News & Commentary:

Articles/Commentary

Norway grapples with rising political influence of $1.4tn oil fund
Richard Milne (FT) Sep 1, 2021
Questions over mandate of the world's largest sovereign wealth fund spice up national elections.

Demographics mean the fall in interest rates is far from over
Robin Harding (FT) Sep 1, 2021
In Japan, an ageing population has had an unexpected influence on inflation and wages.

Investors eye emerging market upswing after China shock
Robin Wigglesworth (FT) Sep 1, 2021
Some see EM pain as overdone after 'lost decade' compared to US and European equities.

What if the Coronavirus Crisis Is Just a Trial Run?
Adam Tooze (NYT) Sep 1, 2021
The year 2020 gave us a glimpse of something radically new: tensions in politics, finance and geopolitics intersecting with a natural shock on a global scale.

Whether China's rise means America's fall
Paul Kennedy (Economist) Sep 1, 2021
Changes in global politics, armed forces and economics means America has a new contender for supremacy, writes a historian of great powers.

The ECB Should Take a Page From the Fed's Playbook
Marcus Ashworth (Bloomberg View) Sep 1, 2021
Separate attempts to taper quantitative easing from eventually hiking official interest rates is a brilliant confidence trick.

India's World-Beating GDP Can't Mask the Pain of the Pandemic
Andy Mukherjee (Bloomberg View) Sep 1, 2021
The economy was in trouble even before the second wave, and now fresh gains for India Inc. are coming at the expense of households and tiny enterprises.

Will Biden Make a Historic Mistake at the Fed?
J. Bradford DeLong (Project Syndicate) Sep 1, 2021
The past 30 years should have taught Democrats to put their own economic policy priorities before symbolic gestures of "bipartisanship." If US President Joe Biden does not replace Federal Reserve Chair Jerome Powell with Lael Brainard, he will almost certainly regret it.

Africa Must Produce Its Own Vaccines
Landry Signé (Project Syndicate) Sep 1, 2021
During the COVID-19 pandemic, Africa has relied on bilateral agreements and multilateral platforms like COVAX to deliver vaccine doses. But these have proved far from adequate, demonstrating just how important it is for the continent to develop its pharmaceutical industry.

The Economic Roots of the Afghan Debacle
Daniel Gros (Project Syndicate) Sep 1, 2021
Afghanistan experienced rapid economic growth in the decade following the US invasion and the ouster of the Taliban. But the subsequent stagnation of living standards – rooted in the failure to build a self-sustaining domestic economy – made unrest all but inevitable.

The Natural Interest Rate in China
Daniel M. Rees and Guofeng Sun (VoxChina) Sep 1, 2021
The growth of China's economy and development of its financial markets has created a need for tools to evaluate the stance of monetary policy in China. We contribute to this effort by providing estimates of China's natural interest rate. We find that China's natural interest rate averaged between 3–5 per cent between the late 1990s and 2010s, but declined over the next decade to around 2 per cent at the end of 2019. We attribute slightly more than half of the decline in China's natural interest rate to a lower rate of potential output growth. Our results also suggest that real policy interest rates in China have closely tracked the natural rate over our sample.

Immigration and natives' exposure to COVID-related risks in the EU
Laurent Bossavie, Daniel Garrote Sanchez, Mattia Makovec, and Caglar Ozden (VoxEU) Sep 1, 2021
The COVID-19 shock exerted pressure on labour markets around the world. This column explores how the prevalence of immigration in the labour market affected different types of workers' exposure to virus-related risks in 15 destination countries in Western Europe. It finds that not only were immigrant workers more vulnerable to the economic and health shocks of the pandemic; they also served as a protective shield for native workers. By undertaking higher-risk occupations, immigrants enabled native workers to move into work with fewer face-to-face interactions or jobs that could be carried out from the safety of home.

The ECB strategy: The 2021 review and its future
Lucrezia Reichlin, Klaus Adam, Warwick J. McKibbin, Michael McMahon, Ricardo Reis, Giovanni Ricco, and Beatrice Weder di Mauro (VoxEU) Sep 1, 2021
The ECB signalled an historic shift in its 2020 strategy review. This column introduces a new CEPR report which argues that the review has moved the ECB in the right direction but leaves some key issues unaddressed. The report focuses on the definition of the ECB's inflation target, its operational framework, fiscal and monetary policy interactions, and the implications for monetary policy of climate change and related mitigation initiatives. The authors identify topics to be addressed in future strategic reviews and provide a framework as a basis for this ongoing analysis.

Our Last, Best Chance on Climate
Amar Bhattacharya and Nicholas Stern (F&D) Sep 1, 2021
The COP26 meeting in Glasgow may usher in a new era of sustainable development.

Five Things to Know about Carbon Pricing
Ian Parry (F&D) Sep 1, 2021
Carbon pricing shows serious promise as a tool in the fight against climate change.

Driving Deep Decarbonization
James H. Stock (F&D) Sep 1, 2021
As green energy costs drop, we should shift the emphasis from economy-wide carbon pricing to sectoral policies.

Economics Nature's Way
Partha Dasgupta (F&D) Sep 1, 2021
Good economics demands that we manage Nature better.

Fighting Climate Change with Innovation
Kelly Levin and Andrew Steer (F&D) Sep 1, 2021
Innovation has brought us to an inflection point; the coming decade will be decisive.

Investing in a Sustainable Future
Valerie Smith (F&D) Sep 1, 2021
Private sector financing can play a pivotal role in amplifying the effects of government climate policies.

Clean and Green Finance
Mark Carney (F&D) Sep 1, 2021
A new sustainable financial system can secure a net zero future for the world.

China's changing role in the world economy
FT View Sep 2, 2021
Delta variant and supply chain problems are slowing the global recovery.

China's changing role in the world economy
FT View Sep 2, 2021
Delta variant and supply chain problems are slowing the global recovery.

Investors eye labour market inflation risks
John Redwood (FT) Sep 2, 2021
While equities remain strong, fears grow about the bull run ending.

What next for the rich in a post-pandemic world?
Stefan Wagstyl (FT) Sep 2, 2021
Wealth accumulation has coincided with persistent inequality — and even banks are concerned.

How the pandemic became stagflationary
Economist Sep 2, 2021
As the virus has changed, so has its relationship to the economy.

The US-China Trade Deficit Continues to Grow — But Does it Matter?
Derek Scissors (BRINK) Sep 2, 2021
The U.S. trade deficit with China rose by 20% in the last 12 months, despite the tariffs imposed by successive administrations. Many believe that the $300 billion goods deficit with China means a loss of U.S. jobs. The evidence actually shows the opposite.

Statesman's guide to world's economic future
David Marsh (OMFIF) Sep 2, 2021
China, central banks and climate change – Brown's route to global renewal.

Monetary Order and International Security
Harold James (Project Syndicate) Sep 2, 2021
Historically, there have long been close parallels between the collapse of monetary systems and the fall of global security orders. Hegemony requires a sound financial basis and global credibility – assets that can evaporate much faster than anyone in power cares to admit.

India's Path to Recovery
Brendan McKenna (WF Econ Group) Sep 2, 2021
India released Q2 GDP this week with data revealing the COVID induced slowdown was more severe than we expected. By our estimates, India's economy contracted around 12.5% quarter-over-quarter in Q2; however, given base effects from last year's recession, expanded over 20% on a year-over-year basis. As a result, we revised our 2021 GDP growth forecast lower. However, high frequency indicators suggest India's economy is recovering well in Q3 and is on pace to end this year on still solid footing. Going forward, barring any unforeseen health-related setbacks, India's economy should experience one of the higher growth rates in the emerging markets in 2022 as recent economic momentum carries forward into next year. But, despite the economic recovery gathering momentum, we continue to believe the rupee will gradually depreciate as the Reserve Bank of India (RBI) prioritizes growth and maintains an accommodative stance on monetary policy, and as the central bank continues to intervene in FX markets in favor of a weaker rupee.

The downside of the economics of self-reliance
David Lubin (FT) Sep 3, 2021
If a coming investment push is inward-looking, it might substitute global trade rather than complement it.

Finance cartels face digital currency shake-up
Gillian Tett (FT) Sep 3, 2021Fear of competition means central bank projects are already hitting legacy payment companies.

What next for the rich in a post-pandemic world?
Stefan Wagstyl (FT) Sep 3, 2021
Wealth accumulation has coincided with persistent inequality — and even banks are concerned.

Europe's markets regulators are worried. About everything
Katie Martin (FT) Sep 3, 2021
Excess of risk-taking in markets is not obviously healthy behaviour.

This Is a Sign that Price Inflation Will Soon Get Worse
Connor Mortell (Mises Wire) Sep 3, 2021
Price inflation isn't a simple function of increases in the money supply. Rather, it depends on many other factors such as public expectations of future inflation.

How do companies avoid paying international taxes?
Simeon Djankov (PIIE) Sep 3, 2021
And will countries agree on new rules to reform the system?

Big Jobs Miss Muddles Picture for Economy and the Fed
Mohamed A El-Erian (Bloomberg View) Sep 3, 2021
The unemployment report for August provides ample ammunition for divergent interpretations.

A Bad Jobs Report Is Not a Reason to Spend More Money
Karl W Smith (Bloomberg View) Sep 3, 2021
The monthly employment numbers confirm that the economy is slowing down, but more stimulus is unlikely to help — and could make things worse.

Green National Accounting
William D. Nordhaus (Project Syndicate) Sep 3, 2021
Standard economic accounting methods have long suffered from a failure to capture the full effects of non-market externalities like greenhouse-gas emissions and pollution. But once these factors are weighed in the balance, it becomes clear that US environmental and safety regulations are actually pro-growth.

Europe's power companies still rely on coal despite green plans
John Dizard (FT) Sep 4, 2021
Rising prices may spur populist backlash as generators switch to renewable fuels.

How the pandemic became stagflationary
Economist Sep 4, 2021
As the virus has changed, so has its relationship to the economy.

Madagascar is on the brink of famine
Economist Sep 4, 2021
Donors are trying to help people hit by climate change, pandemic and bad governance.

The Case Against the New "Secular Stagnation Hypothesis"
Mihai Macovei (Mises Wire) Sep 4, 2021
Lawrence Summers claims that excess savings and feeble investment led to secular stagnation in advanced economies. But Austrian business cycle theory offers a better explanation.

Oil Producers Enjoy the Calm Before the 2022 Storm
Julian Lee (Bloomberg View) Sep 5, 2021
The OPEC+ group can't go on raising production each month without tipping the oil market into surplus.

Making Sense of Xi's New Common Prosperity Doctrine
Anjani Trivedi (Bloomberg View) Sep 5, 2021
Building a modern supply chain and growing China's middle class is one thing, but investors worry this crackdown is also in danger of stifling innovation.

Fossil Fuels' Price Boom Isn't the Victory It Might Seem
David Fickling (Bloomberg View) Sep 5, 2021
Even in a decarbonizing world, coal and gas can rise thanks to all sorts of supply-demand dynamics. Renewables will still be the most cost-effective option in the long term.

China's Slowdown Is Just as Important as the U.S. Jobs Shocker
Daniel Moss (Bloomberg View) Sep 5, 2021
While investors have fixated on American data for clues about the future of the Fed's quantitative easing, the world's No. 2 economy is sending distress signals.

Afghanistan's Money Exchangers Are the Economy's Last Best Hope
Nafay Choudhury (FP) Sep 5, 2021
As many banks are forced to close, an informal network of money exchangers provides an indispensable service.

Covid-19 has made fighting inequality more critical than ever
Ian Goldin (FT) Sep 6, 2021
The pandemic has widened the gulf between rich and poor, but by co-operating we can rebuild a more sustainable world.

Markets seem to be missing the risks on US inflation
Rebecca Patterson (FT) Sep 6, 2021
The Fed will eventually have to do more than 'budge' on interest rates.

BlackRock's China Blunder
George Soros (WSJ) Sep 6, 2021
Pouring billions into the country now is a bad investment and imperils U.S. national security.

Covid realities catch up with the Thai baht
Peter Janssen (AT) Sep 6, 2021
Thailand's once-mighty baht had depreciated against the US dollar by 8% as of August 30, the steepest fall of any currency in Asia in 2021 as the pandemic devastates the kingdom's tourism-dependent economy. The fall is notable as the Thai unit outperformed all Southeast Asian and most Asian currencies in 2019 and 2020.

America's Economy Is Heading Down the Same Road as Italy's
Edoardo Cicchella (Mises Wire) Sep 6, 2021
When I came to the US from Italy, I came as a sort of economic refugee, escaping Italy's economic stagnation. But now America seems intent on copying Italy's path to impoverishment.

Moving from game plan to victory: how Italy can score faster, fairer growth into the long term
Catherine MacLeod and Tim Bulman (OECD Ecoscope) Sep 6, 2021
The crisis hit Italy early and hard. After a deep contraction, the economy is forecast to rebound by almost 6% this year, and then grow at 4.1% in 2022. The recovery has been underpinned by a successful vaccination campaign and efforts to preserve companies and provide much needed income support to households. Growth will reach 2019 levels by the first half of 2022.

The Federal Reserve Faces Its Greatest Pandemic Test Yet
Lena Komileva (Bloomberg View) Sep 6, 2021
After the growth shock of 2020 and the inflation shock of 2021, markets are not ready for a policy shock in 2022.

Xi Jinping May Be Leading China Into a Trap
Matthew Brooker (Bloomberg View) Sep 6, 2021
"Common prosperity" has been portrayed as an effort to reduce income inequality and reassert core Communist Party values. In reality, it risks leaving the country stuck at middle-income status.

ECB still needs to put theory into practice
Elga Bartsch (FT) Sep 7, 2021
Slowing asset purchases to support the economy would send the wrong signal.

Multilateral development banks can do more to aid the recovery
Leslie Maasdorp (FT) Sep 7, 2021
They have been held back by restrictive capital requirements and a desire to maintain AAA credit ratings.

V-shaped recovery hopes fading fast in Asia
William Pesek (AT) Sep 7, 2021
The Delta variant is steadily undoing hopes that "V-shaped" recoveries would rev up factories, offices and schools and restore business and household confidence. Where we are now is as good as it is going to get for the global economy in the last four months of 2021 and the start of 2022..

Why is the EU seeking a carbon border tax adjustment and how would it work?
Gary Clyde Hufbauer (PIIE) Sep 7, 2021
The three biggest greenhouse gas emitters—the United States, Europe, and China—are at loggerheads over how to curb emissions from fossil fuels without disadvantaging their own economies. They fear stringent environmental and emissions regulations will give foreign exporters an unfair edge in international trade.

Breaking Bad Bond Buying
Andrés Velasco (Project Syndicate) Sep 7, 2021
It is understandable why a central bank would print money to purchase assets at the height of a financial crisis. But continuing such policies under conditions of relative tranquility makes little sense – and raises serious risks.

SEC needs to find a way to curb payment for order flow
Sheila Bair (FT) Sep 8, 2021
It's not clear whether PFOF reduces costs for retail investors, or simply makes their costs less transparent.

Why SDRs should be used by states not central banks
Andrés Arauz (FT) Sep 8, 2021
Ecuador's Andrés Arauz argues there's no legal basis for central banks to appropriate the IMF's fresh SDR allocation.

Why the Dow 36000 Forecast Was Right
Kenneth Rogoff (WSJ) Sep 8, 2021
Hassett and Glassman were mocked in 1998 but have been vindicated by rising stocks. The danger now? Rising interest rates.

In much of the world, economic policy is becoming tighter
Economist Sep 8, 2021
Can the recovery bear it?

What is the "Washington Consensus?"
Douglas A. Irwin and Oliver Ward (PIIE) Sep 8, 2021
The term "Washington Consensus" was coined in 1989 by economist John Williamson of PIIE. He was describing a list of policies that had gained support among Latin American policymakers in response to the macroeconomic turbulence and debt crisis of the early to mid-1980s. These policies also had the backing of experts at Washington's international institutions—especially the International Monetary Fund and the World Bank, as well as the US Treasury—to help the recovery from the debt crisis.

The U.S. Makes Carbon Pricing More Complicated Than It Needs to Be
Peter R Orszag (Bloomberg View) Sep 8, 2021
What happens when a country that's unwilling to impose a direct tax on emissions decides to assess the carbon content of imports?

How Weaker Consumer Demand Could Help the U.S. Economy
Karl W Smith (Bloomberg View) Sep 8, 2021
A brief pullback in consumer spending could give the economy just the room it needs to adjust to some peculiar conditions.

The Dollar's Rebound May Just Be Getting Started
Richard Cookson (Bloomberg View) Sep 8, 2021
Emerging-market currencies looks especially vulnerable as growth and relative interest rates move in the greenback's favor.

Did Bitcoin's El Salvador Debut Dud Doom Crypto?
Aaron Brown (Bloomberg View) Sep 8, 2021
Stumbles in the digital currency's transition to legal tender may be just that – but a bigger unknown could thwart its evolution.

Is the Global Recovery Over or Just on Pause?
Daniel Moss (Bloomberg View) Sep 8, 2021
While the delta variant has overturned expectations for growth, Australia's central bank chief remains optimistic. His outlook could help chart the course for policy makers worldwide.

It's a Lehman Moment, Not Volcker, That China Should Fear
Matthew Brooker (Bloomberg View) Sep 8, 2021
If officials manage to reshape China's property sector, it'll be an impressive feat of economic management. But if they don't, a long-lasting debt crisis and balance-sheet recession could be on the cards.

Biden's Two Types of Multilateralism
Kemal Dervis (Project Syndicate) Sep 8, 2021
The objectives of US President Joe Biden's climate and democracy summits exemplify sharply different aspects of multilateral cooperation. But Biden's are not contradictory: the first meeting sought to enhance the provision of a crucial global public good, while the second aims to promote values deemed universal.

Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms
Cheng Chen, Wei Tian, and Miaojie Yu (VoxDev) Sep 8, 2021
A recent study shows that domestic input distortions faced by private firms in China have generated extra incentives for those firms to invest and produce abroad. This finding helps explain an astonishing increase in China's outward foreign direct investment (FDI) flows since the financial crisis.

The euro area's COVID-19 recession
Roberta Cardani, Olga Croitorov, Fabio Di Dio, Lorenzo Frattarolo, Massimo Giovannini, Stefan Hohberger, Philipp Pfeiffer, Marco Ratto, and Lukas Vogel (VoxEU) Sep 8, 2021
The COVID-19 recession differs strongly from past crises in recent history. This column summarises the integration of key economic features of the pandemic into the European Commission's estimated DSGE model. Shock decompositions highlight the dominant role of 'lockdown shocks' ('forced savings', labour hoarding) for explaining the quarterly pattern of real GDP growth in 2020, complemented by negative contributions from foreign and investment demand notably in 2020q2 and a negative impact of persistently higher (precautionary) savings. The inflation response has been modest given the severity of the recession.

It is time for the ECB to talk about tapering
FT View Sep 9, 2021
Outlook is still unclear but justification for emergency support is weakening.

Germany's stock market needs deeper change
FT View Sep 9, 2021
Adding 10 companies does not go far enough to overhaul the Dax 30.

Inflation splits emerging countries into doves and hawks
Jonathan Wheatley (FT) Sep 9, 2021
More than in the developed world, rising prices already pose a real threat to stability.

US Fed head drama is the last thing Asia needs
William Pesek (AT) Sep 9, 2021
Asian policymakers have a Jerome Powell dilemma on their hands. And it could be a bigger one than they realize. Though the region has enormous stakes riding on US President Joe Biden's policy mix, it's Chairman Powell's decisions at the Federal Reserve that will have the greatest impact on Asia in 2022 and beyond.

COVID-19, Productivity and Reallocation: Hibernation, Not Zombification
Dan Andrews (OECD Ecoscope) Sep 9, 2021
The consequences of the pandemic for potential output will partly hinge on its impact on the reallocation of labour from low to high productivity firms. While Schumpeter proposed that recessions can accelerate this "cleansing" process, downturns can also distort reallocation dynamics if financial constraints result in the premature shakeout of productive but financially fragile firms. The pandemic could provide a further twist if job retention schemes delayed the restructuring of unproductive firms that would have otherwise contracted, thereby risking "zombification". But timely evidence on this issue is scarce.

Is Universal Basic Income Still Necessary in a Boom Economy?
Floyd Marinescu (BRINK) Sep 9, 2021
Around the world, a number of countries are now trialing universal basic income programs — from Wales to Finland to California and Minneapolis. But with the global economy now growing and wages rising, some argue that UBI and other types of income support are no longer needed. So is support waning?

The State of Global Education Finance in Seven Charts: An Update
Susannah Hares and Jack Rossiter (CGD) Sep 9, 2021
A couple of years ago, we examined aid data from the OECD and UNESCO Institute for Statistics, analysing how much aid is going to education, where it is allocated, by who, and through what channels. Two years on, we provide an update to see what's changed. The latest available data is from 2019, and so any impact of the COVID-19 pandemic on education finance is not captured in this retrospective analysis. Our next update could look very different.

A Wrong Turn for World Bank Concessional Lending
Jayati Ghosh and Farwa Sial (Project Syndicate) Sep 9, 2021
As long as the World Bank's International Development Association can be an important source of recovery funds for the poorest economies, those resources must be used effectively. This will require closing the IDA's Private Sector Window and instead providing resources directly to governments.

Why America Must Go Big on Infrastructure
Laura Tyson and Lenny Mendonca (Project Syndicate) Sep 9, 2021
Although the US economy has enjoyed a strong recovery from the pandemic-induced recession, its prospects for more robust, sustainable, and equitable long-term growth remain tenuous. Much will depend on whether Congress can muster the will to invest massively in physical and social infrastructure.

ECB Answers One Key Question, Leaves Others Until Later
Nick Bennenbroek (WF Econ Group) Sep 9, 2021
Today's closely watched European Central Bank (ECB) monetary policy announcement answered one important question, with the ECB saying it would conduct its pandemic emergency bond purchases at moderately lower pace in Q4 relative to Q2 and Q3. We suspect that will equate to a monthly pace of pandemic purchases of around €65 billion per month during the fourth quarter. There were no other changes to the ECB's policy parameters at this time. The central bank held its policy interest rates steady, kept the size of its Pandemic Emergency Purchase Program (PEPP) at €1,850 billion and said those purchases would run until at least March 2022, and maintained its regular asset purchase program (APP). The answer to "what's next" for some of those policy parameters—specifically bond purchases—appears likely to be delivered in December. With the ECB's updated projections showing strong GDP growth but below target CPI inflation, we do expect the ECB to announce ongoing bond purchases in December. However, we now believe the central bank will announce a pivot from PEPP purchases to APP purchases at that December meeting. In particular, we expect the PEPP purchases to end broadly, or slightly later, than currently scheduled. Upon completion of the PEPP program, we expect the pace of APP purchases to increase to around €40-€50 billion per month, from €20 billion per month currently. With the likelihood that further bond purchases will be announced by the end of this year, and interest rate increases not even a consideration at this point, for the time being we see limited upside and some potential for downside in the EUR/USD exchange rate.

Doves have strong case against premature ECB tightening
Frederik Ducrozet (FT) Sep 10, 2021
Central bank is pulling back but needs to convince markets its asset purchase programme will not end too soon.

When it comes to vaccinating the world, we must fix distribution
Gillian Tett (FT) Sep 10, 2021
Investment in infrastructure is critical if we are to beat this pandemic and prepare for the next.

For a more resilient and cohesive Europe
Filippo Gori and Álvaro Pina (OECD Ecoscope) Sep 10, 2021
Increasing cyclical convergence in the euro area.

Learning the Right Lessons from US Economic Experimentation
Dani Rodrik (Project Syndicate) Sep 10, 2021
In one policy area after another – from trade to taxation to labor markets – the decades-old consensus in the United States has been replaced with something very different. But policymakers elsewhere would be wise to consider their own countries' circumstances carefully before following America's lead.

Changing the Climate of Financial Regulation
Sarah Bloom Raskin (Project Syndicate) Sep 10, 2021
There is no longer any doubt that climate change will continue to impose deep economic and financial costs on households, communities, businesses, and entire countries. Many of these risks can still be mitigated, but only if regulators in the United States break some bad habits.

The spectre of high inflation returns to haunt Latin America
Michael Stott (FT) Sep 11, 2021
Central banks in the region are forced to raise rates, some aggressively.

What the Delta variant did to South-East Asia
Economist Sep 11, 2021
The region had escaped the worst of the pandemic. But in just three months, the virus has brought devastation.

The new economics of global cities
Economist Sep 11, 2021
As economies reopen, activity is spreading outward from city centres.

Do physical assets offer investors refuge from inflation?
Economist Sep 11, 2021
Property, infrastructure and farmland have their attractions. But they could prove victims of their own success.

The ECB has secured a taper without a tantrum
Martin Sandbu (FT) Sep 12, 2021
Careful manoeuvring should allow the bank to calibrate its next move while keeping both sides happy.

A perfect storm for container shipping
Economist Sep 12, 2021
Will prolonged disruptions shift the pattern of trade?

Sept. 11 and the Future of American History
Niall Ferguson (Bloomberg View) Sep 12, 2021
Twenty years after the horrific attacks on New York and Washington, it's clear that the biggest changes of our time were not ideological or geopolitical, but technological. They were also the hardest to foresee.

Russia Is the Canary in the OPEC+ Oil Mine
Julian Lee (Bloomberg View) Sep 12, 2021
If the country is struggling to boost its oil production, we ought to be worried.

Equity premium predictability over the business cycle
Emanuel Moench and Tobias Stein (VoxEU) Sep 12, 2021
The US equity market follows a V-shaped pattern around recessions, with sharply negative returns heading into recessions and a strong recovery as the recession unfolds. In addition, recessions are usually preceded by an inverted yield curve. This column shows that the term spread is a robust predictor of recessions, and that model-implied recession probability forecasts do a good job of predicting the equity premium out-of-sample. An investment strategy based on the recession probability model could be used to time the equity market and lead to higher and less volatile profits over time.

The rise of eastern Europe is a forgotten economic success story
Ruchir Sharma (FT) Sep 13, 2021
While the west focuses on political backsliding, manufacturing prowess is propelling the region forward.

Supply chain issues add to stagflationary winds
Mohamed El-Erian (FT) Sep 13, 2021
Waves of disruptions suggest that longer-term forces are in play.

Why China's Economy Is Threatened by a Property Giant's Debt Problems
Alexandra Stevenson and Cao Li (NYT) Sep 10, 2021
The real estate developer Evergrande once binged on debt. Now the music has stopped, investors are panicking and experts are warning of an imminent failure.

Banning Payment for Order Flow Would Be a Huge Mistake
Nir Kaissar (Bloomberg View) Sep 13, 2021
The practice has made stock investing available to everyone and is a logical next step on the road to more open and fair markets.

The Reality of Climate Financial Risk
Karl Schmedders and Rick van der Ploeg (Project Syndicate) Sep 13, 2021
Those who argue that climate change has little to do with macroprudential risk management are offering a counsel of despair. If the 2008 global financial crisis revealed anything, it is that regulation matters, even if it isn't always politically popular or easily optimized.

Closing the Nature-Finance Gap
Andrew Deutz (Project Syndicate) Sep 13, 2021
Although the biodiversity crisis is intimately linked to the climate one, the financing to address it is woefully inadequate. With a new global biodiversity plan now in the works, the world has an opportunity – and a duty – to start making up for lost time.

The Economic Risks of Pandexit
Howard Davies (Project Syndicate) Sep 13, 2021
Although everyone hopes that Pandexit, or the end of the COVID-19 pandemic, will come soon, the economic benefits will not be unalloyed. One plausible downside scenario is that current price pressures intensify and inflation rises further, eventually requiring a monetary response.

What drives house prices: Some lessons from the literature
John Duca, John Muellbauer, and Anthony Murphy (VoxEU) Sep 13, 2021
Research on house price cycles and their interactions with the economy has mushroomed since the Global Financial Crisis. This column draws five lessons from a recent literature survey. It argues that conventional theories of house price dynamics are misleading. Shifts in credit conditions, together with differences in housing supply response across cities, regions and countries, account for much of the heterogeneity of house price outcomes. Finally, increased demand for space and unprecedented policy interventions together explain the very different house price experience in the pandemic compared with the Global Financial Crisis.

The impact of COVID-19 on global production
Hongyong Zhang (VoxEU) Sep 13, 2021
COVID-19 has had large impacts on global production and international trade. The column uses quarterly aggregate-level data on foreign affiliates of Japanese multinational corporations to show that multinational production and supply chains were negatively affected by the COVID-19 pandemic, especially in the 2nd quarter of 2020. The sales of Japanese manufacturing affiliates almost recovered in the 4th quarter of 2020, indicating the resilience of global production and multinationals' supply chains. But there are large variations in recovery across countries.

Emerging Market Central Banks Packed With Policy Space
Brendan McKenna (WF Econ Group) Sep 13, 2021
Central banks across the emerging markets have steadily tightened monetary policy for the majority of this year. In fact, central banks within the emerging markets have been quite aggressive lifting interest rates relative to expectations and have tightened policy quicker than central banks within the G10. However, with the Fed likely to taper asset purchases before the end of the year, emerging market currencies could come under renewed pressure ahead. Additional central bank rate hikes could be necessary to defend emerging market currencies; however, given the pace of policy rate hikes already, do emerging market central banks still have space to lift interest rates?

Is it too late for Japan's semiconductor industry?
Leo Lewis (FT) Sep 14, 2021
Efforts to revive the sector may be doomed by too little investment and insufficient government expertise.

Uncertainty hangs over Argentina's political and economic future
Michael Stott (FT) Sep 14, 2021
The Peronists' poor midterm showing may not improve the indebted country's prospects.

A crucial change is needed to improve corporate governance in Japan
Nicholas Benes (FT) Sep 14, 2021
Reporting requirements hinder engagement between shareholders and companies.

What Is Going On With the Global Maritime Supply Chain?
Larissa van der Lugt (BRINK) Sep 14, 2021
Maritime supply chains, disrupted by COVID-19 and an economic crisis, are now responding to a sudden surge in global economic activity. On top of that, there is growing pressure for the industry to drastically reduce its carbon emissions.

How to Tax in Asia's Digital Age
Era Dabla-Norris, Ruud De Mooij, Andrew Hodge, and Dinar Prihardini (IMF) Sep 14, 2021
The agreed changes could spur more comprehensive reforms applied to all companies and to a larger share of profits.

A Tropical Paradise Is Brewing a Storm in a Tea Cup
Andy Mukherjee (Bloomberg View) Sep 14, 2021
Deprived of tourism dollars, Sri Lanka's foreign exchange reserves are dangerously low and food staples are running short. The question now is will it turn to China, India or the IMF for help?

Financing a Sustainable Global Food System
Simon Zadek (Project Syndicate) Sep 14, 2021
The global food system must undergo a radical transformation to withstand climate change and provide affordable, healthy food for the whole world. Support from the financial sector is key to making this transition a success.

How Democracy Can Win Again
Gergely Karácsony (Project Syndicate) Sep 14, 2021
The democratic erosion and state capture in Hungary is symptomatic of deeper structural problems that are afflicting most democracies and even threatening the future of human civilization. Faced with such challenges, democrats must not allow themselves to succumb to fatalism or apathy.

Financial innovation today and tomorrow
Josh Lerner and Amit Seru (VoxEU) Sep 14, 2021
Financial innovation is intensely controversial, yet we know little about where or by whom these new products and services are developed. This column looks at over 24,000 financial US patents applied for between 2000 and 2018 to analyse the nature of financial patents. A surge in financial patenting was driven by IT firms and firms in industries outside of finance. Financial regulatory actions seem to have adversely affected innovation by financial firms, while regions with the highest technological opportunities attracted financial innovation by IT and non-financial firms.

The many faces of 'pricing power'
FT View Sep 15, 2021
Competitive pressures will limit companies' ability to pass on higher costs.

Brexit has become an exercise in quiet damage limitation
Chris Giles (FT) Sep 15, 2021
London and Brussels have arrived at an uneasy equilibrium that is in everybody's interest to maintain.

Inflation panic? Don't tell the bond market
Jamie Powell (FT) Sep 15, 2021
A fun chart to tide you over.

How Cryptocurrency Can Keep Americans Free
James Poulos (NYT) Sep 15, 2021
The confluence of tech and finance has produced a nascent soft social credit system. Digital currency may be the only way out.

Delta Tells the Economy, Not So Fast
Mark Zandi (NYT) Sep 15, 2021
The continuing struggles of U.S. cities suggest the worst of the damage is far from over.

Defining Inflation Down
WSJ Sep 15, 2021
Voters know how much prices are rising even if politicians don't.

The Federal Reserve Should Still Start Tapering
Bloomberg View Sep 15, 2021
Moderate consumer-price data from August is good news. But the central bank's bond-buying program needs to be pared back regardless.

Evergrande Gives China an Impossible Equation to Solve
Shuli Ren (Bloomberg View) Sep 15, 2021
The developer's biggest problem is that its working capital is tied to a massive inventory, largely composed of unfinished projects. Empty parking lots, anyone?

The Genius of Abenomics Emerged Long After Abe
Daniel Moss (Bloomberg View) Sep 15, 2021
Two main pillars of the former premier's signature policy, fiscal and monetary largesse, are well-suited for the pandemic era. Japan's next prime minister would do well to preserve them.

Where Has All the Money Gone?
Robert Skidelsky (Project Syndicate) Sep 15, 2021
Quantitative easing risks generating its own boom-and-bust cycles, and can thus be seen as an example of state-created financial instability. Governments must now abandon the fiction that central banks create money independently from government, and must themselves spend the money created at their behest.

Countering Chinese Industrial Policy Is Counterproductive
Chang-Tai Hsieh (Project Syndicate) Sep 15, 2021
The United States' real business-related challenge vis-à-vis China is the tradeoff between national security and the benefits of economic exchange, not China's support for state-owned firms or its industrial subsidies. And the worst thing America could do is to enact industrial policies of its own.

(Successful) democracies breed their own support
Daron Acemoglu, Nicolas Ajzenman, Cevat Giray Aksoy, Martin Fiszbein, and Carlos Molina (VoxEU) Sep 15, 2021
Concerns about the viability of democracy have deepened in recent decades amid growing discontent between and among voters, the rapid spread of misinformation, and the rise of extremist and populist parties across the West. Using large-scale survey data covering more than 110 countries, this column shows that individuals with longer exposure to successful democracies tend to exhibit stronger support for democratic institutions. Democracies breed their own support – but only when they can successfully deliver on promises of economic growth, peace, political stability, and the provision of essential public goods.

The United States Has No Plan to Save Lebanon
Anchal Vohra (FP) Sep 15, 2021
The country's desperate citizens are increasingly investing their hopes in a U.S. government that has other priorities.

Industrial Policy's Comeback
Mariana Mazzucato, Rainer Kattel, and Josh Ryan-Collins (BR) Sep 15, 2021
Market fundamentalism has failed to improve economic and social conditions. Now, we need a mission-oriented approach to the economy that embraces an active role for government in spurring growth and innovation.

The Democratic party's double standards on wealth inequality
Edward Luce (FT) Sep 16, 2021
Now is the time to redress inequality — but watered-down proposals will benefit the rich, not 'middle-class' voters.

Could behavioural nudges help us tackle the climate crisis?
Gillian Tett (FT) Sep 16, 2021
New research suggests three tools can change habits for the better.

Do We Need to Shrink the Economy to Stop Climate Change?
Spencer Bokat-Lindell (NYT) Sep 16, 2021
The degrowth movement argues climate change isn't a problem we can simply innovate our way out of.

Pop Goes the Chinese Property Bubble?
WSJ Sep 16, 2021
Evergrande may become the biggest casualty but it won't be the last.

The Fed Follows Misguided 'Forward Guidance'
Benn Steil and Benjamin Della Rocca (WSJ) Sep 16, 2021
The central bank could bind itself to its own forecasts if it were good at predicting the future, but it isn't.

The Country Where the Banks Ran Out of Money
Hussein Ibish (Hussein Ibish) Sep 16, 2021
Lebanon depends on its financial industry. Now the new government has to figure out how to recapitalize its institutions or the country may cease to exist.

India's Green Growth Imperative
Dhruba Purkayastha (Project Syndicate) Sep 16, 2021
India must decarbonize more, and fast, but it also needs to generate sufficient economic growth to lift one-third of its 1.3 billion people out of poverty. Achieving that without drastically increasing carbon dioxide emissions will require policymakers to pursue a radically different green growth strategy.

Will the BRICS Ever Grow Up?
Jim O'Neill (Project Syndicate) Sep 16, 2021
In the two decades since Brazil, Russia, India, and China were recognized for their unique growth potential, they, along with South Africa, have so far proven incapable of uniting as a meaningful global force. This comes at the expense not only of the bloc, but of better global governance as well.

Carbon tax, cross-border carbon leakage, and border tax adjustments
Haitao Cheng and Jota Ishikawa (VoxEU) Sep 16, 2021
As a result of global warming, carbon taxes and emissions trading policies are in the spotlight. However, lack of cross-country coordination can cause carbon leakage and increases in emissions. This column analyses the effectiveness of carbon taxes and border tax adjustment policies in reducing emissions and shaping firms' decisions on abatement investment and firm location. It shows that a higher carbon tax can sometimes lead to higher global emissions and discourage investment in clean technology. Likewise, border tax adjustments should be designed carefully to ensure lower emissions and compatibility with WTO rules.

Inflation is back with a vengeance — but is that a bad thing?
Sebastian Mallaby (FT) Sep 17, 2021
The world is moving into phase 2 of the inflation debate but we are far from the disaster of the 1970s.

If the bond bull market is over will a bear follow?
Merryn Somerset Webb (FT) Sep 17, 2021
'Transitory' inflation is lingering longer than central banks expected.

Is it time for the Bank of England to start tightening monetary policy?
Chris Giles (FT) Sep 17, 2021
Ending quantitative easing would show that it is serious about inflation risks.

Global debt is soaring — and we need to talk about it
Gillian Tett (FT) Sep 17, 2021
Sky-high borrowing levels could have profound consequences for the global economy.

Investors rein in risk for fear of 'doing something stupid' before year end
Katie Martin (FT) Sep 17, 2021
More cautious mood sinking into markets as economic optimism fades.

Merkel Leaves the German Economy With Trouble Under the Hood
Jack Ewing and Melissa Eddy (NYT) Sep 17, 2021
Chancellor Angela Merkel steered Europe through crises, and Germany has boomed during her tenure. But she has ducked changes needed to ensure the success lasts, analysts say.

Amid China's default drama, dollar bond buyers upbeat
William Pesek (AT) Sep 17, 2021
As investors quake over the seismic default drama surrounding China Evergrande Group, it seems that one vital crowd hasn't gotten the memo: buyers of Mainland dollar bonds. Demand for Chinese dollar notes staged a comeback in August even as China Evergrande concerns wreaked havoc on the broader credit markets in Asia's biggest economy.

To Safeguard Global Financial Stability, Boost the Resilience of Investment Funds
Tobias Adrian, Antonio Garcia Pascual, Ranjit Singh, and Jay Surti (IMF) Sep 17, 2021
Our policy recommendations would be wins for both issuers and investors alike, more than offsetting any adjustment costs borne by them.

Unprecedented Inflation? That's What CEOs See
Brooke Sutherland (Bloomberg View) Sep 17, 2021
No, prices aren't spiraling the way they did in the 1970s. But expectations matter and manufacturing CEOs are speaking a different language than investors.

Norway's Sovereign Duty
Christiana Figueres, Håvard Halland, and Knut Anton Mork (Project Syndicate) Sep 17, 2021
Having built its wealth by pumping hydrocarbons out of the seabed, Norway has an obligation to leverage the power of its massive sovereign wealth fund in the fight against climate change. With COP26 fast approaching, it should focus on building a new coalition of sovereign funds committed to net-zero emissions targets.

What the Energy Transition Needs
Mads Nipper (Project Syndicate) Sep 17, 2021
The path to a decarbonized world exists, but it is currently strewn with regulatory and market obstacles. With an estimated $131 trillion of investment needed to achieve mid-century climate targets, governments and the private sector must come together to ensure that incentives are properly aligned.

Inflation in the Shadow of Debt
John H. Cochrane (Project Syndicate) Sep 17, 2021
Generally speaking, inflation can be stabilized with little recession if people believe the necessary policy tightening will be seen through, rather than abandoned at the first signs of pain. Unfortunately, US economic authorities have done little to inspire such confidence.

The impact of trade costs can be weak or strong – depending on how much countries trade
Natalie Chen and Dennis Novy (VoxEU) Sep 17, 2021
Many countries try to bring down trade costs by striking free trade agreements, forming currency unions or joining the WTO. But when trade costs fall, how much does trade increase? This column finds that the impact depends on how intensively countries trade. Falling trade costs boost trade between countries with initially 'thin' trading relationships where the scope for growth is largest. But they have a much weaker impact for country pairs that are already trading heavily.

Alarm bells are ringing unheeded in a world yearning for optimism
Eric Platt (FT) Sep 18, 2021
Rush by investors to park cash in credit markets may be sowing the seeds of the next crisis.

The beguiling promise of decentralised finance
Economist Sep 18, 2021
And its many perils.

What Germans Think They Know About Inflation Is Wrong
Andreas Kluth (Bloomberg View) Sep 18, 2021
Yes, inflation is dangerous, but deflation may be even more so, as the rise of Hitler showed.

Congress, Raise the Debt Limit
Janet Yellen (WSJ) Sep 19, 2021
We are finally emerging from the pandemic crisis. Let's not plunge ourselves into a financial one.

How to make sense of the inflation data
FT View Sep 19, 2021
Surveys of expectations suggest price rises are broadening.

Robots have entered a new phase — and Cathie Wood's Ark is betting on it
Leo Lewis (FT) Sep 19, 2021
Despite Masayoshi Son's doubts, Japan still has the ability to lead a tech-centric global industrial revolution.

Right time for China's 'common prosperity' drive
Cai Fang (EAF) Sep 19, 2021
The Chinese leadership's reiteration of common prosperity as a principal policy goal is thus very timely.

The Fed's Time Is Running Out for a Timely Taper
Mohamed A El-Erian (Bloomberg View) Sep 19, 2021
The central bank should start pulling back on its $120 billion monthly bond purchases and signal when it will lift rates, but it probably won't.

The "Ease of Doing Business" List Deserved to Die
Mihir Sharma (Bloomberg View) Sep 19, 2021
The World Bank's famous and fought-over index never really measured what it purported to measure, so it shouldn't come as a surprise that countries tried to game the system.

Automation will not end banks' grunt work
FT View Sep 20, 2021
Systematising the tedious tasks of juniors is only partially good news.

Britain does not need to revise its fiscal rules
FT View Sep 20, 2021
Changing the framework for managing public finances undermines its credibility.

Evergrande is hostage to Beijing's property pain threshold
James Kynge (FT) Sep 20, 2021
China wants to signal it is serious about cooling sector but not at the cost of an economic engine.

Global Markets Swoon as Worries Mount Over Superpowers' Plans
Matt Phillips, Eshe Nelson and Coral Murphy Marcos (NYT) Sep 20, 2021
The S&P 500 closed down 1.7 percent over a number of jitters, like China's sputtering real estate market and the phasing out of stimulus measures in the United States.

Does the U.S. Economy Still Need Booster Shots?
Peter Coy (NYT) Sep 20, 2021
This week, the Federal Reserve may hint at an answer.

Use the Debt Ceiling to Reduce the Debt
Jeb Hensarling (WSJ) Sep 20, 2021
The real default risk arises from Congress's endless borrowing, not from the limit on it.

China throws a wrench into a transpacific trade pact
Economist Sep 20, 2021
Its application to join the CPTPP may not prosper, but it creates mischief.

What Comes After the Demographic Dividend? East Asia is Finding Out
Charles Kenny (CGD) Sep 20, 2021
Japan's demographic present is the near future for a number of East Asian economies.

Men Are Losing Their Grip in the New Economy
Allison Schrager (Bloomberg View) Sep 20, 2021
Can democracy be exported? This column uses a large cross-country dataset from 1960 to 2015 to show that, while the 'top-down' imposition of political institutions is not desirable and rarely successful, democracy can indeed be 'exported' – from more democratic to less democratic countries – through repeated trade interactions. The finding suggests that economic integration might be advantageous to less democratic countries not only directly by fostering GDP growth, but also indirectly by favouring the transition to democracy and the socioeconomic and political benefits associated with it.

Getting Finance Onside for Climate
Joseph E. Stiglitz (Project Syndicate) Sep 20, 2021
With too much of the financial industry still funding long-term investments in the fossil-fuel sector, it is clear that a more robust government intervention is needed. Here is what policymakers can do to move the dial in a meaningful way.

What Green AI Needs
Geoff Mulgan (Project Syndicate) Sep 20, 2021
From optimizing electricity grids to predicting weather patterns, artificial intelligence and big data could play a major role in decarbonizing the global economy. But without new frameworks and rules of the road, digital technologies could end up doing more harm than good for the climate.

New Business Models for a New Future
Angel Gurría (Project Syndicate) Sep 20, 2021
To address the global challenges that have been amplified by the COVID-19 pandemic, the public and private sectors will have to collaborate much more closely. Just as governments must act as market makers and shapers, corporations must develop new business models and performance metrics.

Economic integration, democratic capital, and the 'export' of democracy
Giacomo Magistretti and Marco Tabellini (VoxEU) Sep 20, 2021
Can democracy be exported? This column uses a large cross-country dataset from 1960 to 2015 to show that, while the 'top-down' imposition of political institutions is not desirable and rarely successful, democracy can indeed be 'exported' – from more democratic to less democratic countries – through repeated trade interactions. The finding suggests that economic integration might be advantageous to less democratic countries not only directly by fostering GDP growth, but also indirectly by favouring the transition to democracy and the socioeconomic and political benefits associated with it.

China Economy Gauge and Sensitivity
Brendan McKenna and Jessica Guo (WF Econ Group) Sep 20, 2021
A renewed COVID outbreak, natural disasters, enhanced regulatory scrutiny and noticeably unsettled financial markets have all contributed to a slowdown in China's economy. As these indicators have deteriorated, we have recognized the need to monitor the health of China's economy at a regular frequency, using a comprehensive approach. In that context, we are introducing our China Economy Gauge, a dashboard-style monitor designed to track the evolution of local economic conditions in China as well as potentially offer insight into the direction of monetary policy. As of now, the gauge indicates China's economy is indeed under pressure. That is consistent with multiple downward revisions we have made to our GDP forecast this year, and underpins our expectation for the People's Bank of China (PBoC) to again lower its Reserve Requirement Ratio (RRR) before the end of this year. In addition, we created a China Sensitivity framework in an effort to identify which countries could be vulnerable, both economically and from a financial markets perspective, to a prolonged economic slowdown in China as well as elevated volatility in Chinese financial markets. The combination of export exposure to China as well as statistical analysis gives us a sense for which countries could be most at risk should China experience a "hard landing" type of scenario.

Net zero goals cannot fall victim to the energy crisis
FT View Sep 21, 2021
Governments must address hardship of high prices without jeopardising decarbonisation.

The real risk from Evergrande
Robert Armstrong (FT) Sep 21, 2021
The main worry is growth, not contagion.

Inequality is behind central bank dilemma
Martin Wolf (FT) Sep 21, 2021
Stagflation would create devastating problems for weaker borrowers, notably heavily indebted emerging economies.

A New Agenda for Macro Stability
Antoinette M. Sayeh (IMF) Sep 21, 2021
The global economy is on a path to recovery – we are on sounder footing today than we were a year ago. But this recovery hides a deeply worrying difference between countries – it is powered by only a few, leaving others at greater risk of falling behind. In other words, the recovery is creating a growing divergence between advanced economies and many emerging and developing economies.

Can Mexico help bring supply chains back to North America?
Jeffrey J. Schott (PIIE) Sep 21, 2021
International trade and investment have been buffeted over the past three years by US-China trade war tariffs, high-technology export controls, and other economic sanctions targeting Chinese policies. The COVID-19 pandemic has further disrupted production and created bottlenecks transporting goods within and between countries. International businesses have had to recalibrate their supply chains to make them more resilient to these and other shocks.

Bored of Builders, Singapore Millennials Get Their Own Blackstone
Andy Mukherjee (Bloomberg View) Sep 21, 2021
Finance in the digital age is turning impatient. Younger investors would rather leave the creation of long-gestation assets to sovereign wealth funds and state institutions.

The Myth of Green Capitalism
Katharina Pistor (Project Syndicate) Sep 21, 2021
It is perfectly understandable that major corporations and private financial institutions would rally behind new disclosure standards and other market-based measures to address climate change. It is an approach that allows the owners of capital yet another way to avoid a real reckoning.

Goldilocks Is Dying
Nouriel Roubini (Project Syndicate) Sep 21, 2021
Given today's high debt ratios, supply-side risks, and ultra-loose monetary and fiscal policies, the rosy scenario that is currently priced into financial markets may turn out to be a pipe dream. Over the medium term, a variety of persistent negative supply shocks could turn today's mild stagflation into a severe case.

Can Xi End China's Gilded Age?
Yuen Yuen Ang (Project Syndicate) Sep 21, 2021
The period after America's late-nineteenth century Gilded Age laid the domestic foundation for the country's international primacy in the twentieth century. Likewise, China's global prospects will depend on whether President Xi Jinping can lead the country into its own era of progressive reform.

Reclaiming Central Banks
Ann Pettifor (Project Syndicate) Sep 21, 2021
By serving private capital markets rather than citizens and taxpayers, central banks constitute a major hurdle to meaningful climate action. A half-century after US President Richard Nixon and his advisers reshaped the international monetary system, we now need to transform it again.

The lasting impact of the Covid crisis on economic potential
Luke Bartholomew and Paul Diggle (VoxEU) Sep 21, 2021
As the global economy recovers from the immediate economic impact of the Covid crisis, attention is increasingly turning to the long-run impact of the shock on productivity. This column identifies several channels – including labour market hysteresis, impaired skill acquisition, belief scarring, an increase in zombie companies, and policy errors – through which the lasting harm will outweigh any positive supply shocks caused by the pandemic. The authors estimate long-term output losses in the order of 3% of global GDP. Scarring will be greater in some economies than others, pointing to the importance of policy in mediating and offsetting these channels.

Why tax havens may bias productivity measurement
Vincent Aussilloux, Jean-Charles Bricongne, Samuel Delpeuch, and Margarita Lopez Forero (VoxEU) Sep 21, 2021
French multinational enterprises have been expanding their activity abroad, including for profit-shifting purposes. These tax planning activities may alter the measurement and our understanding of their real activity. This column uses French micro-data from 1997 to 2015 to show that firm-measured productivity declines in the years following multinationals' establishment of tax havens. Had these new presences in tax havens not been established, the annual growth of French aggregate labour productivity would have been 0.06% higher, which is tantamount to 9.7% of the observed annual aggregate labour productivity growth.

Can China's outsized real estate sector amplify a Delta-induced slowdown?
Kenneth Rogoff (VoxEU) Sep 21, 2021
The Chinese economy was able to sharply rebound from the Covid pandemic, helping to sustain a housing boom. The country faces a multitude of challenges over the medium term, however, on top of the much more virulent Delta variant. This column argues that the footprint of China's real estate sector has become so large – with real estate production and property services accounting for 29% of the country's GDP – that absorbing a significant housing slowdown would significantly impact overall growth, even absent a financial crisis.

China Wants to Join the Trade Pact Once Designed to Counter It
Wendy Cutler (FP) Sep 21, 2021
Beijing filed its formal application to join the CPTPP.

State Department Plans 'China House' to Counter Beijing
Jack Detsch (FA) Sep 21, 2021
Some fear larger State Department China desk could be a "massive bureaucratic blob."

The knock-on effects of the Evergrande affair
FT View Sep 22, 2021
Bringing the real estate sector down to size will slow China's growth.

Politics trumps money in Chinese markets
Andy Xie (FT) Sep 22, 2021
Even Beijing may not know whether it will be comfortable with Big Tech in the future and in what form.

Europe should not return to pre-pandemic fiscal rules
Joseph Stiglitz (FT) Sep 22, 2021
Given the challenges the EU faces today, a new round of austerity would be calamitous.

Low vaccination rates blamed for 'diverging' south-east Asia growth
John Reed (FT) Sep 22, 2021
Asian Development Bank says economic recovery in some countries is being held back by Covid outbreaks.

What we can learn from Afghanistan's nascent crypto economy
Gillian Tett (FT) Sep 22, 2021
Reports suggest some relatively well-off Afghans are turning to crypto to store wealth or move money overseas.

Beyond Evergrande's Troubles, a Slowing Chinese Economy
Keith Bradsher and Alexandra Stevenson (NYT) Sep 22, 2021
Investors are watching whether the property developer defaults. But in the background, the world's No. 2 economy is flashing numerous warning signs.

Xi Jinping Makes China a Dangerous Place for Investment
Dennis Kwok and Johnny Patterson (WSJ) Sep 22, 2021
What the state wants, the state gets. That makes the business climate unstable and ethically risky.

Europe Faces a Fragile Economy as the Merkel Era Ends
Brendan Brown (Mises Wire) Sep 22, 2021
A euro collapse, rather than gas prices and bottlenecks, is the most likely source of sustained high CPI inflation in Europe following the Merkel era.

How Countries Can Diversify Their Exports
Gonzalo Salinas (IMF) Sep 22, 2021
A new approach to explaining diversification underscores the need to effectively shorten geographic distance by enhancing connectivity between nations.

The Fed signals that it will taper soon
Joseph E. Gagnon (PIIE) Sep 22, 2021
The Federal Open Market Committee (FOMC or Fed) signaled on September 22 that it will probably start to taper off its bond purchases soon because it believes the US economy is likely to continue to perform strongly despite the Delta wave of COVID-19 infections. Markets had expected the taper signal, but the "dot plot" of FOMC participants' expectations of future policy interest rates shifted up a tiny bit, and participants are now evenly divided as to whether the first rate hike will occur in 2022 or 2023. Short-term bond yields rose a small amount, but longer-term yields ticked down. In its revised economic projections, the FOMC continues to show a dramatic decline in inflation next year, with inflation remaining essentially flat at its 2 percent target over the next three years despite a strong economy with low unemployment and easy monetary policy.

FDR Needed Two Global Crises to Reshape the Economy. Will Biden?
Noah Smith (Bloomberg View) Sep 22, 2021
Centrist Democrats threatened FDR's transformative agenda until WWII came along. Social unrest and China weigh in the balance if Biden can't crush a similar revolt.

Taming the Stagflationary Winds
Mohamed A. El-Erian (Project Syndicate) Sep 22, 2021
Rising inflation and declining growth are more likely to be a part of the global economy's upcoming journey than features of its destination. But how policymakers navigate this journey will have major implications for longer-term economic well-being, social cohesion, and financial stability.

China Infected By Financial Capitalism
Michel Santi (World Economics) Sep 22, 2021
The weight of the real estate industry has now become significant in the Chinese economy. Whereas it made up 5% of GDP in 1995, it is now one of the country's main growth drivers, coming to more than 30% of economic activity. It is more or less at the same level as the real estate markets in Spain and Ireland prior to the bubble bursting. At a time when the country's interest rates were pushed extremely low over a long period and when liquidity was in abundance, investment in real estate quickly took what was essentially a speculative turn in China, without having any link to demand for housing or offices. It's simple really: prices in the big cities rocketed up nearly sevenfold over 20 years while, in comparison, US real estate (as a national average) didn't even double between 2000 and 2007, before the subprime crisis hit.

Foreign Business Exposure, Policy Uncertainty, and Capital Flight from Home: Evidence from China
Dongxu Li and Xiaoxue Hu (VoxChina) Sep 22, 2021
Using subsidiary-level data of 3,863 Chinese nonfinancial firms from 2000 to 2019, we show that the multinationals have 5.3% higher capital expenditures than the domestic firms relative to the average. The multinational firms' offshore investment increases with policy uncertainty about the domestic markets. Our analysis suggests that in the face of domestic uncertainty, multinational firms switch to their offshore markets as a leeway to reallocate investment rather than as a response to offshore investment opportunities, as a way to access to foreign capital, or due to competition in the domestic market.

Behind the smiles, competition heats up in the Gulf
David Gardner (FT) Sep 23, 2021
Aggressive moves by Saudi Arabia, the UAE and Qatar to boost their economies could be a zero-sum game.

Japan's turnround still underrated by investors
Miyuki Kashima (FT) Sep 23, 2021
Fiscal support and reform needed to continue progress on the economy under new prime minister.

Innovation still requires smart, even barmy, innovators
John Thornhill (FT) Sep 23, 2021
Progress depends on collective endeavour, but breakthroughs are often down to unorthodox individuals.

A plan to fund the global green transition already exists
Nicholas Mulder (FT) Sep 23, 2021
The highly successful Lend-Lease programme of the 1940s is a model for fighting climate change.

Real carbon taxes are the next big political battle
Simon Kuper (FT) Sep 23, 2021
Gone will be that £19 London-Mallorca return flight on Ryanair. Our clothes, petrol, meat and coffee will all get pricier.

As Debt Default Looms, Yellen Faces Her Biggest Test Yet
Alan Rappeport (NYT) Sep 23, 2021
The Treasury secretary must wade into a standoff between Democrats and Republicans over raising the debt limit

America Risks an 'Evergrande Moment'
Joseph C. Sternberg (WSJ) Sep 23, 2021
Like China, most of the developed nations have relied too much on property to fuel growth.

To contain China, joining the Pacific trade pact might be more effective than new submarines
Fareed Zakaria(WaPo) Sep 23, 2021
What if the China challenge is fundamentally economic and technological?

US default a greater risk than Evergrande meltdown
William Pesek (AT) Sep 23, 2021
As distracting as the default drama looming over China Evergrande Group may be, the one percolating in Washington is by far the more existential of the two. Brinksmanship over the US debt ceiling is bringing back traumatic memories Beijing would prefer to keep buried, a fiasco that left China, then the biggest holder of US Treasury debt, cold.

Evergrande shares surge as collapse risk eases
Jeff Pao (AT) Sep 23, 2021
Indebted Chinese property developer Evergrande Group's shares rebounded strongly on Thursday (September 23) after group chairman Hui Ka-yan reportedly met 4,000 staff in a town hall meeting and called for accelerated property construction. Evergrande's shares have lost some 80% so far this year on investor fears of a default.

Brazil: Sustaining a Strong Recovery
IMF Sep 23, 2021
Brazil's economy has returned to pre-pandemic levels, supported by booming terms of trade and robust private sector credit growth.

Joining the CPTPP is a long process and needs consensus among existing members
Jeffrey J. Schott (PIIE) Sep 23, 2021
China formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in a letter to New Zealand's trade minister on September 16, 2021, the first step in a long and complicated admission process. The United Kingdom is more advanced in the process, having begun accession talks in the summer of 2021 with the agreement's 11 members, and White House press secretary Jen Psaki indicated the United States may consider rejoining if the deal is upgraded.

China's CPTPP bid puts Biden on the spot
Jeffrey J. Schott (PIIE) Sep 23, 2021
China's application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was not a surprise to those following the signals out of Beijing. For two years, President Xi Jinping has delivered speeches indicating his intentions to join the trade pact that President Donald Trump walked away from in the beginning of his administration in 2017. But don't expect trade negotiations to progress anytime soon. Chinese accession talks will be time-consuming and contentious, and that is if none of the 11 CPTPP members, including Australia and Japan, vetoes the exercise from the start.

The Fed Has to Grapple With Mounting Uncertainty
Bloomberg View Sep 23, 2021
Thanks to the pandemic, its job was already difficult. As risks keep building, things aren't getting any easier.

China Wants to Join the Trade Pact Once Designed to Counter It
Mihir Sharma (Bloomberg View) Sep 23, 2021
Beijing's cynical bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership could break the genuinely high-standard trade agreement.

Why Did China Even Allow Evergrande to Last This Long?
Shuli Ren (Bloomberg View) Sep 23, 2021
After short-sellers were discouraged by a 2016 Hong Kong ruling, the developer and its politically astute founder got to roam free and build up huge amounts of debt.

The Developing World's Hidden Inflation Risks
Rabah Arezki and Jean Pierre Landeau (Project Syndicate) Sep 23, 2021
A combination of specific inflationary shocks and vulnerabilities could seriously threaten developing economies' stability and prosperity. Although part of the policy response to these risks is in the hands of poorer countries themselves, the international community can and must help.

El Salvador's Bitcoin Folly
Jeffrey Frankel (Project Syndicate) Sep 23, 2021
Many aspects of cryptocurrencies are baffling, not least the success of a joke like Dogecoin. But El Salvador's recent adoption of Bitcoin as legal tender alongside the US dollar is perhaps the strangest and potentially most worrying example of all.

America's Losing China Strategy
Anne O. Krueger (Project Syndicate) Sep 23, 2021
After declaring that "America is back" and rejecting almost everything that Donald Trump represented, the Biden administration seemed poised to reclaim the mantle of US leadership within the open market-oriented international order. Yet in its strategy to counter China, it is behaving utterly Trumpian.

European Monetary Policy and FX Roundup
Nick Bennenbroek (WF Econ Group) Sep 23, 2021
It has been a particularly busy week across Europe, with several of the G10 central banks making monetary policy announcements and contributing to varying degrees of market excitement. In this report we briefly recap these announcements and assess their FX implications. Norway's central bank became the first G10 central bank to raise rates with a 25 bps rate hike as the economy returns to a more normal growth path. While the central bank's projections signaled further rate hikes, the increases penciled in for 2022 still look a touch light to us. We see upside risk to our current forecast of Norwegian krone appreciation. The Bank of England held monetary policy steady and, despite cross-currents affecting the U.K. economy, said the case for modest tightening has potentially strengthened. With the announcement we have brought forward our expected timing for rate increases, and we now expect the Bank of England to initiate a rate hike cycle with an increase in May 2022, followed by November 2022. While the pound may be subject to some near-term uncertainties, we expect the U.K. currency to strengthen against the U.S dollar and the euro over the medium-term. Sweden's central bank and Switzerland's central bank both held monetary policy steady, with no indication either central bank will move to a less accommodative monetary policy stance for the foreseeable future. Given the strength of Sweden's economic rebound we still anticipate modest Swedish krona strength versus the euro. For Switzerland, moderate Swiss growth and inflation, combination with some improvement in global economic and market sentiment over time, should see the franc soften versus the euro.

Data scandal taints IMF head and World Bank
FT View Sep 24, 2021
Allegations about the fund's Georgieva risk undermining both institutions.

The Fed has signalled an inflection point
FT View Sep 24, 2021
US taper may be steeper, and its first rate rise sooner, than expected.

Is it time to avoid investing in China?
George Magnus (FT) Sep 24, 2021
While economic growth remains strong, Beijing's crackdown on private business bodes ill for portfolio investors.

Climate change is getting real for investors
Katie Martin (FT) Sep 24, 2021
Gas crisis and impact of simmering planet now having direct effect on asset allocation decisions.

Look to Japan for lessons on Evergrande
Gillian Tett (F) Sep 24, 2021
The fate of a regional bank in the 1990s shows what happens when the pillar of government support is removed.

Could This Covid Wave Reverse the Recovery? Here's What to Watch.
Ben Casselman (NYT) Sep 24, 2021
Some businesses are still hurting, and federal aid has wound down. But economists see sources of resilience and signs of strength.

Evergrande bubble popped in time: no Lehman moment
David P. Goldman (AT) Sep 24, 2021
Equity markets turned in their strongest two-day performance since last May, as fears of contagion from China's Evergrande real estate giant faded. The stage-managed crisis was a preemptive popping of a bubble – the sort of action that US authorities might have been wise to take in 2004 before the collapse of the US housing market nearly took down the global banking system.

A Global Fiat Currency: "One Ring to Rule Them All"
Thorsten Polleit (Mises Wire) Sep 24, 2021
The One Ring of power stands for the particularly evil idea of creating a state of states, a world government, a world state. A one-world fiat currency is similarly dangerous.

What's next for poverty reduction policies in China?
Maria Ana Lugo, Martin Raiser, and Ruslan Yemtsov (Brookings) Sep 24, 2021
Growth, mostly.

What is the US-EU Trade and Technology Council? Five things you need to know
Chad P. Bown and Cecilia Malmström (PIIE) Sep 24, 2021
Semiconductors are in short supply, limiting the production of automobiles in both the United States and European Union. The stunning spread and potential abuse of technologies like artificial intelligence (AI) is potentially impacting everything from digital commerce to surveillance of minorities to voting and thus to democracy itself. The spectacular rise of China's state-driven economic model is posing new challenges for a postwar trading system that had mostly market economies in mind when it established guardrails to help shepherd global economic integration.

Banks May Be Our Best Hope in Fighting Climate Change
Paul J. Davies (Bloomberg View) Sep 24, 2021
Governments already use the industry against money laundering and criminal activity. It's a more efficient way of changing behavior than imposing direct taxes.

A Perfect Storm Threatens to Engulf the Bank of England
Mark Gilbert (Bloomberg View) Sep 24, 2021
The "Old Lady of Threadneedle Street" faces a tough challenge as forces threaten to drive the economy into stagflation.

Housing Market Can Look Forward to a More Boring 2022
Conor Sen (Bloomberg View) Sep 24, 2021
The pandemic tormented homebuyers and builders with blistering demand, soaring prices, supply shortages, and then a slump. Next year those bumps should smooth out.

Is Doing Business Really Dead?
Kaushik Basu (Project Syndicate) Sep 24, 2021
The World Bank's recent decision to stop publishing its annual Doing Business report is an understandable initial reaction to revelations of data manipulation in favor of certain countries. But the Bank should use this interruption to develop a better report, rather than ending it for good.

The Right War for the US and China
Andrew Sheng and Xiao Geng (Project Syndicate) Sep 24, 2021
Either everyone wins the fight against climate change, or no one does. So, while the world's great powers – especially the United States and China – should prepare for war, they must wage it against the right enemy.

The Food Revolution Is Up to Us
Christiana Figueres (Project Syndicate) Sep 24, 2021
Even if the world were to move to carbon-free energy sources tomorrow, the climate crisis still will not have been addressed, because industrial agriculture would continue to drive both planetary warming and biodiversity loss. A food-systems revolution is therefore past due.

On the benefits of repaying
Francesca Caselli, Matilde Faralli, Paolo Manasse, and Ugo Panizza (VoxEU) Sep 24, 2021
Do countries benefit from servicing their debts during times of sovereign defaults? Colombia is typically regarded as the only large Latin American country that did not default in the 1980s, but this column argues that the case of Colombia is more complex than commonly assumed. Although it had to re-profile its debts, high-level political support from the US allowed Colombia to do so outside of the standard framework of an IMF programme. In the short to medium run, Colombia benefited from avoiding an explicit default, but this strategy did not lead to long-term reputational gains.

Evergrande leaves China's economy at a turning point
FT View Sep 25, 2021
Transition away from reliance on real estate will need deft handling.

Gas crisis shows why we must stop demonising fossil fuels
Merryn Somerset Webb (FT) Sep 25, 2021
The engineering challenges around renewables means we need to be realistic while waiting for the green transition.

Macro hedge funds find 2021 has not gone to script
Laurence Fletcher (FT) Sep 25, 2021
Bond yields defy expectations of some of the big names in industry.

Energy crisis is moment of truth for Europe's green ambition
Martin Sandbu (FT) Sep 25, 2021
Today's soaring bills reflect unfinished work and the need to galvanise climate politics.

Why the head of the IMF should resign
Economist Sep 25, 2021
A scandal over data and China has undermined her credibility.

China is a more important trading partner than the US for most CPTPP members
Jeffrey J. Schott (PIIE) Sep 25, 2021
Many CPTPP members rely on their trade ties with China and may wish to give it a waiver or delay on adhering to its standards. For 6 of the 11 CPTPP members, Chinese trade accounts for more than 20 percent of their total merchandise trade, and they may be reluctant to block Chinese accession for fear of reprisal. Others are unhappy with China's trade practices.

Why China's Evergrande Crisis Could Be Worse Than the U.S. Crash
Noah Smith ( Sep 25, 2021
With 30% of its GDP at risk, China's economy is more vulnerable to a real estate bust than either America's or Japan's was when their bubbles burst.

Your Top Evergrande Questions, Answered
Anjani Trivedi and Shuli Ren (Bloomberg View) Sep 25, 2021
A deep dive into the mechanics of the world's most indebted real estate company.

Oil's Going to Have a Good Winter, Even If You and I Don't
Julian Lee (Bloomberg View) Sep 26, 2021
A combination of strong demand and weak supply is sending crude toward $80 a barrel. That won't help those already worried about gas and electricity prices.

Evergrande's Fall Shows How Xi Has Created a China Crisis
Niall Ferguson (Bloomberg View) Sep 26, 2021
International trade and investment have been buffeted over the past three years by US-China trade war tariffs, high-technology export controls, and other economic sanctions targeting Chinese policies. The COVID-19 pandemic has further disrupted production and created bottlenecks transporting goods within and between countries. International businesses have had to recalibrate their supply chains to make them more resilient to these and other shocks.

Evergrande Was Just One of China's Blind Spots
Anjani Trivedi (Bloomberg View) Sep 26, 2021
Companies increasingly have turned to supply chain financing to grease the wheels of business. That's all well and good until repayments stop and credit tightens.

Central Banks Can Do a Lot Fast. Will It Be Their Downfall?
Daniel Moss (Bloomberg View) Sep 26, 2021
The race for leadership of the Fed is really an argument about the huge reach of modern central banks. This Q&A with Christina Paragon Skinner examines whether they do too much, or not enough.

How China Plans to Avert an Evergrande Financial Crisis
Keith Bradsher (NYT) Sep 26, 2021
Control of the banking system gives Beijing the tools to stop a broader collapse, officials believe, while censorship and police powers can stifle protests.

We Did the Research: Masks Work, and You Should Choose a High Quality Mask if Possible
Jason Abaluck, Laura H. Kwong and Stephen P. Luby (NYT) Sep 26, 2021
One of the largest studies to date shows masks work.

We should take the World Bank's 'Doing Business' report with a grain of salt
WP Sep 26, 2021
A scandal reveals the underbelly of an important ranking system.

Evergrande and China Power Curbs Are Two Sides of One Coin
David Fickling (Bloomberg View) Sep 27, 2021
For decades, Chinese growth has been fueled by credit and carbon. Beijing finally seems to be serious about tackling these twin issues, but at what cost to the economy?

Evergrande's troubles show China is just as susceptible to capitalism's ill effects
Ruchir Sharma (FT) Sep 27, 2021
The question is whether Xi Jinping will intervene to bail out indebted companies or let defaults spike.

Bonds? Why should we bother?
Merryn Somerset Webb (FT) Sep 27, 2021
A fabulous run for fixed income is no guide to the future — especially with rates expected to rise and prices fall.

When the long run in markets goes wrong
Philip Coggan (FT) Sep 27, 2021
UK equities are still below the level at the turn of the millennium.

Anti-China hysteria lies at heart of action against IMF's Georgieva
Jeffrey Sachs (FT) Sep 27, 2021
Her fall would prove the fund has mere trappings of multilateralism — leaving others to go their own way.

The Future of Finance and the Global Economy: Facing Global Forces, Shaping Global Solutions
Tobias Adrian (IMF) Sep 27, 2021
Overall, many scholars and many policymakers have largely agreed that five key global forces will be pivotal in influencing the economy of the future: first, the growth of digital technologies; second, the importance of sustainability, especially in the context of climate change; third, the role of changing demographics; fourth, the complexity of geopolitics; and fifth, the inevitability of structural transformation.

Who Knows How Much Damage Evergrande Could Do?
Bloomberg View Sep 27, 2021
Global regulators don't, and they should.

The risks of an uneven economic recovery in an unequal world
Ambar Narayan, Alexandru Cojocaru, Miriam Muller, and David Newhouse (Brookings) Sep 27, 2021
The COVID-19 pandemic has impacted the world's most vulnerable populations through lost lives, health, jobs, incomes, assets, and education. The World Bank's High-Frequency Phone Surveys (HFPS) help identify the main fault lines along which the pandemic's unequal impacts are emerging in developing countries (country-level indicators produced with this data are shown in an interactive dashboard). The pandemic intensified inequalities between higher-income and lower-income countries, men and women, and workers from different socioeconomic groups. While the initial impacts of the pandemic reinforced preexisting inequalities, the world must now turn its attention to the risks of an uneven economic recovery and the long-term threat it poses to social mobility and inequality.

Aluminum's Surge Is Really an Energy Crisis in Disguise
David Fickling (Bloomberg View) Sep 27, 2021
The industry needs to find another source of power or it won't survive the transition to a decarbonized society — and that means sectors from construction and consumer products to new-generation technologies will suffer.

Connecting the Dots in China
Stephen S. Roach (Project Syndicate) Sep 27, 2021
The new dual thrust of Chinese policy – redistribution plus re-regulation – will subdue the entrepreneurial activity that has been so important in powering China's dynamic private sector. Without animal spirits, the case for indigenous innovation is in tatters.

A Coup Attempt at the IMF
Joseph E. Stiglitz (Project Syndicate) Sep 27, 2021
Kristalina Georgieva, the IMF's Managing Director since 2019, has been a bold leader in confronting the economic fallout of the pandemic, as well as in positioning the Fund as a global pioneer on climate change. The efforts now underway to remove her are not only unjust, but could hamstring the Fund's management for years to come.

Greening the Hardest Sectors
Jules Kortenhorst (Project Syndicate) Sep 27, 2021
Addressing the climate crisis requires more than commitments from national governments and advances in renewable energy. Unless meaningful action is taken to decarbonize traditional hard-to-abate sectors like steel and commercial aviation, we will have little chance of keeping global temperatures at a safe level.

Defying the odds: Remittances held up during the COVID-19 pandemic
Kangni Kpodar, Montfort Mlachila, Saad Quayyum, and Vigninou Gammadigbe (VoxEU) Sep 27, 2021
Despite early predictions of a large collapse, remittance flows to developing countries have been surprisingly resilient during the COVID-19 pandemic. This column describes how migrants appear to have responded positively to rising COVID-19 infection rates in their home countries despite economic challenges in host countries. Fiscal stimulus in host countries played a role in keeping remittances buoyant. Travel restrictions, on the other hand, seem to have positively affected official remittance flows, suggesting such restrictions led migrants to use formal channels to send remittances instead of informal channels.

How to End Sri Lanka's Food Crisis
Amita Arudpragasam (FP) Sep 27, 2021
Ignoring economists and committing human rights violations come at a high cost for the country's economy.

Argentina could repeat its economic woes
FT View Sep 28, 2021
Government feuds hide need for private investment and a more open economy.

China and Evergrande Ascended Together. Now One Is About to Fall.
Alexandra Stevenson, Michael Forsythe and Cao Li (NYT) Sep 28, 2021
The property giant's success mirrored the country's transformation from an agrarian economy to one that embraced capitalism. Its struggles offer a glimpse of a new financial future.

More Diversity at the Fed
WSJ Sep 28, 2021
The two regional bank openings are a chance for fresh thinking.

The pandemic's uncertain impact on productivity
Maria Demertzis (Bruegel) Sep 28, 2021
The pandemic has certainly permanently affected our way of working. Whether this is for the better remains to be seen.

A Battle for Influence Within the Fed Is Brewing
Daniel Moss (Bloomberg View) Sep 28, 2021
The institution's inner circle has often regarded regional officials as irritating and noisy. The exit of Rosengren and Kaplan is a chance to undercut those positions.

Recovering Prosperity
Edmund S. Phelps and Mohammad A. Salhut (Project Syndicate) Sep 28, 2021
The foundation of American economic prosperity is being undermined by increasingly dominant firms and outdated corporate-governance practices. Fortunately, there are simple steps that regulators can take immediately to put the economy – and American society – on a sounder footing.

Reinvigorating Multilateralism
Carlos Alvarado Quesada, Jacinda Ardern, Stefan Löfven, Cyril Ramaphosa, Macky Sall, and Pedro Sánchez (Project Syndicate) Sep 28, 2021
The United Nations' global consultation last year showed that the vast majority of people want more international cooperation to address problems like pandemics and climate change. To meet that demand, world leaders must commit to strengthening multilateral institutions, starting with the UN itself.

Carbon Neutrality with Chinese Characteristics
Nancy Qian (Project Syndicate) Sep 28, 2021
Having committed to achieving carbon neutrality by 2060, China seemingly must pull off a miracle. But, on closer inspection, the target is well within striking distance, thanks to recent technological advances and the government's ability to impose its preferences on Chinese society.

What Climate Change Requires of Economics
Daron Acemoglu (Project Syndicate) Sep 28, 2021
Although the economics discipline has evolved over time to acknowledge environmental risks and costs, it has yet to rise to the challenge of climate change. A problem as massive as this one will require a fundamental reconsideration of some of the field's most deeply held assumptions.

Revisiting the link between corporate debt overhang and investment
Bruno Albuquerque (VoxEU) Sep 28, 2021
Corporate debt has increased substantially in many parts of the world during the pandemic, raising concerns about the effects on investment in the aftermath of the COVID-19 shock. This column uses data for a large panel of US firms to investigate the implications of firm-specific debt booms for investment. It finds that debt booms lead financially constrained firms to decrease capital expenditures and intangibles, underscoring the importance of dealing with debt overhang for managing the US recovery.

International Economic Outlook: September 2021
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Sep 28, 2021
The shift by global central banks to less accommodative policy is gaining increasing prominence, providing a boost to global bond yields. In addition to the Fed offering the clearest signal yet that tapering should begin shortly, the Bank of England delivered a hawkish announcement, while some other G10 central banks have or are expected to raise policy rates by the end of this year. The theme of rising global yields should support the U.S. dollar through year-end and weigh on emerging as well as G10 currencies. The economic news from China remains mixed, suggesting some downward pressure remains on China's growth outlook, while Chinese financial markets have also become more jittery given real estate market developments. These factors could reinforce the trend for U.S. dollar strength for the balance of 2021. Eventually, we expect a return to U.S. dollar weakness and foreign currency strength. Economic growth should return to a steadier trend next year, especially with consumers in many countries having plenty of savings to deploy. We expect lingering COVID concerns to recede and, despite the increasingly hawkish Fed, we still expect several international central banks to tighten monetary policy ahead of the U.S. central bank. For 2022, we think this adds up to foreign currency strength, on balance, and softness in the U.S. dollar.

Bond sell-off is a warning to the Fed
Mohamed El-Erian (FT) Sep 29, 2021
The longer central bank 'tapering' is delayed, the more the risk of a disruptive markets move.

Productivity growth is almost everything in the post-Covid recovery
Megan Greene (FT) Sep 29, 2021
Being more productive will help keep prices stable even in the face of higher wages.

Valuing stocks: why investors should look harder at expectations
Alfred Rappaport (FT) Sep 29, 2021
Many believe they examine assumptions of future cash flows in their decisions, but few do so rigorously and explicitly.

Taipei's bid to join transpacific trade pact could be held hostage by Beijing
Kathrin Hille (FT) Sep 29, 2021
Taiwan's application ticks more boxes but China has greater political sway over the bloc's members.

The U.S. Has a Way Back on Pacific Trade
Tim Groser (WSJ) Sep 29, 2021
And if Washington doesn't take it, the Indo-Pacific would likely become China's for the taking.

Time for China's Belt and Road to go green
Yixian Sun (AT) Sep 29, 2021
Chinese President Xi Jinping recently announced at the UN General Assembly that China "will not build new coal-fired power projects abroad." Xi's statement is expected to affect at least 54 gigawatts of proposed China-backed coal plants that are not yet under construction, saving CO2 emissions equivalent to three months of global emissions.

How Emerging European Economies Found a New Monetary Policy Tool
IMF Sep 29, 2021
The purchase of government bonds by emerging market central banks may be reminiscent for some of the days of monetary financing of the government, which was often followed by rising inflation and currency depreciations.

Evergrande Is the Consequence of An Unsustainable Economic Model
Alicia Garcia Herrero (BRINK) Sep 29, 2021
China's real estate sector is not bound to collapse out of Evergrande's demise. This does not mean, however, that everybody, especially not foreign investors, will be fully bailed out.

Inflation and Supply Shortages Are Waking Up the Bond Bears
Mark Gilbert (Bloomberg View) Sep 29, 2021
Debt yields are rising, along with concerns about faster inflation.

China's Housing Conundrum
Kenneth Rogoff (Project Syndicate) Sep 29, 2021
The Chinese government may yet succeed in insulating the broader market from the financial crisis at real estate giant Evergrande. But the larger challenge is to rebalance an economy that has depended for far too long on the bloated housing market for jobs and growth.

China's Risky Business Crackdown
Raghuram G. Rajan (Project Syndicate) Sep 29, 2021
Like the earlier campaign against corruption, Chinese President Xi Jinping's effort to control China's private sector is agreeable in its stated intentions, but questionable in its implementation. Quite possibly, the campaign for "common prosperity" will undermine the economic sectors that China needs to reorient its growth model.

Preventing an Evergrande Confidence Crisis in China
Shang-Jin Wei (Project Syndicate) Sep 29, 2021
A looming default by the Chinese property developer Evergrande has sent shock waves through global capital markets. The Chinese government and central bank have the means to prevent a full-blown financial crisis, but they need to communicate their strategy now in order to calm jittery investors.

Care Over Growth
Tim Jackson (Project Syndicate) Sep 29, 2021
In short order, the COVID-19 pandemic forced us to recognize that our capitalist economic system privileges second-order priorities like wealth at the expense of first-order ones like health. The question now is whether we will seize the opportunity to rethink the economy for the era of climate change.

The Real Effects of the Chinese Stock Market
Itay Goldstein, Bibo Liu, and Liyan Yang (VoxChina) Sep 29, 2021
In a 2019 survey jointly administered by the China Securities Regulatory Commission (CSRC) and the PBC School of Finance at Tsinghua University (Tsinghua PBCSF), more than 90% of Chinese public firms report that they closely monitor the stock market for the purposes of learning information to guide real investment decisions and of accessing external financing. These findings provide direct evidence for the wide existence of market feedback via a learning channel and a financing channel, suggesting that the Chinese stock market is not just a side show, but instead, affects the real economy.

The demise of Doing Business: Goodhart's Law in action
Thorsten Beck (VoxEU) Sep 29, 2021
The World Bank permanently suspended its Doing Business project earlier this month. This column argues that the suspension puts an end to a very useful data-collection exercise that went astray by focusing on rankings and political publicity. Beyond specific conflicts of interest within the World Bank, the demise of Doing Business reaffirms Goodhart's Law that when an index becomes a policy target, it ceases to be a good measure.

The effectiveness of ECB euro liquidity lines
Silvia Albrizio, Ivan Kataryniuk, Luis Molina Sánchez, and Jan Schaefer (VoxEU) Sep 29, 2021
Swap and repo lines have become an integral part of the ECB's toolkit. During the Global Crisis and the Covid-19 pandemic, the ECB announced more than 28 agreements to provide euro liquidity to foreign exchange markets, mainly within Europe. This column shows that the mere announcement instilled confidence in foreign exchange markets, reducing the premium paid by recipient country agents to borrow euros. Moreover, these lines not only prevent negative spillbacks to the euro area, but also push domestic bank equity prices in euro area countries highly exposed via banking linkages to targeted countries.

China's Property Sector Has Bigger Problems Than Evergrande
Logan Wright (FP) Sep 29, 2021
Chinese economic troubles may come far faster than the markets expect.

Big tech stocks show their dominance
Richard Waters (FT) Sep 30, 2021
Apple, Microsoft, Alphabet, Amazon and Facebook defy worries over a sector setback.

Biden's Energy Price Shock
WSJ Sep 30, 2021
His policies are already contributing to global oil supply shortages.

The China World Bank Scandal
WSJ Sep 30, 2021
Beijing allegedly intervened to improve its business ranking.

US default is global economy's ticking time bomb
William Pesek (AT) Sep 30, 2021
On Monday, Senate Republicans blocked a bill that would've funded the US government and staved off a default. That action, 10 years after similar Republican Party folly, spooked world markets as rarely before. Washington will run out of options to avoid breaching the debt limit on October 18, pushing the US to the brink of default.

Top US earners got richer during 1980s protectionism than periods of economic opening
Adam S. Posen (PIIE) Sep 30, 2021
Contrary to popular belief, trade liberalization has not been the biggest contributor to economic disparities in the United States. The reality is the opposite: The top earners have grown their earnings relative to other workers faster during periods of heightened protectionism, suggesting attempts to address inequality by limiting trade could backfire.

It's complicated: Lessons from 25 years of measuring governance
Daniel Kaufmann (Brookings) Sep 30, 2021
Today's reality: Diverse governance challenges in rich countries and beyond.

A Domestic US Development Bank in the Works? Lessons from the MDBs
Clemence Landers and Jocilyn Estes (CGD) Sep 30, 2021
The four proposed US development banks aim to address domestic market failures.

Idiosyncratic Risk in China Real Estate: What Does it Mean for the Property Market and Banks?
Stephen Chang, Annisa Lee, and Jinjing Huang (PIMCO) Sep 30, 2021
We do not expect widespread contagion across China's real estate or banking sectors despite the challenging outlook.

Think Italian Banks Are Bad? Look at Germany!
Paul J. Davies (Bloomberg Opinion) Sep 30, 2021
If a new government can't reform the financial system, Europe won't be able to punch its weight globally.

Will the Federal Reserve Support Inclusive Prosperity?
Simon Johnson (Project Syndicate) Sep 30, 2021
Lael Brainard, one of two female governors on the Fed board, has consistently argued that it is premature to raise interest rates until inflation accelerates and stays high. For groups that have traditionally not done well in downturns – particularly women and people of color – the stakes of the debate could not be higher.

The Geopolitical Conquest of Economics
Jean Pisani-Ferry (Project Syndicate) Sep 30, 2021
Although economics and geopolitics have never been completely separate domains, international economic relations were shaped for 70 years by their own rules. But the rise of China and its growing rivalry with the United States have brought this era to an end.

Betting on Italy
Michael Spence (Project Syndicate) Sep 30, 2021
Italy has endured more than two decades of slow economic growth and below-potential performance. But two factors now seem to be changing the game: the creation of a credible and effective government and a newfound willingness on the part of the EU to provide robust fiscal support.

Nation-Building 101
Andrés Velasco and Adnan Khan (Project Syndicate) Sep 30, 2021
Nation-building boils down to "expanding the circle" of moral concern. That is why successful nation-states – large or small, rich or poor – have one thing in common: citizens' sense of a shared past and future.

Education Must Come First
Yasmine Sherif (Project Syndicate) Sep 30, 2021
Disruptions to education resulting from COVID-19, violent conflict, and climate change are leaving crisis-affected girls and boys ever-further behind. It is hard to imagine a better investment than keeping these children in school.

The growing global spillovers from emerging markets
Rabah Arezki and Yang Liu (VoxEU) Sep 30, 2021
Covid-19 has further exposed the growing interdependence between advanced economies and emerging markets. Most of the existing research on cross-border spillovers has focused on the spillover effects from advanced economies to emerging markets. This column shows that spillovers from emerging markets to advanced economies over the past 25 years are about a fifth of those running in the opposite direction, and have increased significantly over time because of the evolving interdependence between these blocks.