The Bank of England prepares to jump the gun
FT View Nov 1, 2017
The BoE should signal a rate rise is not inevitably the first in a series.
China’s economic input in eastern Europe will bear political fruit
Dalibor Rohac (FT) Nov 1, 2017
European region once so wary of authoritarian regimes needs to ditch illusions about Middle Kingdom.
America Is Not a 'Center-Right Nation'
Eric Levitz (NYT) Nov 1, 2017
In fact, on economic policy, America is a center-left nation.
The Bank of England's Dilemma
Bloomberg View Nov 1, 2017
Britain's future prosperity turns on Brexit, and the BOE can't do much except hold a steady course.
No, Europe Isn't About to Break Up
Leonid Bershidsky (Bloomberg View) Nov 1, 2017
Belgium may be a refuge for Catalan separatists, but it's not splitting up either.
China Bond Bears Better Brace for Disappointment
David Millhouse (Bloomberg View) Nov 1, 2017
Unlike previous bond selloffs, the latest one doesn’t appear to be driven by concerns about domestic interbank liquidity.
The Tool Central Bankers Need Most Now
Jean-Philippe Bouchaud (Bloomberg View) Nov 1, 2017
Computer modelling offers a better tool for monetary policy than the outdated methods currently being used.
You Can't Trust the Usual Gauges on This Economy
Conor Sen (Bloomberg View) Nov 1, 2017
Comparisons with potential GDP show the U.S. overheating. That does not compute.
Europe’s Hard-Core Problem
Harold James (Project Syndicate) Nov 1, 2017
With populism endemic in its periphery, the European Union is clearly in a period of deep uncertainty. If EU leaders are ever going to right the ship, they will need to identify the root cause of today's instability, which is not so much about economics or immigration as it is about de facto Franco-German leadership.
The Curious Case of the Missing Defaults
Carmen Reinhart (Project Syndicate) Nov 1, 2017
Usually, a sudden stop in capital inflows sparks a currency crash, sometimes a banking crisis, and quite often a sovereign default. Why, then, has the worldwide incidence of sovereign defaults in emerging markets risen only modestly?
The Cost of China’s IPO Regulations on the Functional Efficiency of its Financial System
Charles M. C. Lee, Yuanyu Qu and Tao Shen (VoxChina) Nov 1, 2017
In sharp contrast with the market-and-disclosure based system in the US, IPOs in China are subject to strict regulatory rationing and control. We investigate the pricing implications of China’s IPO regulations for its publicly listed companies. We find that these regulations will give rise to significant market frictions with economic consequences for the prices, returns, and even investment decisions of China’s publicly listed companies.
Can Australia’s Economic Luck Hold?
Anthony Fensom (Diplomat) Nov 1, 2017
After 26 years of growth, external shocks could knock the Lucky Country back into recession.
The Top Five Global Economic Challenges
K@W Nov 1, 2017
Our best hope for managing them.
Inflation: Benchmarking
John E. Silvia (WF) Nov 1, 2017
Inflation, measured as the FOMC's PCE deflator, has averaged 2.37 percent since 1982. The series, however, is not mean reverting and is subject to a series of shifts over time.
How Should Governments Address Inequality?
Melissa S. Kearney (FA) Nov 1, 2017
Putting Piketty into practice.
Has Inequality Led to a Crisis for Liberalism?
Jeffrey Edward Green (Current History) Nov 1, 2017
The growing wealth gap has eroded support for liberal democracy by exposing its unfulfilled egalitarian promises. A renewal of civic obligations could be the best defense against creeping plutocracy.
The Liberal International Economic Order on the Brink
Kristen Hopewell (Current History) Nov 1, 2017
What Trump has done so far represents an intensification and deepening of existing patterns of US behavior in the trading system rather than a fundamental change.
EU’s choice: French ambition or German bean-counting
Philip Stephens (FT) Nov 2, 2017
Berlin wanted a strong ally in Paris but is now lukewarm on Macron’s reforms.
Powell as Fed pick may not be the non-event it seems
John Authers (FT) Nov 2, 2017
The new central bank chair’s expertise in regulation could be significant.
Britain has to offer more money for smooth Brexit
Martin Wolf (FT) Nov 2, 2017
Even a one-off payment of €60bn would be only 2.5 per cent of UK GDP.
Trump wants a non-economist to lead the Fed. That could be dangerous.
Scott Sumner (WP) Nov 2, 2017
The Federal Reserve deserves the most qualified experts in monetary policy.
US Trade Policy in Focus as NAFTA Fifth Round, Asia Meetings Approach
Bridges, Volume 21, Number 36 Nov 2, 2017
The coming weeks are slated to be busy ones in US trade policy circles, as negotiators from the three North American Free Trade Agreement (NAFTA) countries prepare for a fifth round of talks in Mexico City, while US President Donald Trump gears up for an Asia trip that is slated to see a series of meetings on trade and economic integration.
RCEP Negotiators Set Groundwork for November Leaders’ Summit
Bridges, Volume 21, Number 36 Nov 2, 2017
The 20th round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) concluded in Incheon, South Korea last week, where delegates sought to build convergence on remaining issues ahead of a pivotal leaders’ meeting in November.
Pacific Alliance, Associate Members Kick Off Free Trade Negotiations
Bridges, Volume 21, Number 36 Nov 2, 2017
The Pacific Alliance met with its incoming “associate members” for the first round of formal free trade negotiations last week in the Colombian city of Cali. The talks aim to confirm Australia, Canada, New Zealand, and Singapore’s status of “associate members” to the Latin American trading coalition, in line with a process announced earlier this year.
US, China Leaders Prepare to Talk Trade at Beijing Meet
Bridges, Volume 21, Number 36 Nov 2, 2017
Trade is expected to be high on the agenda when US President Donald Trump and Chinese President Xi Jinping meet next week during the American leader’s high-profile trip to Asia, with officials from both sides confirming that economic issues will be raised in Beijing.
US, India Look to Next Steps in Trade, Economic Relationship
Bridges, Volume 21, Number 36 Nov 2, 2017
US and Indian officials debated ways to improve market access, address the movement of skilled professionals, and deepen their overall economic and trading ties last week during the Trade Policy Forum in Washington.
Xi Faces Dilemma Over China's Growing Debt
Richard N. Haass (Time) Nov 2, 2017
China is "filling some of the strategic space left vacant by a United States that is increasingly disinterested in trade pacts and global leadership." But "economic growth has slowed" and "Chinese foreign policy also faces hurdles."
The Powell Fed: Continuity in Monetary Policy
Richard Clarida (PIMCO) Nov 2, 2017
We believe Jerome Powell is a smart choice for Fed chair.
For Business, India's Gotten a Bit Easier
Mihir Sharma (Bloomberg View) Nov 2, 2017
But gaming the rankings isn't good enough.
Next Fed Chair Will Contend With a Slow-Growth Economy
Timothy A Duy (Bloomberg View) Nov 2, 2017
The central bank will have to tighten policy enough to settle the economy into full employment, but not so much that it trips into recession.
Powell Brings Continuity and Experience
Mohamed Aly El-Erian (Bloomberg View) Nov 2, 2017
He will continue the Fed's policy of stepping back from unconventional monetary policies.
Get Used to These Higher Oil Prices
Jason M Schenker (Bloomberg View) Nov 2, 2017
Rising demand and falling inventory are not just a U.S. phenomenon.
Nothing Natural About the Natural Rate of Unemployment
Edmund S. Phelps (Project Syndicate) Nov 2, 2017
With unemployment reaching very low levels in major economies, despite low – and slowly rising – inflation, it's time for central banks to rethink their reliance on the so-called natural rate. No numerical target for this rate can serve as an anchor for monetary policy.
The US Plutocracy’s War on Sustainable Development
Jeffrey D. Sachs (Project Syndicate) Nov 2, 2017
Billionaire US plutocrats such as Charles and David Koch, Robert Mercer, and Sheldon Adelson have long played their politics for personal financial gain – even if it means boosting inequality at home and blocking sustainable development worldwide. To stop them, US citizens will need to regain the upper hand in electoral politics.
Donald Trump’s Federal Reserve
Kenneth Rogoff (Project Syndicate) Nov 2, 2017
Jerome Powell, US President Donald Trump's pick to succeed Janet Yellen as Fed Chair, will face some extraordinary challenges at the outset of his five-year term. But the greatest challenge of all will be to stay out of Trump's shadow and uphold the Fed's independence.
Big Tech Meets Big Government
Mohamed A. El-Erian (Project Syndicate) Nov 2, 2017
In an ideal world, major tech companies would recognize and adjust to their growing systemic importance in step with external actors, including governments and consumers, thereby striking the right balance between innovation, consumer benefits and protection, and national security. But this is not an ideal world.
Why interest rate decisions are ambiguous
Stephen King (FT) Nov 3, 2017
Central bankers do not know what determines inflation, though few will admit it.
Party On! The Central Bank Put Isn't Going Away
Komal S Sri-Kumar (Bloomberg View) Nov 3, 2017
Decision makers in developed countries are still in market-boosting mode.
What Does Xi Jinping Want?
Keyu Jin (Project Syndicate) Nov 3, 2017
Xi Jinping has emerged from the recent 19th National Congress as China's most powerful leader since Deng Xiaoping. But power in any political system is a means to an end, and for Xi that end is a smooth transition into modernity that cements the Communist Party's authority and ensures his own legacy as modern China’s most significant leader.
On the role of misallocation in aggregate productivity
Diego Restuccia and Richard Rogerson (VoxDev) Nov 3, 2017
Misallocation, a key cause of productivity disparities across nations, is the result of many factors, making it difficult to isolate policy solutions.
Government financing of R&D
Saul Lach, Zvika Neeman and Mark Schankerman (VoxEU) Nov 3, 2017
Understanding how the design of policy to support R&D influences its effectiveness, and how loan programmes should be optimally designed to maximise welfare, is critical to formulating effective, cost-efficient policies. This column uses mechanism design to analyse the optimal structure of R&D loan programmes. The results suggest that optimal policies should ‘target the middle’, as low-risk projects will be funded by the market and high-risk projects are not likely to generate sufficient social payoff to justify support. Moreover, the optimal policy is likely to differ across technology areas, and between industrialised and emerging economies.
Increase trust to stem the rise of populist movements
Gylfi Zoega (VoxEU) Nov 3, 2017
The vote for Brexit and the election of Trump are just two examples of the recent rise in populism. This column discusses how support for populist parties in Europe is closely correlated with a lack of trust in national parliaments and in the European Parliament. The EU must convince voters that it is acting in their interests and taking their concerns into account. At the same time, a distinction has to be made between decisions that should be taken at the EU level and those that are better left in the hands of the member states.
Black Monday: Thirty years after
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Nov 3, 2017
Black Monday has been referred to as the first contemporary global financial crisis. This column reviews key aspects of the 1987 crash and discusses the subsequent steps taken to improve the resilience of the financial system. It also highlights a key lingering vulnerability – the lack of a mechanism for managing the insolvency of critical payment, clearing, and settlement institutions.
Saudi Arabia Is Betting Its Future on a Desert Megacity
Elizabeth Dickinson (FP) Nov 3, 2017
Can Crown Prince Mohammed bin Salman’s ambitious plans jumpstart social and economic reform, or are they an expensive miscalculation?
As the global economy picks up, inflation is oddly quiescent
Economist Nov 4, 2017
But central banks are beginning to raise interest rates anyway.
The geopolitics of Venezuela’s debt
FT View Nov 5, 2017
Default is unthinkable, restructuring impossible. Moscow may help.
Trump’s zero-sum folly threatens trade in Asia
FT View Nov 6, 2017
The president is in thrall to dangerous misconceptions about deficits.
Eight important days for world trade
Shawn Donnan (FT) Nov 6, 2017
The events of the coming week are likely to have a major influence on global relationships.
Globalisation marches on without Trump
Shawn Donnan (FT) Nov 6, 2017
New wave of trade talks threatens to leave US isolated.
The Russian Revolution: what economic lessons does it reveal?
Sergei Guriev (FT) Nov 6, 2017
Planned socialist alternatives to the market economy do not work
Three Ways to Reduce a Trade Deficit
Caroline Freund (PIIE) Nov 6, 2017
President Trump hates the US trade deficit, and he has made eliminating or reducing large bilateral trade deficits the centerpiece of his trade policies. He thinks that deficits mean the United States is "losing" in global markets because it is buying more goods and services from overseas than it is selling to foreign markets. This interpretation is misguided, but there are reasons to be concerned about the aggregate trade deficit. The main worry is that sustained deficits over an extended period will rack up debt that eventually must be repaid.
Sustaining High Growth in Sub-Saharan Africa
Abebe Aemro Selassie (IMF) Nov 6, 2017
We’ve seen many more episodes of sustained growth accelerations, replacing the episodes of boom and bust. Since 1990, three quarters of the countries in the region have registered at least 10 years of uninterrupted growth, and over one-third of the countries have registered 20 years or more of uninterrupted growth.
The Economics of the Korea-U.S. Free Trade Agreement
Kadee Russ, Deborah Swenson, and Kelly Stangl (EconoFact) Nov 6, 2017
President Donald J. Trump has said he is considering withdrawing from the Korea-U.S. Free Trade Agreement due to an increasing trade deficit with this nation. In October, the countries announced they had agreed on a path to renegotiate aspects of the trade deal, though uncertainty remains regarding how this process will take shape. Key members of Congress, the business community, and the national security community have argued that strong ties with South Korea are not only good for the U.S. economy, but are also important for stability in the region.
Trump and America’s China Problem
Patrick Mendis (Globalist) Nov 6, 2017
While the U.S. President grandstands, the Chinese leadership changes global power dynamics – by stealing a page from American history.
Next Steps in the Macron Revolution
Bloomberg View Nov 6, 2017
The French president has made a good start, but there's a long way to go.
Asia Can Make TPP Work Without the U.S.
Bloomberg View Nov 6, 2017
The region still has much to gain from the Trans-Pacific Partnership.
Bitcoin's Contentious Bid for Legitimacy
Mohamed Aly El-Erian (Bloomberg View) Nov 6, 2017
A price surge further divides true believers from skeptics.
It Takes More Than Fact Checks to Beat Populists
Leonid Bershidsky (Bloomberg View) Nov 6, 2017
Research increasingly shows that even when voters know the facts, they buy a compelling narrative.
Freeing Africa’s Internet
Kizito Byenkya and Alex Humphrey (Project Syndicate) Nov 6, 2017
Last year, the UN Human Rights Council approved a resolution affirming that, “rights that people have offline must also be protected online, in particular freedom of expression.” Although the resolution is not binding, it offers a starting point for ensuring that governments allow citizens to use the Internet as a tool for maximizing political participation.
The Plot Against America’s 99%
Nouriel Roubini (Project Syndicate) Nov 6, 2017
US President Donald Trump, in partnership with congressional Republicans, is pursuing tax cuts that will blow up the fiscal deficit and add to the public debt, while benefiting the rich at the expense of middle- and working-class Americans. Once again, Trump has not hesitated to betray the people he conned into voting for him.
Trump Will Be Haunted by the Ghost of TPP
Phil Levy (FP) Nov 6, 2017
Throwing out a global trade deal has enormous ramifications in Asia.
The origins of the Italian north-south divide
Giovanni Federico, Alessandro Nuvolari and Michelangelo Vasta (VoxEU) Nov 6, 2017
The origins of the Italian north–south economic divide have always been controversial. This column argues that using real wages in the 19th century, rather than output data, sheds new light on this debate. At unification, there was already a significant gap between real wages in the north and continental south, which widened as the north-west industrialised. The main driver of the growth of real wages in this period was human capital formation.
What the West Can Learn from the ASEAN Way
Edgardo Angara (wFR) Nov 6, 2017
The rise of ASEAN shows how consensus-building, more than the rule of the majority, can help nations overcome religious and racial divisions to achieve shared goals. The West, too, can learn from the ASEAN way of musyawarah (consultation) and muafakat (consensus), which has sustained and strengthened the community in the last 50 years.
The Perennial Problem of Predicting Potential
John C. Williams (FRBSF Econ Letter) Nov 6, 2017
Potential output—the maximum amount an economy can produce over the long run—is an important indicator policymakers use to gauge a country’s current economic health and expectations for future growth. However, potential output can’t be observed directly, and estimating it is difficult, even with modern, sophisticated methods. Monetary policymakers are well advised to account for the perennial problem of uncertainty surrounding these estimates in devising and carrying out policy strategies.
Eurozone Inflation Outlook: Implications for ECB Policy
Jay H. Bryson, Azhar Iqbal and Abigail Kinnaman (WF) Nov 6, 2017
The European Central Bank (ECB) has not done a very good job of hitting its inflation target of "below, but close to, 2 percent" over the past few years. If the overall rate of inflation in the Eurozone trends slowly higher in the months ahead as our analysis suggests, then we think the conditions will be in place for the ECB to eventually dial back policy accommodation.
Analysis of the US sugar program
John C. Beghin and Amani Elobeid (AEI) Nov 6, 2017
The US sugar program is a protectionist scheme destined to transfer income to sugar growers and processors at the cost of sugar users and consumers. The losses to consumers and users are large in aggregate for the country, in the order of $2.4–$4 billion. The major recommendation is the total removal of the sugar program’s main components, including tariff-rate quotas, allotments, and sugar loan rates.
Emerging market debt throws up a mystery
Steve Johnson (FT) Nov 7, 2017
Corporate debt is rising but company balance sheets suggest borrowing is falling.
China’s Technology Ambitions Could Upset the Global Trade Order
Janes Perlez, Paul Mozue and Jonathan Ansfield (NYT) Nov 8, 2017
China is gleaning know-how from foreign firms, willing or otherwise, to build the industries of the future, in an effort that worries companies and Washington.
Japan and the IMF: Working Together to Promote Inclusive and Sustainable Growth
Christine Lagarde (IMF) Nov 7, 2017
How Japan can strengthen its partnership with the IMF and how combined experiences can be used to promote more inclusive and sustainable growth.
Reimagining China and Asia
Chas W. Freeman (Globalist) Nov 7, 2017
How are Asian countries responding to the steady erosion of U.S. power in the region? And how is China playing its hand?
A Brexit Glitch That Could Hurt Europe
Bloomberg View Nov 7, 2017
A disorderly departure would make it harder to wind down failing banks.
Are Cryptocurrencies an Asset Class? Yes and No
Aaron Brown (Bloomberg View) Nov 7, 2017
The answer has nothing to do with correlations, trading volume, market cap, projected returns, governance or regulation.
New Technology Should Be Neither Feared Nor Trusted
Noah Smith (Bloomberg View) Nov 7, 2017
A better approach would be to develop and manage it.
Crypto is capital despite Dimon's rant
Brian Caplen (Banker) Nov 7, 2017
JPMorgan CEO Jamie Dimon is among the critics of both Bitcoin and initial coin offerings. But, properly regulated, they can be an effective way to raise capital.
When Climate Leaders Protect Dirty Investments
Nathalie Bernasconi-Osterwalder (Project Syndicate) Nov 7, 2017
In 2016, global spending on oil and gas projects was more than double the total spent on renewables. That imbalance can be addressed only by restructuring the mechanisms, particularly existing trade treaties, that govern how energy investments are made and managed.
The Soviet economy, 1917-1991: Its life and afterlife
Mark Harrison (VoxEU) Nov 7, 2017
Russia’s Soviet era was distinguished not by economic growth or human development, but by the use of the economy to build national power. On the centenary of the Bolshevik revolution of 1917, this column shows that while the education of women and better survival rates of children improved opportunities for many citizens, Soviet Russia was a tough and unequal environment in which to be born, live and grow old. The Soviet economy was designed for the age of mass production and mass armies. That age has gone, but the idea of the Soviet economy lives on, fed by nostalgia and nationalism.
Brazil’s crisis creates an opportunity
Martin Wolf (FT) Nov 8, 2017
The country needs a programme of comprehensive economic and fiscal reform.
Britain’s post-Brexit bind on trade
Alan Beattie (FT) Nov 8, 2017
The UK is likely to find itself squeezed by both the EU and US on regulation.
Modi’s reforms rob India of its economic prowess
Rahul Gandhi (FT) Nov 8, 2017
Demonetisation has wiped out 2% of GDP and ruined the lives of millions of workers.
South Korea’s success reflects core US values
Jamil Anderlini (FT) Nov 8, 2017
Trump should note the country is a beacon of hope for liberal capitalist democracy.
Strains on emerging market currencies begin to build
Roger Blitz (FT) Nov 8, 2017
Concerns around the US Fed’s intentions and EM political headwinds are biting.
Trump Is Ceding Global Leadership to China
Antony J. Blinken (NYT) Nov 8, 2017
If America’s retreat into nationalism, protectionism, unilateralism and xenophobia continues, China’s model could carry the day.
Getting to Yes on a World Bank Recapitalization
Nancy Birdsall (CGD) Nov 8, 2017
World Bank President Jim Kim is hoping the bank’s 189 shareholders will agree to increase the current capital of the bank’s “hard” window sometime in 2018. But the US wants to link any support for a recapitalization to World Bank “graduating” China—and perhaps other member countries with good access to private capital markets who don’t seem to “need” the World Bank. There are sensible arguments on both sides of this divide.
After the Crisis: The Outlook and the Long View
David Lipton (IMF) Nov 8, 2017
I would like to offer some broad perspectives on the following issues: the current macroeconomic outlook nearly a decade after the Global Financial Crisis; structural issues that we see emerging in the advanced economies that may point to low interest rates over the long term; and the policy challenges and transitions that governments and financial institutions may face as a result.
The U.S. and Japan Don’t Have a Trade Problem
Noah Smith (Bloomberg View) Nov 8, 2017
Imbalances have more to do with American borrowing than with Japanese protectionism.
Making the Best of India's Cash Bust
Mihir Sharma (Bloomberg View) Nov 8, 2017
Rather than jousting with critics, the government should focus on making digital transactions easier.
The Emerging-Market Rally Is Really Just About Tech Shares
Nicholas J Colas (Bloomberg View) Nov 8, 2017
How did EM become global market darlings? The answer is not in the old playbook of export-driven growth and rising middle classes.
Russia's Role in Securing Asia's Prosperity
Vladimir Putin (Bloomberg View) Nov 8, 2017
The APEC forum presents an opportunity for greater economic integration.
The Real Risk to the Global Economy
Christopher Smart (Project Syndicate) Nov 8, 2017
One might assume that the brewing crises on the Korean Peninsula and in the Middle East pose a serious threat to the current global economic expansion. But political crises often induce only brief market corrections, whereas gradual shifts in international global institutions can be far more consequential for investor behavior.
Japan’s Demographic Lessons for Europe
Daniel Gros (Project Syndicate) Nov 8, 2017
Contrary to popular belief, Japan has been extraordinarily successful in achieving economic growth, given its rapidly aging population and lack of inflation. For Europe, where the demographic future looks a lot like Japan's past, there is much to be learned from this experience.
Brexit, the four freedoms, and the indivisibility dogma
Wilhelm Kohler and Gernot Müller (VoxEU) Nov 8, 2017
The EU’s position in the Brexit negotiations is based on the premise that the four freedoms of the single market – goods, capital, services, and labour – are indivisible. This column argues that this indivisibility claim has no economic foundations, and that negotiating on this premise risks unnecessary harm. Reintroducing trade barriers will inflict damage on both sides of the Channel. The possibility that abandoning indivisibility may cause harm through cherry picking, or through potential further exits, doesn’t justify a hard Brexit scenario.
China's Economic Future
K@W Nov 8, 2017
Will President Xi Jinping Let Markets Decide?
The small business myth
Benjamin C Waterhouse (Aeon) Nov 8, 2017
Small businesses enjoy an iconic status in modern capitalism, but what do they really contribute to the economy?
Bulgaria is chief candidate to join the euro but there’s a hitch
Mehreen Khan (FT) Nov 9, 2017
Sceptics say single currency membership is more than an exercise in economic box-ticking.
WTO Negotiations: Members Debate New Farm Trade Proposals on Domestic Support, Transparency
Bridges, Volume 21, Number 37 Nov 9, 2017
Over the past fortnight, a series of WTO members have put forward new proposals involving different aspects of the agriculture talks, including on trade-distorting domestic support, public stockholding for food security purposes, and on the quality and enforcement of notification requirements.
Asia-Pacific Trade Meetings Kick Off, as US Leader Meets with Japan, Korea Counterparts
Bridges, Volume 21, Number 37 Nov 9, 2017
US President Donald Trump began his five-nation trip in the Asia-Pacific region this past weekend, starting with a visit to Tokyo to address trade relations and other foreign policy matters with Japanese Prime Minister Shinzo Abe.
Australia PM: EU, TPP-11 Accords Can Help Support Rules-Based Economic System
Bridges, Volume 21, Number 37 Nov 9, 2017
Advancing on trade rule-making in various regional contexts – including negotiating an EU-Australia trade accord and advancing the Trans-Pacific Partnership (TPP-11) process – could play a valuable role in supporting the multilateral trading system, said Australian Prime Minister Malcolm Turnbull last week.
The World Bank Now Has Three Poverty Lines. Why Not Three for Energy?
Todd Moss and Gailyn Portelance (CGD) Nov 9, 2017
The World Bank now has three benchmarks for measuring poverty. The “headline” extreme poverty threshold of $1.90/day will stay, but two new international poverty lines were added for lower middle-income ($3.20/day) and upper middle-income ($5.50/day) countries. While it’s great that the World Bank is bringing a little more nuance to the way we define poverty, it's still a repackaging of Lant Pritchett’s kinky development.
The Thorny Transition from Libor to SOFR
William G. De Leon (PIMCO) Nov 9, 2017
The transition from Libor to SOFR as a benchmark short-term rate needs to be undertaken with tremendous care, and PIMCO would like to help by outlining clear steps for stakeholders across the industry.
Is There Any Way Out of the ECB's Trap?
Daniel Lacalle (Mises Daily) Nov 9, 2017
Mario Draghi knows that maintaining "stimulus" is highly risky — he also knows the alternative could make the eurozone deck of cards collapse.
Trump, Trade and the Art of the Spiel
Timothy L O'Brien (Bloomberg View) Nov 9, 2017
Those White House stories about $250 billion of deals with China? Look in the fiction section.
Supply Shocks Raise Odds of a Fed Mistake
Danielle DiMartino Booth (Bloomberg View) Nov 9, 2017
The low inventories will distort the inflation data.
Germany’s Dangerous Obsession
Jean Pisani-Ferry (Jean Pisani-Ferry) Nov 9, 2017
The European Union's ability to respond to global and internal challenges will depend largely on the governing program that emerges from Germany's ongoing coalition talks. Will the next German government be willing to put fears of unfair EU redistribution to the side, or will it continue to allow those fears to dictate its every action?
The “Trusted-assistant” Loan in Nineteenth Century China
Meng Miao, Guanjie Niu and Thomas Noe (VoxChina) Nov 9, 2017
In this paper, we analyze “trusted-assistant loans,” which were loans issued (typically) by Shanxi Banks during the Qing period to finance newly appointed scholar-officials. Even though creditors lacked legal rights and, in fact, lacked every repayment enforcement mechanism advanced by economic contract theory, repayment rates on these loans were relatively high and they constituted a large and profitable portion of many banks’ loan portfolios. This paper develops a theory of “resource-based” debt contract enforcement that rationalizes repayment and tests the hypothesis of this theory using data from scholar-officials’ diaries and nineteenth century Chinese bank records.
When models fall short: Evidence from Chinese road infrastructure investments
Nathaniel Baum-Snow, Vernon Henderson, Matthew Turner, Qinghua Zhang and Loren Brandt (VoxDev) Nov 9, 2017
Quantitative models may prove to be weak substitutes for direct empirical evidence; for evidence-based policymaking, research technique matters.
The European Commission’s autumn forecast
Marco Buti and Björn Döhring (VoxEU) Nov 9, 2017
The Eurozone economy is growing at its fastest rate in a decade, but the recovery remains incomplete. This column presents the European Commission’s autumn forecast, and derives some policy considerations. Accommodative macroeconomic policies are still appropriate for now. The column also highlights the need for structural policies to increase the potential for growth and help to share the benefits more fairly.
How to measure the global business cycle
Lutz Kilian and Xiaoqing Zhou (VoxEU) Nov 9, 2017
Global commodity prices surged across the board after 2003, with some observers claiming that this reflected a permanent increase in global real economic activity. This column argues that this was a persistent but transitory phenomena tied to rising commodity demand from Asia. It presents evidence of a global economic slowdown since 2011, with low real commodity prices likely to persist.
Survivors in export markets
Tomohiko Inui, Keiko Ito and Daisuke Miyakawa (VoxEU) Nov 9, 2017
Economists have recently tried to identify why some firms survive longer than others in export markets. This column examines the firm-level determinants of the duration of Japanese manufacturing firms’ exporting. It suggests that the degree to which products are differentiated matters for firms’ survivability, and that policies to support R&D activities thus indirectly contribute to increasing firms’ chances of survival in foreign markets.
Inequality and property in Russia, 1905-2016
Filip Novokmet, Thomas Piketty and Gabriel Zucman (VoxEU) Nov 9, 2017
Russia has undergone a dramatic economic and political transformation since the fall of the Soviet Union in 1990-1991, yet the consequences on the distribution of income and wealth are not very well documented and understood. This column attempts to combine the various available data sources in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day.
Temer’s Brazil was mistakenly priced for perfection
Andres Schipani and Jonathan Wheatley (FT) Nov 10, 2017
Investors begin to doubt that the embattled president can get pension reform through.
Bubble territory again – this time might be different
Martin Wolf (FT) Nov 10, 2017
Returns for investors are modest and could be negative over lengthy periods.
Outsiders Can't Clean Up Latin America's Corruption
Mac Margolis (Mac Margolis) Nov 10, 2017
Guatemalans need to pick up the fight against corruption started by a groundbreaking UN commission.
APEC’s moment of truth in Da Nang
Peter Drysdale (EAF) Nov 10, 2017
For APEC to remain relevant and credible, its leaders must confront two big, immediate questions by engaging all of its members constructively.
China Banks Needs More Than 'For Sale' Signs
Christopher Balding (Bloomberg View) Nov 10, 2017
Foreign investors must see less politics and more predictability from the People's Republic.
The Pacific Gets a Little Bigger
Mihir Sharma (Bloomberg View) Nov 10, 2017
Calling Asia the "Indo-Pacific" is more than semantics.
Investors Are Celebrating the Tech Revolution
Tyler Cowen (Bloomberg View) Nov 10, 2017
The economic transformation makes an era of steady growth and low inflation possible.
OPEC Sees a Future With Fewer Cars
Nathaniel Bullard (Bloomberg View) Nov 10, 2017
The oil cartel doesn't explain why, but others point to autonomous vehicles and ride sharing.
China’s New World Order?
Ramesh Thakur (Project Syndicate) Nov 10, 2017
Now that Chinese President Xi Jinping has solidified his position as China’s most powerful leader since Mao Zedong, he will be able to pursue his vision of a China-led international order. But if China wants to enjoy the benefits of regional or even global hegemony in the twenty-first century, it will have to prove itself ready to accept the responsibilities of leadership.
Central Banks in the Dock
Barry Eichengreen (Project Syndicate) Nov 10, 2017
Today, central banks are under attack for missing their inflation targets, failing to maintain financial stability or restore it in transparent ways, and ignoring the global repercussions of their policies. But compromising central bank independence in order to enhance political accountability would be to throw the baby out with the bathwater.
Banking on the Unbanked
Reeta Roy (Project Syndicate) Nov 10, 2017
Despite significant gains in financial inclusion, a quarter of the planet still lacks a bank account or easy access to one. With bank accounts, budding entrepreneurs can establish their creditworthiness and tap responsible, formal lenders, enabling small enterprises to grow and create urgently needed employment, especially for young people.
Population diversity and long-term prosperity
Andrés Rodríguez-Pose and Viola von Berlepsch (VoxEU) Nov 10, 2017
Research on the economic impact of migration on hosts and the migrants themselves has tended to focus on the short term. This column traces the economic impact of population diversity in the US resulting from the Age of Mass Migration of the late 19th and early 20th centuries. High levels of population fractionalisation have had a strong, positive influence on economic development, while high levels of polarisation have undermined development. Despite a stronger effect on income levels in the first 30 years following the initial migration shock, the relationships are found to be extremely long-lasting.
The war on aid: the hidden battle inside Priti Patel's own department
Steve Bloomfield (Prospect) Nov 10, 2017
Through Dfid, Britain has run the world's most ambitious aid policy for 20 years. Now, the right has it in its sights. Can it be saved—and should it be?
Crisis, what crisis? The UK’s sensible centre will prevail
David Goodhart (FT) Nov 11, 2017
Beyond scandals and Brexit wrangles, the health of the system is not in doubt.
The productivity slowdown and labour’s income share
Gene Grossman, Elhanan Helpman, Ezra Oberfield and Thomas Sampson (VoxEU) Nov 11, 2017
Many countries have experienced both a slowdown in aggregate productivity growth and a decline in labour’s share of national income in recent years. This column argues that the productivity slowdown may have caused the decline in labour’s income. Calibrating the authors’ model to US data suggests that a one percentage point decline in the productivity growth rate accounts for between half and all of the observed decline in the US labour share.
Beware post-Brexit dreams of Canada
Nick Clegg (FT) Nov 12, 2017
Adopting the Canadian model would mean erecting new barriers to trade.
TPP after Trump: and then there were 11
FT View Nov 13, 2017
A diminished deal still makes sense, and the US may one day return.
Brexit Britain is at Europe’s mercy
Gideon Rachman (FT) Nov 13, 2017
The likeliest outcome is that the EU imposes a deal on the UK.
Malaysia and Greece the big losers from 30 years of EM equities
Steve Johnson (FT) Nov 13, 2017
Mexican market provides 45-fold real return while Argentina’s real return is 37-fold.
Brazil’s vulnerability is a big opportunity for Chinese investors
Joe Leahy, Andres Schipani and Lucy Hornby (FT) Nov 13, 2017
Is China the saviour or captor of the Latin American country’s assets?
The Commitment to Development Index after 15 Years: Quo Vadis?
Hauke Hillebrandt, Anita Käppeli and Ian Mitchell (CGD) Nov 13, 2017
Think tanks and international organisations publish a lot of indices that rank countries or institutions by their policies. We ourselves here at CGD we have recently published the fifteenth edition of the Commitment to Development Index (CDI), which ranks 27 rich countries by how their policies affect the lives of people in poorer countries. As we embark on a review of the CDI, here we start by looking other across country-level indices to see if the CDI is still distinct.
Trump's Trade Agenda in Asia: It Could Have Been Worse
Gary Clyde Hufbauer and Euijin Jung (PIIE) Nov 13, 2017
President Donald Trump’s 12-day tour of five Asian countries in November featured three themes from his agenda on trade: deals, warnings, and scoldings—directed both at US trade partners and previous US administrations. The tour reinforced his protectionist image, but without protectionist acts.
Europe: Engine for Global Trade, but Should Prepare for Rainy Day
IMF News Nov 13, 2017
All European economies are growing, and the continent has become an engine of global trade. But countries should make some room in their budgets for maneuver so they can keep their economies afloat in worse times.
A Lesson in the Basic Physics of NAFTA Negotiations
Susan Aaronson (CIGI) Nov 13, 2017
Donald Trump is undermining NAFTA with his hard-line rhetoric. In light of this, the Trump administration should remember that trade negotiations often resemble the laws of physics: every action has an equal and opposite reaction.
African Economic Growth Rides on Wireless Rails
Matthew A Winkler (Bloomberg View) Nov 13, 2017
A telecommunications boom is lifting an industry and a continent.
Angela Merkel’s New Germany
Marcel Fratzscher (Project Syndicate) Nov 13, 2017
From welcoming refugees to improving gender equality, German Chancellor Angela Merkel’s talent at bridging social and political divides has made Germany’s transformation into an open society possible. This, not economic policy, has been the greatest achievement of her tenure.
How to Combat Populist Demagogues
Dani Rodrik (Project Syndicate) Nov 13, 2017
We will never know whether greater honesty on the part of mainstream politicians and technocrats would have spared us the rise of nativist demagogues like Donald Trump in the US or Marine Le Pen in France. What is clear is that lack of candor in the past has come at a steep price.
Drivers of pension reform measures in the OECD
Roel Beetsma, Ward Romp and Ron van Maurik (VoxEU) Nov 13, 2017
Population ageing means that many current pension regimes are unsustainable, but the timing of pension reform measures is a political as well as an economic decision. This column uses new data on OECD pension reforms since 1970 to show that their timing has not been driven by projected demographic developments or political change, but by the state of the economy at the time when reforms were legislated. Pension systems have expanded more frequently during booms, and have contracted during economic downturns.
The case for tradable growth
Trump Isn’t Sure If Democracy Is Better Than Autocracy
It’s Not The Economy, Stupid!
Stock Market Valuation and the Macroeconomy
Venezuela: what happens now after official default
Taming the masters of the tech universe
Deeper European integration is desirable but difficult
Venezuela Goes Bust
Yes, Nafta Is Good for My Children
America’s blue-collar revival
Cradles of Capitalism: the City-States of Greece and Italy
Will there be an EU banking union in time for the next crisis?
Europe: From Recovery to Resurgence?
The Brexit Process: A Hard Exit vs. No Exit at All?
Russia's Economy Is Growing With Borrowed Money
The ECB Needs an Inflation Plan, Just in Case
Trump's Trade Swagger Leaves Markets Unimpressed
A Global Plan to End Malaria
China’s Vision for the Next 30 Years
Democracy Beyond the Nation-State
Banking on capital
The Cure for Inequality
Trump and Xi’s Narcissism of Small Differences
Why Xi's Power Grab Will Hurt China's Prospects for Reform
GDP holds economic statistics back from reality
For Zimbabwe, a Coup Isn't the Answer
AI: Intelligent Machines, Smart Policies”: three conference takeaways
The TPP Shouldn't Stop at 11
Forecasts for the New World Order of 2030
Indians Need Tools to Succeed
It's Time to Reevaluate Consensus Thinking in Markets
Saudi Arabia Is Set to Become a Bigger Commodities Player
Free-Market Failure Has Been Greatly Exaggerated
Saudi Arabia’s Populist Temptation
Artificial intelligence and the stability of markets
Venture capital networks: An analysis
Is the Saudi Purge Really About Corruption?
China’s balancing act on debt is becoming trickier
Prepare to bet against bitcoin
British delusions over single market access
Productivity still matters for median worker’s pay
Brexit could shipwreck the British economy
Global wealth: Old story
APEC Summit Wraps Up in Vietnam, Looking to Next Steps for Trade and Integration Agenda
TPP-11 Trade Talks Approach Finish Line Under a New Name
EU Trade Ministers Prepare for MC11, Review FTA Negotiating Progress
Saudi Arabia’s Revolution From Above
Trump Passes Baton of Global Leadership to China’s Xi
Preparing the Workforce for a Fast-Changing World
Why the robot boost is yet to arrive
Myths of the 1 Percent: What Puts People at the Top
There Is No Inflation Puzzle
Central Banks Need to Get Outreach Right
Forward Guidance Hasn't Made Markets Less Volatile
Global Investors Need to See More From China Reforms
The Fed Is Back in Its Pre-Recession Pickle
Saudi Arabia's Expropriations Should Scare Investors
Sovereign Funds Should Sell Off Oil Assets
A Youthful Remedy for Africa’s Youth Unemployment
Saving Somalia Through Debt Relief
China and the United States Are Equals. Now What?
How European integration builds up state capacity
The London Stock Exchange tests good governance
Trump gets the trade problem all wrong
The origins of the Industrial Revolution
Cash is no longer king in a changing Beijing
The Modi magic behind India’s unstoppable rally
China’s investment in Europe
A wobbly Merkel means a weaker Europe
China’s Revealing Spin on the ‘Sharing Economy’
China's Top Economic Risk? Education.
China Looks to the Dumb Money for Its Financial Industry
Does India Deserve the Hype?
Bitcoin Has an Unusual Relationship With Volatility
How to Build on Europe’s Economic Recovery
Poverty Is Also a Psychosocial Problem
The Abnormality of Oil
Inequality Comes to Asia
A Silver Lining for a Hard Brexit
The rise and future of progressive redistribution
Consequences of Brexit for UK inflation and living standards: First evidence
Agricultural markets in ‘rising’ Africa
A New Conundrum in the Bond Market?
Are Markets Really as Calm as they Seem?
Insiders Do More Than Trade in India
A Key Indicator Points to a Strong 2018. That's the Risk.
The Economic Yield Curve Is the One to Watch
Preparing for the Trump Trade Wars
Do Trade Restrictions Work? Lessons From Trade With Japan
Leverage and limited liability: A toxic cocktail
Japan's Slow and Steady Expansion
EM dilemma of top-down worry but bottom-up euphoria
Modi’s India: the high cost of protecting holy cows
Britain’s Brexit Budget Blues
The fourth industrial revolution is upon us
Chinese Corporate Credit: Five Themes for 2018
Dear EU: There's More to Europe Than Paris and Amsterdam
Dollar Hoarding Is a Year-End Risk for Markets
Socialism and Capitalism Work Together
Inconvenient Truths About Migration
The R&D Road to Development
China Caught in the “Middle-Income Trap”?
Populism and time inconsistency
Economic implications of a protectionist US trade policy
Brexit: Battle over Irish border threatens EU-UK trade talks
NAFTA Negotiators Close Fifth Round, Prepare to Set Stage for 2018 Talks
Score One for the Experts as Brexit Costs Grow
China makes inroads in its battle against inequality
The Hidden Wealth of Cities
A Belt and Road for the Americas?
The Next Battle in China’s War on Corruption
Structuring versus restructuring sovereign debts in the Eurozone
Fostering breakthrough entrepreneurship
Americans should be grateful for growth
Can Keir Starmer Save Britain From Brexit?
Latin America's Star Pupil Needs Some New Ideas
The Stock Market Might Be Right, Sort Of
Europe’s New Eastern Question
Putting Europe’s Long-Term Unemployed Back to Work
How Best to Promote Research and Development
Cryptocurrencies Don't Belong in Central Banks
The China Factor in Kenya and Zimbabwe
America’s Supply-Side Scam
Inflation targeting and interest rate procyclicality
How Tax Reform Will Lift the Economy
Who’s Afraid of Index Funds?
Democracy by mistake
Why African rulers are watching Zimbabwe’s ‘soft coup’
Trump, Xi and the siren song of nationalism
Sluggish growth will test voters’ endurance
Brussels rattled as China reaches out to eastern Europe
Forecasts for U.S. Growth Are Too Pessimistic
War of Words Threatens to Upend OPEC Meeting
Maybe China Shouldn't Open Up
The Moral Imperative of Quality Education
Cutting US Corporate Tax Is Worth the Cost
Banks as buyers of last resort for government bonds
Global value chains and Brexit
What's Down with Inflation?
US tax reform: the return of trickle-down economics
Oil traders have message for Opec and Russia: don’t wobble now
India’s big business gamble: taking money from China
Ease of doing business not matched by civic freedoms
Forget Trump and Discover the World
How the Fall of Finance Led to French Tech's Rise
Trump Deserves Some Credit for the Rally in Stocks
A New Grand Coalition for Germany – and Europe
The Global Economy in 2018
£300 million a week: The output cost of the Brexit vote
Diagnosing the Italian disease
House prices and the UK economy
Estimating productivity spillovers among firm networks in Indonesia
What it Takes for Chinese Companies to Succeed Abroad
Geopolitical Uncertainty and the Global Economy
Technology the ‘pain trade’ of 2017 for EM fund managers
Smart money should back solar
Zimbabwe’s chance to follow the China model
Amid Fragile Environment, Ministers Weigh Trade's Future and its Contribution to Sustainability
Examining How to Reinvigorate Talks on Supporting Developing Countries' Role in Global Trade
5 Charts Show the Strength of the Recovery
China's Micro-Lending Mess
India Restores Faith in Capitalism
Europe Needs a Way to Prevent the Next Greek-Style Debt Crisis
Brexit Vexes Ireland, So Ireland Vexes the U.K.
China Needs Tighter Macro-Prudential Regulations to Loosen Capital Controls
Can a Novel U.N. Plan End Poverty?
Why poor countries invest too little in R&D
Hunt for yield drives record sales of long-dated EM debt
The many reasons to be cautious about bitcoin
Anti-pollution drive hits China’s role as global growth engine
Six impossible notions about ‘global Britain’
The Four Faces of China in Central and Eastern Europe
A Young State in an Uncertain World
The Long and Winding Road to a Haircut
How Can the Arab World Avoid the Abyss?
Evidence-Based Policy Mistakes
How India’s internal borders inhibit migration
Nick Lea (VoxDev) Nov 13, 2017
The role of ‘tradable’ goods and services (that is, exports or products that substitute for imports) is probably under-acknowledged in developing country catch-up growth. Since 1980, no developing country has been able to achieve fast sustained growth without fast sustained growth in tradables....
Stephen M. Walt (FP) Nov 13, 2017
America’s president is voluntarily abdicating one of the country’s biggest strategic advantages.
Graham Vanbergen (WFR) Nov 13, 2017
Europe is slowly spinning out of control. The Centrifugal forces of failing economics and politics are causing populism on the peripheral edges of the bloc. The push for power in Hungary and Poland is also coming to life in Austria and the Czech Republic, which in turn provides oxygen to the ever shrill voices of the secessionist movements that have seen Brexit, the Catalonia crisis and Italy’s Lombardy and Veneto regions calling for independence. They are all connected.
Kevin J. Lansing (FRBSF Econ Letter) Nov 13, 2017
History suggests that extreme run-ups in the cyclically adjusted price-earnings ratio are a signal that the stock market may be overvalued. A simple regression model using a small set of macroeconomic explanatory variables can account for most of the run-up in the CAPE ratio since 2009, offering some justification for its current elevated level. The model predicts a modest decline in the ratio over the next decade. All else being equal, such a decline would imply lower stock returns relative to those in recent years when the ratio was rising.
Robin Wigglesworth (FT) Nov 14, 2017
US sanctions looming large and limiting room for manoeuvre with bondholders.
Martin Wolf (FT) Nov 14, 2017
Examining the macroeconomic impact of the world’s most valuable companies.
Tony Barber (FT) Nov 14, 2017
A ‘multi-speed’ union would put the eurozone on firmer footing.
WSJ Nov 14, 2017
Another lesson in the price of lending to a socialist regime.
Patrick J. Ottensmeyer (WSJ) Nov 14, 2017
In answer to Robert Lighthizer’s thought-provoking question, it’s good for the country too.
Economist Nov 14, 2017
Working-class wages are surging at last. But for how long?
Marcia Christoff-Kurapovna (Mises Wire) Nov 14, 2017
Ancient and Renaissance city-states were some of the greatest incubators of economic and entrepreneurial activity.
Brian Caplen (Banker) Nov 14, 2017
With the continuing problems of banks holding large amounts of sovereign bonds as well as high NPL levels, the prospects for completing an EU banking union are poor.
David Lipton (IMF) Nov 14, 2017
A look ahead to policies which can help Europe sustain growth momentum---and to build defenses that will be needed against the next shock.
Jacob Funk Kirkegaard (PIIE) Nov 14, 2017
The increasingly fraught talks over Brexit between the European Union and UK Prime Minister Theresa May’s battered government have reached a critical fork in the road. The most likely course is for Britain to capitulate to most of the EU-27 demands, leading to a hard British exit postponed by a few years.
Leonid Bershidsky (Bloomberg View) Nov 14, 2017
Sustaining even this small level of growth without structural change will be a challenge.
Ferdinando Giugliano (Bloomberg View) Nov 14, 2017
Yes, the risks are remote right now. But investors seem unprepared, meaning calm could easily turn into chaos.
Komal S Sri-Kumar (Bloomberg View) Nov 14, 2017
The problem with his push for bilateralism is that it has no other takers.
Maha Barakat (Project Syndicate) Nov 14, 2017
Every year, illnesses that can be treated with medicines, vaccines, or other means kill some two million children worldwide. Malaria is one of the biggest and most stubborn killers – and also one of the most frustrating, because perhaps no disease better epitomizes the world’s failure to coordinate on public-health threats and solutions.
Zhang Jun (Project Syndicate) Nov 14, 2017
Achieving the lofty development goals China's leaders have set will not be easy. But with a clear development blueprint and a powerful leader whose political clout all but guarantees continued reform, the country seems to be in a strong position to sustain its unprecedented economic success in the coming decades.
Kemal Dervis (Project Syndicate) Nov 14, 2017
According to the Harvard economist Dani Rodrik, it is impossible to have full national sovereignty, democracy, and globalization simultaneously. The concept of a “political trilemma of the world economy” is useful, but it becomes less binding when one takes into account levels of government above and especially below the nation-state.
Yener Altunbas, Simone Manganelli and David Marques-Ibanez (VoxEU) Nov 14, 2017
Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools with additional, borrower-based prudential instruments.
K@W Nov 14, 2017
Nobel winner Muhammad Yunus's vision for a kinder, gentler planet.
Christopher Balding (FP) Nov 14, 2017
The presidents of the United States and China are destined to clash, precisely because their economic worldviews are so similar.
Jude Blanchette (FA) Nov 14, 2017
Good policy will be tough for the "Chairman of Everything".
Diane Coyle (FT) Nov 15, 2017
Improve what is included since the data fail to reflect the real productivity.
Glen Mpani (NYT) Nov 15, 2017
There is evidence this intervention is driven by the self-interest of the military, which makes prospects for economic and democratic reforms bleak.
Clara Young (OECD Insights) Nov 15, 2017
Artificial intelligence can solve the most intractable of puzzles. But with it come many new, possibly more intractable, questions.
Bloomberg View Nov 15, 2017
It seems that the free-trade pact will move forward without the U.S. The bigger it gets, the better.
Daniel Moss (Bloomberg View) Nov 15, 2017
At a global economic gathering in Dubai, the consensus was that by 2030, China will at least rival American power. Will the U.S. even be a player?
Mihir Sharma (Bloomberg View) Nov 15, 2017
The country can't take off until it improves its human capital.
Mark Grant (Bloomberg View) Nov 15, 2017
Oil plays based upon escalating prices is the wrong bet now.
Shelley Goldberg (Bloomberg View) Nov 15, 2017
It's not just all about oil anymore.
Noah Smith (Bloomberg View) Nov 15, 2017
Few things in human history have done so much to reduce absolute poverty.
Ishac Diwan (Project Syndicate) Nov 15, 2017
In the past, political stability in Saudi Arabia rested on three separate deals: within the royal family; between the royal family and the Kingdom’s traditional elites; and between the state and the population. With the sharp fall in oil revenues, this political order has become unsustainable.
Jon Danielsson (VoxEU) Nov 15, 2017
Artificial intelligence is increasingly used to tackle all sorts of problems facing people and societies. This column considers the potential benefits and risks of employing AI in financial markets. While it may well revolutionise risk management and financial supervision, it also threatens to destabilise markets and increase systemic risk.
Sadamori Koujaku and Daisuke Miyakawa (VoxEU) Nov 15, 2017
Venture capital firms use a variety of accumulated resources to inform their investment activities, but do the rely solely on their own resources or do they employ other firms’ resources to complement their own? This column examines the pattern of co-investments among venture capital firms and discusses the economic implications. Past experience of co-investments increases the likelihood of future co-investments among firms when the returns from these past co-investments were high, and also when the jointly invested venture business companies experienced greater growth after an IPO.
Andrew Leber and Christopher Carothers (FA) Nov 15, 2017
Lessons from China.
FT View Nov 16, 2017
The government must hold its nerve, even as economic growth slows.
Gillian Tett (FT) Nov 16, 2017
If the cryptocurrency ceases to be a ringfenced product, the normal rules of investing will apply.
Jean-Claude Piris (FT) Nov 16, 2017
The best it can hope for is a post-Brexit free-trade deal like Canada’s.
Lawrence Summers (FT) Nov 16, 2017
Does productivity growth still benefit typical US workers?
Martin Wolf (FT) Nov 16, 2017
It is absurd to suggest that the UK could withstand the shock of worse market access.
Economist Nov 16, 2017
A new report finds that global wealth rose by 6.4% in the 12 months to June, the fastest pace since 2012. But millennials have a lot of catching up to do. Higher student debts and the difficulty of buying a housing have made it harder for them to save. That disparity might come back to bite baby-boomers. When boomers want to cash in their assets, they may find millennials cannot afford to buy them at current prices.
Bridges, Volume 21, Number 38 Nov 16, 2017
Leaders of the 21 Asia-Pacific Economic Cooperation (APEC) member economies concluded their 25th annual meeting in Da Nang, Vietnam, on 11 November. Preceded by several weeks of technical, thematic, and sectoral officials’ negotiations, business discussions, and a ministerial-level meeting, the final summit aimed at formulating a broad vision for future economic integration in the region.
Bridges, Volume 21, Number 38 Nov 16, 2017
Trade ministers from the 11 remaining Trans-Pacific Partnership (TPP) countries announced last week that they are within striking distance of a plan to bring the trade agreement into force, which they will then be able to submit for signature and domestic ratification.
Bridges, Volume 21, Number 38 Nov 16, 2017
Trade negotiations in the WTO context and with major partners were high on the agenda as European trade ministers met within the EU Foreign Affairs Council last week in Brussels, Belgium. The 10 November meet was meant to review negotiating progress to date, as well as consider the bloc’s approach heading into key events during the final weeks of 2017.
Joschka Fischer (Project Syndicate) Nov 16, 2017
After becoming the heir apparent to the Saudi throne earlier this year, Crown Prince Mohammed bin Salman has quickly consolidated his power and begun to usher in a period of radical change. But as he overhauls the country's domestic and foreign policies, he is also heightening the risk of another conflict in the Middle East.
Nayan Chanda (YaleGlobal) Nov 16, 2017
Xi presents himself as a capable world leader who masters the world’s complex challenges that fail to interest Trump
Joergen Oerstroem Moeller (YaleGlobal) Nov 16, 2017
Educators and business leaders know little about what future jobs will require – and all must prepare to adapt.
Tim Harford (FT) Nov 17, 2017
The benefits of technologies such as self-driving cars will reveal themselves in time.
Jonathan Rothwell (NYT) Nov 17, 2017
Dispelling misconceptions about what's driving income inequality in the U.S.
Joseph E. Gagnon (PIIE) Nov 17, 2017
Some economists are puzzled over why US inflation has remained low while the economy has reached, or even exceeded, potential employment. Commentators have argued that central banks are wrong to place too much faith in the Phillips curve model, in which inflation responds to deviations from potential employment, but the policy conclusions they draw are diametrically opposed.
Ferdinando Giugliano (Bloomberg View) Nov 17, 2017
The public has grown distrustful of technocrats. Better communication could help win them over.
Komal S Sri-Kumar (Bloomberg View) Nov 17, 2017
The policy has not achieved its objective of keeping investors informed about central banks’ intentions.
David Millhouse (Bloomberg View) Nov 17, 2017
The nation is at the point where it can no longer rely on monetary stimulus and fiscal spending to support longer-term growth.
Conor Sen (Bloomberg View) Nov 17, 2017
Officials are confronting a different kind of late-cycle economy, but resorting to the same old toolkit.
Leonid Bershidsky (Bloomberg View) Nov 17, 2017
It follows the path laid out by countries such as Russia and Georgia.
Leonid Bershidsky (Bloomberg View) Nov 17, 2017
Norway's setting a good example for Middle Eastern states with large rainy-day funds.
Meredith Lee (Project Syndicate) Nov 17, 2017
To create enough jobs for its young people, African countries will need to improve education, expand access to financial services, and encourage civic participation, among other measures. But the biggest impact will come when young people are fully empowered to pursue entrepreneurship.
Kevin Watkins (Project Syndicate) Nov 17, 2017
Somalia needs humanitarian aid to stem its short-term suffering, but that cash will not break the country's deadly cycles of drought, hunger, and poverty. To do that, the IMF must forgive Somalia's crushing debt, just as it has for nearly every other heavily indebted poor country.
Robert Daly (ChinaFile) Nov 17, 2017
Donald Trump’s Asia trip was historic in one respect: it belatedly focused American attention on the competition between the United States and China for global primacy. China has risen, the era of uncontested American leadership has ended, and any American with a television set now knows it. It seems we are no longer number one. It’s a tie, for now.
László Bruszt and Nauro Campos (VoxEU) Nov 17, 2017
The many benefits and costs of economic integration are notoriously difficult to pinpoint. This column introduces new institutional measures for 17 EU candidate countries since 1997 to explore whether deep integration helps the build-up of state capacity. Estimates highlight the relationship between judiciary capacity and bureaucratic independence as the key engine behind state capacity-building engendered by the prospect of EU membership.
FT View Nov 18, 2017
As Brexit approaches, a key City institution is wobbling.
Robert J. Samuelson (WP) Nov 19, 2017
Having misdiagnosed the problem of deficits, the president has embraced protectionist solutions.
Leander Heldring, James Robinson and Sebastian Vollmer (VoxEU) Nov 18, 2017
The Industrial Revolution is arguably the most important economic event in world history, and successful industrialisation continues to elude many developing countries today. This column argues that an important driver of industrialisation in England was the development of markets that allowed division of labour, innovation and, ultimately, social change. Institutional change, rather than advantageous geography, is the main driver of successful industrialisation in England.
Tessa Keswick (FT) Nov 20, 2017
The centre of the city is being transformed as Xi Jinping tightens his grip.
Kiran Stacey (FT) Nov 20, 2017
Optimism fuelled by view PM still committed to reforms and popular enough to see them through.
Anders Fogh Rasmussen (FT) Nov 20, 2017
Beijing must know that the system of free and fair trade will be protected from abuse.
Gideon Rachman (FT) Nov 20, 2017
Problems on the continent remain, and the chancellor’s travails will exacerbate them.
Brook Larmer (NYT) Nov 20, 2017
Beijing has fully embraced the concept — but in ways that show just how cynical it can become.
Christopher Balding (Bloomberg View) Nov 20, 2017
Chinese schools are often dismal. Fixing them is the key to long-term growth.
Noah Smith (Bloomberg View) Nov 20, 2017
A slowing economy suggests the sector is under strain and needs help.
Mihir Sharma (Bloomberg View) Nov 20, 2017
International praise is welcome, but curiously timed.
Aaron Brown (Bloomberg View) Nov 20, 2017
Too much hype could be the sign of a cryptocurrency bubble.
Mohamed Aly El-Erian (Bloomberg View) Nov 20, 2017
To be lasting, the improvement needs to be followed by structural changes.
Keetie Roelen (Project Syndicate) Nov 20, 2017
Around the world, the shame felt by those enduring extreme economic hardship can become a trap. Only when policymakers grasp that dignity and self-respect are prerequisites in the struggle against privation – rather than outcomes of its alleviation – will the world have a fighting chance to eradicate poverty in all its forms.
Jim O'Neill (Project Syndicate) Nov 20, 2017
At the 2017 Abu Dhabi Petroleum Exhibition and Conference, the consensus among industry executives was that oil prices will still be around $60 per barrel in November 2018. But there is evidence to suggest that the uptick in global growth and developments in Saudi Arabia will push the price as high as $80 in the meantime.
Lee Jong-Wha (Project Syndicate) Nov 20, 2017
As income inequality becomes increasingly entrenched, it can undermine social cohesion and spur political instability. To avoid such an outcome, Asian countries need to change the rules of the game, providing opportunities for youth, regardless of their background, to ascend the income ladder.
Jacek Rostowski (Project Syndicate) Nov 20, 2017
During a time of American waywardness under US President Donald Trump, the United Kingdom's national security has increasingly come to depend on the European Union as a buffer against Russian revanchism. Ironically, then, the safest form of Brexit might be the one that hurts the most, so long as it leaves behind a stable EU.
Peter Lindert (VoxEU) Nov 20, 2017
There has been a blossoming of research into fiscal incidence by income class. This column combines century-long histories for Britain and South American countries with previous research to offer a global history of government income redistribution. Contrary to some allegations, the shift towards progressivity in government budgets over the last 100 years has not been reversed since the 1970s. The rise in inequality since the 1970s therefore appears to owe nothing to a net shift government redistribution toward the rich.
Holger Breinlich, Elsa Leromain, Dennis Novy and Thomas Sampson (VoxEU) Nov 20, 2017
On 23 June 2016, the UK voted to leave the EU. As soon as the result became clear, sterling depreciated sharply and, since the vote, UK inflation has dramatically increased. This column asks how much of the rise in inflation is due to the referendum. It finds that the referendum result pushed up UK inflation by 1.7 percentage points, which amounts to an annual (and potentially permanent) cost of £404 for the average British household.
Lorenzo Casaburi, Tristan Reed and Brian Dillon (VoxDev) Nov 20, 2017
Recent empirical research on sub-Saharan African agricultural markets paints a cautiously optimistic picture of supply chain performance.
Michael D. Bauer (FRBSF Econ Letter) Nov 20, 2017
When the Federal Reserve raises short-term interest rates, the rates on longer-term Treasuries are generally expected to rise. However, even though the Fed has raised short-term interest rates three times since December 2016 and started reducing its asset holdings, Treasury yields have dropped instead. This decoupling of short-term and long-term rates is reminiscent of the “Greenspan conundrum” of 2004–05. This time, however, evidence suggests compelling explanations—a lower “normal” interest rate, the risk of persistently low inflation, and fiscal and geopolitical uncertainty—may account for the yield curve flattening.
Thorsten Polleit (Mises Wire) Nov 21, 2017
Given its track record, there is little reason to expect that the Fed won’t mess things up this time.
Mihir Sharma (Bloomberg View) Nov 21, 2017
The country's financial markets aren't set up to protect ordinary investors.
Daniel Moss (Bloomberg View) Nov 21, 2017
At some point the Fed may have cause to tap the brakes.
Joseph G Carson (Bloomberg View) Nov 21, 2017
The difference between the federal funds rate and economic growth is unusually wide, consistent with a positive outlook.
Bill Emmott (Project Syndicate) Nov 21, 2017
In the first 11 months of his presidency, Donald Trump has failed to back up his words – or tweets – with action on a variety of fronts. But the rest of the world's governments, and particularly those in Asia and Europe, would be mistaken to assume that he won't follow through on his promised "America First" trade agenda.
Lee Branstetter (EconoFact) Nov 21, 2017
The bilateral trade deficits between the United States and a range of countries, including Japan, Korea and, especially, China, fuel President Trump’s claims that these countries compete unfairly at the expense of American workers. This echoes the 1980s. In the face of unprecedented trade deficits members of the Reagan Administration and its successors tried to use American diplomatic pressure to decrease the trade deficit with Japan using tariffs and quotas on politically sensitive Japanese export industries like cars and motorcycles.
Jean-Pierre Danthine (VoxEU) Nov 21, 2017
There is little doubt that one of the main causes of the Global Crisis was excessive risk-taking by large international financial institutions. This column argues that the combination of very high leverage and limited liability continues to incentivise risky behaviour by bankers. Dealing with this problem requires the alignment of bankers’ incentives with those of society, rather than of shareholders. Deferred compensation in the form of contingent convertibles presents one promising strategy.
Tim Quinlan and Shannon Seery (WF) Nov 21, 2017
The pace of growth in the Japanese economy may not be wildly impressive, but the world's third largest economy has quietly strung together its longest run of uninterrupted growth in 16 years. In this report we break down the numbers from the most-recent quarter and consider what the duration of the cycle means for the Bank of Japan.
Bhanu Baweja (FT) Nov 22, 2017
Macro-micro divide sustains high equity valuations for now but currencies will pay bill
Amy Kazmin (FT) Nov 22, 2017
Laws backed by the ruling Hindu nationalists are wreaking havoc for farmers in the meat, milk and leather markets.
WSJ Nov 22, 2017
The Tories suffer as they adopt Labour-lite income redistribution.
Jim Hoagland (WP) Nov 22, 2017
From Palo Alto to Marrakesh, the world is changing.
Raja Mukherji (PIMCO) Nov 22, 2017
Growth in China’s offshore corporate bond market seems likely to continue in 2018, driven by the financing needs of investment grade state-owned enterprises (SOEs) and private sector companies.
Ferdinando Giugliano (Bloomberg View) Nov 22, 2017
Nothing against Paris and Amsterdam, but the EU could have sent a message by choosing less central capitals for relocating its agencies.
Ben Emons (Bloomberg View) Nov 22, 2017
The effect may be more pronounced this year as tensions around the U.S. debt ceiling and competing tax bills cause the greenback to appreciate.
Noah Smith (Bloomberg View) Nov 22, 2017
Redistribution policies have helped to lift billions of people out of extreme poverty.
Robert Skidelsky (Project Syndicate) Nov 22, 2017
Standard economic theory says that net inward migration, like free trade, benefits the native population after a lag. But recent research has poked large holes in that argument, while the social and political consequences of open national borders similarly suggest the appropriateness of immigration limits.
Bjørn Lomborg (Project Syndicate) Nov 22, 2017
Research and development – into everything from cleaner ovens to preventing family violence – delivers some of the highest social benefits of any form of development intervention. Yet R&D is rarely the highest priority when development aid money is being allocated.
Linda Glawe and Helmut Wagner (VoxChina) Nov 22, 2017
Since 2010–2011, China’s economy has slowed considerably, raising concerns that the country could fall into the so-called “middle-income trap” (MIT). Obviously, an MIT in China would have serious negative consequences not only for the Chinese population but also for the world economy as a whole. We examine whether China is or will be in an MIT by focusing on the empirical MIT definitions and the MIT triggering factors identified in the literature. We show that dependent on the choice of MIT definition, different MIT statements can be derived. Our triggering factor analysis reveals that while China performs quite well regarding its export structure, it must improve human capital accumulation and total factor productivity to avoid falling into an MIT.
Mario Blejer and Piroska Nagy Mohacsi (VoxEU) Nov 22, 2017
Global politics of late has been marked by the rise of anti-elite political movements and anti-establishment leaders. This column analyses the tactics of such populists through the lens of the ‘time inconsistency’ problem – that what is considered a long-term optimal policy today may not be optimal when that future arrives. Populist leaders seek to gain and increase their power by undermining democratic institutions and conventional commitment devices. Several ‘second generation’ institutional commitment devices to counter this are proposed.
Gabriel Felbermayr, Marina Steininger and Erdal Yalcin (VoxEU) Nov 22, 2017
The Trump administration intends to restructure US international trade relations with its major trade partners to correct what it perceives to be unfair trade and establish a ‘level playing field’. This column uses a structurally estimated and simulated trade model to analyse three potential protectionist policies that have been discussed by the administration. The results suggest that the promise to create more jobs and investment in the US through such policies is a fallacy.
Arthur Beesley (FT) Nov 23, 2017
Dublin, rattled by prospect of damaging its €65bn annual trade with its biggest market, could derail negotiations
Bridges, Volume 21, Number 39 Nov 23, 2017
Negotiators from Canada, Mexico, and the US have concluded their fifth round of talks to modernise the North American Free Trade Agreement (NAFTA), the last such meeting of 2017 following an intense negotiating schedule which kicked off in August.
Therese Raphael (Bloomberg View) Nov 23, 2017
The vote to leave the EU is taking an economic toll on Britons, before the separation even begins.
Steve Johnson (FT) Nov 23, 2017
Latin America leads global trend towards greater equality this millennium.
Dag Detter (Project Syndicate) Nov 23, 2017
As the world becomes more urbanized, better budgeting has become a key concern for city leaders everywhere. Unlocking the public value of poorly utilized real estate, for example, or monetizing transportation and utility assets, could and should become core urban strategies.
Luis Alberto Moreno (Project Syndicate) Nov 23, 2017
In a time of global uncertainty, a vision of “made in the Americas” prosperity provides a unifying agenda for the continent. If implemented, the US could reassert its historical leadership among a group of countries that share its fundamental values, as well as an interest in inclusive economic growth and rising living standards.
Andrew Sheng and Xiao Geng (Project Syndicate) Nov 23, 2017
Chinese President Xi Jinping knows well the threat that corruption poses to the authority of the Communist Party of China and the state it controls. But moving beyond Xi's anti-corruption purge to build robust and lasting anti-graft institutions will not be easy, owing to enduring opportunities for bureaucratic capture.
Guido Tabellini (VoxEU) Nov 23, 2017
In the debate on European reforms, a sovereign debt restructuring mechanism for the Eurozone is often proposed. This column argues that such a mechanism is not required. Instead, Eurozone member states should issue GDP-linked bonds, which would enact an implicit seniority structure on their sovereign debt and make the Eurozone more resilient to the next crisis.
Erika Färnstrand Damsgaard, Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson and Helder Vasconcelos (VoxEU) Nov 23, 2017
Most developed economies provide significant subsidies to small businesses to encourage innovation. This column argues that while subsidies to reduce entry costs may increase entrepreneurial entry, they can also lead to a reduction in the likelihood of ‘breakthrough’ inventions. Entry costs, which are incurred when an innovation project is successful, prompt small firms and entrepreneurs to pursue high-risk, high-reward innovations.
FT View Nov 24, 2017
The US economy records more good expansion but not much inflation.
Stephen Castle (NYT) Nov 24, 2017
Labour’s point man on Brexit policy has subtly shifted the party’s strategy on leaving the E.U. Can he go further and change the country’s course, too?
Mac Margolis (Bloomberg View) Nov 24, 2017
Chile can't rely on copper to pull it out of its middle-income funk.
Mark Buchanan (Mark Buchanan) Nov 24, 2017
New research suggests that prices might reflect true value, but only very roughly.
Slawomir Sierakowski and Adam Michnik (Project Syndicate) Nov 24, 2017
The European Union has been shaken by Brexit, Donald Trump’s election in the United States, and now political uncertainty in Germany. But the future of the EU is also being written in Poland, Hungary, Ukraine, and Russia, with profound implications for democratic institutions and regional security.
Alois Stöger and Nicolas Schmit (Project Syndicate) Nov 24, 2017
Across the European Union, millions of people who are willing and able to work have been unemployed for a year or longer, at great cost to social cohesion and political stability. If the EU is serious about stopping the rise of populism, it will need to do more to ensure that labor markets are working for everyone.
Ricardo Hausmann (Project Syndicate) Nov 24, 2017
Clearly, there is something appealing about a start-up-based innovation strategy: it feels democratic, accessible, and so California. But it is definitely not the only way to boost research and development, or even the main way, and it is certainly not the way most major innovations in the US came about during the twentieth century.
Tyler Cowen (Bloomberg View) Nov 24, 2017
The conservative bureaucracies would likely kill all innovation.
Hannah Ryder (Project Syndicate) Nov 24, 2017
As Kenya and Zimbabwe navigate their political futures, much in both countries will no doubt change – one hopes for the better. In any case, their ties with China will be an important metric in assessing their trajectory, and here Zimbabwe may have the advantage.
Stephen S. Roach (Project Syndicate) Nov 24, 2017
Congressional Republicans' proposed tax cuts are no recipe to "make America great again." Lacking in saving, outsize US budget deficits spell nothing but serious trouble ahead on the balance-of-payment and trade fronts.
Andrew Powell (VoxEU) Nov 25, 2017
The recent interest rate rise in the UK occurred despite negative economic news. This is not what conventional inflation-targeting policy would imply. This column argues that recent Latin American experience suggests the theory underlying inflation targeting may need to be reconsidered. Specifically, for small open economies, the role of the exchange rate and inflation expectations should be considered when deciding how to react.
WSJ Nov 26, 2017
We believe the Republican bills could boost GDP 3% to 4% long term by reducing the cost of capital.
Barbara Novick (WSJ) Nov 26, 2017
If passive investing creates market distortions, active managers can win big.
Daniel Treisman (VoxEU) Nov 26, 2017
Most research on the transition to democracy tries to explain why autocrats choose to democratise. Based on two centuries of data on democratisation, this column argues, however, that autocratic rulers overwhelmingly create democracies by mistake. Taking these mistakes into account during analysis may improve the predictive or explanatory power of existing models.
David Pilling (FT) Nov 27, 2017
Liberation parties look to Zanu-PF’s transition for key to prolonging their own power.
Gideon Rachman (FT) Nov 27, 2017
The two rival visions could easily lead to US-China clashes in Asia or in trade.
Janan Ganesh (FT) Nov 27, 2017
Economic distress and appetite for risk can often prime a nation for a turn to ideology.
James Kynge (FT) Nov 27, 2017
Concerns Beijing’s closer ties with EU’s poorer nations will influence bloc’s policies.
Neil Dutta (Bloomberg View) Nov 27, 2017
Those who wait for changes to tax policy to upgrade their estimates for next year are going to end up waiting too long.
Jason M Schenker (Bloomberg View) Nov 27, 2017
Geopolitical tensions could dash traders’ hopes for an agreement to extend oil production cuts.
Michael Pettis (Bloomberg View) Nov 27, 2017
Right now, liberalization might hurt, not help the battle against debt.
Peter Mutharika (Project Syndicate) Nov 27, 2017
Poor countries like Malawi are doing what they can to improve educational quality and access. But there is only so much that a country with modest means can achieve, which is why global leaders, when they meet in Senegal early next year, must recommit to investing in the education of all children.
Martin Feldstein (Project Syndicate) Nov 27, 2017
One of the main criticisms leveled at congressional Republicans' proposal to cut corporate taxes is that a higher budget deficit would amount to an undesirable fiscal stimulus. But with monetary policy turning contractionary, and most experts predicting a US recession in the next five years, stimulus should be welcomed.
Daniel Gros (VoxEU) Nov 27, 2017
A key remaining issue for the completion of the Banking Union is the concentrated exposure of banks in many countries to their own sovereign. This column argues that the belief that banks should be allowed to buy large amounts of their own sovereign so they can stabilise the market in a crisis is mistaken for two reasons: banks are only intermediaries, and banks have higher cost of funding. The overall conclusion is that governments should make it more attractive for households (and other real money investors) to hold government debt directly.
Hylke Vandenbussche, William Connell and Wouter Simons (VoxEU) Nov 27, 2017
Global value networks make it difficult to evaluate the trade impact of Brexit. Using a new model of trade that accounts for the indirect effect of these networks, this column delivers fresh bad news for the UK, and for the rest of Europe. Brexit cuts GDP more, and costs more jobs, if we also consider global value chains. A hard Brexit would destroy four times as much GDP, and four times as many jobs throughout Europe, as a soft Brexit.
Tim Mahedy and Adam Shapiro (FRBSF Econ Letter) Nov 27, 2017
After eight years of economic recovery, inflation remains below the FOMC’s target. Dissecting the underlying price data by spending category reveals that low inflation largely reflects prices that are relatively insensitive to overall economic conditions. Notably, modest increases in health-care prices, which have been held down by mandated cuts to the growth of Medicare payments, have helped moderate overall inflation. Further slow growth in health-care prices is likely to remain a drag on inflation.
Sam Fleming (FT) Nov 28, 2017
The White House claims tax cuts will lead to soaring wages, but many economists say they will have little impact
David Sheppard (FT) Nov 28, 2017
Cutting production has proved successful with inventories falling and prices recovering.
Henny Sender (FT) Nov 28, 2017
Greater leverage comes with a stronger economy and healthier finances.
Mauricio Lazala (FT) Nov 28, 2017
Managing risk goes beyond an assessment of regulation and property rights.
Thomas L. Friedman (NYT) Nov 28, 2017
For instance, India can teach us the power of digitized data.
Pascal-Emmanuel Gobry (Bloomberg View) Nov 28, 2017
After the financial crisis, educated French youth opted for startups instead of conventional job paths.
Gary Shilling (Bloomberg View) Nov 28, 2017
Less regulation is one campaign promise made by the president that is coming true.
Jeffrey D. Sachs (Project Syndicate) Nov 28, 2017
With America AWOL and China ascendant, this is a critical time for Germany and the European Union to provide the world with vision, stability, and global leadership. And that imperative extends to Germany's Christian Democrats and Social Democrats.
Michael Spence (Project Syndicate) Nov 28, 2017
The global economy will confront serious challenges in the months and years ahead, and looming in the background is a mountain of debt that makes markets nervous – and that thus increases the system's vulnerability to destabilizing shocks. Yet the baseline scenario seems to be one of continuity, with no obvious convulsions on the horizon.
Benjamin Born, Gernot Müller, Moritz Schularick and Petr Sedlácek (VoxEU) Nov 28, 2017
It is hard to calculate the current cost of Brexit, because there is no obvious counterfactual. This column calculates the cost by letting a matching algorithm determine which combination of comparison economies best resembles the pre-referendum growth path of the UK economy. The difference in output between the UK economy and its synthetic doppelganger adds up to a loss of 1.3% of GDP, or close to £300 million per week, since the vote took place. This implies a cumulative cost of more than £60 billion by the end of 2018.
Bruno Pellegrino and Luigi Zingales (VoxEU) Nov 28, 2017
Italy stands out among developed countries for its large public debt and chronically low productivity growth. The country’s productivity growth disease cannot be addressed without understanding why aggregate labour productivity abruptly stopped growing around 1995. This column argues that the most likely cause is Italian firms’ non-meritocratic managerial practices, which meant they failed to capitalise on the ICT revolution.
Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon and Ricardo Reis (VoxEU) Nov 28, 2017
The usually buoyant London housing market is currently the weakest performing market in the UK. A majority of leading economists think that the phenomenon of declining prices will ripple out from London to the rest of the UK, according to the latest Centre for Macroeconomics and CEPR survey. Asked whether a widespread weakening of the housing market will slow GDP growth significantly, the experts are more divided. Several point to uncertainty about the eventual Brexit outcome making it very difficult to engage in predictions about house prices and growth; others suggest that lower house prices could be a good thing for the UK economy, especially for young people.
Samuel Bazzi, Amalavoyal Chari, Shanthi Nataraj and Alex Rothenberg (VoxDev) Nov 28, 2017
Clustering of firms in Indonesia only leads to substantial productivity spillovers in a few industries, suggesting the need to review cluster policies.
David De Cremer (WFR) Nov 28, 2017
International expansion is one of the keys to a firm’s success and stability. In this article, the author outlines how Chinese companies can become truly international in reference to the procedures and philosophies in place for one of China’s truly global companies, which is Huawei.
Global Advisory Board (PIMCO) Nov 28, 2017
Ben Bernanke and our panel of world-renowned advisors examine the outlook for global economic growth amid geopolitical shifts.
Steve Johnson (FT) Nov 29, 2017
Underweighting of Alibaba and Tencent means funds underperform.
Fergus Drake (FT) Nov 29, 2017
We are on the verge of a revolutionary transformation able to power the last billion.
David Pilling (FT) Nov 29, 2017
New president Emmerson Mnangagwa can start by welcoming foreign investors.
Bridges, Volume 21, Number 40 Nov 29, 2017
Trade ministers, negotiators, and thousands of business and civil society actors will gather in Buenos Aires, Argentina, for the World Trade Organization’s Eleventh Ministerial Conference (MC11), marking the first time that the global trade body’s highest-level meeting will be held in South America.
Bridges, Volume 21, Number 40 Nov 29, 2017
Members have been debating 10 proposals on special and differential treatment, as part of wider discussions on how to support developing countries' greater integration in global trade.
Noah Smith (Bloomberg View) Nov 29, 2017
Some of the most basic measures have passed pre-recession peaks to reach new highs.
Christopher Balding (Bloomberg View) Nov 29, 2017
Online lenders have serious problems. But banning them would be a mistake.
Mihir Sharma (Bloomberg View) Nov 29, 2017
Handling bankruptcies right is key to reviving the credibility of India Inc.
Ferdinando Giugliano (Bloomberg View) Nov 29, 2017
The euro zone should handle sovereign debt troubles with a combination of accountability and flexibility.
Therese Raphael (Bloomberg View) Nov 29, 2017
These neighbors' trade and border politics are snarling divorce proceedings with Europe.
Ambrogio Cesa-Bianchi, Andrea Ferrero and Alessandro Rebucci (VoxEU) Nov 29, 2017
China is on a path to capital account liberalization. If the renminbi is to become an international reserve currency (e.g. Prasad, 2016), as it has started to and one day will be, China must have an open capital account. But once the capital account is open, the economy will be exposed to gyrations of the global financial cycle (Rey, 2014). This column argues that international credit supply shocks have powerful effects on real and financial variables of the receiving countries, but not all economies are affected similarly, and those that have lower loan-to-value ratios (LTVs) and limits on foreign currency borrowing (FXLs) are less vulnerable. As China lowers controls on capital flows (e.g., Benigno et al., 2016) it should consider tightening domestic macro-prudential policy regulations (e.g., Cesa-Bianchi and Rebucci (2017) to avoid excessive volatility.
Mahmoud Mohieldin (K@W) Nov 29, 2017
Betting on localization of international development.
Xavi Cirera, Edwin A. Goni Pacchioni and William Maloney (VoxEU) Nov 29, 2017
Innovation is widely seen as central to the growth of developing countries, and available evidence suggests that the returns to R&D investment should be extremely high. Yet low-income countries invest very little. This column suggests that this is due to the increasing scarcity of a wide array of factors complementary to innovation, and that this explains the lack of convergence of low-income countries to the technological frontier.
Kate Allen (FT) Nov 30, 2017
Deals for bonds with maturities of 10 years or more tops $500bn this year.
Jean Tirole (FT) Nov 30, 2017
The craze for initial coin offerings ignores financial fundamentals.
Paul Hodges and Daniël de Blocq van Scheltinga (FT) Nov 30, 2017
China is no longer seeking ‘growth at any cost’, with global implications.
Martin Wolf (FT) Nov 30, 2017
The UK is no longer its 19th-century self, but a second-rank power in decline.
Michal Romanowski (YaleGlobal) Nov 30, 2017
With its Belt and Road Initiative, China is regarded as connector, shaper, investor and challenger in Central and Eastern Europe.
Nargis Kassenova (Project Syndicate)( Nov 30, 2017
Since independence, Kazakhstan has benefited considerably from its inclusion in the liberal world order, underwritten by Western – and especially US – leadership. As that order becomes increasingly uncertain, young states like Kazakhstan will have to adjust.
Carmen M. Reinhart (Project Syndicate) Nov 30, 2017
There are significant differences between Puerto Rico and Venezuela regarding the origins of their economic crises, their political systems, their relationship with the US and the rest of the world, and much else. Nonetheless, some notable similarities are likely to emerge as their debt sagas unfold.
Nabil Fahmy (Nabil Fahmy) Nov 30, 2017
The Middle East owes many of its current problems to a long history of foreign invasions, from the Crusades and European colonialism to the proxy wars of the Cold-War era. But Arab leaders who genuinely want to create a brighter future for the region's citizens must recognize that blaming others for the region's malaise will solve nothing.
Kaushik Basu (Project Syndicate) Nov 30, 2017
People’s everyday experiences provide huge amounts of potentially useful information. While a common-sense approach based on individual experience is not the most “scientific,” it should not be dismissed out of hand.
Zovanga Kone, Maggie Y. Liu, Aaditya Mattoo, Caglar Özden and Siddharth Sharma (VoxEU) Nov 30, 2017
Indians, and in particular men seeking education and jobs, display a puzzling reluctance to cross state borders. This column explores the reasons for this surprising migration pattern. A major culprit is India’s system of ‘fragmented entitlements’, whereby welfare benefits are administered at the state level, and state residents get preferential treatment when it comes to higher education and government employment. These administrative rules prevent the more efficient allocation of labour across the country.
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