is the Shine Off Macron?
Charles Wyplosz (Project Syndicate) Jul 13, 2017
Within a year, Emmanuel Macron has gone from inexperienced political underdog to President of the French Republic, with an impressive parliamentary majority to boot. But, if he implements the macroeconomic policies that his administration is now planning, his winning streak may soon be over.

Endogenous growth and lack of recovery from the Global Crisis
Maarten de Ridder and Coen Teulings (VoxEU) Jul 13, 2017
Around the world, growth has yet to recover to its pre-Global Crisis trend. This column uses the crisis as a quasi-natural experiment to test the endogenous growth hypothesis, which suggests that output has not recovered because the crisis affected the rate of technological progress. Firms that preferred a bank that was more severely affected by the crisis experienced a large fall in R&D investment and a persistent fall in output in subsequent years. This suggests a direct link between R&D and future productivity, as predicted by endogenous growth models. Around the world, growth has yet to recover to its pre-Global Crisis trend. This column uses the crisis as a quasi-natural experiment to test the endogenous growth hypothesis, which suggests that output has not recovered because the crisis affected the rate of technological progress. Firms that preferred a bank that was more severely affected by the crisis experienced a large fall in R&D investment and a persistent fall in output in subsequent years. This suggests a direct link between R&D and future productivity, as predicted by endogenous growth models.

Completing EMU
Marco Buti, Servaas Deroose, José Leandro and Gabriele Giudice (VoxEU) Jul 13, 2017
Despite much being done to strengthen the Economic and Monetary Union, it remains incomplete and this is one of the main reasons for the Eurozone's lacklustre economic performance in the recent years. While there are still diverging views on how to "cross the river", there is also a political and economic window of opportunity to complete the EMU architecture. This column discusses the ideas presented in a new European Commission Reflection Paper aimed at relaunching the debate on how to move forward, with a focus on bridging the differences between the member states that stress responsibility and risk reduction and those calling for solidarity and risk sharing. Despite much being done to strengthen the Economic and Monetary Union, it remains incomplete and this is one of the main reasons for the Eurozone's lacklustre economic performance in the recent years. While there are still diverging views on how to "cross the river", there is also a political and economic window of opportunity to complete the EMU architecture. This column discusses the ideas presented in a new European Commission Reflection Paper aimed at relaunching the debate on how to move forward, with a focus on bridging the differences between the member states that stress responsibility and risk reduction and those calling for solidarity and risk sharing.

The Refugee Crisis
Daniel Trilling (LRB) Jul 13, 2017
Linguistic and cultural differences, scarce public resources, unequal distribution of wealth: all of these exist within as well as between nation-states. So why limit controls to international borders?

The Part-Time Critics of Central Banks
Mark Spitznagel (Mises Daily) Jul 14, 2017
There seems to be no shortage today of investors and pundits criticizing the market interventions of the world’s central banks.

ASEAN Against the World: Strength in the Numbers
Alicia García-Herrero (Brink) Jul 14, 2017
There are several reasons why ASEAN economies are becoming increasingly appealing for investors, such as positive population trends and relatively large GDP size. But the other aspects that make ASEAN so popular are less well-known—and suggest long-term future success.

The US Treasury’s missed opportunity
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Jul 14, 2017
The US Treasury recently published the first in a series of reports designed to implement the seven core principles for regulating the US financial system announced in an Executive Order from President Trump. While Trump's stated principles provide an attractive basis for making the financial system both more cost-effective and safer, this column argues that, at least when considering the largest banks, adopting the Treasury’s recommendations would make the financial system less safe. And, it would do so with little prospect for boosting economic growth. The US Treasury recently published the first in a series of reports designed to implement the seven core principles for regulating the US financial system announced in an Executive Order from President Trump. While Trump's stated principles provide an attractive basis for making the financial system both more cost-effective and safer, this column argues that, at least when considering the largest banks, adopting the Treasury’s recommendations would make the financial system less safe. And, it would do so with little prospect for boosting economic growth.

How to kill a corporate zombie
Economist Jul 15, 2017
The answer may hold the key to boosting productivity.

Europe has corporate tax reform in its sights
FT View Jul 16, 2017
A ruling in favour of Google underscores the scale of the challenge.

Three steps the EU can take to show global leadership
Wolfgang Munchau (FT) Jul 16, 2017
Current account surpluses and debt crises must end, but defence spending must rise.

Candour from central bankers is overdue
James Grant (FT) Jul 16, 2017
When did you last hear mandarins speak clearly about radical monetary policy?

Predictably, China’s Year-on-Year Growth Maintains Its Steady Pace
Keith Bradsher (NYT) Jul 16, 2017
Beijing released officially reported data that showed the economy expanding in the second quarter at 6.9 percent, virtually unchanged from the first quarter.

What next for US-Europe trade policy?
Nikhil Datta and Swati Dhingra (VoxEU) Jul 16, 2017
The economies of Europe and the United States are inextricably linked and in an ideal world, a number of factors motivate a trade deal such as the Transatlantic Trade and Investment Partnership. This column, taken from a recent VoxEU eBook, argues, however, that given the Brexit referendum in the UK and the election of Donald Trump as US president, as well as a number of other pre-existing complications, achieving such agreements will be highly contentious. The economies of Europe and the United States are inextricably linked and in an ideal world, a number of factors motivate a trade deal such as the Transatlantic Trade and Investment Partnership. This column, taken from a recent VoxEU eBook, argues, however, that given the Brexit referendum in the UK and the election of Donald Trump as US president, as well as a number of other pre-existing complications, achieving such agreements will be highly contentious.

Has Society Reached Peak Globalization? On “Grave New World”
David Talbot (LARB) Jul 16, 2017
“Globalization,” a now-ubiquitous term, is generally understood to mean the integration of economies around the world through cross-border flows of trade, capital, data, and people.

‘The Wisdom of Finance’, by Mihir Desai
Gillian Tett (FT) Jul 17, 2017
Fiction helps bridge the divide between bankers and the rest of us.

Emerging markets shunned by global bond indices
Steve Johnson (FT) Jul 17, 2017
Credit ratings, illiquidity and capital controls conspire against EM issuers.

Discard old ideas of a leader of the free world
Anne-Marie Slaughter (FT) Jul 17, 2017
Never mind Trump or Merkel, global problems demand a collective approach.

Strength of Chinese economy harks back to better times
Jennifer Hughes (FT) Jul 17, 2017
Data show makings of first annual pick-up in growth since 2010.

Lula and Brazil’s Progress
WSJ Jul 17, 2017
The former president’s conviction is a victory for the rule of law.

Germany Should Say Danke for U.S. Oil
Isaac Orr (WSJ) Jul 17, 2017
Angela Merkel’s slaps at Trump don’t help her country’s cause. America’s frackers do.

How cities can create more inclusive economies
Amy Liu (Brookings) Jul 17, 2017
As public and private sector leaders in metro areas set out to build more productive, inclusive economies, they should address the structural barriers, past and future, that prevent many people, places, and businesses from participating fully in the economy.

Extending Trade Promotion Authority
Jeffrey J. Schott (PIIE) Jul 17, 2017
Will the expiration next summer of trade promotion authority (TPA) disrupt President Donald Trump’s trade talks with Canada, Mexico, and others? US exporters and investors and US trading partners are anxious because TPA is needed for the expedited consideration of implementing legislation for new US trade agreements such as the renegotiation of the North American Free Trade Agreement (NAFTA) and possibly talks on updating the Korea-US FTA. But no worries: Current law already provides for a three-year extension of TPA and Congress is highly unlikely to block its implementation.

How Germany’s Current-Account Surplus Will Correct Itself
Daniel Stelter (Globalist) Jul 17, 2017
Germany’s over-dependence on its automotive industry will be its undoing.

This Expansion Will End in a Fizzle, Not a Bang
Timothy A Duy (Bloomberg View) Jul 17, 2017
Concern about a collapse in asset prices will lead the Fed down the path of excessive tightening.

Why Stocks Can Shrug Off Bonds
Lawrence Hatheway (Bloomberg View) Jul 17, 2017
As long as growth and inflation expectations move within acceptable ranges, equities will probably grind higher.

The Politics of Germany’s External Surplus
Clemens Fuest (Project Syndicate) Jul 17, 2017
The global debate about macroeconomic imbalances has become a misdirected critique of Germany’s spending habits and approach to trade. While political calculations may prompt Germany to think differently about its current-account surplus, there is no compelling economic reason to alter the status quo.

Venezuela’s Rebels With a Cause
Anne-Marie Slaughter and Fabiana Perera (Project Syndicate) Jul 17, 2017
The collapse of oil prices, combined with years of economic mismanagement by the government, has left young Venezuelans with high expectations but no real prospects. Tragically, the only solution President Nicolás Maduro's government seems to have is stepped-up repression against those whom it betrayed.

Why Do Cities Become Unaffordable?
Robert J. Shiller (Project Syndicate) Jul 17, 2017
Inequality is usually measured by comparing incomes across households within a country. But there is also a different kind of inequality, in the affordability of homes across cities, and the impact is no less worrying.

The Changing Face of Work in India
Rakesh Mohan and Anu Madgavkar (Project Syndicate) Jul 17, 2017
Concerns about job creation and employment are heating up in India, fueled by data that seem to show the country is entering a period of jobless growth. But there are two reasons to be skeptical: bad data, and an increase in gainful employment.

Slow productivity growth may not be the 'new normal' for the US
Nicholas Crafts and Terence Mills (VoxEU) Jul 17, 2017
Estimates of trend total factor productivity growth in the US have been significantly reduced, contributing to fears that the slowdown is permanent. This column provides an historical perspective on the relationship between estimated trends in total factor productivity growth and subsequent outcomes. It argues that In the past, trend growth estimates have not been a good guide for future medium-term outcomes, and ‘techno-optimists’ should not be put off by time-series econometrics. Estimates of trend total factor productivity growth in the US have been significantly reduced, contributing to fears that the slowdown is permanent. This column provides an historical perspective on the relationship between estimated trends in total factor productivity growth and subsequent outcomes. It argues that In the past, trend growth estimates have not been a good guide for future medium-term outcomes, and ‘techno-optimists’ should not be put off by time-series econometrics.

Combating poverty in developing countries with a universal basic income
Maitreesh Ghatak (VoxDev) Jul 17, 2017
The pros and cons of a universal basic income in reducing poverty and achieving inclusive economic growth in varying country contexts.

House Bill Would Decimate World Bank Funding
Allen-Ebrahimian (FP) Jul 17, 2017
The House is pushing a bill that slashes more than half a billion dollars, or almost half of U.S. funding for the World Bank.

A Path Forward for NAFTA
C. Fred Bergsten and Monica de Bolle (PIIE) Jul 17, 2017
The North American Free Trade Agreement (NAFTA) ranks at the top of anyone’s list of the most controversial trade deals of all time. Reviled by critics as unfair and as a job destroyer, praised by its defenders as having a documented record of success in spurring economic growth, NAFTA reduced tariff barriers to zero for the United States, Mexico, and Canada and led to a tripling of trade among these three countries over the last 23 years.

Silicon Valley’s crypto currency craze is a bubble in the making
Izabella Kaminska (FT) Jul 18, 2017
This is shadow banking moving to the next stage of private money creation.

Stitched up by robots: the threat to emerging economies
Kiran Stacey and Anna Nicolaou (FT) Jul 18, 2017
Advances in automation could derail hopes of creating millions of low-paid jobs in sectors such as textiles.

How to fix China’s financial system
Eswar Prasad (FT) Jul 18, 2017
Allocate capital to the more productive, employment-generating sectors.

An enfeebled America stands alone
Martin Sandbu (FT) Jul 18, 2017
Economic change has affected other countries, but they have managed globalisation.

China’s credit squeeze sends warning on global growth
William Sterling (FT) Jul 18, 2017
Clampdown on excesses signals downward pressure on commodities, US rates and earnings.

When Populism Can Kill
Domna Michailidou and Jonathan Kennedy (Project Syndicate) Jul 18, 2017
By validating unfounded fears about vaccines, Italy's opposition Five Star Movement and Greece's Syriza-led government risk exposing children and other vulnerable members of society to preventable infectious diseases. When the "war on expertise" targets health-care practitioners, it has gone too far.

Transatlantic Troubles and the EU’s Pivot Toward Asia
Ulf Sverdrup and Bjørnar Sverdrup-Thygeson (Brink) Jul 18, 2017
Given the changes to America’s foreign policy vision under the Trump administration, how will Europe’s policies change going forward? The answer can be found in Europe’s long-running debate over the “pivot to Asia.”

China Could Have a Say on Venezuela's Future
Bloomberg View Jul 18, 2017
"Non-interference" is increasingly not an option for Venezuela's biggest creditor.

Change Is Coming at the ECB. Just Not Quickly.
Daniel Moss (Bloomberg View) Jul 18, 2017
Europe will wind down its bond-buying program, but Mario Draghi is not in a hurry.

All Signs Point to a Cyclical Slowdown in Inflation
Lakshman Achuthan and Anirvan Banerji (Bloomberg View) Jul 18, 2017
Even as central bankers get more hawkish, the data show there's a change underway that the Fed is likely to miss.

China's Cashless Revolution
Adam Minter (Bloomberg View) Jul 18, 2017
In the developing world, a new payment model is emerging.

Learning from Malaria
Bjørn Lomborg (Project Syndicate) Jul 18, 2017
It is one of the best untold stories in the annals of development: a disease that was once endemic worldwide, is being beaten back in its remaining redoubts. And it is a story that holds important lessons for how the world should confront other development challenges.

The Quiet Demise of Austerity
James McCormack (Project Syndicate) Jul 18, 2017
Objections to austerity were understandable after the 2008 financial crisis, when growth was languishing below 2% and sizeable negative output gaps suggested that overall employment would be slow to recover. But now the merits of austerity seem to have been forgotten just when it is needed once again.

Is Productivity Growth Becoming Irrelevant?
Adair Turner (Project Syndicate) Jul 18, 2017
Some economists see low business investment, poor skills, outdated infrastructure, or excessive regulation holding back potential growth nowadays. But there may be a deeper explanation: As we get richer, measured productivity may inevitably slow, and measured per capita GDP may tell us ever less about trends in human welfare.

Credit misallocation during the European financial crisis
Fabiano Schivardi, Enrico Sette and Guido Tabellini (VoxEU) Jul 18, 2017
There is a widespread perception that under-capitalised banks can prolong crises by misallocating credit to weaker firms and restraining credit to healthy borrowers. This column explores the extent and consequences of credit misallocation in Italy during and after the Eurozone Crisis. Bank undercapitalisation may have been costly in terms of misallocation of capital and productive efficiency in the medium term due to the higher exit of healthy firms, but it had at best a limited role in aggravating the recession induced by the Eurozone Crisis. There is a widespread perception that under-capitalised banks can prolong crises by misallocating credit to weaker firms and restraining credit to healthy borrowers. This column explores the extent and consequences of credit misallocation in Italy during and after the Eurozone Crisis. Bank undercapitalisation may have been costly in terms of misallocation of capital and productive efficiency in the medium term due to the higher exit of healthy firms, but it had at best a limited role in aggravating the recession induced by the Eurozone Crisis.

Seven charts that show how the developed world is losing its edge
Martin Wolf (FT) Jul 19, 2017
The gap between rich and poor nations narrows as the sources of dynamism in high-income economies slow.

State-owned enterprises, international investment and national security: The way forward
Frédéric Wehrlé and Hans Christiansen (OECD Insights) Jul 19, 2017
For most of the past half century, countries around the world have gradually opened up to foreign investment, and with good effect. Investment from other countries has supported growth and development, created jobs and enhanced welfare.

Fourth Industrial Revolution Tackles the Migration Challenge
Richard Eldridge, Khalid Koser, Mariah Levin and Sanjiv Rai (Brink) Jul 19, 2017
The fourth industrial revolution is unfolding at a time when human mobility is increasing and, in many instances, becoming more precarious. How will migration policies and practices change in the coming decade as a result of fourth industrial revolution innovations?

Why deficits might be with us forever
Robert J. Samuelson (WP) Jul 19, 2017
There’s a giant mismatch between what Americans want from government and what they’ll pay for with taxes.

Trump’s Renegotiation Could Take the “Free” Out of NAFTA’s Trade
Chad P. Bown (PIIE) Jul 19, 2017
The Trump administration’s newly announced objectives for the renegotiation of the North American Free Trade Agreement (NAFTA) are ambiguous in some respects. But one element is clear and worrisome: The administration wants to make it easier for the United States to restrict imports from Canada and Mexico.

India's New Tax Is a Work in Progress
Bloomberg View Jul 19, 2017
The introduction of the GST went smoothly, but the job isn't finished.

Nafta Gets a Reprieve
Bloomberg View Jul 19, 2017
And that's a good thing.

The ECB Should Be Firmer With Troubled Banks
Bloomberg View Jul 19, 2017
Delaying the inevitable will only cost more.

Get Used to Bond Market Tantrums
Ben Emons (Bloomberg View) Jul 19, 2017
For the first time in a long while, investors need to understand how a reversal in monetary polices will affect most all markets.

How Trump Could Puncture the Equity Bubble
Komal S Sri-Kumar (Bloomberg View) Jul 19, 2017
A delay in stimulus measures and the rise in global trade tensions could deflate valuations.

The U.S. Has a 'Leprechaun Economy' Effect, Too
Leonid Bershidsky (Bloomberg View) Jul 19, 2017
The accounting quirk that caused Ireland's GDP to jump 26 percent last year has implications for Trump's trade policy.

India's Banking Vigor Stokes Its Economic Boom
Matthew A Winkler (Bloomberg View) Jul 19, 2017
India is growing faster than China (or any other G-20 country). Its financial sector is a key reason.

China's Buying Spree Ends Badly
Christopher Balding (Bloomberg View) Jul 19, 2017
Access to foreign investment shouldn't be political.

Chinese Steel Output Hits All-Time High
Bethany Allen-Ebrahimian (FP) Jul 19, 2017
Trump thinks Chinese steel is bad for America. Unfortunately for him, now there’s a whole lot more of it.

Capitalizing on Africa’s Youth Dividend
Kim Kerr (Project Syndicate) Jul 19, 2017
For Africa, the question is no longer “if” students are taught, but “what.” Unfortunately, while access to education has improved significantly in recent decades, school curricula have changed little since the colonial era, when secondary education was an elite privilege designed to advance the careers of a select few.

Trump’s Surprisingly Strong Start with India
Thomas R. Pickering and Atman Trivedi (Project Syndicate) Jul 19, 2017
Heading into the recent meeting between Indian Prime Minister Narendra Modi and US President Donald Trump, expectations were modest. Yet the leaders of the world’s two most populous democracies ended up making important headway on strengthening the bilateral relationship.

Britain’s European Ties That Bind
Ana Palacio (Project Syndicate) Jul 19, 2017
Despite the impression given by early accounts of the Brexit negotiations, the interests of the UK and the EU are closely aligned in vital areas, particularly security and foreign policy. Finding a way forward on these topics might be the key to creating the cooperative frameworks needed to address more contentious issues.

A “Macroneconomic” Revolution?
Anatole Kaletsky (Project Syndicate) Jul 19, 2017
Since the global financial crisis began a decade ago, there has been no shortage of useful ideas for ameliorating economic conditions and alleviating public resentment. The real question is why so few of them have been implemented.

Growth and volatility before and after the Global Crisis
Joshua Aizenman, Yothin Jinjarak, Gemma Estrada and Shu Tian (VoxEU) Jul 19, 2017
The impact of the Global Crisis of 2008 played out differently in middle-income countries compared to developed countries. This column argues that the associations of growth level, growth volatility, shocks, institutions, and macroeconomic fundamentals have changed in important ways after the crisis. Educational attainment, share of manufacturing output in GDP, and exchange rate stability appear to increase the level of economic growth. Exchange rate flexibility, education attainment, and lack of political polarisation reduce the volatility of economic growth. The impact of the Global Crisis of 2008 played out differently in middle-income countries compared to developed countries. This column argues that the associations of growth level, growth volatility, shocks, institutions, and macroeconomic fundamentals have changed in important ways after the crisis. Educational attainment, share of manufacturing output in GDP, and exchange rate stability appear to increase the level of economic growth. Exchange rate flexibility, education attainment, and lack of political polarisation reduce the volatility of economic growth.

Capitalism Did Not Win the Cold War
Sami J. Karam (FA) Jul 19, 2017
Why cronyism was the real victor.

6 steps to start changing how Africa does development
Souleymane Coulibaly (Brookings) Jul 19, 2017
How a regional approach to development can help African countries combat fragmentation and overcome the heavy artificial barriers at their borders.

Africa’s hidden government debt burden
Steve Johnson (FT) Jul 20, 2017
Large informal sectors may make repayment harder than it seems.

Three key questions for investors about China
Dan McCrum and Jennifer Hughes (FT) Jul 20, 2017
Growth targets, credit crackdown and market liberalisation are issues for investors

A train that proclaims China’s global ambition
Philip Stephens (FT) Jul 20, 2017
As Beijing pushes westwards, the Atlantic century makes way for a new Eurasian age.

Trump’s Nafta Stakes
WSJ Jul 20, 2017
How to renegotiate the treaty without blowing up the economy.

NAFTA Preparations Ramp Up as US Trade Rep Releases Negotiating Objectives
Bridges, Volume 21, Number 26 Jul 20, 2017
The Office of the US Trade Representative (USTR) released a summary of its planned negotiating objectives for the upcoming renegotiation of the North American Free Trade Agreement (NAFTA) on Monday 17 July, outlining a series of areas where it would like to see changes to existing provisions or the enactment of new terms.

TPP-11 Negotiators Examine Options for Advancing Deal Without US
Bridges, Volume 21, Number 26 Jul 20, 2017
The chief negotiators from the 11 remaining Trans-Pacific Partnership (TPP) nations debated options last week for advancing the trade pact without the US' participation, meeting in Hakone, Japan.

Indian Trade Minister Says Multilateralism at Crossroads, Outlines “Multi-Pronged” Approach
Bridges, Volume 21, Number 26 Jul 20, 2017
Indian Commerce and Industry Minister Nirmala Sitharaman called for taking a “multi-pronged approach” towards supporting multilateralism in the trade world, suggesting that “multilateralism as embodied at the WTO is at a crossroads” during a speech to a Geneva audience on Tuesday 18 July.

Flaws in Trump’s Agenda for NAFTA
Jeffrey J. Schott (PIIE) Jul 20, 2017
The Trump administration’s objectives in renegotiating the North American Free Trade Agreement (NAFTA) contain no big surprises. Talks will begin in mid-August 2017. But NAFTA negotiators will have a tough time reaching agreement because of the long list of US demands for concessions by Canada and Mexico and likely US resistance to their demands for reciprocal steps benefitting them.

Yes, Financial Crises Do Bring Hangovers
Justin Fox (Bloomberg View) Jul 20, 2017
Can we blame our current struggles on the 2008 collapse and its subsequent fallout? We'd be wrong to discount it.

Why the ECB Decided to Stand Pat on Stimulus
Mohamed Aly El-Erian (Bloomberg View) Jul 20, 2017
A mere hint of paring back in recent remarks by Mario Draghi ignited a mini taper tantrum.

Here's the True Definition of a Recession — It's Not About GDP
Frank Shostak (Mises Daily) Jul 20, 2017
Both the NBER and the popular definition do not provide an explanation of what a recession is all about. Instead they describe the various manifestations of a recession.

Fostering Arab Entrepreneurship
Philippe Le Houérou (Project Syndicate) Jul 20, 2017
Innovative startups can be a boon to the Middle East and North Africa, bringing jobs and private-sector development to struggling economies. But regulatory environments that favor big firms and the state sector are stifling startup ecosystems, curbing the potential of the region’s most promising growth engine.

Capital accumulation, private property, and inequality in China, 1978-2015
Thomas Piketty, Li Yang and Gabriel Zucman (VoxEU) Jul 20, 2017
Between 1978 and 2015, China moved being from a poor, underdeveloped country to the world’s leading emerging economy. But relatively little is known about how the distribution of income and wealth within the country changed over this period. This column presents the first systematic estimates of the level and structure of China’s national wealth since the beginning of the market reform process. The national wealth-income ratio increased from 350% in 1978 to 700% in 2015, driven mainly by the increase of private wealth. Between 1978 and 2015, China moved being from a poor, underdeveloped country to the world’s leading emerging economy. But relatively little is known about how the distribution of income and wealth within the country changed over this period. This column presents the first systematic estimates of the level and structure of China’s national wealth since the beginning of the market reform process. The national wealth-income ratio increased from 350% in 1978 to 700% in 2015, driven mainly by the increase of private wealth.

Should the U.S. Play Hardball with China on Trade?
Tom Hoffecker, Duncan Innes-Ker, David Dollar & Andrew Coflan (ChinaFile) Jul 20, 2017
United States President Donald Trump’s suggestion that he is considering leveraging tariffs on Chinese steel imports has left diplomatic experts uneasy amid an already divided U.S. diplomatic house in Beijing, and was met with criticism by trade experts. What kind of knock-on effects might this have on the widening gap between Chinese-bound U.S. investment and U.S.-bound Chinese investment?

Recapturing U.S. Economic Growth
Robert J. Gordon and Joel Mokyr (K@W) Jul 20, 2017
Are the best days long gone?

Don't Tinker With Nafta. Fix It.
Jerry Dias and Dennis Williams (NYT) Jul 21, 2017
President Trump has an opportunity to help autoworkers. He should not squander it.

Reformers Not Welcome at Ex-Im Bank
WSJ Jul 21, 2017
Crony capitalists fear Scott Garrett might limit taxpayer credit.

Maximising China’s growth potential
Yang Yao and Mengqi Wang (EAF) Jul 21, 2017
China's unprecedented growth over the last 30 years, particularly in the years before the global financial crisis, was concentrated in eastern (coastal) provinces.

Japan's Struggles Aren't So Unique
Daniel Moss (Bloomberg View) Jul 20, 2017
All across the developed world, sluggish inflation is confounding central bankers.

China's Overextended Consumers Can't Stop Adding Debt
Junheng Li (Bloomberg View) Jul 21, 2017
Officials have managed to steer the economy into a soft landing, but the question is: at what cost?

The Upside and Downside of Liquidity-Driven Markets
Mohamed Aly El-Erian (Bloomberg View) Jul 21, 2017
Hopes for a rapid economic policy breakthrough powered by the implementation of tax reform and infrastructure programs have been dashed.

The Flip Side of Euro-Atlantic Integration
Javier Solana (Project Syndicate) Jul 21, 2017
In recent decades, the EU has been powered by two fundamental forces: integration and expansion. But, with Britain's vote to leave the Union and illiberalism on the rise in countries like Poland and Hungary, those forces are now in doubt.

How to Reduce Germany’s Surplus
Hans-Werner Sinn (Project Syndicate) Jul 21, 2017
It stands to reason that Germany cannot simultaneously reduce its current-account surplus and continue to extend loans to other countries that have run deficits, and failed to maintain fiscal discipline. If all parties involved could reach this basic understanding, that alone would be a major step in the right direction.

Chinese investment in Africa
Margaret McMillan (VoxDev) Jul 21, 2017
Chinese investment in Africa, while less extensive than often assumed, has the potential to generate jobs and development on the continent.

How to reform a government investment agency: Insights from Ethiopia
John Sutton (VoxDev) Jul 21, 2017
On setting up effective investment agencies.

Is a growing global middle class good for the poor?
Raj M. Desai and Homi Kharas (Brookings) Jul 21, 2017
Whether or not an expanding middle class benefits society’s poorest.

Britain faces up to Brexit
Economist Jul 22, 2017
As long as the government stays in denial about Brexit’s drawbacks, the country is on course for disaster.

Refugees have little effect on native worker wages
Michael Clemens and Jennifer Hunt (VoxEU) Jul 22, 2017
Sudden inflows of refugees have been shown to have little or no impact on native wages, but recent research has challenged this consensus, using instrumental variables to show uniformly large detrimental effects. This column argues that these new results were due to problems with the strategy used and, in the case of the Mariel boatlift, the composition of the sample. Correcting for these flaws, the impact of immigration on average native-born workers remains small and inconsistent, with no evidence to show a large detrimental impact on less-educated workers. Sudden inflows of refugees have been shown to have little or no impact on native wages, but recent research has challenged this consensus, using instrumental variables to show uniformly large detrimental effects. This column argues that these new results were due to problems with the strategy used and, in the case of the Mariel boatlift, the composition of the sample. Correcting for these flaws, the impact of immigration on average native-born workers remains small and inconsistent, with no evidence to show a large detrimental impact on less-educated workers.

An exit from Brexit would prove a messy affair
Wolfgang Munchau (FT) Jul 23, 2017
Any request to revoke Article 50 requires European Council consent.

Shifts in responsibility show how power resides in cities
Bruce Katz (FT) Jul 23, 2017
Localism addresses head on many of the grievances exploited by populism.

In China, Herd of ‘Gray Rhinos’ Threatens Economy
Keith Bradsher and Sui-Lee Wee (NYT) Jul 23, 2017
Several Chinese conglomerates are now so big, so complex and so indebted that the government is trying to bring them to heel.

China’s macroeconomic balancing act
Yiping Huang (EAF) Jul 23, 2017
In the past couple of years a range of financial market risks have emerged: in equity and bond markets, the explosion of shadow banking, in property markets, in digital finance and in foreign exchange markets.

Agglomeration benefits versus firm selection
Keisuke Kondo (VoxEU) Jul 23, 2017
The large literature on agglomeration economies attests to the higher average productivity of firms in larger cities. However, this literature focuses on positive externalities, and a second potential mechanism – selection against less productive firms – has received little empirical attention. This column explores how these two mechanisms contribute to higher productivity in Japanese cities. Consistent with earlier work considering the case of France, no evidence for a selection effect is found. The large literature on agglomeration economies attests to the higher average productivity of firms in larger cities. However, this literature focuses on positive externalities, and a second potential mechanism – selection against less productive firms – has received little empirical attention. This column explores how these two mechanisms contribute to higher productivity in Japanese cities. Consistent with earlier work considering the case of France, no evidence for a selection effect is found.

Bond bubble brews as central banks retreat from QE
Attracta Mooney (FT) Jul 24, 2017
Fixed-income investors are acutely worried about the effect of less monetary easing.

The world economy flies on multiple engines
FT View Jul 24, 2017
Policy mistakes in trade are the biggest threat to global growth.

Why China invests more in Europe than in the US
Yukon Huang (FT) Jul 24, 2017
Political sensitivities, security concerns and industrial structure direct the flow.

Europe’s Next Crisis: The Balkans
Walter Russell Mead (WSJ) Jul 24, 2017
Russia and Turkey stir up trouble, while the EU focuses on its own problems first.

Greece Looks to Turn a Corner After Years of Economic Pain
Liz Alderman (NYT) Jul 24, 2017
The announcement that Athens would issue new bonds offered hope that one of Europe's weakest economies might at last be weaning itself off international bailouts.

For China’s Global Ambitions, ‘Iran Is at the Center of Everything’
Thomas Erdbrink (NYT) Jul 24, 2017
Iran’s strategic location makes it a focus, and Chinese investments and entrepreneurs are pouring into the country.

Scenarios for Concluding the NAFTA Talks
Gary Clyde Hufbauer and Euijin Jung (PIIE) Jul 24, 2017
Canada and Mexico want to conclude the renegotiation of the North American Free Trade Agreement (NAFTA) by December 2017, but their hopes are likely to be frustrated. A main reason is that the US negotiating objectives, announced by the US Trade Representative (USTR) on July 17, are bound to resolve it.

Why China Isn’t Ready Yet to Lead Globalization
Caroline Freund (PIIE) Jul 24, 2017
As the United States under President Donald Trump retreats from its leadership role on global integration, China is well placed to take the position. It is the world’s largest exporter and by some measures also the world’s largest economy. It is time for China to play a bigger role in setting international rules.

The Coming Financial Volatility
Gene Frieda (Project Syndicate) Jul 24, 2017
Bond investors are from Mars, and central bankers are from Venus – or so suggests the bond market’s negative reaction to signals that the exceptional monetary-policy accommodation of the last decade is winding down. Are risky asset markets right to ignore the red flags that the bond markets are waving?

Market Parables and the Economics of Populism
Jonathan Schlefer (FA) Jul 24, 2017
When experts are wrong, people revolt.

Will Rising Interest Rates Lead to Fiscal Crises?
Olivier Blanchard and Jeromin Zettelmeyer (PIIE) Jul 24, 2017
A balanced, broad-based economic recovery seems under way in all major regions of the world. Managing the recovery poses challenges in the short run but they appear relatively benign. Looking forward, however, the authors see a set of new risks: (1) Partly because of the crisis and partly because...

Boom, Slump, Sudden Stops, Recovery, and Policy Options: Portugal and the Euro
Olivier Blanchard and Pedro Portugal (PIIE) Jul 24, 2017
Over the past 20 years, Portugal has gone through a boom, slump, sudden stop, and now a timid recovery. Unemployment has decreased but remains high, and output is still far below potential. Private and public debts are high, and productivity growth remains low.

There is a case for world trade - if only business would make it
Sunil Bharti Mittal (FT) Jul 25, 2017
Trade policy used to be a technocratic affair of little public interest. Not any more.

Greece stages a welcome return to capital markets
FT View Jul 25, 2017
A sale of sovereign bonds is a tentative step, but worth celebrating.

China’s local government financing firms face a slow death
James Kynge (FT) Jul 25, 2017
Companies that drive Chinese infrastructure spending head for shakeout.

Japan is starting to question its working habits
Henny Sender (FT) Jul 25, 2017
Policymakers are worrying not just about overwork, but about productivity too.

Banking union will transform Europe’s politics
Martin Sandbu (FT) Jul 25, 2017
Bail-in rules introduced five years ago have far-reaching consequences for the bloc.

Acting on climate change is Africa’s opportunity
Ngozi Okonjo-Iweala (FT) Jul 25, 2017
Continent is well placed to reap benefits in investment and jobs.

Brexit and the Disunited Kingdom
William A. Galston (WSJ) Jul 25, 2017
‘I’ve never seen British politics as chaotic as it is now,’ says an expert.

To Punish Putin, Economic Sanctions Are Unlikely to Do the Trick
Eduardo Porter (NYT) Jul 25, 2017
Using economic penalties to achieve diplomatic goals has a poor track record when the target is powerful and autocratic, and workarounds exist.

Maybe We've Been Thinking About the Productivity Slump All Wrong
Neil Irwin (NYT) Jul 25, 2017
What if the weak productivity growth of the last several years is not the cause of low growth, but rather the result of it?

Low interest and high debt – it must end badly
Brian Caplen (Banker) Jul 25, 2017
Western households have binged on low-interest debt. Banks need to be ready for when it all goes south, writes Brian Caplen.

Europe’s Long-Term Economic Outlook: Better Now, Challenges Ahead
Andrew Bosomworth (PIMCO) Jul 25, 2017
We see bullish and bearish risks to Europe’s outlook as roughly balanced in the near term, but increasing and tilting to the downside toward the end of our secular horizon.

China Lays the Groundwork for Domestic Merger Boom
David Millhouse (Bloomberg View) Jul 25, 2017
A new round of takeovers has the potential to spur the economy and the stock market.

Don't Let the Dollar Fool You, Fed
Narayana Kocherlakota (Bloomberg View) Jul 25, 2017
Its effect on inflation could lure the central bank into removing stimulus too soon.

Britain's Imperial Follies
Mihir Sharma (Bloomberg View) Jul 25, 2017
Misunderstanding the past is a good way to stunt one's future.

The U.K. Should Be Wary of a Trump Trade Deal
Leonid Bershidsky (Bloomberg View) Jul 25, 2017
Chlorinated chicken might be all that Britons would get out of it.

Deciphering China’s Economic Resilience
Stephen S. Roach (Project Syndicate) Jul 25, 2017
International economic forecasters find it difficult to resist superimposing the experience of crisis-prone developed economies onto China. But, once again, the Chinese economy has defied the pessimists: after decelerating for six consecutive years, real GDP growth appears to be inching up in 2017.

A Cross-Party Way Forward on Brexit
Richard S. Grossman (Project Syndicate) Jul 25, 2017
With Brexit looming, the UK needs an experienced leader who can dispense with tribal politics and bring together sensible Tories, Labourites, and Liberal Democrats to map out the country's future. As a respected former chancellor of the exchequer, Father of the House Kenneth Clarke is the man for the job.

The economic causes of childlessness
Thomas Baudin, David de la Croix and Paula E. Gobbi (VoxEU) Jul 25, 2017
The fertility of women in developing countries is higher on average than in developed countries, yet many women in developing countries remain childless. This column argues that understanding the causes of why some women choose childlessness is important if we wish to predict the impact that development policies have on the demographic transition of poor countries. The fertility of women in developing countries is higher on average than in developed countries, yet many women in developing countries remain childless. This column argues that understanding the causes of why some women choose childlessness is important if we wish to predict the impact that development policies have on the demographic transition of poor countries.

Is a China-Centric World Inevitable?
Shyam Saran (YaleGlobal) Jul 25, 2017
Nations must determine when to confront Chinese aggression; for India, Bhutan is a priority

The Real Power of the G-20
Amrita Narlikar (FA) Jul 25, 2017
Why the summit in Hamburg stood out.

A phoney war over Brexit and the British economy
FT View Jul 26, 2017
The impact of the departure from the EU will only be known in the medium term.

North Africa aims to emulate Asia’s flying geese
Riccardo Fabiani (FT) Jul 26, 2017
Region well placed to benefit from rising wages elsewhere but has hurcled to clear.

Trump’s Victory: What’s Next for Currencies?
Joachim Fels (PIMCO) Jul 26, 2017
While the U.S. administration and the Republican majority in Congress are yet to deliver on most of their policy goals, they have succeeded in making the dollar more competitive.

China and Emerging Asia: A New Dawn for the Capital Markets
Luke Spajic (PIMCO) Jul 26, 2017
Investors are more attuned to China than ever, but they may be losing sight of the big picture: China and the entire Asia region are gradually being integrated into the global capital markets. Over the next 12–24 months, we expect that Asia, led by China, will become a far more significant part of the global capital markets and global investment portfolios. In the low-return environment, Asian markets are entering the global sphere at an opportune time, and we think investors may want to define, or refine, their long-term strategy in the region.

Italian economic growth and the Euro
Francesco Papadia (Bruegel) Jul 26, 2017
While the Euro has frequently been blamed for the poor growth performance of Italy over the years, a long-term analysis shows deteriorating growth before the introduction of the Euro. Additionally, Italy has shown worse performance than other euro-periphery countries, such as Spain, implying deeper structural reasons for Italy’s economic malaise.

Trump's NAFTA Agenda: The Good, the Bad, and the Indeterminate
C. Fred Bergsten (PIIE) Jul 26, 2017
The Trump administration’s “Summary of Objectives for the NAFTA Renegotiation,” circulated by the United States Trade Representative (USTR) July 17, paves the way for negotiations on the North American Free Trade Agreement (NAFTA) to begin next month.

NAFTA Mischief in Fruits and Vegetables
Gary Clyde Hufbauer and Euijin Jung (PIIE) Jul 26, 2017
A little noticed bullet point in the Trump administration’s " Summary of Objectives for the NAFTA Renegotiation " might sound harmless enough to some. It proposes to expedite the process by which American growers could halt an influx of imports of Mexican produce like tomatoes, avocados, bell peppers, cucumbers, and watermelons. But like some other objectives outlined by the United States Trade Representative (USTR) this summer, this provision would create serious mischief and harm not only US consumers but also other US growers.

Greece Still Hasn't Turned the Corner
Bloomberg View Jul 26, 2017
The country sold some bonds this week, but let’s not get carried away.

China Did Stimulus the Wrong Way
Noah Smith (Bloomberg View) Jul 26, 2017
Instead of boosting government spending, the country embraced a risky expansion of its shadow banking system.

No Exit Strategy for Japan
Daniel Moss (Bloomberg View) Jul 26, 2017
The central bank doesn't want to talk about why it's lagging its peers.

Central Banks Are Too Invested to Pull Back Now
Mark Grant (Bloomberg View) Jul 26, 2017
The Fed’s calls to return to monetary policy normalcy are nothing but blather.

In a Robot Economy, All Humans Will Be Marketers
Tyler Cowen (Bloomberg View) Jul 26, 2017
Here's one way the technological revolution isn't very inspiring.

Fed Reinforces Its Path Toward a 'Beautiful Normalization'
Mohamed Aly El-Erian (Bloomberg View) Jul 26, 2017
The central bank is on a course that delivers low volatility and contains disruptions to the markets.

China’s Weaponization of Trade
Brahma Chellaney (Project Syndicate) Jul 26, 2017
China denies mixing business with politics, yet it has long used trade to punish countries that refuse to toe its line. But its leaders deploy their economic weapons carefully, to avoid disruption that could harm China’s own business interests.

How the Calabrian Mafia Discovered Hong Kong
Antonio Talia (Diplomat) Jul 26, 2017
Italian mafia families have begun using Hong Kong as a base for financial crimes.

Globalisation and political structure: Lessons for the EU
Gino Gancia, Giacomo Ponzetto and Jaume Ventura (VoxEU) Jul 26, 2017
The number of countries in the world more than halved during the first wave of globalisation, but then rose significantly during the second. Border changes have been much more peaceful during this second wave, and this column asserts that these observations are consistent with a theory in which political structure adapts to expanding trade opportunities. Globalisation makes borders costly. In its early stages, borders are removed by increasing country size, while in later stages, the cost of borders is removed by creating peaceful economic unions, leading to a reduction in country size. The number of countries in the world more than halved during the first wave of globalisation, but then rose significantly during the second. Border changes have been much more peaceful during this second wave, and this column asserts that these observations are consistent with a theory in which political structure adapts to expanding trade opportunities. Globalisation makes borders costly. In its early stages, borders are removed by increasing country size, while in later stages, the cost of borders is removed by creating peaceful economic unions, leading to a reduction in country size.

Shadow Banking: China's Dual-Track Interest Rate Liberalization
Hao Wang, Honglin Wang, Lisheng Wang and Hao Zhou (VoxChina) Jul 26, 2017
China's interest rate policy is exercised through banks that dominate the country's financial system and characterized by binding price controls over deposit rates and quantity controls over loan volumes. Shadow banking has experienced explosive growth in China in the last decade. It essentially constitutes a dual-track reform mechanism to liberalize the country's rigid interest rate policy.

The Great Chinese Inequality Turnaround
Ravi Kanbur, Yue Wang and Xiaobo Zhang (VoxChina) Jul 26, 2017
Since the reform era began in 1978, analysts and policymakers have taken an intense interest in Chinese income inequality, just as they have with the country’s spectacular economic growth and its extraordinary poverty reduction efforts—perhaps the most dramatic in human history. Sharply increasing inequality became an integral part of the Chinese development narrative, with some commentators arguing that this was the inevitable cost of high growth rates, while others warned of the social consequences of the widening gaps.

The quitting economy
Ilana Gershon (Aeon) Jul 26, 2017
When employees are treated as short-term assets, they reinvent themselves as marketable goods, always ready to quit

A Brexit transition is only half an answer
Philip Stephens (FT) Jul 27, 2017
The mantra that the UK wants a ‘deep and special’ relationship with the EU is empty.

Looking Past Libor: What’s Next for Investors?
Rick Chan and Jerome M. Schneider (PIMCO) Jul 27, 2017
Uncertainty about the unwinding of Libor could increase spread volatility and create opportunities in products indexed to short-term rates as the market evolves.

North Korea Economy Shows Surprising Strength
Gordon G. Chang (WA) Sep 27, 2017
North Korea’s economy has reached a level of stability that wouldn’t be possible without substantial intervention from Beijing. New US sanctions should proceed with haste.

European Periphery: Unsafe at Any Speed?
Gene Frieda (PIMCO) Jul 27, 2017
Five years ago, Mario Draghi’s landmark speech turned the tide of the euro crisis. How much progress has been made?

WTO Members Prepare for Autumn Negotiations, Endorse Update to Trade Policy Review
Bridges, Volume 21, Number 27 Jul 27, 2017
WTO members adopted changes to their “Trade Policy Review Mechanism” on Wednesday 26 July, during a General Council meeting that also addressed preparations for the WTO’s ministerial conference this December, given the organisation’s upcoming August break.

UK Trade Minister Outlines Post-Brexit Approach to WTO, US Economic Ties
Bridges, Volume 21, Number 27 Jul 27, 2017
The United Kingdom views “the future of global trade” as revolving particularly around digital economy, services, and development, according to Liam Fox, the country’s Secretary of State for International Trade.

Agenda 2030: High-Level Forum Reviews Progress on Poverty Eradication Goal
Bridges, Volume 21, Number 27 Jul 27, 2017
Ministers and top officials from UN member states signed off on a declaration last week aimed at advancing the implementation of the 2030 Agenda for Sustainable Development, with a particular focus on the theme of “eradicating poverty and promoting prosperity in a changing world.”

The U.K. Is Right to Retire Libor
Bloomberg View Jul 27, 2017
Markets need a better benchmark.

In Asia, the Fed Still Rules
Daniel Moss (Bloomberg View) Jul 27, 2017
Local investors and analysts still obsess over America's monetary policy, not China's.

Nafta Can Be Reworked Without Hurting Earnings
Komal S Sri-Kumar (Bloomberg View) Jul 27, 2017
A greater opening of Mexico to foreign investors would be positive for financial markets on both sides of the border.

Kaczynski’s Threat to Europe
Jacek Rostowski (Project Syndicate) Jul 27, 2017
As in the case of Brexit, Poland’s domestic political turmoil reveals how intertwined the EU’s member states have become. If democracy and the rule of law are overthrown in one, serious repercussions for all the others cannot be avoided.

Democratic Resilience for a Populist Age
Helmut K. Anheier (Project Syndicate) Jul 27, 2017
Those who oppose open, liberal societies have garnered a disconcerting level of influence in recent years. At the same time, current debates about the state of democracy have focused too much on problems, and not enough on how to protect democratic institutions from illiberal threats.

China’s New Digital Dividend
Andrew Sheng and Xiao Geng (Project Syndicate) Jul 27, 2017
Despite current concerns about China's corporate-debt crisis, rapid digitization is transforming the Chinese economy, and elevating its place in the global value chain. But China's ongoing transition is as risky as it is exciting, because no economy so large has undergone such rapid, far-reaching change.

Can the United States and a Rising China Avoid Thucydides’s Trap?
Börje Ljunggren (YaleGlobal) Jul 27, 2017
War between established and rising powers like the US and China is not inevitable, but predictability is crucial

Survey Says: Hungarians Aren’t Feeling Great About Their Economic Future
Emily Tamkin (FP) Jul 27, 2017
Hungarians aren’t feeling great about their economic future.

What to Expect from Canada's Central Bank
Kevin Carmichael (CIGI) Jul 27, 2017
Having come of age when inflation was the demon to tame, central bankers are rethinking how fast economies can grow.

Spain’s Long Economic Nightmare Is Finally Over
Peter S. Goodman (NYT) Jul 28, 2017
After nearly a decade of economic crisis, Spain is finally growing again, underscoring hopes that the eurozone has reached a healthier place.

Wider U.S. Sanctions on Venezuela Risk Biting Both Countries
Clifford Krauss (NYT) Jul 28, 2017
President Trump has promised tougher measures against the oil-exporting country if it goes through with elections on Sunday. But that could raise gas prices in America.

Could China Be Turning a Corner?
Andrew Polk (Bloomberg View) Jul 28, 2017
Quietly, the structure of existing credit has improved.

Why India Shouldn't Cut Rates
Mihir Sharma (Bloomberg View) Jul 28, 2017
Loosening policy now would let indebted, badly run companies off the hook.

Cities' Success Leaves Them Vulnerable in the Next Downturn
Conor Sen (Bloomberg View) Jul 28, 2017
Urban centers, with their concentration of white-collar jobs, are not as diversified and resilient as they used to be.

The Sweet Smell of Post-Soviet Dictatorship
Leonid Bershidsky (Bloomberg View) Jul 28, 2017
One dictator, two lines of perfume and a story of Central Asian cronyism.

Stronger Growth Can't Save Dollar as Policy Risks Rise
Jason M Schenker (Bloomberg View) Jul 28, 2017
The IMF seems to be warning us that U.S. fiscal policy disappointment is coming.

Tech Improvements So Dramatic, They're Depressing
Nathaniel Bullard (Bloomberg View) Jul 28, 2017
If you're an energy company freaked out about increasingly efficient information technology, that is.

Trump’s Growth Charade
Simon Johnson (Project Syndicate) Jul 28, 2017
Officials in President Donald Trump’s administration frequently talk about getting annual US economic growth back above 3%, and their proposed budget assumes that they will succeed. But the assumption is deeply misleading – and potentially dangerous.

Germany’s New Power of the Purse
Mark Leonard (Project Syndicate) Jul 28, 2017
In recent years, Germany has emerged as a new kind of great power, not just in Europe, but on the world stage. By leveraging its economic power, using EU institutions and budgets as a force multiplier, and building international coalitions, it has significantly expanded its international influence.

Europe’s Rocky Recovery
Philippe Legrain (Project Syndicate) Jul 28, 2017
While the US and the UK have been mired in political chaos this year, the EU has enjoyed improved economic conditions and some political windfalls. The question now is whether this good news will inspire long-needed EU and eurozone reforms, or merely fuel complacency – and thus set the stage for another crisis down the road.

The role of foreign slack in domestic inflation in the Eurozone
Christiane Nickel (VoxEU) Jul 28, 2017
The past decade has seen a growing role for global slack in Phillips curve approaches, as opposed to the traditional focus on domestic slack. This column explores whether augmenting Phillips curves by measures of foreign slack can help to better explain past developments in underlying inflation. A majority of specifications, both with and without foreign slack, are found to yield very similar results. Even for periods when domestic slack differed substantially from foreign slack, like between 2012 and 2016, the effects seem to be rather small. The past decade has seen a growing role for global slack in Phillips curve approaches, as opposed to the traditional focus on domestic slack. This column explores whether augmenting Phillips curves by measures of foreign slack can help to better explain past developments in underlying inflation. A majority of specifications, both with and without foreign slack, are found to yield very similar results. Even for periods when domestic slack differed substantially from foreign slack, like between 2012 and 2016, the effects seem to be rather small.

How to deal with Venezuela
Economist Jul 29, 2017
Sanctions should target officials, not the country.

Excess saving and low interest rates: Theory and evidence
Peter Bofinger and Mathias Ries (VoxEU) Jul 29, 2017
There is a broad consensus that the global decline in real interest rates can be explained with a higher propensity to save, above all due to demographic reasons. This column argues that this view relies on a commodity theory of finance, which is inadequate for analysis of real world phenomena. In a monetary theory of finance, household saving does not release funds for investment, it simply redistributes existing funds. In addition, the column shows that at the global level, the gross household saving rate has declined since the 1980s, as well as net saving rates. There is a broad consensus that the global decline in real interest rates can be explained with a higher propensity to save, above all due to demographic reasons. This column argues that this view relies on a commodity theory of finance, which is inadequate for analysis of real world phenomena. In a monetary theory of finance, household saving does not release funds for investment, it simply redistributes existing funds. In addition, the column shows that at the global level, the gross household saving rate has declined since the 1980s, as well as net saving rates.

Janet Yellen is caught between Trump and a hard place
Robert J. Samuelson (WP) Jul 30, 2017
How the Fed manages to gradually shrink its bond holdings will shape the economy — and her legacy.

Renegotiating NAFTA: The role of global supply chains
Emily Blanchard (VoxEU) Jul 30, 2017
The Trump administration has been outspoken in its criticism of NAFTA, which the president has called “the worst deal ever made”. This column, taken from a recent Vox eBook, argues that reversing the current NAFTA policy environment would not simply wind back the clock to the pre-agreement economy from 20-plus years ago. Instead, it would throw spanners and blockages into today’s very different and deeply integrated North American economy. The Trump administration has been outspoken in its criticism of NAFTA, which the president has called “the worst deal ever made”. This column, taken from a recent Vox eBook, argues that reversing the current NAFTA policy environment would not simply wind back the clock to the pre-agreement economy from 20-plus years ago. Instead, it would throw spanners and blockages into today’s very different and deeply integrated North American economy.

Sling the Singapore model out of the Brexit debate
FT View Jul 31, 2017
Slashing tax and regulation is economically and politically unfeasible.

The sequel to the global financial crisis is here
Frank Partnoy (FT) Jul 31, 2017
High credit ratings have hidden a structural instability.

Basic Income: And How We Can Make It Happen, by Guy Standing
Gemma Tetlow (FT) Jul 31, 2017
A leading advocate for flat-rate payments to all citizens makes his passionate case.

Emerging market consumer confidence hits 24-year high
Steve Johnson (FT) Jul 31, 2017
Tumbling inflation and surging stock exchanges create buoyant mood.

To meet the UN development goals, look to the security sector
Katherine Dixon (FT) Jul 31, 2017
Until armies serve their people, progress on hunger and poverty will be slow.

At 50, Asean is reaping the rewards of economic integration
Hiroshi Kotani (Nikkei Asian Review/FT) Jul 31, 2017
Falling trade barriers are boosting growth and changing how the bloc does business.

The east is turning green
Helen Wong (FT) Jul 31, 2017
China and India are taking a global lead in renewable energy.

Free-Trade is a Two-Way Street
Wilbur Ross (WSJ) Jul 31, 2017
China, the EU and other trading partners put up formidable barriers to imports from America.

What the Trump administration needs to tell its supporters about China
Hugh Hewitt (WP) JUl 31, 2017
There isn’t going to be a trade war.

For Japan's Economy, Now Is the Time to Step Up Reforms
IMF News Jul 31, 2017
Japan’s economy is expected to grow again this year—at 1.3 percent—thanks to a continued pickup in trade and temporary fiscal support. But a rapidly aging population and a shrinking workforce mean that the country will need to speed up reforms to boost wages, productivity, and growth, said the IMF in its annual review of the Japanese economy.

What State and USAID employees think about redesigning US foreign aid
George Ingram (Brookings) Jul 31, 2017
The recent recommendations made by State Department and USAID employees should serve as guides for the Trump administration as it considers organizational changes to the two agencies.

East Asia’s Challenge: Resisting Hyper-Nationalism, Not Globalization
Shihoko Goto (Globalist) Jul 31, 2017
Overcoming nationalistic barriers is more urgent than ever for pro-Western Asian countries.

The U.S. Is the Sick Man of the Developed World
Justin Fox (Bloomberg View) Jul 31, 2017
Americans' living standards aren't nearly as good as they like to think they are.

China Needs More Foreigners
Christopher Balding (Bloomberg View) Jul 31, 2017
More openness would only help its economy.

Are Central Bankers Turning Marxist?
Daniel Moss (Bloomberg View) Jul 31, 2017
Workers aren't the only ones frustrated over low wages.

The Biggest Worry for British Bankers Isn’t Brexit
Therese Raphael (Bloomberg View) Jul 31, 2017
The financial sector would like to ignore the Labour Party leader. But if he one day takes power, they’ll wish they had been better neighbors.

Six Things Central Bankers Don't Get About Wages
Gary Shilling (Bloomberg View) Jul 31, 2017
Globalization, output potential and an ample supply of labor are making it harder for workers to get raises.

Venezuela’s Unprecedented Collapse
Ricardo Hausmann (Project Syndicate) Jul 31, 2017
With per capita GDP down by 40% since 2013, Venezuela’s economic catastrophe dwarfs any in the history of the US, Western Europe, or the rest of Latin America. And yet headline GDP numbers actually understate the magnitude of the economy's decline.

The Bank of Japan’s monetary easing and portfolio rebalancing channel
Sayuri Shirai (VoxEU) Jul 31, 2017
Portfolio rebalancing through large-scale asset purchases is one of the major transmission channels under the zero lower bound. This column assesses whether the channel has been effective in Japan, focusing in turn on financial institutions, firms, and households. Japanese firms and households are notoriously risk averse, limiting the effectiveness of the portfolio rebalancing channel. These results suggest that more drastic structural reforms and growth strategies are needed.

Bridging the Gap: Forecasting Interest Rates with Macro Trends
Michael D. Bauer (FRBSF Econ Letter) Jul 31, 2017
Interest rates are inherently difficult to predict, and the simple random walk benchmark has proven hard to beat. But macroeconomics can help, because the long-run trend in interest rates is driven by the trend in inflation and the equilibrium real interest rate. When forecasting rates several years into the future, substantial gains are possible by predicting that the gap between current interest rates and this long-run trend will close with increasing forecast horizon. This evidence suggests that accounting for macroeconomic trends is important for understanding, modeling, and forecasting interest rates.

on the low level of global real interest rates
Stanley Fischer (FRB) Jul 31, 2017
Why are interest rates so low? And why has the decline in interest rates been so widespread?

After the eurozone crisis: Causes, consequences, and lessons for European and US policymakers
Dalibor Rohac and Lars Christensen (AEI) Jul 31, 2017
European economies with flexible exchange rates coped far better with the challenges of the Great Recession than those inside the eurozone or with currencies pegged to the euro. The deflationary pressures also contributed to the rise of authoritarian populist politics in Europe. Notwithstanding positive growth rates expected in 2017 and 2018, the eurozone is threatened by one-size-fits-all monetary policy, guided by an extreme aversion to inflation. Eurozone also suffers from inadequate fiscal governance. In its reform, Europeans should follow the experience of US federalism, combining a one-off federalization of some eurozone debt with a credible no-bailout policy going forward.