News & Commentary:

Articles/Commentary

Global response is needed to prevent a debt crisis in Africa
Cyril Ramaphosa (FT) Dec 1, 2020
Social gains the continent has made since the early 2000s are threatened by the Covid pandemic.

Gulf states turn inward as they face diminishing resources
Andrew England (FT) Dec 1, 2020
Pandemic and falling oil prices are piling the pressure on economies.

Japan, Korea hold their nerve as currencies surge
William Pesek (AT) Dec 1, 2020
The most remarkable thing about this year's rallies in the yen and won is what's not happening in Tokyo and Seoul: panic. Like clockwork over the last decade, any jump in exchange rates would have had Japanese and South Korean officials – desperate to keep export prices competitive – squeaking with alarm.

Asia & Pacific economies are projected to rebound from COVID-19
Patrick Lenain and Kosuke Suzuki (OECD Ecoscope) Dec 1, 2020
While the world is struggling to exit from the coronavirus crisis, the region Asia & Pacific is a notorious exception: many countries in the region have stopped the COVID-19 pandemic after the first wave, and they quickly returned on a path of growth in the second half of 2020 – a rare accomplishment. The OECD projects that the region's recovery will continue in 2021 and 2022.

Memo on strengthening the role of the International Monetary Fund to enhance global resilience to crises
José De Gregorio (PIIE) Dec 1, 2020
The world rightly expected a series of crises to afflict the emerging-market and developing economies (EMDEs) as a result of the COVID-19 pandemic. This concern seemed inevitable, given the massive capital outflows at the beginning of the crisis. But that has not happened. Since the start of the COVID-19 crisis, the International Monetary Fund (IMF) has swiftly adjusted its financing facilities to face the emergency. The Fund has about $1 trillion for financial support, of which a quarter has been made available, and it is ready to do more. It has acted properly and in a timely manner given the magnitude of the crisis.

Are U.K. Investors Facing a Double Taxation Shock?
Stuart Trow (Bloomberg View) Dec 1, 2020
Those who would be affected by a potential hike in capital gains tax aren't waiting to find out.

Italy Reverts to Its Bad Old Habits
Ferdinando Giugliano (Bloomberg View) Dec 1, 2020
Even if the EU finds a compromise with Poland and Hungary on its $900 billion recovery fund, will recipient nations spend the money properly?

Even Exxon Mobil Is Capitulating to Peak Oil Demand
David Fickling (Bloomberg View) Dec 1, 2020
The most stalwart of producers seems to be having doubts about the future of crude.

Libor's Delayed Demise Rewards Slow-Moving U.S. Bankers
Brian Chappatta (Bloomberg View) Dec 1, 2020
Why switch to the alternative if regulators will keep moving the goalposts?

Get Ready for a Supercharged Economy
Timothy A Duy (Bloomberg View) Dec 1, 2020
Excess savings have supported households in 2020, and rising wages will boost them next year.

OPEC's Lost Its Team Spirit
Julian Lee (Bloomberg View) Dec 1, 2020
Expectations are high OPEC will keep it together and extend its historic output-cut agreement. The price crash will be huge if it doesn't.

When Is a Private Chat With the ECB OK?
Ferdinando Giugliano (Bloomberg View) Dec 1, 2020
Banks that don't have the pleasure of discussing the ECB's outlook and monetary strategy with its chief economist will understandably feel aggrieved.

The Financial Equivalent of a Vaccine
Harold James (Project Syndicate) Dec 1, 2020
While the advanced economies can rely on their central banks to support massive fiscal stimulus in response to the COVID-19 crisis, many developing countries' hands are tied by higher borrowing costs. This is both unfair and unsustainable, pointing to the need for a new, truly global monetary mechanism.

Designing Vaccines for People, Not Profits
Mariana Mazzucato (Project Syndicate) Dec 1, 2020
For all the hope spurred by announcements of demonstrated efficacy in multiple COVID-19 vaccine candidates, there is still a long way to go to deliver on the promise of a universal, freely available "people's vaccine." As matters stand, national and private interests are trumping the principle of health justice.

Mission Sustainable Development
Jeffrey D. Sachs (Project Syndicate) Dec 1, 2020
Nearly 60 years ago, President John F. Kennedy put the United States on a mission to the future by proclaiming that it would land a man on the moon within a decade. Our generation's moonshot mission is sustainable development on Earth.

Could Vaccine Nationalism Prolong the Pandemic?
Tom Bollyky (Project Syndicate) Dec 1, 2020
With multiple producers touting promising results in late-stage trials of COVID-19 vaccine candidates, the end of the pandemic finally seems to be in sight. But rather than work together to produce and distribute vaccine doses, some governments are taking an every-country-for-itself approach – raising serious risks not only for public health, but also for the economic recovery and geopolitical stability.

China Won 2020
Joschka Fischer (Project Syndicate) Dec 1, 2020
After a rocky start, China has clearly ended 2020 on a high note, having brought the pandemic under control and strengthened its position both in Asia and on the global stage. Though the world has been spared another four years of Donald Trump, America and its allies will have their work cut out for them.

Potential consequences of post-Brexit trade barriers for earnings inequality in the UK
Rachel Griffith, Peter Levell, and Agnes Norris Keiller (VoxEU) Dec 1, 2020
On 31 January 2020 the UK formally left the EU after over 40 years of membership. On 31 December, the UK's transition period will come to an end and the UK and EU will establish a new trading relationship with greater trade frictions. At the time of writing, the terms of this relationship remain unclear. However, since the EU is by far the UK's largest trading partner, the implications for the UK economy are likely to be profound. This column discusses potential consequences for the labour market – and earnings inequality – in the UK.

Canada's Encouraging Economic Expansion
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Dec 1, 2020
Following a significant contraction in Q2, Canada's economy rebounded in Q3, rising a little over 40% quarter-over-quarter annualized. Although Q3 GDP was below estimates, the underlying details of the data were encouraging. Still, solid disposable incomes should mean that the economic recovery should persist through 2021.

The Post-Pandemic Brave New World
Martin Sandbu (F&D) Dec 1, 2020
Policymakers' choices during this disruption could shape their economies for decades to come.

Rethinking the World of Work
Sabina Dewan and Ekkehard Ernst (F&D) Dec 1, 2020
The pandemic is accelerating a shift toward more informal and precarious work.

The Long Shadow of an Unlucky Start
Hannes Schwandt and Till von Wachter (F&D) Dec 1, 2020
Youth who graduate in a crisis will be profoundly affected and may never fully recover.

The Jobs of Tomorrow
Saadia Zahidi (F&D) Dec 1, 2020
Some jobs will disappear and others will emerge as the world faces a dual disruption.

Rebuilding Worker Power
Lawrence Mishel (F&D) Dec 1, 2020
Systematic erosion of workers' power relative to their employers has suppressed US wages.

A chance to press on with EU banking union
FT View Dec 2, 2020
Agreement on bolstering crisis-fighting tools shows that solidarity holds.

A light shines in the gloom cast by Covid-19
Martin Wolf (FT) Dec 2, 2020
After a grim recession, a strong and healthy recovery is within reach.

Time for US to address savings crisis for workers
Michelle Seitz (FT) Dec 2, 2020
Ravages of the pandemic means shift is needed to boost financial resilience.

Emerging market cycle shows that quality wins over long-term
Gary Greenberg (FT) Dec 2, 2020
Slower macroeconomic expansion will ensure quality growth retains a premium.

Shelton and Fed 'Independence'
WSJ Dec 2, 2020
Lamar Alexander misses the political nature of the current Fed.

Asia leads, US bleeds in economic divergence
David P. Goldman (AT) Dec 2, 2020
The enormous divergence between Covid-19 infections in the West versus Asia has produced widely varied economic performance. The share of the US population that tests positive for the virus each day rose five-fold since mid-September, while the infection rate in Asia declined from already minimal levels.

How to minimise the impact of the coronavirus on the economy
Rebecca Christie (Bruegel/Politico) Dec 2, 2020
COVID-19 is a global killer. Austerity needs to succumb.

How Artificial Intelligence Could Widen the Gap Between Rich and Poor Nations
Cristian Alonso, Siddharth Kothari, and Sidra Rehman (IMF) Dec 2, 2020
The landscape is likely going to be much more challenging for developing countries which have hoped for high dividends from a much-anticipated demographic transition.

How China, Italy, the UK, and US Can Drive G20 Fossil Fuel Subsidy Reform
Lee Robinson and Ian Mitchell (CGD) Dec 2, 2020
There are four reasons to believe that fossil fuel subsidy reform could be possible at this moment in time.

Over 1 billion people live in poverty hotspots
Raj M. Desai, Homi Kharas, and Selen Özdogan (Brookings) Dec 2, 2020
Where a person is born is the best predictor of their lifetime prospects. Yet, "spatial" income inequality has been widening. Geographic wealth disparities have been increasing in rich and poor countries alike. Eighty percent of global economic activity is generated on 3 percent of the landmass. Countries with worsening regional inequality, in the past decade, have seen greater political polarization, conflict, and government turnover.

Hydrogen Is a Trillion Dollar Bet on the Future
David Fickling (Bloomberg View) Dec 2, 2020
We may have the final piece of the puzzle to prevent devastating climate change. But is it economically viable?

A Recession Ends, But the Shakeup Is Just Starting
Daniel Moss (Bloomberg View) Dec 2, 2020
Covid-19 slammed the door on an era that was already closing in Australia. The next one won't be so easy.

Believe in Global Reflation? The Dollar Does
John Authers (Bloomberg View) Dec 2, 2020
When the world economy is generally healthy, we can expect the greenback to weaken, and that's exactly what's happening.

Hungary and Poland Are Bluffing. Merkel Should Call Them Out
Andreas Kluth (Bloomberg View) Dec 2, 2020
In the fight over money and the rule of law, the European Union is stronger than it looks.

Fortune Should Favor the Brave in European Bonds
Mark Gilbert (Bloomberg View) Dec 2, 2020
With central banks still backstopping the bond market, the yield premium on low-rated debt looks attractive.

How Biden Can Safely Help Iran's Economy
Karen E Young (Bloomberg View) Dec 2, 2020
Removing U.S. hurdles to IMF assistance would give Tehran an economic and political lifeline.

Bankruptcy Is Exactly What China Needs
Anjani Trivedi (Bloomberg View) Dec 2, 2020
It's not quite Chapter 11, but a more robust legal framework has bloated state-owned enterprises in its crosshairs.

European Banking's Moment of Merger Truth
Xavier Vives (Project Syndicate) Dec 2, 2020
Like the 2008-09 financial crisis, which left European Banks saddled with excess capacity, diminished profitability, and tarnished reputations, the COVID-19 pandemic is forcing another sweeping change in the industry. This time, however, the industry's biggest problem is not "too big to fail," but rather "too slow to adapt."

What Yellen Must Do
Joseph E. Stiglitz (Project Syndicate) Dec 2, 2020
Although the United States has survived four years of gross incompetence and pathological mendacity, it now faces the daunting task of achieving a sustainable post-pandemic recovery. Fortunately, no one is better equipped to deal with today's economic challenges than the next US treasury secretary.

Taking National Investment Seriously
Diane Coyle (Project Syndicate) Dec 2, 2020
"Build back better" has become a popular slogan precisely because most people want to look forward and create a brighter future after the COVID-19 pandemic. Achieving this will require governments to increase investment and recalibrate national balance sheets by doing more to nurture natural and social capital.

China's Path to Net Zero
Erik Berglöf (Project Syndicate) Dec 2, 2020
Chinese President Xi Jinping's recent announcement that China aims to achieve carbon neutrality before 2060 marks one of the most important policy initiatives of the last 40 years. Reaching this goal will require extensive collaboration between government and the private sector, animated by a heightened sense of urgency.

How Inequality Reduces Growth
William H. Janeway (Project Syndicate) Dec 2, 2020
There are numerous theories for why the US economy has continued to benefit the few at the expense of the many, and because these explanations are not mutually exclusive, it helps to consider them all. Fortunately, a new book by a leading light of macroeconomics does precisely that.

Impacts of Monetary-Fiscal Policy Interaction
Kaiji Chen, Haoyu Gao, Patrick Higgins, Daniel F. Waggoner, and Tao Zha (VoxChina) Dec 2, 2020
China's 2009 stimulus presents an ideal case for exploring the impacts of monetary-fiscal interaction on credit allocation and investment. During this stimulus period, monetary stimulus itself did not favor SOEs over non-SOEs in credit access. Fiscal expansion, however, enhanced the monetary transmission to bank credit that was allocated to local government financing vehicles (LGFVs) for infrastructure and at the same time weakened the impacts of monetary stimulus on bank credit to non-SOEs in other sectors.

American funding of China is becoming dangerous
Derek Scissors (AEI) Dec 2, 2020
American investment in the People's Republic of China probably exceeds $1 trillion, most occurring in the past six years. The vast majority is portfolio investment—holdings of bonds and, especially, small equities stakes. The amount is surprising because half or more is routed through offshore conduits such as the Cayman Islands. Investment anywhere near this magnitude undermines the view that the US is confronting China economically. Despite tariffs, the 2019 goods trade deficit was almost the same as in 2016. Over that period, Chinese money exited US Treasuries on a net basis. Meanwhile, more than $500 billion in American capital flowed into Chinese securities. One policy step is obvious: Require investors to disclose the true end user of funds. If transparency is controversial, limit disclosure to potentially harmful destinations such as China. Any restrictions on outbound investment, say in advanced technology, would call for a new body similar to the Committee on Foreign Investment in the United States.

Vaccine approval brings a ray of economic hope
FT View Dec 3, 2020
A robust recovery could usher in a repeat of the Roaring Twenties.

No escape from our techno-feudal world
Pepe Escobar (AT) Dec 3, 2020
The political economy of the Digital Age remains virtually terra incognita. In Techno-Feudalism, published three months ago in France (no English translation yet), Sorbonne economist Cedric Durand provides a crucial, global public service as he sifts through the new Matrix that controls all our lives.

China deleverages while the sun shines
David P. Goldman (AT) Dec 3, 2020
China's regulators are fixing the roof while the sun is shining. With the economy in full rebound from the second-quarter Covid recession, Beijing has warned fintech and property companies to raise more equity and pay down debt.

COVID-19 Hits the Poor Harder, but Scaled-Up Testing Can Help
Allan Dizioli, Michal Andrle, and John Bluedorn (IMF) Dec 3, 2020
Unlike lockdowns, better information through widespread testing unequivocally boosts the economy by lowering the risk of infection while interacting with other people.

COVID-19 has widened the income gap in Europe
Zsolt Darvas (Bruegel) Dec 3, 2020
Workers with low-educational levels suffered far worse than others in terms of COVID-19 related job losses during the first half of 2020 in the EU. Jobs for tertiary-educated workers even increased. Thus, the pandemic has increased income inequality, reinforcing the case for inclusive development.

India's Angry Farmers Have Reason to Worry
Mihir Sharma (Bloomberg View) Dec 3, 2020
The old system is crumbling and the government hasn't offered up new assurances yet.

Why Your House Price Might Keep Going Up
Marcus Ashworth (Bloomberg View) Dec 3, 2020
This isn't the first boom in property prices the country has seen before. It certainly won't be the last.

Mining for the Green Economy Is Still Dirty Work
Clara Ferreira Marques (Bloomberg View) Dec 3, 2020
This Russian miner is paying up to fix damage it's caused and better manage the impact of a melting Arctic. Green pressure is working.

What Africa Needs Now Is Its Own Singapore
Noah Smith (Bloomberg View) Dec 3, 2020
Explosive growth in Southeast Asia carries lessons for other poor regions of the world.

Lessons From 2008 for Fighting the Pandemic of 2020
Timothy L O'Brien and Nir Kaissar (Bloomberg View) Dec 3, 2020
Congress needs to ensure that all Americans, not just the affluent, can share in a more robust economy.

Five Reasons to Worry About Faster U.S. Inflation
William C Dudley (Bloomberg View) Dec 3, 2020
People and markets could be in for a surprise.

Container Shipping Is Booming Again. That Probably Won't Last.
Justin Fox (Bloomberg View) Dec 3, 2020
An era of globalization has ended, and the new one will probably mean less stuff on ships.

Big Oil Seeks Redemption in the Hydrogen Revolution
David Fickling (Bloomberg View) Dec 3, 2020
If there's one industry that has the money and expertise to help make the switch from fossil fuels, it's the resources sector.

China Can Spend More to Grow More
Yu Yongding (Project Syndicate) Dec 3, 2020
In 2020, China's economy will probably grow by 2-2.5% – significantly better performance than the other major economies, which are facing contractions. But China still faces serious challenges, which can be addressed only by implementing a more expansionary fiscal policy in the near term.

Australia's China Problem
Gareth Evans (Project Syndicate) Dec 3, 2020
There are many legitimate concerns about China's behavior, including its defiance of international law in the South China Sea, domestic violations of human rights, and discriminatory and overprotective trade and industrial policies. But Australia's huge economic dependence on China obliges it to get along with its larger neighbor.

The Case for a Quadripolar World
Daron Acemoglu (Project Syndicate) Dec 3, 2020
According to the conventional wisdom, the twenty-first century will be characterized by the global shift from American hegemony to Sino-American rivalry. But a bipolar international order is neither inevitable nor desirable, and we should start imagining and working toward alternative arrangements.

The political economy of Africa's interior-to-coast roads
Roberto Bonfatti and Steven Poelhekke (VoxEU) Dec 3, 2020
Africa's interior-to-coast roads are well placed to export natural resources, but not to support regional trade. Are they the optimal response to geography and comparative advantage, or the result of suboptimal political distortions? This column investigates the political determinants of road paving in West Africa in 1965–2014. Autocracies focused more than democracies on connecting metal and mineral deposits to ports, resulting in more interior-to-coast networks. This deposit-to-port bias was only present for deposits located on the elite's ethnic homeland, suggesting that Africa's interior-to-coast roads were the result of ethnic favouritism by autocracies.

European financial integration during the COVID-19 crisis
Stefano Borgioli, Carl-Wolfram Horn, Urszula Kochanska, Philippe Molitor, Francesco Paolo Mongelli, Eva Mulder, and Alessandro Zito (VoxEU) Dec 3, 2020
The COVID-19 shock is unprecedented in terms of the scale and speed of its effects. This column provides an overview of financial fragmentation in the euro area during the crisis through the lens of a novel high-frequency composite indicator. It reveals that after an initial sharp deterioration, euro area financial integration broadly recovered to pre-crisis levels by mid-September, thanks to unprecedented fiscal, monetary and prudential policy responses.

Capitalist systems and income inequality
Marco Ranaldi and Branko Milanovic (VoxEU) Dec 3, 2020
Similar levels of income inequality may coexist with completely different distributions of capital and labor incomes. This column introduces a new measure of compositional inequality, allowing the authors to distinguish between different capitalist societies. The analysis suggests that Latin America and India are rigid 'class-based' societies, whereas in most of Western European and North American economies (as well as in Japan and China), the split between capitalists and workers is less sharp and inequality is moderate or low. Nordic countries are 'class-based' yet fairly equal. Taiwan and Slovakia are closest to classless and low inequality societies.

The China Challenge Can Help America Avert Decline
Kurt M. Campbell and Rush Doshi (FA) Dec 3, 2020
Why competition could prove declinists wrong again.

2020 Lessons, 2021 Priorities
Mary C. Daly (FRBSF Econ Letter) Dec 3, 2020
What lessons should we take from a difficult year — and what should our priorities be for 2021? Overcoming the harsh and uneven economic impacts of COVID-19 and returning to full employment and sustainable 2% inflation will be the Federal Reserve's chief concerns. But success will require us to have confidence in the power of our tools.

The Stimulus Zombie Has Reawakened
Michael Pugliese (WF) Dec 3, 2020
COVID relief talks have once again come into focus. We are still sticking with our baseline assumption of no additional relief, but the recent talks have been an important step towards an eventual deal.

Joe Biden's team of economic reformers
FT View Dec 4, 2020
Without a Democratic Senate, Bidenomics will not get very far.

Inflation fears should not hold back the recovery
FT Vew Dec 4, 2020
Deflation is still the bigger risk for a heavily indebted world economy.

Investment-grade status regains its lustre after pandemic shock
Joe Rennison (FT) Dec 5, 2020
Market turmoil prompts companies to prioritise securing a prime credit rating.

India struggles to tame inflation despite economic contraction
Benjamin Parkin (FT) Dec 4, 2020
Central bank leaves interest rates unchanged as consumer prices continue to rise.

The wealthy must prepare for depressed asset growth
Stefan Wagstyl (FT) Dec 4, 2020
The rich can mitigate the effects of a crisis but cannot escape them entirely. If household assets do not stand on firm economic foundations they will crumble.

Why central banks will double down on lending schemes
Huw van Steenis (FT) Dec 4, 2020
Policymakers experiment to refresh parts of economy quantitative easing cannot reach.

Reports of globalisation's death are greatly exaggerated
Gillian Tett (FT) Dec 4, 2020
Covid-19 has changed rather than ended cross-border flows.

Bet on the geeks to boost the economy
John Thornhill (FT) Dec 4, 2020
Paradoxically, falling productivity in research strengthens the case for increasing spending on it.

The Puzzle of Low Interest Rates
N. Gregory Mankiw (NYT) Dec 4, 2020
Economists don't entirely know why rates have been so low for so long, or whether they will turn out to be mainly a boon or a danger.

The EU's Global Recovery Initiative: A Paper Tiger or the Markings of a Geopolitical Commission?
Samuel Pleeck and Mikaela Gavas (CGD) Dec 4, 2020
Last week, EU foreign affairs and development ministers met virtually, in part to discuss an initiative floated in May 2020 by European Commission President Von der Leyen calling for a Global Recovery Initiative linking debt relief and investments to the Sustainable Development Goals (SDGs). Six months and a ministerial meeting later, we still know very little about the initiative. On the face of it, we deduce that the idea is for some sort of global mechanism for debt-for-SDGs swaps. Yet, while this may be attractive on paper, the reality is that the EU and its member states have little leverage in negotiations on a global debt initiative given the low share of debt they themselves hold in partner countries.

The Washington Consensus stands test of time better than populist policies
Douglas A. Irwin (PIIE) Dec 4, 2020
Thirty years ago, the Peterson Institute's John Williamson coined the term "Washington Consensus" to refer to a set of ten economic policies and reforms that received widespread support at the time. These policies included maintaining fiscal discipline, reordering public spending priorities (from subsidies to health and education expenditures), reforming tax policy, allowing the market to determine interest rates, maintaining a competitive exchange rate, liberalizing trade, permitting inward foreign investment, privatizing state enterprises, deregulating barriers to entry and exit, and securing property rights.

There Is No Chinese Economic Miracle
Daniel Lacalle (Mises Wire) Dec 4, 2020
In most economies, inventories are valued at market prices, while in China they are valued by the authorities and adjusted later. This is just one of many ways China manipulates GDP data.

Harvesting Yield in Emerging Markets
Lupin Rahman and Pramol Dhawan (PIMCO) Dec 4, 2020
Debt of many emerging market countries can offer robust yields and enhance portfolio diversification, provided the asset manager has the resources and sophistication to avoid potential pitfalls.

Federal Deficits Don't Work Like Credit Cards
Noah Smith (Bloomberg View) Dec 4, 2020
No matter what you've heard, the national government isn't like a business or household. It operates on a different set of rules.

Shiller Sees Only Rational Exuberance This Time
John Authers (Bloomberg View) Dec 4, 2020
How far lower rates justify higher stock valuations isn't straightforward, though.

Fiscal Policy During and Beyond the Covid Crisis
Mervyn Allister King (Bloomberg View) Dec 4, 2020
This time really is different.

The Economy Risks Permanent Damage Without Stimulus Now
Mark Gongloff (Bloomberg View) Dec 4, 2020
Congress has wasted more than enough time.

'Stop Trading' Act for Congress Isn't Stopping Much Trading
Joe Nocera (Bloomberg View) Dec 4, 2020
Blunter measures will be required to eliminate even the hint that lawmakers' are profiting from inside information.

A Monetary Mind at the Treasury
John B. Taylor (Project Syndicate) Dec 4, 2020
Former US Federal Reserve Chair Janet Yellen's forthcoming appointment to lead the Department of the Treasury is good news for advocates of rules-based monetary policymaking. Following a period of emergency measures, what the US needs now is a return to clear and predictable decision-making.

The Limits of the RCEP
Lee Jong-Wha (Project Syndicate) Dec 4, 2020
The new Regional Comprehensive Economic Partnership, signed last month by 15 Asia-Pacific countries, represents a firm repudiation of the protectionism that has been gaining ground in recent years. But it cannot save the multilateral trading system – and might undermine it further.

Building an EU-Africa Partnership of Equals
Carlos Lopes (Project Syndicate) Dec 4, 2020
When it comes to ties between the European Union and Africa, returning to "normal" after the COVID-19 crisis is simply not an option. The relationship must be rethought and reshaped – beginning at the upcoming mini-summit of EU and African Union leaders.

The Financial Sector's Gain Must Not Be Biodiversity's Loss
Robin Smale (Project Syndicate) Dec 4, 2020
When it comes to biodiversity and natural capital more broadly, most investors still behave as if these assets were unlimited and the services they provide were free. But change – and financial opportunity – is coming.

Pandemic Crisis Drives Cubans to Rare, Risky Protest
James Bloodworth (FP) Dec 4, 2020
Economic devastation and tightened censorship have made for a bleak 2020.

Commodity market disintegration in the Near East
Laura Panza (VoxEU) Dec 4, 2020
Political disintegrations have the potential to cause large disturbances in international trade. This column investigates the effect of the breakup of the Ottoman Empire on commodity market integration in the Near East. Rising political and economic nationalism, tariff wars, and other protectionist practices prevailed over trade cost-reducing forces, leading to the disintegration of regional markets. At the same, new trade ties were created and colonial market linkages strengthened, despite the anti-global environment of the interwar era. However, the process of trade diversion reflected a shift from multilateralism to bilateralism.

The recent fall in FDI flows to the US
Simeon Djankov and Eva (Yiwen) Zhang (VoxEU) Dec 4, 2020
Foreign direct investment flows to the US have seen a sharp decline in the past two years, despite a cut in the corporate tax rate from 35% to 21% in 2017. Previous research suggests that such a tax cut should have resulted in increased investor appetite. This column argues that countervailing forces, in particular the shift in investment sentiment driven by the corrosion of US openness to trade and global cooperation, have played the dominant role in reducing flows.

Factors that could halt the bull market charge
Michael Mackenzie (FT) Dec 5, 2020
Investor hubris can be pierced when expectations of further gains are as strong as they are now.

America's economic recovery no longer looks so strong
Economist Dec 5, 2020
A difficult winter looms.

Taxing corporate dividends can stimulate investment and reduce the misallocation of capital
Adrien Matray (VoxEU) Dec 5, 2020
Academic research has so far had little to say on the impact of an increase in payout taxes on firm behaviour and the allocation of capital across firms. Using French administrative tax files that cover the universe of firms, this column tracks firm outcomes over the period 2008–2017 and estimates the effect of a steep increase in the dividend tax rate in 2013. It finds that the tax reform led to increased investment and cash holding, improved allocation of capital, and no discernible reduction in investment even among equity-dependent firms.

OPEC+ Needed a SWAT Team, It Got 23 Battalions
Julian Lee (Bloomberg View) Dec 6, 2020
Even the Saudi oil minister called last week's negotiations excruciating. The cartel needs a better way to weather Covid-19's impact on demand.

Can the World Make Hydrogen Happen?
Brooke Sample (Bloomberg View) Dec 6, 2020
Hydrogen energy holds so much promise — if it can get off the ground and start paying off for investors.

Extractive colonial economies and legacies of spatial inequality
Philip Roessler, Yannick Pengl, Robert Marty, Kyle Sorlie Titlow, and Nicolas van de Walle (VoxEU) Dec 6, 2020
The colonial history of Africa still casts a shadow on development in the continent. This column uses a new geospatial dataset to study the long-term effects of colonial cash crop extraction in Africa. It finds that cash crop production had a positive long-run effect on local development in terms of urbanisation, road infrastructure, night-time luminosity, and household wealth. However, this came at the expense of investments in surrounding areas, which appear worse off today than predicted by precolonial factors. The legacy of the colonial economy in Africa was a negative feedback loop of weak institutions and spatial inequities.

Output gaps in practice: Proceed with caution
Jelle Barkema, Tryggvi Gudmundsson, and Mico Mrkaic (VoxEU) Dec 6, 2020
Output gaps remain a popular metric for assessing the stance of countries' business cycles. However, their usefulness for real-time policymaking is disputed due to the challenges in estimating potential output. This column studies the use of output gaps in IMF surveillance work and finds that output gap measures are skewed to the downside, often revised, and only slightly correlated with other indicators of slack. Furthermore, text analysis finds a limited connection between the size of the output gap and policy recommendations. Taken together, these results suggest caution in using output gap estimates for policymaking during the Covid-19 recovery.

The merits of a global carbon offset market
FT View Dec 6, 2020
Stringent standards, governance and audit will be needed to ensure success.

Three priorities for the US to de-escalate the China conflict
Stephen Roach (FT) Dec 6, 2020
Small steps will be needed to rebuild trust but there are gains to be made on trade and dialogue.

Brexit and Covid harden the case for a proper EU financial market
Martin Sandbu (FT) Dec 6, 2020
Efforts to create banking and capital markets unions have languished for too long.

Jobs are the wrong metric to judge a 'Green Industrial Revolution'
Jonathan Ford (FT) Dec 6, 2020
Boris Johnson's 10-point plan is long on wishful thinking and dubious economics.

A Stimulus Dollar Is Only a Dollar
Andy Kessler (WSJ) Dec 6, 2020
Democrats devise magic 'multipliers' to justify spending, but the returns never show.

Governance failings thwart Pakistan's economic recovery
Ilhan Niaz (EAF) Dec 6, 2020
Prospects for Pakistan and particularly for its economy are not good.

Brexit deal uncertainty unnerves investors
Katie Martin (FT) Dec 7, 2020
Consensus investor view that UK and EU will strike an agreement challenged as deadline approaches.

Europe is right to risk a double 'no deal'
Gideon Rachman (FT) Dec 7, 2020
The consequences of bad agreements over Brexit and with Poland and Hungary would last decades.

From Tokyo to Beijing, growing old is hard to do
Leo Lewis (FT) Dec 7, 2020
The economy-sapping shadow cast by Japan's demographic decline holds sombre lessons for China.

A transatlantic effort to take on Big Tech
Rana Foroohar (FT) Dec 7, 2020
The monopoly power of the sector has grown during the pandemic.

Climate Finance May Foul the Economy
Walter Russell Mead (WSJ) Dec 7, 2020
The effects of Biden's Treasury regulating 'environmental risk' will likely be perverse.

A massive stimulus now can save money later
Catherine Rampell (WP) Dec 7, 2020
Here's the argument Joe Biden can use to appeal to penny-pinching lawmakers.

No-Deal Brexit Will Inflict Serious Pain on Europe, Too
Lionel Laurent (Bloomberg View) Dec 7, 2020
A messy end to unfettered U.K. trade would be a big blow to the bloc, even if it's economically more damaging to the Brits.

China and the U.S. Are Facing Off in the Third World
Henry Brands (Bloomberg View) Dec 7, 2020
As rifts among the Western democracies heal, rivalry is turning toward Central Asia, Africa and Central America.

Quants Need an X Factor to Avoid Black Swans
John Authers (Bloomberg View) Dec 7, 2020
The value disaster has challenged a popular style of investing.

Spain Is Headed in the Wrong Direction
Ferdinando Giugliano (Bloomberg View) Dec 7, 2020
Madrid deserves solidarity from its European partners, but it also needs reforms that will help it run on its own again after receiving EU help.

How One Country's Ban Saved Short Sellers From Themselves
Shuli Ren (Bloomberg View) Dec 7, 2020
South Korea's stock market is now a post-Covid star — and domestic day traders are setting the pace.

Will 1% Yield Force the Fed Into Curve Control?
Brian Chappatta (Bloomberg View) Dec 7, 2020
As the 10-year Treasury yield climbs, Wall Street's 2021 outlooks provide clues for just how much of a selloff the central bank will tolerate.

Only the U.S. and China Can Stave Off Debt Disaster
Scott Morris (Bloomberg View) Dec 7, 2020
A pandemic-induced crisis threatens to hurl millions into poverty unless Washington and Beijing can work together.

The Infrastructure Spending Challenge
Kenneth Rogoff (Project Syndicate) Dec 7, 2020
Macroeconomists broadly agree that productive infrastructure spending is welcome after a deep recession, especially when interest rates are at record lows. But in advanced economies, any new project typically requires navigating difficult right-of-way issues, environmental concerns, and objections from apprehensive citizens.

The housing cycle and monetary policy transmission
Kristina Bluwstein, Michal Brzoza-Brzezina, Paolo Gelain, and Marcin Kolasa (VoxEU) Dec 7, 2020
Transmission of monetary policy depends to a large extent on the phase of the housing cycle. This is because residential property prices are important determinants of banks' willingness to lend. This column presents analysis for the US which shows that in the mature phase of the housing market boom, or immediately after a bust began, the effects of a monetary expansion were smaller than they were earlier in the housing cycle. This is relevant for central banks which are considering responding to the Covid-19 pandemic by easing monetary policy during a period of relatively high house prices.

The battle over ESG investing
FT View Dec 8, 2020
Proposed US rule change to mandate lending to fossil fuel companies is ill-advised.

Brazil's borrowing binge gives investors the jitters
Michael Stott (FT) Dec 8, 2020
Challenge by central bank chief to economy minister underlines worries over fiscal plans.

People understand statistics better than politicians think
Sarah O'Connor (FT) Dec 8, 2020
If the public are 'sceptical and cynical' about economic data, it is because it does not always reflect reality.

Covid crisis is a chance to adapt and evolve the UK's welfare state
Gavin Kelly (FT) Dec 8, 2020
This year has been a reminder that societies need effective ways of sharing the burden if they are to be resilient.

As Brexit Talks Stall, Boris Johnson Offers the E.U. an Olive Branch
Stephen Castle (NYT) Dec 8, 2020
After weeks of hardball, the British prime minister has dropped a threat to break international law. The move could help Britain's talks on a trade deal with the European Union.

The Fannie and Freddie Conundrum
WSJ Dec 8, 2020
A regulator's plan to recapitalize the firms is the least worst option.

The coronavirus aid package should include stimulus checks, targeted to those who need them most
WP Dec 8, 2020
The case for adding well-targeted direct payments to an economic support plan.

Inflation could make a comeback. If it does, Joe Biden will pay the price.
Sebastian Mallaby (WP) Dec 8, 2020
The era of low inflation and low interest rates could be coming to an end.

How Japan nationalized its stock market
William Pesek (AT) Dec 8, 2020
The concept of a creature dining on its own tail – suggesting a self-generated growth cycle – is a macabre one. So how about blowing it up to its logical limit: A whale eating its own tail?

The pandemic could give way to an era of rapid productivity growth
Economist Dec 8, 2020
Businesses have adopted new processes and technologies—and there are signs that they may pay off.

Why poor countries reject debt relief
Brian Caplen (Banker) Dec 8, 2020
Not all low-income nations are impressed with the G20's pandemic initiative on debt. Many think they can do better raising money from the markets.

A Greener Future Begins with a Shift to Coal Alternatives
Christian Bogmans and Claire Mengyi Li (IMF) Dec 8, 2020
Tough questions will need to be asked and answered when considering the policy alternatives supporting a shift away from coal.

How to reignite Africa's growth and avoid the need for future debt jubilee
Rabah Arezki and Aitor Erce (IMF) Dec 8, 2020
In ancient times, debt jubilees were customary after wars or dramatic events. By wiping out debts, these jubilees sought to avoid polarization and social tensions. Today, the massive dislocations caused by the COVID-19 pandemic provide justification for the international community to countenance such a debt jubilee—especially for poorer countries, such as many of those in Africa.

Ignore the Noise. This Is a Classic Cyclical Recovery
John Authers (Bloomberg View) Dec 8, 2020
Strip out worries about the coronavirus, and the basic picture is of an economy roaring back.

Why Pound Traders Are Optimistic About Brexit
Marcus Ashworth (Bloomberg View) Dec 8, 2020
Many of the downside risks of no deal are already priced in, and Covid and the weak dollar are bigger factors in sterling's future direction.

One Brexit Deal Is Done, But the Big One Waits
Therese Raphael (Bloomberg View) Dec 8, 2020
The resolution of talks over Britain's compliance with last year's withdrawal treaty is crucial. But it doesn't break the logjam.

The Pandemic Public-Debt Dilemma
Michael Spence and Danny Leipzinger (Project Syndicate) Dec 8, 2020
Much of the conventional wisdom about how governments should manage the COVID-19 economic fallout is perfectly appropriate for advanced economies, but dangerous elsewhere. Even if developing and emerging economies could simply borrow and spend more to weather the storm, doing so could jeopardize their long-term economic prospects.

The EU Must Break the Brexit Deadlock
Marcel Fratzscher (Project Syndicate) Dec 8, 2020
With the Brexit negotiations now in their final days, it is crucial that the European Union break the impasse and secure a deal. If Europe cannot even forge an agreement to establish its long-term relationship with the United Kingdom, it will have little chance of becoming a global power in its own right.

Central Banking's Green Mission
Mariana Mazzucato (Project Syndicate) Dec 8, 2020
Since the 2008 global financial crisis, central banks have shown time and again that they have the power to maintain the economic status quo. Now, they must use that power to support a timely green transition.

How Biden Can Create Good Jobs
Dani Rodrik (Project Syndicate) Dec 8, 2020
Long before the pandemic, the United States had been losing middle-class jobs, owing to automation, deindustrialization, global competition, and the advent of the "gig economy." Fortunately, if President-elect Joe Biden's administration heeds the evidence about what works, it can mitigate this trend and boost economic recovery.

The BIS credit-to-GDP gap and its critiques
Terhi Jokipii, Reto Nyffeler, and Stéphane Riederer (VoxEU) Dec 8, 2020
A growing body of literature has highlighted important flaws in the credit-to-GDP gap computed according to the BIS guidelines as a measure of excess credit for policy purposes. This column assesses the relevance of these critiques from the Swiss perspective. It finds no compelling evidence to suggest the need to deviate from using the BIS gap. However, authorities should be cautious in interpreting the gap's signal, particularly during periods of large and strong GDP movements and during long-lasting boom phases and subsequent busts. Authorities should also consider strengthening their decision-making frameworks with additional credit relevant indicators.

Global value chain responses to previous health shocks
Anirudh Shingal and Prachi Agarwal (VoxEU) Dec 8, 2020
International health crises have the ability to send shockwaves through global value chains. This column examines how value chains have responded to two previous health shocks – SARS and MERS – in order to draw lessons for the current pandemic. There is evidence of geographical diversi?cation within value chains, as well as of an overall non-resilience to the SARS epidemic in particular. The e?ects are driven by lower-middle-income importers that were more integrated in global value chains, received more investment, were more competitive, and were more reliant on the severely a?ected partners.

Narrative monetary policy surprises and the media
Saskia ter Ellen, Vegard H. Larsen, and Leif Anders Thorsrud (VoxEU) Dec 8, 2020
Though the transmission channels of central bank communication to financial institutions are well researched, less is known about how they relay information to the public at large. This column shows how central bank communication indirectly reaches the general public by affecting news media coverage on topics of particular relevance for monetary policy decisions. The findings suggest that the media, and how it acts as an information intermediary, can have a sizeable effect on economic outcomes.

Investment capital for all
Mauricio Miller (AEI) Dec 8, 2020
There are separate systems for wealthy and low-income entrepreneurs; wealthy entrepreneurs are recipients of equity-style cash infusions, and lower-income entrepreneurs are offered debt or other less useful instruments. Thus, lower-income entrepreneurs are unable to properly use their entrepreneurial talents, which hurts the economy as a whole. A new system in which low-income entrepreneurs can access equity-like cash would benefit them and the economy as a whole. Such a system has been tried in Liberia with success and should be ported to the United States.

The case against cancelling debt at the ECB
FT View Dec 9, 2020
Calls for the central bank to write down government bonds are misguided.

Milton Friedman was wrong on the corporation
Martin Wolf (FT) Dec 9, 2020
The doctrine that has guided economists and businesses for 50 years needs re-evaluation.

Will bitcoin end the dollar's reign?
Ruchir Sharma (FT) Dec 9, 2020
Digital currency poses a significant threat to greenback's supremacy.

China Wants to Be the World's Banker
Henry M. Paulson Jr. (WSJ) Dec 9, 2020
The U.S. is in danger of losing its dominant leadership position in global financial services.

Belt and Road paranoia will rumble on under Biden
Pepe Escobar (AT) Dec 9, 2020
Seven years after being launched by Chinese President Xi Jinping, first in Astana and then in Jakarta, the Belt and Road Initiative increasingly drives the American plutocratic oligarchy completely nuts.

Companies have raised more capital in 2020 than ever before
Economist Dec 9, 2020
What now?

Greece Is Setting Itself Up for Another Financial Crisis
Antonis Giannakopoulos (Mises Wire) Dec 9, 2020
The center-right government that came into power in July of 2019 has failed to liberalize the economy and make market-oriented reforms, with the pandemic making things even worse.

Navigating Capital Flows—An Integrated Approach
Tobias Adrian, Gita Gopinath, and Ceyla Pazarbasioglu (IMF) Dec 9, 2020
Our analysis suggests that there is no "one-size-fits-all" response to capital flow volatility, nor is it a case of "anything goes" or that all policies are equally effective.

Thinking big: debt management considerations for the EU's pandemic borrowing plan
Rebecca Christie (Bruegel) Dec 9, 2020
If not handled correctly, the European Union's transition to take on a new role as an issuer of public debt risks crowding out existing markets. Managing that transition correctly is almost as big a challenge as spending the money itself.

Britain and Europe Need the Brexit Talks to Succeed
Bloomberg View Dec 9, 2020
A deal that lessens some of the damage is achievable, and long overdue.

Why Water Won't Make It as a Major Commodity
David Fickling (Bloomberg View) Dec 9, 2020
There's good reason to believe H20 will never be traded globally. But the benefits of pricing it are clear.

Goldman's Metal Bull Has Tunnel Vision
Clara Ferreira Marques (Bloomberg View) Dec 9, 2020
Commodities optimists may be too focused on the light at the end rather than the surrounding darkness.

European Stocks Aren't as Cheap as They Look
Richard Cookson (Bloomberg View) Dec 9, 2020
The apparent cheapness of European and U.K. equities has nothing to do with geography and everything to do with what companies are in the relevant markets.

Europe's Bankers Aren't Ready for Marriage
Ferdinando Giugliano (Bloomberg View) Dec 9, 2020
For all the good intentions about a euro zone banking union, the zeitgeist has changed on cross-border mergers. Just look at Italy's UniCredit.

We May Be Exactly Wrong About Technology and Inequality
Noah Smith (Bloomberg View) Dec 9, 2020
Robots, artificial intelligence and new sources of energy will empower workers, drive more innovation and raise demand for labor.

When 31% Recovery Is a Thing of Beauty for Bond Holders
Shuli Ren (Bloomberg View) Dec 9, 2020
Xi Jinping's microchip dreams for China are built on lots and lots of distressed bonds.

Merkel's Last Chance
Jan-Werner Mueller (Project Syndicate) Dec 9, 2020
Faced with the threat of a veto from the Polish and Hungarian governments, many in the EU are now counting on the German Chancellor to broker a deal to secure passage of the bloc's next seven-year budget and recovery fund. But given that the dispute involves fundamental European values, there should be nothing to negotiate.

The Case for an Arabian Universal Basic Income
Steffen Hertog (Project Syndicate) Dec 9, 2020
For now, a generous universal basic income remains unaffordable in Western countries. But in the oil-producing states of the Middle East and North Africa, some form of direct wealth sharing might be the only politically feasible way to reform bloated public sectors and avoid a long-term fiscal crisis.

China Takes the Lead in Development Finance
Kevin P. Gallagher (Project Syndicate) Dec 9, 2020
China has provided many developing countries the additional resources they had long sought from the West. If Chinese lenders align this funding with efforts to ensure financial and environmental sustainability, the world would stand a much better chance of achieving a green and inclusive recovery from the COVID-19 crisis.

A Post-War Playbook for a Post-COVID Recovery
Maximo Torero (Project Syndicate) Dec 9, 2020
The pandemic's impact on major economies has so far been four times worse than that of the 2008 global financial crisis, while entire sections of many developing economies have been wiped out. Any policy intervention should treat the fight against COVID-19 like a war and the hardest-hit economies like conflict zones.

Data, Collateral, and Implications for the Credit Cycle
Leonardo Gambacorta, Yiping Huang, Zhenhua Li, and Han Qiu (VoxChina) Dec 9, 2020
The use of massive amounts of data by large technology firms (big techs) to assess firms' creditworthiness could reduce the need for collateral in credit markets. Using a unique dataset of more than 2 million Chinese firms that received credit from both an important big tech firm (Ant Group) and traditional commercial banks, we find that a greater use of big tech credit—granted on the basis of machine learning and big data —could reduce the importance of collateral and potentially weaken the financial accelerator mechanism.

COVID-19 and key workers: The role of migrants across regions and cities
Lukas Kleine-Rueschkamp, and Cem Özgüzel (VoxEU) Dec 9, 2020
Workers in essential services have been crucial during COVID-induced lockdowns. This column assesses the contribution of migrants to 'key worker' occupations across regions in 31 European countries. Based on individual-level data on occupations from the EU labour force survey and the European Commission's definition of key workers, it shows that migrants are as likely to support regional economies in key worker occupations as native-born workers are. However, within countries, large differences exist across regions and between cities and rural areas. Overall, migrants play an especially important role in low-skilled key occupations and in cities. At the same time, they also provide a vital source of labour supply in skilled jobs critical for European healthcare systems, such as doctors and nurses.

Italy's Economy Is Under Pressure as Pandemic Continues
Ylenia Gostoli (FP) Dec 9, 2020
The government is walking on a tightrope as the coronavirus crisis grinds on.

Four steps to equitable education
David Malpass (FT) Dec 10, 2020
Debt relief is needed now to stop the pandemic denying more children a basic education, with girls most at risk.

The valuation warning signs for stock markets
Ian Harnett (FT) Dec 10, 2020
Current investor complacency about global equities might soon be tested.

What world is Brexit being launched into?
Simon Kuper (FT) Dec 10, 2020
'The EU has found in Brexit almost the only thing that unites its members'.

Nigerian economy at risk of 'unravelling', warns World Bank
Neil Munshi (FT) Dec 10, 2020
Impact of pandemic will send personal incomes in Africa's largest economy back four decades.

Biden Can Make American Trade Deals Great Again
Robert B. Zoellick (WSJ) Dec 10, 2020
Unions might resist, but most Democrats now agree that economic isolation is a losing proposition.

Deleveraging pauses China stock rally but refreshes economy
David P. Goldman (AT) Dec 10, 2020
Chinese equities lagged gains in Western markets during the past four weeks as Beijing's regulators pressed companies to reduce debt. Property developers, the most levered sector, performed worst in Hong Kong after several members of the Hang Seng China Enterprises Index announced secondary offerings. Secondary issues dilute the stake of existing shareholders.

Global trade is booming — just without the U.S.
Fareed Zakaria (WP) Dec 10, 2020
Globalization never stopped. It's just that the United States is opting out.

Three nations could rule the world together if they wanted
Stephen Kinzer (BG) Dec 10, 2020
China, Japan, and South Korea could brush the United States aside — if they could only get past centuries of conflict.

Europe should promote a Climate Club after the US elections
Guntram B. Wolff (Bruegel) Dec 10, 2020
Time has come for Europe, the US and possibly China to create a global "Climate Club".

A $4.5 Billion Chip Deal Shows Dark Side of the Boom
Tim Culpan (Bloomberg View) Dec 10, 2020
GlobalWafers is paying 100 times last year's free cash flow for a slowing business in an underperforming sector.

Like Life, Inflation Tends to Come at You Fast
John Authers (Bloomberg View) Dec 10, 2020
Consumers are primed to spend money in a way they haven't been for a generation.

Maybe Brexit Isn't So Bad After All
Tyler Cowen (Bloomberg View) Dec 10, 2020
The events of the last year should prompt a reassessment of the European Union's virtues.

China's Global Power Tops the U.S.? New Measures Say No
Henry Brands (Bloomberg View) Dec 10, 2020
GDP and military spending matter, but so do networks of allies and "resilience."

Boris Johnson's Brexit Divide-and-Rule Plan Is Failing
Lionel Laurent (Bloomberg View) Dec 10, 2020
Instead of prodding Germany into a Brexit deal against French wishes, the U.K. prime minister is binding them closer together.

Why Surprise Inflation Could Push Fed to Ease Even More
Brian Chappatta (Bloomberg View) Dec 10, 2020
The central bank isn't going to allow bond vigilantism to imperil this economic recovery.

Seven Easy Ways to Fix Trump's Trade Blunders
Ramesh Ponnuru (Bloomberg View) Dec 10, 2020
Biden's choice for trade representative, Katherine Tai, should stress results over bombast.

Lagarde Doesn't Act on Her Dire Warnings
Ferdinando Giugliano (Bloomberg View) Dec 10, 2020
The ECB's economic outlook for Europe is bleak. Its policy could have shown more urgency.

EU Leaders Must Hold the Green Line
Pascal Lamy, Enrico Letta, and Laurence Tubiana (Project Syndicate) Dec 10, 2020
The European Union has taken monumental steps this year to deepen the bloc's integration and solidarity in the face of not just the pandemic but also the climate crisis. By threatening to derail this progress, Hungary and Poland have placed a risky bet, and other EU leaders must call their bluff.

Supply Chains and Demand
Richard Haass (Project Syndicate) Dec 10, 2020
The pandemic has shown that supply chains will need to be rethought, with more emphasis put on supplier diversification, domestic production, and stockpiling. The challenge will be to strike a balance ensuring that a targeted and limited industrial policy does not become a cover for protectionism.

ECB prepares for the next stage of coronavirus support
FT View Dec 11, 2020
Monetary stimulus is necessary but cannot do all the work.

Standing on the edge of the Brexit precipice
FT View Dec 11, 2020
A no-deal outcome will hurt Britain more than the EU.

On Brexit, the Tories have fallen prey to magical thinking
Camilla Cavendish (FT) Dec 11, 2020
Ministers still wish away hard trade-offs without a clear vision for prosperity if there is no deal.

China parts ways with US, Japan easy money
William Pesek (AT) Dec 11, 2020
So much for the "PBOC put" that was supposed to lead China to Japan-like ruin. In recent years, punters expressed fears the People's Bank of China would go the way of the Bank of Japan and US Federal Reserve.

Colonialism Doesn't Explain the Developing World's Problems
Lipton Matthews (Mises Wire) Dec 11, 2020
It is popular to assume that colonialism explains most modern-day dynamics in the developing world. But what if precolonial institutions are the real deciding factors?

ECB Finds Itself Stuck in Conscious 'Active Inertia'
Mohamed Aly El-Erian (Bloomberg View) Dec 11, 2020
The central bank commits to a holding operation in the hope that vaccines and other policy makers will come to the rescue.

The Debt Dogs that Didn't Bark
Barry Eichengreen (Project Syndicate) Dec 11, 2020
If global growth resumes in 2021, aided by the rollout of vaccines and the Fed's continued commitment to ultra-low interest rates, some developing countries may be able to avoid default, because yield-hungry investors will continue to buy their bonds. But other countries will not be so lucky.

Recovery Is Not Enough
H.T. Goranson and Beth Cardier (Project Syndicate) Dec 11, 2020
While it is understandable that business and political leaders are desperate for a return to normal, thinking in such terms is a mistake. If the COVID-19 pandemic has taught us anything, it is that we need an entirely new way of thinking about systemic stability and security in the twenty-first century.

The Antitrust Anti-Consensus
Niamh Dunne (Project Syndicate) Dec 11, 2020
Decades after free marketeers gained an effective monopoly over the field of antitrust law, there is a new race to rethink this critical tool of economic governance. With a growing list of socioeconomic and political problems being attributed to the power of Big Business, the debate is as timely as it is controversial.

Trade policy responses to the COVID-19 pandemic: A new dataset
Simon Evenett, Matteo Fiorini, Johannes Fritz, Bernard Hoekman, Piotr Lukaszuk, Nadia Rocha, Michele Ruta, Filippo Santi, and Anirudh Shingal (VoxEU) Dec 11, 2020
One of the instruments many governments resorted to in responding to the COVID-19 pandemic was trade policy. This column introduces a new high frequency dataset on trade policy changes targeting medical and food products since the beginning of the pandemic, documenting how countries used such instruments on a week-by-week basis. While there was a burst in trade policy activism in February and March 2020 in tandem with the rise in COVID-19 cases, there was significant variation across governments in their resort to trade policy, the types of measures used, and the duration of interventions.

Local conditions and the integration of refugees
Cevat Giray Aksoy, Panu Poutvaara, and Felicitas Schikora (VoxEU) Dec 11, 2020
Around 2.4 million refugees and irregular migrants arrived in Europe from 2015 to 2016. This column presents systematic evidence on how local unemployment and attitudes towards immigrants at refugees' initial place of residence shape their multi-dimensional integration in the context of the European refugee crisis. Leveraging Germany's centralised allocation policy, which exogenously assigns refugees to live in specific counties, it finds that high initial local unemployment negatively affects refugees' economic and social integration. Further, favorable attitudes towards immigrants promote the economic and social integration of refugees.

Why the World Should Root for the EU in Brexit Talks
Edward Alden (FP) Dec 11, 2020
If Brussels folds, it will mark the end of the last, best hope for stopping a race to the bottom.

Inflation debate looms large over US market outlook
Michael Mackenzie (FT) Dec 12, 2020
Fed's shift of strategy to tolerate rising prices above target was key signal for investors.

China pulls back from the world: rethinking Xi's 'project of the century'
James Kynge and Jonathan Wheatley (FT) Dec 12, 2020
Chinese overseas lending has fallen sharply amid a reassessment of the Belt and Road Initiative.

After the pandemic, will inflation return?
Economist Dec 12, 2020
Low inflation underpins today's economic policy. It is not guaranteed to last.

Pandemic Housing Shifts Will Speed Recovery in 2021
Conor Sen (Bloomberg View) Dec 12, 2020
A slumping home market dragged out a rebound from the 2008 recession; this time the industry will help, not hinder, the economy.

Restoring UK growth is more urgent than cutting public debt
Martin Wolf (FT) Dec 13, 2020
Britain must reassure the world it is in the hands of competent leaders.

Keeping the young cooped up makes scant economic sense
Thijs van Rens (FT) Dec 13, 2020
Now that Covid-19 vaccines are arriving there is even more reason to reinstate workers' freedoms.

As Covid optimism grows, investors seek to hedge against inflation risk
Gavyn Davies (FT) Dec 13, 2020
The global reflation trade means a change of strategy on portfolio protection.

Spacs are oven-ready deals you should leave on the shelf
Jonathan Ford (FT) Dec 13, 2020
Complex structures and high fees mean many of these speculative vehicles will disappoint.

Domestic and global challenges of China's economic transformation
David Dollar (EAF) Dec 13, 2020
Three structural challenges to sustainable Chinese economic growth in the years ahead.

China's bold new Five Year Plan
Yao Yang (EAF) Dec 13, 2020
The key priorities set out in preparatory documents for the Chinese government's 14th Five Year Plan (2021–2025).

Irrational Exuberance Hits the Oil Market
Julian Lee (Bloomberg View) Dec 13, 2020
There are many reasons to stay cautious about a recovery in oil demand, and Covid-19 is only one of them.

After the Pandemic, a Pile of IOUs
Niall Ferguson (Bloomberg View) Dec 13, 2020
Economists see a free lunch in fiscal stimulus, but that depends on low post-pandemic interest rates.

To the moon and back, Chinese R&D is leaving the US behind
Matthew Slaughter (FT) Dec 13, 2020
It's telling that the same day a Chinese rocket collected lunar rocks, a key US radio telescope collapsed.

Should zombie companies be feared?
Robin Wigglesworth (FT) Dec 14, 2020
New York Fed research challenges worries over the corporate walking-dead.

America's two-track economy: the small business credit crunch
Robin Wigglesworth, Joe Rennison, and Robert Armstrong (FT) Dec 14, 2020
Central bank largesse and a hungry bond market are only reaching the bigger US companies.

Green Light to a Greener Economy: Three Investment Trends
Geraldine Sundstrom (PIMCO) Dec 14, 2020
Some of the world's leading countries have recently announced major sustainability targets. These moves, aimed at making economic recovery faster and more sustainable, will create investment opportunities as well.

What to do When Low-for-Long Interest Rates are Lower and for Longer
Tobias Adrian (IMF) Dec 14, 2020
Policymakers must weigh the pros of more stimulus today against the cons of higher financial stability risks in the future.

Apple's Globalization Plans Meet a Baton Charge in India
Tim Culpan (Bloomberg View) Dec 14, 2020
The risks of a more volatile workforce confronts leaders seeking to move away from China.

The Case for Keeping Europe's Negative Rates Where They Are
Lena Komileva (Bloomberg View) Dec 14, 2020
As the gap between the haves and have-nots has grown, the European Central Bank's policy has been a great equalizer.

It's All in the Mix: How Monetary and Fiscal Policies Can Work or Fail Together
Elga Bartsch, Agnès Bénassy-Quéré, Giancarlo Corsetti, and Xavier Debrun (VoxEU) Dec 15, 2020
The notion of the monetary-fiscal policy mix has made a spectacular comeback as countries have been forced to takle the devastating economic fallout from the COVID-19 pandemic. The 23rd Geneva Report on the World Economy stresses that the desirable coordination between central banks and treasuries can only work if the credibility of their commitment to desirable long-term goals – healthy growth under price stability and public debt sustainability – is preserved and backed by a resilient institutional framework, and urges policymakers to develop a strategy aimed at regaining policy space on both sides of the mix.

Chile's Great Pension Raid
Andrés Velasco (Project Syndicate) Dec 14, 2020
Because the policies they produce are so ludicrous, populist cycles eventually crash against reality and come to an end. Sadly, for too many Chileans, the crash may come when they reach old age with no retirement savings.

China Should Join the Paris Club
Anders Åslund and Djoomart Otorbaev (Project Syndicate) Dec 14, 2020
Even with rock-bottom interest rates, the COVID-19 pandemic has forced one vulnerable country after another to default on its external debt, or to signal that it may do so soon. Worse, the main foreign creditor to debt-distressed emerging economies, China, has little experience managing cascading sovereign defaults.

The Next Frontier of Responsible Business
Bertrand Badré (Project Syndicate) Dec 14, 2020
The COVID-19 crisis has underscored the need for an entirely new approach to how we produce and consume. While Environmental, Social, and Governance standards of corporate risk disclosure are a necessary first step, the next should be unified metrics enabling assessment and comparison of companies' wider impact on the world.

Bull or Bear in 2021?
Jim O'Neill (Project Syndicate) Dec 14, 2020
Though the COVID-19 pandemic continues to disrupt social and economic life around the world, it has yet to take the wind out of equity markets' sails. And with developed countries' monetary and fiscal policies remaining generous, and vaccines on the way, there is good reason to suspect the bulls to keep charging in the new year.

International shock transmission through heterogeneous firms
Julian di Giovanni, Andrei Levchenko and Isabelle Mejean (VoxEU) Dec 14, 2020
Superstar firms have recently been linked to phenomena such as top income inequality, comparative advantage in trade, and the fall in the labour share. Another important feature of superstar firms is their international trade linkages. This column studies how susceptible an economy with few large firms which account for the majority of imports and exports is to international business cycle shocks. It finds that at the micro level, such larger firms respond more strongly to foreign shocks than smaller firms. At the macro level, this heterogeneity dampens the domestic GDP response to a foreign shock.

Some key principles to drive the G20 economic policy response in 2021
Elena Flores and Lucia Granelli (VoxEU) Dec 14, 2020
In April 2020, G20 Finance Ministers and Central Bank Governors endorsed the 'G20 Action Plan Supporting the Global Economy Through the COVID-19 Pandemic', setting out the key principles guiding the global response to the crisis and commitments to specific actions for driving forward international economic cooperation. The G20 agenda in 2021 – under the Italian Presidency – will be closely linked to the Action Plan. This column develops a few principles to support the G20's work in 2021.

Iraq's Economic Collapse Could Be Biden's First Foreign-Policy Headache
Farhad Alaaldin and Kenneth M. Pollack (FP) Dec 14, 2020
If the Iraqi government fails to pay state workers' salaries in January, it could lead to widespread instability and violence. The United States and the international community must shore up Baghdad's finances before it's too late.

The risks that investors should prepare for in 2021 s
Mohamed El-Erian (FT) Dec 15, 2020
After a liquidity-driven rally on markets, central bank largesse might not be sustainable.

The Market the Central Bank Bought
WSJ Dec 15, 2020
The Bank of Japan becomes the country's largest stockholder.

Global Britain ditches EU for an Asian future
David Hutt and Nile Bowie (AT) Dec 15, 2020
With the future of Britain-European Union trade on a precipice, simmering post-Brexit uncertainty hasn't deterred the United Kingdom from projecting itself as a re-emerging force in global and particularly Asian trade

Playing Snakes and Ladders with International Development Aid: When Fragile Accounting Rules and Political Pressures Mix
Andrew Rogerson and Euan Ritchie (CGD) Dec 15, 2020
The way forward must include a much greater dose of transparency and consultation with developing countries in the formulation of the ODA rules themselves, for example on debt relief.

What Are the Development Outcomes of Development Finance?
Charles Kenny (CGD) Dec 15, 2020
More development finance to power, more power to the people?

Elections and Political Cohesion Can Promote Tax Reforms
Sanjeev Gupta and João Tovar Jalles (CGD) Dec 15, 2020
It is not uncommon for different interest groups to oppose tax reforms even when these reforms promote a more equitable and efficient tax system. Tax reforms are notoriously difficult to design and implement, and there is little consensus on considerations that help advance them among the general population. In a paper published today, we delve into political considerations that influence the implementation of tax reforms in 45 emerging market and low-income economies. We find that both proximity to elections and political cohesion in a given country can help foster tax reforms, while left-leaning orientation of governments can deter reforms.

Memo to the OECD on building consensus on global goals and policy action
Caroline Atkinson (PIIE) Dec 15, 2020
The Organization for Economic Cooperation and Development's (OECD)1 particular strength among multilateral institutions is its combination of intellectual focus with deep knowledge and convening power across a broad range of countries and topics. It does not have the power to disburse money, conditional on policies. But through its research and publications, and standard setting, it has established metrics and norms that influence country policies across many areas. Some examples include: the Program for International Student Assessment (PISA) that since 1997 has conducted periodic studies in 79 countries, both OECD and non-OECD members, of student academic attainment at 15 years of age and that is widely used to judge the effectiveness of national education policies; the export credit arrangement, a negotiated framework that limits export subsidies, fostering a level playing field, for example on coal-fired power plants; and the anti-bribery convention, begun in 1999 and strengthened in 2009 and now being reviewed again, which for the first time focused on the firms that offer—rather than receive—bribes as a way to curb corruption, making it a crime in signatory countries for companies to offer bribes to foreign officials for business-related purposes.

China Just Showed How Much the World Needs It
Daniel Moss (Bloomberg View) Dec 15, 2020
Strong finish to the year comes as recoveries in the U.S., Japan and Germany show signs of faltering.

Biden Can Forget About Making IPhones in the U.S.
Tim Culpan and Noah Smith (Bloomberg View) Dec 15, 2020
There's a chance to reduce supply-chain vulnerability while rebuilding global alliances.

The ECB's New Stealth Mandate
Melvyn Krauss (Project Syndicate) Dec 15, 2020
Over the course of the pandemic, the European Central Bank has effectively adopted a new mandate, perhaps having concluded that its inflation target is unattainable without more fiscal stimulus. The new top priority appears to be financial solidarity within the eurozone, and it could not have come at a better time.

Kick-Starting FDI in Africa
Carl Manlan and Efosa Ojomo (Project Syndicate) Dec 15, 2020
To help catalyze growth and tackle extreme poverty, African leaders must try to attract hundreds of billions of dollars in foreign direct investment. They should emulate China and start by targeting the 165 million members of the continent's diaspora.

China, EU Leaders Hold 'Intense' Virtual Meeting
Shannon Tiezzi (Diplomat) Dec 15, 2020
The meeting highlighted continuing areas of friction between China and Europe, especially on market access and human rights.

There is no stock market bubble
Martin Wolf (FT) Dec 16, 2020
The bigger question is whether rock-bottom interest rates will revert to 'normal' and, if so, when.

Five forces that will define our post-Covid future
Martin Wolf (FT) Dec 16, 2020
Sustaining a dynamic world economy and managing the global commons were always going to be hard, even before the era of populism and great-power conflict.

China's power is rising in an unstable world
Ryosuke Harada (FT) Dec 16, 2020
Japan and Europe must step up to stabilise the global order.

G20 nations must devise a global plan for growth post-Covid
Gordon Brown (FT) Dec 16, 2020
We cannot afford to exclude the world's lower-income countries from the economic recovery.

Renewables bring deflation to the energy sector
Mark Lewis (FT) Dec 16, 2020
This year has offered a taste of what is to come in energy markets over the next decade.

If self-interest is the measure, Boris Johnson will do a Brexit deal
Robert Shrimsley (FT) Dec 16, 2020
The UK prime minister puts himself top of his creditors, but forgets his debt to voters.

The Fed's Stimulus Paradox
WSJ Dec 16, 2020
The central bank again revises its growth forecasts upward.

China plays winning and losing hands in Africa
Francesco Sisci (AT) Dec 16, 2020
Chinese trade and investment in Africa are the single most important factors that allowed waves of millions of Africans to afford to pay human traffickers thousands of dollars for the chance of a better life across the Mediterranean Sea.

Branding Vietnam a "currency manipulator" epitomizes what's wrong with the concept
Jason Furman (PIIE) Dec 16, 2020
The US Treasury today officially labelled Vietnam as a currency manipulator, a process that will trigger "enhanced bilateral engagement with Vietnam" and could eventually be used to justify countervailing duties against Vietnam. The Vietnamese designation may well have been consistent with the criteria set out in the 2015 law updating the US approach to currency manipulation, but this designation is a substantive mistake when it comes to Vietnam and an illustration of the broader problems with the concept of currency manipulation.

Treasury gets one right and two wrong in latest currency manipulation charges
Joseph E. Gagnon (PIIE) Dec 16, 2020
Today the US Treasury Department released its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, also known as the Foreign Exchange Report. Treasury named Switzerland and Vietnam as currency manipulators. China and nine other economies were put on a monitoring list for enhanced surveillance.[1] Treasury plans to consult with the newly named manipulators on ways they can grow without large trade surpluses, but Treasury's leverage to change their policies is meager.

US debt has increased, but burden of servicing it has fallen
Jason Furman and Lawrence H. Summers (PIIE) Dec 16, 2020
An environment of low interest rates makes it easier to pay off debts. If economic growth rates exceed interest rates, debt will naturally shrink relative to the size of the economy. This situation also creates more space for primary deficits (noninterest spending minus revenue) without resulting in an unlimited explosion of debt.

Glaciers of Global Finance: The Currency Composition of Central Banks' Reserve Holdings
Alina Iancu, Neil Meads, Martin Mühleisen, and Yiqun Wu (IMF) Dec 16, 2020
Financial links seem to be a key driver of reserve currency holdings.

British Sovereignty Means Free Will, Not a Free Lunch
Therese Raphael (Bloomberg View) Dec 16, 2020
If the U.K. gets an EU trade deal, there will still be a never-ending series of decisions and trade-offs to be made. Some will be very uncomfortable.

Billionaires Can't Pay Latin America's Covid Tab
Mac Margolis (Bloomberg View) Dec 16, 2020
Argentina's pandemic wealth tax is a feel-good distraction from the deeper fiscal reforms that the region needs.

India Wants a V-Shaped Recovery at Any Cost
Andy Mukherjee (Bloomberg View) Dec 16, 2020
Traders who see ruppee appreciation as a surefire bet need to realize that the country's liquidity glut is a political choice

The Measure of Financial Regulators' Independence
Howard Davies (Project Syndicate) Dec 16, 2020
The benefits of central bank independence are accepted by almost everyone nowadays. And there is growing evidence that financial regulation works best – boosting the stability of the banking system – when regulators and supervisors have similar independence.

The SolarWinds Wake-Up Call
Michael Chertoff, Latha Reddy, and Alexander Klimburg (Project Syndicate) Dec 16, 2020
The recently discovered SolarWinds hack holds obvious lessons for governments around the world, particularly after a year in which cyber attacks on critical infrastructure have surged. International action is urgently needed, not to write new treaties or codes of conduct, but to enforce existing norms.

Avoiding America's Vicious COVID Cycle
Mohamed A. El-Erian (Project Syndicate) Dec 16, 2020
The United States has the means not only to arrest current negative public-health and economic dynamics but also to transform them into a virtuous cycle. But this will require sustained and simultaneous efforts in four areas.

FinTech Adoption and Household Risk-Taking
Claire Yurong Hong, Xiaomeng Lu, and Jun Pan (VoxChina) Dec 16, 2020
China has experienced a rapid increase in FinTech penetration in the form of offline digital payments over the past decade. Using unique account-level data on consumption, investments, and FinTech usage from the Ant Group, we find that FinTech can lower investment barriers and help households move toward optimal risk-taking. Inferring individuals' risk tolerance from their consumption volatility, we find that individuals who are more risk tolerant benefit more from FinTech advancement. Examining the enhancement in risk-taking across geographical locations, we find that cities with low financial service coverage benefit the most from FinTech penetration.

Achieving child literacy and numeracy in the world's poorest areas
Ila Fazzio, Alex Eble, Robin Lumsdaine, Peter Boone, Baboucarr Bouy, Pei-tseng Jenny Hsieh, Chitra Jayanty, Simon Johnson, and Filipa Silva (VoxEU) Dec 16, 2020
Achieving universal basic literacy and numeracy has long been a policy goal for development agencies working in areas of extreme poverty. This column presents evidence from a bundled intervention in rural Guinea Bissau which suggests that targeted education policies can have substantial positive effects on children's schooling outcomes. Such policies could play a key role in helping people 'escape' the poverty trap, as the education gains from such interventions elevate local children's attainment levels far beyond those found in neighbouring areas.

Which Advanced Economies Will Recover the Fastest?
Michael Pugliese, Nick Bennenbroek, and Hop Mathews (WF Econ Group) Dec 16, 2020
All major economies should see better times in 2021, but how quickly will some economies bounce back compared to others? In this report, we analyze numerous factors that could drive the 2021 growth rebound.

FOMC Will Continue Its Asset Purchases For Quite Some Time
Jay H. Bryson (WF Econ Group) Dec 16, 2020
The FOMC probably did not offer the clarity for asset purchases that some market participants had wanted. But in our view, the Fed will continue to buy Treasury securities and MBS well into next year.

The Eleventh Hour COVID Relief Push: Will It Succeed?
Michael Pugliese (WF Econ Group) Dec 16, 2020
Policymakers in Congress continue to work toward a bill for government funding and COVID relief. In our view, a COVID relief bill becoming law is now more likely than not, though the details remain murky.

Peru's Presidential Frenzy Is Threatening Hard-Won Coronavirus Victories
Milagros Costabel (FP) Dec 16, 2020
Years of chaos at the top have left governance a mess.

High savings rates and the unequal recovery
FT View Dec 17, 2020
Longer-term growth will need a shift from consumption to investment.

How this stock market rally differs from past cycles
Peter Oppenheimer (FT) Dec 17, 2020
Higher valuation starting point might mean lower returns over medium term.

The UK will now count the cost of Brexit sovereignty
Philip Stephens (FT) Dec 17, 2020
Boris Johnson's government is about to exchange real power for a chimera.

Can consumers really lead the economy out of recession?
Stefan Wagstyl (FT) Dec 17, 2020
The better-off have seen savings soar, but poor households are often struggling with debt.

Three economic lessons for Joe Biden from Donald Trump
Megan Greene (FT) Dec 17, 2020
Whatever you may think of the outgoing administration, there are still some useful takeaways.

The W.T.O. Is Having a Midlife Crisis
Farah Stockman (NYT) Dec 17, 2020
Fixing the global trading system means first coming to grips with why it is broken.

Narendra Modi's Reform Drama
WSJ Dec 17, 2020
Liberalizing agriculture is politically difficult but economically crucial for India.

Democrats need to start fighting debt hysteria now
Paul Waldman (WP) Dec 17, 2020
But they need to change the way they talk about it, since Republicans are preparing to use debt as a weapon against the Biden presidency.

Why Boris Johnson Is Opting for a Semi-Brexit
Denis MacShane (Globalist) Dec 17, 2020
An exhausted British Prime Minister simply can't fight on two fronts.

The Fed's Latest Balance Sheet Guidance: A Compass, Not a Map
Allison Boxer (PIMCO) Dec 17, 2020
The Federal Reserve signals that monetary policy accommodation will remain firmly in place.

What is Really New in Fintech
Arnoud Boot, Peter Hoffmann, Luc Laeven, and Lev Ratnovski (IMF) Dec 17, 2020
Fintech's potential to reach out to over a billion unbanked people around the world, and the changes in the financial system structure that this can induce, can be revolutionary.

Memo to the Inter-American Development Bank on Latin America's health, economic, and political challenges
Monica de Bolle (PIIE) Dec 17, 2020
The COVID-19 pandemic struck Latin America in late February 2020. Governments in the region had time to adopt public health strategies, economic rescue plans, and policies to protect millions of informal and vulnerable workers throughout the region, but institutional weakness hampered their efforts.

Memo to the UN Economic Commission for Africa on the continent's health and economic crisis
Adnan Mazarei (PIIE) Dec 17, 2020
Africa faces a significant combination of health and economic crises. The health toll of the COVID-19 pandemic has been lower than in many other regions, but the human cost is significant and will continue to rise. More resources are needed to address the public health needs of the people in many African countries.

Powell Gives Emerging Markets an Even Longer Leash
Daniel Moss (Bloomberg View) Dec 17, 2020
Asian countries from Indonesia to South Korea can ease without fear of a sharp Fed pullback, at least in 2021.

Vietnam May Be Too Successful for Its Own Good
Daniel Moss (Bloomberg View) Dec 17, 2020
Being branded by the U.S. as a currency manipulator puts the country in some pretty strong company.

Italians Are Starting to Like the Germans
Ferdinando Giugliano (Bloomberg View) Dec 17, 2020
Angela Merkel's support for fiscal transfers and her sound pandemic management are winning her new friends in Rome.

Worried About Inflation After Covid? Don't Be
Tyler Cowen (Bloomberg View) Dec 17, 2020
The end of the pandemic is more likely to lead to demand rationing than price increases.

How Markets Can Defy Gravity Again in 2021
Mark Gilbert and Marcus Ashworth (Bloomberg View) Dec 17, 2020
Here are 10 charts suggesting 2020's trends will be your friend in the coming year.

How to Make Climate Pledges Stick
Shang-Jin Wei (Project Syndicate) Dec 17, 2020
Following US President-elect Joe Biden's victory and recent carbon-neutrality pledges from China, Japan, the European Union, and others, now is the time to meet words with action. That means moving beyond finger-pointing and working toward a uniform carbon tariff and tax regime to increase the costs of emissions globally.

The End of Efficiency
Robert Skidelsky (Project Syndicate) Dec 17, 2020
Economists have been strangely blind to the need to trade off efficiency for longer-term sustainability, largely because their equilibrium models regard the future as simply an extension of the present. But there is no reason to believe that what is efficient today will be efficient tomorrow and always.

The Brussels Effect Comes for Big Tech
Anu Bradford (Project Syndicate) Dec 17, 2020
Although US officials are finally waking up to the need to govern the digital economy, America's laissez-faire approach has left the door wide open for the European Union to step in as the global rule-maker. And with two new landmark regulations, the EU has set its sights squarely on the US tech giants.

Countdown to Climate Catastrophe
Mohamed Nasheed (Project Syndicate) Dec 17, 2020
By submitting updated climate action plans to the United Nations, countries that have contributed the least to the climate change crisis are now demonstrating the most commitment to resolving it. Developed countries need to heed their example.

Hamilton Beats MMT
Todd G. Buchholz (Project Syndicate) Dec 17, 2020
Ultra-low interest rates have fueled growing support for Modern Monetary Theory, which holds that governments can simply print money and ignore rising public debt levels without having to face the consequences. It is a neat and tempting argument, as long as one ignores history and common sense.

Competition among high-frequency traders and market liquidity
Johannes Breckenfelder (VoxEU) Dec 17, 2020
High-frequency trading has increased rapidly since the mid-2000s, and now represents about 50% of trading volume in US equity markets and between 24% and 43% in European equity markets. This column explores empirically whether increased competition among high-frequency traders has adverse effects on market liquidity. It exploits a European tick size reform which led to more competition among high-frequency trades for certain groups of stock, and finds an adverse effect on market liquidity. The negative effect is driven by increased use of speculative trading strategies if competition increases.

Two proposals to resurrect the Banking Union: The Safe Portfolio Approach and SRB+
Luis Garicano (VoxEU) Dec 17, 2020
Without completion of the Banking Union, Europe's Economic and Monetary Union will continue to be fragile and exposed to a return of the doom loop. This column provides a politically and economically viable solution based on first, creating a model 'Safe Portfolio' and, through a reform of the regulatory treatment of sovereign exposures, incentivising banks to move towards it; and second, reforming the resolution framework to empower the Single Resolution Board while simultaneously setting up, within it, a European deposit insurance based on the emerging consensus around a 'hybrid model'.

Market risks abound — but there are potential rewards
Merryn Somerset Webb (FT) Dec 18, 2020
If the US looks pricey, why not look to UK stocks?

Foreign investors dash into emerging markets at swiftest pace since 2013
Jonathan Wheatley (FT) Dec 18, 2020
Investors warn of looming risks even as billions of dollars have flooded into asset class.

Clueless About 2020, Wall Street Forecasters Are at It Again for 2021
Jeff Sommer (NYT) Dec 18, 2020
Despite a horrendous record in forecasting, Wall Street is making bullish predictions for the stock market next year. Ignore them but invest anyway, our columnist says.

Nowhere to go but up for the Thai baht
Peter Janssen (AT) Dec 18, 2020
A US Treasury Department report issued on Thursday tagged Thailand along with nine other mostly Asian countries as a possible currency manipulator, notably at a time when the Bank of Thailand is struggling and largely failing to keep the baht competitive against rival currencies.

Explaining cross-country differences in growth performance in the second quarter of 2020
Nigel Pain and Lukasz Rawdanowicz (OECD Ecoscope) Dec 18, 2020
There is a strong cross-country association between activity, the strictness of containment measures and changes in mobility, complementing the detailed analysis of the relationship between mobility and containment policy measures.

U.S. Relief Package Is Necessary But Insufficient
Mohamed Aly El-Erian (Bloomberg View) Dec 18, 2020
Although the effort will be a start, bolder action will be needed to ease overreliance on the Fed and improve longer-term prospects.

China's Bungled Overseas Loans Reveal a Key Weakness
Noah Smith (Bloomberg View) Dec 18, 2020
The nation's vaunted Belt and Road Project was meant to build influence around the world. Instead, it's stirred resentment.

The Dangerous Allure of Green Central Banking
Daniel Gros (Project Syndicate) Dec 18, 2020
Europe's central bankers have been insulated from political influence to pursue the very narrow mandate of price stability. Greening monetary policy might look attractive at first glance, but it represents a departure that is incompatible with their independence.

Brexit and the Brussels Effect
Paul De Grauwe (Project Syndicate) Dec 18, 2020
After long, ill-tempered negotiations in which the UK government has tried to secure privileges for itself that it would not extend to the European Union, it is not surprising that a trade deal remains out of reach. But if the fundamental issue is sovereignty, a deal could still be reached quite easily.

What the Biden Presidency Means for US Economic Policy
Michael J. Boskin (Project Syndicate) Dec 18, 2020
Although Joe Biden has ambitious proposals to raise taxes and spend trillions of dollars over the next decade, he will be constrained if Republicans retain control of the Senate. He should welcome that outcome as an opportunity to govern in the mode of Bill Clinton, rather than as the ideologue others would like him to be.

Local inequalities of the COVID-19 crisis
Augusto Cerqua and Marco Letta (VoxEU) Dec 18, 2020
There is widespread concern about the toll of the pandemic on local economies, but little causal evidence to assess its real costs. This column presents an impact evaluation of the local economic effects of the COVID-19 crisis in Italy, based on a counterfactual application of machine learning algorithms. It documents that, to date, impacts on employment and firms have been dramatically uneven across the Italian territory and spatially uncorrelated with the epidemiological pattern of the first wave. It shows that this heterogeneity is associated with sectoral specialisation, exposure to social aggregation risks, and pre-existing labour market fragilities. Finally, it argues that such diverging local trajectories call for a place-based approach in the policy response to the crisis.

Why India's Farmers Won't Stop Protesting
Surupa Gupta and Sumit Ganguly (FP) Dec 18, 2020
Agriculture's importance for the labor market cannot be underestimated—especially amid a historic pandemic.

Measuring economies' impact on the planet
FT View Dec 19, 2020
UNDP has adjusted its development index to include the environmental toll.

Small-cap stocks shine as Tesla makes splash
Michael Mackenzie (FT) Dec 19, 2020
Market rally broadens out as investors look to economic recovery.

Talk of a global economic reset must not ignore grim realities
Adam Tooze (FT) Dec 19, 2020
Scientists may have provided us with a miraculous fix for Covid, but history shows that any path to recovery will be long.

Britain and the EU edge closer to a trade deal
Economist Dec 19, 2020
Lying behind the most contentious issues in the Brexit trade talks is a lack of trust.

New U.K. Lockdown Signals Worsening Economic Outlook
Mohamed Aly El-Erian (Bloomberg View) Dec 19, 2020
The implications of a variant of Covid-19 will play out beyond the borders of Britain and complicate the progress made toward a return to normalcy.

Better Accounting Can Get Us Through the Pandemic
Ian Ball and Dag Detter (Bloomberg View) Dec 19, 2020
A more complete view of a country's fiscal health can help governments build public trust, generate revenues and even save lives.

Tracking GDP using Google Trends and machine learning
Nicholas Woloszko (VoxEU) Dec 19, 2020
A pre-requisite for good macroeconomic policymaking is timely information on the current state of the economy, particularly when economic activity is changing rapidly. Given that GDP figures are usually only available on a quarterly basis, the current crisis has prompted a search for alternative high frequency indicators of economic activity. This column presents evidence from a new tracker developed by OECD which uses Google Trends and machine learning to provide real-time estimates of GDP growth in countries all over the world.

Poisonous politics lurk behind the EU recovery fund
Antonio Roldán (FT) Dec 20, 2020
Southern European states must make sure reforms work this time.

Stimulus Deal Provides Economic Relief, for Now
Ben Casselman and Jim Tankersley (NYT) Dec 20, 2020
The aid package will keep millions from losing jobless benefits. But it comes too late to prevent lasting damage to many families and businesses.

Covid Political Relief
WSJ Dec 20, 2020
Another spending blowout, but at least it has limits on the Fed.

To TPP-2 or not to TPP-2, that is the question
Phil Levy (EAF) Dec 20, 2020
Popular aversion to the TPP [in the United States] had more to do with its symbolic nature than its actual content.

The opportunity to resuscitate the WTO
Bernard Hoekman (EAF) Dec 20, 2020
A Biden administration can have a prompt and positive impact by rolling back the Trump administration's unilateral trade actions and provide immediate oxygen to the WTO.

Napoleon Alive and Well and Working in Downing Street
Denis MacShane (Globalist) Dec 20, 2020
The UK needs to realize that cutting trade links with the continent has always been dumb — whether for Napoleon in December 1807 or Johnson in December 2020.

Women Won't Recover Easily From India's Pandemic
Shruti Rajagopalan (Bloomberg View) Dec 20, 2020
The Covid-19 crisis has made their already daunting road to economic and social independence even more difficult.

Oil's Vaccine Trade Faces Hurdles Ahead
Julian Lee (Bloomberg View) Dec 20, 2020
Oil prices have surged on hopes effective vaccines mean we can quickly put the pandemic behind us. Not so fast.

Where globalisation was hiding, and how far it might go
James Anderson and Yoto Yotov (VoxEU) Dec 20, 2020
The gravity equation of international trade raises several empirical puzzles relating to the decreasing impact of distance, the declining trade-related costs of bilateral trade, and the estimation of trade elasticities. This column introduces a new, 'short-run gravity' model which simultaneously resolves all three of the above-mentioned puzzles. The model estimates a 14% decline in the distance elasticity and shows that capacity reallocation raised world manufacturing trade by 75% between 1998 and 2006. Finally, an estimated structural parameter implies that the short-tun trade elasticity is about one-fourth of its long-run counterpart.

EU should bide its time on China investment deal
FT View Dec 21, 2020
Beijing has offered concessions on market access in hurry to seal accord.

Regulation alone will not strengthen Europe's digital sector
Martin Sandbu (FT) Dec 21, 2020
The EU needs more risk-taking capital and reformed product markets.

State support for Covid-hit companies has to change
Raghuram Rajan (FT) Dec 21, 2020
The blanket help governments first provided needs to be better targeted and private expertise brought in.

Memo to the European Commission on the future of European trade policy
Robert Z. Lawrence (PIIE) Dec 21, 2020
The announced intention of President-elect Joe Biden to strengthen US alliances and participate in international institutions offers an opportunity for the European Union to set its global trading strategy on a new path by reinvigorating the US-EU trade relationship, revitalizing the World Trade Organization (WTO), and implementing a coordinated response to the systemic problems presented by Chinese policies.

Memo to the European Commission on the European Union's contribution to international financial regulation and oversight
Nicolas Véron (PIIE) Dec 21, 2020
The Commissioner for Financial Services Policy[1] should define and promote a vision for a sustainable global financial regulatory and supervisory order, based on the lessons from the previous major international financial crisis in 2007-09 and its aftermath. As a member of President Ursula von der Leyen's "geopolitical Commission," the Commissioner should lead in setting the international agenda and build global credibility by driving the corresponding "domestic" (i.e., EU) reforms at home. This memo focuses on the international aspects.

Better Ways to Use Aid in Middle-Income Countries
Ranil Dissanayake, Charles Kenny and Mark Plant (CGD) Dec 21, 2020
Donors should focus ODA on the poorest places.

Will new monetary policy frameworks succeed in achieving inflation targets?
Damien Puy, Lukasz Rawdanowicz and Kimiaki Shinozaki (OECD Ecoscope) Dec 21, 2020
Monetary policy has been successful in influencing financial markets, the first stage of monetary policy pass through to demand and inflation. But over the past two decades, core inflation in advanced economies has rarely risen above targets. Recently discussed and implemented changes to monetary policy frameworks, which all depend crucially on the inflation expectations channel, could help improve the effectiveness of monetary policy and achieve stable and higher inflation. However, challenges with controlling inflation expectations, the uncertainty surrounding their effect on demand, along with continued structural changes holding down inflation all point to caution (OECD, 2020).

This Is the Wrong Time for a Wealth Tax
Ferdinando Giugliano (Bloomberg View) Dec 21, 2020
Many are calling for a one-off tax on the rich to help governments pay for their pandemic spending. But there'd be risks in rolling this out too soon.

The Fed Needs More Emergency Powers, Not Less
Natasha Sarin (Bloomberg View) Dec 21, 2020
Curbs included in the latest pandemic relief package are a concern.

How to Make Better Economic Policy Choices
Mariana Mazzucato and Simon Sharpe (Project Syndicate) Dec 21, 2020
While public policy organizations are increasingly diversifying their decision-making approaches, many remain overly reliant on static tools such as cost-benefit analysis. Such tools have severe limitations, leading to policy errors with serious long-term consequences.

The Pandemic's Long Economic Shadow
Stephen S. Roach (Project Syndicate) Dec 21, 2020
While mass vaccination points to an end to the COVID-19 pandemic in the next year or so, it does not provide immunity against longer-term economic damage. And research on the aftermath of previous pandemics suggests that the impact on supply and demand is likely to be far-reaching and profound.

Thriving in a post-pandemic economy
Debora Revoltella and Pedro J. F. de Lima (VoxEU) Dec 21, 2020
The Covid-19 pandemic poses severe risks for Europe's economy, but it also presents opportunities. The sharp short-term shock will be followed by large structural changes to the global economy in the long term. This column sheds light on the challenges ahead using data from the European Investment Bank Investment Survey. Large sectors of Europe's economy, particularly SMEs, need to innovate and adopt digital technologies to avoid falling behind. Policy support needs to evolve from liquidity provision to a more targeted push for structural transformation.

The fading light of liberal democracy
Martin Wolf (FT) Dec 22, 2020
Pluto-populists' strategy of using identity issues to convince voters to act against their economic interests is working.

Clean up our Christmas supply chains
Grace Forrest (FT) Dec 22, 2020
Modern slavery is still all too prevalent in the labour that produces consumer goods.

The year that showed the resilience of the US system
Janan Ganesh (FT) Dec 22, 2020
Pessimists underrate the fiscal stimulus and the transfer of presidential power in 2020.

The case for the 60/40 portfolio in equities and bonds
Erin Browne (FT) Dec 22, 2020
Strategy proves resilient in 2020 despite questioning by some investors as obsolete.

The factory by a Tuscan beach and the future of ESG investing
Silvia Sciorilli Borrelli and Attracta Mooney (FT) Dec 22, 2020
Some investors who want to assess the environmental record of companies worry about how ratings are compiled.

Fighting a Stock Exchange Shakedown
WSJ Dec 22, 2020
A new rule will help traders access vital price information.

Five Charts on the Euro Area's Post-COVID-19 Recovery and Growth
Nathaniel Arnold and Vina Nguyen (IMF) Dec 22, 2020
The COVID-19 pandemic is creating severe social and economic hardship in Europe. While the extraordinary policy measures and lockdowns dampened the impact of the pandemic's first wave, a large second wave and new lockdowns are threatening the recovery.

Designating Vietnam as a currency manipulator: Mnuchin's sound and fury
Marcus Noland (PIIE) Dec 22, 2020
In an act of political vandalism, outgoing Treasury Secretary Steven Mnuchin has declared Vietnam a "currency manipulator." Yet any gain from roiling the diplomatic waters would appear to be negligible: As a result of this public designation, Treasury pledges now to "commence enhanced bilateral engagement with Vietnam ." To quote Shakespeare, this is sound and fury signifying nothing.

Memo to the European Commission on Europe's recovery through investment in science, technology, and innovation
Reinhilde Veugelers (PIIE) Dec 22, 2020
A science, technology, and innovation machine in full gear will ensure a prosperous post-COVID-19 EU economy that provides well-paid jobs and a healthy, safe, and clean environment for all of its citizens. The European Union's efforts in these areas, however, have not responded fast enough to societal challenges in the past.

Can Poor Countries Avoid a Vaccine Bidding War?
Anne O. Krueger (Project Syndicate) Dec 22, 2020
For all of the good news about the arrival of safe and effective COVID-19 vaccines, the hard truth for the coming year is that global demand will outpace supply. Without a multilateral agreement to allocate doses globally, the road to recovery will be much longer than it otherwise could have been.

Will China Turn Off Asia's Tap?
Brahma Chellaney (Project Syndicate) Dec 22, 2020
China has never hesitated to use its hydro-hegemony against its downstream neighbors. With its planned new mega-dam on the Yarlung Zangbo river, it is taking this approach to the next level.

The long shadow of monetary policy
Phurichai Rungcharoenkitkul, Claudio Borio, and Piti Disyatat (VoxEU) Dec 22, 2020
In recent years, a key challenge for central banks has been the shrinking room for policy manoeuvre as interest rates have declined to historical lows in many countries. The Covid-19 pandemic has inevitably exacerbated the problem. Once the worst is over, rebuilding policy space will be critical. This column presents a theoretical model in which the impact of monetary policy on financial vulnerabilities can complicate that challenge by constraining policy choices down the road. The model includes two realistic features typically excluded from standard setups: banks create money, and lending behaviour generates endogenous booms and busts. As it turns out, in such a framework the very notion of a natural rate of interest driven by saving and investment comes into question.

Polarised elections raise economic uncertainty
Scott Baker, Aniket Baksy, Nicholas Bloom, Steven Davis, and Jonathan Rodden (VoxEU) Dec 22, 2020
Elections can cause economic uncertainty, especially when elections take place in a politically polarised context. This column studies how national election cycles in 23 countries influence economic policy uncertainty, as measured by the share of newspaper articles that discusses uncertainty and economic policy. Economic policy uncertainty clearly rises in the months leading up to national elections. Average economic policy uncertainty values are 13% higher in the month before and the month of national elections than in other months during the same election cycle. In the US, economic policy uncertainty increases are especially pronounced around close and highly polarised presidential elections.

Democratic Values Are a Competitive Advantage
Zack Cooper and Laura Rosenberger (FA) Dec 22, 2020
The contest with authoritarianism requires the United States to understand its strengths.

A Cure for the Brexit Trade Blues
Ibrahim Khan (FP) Dec 22, 2020
After it leaves the European Union for good, the U.K. will need a new trade bloc. The Commonwealth can help.

Pandemic calls for a new approach to growth
FT View Dec 23, 2020
Record-breaking plunges in national income do not reflect the full damage to wellbeing.

Decarbonisation goals require huge commitment to critical metals
John Dizard (FT) Dec 23, 2020
It will take a minimum of seven to 10 years to develop the new mines we will need.

Stand ready for the big five technology convulsions reshaping markets
Cathie Wood (FT) Dec 23, 2020
Investors must position portfolios for the innovations that will transform the global economy.

What an EU-China investment treaty would mean for companies
Ben Hall (FT) Dec 23, 2020
Negotiators rush to complete a limited deal between two giant markets.

The ingredients of ECB success will be boldness and clarity
Reza Moghadam (FT) Dec 23, 2020
Central bank must remove ambiguity over its inflation target.

Happy New Year?
Uri Dadush (Bruegel) Dec 23, 2020
A recovery from the COVID-19 recession is underway though the suffering is far from over, especially for the most vulnerable. Inequality is both a consequence of the pandemic and a cause of its severity. Many countries need comprehensive policy change to address its worst effects.

Global Policy Responses to Capital Flow Volatility
Annamaria De Crescenzio, Annamaria Kokenyne, Dennis Reinhart, and Julia Schmidt (IMF) Dec 23, 2020
The nexus between the global financial cycle and extreme capital flow episodes, as well as currency crises, is here to stay.

When 6,000 Islands Work From Home, Expect the Urge to Merge
Andy Mukherjee (Bloomberg View) Dec 23, 2020
Indonesia's five rival telcos are realizing that competing head to head across the immense archipelago doesn't make business sense.

Europe's Misconceived Cohesion
Bálint Magyar and Balint Madlovics (Project Syndicate) Dec 23, 2020
After a deal to convince Hungary and Poland to drop their veto threat against the European Union's budget and recovery fund, the EU can never again say that it does not negotiate with extortionists. Far from representing a breakthrough, the deal has in fact compromised the bloc's defining principles and long-term viability.

Five Cheers for 2021
Mark Leonard (Project Syndicate) Dec 23, 2020
After a year of death, despair, and deep uncertainty, there are glimmers of light on the horizon. Not only is responsible leadership returning to the United States, but there is new momentum behind efforts to address some of the biggest and most urgent challenges of our time.

What Is Driving Asia's Technological Rise?
Jonathan Woetzel and Jeongmin Seong (Project Syndicate) Dec 23, 2020
Asia's rapid emergence as a global technological leader over the last decade is a testament to the power of collaboration. And yet, in much of the world, the tide is turning toward isolationism and protectionism – a trend that will sap potential in many cutting-edge sectors.

Putting the Twenty-First Century Back on Track
Javier Solana (Project Syndicate) Dec 23, 2020
The sense of optimism with which the West rang in the new century 20 years ago has long since been replaced by the shock of terrorist attacks, financial crashes, pandemics, and other crises. But if we broaden our perspective, we will see that none of the challenges facing us is insurmountable.

Verifying China's COVID-19 Recovery Using the FRBSF China CAT
Remy Beauregard, John G. Fernald, and Mark M. Spiegel (VoxChina) Dec 23, 2020
Using the FRBSF China Cyclical Activity Tracker, we confirm the robustness of China's recovery from the COVID-19 downturn. The FRBSF "China CAT" estimates that first quarter 2020 China GDP plunged 6.4 standard deviations below its detrended level a year earlier, but by the end of the third quarter, China economic activity had recovered to only 0.1 standard deviations below trend. As such, the FRBSF China CAT index validates the accuracy of the economic recovery from the COVID-19 pandemic reported in Chinese GDP figures.

Looming Aid Cuts Will Harm Afghan Women's Health
Lynzy Billing (FP) Dec 23, 2020
With violence on the rise and the U.S. military drawing down, international donors are pulling back some assistance to Afghanistan. Women in refugee camps stand to suffer.

The deal is done. Now Britain needs a post-Brexit vision
FT View Dec 24, 2020
Trade agreement will avert chaos but still represents a hard EU exit.

Management: what business learnt in the time of coronavirus
Andrew Hill (FT) Dec 24, 2020
Most chief executives are preparing for the volatility of 2020 to continue even if the global economy starts to recover.

The year the UK housing market defied gravity
Nathan Brooker (FT) Dec 24, 2020
But there are reasons to believe that the 'mini boom' will not survive into 2021.

The Brexit deal is just the end of the beginning
Robert Shrimsley (FT) Dec 24, 2020
Shorn of the economic advantages of EU membership, the UK is going to need a more agile and effective leadership.

Central banks are starting to put more value on anecdotal evidence
Gillian Tett (FT) Dec 24, 2020
As investor exuberance diverges from the pain seen in the real economy, bankers need to broaden their focus.

Prosperity After Brexit
WSJ Dec 24, 2020
The last-minute trade deal opens new doors for the U.K., EU and U.S.

The tech war that isn't
David P. Goldman (AT) Dec 24, 2020
Washington last week added China's Semiconductor Manufacturing International Corp to the "entity" list that requires US companies to get special permits to trade with it, rattling the Chinese chipmaker's stock price.

Peso rally isn't all it seems in the Philippines
William Pesek (AT) Dec 24, 2020
The Covid-19 disruptions of 2020 are creating upside-down scenarios few saw coming, including a very counterintuitive rally in the Philippine peso.

Infinite Money Says Shares Will Keep Going Up in 2021
Marcus Ashworth (Bloomberg View) Dec 24, 2020
Keep faith in the recovery trade.

For Corrosive Inequality, Look to the Upper Middle Class
Noah Smith (Bloomberg View) Dec 24, 2020
It's not only billionaires that are the problem.

What Lifted Trump Could Sink Biden
J. Bradford DeLong (Project Syndicate) Dec 24, 2020
Donald Trump managed to receive 74 million votes despite countless failures for the simple reason that he presided over three years of a high-pressure economy in which wages grew rapidly. If the Democrats ignore this lesson or listen to fiscal hawks already pushing for austerity, they will face a painful reckoning in 2024.

Vernacularisation and linguistic democratisation
Christine Binzel, Andreas Link, and Rajesh Ramachandran (VoxEU) Dec 24, 2020
The use of a language in written and formal contexts that is distinct from the languages used in everyday communication – such as Latin in early modern Europe and Standard Arabic in the Arabic-speaking world, both past and present – comes with benefits, but also with costs. Drawing on publishing data from early modern Europe, this column shows that the Protestant Reformation led to a sudden and sharp rise in vernacular printing, such that by the end of the 16th century, the majority of works were printed in spoken tongues rather than in Latin. This transformation allowed broader segments of society to access knowledge. It also diversified the composition of authors and book content and had long-term consequences for economic development.

Integration into global value chains can reduce child labour
Cristian Ugarte and Marcelo Olarreaga (VoxEU) Dec 24, 2020
By 2025 the UN aims to have eliminated child labour, a practice that affects roughly 10% of the world's children and severely impedes sustainable development. But reaching that target will require a clear understanding of how global value chains interact with child labour. This column analyses 26 developing countries from 2007–2015 and concludes that countries participating in global value chains experienced reductions in child labour except in cases when an increase in exports was accompanied by additional imported content from third countries.

EU accomplishes its mission of Brexit damage limitation
Ben Hall (FT) Dec 25, 2020
The bloc has maintained internal unity to a remarkable degree and achieved its main objectives.

Earnings, value and EMs: the market trends for 2021 in charts
Michael Mackenzie (FT) Dec 25, 2020
After a head spinning year, high prices suggest equities might struggle to make headway.

One Vaccine Side Effect: Global Economic Inequality
Peter S. Goodman (NYT) Dec 25, 2020
As Covid inoculations begin, the economic downturn stands to be reversed, but developing countries are at risk of being left behind.

China slowly retreating from Pakistan's Belt and Road
FM Shakil (AT) Dec 26, 2020
Beijing is backing away from its initial $60 billion commitment to the China-Pakistan Economic Corridor project.

Macron and Merkel Get the Least Bad Brexit Option
Lionel Laurent (Bloomberg View) Dec 26, 2020
The EU's treaty with the U.K. isn't a "win," but it avoids a messy divorce and gives the bloc leverage for the future.

A deal to end the Brexit delusions
Martin Wolf (FT) Dec 27, 2020
This remains a foolish and unnecessary divorce, yet the reality may bring some benefits.

The response to secular stagnation will drive the markets post-Covid
Gavyn Davies (FT) Dec 27, 2020
Much depends on how much Joe Biden boosts the fiscal stimulus as US president.

America Can't Compete With Chinese Tech By Walling Itself Off
Noah Smith (Bloomberg View) Dec 27, 2020
Trump-style export controls will backfire and leave U.S. companies isolated.

Vietnam prepares for supply chain shift from China
John Reed (FT) Dec 28, 2020
Multinationals look to build up bases despite infrastructure and labour issues.

Covid exposes capitalism's flaws
Mariana Mazzucato (FT) Dec 28, 2020
The pandemic is an opportunity for policymakers to fix the structure of the economic system.

Brexit deal leaves much unchanged, institutionally
David Allen Green (FT) Dec 28, 2020
The UK has swapped 'ever-closer union' for what may be an ever-closer agreement.

The Year Inequality Became Less Visible, and More Visible Than Ever
Emily Badger (NYT) Dec 28, 2020
Even as shared public spaces emptied out, the gap between the economically privileged and the precarious became impossible to ignore.

How Tariffs Deepened the D.C. Swamp
WSJ Dec 28, 2020
Maybe the GOP will stand up on trade once Joe Biden is picking winners.

Strong baht makes Thais rethink export reliance
Peter Janssen (AT) Dec 28, 2020
Thailand's rice exports this year will reach an estimated 5.8 million tons, earning the country some US$3.4 billion, the lowest level in 20 years, industry sources say.

The Fed Won't Save Us from the Growing Jobs Recession
Robert P. Murphy (Mises Wire) Dec 28, 2020
No matter how bleak the economy may be, the Keynesians are likely to say, "It would have been worse without us."

Britain's Brexit Ordeal Has Barely Even Started
Bloomberg View Dec 28, 2020
Exhausted by the negotiations that concluded last week? There'll be plenty more.

Only One Number Mattered to Global Markets in 2020
Robert Burgess (Bloomberg View) Dec 28, 2020
The remarkable rally in risk assets this year comes down to one thing. Ask global central bankers what it is.

Was 2020 Really So Bad for Oil?
Liam Denning (Bloomberg View) Dec 28, 2020
Cheap money helped the industry avoid disaster, but will have painful, lingering side effects.

The Seven Secrets of 2020
Yanis Varoufakis (Project Syndicate) Dec 28, 2020
This year has resembled a rapidly receding tide, forcing us to confront submerged truths. One lesson we learned in 2020 is that national governments had been choosing not to exercise their enormous powers so that those whom globalization had enriched could exercise their own.

The case for liberal trade remains as robust as ever
FT View Dec 29, 2020
The task is to support adjustment and strengthen multilateralism.

A theory of (almost) everything for financial markets
Robin Wigglesworth (FT) Dec 29, 2020
Some critics of passive investing now admit it is more resilient than they thought.

Covid has no grand lesson for the world
Janan Ganesh (FT) Dec 30, 2020
Data on the pandemic does not vindicate one political or economic system over others.

The Policy Lessons of the 'Trump Economy'
Jason Furman (WSJ) Dec 29, 2020
Presidents are often at the mercy of unpredictable factors like the business cycle—and pandemics.

The Oil Industry Is Stuck in Virus Alley
Daniel Yergin (WSJ) Dec 29, 2020
Prices won't break out of the $40 to $50 range until consumption gets back to normal sometime next year.

The cost of victory – Chinese interest rates
Francesco Sisci (AT) Dec 29, 2020
There is the question of whether Beijing fully grasps the relationship between politics and the economy.

Japanese manufacturers beat a path out of China
Frank Chen (AT) Dec 29, 2020
Trend gathered pace after Tokyo initiatives to entice overseas firms home or to diversify into Southeast Asia.

How to Get U.S. Companies to Leave China
Michael Schuman (Bloomberg View) Dec 29, 2020
Rather than threatening American manufacturers, the Biden administration needs to offer them someplace better to go.

Taxing the Wealthy Is Always Popular
Stuart Trow (Bloomberg View) Dec 29, 2020
But it's impractical. Here's what a U.K. wealth tax would actually mean for taxpayers.

The Three Big Mistakes China Made in 2020
Shuli Ren (Bloomberg View) Dec 29, 2020
For the many things Beijing did right this year, it still got a few important things wrong.

How Might COVID-19 Change the World?
Jared Diamond (Project Syndicate) Dec 29, 2020
If the world's peoples join together, under compulsion, to defeat COVID-19, they may learn a lesson. They may become motivated to join together to combat more dangerous global threats like climate change, resource depletion, and inequality.

The Missing Link in Economic Development
Ricardo Hausmann (Project Syndicate) Dec 29, 2020
Like the proverbial man with a hammer who sees every problem as a nail, economists study the world through the lens of incentives, and have developed a rich understanding of how market participants make decisions. But although incentives are important, developing countries must do more than institute the right ones.

The EU That Can't Say No
Jean Pisani-Ferry (Project Syndicate) Dec 29, 2020
If the European Union's new recovery fund is to achieve its aim, the soft money it promises should come with hard standards designed to prevent rule-of-law breaches and ineffective government spending by member states. Unfortunately, this looks unlikely to happen.

The Brutal Governance Lessons of 2020
Ngaire Woods (Project Syndicate) Dec 29, 2020
In addition to ushering in a massive economic and public-health crisis, COVID-19 has fully upended longstanding assumptions about effective governance. There are important lessons to be learned from the fact that some of the world's richest countries have fallen on their faces while some of the poorest have shined.

Building Bridges to Help the Economy Through Covid
Alan S. Blinder (WSJ) Dec 30, 2020
The Covid relief bill is a down payment on what Joe Biden can do to help avoid a recession.

Big Economic Stimulus Works. And That's a Problem
Daniel Moss (Bloomberg View) Dec 30, 2020
The pandemic invited an unprecedented level of coordination between independent central banks and governments this year.

The China-EU Investment Deal Is a Mistake
Andreas Kluth (Bloomberg View) Dec 30, 2020
For the sake of an agreement with Beijing, the EU has snubbed the incoming Biden administration and damaged the transatlantic cause.

5 Key Takeaways for Global Markets in 2020
Mohamed Aly El-Erian (Bloomberg View) Dec 30, 2020
Despite Covid-19 turmoil, investors received a great deal of what they could wish for, especially in terms of handsome returns with notably low volatility.

How the Fed Will Respond to the Coming Inflation Scare
Timothy A Duy (Bloomberg View) Dec 30, 2020
The central bank is likely to view what will surely be signs of price shocks as transitory.

Ten Charts That Tell the Weird Story of Oil and Energy in 2020
Nathaniel Bullard (Bloomberg View) Dec 30, 2020
The future is looking bright for renewables. Fossil fuels? Not so much.

African Countries Need Not Fear Default
Moritz Kraemer (Project Syndicate) Dec 30, 2020
Many developing countries carry crushing debt burdens, but are reluctant to pursue much-needed restructuring, for fear of losing access to capital markets. This fear is overblown, and its persistence is raising the risks for debtors and creditors alike.

Long Live the Bio-Revolution
Michael Chui and Matthias Evers (Project Syndicate) Dec 30, 2020
The COVID-19 pandemic has increased threats to food security around the world, underscoring the need for innovation to make agriculture and aquaculture more resilient and efficient. Fortunately, the biological innovations needed to do just that are quickly becoming competitive and scalable.

A Messy Financial Divorce for the US and China
George Magnus (Project Syndicate) Dec 30, 2020
Even as official financial decoupling progresses, US and other financial firms are – with China's blessing – building asset management, securities, life insurance, fintech, and custody businesses in the Chinese market. Should President-elect Joe Biden's administration support this process or double down on decoupling?

A Marshall Plan for the Planet
Paul Polman (Project Syndicate) Dec 30, 2020
The climate crisis has taken a back seat to COVID-19 this year, but prospects for bold international action to tackle global warming in 2021 are much more encouraging. There is no reason why the world cannot apply the ingenuity and agility it has shown during the pandemic to combat climate change while there is still time.

The COVID-19 Pandemic and Job Creation: The Role of Global Supply Chains
Hanming Fang, Chunmian Ge, Hanwei Huang, and Hongbin Li (VoxChina) Dec 30, 2020
Using big data of more than 100 million posted jobs from China, we estimate how the COVID-19 pandemic affected local labor demand in China via global supply chains. The data reveal that the number of newly posted jobs was about 31% lower in the first 14 weeks after the Wuhan lockdown than comparable periods in 2018 and 2019. We show that COVID-19 cases abroad and foreign governments' pandemic-control policies reduced new job creation in China by 11.7%. We also find that firms most exposed to international trade outperformed others at the beginning of the pandemic but underperformed during the recovery as the epicenter moved outside China.

Beijing's Hong Kong Fables Have Unhappy Endings
Jeffrey Wasserstrom and Shui-Yin Sharon Yam (FP) Dec 30, 2020
Old narratives about the city fell apart this year, but new ones can still be born.

Jobs, Houses and Cows: China's Costly Drive to Erase Extreme Poverty
Keith Bradsher (NYT) Dec 31, 2020
China has spent heavily to help its poorest citizens, an approach that few developing countries can afford and even Beijing may struggle to sustain.

Brexit's Silver Lining for Europe
Roger Cohen (NYT) Dec 31, 2020
Both sides lost in Britain's departure, but the European Union has been galvanized. And the Biden administration will encounter European allies bent on their own "strategic autonomy."

Europe hurried to sign China pact to preempt Biden
David P. Goldman (AT) Dec 31, 2020
Representatives of the incoming Biden Administration tried and failed to stop the European Union from signing an investment treaty with China this week.

EU-China deal may give Biden's team more options
David Hutt (AT) Dec 31, 2020
The European Union's decision this week to hurriedly conclude terms of an investment pact with China has certainly complicated what was set to be a new, more acrimonious age of US-EU relations next year.

Boris Johnson Has No One Else to Blame Now
Therese Raphael (Bloomberg View) Dec 31, 2020
Former Labour voters in England's north and Midlands will ultimately provide the thumbs up or down on the prime minister's big Brexit project.

There's One Huge Problem the Fed Can't Solve
Mark Gongloff (Bloomberg View) Dec 31, 2020
Inequality is the central bank's weak spot — and the economy's.

Europe and China's Year-End Breakthrough
Jeffrey D. Sachs (Project Syndicate) Dec 31, 2020
With the completion of a major investment treaty between the European Union and China, the new year will begin on a promising footing. Now is the time for the world's leading powers to stop casting stones from glass houses, and start coming together to end the pandemic and set the stage for a green, digital global recovery.

How Biden Can Restore Multilateralism Unilaterally
Joseph E. Stiglitz (Project Syndicate) Dec 31, 2020
After four years of the Trump administration undermining global governance arrangements, President-elect Joe Biden will certainly have his work cut out for him. Nonetheless, there are several actions the new administration can take immediately to reaffirm America's commitment to multilateral institutions and the rule of law.