News & Commentary:

Articles/Commentary

The great interruption continues
Martin Wolf (FT) Jul 1, 2020
Leaders should now be asking how we create the strongest feasible recovery.

German corporations — and regulation — are in the dock
Jonathan Guthrie (FT) Jul 1, 2020
The country's consensual model of capitalism needs an overhaul in the wake of Wirecard's implosion.

US-China spat puts future of Hong Kong dollar in the spotlight
Henny Sender (FT) Jul 1, 2020
Head of city's de facto central bank shrugs off the threat of speculative attacks.

PMIs are not a good month-on-month gauge
Claire Jones (FT) Jul 1, 2020
The data firm behind the indices admits the figures do not accurately record the level of change from one month to another.

The 'Rocket Ship' Economic Recovery Is Crashing
Jim Tankersley and Ben Casselman (NYT) Jul 1, 2020
Real-time data suggest a quick resurgence of business activity is leveling off nationally — and reversing in states like Arizona and Texas.

Why Do the Rich Have So Much Power?
Paul Krugman (NYT) Jul 1, 2020
Americans may be equal, but some are more equal than others.

Is Economic Inequality Really a Problem?
Samuel Scheffler (NYT) Jul 1, 2020
Yes, but the answer is less obvious than you might think.

Mexico has few reasons to celebrate the USMCA as violence flares in alarming ways
León Krauze (WP) Jul 1, 2020
An attack against Mexico City's police chief obscures any prospects of economic prosperity.

Digital Financial Inclusion in the Times of COVID-19
Ulric Eriksson von Allmen, Purva Khera, Sumiko Ogawa, and Ratna Sahay (IMF) Jul 1, 2020
Low-income households and small firms can benefit greatly from advances in mobile money, fintech services and online banking.

Why Governments Hate Currency Competition
Thorsten Polleit (Mises Wire) Jul 1, 2020
There are some reasons to be optimistic about the future of free market money. On the other hand, the world's governments will fight true currency competition every step of the way.

As China Lifts Migration Rules, Growth Will Follow
Adam Minter (Bloomberg View) Jul 1, 2020
For decades, the hukou system has impeded upward mobility. It may finally be on the way out.

How Everybody Learned to Love the Euro
Marcus Ashworth (Bloomberg View) JUl 1, 2020
The currency's strength could be seen as a judgment on Europe's handling of the coronavirus when compared with the U.S. and other parts of the world.

The Fed Has Too Much Empathy for Banks
Narayana Kocherlakota (Bloomberg View) JUl 1, 2020
It needs policy makers with more diverse backgrounds.

That V-Shaped Recovery Isn't Happening
Mark Gongloff (Bloomberg View) Jul 1, 2020
Bouncing back from coronavirus was never going to be easy, and now it's even harder.

Covid-19's Toll Will Rewrite Latin America's Future
Mac Margolis (Bloomberg View) Jul 1, 2020
To achieve lasting salutary change, governments must fix vulnerabilities that the pandemic has laid bare.

Hong Kong's Future Will Now Be Made in China
David Fickling and Nisha Gopalan (Bloomberg View) JUl 1, 2020
New security law spells demise of the global financial center into a vault for the mainland.

The Recovery Plan America Needs
Laura Tyson and Lenny Mendonca (Project Syndicate) Jul 1, 2020
Though US policymakers took bold early action to prop up the economy during the COVID-19 crisis, the International Monetary Fund now expects America's GDP to contract by 8% in 2020. If the US government does not pursue a comprehensive recovery program, the outlook will become even worse.

Priorities for the COVID-19 Economy
Joseph E. Stiglitz (Project Syndicate) Jul 1, 2020
With hopes of a sharp rebound from the pandemic-induced recession quickly fading, policymakers should pause and take stock of what it will take to achieve a sustained recovery. The most urgent policy priorities have been obvious since the beginning, but they will require hard choices and a show of political will.

Wealth Redistribution in the Chinese Stock Market: the Role of Bubbles and Crashes
Li An, Jiangze Bian, Dong Lou, and Donghui Shi (VoxChina) Jul 1, 2020
Using comprehensive administrative data from China, we document a substantial increase in inequality of wealth held in risky assets by Chinese households in the 2014–2015 bubble-crash episode: the top 0.5% households in the equity market gained, while the bottom 85% lost, 250B RMB through active trading in this period, equating to 30% of each group's initial equity wealth. In comparison, the return differential between the top and bottom groups in periods of a relatively calm stock market is an order of magnitude smaller. We examine a number of possible explanations for these findings and discuss their implications.

Fiscal discipline and budgetary analytical capacity in the euro area
Yuliya Kasperskaya and Ramon Xifré (VoxEU) Jul 1, 2020
In the aftermath of crises, the state of public finances typically regains prominence in policy agendas. This column advances the hypothesis that three properties of the budgetary setup – reliability of projections, openness to scrutiny, and transparency – facilitate the exercise of the 'budgetary analytical capacities' of the government, legislature, and the wider public. It constructs an index of such capacities from the OECD Survey on Budget Practices. For the period 2012-2016, a simple measure of fiscal discipline is correlated with the index and is not correlated with other standard political-economy variables that are generally used to explain fiscal discipline.

Germany can unlock the EU's recovery fund
FT View Jul 2, 2020
Reconciling competing demands would be fitting legacy for Angela Merkel.

Sterling's faded illusion of sovereignty
Philip Stephens (FT) Jul 2, 2020
The pound has been a ball-and-chain on successive UK governments.

How index investing can drive sustainable finance transition
Lionel Paquin (FT) Jul 2, 2020
A well-informed decarbonisation trajectory calls for a quantitative investment approach via indices.

EU stimulus must be strong, co-ordinated and focused
Olli Rehn (FT) Jul 2, 2020
Funding must target healthcare, employment, sustainable development and digital transformation.

A True Economic Stimulus Plan
Casey B. Mulligan and Stephen Moore (WSJ) Jul 2, 2020
Don't extend benefits for unemployment. Suspend the payroll tax to spur work and growth.

Beijing Will Miss Hong Kong Now That It's Gone
Joseph C. Sternberg (WSJ) Jul 2, 2020
The city isn't the economic asset it once was, but its autonomy showed China could keep its word.

Trump's Virus Is Spreading, and His Economy Is Stalling
Paul Krugman (NYT) Jul 2, 2020
The president leads a transition to sickness.

Paraguay Beats the Pandemic and Seeks New Growth
Bas B. Bakker and Tobias Roy (IMF) Jul 2, 2020
Paraguay acted forcefully against COVID-19 and succeeded in containing the pandemic with very few cases and casualties. But the economic impact has been harsh: GDP is forecast to shrink 5 percent this year. As it seeks to revive growth, the country is also undertaking reforms to improve governance and business climate.

Despite the rhetoric, US-China financial decoupling is not happening
Nicholas R. Lardy and Tianlei Huang (PIIE) Jul 2, 2020
The US-China economic confrontation of the last few years has prompted predictions that the world's two largest economies are headed for a "decoupling." The Trump administration's recent threat to delist Chinese companies from US stock exchanges if they fail to comply with US accounting regulations underscored that possibility, and Trump tweeted in mid-June that "a complete decoupling from China" was a US policy option.

India Shows China Tech the Other Side of the Fence
Tim Culpan (Bloomberg View) Jul 2, 2020
Protectionism cleared the way for mainland upstarts to grow into giants. Now, they're finding overseas markets closing against them.

Stocks Are the Default Choice In a World of Bad Options
Aaron Brown (Bloomberg View) Jul 2, 2020
Investors are opting to hold equities, not because they're attractive, but because everything else is much less attractive.

Markets May Have a Reason to Rise Along With Covid-19 Cases
Conor Sen (Bloomberg View) Jul 2, 2020
As the weeks go by, the timeline for a coronavirus vaccine is getting shorter and driving optimism.

There's Still a Gaping Hole in the Economy
Justin Fox (Bloomberg View) Jul 2, 2020
Add up the numbers from June's jobs report and they remain miles from the pre-pandemic normal.

U, L, W -- They All End Up Spelling Trouble
Daniel Moss (Bloomberg View) Jul 2, 2020
By looking only at the broad shape of coronavirus recoveries, we risk missing lessons from the positive data out there.

Florida as a Developing Country
Michael Spence and Chen Long (Project Syndicate) Jul 2, 2020
During the first waves of the COVID-19 pandemic in Asia and Western advanced economies, there was a clear pattern of lockdown, containment, and gradual economic reopening. But now a third pandemic wave has brought a new, more disturbing pattern to both developing countries and major US states.

A More Humane Post-Pandemic Social Contract
Koichi Hamada (Project Syndicate) Jul 2, 2020
Beyond a public-health crisis, the COVID-19 pandemic is an economic and humanitarian crisis – one that is exposing and widening our societies' fault lines. Though addressing systemic inequities is extremely difficult, there are reasons to hope that the pandemic will spur progress toward greater social justice.

How banks affect investment and growth
Thorsten Beck, Robin Döttling, Thomas Lambert, and Mathijs van Dijk (VoxEU) Jul 2, 2020
Banks fulfil several key functions in the economy, from improving the allocation of capital by extending credit to facilitating consumption smoothing through saving and borrowing. The creation of liquidity lies at the centre of much of a bank's operations. This column provides evidence that banks' liquidity creation is associated with higher economic growth across countries and industries, with important non-linear effects. Results suggest that in the new 'knowledge economy' banks will have a more limited role, compared to other types of financial intermediaries and markets.

Will WFH Have a Long-Run Economic Effect?
Jay H. Bryson and Hop Mathews (WF Econ Group) Jul 2, 2020
The COVID-19 pandemic has had many effects on the U.S. economy, including a significant increase in work-from-home (WFH) arrangements. Could WFH lead to changes in the labor supply and/or labor productivity and have lasting macroeconomic effects in the United States?

The shape of the recovery is not a given but must be decided
Martin Wolf (FT) Jul 3, 2020
Rishi Sunak should not succumb to premature fiscal retrenchment.

Investors are too complacent about emerging market risks
Megan Greene (FT) Jul 3, 2020
Abundant global liquidity has only papered over EM's debt problems and will not last.

Why the Fed thinks Goldman is America's riskiest bank
Laura Noonan (FT) Jul 3, 2020
Annual capital review finds that New York bank would struggle in a deep recession.

Beijing's Hong Kong takeover is a masterclass in creating fear
Isabel Hilton (FT) Jul 3, 2020
If cash injections do not ease worries about the city's financial future, coercion will.

The Mystery of High Stock Prices
Steven Rattner (NYT) Jul 3, 2020
Why is the market doing so well when the economy is doing so poorly?

Corruption and COVID-19
Vitor Gaspar, Martin Mühleisen, and Rhoda Weeks-Brown (IMF) Jul 28, 2020
Governments are playing a bigger role in the economy and this increases opportunities for corruption.

Building Forward with Digital Agriculture
Michael Kremer and Gilbert F. Houngbo (Project Syndicate) Jul 3, 2020
With COVID-19 having made us all more dependent on digital technology than ever before, now is the time to ensure that the revolution does not leave the world's poorest communities further behind. Increasing investment in technologies to help small-scale farmers will yield far-reaching benefits long after the pandemic has passed.

The Developing World Has an Alternative to Debt
Hernando de Soto (Project Syndicate) Jul 3, 2020
Before rushing into another round of borrowing, developing countries should consider another option that has long been staring them in the face. By taking the steps needed to connect untapped sources of wealth to the global economy, the developing world can finally start to accumulate capital instead of liabilities.

All Eyes on Germany
Helmut K. Anheier (Project Syndicate) Jul 3, 2020
Although distant observers tend to envy Germany for its relative stability and prosperity, the view from within is more complicated. As four recent books by German authors show, the country's political class has long indulged a dangerous complacency that can no longer be justified.

Dividend restrictions can improve the effectiveness of the countercyclical capital buffer release
Manuel A. Muñoz (VoxEU) Jul 3, 2020
According to the evidence, banks in the euro area are particularly reluctant to cut back on dividends during economic recessions. That is, the bulk of the adjustment in the face of negative shocks that hit bank profits is borne by undistributed net income. This column argue that this pattern can notably exacerbate the impact of a negative supply shock such as the COVID-19 pandemic on bank lending and economic activity. Using a macro-banking DSGE model calibrated to quarterly data of the euro area economy, it concludes that restricting dividend distributions has the potential to significantly improve the effectiveness of the countercyclical capital buffer release in ensuring that banks keep funding households and firms during the COVID-19 crisis.

Three strikes against the Fed
Willem Buiter (VoxEU) Jul 3, 2020
The US Federal Reserve – the world's most important central bank – is not in a good place. This column outlines three flaws in the operating practices of the Fed – (i) its refusal to adopt negative policy rates, (ii) the build-up of significant credit risks through non-transparent (quasi-)fiscal actions, and (iii) stress testing analysis which fails to account for the severity of the COVID-19 crisis. It proposes a number of ways forward, including a symmetric policy rate around zero, a temporary ban on dividend payments, new equity issuance, and conducting a comprehensive stress test of the financial system.

The neighbourhood effect of reforms after crises
Simeon Djankov, Dorina Georgieva, and Hibret Maemir (VoxEU) Jul 3, 2020
Countries reform when their neighbours have reformed too, especially in the aftermath of economic crises. This column examines business regulatory reforms during 2004–2019. Previous crisis episodes have generated improvements in the law and administration of registering property, trading across borders, protecting investors and resolving bankruptcy. The current period of post-COVID-19 recovery is propitious for regulatory reform.

The lessons for today from FDR's New Deal
FT View Jul 4, 2020
Roosevelt's presidency during the Depression transformed America

Leicester's dark factories show up a diseased system
Sarah O'Connor (FT) Jul 4, 2020
The bill for government inaction on the costs of online fast fashion has come due.

The Fed is rightly wary of embarking on yield curve control
Michael Mackenzie (FT) Jul 4, 2020
Reviving a policy last used in the second world war era should not be undertaken lightly.

The poorest countries may owe less to China than first thought
Economist Jul 4, 2020
Still, China lends more than the members of the Paris Club combined.

The Social Consequences of Zero Interest Rates
Pascal Hügli (Mises Wire) Jul 4, 2020
As Japan has shown, ultralow interest rates can greatly affect a society that was once impressively focused on innovation and investment.

Crises Only Sometimes Lead to Change. Here's Why.
Sheri Berman (FP) Jul 4, 2020
The coronavirus pandemic won't automatically lead to reforms. Great upheavals only bring systemic change when reformers have a plan—and the power to implement it.

This Is What the Future of Globalization Will Look Like
Henry Farrell and Abraham Newman (FP) Jul 4, 2020
The pandemic proved, once and for all, that the world can't be flat. But global trade can recover—if we rewrite the rules.

Will Angela Merkel save Europe?
Wolfgang Münchau (FT) Jul 5, 2020
Solving the EU's problems will take more than her coronavirus recovery plan.

Big data suggests a difficult recovery in US jobs market
Gavyn Davies (FT) Jul 5, 2020
Private sources paint a detailed and worrying picture of the labour market after the Covid-19 shock.

The Fullest Look Yet at the Racial Inequity of Coronavirus
Richard A. Oppel Jr., Robert Gebeloff, K.K. Rebecca Lai, Will Wright and Mitch Smith (NYT) Jul 5, 2020
New federal data provides the most comprehensive view to date of how Black and Latino people have been likelier than their white peers to contract the virus and die from it.

A smart Indian response to China
Suman Bery and Alicia Garcia-Herrero (EAF) Jul 5, 2020
India has the scale and sophistication to recalibrate its economic relationship with China such that deeper interdependence reduces, rather than increases, New Delhi's economic vulnerability.

Russia's fragile one-man rule
FT View Jul 6, 2020
Vladimir Putin's presidency may prove unsustainable well before 2036.

Why Hong Kong cannot be another Singapore
Gideon Rachman (FT) Jul 6, 2020
The rule of law is threatened by Communist party authority.

Don't fight the Fed but don't depend on it either
Karen Ward (FT) Jul 6, 2020
Investors will be smarting if withdrawal of stimulus knocks all assets at the same time.

Why crisis marks end of the road for longstanding business lines
Andrew Hill (FT) Jul 6, 2020
The pandemic should sever executives' emotional ties to underperforming projects and products.

What does the pathway to net zero look like for miners?
James Whiteside (FT) Jul 6, 2020
The lead time to new technology development and installation means preparations need to start now.

China's stock market surge is fuelled by liquidity not fundamentals
James Kynge (FT) Jul 6, 2020
Remember 2015? A rally not accompanied by climbing industrial profits can end in tears.

Oil markets shudder amid non-stop viral waves
Tim Daiss (AT) Jul 6, 2020
US' inability to contain Covid-19 spooks oil markets with Northern Hemisphere's cold weather flu season looming ahead.

EU recovery plans should fund the COVID-19 battles to come; not be used to nurse old wounds
Carlo Altomonte, Andrea Coali and Gianmarco Ottaviano (Bruegel) Jul 6, 2020
In its proposed Recovery Fund, the European Commission uses allocation criteria mainly linked to infection rates and past economic performance. To foster an efficient economic rebound post COVID-19 crisis, we propose instead to allocate funds through a forward-looking approach based on specific industrial and economic structure of EU regions.

Credible emerging market central banks could embrace quantitative easing to fight COVID-19
Gianluca Benigno, Jon Hartley, Alicia García-Herrero, Alessandro Rebucci and Elina Ribakova (Bruegel) Jul 6, 2020
Emerging economies are fighting COVID-19 and the economic sudden stop imposed by the containment and lockdown policies, in the same way as advanced economies. However, emerging markets also face large and rapid capital outflows as a result of the pandemic. This column argues that credible emerging market central banks could rely on purchases of local currency government bonds to support the needed health and welfare expenditures and fiscal stimulus. In countries with flexible exchange rate regimes and well-anchored inflation expectations, such quantitative easing would help ease financial conditions, while minimising the risks of large depreciations and spiralling inflation.

The North American Trade Dividend
H.R. McMaster and Pablo Tortolero (WSJ) Jul 6, 2020
The revised U.S.-Mexico-Canada pact will help post-Covid recovery and lure jobs back from China.

The dollar is still king. But if our institutions keep failing, it won't stay that way.
Charles Lane (WP) Jul 6, 2020
The best hedge against its downfall is to make sure U.S. institutions remain more trustworthy than the alternatives.

America's huge stimulus is having surprising effects on the poor
Economist Jul 6, 2020
Though severe deprivation is rising, not everyone is worse off.

US unemployment fell in June, but the official rate continues to understate the problem
Jason Furman (PIIE) Jul 6, 2020
The official unemployment rate continued to fall from 13.3 percent in May to 11.1 percent in June. Even with unemployment at levels not seen since the Great Depression, the official rate understates the increase in unemployment since the beginning of the COVID-19 pandemic, compared to historical levels.

Rising foreign investment in Chinese stocks and bonds shows deepening financial integration
Nicholas R. Lardy and Tianlei Huang (PIIE) Jul 6, 2020
A steady increase in foreign ownership of Chinese stocks and bonds reflects China's deepening integration into global financial markets. At the end of 2013, foreign owners held a total of RMB744 billion of these assets. By the end of the first quarter of 2020, this figure had grown to RMB4.2 trillion.

The Crisis India Needed
Devesh Kapur (Project Syndicate) Jul 6, 2020
The future direction and extent of India's reforms will increasingly reflect the challenge posed by China, which Indians now regard as their principal enemy. Ironically, as India seeks to escape China's shadow, it will have its powerful neighbor to thank for finally triggering changes that should have happened long ago.

What We Owe Essential Workers
Daron Acemoglu (Project Syndicate) Jul 6, 2020
The praise in America for low-paid essential workers on the front lines of the COVID-19 pandemic is long overdue, but it should be followed with meaningful reforms. Beyond raising the federal minimum wage, the United States desperately needs to overhaul its approach to technological innovation.

After the Liberal International Order
Joseph S. Nye, Jr. (Project Syndicate) Jul 6, 2020
If Joe Biden defeats Donald Trump in November, the question he will face is not whether to restore the liberal international order. It is whether the US can work with an inner core of allies to promote democracy and human rights while cooperating with a broader set of states to manage the rules-based international institutions needed to face transnational threats.

Pandemic shocks and fiscal-monetary policies in the euro area
Yothin Jinjarak, Rashad Ahmed, Sameer Nair-Desai, Weining Xin, and Joshua Aizenman (VoxEU) Jul 6, 2020
There is an importance relationship between prevailing market factors and the dynamics of the COVID-19 pandemic across the euro area. This column presents evidence to suggest that during the pandemic, adjustments in euro area credit default swap spreads diverge substantially from levels implied by theoretical models. Mortality outcomes and fiscal announcements account for a proportion of this divergence. Results also imply 'COVID dominance', whereby the widening spreads can lead to unconventional monetary policies that primarily aim to mitigate the short-run distress of the worst economic outcomes, temporarily pushing away concerns over fiscal risk.

The risks to a rapid recovery: Views from top UK economists
Ethan Ilzetzki (VoxEU) Jul 6, 2020
The UK economy is suffering its worst recession in centuries, with national income declining and unemployment rising at unprecedented rates. This column reports on the latest Centre for Macroeconomics survey, which reveals that despite this worrisome news, the panel is optimistic that the UK economy will recover to its pre-pandemic trend within five years or less, no worse than past UK recessions. Panellists emphasised that these predictions depend on the government effectively containing the spread of the virus and not reverting to austerity policies following the pandemic. The panel was split on the biggest risks to the pace of recovery, with firms' productive capacity, scarring effects of unemployment, and a slow demand recovery cited as prominent concerns.

How refugees boost business growth in hosting locations
Sandra Rozo, Onur Altindag, and Ozan Bakis (VoxDev) Jul 6, 2020
A large influx of Syrian refugees in Turkey induced substantial increments in Turkish firm production and entry, with variation in effects across firm size and sectors

COVID-19 and CO2
Galina Hale and Sylvain Leduc (FRBSF Econ Letter) Jul 6, 2020
One potential side effect from the rapid decline of global economic activity since the worldwide pandemic is a reduction in carbon dioxide emissions. Historically, CO2 emissions rise and fall in tandem with economic activity in the short run. Since the industries most affected by the downturn also produce the most CO2, emissions could drop more than output this time around. However, without substantial and sustained changes in energy sources and efficiency, the concentration of CO2 in the atmosphere—the relevant factor causing climate change—will continue on its upward trajectory.

Pursue self-interest by helping other economies too
Raghuram Rajan (FT) Jul 7, 2020
Industrialised Europe and Asia have contained the virus but elsewhere prospects are bleaker.

China's support for US dollar can no longer be relied upon
Michael Howell (FT) Jul 7, 2020
If flows reverse, then European assets, in particular, are set to benefit.

The Trouble in Mexico
WSJ Jul 7, 2020
AMLO visits Trump as economic woes grow south of the U.S. border.

Pakistan on brink of Covid-19 financial collapse
FM Shakil (AT) Jul 7, 2020
Pakistan is spending too much on the military and debt servicing amid coronavirus-induced economic devastation.

Teleworking is Not Working for the Poor, the Young, and the Women
Mariya Brussevich, Era Dabla-Norris, and Salma Khalid (IMF) Jul 7, 2020
Given the nature of jobs in each country, who are the most vulnerable?

The next transparency challenge for US aid agencies: Moving from publication to engagement
George Ingram and Sally Paxton (Brookings) Jul 7, 2020
The 2020 Aid Transparency Index brings some good news about the state of aid transparency among a range of different donors. The quality and comprehensiveness of aid data continue to improve, with 11 donors now in the "very good" category and 15 in the "good" category—which means over half the donors in the index are in those top two categories. The biggest issue across all donors, however, was the lack of performance data and information—objectives, results, reviews, and evaluations. Without this information, measuring effectiveness and applying learning becomes even more challenging.

Making the International Finance Corporation Relevant
Charles Kenny, Vijaya Ramachandran and Junaid Sadiq Masood (CGD) Jul 7, 2020
Philippe Le Houerou, the Chief Executive of the International Finance Corporation (IFC) has announced his intention to step down in September. His legacy will include a significant effort to focus the work of the corporation on development impact and the world's poorest countries. Last year he said that "[m]y goal since I started at IFC three years ago has been to put development impact at the heart of IFC." He introduced significant institutional reform and staffing changes designed to deliver on that goal. And Le Houerou has had some success. But a look at IFC's portfolio suggests how far the institution still has to go to have the biggest impact.

Banks' Risks During the Pandemic Aren't Clear
Sheila Bair and Thomas Hoenig (Bloomberg View) Jul 7, 2020
The Fed's stress tests didn't publish the results needed most to understand the financial sector's ability to endure coronavirus.

Understanding the Pandemic Stock Market
Robert J. Shiller (Project Syndicate) Jul 7, 2020
The worse economic fundamentals and forecasts become, the more mysterious stock-market outcomes in the US appear. At a time when genuine news suggests that equity prices should be tanking, not hitting record highs, explanations based on crowd psychology, the virality of ideas, and the dynamics of narrative epidemics can shed some light.

A V-Shaped Recovery Could Still Happen
Jim O'Neill (Project Syndicate) Jul 7, 2020
Given the sheer scale and unprecedented nature of the COVID-19 economic shock, it is not surprising that most commentators believe the outlook for recovery is bleak. But key weekly and monthly indicators suggest that a sharp return to growth remains more likely than not.

Europe's Good Crisis
Daniel Gros (Project Syndicate) Jul 7, 2020
The COVID-19 crisis has shown that the European Union is much more than an assemblage of incessantly bickering small to medium-size countries. The evolution of key economic and epidemiological indicators is remarkably similar across EU countries, owing to a unity of perspectives that is glaringly absent in the United States.

State ownership will gain importance as a result of COVID-19
Carolina Abate, Assia Elgouacem, Tomasz Kozluk, Jan Stráský, and Cristiana Vitale (VoxEU) Jul 7, 2020
In response to the COVID-19 crisis, governments are taking equity stakes in financially distressed companies, potentially risking market distortions. Using micro-level evidence for OECD members, this column shows that in countries where state-owned enterprises are subject to the same market forces as their competitors, they perform on par with private firms. Additionally, it analyses OECD product market regulation indicators to gain insights into areas of corporate governance that would benefit from reforms. It recommends governments to impose strict recovery plans on the firms benefiting from state interventions, set clear conditions for exit from state ownership, and rely on independent advisors to ensure sound valuations of investments and divestments.

Bank insiders impede equity issuances in times of crisis
Martin Götz, Luc Laeven, and Ross Levine (VoxEU) Jul 7, 2020
Banks with more equity tend to lend more, create more liquidity, have higher probabilities of surviving crises and if they do, they tend to recover faster. The degree to which a bank issues new stock to replenish bank equity in response to a crisis is therefore crucial. This column shows that ownership structure is an important determinant of a bank's new stock issuance during a crisis. US banks with greater insider ownership are found to have had significantly less common stock sales following the onset of the 2008 Global Crisis.

Deeper recession, wider divergences: The Commission's Summer 2020 interim forecast
Maarten Verwey and Björn Döhring (VoxEU) Jul 7, 2020
Forecasters agree that the economic fallout from COVID-19 has caused the sharpest drop in economic activity in Europe and globally since WWII. Just how deep the drop of activity was in the second quarter, which sectors were most strongly affected by containment measures, and how swift the rebound will be as they are gradually lifted is still very uncertain. This column describes how the European Commission's Summer 2020 interim European Economic Forecast now estimates a deeper drop of output in the second quarter of the current year than was anticipated earlier. The recovery is also now expected to be less swift than was projected in Spring, with differences across Member States set to be more pronounced. Minimising hysteresis and avoiding persistent economic divergences within the EU and euro area requires the rapid agreement and deployment of common support measures at the EU level. The risk otherwise is of significant distortions to the internal market and of even deeper divergences between countries that could ultimately threaten the smooth functioning of the monetary union.

Economic policy under the pandemic: A European perspective
John Hassler, Per Krusell, Morten Ravn, and Kjetil Storesletten (VoxEU) Jul 7, 2020
The responses to Covid-19 have had direct economic consequences of historic proportions. In reaction to this challenge, this column was prepared by four main authors and then discussed within a large group of research-active macroeconomists who also signed the final document. The column discusses the nature of the shock and the challenges for economic policy in Europe in the current and next phases of the crisis. In addition to outlining some basic principles for guiding domestic economic policy, it also calls for clear communication of policy to minimise uncertainty, for cooperation across countries along several dimensions, and for a clear and unified strategy in the management of national debts.

A Divided World Struggles With Covid-19
Humphrey Hawksley (YaleGlobal) Jul 7, 2020
The Covid-19 pandemic should have encouraged unity among governments.

Tech giants at forefront of east-west decoupling
FT View Jul 8, 2020
Companies face difficult choice over Hong Kong's new security law.

Lebanon's elites scramble to avoid the reckoning for its debt crisis
David Gardner (FT) Jul 8, 2020
The government and the banks cannot even agree on the scale of the problem, let alone tackle it.

The world falls apart as the US withdraws
Martin Wolf (FT) Jul 8, 2020
An administration that cannot govern makes a stark contrast with China.

Airwallex aims to upend global payments system
Henny Sender (FT) Jul 8, 2020
Fintech creates new infrastructure to replace traditional transactions dominated by Swift.

Why foreign investors are losing faith in Japanese stocks
Leo Lewis (FT) Jul 8, 2020
Lack of progress on corporate governance reforms helps explain lost momentum.

Banks need to prepare now for Covid-19 losses later
Simon Samuels (FT) Jul 8, 2020
European lenders should not be tempted to delay as they did after the 2008 crisis.

How Not to Punish China
WSJ Jul 8, 2020
Weaponizing the dollar to hurt Hong Kong would backfire on the U.S.

Import substitution is making an unwelcome comeback
Douglas A. Irwin (PIIE) Jul 8, 2020
Import substitution is the idea that blocking imports of manufactured goods can help an economy by increasing the demand for domestically produced goods. The logic is simple: Why import foreign-made cars or clothing or chemicals when one could produce those goods at home and employ workers in doing so?

Multilateralism Has Lost Its Way
Andrés Ortega (Globalist) Jul 8, 2020
Collective intelligence is needed to build a new multilateralism for the 21st century.

USMCA's Challenges in the Age of COVID-19
Antonio Garza (BRINK) Jul 8, 2020
This past Wednesday, the U.S.-Mexico-Canada Agreement finally entered into force, but has arrived at a challenging moment. While the agreement will provide order for regional trade, its immediate effects will pale in comparison to the other structural forces currently at play.

Selecting the next WTO Director-General: What the trade community thinks
Matteo Fiorini, Bernard Hoekman, Petros Mavroidis, Douglas Nelson, and Robert Wolfe (VoxEU) Jul 8, 2020
The WTO is looking for a new Director-General. This column reports on selected results of a recent survey designed to help identify what the trade community thinks is needed. The results suggest strong support for someone with managerial and political experience, and a professional network that spans international organisations, major capitals, and international business. African respondents assign the highest priority to regional diversity. Overall, there is a distinct contrast between the preferred profile and that of the incumbent.

Sunak keeps UK economy in a holding pattern
FT View Jul 9, 2020
Package is more of a stopgap than a kick-start.

Why the market is not buying the idea of a big rebound in oil
David Sheppard (FT) Jul 9, 2020
The outlook for demand seems very uncertain, once the pandemic finally slows.

Why ESG investing makes fund managers more money
Gillian Tett (FT) Jul 9, 2020
By actually knowing their supply chains, do-gooding companies have made better returns.

Negative interest rates can be a doom loop for pension investors
Amin Rajan (FT) Jul 9, 2020
Fixed income is turning into fixed expense for those who seek haven assets for capital conservation.

China's threats to the UK risk being more than 'loud thunder, little rain'
George Magnus (FT) Jul 9, 2020
Britain has to reboot its relationship with a country that is a commercial partner, rival, and political adversary.

Turkey needs a serious fight against inflation
Hakan Kara (FT) Jul 9, 2020
Micromanagement tools and restrictions on capital mobility are not the answer.

Fast economic data is like fast food — tempting but bad for you
Chris Giles (FT) Jul 9, 2020
Rapid data forged UK pandemic policies, but we must know its weaknesses while marvelling at its speed.

Americans need more guidance from the Fed
Economist Jul 9, 2020
Spelling out the future path of policy would help.

The International Finance Facility for Education: A vital instrument to mitigate the impact of the pandemic
Pedro Alba and Karen Mathiasen (Brookings) Jul 9, 2020
We cannot neglect education in this crisis

The US COVID-19 recession – Will this time be different?
D. Azzopardi, M. Hermansen, P. Lenain and D. Sutherland (OECD Ecoscope) Jul 9, 2020
As COVID-19 hit the United States, non-essential businesses had to shut down and large numbers of workers lost their jobs. The unemployment rate went from a low point of 3.5% in early 2020 to a post-war record high of 14.7% in just two months. With the easing of confinement and the reopening of businesses, many workers were recalled and the unemployment rate fell back to 11.1% in June 2020. After this initial rapid improvement, however, further declines are likely to be slower. The OECD projects that unemployment will still be in the range of 8-10% at the end of 2021, depending on how fast the coronavirus epidemics is controlled, leaving millions of workers without a job (OECD, 2020a).

Can we avoid a lost decade of development?
Kevin Watkins (Brookings) Jul 9, 2020
When governments gathered last September at the United Nations General Assembly, the talk was of a "decade of delivery" for the Sustainable Development Goals (SDGs)—the targets for eradicating extreme deprivation, expanding opportunities, and turning the tide on climate change. That was then. Now the world is teetering on the brink of unprecedented reversals in development. Can we stop the 2020s becoming a lost decade?

Currency manipulation remained low in 2019
Christopher G. Collins and Joseph E. Gagnon (PIIE) Jul 9, 2020
Currency manipulation, the practice of countries acting to weaken the values of their currencies in order to boost their trade surpluses, remains near its lowest level since 2002. In 2019, the latest year for which nearly complete data exist, only Iceland, Singapore, Switzerland, and Thailand met the criteria for manipulation put forth by C. Fred Bergsten and Joseph E. Gagnon in 2017. Together, these countries purchased $83 billion in net official assets, considerably less than total purchases during the peak years of manipulation in 2003–13, which sometimes reached $1 trillion per year.

Trust Funds for All
Kemal Dervis and Sebastián Strauss (Project Syndicate) Jul 9, 2020
The COVID-19 pandemic has exposed many flaws in advanced economies, not least the fact that inequality can be deadly. The case for giving all citizens a capital endowment – reflecting both their inalienable dignity and society's return on its public investments – has never been stronger.

What Will COVID-19 Do to Banking?
Xavier Vives (Project Syndicate) Jul 9, 2020
Banks have a chance to improve their battered public image by playing a constructive role in mitigating the current economic crisis. But with COVID-19 set to accelerate the sector's digitalization and restructuring, their future could soon become more uncertain.

China as Economic Bogeyman
Dani Rodrik (Project Syndicate) Jul 9, 2020
Many Western economists presume that governments are not very good at identifying industries that merit support, and that domestic consumers and taxpayers incur the bulk of the costs. By the same logic, if Chinese policymakers effectively targeted activities where social benefits exceed private benefits, then it is not clear why foreigners should complain.

Sovereign Creditors Must Not Rewrite the Rules During the Pandemic
Joseph E. Stiglitz , Robert Howse, and Anne-Marie Slaughter (Project Syndicate) Jul 9, 2020
If Argentina acceded to the demands of a group of hold-out creditors, it would create a disastrous precedent that would set back by more than a decade the development of the international legal architecture for sovereign debt. More than 70 economists and scholars urge the international community to reject such irresponsible behavior.

How to Make Trade Work for Workers
Robert E. Lighthizer (FA) Jul 9, 2020
Charting a path Between protectionism and globalism.

There Is Little Dignity in Trump's Trade Policy
Chad P. Bown (FA) Jul 9, 2020
Workers were never at the heart of the President's plan.

The Post-Pandemic Economy Could Be Green and Clean—but Not With These Plans
Jason Bordoff (FP) Jul 9, 2020
Well-meaning green stimulus plans fall far short of what's needed for the climate and the economy.

Encouraging Eurozone Economic Data
Jen Licis and Nick Bennenbroek (WF Econ Group) Jul 9, 2020
The prospects for the Eurozone economy have become more encouraging as COVID-19 case growth continues to stabilize and activity and confidence indicators point to a less severe decline in Q2-2020 than we previously anticipated.

Emerging market debt: the pandemic's ticking timebomb?
FT View Jul 10, 2020
IMF needs more firepower and private sector must join restructuring effort.

How best to shrink UK's post-coronavirus deficit
FT View Jul 10, 2020
Fiscal retrenchment should be left for later and focus must be on raising taxes.

Can Germany handle a Bavarian revolution?
Frederick Studemann (FT) Jul 10, 2020
Covid-19 outbreak at meat plant remakes Angela Merkel succession plans.

We must maintain the UK as a world leader in the law
David Lammy (FT) Jul 10, 2020
Legal services are one of Britain's top global exports and should be protected.

Stocks Generate Big Gains and Bigger Questions
Conrad de Aenlle (NYT) Jul 10, 2020
A powerful rally during drastically deteriorating economic conditions has left the market richly valued and facing great uncertainty.

How Liberalizing Trade with China Led to a Boom in International Students in the US
Gaurav Khanna, Kevin Shih, Ariel Weinberger, Mingzhi Xu and Miaojie Yu (CGD) Jul 10, 2020
The economic benefits of welcoming international students.

Rebuilding American industry: Devil is in the details
David P. Goldman (AT) Jul 10, 2020
It's time to reshore key industries to protect America from economic shocks.

What the pandemic reveals about governance, state capture, and natural resources
Daniel Kaufmann (Brookings) Jul 10, 2020
The COVID-19 pandemic has laid bare the contrasting strengths and weaknesses in governance and leadership across the globe. Among high-income countries, many European states that have excelled in various governance dimensions, as measured by the annual Worldwide Governance Indicators (WGI), have also addressed the pandemic well. These include the women-led Germany and the Nordic countries (except for Sweden). By contrast, the pandemic is raging in much of the United States, with well over 130,000 deaths and 3 million reported cases (accounting for one-quarter worldwide, with only 4 percent of the world's population).

Fiscal Policies for a Transformed World
Vitor Gaspar and Gita Gopinath (IMF) Jul 10, 2020
Policymakers should tackle the rising poverty and inequality, as well as the structural weaknesses exposed by the crisis to better prepare for future shocks.

No Recovery Without Debt Relief
Mo Ibrahim (Project Syndicate) Jul 10, 2020
The COVID-19 pandemic is a shared global challenge, and it demands a shared global response that addresses both the health and economic dimensions of the crisis. More extensive debt relief for Africa is an essential feature of any such response.

Toward a New Fiscal Constitution
Mariana Mazzucato and Robert Skidelsky (Project Syndicate) Jul 10, 2020
With the COVID-19 pandemic forcing governments to spend on an unprecedented scale to sustain businesses and households, there has never been a better time to restore the state to its proper role as a rudder for the broader economy. The market alone is simply no match for the challenges of the twenty-first century.

The real cost of political polarisation
Christos Makridis and Jonathan Rothwell (VoxEU) Jul 10, 2020
There is significant dispersion in beliefs about the pandemic and its economic implications. This column uses new high-frequency and nationally representative data to document the overwhelming importance of political affiliation as a determinant of these beliefs and the adverse effects of partisanship on local economic activity. In the US, Republicans are significantly less worried about COVID-19 and less likely to expect a long-term disruption due to the virus. These results suggest that the macroeconomic effects of the pandemic on consumption may depend on behavioural factors, like political affiliation. There is significant dispersion in beliefs about the pandemic and its economic implications.

Finance and politics: New insights
Thorsten Beck, Orkun Saka, and Paolo Volpin (VoxEU) Jul 10, 2020
A rapidly expanding literature has shown the importance of political economy factors for legislative and regulatory actions in the financial sector and ultimately financial sector stability and efficiency. This column reports on recent research in this field, presented at the first London Political Finance, including work on financial fragility leading to the rise of right-wing extremist parties, private interests in financial regulation, financial gains from political connections, political beliefs and financial decisions and the role of media in financial decisions. It lays out some of the important takeaways and suggests directions for further research that can shed light on the remaining issues.

Covid-19: How to build better Early Warning Systems
Henrik Müller and Nico Hornig (VoxEU) Jul 10, 2020
The COVID-19 pandemic has spread massive economic uncertainty. But popular indicators were rather late in showing the size of the impact. To gauge the severity of future shocks in a timelier fashion, this column proposes a new taxonomy of economic uncertainty and an approach to measure it. In this vein it constructs a news-based indicator called Uncertainty Perception Indicator (UPI).

Electricity and firm productivity: A general equilibrium approach
Stephie Fried and David Lagakos (VoxDev) Jul 10, 2020
Eliminating power outages in the developing world would substantially raise firm productivity and worker wages in the long run.

Recent insights on the role of religion in economic history
Sascha O. Becker, Jared Rubin, and Ludger Woessmann (VoxEU) Jul 12, 2020
Over the past two decades, analysis of the relevance of religion has entered centre stage in the study of economic history, addressing questions such as how religion and religious beliefs in God and the afterlife have historically affected economies, and how historical socioeconomic circumstances have shaped religious beliefs and activities. This column derives a few general insights emerging from the rapidly growing literature.

The coming earnings season could bring lofty stocks down to earth
Michael Mackenzie (FT) Jul 11, 2020
Analysts are still holding out hope for a V-shaped recovery in corporate profits.

As the economy recovers fiscal policy has to shift
Economist Jul 11, 2020
Is it time to wind down emergency stimulus?

Some economies are bouncing back. But recoveries can easily go wrong
Economist Jul 11, 2020
Our analysis shows just how fragile consumer confidence can be.

Central banks expand their role to address the crisis
Gavyn Davies (FT) Jul 12, 2020
Far from being impotent, they have again been crucial actors in the pandemic.

Covid-19 will finally mark the end of the analogue age
Wolfgang Münchau (FT) Jul 12, 2020
The pandemic has accelerated society's shift to a more digital world.

A crisis is an ideal time to raise pay
Andrew Edgecliffe-Johnson (FT) Jul 12, 2020
Companies are realising that higher wages for the less well-off can pay for themselves.

Why the age of inequality has made us less happy
Helaine Olen (WP) Jul 12, 2020
It's painful to admit that our chances of achieving happiness are greater when our literal fortunes are greater, too.

The stock market and economy have parted ways. It's a FOMO market now.
Robert Samuelson (WP) Jul 12, 2020
What explains the disconnect between the real economy and the stock market?

Toward a More Resilient Europe
Poul M. Thomsen (IMF) Jul 12, 2020
The longer the slump, the greater will be the need to carefully target fiscal support in the high-debt countries.

Rutte's resistance will harm Europe's recovery
FT View Jul 13, 2020
The Dutch leader wants the final say on which countries deserve EU aid.

e-Estonia welcomes digital nomads
John Thornhill (FT) Jul 13, 2020
The country has attracted many foreign entrepreneurs but its vibrant tech economy is yet to benefit wider society.

Companies don't need any extra incentives to borrow
Jonathan Ford (FT) Jul 13, 2020
It is time to end the tax advantages that encourage bias in favour of debt.

Amlo is doubling down on failed bets in Mexico
Santiago Levy (FT) Jul 13, 2020
They have not worked over the past 30 years and are even less likely to now.

Inflation: baskets of plenty Premium
Lex (FT) Jul 13, 2020
Indices of price movements are imperfect metrics at the best of times.

Capital Wars, by Michael Howell
John Plender (FT) Jul 13, 2020
The fractious interdependence of China and the US.

When Central Banks Go Green
WSJ Jul 13, 2020
They'd sacrifice their hard-won independence for environmentalism.

The Fed has better tools than yield curve control
David Wilcox (PIIE) Jul 13, 2020
The Federal Reserve leadership is nearing the end of a searching discussion over how best to refashion its policy toolkit for the new, low interest rate world in which it now operates. One pivotal issue officials will have to resolve is how they should harness the power of the Fed's balance sheet to fight recessions. One possibility that has attracted much attention is that the Fed might adopt a relatively novel technique called yield curve control, or YCC.

Does National Debt No Longer Matter? How Economists' Views of Debt Have Changed
Caroline Atkinson (BRINK) Jul 13, 2020
The IMF downgraded its forecast for global economic growth because of COVID-19. The IMF warned that global public debt will exceed 100% of global GDP, yet urged some governments to spend more to stimulate growth.

Toward an Integrated Policy Framework for Open Economies
Tobias Adrian and Gita Gopinath (IMF) Jul 13, 2020
While capital mobility provides many benefits, capital flows to emerging market and developing economies are often volatile and depend critically on global financial conditions. The risks posed by volatile capital flows to macroeconomic and financial stability are often difficult to address with conventional monetary policy tools. Hence, policymakers have complemented interest rate policy with additional tools—including foreign exchange intervention, capital flow measures, and macroprudential actions—to achieve their objectives.

Training for the Pandemic Economy
Barry Eichengreen (Project Syndicate) Jul 13, 2020
The transition to the world being created by COVID-19 was always going to be difficult for workers in the worst-affected sectors. The main question now is whether policymakers will take the steps – including apprenticeship programs and expanded funding for community colleges and technical schools – that are most likely to make it easier.

The Green Tax Revolution Europe Needs
Christian Odendahl (Project Syndicate) Jul 13, 2020
European policymakers need to bolster short-term demand while simultaneously accelerating the shift toward carbon neutrality. The solution lies in a bold green tax reform, combined with generous compensation via the tax and benefits system and cheap funding to help firms and households adjust.

Will Bolsonaro Survive the Pandemic?
Peter Schechter (Project Syndicate) Jul 13, 2020
With Brazil gripped by an escalating health and economic crisis, calls for President Jair Bolsonaro's impeachment are growing louder. Even if he survives the political storm, his reform agenda will not.

Africa Can't Afford COVID-19 Tradeoffs
Abdourahmane Diallo , Lucica Ditiu, and Winnie Byanyima (Project Syndicate) Jul 13, 2020
Saving lives from COVID-19 in Africa will mean little if it also means allowing the number of lives lost to HIV, tuberculosis, and malaria to rise. Even as policymakers and civil-society leaders work to stop a new killer disease, they must resolve to sustain progress toward eliminating those we already know.

The COVID-19 threat to financial stability in Europe
Henk Jan Reinders, Dirk Schoenmaker, and Mathijs van Dijk (VoxEU) Jul 13, 2020
The severe economic impact of the COVID-19 pandemic could threaten financial stability. Since accounting-based methods report loan losses with a delay, this column adopts a real-time, market-based assessment of the impact on corporate loan portfolios. Using European stock market data, it estimates that the market-implied losses for euro area banks could reach over €1 trillion, or, depending on the scenario, 7-43% of available bank capital.

COVID-19 and the national payments system
Biagio Bossone and Harish Natarajan (VoxEU) Jul 13, 2020
Governments and economists are now focused on the macroeconomic policies that can support economies during the Covid-19 pandemic. Yet, for policies to be effective and economies to function, payment and settlement systems and services – collectively referred to as the National Payments System – must operate efficiently, reliably, and securely. The first column of this series identifies the challenges affecting payment services during emergencies and discusses measures to ensure that payment systems keep operating. Public authorities should be proactive in mitigating risks to payment systems to support economic activity and help the public.

The Pandemic Could Be the Crisis Liberalism Needed
Matt Warner and Tom G. Palmer (FP) Jul 13, 2020
The future has rarely seemed bleaker for free-market democracy—but small changes can bring it roaring back.

Lessons from the financial crisis to prevent the Great Fragmentation
Marco Buti (VoxEU) Jul 13, 2020
Both the severity of the recession in Europe in 2020 and the subsequent bounce back of economies are likely to differ markedly across member states. Avoiding that the current crisis risks will be remembered as the Great Fragmentation is a key goal of the EU strategy. This column looks at the lessons learned during the financial crisis, and argues that a more consensual narrative, the lower risks of moral hazard and the rising political awareness that Europe has to count on 'indigenous' growth drivers provide a better chance of adopting an ambitious EU policy response. Whether it will also lead to deeper political integration, will depend on finalising long-lasting open institutional 'chantiers' such as Banking Union and Capital Markets Union.

Strengthening the Institutional Architecture of the Economic and Monetary Union
Marco Buti, Gabriele Giudice, and José Leandro (VoxEU) Jul 13, 2020
The crisis generated by the Covid-19 pandemic has required rapid and strong action. It also entails key choices, including on how the EU could help mitigate the impact of Covid-19, foster the economic recovery and support the dual green and digital transitions. In September 2019, before the crisis, the Directorate General for Economy and Finance of the European Commission organised a workshop on strengthening the institutional architecture of the EMU. This eBook presents the main ideas discussed at the workshop. \

Johnson risks a disunited UK over state aid
FT View Jul 14, 2020
The Westminster government must carry devolved nations with it.

Investors must prepare portfolios for Covid-19 debt crunch
Mohamed El-Erian (FT) Jul 14, 2020
The recovery value of assets will soon come to the fore, demanding closer scrutiny.

India takes a risk by encouraging national interest
Henny Sender (FT) Jul 14, 2020
A ban on Chinese apps is being closely watched by entrepreneurs and investors.

EU recovery fund fight is about shaping the bloc's future
Tony Barber (FT) Jul 14, 2020
The 27 members are struggling to find a shared vision of 'economic sovereignty'.

Eliminating expanded unemployment compensation would harm the US economy
Jason Furman (PIIE) Jul 14, 2020
The full elimination of FPUC would subtract 2.5 percent of US GDP on average in the second half of 2020, costing an average of 2 million jobs over the next year and raising the unemployment rate by up to 1.2 percentage points.

Why Sustainable Food Systems are Needed in a post-COVID World
Nicoletta Batini, James Lomax, and Divya Mehra (IMF) Jul 14, 2020
2020 will be a year of reckoning for the world's food systems.

Government-guaranteed bank lending: beyond the headline numbers
Julia Anderson, Francesco Papadia and Nicolas Véron (Bruegel) Jul 14, 2020
Loan guarantees have been a major part of the COVID-19 support packages offered by European governments to companies. The actual take-up numbers so far follow very different patterns from the headline announcements, and might allay early concerns about single market distortions caused by the different sizes of packages in different countries.

Debt relief for Sub-Saharan Africa: what now?
Suman Bery, Sybrand Brekelmans and Alicia García-Herrero (Bruegel) Jul 14, 2020
When G20 finance heads meet on 18 July, Europe will again need to lead on the group's flagship COVID-19 initiative to postpone low-income countries' debt service payments. For the first time, China has agreed to participate as an official creditor alongside members of the Paris Club. However, continuing lack of clarity on which Chinese creditors will participate, coupled with resistance from private sector creditors to voluntary participation, suggest that actual relief will be much less than originally planned.

Banks will get caught in US-China dollar battle
Brian Caplen (Banker) Jul 14, 2020
Trade and tech wars are not the only flashpoint in the superpowers' battle for supremacy. The battle over capital flows could be even more dramatic.

COVID-19, government payments, and international remittances
Biagio Bossone and Harish Natarajan (VoxEU) Jul 14, 2020
Governments and economists are now focused on the macroeconomic policies that can support economies during the Covid-19 pandemic. Yet, for policies to be effective and economies to function, payment systems and services must operate efficiently, reliably, and securely. The second column of this series discusses the special role that government payments and international remittances play, in particular for developing economies, and identifies measures to ensure their accessibility and resilience especially at times of emergencies.

Prime money funds during COVID-19
Lei Li, Yi Li, Marco Macchiavelli, and Xing (Alex) Zhou (VoxEU) Jul 14, 2020
Liquidity restrictions on investors, like the redemption gates and liquidity fees introduced in the 2016 money market fund (MMF) reform, are meant to improve financial stability during a crisis. However, by comparing the latest outflow episode due to COVID-19 to those in 2008 and 2011, this column finds evidence that these liquidity restrictions might have exacerbated the run on prime MMFs in this episode. Such severe outflows amid frozen short-term funding markets led the Federal Reserve to intervene with the Money Market Mutual Fund Liquidity Facility (MMLF). By providing 'liquidity of last resort', the MMLF successfully stopped the run on prime MMFs and gradually stabilised conditions in short-term funding markets.

COVID-19 and labour reallocation: Evidence from the US
Jose Maria Barrero, Nicholas Bloom and Steven Davis (VoxEU) Jul 14, 2020
One of the most urgent economic impacts of the Covid-19 crisis is on labour markets. Widespread job losses, drastic increases in unemployment benefit claims, and the rise of working from home have dominated the discussion during the pandemic so far. This column presents evidence from the US, arguing that the pandemic itself represents reallocation of labour within the economy. As different sectors and occupations are hit with variable severity, the authors argue that policymakers should be wary of this variation, responding with policies that will hold firm over time.

Pandemics and local economic growth: Italy during the Great Influenza
Mario Francesco Carillo and Tullio Jappelli (VoxEU) Jul 14, 2020
Many developing countries do not have adequate health infrastructure or the capacity to effectively implement lockdown policies to contain the spread of COVID-19. This column studies the historical experience of Italy during the 1918 Great Influenza in order to shed light on the consequences of pandemics in societies where it is difficult to implement lockdown policies or where healthcare systems are lacking. Using regional GDP and mortality data, it finds a strong negative effect of the pandemic on local economic growth. However, these adverse effects mostly dissipated three years after the pandemic.

Anthony Fauci Is a Better Economist Than Donald Trump or Jared Kushner
John Cassidy (New Yorker) Jul 14, 2020
By emphasizing the need to stop the renewed spread of the virus, Fauci is dispensing advice that jibes with what experts are saying is necessary for real economic recovery.

Fed's Balance Sheet: To Infinity and Beyond?
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Jul 14, 2020
In the first of two reports, we discuss the extraordinary growth in the Fed's balance sheet as well as our projections for the balance sheet's growth through 2020.

A Resurgence of the Virus, and Lockdowns, Threatens Economic Recovery
Jim Tankersley and Ben Casselman (NYT) Jul 15, 2020
Hopes for a rebound are endangered by prolonged closures of schools, renewed state restrictions on business and fears of a difficult autumn and winter.

The Covid Fiscal Crisis Is About Debt and Taxes
Joseph C. Sternberg (WSJ) Jul 15, 2020
The only thing worse than how we'd pay for pandemic relief is what will happen when, inevitably, we don't.

Hard for US-China trade to survive a shooting war
Urban C. Lehner (AT) Jul 15, 2020
Can the US and China be both serious rivals and big-time trade partners?

The Next Phase of the Crisis: Further Action Needed for a Resilient Recovery
Kristalina Georgieva (IMF) Jul 15, 2020
I believe that despite the pain and suffering that the pandemic has caused, we can aspire to transform our world.

Can Europe Build a Single Capital Market out of the COVID crisis?
Rebecca Christie (Brink) Jul 15, 2020
This weekend, EU leaders will meet for the first time in person since COVID-19 began to hammer out an $800 billion recovery fund for EU countries. Leaders will use the summit to try to find common ground on how to move ahead.

Coronavirus crisis may accelerate Japan's structural reform
Eva (Yiwen) Zhang (PIIE) Jul 15, 2020
Prime Minister Shinzo Abe has for years employed fiscal and monetary stimulus tools to revive Japan's stagnant economy. But the so-called "third arrow" in his quiver, achieving structural reforms, has been less than successful beyond bringing more women into the workforce. Now, the COVID-19 health crisis may give Japan a chance to expand structural reform by using digital transformation, which could give a boost to economic growth over the long term while incurring some costs in the short run.

An EU tax crackdown is essential for sustainable growth
Paolo Gentiloni (FT) Jul 15, 2020
Information sharing and an improved blacklist will make this possible.

Britain's Brexit boosterism masks slow progress in talks with EU
Martin Sandbu (FT) Jul 15, 2020
Lack of trust between Brussels and London is a barrier to a breakthrough.

Why Covid has lessons for compound interest
Simon Edelsten (FT) Jul 15, 2020
Choose companies that stick to what they are good at and make sure you understand how much debt they are carrying.

Investors pull green levers to reshape energy sector
Alice Ross (FT) Jul 15, 2020
Selective stockpicking, boycotts and engagement are all methods gaining ground among environmental stakeholders.

Doubts cloud China's post-coronavirus recovery
Thomas Hale, Xinning Liu, and Wang Xueqiao (FT) Jul 15, 2020
Return to growth expected in Q2 but questions remain about health of economy.

How oil majors bought into green energy
Nick Butler (FT) Jul 15, 2020
A tipping point has been reached as investment in renewables technology gathers pace.

ECB's pledge to encourage bank mergers is falling on deaf ears
Martin Arnold (FT) Jul 15, 2020
M&A rumours make for good gossip but lenders are better off focusing on self-improvement.

G20, Heal Thyself
Jeffrey D. Sachs (Project Syndicate) Jul 15, 2020
As the world's largest economies, the G20's members have one overriding responsibility at their finance ministers' upcoming meeting: to agree on actions to suppress the pandemic. Ensuring effective public-health measures is today's essential economic policy.

How Does Monetary Policy Affect the Asset Management Industry? Evidence from China's Fund Managers
John Ammer, John Rogers, Gang Wang, and Yang Yu (VoxChina) Jul 15, 2020
We conduct a novel systematic textual analysis of the discussion in the quarterly reports of China fund managers, from which we infer their near-term expectations for Chinese monetary policy. We show that this aggregate index of manager expectations performs well as a forecast of Chinese monetary policy, that fund managers act on these expectations, and that correctly anticipating shifts in policy improves fund performance; thus, manager skill is an important determinant of fund returns.

COVID-19, central bank digital currencies, and other payments instruments
Biagio Bossone and Harish Natarajan (VoxEU) Jul 15, 2020
Governments and economists are now focused on the macroeconomic policies that can support economies during the Covid-19 pandemic. Yet, for policies to be effective and economies to function, payment systems and services must operate efficiently, reliably, and securely. The third column of this series analyses the role that a central bank digital currency can play in this context, and outlines the key steps required for its successful implementation. In addition, the column proposes improvements to the existing payments infrastructure to ensure continued operability, especially in times of emergency.

Predictable financial crises
Robin Greenwood, Samuel G. Hanson, Andrei Shleifer, and Jakob Ahm Sørensen (VoxEU) Jul 15, 2020
There is a long-standing debate on whether financial crises can be predicted. This column draws on a chronology of past financial crises and data on credit and asset prices for a panel of 42 countries between 1950-2016 and finds that if there is a large credit expansion with an asset price boom, then financial crises are highly predictable. These results are used to motivate a simple indicator that identifies periods of potential credit-market overheating. The indicator is shown to predict past crises in advance, suggesting that policymakers have time to act and take prophylactic policy interventions.

The Fog of Numbers
Òscar Jordà, Noah Kouchekinia, Colton Merrill, and Tatevik Sekhposyan (FRBSF Econ Letter) Jul 15, 2020
In times of economic turbulence, revisions to GDP data can be sizable, which makes conducting economic policy in real time during a crisis more difficult. A simple model based on Okun's law can help refine the advance data release of real GDP growth to provide an improved reading of economic activity in real time. Applying this to data from the Great Recession explains some of the massive GDP revisions at that time. This could provide a guide for possible revisions to GDP releases during the current coronavirus crisis.

Apple ruling strengthens case for tax crackdown
FT View Jul 16, 2020
Annulment of EU state aid action is a big setback for Vestager.

The US is having a bank-shaped recovery
Gillian Tett (FT) Jul 16, 2020
Shorthand symbol suggests economy's direction and highlights power of Federal Reserve.

The ESG concept has been overhyped and oversold
Brad Cornell (FT) Jul 16, 2020
Companies and investors should recognise there are costs to being good in many situations.

Behind the recovery, China's economy is wobbling
Jamil Anderlini (FT) Jul 16, 2020
Beijing is using the same old tools to revive an economy pummelled by coronavirus.

The IMF should turn to special drawing rights in its Covid-19 response
Yi Gang (FT) Jul 16, 2020
An issue of SDRs would help developing countries inadequately covered by current financial safety nets.

Crisis offers a chance to rewrite accounting to include impact
Ronald Cohen (FT) Jul 16, 2020
Investors need to know companies' social and environmental effects.

OPEC+ pumps up but oil still in Covid danger
Tim Daiss (AT) Jul 16, 2020
Cartel agrees to boost production from August but oil prices could collapse again if the pandemic is not soon contained

The Economy Won't Get Healthier While America Gets Sicker
Alan S. Blinder (WSJ) Jul 16, 2020
Consumers don't venture out if they feel unsafe. To avert a double-dip recession, crush the virus.

Can the global recovery be sustained even as the pandemic rages?
Uri Dadush (Bruegel) Jul 16, 2020
The global economy is showing signs of recovery from the economic crisis caused by COVID-19, though the spread of the coronavirus is accelerating in some countries. In this circumstance, policymakers must weigh up the trade-offs involved in dealing with the pandemic while easing lock downs and sustaining economic activity. Differences in age structures, urbanisation rates and other factors will inform decision making in different countries.

Five Charts That Illustrate COVID-19's Impact on the Middle East and Central Asia
IMF Jul 16, 2020
The Middle East and Central Asia countries acted quickly and decisively in response to COVID-19. Despite their efforts, the pandemic has inflicted heavy economic damage on the region. Growth projections have been revised down since the April 2020 Regional Economic Outlook, the IMF says in its latest update to the report.

China's Deepening Geopolitical Hole
Minxin Pei (Project Syndicate) Jul 16, 2020
The UK's decision to ban Huawei from its 5G networks is only the latest diplomatic setback for China. So, as China's leaders ponder how to respond, they should heed the first rule of holes: when you are in one, stop digging.

Weighting bias and inflation in the time of Covid-19
Pascal Seiler (VoxEU) Jul 16, 2020
Sharp changes in consumer expenditure may bias inflation during the Covid-19 pandemic. This column measures the effects of the Covid-induced weighting bias on the Swiss consumer price index by quantifying the changes in consumer spending using public data from debit card transactions, updating CPI basket weights and constructing an alternative 'Covid price index'. There is evidence that Covid inflation was higher during the lockdown than suggested by CPI inflation. Persistent 'low-touch' consumer behaviour may lead to inflation being underestimated through to the end of 2020.

Covid 19, globotics, and development
Richard Baldwin and Rikard Forslid (VoxEU) Jul 16, 2020
Changes in working patterns inspired by Covid-19 may transform the development path of many economies. The column argues that, as we adjust to remote working, a new era of telemigration may drive demand for globalisation in services. This may be good news for many emerging economies, because they can exploit their comparative advantage in labour without having to manufacture goods.

To Pay for the Pandemic, Dry Out the Tax Havens
David L. Carden (FP) Jul 16, 2020
Corporations and the wealthy have stashed away as much as $36 trillion in untaxed money. It's time to bring the hammer down.

Covid-19 threatens the fight against global poverty
FT View Jul 17, 2020
Productivity gap between rich and poor countries will probably widen.

Reality punctures Britain's Brexit balloon
FT View Jul 17, 2020
Costly border plans undermine the economic case for leaving the EU.

Covid-19 aggravates adverse underlying trends
Martin Wolf (FT) Jul 17, 2020
Huge fiscal challenges await the UK due to rising public debt.

Profits are racing but it is still hard to really back the banks
Robert Armstrong (FT) Jul 17, 2020
Fund managers had hoped that lenders would become more solid investments post-Lehman.

Will this be the century of the immigrant?
Janan Ganesh (FT) Jul 17, 2020
As birth rates shrink, the value of mobile, working-age people rises.

As US dollar hits more turbulence, yuan catches tailwind
Uwe Parpart (AT) Jul 17, 2020
Out-of-control US infections weigh on greenback.

Dollar's pain not yet the yuan's gain
William Pesek (AT) Jul 17, 2020
While markets are rightly losing faith in the US greenback, China's yuan is not yet a safe haven alternative.

China's GDP: What it means and why it matters
Michael Pettis and Shashwat Koirala (OECD Ecoscope) Jul 17, 2020
Peculiarities of GDP in China.

Boosting the resilience of Europe's financial system in the coronavirus crisis
Joost Bats, Aerdt Houben and Dirk Schoenmaker (Bruegel) Jul 17, 2020
Europe has a heavily bank-based financial structure, but bank-based financial structures are associated with higher systemic risk than market-based financial structures. The higher level of systemic risk in Europe suggests caution when pursuing policies that stimulate risk taking and debt creation by banks, especially in the wake of COVID-19. Priority should be given to financial diversification and equity finance.

China's targeted corporate shopping spree to continue, especially in Europe
Alicia García-Herrero and Jianwei Xu (Bruegel) Jul 17, 2020
Expect small, below the radar deals to continue to flourish and, by the same token, Europe to lose part of its edge in industrial technology and other strategic sectors.

America's Compromised State
Angus Deaton (Project Syndicate) Jul 17, 2020
The lack of a coordinated national response to the COVID-19 pandemic in the United States has predictably resulted in an unmitigated economic and public-health disaster. The problem is and always has been that those in a position to do something about such crises do not speak for most Americans.

The Future of Transatlanticism Is Up to Europe
Sigmar Gabriel (Project Syndicate) Jul 17, 2020
European leaders who speak of a need for "fundamental" change in the transatlantic alliance are missing the point. The relationship with the United States has already been irreversibly altered, and what most needs to be updated is Europe's conception of itself.

Keep Borders Open
Pinelopi Koujianou Goldberg (Project Syndicate) Jul 17, 2020
One of the best ways for advanced economies to help poorer countries is to discourage restrictions on trade and immigration and encourage capital flows to countries that need them the most. And they have good reason to do so, as such policies would benefit rich countries as well.

What's the Matter with South America?
Edmund S. Phelps and Juan Vicente Sola (Project Syndicate) Jul 17, 2020
Though it is unclear which caused which, there is no doubt that South America's embrace of traditional values and corporatism has prevented it from reaching its economic potential. Whether the region can achieve prosperity in the future will depend on its willingness to stop worrying and learn to love free enterprise.

COVID-19: A new challenge for the euro area
Anne-Laure Delatte and Alexis Guillaume (VoxEU) Jul 17, 2020
There was a risk of another euro crisis in Spring 2020. Yet, after a massive sell-off of peripheral bonds, the markets have stabilised. This column analyses the impact of events over the last months on euro area sovereign bond spreads. It finds that differences in healthcare capacity are reflected in bond prices, markets prefer fiscal transfers to loans-based financial assistance programs, and that ECB speeches have stronger effects than deeds during the crisis episode. Of all the euro area members, Italian spreads benefited most from the recent policy interventions.

The big bang: Stock market capitalisation in the long run
Dmitry Kuvshinov and Kaspar Zimmermann (VoxEU) Jul 17, 2020
While short-run deviations of the stock markets from the economy, such as the current COVID-induced gap, are common throughout history, stock market size should co-evolve with real activity in the long run. This column uses data from 1870-2015 for 17 countries to assess this prediction empirically. It finds that stock market size and GDP were closely linked until the 1980s but diverged markedly thereafter, with surging equity prices accompanied by stagnating growth. This long-run divergence is historically unprecedented and can be largely explained by a profit shift towards listed firms at the time of historically low discount rates.

Five lessons from tracking the global pandemic economy
Long Chen and Michael Spence (VoxEU) Jul 17, 2020
The pandemic economy has exhibited sharp and, in many cases, deep contractions across a wide range of countries. Mobility has turned out to be a key factor in the co-evolution of the economy and the pandemic. This column estimates the magnitude of daily economic contractions by constructing a pandemic economy tracker based on mobility data and makes an important set of findings. First, speed of policy response is crucial in successfully navigating the pandemic economy. Second, it is substantially more difficult for larger economies to control the virus. Third, stock markets have generally rebounded faster than the economies they support. Finally, third wave countries, primarily emerging and developing economies, are having difficulty controlling the virus without substantial mobility restrictions and contractions.

Investors need to decide whether the risk of inflation is real
Michael Mackenzie (FT) Jul 18, 2020
Hedges find favour but previous predictions of price rises have been wide of the mark.

Housing was the business cycle
Economist Jul 18, 2020
Residential investment is not the macroeconomic force it used to be.

China v America
Economist Jul 18, 2020
Trade without trust.

The end of the Arab world's oil age is nigh
Economist Jul 18, 2020
Pain will be felt across the region.

What Wall Street's results tell you about America's economy
Economist Jul 18, 2020
The panic has been calmed, and the economic pain deferred. But uncertainty still abounds.

10 July 1940, Vichy, France: Lessons on dynasties from a democratic suicide
Jean Lacroix, Pierre-Guillaume Méon, and Kim Oosterlinck (VoxEU) Jul 18, 2020
Rising populism has raised concerns that democracies may give in to authoritarian pressure. On 10 July 1940, exactly 80 years ago, the French parliament passed an enabling act granting full power to Marshal Philippe Pétain. Analysing how the Members of Parliament voted, this column shows that MPs belonging to a pro-democratic dynasty were more likely to oppose the act. Dynastic politicians may contribute to stabilising democracies by better resisting peer pressure.

Liquidity crisis: Keeping firms afloat during Covid-19
Fabiano Schivardi and Guido Romano (VoxEU) Jul 18, 2020
The COVID-19 crisis has induced a sharp drop in cash flow for many firms, possibly pushing solvent but illiquid firms into bankruptcy. This column presents a simple method to determine the number of firms that could become illiquid, and when. The authors apply this method to the population of Italian businesses and find that at the peak, around 200,000 companies (employing 3.3 million workers) could become illiquid due to a total liquidity shortfall of €72 billion euros. It is essential that policymakers shelter businesses by acting quickly, especially if there is a 'second peak' after the summer.

Tax rises will be needed to fill Britain's fiscal hole
FT View Jul 19, 2020
A poorer country needs to find new funds to pay for public services.

US Covid-19 surge could trigger a double-dip recession
Gavyn Davies (FT) Jul 19, 2020
Markets are ignoring the possibility that severe lockdowns may be needed in many states.

Zombies are the least of Britain's small business problems
Jonathan Ford (FT) Jul 19, 2020
Rishi Sunak's challenge now is to keep as many businesses as possible alive until the economy recovers.

Europe and US can still compete with Chinese tech
Rana Foroohar (FT) Jul 19, 2020
The first step should be easy: create a transatlantic technology detente.

Which Country Will Triumph in the Post-Pandemic World?
Ruchir Sharma (NYT) Jul 19, 2020
Hint: It's not the United States or China.

Bringing the Factories Home
Arthur Herman (WSJ) Jul 19, 2020
Any new industrial policy has to make the U.S. less vulnerable to Chinese suppliers.

There's no going back to the pre-pandemic economy. Congress should respond accordingly.
Steve Case (WP) Jul 19, 2020
We can't just turn back the clock to February.

The causal effects of R&D grants
Pietro Santoleri and Andrea Mina (VoxEU) Jul 19, 2020
Direct public support for business R&D is common practice in many countries, but evidence on its causal effects has been mixed. This column exploits discontinuity in the assignment mechanism of the first large-scale European R&D grant programme to assess the impact of the policy. The results indicate that direct grants have positive and sizable effects on a wide range of firm-level outcomes suggesting that R&D grants are an effective policy tool.

Negative interest rates cannot save indebted economies
Jacques de Larosière (FT) Jul 20, 2020
Setting the price of money below zero creates more problems than it purports to solve.

A flexible inflation target is not a panacea
Wolfgang Münchau (FT) Jul 20, 2020
Central banks are attracted to a policy that would give them more flexibility during a crisis, but it has downsides.

China's central bank has better stimulus options than the Fed
Ed Cole (FT) Jul 20, 2020
PBoC could supplement its use of credit channels with the 'whatever works' approach of western institutions.

Rating agencies owe the market more transparency
UK Sinha (FT) Jul 20, 2020
In a crisis, investors want information about relative strengths and weaknesses not just downgrades.

Developing nations squeezed as virus fuels public spending
Jonathan Wheatley (FT) Jul 20, 2020
Inflows to emerging market bonds offer funds for healthcare but increase indebtedness.

Businesses Are Supposed to Cut Debt in a Downturn. Why Not Now?
Matt Phillips (NYT) Jul 20, 2020

Dominant Currencies and the Limits of Exchange Rate Flexibility
Gustavo Adler, Gita Gopinath and Carolina Osorio Buitron (IMF) Jul 20, 2020
The prevalence of dominant currencies like the US dollar in firms' pricing decisions alters how trade flows respond to exchange rates.

Inside Jordan's Fight to Tackle COVID-19
IMF Jul 20, 2020
In a conversation with IMF Country Focus, Jordan's Minister of Finance Mohamad Al-Ississ digs deeper into the economic impact of COVID-19 on his country, policies they've pursued to limit the fallout and protect the vulnerable, and how rapid IMF financing has softened the blow of the pandemic and allowed the government to invest in critical areas during the crisis.

Why is the World So Stingy?
Charles Kenny (CGD) Jul 20, 2020
The constant income cutoff for recipients, and the rising income cutoff for donors.

After COVID-19: How to Pull Off the SDG Hat-Trick?
Christopher Hoy and Andy Sumner (CGD) Jul 20, 2020
The COVID-19 pandemic has resulted in the largest economic downturn since the great depression, pushing tens, potentially hundreds, of millions of people back into extreme poverty.

China Has Blown Its Historic Opportunity
Arvind Subramanian (Project Syndicate) Jul 20, 2020
In the wake of the COVID-19 pandemic, China could have become the development bank, central bank, and medical supplier to the world. By choosing unprovoked aggression over enlightened generosity, President Xi Jinping's regime has squandered that historic opportunity and possibly also revealed its true character.

The Debt Predators
Katharina Pistor (Project Syndicate) Jul 20, 2020
The Debt Predators
The Federal Reserve's efforts to stabilize markets have touched off an even bigger borrowing binge than corporate America was already on.

Technological progress and hollowing-out of the middle-skilled labour share of income
Mai Dao, Mitali Das, and Zsoka Koczan (VoxEU) Jul 20, 2020
The declining labour share of income is a global phenomenon that has affected primarily low-skilled and middle-skilled workers. This column examines the effects of trade and technology on the labour shares of different skill groups using a new dataset covering both advanced and developing economies. Both trade and technology have contributed to the declining labour share of middle-skilled workers but have had little effect on low-skilled and high-skilled labour. Policies should be designed with the goal of spreading the benefits of globalisation to the entire labour force.

Raising the inflation target: Assessing the extra room
Jean-Paul L'Huillier and Raphael Schoenle (VoxEU) Jul 20, 2020
Interest rates have remained close to zero in many economies since the Great Recession. This column explores the policy of raising the inflation target in order to generate greater macroeconomic 'room'. Central banks face constraints when trying to achieve this extra room. The rationale is that by raising the inflation target, the private sector responds by increasing price flexibility. This lowers the potency of monetary policy and thereby endogenously removes part of the room generated by the higher target.

The trade-off between economic and health outcomes of the COVID-19 epidemic
Martin Eichenbaum, Sérgio Rebelo, and Mathias Trabandt (VoxEU) Jul 20, 2020
Traditional epidemiology models generally don't allow for interactions between peoples' economic decisions and rates of infection, limiting their usefulness for forecasting and policy analysis. This column introduces a framework for combining economics and epidemiology in a way that allows for these interactions and uses the model to address the challenge of designing and implementing policies that improve the trade-off between economic and health outcomes during an epidemic. The results suggest that testing and quarantine policies should play a central role in minimising the social costs of the COVID-19 crisis.

Contagious protests
Rabah Arezki, Alou Adesse Dama, Simeon Djankov, and Ha Nguyen (VoxEU) Jul 20, 2020
Street protests propagate across borders. This column provides evidence for contagious protests, using both actual and news-based measures of protests. The results point to social media as a vehicle for contagion.

The euro needs sound and pragmatic long-term policies more than ever
Heikki Oksanen (VoxEU) Jul 20, 2020
One of the many reasons for slow progress with reforming the euro has been a lack of understanding of the links between the fiscal and monetary domains. This column argues that the Covid-19 shock necessitates a significant extension of the time horizon for fiscal policy. Sound public finances means long-term sustainability of government finances, which is required for refunding public debt at acceptable interest rates. Bonds issued by the solvent governments are needed for the operations of the Eurosystem in setting the monetary stance and in acting as the lender of last resort for euro area governments, which is necessary for preventing liquidity shortages from developing into a general financial crisis.

Trump's Trade Policy Is Making America Stronger
Robert E. Lighthizer (FA) Jul 20, 2020
A response to critics.

China Can Buy Influence, but It Can't Buy Love
Elisabeth Braw (FP) Jul 20, 2020
The Chinese government could learn a thing or two about soft power from a long-gone and much-maligned socialist regime: East Germany.

A World Turned Upside Down for Retailers
Tim Quinlan and Shannon Seery (WF Econ Group) Jul 20, 2020
In this special report, we analyze how retail sales performed in the first months of the pandemic to inform the outlook for consumer spending amid the resurgence of COVID-19 cases.

The EU pandemic fund will transform the investment landscape
Sabrina Khanniche (FT) Jul 21, 2020
Greater stability — and a new breed of triple A bonds — should boost markets and the euro.

Two cheers for Europe's €750bn recovery fund
Ben Hall (FT) Jul 21, 2020
The agreement is far from perfect but the EU has moved with speed and resolve.

The mysterious death of the market rentier
Robin Harding (FT) Jul 21, 2020
A financial whodunnit with momentous investment implications for the young and old.

The UK cannot afford to self-isolate from China
Carolyn Fairbairn (FT) Jul 21, 2020
Business supports greater engagement coupled with evidence-based safeguards.

Europe Takes the Debt Plunge
WSJ Jul 21, 2020
EU leaders agree to issue major common debt for the first time.

How investing in health has a significant economic payoff for developing economies
Jaana Remes, Matt Wilson, and Aditi Ramdorai (Brookings) Jul 21, 2020
As developing countries navigate and eventually emerge from the COVID-19 crisis, we have a once-in-a-generation opportunity to rethink the role of health in a post-pandemic future. Making health a priority and shifting focus to areas with highest return can improve resilience, reduce health inequity, and promote greater individual, social, and economic well-being.

Government-guaranteed bank lending in Europe: Beyond the headline numbers
Julia Anderson, Francesco Papadia, and Nicolas Véron (PIIE) Jul 21, 2020
In response to the COVID-19 shock, European countries have introduced unprecedented programs of loan guarantees and other forms of credit support for their businesses. In March 2020 the European Commission relaxed its strict rules on state aid, allowing EU member states to channel needed funds through these unprecedented national coronavirus aid schemes. Concerns have since been raised that richer, less indebted member countries have the fiscal capacity to help their businesses more. Unequal support would distort competition in the EU single market, providing an unfair advantage to firms in better-endowed countries, for example, in the form of cheap funding. At the extreme, the crisis would wipe out all but the most-subsidized firms.

A Better Globalization
Javier Solana (Project Syndicate) Jul 21, 2020
Globalization has given rise to legitimate frustrations and concerns, which can't be assuaged simply by recalling the enormous benefits it has brought. But, rather than trying to roll back globalization, we have no choice but to try to make it work better.

Turkey's Approaching Crossroads
Carl Bildt (Project Syndicate) Jul 21, 2020
Turkish President Recep Tayyip Erdogan has resorted to public spectacles to distract attention from his slipping support and economic mismanagement. But one way or another, fundamental change has become inevitable.

Is a China-US "Rivalry Partnership" Possible?
Mohamed A. El-Erian (Project Syndicate) Jul 21, 2020
One must hope that China and the United States will eventually arrive at an understanding that great-power competition does not preclude cooperation to resolve major global challenges. The main challenge will be to avoid a damaging derailment during what is likely to be a long and bumpy journey toward this destination.

New Models for a New World
Bertrand Badré , Ronald Cohen, and Bruno Roche (Project Syndicate) Jul 21, 2020
As the world struggles to overcome from the COVID-19 crisis, recasting multilateralism and reforming capitalism have become crucial tasks. Both need to become force multipliers in a new system of dynamic value creation. But the fundamental purpose and underlying principles of each will first need to be redefined.

Canada's Long Road to Recovery Begins
Nick Bennenbroek and Jen Licis (WF Econ Group) Jul 21, 2020
Incoming data suggest the Canadian economy bottomed in April and started to gradually recover in May. While there are lingering uncertainties, progress in containing COVID-19 as well as substantial fiscal stimulus from the Canadian government suggest the economic recovery could persist, and gather some momentum over time.

Don't just kill off zombie jobs, create better ones
Sarah O'Connor (FT) Jul 22, 2020
Governments should demand improved working conditions in sectors that are growing.

Recovery fund is a huge breakthrough for the EU
FT View Jul 22, 2020
For market perceptions of the viability of the euro, €750bn deal is a game-changer.

Investors can use their weight to save the planet's resources
Yerlan Syzdykov (FT) Jul 22, 2020
Countries calling on capital markets should be asked to make sustainability pledges.

Big Oil can play big role in frontier markets' energy transition
Fareed Mohamedi (FT) Jul 22, 2020
Large E&P groups have capabilities critical in making projects in developing countries work.

The urgent need for a new US relief package
FT View Jul 22, 2020
Partisan wrangling risks triggering a wave of business defaults.

EU crosses the Rubicon with its emergency recovery fund
Martin Sandbu (FT) Jul 22, 2020
European federalists have more reason than frugal northerners to be pleased.

EU pandemic recovery package stokes rule-of-law dispute
Michael Peel, Valerie Hopkins, Guy Chazan, and James Shotter (FT) Jul 22, 2020
Hungary's leader claims 'huge victory' by stopping effort to make handouts dependent on good governance.

A Growth Agenda for Italy Requires Giving Bureaucrats the Boot
Adam O'Neal (WSJ) Jul 22, 2020
To avoid a lost quarter-century, Europe's third-largest economy needs a radically smaller state.

Six Ways COVID-19 Will Shape the Future of Education
Shelby Carvalho and Susannah Hares (CGD) Jul 22, 2020
Most of us have been living with closed schools and some version of lockdown for four months now. For all the reimagining of education in the 21st century, nobody predicted that the greatest disruption of all would come from a virus. As education policymakers all over the world grapple with distance learning provision and safe school reopening, they will no doubt also be thinking about what the pandemic means for education in the longer term. We examine six ways COVID-19 is likely to shape the future of education.

Building Back Better: Creating Resilience in Critical Supply Chains While Supporting Global Development
Prashant Yadav, Ranil Dissanayake and Charles Kenny (CGD) Jul 22, 2020
How resilient? To what? And at what (efficiency?) cost?

The impact of the crisis on smaller companies and new mechanisms for non-performing loans
Alexander Lehmann (Bruegel) Jul 22, 2020
The ongoing recession will result in a fresh surge in non-performing loans (NPLs) once payment holidays and moratoria end later this year. NPL investors played a valuable role in tackling the stock of problem loans from the last crisis, but in the aftermath of the current recession more complex financial restructuring will be needed. Governments should facilitate the refinancing of distressed but viable companies, possibly through a special regime for SMEs.

Europe's Labor Measures: Short-term Gain, Long-term Pain?
Nicola Mai and Tiffany Wilding (PIMCO) Jul 22, 2020
European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.

East Asia's New Edge
Kishore Mahbubani (Project Syndicate) Jul 22, 2020
A deep determination to battle against great odds may explain why East Asia has so far responded much better to the COVID-19 pandemic than most Western countries. And if the region's economies also recover faster, they may well offer a glimmer of hope to a world currently drowning in pessimism.

Europe Rescues Itself
Philippe Legrain (Project Syndicate) Jul 22, 2020
Once again, the European Union has shown that it is capable of rising to the occasion and coming to the assistance of Europeans in a time of need. A groundbreaking agreement for a new EU-financed recovery fund may not satisfy all of Europe's needs; but it is precisely what the bloc needs now.

From American to European Exceptionalism
Stephen S. Roach (Project Syndicate) Jul 22, 2020
An overvalued US dollar is ripe for a sharp decline, owing to America's rapidly worsening macroeconomic imbalances and a government that is abdicating all semblance of global – or even domestic – leadership. And the European Union's approval of a joint rescue fund is likely to accelerate the euro's rise.

Higher Education and Corporate Innovation
Dongmin Kong, Bohui Zhang, and Jian Zhang (VoxChina) Jul 22, 2020
This paper investigates the impact of higher education on corporate innovation using a difference-in-differences approach. We find that Chinese firms in skilled industries generate better innovation outcomes, especially firms headquartered in provinces with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Also, we show that technological innovation is a mechanism through which higher education affects productivity growth and thus the economy.

Monetary easing, leveraged payouts and lack of investment
Viral Acharya and Guillaume Plantin (VoxEU) Jul 22, 2020
In the aftermath of the 2008 Global Crisis, ultra-low US policy rates have been coincident with significantly large positive shareholder payouts by US firms while investment growth has failed to keep pace with firm assets, leading to assertions of a causal link between the two trends. This column uses a parsimonious model to explain how a socially undesirable yet shareholder value-maximising crowding out of business investment by payouts can arise as an unintended consequence of aggressive monetary easing.

COVID-19 in emerging markets: Firm-survey evidence
Thorsten Beck, Burton Flynn, Mikael Homanen (VoxEU) Jul 22, 2020
Most of the evidence on firm-level impact of COVID-19 so far has been for advanced economies. Using survey responses from early April across nearly 500 listed firms in ten emerging markets, this column reveals that the vast majority of firms have been negatively affected by COVID-19 and reacted by reducing investment rather than payrolls. Moreover, it finds that there is a surprising degree of support vis-à-vis employees, customers, other stakeholders and broader society. Stakeholder-centric firms experienced lower stock price declines during the crisis drawdown.

EU banks should heed lessons of 2008 crisis
FT View Jul 23, 2020
European lenders must tackle bad loans now instead of waiting.

A new age of financial repression may soon be upon us
Russell Napier (FT) Jul 23, 2020
The battle to inflate away debts will be long and probably punishing for stocks and savers.

Learning from the Germans
Frederick Studemann (FT) Jul 23, 2020
Is the country's apprentice system as good as its admirers believe?

UK financiers' flawed call for grants not loans
Chris Giles (FT) Jul 23, 2020
Both are on offer to companies in the pandemic but Sunak has to strike a delicate balance.

What soaring auction prices say about the Covid-19 economy
Gillian Tett (FT) Jul 23, 2020
Fine art and famous sneakers are flying out the door as the rich get richer.

Every penny will count in the recovery
Dag Detter and Hanan Salem (FT) Jul 23, 2020
Sovereigns should pay more attention to the public sector balance sheet and the quality of their financial and asset management.

Out of control US virus situation sinks dollar
Uwe Parpart (AT) Jul 23, 2020
Impact of the stepped-up anti-China campaign remains negligible.

Governments must beware the lure of free money
Economist Jul 23, 2020
Budget constraints have gone missing. That presents both danger and opportunity.

Returning Greece's economy to a stronger, sustained and inclusive recovery from the COVID-19 shock
Mauro Pisu and Tim Bulman (OECD Ecoscope) Jul 23, 2020
COVID-19 creates extraordinary uncertainty. While some parts of the economy have the potential to rebound quickly, others are likely to face an extended period of weak demand.

The Open Secret to Reopening the Economy
Anne O. Krueger (Project Syndicate) Jul 23, 2020
Areas that eased their initial COVID-19 lockdowns and now have surging infection rates are a testament to all that has gone wrong in the pandemic. The lesson from day one still holds: until the virus is defeated, there can be no return to normal.

Indonesia's COVID-19 Response Pivots to Support Economic Recovery
Jefferson Ng (Diplomat) Jul 23, 2020
Indonesia's restructured COVID-19 task force has a clear economic bias.

The supply-side impact of COVID-19
Dimitris Papanikolaou and Lawrence D.W. Schmidt (VoxEU) Jul 23, 2020
COVID-19 has massively disrupted the supply side of the world economy, shutting down entire industries. This column analyses how these disruptions affected different types of firms and workers by looking at how effectively different sectors can shift to remote work. While the major policy interventions in the US have treated all types of business as equivalent, industries which are not able to do their work remotely have been hit much harder than business that can. This cross-sectional dispersion shows up across a variety of measures, including changes in employment, revenue projections, likelihood of default, current liquidity, and stock returns. Going forward, aid that targets disrupted sectors may be a more cost-effective means to alleviate the impacts of COVID-19.

COVID-19: How central banks, academia, and the private sector can collaborate
Isaiah Hull (VoxEU) Jul 23, 2020
The COVID-19 pandemic has placed pressure on central banks and other public institutions to monitor the economy at a higher frequency than usual. However, much of the data and expertise needed to perform such monitoring is concentrated in the private sector and academia. This column describes the effort made by the Swedish Riksbank to alleviate this bottleneck by opening up a collaborative public channel through which academics and the private sector can directly contribute to the research in real time.

Counting China
Arunabh Ghosh (Aeon) Jul 23, 2020
By rejecting sampling in favour of exhaustive enumeration, communist China's dream of total information became a nightmare

EU sovereign bonds can reshape the bloc's future
FT View Jul 24, 2020
Safe assets denominated in euros could help it to displace the dollar.

Dividends are not dead — but your strategy might need recharging
Merryn Somerset Webb (FT) Jul 24, 2020
After a dire year for corporate payouts, investors should take a closer look at earnings.

Recovery, brought to you by the letter V, or maybe W
Katie Martin (FT) Jul 24, 2020
Investors are obsessed with finding visual descriptions for economic trajectories.

What we have learnt so far from US second-quarter earnings
Mamta Badkar (FT) Jul 24, 2020
Results have generally come in brighter than expected but investors are still primed for disappointment.

Risks of failure in $6.6tn forex market at record high, study shows
Eva Szalay (FT) Jul 24, 2020
Dominant settlement service has not kept pace with market evolution, says its CEO.

China's tech juggernaut steams ahead
James Kynge (FT) Jul 24, 2020
With a backlash growing in the US, India and parts of Europe, a bipolar world is emerging.

C.E.O.s Are Qualified to Make Profits, Not Lead Society
N. Gregory Mankiw (NYT) Jul 24, 2020
An old debate over the proper role of C.E.O.s has entered the political arena. But chief executives aren't well equipped to take on broad social issues

Time for a New—or Old—Development Finance Model
Charles Kenny, Scott Morris and Vijaya Ramachandran (CGD) Jul 24, 2020
It is five years since then World Bank president Jim Kim suggested that development finance institutions could go from mobilizing billions to trillions as part of financing needed for the Sustainable Development Goals. And it is two years since IFC promised 40 percent of its business to the world's poorest countries—IDA recipients—and Congress passed legislation committing the new US Development Finance Corporation to focus on low-and lower middle-income countries (LICs and LMICs). We worried, two years ago, that ramping up development finance business in the poorest countries would be hard. So far, there is every reason to think that our concern was justified. And it suggests we need to move forward—or backward—in what we expect development finance institutions (DFIs) to do in terms of financing private sector development in the world's poorest countries.

COVID-19 and Protectionism: The Worst May Be Yet to Come
Antonio Ortiz-Mena (Brink) Jul 24, 2020
Just as COVID-19 has spread across the globe, so have protectionist measures. Governments have enacted measures to allegedly safeguard their economies and health systems. While some actions are reasonable, others may respond more to political expedience or the preferences of interest groups.

The Euro Crisis's New Clothes
Hans-Werner Sinn (Project Syndicate) Jul 24, 2020
The European Union's new €750 billion recovery fund is intended to tackle crises such as collapsing manufacturing output in southern member states like Spain and Italy. But money cannot solve the problem of distorted relative goods prices within the eurozone.

China's Fiscal Dilemma
Yu Yongding (Project Syndicate) Jul 24, 2020
The Chinese government is likely to face a tricky economic policy choice in the second half of this year. If it loosens its fiscal stance, public finances will worsen significantly. But if it cuts expenditure to offset the pandemic-related revenue shortfall, growth will be lower, with dire consequences.

Unequal consequences of COVID-19 across age and income
Michèle Belot, Syngjoo Choi, Egon Tripodi, Eline van den Broek-Altenburg, Julian C. Jamison, and Nicholas W. Papageorge (VoxEU) Jul 24, 2020
Almost all countries in the world have implemented drastic measures to contain the COVID-19 pandemic. This column documents the effects of the epidemic and containment measures using representative individual data on age and income from three Western and three Asian countries. Younger groups in all countries have been affected more, both economically and non-economically. Differences across income groups are less clear and less consistent across countries. The young are less compliant and supportive of the containment measures, no matter how hard they have been affected by them.

Economic uncertainty in the wake of the COVID-19 pandemic
David E. Altig, Scott Baker, Jose Maria Barrero, Nicholas Bloom, Philip Bunn, Scarlet Chen, Steven Davis, Julia Leather, Brent Meyer, Emil Mihaylov, Paul Mizen, Nicholas Parker, Thomas Renault, Pawel Smietanka, and Gregory Thwaites (VoxEU) Jul 24, 2020
Measures of economic uncertainty derived from statistical models are not well suited to quickly capture shifts associated with sudden, surprise developments like the COVID-19 crisis, thus necessitating forward-looking measures. This column considers several such forward-looking indicators of economic uncertainty for the US and UK before and during the COVID-19 pandemic. All indicators show huge jumps in uncertainty in reaction to the pandemic and its economic fallout. Most indicators reach their highest values on record, but the extent of increases and time paths differ.

Leaning against the wind: An empirical cost-benefit analysis
Luis Brandao-Marques, Gaston Gelos, Machiko Narita, and Erlend Nier (VoxEU) Jul 24, 2020
There is no consensus in the literature on the optimal use of macroprudential policy to 'lean against' financial vulnerabilities. This column introduces a new empirical approach to study the effects of both macroprudential and monetary policies in response to looser financial conditions. It finds that tighter macroprudential policies can be very effective in mitigating emerging vulnerabilities, mainly by reducing the future volatility of output. In addition, such tightening is best accompanied by looser, not tighter, monetary policy.

Unequal consequences of COVID-19 across age and income
Michèle Belot, Syngjoo Choi, Egon Tripodi, Eline van den Broek-Altenburg, Julian C. Jamison, and Nicholas W. Papageorge (VoxEU) Jul 24, 2020
Almost all countries in the world have implemented drastic measures to contain the COVID-19 pandemic. This column documents the effects of the epidemic and containment measures using representative individual data on age and income from three Western and three Asian countries. Younger groups in all countries have been affected more, both economically and non-economically. Differences across income groups are less clear and less consistent across countries. The young are less compliant and supportive of the containment measures, no matter how hard they have been affected by them.

Trump Is Escalating the Trade Fight With Europe—and There's No Easy Way Out
Edward Alden (FP) Jul 24, 2020
Not even a Biden victory would heal the wounds in the U.S.-EU relationship.

Europe's bulls should enjoy their moment in the sun
Michael Mackenzie (FT) Jul 25, 2020
History suggests underestimating US economy can come at a cost.

The impact of the Phase One trade agreement
Robert Feenstra and Chang Hong (VoxEU) Jul 25, 2020
In December 2019, the US and China reached a Phase One agreement, which mandates China to purchase additional imports from the US worth $200 billion in 2020 and 2021. This column shows that the most efficient way for China to increase imports from the US is to mimic the effects of an import subsidy. For agricultural products, this subsidy would need to be as high as 42% for 2020 and 59% for 2021 in order to meet the target. Such subsidies would divert agricultural imports away from other countries, especially decreasing Chinas imports from Australia and Canada.

The influence of the COVID-19 pandemic on safe haven assets
Muhammad Cheema, Robert Faff, and Kenneth Szulczyk (VoxEU) Jul 25, 2020
The COVID-19 pandemic has severely impacted the financial markets, which has triggered a flight from risky assets to safe haven assets. This column compares the performance of the safe havens across the world's ten largest economies during COVID-19 and the 2008 Global Financial Crisis. The findings suggest that the character of safe haven assets has changed since the 2008 crisis. Gold, the traditional safe haven asset, has lost its glitter. However, the Swiss franc, the US dollar and US Treasuries retained their safe haven status, and Tether, a cryptocurrency, shows some promise.

The best way for the EU to spend its €750bn fund
Reza Moghadam (FT) Jul 26, 2020
Don't subsidise jobs in half-empty hotels; support sectors with growth potential instead.

A hard road ahead for Zelensky in Ukraine
Tony Barber (FT) Jul 26, 2020
Sympathy for the president in western capitals and the IMF is now tempered by concern.

Real-time inflation measurement during COVID-19
Xavier Jaravel and Martin O'Connell (VoxEU) Jul 26, 2020
The coronavirus pandemic has resulted in large shocks to both demand and supply, which conceivably could result in deflation, disinflation, or higher inflation. This column summarises findings, based on real-time scanner data in UK, on inflation among fast-moving consumer goods during the pandemic. It shows that at the beginning of lockdown there was a sharp upturn in inflation and a significant fall in product variety.

Africa needs more help with its pandemic response
FT View Jul 27, 2020
Hunger and disease are threatening small and fragile states.

Lay-offs are the worst of the bleak options facing recession-hit companies
Andrew Hill (FT) Jul 27, 2020
Some groups are becoming more creative, offering short-time working rather than redundancies.

Modi stumbles: India's deepening coronavirus crisis
Amy Kazmin (FT) Jul 27, 2020
The prime minister warned the virus could derail decades of progress. But new infections are now at record levels.

Why investors in Brazil are ready to give Bolsonaro another go
Bryan Harris (FT) Jul 27, 2020
Ebullience has begun to return, fuelled by resurgent stocks and optimism on reforms.

Snooze the Climate Alarms
Walter Russell Mead (WSJ) Jul 27, 2020
A new study predicts population will drop sharply as developing economies grow.

Is Europe finally coming together?
Robert Samuelson (WP) Jul 27, 2020
The odds of Europe solving its 'Italy problem' just got a bit better.

Perfect storm sinking the almighty dollar
William Pesek (AT) Jul 27, 2020
The "dollar-is-crashing" trade is the ultimate widow-maker. For decades, it's confounded more punters than bets against Chinese stocks, Japanese debt and Hong Kong property combined.

The EU's New Budget: Europe's Recovery at The Expense of Its Long- Term Ambitions
Anita Käppeli and Mikaela Gavas (CGD) Jul 27, 2020
What has been agreed?

Statistical Insight: Location, location, location – House price developments across and within OECD countries
Pierre-Alain Pionnier (OECD Ecoscope) Jul 27, 2020
Housing is key to wellbeing. Real estate typically forms the most important asset of households and their most important source of debt. Not surprisingly given their correlation with the economic cycle, house prices are also one of the most widely tracked economic indicators. However, despite their importance, including for macroeconomic policymaking, as the 2008-09 financial crisis well illustrated, there are few internationally comparable statistics to show how house price developments vary across regions and cities within countries. This is despite the common understanding that changes in house prices within countries are rarely uniform (e.g. there may be 'ripple' effects). Policies that target the 'national' therefore may miss differences across regions and in turn add to the geography of discontent. This Statistical Insights describes a new OECD database on national and regional house price indices that aims to fill this gap.

European COVID-19 credit support pledges far exceed the amounts paid out
Julia Anderson, Francesco Papadia, and Nicolas Véron (PIIE) Jul 27, 2020
Contrary to widespread concerns, loan guarantees and other forms of credit support from European governments to businesses have not distorted competition in the EU single market so far. The large funding announcements for government-backed credit programs do not correlate with actual commitments of funds to companies.

Addressing Private Sector Debt through Sustainable Bond Guarantees
Clemence Landers (CGD) Jul 27, 2020
The latest G20 finance ministers meeting concluded with no major progress on debt relief for the world's poorest countries, and a few setbacks. To date, no country eligible for the G20's Debt Service Suspension Initiative (DSSI) has requested a moratorium on their private sector debt despite 41 countries applying for relief on their official bilateral loans. This is largely because governments worry that simply requesting DSSI treatment for their private debt could spook markets and prohibitively raise their cost of funds. Moreover, private sector creditors have signaled that their participation in DSSI is on a purely voluntary basis, meaning that even if a country requests DSSI for commercial debt, their creditors are unlikely to grant them a moratorium. In short, we are at an impasse.

Lebanon's Dysfunctional Political Economy
Ishac Diwan (Project Syndicate) Jul 27, 2020
Using the prospect of a flood of refugees as a bargaining chip in international negotiations, the government is happy to subsist on foreign-exchange reserves while waiting to collect geopolitical rents. Yet there is reason to hope that this strategy, which has already impoverished half the population, will fail.

Emerging Economies Should Build Back Greener
Luis Alberto Moreno and Henry M. Paulson, Jr. (Project Syndicate) Jul 27, 2020
The COVID-19 pandemic has forced us to stop and think about our impact on the planet, and to imagine the kind of world we want. There is still time for governments to plan for a green recovery, which would also help many of them address existing structural problems.

Will COVID-19 Kill Cash?
Howard Davies (Project Syndicate) Jul 27, 2020
Reports that the coronavirus could be transmitted by handling cash has given people another reason to steer clear of banknotes. Although untrue, the damage has been done, and a recent survey found that 75% of respondents expect to use cash less in the future.

The Challenges of the Post-Pandemic Agenda
Jean Pisani-Ferry (Project Syndicate) Jul 27, 2020
The pandemic has highlighted the vulnerability of human societies and fortified support for urgent climate action. But while the small government, free-market template of the last four decades suddenly looks terribly outdated, history suggests that transitions between phases of capitalist development can be harsh and uncertain.

Responsibility or Ruin
Joschka Fischer (Project Syndicate) Jul 27, 2020
Although the top priority today is to contain the COVID-19 pandemic and mitigate its economic fallout, we must not ignore the long-term implications of the crisis. Our actions now determine the fate of all other species on the planet, yet we are not fully in control of nature.

Public procurement in developing economies
Erica Bosio, Simeon Djankov, Edward Glaeser, and Andrei Shleifer (VoxDev) Jul 27, 2020
Heavier regulation of procurement is associated with better outcomes in countries with lower quality public sectors, and with worse outcomes in countries with higher quality ones

Quantitative easing and helicopter money: Not so distant cousins
Alex Cukierman (VoxEU) Jul 27, 2020
The use of helicopter money as a monetary policy response to Covid-19 has drawn significant attention over recent months. This column offers a comparison of helicopter money and quantitative easing, as used in the wake of the global financial crisis. By evaluating the similarities and differences, as well as the contrasting contexts of each crisis, key advantages and disadvantages are identified. It concludes that the two policy mechanisms may not be as different as first thought, and helicopter money could well be crucial in combating the economic effects of COVID-19.

The Chinese Communist Party Is an Environmental Catastrophe
Richard Smith (FP) Jul 27, 2020
Political ambitions make China's emissions growth inevitable even as the economy falters.

A possible IMF Pandemic Support Facility for emerging-market countries
Matthew Fisher and Adnan Mazarei (PIIE) Jul 27, 2020
As the International Monetary Fund (IMF) adapts its strategy to meet the challenges of the COVID-19 crisis, it should develop a new temporary lending instrument to assist emerging-market countries facing pandemic-related fiscal and balance of payments difficulties. A dedicated IMF Pandemic Support Facility would help meet the exceptional financing needs of emerging-market countries at a time of high uncertainty while providing more lenient repayment periods and also allow the Fund to be more flexible in its operations with minimum disruptions to its existing facilities.

The US-China rift is now about values
FT View Jul 28, 2020
What started as a tariff war is becoming ideological.

Rage against central banks is misdirected
Robin Harding (FT) Jul 28, 2020
The real problem is a declining natural rate of interest through demographic shifts and lower productivity growth.

European banking needs a Big Bang
Axel Weber (FT) Jul 28, 2020
Creating new rules for cross-border lenders would speed economic recovery.

Investors in private equity funds need to stay on their toes
Sujeet Indap (FT) Jul 28, 2020
SEC's warns of risk of firms putting their own interests ahead of those of clients.

Industry needs a rare earths supply chain outside China
Jamie Smyth (FT) Jul 28, 2020
Resource security requires corporate collaboration as well as public funding.

International integration provides a path for smaller, low-income countries to reduce poverty
Pinelopi Koujianou Goldberg and Tristan Reed (PIIE) Jul 28, 2020
In an era of deglobalization, the export-led model of development may become less tenable. Without international integration, a country is limited to harnessing the purchasing power of its own consumers and trading internally. But how large would a country need to be to develop without international trade?

A Refugee Crisis Is the Last Thing Latin America Needs
Mac Margolis (Bloomberg View) Jul 28, 2020
The pandemic has left migrants trapped between borders, disrupted the flow of remittances and strained government resources.

Bankers' New Fix May Cause Harmful Addiction
Elisa Martinuzzi (Bloomberg View) Jul 28, 2020
Europe wants to make it easier for banks to buy insurance on their loans, from hedge funds and insurers. But this practice was once seen as toxic.

Recessions Usually Are Worse for Men. Not This Time.
Conor Sen (Bloomberg View) Jul 28, 2020
Transportation and warehousing, where they dominate, have held up. Retail and hospitality, with lots of women workers, haven't been so lucky.

There's No Half-Rescuing a Zombie. Ask Yes Bank
Andy Mukherjee (Bloomberg View) Jul 28, 2020
The lessons learned from bailing out India's poster child of bad loans may soon be visited on other lenders.

Preventing a Global Education Disaster
Kevin Watkins (Project Syndicate) Jul 28, 2020
The education losses resulting from the COVID-19 pandemic are invisible, but will leave millions of the world's poorest children carrying the scars of diminished opportunity for the rest of their lives. The world can – and must – take immediate steps to mitigate the damage.

It Is Time to Abandon Dollar Hegemony
Simon Tilford and Hans Kundnani (FA) Jul 28, 2020
Issuing the world's reserve currency comes at too high a price.

To Avoid a Coronavirus Depression, the U.S. Can't Afford to Alienate the World
Christopher Smart (FP) Jul 28, 2020
America needs a cooperative global economy to dig itself out of the downturn. That will require deft economic diplomacy, not bluster and bullying.

Oh God, Not the Peloponnesian War Again
James Palmer (FP) Jul 28, 2020
Western strategists need to learn some new history. Here are eight suggestions from Asia.

Gold's rise is a sign of uncertain times
FT View Jul 29, 2020
By normal standards, the yellow metal is not an attractive investment.

Bringing sovereign funds into Covid fight would be misguided
Henny Sender (FT) Jul 29, 2020
The world's biggest institutional investors fear being asked to bail out businesses.

Antique Chinese bonds are now in play
Izabella Kaminska (FT) Jul 29, 2020
Speculators and politicians are eyeing ways to use pre-communist debt to put pressure on Beijing.

Market narratives fail to factor in Covid-19 endgame
Pascal Blanque (FT) Jul 29, 2020
Investors have bought into the rose-tinted tale of economic recovery without considering new era of upheavals.

This surge in Chinese stocks is not like the last one
Diana Choyleva (FT) Jul 29, 2020
Recent market rally has a different set of drivers from the 2015 boom and bust.

Can Argentina Stay in Lockdown With a Failing Economy?
Peter Schechter (BRINK) Jul 29, 2020
Although a recent poll shows that 68% of Argentines approve of President Alberto Fernández's performance against the COVID-19 pandemic, the country is likely to face tougher times ahead. The real work of reform, investment and modernization must begin for the country to flourish.

Impact of Conflict and Political Instability on Banking Crises in Developing Economies
Montfort Mlachila and Rasmane Ouedraogo (IMF) Jul 29, 2020
While the economic effects of conflict and political instability have been analyzed extensively, much less attention has been paid to how banks are affected.

Europe's big fiscal deal leaves some tough decisions ahead
Jacob Funk Kirkegaard (PIIE) Jul 29, 2020
It took five days of sometimes ugly negotiations for leaders of the European Union (EU) to agree in July to €750 billion in new debt to counter the economic shock resulting from the COVID-19 crisis and in particular to distribute the aid to countries less well-off and most in need. What they accomplished was a major step toward European fiscal integration. But until they decide how the new debt will be repaid, the long-term impact of the EU's pathbreaking response remains uncertain.

Two lessons from ASEAN for regional integration in Africa
Souleymane Coulibaly (Brookings) Jul 29, 2020
The conventional wisdom is that the difference between regional integration in Southeast Asia and that in sub-Saharan Africa is that while the former is driven by markets and concrete economic initiatives, the latter relies on a politically driven process with big talks by big men at big summits generating tiny results. A closer look reveals that this isn't actually true: Attributing ASEAN success solely to market forces is misleading. Getting the facts right could greatly help other regions around the world improve their integration initiatives.

The Fed Is Juggling Stimulus Past and Future
Timothy A Duy (Bloomberg View) Jul 29, 2020
Monetary policy is stuck between the emergency actions of this spring and the rollout of a new strategy and tools this fall.

Keeping Poverty Reduction Front and Center
Juan Manuel Santos Sabina Alkire (Project Syndicate) Jul 29, 2020
The latest update to the global Multidimensional Poverty Index shows that many countries have made significant progress in improving the lives of the poor over the past decade. Rather than allow these gains to be reversed by the COVID-19 pandemic, governments must seize this moment to redouble their efforts.

Europe Bails Out Its Populists
Slawomir Sierakowski (Project Syndicate) Jul 29, 2020
Following grueling negotiations over the European Union's budget and pandemic response, it is not surprising that much of the attention has focused on an historic agreement that will establish a proto-fiscal policy. Less surprising still is that the rule of law has once again received short shrift.

The Economic Costs of National Security
Andrew Sheng and Xiao Geng (Project Syndicate) Jul 29, 2020
As the US-China rivalry escalates, the growing emphasis on national security will undermine global trade and investment, leaving fewer resources to finance social policies, address inequality, and tackle climate change. This is a global tragedy of the commons, and there is no guarantee that recognizing it will change the outcome.

The Pandemic Response, Act II
Jean Pisani-Ferry (Project Syndicate) Jul 29, 2020
As the pandemic recedes in Europe, the public and policymakers alike are increasingly focusing on the pace and strength of economic recovery from the crisis. What should governments do to minimize the lasting damage?

The microeconomics of cryptocurrencies
Hanna Halaburda, Guillaume Haeringer, Neil Gandal, and Joshua Gans (VoxEU) Jul 29, 2020
Since its launch in 2009, there has been increasing interest in Bitcoin and other cryptocurrencies. Initially mostly discussed in popular media, more recently a growing body of academic research has emerged on the topic, spanning many fields such as macroeconomics, law and economics, and computer science. This column focuses on the microeconomics of cryptocurrencies, specifically on their supply, demand, trading price, and the competition amongst different cryptocurrencies. It summarises the main findings in this literature over the past decade and establishes a base for future research.

FOMC Remains Committed To Use All of Its Tools
Jay H. Bryson (WF Econ Group) Jul 29, 2020
The FOMC did not make any major policy changes today, but it remains committed to use all of its tools, if necessary. The committee did extend the Fed's swap lines with foreign central banks.

Turkey needs a new approach to the lira
FT View Jul 30, 2020
Erdogan's gamble on cheap money and propping up the currency has failed.

We all need to reassess what we understand by the word 'risk'
Fiona Frick (FT) Jul 30, 2020
The Covid-19 crisis has accelerated structural changes in the way financial markets work.

Controversy over seigniorage in Lebanon is a warning sign
John Plender (FT) Jul 30, 2020
Unorthodox measures of central banks may be storing up trouble.

Building back better requires systemic shifts
Diane Coyle (FT) Jul 30, 2020
The first step is to acknowledge the failures of organisation of society and the economy.

A farming revolution is what we need in this crisis
Donna Kilpatrick (FT) Jul 30, 2020
The Covid-19 pandemic has brought a reckoning for how we feed ourselves and where we get our food.

China Tries Its Favorite Economic Cure: More Construction
Keith Bradsher (NYT) Jul 30, 2020
Strong sales at China's biggest construction equipment maker show Beijing's strategy for recovery after the virus. But while the company, XCMG, is prospering, the rest of the economy is struggling.

A Collapse That Wiped Out 5 Years of Growth, With No Bounce in Sight
Ben Casselman (NYT) Jul 30, 2020
The second-quarter contraction set a grim record, and it would have been worse without government aid that is expiring.

The fear of robots displacing workers has returned
Economist Jul 31, 2020
Is it misplaced?

Transparency Makes Central Banks More Effective and Trusted
Tobias Adrian, Ghiath Shabsigh, and Ashraf Khan (IMF) Jul 30, 2020
More transparency and accountability are required to maintain public support to central banks, safeguard independence and enhance policy effectiveness.

Fed Reinforces Commitment to Ongoing Monetary Policy Support
Tiffany Wilding (PIMCO) Jul 30, 2020
The Federal Reserve wants financial conditions to remain accommodative as it looks to support the U.S. recovery.

Refugees Are Essential to the COVID-19 Response
Aditi Hazra (Project Syndicate) Jul 30, 2020
To build a better world, every action counts. When it comes to ending the COVID-19 pandemic, those actions must include a broad global commitment to ensuring that all people – including refugees – are protected.

No Europe Without the Rule of Law
Harold James (Project Syndicate) Jul 30, 2020
In typical fashion, the European Union has once again taken a step toward deeper integration in response to a catastrophic crisis. And, once again, "ever-closer union" is being embraced in the absence of effective mechanisms to enforce fundamental principles, setting the stage for more internal disputes to come.

Mutual fund performance and flows under COVID-19
Lubos Pastor and Blair Vorsatz (VoxEU) Jul 30, 2020
Active fund managers are widely believed to outperform during market downturns. This column uses daily returns from US active equity mutual funds to examine fund performance and investor behaviour in the midst of the COVID-19 crisis. It finds that active equity mutual funds underperform a variety of passive benchmarks, contradicting the popular belief that active managers outperform in downturns. In addition, investors have favoured sustainable funds during the crisis, suggesting that sustainability is now viewed as a necessity rather than a luxury good.

Robots and the rise of European superstar manufacturers
Jens Südekum, Joel Stiebale, and Nicole Woessner (VoxEU) Jul 30, 2020
The claim in a 2016 report from The Economist that a small group of 'superstar firms' were "once again dominating the global economy'' referred mostly to American internet giants, but recent research suggests that previous decades were more broadly characterised by a reallocation of market shares towards highly productive and profitable firms, with notable implications for competition, market power, and the income distribution. This column argues that a superstar firm pattern is also present in European manufacturing, and that it is considerably stronger in manufacturing branches in which industrial robots have been on the rise. Technological change seems to be a key driver for the emergence of superstar firms.

China's Infrastructure-Heavy Model for African Growth Is Failing
Thierry Pairault (Diplomat) Jul 30, 2020
In Ethiopia and Kenya, the attractive illusion of the "China model" has had grave financial consequences.

Lebanon as We Know It Is Dying
Steven A. Cook (FP) Jul 30, 2020
The only political system the country has ever known is collapsing, and it's never coming back.

As Pandemic Rages, the United States Slashes an Economic Lifeline
Audrey Wilson (FP) Jul 30, 2020
Lockdowns and outbreaks have hit the poor hard—and governments worldwide are struggling.

Whose century?
Adam Tooze (LRB) Jul 30, 2020
For Americans, part of the appeal of allusions to Cold War 2.0 is that they think they know how the first one ended. Yet our certainty on that point is precisely what the rise of China ought to put in question.

A dangerous moment for the world economy
FT View Jul 31, 2020
Rise in European cases shows there is no respite from the pandemic.

Investors in gold and investors in bonds cannot both be right
Tommy Stubbington (FT) Jul 31, 2020
Record high for the metal suggests that debt markets have got it wrong on inflation.

Dollar blues: why the pandemic is testing confidence in the US currency
Colby Smith, Eva Szalay, and Katie Martin (FT) Jul 31, 2020
After the greenback suffers its worst month in a decade on economic concerns, debate about its global role is stirring.

Does Trump Want to Save His Economy?
Jim Tankersley (NYT) Jul 31, 2020
The president is showing little urgency or strategy as the economic recovery stalls ahead of the November election.

3 Things to Make the World Immediately Better After Covid-19
Dambisa Moyo (NYT) Jul 31, 2020
The crisis could be a catalyst for overhauling the economic world order.

Yes, federal debt is out of control. But this is not the time to pinch pennies.
Henry Olsen (WP) Jul 31, 2020
Republicans need to take the lead on crafting a realistic, needs-based relief plan.

Exploring the Feasibility of Medium-Term Revenue Strategies in Developing Countries
Sanjeev Gupta and Peter Mullins (CGD) Jul 31, 2020
What is an MTRS and which countries have formulated one?

How to Prevent the Looming Sovereign-Debt Crisis
Joseph E. Stiglitz and Hamid Rashid (Project Syndicate) Jul 31, 2020
From Latin America's lost decade in the 1980s to the more recent Greek crisis, there are plenty of painful reminders of what happens when countries cannot service their debts. A global debt crisis today would likely push millions of people into unemployment and fuel instability and violence around the world.

The Pandemic Pain of Emerging Markets
Jeffrey Frankel (Project Syndicate) Jul 31, 2020
As COVID-19 continues its global march, the whole world is paying the price for some countries' negligent and incompetent political leadership and the virtual breakdown of the rules-based multilateral order. But emerging and developing economies are likely to suffer the most.

The World According to MBS
John Andrews (Project Syndicate) Jul 31, 2020
Saudi Crown Prince Mohammed bin Salman is wooing his country's young people in order to head off the sort of discontent that erupted across the Middle East during the 2011 Arab Spring. As two recent books show, the events of almost a decade ago still weigh heavily on Arab governments and publics alike.

The proximate determinants of economic development since 1913
Daniel Gallardo Albarrán and Robert Inklaar (VoxEU) Jul 31, 2020
Modern economic growth has improved the lives of millions in an unprecedented way, but its unequal progression across the globe has resulted in high income inequality. Most of the cross-country differences in income levels are typically attributed to differences in productivity rather than to physical or human capital accumulation. This column argues that this has not always been the case: physical capital accounted for a much larger fraction of income variation at the beginning of the 20th century. More generally, the results of the study call for a reevaluation of the long-term determinants of relative economic performance over time.

Growth, sustainability, and the measurement of global gross product
Aniruddh Mohan, Akshay Thyagarajan, and Nicholas Muller (VoxEU) Jul 31, 2020
The nexus of economic development and environmental impact is at the core of current policy debates. This is often captured by an 'environmental Kuznets curve', an inverted-U shaped relationship between income and pollution levels. This column argues that, in contrast to conventional approaches, sustainability analysis should focus on the monetary damages of pollution, rather than the physical tonnage of emissions. It highlights a large divergence in the Kuznets curves based on these two approaches. In addition, it proposes a measure of GDP growth which adjusts for monetary pollution damages.

Puerto Rico's Colonial Model Doesn't Serve Its People
Michael Deibert (FP) Jul 31, 2020
One year on from mass protests, Puerto Ricans are still questioning how to refresh the island's relationship with the United States.

What Happens When 30 Million People Lose the Boost?
Tim Quinlan, Sarah House, and Shannon Seery (WF Econ Group) Jul 31, 2020
In the absence of a new supplemental jobless benefit, the hit to aggregate U.S. household income will be somewhere in the neighborhood of $72 billion and is likely to weigh meaningfully on consumer spending.

A Short Tour of Global Risks
Carmen M. Reinhart (FRBSL Review) Jul 31, 2020
This article is based on the author's Homer Jones Memorial Lecture delivered at the Federal Reserve Bank of St. Louis, Wednesday, June 25, 2019.