News & Commentary:

Articles/Commentary

America's Global Corruption Crusade
NYT Aug 1, 2016
An effort by American prosecutors to fight corruption abroad is starting to bear fruit, but sweeping reforms are needed to address the problem.

The time to rail against the elites was the 1970s
Janan Ganesh (FT) Aug 1, 2016
Populists credit our rulers with an omnipotence that makes them culpable for all failures.

What Kweku Adoboli and fellow fraudsters can teach banks
Andrew Hill (FT) Aug 1, 2016
Former UBS trader has insights into the pressures traders still face.

Conflict and FDI: mapping the connection
Michal Kaczmarski (FT) Aug 1, 2016
Conflict is a deterrent to foreign investment but not in every case.

Europe's Stress Tests Fail Again
Bloomberg View Aug 1, 2016
For the sake of the economy, this charade must end.

Europe’s Brexit Hangover
Nouriel Roubini (Project Syndicate) Aug 1, 2016
The market reaction to the Brexit shock has been relatively mild, because it was regional rather than global, with the impact concentrated in the UK and Europe. But the risk of European and global volatility may have been only briefly postponed.

Why Democracy Requires Trusted Experts
Jean Pisani-Ferry (Project Syndicate) Aug 1, 2016
A few decades ago, it was widely assumed that progress in mass education would gradually bridge the gap between scientific knowledge and popular belief, thereby contributing to a more serene and more rational democracy. The evidence is that it has not.

A democracy deficit plagues the US and the European Union
David V Johnson (Aeon) Aug 1, 2016
The European Union and the United States suffer from democracy deficits.

Brazil’s Billionaire Problem
Patrick Iber (TNR) Aug 1, 2016
To understand global inequality, you have to understand Brazil's inequality.

Dealing with public debt in the Eurozone
Charles Wyplosz (VoxEU) Aug 1, 2016
The German Council of Economic Advisors recently proposed a mechanism for the orderly restructuring of sovereign debt in the Eurozone. This column argues that the proposal suffers from some inherent weaknesses. The proposal builds on logical errors and embeds well-established ideas in a setup that suffers from serious limitations. It also neglects alternative strategies that favour targeting large debts as soon as possible. The German Council of Economic Advisors recently proposed a mechanism for the orderly restructuring of sovereign debt in the Eurozone. This column argues that the proposal suffers from some inherent weaknesses. The proposal builds on logical errors and embeds well-established ideas in a setup that suffers from serious limitations. It also neglects alternative strategies that favour targeting large debts as soon as possible.

Brexit Beckons: Thinking ahead by leading economists
Richard Baldwin (VoxEU) Aug 1, 2016
The June 2016 Brexit referendum saw British voters reject membership of the European Union. Now that a decision has been made, it is time to look forward and find the best solutions for the future of both the UK and the EU. This VoxEU eBook regroups the views of more than a dozen leading economists and specialists on a broad range of issues, from various perspectives. The June 2016 Brexit referendum saw British voters reject membership of the European Union. Now that a decision has been made, it is time to look forward and find the best solutions for the future of both the UK and the EU. This VoxEU eBook regroups the views of more than a dozen leading economists and specialists on a broad range of issues, from various perspectives.

Shinzo Abe’s stimulus is a lesson for the world
Adam Posen (FT) Aug 2, 2016
Eurozone nations should use expansionary fiscal policy for structural reform.

Emerging market bonds lure investors seeking yield
Jonathan Wheatley (FT) Aug 2, 2016
Further compression of sovereigns’ risk premium over US Treasuries expected.

The EU pensions wrangle is a taste of things to come
Gideon Rachman (FT) Aug 2, 2016
Brexit negotiations will be a long, drawn-out affair.

The People's Republic
Benjamin L. Read (WSJ) Aug 2, 2016
The Western press insists that the Chinese people are ready for democracy. So why does the regime continue to enjoy popular support?

Economists Turn a Blind Eye to Historical Data
Barry L Ritholtz (Bloomberg View) Aug 2, 2016
To get the right view of post-recession recoveries, you have to look at debt-induced crises. Why are the experts ignoring that?

Through the Venezuelan Looking Glass
Ricardo Hausmann (Project Syndicate) Aug 2, 2016
The chaos into which Venezuela has fallen may seem to be beyond belief, given that the country sits on the world's largest oil reserves. In fact, Venezuela's meltdown is a product of belief – and it is not alone in adopting a dysfunctional paradigm for interpreting the world.

Brexit Fudge
Harold James (Project Syndicate) Aug 2, 2016
British Prime Minister Theresa May's “Brexit means Brexit” is a simple, powerful slogan that sends a clear, unmistakable message to all who are hoping for a reevaluation of June's referendum result: the UK will be leaving the EU. But what does that mean?

Capitalist Democracy’s Left-Behinds Challenge the System
Humphrey Hawksley (YaleGlobal) Aug 2, 2016
Extreme fixes proposed for democracy’s faltering economies and an ineffective political class that’s out of touch

Bank leverage and monetary policy's risk-taking channel
Giovanni Dell'Ariccia, Luc Laeven and Gustavo Suarez (VoxEU) Aug 2, 2016
The Global Crisis has renewed debate about the relationship between short-term interest rates and bank risk taking. Theory offers ambiguous and conflicting predictions. This column explores the relationship using confidential bank-level data from the US. Bank risk taking is found to be negatively associated with short-term interest rates, and this is more pronounced for highly capitalised banks. These findings can help inform the design of monetary policy. The Global Crisis has renewed debate about the relationship between short-term interest rates and bank risk taking. Theory offers ambiguous and conflicting predictions. This column explores the relationship using confidential bank-level data from the US. Bank risk taking is found to be negatively associated with short-term interest rates, and this is more pronounced for highly capitalised banks. These findings can help inform the design of monetary policy.

Crisis management at a bitcoin exchange is a sign of immaturity
Andrew Hill (FT) Aug 3, 2016
Avoid imitating Bitfinex’s blizzard of customer communication.

South Africa has a rescue plan — it needs to implement it
David Pilling (FT) Aug 3, 2016
The country is among the most unequal on earth — worse than Haiti, worse than Brazil.

A strong industrial strategy has many benefits
Mariana Mazzucato (FT) Aug 3, 2016
The argument should be about the best way the state can help drive growth.

Equities and bonds feel impact of $40 oil
Elaine Moore, Anjli Raval and Robin Wigglesworth (FT) Aug 3, 2016
Fresh fears on economic implications centre on high-yield bonds and emerging markets.

Not a time for switching to emerging markets
John Authers (FT) Aug 3, 2016
EM assets are vulnerable both to a rise in bond yields and perceived geopolitical risk.

The Promise of Argentina’s Economic Transition
Neil Brown (II) Aug 3, 2016
President Mauricio Macri has his work cut out for him, but the reforms instituted so far show that the administration is on the right track.

Africa’s urbanisation and structural transformation
Patrick Love (OECD Insights) Aug 3, 2016
We don’t know the name, or the place and exact date of birth, of the baby who changed world history. My guess is that she was born somewhere in Africa in 2007.

High Time for Europe to Shed its “Universal Banking Model”
Paul Goldschmidt (Globalist) Aug 3, 2016
The “Universal Banking Model” has become a threat to economic, financial and social stability.

A New Start for India's Economy
Bloomberg View Aug 3, 2016
South Asia's powerhouse moves closer to enacting a much-needed tax reform.

Japan's New Stimulus Is Just the Same Old Thing
Noah Smith (Bloomberg View) Aug 3, 2016
Definition of insanity: doing the same deficit spending over again and expecting a different result.

Markets Give Europe's Bank Tests a Failing Grade
Mark Gilbert (Bloomberg View) Aug 3, 2016
Fewer banks is a better solution to Europe's problems than simply shrinking banks.

Why Don’t We Trust Our Leaders?
Ngaire Woods (Project Syndicate) Aug 3, 2016
In developed democracies today, voters are sending a clear message to establishment leaders: we don't trust you anymore. And, in the absence of leaders who show purpose, impartiality, and competence, they have been all too willing to choose dangerous alternatives.

The UK’s new trade priorities
Angus Armstrong (VoxEU) Aug 3, 2016
There are three trade policy challenges facing the UK outside the EU: it must negotiate a new relationship with the EU, disentangle itself from WTO Agreements it entered into as an EU member, and restore preferential trade with the many dozens of trade partners that are now covered by EU trade agreements. As difficult trade-offs are inevitable in all of these, politicians should decide how the preferences of UK citizens might best map onto these alternative arrangements. This column argues that the optimal solution is to combine future trade arrangements with domestic policies that compensate UK citizens who face the costs of trade agreements. There are three trade policy challenges facing the UK outside the EU: it must negotiate a new relationship with the EU, disentangle itself from WTO Agreements it entered into as an EU member, and restore preferential trade with the many dozens of trade partners that are now covered by EU trade agreements. As difficult trade-offs are inevitable in all of these, politicians should decide how the preferences of UK citizens might best map onto these alternative arrangements. This column argues that the optimal solution is to combine future trade arrangements with domestic policies that compensate UK citizens who face the costs of trade agreements.

Brexit realism: What economists know about costs and voter motives
David Miles (VoxEU) Aug 3, 2016
To some, the Brexit referendum was a failure by economists to persuade UK voters that leaving the EU would entail major economic costs. This column argues for a more nuanced view by making two points. First, it questions whether there really is a consensus about the costs. While all the mainstream estimates were negative, they ranged from rather small to nearly 10% - a range that hardly sounds like a consensus. Moreover, the key mechanism - Brexit's impact on productivity growth - is not something economists really understand. Second, a rational voter could accept the cost as a tolerable price for having greater independence from EU decisions. Economics does not tell us that a voter who makes such a choice is ignorant, irrational, or economically illiterate. To some, the Brexit referendum was a failure by economists to persuade UK voters that leaving the EU would entail major economic costs. This column argues for a more nuanced view by making two points. First, it questions whether there really is a consensus about the costs. While all the mainstream estimates were negative, they ranged from rather small to nearly 10% - a range that hardly sounds like a consensus. Moreover, the key mechanism - Brexit's impact on productivity growth - is not something economists really understand. Second, a rational voter could accept the cost as a tolerable price for having greater independence from EU decisions. Economics does not tell us that a voter who makes such a choice is ignorant, irrational, or economically illiterate.

The Bank of England has delivered – now for a fiscal response
FT View Aug 4, 2016
Monetary stimulus can only cushion the adjustment to a new reality.

Emerging markets — time for investors to look again?
David Stevenson (FT) Aug 4, 2016
Focus on quality assets in the right geographies with real cash flows and good managers.

US economy: Decline of the start-up nation
Sam Flemming (FT) Aug 4, 2016
As new business formations wane, can the country of Ford and Jobs get its capitalist mojo back?

A tweak to helicopter money will help the economy take off
Robert Skidelsky (FT) Aug 4, 2016
One idea is to give cash to households with an incentive not to hoard it.

Preparing for a World Without Cash
Max Raskin and David Yermack (WSJ) Aug 4, 2016
The Federal Reserve has done almost nothing to study how a digital currency might work.

Well-Being in China Across Time and Space
Asher Rose (PIIE) Aug 4, 2016
China has experienced tremendous growth in recent years. However, its growth has not spread evenly between the inland and the coastal provinces. In my research, I am addressing whether the increase in quality of life has been evenly distributed across regions.

Trump and the damage done
Joseph E. Stiglitz (Boston Globe) Aug 4, 2016
One of Donald Trump’s slogans is “Make America Great Again.” The irony is that probably never before has a presidential candidate done so much damage — damage that will be hard to repair even if he is not elected.

Globalization and its New Discontents
Joseph E. Stiglitz (Project Syndicate) Aug 4, 2016
Many neoliberal economists, confronted with surging support for populists in Europe and the US, remain convinced that everyone really is benefiting from globalization; they just don't know it. But if the problem is one of psychology, not economics, income data suggest that it is the neoliberals who would benefit from therapy.

The IMF Still Misunderstands the Euro Crisis
Anders Åslund (Project Syndicate) Aug 4, 2016
In July, the IMF’s Independent Evaluation Office released a major report on how the Fund handled the euro crisis after 2010. The report is critical of Fund behavior; but, as with previous IMF self-evaluations, it misses key issues – and thus reinforces assumptions that need to be challenged.

Xi Jinping is No Mao Zedong
Keyu Jin (Project Syndicate) Aug 4, 2016
Much of the world is watching Chinese President Xi Jinping with suspicion as he re-centralizes authority and pursues a radical anti-corruption campaign that many think is a fig leaf for a political purge. The truth is far less sinister.

China’s Chance to Lead on Development
Justin Yifu Lin (Project Syndicate) Aug 4, 2016
In September, China will host the G20 meeting of world leaders for the first time, and it could not have chosen a more opportune moment to assume a leadership role. China is now the world's third largest source of foreign direct investment, so it should use the summit to press for a new international framework to boost FDI.

Unwanted Migration: How Governments Cope?
Joseph Chamie and Barry Mirkin (YaleGlobal) Aug 4, 2016
Climate change, shrinking resources, conflict ensure ongoing migration – and governments cannot afford to ignore the challenges

Looking back at the ex ante estimates of the costs of Brexit
Nauro Campos (VoxEU) Aug 4, 2016
On 23 June 2016, 52% of British voters decided the UK should leave the European Union, in a decision that went against the advice of most economists. This column assesses the quality of that advice, and argues that while gaps in knowledge may have hindered forecasts, Brexit can essentially be put down to three things: an unnecessary manifesto pledge by David Cameron, a lack of engagement by the City in the Remain campaign, and the pro-Brexit stance of some of the UKís major newspapers. On 23 June 2016, 52% of British voters decided the UK should leave the European Union, in a decision that went against the advice of most economists. This column assesses the quality of that advice, and argues that while gaps in knowledge may have hindered forecasts, Brexit can essentially be put down to three things: an unnecessary manifesto pledge by David Cameron, a lack of engagement by the City in the Remain campaign, and the pro-Brexit stance of some of the UKís major newspapers.

The changing world of work challenges us all
Emma Jacobs (FT) Aug 5, 2016
Notebook: I have been constantly surprised by the entrepreneurial spirit of ordinary people.

China's Coming Population Crisis: Guns vs. Canes
Gordon G. Chang (WA) Aug 5, 2016
An often overlooked factor possibly influencing China’s belligerence in the South China Sea is the push to make every gain possible before the country's aging crisis strikes.

Brexit Killed Britain's New Vibe
Leonid Bershidsky (Bloomberg View) Aug 5, 2016
The U.K. has been working on its image since the late 1990s. Now it has to start over.

Free Trade’s Diminishing Returns
Jomo Kwame Sundaram and Vladimir Popov (Project Syndicate) Aug 5, 2016
Given more than a decade of stagnant and falling incomes across the developed world, policymakers in advanced economies may want to reconsider growth policies based on free trade. Meanwhile, policymakers in the developing world should be especially wary of the non-trade provisios included in recently proposed free-trade agreements.

Putting People First in Europe
Jean-Paul Fitoussi and halid Malik (Project Syndicate) Aug 5, 2016
The populist discontent that fueled Brexit in the UK is on the rise throughout Europe, suggesting that policymakers have lost sight of the European project’s central objective: to ensure the wellbeing of all Europeans. If an economy can be said to be growing when only a small minority gains, growth becomes a meaningless concept.

Brexit and Globalisation
Diane Coyle (VoxEU) Aug 5, 2016
The UK's "Leave" vote could be seen as a vote against globalisation and its uneven impact on different parts of the country, rather than a vote specifically against the EU. The proportions voting for Leave were higher in the Midlands and North of England, where deindustrialisation struck hardest and where average incomes have stagnated. London, the UK's only truly global city, saw growth and a high share of Remain voters. This column argues that the new Conservative administration, swept in by the Brexit vote, should reinforce the very recent policy emphasis on economic growth outside global London and its hinterland. The UK's "Leave" vote could be seen as a vote against globalisation and its uneven impact on different parts of the country, rather than a vote specifically against the EU. The proportions voting for Leave were higher in the Midlands and North of England, where deindustrialisation struck hardest and where average incomes have stagnated. London, the UK's only truly global city, saw growth and a high share of Remain voters. This column argues that the new Conservative administration, swept in by the Brexit vote, should reinforce the very recent policy emphasis on economic growth outside global London and its hinterland.

The Greek crisis: An autopsy
Pierre-Olivier Gourinchas, Thomas Philippon and Dimitri Vayanos (VoxEU) Aug 5, 2016
The Greek crisis is one of the worst in history, even in the context of recorded ‘trifecta’ crises – the combination of a sudden stop with output collapse, a sovereign debt crisis, and a lending boom/bust. This column quantifies the role of each of these factors to better understand the crisis and formulate appropriate policy responses. While fiscal consolidation was important in driving the drop in output, it accounted for only for half of that drop. Much of the remainder can be explained by the higher funding costs of the government and private sectors due to the sudden stop. The Greek crisis is one of the worst in history, even in the context of recorded ‘trifecta’ crises – the combination of a sudden stop with output collapse, a sovereign debt crisis, and a lending boom/bust. This column quantifies the role of each of these factors to better understand the crisis and formulate appropriate policy responses. While fiscal consolidation was important in driving the drop in output, it accounted for only for half of that drop. Much of the remainder can be explained by the higher funding costs of the government and private sectors due to the sudden stop.

Policy uncertainty and the economy
Kevin A. Hassett and Joseph W. Sullivan (AEI) Aug 5, 2016
Although much progress has been made in identifying important correlations between uncertainty and economic activity, concerns about causal identification remain. However, new empirical measures of uncertainty allow economists to ask questions with a precision likely to advance enduring debates on sources of uncertainty and their effects. The implications of elevated political polarization offer the most parsimonious explanation of what are otherwise puzzling results on the economic effects of uncertainty. According to historical data, in the month of a United States presidential election, the odds of the US entering a recession within the next 12 months are roughly twice what they are in a typical month.

We're in a Low-Growth World. How Did We Get Here?
Neil Irwin (NYT) Aug 6, 2016
Economic growth in advanced nations has been weaker for longer than it has been in most people's lifetimes.

Migration Fact vs. Migration Fiction
Peter Sutherland (Project Syndicate) Aug 6, 2016
Because migration affects economies and societies worldwide, it rightly belongs at the center of political debate. But public opinion on this crucial topic tends to be shaped by emotions, rather than facts.

Globalization Is the Only Answer
Anabel González (Project Syndicate) Aug 6, 2016
The UK's Brexit referendum is the latest sign of rising public distrust of free trade. The danger should not be underestimated: Isolationism and protectionism, if taken too far, would break the trade-based economic engine that has delivered peace and prosperity to the world for decades.

Globalization RIP?
Project Syndicate Aug 6, 2016
Why is the goal of an open and increasingly integrated global economy coming under such fierce attack – and why now? If the ideal world of economists seems more distant than ever, blame the management of that process.

UK-EU relations after Brexit: What's best for the UK economy?
Swati Dhingra and Thomas Sampson (VoxEU) Aug 6, 2016
Several models exist for the UK's relationship with the EU following Brexit. This column argues that from an economic perspective, joining the European Economic Area and retaining access to the Single Market is the best available option. However, given the importance the new UK government – and at least part of the UK public – attaches to imposing controls on immigration from the EU, this option may not be politically viable. The question the UK must address as it debates the aftermath of Brexit is whether the costs of the alternative are a price worth paying. Several models exist for the UK's relationship with the EU following Brexit. This column argues that from an economic perspective, joining the European Economic Area and retaining access to the Single Market is the best available option. However, given the importance the new UK government – and at least part of the UK public – attaches to imposing controls on immigration from the EU, this option may not be politically viable. The question the UK must address as it debates the aftermath of Brexit is whether the costs of the alternative are a price worth paying.

The progressive case for championing pro-growth policies
Lawrence Summers (FT) Aug 7, 2016
Tight labour markets are the best social programme, as they force employers to hire the inexperienced.

Investing: The great escape
Jonathan Wheatley and James Kynge (FT) Aug 7, 2016
Switch into emerging markets is less about potential growth and more to do with stagnation at home.

Why China Can't Solve Its Debt Problem
Christopher Balding (Bloomberg View) Aug 7, 2016
The old playbook isn't working anymore. Here's what might.

Our unhappy end of history
Michael Barone (AEI) Aug 7, 2016
Francis Fukuyama argued in 1992 that democratic capitalism was the only model left for society. Why then, asks Michael Barone, is our politics in chaos?

Growth and debt-to-GDP ratios
Paolo Mauro (VoxEU) Aug 7, 2016
Policymakers use a well established traditional accounting method to analyse past paths and predict future paths of debt ratios. But the traditional accounting exercises underemphasise the role of economic growth. This column proposes a simple, extended accounting framework to recognise the importance of growth more fully and explicitly. It quantifies the role of economic growth in debt-to-GDP measurement for Ireland and Italy, who were similarly placed in 2012 but whose paths diverged significantly in subsequent years. Policymakers use a well established traditional accounting method to analyse past paths and predict future paths of debt ratios. But the traditional accounting exercises underemphasise the role of economic growth. This column proposes a simple, extended accounting framework to recognise the importance of growth more fully and explicitly. It quantifies the role of economic growth in debt-to-GDP measurement for Ireland and Italy, who were similarly placed in 2012 but whose paths diverged significantly in subsequent years.

Brexit: This backlash has been a long time coming
Kevin O’Rourke (VoxEU) Aug 7, 2016
After the Brexit vote, it is obvious to many that globalisation in general, and European integration in particular, can leave people behind – and that ignoring this for long enough can have severe political consequences. This column argues that this fact has long been obvious. As the historical record demonstrates plainly and repeatedly, too much market and too little state invites a backlash. Markets and states are political complements, not substitutes After the Brexit vote, it is obvious to many that globalisation in general, and European integration in particular, can leave people behind – and that ignoring this for long enough can have severe political consequences. This column argues that this fact has long been obvious. As the historical record demonstrates plainly and repeatedly, too much market and too little state invites a backlash. Markets and states are political complements, not substitutes

The global democratic recession
Gideon Rachman (FT) Aug 8, 2016
Democracy is in retreat around the world — for now.

Forget the blame games – Brexit is a chance to fix Europe
Leonhard Fischer (FT) Aug 8, 2016
Europeans should use the vote to start afresh with a blank canvas.

China Needs to Shut Down Zombie Companies to Ensure Recovery
Fan He (II) Aug 8, 2016
Government and banks are keeping failing companies alive with cheap credit, exacerbating China’s problems of debt and overcapacity.

Brazil: Like India or Ghana?
Guy Pfeffermann (Globalist) Aug 8, 2016
Despite repeated high hopes for progress, it has been fifty years of unresolved economic problems in Brazil.

New Bank Rules Won't Stop Bailouts
Satyajit Das (Bloomberg View) Aug 8, 2016
They're likely to have unintended consequences, and may still leave governments on the hook.

China Isn't a Threat to World Order
Feng Zhu (Bloomberg View) Aug 8, 2016
And demonizing the country isn't the best way to encourage a change in behavior.

America’s Looming Debt Decision
Kenneth Rogoff (Project Syndicate) Aug 8, 2016
The US government should not operate like a bank or a hedge fund, loading up on short-term debt to fund long-term projects. With net US government debt already running at 82% of national income, the fiscal costs of a fast upward shift in interest rates could be massive.

The Ten Commandments of an independent UK trade policy
Simon Evenett (VoxEU) Aug 8, 2016
The UK must now formulate and execute an independent trade policy for the first time in over 40 years. This column summarises the catalogue of failure that has been the governance of the world trading system in the 21st century, and proposes Ten Commandments to guide UK trade ministers in the forthcoming negotiations. The UK must now formulate and execute an independent trade policy for the first time in over 40 years. This column summarises the catalogue of failure that has been the governance of the world trading system in the 21st century, and proposes Ten Commandments to guide UK trade ministers in the forthcoming negotiations.

Brexit: Lessons from history
Nicholas Crafts (VoxEU) Aug 8, 2016
Joining the EU raised the level of UK real GDP significantly. This column suggests that leaving the EU will very probably have a negative effect on UK GDP, but history does not tell us how strong this effect will be. However, history does suggest that the notion that there will be a faster rate of long-run trend growth facilitated by Brexit is not persuasive. The obstacles to better supply-side policy are, as ever, to be found in Westminster not in Brussels. Joining the EU raised the level of UK real GDP significantly. This column suggests that leaving the EU will very probably have a negative effect on UK GDP, but history does not tell us how strong this effect will be. However, history does suggest that the notion that there will be a faster rate of long-run trend growth facilitated by Brexit is not persuasive. The obstacles to better supply-side policy are, as ever, to be found in Westminster not in Brussels.

Foreign savings: No gain, some pain
Eduardo Cavallo, Barry Eichengreen and Ugo Panizza (VoxEU) Aug 8, 2016
In theory, a poor country with a low saving rate but good growth prospects can build up its capital stock by running a large and sustained current account deficit. This column asks whether this is feasible and productive in practice. A substantial number of countries in recent decades have been able to run large current account deficits for as long as ten years, but such episodes typically do not end happily. Foreign finance does not appear to be the cure for countries with low domestic savings. In theory, a poor country with a low saving rate but good growth prospects can build up its capital stock by running a large and sustained current account deficit. This column asks whether this is feasible and productive in practice. A substantial number of countries in recent decades have been able to run large current account deficits for as long as ten years, but such episodes typically do not end happily. Foreign finance does not appear to be the cure for countries with low domestic savings.

Democratizing Europe
Richard Youngs (FA) Aug 8, 2016
How the European Union can reform itself.

A Nobel-Winning Economist Has a Plan to Save Europe
Joseph E. Stiglitz (Vanity Fair) Aug 8, 2016
Does it involve saving the euro, too?

PSBC offering is litmus test of investor sentiment towards China
Jennifer Hughes (FT) Aug 9, 2016
Listing of China’s fifth-largest bank by assets should be judged on quality of investors it attracts.

Amundi: downbeat optimism about the world economy
Dan McCrum (FT) Aug 9, 2016
Lack of growth means stock market valuations are justified and investors should return to EM.

India’s one nation sales tax depends on local statesmanship
Swaminathan Aiyar (FT) Aug 9, 2016
Modi’s government is right to set ambitious targets for the GST.

German angst over Chinese M&A
Guy Chazan (FT) Aug 9, 2016
Germany is a top target in China’s search for innovative engineering groups — but some see a threat.

A Nobel Alternative to the Current Euro System
Leonid Bershidsky (Bloomberg View) Aug 9, 2016
Economist Joseph Stiglitz proposes a system under which European countries would get a limited ability to devalue their currencies.

Are regional banks really safer than their global counterparts?
Brian Caplen (Banker) Aug 9, 2016
With BNP Paribas announcing the sale of First Hawaiian Bank, Brian Caplen examines whether banks that do business through a narrow channel really are stronger that those with multiple earning sources.

The Big Idea That Won’t Fix Europe's Banks
Tyler Cowen (Bloomberg View) Aug 9, 2016
A true banking union would take taxpayers where they don't want to go.

Heavy-Metal Markets Have Worrying Echoes of 2006
Mark Gilbert (Bloomberg View) Aug 9, 2016
Returns on stocks and bonds are rising simultaneously. That's disturbing.

Three Paths to European Disintegration
Philippe Legrain (Project Syndicate) Aug 9, 2016
The post-Brexit turmoil appears to have boosted support for mainstream politicians and the EU. But this sentiment is likely to fade as the Brexit fallout begins to sap eurozone economic performance and further polarizes politics in the member states.

There Are No Successful Black Nations
Chigozie Obioma (FP) Aug 9, 2016
And the indignity and helplessness of blacks in America won’t end until we have a first-world African nation to lift up our people.

Brexit Could End Up Strengthening the European Union
Chris Miller (YaleGlobal) Aug 9, 2016
The European Union closes ranks and wins new support as voters learn that Brexit carries high costs

Brexit – what happens to banking?
Patricia Jackson (VoxEU) Aug 9, 2016
The Brexit vote has created particular uncertainty for London, the EU’s largest financial centre. This column looks at the issues facing the UK’s banking sector in the wake of the referendum: the right to conduct cross-border activity in the EU in future, the impact on flexible recruitment in London, the possibility of diverging UK and EU regulation, and the effect on bank profitability more widely across Europe. The Brexit vote has created particular uncertainty for London, the EU’s largest financial centre. This column looks at the issues facing the UK’s banking sector in the wake of the referendum: the right to conduct cross-border activity in the EU in future, the impact on flexible recruitment in London, the possibility of diverging UK and EU regulation, and the effect on bank profitability more widely across Europe.

Resolution of financial market infrastructures
Thomas Huertas (VoxEU) Aug 9, 2016
Financial market infrastructures (FMIs) are the backbone of the financial system. Although steps have been taken to make it less likely, if an FMI were to fail it could have catastrophic consequences for financial markets and the economy at large. This column introduces four recommendations from the CEPS Resolution Taskforce for policymakers in case of such an event, based on coordination, timeliness, and remedying the impediments to FMI resolvability. Financial market infrastructures (FMIs) are the backbone of the financial system. Although steps have been taken to make it less likely, if an FMI were to fail it could have catastrophic consequences for financial markets and the economy at large. This column introduces four recommendations from the CEPS Resolution Taskforce for policymakers in case of such an event, based on coordination, timeliness, and remedying the impediments to FMI resolvability.

Negotiating Britain’s new trade policy
Jim Rollo and Alan Winters (VoxEU) Aug 9, 2016
For over four decades, the EU has managed most international trade policy on behalf of the UK. After Brexit, the UK government will have to reconstitute trade links with EU, with third nations while disentangling the UK from the commitments that the EU made on its behalf in the WTO. This chapter suggests some strategies for the UK government to follow in reconstituting its trade policy. The watch words should be simplicity and cooperation. Maintaining the goodwill of trading partners will be a very high diplomatic priority. For over four decades, the EU has managed most international trade policy on behalf of the UK. After Brexit, the UK government will have to reconstitute trade links with EU, with third nations while disentangling the UK from the commitments that the EU made on its behalf in the WTO. This chapter suggests some strategies for the UK government to follow in reconstituting its trade policy. The watch words should be simplicity and cooperation. Maintaining the goodwill of trading partners will be a very high diplomatic priority.

The case for reform at the World Bank
FT View Aug 10, 2016
Kim should not be the automatic choice for another presidential term.

Renminbi shock a distant memory for currency markets
Jennifer Hughes and Yuan Yang (FT) Aug 10, 2016
Old maxim ‘don’t fight the Fed’ joined by ‘don’t push the PBoC’.

Italy’s bank saga spreads its trouble wide
Sarah Gordon (FT) Aug 10, 2016
The country’s political and economic future is being threatened.

Greek Crisis, the Book. Or Actually Several of Them.
Landon Thomas Jr (NYT) Aug 10, 2016
As the anniversary of Greece's bailout deal approaches, memoirs and essays about that nation's economic crisis abound.

The productivity problem that pols ignore
Jennifer Rubin (WP) Aug 10, 2016
How to make us richer.

A Cheaper Currency Can’t Rescue the Chinese Economy
Enzio Von Pfeil (Asia Sentinel) Aug 10, 2016
An 8.6 percent devaluation over the past year hasn’t helped.

Getting From Here to Brexit
Bloomberg View Aug 10, 2016
The U.K. and EU need time to work out their long-term relationship. But there's action to take now.

Confucius Has Some Advice for Trading With China
Michael Schuman (Bloomberg View) Aug 10, 2016
China has taken advantage of the liberal economic order for too long.

The Great Productivity Puzzle
John Cassidy (New Yorker) Aug 10, 2016
The tight relationship between growth and wages has broken down in the U.S. Economists disagree on why, but none deny that it is an ongoing source of class conflict.

Internet or Splinternet?
Joseph S. Nye (Project Syndicate) Aug 10, 2016
The importance of the Internet – to individuals, societies, companies, and economies – cannot be overstated. But, as a recent report by the Global Commission on Internet Governance shows, it is at risk of costly fragmentation, as national governments establish control over the parts of it within their borders.

The Silent Death of Eurozone Governance
Daniel Gros (Project Syndicate) Aug 10, 2016
Sometimes the most important thing that happens is what doesn’t happen – or, to paraphrase Sherlock Holmes, it’s the dog that doesn’t bark in the night. The lack of response to the European Commission’s non-enforcement in Spain and Portugal of the terms of the Stability and Growth Pact is one of those times.

Demystifying Monetary Finance
Adair Turner (Project Syndicate) Aug 10, 2016
The debate about so-called helicopter money is burdened by deep fears and unnecessary confusions: some worry that monetary finance is bound to produce hyperinflation; others argue that, in terms of increasing demand and inflation, it would be no more effective than current policies. Both cannot be right.

The implications of Brexit for the City
Michael McMahon (VoxEU) Aug 10, 2016
The UK’s membership of the EU has been a key factor behind the City of London’s emergence as a leading global financial centre. This column looks at the implications of Brexit for the City. While it is unlikely that many banks or other financial institutions will simply up and leave in the coming months, their expansion and hiring decisions may lean toward the remaining EU member states for some of their operations. And unless the politicians conducting the Brexit negotiations do their utmost to limit the damage, the loss of passporting rights is likely to have a significant negative impact on the UK financial sector. The UK’s membership of the EU has been a key factor behind the City of London’s emergence as a leading global financial centre. This column looks at the implications of Brexit for the City. While it is unlikely that many banks or other financial institutions will simply up and leave in the coming months, their expansion and hiring decisions may lean toward the remaining EU member states for some of their operations. And unless the politicians conducting the Brexit negotiations do their utmost to limit the damage, the loss of passporting rights is likely to have a significant negative impact on the UK financial sector.

Investors stockpile cash to offset economic despair
Gillian Tett (FT) Aug 11, 2016
Asset managers fear that the policy landscape is about to get even weirder and more disorienting.

Tumbling food prices could drive ‘collapse’ in EM inflation
Steve Johnson (FT) Aug 11, 2016
Bumper grain harvests open the door to lower interest rates across the developing world.

Brexit Britain will miss cheap EU funds for infrastructure
Brian Unwin (FT) Aug 11, 2016
An extraordinary case of a nation depriving itself of investment finance.

Why ‘Risk-Based’ Capital Is Far Too Risky
Thomas M. Hoenig (WSJ) Aug 11, 2016
A risk-based system inflates the role of regulators and denigrates the role of bank managers.

The US-EU Privacy Shield Pact: A Work in Progress
Gary Clyde Hufbauer and Euijin Jung (PIIE) Aug 11, 2016
The modern global economy is fueled by consumers, companies, and governments communicating and exchanging information via the internet. But as people around the world engage in e-commerce, seek jobs, and share intimate details about their lives via social media, concerns arise over the vast stores of personal data possessed by multinational companies.

How Global Elites Forsake Their Countrymen
Peggy Noonan (WSJ) Aug 11, 2016
Those in power see people at the bottom as aliens whose bizarre emotions they must try to manage.

Brazil Is Still the Country of the Future
Tyler Cowen (Bloomberg View) Aug 11, 2016
For all its troubles and contradictions, it can't be written off.

Venezuela Has Good Reasons to Avoid Default
Francisco Rodriguez (Bloomberg View) Aug 11, 2016
The government faces big risks and costs if it stiffs bondholders.

Let's Be Optimistic About Productivity
Narayana Kocherlakota (Bloomberg View) Aug 11, 2016
It's far too low, but policies to create more demand could help.

Abenomics Won't Work. And That's OK.
Chen Zhao (Bloomberg View) Aug 11, 2016
Japan can look forward to years of wealthy stagnation.

Do-No-Harm Development
Michel Forst (Project Syndicate) Aug 11, 2016
Local communities affected by development projects too often face reprisals when they speak out against disruptions to their lives. With development aid surging globally, now is the time for major financiers like the World Bank to require a commitment from recipients to protect human rights.

The False Economic Promise of Global Governance
Dani Rodrik (Project Syndicate) Aug 11, 2016
The claim that the world needs stronger global governance is so widely accepted today that challenging it may seem like arguing that the sun revolves around the earth. But what may be true for genuinely global problems such as climate change or health pandemics is not true for most economic issues.

China’s Attempt to Export Its Way Out of Glut Threatens World Economy
Börje Ljunggren (YaleGlobal) Aug 11, 2016
China’s stimulus push during 2008 financial crisis protected jobs worldwide, but now threatens steel and aluminum industries

Immigration – the way forward
Jonathan Portes (VoxEU) Aug 11, 2016
Immigration was a major factor – perhaps the major factor – in the Brexit vote. This column asks what the result of the referendum means for the UK’s immigration policy. It looks likely that the UK’s negotiating position may coalesce around an ‘EEA minus’ arrangement. While free movement would not continue as now, this would not imply moving to a system that gives effectively equal treatment to EU and non-EU nationals; there would still be a considerable degree of preference for the former. The negotiations would likely be legally, economically, and politically complex, but this does not mean that it is not worth trying. Immigration was a major factor – perhaps the major factor – in the Brexit vote. This column asks what the result of the referendum means for the UK’s immigration policy. It looks likely that the UK’s negotiating position may coalesce around an ‘EEA minus’ arrangement. While free movement would not continue as now, this would not imply moving to a system that gives effectively equal treatm

Abdication dilemma pits modernisers against neo-nationalists
Ian Buruma (FT) Aug 12, 2016
Tokyo’s version of ‘get our country back’ is to undo the Americans’ postwar order.

Trillions in Murky Investments Could Rock China's Economy
Keith Bradsher (NYT) Aug 12, 2016
Long on promises and short on details, investments known as wealth management products have drawn a flood of money - and pose a big risk.

Europe Needs a Two-Tier Solution to Move Past Brexit
Mark Gilbert (Bloomberg View) Aug 12, 2016
Brexit is an opportunity to create a more integrated core with more flexibility for others.

Productivity Crisis? U.S. Workers Are Pulling Their Weight
Noah Smith (Bloomberg View) Aug 12, 2016
This is the usual situation when a country comes out of a financial crisis. The pendulum will swing back.

The Strong Ruble Doesn't Mean a Russian Recovery
Leonid Bershidsky (Bloomberg View) Aug 12, 2016
The currency's strength is artificial.

Airing the IMF’s Dirty Laundry
Barry Eichengreen (Project Syndicate) Aug 12, 2016
The IMF's Independent Evaluation Office, established after Asia's 1998 financial crisis to assess IMF policies and programs at arm's length, has issued a comprehensive critique of the Fund’s role in Europe’s post-2008 crisis. The takeaway: money talked loudest.

The Putin Question
Anders Åslund (Project Syndicate) Aug 12, 2016
As war fever returns in Ukraine, the question of why Russian President Vladimir Putin went from would-be modernizer to aggressive autocrat is being revived. Whatever the reason – fear for his safety, a sense of historical grievance, or both – Putin’s inability to reform Russia’s economy seems certain to be his downfall.

Here Come the Young
Kristin Lord (FP) Aug 12, 2016
In the coming years, the population of people under the age of 30 in some of the most fragile and unstable countries is going to skyrocket. And the world is not ready for them.

Effects of benchmarks on international capital flows
Claudio Raddatz, Sergio Schmukler and Tomás Williams (VoxEU) Aug 12, 2016
The categorisation of countries into relevant international benchmark indices affects the allocation of capital across borders. The reallocation of countries from one index to another affects not only capital flows into and out of that country, but also the countries it shares indices with. This column explains the channels through which international equity and bond market indices affect asset allocations, capital flows, and asset prices across countries. An understanding of these channels is important in preventing a widening share of capital flows being impacted by benchmark effects. The categorisation of countries into relevant international benchmark indices affects the allocation of capital across borders. The reallocation of countries from one index to another affects not only capital flows into and out of that country, but also the countries it shares indices with. This column explains the channels through which international equity and bond market indices affect asset allocations, capital flows, and asset prices across countries. An understanding of these channels is important in preventing a widening share of capital flows being impacted by benchmark effects.

Judicial efficiency and bank fragility
Fabio Schiantarelli, Massimiliano Stacchini and Philip E. Strahan (VoxEU) Aug 13, 2016
The recession has left a legacy of non-performing loans on Italian banks’ balance sheets. Policymakers in Italy understand well the importance of correcting their banks’ problems to foster a healthy economic recovery. This column argues that reforming the judicial and extra judicial processes for recovering collateral offers the potential of improving banks’ balance sheets and enhancing financial stability, not only by increasing loan collections directly, but also by improving borrowers’ incentive to service their existing debt. The recession has left a legacy of non-performing loans on Italian banks’ balance sheets. Policymakers in Italy understand well the importance of correcting their banks’ problems to foster a healthy economic recovery. This column argues that reforming the judicial and extra judicial processes for recovering collateral offers the potential of improving banks’ balance sheets and enhancing financial stability, not only by increasing loan collections directly, but also by improving borrowers’ incentive to service their existing debt.

Fiscal multipliers and fiscal positions: New evidence
Raju Huidrom, M Ayhan Kose and Franziska Ohnsorge (VoxEU) Aug 13, 2016
Fiscal multipliers tend to be larger when the fiscal position of governments is stronger. This column argues that the link between fiscal multipliers and fiscal positions is independent of the business cycle. Although multipliers are generally larger in recessions, they are smaller during times of high debt, even during recessions, relative to what they would be if government debt were lower. Fiscal multipliers tend to be larger when the fiscal position of governments is stronger. This column argues that the link between fiscal multipliers and fiscal positions is independent of the business cycle. Although multipliers are generally larger in recessions, they are smaller during times of high debt, even during recessions, relative to what they would be if government debt were lower.

Renzi should make a hard push for stimulus
FT View Aug 14, 2016
Brussels must be lenient so long as Italy presses ahead with reform.

What managers misunderstand about shareholder value
Alfred Rappaport (FT) Aug 14, 2016
The reasoning over short-term orientations is deeply flawed.

What Two Years of Negative Interest Rates in Europe Tell Us
NYT Aug 14, 2016
Pushing down the cost of borrowing doesn't address weak consumer demand or weak business investment.

One year after the Yuan shock, is worst over?
Zhou Xin (SCMP) Aug 14, 2016
Beijing surprised markets last August when it devalued the currency, but it seems to have learned slow and steady is best

Monetary policy, financial conditions, and financial stability
Tobias Adrian (VoxEU) Aug 14, 2016
Recent research into how monetary policy frameworks incorporate risks to financial stability has shown that policy affects both financial conditions and financial vulnerabilities that amplify negative shocks. This column argues that looser monetary policy improves financial conditions, but can in some situations worsen vulnerabilities through incentives for financial sector risk-taking and non-financial sector borrowing. Policymakers face an intertemporal trade-off between financial conditions and vulnerabilities which may impact a cost-benefit analysis of monetary policy. Recent research into how monetary policy frameworks incorporate risks to financial stability has shown that policy affects both financial conditions and financial vulnerabilities that amplify negative shocks. This column argues that looser monetary policy improves financial conditions, but can in some situations worsen vulnerabilities through incentives for financial sector risk-taking and non-financial sector borrowing. Policymakers face an intertemporal trade-off between financial conditions and vulnerabilities which may impact a cost-benefit analysis of monetary policy.

Why the fate of Greece’s chief statistician matters
FT View Aug 15, 2016
Facts should not be a matter of negotiation and convenience.

Russia leads the way in diversity of FDI
Glenn Barklie (FT) Aug 15, 2016
Middle Eastern commodity exporters struggle to branch out beyond oil.

Slavery
Stephan Haggard (PIIE) Aug 15, 2016
One of the more important developments on the human rights front over the last two decades is the rise of the corporate social responsibility movement, currently known under the unwieldy politically-correct rubric of “creating shared value (CSV)" and "inclusive business models.”

What the heck is happening in the developing world?
Catherine Wolfram (IGC) Aug 15, 2016
Recent demand for energy has been strongest among developing countries, but researchers will require better data to understand the real drivers of energy consumption patterns.

Fiscal Stimulus Revisited
Bloomberg View Aug 15, 2016
Monetary policy is suffering from diminishing returns. It's time for governments to act.

The U.S. Economy Needs to Kick Its Car Habit
Mark Whitehouse (Bloomberg View) Aug 15, 2016
The economy is living on borrowed time -- so long as it's living on so much borrowed money.

There's No Such Thing as an Economic Miracle
Tyler Cowen (Bloomberg View) Aug 15, 2016
Wealthy countries tend to get there through slow, steady growth. This may be China's future, too.

So Long to India's Monetary Rock Star
Mihir Sharma (Bloomberg View) Aug 15, 2016
Raghuram Rajan will leave office with his record largely vindicated.

Brexit and King Canute
Anatole Kaletsky (Project Syndicate) Aug 15, 2016
According to Anglo-Saxon legend, King Canute set his throne by the sea and commanded the tide to turn back, thereby showing his people the limits of royal power. Like Canute, British Prime Minister Theresa May and EU leaders need to acknowledge reality – before it's too late.

Brexit stress test
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Aug 15, 2016
The UK’s Brexit referendum is providing us with the first significant test of the new regulatory system. This column asks whether banks have sufficient capital and liquidity to withstand the ‘shock’. Unless the global financial system as a whole is well capitalised, it remains only as strong as its weakest link. And while the UK authorities have done a reasonable job of strengthening their banks and financial system, a number of large European banks are seriously undercapitalised. The UK’s Brexit referendum is providing us with the first significant test of the new regulatory system. This column asks whether banks have sufficient capital and liquidity to withstand the ‘shock’. Unless the global financial system as a whole is well capitalised, it remains only as strong as its weakest link. And while the UK authorities have done a reasonable job of strengthening their banks and financial system, a number of large European banks are seriously undercapitalised.

New World (Dis)Order
Arthur Goldhammer (TAP) Aug 15, 2016
In 1991 George H.W. Bush promised a “New World Order.” A quarter of a century later, we’re finally catching a glimpse of it—like it or not.

Monetary Policy in a Low R-star World
John C. Williams (FRBSF Econ Letter) Aug 15, 2016
Central banks and governments around the world must be able to adapt policy to changing economic circumstances. The time has come to critically reassess prevailing policy frameworks and consider adjustments to handle new challenges, specifically those related to a low natural real rate of interest. While price level or nominal GDP targeting by monetary authorities are options, fiscal and other policies must also take on some of the burden to help sustain economic growth and stability.

Easy money is a dangerous cure for a debt hangover
Amar Bhidé (FT) Aug 16, 2016
Central banks should be held responsible for prudent lending not stable prices.

The challenge to ensure that Brexit works for business
Matthew Elliott (FT) Aug 16, 2016
Most Outers champion free trade that will allow the UK to flourish.

EM forex reserves resume rise after 18-month slide
Steven Johnson (FT) Aug 16, 2016
Record highs hit in India, the Philippines, Taiwan and Korea amid strong capital inflows.

The forces driving the rally for emerging markets
Joel Lewin (FT) Aug 16, 2016
Weak US dollar, rising oil prices and global hunt for yield spur investor inflows into the sector

Workers, don’t fear the robot revolution
Steven Pearlstein (WP) Aug 16, 2016
Enough work will trickle down for everyone to earn a living and have productive lives.

How to avert America’s Brexit
Glenn Hutchins (WP) Aug 16, 2016
If business leaders want to pursue growth and openness, they must embrace fairness.

Read Hillary’s Lips: No Pacific Trade Deal
William A. Galston (WSJ) Aug 20, 2016
Clinton has drawn a line in the sand, yet rebuilding support for trade may fall to her.

Will Europe’s Reform Momentum Continue?
Simeon Djankov (PIIE) Aug 16, 2016
Making positive economic change is a bit like dropping a bad habit—it may take some kind of crisis to jolt the body politic into action. Reforms that tilt the incentives in the economic system towards higher productivity, with the possible exception of labor market reform, generally take place when times are bad.

When Protectionism Dominated American Politics
Marc-William Palen (Globalist) Aug 16, 2016
How the 1888 elections decided the protectionist course of U.S. economic expansion for decades to come.

Who Would Win a Currency War? No One
Satyajit Das (Bloomberg View) Aug 16, 2016
The benefits of a cheaper currency don't extend as far as they once did.

Why isn't infrastructure investment booming?
Brian Caplen (Banker) Aug 16, 2016
One the face of it, it's an easy win: governments spend money on infrastructure projects and the spluttering economies of the developed and developing world would be transformed. However, the solution is more to do with political commitment than available funding.

Why GDP?
Philipp Lepenies (Project Syndicate) Aug 16, 2016
Gross domestic product is the most powerful metric in history – "one of the great inventions of the twentieth century," according to the US Commerce Department. But the utility and persistence of GDP reflect political realities, not economic considerations.

The Hidden Danger of Big Data
Carlo Ratti and Dirk Helbing (Project Syndicate) Aug 16, 2016
With big data, we can multiply our options and filter out things we don’t want to see. But there is much to be said for making discoveries through pure serendipity: contingency and randomness often furnish the transformational or counterintuitive ideas that propel humanity forward.

The Toilet Revolution
Bjørn Lomborg (Project Syndicate) Aug 16, 2016
Indian Prime Minister Narendra Modi and the Gates Foundation have both made access to toilets a central development concern. Rightly so: poor sanitation is a major development issue, and 2.5 billion people do not have access to basic, safe sanitation, with women and children suffering the most.

World's Mind Made Up on US Presidential Race
Bruce Stokes (YaleGlobal) Aug 16, 2016
Pew Research Center survey in 15 nations: Obama is tough act to follow, Clinton is more trusted than Trump.

Brexit and wage inequality
Brian Bell and Stephen Machin (VoxEU) Aug 16, 2016
Wage inequality was partly behind the vote for Brexit. This column shows how areas with relatively low median wages were substantially more likely to vote ‘Leave’, and discusses the likely implications of Brexit for wage inequality in the future. Increased likelihood of a recession, a negative shock to trade, reduced migration flows, and the possible loss of passporting rights for the City will all alter the structure of wages in ways that will need to carefully monitored and studied in due course. Wage inequality was partly behind the vote for Brexit. This column shows how areas with relatively low median wages were substantially more likely to vote ‘Leave’, and discusses the likely implications of Brexit for wage inequality in the future. Increased likelihood of a recession, a negative shock to trade, reduced migration flows, and the possible loss of passporting rights for the City will all alter the structure of wages in ways that will need to carefully monitored and studied in due course.

Nation building through foreign intervention
Melissa Dell and Pablo Querubin (VoxEU) Aug 16, 2016
The nature of US military interventions has become relevant in the face of new growing threats, particularly from so-called Islamic State. While top-down strategies that rely on overwhelming firepower are sometimes favoured by politicians, longer-term strategies use a bottom-up approach, gaining citizens’ support through civic engagement. This column introduces evidence from US actions during the Vietnam War to show that bottom-up approaches are more successful in countering insurgencies than violent, top-down interventions. The nature of US military interventions has become relevant in the face of new growing threats, particularly from so-called Islamic State. While top-down strategies that rely on overwhelming firepower are sometimes favoured by politicians, longer-term strategies use a bottom-up approach, gaining citizens’ support through civic engagement. This column introduces evidence from US actions during the Vietnam War to show that bottom-up approaches are more successful in countering insurgencies than violent, top-down interventions.

The value of local lessons in tackling global killer diseases
Michael Bloomberg (FT) Aug 18, 2016
Low-cost steps and policies could help save lives.

Brexit – Britain is paying the price for a badly designed choice
Richard Thaler (FT) Aug 17, 2016
The more complicated a decision, the less desirable a referendum.

Central bankers are threatening the engine of the economy
Bill Gross (FT) Aug 17, 2016
Job cuts, reduced pensions, defaults — all can create a cycle of decay.

Abenomics breeds a new generation of Japanese gold bugs
Leo Lewis (FT) Aug 17, 2016
Notebook: The precious metal has emerged as a kind of shiny financial aspirin.

A split euro is the solution for the single currency
Joseph Stiglitz (FT) Aug 17, 2016
Rule changes needed to make the currency work are in an economic sense small.

A Battle Over Money in Beijing
WSJ Aug 17, 2016
Economic policy is a flashpoint in China’s political succession fight.

Requirements Make Risk-Based Capital Safe
Michael Mendelson and Aaron Brown (WSJ) Aug 17, 2016
Risk adjusted measures won’t prevent crises, but with limits they’re rarer and smaller.

Our robot panic is overblown
Robert J. Samuelson (WP) Aug 17, 2016
Sure, some jobs will vanish. But others will materialize in their place.

How Mark Twain Became a Free Trader
Marc-William Palen (Globalist) Aug 17, 2016
The 1888 Great Debate over US trade policy inspired literary luminaries like Walt Whitman and Mark Twain to take sides.

Building Africa’s Knowledge Economy
Simplice A. Asongu (Project Syndicate) Aug 17, 2016
Development economists often differ, but they agree on this: the knowledge economy will be the foundation of countries’ progress in the twenty-first century. So far, Africa has not made much progress in building such an economy; but it is not too late.

China’s Higher-Education Glut
Edoardo Campanella (Project Syndicate) Aug 17, 2016
In its push for universal higher education and greater status on the world stage, China is stringing its young people along with the promise of high-paid, meaningful employment after college. It is a promise that China's economy will not be able to fulfill for a very long time.

Brecht on Brexit
Howard Davies (Project Syndicate) Aug 17, 2016
In the wake of the 1953 workers’ uprising in East Germany, the playwright Bertolt Brecht dryly suggested that the government might find it easier to “dissolve the people and elect another.” It is a sentiment that resonates with many in the UK today, in the aftermath of June’s Brexit referendum.

Misreading the Nordic Model
Nima Sanandaji (FA) Aug 17, 2016
How American admirers get Scandinavia wrong.

Oil's two-pronged price revolution changes everything
Roberto F. Aguilera and Marian Radetzki (VoxEU) Aug 17, 2016
After decades of oil price rises, new extraction techniques for shale and conventional deposits mean that recent dramatic price falls will be here to stay. This column argues that, even with oil at $50 a barrel, global producers will invest to catch up with US-led technological innovation and so add 40 million barrels a day to production by 2035. This will revolutionise domestic energy policymaking, environmental commitments and global geopolitics. After decades of oil price rises, new extraction techniques for shale and conventional deposits mean that recent dramatic price falls will be here to stay. This column argues that, even with oil at $50 a barrel, global producers will invest to catch up with US-led technological innovation and so add 40 million barrels a day to production by 2035. This will revolutionise domestic energy policymaking, environmental commitments and global geopolitics.

Venezuela’s problems can no longer be ignored
FT View Aug 18, 2016
Its multiple crises are increasingly becoming international issues.

The tri-party repo sector needs careful attention
Gillian Tett (FT) Aug 18, 2016
The hidden pipes of finance may be furring up as the banks reshape their business models.

The Political Economy of Trade: I
Stephan Haggard (PIIE) Aug 18, 2016
The positions of the two presidential candidates on trade and investment, based on major economic policy speeches.

Can We Measure Poverty from Outer Space?
Justin Sandefur (CGD) Aug 18, 2016
Satellite data suggests poverty is falling faster than we thought, but it’s probably not reliable enough to trust for targeting social programs – at least not yet.

“An Utter Failure”: Joseph Stiglitz on the Euro and Europe’s Uncertain Future
Jeet Heer (TNR) Aug 18, 2016
A discussion on Brexit, globalization, and the perils of austerity.

What Role for Global Governance?
Kemal Dervis (Project Syndicate) Aug 18, 2016
Efforts to strengthen global governance have been criticized for promising more than they can deliver and diminishing the importance of national policies. But in an interdependent world, only improved global cooperation can address our biggest challenges, like climate change, taxation, and much else.

China’s Corporate-Debt Challenge
David Lipton (Project Syndicate) Aug 18, 2016
Next month, when China hosts the G20 meeting in Hangzhou, its voice will be one of the loudest calling for structural reforms to stimulate growth in advanced and emerging-market economies. But China faces its own hazards: above all, domestic credit is expanding at an unsustainable pace, with corporate debt reaching dangerous levels.

Taming the Populists
Javier Solana (Project Syndicate) Aug 18, 2016
In many Western democracies, right-wing populists, energized by self-proclaimed victories over “establishment elites,” are doubling down on the claim that globalization lies at the root of many citizens’ problems. If political leaders are to keep the populists at bay, they must address those problems head on.

Among All Uncertainties After Brexit Vote, Low Growth Is Sure
David Dapice (YaleGlobal) Aug 18, 2016
Britain moves slowly on EU exit – every new freedom negotiated will decrease access to the common market

The oil market in the aftermath of the price slump
Rabah Arezki (VoxEU) Aug 18, 2016
The dramatic and largely unexpected collapse in oil prices has sparked intense debate over the causes and consequences. This column argues that a broader energy perspective is now needed to comprehend oil’s long-term outlook, and provides answers to several questions about the oil market in the global economy. The dramatic and largely unexpected collapse in oil prices has sparked intense debate over the causes and consequences. This column argues that a broader energy perspective is now needed to comprehend oil’s long-term outlook, and provides answers to several questions about the oil market in the global economy.

Morning Agenda: Italy’s Banks Pile On the Debt
Amie Tsang (NYT) Aug 19, 2016
Italian lenders have continued to lend to inert companies, racking up bad loans of over $400 billion.

Villains and heroes of Europe’s economy
Bethany McLean (WP) Aug 19, 2016
Joseph Stiglitz explores how the euro currency has done in the European economies.

The Long Road to Brexit
Wm. Roger Louis (WSJ) Aug 19, 2016
Churchill saw the U.K. as being ‘with’ Europe but not ‘of’ it. He valued the U.S. alliance above all.

How weak productivity can neuter monetary policy
Stephen King (FT) Aug 19, 2016
What was seen as a cyclical problem has morphed into a supply-side constraint.

The Political Economy of Trade: II
Stephan Haggard (PIIE) Aug 19, 2016
Does trade matter for the vote?

China Private Investment Softens, But Not as Much as Official Data Suggest
Nicholas R. Lardy and Zixuan Huang (PIIE) Aug 19, 2016
Official investment data from China’s National Bureau of Statistics (NBS) show a surge in state investment 1 and a collapse in private investment in the first half of 2016 (figure 1). But the figure exaggerates the slowdown in private investment in 2016.

Brexit and the Housing Crisis
John Perry (LRB) Aug 19, 2016
Brexit already appears to have hit house prices, which – outside London and the south-east – have not yet recovered from the post-2007 slump.

An OPEC for Migrant Labor?
Sami Mahroum (Project Syndicate) Aug 19, 2016
OPEC succeeded in protecting its members’ shared interests that they could not protect individually, and it shows that when a market has structural distortions, political tools and collective action can be more effective than public policy. The migrant-labor market is not so different from the oil market.

Counting Africa’s Invisible Workers
Carl Manlan (Project Syndicate) Aug 19, 2016
Africa boasts a large and creative labor pool, buttressed by a youth population that is expected to double, to over 830 million, by 2050. But African governments confront a serious problem: they do not know how many people they are dealing with, where they live, or how they earn a living.

China’s Painful Structural Transformation
Zhang Jun (Project Syndicate) Aug 19, 2016
China's economy has slowed as it shifts from exports and investment toward domestic consumer demand. But rapid growth could return if urbanization accelerates and the authorities implement the structural reforms needed to enable emerging service sectors to thrive.

The Governance Games
Project Syndicate Aug 19, 2016
There was a time when the Olympic Movement was viewed as an almost perfect reflection of a shining ideal: a global commons and a global common good. But the International Olympic Committee’s stunning fall from grace is hardly unique: governments of all types are held in low esteem nowadays.

A primer on helicopter money
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Aug 19, 2016
Helicopter money is not just another version of unconventional monetary policy. Using simple central bank and government balance sheets, this column explains how helicopter money today is different from what Milton Friedman imagined back in 1969 – it is expansionary fiscal policy financed by central bank money. Helicopter money is not just another version of unconventional monetary policy. Using simple central bank and government balance sheets, this column explains how helicopter money today is different from what Milton Friedman imagined back in 1969 – it is expansionary fiscal policy financed by central bank money.

Growing importance of financial spillovers from emerging markets
Gaston Gelos and Jay Surti (VoxEU) Aug 19, 2016
International financial spillovers from emerging markets have increased significantly over the last 20 years. This column argues that growing financial integration of emerging economies is more important than their rising share in global trade in driving this trend, that firms with lower liquidity and higher borrowing are more subject to spillovers, and that mutual funds are amplifying spillover effects. Policymakers in developed economies should pay increased attention to future spillovers from emerging markets, particularly from China. International financial spillovers from emerging markets have increased significantly over the last 20 years. This column argues that growing financial integration of emerging economies is more important than their rising share in global trade in driving this trend, that firms with lower liquidity and higher borrowing are more subject to spillovers, and that mutual funds are amplifying spillover effects. Policymakers in developed economies should pay increased attention to future spillovers from emerging markets, particularly from China.

Brexit: Separating the Good From the Bad From the Ugly
Thomas Mayer (Globalist) Aug 20, 2016
It is high time for Europe to engage in nuanced analysis of the Brexit vote. Part of the protest was right on target. The EU should learn from it.

Eurozone stability still under threat of a ‘bad shock’
Stefano Micossi (VoxEU) Aug 20, 2016
Some economists are approaching a consensus that the Eurozone’s financial architecture is now resilient enough to withstand another shock similar to that of 2010-11. This column argues that such a view may be overly optimistic. Economic and financial instability persists in member states and the banking sector, and institutions to tackle a shock remain incomplete. While the Eurozone remains vulnerable to a bad shock, the blanket application of burden sharing without consideration of current economic and financial conditions is unwise. Some economists are approaching a consensus that the Eurozone’s financial architecture is now resilient enough to withstand another shock similar to that of 2010-11. This column argues that such a view may be overly optimistic. Economic and financial instability persists in member states and the banking sector, and institutions to tackle a shock remain incomplete. While the Eurozone remains vulnerable to a bad shock, the blanket application of burden sharing without consideration of current economic and financial conditions is unwise.

US manufacturing’s ills have been misdiagnosed
FT View Aug 21, 2016
Robots, not China, should be the focus of job creation policies.

India’s choice of central bank governor signals continuity
Swaminathan Aiyar (FT) Aug 21, 2016
Like his predecessor, he is a respected academic with a mind of his own.

Monetary policy lacks the muscle to boost growth
Michael Heise (FT) Aug 21, 2016
The answer must be to strengthen our economies’ potential to create jobs.

Are aging and the economic slowdown linked?
Robert J. Samuelson (WP) Aug 21, 2016
An older nation shaves 1.2 percentage points off our annual growth rate.

The Renaissance Mindset and the Future of Globalization
Ian Goldin and Chris Kutarna (Globalist) Aug 21, 2016
What happens if there is no fair distribution of gains and losses? A Renaissance lens could have brought this risk into focus much sooner.

India's Not-So-New Central Banker
Mihir Sharma (Bloomberg View) Aug 21, 2016
The incoming RBI chief shares his predecessor's instincts.

Why No One Trusts China's Markets
Christopher Balding (Bloomberg View) Aug 21, 2016
A crackdown on fraud is underway. But it may not be enough.

The Brexit Question That Nobody Asked
Clive Crook (Bloomberg View) Aug 21, 2016
With or without Britain, where was the EU headed? Nowhere good, says Mervyn King, former governor of the Bank of England.

Choose Your Own Adventure: The Future of the World
Stephen M. Walt (FP) Aug 21, 2016
It’s not just the U.S. presidential platforms that will shape global politics in the years ahead -- it’s Americans’ theories of how the world works.

Remarks on the U.S. Economy
Stanley Fischer (FRB) Aug 21, 2016
It is a remarkable, and perhaps underappreciated, achievement that the economy has returned to near-full employment in a relatively short time after the Great Recession, given the historical experience following a financial crisis. But there was also a major decline in the rate of productivity growth.

Equity is cheap for large financial institutions: International evidence
Priyank Gandhi, Hanno Lustig and Alberto Plazzi (VoxEU) Aug 21, 2016
Governments and regulators are commonly assumed to offer special protection to the stakeholders of large financial institutions during financial crises. This column measures the ex ante cost of implicit shareholder guarantees to financial institutions in crises, and suggests that such protection affects small and large financial institutions differently. The evidence suggests that in the event of a financial crisis, stock investors price in the implicit government guarantees extended to large financial institutions, but not to small ones. Governments and regulators are commonly assumed to offer special protection to the stakeholders of large financial institutions during financial crises. This column measures the ex ante cost of implicit shareholder guarantees to financial institutions in crises, and suggests that such protection affects small and large financial institutions differently. The evidence suggests that in the event of a financial crisis, stock investors price in the implicit government guarantees extended to large financial institutions, but not to small ones.

Pensions: Low yields, high stress
John Authers and Robin Wigglesworth (FT) Aug 22, 2016
An examination of a creeping social and political crisis.

Why the TPP Deal Won't Improve Our Security
Clyde Prestowitz (NYT) Aug 22, 2016
America needs to improve its standing against China. But trade agreements won't do the job.

The Robots Are Coming. Welcome Them
Andy Kessler (WSJ) Aug 22, 2016
Don’t believe the fears that machines will put humans out of work. Technology creates more jobs than it destroys.

Dude, Where’s My Cat Bond?
Theodore Talbot and Owen Barder (CGD) Aug 22, 2016
“Cat” bonds are effectively a cheaper source of large-scale insurance coverage against clearly measured risks like earthquakes, storms, or even disease outbreaks. Generally, though, coverage hasn’t trickled down to the poorer and most at-risk countries—precisely those which are most vulnerable when aid fails to arrive or arrives piecemeal. Scaling up this market for lower-income countries would provide better shielding against many risks that undermine development overseas.

A Cure for Brexit Paralysis
Bloomberg View Aug 22, 2016
Talks between Britain and the EU should start quickly, then take as long as they need.

India's Central Bank Must Stay Independent
Bloomberg View Aug 22, 2016
Urjit Patel has a hard act to follow.

The Politics of Negative Interest Rates
Yanis Varoufakis (Project Syndicate) Aug 22, 2016
Simone Weil once said, “If you want to know what a man is really like, take notice of how he acts when he loses money.” Likewise, if we want to know what our societies are really like, we must take notice of how they react to negative interest rates.

Reform or Divorce in Europe
Joseph E. Stiglitz (Project Syndicate) Aug 22, 2016
To say that the eurozone has not been performing well since the 2008 crisis would be an understatement. Unless its authorities make seven changes, its members will inevitably conclude that they are trapped in an untenable marriage.

The Party Is Over in Rio
Riordan Roett (FP) Aug 22, 2016
And now there’s no more avoiding the grim reality of Brazil’s economic and political crises.

Growing doubts about negative interest rate policy
Stefan Schneider (DB Research) Aug 22, 2016
The debate about whether a negative interest rate policy (NIRP) helps or hinders the transmission mechanism of monetary policy continues to rage. The BIS and many others – including us – long ago issued warnings about throwing open the monetary floodgates and the side effects of negative central-bank interest rates, and now Mark Carney, the governor of the Bank of England, has also clearly rejected negative interest rates, despite using all the means at his disposal to prevent the UK economy from sliding into recession after the Brexit shock. The package of measures he launched in August significantly exceeded market expectations, but Carney has ruled out negative interest rates, referring to the adverse impact on the capital markets.

Human development, inequality and long working hours
Thorvaldur Gylfason (VoxEU) Aug 22, 2016
One-dimensional indicators such as GNI per capita are known to be flawed measures of wellbeing. The Human Development Index (HDI) introduced dimensions of health and education alongside income. This column argues that an HDI adjusted for inequality and hours worked gives deeper insight into a country's economic standing. Using this composite measure, the US falls from first to seventh among G8 countries. One-dimensional indicators such as GNI per capita are known to be flawed measures of wellbeing. The Human Development Index (HDI) introduced dimensions of health and education alongside income. This column argues that an HDI adjusted for inequality and hours worked gives deeper insight into a country's economic standing. Using this composite measure, the US falls from first to seventh among G8 countries.

Unity in diversity: The way forward for Europe
Lars Feld, Christoph Schmidt, Isabel Schnabel and Volker Wieland (VoxEU) Aug 22, 2016
It has been suggested that the vote for Brexit marks the first step of disintegration in Europe. This column argues that if the European integration process is pursued wisely, it still carries the promise of enduring peace and growing prosperity. But EU policymakers must devise a process of integration that strengthens Europe’s competitiveness to such an extent that the advantages of EU membership are clear to member states’ citizens. It has been suggested that the vote for Brexit marks the first step of disintegration in Europe. This column argues that if the European integration process is pursued wisely, it still carries the promise of enduring peace and growing prosperity. But EU policymakers must devise a process of integration that strengthens Europe’s competitiveness to such an extent that the advantages of EU membership are clear to member states’ citizens.

Eurozone looks beyond the Brexit vote
FT View Aug 23, 2016
Growth is solid but longer-term performance needs improvement.

Oil industry dynamics spur crude optimism
Dan Bogler (FT) Aug 23, 2016
Energy prices could be heading to a higher and more sustainable trading range.

The dirty little secret of central banking
Sebastian Mallaby (WP) Aug 23, 2016
The Federal Reserve’s inflation target is shockingly arbitrary.

Brexit Delay Risks Triggering a Shotgun Divorce
Mark Gilbert (Bloomberg View) Aug 23, 2016
Britain is right to take its time exiting the EU. But waiting too long will lead to trouble.

Is Merkel Rushing to Push Britain Out of Europe?
Denis MacShane (Globalist) Aug 23, 2016
What European leaders must do to give UK a chance for reason to prevail post-Brexit.

The Illusion of Lagging Productivity
Noah Smith (Bloomberg View) Aug 23, 2016
Be skeptical of claims that technology is stagnating and hampering growth.

Vaccines for an Aging Population
Melvin Sanicas (Project Syndicate) Aug 23, 2016
Population aging has stoked fear that the burden on government budgets, health-care systems, and economies will become untenable. But there's something we can do to lighten the load: improve the health of the elderly through vaccination.

Reducing Inequality and Poverty in America
Martin Feldstein (Project Syndicate) Aug 23, 2016
The current election season in the US has reflected widespread concern about inequality. Reducing poverty, rather than penalizing earned success, is the right focus for dealing with it, and that means devising ways to boost participation in government programs to help the poor, while avoiding adverse effects on work incentives.

The Education Roadmap to 2030
Helle Thorning-Schmidt (Project Syndicate) Aug 23, 2016
The fourth UN Sustainable Development Goal for 2030 calls for all children worldwide to have access to quality education. This won't happen without serious efforts to increase funding, ensure that funds are better spent, and curb illicit capital flows that deprive governments of the money needed to ensure universal access.

Claiming Dominance, China Sheds Pretense of Peaceful Rise
Frank Ching (YaleGlobal) Aug 23, 2016
Most of Asia stays mum as a confident China gets its own way while avoiding conflict

"Go home!": Being Foreign in Post-Brexit Britain
Andrea Mammone (Boston Review) Aug 23, 2016
For many EU citizens living in England, the Brexit vote means the end of home as they know it—and if they choose to leave, the financial consequences for Britain will be dire.

Financial market development is economic development
olger Görg, Christiane Krieger-Boden and Peter Nunnenkamp (VoxEU) Aug 23, 2016
In theory, firms in developing countries benefit from viable, well-used, stable, and efficient local financial markets as a source of investment for local firms. Financial markets in the home countries of multinationals can also act as a source of FDI to the developing world when local financial markets are weak. This column discusses recent empirical data that support both arguments, and argues that advocates of tighter regulation for financial markets should consider the wider impact on developing country economies. In theory, firms in developing countries benefit from viable, well-used, stable, and efficient local financial markets as a source of investment for local firms. Financial markets in the home countries of multinationals can also act as a source of FDI to the developing world when local financial markets are weak. This column discusses recent empirical data that support both arguments, and argues that advocates of tighter regulation for financial markets should consider the wider impact on developing country economies.

Lessons on inequality, labour markets, and conflict from the Gilded Age
Suresh Naidu and Noam Yuchtman (VoxEU) Aug 23, 2016
Today’s labour market in the US has much in common with that of the late 19th and early 20th centuries. Then, as now, there were few government protections for workers, fears over cheap immigrant labour, rapid technological change, and increasing market concentration. This column explores the lessons that can be drawn from the earlier ‘Gilded Age’. The findings suggests that even as markets play a greater role in allocating labour, legal and political institutions will continue to shape bargaining power between firms and workers. Today’s labour market in the US has much in common with that of the late 19th and early 20th centuries. Then, as now, there were few government protections for workers, fears over cheap immigrant labour, rapid technological change, and increasing market concentration. This column explores the lessons that can be drawn from the earlier ‘Gilded Age’. The findings suggests that even as markets play a greater role in allocating labour, legal and political institutions will continue to shape bargaining power between firms and workers.

How domestic trade frictions shape welfare gains
Wolfgang Keller, Javier Andres Santiago and Carol Shiue (VoxEU) Aug 23, 2016
In international trade theory, countries are often treated as homogenous regions, with no account taken of their internal geography. This column uses evidence from China’s Treaty Port Era to show how domestic trade frictions shape welfare gains from trade. Gains from new technologies that lower trade costs are shared, but the gains are not evenly distributed. Lower trade costs can also mean lower welfare for productivity leaders, who may be replaced by low-cost suppliers from less productive regions as the costs of transport decline. In international trade theory, countries are often treated as homogenous regions, with no account taken of their internal geography. This column uses evidence from China’s Treaty Port Era to show how domestic trade frictions shape welfare gains from trade. Gains from new technologies that lower trade costs are shared, but the gains are not evenly distributed. Lower trade costs can also mean lower welfare for productivity leaders, who may be replaced by low-cost suppliers from less productive regions as the costs of transport decline.

Scottish independence and the Brexit paradox
FT View Aug 24, 2016
The EU referendum decision has made it costlier to leave the UK.

Chinese tech FDI: the great awakening
Michal Kaczmarski (FT) Aug 24, 2016
Tech giants tend to concentrate on their home market but this is starting to change.

The sharp costs of Brexit will be felt soon enough
Rupert Pennant-Rea (FT) Aug 24, 2016
Britons will get poorer through prices rising more than wages.

Pessimists hold the key to Europe’s future
Ivan Krastev (FT) Aug 24, 2016
Most in the Visegrad states are positive about the EU but worry about its survival.

Money dries up for EM-focused private capital funds
Steve Johnson (FT) Aug 24, 2016
Sector on track to raise the least money since 2009, even as emerging markets enjoy bounce.

Nations Can Be Startups, Too
Tyler Cowen (Bloomberg View) Aug 24, 2016
Singapore and the United Arab Emirates had features of entrepreneurial companies. Now, Africa looks promising.

The Easy Money Contagion
Carmen Reinhart (Project Syndicate) Aug 24, 2016
Monetary expansion is all the rage in the major economies, with central bank after central bank employing tools like quantitative easing and ultra-low – or even negative – interest rates to boost their economies’ competitiveness. Where does it end?

The Scarecrow of National Debt
Robert Skidelsky (Project Syndicate) Aug 24, 2016
Many people think that, however burdensome heavy taxes are, it is more honest for governments to raise them to pay for their spending than it is to incur debt. But public debt in the US and the UK is far below the level at which it would crowd out private spending today or depress future generations' consumption.

Why Low Interest Rates Cripple Capital Investment
Enzio von Pfeil (Asia Sentinel) Aug 24, 2016
The world's central bankers are getting it wrong.

The Fed and Lehman Brothers
Laurence Ball (VoxEU) Aug 24, 2016
Much of the damage from the Great Recession is attributed to the Federal Reserve’s failure to rescue Lehman Brothers when it hit troubled waters in September 2008. It has been argued that the Fed’s decision was based on legal constraints. This column questions that view, arguing that the Fed did have the legal authority to save Lehman, but it did not do so due to political considerations. Much of the damage from the Great Recession is attributed to the Federal Reserve’s failure to rescue Lehman Brothers when it hit troubled waters in September 2008. It has been argued that the Fed’s decision was based on legal constraints. This column questions that view, arguing that the Fed did have the legal authority to save Lehman, but it did not do so due to political considerations.

As China nears exhaustion investors must look elsewhere
James Kynge (FT) Aug 25, 2016
Emerging markets are flattered by the view that they are the least bad option.

Central bankers ponder moving the goalposts
FT View Aug 25, 2016
The aggressive use of monetary tools is as important as the target.

Corporate tax reform is vital to boosting America’s growth
Robert Gordon (FT) Aug 25, 2016
The next president must unleash capital formation.

Germany’s budget discipline comes at a high cost
Martin Sandbu (FT) Aug 25, 2016
Schäuble would do better to spend more money at home.

China's Biggest Economic Challenge
Bloomberg View Aug 25, 2016
The nation can have maximum growth now or later -- but not both.

Real World Shows Economics Has a Deflation Problem
Mark Gilbert (Bloomberg View) Aug 25, 2016
The textbooks insist that people cut spending when prices drop. Does that make any sense?

Theresa May and the Three Brexiteers
Robert Harvey (Project Syndicate) Aug 25, 2016
If politics is, among other things, the art of managing the unexpected, British Prime Minister Theresa May will have her hands full managing the UK's withdrawal from the European Union. And the uncertainty starts in her own cabinet.

Financial union: Resilience in the Eurozone
Marco Buti, José Leandro and Plamen Nikolov (VoxEU) Aug 25, 2016
The fragmentation of financial systems along national borders was one of the main handicaps of the Eurozone both prior to and in the initial phase of the crisis, hindering the shock absorption capacity of individual member states. The EU has taken important steps towards the deeper integration of Eurozone financial markets, but this remains incomplete. This column argues that a fully-fledged financial union can be an efficient economic shock absorber. Compared to the US, there is significant potential in terms of private cross-border risk sharing through the financial channel, more so than through fiscal (i.e. public) means. The fragmentation of financial systems along national borders was one of the main handicaps of the Eurozone both prior to and in the initial phase of the crisis, hindering the shock absorption capacity of individual member states. The EU has taken important steps towards the deeper integration of Eurozone financial markets, but this remains incomplete. This column argues that a fully-fledged financial union can be an efficient economic shock absorber. Compared to the US, there is significant potential in terms of private cross-border risk sharing through the financial channel, more so than through fiscal (i.e. public) means.

Today's Inequality Could Easily Become Tomorrow's Catastrophe
Robert J. Shiller (NYT) Aug 26, 2016
The poor and middle class might end up living in a nightmare world of joblessness and danger unless we act to address the growing wealth gap.

A practical solution to keep the Trans-Pacific Partnership alive
Jennifer Rubin (WP) Aug 26, 2016
Getting off on the right foot in 2017.

The Making of China’s Consumer Society
Andrew Sheng and Xiao Geng (Project Syndicate) Aug 26, 2016
China’s transformation from a manufacturing-driven and export-led economy to one underpinned by services and domestic consumption is firmly underway. And that's good news, not just for China, but also for the future of the global economy.

Cities for Migrants
Peter Sutherland (Project Syndicate) Aug 26, 2016
National and international debates about migration are deeply flawed, owing to their focus on security – and so are the policies that result from them. If municipal authorities were empowered to play a more active role in crafting immigration policies, the emphasis would shift toward addressing the nuts and bolts of integration.

The productivity slump—fact or fiction: The measurement debate
Kemal Dervis and Zia Qureshi (Brookings) Aug 26, 2016
Growth in productivity has slowed considerably over the past decade in major economies. A discussion of the recent debates and related research on the factors contributing to this slowdown.

Investor beliefs and stock market outcomes in emerging economies
Ina Simonovska and Joel David (VoxEU) Aug 26, 2016
The ‘excess co-movement puzzle’ in financial markets refers to the correlation of asset returns beyond what could be expected based on the common movements in fundamentals. Using international data, this column links excess co-movement in firm-level stock returns to the correlated beliefs of sophisticated investors. Co-movement is largely explained by investors’ reliance on common information – in other words, their lack of firm-specific information. This gives rise, in part, to the higher degree of aggregate market-wide volatility. The ‘excess co-movement puzzle’ in financial markets refers to the correlation of asset returns beyond what could be expected based on the common movements in fundamentals. Using international data, this column links excess co-movement in firm-level stock returns to the correlated beliefs of sophisticated investors. Co-movement is largely explained by investors’ reliance on common information – in other words, their lack of firm-specific information. This gives rise, in part, to the higher degree of aggregate market-wide volatility.

Brexit and other harbingers of a return to the dangers of the 1930s
Avinash Persaud (VoxEU) Aug 26, 2016
The vote for Brexit was seen by some as a vote of ignorance, laced with xenophobia. This column argues that it was not an irrational vote of the ignorant, but a highly rational vote by the same losers from trade as elsewhere across the world. To compensate them, efforts should be made to upskill displaced workers and build them affordable homes to rent in places where the new jobs are. Ignoring this rise of trade nationalism would be far more dangerous than leaving the EU. The vote for Brexit was seen by some as a vote of ignorance, laced with xenophobia. This column argues that it was not an irrational vote of the ignorant, but a highly rational vote by the same losers from trade as elsewhere across the world. To compensate them, efforts should be made to upskill displaced workers and build them affordable homes to rent in places where the new jobs are. Ignoring this rise of trade nationalism would be far more dangerous than leaving the EU.

The Stimulus Our Economy Needs
Pedro Nicolaci da Costa (FP) Aug 26, 2016
The U.S. economy needs cash to fund job creation and raise stagnant wages. Calling it "helicopter money" is just counterproductive.

Germany's massive current account surplus set to decline
Heiko Peters and Robin Winkler (DB Research) Aug 26, 2016
EMU’s current account (CA) surplus has lent some support to the euro over the past two years at a time of relentless fixed income outflows. Germany is pivotal, as it accounts for 60% of the surplus. Since the rotation of fixed income assets out of Europe is likely to continue (‘Euroglut’) the balance of payments should therefore become even more bearish for the euro. The German surplus is likely to weaken by about 20% to 7% of GDP by the end of the decade due to unfavourable demographic trends, the housing boom and slowing globalisation.

Monetary policy: When 2% is not enough
Economist Aug 27, 2016
The rich world’s central banks need a new target.

The Mundell-Fleming trilemma: Two out of three ain’t bad
Economist Aug 27, 2016
A fixed exchange rate, monetary autonomy and the free flow of capital are incompatible, according to the last in our series of big economic ideas.

Hidden productivity benefits from energy-saving technology
Achyuta Adhvaryu, Namrata Kala and Anant Nyshadham (VoxEU) Aug 27, 2016
Energy-efficient technologies are an increasingly relevant policy priority, given growing consensus on the need to tackle climate change. This column examines the productivity benefits of adopting one such technology – LED lighting – for manufacturing firms in India. It finds that improved productivity resulting from LED lighting’s lower heat emissions makes adopting such technology far less costly than previous anticipated, particularly for labour-intensive firms in hot climates. Energy-efficient technologies are an increasingly relevant policy priority, given growing consensus on the need to tackle climate change. This column examines the productivity benefits of adopting one such technology – LED lighting – for manufacturing firms in India. It finds that improved productivity resulting from LED lighting’s lower heat emissions makes adopting such technology far less costly than previous anticipated, particularly for labour-intensive firms in hot climates.

Economic growth with stagnating median incomes: New analysis
Brian Nolan, Max Roser and Stefan Thewissen (VoxEU) Aug 27, 2016
With inequality rising and household incomes across developed countries stagnating, accurate monitoring of living standards cannot be achieved by relying on GDP per capita alone. This column analyses the path of divergence between household income and GDP per capita for 27 OECD countries. It finds several reasons why GDP per capita has outpaced median incomes, and recommends assigning median income a central place in official monitoring and assessment of living standards over time. With inequality rising and household incomes across developed countries stagnating, accurate monitoring of living standards cannot be achieved by relying on GDP per capita alone. This column analyses the path of divergence between household income and GDP per capita for 27 OECD countries. It finds several reasons why GDP per capita has outpaced median incomes, and recommends assigning median income a central place in official monitoring and assessment of living standards over time.

Trump campaign benefits from criticism of trade imbalances
Wilbur Ross (FT) Aug 28, 2016
The fall in productivity and stagnant wages have been allowed to happen.

Remainers fighting the wrong battle will harden Brexit
Wolfgang Münchau (FT) Aug 28, 2016
The pro-Europe crowd should have moved on to argue the case for the closest possible relationship.

Azerbaijan: Aiming to please
Jack Farchy (FT) Aug 28, 2016
The need for western funds in order to complete big energy projects is forcing Baku to tackle corruption.

Can China help shape global governance at the G20?
Ye Yu (EAF) Aug 28, 2016
As president of the G20 for 2016, China has an unprecedented opportunity to provide impetus to global development.

Oil booms leave the poor in the dark
Brock Smith, Thomas McGregor and Samuel Wills (VoxEU) Aug 28, 2016
One of the biggest challenges in fighting poverty is to know where it is. This column describes a new way to measure poverty by using satellites to count people who live in darkness at night. This shows that the economic benefits of oil booms don’t trickle down to the very poor. One of the biggest challenges in fighting poverty is to know where it is. This column describes a new way to measure poverty by using satellites to count people who live in darkness at night. This shows that the economic benefits of oil booms don’t trickle down to the very poor.

Ethiopia has to loosen its grip on the economy
FT View Aug 29, 2016
The authoritarian development model is running up against limits.

Corruption in Kenya evolves for a digital age
John Aglionby (FT) Aug 29, 2016
Notebook: Scrutiny of Mpesa use reveals a network of backhanders.

The Visegrad four: Brussels’ eastern critics
Neil Buckley and Henry Foy (FT) Aug 29, 2016
Assertive member-states have benefited from the union but are seeking to overturn its institutions.

London and New York must cement their bond after Brexit
Dan Glaser (FT) Aug 29, 2016
The world’s leading financial markets have a special relationship.

Brexit, Spanish Elections Loosen Fiscal Discipline in the Eurozone
Simeon Djankov (PIIE) Aug 29, 2016
The first negative effects of Brexit are hitting European economic policy. Afraid of further centrifugal forces in the European Union, the European Commission decided not to fine Portugal and Spain for breaching the prescribed 2015 budget deficit targets.

Evaluating the IMF’s Performance on Financial-Sector Aspects of the Euro Area Crisis
Nicolas Véron (PIIE) Aug 29, 2016
The Peterson Institute has posted The IMF’s Role in the Euro Area Crisis: Financial Sector Aspects on its website, and a parallel publication has been made by Bruegel.

Complexity and Economic Policy
Alan Kirman (OECD Insight) Aug 29, 2016
Over the last two centuries there has been a growing acceptance of social and political liberalism as the desirable basis for societal organisation.

The Hangzhou reformers club
David Dollar (Brookings) Aug 29, 2016
At the center of discussions at the G-20 summit will be the disappointing rate of global growth. What China, the United States and the eurozone could do to accelerate sustainable economic growth at the same time.

Winners and Losers in the New China
Christopher Balding (Bloomberg View) Aug 29, 2016
Reforms aren't going quite as planned.

One Chart Shows What Investors Are Dreaming About
Mark Gilbert (Bloomberg View) Aug 29, 2016
Speculation is running high that governments will turn to fiscal stimulus. Disappointment awaits.

U.S.-EU Trade Deal Gets Hung Up on Politics
Leonid Bershidsky (Bloomberg View) Aug 29, 2016
Elections on both sides of the Atlantic make the prospect of an agreement remote.

Europe’s Last Chance
Joschka Fischer (Project Syndicate) Aug 29, 2016
The European Union emerged from a triumphant period of Western liberal internationalism that now appears to be in retreat, alongside the peace and order it once safeguarded. At a time when Europe needs bold, future-oriented leadership, many Europeans are instead looking to the nationalism and isolationism of centuries past.

Global Growth – Still Made in China
Stephen S. Roach (Project Syndicate) Aug 29, 2016
Despite all the hand-wringing over China’s over-hyped slowdown, the Chinese economy remains the single largest contributor to world GDP growth. Indeed, a weak and still vulnerable global economy needs a successful China more than ever.

An Opportunity for Egypt and the IMF
Mohamed A. El-Erian (Project Syndicate) Aug 29, 2016
Egypt’s leaders and the International Monetary Fund have struck a tentative deal for a $12 billion, three-year loan. If approved by the IMF Board next month, the new program will be an important opportunity to improve relations between the two sides – an outcome that would benefit both Egypt’s citizens and the Fund’s credibility.

Japan vs. the Currency Speculators
Koichi Hamada (Project Syndicate) Aug 29, 2016
Like Aesop’s boy who cried wolf, the Japanese authorities have lost credibility, at least when it comes to the threat of intervention in currency markets. As a result, speculators remain convinced that they are making a one-way bet – win big or break even – and continue to push the yen higher.

How China’s success at the G-20 will be measured
Cheng Li and Zachary Balin (Brookings) Aug 29, 2016
The Hangzhou summit is an opportunity for China to project to leaders of G-20 countries—and to the world—that it takes global governance seriously and that its organizing abilities are second to none.

The industrial sector's share in the EU economy is stabilising
Eric Heymann and Philipp Büchner (DB Research) Aug 29, 2016
Nearly four years ago, the European Commission set its sights on increasing the share of manufacturing in total gross value added from 15.5% at that time to 20% by 2020. This target will probably not be met. After all, in 2015 the share of manufacturing was only around 15.6% and thus scarcely higher than in 2012. However, industry's contribution to EU output has at least stopped decreasing since 2012. Furthermore, industrial gross value added has picked up (slightly) in the EU in recent years in both nominal and real terms. In a few member states, there have been highly contrasting developments in the significance of manufacturing in the economy. It is striking that the industry share in the three large Eastern Europe member states has increased sharply since 2012. Spain and Italy have reported modest gains. Germany has seen its industry share decline slightly in 2015; however, at 22.8% it still far outstrips the EU average.

The Terrible Amusement Park That Explains Chongqing’s Economic Miracle
Dinny McMahon (FP) Aug 29, 2016
With China's cities drowning in debt, one megalopolis is getting its books in order by selling off trained dolphins, Australian iron ore, and life insurance companies.

Taxation, corruption, and growth
Philippe Aghion, Ufuk Akcigit, Julia Cagé and William Kerr (VoxEU) Aug 29, 2016
The relationship between taxation and economic growth is complex, and relies in large part on the efficiency with which taxes are used. This column examines the impact of corruption on this relationship. The boost to welfare from reducing corruption is substantially larger than the marginal gains from optimising the tax rate for an existing level of government efficiency. The relationship between taxation and economic growth is complex, and relies in large part on the efficiency with which taxes are used. This column examines the impact of corruption on this relationship. The boost to welfare from reducing corruption is substantially larger than the marginal gains from optimising the tax rate for an existing level of government efficiency.

Projecting the Long-Run Natural Rate of Interest
Kevin J. Lansing (FRBSF Econ Letter) Aug 29, 2016
The “natural” rate of interest—the real rate consistent with full use of economic resources and steady inflation near the Fed’s target level—is an important benchmark for monetary policy. Current estimates suggest that this rate is near zero, but it is expected to rise gradually in the years ahead as real GDP returns to its long-run potential. If the historical statistical relationship between the growth rate of potential GDP and the natural rate holds true in the future, then a 2% long-run growth rate would imply a long-run natural rate of around 1%.Projecting the Long-Run Natural Rate of Interest

Capitalism and democracy: the strain is showing
Martin Wolf (FT) Aug 30, 2016
To maintain legitimacy, economic policy must seek to promote the interests of the many not the few.

Motor industry: Pressure on the pump
Pilita Clark and Peter Campbell (FT) Aug 30, 2016
Electric cars could make up a quarter of the world’s automobiles by 2040. How will it affect oil demand?

Asia leads emerging market recovery
FT View Aug 30, 2016
Cautious optimism as middle-class spending helps growth to surge.

Emerging markets will not escape Fed’s grip
Henny Sender (FT) Aug 30, 2016
East Asia is an economic bright spot, but remains vulnerable to any interest rate rise in the US.

Mexico: slower and lower
Dan Bolger (FT) Aug 30, 2016
Poor growth and rising debt mean caution is warranted and patience required.

India Looks West
WSJ Aug 30, 2016
Modi banks on tighter trade and security ties with the U.S.

Why Geographic Equality Matters
Conor Sen (Bloomberg View) Aug 30, 2016
All boats are lifted when talent and wealth aren't limited to just a few big cities.

Polling the poor and the non-poor on poverty: 1985–2016
William Schneider (AEI) Aug 30, 2016
The poor and non-poor share many of the same values about work and government's responsibility. Americans believe the Great Recession and its aftermath have made it hard for the poor to find jobs. Today, more people say welfare is designed to help people get back on their feet than did in 1985.

How to Fight Secular Stagnation
Michael Spence (Project Syndicate) Aug 30, 2016
Much of the world, especially the advanced economies, has been mired in a pattern of slow and declining GDP growth in recent years. But there are different types of forces that could be suppressing growth, not all of which are beyond our control.

G20 Summit: Leaving West to Deal With Crises, China Focuses on Positives
François Godement (YaleGlobal) Aug 30, 2016
G20 agenda hints at China’s vision for global order with focus on long-term rather than immediate concerns.

The problem with measuring performance in economic development
Ryan Donahue and Brad McDearman (Brookings) Aug 30, 2016
Governors, mayors, and boards that oversee economic development organizations are wasting money and energy attempting to meet a standard set of metrics that fail to accurately measure the organization’s performance.

Investment and Protectionism: A pre-G20 summit briefing
Simon Evenett and Johannes Fritz (VoxEU) Aug 30, 2016
In July, G20 trade ministers adopted nine 'Guiding Principles for Global Investment Policymaking'. This column introduces the latest GTA report, which shows how well the G20’s track record stacks up against these new growth-promoting goals. In July, G20 trade ministers adopted nine 'Guiding Principles for Global Investment Policymaking'. This column introduces the latest GTA report, which shows how well the G20’s track record stacks up against these new growth-promoting goals.

The limits to “whatever it takes”: Lessons from the gold standard
Stefano Ugolini (VoxEU) Aug 30, 2016
When Mario Draghi famously declared that the ECB was “ready to do whatever it takes to preserve the euro”, he also specified “within our mandate”. This column examines the institutional limitations to central bankers’ actions. It argues that institutional constraints are essential in determining the sustainability of monetary policies, and hence central banks’ ability to pursue their targets. The weakness of the Bank of England in the heyday of the gold standard is a case in point. When Mario Draghi famously declared that the ECB was “ready to do whatever it takes to preserve the euro”, he also specified “within our mandate”. This column examines the institutional limitations to central bankers’ actions. It argues that institutional constraints are essential in determining the sustainability of monetary policies, and hence central banks’ ability to pursue their targets. The weakness of the Bank of England in the heyday of the gold standard is a case in point.

Inequality made the Great Recession worse (especially for the poor)
Kurt Mitman, Dirk Krueger and Fabrizio Perri (VoxEU) Aug 30, 2016
Previous research found that income and wealth inequality had little impact on the aggregate dynamics of consumption, investment and output. This reinforced the idea that we can study downturns in the economy using representative agents. This column argues that household inequality affects both the depth of a recession and the welfare losses of those affected by it. Therefore we should explicitly measure and model household heterogeneity when we consider the impact of business cycle fluctuations and the welfare consequences of economic crises. Previous research found that income and wealth inequality had little impact on the aggregate dynamics of consumption, investment and output. This reinforced the idea that we can study downturns in the economy using representative agents. This column argues that household inequality affects both the depth of a recession and the welfare losses of those affected by it. Therefore we should explicitly measure and model household heterogeneity when we consider the impact of business cycle fluctuations and the welfare consequences of economic crises.

Ireland’s Economic Reckoning
Adam Davidson (New Yorker) Aug 31, 2016
The country built its economy on competitive work and legalistic, tax-avoiding fantasy. The recent Apple ruling complicates its future.

A transatlantic trade pact in trouble
FT View Aug 31, 2016
Brussels and Washington need to earn more public support.

China turns away from the market
Jingzhou Tao (FT) Aug 31, 2016
Mergers between state-owned enterprises have little business logic.

Chinese R&D goes global
Jacopo Dettoni (FT) Aug 31, 2016
Surge in overseas spending matches China’s emergence as world’s biggest source of outbound FDI.

The 5,000-Year Government Debt Bubble
James Freeman (WSJ) Aug 31, 2016
Should investors buy the most expensive bonds in recorded history?

Is the World Bank Excusing Mugabe’s Human Rights Abuses? Read For Yourself.
Todd Moss (CGD) Aug 31, 2016
The World Bank is supposed to work with poor countries in distress. When it all goes well, the Bank supports reformers with advice and money. Sometimes, however, the Bank prolongs a country’s pain by throwing a lifeline to recalcitrant regimes. The difference between a helping hand and a counterproductive crutch requires the Bank to understand the trends inside a country and how its own actions might affect those dynamics. Often, it’s difficult to discern these subtleties.

Complexity and Better Financial Regulation
Harald Stieber (OECD Insights) Aug 31, 2016
The financial crisis of 2007/08 was not caused by complexity alone. It was caused by rapidly increasing financial leverage until a breaking point was reached.

The Global Economy Is in Unchartered Waters
Brendan Brown (The Austrian) Aug 31, 2016
The Great Monetary Experiment has led investors to becoming starved for yield.

Globalization and the West: Coping With the Politics of Anger
Holger Schmieding (Globalist) Aug 31, 2016
What happens when the need for economic adjustment moves from the global South to the North.

Expert Advice: Free-Trade Benefits Must Be Sold, Not Imposed
Paula Dwyer (Bloomberg View) Aug 31, 2016
Helping workers who lose out will be key to rebuilding support.

Brexit and the Future of Europe
Jean Pisani-Ferry (Project Syndicate) Aug 31, 2016
It is already clear that Brexit will reshape the map of Europe. And, especially given Britain’s stunning unpreparedness for the consequences of its own decision – its strategy and priorities, and even its timetable, remain uncertain – that means that the EU must start figuring out how to make the best of it.

Europe needs its own Alexander Hamilton
Sylvester Eijffinger (VoxEU) Aug 31, 2016
The ECB is under fire from all sides for its inability to stimulate Europe's economies. This column puts the case for an informal European ‘praesidium’ within the Eurogroup to coordinate wider stimulus and reform measures. This will inevitably lead to the appointment of a European finance minister – the Eurozone's equivalent of Alexander Hamilton, the first Treasury Secretary in the history of the US.