News & Commentary:

Articles/Commentary

Sending a message to Venezuela’s dictatorship
FT View Aug 1, 2017
Global censure is a first step; targeted, multilateral sanctions the next.

Brussels must aim for substance on trade
FT View Aug 1, 2017
A purely symbolic EU deal with Mercosur would be a disappointment.

James King (FT) Aug 1, 2017
Issuance is up but Islamic finance is second choice after conventional bond market.

Shape the contours of Brexit Britain’s final destination
Nick Clegg (FT) Aug 1, 2017
The EU Brexit negotiations are stumbling because no one knows where they are heading.

EM risk: still not in the clear
Luis Costa (FT) Aug 1, 2017
Possibility of tighter monetary conditions in US and Europe should not be discounted.

HSBC: the world’s regional bank?
Brian Caplen (Banker) Aug 1, 2017
HSBC was started in Hong Kong and Shanghai in 1865 and grew into a global enterprise. But with 74% of profits now coming from Asia it seems to have come full circle.

Trump's Misguided Plunder
Adam Minter (Bloomberg View) Aug 1, 2017
Market forces will ensure rare-earth supply meets demand.

Global Growth Depends on China's Debt
Daniel Moss (Bloomberg View) Aug 1, 2017
Can China continue muddling through? The world should hope so.

Six Things Central Banks Don't Get About Wages, Part 2
Gary Shilling (Bloomberg View) Aug 1, 2017
Low-paying jobs are on the rise, union membership is down and productivity has fallen.

Avoiding the Resource Curse
Justin Fox (Bloomberg View) Aug 1, 2017
Sharing the wealth could help countries like the U.S. bypass Venezuela's tragic fate.

Brexit Reversal? The EU Should Say 'No Way'
Leonid Bershidsky (Bloomberg View) Aug 1, 2017
Talk of the U.K.'s return should be alarming to anyone who cares about the EU's resurgence.

The Sandinista Shell Game
Andrés Velasco (Project Syndicate) Aug 1, 2017
An economic slowdown in Nicaragua is likely sooner rather than later. At that point, local business leaders will feel rather less proud of their cozy relationship with an authoritarian government – and the government will find it much harder to secure a restive population’s quiescence.

Explaining Global Recovery Amid Political Recession
Michael Spence (Project Syndicate) Aug 1, 2017
The world’s major economies are experiencing a steady recovery, and financial markets are showing no signs of convulsion, even as monetary stimulus is gradually withdrawn. This is all the more remarkable when one considers the sharp increase in risk stemming from profound political dysfunction.

Recovery is Not Resolution
Carmen Reinhart (Project Syndicate) Aug 1, 2017
Last week, the IMF revised upward its growth projections for the eurozone and Asia’s advanced economies, including Japan, with the US Federal Reserve’s ongoing exit from ultra-easy post-crisis monetary policy adding to the growing sense that normal times are returning. But are they?

Economic conditions and ECB interest rate increases
Stefan Gerlach (VoxEU) Aug 1, 2017
With the Eurozone in recovery, at some stage the ECB will raise interest rates. This column examines the conditions that might lead to this happening. A statistical analysis suggests that the likelihood of an interest rate increase is currently about 7%, but a combination of stronger growth and higher price pressures could quickly raise this to about 30%. A return of the ECB to its pre-crisis behaviour would also lead to a dramatic rise in the likelihood of an interest rate increase. With the Eurozone in recovery, at some stage the ECB will raise interest rates. This column examines the conditions that might lead to this happening. A statistical analysis suggests that the likelihood of an interest rate increase is currently about 7%, but a combination of stronger growth and higher price pressures could quickly raise this to about 30%. A return of the ECB to its pre-crisis behaviour would also lead to a dramatic rise in the likelihood of an interest rate increase.

The Fed's Foray Into Forex
Tim Sablik (FRB Richmond Econ Focus) Aug 1, 2017
Although very uncommon now, the Fed used to intervene regularly in foreign exchange markets

The Next 50 Years of ASEAN
Aries A. Arugay (Diplomat) Aug 1, 2017
Overcoming irrelevance and polarization are ASEAN’s biggest challenges as its heads into the future.

Eurozone Mid-Year Economic Outlook
Jay Bryson and Michael Pugliese (Wells Fargo) Aug 1, 2017
Real GDP accelerated in the Eurozone in Q2, as the year-ago pace of economic growth crossed the 2 percent threshold for the first time since Q1-2011. Economic growth has become increasingly broad based in recent quarters amid steady employment gains and improving business sentiment. Looking forward, we expect that the increasingly self-sustaining economic expansion will remain intact.

Nigeria’s missing billions turn up in familiar places
FT Aug 2, 2017
Tainted wealth still flows readily to western property and banks.

Can Japan provide answers to the west’s economic problems?
Robin Harding (FT) Aug 2, 2017
From ‘Brexit Britain’ to Trump’s US, developed economies are seeking alternative models.

The utopia of fiscal union
Martin Sandbu (FT) Aug 2, 2017
Political energies would be better spent on more useful reforms.

Climate Shifts Aren’t Limited to the Weather
Thomas L. Friedman (NYT) Aug 2, 2017
Globalization and technology are changing the world, too.

All Hands on Deck: Confronting the Challenges of Capital Flows
Atish R. Ghosh, Jonathan D. Ostry, and Mahvash S. Qureshi (IMF) Aug 2, 2017
The global financial crisis and its aftermath saw boom-bust cycles in capital flows of unprecedented magnitude.

Why Robots Won't Cause Mass Unemployment
Jonathan Newman (Mises Wire) Aug 2, 2017
There will always be jobs because there will always be scarcity. Human wants are unlimited, yet the resources are limited — even with robots.

Another Side to the Story: Syrian Refugees Have Invested over $300 Million in the Turkish Economy
Vijaya Ramachandran (CGD) Aug 2, 2017
We are inundated by bad news about Syria and the heartbreaking stories of refugees fleeing this war-torn country. But there is another side to the story. A groundbreaking study by the NGO Building Markets indicates that there are over 10,000 Syrian-owned businesses in Turkey. Since 2011, Syrians have invested nearly $334 million into 6,033 new companies.

Shooting Ourselves in the Hoof
Jeffrey J. Schott (PIIE) Aug 2, 2017
American ranchers now know the cost of President Trump’s ill-considered withdrawal from the Trans-Pacific Partnership (TPP) in January 2017. The TPP promised US exporters of high-quality beef improved access to the lucrative, highly protected Japanese market.

The Coming Financial Volatility
Gene Frieda (PIMCO) Aug 2, 2017
Risk-asset markets are ignoring the red flags that the bond markets are waving. Are they right?

Take Your Time, Bank of England
Bloomberg View Aug 2, 2017
For now, a slowing economy is an argument against raising rates.

OPEC's Game-Theory Dilemma
Mohamed Aly El-Erian (Bloomberg View) Aug 2, 2017
Cartel members are being pushed to seek ever-broader coalitions to secure an orderly influence on oil prices.

The Neglected Lessons of a Lost Decade
Narayana Kocherlakota (Bloomberg View) Aug 2, 2017
In some ways, the financial crisis was worse than the Great Depression.

ASEAN at 50
Kishore Mahbubani (Project Syndicate) Aug 2, 2017
In a tumultuous world, Southeast Asia has achieved a degree of peace and prosperity that until recently was unimaginable. The region owes much of this success to the Association of Southeast Asian Nations, which marks its 50th anniversary this month.

Why Are Illiberal Democrats Popular?
Daniel Gros (Project Syndicate) Aug 2, 2017
Illiberal leaders like Russia's Vladimir Putin, Turkey's Recep Tayyip Erdogan, and Hungary's Viktor Orbán have managed to concentrate power without losing popular support. As their mounting authoritarianism undermines prudent economic policies, however, they will find it increasingly difficult to keep the electorate happy.

Protectionism Will Not Protect Jobs Anywhere
Kenneth Rogoff (Project Syndicate) Aug 2, 2017
As US and European political leaders fret about the future of quality jobs, they would do well to look at the far bigger problems faced by developing Asia. There, the same angst that Americans and Europeans have about the future of employment is an order of magnitude higher.

Rebalancing in China: Progress and Prospects
Longmei Zhang (VoxChina) Aug 2, 2017
Rebalancing is the most frequent word associated with China's economic transition; however, people often interpret the term differently and tend to focus on one narrow aspect. What does rebalancing really mean? How much progress has China made on rebalancing and where is it heading?

Does Dollar Depreciation = Stronger Export Growth?
Jay Bryson (Wells Fargo) Aug 2, 2017
On a trade-weighted basis, the U.S. dollar has been in an uptrend since mid-2011. However, after reaching a 14-year peak late last year, the trade-weighted value of the dollar has dropped more than 7 percent. Moreover, our currency strategy team looks for the greenback to fall further on balance in coming quarters, and they believe that the U.S. dollar has embarked on a multi-year downtrend.

China Mid-Year Economic Outlook
Jay Bryson (Wells Fargo) Aug 2, 2017 Fewer Immigrants Mean More Jobs? Not So, Economists Say
Binyamin Appelbaum (NYT) Aug 3, 2017
Highly educated immigrants are good for the economy, but so are less skilled workers, economists say.

How to Fix Libor Pains
Jerome Powell and J. Christopher Giancarlo (WSJ) Aug 3, 2017
The time has come to phase in an alternative to the interest-rate benchmark.

How crisis-hit economies become investment darlings
Economist Aug 3, 2017
How some of the worst-run economies can be transformed into investment darlings.

Japan: Structural Reform “Lagging Element of Abenomics,” IMF Says
Bridges, Volume 21, Number 28 Aug 3, 2017
Japan, one of the world’s four largest traders and the third largest economy, will need to press harder with its structural reform efforts, said the International Monetary Fund (IMF) in an assessment published this week.

Rogue 301: Trump to Dust Off another Outdated US Trade Law?
Chad P. Bown (PIIE) Aug 3, 2017
The Trump administration stands once again at the precipice of triggering another US trade law from the Cold War. This time, media reports indicate the administration may self-initiate an investigation under Section 301 of the US Trade Act of 1974, a law that allows the president to unilaterally impose tariffs on another country.

Germany: More Lenient on Brexit?
Stephan Richter and Ambrose Evans-Pritchard (Globalist) Aug 3, 2017
A strong belief in the Brexit maneuver, and how far Germany and the UK are apart.

Japan Inc. Might Have to Pay Up
Daniel Moss (Bloomberg View) Aug 3, 2017
The labor market is so tight, higher wages are the only way to retain workers.

The U.S. Missed Its Chance to Make China Play Fair
Noah Smith (Bloomberg View) Aug 3, 2017
Trump wants to relitigate old trade disputes, when policies to boost growth are what's needed.

India's Central Bank Passes the Buck Back
Mihir Sharma (Bloomberg View) Aug 3, 2017
Its message: The cost of capital isn't what's holding back growth.

Financing Universal Education
Steven J. Klees (Project Syndicate) Aug 3, 2017
The biggest obstacle to ensuring high-quality education for all children is figuring out how to pay for it. Developing countries can finance well over 90% of what is needed, but they also need international aid that is amply supported by wealthy countries – and hemmed in by ideological agendas.

Soil Science for a Hungry Planet
Esther Ngumbi (Project Syndicate) Aug 3, 2017
By 2050, the world’s population will approach ten billion. Feeding them all will require novel solutions to increasing agricultural productivity, and one of the most promising incipient technologies involves leveraging the naturally occurring microorganisms that are already in the ground.

Extraordinary Measures for Ordinary Times
Harold James (Project Syndicate) Aug 3, 2017
The legacy of the 2008 financial crisis ten years later is that it put a premium on unconventional measures. As policymakers scrambled in search of big guns for big problems, they set the stage for the return of an old character: a strongman willing to pull the trigger.

Competition between government money and cryptocurrencies
Jesus Fernández-Villaverde (VoxEU) Aug 3, 2017
If the share of payments made by cryptocurrencies increases, government-issued money will face market competition from private issuers. The column argues that, even if this system could maintain price stability in an economy, the market would not provide the socially optimum amount of money. A government could still, however, maximise social welfare using monetary policy in response to peg the real value of money. The threat of competition from private monies may therefore impose welcome market discipline on any government that issues currency. If the share of payments made by cryptocurrencies increases, government-issued money will face market competition from private issuers. The column argues that, even if this system could maintain price stability in an economy, the market would not provide the socially optimum amount of money. A government could still, however, maximise social welfare using monetary policy in response to peg the real value of money. The threat of competition from private monies may therefore impose welcome market discipline on any government that issues currency.

As China Reins in Capital, What Next for Global Trade?
Yu Zhou & Peter Knaack (ChinaFile) Aug 3, 2017
China’s Communist Party and its leader, Xi Jinping, are tightening controls on overseas spending by the country’s biggest companies and their highly visible billionaire CEOs. Xi personally signed off on new rules barring state banks from lending to Dalian Wanda’s Wang Jianlin, curbing his years of recent ambitious acquisition plans in overseas real estate, international sports franchises, and Hollywood entertainment companies.

Venezuela's Deepening Crisis
Dorothy Kronick and Jennifer McCoy (K@W) Aug 3, 2017
Can it find a way out of chaos?

Low interest rates bolster EM funds inflows
Eric Platt (FT) Aug 4, 2017
Sustained weakness in the US dollar plays key role.

India's Power Paradox
Nathaniel Bullard (Bloomberg View) Aug 4, 2017
Improvements in efficiency and infrastructure are bringing electricity to the masses. That's not so great for energy companies.

China Shuffles Its Debt Around
Christopher Balding (Bloomberg View) Aug 4, 2017
It's not deleveraging. It's changing who borrows.

Japan Buries Our Most-Cherished Economic Ideas
Noah Smith (Bloomberg View) Aug 4, 2017
The country has mountains of debt and a tight job market. So where's the inflation?

Rethinking the Population Taboo
Peter Singer and Frances Kissling (Project Syndicate) Aug 4, 2017
When French President Emmanuel Macron recently suggested that Africa's problems reflect its high birth rates, he elicited widespread charges of patriarchy and racism. But while Macron's statement got a lot wrong, the real reason he came under attack merits serious attention.

Africa’s Defining Challenge
Mohamed Yahya (Project Syndicate) Aug 4, 2017
By 2055, Africa’s youth population is expected to be more than double the 2015 total of 226 million. The success of African governments’ efforts to change a largely inhospitable environment for young people will be the single most important factor determining whether the continent prospers or suffers in the coming decades.

The Marshall Plan and “America First”
Benn Steil (Project Syndicate) Aug 4, 2017
Over the years 1948-1952, the US devoted the equivalent of $800 billion in today’s dollars to the reconstruction of western Europe. But whereas the Marshall Plan is widely regarded as the largest and most effective foreign-aid program in history, it is less widely appreciated for being the most successful example of an “America First” foreign policy.

Reviving investment in Europe
Jacques Bughin and Jan Mischke (VoxEU) Aug 4, 2017
The economic narrative of the EU since the Global Crisis has focused on successive debt crises and persistent stagnation. This column addresses the accompanying, but less well studied, investment slump that occurred over the last decade, using evidence from an extensive survey of business decisionmakers across Europe. Business sentiment towards increased investment is affected not just by historic cash flows and expected future demand, but also the growth of digital economies as well as political concerns such as anti-Europe sentiment. The economic narrative of the EU since the Global Crisis has focused on successive debt crises and persistent stagnation. This column addresses the accompanying, but less well studied, investment slump that occurred over the last decade, using evidence from an extensive survey of business decisionmakers across Europe. Business sentiment towards increased investment is affected not just by historic cash flows and expected future demand, but also the growth of digital economies as well as political concerns such as anti-Europe sentiment.

Cultural change and intergenerational transmission
Gerard Roland and David Yang (VoxEU) Aug 5, 2017
Studies have shown that there is strong inertia in culture because values and beliefs are formed through intergenerational transmission. Much less is known about how culture changes, and which aspects of the changes in values and beliefs are permanent or temporary. This column examines the effects of the Cultural Revolution in China on urban elites, and reveals that the lack of access to higher education affected people’s beliefs throughout their life. Also, while the ‘lost generation’ passed down their greater mistrust in the government to their children, their changed beliefs on the roles of effort versus luck were transmitted to a much lesser degree. Studies have shown that there is strong inertia in culture because values and beliefs are formed through intergenerational transmission. Much less is known about how culture changes, and which aspects of the changes in values and beliefs are permanent or temporary. This column examines the effects of the Cultural Revolution in China on urban elites, and reveals that the lack of access to higher education affected people’s beliefs throughout their life. Also, while the ‘lost generation’ passed down their greater mistrust in the government to their children, their changed beliefs on the roles of effort versus luck were transmitted to a much lesser degree.

The Top Five Foreign-Policy Blunders Trump Hasn’t Made Yet
Stephen M. Walt (FP) Aug 4, 2017
(But still might.)

Globalisation and US labour markets
Mine Senses (VoxEU) Aug 5, 2017
There is some evidence that communities hit hardest by globalisation shifted away from centrist candidates towards ideologically extreme candidates in the most recent US election. This column, taken from a recent Vox eBook, asks what policies those who were elected on a promise of turning the tide of globalisation away will implement, and what the prospects of success for these policies are. There is some evidence that communities hit hardest by globalisation shifted away from centrist candidates towards ideologically extreme candidates in the most recent US election. This column, taken from a recent Vox eBook, asks what policies those who were elected on a promise of turning the tide of globalisation away will implement, and what the prospects of success for these policies are.

The Macron Effect: Taking France by Storm
Joseph Downing (EFR) Aug 5, 2017
Macron has burst onto the global political scene as an upstart who took not only the French executive but also a majority in the parliamentary elections. However, three key challenges could yet derail his nascent presidency. Corruption in French politics, labour market reform, and finally, dealing with the security puzzle that has haunted France for the best part of a decade. Together, these present challenges to the young president present a hard slog for a country already fatigued by decades of broken promises from both the right and left.

Elements of the recovery
Ajay Shah (Business Standard) Aug 6, 2017
India has been in a sustained downturn from 2011 onwards. How will this end?

How has China managed to get along with Trump?
Zha Daojiong (EAF) Aug 6, 2017
Thus far both Beijing and Washington see it in their interests to keep their…relationship on a stable and predictable path. But what happens next is very much harder to predict.

How To Make Democracy Work in the Digital Age
Dirk Helbing and Stefan Klauser (Globalist) Aug 6, 2017
Digital democracy has the ultimate benefit that it supports society’s historical achievements.

US should tread carefully on China trade concerns
FT View Aug 6, 2017
An investigation is welcome but Section 301 risks stoking tensions.

The Article 49 strategy to keep Britain in the EU
Wolfgang Munchau (FT) Aug 6, 2017
If the UK wants to reboot its relationship with the bloc, this approach is best.

Lessons from the credit crunch
John Plender (FT) Aug 6, 2017
US banks are notably less weak than Europe’s where stress tests have been unstressful.

The changing balance of power in global energy security
Nick Butler (FT) Aug 7, 2017
As Asia’s oil demand grows, its dependence on imports brings vulnerabilities.

Emerging world again driving global growth, but will it last?
Jonathan Wheatley (FT) Aug 7, 2017
Growth has been broad-based and trade-driven, but analysts say trade may have peaked.

Germany cannot afford to be a geopolitical bystander
Daniela Schwarzer (FT) Aug 7, 2017
The next government must decide the price to pay for safeguarding the existing order.

Trump's Stalled Trade Agenda Leaves Industries in the Lurch
Alan Rappeport (NYT) Aug 7, 2017
Workers and industry groups say they aren't tired of winning. They are tired of waiting for action.

Brexit and the balance of bulls***
Jonathan Portes (Independent) Aug 7, 2017
Two articles published recently by the New York Times correspond almost precisely to Harry Frankfurt’s seminal definition of 'bulls***' – not necessarily true or false, but 'unconnected to a concern with the truth'.

Emerging Market Local Debt: Growing Depth, Growing Opportunity
Francesc Balcells & Pramol Dhawan (PIMCO) Aug 7, 2017
Expansion could accelerate as more countries join the index.

The August of our Discontent: Once More Unto the Breach?
Cliff Asness (AQR) Aug 7, 2017
This month is the ten-year anniversary of the "quant crisis" or "quant quake" - that one week period in August 2007 when quantitative equity strategies like factor investing and statistical arbitrage suffered very large losses and then, in the next few weeks, made an almost full recovery. Given the current popularity of factor investing it seems a good time to review what happened that summer and discuss its relevance for today.

Brexit: The Tories‘ Battle Against the Economic Facts
Denis MacShane (Globalist) Aug 7, 2017
Why Germans and other nations should involve themselves more in the UK debate.

In Brazil, Highway Robbery Is a Growth Industry
Mac Margolis (Bloomberg View) Aug 7, 2017
Policing cutbacks, corruption and inequality fuel a lucrative (and terrifying) new enterprise.

Has China's Rise Topped Out?
Michael Schuman (Bloomberg View) Aug 7, 2017
The spread of its global economic influence is slowing sharply.

The Past, Present and Future of U.S. Immigration
Justin Fox (Bloomberg View) Aug 7, 2017
How do current levels compare to those of a century ago? And why does it matter?

Japan's Central Bank Chief Deserves a Second Term
Daniel Moss (Bloomberg View) Aug 7, 2017
Kuroda's bold ideas put some life into a moribund economy. That's more than his predecessors could claim.

Treasuries Look Like Insurance for a Crash
Charles Lieberman (Bloomberg View) Aug 7, 2017
Investors who expect big losses in stocks accept smaller ones on government bonds.

Maybe Central Banks Are Too Independent
Narayana Kocherlakota (Bloomberg View) Aug 7, 2017
Congress might want to consider placing limits on the Fed.

Who Will Be Europe’s Alexander Hamilton?
Sylvester Eijffinger (Project Syndicate) Aug 7, 2017
Now that the European Central Bank has exhausted its options, national governments should come together to lead Europe's economic recovery. What is needed is a new presidium within the Eurogroup, which would help coordinate economic policymaking and lay the groundwork for the establishment of a fiscal union.

The New Socialism of Fools
J. Bradford DeLong (Project Syndicate) Aug 7, 2017
The shift in US employment from assembly-line manufacturing to construction, services, and caretaking has not had a significant impact on the overall distribution of income in terms of class. To find the roots of political resistance to globalization in the twenty-first century, one must dig deeper.

Post-crisis regulation and CEO bonuses
Vittoria Cerasi, Sebastian M. Deininger, Leonardo Gambacorta and Tommaso Oliviero (VoxEU) Aug 7, 2017
Since 2011, the Financial Stability Board (FSB) has implemented compensation principles and standards for executives and material risk-takers in many financial institutions. This column presents evidence that banks in jurisdictions that adopted them changed their compensation policies more than other banks. Compensation in these banks is less linked to short-term profits and more linked to risk, and the CEOs of risky banks now receive less in bonuses and other variable compensation than their peers at less risky banks. Since 2011, the Financial Stability Board (FSB) has implemented compensation principles and standards for executives and material risk-takers in many financial institutions. This column presents evidence that banks in jurisdictions that adopted them changed their compensation policies more than other banks. Compensation in these banks is less linked to short-term profits and more linked to risk, and the CEOs of risky banks now receive less in bonuses and other variable compensation than their peers at less risky banks.

Monetary Policy's Role in Fostering Sustainable Growth
John C. Williams (FRBSF Econ Letter) Aug 7, 2017
As the economy has transitioned from recovery to expansion, the role of monetary policy has shifted to sustaining the expansion by gradually moving conventional and unconventional policy back to normal. But monetary policy is reaching its limit for stimulating growth, calling for private and public sector investments and policies to step up and take the lead.

US foreign assistance under challenge
Various (Brookings) Aug 7, 2017
President Trump’s 2018 budget proposal would cut America’s International Affairs Budget by 29 percent, leaving the legacy and sustainability of many global development programs in serious doubt. In a new collection of essays commissioned for the August 2-5 2017 Brookings Blum Roundtable, experts discuss the future of U.S. foreign aid and outline policy opportunities to minimize damage from budget cuts.

Manufacturing flocks to new corners of Asia
Robin Harding (FT) Aug 8, 2017
The success of Bangladesh suggests other economies could challenge China’s position.

Beijing’s chicanery leaves western business guessing
James Kynge (FT) Aug 8, 2017
Chinese bids emanate from a domestic context that is impossible to predict.

Second Thoughts on Trade With China
William A. Galston (WSJ) Aug 8, 2017
Inviting Beijing into the WTO seemed like a win-win. It didn’t turn out that way.

Trump Is Wrong: A Weak Dollar Doesn’t Make a Strong Economy
John Tamny (WSJ) Aug 8, 2017
How does it help U.S. workers to erode the value of the currency in which they’re paid?

Tempered Ambitions on US Tax Reform
Simeon Djankov (PIIE) Aug 8, 2017
At 35 percent, the United States has the highest statutory corporate income tax rate among advanced economies. Reform of the widely criticized corporate tax is among the top agenda items of the Trump administration and the Republican leadership of Congress, and even many Democrats say the time has come to revamp the tax to make US-based multinational corporations more competitive in the global economy.

Interest Rates: How Superstar Firms Depress R-Star
Joachim Fels (PIMCO) Aug 8, 2017
Technology and globalization have disproportionately benefited the most innovative and productive firms, leading to rising concentration as a small number of “superstar firms” (think of so-called FAANG) increasingly dominate their respective industries. Superstar firms make higher profits, save more than they invest, and pay out a smaller share of their value-added to labor. The rising importance of superstar firms therefore helps to explain key macro phenomena such as the global ex-ante excess of saving over investment, rising income and wealth inequality, and low wage inflation despite falling unemployment (the “flat Phillips curve”), all of which have contributed to the current environment of low natural (r-star) and actual interest rates, which in turn supports high equity valuations for the superstars. What could reverse the ascent of superstar firms and thus the decline in r-star? (1) protectionist policies that accelerate deglobalization; (2) antitrust policies that curb superstar firms’ quasi-monopoly profits; and (3) a surge in labor’s bargaining power that leads to significantly higher wage growth for the bulk of the workforce. None of these seems particularly likely anytime soon. So superstar firms and super-low natural interest rates are likely here to stay.

China Takes Away the Punch Bowl
Andrew Polk (Bloomberg View) Aug 8, 2017
Controlling offshore investments makes sense. That doesn't mean it's smart.

What Greenspan Gets Wrong -- and Right -- About Bubbles
Ben Emons (Bloomberg View) Aug 8, 2017
Corporate debt and German bunds may be the most at risk from a sell-off.

Rwanda's President Thinks He's Indispensable
Justin Fox (Bloomberg View) Aug 8, 2017
Maybe he is. That doesn't bode well for his people or the progress his country has made.

Finishing the Post-Crisis Job
Jim O'Neill (Project Syndicate) Aug 8, 2017
Many economists argue that we are still living with the consequences of the global financial crisis, and with the forces that caused it. This is partly true: there is still a need for more investment, productivity, and wage growth; but the global imbalances that gave rise to the last crash have been largely resolved.

Promise and Peril for Argentina’s G20 Presidency
Guy Edwards (Project Syndicate) Aug 8, 2017
As Argentina prepares to take over the G20 presidency in December, the international landscape is far more challenging than President Mauricio Macri probably anticipated it would be when his country was approved for the job. But there are plenty of areas where Argentina's leadership of the G20 can make a difference.

A stark warning on the cost of Brexit indecision
FT View Aug 9, 2017
The financial sector will soon have to act on a worst-case scenario.

Why a Franco-German bargain will help secure the euro
Marcel Fratzscher (FT) Aug 9, 2017
The gains would outweigh the costs and help chart a path for the continent’s future.

In the Age of Trump, the Dollar No Longer Seems a Sure Thing
Peter S. Goodman (NYT) Aug 9, 2017
Long the ultimate safe haven in the global economy, the U.S. dollar may be losing some status as investors grapple with an uncertain political climate.

Trump could be on the brink of starting a trade war with China
David Dollar and Ryan Hass (Brookings) Aug 9, 2017
With the president expected to order an investigation into unfair Chinese trade practices, David Dollar and Ryan Hass explain why unilateral, protectionist measures will result in proportional retaliation from China.

A Visit to the Brexit World
John Bruton (Globalist) Aug 9, 2017
Mrs. May, tell us exactly what sort of deal you want with the EU customs union?

Bond Market Pressures Build as Summer Drags On
Scott Dorf (Bloomberg View) Aug 9, 2017
It won’t be long before the tectonic plates of bond supply, economic growth and inflation grind so hard that something breaks.

Why the U.S. Trade Deficit Is Big, But Not Bigger
Justin Fox (Bloomberg View) Aug 9, 2017
It's not something Americans have worried about in a while. It still matters.

Three Days That Changed Modern Life
Barry L Ritholtz (Bloomberg View) Aug 9, 2017
Events on this date in 1945, 1974 and 1995 shaped the world we live in today.

You're Gonna Need a Bigger Virtual Wallet
Tyler Cowen (Bloomberg View) Aug 9, 2017
The cryptocurrency market is exploding with new options, and there's reason to doubt a consolidation is coming.

What Makes a Great Leader?
Kishore Mahbubani and Klaus Schwab (Project Syndicate) Aug 9, 2017
In a world that is changing more rapidly than ever, we should seek leaders who can protect and serve the interests of the people they are supposed to represent. This means not just criticizing the failings of weak leaders, but also highlighting the successes of strong ones.

Empowering the Other Half of Africa’s Economy
Graça Machel (Project Syndicate) Aug 9, 2017
By 2040, Africa is expected to have the world’s largest labor force, with some 1.1 billion people of working age. But unless and until the continent’s women gain the same access to opportunities at work and in the political process as men, the economic potential that many envision for Africa will not be realized.

Investing in roads versus schools
Manoj Atolia, Bin Grace Li, Ricardo Marto and Giovanni Melina (VoxEU) Aug 9, 2017
Despite investment in education appearing to be a more pressing need in many developing countries, spending on roads often exceeds that on schools. This column argues that the different pace with which roads and schools contribute to economic growth is central to governments’ optimal allocation decision. Investment in schools tends to lead to a larger long-run increase in output, but the effects are more delayed than for investment in roads. This trade-off contributes to the bias towards roads, in particular when government concerns about debt sustainability and policymakers’ myopia are taken into consideration. Despite investment in education appearing to be a more pressing need in many developing countries, spending on roads often exceeds that on schools. This column argues that the different pace with which roads and schools contribute to economic growth is central to governments’ optimal allocation decision. Investment in schools tends to lead to a larger long-run increase in output, but the effects are more delayed than for investment in roads. This trade-off contributes to the bias towards roads, in particular when government concerns about debt sustainability and policymakers’ myopia are taken into consideration.

China’s Shadow Banking Sector: Wealth Management Products and Issuing Banks
Viral V. Acharya, Jun Qian and Zhishu Yang (VoxChina) Aug 9, 2017
Since the 2007–2009 financial crisis, an extensive strand of research has focused on how a shadow-banking sector has arisen in the financial system as a result of "regulatory arbitrage" by banks in the form of off-balance sheet activities or by non-banking entities that are entirely unregulated or lightly regulated compared to banks.

The Dual Role of China’s Stock Market: Capital Allocator and Platform for Global Diversification
Jennifer N. Carpenter and Robert F. Whitelaw (VoxChina) Aug 9, 2017
China is at a pivotal point for its future economic growth as the country attempts to transition from a state-controlled, investment-driven economy to one that is more market-oriented and consumption-driven. It is also at a critical point in its path to integration in global financial markets, as highlighted by the debate over the potential inclusion of China A shares in MSCI indices. The development of the financial system in general, and the stock market in particular, will likely play an instrumental role in both of these transitions.

Risks to the U.S. Economic Outlook from Foreign Trade
Jay Bryson (Wells Fargo) Aug 9, 2017
We forecast that real net exports will exert a modest drag on U.S. real GDP growth in coming quarters. Foreign economic growth that is stronger than expected would lessen the drag from the external sector.

Will Dollar Depreciation Lead to Higher Inflation?
Jay Bryson & Sam Bullard (Wells Fargo) Aug 9, 2017
The trade-weighted value of the U.S. dollar has fallen 7 percent this year. Although the weaker dollar could cause import prices to drift higher, it likely will have very little effect on rates of CPI inflation.

Trump’s Nafta negotiations set to be dogged by divisions
Jude Webber (FT) Aug 10, 2017
Mexico draws clear red lines on trade and tariffs as countries prepare to face off.

Nervy investors struggle to show love for EM’s quiet bull run
Jennifer Hughes (FT) Aug 10, 2017
Local investment playing bigger role and reducing importance of foreign fund flows.

China’s top-heavy recovery looks unsustainable
FT Confidential Research (FT) Aug 10, 2017
Growth may weaken again as housing market cools and commodities prices soften.

Make in India: Tax Reform as Job Creation
Simeon Djankov (PIIE) Aug 10, 2017
By 2050, at least 280 million young people will enter the job market in India. Yet India is losing 550 manufacturing and service jobs per day as it adopts new technologies. A new countrywide value-added tax that supersedes India's numerous indirect taxes may deliver over 10 million new jobs and temporarily alleviate pressure on the labor market.

China Leads Emerging Asia to Greater Role in Capital Markets
Luke Spajic (PIMCO) Aug 10, 2017
Over the next 12 to 24 months, we expect that Asia, led by China, will become a far more significant part of the global capital markets – and global investment portfolios.

Reform Loses a Champion in India
Mihir Sharma (Bloomberg View) Aug 10, 2017
Arvind Panagariya's departure seems to signal a retrenchment in New Delhi.

China's Markets Show Reforms Starting to Work
David Millhouse (Bloomberg View) Aug 10, 2017
Supply-side reform has the potential to make many industries more structurally sound for investors, rather than just a short-term trade.

There's Still Too Much Risk in the Financial System
Mohamed Aly El-Erian (Bloomberg View) Aug 10, 2017
For 10 years, central banks have done what they could to keep markets stable. Governments can't say the same.

Bond Bubbles Tend to Slowly Deflate, Not Burst
Ben Carlson (Bloomberg View) Aug 10, 2017
It’s unlikely that we'll see a crash in high-quality sovereign bonds in the same way that we would in stocks.

Why Some Banks Recover and Others Don't
Leonid Bershidsky (Leonid Bershidsky) Aug 10, 2017
The current approach to distressed banks is too focused on one-size-fits-all rules.

The Mexican Paradox
Santiago Levy and Dani Rodrik (Project Syndicate) Aug 10, 2017
After a series of macroeconomic crises in the mid-1990s, Mexico undertook bold reforms, from liberalizing its economic policies to investing in education. But, while these efforts brought some benefits, they failed to spur significant productivity and economic growth.

Awaiting the Construction Revolution
Nick Baveystock and Jan Mischke (Project Syndicate) Aug 10, 2017
For 20 years, productivity in the global construction industry has grown at an annual rate of just 1%. That must change, in order to meet increasing demand for new structures and address the world’s growing housing and infrastructure gaps.

Revenge of the Experts
Barry Eichengreen (Project Syndicate) Aug 10, 2017
Just prior to the Brexit referendum, then-UK justice secretary Michael Gove dismissed dire warnings of an economic meltdown following a "Leave" vote by stating, "The people of this country have had enough of experts." And, indeed, the experts seemed to have been proved wrong – until now.

The portfolio rebalancing effects of the ECB's asset purchase programme
Giovanna Bua and Peter Dunne (VoxEU) Aug 10, 2017
By the end of April 2017, the Eurosystem's balance sheet contained €1.8 trillion of assets, mainly as a consequence of asset purchase programmes. This column analyses the portfolio rebalancing effects of the ECB’s programme. The original holders of the assets eligible for purchase by the ECB mainly purchased bonds of deposit-taking corporations outside the Eurozone. Investment funds and their investors did not rebalance significantly toward Eurozone equities or corporate bonds. While exchange rate and cost of capital effects are positive outcomes from the programme, local rebalancing effects appear to be non-existent. By the end of April 2017, the Eurosystem's balance sheet contained €1.8 trillion of assets, mainly as a consequence of asset purchase programmes. This column analyses the portfolio rebalancing effects of the ECB’s programme. The original holders of the assets eligible for purchase by the ECB mainly purchased bonds of deposit-taking corporations outside the Eurozone. Investment funds and their investors did not rebalance significantly toward Eurozone equities or corporate bonds. While exchange rate and cost of capital effects are positive outcomes from the programme, local rebalancing effects appear to be non-existent.

Becoming Number One
Joseph Chamie and Barry Mirkin (YaleGlobal) Aug 10, 2017
India is poised to be the world’s most populous country for most of the 21st century, and preparation is required.

India at 70, and the Passing of Another Illusion
Pankaj Mishra (NYT) Aug 11, 2017
The new world order — just, peaceful, equal — that India’s leaders promised at independence is nowhere in sight.

China Takes On State-Owned Firms
Christopher Balding (Bloomberg View) Aug 11, 2017
A new directive suggests an ambitious effort under way.

Countries Like Macedonia Need a Protector
Tyler Cowen (Bloomberg View) Aug 11, 2017
The EU could make a big difference for a place with a rough past.

Macron's Missteps Could Prove Costly
Pascal-Emmanuel Gobry (Bloomberg View) Aug 11, 2017
If he's not careful, Emmanuel Macron will end up as Francois Hollande 2.0.

Greenspan's Legacy Explains Current Conundrums
Danielle DiMartino Booth (Bloomberg View) Aug 11, 2017
The former Federal Reserve chairman's focus on markets is making it tough for central bankers to pull back from extraordinary measures today.

The New World Order Is Leaving the U.S. Behind
James Gibney (Bloomberg View) Aug 11, 2017
American allies have decided Trump is simply not someone they can do business with.

Economists Lose Their Inflation-Forecasting Touch
Daniel Moss (Bloomberg View) Aug 11, 2017
Models show that prices ought to climb. Didn't happen in July. That's a problem.

Brexit Down on the Farm
Ngaire Woods (Project Syndicate) Aug 11, 2017
Brexit no doubt carries many risks, but it may also carry a key opportunity: the possibility of building a more efficient, innovative, world-leading agricultural industry. Unfortunately, British policymakers are not on track to seize it.

The Deficit Tango
Charles Wyplosz (Project Syndicate) Aug 11, 2017
Today, much of the world is fixated on current-account imbalances, with surplus countries demonized by deficit countries for supposedly hoarding demand, and deficit countries demonized by surplus countries for their supposed profligacy. But, while the preoccupation with imbalances is justified, the assumptions often underlying it are not.

Trilemma redux: Evidence from emerging market economies
Maurice Obstfeld, Jonathan D. Ostry and Mahvash S. Qureshi (VoxEU) Aug 11, 2017
The synchronous rise and fall of cross-border capital flows, domestic credit, and asset prices across countries has raised questions about the relevance of the exchange rate regime in a world of high capital mobility. This column presents evidence from emerging market economies, which shows that exchange rate regimes do matter. The transmission of global financial shocks to domestic financial and macro-economic conditions, as well as to capital flows, is magnified under fixed exchange rate regimes relative to more flexible regimes. The synchronous rise and fall of cross-border capital flows, domestic credit, and asset prices across countries has raised questions about the relevance of the exchange rate regime in a world of high capital mobility. This column presents evidence from emerging market economies, which shows that exchange rate regimes do matter. The transmission of global financial shocks to domestic financial and macro-economic conditions, as well as to capital flows, is magnified under fixed exchange rate regimes relative to more flexible regimes.

Colonial investments in education in India
Latika Chaudhary (VoxDev) Aug 11, 2017
Investment, enrolment and achievement in primary education in India lag the rest of Asia and Latin America – a crisis 150 years in the making.

Honduras experiments with charter cities
Economist Aug 12, 2017
The Central American country has a bold plan to attract investment. It is not going well/

Europe must seize this moment of opportunity
Agnès Bénassy-Quéré, Michael Hüther, Philippe Martin and Guntram B. Wolff (El Economista, Le Monde, Der Spiegel/Bruegel) Aug 12, 2017
As the EU enjoys a period of growth and relative stability, there is finally room to undertake long-needed reforms. But it is vital to act soon, and priorities must be set. There are three pillars of reform for the coming months: completing a robust euro area; building a coherent EU foreign policy; and harnessing the single market’s potential to deliver strong and inclusive growth.

Fix the housing crisis
Andrew Adonis (Prospect) Aug 12, 2017
There is a housing crisis in Britain. The government has tried to respond, but there is more it can do. Most importantly, it should start building houses again on public land.

Why the Federal Reserve’s job will get harder
Lawrence Summers (FT) Aug 13, 2017
Janet Yellen’s successor faces a series of political and economic challenges.

We Germans need to show more solidarity with Europe
Gesine Schwan (FT) Aug 13, 2017
How Merkel’s shortsightedness imperils the country’s long-term political security.

EU should welcome the UK back from Brexit like the prodigal son
Hugh Dixon (FT) Aug 13, 2017

It is crunch time for Donald Trump on trade
Shawn Donnan (FT) Aug 13, 2017
The president vowed to bring jobs back to the US by rewriting Nafta, but his pledge clashes with the realities of global commerce.

The curse of middle-aged capitalism
Robert J. Samuelson (WP) Aug 13, 2017
Young, innovative corporations dazzle while their older peers tread water; the disconnect does not bode well for the U.S. economy.

Japan’s economy extends its winning streak
FT View Aug 14, 2017
Monetary stimulus is having the desired effect on growth.

India at 70 is still experiencing growing pains
Gaurav Dalmia (FT) Aug 14, 2017
Public confidence in the machinery of government is low and policymaking is chaotic.

It is odd that money is not flowing to EM infrastructure
Henny Sender (FT) Aug 14, 2017
Time to re-examine assumption that investing in emerging markets is inherently risky.

Trump’s China Trade Sally
WSJ Aug 14, 2017
Beijing steals U.S. business IP, but tariffs could backfire.

At 70, India Shows a New Vigor
Tunku Varadarajan (WSJ) Aug 14, 2017
But its retreat from secularism is a worrying sign.

The U.S. trade deficit is a good thing. Really.
James Lankford (WP) Aug 14, 2017
Updating NAFTA makes sense, but using it to cut the trade gap through additional barriers and taxes on imports would hurt American workers and consumers.

Britain's Inexcusable Dithering Over Brexit
Bloomberg View Aug 14, 2017
Prime Minister Theresa May needs a plan. Now.

Why Isn't Modi Doing More?
Mihir Sharma (Bloomberg View) Aug 14, 2017
Even states his party controls aren't pursuing reforms.

Piketty Zeroes In on Putin's Pain Point
Leonid Bershidsky (Bloomberg View) Aug 14, 2017
The West should stop relying on sanctions and instead target Russia's massive offshore wealth.

The Stock-Market Rally Won't Last Without Some Help
Komal S Sri-Kumar (Bloomberg View) Aug 14, 2017
The Trump administration needs to deliver on a couple of its campaign promises.

We're Still Not Ready for the Next Banking Crisis
Mark Whitehouse (Bloomberg View) Aug 14, 2017
One chart says everything about how well the financial system will cope.

U.S. Needs China Trade Deals, Not 'Remedies'
Caroline Freund (Bloomberg View) Aug 14, 2017
Despite the strict entry rules to the Chinese market, U.S. companies can't pass up unrivaled growth prospects.

What the Black Death Taught Us About Immigration
Justin Fox (Bloomberg View) Aug 14, 2017
The economic argument for restricting low-skilled workers is not getting enough attention.

A Regulatory Race to the Bottom?
Alissa Amico (Project Syndicate) Aug 14, 2017
The United Kingdom's Financial Conduct Authority wants to relax listing conditions for state-owned issuers wishing to qualify for the London Stock Exchange Premium Listing Segment. But by offering valuable SOEs like Saudi Aramco preferential treatment, the FCA is putting institutional investors at serious risk.

Don’t blame the global financial cycle
Andrew Rose (VoxEU) Aug 14, 2017
Policymakers in small countries fear the ‘global financial cycle’ that is apparently driven by US fundamentals. This column argues, in contrast, that 25 years of financial data show that the global financial cycle has explained at most a quarter of the variation in capital flows in these countries. This result gives more wiggle room for small-economy policymakers, but it also means they cannot realistically blame the global financial cycle for domestic economic problems. Policymakers in small countries fear the ‘global financial cycle’ that is apparently driven by US fundamentals. This column argues, in contrast, that 25 years of financial data show that the global financial cycle has explained at most a quarter of the variation in capital flows in these countries. This result gives more wiggle room for small-economy policymakers, but it also means they cannot realistically blame the global financial cycle for domestic economic problems.

Financial globalisation and market volatility
Tito Cordella and Anderson Ospino (VoxEU) Aug 14, 2017
While some studies suggest that financial globalisation increases volatility and leads to economic instability, others appear to show that it leads to more efficient stock markets, with higher returns but no increase in volatility. Using a new measure of financial globalisation, this column argues that, on average, it has no significant effect on stock market volatility in developed markets, but it decreases volatility in emerging and frontier markets, where domestic shocks are likely to play a relatively greater role. While some studies suggest that financial globalisation increases volatility and leads to economic instability, others appear to show that it leads to more efficient stock markets, with higher returns but no increase in volatility. Using a new measure of financial globalisation, this column argues that, on average, it has no significant effect on stock market volatility in developed markets, but it decreases volatility in emerging and frontier markets, where domestic shocks are likely to play a relatively greater role.

The Case for Subsidizing Factories
Joshua Rothman (New Yorker) Aug 14, 2017
Should we start boosting manufacturing the same way we boost agriculture, education, health care, and finance?

The Natural Rate of Unemployment over the Past 100 Years
Regis Barnichon and Christian Matthes (FRBSF Econ Letter) Aug 14, 2017
The natural rate of unemployment, or u-star, is used by economists and policymakers to help assess the overall state of the labor market. However, the natural rate is not directly observable and must be estimated. A new statistical approach estimates the natural rate over the past 100 years. Results suggest the natural rate has been remarkably stable over history, hovering between 4.5 and 5.5% for long periods, even during the Great Depression. Recent readings on the unemployment rate have been running slightly below the natural rate estimate.

The Renegotiation of NAFTA
David Bartlett (EFR) Aug 14, 2017
Recent actions by the Trump Administration are altering the structure of international trade. In this article, the author examines the revamping of the North American Free Trade Agreement. Is an amicable renegotiation of NAFTA probable in the near future?

From Lenin to Lehman — the big lies
Martin Sandbu (FT) Aug 15, 2017
Those who want to save capitalism should note echoes of the Russian Revolution.

China’s economy is addicted to debt
Jamil Anderlini (FT) Aug 15, 2017
Beijing’s response to the financial crisis caused asset bubbles it has yet to tackle.

Britain shows only a glimmer of Brexit sense
FT View Aug 15, 2017
The UK has shown destructive ambivalence, not creative ambiguity.

The push for faster aid to developing countries
Oliver Ralph and John Aglionby (FT) Aug 15, 2017
Western governments believe insurance will help deliver relief more effectively. But some fear the policies do not cover the real risks.

Poor education leaves EMs vulnerable to automation shock
Sunny Varkey (FT) Aug 15, 2017
G7 must fund teaching so developing countries can survive the rise of robots.

What to watch in the Nafta renegotiations
Shawn Donnan and Jude Webber (FT) Aug 15, 2017
Trump faces steep political risks in rebalancing trade between US, Mexico and Canada.

China's Intellectual Property Theft Must Stop
Dennis C. Blair & Keith Alexander (NYT) Aug 15, 2017
Trump is right to crack down on a $600 billion drain on the American economy.

Trump asked China to rein in its unreasonable trade practices. It should.
Washington Post Aug 15, 2017
Beijing would be wise to respond constructively to the president’s order.

The Wage Paradox Explained
Wall Street Journal Aug 15, 2017
A new Fed study shows faster gains than official figures suggest.

China's Economic Outlook in Six Charts
IMF News Aug 15, 2017
China continues to enjoy strong growth—projected at 6.7 percent for 2017. And the country has potential to sustain strong growth over the medium term. But to do so safely requires speeding up reforms to make growth less reliant on debt and investment, the IMF said in its latest annual assessment of the economy.

How Central Banking Increased Inequality
Louis Rouanet (Mises Daily) Aug 15, 2017
Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. Focusing almost exclusively on consumer price inflation, many economists have overlooked the redistributive effects of money creation through other channels. One of these channels is asset price inflation and the growth of the financial sector.

Time to Run the U.S. Economy a Little Hot?
Joachim Fels (PIMCO) Aug 15, 2017
With inflation continuing to underwhelm, odds are growing that come September, the FOMC will throw in the towel on an additional rate hike this year.

Future of Work and the Survival of the Welfare State
Steven Hill (Globalist) Aug 15, 2017
More and more people are finding work in the digital economy, but more flexibility also means greater insecurity.

Trump's New China-Trade Mistake
Bloomberg View Aug 15, 2017
He has a point on intellectual property. But his solution is misguided.

Japan's Booming. Now It Needs More Immigrants.
Daniel Moss (Bloomberg View) Aug 15, 2017
Demographics don’t have to be destiny.

The Tragedy of India's Partition, 70 Years Later
Nisid Hajari (Bloomberg View) Aug 15, 2017
Hindus and Muslims weren’t destined to fight, despite their bloody history on the Indian subcontinent. The truth is something bleaker.

China's Yuan Face Much Tougher Road in Rest of 2017
Junheng Li (Bloomberg View) Aug 15, 2017
Tighter controls on capital outflows was bolstered by a less welcoming attitude towards Chinese foreign direct investment in Europe and the U.S.

How Technology Might Get Out of Control
Mark Buchanan (Bloomberg View) Aug 15, 2017
The pace of change may make regulation by humans impossible.

When Risk-Off Dominates Markets, Economies Usually Suffer
Ben Emons (Bloomberg View) Aug 15, 2017
When risk is not measurable, the distribution of possible outcomes is highly uncertain.

Fed Shouldn't View Productivity as an Exogenous Factor
Timothy A Duy (Bloomberg View) Aug 15, 2017
The current low-inflation environment offers the perfect opportunity to test whether looser monetary policy can boost productivity growth.

Old Ideas About Foreign Trade Are Being Retired
Noah Smith (Bloomberg View) Aug 15, 2017
New research shows that countries don't necessarily do best when they specialize in making a few things.

Britain’s Road to Perdition
Anatole Kaletsky (Project Syndicate) Aug 15, 2017
The British political establishment is now converging on a form of Brexit that will satisfy neither the "Leave" nor the "Remain" camp. With this depressing prospect setting in, some are starting to wonder what it would take for Britons to change their minds about leaving the European Union.

Mobility and growth in top and bottom incomes
Aart Kraay and Roy Van der Weide (VoxEU) Aug 15, 2017
Current approaches to measuring top and bottom incomes cannot track the fortunes of the same group of individuals over time. This column addresses this shortcoming by developing a new method for measuring income mobility. After accounting for mobility, the incomes of those who start out rich grow considerably more slowly, and incomes of those who start out poor grow faster, compared to commonly reported growth rates of top and bottom incomes. Current approaches to measuring top and bottom incomes cannot track the fortunes of the same group of individuals over time. This column addresses this shortcoming by developing a new method for measuring income mobility. After accounting for mobility, the incomes of those who start out rich grow considerably more slowly, and incomes of those who start out poor grow faster, compared to commonly reported growth rates of top and bottom incomes.

Why Trump’s protectionist trade agenda will fail
Hugo Erken, Philip Marey and Maartje Wijffelaars (VoxEU) Aug 15, 2017
Since taking office, US President Donald Trump has been an increasingly vocal proponent of protectionist measures. This column presents five reasons why he is unlikely to resort to full-blown protectionism: political motivations, WTO membership, the possibility of retaliation, the existence of global value chain integration and revenue streams, and the fact that automation rather than trade has caused most job losses in the US. If Trump does resort to protectionism, however, and other countries retaliate, US GDP could face cumulative losses of up to 4.5% over two years. Since taking office, US President Donald Trump has been an increasingly vocal proponent of protectionist measures. This column presents five reasons why he is unlikely to resort to full-blown protectionism: political motivations, WTO membership, the possibility of retaliation, the existence of global value chain integration and revenue streams, and the fact that automation rather than trade has caused most job losses in the US. If Trump does resort to protectionism, however, and other countries retaliate, US GDP could face cumulative losses of up to 4.5% over two years.
The United States has teetered on the brink of catastrophe before. It's time to rebuild again.

Q: What G-7 Economy Had Fastest GDP Growth in Q2? A: Japan
Tim Quinlan (Wells Fargo) Aug 15, 2017
A better-than-expected GDP report for the second quarter extends Japan's longest winning streak in a decade but it does not mean that the BoJ is ready to join other major central banks in dialing back accommodation.

It’s Time to Found a New Republic
Daron Acemoglu and Simon Johnson (FP) Aug 15, 2017

Tariffs would put US solar power in the shade
FT View Aug 16, 2017
Cheap imported panels have created a vibrant industry in America.

State support has a downside for China’s tech titans
Jamil Anderlini (FT) Aug 16, 2017
Some big companies have grown complacent under government protection.

Nothing like this has happened in 323 years
Martin Wolf (FT) Aug 16, 2017
Financial Times columnists pick their charts of the credit crisis on the decade anniversary.

EM rally seen rolling on as valuations remain sound
Steve Johnson (FT) Aug 16, 2017
Few worried by danger of China crisis or renewed dollar strength.

Investors should be wary of overvalued US stocks
John Authers (FT) Aug 16, 2017
Assumption that recent past will continue indefinitely is easy to make and perilous.

The perils of calling the peak of the equities bull run
Dan McCrum (FT) Aug 16, 2017
By many measurements, today’s stock markets are overvalued but investors are struggling to work out when or if a crash will come.

Britain’s Brexit Flights of Fancy
Wall Street Journal Aug 16, 2017
Why not imagine a more liberal economy instead of better red tape?

How to Take On China Without Starting a Trade War
James Bacchus (WSJ) Aug 16, 2017
On intellectual property, Washington has a strong case against Beijing at the World Trade Organization.

America’s Got Talent, but Not Nearly Enough
Edward Conard (WSJ) Aug 16, 2017
Trump is right to back skills-based immigration. But fewer green cards would defeat the purpose.

Nearly All US Trade Deals Were Negotiated, Signed, and Implemented by Republicans
Jeffrey J. Schott and Melina Kolb (PIIE) Aug 16, 2017
Contrary to an assertion made by President Trump on August 14, 2017, that Democrats were responsible for “some of the worst trade deals in World History,” almost all US free trade agreements were advanced by Republican administrations.

Fed Balance Sheet Tapering: We Gotta Have Faith
Richard Clarida (PIMCO) Aug 16, 2017
While there is no additional hint in the July Fed minutes that the FOMC has agreed to make a balance sheet announcement in September, that continues to be the most likely outcome.

No Room for Error: A Misstep in Creating an Alternative to Libor Could Be Costly to Investors
William G. De Leon and Courtney A. Walker (PIMCO) Aug 16, 2017
Banks have voluntarily agreed to sustain Libor (London Interbank Offered Rate) until the end of 2021, but plans are not yet concrete for an alternative benchmark. Given the considerable use of Libor in determining interest payments for securities and derivatives globally, we expect banks will voluntarily administer the benchmark until an alternative is firmly in place. It is possible, however, that at some point in the future banks elect not to continue reporting Libor. Regulators and industry participants should be prepared for all plausible scenarios. PIMCO believes that a transition to another benchmark should be carefully managed and occur only when critical elements are in place, including sufficient liquidity in the alternative. Our greatest concern is that a transition that is not well-scripted threatens to favor certain market participants over others.

Rebranding Nafta
Bloomberg View Aug 16, 2017
The trade alliance can be improved -- but the main thing is not to destroy it.

The Imaginary Debt Crisis Is Here to Stay
Barry L Ritholtz (Bloomberg View) Aug 16, 2017
Household borrowing has reached new records. Big deal. Personal income has grown much more.

The Fed Is Asking Questions, Not Providing Answers
Daniel Moss (Bloomberg View) Aug 16, 2017
It would be cause for concern if policy makers acted too confident. The economy is not following models.

China's Rising Debt Unnerves the IMF. The Alternative Is Worse.
Daniel Moss (Bloomberg View) Aug 16, 2017
With debt three times as large as GDP, the nation will represent a huge global risk. Anything less would be a risk as well.

The Energy Revolution Will Be Optimized
Liam Denning (Bloomberg View) Aug 16, 2017
As technology and greater efficiency dramatically change America's energy mix, how does a once-wood-powered country adapt for the future?

U.S. Natural Gas Market Sees Big Benefits From Nafta
Shelley Goldberg (Bloomberg View) Aug 16, 2017
Nafta has been a boon to the U.S. energy sector and to employment.

Planning for Korean Reunification
Lee Jong-Wha (Project Syndicate) Aug 16, 2017
Like the fall of the Berlin Wall, a collapse of Kim Jong-un's regime in North Korea could happen quite suddenly. To prepare for that contingency, the United States and South Korea need to assure China that a reunified Korea would not be its enemy, and that American troops would not suddenly be stationed on its border.

The End of Asia’s Strategic Miracle?
Richard N. Haass (Project Syndicate) Aug 16, 2017
Asia's contemporary "economic miracle" rests on the fact that relative peace and order have been maintained in the region since the end of the Vietnam War. But the factors underpinning that stability have started to give way, which poses a serious threat to not just Asia, but the entire world.

Is Trump Killing the Dollar?
Benjamin J. Cohen (Project Syndicate) Aug 16, 2017
For nearly a century, the US dollar has been viewed as the financial world’s ultimate safe haven. But after 200 days of chaos under US President Donald Trump, the value of the dollar has declined, and global investors and central banks have begun to look for alternatives in other markets.

Missing growth
Philippe Aghion, Antonin Bergeaud, Timo Boppart, Peter Klenow and Huiyu Li (VoxEU) Aug 16, 2017
Slowing growth of total factor productivity has led some to suggest that the world is running out of ideas for innovation. This column suggests that the way output is measured is vital to assessing this, and quantifies the role of imputation in output measurement bias. By differentiating between truly ‘new’ and incumbent products, it finds missing growth in the US economy. Accounting for this missing growth will allow statistical offices to improve their methodology and more readily recognise the ready availability of new ideas, but also has implications for optimal growth and inflation targeting policies. Slowing growth of total factor productivity has led some to suggest that the world is running out of ideas for innovation. This column suggests that the way output is measured is vital to assessing this, and quantifies the role of imputation in output measurement bias. By differentiating between truly ‘new’ and incumbent products, it finds missing growth in the US economy. Accounting for this missing growth will allow statistical offices to improve their methodology and more readily recognise the ready availability of new ideas, but also has implications for optimal growth and inflation targeting policies.

NAFTA Talks Off to a Rocky Start
Jesse Chase-Lubitz (FP) Aug 16, 2017
NAFTA negotiations, which began Wednesday, are off to a rocky start.

German Car Companies Are Driving the Country Off a Cliff
Bernhard Rieger (FP) Aug 16, 2017
German car companies are driving the country off a cliff.

From the Trans-Atlantic Axis and the Trans-Asian Axis
Dan Steinbock (WFR) Aug 16, 2017
The ASEAN faces old and new challenges, and a huge long-term opportunity. The next three decades could witness the shift of global economic momentum from the Trans-Atlantic axis to the Trans-Asian axis.

Trump Says He Wants Fairer Trade with China. Will His Latest Move Work?
Wendy Cutler, Susan Shirk, James McGregor, Arthur Kroeber & Laura Wen-yu Young (ChinaFile) Aug 16, 2017
Donald Trump signed an executive order requesting that the United States Trade Representative begin a review to determine wether the U.S. should investigate China over unfair practices involving intellectual property, the eventual result of which could be to give the President a freer hand in retaliating. What are the most likely impacts of the memorandum for both U.S. businesses and for the state of the bilateral trade relationship?

The Next Quant Meltdown
Michelle Celarier (II) Aug 16, 2017
Fund managers who survived the quant bloodbath of August 2007 say the strategy is safer ten years later. But with its popularity soaring to new heights, some wonder whether crowded trades---and rising leverage---will lead to another downfall.

How Blockchain Could Shape International Trade
Rebecca Liao (FA) Aug 16, 2017
Financing the supply chain.

Digital platforms force a rethink in competition theory
Diane Coyle (FT) Aug 17, 2017
Economists need to provide regulators with tools to deal with market concentration.

Efficiency eludes the construction industry
Economist Aug 17, 2017
Builders have resisted investment and consolidation. Little wonder the construction industry has the world’s worst record on productivity

Brazil’s fight against corruption sets a good example to the world
Marcos Troyjo (FT) Aug 17, 2017
The damage caused by the Car Wash probe pales in comparison to the ills it cures.

When renegotiating NAFTA, Trump should re-evaluate claims on trade
Dany Bahar (Brookings) Aug 17, 2017
President Trump claims the North American Free Trade Agreement—currently up for renegotiation—is responsible for U.S. job losses and a growing trade deficit. Dany Bahar explains why deficits don’t tell the full story, and shares what the president should focus on instead.

The Term Structure of Interest Rates and Macrofinancial Dynamics
Tobias Adrian (IMF) Aug 17, 2017
I lay out a path to modeling macrofinancial dynamics using a recent approach that I have worked on, and illustrate the usefulness of this avenue with a term structure application.

China: When Atlas Shrugs, Markets Shiver
Gene Frieda (PIMCO) Aug 17, 2017
The use of credit to fuel growth in China is weakening, a trend that has begun to depress demand for imports.

Bank of England's Caution Is Justified. What Happens When It Isn't?
Daniel Moss (Bloomberg View) Aug 17, 2017
The textbooks would say to raise interest rates. Mark Carney is going off script.

Good Reasons to Dismiss Market Fears, For Now
Mohamed Aly El-Erian (Bloomberg View) Aug 17, 2017
Short-term shocks -- even nuclear threats -- don’t worry investors.

How the Next Quant Fund Crisis Will Unfold
Aaron Brown (Bloomberg View) Aug 17, 2017
Institutional quant hedge funds have addressed the risk issues that caused 2007 losses, but the newer retail products cannot.

A Development Investment for the Ages
Bjørn Lomborg (Project Syndicate) Aug 17, 2017
Malnutrition receives less attention than most of the world’s other major challenges, yet it is one area where a relatively small investment can make the biggest difference. As both a cause and an effect of poverty, malnutrition it part of a cruel cycle that can last for generations on end.

The Lost Lesson of the Financial Crisis
Mohamed A. El-Erian (Project Syndicate) Aug 17, 2017
When the global financial crisis began ten years ago this month, policymakers in advanced economies treated it as a cyclical shock rather than an epochal event. Because they misdiagnosed the sickness, they administered the wrong medicine, and advanced economies have struggled to achieve strong, inclusive growth ever since.

The LiTS survey: A decade of measuring transition
Cevat Giray Aksoy, Francesca Dalla Pozza, Ralph De Haas (VoxEU) Aug 17, 2017
Since the fall of the Iron Curtain in 1989, post-communist countries have experienced an overhaul of their economic and political institutions. This column highlights five core messages from the most recent Life in Transition Survey, which is conducted periodically by the EBRD and the World Bank to monitor how the transition process impacts people’s perceptions and attitudes. Understanding the process is important as personal experiences largely determine whether people (continue to) support the economic and political institutions that underpin their society. Since the fall of the Iron Curtain in 1989, post-communist countries have experienced an overhaul of their economic and political institutions. This column highlights five core messages from the most recent Life in Transition Survey, which is conducted periodically by the EBRD and the World Bank to monitor how the transition process impacts people’s perceptions and attitudes. Understanding the process is important as personal experiences largely determine whether people (continue to) support the economic and political institutions that underpin their society.

India's Tax Reform
Praveen Chakravarty (FA) Aug 17, 2017
The GST is an important, limited first step.

Politics Block Solution as Mounting Debt Threatens China
Chris Miller (YaleGlobal) Aug 17, 2017
China’s leaders fail to tamp down corporate debt levels or expectations of government bailouts

China Steps Up Warnings Over Debt-Fueled Overseas Acquisitions
Sui-Lee Wee (NYT) Aug 18, 2017
The announcement by China’s cabinet is the strongest signal yet that Beijing wants to rein in runaway debt that could pose a threat to its economy.

We Need Immigrants With Skills. But Working Hard Is a Skill.
Jeff Flake (NYT) Aug 18, 2017
Manuel didn't speak much English. He didn't have a degree. But America needs more people like him.

Are Stock Valuations Overstretched?
William R. Cline (PIIE) Aug 18, 2017
With stock indices close to all-time highs and unprecedented monetary stimulus in recent years, it is reasonable to ask whether the US economy has reached a potentially dangerous phase of excessive financial exuberance and of overvaluation in the stock market in particular.

How Big is the Transfer Pricing Prize for Development?
Maya Forstater (CGD) Aug 18, 2017
It is often stated that developing countries are “haemorrhaging billions of dollars” of tax revenues through companies abusing transfer pricing, in particular by mispricing commodities.There is no doubt that companies can take advantage of weak regulations and enforcement, but new studies based on microdata from revenue authorities suggest the scale of revenues that might be recovered is unlikely to match up to heightened popular expectations.

US exports are on the decline
Joseph Parilla and Nick Marchio (Brookings) Aug 18, 2017
A new analysis examines trends across 381 U.S. metropolitan areas and finds that exports did not drive significant growth in most parts of the country in 2016, while the export of services continues to make up an increasingly larger share of overall exports, compared to manufactured goods.

A Tale of Two "Deflationary" Booms — The Gilded Age vs. Today
Brendan Brown (Mises Daily) Aug 18, 2017
The forces of globalization during the past two decades have been stronger than at any time since the era of “the Great Deflation” which started in the aftermaths of the US Civil War and the Franco-Prussian War, and continued through the 1880s. During the earlier period, the US economy enjoyed record growth in prosperity. But, during the present era of globalization, the US and most advanced economies have grown fitfully and overall slowly. An obvious question is whether that divergence in outcomes is due to the very different monetary environments

The Guardian of the Liberal World Order
Ana Palacio (Project Syndicate) Aug 18, 2017
The global financial crisis, which began ten years ago this month, showed that the Western-led rules-based international order’s long-term survival is not inevitable. Should that system collapse, nobody stands to lose more than Europe, which has long thrived on cooperation, and suffered under competition.

The Clash of the Data Titans
Christopher Smart (Project Syndicate) Aug 18, 2017
Most economic activity today depends on data, much of it gathered and analyzed across borders. And yet the European and American policymakers now deciding the rules on how data should be exchanged and stored are focusing more on privacy considerations and national-security concerns than on efficiency and innovation.

Online exports and the wage gap
Marcio Cruz, Emmanuel Milet and Marcelo Olarreaga (VoxEU) Aug 18, 2017
The reduction in the cost of exporting offered by international transactions over the internet helps small firms in developing countries reach consumers all over the world. This column argues that this bias in favour of small firms has an impact on labour markets, as small firms tend to hire unskilled workers disproportionately. By levelling the playing field between small and large firms in terms of access to international markets, online trade can contribute to reducing wage and, ultimately, income inequality. The reduction in the cost of exporting offered by international transactions over the internet helps small firms in developing countries reach consumers all over the world. This column argues that this bias in favour of small firms has an impact on labour markets, as small firms tend to hire unskilled workers disproportionately. By levelling the playing field between small and large firms in terms of access to international markets, online trade can contribute to reducing wage and, ultimately, income inequality.

Fast internet and employment in Africa
Jonas Hjort (VoxDev) Aug 18, 2017
Local employment effects of fast internet connections show that ICT might be one of the most effective employment-creating policies in Africa

Hong Kong presents a test of China’s good faith
FT View Aug 20, 2017
Beijing would be wrong to assume that its clampdown carries no cost.

Britain’s Brexit transition plan leaves questions hanging 
Bronwen Maddox (FT) Aug 20, 2017
The UK’s preferred route out has not been on offer from the EU and may never be.

How Trump is enabling famine
Jackson Diehl (WP) Aug 20, 2017
The president’s love for the despotic regimes of Saudi Arabia and the United Arab Emirates is perpetuating the crisis.

Trump’s right about one thing on trade
Robert J. Samuelson (WP) Aug 20, 2017
China’s pillage of American intellectual property is a threat to national security as well as the economy.

The Moral Duty of the Elites
Dirk Helbing (Globalist) Aug 20, 2017
It is the moral duty of the elite to avert global disaster.

The impact of demographics on long-term discount rates
Eli P Fenichel, Matthew Kotchen and Ethan T Addicott (VoxEU) Aug 20, 2017
How the future is discounted in cost-benefit analyses is a contested issue, with economists disagreeing on whether approaches to discounting should be prescriptive or descriptive. This column presents a new way to model individuals’ discounting based on a demographic approach. The advantages of a purely mortality-based approach are transparency, an empirical basis, and broad data availability. How the future is discounted in cost-benefit analyses is a contested issue, with economists disagreeing on whether approaches to discounting should be prescriptive or descriptive. This column presents a new way to model individuals’ discounting based on a demographic approach. The advantages of a purely mortality-based approach are transparency, an empirical basis, and broad data availability.

Brexit free-trade illusions from the 19th century
Alan Beattie (FT) Aug 21, 2017
Regulations have become more important than tariffs.

Why emerging markets’ ‘Fragile Five’ aren’t quite so fragile
Steve Johnson (FT) Aug 21, 2017
Repeat of 2013’s EM ‘taper tantrum’ looks less likely as current account deficits improve.

Globalisation in retreat: capital flows decline since crisis
Shawn Donnan (FT) Aug 21, 2017
The volume of funds crossing borders has fallen sharply and long-term investment is playing a bigger role. But is the system more resilient?

Lighthizer’s Economics Deficit
WSJ Aug 21, 2017
What does the Trump trade rep have against the U.S. car industry?

Canada Makes a Mockery of a Trade Deal
Michael Taube (WSJ) Aug 21, 2017
The Liberals want to expand Nafta to cover ‘gender rights’ and ‘indigenous rights.’

Predictions on How NAFTA Talks Will Go
Gary Clyde Hufbauer and Euijin Jung (PIIE) Aug 21, 2017
Here are four scenarios for how NAFTA talks will proceed.

The Dark Side of China's Tech Boom
Eugene K. Chow (Diplomat) Aug 21, 2017
China’s tech giants are helping the state build a digital panopticon.

Part II: Rethinking the World Economy: From Push to Pull
Dirk Helbing (Globalist) Aug 21, 2017
If we changed our throw-away society, there would be enough resources for everyone.

Private Equity Will Do a Lot of Good for Japan Inc.
Noah Smith (Bloomberg View) Aug 21, 2017
The country's hidebound business world is in need of a shakeup.

China Bank Bears Must Brace for Disappointment
David Millhouse (Bloomberg View) Aug 21, 2017
The government's efforts to stem nonperforming loans may already be paying dividends.

Europe’s Central Bank Needs a Little Zen
Daniel Moss (Bloomberg View) Aug 21, 2017
Officials can decide when and how to taper their stimulus, but they can't control how the euro responds.

Stock Returns, Like Politics, Are Not Normal
Dean C Curnutt (Bloomberg View) Aug 21, 2017
There are two primary reasons for the protracted decline in both implied and realized volatility.

The Next Fed Chair Won't Really Control the Fed
Daniel Moss (Bloomberg View) Aug 21, 2017
The institution is constrained by far more voices than it used to be, from inside and out.

China’s Renewable-Energy Revolution
Jiang Kejun and Jonathan Woetzel (Project Syndicate) Aug 21, 2017
China is increasingly at the center of an energy- and resource-sector transformation, fueled by technological change and the falling cost of renewable-energy sources. As a result, the country is on a path toward becoming a major source of both energy demand and the cutting-edge technologies needed to meet that demand.

Forecasting China's Role in World Oil Demand
Deepa D. Datta and Robert J. Vigfusson (FRBSF Econ Letter) Aug 21, 2017
Although China’s growth has slowed recently, the country’s demand for oil could be entering a period of faster growth that could result in substantially higher oil prices. Because Americans buy and sell oil and petroleum products in the global market, global demand prospects influence the profitability of U.S. oil producers and the costs paid by U.S. consumers. Analysis based on the global relationship between economic development and oil demand illustrates the prospects for Chinese oil demand growth and the resulting opportunities and challenges for U.S. producers and consumers.

Is the World at Risk of the “Japan Disease”?
Various (TIE) Aug 21, 2017
Scholars and experts are wrestling to define the nature of globalization in the twenty-first century. To what extent can the global picture of 2017 be described in one sentence: Significant parts of the world are at risk of becoming more like Japan. In other words, the world’s public and private debt today is approaching 300 percent of GDP. Yet despite an extraordinary degree of monetary expansion and relatively tight labor markets, a number of central bankers are finding it tough to meet their inflation targets. Meanwhile, wage growth remains modest. Productivity growth gains are disappointing as Japan has done in recent years, some central bank authorities, including those in China, are purchasing equities to stabilize stock markets. Has the world been afflicted with a kind of “Japan disease”? Or is the current global environment a temporary development? Or is Japan doing better economically than advertised? If a negative Japan-like scenario is a risk for significant parts of the world, what policy steps would potentially lead to the avoidance of such a scenario?

Don’t Downsize the Fire Brigade!
Desmond Lachman (TIE) Aug 21, 2017
The world’s toxic combination of massive debt, mispricing of that debt, and other serious fault lines makes the International Monetary Fund more needed than ever.

How to Fight Anti-Trade Populism
Richard Katz and C. Fred Bergsten (TIE) Aug 21, 2017
About the populist backlash against globalization.

Focus on financial risk puts China on a more sustainable path
Nicholas Lardy (FT) Aug 22, 2017
The leadership seems to accept slower growth as price of moderate credit expansion.

Politics motivates Silvio Berlusconi’s parallel currency idea
Tony Barber (FT) Aug 22, 2017
Italy’s former leader seeks to rebuild a rightwing coalition.

China still hungry for foreign exchange despite stronger renminbi
FTCR Aug 22, 2017
Capital controls may have fuelled household demand for foreign exchange.

Emmanuel Macron’s hopes of a grand euro bargain are misplaced
Martin Sandbu (FT) Aug 22, 2017
French president risks undermining his programme for economic reform at home.

Of Major Economies, Only the US Faces Sizable Rise in Public Debt Burden
William R. Cline and Melina Kolb (PIIE) Aug 22, 2017
Are major economies threatened by debt crises in the coming years? This PIIE Chart suggests that most should be safe, but that the United States faces the largest prospective increase in the burden of public debt, sitting alone at the unfavorable northeast corner of the chart.

Why China Is Curbing Outbound Direct Investment
Zixuan Huang and Heiwai Tang (PIIE) Aug 22, 2017
In June, China’s financial regulator requested banks to investigate several large enterprises actively engaged in overseas investment. The most notable is Dalian Wanda, China’s largest private property developer.

Part III: A New Social Contract
Dirk Helbing (Globalist) Aug 22, 2017
It is time to work out a new social contract that allows everyone to lead a proper life and determine it to a larger extent.

The Unintended Consequences of Quantitative Easing
Jean-Michel Paul Aug 22, 2017
Asset inflation doesn’t have to be bad. Flush governments could invest in education and infrastructure.

Commodities Outlook Dims as Trump Disbands Councils
Shelley Goldberg (Bloomberg View) Aug 22, 2017
Although not stellar, commodities have shown decent support ever since it became clear that Trump had a shot at the White House.

The Achilles Heel of Putin’s Regime
Anders Åslund (Project Syndicate) Aug 22, 2017
Russia’s crony capitalism is weaker than it seems. In fact, President Vladimir Putin’s consolidation of power has created a major potential threat to his authority, because the lack of credible property rights forces senior Russian officials and oligarchs to hold their money abroad.

Japan’s “Land of Opportunity”
Hiroshi Mikitani (Project Syndicate) Aug 22, 2017
Donald Trump's policies on immigration and foreign investment in the United States have striking parallels to Japan’s historic aversion to welcoming outsiders. But as the US moves to close its doors, Japan must go in the other direction, by creating an alternative land of opportunity for talent fleeing the West.

The productivity slowdown is even more puzzling than you think
David Byrne and Dan Sichel (VoxEU) Aug 22, 2017
One explanation given for the apparent recent slowdown in labour productivity growth in advanced economies is poor measurement. This column argues that while the available evidence on mismeasurement does not in fact provide an explanation for the slowdown, innovation is much more rapid than would be inferred from official measures, and on-going gains in the digital economy make the productivity slowdown even more puzzling. At the same time, this continued technical advance could provide the basis for a future pickup in productivity growth. One explanation given for the apparent recent slowdown in labour productivity growth in advanced economies is poor measurement. This column argues that while the available evidence on mismeasurement does not in fact provide an explanation for the slowdown, innovation is much more rapid than would be inferred from official measures, and on-going gains in the digital economy make the productivity slowdown even more puzzling. At the same time, this continued technical advance could provide the basis for a future pickup in productivity growth.

The Trump doctrine on international trade: Part one
William Nordhaus (VoxEU) Aug 22, 2017
President Trump’s doctrine on trade represents a radical break with previous US policy. This column, the first of two examining the Trump doctrine, argues that he embraces fallacies as facts, and that the efforts to reform tax are flawed and will make tax law more complex. If enacted, the Auerbach-Ryan Tax Plan would be a mechanism by which the US government collects taxes to benefit rich citizens at the expense of the country's trading partners. President Trump’s doctrine on trade represents a radical break with previous US policy. This column, the first of two examining the Trump doctrine, argues that he embraces fallacies as facts, and that the efforts to reform tax are flawed and will make tax law more complex. If enacted, the Auerbach-Ryan Tax Plan would be a mechanism by which the US government collects taxes to benefit rich citizens at the expense of the country's trading partners.

Arm’s-length trade: A source of post-crisis trade weakness
Csilla Lakatos and Franziska Ohnsorge (VoxEU) Aug 22, 2017
Trade growth has slowed sharply since the Global Crisis. Using a unique dataset on US trade, this column argues that arm’s-length trade between unaffiliated firms, as opposed to intra-firm trade between firms linked by control or ownership, accounts disproportionately for the overall post-Crisis trade slowdown. Trade growth has slowed sharply since the Global Crisis. Using a unique dataset on US trade, this column argues that arm’s-length trade between unaffiliated firms, as opposed to intra-firm trade between firms linked by control or ownership, accounts disproportionately for the overall post-Crisis trade slowdown.

Reality dawns on Britain over the ECJ’s post-Brexit role
David Allen Green (FT) Aug 23, 2017
The government is yet to take tough decisions on the future relationship it wants.

Angola has potential, if only it could realise it
David Pilling (FT) Aug 23, 2017
In theory it is an upper middle-income country, but social indicators lag ruinously.

EM debt investors keep a wary eye on the Fed
Aug 23, 2017
Local bonds are outperforming as their currencies stay strong against the dollar.

Has the time come for prudence over stellar run in EM assets?
Kate Allen (FT) Aug 23, 2017
Korea and S Africa require particular caution as risk is concentrating in only a few markets, says CBC.

China reform plans could be stifled as economy cools
George Magnus (FT) Aug 23, 2017
The risk of a financial system funding shock will be more advanced if policy eased.

China announces new investment rules
David Dollar (Brookings) Aug 23, 2017
China’s motivations for placing new restrictions on how its companies invest abroad as well as the possible effects on the U.S. and global economies.

Part IV: Upgrading Today’s Capitalism
Dirk Helbing (Globalist) Aug 23, 2017
Capitalism in its current form is neither fair nor sustainable.

Aging Japan Wants Automation, Not Immigration
Daniel Moss (Bloomberg View) Aug 23, 2017
A labor shortage could fuel the nation's next innovation boom.

The Lowflation Demon That Vexes Central Banks
Mohamed Aly El-Erian (Bloomberg View) Aug 23, 2017
It has complicated monetary policy decisions and undermined the range of institutional solutions.

Central Banks Need to End QE for the Sake of Markets
Alberto Gallo (Bloomberg View) Aug 23, 2017
Coordination is needed to remove easy money policies, but that's hard in a world with asynchronous economic cycles.

The Shape of the Phillips Curve Should Worry Markets
Ben Emons (Bloomberg View) Aug 23, 2017
Inflation may not be as stable as generally believed, and the bigger risk may be disinflation.

The EU and U.S. Want to Change the Rules of the Bond Market
Mark Grant (Bloomberg View) Aug 23, 2017
European officials think voters are more important than the institutions that buy their bonds, but that's a costly error.

China's Future, Reshaped by Robots
Tom Orlik (Bloomberg View) Aug 23, 2017
Automation may upend the prevailing wisdom.

Experts and Inequality
Kaushik Basu (Project Syndicate) Aug 23, 2017
When the economist and investor Sir William Petty was tasked with surveying large swaths of army land, much of which lay fallow, in seventeenth-century Ireland, he ended up personally owning much of it. The "Petty problem" is alive and well today.

Margins of labour market adjustment to trade
Rafael Dix-Carneiro and Brian Kovak (VoxEU) Aug 23, 2017
The effects of foreign competition have been shown to vary substantially across regions within a country. Using administrative and household survey data from Brazil, this column examines the various margins of adjustment in response to trade-induced regional shocks. The results demonstrate a key role for the non-tradable sector and informal employment in the adjustment process. The effects of foreign competition have been shown to vary substantially across regions within a country. Using administrative and household survey data from Brazil, this column examines the various margins of adjustment in response to trade-induced regional shocks. The results demonstrate a key role for the non-tradable sector and informal employment in the adjustment process.

The Trump doctrine on international trade: Part two
William Nordhaus (VoxEU) Aug 23, 2017
The change in the structure of global supply has important implications for US President Donald Trump as he contemplates tearing up existing international trade deals. This column argues that he risks destroying the fruits of almost 100 years of global trade cooperation, the benefits of which to citizens in the US far outweigh the costs. This spirit of cooperation is also the basis for coordinated global action on issues such as climate change. The change in the structure of global supply has important implications for US President Donald Trump as he contemplates tearing up existing international trade deals. This column argues that he risks destroying the fruits of almost 100 years of global trade cooperation, the benefits of which to citizens in the US far outweigh the costs. This spirit of cooperation is also the basis for coordinated global action on issues such as climate change.

Populism and trust in Europe
Christian Dustmann, Barry Eichengreen, Sebastian Otten, André Sapir, Guido Tabellini and Gylfi Zoega (VoxEU) Aug 23, 2017
Recent years have seen a decline in trust in established political institutions and parties and a surge in support for populist movements and policies, not least in Europe where scepticism and, in some places, outright hostility towards the European Union is evident. This column introduces the first report in CEPR’s Monitoring International Integration series, which analyses the roots of the decline in trust in both national and European political institutions and asks whether, as a result of these developments, the EU is at risk of disintegration.

Europe's Trust Deficit: Causes and Remedies
Christian Dustmann, Barry Eichengreen, Sebastian Otten, André Sapir, Guido Tabellini and Gylfi Zoega (VoxEU) Aug 23, 2017
This first report in the Monitoring International Integration series identifies economic and social characteristics associated with Europe’s growing trust deficit in some EU countries, as well as factors associated with support for non-mainstream political parties and movements labelled as 'anti-EU'. This first report in the Monitoring International Integration series identifies economic and social characteristics associated with Europe’s growing trust deficit in some EU countries, as well as factors associated with support for non-mainstream political parties and movements labelled as 'anti-EU'.

Investment and growth in advanced economies: Selected takeaways from the ECB’s Sintra Forum
Vítor Constâncio, Philipp Hartmann and Peter McAdam (VoxEU) Aug 23, 2017
The European Central Bank’s 2017 Sintra Forum on Central Banking built a bridge from the currently strengthening recovery in Europe to longer-term growth issues for, and structural change in, advanced economies. In this column the organisers highlight some of the main points from the discussions, including what the sources of weak productivity and investment are and what type of economic polarisation tendencies the new growth model seems to be associated with. The European Central Bank’s 2017 Sintra Forum on Central Banking built a bridge from the currently strengthening recovery in Europe to longer-term growth issues for, and structural change in, advanced economies. In this column the organisers highlight some of the main points from the discussions, including what the sources of weak productivity and investment are and what type of economic polarisation tendencies the new growth model seems to be associated with.

The Decline of the Western Tourist
Afshin Molavi (FP) Aug 23, 2017
Citizens of China, India, and other emerging markets are traveling for pleasure in ever greater numbers — and the rest of the world is competing for their money.

In Policy Reversal, U.S. Withholds Aid to Egypt
Emily Tamkin (FP) Aug 23, 2017
The United States is withholding aid from Egypt, an abrupt about-face for an administration that had signaled previously it would support Egypt regardless of its dismal human rights record.

Threat of infectious disease outbreaks haunts Africa
Jakaya Kikwete (FT) Aug 24, 2017
Strong childhood immunisation programmes needed as urbanisation gathers pace.

The most consequential question facing the world
E.J. Dionne Jr. (WP) Aug 24, 2017
If liberal democracy does not survive and thrive, every other problem we face becomes much more difficult.

Is the stock market crazy — or just giddy?
Robert J. Samuelson (WP) Aug 24, 2017
One study reasons that stocks aren’t trading far outside of what historical experience would suggest.

August Roundup: The Current (Dis-)Equilibrium
Stephan Haggard (PIIE) Aug 24, 2017
It is that sad time of summer when the end of vacation and return to work looms like an executioner. After the Sturm and Drang of “fire and fury” we are back to the equilibrium that preceded it, but with a lot of subtle developments. My sense is that the status quo is not sustainable.

Part V: Reform of the Financial System
Dirk Helbing (Globalist) Aug 24, 2017
A “socio-ecological finance system” would be efficient, innovation-friendly and democratic at the same time.

Thinking Two Moves Ahead in Central Bank Chess
Daniel Moss (Bloomberg View) Aug 24, 2017
In the next year or so, a successor to Mario Draghi will emerge. Does Germany finally get a turn?

The Market Is Behaving Much Like It Did in the Past
Timothy A Duy (Bloomberg View) Aug 24, 2017
Consistent economic growth is a bigger factor than the Fed's tightening.

Fed Easing Isn't as Crazy as It Sounds
Danielle DiMartino Booth (Bloomberg View) Aug 24, 2017
Market watchers are wasting time debating tightening when lower rates could just as likely be the next move.

The Destructive Path of Protectionism
Ramesh Ponnuru (Bloomberg View) Aug 24, 2017
Tariffs subsidize narrow interests. For Americans as a whole, the record is one of almost unrelieved failure.

Can Trump Deal with North Korea and China?
Jeffrey Frankel (Project Syndicate) Aug 24, 2017
For years, Americans have misunderstood the nuclear threat from North Korea, and overestimated the importance of bilateral trade deficits with China. Now, these two issues are intersecting, and yet Donald Trump is threatening to erect new trade barriers against China just when he needs its help to rein in the Kim regime.

The Post-Crisis Elephant in the Room
Antonio Foglia (Project Syndicate) Aug 24, 2017
The global financial crisis that began in August 2007 resulted from a massive, unavoidable cognitive mistake on the part of not just bankers, but also the regulators who wanted to prevent it. Ten years later, few are willing to admit this fact, let alone explore what is needed to prevent another disaster.

Who Wants to Deregulate Finance?
Howard Davies (Project Syndicate) Aug 24, 2017
Because central bankers typically make a virtue of understatement and ambiguity, a recent interview by Federal Reserve Vice Chairman Stanley Fischer, in which he expressed strong reservations about the Trump administration's intentions, has fueled concerns about a return to the pre-2008 status quo. But are such fears well founded?

China’s Misguided Exchange-Rate Machinations
Yu Yongding (Project Syndicate) Aug 24, 2017
In August 2015, the People’s Bank of China established that central parity of the renminbi's exchange rate against the US dollar would be set with reference to the previous trading day’s closing price. But that much-needed step toward a more flexible, market-driven exchange rate was quickly – and wrongly – abandoned.

The Eurozone economic recovery is humming along just fine
Refet Gürkaynak and Philippe Weil (VoxEU) Aug 24, 2017
This column presents the first bi-annual report from CEPR’s Euro Area Business Cycle Dating Committee on the state of the Eurozone business cycle. The main findings are that the Eurozone expansion is continuing slowly, but is creating employment at a rapid pace; the recovery is commensurate with the US recovery once the Eurozone’s double-dip sovereign debt recession is factored in; and the heterogeneity in the pace of recovery of individual member countries is driven by the heterogeneity in their recessions. This column presents the first bi-annual report from CEPR’s Euro Area Business Cycle Dating Committee on the state of the Eurozone business cycle. The main findings are that the Eurozone expansion is continuing slowly, but is creating employment at a rapid pace; the recovery is commensurate with the US recovery once the Eurozone’s double-dip sovereign debt recession is factored in; and the heterogeneity in the pace of recovery of individual member countries is driven by the heterogeneity in their recessions.

The US economy is not yet back to its potential
Olivier Coibion, Yuriy Gorodnichenko and Mauricio Ulate (VoxEU) Aug 24, 2017
Estimates of potential output around the world have been systematically revised downward since the Great Recession. This column argues that the methods used to create these estimates do not distinguish between transitory and permanent shocks, or demand and supply shocks. Taking these differences into account suggests US output is almost 10 percentage points below potential output. This has important immediate implications for policymakers, and raises questions for those who estimate potential output. Estimates of potential output around the world have been systematically revised downward since the Great Recession. This column argues that the methods used to create these estimates do not distinguish between transitory and permanent shocks, or demand and supply shocks. Taking these differences into account suggests US output is almost 10 percentage points below potential output. This has important immediate implications for policymakers, and raises questions for those who estimate potential output.

Chinese households say they have (almost) never had it so good
FTCR Aug 25, 2017
FTCR Consumer Index hits second-highest reading on record as optimism improves again.

Venezuela investors unmoved despite sanctions threat
Eric Platt (FT) Aug 25, 2017
Most of the bondholders are sophisticated distressed debt investors and hedge funds.

Trump is a novice protectionist
George F. Will (WP) Aug 25, 2017
Proposed tariffs will punish U.S. consumers who are buying goods made across our borders.

Part VI: Digital Upgrade of Democracy (“Digital Democracy”)
Dirk Helbing (Globalist) Aug 25, 2017
We need social systems that are able to produce better solutions to complex problems.

In Vietnam, Repression Threatens Growth
Ilaria Maria Sala (Bloomberg View) Aug 25, 2017
A lack of democracy has an economic cost.

Bank of England Is Vindicated as Growth Deteriorates
Daniel Moss (Bloomberg View) Aug 25, 2017
It's better to be right than to appear consistent.

Finding the Root Cause of Recessions
Lakshman Achuthan and Anirvan Banerji (Bloomberg View) Aug 25, 2017
Two things bear most of the blame: external shocks and economic volatility.

Too Much Debt Is Making Us Sticks-in-the-Mud
Megan McArdle (Bloomberg View) Aug 25, 2017
Why do employers lay off a few workers instead of cutting everyone's wages? It's not as irrational as it sounds.

Angola’s Transition to Technocracy Won’t Be Victimless
Alex Vines (FP) Aug 25, 2017
The biggest challenge for Angola’s new president will be escaping the shadow of his predecessor — and the corrupt cronies around him.

The lives and times of civil servants in the developing world
Daniel Rogger (VoxDev) Aug 25, 2017
Insights into the lives and experiences of civil servants in developing countries.

Financial Stability a Decade after the Onset of the Crisis
Janet L. Yellen (FRB Govenors) Aug 25, 2017
A resilient financial system is critical to a dynamic global economy.

The external debt of the US is no cause for concern, yet
Wim Boonstra (VoxEU) Aug 25, 2017
Measured in dollars, the US is by far the most indebted country in the world. As this column describes, however, the country still has a positive capital income in spite of its high net debt position, and its external debt position is much smaller than one would expect based on cumulated current account deficits. Furthermore, fluctuations in the dollar exchange rates have a strong direct effect on the country’s international investment position. As long as it can finance its external obligations in dollars, its international debt position is no cause for concern for the US. For the rest of the world, however, the story may be different. Measured in dollars, the US is by far the most indebted country in the world. As this column describes, however, the country still has a positive capital income in spite of its high net debt position, and its external debt position is much smaller than one would expect based on cumulated current account deficits. Furthermore, fluctuations in the dollar exchange rates have a strong direct effect on the country’s international investment position. As long as it can finance its external obligations in dollars, its international debt position is no cause for concern for the US. For the rest of the world, however, the story may be different.

Part VII: Guiding Principles for a “Golden Age of Prosperity and Peace”
Dirk Helbing (Globalist) Aug 26, 2017
Ethics is not about putting obstacles in people’s way, but about fundamental success principles for a prosperous and peaceful society.

Labour exposes the false promises of Britain’s exit
Peter Mandelson (FT) Aug 27, 2017
It is now possible to construct a mutually beneficial partnership with the EU.

What would a Gary Cohn-led Federal Reserve look like?
Jason Cummins (FT) Aug 27, 2017
He is no fan of a strong dollar and his Wall Street roots align him with market bulls.

Bankers and Economists Fear a Spate of Threats to Global Growth
Binyamin Appelbaum (NYT) Aug 27, 2017
At a conference where economic policy makers usually discuss how to fuel growth, they instead worried about threats from protectionism, deregulation and the debt ceiling.

Brexit’s threat to long-term European unity
Wolfgang Münchau (FT) Aug 27, 2017
Once Britain leaves, the assessment of the pros and cons of EU membership will change.

Interview: Kagame insists ‘Rwandans understand the greater goal’
David Pilling and Lionel Barber (FT) Aug 27, 2017
To some, the president ended the country’s genocide and launched an economic revolution — to others, he is suppressing dissent.

China’s quest to catch up with the west
Henry Sanderson (FT) Aug 28, 2017
A string of American capitulations has gifted the superpower its technological expertise.

Temer’s ambitious $14bn privatisation drive
Gideon Rachman (FT) Aug 28, 2017
A welcome proposal, but controlling debt faces numerous hurdles.

Brazil and the crisis of the liberal world order
FT View Aug 28, 2017
Polarised politics and the rise of nationalism echo Trump’s US and Brexit Britain.

Labour’s Brexit Pains
WSJ Aug 28, 2017
The party endorses a ‘soft’ exit from the EU in contrast to the Tories.

Our Political Central Bankers
WSJ Aug 28, 2017
Fed officials join the resistance against financial reform.

How the US lost its way on trade
Jennifer Mason and Mireya Solís (Brookings) Aug 28, 2017
As President Trump pursues an “America First” approach to U.S. trade policy, Mireya Solís provides insight into the recent backlash against free trade and highlights the need for a renewed safety net for American workers.

Britain Must Accept the Hard Truth About Brexit
Bloomberg View Aug 28, 2017
The interim deal it desperately needs is one it won't like.

Mexico's Inevitable Rate Cut, Stalled by Politics
Daniel Moss (Bloomberg View) Aug 28, 2017
It's a political waiting game at Banxico, but the economy shouldn't be in limbo.

How the Top 1% Keeps Getting Richer
Noah Smith (Noah Smith) Aug 28, 2017
The wealthiest invest less in housing and more in stocks, generating higher returns.

Brexit Is Beginning to Look Like No Brexit
Leonid Bershidsky (Bloomberg View) Aug 28, 2017
The debate over transition periods reveals a deeper truth: The 2016 vote may have been pointless.

America and China’s Codependency Trap
Stephen S. Roach (Project Syndicate) Aug 28, 2017
On August 14, President Donald Trump instructed the US Trade Representative to commence investigating Chinese infringement of intellectual property rights. Whatever the merit of such allegations, Chinese retaliation against US trade sanctions would almost certainly cause far more economic damage.

Consumption inequality and the frequency of purchases
Olivier Coibion, Yuriy Gorodnichenko and Dmitri Koustas (VoxEU) Aug 28, 2017
Rising income inequality has received extensive attention from economists in recent years. However, changes in consumption inequality – which is potentially more relevant for welfare – have been largely neglected. Using US data, this column explores measurement issues and trends in household consumption. A key trend identified is that US households have been shifting towards stockpiling behaviour – shopping less frequently but purchasing larger quantities per trip.

Measuring the systemic implications of bank resolution
Giudici Paolo and Laura Parisi (VoxEU) Aug 28, 2017
In the European single resolution framework, there are three potential paths for failing banks: bail-in, private intervention, or liquidation. This column proposes combining a new market-based early warning measure of credit risk based on CDS spreads to investigate potential losses and systemic contagion for each path. Applying this to Italy's banking system suggests that private intervention and a bail-in minimise losses compared to liquidation, and, bail-in slightly reduces contagion effects compared to private intervention. In the European single resolution framework, there are three potential paths for failing banks: bail-in, private intervention, or liquidation. This column proposes combining a new market-based early warning measure of credit risk based on CDS spreads to investigate potential losses and systemic contagion for each path. Applying this to Italy's banking system suggests that private intervention and a bail-in minimise losses compared to liquidation, and, bail-in slightly reduces contagion effects compared to private intervention.

How to reduce elite capture: Watch out for local elites during democratic transitions
Monica Martinez-Bravo, Priya Mukherjee and Andreas Stegmann (VoxDev) Aug 28, 2017
Allowing old-regime agents to remain in power during democratic transitions facilitates elite capture, which lowers public good provision.

Britain’s global ambitions remain tied to Europe
FT View Aug 29, 2017
The UK’s relationship with Brussels will define its international trade.

Credit default swaps are storing up trouble for China
Joe Zhang (FT) Aug 29, 2017
Estimates put the total size of the market at over $500bn, but no one knows for sure.

Central Africa must find its own solutions
Gary Kleiman (FT) Aug 29, 2017
IMF help not enough without internal reform in six-nation bloc.

Chinese exporters report rising volumes and prices
FTCR Aug 29, 2017
FTCR China Export Index up in August but profits fail to benefit from easing costs.

Scrapping NAFTA Will Sink the Peso and Expand Trade Deficit
Caroline Freund (PIIE) Aug 29, 2017
The threat of a trade war with Mexico has receded as talks proceed this fall over renewing the North American Free Trade Agreement (NAFTA). One telling result is that the Mexican peso, which had plummeted in value against the dollar after Trump’s election and again after he took office, has recovered.

Is Lagarde’s Beijing card a Trump joker?
Brian Caplen (Banker) Aug 29, 2017
Managing director Christine Lagarde says that within the next 10 years the IMF could be headquartered in Beijing rather than Washington. Maybe, writes Brian Caplen, there is a hidden message for the IMF sceptics in the Trump administration.

China is the world’s new science and technology powerhouse
Reinhilde Veugelers (Brink) Aug 29, 2017
Chinese R&D investment has grown remarkably over the past two decades. It is now the second-largest performer in terms of R&D spending, on a country basis, and accounts for 20 percent of total world R&D expenditure, with the rate of R&D investment growth greatly exceeding that of the U.S. and the EU.

Ray Dalio's Forecast of Doom Is Overblown
Ben Carlson (Bloomberg View) Aug 29, 2017
Today’s markets and economy don't resemble those of the 1930s.

How to Achieve the SDGs
Mahmoud Mohieldin (Project Syndicate) Aug 29, 2017
In September 2015, the leaders of 193 countries agreed to achieve the Sustainable Development Goals – the most ambitious plan ever to promote human development – by 2030. Nearly two years into the process, there is plenty of cause for concern, but also considerable reason for hope.

The Global Economy’s New Rule-Maker
Michael Spence (Project Syndicate) Aug 29, 2017
As China's domestic market continues to grow, so, too, does its economic power and ability to set global rules. With the country fast approaching a position similar to that of the US and Europe after World War II, much will depend on the policies it pursues in two key areas.

The Promise of Fiscal Money
Yanis Varoufakis (Project Syndicate) Aug 29, 2017
One of the few remaining sacred cows of Western capitalism is the independence of central banks from elected governments. But in an age when fiscal policy has become an essential factor in determining the quantity of money lubricating the system, an independent monetary authority no longer makes sense.

The financial crisis, ten years on
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Aug 29, 2017
There is still a notable lack of consensus over when exactly the 2007-09 financial crisis started. This column argues that the crisis began on 9 August 2007, when BNP Paribas announced they were suspending redemptions. In 2007, the US and European financial systems lacked two key shock absorbers: adequate capital to meet falls in asset values, and adequate holdings of high-quality liquid assets to meet temporary liquidity shortfalls. Lacking these, the financial system was vulnerable to even relatively small disturbances, like the BNP Paribas announcement.

Sand Mining: Growing Pains of Cross-Border Trade
Susan Froetschel (YaleGlobal) Aug 29, 2017
Sand is indispensable for construction, roads and oil recovery even as nations try to protect coasts and supplies

A meeting of minds that bodes well for Europe
FT View Aug 30, 2017
France and Germany are ready to power the European project again.

France can learn from Germany on labour reform
George de Menil (FT) Aug 30, 2017
Emmanuel Macron put new employment legislation at the heart of his election campaign.

A currency designed for digital nomads
Izabella Kaminska (FT) Aug 30, 2017
Estonian proposals may not be as ingenious or innovative as they seem.

It’s time to say goodbye to emerging market indices
James Kynge (FT) Aug 30, 2017
Funds that track them need a rethink as inherent contradictions are becoming too heavy to sustain.

IMF should expel Venezuela
Marcos Buscaglia (FT) Aug 30, 2017
Expulsion to prompt a bond default could bring down the oil-based autocratic regime.

America’s most important exports are under attack
Charles Lane (WP) Aug 30, 2017
Political stability and the rule of law depend on much more than raising the debt ceiling.

Why Trump May Yet Declare a Trade War on Germany
Kevin Carmichael (CIGI) Aug 30, 2017
Germany’s stubborn adherence to tight fiscal policy has been robbing the world of economic growth for years, and Trump's lack of diplomacy could make it even worse.

BOJ: Rethinking the Mandate
Tomoya Masanao (PIMCO) Aug 30, 2017
Who will be the governor of the Bank of Japan after Kuroda’s term expires is an important question, but equally important is what the governor’s mandate will be. The BOJ’s mandate for the years ahead cannot be the same: It is not realistic to assume that the current 2% inflation target can be met in the foreseeable future, following the bank’s four-year struggle to lift inflation through unprecedented monetary easing. We think the BOJ will take a back seat on policy, look for opportunities to adjust its yield-curve targets higher and become more flexible on the 2% inflation target.

Crunch Time in Paris
Holger Schmieding (Globalist) Aug 30, 2017
Will Macron deliver? And what will French economic reforms mean for all of Europe?

Why Gold Is Less of a Haven These Days
Mohamed Aly El-Erian (Bloomberg View) Aug 30, 2017
Its status has been eroded by unconventional monetary policy and cryptocurrencies.

Europe Has Recovered Enough to Ease Off the Quantitative Easing
Daniel Moss (Bloomberg View) Aug 30, 2017
"Taper" is not a dirty word.

The Persistence of Global Imbalances
Carmen Reinhart (Project Syndicate) Aug 30, 2017
When the world's leading central bankers gathered at their annual meeting in Jackson Hole, Wyoming, the main focus of discussion was global trade and imbalances. And here, the old adage applies: the more things change, the more they stay the same.

Odiousness Ratings for Public Debt
Ricardo Hausmann and Ugo Panizza (Project Syndicate) Aug 30, 2017
Well-functioning markets should have shut down the Venezuelan regime’s access to finance long before US President Donald Trump did. The fact that they didn’t not only shocked the moral sentiments of many, but also revealed a fundamental defect in sovereign debt markets’ institutional architecture.

Barbarians at the Monetary Gate
Andrew Sheng and Xiao Geng (Project Syndicate) Aug 30, 2017
Amid global fears of financial instability, cybercurrencies are becoming a refuge for skeptical investors. But as peer-to-peer alternatives to official money proliferate, and the state loses its role in maintaining currency values, the risks to financial stability implied by a collapse are rising.

How did China Move Up the Global Value Chains?
Hiau Looi Kee and Heiwai Tang (VoxChina) Aug 30, 2017
How representative is the Apple example of China’s segment of global value chains? Do Chinese firms and workers still heavily rely on imported inputs while contributing little to the country’s exports?

Risk intolerance and the global economy
Ricardo Caballero and Alp Simsek (VoxEU) Aug 30, 2017
Interest rates continue to decline across the globe, while returns to capital remain constant or increasing. The reasons for this widening risky-safe gap are wide-ranging. This column illustrates the secular rise of risk intolerance in the global economy, and summarises a new macroeconomic framework suitable for this environment. It uses this framework to discuss the current global macroeconomic context, its underlying fragility, and the coexistence of low equilibrium interest rates and high speculation. Interest rates continue to decline across the globe, while returns to capital remain constant or increasing. The reasons for this widening risky-safe gap are wide-ranging. This column illustrates the secular rise of risk intolerance in the global economy, and summarises a new macroeconomic framework suitable for this environment. It uses this framework to discuss the current global macroeconomic context, its underlying fragility, and the coexistence of low equilibrium interest rates and high speculation.

Don't Blame the Robots
Sahil Mahtani and Chris Miller (FA) Aug 30, 2017
How housing prices and market power explain wage stagnation.

Trump Cares More About Ideology Than the Victims of Hurricane Harvey
Dan Restrepo (FP) Aug 30, 2017
In turning down Mexico’s offer of disaster aid, Trump chose ideology over helping victims of Hurricane Harvey.

Has China’s Growth Reached a Turning Point?
Jun Nie and Yandong Jia (FRBKS Macro Bulletin) Aug 30, 2017
A new measure of Chinese economic activity shows its momentum increased in the first half of the year; however, this momentum may not be sustainable.

Venezuela’s path to a debt restructuring grows more treacherous
Robin Wigglesworth (FT) Aug 31, 2017
New sanctions from the US will complicate any restructuring in the event of a default.

Making Growth Great Again
Kimberley A. Strassel (WSJ) Aug 31, 2017
The GOP should learn from how Trump is selling supply-side tax cuts.

Getting Serious About Europe's Fiscal Future
Bloomberg View Aug 31, 2017
Constructive ambiguity isn't good enough.

China Realizes It Needs Foreign Companies
Christopher Balding (Bloomberg View) Aug 31, 2017
Investment from overseas is falling. That's a big problem.

Why 'More Europe' Won't Solve Europe's Fiscal Quandary
Pascal-Emmanuel Gobry (Pascal-Emmanuel Gobry) Aug 31, 2017
France favors redistribution and a euro finance minister. This would benefit only Germany.

What a Strong Euro Means for the U.S. Debt Ceiling Debate
Ben Emons (Bloomberg View) Aug 31, 2017
There's a risk the greenback will "overshoot" on the downside, creating a crisis of confidence.

Trump Trade Promise Won't Go Over Well With Stocks
Komal S Sri-Kumar (Bloomberg View) Aug 31, 2017
Better-designed treaties should focus on increasing U.S. exports globally, even if that means imports rise.

Tiny Good News on Inflation, for Europe and the Fed
Daniel Moss (Bloomberg View) Aug 31, 2017
Too-low inflation isn't the worst thing. Remember when deflation was a risk?

Macron's Labor Reform Isn't Enough to Lift Economy
Leonid Bershidsky (Bloomberg View) Aug 31, 2017
His winning streak continues, but his long-term challenges remain.

As NAFTA Talks Restart, Canada and Mexico Are Unfazed by Trump’s Threats
Emily Tamkin (FP) Aug 31, 2017
As NAFTA talks restart, Canada and Mexico are unimpressed by Trump’s threats.