News & Commentary:

Articles/Commentary

Business leaders need to speak up for democracy
Gillian Tett (FT) Jul 1, 2022
Staying silent might be easier but it could damage both company reputations and the US political economy.

Crypto loses its hedge role
Ian Taylor (FT) Jul 1, 2022
Investors should tread warily in a very volatile market.

Talking tough on energy markets is no way to woo investors
Helen Thomas (FT) Jul 1, 2022
Conflating complicated long-term market reform with flip-flopping over windfall taxes is odd and unhelpful.

A soft landing is becoming a distant dream
Katie Martin (FT) Jul 1, 2022
Aeroplane metaphors do little to disguise the fact that central bankers are struggling with the inflationary overshoot.

The looming risks in private equity returns
Anneka Treon (FT) Jul 1, 2022
More insulated than stock markets, the industry is still exuberant — but the reckoning may be coming.

Central banks look to China's renminbi to diversify foreign currency reserves
Kate Duguid and Nikou Asgari (FT) Jul 1, 2022
Dollar's dominance could gradually decline as a result of geopolitical flare-ups, UBS survey shows.

Darkness descends on developing Asia's currencies
William Pesek (AT) Jul 1, 2022
The falling Japanese yen and Chinese yuan may be getting all the headlines, but the real currency calamity is brewing under the radar elsewhere – in developing Asia. For officials in Manila, New Delhi, Jakarta and elsewhere in Asia, rising US interest rates are just one of many threats converging in the second half of 2022 as the fallout from Covid-19 collides with inflation.

New World Bank country classifications by income level: 2022-2023
Nada Hamadeh, Catherine Van Rompaey, Eric Metreau and Shwetha Grace Eapen (WB) Jul 1, 2022
The World Bank assigns the world's economies[1] to four income groups—low, lower-middle, upper-middle, and high income. The classifications are updated each year on July 1 and are based on the GNI per capita of the previous year (2021). GNI measures are expressed in United States dollars (USD), and are determined using conversion factors derived according to the Atlas method.

How sharp will be the global slowdown?
Justin Damien Guénette (Brookings) Jul 1, 2022
Possibility of a sharp global downturn with three shocks.

Today's global economy is eerily similar to the 1970s, but governments can still escape a stagflation episode
Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge (Brookings) Jul 1, 2022
Inflation and growth: moving in opposite directions.

The ECB Needs Positive Interest Rates Sooner Rather Than Later
Marcus Ashworth (Bloomberg Opinion) Jul 1, 2022
Policy makers in the euro area need to accelerate their efforts to curb inflation.

Aid to Ukraine Should Not Come at Africa's Expense
Chris Heitzig and Richard Newfarmer (Project Syndicate) Jul 1, 2022
As governments and other donors accelerate much-needed aid to Ukraine, they should not simultaneously scale back development-assistance programs for Africa. Doing so would increase poverty, exacerbate food shortages, and undermine democracy on the continent.

The Supply-Side Fight Against Inflation
Michael Spence (Project Syndicate) Jul 1, 2022
Central banks' only real option for tackling inflation is to reduce demand – an approach that implies a significant drag on global growth. But even as interest rates rise, a recession can be avoided if policymakers recognize the large role that supply-side measures must play in restoring price stability.

The WTO Is Back
Ngozi Okonjo-Iweala (Project Syndicate) Jul 1, 2022
The agreements adopted at the World Trade Organization's recent ministerial conference lay a foundation for members to rebuild trust, reach further deals, and advance much-needed institutional reforms to keep the global trade body fit for purpose. The goal must be to continue delivering results for people around the world.

The 1970s Weren't What You Think
Adam Tooze (FP) Jul 1, 2022
Yes, fiscal and monetary policy seemed stuck for too long in expansionary mode. But the era also saw the rebalancing of the world economy.

Hong Kong's mid-life existential crisis
FT View Jul 2, 2022
The city's distinct character risks being crushed by Beijing's zeal for control.

When it comes to inflation, it's not déjà vu all over again
Seth Carpenter (FT) Jul 2, 2022
We may not be living a rerun of the 1970s but the path ahead is not rosy.

Inflation Is Posing 19 Problems for One Central Bank
Eshe Nelson (NYT) Jul 2, 2022
After more than a decade of worrying about low inflation, the European Central Bank is trying to tackle the problem of high inflation across the eurozone's economies.

Why Mexico is missing its chance to profit from US-China decoupling
Michael Stott and Christine Murray (FT) Jul 3, 2022
A predicted economic boom from American companies relocating closer to home has not arrived. Many blame the president.

Central banks should keep their cool on inflation
Martin Sandbu (FT) Jul 3, 2022
Policymakers need to be sure challenges are really durable before sacrificing jobs and growth.

Here We Go Again: The Fed Is Causing Another Recession
Jon Wolfenbarger (Mises Wire) Jul 2, 2022
After suppressing interest rates and creating asset bubbles for more than two decades, the Fed is now juicing up interest rates—and wrecking the economy.

Japan's post-COVID-19 approach to supply chains
Yasuyuki Todo (EAF) Jul 3, 2022
Onshoring does not necessarily promote supply chain resilience because Japan bears a substantial risk of natural disasters, including mega earthquakes and the expected eruption of Mt. Fuji that could hit major industrial regions in the near future.

Supply chains are more resilient than they appear
Jayant Menon (EAF) Jul 3, 2022
The jury is in, and the verdict is clear: efforts to encourage reshoring have largely been a failure.

OPEC+ Did Its Job, But Don't Expect It to Disappear
Julian Lee (Bloomberg Opinion) Jul 3, 2022
Oil producers have added back all the production they cut in 2020 — at least on paper — but members have no reason to quit the group.

Brexit Has the UK Traveling the Wrong Way in Time
Niall Ferguson (Bloomberg Opinion) Jul 3, 2022
Even considering the disruptions of Covid and the war in Ukraine, leaving the EU has been an expensive divorce for Britain.

Emerging markets are in better shape than you think
Ruchir Sharma (FT) Jul 4, 2022
Dour commentary misses reform in the largest developing economies since the taper tantrum last sent investors fleeing.

The inflation blame-game will lead to bad outcomes
Jean Boivin (FT) Jul 4, 2022
An absolutist, 'whatever it takes' approach was the right call in the financial crisis. It won't work to rein in current price rises.

Banks cannot escape a gloomy economic outlook
Patrick Jenkins (FT) Jul 4, 2022
A pause on stress tests by European regulators feels oddly out of sync with a darkening picture.

Global inflation: Japan faces a moment of truth
Kana Inagaki and Leo Lewis (FT) Jul 4, 2022
The collapse of the yen piles pressure on the central bank to change course after decades of loose monetary policy.

What Russia's debt default does and doesn't mean
Nasir Aminu and Rodrigo Olivares-Caminal (AT) Jul 4, 2022
Russia's recent default on its foreign debt – its first since 1918 – has been hailed as proof that the sanctions imposed by Western governments since the invasion of Ukraine in February are working. Potential longer-term implications include the impact a default will have on Russia's ability to attract investors, now and in the future.

The World Needs More Than Crumbs From the G7's Table
Mark Malloch-Brown (NYT) Jul 4, 2022
The Group of 7 missed a chance to act, but it's not too late.

America's External Sustainability Is at Risk
Yu Yongding (Project Syndicate) Jul 4, 2022
Despite running a current-account deficit for decades, America's investment income has remained positive, meaning that debt-servicing was never a problem for the US government. But, amid geopolitical tensions and monetary tightening, America's external sustainability is hardly a foregone conclusion.

Rethinking the Global Order
Turki bin Faisal al-Saud (Project Syndicate) Jul 4, 2022
For decades, it has been obvious that the UN system needs to be reformed to account for the realities of the twenty-first century. Yet recommendations to restructure global governance have been ignored by those with the power to carry them out, leaving us with a world of multiplying crises for which there are few solutions.

The Energy Price Roller Coaster
Kenneth Rogoff (Project Syndicate) Jul 4, 2022
In the longer term, oil and gas prices look set to rise unless investment picks up sharply, which seems unlikely given current policy guidance. Giant waves of supply and demand shocks will likely continue to roil energy markets and the global economy.

Cryptocurrencies are not the new monetary system we need
Martin Wolf (FT) Jul 5, 2022
They proliferate uncontrollably and are objects of speculation rather than stores of value.

Liquidity strains in markets need structural fixes
Eric Pan (FT) Jul 5, 2022
It might be easier to target funds but broader remedies are required to deal with times of stress.

The west looks like a political risk to Asian allies
Ben Bland (FT) Jul 5, 2022
Economic and political turmoil at home is undercutting our Indo-Pacific ambitions.

Focus on emerging markets' long-term winners
David Stevenson (FT) Jul 5, 2022
Vietnam and India look to have taken advantage of China's meltdown.

Biden's Missing Trade Policy
WSJ View Jul 5, 2022
Allies and rivals are striking new deals while the U.S. loses ground.

ESG Feeds Inflation, Hurts Economic Growth
David R. Henderson and Marc Joffe (WSJ) Jul 5, 2022
When companies divert their attention to social goals, they produce less, driving prices higher.

Inflation is even worse than the official numbers suggest
Henry Olsen (WaPo) Jul 5, 2022
No wonder Americans are furious about rising prices.

Is US Fed fomenting another Asian financial crisis?
William Pesek (AT) Jul 5, 2022
Market turbulence is testing Asia's hard-won gains as never before. That's particularly so as the US Federal Reserve loses control of the fastest consumer price surge in 40 years. Now, Asia is poised to become collateral damage as US Fed Chairman Jerome Powell plays catch up with the most aggressive interest rate hikes since the 1990s.

What America can learn from its past bouts of inflation
Brad DeLong (Economist) Jul 5, 2022
In 1947 and 1951 the problem went away by itself. In 1920 the Fed tightened too much, says the economist

A Euro Warning Worth Heeding From Italy
Lionel Laurent (Bloomberg Opinion) Jul 5, 2022
Ex-Premier Enrico Letta says Europe needs to step on the gas to address soaring energy costs.

Europe Is Low on Energy
Jessica Karl (Bloomberg Opinion) Jul 5, 2022
Shortages and soaring prices have the continent on recession watch.

Consumer Debt Isn't Stressing Banks — Yet
Paul J Davies (Bloomberg Opinion) Jul 5, 2022
Healthy household finances are likely to keep a lid on repayment problems for most lenders.

Believe It or Not, the Market Has Three Silver Linings
Mohamed A El-Erian (Bloomberg Opinion) Jul 5, 2022
The pain may not be over for investors, but genuine value is being restored, government bonds are mitigating risk again, and the chief risks aren't derailing the system's functioning.

Private Equity's Goldilocks Era Is Coming to an End
Nir Kaissar (Bloomberg Opinion) Jul 5, 2022
If the bear market persists, the industry will have to concede that its investments have declined in value, and the writedowns could be substantial.

All That Is Solid Melts into Inflation
Harold James (Project Syndicate) Jul 5, 2022
Policymakers in Western industrialized countries would do well to remember that periods of high inflation historically have led to much bigger problems. By trying to bind societies together with money, central banks have repeatedly sown the seeds of broader political and social dissolution.

The New Productivism Paradigm?
Dani Rodrik (Project Syndicate) Jul 5, 2022
There are signs of a major reorientation toward an economic policy framework that is rooted in production, work, and localism instead of finance, consumerism, and globalism. It might just turn into a new policy model that captures imaginations across the political spectrum.

Serial Entrepreneurship in China
Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, and Xiaobo Zhang (VoxChina) Jul 6, 2022
New firms have been an important engine of growth in the Chinese economy (Brandt, Van Biesebroeck, and Zhang 2012). Drawing on data on the universe of all firms in China, we study entrepreneurship and the creation of new firms in China through the lens of entrepreneurs who operate a series of firms over their lifetime, i.e., serial entrepreneurs (SE). In principle, their advantage over non-serial entrepreneurs may lie in their ability to identify new business opportunities and superior productivity; alternatively, it may rest in connections providing better access to scarce factors such as finance that facilitate entry. We find that ability is a major driver of serial entrepreneurship and that firms run by SEs are more productive. However, capital constraints are key to explaining the choice to operate these firms concurrently or sequentially. Risk diversification and the value of upstream/downstream linkages figure prominently in sectoral choices, conditional on the sector of the SE's first firm.

The Increase in Inflation Compensation: What's Up?
Jens H.E. Christensen (FRBSF Econ Letter) Jul 5, 2022
Supply and demand imbalances associated with the COVID-19 pandemic have contributed to a sharp increase in price inflation since early 2021. In response, market-based measures of short-term inflation compensation have risen sharply in the United States. Survey-based measures suggest that this has not affected longer-term inflation expectations. However, analyzing the difference between market prices of standard and inflation-indexed government bonds provides tentative indications that investors have raised their 10-year inflation expectations since spring 2021 to levels above their historical range.

Argentina Falling Deeper Into Crisis?
Brendan McKenna (WF Econ Group) Jul 5, 2022
The resignation of economy minister Martin Guzman has the potential to upend Argentina's long-term economic recovery. Guzman, an investor friendly reformist, was committed to fulfilling Argentina's commitments under the new IMF plan and bringing longer-term stability to Argentina's economy. His successor, Silvina Batakis, a former economy minister aligned with Cristina Kirchner, is more of an unknown to the investor community; however, her alignment with Kirchner makes us nervous that she could boost fiscal spending and disregard the IMF program. With limited policy levers and insufficient foreign exchange reserve buffers, as well as sentiment toward Argentina worsening, another large peso devaluation could be looming. Going forward, we will be mindful of the policy priorities set by Batakis and how progress toward the IMF's objectives is evolving. Any deviations from achieving fiscal balance and other reform items could see pressure build on the peso to the point where a 10%-15% devaluation is needed to avoid another full-blown crisis.

The big risks to America in bringing supply chains home
Alan Beattie (FT) Jul 6, 2022
The infant formula and Covid vaccine crises show the perils of self-sufficiency.

Why the yen is down but not necessarily cheap
Benjamin Shatil (FT) Jul 6, 2022
A sustained appreciation of the currency will ultimately require a shift in the composition of Japanese trade flows.

Pound traders look past UK political turmoil
Katie Martin (FT) Jul 6, 2022
Sterling weakness is driven by broader factors such as rising US interest rates and the impact of Brexit.

The stock market still has high hopes
Robert Armstrong (FT) Jul 6, 2022
And why emerging markets have hung tough.

The Global Search for Energy Security
Daniel Yergin (WSJ) Jul 6, 2022
As inflation soars, the West is finally getting serious about a goal it abandoned years ago.

A debt crisis in Sri Lanka could spread worldwide. The U.S. must help.
WaPo View Jul 6, 2022
The parallels with the debt crisis of the '70s and '80s are striking.

Americans face 20% inflation for essentials
David P. Goldman (AT) Jul 6, 2022
The US Bureau of Labor Statistics says that consumer prices rose 8.2% over the past year, but to most American families, the real inflation rate is 20%, the highest in US history. Rent, food, energy and automobiles account for 63% of the US Consumer Price Index (CPI), but for the majority of US families, they make up the vast majority of monthly expenditures.

Is President Xi's Dual Circulation Strategy for China Under Threat?
Sarah Y. Tong (BRINK) Jul 6, 2022
China's development objectives have shifted from a model in which domestic and international dual circulation reinforce each other to a clear emphasis on developing domestic demand, production capacity and supply chains. How the reorientation toward a domestic-centered approach is part of China's strategy to safeguard stable growth through the worst of the pandemic, focus on national security considerations, and promote the modernization of production and supply chains.

What are central bank reserves for?
Julian Jacobs (OMFIF) Jul 6, 2022
Fewer central banks are prepared to use their reserves during a crisis. This is one of several notable findings from OMFIF's Global Public Investor 2022 report. Amid significant global chaos and crises, these results may appear surprising. The forces that underlie this shift, moreover, provide an interesting example of the complicated dynamics central banks face in their attempts to simultaneously ensure economic security while offering signalling and guidance about the state of the macroeconomic and financial system.

Middle East Needs Fairer Taxes to Aid Growth and Ease Inequality
Jihad Azour, Priscilla Muthoora and Geneviève Verdier (IMF) Jul 6, 2022
More progressive taxes with fewer exemptions would help governments pay for immediate spending priorities and make societies fairer.

Africa Is Not Europe's Gas Station
Mohamed Adow (Project Syndicate) Jul 6, 2022
Germany and Italy are telling Africans that we should saddle ourselves with fossil-fuel infrastructure that will soon become a drag on our economies and propel us toward climate disaster. We must respond with a firm no, and instead demand that European countries support us in the development of renewable-energy systems.

Stablecoins, Riskycoins, and Dodgycoins
Willem H. Buiter and Anne C. Siebert (Project Syndicate) Jul 6, 2022
Recent price implosions have shown that not all so-called stablecoins are so stable after all. As policymakers draft regulations to bring some order to the crypto industry, they should focus on the economic functions that various digital tokens perform, rather than on formal legalistic labels.

Eurozone Divergences Are Back
Lucrezia Reichlin (Project Syndicate) Jul 6, 2022
The effects of the European Central Bank's monetary tightening will not be evenly distributed across the eurozone – and could jeopardize financial stability in some countries. To avoid this outcome, the ECB must pursue targeted asset purchases.

Learning from prices does not come for free
Jordi Mondria, Xavier Vives, and Liyan Yang (VoxEU) Jul 6, 2022
It is commonly assumed that market participants are all equally and highly sophisticated and know the exact relationship between fundamentals and prices. But this ignores the reality that investors spend millions of dollars analysing market data to better understand and hopefully profit from any patterns in stock charts. This column presents a framework to relax these assumptions and explore how investor sophistication can affect market prices and trading volumes. The framework provides theoretical underpinnings to some of the most well-known anomalies in finance and can help explain trends in the asset management industry.

Trade, family formation, and fertility in low-fertility settings
Osea Giuntella, Lorenzo Rotunno, and Luca Stella (VoxEU) Jul 6, 2022
Germany's low natality rate has been a major source of concern for politicians for decades. Using longitudinal data from the German Socio-Economic Panel, this column analyses the effects of trade integration on family choices in Germany. The authors find that exposure to greater import competition from Eastern Europe led to worse labour market outcomes and lower fertility rates. The trade effects are concentrated among men, low-educated, and full-time employees.

Capturing top incomes and measuring inequality in Europe
Rafael Carranza, Marc Morgan, and Brian Nolan (VoxEU) Jul 6, 2022
The problem of the 'missing top' in household income surveys has been highlighted by tax-based estimates of top income shares. This column shows that tax-based top income adjustments to EU Statistics on Income and Social Conditions surveys often make a substantial difference, but to an extent that varies widely across European countries and over time. Incorporating data from administrative sources in the surveys themselves helps to reduce the need for post-survey adjustment but may not eliminate it, and the nature of the country's tax system and data are highly relevant for how best to combine data from both sources.

Co-ordination is needed to avoid reawakening ghost of eurozone debt crisis
Silvia Ardagna (FT) Jul 7, 2022
Monetary and fiscal policymakers need to act to reduce risks for individual countries as rates rise.

That Was the Stagflation That Was
Paul Krugman (NYT) Jul 7, 2022
Markets are sounding the all-clear. Is the Fed listening?

The Fed Ignored the Money Supply, and a Recession Is Coming
John Greenwood and Steve H. Hanke (WSJ) Jul 7, 2022
Jerome Powell said M2 doesn't have 'important implications' as inflation hit a 40-year high.

Imports Would Give America a Boost
Fred P. Hochberg (WSJ) Jul 7, 2022
Rolling back Trump's tariffs on Chinese goods would help fight inflation.

Biden's reckless spending set off inflation. Can you believe he wants to add more?
Marc A. Thiessen (WaPo) Jul 7, 2022
Americans have amassed trillions in savings, and they're not spending it.

Boris Johnson's biggest failing? It's the post-Brexit economy.
Stryker McGuire (WaPo) Jul 7, 2022
Brexit has damaged the British economy – and Johnson bears much of the blame.

Decades of political upheaval have hampered Latin American economic growth
Monica de Bolle (PIIE) Jul 7, 2022
Latin America has struggled to sustain economic growth since the rebuilding of democracy in the 1980s. Limited policy continuity has been partly to blame, as successive governments lurched from right to left and undid the economic progress of their predecessors.

25 years since the East Asian financial crisis: 2 forgotten lessons
Homi Kharas (Brookings) Jul 7, 2022
The first lesson is that when economies are built on a faulty foundation, growth is not always beneficial. The second forgotten lesson from the East Asia crisis is that the onset of debt crises has more to do with weak institutions and low resilience than with debt indicators.

The German Trade Deficit Is No Cause for Alarm
Tyler Cowen (Bloomberg Opinion) Jul 7, 2022
Germans have long placed too much emphasis on the importance of a surplus to their country's prosperity.

A Global Famine Is Still an Avoidable Disaster
Leonid Bershidsky (Bloomberg Opinion) Jul 7, 2022
Putin's desire to maintain Russia's status as a leading grain exporter gives the U.S. and its allies leverage to try to restore Ukraine's unhindered access to global commodity markets.

At 5 Years, India's Historic Tax Reform Is Out of Fuel
Andy Mukherjee (Bloomberg Opinion) Jul 7, 2022
A uniform levy on goods and services replaced a dizzyingly complex system. But the compromises required to make it happen have their own pitfalls.

Talk of an Oil Market Recession Is Overblown
Javier Blas (Bloomberg Opinion) Jul 7, 2022
The global economy isn't slowing enough to spark a collapse in crude prices.

US Labor Market Shows No Signs of an Imminent Recession
Conor Sen (Bloomberg Opinion) Jul 7, 2022
Americans are working more hours than before the pandemic, pointing to robust growth rather than a declining economy.

Absorbing the Shock of the Energy Transition
Owen Gaffney (Project Syndicate) Jul 7, 2022
In a world beset by crises that are likely to grow even more severe amid rising temperatures and deepening inequality, it is easy to feel overwhelmed. But we already have tried-and-tested policy schemes that could help us tackle these problems in a politically sustainable fashion.

Are the BRICS Breaking Up?
Shashi Tharoor (Project Syndicate) Jul 7, 2022
India has always been the indispensable swing vowel in the BRICS acronym. If the bloc's current strategic direction and possible enlargement push the country toward the exit, the grouping will become not just unpronounceable, but also unviable.

Aiding the Digital Revolution in Global Financial Inclusion
David Malpass (Project Syndicate) Jul 7, 2022
Expanding people's access to finance, reducing the cost of digital transactions, and channeling wage payments and social transfers through financial accounts will be vital to mitigating recent economic setbacks in developing countries. Governments and the private sector can help further this transformation in several ways.

The advance of the private sector among China's largest companies under Xi Jinping
Tianlei Huang and Nicolas Véron (VoxEU) Jul 7, 2022
Widespread narratives for China under Xi Jinping, especially in the past half-decade, emphasise a 'pivot to the state' and increasing repression of the private sector, in contrast with previous decades of more dynamic private sector development. But is China's private sector truly being crushed? This column uses company-level data for China's largest companies, ranked by either revenue or (for listed ones) market capitalisation, to show that, in fact, the share of the private sector in that group has expanded rapidly and near-continuously over the past decade.

Financial crises as drivers of populism
Luigi Guiso, Massimo Morelli, Tommaso Sonno, and Helios Herrera (VoxEU) Jul 7, 2022
Financial crises have severe economic costs. This column shows that they also entail major political costs. It argues that the global financial crisis, and associated Great Recession, represents a watershed for populism in Europe, changing people's views and the rhetoric of all parties. The crisis brought economic insecurity to the middle classes, which had largely remained untouched by the globalisation and immigration shocks. Disillusionment with the status quo prompted parties to enter the political arena on populist platforms.

What the U.S. Still Doesn't Get About Countering China
Howard W. French (FP) Jul 7, 2022
Self-interest, not altruism, is driving Beijing to invest in the global south.

Wage growth poses a dilemma for union-friendly Biden
Gillian Tett (FT) Jul 8, 2022
Federal Reserve officials fear that elevated inflation could become 'entrenched' in public expectations.

Uncomfortable echoes of the 1970s
Merryn Somerset Webb (FT) Jul 8, 2022
Time to look again at a difficult decade with the help of some summer holiday books.

Kishida has 1.45 trillion reasons to reboot Abenomics
William Pesek (AT) Jul 8, 2022
Though the motives and longer-term implications of Shinzo Abe's assasination are impossible to assess, one political dynamic may have been altered: Prime Minister Fumio Kishida may now have greater latitude to stay on past his one-year mark in office come October. The best way he can honor Abe's legacy is to accelerate economic reforms.

Shelter From the Storm
Jing Yang, Bryan Tsu, and Dom Rinaldi (PIMCO) Jul 8, 2022
Amid stormy markets, senior securitized credits hold potential for resilient returns.

Financial markets will keep betting against the euro
Lorenzo Codogno (OMFIF) Jul 8, 2022
What's wrong with the euro? Again and again, we end up discussing its instability and the relentless attempts by financial markets to challenge its existence by betting against the government bond markets of peripheral member countries. It is happening again as interest rates start to rise, putting pressure on risk premia. And again, the European Central Bank will have to step in and announce yet another tool to counteract market fragmentation.

Developing Countries Don't Need Wealth Transfers; They Need Free Markets
Lipton Matthews (Mises Wire) Jul 8, 2022
The standard line among the Great Reset crowd is that capitalism exploits poor nations and causes poverty. In reality, capitalism and free markets have reduced poverty around the world.

The ECB Risks Downgrading Its Bond Bazooka to Peashooter
Marcus Ashworth (Bloomberg Opinion) Jul 8, 2022
German intransigence could mean a summer of discontent for European debt markets.

Shinzo Abe Forged a New Asia
Mihir Sharma (Bloomberg Opinion) Jul 8, 2022
He transformed "Indo-Pacific" from a catchphrase into an aspiration, defining a security and economic architecture to preserve free thought and free trade in the region and beyond.

An Inflation-Adjusted Social Contract for Europe
Daniel Gros (Project Syndicate) Jul 8, 2022
During the 2008 global economic crisis, a recurrent criticism of the eurozone framework was that it meant that the European Central Bank was "the only game in town." Today, by providing income support to households, governments are helping to prevent a 1970s-style wage-price spiral – and making the ECB's job much easier.

Boris Johnson Leaves Behind a Sterling Mess
Barry Eichengreen (Project Syndicate) Jul 8, 2022
Investors appear to view the British pound more like the currency of a troubled emerging market than of a stable advanced economy. And now, with Prime Minister Boris Johnson's resignation and the attendant political uncertainty, sterling is poised to sink further.

Inflation Dos and Don'ts
Joseph E. Stiglitz and Dean Baker (Project Syndicate) Jul 8, 2022
Today's inflation is driven largely by supply-side constraints, which call for supply-side solutions. Such measures would do as much to tame higher prices as limited increases in interest rates would, and they would not come at the expense of American workers and the broader economy.

Using machine learning to assess the impact of deep trade agreements
Holger Breinlich, Valentina Corradi, Nadia Rocha, Michele Ruta, João M.C. Santos Silva, and Thomas Zylkin (VoxEU) Jul 8, 2022
Modern preferential trade agreements contain a host of provisions that go beyond tariff liberalisation. By adapting techniques from the machine learning literature, this column develops data-driven methods for selecting the most trade-increasing provisions and quantifying their impact on trade. The results suggest that provisions related to technical barriers to trade, anti-dumping, trade facilitation, subsidies, and competition policy are associated with enhancing the trade-increasing effect of preferential trade agreements. Based on these findings, the effects of individual agreements can be estimated.

Europe's growing league of small corporate bond issuers
Olivier Darmouni and Melina Papoutsi (VoxEU) Jul 8, 2022
Historically, only very large firms issued in the European corporate bond market. However, recent years have seen the entry of many new players: small, private, and unrated issuers. This column uses firm-level data to show these new players face different game dynamics. They are disconnected from aggregate market movements and still depend heavily on banks. A better understanding of the differences between new and more established corporate bond issuers could help identify policy implications for financial stability, capital markets development, and growth.

Shinzo Abe restored Japan's place on the world stage
FT View Jul 9, 2022
Long-serving premier leaves an outsized legacy in economics and diplomacy.

Markets are losing faith in central banks
Philip Coggan (FT) Jul 9, 2022
A Tinkerbell moment may have arrived as investors are unconvinced that monetary policy can tame inflation.

Abe's Greatest Economic Policy Legacy Is Looking Careworn
Daniel Moss (Bloomberg Opinion) Jul 9, 2022
The former premier knew what he wanted from monetary stimulus and the person to get him there. But does Japan still support it?

The commodities slump muddies an already complex picture
FT View Jul 10, 2022
Prices of many goods at the centre of the inflationary burst have fallen recently.

The UK economy is stagnant — and the reasons run deep
Martin Wolf (FT) Jul 10, 2022
Whoever succeeds Boris Johnson must be serious about tackling Britain's profound productivity problem.

The mystery of how quantitative tightening will affect markets
Katie Martin and Colby Smith (FT) Jul 10, 2022
Central banks are starting to shrink their balance sheets, but fund managers say they have no clue as to how QT will play out.

After a turbocharged boom, are chipmakers in for a supersized bust?
Economist Jul 10, 2022
Surging supply and softening demand are bringing the pandemic's superstar industry back to Earth.

Green shoots for multilateral trade cooperation?
Bernard Hoekman (EAF) Jul 10, 2022
MC12 was a significant achievement relative to expectations and the previous meeting, where ministers could not agree to a joint declaration.

G20 follow up needed to consolidate progress at WTO ministerial conference
Ken Heydon (EAF) Jul 10, 2022
Turning the MC12 into a game-changer for the trading order will require a level of political resolve from G20 leaders that so far is still lacking.

Inflation Is Raging Because Globalization Is Fading
Stephen Mihm (Bloomberg Opinion) Jul 10, 2022
History shows that the power of central bankers and other policy makers to restrain wages and prices pales in comparison to the impact of grand tectonic forces.

Is the US starting to resemble an emerging market?
Rana Foroohar (FT) Jul 11, 2022
Political risk and volatility are on the rise as the country's divisions begin to deepen.

Financial engineering to be put on trial in bankruptcy courts
Sujeet Indap (FT) Jul 11, 2022
Many innovations over the past decade have yet to be tested in a down market.

China's Economy Stumbles in the Fog of Covid War
Chris Buckley and Alexandra Stevenson (NYT) Jul 11, 2022
Even if the country avoids new lockdowns of big cities, question marks over the pandemic and policy direction are dogging efforts to revive growth.

The reordering power of a recession may come as a shock to younger workers
Megan McArdle (WaPo) Jul 11, 2022
We should be preparing for a downturn, whether it arrives or not.

US pressing even tougher chip bans on China
Scott Foster (AT) Jul 11, 2022
The US government is finding it easier to harass Chinese semiconductor producers than to support its own industry. As the CHIPS Act remains stalled in Congress and Commerce Secretary Gina Raimondo warns that large foreign investments are at risk, tougher US sanctions against China are reportedly in the works.

Which countries are driving the world's population growth?
Economist Jul 11, 2022
The UN expects the global population to reach 8bn in November, and to surpass 10bn this century.

FOMO on Junk Bonds Clashes With Recession Fear
Jonathan Levin (Bloomberg Opinion) Jul 11, 2022
Despite some of the richest corporate debt yields in years, worries about an economic downturn might turn off investors, but the risks look surprisingly balanced.

Investors Should Think Risk Factors, Not Asset Classes
Mohamed A El-Erian (Bloomberg Opinion) Jul 11, 2022
The path forward for markets will depend on the success of the Fed, the strength of the labor market and the persistence of inflation.

Americans Are Talking Themselves Into a Recession
Jared Dillian (Bloomberg Opinion) Jul 11, 2022
If not even one of the hottest job markets in history can cheer up consumers, then an economic downturn looks inevitable.

The Energy Crisis Will Deepen
Daniel Yergin (Project Syndicate) Jul 11, 2022
Today's global energy crisis could turn out to be even worse than what the world experienced in the 1970s. Much will depend on more informed collaboration between governments and industry leaders, with policymakers properly understanding and managing the energy flows on which modern economies depend.

The Dollar Rules
Jim O'Neill (Project Syndicate) Jul 11, 2022
Despite all economic and political turmoil in the United States, the greenback has appreciated to its strongest level in two decades as global investors have once again chosen it as their safe haven. Moreover, past experience suggests that it will remain overvalued until the US authorities decide that it needs to come back down.

ECB speeches and trust
In Do Hwang, Thomas Lustenberger, and Enzo Rossi (VoxEU) Jul 11, 2022
Central banks are intensifying their efforts to communicate with laypeople. One goal is to raise trust in their policies. This column shows that more frequent Eurosystem speeches lowered citizens' trust in the ECB. Central banks may wish to coordinate the quantity of public talks to enable market participants, professional forecasters, firms, and households to take their messages as intended.

The End of Magic Money
Sebastian Mallaby (FA) Jul 11, 2022
Inflation and the future of economic stimulus.

Why This Isn't an Economic Crisis
Ravi Agrawal (FP) Jul 11, 2022
Adam Tooze points out that while the economy is in rapid slowdown, this is no time to panic.

While politics fragments, Europe is falling into line on trade
Catherine Fieschi (FT) Jul 12, 2022
A new consensus on strategic autonomy and state aid is taking shape.

China's contrasting path offers the potential for uncorrelated returns
Jean Chia (FT) Jul 12, 2022
Investor case for Chinese assets rises despite regulatory and geopolitical risks.

Valuations are turning realistic but risks remain
John Redwood (FT) Jul 12, 2022
Central banks could overshoot and create recession.

Inflation is a political challenge as well as an economic one
Martin Wolf (FT) Jul 12, 2022
People care about price rises and the damage that they can do to real incomes.

The Incredible Falling Euro Nears Dollar Parity
WSJ View Jul 12, 2022
Sharp movements in exchange rates create uncertainty and can lead to economic and financial instability.

Biden edging toward trade war truce with China
William Pesek (AT) Jul 12, 2022
Joe Biden's White House is signaling a repeal of tariffs on some Chinese goods, but for multiple reasons, there needs to be a firmer grip and faster action. The US leader said earlier this week that his economic team was still discussing dropping levies on certain Chinese goods, which won't likely be enough to extinguish inflationary fires.

Super-strong dollar imperils world economy
Alexander Tziamalis and Yuan Wang (AT) Jul 12, 2022
The US dollar has been on a major surge against major global currencies in the past year, recently hitting levels not seen in 20 years. The dollar is the world's reserve currency, which means it is used in most international transactions. As a result, changes in its value have implications for the entire global economy.

How can European banks rise to the inflation challenge?
Joy Macknight (Banker) Jul 12, 2022
Inflation has recently been announced to have reached 9.1%, which will have huge consequences for the region's financial services industry, according to a recent Oliver Wyman report.

Fed Is Not Falling Into an Emerging Markets Trap. Not Even Close
Shuli Ren (Bloomberg Opinion) Jul 12, 2022
Judging by global fund flows, it's hard to argue investors have lost faith in the Fed.

Japan's Lack of Inflation Is Tied to Loose Monetary Policy
Richard Cookson (Bloomberg Opinion) Jul 12, 2022
You can't be certain about the reason consumer prices are surging in most of the world without understanding why they aren't in the Asian nation.

The New-Style Energy Crisis
Daniel Yergin (Project Syndicate) Jul 12, 2022
The surge in global demand for energy and other commodities has confronted policymakers and consumers with difficult new economic, political, and strategic realities. Although specific energy-market developments are difficult to predict with any precision, some broader developments are already baked into the cake.

Abe Shinz?'s Unmatched Legacy
Takatoshi Ito (Project Syndicate) Jul 12, 2022
As the longest-serving prime minister in the history of Japanese democracy, Abe Shinz? fundamentally transformed the country's security doctrine and economic-policy trajectory. The foundation of reforms and alliances that he established will remain in place for many years to come.

Private Equity's ESG Generation
Sébastien Mazella di Bosco and Alex Friedman (Project Syndicate) Jul 12, 2022
The private-equity industry is about to undergo an epochal shift, as the founders of many leading firms retire and a younger generation with a different view of capitalism takes over. Capital flowing through private markets can thus play the role it should in taking environmental, social, and governance criteria mainstream.

From stagflation to debt crises
Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge (VoxEU) Jul 12, 2022
The global economy is experiencing a toxic mix of slowing growth and rising inflation, bringing echoes of the stagflation of the 1970s. This column discusses how the resolution of that episode required steep increases in interest rates that marked the beginning of a decade of debt crises in emerging market and developing economies. If current stagflationary pressures intensify, some of these economies would likely face severe challenges again in rolling over their debt due to elevated financial vulnerabilities and weakening growth fundamentals.

Sri Lanka's Road to Ruin Was Political, Not Economic
Neil DeVotta (FP) Jul 12, 2022
The proximate cause for the protests is inflation, but the roots are in Sinhalese Buddhist nationalism.

US inflation surge signals tough times ahead
Mohamed El-Erian (FT) Jul 13, 2022
The damage from the sharp rise in prices has already been unleashed.

No, the global economy is not breaking into geopolitical blocs
Alan Beattie (FT) Jul 13, 2022
Shrewd operators like Brazil's Bolsonaro and India's Modi can avoid getting trapped in a restrictive alliance with Washington or Beijing.

How to make sustainable investing work
Sarah Gordon (FT) Jul 13, 2022
Amid the storm around ESG, impact investing offers a way forward.

Business worries mount that Macron's reform push will stall
Leila Abboud (FT) Jul 13, 2022
Without a majority in parliament the French president must seek compromise to advance economic agenda.

Euro Falls to Equal the U.S. Dollar for the First Time in 20 Years
Eshe Nelson (NYT) Jul 13, 2022
In recent months, pressure on the euro has been mounting while investors have been flocking to the U.S. dollar, a haven in times of economic upheaval.

The Inflation Tax on Workers
WSJ View Jul 13, 2022
Average real weekly earnings are down 4.4% in the last 12 months.

Property market woes focus fiscal power in Beijing
David P. Goldman (AT) Jul 13, 2022
"Never let a good crisis go to waste," an aphorism ascribed to Winston Churchill, might be the watchword for China's Communist Party as it prepares to select a new round of leaders at its 20th Congress in November. A piece of political theater that might have come out of imperial annals of the first millennium BCE illustrates deep changes at work in China's power structure.

American inflation tops forecasts yet again, adding to recession risks
Economist Jul 13, 2022
The Fed is under pressure to crank up interest rates more aggressively.

Facing a Darkening Economic Outlook: How the G20 Can Respond
Kristalina Georgieva (IMF) Jul 13, 2022
As G20 ministers and central bank governors gather in Bali this week, they face a global economic outlook that has darkened significantly.

Core Inflation Data Could Prompt Dramatic Action at the Fed
Tiffany Wilding and Allison Boxer (PIMCO) Jul 13, 2022
June's U.S. inflation data will likely force central bankers into more restrictive territory – raising the odds of recession.

Hiking Rates Early Won't Mean Catching a Break Later
Daniel Moss (Bloomberg Opinion) Jul 13, 2022
The few central bankers who spotted inflation risks quickly won't get credit if they need to ease back as recession looms.

The Euro's Drop Below $1 Means a More Hawkish ECB
Marcus Ashworth (Bloomberg Opinion) Jul 13, 2022
The common currency's decline will stoke even faster inflation. The central bank needs to defend it with more aggressive policy tightening.

Inflation Alarm Bells Are Actually Getting Softer
Matthew A Winkler (Bloomberg Opinion) Jul 13, 2022
Even as prices remain stubbornly high and pessimism haunts the political stage, the activity of consumers, economists and investors predicts that US economic stability is not so far in the future.

The Need for Global Stablecoin Standards
Jonathan Stephen Cunliffe and Ashley Ian Alder (Bloomberg Opinion) Jul 13, 2022
A look at the newly released guidelines from international regulators.

Private Equity Targets a Risky Stagflation Bet
Chris Hughes (Bloomberg Opinion) Jul 13, 2022
Demand for infrastructure assets is strong. They're an inflation hedge and debt is available for deals. But auctions and pricier financing will squeeze returns.

The Cost of Taming Inflation Will Be Exorbitant
Kevin Muir (Bloomberg Opinion) Jul 13, 2022
The Fed has encountered little pushback to its tightening campaign, but that will likely soon change as the fiscal impact of higher rates becomes clearer.

Commodities Never Belonged in Your Portfolio
Jonathan Levin (Bloomberg Opinion) Jul 13, 2022
Grasping at straws in a challenging economy, many investors and strategists turned to oil, metals and grain. Now that's blowing up in their faces.

The Financial System Africa Needs
Vera Songwe (Project Syndicate) Jul 13, 2022
Africa's vast economic potential is no secret. But tapping it will be possible only if major developed countries and emerging economies work together to design a more inclusive and effective global financial system that meets the continent's liquidity and debt-sustainability needs.

Putin's Global Food Crisis
Ruby Osman and Jacob Delorme (Project Syndicate) Jul 13, 2022
The Russian president's weaponization of food security is not solely responsible for a crisis that was already grave before the Ukraine war started. The international community must tackle not only Russia's Black Sea blockade but also the structural issues that left the world vulnerable to food-supply shocks in the first place.

The Inflationary Consequences of Deglobalization
Shang-Jin Wei and Tao Wang (Project Syndicate) Jul 13, 2022
Globalization previously made it easier for major central banks to pursue and maintain low inflation. Deglobalization risks having the opposite effect, and if this process continues unchecked, monetary policy may need to be tightened more than would otherwise be the case.

Climate change risks to sovereign debt
Stavros Zenios (VoxEU) Jul 13, 2022
Evidence suggests that sovereign debt markets are taking climate effects into account in pricing, creating the potential for a climate-debt doom loop. However, climate risks to fiscal stability do not attract the same attention as climate risks to financial stability. This column discusses how integrated assessment models can be linked with stochastic debt sustainability analysis to inform our understanding of climate risks to sovereign debt. In a case study of Italy, introducing climate risks causes the debt dynamic to deteriorate and risk premia to increase non-linearly as a manifestation of the doom loop.

The innovation response to the Covid crisis: A new eBook
Carsten Fink, Yann Ménière, Andrew A. Toole, and Reinhilde Veugelers (VoxEU) Jul 13, 2022
How has the global innovation system fared in the wake of the Covid-19 crisis? A new eBook untangles how the COVID-19 shock affected innovation ecosystems in different parts of the world and how scientists, entrepreneurs, and creative professionals responded to the shock. Innovation not only proved crucial in finding solutions to the crisis, overall the innovation system proved more resilient to the pandemic's fallout compared to previous crises.

Dollar Funding Stresses in China
Laura Kodres, Leslie Sheng Shen, and Darrell Duffie (VoxChina) Jul 13, 2022
The need for US dollar funding during the financial stresses of March 2020, as the COVID-19 pandemic shocked markets, was evident in a number of countries (Avdjiev, Eren, and McGuire 2020; Bahaj and Reis 2020). Notably, however, China's dollar funding and risk received little attention, even though the country's deepening economic and financial linkages to the United States and rest of the world suggest that financial instability emanating from China could have adverse implications for the global economy. Our recent work (Kodres, Shen, and Duffie 2022) provides a deeper understanding of the dollar funding needs of Chinese banks and non-financial corporations. We show that China's vulnerability to US dollar funding risk is large and growing, and discuss the existing and potential avenues through which US dollar funding could be supplied to Chinese entities in times of stress.

Pregnant Sri Lankans Fear 'One Meal Per Day'
Dimuthu Attanayake (FP) Jul 13, 2022
The food crisis is hitting the country's most vulnerable the hardest.

Liquidity is a bigger worry for investor returns than growth
Bhanu Baweja (FT) Jul 14, 2022
There is nothing automatic about high inflation or tighter policy catalysing a deep recession.

'Dr Copper' has a worrying message about the energy transition
Daniel Yergin (FT) Jul 14, 2022
The metal has become central to the drive to net zero given its use in electric car batteries and other technologies.

How to Invest When Inflation Is Bad and a Recession May Loom
Jeff Sommer (NYT) Jul 14, 2022
While the news may indicate that the markets and economy are rocky, long-term investors can ride it out with a little luck and a lot of planning, our columnist says.

Is the economy good or bad? In a word: Yes.
Catherine Rampell (WaPo) Jul 14, 2022
As lousy as Americans feel about the economy now, the months ahead could feel a lot worse.

The ECB's masterplan to manipulate markets
Economist Jul 14, 2022
Could it misfire?

Is China Stumbling Into Its Own Mortgage Crisis?
Shuli Ren (Bloomberg Opinion) Jul 14, 2022
A rapidly spreading protest — borrowers refusing to make payments on unfinished homes — threatens to rattle the financial system.

If This Is Your First Bear Market, There's No Need to Panic
Nir Kaissar (Bloomberg Opinion) Jul 14, 2022
Deep selloffs end eventually, but no one can predict when, so it's a mistake to put off investing or to pull money out.

Labor Market Will Help, Not Hinder, Fed's Inflation Fight
Conor Sen (Bloomberg Opinion) Jul 14, 2022
If you're looking for a dose of optimism after this week's shocking consumer price index report, jobs and wages are heading in the right direction.

What It Will Take for the Fed to Tame Inflation
William C Dudley (Bloomberg Opinion) Jul 14, 2022
Don't be fooled by data suggesting the central bank is making headway. The task ahead remains extremely daunting, both practically and politically.

How Bad Will the Developing-World Crisis Get?
PS Commentators Jul 14, 2022
Around the world, low- and middle-income countries are facing multiple challenges: soaring food and energy prices, unsustainable debt burdens, the ongoing COVID-19 pandemic, and increasingly frequent climate-related disasters. With the threat of severe social and political instability growing fast, we asked PS commentators what will happen as more countries are pushed to the brink.

Trade, volatility, and the role of specialisation and diversification
Adina Ardelean, Miguel León-Ledesma, and Laura Puzzello (VoxEU) Jul 14, 2022
The relationship between trade and volatility depends on a complex interaction between sectoral shocks, sectoral specialisation, and geographic diversification. This column uses a multi-country, multi-sector framework to study the main sources of risk for open economies and how trade determines the exposure to those risks through specialisation and diversification of sales. It shows that diversification reduces volatility, particularly in countries with higher output volatility. Furthermore, by increasing the co-movement between sectors, lower specialisation increases total risks, counter to conventional wisdom on this relationship.

How to Feed the Planet
Nigel Purvis and Joshua McBee (FP) Jul 14, 2022
It is possible to protect nature and provide nutrition for all. Here's what the U.S. needs to do to make it happen.

US recession is a smaller danger than long-term inflation
FT View Jul 15, 2022
The Fed needs to hold its nerve on tightening further.

Investors need to prepare for stagflation
Bob Prince (FT) Jul 15, 2022
A different world looms from the one that has buoyed most portfolios in recent decades.

We should be worrying about debt as well as inflation
Gillian Tett (FT) Jul 15, 2022
Pundits have long ignored the issue because declining interest rates kept borrowers' servicing costs low.

Zero-Covid policy killing off China's growth
William Pesek (AT) Jul 15, 2022
Chinese President Xi Jinping's "zero-Covid" strategy appears to be generating a zero-growth scenario that few saw coming for the world's second-largest economy. Asia's top economic power managed to eke out just 0.4% growth in the second quarter year-on-year, down from 4.8% in the first quarter, according to just-released data.

How China could leapfrog US chip-making bans
David P. Goldman (AT) Jul 15, 2022
China's semiconductor industry has lagged the US in patents and lagged South Korea and Taiwan in fabrication, but it hopes to leapfrog its competition by adopting revolutionary new chip design technologies. Washington's efforts to prevent Beijing from making top-end chips, meanwhile, are being undercut by new forms of "advanced packaging."

Why China can't let Laos default
David Hutt (AT) Jul 15, 2022
Laos faces intensifying economic and financial crises and there is likely no way out without some form of a Chinese bailout or debt forgiveness. Vientaine's foreign debts have swelled to over US$14 billion, or 88% of gross domestic product (GDP). Around half that amount is owed to China, including a one-third stake in the $5.9 billion China-Laos railway.

Identifying Recessions Is More Art Than Science
Stephen Mihm (Bloomberg Opinion) Jul 15, 2022
Wouldn't it be reassuring if science could pinpoint the moment when the economy turns sour? Actually, no.

Inflation Is Even Worse If You Measure It the Proper Way
Justin Fox (Bloomberg Opinion) Jul 15, 2022
Making a year-over-year comparison of price increases is easy to understand but inevitably backward-looking. And right now monthly core inflation is clearly accelerating.

Who Has the Stomach — Or Obstinacy — to Stand Against the Dollar?
Daniel Moss (Bloomberg Opinion) Jul 15, 2022
The often-asserted decline of US influence will have to wait, again.

No Net Zero Without Nature
Nigel Topping and Mahmoud Mohieldin (Project Syndicate) Jul 15, 2022
Preserving nature is a key element in the world's effort both to mitigate and adapt to climate change, and it also happens to be good for business. But new findings show that much of the private sector continues to lag far behind in tackling deforestation and protecting biodiversity.

The Adventures of Money
Jonathan Levy (Project Syndicate) Jul 15, 2022
In an age of rising new powers and new financial technologies, could the US dollar's status as the global reserve currency finally come to an end? To answer such questions, it helps to adopt a historical perspective, because the future of money may well resonate with its deep past.

Cutting out the middleman: The structure of chains of intermediation
Matthew Grant and Meredith Startz (VoxDev) Jul 15, 2022
Shortening intermediation chains does not necessarily lead to gains for consumers.

Making War More Difficult to Wage
Emily S. Weinstein (FA) Jul https://www.foreignaffairs.com/articles/world/2022-07-15/making-war-more-difficult-wage, 2022
How Ukraine is changing the West's use of export controls.

How Not to Fight Inflation
Isaac Chotiner (New Yorker) Jul 15, 2022
Do the failures of Abenomics in Japan hold lessons for the United States?

The Emerging Market Currency Collapse Can Continue
Brendan McKenna (WF Econ Group) Jul 15, 2022
Over the last few months, emerging market currencies have come under extreme pressure. A more hawkish Fed combined with deteriorating global growth prospects have been the root causes of the widespread selloff across the emerging currency complex. While we have a particularly pessimistic view on emerging market currencies, the depreciation has been more severe than we expected. In our view, this depreciation pressure is likely to continue; however, we have consistently been asked "how much more depreciation can EM currencies experience?" To offer insight, we updated our emerging market currency vulnerability framework and use the results to gauge the extent of further depreciation. The results are compelling, and suggest that underlying economic fundamentals and local politics are consistent with additional weakness in most developing currencies. There are exceptions, however, and our framework suggests fundamentals are consistent with a modest rebound in the Chilean peso, while the politically driven Colombian peso depreciation has likely run its course.

What Sri Lanka reveals about the risks in emerging markets
Martin Sandbu, Jonathan Wheatley and John Reed (FT) Jul 16, 2022
A number of developing economies face growing pressure from soaring energy and food costs and a stronger US dollar.

China's zero-Covid policy has had a severe impact on its stock of global talent
Huiyao Wang (FT) Jul 17, 2022
Beijing's approach may have long-term consequences for the internationalisation of the country's workforce.

Why a Middle-Class Lifestyle Remains Out of Reach for So Many
Ezra Klein (NYT) Jul 17, 2022
Inflation has unmasked the depths of our affordability crisis.

Global Central Banks Ramp Up Inflation Fight
Jeanna Smialek and Eshe Nelson (NYT) Jul 17, 2022
Central banks in the U.S., Europe, Canada and parts of Asia are lifting interest rates rapidly as they try to wrestle breakneck inflation under control.

Mexico's Leader Says Poverty Is His Priority. But His Policies Hurt the Poor.
Maria Abi-Habib and Oscar Lopez (NYT) Jul 17, 2022
Halfway into the president's term, the plight of Mexico's lower classes has only worsened. Economists say it is the result of government mismanagement of welfare programs and the economy.

Is Japan ready to reopen its borders?
Fuma Aoki and Yves Tiberghien (EAF) Jul 17, 2022
While international partners, businesses, tourist companies, students and travellers are counting the cost of Japan's closure.

If We're Lucky, OPEC Is Wrong About Oil Demand Going Up
Julian Lee (Bloomberg Opinion) Jul 17, 2022
The oil producer group is being optimistic about its ability to meet growing demand for crude.

Nobody Knows How Long Inflation Will Last. That's Life.
Niall Ferguson (Bloomberg Opinion) Jul 17, 2022
Large social networks are what separate human beings from all other animals. They are also why we live "on the edge of chaos."

When Austerity Is a Bigger Problem Than Inflation
John Authers (Bloomberg Opinion) Jul 17, 2022
Refusing to spend doesn't equate to fiscal discipline. Mexico's AMLO needs to enable investment in the country to reverse poor growth under successive presidents.

Democrats lack the tools they need to fight inflation
Megan Greene (FT) Jul 18, 2022
Joe Biden has few tools at his disposal to cut prices in time to help his party in the US midterm elections.

Here's how to solve the productivity paradox
Ruchir Sharma (FT) Jul 18, 2022
A culture of government bailouts and constant stimulus is a barrier to technological innovation and dynamism.

This Pioneering Economist Says Our Obsession With Growth Must End
David Marchese (NYT) Jul 18, 2022
"It's a false assumption," argues Herman Daly, "to say that growth is increasing the standard of living in the present world."

The Global Nuclear Power Comeback
Christopher Barnard (WSJ) Jul 18, 2022
Countries are realizing they can't meet their climate, energy and national-security goals with renewables and fossil fuels.

Biden's China Tariff Cuts Would Hurt the U.S.
Robert Lighthizer (WSJ) Jul 18, 2022
They wouldn't knock down inflation but would wallop American businesses, workers and national security.

How Abe's death could set Kishida free
William Pesek (AT) Jul 18, 2022
The post-Shinzo Abe era is shaping up to be one of the most unpredictable and impactful Japan has seen in generations, both for economic and security matters. In his 284 days as prime minister, Fumio Kishida has so far cut a cautious figure. A protege of the late Abe, who was assassinated on July 8, Kishida tried to pull off a near-impossible balancing act.

Leapfrogging is rare: Technology upgrading by firms is mostly continuous
Xavier Cirera, Diego Comin, and Marcio Cruz (Brookings) Jul 18, 2022
Better measures of technology adoption can help policymakers design more effective policies and dispel myths, such as the frequency of leapfrogging.

China's top ranked corporations are not as opaque as they may seem
Tianlei Huang and Nicolas Véron (PIIE) Jul 18, 2022
Since 2020, more companies from China have made the annual Fortune Global 500 ranking than any other country, including the United States. Over two-thirds of these companies are not publicly traded, i.e., their shares are not listed on a stock exchange, and most of them are state-owned enterprises (SOEs). In contrast, most large companies in the rest of the world are listed.

China's Economic Engine Is About to Start Shrinking
Justin Fox (Bloomberg Opinion) Jul 18, 2022
The nation's working-age population could decline by two-thirds or more by century's end, according to new UN projections.

Inflation Beast Won't Lie Quietly Again for a Long Time
Allison Schrager (Bloomberg Opinion) Jul 18, 2022
If the pandemic taught us anything about monetary policy, it's that the Fed's success with rate targets has always been an illusion.

The Key to Africa's Economic Revolution
Bogolo J. Kenewendo (Project Syndicate) Jul 18, 2022
The African Continental Free Trade Area Secretariat has made clear that, thanks to the AfCFTA, Africa is "open for business." That may be true, but it will mean little unless the people running those businesses are aware of it – and reaping the benefits.

Is the US in Recession?
Jeffrey Frankel (Project Syndicate) Jul 18, 2022
Do not be surprised if, later this month, there is a wave of headlines claiming that the US economy is in recession. But such an assessment would depend on a chain of reasoning that has three important flaws.

The G-7 Infrastructure Plan Won't Succeed Unless It Learns from Past Failures
Stephen Paduano (FP) Jul 18, 2022
Rather than antagonizing political opponents and geopolitical rivals, the U.S. government should entrust infrastructure development to the World Bank—and fund it generously.

Russian Sanctions Are Working but Slowly
Oleg Korenok, Swapnil Singh, and Stan Veuger (FP) Jul 18, 2022
Moscow's military capabilities are being ground down, piece by piece.

China's zero-Covid policy risks economic damage spiralling
FT View Jul 19, 2022
Global growth rests on Beijing's vaccine and stimulus strategies.

Time for the IMF to show Argentina some tough love
FT View Jul 19, 2022
Weak targets are not what the perennial South American defaulter needs.

The crypto crash has important lessons for asset managers
Peter Harrison (FT) Jul 19, 2022
Blockchain technology can help provide the personalised portfolios that today's investors prefer.

The dollar sits atop a global monetary order shaken by sanctions
Isabelle Mateos y Lago (FT) Jul 19, 2022
Countries tend to hold certain currencies as reserve assets mostly for economic, not geopolitical, reasons.

Investors' recession remedies: chocolate, pet food and face cream
Simon Edelsten (FT) Jul 19, 2022
With smart stock selection, savers can limit the impact of a slowdown on their assets.

The Fed Shouldn't Raise Interest Rates Too Quickly
Alan S. Blinder (WSJ) Jul 19, 2022
Central bankers need to act like the tortoise, not the hare, lest they overshoot and cause a recession.

Want to help fight climate change? Don't lift tariffs on Chinese imports.
Henry Olsen (WaPo) Jul 19, 2022
Cutting tariffs on certain Chinese goods won't dent inflation, but it will hurt both our security and the planet.

Eight thorny questions over ECB fragmentation
David Marsh (OMFIF) Jul 19, 2022
The European Central Bank is walking a tightrope in its planning for an 'anti-fragmentation instrument', to be unveiled after its governing council meeting on 21 July. Doubts in Italy over Mario Draghi's government – combined with Germany's highest inflation since the 1970s, intensified US monetary tightening, the ending of ECB net bond purchases and Ukraine war uncertainties – heighten the euro area's vulnerability.

The Next Decade Is Critical for Africa's Success
Jakkie Cilliers (BRINK) Jul 19, 2022
Polls show that most Africans believe the future will be worse than the present, opening the door to instability and civil unrest. But despite challenges rooted in colonialism, there is reason for optimism.

How a Russian Natural Gas Cutoff Could Weigh on Europe's Economies
Mark Flanagan, Alfred Kammer, Andrea Pescatori and Martin Stuermer (IMF) Jul 19, 2022
The partial shutoff of gas deliveries is already affecting European growth, and a full shutdown could be substantially more severe.

Colombia's Economy May Yet Catch Up to the Hype
Tyler Cowen (Bloomberg Opinion) Jul 19, 2022
The country is full of entrepreneurial energy and vibrant businesses but has struggled to achieve robust growth. That could change.

The Dollar Bulls Are Looking Increasingly Like a Cult
Jared Dillian (Bloomberg Opinion) Jul 19, 2022
It's hard to boil the $6.6 trillion foreign-exchange market down into a simple narrative. But that hasn't stopped people from trying.

Managing the Megacrisis of 2022
José Ramos-Horta, Danilo Türk, Laura Chinchilla and Han Seung-Soo (Project Syndicate) Jul 19, 2022
On top of the COVID-19 pandemic and the increasingly disruptive effects of climate change, countries around the world are experiencing dangerous levels of food and energy insecurity and debt distress. And while the international community has taken some initial steps to address these problems, much more can and should be done.

The regional development trap in Europe
Andreas Diemer, Simona Iammarino, Andrés Rodríguez-Pose, and Michael Storper (VoxEU) Jul 19, 2022
Many regions in Europe are stuck in a development trap and face significant structural challenges in retrieving past dynamism or improving prosperity for their residents. This column conceptualises what constitutes a development trap at a regional level in Europe and identifies which regions have been trapped or at risk of becoming trapped in recent years. Regional development traps can arise at many different levels of income. Springing these traps would improve overall European competitiveness and help quell the discontent and resentment of citizens living in these areas.

Gains from trade: International transport costs still matter
Guillaume Daudin, Jérôme Héricourt, and Lise Patureau (VoxEU) Jul 19, 2022
Although transport costs have decreased substantially over the past two centuries, they are still far from negligible. This column argues that in addition to standard ad-valorem transport costs, there is an important role for additive costs in trade models. The authors estimate that over the period 1974 to 2019, additive costs represented between 35% (in air transport) and 45% (in vessel) of total transport costs. Furthermore, accounting for additive transport costs helps characterise the downward trend in total transport costs since the 1970s and suggests that the gains from trade over the period have been larger than generally assumed.

China's zero-Covid policy risks economic damage spiralling
FT View Jul 19, 2022
Global growth rests on Beijing's vaccine and stimulus strategies.

Eurozone leaders are pushing the ECB into murky waters
Philippa Sigl-Glöckner (FT) Jul 20, 2022
Member states should stop deferring deeply political issues around sovereign debt to the central bank.

The investment drought of the past two decades is catching up with us
Martin Sandbu (FT) Jul 20, 2022
Despite 20 years of cheap credit, countries have failed to capitalise on shoring up their futures.

The world isn't prepared for a wave of sovereign debt defaults
Alan Beattie (FT) Jul 20, 2022
Many emerging markets will need painful bond writedowns from China and private creditors.

A post-Brexit bonanza eludes both the City and the EU
Helen Thomas (FT) Jul 20, 2022
There are no easy ways for either side to extract quick wins from the current landscape.

Italy Is Haunted by the Pain of Past Economic Crises
Eshe Nelson, Emma Bubola and Camilla Ferrari (NYT) Jul 20, 2022
As the European Central Bank prepares to raise interest rates for the first time in more than a decade, the challenges for one of the bloc's largest economies balloon again.

America's Safety Net for Workers Hurt by Globalization Is Falling Apart
Ana Swanson (NYT) Jul 20, 2022
A 60-year-old program that provides retraining to workers whose jobs are eliminated because of foreign competition has expired, leaving many at risk.

Central bank digital currency cast aside in Japan
Sayuri Shirai (AT) Jul 20, 2022
The purpose of the Bank of Japan's ongoing experiments is to catch up with new technical features involving blockchain technology, in case the need for a central bank digital currency arises. But there are major factors that hamper the BOJ from actively considering implementation, not least the fact that cash remains king in Japan.

The 53 fragile emerging economies
Economist Jul 20, 2022
The contours of a debt crisis are starting to emerge.

A Recession Alarm Is Ringing on Wall Street
Joe Rennison (NYT) Jul 21, 2022
An inversion of the bond market's yield curve has preceded every U.S. recession for the past half century. It is happening again.

The ECB Raises While Mario Draghi Falls
WSJ Jul 21, 2022
Italy loses a reformer and a strong EU voice for Ukraine.

The promise of modern services in traditional economies
Gaurav Nayyar, Mary Hallward-Driemeier, and Elwyn Davies (Brookings) Jul 20, 2022
The process of structural transformation in now-industrialized economies was typically linear—first moving from agriculture to manufacturing, and later from manufacturing to modern, knowledge-intensive professional services. But growth in less industrialized countries over the past three decades has not conformed to this pattern. "Modern" services have provided productive growth opportunities in "traditional" economies, i.e., those without a large manufacturing base—either through serving final demand abroad or leveraging domestic demand from sectors other than manufacturing. These opportunities, in turn, have contributed to job creation.

The Mobile Phone Is Asia's Hedge Against the Dollar
Andy Mukherjee (Bloomberg Opinion) Jul 20, 2022
Southeast Asia's biggest economies are getting interoperable with their currencies thanks to technology. It's a small but important step in de-dollarization.

The Strong Dollar Is a Vote of Confidence in America
Tyler Cowen (Bloomberg Opinion) Jul 20, 2022
The US economy, and US soft power, are far more robust than many critics would care to admit.

Crypto Is Sticking Its Nose Into US Economic Woes
Nir Kaissar (Bloomberg Opinion) Jul 20, 2022
Digital currencies have enough juice now to influence inflation, housing and the labor market.

Saudi Arabia Reveals Oil Output Is Near Its Ceiling
Javier Blas (Bloomberg Opinion) Jul 20, 2022
The world's biggest crude producer has less capacity than previously anticipated.

ASML Faces a Much Bigger Problem Than a Chip Glut
Tim Culpan (Bloomberg Opinion) Jul 20, 2022
A looming shortage of semiconductor engineers is about to engulf the industry, giving the Dutch company a much broader challenge than supply chain and accounting details.

BlackRock Is Breaking the Wrong Kind of Records
Marc Rubinstein (Bloomberg Opinion) Jul 20, 2022
Clients of the world's largest asset manager lost an unprecedented $1.7 trillion in the first half's market carnage.

An Effective Pandemic Response Must Be Truly Global
Mariana Mazzucato and Jayati Ghosh (Project Syndicate) Jul 20, 2022
The world needs a global pandemic preparedness and response strategy that is built on equitable and representative decision-making. But developing one will require the G20 and the World Bank to abandon their current "health for some" approach.

A New Fiscal Strategy for Germany
Christian Lindner and Lars P. Feld (Project Syndicate) Jul 20, 2022
The German economy must contend with not only the shocks of COVID-19 and Russia's war on Ukraine but also several major medium- and long-term challenges. Against this backdrop, the country needs a fiscal policy that boosts sustainable growth through supply-side measures without further stoking inflation.

Why Sri Lanka Imploded
Kaushik Basu (Project Syndicate) Jul 20, 2022
When Sri Lanka's Rajapaksa family returned to power in 2019, it was riding a wave of support that it sought to sustain with popular but ill-advised economic handouts. By definition, unsustainable policies eventually run into a wall.

The net foreign asset position of the US
Andy Atkeson, Jonathan Heathcote, and Fabrizio Perri (VoxEU) Jul 20, 2022
The US net foreign asset position – measuring the difference between its foreign assets and liabilities – was negative, yet small, until 2007. This column shows that since then, it has deteriorated sharply to negative 40% of GDP, mostly as a result of changes in the market value of US-owned assets abroad and foreign-owned assets in the US. These valuation effects are explained by rising US equity values disproportionately benefitting foreign owners of US firms. Whether this is beneficial for depends on whether the profit rises are due to higher productivity or lower competition.

Asian Central Banks Coming Up the Curve
Brendan McKenna (WF Econ Group) Jul 20, 2022
Over the course of this year, emerging Asian central banks have lagged the overall monetary policy tightening trend. Regional central banks have taken a more gradual approach to lifting interest rates relative to the Fed, but especially as it relates to peer central banks in the developing world. With that said, regional Asian central banks are shifting in a more hawkish direction, and we expect Bank Indonesia and Bank of Thailand to come off the sidelines and initiate tightening cycles in the near future. However, despite a more hawkish stance on monetary policy, we doubt central banks can keep pace with the Fed, and we continue to forecast weaker currencies across emerging Asia through the remainder of this year.

China reckons with its first overseas debt crisis
James Kynge, Kathrin Hille, Ben Parkin and Jonathan Wheatley (FT) Jul 21, 2022
The Belt and Road Initiative has seen a surge in loans going bad, prompting Beijing to issue countries with emergency credit.

The semiconductor chip pendulum is slowly swinging west
Gillian Tett (FT) Jul 21, 2022
The US had fallen behind Asian production levels but that may be about to change.

The ECB reminds everyone who really has the authority
Martin Sandbu (FT) Jul 21, 2022
Both investors and policymakers are put on notice in the latest move to tackle the bloc's problems.

Protect Hong Kong financial system from global risk
Wang Jiangyu and Liu Dian (AT) Jul 21, 2022
Hong Kong's financial risks are part of China's overall financial risk. The financial security of Hong Kong is closely related to the overall financial security, national security and sovereignty of China. We recommend several measures to buttress Hong Kong's financial security against possible economic and political shocks.

India gains on China in crisis-hit Sri Lanka
Ganeshan Wignaraja (AT) Jul 21, 2022
Sri Lanka's pre-emptive default on its foreign debt obligations in mid-April 2022 and recently resigned president Gotabaya Rajapaksa's flight from Sri Lanka on 12 July provides India with an opportunity to match China in the foreign aid game. Stabilizing Sri Lanka's economy could be a major win for Indian Prime Minister Narendra Modi's neighborhood-first policy.

India topping China's growth is a head fake
William Pesek (AT) Jul 21, 2022
India is, at present, the belle of the ball among major economies. Even after trimming its 2022 gross domestic product (GDP) forecast amid rising global inflation and interest rates, the International Monetary Fund (IMF) sees India growing 8%, down from an earlier 9% projection, rosy figures that camouflage a bevy of structural problems and rising risks.

How has Turkey's economy kept growing despite raging inflation?
Economist Jul 21, 2022
Many Turkish businesses are struggling to cope.

Lessons from Turkey on the evils of high inflation
Economist Jul 21, 2022
It hurts investment and makes most people poorer.

The trade war within China
Economist Jul 21, 2022
Local protectionism is pernicious and persistent.

ESG should be boiled down to one simple measure: emissions
Economist Jul 21, 2022
Three letters that won't save the planet.

More Countries Are Pricing Carbon, but Emissions Are Still Too Cheap
Simon Black, Ian Parry and Karlygash Zhunussova (IMF) Jul 21, 2022
As the world gears up to avoid a climate catastrophe by limiting global warming to 1.5 to 2 degrees Celsius, more countries are putting carbon pricing at the center of their mitigation strategies. Yet designing ways to put a price on carbon can be complicated and countries face multiple choices.

What's the Point of Hiking When Recession Looms?
Gearoid Reidy (Bloomberg Opinion) Jul 21, 2022
Japan's central bank could find itself ahead of the curve — by having done nothing at all.

ECB's Crisis Plan Fails to Convince Bond Traders
Marcus Ashworth (Bloomberg Opinion) Jul 21, 2022
More than a half-century later, the US currency is once again in the limelight, as evidenced by its surge to a 20-year high and its weaponization by Washington to isolate Russian President Vladimir Putin over his war in Ukraine. This, too, will leave a long shadow. But this time around, the real opportunity for Asian banks is to help moderate the demand for dollars, a process analysts refer to as "de-dollarization." Financiers can't dictate the choice of invoicing currency to exporters; nor can they taper investors' safe-haven yearnings. What they can do, however, is to cut the American currency out of those cross-border payments where it's superfluous.

The ECB Has More at Play — and Risk — Than the Fed
John Authers (Bloomberg Opinion) Jul 21, 2022
Draghi's resignation in Italy, Putin's energy brinksmanship, and Europe's weaker banking system make the right rate hike a headache for Lagarde.

Bank of Japan Should Stop Meddling in Financial Markets
Richard Cookson (Bloomberg Opinion) Jul 21, 2022
There is no evidence that buying stocks and bonds has had the desired effect of stimulating activity and inflation in the country.

Cap Russia's Oil Price Now
Michael R. Strain (Project Syndicate) Jul 21, 2022
A new round of European sanctions set to target Russian oil imports by the end of the year could push energy prices even higher – potentially triggering a global recession. But there is a promising way to avoid this outcome.

The Problem with the Current Russia Sanctions Regime
Mohamed A. El-Erian (Project Syndicate) Jul 21, 2022
There is much debate about the effectiveness of Western sanctions, the Ukraine war's implications for markets and the global economy, and what the West's next steps should be. While there are few good options, some are clearly worse than others.

Rate Hikes Alone Won't Curb Inflation
Pinelopi Koujianou Goldberg (Project Syndicate) Jul 21, 2022
Because America's sky-high inflation rate is driven heavily by supply-side shortages, it will not be brought down by demand-suppressing monetary policies. The situation cries out for measures to ease supply-side bottlenecks and increase the number of available, willing workers.

The end of the crypto-diversification myth
Antoine Didisheim, Serge Kassibrakis, and Luciano Somoza (VoxEU) Jul 21, 2022
Since the onset of the Covid-19 crisis in 2020, the correlation between cryptocurrency and equities went from low and negative to consistently high and positive. This column proposes a new mechanism to explain this new relationship. With investor-level holdings from a bank offering both trading accounts and cryptocurrency wallets, it shows that retail investors' net trading volumes of stocks and cryptocurrencies are highly positively correlated. Theoretically, this micro-level pattern translates into a cross-asset class correlation. Evidence suggests that the pattern emerged in March 2020, and that stocks preferred by crypto-traders exhibit a stronger correlation with Bitcoin.

The optimal inflation target: Views from 600 economists
Gene Ambrocio, Andrea Ferrero, Esa Jokivuolle, and Kim Ristolainen (VoxEU) Jul 21, 2022
A key question for any inflation-targeting framework is what the inflation target should be. This column reports findings from a survey of leading economists from around the world on the inflation target and related monetary policy issues. Overall, there was a strong preference for the status quo, with participants seeming to perceive high costs in terms of credibility from changing the current inflation target. However, participants concerned about the zero lower bound on the nominal interest rate were more likely to favour raising the target.

The First Step in Improving Supply Chains
Derek Scissors (AEI) Jul 21, 2022
Greater output of final products does not improve supply-chain resilience. Manufacturing more with the same supply chains could even create more vulnerabilities. New policies must address full supply chains, not just the final stage. Companies selling in the US should be responsible for knowing their suppliers, through the full extent of the chain. For products deemed critical, Chinese participation at any point in the supply chain should be restricted. The single weakest link in many supply chains is constitutive materials, since these enable the next stages of production and are often sourced overseas. The US must quickly determine where projected materials demand exceeds reliable supply.

European Central Bank Exits Negative Interest Rates
Nick Bennenbroek (WF Econ Group) Jul 21, 2022
The European Central Bank (ECB) joined the global rate hike cycle at today's announcement, delivering a larger-than-expected 50 bps Deposit Rate increase, to 0.00%. The ECB said a further normalization of interest rates would be appropriate at upcoming meetings. The ECB also approved the Transmission Protection Instrument (TPI), a tool aimed at supporting orderly conditions across Eurozone government bond markets, in particular the region's peripheral markets such as Italy and Spain. While full details are yet to be released, the ECB said purchases using the tool are not restricted ex ante, and that the scale of TPI purchases depends on the severity of the risks facing policy transmission. We believe inflation remains elevated enough, and inflation risks worrisome enough, to continue with a more forceful pace of rate hikes for the time being. Our view remains that today's hike will be followed up by another 50 bps Deposit Rate increase at the September meeting. In addition, while inflation remains elevated and until Eurozone economic growth slows in a much more meaningful manner, we also see a steady series of rate increases as more likely than not. In that context, we also forecast a 25 bps rate increase at the October and December meetings, which would bring the Deposit Rate to 1.00% by the end of 2022.

The ECB arms itself against bond market pessimism
FT View Jul 22, 2022
Fall of Italian government may test the eurozone's latest measure.

Pakistan's rupee falls fast as default fears intensify
Hudson Lockett, Farhan Bokhari and John Reed (FT) Jul 22, 2022
Currency on track for worst week in more than two decades amid concerns IMF deal will not avert crisis.

Markets will test the ECB's resolve
Katie Martin (FT) Jul 22, 2022
With inflation high, Lagarde does not have the same leeway as Draghi.

The Fed must emulate the tactics of Volcker's fight against inflation
Sheila Bair (FT) Jul 22, 2022
Jay Powell mirrors the former Fed chair's bravery but not his methods.

The future of space exploration belongs to robots and billionaires
Martin Rees (FT) Jul 22, 2022
We may be nostalgic about astronauts but our scientific abilities have leapfrogged our physical ones.

China Is Playing Hardball with Troubled Debtors. That's Dangerous for All of Us.
Peter Coy (NYT) Jul 22, 2022
When one country defaults, lenders start worrying that others will do the same.

Why You Should Be Wary of Wall Street's Upbeat Stock Forecasts
Jeff Sommer (NYT) Jul 22, 2022
Amid rising inflation and the threat of recession, corporate earnings are coming under pressure.

Will the dollar surge in the second half of 2022?
Mark Sobel (OMFIF) Jul 22, 2022
Some recent media reports have suggested the dollar is a juggernaut, headed inexorably higher against a tumbling euro and yen in the second half of 2022, creating a destructive path through emerging market currencies. While predicting currency movements is a fool's errand, especially now given pervasive uncertainties confronting the global economy, the dollar's story over the second half of 2022 could prove different.

The Fed Is Failing in Four Ways
Mohamed A El-Erian (Bloomberg Opinion) Jul 22, 2022
Regardless of what the central banks does next week, it needs to improve its analysis, forecasts, policy responses and communication.

Can We Escape a Crash? The Housing Market Is Saying Yes.
Conor Sen (Bloomberg Opinion) Jul 22, 2022
Rising mortgage rates crushed affordability and led to softening demand, but much-needed cost relief is allowing builders to sweeten the deal for buyers without destabilizing the broader economy.

In Defense of Global Public Goods
Javier Solana (Project Syndicate) Jul 22, 2022
The war in Ukraine is bolstering the narrative that an inescapable ideological struggle between democracies and autocracies has taken hold. If this perception prevails, the world will inevitably split into ideological blocs, and protecting global public goods will become impossible.

The New-Style Energy Crisis
Daniel Yergin (Project Syndicate) Jul 22, 2022
The surge in global demand for energy and other commodities has confronted policymakers and consumers with difficult new economic, political, and strategic realities. Although specific energy-market developments are difficult to predict with any precision, some broader developments are already baked into the cake.

Will Europe's New TPI Be an ATM?
Willem H. Buiter (Project Syndicate) Jul 22, 2022
One reason why the European Central Bank's earlier asset-purchase program was never used is that fiscally fragile governments were reluctant to submit to its robust eligibility requirements. But following the rollout of a new program that comes with much looser conditions, the balance has shifted.

Actually, the Russian Economy Is Imploding
Jeffrey Sonnenfeld and Steven Tian (FP) Jul 22, 2022
Nine myths about the effects of sanctions and business retreats, debunked.

Ghana's 'Success' Exposes the West's Toxic Development Model
Howard W. French (FP) Jul 22, 2022
Standard theories of global progress continue to be largely limited to raw extraction.

ECB's Long Journey into Currency Collapse Just Got a Lot Shorter
Brendan Brown (Mises Wire) Jul 23, 2022
The launch of the ECB's new bond-buying scheme won't save the euro. In fact, it will drain, rather than bolster, confidence in European money.

The UK needs a coherent economic strategy
Jim O'Neill (FT) Jul 24, 2022
Conservative members must choose a leader who can tackle productivity problems with more imagination.

The ECB turns the tables on panicky markets and policymakers
Martin Sandbu (FT) Jul 24, 2022
Investors and governments are put on notice in the latest effort to tackle the bloc's problems.

How to invest in emerging markets
Mohamed El-Erian (FT) Jul 24, 2022
Historically cheap pricing is not enough given the macro headwinds.

Jerome Powell's Fed Pursues a Painful and Ineffective Inflation Cure
Elizabeth Warren (WSJ) Jul 24, 2022
More aggressive interest-rate hikes will cost millions of jobs and won't address the causes of high prices.

Colombo's controversial new president
Chulanee Attanayake (EAF) Jul 24, 2022
Policy failures by successive governments, combined with the COVID-19 pandemic and Ukraine crisis, put the economy under extreme strain. 'But a series of misplaced and ill-advised policies made by his government exacerbated a crisis that had been years in the making.

Rolling Back Tariffs Would Help Tame Inflation
Bloomberg View Jul 24, 2022
The protectionist policy Biden inherited from Trump hasn't worked — and it's raising the cost of living.

Is the dollar about to take a turn?
Barry Eichengreen (FT) Jul 25, 2022
If the economy and inflation weaken, the Fed is likely to pause and the US currency will reverse direction.

Strict inflation targets for central banks have caused economic harm
Edward Chancellor (FT) Jul 25, 2022
Governments should draw lessons from the malign consequences of prolonged ultra-low interest rates.

The Economic Mess We're In
WSJ View Jul 25, 2022
As they brawl over the Fed and inflation, Elizabeth Warren and Larry Summers are both half-right for the wrong reasons.

Why Inflation Is on the Way Down
Donald L. Luskin (WSJ) Jul 25, 2022
The Fed should ask Milton Friedman. When growth of the money supply slows, so does the increase in prices.

A US Recession Will Also Come to India's Tech Hub
Andy Mukherjee (Bloomberg Opinion) Jul 25, 2022
Western firms are still sending a steady flow of outsourcing deals, but the profitability of software exporters like Infosys is witnessing a sharp decline.

Don't Fear Italexit. It Won't Happen.
Maria Tadeo (Bloomberg Opinion) Jul 25, 2022
Rome's next government has plenty of challenges. Leaving the euro isn't one of them.

Globalization Is Just Getting Started
Allison Schrager (Bloomberg Opinion) Jul 25, 2022
Greater integration of the world's financial and political interests has improved our lives and will inevitably continue despite current discourse to the contrary.

How to Beat Developing-Market Debt Crises
Hippolyte Fofack (Project Syndicate) Jul 25, 2022
Even though developing countries' debt burdens have increased only moderately overall, the flow of funds they receive from capital markets has remained dismally low. Now that global financial conditions are tightening, advanced economies should extend a helping hand using the tools that they already have available.

Deglobalization's China Wild Card
Stephen S. Roach (Project Syndicate) Jul 25, 2022
With the world beset by climate change, pandemics, and a shocking new war in Europe – to say nothing of mounting inequality and related social and political tensions – globalization's defenses are in tatters. And China may well have the most to lose.

Lessons from Sri Lanka
Anne O. Krueger (Project Syndicate) Jul 25, 2022
The economic situation in Sri Lanka is so dire that millions of people have taken to the streets, forcing the president to flee the country. For other economically struggling, heavily indebted developing countries, the moral of the story is that moderate pain now is better than severe pain later.

Environmental Tariffs Could Be a Game Changer
Daron Acemoglu (Project Syndicate) Jul 25, 2022
Without rapid reductions in global greenhouse-gas emissions, the effects of climate change will continue to worsen, posing an acute risk to human civilization. In the absence of effective multilateral frameworks, it is necessary to increase the costs of emissions unilaterally through other means.

Ruble payments: Shielding the ruble from financial sanctions
Michele Savini Zangrandi (VoxEU) Jul 25, 2022
There has been much debate over the intentions behind Russia's March 2022 Presential Decree requiring gas importers to settle gas payments in rubles. This column argues that the scheme is intended to protect the Moscow Stock Exchange from financial sanctions. The decree requires not only that gas payments are settled in rubles, but also that the rubles are obtained on the exchange, making it indispensable to the transactions. This prevents the exchange being placed under sanctions without gas supplies being cut off. This demonstrates the development of not only sanctions, but also sanction defences, that exploit interdependencies between countries.

Jerome Powell and the Fed Are Still Struggling to Understand a Crazy Economy Hit by the Pandemic and War
John Cassidy (New Yorker) Jul 25, 2022
The models that economists have long relied on to analyze inflation have broken down since the coronavirus pandemic began.

Fighting Climate Change Through Trade
Joseph E. Stiglitz, Todd N. Tucker, and Isabel Estevez (FA) Jul 25, 2022
Despite many setbacks, Biden can still make progress.

The Global Food Crisis Shouldn't Have Come As a Surprise
Christopher B. Barrett (FA) Jul 25, 2022
How to finally fix the broken system for alleviating hunger.

A Fed-induced recession is a medicine worse than the disease
Claudia Sahm (FT) Jul 26, 2022
Action to tackle inflation and protect workers should not be based on outdated economic thinking.

The madness of the oil market
David Hindley (FT) Jul 26, 2022
The past two years have seen the biggest swings in the oil price in 14 years as geopolitics and the energy transition bewilder traders

While Europe learns energy frugality, US sticks to guzzling
Myles McCormick (FT) Jul 26, 2022
Telling Americans to cut back has not been properly tested since Jimmy Carter's failed re-election.

Italy is throwing away the chance for a proper debate on its future
Andrea Lorenzo Capussela (FT) Jul 26, 2022
The prospects for substantive reform after the fall of Mario Draghi's government do not look bright.

Time to think about UK currency risk?
Stefan Wagstyl (FT) Jul 26, 2022
Underweight in foreign equities, British investors can consider putting more money abroad.

Is Recession Staring Us Down? Already Upon Us? Here's Why It's Hard to Say.
Ben Casselman (NYT) Jul 26, 2022
The U.S. may register a second straight quarter of economic contraction, one benchmark of a recession. But that won't be the last word.

Why the Fed May Soon Need Treasury Help
Judy Shelton (WSJ) Jul 26, 2022
The central bank will be paying much more in interest on reserves to control inflation.

Talk to Russia to save the world's poor
Kishore Mahbubani (AT) Jul 26, 2022
Unyielding Western leaders should repeat one stat each night before going to sleep — the West comprises only 12% of the world's population.

The I.M.F. warns that a global recession could soon be at hand.
Alan Rappeport (NYT) Jul 26, 2022
The International Monetary Fund downgraded its growth forecasts and projected higher inflation around the world

Global Economic Growth Slows Amid Gloomy and More Uncertain Outlook
Pierre-Olivier Gourinchas (IMF) Jul 26, 2022
The world's three largest economies are stalling, with important consequences for the global outlook. Inflation is a major concern.

Is the US already in a recession?
Julian Jacobs (OMFIF) Jul 26, 2022
Economists often hold that a sign of a recession is when everyone believes that one is underway. It may be that this is a self-fulfilling prophecy. Or it may be indicative of a collective understanding of fundamental macroeconomic challenges. Key signals of turbulence are present and the US economy is marred by structural challenges that make shocks harder to stomach. So, while a recession might not be declared this week, the prospect of an imminent downturn remains large.

The ECB's Moves Make Sense, But Won't Be Enough
Bloomberg View Jul 26, 2022
Lagarde and her colleagues can't do it all. The euro zone will be in serious trouble unless the EU's leaders step up.

Global Central Banking Goes on Trial. In Australia
Daniel Moss (Bloomberg Opinion) Jul 26, 2022
It's now open season on the once-revered RBA. The issues to be raked over in a rare review will touch monetary policy everywhere.

Who Says China Has Locked in the EV Supply Chain?
Anjani Trivedi (Bloomberg Opinion) Jul 26, 2022
As the battery supply chain gets concentrated in the hands of a few countries, a forgotten metal could help emerging and developing markets avoid getting left behind

Sneaky Shrinkflation Is Driving People Crazy
Virginia Postrel (Bloomberg Opinion) Jul 26, 2022
Packaging less stuff for the same price doesn't fool consumers or economists. But diminishing quality imposes equally maddening extra costs that are almost impossible to measure.

A Decade of "Whatever It Takes"
Harold James (Project Syndicate) Jul 26, 2022
The European Central Bank has long managed to skirt uncomfortable questions about its implicit role in setting conditions for domestic policymaking within highly indebted member states. But with a new asset-purchasing tool, the underlying politics of this apparently technocratic approach will be easier to discern.

The long-run labour market effects of the Canada–US Free Trade Agreement
Brian Kovak and Peter Morrow (VoxEU) Jul 26, 2022
Increased import competition has been found to depress labour market outcomes, leading to pessimism that classic gains from trade are worth the accompanying labour market disruptions. This column examines the effect of the 1989 Canada-US Free Trade Agreement. While Canadian workers suffered short-run displacement and earnings losses in response to increased import competition, long-run labour market outcomes, such as years worked and cumulative earnings, were largely unaffected. Canadian workers in industries that obtained increased access to US markets experienced short-run gains, but these effects had largely disappeared by 2004.

Not Yet a Recession Way Down Inside: Recap of Key Recession Indicators & Introducing the Recession Monitor
Tim Quinlan and Shannon Seery (WF Econ Group) Jul 26, 2022
Even if GDP posts back-to-back declines, the economy is not yet in recession, though we suspect it will be within the next six months. Because defining something as important as a recession is more than mere semantics; this report unpacks the right variables to watch and introduces a new at-a-glance tool to get the next recession call right.

The Fed's Balance Sheet: Part I: The Nuts and Bolts of the Balance Sheet
Jay H. Bryson, Michael Pugliese, and Karl Vesely (WF Econ Letter) Jul 26, 2022
In this first installment of a three-part series on the balance sheet of the Federal Reserve, we start by answering some of the more basic questions about the central bank's balance sheet, such as what are its main assets and liabilities and what makes them grow/shrink. In the final two installments of this series, we will use a similar framework to discuss what effects quantitative tightening may have on financial conditions and the real economy as well as whether the Fed's balance sheet will ever return to a "normal" size.

China's emerging Belt and Road debt crisis
FT View Jul 27, 2022
The architecture of global development finance needs an overhaul.

Hungary's economic woes force Viktor Orbán to bow to EU and investors
Marton Dunai and Jonathan Wheatley (FT) Jul 27, 2022
Energy subsidies and tax breaks are scaled back, while justice and social reforms are offered to Brussels as market pressures bite

The euro's drama is not an existential crisis
Alan Beattie (FT) Jul 27, 2022
The currency has become more resilient with every trauma it has survived.

Italian companies braced for more political uncertainty
Silvia Sciorilli Borrelli (FT) Jul 27, 2022
Draghi's departure raises concerns over reform commitments made to secure EU funding.

Trouble is coming for emerging markets beyond Sri Lanka
Megan Greene (FT) Jul 27, 2022
There's a long list of highly indebted countries that look vulnerable when choosing between paying creditors or food and fuel.

Investors need to stay away from the herd to outperform
Howard Marks (FT) Jul 27, 2022
Portfolio shifts should not be based on short-term results as no strategy will make every quarter or year successful.

Investors Love Jerome Powell
WSJ View Jul 27, 2022
But is a fed funds rate at 2.5% really 'neutral' with inflation at 9%?

Goodbye Fed Forward Guidance? Let Us Hope
WSJ View Jul 27, 2022
Jerome Powell takes a half-step toward ending a misguided policy tool.

Stop Panicking About the U.S. Economy
Dennis Kneale (WSJ) Jul 27, 2022
Among the reasons for optimism: lots of jobs, anti-inflationary pressures and a decline in oil prices

Global economic recovery slows as risks bite in 2022
Dennis Shen (OMFIF) Jul 27, 2022
The global economic recovery is slowing as elevated commodity prices, weakened economic sentiment and rapid tightening of global rates take their toll. There will be uneven growth across many economies after the crystallisation of multiple downside risks, such as rising inflation, central bank tightening, Russian aggression in Ukraine, emerging market vulnerabilities and a correction of bubbly financial asset markets. Faster policy tightening will prevent inflation from becoming more deeply engrained but it raises the risk of policy mistakes that exacerbate financial instability.

Shifting Global Winds Pose Challenges to Latin America
Gustavo Adler, Ilan Goldfajn, and Anna Ivanova (IMF) Jul 27, 2022
The region continued its strong recovery in early 2022, but decelerating economic activity and persistent inflation will test its resilience.

The silver linings of a recession
Economist Jul 27, 2022
Lower inflation and greener energy are worth the price of a short downturn

DeFi And Degrowth: Or How Not to Fix Capitalism
Lionel Laurent (Bloomberg Opinion) Jul 27, 2022
Real generational problems won't be fixed by dystopic thinking.

Why the Fed Should Keep an Open Mind
Bloomberg View Jul 27, 2022
Reading the economy has rarely been this difficult. The central bank should take care not to box itself in.

Low-Income Consumers Get a Break, But It Might Be Brief
Conor Sen (Bloomberg Opinion) Jul 27, 2022
Falling gas prices and an inventory glut will help households that suffered the most as inflation surged.

Do You Think the Fed Hasn't Done Enough? Think Again
Nir Kaissar (Bloomberg Opinion) Jul 27, 2022
Critics have accused the central bank of being too slow and too passive in its efforts to curb rising prices. The record suggests otherwise.

Strong Dollar Always Clobbers Developing Nations
Stephen Mihm (Bloomberg Opinion) Jul 27, 2022
History offers centuries of proof that overseas borrowing courts chaos when the US currency surges.

Are Interest Rates at Neutral? Markets Certainly Hope So
Mohamed A El-Erian (Bloomberg Opinion) Jul 28, 2022
Fed Chair Jerome Powell dangled the idea that the central bank has already done the bulk of what is needed to combat inflation. Let's hope he's right.

To Save the Planet, Poor Nations Need to Get Paid
Mihir Sharma (Bloomberg Opinion) Jul 27, 2022
Reacting with outrage when countries such as Congo decide to open up forests and peatlands to drilling is not just absurdly hypocritical, it's impractical.

Leaked Data Show China's Population Is Shrinking Fast
Yi Fuxian (Project Syndicate) Jul 27, 2022
Because China has always massaged its demographic figures and cracked down on anyone who challenges the official line, there are endless debates about the true size and growth trajectory of the country's population. But a recent, large-scale data breach offers some sorely needed clarity.

The ECB's Political Overreach
Otmar Issing (Project Syndicate) Jul 27, 2022
The European Central Bank's new Transmission Protection Instrument is as ambitious as it is risky. Not only does it involve the central bank in tasks that lie far outside its remit, but it has also been unveiled at a time when monetary policymakers should be focused squarely on maintaining price stability.

The ECB's Toxic Bond-Purchase Program
Lars P. Feld, Clemens Fuest, Volker Wieland, Justus Haucap, Heike Schweitzer, and Berthold U. Wigger (Project Syndicate) Jul 27, 2022
It is unclear why the European Central Bank has introduced a new asset-purchase instrument instead of using its existing Outright Monetary Transactions facility. By shielding countries from both market forces and political commitments, the Transmission Protection Instrument risks destabilizing European monetary union.

Argentina's Never-Ending Tragic Farce
Andrés Velasco (Project Syndicate) Jul 27, 2022
Argentine voters are no strangers to financial turmoil, but they keep electing politicians who run large fiscal deficits and finance them by printing pesos. Could it be that the only way for politicians to show they want to save the economy is to destroy it first?

Large firms react more strongly to macro shocks, and it matters
Jean-Charles Bricongne, Juan Carluccio, Lionel Fontagné, Guillaume Gaulier, and Sebastian Stumpner (VoxEU) Jul 27, 2022
It is important to understand the micro drivers of the economy's reaction to large macro shocks. This column uses French firm-level data from 1993-2020 to study the contribution of the largest exporters to aggregate export fluctuations. The authors find that top exporters explained over 40% of aggregate fluctuations and drove the export collapses during the Global Crisis and the pandemic. Moreover, the 2020 collapse of French exports was driven by the higher sensitivity of large firms to demand shocks rather than disruptions to global value chains.

Feedback Trading and the Chinese Put Warrants Bubble
Neil D. Pearson, Zhishu Yang, and Qi Zhang (VoxChina) Jul 27, 2022
There was a bubble in the prices of put warrants traded on the Shanghai and Shenzhen stock exchanges during the summer of 2007. We use investor trading records from a large securities firm to show that put warrant investors engaged in a particular form of feedback trading. This feedback trading exacerbated an initial run-up in put warrant prices caused by a change in the stock transaction tax, and created the bubble...

China's Village Bank Collapses Could Cause Dangerous Contagion
Zongyuan Zoe Liu (FP) Jul 27, 2022
Local problems threaten to spread into a serious crisis.

FOMC Raises Rates by 75 bps and Indicates More to Come
Jay H. Bryson (WF Econ Group) Jul 27, 2022
The FOMC raised rates today by 75 bps, which was widely expected, and it indicated that further tightening is likely. But it also suggested that the degree of further tightening will depend on incoming data.

The Fed's rate increases are a matter of high interest for everyone Premium content
Claire Jones (FT) Jul 28, 2022
Another wave of global rate rises beckons following the US central bank's latest mega move.

Splendid isolation? Most people prefer globalisation
Simon Kuper (FT) Jul 28, 2022
Once insular places like Ireland and Singapore understand the benefits of global exchange. Ukrainians yearn for it.

What Bangladesh can teach others about development
David Pilling (FT) Jul 28, 2022
Despite the country's current financial difficulties, nations in Africa can learn from its rapid progress.

Investors clutch at reasons to hope
Katie Martin (FT) Jul 28, 2022
Powell comments on the interest rate outlook lift sentiment but markets should not ignore everything else.

They Flocked to China for Boom Times. Now They're Thinking Twice.
Daisuke Wakabayashi and Patricia Cohen (NYT) Jul 28, 2022
Global businesses and industries that rode the China growth wave for years are bracing for the fallout of a slowing economy.

The Biden Stagflation Arrives
WSJ View Jul 28, 2022
Bad policies have produced slow economic growth, falling real wages, and soaring prices.

The 20-Year Experiment Holding America Back
John Berlau and Josh Rutzick (WSJ) Jul 28, 2022
As the economy struggles with inflation and now a recession, it's time to curtail the Sarbanes-Oxley Act.

The Schumer-Manchin Bill Will Ease Inflation and Climate Change
Jason Furman (WSJ) Jul 28, 2022
It's a worthy compromise that also protects the vulnerable and reduces the federal budget deficit.

Asia's Economies Face Weakening Growth, Rising Inflation Pressures
Krishna Srinivasan (IMF) Jul 28, 2022
A multifaced response, including increasing interest rates, is needed to prevent an upward spiral of price expectations and rising capital outflows.

Global Banks Can Ride India's Dollar Crunch In Style -- 2013 Style
Andy Mukherjee (Bloomberg Opinion) Jul 28, 2022
Pakistan and Bangladesh are running to the IMF. But New Delhi has a not-so-secret weapon.

Are Commodity Markets on the Turn?
David Fickling (Bloomberg Opinion) Jul 28, 2022
A strange thing has been happening: excess supplies are slowly tiptoeing back into commodity markets.

How a Universal Basic Income Helped Kenyans Fight COVID
Tavneet Suri and Nidhi Parekh (Project Syndicate) Jul 28, 2022
New evidence from two Kenyan counties shows that cash transfers and other income supplements reduce hunger, illness, and risk exposure during crises. Countries should consider building transfer systems that can be activated at short notice to help people weather unanticipated shocks.

Multilateralism and the Private Sector
Gelsomina Vigliotti (Project Syndicate) Jul 28, 2022
In gatherings this summer and later this year, G20 member states will confront a raft of global issues that require their attention and cooperation. But while inter-governmental cooperation is crucial, so, too, are strategies to leverage the ingenuity and capacity of businesses and the financial industry.

Strong dollar is a major headache for other countries
FT View Jul 29, 2022
World's central banks may have to go for higher rates because of Fed hikes.

China's Economic Struggles
WSJ View Jul 29, 2022
As growth slows, President Xi Jinping may play the nationalism card.

The Fed Alone Can't Slay Inflation
French Hill and Amity Shlaes (WSJ) Jul 29, 2022
The money supply is only half the equation. Congress and the president need to encourage innovation and productivity.

Sino-forming of Global South passes point of no return
David P. Goldman (AT) Jul 29, 2022
As Western nations question the benefits of globalization, China has become the world's leading globalizer. China's exports to the largest economies of the Global South have nearly doubled from pre-Covid levels to a seasonally-adjusted US$70 billion in June 2022 from $38 billion in June 2019. Several factors have impelled the surge in Chinese exports.

Measuring business uncertainty in developing and emerging economies
Edgar Avalos, José María Barrero, Elwyn Davies, Leonardo Iacovone, and Jesica Torres (Brookings) Jul 29, 2022
The new World Bank data refute those concerns and reveal systematic differences in the way business managers perceive uncertainty across countries that have different income levels.

Turning Off Congo's Looting Machine
John Prendergast (Project Syndicate) Jul 29, 2022
The Democratic Republic of the Congo has been pillaged by foreign governments and corporations for more than 500 years, and this sordid pattern continues to this day. Given this history, is it any wonder that the country suffers from massive corruption, perpetual conflict, and state capture?

Indirect effects of access to finance: Evidence from China
Jing Cai and Adam Szeidl (VoxDev) Jul 29, 2022
Access to finance improved firm performance, product quality and price, but disadvantaged competitor firms

Macroeconomic costs of conflict: Impact on GDP and refugee flows
Natalija Novta and Evgenia Pugacheva (VoxEU) Jul 29, 2022
Analysis of large-scale conflicts over the past 30 years can shed light on the range of possible economic outcomes for Ukraine. This column shows that, in general, the impact on GDP is very large, persisting even ten years after conflict onset, and affects all sectors of the economy. This is overwhelmingly driven by declines in private consumption and official trade. In addition, large-scale conflicts often lead to persistent long-term refugee outflows to both neighbouring non-advanced economies (given the location of most conflict-affected countries) and non-neighbouring advanced economies. As such, policies to absorb refugees and facilitate post-war reconstruction need to be long-term as well.

The Russia-Ukraine war, European financial integration, and crises
Philipp Hartmann, Philippe Molitor, Annachiara Tanzarella, and Bruun de Jong (VoxEU) Jul 29, 2022
Russia's invasion of Ukraine added another one to a series of crises affecting Europe over the last decade and a half. This column finds that fragmentation of euro area financial markets has been relatively limited, as policymakers have benefitted from reforms after and experiences with past crises, European countries and authorities reacted with quite some unity, and direct financial exposures to Russia and Ukraine are relatively small. Cross-country divergences of euro area asset prices appear to have been particularly driven by bond markets and related to the countries with the greatest energy and financial exposures as well as to changes in economic uncertainty.

The International Monetary Fund: Holy Grail or Poisoned Chalice?
Anusha Rathi (FP) Jul 29, 2022
As the global south struggles to grapple with its debt pandemic, experts question the efficacy of the IMF's conditional lending.

Eurozone Data Reinforces Case For Another 50 Basis Points ECB Hike
Nick Bennenbroek (WF Econ Group) Jul 29, 2022
The Eurozone economy proved pleasantly—and surprisingly—resilient in Q2, with the initial estimate showing the region's GDP grew by 0.7% quarter-over-quarter. Not only was that firmer than the consensus forecast for a 0.2% gain, it was also a modest improvement from the 0.5% gain seen in Q1. The Eurozone July CPI was also released, and showed a further acceleration of inflation across the region. Headline CPI inflation quickened to 8.9% year-over-year, the fastest pace on record. The quickening in inflation was driven by higher food prices, and also reflected broader price gains, as the core CPI quickened to 4.0% and the services CPI quickened to 3.7%. We view the Eurozone Q2 GDP figures as resilient enough, and July inflation figures as worrisome enough, to reinforce the case for another 50 bps Deposit Rate increase from the European Central Bank (ECB) in September, even with some concerns about the longer-term economic outlook for the region.

Argentina Falling Deeper Into Crisis? Part II
Brendan McKenna (WF Econ Group) Jul 29, 2022
Earlier this month, we commented on how we felt Argentina had slipped further into crisis following the appointment of Silvina Batakis as economy minister. Indeed, Batakis' time was punctuated by elevated local financial market volatility and concerns that the latest IMF program would be disregarded. In the span of a few weeks, Batakis suggested the IMF program was a priority and tried to calm markets by engaging with multi-lateral lenders and investors; however, those efforts proved futile as she has been removed from her post and replaced by Sergio Massa, president of the lower house of Congress. In our view, under Massa, Argentina is more likely to achieve IMF targets and be dedicated to a successful IMF program. The flip side of this commitment is that the IMF requires specific policy implementation to correct economic imbalances, which should still lead to a peso devaluation by the end of this year. However, under Massa we believe the probability of sovereign default is now lower and that risks are now tilted toward a shallower peso devaluation than we forecast.

Confessions of a Repentant Bubble Theorist
Gadi Barlevy (FRB Chicago Econ Perspectives) Jul 29, 2022
The author argues that while models of bubbles seem like a natural framework for studying asset booms, whether an asset is a bubble may not matter in determining if policymakers should intervene against the boom to mitigate the fallout should the boom turn into a bust.

Age of 'permacrisis' teaches EU that solidarity is arduous but worth it
Anne-Sylvaine Chassany (FT) Jul 30, 2022
With each new shock, the bloc moves closer to a cohesive approach but it will always be nation first.

Blaming Inflation on Central Banks? We Enabled Them
Daniel Moss (Bloomberg Opinion) Jul 31, 2022
A new paper from inside the club says that central bankers became over-confident in their powers. But the public and politicians need to recognize who conferred them with godlike standing.

Boosting civic trust is essential to Latin American economic growth
Eric Parrado (FT) Jul 31, 2022
Governments must be transparent and engage citizens in decisions about tax, spending and regulation.

The Inflation Reduction Act Won't Reduce Inflation
Stephen Miran (WSJ) Jul 31, 2022
The Democrats' latest inaptly named measure will hamstring business with more rules, taxes and red tape, making the supply-demand imbalance even worse.