News & Commentary:

Articles/Commentary

Reform and austerity beckon for Saudis
Roula Khalaf (FT) Jan 1, 2016
A lavish welfare state that breeds indolence and apathy must one day come to an end.

Global Trade After the Failure of the Doha Round
NYT Jan 1, 2016
With the Doha talks dead, world leaders need to start thinking differently about the global trading system.

Global inflation: Low and behold
Economist Jan 2, 2016
Another year of low prices will create strains in the world economy.

Latin America: Brazil’s fall
Economist Jan 2, 2016
Disaster looms for Latin America’s biggest economy.

Brazil’s crisis: Irredeemable?
Economist Jan 2, 2016
A former star of the emerging world faces a lost decade

Exit, pursued by bear
Economist Jan 2, 2016
The Fed has at last raised rates. What happens next?

Evaluating the Trans-Pacific Partnership
Kazuhito Yamashita (VoxEU) Jan 2, 2016
The Trans-Pacific Partnership is being held up as a model for 21st century trade agreements. This column looks into its implications for Japan. It says that agricultural sectors such as rice and beef won’t be affected as some form of protection will remain. It concludes that while the TPP may help Japan gain access to foreign markets, Japanese agriculture has lost another opportunity for revitalisation. The Trans-Pacific Partnership is being held up as a model for 21st century trade agreements. This column looks into its implications for Japan. It says that agricultural sectors such as rice and beef won’t be affected as some form of protection will remain. It concludes that while the TPP may help Japan gain access to foreign markets, Japanese agriculture has lost another opportunity for revitalisation.

Sovereign contingent debt: A proposal
Andrea Consiglio and Stavros A. Zenios (VoxEU) Jan 2, 2016
Contingent debt has been gaining ground as a tool for banking stability. This column argues for the advantages of sovereign debt with a contingent payment standstill. Sovereign contingent debt would have instigated early responses for Eurozone crisis countries ranging from a couple of months (Ireland) to almost two years (Cyprus). Pricing simulations illustrate how this financial innovation creates appropriate incentives for sovereigns and addresses creditor moral hazard. Using contingent debt for Greece we illustrate that the country’s debt profile can improve significantly. Contingent debt has been gaining ground as a tool for banking stability. This column argues for the advantages of sovereign debt with a contingent payment standstill. Sovereign contingent debt would have instigated early responses for Eurozone crisis countries ranging from a couple of months (Ireland) to almost two years (Cyprus). Pricing simulations illustrate how this financial innovation creates appropriate incentives for sovereigns and addresses creditor moral hazard. Using contingent debt for Greece we illustrate that the country’s debt profile can improve significantly.

Europe’s multiplicity of crises
Wolfgang Munchau (FT) Jan 3, 2016
The EU has an innate tendency towards foul compromises and fair-weather constructions.

The robot attack on income tax
Neasa MacErlean (FT) Jan 3, 2016
Today’s major economies should follow approach of slave-owning ancient Romans.

‘The Turn of the Tortoise’, by TN Ninan
Victor Mallet (FT) Jan 3, 2016
India stumbles yet is still in the global race.

Oil’s prologue signals more drama ahead
Ed Crooks (FT) Jan 3, 2016
With the price of crude falling further, the financial pressure on oil producers in the US is growing.

Equities: And then there were nine
John Authers (FT) Jan 3, 2016
Apart from a few stocks, the US markets are in a slump with fears post-crisis rally has run its course.

Economists Take Aim at Wealth Inequality
Nelson D. Schwartz (NYT) Jan 3, 2016
At the American Economic Association's annual meeting, what was once mainly an issue among players on the margins of the profession is taking center stage.

As the Fed Moves, It Needs a Road Map
Glenn Hubbard (WSJ) Jan 3, 2016
A clear strategy should include how monetary policy ideally would fit with fiscal policy.

The 20 Percent World
John Micklethwait (Bloomberg View) Jan 3, 2016
The odds of the unthinkable are going up.

The Great Malaise Continues
Joseph E. Stiglitz (Project Syndicate) Jan 3, 2016
Optimists say that the global economy will perform better in 2016 than it did in 2015. That may turn out to be true, but only imperceptibly so, unless the problem of insufficient global aggregate demand is finally addressed.

Bank regulation and government bond demand
Clemens Bonner (VoxEU) Jan 3, 2016
Economists continue to debate whether preferential treatment in financial regulation increases banks’ demand for government bonds. This column looks at bank purchases of government bonds and other types of bonds when constrained by a capital or liquidity requirement. Financial regulation seems to be a main driver of banks’ demand. If regulators wish to break the vicious circle from weak banks to weak governments, revising financial regulation seems to be a good starting point. Economists continue to debate whether preferential treatment in financial regulation increases banks’ demand for government bonds. This column looks at bank purchases of government bonds and other types of bonds when constrained by a capital or liquidity requirement. Financial regulation seems to be a main driver of banks’ demand. If regulators wish to break the vicious circle from weak banks to weak governments, revising financial regulation seems to be a good starting point.

International coordination and precautionary policies
Joshua Aizenman (VoxEU) Jan 3, 2016
The Global Crisis renewed debate on the benefits and limitations of coordinating international macro policies. This column highlights the rare conditions that lead to international cooperation, along with the potential benefits for the global economy. In normal times, deeper macro cooperation among countries is associated with welfare gains of a second-order magnitude, making the odds of cooperation low. When bad tail events induce imminent and correlated threats of destabilised financial markets, the perceived losses have a first-order magnitude. The apprehension of these losses in times of peril may elicit rare and beneficial macro cooperation. The Global Crisis renewed debate on the benefits and limitations of coordinating international macro policies. This column highlights the rare conditions that lead to international cooperation, along with the potential benefits for the global economy. In normal times, deeper macro cooperation among countries is associated with welfare gains of a second-order magnitude, making the odds of cooperation low. When bad tail events induce imminent and correlated threats of destabilised financial markets, the perceived losses have a first-order magnitude. The apprehension of these losses in times of peril may elicit rare and beneficial macro cooperation.

Deflate stocks and allow China to prosper
Joe Zhang (FT) Jan 4, 2016
Beijing is turning away from tinkering with equities.

The political shocks that will define 2016
Gideon Rachman (FT) Jan 4, 2016
Look to China and Britain for sudden surprises.

Bondholders on the hook
Jim Brunsden and Patrick Jenkins (FT) Jan 4, 2016
Taxpayer bailouts in Europe should be a thing of the past but will the EU follow its own new rules?

Commodity exposure in 2016 requires care
Mohamed El-Erian (FT) Jan 4, 2016
Patient capital deployed over time into distressed opportunities is ideal strategy.

How Congress Finally Passed IMF Governance Overhauls, Five Years After the Deal Was Signed
Ian Talley (WSJ) Jan 4, 2016
Five years after world leaders signed a deal to overhaul the International Monetary Fund’s antiquated governance, the U.S. Congress this month ratified the 2010 deal.

Immigrants might be holding your salary down — and making you better off anyway
Jim Tankersley (WP) Jan 4, 2016
What researchers found when they examined the impact of immigrants on the economy Read full article »

Saudi Arabia has a giant mess on its hands
Matt O'Brien (WP) Jan 4, 2016
With oil prices down so much, it needs to take new action to spur growth. Read full article »

The Global Economy in 2016
IMF Survey Jan 4, 2016
A review of the major economic developments of the past year and look ahead to 2016.

Bleak Outlook for Europe's Migration Crisis in 2016
Jacob Funk Kirkegaard (PIIE) Jan 4, 2016
Immigration replaced Greece as the topic for special meetings of the EU Council in September and November (twice, including with Turkey). The issue was also confronted by regular EU Council meetings in October and December.

The Economic Outlook for Southeast Asia 2016
Philip Bowring (Asia Sentinel) Jan 4, 2016
Steady as she goes, dull but not disastrous.

How to Limit Chinese Markets' Contagion
Bloomberg View Jan 4, 2016
Better data and less leverage would help.

The Europe Question in 2016
Nouriel Roubini (Project Syndicate) Jan 4, 2016
At the cusp of the new year, we face a world in which geopolitical and geo-economic risks – in the Middle East, Africa, and Asia – are multiplying. Yet it is Europe that may turn out to be the ground zero of geopolitics in the coming 12 months.

The World Economy’s Labor Pains
Kaushik Basu (Project Syndicate) Jan 4, 2016
The ongoing global economic slowdown, which began in 2008 with the financial crisis in the United States, could set a new endurance record. What is certain is that with growth stalling in Japan and slowing in China, and with Russia in deep crisis and the eurozone still barely recovering, the world economy is not yet out of the woods.

Exit Latin America’s Left
Shlomo Ben-Ami (Project Syndicate) Jan 4, 2016
The crushing defeat of the long-ruling Chavista government in Venezuela’s recent parliamentary election, together with the end of 12 years of Peronist rule in Argentina, is not a political watershed. Rather, the defeat of leftist governments throughout the region heralds a welcome transition toward political pragmatism.

The Closed Marketplace of Economic Ideas
Federico Fubini (Project Syndicate) Jan 4, 2016
The global economy has undergone massive, unexpected shifts during the past decade, with the US and Europe wracked by crisis and statist China poised to have the world's largest GDP. Given this, one might be more surprised by what didn’t change: the way economists think about themselves and their discipline.

Another Slow Year for the Global Economy
Ashoka Mody (Project Syndicate) Jan 4, 2016
Despite having whittled down its global growth projections repeatedly over the last year, the IMF continues to insist – as it has, with almost banal predictability, for the last seven years – that next year will be better. But it is almost certainly wrong yet again.

Inequality of Wealth Makes Us Short and Dead
Peter Turchin (Evonomics) Jan 4, 2016
The biological effects of wealth disparity.

Saudi Arabia and Iran Are at Each Other’s Throats. Why Are Oil Prices Falling?
Keith Johnson (FP) Jan 4, 2016
So much crude is sloshing around the globe that even the prospect of growing Mideast unrest isn’t enough to spook oil traders.

Democracy's Retreats and Tentative Advances in 2015
Carl Gershman (WA) Jan 4, 2016
2015 saw important, yet fragile, democratic gains around the world. But, as the West is now preoccupied with domestic challenges, the future of democratic reform will be determined by those on the frontlines.

Geographical differences in working hours
Takanori Ago, Tadashi Morita, Takatoshi Tabuchi and Kazuhiro Yamamoto (VoxEU) Jan 4, 2016
There are common geographical differences in working hours between countries and regions. Working hours are longer in developing countries, as well as in more urbanised regions compared to rural ones. This column explains these differences with two key factors: production technology and urban agglomeration. Technological progress leads to a decrease in working hours, whereas urban agglomeration leads to an increase. There are common geographical differences in working hours between countries and regions. Working hours are longer in developing countries, as well as in more urbanised regions compared to rural ones. This column explains these differences with two key factors: production technology and urban agglomeration. Technological progress leads to a decrease in working hours, whereas urban agglomeration leads to an increase.

Top Risks 2016
Ian Bremmer & Cliff Kupchan (Eurasia Group) Jan 4, 2016
There will be a dramatically more fragmented world in 2016 with more intra-, inter-, and extra-state conflict than at any point since World War II. And yet drawing the major powers into military battle against one another is virtually unthinkable. But in 2016, conflict intensifies. Last year, investors recognized growing uncertainty but remained more focused on the economic improvements: a US economy in recovery and Europe coming out of recession. That’s unlikely to last, as geopolitical risk shakes the global order.

Why global economic disaster is unlikely
Martin Wolf (FT) Jan 5, 2016
What matters is not whether the world will be well managed but whether calamity will be avoided.

Time to Talk Robots
Emma Roller (NYT) Jan 5, 2016
Politicians love to mourn the demise of manufacturing, but their statements oversimplify the problems and ignore the real source of trouble.

Eurozone upside may surprise investors
John Plender (FT) Jan 5, 2016
Ultra-loose monetary policy and less stringent fiscal policy is a powerful combination.

Nigeria Goes to the Mall
Norimitsu Onishi (NYT) Jan 5, 2016
With its surging middle class, Africa’s most populous nation is embracing the places, and culture, that are sagging in America.

Don’t Blame Oil for Global Chaos
Holman Jenkins (WSJ) Jan 5, 2016
Cheap energy is a symptom, not a cause, of the world’s geopolitical mess.

Five economic fears behind the Chinese stock slide that shook world markets
Jim Puzzanghera (LAT) Jan 5, 2016
For the second time in less than six months, concerns about China’s rocky transition from an export-fueled industrial nation to a more mature developed economy have rattled global financial markets.

Portugal's Bank Bail-In Sets a Dangerous Precedent
Mark Gilbert (Bloomberg View) Jan 5, 2016
Playing fast and loose with bank capital structures is a dangerous game.

Five Facts About the Market Selloff
Mohamed A. El-Erian (Bloomberg View) Jan 5, 2016
The age of financial volatility repressed by central banks is ending.

China’s Two-Child Consumption Engine
Keyu Jin (Project Syndicate) Jan 5, 2016
The impact of China's new two-child policy is likely to be just as far-reaching as that of its one-child policy – and, overall, much more positive. One key reason is that an increase in the number of children per household will force a reduction in the aggregate savings rate, thereby fulfilling a long-standing macroeconomic goal.

The Transitions of 2016
Christine Lagarde (Project Syndicate) Jan 5, 2016
Global growth in 2016 will be disappointing and uneven, and medium-term prospects have weakened as well, because low productivity, aging populations, and the legacies of the global financial crisis are holding back potential growth. And looming over this outlook is the need to manage spillovers from two major economic transitions.

Can the UK Survive Brexit?
Harold James (Project Syndicate) Jan 5, 2016
The upcoming referendum on the United Kingdom’s membership in the EU, almost certain to be held this year, could turn out to be yet another major catastrophe to hit Europe. If, as seems increasingly plausible, British voters chose to leave, the result would be a profoundly destabilized EU – and a shattered UK.

Can Systemic Financial Risk Be Contained?
Joseph P. Joyce (RGE Economonitor) Jan 5, 2016
Risk aversion is a basic human characteristic, and in response to it we seek to safeguard the world live in. Is the financial sector different?

Huge currency zones don’t work – we need one per city
Mark Griffith (Aeon) Jan 5, 2016
How many currencies does the world need?

The World Wary as US Federal Reserve Declares End to Debt Crisis
Chris Miller (YaleGlobal) Jan 5, 2016
Federal Reserve lifted interest rates for first time since 2007, aiming for normalization; emerging markets may struggle

Public investment efficiency and growth
Andrew Berg, Andrea F Presbitero and Luis-Felipe Zanna (VoxEU) Jan 5, 2016
Recent policy recommendations suggest that the output growth ‘bang’ for each additional ‘buck’ of public investment depends on the efficiency of public investment spending. This column argues that high-efficiency and low-efficiency countries may have similar growth impacts from additional public investment spending. This is because efficiency and scarcity of public capital are likely to be inversely related across countries. Efficiency and the rate of return need to be considered together in assessing the impact of increases in investment.considered together in assessing the impact of increases in investment.

Bilateral tech gaps: The US vs China and India
Keting Shen, Jing Wang and John Whalley (VoxEU) Jan 5, 2016
Many argue that China has had a higher total factor productivity growth rate than India and the US since the late 1970s. This column assesses changes in China’s technology gaps between both the US and India from 1979 to 2008 with a constant elasticity of substitution production framework. The calculations suggest that the technology gap between China and the US was significantly larger than that between India and the US for the period before 2008. Many argue that China has had a higher total factor productivity growth rate than India and the US since the late 1970s. This column assesses changes in China’s technology gaps between both the US and India from 1979 to 2008 with a constant elasticity of substitution production framework. The calculations suggest that the technology gap between China and the US was significantly larger than that between India and the US for the period before 2008.

Dollar to dictate market moves in 2016
John Bilton (FT) Jan 6, 2016
Interplay of US rates and currency critical in setting global tone.

US world order has failed to adjust
Fu Ying (FT) Jan 6, 2016
China needs to propose ideas on addressing global problems.

Israel: Start-up nation comes of age
John Reed (FT) Jan 6, 2016
Tech companies want to build the country’s first multinationals at home.

I.M.F. Breakthrough Is Seen to Bolster U.S. on World Stage
Jackie Calmes (NYT) Jan 6, 2016
Resolution of a five-year impasse over the International Monetary Fund and other moves in 2015 eased concerns about America's global economic role.

Aid Isn’t Reaching the Very Poorest Countries
Owen Barder and Matt Juden (CGD) Jan 6, 2016
The good news is that international aid reached a record high, in real terms, in 2014. The bad news is that aid to the very poorest countries fell sharply in 2014, reversing the welcome trend over the last decade of allocating more aid to the poorest countries. This is a problem because low-income countries need aid the most.

Cameron’s Annus Horribilis
Denis MacShane (Globalist) Jan 6, 2016
The choices of Britain’s Prime Minister will weigh heavily on the future of Europe.

How Rich Are We?
Mark Esposito (RGE Economonitor) Jan 7, 2016
Terms like ‘emerging’ or ‘developing’ economies, and measuring growth using GDP are completely outdated.

Despite Stalled Reforms, India Is an ‘Oasis of Opportunity’ in 2016
K@W Jan 6, 2016
Does an "oasis of opportunity" await?

Why People and Companies Die While Cities Keep Growing
Irving Wladawsky-Berger (Pieria) Jan 6, 2016
The typical company lasts about ten years before it’s bought out, merges, or gets liquidated.

Modi's Year of Possibility
Swaminathan S. Anklesaria Aiyar (Bloomberg View) Jan 6, 2016
Things could turn around for the Indian prime minister, but only if he's smart and bold.

The Global Monetary Non-System
Raghuram Rajan (Project Syndicate) Jan 6, 2016
As 2015 ends, the world boasts few areas of robust growth. At a time when both developed and emerging-market countries need rapid growth to maintain domestic stability, this is a dangerous situation.

The Danger of a Weak Europe
Joseph S. Nye (Project Syndicate) Jan 6, 2016
The key question in assessing Europe’s power resources is whether the EU will retain enough cohesion to speak with a single voice on a wide range of international issues, or remain a limited grouping defined by its members’ different national identities, political cultures, and foreign policies. The answer varies by issue.

Re-thinking education: Alternative policy lessons
Esperanza Vera-Toscano and Sjoerd Hardeman (VoxEU) Jan 6, 2016
Education is considered to be of key importance to economic growth, jobs, and development. This column argues that higher education is not a deterministic factor driving economic performance in itself. Rather it is the skills acquired through education that drive economic development. Policymakers should take into account a range of different indicators to make a proper judgement about where education is heading and how to improve it.

Sustaining Domestic Growth
John Page (Brookings) Jan 6, 2016
Recommendations on revitalizing the region’s stagnating industrial development and spurring structural transformation.

Managing Economic Shocks
Amadou Sy (Brookings) Jan 6, 2016
The adverse effects of recent external economic shocks on Africa’s already slowing economic growth.

Maintaining Governance Gains
Richard Joseph (Brookings) Jan 6, 2016
How leaders might address continuing obstacles to peace, prosperity, and good governance in 2016.

Expanding African Trade
Joshua Meltzer (Brookings) Jan 6, 2016
How will the shifting global trade environment impact Africa’s prospects for enhancing its own competitiveness and trade performance?

Rational markets expect crazy economies
Gillian Tett (FT) Jan 7, 2016
The financial crisis showed limits of models. Fiscal and monetary policy are even less predictable.

China worries test global asset prices
Mohamed El-Erian (FT) Jan 7, 2016
Financial system seeing the cumulative impact of longer-term distortions.

Working out negative yielding convertibles
Dan McCrum (FT) Jan 7, 2016
Niche securities occupy place somewhere between worlds of debt and equity.

South Africa: Self-inflicted wounds
Andrew England (FT) Jan 7, 2016
The global slowdown has hit the economy but critics blame political mis-steps by Zuma for wider malaise.

The China Panic
WSJ Jan 7, 2016
Policy disarray is leading to fears of a deeper economic slide.

The Recession Caused by Low Oil Prices
Donald L. Luskin (WSJ) Jan 7, 2016
Misery for oil incumbents from the fracking boom is spilling into the global economy. But there is cause for optimism. Don't Blame Oil for Global Chaos

Is this really 2008 all over again?
Economist Jan 7, 2016
George Soros sounds the alarm. But any crisis would surely look more like 1998 than 2008.

Venezuela's Bizarre System of Exchange Rates
Emiliana Disilvestro and David Howden (Mises Daily) Jan 7, 2016
Venezuela is currently going through its worst crisis in history, replete with an endless list of interesting problems.

The Great Economic Recasting: Can China Pull It Off?
K@W Jan 7, 2016
Can it bridge the economic gap?

How Central Banks Gained More Control Over the World's Major Currencies
Luke Kawa (Bloomberg) Jan 7, 2016
Globalized trade, more concentrated currency power.

Greece Deserves a Break on Pension Reform
Mark Gilbert (Bloomberg View) Jan 7, 2016
Athens has actually made pretty good progress already.

When China Stumbles
Jan 7, 2016
Beijing’s financial troubles shouldn’t add up to global devastation. But more than math is involved in economics.

Trying to Understand China’s Market Upheaval
Peter Thal Larsen (NYT) Jan 7, 2016
The falling renminbi may be a sign that China sees currency devaluation as a solution to its economic woes. Or maybe planners are losing their grip.

A Better Year for Migrants?
Peter Sutherland (Project Syndicate) Jan 7, 2016
The Mediterranean migration crisis has exposed the inadequacy of European and global systems for protecting migrants, which has enabled populist leaders to win support by stoking public fear. That is why vigorous action at the European and global levels – which was sorely lacking in 2015 – is essential this year.

Africa’s Growing War on Corruption
Michael Meyer (Project Syndicate) Jan 7, 2016
Corruption has been nearly universal in Africa, blighting almost every country. But there are encouraging glimmers of change, which will grow and spread more quickly if leaders take on the deeply entrenched culture of impunity that afflicts major countries like Kenya.

Greece’s Two Currencies
Yanis Varoufakis (Project Syndicate) Jan 7, 2016
Greece today offers a case study of how capital controls bifurcate a currency and distort business incentives. And the reality of Greece’s dual-currency regime is the most vivid demonstration yet of the fragmentation of Europe’s monetary “union.”

The Next Front in the Saudi-Iran War
Iyad el-Baghdadi (FP) Jan 7, 2016
The two regional powers are at each other's throats. But Riyadh's next move won't be in Syria or Yemen -- it'll aim to hit Tehran where it really hurts.

Resolving trade policy uncertainty to promote trade and innovation
Hongyong Zhang (VoxEU) Jan 7, 2016
Negotiations on the Trans-Pacific Partnership were far from smooth sailing, leaving the outlook of Japan’s trade policy uncertain for some time. This column examines the effect of the TPP agreement and the resulting resolution of trade policy uncertainty on the promotion of trade and innovation activities.

Emerging markets at a crossroads
M Ayhan Kose, Franziska Ohnsorge and Lei (Sandy) Ye (VoxEU) Jan 7, 2016
Emerging markets face their fifth consecutive year of slowing growth. This column examines the nature of the slowdown and appropriate policy responses. Repeated downgrades in long-term growth expectations suggest that the slowdown might not be simply a pause, but the beginning of an era of weak growth for emerging markets. The countries concerned urgently need to put in place policies to address their cyclical and structural challenges and promote growth. Emerging markets face their fifth consecutive year of slowing growth. This column examines the nature of the slowdown and appropriate policy responses. Repeated downgrades in long-term growth expectations suggest that the slowdown might not be simply a pause, but the beginning of an era of weak growth for emerging markets. The countries concerned urgently need to put in place policies to address their cyclical and structural challenges and promote growth.

Currency Devaluations by Asian Tigers Could Hinder Global Growth
Landon Thomas Jr (NYT) Jan 8, 2016
A number of foreign exchange specialists are worried that potential devaluations in South Korea, Singapore and Taiwan could hurt the global economy.

China’s Obsolete Economic Strategy
NYT Jan 8, 2016
The country’s leaders have turned what should have been a benign, natural slowdown into a chaotic descent.

The Myths of China’s Currency ‘Manipulation’
Matthew J. Slaughter (WSJ) Jan 8, 2016
Movements in the yuan’s nominal exchange rate do not affect long-term trade flows or jobs in the U.S.

Why Good U.S. Jobs Are Too Few and Wages So Poor
By Peter Morici (Globalist) Jan 8, 2016
The lack of workers adequately trained for a technologically demanding workplace is slowing growth.

China Heightens the Contradictions
Michael Schuman (Bloomberg View) Jan 8, 2016
The tension between state control and market forces will only get worse.

Taming India’s Elite
Sanjeev Sanyal (Project Syndicate) Jan 8, 2016
It is still too early to gauge the impact of Indian Prime Minister Narendra Modi's economic and foreign policies. But there is one area where his government is making palpable progress: taming the entrenched family dynasties that control the top echelons in every sphere of public life.

The New Geo-Economics
Joseph E. Stiglitz (Project Syndicate) Jan 8, 2016
Last year was a memorable one for the world economy. Not only was it one of the most disappointing in a long time; more important, it brought profound changes – both for better and for worse – in global economic governance.

European Solidarity In a World of Crises
Jean-Claude Juncker (Project Syndicate) Jan 8, 2016
At the end of 2015, the EU could look back on a year when European solidarity withstood what may have been the greatest trials it has faced since the end of World War II. European solidarity will prevail in 2016 as well, so long as member states' leaders follow through on meeting their commitments.

The Threat That Will Save Europe
Daniel Gros (Project Syndicate) Jan 8, 2016
For the EU, 2015 was another year of fundamental challenges, with two key elements of European integration – the euro and border-free travel within the Schengen Area – being placed under serious strain. But one key development has boosted Europe's prospects: the threat of expulsion gained credibility.

Argentine debt restructuring and bargaining theory
Marcus Miller and Sayantan Ghosal (VoxEU) Jan 8, 2016
Shylock's insistence in 'The Merchant of Venice' that his “pound of flesh” be paid as per the contract, regardless of the extreme and grotesque cost to the debtor, is an apt parallel with vulture funds holding out on Argentinian debt pay-outs. This column assesses the Argentinian debt situation and develops an accord that would create a compromise between the extremes on both sides. Shylock's insistence in 'The Merchant of Venice' that his “pound of flesh” be paid as per the contract, regardless of the extreme and grotesque cost to the debtor, is an apt parallel with vulture funds holding out on Argentinian debt pay-outs. This column assesses the Argentinian debt situation and develops an accord that would create a compromise between the extremes on both sides.

China’s Hunger for Commodities Wanes, and Pain Spreads Among Producers
Clifford Krauss (NYT) Jan 9, 2016
For years, China gobbled up metals, crops and fuels for its rapidly expanding economy, and producers aggressively broadened operations to satisfy China’s appetite. Now, all has changed.

Bank pass-through of credit expansions and household borrowing
Sumit Agarwal, Souphala Chomsisengphet, Neale Mahoney and Johannes Stroebel (VoxEU) Jan 9, 2016
During the Great Recession, governments famously (and in some cases, infamously) provided banks with lower-cost capital and liquidity so that they would lend, expanding economic activity. This column assesses the efficacy of these policies, estimating marginal propensities to consume and borrow between 2008-2012. During the Great Recession, governments famously (and in some cases, infamously) provided banks with lower-cost capital and liquidity so that they would lend, expanding economic activity. This column assesses the efficacy of these policies, estimating marginal propensities to consume and borrow between 2008-2012.

Revisiting international currency competition
Cathy Zhang (VoxEU) Jan 9, 2016
The US dollar has played a central role in the international monetary system, but it currently faces stiff competition from other currencies. This column argues that the benefits of international liquidity provision might be higher than previously thought when one accounts for general equilibrium effects. Quantitatively, the welfare cost of losing international status is not inconsequential for the issuing country. For the US, it amounts to between 0.4% and 1.1% of consumption each year. The US dollar has played a central role in the international monetary system, but it currently faces stiff competition from other currencies. This column argues that the benefits of international liquidity provision might be higher than previously thought when one accounts for general equilibrium effects. Quantitatively, the welfare cost of losing international status is not inconsequential for the issuing country. For the US, it amounts to between 0.4% and 1.1% of consumption each year.

Household debt and crises of confidence
Thomas Hintermaier and Winfried Koeniger (VoxEU) Jan 9, 2016
Crises of confidence turn booms into busts. Bloated household balance sheets and high debt offer the right ingredients for a confidence-driven housing bust. This column develops an analytic framework that accommodates the potential role of confidence fluctuations as a source of uncertainty in the economy. Current debt levels are shown to determine the exposure to crises of confidence. The results point to a clear role for macroprudential policy in the prevention of such crises. Crises of confidence turn booms into busts. Bloated household balance sheets and high debt offer the right ingredients for a confidence-driven housing bust. This column develops an analytic framework that accommodates the potential role of confidence fluctuations as a source of uncertainty in the economy. Current debt levels are shown to determine the exposure to crises of confidence. The results point to a clear role for macroprudential policy in the prevention of such crises.

The downside of free capital flows
Wolfgang Munchau (FT) Jan 10, 2016
New controls are not yet the subject of polite conversation among policymakers.

Nevsky’s prospects: China, fat tails and opaque markets
Economist Jan 10, 2016
A hedge fund manager says goodbye with a shrewd analysis.

Is the next recession on its way?
Robert J. Samuelson (WP) Jan 10, 2016
The stock market’s swoon might foretell trouble.

Why the Fed needs to prepare for the worst right now
Lawrence Summers (WP) Jan 10, 2016
It’s concerning when news — such as positive U.S. unemployment numbers — fails to rally markets.

China Isn't Headed for a Financial Crisis
Christopher Balding (Bloomberg View) Jan 10, 2016
The regime's policies may not be wise, but they'll probably forestall a catastrophe.

Public debt crises: US vs EU private-borrower impact
Cristina Arellano, Andy Atkeson and Mark L. J. Wright (VoxEU) Jan 10, 2016
In the recent crisis in Southern Europe both sovereign governments and private citizens faced increased borrowing costs on their external debt. By contrast, no spillover to private borrowers occurred from the recent US state government debt crisis. This column argues that this different experience stems from much weaker European protections from government interference – the risk that governments will encumber private debt contracts by redenominating the currency of the contract, imposing capital controls, or passing debtor relief legislation. In the recent crisis in Southern Europe both sovereign governments and private citizens faced increased borrowing costs on their external debt. By contrast, no spillover to private borrowers occurred from the recent US state government debt crisis. This column argues that this different experience stems from much weaker European protections from government interference – the risk that governments will encumber private debt contracts by redenominating the currency of the contract, imposing capital controls, or passing debtor relief legislation.

The TPP as a set of international economic rules
Tsuyoshi Kawase (VoxEU) Jan 10, 2016
An agreement on the Trans-Pacific Partnership has finally been reached, but the full text of the agreement has not been released yet. This column looks at the new set of rules comprising the TPP and whether it deserves to be called a ‘21st century free trade agreement’. It argues that the success or failure of the 12-country pact rests ultimately on the dispute settlement procedures. An agreement on the Trans-Pacific Partnership has finally been reached, but the full text of the agreement has not been released yet. This column looks at the new set of rules comprising the TPP and whether it deserves to be called a ‘21st century free trade agreement’. It argues that the success or failure of the 12-country pact rests ultimately on the dispute settlement procedures.

China banks feel the heat of meltdown
Patrick Jenkins (FT) Jan 11, 2016
Lenders could require up to $7.7tn of new capital and funding over the next three years.

Mass migration into Europe is unstoppable
Gideon Rachman (FT) Jan 11, 2016
Population pressures in Africa and the Middle East will drive immigration far into the future.

Cologne attacks stretch German tolerance
Mariam Lau (FT) Jan 11, 2016
If newcomers want to live here, they must accept certain values or else move on

China’s credit binge is the real concern
eorge Magnus (FT) Jan 11, 2016
Massive accumulation of debt has received passive attention at most.

China markets: Looking for clues
Tom Mitchell and Gabriel Wildau (FT) Jan 11, 2016
Investors crave transparency amid doubts over financial management.

Oil Prices Slide Again, and the Bottom Is Not Yet in Sight
Jad Mouawad (NYT) Jan 11, 2016
Oil futures have dropped every day of the year so far because of slumping demand, and analysts say the trend is likely to continue.

How China could trigger a global crisis
Matt O'Brien (WP) Jan 11, 2016
Is China's latest stock market selloff — the Shanghai index lost 15 percent of its value in the past six days — and currency devaluation just a blip or the beginning of a bust?

China’s Latest “Devaluation:” A Currency War in the Making?
Ed Dolan (RGE EconoMonitor) Jan 11, 2016
China’s currency has, once again, been weakening against the dollar.

Venezuela's Opposition Faces Its Biggest Test
Bloomberg View Jan 11, 2016
Fixing the world's worst-performing economy will require patience and consensus.

Poland Needs an Independent Central Bank
Bloomberg View Jan 11, 2016
It's a mistake to use monetary policy to finance social programs.

The Chinese Economy’s Great Wall
Mohamed A. El-Erian (Project Syndicate) Jan 11, 2016
The renminbi's recent decline, which has thrown Chinese stock markets into turmoil and drove the government to suspend trading twice last week, highlights a major challenge facing the country: how to balance its domestic and international economic obligations. The authorities' answer will have a major impact on the global economy.

Rethinking Sanctions
Kofi A. Annan and Kishore Mahbubani (Project Syndicate) Jan 11, 2016
The time has come for the great powers to reassess the value of economic sanctions as a diplomatic cudgel. Imposing sanctions may feel good; but the evidence indicates that, to achieve success and avoid unintended consequences, carefully calibrated sanctions must be pursued in tandem with political engagement.

Extreme Weather and Global Growth
Kenneth Rogoff (Project Syndicate) Jan 11, 2016
Until recently, the usual thinking among macroeconomists has been that short-term weather fluctuations don’t matter much for economic activity. But recent economic research, bolstered by an exceptionally strong El Niño, has prompted reconsideration of this view.

Shaping the Fourth Industrial Revolution
Klaus Schwab (Project Syndicate) Jan 11, 2016
The Fourth Industrial Revolution that is underway can compromise humanity’s traditional sources of meaning – work, community, family, and identity – or it can lift humanity into a new collective and moral consciousness based on a sense of shared destiny. Which outcome emerges is up to us.

The Next Great Famine
Amy Davidson (New Yorker) Jan 11, 2016
Lessons from the severe storms that ravaged Europe seven hundred years ago—and the chaos that followed.

Monetary dimensions of comparative advantage
Paul Bergin and Giancarlo Corsetti (VoxEU) Jan 11, 2016
Competitive devaluation is a long-standing idea in international macroeconomic theory. This column takes a step back from the current debate and assesses a different perspective on monetary and exchange rate policies. Strategic behaviour is shown to be detrimental from a global welfare perspective. Due to negative spillovers elsewhere, devaluations invite retaliation – which in turn reduces manufacturing at the global level. Monetary policy can provide a non-negligible contribution to fostering comparative advantage in high-value branded manufacturing goods by pursuing efficient macroeconomic stabilisation. Competitive devaluation is a long-standing idea in international macroeconomic theory. This column takes a step back from the current debate and assesses a different perspective on monetary and exchange rate policies. Strategic behaviour is shown to be detrimental from a global welfare perspective. Due to negative spillovers elsewhere, devaluations invite retaliation – which in turn reduces manufacturing at the global level. Monetary policy can provide a non-negligible contribution to fostering comparative advantage in high-value branded manufacturing goods by pursuing efficient macroeconomic stabilisation.

What market turbulence tells us
Martin Wolf (FT) Jan 12, 2016
Another set of credit bubbles is popping — this will leave a legacy of financial shocks and bad debt.

Brexit is the easy bit
Jean-Claude Piris (FT) Jan 12, 2016
Voters should consider whether the cost in terms of prosperity and security is one they are prepared to pay.

It can take a short-seller to catch thief
John Kay (FT) Jan 12, 2016
History is littered with lossmaking companies kept alive for years by accounting chicanery.

Renminbi fall reflects China’s transition
Henny Sender (FT) Jan 12, 2016
Shift to more market-based forex regime seems particularly fraught.

Markets in for slower and bumpier climb
Richard Madigan (FT) Jan 13, 2016
It’s a transition point but long-term money should stay invested.

GE: Post-industrial revolution
Ed Crooks (FT) Jan 12, 2016
The shift to intelligent devices exposes group to stiff competition from tech companies.

The Global Slowdown Hits the U.S.
Ruchir Sharma (WSJ) Jan 12, 2016
America dodged the Asian financial crisis of 1997-98, but much has changed. Today’s world economic slide is starting to hurt us.

China’s Anti-Graft Drive Supports Resilient Growth
Dan Steinbock (RGE Economonitor) Jan 12, 2016
As China’s anti-corruption drive is expanding from the public and corporate sector to financial institutions, some argue that it is hurting economic growth. In reality, it is the rule of law that can ensure China’s resilient growth.

Keep Calm and Invest in Infrastructure
Bloomberg View Jan 12, 2016
Belt-tightening can only go so far. The U.K. economy still needs rebalancing.

The Alice-in-Wonderland Consequences of QE
Mark Gilbert (Bloomberg View) Jan 12, 2016
Own some floating-rate notes? Read the documentation.

Exporting the Chinese Model
Francis Fukuyama (Project Syndicate) Jan 12, 2016
As 2016 begins, an historic contest is underway, largely hidden from public view, over competing Chinese and Western strategies to promote economic growth. The outcome of this struggle will determine the fate of much of Eurasia in the decades to come.

Humanizing an Inhuman Future
Kemal Dervis (Project Syndicate) Jan 12, 2016
The impact that groundbreaking technological advances like artificial intelligence will have on the functioning of our economies and labor markets has been widely discussed for a long time. But proposals for coping with it do not reflect the true scale of the challenge ahead.

Reforming or Deforming the Fed?
Barry Eichengreen (Project Syndicate) Jan 12, 2016
The silly season that is a US presidential election campaign has become particularly absurd as the candidates have offered their proposals for monetary-policy reform. Indeed, the radical nature of the current crop of schemes to change how the Fed operates is exceptional by historical standards.

How to Save the World Bank
Ngaire Woods (Project Syndicate) Jan 12, 2016
The World Bank is quietly sliding into insignificance, as its core fee-paying clients increasingly turn to other lenders. If it is to survive, its management will need to streamline its loan approval processes and leverage the unique assets that distinguish it from its competitors.

Have the BRICs Hit a Wall? The Next Emerging Markets
K@W Jan 12, 2016
Which countries are poised to become the next high-growth developing markets? Hint: The candidates will most likely be in Southeast Asia, the Middle East and Africa.

Banks should not fixate on double-digit returns
Daniel Davies (FT) Jan 13, 2016
Barclays’ decimation illustrates the problem of short-termism in capitalism.

No reason to worry about household debt
Chris Giles (FT) Jan 13, 2016
Speculation brought trouble to banks; mortgage books on the other hand were remarkably secure.

Brexit is the easy bit
Jean-Claude Piris (FT) Jan 13, 2016
Voters should consider whether the cost in terms of prosperity and security is one they are prepared to pay.

Markets in for slower and bumpier climb
Richard Madrigan (FT) Jan 13, 2016
It’s a transition point but long-term money should stay invested.

Japan: Deflated generation
Leo Lewis (FT) Jan 13, 2016
Years of falling prices have scarred the economy but have they affected twentysomethings’ ambitions?

A Federal Reserve Oblivious to Its Effect on Financial Markets
Martin Feldstein (WSJ) Jan 13, 2016
The Federal Open Market Committee last month didn’t even mention risk from persistent low rates.

The China bubble pops
Robert J. Samuelson (WP) Jan 13, 2016
How will that affect the world economy?

China's economic crisis is coming
Salvatore Babones (Aljazeera) Jan 13, 2016
China is now facing rich country problems on a poor country budget.

Why investors should be wary of GDP
Kevin Murphy (Pieria) Jan 13, 2016
Investing by reference to GDP is akin to attempting an accumulator at the racecourse.

China Isn’t the First to Fumble a Stock Panic
Stephen Mihm (Bloomberg View) Jan 13, 2016
The U.S. created its economic circuit breakers through trial and error.

The Return of Public Investment
Dani Rodrik (Project Syndicate) Jan 13, 2016
Using public investment to drive economic growth – often derisively called “capital fundamentalism” – has long been out of favor among development experts. But if one looks at the countries that, despite strengthening global economic headwinds, are still growing rapidly, one will find that public investment is doing much of the work.

India Looks Out
Arun Jaitley (Project Syndicate) Jan 13, 2016
India today occupies a special position in today's world. Whereas many countries – advanced and developing economies alike – are experiencing a growing sense of economic anxiety and even gloom, India is a beacon of hope, positive change, and economic dynamism.

The double-edged sword of China's global investment success
Derek Scissors (AEI) Jan 13, 2016
The China Global Investment Tracker (CGIT) is the only fully public accounting of China's investment around the world. It shows 2015 investment growing by 16 percent to $111 billion. The CGIT also documents China's global construction activity. The combined value of investment and construction since 2005 exceeds $1.2 trillion. The challenge for the United States is to separate the many legitimate Chinese activities that benefit Americans from the firms and individuals that have broken US law. The challenge for China is that investment outflow may no longer signal growing prosperity, but a belief by Chinese companies that opportunities are now better overseas.

Globalisation 2.0 — an optimistic outlook
Lionel Barber (FT) Jan 14, 2016
The reformers will prevail, from Beijing to Tokyo, Delhi, Brussels, London and Washington.

Beijing’s meddling is shaking the markets
Zhiwu Chen (FT) Jan 14, 2016
The problem is not too few competent officials but their lack of independence.

Shipping’s globalisation woes
Gillian Tett (FT) Jan 14, 2016
For sign of how the tectonic plates of the global economy are shifting, look at the Baltic Dry Index.

Swiss face challenge of EU uncertainty
Ralph Atkins (FT) Jan 14, 2016
Determination to preserve independence creates risk over economy.

India internet: Laying the foundations
James Crabtree (FT) Jan 14, 2016
For Modi’s government, technology offers a way to propel the country out of poverty.

Is Vast Inequality Necessary?
Paul Krugman (NYT) Jan 14, 2016
Of course not, despite what many of its beneficiaries believe.

A new year of turmoil for China
David Ignatius (WP) Jan 14, 2016
China’s economic slide shows the dangers of being caught between a free market and government control.

Obama Renews Call for TPP Ratification in Final State of the Union Speech
Bridges, Volume 20, Number 1 Jan 14, 2016
US President Barack Obama openly called upon domestic lawmakers to ratify the Trans-Pacific Partnership (TPP) Agreement, referring once more to the need for Washington to play a leading role in setting trade rules in Asia.

EU, Ukraine Begin Applying Trade Deal, Rekindling Russia Tensions
Bridges, Volume 20, Number 1 Jan 14, 2016
The EU and Ukraine have begun putting into operation their bilateral trade deal since 1 January, in a move that, as was widely expected, has brought long-simmering tensions with Russia on the subject back to the fore.

Public Debt in Low-Income Countries: Opportunities and Vulnerabilities
IMF Survey Jan 14, 2016
More diverse financing sources can raise new opportunities but can also pose risks, said a joint IMF-World Bank report on public debt vulnerabilities in low-income countries.

Financial Levianthans Under Review in 2016
IMF Survey Jan 14, 2016
Some of the world’s largest, most connected financial systems including the United Kingdom and Germany will undergo their mandatory five-year financial stability review by the International Monetary Fund in 2016.

Europe's Migration Crisis as a Path toward Deeper Integration?
Pedro Nicolaci da Costa (PIIE) Jan 14, 2016
Nothing like a humanitarian crisis to put a financial one into perspective. A year after the euro area appeared to put at least a temporary respite to chatter that the currency union might fall apart, the continent was faced with a massive influx of migrants, refugees, and asylum seekers in 2015, many desperately fleeing war zones in Syria and Iraq.

Oil's Plunge Is Great News for Most of Us
Noah Smith (Bloomberg View) Jan 14, 2016
Cheaper fuel more than makes up for pain in the energy industry.

Closing Asia’s Emerging Skills Gap
Lee Jong-Wha (Project Syndicate) Jan 14, 2016
Over the last three decades, significant gains in workforce size and quality helped Asia to sustain rapid progress toward advanced-economy income levels and living standards. But with workers increasingly unable to meet the demands of the labor market, the region's remarkable success could be derailed.

Dating financial stress events: A new approach
Thibaut Duprey, Klaus Benjamin and Tuomas Peltonen (VoxEU) Jan 14, 2016
It is widely agreed that the Global Crisis qualifies as a period of ‘systemic’ financial stress. However, identifying and classifying other similar periods is challenging. This column presents a new framework for a transparent and objective identification of systemic financial stress episodes, beyond the expert-selected stress events available so far. The approach is applied to 27 EU countries to successfully identify episodes of financial stress. It is widely agreed that the Global Crisis qualifies as a period of ‘systemic’ financial stress. However, identifying and classifying other similar periods is challenging. This column presents a new framework for a transparent and objective identification of systemic financial stress episodes, beyond the expert-selected stress events available so far. The approach is applied to 27 EU countries to successfully identify episodes of financial stress.

Global value chains and measuring national competitiveness
Konstantins Benkovskis and Julia Woerz (VoxEU) Jan 14, 2016
Global value chains have increased the complexity of good economic analysis no end. This column assess the extent to which global value chains change how we think about the world, and argues that the evolution of global market shares is no longer an adequate indicator of a country’s competitiveness in most cases. ‘Made in China’ has changed almost everything. Global value chains have increased the complexity of good economic analysis no end. This column assess the extent to which global value chains change how we think about the world, and argues that the evolution of global market shares is no longer an adequate indicator of a country’s competitiveness in most cases. ‘Made in China’ has changed almost everything.

Those Were the Days
Edward Glaeser (WSJ) Jan 15, 2016
Will the best brains of the future build things resembling our past innovations, or will they dedicate their time to tasks like making Twitter more user-friendly?

$29 Oil and the Dollar
WSJ Jan 15, 2016
As the greenback keeps rising, commodity prices keep falling.

Stock Prices Sink in a Rising Ocean of Oil
Clifford Krauss (NYT) Jan 15, 2016
As an oil glut grows despite production cuts, investors worry about a slowdown in the global economy.

FX Traders, Take Heart: Even Keynes Lost His Shirt
Mark Gilbert (Bloomberg View) Jan 15, 2016
Currency markets almost bankrupted the greatest economist of his generation.

Market Volatility Makes Us Nervous
Mohamed A. El-Erian (Bloomberg View) Jan 15, 2016
Asset-price declines could prove durable.

Catching the Digital Wave
Dominic Barton (Project Syndicate) Jan 15, 2016
As technological innovation sweeps across economies, it is transforming the competitive landscape, with the most advanced – rather than the largest or oldest – companies coming out on top. That’s why CEOs’ top priority in 2016 should be to digitize the core components of their business.

Navigating China’s New Silk Road
Liu Mingkang and Wenshi Lu (Project Syndicate) Jan 15, 2016
Since its introduction by Chinese President Xi Jinping in 2013, the “one belt, one road” initiative, which entails the revitalization of the ancient overland and maritime Silk Road trade routes, has attracted considerable attention. For good reason: The project implies unprecedented opportunities – and challenges.

Towards a global narrative on long-term real interest rates
Lukasz Rachel and Thomas D. Smith (VoxEU) Jan 15, 2016
Many candidate explanations for the low level of real interest rates have been put forward. Less progress has been made on bringing together the different hypotheses into a unifying framework, on quantifying their relative importance and on predicting the future path for real interest rates. This column attempts to fill that gap, and suggests that persistent shifts to global desired savings and investment are behind the bulk of the fall in real interest rates. Those trends are unlikely to unwind anytime soon, so that the global equilibrium rate is likely to remain low, perhaps settling at or below 1% in the medium to long-run. Many candidate explanations for the low level of real interest rates have been put forward. Less progress has been made on bringing together the different hypotheses into a unifying framework, on quantifying their relative importance and on predicting the future path for real interest rates. This column attempts to fill that gap, and suggests that persistent shifts to global desired savings and investment are behind the bulk of the fall in real interest rates. Those trends are unlikely to unwind anytime soon, so that the global equilibrium rate is likely to remain low, perhaps settling at or below 1% in the medium to long-run.
Let’s begin with a proposition: The United Nation’s Sustainable Development Goals (SDGs) and the OECD’s New Approaches to Economic Challenges (NAEC) initiative were made for each other. They are the Romeo and Juliet of economic transformation.

When Oil-Rich Countries Need More Cash
NYT Jan 16, 2016
Saudi Arabia and other oil-producing nations are relying on sovereign wealth funds because of falling oil prices.

China’s economy: The yuan and the markets
Economist Jan 16, 2016
Strains on the currency suggest that something is very wrong with China’s politics.

The Romeo and Juliet of Economic Transformation
Douglas Frantz (OECD Insight) Jan 16, 2016

The stabilising role of dollar borrowing
Philippe Bacchetta and Ouarda Merrouche (VoxEU) Jan 16, 2016
Economists now tend to stress the role of global banks in the transmission of the Global Crisis. This column argues that the retrenchment of Eurozone banks opened regulatory arbitrage opportunities for US banks. The fact that US banks, and in particular the most risky US banks, fully exploited these opportunities had a salubrious effect on credit-constrained corporates and employment. It seems the move from Basel I to Basel II with risk-sensitive capital requirements amplifies the credit cycle. Economists now tend to stress the role of global banks in the transmission of the Global Crisis. This column argues that the retrenchment of Eurozone banks opened regulatory arbitrage opportunities for US banks. The fact that US banks, and in particular the most risky US banks, fully exploited these opportunities had a salubrious effect on credit-constrained corporates and employment. It seems the move from Basel I to Basel II with risk-sensitive capital requirements amplifies the credit cycle.

The Price of Oil, China, and Stock Market Herding
Olivier Blanchard (PIIE) Jan 17, 2016
The stock market movements of the last two weeks are puzzling. Take the China explanation. A collapse of growth in China would indeed be a world changing event. But there is just no evidence of such a collapse.

The renminbi comes of age
Sourabh Gupta (EAF) Jan 17, 2016
The elevation [of the renminbi as an Special Drawing Rights basket currency] is recognition of the progress made by Beijing over the past half-decade in liberalising and deepening its monetary and financial systems. It is also a vindication of the renminbi (RMB) internationalisation strategy championed by the People's Bank of China under Governor Zhou Xiaochuan.

Foreign acquisitions and better corporate governance
Rui Albuquerque, Miguel Ferreira, Luis Brandao-Marques and Pedro Matos (VoxEU) Jan 17, 2016
Previous research has shown that the corporate governance practices of firms are constrained by the legal standards of their country of incorporation. This column explores how an active international market for corporate control can substitute for weak institutions in a host country. Using firm-level data from 22 countries, it shows how cross-border M&A activity improves the governance of non-target firms in the same industry, via peer pressure. These findings provide evidence for corporate governance improvements as a novel positive spillover from FDI.

Markets: High anxiety
Dan McCrum, Robin Wigglesworth and Jennifer Hughes (FT) Jan 18, 2016
Bourses are suffering their worst ever start to a year but investors are discounting the risk of a recession.

Weaning the world off monetary stimulus
Robert Zoellick (FT) Jan 18, 2016
A shift to growth policies make currency wars and populism less likely.

Stop China’s Market Manipulations
Scott Kennedy (NYT) Jan 18, 2016
To protect the global economy, Washington needs to send Beijing a clear message.

Why economic growth lags
Robert J. Samuelson (WP) Jan 18, 2016
A new book offers a sobering reminder of technology’s limits.

New Evidence on Immigrants and Jobs
Giovanni Peri & Vasil Yasenov (WSJ) Jan 18, 2016
A large influx of Cubans to Miami did not depress the wages or employment of low-skill American workers.

Reshaping the Labor Landscape
Jonas Prising (Project Syndicate) Jan 18, 2016
As the global economy changes at an ever-quickening pace, the labor market in many countries is not merely struggling to keep up, but seems to have broken down in important ways. Fortunately, four epochal forces are reshaping the world of work, helping to resolve contradictions and overcome dysfunction in the labor market.

The Tech Literacy Imperative
Gavin Patterson (Project Syndicate) Jan 18, 2016
Today’s children may look like savvy digital natives, but all too often their knowledge is only screen-deep. If young people are to be empowered citizens, not just beguiled consumers, they will need to understand how technology affects every aspect of contemporary life.

Facing the Fourth Industrial Revolution
Enrique Peña Nieto (Project Syndicate) Jan 18, 2016
This week's annual World Economic Forum meeting in Davos will focus on "Preparing for the Fourth Industrial Revolution." This is an urgent challenge for all countries – one to which Mexico has already begun to respond.

The ECB and the Fed: A comparative narrative
Dae Woong Kang, Nick Ligthart and Ashoka Mody (VoxEU) Jan 18, 2016
Although the Great Recession was viewed as a US problem, the Eurozone was affected by it from the start. This column compares the monetary policy responses to the Crisis by the Fed and the ECB. It argues that the US approach has been much more aggressive and proactive. The ECB failed to provide stimulus when needed, and as a result the Eurozone might slip into a low-inflation trap.

The price of oil, China, and stock market herding
Olivier Blanchard (VoxEU) Jan 18, 2016
The world economy at the start of 2016 is a genuinely confusing place, with stock markets plummeting. This column discusses the mainstream narratives behind this – China and the oil price dip – and finds them wanting. The economic linkages seem too weak to justify the gyrations. Instead, they may be the result of herding or a delayed reaction to the global economy’s lower-for-long growth prospects.

Resilience of market liquidity
Luis Brandao-Marques and Gaston Gelos (VoxEU) Jan 18, 2016
Concerns about both the level of bond market liquidity and its fragility have risen lately, prompted partly by events such as the October 2014 Treasury bond flash rally in the US, or the April 2015 Bund tantrum in Europe. This column assesses current market liquidity and resilience, discerning several key policy recommendations from the evidence.

China’s great shift needs to begin
Martin Wolf (FT) Jan 19, 2016
Credit-fuelled investment must slow and household incomes and consumption accelerate.

What on earth is going on with the stock market?
Robert J. Samuelson (WP) Jan 19, 2016
In the first two weeks of 2016, the market fell 8.7 percent, a paper loss of $2.1 trillion. Is this a recession?

A Third Wave of Financial Crisis?
Holger Schmieding (Globalist) Jan 19, 2016
After Lehman and the Eurozone, will China and oil cause another calamity in the markets?

Weak Pickup in Global Growth, with Risks Pivoting to Emerging Markets
IMF Survey Jan 19, 2016
The pickup in global growth is weak and uneven across economies, with risks now tilted toward the emerging markets, says the IMF’s latest World Economic Outlook (WEO) Update.

China's Currency Isn’t Dominant Yet
Mark Whitehouse (Bloomberg View) Jan 19, 2016
The dollar is still No. 1 for trade and rising.

Emerging Markets Aren't in Crisis
Michael Schuman (Bloomberg View) Jan 19, 2016
Most economies have healthier debt levels than is commonly assumed.

The Polish Threat to Europe
Slawomir Sierakowski (Project Syndicate) Jan 19, 2016
In the last two months, Poland has emerged as the latest European battleground in a contest between two models of democracy – liberal and illiberal. But while Poland is the largest EU country to embrace illiberalism, it is not the first, indicating a trend that must be combated.

Economists on the Refugee Path
Robert J. Shiller (Project Syndicate) Jan 19, 2016
Under today’s haphazard and archaic asylum rules, refugees must take enormous risks to reach safety, and the costs and benefits of helping them are distributed capriciously. Economists can help spur reform by testing which international rules and institutions are needed to improve an inefficient and often inhumane system.

The IMF Needs More Lagarde
Ian Bremmer (Project Syndicate) Jan 19, 2016
Christine Lagarde has said she is open to a new five-year term as Managing Director of the IMF. She should get it: The IMF has never had better leadership, and its board of directors should give her the chance to finish the work she has begun.

The AIIB is Ready for Business
Jin Liqun (Project Syndicate) Jan 19, 2016
The recent historic launch of the Asian Infrastructure Investment Bank was highly anticipated – and rightly so. Sound and sustainable projects will lead to better development outcomes, improve the lives and livelihoods of Asia’s citizens, and generate positive spillover effects in other parts of the world.

China’s Stock-Market Red Herring
Jeffrey Frankel (Project Syndicate) Jan 19, 2016
With the Shanghai Stock Exchange Composite Index down more than 40% since last June, investors worldwide are watching the decline with growing concern, viewing it as evidence that China’s economy is going down the tubes. In fact, those seeking compelling clues about China’s economic future should look elsewhere.

The trade consequences of the oil price
Pierre-Louis Vézina and David von Below (VoxEU) Jan 19, 2016
The price of oil rose to unprecedented highs in the 2000s, and its recent plunge took many by surprise. Although there are many consequences of such price fluctuations on the world economy, they are notoriously difficult to pin down. This column examines the trade consequences of varying shipping costs caused by oil price fluctuations. High oil prices are found to increase the distance elasticity of trade, making trade less global. The recent drop in oil prices could thus be a boon for globalisation.

Oil prices are at the mercy of geopolitics
Daniel Yergin (FT) Jan 20, 2016
A counterweight to pessimism could come from sanctions lifting on Iran.

What If?
Thomas L. Friedman (NYT) Jan 20, 2016
What if the eras of the E.U., high growth in China, expensive oil and newly independent nations' economic foundations are all over?

How Will Russia's Economy Survive 2016?
Simeon Djankov (PIIE) Jan 20, 2016
A global excess of cheap oil and poor governance have left Russia in a deep economic slump that shows few signs of abating soon. The country's 2016 federal budget is calculated based on oil prices at $50 a barrel. Even at that level, the government runs a 3 percent deficit.

Trump and Palin: Is America Becoming an Oil Kleptocracy?
Alexei Bayer (Globalist) Jan 20, 2016
That such a substantial number of Americans want to see Trump as their president is an alarming signal.

Iran Faces Multiple Challenges as Growth Prospects Brighten
IMF Survey Jan 20, 2016
The Islamic Republic of Iran has made progress in improving macroeconomic conditions in a difficult economic environment, said the IMF in its health check of the economy.

A Cheaper Yuan Won't Help China
Christopher Balding (Bloomberg View) Jan 20, 2016
Beijing needs to get its economic house in order, rather than counting on a boost to exports.

Japan Must Let Zombie Companies Die
Noah Smith (Bloomberg View) Jan 20, 2016
Keeping failing businesses on life support stifles creative startups.

Pulling Europe Back from the Brink
Martin Schulz (Project Syndicate) Jan 20, 2016
With political disenchantment reaching levels not seen since the 1930s, the risk that Europe will succumb to the destructive forces of populism looms ever larger. But it is too soon to give up hope; on the contrary, the European Union is well positioned to succeed in the long term.

China’s Slowdown and Asia’s Economy
Shang-Jin Wei (Shang-Jin Wei) Jan 20, 2016
After three decades of double-digit growth, the weakening performance of China, now the world’s second-largest economy, is a major source of concern – and not just for the Chinese. But, while the slowdown will have negative consequences for some countries in the region, it is also creating opportunities for others.

Should Business Travel Be Obsolete?
Ricardo Hausmann (Project Syndicate) Jan 20, 2016
Today's executives can call, email, and even watch their counterparties on FaceTime, Skype, or GoToMeeting. So why do companies fork out more than $1.2 trillion a year – a full 1.5% of the world’s GDP – for international business travel, and why is their spending growing faster than the global economy?

Promises to Keep in 2016
Bill Gates and Melinda Gates (Project Syndicate) Jan 20, 2016
Since the turn of the century, remarkable strides have been taken toward a world in which every person has the chance to lead a healthy, productive life. But while further progress is possible, it is not inevitable.

India’s Investment Anemia
Gita Gopinath (Project Syndicate) Jan 20, 2016
When Narendra Modi became India’s prime minister 18 months ago, his huge electoral victory brought sky-high expectations that the country's economy, unshackled from the indecisiveness of the previous Congress-led government, would soar. Yet, as 2015 came to a close, the Indian economy was hardly flying high.

Industrialization, job creation, and structural transformation
Eyerusalem Siba (Brookings) Jan 20, 2016
How industrialization allows governments to make long-term investments in infrastructure, skills formation, and institutional building.

Are we likely to see new nation states emerge this century?
Chris Roth (Aeon) Jan 20, 2016
Present-day nations are largely the remains of colonial decisions. Will we see many new nation-states emerge this century?

Davos Diary: Money is Rushing Out of Emerging Markets. Blame China.
David Francis (FP) Jan 20, 2016
Money is rushing out of emerging markets after China's economic slowdown.

The tiny shifts that can signal huge changes
Gillian Tett (FT) Jan 21, 2016
Deep in the bowels of the system, financial flows are switching course.

China’s deeply flawed ascent
George F. Will (WP) Jan 21, 2016
Economic turmoil points up the instability of the Leninist one-party state.

Against a BRIC Wall: How the Petrobras Scandal Unmasked Brazil's Corrupt Political System
Pedro Nicolaci da Costa and Monica de Bolle (PIIE) Jan 21, 2016
Brazil's political system is unraveling, and for good reason: A long-running corruption investigation into the state-run oil firm Petrobras has unveiled a much deeper web of corruption that threatens the fabric of the country's democracy. Brazilians are watching with a mix of awe, excitement, disgust, and dismay as major executives and politicians are literally carted off to jail.

Davos Dreaming: Development without Development
Maya Forstater and Vijaya Ramachandran (CGD) Jan 21, 2016
It's that time of year again when presidents, CEOs and civil society leaders get together at the World Economic Forum in Davos, Switzerland, leaving the rest of us to wonder whether it is really true that a small number of very rich people at the top of the income distribution own more than the bottom half of the world.

China's Acquisition Spree Won't End Well
Michael Schuman (Bloomberg View) Jan 21, 2016
History suggests that there's no shortcut to making great products.

The Problem With “Illiberal Democracy”
Jan-Werner Mueller (Project Syndicate) Jan 21, 2016
After just three months in power, Poland's new government appears committed to establishing what critics are calling an “illiberal democracy.” But the description is deeply misleading – and in a way that undermines efforts to rein in would-be autocrats.

Leadership for Sustainability
Helen Clark (Project Syndicate) Jan 21, 2016
Last year, the UN laid out a blueprint to tackle the world's thorniest issues, including climate change, poverty, and the pursuit of sustainable development. But while global agreements are important, even the best accords are no more than words on paper if they cannot be implemented.

Mastering the Fourth Industrial Revolution
Larry Hatheway (Project Syndicate) Jan 21, 2016
Investors worldwide are fretting about global demand conditions, fearing, for example, a potential hard landing in China and the repercussions of falling oil prices. But, while these worries are well founded, they often neglect human ingenuity's unparalleled ability to deliver better living standards and investment opportunities.

China’s Silk Road Vision
Justin Yifu Lin (Project Syndicate) Jan 21, 2016
While the outside world frets about China’s growth slowdown, the country is pressing ahead with an initiative that will benefit the entire global economy. The "one belt, one road" strategy will facilitate China's economic transition, while creating unparalleled opportunities for other developing countries.

Britain’s Watershed Year
Chris Patten (Project Syndicate) Jan 21, 2016
In the UK, a referendum on whether to remain a member of the EU is likely to take place before the end of the year. If, deluded by mendacity and make-believe, British voters choose to quit, they will have done irreparable harm to their country's long-term economic and strategic prospects.

Lies, Damned Lies, and Immigration Statistics
George Borjas (NRO) Jan 21, 2016
The political and media narrative that immigration is “good for everyone” is erected and maintained by questionable data manipulations, by the use of conceptual assumptions that sometimes build in the numerical answer to critical questions, and by a tendency to hide inconvenient facts.

Will our children really not know economic growth?
Lawrence Summers (Prospect) Jan 21, 2016
Not so fast, Robert Gordon.

Past holds key to Europe’s survival
Mark Mazower (FT) Jan 22, 2016
Thinking about EU evolution is near impossible yet never has it been more vital.

The (Uneven) Digitization of the US Economy
Irving Wladawsky-Berger (Pieria) Jan 22, 2016
Digital technologies are all around us, - increasingly ubiquitous and commoditized, but can they drive long term economic growth?

Engineering an Energy Miracle
Dalia Grybauskaite (Project Syndicate) Jan 22, 2016
Progress toward a more sustainable economy has been alarmingly slow over the last decade. Though there have been some promising recent developments, world leaders must take some key steps to lock in – and build upon – the gains that have been made.

Inequality Hits Davos
Winnie Byanyima (Project Syndicate) Jan 22, 2016
Sixty-two of the world’s wealthiest people own as much as the poorest 3.6 billion – a shocking figure that will certainly come up at this week’s annual meeting of the World Economic Forum in Davos. The question is whether the people who get invited to Davos – the global elite – will take action to combat growing economic inequality.

Upholding the Asian Order
Brahma Chellaney (Project Syndicate) Jan 22, 2016
From the “one belt, one road” scheme to the AIIB, Chinese geostrategic initiatives are steadily advancing the country’s strategic objective of fashioning a Sino-centric Asia. While regional powers are watching these moves with concern, they have so far failed to coordinate their efforts to uphold the regional order.

Why Africa Needs Fossil Fuels
Bjørn Lomborg (Project Syndicate) Jan 22, 2016
Environmental campaigners like to insist that Africa should meet its energy needs through solar panels and wind turbines. But as long as fossil fuels remain cheaper than renewable energy, such prescriptions – as well-meaning as they may be – would cripple the continent's economic growth and leave hundreds of millions in poverty.

Banking on agriculture for Africa’s future
Makhtar Diop (Brookings) Jan 22, 2016
Why agriculture, a primary source of income for Africans, must be a priority for the continent in 2016.

Cables, sharks, and the geography of the foreign exchange market
Barry Eichengreen, Arnaud Mehl and Romain Lafarguette (VoxEU) Jan 22, 2016
There is ongoing debate about the impact of technological progress on the geography of trade and production. One view is that cheap technology has attenuated the effect of distance, while others argue that location still matters. This column explores the issue in the context of foreign exchange markets. It examines how submarine fibre optic cables that link locations to financial hubs have affected the location of transactions. The findings suggest, on balance, that technological progress has made proximity to a trading centre more important.

Draghi’s inflation targets miss the mark
Wolfgang Münchau (FT) Jan 24, 2016
The ECB keeps failing because it is not fully committed.

What’s behind the global stock sell-off?
Robert J. Samuelson (WP) Jan 24, 2016
Risk has gone up, and reward has come down.

A New Mindset for a Shifting Global Economy
Mohamed Aly El-Erian (Bloomberg View) Jan 24, 2016
Volatility rules as central banks withdraw their supports.

China's Migrants Go Home -- And Stay There
Adam Minter (Bloomberg View) Jan 24, 2016
China's migrants are moving back home, and not just because of the economy.

Europe’s migration crisis of 2016
Jacob Funk Kirkegaard (VoxEU) Jan 24, 2016
The migrant crisis will continue to top headlines in 2016. This column takes a detailed look at the EU’s response to dealing with migration, concluding that everything points towards failure as the likely outcome. Unlike the most critical aspects of the Eurozone Crisis, the main drivers of the current migration emergency are external factors such as war. These circumstances are highly unlikely to change in the medium term. The hardball politics and threats that proved extraordinarily effective in coercing member states into accepting domestic political conditionality in return for financial aid during the Eurozone Crisis are doomed to fail when it comes to migration.

Greek debt is key to the refugee crisis
Gideon Rachman (FT) Jan 25, 2016
A model could be the camps set up for displaced people in Europe after the second world war.

There is nothing to fear from AI machines
Luciano Floridi Jan 25, 2016
No AI Godzilla will enslave us. We should focus on the real challenges.

Pay attention to long-term debt cycle
Ray Dalio (FT) Jan 25, 2016
Limits to spending growth financed by debt and money raises risks of policy ‘pushing on a string’.

The Chances of a Global Meltdown
Gerald O’Driscoll Jr. (WSJ) Jan 25, 2016
Investors have reasons to be fearful—but not terrified. Here’s what to expect in the rocky months ahead.

A Fix for Italy's Banks Can't Wait
Bloomberg View Jan 25, 2016
The last thing Europe needs is another worsening crisis.

What the Fed Will and Won't Do This Week
Mohamed Aly El-Erian (Bloomberg View) Jan 25, 2016
Mindful of recent market volatility, the central bank will delay another rate cut.

The Price Americans Pay for Slow Growth
Noah Smith (Bloomberg View) Jan 25, 2016
Imagine: The nation could be a third richer by 2050.

One Chart That Terrifies Emerging-Market Investors
Mark Whitehouse (Bloomberg View) Jan 25, 2016
Companies are more indebted than they have been in a long time.

The secular slowdown in European productivity
EIU Jan 25, 2016
Since the global financial crisis productivity growth has slowed across most advanced economies, reflecting both cyclical factors resulting from the recession and structural changes as these economies have matured. The economies of north-west Europe all had a comparatively high level of output per worker before the crisis, but their differing responses to the challenges posed by the global downturn have resulted in diverging rates of labour productivity growth. The shifts under way both domestically and in the global economy make it highly unlikely that these countries will return to their pre-crisis rates of productivity growth. However, we do expect a mild improvement across these countries now that the cyclical effects of the crisis are fading. We expect this uptick to be slower to manifest itself in the UK, and weaker in Austria, than in Germany or France.

Iran Is Back in Business
Robin Wright (New Yorker) Jan 25, 2016
Its return to the global marketplace represents an opportunity for nearly every nation except the United States.

The Dollar Keeps Rising, for Good or Evil
Eduardo Porter (NYT) Jan 26, 2016
Despite global economic turmoil, many economists argue that the American currency’s rise is mostly a good thing. But there are downsides, and not all in the United States.

Hope for Chinese Stocks
WSJ Jan 26, 2016
Letting prices find a natural bottom may be a sign of coming reform.

Where Have All the Oil ‘Speculators’ Gone?
Brad Schaeffer (WSJ) Jan 26, 2016
Funny how the market worked fine without government intervention to stop price ‘gouging.’

Brazil's Easy-Money Problem
Lucas Vaz (Mises Wire) Jan 26, 2016
Brazil is undergoing what is considered its worst economic crisis in seventy years, and there is usually no agreement when it comes to the causes of this situation.

High Time for a Western Oil Strategy
Frank Vogl (Globalist) Jan 26, 2016
Yes, we can boost global security and good governance.

Goodbye, Golden Age of Growth
Robert J Gordon (Bloomberg View) Jan 26, 2016
Dot-com-era growth was an aberration, not the pattern.

Free Trade With China Wasn't Such a Great Idea for the U.S.
Noah Smith (Bloomberg View) Jan 26, 2016
Economists ignore how much harm was done to workers.

Stop Comparing the U.S. to the Fall of Rome
Justin Fox (Bloomberg View) Jan 26, 2016
How about 17th-century France?

Immigration into the Welfare State
Hans-Werner Sinn (Project Syndicate) Jan 26, 2016
Welfare states are fundamentally incompatible with the free movement of people between countries if newcomers have full access to public benefits as soon as they arrive. If we are to take the free movement of people seriously, we should slaughter the sacred cow of immediate eligibility.

False Alarm on China
Stephen S. Roach (Project Syndicate) Jan 26, 2016
The prospect of an economic meltdown in China seems to be rattling global financial markets at the start of 2016. Yet such fears are overblown, pumped up by a growing misalignment between China’s encouraging progress on structural adjustment in its real economy and disappointing performance on market-based financial-sector reforms.

The Varoufakis Effect?
Yanis Varoufakis (Project Syndicate) Jan 26, 2016
Investors should be worried nowadays – very worried – about political risk. But they must also be wary of financial analysts who are either incapable of, or uninterested in, distinguishing between causality and correlation, and between insolvency and illiquidity.

Refugees Don’t Need Your Pity
Anna Badkhen (FP) Jan 26, 2016
The Global North appetite for the world's resources has created a world of displaced people -- and pitying them is not the answer.

Alphabet and Apple spell global tax war
John Gapper (FT) Jan 27, 2016
A fiscal system formed under the League of Nations in 1928 is about to fracture and fall apart.

China turmoil teaches truths about Brexit
Chris Giles (FT) Jan 27, 2016
Sensible politicians gamble on big economic transitions only if there is little alternative.

Historic Reforms Double Quota Resources and Enhance Voice of Emerging and Developing Economies
IMF Survey Jan 27, 2016
The 2010 IMF quota and governance reforms that took effect yesterday will strengthen the voice and representation of emerging and developing economies in the institution; reinforce the legitimacy of its decision-making process; and equip it with more permanent resources to better respond to future crises.

Central Asia under Duress from Falling Oil
Simeon Djankov (PIIE) Jan 27, 2016
The falling price of oil and the corresponding devaluation of national currencies have wreaked havoc on once buoyant Central Asia. Political response has been swift. Kazakh President Nursultan Nazarbayev called early parliamentary elections. The Azeri president introduced capital controls.

The Fed's Best Policy: Wait and See
Bloomberg View Jan 27, 2016
On interest rates, there's no reason to panic.

The Market's Troubling Message
Ashoka Mody (Bloomberg View) Jan 27, 2016
We'd like to think investors are overreacting. But they may be onto something.

U.K. Businesses Are Ready to Fight to Stay in the EU
Mark Gilbert (Bloomberg View) Jan 27, 2016
The private sector was slow to mobilize against Scotland's independence. Not this time.

Markets Don’t Believe the Fed
Mark Whitehouse (Bloomberg View) Jan 27, 2016
The central bank says rates are going up. Investors don't buy it.

The Fed in a Bind
Mohamed Aly El-Erian (Bloomberg View) Jan 27, 2016
U.S. vulnerability to a worsening global outlook alters rate-hike path.

Why Universal Banks Are Failing
Damian Chunilal (Bloomberg View) Jan 27, 2016
The expected synergies haven't turned up. Plenty of new problems have.

Don't Blame Americans for Blaming China
Megan McArdle (Bloomberg View) Jan 27, 2016
Free trade hasn't worked out as planned.

A Floor for the Renminbi
Yu Yongding (Project Syndicate) Jan 27, 2016
In early 2014, after nearly a decade of trying to curb expectations of continued currency appreciation, the People's Bank of China finally succeeded, thanks to forceful market intervention. Unfortunately, the PBOC was pushing on an open door and is now facing an even more difficult challenge: strong depreciation expectations.

The Greece of the Caribbean
Andrés Velasco (Project Syndicate) Jan 27, 2016
The resemblance between Puerto Rico's debt problems and the situation in Europe is uncanny. The island and its leaders can learn three important lessons from the Greek crisis – first and foremost that it is no use pretending that debt reduction can be avoided.

The Global Economy’s Marshmallow Test
Jeffrey D. Sachs (Project Syndicate) Jan 27, 2016
The global economy is experiencing a turbulent start to 2016, as plunging stock markets, declining commodity prices, and political paralysis send ripples of instability throughout the world. Only long-term investment, both public and private, offers a path out of the current malaise.

China’s Bumpy New Normal
Joseph E. Stiglitz (Project Syndicate) Jan 27, 2016
Too often, the debate about China’s economy has been dominated by naive proposals for supply-side reform and criticism of the demand-side measures adopted after the 2008 global financial crisis. But, while those measures were far from perfect, they were far better than nothing – a lesson that remains relevant today.

China’s capital flight and US monetary policy
Yin-Wong Cheung, Sven Steinkamp and Frank Westermann (VoxEU) Jan 27, 2016
Since the beginning of the Global Crisis, illicit capital flows out of China have been in decline. This column argues that a key factor behind this is the relative money supply between China and the US. China’s rapidly increasing money supply, combined with the Fed’s expansionary monetary policy, prompted investors to reallocate their portfolios between the two countries. Another contributing factor is China’s gradual process of capital account liberalisation. The Fed’s interest rate hike in December may see a resurgence in China’s capital flight.

China’s slowdown and the Chinese stock market
Jeffrey Frankel (VoxEU) Jan 27, 2016
The Shanghai Stock Exchange Composite Index has dropped substantially in the past few months. China’s growth rate has also slowed. This column argues that the slowdown of the Chinese economy has little to do with the stock exchange, and is mostly due to economic forces. The author recommends a package of policies that need to be implemented to smooth the transition to a sustainable growth rate.

The World’s Most Innovative Countries
Stephen Ezell (Globalist) Jan 28, 2016
Which countries contribute to global innovation? And which detract from it?

Europe Faces Decision Time on Migration
Jacob Funk Kirkegaard (PIIE) Jan 28, 2016
Under pressure from waves of immigration and its own failure to act, the European Union is fast approaching a test of its political survival. Reintroducing national border controls across the Schengen Area, as now being contemplated, will be economically costly and threaten any pretense of solidarity in the face of this crisis.

Capital Controls Aren't the Answer for China
Christopher Balding (Bloomberg View) Jan 28, 2016
They'll only exacerbate underlying problems, not solve them.

The Shipping News Says the World Economy Is Toast
Mark Gilbert (Bloomberg View) Jan 28, 2016
Trucks, planes and boats paint a dismal picture, again.

Economics Might Be Very Wrong About Growth
Mark Buchanan (Bloomberg View) Jan 28, 2016
There's evidence the standard model is fundamentally flawed.

In Search of Growth Strategies
Michael Spence (Project Syndicate) Jan 28, 2016
Restoring growth to the global economy will require the removal of obstacles to investment, efforts to fix dysfunctional labor markets, and measures to counteract rising inequality. But, with few exceptions, such comprehensive growth strategies have been missing.

How Much Debt Is Too Much?
Robert Skidelsky (Project Syndicate) Jan 28, 2016
Is there a “safe” debt/income ratio for households or debt-to-GDP ratio for governments? In both cases, the answer is yes, though the precise number depends on situation-specific factors, including who owns the debt and the purposes for which it was incurred.

Economics in the Age of Abundance
J. Bradford DeLong (Project Syndicate) Jan 28, 2016
As humankind enters an age of abundance, the biggest challenge facing economists will no longer be to find the best ways to allocate scarce resources. Rather, it will be to help people protect themselves from manipulation.

The Return of the Currency Crash
Carmen Reinhart (Project Syndicate) Jan 28, 2016
Excluding the mayhem associated with the global financial crisis of late 2008 and early 2009, currency crashes were few and far between from 2004 to 2014. But recent developments suggest that the dearth of currency crashes during that decade may be remembered as the exception that proves the rule.

Fiscal cost of refugees in Europe
Joakim Ruist (VoxEU) Jan 28, 2016
The current inflow of refugees into Europe has left policymakers in disagreement over how to react. A major concern is the perceived financial burden that can result from large intakes. This column discusses the fiscal impact of refugees on the Swedish economy.

Labour market reforms, growth and inequality: A new dataset
Nauro F. Campos and Jeffrey B Nugent (VoxEU) Jan 28, 2016
Labour market liberalisation is both one of the most important structural reforms and one of the least well understood. This is partly due to a lack of data. This column introduces a new index of labour market regulations rigidity covering over 140 countries from 1950 onwards. Trade liberalisation and per capita income are shown to be more powerful explanations of the dynamics of labour market reform than ‘legal origins’.

Focus Germany: Above potential growth, no wage excesses
Dieter Bräuninger, Heiko Peters, Oliver Rakau and Stefan Schneider (DB Research) Jan 28, 2016
German GDP 2015 – where we got it wrong and why; and a moderate wage round in 2016.

Experts Confer on State of China’s Housing Market
IMF Survey Jan 29, 2016
House prices in China have been on a long upward march over the past decade, prompting much speculation about what the future holds. A conference last month in Shenzhen brought together some of the leading analysts of China’s housing markets.

Donald Trump: Right on Trade
Peter Morici (Globalist) Jan 29, 2016
The Republican frontrunner reflects the U.S. electorate’s deep frustrations on the economy.

The productivity and equality nexus: is there a benefit in addressing them together?
Gabriela Ramos (OECD Insights) Jan 29, 2016
Productivity growth has slowed since the crisis and inequality has been getting worse. Could they be influencing each other?

Reasons for the Fearful to Be Fearful of Gold
Matthew A Winkler (Bloomberg View) Jan 29, 2016
Even after a four-year slide, the bottom may not be in sight.

Economic Growth Isn't Everything
Noah Smith (Bloomberg View) Jan 29, 2016
Quality counts too, not just quantity.

Oil's Plunge Won't Drag Down the U.S. Economy
Justin Fox (Bloomberg View) Jan 29, 2016
Energy didn't contribute all that much to growth.

The Coming Wave of Oil Refugees
Michael Meyer (Project Syndicate) Jan 29, 2016
The last great oil bust occurred in the 1980s – and it changed the world, leading to the collapse of the Soviet Union. Today's plunging oil prices are similarly likely to redraw the geopolitical map, as petroleum-rich governments in Africa and the Middle East confront social unrest and Europe faces a new wave of migrants.

Xi of Arabia
Minghao Zhao (Project Syndicate) Jan 29, 2016
To turn the tide against extremism, Middle Eastern countries must be able to provide economic opportunities to their people, secured through trade, investment, and jobs. In this fundamental respect, China has much to offer – and its president has once again shown his determination to offer it.

The Invention of Inequality
Antonio Foglia (Project Syndicate) Jan 29, 2016
Everyone seems to be talking about – and condemning – today's high level of income and wealth inequality. But today’s ideology-driven debates oversimplify an issue that is exceedingly complex and affected by processes that we do not fully understand.

The Shortcomings of Quantitative Easing in Europe
Martin Feldstein (Project Syndicate) Jan 29, 2016
Why has the US Federal Reserve’s policy of quantitative easing been so much more successful than that implemented by the European Central Bank? That intellectual question leads directly to a practical one: Will the ECB ever be able to translate quantitative easing into stronger economic growth and higher inflation?

The Three Fears Sinking Global Markets
Anatole Kaletsky (Project Syndicate) Jan 29, 2016
Nothing about the condition of the world economy suggests that a major slowdown or recession is inevitable or even likely. But a lethal combination of self-fulfilling expectations and policy errors could cause economic reality to bend to the dismal mood prevailing in financial markets.

Argentina’s Uncertain Prospects
Martin Guzman and Joseph E. Stiglitz (Project Syndicate) Jan 29, 2016
Argentina's new government inherits a country on the brink of a balance-of-payments crisis. Its challenge will be to restore macroeconomic balance without undermining the social and economic gains that have been achieved over the last decade.

The pitfalls of Eurozone bilateral trade imbalance measures
Filippo di Mauro, Arne J. Nagengast and Robert Stehrer (VoxEU) Jan 29, 2016
Now that the worst of the Eurozone Crisis has passed, one question that emerges is whether improving current account balances should be an objective for policymakers. And if so, what tools are available? This column argues that because of the emergence of global value chains, trade imbalances within the Eurozone are to a large extent an endogenous result of the international organisation of production at the firm level. It is therefore better to disregard intra-EZ imbalances and focus on the total.

Helmut Schmidt and the narrative of the Eurozone crisis
Athanasios Orphanides (VoxEU) Jan 29, 2016
Helmut Schmidt, one of the great post-war architects of Europe, passed away in November 2015. This column, by a former governor of the Central Bank of Cyprus, reminds us of Schmidt’s analysis of the political and economic dimensions of the Eurozone Crisis delivered in speeches in late 2011. As Schmidt said: “What we have, in fact, is a crisis of the ability of the EU’s political bodies to act. This glaring weakness of action is a much greater threat to the future of Europe than the excessive debt levels of individual Eurozone countries.”

Networks and macroeconomic shocks
Daron Acemoglu, Ufuk Akcigit and William Kerr (VoxEU) Jan 30, 2016
How shocks reverberate throughout the economy has been a central question in macroeconomics. This column suggests that input-output linkages can play an important role in this issue. Supply-side (productivity) shocks impact the industry itself and those consuming its goods, while a demand-side shock affects the industry and its suppliers. The authors also find that the initial impact of an industry shock can be substantially amplified due to input-output linkages.

Athens and Rome expose EU faultlines
Wolfgang Münchau (FT) Jan 31, 2016
Italy’s long-term sustainability in the eurozone is just as uncertain as that of Greece.

Capital controls will not cure China’s ills
Eswar Prasad (FT) Jan 31, 2016
The government should make a real commitment to supply-side reforms.

The Riskiest Emerging Markets
Mark Whitehouse (Bloomberg View) Jan 31, 2016
By one measure, Brazil and India are on top.

Payback Time in Schengen Land
Hans-Helmut Kotz (Project Syndicate) Jan 31, 2016
The dissolution of the agreement that instituted passport-free travel within Europe need not mean the end of the EU. But it threatens to undermine the foundational goal of “ever closer union."

Robots and Refugees
Anne-Marie Slaughter (Project Syndicate) Jan 31, 2016
As the EU struggles to strengthen its border security, tracking and finding refugees and economic migrants before they reach European soil will become a priority. But no technology can address the underlying problem: the conflicts from which millions of people are seeking refuge.

China’s Transparency Problem
Andrew Sheng and Xiao Geng (Project Syndicate) Jan 31, 2016
For China, coordinating short-term policies aimed at stabilizing markets with long-term changes to the industrial structure has been no easy feat. One thing is clear: effective communication with market participants and real-economy players is crucial to market credibility and stability.

FDI ‘waves’ and cross-border acquisitions
Nils Herger and Steve McCorriston (VoxEU) Jan 31, 2016
A key feature of globalisation over the last three decades has been the wave-like growth of foreign direct investment. This column shows that conglomerate cross-border acquisitions, which are closely associated with mispricing in financial markets, play a significant role in explaining these developments.