News & Commentary:

Articles/Commentary

The UK carves a risky new path on state aid
FT View Jul 1, 2021
A post-Brexit system of nimbler subsidy decisions also means less scrutiny.

Economists can't predict the future — policy should reflect that
Gillian Tett (FT) Jul 1, 2021
Fiscal processes must be overhauled to help us face an uncertain world.

Draghi struggles to make EU listen on migration
Miles Johnson (FT) Jul 1, 2021
Italian PM's failure to influence European policy is seized on by opponents at home.

China advances in challenge to dollar hegemony
Diana Choyleva (FT) Jul 1, 2021
Progress in developing digital renminbi aids quest to undermine global order based on US currency.

U.S. Proposal for 15% Global Minimum Tax Wins Support From 130 Countries
Liz Alderman, Jim Tankersley and Eshe Nelson (NYT) Jul 1, 2021
A 15 percent minimum tax rate would generate $150 billion in additional tax revenue each year, the Organization for Economic Cooperation and Development said.

How the US R&D model was weakened
Reuven Brenner (AT) Jul 1, 2021
An examination of the United States' historical experience with infrastructure and government spending on research and development sheds light on what went wrong – and what the remedies are, analyzing the transition from Dwight Eisenhower's "don't Sputnik me" to "don't Covid me".

Little Laos piling up big debts to China
Peter Janssen (AT) Jul 1, 2021
This week Laos redeemed a US$150 million bond listed on the Singapore Exchange, chipping away only slightly at its ballooning external debt owed over the next five years. The $150 million bond, sold on the international market with a 6.875% interest rate, was the first of three sovereign bonds falling due this year.

China's next 100 years relies on the next 10
William Pesek (AT) Jul 1, 2021
As the Chinese Communist Party (CCP) turns 100, the late Milton Friedman is trending in cyberspace. The reason: the spectacular ways in which the Nobel laureate had Asia's now biggest economy wrong. In particular, his strong belief that capitalism would give China no choice but to go the way of Western democracies was dead wrong.

Dollar's global role: extraordinary privilege or burden?
Mark Sobel (OMFIF) Jul 1, 2021
Debates about the dollar's global financial status are back in vogue and with them the notion that the US has and abuses an 'exorbitant privilege'. The debates are overdone. Whether one believes the dollar's role is a burden or privilege, policy-makers' attention should focus on addressing undesirable policies and distortions in the international monetary system. That would represent a better use of time than debating privileges and burdens.

COVID-19 will not leave a lasting negative imprint on South Korea's economy
Jacob Funk Kirkegaard (PIIE) Jul 1, 2021
South Korea's macroeconomic response to the COVID-19 pandemic has been moderate compared with many other member countries of the Organization for Economic Cooperation and Development (OECD) in Asia and especially Europe and North America. This blog analyzes the drivers of South Korea's economic rebound, the macroeconomic circumstances of their operation, and prospects for continued contributions to economic growth in the short to medium term.

How Labor Shortages Help Profits and Hurt Inflation
Gary Shilling (Bloomberg View) Jul 1, 2021
Companies are being forced to find ways to boost productivity, which supports earnings and leads to disinflation.

The Better Crisis Response
Simon Johnson (Project Syndicate) Jul 1, 2021
We can and should prepare for all the specific shocks we can imagine. And what we've learned over the past 30 years is that the best way to prepare for the unforeseeable is to help people live healthier and more prosperous lives in good times, and to offer as much help as possible to everyone who needs it when bad times come again.

The Right Advice for the Pandemic Recovery
Koichi Hamada (Project Syndicate) Jul 1, 2021
As long as there is no major uptick in inflation, central banks would do well to sustain their expansionary monetary policy, but with the goal of supporting effective – and coordinated – fiscal-policy interventions. In other words, the world needs to follow the late Richard Cooper's sound counsel.

Under the Latin American Volcano
Kenneth Rogoff (Project Syndicate) Jul 1, 2021
Most of Latin America is still far from the horrific conditions prevailing in Venezuela, where output has fallen by a staggering 75% since 2013. But, given the ongoing humanitarian catastrophe there, and the specter of political instability elsewhere, investors should not take a sustained economic recovery for granted.

The housing challenge facing central banks
FT View Jul 2, 2021
Monetary policy is ill-placed to fix a property crisis.

CBDCs must be coupled with greater accountability
Martina Fraschini, Luciano Somoza, and Tammaro Terracciano (FT) Jul 2, 2021
Launching digital currencies will mean even more responsibility for — and politicisation of — the world's monetary guardians.

The time is ripe for the EU to tackle money laundering
Karel Lannoo (FT) Jul 2, 2021
Creating a new supervisory agency may help, but better regulation is essential.

Halfway Through 2021, the Hot Stocks Are Old-Fashioned
Matt Phillips (NYT) Jul 2, 2021
Pandemic-friendly tech companies touched off the market's big rally last year. Now it's being sustained by throwbacks like oil drillers and financial firms.

Here's Why This Economic Recovery Is Putting 2009's to Shame
Julia Coronado (NYT) Jul 2, 2021
Friday's jobs report, and a slew of other data, shows going big and going early works.

A global corporate-tax deal takes shape
Economist Jul 2, 2021
To get 130 jurisdictions to agree is remarkable. But plenty remains to be done.

Here's How Emerging Technologies Will Impact the Future of Infrastructure
Blair Chalmers and Lawrence Slade (BRINK) Jul 2, 2021
We are seeing profound shifts in societal needs and consumer demands, hastening the adoption of certain technologies. These dynamics are shaking long-held assumptions about the essential and monopolistic nature of some infrastructure services.

The U.K. Belatedly Escalates Its Green Gilt Ambitions
Mark Gilbert (Bloomberg View) Jul 2, 2021
Britain has missed out on the cheaper funding available to issuers of environmentally friendly debt.

Modi's rescue package leaves the economy to sink
Anil Sharma (AT) Jul 2, 2021
Finance Minister Nirmala Sitharaman said India's new spending package aims to speed up growth, boost exports and create jobs. But economists and analysts are already asking if its enough to spur the economy? Some analysts say the package looks more like a liquidity stimulus than the fiscal stimulus that is needed.

A recipe for lower house prices
Volker Zieman (OECD Ecoscope) Jul 2, 2021
Does housing need to become always more and more expensive relative to other services, eating an ever-higher share of income?

Is the Quality of Development Finance Improving?
Ian Mitchell (CGD) Jul 2, 2021
Development finance is broader than the DAC.

OPEC+ Is Pushed to the Brink Again
Julian Lee (Bloomberg View) Jul 2, 2021
The UAE's call for a higher quota needs to be addressed or it will just resurface again and again.

How to Balance Debt and Development
Homi Kharas and Meagan Dooley (Project Syndicate) Jul 2, 2021
Many emerging markets and developing countries face a dilemma: borrow and risk a debt crisis, or choose austerity and risk a development crisis. Resolving it will require policymakers to address two collective-action problems that markets cannot resolve on their own.

Is America Losing the Digital-Currency Race?
Dante Alighieri Disparte (Project Syndicate) Jul 2, 2021
With the explosive proliferation of cryptocurrencies, including China's introduction of a digital renminbi, it is not surprising to hear panicked warnings about the looming decline of the dollar. But the truth is that the greenback is the prime beneficiary of today's market developments.

Demand-driven growth
Marek Ignaszak and Petr Sedlácek (VoxEU) Jul 2, 2021
To gauge the efficacy of policies aimed at spurring growth, we must first fully understand the sources of aggregate growth. This column argues that understanding the drivers of economic growth requires paying attention not only to productivity and R&D dynamics at the firm level, but also to changes in demand for firms' products. The authors provide a new perspective on commonly used supply-side pro-growth policies and open the door to analysing demand-side policies such as public procurement or product market regulation, which have been present in the policy debate but have largely escaped academic circles.

Central bank independence and inflation
Philipp F. M. Baumann, Enzo Rossi, and Michael Schomaker (VoxEU) Jul 2, 2021
The notion than an independent central bank reduces a country's inflation has been embraced by academics, central bankers, and politicians all over the world. This is somehow puzzling, giving the ambiguity reported in empirical studies. This column argues that overall there is only a weak causal link from independence to inflation, if at all. Even a strong inflation-boosting impact from introducing central bank independence cannot be ruled out. These results are obtained from a statistical approach that has not yet been used in analyses of macroeconomic processes, although it exhibits properties well-suited to this end.

Emerging Asia Under Delta Pressure
Brendan McKenna (WF Econ Group) Jul 2, 2021
Once relatively insulated from COVID-related stress, emerging Asia has come under pressure as a result of the new Delta COVID variant. Confirmed cases have risen across the region, forcing governments to impose new restrictions on their respective countries. As a result, volatility in local financial markets has also risen over the last month and multiple regional currencies have sold-off. While the path of the Delta variant is very unclear and further short-term depreciation possible, we believe current exchange rates are at attractive levels for corporates with local currency expenses.

Emerging markets diverge from playbook
Jonathan Wheatley (FT) Jul 3, 2021
Correlation with performance of commodities breaks down.

Markets enjoy blessed relief now the heavy storms have passed
Katie Martin (FT) Jul 3, 2021
Investors are on the lookout for inflation signals now a calmer mood is upon us following the turmoil of 2020.

Let's all please stop calling dollars 'fiat money'
Brendan Greeley (FT) Jul 3, 2021
Currencies are not memes that only have value because the governments say they do.

The long goodbye
Economist Jul 3, 2021
The pandemic is still far from over, but glimpses of its legacy are emerging.

The Global Minimum Corporate Tax Exposes the G-7's Hypocrisy
Robert Zumwalt (Mises Wire) Jul 3, 2021
The G-7's quest for a global minimum corporate tax has highlighted just how much the global elites can't stand what they see as private "monopolies," but also want more monopoly power for themselves.

With Home Prices Soaring, Shoppers Fear Buying at the Top of a Bubble
Doug French (Mises Wire) Jul 3, 2021
The concerns about a bubble imply those shopping for a new home are wondering if they are walking into a trap. Home prices have soared and no one wants to buy at the top.

The return of the carry trade
Economist Jul 3, 2021
Interest-rate rises in some big emerging markets will entice foreign capital.

Brexit has brought a slow decoupling
FT View Jul 4, 2021
Six months in, disaster has not happened but disruptions are real.

The good, the bad and the ugly of the global tax reform deal
Martin Sandbu (FT) Jul 4, 2021
The agreement reached by 130 countries has left fertile ground for new and clever techniques to circumvent the rules.

Biden's global income tax plan has made significant progress. But the hard part lies ahead.
WP Jul 4, 2021
The administration is making progress on global corporate taxation, but the hardest part is yet to come.

Central banks face a daunting task: tapering without the tantrum
Economist Jul 4, 2021
Can they stop their bond-buying and avoid upending markets?

What Does 8% Growth Mean When Thousands Are Still Dying?
Daniel Moss (Bloomberg View) Jul 4, 2021
On the books, Asia is poised for an economic rebound. Yet the coronavirus is still raging in countries such as Indonesia, and vast populations are getting left behind.

Chile's green lessons for emerging markets
FT View Jul 5, 2021
Dash for hydrogen shows that fossil fuels are not the only route to prosperity.

China's Belt and Road Initiative should stop financing new coal power
Gu Bin (FT) Jul 5, 2021
Ending the fuel's use would help meet climate commitments and foster co-operation with western nations.

This is as good as it gets for the US economy
Ruchir Sharma (FT) Jul 5, 2021
America has already been through a renaissance — it is unlikely to be reborn again.

What happens if Chinese household wealth is unleashed on the world?
Thomas Hale and Tabby Kinder (FT) Jul 5, 2021
Tentative steps at liberalisation reflect fears over the strong renminbi and risks of a bubble in domestic markets.

Albanian lessons for regulators nervously eyeing the crypto world
Robin Wigglesworth (FT) Jul 5, 2021
Albania's 1990s pyramid scheme debacle highlights risks of regulatory paralysis on the cryptocurrency explosion.

The Fed Is Underestimating the Risk of Inflation
Tim Congdon (WSJ) Jul 5, 2021
The data suggest prices will continue to increase, but the bank is guilty of faulty analysis.

The great federal-debt Ponzi scheme
David P. Goldman (AT) Jul 5, 2021
The discrepancy between raging inflation and soggy Treasury bond yields remains a cognitive dissonance in financial markets. There's a simple explanation (and "Inflation is transitory" is NOT a full credit answer): The Federal Reserve and the commercial banks that depend on the Fed are virtually the only buyers of US government debt.

Inflation pressures poised to ease
Nathan Sheets (OMFIF) Jul 5, 2021
The highly anticipated jump in inflation has arrived. For many, the speed at which inflation has accelerated has been the most eye-catching development. The global inflation story is one that we'll no doubt need to revisit often in coming months. Over time, the economic environment is likely to resemble what we saw before Covid-19 erupted, rather than one where the pandemic has launched a new paradigm of persistently elevated demand and higher inflation.

U.S. Cities Are at a Crossroads
Noah Smith (Bloomberg View) Jul 5, 2021
Technology and changing social values will give Americans more control than ever over how and where they live in the future.

How to Use Europe's Excess Savings
Ludovic Subran (Project Syndicate) Jul 5, 2021
What European households do with the cash buffers they have built up during the pandemic could have good, bad, or ugly consequences. The best option is for policymakers to help channel these savings into long-term investments that support the continent's green and digital transformations.

Making Trade Work for Everyone
Mari Pangestu (Project Syndicate) Jul 5, 2021
Nowadays, advocates of protectionism increasingly base their arguments on trade's adverse distributional consequences. But governments must remember that the potential benefits of trade are far greater, provided they can put in place policies that deliver them more equitably.

The Perils of Paradigm Economics
Andrés Velasco (Project Syndicate) Jul 5, 2021
As the world seeks to recover from the COVID-19 crisis, simplistic political and economic ideologies that serve as identity markers will not lead to effective policymaking. But something in human psychology makes many crave them nonetheless.

The Economic Fundamentals of Chinese Communism's Successes and Failures
Nancy Qian (Project Syndicate) Jul 5, 2021
From the Great Leap Forward to family-planning restrictions, China's rise has been marred by serious policy failures. Whether the Communist Party can avoid similar mistakes in the the future will depend on its recognition of a crucial distinction between such interventions and those that have fueled its economic success.

G20 must rise to the challenge of global crises
FT View Jul 6, 2021
The rich world must gain emerging countries' trust to advance on pandemic and climate.

Inflation takes shine off booming central Europe
Ben Hall (FT) Jul 6, 2021
Reputation for economic orthodoxy has shielded autocratic Poland and Hungary from criticism.

The end of EU migration will reshape the UK economy
Sarah O'Connor (FT) Jul 6, 2021
The era of free movement transformed everything from the security and location of work to the prices in shops.

America's economic boom and civic bust
Janan Ganesh (FT) Jul 6, 2021
The story is not that a rich country is so politically broken but that a politically broken country is so rich.

A $140bn asset sale: the investors cashing in on Big Oil's push to net zero
Anjli Raval (FT) Jul 6, 2021
The pressure on listed oil majors could have unintended consequences if production passes to private or state-owned companies.

OPEC, Biden and Gas Prices
WSJ Jul 6, 2021
The President wants the cartel to pump more oil, but the U.S. to pump less.

US a big winner of China-Australia trade war
Frank Chen (AT) Jul 6, 2021
American exporters are emerging as winners from the China-Australian trade war, with US goods filling market openings caused by Beijing's punitive tariffs on Australian goods. American exports ranging from wine, beef, cotton, timber to coal have seen their market share in China grow since last year, as US producers fill the void.

Improving Resource Allocation Decisions to Better Prepare for Future Crises Beyond COVID-19
Nompumelelo Radebe (CGD) Jul 6, 2021
In 2020, the global economy was hit by an unprecedented exogenous shock—an event that occurs outside the economic system but which has a great impact on it—in the form of the COVID-19 pandemic. The pandemic forced many countries across the globe to implement economic restrictions and lockdowns to minimize its spread. It posed a significant fiscal risk to many governments, as it was unforeseen and unavoidable. As some countries had already finalized their 2020 fiscal year budgets, governments had to pass in-year adjustments budgets, and in some cases supplementary budgets, to provide for COVID-19 fiscal response packages.

Banks post-Brexit: regulatory divergence or parallel tracks?
Alexander Lehmann (Bruegel) Jul 6, 2021
Post-Brexit UK bank regulation is not likely to compromise on international standards, but will place greater emphasis on competition, making close UK-EU dialogue essential.

The U.S.'s Faltering Commitment to Liberal Trade
Bloomberg View Jul 6, 2021
The Biden administration's lack of interest in fast-track authority is telling.

Oil's OPEC+ Disaster Rally Looks Like a Risky Bet
John Authers (Bloomberg View) Jul 6, 2021
The assumption that the group will keep supply at its current restricted levels is questionable.

Who Gets Left Holding the Digital-Dollar Fad?
Andy Mukherjee (Bloomberg View) Jul 6, 2021
The Fed isn't obliged to join China and other central banks in the craze to issue an official electronic currency. Private equivalents may do the job better.

Australia Seeks the Goldilocks Exit From Stimulus
Daniel Moss (Bloomberg View) Jul 6, 2021
Scale back easing without tightening. Boost wage growth but avoid runaway inflation. It's a delicate balance.

A Health New Deal
Swee Kheng Khor (Project Syndicate) Jul 6, 2021
The post-pandemic rebuilding period must feature ambitious investments in the physical, organizational, and social infrastructure needed to ensure universal health coverage. Governments have a historic opportunity to place health at the center of all policymaking, where it belongs.

The Real Inflation Risk
Daron Acemoglu (Project Syndicate) Jul 6, 2021
While the risk of sustained US inflation should not be ignored, nor should it cloud our view of what is really at stake in the current post-pandemic economy. American democracy is in trouble, and a robust, inclusive government-led recovery may offer the last best chance of putting it on a sounder footing.

Central Banking, Fast and Slow
Mohamed A. El-Erian (Project Syndicate) Jul 6, 2021
As the global economy emerges from the COVID-19 shock, systemically important central banks are faced with the unenviable task of deciding when and how quickly to phase out extraordinary stimulus measures. While there is no easy answer, there are clear criteria for maintaining policy credibility.

The Global Tax Devil Is in the Details
Joseph E. Stiglitz (Project Syndicate) Jul 6, 2021
Under existing tax rules, multinational firms can escape paying their fair share of taxes by booking their income in low-tax jurisdictions, or by moving some parts of their business to these jurisdictions. Will proposed reforms deliver on their promise to boost government revenues, especially in developing countries?

Avoiding a self-fulfilling low-inflation trap
Sebastian Schmidt (VoxEU) Jul 6, 2021
Inflation shortfalls across the developed world have raised concerns about the possibility of low-inflation traps. This column presents a simple model of inflation to analyse the role of stabilisation policy in preventing them. It suggests that decisive countercyclical fiscal policy can protect economies from falling into a low-inflation trap by offsetting low inflation expectations.

Global corporate taxes: IGM Forum survey
Romesh Vaitilingam (VoxEU) Jul 6, 2021
The G7 recently reached an agreement on the taxation of multinational corporations. The IGM Forum at Chicago Booth invited its panels of leading European and US economists to express their views on the challenges ahead. As this column reports, a strong majority (94% of the panelists) agrees that a global minimum corporate tax rate would limit the benefits of profit-shifting to low-tax jurisdictions without biasing where firms invest. But there is considerably more uncertainty among respondents about whether an international tax system with such a global minimum is achievable; and whether taxes based on where firms make their sales would be more efficient than taxes based on where their headquarters and production are located.

Political economy in finance
Thomas Lambert, Enrico Perotti, and Magdalena Rola-Janicka (VoxEU) Jul 6, 2021
Political considerations have become important in finance research, with significant implications for policymaking. This column summarises new research presented at the CEPR conference on the Political Economy of Finance, including work on opaque investments in political influence, electoral impact of credit and regulation, the role of institutional complexity in shaping reforms and incentives of central bankers. The conference kickstarted the PolEconFin initiative aimed at providing a meeting point for researchers in this topical area.

As China Rises, Britain and Australia Need Closer Security Ties
Tom Tugendhat (FP) Jul 6, 2021
Drinking more shiraz isn't enough to counter Beijing.

Taiwan offers useful route to investing in east Asian growth
John Redwood (FT) Jul 7, 2021
Stocks in Taipei are up 19 per cent this year, well ahead of mainland China.

The oil industry can grow old gracefully or leave a chaotic legacy
Daniel Litvin (FT) Jul 7, 2021
As pressure increases on closing oil and gas assets, the sector needs to take back the initiative and plan for retirement

The answer to inflation fears lies in ending Covid disruption
Lena Komileva (FT) Jul 7, 2021
Economies must adapt to supply changes, consumption patterns and labour dynamics.

Four key questions central banks must answer about digital currencies
Markus Brunnermeier (FT) Jul 7, 2021
Public debate on everything from privacy to cross-border competition is critical if citizens are to benefit.

'Just in time' planning has to give way to 'just in case'
Gillian Tett (FT) Jul 7, 2021
'We have all become accustomed to relying on ultra-complex supply chains we do not understand'.

Don't Worry Too Much About the Inflation Surge
Alan S. Blinder (WSJ) Jul 7, 2021
We may be stuck with inflation above 2%—maybe even above 3%—for a while.

How have the European Central Bank's negative rates been passed on?
Grégory Claeys and Lionel Guetta-Jeanrenaud (Bruegel) Jul 7, 2021
Negative rate cuts are not that different from 'standard' rate cuts. Like them, they reduce banks' margins, but this effect does not appear to be amplified below 0%.

Urgent Action Needed to Address a Worsening 'Two-Track' Recovery
Kristalina Georgieva (IMF) Jul 7, 2021
The world is facing a worsening two-track recovery, driven by dramatic differences in vaccine availability, infection rates, and the ability to provide policy support. It is a critical moment that calls for urgent action by the G20 and policymakers across the globe.

How can international institutions support the G7 tax proposals?
Simeon Djankov and Gary Clyde Hufbauer (PIIE) Jul 7, 2021
The quest backed by the Biden administration for a global minimum corporate tax rate and reallocation of taxable profits of large multinational corporations (MNCs) faces the next big test when finance ministers and central bank governors of the Group of Twenty (G20) economies meet in Venice on July 9-10.[1] Some 130 countries, including all G20 governments, have embraced the two proposals, which the Organization for Economic Cooperation and Development (OECD) developed over the last several years. A tough road lies ahead as national legislatures will need to rewrite tax laws and treaties. But international institutions can provide support for that effort.

Some of the ways multinational companies reduce their tax bills
Simeon Djankov (PIIE) Jul 7, 2021
Momentum is growing in support of a global minimum corporate tax rate to crack down on international firms diverting profits to low-tax countries to minimize their tax bills. Under a proposal backed by the Group of Seven (G7) countries, corporations would pay a minimum tax of at least 15 percent on a country-by-country basis—a much higher rate than some jurisdictions' existing tax rates—aimed at reducing corporate incentives to shift profits to avoid taxes. The two figures below show how the current system for taxing multinational corporations was designed to work and two ways firms exploit loopholes to reduce their tax obligations.

China Breaks the Global Model of VC Investing
Shuli Ren (Bloomberg View) Jul 7, 2021
Tiger Global and SoftBank found unicorns in one part of the world and replicated them in another, mixing and matching across the planet. Then Didi came along.

The G20 Must Act Now to Vaccinate the World
Jeffrey D. Sachs and Juliana Bartels (Project Syndicate) Jul 7, 2021
It is imperative that the G20 finance ministers' meeting in Venice this week act to provide the COVID-19 vaccines needed to achieve worldwide comprehensive adult immunization by early 2022. Given current production, this should not be a problem, so long as a global plan is quickly implemented.

How to Secure a Fairer Global Tax Deal
José Antonio Ocampo and Tommaso Faccio (Project Syndicate) Jul 7, 2021
The recent agreement by 131 countries to reform international corporate taxation is not the end of the road. But to bring about a more equitable outcome, developing countries must now push for a higher global minimum tax rate and a bigger reallocation of taxing rights, and refuse mandatory arbitration.

Decoupling from global value chains
Peter Eppinger, Gabriel Felbermayr, Oliver Krebs, and Bohdan Kukharskyy (VoxEU) Jul 7, 2021
The major disruptions to global value chains caused by the Covid-19 pandemic have prompted politicians to think about reducing the reliance on imported inputs by decoupling from global value chains. This column quantifies the welfare costs of decoupling as well as the potential gains from reduced exposure to foreign shocks. The bottom line is that decoupling does not pay off.

Why a carbon border tax is a necessity
FT View Jul 8, 2021
EU's proposal is a good attempt to prevent carbon leakage while avoiding WTO objections.

WHO chief: the G20 must invest in a healthier, greener post-pandemic world
Tedros Adhanom Ghebreyesus (FT) Jul 8, 2021
Global solidarity is the best way to get out of the current health crisis and prevent future ones.

The case for 'truly-long-term' debt ratings
Moritz Kraemer (FT) Jul 8, 2021
As challenges of climate change and ageing mount, investors need benchmarks for risks in decades to come.

Italian privatisations: 'Draghi Boys' should embrace a smaller state
Lex (FT) Jul 8, 2021
A sell-off of government stakes would bolster the prime minister's credentials as an economic liberaliser.

Why Haiti Still Despairs After $13 Billion in Foreign Aid
Maria Abi-Habib (NYT) Jul 8, 2021
Since a powerful earthquake devastated the country in 2010, foreign aid seems only to have helped perpetuate some of the country's biggest troubles.

The Bond Market Is Telling Us to Worry About Growth, Not Inflation
Neil Irwin (NYT) Jul 8, 2021
The economy remains hot, but the future is looking less buoyant than it did just a short while ago.

The Trumpian Roots of the Chip Crisis
Paul Krugman (NYT) Jul 8, 2021
We're still paying the price of tantrum-based policy.

The Global Tax Deal Is Bad for the U.S.
WSJ Jul 8, 2021
Congress should look at the anti-competitive details before signing on.

China to US: Two can play at technological war
David P. Goldman (AT) Jul 8, 2021
Beijing's crackdown on initial public offerings by Chinese companies in the US stock market denotes a turn to hard-edged economic nationalism, signaled by President Xi Jinping's July 6 denunciation of American "technology blockades." He added that no country had the right to "obstruct the development of other countries and harm their people's lives through political manipulation."

Could the RMB Dislodge the Dollar As a Reserve Currency?
Alicia Garcia-Herrero (BRINK) Jul 8, 2021
The dollar remains the world's largest reserve currency, but it is facing both domestic and external risks. China is entering the equation with its renminbi (RMB) and could threaten the dollar's position as a reserve currency.

Supply Bottlenecks Likely to Ease by the End of the Year
Carol Liao and Yishan Cao (PIMCO) Jul 8, 2021
The supply-demand imbalance should ease as spending on services outpaces demand for consumer goods in developed markets.

How to Keep Crypto From Crashing the Financial System
Bloomberg View Jul 8, 2021
What used to be a sideshow is becoming a systemic risk.

The ECB Shift on Inflation Is in the "Whatever It Takes" Spirit of Draghi
Daniel Moss (Bloomberg View) Jul 8, 2021
Crises and cataclysms over two decades made European central bankers less inflation averse.

Fund Managers Have Much to Fear From Inflation
Richard Cookson (Bloomberg View) Jul 8, 2021
The asset management industry is dominated by a few behemoths that are no longer nimble enough to quickly adjust to changing conditions.

The Stickiness of Pandemic-Driven Economic Behavior
Anu Madgavkar and Jaana Remes (Project Syndicate) Jul 8, 2021
The behavioral changes that persist after the pandemic will offer new business opportunities for firms that carefully assess consumer, industry, and regulatory trends. And policymakers can help the world to boost productivity by extending and improving digital infrastructure and ensuring universal access to it.

The Case for Carbon Import Taxes
Ed Araral and Vinod Thomas (Project Syndicate) Jul 8, 2021
Given the current trajectory of climate change, it is crucial that initial steps by the United States and the European Union to introduce carbon border taxes are successful. That will require policymakers to adhere to the essential principles that should govern such levies.

Dani Rodrik and Stefanie Stantcheva (Project Syndicate) Jul 8, 2021
Just as the pandemic was gathering pace in early 2020, French President Emmanuel Macron set up an international commission of economists to assess longer-term challenges and make policy proposals. While some of the recommendations are specific to France, many (if not most) are relevant to other advanced economies as well.

A Better Normal for Africa
Vera Songwe (Project Syndicate) Jul 8, 2021
If Africa emerges from COVID-19 with old inequalities unaddressed and new opportunities unrealized, its policymakers will have failed. If they recognize that a better normal is possible, and act boldly to make it a reality, the continent will at least have something to show for the suffering of the past year.

Central bank digital currency: The battle for the soul of the financial system
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Jul 8, 2021
Central banks are thinking about whether they should substitute publicly issued digital currency for the bank-issued digital money that people use every day. How this plays out can profoundly reshape the financial system and make it less stable. This column argues that we don't need CBDC to solve financial system problems, but with China already headed down the CBDC road, perhaps the best hope is that central banks will all proceed very slowly and stop well short of universal, elastically supplied, interest-bearing digital currency.

Maastricht values
Marco Buti and Vitor Gaspar (VoxEU) Jul 8, 2021
Almost 30 years ago, the European Council in Maastricht agreed, on 10 December 1991, the draft Treaty on the European Union. In this column, the authors, who were both involved in preparing the summit, examine the arithmetic of the Maastricht reference values in relation to the macroeconomic facts as of today. Broader questions to do with fiscal architecture and institutional design will be addressed in a subsequent column.

Part IV: Europe Faces Significant Demographic Challenges
Jay Bryson and Hop Mathews (WF Econ Group) Jul 8, 2021
In the fourth report in our series, we discuss the demographic outlook in Europe. The projected decline in the working-age population in most European countries will exert headwinds on the rate of potential GDP growth in coming years.

ECB's new strategy is a welcome update
FT View Jul 9, 2021
Dovish shift marks break with the traditional stance of the Bundesbank.

Investors need to prepare for the 'Yotta Age' of data
Ulrike Hoffmann-Burchardi (FT) Jul 9, 2021
The scale of future growth is immense and investors need to ask where and when the tide of disruption will strike next.

Five things the G20 must do to tackle climate change
Gillian Tett (FT) Jul 9, 2021
From demanding America change its carbon tax position to collaborative technologies research, progress must be made.

I.M.F. Board Backs $650 Billion Aid Plan to Help Poor Countries
Alan Rappeport (NYT) Jul 9, 2021
The expansion of emergency reserves to help fund vaccines and pay down debt is politically contentious in the United States.

OPEC pours inflation fuel onto Covid fires
William Pesek (AT) Jul 9, 2021
If OPEC's plan is to derail economic recoveries from China to the US, then this relic of the 1970s is off to a smashing start to 2021. There are few more sobering reminders of how fragile post-Covid-19 recoveries are than oil surging to US$100 per barrel. The problem for policymakers from Seoul to Jakarta is figuring out which is the bigger threat: rising oil demand or strained supply.

A Global Deal for Our Pandemic Age
Tharman Shanmugaratnam, Lawrence H. Summers, Ngozi Okonjo-Iweala, Ana Botin, Mohamed El-Erian, Jacob Frenkel, Rebeca Grynspan, Naoko Ishii, Michael Kremer, Kiran Mazumdar-Shaw, Luis Alberto Moreno, Lucrezia Reichlin, John-Arne Røttingen, Vera Songwe, Mark Suzman, Tidjane Thiam, Jean-Claude Trichet, Ngaire Woods, Zhu Min, Masood Ahmed, Guntram B. Wolff, Victor J. Dzau and Jeremy Farrar (CGD) Jul 9, 2021
Report of the G20 High Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response.

Is the Labor Market Loose or Tight? It's Both.
William C Dudley (Bloomberg View) Jul 9, 2021
There are three main factors making it difficult for employers to find workers, but these are mostly transitory.

How the New Normal Will Look Like the Old Normal
Michael R Strain (Bloomberg View) Jul 9, 2021
Covid didn't transform human nature, which means that the more some things have changed, the more they'll stay the same.

Peak PC? Pandemic Sales Boom Is Set to Expire
Tae Kim (Bloomberg View) Jul 9, 2021
Covid living sent home computers flying off the shelves, but this is not a new normal. Demand is set to hit a wall.

China Is the First Crack in the Covid Recovery
Daniel Moss (Bloomberg View) Jul 9, 2021
Beijing's surprise easing measure signals the global upswing may not be as robust as anticipated.

The Global Dangers of Rising US Inflation
Shang-Jin Wei (Project Syndicate) Jul 9, 2021
At-risk economies may have six months or so to implement self-help measures before any sudden US monetary-policy tightening happens. They are well advised to work on making their exchange rates more flexible, reducing their reliance on foreign-currency debt, and increasing their foreign-exchange reserves.

The Race to Sustainable Abundance
Michael R. Bloomberg , Saleemul Huq, and Agnes Kalibata (Project Syndicate) Jul 9, 2021
Abundance in a zero-emissions world means no longer exploiting and wasting finite resources, but rather valuing the nature that sustains and protects us. And three upcoming United Nations summits give governments the opportunity to listen to a chorus of calls for a healthier, more resilient future.

What Should Development Aid Do?
Nancy Qian (Project Syndicate) Jul 9, 2021
For decades, development aid has gone either to governments that lack the ability to administer it, or to non-government actors who essentially compete with the state. It is time for a new approach centered on a less ambitious but far more practical objective.

The Pandemic Opportunity
Muhammad Yunus (Project Syndicate) Jul 9, 2021
With so much of "normal" social and economic life put on hold by the coronavirus pandemic, there is no better time to consider new approaches to development. Until we have achieved environmental, social, and economic sustainability, we as a species will be racing against the clock.

Why market structure matters for development: Evidence from the global cement industry
Keelan Beirne and Martina Kirchberger (VoxDev) Jul 9, 2021
Market power in the construction sector raises prices and undermines long-term growth in poor countries

Divergence in bankruptcy law across advanced and developing economies
Simeon Djankov and Eva (Yiwen) Zhang (VoxEU) Jul 9, 2021
The economic shock triggered by Covid-19 shut down thousands of businesses and cost millions of workers their jobs. The goal of government response to this shock was simple: keep the lights on for as long as possible. This column describes how while some advanced economies have moved ahead with changes in their bankruptcy law to make it easier for distressed companies to keep running, developing countries have not reformed their procedures. A possible solution is to devise policies that reduce the share of the informal economy and put more pressure on reforming formal institutions.

The Proactive Fight Against Inflation
Brendan McKenna (WF Econ Group) Jul 9, 2021
Recent inflation data in Brazil and Mexico reveal price trends remain elevated in both countries. For the most part, we can generalize that statement and say inflation across the emerging markets is elevated and not as transitory as emerging market policymakers initially thought. With inflation above target or at the upper end of target ranges in many emerging market countries, in our view central bankers in the developing world do not have the luxury of being patient as it relates to monetary policy. In that sense, we believe currencies associated with proactive central banks can outperform, while patient or reactionary central banks could see their currencies underperform.

Markets reconsider the reflation trade
FT View Jul 10, 2021
Fears over price rises have given way to worries about economic growth.

Opec rift is a foretaste of things to come
David Sheppard (FT) Jul 10, 2021
Cartel to face rising tensions as peak in demand for oil approaches.

The new fault lines on which the world economy rests
Economist Jul 10, 2021
Global growth is coming back fast. But the recovery from the pandemic is uneven and fragile.

China seems intent on decoupling its companies from Western markets
Economist Jul 10, 2021
Nearly $2trn in shareholder wealth is on the line.

Global Tax Overhaul Gains Steam as G20 Backs New Levies
Alan Rappeport (NYT) Jul 10, 2021
The approach marks a reversal of years of economic policies that embraced low taxes as a way for countries to attract investment and fuel growth.

Anywhere jobs and the future of work
Jeegar Kakkad, Christina Palmou, David Britto, and James Browne (VoxEU) Jul 10, 2021
The Covid pandemic has helped to loosen the binds that previously tied a job to a specific geography and created a new class of work in the UK. 'Anywhere jobs' are non-routine service sector jobs that can be done from anywhere in the world, potentially for cheaper. This column shows that one in five workers in the UK are in an anywhere job and, in contrast to the past when the pressure was on semi-skilled workers, it is relatively highly skilled workers in non-routine roles that are now vulnerable to the pressures of technology and globalisation.

For sustainable finance to work, we will need central planning
Max Krahé (FT) Jul 11, 2021
Systemic guidance will help public and private sector investors to distinguish good from bad.

Equities are the only sensible foundation for private pensions
Martin Wolf (FT) Jul 11, 2021
Their massive long-term outperformance occurred despite world wars, the Depression and the global financial crisis.

China's Attacks on Tech Are a Losing Strategy in Cold War II
Niall Ferguson (Bloomberg View) Jul 11, 2021
Forcing DiDi and Alibaba to toe the Communist Party line may help Xi build a police state but will stall the nation's dynamic industry.

OPEC Is Letting the Oil Bears Play
Julian Lee (Bloomberg View) Jul 11, 2021
The void created by the rift between Saudi Arabia and the UAE makes room for speculation of a coming price war.

Lower bond yields are no longer good news for stocks
Mohamed El-Erian (FT) Jul 12, 2021
Can too much of a good thing complicate the orderly exit from loose monetary policies?

The China Trade May Be Just Starting to Unravel
John Authers (Bloomberg View) Jul 12, 2021
Beijing's monetary easing is a bad sign for global reflation prospects and risk appetite.

Has the Fed Boxed Itself Out of a Smooth Taper?
Marcus Ashworth (Bloomberg View) Jul 12, 2021
There is a real need to stop sucking out all the available float from the U.S. Treasury and mortgage bond markets. But the opportunity may have passed. Even China has pulled back its program.

Recovery fund will test the appetite of Europe's governments for reform
Megan Greene (FT) Jul 12, 2021
The record of EU structural funds shows that some countries do not even spend all the available money.

A fetish of illiquidity is driving finance
John Plender (FT) Jul 12, 2021
History repeating itself as banks and pension funds bet more on private assets.

Only the Rich Could Love This Economic Recovery
Karen Petrou (NYT) Jul 12, 2021
Stimulus and rock-bottom interest rates help the rich most of all.

Supporting Uganda's Recovery from the Crisis
IMF Jul 12, 2021
The IMF has approved a three-year financing arrangement for Uganda under the Extended Credit Facility (ECF), which will generate more inclusive, sustainable growth.

The Case for Liquidity Support for Frontier Markets
David Escoffier and Mark Plant (CGD) Jul 12, 2021
More development finance is needed, particularly more official development assistance (ODA) from developed countries to developing countries. But official financing has never been the only way to finance development. As countries move from lower-income status to middle-income status and demonstrate sound macroeconomic management, they begin to borrow from international financial markets.

Is Haiti Governable Right Now?
Tyler Cowen (Bloomberg View) Jul 12, 2021
Foreign money has overwhelmed any domestic incentives to play by the rules.

The Transatlantic Macroeconomic Divergence
Daniel Gros (Project Syndicate) Jul 12, 2021
Different economic conditions and priorities in the US and the eurozone are leading to divergent macroeconomic-policy approaches. While there is nothing shocking about this, there are potential longer-term effects that should not be underestimated.

Where Have All the Asian Tigers Gone?
Jayati Ghosh (Project Syndicate) Jul 12, 2021
There is no magic bullet that can ensure emerging Asian economies actually emerge and live up to their huge promise. But, given the marked economic slowdown that hit key countries well before the pandemic, a radical reconsideration of capital-account management would be a good place to start.

Will Europe Rise to Biden's Challenge?
Sigmar Gabriel (Project Syndicate) Jul 12, 2021
In seeking to renew the image of liberal democracy in an age of rising authoritarianism, US President Joe Biden recognizes that the first step is for the West to get its own house in order. For Europe, that means finally overcoming longstanding political hurdles to deeper economic integration.

Resuscitating multilateral trade cooperation: A new eBook
Bernard Hoekman and Xinquan Tu (VoxEU) Jul 12, 2021
Rising geopolitical and geoeconomic tensions among major trade powers are undermining the rules-based multilateral trade order. A new VoxEU eBook brings together teams of mostly Chinese and European experts who focus on key challenges confronting the multilateral trading system. Pursuit of issue-specific negotiations on an open plurilateral basis offers prospects for revitalizing the WTO but does not remove the need for balance in the choice of issues put forward for negotiation and for systemic WTO reform. Joint leadership by China and the EU to establish a balanced work programme that spans both old and new issues of interest to all WTO members is a necessary condition to reboot the rules-based trade order.

Monetary policy and the exchange rate under fiscal distress
Enrique Alberola, Carlos Cantú, Paolo Cavallino, and Nikola Mirkov (VoxEU) Jul 12, 2021
Textbook models predict that a monetary policy tightening should lift the exchange rate. Yet the empirical evidence for emerging market economies fails to support this prediction. This column uses data from Brazil to show that the exchange rate's response to monetary policy shocks changes with the fiscal regime. A contractionary monetary surprise leads to an appreciation in normal times. By contrast, a depreciation results when fiscal fundamentals are deteriorating and markets worry about debt sustainability.

Do Households Expect Inflation When Commodities Surge?
Reuven Glick, Noah Kouchekinia, Sylvain Leduc, and Zheng Liu (FEBSF Econ Letter) Jul 12, 2021
Household surveys indicate that consumers expect higher inflation this year than in recent years, as the U.S. economy rebounds from the deep recession. This has coincided with a surge in commodity prices, as strong demand for goods like gas, food, and construction materials is catching producers with low supplies. Evidence suggests that households respond to commodity price increases by raising their expectations of future inflation. However, since surges in commodity prices are transitory, their effects on inflation expectations—particularly long-term expectations—are modest and short-lived.

The digital euro: Political ambitions and economic realities
Heike Mai (DB Research) Jul 12, 2021
The introduction of a digital euro is drawing closer: as a digital version of cash it is primarily intended to be a means of payment rather than an instrument for investment. The ECB wants to strengthen Europe's sovereignty in the world of payments as well as the euro's competitive position vis-à-vis other currencies. However, this will only be achieved if the digital euro is used widely, which is not very likely. A limit is expected on how much users can hold, to prevent a massive outflow of bank deposits into digital central bank money. In this case, lending decisions and money creation would eventually shift to the ECB. Europe would face the question which type of monetary and financial system it wants.

Why a global fund is needed to cut currency risk for developing nations
Sony Kapoor (FT) Jul 13, 2021
Wild fluctuations in exchange rates increase economic fragility and often trigger a debt crisis.

The European school of central banking is no more
Martin Sandbu (FT) Jul 13, 2021
ECB strategy review aligns it with Fed on inflation and unconventional monetary tools.

ESG investing: funds weigh sovereign debt profits against human rights
Laurence Fletcher and Tommy Stubbington (FT) Jul 13, 2021
Activists are increasing pressure on asset managers to stop supporting regimes that abuse their own citizens.

Powell Gets His Inflation
WSJ Jul 13, 2021
'Transitory' price increases are now up 5.4% year-over-year.

Covid comeback raises scythe over Asia's recovery
William Pesek (AT) Jul 13, 2021
Western economies and populations were hammered far harder than East Asia as the world struggled to contain Covid-19 in 2020. But in the vaccination era of 2021, the region's luck is running out. "The contagious Delta strain is sweeping through Asia and hurting Asia's economic recovery," says Katrina Ell at Moody's Analytics.

Decentralized Finance: The Next Big Threat for the Finance Sector
Kevin Werbach (BRINK) Jul 13, 2021
Decentralized finance, or DeFi, is a fast-growing segment of financial markets. Based on a blockchain platform, DeFi provides software services that can remove intermediaries in transactions, allowing for financial services to be delivered at lower costs. But will it take off — or will the financial sector push back?

How businesses are surviving the Covid-19 shock
Sebastian Barnes and Robert Hillman (OECD Ecoscope) Jul 13, 2021
As the economy locked down in March 2020, there were big concerns about how businesses would survive being unable to open normally with retail premises, offices, factories and construction sites closed. There was a fear that these pressures could trigger a "domino effect" that would ripple through the business sector, leading to widespread job losses and bankruptcies.

ECB: New Inflation Target, Old Tools
Andrew Bosomworth and Konstantin Veit (PIMCO) Jul 13, 2021
The European Central Bank (ECB) unveiled a newly reformulated, more ambitious inflation target. Without new mechanisms to achieve it, however, we believe inflation will remain stubbornly stuck well below 2%.

Beijing May Have an Inflation Salve for the World
John Authers (Bloomberg View) Jul 13, 2021
The chances are that weight will be put on the yuan to weaken from here.

Is the ECB Ready for its Credibility Test?
Lena Komileva (Bloomberg View) Jul 13, 2021
The markets may have yawned when the central bank released its new inflation metrics but Lagarde has taken an important step in reestablishing efficacy.

Why Investors Fail to Do What Works
Jared Dillian (Bloomberg View) Jul 13, 2021
Too many people these days tend to wrongly view investing as an epic collision between good and evil, as well as the right versus the left.

Biden Can Promote Both Workers and Competition
Karl W Smith (Bloomberg View) Jul 13, 2021
The president should focus more on labor markets and less on antitrust policy.

This Industrial Giant Expects Inflation to Be Sticky
Brooke Sutherland (Bloomberg View) Jul 13, 2021
Fastenal signals that rising costs and labor shortages will continue to make the reopening environment tricky to navigate.

The Crypto Revolution Will Not Be Public
Tyler Cowen (Bloomberg View) Jul 13, 2021
Is a central bank digital currency, or CBDC, a solution in search of a problem?

The Stablecoin Illusion
Barry Eichengreen (Project Syndicate) Jul 13, 2021
An obscure corner of the digital sphere that was poorly understood two years ago is now subject to increasingly intense scrutiny by central bankers, regulators, and investors. Unfortunately, more intense scrutiny has not necessarily meant better understanding.

Deepening the EU-African Partnership
Werner Hoyer (Project Syndicate) Jul 13, 2021
Although Africa still suffers some of the highest poverty rates in the world, the continent overall has massive potential to achieve broad-based, sustainable growth this century. International financial institutions must listen to forward-looking African leaders and adapt their investment strategies accordingly.

The Global Food System Isn't Working
Hilal Elver (Project Syndicate) Jul 13, 2021
The COVID-19 pandemic has highlighted the fragility and inequity of globalized industrial food systems. Transforming them will require leaders to prioritize the vulnerable over the powerful, enhance resilience, establish transparent value chains, and provide everyone with affordable access to the foods needed for a healthy diet.

Institutional design and the quality and behaviour of government officials
Claire S. H. Lim and James Snyder (VoxEU) Jul 13, 2021
There are many ways to select and retain public officials in representative democracies, and considerable variation in the rules governing that process. This column discusses the literature on selection and retention procedures for low-information public office, and suggests a conceptual framework for assessing the advantages and disadvantages of direct elections. After summarising the historical origins of the institutional factors that influence elections, the authors suggest avenues for future research aided by the digitisation and improved textual analysis of media coverage and government data.

Global Consumer Rebound: As Safe As ... Household Incomes
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Jul 13, 2021
Through Q1-2021, consumer finances remain in good shape, which should support the economic recovery across the major developed economies going forward. Despite the employment declines over the course of the pandemic, disposable incomes climbed in the first quarter of this year, with notable year-over-year rises in the United States, Canada, United Kingdom and Eurozone. In addition, household savings rates are also at historically high levels, which bodes well for future consumer spending as well as economic prospects within the G10. Improved vaccination campaigns in Canada and Europe have led to increased mobility. Despite a slow start, vaccination rates in Canada and Europe are now on par with the U.S. and U.K., and playing a key role in rising mobility. However, Japan is an outlier and is lagging developed market peers not only in consumer finances, but vaccinations and mobility levels as well. In our view, strong consumer finances and improving international vaccination campaigns still support our view for a robust global economic recovery. Japan's recovery is likely to lag the overall G10 recovery as restrictions remain in place and consumer finance dynamics are relatively weak.

Opec is having to adapt to a new oil reality
FT View Jul 14, 2021
Differences are emerging over how to handle the peak in demand.

The G20 has failed to meet its challenges
Martin Wolf (FT) Jul 14, 2021
Lack of a truly global response to the pandemic augurs badly for common action on climate change.

Conspicuous consumption can no longer be our economic engine
Krzysztof Pelc (FT) Jul 14, 2021
Our definition of prosperity now needs to support, not harm, equality and the environment.

We need to look beyond the market to beat climate change
Joe Spearing (FT) Jul 14, 2021
The interaction of humanity with nature has become increasingly mediated by the profit motive.

Long bonds don't care about inflation
Robert Armstrong (FT) Jul 14, 2021
And more thoughts on competition.

UK regulators are wading into the US's Libor transition
Claire Jones (FT) Jul 14, 2021
Top officials, including the Bank of England governor, are pushing firms here to adopt a specific benchmark for dollar borrowing.

Stealing From Drug Makers Is No Way to Vaccinate the World
Tomas J. Philipson and Joel Zinberg (WSJ) Jul 14, 2021
Wealthy governments should pick up the tab for shots in poor countries, which benefit everyone.

Egypt: Overcoming the COVID Shock and Maintaining Growth
IMF Jul 14, 2021
Egypt was one of the few emerging market countries that experienced a positive growth rate in 2020.

A Carbon Border Tax Is a Necessary Nuisance
Chris Bryant (Bloomberg View) Jul 14, 2021
A surcharge on imports that don't meet the European Union's climate standards will annoy trade partners. It's still the right thing to do.

Monty Python and the Search for the Ultimate Index
Aaron Brown (Bloomberg View) Jul 14, 2021
Why is MSCI seeking something that was proved not to exist back in 1977 and then declared dead in 1992?

Global Hunger Is Back With a Vengeance
Bobby Ghosh (Bloomberg View) Jul 14, 2021
The surge in prices of major agricultural commodities is hitting the world's poor especially hard.

Will Another Taper Tantrum Hit Emerging Markets?
Otaviano Canuto (Project Syndicate) Jul 14, 2021
Market movements this month have led to renewed fears that changes in US financial and monetary conditions will trigger a painful wave of capital flight from emerging markets, as happened in 2013. But times have changed, and the greatest risks to emerging markets now lie elsewhere.

A Golden Opportunity to End Destructive Fishing Subsidies
Ngozi Okonjo-Iweala (Project Syndicate) Jul 14, 2021
For years, WTO members have failed to forge an agreement to limit fishing subsidies, thereby allowing the continuation of ecologically devastating fishing operations that would otherwise be economically unviable. But with another round of negotiations this month, they have a chance to make up for lost time.

Shadow Banking in a Crisis: Evidence from Fintech During COVID-19
Zhengyang Bao and Difang Huang (VoxChina) Jul 14, 2021
We evaluate the performance of Chinese fintech and bank credit providers during COVID-19. Comparing samples of fintech and bank loan records across the pandemic outbreak, we find that fintech companies are more likely to expand credit access to new and financially constrained borrowers after the start of the pandemic. However, the delinquency rate of fintech loans triples after the outbreak, but there is no significant change in the delinquency rate of bank loans. These results shed light on the benefits of shadow banking in a crisis and hint at the potential fragility of such institutions when delinquency rates spike.

Moving from a poor economy to a rich one: The role of migrant job tasks
Eran Yashiv (VoxEU) Jul 14, 2021
What are the gains for workers from moving from a poor economy to a rich one? This column examines this question using the case of Palestinian workers who could decide to either work in the (poorer) local economy or commute to work in (richer) Israel. It finds productivity gains experienced by the migrants are largely offset by the low returns for the job tasks offered to these migrants in the richer economy.

Inflationary pressures: Likely temporary but challenging for policy design
Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge (VoxEU) Jul 14, 2021
Global inflation has rebounded from last year's lows faster and sooner than after any previous global recession in the past five decades. This column presents model- and survey-based estimates which suggest that global inflation will rise by about 1-1.4 percentage points this year, pushing it above target in about half of inflation-targeting emerging market and developing economies. This may not be reason for concern provided the increase is temporary and inflation expectations remain well-anchored. However, even if temporary, higher global inflation may complicate the near-term policy choices of economies that still rely on expansionary support measures to ensure a durable recovery.

The flimsy case for cutting UK foreign aid
FT View Jul 15, 2021
Breaking a promise to maintain development spending undermines COP26 diplomacy.

ESG stocks are not in a bubble
Karen Karniol-Tambour (FT) Jul 15, 2021
Despite rush by investors, valuations are not overextended.

Lower economic growth does not mean less human happiness
Krzysztof Pelc (FT) Jul 15, 2021
The shift in spending from shiny goods to meaningful experiences has social and environmental benefits.

BJP turns to coercion to limit India's population growth
Amy Kazmin (FT) Jul 15, 2021
Experts say Uttar Pradesh plan to cut benefits to those with more than two children will hurt the country's poorest.

African start-ups attract international investors — but need local ones too
David Pilling (FT) Jul 15, 2021
Young entrepreneurs are stepping into a void left by unimaginative public policies and shoddy infrastructure.

Xi's squeeze taking the verve out of China Inc
William Pesek (AT) Jul 15, 2021
President Xi Jinping's team must strike a better balance between their control instincts and leaving capitalism alone to work its magic. Beijing's fast-widening tech crackdown and other recent stumbles raise questions about China's growing number of policy mishaps, as well as its broad tendency to put the quantity of growth ahead of its quality.

Congress Goes AWOL on Global Taxation
WSJ Jul 15, 2021
The Yellen ploy at the OECD threatens a core constitutional power.

How to Strengthen the Role of Pan-African Institutions Within the International Financial Architecture
Daouda Sembene (CGD) Jul 15, 2021
In a recent joint piece, African and European leaders underscored the importance of strengthening the positions and roles of pan-African institutions within a new international financial architecture, reaffirming one of the four key goals of the summit on financing African economies held last May in Paris.

Investors Are on the Lookout for a Crash. But Prices Keep Going Up.
Doug French (Mises Wire) Jul 15, 2021
Super-charged government "stimulus" and easy money mean prices have almost nothing to do with reality anymore. But even with such a messed up economy, it's still hard to spot a bust on the horizon.

The Resilience of Private Balance Sheets in Europe during COVID-19
Estelle Xue Liu, Karim Foda, and Sebastian Weber (IMF) Jul 16, 2021
One of the positive surprises about last year's recession is how little damage it inflicted on average household and corporate balance sheets in Europe.

The Fed Needs to Recognize the Recovery
Bloomberg View Jul 15, 2021
Tapering asset purchases now would demonstrate confidence and flexibility.

The Chip Shortage Excuse Is Getting Old
Anjani Trivedi (Bloomberg View) Jul 15, 2021
Some carmakers have proven to be nimble in the face of Covid-era challenges. The whiners risk getting left in the dust.

It's Time for the Fed to Ease Up on Stimulus
Bobby Ghosh (Bloomberg View) Jul 15, 2021
Jerome Powell keeps insisting that inflation is transitory, but the data are all going the other way.

India's New Industrial Policy Is Doomed to Fail
Mihir Sharma (Bloomberg View) Jul 15, 2021
Three decades after abandoning socialism, the government is again trying to guide the economy. It won't work any better this time.

Sorry, No Mastercard? Digital Trade Needs Rules
Andy Mukherjee (Bloomberg View) Jul 15, 2021
Strong-arming companies over data localization is catching on fast in big countries, and Biden should use all his diplomatic powers to stop it.

TSMC Starts Paying the Price for Global Chip Drama
Tim Culpan (Bloomberg View) Jul 15, 2021
Margins are under pressure as the world's most important chipmaker boosts spending to ease the shortage.

Fed Raises Risk of Policy Mistake and Market Accidents
Mohamed A El-Erian (Bloomberg View) Jul 15, 2021
The central bank needs to pull back on quantitative easing before it's too late.

The Rich World's Debt to Island States
Jeffrey D. Sachs and Isabella Massa (Project Syndicate) Jul 15, 2021
As recent disasters have shown, the world's small island developing states are acutely vulnerable to the ravages of climate change, a problem created almost entirely by rich countries. If the international community is serious about sustainable development that leaves no one behind, rich countries must do three things.

The effects of the US-China trade war on firms' vacancy postings
Chuan He, Karsten Mau, and Mingzhi (Jimmy) Xu (VoxEU) Jul 15, 2021
Tariffs are often advertised as an effective tool to protect or even create jobs in specific industries. Empirical evidence suggests differently. Using data from a Chinese online job portal, this column documents how firms facing US tariff increases during the recent trade war posted fewer jobs and offered lower salaries, among other adjustments. Chinese retaliatory tariffs have not induced any systematic adjustments in firms' vacancy postings. The winners of the trade war remain elusive while losers can be found on both sides.

Container shipping and US business cycle fluctuations
Lutz Kilian, Nikolaos Nomikos, and Xiaoqing Zhou (VoxEU) Jul 15, 2021
An essential feature of the globalisation of the economy since the 1990s has been the growing importance of sea-borne container trade for supply chains. This column develops a monthly index of North American container trade since 1997 and incorporates it into a model of the US economy. It shows that rising and falling frictions in container shipping markets help explain the US business cycle and recovery from the Covid-19 recession. The model suggests that the recovery since the start of the pandemic has been slower than raw data suggest and finds evidence of favourable foreign demand and container market shocks.

Are Long-run Inflation Expectations Well Anchored?
Gadi Barlevy , Jonas D. M. Fisher , May Tysinger (FRB Chicago Fed Letter) Jul 15, 2021
In this Chicago Fed Letter, we consider a way of gauging how well anchored long-run inflation expectations might be based on how sensitive these expectations are to incoming news about short-term trends in consumer prices. The sensitivity measure we study varies more over time than the level of long-run inflation expectations, which has remained relatively stable since the mid-1990s.

European shares come in from the cold
Katie Martin (FT) Jul 16, 2021
ECB policy changes add to shift in investor sentiment as corporate earnings recover.

Dangers lurk in exit from Covid recession
Stefan Wagstyl (FT) Jul 16, 2021
It's not just the poor who are threatened by inflation, public support cuts and likely job losses.

Cleaning dirty assets needs fair regulations and a 'bad bank' model
Gillian Tett (FT) Jul 16, 2021
Public and private companies must face the same degree of scrutiny if we are to cut down on toxic holdings.

Could Banking Magic Save Cities From Climate Disaster?
Alex Yablon (NYT) Jul 16, 2021
One way to avoid this circular debate on debt, taxes and spending is to provide states and cities with cheap, reliable low-cost loans.

Industrialization Is the Antidote to Global Poverty. Global Warming Activists Don't Care.
Eben Macdonald (Mises Wire) Jul 16, 2021
Industrialization has greatly reduced poverty worldwide over the past two centuries. But environmentalists want to reverse this progress in the name of fighting climate change.

How a US trade agency blundered in evaluating trade agreements
Gary Clyde Hufbauer (PIIE) Jul 16, 2021
The US International Trade Commission (USITC) is a respected independent, nonpartisan, quasi-judicial federal agency that analyzes trade issues for the president and the Congress. But in June 2021, the commission released a report of 386 pages, titled Economic Impact of Trade Agreements, which committed serious methodological blunders that mislead the public on the value of trade accords implemented since 1984.

Crony globalization: How political cronies captured trade liberalization in Morocco
Adeel Malik, Christian Ruckteschler, Ferdinand Eibl (Brookings) Jul 16, 2021
Developing countries have been liberalizing their trade since the late 1980s. The establishment of World Trade Organization (WTO) in 1995 and the subsequent proliferation of free trade agreements (FTAs) furthered this trend. As a result, applied tariff rates have fallen by 66 percent since 1996. However, such tariff liberalization has not always translated into lower trade protection in developing countries. A key reason for this is that the fall in tariffs has been typically accompanied by an increase in nontariff measures (NTMs), such as policies and regulations that constrain imports.

The UBI Skeptics May Be Right
Bobby Ghosh (Bloomberg View) Jul 16, 2021
A new study suggests a universal basic income does more harm than good — especially to young people.

Replacing Powell Would Be an Unforced Error
Ramesh Ponnuru (Bloomberg View) Jul 16, 2021
Both macroeconomic and political considerations suggest Biden should give the Fed chair another term.

Generation Z Should Fear a Guaranteed Income
Allison Schrager (Bloomberg View) Jul 16, 2021
In a new study, a reliable flow of free money prompted people to take easier, lower-wage jobs, which would hurt our youngest workers most.

The Return of Inflation?
Otmar Issing (Project Syndicate) Jul 16, 2021
Though they have received most of the attention, supply bottlenecks are hardly the only factor to consider when assessing the recent surge of inflation. Far more important are broader structural changes in the economy and the alarmingly complacent attitude of central banks.

Forgotten Latin America
Ana Palacio (Project Syndicate) Jul 16, 2021
The EU well knows that when it comes to expanding its influence within a country or region, China plays the long game. But China is also adept at identifying opportunities to make rapid progress, and Latin America's escalating crises represent a golden one.

The Rise of the Distributariat
Steven Hill (Project Syndicate) Jul 16, 2021
The shift to remote work during the pandemic has brought both disturbing developments, like the increased use of surveillance technology, and promising ones, like the de-linking of employment from geographic location. But without new rules of the road, workers overall will be worse off than they were before COVID-19.

The ECB's new monetary policy strategy
Ignazio Angeloni and Daniel Gros (VoxEU) Jul 16, 2021
The outcome of the long-awaited second review of the ECB's monetary policy strategy was communicated by the central bank on 8 July 2020. This column argues that the review constitutes a mixed bag. The asymmetry of the inflation target, a long standing source of ambiguity and potential policy mistakes, has been corrected by announcing a symmetric central target at 2%. But major ambiguities remain concerning the width of the tolerance band around 2%, the definition of the relevant price index, the interpretation of the inflation process, and the way monetary policy is prepared to team-up with fiscal authorities to preserve the euro's stability going forward. All in all, the glass remains half-empty and the water it contains is somewhat muddy.

Why US regulation is failing the cryptocurrency test
Gary Silverman (FT) Jul 17, 2021
America has so many financial rulemakers that sometimes it winds up without rules.

Don't panic: a little inflation is no bad thing
Kenneth Rogoff (FT) Jul 17, 2021
Having dodged the deepest slump since the Great Depression, there are far bigger risks facing world economy.

Biden's new China doctrine
Economist Jul 17, 2021
Its protectionism and its us-or-them rhetoric will hurt America and put off allies.

Carbon border taxes are defensible but bring great risks
Economist Jul 17, 2021
The EU's proposal may set off another trade war.

Investment in fintech booms as upstarts go mainstream
Economist Jul 17, 2021
Firms' expansion plans and investors' search for returns bring a blizzard of deals and listings.

What the IMF's plan to disburse $650bn in special drawing rights means for poor countries
Economist Jul 17, 2021
Its generosity depends on what rich countries do with their allocations.

Haiti Can Rebuild Its Economy. Here's How.
Noah Smith (Bloomberg View) Jul 17, 2021
The Western Hemisphere's poorest nation much establish a virtuous cycle of growth to pull itself out of chronic poverty. But it's going to need help to get started.

Foreign investment, European integration, and the Single Market
Randolph Bruno, Nauro Campos, Saul Estrin (VoxEU) Jul 17, 2021
Do different economic integration arrangements vary in terms of their capacity to attract foreign direct investment? This column uses a structural gravity framework on annual bilateral FDI data for 142 countries between 1985 and 2018 to revisit this question. It finds that deep integration in the form of EU membership increases FDI by about 60% from outside the EU and by about 50% from within the EU. The effect of EU membership on FDI appears to be significantly larger than that from the less deep integration arrangements (EFTA, NAFTA, or MERCOSUR), with the Single Market the cornerstone of this differential impact.

The EU's green gamble could make it a low-carbon leader
Martin Sandbu (FT) Jul 18, 2021
Europe's decarbonisation programme is an instrument to boost the bloc's industrial and technological development.

Post-pandemic inflation fears are overblown
Rana Foroohar (FT) Jul 18, 2021
There are bigger long-term forces at work — technology, real estate and the future of work.

The Inflation Tax on Capital
Aharon Friedman and Stephen Miran (WSJ) Jul 18, 2021
Biden's capital-gains rate hike is worse than it looks. Under rising prices, it could eat 112% of a return.

Carbon tariffs are a political gimmick, not a real response to climate change
Megan McArdle (WP) Jul 18, 2021
It makes sense to stop running a one-way experiment on the only climate we have. But carbon tariffs aren't the answer.

What Do Post-COVID Supply Chains Look Like?
Richard Wilding (BRINK) Jul 18, 2021
Across the world, companies have been celebrating the return of more normal activity, more reliable supply chains and a boost from renewed consumer confidence. But the new normal for supply chains will bring major changes for societies.

Even if UAE and OPEC+ Make Up, It Won't Last
Liam Denning (Bloomberg View) Jul 18, 2021
In a world approaching peak oil demand, producers who can cash out, like the United Arab Emirates, will.

The two big reasons to doubt the global boom
Ruchir Sharma (FT) Jul 19, 2021
Cracks are appearing in the US and Chinese engines of growth.

China is still a long way from being a superpower
Gideon Rachman (FT) Jul 19, 2021
Beijing may lack the ambition needed to develop a global military presence that rivals the US.

Massive passive: 50 years of the index fund
Robin Wigglesworth (FT) Jul 19, 2021
The industry's growth has been breathtaking, but always accompanied by a fear it will somehow wreck markets.

Joe Biden's Inflation Guide
WSJ Jul 19, 2021
He says more spending lowers prices by . . . well, you figure it out.

How Trump Nearly Justified Car Tariffs
WSJ Jul 19, 2021
The once-secret report, now public, is a warning for a derelict Congress.

China's digital yuan moves hint at a wider reboot
William Pesek (AT) Jul 19, 2021
When economic historians look back at the exact inflection-point moment when China's yuan went truly international, July 2021 could figure prominently. China's hard drive to be the first nation with a central bank-backed digital currency capable of cross-border payment has caught the US, EU and Japan napping.

The European Union's carbon border mechanism and the WTO
André Sapir (Bruegel) Jul 19, 2021
To avoid any backlash, the European Union should work with other World Trade Organisation members to define basic principles of carbon border adjustment mechanisms.

Visualizing the Debt Service Drag on Developing Country Governments
David Mihalyi and Scott Morris (CGD) Jul 19, 2021
The G7 countries pledged a massive scale-up in support of developing-country financing at their recent summit in the UK. How it will be financed remains an open question. But analyzing trends in recent debt flows by lenders to developing countries, and taking stock of the Debt Service Suspension Initiative (DSSI), can provide some important lessons for the G7's new ambitions.

Delta's Unknowns Complicate Medical and Economic Responses
Mohamed A El-Erian (Bloomberg View) Jul 19, 2021
The uncertainty can be countered only by accelerating both medical initiatives and monetary and fiscal policy pivots.

With Bond Yields, Something Has to Give
Gary Shilling (Bloomberg View) Jul 19, 2021
Count on the current high rates of inflation receding as economic growth slows.

Should Central Banks Have a Green Mandate?
Robert Skidelsky (Project Syndicate) Jul 19, 2021
Involving central banks in allocating money on the basis of "greening" compels them to make political decisions for which governments should be held accountable. The UK government's new climate remit for the Bank of England is thus a further step in its abdication of responsibility for ensuring a healthy, sustainable economy.

At what price does safety come for investors?
Mark Spitznagel (FT) Jul 20, 2021
Cost of risk mitigation is often worse than the feared outcome.

Rising dollar stokes nerves for emerging market investors
Jonathan Wheatley (FT) Jul 20, 2021
Few expect rerun of 2013 emerging-market shock but Fed shift and China slowdown pose risks.

The Battles to Come Over the Benefits of Working From Home
Austan Goolsbee (NYT) Jul 20, 2021
Not having to commute was the equivalent of a big bonus for many employees. In the future, bosses may expect more hours in exchange for remote work, an economist says.

Too Much Money Portends High Inflation
John Greenwood and Steve H. Hanke (WSJ) Jul 20, 2021
The Fed should pay attention to Milton Friedman's wisdom.

Thai economy dying on borrowed time
Peter Janssen (AT) Jul 20, 2021
Thailand's gross domestic product (GDP) shrank just 6.1% in 2020, painful but not as bad as expected due to a generous social assistance response from the government. As the kingdom gradually locks down to contain its worst-yet wave of Covid-19, some are skeptical the government will be able to defy downcast projections for a second year in a row.

The exponential rise of Russia's Mir payment system
James King (Banker) Jul 20, 2021
The unparalleled success of Russia's Mir payments system has protected it against US sanctions, making other governments take notice.

A world divided: global vaccine trade and production
Lionel Guetta-Jeanrenaud, Niclas Poitiers and Reinhilde Veugelers (Bruegel) Jul 20, 2021
COVID-19 has reinforced traditional vaccine production patterns, but the global vaccine trade has changed considerably.

Seizing the Opportunity for a Pro-Growth, Post-Pandemic World
Geoffrey Okamoto (IMF) Jul 20, 2021
Toward a brighter future.

Yes, US trade agreements led to economic gains, especially in services, new report says
Katheryn (Kadee) Russ (PIIE) Jul 20, 2021
With a flair for timing, the United States International Trade Commission (USITC) released an assessment of some of the agreements negotiated under Trade Promotion Authority (TPA)—fast-track negotiating ability delegated to the executive branch by Congress—on June 29, days before TPA expired on July 1. The report arrived just in time to add fuel to conversations about TPA's benefits or evils, or whether powers exercised under TPA have much effect at all on the US economy. The USITC is an independent agency that provides data and analyses related to trade for both the executive and legislative branches and houses some judicial processes related to trade and multinational firms. Its internal processes are generally unbiased and its staff holds some of the top US experts in trade agreements and policy. The results were eagerly anticipated.

Covid-19 Is the Salt in South Africa's Wounds
Clara Ferreira Marques (Bloomberg View) Jul 20, 2021
The pandemic has worsened divisions in one of the world's most unequal countries, contributing to a week of violence and destruction. The scars will linger, but smart intervention can help.

Markets Are No Longer Worried About Inflation
John Authers (Bloomberg View) Jul 20, 2021
The bad news is they are now fretting about the post-pandemic recovery.

Quantitative Easing Is a 'Dangerous Addiction'
Mervyn Allister King (Bloomberg View) Jul 20, 2021
A new report spells out the risks. Central banks should take note.

Don't Count Soaring Freight Costs Among Inflation Worries
Conor Sen (Bloomberg View) Jul 20, 2021
Disarray in the shipping world is actually acting as a brake on growth, helping cool the economy until prices can come back down.

Put Central Bankers in Their Place
Howard Davies (Project Syndicate) Jul 20, 2021
Current loose monetary policies in developed economies are likely to increase wealth inequality, and in the short term there is little that monetary and regulatory authorities can do about it. Resolving the problem will instead require finance ministers with a strong political mandate to implement redistributive measures.

Fixing the Global Tech Split
Hoe Ee Khor and Suan Yong Foo (Project Syndicate) Jul 20, 2021
Despite the complex tensions and high stakes in the US-China relationship, a major technology split is likely to be averted in the medium term. But a better long-term outcome for the global economy will require fair and binding multilateral rules of conduct.

Joe Biden's Pro-Market Agenda
Katharina Pistor (Project Syndicate) Jul 20, 2021
With a new executive order cracking down on anti-competitive practices across the US economy, President Joe Biden has set his sights on a problem that has been building for years. Workers, consumers, and small businesses are all being shortchanged, and it is government, not the market, that offers them the best hope.

Free Trade Is Dead. Risky 'Managed Trade' Is Here.
Edward Alden (FP) Jul 20, 2021
The old trade order has gone out the window at breathtaking speed. What comes next is very slippery.

Latin America's Perfect Storm
Javier Solana and Enrique Iglesias (Project Syndicate) Jul 20, 2021
The mass protests that have recently erupted in countries as different as Colombia and Cuba attest to the severity of the crises facing Latin America. Although the region's problems must be addressed above all by its leaders, increased international cooperation will be vital to reviving economic growth and political stability.

How to Reach Net Zero
Helen Mountford and Mauricio Cardenas (Project Syndicate) Jul 20, 2021
While the world has many ambitious long-term climate targets, it lacks strategies to put the right investments and policies in place. The next 10-15 years will be critical – and several factors can promote effective efforts to achieve net-zero emissions by mid-century.

The aftermath of sovereign debt crises
Rui Esteves, Seán Kenny, and Jason Lennard (VoxEU) Jul 20, 2021
There is little consensus on the macroeconomic impacts of sovereign debt crises, despite the regularity of such events. This column quantifies the aggregate costs of defaults using a narrative approach on a large panel of 50 sovereigns between 1870 and 2010. It estimates significant and persistent negative effects of debt crises starting at 1.6% of GDP and peaking at 3.3%, before reverting to trend five years later. In addition, underlying causes matter. Defaults driven by aggregate demand shocks result in short-term contractions, whereas aggregate supply shocks lead to larger, more persistent losses.

What Rising Inflation Means for Stock Investors
Nikolai Roussanov (K@W) Jul 20, 2021
Familiar hedging options like commodities are no longer safe havens against core inflation.

China Economic Update: Growth Slowing, Not Slumping
Brendan McKenna (WF Econ Group) Jul 20, 2021
China's Q2 GDP growth printed lower than we expected and, as a result, we are making another downward revision to our 2021 annual GDP forecast. Despite the downward revision, June activity indicators revealed China's economy is still resilient as retail sales and industrial production beat consensus expectations. Going forward, we are constructive on Chinese growth in the second half of this year, although some softening in data is expected. As far as monetary policy, we believe authorities will maintain their "semi-hawkish" stance and any further cuts to the Reserve Requirement Ratio to be operational in nature rather than a shift to an easier monetary policy stance.

China's overseas investment starts the long climb back
Derek Scissors (AEI) Jul 20, 2021
The Chinese government continues to claim overseas investment and construction have seen little impact from the pandemic, but examining corporate disclosures indicates otherwise. While the China Global Investment Tracker shows investment jumping, it is jumping from a very small base. Construction deals are not being implemented. Although recovery from the pandemic is uneven, it will continue, barring a COVID-19 resurgence. Investment and construction volumes in 2022 and beyond depend partly on Chinese policy. If Beijing's priorities continue to be market dominance and technology extraction, the golden age of outward investment will remain in the rearview mirror. In that case, construction along the Belt and Road will become the main activity. Belt and Road countries easily outpace rich countries in drawing Chinese investors and builders during the pandemic. There has been little Chinese investment in the US the past few years. Meanwhile, US investment in China has passed $1 trillion. Technology loss through outbound American investment and exports is more pressing than through inbound investment.

The time to embrace central bank digital currencies is now
Martin Wolf (FT) Jul 21, 2021
Money must adapt to an era of new technology— but it has to work for society as a whole.

Markets haven't even begun to reflect China-US decoupling risks
George Magnus (FT) Jul 21, 2021
Sell-off in Didi shares is a clear warning of the dichotomy faced by investors.

Is the U.S. Economy Too Hot or Too Cold? Yes.
Neil Irwin (NYT) Jul 21, 2021
The economy is a riddle, but clearly it's having a harder time rebooting itself than had seemed possible in the spring.

Here's the smart way to tax the rich
WP Jul 21, 2021
A wealth tax isn't the best way to get the rich to pay their fair share.

Taming market power could (also) help monetary policy
Romain Duval, Davide Furceri, and Marina M. Tavares (IMF) Jul 21, 2021
New IMF staff research has found ever larger and more powerful companies are making monetary policy a less potent tool for managing the economy in advanced economies, all else equal.

Where China Rules and the U.S. Dollar Reigns
Matthew Brooker (Bloomberg View) Jul 21, 2021
Hong Kong is the focus of antagonism between Beijing and Washington but is most of the rhetoric simply diplomatic theater?

Take the Foot Off the Gas? Not So Fast at the ECB
Mark Gilbert (Bloomberg View) Jul 21, 2021
Many central banks are doing more than talk about talking about tapering. The European Central Bank needs to stand pat for now.

What Happened to Price-to-Book Ratio in Value Investing?
Nir Kaissar (Bloomberg View) Jul 21, 2021
Assets that are developed internally don't appear on companies' books and cause businesses to appear more expensive than they truly are.

Can We Save the Climate Through Better Bookkeeping? Yes!
Bob Hinkle and Peter R Orszag (Bloomberg View) Jul 21, 2021
To achieve net-zero emissions, companies need a way to measure their progress.

What if America Delists Chinese Firms?
Shang-Jin Wei (Project Syndicate) Jul 21, 2021
A recent flurry of official measures in both China and the United States suggests that the two governments are not keen on Chinese firms retaining their US stock-market listings. Moreover, the effects of delisting these often fast-growing companies may be easily manageable for both countries.

The Fallacy of Climate Financial Risk
John H. Cochrane (Project Syndicate) Jul 21, 2021
The idea that climate change poses a threat to the financial system is absurd, not least because everyone already knows that global warming is happening and that fossil fuels are being phased out. The new push for climate-related financial regulation is not really about risk; it is about a political agenda.

Foreign-Invested Enterprises and the Transmission of Global Financial Uncertainty: Evidence from China
Shujie Wu and Haichun Ye (VoxChina) Jul 21, 2021
How are global financial uncertainty shocks transmitted across borders? What is the role of nonfinancial multinational companies in the cross-border shock transmission? Using Chinese firm-level data, we find that rising global financial uncertainty has a significantly larger contractionary effect on real investment for foreign-invested enterprises (FIEs) than their local counterparts. The differential responses to global financial uncertainty are more pronounced for firms with greater investment irreversibility or higher external finance dependence. Furthermore, the contractionary effect is mainly driven by downside uncertainty, while upside uncertainty is modestly expansionary. In addition, the contractionary effect of global financial uncertainty can be spilled over from FIEs to local firms through production networks.

Reforming the macroprudential regulatory architecture in the US
Kathryn Judge and Anil Kashyap (VoxEU) Jul 21, 2021
That a shock the size of the Covid-19 pandemic would trigger distress in financial markets is far from surprising. What is surprising is how much of the distress arose in domains that could have been identified posing a potential threat to stability well before the pandemic hit. This column explores how the US financial regulatory regime is falling short and proposes reforms to increase the likelihood that policymakers will identify and address threats to stability – before they harm the real economy.

The inexorable rise of exchange traded funds
FT View Jul 22, 2021
Structures have saved investors millions in fees but crisis often follows innovation.

The ECB strategy review is a missed opportunity
Malcolm Barr (FT) Jul 22, 2021
If the central bank has the policy tools to return inflation to its objective, why does it not deploy them?

Big Oil's sales spree to cut emissions may leave fossil fuel assets in weaker hands
Bill Barnes (FT) Jul 22, 2021
Bankruptcies and disasters could hit the taxpayer as well as having social consequences.

A lopsided recovery from the pandemic bodes ill for emerging economies
Raghuram Rajan (FT) Jul 22, 2021
Advanced industrial countries can and should take measures to spur investment and growth around the globe.

PBOC is the real Chinese economic indicator
William Pesek (AT) Jul 22, 2021
A surprise move by the People's Bank of China to trim bank reserve requirements struck many as odd, coming at a moment when China's "V-shaped" revival from Covid-19 was making headlines. Two weeks later, however, the bank's actions now looks prescient amid softer-than-expected economic data.

Foreign investments into China are accelerating despite global economic tensions and restrictions
Nicholas R. Lardy (PIIE) Jul 22, 2021
Global economic decoupling from China or, as some call it, reshoring, is not happening. Despite economic and financial tensions and a plethora of foreign restrictions on the transfer of technology to China, China continues to attract record amounts both of foreign direct investment and inflows of portfolio investment into listed onshore Chinese equities and Chinese government bonds. In short, despite the actions of foreign governments, in some critical dimensions China's integration into the global economy continues to deepen.

India's trade reforms 30 years later: Great start but stalling
Douglas A. Irwin (PIIE) Jul 22, 2021
Thirty years ago, in July 1991, India began to make revolutionary changes in its economic policy. After pursuing a closed, import-substitution model of trade and development for the previous 40 years, India changed direction and began opening the economy to trade and foreign investment under reforms introduced by Finance Minister Manmohan Singh. The reforms dramatically improved India's economic performance. Unfortunately, economic reform is always politically difficult, and the country still has a long way to go. But it is worth recalling just how far India has come.

Decoupling economic growth from emissions in the Middle East and North Africa
Martin Philipp Heger and Lukas Vashold (Brookings) Jul 22, 2021
Economic growth plays a critical role in raising living standards and enabling human progress. However, economic growth needs to decouple from negative environmental consequences, as these, in turn, degrade the very foundations of human development. One example of a negative environmental consequence is airborne emissions that lead to climate change and air pollution. To meet any emissions reduction target, the minimum requirement is that economic growth decouples from emissions growth. Hence, at best, emissions would be reduced from year to year, at a steady pace, even if the economy grows—a process called absolute decoupling. At second-best, the growth rate of the economy would outpace the growth rate of emissions—a process called relative decoupling. No decoupling of emissions from economic growth in MENA

Reaching Net Zero Emissions
Florence Jaumotte and Gregor Schwerhoff (IMF) Jul 22, 2021
Our analysis shows that delaying action on carbon pricing by 10 years would likely result in missing a mid-century net zero emission target by a large margin…

How Biden Can Take On China With a Better Belt and Road
Michael Schuman (Bloomberg View) Jul 22, 2021
The G-7 initiative to counter Beijing's infrastructure diplomacy can't end up as a bridge to nowhere. Here's what it should look like.

A Digital Money Rush Is Great. A Run, Not So Much
Andy Mukherjee (Bloomberg View) Jul 22, 2021
Stablecoins will become much more widely used and need balanced regulation before they're too big to fail.

The Dangers of Decoupling
Daron Acemoglu (Project Syndicate) Jul 22, 2021
With Sino-American relations increasingly coming to resemble the geopolitical dynamics of the original Cold War, the world is heading toward a fraught new equilibrium. While some in the West long for a new "Sputnik moment" to motivate investments and reform, they should be careful what they wish for.

Antimonopoly Power
Barry C. Lynn (FA) Jul 22, 2021
The global fight against corporate concentration.

Transitory or Not, Inflation Is Coming for the Consumer
Tim Quinlan and Sara Cotsakis (WF Econ Group) Jul 22, 2021
Inflation poses a tangible threat to a consumer-driven post-pandemic recovery. Massive cash savings, faster income growth and generous tax credits should help consumers keep pace on a micro level, but all that excess cash may contribute to the inflation problem on a macro level. Our third quarter real PCE outlook will have inflation headwinds to overcome.

What crises teach us about innovation
FT View Jul 23, 2021
Governments should allow industry collaboration to solve pressing problems.

Covid wobble punctures calm markets. Get used to it
Katie Martin (FT) Jul 23, 2021
Summer of uncertainty ahead as economies emerge from pandemic.

How blockchain is shaking Swift and the global payments system
Gillian Tett (FT) Jul 23, 2021
A crucial linchpin of the world's financial plumbing is ripe for disruption.

The economic benefits of cities in the developing world
Arti Grover, Somik V. Lall, and Jonathan Timmis (Brookings) Jul 23, 2021
A quick look suggests high agglomeration economies in developing countries.

How a global minimum tax would deter profit shifting and one way it would not
Simeon Djankov (PIIE) Jul 23, 2021
This PIIE chart is the second in our series on international tax reform. For an overview of how the international tax system is supposed to work and an explainer on how firms minimize their taxes under the current system, read "Some of the ways multinational companies reduce their tax bills."

The Changing Map of Economics
Kaushik Basu (Project Syndicate) Jul 23, 2021
The global economy and capitalism are at a crossroads, owing to the COVID-19 pandemic, climate change, the rise of digital technology, and the changing nature of labor markets. Understanding this new world will require major breakthroughs in economic thinking, and closer scrutiny of some of the discipline's core assumptions.

State capacity and development clusters
Tim Besley, Chris Dann, and Torsten Persson (VoxDev) Jul 23, 2021
Evidence from 25 years of data shows countries form persistent 'development clusters' according to their levels of internal peace and state capacity.

Invoicing currency choices by Japanese overseas subsidiaries
Takatoshi Ito, Satoshi Koibuchi, Kiyotaka Sato, Junko Shimizu, and Taiyo Yoshimi (VoxEU) Jul 23, 2021
The currency a firm chooses to invoice in reveals lessons on the prominence of that currency in the international sphere. This column presents survey data from Japanese overseas subsidiaries, highlighting how the use of Asian currencies has been growing steadily. The authors show that among Asian local currencies, Chinese renminbi and Thai baht are the most used currencies by Japanese subsidiaries. If these countries become increasingly important destination markets for regional countries, local currencies will be used more as trade invoice currency in Asia.

Are We in a Rerun of 'That '70s Show'?
Michael Hirsh (FP) Jul 23, 2021
Some economists warn inflation is a ticking time bomb.

Hangover strikes Wall Street after 'epic' Spac party
Ortenca Aliaj (FT) Jul 24, 2021
Regulators closing in on the great boom in blank cheque investment vehicles.

The anatomy of a growth scare
Economist Jul 24, 2021
Depending on where you look, the economic recovery is either on track or in trouble.

We Can Have Low Interest Rates Or Robust Growth. But Not Both.
Daniel Lacalle (Mises Wire) Jul 24, 2021
You can have strong growth, or you can have negative interest rates with low bond yields. You can't have all at the same time.

Why India Can't Repeat Its 1991 Miracle
Shruti Rajagopalan (Bloomberg View) Jul 24, 2021
The ideas that opened up the Indian economy 30 years ago benefited from a system that was readier to receive them.

No, Inflation Isn't Good for Workers
Judy Shelton (WSJ) Jul 25, 2021
The public understands that nominal wage gains are an illusion when the cost of living keeps rising.

As food prices soar, big agriculture is having a field day
Economist Jul 25, 2021
How long will it last?

Why China should fear the EU's carbon border tax
Alicia García-Herrero (Bruegel) Jul 25, 2021
Expect Beijing to soon start lobbying against the proposal.

Stablecoins come with bank-like risks
FT View Jul 26, 2021
Regulators are right to demand that cryptocurrencies are properly regulated.

Can a new commodities boom revive Brazil?
Michael Pooler and Bryan Harris (FT) Jul 26, 2021
The country has become one of the leading producers of foodstuffs, but traditional manufacturing is in steep decline.

A better way to pay for infrastructure investments
Scott Minerd (FT) Jul 26, 2021
A revival of the Obama-era Build America bonds would raise funds with less taxes.

Yuan looks more inviting to global central banks
William Pesek (AT) Jul 26, 2021
Is the Chinese yuan already the world's No 3 currency after the US dollar and Japanese yen? It would be easier to dismiss this assertion by Renmin University of China's International Monetary Institute as fanciful – or pro-Beijing propaganda – if not for two recent overseas reports suggesting a similar trajectory.

Catching up to the frontier through the Human Side of Productivity: the role of skills and diversity
Chiara Criscuolo, Giuseppe Nicoletti, Peter Gal and Timo Leidecker (OECD Ecoscope) Jul 26, 2021
The most productive firms employ more high skilled workers, but medium skill levels are crucial in some countries and sectors.

Stepping Up to Meet Low-Income Countries' Pandemic Recovery Needs
Christian Mumssen and Seán Nolan (IMF) Jul 26, 2021
A rapid, unprecedented response.

Cryptoassets as National Currency? A Step Too Far
Tobias Adrian and Rhoda Weeks-Brown (IMF) Jul 26, 2021
New digital forms of money have the potential to provide cheaper and faster payments, enhance financial inclusion, improve resilience and competition among payment providers, and facilitate cross-border transfers. But doing so is not straightforward. It requires significant investment as well as difficult policy choices, such as clarifying the role of the public and private sectors in providing and regulating digital forms of money.

Measuring internet poverty
Jesús Crespo Cuaresma, Marco Fengler, Katharina Fenz, Homi Kharas, and Leo Saenger (Brookings) Jul 26, 2021
For the majority of the world, it is impossible to think of life without the internet. Think about life and work during COVID-19 when internet connectivity and digitalization were among the most necessary aspects of daily life. The internet allows us to stay entertained, informed, and, most importantly, connected. The internet is now a basic necessity like food, clothes, shelter, or electricity.

Hedge Funds Seek the Amazon of Cryptocurrencies
Mark Gilbert (Bloomberg View) Jul 26, 2021
Finance billionaires are betting increased regulation will broaden participation on digital currency exchanges.

Powell, Whatever You Do, Don't Say the "T" Word
Daniel Moss (Bloomberg View) Jul 26, 2021
For months, Fed officials have been trying to convince the world that inflation is transitory. The Biden administration wants a simpler vocabulary.

Why Delta Threatens to Undermine the Economic Recovery
Noah Smith (Bloomberg View) Jul 26, 2021
Spoiler: It's not more lockdowns.

The Dearth-of-Safe-Assets Era Is Over
Allison Schrager (Bloomberg View) Jul 26, 2021
Why a glut of Treasuries and other "risk-free" investments could be an even bigger problem for the economy.

Capitalists Are No Longer Welcome in China's Classrooms
Tim Culpan (Bloomberg View) Jul 26, 2021
As Beijing makes clear what's truly important for the nation, profit is being squeezed out of private tutoring, an investor darling.

How Xi's Four Pillars of Regulation Will Reshape China's Big Tech
Shuli Ren (Bloomberg View) Jul 26, 2021
Beijing's regulatory crackdown on fintech to education to ride-hailing will alter the corporate landscape and affect foreign investment.

Game on for Green Growth
Paul Gruenwald (Project Syndicate) Jul 26, 2021
Countries in a sustainable world will still have opportunities to grow, trade, innovate, and move up the value chain to secure a brighter future. But they will need to realize these opportunities in an economy that is at one with nature, not external to it.

A Big Step Forward for Global Tax Justice
Josep Borrell and Paolo Gentiloni (Project Syndicate) Jul 26, 2021
The European Union should not merely emphasize its multilateral credentials, but must demonstrate that coordinated international action can deliver for all if every country invests in it. And the recent global agreement to reform corporate taxation does just that.

How to Strengthen Anti-Poverty Efforts
Shameran Abed (Project Syndicate) Jul 26, 2021
Even before the pandemic reversed progress in reducing extreme poverty, policies and programs largely failed to meet the needs of the poorest and most marginalized. Unless that failure is corrected, the most severe forms of poverty will remain entrenched long after the COVID-19 crisis ends.

Globalization Strikes Back
Richard Haass (Project Syndicate) Jul 26, 2021
The still-raging pandemic and climate-related disasters worldwide demonstrate the woeful inadequacy of efforts to address the problematic aspects of globalization. The so-called international community has again shown itself to be anything but a community.

Commodity prices and banking crises
Markus Eberhardt and Andrea Presbitero (VoxDev) Jul 26, 2021
Volatility of commodity prices is a key driver of the likelihood of banking crises in low-income countries.

Central bank digital currency for the UK
Lucile Crumpton and Ethan Ilzetzki (VoxEU) Jul 26, 2021
Central banks across the world are starting to experiment with digital currencies. This column summarises the findings from a survey of a CfM of experts on the UK economy, who were nearly unanimous in agreeing that a Bank of England-issued digital currency would benefit the British economy. Half of the panel also believed that a digital currency would have limited impact on the UK banking system.

A macroprudential framework for non-bank financial intermediation
Maurizio Trapanese (VoxEU) Jul 26, 2021
The policy framework developed so far on non-bank financial intermediation has been based mainly on microprudential tools, looking at individual institutions and activities. This column argues that the effectiveness of these tools could be strengthened if they are accompanied by a comprehensive framework to control systemic risk. This framework could be built around determining the correct pricing of backstops, resolving the trade-off between systemic risk and intermediation costs, mitigating the risk of runs on money market funds, resolving the agency problems in some non-bank financial intermediation transactions, and enhancing the stress test tools.

The impact of fundamentals and promotion policy on trade invoicing
Georgios Georgiadis, Helena Le Mezo , Arnaud Mehl, and Cédric Tille (VoxEU) Jul 26, 2021
The US dollar has a dominant role in currency invoicing of global trade, covering around 40% of international transactions, followed by the euro and the renminbi. This column analyses the effects of economic fundamentals and government policies on currency invoicing patterns. Strategic complementarities and integration in global value chains are both important determinants of dollar and euro invoicing in trade with the US and the euro area, while the establishment of currency swap lines by the People's Bank of China has been associated with increases in renminbi invoicing, with an adverse effect on dollar use.

International Economic Outlook: July 2021
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Jul 26, 2021
A significant pickup in COVID cases has altered the near-term outlook for financial markets. Given a more uncertain outlook, we believe the U.S. dollar's strength versus most G10 and emerging currencies can extend at least through Q3. Should the latest wave of COVID cases prove transitory, we expect the greenback to revert to a softer path for Q4, in part as several foreign central banks move to less accommodative monetary policy. We are not making significant changes to our global growth outlook at this time, and our global GDP growth forecast is unchanged at 6.3%. We do not expect governments to reimpose widespread restrictions, nor do we see consumers voluntarily restricting their own activities to a significant degree in response to the latest COVID developments. Should the latest COVID outbreak persist for an extended period, perhaps until the end of this year, there would be a higher likelihood of governments reimposing restrictions and central banks delaying their tightening plans. Global GDP growth could be lower by perhaps 0.25%-0.50%, and the U.S. dollar could see more sustained strength in this scenario. While we would emphasize this is not our base case, we will of course be monitoring COVID developments closely.

Spreading chip plants around world will add to costs
Kathrin Hille (FT) Jul 27, 2021
Geopolitical pressures mount for diversification of manufacturing locations but that involves risks.

Let competitive forces fly in the airline recovery
Helen Thomas (FT) Jul 27, 2021
Some airlines weakened by Covid or rescued by governments are sitting on landing slots they can't use, it is claimed.

The China discount widens again
Robert Armstrong (FT) Jul 27, 2021
The Communist party expands its crackdown.

The Fed should stop treating all money the same
Brendan Greeley (FT) Jul 27, 2021
As a cash pile mounts in the financial system, the central bank's interest rate policy is working less well than it used to.

Xi Jinping's stock market populism
David P. Goldman (AT) Jul 27, 2021
By the end of 2020, China's stock market looked remarkably like America's. A handful of Internet giants dominated equity market returns and capitalization. But China has decided that it doesn't want an economy dominated by Internet monopolies. Part of Beijing's concern stems from national security considerations.

Latin America Is Missing a $72 Billion Opportunity in Nearshoring
Peter Schechter and Juan Cortiñas (BRINK) Jul 27, 2021
Nearshoring has become an attractive possibility for many businesses trying to reduce supply chain dependency on China. In response, they are looking at destinations in Latin America to bring manufacturing closer to the U.S. But will the region take advantage of this opportunity?

Wealth accumulation shifts from East to West
Joy Macknight (Banker) Jul 27, 2021
The World Wealth Report 2021 sees North America back on top as the global leader in population and wealth of high-net worth individuals, ousting Asia-Pacific after five years.

Drawing Further Apart: Widening Gaps in the Global Recovery
Gita Gopinath (IMF) Jul 27, 2021
The recovery is not assured until the pandemic is beaten back globally.

Fed Will Punt on the Economy, Inflation and Asset Prices
Mohamed A El-Erian (Bloomberg View) Jul 27, 2021
Chair Jerome Powell must deal with growing dissension within his ranks and intensifying expectations for cutting back on bond purchases.

The Blockchain Is Starting to Live Up to Its Potential
Aaron Brown (Bloomberg View) Jul 27, 2021
The digital database has moved beyond cryptocurrencies and is being used in everything from health care to elections.

Workers Are Gaining at the Expense of Shareholders
Gary Shilling (Bloomberg View) Jul 27, 2021
The supply of labor will be constrained for years to come, eating into profits unless companies can find a way to boost productivity.

Inflation Is Getting Worse for Manufacturers
Brooke Sutherland (Bloomberg View) Jul 27, 2021
Solid earnings updates from 3M, Rockwell and Stanley Black & Decker came with a worrying asterisk.

China's 'Great Wall of Steel' Isn't Just Idle Talk
Henry Brands (Bloomberg View) Jul 27, 2021
The level of invective from Beijing is rising, and the U.S. should take it seriously.

Beijing's Big Tech Crackdown Means a Bad Summer for Investors Everywhere
Marcus Ashworth (Bloomberg View) Jul 27, 2021
Beijing's continuing crackdown on Big Tech will have ramifications around the world. It's going to be a bumpy ride.

To Promote Competition, Deregulate
Anne O. Krueger (Project Syndicate) Jul 27, 2021
In a sweeping new executive order, US President Joe Biden has called on regulators to push for greater competition across a wide array of sectors and industries. But sometimes regulation itself is a big part of the problem.

Making Supply Chains More Resilient
Dalia Marin (Project Syndicate) Jul 27, 2021
The current global semiconductor shortage illustrates how geographic clustering of input suppliers can generate upheavals in the rest of the world. Business leaders and policymakers must think now about how to minimize the effects of future exogenous shocks on production networks and the global economy.

China's Animal Spirits Deficit
Stephen S. Roach (Project Syndicate) Jul 27, 2021
The Chinese government has taken dead aim at its dynamic technology sector, the engine of consumption-led economic rebalancing. The authorities' recent actions are symptomatic of a deeper problem: the state's battle to control the energy of animal spirits could sap the confidence of households and businesses.

America's Vital Chip Mission
Laura Tyson and John Zysman (Project Syndicate) Jul 27, 2021
This year's semiconductor shortages underscore the need for a comprehensive strategy to maintain a reliable supply of components that are now indispensable to both the economy and national security. A successful strategy will have four main components.

The effects of currency strength on international trade
Valentina Bruno and Hyun Song Shin (VoxEU) Jul 27, 2021
The strength of the US dollar in currency markets has drawn the attention of researchers, policymakers, and businesses for decades. This column examines the effects of the dollar on international trade, with a particular focus on exports. A strong dollar dampens trade volumes through the financial channel, outweighing any improvement in trade competitiveness. Trade activity is strong when the dollar is weak, but global trade suffers when the dollar is strong.

Capitalists can play a vital part in saving US democracy
Katherine Venice (FT) Jul 28, 2021
Asset owners such as pension funds and university endowments must speak out against voter suppression.

Investors should stay overweight equities during market turbulence
Wei Li (FT) Jul 28, 2021
Monetary responses to rising inflation will be more muted than in past crises.

The Federal Reserve's Big Inflation Miss
WSJ Jul 28, 2021
If you bet on the central bank's price forecasts, you lost.

HK banks may soon need to choose between US and China
Jeff Pao (AT) Jul 28, 2021
Hong Kong-based banks and financial institutions could soon be caught in a legal web of conflicting US and Chinese laws if Beijing moves as expected to impose its new anti-sanctions law, which provides a legal framework for China to retaliate against foreign sanctions targeting its companies and individuals, on Hong Kong next month.

Five Things to Know about the Informal Economy
IMF Jul 28, 2021
The informal economy is a global and pervasive phenomenon. Some 60 percent of the world's population participates in the informal sector. Although mostly prevalent in emerging and developing economies, it is also an important part of advanced economies.

Is Europe's Carbon Market Finally Taking Off?
Alex Privitera (BRINK) Jul 28, 2021
A new green deal, unveiled in July, aims to dramatically overhaul and expand Europe's carbon market to include shipping, housing and transport. The scheme is an incentive to go green faster, but also to make European industries leaders in low-carbon technology. However, this comes with a barrage of criticism from national EU governments.

The Global Recovery May Have Already Peaked
Daniel Moss (Bloomberg View) Jul 28, 2021
The delta variant and low vaccination rates are bedeviling policy makers, just when we were getting used to healthy growth.

Is the US Economy Running Out of Slack?
Willem H. Buiter (Project Syndicate) Jul 28, 2021
Given the unprecedented nature of the COVID-19 pandemic and its effects on labor markets, there is a spirited debate over whether the US economy is close to returning to its full potential. If it is, the US Federal Reserve is at risk of falling behind the curve.

A Central Bank Cryptocurrency to Democratize Money
Yanis Varoufakis (Project Syndicate) Jul 28, 2021
Since 2008 – and more so during the pandemic – central bank money has been showered, via private bankers, on the ultra-rich, while everyone else suffers stagnation and austerity. The time for change is now, and the way to do it is by creating central-bank cryptocurrency. s

The UK's Science and Technology Imperative
Benedict Macon-Cooney and Sam Dumitriu (Project Syndicate) Jul 28, 2021
America is serious about avoiding a future where the West must rely on authoritarian regimes for technology. The United Kingdom's policymakers also need to recognize that science and innovation are not only bedrocks of the West's future prosperity, but also vital for its global standing.

Service offshoring and export experience
Giuseppe Berlingieri, Luca Marcolin, and Emanuel Ornelas (VoxEU) Jul 28, 2021
Trade in services is important but difficult to measure. This column introduces a new dataset that helps understand the contribution of services to global value chains and their role in the process of exporting goods. Firms with longer experience in exporting goods to a destination tend to source export-related service inputs from there rather than domestically, and do so within the boundaries of the business group rather than at arm's length.

Trade and innovation
Marc Melitz and Stephen Redding (VoxEU) Jul 28, 2021
International trade is a key determinant of firm profitability and survival, so it is natural to expect it to influence both incentives to innovate and the rate of creative destruction. This column highlights four key mechanisms through which international trade affects endogenous innovation and growth: market size, competition, comparative advantage, and knowledge spillovers. Each of these mechanisms offers potential static and dynamic welfare gains. Discriminating between alternative mechanisms for these dynamic welfare gains and strengthening the evidence on their quantitative magnitude remain exciting areas of ongoing research.

The Chains That Bind: No Relief for Inflation Until Supply Constraints Ease
Sarah House, Tim Quinlan, and Shannon Seery (VoxEU) Jul 28, 2021
Supply chain problems are more severe and taking longer to work out than initially anticipated, causing the "transitory" factors that are bidding up inflation to last longer. This second installment in our The Chains That Bind series discusses how persistent supply pressures not only will keep inflation higher for longer but also have the potential to stoke inflation that is not so transitory.

China's misguided crackdown on business
FT View Jul 29, 2021
Concerns over Big Tech are legitimate but fear of entrepreneurs is a mistake.

China lays down challenge to the west on crypto
Mohamed El-Erian (FT) Jul 29, 2021
Governments and private sector must adopt more unified approach in response to Beijing.

Climate change is a global threat demanding national solutions
Philip Stephens (FT) Jul 29, 2021
The lofty hopes of the COP26 process will have meaning only if they connect with local politics.

Covid realities temper optimism around eurozone growth
Martin Arnold (FT) Jul 29, 2021
The bloc's GDP is expected to increase at its fastest rate in two decades, but there are fears governments could cut support too soon.

Economy Recovers Pandemic Losses, but Faces New Test
Ben Casselman (NYT) Jul 29, 2021
Gross domestic product grew 1.6 percent in the second quarter, the latest gauge of a rebound that could be challenged by the Delta variant of the coronavirus.

A Not So Grand Infrastructure Deal
WSJ Jul 29, 2021
The GOP gets roads and bridges. Democrats a green bonanza and more.

Growth With Caution Signs
WSJ Jul 29, 2021
Higher prices and slow investment mar a strong second quarter for the economy.

An Infrastructure Bill That Works
Rob Portman (WSJ) Jul 29, 2021
This agreement makes necessary investments without destructive tax increases.

How China Played American Investors
Joseph C. Sternberg (WSJ) Jul 29, 2021
Shares tumbled this week as investors wondered what they really own when they buy Chinese stocks.

Private Investment Is the Answer to Declining Postindustrial Towns
Daniella Bassi (Mises Wire) Jul 29, 2021
Many people want the state to take the lead in revitalizing run-down towns. How does this make sense, when it is private industry that conceived these towns in the first place?

Making The Digital Money Revolution Work for All
Tobias Adrian and Tommaso Mancini-Griffoli (IMF) Jul 29, 2021
Digital money developing rapidly.

Biden Should Cut a Deal to Keep Powell at the Fed
William C Dudley (Bloomberg View) Jul 29, 2021
Appointing Lael Brainard to supervise banks could shore up support among progressive Democrats.

The U.S. Treasury Market Still Needs Fixing
William C Dudley (Bloomberg View) Jul 29, 2021
The Fed's new repo facility is a good first step, but not enough.

Mario Draghi's Second "Whatever It Takes"
Jean Pisani-Ferry (Project Syndicate) Jul 29, 2021
If the Italian prime minister's €248 billion economic recovery plan succeeds, it will change the European conversation, so that neighborly solidarity and fiscal risk-taking are seen as good investments. If it fails, the EU's recovery plan will be remembered as a waste of money and fiscal conservatism will regain the upper hand.

If Banks Don't Drive Europe's Recovery, They Risk Losing Relevance
Ibon Garcia and Will Illingworth (BRINK) Jul 29, 2021
Banks are starting to look to the future, knowing the pandemic has permanently changed the landscape. Now is the time for banks to take the lead on economic issues to move the region beyond recovery — or risk being sidelined.

The credit line channel during Covid
Daniel Greenwald, John Krainer, and Pascal Paul (VoxEU) Jul 29, 2021
Aggregate US bank lending to firms tends to expand following adverse macroeconomic shocks, such as the outbreak of COVID-19 or a monetary policy tightening. Based on detailed loan-level supervisory data, this column shows that these responses are almost entirely explained by large firms drawing on their bank credit lines. However, funding stability for large firms may imply that smaller firms face tighter borrowing conditions. This crowding out effect was at play during the COVID-19 crisis and explore the implications of such spillovers within a structural model.

Carbon taxation and inflation
Maximilian Konradt and Beatrice Weder di Mauro (VoxEU) Jul 29, 2021
Model-based studies on the effect of carbon taxation point to sizeable inflationary effects. This column uses evidence from Canada and Europe over the past three decades to show that carbon taxes changed relative prices but did not increase the overall price level. Instead, they were slightly deflationary. In the case of British Columbia, the driver may have been a fall in household income depressing the prices of non-energy goods, which more than offset rising energy prices. The income compression was most pronounced among the richest households, suggesting that the redistribution scheme achieved its intended aim of favouring low-income households.

Long-term effects of the Inca Road
Ana Paula Franco, Sebastian Galiani, and Pablo Lavado (VoxEU) Jul 29, 2021
Historical institutions can have long-lasting effects on societies and economies. The Inca Road has been a linchpin of the colonial economy in the New World, but its impact on current development has not been studied in great depth. This column examines the impact of the road on today's educational, development, and labour outcomes. Proximity to the Inca Road increased the average level of educational attainment and decreased stunting among children by 5%. It boosted average hourly wages by 20% and reduced informality by six percentage points. Moreover, these e?ects were around 40% greater among women.

The Chains that Bind: The Cupboard Was Bare
Tim Quinlan, Sarah House, and Shannon Seery (WF Econ Group) Jul 29, 2021
This third installment in our The Chains that Bind series argues that supply chain issues are accentuating the inventory cycle, and the timing of the eventual resolution will be influential for GDP growth. Our best read on this is that a postponed restocking will boost GDP as soon as supply chains allow, perhaps by the end of this year. The risk is that businesses, scarred by the experience of the past year, may overcompensate in the other direction and overbuild inventories, leading to eventual production cuts.

The world needs help in going back to school
FT View Jul 30, 2021
Absence from classrooms has caused severe damage in poorer countries.

Robinhood push to democratise finance falters with own shares
Madison Darbyshire (FT) Jul 30, 2021
IPO gives greater voting rights to founders of upstart brokerage.

Chinese ructions test the buy-the-dip reflex of investors
Katie Martin (FT) Jul 30, 2021
Sell-off comes after a series of market rallies from shocks.

My Country Has Been a Dictatorship Before. We Can't Go Back.
Rached Ghannouchi (NYT) Jul 30, 2021
One-man rule is not the solution to Tunisia's economic problems.

A Distorted View of Wealth Inequality
WSJ Jul 30, 2021
Include pensions and Social Security, and the figures are less stark.

Are Stratospheric Stock Valuations Here to Stay?
Nir Kaissar (Bloomberg View) Jul 30, 2021
The past 30 years have either been an anomaly or a new normal. Don't bet against the latter.

No Good Comes From a Shrinking Population
Karl W Smith (Bloomberg View) Jul 30, 2021
The economic consequences of a smaller nation are more dire, and more wide-ranging, than commonly believed.

No End In Sight to Supply-Chain Snarls, So Now What?
Brooke Sutherland (Bloomberg View) Jul 30, 2021
Freight logjams and shortages of everything from garbage truck parts to chips are forcing manufacturers to come up with alternatives.

Is Pax Sinica Possible?
Lee Jong-Wha (Project Syndicate) Jul 30, 2021
Chinese President Xi Jinping seems to want to build a Pax Sinica, which would compete with – and even replace – the Pax Americana that has prevailed since the end of World War II. But realizing this vision will require China to overcome some daunting internal and external challenges.

The Circular Economy Grows Up
Andrew Sheng and Xiao Geng (Project Syndicate) Jul 30, 2021
If we do not abandon the prevailing "take-make-waste" pattern of global production and consumption soon, we will need the equivalent of almost three Earths to provide enough natural resources to sustain current lifestyles, and annual waste generation will increase by 70%. But there is a better way.

European Colonialism in Africa Is Alive
Stelios Michalopoulos and Elias Papaioannou (Project Syndicate) Jul 30, 2021
By plundering Africa's resources and carving it up into artificial states, Europe's colonial powers created vicious cycles of violence, poverty, and authoritarianism that are playing out to this day. But overcoming this legacy will require much more than toppling statues in Bristol.

Globalisation and the economic geography of social activism
Pamina Koenig, Sebastian Krautheim, Claudius Löhnert, and Thierry Verdier (VoxEU) Jul 30, 2021
With economic globalisation facing a legitimacy crisis fuelled by various scandals associated with globalised value chains, advocacy NGOs and their campaigns are in the limelight. Still, little systematic knowledge has been generated on how global sourcing and exporting decisions of firms interact with the upsurge of this international social activism. This column uses a unique dataset on NGO campaigns against firms to show how the internationalisation and geographical structure of NGO campaigns are closely intertwined with patterns of global production and trade.

How Americans Think About Trade
Diana C. Mutz (FA) Jul 30, 2021
Winners, losers, and the psychology of globalization.

The Chains that Bind: Profits & the Courage to Pay Up
Shannon Seery, Tim Quinlan, and Sarah House (WF Econ Group) Jul 30, 2021
Supply issues have persisted because of the inability to catch up with the tremendous pace of demand we are still experiencing. While rising costs have no doubt been a headache for businesses, the real disappointment for profitability is missing sales due to a lack of inventory and labor. In this fourth and final installment in our The Chains that Bind series, we evaluate how profits could be even stronger if it were not for supply problems. Businesses have pricing power, but to exercise it they have to source the people and materials necessary and have the courage to pay up for it.

Eurozone Enjoying an Economic Recovery Sweet Spot
Nick Bennenbroek (WF Econ Group) Jul 30, 2021
Eurozone Q2 GDP grew a stronger-than-expected 2.0% quarter-over-quarter, with particularly strong gains reported for Italy and Spain. July inflation remained contained overall, as the headline CPI quickened only slightly to 2.2% year-over-year. Confidence surveys and PMI data suggest that economic momentum continued into at least the early part of the third quarter, although the recent renewed rise in COVID cases means some caution remains regarding growth prospects. Given this favorable growth and inflation mix we expect the European Central Bank to maintain its accommodative monetary policy and, indeed, ease policy further in December by announcing a further increase in its bond purchase program.

The Big Tech boom marks a lasting change
FT View Jul 31, 2021
Superfast growth will slow, but the shift in market power is here to stay.

Is the world facing an inventory recession?
John Dizard (FT) Jul 31, 2021
Demand for goods might drop after stockpiles are run down as supply chain problems ease.

Home Prices Are Soaring. Is That the Fed's Problem?
Jeanna Smialek (NYT) Jul 31, 2021
Low interest rates are one reason that the housing market has taken off. They are far from the only one.

Unrest and economic underperformance haunt the emerging world
Economist Jul 31, 2021
The key to better times remains openness.

The case for a further narrowing of euro-zone bond spreads
Economist Jul 31, 2021
Italy's have the furthest to fall. And it is coming into the fold.

The effect of macroeconomic uncertainty on household spending
Olivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko, Geoff Kenny, and Michael Weber (VoxEU) Jul 31, 2021
The former chair of the US Council of Economic Advisers, Christina Romer, observed that "uncertainty has almost surely contributed to a decline in spending," while discussing the Great Recession. This column provides direct causal evidence from a randomised control trial implemented on a large sample of European households that the "almost surely" can be safely dropped. Higher uncertainty makes households spend less on average.