News & Commentary:

Articles/Commentary

The ECB begins its shift to a new inflation goal
FT View Oct 1, 2020
Framework must better reflect the changed economic landscape.

A nasty tax surprise for Russia?s mining tycoons
Henry Foy (FT) Oct 1, 2020
Outraged oligarchs get sharp rebuke as Kremlin looks to plug $50bn deficit caused by the pandemic.

Renminbi strength foretells dollar?s decline
Mansoor Mohi-uddin (FT) Oct 1, 2020
Sharp rebound in China?s currency a clear warning the greenback is likely to weaken.

China?s net-zero target is a giant step in fight against climate change
Adair Turner (FT) Oct 1, 2020
All countries can now build systems at costs no higher than for fossil fuels.

Central bankers have been relegated to second division
Chris Giles (FT) Oct 1, 2020
Health officials and finance ministers are far more important for the economy.

US curbs on high-tech exports could worsen China's struggling phase one purchases
Chad P. Bown (PIIE) Oct 1, 2020
Through the first eight months of 2020, semiconductors and the equipment required to produce them constituted nearly 25 percent of China?s total imports of goods covered by the phase one agreement with the United States. In fact the two sectors were on pace to meet Trump?s phase one purchase targets. New US export restrictions, however, have suddenly dimmed that bright spot.

Reform of the International Debt Architecture is Urgently Needed
Kristalina Georgieva, Ceyla Pazarbasioglu, and Rhoda Weeks-Brown (IMF) Oct 1, 2020
The world is at a critical juncture and should not sit idle waiting for a crisis.

Assessing China?s ?Structural? Monetary Policy
Carol Liao and Stephen Chang (PIMCO) Oct 1, 2020
Policy will continue to be carefully calibrated as China walks a tightrope between supporting growth and maintaining financial stability.

Europe Can Have Stimulus or Rule of Law, Not Both
Andreas Kluth (Bloomberg View) Oct 1, 2020
For the sake of its pandemic fund, the EU will probably opt for placating Hungary and Poland. But a slide in democratic norms could be its undoing.

Central Bankers Inflate the Numbers on QE
Ferdinando Giugliano (Bloomberg View) Oct 1, 2020
Large-scale asset purchases have boosted growth, but maybe not as much as many monetary authorities claim.

U.S. Should Cut the Swiss Some Slack on Currency Manipulation
Marcus Ashworth (Bloomberg View) Oct 1, 2020
What can the country do but try to keep a lid on the franc? The alternatives are unthinkable.

We're a Long, Long Way From Running Out of Gold
David Fickling (Bloomberg View) Oct 1, 2020
There?s still good reason to invest in it, though.

Does Jobs Report Even Matter Anymore?
Timothy A Duy (Bloomberg View) Oct 1, 2020
The central bank?s new focus on inflation means the once-vaunted monthly employment data is almost worth ignoring.

America?s Economy Has Broken the Curse of the ?70s
Conor Sen (Bloomberg View) Oct 1, 2020
Cheaper energy is a boon to workers and the Fed.

Time to Get Japan Out of Its 'Straitjacket'
Daniel Moss (Bloomberg View) Oct 1, 2020
The central bank has been a pioneer of experimental monetary policy. But just when rubber needs to hit the road, officials seem out of ideas.

The Limits of American Recovery
J. Bradford DeLong (Project Syndicate) Oct 1, 2020
While most of the Global North has reached a state of cautious optimism after confronting COVID-19 head on, the United States continues to stand out for its persistently high rates of death and infection. This public-health failure, and the political dysfunction underpinning it, will remain a drag on economic performance.

Capitalists and Socialists of the World, Unite!
Harold James (Project Syndicate) Oct 1, 2020
Although it can be politically expedient to draw a thick line between capitalist decentralization and socialist central planning, the truth is that these two systems have converged on many occasions. Moreover, each was conceived for the same purpose, and elements of both could be realized in today's digital economy.

Shareholder Value in a Burning World
Rebecca Henderson (Project Syndicate) Oct 1, 2020
The best way to address climate change is not through wishful thinking but by using the tools we have ? and that includes the established corporate model of maximizing shareholder value. Already, many companies are showing the way, having recognized that going green can generate immediate profits.

The Perils of Big COVID Government in Asia
Lee Jong-Wha (Project Syndicate) Oct 1, 2020
During a large and complex crisis like the COVID-19 pandemic, government?s role naturally grows ? and so do the risks of unproductive spending and abuses of power. That is why, as Asian economies seek to contain COVID-19 and its economic impacts, they must also contain their own governments.

The Need for a Great Transformation
Ann Pettifor (Project Syndicate) Oct 1, 2020
Though investments in renewable energy and green infrastructure are necessary for building a sustainable world, they are not sufficient. Barring an overhaul of the global financial and monetary system, humanity will keep stumbling from one massive, destabilizing crisis to the next.

Currency hedging, exchange rate movement, and dollar swap line usage during Covid-19
Gordon Liao and Tony Zhang (VoxEU) Oct 1, 2020
Institutional investors and borrowers often hedge a sizeable portion of their currency mismatches. This column examines the role that this currency hedging of foreign assets and liabilities plays in determining exchange rates. It shows that countries? hedging demands from their external imbalances can explain forward and spot exchange rate dynamics during the COVID-induced financial turmoil in March 2020, as well as their usage of the Federal Reserve central bank liquidity swap lines.

The Eurosystem: An accident waiting to happen
Willem Buiter (VoxEU) Oct 1, 2020
National central banks within the Eurosystem with substantial holdings of own risky sovereign debt are at material risk of default if their sovereign defaults, since the likelihood of recapitalisation of an insolvent national central bank by its defaulted sovereign is low. Risk exposures of a national central bank that are out of line with the risk exposures of the consolidated Eurosystem are therefore an existential threat to the monetary union. This column discusses the key flaws in the design of the Eurosystem responsible for this threat and explores three approaches to reducing the insolvency risk of national central banks.

How ?Free Zones? Became the Middle Eastern Diplomacy Tool of Choice
Robert Mogielnicki (FP) Oct 1, 2020
The special economic zones are meant to quietly bring countries together before more public realignments. But do they?

EU must seize the moment to defend rule of law
Ben Hall (FT) Oct 2, 2020
Pressure is great to water down linking recovery funds to respect for institutions to avoid Hungarian and Polish vetoes.

Winners and losers in a half-open world
Janan Ganesh (FT) Oct 2, 2020
Parents and non-parents are living ever more distinct lives.

Investors grapple with bizarre US election cycle
Gillian Tett (FT) Oct 2, 2020
There is rising interest in using political prediction and betting markets to track political risk.

Why the need for green hydrogen points to higher carbon prices
Mark Lewis (FT) Oct 2, 2020
Market players are looking beyond coal-to-gas switching as a basis for carbon pricing.

New Stat Augurs Well for Covid Recovery
Mark Skousen (WSJ) Oct 2, 2020
Gross output measures business confidence better than GDP. It?s fallen less than in past recessions.

China opening the door to foreign bond buyers
William Pesek (AT) Oct 2, 2020
It?s usually with the benefit of hindsight that economists determine when major inflection points occurred. Sometimes, though, they?re glaringly obvious while unfolding. The inclusion of Chinese bonds in FTSE Russell?s benchmark index is such a moment.

China Is Winning the Virus-Economy Recovery Race
Matthew A Winkler (Bloomberg View) Oct 2, 2020
The economic benefits of containing Covid-19 are uneven across the globe, but one success story stands out.

India Heads Down Right Path at Wrong Speed
Mihir Sharma (Bloomberg View) Oct 2, 2020
The only way to make big structural reforms work is to slow down and get buy-in from the states first.

Inflation Targeting Is a Very Stupid Policy
Richard Cookson (Bloomberg View) Oct 2, 2020
In trying to increase by a fairly random amount an index of prices that they largely can?t control, central banks couldn?t have done much more harm.

Eastern Germany?s New Growth Engine
Dalia Marin (Project Syndicate) Oct 2, 2020
Eastern Germany has suffered from three decades of deindustrialization since the collapse of communism, largely because of poor policy decisions. But by becoming an electric-vehicle powerhouse, the region can help to drive Europe's green transition and secure its own future prosperity.

The Danger of Following the Fed
Otmar Issing (Project Syndicate) Oct 2, 2020
The US Federal Reserve's long-awaited new monetary-policy strategy should probably not serve as a global benchmark. Other central banks should think long and hard before they consider emulating the Fed, for four technical and political reasons.

Critical Minerals and the New Geopolitics
Sophia Kalantzakos (Project Syndicate) Oct 2, 2020
The tension between the geographic concentration of vital metallic elements and the increasing scramble to secure them will further unsettle geopolitics in the twenty-first century. Rich-country governments must now follow China's lead and build new avenues of trust and cooperation with developing countries.

Covid-19 and world merchandise trade
Gerdien Meijerink, Bram Hendriks, and Peter A.G. van Bergeijk (VoxEU) Oct 2, 2020
The outbreak of the Covid-19 pandemic led to a 14% dive in world trade by April 2020. Using the CPB?s World Trade Monitor and a Bayesian VAR model, this column compares the recent contraction, and partial recovery, to the 2008/2009 Global Crisis and the Great Depression. The current trade recession appears to have a sharper ?V-shape?, with a stronger collapse but a quicker recovery than the previous crises.

Negative interest rates: The Danish experience
Signe Krogstrup, Andreas Kuchler, and Morten Spange (VoxEU) Oct 2, 2020
Negative policy rates are controversial and raise questions about their transmission to the economy and financial markets. This column presents emerging evidence from Denmark, where the central bank's objective of maintaining a fixed exchange rate against the euro means that the key policy rate has been negative almost continuously since 2012. Recent and ongoing analyses suggest that the transmission is working well under negative rates, although pass-through to bank lending rates appears to be slower compared with periods of positive policy rates.

Beijing Is Winning the Clean Energy Race
Sarah Ladislaw and Nikos Tsafos (FP) Oct 2, 2020
The technology to build new green economies is mostly produced in China. That?s bad for the United States.

No, Biden Will Not End Trade Wars
Edward Alden (FP) Oct 2, 2020
Biden has matched Trump?s rhetoric on trade soundbite for soundbite, and his economic plans are likely to make trade conflicts worse.

Capitalism After the Pandemic
Mariana Mazzucato (FA) Oct 2, 2020
Getting the recovery right.

Oil market has not priced in prospect of a Biden victory
Derek Brower (FT) Oct 3, 2020
Democratic party win in November could see US officially join global energy transition.

Thirty years after reunification, Germany is shouldering more responsibility
Economist Oct 3, 2020
But it has a lot more to do.

Would a Universal Basic Income Make Us Lazy or Creative?
Andreas Kluth (Bloomberg View) Oct 3, 2020
Some say it would turn us into indolent parasites; others, that we would become more healthy and productive. A German study hopes to provide answers.

Pandemics and inequality
Sergio Galletta and Tommaso Giommoni (VoxEU) Oct 3, 2020
The COVID-19 outbreak is expected to increase income inequality around the world as the poorer are likely to be hit harder by the pandemic?s negative economic impact. Focusing on Italy, this column argues that such distributional consequences also appeared during the 1918 influenza pandemic. Income inequality became higher in areas more afflicted by the flu pandemic, and this is mostly explained by a reduction in the share of income held by poorer people.

The COVID-19 policy response and bank lending The COVID-19 policy response and bank lending
Carlo Altavilla, Francesca Barbiero, Miguel Boucinha, and Lorenzo Burlon (VoxEU) Oct 3, 2020
The spread of the COVID-19 virus and the associated economic downturn has prompted vast policy responses by governments. This column assesses the effectiveness of policies targeted at supporting bank lending conditions in the euro area. It finds that banks were largely able to accommodate the unprecedented credit demand due to the funding cost and capital relief of the pandemic response measures. The close coordination between monetary policy and prudential measures has contributed by generating a sizable amplification effect on lending. Consequently, an even larger decline in firms? employment was averted.

Global goods sector drives economic recovery
Gavyn Davies (FT) Oct 4, 2020
Markets are reflecting sectoral shifts in the world economy as services lag behind manufacturing.

China?s geopolitics are pumped up by its economic success
Graham Allison (FT) Oct 4, 2020
Beijing's increased assertiveness abroad is only to be expected, and more is coming.

ASEAN members can still have their cake and eat it too
David Camroux (EAF) Oct 4, 2020
ASEAN enjoys some advantages in meeting the present geopolitical challenge that it faces. In particular, it serves as enhancer, legitimiser, socialiser, buffer, hedger and lever of its member states' role in regional and international affairs.

Trump Illness'Exposes Underlying Market Tension
Mohamed Aly El-Erian (Bloomberg View) Oct 4, 2020
The economic data were already spreading uncertainty. Then came Friday.

ESG brings distinct value to developing nations
Tidjane Thiam (FT) Oct 5, 2020
Many countries lack the clout to ensure that companies operating on their territory act responsibly.

The end of the dollar's exorbitant privilege
Stephen Roach (FT) Oct 5, 2020
A crash is likely given the collapse in US domestic saving and a gaping current account deficit.

Why the world's richest countries are not all rich
Angus Deaton (FT) Oct 5, 2020
The latest international price comparison shows widening gap between material wellbeing and GDP.

Today's free trader is yesterday's IP thief
Scott Foster (AT) Oct 5, 2020
In the first presidential debate, Joe Biden said Donald Trump talks about the Art of the Deal. China perfected the Art of the Steal. We have a higher [trade] deficit with China than we did before.

Debt Relief for Poor Countries: Three Ideas Whose Time Has Come
Nancy Lee (CGD) Oct 5, 2020
Reform of the International Debt Architecture is Urgently Needed. Many of us strongly agree. The blog and the longer paper released at the same time review the many dimensions of the problems. But it seems to me there are three critical and urgent issues that should rise to the top of the agenda for the upcoming meetings of the G20 and the IMF and World Bank: (1) making temporary debt service standstills work for poor countries with demonstrable need; (2) shifting into high gear for IMF finance, especially for poor countries; and (3) making IMF finance contingent on private creditor participation in debt restructurings. IMF shareholders should seize the moment to give the Fund a mandate to develop feasible but fit-for-purpose proposals in these areas.

Public Investment for the Recovery
Vitor Gaspar, Paolo Mauro, Catherine Pattillo, and Raphael Espinoza (IMF) Oct 5, 2020
In this edition of our Fiscal Monitor, we discuss why more public investment is needed, what the potential impact of public investment may be on growth and jobs, and how governments can make sure investment supports the recovery.

It's Getting Better and Worse at the Same Time
Tyler Cowen (Bloomberg View) Oct 5, 2020
Great scientific and technological progress is often accompanied by social upheaval.

K-Shaped Recoveries End Well for Everybody
Michael R Strain (Bloomberg View) Oct 5, 2020
It's normal for rebounds to help the affluent first. But rest assured: Lower-wage workers catch up.

ESG Investing Looks Like Just Another Stock Bubble
Jared Dillian (Bloomberg View) Oct 5, 2020
Do-the-right-thing investments have been outperforming, but that has been driven by liquidity and flows rather than an effective strategy.

Banks' Financial Strength Isn't What It Seems
Elisa Martinuzzi (Bloomberg View) Oct 5, 2020
British and Swedish regulators have expressed concern about whether some banks are accounting properly for risk. They are right to worry.

The Race to Replace the City of London Begins
Lionel Laurent (Bloomberg View) Oct 5, 2020
If the EU builds it, will they come?

Forging a Stronger Post-Pandemic ASEAN+3 Economy
Aso Taro and Le Minh Hung (Project Syndicate) Oct 5, 2020
The unprecedented challenge that COVID-19 poses to the ASEAN+3 countries further underscores the importance of regional financial cooperation. To that end, recent enhancements to the region's currency-swap arrangement will help to mitigate Asian economies' vulnerability to economic and financial shocks.

The Promise of Decarbonization
Christiana Figueres (Project Syndicate) Oct 5, 2020
The world before the COVID-19 pandemic was deeply dysfunctional, unstable, unfair, and ultimately unsustainable. Now that we have been shaken from our complacency, we can recognize more clearly that what's good for our future on a warming planet is also good for social and economic justice.

The Stock-Market Disconnect
Kenneth Rogoff (Project Syndicate) Oct 5, 2020
The best explanation for why stock markets remain so bullish despite a massive recession is that major publicly traded companies have not borne the brunt of the pandemic's economic fallout. But having been spared by the virus, they could soon find themselves squarely in the sights of a populist backlash.

CBDC remuneration in a world with low or negative nominal interest rates
Ulrich Bindseil and Fabio Panetta (VoxEU) Oct 5, 2020
The prospect of central bank digital currency has raised concerns over its potential to cause structural (i.e. permanent) or cyclical (i.e. crisis-related, temporary) bank disintermediation. Moreover, negative interest rate policy is incompatible with the unconstrained supply of zero-remunerated central bank digital currency. This column argues that a two-tier remuneration system for the currency would be an efficient solution to these issues. It would allow households to access the digital currency as a means of payment with non-negative remuneration and would also make it possible to overcome the perceived dichotomy between retail and wholesale central bank digital currencies.

Explaining the Wall/Main Street disconnect
Ricardo Caballero and Alp Simsek (VoxEU) Oct 5, 2020
While the Fed's massive policy response to the Covid-19 shock was successful in reversing the financial meltdown, it did not prevent a dramatic collapse in the real economy. This column argues that the patterns observed are consistent with optimal monetary policy once the subtleties of the relationship between monetary policy, the stock market, and the economy are considered.

Fifty shades of QE: Central bankers versus academics
Elisabeth Kempf and Lubos Pastor (VoxEU) Oct 5, 2020
The effectiveness of central banks' asset purchase programmes ("quantitative easing") has been a subject of intense debate in both academic and policy circles. Much of the analysis is conducted by the staff of central banks themselves, which is not unlike pharmaceutical firms evaluating their own drugs. Indeed, as this column shows, papers by central bank researchers in the US, the UK, and the euro area report systematically larger effects of unconventional monetary policy on output and inflation than papers by independent academics. This is not to argue that central bank research should be discounted or to question its credibility - but it does highlight a previously unexplored conflict of interest.

Risk of Business Insolvency during Coronavirus Crisis
Sophia M. Friesenhahn and Simon H. Kwan (FRBSF Econ Letter) Oct 5, 2020
Many businesses had amassed high levels of debt, or leverage, before the COVID-19 pandemic. Out of precaution or necessity, firms increased their borrowing further after the onset. Although the shock to those firms' value significantly increased their risk, measured by their distance-to-default, the default risk remains relatively small for most corporate debt. Nevertheless, the amount of outstanding liabilities among firms with elevated risk of insolvency is more than two times higher than at the peak of the global financial crisis.

Everything You Think About the Geopolitics of Climate Change Is Wrong
Jason Bordoff (FP) Oct 5, 2020
The transition to a zero-carbon world will shift power in very unexpected ways.

European Consumers Looking for Larger Wallets to Open
Nick Bennenbroek and Michael Pugliese (WF Econ Group) Oct 5, 2020
Recently released figures for Q2 offer further insight into the state of the European consumer. While European governments have offered substantial fiscal stimulus this year, it has not been enough to offset private market income, meaning that both the Eurozone and the United Kingdom reported large declines in Q2 household disposable income.

Time is right for a new international debt architecture
FT View Oct 6, 2020
Action is needed to prevent a more serious crisis in emerging economies.

Eurozone's uneven recovery needs attention
FT View Oct 6, 2020
Policymakers must counter the threat of divergence.

Hedge funds seek out emerging markets as Covid-19 continues to wreak havoc
Laurence Fletcher (FT) Oct 6, 2020
Trading opportunities seen in debt restructurings and low valuations.

The great uncoupling: one supply chain for China, one for everywhere else
Kathrin Hille (FT) Oct 6, 2020
US pressure and the pandemic are forcing many companies to rethink their Chinese manufacturing operations.

Trump's Economic Dream Come True
John F. Cogan and John B. Taylor (WSJ) Oct 6, 2020
The coronavirus-induced recession is no reason to abandon economic policies that proved their worth.

The Best Stimulus: 0% Income Tax
Stephen Moore (WSJ) Oct 6, 2020
Instead of collecting and spending $2 trillion, why not cut out the middleman?

Is COVID-19 Accelerating a Shift of Service Jobs to the Developing World?
Richard Baldwin (BRINK) Oct 6, 2020
As well as boosting working from home, COVID-19 is likely to increase remote working across borders. Technologies like Zoom and Slack make it easier for companies in the developed world to export service sector jobs to the developing world, where labor is cheaper. How telemigration will become a major economic trend.

From the Washington to the Latin American Consensus
Jose Antonio Ocampo (Brookings) Oct 6, 2020
The COVID-19 crisis has dramatically affected Latin America. The region has become over the past few months the epicenter of the pandemic, and it will experience a contraction in economic activity of 9.1 percent according to the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) or 9.4 percent according to the International Monetary Fund.

Bricks and mortar in the BRICs
Simeon Djankov (PIIE) Oct 6, 2020
The major industrial democracies in the Group of Seven (G7) bloc have had the fiscal and monetary resources to undertake major COVID-19 economic rescue programs.[1] For six months they have helped businesses stay open while providing income assistance to families in need. By contrast, most developing countries are burdened by deficits and cannot borrow readily to finance such programs. Often, they also lack delivery capacity. Instead, many are following the pattern of Brazil, China, India, and Russia (BRICs) and spending on bricks and mortar rather than business and income support.

The Race to Save the World Trade Organization
Robert Wolfe (BRINK) Oct 6, 2020
The World Trade Organization is at a critical moment in its history. Trade nationalism is becoming more widespread, the U.S./China dispute shows no sign of abating and the WTO is searching for a new leader to take it forward and ensure its relevance.

The Long Ascent: Overcoming the Crisis and Building a More Resilient Economy
Kristalina Georgieva (IMF) Oct 6, 2020
As one climber put it: "Every mountain top is within reach if you just keep climbing." The same goes for the Long Ascent and the polices needed to move forward. Joined by a single rope, we can overcome the crisis and achieve a more prosperous and more resilient world for all.

The Fed Is Right and Trump Is Wrong: Stimulus Can't Wait
Bloomberg View Oct 6, 2020
Fiscal support that's too little or too late is a serious danger to the economy.

IPhone Delay Interrupts That Supply Chain Rhythm
Tim Culpan (Bloomberg View) Oct 6, 2020
It used to run like clockwork. Now the cycle of reveal, sales, data and reaction is out of sync.

Russia's Second Wave Raises Risk of Economic Scars
Clara Ferreira Marques (Bloomberg View) Oct 6, 2020
Russia is grappling with a fresh wave of coronavirus infections. It's time for a better economic cure.

Trump's Tariffs Failed to Fix the Trade Deficit
Noah Smith (Bloomberg View) Oct 6, 2020
We'll need a smarter approach, especially when it comes to China.

What Should Corporations Do?
Raghuram G. Rajan (Project Syndicate) Oct 6, 2020
For all the excitement about corporate "stakeholders" and "purpose-driven" firms, the new mode of capitalism is simply a repackaging of the old. Successful companies will continue to focus on the value of their shares over the long term, while avoiding the risks of wading into areas where they don't belong.

The Pandemic's Complex Cocktail
Mohamed A. El-Erian (Project Syndicate) Oct 6, 2020
Over the past few years, investors have tended to be richly rewarded for setting aside traditional determinants of market value and focusing on just one thing: plentiful and predictable liquidity injections into the marketplace. But this dynamic cannot last forever, and it may confront a moment of truth in the fourth quarter of 2020.

Leveraging Africa's Informal Economy for Young People
Alice Saisha (Project Syndicate) Oct 6, 2020
To create quality job opportunities for Africa's growing youth population, the continent's governments should both nurture the informal sector and encourage informal businesses to formalize their operations. To this end, they could employ many of the same tactics that have proved effective in encouraging the development of small and medium-size firms.

Tackling inflation if it reappearsTackling inflation if it reappears
Luis Garicano, Jesus Saa-Requejo, and Tano Santos (VoxEU) Oct 6, 2020
One lasting effect of the Global Crisis and the Covid-19 crisis will be a large increase in general government debt worldwide. This may lead to a scenario of fiscal dominance, in which expansionary fiscal policies are combined with accommodating monetary policies to alleviate the debt burden. This column argues that such a situation would put central banks in a precarious position of having to contain inflationary pressures and maintain financial stability. Expanding the independence of central banks and reaffirming the commitment to fighting inflation may be necessary in case of an unexpected inflation shock.

Continued growth in Asia, but the slowdown in top 1% growth after the financial crisis
Branko Milanovic (VoxEU) Oct 6, 2020
Recent analyses of developments in global inequality have largely been based on relatively old data. By widening the country coverage and using household-based data from each country, this column surveys developments in the global income distribution since the 2008 Global Crisis and brings the analysis up to 2013-14. Broadly speaking, the post-2008 period was good for the globally poor and for the global middle class; it was not good for the Western middle classes and the global top 1%. If developments from the past three decades continue for another 20 years, the gap between the West and Asia will shrink further and will eventually entirely disappear.

Measuring the economic value of data
David Nguyen and Marta Paczos (VoxEU) Oct 6, 2020
As the amount and variety of data collected by companies has increased in recent decades, data have become an essential resource. This column sets out a framework for understanding how businesses monetise data distinguishing between data-enabled businesses that would not exist without access to large amounts of data and analytics, and data-enhancedbusinesses that exploit data to better coordinate pre-existing business operations. Allowing the increasing use of data to act as an unmeasured input in production handicaps key economic statistics ? from output to productivity and beyond.

Why investors are not likely to cry out "yikes" over UK debt
Tommy Stubbington (FT) Oct 7, 2020
Low rates contradict warning by Chancellor Rishi Sunak on borrowings.

Relief for Spanish business as emergency Covid support is extended
Daniel Dombey (FT) Oct 7, 2020
Job scheme will help but questions remain over how long zombie companies should be propped up.

Venezuela, Once an Oil Giant, Reaches the End of an Era
Sheyla Urdaneta, Anatoly Kurmanaev, Isayen Herrera and Adriana Loureiro Fernandez (NYT) Oct 7, 2020
Venezuela's oil reserves, the world's largest, transformed the country and the global energy market. Now its oil sector is grinding to a halt. Will it ever recover?

The Fiscal Federal Reserve
WSJ Oct 7, 2020
Powell signs up to monetize trillions of dollars in more spending.

Manufacturing employment declined more in countries with large trade surpluses than deficits
Robert Z. Lawrence (PIIE) Oct 7, 2020
Between 1995 and 2011, countries with the largest manufacturing trade surpluses experienced a slightly greater decline in manufacturing employment as a share of total employment than countries with the largest trade deficits.

Eastern Germany's New Growth Engine
Dalia Marin (Bruegel) Oct 7, 2020
Eastern Germany has suffered from three decades of deindustrialization since the collapse of communism, largely because of poor policy decisions. But by becoming an electric-vehicle powerhouse, the region can help to drive Europe's green transition and secure its own future prosperity.

Brexit Is a Sideshow for Pound Traders. Covid Is the Main Event
Marcus Ashworth (Bloomberg View) Oct 7, 2020
Sterling will get a boost from any EU trade deal, but the Treasury and BOE's battle against the pandemic's economic devastation is far more important.

Trump's Trade Policy Failed, But U.S. Economic Policy Didn't
Karl W Smith (Bloomberg View) Oct 7, 2020
The Fed and Congress show that good monetary and fiscal policy can make up for a lot.

Building Back Fairer and Greener
Pamela Coke-Hamilton (Project Syndicate) Oct 7, 2020
The world has a golden opportunity to build back boldly after the pandemic and put gender equality, social responsibility, and environmental protection at the heart of the recovery. With a deliberate and strategic focus on these issues, the future we sow could be more bountiful than the past.

Europe's "Green China" Challenge
Daniel Gros (Project Syndicate) Oct 7, 2020
If, as seems likely, China commits fully to President Xi Jinping's recent pledge to achieve carbon neutrality by 2060, the implications will be far-reaching. This is particularly true for the European Union, which will have its own plans and policies both facilitated and challenged in unanticipated ways.

How to Make Japan Great Again
Bill Emmott (Project Syndicate) Oct 7, 2020
If Japan's new prime minister, Yoshihide Suga, wants to emerge from the shadow cast by his predecessor, he will need to devise a compelling message to define his agenda. He could do worse than to focus on the country's labor market, which has long squandered the potential of a highly educated workforce.

Greening the Transatlantic Relationship
Connie Hedegaard (Project Syndicate) Oct 7, 2020
Far from derailing Europe's plans to achieve net-zero emissions, the COVID-19 pandemic has put climate action at the very center of EU policymaking. The only question now is whether Europe's oldest friend and ally will stop dragging its feet and come back to the table to help lead on this globally defining issue.

Can Biden Save the World?
Kemal Dervis (Project Syndicate) Oct 7, 2020
An administration led by the Democratic challenger could pursue a concerted US effort to renew multilateralism and reverse the trend toward a starkly divided world of great-power rivalry. At a time of unprecedented global challenges, such an outcome would benefit all, including China.

The Plastics Pandemic
Emma Navarro (Project Syndicate) Oct 7, 2020
Although the world's attention is understandably focused on COVID-19, we must not lose sight of longer-term priorities such as reducing plastics pollution, which the pandemic has exacerbated. The imperative is clear: Invest in policies and infrastructure to protect a resource that is vital to our economies and our very survival.

The Impact of Migration Controls on Urban Fiscal Policies and the Intergenerational Transmission of Human Capital in China
Holger Sieg, Chamna Yoon, and Jipeng Zhang (VoxChina) Oct 7, 2020
The study explores the impact of migration controls on urban fiscal policies and the intergenerational transmission of human capital accumulation in China. It shows that migrants provide large positive fiscal externalities to major cities. The study evaluates the feasibility and effectiveness of alternative migration policies that offer the potential of decreasing inequality within China, while at the same time promoting growth via increasing the aggregate level of human capital in the economy.

The Calm After the Storm: Sustainability Questions
Tim Quinlan, Shannon Seery, and Sara Cotsakis (WF Econ Group) Oct 7, 2020
In Part II of our series on the consumer outlook, we find that while a cut in additional stimulus is a clear negative for consumer spending, it will only slow rather than stop spending growth.

Booming demand for Chinese assets boosts renminbi's global role
Eva Szalay and Hudson Lockett (FT) Oct 8, 2020
Foreign investors abandon caution to snap up Chinese debt with encouragement of central bank in Beijing.

Johnson has taken the wrong economic lesson from the Covid crisis
Mariana Mazzucato (FT) Oct 8, 2020
The UK prime minister's crude characterisation of how drug innovation works has worrying implications.

It is time to move beyond a flawed G20
Javier Solana (FT) Oct 8, 2020
The OECD can play a vital role in a new global leadership group.

Shift in European equity market belies old economy tropes
Graham Secker (FT) Oct 8, 2020
Weighting of banks and energy stocks in key indices falls while healthcare and technology rises.

The pandemic has caused the world's economies to diverge
Economist Oct 8, 2020
But its long-term impact will be even more far-reaching.

The peril and the promise
Economist Oct 8, 2020
The pandemic will accelerate change in the world economy. That brings both opportunity and danger.

COVID's Impact in Real Time: Finding Balance Amid the Crisis
Francesco Grigoli and Damiano Sandri (IMF) Oct 8, 2020
Lockdowns impose short-term costs but may lead to a faster economic recovery as they lower infections and thus the extent of voluntary social distancing.

Economies are recovering, but the pace will vary across countries
Karen Dynan (PIIE) Oct 8, 2020
Economic activity across the globe plunged in the spring of 2020 as governments implemented measures to limit the spread of COVID-19. This reduction in economic activity is reflected in the substantial GDP decline across economies in 2020--with the exception of China. But the global recovery is now underway.

What should Europe expect from American trade policy after the election?
Uri Dadush and Guntram B. Wolff (Bruegel) Oct 8, 2020
A Joe Biden Administration would have to decide to what extent to unpick the major United States trade policy shifts of the last four years. A quick return to comprehensive trade talks with the European Union is unlikely and the US will remain focused on its rivalry with China. Nevertheless, there would be areas for EU/US cooperation, not least World Trade Organisation reform.

French Billionaires Seize Pandemic Opportunities
Lionel Laurent (Bloomberg View) Oct 8, 2020
Covid-19's creative corporate destruction is triggering a dog-eat-dog contest for power and money in Paris.

Maybe Low Interest Rates Won't Last Forever
Peter R Orszag (Bloomberg View) Oct 8, 2020
One fundamental deflationary force might soon disappear.

The Covid Crisis Exposed What Financial Reformers Missed
William C Dudley (Bloomberg View) Oct 8, 2020
Banks are OK. Other financial institutions, not so much.

No Stimulus Means Economy's Fate Hangs on Next Few Months
Conor Sen (Bloomberg View) Oct 8, 2020
Momentum could keep us going until the election is over and a vaccine arrives.

Africa's Fateful Choice
Carlos Lopes (Project Syndicate) Oct 8, 2020
With Africa reeling from multiple crises this year, the region's governments will have to direct their policy responses not just toward short-term recovery, but also toward long-term sustainability and resilience. Africa simply cannot afford any more investments in the dirty, inefficient, fragile economy of the past.

Eastbound and Green in Europe
Laurence Tubiana (Project Syndicate) Oct 8, 2020
Despite the unprecedented disruptions brought on by COVID-19, both the European Union and China remain committed to pursuing decarbonization and green investment. That means they have common ground from which to lead the rest of the world out of this crisis, and toward a more sustainable and resilient future.

Global Partnerships for an African Recovery
Landry Sign? (Project Syndicate) Oct 8, 2020
Aside from humanitarian principles and solidarity, a strong and rapid African recovery from the COVID-19 pandemic is in the world's interest. External partners can help to improve Africa's crisis response, accelerate its economic recovery, and build momentum for its post-pandemic development.

The Core of the ECB?s New Strategy
H?l?ne Rey (Project Syndicate) Oct 8, 2020
Now that the European Union has committed to achieving net-zero carbon emissions by 2050, the European Central Bank must start preparing for the structural shifts that lie ahead. In a world where governments want the prices of certain forms of energy to rise, the concept of price stability becomes more complicated.

Robots replace routine tasks performed by workers
Elisabetta Gentile, S?bastien Miroudot, Gaaitzen De Vries, and Konstantin M. Wacker (VoxEU) Oct 8, 2020
Rapid improvements in robot capabilities have fuelled concerns about the implications for jobs. This column examines the effect robots have had on jobs in industries across high-income and emerging countries from 2005 to 2015. The rise in robot adoption relates to a fall in the employment share of occupations that are intensive in routine tasks. This relation is observed in high-income countries, but not in emerging market and transition economies.

The shifting drivers of covered interest parity deviations
Eugenio Cerutti, Maurice Obstfeld, and Haonan Zhou (VoxEU) Oct 8, 2020
Covered interest rate parity has been a central principle in international finance, but important departures have persisted since the Global Crisis. This column argues that several macro-financial factors ? reflecting risk appetite, monetary policies, and financial regulations ? correlate over time with the evolution of covered interest parity deviations. The failure of covered interest rate parity has several policy implications, ranging from the domestic and international transmission of monetary policies to inefficient market allocations.

Some US-China economic and trade facts
Derek Scissors (AEI) Oct 8, 2020
The US remains well ahead of the People?s Republic of China across a range of important economic indicators, from domestic wealth to share of global foreign direct investment. Because China is rapidly aging, most of the gaps are unlikely to close, contrary to conventional wisdom. Policymakers should not worry that China can be the global economic leader. Instead, the focus should be on harmful Chinese behavior. While intellectual property coercion deserves attention, subsidies are the worst economic action. In particular, state-owned enterprises are often granted monopoly power and always protected from competition, denying everyone else opportunities in China and around the world. The first step the US should take is boring: documenting the problems. But this will justify the harsh retaliation necessary for any change in Beijing. Retaliation should include closing a few industries to China the way subsidies close many Chinese industries and treating large-scale beneficiaries of intellectual property coercion criminal entities.

China blurs lines between private and state business
FT View Oct 9, 2020
Entrepreneurs are being pressed to support political objectives.

Five priorities to help rejuvenate Greece?s labour market after the COVID-19 crisis
Tim Bulman (OECD Ecoscope) Oct 9, 2020
Across the globe, the COVID-19 crisis has hit workers with temporary contracts and those working in tourism and consumer-related services particularly hard. These groups make up large shares of Greece?s workforce, and tourism?s strong growth in recent years.

Can developing countries rein in offshore wealth?
Matthew Collin (Brookings) Oct 9, 2020
If you want to stop the government or fellow citizens from knowing the true extent of your wealth, you can do no better than move that money offshore. This time-honored strategy works well for those wishing to avoid taxation but remains a constant frustration to authorities trying to build progressive tax systems and stymie inequality and corruption: It?s difficult to eat the rich if you can?t figure out where they dine. Taxing people?s income directly remains particularly elusive for developing countries, which raise around one third as much from income taxes relative to their GDP as high-income countries. Reining in offshore tax evasion would be a step in the right direction.

Argentina and Ecuador Diverge After Bond Restructurings
Mohamed Aly El-Erian (Bloomberg View) Oct 9, 2020
Their similarities and differences highlight the broader issue of reforming the international debt architecture.

Bonds Signal China Has Dodged Its Minsky Moment
John Authers (Bloomberg View) Oct 9, 2020
It makes sense on this occasion to trust what the country?s tightly controlled debt market is saying.

Keeping Money at Home Can Be Costly for Investors
Mark Gilbert (Bloomberg View) Oct 9, 2020
Investors typically favor their domestic stock markets. For U.K. savers in particular, that loyalty has come at the expense of returns.

The Public?s Business
Dani Rodrik (Project Syndicate) Oct 9, 2020
By promoting behavioral norms that balance market and society, "stakeholder capitalism" is supposed to enable private firms to fill the vacuum created by the decline of traditional forms of regulation by national governments. Ultimately, though, the only viable solution is to make business itself more democratic.

It?s the Energy Policies, Stupid
Leah C. Stokes (Project Syndicate) Oct 9, 2020
If renewable energy sources like wind and solar are now competitive with fossil fuels, what's stopping advanced economies like the United States from quickly shifting to a 100% clean-energy system? The short answer is that politicians are standing in the way of both markets and public opinion.

System-Level Greening
Bertrand Badr? (Project Syndicate) Oct 9, 2020
Just as past global disasters gave rise to new ways of organizing society and the economy, so must the COVID-19 pandemic. A system built on "optimization" and accumulation for its own sake can no longer be defended in a world of mounting financial debts and rising temperatures.

The Coming Equity Shortage
Ricardo Hausmann (Project Syndicate) Oct 9, 2020
Firms that manage to survive until an effective COVID-19 vaccine is widely available will have a bright future but weak balance sheets. Innovative new private-equity funds, modeled on US special-purpose acquisition companies, could provide much-needed capital ? not least in emerging markets.

Patterns in invoicing currency in global trade
Emine Boz, Camila Casas, Georgios Georgiadis, Gita Gopinath, Helena Le Mezo , Arnaud Mehl, and Tra Nguyen (VoxEU) Oct 9, 2020
Most global trade transactions are invoiced in just a few currencies, regardless of the countries involved in the transaction. This column presents a new dataset that offers a comprehensive and up-to-date understanding of trade invoicing patterns within the major currencies. It finds that vehicle currency use has been on the rise, with dollar invoicing increasing over time despite the decline in the share of global trade accounted for by the US, and euro invoicing also rising among certain countries (typically at the expense of the dollar).

China?s Belt and Road Initiative Is a Mess, Not a Master Plan
Lee Jones (FP) Oct 9, 2020
Beijing?s foreign investments are often money-losing and driven by recipients? own agendas.

COVID-19 Might Not Change the World
Joseph S. Nye Jr. (FP) Oct 9, 2020
Pandemics are not always transformative events. While some worrying preexisting trends could accelerate, it?s incorrect to assume that the coronavirus will end globalization, kill liberal democracy, or enhance China?s soft power.

Investors seek glimmers of turnround in US third-quarter earnings
Mamta Badkar (FT) Oct 10, 2020
Analysts are raising forecasts but Covid-19 and stimulus doubts overshadow sentiment.

Europe?s Economic Recovery Is a Summer Memory
Peter S. Goodman (NYT) Oct 10, 2020
As the coronavirus resumes spreading rapidly across the continent, hopes for an economic revival have given way to diminished expectations.

Coupling education and innovation policies for economic growth
Ufuk Akcigit, Jeremy Pearce, and Marta Prato (VoxEU) Oct 10, 2020
For economies to innovate and grow past the COVID-19 crisis, policymakers have to understand the implications of various policies for innovation and economic growth, and take into account how people sort into professions and how potential scientists and innovators respond to policy. This column presents a comprehensive framework to study theoretically and empirically the role of education and R&D policies for boosting innovation and economic growth. It finds that policy tools in both education and R&D are complementary in developing talent, which is the key ingredient to innovation. The best mix of policies depends on how unequal society is and how urgently innovation is needed.

Global connectedness, market power, and firms' resilience to domestic COVID-19 shocks
Jay Hyun, Daisoon Kim, and Seung-Ryong Shin (VoxEU) Oct 10, 2020
During periods of turmoil such as the Covid-19 pandemic, firms with more resilient business models tend to survive and expand more than others. This column presents evidence that firms with higher global connectedness and market power are more resilient to domestic pandemic shocks. While global production and export networks expose firms to foreign pandemic shocks, they potentially make firms less susceptible to domestic pandemic shocks through diversification of suppliers and markets. In addition, higher market power could provide buffers by allowing bigger margins of adjustment.

Dawn breaks on a new age of economic thinking
Martin Sandbu (FT) Oct 11, 2020
IMF analyses point to more co-operation between governments and the private sector.

More of the world has plunged back into poverty ? and Trump?s leadership won?t turn it around
WP Oct 11, 2020
The World Bank estimates the ranks of the world?s poorest will grow by 88 million to 115 million by the end of the year.

Resilient supply chains can inoculate against vaccine nationalism
John Denton and Damien Bruckard (EAF) Oct 11, 2020
Supply chain fragility has been disingenuously invoked or hyped-up to cover for governmental failures. Inadequate stockpiles of masks, medicines and ventilators cannot reasonably be described as failures of corporate supply chains ? they were failures of government planning.

The Best Way to Avoid a $1.9 Billion Default? Just Let Go
Shuli Ren (Bloomberg View) Oct 11, 2020
Even as China?s companies struggles to repay their loans, some are unwilling to part with their assets.

Covid-19 Is Big Oil?s Asteroid Strike
Julian Lee (Bloomberg View) Oct 11, 2020
The coronavirus is hastening change at the oil majors. Those that can't transform fast enough will go the way of Tyrannosaurus Rex.

West Needs New Ideas, Not Just New Voices
Pankaj Mishra (Bloomberg View) Oct 11, 2020
Increased space for minorities is welcome, but shouldn?t be confused with genuine intellectual diversity and openness of thought.

Brexit will affect markets, deal or no deal
Karen Ward (FT) Oct 12, 2020
Investors braced for long-awaited resolution to EU-UK negotiations on their future ties.

The Great Wall (Street) of China
Patrick Jenkins (FT) Oct 12, 2020
2020 marks the year when Beijing finally threw open its doors to US banks despite broader Sino-American tensions.

Emerging economies plead for more ambitious debt relief programmes
Jonathan Wheatley, David Pilling and Andres Schipani (FT) Oct 12, 2020
Critics contrast central banks? huge stimulus with limited help for poor countries.

Why the Brexit Talks Could Still Fail
Lionel Laurent (Bloomberg View) Oct 12, 2020
This isn?t just about sole, but sovereignty.

IMF?Meetings to Highlight?Policy Puzzle for Economists
Mohamed Aly El-Erian (Bloomberg View) Oct 12, 2020
Global projections and commentary will define long-term challenges that need innovative solutions.

Currency Traders Are Betting Against Trump, Too
Shuli Ren (Bloomberg View) Oct 12, 2020
The president?s diminishing poll numbers have been a good thing for China's yuan.

The Key to Future Competitiveness
Jules Kortenhorst (Project Syndicate) Oct 12, 2020
The winners of the future global economy will be the countries that moved decisively to replace fossil fuels with clean, renewable energy sources. Unlike the United States, China, most European countries, and others clearly have gotten the message, and are capitalizing on the rapidly falling costs of wind and solar.

The Great Reallocation
Agust?n Carstens (Project Syndicate) Oct 12, 2020
Economic growth will eventually return. But its engines will not be the same as before the pandemic. The sooner policymakers recognize this and develop targeted economic-support strategies ? which must include a heavy dose of structural reform ? the faster, stronger, and more resilient the recovery will be.

The Logic of Sino-Western D?tente
Jim O'Neill (Project Syndicate) Oct 12, 2020
It might be cathartic to opine noisily about another country?s standards and practices, but there is substantial historical evidence to suggest that a country?s citizens will tend to value economic opportunity over most other issues. That axiom applies as much to the US, the UK, and Europe as it does to China.

Post-COVID Capitalism
Klaus Schwab (Project Syndicate) Oct 12, 2020
The COVID-19 pandemic has shone a spotlight on social, economic, and environmental risks that have been building for the past half-century of neoliberalism. Even amid the deep uncertainties of today's global situation, one thing is clear: it is time to start questioning old assumptions and developing a new paradigm.

Overruling the Rule of Law
Nicholas Reed Langen (Project Syndicate) Oct 12, 2020
The Republican Party's rushed confirmation of Supreme Court nominee Amy Coney Barrett is merely the latest sign that it has abandoned any pretense of respecting America's constitutional system. Like Boris Johnson in the United Kingdom, US President Donald Trump and the GOP will stop at nothing to hold on to power.

Inflation targeting in India: An interim assessmentInflation targeting in India: An interim assessment
Barry Eichengreen, Poonam Gupta, and Rishabh Choudhary (VoxEU) Oct 12, 2020
Inflation targeting in India is a work in progress, but the interim assessment presented in this column suggests that significant progress has already been achieved to date. This progress is evident in the reduced volatility of a range of inflation-related outcomes (the volatility of inflation, of inflation expectations, and of exchange rates and equity markets) and in the stronger anchoring of inflation expectations, which appears to have enhanced the ability of the Reserve Bank of India to respond to the exceptional shock of the COVID-19 pandemic. The Bank would appear to be one of a substantial number of inflation-targeting central banks that were able to respond more forcefully than their non- inflation-targeting counterparts.

Switzerland: High intergenerational income mobility, despite low educational mobility
Patrick Chuard and Veronica Grassi (VoxEU) Oct 12, 2020
Equal opportunities are not only ethically desirable but also important for economic growth, and one important facet is intergenerational income mobility. Using administrative data, this column documents intergenerational income and educational mobility in Switzerland. It finds that income mobility in Switzerland is high, but education depends strongly on parental income. It goes on to ask whether the country's vocational training and education system might be the primary reason for this ?high income, low educational mobility? conundrum.

The international dimension of a central bank digital currency
Massimo Minesso Ferrari, Arnaud Mehl, and Livio Stracca (VoxEU) Oct 12, 2020
The majority of central banks around the world are working on their own digital currency. This column argues that central bank digital currencies would not only have domestic macroeconomic and financial implications for the issuing economy, they would also have implications for the rest of the world. In particular, the unique characteristics of a central bank digital currency, if used internationally, would create a new ?super charged? uncovered interest parity condition which would induce stronger international linkages in a quantitatively relevant way.

Trumpworld's Corruption Is as Globalized as the Ultra-Rich the President Mingles With
Ananya Chakravarti (FP) Oct 12, 2020
Elliott Broidy and others are connected to globe-spanning scandals.

The rise and rise of creativity
Steven Shapin (Aeon) Oct 12, 2020
Once seen as the work of genius, how did creativity become an engine of economic growth and a corporate imperative?

The global economic recovery is dramatically uneven
FT View Oct 13, 2020
China leads the way, while the rest of the world lags behind.

Renminbi gains as China strengthens
Diana Choyleva (FT) Oct 13, 2020
Array of economic and political factors points to a continued rise in the Chinese currency.

Act now to prevent a tragic economic ending
Megan Greene (FT) Oct 13, 2020
The recovery from lockdowns is stalling and more fiscal stimulus is needed.

Pandemic pushes SE Asia back into poverty
David Hutt (AT) Oct 13, 2020
Poverty rates in Southeast Asia will rise for the first time in nearly two decades as pandemic-induced economic crisis causes most regional countries to contract, not grow, in 2020.

The rise of the monopolists in Modi?s India
Ravi Kant (AT) Oct 13, 2020
John D Rockefeller once said, ?Own nothing, control everything.? This was the philosophy behind one of the richest men of the 19th century. He was the first to put modern monopoly principles into practice.

Rising yuan good for China, good for the world
William Pesek (AT) Oct 13, 2020
In a year of thrills, spills and chills, here?s something else that has not gone as Donald Trump expected: China?s currency is rising. One of the US president?s most consistent gripes is how Chinese counterpart Xi Jinping is stealing jobs via an undervalued yuan.

The great inflation comeback
Brian Caplen (Banker) Oct 13, 2020
After years of low inflation, a forecast of 5-10% seems incredible ? but not if there?s a huge shift in the way the global economy functions.

A Long, Uneven and Uncertain Ascent
Gita Gopinath (IMF) Oct 13, 2020
This is the worst crisis since the Great Depression, and it will take significant innovation on the policy front, at both the national and international levels to recover from this calamity.

For the euro there is no shortcut to becoming a dominant currency
Gr?gory Claeys and Guntram B. Wolff (Bruegel) Oct 13, 2020
As an international currency, the euro has always been a distant second to the dollar. The idea of a greater international role for the euro has been floated, but without major institutional reform the euro will not challenge dollar hegemony.

A Bridge to Economic Recovery: Be Aware of Financial Stability Risks
Tobias Adrian (IMF) Oct 13, 2020
Beware of the real-financial disconnect.

Italy Is Suddenly Looking Very French
Ferdinando Giugliano (Bloomberg View) Oct 13, 2020
Rome?s bout of corporate intervention is only partly to do with the pandemic.

Market Sends?Grim Message on Investing For the Future
Chris Hughes (Bloomberg View) Oct 13, 2020
Companies face a tough sales job when transforming themselves. Stock investors just don't value future promise very highly.

Deflationary Trends Are Growing More Powerful
Gary Shilling (Bloomberg View) Oct 13, 2020
The latest consumer price index report proves that the path of least resistance for inflation is lower.

Feeding a Greener World
Robert Watson (Project Syndicate) Oct 13, 2020
Though most people take food production more or less for granted, it is a critical front in all of the most pressing environmental issues of the day. Without more sustainable agricultural practices, humanity can look forward to a future of runaway climate change, ecological destruction, and food insecurity.

Making Business Work for Nature
Erin Billman (Project Syndicate) Oct 13, 2020
From the energy industry to industrial agriculture, the private sector has long reaped large financial rewards from environmental destruction. But the costs of that destruction are growing, and businesses' responsibility ? and motivation ? to reverse it becoming more apparent.

The Key to the Productivity Puzzle
Diane Coyle (Project Syndicate) Oct 13, 2020
Although the factors contributing to stagnant productivity are well known, economists and policymakers have so far paid little attention to figuring out how to address these problems in a coordinated way. But the need to deliver broad-based prosperity is more pressing than ever, and this shortcoming must be rectified without delay.

Greening the Gig
Juliet B. Schor (Project Syndicate) Oct 13, 2020
The initial hope for the digital platform-based "sharing economy" was that it would both empower workers and reduce the broader economy's carbon footprint. Neither has happened under corporate ownership; but ample research shows that alternative cooperative models could reclaim the sector's original promise.

Scotland after Sterling
Barry Eichengreen (Project Syndicate) Oct 13, 2020
Scottish advocates of leaving the United Kingdom need a plan for a new currency and an independent central bank, as well as a blueprint for the country's subsequent transition to the euro. These would go a long way toward reassuring Scots who yearn for independence but worry about what follows sterling.

The Making of Suganomics
Koichi Hamada (Project Syndicate) Oct 13, 2020
To ensure Japan's future growth and prosperity, Japan's new prime minister, Yoshihide Suga, will need to uphold his promise to remain on the economic-policy path laid by his predecessor, Shinzo Abe. But that is easier said than done, owing to internal resistance and external misconceptions about Abenomics.

Increasing market concentration in Europe is more likely to be a sign of strength than a cause for concern
Tommaso Bighelli, Filippo di Mauro, Marc Melitz, and Matthias Mertens (VoxEU) Oct 13, 2020
Aggregate firm concentration has increased in Europe in the last decade. Using firm-level data, this column shows that concentration is positively associated with productivity at the sector level. As a result, rising concentration should not be viewed as conclusive evidence of a weak competitive environment and need not necessarily be a cause for concern. Rather, rising concentration may be a reflection of more efficient market processes. This has important consequences for industrial and antitrust policy, which must carefully evaluate the costs and benefits of increasing concentration.

Assessing Recent Stock Market Valuation with Macro Data
Kevin J. Lansing (FRBSF Econ Letter) Oct 13, 2020
History suggests that elevated values of the cyclically adjusted price-earnings (CAPE) ratio may indicate an overvalued stock market. A valuation model that uses a small set of economic variables can help account for movements in the CAPE ratio over the past six decades. One of these variables is a macroeconomic uncertainty index. Comparing the model?s prediction for the second and third quarters of 2020 to the 2008?2009 period suggests that investors have reacted to macroeconomic uncertainty very differently during the COVID-19 outbreak than they did during the financial crisis.

U.K. Economy Underwhelms
Nick Bennenbroek, Michael Pugliese, and Jen Licis (WF Econ Group) Oct 13, 2020
The United Kingdom's economy entered 2020 on somewhat shaky footing. Real GDP growth was just 1% year-over-year in Q4-2019 as Brexit uncertainty and a mildly sluggish global growth environment weighed on the British economy.

Covid-19 is a chance to end row over aircraft aid
FT View Oct 14, 2020
A transatlantic settlement on how to support Airbus and Boeing is sorely needed.

Donald Trump lacks appeal in a low-immigration world
Janan Ganesh (FT) Oct 14, 2020
As angst over the issue fades, so do the electoral fortunes of populists.

5G-powered automation will transform work for the better
Marcus Weldon (FT) Oct 14, 2020
The pandemic has accelerated the need for a new digital infrastructure.

China slowing the yuan?s rise? Very doubtful
Uwe Parpart (AT) Oct 14, 2020
There was much ado on Bloomberg and other financial news services when the People?s Bank of China announced last Saturday that financial institutions no longer need to set aside cash for risk reserves when purchasing foreign exchange for clients through forward contracts starting on Monday.

Post-Brexit Trade for Development: An Unfulfilled Promise
L. Alan Winters, Max Mendez-Parra and Ian Mitchell (CGD) Oct 14, 2020
We identify improvements the UK can make immediately by reducing tariffs for some LMICs. However, to make material and lasting improvements in market access will require deeper thinking on issues like Rules of Origin. To fulfill its pledge, we urge the government to set out its plans to tackle these issues fully.

Fiscal Policy for an Unprecedented Crisis
Vitor Gaspar, Paulo Medas, John Ralyea, and Elif Ture (IMF) Oct 14, 2020
Many countries will need to do more with less, given increasingly tight budget constraints.

We?re Looking at the Glass-Half-Empty Recovery
Daniel Moss (Bloomberg View) Oct 14, 2020
Feeling relief when growth remains largely negative shows how badly Covid-19 has hit the world.

A Hard-Headed Case for More Covid Stimulus
Tyler Cowen (Bloomberg View) Oct 14, 2020
So long as it's well designed, government aid can still do a lot of economic good.

Biden Would Smother the Economy by Raising Taxes
Michael R Strain (Bloomberg View) Oct 14, 2020
Promising to make corporations and the well-off pay more may be smart politics but it?s shortsighted policy.

Cuba?s Currency Reform Could Ease Its Covid-19 Blues
Mac Margolis (Bloomberg View) Oct 14, 2020
Junking the country?s disastrous dual-currency system could unleash the island?s animal spirits.

Is Indonesia Selling Out to Investors?
Daniel Moss (Bloomberg View) Oct 14, 2020
Jokowi?s business-friendly reforms cut back worker protections at a difficult economic moment. But they?re long overdue.

Capitalism Caused Climate Change; It Must Also Be the Solution
David Fickling (Bloomberg View) Oct 14, 2020
The vast sums needed to retrofit energy systems with lower-carbon alternatives will require economic growth.

The Recovery Needs Development Aid
Kevin Rudd (Project Syndicate) Oct 14, 2020
Although it may be tempting for governments to use the current crisis as an excuse to cut foreign development spending, they should be doing exactly the opposite. The more support that developing and emerging economies have to weather the storm, the faster the global recovery will be.

How the Green Revolution Is Harming Africa
Jayati Ghosh (Project Syndicate) Oct 14, 2020
The COVID-19 pandemic and ongoing climate change should have taught us the importance of resilience. Unfortunately, well-intentioned efforts to improve food security in Africa are instead increasing small farmers? dependence on global agribusinesses without raising their incomes, and making farming systems more fragile.

Financial Inclusion 2.0
An?bal Peluffo (Project Syndicate) Oct 14, 2020
As the experience of Uruguay shows, transforming developing countries? financial systems in order to boost social inclusion will require bolder policies, more ambitious targets, and creative solutions. If these measures enable everyone to access and benefit from financial services, then finance may no longer be a dirty word.

Borrowing costs after debt relief
Valentin Lang, David Mihalyi, and Andrea Presbitero (VoxEU) Oct 14, 2020
To mitigate the effects of the Covid-19 crisis, the international community has endorsed a programme suspending debt service payments for poor countries. This column shows that the programme has led to a substantial decrease in sovereign borrowing costs by providing liquidity. Importantly, the results do not lend support to the widespread concern that such debt relief could generate stigma and signal debt sustainability concerns.

Effectiveness of R&D tax incentives in OECD economies
Silvia Appelt, Matej Bajgar, Chiara Criscuolo, and Fernando Galindo-Rueda (VoxEU) Oct 14, 2020
Tax incentives have become the number one policy tool that governments use to encourage companies to invest in research and development. This column presents the results of a new analysis of firm-level records in 20 OECD countries, which suggests that, overall, R&D tax incentives are effective in boosting business R&D but their effectiveness differs sharply across firms of different sizes and across countries.

Deal or No Deal Is No Longer the Point
Joseph de Weck (FP) Oct 14, 2020
The United Kingdom is heading for a "hard Brexit” no matter what. Here's why—and what it means for the country's economy.

The Calm After the Storm: Household Balance Sheets
Tim Quinlan and Shannon Seery (WF Econ Group) Oct 14, 2020
This third and final installment considers the implications for consumer spending in the context of the household balance sheet.

A challenging time awaits WTO's next chief
FT View Oct 15, 2020
The successful candidate must remake the body's image.

Investors backing tech in a pandemic must balance risk and reward
Stefan Wagstyl (FT) Oct 15, 2020
From financial services to entertainment, tech-based companies have made huge gains in market share.

Time for investors to score portfolios on investing horizon
Paul Woolley (FT) Oct 15, 2020
Funds need a clearer idea of where their returns are coming from.

Developing economies must not succumb to export pessimism
Arvind Subramanian (FT) Oct 15, 2020
Despite deglobalisation fears, most countries can still expand overseas sales rapidly.

Investors should watch the transatlantic split on ESG closely
Gillian Tett (FT) Oct 15, 2020
If rules change under a Biden administration, it could accelerate capital flows into the sector.

Society has to find a new equilibrium
Raghuram Rajan (FT) Oct 15, 2020
In the first of a series, the former Indian central banker explains why the solution to economic adversity is to strengthen local communities.

Germany's Better. No, Worse. Wait, What?
Andreas Kluth (Bloomberg View) Oct 15, 2020
Germany tends to be painted by outsiders and insiders in mutually exclusive superlatives. Both caricatures miss the point.

Markets Without Havens Are Becoming All Too Real
Alberto Gallo (Bloomberg View) Oct 15, 2020
The notion of risk-free assets is a cornerstone of portfolio investing, but what if risk-free assets no longer exist?

Don't Overestimate the COVID-19 Recovery
Eswar Prasad (Project Syndicate) Oct 15, 2020
At this point in the COVID-19 crisis, governments have only one good option: further aggressive fiscal stimulus, complemented by coherent virus-containment strategies. Without such policies, demand and confidence will remain subdued, and global growth will continue to falter well into the future.

Globalisation and pandemics
Pol Antràs, Stephen Redding, and Esteban Rossi-Hansberg (VoxEU) Oct 15, 2020
Throughout human history, globalisation and pandemics have been closely intertwined. This column introduces a theoretical framework to analyse the relationship between the two. Deepening global integration can either increase or decrease the range of parameters for which a pandemic occurs. For countries sufficiently similar to one another, globalisation increases the prevalence and severity of pandemics; for countries sufficiently different from one another, it reduces them. When agents internalise the threat of infection, trade flows (even as a share of output) are largely reduced but recover quickly after the pandemic.

Pulling together or pulling apart: EU trade and development policy
Peter Holmes, Julia Magntorn Garrett, and Jim Rollo (VoxEU) Oct 15, 2020
The global economy appears to be shifting from a rules-based to a power-based trading system. This column argues that a high degree of coherence in the values projected by its member states can help the EU harness its soft power to promote its policy objectives externally. Using a similarity index to explore the coherence of trade-related aid objectives betweenthe institutions of the EU and four key member states, it finds what the authors call a 'positive complementarity', whereby EU institutions and the member states currently promote similar but not identical aims.

Pandemics and inequality: A historical overview
Guido Alfani (VoxEU) Oct 15, 2020
The relationship between pandemics and inequality is of significant interest at the moment. The Black Death in the 14thcentury is one salient example of a pandemic which dramatically decreased wealth inequality, but this column argues that the Black Death is exceptional in this respect. Pandemics in subsequent centuries have failed to significantly reduce inequality, due to different institutional environments and labour market effects. This evidence suggests that inequality and poverty are likely to increase in the aftermath of the Covid-19 crisis.

A wave of new investors who have little concept of the risks
Merryn Somerset Webb (FT) Oct 16, 2020
Faced with the strong possibility of ongoing paranoia-driven economic stagnation, we are upping our savings accordingly.

US Trade Policy Shouldn't Pit Developing Countries Against Each Other
Kimberly Ann Elliott (CGD) Oct 16, 2020
The global economy is gradually healing from the economic blows dealt by the coronavirus pandemic, but the recovery remains fragile and halting. Reduced trade is more a symptom than a cause of those trends—and what governments do in terms of additional fiscal stimulus will do far more to determine the shape of the recovery in the United States and other countries. Still, trade policy could be a factor, supporting or undermining the nascent recovery.

Six Takeaways from the New Growth Forecasts from the IMF and the World Bank
Amina Mendez Acosta and David Evans (CGD) Oct 16, 2020
This week the IMF released new global economic growth projections in the face of COVID-19, updating their earlier projections from June and from April before that. In recent weeks, the World Bank has also released new projections for various regions. Here are six takeaways that we gleaned from reviewing those and dozens of other projections from other organizations over the course of the year.

7 Ideas to Address Hunger and Climate Change
Johanna Mendelson Forman (Globalist) Oct 16, 2020
This World Food Day what can citizens do to create a global movement to address hunger and climate change?

Who's Afraid of Rules-Based Monetary Policy?
John B. Taylor (Project Syndicate) Oct 16, 2020
In addition to introducing a massive policy response to the COVID-19 crisis, the US Federal Reserve this year has announced a fundamental change in its overall strategy. Yet in doing so, it has unnecessarily introduced more uncertainty into the policy mix, setting a bad example for the world's other major central banks.

A proposal for an Asian digital common currency
Taiji Inui, Wataru Takahashi, and Mamoru Ishida (VoxEU) Oct 16, 2020
Central bank digital currencies are currently being considered by many central banks around the world. This column advocates the introduction of an Asian digital common currency as a multilateral synthetic currency comparable to the euro. It argues that the benefits it would bring – such as a deepening cooperation within multilateral frameworks and the protection of the rights of small and medium-sized countries – are greater than the disadvantages of inefficiencies in multilateral frameworks.

The Great Coronavirus Divide: Wall Street Profits Surge as Poverty Rises
John Cassidy (New Yorker) Oct 16, 2020
The pandemic has highlighted glaring economic problems that have been building up for decades, including lack of job security, racial inequities, stagnant wages, an inadequate social safety net, and a hopelessly lopsided distribution of income and wealth.

Global economy: the week that austerity was officially buried
Chris Giles (FT) Oct 17, 2020
The IMF and World Bank are urging richer countries to spend their way out of the pandemic, although some developing nations face cuts

The Next China? India Must First Beat Bangladesh
Andy Mukherjee (Bloomberg View) Oct 17, 2020
The country is missing its real comparative advantage by not emphasizing low-skilled labor exports.

Japan's Suga inherits an economy stabilised by Abenomics
Gavyn Davies (FT) Oct 18, 2020
The country is no longer such an obvious outlier among its peers.

Europe is on track to repeat its fiscal policy mistakes
Shahin Vallée (FT) Oct 18, 2020
Governments are planning to cut deficits at the wrong time.

Joe Biden needs an economic team that will support workers
Rana Foroohar (FT) Oct 18, 2020
If elected US president, the Democratic candidate should focus on bridging a historic divide.

Asia won't beat COVID-19 without international money
Adam Triggs (EAF) Oct 18, 2020
How Asia's developing countries are paying for the COVID-19 pandemic. The results expose a stark divide across the region. While Asia's developed countries are relying entirely on their central banks and finance ministries, Asia's developing countries are, on average, relying on multilateral bodies and bilateral aid for almost 50 per cent of their financing of the economic fallout they face.

Britain's Virus Deadlock Is Indicative of a Bigger Challenge
Mohamed Aly El-Erian (Bloomberg View) Oct 18, 2020
The government and regions must align quickly, or a national lockdown is likely to follow — and be more severe.

Time is running short to resolve the Brexit drama
FT View Oct 19, 2020
A path to a UK-EU trade deal exists, but theatrics risk a breakdown.

Why small businesses in supply chains matter too
FT View Oct 19, 2020
Britain's new restrictions risk hurting a big chunk of the economy.

The debt bubble legacy of economists Modigliani and Miller
Robin Wigglesworth (FT) Oct 19, 2020
Research laid the intellectual groundwork for a dramatic erosion of corporate creditworthiness.

Investors bet on the resilience of India's rural economy
Benjamin Parkin (FT) Oct 19, 2020
Hinterland leads country's economic and corporate recovery from the pandemic.

EU economy: fear of no-deal Brexit stalks the fields of Flanders
Sam Fleming and Jim Brunsden (FT) Oct 19, 2020
Tariffs and quotas would hit Belgium's Dutch-speaking north, one of the regions most closely integrated with the UK.

Covid-19 launches the Fourth Industrial Revolution
David P. Goldman (AT) Oct 19, 2020
Some wars are won by attrition with roughly similar casualties on both sides. Others are unequal contests in which superiority in technology or organization leaves the losing side with most of the casualties.

What Are the Economic Prospects for 2021?
Ludovic Subran (BRINK) Oct 19, 2020
After strong post-lockdown catch-up effects, economic recovery is expected to slow in Q4 2020 and Q1 2021 as distancing measures re-tighten and ongoing job shedding keeps spending and investment in check. Q2 2020 data has already confirmed diverging recovery paths. What the current global GDP growth forecasts looks like.

Investing in human capital in the Middle East and North Africa is more important than ever
Keiko Miwa and Jeremie Amoroso (Brookings) Oct 20, 2020
What is the state of human capital in the MENA region?

Building an Inclusive Recovery in the Middle East and Central Asia
Jihad Azour and Joyce Wong (IMF) Oct 19, 2020
While these challenges are stark and the period ahead highly uncertain, we see a path forward.

A Leap Forward on Cross-Border Payments
Tobias Adrian and Kristalina Georgieva (IMF) Oct 19, 2020
Reforms have the potential to be transformative by making cross-border payments cheaper, faster, more transparent, and more widely accessible.

The Problem Isn't that Chinese Lending Is Too Big, It's that the US and Europe's Is Too Small
Charles Kenny and Ian Mitchell (CGD) Oct 19, 2020
How much does it cost to lend $350bn?

Europe Shouldn't Try to Eat London's Lunch
Bloomberg View Oct 19, 2020
The continent isn't ready to host a new financial hub.

Maybe There's Hope for a V-Shaped Recovery After All
Daniel Moss (Bloomberg View) Oct 19, 2020
China managed to post growth almost on par with pre-Covid levels, even if the figure fell short of expectations.

Boris Johnson Can't Even Get the Pound to Listen
John Authers (Bloomberg View) Oct 19, 2020
The currency market's listless response to the prime minister's no-deal Brexit warning is a stinging rebuke.

The Leader the WTO Needs
Mo Ibrahim (Project Syndicate) Oct 19, 2020
With the world teetering on the brink of historic reversals of hard-won progress on reducing extreme poverty and malnutrition, combating child mortality, and extending educational opportunity, we need a trading system that works for the poor. And the World Trade Organization needs the right director-general to oversee it.

Think Small for an American Recovery
Laura Tyson (Project Syndicate) Oct 19, 2020
Small businesses play an outsize role in the US economy, accounting for about half of all private-sector employment and nearly two-thirds of all net new job creation since 2000. And federal support for them is crucial to avoid a prolonged, anemic, and uneven recovery that leaves many marginalized communities behind.

Boris Johnson's Failed COVID-19 Launch
Mariana Mazzucato (Project Syndicate) Oct 19, 2020
UK Prime Minister Boris Johnson has embraced mission-oriented governance in letter but not in spirit. Far from empowering the state to serve the public interest, his plan for a COVID-19 testing "moonshot" threatens to weaken further the capacity of the public-health sector.

Economic consequences of Covid-19: A multi-country analysis
Alexander Chudik, Kamiar Mohaddes, M. Hashem Pesaran, Mehdi Raissi, and Alessandro Rebucci (VoxEU) Oct 19, 2020
The Covid-19 pandemic is unprecedented in its global reach and impact, posing formidable challenges to policymakers and to the empirical analysis of its direct and indirect effects within the interconnected global economy. This column uses a 'threshold-augmented multi-country econometric model' to help quantify the impact of the Covid-19 shock along several dimensions. The results of the analysis show that that the global recession will be long lasting, with no country escaping its impact regardless of their mitigation strategy. These findings call for a coordinated multi-country policy response to the pandemic.

Is the Federal Reserve Contributing to Economic Inequality?
Mary C. Daly (FRBSF Econ Letter) Oct 19, 2020
Not every American gets the same chance at life, liberty, and the pursuit of happiness. We have to acknowledge and confront this reality—as individuals, as institutions, and as a nation. The Fed can help create more inclusive economic success by finding full employment experientially. But achieving true equality will require commitment from all of us.

Herd Immunity: Why Capex Is Holding Up
Sarah House, Tim Quinlan, and Shannon Seery (WF Econ Group) Oct 19, 2020
In this first installment of a two part series, we explore how the compositional shifts in capital spending from the pandemic are affecting our outlook for business investment.

China risks cementing its structural flaws
FT View Oct 20, 2020
An over-reliance on state investment persists.

The world must counter China's dominance of rare earths
James Conway and Peter Ackerman (FT) Oct 20, 2020
Country has grip on swath of minerals crucial to future key industries.

BlackRock's timely China bonding experience
William Pesek (AT) Oct 20, 2020
In a world of fast-cooling growth and some overly hot asset markets, are Chinese government bonds the Goldilocks investment of 2021? This might have seemed an odd thought in pre-coronavirus times.

The pandemic will structurally change the global economy more than we think
Alicia García-Herrero (Bruegel) Oct 20, 2020
It is time to rethink many of the basic principles of our economic model to mitigate the impacts of the COVID-19 pandemic.

Tax challenges from digitalisation: A global two-pillar solution could increase tax revenues and support economic activity
David Bradbury, Tibor Hanappi, Pierce O'Reilly, Ana Cinta González Cabral, Åsa Johansson, Stéphane Sorbe, Valentine Millot, and Sébastien Turban (OECD Ecoscope) Oct 20, 2020
Towards a global two-pillar solution.

Reports of Shale's Death Were Greatly Exaggerated
David Fickling (Bloomberg View) Oct 20, 2020
ConocoPhillips buying Concho caps a flurry of deals that show there's life in the industry even with oil at around $40 a barrel.

Old-Age Is the Next Global Economic Threat
Noah Smith (Bloomberg View) Oct 20, 2020
Japan's deflation is a warning to other countries with swelling elderly populations

Brussels Blows the Roof Off the Bond Market
Marcus Ashworth (Bloomberg View) Oct 20, 2020
The EU wanted to issue 17 billion euros of debt, and it got demand for 233 billion euros. The German bund has a serious rival.

The Arctic Comes in from the Cold
Carl Bildt (Project Syndicate) Oct 20, 2020
The more that global warming reduces the ice cover in the Arctic, the greater the need there will be for multilateral arrangements to govern trade, resource extraction, and other issues across the region. Without forward-looking cooperation, a zero-sum scramble will ensue, leaving everyone worse off.

Immunization Is the Best Weapon Against Poverty
Anuradha Gupta (Project Syndicate) Oct 20, 2020
Anti-vaxxers' irresponsible misinformation ignores those with the most to lose by not vaccinating: the poorest and most vulnerable, who risk dying or sliding into medical impoverishment if they or their loved ones get sick. For much of the world's population, vaccination means inoculation against poverty.

How to Govern the New Digital Domain
Oscar Jonsson (Project Syndicate) Oct 20, 2020
For too long, and on too many issues, policymakers have left the governance of technology in the hands of those who design it. Governments face three imperatives in mitigating the digital economy's negative effects, and they can no longer afford to stand by.

Managing post-Covid sovereign debts in the euro area
Stefano Micossi (VoxEU) Oct 20, 2020
As the world comes to terms with a post-Covid reality, the euro area must confront its growing fiscal and sovereign debts. This column argues that common euro area policies are justified in order to address sovereign debt externalities and risks to financial stability. It considers a mechanism involving large transfers of euro area sovereigns from the ECB to the ESM as a possible way forward.

Herd Immunity: Why Capex Is Holding Up, Part II
Tim Quinlan, Sarah House, and Shannon Seery (WF Econ Group) Oct 20, 2020
In this report, we turn our attention to the fundamental drivers of capex and what to expect beyond the pandemic-induced activity. We look to capex plans, financing ability and how firms have recently deployed funds to gauge what is to come for future investment.

The EU's fiscal progress needs a political anchor
FT View Oct 21, 2020
Common borrowing and spending muscle means reform of budget rules cannot wait.

The threat of long economic Covid looms
Martin Wolf (FT) Oct 21, 2020
Governments need to focus on the cost of inaction, not the cost of supporting economies.

Change intra-EU trade to counter US currency war
Melvyn Krauss (FT) Oct 21, 2020
There is a way to protect the bloc from beggar-my-neighbour policies.

The Trump 'Jobs Boom' Is a Convenient Myth
Alan S. Blinder (WSJ) Oct 21, 2020
Voters credit him for the pre-Covid economy, but unemployment declined steadily starting in 2010.

How Long Can the Fed Keep This Time Bomb from Exploding?
Pavel Mordasov (Mises Wire) Oct 21, 2020
Although the Fed insists otherwise, the central bank really has no tools left except money creation, and the Fed will keep printing money in a panicky attempt to prevent a financial collapse.

Engines Not Yet in Sync: A Multispeed Recovery in Asia
Jonathan D. Ostry (IMF) Oct 21, 2020
To enable structural change, Asia's economic policies should be focused on the world of tomorrow, not yesterday.

Europe Needs to Maintain Strong Policy Support to Sustain the Recovery
Alfred Kammer (IMF) Oct 21, 2020
The economic impact of the pandemic has been enormous.

The impact of COVID-19 on global extreme poverty
Homi Kharas (Brookings) Oct 21, 2020
How has COVID-19 affected extreme income poverty across the world? We may never know the full answer. Poverty data is typically drawn from household surveys, and for obvious reasons it is nigh impossible to conduct proper surveys under current conditions in many countries. But we do know that the strongest driver of poverty is economic growth and for this indicator, the International Monetary Fund has just produced new estimates for 2020 and beyond from which inferences can be made as to the impact on poverty. Interested readers can access poverty estimates for every country in the world on the World Poverty Clock, a tool with which I am associated.

Asia's data frontier—Modeling poverty from space
Anna Marie Fernando, Arturo Martinez Jr., Joseph Bulan, and Katharina Fenz (Brookings) Oct 21, 2020
The research team trained the algorithm to predict the intensity of night lights based on daytime satellite imagery, as studies show that nighttime light intensity is a reasonable proxy for the level of economic activity. The goal was to get a model that can recognize features in daytime satellite imagery—such as street patterns, building density, and roofs—that lead to high levels of luminosity at night. The researchers then used aggregates of those features to analyze their relationship with poverty rates at those levels, which represent the most granular level of our input data. When a relationship was established, it was possible to predict the prevalence of poverty for an area as small as 4 kilometers by 4 kilometers.

Will the Bank of Canada Follow the Fed Into a New Inflation Targeting Regime?
Vinayak Seshasayee and Allison Boxer (PIMCO) Oct 21, 2020
For the first time since 2001, the Bank of Canada (BOC) is seriously considering changing its existing mandate in an effort to better achieve its long-term inflation goals and preempt disinflationary risks to the economy. We expect to see qualitative adjustments to the BOC's inflation targeting framework that are likely to result in a stronger commitment to reflation, and therefore a more measured and patient approach to tightening policy than we saw coming out of the global financial crisis. In our view, investors could potentially benefit from these changes by overweighting intermediate-term and real return bonds as alternatives to longer-term nominal bonds, and optimizing their portfolios to capture price appreciation through yield curve roll-down.

Examining the Global Outlook and Long-Term Disruptors
PIMCO Oct 21, 2020
China recently introduced its new "dual circulation” economic development model, which seeks to reduce reliance on exports and foreign technology, strengthen domestic supply chains, and look to the domestic market as the main driver of China's growth. In the U.S., the longer-term outlook is for a high level of fiscal activity under any outcome of the November elections, but especially in the case of a Democratic sweep. In monetary policy, the Federal Reserve recently announced two changes to its policy framework: a flexible average inflation targeting approach, in which shortfalls from the inflation target will be made up by overshoots; and a commitment not to tighten policy because of low unemployment alone – inflation or other risks would need to be present as well. The decision to embark on pan-European fiscal investments to stimulate the economy demonstrates that when it is a question of survival, Europeans will not hesitate to step up and work together. In investor sentiment, many CEOs of major U.S. corporations have a relatively sober view of how long the recovery will take, but there is no sense of pessimism about getting there eventually, and no real change in long-term risk appetite.

As China recovers from the pandemic, will zombie firms return?
Tianlei Huang (PIIE) Oct 21, 2020
The Chinese economy is on track to achieve 2 to 3 percent growth in 2020, which makes China the only major country expected to expand in the wake of the COVID-19 pandemic. But the recovery comes with a price. The problem of zombie companies that China has been nibbling at for years has become bigger, posing a threat to the sustainability of the recovery. To avoid further damages to productivity and to improve resource allocation, Chinese policymakers need to shift focus from mere protection to restructuring and reallocation of resources as the economy enters recovery mode.

Airlines Will Face a Reckoning Like the Banks Did
Chris Bryant (Bloomberg View) Oct 21, 2020
When the pandemic is over, travel groups should be forced to rethink their dependence on customer prepayments.

One Million Air Travelers Is a Good Sign for the Economy
Conor Sen (Bloomberg View) Oct 21, 2020
If passenger flight traffic can avoid backsliding as the virus surges, then a winter recession might be avoidable, too.

China Has a Few Things to Teach the U.S. Economy
Noah Smith (Bloomberg View) Oct 21, 2020
Fiscal austerity is a relic of the past. Time to spend.

Trump's Crony Capitalism
Anne O. Krueger (Project Syndicate) Oct 21, 2020
During his first presidential campaign four years ago, Donald Trump promised to change the way America does business. He has kept that promise: Now more than ever, America resembles the kind of crony-capitalist system that one more commonly associates with developing and post-communist countries.

America's Multilateralism Election
Javier Solana (Project Syndicate) Oct 21, 2020
Much is at stake for both America and the world in the US presidential election on November 3. Although a Joe Biden victory would not be a panacea, it would allow the United States to renew abandoned commitments, approach its Western allies as true partners and friends, and rediscover a more rational foreign policy.

Inequality and Its Discontents
Michael J. Boskin (Project Syndicate) Oct 21, 2020
Former US President John F. Kennedy famously proclaimed that "a rising tide lifts all boats.” In a growing economy, the absolute well-being of those near the top and the bottom are positively correlated, so the most important policies to pursue are those that promote strong economic growth and full employment.

Africa's WTO Moment
Kingsley Chiedu Moghalu (Project Syndicate) Oct 21, 2020
If she is chosen to head the World Trade Organization, former Nigerian finance minister Ngozi Okonjo-Iweala, an experienced development economist, would make a broken institution relevant again. She has the gravitas to build bridges between the US and China, on the one hand, and between the WTO and Africa, on the other.

A Modest Hope for the Post-Trump World Order
Ana Palacio (Project Syndicate) Oct 21, 2020
As consequential as the upcoming US election is, the relentless hype has fueled expectations that it must be followed by some grand or revolutionary transformation. A far more plausible hope is that, once the dust settles, international relations gets back to basics.

The Fed's new policy framework: A major improvement but more can be done
Gauti Eggertsson, Sergey Egiev, Alessandro Lin, Josef Platzer, and Luca Riva (VoxEU) Oct 21, 2020
The Federal Reserve has recently announced a new policy strategy of average inflation targeting. The column argues that while this is unambiguously a positive step, it may not – under all circumstances – subscribe to a sufficiently aggressive make-up strategy when the zero lower bound is binding. This is particularly likely to be the case if episodes of high unemployment are not associated with material fall in inflation, a scenario that seems empirically relevant. The authors suggest alternatives that could do better, such as a targeting rule that treats the dual objective of the Federal Reserve in a symmetric way, or one that aims at minimising cumulative deviation of nominal GDP from trend.

Quantitative easing policies and exchange rates
Luca Dedola, Georgios Georgiadis, Johannes Gräb, and Arnaud Mehl (VoxEU) Oct 21, 2020
Since the onset of the Global Crisis in 2008, central banks around the world have rolled out a broad array of quantitative easing measures, resulting in dramatic expansions of their balance sheets. This column reveals that that these policies have had large and persistent effects on the US/dollar exchange rate, mainly through shifts in exchange rate risk and short-term interest rates between the two currencies. Changes in expectations about the future monetary policy stance also affect the response of the dollar/euro exchange rate to quantitative easing.

The Great Depression, banking crises, and Keynes' paradox of thrift
Victor Degorce and Eric Monnet (VoxEU) Oct 21, 2020
The surge in savings following the 2008-2009 Global Crisis and the recent pandemic have rekindled the interest of economists and policymakers in the paradox of thrift, formulated by Keynes in the 1930s. Subsequent research on the Great Depression of the 1930s, however, has not addressed the link between precautionary savings and growth. Using data on deposits in savings institutions of 22 countries, this column studies the fate of savings during the Great Depression and shows that Keynes' intuition was right. Banking crises had an impact on economic growth not only through the direct lending channel, but also indirectly through an increase in precautionary savings. This bears important lessons for today.

Abenomics Can Flourish Without Abe
William Sposato (FP) Oct 21, 2020
Japan's new prime minister has the skills to take on the country's bureaucrats.

Bidenomics can preserve support for capitalism
FT View Oct 22, 2020
No radical, the Democrat wants to save markets by softening them.

The case against Modern Monetary Theory
Stephen King (FT) Oct 22, 2020
The deficit reality is that we are in effect borrowing from our collective economic futures.

Beijing's Covid Recovery Isn't So Enviable
Joseph C. Sternberg (WSJ) Oct 22, 2020
China touts GDP growth but faces a hard call: rest on a fragile economy or try for a difficult transition?

Are we on track to end global hunger?
Matt Cooper, Homi Kharas, and Benjamin Müller (Brookings) Oct 22, 2020
A global picture of hunger.

Who's afraid of zombie firms?
Joseph E. Gagnon (PIIE) Oct 22, 2020
The COVID-19 pandemic has turned many profitable US businesses into money-losers that can stay afloat only because of abundant credit, in part reflecting emergency lending programs of the Federal Reserve and Treasury. Some economists are concerned that these "zombie” firms will drain resources from the healthy parts of the US economy, slow the recovery, and inhibit productivity growth. These fears are fundamentally misguided. Zombies are a consequence of a weak economy, not a cause. Policy actions to kill zombies, by forcing them to shut down permanently, dismiss employees and pay off creditors, risk deepening the current recession, turning it into a depression.

US fiscal stimulus helped boost spending in low-income areas early in the pandemic
Jason Furman (PIIE) Oct 22, 2020
Consumption in low-income communities fell by a smaller amount and recovered faster than in middle- and high-income ZIP codes during the pandemic. While the initial economic shock of the coronavirus was regressive, hitting low-income communities the hardest, consumption in low-income ZIP codes has since returned to pre-pandemic levels, supported by a progressive fiscal response.

Sub-Saharan Africa's Difficult Road to Recovery
Abebe Aemro Selassie (IMF) Oct 22, 2020
Policymakers in sub-Saharan Africa now face the added challenge of rekindling their economies with fewer resources and more difficult choices.

Pandemic Persistence Clouds Latin America and Caribbean Recovery
Samuel Pienknagura, Jorge Roldós, and Alejandro Werner (IMF) Oct 22, 2020
More people working in activities that require close physical proximity, and less teleworking have contributed to Latin America and Caribbean strong slowdown.

A Weakening U.S. Dollar Is Still the Preeminent Currency
Brian Chappatta (Bloomberg View) Oct 22, 2020
The greenback has depreciated 11% from its March peak, but it has a long way to go before it gives up its reserve status.

The AIIB's Transparency Deficit
Korinna Horta (Project Syndicate) Oct 22, 2020
Transparency and public participation are paramount in mitigating the environmental and social risks of large-scale infrastructure projects. But the Beijing-based Asian Infrastructure Investment Bank is not heeding the message, even as the climate emergency and irreversible biodiversity loss reach critical levels.

Pursuing inclusive growth
João Tovar Jalles and Luiz de Mello (VoxEU) Oct 22, 2020
Widening income disparities and slow productivity growth in many countries have rekindled interest in the policies that can deliver strong and equitable growth in output and living standards. This column presents a chronology of inclusive growth episodes, defined as increases in GDP per capita without a concomitant deterioration in the distribution of household disposable income. These episodes are more likely to occur where human capital is high, tax-benefit systems are more redistributive, productivity grows more rapidly, and labour force participation is high. Trade openness and a range of institutional factors, including political system durability and electoral regimes, also matter.

Words versus deeds: How central banks manage expectations
Pawel Baranowski, Wirginia Doryn, Tomasz Lyziak, and Ewa Stanislawska (VoxEU) Oct 22, 2020
To achieve macroeconomic stabilisation, central banks attempt to manage the expectations of the private sector. Decisions on short-term interest rates and communication can both impact expectations, but communication is especially important under the effective lower bound, when the room to move interest rates down is limited. Using data from Poland, this column shows that while monetary policy shapes the expectations of the private sector through both communication and interest rate decisions, the impact can differ depending on the variable forecasted and on the forecasting horizon.

Green zones: A safe path towards free movement and a lasting recovery
Bary Pradelski and Miquel Oliu-Barton (VoxEU) Oct 22, 2020
On 13 October 2020, EU member states agreed to common criteria for mapping epidemiological risk and to implement non-discriminatory travel restrictions. The strategy agrees in its key aspects with the concept of green-zoning introduced in the original version of this column, which was published in April and circulated to European decision makers. It is based on four principles: (1) divide each country into smaller zones; (2) label zones green if the virus is under control, and red otherwise; (3) adopt colour-dependent public health measures; (4) allow free travel between green zones, but control other travel. This approach is aimed at curbing the spread of the virus while ensuring lasting economic recovery.

Economics for the people
Dirk Philipsen (Aeon) Oct 22, 2020
Against the capitalist creeds of scarcity and self-interest, a plan for humanity's shared flourishing is finally coming into view

Has hunger swelled?
Scott Winship and Angela Rachidi (AEI) Oct 22, 2020
Estimates suggesting that food hardship among US households has doubled or tripled due to the pandemic suffer from data problems that make it challenging to draw valid comparisons. More likely, existing survey data suggest that food insufficiency has increased by something closer to 2 or 3 percentage points and is perhaps a bit higher than during the Great Recession. Evidence on poverty rates also suggests more modest increases in hardship. Policymakers should continue economic relief efforts to avoid larger increases in food hardship among US households, but they should also avoid overcorrecting for a food hardship problem that appears less severe than originally reported.

Double standards on corruption bode ill for the EU
Tony Barber (FT) Oct 23, 2020
Centre-right parties protect Bulgaria despite widespread graft and worries about €750bn fund.

The fallacy of ESG investing
Robert Armstrong (FT) Oct 23, 2020
Win-win arguments promoting both bigger profits and better social returns are illogical.

Don't be blind to China's rise in a changing world
Ray Dalio (FT) Oct 23, 2020
Anti-Beijing bias has blinded too many for too long to opportunities.

People Fear a Market Crash More Than They Have in Years
Robert J. Shiller (NYT) Oct 23, 2020
Stocks could well rise despite investor worries, the economist Robert Shiller says, but this is a high-risk moment.

Suga launches charm offensive in Southeast Asia
Richard Javad Heydarian (AT) Oct 23, 2020
In a sign of Southeast Asia's growing strategic importance, Japan's newly-elected Prime Minister Yoshihide Suga chose the region as his first foreign destination. This marked the second time in the past decade that a newly-elected Japanese leader chose Southeast Asia as his maiden destination.

Emerging and Frontier Markets: Policy Tools in Times of Financial Stress
Dimitris Drakopoulos, Rohit Goel, Fabio Natalucci, and Evan Papageorgiou (IMF) Oct 23, 2020
Asset purchases may be suitable for some central banks, depending on the market conditions they face.

Tutoring Shouldn't Just Be for the Middle Class
Therese Raphael (Bloomberg View) Oct 23, 2020
The U.K. is embarking on an education experiment we should all watch closely. A national tutoring service could be a game changer for social mobility.

Is Europe Headed for a Fiscal Union?
Ferdinando Giugliano (Bloomberg View) Oct 23, 2020
Despite the excitement about the EU's pandemic bonds, the political obstacles remain daunting.

Recovery and Renewal at the UN
Madeleine Albright and Ibrahim Gambari (Project Syndicate) Oct 23, 2020
Rising nationalism raises a significant risk that the UN system's structure and institutions, essential but in need of repair and rejuvenation, may instead be left to decline, decay, and even collapse. Such an outcome would be tragic, not just for those institutions but for all of humanity.

The Everlasting Mao
Rana Mitter (Project Syndicate) Oct 23, 2020
Looming large in recent books about contemporary China is the sheer capaciousness of Maoism. What can an ideology that has come to mean so many things to so many people tell us about the political trajectory of the world's new superpower?

Improving management through worker feedback: Auto-manufacturing in China
Jing Cai and Shing-Yi Wang (VoxDev) Oct 23, 2020
Letting workers provide feedback on their managers leads to significant reductions in worker turnover and increases in team productivity.

Internationalising the euro in the age of COVID-19
Angela Capolongo, Barry Eichengreen, and Daniel Gros (VoxEU) Oct 23, 2020
Seeking to internationalise the euro is now an official policy of EU institutions. But a constraint on wider use of the euro, by central bank reserve managers in particular, is the shortage of safe euro assets – a problem that is being made worse by the ECB's asset purchase program. This column proposes a solution to this problem: issuance by the ECB of its own certificates of deposit.

China Economic Update and Outlook
Brendan McKenna (WF Econ Group) Oct 23, 2020
China continues to lead the world in the containment of COVID as new confirmed cases are minimal. This apparent success can likely be attributed to early lockdown protocols, significant testing and other healthcare procedures designed to mitigate the spread of COVID, allowing for the economy to re-open faster than expected.

Global bond markets have turned topsy-turvy
Michael Mackenzie (FT) Oct 24, 2020
Deluge of central bank funding upends typical market reaction to economic downturns.

Short-sellers step up scrutiny of ESG stocks
Billy Nauman (FT) Oct 24, 2020
Funds on the prowl for companies where investors have overlooked flaws and fraud in the rush to bet on a technology.

In a world mired in recession, China manages a V-shaped recovery
Economist Oct 24, 2020
Its rebound is also starting to look more sustainable.

What Brexit will do to the City of London
Economist Oct 24, 2020
The damage will be noticeable but not disastrous.

The Trump Boom Is Real
Lawrence B. Lindsey (WSJ) Oct 25, 2020
The post-2009 recovery may look continuous, but Trump beat expectations while Obama fell short.

Pension buyouts carry needless credit risks
Jonathan Ford (FT) Oct 25, 2020
Schemes are making ultra-cheap, unsecured, long-term loans to insurers with their members' savings.

Big Oil well placed to accelerate transition to electric vehicles
Alexander Landia (FT) Oct 26, 2020
The ability to manage flexibility in the energy system presents an opportunity for majors.

What the shift on austerity means for markets
Mohamed El-Erian (FT) Oct 26, 2020
Greater dispersion of returns likely for firms and countries as debt and deficits surge.

African debt to China: 'A major drain on the poorest countries'
Jonathan Wheatley and Joseph Cotterill (FT) Oct 26, 2020
The biggest bilateral lender to Africa this century is hesitant on debt relief as crisis reveals fragmented nature of loans.

Rethinking aging societies: Growing young as you get old
Jesús Crespo Cuaresma (Brookings) Oct 26, 2020
65 is already the new 54.

The Post-Pandemic Crisis: What Happens Next?
Frank Vogl (Globalist) Oct 26, 2020
The failure of multilateral strategic decision-making in these COVID times has been led by the Trump Administration and its bizarre attacks on international institutions.

Can China's Covid Recovery Continue?
Anjani Trivedi (Bloomberg View) Oct 26, 2020
Beijing needs to keep money flowing to the small firms that are key to its ambitious five-year plan.

Curb the Brexit Enthusiasm. The Hurdles Are Still High
Lionel Laurent (Bloomberg View) Oct 26, 2020
The technicalities of trade negotiations depend on broad political buy-in. And that's still lacking on both sides of the English Channel.

The Shine Is Coming Off the Boom Stocks of 2020
Conor Sen (Bloomberg View) Oct 26, 2020
The third quarter may mark the turning point for companies that benefited most from pandemic tailwinds.

China Leads Again
Stephen S. Roach (Project Syndicate) Oct 26, 2020
US President Donald Trump wears his recent experience with COVID-19 infection as some perverse badge of courage, rather than as a warning of what may lie ahead. And the adverse economic consequences of his administration's approach to the pandemic could not contrast more sharply with the robust recovery in China.

Biden's Economic Edge
Jeffrey Frankel (Project Syndicate) Oct 26, 2020
Contrary to widespread belief, post-war Democratic US presidents have been significantly better for the American economy than Republicans have. There is every reason to believe that trend will continue if Joe Biden wins on November 3.

A (very) short history of the idea of ending poverty
Martin Ravallion (VoxEU) Oct 26, 2020
At times, 'ending poverty' may seem to be nothing more than a 'symbolic' goal, with little done to achieve the aim. This column provides a short history of the idea of ending poverty as a 'motivational' goal, from the intellectual germ of the modern idea of distributive justice in the late 18th century to the UN's first Sustainable Development Goal of ending "extreme poverty” globally by 2030. It argues that the path to attaining SDG1 calls for some combination of economic growth, especially when fuelled by pro-poor technical progress, and pro-poor redistribution, but huge challenges lie ahead in how to manage the likely tradeoffs between the 'social' and 'environmental' SDGs.

Austerity vs populism tensions overhang LatAm debt markets
Michael Stott (FT) Oct 27, 2020
Clashes in Costa Rica over IMF deal might signal strains elsewhere in the region.

Trump's phase one trade deal with China and the US election
Chad P. Bown (PIIE) Oct 27, 2020
President Donald Trump has staked a claim to success in his trade war with China on his phase one trade agreement of January 2020. In his self-proclaimed "historic" deal, China committed to purchasing an additional $200 billion of American-made goods and services over 2020 and 2021. Trump has even boasted that the deal "could be closer to $300 billion when it finishes."

The Real Winner of the Work-From-Home Economy
Daniel Moss (Bloomberg View) Oct 27, 2020
So long as we're hunkering down at the dining room table, the outlook is bright for South Korea's gadgets.

What Ails Arab Economies Is Older Than Covid-19
Amr Ismail Ahmed Adly (Bloomberg View) Oct 27, 2020
Structural problems predating the pandemic are inflicting disproportionate pain.

The Perils of Meritocracy
Mervyn Allister King (Bloomberg View) Oct 27, 2020
For a divided West, income equality matters — but so too does equality of dignity and respect.

I Ran the Numbers Again. Stocks Are Not the Economy.
Nir Kaissar (Bloomberg View) Oct 27, 2020
Even when using an equal-weight measure for the S&P 500 and not adjusting for inflation, there is no correlation between the market and GDP.

A Rising Deficit Isn't the U.S. Economy's Worst Problem
Noah Smith (Bloomberg View) Oct 27, 2020
Government spending -- on infrastructure, education, research -- is what's needed to speed a recovery.

Financial Markets Are Not Venezuela's Enemy
Francisco Rodriguez (Bloomberg View) Oct 27, 2020
The Guaido administration's loss in a lawsuit over Citgo's assets shows the folly of dragging international investors into the highly polarized conflict of Venezuelan politics.

China's Failing Small Banks Are Becoming a Big Problem
Anjani Trivedi and Shuli Ren (Bloomberg View) Oct 27, 2020
With its ad hoc rescues and bailouts of regional lenders, the country's central bank risks fueling a larger financial crisis.

The US Election's Chaos Quotient
Nouriel Roubini (Project Syndicate) Oct 27, 2020
While hoping for a conclusive outcome on November 3 (or immediately thereafter), market watchers unfortunately must prepare for the worst. After all, US President Donald Trump and the Republicans are not even hiding their plans to steal the election.

A Debt Crisis Is Not Imminent
Terry Chan and Alexandra Dimitrijevic (Project Syndicate) Oct 27, 2020
The short-term economic outlook remains worrying worldwide, particularly for borrowers at the lower end of the credit scale or in the industries hit hardest by COVID-19 restrictions. But a large-scale debt crisis may not be nearly as likely as many fear.

Shenzhen's Game-Changing Reform
Andrew Sheng and Xiao Geng (Project Syndicate) Oct 27, 2020
In an increasingly hostile external environment, sustaining progress on development requires China to adopt an updated approach to its four-decade-long process of "reform and opening up." Shenzhen – the star performer among the first cohort of special economic zones – is the ideal testing ground.

Lessons from Latin America's fallen angel
FT View Oct 28, 2020
Chileans risk fresh disappointment from a new constitution.

US global role at stake in this election
Martin Wolf (FT) Oct 28, 2020
A Trump victory would shatter it, but defeat may only defer that tragic withdrawal.

The precarious global debt picture
Dambisa Moyo (FT) Oct 28, 2020
China's role as an important creditor complicates tackling the vast borrowing triggered by Covid-19.

Why ExxonMobil is sticking with oil as rivals look to a greener future
Derek Brower (FT) Oct 28, 2020
While competitors navigate the shift from fossil fuels to cleaner energy, the US group is boosting production.

A Biden Win Could Renew a Democratic Split on Trade
Ana Swanson (NYT) Oct 28, 2020
Democrats have been unified by their desire to oust President Trump. But if that happens, deep divisions on the issue of trade are likely to reappear.

How Trump handed the global economy to China
William Pesek (AT) Oct 28, 2020
Of all the spin coming from a flailing and desperate Donald Trump administration, the idea China wants Joe Biden to win the White House is the silliest.

The overseas activities of Chinese banks shift up a gear
Economist Oct 28, 2020
In many emerging economies, they are the chief source of cross-border loans.

Southern Europe will regret not taking EU loans now
Jacob Funk Kirkegaard (PIIE) Oct 28, 2020
More than any crisis in recent years, COVID-19 has focused Europe's attention on the need for a unified and collective call to financial action. As a result, the European Central Bank (ECB) unleashed powerful monetary stimulus earlier in 2020, helping member states to finance a big fiscal response, while EU leaders took an unprecedented step toward fiscal integration with a new €750 billion jointly funded facility for investment loans and grants to member states, known as the Next Generation EU project.

Politics, not economics, demands a strengthened international role for the euro
Alicia García-Herrero and Federico Steinberg (Bruegel) Oct 28, 2020
Not just the EU but also other countries, particularly China, need a defence against weaponisation of the dollar.

Growth uncertainty, European Central Bank intervention and the Italian debt
Andrea Consiglio and Stavros Zenios (Bruegel) Oct 28, 2020
European Central Bank intervention provides a buffer against the uncertainty faced by European Union economies in the face of COVID-19. For the time being, this intervention has alleviated concern about Italy's debt, but without it Italy is vulnerable to a debt crisis.

The Fed Is Really Running Out of Firepower
William C Dudley (Bloomberg View) Oct 28, 2020
Central bank officials aren't bluffing when they say that only government spending can rescue the U.S. economy.

That Big GDP Number Won't Be as Big as It Sounds
Justin Fox (Bloomberg View) Oct 28, 2020
A guide to understanding annualized quarterly economic growth percentages, which are reaching new depths and heights this year.

Andy Mukherjee (Bloomberg View) Oct 28, 2020
The Covid-crisis fashion for freely spending money is piling pressure on governments that perhaps can't handle it.

China's Central Bank Needs a Greater Helmsman
Shuli Ren and Anjani Trivedi (Bloomberg View) Oct 28, 2020
Fickle and lacking vision and independence, the People's Bank of China has encouraged risky corporate behavior and helped to make China one of the world's most indebted nations.

Rethinking Resilience in Business
Keryn James and Peter Bakker (Project Syndicate) Oct 28, 2020
COVID-19 is forcing firms to reimagine resilience. Instead of trying to strengthen their ability to resist change, companies must learn how to adapt and adjust if they are to continue to exist as employers, value creators for shareholders, and trusted members (and servants) of communities around the world.

The False Dichotomy of Autocracy and Democracy
Yuen Yuen Ang (Project Syndicate) Oct 28, 2020
Many portray today's Sino-American rivalry as an epic battle between autocracy and democracy, and conclude that authoritarian rule is superior. But such a verdict is simplistic, and even dangerously misleading, for three reasons.

Central bank digital currencies: Drivers, approaches, and technologies
Raphael Auer, Giulio Cornelli, and Jon Frost (VoxEU) Oct 28, 2020
Central bank digital currencies are in the limelight. Yet the motives for issuance and, relatedly, the policy approaches and designs differ. This column surveys the drivers, policy approaches and technical designs, based on a comprehensive and publicly available database. It finds that all Central bank digital currency projects aim to complement cash rather than replace it. Many projects would allow for an important role of the private sector in the payment system.

Belated reforms fail to offset Nigeria's dire economic forecast
Neil Munshi (FT) Oct 29, 2020
Business elite give some credit to president they once scorned as old-style socialist but much work remains.

China turns to domestic demand to power economy
Tom Mitchell and Sun Yu FT) Oct 29, 2020
Xi Jinping's administration will focus on 'self-sufficiency' in a range of technological sectors dominated by the US.

How China is helping exporters around the world
Valentina Romei (FT) Oct 29, 2020
The country has become an important destination for goods during the pandemic.

Climate-conscious venture capitalists are back
Economist Oct 29, 2020
Can they both make money and protect the planet?

The Tax Man and Urban Flight: Fact and Fiction of Outmigration Trends
Sean McCarthy and Tom Schuette (PIMCO) Oct 29, 2020
Conventional wisdom says urban residents will flee cities in droves in response to higher taxes and the COVID-19 pandemic. But will that really come to pass?

How COVID-19 Will Increase Inequality in Emerging Markets and Developing Economies
Gabriela Cugat and Futoshi Narita (IMF) Oct 29, 2020
Policies to prevent decades of hard-won gains from being lost will be critical to ensuring a more equitable and prosperous future beyond the crisis.

The Impasse Over Coronavirus Relief Is Hazardous
Bloomberg View Oct 29, 2020
As cases mount, so do the economic risks.

Sovereign Bonds May Not Save Your Portfolio
Richard Cookson (Bloomberg View) Oct 29, 2020
In a positive correlation world, you should be buying volatility. And leaving a large slug of your money in cash.

The Record Economic Boom Is a Mirage
Nir Kaissar and Timothy L O'Brien (Bloomberg View) Oct 29, 2020
The largest expansion in decades follows the greatest decline on record — and it looks like trouble ahead.

Crises and Contraception
Andrea M. Wojnar (Project Syndicate) Oct 29, 2020
As humanitarian organizations work to provide adequate food, water, and shelter to Mozambique's displaced people, delivering contraceptives may seem to be of secondary importance. But failure to ensure their availability will not only deepen the crisis today; it will prevent Mozambique from reaching its potential tomorrow.

Globalization Needs Rebuilding, Not Just Repair
Jean Pisani-Ferry (Project Syndicate) Oct 29, 2020
If US President Donald Trump is defeated on November 3, there will be no lack of eagerness to erase his international economic legacy. Policymakers should focus on taking care of global public goods, containing the weaponization of economic relations, and making the international system fairer.

Three Global Steps to a Biden Climate Initiative
Shang-Jin Wei (Project Syndicate) Oct 29, 2020
The climate crisis is the greatest threat to humanity's long-term viability. With more sensible US leadership, new policy tools that increase the cost of greenhouse-gas emissions, and stronger incentives to make carbon capture cheaper and more effective, the world will have a fighting chance of survival.

Financial shock transmission in a production network
Banu Demir, Beata Javorcik, Tomasz K. Michalski, and Evren Örs (VoxEU) Oct 29, 2020
Firm-level interconnections have important implications for the propagation of economic shocks and the effectiveness of government policy. This column analyses the effect of a tax policy change on firm-level production chains and performance. Using granular administrative data, it shows that unexpected and non-localised supply shocks propagate downstream through production networks, affecting sales, input usage, and buyer and supplier linkages. In addition, it shows that the effects are amplified in firms facing financial constraints, highlighting the importance of liquidity in the resilience to shocks.

Political connections and informed tradingPolitical connections and informed trading
Ozlem Akin, Christian Fons-Rosen, and José-Luis Peydró (VoxEU) Oct 29, 2020
There are widespread concerns about potentially excessive connections between the financial sector and political institutions. Less is known about the intensity of information flows between the public and private sector. This column examines insider trading surrounding the largest bank bailout in history, the 2008 US Troubled Asset Relief Program. In politically connected banks, insider buying during the pre-TARP period is associated with increases in abnormal returns around bank-specific TARP announcements. Information transmission seems to be a third pillar of the mutually beneficial relationship between finance and politics, possibly allowing bankers to use their political connections for personal gain.

CBDC architectures, the financial system, and the central bank of the future
Raphael Auer and Rainer Böhme (VoxEU) Oct 29, 2020
Major central banks are increasingly considering a digital currency available to general public. But what are the advantages of doing so in the light of generally well working private sector payment solutions? This column discusses the range of proposed central bank digital currency architectures, how they could complement existing payment options, and what they imply for the financial system and central bank of the future.

The effects of the Fed bond market stimulus on firms
Olivier Darmouni and Kerry Siani (VoxEU) Oct 29, 2020
With the spread of COVID-19 and its economic consequences, many firms were in need of increased liquidity. This column documents that instead of relying on bank loans, firms preferred to issue corporate bonds on capital markets. Over 40% of bond issuers left their credit line untouched, and a large share of bond issuance was used to repay existing bank loans. Bond issuance was also used to increase holdings of liquid assets rather than for real investment. This suggests that the V-shaped recovery of bond markets is unlikely to lead to a V-shaped recovery in real activity.

Door Wide Open for December European Central Bank Easing
Nick Bennenbroek and Jen Licis (WF Econ Group) Oct 29, 2020
The European Central Bank (ECB) kept monetary policy unchanged at today's announcement, but its accompanying comments were notably dovish in tone, offering a very clear signal of further easing in December.

Europe Risks a New Economic Downturn as Lockdowns Return
Jack Ewing (NYT) Oct 30, 2020
Record quarterly growth inspires little joy as the threat of a double-dip recession looms.

China's economy set for quantum leap forward
David P. Goldman (AT) Oct 30, 2020
Central Committee meetings of China's Communist Party don't make plans. They reveal plans long in maturation. The four-day Central Committee meeting that ended Tuesday only offered a sketch of a five-year plan centered on high-tech self-sufficiency and a shift towards the domestic market.

China's yuan nowhere near cracking US dollar hegemony
Alicia García-Herrero (Bruegel/Nikkei Asian Review) Oct 30, 2020
For all Beijing's ambitions of cracking the hegemony of the US dollar in the face of Trump administration sanctions, the yuan still has a long way to go.

Governments take steps to save tourism from COVID-19
Simeon Djankov (PIIE) Oct 30, 2020
Locals in popular vacation destinations got a reprieve in 2020 from the ever increasing hordes of tourists, but not the sort they bargained for. Across advanced economies, tourism has collapsed to between a quarter and a third of its 2019 level. Some types of tourism, for example business travel and conventions, have disappeared altogether. With the new spike in COVID-19 infection cases across Europe and many US states, prospects for the winter season are dimming fast.

Trump's Economy Really Was Better Than Obama's
Karl W Smith (Bloomberg View) Oct 30, 2020
At least until the pandemic, the president's unconventional policy got unprecedented results.

In China, Big Tech Isn't the Enemy. It's the Strategy
Tim Culpan (Bloomberg View) Oct 30, 2020
Beijing's five-year plan is determined to ensure the success of domestic technology giants. Foreign firms are on notice.

Antitrust Alone Won't Fix the Innovation Problem
Daron Acemoglu (Project Syndicate) Oct 30, 2020
For all the attention on antitrust enforcement against the biggest US technology companies, the more important issue for the economy concerns the direction of technological change. Ensuring that innovation benefits the many will require a more comprehensive policy approach.

Can Humanity Grow Up?
Toby Ord (Project Syndicate) Oct 30, 2020
With rapid globalization and technological innovation have come profound new risks not just to individuals and countries, but to humanity's survival. The current stage in our history demands an entirely new ethical perspective, one that requires an ability to think in species-level terms.

Macro-financial crises: Impeding the rush for the exit
Patrick Honohan (VoxEU) Oct 30, 2020
With the knock-on financial impact of the Covid pandemic, it is likely that several countries could soon face macro-financial crises, with investors rushing for the exit (as in Lebanon, where a crisis is already well underway). Currency devaluation, capital controls, and bail-in are the main tools available to national financial authorities, but there is no universally agreed playbook. This column contrasts the post-Global Crisis recovery experiences of Cyprus, Iceland, and Ireland – each of them over-banked like Lebanon – and shows how different the mixture of these tools used in handling such country crises have been.

Oil shocks and reversal of political fortunes
Rabah Arezki, Simeon Djankov, Ha Nguyen, and Ivan Yotzov (VoxEU) Oct 30, 2020
Voter behaviour is often said to be determined by self-interest and ideology, but empirical support for the role of ideology is mixed. There is, however, evidence that exogenous shocks can negatively affect incumbents' electoral fortunes. This column explores the effect of oil shocks on electoral outcomes, using a new polling and election data set for 207 elections across 50 democracies. Oil price increases one year before an election systematically lower the odds of incumbents being re-elected. The winning parties are more likely to belong to the opposite end of the political spectrum from the incumbent.

China's Hunger for Seafood Is Now Latin America's Problem
Ryan C. Berg (FP) Oct 30, 2020
Massively in debt to Beijing, countries in the region can't stand up to China to protect their coasts.

The enormous potential of social media to measure human culture
Klaus Desmet, Ignacio Ortuño-Ortin, Ömer Özak, Nick Obradovich, Ignacio Martín, Edmond Awad, Manuel Cebrían, Ruben Cuevas Rumin, Iyad Rahwan, and Ángel Cuevas Rumin (VoxEU) Oct 31, 2020
By allowing us to peer into the lives of billions of people, social media has inadvertently created the world's largest dataset for the measurement of culture. This column argues that by providing quantitative, scalable, high-resolution, and cost-effective measures of revealed cultural distances between populations, it has enormous potential to help social scientists answer some of society's most pressing issues. These include the persistence of ethnic conflict, the growing fragmentation of society, and the fraying of the social fabric. Cultural distances are also essential to our understanding of trade, migration, and investment flows.

Optimal need-based financial aid
Mark Colas, Sebastian Findeisen, and Dominik Sachs (VoxEU) Oct 31, 2020
Need-based financial aid helps underprivileged students in the US attend university. This column combines theoretical and empirical analyses to determine the optimal level of that aid and finds that current aid packages in the US are significantly less need-based than they should be. Not only does need-based financial aid help to reduce inequality, it is also an investment in future tax revenue, making it an optimal subsidy from an efficiency standpoint. In this case, equity and efficiency go hand in hand.

Deviations from covered interest parity: Demand matters
Puriya Abbassi and Falk Bräuning (VoxEU) Oct 31, 2020
The recent and persistent failure of covered interest parity is inconsistent with the standard view of international finance textbooks. Current thinking relates this violation mostly to supply-side effects. This column argues that demand effects associated with banks' management of foreign exchange exposure are also an important but are often overlooked driver. This result has implications for the current policy debate concerning global funding and foreign exchange markets, as well as the important role of the US dollar in international finance and banking.

How to Fix Argentina's Recurrent Debt Crises
Hector Torres (FP) Oct 31, 2020
Why President Fernandez is hoping for Joe Biden to win the U.S. election.