News & Commentary:

Articles/Commentary

How the Wealthy World Has Failed Poor Countries During the Pandemic
Peter S. Goodman (NYT) Nov 1, 2020
Despite pledges for debt relief and expanded programs, the World Bank and International Monetary Fund have delivered meager aid, say economists.

The real results of Trump's trade tariffs
WP Nov 1, 2020
They have been a bust.

Arab states are loading up on debt
Economist Nov 1, 2020
Big borrowing to cope with covid-19 has not translated into big stimulus.

October Selloff Leaves Few Places to Hide
Mohamed Aly El-Erian (Bloomberg View) Nov 1, 2020
The formula that had been working so well to sustain investment gains is breaking down as threats to the global economy grow and policies become less effective.

China Is Getting Ready for a World Without Trump
Shuli Ren (Bloomberg View) Nov 1, 2020
By removing two key crutches for the yuan, the central bank is preparing for a less volatile world.

Globalisation and the value of domestic highway infrastructure
Taylor Jaworski, Carl Kitchens, and Sergey Nigai (VoxEU) Nov 1, 2020
The interaction between domestic transportation networks, market integration, and globalisation is important for understanding the value of domestic infrastructure investment and weighing these against the substantial costs of building and maintaining domestic roads. Using an endogenous specification of domestic and international trade costs that takes into account the availability of the road network and congestion levels, this column estimates that the total value of the entire US highway system was $619 billion in 2012 dollars, which accounts for 3.9% of US aggregate GDP in 2012. The results suggest that decisions on how much to invest in domestic infrastructure should be made in conjunction with considering how improvements in the domestic transportation networks would affect domestic and international trade as well as distributional consequences for different locations within a country.

Seize and Resist
Thea Riofrancos (Baffler) Nov 1, 2020
The global supply chain is up for grabs.

The Prosperity Hoax
Tom Stevenson (Baffler) Nov 1, 2020
The fact that indigence is produced by—and is a necessary consequence of—our current socioeconomic system is ignored by elites everywhere. What need is there for labor protections or radical reform of the financial system if the current order is ending global poverty?

What the US election could mean for EM investing
Steve Johnson (FT) Nov 2, 2020
If Trump loses there will be a big reallocation to emerging markets.

'Arb-ageddon' risk recedes as deals go through
Sujeet Indap (FT) Nov 2, 2020
M&A transactions thrown into turmoil by Covid defy uncertainties over pricing.

Why manufacturers are not rushing from China to India
Bhim Bhurtel (AT) Nov 2, 2020
Prime Minister Narendra Modi gave an exclusive interview to Economic Times, an Indian English-language business daily, last Thursday in which he claimed that India will be a manufacturing hub on its own strength in the future.

European banking reform should embrace a unitary approach to failed banks
Anna Gelpern and Nicolas Véron (PIIE) Nov 2, 2020
Six years after starting a reform process to protect its banking system against financial crises, the European Union (EU) has reiterated its members' commitment to "make further concrete progress on the Banking Union by the end of the year." EU officials are right not to let COVID-19 derail necessary debates over this objective. But the reinvigorated discussion has become increasingly confused when it comes to dealing with failed banks. There is a danger that the EU could cite the experience with the US Federal Deposit Insurance Corporation (FDIC) to make its already fragmented regime even more fragmented. That would be a mistake. A closer look at the FDIC model highlights the value of a unitary process for resolving all deposit-taking banks, no matter how large or small.

The Crisis is Not Over, Keep Spending (Wisely)
Oya Celasun, Lone Christiansen, and Margaux MacDonald (IMF) Nov 2, 2020
The road to strong, sustainable, balanced, and inclusive growth will be long and difficult. Now is the time to spend wisely and work together to build a better future.

Europe's Biggest Fund Managers Ride the Passive Wave
Mark Gilbert (Bloomberg View) Nov 2, 2020
Exchange-traded funds continue to attract inflows in a difficult market environment for money management firms.

The Potential for a Policy Failure on Vaccines Is Huge
Ferdinando Giugliano (Bloomberg View) Nov 2, 2020
Scientists are working fast to produce a safe and effective vaccine for SARS-CoV-2. Governments have to be ready to pick up the baton.

The Nifty Fifty Have a Message for the Tech Obsessed
Gary Shilling (Bloomberg View) Nov 2, 2020
Last week's purge in technology stocks show it's time for a history lesson.

Failure on Fiscal Relief Will Widen Racial Inequality
Claudia Sahm (Bloomberg View) Nov 2, 2020
No matter which party is in power next year, Washington should focus on full employment for Black Americans.

Can 'white elephants' kill? Evidence from infrastructure development in Peru
Antonella Bancalari (VoxDev) Nov 2, 2020
Incomplete and abandoned sewerage projects can increase risks of early life mortality and impose significant public health costs on populations.

The wage curve across the wealth distribution
Roberto Iacono and Marco Ranaldi (VoxEU) Nov 2, 2020
The uneven distribution of wealth in society is commonly perceived as a matter of concern per se for inequality-averse policymakers. However, being wealth-poor or wealth-rich is also correlated with outcomes in the labour market. This column examines how wages and unemployment vary across the relative distribution of personal wealth in Norway, focusing on the wage-to-unemployment ratio across the different percentiles of the wealth distribution. It finds that wealth-poor individuals cannot escape low labour incomes regardless of the unemployment rate they face, while the unemployment elasticity of wages is substantially higher for wealth-rich individuals.

Lives saved during economic downturns
Kadir Atalay, Rebecca Edwards, Stefanie Schurer, and David Ubilava (VoxEU) Nov 2, 2020
Some commentators argue that the measures implemented to slow the spread of Covid-19 will do more harm than good due to the economic contraction itself, but also due to the mental health impacts of the imposed social isolation. This column uses evidence from the past four decades in Australia to show that economic downturns actually have very little impact on mortality except to reduce vehicle transport deaths. While this of course does not preclude an impact on wellbeing from the current lockdowns or recession, we may at least see an even greater reduction in mortality during this recession due to fewer people being on the roads.

More capital needs to flow to greener activities
FT View Nov 3, 2020
Asset managers have a role to play in mobilising investment.

How UK banks' brighter outlook can be squared with second lockdown
Kate Burgess (FT) Nov 3, 2020
Message to watchdog to lift lockdown on dividends unchanged; Howden reaps kitchen boom.

Ten ways coronavirus crisis will shape world in long term
Martin Wolf (FT) Nov 3, 2020
Much remains uncertain for business, the economy, domestic politics and international relations.

Traders prepare for storm of election-fuelled tumult in China's currency
Hudson Lockett and Eva Szalay (FT) Nov 3, 2020
Investors step up hedging activity to protect against sharp price swings.

A terrible, horrible, no-good year for quants
Robin Wigglesworth (FT) Nov 3, 2020
Many popular quant strategies are struggling but to varying degrees we are all quants now.

Job polarisation and the Great Recession
Sybrand Brekelmans and Georgios Petropoulos (Bruegel) Nov 3, 2020
A job polarisation trend has seen relatively more workers in the European Union employed in skilled and unskilled jobs, while mid-skilled jobs have been squeezed. Since the Great Recession, the supply of university graduates has risen, but the labour market's demand for skills has not kept up. Graduates have, however, fared better than less-educated workers in terms of wages.

Developing Nations Can't Ease Up on Covid-19 Now
Mihir Sharma (Bloomberg View) Nov 3, 2020
The emerging world may appear to have dodged a bullet but there is plenty of time for new waves of transmission to overwhelm leaky healthcare systems.

The Road Back From Covid Is Looking Long and Hard
Daniel Moss (Bloomberg View) Nov 3, 2020
Australia's central bank is keeping its foot to the pedal, a sign that the economic recovery is still far from robust.

The Link Between the Stock Market and the Economy Is Weakening
Peter R Orszag (Bloomberg View) Nov 3, 2020
Activity is shifting significantly from public manufacturing companies to private service firms.

Trump Is No 'Deregulator In Chief'
Natasha Sarin (Bloomberg View) Nov 3, 2020
His actions have neither reduced red tape nor benefited the economy.

Why Punish Corporations for Their Employees' Crimes?
Willem H. Buiter and Anne Sibert (Project Syndicate) Nov 3, 2020
Punishing corporations for crimes committed by their employees is not unlike the ritual sacrifice of inanimate objects under early English common law. One would think that after so many centuries, we would have made more progress in the rational administration of justice.

How Africa Can Self-Finance its Economic Recovery
Alain Ebobissé (Project Syndicate) Nov 3, 2020
In the wake of a continent-wide recession, a recovery designed and financed largely by Africans is well within reach. While the COVID-19 pandemic is hitting the continent hard, strategies such as asset recycling, continued digitalization, and stronger regional integration can help ensure that Africa is strong enough to fight back.

Tiger mothers and standardised tests: The role of parental influence in cross-country gaps in human capital
Marta De Philippis and Federico Rossi (VoxEU) Nov 3, 2020
There is an abundance of evidence to show that differences in educational attainment play a major role in defining cross-country variations in economic outcomes. This column shows that these cross-country gaps go beyond differences in school quality and parents' socioeconomic background, and that country-specific cultural values, transmitted through parental practices, play an important role. This should inform policies that attempt to replicate the successes of higher-performing countries.

Ethical investment is about morals not markets
Jonathan Ford (FT) Nov 4, 2020
The case for helping the environment or improving diversity should not depend on high returns.

A divided electorate spells trouble for the US economy
Mohamed El-Erian (FT) Nov 4, 2020
Country emerges from polls both unwilling and unable to tackle challenges that threaten this and future generations.

To Cope Wi th Covid, the World's Poor Need Debt Relief
David Malpass (WSJ) Nov 4, 2020
This economic crisis is even harder than usual for the worst-off. Concessions from creditors can ease recovery.

US Fed set to learn hard Japanese lessons
William Pesek (AT) Nov 4, 2020
Only Haruhiko Kuroda can feel Jerome Powell's pain. In March, Federal Reserve Chairman Powell joined his Bank of Japan counterpart in the US$5 trillion club.

The Bank of England Has a Transmission Problem
Marcus Ashworth and Mark Gilbert (Bloomberg View) Nov 4, 2020
Until the economic fog clears, the best thing the central bank can do is continue to act "big and fast."

Anxiety or Pain? The Impact of Tariffs and Uncertainty on Chinese Firms in the Trade War
Felipe Benguria, Jaerim Choi, Deborah Swenson, and Mingzhi Xu (VoxChina) Nov 4, 2020
We analyze the firm-level impacts of the US-China trade war since it is of great economic importance to understand how the unprecedented and dramatic increases in the import and export tariffs confronting Chinese firms affected the firm-level policy environment and firm operational outcomes. To contribute to this effort, we study how increases in US tariffs and Chinese retaliatory tariffs raised Chinese firms' trade policy uncertainty (TPU) and document how firm-level increases in TPU were ameliorated by firm size and capital intensity, as well as by firm-level export diversification in terms of partner countries. In turn, we show how increases in firm trade policy uncertainty due to the US-China trade war depressed Chinese firm-level investment, R&D expenditures, and profits.

The reversal interest rate: A critical review
Rafael Repullo (VoxEU) Nov 4, 2020
The 'reversal interest rate' is defined as the rate at which accommodative monetary policy reverses its intended effect and becomes contractionary for lending. The idea is that excessively low monetary policy rates lead to a reduction in the value of banks' capital, which reduces bank lending. This column shows, however, that that lower rates can only lead to a contraction in bank lending if the bank is a net investor in debt securities, a condition typically only satisfied by high deposit banks. Thus, when it exists, the reversal rate will depend on bank-specific characteristics.

The impact of travel restrictions on trade during COVID-19
Bengt Söderlund (VoxEU) Nov 4, 2020
Strict travel restrictions are preventing business partners from different countries from meeting in person. This column explores the effect of business travelling time on trade using data from the liberalisation of Soviet air space in 1985, which radically reduced flight times between Europe and East Asia. The findings reveal that travelling time can account for most of the trade frictions that cause bilateral trade to sharply decline with geographical distance, suggesting that the current travel restrictions could have large negative effects on trade.

Covid-19 across European regions: The role of border controls
Matthias Eckardt, Kalle Kappner, and Nikolaus Wolf (VoxEU) Nov 4, 2020
The Covid-19 pandemic has seen the reintroduction of national border controls within Europe's Schengen Area, but the effectiveness of this is disputed. This column uses regional data on confirmed new Covid-19 cases from the statistical agencies of 18 Western European countries top show that border controls helped to contain Covid-19, but only for regions with a substantial number of cross-border commuters prior to the crisis. Better policy coordination at the European level could have generated these benefits at lower economic (and political) cost.

Improving the political sustainability of Next Generation EU
Björn Bremer, Theresa Kuhn, Maurits J. Meijers, and Francesco Nicoli (VoxEU) Nov 4, 2020
Concerns about a populist, Eurosceptic backlash have long been an obstacle to the fiscal integration of the EU. This column uses a new survey fielded in five countries – France, Germany, Italy, the Netherlands, and Spain – to measure the validity of those concerns. The results suggest that support for a joint European fiscal instrument is high; that the pandemic recovery plan agreed under 'Next Generation EU' is a well-tailored instrument; and that making the recovery fund permanent would provide a path to political sustainability and garner widespread support among European citizens.

Japan's ethical capitalism has lessons for the world on ESG
Jim McCafferty (FT) Nov 5, 2020
The country's business model and that of western society are beginning to converge.

Why investors have suddenly turned bullish on a divided US government
Katie Martin (FT) Nov 5, 2020
Hasty shift to expectations that a Biden administration would be restrained on tax rises and regulation.

Whoever wins the White House, there's a new climate for investors
Gillian Tett (FT) Nov 5, 2020
Shareholders should learn lessons of adaptation from business leaders.

'The party is pushing back': why Beijing reined in Jack Ma and Ant
James Kynge, Henny Sender, and Sun Yu (FT) Nov 5, 2020
The billionaire's criticism of regulators triggered the move by communist leaders to limit the power of the fintech group.

Ant IPO stomp puts caution before hubris
William Pesek (AT) Nov 5, 2020
Vladimir Putin made a very untimely cameo appearance on China's financial scene this week. Well, not literally. But it was hard not to see Beijing's takedown of Jack Ma's Ant Group as anything but Putinesque.

Bridging the Digital Divide to Scale Up the COVID-19 Recovery
Patrick Njoroge and Ceyla Pazarbasioglu (IMF) Nov 5, 2020
Digitalization must be driven by the needs of the people and work for them.

Fed Has the Economy's Weight on Its Shoulders Again
Brian Chappatta (Bloomberg View) Nov 5, 2020
The prospect of a divided U.S. government dims the chances for robust fiscal stimulus, leaving the central bank to resort to its old toolkit.

Banking Industry Gets a Needed Reality Check
Elisa Martinuzzi (Bloomberg View) Nov 5, 2020
Trading has covered a multitude of sins for Europe's banks. Commerzbank provides a less rosy assessment of the pandemic economy.

Putin's Flatlining Economy
Sergei Guriev (Project Syndicate) Nov 5, 2020
Protracted economic stagnation and a much higher COVID-19 mortality rate than is being officially reported in Russia mean that President Vladimir Putin cannot base his regime's legitimacy on quality-of-life improvements. This suggests that more censorship, propaganda, and foreign adventurism are to be expected.

The US Must Accept China's Rise
Daniel Gros (Project Syndicate) Nov 5, 2020
The US is haunted by the specter of a technologically dominant China – and keen to ensure it never materializes. And yet, given China's fundamentals, there is little the US could do to hamper, let alone arrest, its progress.

Resilience in a time of crisis
David Johnston, Claryn Kung, and Michael A Shields (VoxEU) Nov 5, 2020
Building individual resilience is an important policy priority in many countries. This involves maintaining healthy levels of psychological and physical functioning in the presence of adverse events. This column documents the dramatic impact of the Covid-19 crisis on psychological distress in the UK. It shows neither financial resources nor religiosity, neighbourhood social capital, or cognitive skills were associated with a more resilient response to the crisis. In contrast, it finds that the non-cognitive skill 'self-efficacy' has been a strong predictor of resilience during the pandemic.

Get Ready for SOFR and SONIA and ESTR
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF Econ Group) Nov 5, 2020
The United States is not the only economy in which LIBOR is scheduled to be replaced by another benchmark interest rate. The United Kingdom is currently preparing to switch from sterling LIBOR to SONIA (Sterling Overnight Index Average rate), and the Eurozone will replace euro LIBOR with €STR (Euro Short-term Rate). In this report, we provide an outlook and overview for these three benchmark interest rates.

Another Policy Dose for the U.K. Economy
Nick Bennenbroek and Jen Licis (WF Econ Group) Nov 5, 2020
The Bank of England (BoE) eased monetary policy further at today's announcement, expanding its asset purchase program by a larger-than-expected £150B, in an effort to support economic activity amid the re-imposition of COVID restrictions.

What Economic Stimulus Could Look Like Under a Divided Government
Allison Schrager (FP) Nov 5, 2020
Biden or Trump, massive immediate spending is probably off the table.

Now is the time for financial advisers to earn their corn
Lindsay Cook (FT) Nov 6, 2020
The pandemic has left many of us needing help to safeguard our futures.

The dim glow of the UK stock market
Stefan Wagstyl (FT) Nov 6, 2020
Could there be an upside to the lack of confidence affecting share values?

A Letter to the President, About the Next 4 Years
Justin Wolfers (NYT) Nov 6, 2020
An economist offers advice on the most urgent tasks that need to be done for the economy in the next presidential term.

Trump's Weaker Dollar Arrives on Cue to Help Biden
John Authers (Bloomberg View) Nov 6, 2020
The president was aggrieved by the currency's post-2018 upswing. Its slide will help U.S. exporters and emerging markets.

The Market's Best of All Possible Worlds
Willem H. Buiter and Anne Sibert (Project Syndicate) Nov 6, 2020
To electoral observers who are heavily invested in the partisan outcome of the US elections, the delays in counting and free-wheeling allegations of fraud are enough to make November 2020 feel like the apocalypse. So why have stock prices gone on another tear?

The Age of Public Development Banks Has Arrived
Stephany Griffith-Jones (Project Syndicate) Nov 6, 2020
With combined assets of more than $11 trillion, public development banks already play a significant role in the global economy. They should now increase their individual and joint activities further, in ways that even better aid the green and fair recovery the world urgently needs.

Second Wave Crashes Down on the Eurozone Recovery
Nick Bennenbroek, Brendan McKenna, and Jen Licis (WF Econ Group) Nov 6, 2020
Following an encouraging initial economic upswing during the European summer, the Eurozone economy is on the verge of relapse in activity in the fourth quarter. New lockdown restrictions across major Eurozone economies are set to weigh on activity in the coming months.

Investors embrace the prospect of a divided Washington
Michael Mackenzie (FT) Nov 7, 2020
Equity markets see positives in a gridlocked US government.

What Wall Street would make of a Biden presidency
Robert Armstrong (FT) Nov 7, 2020
Divided government might shield banks from higher taxes and tighter regulation.

Stimulating entrepreneurial activity: The role of local government
Piotr Danisewicz and Steven Ongena (VoxEU) Nov 7, 2020
Entrepreneurship is a key driver of economic activity, so entrepreneurial activity is one of the central points of focus for policymakers and academics. Using information on fiscal transfers in Poland, this column documents beneficial effects of local government funding as a mechanism to alleviate entrepreneurial constraints and spur firm formation. In addition, the observed impact of transfers is stronger in regions with higher political competition and accountability, and in regions with more positive historical attitudes toward entrepreneurial activity.

Why the Biden Economy Could Be the Same Long Slog as the Obama Economy
Neil Irwin (NYT) Nov 8, 2020
With continuing Republican control of the Senate likely, the sort of large-scale stimulus some economists have urged may be off the table.

Oil Prices Are Only Going in One Direction
Julian Lee (Bloomberg View) Nov 8, 2020
Fresh Covid-19 lockdowns are likely to reverse an already stalling recovery in oil demand, just as the U.S. and Libya pump more crude.

Biden Will Need to Get Creative to Save the Economy
Noah Smith (Bloomberg View) Nov 8, 2020
Directly subsidizing local business creation is a plan even Republicans could love.

Ireland's trading future lies beyond the UK after Brexit
Neale Richmond (FT) Nov 9, 2020
Exporters will ship through, over and around the UK as they diversify to Asia and the EU.

Big Oil must make seismic changes to survive
Muqsit Ashraf (FT) Nov 9, 2020
The industry needs a reset in order to maintain its social licence to operate.

A Collective Sigh of Relief Pushes the Stock Market Up
Matt Phillips (NYT) Nov 9, 2020
News of Pfizer's Covid-19 vaccine progress, and Joseph R. Biden Jr.'s victory, gave investors reason to cheer.

Why bankruptcies have declined during the economic shock
Simeon Djankov (PIIE) Nov 9, 2020
Big economic downturns usually bring an upturn in bankruptcies, for logical reasons. Companies suffering big losses suddenly struggle to survive and many fail. Yet during the first half of 2020, the number of corporate bankruptcy filings in the United States fell by 10 percent relative to last year. The other major industrial democratic economies in the G7 show the same pattern of decline in filings. In Germany, the fall is by 12 percent; in Japan and the United Kingdom, by a third; in Canada, by two-fifths; in France, by half. The reason for this decline is simple: The COVID-19 pandemic has induced governments in all G7 countries to temporarily amend bankruptcy procedures, providing lifelines to keep firms alive through the crisis, at a time when premature bankruptcy can worsen the recession.

Four Priorities for Development Ministers at the OECD DAC
Ian Mitchell and Charles Kenny (CGD) Nov 9, 2020
This week, development ministers of the OECD's Development Assistance Committee (DAC) come together for one of their occasional "high-level meetings." The attendees control the vast majority of the global aid budget, and in the past their decisions have had a considerable impact on the pace of global development. More recently, their willingness to act together—and their influence—has waned. Here we set out four challenges faced by the DAC that, if met, could make a major difference both to the COVID response and to global progress in the coming two decades.

Biden, Like Trump, Will Deepen Integration With China
David Fickling (Bloomberg View) Nov 9, 2020
Over the past four years, economic ties between Beijing and the rest of the world have only strengthened. That's likely to continue.

Biden Boosts the Euro, But the Dollar's Still King
Mark Gilbert and Marcus Ashworth (Bloomberg View) Nov 9, 2020
Traders have driven the dollar down in anticipation of more U.S. fiscal stimulus. But the greenback will remain the world's reserve currency.

The COVID Reset Latin America Needs
Mauricio Cárdenas, Eduardo Levy Yeyati, and Andrés Velasco (Project Syndicate) Nov 9, 2020
The COVID-19 pandemic has done more than ravage Latin America's economies; it has highlighted two pervasive and chronic structural weaknesses. Addressing them must be a key component of recovery efforts throughout the region.

The Case for an EU Development Bank
Werner Hoyer (Project Syndicate) Nov 9, 2020
The European Union needs to reinforce its development financing activities in order to level the playing field with the United States and China. Establishing its own development bank would have an immediate, significant, and resource-efficient impact.

America's Dangerous Interregnum
Barry Eichengreen (Project Syndicate) Nov 9, 2020
Outgoing US President Donald Trump's behavior between now and the inauguration in January of his successor, Joe Biden, is likely to be as obstructionist as his administration was chaotic. Biden should draw two lessons from a previous incumbent US president who didn't handle defeat well.

International Institutions Still Matter to the US
Joseph S. Nye, Jr. (Project Syndicate) Nov 9, 2020
With less preponderance and facing a more complex world, the United States must exercise power with as well as over others, and use its soft power to attract their cooperation. To do that, the US will have to rediscover the importance of the institutions Donald Trump's administration abandoned.

Capital taxation: A survey of the evidence
Spencer Bastani and Daniel Waldenström (VoxEU) Nov 9, 2020
How should capital be taxed in advanced economies? This column presents a survey of the recent literature on optimal capital taxation and empirical studies on the distortionary effects of capital taxes. It provides specific analyses for taxes on wealth, property, inheritance, personal capital income, and corporate profits. Its overall conclusion is that capital taxation is part of an optimal tax system, but not all capital taxes strike a balance between optimality and administrative feasibility.

America's Economy Is Fragile. So Is Biden's Economic Team.
Adam Tooze (FP) Nov 9, 2020
In today's Democratic Party, inheriting Obama's economic legacy may be a burden, not a benefit.

Sudden Stops and COVID-19: Lessons from Mexico's History
Gianluca Benigno, Andrew Foerster, Christopher Otrok, and Alessandro Rebucci (FRBSF Econ Letter) Nov 9, 2020
The COVID-19 pandemic produced a sharp contraction in capital flows in emerging markets during the spring of 2020. Such contractions are known as "sudden stops" and historically have been associated with significant downturns in a country's economic activity. Evidence from Mexico's financial crisis history suggests that sudden stops tend to exhibit a common pattern: the crisis lasts one to two years before a rapid but partial recovery, followed by years of protracted stagnation.

Turkey needs a profound change in economic policy
FT View Nov 10, 2020
Prosperity depends on European integration and attracting long-term investment.

The gig economy is a symptom of bigger problems
Sarah O'Connor (FT) Nov 10, 2020
So far, Uber and other gig companies have warded off an existential threat to their business models.

Vaccine success has given investors their bull case
Michael Mackenzie (FT) Nov 10, 2020
Breakthrough sets the stage for sustained gains — and a shift in leadership — within equity markets.

China economy: will hot property market threaten post-pandemic rebound?
Thomas Hale and Sun Yu (FT) Nov 10, 2020
With Beijing concerned that the sector is overheating, heavily indebted developers like Evergrande face intense scrutiny.

Clean energy investment could be a key driver of economic recovery in Europe
Laszlo Varro (OECD Ecoscope) Nov 10, 2020
The economy is in a deep recession. Weak demand and excess capacity weigh down corporate investment; skyrocketing unemployment cuts consumption and threatens social stability. Policymakers respond by debt-funded public investment into clean energy projects that not only successfully stimulates the economy but furthers long-term strategic objectives for an energy transition. The year is not 2020 but 1935, the clean energy projects are the large hydro plants in the Tennessee Valley and the French Alps, and the energy transition is moving the countryside from the petroleum lamp to electric light.

Travel Bubbles in Asia Offer Hope for Global Aviation
Manisha Mirchandani (BRINK) Nov 10, 2020
The idea of "travel bubbles" first rose to prominence during the beginning of COVID-19. Now, talk of creating more comprehensive regional travel bubbles has resumed in Asia-Pacific, as governments weigh the risk of a resurgence of the virus from imported cases against the economic gains from reopening.

Memo to the Biden administration on improving US performance in services trade
J. Bradford Jensen (PIIE) Nov 10, 2020
Despite its globally competitive services sector, the United States' performance is hampered by many impediments to cross-border trade, restrictions on foreign direct investment, and regulatory differences.

China 4.0: Sharing the dividends of digitalization
Martin Raiser and Marcin Piatkowski (Brookings) Nov 10, 2020
China's upcoming 14th Five Year Plan is likely to emphasize investments in digitalization to promote the country's competitiveness in the new general-purpose technologies expected to drive economic progress during the next decade. In this blog, inspired by a recent paper by Indermit Gill, Wolfgang Fengler, and Kenan Karakulah and utilizing the perspectives of our colleague Anwar Aridi, we look at the consequences of accelerated digital development on social and economic outcomes, an issue that has not received enough attention in China.

U.S. Trade Policy Is Ready for its Biden Makeover
Noah Smith (Bloomberg View) Nov 10, 2020
Stopping the tariff-war madness with allies is something the new president could do right away with executive powers.

U.S. Gridlock Could Worsen Asia's North-South Divide
Daniel Moss (Bloomberg View) Nov 10, 2020
Tech exports favored China, South Korea and Taiwan, but American stimulus kept Asia going. A Biden-McConnell showdown now would hurt.

The Calm Before the Exchange-Rate Storm?
Kenneth Rogoff (Project Syndicate) Nov 10, 2020
Core dollar exchange rates have so far been surprisingly stable during the pandemic, most likely because major central banks' policy interest rates are effectively frozen at or near zero. But although the current stasis could last awhile, it will not last forever.

Exchange rate regimes in emerging countries
Sebastian Edwards (VoxEU) Nov 10, 2020
While today almost every advanced nation has a flexible interest rate regime similar to that advocated by Milton Friedman, most emerging countries continue to have 'conventional peg'. This column draws on the historical work of Milton Friedman to examine the conditions under which he thought that flexible rates were the right system for developing countries, and when he thought that it was appropriate to have an alternative regime.

Revitalising Multilateralism: Pragmatic Ideas for the New WTO Director-General
Simon Evenett and Richard Baldwin (VoxEU) Nov 10, 2020
While the trade system as a whole has proved more resilient than many feared during the Covid-19 pandemic, the crisis has placed new stresses on multilateral cooperation. This has come at a time when the standing of the WTO has fallen in some of its largest members and its rules have been ignored by many. This column argues that with the election of a new US government and the concurrent selection of a new WTO Director-General, there is new hope for a revitalisation of multilateral cooperation on trade.

China's 'recolonisation' of Hong Kong could soon be complete
Jamil Anderlini (FT) Nov 11, 2020
For Beijing it makes sense to crush the things that former colonists think made the city successful.

An investment bank to help the US prosper
Stephany Griffith-Jones (FT) Nov 11, 2020
A new Biden government will need an institution to support an equitable and sustainable economy.

One FANG Rout Doesn't Make a Market Revolution
John Authers (Bloomberg View) Nov 11, 2020
Vaccine Monday's violent moves will need further macro support for us to call this a true rotation.

Biden Is Stepping Into a Dream Economic Scenario
Timothy A Duy (Bloomberg View) Nov 11, 2020
This recovery will be nothing like the last one, which was marked by many years of slow growth.

China Shouldn't Make Biden's Job Harder
Henry Huiyao Wang (Bloomberg View) Nov 11, 2020
While no one should expect a dramatic turnaround, the two countries have a chance to put a floor under the world's most important bilateral relationship.

Bye, Tariff Man. Biden's India Play Must Be Apps
Andy Mukherjee (Bloomberg View) Nov 11, 2020
The U.S. needs to help Modi bring down the barriers and make a potential ally safe for Silicon Valley.

How Public Development Banks Can Help Nature
Elizabeth Mrema nd Carlos Manuel Rodriguez (Project Syndicate) Nov 11, 2020
Public development banks will be critical to global efforts to build back better from the COVID-19 pandemic and its economic fallout. To realize their potential, they should complement their climate investments by setting explicit nature-based goals and targets.

Finance Leases: A Hidden Channel of China's Shadow Banking System
Jinfan Zhang, Ting Yang, and Yanping Shi (VoxChina) Nov 11, 2020
We find that banks use their affiliated leasing firms to provide credit to constrained clients in order to circumvent the government's targeted monetary tightening policy, which offsets the expected decline in traditional bank loans in overcapacity industries and hampers the effectiveness of the monetary policy. Although this regulatory arbitrage may cause systemic risk at the macro level, bank-affiliated leasing firms exhibit much tighter risk control than other non-bank-affiliated leasing firms at the micro level, indicating that banks use finance leases as a channel to support low-risk clients rather than to make excessive profit.

How Italy Can Green "La Bella Vita"
Enrico Giovannini (Project Syndicate) Nov 11, 2020
The European Union's new COVID-19 recovery fund gives Italy an opportunity to build a stronger and more resilient post-pandemic economy. But realizing this potential will require fundamental changes in economic policymaking and implementation, underpinned by Italians' broad consensus in favor of fast and deep decarbonization.

Resolving mortgage distress after COVID-19
Fergal McCann and Terry O'Malley (VoxEU) Nov 11, 2020
Debt moratoria introduced to mitigate the initial impact of the coronavirus pandemic have begun to expire. This column derives lessons for policymakers by analysing detailed micro data on arrears resolution during the recovery from the post-2008 Irish financial crisis. It highlights trends in borrower engagement in resolution, the financial health of households engaging, details on how loans were restructured, and the success of loan restructures.

The UK must guard against protectionism
FT View Nov 12, 2020
An overhaul of takeover rules is welcome but entails risks.

Oil producers have more than a pandemic to worry about
David Sheppard (FT) Nov 12, 2020
Even an effective Covid vaccine may not offer a route out of the mess the industry finds itself in.

Put global stocks at the heart of an investment trust portfolio
Simon Edelsten (FT) Nov 12, 2020
Beware societal changes, some business models will become outdated.

Was the Bank of Amsterdam the world's first central bank?
Claire Jones (FT) Nov 12, 2020
Or when stablecoins go squiffy....

Joe Biden Can Build on Trump's Foreign Policy
Michael O'Hanlon (WSJ) Nov 12, 2020
Broker a better deal with Iran, continue to calm tensions with Russia, and improve trade agreements.

You May Regret Staying Parked in U.S. Stocks
Nir Kaissar (Bloomberg View) Nov 12, 2020
There are three big reasons to expect foreign equities will outperform in the coming years. All it takes is a little courage to make the wager.

Why Is China Regulating Big Tech Now?
Shuli Ren (Bloomberg View) Nov 12, 2020
The K-shaped recovery is proof of widening inequality. That doesn't sit well with Beijing.

Financial policymaking after crises
Orkun Saka, Yuemei Ji, and Paul De Grauwe (VoxEU) Nov 13, 2020
Financial crises invariably lead governments to intervene in one way or another, whether to ease the damage to middle-class voters, to respond to the anti-finance sentiment, or to introduce new policies favouring the financial industry. This column traces policy interventions back to policymakers' incentives. Financial crises lead governments to re-regulate financial markets only in democratic settings. Politicians who are not facing a term limit are substantially more likely to re-regulate financial markets after crises in ways compatible with their private incentives. These privately motivated interventions operate via controversial policy domains and favour incumbent banks in countries with more revolving doors between political and financial institutions.

How Europe Can Work with Biden
Kemal Dervis and Sebastian Strauss (Project Syndicate) Nov 12, 2020
Joe Biden's victory in the US presidential election creates the possibility of much greater international cooperation in confronting global threats. Europe should aim to strengthen the hand of those in America who want to help build a new, open, and more equitable international order.

Recovery capacity: Readiness for a new economic landscape
Margareta Drzeniek, Sheana Tambourgi, and Ilaria Marchese (VoxEU) Nov 12, 2020
COVID-19 is accelerating structural transformations, notably towards more digitalised and more automated economies. This column presents a COVID-19 economic recovery index which considers the extent to which a country is exposed to major health effects from COVID-19, the degree to which a country's economy will be affected by the crisis, and a country's capacity to recover and rebuild to pre-COVID-19 levels. To guide their economies out of this crisis and to ready them for the coming transformation, governments need to restore trade flows, manage the risks of slowing global economic convergence, and actively prepare for accelerating economic transformation.

Biden's Priority in Africa Should Be Debt Relief
Theodore Murphy (FP) Nov 12, 2020
More than other kinds of aid, to get out from under China's thumb, the continent will need debt financing and private investment.

How the Federal Reserve's Central Bank Swap Lines Have Supported U.S. Corporate Borrowers in the Leveraged Loan Market
Annie McCrone, Ralf Meisenzahl, Friederike Niepmann, and Tim Schmidt-Eisenlohr (FEDS Notes) Nov 12, 2020
The cost of borrowing U.S. dollars through foreign exchange (FX) swap markets increased significantly in the beginning of the Covid-19 pandemic in February 2020, indicated by larger deviations from Covered Interest Rate Parity (CIP). CIP deviations narrowed again when the Federal Reserve expanded its swap lines to support U.S. dollar liquidity globally—by enhancing and extending its swap facility with foreign central banks and introducing the new temporary Foreign and International Monetary Authorities (FIMA) repurchase agreement facility.

Probit Model Confirms Economic Recovery to Continue
Azhar Iqbal, Shannon Seery, and Hop Mathews (WF Econ Group) Nov 12, 2020
In this report, we update our ordered Probit growth model. The probability of a weak recovery is the most likely scenario, which is consistent with the negative trend in our Animal Spirits Index.

Investors should take heed of the inflation chatter
Gillian Tett (FT) Nov 13, 2020
Don't be blindly addicted to free money and risk a shock when conditions change.

The fairytale of market liquidity
John Dizard (FT) Nov 13, 2020
Repeated need for support from central banks at times of crisis highlights vulnerability of financial systems.

Australia on edge as China's trade threats bite
Hamish McDonald (AT) Nov 13, 2020
It's the Chinese equivalent of the post-Christmas sales in Western countries. But instead of bargain-hunters camping outside department stores waiting for the doors to open, Chinese shoppers were standing by their laptops and smartphones ready to log on at midnight.

Five Charts on Spain's Economy and Response to COVID-19
Nicolas Arregui, Lucy Liu, and William Oman (IMF) Nov 13, 2020
The pandemic has taken a significant toll on Spain's people and economy, following five years of strong growth and job creation. A second wave of infections that started in mid-July has put a lid on the recovery.

Home Prices Are In a Bubble. Full Stop.
Aaron Brown (Bloomberg View) Nov 13, 2020
Stocks may be expensive based on historical measures, but it's nothing compared to skyrocketing home values.

Biden Faces a Global Economy That's Tired of U.S. Antics
Nov 13, 2020
A challenge for the President-elect will be strengthening a multilateral framework that is badly in need of repair.

Job Creation Is the New Game in Town
Gordon Brown and Robert Skidelsky (Project Syndicate) Nov 13, 2020
Even if a successful rollout of a new COVID-19 vaccine causes the current health crisis to recede by next spring, the unemployment crisis will remain. That is especially true in the United Kingdom, where fiscal stimulus is urgently needed to avert a lost decade – if not a lost generation – of growth.

Rethinking the future of American capitalism
James Manyika, Gary Pinkus, and Monique Tuin (MGI) Nov 13, 2020
American capitalism has evolved time and again, and we may be poised for another such shift. Will the future of capitalism involve tweaks, reforms, or wholesale change?

Meet the World's Largest Free Trade Area
Gyude Moore and Bogolo Kenewendo (FP) Nov 13, 2020
When it comes into effect, the African Continental Free Trade Area will remake African economies—and the world's.

Markets have found reasons to be cheerful
FT View Nov 14, 2020
Potential coronavirus vaccine challenges narrative of lower-for-longer interest rates.

A rotation in equity markets starts to emerge
Michael Mackenzie (FT) Nov 14, 2020
Covid-19 vaccine breakthrough prompts shift in investor portfolios towards cyclical companies.

Boris Johnson has secured a questionable legacy
Martin Wolf (FT) Nov 15, 2020
The UK prime minister will be remembered for 'getting Brexit done' and his mismanagement of Covid.

The Pandemic Is Showing Us How Capitalism Is Amazing, and Inadequate
Neil Irwin (NYT) Nov 14, 2020
Why big business needs big government and vice versa.

President Joe Biden will face two extraordinary economic challenges
Economist Nov 14, 2020
He must both fight a crisis and prepare for transformative change.

What a vaccine means for America's economy
Economist Nov 14, 2020
Although the coronavirus is spreading unchecked, there are grounds for optimism.

A Better Tomorrow Won't Fix India's Broken Today
Andy Mukherjee (Bloomberg View) Nov 14, 2020
Improved economic numbers mask a dire need for Modi's government to stimulate demand.

Social Unrest Is the Inevitable Legacy of the Covid Pandemic
Andreas Kluth (Bloomberg View) Nov 14, 2020
Throughout history, plagues have caused upheaval and revolts. This pandemic will be no different.

Looking under the hood of the labour share decline
Matthias Kehrig and Nicolas Vincent (VoxEU) Nov 14, 2020
A decline in the labour share of income has been documented in many countries and industries. This column uses data from US manufacturing establishments to analyse the drivers of this phenomenon. It shows that the massive reallocation of economic activity was driven by establishments that lowered their labour share as they grew in size. Yet, these low labour shares are temporary, making establishments more akin to 'shooting stars' than 'superstars'. Coupled with the fact that their status is associated with higher prices, the evidence points to a significant role for demand-side forces, such as product innovation or brand power.

Institutional real estate investors, leverage, and macroprudential regulation
Manuel A. Muñoz (VoxEU) Nov 14, 2020
Institutional real estate investment has more than quadrupled in the euro area since 2013, financed largely through non-bank lending, which is not subject to regulatory loan-to-value limits. This column uses a two-sector model of institutional real estate investors calibrated to quarterly data from the euro area economy to show that optimised (countercyclical) loan-to-value rules limiting the borrowing capacity of such investors are more effective in smoothing property price, credit, and business cycles than the well investigated dynamic loan-to-value rules that affect (indebted) households' borrowing limit. The findings call for a strengthening of the macroprudential regulatory framework for non-banks.

Frugality exposes a Europe in need of optimism and reform
Mark Leonard (FT) Nov 15, 2020
Many people in the EU's wealthiest states feel powerless to shape its future.

Democracies that failed the Covid test will struggle on climate change
Gavyn Davies (FT) Nov 15, 2020
Efforts to address both issues are hampered by externalities and behavioural biases.

The meaning of RCEP, the world's biggest trade agreement
Economist Nov 15, 2020
It is unambitious in scope but marks a win for China and a setback for India and America.

Asia's stake in global cooperation through the G20
David Vines (EAF) Nov 15, 2020
Next week's APEC and G20 summits are a historic opportunity for Asia's economies to work together in shaping an ambitious agenda that an incoming Biden administration can feed into and embrace. What are the priorities?

In Africa's Debt Fog, China Loses Too
Clara Ferreira Marques (Bloomberg View) Nov 15, 2020
Zambia has become the continent's first Covid-19 default. It doesn't help that no one knows exactly who owes what.

China Wants a Made-in-China Copper Price
Clara Ferreira Marques (Bloomberg View) Nov 15, 2020
The country's latest international futures contract has timing and structure on its side.

What If That Bond Issuer Never Meant to Pay You Back?
Shuli Ren (Bloomberg View) Nov 16, 2020
In China, state-owned defaulters are shifting out good assets before creditors take them to court. Investors are getting nervous.

OPEC's Got to Play the Coronavirus Waiting Game
Julian Lee (Bloomberg View) Nov 15, 2020
The pandemic and rising oil output it can't control means the cartel and its allies will have to postpone easing output cuts. But for how long?

Emerging markets sovereign spreads and country-specific fundamentals during COVID-19
Timo B. Daehler, Joshua Aizenman, and Yothin Jinjarak (VoxEU) Nov 15, 2020
Covid-19 was predicted to hit emerging markets particularly hard, as many containment measures were deemed less effective in an emerging market context. This column examines emerging market sovereign credit default swaps spreads during the pandemic and assesses the relative importance of global factors, sovereign fundamentals, COVID-19 mortality, and policy responses. The analysis suggests that while emerging market sovereign CDS spreads can be explained by regional and global risk factor before COVID-19, they were driven by fiscal space, commodity revenues and mobility dynamics during the pandemic, but not directly through variation in country-specific COVID-19 mortality rates.

Localising value chains after COVID would add to the economic losses and make domestic economies more vulnerable
Christine Arriola, Przemyslaw Kowalski, and Frank van Tongeren (VoxEU) Nov 15, 2020
The Covid-19 pandemic has left in its wake a global economy damaged beyond what was thought possible a decade ago. The globalised nature of the 21st century global economy is a key component in terms of the dynamics, and effects, of the virus. This column presents an analysis of the importance of global value chains, both during the pandemic and throughout the recovery process. The results of the study suggest that increased localisation could do more harm than good, and that the international network of interconnected supply chains remains key to producing essential goods and services.

Biden's flawed plan for global leadership
Gideon Rachman (FT) Nov 16, 2020
The signing of a huge trade deal in Asia shows the world is moving on without the US.

Zambia's debt crisis casts a long, global shadow
Robin Wigglesworth (FT) Nov 16, 2020
Developing countries face a series of sovereign debt crises that need to be tackled forcefully.

Asia-Pacific countries sign one of the largest free trade deals in history
Robin Harding and John Reed (FT) Nov 16, 2020
Pan-Asia trade pact covers a third of the world's population and economic output.

Global Financial Stability Watchdog Warns That Markets Remain Vulnerable
Jeanna Smialek (NYT) Nov 16, 2020
The Treasury market seized up in March, and the Financial Stability Board said in a new report that it could happen again.

Turkey's Problem Banks
WSJ Nov 17, 2020
Erdogan will lean on Biden to drop charges against Halkbank.

RCEP set to supercharge the New Silk Roads
Pepe Escobar (AT) Nov 16, 2020
Ho Chi Minh, in his eternal abode, will be savoring it with a heavenly smirk. Vietnam was the virtual host as the 10 ASEAN nations, plus China, Japan, South Korea, Australia and New Zealand, signed the Regional Comprehensive Economic Partnership, or RCEP, on the final day of the 37th ASEAN Summit.

Memo to the World Trade Organization on how to fight COVID-19 and make needed reforms
Anabel González (PIIE) Nov 16, 2020
Of the challenges facing the World Trade Organization (WTO), no priority is more pressing than revitalizing the organization to help counter the COVID-19 pandemic and rebuild the world economy. The WTO needs reform, but a reform agenda should not delay action on these broader health and economic objectives.

Memo to the IMF on how to respond to sovereign debt challenges in the wake of the pandemic
Peter Orszag (PIIE) Nov 16, 2020
In the wake of the COVID-19 pandemic, and despite ample liquidity in most global markets, numerous governments are struggling with debt challenges reflecting not only the current crisis but also the legacy of borrowing during easy global financial conditions over many years. To resolve these restructurings effectively and efficiently, reform rather than revolution is necessary. Six steps would be helpful.

China goes from strength to strength in global trade
Tianlei Huang and Nicholas R. Lardy (PIIE) Nov 16, 2020
China's economy has recovered sharply since the second quarter of 2020, while the rest of the world is still deep in the Great Lockdown Recession. China's economic output grew 0.7 percent in real terms January through September 2020, and it is projected to be the only major economy that will expand in 2020. Despite weak growth in the rest of the world, China's net exports still grew, contributing 15 percent of its growth in the first three quarters. Because global trade volume is forecast to fall 10 percent in 2020, China's share in global trade will almost surely rise substantially.

Current sovereign debt challenges and priorities in the period ahead
Ceyla Pazarbasioglu (IMF) Nov 16, 2020
The pandemic has exacerbated existing debt vulnerabilities in many countries, particularly low-income countries. Addressing these vulnerabilities is a complex undertaking.

This Is No Time for India to Turn Away From Trade
Mihir Sharma (Bloomberg View) Nov 16, 2020
As other Asian nations move forward with a big new free-trade pact, the country is unwise to look inward.

Welcome to the Might-Is-Right Global Trade Era
David Fickling (Bloomberg View) Nov 16, 2020
The RCEP pact reflects a pre-World War I vision of self-contained blocs dominated by rival empires.

Europe Is Planning Its Very Own E-Currency
Ferdinando Giugliano (Bloomberg View) Nov 16, 2020
A digital euro might let the single currency chip away at the dollar's dominance, but there are real risks to the banking system.

Judy Shelton on the Fed Is Still a Bad Idea
Karl W Smith (Bloomberg View) Nov 16, 2020
If Republicans confirm her now, it will be hard to stop the politicization of the central bank.

Biden Turns to a New Generation for Economic Advice
Noah Smith (Bloomberg View) Nov 16, 2020
His transition team is progressive and has some big ideas, but they'll also be practical.

How Can Banks Possibly Absorb All These Defaults?
Anjani Trivedi (Bloomberg View) Nov 16, 2020
The uncertainty as China's lenders come to realize the size of the risks they're sitting on will be brutal.

Yield Hunters Have Three Options
Barry L Ritholtz (Bloomberg View) Nov 16, 2020
The traditional "60/40" portfolio of stocks and bonds can be saved with a few modest tweaks.

Covid Is Increasing America's Lead Over China
Tyler Cowen (Bloomberg View) Nov 16, 2020
As the post-pandemic world order takes shape, it's clear that the U.S. still has huge advantages.

America Should Rewrite the China Trade Contract
Arvind Subramanian (Project Syndicate) Nov 16, 2020
America and other countries have no right to obstruct China's economic rise or dictate its development model. But US President-elect Joe Biden's incoming administration can and should revise decades-old trade arrangements with China to take account of changed realities.

A No-Brainer for the G20
Jim O'Neill (Project Syndicate) Nov 16, 2020
The sooner we get the COVID-19 pandemic under control, the sooner we can put the global economy back on track. At a virtual gathering this month, the G20 will have an opportunity to do precisely that, provided that world leaders are able to see the economic windfall that is staring them in the face.

COVID-19 Recovery Dominates Weekend of Asian Summits
Sebastian Strangio (Diplomat) Nov 16, 2020
Recovery from the pandemic and its economic effects has become an arena for strategic competition in Southeast Asia.

Rethinking the ECB's inflation objective
Ethan Ilzetzki (VoxEU) Nov 16, 2020
The ECB is in the process of reviewing its monetary policy strategy. This column presents the latest CfM-CEPR survey, which reveals that a majority of panel members support allowing inflation to exceed 2% following periods when inflation has been below target and making more explicit its secondary objective of supporting economic growth and full employment. Only a minority support increasing the inflation target itself.

The U.K. Is Taking an Unexpectedly Moral Foreign-Policy Stance Post-Brexit
Azeem Ibrahim (FP) Nov 16, 2020
Economic considerations are being put aside for human rights.

How Has COVID-19 Affected Banking System Vulnerability?
Kristian S. Blickle, Matteo Crosignani, Fernando M. Duarte, Thomas M. Eisenbach, Fulvia Fringuellotti, and Anna Kovner (Liberty St Econ) Nov 16, 2020
The COVID-19 pandemic has led to significant changes in banks' balance sheets. To understand how these changes have affected the stability of the U.S. banking system, we provide an update of four analytical models that aim to capture different aspects of banking system vulnerability.

Temporary Layoffs and Unemployment in the Pandemic
Erin Wolcott, Mitchell G. Ochse, Marianna Kudlyak, and Noah A. Kouchekinia (FRBSF Econ Letter) Nov 16, 2020
Temporary layoffs accounted for essentially the entire increase in unemployment to its historically high rate in April 2020. Although the rate has come down since its peak, unemployment remains well above pre-pandemic levels. There is little evidence that temporary layoffs are becoming permanent at a higher rate than in the past. However, the continuation of the health and economic crisis poses a risk that a growing share of unemployment will consist of people in persistent categories of joblessness, thereby slowing the overall recovery.

A post-Brexit trade deal is vital to the UK's future
FT View Nov 17, 2020
Boris Johnson should follow the path to an acceptable compromise.

Asia deal is wake-up call for free trade
FT View Nov 17, 2020
New pact underlines diminution of US influence in region.

Levelling up is easier in a world of remote work
Sarah O'Connor (FT) Nov 17, 2020
We have a once-in-a-generation chance to rebalance the economy.

Three ways the banks will be winners from Covid recovery
Robert Armstrong (FT) Nov 17, 2020
Business cycle and interest rates look to be lining up to lift the sector's fortunes.

How hidden is inflation?
Claire Jones (FT) Nov 17, 2020
Price pressures have disappeared during the pandemic, so they say.

Trade surge affirms China's economic leadership
David P. Goldman (AT) Nov 17, 2020

Three Steps to Reduce Brexit's Impact on Supply Chains
Cornelius Herzog, Martin Zollneritsch and Markus Groth (BRINK) Nov 17, 2020
Although supply chain leaders have been preparing for Brexit for years, the COVID-19 crisis has added an extra layer of complexity to an already extremely uncertain environment, and it is still not entirely clear what exactly they are planning for. To secure business continuity, here are three ways that companies can brace themselves for impact and build resilience.

Turkey's economic recovery from COVID-19: Preparing for the long haul
Auguste Tano Kouamé and Habib Rab (Brookings) Nov 17, 2020
This crisis is an opportunity to refocus attention on structural reforms and build back a resilient economic system that propels Turkey into the high-income group of nations.

While Household Income Falls, Central Bankers Are Pushing for Higher Prices
Daniel Lacalle (Mises Wire) Nov 17, 2020
The fact that prices are rising in a pandemic crisis is not a sign of success. It is evidence of central bankers' miserable failure and hurts every consumer who has seen revenues collapse by 10 or 20 percent.
China's leaders announce their plans after they are well on their way to fruition. Sunday's signing of the Regional Comprehensive Economic Partnership (RCEP) capped a year in which China's export trade reached new records while the rest of the world contracted amid the pandemic.

The Dystopian "Fourth Industrial Revolution" Will Be Very Different from the First One
Antony P. Mueller (Mises Wire) Nov 17, 2020
Klaus Schwab of the World Economic Forum has big plans for a "sustainable" future. Most of it involves the destruction of markets and basic human rights.

Hong Kong Must Tackle Its Worsening Wealth Gap
Clara Ferreira Marques (Bloomberg View) Nov 17, 2020
The territory is among the most unequal globally, and a post-protest, post-pandemic welfare fix is possible and affordable.

The Only Thing Worse Than a Big Default Is a Surprise One
Shuli Ren (Bloomberg View) Nov 17, 2020
In China, bondholders once had a good rule of thumb for picking safe, state-owned investments. It no longer applies.

Biden Risks Ceding Asia's Digital Oil to China
Andy Mukherjee (Bloomberg View) Nov 17, 2020
It's all about data. The U.S. needs to get back into the Trans-Pacific Partnership, or watch Beijing make the rules.

Fund Managers Are Incubating a Future Bond Market Crash
Mark Gilbert (Bloomberg View) Nov 17, 2020
Asset managers need their regulators to help them resolve a liquidity mismatch.

Hot Mortgage Market Is the Fed's House of Cards
Brian Chappatta (Bloomberg View) Nov 17, 2020
Many Americans have weathered the pandemic by refinancing their homes and benefiting from soaring property values. But what happens next?

Don't Be Fooled. The Coronavirus Economy Still Needs Help.
Michael R Strain (Bloomberg View) Nov 17, 2020
Vaccine hope and job optimism are justified, but so are warnings of another slump. Are you listening, Congress?

The Global South's Pandemic Path to Self-Reliance
Syed Munir Khasru (Project Syndicate) Nov 17, 2020
The post-1945 paradigm of external development finance has been primarily driven by the developed countries of the Global North and shaped by their geopolitical agenda. But the COVID-19 pandemic offers developing countries the chance to reinvent and reboot their economies, and shake off the disabling legacy of foreign aid dependency.

Joe Biden's World Order
Shlomo Ben-Ami (Project Syndicate) Nov 17, 2020
Many hope that, when US President-elect Joe Biden takes over in January, he can salvage, and even renew, the American-led post-1945 liberal world order. That's an understandable desire, but it is entirely unrealistic.

Can Europe Recover Its Youth?
Elisabeth von Hammerstein, Claudia Gamon, and Yana Ehm (Project Syndicate) Nov 17, 2020
Overcoming Europe's serial crises and the growing sense of hopelessness among young people will require leaders to stand together. They must find the courage to invest and reform, demonstrate solidarity on key policy issues, and develop a clear vision of Europe's place in the world.

A proposal for an auction-based sovereign debt restructuring mechanism
Tim Willems (VoxEU) Nov 17, 2020
The COVID-induced surge in public debt has raised concerns about its sustainability, further increasing the need to improve the debt-restructuring process. This column proposes an auction-based strategy to restructure sovereign debt that tailors the shape of the restructured debt stock optimally to creditor preferences, subject to debt being sustainable post-restructuring. Any debt relief provided to the country gets optimally distributed over its creditors, thus minimising the pain inflicted upon them. A version of the winner's curse can reduce the 'holdout problem' of creditors trying to free-ride on each other's contributions towards debt relief. All this should smoothen the restructuring process and enable the debtor to mobilise greater creditor support (given the amount of relief provided).

Monetary policy effects in times of negative interest rates
Joost Bats, Massimo Giuliodori, and Aerdt Houben (VoxEU) Nov 17, 2020
Interest rates have declined steadily over the last decades, recently turning negative in Europe and Japan. This column finds that negative interest rates have important implications for bank stock prices. When market interest rates are negative, but deposit rates are stuck at zero, monetary policy instruments that target the longer end of the yield curve are less detrimental to bank performance compared with instruments that target the shorter end. Therefore, quantitative easing and yield curve control deserve special consideration when interest rates are negative and further monetary accommodation is required.

Urban economics, historical data, and machine learning
Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Clément Gorin, and Yanos Zylberberg (VoxEU) Nov 17, 2020
Applying machine learning to rich historical data sources provides the opportunity to draw novel insights for fields such as urban and spatial economics. Using evidence from France, this column shows how such information might be derived from historical maps to shed new light on the growth of towns and agglomerations, and could inform our understanding of various human behaviours from community evolution to agricultural productivity.

Cross-border fallout from pandemic policy overdrive
Simon Evenett and Johannes Fritz (VoxEU) Nov 17, 2020
The onset of the COVID-19 pandemic meant governments faced their second systemic economic crisis in under 15 years. This column introduces the latest Global Trade Alert report, which documents the extensive cross-border spillovers created by government policy intervention during the first ten months of the year, much of it in response to the pandemic. The evidence challenges five common claims made by officials during crises and questions the current approach to crisis management found in WTO accords.

What's Ahead for the U.S. Economy?
K@W Nov 17, 2020
President-elect Joe Biden's proposals promise wide-ranging economic gains, but the pandemic will continue to be a huge variable in the near term, according to analysis by the Penn Wharton Budget Model.

EU should resist blackmail over recovery fund
FT View Nov 18, 2020
Rule of law safeguards cannot be rolled back to appease Hungary and Poland.

Why inflation could be on the way back
Martin Wolf (FT) Nov 18, 2020
The global economy may be shifting as it did four decades ago.

EU industrial strategy needs to be measured to succeed
Peggy Hollinger (FT) Nov 18, 2020
Plan to revamp the bloc's approach comes amid declining global competitiveness.

Why value investing still works in markets
Michael Mauboussin (FT) Nov 18, 2020
To buy something for less than it is worth is as useful as ever.

The United Nations and the Origins of "The Great Reset"
Antony P. Mueller (Mises Wire) Nov 18, 2020
The United Nations has been the key institution in setting the stage for a global "Great Reset" devoted to global management of human society and of markets.

Vietnam faces a double-barreled challenge on currency policy
Euijin Jung (PIIE) Nov 18, 2020
Vietnam has benefited from the US-China trade war, stepping in with exports to the United States as sales of Chinese goods have declined because of the Trump administration's tariffs. But now the administration is invoking two separate US trade laws against Vietnam, charging it with currency manipulation and threatening to impose retaliatory tariffs on US imports from Vietnam. Whether Vietnam is actually manipulating its currency value to gain unfair trade advantages is debatable. Also controversial are the unprecedented legal tools the Trump administration is employing to go after Vietnam.

The U.S. Can't Wait for New Covid Relief
Bloomberg View Nov 18, 2020
The risks to the economy keep piling up.

This Time, India Is Getting a Bank Rescue Right
Andy Mukherjee (Bloomberg View) Nov 18, 2020
A Singapore institution's takeover of a zombie lender sends a good signal to global rivals.

Banks Should Brace Themselves for Some Bad News on Bad Loans
Ferdinando Giugliano (Bloomberg View) Nov 18, 2020
Regulators relaxed the rules on bad loans to deal with the pandemic, but there's no sign this will be anything other than temporary.

Want More Infrastructure? Make It Cheaper to Build
Justin Fox (Bloomberg View) Nov 18, 2020
The Biden administration will be better on infrastructure than its predecessor. But it needs to find ways to reduce this country's sky-high construction costs.

China Takes Advantage of Europe's Generosity
Marcus Ashworth (Bloomberg View) Nov 18, 2020
The country's euro-denominated bond sale is an exercise in national marketing. And why not, when it's this cheap?

Gold Is a Hedge Against Bad Government Decisions
Jared Dillian (Bloomberg View) Nov 18, 2020
Most investors think the precious metal protects against faster inflation or a plunge in stocks. Not so.

China's Next Default Pressure Point Comes Closer
Anjani Trivedi (Bloomberg View) Nov 18, 2020
Beijing wants to keep troubled local debt vehicles at arm's length. This determination will be put to the test.

The Revenge of the Precariat
Edoardo Campanella (Project Syndicate) Nov 18, 2020
Just as the COVID-19 pandemic has shone a spotlight on often-overlooked essential workers, so should it increase our appreciation for the back-end labor that goes into the digital economy. Most of today's tech giants simply wouldn't exist without the contributions of "low-skilled" workers.

Breaking America's Patent Stalemate
Lisa Larrimore Ouellette and Heidi Williams (Project Syndicate) Nov 18, 2020
Patents are intended to disclose information about new technologies and who owns the rights to them, but they often fail on both counts. The good news is that the United States Patent and Trademark Office can address both shortcomings without waiting for congressional action.

What Kind of Economy Will Joe Biden Inherit?
John Cassidy (New Yorker) Nov 18, 2020
Following positive news about coronavirus-vaccine trials, the long-term macroeconomic environment that the next Administration will face has become a hot topic among economists.

Capital Regulations, Bank Risk-Taking, and Monetary Policy in China
Xiaoming Li, Zheng Liu, Yuchao Peng, and Zhiwei Xu (VoxChina) Nov 18, 2020
China implemented Basel III in 2013 and tightened bank capital regulations. Empirical evidence shows that the new regulations significantly reduced bank risk-taking following monetary policy easing. To meet the tightened capital requirements, banks respond to a balance-sheet expansion by raising the share of lending to state-owned enterprises (SOEs) that are perceived as low-risk borrowers under government guarantees. We estimate that a one standard deviation positive shock to M2 growth raises the probability of SOE lending by up to 27%. Raising the share of SOE lending, however, reduces aggregate productivity, creating a trade-off between financial stability and allocative efficiency.

Bitcoin's revival: boom or bubble?
Adam Samson (FT) Nov 19, 2020
More investors are starting to pay attention as the cryptocurrency rides high.

Bundesbank chief: How central banks should address climate change
Jens Weidmann (FT) Nov 19, 2020
Jens Weidmann says we can explore requiring better risk disclosures but cannot make up for a lack of political will.

Making the Most of the Coming Biden Boom
Paul Krugman (NYT) Nov 19, 2020
The economic outlook is probably brighter than you think.

Trade Truths Will Outlast Trump
Douglas A. Irwin (WSJ) Nov 19, 2020
The president's failed experiments with tariffs and bilateral deals helped validate old best practices.

Continued Strong Policy Action to Combat Uncertainty
Kristalina Georgieva (IMF) Nov 19, 2020
Multilateral efforts are vital to help the poorest economies through the crisis.

How the Middle East and Central Asia Can Limit Economic Scarring in the Wake of COVID-19
Klakow Akepanidtaworn, Oluremi Akin-Olugbade, Gareth Anderson, Dalmacio Benicio, and Joyce Wong (IMF) Nov 19, 2020
The economic crisis stemming from the COVID-19 pandemic is the largest and deepest shock of its kind in recent history and could do lasting damage to economies in the Middle East and Central Asia.

The impact of the new Asian trade mega-deal on the European Union
Uri Dadush (Bruegel) Nov 19, 2020
Although the economic implications of the Regional Comprehensive Economic Partnership (RCEP) for the EU are modest, the geopolitical and strategic implications are not. With the arrival of a new US administration and the central role of China in the bloc, the EU needs to outline an Asian commercial strategy that reconciles the importance of China and the transatlantic relationship.

Peter Breuer and Charles Cohen (IMF)Time is Ripe for Innovation in the World of Sovereign Debt Restructuring
Peter Breuer and Charles Cohen (IMF) Nov 19, 2020
The pandemic might be the force that catalyzes long overdue innovation in sovereign debt instruments that could facilitate restructurings and even help avoid them in the future.

China's Bullying of Australia Will Backfire
Mihir Sharma (Bloomberg View) Nov 19, 2020
For many countries, the argument for diversifying exports and supply chains is suddenly a lot more persuasive.

The Siren Song of Austerity
J. Bradford DeLong (Project Syndicate) Nov 19, 2020
Among the many lessons of the 2008 financial crisis and its aftermath in the United States is that there is no good reason to start worrying about debt when unemployment remains high and interest rates low. The hasty embrace of austerity derailed the last recovery, and it must not be allowed to do so again.

Macroprudential ring-fencing
Tomáš Konecný and Lukáš Pfeifer (VoxEU) Nov 19, 2020
The financial sector has an essential role to play in addressing the economic fallout from the Covid-19 pandemic. This column discusses the link between financial stability and restrictions on the mobility of capital along national borders of cross-border banking groups in the context of macroprudential capital buffers. It argues argue that apart from the direct absorption of systemic shocks, such macroprudential policies also enhance the performance of existing risk-sharing mechanisms, in particular in the case of synchronous shocks in the EU. The ESRB recommendation for restrictions of distributions during the pandemic contributes to the stabilising role of macroprudential capital buffers in the EU.

South Korea's Corporate Hierarchies Are Breaking Down
Frank Ahrens (FP) Nov 19, 2020
A new generation of familial leadership is relaxing business culture.

The elusive promise of Bitcoin
FT View Nov 20, 2020
Cryptocurrency has failed to provide investors with stability and protection.

Artificial intelligence is reshaping finance
Gillian Tett (FT) Nov 20, 2020
Barclays tie-up with Amazon in Germany shows how the technology is upending the sector.

Market turmoil shows need for more hedge fund scrutiny
Antonio Weiss (FT) Nov 20, 2020
Ructions in March put spotlight back on role of non-bank institutions in trading.

Why China could snarl global debt relief
John Dizard (FT) Nov 20, 2020
A new common framework for restructuring looks great, but there are complications.

The coming commodities surge
Merryn Somerset Webb (FT) Nov 20, 2020
As demand recovers, so will value stocks, energy and raw materials.

The next fight is over the new normal
Tom Braithwaite (FT) Nov 20, 2020
From 'humanised pets' to 'amenitised offices', there are competing visions for post-pandemic work.

Economic Policy Has Become a Partisan Game. That Could Do Long-Term Harm.
Neil Irwin (NYT) Nov 20, 2020
Mnuchin's move and Shelton's near-confirmation suggest a future of greater risks each time party control changes.

Is Trump Trying to Take the Economy Down With Him?
Claudia Sahm (NYT) Nov 20, 2020
His Treasury secretary is shackling the nation's central bank and closing an emergency program for local governments.

US sidelined as China, Korea and Japan unite
William Pesek (AT) Nov 20, 2020
On his presidential watch, Donald Trump did manage to make one thing great: economic cooperation within North Asia. So chaotic and pernicious was the outgoing US president's pivot away from Asia that China, Japan and South Korea are dropping the hatchet and joining hands.

Memo to the Federal Reserve on tools to fight the recession
David Wilcox (PIIE) Nov 20, 2020
The US economy has partially recovered from a historically deep downturn, but there is still a long way to go before the recovery will be complete.[1] The overall unemployment rate remained at 6.9 percent in October 2020, and the number of jobs was still 10 million below its February level. The consequences of the economic downturn have fallen disproportionately on women, people of color, and the lower rungs of the income ladder. As of late November 2020, fiscal policymakers still appear gridlocked over when to enact additional support for the economy, how substantial that support should be, and what form it should take.

The significance of the Regional Economic Partnership Agreement
Massimiliano Cali (Brookings) Nov 20, 2020
Good news for member countries, particularly non-ASEAN, but no substitute for multilateralism.

The U.S. Shouldn't Let Itself Be Left Behind on Trade
Bloomberg View Nov 20, 2020
The signing of a massive new free trade agreement in the world's most dynamic region should spur Democrats and Republicans to action.

Go On, Jump. A Pile of Soft Dollars Will Catch You
Daniel Moss (Bloomberg View) Nov 20, 2020
Central banks in Indonesia and the Philippines took a bold move to cut rates, largely thanks to a weaker greenback.

Treasury-Fed Clash Exposes Broader Policy Stress
Mohamed Aly El-Erian (Bloomberg View) Nov 20, 2020
Pressure is growing on the ability and willingness of officials to maintain the scale and scope of their initial responses to Covid-19.

City of London Wants to Clean Up the World
Elisa Martinuzzi and Marcus Ashworth (Bloomberg View) Nov 20, 2020
Britain is aiming to be a hub for carbon credit and green derivatives trading. It has the know-how but how much of a market is there?

G-20 Must Begin the Next Chapter in Multilateralism
Nic Dawes (Bloomberg View) Nov 20, 2020
The cure for pandemic-ravaged economies lies in a commitment to debt-relief and spending.

Why Subsidies Beat Lockdowns
Daniel Gros (Project Syndicate) Nov 20, 2020
As the second wave of the COVID-19 pandemic threatens Europe, governments should induce restaurant, bar, and shop owners to take a paid vacation, rather than ordering them to close. Such a policy promises much lower fiscal and social costs and would be politically far easier to sustain in the tough winter months ahead.

Economics in a Post-Pandemic World
Paola Subacchi (Project Syndicate) Nov 20, 2020
As the policy failures of recent decades have shown, navigating the intersection of economic theory and practice is never easy, especially when powerful and wealthy interests are involved. The task for economists, then, is to debate not just economics but political economy, and their own place in it.

America Must Mend Many Fences on Trade
Anne O. Krueger (Project Syndicate) Nov 20, 2020
The past four years of US protectionism and unilateralism will serve as a lasting reminder of how not to conduct trade policy in the twenty-first century. The Trump administration has utterly failed to achieve any of its stated objectives, and the incoming Biden administration will have to act quickly to repair the damage.

Unravelling deep integration: Local labour market effects of the Brexit vote
Beata Javorcik, Ben Kett, Katherine Stapleton, and Leyla O'Kane (VoxEU) Nov 20, 2020
The Brexit referendum created the threat of a trade policy reversal on an unprecedented scale, with the potential 'unravelling' of decades' worth of deep integration between the UK and the world's most integrated trading bloc. This column examines how this affected UK labour demand. It finds that UK regions exposed to the threat of future barriers on professional services exports experienced a substantial decline in the posting of online job adverts after the Brexit vote, relative to less exposed regions. A back-of-the-envelope calculation indicates that this resulted in approximately 1.5 million fewer job adverts posted after the vote than might have occurred otherwise.

Fintech and big tech credit markets around the world
Giulio Cornelli, Jon Frost, Leonardo Gambacorta, Raghavendra Rau, Robert Wardrop, and Tania Ziegler (VoxEU) Nov 20, 2020
Credit markets around the world are undergoing a transformation. Fintech and big tech firms are providing more lending to households and small businesses. Using a new database, this column estimates that fintech credit flows reached $223 billion in 2019, while big tech credit reached $572 billion. Both forms of credit are larger where there is greater (unmet) demand for credit and where economic and institutional factors favour the supply of such lending. The Covid-19 pandemic represents an important test for these new business models.

Resilience and fragility in global banking: Impacts on emerging economies
Marina Conesa Martínez, Giulia Lotti, and Andrew Powell (VoxEU) Nov 20, 2020
Global banks are highly connected, and banking systems are only as strong as the weakest links in the network. This column analyses cross-border syndicated lending to emerging and developing countries from 1993 to 2020 and finds evidence of both resilience and fragility in the global financial system. Contagion through co-lenders affected bank lending more strongly before and during the 2008-09 financial crisis but significantly less in a period after the crisis, consistent with the idea that the reduction in network density as a result of the crisis may have increased resilience to 'normal shocks'. But Covid-19 is clearly no normal shock, and its impacts are likely spreading through the network, affecting the supply of loans to emerging economies.

Bullish mood across markets leaves investors with a dilemma
Michael Mackenzie (FT) Nov 21, 2020
Healthcare could be one option in search for sectors with capacity to expand during 2020s.

Brexit crunch time? Traders say maybe later
Eva Szalay (FT) Nov 21, 2020
Currency markets are pricing in a deal but no longer believe in deadlines.

Green jobs must materialise if the UK is to lead the world in wind power
Camilla Cavendish (FT) Nov 21, 2020
The government needs to be ruthless about onshoring manufacturing as it weans the economy off carbon.

Many countries need debt relief
Economist Nov 21, 2020
But how and from whom?

Inflation May Be About to Pick Up Sharply
Richard Cookson (Bloomberg View) Nov 21, 2020
Avoiding longer-dated government and corporate debt and keeping to the very short end seems sensible.

Gravity with granularity
Holger Breinlich, Harald Fadinger, Volker Nocke, and Nicolas Schutz (VoxEU) Nov 21, 2020
Much of world trade is dominated by a small number of large firms. Market power becomes problematic for the estimation of gravity equations because many policy interventions also influence market shares and hence prices and the value of trade flows. This column proposes a method to correct the resulting inaccuracies in gravity equation estimation by adjusting trade flows for market power effects by subtracting a correction term that depends on the market share a firm or country has in the market in question. It finds membership in the euro area increases bilateral trade flows by around 48% before correcting for market power, and 58% after correction.

A long-run perspective on the productivity slowdown: Spain since 1850
Leandro de la Escosura and Joan R. Rosés (VoxEU) Nov 21, 2020
The current productivity slowdown in advanced economies has triggered a lively debate about its causes and remedies. This column takes a long-run perspective to study drivers of productivity expansion and stagnation in Spain during the last 170 years. It finds that the productivity slowdown coincided with resource reallocation towards sectors attracting less innovation, with low investment in intangibles and low investment-specific technical change. Obstacles to competition in product and factor markets, subsidies, and cronyism further contributed to capital misallocation, negatively affecting productivity growth.

The West's Constitutional Crises Threaten the Economy's Last Best Hope
Adam Tooze (FP) Nov 21, 2020
Central banks have kept their economies afloat this year—but political dysfunction is pushing them past the breaking point.

Pension populism threatens Andean economies
FT View Nov 22, 2020
Politicians' quick fixes amid the pandemic will prove costly in the long term.

Why there will be a Brexit deal
Peter Guilford (FT) Nov 22, 2020
Everyone wants one, good politics and economics favour it, and the only snag — emotions — can be overcome.

Shallow self-interest shapes the EU rule of law showdown
Martin Sandbu (FT) Nov 22, 2020
Other leaders should stand firm in resisting Orban and Kaczynski.

Could OPEC's House of Cards Collapse?
Julian Lee (Bloomberg View) Nov 22, 2020
The UAE may not be serious about quitting the oil cartel, but its tantrum is a timely reminder of the group's deep fractures.

On the development of fiscal capacity: Insights from Africa
Thilo Albers, Morten Jerven, and Marvin Suesse (VoxEU) Nov 22, 2020
Why do large differences in tax revenues between states exist and persist? This column introduces a comprehensive new dataset of tax and revenue collection for all African polities from 1900 to 2015 to answer this central question. The results confirm the importance of democratic institutions and political stability, while de-emphasising the role of resource revenues. Overall, states in Africa have been able to build institutions for the collection of 'hard' taxes when the preconditions were favourable, especially when access to external finance was limited. These insights add important nuance to established theories of state-building in developing countries.

The US Treasury's unnecessary fight with the Fed
FT View Nov 23, 2020
Removing monetary support should wait until fiscal stimulus is in place.

Xi's aim to double China's economy is a fantasy
Michael Pettis (FT) Nov 23, 2020
The idea that GDP can be twice as big in 2035 faces two significant obstacles: demography and politics.

Biden must break market's codependency with White House
Mohamed El-Erian (FT) Nov 23, 2020
Trump's approach widened the disconnect between traders and the real economy.

Why financial policymakers are still fighting the last war
Megan Greene (FT) Nov 23, 2020
The pandemic has exacerbated the aftershocks of the 2008 crisis.

A Fed Chair for Treasury
WSJ Nov 23, 2020
Yellen is likely to exert considerable influence over the central bank.

Boeing and Airbus Bicker While China Reaches for the Sky
James Bacchus (WSJ) Nov 23, 2020
The U.S. and EU have a common interest in ending their fight over airplane manufacturing.

Dragon flies, eagle crashes at geoeconomic summits
Pepe Escobar (AT) Nov 23, 2020
Four geoeconomic summits compressed into one week tell the story of where we stand in these supremely dystopian times. The (virtual) signing of RCEP, the Regional Comprehensive Economic Partnership, in Vietnam was followed by the equally virtual BRICS meeting hosted by Moscow, the APEC meeting hosted by Malaysia and the G20 this past weekend hosted by Saudi Arabia.

Japan's Covid-19 surge risks deflation relapse
William Pesek (AT) Nov 23, 2020
The idea of a "K-shaped" recovery has gained loads of attention in the Covid-19 era. It's when the wealthy get richer and things get worse for those in all tiers below.

Italy's Bank Troubles Are Back to Haunt It
Ferdinando Giugliano (Bloomberg View) Nov 23, 2020
Selling Monte Paschi won't be easy, but prolonging its nationalization is a terrible alternative.

Macron and Merkel's Brexit Legacy Isn't Safe Yet
Lionel Laurent (Bloomberg View) Nov 23, 2020
Cutting a trade deal with Boris Johnson, while standing up to Hungary's Viktor Orban on the rule of law, calls for more than muddling through.

Is India Letting Cronyism Get Deeper Into Banking?
Andy Mukherjee (Bloomberg View) Nov 23, 2020
New rules that encourage wannabe J.P. Morgans could take the financial system from mess to disaster within a decade.

Fed's ETF Purchases Have Changed Markets Forever
Brian Chappatta (Bloomberg View) Nov 23, 2020
The central bank's corporate-bond facilities may expire on Dec. 31, but their legacy will inform investor behavior for years to come.

A Good but Incomplete Start to Debt Relief
Paola Subacchi (Project Syndicate) Nov 23, 2020
After initially responding to the pandemic-induced economic crisis with an initiative to postpone developing countries' debt payments, the G20 has now come back to the table to offer a more plausible solution. But the new common framework for restructuring sovereign debt should be merely a first step in a longer process.

A Tale of Two Chinese Cities
Zhang Jun (Project Syndicate) Nov 23, 2020
By recognizing and investing in the strengths of pioneering cities and regions, China has developed a powerful mechanism for organizing and advancing its economic transformation. Judging by the tremendous success of Shenzhen and Shanghai, it seems clear that China will continue to reap the rewards of this approach for decades to come.

Europe's Faustian Bargain
Melvyn Krauss (Project Syndicate) Nov 23, 2020
Lost behind the news of the European Union's budget and recovery fund is a long-awaited improvement in the eurozone's internal balance. The convergence between north and south is such an important development that it will take precedence over guaranteeing member states' adherence to the rule of law.

Why India Refused to Join the World's Biggest Trading Bloc
Surupa Gupta and Sumit Ganguly (FP) Nov 23, 2020
New Delhi chose protectionism over the RCEP. History suggests it made the wrong call.

Small Business Lending during COVID-19
Remy Beauregard, Jose A. Lopez, and Mark M. Spiegel (FRBSF Econ Letter) Nov 23, 2020
Small businesses and farms were hit hard by restrictions that limited their ability to pay operating costs during the COVID-19 crisis. Banks played an important supportive role, substantially expanding the loans available to these firms during the early months of the crisis. The growth in lending was associated with small business participation in the Paycheck Protection Program (PPP) and bank use of the PPP Liquidity Facility. Analyzing data for the first half of 2020 suggests that these programs were successful in supporting lending growth during the crisis, particularly among small banks.

Biden Trade Policy: Status Quo Ante?
Jay H. Bryson, Brendan McKenna, Shannon Seery, and Jen Licis (WF Econ Group) Nov 23, 2020
President-elect Biden likely will conduct trade policy differently than his predecessor, but we remain skeptical that he will completely revert back to the pre-Trump era of trade policy.

Bearing the burden of coronavirus debt
FT View Nov 24, 2020
Wealthier countries can manage without rapid fiscal retrenchment.

The pressing urgency of more US fiscal relief
FT View Nov 24, 2020
Speed is more important than perfection as Congress dithers.

Spring has sprung in debt markets but shareholders face a long winter
Bryce Elder (FT) Nov 24, 2020
Cineworld's refinancing points to grim survival; Heathrow and high-end retailers battle VAT relief plans.

The shift to remote work carries an inherent risk
Sarah O'Connor (FT) Nov 24, 2020
If your job can be done from home, can it be offshored somewhere cheaper?

Lessons from Japan: High-income countries have common problems
Adam Posen (FT) Nov 24, 2020
There was just one lost decade of low growth and low inflation — when policy turned round so did the economy.

Bitcoin finally finds a rationale in doomsday scenarios
Izabella Kaminska (FT) Nov 24, 2020
The digital ecosystem draws support from being the currency of last resort.

The Dow Hits 30,000
WSJ Nov 24, 2020
Another sign of economic resilience amid the pandemic.

China's central bank walks a tightrope
William Pesek (AT) Nov 24, 2020
Seven years on, emerging markets remain traumatized by the Federal Reserve's "taper tantrum." In late 2013, just the hint that the world's most powerful central bank might trim asset purchases tanked markets from Jakarta to Johannesburg.

Memo to the European Central Bank on achieving the right fiscal-monetary policy mix
Olivier Blanchard (PIIE) Nov 24, 2020
This memo must start with a note of congratulation. While the European Central Bank (ECB) has not achieved its inflation target (and I shall come back to it below), it has stabilized financial markets and helped sustain economic activity in the euro area. This achievement was true during the financial and the euro crisis, and it has been true in the COVID-19 crisis as well.

Yellen Is an Excellent Choice for Treasury Secretary
Bloomberg View Nov 24, 2020
A Treasury that believes in sound economics and broad agreement where possible would be a welcome change.

Europe's Failings Are Back on Display
Ferdinando Giugliano (Bloomberg View) Nov 24, 2020
A vaccine won't cure Covid's long-term damage to the economy. The EU must rediscover its earlier urgency in tackling the fallout.

Is Boris Johnson's Britain Finally Turning a Corner?
Therese Raphael (Bloomberg View) Nov 24, 2020
Mass testing and positive vaccine news provide a glimmer of light at the end of a dark tunnel.

What Janet Yellen Doesn't Know
Karl W Smith (Bloomberg View) Nov 24, 2020
A premature concern about U.S. debt levels could hurt the economy.

A Tale of Two Economies
Stephen S. Roach (Project Syndicate) Nov 24, 2020
As financial markets celebrate the coming vaccine-led boom, the confluence of epidemiological and political aftershocks has pushed us back into a quagmire of heightened economic vulnerability. In Dickensian terms, to reach a "spring of hope," we first must endure a "winter of despair."

The G20 Debt Plan Does Not Go Far Enough
Shamshad Akhtar, Kevin P. Gallagher, and Ulrich Volz (Project Syndicate) Nov 24, 2020
Developing countries can emerge from the COVID-19 crisis and be prepared to pursue a green path to future prosperity only if their creditors adapt to the post-pandemic world. A bolder new debt-relief initiative rooted in global solidarity can help to reverse the recent increase in poverty worldwide, reduce damaging inequalities, and save our planet for future generations.

Restructuring the Debt-Restructuring Process
Willem H. Buiter and Anne Sibert (Project Syndicate) Nov 24, 2020
While the world has come a long way since the days when sovereign defaults where settled with gunboats, Argentina's recent restructuring shows that we still have not arrived at a sensible, orderly process. Beyond tweaks to the contractual framework, an entirely new governing mechanism is urgently needed.

Renewed Restrictions Point to European Economic Stumble
Jen Licis and Nick Bennenbroek (WF Econ Research) Nov 24, 2020
With the resurgence in COVID cases across the northern hemisphere, many governments have re-imposed restrictions or closures as well as stay-at-home orders in an effort to curb the second wave of infections. That said, we believe the potential for an economic stumble has increased.

Possible Downshift in Potential Output from COVID
Azhar Iqbal and Hop Mathews (WF Econ Group) Nov 24, 2020
In this report, we discuss the long-lasting economic effects from the 2007-09 recession and the implications for potential growth in the post-COVID era.

EU's rule of law mechanism threatens to fall short
Mehreen Khan and David Hindley (FT) Nov 24, 2020
For all the hype, conditionality tool risks never being used against illiberal governments

What the world can learn from the Covid-19 pandemic
Martin Wolf (FT) Nov 25, 2020
Important lessons are already emerging to help us manage the impact of such diseases better in future.

Goldman leads Wall Street bulls as markets ride high
Katie Martin (FT) Nov 25, 2020
Investor sentiment upbeat but some strategists point to reasons for caution.

Vaccine hopes set off rush for emerging markets
Jonathan Wheatley (FT) Nov 25, 2020
Fund managers pick sector as top trade for next year.

U.S. Economy Stumbles as the Coronavirus Spreads Widely
Ben Casselman (NYT) Nov 25, 2020
Claims for new unemployment benefits and other data suggest that the recent increase in infections is threatening the economic recovery.

China's free trade embrace a clarion reform moment
David P. Goldman (AT) Nov 25, 2020
Western analysts view Asia's Regional Comprehensive Economic Partnership (RCEP) as a Chinese victory against Washington's efforts to isolate it. Far more important are the implications for China's economy.

When will the global consumer class recover?
Max Thomasberger and Kelsey Wu (Brookings) Nov 25, 2020
The world's consumer class is set to shrink in 2020.

Coronavirus Is Helping African Economies Compete
Matthew A Winkler (Bloomberg View) Nov 25, 2020
Remote commerce was part of a boom before Covid-19. Now that's tending to limit the damage.

Confidence in German Capital Markets Has Been Shattered
Chris Bryant (Bloomberg View) Nov 25, 2020
Just like Porsche/Volkswagen, the regulatory lapses that let Wirecard go unchecked will live long in investors' memory.

Keeping the Global Focus on Low-Income Countries
Kristalina Georgieva and Sigrid Kaag (Project Syndicate) Nov 25, 2020
As bad as the COVID-19 pandemic has been for major advanced economies, it is even worse for low-income countries that entered the crisis with only limited resources and already-high debt burdens. The international community must do more to help these governments confront the virus, or this crisis will never truly be over.

A Triumph of German Innovation and Immigration
Hans-Werner Sinn (Project Syndicate) Nov 25, 2020
BioNTech's new-model RNA-based vaccine has emerged as the leading contender to bring an end to the COVID-19 pandemic, possibly within the coming year. Pioneered by a Turkish-German couple whose parents immigrated to Germany in the 1960s, the breakthrough's symbolic importance matches its practical value.

Faking Trade for Capital Control Evasion: Evidence from Dual Exchange Rate Arbitrage in China
Renliang Liu, Liugang Sheng, and Jian Wang (VoxChina) Nov 25, 2020
We examine whether firms over-report international trade to evade capital controls for foreign exchange arbitrage, by specifically testing whether the aggregate bilateral trade data gap between trading partners is positively (negatively) correlated with the exchange rate spread when the spread is positive (negative). At the disaggregated level, we also employ Benford's law to detect trade data manipulations. For both cases, we find evidence for dual exchange rate arbitrage activities camouflaged under the trade account in the trade data between the Chinese mainland and Hong Kong.

COVID-19, public procurement regimes, and trade policy
Bernard Hoekman, Anirudh Shingal, Varun Eknath, and Viktoriya Ereshchenko (VoxEU) Nov 25, 2020
A prominent feature of the public policy response to COVID-19 has been the active use of trade policy instruments to enable access to essential supplies. This column finds the use of export restrictions targeting medical products to be strongly positively correlated with characteristics of prevailing public procurement regimes. Membership of trade agreements encompassing public procurement disciplines is associated with actions to facilitate trade in medical products. These findings suggest that future empirical assessments of trade policy drivers during the pandemic should consider the role of national public procurement systems and deep trade agreements.

The EU plan to live in a raw materials world
Alan Beattie (FT) Nov 26, 2020
China supplies 98% of the bloc's rare earths, and has exploited that bottleneck.

How Janet Yellen will deploy her soft power at the Treasury
Brendan Greeley (FT) Nov 26, 2020
Former Fed chair knows how to get other economists to think the way she does.

ESG: a trend we can't afford to ignore
Michael Martin (FT) Nov 26, 2020
The pace of green change has rapidly accelerated as a byproduct of the pandemic.

The Truth About Chinese Bonds
WSJ Nov 26, 2020
Beijing's latest stab at financial reform is one of its riskiest.

What China's 14th Five-Year Plan Means for Investors
Stephen Chang, Annisa Lee, and Carol Liao (PIMCO) Nov 26, 2020
It will continue to be important to be an active investor during this period of transition and to carefully monitor the impact of policy on credit sectors.

The World's Oldest Bank Is in Dire Straits. Again
Elisa Martinuzzi (Bloomberg View) Nov 26, 2020
Monte Paschi is facing questions about its capital buffers. This is a real test for Italy and Europe.

OPEC Is Too Slow For Covid's Ever-Changing World
Julian Lee (Bloomberg View) Nov 26, 2020
Between lockdowns and vaccines, the outlook for oil demand remains uncertain. The cartel needs to be able to react quickly to any changes.

China's Global Climate Boost
Kevin Tu (Project Syndicate) Nov 26, 2020
Chinese President Xi Jinping's recent announcement that China aims to be carbon neutral before 2060 has sent positive shock waves through the climate-policy world. The European Union should now pick up where China left off and make its own 2050 net-zero emissions target legally binding.

Death by Algorithm?
Dirk Helbing and Peter Seele (Project Syndicate) Nov 26, 2020
Big data, artificial intelligence, and digital technologies have left us surprisingly ill-equipped for the challenges now facing us, such as climate change and the COVID-19 pandemic. Building resilience and flexibility – the hallmarks of sustainable systems – into policymaking and international cooperation is a more promising approach.

Division or Dialogue with China?
Andrew Sheng and Xiao Geng (Project Syndicate) Nov 26, 2020
Joe Biden's presidency amounts to a golden opportunity to initiate a direct and honest dialogue with China on issues that require constructive engagement. But time is of the essence. If Biden begins his term by choosing division over dialogue, changing course will soon become difficult, if not impossible.

Europe's Green Opportunity
Ann Mettler and Cyril Garcia (Project Syndicate) Nov 26, 2020
Now that the European Union has committed billions of dollars to stimulus spending geared toward confronting climate change, political and business leaders must ensure that these funds deliver the best possible return. Fortunately, there is no shortage of investment opportunities on offer.

Sticky expectations: A unified explanation for bond and currency puzzles
Eleonora Granziera and Markus Sihvonen (VoxEU) Nov 26, 2020
High short-term interest rates predict domestic currency appreciation and low excess returns for long-term bonds. These facts are at odds with two textbook conditions describing the relationship between different maturity interest rates and exchange rates: uncovered interest parity (UIP) and the expectations hypothesis. This column explains that both conditions can be reconciled with the data if agents are assumed to have sticky rather than perfectly rational expectations concerning short rates. It also demonstrates how this empirically motivated change in model assumptions has broad implications for interpreting the effects of monetary policy on exchange rates and yield curves.

The risks in the power of stock market indices
FT View Nov 27, 2020
The relentless rise of passive investing has increased their influence.

'Economic emergency' adds pressure for a rethink on fiscal rules
Chris Giles (FT) Nov 27, 2020
The debate on budget and spending is changing rapidly in the wake of the pandemic.

UK must keep its foreign aid promises
Justin Welby (FT) Nov 27, 2020
The commitment is not just about national pride but also national interest.

Spate of Chinese defaults tests investor confidence
Tom Mitchell (FT) Nov 27, 2020
Tremors shed light on weaknesses of world's second-biggest bond market.

Vaccines not politics are driving the soaring markets
Merryn Somerset Webb (FT) Nov 27, 2020
'Cheap' UK equities stand to benefit from a rotation into companies that will rise with a recovery.

Brexit Is Nipping at London's Role as a Financial Powerhouse
Eshe Nelson and Jack Ewing (NYT) Nov 27, 2020
Britain and the European Union don't trust each other much, and global banks are caught in the middle.

Europe is losing competitiveness in global value chains while China surges
Alicia García-Herrero and David Martínez Turégano (Bruegel) Nov 27, 2020
The European Union owes much of its economic weight to its regional value chain and integration into the global value chain. But the EU's global value chain role is shrinking, and while EU trade integration with China is increasing, it is mainly to China's benefit, undermining the EU's external competitiveness.

Depression-Era Secrets of Retail Survival
Stephen Mihm (Bloomberg View) Nov 27, 2020
How can smaller players get wiped out while the larger chains thrive? It's happened before.

Electric Carmakers Are in a Stock Market Bubble
Chris Bryant (Bloomberg View) Nov 27, 2020
The Tesla-led automotive revolution is real but valuations have become divorced from the messy reality of the industry.

A $364 Trillion Game of Brexit Chicken Gets Ugly
Lionel Laurent (Bloomberg View) Nov 27, 2020
The U.K. and the European Union are locked in a derivatives standoff driven by politics rather than what's best for investors.

Biden's Modest Multilateralism
Jeffrey Frankel (Project Syndicate) Nov 27, 2020
US President Donald Trump has made international cooperation almost impossible over the last four years. Although President-elect Joe Biden is unlikely to embrace multilateralism as wholeheartedly as presidents before Trump did, the US will at least once again keep its word when dealing with others.

Machines in the fight against corruption
Guido de Blasio, Alessio D'Ignazio, and Marco Letta (VoxEU) Nov 27, 2020
The use of artificial intelligence in preventing crime is gaining increasing interest in research and policymaking circles. This column discusses how machine learning can be leveraged to predict local corruption in Italy. It highlights how such algorithmic predictions could be employed in the service of anti-corruption efforts, while preserving transparency and accountability of the decisions taken by the policymaker.

The World's First Affluence Recession
Max Ehrenfreund (FP) Nov 27, 2020
The pandemic is making Americans poor—precisely because of the way they were rich.

Investors right to see through the gloom to economic upturn
John Plender (FT) Nov 28, 2020
Equities might wobble on coronavirus news but recovery is coming.

Let's Talk About Higher Wages
NYT Nov 28, 2020
The nation, and the Democratic Party, desperately needs a replacement for the tired story that tax cuts drive economic growth.

Christine Lagarde is taking the ECB out of its comfort zone
Economist Nov 28, 2020
That is causing some controversy among the experts.

Why I'm Losing Hope in India
Andy Mukherjee (Bloomberg View) Nov 28, 2020
Empty slogans and broken promises won't restore the country's economic prospects, let alone enable it to catch up with China.

The lasting effects of terms-of-trade shocks on business cycles
Federico Di Pace, Luciana Juvenal, and Ivan Petrella (VoxEU) Nov 28, 2020
The abrupt movements in commodity prices at the onset of the Covid-19 crisis have reignited policymakers' concerns over movements in the terms of trade. The shock has certainly confirmed that terms of trade are very volatile and extremely sensitive to changes in global economic activity. This column argues that these terms of trade shocks are likely to have a persistent impact on the business cycle of developing economies, which are particularly vulnerable to fluctuations in the price of their exports.

Japan's lesson on ageing gracefully
FT View Nov 29, 2020
Country shows that rising living standards can accompany a shrinking population.

Weak demand would derail Britain's economic comeback
Martin Wolf (FT) Nov 29, 2020
The UK should avoid a premature tightening of fiscal policy.

Warning lights are flashing for Big Tech as they did for banks
John Flint (FT) Nov 29, 2020
How the risks of financial services were managed can provide a model for the digital economy.

Big rebound in corporate earnings foreseen as pandemic shock eases
Bryce Elder (FT) Nov 29, 2020
Strategists predict biggest rally in global profits since 2003.

No-deal Brexit is the UK's biggest economic threat, not Covid
David Gauke (FT) Nov 29, 2020
Boris Johnson is avoiding difficult decisions and inconvenient truths.

The danger of weaponising trade for the environment
Ken Heydon (EAF) Nov 29, 2020
Pressure around the world is growing to apply penalty tariffs on imports from perceived environmental free riders. But such policies are a threat to trade and are unlikely to help the environment. Fortunately, there are better policy alternatives to deal with trade and environment linkages, including tackling fossil fuel subsidies.

Quo Vadis, Argentina?
César Chelala and Alberto Luis Zuppi (Globalist) Nov 29, 2020
Why is Argentina in such a sorry state, economically, politically and socially?

There's More Than Wine in Australia-China Trade Tension
Mohamed Aly El-Erian (Bloomberg View) Nov 29, 2020
The cost of playing both sides of an economic superpower battle is increasing.

Bitcoin Is Winning the Covid-19 Monetary Revolution
Niall Ferguson (Bloomberg View) Nov 29, 2020
The virtual currency is scarce, sovereign and a great place for the mega-rich to store their wealth.

Joe Biden Has Problems. The World Has Solutions.
John Micklethwait and Adrian Wooldridge (Bloomberg View) Nov 29, 2020
From the founding fathers to Silicon Valley, the U.S. has a long tradition of borrowing the best ideas from around the globe.

China Scores Big Against Poverty But the Poor Haven't Gone Away
Clara Ferreira Marques (Bloomberg View) Nov 29, 2020
Xi Jinping will soon celebrate the end of extreme rural destitution. Hundreds of millions of Chinese continue to struggle.

Technology within and across firms
Xavi Cirera, Diego Comin, Marcio Cruz, and Kyung Min Lee (VoxEU) Nov 29, 2020
Understanding how firms use technology in production is key for studying productivity and labour market outcomes. This column introduces a new approach to measure technology adoption at the business function level – the Firm-level Adoption of Technology survey. Using representative data from three countries, it finds a larger variance in technology sophistication within firms compared with across firms, and greater variance across firms than across countries or regions. Furthermore, a development accounting exercise suggests cross-firm technology differences account for one-third of the cross-firm productivity gap.

Farm product prices, redistribution, and the early Great Depression in the US
Joshua Hausman, Paul W. Rhode, and Johannes Wieland (VoxEU) Nov 29, 2020
Like the current economic crisis in the US, the Great Depression led to large redistributions of income among sectors and households. Perhaps most important, falling farm product prices shifted income away from farmers. This column argues that this redistribution explains between 10% and 30% of the US output decline in 1930. Recovery from the Great Depression began in 1933 in part because farm product prices rose, reversing this redistribution.

China edges towards greater financial discipline
FT View Nov 30, 2020
String of bond defaults changes assumptions on state guarantees.

Contrarian scenarios that could upset the market consensus
Robin Wigglesworth (FT) Nov 30, 2020
Year-end forecasts from strategists narrow to a common outlook as the pandemic shock eases.

The risks of the global Covid debt bridge
Gavyn Davies (FT) Nov 30, 2020
Markets seem unconcerned that the pandemic has left borrowing at all-time highs.

Why RCEP is a big deal
Eduardo Pedrosa and Christopher Findlay (EAF) Nov 30, 2020
The Regional Comprehensive Economic Partnership (RCEP) trade deal signed on 15 November is important to both its members and globally. The agreement is significant in its membership and coverage and it goes further than the ASEAN+1 agreements it was built on in its coverage and its deeper commitments to liberalise trade.

Why Central Bank Digital Currencies Are a Bad Idea
Tomas Forgac (Mises Wire) Nov 30, 2020
The reasons why digital currencies are a bad idea are the same reasons why central banks are sure to implement them.

Sustaining Low-Income Countries' Progress Towards the SDGs in a Post-COVID 19 World: What is Achievable?
Mark Plant and Sudhir Shetty (CGD) Nov 30, 2020
In the week preceding the October 2020 IMF and World Bank Annual Meetings, the Center for Global Development (CGD) held a four-day conference entitled, "Financing Low-Income Countries: Towards Realistic Aspirations and Concrete Actions in a Post-COVID World." The conference, originally planned for April 2020, had aimed at taking a realistic look at how low-income countries (LICs) could mobilize financing to achieve the 2030 sustainable development goals (SDGs). But like most things, the COVID-19 virus disrupted the timing and shifted our priorities and focus. Instead we decided to examine the financing landscape for LICs in the wake of COVID-19.

Rebuild the Trans-Pacific Partnership back better
Jeffrey J. Schott (PIIE) Nov 30, 2020
New challenges to US trade leadership in the Asia-Pacific region.

To become a high-income economy, China needs to invest more on its rural youth
Tianlei Huang (PIIE) Nov 30, 2020
China's economic growth has astonished the world and vaulted it to the status of an upper-middle-income country. Now the question is whether China can progress to becoming a high-income economy, as South Korea and Taiwan have, for example. Or will it remain stuck like Mexico or Brazil, failing to go beyond middle-income status? An important and informative new book Invisible China: How the Urban-Rural Divide Threatens China's Rise by Scott Rozelle and Natalie Hell, who are not just scholars but also practitioners, suggests that China lacks the educated workforce to capitalize on its success and reach the next rung in the ladder of development.

How the Rich Get Richer
Davide Malacrino (IMF) Nov 30, 2020
Wealth begets wealth. This simple concept of privilege has added to growing discontent with inequality that has escalated under the shadow of the COVID-19 pandemic.

OPEC+ Needs to Keep Its Covid-19 Mask On a Bit Longer
Liam Denning (Bloomberg View) Nov 30, 2020
Raising production could wreak havoc on the price of oil and member countries' finances.

To Deal With China, Biden Has to Make Up for Trump and Obama
David Fickling (Bloomberg View) Nov 30, 2020
There are limits to forging alliances because, as Australia is learning, Beijing is both more integrated into the global economy and aggressive about throwing its weight around.

Libor's Likely Reprieve Is a Welcome Acknowledgment of Reality
Mark Gilbert (Bloomberg View) Nov 30, 2020
Libor is flawed. But better to let it wither on the vine than try to force its early abolition.

If You Left the Market, Don't Wait to Get Back In
Nir Kaissar (Bloomberg View) Nov 25, 2020
That elusive ideal dip for reentry probably isn't going to materialize, and delaying just costs more money.

Virus Shouldn't Be Sole Focus for Biden Economic Aide
Michael R Strain (Bloomberg View) Nov 30, 2020
As the new Council of Economic Advisers chief, Cecilia Rouse should tackle chronic ills like lagging U.S. dynamism.

How Much Debt Is Too Much?
Raghuram G. Rajan (Project Syndicate) Nov 30, 2020
The new conventional wisdom in these unconventional times is that advanced-economy governments can take advantage of today's ultra-low interest rates to borrow and spend without limit in order to support the economy. But the fact is that there is always a limit, and it may come into view sooner than many realize.

Making Sense of Sky-High Stock Prices
Robert J. Shiller, Laurence Black, and Farouk Jivraj (Project Syndicate) Nov 30, 2020
Many have been puzzled that the world's stock markets haven't collapsed in the face of the COVID-19 pandemic and the economic downturn it has wrought. But with interest rates low and likely to stay there, equities will continue to look attractive, particularly when compared to bonds.

An Effective Response to Europe's Fiscal Paralysis
George Soros (Project Syndicate) Nov 30, 2020
With Hungary and Poland vetoing the European Union's budget and COVID-19 recovery fund, the case for issuing perpetual bonds has never been stronger. While the EU cannot currently do so, given uncertainty about its future, many of its member states can and should.

The US Economy Needs a Booster Shot
Laura Tyson and Lenny Mendonca (Project Syndicate) Nov 20, 2020
Heading into the holiday season, the United States is confronting a spike in COVID-19 infections and renewed restrictions on commerce. Unless Congress acts immediately to extend and expand support for workers, households, small businesses, and state and local governments, the hard-won gains from the previous stimulus could be lost.

How monetary policy affects investment in the euro area
Elena Durante, Annalisa Ferrando, and Philip Vermeulen (VoxEU) Nov 30, 2020
Monetary policy affects firms' investment behaviour through an interest rate channel and a balance sheet channel. This column uses investment data from over one million firms in Germany, Spain, France, and Italy to analyse the transmission of monetary policy shocks. It finds heterogeneity in the effects depending on firm size and industry – young firms and those producing durable goods react more strongly than the average firm. Embedding these findings into macroeconomic models used in policymaking would enhance the information available to decision makers.

The Crisis Opportunity
Jason Furman (FA) Nov 30, 2020
What it will take to build back a better economy.

Erdogan's Economic Hail Mary Won't Work
Shlomo Roiter Jesner (FP) Nov 30, 2020
Turkey's problem is the president himself; improvement won't come until he leaves.

Permanent and Transitory Effects of the 2008–09 Recession
Andrew Foerster and Lily M. Seitelman (FRBSF Econ Letter) Nov 30, 2020
Separating U.S. economic output into permanent and transitory components can help explain the effects of recessions and expansions. GDP growth shifted to a lower trend rate in 2000, indicating a slowdown long before the 2008–09 recession. GDP was substantially above trend before that recession; it then declined significantly and did not recover to its trend rate until 2017. The recession resulted in permanent losses to GDP. Without those permanent effects, GDP at the end of the latest expansion would have been about $380 billion or $1,460 per person higher.