News & Commentary:

Articles/Commentary

Three good reasons not to sweat Japan’s VAT rise
Leo Lewis (FT) Oct 1, 2019
Including Rugby World Cup spending that could offset tax hit.

Climate mitigation can support growth in developing countries
Channing Arndt (FT) Oct 1, 2019
A short-term exemption from emissions reduction targets would have a positive impact.

The importance of economic diversification in the Middle Eas
Simone Tagliapietra (FT) Oct 1, 2019
Financial sector reform is essential for SMEs to develop in the region.

Lessons from the first 70 years of the People’s Republic of China
David Daokui Li (FT) Oct 1, 2019
A well-behaved government must act as midwife to fledgling markets.

Hong Kong remains China’s gateway to global finance
Hudson Lockett (FT) Oct 1, 2019
Shanghai has been curtailed by strict curbs on capital flows.

The financial sector has seen enough innovation theatre
Izabella Kaminska (FT) Oct 1, 2019
No one seemed to question whether the interests of banks were really aligned with those of start-ups.

To Make Banks Stable, End, Don’t Mend, the Repo Market
Amar Bhidé (WSJ) Oct 1, 2019
Simplifying how financial institutions borrow would make the system more resilient.

Global Trade Is Deteriorating Fast, Sapping the World’s Economy Global Trade Is Deteriorating Fast, Sapping the World’s Economy
Peter S. Goodman (NYT) Oct 1, 2019
Growth in global trade is slowing dramatically as the world economy weakens and as the United States and China escalate their trade war.

Curbing China’s rise
Philip S Golub (LMD) Oct 1, 2019
We’ve all become so used to consumer goods delivered by global supply chains that we presume the trade, political and social order that has made them possible could never be deliberately destroyed. But that may happen, starting with the US trade war against China.

The US Dollar Beast
Thorsten Polleit (Mises Wire) Oct 1, 2019
Without a turn toward hard money, the odds are that the world’s dependence on the Greenback will not decline but presumably grow even more in the years to come.

Countries Most Reliant on Industrial Robots Tend to Have Higher Manufacturing Employment Share
Jacob Funk Kirkegaard (PIIE) Oct 1, 2019
The decline in manufacturing employment across advanced economies is often blamed on the increasing use of industrial robots. There have even been proposals to implement a “robot tax” in some countries to counter this effect, such as the United States and Canada. However, countries that are most intensely using industrial robots tend to have a higher share of manufacturing employment, based on 2017 data. A tax on robots would essentially be a tax on manufacturing jobs, hurting the sector the tax is meant to help.

Why structural balances should be scrapped from EU fiscal rules
Zsolt Darvas (Bruegel) Oct 1, 2019
A prominent team from DG ECFIN of the European Commission challenged some of the criticisms of the EU’s methodology for estimating potential output and output gaps, as well as their role in the EU fiscal framework. In this post, I conclude that their responses to the criticisms they considered are questionable. More importantly, they overlook serious problems with the EU’s potential output methodology.

South Korea Has a Problem Other Countries Can Only Dream Of
Daniel Moss (Bloomberg Opinion) Oct 1, 2019
It’s in the rare situation where fiscal policy is expansive, but monetary policy is too cautious. Time to cut rates.

How the Hedge Funds Are Really Playing Brexit
Lionel Laurent (Bloomberg Opinion) Oct 1, 2019
It’s hardly controversial to short the pound, but Crispin Odey and his ilk also have their eyes on a low-tax, low-regulation, no-deal Brexit paradise.

Want to Know Where Rates Are Heading? Don’t Ask the Fed
Daniel Moss (Bloomberg Opinion) Oct 1, 2019
The central bank of once-insular Australia may be a better guide to the state of the global economy than the Fed these days.

Japan and Europe Can Build Their Own Silk Road
Mihir Sharma (Bloomberg Opinion) Oct 1, 2019
Together they should be able to unlock the massive pools of capital needed to finance clean, high-standard infrastructure projects.

Passive Investing Hasn’t Taken Over the World
Barry L Ritholtz (Bloomberg Opinion) Oct 1, 2019
Ignore the hype. Actively managed money dwarfs the assets in low-cost index funds.

Recession Alert Level Rises to DEFCON 3
Mark Gongloff (Bloomberg Opinion) Oct 1, 2019
June 2009 is not a month to which you want to see any part of the economy reverting.

No, We Don’t “Need” a Recession
J. Bradford DeLong (Project Syndicate) Oct 1, 2019
Business cycles can end with a rolling readjustment in which asset values are marked back down to reflect underlying fundamentals, or they can end in depression and mass unemployment. There is never any good reason why the second option should prevail.

Are Europe’s Economic Prospects Brighter Than They Appear?
Anatole Kaletsky (Project Syndicate) Oct 1, 2019
Despite all the lurid headlines about the trade war causing a recession in the United States or some kind of collapse in China and its Asian neighbors, recent economic data reveal a very different picture: the main victim has been Europe. But, fortunately for the European economy, overdependence on foreign trade is not the whole story.

How to Rethink Capitalism
Simon Johnson (Project Syndicate) Oct 1, 2019
The 2008 financial crisis, together with failed efforts to combat climate change and sharply rising inequality, has frayed the neoliberal consensus that has prevailed in the United States and much of the West for more than two generations. Three issues must be considered in weighing what comes next.

The Next Phase of China’s Reform and Opening Up
Andrew Sheng and Xiao Geng (Project Syndicate) Oct 1, 2019
Over the last four decades, China has made major progress on integrating into global networks. But it has a lot more work to do – and must do it while confronting an increasingly hostile external environment.

The optimal inflation target in the face of a lower r-star
Philippe Andrade, Jordi Galí, Hervé Le Bihan, and Julien Matheron (VoxEU) Oct 1, 2019
How to adjust to structurally lower real natural rates of interest is a challenging but inescapable issue for central bankers. Using simulation and US data, this column studies how changes in the steady-state natural interest rate affect the optimal inflation target. It finds that starting from pre-crisis values, a 1 percentage point decline in the natural rate should be accommodated by an increase in the optimal inflation target of about 0.9 to 1 percentage point. It also discusses alternatives to adjusting the target, such as non-conventional monetary policies.

The post-referendum rise in import costs has hurt UK workers
Rui Costa, Swati Dhingra, and Stephen Machin (VoxEU) Oct 1, 2019
Some commentators argue that globalisation is systematically connected to the real-wage and productivity stagnation seen across the developed world. This column analyses the relationship between international trade and worker outcomes in the immediate aftermath of the Brexit referendum, when the value of the sterling fell massively against other nations’ currencies. It finds that the rise in import costs from the sterling depreciation hurt wages and training. This relative decline in real earnings of workers has reinforced pre-existing real-wage stagnation; UK workers have not fared well since the referendum price rise.

ECB Snaps, Crackles, then Watches Rates Pop
Nick Bennenbroek and Erik Nelson (WF) Oct 1, 2019
The ECB announced a substantial package of easing measures at its September meeting, but the market response mostly fell flat, and indeed if anything financial conditions appear to have tightened since the announcement. Most market interest rates are higher, while the euro and equity prices are mostly flat.

Germany must take care when throwing around stimulus
Mohamed El-Erian (FT) Oct 2, 2019
Two speed economy means that any spending must be carefully tailored.

Indonesia takes a wrong turn in crusade against corruption
Michael Buehler (FT) Oct 2, 2019
New legislation will undermine the KPK, but the bigger mistake is conceptual.

Southbound flows rescuing Hong Kong equity market
Alicia García-Herrero and Gary Ng (Bruegel) Oct 2, 2019
China seems to be coming to the rescue as social unrest affects the city’s financial market, but it’s probably only for arbitrage reasons.

How to ward off the next recession
Jean Pisani-Ferry (Bruegel) Oct 2, 2019
Despite confident official pronouncements, the deteriorating state of the global economy is now high on the international policy agenda. The OECD recently revised down its forecasts to 1.5% growth in the advanced G20 economies in 2020, compared to almost 2.5% in 2017. And its chief economist Laurence Boone warned of the risk of further deterioration – a coded way of indicating a growing threat of recession.

U.S. Equities: Calm on the Surface, Turbulent Within
Wesley Chan, Yang Lu, and Bill Smith (PIMCO) Oct 2, 2019
In the past few weeks, U.S. equity momentum and value factors have had their sharpest moves in more than 15 years based on our calculations.

Central Banks Don’t Need Their Own Digital Currencies
Tyler Cowen (Bloomberg Opinion) Oct 2, 2019
They could have a profound impact on a nation’s economic landscape — and not for the better.

Trump Is a Globalist, Not a Nationalist
Mihir Sharma (Bloomberg Opinion) Oct 2, 2019
For a global businessman, there’s nothing inherently odd about asking foreigners for help in undermining rivals at home.

Housing Might Rescue the Economy From Trump’s Trade War
Conor Sen (Bloomberg Opinion) Oct 2, 2019
So far, the slump in manufacturing is being offset by a real-estate rebound.

Recession Panic May Have Passed. But the Economy Is Still at Risk.
Neil Irwin (NYT) Oct 2, 2019
The underlying forces that fueled worry a few weeks ago haven’t gone anywhere.

The IMF After Argentina
Kenneth Rogoff (Project Syndicate) Oct 2, 2019
It’s high time to ask how to refocus the International Monetary Fund’s mandate for dealing with emerging-market debt crises. How can the IMF be effective in helping countries regain access to private credit markets when any attempt to close unsustainable budget deficits is labeled austerity?

We cannot build our way out of inequality
Andrés Rodríguez-Pose and Michael Storper (VoxEU) Oct 2, 2019
A dominant view in urban economics suggests that the solution to the housing crisis of major cities is to relax zoning and other planning regulations. This column challenges this position, arguing that there is no clear and uncontroversial evidence that housing regulation is a principal source of differences in home availability or prices across cities and that these issues are more linked to rising inequalities in the geography of employment, wages and skills. Blanket changes in zoning are unlikely to increase affordability for lower-income households in prosperous regions, but would increase gentrification without appreciably decreasing income inequality.

Why Japan lost its comparative advantage in producing electronic parts and components
Willem Thorbecke (VoxEU) Oct 2, 2019
Japanese exports in electronic parts and components dramatically fell in value after the Global Crisis and have not recovered until today. This column investigates why Japan lost this comparative advantage. It argues that capital inflows seeking safe havens during the crisis led to a sharp appreciation of the yen and caused yen export prices to tumble relative to production costs. Plummeting profits then hindered Japanese firms from investing enough in capital and innovation to compete with rivals.

Rumblings of Recession Get Louder
Keith Johnson (FP) Oct 2, 2019
Trump so far has a solid record on the economy, but his global trade wars have had disastrous consequences for the manufacturing workers and farmers who helped vote him into office.

The Untold Story of How George W. Bush Lost China
Paul Blustein (FP) Oct 2, 2019
The George W. Bush administration’s failure to stand up to Beijing set the course for the current U.S.-China economic clash.

Political Pressure, Trade Policy and Potential Market Effect
Brendan McKenna, Nick Bennenbroek, and Jen Licis (WF) Oct 2, 2019
One of the more important characteristics a central bank needs to maintain is its credibility. An erosion of central bank credibility-and in turn independence-has typically been associated with a sharp currency depreciation, as evidenced in Turkey and India.

Battle for the skies risks a wider EU-US trade war
FT View Oct 3, 2019
An agreement on a new deal on aerospace support is long overdue.

Brace for a sequel to last year’s rocky final quarter
Robin Wigglesworth (FT) Oct 3, 2019
Weaker liquidity and the rise of algorithmic trading could create volatility.

The EU must make a brave decision on the Balkans
Alexis Tsipras (FT) Oct 3, 2019
The region can be the symbol of vision and strength that our common project needs.

The big bond rally is not even close to being over
David Rosenberg (FT) Oct 3, 2019
US economy is weak and there is much too much optimism on a China trade deal.

The rise of the financial machines
Economist Oct 3, 2019
Forget Gordon Gekko. Computers increasingly call the shots in financial markets.

Can Trump back away from trade war in time to avoid recession?
David Goldman (AT) Oct 3, 2019
Surveys show China is suffering less than America, quite the opposite of what US president has been telling voters.

Impeachment Could Be Both Bad News and Good News for Trade Policy
Libby Cantrill (PIMCO) Oct 3, 2019
We believe the impeachment inquiry could have an adverse impact on the ongoing U.S.–China trade conflict, but there may be a silver lining for NAFTA 2.0.

Boris Johnson Won't Care If He Loses His Fight With Europe
Therese Raphael (Bloomberg Opinion) Oct 3, 2019
If the prime minister has a Brexit delay forced on him, that won’t hurt his chances of winning a “People versus Parliament” general election.

Another Rate Cut May Not Help India
Mihir Sharma (Bloomberg Opinion) Oct 3, 2019
The danger isn’t that banks won’t pass it along, it’s that the fiscal picture is looking increasingly worrisome.

China Won’t Save the World Economy This Time
Daniel Moss (Bloomberg Opinion) Oct 3, 2019
Beijing played a pivotal role in reviving global growth after recessions in 2001 and 2008. Things are very different now.

Typhoons, Trade War, Taxes… Yet Japan’s Still a Haven
Ronald W Chan (Bloomberg Opinion) Oct 3, 2019
Competitive valuations and improving governance are positive factors for the nation’s stocks amid a global slowdown.

Confessions of a Reformed Crypto Doubter
Jared Dillian (Bloomberg Opinion) Oct 3, 2019
There has never been a greater need for a system of stateless currencies.

American Socialists Should Drop the Illusions About Europe
Noah Smith (Bloomberg Opinion) Oct 3, 2019
For the past two decades, the continent has taken a decided turn toward freer markets.

Argentina Must Not Waste Its Crisis
Kemal Dervis and Sebastián Strauss (Project Syndicate) Oct 3, 2019
To explain Argentina’s chronic instability and episodic illiquidity, one must look beyond idiosyncratic leaders, temporary external shocks, and specific policy mistakes. The answer lies in the country's political system, which has failed to cement institutions that can support long-term development.

The Asianized World Has Arrived
Jonathan Woetzel and Jeongmin Seong (Project Syndicate) Oct 3, 2019
By 2040, Asia is likely to generate more than 50% of world GDP, and could account for nearly 40% of global consumption. This progress reflects the integration of at least four “Asias,” each at a different stage of economic development – and each playing a unique role in propelling the region’s global rise.

Is Post-Brexit London Really Doomed?
Howard Davies (Project Syndicate) Oct 3, 2019
Despite the likelihood of a harder-than-expected Brexit, and the certain loss of the so-called passport, which would allow financial services to be sold freely across the EU, the feared large-scale exodus of firms and financiers from London does not seem to be under way. Why?

A New Eurafrican Partnership
Ellen Johnson Sirleaf, Mo Ibrahim, and Etienne Davignon (Project Syndicate) Oct 3, 2019
To build a peaceful and prosperous future, African and European leaders must agree on a forward-looking strategy that addresses structural imbalances, harnesses the benefits of migration, and delivers tangible benefits to their citizens. Such a strategy should rest on four pillars.

Government Social Responsibility
Dambisa Moyo (Project Syndicate) Oct 3, 2019
Citizens and business leaders have increasingly come to accept that corporations should contribute to the public good, rather than focusing only on maximizing shareholder value. But as demand for more corporate social responsibility has grown, the supply of leadership from governments has shrunk.

The Euro Area Monetary Policy Event-Study Database
Carlo Altavilla, Luca Brugnolini, Refet Gürkaynak, Roberto Motto, and Giuseppe Ragusa (VoxEU) Oct 3, 2019
High frequency data are an essential input to study the effects of monetary policy communication. This column introduces a new database, the Euro Area Monetary Policy Event-Study Database, which makes available intraday asset price changes around ECB policy announcements for a wide range of assets. The high resolution of the intraday data allows for the measurement of asset price changes separately for the press release and press conference windows.

Political and economic drivers of pogroms
Irena Grosfeld, Seyhun Orcan Sakalli, and Ekaterina Zhuravskaya (VoxEU) Oct 3, 2019
It is commonly argued that political instability increases the likelihood of civil conflicts, while economic downturns can trigger civil conflict and aggravate ethnic violence. This column examines how political and economic factors interact to drive pogroms in an environment of widespread antisemitism, using data from the Russian Empire of the 19th and early 20th centuries. It finds that pogrom waves took place when and only when economic shocks coincided with political turmoil, and that occupational segregation between the Jews and the majority played an important role in triggering ethnic violence.

World wide currency
Pierpaolo Benigno, Linda Schilling, and Harald Uhlig (VoxEU) Oct 3, 2019
The governor of the Bank of England, Mark Carney, recently argued that more thought should be given to creating a global electronic currency. This column, part of the Vox debate on the future of digital money, looks at the challenges for the world economy of adopting a ‘world wide currency’, using a two-country world in which each country has its own national currency and national central bank, but where there is also a global currency in circulation. It suggests that Carney’s wish may be granted, but sooner than expected and in a different manner.

Regulating the doom loop
Spyros Alogoskoufis and Sam Langfield (VoxEU) Oct 3, 2019
At a leaders’ summit in June 2012, euro area governments recognised the imperative of breaking the doom loop resulting from sovereigns being exposed to bank risk and vice versa. But bank regulation still treats sovereign debt as risk-free and does not penalise concentrated portfolios. This column, part of the Vox debate on euro area reform, asks whether banks would reduce portfolio concentration in response to reforms, and whether they would reduce exposures to sovereign credit risk. Simulations show that the answer is never an unambiguous and simultaneous ‘yes’ to both questions under reforms envisaged by the Basel Committee on Banking Supervision.

The last days of the middle-class world citizen
Janan Ganesh (FT) Oct 4, 2019
The costs of the frictionless life enabled by Uber, Airbnb and Deliveroo may be about to rise.

The golden age of tech growth may be coming to an end
Richard Waters (FT) Oct 4, 2019
WeWork’s failed IPO could usher in a new era of more cautious expansion.

Why is nobody buying the copper needed for a greener world?
John Dizard (FT) Oct 4, 2019
Recycling old metal does not do the job because the green economy is more metal intensive.

Negative rates tarnish bankers’ halos
Merryn Somerset Webb (FT) Oct 4, 2019
The failures of loose monetary policy could prompt a fall from grace.

US hostility to Chinese investment puts innovation at risk
Gillian Tett (FT) Oct 4, 2019
Cfius is becoming more important as the battle expands from tangible goods into capital flows.

A hard Brexit is a threat to the euro as well as sterling
Katie Martin (FT) Oct 4, 2019
Taking out some kind of insurance for single currency assets looks a smart course of action.

Johnson’s New Deal: Not Good Enough
Holger Schmieding (Globalist) Oct 4, 2019
The UK’s new Brexit plan raises five EU concerns.

Europe Should Welcome Johnson’s Brexit Plan
Clive Crook (Bloomberg Opinion) Oct 4, 2019
For all its complications, the prime minister’s proposal gives Europe an interesting opportunity.

Cutting U.S. Capital Flows to China? A Small, Bad Idea
Nir Kaissar and Noah Smith (Bloomberg Opinion) Oct 4, 2019
When governments use markets as weapons the outcome is rarely positive.

Robots Are Catching Up to Humans in the Jobs Race
Nathaniel Bullard (Bloomberg Opinion) Oct 4, 2019
Trade wars and a global economic slowdown are creating more opportunities for companies looking for better, cheaper automated options.

Who Can Influence the ECB?
Stefan Gerlach (Project Syndicate) Oct 4, 2019
Eurozone governments will soon have to fill two open slots on the European Central Bank's Executive Board. Rather than proposing candidates who will forcefully promote national views, they should consider nominees who are likely to be able to influence ECB policy.

China’s Corrupt Meritocracy
Yuen Yuen Ang (Project Syndicate) Oct 4, 2019
Analysts of China's political economy tend to fall into two camps, with one side describing it as a genuine meritocracy, and the other arguing that the regime is corrupt to the core. In fact, neither view is correct: in a land of paradoxes, cronyism and strong economic performance go hand in hand.

The Crisis of Central-Bank Governance
Lucrezia Reichlin (Project Syndicate) Oct 4, 2019
The European Central Bank may enjoy stronger protection against political pressure than other central banks do, but it also faces unique constraints. The more the ECB is forced to expand its policy remit to meet new economic challenges, the more likely it is to trigger destabilizing political conflicts within the eurozone.

The Unsustainable Sustainable Investing Boom
Daniel Litvin (Project Syndicate) Oct 4, 2019
As financial institutions rush to profit from the boom in sustainable investing, they risk overselling its ethical and commercial benefits. It would be a shame if a movement with genuine potential to change the world were stopped in its tracks by old-fashioned misselling.

The Making and Breaking of Constitutions
Raphaël Hadas-Lebel (Project Syndicate) Oct 4, 2019
With the United States and the United Kingdom on the verge, if not already in the throes, of constitutional crises, understanding the dynamics of constitutional change at times of political tumult has become an urgent necessity. A new book by renowned legal scholar Bruce Ackerman offers a fresh look at how constitutions evolve and break down over time.

Deep recessions, large immigration waves, and the rise of populism
Guillermo de la Dehesa (VoxEU) Oct 4, 2019
Populism has gained momentum over the past decade, dramatically changing the political landscape. This column explains how deep recessions and immigration waves have contributed to this recent trend and discusses the likely trajectory of populism.

Dimensions of ECB policy communication and their financial market effects
Carlo Altavilla, Luca Brugnolini, Refet Gürkaynak, Roberto Motto, and Giuseppe Ragusa (VoxEU) Oct 4, 2019
The newly released Euro Area Monetary Policy Event-Study Database makes available high-resolution data on asset price responses to ECB monetary policy announcements. In this column, the authors – the creators of the dataset – show that market perceptions of ECB policy communication comprise four factors: policy target, timing, forward guidance, and quantitative easing. These factors elicit large and long-lasting market reactions and help explain asset price changes in response to policy maker speeches and other news as well.

Mexico Tries to Turn Back the Clock on Energy
Keith Johnson (FP) Oct 4, 2019
Mexican President Andrés Manuel López Obrador’s efforts to renationalize the energy sector for political gain could endanger the country’s economy.

Without Democracy, China Will Rise No Farther
Jiwei Ci (FA) Oct 4, 2019
Beijing can’t compete with Washington until it reckons with its people.

Trade wars push world economy to the brink
FT View Oct 5, 2019
A slowdown in manufacturing is now spilling over into domestic services.

Repo glitches expose flaws in Fed’s approach
Joe Rennison (FT) Oct 5, 2019
Central bank might have acted more quickly if the repo market were its primary target.

The stockmarket is now run by computers, algorithms and passive managers
Economist Oct 5, 2019
This shift raises questions about the function of markets, how companies are governed and financial stability.

Beyond Sino-American Rivalry: Whose Global Narrative?
Tomas Casas i Klett (Globalist) Oct 5, 2019
Is a chastened West that has lost its positive edge doomed to cede innovative impulses for global affairs to China?

RCEP leverages political security through economic security
Mari Pangestu and Peter Drysdale (EAF) Oct 6, 2019
Although India was slow to grasp the strategic significance of RCEP — like ASEAN, Japan and other countries, it has now elevated early conclusion of RCEP as a foundational element in its quest for a new multipolar global order and embrace of Asia's dynamism.

The euro’s guardians face a roar of the dinosaurs
FT View Oct 6, 2019
The true risk to the eurozone economy is overly tight, not loose, monetary policy.

Can Trump force the Fed to cut rates?
Gavyn Davies (FT) Oct 6, 2019
The central bank has been the target of extraordinary tweets threatening its independence.

The World’s Next Factory Won’t Be in South Asia
Irene Yuan Sun (Bloomberg Opinion) Oct 6, 2019
The region is losing out to Africa and elsewhere in the race to attract manufacturing investment.

Creation of a circular economy will require extreme action
Leslie Hook (FT) Oct 7, 2019
Radical thinking is needed in how we buy and discard goods.

Cutting-edge tech takeovers are a strategic threat
Elisabeth Braw (FT) Oct 7, 2019
Governments should be more vigilant about foreign acquisitions in critical sectors.

These Trade Claims Made by Trump? They’re All Wrong
Veronique de Rugy (NYT) Oct 7, 2019
The president and his advisers have been deluded about what big tariff hikes and aggressive negotiating tactics will achieve.

The Case for Intelligent Industrial Policy
Dalia Marin (Bruegel) Oct 7, 2019
Although national industrial policies have a bad reputation, there is a strong case for government support to sectors that will increasingly rely on artificial intelligence. In this regard, the German government’s plan to promote production of electric-car batteries may accelerate an industrial renaissance in Europe.

Europe's New Leadership Must Get to Work on Establishing a Genuine Banking Union
Nicolas Véron (PIIE) Oct 7, 2019
Completing Europe's banking union is the dominant task facing the European Commission in the financial services area for the next five years. In the short term, the Commission should affirm its leadership by pushing for the creation of a credible EU anti–money laundering supervisory agency.

India remains an enigma for foreign investors
Amin Rajan (FT) Oct 7, 2019
Easing of regulatory barriers is not enough to attract businesses.

Has the China-Pakistan Economic Corridor Stalled?
Muhammad Akbar Notezai (Diplomat) Oct 7, 2019
In a break from earlier feverish optimism, discussions about the CPEC have become more muted in Pakistan.

Investors Are Caught in a Global Tug of War
Mohamed Aly El-Erian (Bloomberg Opinion) Oct 7, 2019
The forces pushing stocks up and pulling them down are courting volatility and uncertainty.

Mario Draghi Leaves a Toxic ECB Legacy for Bankers
Marcus Ashworth (Bloomberg Opinion) Oct 7, 2019
The ECB president deserves all the plaudits for saving the euro, but the “doom loop” between large banks and sovereign debt hasn’t gone away.

Three Countries That Prospered in the ’10s Are in Trouble
Noah Smith (Bloomberg Opinion) Oct 7, 2019
The export-driven growth model of Germany, South Korea and Singapore is quickly coming undone.

Free Trade Is Expanding, Just Not With the U.S.
Shannon K O'Neil (Bloomberg Opinion) Oct 7, 2019
Deals forged by countries accounting for more than one-third of global output leave America on the outside.

The Eurozone’s 2% Fixation
Daniel Gros (Project Syndicate) Oct 7, 2019
The European Central Bank’s inflation target of “below, but close to, 2%” currently dominates economic policymaking in the eurozone. Moreover, the idea that this target supersedes the bloc's fiscal rules seems to be gaining ground – with potentially worrying implications for financial stability.

No More Half-Measures on Corporate Taxes
Joseph E. Stiglitz (Project Syndicate) Oct 7, 2019
In the face of climate change, rising inequality, and other global crises, governments are losing out on hundreds of billions of dollars in tax revenue as a result of corporate tax arbitrage. Yet despite the obvious deficiencies of the global tax regime, policymakers continue to propose only piecemeal fixes.

Can the US and China Make a Deal?
Kevin Rudd (Project Syndicate) Oct 7, 2019
Driven by domestic nationalist forces and the need to save face, US President Donald Trump and his Chinese counterpart, Xi Jinping, have continued to escalate the bilateral trade war, despite their shared interest in resolving it before the end of the year. To make a deal, both sides need to start taking substantive steps immediately.

Is Finance Ready to Go Green?
Jim O'Neill (Project Syndicate) Oct 7, 2019
The financial industry plays an indispensable role in the modern economy by allocating society's savings to borrowers engaged in productive pursuits. It could also play a crucial role in facilitating the investments needed to combat climate change, but only after it is restructured for that purpose.

Political bias and the economic impact of Chinese aid
Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul Raschky, and Michael Tierney (VoxEU) Oct 7, 2019
Chinese development projects have the potential to improve the lives of millions of people, but political capture of its development finance by politicians may undermine its effectiveness. This column examines local development outcomes across 47 African countries and the effects of financial support from China between 2001 and 2012. The results not only show that Chinese aid registers positive effects on economic development at the district-level and province-level, but also that political bias in the subnational distribution of Chinese aid does not substantially undermine local development outcomes.

Does the World’s Longest Undersea Tunnel Have a China Problem?
Reid Standish (FP) Oct 7, 2019
A Chinese-financed project to connect the Estonian and Finnish capitals has hit a snag as Europe ponders how to deal with Beijing’s economic heft.

How Severe Is China's Slowdown? Evidence from China CAT
John Fernald, Neil Gerstein, and Mark Spiegel (FRBSF Econ Letter) Oct 7, 2019
China’s official GDP shows that its pace of economic growth has slowed gradually since 2010 but remains remarkably high, around 6%. A new index, the China Cyclical Activity Tracker, or China CAT, provides an alternative way to measure fluctuations in Chinese economic activity using a weighted average of several non-GDP indicators. The index suggests that economic activity has slowed noticeably since 2017 to a pace slightly below trend. GDP growth statistics appear excessively smooth over recent years, but, as of mid-2019, are in line with the China CAT.

What a decade of monetary policy innovation has taught us
Philip Lowe and Jacqueline Loh (FT) Oct 8, 2019
Tools helped to avert a deflationary spiral but came with lingering side-effects.

Investors are addicted to the QE placebo
Tommy Stubbington (FT) Oct 8, 2019
The collapse in inflation expectations is a sign of waning faith in central banks.

Enduring oil weakness raises prospect of Saudi-led output cuts
David Sheppard (FT) Oct 8, 2019
Crude prices have returned to familiar trajectory after spike caused by drone strikes.

A burst of privatisation looks imminent in India
Swaminathan Aiyar (FT) Oct 8, 2019
Narendra Modi, the incrementalist prime minister, may be turning into a radical reformer.

Brexit is a journey without end
Martin Wolf (FT) Oct 8, 2019
No majority exists for any deal option with the EU. Brexiters are as much to blame as Remainers.

The Courage of Their Brexit
WSJ Oct 8, 2019
Fading hopes for a deal will call bluffs in London and the EU.

Long term real interest rates fell below zero in all euro area countries
Zsolt Darvas (Bruegel) Oct 8, 2019
The 10-year real government bond yield, which is the nominal yield deflated by expected inflation, has fallen below zero in Italy and Greece, boosted by increased market confidence for their new governments. Romania is the only remaining EU country with a positive real interest rate. Negative real interest rates vastly help fiscal sustainability and provide a great opportunity to invest in much needed infrastructure and the transition to a carbon-neutral economy.

The Case for Higher Taxes at the Very Top
Noah Smith (Bloomberg Opinion) Oct 8, 2019
The wealthiest 400 Americans have the lowest rates.

A U.S.-China Trade Deal Just Got Harder
Karl W Smith (Bloomberg Opinion) Oct 8, 2019
Both Chinese and NBA officials are illustrating how trade tensions can metastasize.

Iraq May Be the Next Flash Point for Oil Markets
Ellen R Wald (Bloomberg Opinion) Oct 8, 2019
Protests and deadly violence raise the prospect of disruptions to Iraqi oil production that could be particularly painful for the broader market now.

Putin’s Russia Is a Middle Eastern Country
Leonid Bershidsky (Bloomberg Opinion) Oct 8, 2019
After centuries as the dividing line between Europe and Asia, Russia has found its natural place among the oil dictatorships.

U.S. Blacklist Is Targeting China's Tech Future
Tim Culpan (Bloomberg Opinion) Oct 8, 2019
First, it went for the national champion, Huawei. Now, Washington is going after the rising AI stars.

Christine Lagarde Has a German Problem
Andreas Kluth (Bloomberg Opinion) Oct 8, 2019
The hardest job for the ECB’s incoming boss will be explaining to Germany why it should back monetary - and fiscal - stimulus.

Mahathir Closes the Book on the Boom He Launched
Daniel Moss (Bloomberg Opinion) Oct 8, 2019
The Malaysian leader who symbolized Asia’s economic surge in the 1990s tacitly acknowledges those days are gone forever.

How to Facilitate Trade in Africa
Asmita Parshotam (Project Syndicate) Oct 8, 2019
While the World Trade Organization's Trade Facilitation Agreement can act as a powerful tool for progress, it cannot work in isolation. It also requires complementary reforms addressing specific country-level challenges, and a well-functioning global trading regime that accounts for developing countries' needs.

Wanted: A Global Green New Deal
Joseph E. Stiglitz (Project Syndicate) Oct 8, 2019
To live within our planetary means, we will have to change many aspects of how we live – how we organize our economies, our cities, and our transportation, energy, housing, and food systems. The good news is that most of the world now recognizes this; the bad news is that its largest polluter does not.

The SDG Investments Africa Needs
Donald P. Kaberuka (Project Syndicate) Oct 8, 2019
Global discord represents another obstacle to Africa's ability to achieve the Sustainable Development Goals. But the continent can still play a major role in fulfilling the United Nations' 2030 Agenda – especially if it makes further progress on tackling epidemics and strengthening national health-care systems.

Global banks and synthetic funding
Fernando Eguren Martin, Matias Ossandon Busch, and Dennis Reinhardt (VoxEU) Oct 8, 2019
One of the markets banks use to fund lending in foreign currencies – namely, using FX swaps to fund FX lending synthetically – has seen large dislocations in its pricing since the Global Crisis. This column documents that such dislocations affect the supply of cross-border FX credit of UK-based banks. Access to foreign relatives matters as banks employ their internal capital markets to shield themselves from the effects, while banks outside the UK not affected by changes to synthetic funding costs are an important source of (partial) substitution.

The effect of trade policy shocks on multinational enterprise activities
Stefania Garetto, Lindsay Oldenski, and Natalia Ramondo (VoxEU) Oct 8, 2019
Multinational enterprises play an important role in coordinating production around the globe. This column presents a dynamic quantitative model of multinational enterprise expansion that can be used to analyse the effects of policies that affect the cost of the operations of such firms. It uses this model to estaimte the impact of potential implementations of Brexit.

Herd behaviour in asset markets: The role of monetary policy
Stefano Micossi (VoxEU) Oct 8, 2019
One important conclusion of Robert Shiller’s influential 2015 book, Irrational Exuberance, is that bubbles are random exogenous phenomena that cannot be foreseen and do not depend on macroeconomic policies. This column introduces a new CEPR Policy Insight which throws light on the root causes of speculative fevers in asset markets and related financial booms and busts. It shows empirical evidence indicating that Shiller may have overlooked the role that lax monetary policy played in triggering financial bubbles in the 2000s by offering investors a perverse promise of ever-increasing asset prices.

Gimme Shelter or Inflation Gonna Fade Away
Sarah House and Shannon Seery (WF) Oct 8, 2019
In an expansion characterized by weak inflation, housing costs have bucked the trend. Yet shelter costs have eased up in recent months and home price appreciation has slowed sharply over the past year. Is the housing portion of inflation on the cusp of rolling over, and about to take overall inflation down with it just as core inflation looks to finally be aligning with the Fed's target?

Multilateral development banks are part of the problem
Ruurd Brouwer(FT) Oct 9, 2019
The lending supplied by the bankers of the poor is in conflict with their mission.

Investment protectionism is bad news for global economy
David McCormick (FT) Oct 9, 2019
Blocking free flow of capital puts the financial system at risk.

Restore monetary sanity — and do the global economy a favour
Ken Fisher (FT) Oct 9, 2019
Carney shouldn’t wait until after Brexit to unwind QE.

Stretching rules will not save global trade
Marianne Schneider-Petsinger (FT) Oct 9, 2019
Short-cuts designed to defuse tensions threaten the multilateral system.

Fed restarts debt purchases — just don’t call it QE
Joe Rennison (FT) Oct 9, 2019
US central bank faces another tricky communication challenge.

EU-Japan axis emerges to counter China’s BRI
William Pesek (AT) Oct 9, 2019
Tokyo is quietly building partnerships and alliances to boost its global footprint and cut its reliance on Washington.

How To Reignite Growth in Emerging Market and Developing Economies
Romain Duval and Davide Furceri (IMF) Oct 9, 2019
Structural reforms can yield sizable payoffs.

Uncertainty and Other Factors are Dragging Down the Global Economy
Karen Dynan (PIIE) Oct 9, 2019
Economic expansion is slowing because of a confluence of headwinds, including fading fiscal stimulus in the United States and uncertainty over trade wars and other potential disruptions. In the United States, growth has moderated and is expected to fall to its trend pace next year.

U.S. and China Should Declare a Trade Truce
Bloomberg Opinion Oct 9, 2019
A grand bargain might be out of reach for now — but a pause in hostilities is urgently needed.

Central Banks Can't Create Negative Rates by Themselves
Jim Bianco (Bloomberg Opinion) Oct 9, 2019
Advances in technology and a growing global savings glut are pushing inflation and bond yields lower.

Only Donald Trump Can Save the Global Economy
Ferdinando Giugliano (Bloomberg Opinion) Oct 9, 2019
Central bankers can use all the tricks in the book, but they'll need a truce in trade wars to rekindle growth.

The Repo Market Is More Than Mere Plumbing
Stephen Mihm (Bloomberg Opinion) Oct 9, 2019
When the financial system needs a way around new regulations or restrictions, it often finds a friend in repo.

Trade With China Undermines America’s Liberal Values
Conor Sen (Bloomberg Opinion) Oct 9, 2019
The country pressures U.S. companies to adopt its standards. It was supposed to be the other way around.

The Fed Can’t Fight This Kind of Inflation
Karl W Smith (Bloomberg Opinion) Oct 9, 2019
Rising costs in housing and health care have to be addressed by governments at the local, state and federal level.

Widening Gaps: Regional Inequality within Advanced Economies
John Bluedorn, Weicheng Lian, Natalija Novta, and Yannick Timmer (IMF) Oct 9, 2019
Differences in economic performance between regions within countries can be large.

Should Creditors Pay the Price for Dubious Bonds?
Mitu Gulati, Ugo Panizza, and Mark Weidemaier (Project Syndicate) Oct 9, 2019
Venezuela’s latest expected debt default raises the question of whether creditors should bear the risk that unauthorized debts can be repudiated. In the final analysis, imposing some risk on careless creditors may be the best way to ensure that politicians honor the limits on their borrowing authority.

Democracy on a Knife-Edge
Dani Rodrik (Project Syndicate) Oct 9, 2019
The failure to protect minority rights is a readily understood consequence of the political logic behind the emergence of democracy. What requires explanation is not the relative rarity of liberal democracy, but its existence.

Looking Forward to Sustainable Development
Rémy Rioux (Project Syndicate) Oct 9, 2019
National and regional development banks have already shown that they can act as pioneers for sustainable development and catalysts for climate finance. In the interests of both planet and people, governments should rely on them much more in implementing the 2030 development agenda.

The Long-Run Trend of Residential Investment in China
Ding Ding and Weicheng Lian (VoxDev) Oct 9, 2019
Residential investment has been a key growth engine for China in the last two decades. Total housing investment grew from about 4 percent of GDP in 1997 to a peak of 15 percent of GDP in 2014, with residential investment accounting for more than two-thirds of it. Our analysis indicates that structural changes in the Chinese economy that led to rebalancing toward consumption, as well as the liberalization of mortgage markets, were the key drivers of rising residential investment as a share of GDP. We project that residential investment will moderate from the current level of 9 percent of GDP to around 6 percent by 2024, and its contribution to real GDP growth will decline gradually from currently about one-half percent of GDP to slightly negative over this period. The decline reflects the projected slower pace of rebalancing in China and the increase in labor costs due to the country’s demographic changes.

Chinese urban elite transformation between 1988 and 2013
Li Yang, Filip Novokmet, and Branko Milanovic (VoxEU) Oct 9, 2019
The historically unprecedented economic and social transformation in China over the past four decades has seen urban areas becoming much richer, but also much more unequal. This column analyses changes in the Chinese urban elite. It finds that, compared to the 1980s, the elite today consists mainly of professionals, self-employed, and smaller and larger business people, they are much better educated, and they receive a much greater share of total urban income. This is reflected also in the composition of the Communist Party of China.

The effectiveness of export promotion measures
Ryo Makioka (VoxEU) Oct 9, 2019
Public export promotion agencies, which provide direct support to exporting firms, are used in many countries around the world. This column surveys the literature that examines the effects of export promotion policies using firm-level observational data. While empirical studies generally find a positive effect of such measures, many show differences in the pattern of effects depending on firm characteristics. The survey also suggests that bundled services combining multiple types of support – and the more direct measures, such as helping firms find distributors – are more effective.

The Trade War Is Only Getting Worse
Keith Johnson (FP) Oct 9, 2019
Any expectations that high-level U.S.-China talks this week could produce a grand bargain on trade have all but evaporated as both sides continue to harden their positions.

Rights Groups Miss Out on Millions in Foreign Aid Due to U.S. Spending Restrictions
Robbie Gramer (FP) Oct 9, 2019
Congress won’t let Trump gut foreign assistance. So the administration made it harder to disburse funds, leaving aid programs in China, Iraq, and elsewhere in the lurch.

Understanding recent fluctuations in short-term interest rates
Sam Schulhofer-Wohl (FRB Chicago Fed Letter) Oct 9, 2019
In mid-September 2019, there were sudden, large fluctuations in short-term interest rates. Why did these fluctuations happen, and what do they tell us about the Federal Reserve’s monetary policy toolkit?

Huawei’s dominance in 5G should be challenged
FT View Oct 10, 2019
Supporting EU competitors may offer economic and security benefits.

Why dollar strength poses risks to global economy
Mohamed El-Erian (FT) Oct 10, 2019
Appreciation in the greenback creates political and economic problems.

Trump is hastening America’s decline
Edward Luce (FT) Oct 10, 2019
The president is only part of the reason why US power is waning.

Sterling wobbles highlight enduring Brexit risks
Katie Martin (FT) Oct 10, 2019
At current levels, a no-deal exit from the EU is nowhere close to being priced in.

Data on modern finance reveals uncomfortable truths
Gillian Tett (FT) Oct 10, 2019
It is unnerving that the shadow banking sector is swelling, given its role in the financial crisis.

Poverty, priests and politics: why Peronism is back in Argentina
Benedict Mander (FT) Oct 10, 2019
As ‘slum priests’ try to fill the gap left by the state, the populist movement is on the rise again.

China is building financial leverage over all Americans
Josh Rogin (WP) Oct 10, 2019
Investing in China poses risks that U.S. managers haven’t been taking into account.

As protests boom, Hong Kong's economy busts
Nile Bowie (AT) Oct 10, 2019
Hong Kong headed for recession amid triple whammy of civil unrest, US-China trade war and falling global growth.

Fiscal Policies to Curb Climate Change
Vitor Gaspar, Paolo Mauro, Ian Parry, and Catherine Pattillo (IMF) Oct 10, 2019
Global warming has become a clear and present threat. Actions and commitments to date have fallen short. The longer we wait, the greater the loss of life and damage to the world economy. Finance ministers must play a central role to champion and implement fiscal policies to curb climate change. To do so, they should reshape the tax system and fiscal policies to discourage carbon emissions from coal and other polluting fossil fuels.

With or without you: are central European countries ready for the euro?
Zsolt Darvas (Bruegel) Oct 10, 2019
The debate on euro adoption by central European EU countries has intensified in the last years. In this Policy Contribution the author does not review all the complex aspects of euro-area enlargement, but analyse a particularly important issue: the build-up of macroeconomic vulnerabilities and the subsequent adjustments.

India Is Stuck in an Economic Slump. What Comes Next?
Nisha Biswal (Brink) Oct 10, 2019
After years of sharp economic upturn and high growth, India has been underperforming since late 2018 — despite Narendra Modi's promise of growth if reelected. The sluggish Indian economy and how Modi’s government can tackle structural economic issues to achieve growth.

Robots and Economic Development: Is “Catch-up” Growth a Thing of the Past?
Carl Benedikt Frey (CGD) Oct 9, 2019
Is automation stalling industrialization in the developing world?

A Step Toward Smarter Taxes on Multinationals’ Profits
Bloomberg Opinion Oct 10, 2019
Work toward a new global agreement is making progress. It’s about time.

Thailand Is Being Too Good for Its Own Good
Daniel Moss (Bloomberg Opinion) Oct 10, 2019
The economy is geared for post-Asian-crisis atonement, not for an era when stimulus is needed.

India's Quashed Bank Merger Fans Contagion Risks
Andy Mukherjee (Bloomberg Opinion) Oct 10, 2019
The fallout from the shadow finance crisis becomes more serious after Indiabulls is denied a lifeline.

Libor Refuses to Die
Mark Gilbert (Bloomberg Opinion) Oct 10, 2019
The inter-bank lending benchmark is flawed, outdated and probably beyond redemption. It should still win a stay of execution.

The Rich World's Rust Belts Aren't So Unequal
Ferdinando Giugliano (Bloomberg Opinion) Oct 10, 2019
Regional differences account for only 5% of disposable income inequality.

What Economists (Including Me) Got Wrong About Globalization
Paul R Krugman (Bloomberg Opinion) Oct 10, 2019
The models that scholars used to measure the impact of exports from developing countries in the 1990s underestimated the effect on jobs and inequality.

The Housing Market's Rebound Is No Mirage
Danielle DiMartino Booth (Bloomberg Opinion) Oct 10, 2019
Real estate can be a lagging indicator, but recent reports suggest it will continue to underpin the U.S. economy.

Australia Has Been Recession-Free for 28 Years. Could the U.S. Be Next?
Justin Fox (Bloomberg Opinion) Oct 10, 2019
Growth in the U.S. is slowing, but that doesn’t mean a recession has to follow.

The world economy’s strange new rules
Economist Oct 10, 2019
How economies work has changed radically. So must economic policy.

How stories can help explain booms and busts
Economist Oct 10, 2019
Once a narrative takes hold, it can drive markets.

Our Shrinking Economic Toolkits
Jayati Ghosh (Project Syndicate) Oct 10, 2019
For the last four decades, mainstream economists and policymakers have been wedded to fixed dogmas. Their blind belief in fiscal discipline and consolidation, and resulting refusal to consider more public spending even in an obvious downturn, now threatens the very stability of societies.

Germany Versus the ECB
Hans-Helmut Kotz (Project Syndicate) Oct 10, 2019
With the German economy close to recession, European Central Bank President Mario Draghi has rightly urged eurozone governments to provide more fiscal stimulus. And acknowledging the interaction between fiscal and monetary policy would leave critics much less room for ECB-bashing.

Does Public Banking Work?
Katharina Pistor (Project Syndicate) Oct 10, 2019
While some on the right will decry California's recently enacted public-banking law as an invitation to government profligacy, the history of publicly-owned lending institutions shows that they can play a valuable role in addressing needs left unmet by the market. The key to success lies in governance and avoiding mission drift.

Are Traditional Multinationals Ready for Emerging Markets?
Aubrey Hruby (Project Syndicate) Oct 10, 2019
Emerging markets may be subject to political uncertainty and volatile commodity prices, but they also happen to be among the fastest-growing economies in the world. An explosion in consumer spending will soon offer massive opportunities to companies that can learn to navigate this uniquely challenging business environment.

Making Shipping Sustainable
John Kornerup Bang (Project Syndicate) Oct 10, 2019
The global shipping industry is increasingly recognizing its responsibility to help tackle climate change. But, while private-sector collaboration can have a powerful impact, achieving the progress that is needed requires supportive public policies.

The Case for Mark-to-Planet Finance
Bertrand Badré and Amer Baig (Project Syndicate) Oct 10, 2019
As climate and sustainability issues move to center stage, global finance must fully embed impact and sustainability criteria alongside the core elements of risk and return. Companies and investors should therefore adopt an approach that links the global economy and financial system to the needs of the planet and people.

Strong economy, strong currency
Ric Colacito, Steven Riddiough, and Lucio Sarno (VoxEU) Oct 10, 2019
While it is common to read in the press about linkages between the economic performance of a country and the evolution of its currency, the scientific literature suggests that exchange rates are disconnected from the state of the economy, and that macro variables that characterise the business cycle cannot explain asset prices. This column shares evidence of a robust link between currency returns and the relative strength of the business cycle in the cross-section of countries. A strategy that buys currencies of strong economies and sells currencies of weak economies generates high returns both in the cross section and over time.

Estimating Elections' Effect on the Economy
Azhar Iqbal and Hop Mathews (WF) Oct 10, 2019
The negative economic impacts of uncertainty have been in the spotlight over the past year. With 2020 around the corner, how might uncertrainty from the election affect the economy? We looked at the past 70 years to see how the economy has faired in election years.

Is There Too Much Debt in the Eurozone?: Part V
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Oct 10, 2019
At first glance, it appears that the financial health of the European financial system is better today than it was a decade ago. But a closer look leaves some cause for concern.

Germany’s stock market keeps shrugging off bad news
Katie Martin (FT) Oct 11, 2019
Dax benchmark rises despite gloomy economic data and woes of Germany Inc.

Kristalina Georgieva’s IMF challenge
Kevin P Gallagher and Haihong Gao (FT) Oct 11, 2019
Three reforms she must implement to prepare the Fund for the new world economy.

Sharp Cuts in Immigration Threaten U.S. Economy and Innovation
Austan Goolsbee (NYT) Oct 11, 2019
Trump administrations restrictions are bound to slow growth and, if the 1920s are a guide, could make American scientists and inventors less productive, the economist Austan Goolsbee says.

Former World Leaders: The Trade War Threatens the World’s Economy
Kevin Rudd, Helen Clark, and Carl Bildt (NYT) Oct 11, 2019
Despite an interim deal, global peace and prosperity remain at risk if the United States and China do not fully resolve their conflict.

Automation Won't Destroy Trade — It Might Even Boost It
Christine McDaniel (The Hill) Oct 11, 2019
Should we pay attention to alarmist predictions that automation, robots, and 3D printing will destroy jobs, disrupt value chains, and maybe even reduce the need for international trade? A new report from the World Bank shows that the data and evidence around these claims does not support the hype. In fact, these technological advancements may increase trade, lead to expansion in output, and increase the demand for material inputs.

Netflix’s “American Factory” and the New Geography of Manufacturing
Irene Yuan Sun (CGD) Oct 11, 2019
The story in American Factory is proof that U.S. manufacturing, despite its well-trumpeted demise, may well be one that can come back, albeit in the form of Chinese or other foreign investment.

Global Banks May Grow More Vulnerable to a Dollar Disruption
Claudio Raddatz and Adolfo Barajas (IMF) Oct 11, 2019
An increase in dollar funding costs can reverberate across the global financial system.

A Small Deal With China Is Trump’s Best Option
Karl W Smith (Bloomberg Opinion) Oct 11, 2019
The president has had so much bad news lately that his calculus for trade negotiations may be changing.

Manufacturing Soft Landing? Dare to Dream
Brooke Sutherland (Bloomberg Opinion) Oct 11, 2019
Earnings from bellwether Fastenal suggest the industrial economy, while slowing, may avoid the cliff.

The Insanity of Austerity
Isabel Ortiz and Matthew Cummins (Project Syndicate) Oct 11, 2019
Although austerity measures do not command the same attention that they did in the aftermath of the 2008 financial crisis, they are still central to the prevailing policy playbook. Worse, the longer that governments cling to this failed policy approach, the harder it will be to achieve sustainable, inclusive economic growth.

How to Support Developing Countries in Energy Transition
Kenneth Rogoff (Project Syndicate) Oct 11, 2019
Despite the severity of the climate-change crisis, much of the debate in advanced economies is entirely inward-looking, without recognizing that the real growth in carbon dioxide emissions is coming from emerging Asia. In fact, Asia already accounts for a higher share of global emissions than the United States and Europe combined.

Global economy is at risk from monetary policy black hole
Lawrence Summers (FT) Oct 12, 2019
Governments should borrow more to stave off secular stagnation.

The Ghosts of Failed Banks Have Returned
Alasdair Macleod (Mises Wire) Oct 12, 2019
A new banking crisis is not only in the making, for which the repo problem serves as an early warning, but it could escalate quite rapidly.

China bucks the trend with solid activity growth
Gavyn Davies (FT) Oct 13, 2019
Alternative data trackers suggest the country is avoiding other big economies’ gloom.

Mario Draghi’s critics are misguided
Jean-Claude Trichet (FT) Oct 13, 2019
Measures taken by the European Central Bank since the crisis were bold and necessary.

Light at the end of the Brexit tunnel
Wolfgang Münchau (FT) Oct 13, 2019
Ireland’s support of Boris Johnson’s deal will make shifting no-deal blame harder for both sides.

The China Trade Truce
WSJ Oct 13, 2019
Both sides agree to a temporary peace to avoid more economic harm.

The ‘Trump Factor’ in the US–Japan trade deal
Aurelia George Mulgan (EAF) Oct 13, 2019
Despite Japan's concessions on agriculture, nothing was done to resolve the question of tariffs on Japanese automobiles.

Is Fed’s Bill-Buying Spree QE? Does It Matter?
Mohamed Aly El-Erian (Bloomberg Opinion) Oct 13, 2019
It’s probably QE Lite, but what it’s called matters less than the challenges facing central banks.

Who Needs Financing More Than Businesses? Refugees
Irene Yuan Sun (Bloomberg Opinion) Oct 13, 2019
Finance exists to solve certain basic problems. The world’s displaced confront more of them than anyone.

America’s Great Shale Oil Boom Is Nearly Over
Julian Lee (Bloomberg Opinion) Oct 13, 2019
But another one is probably on the way, as the industry reaches adulthood.

Recessions and size of the middle class
Joan Costa-i-Font and Alberto Batinti (VoxEU) Oct 13, 2019
A sizeable middle class is essential to protect societies against socioeconomic and political instability. This column examines the effect of economic recessions on the size of the middle class using different income-based and self-perception definitions. It finds that anticipated recessions do not produce an overall middle-class squeeze, but unanticipated shocks such as the Great Recession do. It also finds that recessions increase the share of the population that regards itself as middle class.

Nobel for development economics will bolster profession
Martin Sandbu (FT) Oct 14, 2019
Prize-winners prove economists are tackling one of humanity’s fundamental problems.

Africa must take a leading role in the data economy
Vera Songwe (FT) Oct 14, 2019
Continent-wide solutions will help boost growth and alleviate poverty.

We Need a New Capitalism
Marc Benioff (NYT) Oct 14, 2019
The current system has led to profound inequality. To fix it, we need businesses and executives to value purpose alongside profit.

Nobel Laureates Aim Too Low on Global Poverty
David R. Henderson (WSJ) Oct 14, 2019
Immigration and growth would help more than addressing the winners’ ‘manageable questions.’

Brexit and Finance: Brace for No Impact?
Nicolas Véron (Bruegel) Oct 14, 2019
Amid the daily high drama of Brexit, it is easy to lose track of the structural shifts, or lack thereof, that may be associated with the UK’s possible departure from the European Union. One of them, and not the least, is the potential impact on the European and global financial system.

Globalisation strikes back
Brian Caplen (Banker) Oct 14, 2019
The IMF's new managing director, Kristalina Georgieva, is out to demonstrate that the gains from globalisation outweigh the losses, writes Brian Caplen.

Europe Doesn’t Need Another Currency Crisis
Bloomberg Opinion Oct 14, 2019
Leaders shouldn’t wait for the next disaster before addressing the euro’s flaws.

The U.S.-China Trade Cease-Fire Isn’t a Done Deal
Bloomberg Opinion Oct 14, 2019
Despite claiming otherwise, the U.S. hasn’t achieved much in the latest round of talks.

This Trade Deal Is a Band-Aid. And It’s as Good as It Gets
David Fickling (Bloomberg Opinion) Oct 14, 2019
Billions of dollars of tariffs are still in place, and there’s no momentum toward a more conciliatory relationship.

Singapore's Central Bankers May Know Something We Don't
Daniel Moss (Bloomberg Opinion) Oct 14, 2019
The city-state’s monetary officials could have been a lot more aggressive considering the global slowdown. Perhaps there’s cause for optimism.

The Sick Men of Europe Rise, But for How Long?
Ferdinando Giugliano (Bloomberg Opinion) Oct 14, 2019
Greece and Italy shrug off high debt and weak economic growth to clinch successful bond sales in comeback runs.

Trade 'Mini-Deal' Doesn't Let Fed Off the Hook
Timothy A Duy (Bloomberg Opinion) Oct 14, 2019
Lacking an inflation threat, policy makers will likely continue to err on the side of safety with another reduction at the end of the month.

What If Poor Nations Were Paid to Take In Refugees?
Stephen L Carter (Bloomberg Opinion) Oct 15, 2019
A new Nobel winner’s overlooked paper suggests a solution to the challenge of mass migration.

A Strong U.S. Consumer Won't Prevent a Recession
Gary Shilling (Bloomberg Opinion) Oct 14, 2019
Falling interest rates are likely to deter spending and boost savings rates, further weighing on growth.

We Need a New Way to Measure Human Progress
Ajay Chhibber (Bloomberg Opinion) Oct 13, 2019
Development rankings favor countries that use more carbon and deplete more resources. To prevent global warming, that has to change.

An Economics Nobel for Three Pragmatic Poverty-Fighters
Noah Smith (Bloomberg Opinion) Oct 14, 2019
Finding what works in developing nations is more meaningful than high-flying theories.

How China Can Reach its Centennial Goal
Zhang Jun (Project Syndicate) Oct 14, 2019
The focus on exports has undoubtedly served China well over the last four decades. But the key to achieving President Xi Jinping's goal of creating a “great modern socialist country” by 2049 will be unleashing the potential of China’s domestic market, especially by eliminating institutional barriers to the growth of private enterprises.

Can Synchronized Stagnation Be Stopped?
Eswar Prasad and Ethan Wu (Project Syndicate) Oct 14, 2019
Given the growing risk of economic stagnation, governments may soon need to provide further stimulus – ideally in tandem with broader structural reforms. But with many governments seemingly lacking the political will to take such an approach, monetary policy will likely continue to shoulder the heavy and increasingly unsustainable burden of supporting growth.

How to Stem Ukraine’s Corruption
Daron Acemoglu and James A. Robinson (Project Syndicate) Oct 14, 2019
In terms of economic growth, the Polish and Ukrainian experiences in the decades since the fall of communism have been a portrait in contrasts. Whereas Poland embraced the power of democratic civil society and grew wealthier, Ukraine remained trapped by kleptocratic institutions that bred a culture of corruption and destroyed public trust.

Financing the Green Transition
Bertrand Badré and Antoine Sire (Project Syndicate) Oct 14, 2019
Changing the energy-financing models of banks, or developing sustainability-linked loans and green bonds, will simply not be enough to facilitate the transition to a more sustainable economy. A new approach that is effective and scalable must take investors’ expectations fully into account.

Will Libra Be Stillborn?
Barry Eichengreen (Project Syndicate) Oct 14, 2019
Where the problem for economies and financial services is lack of competition, residents of developing countries need to look to their own regulators and politicians. The remedy for their woes is not going to come from Mark Zuckerberg.

The Coming AI Spring
James Manyika and Jacques Bughin (Project Syndicate) Oct 14, 2019
Artificial intelligence can generate tremendous value for us all, if policymakers and businesses act swiftly and smartly to capture its full benefits and mitigate the inevitable risks. The long-awaited “AI spring” may finally be arriving, but we will need to be prepared to manage its onset with care.

Quantitative Greening
Laura Tyson and Afsaneh Beschloss (Project Syndicate) Oct 14, 2019
In the years since the signing of the Paris climate agreement, many of the world's central banks and leading financial regulatory authorities have started to create new tools to assess and manage climate-related financial risks. Behind these efforts is a shared realization: there can be no climate stability without financial stability.

How to Afford the SDGs
Sergei Guriev (Project Syndicate) Oct 14, 2019
The track record of two large multilateral institutions shows that investments aimed at achieving the Sustainable Development Goals can bring major benefits to society as well as adequate risk-adjusted returns to investors. And the success of this model suggests how to increase private SDG-linked investment.

Sailing into uncharted demographic waters
David Bloom (VoxEU) Oct 14, 2019
Population ageing, driven by declining fertility, increasing longevity, and the progression of large-sized cohorts to older ages, is the dominant global demographic trend of the 21st century. This column introduces a new Vox eBook that examines the myriad challenges and economic uncertainties posed by ageing populations. Overall, the contributions suggest that although the challenges are formidable, they are not insurmountable. There is good reason to reject the view that ‘demography is destiny’.

How domestic fiscal frameworks can contribute to sound fiscal policy
Lucio R Pench, Stefan Ciobanu, Vincenzo Galasso, and Cristiana Belu Manescu (VoxEU) Oct 14, 2019
Much of the debate on fiscal discipline and policy has focused on fiscal rules and their appropriate design. Using recent work by the European Commission on national fiscal frameworks in the EU member states, this column shows that other elements of the fiscal framework are just as important as national fiscal rules important for fiscal discipline. Independent monitoring of compliance, more realistic macroeconomic and budgetary forecasts, comprehensive and timely fiscal statistics and medium-term fiscal planning are also key for fiscal discipline in the EU.

Rethinking fiscal policy choices in the euro area
Paul De Grauwe and Yuemei Ji (VoxEU) Oct 14, 2019
With an economic slowdown looming in the euro area, how should fiscal policies respond? This column uses a behavioural macroeconomic framework to investigate the trade-offs between stabilising output and public debt. It proposes that, when the interest rate is lower than the growth rate of the economy, fiscal policy can be used as a tool for output stabilisation while keeping public debt stable. It argues that many EU countries have the fiscal space to stimulate their economies, which could help in preventing a recession.

The Pretend Trade Deal
Christopher Balding (FP) Oct 14, 2019
The United States and China proudly announced a partial trade deal on Friday, but it’s not likely to lead to a meaningful agreement.

ECB critics are right to worry on monetary policy
John Plender (FT) Oct 15, 2019
There is moral hazard in debt monetisation as it can neuter market discipline.

Global economic policymakers are playing with fire
Martin Wolf (FT) Oct 15, 2019
Too much of what ails the world economy is the result of ‘stupid stuff’.

Fed awaits answers on liquidity strains
Philip Stafford (FT) Oct 15, 2019
Earnings from major banks and BNY Mellon will shed light on repo market.

Why the renminbi’s challenge to the dollar has faded
Hudson Lockett and Eva Szalay (FT) Oct 15, 2019
Trade conflicts have made it hard for China to let its currency trade more flexibly.

A Composite Digital Currency Is a Non-Starter
Edwin M. Truman (PIIE) Oct 15, 2019
The prospect of digital money replacing cash, checks, and credit cards around the world is both tantalizing and scary to many experts and policymakers.

The Cost of Another US-China No-Deal Deal
Mary E. Lovely (PIIE) Oct 15, 2019
The US-China trade deal announced by President Donald Trump on October 11 was promoted as a "substantial phase 1" of a future agreement to address broader issues. But because this phase 1 has not been written or formalized, it does little to reduce uncertainties surrounding commercial relations between the world's two largest economies. Currently, US importers face average tariffs of 21 percent on goods from China while US exporters face average Chinese tariffs of 21.1 percent.

Steel Tariffs against Turkey Unlikely to Halt Its Attack on Kurds
Gary Clyde Hufbauer (PIIE) Oct 15, 2019
President Donald Trump’s new tariffs on Turkish steel, aimed at punishing Turkey over its incursion in Syria, are unlikely to deter President Recep Tayyip Erdogan from overrunning Kurdish territory in its neighboring country. Crushing Kurdish nationalism has been a Turkish goal for decades. Trump’s abrupt decision to withdraw US troops from northern Syria gave Erdogan a golden opportunity to fulfill that objective.

The Progressive Case Against Protectionism
Kimberly Clausing (FA) Oct 15, 2019
How trade and immigration help American workers.

Money Can’t Buy You “Country Ownership”
William Savedoff (CGD) Oct 16, 2019
Aid modalities play a supporting role and the challenge of verification.

The Economic Cost of Devaluing “Women’s Work”
Kristalina Georgieva, Cristian Alonso, Era Dabla, and Kalpana Kochhar (IMF) Oct 15, 2019
Unpaid work declines as economic development increases.

The World Economy: Synchronized Slowdown, Precarious Outlook
Gita Gopinath (IMF) Oct 15, 2019
We are downgrading growth for 2019 to 3 percent, its slowest pace since the global financial crisis.

Puerto Rico Needs More Than Debt Restructuring
Bloomberg Opinion Oct 15, 2019
Real economic recovery requires additional federal intervention.

Singapore-on-Thames Isn't Going to Happen
Therese Raphael (Bloomberg Opinion) Oct 15, 2019
Merkel and Macron are worried that the U.K. will slash taxes and regulations. But they should look first at their own competitiveness.

Puerto Rico’s Debt Deal Leaves No Room for Error
Desmond Lachman, Brad Setser, and Antonio F Weiss (Bloomberg Opinionc) Oct 15, 2019
Its debt is more sustainable, but still much higher per capita than even the most indebted U.S. state.

U.S.-China Trade Will Never Be the Same
Noah Smith (Bloomberg Opinion) Oct 15, 2019
The terms of the relationship have changed forever, no matter who wins the 2020 presidential election.

Unsustainable Australia
Kevin Rudd (Project Syndicate) Oct 15, 2019
Before the current conservative government came to power in 2013, Australia was well-positioned to make the necessary transition to a low-carbon economy. But now, the country is heading in reverse, and has already fallen behind most developed countries, and even China, on reducing emissions and building resilience against climate change.

Anti-Globalization Bias and Public Policy
Shang-Jin Wei (Project Syndicate) Oct 15, 2019
Although much of the globalization debate focuses on the uneven impact of open trade, three other inherent anti-globalization biases are at work in many societies. These often contribute to the emergence of misguided public policies that benefit neither employers nor workers.

Can a West African Currency Union Work?
Simplice A. Asongu (Project Syndicate) Oct 15, 2019
The eurozone’s experience showed how unruly currency unions can be, and how important it is to continue experimenting and adapting. A currency union comprising the 15 members of the Economic Community of West African States will be no different – but that doesn't mean it can't work.

Integrating the Arab World for Sustainable Growth
Maha Ali (Project Syndicate) Oct 15, 2019
At a time of severe economic challenges and deep political uncertainty, revitalizing the Arab world’s integration agenda might seem like a pipe dream. But, as other regions have shown, it is achievable, and if Arab countries want to address the challenges they face in an efficient and sustainable way, there is no alternative.

Monetary policy should prevent deflation and avoid a bad equilibrium
Olli Rehn (VoxEU) Oct 15, 2019
It has been recently suggested by a group of seasoned central bankers that there has been no danger of a deflationary spiral in the euro area. This column argues instead that the threat of a deflationary spiral was avoided by several reinforcements of the degree of monetary policy accommodation since 2015, and that a key lesson of monetary policy of the last ten years is that timely action is essential to avoid the sort of profoundly harmful equilibrium that might arise from prolonged low inflation and zero interest rates.

South Asia Used to Be the World’s Fastest-Growing Region. Now It’s Facing an Economic Slowdown.
Ravi Agrawal and Kathryn Salam (FP) Oct 15, 2019
A troubling new World Bank report indicates that economic growth in South Asia—until recently the fastest-growing region—is finally slowing down.

Should Capital Flow from Rich to Poor Countries?
Alexander Monge-Naranjo, Juan M. Sánchez, Raül Santaeulàlia-Llopis, and Faisal Sohail (FRBSL Review) Oct 15, 2019
Are human and physical capital stocks allocated efficiently across countries? The authors find that global efficiency losses from the misallocation of human capital are much more substantial than those of physical capital, amounting to 40% of the world’s output.

QE or Not QE? That Is Not the Question.
Jay H. Bryson and Michael Pugliese (WF) Oct 15, 2019
For the first time since 2013, the Federal Reserve is set to grow its balance sheet again. Although the mechanics look similar to QE, the motivations behind today's asset purchases are much different than previous programs.

Who Is Most Exposed to a Global Manufacturing Slowdown?
Michael Pugliese and Nick Bennenbroek (WF) Oct 15, 2019
As the global economy has decelerated over the past year, the weakness has been concentrated in the factory sector. In this report, we examine which advanced economies are most exposed to a manufacturing slowdown.

Yield Curve Responses to Introducing Negative Policy Rates
Jens H.E. Christensen (FRBSF Econ Letter) Oct 15, 2019
Given the low level of interest rates in many developed economies, negative interest rates could become an important policy tool for fighting future economic downturns. Because of this, it’s important to carefully examine evidence from economies whose central banks have already deployed such policies. Analyzing financial market reactions to the introduction of negative interest rates shows that the entire yield curve for government bonds in those economies tends to shift lower. This suggests that negative rates may be an effective monetary policy tool to help ease financial conditions.

Policymakers have chance to boost global economy
Martin Sandbu (FT) Oct 16, 2019
They can make up for self-inflicted mistakes that have worsened the global slowdown.

Indian’s bankruptcy code is failing to shine
Henny Sender (FT) Oct 16, 2019
Country’s supreme court hearing will help decide future of government’s flagship reform.

Why Japan could be on the brink of a historic mistake
Leo Lewis (FT) Oct 16, 2019
Investors fear a backlash against corporate governance changes is behind proposed foreign investment rule change.

Kenya aims to deliver ‘health for all’ by 2022
Uhuru Kenyatta (FT) Oct 16, 2019
President Kenyatta: universal health coverage is critical for economic development.

Huge wage rises signal new phase in central Europe’s transformation
Ben Hall (FT) Oct 16, 2019
Poland, Czech Republic and Hungary among countries looking to shed ‘cheap labour’ reputation.

The Tariff Redistribution Act
WSJ Oct 16, 2019
Turning border taxes into another form of political largesse.

Trump’s China Deal Leaves the Global Economy as Uncertain as Ever
Ana Swanson and Alan Rappeport (NYT) Oct 16, 2019
A trade truce with China has done little to reduce the uncertainty that threatens the global economy.

The 1980s are calling, they want their economy back
William Pesek (WP) Oct 16, 2019
The force of nostalgia is strong in Washington and Tokyo.

Lower for Longer: Rising Vulnerabilities May Put Growth at Risk
Tobias Adrian and Fabio Natalucci (IMF) Oct 16, 2019
Stretched asset valuations in some markets are contributing to financial stability risks.

A Trade War Resolution Isn’t Forthcoming. What Does That Mean for Supply Chains?
Gary Gereff (Brink) Oct 16, 2019
What impact will the U.S.-China trade dispute have on global supply chains? With no resolution in sight, what comes next?

Facing Recession, Hong Kong’s Small Businesses Need a Boost
Nisha Gopalan (Bloomberg Opinion) Oct 16, 2019
Easier capital rules for banks aren’t likely to release sufficient credit to hard-pressed enterprises.

Brexit Deal: Here's What Will Happen to U.K. Interest Rates
Marcus Ashworth (Bloomberg Opinion) Oct 16, 2019
A smooth Brexit would leave the U.K. struggling with the global slowdown just like everyone else. It would probably follow the Fed’s lead on rates.

Even the Chinese Struggle to Make Stuff in America
Noah Smith (Bloomberg Opinion) Oct 16, 2019
Netflix’s “American Factory” documents the collapse of U.S. manufacturing and the long odds against the Rust Belt.

We're One Mistake Away From a Global Recession
Daniel Moss (Bloomberg Opinion) Oct 16, 2019
Over the past decade, central banks have worked together to boost growth. Too bad China and the U.S. aren’t feeling very cooperative anymore.

China to Underscore Global Economic Quandary
Mohamed Aly El-Erian (Bloomberg Opinion) Oct 16, 2019
Its GDP figure on Friday will be a reminder to finance officials meeting in Washington about a worldwide slowdown and central bank dilemma.

How the U.S.-China Trade War Could Wallop the Financial System
Ferdinando Giugliano (Bloomberg Opinion) Oct 16, 2019
Protectionism has central bankers loosening monetary policy, which pushes investors to take bigger risks.

The Survival of Democracy in Central and Eastern Europe
Slawomir Sierakowski (Project Syndicate) Oct 16, 2019
Following parliamentary elections in Poland and local elections in Hungary, populist autocrats in both countries remain in power, where they will continue to undermine democratic institutions. Even so, relative victories for opposition forces in both countries show that the region's "illiberal democrats" are not unbeatable.

A Window of Opportunity for African Fossil Fuels
Jesse Salah Ovadia (Project Syndicate) Oct 16, 2019
As the world pursues a more sustainable future, it would be a mistake for African countries to base their development strategies on fossil-fuel exploitation. Instead, they must figure out how to maximize the oil and gas industry’s short-run benefits for development, while advancing the clean-energy transition.

The Necessity of Climate Economics
Vinod Thomas (Project Syndicate) Oct 16, 2019
Economics must recognize the central role of negative externalities in the growth process, and integrate the costs and benefits of environmental stewardship and climate action. By doing so, economists could make an enormous contribution to tackling global warming – the biggest challenge facing the world today.

India’s Modi Slowdown
Shashi Tharoor (Project Syndicate) Oct 16, 2019
After Prime Minister Narendra Modi was overwhelmingly re-elected in May with an even larger majority for his party, many economists expected him to take bold steps to remove the many bottlenecks that have discouraged investors. But no one should believe the Modi government has the ability or the will to fix what it broke.

Income Inequality among Old Chinese
Katja Hanewald, Ruo Jia, and Zining Liu (VoxChina) Oct 16, 2019
Using data from the China Health and Nutrition Survey (CHNS) from 1991–2015, we decompose the income inequality among old Chinese and compare the income inequality between old households and young households. We develop an OLG model and a new empirical method to test how initial socioeconomic differences transmit to income inequality in the working years and then in old age. We find that the urban-rural gap and educational differences are the two most important factors leading to income inequality among the old. We also find that income inequality accumulates with age in China and is reinforced in old age by the fragmented Chinese public pension system.

The price effects of trade
Xavier Jaravel and Erick Sager (VoxEU) Oct 16, 2019
International trade creates both winners and losers. Using comprehensive price data, this column estimates the US price effects of the China shock from 2000 to 2007. It finds that US consumers benefited from large price declines in product categories in which imports from China increased, as increased trade with China eroded the market power of US producers. The positive impact of the China shock on the purchasing power of US consumers is large in comparison to its negative impact on US jobs.

The cash hoarding puzzle and the rising global demand for cash
Sayuri Shirai and Eric Alexander Sugandi (VoxEU) Oct 16, 2019
Although cashless payments are becoming increasingly common, the demand for cash is rising in many advanced economies. One reason for this is cash hoarding. The column uses data on cash issuance to examine the scale of, and motives for, cash hoarding. The two most important drivers are monetary easing and the preference of older people for cash.

The inflation puzzle in the euro area
Thomas Hasenzagl, Filippo Pellegrino, Lucrezia Reichlin, and Giovanni Ricco (VoxEU) Oct 16, 2019
What is happening to inflation and output in the euro area? The ECB has apparently lost the ability to raise inflation and price expectations have been sliding since the last recession. Much of the policy debate has focused on the flattening of the Phillips curve. Yet, as this column shows, estimations of the joint output-inflation process point to a decline of both output potential and trend inflation as the most relevant elements of the puzzle.

To Prevent Financial Crises, Regulate Short-Term Debt
Gary Gorton (Yale Insights) Oct 16, 2019
Financial crises seem irrevocably intertwined with market economies. This is because short-term lending, while essential to the economy, is also vulnerable to panic when parties lose confidence in each other. A proposal for a method of regulating short-term debt and preventing future crises.

China’s Record on Intellectual Property Rights Is Getting Better and Better
Yukon Huang and Jeremy Smith (FP) Oct 16, 2019
China is improving its policies on intellectual property rights, but it could use a partner like the United States to help it stay the course.

Is There Too Much Debt in the Eurozone?: Part VI
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF) Oct 16, 2019
In the final installment in our series on debt in the Eurozone, we summarize our findings. While the euro area has appeared to delever over the past few years, there is certainly still room for concern.

Africa’s eurobonds are a blank cheque
Andrew Roche (FT) Oct 17, 2019
Failure to declare the use of proceeds is a threat to debt sustainability.

Sanctions are Trump’s new way of war
Philip Stephens (FT) Oct 17, 2019
The president has merged America’s economic policy with its security strategy.

Ethiopia’s path to prosperity opens under Abiy
Paul Collier (FT) Oct 17, 2019
The prime minister’s reforms are an object of fascination across Africa.

Argentina fiasco should prompt reflection at the IMF
Arturo Porzecanski (FT) Oct 17, 2019
The Fund’s biggest-ever programme was poorly thought through.

Central banks are tuning in to climate change
Gillian Tett (FT) Oct 17, 2019
Kristalina Georgieva’s appearance on an IMF panel about the issue is an important signal.

Boris Gets Brussels to Say Yes
WSJ Oct 17, 2019
Can the British PM get Westminster on board with his Brexit deal?

The world has changed. The G-20 needs to change with it.
Lawrence Summers (WP) Oct 17, 2019
What does the future hold for the G-20?

China bulls face the $28 billion question
William Pesek (AT) Oct 17, 2019
Beijing's GDP growth target of 6% looks a distant hope as the economy slows despite the PBOC's stimulus move/

The Digital Economy Is Boosting Productivity — but Official Measures Aren’t Capturing the Benefits
Lydia Boussour (Brink) Oct 17, 2019
The new digital economy has become a key driver of the United States' economic growth and productivity. In this digital era, businesses can operate faster and at a lower cost, but despite the undeniable boost from digital innovations, U.S. productivity growth has slowed sharply since the early 2000s. Why does this paradox exist?

The EU-UK Brexit Deal
Kallum Pickering (Globalist) Oct 17, 2019
Progress, but does Boris have the numbers?

A Monetary Policy Tilt for Inequality and Climate Change?
Patrick Honohan (PIIE) Oct 17, 2019
A growing number of economists and advocates are calling on the US Federal Reserve and other central banks to take more account of social and environmental concerns in the design and implementation of monetary policy.

U.S.-China Trade Deal: A Temporary Reprieve
Libby Cantrill (PIMCO) Oct 17, 2019
Without pouring water on the “love fest,” we contend that the deal struck between China and the U.S. leaves much to be desired.

Trudeau Has Canada's Economy Humming
Matthew A Winkler (Bloomberg Opinion) Oct 17, 2019
Its growth indicators are world beaters, as the country becomes a technology juggernaut.

Stimulus Brings Stagnation: The Case of Japan
Mihai Macovei (Mises Wire) Oct 17, 2019
Japan's "lost decade" turned into three decades as the scourge of non-stop monetary and fiscal stimulus brought seemingly endless economic stagnantion.

China’s rise fits every development model
Martin Raiser (Brookings) Oct 17, 2019
To make this point, I focus on four big development theories. This is not an exhaustive list, but it is representative of the most important ideas on the dynamics of economic growth.

Grab What You Can in India’s Bad-Loan Melee
Andy Mukherjee (Bloomberg Opinion) Oct 17, 2019
Creditors aren’t politely waiting in line to claim their collateral as the law of the jungle threatens finance.

Ending Short-Termism by Keeping Score
Klaus Schwab (Project Syndicate) Oct 17, 2019
As finance ministers gather for the World Bank and International Monetary Fund’s annual meetings, they will face no shortage of urgent matters to discuss. But they should not deflect attention from even more pressing long-term challenges.

The link between declining middle-wage jobs, rising wage inequality, and worker welfare
Jennifer Hunt and Ryan Nunn (VoxEU) Oct 17, 2019
Over the last five decades, middle-wage jobs diminished in the US as wage inequality increased. This column investigates the relationship between these two phenomena, and finds no evidence that either computerisation or automation (often cited as a source of both trends) produced employment polarisation or increased wage inequality. By examining wages at the individual level (rather than occupation-average wages), the column suggests that the evolution of wages can be better explained by distinct causes—ranging from changing labour market institutions to globalisation—than by observable demographic factors.

Does Britain need a stablecoin after sterling’s wild ride?
Izabella Kaminska (FT) Oct 18, 2019
Brexit-related volatility is making the pound act like a mini bitcoin.

The UK needs a public vote on Brexit deal
Martin Wolf (FT) Oct 18, 2019
Britons must agree to become significantly poorer and accept the illusion of greater sovereignty.

Why the Fed may have painted itself into a corner
Joe Rennison (FT) Oct 18, 2019
Moves to alleviate cash shortages could end up exacerbating them.

Equity investors see reasons to be cheerful
Michael Mackenzie (FT) Oct 18, 2019
Positive news on trade, Brexit and German spending could fuel a year-end surge.

How Steam and Chips Remade the World
John Steele Gordon (WSJ) Oct 18, 2019
Cheap energy powered an economic revolution in the 18th century, and cheap information in the 20th.

Six Charts on How Elevated Global Uncertainty Is Creating Challenges for Sub-Saharan Africa
IMF Oct 18, 2019
Growth in sub-Saharan Africa is expected to pick up, though at a slower pace than previously expected. This revision reflects a more challenging external environment, continued output disruptions in oil-exporting countries, and weaker-than-anticipated growth in South Africa.

Navigating Heightened Uncertainty
IMF Oct 18, 2019
Growth in sub-Saharan Africa is projected to pick up from 3.2 percent in 2019 to 3.6 percent in 2020 – a slower pace than envisaged in April 2019, partly due to a more challenging global environment. Although fiscal reforms should continue in many countries to contain debt vulnerabilities, some countries have scope for monetary easing to help counter external headwinds. Structural reforms to boost investment and competitiveness, including by fully operationalizing the African Continental Free Trade Agreement (AfCFTA), can boost medium-term growth.

Reform Doesn’t Have to Cost Votes
Davide Furceri, Jonathan D. Ostry, and Chris Papageorgiou (IMF) Oct 18, 2019
Economic reforms are often painful in the short term and hence unpopular, but does that mean reform-minded leaders always pay a price at the ballot box? Not necessarily, we learned in our analysis of structural reforms and election outcomes in 66 countries.

Could the Fed Pivot on Balance Sheet Policy for Mortgage Securities?
Mike Cudzil and Dan Hyman (PIMCO) Oct 18, 2019
The Fed has another lever to pull to ease monetary policy, one that could increase savings rates and create more disposable income.

Germany: Back to “Sick Man of Europe”?
Nicola Mai (PIMCO) Oct 19, 2019
Germany’s economy is on the brink of recession. We expect a gradual recovery through the next year, but this is dependent on easing trade tensions.

International Role of the Euro
Poul M. Thomsen (IMF) Oct 19, 2019
What makes a good international reserve currency and how does the euro stack up?

To sustain growth, China can learn from previous transitions to high income
Martin Raiser and Hoon Sahib Soh (Brookings) Oct 19, 2019
China’s current development challenges and the policies needed to sustain growth across the threshold to high income and beyond are not very different from those of erstwhile middle-income countries (MICs).

Chinese Imports Destroyed More Factory Jobs Than Robots
Noah Smith (Bloomberg Opinion) Oct 18, 2019
Manufacturing employment held up until 2000. Then it fell off a cliff.

Eastern Europe’s Workers Finally Get Paid
Leonid Bershidsky (Bloomberg Opinion) Oct 18, 2019
The region’s populist governments are raising minimum wages as fast as they can, and it helps the economies — for now.

Can Shoppers Hold Up Global Growth?
Daniel Moss (Bloomberg Opinion) Oct 18, 2019
The world’s two biggest economies have become reliant on consumers. That pillar is looking increasingly fragile.

Boris Johnson Is Trumpeting a Fake Success
Ferdinando Giugliano (Bloomberg Opinion) Oct 18, 2019
The U.K. could have done this Brexit deal almost two years ago at a much lower cost. Johnson is now in the same class as Tsipras, Salvini and Di Maio.

Sterling Traders Are Trapped in a Brexit Tunnel
Marcus Ashworth (Bloomberg Opinion) Oct 18, 2019
A win for Johnson on Saturday would see the pound settle into a higher range, but an election and the need for an EU trade deal muddies the water.

The IMF Should Take Over Libra
Yanis Varoufakis (Project Syndicate) Oct 18, 2019
Brilliant ideas that would be catastrophic in the hands of buccaneering privateers should be pressed into public service. That way, we can benefit from their ingenuity without falling prey to their designs.

What Next for the Bretton Woods Twins?
Devesh Kapur (Project Syndicate) Oct 18, 2019
Although multilateralism is in crisis, different fates await the multilateral institutions that were created under the Bretton Woods Agreement 75 years ago. While the International Monetary Fund has found renewed relevance in a world of crises, the World Bank has suffered under the poor leadership of a parade of American men.

Tariffs and monetary policy: A toxic mix
Michael Bordo and Mickey Levy (VoxEU) Oct 18, 2019
The history of tariffs and immigration and capital barriers provides clear lessons of the potentially sizeable economic costs of anti-globalisation policies. This column describes how the US-China tariff war and policy-related uncertainties are harming economic performance, and are also distorting the Federal Reserve’s monetary policy and undermining its credibility and independence. Tariffs and discretionary monetary policy are a toxic mix, and the authors encourage a de-escalation of burdensome barriers to trade and urge the Fed to adopt a systematic, rules-based approach to monetary policy.

Right here, right now: The quest for a more balanced policy mix
Laurence Boone and Marco Buti (VoxEU) Oct 18, 2019
After years of solid growth, worldwide economic activity has slowed down sharply in 2019 while global trade has stalled. At October’s annual meeting of the IMF, policymakers have the difficult task of addressing the immediate policy challenges to support economic growth while also preparing our economies for the future. This column argues that while monetary policy is widely recognised as facing increasing constraints, fiscal policy and structural reforms need to play a stronger role. In particular, fiscal policy could become more supportive, notably in the euro area. Undertaking the right type of public investment now – in infrastructure, education or to mitigate climate change – would both stimulate our economies and contribute to making them stronger and more sustainable.

Against Malthus
Eleanor Penny (LRB) Oct 18, 2019
In a time of climate breakdown, it would be easy to call Malthus a prophet – apparently disproved by the startling onset of industrial growth; later vindicated by its disastrous ecological effects. But Malthus isn’t wrong because his sums don’t add up, or because his hypothesis has been disproved by fresh evidence. He’s wrong because he recast a political problem of production and distribution as a biological problem of reproduction and consumption – distracting from its causes, exculpating its architects and obscuring possible solutions.

Oedipus Wrecks
Tim Quinlan, Azhar Iqbal, and Shannon Seery (WF) Oct 18, 2019
If nervousness and doubt weigh on the psyche of the consumer, can that lead to outright declines in consumer spending? Our statistical analysis of prior cycles suggests that confidence leads discretionary spending and does tend to peak just prior to a downturn. But critically, if we wait for the tide to fully turn, it may be too late.

UK stocks are trapped in a never-ending Brexit loop
Bryce Elder (FT) Oct 19, 2019
Discount attached to domestically focused shares has barely moved since mid-2016.

China’s Xi has more to worry about than slowing economic growth
Tom Mitchell (FT) Oct 20, 2019
Crises such as Hong Kong protests and African swine fever offer sterner test of party’s grip on power.

Europeans have double standards on transatlantic trade
Rana Foroohar (FT) Oct 20, 2019
They talk about corporate responsibility but their companies won’t walk the walk.

US corporate debt triggers recession concerns
Gavyn Davies (FT) Oct 20, 2019
The weakness in company finances is a danger to the rest of the economy.

Is there a way forward in Hong Kong?
Tim Summers (EAF) Oct 20, 2019
Hong Kong's protest movement has ventured far beyond the original catalyst, the government's extradition bill, to reflect deep dislocations in Hong Kong, including identity politics and socio-economic problems that have been simmering since the territory's return to Chinese sovereignty two decades ago.

Hong Kong protests in the Mainland eye
Ben Hillman (EAF) Oct 20, 2019
Public opinion on the Chinese Mainland is strongly in favour of direct intervention in Hong Kong — something Beijing has threatened if Hong Kong's political and business elite are unable to find a solution to the protests which are now in their 20th week.

Saudi Arabia's Best Bet Is to Crash the Price of Oil
Julian Lee (Bloomberg Opinion) Oct 20, 2019
Market management just isn’t working. Instead of supporting oil prices, the kingdom’s output cuts are propping up higher-cost rivals.

Argentina is caught between politics and economic reality
Bill Campbell (FT) Oct 21, 2019
Outcome depends on finding a plan for growth while getting a grip on spending.

Companies should concentrate on profits
Jennifer Burns (FT) Oct 21, 2019
Relegating the interests of shareholders is an open repudiation of the ‘Friedman doctrine’.

Trade will continue to grow despite US-China tensions
José Viñals (FT) Oct 21, 2019
Economies in Asia-Pacific, Africa and the Middle East have significantly improved their potential.

Time is running out for Lebanon’s unsustainable debt
Carlos Abadi (FT) Oct 21, 2019
The country’s ‘magic circle’ is fraying at the edges.

Facebook’s Libra currency is wake-up call for central banks
Brendan Greeley (FT) Oct 21, 2019
Policymakers fear losing control if private companies win digital money race.

Boeing is dragging down the US economy
Megan Greene (FT) Oct 21, 2019
The decision on whether to let the 737 Max fly again may yet be an economic turning point.

With Opec powerless, market dictates oil price
Nick Butler (FT) Oct 21, 2019
There is no shortage of supply but end of the cartel spells uncertainty for sector.

Is the Currency System in Francophone Africa Under Threat?
Stéphane Colliac and Chris-Emmanuel Blé (Brink) Oct 21, 2019
The CFA franc currency, used in two regions of Africa, is in a vulnerable position: Intra-regional trade in the area is low, increasing the likelihood of asymmetric shocks. An examination of the trade relationships, labor mobility and fiscal and debt convergence issues that have affected the exchange rate lends cautiously optimistism about the currency's stability.

No More ‘Marshall Plans’
Gene Dattel (WSJ) Oct 21, 2019
When America rebuilt Europe, it also built a pernicious cliché.

China CPI Breaks 3% PBOC Target: What Does It Mean for Policy?
Isaac Meng (PIMCO) Oct 21, 2019
Headline inflation resulting from a food price shock can never be ignored fully.

How can the new US Development Finance Corporation achieve its ambitious goals while remaining transparent?
George Ingram and Sally Paxton (Brookings) Oct 21, 2019
Created by the BUILD act, the new U.S. Development Finance Corporation (DFC) is set to put “development” at the center of its work. How the DFC team can lay a successful foundation.

Europe's Spending Binge Is Slowing Its Economy
Daniel Lacalle (Mises Wire) Oct 21, 2019
The string of spending increases announced daily in Europe disguise an extremely dangerous bet: that the ECB will bail out the eurozone forever.

How the new Development Finance Corporation can get off to a solid start
George Ingram and Sally Paxton (Brookings) Oct 21, 2019
Scheduled to open its doors this fall, the new U.S. Development Finance Corporation (DFC) has some ambitious—and welcomed—goals. Created by the BUILD Act, the DFC is set to put “development” at the center of its work. The transition team for this new institution, the core of which combines the functions of the Overseas Private Investment Corporation (OPIC) and Development Credit Authority (DCA) (now part of the U.S. Agency for International Development), has been hard at work since the passage of the legislation. From the smallest details—like designing the new logo—to the important ones—such as laying the groundwork for how it will best combine development and growth—the team has worked in an open manner to best learn and hear from a myriad of stakeholders, including other development finance institutions (DFIs), the private sector, other government agencies, and civil society. We applaud the open nature of the collaboration.

The Brexit Saga: Seven Lessons for the EU
Holger Schmieding (Globalist) Oct 21, 2019
The lessons that the EU will – hopefully – draw from Brexit should give it a good chance to weather other storms.

The World Economy Is Stumbling Toward Disaster
Bloomberg Opinion Oct 21, 2019
If a new recession strikes, the Trump administration will get — and deserve — much of the blame.

Normal Yield Curve Doesn’t Mean Everything’s Normal
Mohamed Aly El-Erian (Bloomberg Opinion) Oct 21, 2019
A reversion is just another reminder of how traditional market signals have been distorted by unconventional central bank policies.

What Can Possibly Go Wrong for Sterling?
Marcus Ashworth (Bloomberg Opinion) Oct 21, 2019
The long-term case for pound bulls is pretty strong, even if Parliament scuppers Boris Johnson's deal this week.

The Battle of the Fading Hegemons
Arvind Subramanian (Project Syndicate) Oct 21, 2019
Traditionally, a strong rising power has challenged a weakening incumbent, making the outcome preordained. But the outcome of the current struggle between China and the United States is far from inevitable, because the powers of both the aspirant and the incumbent are eroding – albeit in different ways.

Locking China Out of the Dollar System
Paola Subacchi (Project Syndicate) Oct 21, 2019
By broadening the nexus between economic interest and national security, Trump is encouraging the decoupling of the world’s two largest economies and the emergence of a bipolar world order led by rival hegemons. Beyond fragmenting the trade and financial system that has underpinned the global economy for decades, the stage would be set for a devastating conflict.

Which leading indicators have done better at signaling past recessions?
David Kelley (FRB Chicago Fed Letter) Oct 21, 2019
In this article, I analyze a broad range of leading indicators—economic or financial data series that change in advance of the rest of the economy—to see which ones have done better at signaling past U.S. recessions. I also use these leading indicators to form a new index that outperforms existing leading indexes and the Treasury yield curve at signaling historical downturns

Chile needs a more inclusive model of growth
FT View Oct 22, 2019
Armoured personnel carriers on the streets are not the answer to protests.

Lebanon promises fiscal reform to quell protests
Jonathan Wheatley (FT) Oct 22, 2019
Public finance woes threaten to worsen and set off the latest emerging market crisis.

What could seal a deal to end US/China trade war?
Simon J Evenett (FT) Oct 22, 2019
Donald Trump’s public criticism of Chinese policy makes it harder for his counterpart to make concessions.

Will Argentina be safe in the Peronists’ hands?
Michael Stott and Benedict Mander (FT) Oct 22, 2019
Leftwing populists are poised to retake power. The priority is a swift renegotiation of the country’s huge debt pile

Chile Learns the Price of Economic Inequality
NYT Oct 22, 2019
Protesters are demanding a larger share of the nation’s prosperity — a reality check for its celebrated economic model.

A Brexit Deal They Love to Hate
WSJ Oct 22, 2019
Britain’s Parliament claims it supports Boris Johnson—but not yet.

China and US in trillion-dollar tech war
Gordon Watts (AT) Oct 22, 2019
Huawei conflict and the windfall from 5G will set the scene in Sino-American relations.

Why Trump is breaking trade rules with China but not the EU
Charles Hankla (AT) Oct 22, 2019
The US has imposed sanctions on EU products in protest over subsidies for Airbus - but done that via the WTO.

The Interdependence Between Multilateral Development Banks and Middle-Income Countries
Mauricio Cárdenas (CGD) Oct 22, 2019
The world is a much better place now that it has ever been. But the risk of rolling back is always there and is multidimensional. We need strong MDBs to help us all confront old and new challenges alike.

The October Truce on US-China Trade Failed to Address Subsidies
Chad P. Bown and Jennifer A. Hillman (PIIE) Oct 22, 2019
The “Phase One” truce with China announced by President Donald Trump in October avoided a planned escalation of the US-China trade war. But the “agreement in principle” with Beijing left many issues untouched, most notably the administration’s top priority of ending Chinese subsidies.

Post-Brexit Britain Will Still Rely on Immigrants
Mark Gilbert (Bloomberg Opinion) Oct 22, 2019
Leave supporters who wanted to staunch the flow of foreign workers will find the country can’t live without them.

Russian Income Statistics Are Too Good to Be True
Leonid Bershidsky (Bloomberg Opinion) Oct 22, 2019
A surprise jump in real disposable incomes defies other official data.

The U.S. Needs More of India’s and China’s Best and Brightest
Noah Smith (Bloomberg Opinion) Oct 22, 2019
The Trump administration is trying to cut the H-1B visa program for skilled immigrants. It should be expanded instead.

Indonesia Needs Its Own Silk Road
Shuli Ren (Bloomberg Opinion) Oct 22, 2019
More infrastructure is required. Load up state-owned enterprises with debt, like China, and get it done.

Libra Retreat Would Bring Joy and Relief to Asia
Andy Mukherjee (Bloomberg Opinion) Oct 22, 2019
Facebook’s digital currency project is stepping back from global ambitions that threatened to weaken the levers of monetary policy.

The Open Secret of Development Economics
Yao Yang (Project Syndicate) Oct 22, 2019
To many in China, this year's Nobel Memorial Prize in Economic Sciences seems to have shone a spotlight on one area of development economics at the expense of another. While randomized controlled trials might be useful for creating or improving welfare programs, they can't tell poor countries how to achieve and sustain rapid growth.

The Partial Triumph of 1989
Javier Solana (Project Syndicate) Oct 22, 2019
The fall of the Berlin Wall in November 1989 marked the end not of a historical chapter, but of a paragraph. Although capitalism currently has no rival, it has proven its compatibility with illiberal forces.

Why Rich Cities Rebel
Jeffrey D. Sachs (Project Syndicate) Oct 22, 2019
Having lost touch with public sentiment, officials in Paris, Hong Kong, and Santiago failed to anticipate that a seemingly modest policy action (a fuel-tax increase, an extradition bill, and higher metro prices, respectively) would trigger a massive social explosion.

The losses from failed negotiations
Brad Larsen (VoxEU) Oct 22, 2019
Some negotiations may fail even when there are potential gains from trading, but this is hard to estimate because we do not know what the private valuations of the buyers and sellers were. The column describes a database of trades from US car auctions that quantify the lost surplus from failed bilateral bargaining. In this market, 17-24% of negotiations ended in disagreement even when gains from trade existed.

Private equity buyouts and their effects
Steven Davis, John Haltiwanger, Kyle Handley, Ben Lipsius, Josh Lerner, and Javier Miranda (VoxEU) Oct 22, 2019
Private equity buyouts arouse intense interest among investors and business owners as well as policymakers and politicians, but the difficulty of assembling the data needed for a systematic evaluation makes assessing their effects hard. This column uses data on thousands of buyouts in the US to examine the effects on employment, job reallocation, productivity, and worker compensation. The findings suggest that the effects differ greatly by type of buyout, with the credit conditions at the time of buyout, and with the post-buyout evolution of credit conditions and the macroeconomy, casting doubt on the efficacy of ‘one-size-fits-all’ policy prescriptions for private equity.

Light at the End of the Chunnel?
Erik Nelson and Jen Licis (WF) Oct 22, 2019
As a result of the latest Brexit developments, our new base case assumption is that the Withdrawal Agreement Bill (WAB) will be ratified by the U.K. Parliament in the next few days, something we now view as a better-than-ever chance, allowing the E.U. and U.K. to move on to longer-term trade negotiations.

Economists on the Run
Michael Hirsh (FP) Oct 22, 2019
Mainstream trade experts are now admitting that globalization hurt American workers far more than they thought it would,

Mammon
Eugene McCarraher (Aeon) Oct 22, 2019
Far from representing rationality and logic, capitalism is modernity’s most beguiling and dangerous form of enchantment.

Sugar rush from India’s tax cut starts to wear off
Benjamin Parkin (FT) Oct 23, 2019
Slowest growth rate in six years is expected to limit boost to earnings.

Japan’s draconian FDI reforms drag debate into the open
Leo Lewis (FT) Oct 23, 2019
There is an ideological clash in country about role and powers of foreign investors.

Debt markets split into the ‘haves’ and ‘have nots’
Robert Smith (FT) Oct 23, 2019
Investors worried about a turn in the cycle give some companies the cold shoulder.

Can Brazil’s pension reform kick-start the economy?
Andres Schipani and Bryan Harris (FT) Oct 23, 2019
Passing of legislation represents significant victory for Bolsonaro.

The threat and the promise of digital money
Martin Wolf (FT) Oct 23, 2019
Cryptocurrencies look overhyped, the new payment platforms useful and Libra worrying.

African countries need data to drive development
David Pilling (Ft) Oct 23, 2019
Statistics on population, employment and public services would put pressure on governments.

Economic malaise behind Latin America’s year of unrest
Michael Stott (FT) Oct 23, 2019
Weak efforts to diversify and invest are a common thread through period of turmoil.

What will happen on the next episode of Brexit? Stay tuned!
Sebastian Mallaby (WP) Oct 23, 2019
The drama would be entertaining if it wasn’t real life.

Argentina: A Country Caught in an Endless Loop of Financial Crises
Nicolas Russo (Mises Wire) Oct 23, 2019
Although Argentinians mean well, they cannot seem to break free of an endless loop of crises causes by expansions of the welfare state and deficit spending.

As ASEAN Enters an Infrastructure Boom, Geopolitical and Economic Risks Abound
Truong-Minh Vu (Brink) Oct 23, 2019
China and Japan are investing heavily in Southeast Asia, which is witnessing an infrastructure boom. However, there are concerns regarding strings attached to these generous investments, as well as a clear gap in infrastructure spending. ASEAN's leaders are waking up to the urgent need to spend and the importance of a coordinated approach to receiving investment.

Prolonged Uncertainty Weighs on Asia's Economy
IMF Oct 23, 2019
Asia’s strong trade and financial integration is a manifestation of the region’s success. However, this can also be a source of vulnerability amid continuing weakness in global trade and investment, and the region is caught in prolonged global policy uncertainty. Nonetheless, Asia remains the fastest-growing region in the world, accounting for more than two-thirds of global growth in 2019.

Can DFC Compete?
Charles Kenny (CGD) Oct 23, 2019
The new US International Development Finance Corporation (DFC), the successor to the Overseas Private Investment Corporation, will be a major player in global development finance. And unlike OPIC, it will be explicitly targeted at low- and lower-middle-income countries. This targeting is great, but investing in poorer economies has proven complex for all development finance institutions. DFC may well find itself in (unfair) competition with those other institutions over deals—and it will need both international agreement on the use of subsidies and far greater capacity to build a pipeline of projects if it is to deliver on its promise. In a new paper I lay out some of the challenges DFC may face and the policy responses to ensure it can deliver on its mandate.

Germany’s ‘Debt Brake’ Is an Unnecessary Drag
Bloomberg View Oct 23, 2019
Fiscal discipline is good, but leaders in Berlin need more freedom to spur a slowing economy.

Autocracy Is No Model for Developing Economies
Samuel I Hill (Bloomberg Opinion) Oct 23, 2019
It turns out badly 99% of the time. For every Singapore, there are many Sierra Leones.

The Longer-Term Lessons of the Repo Turmoil
William C Dudley (Bloomberg Opinion) Oct 23, 2019
There are more steps the Fed should take. Easing bank regulations isn’t one of them.

Stocks Near Record Highs Send False Signal
Komal S Sri-Kumar (Bloomberg Opinion) Oct 23, 2019
The worsening economic outlook means it’s no time to rotate out of safe assets into riskier ones.

Economic Growth Shouldn’t Be a Death Sentence for Earth
Noah Smith (Bloomberg Opinion) Oct 23, 2019
But it does mean learning how to do more while using fewer resources.

In China, This AA+ Rating Should Freak You Out
Shuli Ren (Bloomberg Opinion) Oct 23, 2019
The struggles of a distressed conglomerate show that risks are lurking below the surface.

Electing America’s Economic Future
Michael J. Boskin (Project Syndicate) Oct 23, 2019
Next year's US presidential election will have far-reaching consequences, not least for the economy. Given the stakes of the outcome, rigorous analysis of the candidates' sharply diverging – and often risky – policy platforms is urgently needed.

How a Weaponized Dollar Could Backfire
Jeffrey Frankel (Project Syndicate) Oct 23, 2019
United States foreign policy under President Donald Trump continues to run counter to America’s traditional post-war objectives. Should the US carelessly relinquish leadership of the global multilateral order, the dollar might eventually lose its own long-standing primacy.

The Impact of the China Tire Safeguard
Sunghoon Chung and Joonhyung Lee (VoxChina) Oct 23, 2019
This column evaluates the impact of the China tire safeguard on the US tire industry. Contrary to claims made by the US government, we find that total employment and average wages in the tire industry were unaffected by the safeguard. This result is not surprising as we find that Chinese tires have been completely diverted to other exporting countries due to the strong presence of multinational corporations in the world tire market. On the other hand, US domestic tire prices increased by up to 10% during the safeguard period. The price increase accompanies the same trend in the price changes of imported tires from both China and the rest of the world. In particular, the tariff was fully reflected in the unit value of tires imported from China. Interestingly, the price of imported tires from the rest of the world also rose during the CTS even though their products were not subject to tariffs.

The Phillips curve: Dead or alive
Peter Hooper, Frederic S. Mishkin, and Amir Sufi (VoxEU) Oct 23, 2019
The apparent flattening of the Phillips curve has led some to claim that it is dead. The column uses data from US states and metropolitan areas to suggest a steeper slope, with non-linearities in tight labour markets. We have been here before – in the 1960s, similar low and stable inflation expectations led to the great inflation of the 1970s.

Electricity adoption, technological change and social conflict
Jakob Molinder, Tobias Karlsson and Kerstin Enflo (VoxEU) Oct 23, 2019
History has shown that new technology can disrupt societies, and current developments in automation have raised anxious speculation on what might happen if stable middle-class jobs are taken over by machines. This column analyses the impact of technological change on labour markets and social protests, taking the case of the adoption of electricity in early 20th century Sweden. It finds that electrification did increase the incidence of local strikes, but that disputes were associated with workers demanding higher wages and better working conditions rather than attempting to block innovation.

Global fund managers are missing a trick on Japan
JC de Swaan (FT) Oct 24, 2019
Fundamental changes to the corporate sector should confound overseas sceptics.

Doing business in China becomes easier after cutting red tape
James Politi (FT) Oct 24, 2019
Latin America ‘a sinking continent’ in competitiveness terms, World Bank warns.

Clearing houses are ripe for reform
Gillian Tett (FT) Oct 24, 2019
There are concerns about what would happen in the event of a big default or shock.

Japanese stocks are hooked on stimulus
Leo Lewis (FT) Oct 24, 2019
Investors may decide more equity purchases by the Bank of Japan are a step too far.

The Day the Trump Boom Died
Paul Krugman (NYT) Oct 24, 2019
Why has business confidence collapsed?

Sorry, but the West isn’t responsible for Zimbabwe’s continuing economic collapse
Jon Temin, Alexander Noyes and Mark Bellamy (WP) Oct 24, 2019
The incompetence of Zimbabwe's leaders is to blame, not sanctions.

China and US hurtle towards Trade War II
Gordon Watts (AT) Oct 24, 2019
The ‘mini deal’ could end up being just a ‘ceasefire’ before a broader economic conflict breaks out.

HIPC with Chinese Characteristics: Why Yesterday’s Debt Relief Is the Wrong Point of Reference for Today’s Crises
Scott Morris (CGD) Oct 24, 2019
HIPC depended on the collective political will of traditional donor countries.

Boris Johnson Should Come Clean on His Brexit Deal
Bloomberg View Oct 24, 2019
The costs could be enormous. The public needs an honest accounting — and another vote.

Germany's Peace Offering to the European Central Bank
Ferdinando Giugliano (Bloomberg Opinion) Oct 24, 2019
Isabel Schnabel's ability to see both sides of the monetary argument would make her a first-rate addition to the central bank's executive board.

Rorschach-Test Economy Lets You See What You Want
Barry L Ritholtz (Bloomberg Opinion) Oct 24, 2019
The expansion and bull market are aging and the data no longer point in just one direction.

Oceans as an Investment Priority
Emma Navarro (Project Syndicate) Oct 24, 2019
As a key variable in the fight against climate change, the world's oceans cannot be a mere afterthought on the global economic and environmental agenda. We should invest in protecting the oceans as if our future depended on it, because it does.

Truth vs. Trump on Immigration
Anne O. Krueger (Project Syndicate) Oct 24, 2019
Ever since the 2016 US presidential election, Donald Trump has exploited unfounded fears of immigrants for political gain, declaring an "emergency" and demanding funds for a border wall. But the real threat is not from immigrants; it is from xenophobic politicians whose policies would severely weaken the economy.

A New Approach to Protecting Gig Workers
Laura Tyson (Project Syndicate) Oct 24, 2019
A recent California law stops platform companies like Uber, Lyft, and DoorDash from misclassifying their more than 400,000 drivers as independent contractors, rather than employees. It is an important first step toward protecting workers in a labor market that is increasing their economic insecurity.

Middle management, geographic frictions, and firm establishments
Anna Gumpert, Henrike Steimer, and Manfred Antoni (VoxEU) Oct 24, 2019
Distance and other geographic frictions between firms’ headquarters and their establishments have a negative effect on performance. This column shows that hiring middle managers helps firms mitigate the impact of geographic frictions, by improving the efficiency of management resources. Factors affecting the efficiency of a local establishment have knock-on effects for the whole firm, regardless of distance.

Beware SOFR
Michael Moran (FP) Oct 24, 2019
The Secured Overnight Financing Rate, set to become the instrument governing the world’s financial system, could also spark the next economic crisis.

Mauricio Macri Was Bound for Disaster
Benjamin N. Gedan (FP) Oct 24, 2019
Argentine President Mauricio Macri’s plan to save his country’s economy was doomed from the start—and that’s likely to cost him his job.

Next ECB head must broaden policy toolkit
FT View Oct 25, 2019
Christine Lagarde must finish the job Mario Draghi started.

Debt-ridden state-owned firms pose rising risk to EM public finances
Steve Johnson (FT) Oct 25, 2019
IMF warns of threat to government balance sheets from deteriorating SOE finances.

Why the Fed hopes to keep its wiggle room on rates
Colby Smith (FT) Oct 25, 2019
The central bank is guiding for a pause after next week’s expected rate cut.

Central banks have no expertise in climate change
John Dizard (FT) Oct 25, 2019
Participation could reduce, rather than increase, public support for progressive policies.

How uncertainty hits business investment
Tim Harford (FT) Oct 25, 2019
One theory is that there is something deeply unsettling about ambiguity.

How upbeat asset markets support themselves
Michael Mackenzie (FT) Oct 25, 2019
Doom-mongers confounded by another year of ballast from central banks.

Lebanon's shuttered banks bracing for dollar run
Alison Tahmizian Meuse (AT) Oct 25, 2019
More than a million protesters are demanding a new government, as confidence in its handling of the economy is beyond repair.

Argentina: A Country Caught in an Endless Loop of Financial Crises
Alasdair Macleod (Mises Wire) Oct 25, 2019
Politicians, who claim that a week in politics is the long term, fail to see any problem.

A Fear of Regime Change is Slowing the Global Economy
Uri Dadush (Bruegel) Oct 25, 2019
Why did such a sharp and steady slowdown occur against a background of loose monetary policy, supportive fiscal policy, low inflation and absence of evident large imbalances? As argued in the IMF’s World Economic Outlook report issued last week, the evidence points to uncertainty over trade tensions as a major contributor.

10 Key Investor Takeaways From the 2019 Annual Meetings of the IMF and World Bank
Yacov Arnopolin, Lupin Rahman, and Vinicius Silva (PIMCO) Oct 25, 2019
Trade, geopolitics, and emerging markets were top of mind at the recent annual meetings.

Iran’s Economic Resiliency Makes Talks More Likely
Esfandyar Batmanghelidj (Bloomberg Opinion) Oct 25, 2019
The Islamic Republic wants to negotiate from a position of strength. A rebound in 2020 might be just the ticket.

No Art to the US-China Trade Deal
Stephen S. Roach (Project Syndicate) Oct 25, 2019
The real problem with the phase one accord announced on October 11 is the basic structure of the deal into which it presumably fits. From trade to currency, the approach is the same – prescribing bilateral remedies for multilateral problems.

Objectives and boundaries of monetary policy
Jagjit Chadha (VoxEU) Oct 25, 2019
The Federal Reserve is reviewing its monetary policy strategy, tools, and communication processes, but there has been surprisingly little formal debate about these key aspects of monetary policymaking in the UK and the euro area. This column argues that the impending appointment of the next Governor of the Bank of England provides an opportunity for an open and deep debate about the fundamental objectives of the central bank and the limits of independence. It also warns that the genuine progress that has been made in the science of monetary policy may be threatened by a new era of economic populism.

Germans have mixed feelings about Christine Lagarde
Economist Oct 26, 2019
Some had hoped Mario Draghi would be replaced by a German.

Responsible capitalism requires new standards
FT View Oct 27, 2019
Broader sense of purpose is welcome but needs to be measured.

Japan risks chilling effect with new FDI law
FT View Oct 28, 2019
The country’s ambitions to improve corporate governance will be undermined.

Johnson’s Brexit deal poses rules-of-origin conundrum
Thomas Sampson (FT) Oct 27, 2019
UK companies will have to start collecting data or stop exporting to Northern Ireland.

Hong Kong is irreplaceable as a financial centre
Jingzhou Tao (FT) Oct 27, 2019
It is politically impossible for any other city to set up an independent judiciary.

Can cooperation prevent the descent of a digital Iron Curtain?
Christopher Findlay (EAF) Oct 27, 2019
5G will drive innovation towards many things not yet imagined, and is likely to be truly transformative. But these benefits are at risk from a digital iron curtain.

Golden Age Is Ending in India
David Fickling (Bloomberg Opinion) Oct 27, 2019
Shifting demographics and rising access to banking have curbed purchases of the yellow metal. That could impact global demand.

India Needs to Face Up to Its Flaws
Mihir Sharma (Bloomberg Opinion) Oct 27, 2019
This isn’t just a cyclical slowdown. It’s the direct result of a failure to shrink the state’s baleful influence on the economy.

Slinging Mud Won't Secure the World's Oil Supply
Julian Lee (Bloomberg Opinion) Oct 27, 2019
Russia should get its house in order before its top oil executive Igor Sechin criticizes weaknesses from Saudi Arabia and the U.S.

Modi must spend his political capital on reform
FT View Oct 28, 2019
The Indian leader’s social agenda is crowding out economic concerns.

Three ways to trade a changing China
Tom Price (FT) Oct 28, 2019
Metals industry should look to the country’s longer-term needs.

Chile’s crisis was decades in the making
Jennifer Pribble (FT) Oct 28, 2019
Pinochet’s reforms created a class of citizens with precarious access to public services.

The IMF’s second chance in Argentina
Kevin Gallagher and Matías Vernengo (FT) Oct 28, 2019
Its 2018 rescue locked in the policies that led to Argentina’s crisis. It is time to change course.

Pension funds need to make the case against negative interest rates
Robin Wigglesworth (FT) Oct 28, 2019
Funds are feeling the pain and should urge governments to do more on fiscal stimulus.

Indian economy: problems pile up for Narendra Modi
Amy Kazmin (FT) Oct 28, 2019
The prime minister has room to stimulate growth but must avoid policy mis-steps of his first term.

The Way We Measure the Economy Obscures What Is Really Going On
Heather Boushey (NYT) Oct 28, 2019
By looking mainly at the big picture, we are missing the reality of inequality — and a chance to level the playing field.

Argentina’s Peronist Repeat
WSJ Oct 28, 2019
The ill-governed nation hands the government back to the left.

Bitcoin and the Denationalization of Money
Ralph Fucetola (Mises Wire) Oct 28, 2019
In his new book The Bitcoin Standard, Saifedean Ammous displays a fine understanding of money, and also a good grasp of how currencies like Bitcoin could revolutionize the government-dominated banking sector.

Why Improving Fiscal Institutions is Critical to the Middle East and Central Asia
IMF Oct 28, 2019
In the decade since the global financial crisis, countries in the Middle East and Central Asia have grappled with rising deficits and debt, with overall fiscal balances for the region turning from a surplus of about 10 percent of GDP in 2008 to consistently negative in recent years. Fiscal challenges have also arisen in the context of underdeveloped and ineffective fiscal institutions. The latest Regional Economic Outlook explores how these institutions relate to fiscal outcomes.

State Sector Support in China Is Accelerating
Nicholas R. Lardy (PIIE) Oct 28, 2019
The expansion of state power over the Chinese economy and political system under President Xi Jinping since he came to power in 2012 can be measured in many ways. One of the most striking is the dramatic shift of bank credit away from the private sector in favor of state-owned firms, at least through 2016 (figure 1). This tilt squeezed out the more productive private sector, contributing to the ongoing slowdown in China’s growth.

A Shift in Approach Could Help Keep Short-Term Markets Liquid
Jerome M. Schneider, Tiffany Wilding, and C. Del Anderson (PIMCO) Oct 28, 2019
We think there are policy tools in the Fed arsenal that wouldn’t materially alter the soundness of the banking system but could allow cash to move more freely.

Expect the Fed to Put Conditions on More Rate Cuts
Timothy A Duy (Bloomberg Opinion) Oct 28, 2019
The latest economic data is too strong to justify a continual easing of monetary policy.

Fed's Conflict Is a Symptom of Problems It Can't Solve Alone
Mohamed Aly El-Erian (Bloomberg Opinion) Oct 28, 2019
It must be pure torture trying to assure markets just enough but not too much.

When You Can’t See China’s Bond Defaults, Get Worried
Shuli Ren (Bloomberg Opinion) Oct 28, 2019
Distressed companies cut quiet deals to avoid the public glare of non-payment. Beijing can’t let them.

Mario Draghi’s Roadmap for Europe’s Future
Ferdinando Giugliano (Bloomberg Opinion) Oct 28, 2019
He leaves the ECB better than he found it, but there’s still more to be done.

The EU Risks Being Crushed Between the U.S. and China
Andreas Kluth (Bloomberg Opinion) Oct 28, 2019
To survive in a bipolar world, Europe must become tougher and more unified. Easier said than done.

Don’t Let the U.S. Economy Hit Stall Speed
William C Dudley (Bloomberg Opinion) Oct 28, 2019
The Fed should take out some insurance against a recession.

A Trillion-Dollar Deficit May Be Just What the Economy Needs
Karl W Smith (Bloomberg Opinion) Oct 28, 2019
Right now it is making the U.S. economic environment safer, not more dangerous.

China Adjusts to the New World Order
Andrew Sheng and Xiao Geng (Project Syndicate) Oct 28, 2019
Recognizing that global engagement is in its interests, China's leaders have been working to counter the backlash against globalization and have reconfirmed their commitment to continued reform and opening up. But China does not need the world nearly as desperately as US President Donald Trump and his advisers seem to believe.

The Allure and Limits of Monetized Fiscal Deficits
Nouriel Roubini (Project Syndicate) Oct 28, 2019
With the global economy experiencing a synchronized slowdown, any number of tail risks could bring on an outright recession. When that happens, policymakers will almost certainly pursue some form of central-bank-financed stimulus, regardless of whether the situation calls for it.

Which Wealth Tax?
Michael Spence (Project Syndicate) Oct 28, 2019
Steadily rising income and wealth inequality, along with declining social mobility, is contributing to political polarization. Fortunately, If there is growing demand for some type of tax-policy response to the problem, we have ways to determine which measures would be most effective, depending on the specific objective.

Why better measurement is needed to deliver financial stability
Anil Kashyap and Benjamin King (VoxEU) Oct 28, 2019
There are still remarkable gaps in the data available on the overall structure of the financial systems of major economies. This column presents rough estimates for the UK and the US that suggest some surprising structural differences between the two systems and which point to areas where better measurement is needed. The authors note that there is a strong case for policymakers to think about the system as an interconnected whole, rather than as a set of distinct sectors to be regulated in isolation.

Trade effects of 3D printing
Caroline Freund, Alen Mulabdic, and Michele Ruta (VoxEU) Oct 28, 2019
The conventional wisdom is that 3D printing will shorten supply chains and reduce world trade. This column examines the trade effects of the shift to 3D printing in the production of hearing aids. It shows that adopting the new technology in production increased trade by roughly 60% as production costs came down. An analysis of 35 other products that are increasingly produced using 3D printing also finds positive effects but suggests that product characteristics such as bulkiness can affect the relationship between 3D printing and trade.

Wall Street Was America’s First Foe in World War II
Matt Stoller (FP) Oct 28, 2019
As the United States prepared to fight in World War II, it needed massive supplies of steel, aluminum, and copper to build up the Army and Navy. First, monopolists’ control of these materials would have to be broken.

The factory workers at the frontline of US-China relations
Patti Waldmeir (FT) Oct 29, 2019
Fuyao’s investment in Dayton is a test case for Donald Trump’s manufacturing proposition.

Mobile money is not helping Zimbabwe’s hyperinflation
Izabella Kaminska (FT) Oct 29, 2019
EcoCash’s agents sucked dollars out of the hands of the population, turning them into digital balances.

A big part of China’s 5G opportunity lies at home
James Kynge (FT) Oct 29, 2019
Providing infrastructure for the rollout could quickly become an investment theme.

Taming Argentina’s economy: the team with daunting task
Benedict Mander (FT) Oct 29, 2019
Advisers take on country teetering on the brink of sovereign debt default.

The Book of Life will be the century’s most valuable enterprise
Juan Carlos Castilla-Rubio (FT) Oct 29, 2019
Scientists are racing to code the genetic sequences of all complex species on the planet.

Ill ease of doing business rising across Asia
Simon Roughneen (AT) Oct 29, 2019
New World Bank survey shows trade tensions and slowing economic growth are grinding business reforms to a halt.

Bolsonaro’s pilgrimage to Beijing
Alicia García-Herrero (Bruegel) Oct 29, 2019
A strategic alliance between Brazil and China could be music to the ears for both leaders, but Bolsonaro does not want to look like one more vassal. Xi Jinping might need to think of a more exclusive offer to the President of the largest economy in Latin America.

If India Stopped Growing, Would the IMF and World Bank Say So?
Justin Sandefur and Julian Duggan (CGD) Oct 29, 2019
Leading economic indicators have slowed or reversed. Criticisms of official statistics are mounting. But the IMF and World Bank continue to forecast 6-percent growth by simple extrapolation.

Too Small to Succeed: Reforming the AfDB’s Financial Governance
Clemence Landers and Nancy Lee (CGD) Oct 29, 2019
The case for a merger.

Indonesia Does Its Best to Scare Off Investment
David Fickling (Bloomberg Opinion) Oct 29, 2019
A ban on exports of nickel ore aims to boost homegrown industry and encourage foreigners to pour money in. It’s been tried before, and failed.

‘BRICS’ Is About Geopolitics, Not Economics
Leonid Bershidsky (Bloomberg Opinion) Oct 29, 2019
S&P says the acronym no longer makes much financial sense. But the idea is more politically relevant than ever.

Nomura Could Use a Fresh Twist on an Old Story
Nisha Gopalan and Andy Mukherjee (VoxEU) Oct 29, 2019
Faced with an aging society, Japan’s biggest investment bank should forge ahead in China and invest in newer technologies.

A Wealth Tax Is Simply Un-American
Karl W Smith (Bloomberg Opinion) Oct 29, 2019
It would make the U.S. less hospitable to the most visionary entrepreneurs.

Tech and Manufacturing Look Ready to Trade Places
Conor Sen (Bloomberg Opinion) Oct 29, 2019
Signs suggest that hot stocks are cooling off while those that lagged are poised for a rebound.

The Oil Age Is Coming to a Close
Noah Smith (Bloomberg Opinion) Oct 29, 2019
Demand for crude is destined to decline, delivering a shock to cities and towns dependent on energy extraction.

Economic Growth as a Tool for Fighting Poverty
Barry L Ritholtz (Bloomberg Opinion) Oct 29, 2019
The Industrial Revolution marked the first phase. The world now is witnessing the second.

The Politics of Frustration in Latin America
Jeremy Adelman and Pablo Pryluka (Project Syndicate) Oct 29, 2019
The rapidly escalating protests across the region reflect people's dashed economic expectations, and thus differ from the demonstrations in Beirut and Hong Kong against undemocratic regimes. The risk, of course, is that Latin American governments resort to Chinese-style tactics and turn economic malaise into a struggle over the future of democracy.

The Caste of Credit in India
Navjot Sangwan (Project Syndicate) Oct 29, 2019
India’s government has shown considerable political will to eliminate caste discrimination over the last several decades. It must now channel that will toward ensuring that the financial-services sector improves Dalits’ access to their services.

Stop Inflating the Inflation Threat
J. Bradford DeLong (Project Syndicate) Oct 29, 2019
Given the scale and severity of inflation in America in the 1970s, it is understandable that US monetary policymakers developed a deep-seated fear of it. But, nearly a half-century later, the conditions that justified such worries no longer apply, and it is past time that we stopped denying what the data are telling us.

The two faces of populism
Barry Eichengreen (VoxEU) Oct 29, 2019
Explanations for variants of populism are typically framed as a contest between culture and economics. This column, part of a Vox debate on the subject, looks at the arguments for both and uses data from the British Election Study surveys to show that populism, and Brexit in particular, is as much about economics as it is about culture and identity. Populism rooted in economics can be addressed with policies that enhance socioeconomic mobility, reduce income disparities, increase economic security, and help left-behind places. It is less clear how to address authoritarian, xenophobic populism rooted in cultural identity concerns.

Many forms of populism
Dani Rodrik (VoxEU) Oct 29, 2019
There are essentially two schools of thought on the roots of populism, one that focuses on culture and another that focuses on economics. This column, part of a VoxEU debate, examines the drivers from each of these perspectives. It also argues that there are times when economic populism may be the only way to forestall its much more dangerous cousin, political populism.

The rise of populism
Guido Tabellini (VoxEU) Oct 29, 2019
Despite an increase in economic inequality and a decline in social mobility, today those who are 'left behind' seem to care more about immigration and civil rights than they do about redistribution, and sometimes support policies that run counter to their economic interests. This column, part of the Vox debate on populism, offers a potential explanation for this: a shift from the traditional class-based distinction and divide between left and right to a distinction based on cultural attitudes and education. This change is having profound effects on the political systems of advanced democracies organised along the traditional left versus right divide.

Why Latin America Was Primed to Explode
Moisés Naím and Brian Winter (FA) Oct 29, 2019
Economic malaise, more than foreign meddling, explains the outpouring of rage.

Don’t bet on the pound either way as a December election looms
Katie Martin (FT) Oct 30, 2019
A no-deal Brexit is still possible and remains the most significant threat to sterling.

How the euro helped Germany avoid becoming Japan
Martin Wolf (FT) Oct 30, 2019
Berlin should be thankful for what the single currency, and Mario Draghi, have given it.

Safety nets pose puzzle to investors
Robin Wigglesworth (FT) Oct 30, 2019
Investors have been left with an unpalatable choice for haven assets.

Default risk rises rapidly in frontier markets
Steve Johnson (FT) Oct 30, 2019
Almost half of countries already distressed or at high risk of distress, IMF says.

Kuwait’s wealth fund puts weight on green investing
Henny Sender (FT) Oct 30, 2019
Investors are paying greater heed to climate risks and future infrastructure needs.

Venezuela’s debt resolution: recover the assets
Thomas W. Laryea (FT) Oct 30, 2019
A proposal for the stricken South American country.

What a Mexican soap star taught me about globalisation
Gillian Tett (FT) Oct 30, 2019
A chance meeting was a welcome reminder not to take for granted the wonders of our connected world.

America’s economy is resisting the pull of recession
Economist Oct 30, 2019
A healthy jobs market keeps Americans spending, helping to make up for a shortfall in business investment.

US trade war wreaks havoc on China’s economy
Gordon Watts (AT) Oct 30, 2019
Data released in October illustrated the impact of the damage inflicted on the world’s second-largest economy.

The Global Informal Economy: Large but On The Decline
Thomas F. Alexander (IMF) Oct 30, 2019
The size of the informal economy—measured as a share of GDP—has fallen gradually across all regions.

How to Resolve Europe’s Banking Dilemma
Alexander Privitera (Brink) Oct 30, 2019
Banks and regulators have wasted time blaming each other for the ills of the financial sector. Banks say that monetary policies are killing off profits, and regulators are doing too little to overcome the fragmentation caused by the aftermath of the financial crisis. Four insights to serve as a foundation for banks and regulators to work together.

Argentina Doesn’t Need More False Promises
Bloomberg Opinion Oct 30, 2019
New president Alberto Fernandez should put pragmatism ahead of polarized politics.

A Struggling India Needs More Trade, Not Less
Bloomberg Opinion Oct 30, 2019
Joining the world’s biggest free-trade pact would be a step in the right direction.

China Is Determined to Reshape the Globe
Henry Brands (Bloomberg Opinion) Oct 30, 2019
Eurasia is a single continent. The Belt and Road initiative seeks to recreate it in China's image.

India Hangs Up on the Future
Mihir Sharma (Bloomberg Opinion) Oct 30, 2019
A connectivity revolution has powered the country’s growth this century. So why is the government pushing telecom companies toward collapse?

Emmanuel Macron’s Startup Nation Has an Old-School Dilemma
Lionel Laurent (Bloomberg Opinion) Oct 30, 2019
How do you create a bottom-up economy in the land of top-down capitalism?

The Fed Needs to Do More Than Just Head Off a Recession
Karl W Smith (Bloomberg Opinion) Oct 30, 2019
It’s part of the bank’s mandate to ensure that as many Americans as possible have jobs.

Chile Is a Victim of Its Own Success
Noah Smith (Bloomberg Opinion) Oct 30, 2019
The country has prospered, but that’s not always what matters.

Could Dollarization Be Argentina’s Salvation?
Mac Margolis (Bloomberg Opinion) Oct 30, 2019
After eight defaults, it needs a currency that it can’t print, game or otherwise defile.

What Happens to the United Kingdom Now?
Chris Patten (Project Syndicate) Oct 30, 2019
Even after the United Kingdom leaves the European Union, the country will face years of talks in which it will be negotiating from a position of weakness. The UK will be less prosperous and influential than before, and will be under increasing internal strain because of policies driven by malignant English nationalism.

The Right Way to Finance Disaster Recovery
Koichi Hamada (Project Syndicate) Oct 30, 2019
After the 2011 East Japan Great Earthquake and tsunami devastated much of Japan, some economists proposed that the government should finance the recovery by raising taxes, rather than issuing debt. This approach is the equivalent of imposing fiscal austerity during a recession.

What Brexit Reveals About the EU
Bill Emmott (Project Syndicate) Oct 30, 2019
After almost four years of divisive Brexit politics, it is easy to forget that most UK voters had previously given little thought to the European Union. And according to recent polling, the same is true of voters across the rest of the EU, suggesting that the bloc's biggest problem is not Euroskepticism but indifference.

A “True” Industrial Policy for All
Reda Cherif and Fuad Hasanov (Project Syndicate) Oct 30, 2019
Whether one looks to the United States or the "miracle" economies of China and East Asia, state-led industrial strategies have played a key role in economic growth and development. And after decades of industrial policy being consigned to the fringes of economic-policy debate, it is now back on the agenda – as well it should be.

How Do Earthquakes Shape Economic Behavior?
Kevin Chen, Mateusz Filipski and Xiaobo Zhang (VoxChina) Oct 30, 2019
Research shows how a disaster can impact an economy beyond the simple rebuilding process. The Sichuan earthquake induced a lifestyle shift in households toward greater spending and a structural shift of the economy away from industrial production.

Exorcising phantom FDI
Bruno Casella (VoxEU) Oct 30, 2019
A large and growing proportion of global investment flows is channelled through conduit jurisdictions and offshore financial centres, making it difficult to track the real origin and ownership of FDI. This column illustrates an innovative approach to estimating FDI positions by ultimate investors and discuss some implications in key policy areas such as trade and investment, development, and international taxation.

FOMC Delivers Third Rate Cut in as Many Meetings
Jay H. Bryson (WP) Oct 30, 2019
The FOMC cut rates 25 bps at its policy meeting today. We think that the committee will opt to keep rates on hold in December, but we look for one more 25 bps rate cut early next year.

Central bankers need political savvy more than ever
Michael Strobaek (FT) Oct 31, 2019
Controversy is unavoidable when banks make dramatic but necessary interventions.

It is time to treat the EU budget as statecraft
Martin Sandbu (FT) Oct 31, 2019
Ambitious spending would make sense both in substance and politically.

High debt, high deficit: Lebanon’s economic woes fuelling protests
Heba Saleh (FT) Oct 31, 2019
Lack of reforms pose challenge for political elite as protesters force Hariri to resign.

The powerful forces reshaping America’s capital markets
Richard Henderson in and Miles Kruppa (FT) Oct 31, 2019
WeWork’s abandoned IPO reflects the fall in new listings and the growing role of private equity.

Tax Cuts for the Wealthy Make Inequality Worse
Alan S. Blinder (WSJ) Oct 31, 2019
As the rich have gotten richer, U.S. tax policy became more regressive.

The message from the world’s biggest and wildest IPO
Economist Oct 31, 2019
The oil industry may decline, but it won’t go quietly.

Germans still don’t agree on what reunification meant
Economist Oct 31, 2019
Discontent may even be growing.

The Fed Cuts and Pauses
Joseph E. Gagnon (PIIE) Oct 30, 2019
The Federal Open Market Committee (FOMC or Fed) cut the target range for the federal funds rate 0.25 percentage point to 1.50 to 1.75 percent at its October 2019 meeting, as many analysts anticipated. Fed Chair Jerome Powell made clear in the subsequent press conference that future rate cuts are not likely unless the economy performs worse than the Fed expects. President Donald Trump has been pressing the Fed to cut rates dramatically and may be unhappy with the Fed's reluctance to do more. But in light of continuing solid economic data, it is reasonable for the Fed to pause for now. Stock prices and bond yields did not move much after the Fed's announcement.

Chilean Protesters Claim Inequality Made Them Do It
Iván Carrino (Mises Wire) Oct 31, 2019
It's hard to see how burning subway cars and torching businesses will reduce inequality in Chile. But the protestors there claim their violence is justified by the fact some people are richer than others.

Emerging Markets Asset Allocation: Opportunities in a Time of Transition
Vinicius Silva, Pramol Dhawan, Yacov Arnopolin, Kofi Bentsi, and Gene Frieda (PIMCO) Oct 31, 2019
Emerging markets assets are caught between the global forces of easier financial conditions and weakening growth, but they are more resilient to external crosscurrents than before. We continue to favor allocations away from more growth-sensitive assets. EM local duration and external bonds are the top picks in our EM multi-asset portfolios. EM currencies are the asset class to watch going into 2020 given the influence of U.S. dollar direction on EM returns, what we believe to be cheap valuations, and the bullish reflationary implications of a dollar depreciation cycle.

Lagarde’s Task Is to Lead a Cultural Revolution
Bloomberg Opinion Oct 31, 2019
The new head of Europe’s central bank needs to persuade her colleagues, and Europe’s governments, to start pulling together.

Tales of the Economy
Barry Eichengreen ( Oct 31, 2019
While economic textbooks have long relied on a utility-maximization model of economic decision-making, Robert J. Shiller and other behavioral economists continue to demonstrate that human behavior is not so simple. The stories we use to frame our thinking and guide our actions might not always make sense, but they play a crucial role nonetheless.

The Great Wealth Tax Debate
Jean Pisani-Ferry (Project Syndicate) Oct 31, 2019
Inequality is back at the forefront of economic policy debates, for good reason. A wealth tax is no panacea, and not even an ideal response to growing inequality at the top. But absent a better alternative, it can serve as a reasonable second-best policy.

The Arab Winter of Discontent
Ishac Diwan (Project Syndicate) Oct 31, 2019
Following mass uprisings in Algeria and Sudan this summer, protesters have now taken to the streets in Lebanon and Iraq to demand better economic conditions and an end to mis-governance. Though the situation today has obvious parallels to the 2011 Arab Spring, there are also crucial differences.

The Monetarist Era is Over
Anatole Kaletsky (Project Syndicate) Oct 31, 2019
Central bankers have been the first to recognize that the effectiveness of monetary policy in managing demand and stabilizing economic cycles has reached its limits. The problem is that many politicians and academic economists remain in denial.

Mobile internet, government confidence, and populism
Sergei Guriev, Nikita Melnikov, and Ekaterina Zhuravskaya (VoxEU) Oct 31, 2019
Information and communication technology has no doubt had a positive economic impact globally, but its political bearing is less clear. This column shows that the proliferation of mobile technology reduces citizens’ confidence in their current governments, especially in places where news broadcasting is censored but the internet is not. Furthermore, by reducing the cost of reaching voters, the internet has also led to increased support for both left-wing and right-wing populist movements.

Asymmetric speed bumps: A response to high-frequency trading
Markus Baldauf and Joshua Mollner (VoxEU) Oct 31, 2019
Financial markets process orders faster than ever before. Although faster speeds are associated with smaller spreads, they may also lead to less informative prices. This column captures this trade-off within a theoretical model of high-frequency trading in modern financial markets. It then uses the model to evaluate some potential market design responses to high-frequency trading that are currently in debate. In particular, it shows that asymmetric speed bumps improve markets by eliminating an inefficient form of high-frequency trading.

Germany Chooses Economic Nostalgia Over Saving the Planet
Adam Tooze (FP) Oct 31, 2019
Germany’s central bank prefers conservative policymaking to conservation-focused economics.