News & Commentary:

Articles/Commentary

Greater private investment is essential to tackle the climate crisis
Sarah Gordon (FT) Nov 1, 2021
Achieving a just transition to meet the world’s energy demands must be a collective effort.

Will the ailing Turkish economy bring Erdogan down?
Laura Pitel (FT) Nov 1, 2021
Opposition parties are becoming bullish about defeating a leader who appears unwilling to change his idiosyncratic economic policies.

US holds back on support for global sustainability standards
Alan Livsey (FT) Nov 1, 2021
Objections to new international outfit aiming to bring clarity to ESG investment hinge on its broad approach.

The dawn of the quantitative tightening era?
Robin Wigglesworth (FT) Nov 1, 2021
Central banks have rattled bond markets, but fears of a radical new regime are overdone.

Time for the rich world to keep its promises on tackling climate change
Simon Mundy (FT) Nov 1, 2021
My travels drove home the disproportionate effect of the climate crisis on poorer communities.

A Biden Trade Win in Europe
WSJ Nov 1, 2021
Rolling back some Trump-era tariffs is good for both sides.

A Lobster Lesson in Geopolitics
WSJ Nov 1, 2021
Hong Kong is caught in the middle of a China-Australia trade spat.

Worker Shortage Could Bring Back Stagflation
Ron Johnson (WSJ) Nov 1, 2021
We can’t achieve strong economic growth without substantial expansion of the labor force.

US dangles IMF aid for military rights in Pakistan
FM Shakil (AT) Nov 1, 2021
The Biden administration is reportedly using restoration of the International Monetary Fund (IMF) ending facility as bargaining chip for Pakistan's counterterror assistance, with the IMF withholding the release of a US$1 billion tranche until the government closes commercial bank accounts held by the armed forces and other state entities.

The Durable Goods Boom Is More Sustainable Than It Looks
Justin Fox (Bloomberg Opinion) Nov 1, 2021
Consumer spending on items such as furniture and vehicles fell way below historical averages in the 2010s. It’s possible we’re playing catch-up now.

Credit Ratings Firms Were Asleep at the China Switch
Shuli Ren (Bloomberg Opinion) Nov 1, 2021
Moody's, S&P and Fitch were actually upgrading developers when the troubles began. Now, they are waking up and overreacting, only to worsen a selloff.

The COP26 Africa Needs
Akinwumi A. Adesina, Ngozi Okonjo-Iweala, Vera Songwe, and Ibrahim Assane Mayaki (Project Syndicate) Nov 1, 2021
As world leaders head to Glasgow for the United Nations Climate Change Conference, Africa needs decisive collective action rather than more encouraging words. In particular, rich countries should support a four-part financial and trade package that can ensure a transformative shift of resources to the region.

Will This COP Be Different?
Kenneth Rogoff (Project Syndicate) Nov 1, 2021
Limiting global warming to 1.5º Celsius remains just about attainable, but the path to this target is formidable. The United Nations climate summit now underway in Glasgow will indicate whether political efforts to achieve this goal are likely to heat up as fast as scientists tell us the planet is.

Reshuffle the Fed Board Now
Simon Johnson (Project Syndicate) Nov 1, 2021
Under the leadership of Jerome Powell, the US Federal Reserve seems headed for a massively consequential monetary-policy mistake. The best way to prevent it is to replace Powell with Lael Brainard, a Fed governor since 2014.

The globalisation backlash
Italo Colantone, Gianmarco Ottaviano, and Piero Stanig (VoxEU) Nov 1, 2021
As populist parties have surged across advanced democracies so, it seems, has a ‘globalisation backlash’. This column provides descriptive evidence on the backlash, discusses its theoretical underpinnings within standard trade models, and reviews the evidence on its drivers. It appears that globalisation is at stake partly due to reasons that are not strictly related to trade. The political sustainability of globalisation – and arguably of the international liberal order – will depend on how successful societies are at managing in a more inclusive way the distributional consequences of structural change.

Russian Ruble Back in Vogue
Brendan McKenna (WF Econ Group) Nov 1, 2021
2020 was a tough year for the Russian ruble. Interest rate cuts dampened the carry appeal of the currency, while the collapse in oil prices and sanctions also weighed on the prospects for the ruble. However, dynamics have changed this year and the ruble is currently the top performing emerging market currency. In our view, local and external conditions are likely to stay positive for the ruble and we expect the currency to gradually strengthen over the course 2022 and into early 2023.

Why China May Not Bail Out Evergrande
Roselyn Hsueh (FP) Nov 1, 2021
A complicated political calculus goes into which businesses Beijing cares about most.

Leaders must be more upfront about the costs of saving the planet
Megan Greene (FT) Nov 2, 2021
The economics of the green transition risk generating a backlash if not handled correctly.

Global investors turn cautiously optimistic on China
Tabby Kinder and Hudson Lockett (FT) Nov 2, 2021
Sentiment shifts after Evergrande crisis and Beijing’s regulatory assault pummels markets.

Why investors should collaborate to tackle climate change
Karina Funk (FT) Nov 2, 2021
Capital allocation must be aligned with tackling environmental risks.

Reducing global emissions can be simple and self-financing
Raghuram Rajan (FT) Nov 2, 2021
The world needs a plan that supplants fuzzy commitments with real penalties for the big polluters.

China’s power prices stoking runaway factory inflation
Jeff Pao (AT) Nov 2, 2021
Winter weather and rising heating demand in northeastern China are expected to keep coal prices high and industrial costs rising, an inflationary combination that threatens to weigh on economic growth. Inflationary pressures are building across the economy as winter season heating demand adds more fuel to fast-rising electricity rates.

Kishida’s ‘new capitalism’ is easier said than done
William Pesek (AT) Nov 2, 2021
The Fumio Kishida stock market bounce already has a “dead cat” quality to it. Yet, Sunday’s election might’ve set in motion a reboot for Kishida’s political fortunes and increases the odds that he will seek to assert his economic authority right out of the gate with increased stimulus. Yet early indications are that Kishida isn’t willing to ruffle any feathers.

How Car Shortages Are Putting the World’s Economy at Risk
Jack Ewing and Patricia Cohen (NYT) Nov 2, 2021
Because so many jobs depend on automaking, the industry’s production problems are causing the pain to ripple.

Brave New World: Tracking Trade from Space
Serkan Arslanalp, Robin Koepke, and Jasper Verschuur (IMF) Nov 2, 2021
When the onset of the pandemic drastically changed economic conditions across the globe, policymakers with access to real-time economic data were much better placed to make quick, informed policy decisions. A new world of big data is now unfolding, where satellites orbiting in space are helping to inform economic decisions—both for industry and policymakers.

Australia Leaves Room for Inflation to Sneak Higher
Daniel Moss (Bloomberg Opinion) Nov 2, 2021
After years of disappointment, rising prices are within the central bank’s target zone. Barely. Don’t expect officials to hike rates soon.

Central Banks Are Playing Catch-Up in Different Ways
Mohamed A El-Erian (Bloomberg Opinion) Nov 2, 2021
They are splitting into three camps on inflation when the global economy needs greater consistency.

What If Inflation Today Is Out of the Fed’s Control?
Ramesh Ponnuru (Bloomberg Opinion) Nov 2, 2021
The traumatic 1970s cycle was mostly demand-driven. The type we have now is mostly driven by supply shortages, and that’s not good news.

What South Africa Must Do
Nouriel Roubini and Colin Coleman (Project Syndicate) Nov 2, 2021
Locked in a low-growth trap, South Africa's fiscal and macroeconomic situation is unsustainable, not only economically but also politically. To salvage the country's democratic project, the government must offer a credible, comprehensive economic reform strategy.

Will Deglobalization Fuel Inflation?
Dalia Marin (Project Syndicate) Nov 2, 2021
Some economists argue that the pandemic-driven retreat from globalization, together with population aging in China and the advanced economies, is a recipe for inflation. But while workers' bargaining power may rise, a wage-price spiral in the advanced economies is unlikely.

Saving Paris: An economically efficient and equitable rescue plan
Avinash Persaud (VoxEU) Nov 2, 2021
To meet the Paris agreement, the world would have to eliminate 53.5 billion metric tonnes of carbon dioxide each year for the next 30 years. This column proposes a plan to meet the costs of this in an equitable way. Countries that contribute most to the stock of GHGs could issue an instrument that gives investors in projects anywhere in the world that reduce emissions the right to borrow from them at their overnight interest rates – which are currently near zero – and to roll over this borrowing for as long as the project delivers some minimum rate of reduction in emissions per dollar invested. Luckily, such an instrument already exists in the form of the IMF’s Special Drawing Rights.

Why Mexico’s Drug Trade Is So Violent
Ann Deslandes (FP) Nov 2, 2021
A new book clears away the many cliches that have come to shroud the transnational business in illegal drugs.

How we can share our divided world
Martin Wolf (FT) Nov 3, 2021
Co-operation is essential if nations are to provide the necessary global public goods for humanity.

Myanmar’s junta kills off all economic hope
Bertil Lintner (AT) Nov 3, 2021
As Myanmar descends deeper and deeper into civil war, a conflict driven by nationwide resistance to the military’s disastrous democracy-suspending coup, the economy is taking the brunt of the chaotic collateral damage. Data shows that the economy contracted a whopping 18% in the year period spanning October 2020 to September 2021.

Biden Vs. Xi: The Global Battle for Restoring Domestic Economic Balance
Andrés Ortega (Globalist) Nov 3, 2021
How the fight against inequality at home unites — and separates — Biden and Xi Jinping. And who seems to have the upper hand.

Fed taper elicits market yawn
Joseph E. Gagnon (PIIE) Nov 3, 2021
The Federal Open Market Committee (FOMC or Fed) announced at its November 3, 2021, meeting that it will reduce monthly bond purchases by $15 billion in late November and another $15 billion in late December. If it continues to taper bond purchases at this rate, there will be no more net bond purchases after mid-June of 2022. The decision was widely expected. Bond yields and the dollar moved very little after the announcement; stock prices rose slightly.

How the structure of global aid and development finance is changing
Akihiko Nishio and Gaiv Tata (Brookings) Nov 3, 2021
COVID-19 has delayed plans and progress worldwide, especially in developing countries, where complex challenges existed even before the pandemic. For these countries, external finance—particularly development assistance—has been a source of support for economic transformation, and progress toward the Sustainable Development Goals (SDGs). To understand how to address financing needs emerging from this unprecedented crisis, we need to look at the evolution of the global aid architecture over the past two decades.

The Fed Has More to Do Than the Market Recognizes
William C Dudley (Bloomberg Opinion) Nov 3, 2021
The central bank might need to raise interest rates more than twice as high as investors anticipate.

China Is Permanently Damaging Its Marketplace
Shuli Ren (Bloomberg Opinion) Nov 3, 2021
Talk of war, stagflation and rationing is eroding the country’s confidence and affecting the dynamics of its financial industry

Why Are Supply Chains Blocked?
Michael Spence (Project Syndicate) Nov 3, 2021
When forecasts are not specific enough to be actionable, the supply response cannot adjust in a timely or efficient manner. And because there is relatively little slack built into global supply chains, large deviations from normal patterns produce delayed responses, shortages, backlogs, and bottlenecks, like those today.

Is Multilateralism a Fig Leaf?
Ngaire Woods (Project Syndicate) Nov 3, 2021
International organizations must manage a constant tension between the interests of their most powerful member states and those of the rest. Three factors – leadership, effective internal processes, and transparency – are crucial to managing these strains.

Back to Austerity?
Harold James (Project Syndicate) Nov 3, 2021
For every burst of euphoria about the potential of government spending, there is an inevitable reversion to fiscal consolidation and tighter restrictions. If the public is demanding an expansion of the state, the task for policymakers is to determine not how much to spend, but how best to spend it while the opportunity lasts.

Africa Must Lead on Capital Flight
Carlos Lopes and Ricardo Soares de Oliveira (Project Syndicate) Nov 3, 2021
The Pandora Papers revealed a wealth of information about the inner workings of offshore finance, leading to calls for international action to combat tax avoidance and evasion. This has been a longstanding problem in Africa, yet organizations on the continent are not leading the push for reform.

Does External Monitoring from the Government Improve the Performance of State-Owned Enterprises?
Shengyu Li and Hongsong Zhang (VoxChina) Nov 3, 2021
We investigate the impact of external monitoring from the government on state-owned enterprise performance, using the variation in monitoring strength arising from a nationwide policy change and firms’ geographic location in China. We utilize a structural approach to estimate input prices and productivity separately at the firm level using commonly available production data. We show that enhanced external monitoring, as a key component of corporate governance, can substantially reduce managerial expropriation in procurement and shirking in production management. The results suggest that government monitoring can be an effective policy instrument to improve state-owned enterprise performance.

Developing economy debt after the pandemic
M. Ayhan Kose, Franziska Ohnsorge, Carmen Reinhart, and Kenneth Rogoff (VoxEU) Nov 3, 2021
Global government debt soared in last year’s pandemic-induced global recession. It may now be tempting to rely on the post-pandemic growth and inflation rebound to reduce debt burdens. This column argues, however, that medium-term growth prospects are dimming and inflation helps reduce debt burdens only under particular circumstances. As a result, some developing economies may eventually need to resort to debt default to restore fiscal sustainability, with the associated heavy economic and political cost. The global community can help by coordinating prompt and efficient debt relief and restructuring.

Domestic climate policy and cross-border bank lending
Emanuela Benincasa, Gazi Kaba?, and Steven Ongena (VoxEU) Nov 3, 2021
The stringency of climate policy varies from one country to the next. This column examines global syndicated loans to show that banks increase their cross-border lending in response to greater climate policy stringency in their home country, if the home country has more stringent climate policy than the borrowers' countries. Used in this way as a regulatory arbitrage tool, cross-border lending can reduce the effectiveness of climate policies if global coordination is not enforced.

Inflation is one thing not in short supply
John Redwood (FT) Nov 4, 2021
Central banks show signs of wobbling in their resolve to keep money loose.

RCEP trade pact good to go on Jan 1, 2022
Scott Foster (AT) Nov 4, 2021
Those who see Asia-Pacific trade solely through the lens of US-China competition are fond of portraying RCEP as a China-led initiative aimed at rewriting the rules of international trade to Beijing’s advantage. That is contrary to the facts. All the Asia-Pacific democracies were involved in the long process of RCEP’s development and all of them signed it on November 15, 2020.

Partha Dasgupta: ‘It’s not a giant step to introduce nature into economics’
Leslie Hook (FT) Nov 4, 2021
The Cambridge professor says macroeconomic forecasts do not account for ‘violent’ damage to ecosystems.

China stocks bounce after regulatory shock and awe
William Pesek (AT) Nov 4, 2021
Rebound points to China's still massive profit potential but Beijing needs to get its policy mix right to sustain the momentum.

China, EU launch finance taxonomy for green assets
Jeff Pao (AT) Nov 4, 2021
New taxonomy will cover energy, manufacturing, construction and transportation, and aim to lower green product transaction costs.

From hibernation to reallocation: loan guarantees and their implications for post-COVID-19 productivity
Lilas Demmou and Guido Franco, OECD Economics Department (OECD Ecoscope) Nov 4, 2021
Hibernation rather than zombification in the short-term, but reallocation may slow down in the medium-term.

The Coming Shock That Will Transform the U.S. Economy
Tyler Cowen (Bloomberg Opinion) Nov 4, 2021
The rise in telecommuting will redefine jobs, remake industries and revolutionize labor markets.

OPEC+ Isn’t a Cartel, But It Isn’t a Regulator Either
Liam Denning (Bloomberg Opinion) Nov 4, 2021
The Saudi energy minister must be kidding when he suggests the group helps keep oil prices stable.

Earth’s Value Is Being Left Off the Balance Sheet
Mark Buchanan (Bloomberg Opinion) Nov 4, 2021
The international system of accounts that tallies the economic and financial costs of global warming fails to include one vital asset: the environment itself.

Pre-Crypto Currency Clashes Always Favored Governments
Stephen Mihm (Bloomberg Opinion) Nov 4, 2021
History is clear on the story of money: Nation-states have limited patience for private competition and a whole lot of power.

So Much for the Great Unwind. Easy Money Isn’t So Easy to Quit.
Daniel Moss (Bloomberg Opinion) Nov 4, 2021
This week was billed as show time for inflation hawks. But easy money isn’t ready for the archives just yet.

Toward European Green Cohesion
Lilyana Pavlova (Project Syndicate) Nov 4, 2021
As a new strategy outlined by the European Investment Bank notes, the European Union's regional funding policies must evolve to address multiple goals at once, starting with the transition to a net-zero economy. Cohesion and climate action are now two sides of the same coin.

The Greening of Global Value Chains
Erik Berglöf (Project Syndicate) Nov 4, 2021
The COVID-19 pandemic has highlighted the importance of global value chains for the world economy, as well as for low- and middle-income countries' growth prospects. But the crisis has also highlighted the role GVCs can play in accelerating the net-zero transition.

Proximity to the frontier, markups, and the response of innovation to foreign competition
Ana Cusolito, Alvaro Garcia Marin, and William Maloney (VoxEU) Nov 4, 2021
The impacts of rising competition on innovation remain unclear, and often depend on country context. This column analyses the impact of increased import competition from China on innovation by Chilean firms. It finds a negative overall impact of competition on innovation indicators. Low-productivity firms in particular see declines across all innovation measures, while the most productive firms experience improvements in product innovation and product quality. Raising the capabilities of firms and their access to resources may be an important complement to pro-competition policies.

The end of the bond market bull run
FT View Nov 5, 2021
Central banks have begun the slow process of normalising monetary policy.

Fed feat extends the party for stock markets
Katie Martin (FT) Nov 5, 2021
Equities still in a sweet spot but hangover from monetary excesses still looms.

Are investors facing a Yukos moment in China?
Mohamed El-Erian (FT) Nov 5, 2021
Buy-the-dip opportunity is balanced by risks of further government intervention.

Emerging markets miss out on 2021 stock rally in developed economies
Joanthan Wheatley (FT) Nov 5, 2021
MSCI’s EM equity barometer trails behind by most since ‘taper tantrum’ eight years ago.

Why didn’t the Bank of England act on interest rates?
Merryn Somerset Webb (FT) Nov 5, 2021
With forecasts of 5% inflation next year, rates should surely be on the rise.

Countering Tax Avoidance in Sub-Saharan Africa’s Mining Sector
Giorgia Albertin, Dan Devlin, and Boriana Yontcheva (IMF) Nov 5, 2021
Targeted policy actions to reduce tax avoidance could help governments recover some of this badly needed tax revenue.

Elon Musk, billionaires, and the United Nations: The 1% solution to global development
Homi Kharas (Brookings) Nov 5, 2021
Billionaires can impact billions of lives.

Germany's Chinese Kowtow
Melvyn B. Krauss (Project Syndicate) Nov 5, 2021
Germany is simply too hooked on exports to China to adopt a tougher stance regarding the communist regime’s appalling human-rights record. And Germany’s authoritarian-friendly China policies are unlikely to change when Olaf Scholz, the Social Democratic Party leader and expected future chancellor, takes office.

What Europe's Energy Crunch Reveals
Daniel Gros (Project Syndicate) Nov 5, 2021
Societies that cannot accept today’s energy prices are unlikely to prepare adequately for the green transition, regardless of their long-term net-zero promises. They are instead likely to act too late and thus too suddenly, which will be not only economically costly, but also politically untenable.

Metals may become the new oil in net-zero emissions scenario
Lukas Boer, Andrea Pescatori, Martin Stuermer, and Nico Valckx (VoxEU) Nov 5, 2021
Low greenhouse gas technologies require more metals than their fossil fuel-based counterparts. This column estimates supply elasticities and pins down the price impact of the energy transition on the metals markets. The results show that prices for copper, nickel, cobalt, and lithium could reach historical peaks for an unprecedented, sustained period in a net zero emissions scenario. The total value of production could rise more than four-fold for the period2021-2040, rivaling the total value of crude oil production.

Xi Is Running Out of Time
Daniel H. Rosen (FA) Nov 5, 2021
China’s economy heads for a hard landing

COP26 should not forget about carbon pricing
Jumana Saleheen and Paul Butterworth (FT) Nov 6, 2021
Businesses need clarity around regulation, taxes and net-zero targets.

The uses and abuses of green finance
Economist Nov 6, 2021
Why the net-zero pledges of financial firms won’t save the world.

Americans Are Flush With Cash and Jobs. They Also Think the Economy Is Awful.
Neil Irwin (NYT) Nov 6, 2021
The psychological effects of inflation seem to have the upper hand.

China to grow faster than expected in 2022
David P. Goldman (AT) Nov 6, 2021
China’s lower-than-forecast 4.9% gross domestic product (GDP) growth rate in the third quarter of 2021 was mainly an artifact of state management, and to a smaller extent the result of state blunders. The country continued to grow first of all because consumption growth stayed on trend, and secondly because of strong net exports.

Hey, Elon: We Made a $6 Billion Plan to End World Hunger
Amanda Little (Bloomberg Opinion) Nov 6, 2021
Surging demand for emergency food aid highlights the need to invest heavily in a paradigm shift toward sustainable agriculture.

Structural transformation in the era of global agricultural value chains
Sunghun Lim (VoxEU) Nov 6, 2021
Agricultural global value chains grew rapidly after WWII, transforming the nature of agri-food production worldwide. Still, little is known about how taking part in these chains changes the structure of an economy. This column constructs a panel dataset from 155 countries for the period from 1991 to 2015, examining the effect that participation had on each country’s structural transformation and uncovering evidence that runs counter to conventional wisdom: modern agrarian economies are leapfrogging the manufacturing sector to develop their agriculture and service sectors through participation in agricultural global value chains.

Why innovation could stop inflation
Rana Foroohar (FT) Nov 7, 2021
Technological progress may be the most powerful disinflationary force in a changing world.

Oil Producers Deliver a Masterclass in Gaslighting
Julian Lee (Bloomberg Opinion) Nov 7, 2021
OPEC’s lack of interest in the current energy crisis should be a wake-up call to countries expecting the group to help.

Good morning, institutional integration
Nauro Campos, Fabrizio Coricelli, and Emanuele Franceschi (VoxEU) Nov 7, 2021
Economic integration has certainly deepened and, more recently, changed enormously. Until the late 1990s integration was mostly trade-centred, while it now can be better described as institutions-centred. This column introduces the notion of ‘institutional integration’, identifies its main features, and provides estimates of its net benefits. With one of the first applications of the synthetic difference-in-differences estimator and using data from the 1995 enlargement of the EU, the authors find that the failure to embrace institutional integration by Norway (compared to ‘only’ embracing deep integration) generates yearly productivity losses of about 0.6 percentage points.

The quest for the perfect measure of human progress is distracting
Ruchir Sharma (FT) Nov 8, 2021
Gross domestic product is a crude way to assess happiness, but those seeking to replace it may be wasting precious time.

Travel sector braces for post-pandemic world
Alice Hancock and Philip Georgiadis (FT) Nov 8, 2021
After losing $6tn during the crisis, the industry from hotel groups to airlines must navigate a precarious-looking future

China’s self-isolation is a global concern
Gideon Rachman (FT) Nov 9, 2021
Beijing’s zero-Covid policy is damaging international business and global governance.

How to Think About the Covid Recession
Austan Goolsbee (NYT) Nov 8, 2021
When will the U.S. economy improve?

US and EU economies hang on Chinese imports
David P. Goldman (AT) Nov 8, 2021
China’s exports to the United States and the European Union now amount to nearly 30% of manufacturing GDP, after an unprecedented surge in shipments this year. US imports from China are 30% higher than before the Covid-19 pandemic, and Europe’s imports are 50% higher. These margins of increase have an important macroeconomic impact.

Will the world economy return to normal in 2022?
Economist Nov 8, 2021
If it does not, a painful economic adjustment looms.

Thanks to Bailouts, Wall Street Banks Are More Fragile than Ever
Doug French (Mises Wire) Nov 8, 2021
After the Lehman collapse, Wall Street learned nothing. In fact, Wall Street instead embraced Too Big to Fail which means the financial sector is more dependent on government than ever before.

How Much Is President Bolsonaro Contributing to Brazil’s Malaise?
Peter Schechter and Juan Cortinas (BRINK) Nov 8, 2021
Brazil’s President Jair Bolsonaro entered power as a nontraditional, “different” politician. Three years later, the Bolsonaro show has gotten stale for many, paving the way for a potential regime change.

Mexico on the Rebound
Swarnali Hannan and Kevin Wiseman (IMF) Nov 8, 2021
The Mexican economy is rebounding from its deepest downturn in decades.

5 Central Bank Unknowns That Will Shape Markets in 2022
Lena Komileva (Bloomberg Opinion) Nov 8, 2021
Pronouncements from the Fed, BOE and ECB reveal a wide disconnect between market expectations and monetary policy.

Alan Greenspan Has a Word or Two of Advice for Markets
Daniel Moss (Bloomberg Opinion) Nov 8, 2021
And that’s it. Too much central bank communication can become a liability.

The Case for Chinese Foreign Aid
Nancy Qian (Project Syndicate) Nov 8, 2021
Critics have long accused China of using foreign aid to advance its geopolitical goals, rather than to help the world’s poor. But recent studies suggest that Chinese development assistance is a rare example of aid that systematically and meaningfully benefits recipient countries.

Why All the Inflation Worries?
J. Bradford DeLong (Project Syndicate) Nov 8, 2021
Some respected economists are talking as if the US economy is in serious inflationary trouble. But the current uptick in price growth is highly likely to be a largely benign consequence of the post-pandemic recovery.

Place-based policies and the geography of corporate investment
Cameron LaPoint and Shogo Sakabe (VoxEU) Nov 8, 2021
Growing spatial inequality has led policymakers to offer firms tax breaks to attract investment and jobs to economically peripheral regions. This column examines a place-based bonus depreciation scheme in Japan which granted high-tech manufacturers immediate cost deductions from their corporate income tax bill. The policy generated big gains in employment and investment in building construction and in machines at pre-existing production sites. This response was driven by firms which rely on costly but long-lived capital inputs like industrial machines. How firms react to spatially targeted tax incentives ultimately depends on their internal network and their composition of intermediate capital inputs.

Bureaucracy and development
Tim Besley, Robin Burgess, Adnan Khan, Jonathan David Old, and Guo Xu (VoxEU) Nov 8, 2021
How does bureaucracy matter for development? Over the last years, an enormous interest in this question has created a large body of research, mostly focused around evidence from field experiments and micro-level administrative data. This column reviews this recent literature and embeds it in the broader discussion on how bureaucracies contribute to economic development. The authors argue that this recent evidence matters, but also encourage future research to study bureaucracies as systems, and to analyse their systemic relations to politics, citizens, firms, and NGOs.

What Would It Cost to Issue 50-year Treasury Bonds?
Jens H.E. Christensen, Jose A. Lopez, and Paul L. Mussche (FRBSF Econ Letter) Nov 8, 2021
The longest-term U.S. Treasury bonds that investors can buy mature in 30 years. Some other countries offer up to 50-year government bonds. Examining these foreign bond markets and extrapolating U.S. Treasury yields to evaluate such longer-term options suggests that the extra costs of introducing 50-year bonds relative to conventional 30-year bonds are likely to be small on average. Because the U.S. fiscal deficit remains substantial, such longer-term debt instruments could provide an attractive opportunity to finance the growing debt in a sustainable way.

Jay Powell should get a second term at the Fed
FT View Nov 9, 2021
Reappointing central bank chair would provide some much-needed stability.

The World Needs to Quit Oil and Gas. Africa Has an Idea: Rich Countries First.
Shola Lawal (NYT) Nov 9, 2021
As negotiators at the Glasgow climate talks try to agree on greenhouse gas cuts, African leaders say poorer countries can’t be expected to remake their systems as quickly as wealthy ones.

As China’s Property Crisis Spreads, Beijing Says There’s Nothing to See
Alexandra Stevenson and Joy Dong (NYT) Nov 9, 2021
Global markets just weeks ago were fretting over the possible failure of Evergrande. Now the developer says the worst is over, even as other companies show signs of trouble.

Sterling Is Down and the Worst May Be Yet to Come
Marcus Ashworth (Bloomberg Opinion) Nov 9, 2021
The pound is facing political and financial headwinds and may test lows from earlier this year.

If Brazil’s Democracy Falters, All Latin America Is in Danger
Henry Brands (Bloomberg Opinion) Nov 9, 2021
In the 1970s and 1980s, South America’s largest nation was a bellwether for political liberty in the region.

Where America's Fiscal Debate Goes Off the Rails
Barry Eichengreen (Project Syndicate) Nov 9, 2021
The debates about investment in physical and social infrastructure are precisely what the US needs to decide what kind of society it should be and the appropriate role of government. Where there should be no debate is how best to finance such investment.

Finance Must Combat Climate Change – or Else
Bevis Longstreth and Connor Chung (Project Syndicate) Nov 9, 2021
Despite the increasing urgency of the climate crisis, many of the world’s most powerful financial actors have continued to invest in the fossil-fuel industry. But a new trend in the law is forcing institutional investors to decarbonize their portfolios – or be held legally accountable.

When industrial policy worked: The case of South Korea
Jaedo Choi and Andrei Levchenko (VoxEU) Nov 9, 2021
Industrial policy is back on the agenda in high-income countries. This column examines the impact of firm-level industrial policy measures in the 1970s on the South Korean economy. The authors find that South Korea’s heavy and manufacturing industries are an example of where activist industrial policy appears to have succeeded, with the temporary subsidies having a large and statistically significant effect on firm sales as long as 30 years after they ended. However, today’s policymakers face the same challenge as those in the past: identifying conditions – such as dynamic productivity effects or externalities – under which activist industrial policy is welfare-improving.

Australia Shows the World What Decoupling From China Looks Like
Jeffrey Wilson (FP) Nov 9, 2021
The bottom line: Beijing’s attempt to bully Canberra has been a spectacular failure.

Britain’s game of Brexit chicken will end badly
Martin Wolf (FT) Nov 10, 2021
In threatening to repudiate its deal with the EU, the UK is undermining its credibility as a reliable partner.

Australia’s move to end yield curve control exposes the policy’s flaws
Sophia Rodrigues (FT) Nov 10, 2021
Reserve Bank’s struggle to exit cap on bond yields holds lessons for other central banks, experts say.

Bonds are an ESG blind spot in investing
John Plender (FT) Nov 10, 2021
The push by fund managers for decarbonisation and social responsibility is primarily an equity market phenomenon.

Inflation and Building Back Worse
WSJ Nov 10, 2021
Joe Manchin has ample reason to kill spending that is harming workers.

First green shoots of economic recovery in Philippines
Richard Javad Heydarian (AT) Nov 10, 2021
Despite the reimposition of strict Covid-19 lockdowns and a laggard vaccination rollout, the Philippines managed to post a better-than-expected growth rate, reporting 7.1% gross domestic product (GDP) growth in the third quarter of the year, placing the country well on the path to meeting its target of 4-5% GDP growth this year.

Soaring Metal Prices May Delay Energy Transition
Lukas Boer, Andrea Pescatori, Martin Stuermer and Nico Valckx (IMF) Nov 10, 2021
Prices could reach historical peaks for an unprecedented length of time—and even delay the energy transition itself.

Fed will act on inflation when it needs to
Paul Sheard (OMFIF) Nov 10, 2021
Elevated inflation readings, particularly in the US, are causing many pundits to express a dim view of the pandemic-triggered fiscal and monetary expansions. They warn of looming runaway inflation. The premise underlying the modern macroeconomic policy framework is that central banks can and will control inflation over the medium term. Expect the Fed to take away the punchbowl when it judges it really needs to.

Biden’s Fed Appointments Should Send a Message
Narayana Kocherlakota (Bloomberg Opinion) Nov 10, 2021
The central bank needs to be independent, effective and more diverse.

Is Crypto Really Worth $3 Trillion? I Ran the Numbers.
Aaron Brown (Bloomberg Opinion) Nov 10, 2021
The potential of digital currencies is far greater than any one company today, but the risk is far higher.

Wages Are Heading Up, But They’re Not Pushing Inflation
Nir Kaissar (Bloomberg Opinion) Nov 10, 2021
The pay increase is nice, but it will have to be a lot higher before it contributes meaningfully to faster price growth.

China Leaves Money on the Table in Its Euro Bond Sale
Marcus Ashworth (Bloomberg Opinion) Nov 10, 2021
Beijing’s finance mavens missed out by bypassing the booming market for green debt.

Will France Derail West Africa's Common Currency?
Simplice A. Asongu (Project Syndicate) Nov 10, 2021
In 2019, the first currency union in Africa seemed poised to become a reality – until an unexpected intervention by Emmanuel Macron disrupted the process. Macron has said he wants to examine France’s legacy in Africa and establish a new relationship with its former colonies, but his actions speak louder than his words.

How to Make Decarbonization Economically Sustainable
Jim O'Neill (Project Syndicate) Nov 10, 2021
This year's energy price volatility offers a painful reminder of what the transition to a net-zero-emissions economy entails. For the effort to succeed, countries at all levels of development will have to be brought along, which means that the world will need to do much more to manage energy supply.

Monetary and fiscal policies: In search of a corridor of stability
Claudio Borio and Piti Disyatat (VoxEU) Nov 10, 2021
Monetary and fiscal policies, as deeply entwined functions of the state, face a looming dual long-term challenge. This column argues that they need to regain policy headroom to be able to effectively fulfil their macro-stabilisation role. And once these safety margins are restored, the policies need to remain firmly within a ‘corridor of stability’, in which neither can endanger the other or push it to the limit. In addition, navigating the path ahead will require a mix of ‘opportunistic normalisations’ and structural reforms to raise long-term growth.

U.S. Monetary Policy: The Risks Are Two-Tailed
Sarah House and Michael Pugliese (WF Econ Group) Nov 10, 2021
In this report, we explore the drivers of the run-up in inflation, as well as what the FOMC can and cannot do about them, and discuss what this tells us about the prospects for a potential policy mistake.

Fed’s inflation miscalculations risk hurting the poor
Mohamed El-Erian (FT) Nov 11, 2021
The slower the response to increasing prices, the greater the threat of contractionary forces for the economy.

Americans Are in a Funk About the Economy. How Long Will It Last?
Spencer Bokat-Lindell (NYT) Nov 11, 2021
Americans feel good about their own financial situations, but their general outlook on the economy is anything but sunny.

History Says Don’t Panic About Inflation
Paul Krugman (NYT) Nov 11, 2021
This year looks more like 1947 than like 1979.

Do not underestimate inflation. Higher prices are punishing U.S. workers.
WaPo View Nov 11, 2021
Managing the post-pandemic economy is looking even more challenging than it seemed.

The Yield Control Bust in Australia
WSJ Nov 11, 2021
Note to the Fed: This monetary innovation Down Under failed.

US inflation spreads like wildfire to China
William Pesek (AT) Nov 11, 2021
On any list of things Xi Jinping feared might spoil his desire for a third term as Chinese president, runaway inflation probably didn’t warrant high placement. But now, the fastest factory inflation in 26 years is complicating Xi’s best-laid plans amid signs of overheating in the US, where consumer prices are rising at their fastest clip since 1990.

US inflation is running high. What should we worry about now?
Olivier Blanchard (PIIE) Nov 11, 2021
A consumer price index (CPI) inflation rate in October at 6.2 percent from a year earlier; a very hot labor market. Maybe some of us were not completely wrong when we expressed worries about the size of the Biden stimulus last February. (See my blog here.) So far, if anything, it looks like we were too optimistic about the degree of overheating, the supply side constraints, and inflation.

Inflation Is Now Global, But the Traps Are Local
Daniel Moss (Bloomberg Opinion) Nov 11, 2021
Why it’s tough to take the inflation fight to where it truly matters: The big powers like the U.S., China and Europe are hemmed in by domestic policies they can’t exit. Expect prices to keep rising.

Biden Is Botching Inflation Jawboning
Jonathan Bernstein (Bloomberg Opinion) Nov 11, 2021
It’s part of the president’s job to lean on the Federal Reserve. Trump understood that. All we’re getting from the White House now are platitudes lauding Fed independence.

China’s Dangerous Rush to Resolve the Property Crisis
Shuli Ren (Bloomberg Opinion) Nov 11, 2021
Industries that count on overseas backers will have a hard time raising capital if the crackdown on real estate developers leads to their sudden collapse.

The Choking of the Global Minotaur
James K. Galbraith (Project Syndicate) Nov 11, 2021
It’s part of the president’s job to lean on the Federal Reserve. Trump understood that. All we’re getting from the White House now are platitudes lauding Fed independence.

Climate Change vs. the Sino-American Cold War
Daron Acemoglu (Project Syndicate) Nov 11, 2021
In the absence of meaningful policies from both China and the United States, this year’s climate-change summit, COP26, was never going to deliver what the world really needs. Ultimately, getting both countries on the same page and cooperating on the issue will require public pressure from their own people.

Accounting for Climate Change
Lucrezia Reichlin (Project Syndicate) Nov 11, 2021
Whether the market system can be harnessed to deliver the crucial public good of rapid and large-scale emissions reduction remains to be seen. But the creation of a new accounting-standards board focused on climate-related disclosure certainly improves the odds.

Don’t fall for the myth of fast-rising population growth
Merryn Somerset Webb (FT) Nov 12, 2021
Falling fertility rates mean we could be preparing for the wrong future.

A weakened UK economy emerges from the Covid mist
Chris Giles (FT) Nov 12, 2021
Inflation is higher than in other G7 countries and no more emergency stimulus is needed.

On a long enough timeline is all inflation transitory?
Izabella Kaminska (FT) Nov 12, 2021
The BIS reassures the market that the best cure for high prices is high prices. Nothing to see here.

The Inflation Revenue Dividend
WSJ Nov 12, 2021
State and local governments have never had so much dough.

Wonking Out: How Global Is Inflation?
Paul Krugman (NYT) Nov 12, 2021
And Queen Victoria as a differential equation.

Consumers Are Resisting Inflation
Peter Coy (NYT) Nov 12, 2021
The jump in prices has them saying it’s not such a good time to buy washing machines, cars and houses.

Western inflation puts China in monetary stalemate
David P. Goldman (AT) Nov 12, 2021
Some analysts thought the People’s Bank of China (PBOC) would respond to the third quarter’s low growth rate of 4.9% by loosening monetary policy. In background briefings, Chinese officials say that this simply won’t happen. Monetary policy isn’t the appropriate tool for China’s slowing growth and rising inflation issues. The solution, rather, is structural.

India’s Economy to Rebound as Pandemic Prompts Reforms
IMF Nov 12, 2021
India’s economy is poised for a rebound after enduring a second wave of COVID-19 infections this year that further constricted activity and took a heavy toll on its people.

Don't Expect Powell Vs. Brainard on Fed Bank Rules
Paul J. Davies (Bloomberg Opinion) Nov 12, 2021
Political drama aside, there’s general agreement on the central bank’s financial oversight.

Americans Think the Economy Is Bad Because It Actually Is
Ramesh Ponnuru (Bloomberg Opinion) Nov 12, 2021
Wages and benefits are moving up but living standards aren’t. So it’s reasonable for people to feel pinched at the moment, no matter how positive the statistical indicators may be.

The Rise of Intangible Capitalism
Eric Hazan, Jonathan Haskel, and Stian Westlake (Project Syndicate) Nov 12, 2021
The digitized, dematerialized, knowledge-based economy is already here and spreading, and offers huge potential value. The challenge for firms and policymakers is to manage the transition in a way that benefits the many and not just the few.

What we know about climate change and inflation
Donata Faccia, Miles Parker, and Livio Stracca (VoxEU) Nov 12, 2021
Despite the increasing interest in climate change in the central bank community, we still know relatively little about the impact on medium-term inflationary pressure. This column discusses new evidence for a panel of advanced and emerging economies on the impact of very high temperatures on prices. It finds that extreme temperatures have noticeable effects on price developments even in the medium term, although more so in emerging than in advanced economies. On balance, the impact of high temperatures on prices appears to be on the upside in the short term, and on the downside in the medium term.

Follow the Money
Jessica F. Green (FA) Nov 12, 2021
How reforming tax and trade rules can fight climate change.

South Africa’s Coal Deal Is a New Model for Climate Progress
Nicholas Kumleben (FP) Nov 12, 2021
The agreement is the most impressive thing to come out of the COP26 climate summit.

Puerto Rico debt deal highlights the dilemma of pension liabilities
John Dizard (FT) Nov 13, 2021
Restructurings typically leave a greater burden to meet retirement costs on those still working.

Why a three-decade high in inflation sows concerns about America’s recovery
Economist Nov 13, 2021
A broad pickup in prices puts pressure on the Fed to raise rates.

Manufacturers Find There's No Place Like Home
Brooke Sutherland (Bloomberg Opinion) Nov 13, 2021
Supply-chain issues and automation are giving industrial companies reasons to rethink where they build facilities.

Large public debts need not imply fiscal dominance
Jean Barthélemy, Eric Mengus, and Guillaume Plantin (VoxEU) Nov 13, 2021
High levels of public debt may prevent central banks from fighting inflation. This column examines the conditions under which fiscal dominance – that is, the determination of the price level by the solvency of the government – may emerge. It argues that fiscal dominance prevails when the government has, wittingly or not, exhausted its fiscal capacity. The government may wittingly and optimally choose such a path if interest rates do not respond to fiscal expansions. In response, the central bank may find it desirable to engage into pre-emptive inflation.

The Fed must abandon average inflation targeting
Willem Buiter (FT) Nov 14, 2021
Why should failures in the past drive monetary policy in the future?

The oldest asset class of all still dominates modern wealth
Rana Foroohar (FT) Nov 14, 2021
Low interest rates in advanced countries have pushed money into real estate instead of business investment.

Don’t believe the deglobalisation narrative
Megan Greene (FT) Nov 16, 2021
Data show trade balances are not shrinking and foreign investment continues to pour into China.

Japan’s Economy Shrinks, but Outlook Is Brighter as Virus Ebbs
Ben Dooley and Hisako Ueno (NYT) Nov 14, 2021
The coronavirus and supply chain issues stymied growth in the third quarter, but high vaccination rates and low numbers of virus cases point to a recovery.

Why APEC still matters — more than ever
Peter Drysdale (EAF) Nov 14, 2021
The post-war global economic order that has shaped relationships between the United States and Asia — and underpinned the prosperity and security of Asia — is under strain. Small and middle powers like New Zealand and Australia rely on the multilateral order as much as they do their alliance relationship with the United States as a pillar in national security, anchoring their integration into the dynamic regional Asian economy.

Our Global Food Supply Chain Needs Urgent Attention
Jason Clay (BRINK) Nov 14, 2021
The global food supply chain is — for better or worse — more decentralized than traditional trade. While its decentralization makes it more resilient, it also poses a unique set of problems.

Please Do Not Call Inflation ‘Transitory’
Stephen L Carter (Bloomberg Opinion) Nov 14, 2021
When politicians and economists use the term, they’re really saying that the public is upset about nothing.

OPEC’s Fears of an Oil Glut Are Built on Faulty Forecasts
Julian Lee (Bloomberg Opinion) Nov 14, 2021
The oil market for 2022 looks a lot tighter than the producer group would have you believe.

Forget the Words of This COP26 Deal. Follow the Money
David Fickling (Bloomberg Opinion) Nov 14, 2021
The language of the communique is softer than initial proposals. But if there’s one promising commitment, it’s the effort to curtail fossil fuel subsidies.

To Dispel the Property Crisis, China Has to Tame Two Types of Bad Borrowers
Shuli Ren (Bloomberg Opinion) Nov 14, 2021
Every level in the real estate development process can be laden with debt. Untangling it will require a lot more effort by Beijing.

The Rich World's Climate Hypocrisy
Jayati Ghosh (Project Syndicate) Nov 14, 2021
Many of the statements by developed-country leaders at the COP26 summit in Glasgow are at odds with their actual climate policies, and with what they say in other settings. Their short-sighted strategy ultimately benefits no one – including the powerful corporate interests whose immediate financial interests it serves.

Loan guarantees and their implications for post-Covid-19 productivity
Lilas Demmou and Guido Franco (VoxEU) Nov 14, 2021
Loan guarantee programmes have played a key role in reducing Covid-related distortions to market selection, shielding many high-productivity firms and supporting zombie firms only to a limited extent. This column argues, however, that such schemes do not come without risks for future productivity, as sizeable programmes may favour the build-up of misallocation in the medium term. Engineering an effective exit strategy from these schemes – preserving their benefits while reducing their drawbacks – is critical to foster the recovery of the corporate sector.

Central banks will stay on the alert as they guide the recovery
Tiff Macklem (FT) Nov 15, 2021
Progress in overcoming the pandemic’s effects is faster than expected, but monetary stimulus is still required.

How America’s Pandemic Economic Response Fought the Last War
Neil Irwin (NYT) Nov 15, 2021
A focus on the challenges of the Great Recession has fueled some of the challenges of this crisis.

Biden Can Whip Inflation and Build Back Better
Jason Furman (WSJ) Nov 15, 2021
Rising prices are a serious problem, but so are the chronic challenges that the bill aims to confront.

Since 2008, Monetary Policy Has Cost American Savers about $4 Trillion
Alex J. Pollock (Mises Wire) Nov 15, 2021
After thirteen years with on average negative real returns to conservative savings, it is time to require the Federal Reserve to address its impact on savers.

The U.S. and China Must Consign Trump’s Trade Deal to History
David Fickling (Bloomberg Opinion) Nov 15, 2021
Using the Phase One pact as the foundation for talks sets up any negotiation to fail at the outset. Yet that’s what Washington negotiators are determined to work with.

Gary Shilling's Guide to the Post-Pandemic Economy, Part 1
Gary Shilling (Bloomberg Opinion) Nov 15, 2021
Expect more government involvement in the economy, monetary policy that is closely linked to fiscal policy, a retreat from globalization and a strengthening U.S. dollar.

Federal Reserve Put Itself Between a Rock and a Hard Place
William C Dudley (Bloomberg Opinion) Nov 15, 2021
The central bank will most likely stick to its current path and hope for better news on inflation, inflation expectations and labor market supply. But hope is not a strategy.

Slackflation Beckons as Global Growth Goes Off the Boil
Daniel Moss (Bloomberg Opinion) Nov 15, 2021
Recovery from the Covid downturn has lost its spark, especially in Asia. Accelerating inflation will be here for a while. Let’s hope this convergence can actually be transitory.

Fixing Climate Finance
Jeffrey D. Sachs (Project Syndicate) Nov 15, 2021
The UN Climate Change Conference in Glasgow suffered the same lack of trust between developing and developed countries that has burdened global climate negotiations for almost three decades. Financing is at the heart of the rupture, and the time has come for a new approach.

A Capital-Markets Union Is the Key to Greening Europe
Christian Sewing and Werner Hoyer (Project Syndicate) Nov 15, 2021
In the absence of a true capital-markets and banking union, the European Union will not be able to mobilize the financing it needs to support its green, digital transformation. Europeans must once again turn a crisis into an impetus for deeper integration.

China’s new goal for income distribution: Insights from survey data
Martin Ravallion and Shaohua Chen (VoxEU) Nov 15, 2021
China’s political leadership recently committed to expanding the proportion of middle-income groups to create a less polarised, and more ‘olive-shaped’, distribution of wealth. This column considers the potential trade-offs between reducing income polarisation and other goals, including poverty reduction. An obvious concern is how the process of economic growth impacts the extent of polarisation, but the country’s historical record does not point to any serious trade-offs going forward, including with economic growth, poverty reduction, and overall social welfare. However, potential trade-offs would need to be considered further in the context of specific policy efforts, such as expanding social service coverage in rural areas.

Covid-19 and investment fund portfolio rebalancing
Massimiliano Affinito and Raffaele Santioni (VoxEU) Nov 15, 2021
Covid-19 had a substantial impact on financial markets around the world. This column uses granular worldwide data to assess mutual fund portfolio responses to the crisis. The authors find that mutual funds divested from assets considered in most trouble at the time – i.e. those issued in countries and by industries most affected by the pandemic – but with several dimensions of heterogeneity according to asset type, investment policy, and performance. The findings corroborate the existence of an unconventional monetary policy channel acting through mutual funds that could be used to stabilise the funds themselves.

Inflation and the Great Global Logjam
John Cassidy (New Yorker) Nov 15, 2021
Prices are surging for reasons largely beyond Joe Biden’s control, but that won’t stop Republican cries of “Bidenflation.”

Japan: Expect Stronger Economy But Softer Currency
Nick Bennenbroek (WF Econ Group) Nov 15, 2021
Japan's GDP contracted in Q3, not an unexpected result considering a state of emergency remained in effect for Tokyo and the surrounding areas through until the end of September. Weakness was evident in both consumer spending and business investment. The outlook for the economy is brightening for the quarters ahead however. With the lifting of restrictions, we expect a rebound in activity during Q4, while the prospect of additional fiscal stimulus being passed before the end of this year should also be supportive of growth in 2022. However, improving growth prospects do not necessarily correspond to improving Japanese currency prospects. With inflation still absent, we expect the Bank of Japan to maintain accommodative monetary policy for the foreseeable future. In an environment of rising global bond yields, that should translate to a softer yen over the medium-term, and we forecast a USD/JPY exchange rate of JPY120.00 by early 2023.

What Drives Gold Prices?
Robert B. Barsky, Craig Epstein, Adrian Lafont-Mueller, and Younggeun Yoo (FRB Chicago) Nov 15, 2021
A half century after gold ceased to play a significant formal role in the international monetary system, it still captures a great deal of attention in the financial press and the popular imagination. Yet there has been very little scrutiny of the primary factors determining the price of gold since its dollar price was first allowed to vary freely in 1971. In this article, we attempt to fill in that gap by highlighting three considerations that are commonly cited as drivers of gold prices: inflationary expectations, real interest rates, and pessimism about future macroeconomic conditions.

Don’t believe the deglobalisation narrative
Megan Greene (FT) Nov 16, 2021
Data show trade balances are not shrinking and foreign investment continues to pour into China.

I Warned the Democrats About Inflation
Steven Rattner (NYT) Nov 16, 2021
Why didn’t they listen?

The Federal Reserve Needs to Remove Its Blinkers
Judy Shelton (wSJ) Nov 16, 2021
A monetary mistake based on an outdated paradigm could trigger a recession or even worse inflation.

Biden, Xi chat cheers markets but risks still abound
William Pesek (AT) Nov 16, 2021
The mood music accompanying Joe Biden’s virtual summit with Xi Jinping was a loudly ticking clock. Time is most certainly not on the side of US President Biden as inflation appears to rise as quickly as his poll numbers tank. The ticking Xi hears is that of a closing window to ensure today’s upswing in Chinese markets is backed up by fundamentals.

Xi-Biden talk may bring broad economic deal
David P. Goldman (AT) Nov 16, 2021
For years, the United States complained that China kept its currency too cheap. Now, America’s problem is that a rising RMB increases the cost of goods that it can’t get anywhere except China. That gives China considerable leverage with the Biden administration, which is struggling with a wave of popular anger about inflation.

Latin America’s Inflation Challenge
Maximiliano Appendino (IMF) Nov 16, 2021
Inflation has surged in the largest economies of Latin America, prompting large central banks in the region to raise interest rates before economic activity has fully recovered.

Five Observations on Nigeria’s Central Bank Digital Currency
Jack Ree (IMF) Nov 16, 2021
The Central Bank of Nigeria (CBN) officially launched the “eNaira”—a central bank digital currency (CBDC)—on October 25, 2021.

Energy Volatility Shows Power of Commodities to Influence Inflation
Greg Sharenow (PIMCO) Nov 16, 2021
The recent surge in oil and natural gas prices highlights the interconnected nature of energy markets, as well as the complexities of transitioning away from fossil fuels.

China’s Emissions Trading Scheme Has Transformational Potential
Ian Mitchell (BRINK) Nov 16, 2021
China’s national emissions trading scheme marks the first national effort to price carbon. Focusing on the power sector, the scheme is a major step forward for China, though the incentives are weaker than in most other major economies.

Climate crisis will bring global stagflation
Taylor Pearce (OMFIF) Nov 16, 2021
How much power do central banks have to address the climate change crisis? The answer, it would seem, is not much, especially if the implementation of global climate policy is postponed. Climate change will have a global stagflationary effect overall and will need to be addressed by tighter monetary policy. Whatever policies central banks do have at their disposal need to be implemented soon if they are to be of any use.

Gary Shilling's Guide to the Post-Pandemic Economy, Part 2
Gary Shilling (Bloomberg Opinion) Nov 16, 2021
Expect greater use of telecommunications, a shift in preferred residences, more employee independence and an increased emphasis on online shopping.

Why Should Economists Dislike Higher Inflation?
Tyler Cowen (Bloomberg Opinion) Nov 16, 2021
There are a lot of theories, but in general people don’t like disruptions, and rising prices cause a lot of them.

The Right Institutions for the Climate Transition
Mariana Mazzucato (Project Syndicate) Nov 16, 2021
Although global climate commitments are important, they will not amount to much without the institutional foundation that the transition to a zero-carbon economy needs. That will require innovation and experimentation at all levels of governance, where the focus should be on expanding participation.

Rich Countries' Double Standards on Taxation
José Antonio Ocampo (Project Syndicate) Nov 16, 2021
G20 leaders claim – with much self-satisfaction – that they are addressing the global tax-abuse problem, which deprives governments of $483 billion every year. But if the G20 is serious about rectifying the injustice of cross-border tax abuse, it should support developing countries’ call to establish a global tax body at the UN.

From recovery to expansion, amid headwinds: The Commission's Autumn 2021
Maarten Verwey, Oliver Dieckmann, and Przemyslaw Wozniak (VoxEU) Nov 16, 2021
The Covid-19 pandemic is not over, but due to increasing vaccination rates and an improving health situation, since spring many restrictions in the EU have been gradually eased and this ‘reopening’ has fuelled economic growth more than expected. Supported by monetary and fiscal policy, the foundations are in place for sustaining growth. However, headwinds come from supply-demand imbalances and higher energy prices. In its Autumn 2021 Forecast, the European Commission expects GDP in the EU and the euro area to grow in 2021 by 5%, in 2022 by 4¼%, and in 2023 by 2½%. The inflation forecast for all three years has been revised up with rates above 2% in 2021 and 2022, but with declines from early 2022 onwards.

COVID-19 uncertainty: A tale of two tails
Philip Bunn, David E. Altig, Lena Anayi, Jose Maria Barrero, Nicholas Bloom, Steven Davis, Brent Meyer, Emil Mihaylov, Paul Mizen, and Gregory Thwaites (VoxEU) Nov 16, 2021
The onset of the COVID-19 pandemic triggered a massive spike in uncertainty. This column uses data from panel surveys of US and UK business executives to document how uncertainty over own-firm sales growth rates over the year ahead roughly doubled in reaction to the shock. Firm-level uncertainty receded after spring 2020 but remains much higher than pre-COVID levels. The nature of this uncertainty has shifted greatly since the pandemic struck, from an enormous widening in perceived downside risk to a sharp increase in upside risk. Economic uncertainty associated with the pandemic has morphed from a tale of the lower tail into a tale about the upper tail.

The New Economics
Felicia Wong (FA) Nov 16, 2021
How the U.S. and its allies are rewriting the rules on spending and trade.

Climate Crisis Should Be the Final Blow to the Washington Consensus
Azeem Ibrahim (FP) Nov 16, 2021
Groups like the G-7 are putting proactive governance back on the agenda.

China Economy Gauge Still Flashing Warning Signs
Brendan McKenna and Jessica Guo (WF Econ Group) Nov 16, 2021
We have updated our China Economy Gauge, which tracks local economic conditions on a high-frequency basis, to include October's data releases. While some measures surprised to the upside, overall data was mixed, indicating that China's economy is still broadly decelerating and should still face headwinds in the coming months from COVID-related restrictions, enhanced regulatory scrutiny, and a slowdown in the real estate sector.

Argentina’s chance to break the cycle of decline
FT View Nov 17, 2021
A cross-party consensus over an IMF deal is best way of avoiding a fresh crisis.

Fed policy must adjust for inflation
Martin Wolf (FT) Nov 17, 2021
Even if the price rises we are seeing could be transitory, they risk becoming permanent.

Is Japan still a value trap? Premium content
Robert Armstrong (FT) Nov 17, 2021
Glimmers of change in a brutal market.

The Supply-Chain Crisis Is a Labor Crisis
Guy Platten (NYT) Nov 17, 2021
Governments around the world have failed transport workers. But it’s not too late to help them.

Tweedledum and Tweedledee at the Fed
WSJ Nov 17, 2021
Powell and Brainard have both presided over the inflation breakout.

How the Fed Rigs the Bond Market
Lawrence Goodman (WSJ) Nov 17, 2021
Sales by ‘vigilantes’ used to serve as a warning of inflationary policies. The signal has been muted.

Inflation is manageable. Inflation panic is out of control.
Paul Waldman (WaPo) Nov 17, 2021
Republicans laugh as we convince ourselves this is the greatest economic crisis in human history.

A contest of three kingdoms
Francesco Sisci (AT) Nov 17, 2021
Beijing now bets that the United States, the incumbent superpower, will fail in its effort to reform itself and the politics and infrastructure of the world. Russia has the most challenging position because it has to follow and observe the moves of the two more prominent contestants and try to take advantage of any blunder by the two.

China’s Belt and Road chugging along in Central Asia
M K Bhadrakumar (AT) Nov 17, 2021
China appreciates that Uzbekistan has a fairly developed internal railway network and has potential as a regional hub. Thus, as part of its Belt and Road Initiative (BRI), China has long-standing plans to construct a railway from Xinjiang through Kyrgyzstan to Uzbekistan and onward to Turkmenistan (and Iran).

IMF faces defining challenges
Mark Sobel (OMFIF) Nov 17, 2021
The International Monetary Fund saturates the airwaves with flashy work on climate and re-channelling special drawing rights. But defining challenges for its future and reputation will soon descend upon it. They have to do with how the Fund manages implementation of the common framework on unsustainable low-income country debt and deals with its perennial enfant terrible – Argentina. Despite having signed the framework, China is a reluctant participant. The IMF's reputation is on the line.

How in the World Are We Going to Track the World’s SDRs?
Mark Plant (CGD) Nov 17, 2021
With the allocation of $650 billion of IMF special drawing rights (SDRs), the global economy has, in the words of the IMF’s Managing Director, been given a financial shot in the arm. One question that naturally follows is whether the injection has done any good?

Short Sellers Giving In May Be a Bearish Signal
Mark Gilbert (Bloomberg Opinion) Nov 17, 2021
Betting against stocks and predicting bond yields have both undone hedge funds. But maybe the markets are poised to turn.

Still the King, the U.S. Dollar Throws Shade at Currency Weaklings
Marcus Ashworth (Bloomberg Opinion) Nov 17, 2021
Despite a strengthening yuan, the world isn't close to abandoning the greenback.

Gary Shilling's Guide to the Post-Pandemic Economy, Part 3
Gary Shilling (Bloomberg Opinion) Nov 17, 2021
Expect household cutbacks, low inflation and interest rates, declines in commodity prices and more moderate gains in equity prices.

Was COP26 Cheap Talk?
Xavier Vives (Project Syndicate) Nov 17, 2021
It is easy to see why climate activists would dismiss international negotiations like the recent COP26 climate summit as mere jawboning. But in a world of geopolitical rivalries and significant coordination challenges, compromise – and the disappointment that can come with it – is a fact of life.

Averting Statistical Tragedies
Pinelopi Koujianou Goldberg (Project Syndicate) Nov 17, 2021
Recent academic research shows that economic statistics generated by low-income countries are just as reliable as those from advanced economies. Far from throwing good money after bad, investing in poor countries’ statistical capacity is key to achieving their development goals.

Why Is China's Growth Rate Falling So Fast?
Shang-Jin Wei (Project Syndicate) Nov 17, 2021
Although China’s economy remains on track to post strong growth for 2021 as a whole, its recent deceleration is striking. Reversing the slowdown will require policymakers to reform the ways in which they debate, vet, and implement new regulations and pandemic-control measures.

Does China’s Place-Based Land Policy Lead to Spatial Misallocation?
Min Fang, Libin Han, Zibin Huang, Ming Lu, and Li Zhang (VoxChina) Nov 17, 2021
After 2003, the Chinese central government implemented an inland-favoring land supply policy that distributed more construction land quotas to underdeveloped non-eastern regions. We investigate the effect of the policy and find that it drastically increased land and housing prices in more-developed eastern regions, which consequently created substantial spatial misallocation of land and labor. The policy seems to reduce regional output gaps; however, it hurt workers from underdeveloped regions by hindering their migration to developed regions and caused national TFP and output losses.

Wealth and history: A reappraisal
Daniel Waldenström (VoxEU) Nov 17, 2021
Wealth inequality has attracted considerable attention in recent years. This column presents new historical evidence that revises earlier results and reveals long-term patterns. A key finding is that wealth has changed in nature over the past century: once held by the elite, it is now widely held in the form of housing and pension savings. These changes appear to account for the redistribution of wealth over the last century and the fact that its concentration has remained relatively low in more recent decades despite rapid increases in aggregate wealth.

Dollar dominance and the international adjustment to global risk
Georgios Georgiadis, Gernot Müller, and Ben Schumann (VoxEU) Nov 17, 2021
In times of heightened global risk, investors flock to the dollar as their capacity or willingness to bear risk declines. As a result, the dollar appreciates. This column examines the effects of global risk shocks and the dollar’s role in the international adjustment to such shocks, finding that appreciation of the dollar amplifies the adverse effect of global risk shocks considerably. Policies that stabilise the dollar in the face of global risk, such as the liquidity provision by the Federal Reserve in response to the COVID-19 pandemic, can help stabilise global economic activity.

What the Federal Reserve should do now: An elaboration
Jason Furman (PIIE) Nov 17, 2021
The US economy has not fully recovered, and continued shortfalls in employment and gross domestic product (GDP) warrant continued expansionary monetary policy. Nevertheless, the stance of monetary policy should move in a less expansionary direction as a result of three developments over the last 18 months, some of which have accelerated in the last three months. First, the unemployment rate is falling rapidly and is now where it was at the beginning of 2017 while job openings are much higher than they were then. Second, the inflation rate has risen to the highest it has been since 1990 and at least some of the elevated inflation is likely to persist. Third, monetary policy has effectively loosened over the last year—particularly as evidenced by falling real interest rates. Any one of these three developments alone should warrant shifting to a less expansionary stance for monetary policy—even if inflation ends up slowing a lot in 2022—and collectively the case is even stronger.

How the valuation chasm in markets can be bridged
Aswath Damodaran (FT) Nov 18, 2021
Value investors and those bullish on growth companies need to look at what they have in common.

The ECB’s case for central bank digital currencies
Fabio Panetta (FT) Nov 18, 2021
Sovereign money must continue to play its anchoring role in the digital era.

Will Joe Manchin Stand His Ground on Inflation?
Phil Gramm and Mike Solon (WSJ) Nov 18, 2021
Federal spending is its biggest driver. He has demanded an honest accounting, due this week.

There’s a strong case for a weaker yuan
William Pesek (AT) Nov 18, 2021
Some good news for a change: The coming decline in China’s currency is just what President Xi Jinping’s economy and the global financial system need. It’s enough to make Donald Trump’s head explode, but a weaker yuan would be a welcome development in Washington, where officials are very keen to steady a wobbly dollar.

Turkey on the hyperinflation vanguard
David P. Goldman (AT) Nov 18, 2021
Under pressure from President Recep Tayyip Erdogan, Turkey’s central bank cut interest rates while most of the developing world raised them, sending the Turkish lira into a tailspin. The lira has lost 31% of its value during 2021 and more than 80% since 2013. With consumer price inflation running at 20% year-on-year as of October, Turkey faces hyperinflation.

Panama’s Story of Convergence
Paola Aliperti, Julian Chow, Marina Rousset and Alejandro Santos (IMF) Nov 18, 2021
Convergence is not guaranteed and the road ahead for Panama and the rest of Latin America remains long. To see more ‘blueshifting’ it is imperative that Panama and its regional peers increase productivity and diversify the economy in the long run while mitigating the effects of the pandemic in the near term. This can be achieved through policies that foster innovation together with support for higher spending on education, health, and infrastructure.

Mapping China’s Rise in the Multilateral System
Scott Morris, Rowan Rockafellow and Sarah Rose (CGD) Nov 18, 2021
China has staked out a uniquely important position, one that relies on leading roles as a shareholder, donor, client, and commercial partner. No other country wears so many hats so effectively across these global institutions.

Amid Inflation Uptick, Valuations Signal Opportunities in Inflation-Linked Assets
Daniel He, Yi Qiao & Georgi Popov (PIMCO) Nov 18, 2021
With major central banks likely to exercise patience in the face of price pressures, inflation-linked assets may be attractive allocations.

Sharing the Gains of Automation: The Role of Fiscal Policy
Nikolay Gueorguiev and Ryota Nakatani (IMF) Nov 18, 2021
Fiscal policy instruments can reduce inequality, generally at the cost of some foregone growth in the long term.

Attention, Inflation Skeptics. Shoppers Are Talking to You.
Michael R Strain (Bloomberg Opinion) Nov 18, 2021
Strong consumer spending in October betrays fears of higher prices by Christmas. That’s inflationary psychology, and it’s self-fulfilling.

The U.S. Supply-Chain Crisis Is Already Easing
Brooke Sutherland (Bloomberg Opinion) Nov 18, 2021
Progress is still slow and too many boats are waiting at the ports, but many problems have at least stopped getting worse.

Where Did It All Go Wrong for Emerging Markets?
John Authers (Bloomberg Opinion) Nov 18, 2021
In a word: China. It makes sense for investors to exit, even if the government proves able to pull off a tricky economic transition.

Lessons from a European journey through two crises
Marco Buti (VoxEU) Nov 18, 2021
The global financial crisis was a particularly testing episode for the EU. Even more testing has been the impact of the Covid-19 pandemic that erupted in March 2020. In a new book, the Chief of Staff of the Commissioner for the economy and former Director General for Economic and Financial Affairs at the European Commission retraces the analytical underpinnings of the economic policy responses to the two crises. In this column, taken from the introduction to the book, he draws general lessons for the future of EU policymaking based on his personal involvement in crisis management and response.

The US Treasuries market is a dangerous place to dream
Gillian Tett (FT) Nov 19, 2021
When markets awake and reprice Treasuries, there is every chance we will see another nasty jolt.

Whipping Up America's Inflation Bogeyman
James K. Galbraith (Project Syndicate) Nov 19, 2021
Recent price increases in the US, and demands for a forceful response by the Federal Reserve, have brought back memories of the 1970s and all of the economic and political disasters of those years. To avoid repeating past mistakes, policymakers must recognize that today’s inflation is not a macroeconomic issue.

How Trade Can Help Speed Asia’s Economic Recovery
Pragyan Deb, Julia Estefania-Flores, Siddharth Kothari, and Nour Tawk (IMF) Nov 19, 2021
Reducing trade barriers can reignite Asia’s growth engine.

Beware of Japan’s “New Capitalism”
Takatoshi Ito (Project Syndicate) Nov 19, 2021
Fresh off an electoral victory, Japan’s new prime minister, Fumio Kishida, is already offering a glimpse of what his economic policy program will look like in practice. Unfortunately, early signs suggest that while his aims are sound, his policies are not.

The Wisdom of Whistleblowers
Dambisa Moyo (Project Syndicate) Nov 19, 2021
Although whistleblowing isn’t a panacea for corruption and corporate malfeasance, it has proven highly effective as a last line of defense against behavior that is both economically harmful and politically destabilizing. As such, there is a strong case for establishing a new global agency to manage the process.

Policy implications of dollar pricing
Konstantin Egorov and Dmitry Mukhin (VoxEU) Nov 19, 2021
Recent evidence shows that most international prices are set in dollars, leading to highly asymmetric spillovers between the US and other economies. This column discusses the normative implications of this fact. The authors argue that inflation targeting is optimal in non-US economies, while the use of capital controls is not. A depreciation of the dollar is unlikely to cause a currency war, but US policy does not fully internalise global spillovers. The US benefits from the dominant status of its currency.

How Delaware Became the World’s Biggest Offshore Haven
Casey Michel (FP) Nov 19, 2021
Kleptocrats, criminals, and con artists have all parked their illicit gains in the state.

Policymaking in a Time of Uncertainty
Mary C. Daly (FRBSF Econ Letter) Nov 19, 2021
The impact of COVID and its ongoing threat continue to disrupt and delay the full recovery of the economy. It is tempting to act now, believing that what we see today are clear signals. However, acting without clarity is risky. In the face of unprecedented uncertainty caused by the long tail of the pandemic, the best policy is recognizing the need to wait.

International Economic Outlook: November 2021
Nick Bennenbroek, Brendan McKenna, and Jessica Guo (WF Econ Group) Nov 19, 2021
A relatively solid U.S. economy and, more importantly, persistent U.S. inflation pressures, should be supportive of the U.S. dollar through most of 2022. Supply disruptions and product shortages should underpin elevated inflation for an extended period, prompting earlier Federal Reserve rate hikes and a stronger U.S. dollar. At the same time, those supply disruptions could contribute to a modest slowing in U.S. growth as 2022 progresses. Internationally, several developed and emerging economy central banks should also be active in raising interest rates during 2022, including the Bank of Canada, Bank of England, Brazil's Central Bank, and the Central Bank of Mexico. Inflation pressures are also very evident internationally, even if supply disruptions are not quite as acute in the United States. However, foreign central banks may not raise rates as quickly as market participants expect, a factor that should contribute to weaker foreign currencies next year. Regarding the broader economic outlook, a renewed spread of COVID cases, most notably in Europe and China, could weigh on growth in the near-term and has led to a modest downward revision in our global GDP growth forecast. Prices continue to surprise to the upside however, and price pressures will likely persist around the world for several months to come, leading to an upward revision to our 2022 global CPI inflation forecast.

Markets are showing signs of frothing over
FT View Nov 20, 2021
Crypto sponsorship deals could be an indicator of irrational exuberance.

Central banks are stuck in a ‘hall of mirrors’
John Dizard (FT) Nov 20, 2021
Officials have been staring at the reflections of their own policies, relying too much on ‘canonical’ models.

Inflation: is now the time to get worried?
Chris Giles (FT) Nov 20, 2021
Policymakers are divided over whether rising prices are temporary or permanent. A wrong response could derail the recovery

The world is entering a new era of big government
Economist Nov 20, 2021
How should classical liberals respond?

The EU’s fiscal rules need more than technical tweaks
Martin Sandbu (FT) Nov 21, 2021
But there are signs that old suspicions over public finances between Europe’s north and south are waning.

Key US commission heralds coming capital wars
Rana Foroohar (FT) Nov 21, 2021
Finance may be the next frontier for decoupling from China, with new limits on business between the two countries.

American inflation: global phenomenon or homegrown headache?
Economist Nov 21, 2021
It is wrong to deny that fiscal and monetary stimulus have helped cause the problem.

What Xi and Biden forgot to mention on the economy
Tom Westland (EAF) Nov 21, 2021
In economics as in sport, competition is best managed by neutral umpires, not by the participants themselves.

Better roads increase domestic trade and improve regional economies
Kerem Cosar, Banu Demir, Devaki Ghose, and Nathaniel Young (VoxEU) Nov 21, 2021
Paving dirt roads and building highway networks, unsurprisingly, have been shown to produce substantial economic gains, but what is the impact on domestic trade from improving existing road networks? Using spatially disaggregated data on major capacity upgrades of existing road networks and domestic transactions in Turkey, this column estimates a large positive impact of reduced travel times on trade and regional employment, and long-run aggregate real income gains of 2–3% percent.

Supply-chain shock raises risk of more volatile economic cycles
David Bowers (FT) Nov 22, 2021
If inventories remain higher for longer, swings in business demand will be greater.

There is no easy escape from the global debt trap
Ruchir Sharma (FT) Nov 22, 2021
No matter what happens to near-term inflation and growth, the world is too indebted for rates to rise much higher.

Where did all the workers go?
Delphine Strauss (FT) Nov 22, 2021
Labour shortages are spreading in many countries. Are they a result of reduced migration? Early retirement? And will they last?

Powell Needs to Cool the Economy Now to Avoid Recession Later
Michael R. Strain (NYT) Nov 22, 2021
Now that Jerome Powell has been renominated to head the Federal Reserve, he needs to turn the temperature down.

Biden Signs Up for Powell’s Inflation
WSJ Nov 22, 2021
Republicans are under no obligation to endorse his Fed nominees.

President Biden stands up for an independent Fed
WaPo View Nov 22, 2021
The president renominated Jerome H. Powell to lead the Federal Reserve. Finally.

No, Inflation Is Not Good for You
William L. Anderson (Mises Wire) Nov 22, 2021
According to the Marxists and their fellow travelers, inflation is good because it transfers wealth from creditors to debtors, and debtors are "the 99 percent." But inflation doesn't work that way.

Inflation has risen much more in the US than the euro area despite similar pandemic experiences
Jason Furman (PIIE) Nov 22, 2021
The euro area and the United States both adopted highly expansionary fiscal and monetary policies to mitigate the economic impact of the pandemic and support workers affected by business closures. But the United States is now recording much higher inflation than the euro area. In October 2021, the United States recorded 24-month inflation at an annualized rate of 4.0 percent, around 2 percentage points higher than in the euro area.

What Aid Agency Leaders Should Worry About on Climate Finance
Mark Lowcock (CGD) Nov 22, 2021
How development leaders can get more from their money on climate.

What’s Behind the Gulf’s Trade Surge With Asia?
Freddie Neve (BRINK) Nov 22, 2021
The Persian Gulf has traded for centuries with Asia, but in the last decade, the volume of that trade has exploded. This is in contrast to trade slowing between the Gulf countries and the West.

Inflation Is Not a Tide That Lifts All Boats Equally
Nir Kaissar (Bloomberg Opinion) Nov 22, 2021
Prices of goods and services typically don’t rise at the same time or pace, even during bouts of rapid growth.

The Fed Must Think Creatively Again
Stephen S. Roach (Project Syndicate) Nov 22, 2021
Supposedly transitory one-off price adjustments in the United States have become pervasive, and a major inflation shock is now at hand. But despite the flashing warning signs, the Federal Reserve remains wedded to a monetary-policy strategy born of the low-inflation past.

Scoping Out Corporate Carbon Neutrality
Geoffrey Heal (Project Syndicate) Nov 22, 2021
With activists at COP26 and beyond accusing financial-sector leaders of greenwashing by relying on carbon offsets, the debate about climate-aligned investing has heated up. While critics are right that pay-to-pollute strategies have no place in a net-zero world, some offsets could still have a positive – if temporary – role to play.

How International Institutions Die
Ana Palacio (Project Syndicate) Nov 22, 2021
While the COVID-19 pandemic has highlighted international institutions’ shortcomings, it also made plain, yet again, that the biggest challenges today are global in nature. In this context, defending multilateral institutions is not a display of “nostalgia,” but an act of realism.

The German productivity paradox: A homegrown affair
Désirée Christofzik, Steffen Elstner, Lars Feld, and Christoph Schmidt (VoxEU) Nov 22, 2021
Despite massive digitisation efforts, the German economy has experienced a marked slowdown in productivity growth. This column shows that an important share of this trend reflects the combination of strong labour market performance with the structural shift towards services in the German economy. A large part of the productivity paradox can be resolved by the observation that the notable technological progress in the ICT-producing sector tends to stimulate aggregate employment growth in step with production growth, thereby consuming its effect on aggregate productivity. The results suggest that higher productivity growth should not be the sole policy objective.

Why some nations’ labour markets did better during the pandemic
Simeon Djankov and Eva (Yiwen) Zhang (VoxEU) Nov 22, 2021
Leaving human capital out of policy discussions might lead to incorrect inferences about which measures were most successful during the pandemic. Based on a sample of 45 mostly OECD economies, the authors of this column show that both high levels of human capital and, to a lesser extent, flexible labour regulation have allowed labour force participation to recover faster during the Covid crisis. Countries that prepare to fight the effects of globalisation and robotics have also managed to alleviate the effects of the shock on the labour market.

Is Inflation Here to Stay?
Sebastian Mallaby (FA) Nov 22, 2021
Another test for the age of magic money—and for Powell.

Dancing on the edge of climate disaster
Martin Wolf (FT) Nov 23, 2021
Despite signs of hope, scepticism is fully justified when it comes to the COP26 announcements.

The Fed appointments process should be overhauled
Paul Tucker (FT) Nov 23, 2021
Giving the head of the US central bank a single eight-year term would avoid unnecessary uncertainty.

This year’s model for loan losses proves tricky for banks
Laura Noonan (FT) Nov 23, 2021
Lenders struggle to work out true financial health of borrowers after pandemic shock.

Turkish lira in freefall as Erdogan vows victory in ‘economic war’
Laura Pitel and Tommy Stubbington (FT) Nov 23, 2021
Currency tumbles as much as 8.8% in latest bout of intense volatility.

Pakistan bank chief warns of taper tantrum-style shock to emerging markets
Benjamin Parkin (FT) Nov 23, 2021
Reza Baqir urges advanced economies to act to stem rising global inflation.

The ‘Tesla-financial complex’: how carmaker gained influence over the markets
Robin Wigglesworth (FT) Nov 23, 2021
The company’s role in the ebb and flow of the stock market is far greater than its $1.1tn valuation implies.

Contending With the Pandemic, Wealthy Nations Wage Global Battle for Migrants
Damien Cave and Christopher F. Schuetze (NYT) Nov 23, 2021
Covid kept many people in place. Now several developed countries, facing aging labor forces and worker shortages, are racing to recruit, train and integrate foreigners.

Jerome Powell’s second act puts Asia on edge
William Pesek (AT) Nov 23, 2021
Is Jerome Powell the best man for the worst job in global finance? That’s US President Joe Biden’s take as he gives Powell a second term as Federal Reserve chairman. Yet the real question, and the one that might matter the most, is: How is Asia placed for four more years of Powell’s leadership?

Powell’s second term underlines Biden’s quandary
David P. Goldman (AT) Nov 23, 2021
Markets gave tepid applause to US President Joe Biden’s decision Monday to designate Jerome Powell for a second term as Federal Reserve Chairman. If the Fed continues to accommodate in the face of the highest inflation in 40 years, it will spur more inflation and if it tightens it threatens a recession.

What Multilateral Development Banks Can Do To Mobilize Private Capital At Scale
Nancy Lee (CGD) Nov 23, 2021
Despite criticism of the “Billions to Trillions” action plan, we know that catalyzing much larger volumes of private finance for investments related to the Sustainable Development Goals (SDGs) remains the only viable avenue for achieving the scale needed in developing countries, given very real constraints on fiscal space and on growth in foreign aid.

Missing from COP26: Lifestyle choices of middle-class and rich consumers
Homi Kharas (Brookings) Nov 23, 2021
Avoid-Shift-Improve.

Rethinking the World Bank Model for More Climate Financing
Clemence Landers and Nancy Lee (CGD) Nov 23, 2021
More leverage of IDA assets could add hundreds of billions more dollars to climate finance.

Powell Is the Right Choice for the Fed
Bloomberg View Nov 23, 2021
In nominating the current chair for a second term, Biden puts the emphasis where it rightly belongs: on continuity, not politics.

A Few Hundred Billion Dollars Won’t Fix All the Shortages
Anjani Trivedi (Bloomberg Opinion) Nov 23, 2021
Throwing money at the problem won’t solve anything. Fresh finance needs to be targeted at the bottlenecks and those sectors at the bleeding edge.

Germans Shouldn’t Overreact to 6% Inflation
Andreas Kluth (Bloomberg Opinion) Nov 23, 2021
The Bundesbank ups its inflation estimates for November yet again. Neither Berlin nor Frankfurt should panic yet.

The West's Wasted Crisis
Yanis Varoufakis (Project Syndicate) Nov 23, 2021
A year that began hopefully is ending grimly. Western political elites, unable (and perhaps unwilling) to turn a deadly pandemic and climate crisis into a life-preserving opportunity, have only themselves to blame.

Monetary and Inflationary Traps
Raghuram G. Rajan (Project Syndicate) Nov 23, 2021
Having adopted a more flexible policy framework in response to the low-inflation conditions that preceded the COVID-19 crisis, the US Federal Reserve now finds itself confronting an entirely different economic regime. The balance of forces is thus weighing heavily against decisive action to control today’s price increases.

Corruption's War on the Law
Eva Joly (Project Syndicate) Nov 23, 2021
From Nigeria to Italy, the forces of corruption are fighting back against those who would root them out, and from bombs and bullets to writs and motions, they will use any weapon they can to improve their chances. Not content to intimidate or even murder their opponents, now they are targeting the rule of law itself.

Southeast Asia's Migrant Labor Dilemma
M. Niaz Asadullah (Project Syndicate) Nov 23, 2021
As high-income countries plot their post-pandemic recoveries, ASEAN economies like Malaysia face a difficult choice between curbing outward migration and encouraging greater labor mobility. Instead of limiting citizens’ freedom to work abroad, governments should focus on improving labor standards at home.

Dangers of unregulated artificial intelligence
Daron Acemoglu (VoxEU) Nov 23, 2021
Over the last decade, artificial intelligence has made great advances and influenced almost all industries. This column argues that the current AI technologies are more likely to generate various adverse social consequences, rather than the promised gains. It provides examples of the potential dangers for product markets, labour markets, and democratic institutions, and emphasises that the main problem is not AI itself, but the way leading firms are approaching data and their use. Policy should thus be focused on redirecting technological change to create new capabilities and opportunities for workers and citizens.

Multinational production and investment provisions in preferential trade agreements
Sébastien Miroudot and Davide Rigo (VoxEU) Nov 23, 2021
What is the impact of trade agreements on the activities of multinational enterprises? How does the accession of countries to regional trade agreements affect multinationals’ decision to set up affiliates and produce in global value chains? Using a novel database on multinational production, this column investigates the impact of preferential trade agreements on foreign affiliates’ production activities. The findings suggest that investment provisions increase multinational production by facilitating multinationals’ operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains.

It’s Fiscally Irresponsible Not to Spend More Money
Leah Downey (FP) Nov 23, 2021
Reasonable-sounding objections to the Biden administration’s spending bills are anything but.

Turkey: And I'm Free, Free Fallin'
Brendan McKenna (WF Econ Group) Nov 23, 2021
Tom Petty said it best, and his words have never been more applicable to the Turkish lira. Just today, the Turkish currency has lost 12% of its value and is now 40% weaker against the U.S. dollar this year. Going forward, we do not expect any contagion effects on other emerging market currencies as these developments are specific to Turkey, and do not expect Turkish authorities to impose any capital controls. We do, however, expect local actions to be taken in an attempt to stabilize the currency, although further lira depreciation and new record lows against the dollar are very likely.

Turkey’s lira plunge is a reminder of risks facing emerging markets
Paul McNamara (FT) Nov 24, 2021
Countries that deviate from economic orthodoxy pay a steep price.

What the lira collapse means for Turkey’s economy
Laura Pitel and Jonathan Wheatley (FT) Nov 24, 2021
Analysts warn of increased dollarisation, hyperinflation and the rising cost of debt.

The Inflation Miscalculation Complicating Biden’s Agenda
Jim Tankersley (NYT) Nov 24, 2021
Administration officials blame the Delta variant for a prolonged stretch of consumer spending on goods, rather than services, pushing up prices and creating a conundrum for the Fed.

Taliban teetering on verge of economic collapse
Salman Rafi Sheikh (AT) Nov 24, 2021
Ever since the Taliban’s military takeover of Kabul, the Afghan economy has gone from bad to worse and could now be headed for a total collapse if international agency predictions are to be believed. As Afghanistan teeters toward a catastrophic famine, its economy could shrink by 30% or more year on year, according to the International Monetary Fund (IMF).

China’s secret plan to become tech self-sufficient
Jeff Pao (AT) Nov 24, 2021
A little-known group of experts known as the National Science and Technology Advisory Committee (NSTAC) is developing a roadmap to reduce China’s reliance on foreign technology and promote self-sufficiency, a high-stakes gambit that could change how China interacts and competes in the crucial and fast-moving global sector.

How Domestic Violence is a Threat to Economic Development
Rasmane Ouedraogo and David Stenzel (IMF) Nov 24, 2021
The economic costs of domestic violence are higher during downturns and could make recovery more challenging.

China and the U.S. Can’t Break Their Oil Market Codependency
David Fickling (Bloomberg Opinion) Nov 24, 2021
In this dangerous game, any move that tips the balance could kick off a conflict. That won’t change until Beijing is able to harness new zero-carbon technologies to replace crude in both civilian and military uses.

The King Canute Theory of Inflation
Mervyn Allister King (Bloomberg Opinion) Nov 24, 2021
A satisfactory theory of inflation cannot take the form, “Inflation will remain low just because we say it will.”

Turning Green Into Gold Takes a Leap of Faith
Mark Gilbert (Bloomberg Opinion) Nov 24, 2021
Two conflicting reports highlight the lack of reliable and standardized data on how to make a profitable portfolio greener.

America's Microchip Resurgence Runs Through New York
Kathleen Courtney Hochul (Bloomberg Opinion) Nov 24, 2021
The U.S. used to produce 37% of the world's semiconductors; today the figure is 12%. Congress and innovative states can reverse the slide.

The Further Bungling of US Trade
Anne O. Krueger (Project Syndicate) Nov 24, 2021
After campaigning as a consummate internationalist who would reverse Donald Trump’s myopic nationalist policy agenda, Joe Biden has maintained his predecessor’s protectionist trade policies. In fact, the overly complex, distortive trade-rate-quota regime negotiated with the European Union represents a new low.

Green Business After COP26
Johan Rockström and Tobias Raffel (Project Syndicate) Nov 24, 2021
New global agreements notwithstanding, the world remains woefully behind in reducing greenhouse-gas emissions at the rate necessary to prevent catastrophic climate-change scenarios. Businesses are increasingly embracing the green challenge, but they need policymakers to meet them halfway.

Why Italy's Presidential Election Matters
Nouriel Roubini and Brunello Rosa (Project Syndicate) Nov 24, 2021
With its poor track record of managing EU funds, Italy’s recovery plan will be a major test for the future of EU policymaking more generally. While it is widely agreed that Prime Minister Mario Draghi must remain on the scene to oversee the plan’s implementation, in what capacity would he be most useful?

Central bank digital currency: Considerations, projects, outlook
Dirk Niepelt (VoxEU) Nov 24, 2021
Central bank digital currency has become a major preoccupation of central bankers. In a new CEPR eBook, academics and policymakers review what we know about the economic, legal, and political implications, discuss current projects, and look ahead. While consensus on the ‘right’ CBDC choices remains elusive, common perspectives emerge. First, money, banking and payments are ripe for upheaval, with or without CBDC. Second, the key risk of CBDC is unlikely to be bank disintermediation – privacy, politics, and information may be more critical. Third, the use case for CBDC must be clarified country by country, and may not exist. Fourth, parliaments and voters should have the final say.

Consumption and service sector demand played a key role in the COVID-19 global trade collapse
Heli Simola (VoxEU) Nov 24, 2021
The collapse of global trade during the COVID-19 crisis was stunning in its magnitude, but was milder in relative terms than during the Global Crisis. Based on data from 40 different countries, this column suggests that the key lies in the composition of demand. The contributions of consumption and services sector demand to the import contraction were notably larger during the COVID-19 crisis. This may have led to a relatively milder import contraction, as consumption and services production are less import-intensive than investment and manufacturing production.

The global footprint of Chinese banks
Cathérine Casanova, Eugenio Cerutti, and Swapan-Kumar Pradhan (VoxEU) Nov 24, 2021
The global footprint of Chinese banks is substantial and growing, including during the COVID-19 pandemic. While they are similar to other banks from emerging countries in terms of their ownership and asset structure, their global footprint often resembles that of banks from advanced countries. Geographical distance acts as a barrier for Chinese banks’ lending, comparable to that for US or European banks. Also like their US peers, the lending of Chinese banks strongly correlates with trade. Some differences are present, such as an atypical negative correlation between bank lending and portfolio investment.

Erdogan Has Never Been in This Much Trouble
Steven A. Cook (FP) Nov 24, 2021
Surrounded by rivals amid a collapsing economy, the Turkish president is facing the longest odds of his life.

The climate transition must not mean global energy redlining for Africa
Uzodinma Iweala (FT) Nov 25, 2021
Rich countries are not practising what they preach on fossil fuel funding.

The US and China are already at war. But which kind?
Gillian Tett (FT) Nov 25, 2021
The fact that war can be fought in so many ways in the 21st century might reduce the need for actual military conflict.

Obama-era ‘shellacking’ looms unless the Fed wakes up to inflation
Mohamed El-Erian (FT) Nov 25, 2021
Policy agenda under a Democratic government is once again at risk.

What the ‘big quit’ tells us about inflation
Chris Giles (FT) Nov 25, 2021
If resignation rates tell a clear story, the message from overall labour market participation is much more subtle.

We must not miss this chance to reform the WTO
Valdis Dombrovskis (FT) Nov 25, 2021
Ministers meeting in Geneva next week should not sacrifice global trade to international power politics.

UK seeks to counter China’s influence with new development investment arm
Laura Hughes and Sebastian Payne (FT) Nov 25, 2021
Body will leverage private capital to fund projects in Asia, Africa and the Caribbean, says foreign secretary.

The Housing Gang Is Getting Back Together for Another Bust
Peter J. Wallison (WSJ) Nov 25, 2021
Fan and Fred will buy mortgages up to $1 million, repeating the mistakes that led to the 2008 crash.

Yen’s loss could be yuan’s gain
William Pesek (AT) Nov 25, 2021
A funny thing happened in Asia this week: the region’s most important currency fell to four-year lows and Joe Biden’s White House didn’t say a thing. Not the yuan, but the yen. China’s currency may have maddened former US President Donald Trump. Yet its use in global finance and trade, for now, pales in comparison to Japan’s.

US set for new growth dynamic after Covid-19
Michael Herzum, Sandra Ebner and Sven Schömer (OMFIF) Nov 25, 2021
Covid-19 will lead to a new growth dynamic. Why? Because the supply side is set to be boosted by the acceleration of technological progress while the demand side will benefit from an increase in state economic activity. However, it will also change international economic relations. The key questions are around what impact these circumstances will have on growth and interest rates and what will happen with inflation given these conditions.

Black Gold Turns the U.S. and China Into Frenemies
Mark Gilbert (Bloomberg Opinion) Nov 25, 2021
Both countries are releasing crude oil from their strategic reserves. But that seeming cooperation masks a fraught relationship.

Modi’s Reform Momentum Has Finally Hit a Wall in India
Andy Mukherjee (Bloomberg Opinion) Nov 25, 2021
The obstacle is politics. The more the government appears aligned with big business, the greater the resistance to its policies.

The Inflation Conundrum
Kaushik Basu (Project Syndicate) Nov 25, 2021
From the US and Brazil to Turkey and India, growing price pressures are leaving policymakers facing some difficult decisions. Unlike in many previous global inflationary episodes, what is remarkable this time is how different the cross-country experiences have been.

Lessons from Digital India
Michael Spence (Project Syndicate) Nov 25, 2021
Over the past five years, India’s mobile-internet and digital-services ecosystem has grown rapidly, owing to the pioneering efforts of large private-sector players. Although this industry-led growth is somewhat unusual, it offers a model that could benefit other developing countries.

Biden's Wise Fed Choice
Kenneth Rogoff (Project Syndicate) Nov 25, 2021
To reappoint US Federal Reserve Chair Jerome Powell, President Joe Biden had to resist strong pressure from the left wing of his party for a shakeup. By choosing continuity, Biden accomplished several things at once.

The Keys to Inclusive Growth
Philippe Aghion and Aymann Mhammedi (Project Syndicate) Nov 25, 2021
One of the COVID-19 pandemic’s most important economic lessons is that innovation and inclusion need not be mutually exclusive. By pursuing the right policies, Western governments can promote both and thereby help to bring about a dynamic and equitable recovery.

The US-China tariff war and China’s economy: Evidence from night lights
Davin Chor and Bingjing Li (VoxEU) Nov 25, 2021
Tariffs initiated by the Trump administration in 2018 raised duties on China’s exports to the US, sparking a ‘tariff war’. This column uses satellite readings of night-time luminosity to show that that locations within China that were more exposed to the US tariffs experienced a larger decrease in night light intensity, pointing to a contraction in local economic activity. By contrast, exposure to China’s retaliatory tariffs appeared to have no significant effect on grid-level night lights.

Asia is the global inflation exception
Robin Harding (FT) Nov 26, 2021
The region is not experiencing the sharp price rises seen elsewhere because it handled the pandemic better.

The Omicron Variant Panic
Nov 26, 2021
Markets fall, but the biggest danger is more government lockdowns.

The COP26 Plan to Keep Africa Poor
Magatte Wade (WSJ) Nov 26, 2021
We want to help with climate change, but our lives and economies depend on fossil fuels.

US inflation debate creates unwarranted gloom
Mark Sobel (OMFIF) Nov 26, 2021
Surging inflation has been front-page news recently. With the October year-over-year consumer price index jumping to above 6%, this is understandable. But the search for headline-grabbing stories and polarised US political debate make it hard for Americans to grasp a confusing picture. Gloom pervades, yet the 2022 US outlook is upbeat. Why the gloom? Perhaps the cacophonous US debate plays a role.

Joe Weisenthal Thinks Debasing the Dollar Is the Moral Thing to Do
Robert P. Murphy (Mises Wire) Nov 26, 2021
In one recent thread, Weisenthal mocked the people worried about the falling purchasing power of the US dollar, and claimed that it would be immoral for currency to maintain its value over time.

Chile’s Economic Miracle Is At Risk
Bloomberg View Nov 26, 2021
After three decades of democracy, the political center has collapsed. Ahead lies a bitterly polarized presidential runoff. A notable economic success is in danger of falling apart.

The Case Against Green Central Banking
Willem H. Buiter (Project Syndicate) Nov 26, 2021
The fact that central banks could use their limited policy tools to pursue climate targets does not mean that they should. There are far more effective climate measures available to fiscal policymakers and regulators, and central bankers already have enough on their plates.

Not That Seventies Inflation
Jeffrey Frankel (Project Syndicate) Nov 26, 2021
In contrast to the stagflationary 1970s, the US recovery since the pandemic-induced recession has been strong, whether judged by GDP or labor-market indicators. Today’s economic conditions therefore recall the late 1960s, another time of rapid growth and moderately rising inflation.

How euro area consumers adjust their medium-term inflation expectations in turbulent times
Ewa Stanislawska and Maritta Paloviita (VoxEU) Nov 26, 2021
The responsiveness of longer-term inflation expectations to shorter-term economic developments plays an important role in inflation dynamics. Using the new ECB Consumer Expectations Survey conducted in the middle of the Covid-19 pandemic, this column explores how consumers adjust their medium-term inflation views in response to changes in short-term inflation expectations and inflation perceptions. tCovid-19 contributed to an increase in consumer inflation expectations, but greater trust in the ECB is associated with more muted responsiveness of inflation expectations.

How climate change reallocates capital and labour within nations
Christoph Albert, Paula Bustos, and Jacopo Ponticelli (VoxEU) Nov 26, 2021
There are still significant gaps in our understanding of how climate change affects economic outcomes. This column uses new data on extreme weather events in Brazil to study their impact on labour and capital reallocation across regions, sectors, and firms. Long periods of excess dryness lead to the reallocation of capital and labour away from affected regions. Excess dryness over the last two decades has also changed the structure of the economy – not only in directly affected areas, but also in regions that were integrated with them via labour and capital markets.

Adventure capitalism
Economist Nov 27, 2021
The venture-capital industry is being supersized. Good.

Everything You Need to Know About the Global Supply Chain Crisis
David Fickling, Brooke Sutherland, Daniel Moss, and Tom Orlik (Bloomberg Opinion) Nov 27, 2021
The kinks in the U.S. may be getting worked out, but it’s a worldwide crisis and there are still plenty of threats, from Covid and energy shortages to an aged shipping fleet.

Bank leverage constraints and bond market illiquidity during the COVID-19 crisis
Johannes Breckenfelder and Victoria Ivashina (VoxEU) Nov 27, 2021
The onset of COVID-19 led to heightened uncertainty and a ‘dash-for-cash’, particularly in the mutual fund sector which faced fire sale pressure. Typically, banks trading securities absorb such pressure and support market liquidity, but regulation may limit their ability to do so. This column analyses the role of bank leverage constraints as an amplifier of bond market illiquidity. It concludes that leverage ratio regulation can have negative side effects by increasing bond market illiquidity in times of economic distress, suggesting that the optimal leverage ratio is procyclical.

Turkey’s currency crisis is of Erdogan’s making
FT View Nov 28, 2021
Increasingly erratic policymaking is the primary cause of the lira’s woes.

Inflation always punishes America’s left
Edward Luce (FT) Nov 28, 2021
Biden’s lowest-cost remedy is to get tough on Covid.

Financial Climate Risks Are Minimal
WSJ Nov 28, 2021
A new Fed study finds that banks aren’t threatened, contrary to Biden regulatory claims.

Brace Yourself. Brazil Is About to Rock Markets
David Fickling (Bloomberg Opinion) Nov 28, 2021
President Jair Bolsonaro’s remarkable political reversal on welfare will be felt in soybeans, beef, chicken and even coffee.

Building a Better Global Health Framework
Tedros Adhanom Ghebreyesus (Project Syndicate) Nov 28, 2021
The COVID-19 pandemic will not be our last. That is why, as we recover and rebuild from this crisis, we must also take steps to ensure that we can meet future disease outbreaks with effective cooperation and collaboration, instead of the kind of chaos and confusion that have exacerbated the current one.

The 2021 surge in inflation: A look at sticky prices
Javier G. Gómez-Pineda, Juan Manuel Julio, Julián Roa-Rozo (VoxEU) Nov 28, 2021
There is disagreement over whether the current inflation is here to stay. This column argues that sticky-price inflation, which focuses on components of the consumer price index with infrequent price changes, is particularly useful at the moment as it can help control for ongoing changes in the relative prices of goods and provides hints about future CPI inflation. In October 2021, monthly sticky-price inflation, partially corrected for base effects, was 5.3%. In turn, the CPI inflation forecast for October 2022 is 5.6% and highly uncertain.

Twenty years on, the Brics have disappointed
Jim O'Neill (FT) Nov 29, 2021
The challenge of how these countries achieve higher prosperity across society remains unsolved.

Why junk bond yields are not so absurd
Robert Armstrong (FT) Nov 29, 2021
The market for risker debt is hot and expensive — but not wildly out of line with history or economic fundamentals.

We must accept higher taxes to fund health and social care
Martin Wolf (FT) Nov 29, 2021
The government’s response to immediate pressures on the system is inadequate and indefensible.

Markets are more fragile than investors think
Robin Wigglesworth (FT) Nov 29, 2021
Calm trading conditions are increasingly interspersed with sharp bouts of volatility.

China’s population is shrinking, fast
Jamie Powell (FT) Nov 29, 2021
Japan in 1989 anyone?

Made in the U.S.A., but With a Supply-Chain Reboot
Nelson D. Schwartz (NYT) Nov 29, 2021
Facing delays, shortages and higher prices for raw materials, small manufacturers are finding new sources. Not all are able to pass along the costs.

Biden Joins the Lumber Trade Wars
WSJ Nov 29, 2021
How not to fight inflation: raise home building costs by doubling tariffs.

The Erdogan Lira Crisis
WSJ Nov 29, 2021
Turkey’s currency burns while its president fiddles with rates.

Where Did That IMF Covid Money Go?
DJ Nordquist and Dan Katz (WSJ) Nov 29, 2021
Iran got $5 billion, but the world’s poor countries aren’t benefitting from ‘special drawing rights.’

The WTO’s Fast Track to Irrelevance
Thomas J. Duesterberg (WSJ) Nov 29, 2021
China and others try to exploit the pact, while Western nations burden it with irrelevant goals.

Lessons learned from half a century of US industrial policy
Gary Clyde Hufbauer and Euijin Jung (PIIE) Nov 29, 2021
Though US lawmakers are divided over just about everything, Congress appears ready to approve pending bills to support research, development, and production of a new generation of semiconductors with bipartisan majorities. Separate measures in the House and Senate[1] respond partly to supply chain shortages, now holding up automobile production and much else, and partly to fears of Chinese dominance in a high-tech industry.

Climate Tech Investments Can Add Up to Net Zero
Clara Ferreira Marques (Bloomberg Opinion) Nov 29, 2021
Reaching the world’s climate targets will mean expanding the use of cutting-edge technologies that already exist. Making them more accessible requires cash — and generous government support.

Inflation Bonds Are Betting on Team Transitory
Matthew A Winkler (Bloomberg Opinion) Nov 29, 2021
Inflation-protected securities have a story to tell about rising prices, and it isn’t the panicky one that’s circulating in political circles and news reports.

For Central Banks, Omicron Is Another Word for ‘Reset’
Marcus Ashworth (Bloomberg Opinion) Nov 29, 2021
And reset is another word for ‘buying time’ for policymakers caught between the end of stimulus and surging inflation.

China’s Gen Z Is Anxious, and Beijing Has Few Answers
Shuli Ren (Bloomberg Opinion) Nov 29, 2021
In response to deepening malaise, the government has sought to smooth the path to good jobs for recent college grads. The measures might not be enough.

The End of Free Money
Hans-Werner Sinn (Project Syndicate) Nov 29, 2021
Surging inflation across the European Union should be a clear signal to policymakers and central bankers that the time to stop financing public-debt binges was yesterday. Most likely, the continent is heading into a period of stubborn inflation that will be familiar to anyone who lived through the 1970s.

The End of the Economic Consensus
Jean Pisani-Ferry (Project Syndicate) Nov 29, 2021
Whereas the shock of the COVID-19 pandemic initially prompted unity and convergence in Europe, the current phase of the crisis is much more delicate economically and politically. If mismanaged, it may reopen old wounds and shatter policymakers’ newly acquired legitimacy.

A new survey-based measure of economic uncertainty
Maarten Verwey, Christian Gayer, Andreas Reuter, and Fiona Morice (VoxEU) Nov 29, 2021
Uncertainty can have an important impact on economic activity, but it is not directly observable. This column presents the features of the European Commission’s new index for uncertainty in the economy, based on its EU-wide Programme of Business and Consumer Surveys, and its evolution in response to the COVID-19 pandemic and the stringency of the related restrictions. It also compares the indicator to survey-based indicators of economic confidence, as well as to other existing uncertainty gauges, and offers a glimpse of the rich set of geographical, sectoral, and sub-sectoral breakdowns of the new data.

How Much of a Threat Is the Omicron Variant to the Economy?
John Cassidy (New Yorker) Nov 29, 2021
Joe Biden and Jerome Powell will be watching developments anxiously.

How to Make a Carbon Club Work
Marisa Coulton (FP) Nov 29, 2021
The Canadian system is a promising—and politically palatable—prototype for other large emitters.

Joe Biden’s democracy summit risks flattering the enemy
Janan Ganesh (FT) Nov 30, 2021
Free nations should not overstate the momentum or influence of autocrats.

The economic lure of alternative worlds
Mary O'Sullivan (FT) Nov 30, 2021
Central bankers ought to wonder why they succumbed to a fantasy about the Great Depression.

Why US companies need to stop using Libor right now
Tal Reback (FT) Nov 30, 2021
Risks of not shifting soon enough to new Sofr market benchmark are rising.

Three shocks unsettle business confidence across Latin America
Michael Stott (FT) Nov 30, 2021
Developments in Chile, Peru and Mexico trigger dismay in executives and bankers.

On the Trans-Atlantic Price Gap
Paul Krugman (NYT) Nov 30, 2021
What does (somewhat) lower inflation in Europe tell us about America?

Sic ‘Transitory’ Gloria Fed
WSJ Nov 30, 2021
Federal Reserve Chairman Jerome Powell finally abandons the word to describe 6% inflation over the last year.

The Fed Battles Wyoming on Cryptocurrency
Cynthia Lummis (WSJ) Nov 30, 2021
Powell and Brainard stand in the way of sensible regulation.

Omicron triggers global economy’s bad case of PTSD
William Pesek (AT) Nov 30, 2021
Scary as the Omicron Covid-19 variant seems, the Pavlovian freak-out in global markets may be the most frightening of all. Obviously, the globe has much to worry about if this latest strain, first reported in South Africa, explodes globally. But the speed with which investors jumped almost instantly to DEFCON 1 betrays a world economy that’s even more fragile than commonly thought.

Global Financial Safety Net—A Lifeline for an Uncertain World
Alina Iancu, Seunghwan Kim, and Alexei Miksjuk (IMF) Nov 30, 2021
When economic crises hit, such as the one caused by the pandemic, countries have a number of financial resources—both internal and external—to draw on. The global financial safety net is a set of institutions and mechanisms that provide insurance against crises and financing to mitigate their impact.

End of Libor could trigger supply chain shock
Kathleen Tyson (OMFIF) Nov 30, 2021
More than 80% of trade and supply chain finance globally prices using the London interbank offer rate term benchmarks in dollars. Supervisors have ordered that Libor funding for new transactions cease after 31 December 2021 when most publication of Libor rates will stop. If banks and exporters are not prepared for this transition, the end of Libor risks widespread disruption to trade and supply chain finance.

Ambani Shows Why RBI Hates Big Business in Banking
Andy Mukherjee (Bloomberg Opinion) Nov 30, 2021
The financier controlled by the younger brother of India’s richest man wanted to become a “world-class bank.” Instead, it is headed for bankruptcy.

Banks Didn’t Listen to Buyout Boom Warnings. That’ll Cost Them.
Paul J. Davies (Bloomberg Opinion) Nov 30, 2021
Regulators have tried to cajole lenders to curb financing for private equity deals to little effect, so tougher measures are on the way.

Are Hedge Fund ‘Bubble’ Bets Naughty or Nice?
Chris Bryant (Bloomberg Opinion) Nov 30, 2021
Europe isn’t comfortable with financial investors making bank on its carbon market. But that’s short-sighted.

The High Stakes of Rising Inflation
Otmar Issing (Project Syndicate) Nov 30, 2021
Although some of the obvious factors behind recent price surges will almost certainly subside in due time, others will linger, adding to the already-high inflationary pressures that have been building across the global economy. Worst of all, major central banks continue to put themselves out on a limb.

Building a One-Earth Balance Sheet
Andrew Sheng and Xiao Geng (Project Syndicate) Nov 30, 2021
While all politics is local, it is shaped by a fast-changing global landscape. Only a one-Earth balance sheet – a bottom-up reset of how we measure global wealth – can ensure that countries work toward a better future for all.

Populism, financial markets, and political capitalism
Sebastian Stöckl and Martin Rode (VoxEU) Nov 30, 2021
Financial markets have shown contradictory reactions to the formation of populist administrations. This column, part of the Vox debate on populism, examines whether there is any systematic reason behind the radically different outcomes, using data for 331 elections in 41 EU and OECD countries. The immediate uncertainty introduced into financial markets by an increase in populist vote shares varies according to the populist host ideology. Markets are mostly suspicious of left-wing populism but view the electoral success of right-wing populist parties as unequivocally favourable, possibly because of the tendency for the political and economic elite to collude.

Omicron Introduces New Risks For Global Economy
Brendan McKenna, Nick Bennenbroek, and Jessica Guo (WF Econ Group) Nov 30, 2021
The recently detected Omicron COVID variant has injected new risks into the global economy. In this report, we lay out our base case scenario for the global economy and currency markets amid the early onset of Omicron cases. We also provide a downside scenario should Omicron-related conditions intensify as well as a what an upside scenario for the global economy could look like.