News & Commentary:

Articles/Commentary

Biden $2.3 trillion boondoggle no challenge to China
David P. Goldman (AT) Apr 1, 2021
President Joe Biden's proposed $2.3 trillion spending package unveiled March 31 should have come a day later, as an April Fool's exercise. Labeled an infrastructure package, it offers just $447 billion for transportation infrastructure over eight years. That's less than a quarter of the most widely accepted estimates for the US infrastructure deficit.

Global economy poised to expand faster, buoyed by vaccinations
Karen Dynan (PIIE) Apr 1, 2021
The global economy is poised for a substantial pickup in economic activity for the rest of this year and next year, although different policy responses, rates of vaccination, and underlying factors mean that growth will vary considerably across countries.

Giving Everyone a Fair Shot
David Amaglobeli, Vitor Gaspar, and Paolo Mauro (IMF) Apr 1, 2021
COVID-19 and inequality.

The Property-Based Social Order Is Being Destroyed by Central Banks
Zachary Yost (Mises Wire) Apr 1, 2021
Private property is an institution central to civilization and beneficial human interaction. When central banks distort this institution with easy money, the social effects can be disastrous.

Big Spending Makes Financial Markets Matter Less
Conor Sen (Bloomberg View) Apr 1, 2021
No matter how disruptive the shock -- from GameStop to Archegos -- the economy has kept chugging along as a new growth strategy takes shape.

Gold Is Getting That Inflation Feeling Again
John Authers (Bloomberg View) Apr 1, 2021
The prospect of higher interest rates is bad news for the ultimate shiny yellow zero-coupon long-duration asset.

Archegos Carries a Warning For Europe's Financial Ambitions
Marcus Ashworth (Bloomberg View) Apr 1, 2021
The EU wants finance hubs in several locations, but last week's investment bank debacle shows the perils of a splintered approach to a crisis.

Food, Not Steel, Is Our Biggest Climate Challenge
Adair Turner (Project Syndicate) Apr 1, 2021
Since the Stern Review on the Economics of Climate Change, published in 2006, the estimated costs of achieving net-zero greenhouse-gas emissions from the world's energy, building, industrial, and transport systems have plummeted. And in many sectors, such as road transport, consumers will pay less for going green.

A Just Climate Transition for Africa
Sharon Ikeazor (Project Syndicate) Apr 1, 2021
In 2021, developed countries must work with low-income, developing, and emerging economies to chart a path toward a low-carbon future – and clear barriers to progress. This means, first and foremost, delivering the funding they promised.

Is the Asian Century Really Here?
Lee Jong-Wha (Project Syndicate) Apr 1, 2021
Asia is already a major global power, and some regard the ongoing COVID-19 crisis as a tipping point that will accelerate the region's resurgence. But the twenty-first century will really belong to Asia only if it can develop unified, collective leadership.

Preparing for a wave of non-performing loans
Johannes Kasinger, Jan Pieter Krahnen, Steven Ongena, Loriana Pelizzon, Maik Schmeling, and Mark Wahrenburg (VoxEU) Apr 1, 2021
Once moratoria and other Covid-19 support measures are unwound, European banks will likely be confronted by a wave of non-performing loans. This column provides empirical insights on the current levels of such loans in Europe and draws lessons from previous financial crises for their effective treatment. It highlights the importance of early and realistic assessment of loan losses to avoid adverse incentives for banks. Secondary loan markets would help in this process and further facilitate bank resolution as laid down in the Bank Recovery and Resolution Directive, which should be upheld even in extreme scenarios.

Three steps to stop the health crisis turning into the biggest emerging market debt crisis
Avinash Persaud (VoxEU) Apr 1, 2021
The servicing and rolling over of the public and private debt of middle-income countries is a major point of COVID-19-induced stress in the global economy. The G20's Debt Service Suspension Initiative is a worthy initiative, but it does not address this issue. This column outlines three related steps that may help avoid a crisis. The centre-piece is recycling new and unused Special Drawing Rights for debt reduction through the repayment or repurchase of debt. Moral hazard can be addressed by reducing only those debts held by official creditors and up to an amount equal to fiscal expenditures relating to natural disasters – COVID-19 and climate change, principal amongst them.

Sourcing Problems Limit the Pace of Economy's Rebound
Tim Quinlan, Sarah House, and Shannon Seery (WF Econ Group) Apr 1, 2021
This report unpacks how one of the biggest challenges for business investment and production is sourcing materials that are increasingly in short supply and securing labor.

Congress Can Do Better to Fight Weaponized Corruption
Gary Kalman and Josh Rudolph (FP) Apr 1, 2021
An understaffed agency vital to U.S. security desperately needs a bigger budget.

Trade war gain sparks inflationary pain in Vietnam
William Pesek (AT) Apr 2, 2021
Vietnam could be excused for being fed up with Jerome Powell's monetary exploits in Washington. Chairman Powell has opened liquidity spigots that markets didn't even know existed in restoring the quantitative easing regimen his Federal Reserve predecessors had scrapped, leaving Hanoi with an underappreciated overheating problem coming largely from the West.

Rapid progress in US labor market but still a long way to go
Jason Furman and Wilson Powell III (PIIE) Apr 2, 2021
The labor market improvement accelerated in March 2021 as employers added 916,000 jobs, a very rapid pace but one that will need to be sustained in order to repair the economy. Overall the economy was 10 million jobs below its pre-pandemic trend, and if the March pace of jobs gains is sustained, it will take another 14 months to close the jobs gap.

Here's Why Inflation Is Rising — and What You Can Expect
Christian von Canstein (BRINK) Apr 2, 2021
The first quarter of 2021 brought inflation — or at least the fear of it — back into focus. Investors need to prepare for a wider range of inflation outcomes for the decade to come, including the risk of inflation surprises.

Taming the Wave of Small and Medium Enterprise Insolvencies
Federico J. Díez, Romain Duval, Chiara Maggi and Nicola Pierri (IMF) Apr 2, 2021
Compared to past crises, this time around there is a clearer case for solvency support by governments.

Ensuring a Stronger and Fairer Global Recovery
Mohamed A. El-Erian (Project Syndicate) Apr 2, 2021
Although tough trade-offs are sometimes unavoidable, there is a way for policymakers to maintain a robust global economic recovery in 2021 and beyond while simultaneously pulling up disadvantaged countries, groups, and regions. But it will require both national and international policy adaptations.

The End of the Oil Age
Edoardo Campanella (Project Syndicate) Apr 2, 2021
For more than a century, the oil and gas industry has played a central role in almost every geopolitical development of consequence. Now that the fossil fuels' days finally seem to be numbered, it is time to consider not just what will come next, but also what it will take to get there.

Twitchy resilience becomes norm in equity markets
Katie Martin (FT) Apr 3, 2021
First quarter shows central bank largesse is still the driving force for investors.

Global supply chains are still a source of strength, not weakness
Economist Apr 3, 2021
Resilience comes not from autarky but from diverse sources of supply.

Where Modi Could Be Just as Wrong as Nehru
Andy Mukherjee (Bloomberg View) Apr 3, 2021
India's populist prime minister couldn't be more different from the country's cerebral founder. Yet the mistake of self-sufficiency beckons again.

How Pandemics Change the Course of History
Stephen Mihm (Bloomberg View) Apr 3, 2021
A look at centuries of scourges shows the unpredictable impacts that often take years to reveal themselves.

The Powerful New Financial Argument for Fossil-Fuel Divestment
Bill McKibben (New Yorker) Apr 3, 2021
A report by BlackRock, the world's largest investment house, shows that those who have divested have profited not only morally but also financially.

A riot of US spending spells trouble for future generations
Raghuram Rajan (FT) Apr 4, 2021
Useful infrastructure investment makes better sense than badly designed handouts.

India has key first-mover edge on China in Iran
FM Shakil (AT) Apr 4, 2021
When China clinched a massive $400 billion bilateral investment pact with Iran, a 25-year deal that seeks to revive the heavily sanctioned and economically isolated nation, few noted that India was already well-engaged. By the end of May, India will begin full-scale operations in its first foreign port venture at Iran's Chabahar.

Digital currencies are the future in Asia
Gordon Clarke and Emir Hrnjic (EAF) Apr 4, 2021
Digital currencies and payments are thriving in Asia. China is leading the world in central bank digital currency deployment along with Cambodia, while Singapore has cautiously positioned itself to be a major player using a different approach.

Biden's Infrastructure Plan Is Good But Needs Work
Bloomberg View Apr 4, 2021
Invest where it counts and get value for money.

Don't Let China Mint the Money of the Future
Niall Ferguson (Bloomberg View) Apr 4, 2021
U.S. policy makers need to wake up to the potential of digital currency and electronic payments and the peril of allowing China to dominate them.

Capital and economic growth in Britain, 1270–1870
Stephen Broadberry and Alexandra de Pleijt (VoxEU) Apr 4, 2021
Little is known about the role of capital in economic growth before the late 19th century. This column provides the first estimates of investment and the capital stock in Britain as far back as 1270. Although important changes did occur in the role of capital, such as the growing importance of fixed capital relative to working capital and a substantial increase in the investment share of GDP, growth accounting analysis shows that productivity growth was more important than capital deepening in explaining the growth of output per head.

IMF's spring meetings lack ambition for a world in crisis
Mark Lowcock (FT) Apr 5, 2021
Countries risk a 'dangerous divergence' in economic fortune unless more is done to help.

China rising across the Middle East
Jonathan Gorvett (AT) Apr 5, 2021
Shaking hands and signing deals from Abu Dhabi to Ankara, Tehran to Riyadh, Chinese Foreign Minister Wang Yi's recent Middle Eastern tour once again demonstrated China's growing influence in the region. The visits may have had more to do with a country many miles from the region: the United States.

Hong Kong's economic transparency looks to be the next victim of Chinese authoritarianism
WP Apr 5, 2021
China targets a government registry of companies' true owners.

Funding the Recovery of Low-income Countries After COVID
Guillaume Chabert, Robert Gregory, and Gaelle Pierre (IMF) Apr 5, 2021
The needs of the poorest countries over the next five years are acute. But they are not out of reach.

How Rising Interest Rates Could Affect Emerging Markets
Philipp Engler, Roberto Piazza and Galen Sher (IMF) Apr 5, 2021
Our research in the latest World Economic Outlook finds that for emerging markets, what matters is the reason for the rise in US interest rates.

The Case for Bold Debt Relief for the Poorest Countries
Mohamed Aly El-Erian (Bloomberg View) Apr 5, 2021
The growing risk of debt crises in the developing world threatens to hamper the global recovery from Covid-19.

Markets Can't Process This '60s-Style Recovery
John Authers (Bloomberg View) Apr 5, 2021
Investors active today have never personally experienced an environment like this. That creates a serious risk of errors.

How Saudi Arabia Can Thrive in a Post-Oil World
vDavid Fickling (Bloomberg View) Apr 5, 2021
The country has a surprising amount to gain in a low-carbon future, while staying on the current path could become a question of survival.

Some of China's Grand Plans Have Gotten a Little Smaller
Anjani Trivedi (Bloomberg View) Apr 5, 2021
The country's latest five-year plan has humbler ambitions like building 5G network stations and investing in basic science research. It's a better strategy.

The Post-Pandemic Safety Net
Jorge G. Castañeda (Project Syndicate) Apr 5, 2021
The coronavirus pandemic has sparked a rebirth of Keynesianism and the welfare state in Western Europe, Japan, Canada, and parts of Latin America, and changed the terms of US debate in ways that previously seemed almost unthinkable. Three examples show how the narrative is changing.

The Global Economy's Uneven Recovery
Eswar Prasad (Project Syndicate) Apr 5, 2021
While the US, China, and other leading economies are on their way to a robust recovery, many others are struggling to return to pre-pandemic GDP levels. In most regions, including Europe and Latin America, the 2020 recession will most likely leave long-lasting scars on both GDP and employment.

A COVID Counterfactual for Europe
Yanis Varoufakis (Project Syndicate) Apr 5, 2021
Understanding why the European Union will emerge from the pandemic weaker rather than stronger may prove to be a source of gloom. But recognizing what might have been could also serve as a springboard for change.

Africa's Trade Revolution Needs Peace
Hippolyte Fofack (Project Syndicate) Apr 5, 2021
Rebalancing Africa's security and development objectives is a daunting task. But it is one that political leaders must seize with both hands in order to realize the enormous potential of the African Continental Free Trade Area.

Defining emerging market cities using lights at night
Jonathan Dingel, Antonio Miscio, and Donald R. Davis (VoxDev) Apr 5, 2021
Satellite imagery of night-time city lights suggests that agglomeration is skill-biased in Brazil, China, and India, as it is in developed economies

Quantitative easing in emerging market economies
Yasin Mimir and Enes Sunel (VoxEU) Apr 5, 2021
Central banks in emerging economies deployed asset purchases for the first time to respond to the Covid-19 shock. Initial studies have found quantitative easing reduced long-term bond yields in these economies without creating bouts of currency depreciation. This column argues that asset purchases ease financial conditions in emerging economies by curbing capital outflows enabled by stronger bank balance sheets upon the asset intermediation by the central bank. If asset purchases cause a de-anchoring in inflation expectations, their effectiveness diminishes. Counterfactual policy experiments reveal that bond yield reductions from asset purchases during the pandemic could have persisted only under large-sized programmes that are representative of advanced economies.

Nobody Knows What Lebanon's Currency Is Worth Anymore
Anchal Vohra (FP) Apr 5, 2021
In Lebanon's absurd economy, money's value depends on whom you ask.

Could Index Funds Be 'Worse Than Marxism'?
Annie Lowrey (Atlantic) Apr 5, 2021
Economists and policy makers are worried that the Vanguard model of passive investment is hurting markets.

The End of Development
Tim Barker (Dissent) Apr 5, 2021
Discussion in the United States about secular stagnation, a long-term tendency toward weak business investment and slow growth, has mostly focused on wealthy countries. But slowing growth around the world cannot be explained as the sign of economic "maturity."

Why schools are central to recovery in developing countries
David Moinina Sengeh and Jacob Jusu Saffa (FT) Apr 6, 2021
Invest now to protect the vulnerable, say Sierra Leone's schools and finance ministers.

The high threshold for further Fed intervention
Colby Smith (FT) Apr 6, 2021
Central bank unlikely to wade deeper into unconventional waters of support.

Central banks should not target house prices
Robin Harding (FT) Apr 6, 2021
The idea has won support, especially in New Zealand, but there are better ways to make housing more affordable.

The pandemic has been a bane for bankruptcies
Claire Jones (FT) Apr 6, 2021
Beware, zombies!

A K-Shaped Recovery, This Time on a Global Scale
Alan Rappeport and Jeanna Smialek (NYT) Apr 6, 2021
Emerging markets are at risk of falling far behind their advanced counterparts. That's the whole world's problem, officials warned.

The EU-China investment deal may be anachronic in a bifurcating world
Alicia García-Herrero (Bruegel) Apr 6, 2021
Ultimately, only time will tell if this landmark trade agreement will be productive and counter the potential bifurcation of international value chains.

Europe's Halfway Banking Reforms Have Run Out of Time
William R Rhodes and Stuart P M Mackintosh (Bloomberg View) Apr 6, 2021
Scandals and failures will continue to plague the sector until it completes the unified regulation it promised more than a decade ago, including deposit insurance similar to that of the U.S.

Brazil, India, and China have reduced tariffs since 2000, approaching US and EU rates
Robert Z. Lawrence (PIIE) Apr 6, 2021
Trade specialists in the Trump administration routinely accused US trading partners of protecting their markets with high tariffs, putting US exporters at a disadvantage. This complaint had some merit in 2000—when tariffs in large emerging markets were more than five times higher than US tariffs. But it is out of date, overlooking the liberalization that occurred between 2000 and 2018.

Managing Divergent Recoveries
Gita Gopinath (IMF) Apr 6, 2021
Recoveries are diverging dangerously across and within countries.

An Asynchronous and Divergent Recovery May Put Financial Stability at Risk
Tobias Adrian (IMF) Apr 6, 2021
Global markets are watching the current rise of US long-term interest rates.

Biden's Child Tax Credit Has a Fatal Flaw
Michael R Strain (Bloomberg View) Apr 6, 2021
Sending households monthly checks could transform a poverty-fighting measure into a middle-class boondoggle.

SPACs Aren't the Only Examples of Late Capitalism
Jared Dillian (Bloomberg View) Apr 6, 2021
Excesses throughout the financial system raise the odds that the next recession could be our last as a free-market economy.

Will the Boom Last?
Jim O'Neill (Project Syndicate) Apr 6, 2021
After last year's economic collapse, the prospects for a strong cyclical recovery have always been strong. And judging by a series of must-watch high-frequency indicators, the long-awaited boom has arrived and seems likely to continue building – at least in the near term.

Global Financing to End the Pandemic
Jeffrey D. Sachs (Project Syndicate) Apr 6, 2021
A new allocation of up to $650 billion worth of the IMF's reserve asset, special drawing rights, would ensure that governments have the means to combat the coronavirus pandemic and start on the path of investment-led recovery. We must seize this critical opportunity to cooperate effectively for the sake of humanity.

Efficient carbon pricing under uncertainty
Christian Gollier (VoxEU) Apr 6, 2021
Any global temperature target must be translated into an intertemporal carbon budget and an associated cost-efficient carbon price schedule. This column uses an intertemporal asset-pricing approach to examine the impact of uncertainties surrounding economic growth and abatement technologies on the dynamics of efficient carbon prices. It finds evidence of a positive carbon risk premium and suggests an efficient growth rate of expected carbon prices of around 4% plus inflation. This is lower than the growth rates found in many public reports and integrated assessment models, and justifies a higher carbon price today in order to satisfy the carbon budget.

The uneven road to Covid recovery
FT View Apr 7, 2021
IMF says stimulus has limited medium-term impact in rich countries.

Rethinking Supply Chains
FT Reports Apr 7, 2021
From the US-China trade war, to Brexit, to pandemic-led delays to manufacturing and shipping, the global supply chain is firmly in the spotlight. How is the business of trade adapting in a changing world?

US inflation fears grow as bond turmoil continues
John Redwood (FT) Apr 7, 2021
I'm staying away from conventional fixed income for fear of rising yields.

US signals it still depends on cheap oil from abroad
Derek Brower (FT) Apr 7, 2021
Energy secretary seeks to persuade Saudi Arabia to keep lid on crude prices.

How the US can stimulate private investment in cutting carbon
Brad Handler (FT) Apr 7, 2021
The federal government has levers to pull to enable transition.

How Debt and Climate Change Pose 'Systemic Risk' to World Economy
Somini Sengupta (NYT) Apr 7, 2021
With dozens of countries struggling to manage both staggering debt and mounting climate disasters, some financial leaders are calling for green debt relief.

The pandemic has shown that workers in the informal economy need a safety net, too
Christopher Sabatini (WP) Apr 7, 2021
These workers not only bore the brunt of the covid lockdown measures, but they also were largely left behind by the stimulus packages.

What's more important than slashing child poverty?
E.J. Dionne (WP) Apr 7, 2021
Biden's improvements to the child tax credit should be made permanent.

How Can We Reimagine Capitalism?
Rebecca Henderson (BRINK) Apr 7, 2021
Many thinkers believe that COVID-19, inequality and climate change have brought the capitalist system to a turning point. To keep the system alive, major changes are needed: Reimagining capitalism as a whole will require action from all sectors of our society, including government and civil society.

Are Multilateral Development Banks Doing Enough to Close the COVID Gender Gap?
Megan O'Donnell (CGD) Apr 7, 2021
Are donors like the World Bank and other regional development banks doing enough to close the gender gaps exacerbated by the pandemic?

Tailoring Government Support
Vitor Gaspar, W. Raphael Lam, Paolo Mauro, and Mehdi Raissi (IMF) Apr 7, 2021
The sooner vaccinations curb the pandemic, the faster economies can return to normal.

America's Depleted Industrial Base Is a National Security Crisis
Bloomberg View Apr 7, 2021
The U.S. needs to fix vulnerabilities in the military's supply chain and build a more capable manufacturing workforce.

Should PayPal Be Worried About Your Country's Central Bank?
Andy Mukherjee (Bloomberg View) Apr 7, 2021
Digital currency issued by nation states may cut out the middleman. But would that change the world for the better — or the worse?

Who's Afraid of the Big Bad Economic Boom?
Daniel Moss (Bloomberg View) Apr 7, 2021
There's too much whining about the super-strong recovery. You don't get a spurt like this without a few bruises.

China's Economic Self-Harm
Minxin Pei (Project Syndicate) Apr 7, 2021
China's antagonistic response to concerns over the use of forced labor in Xinjiang suggests that its leaders believe that the Chinese market is simply too lucrative for Western firms or governments to abandon. They may be overplaying their hand.

This Bank Regulation Is Undermining the Recovery
William C Dudley (Bloomberg View) Apr 7, 2021
Modifying the leverage ratio would be safe and sensible.

How to Tell What's Infrastructure and What Isn't
Karl W Smith (Bloomberg View) Apr 7, 2021
The Biden administration's plan to expand the definition risks undermining support for some worthy projects.

Intel's Plan to Win Big in Chips Is Full of Big Risks
Tae Kim (Bloomberg View) Apr 7, 2021
Despite the fanfare over its grand ambitions to become a heavyweight in making chips, the semiconductor giant faces long odds in rivaling TSMC.

Nigeria's Oil Curse Could Become an Opportunity
David Fickling (Bloomberg View) Apr 7, 2021
Its output was never big enough to spark a Middle East-style economic miracle. That gives renewable power an opening.

Indonesia's Jokowi Wants Growth. And Something More
Andy Mukherjee (Bloomberg View) Apr 7, 2021
The president's leadership will be defined by the decisions he makes shaping the climate destiny of Southeast Asia.

A New Deal for Informal Workers
Marty Chen (Project Syndicate) Apr 7, 2021
A program of relief, recovery, and reform for informal workers is vital in order to challenge the racial and economic injustices exposed and exacerbated by the COVID-19 crisis. This program should start with two fundamental commitments that do not require significant financial resources, but rather a change in mindset.

The Productivity Consequences of Pollution-Induced Migration in China
Gaurav Khanna, Wenquan Liang, Ahmed Mushfiq Mobarak, and Ran Song (VoxChina) Apr 7, 2021
Severe air pollution induces workers to move from productive to unproductive regions, reducing their contribution to the aggregate productivity in China. In this paper, we quantify the productivity and welfare consequences of this important new pattern of migration. We find that the productivity losses from pollution through the indirect migration channel are approximately as much as the direct health costs of pollution.

Partisan politics and macroeconomic policy in economic unions
Gerald Carlino, Thorsten Drautzburg, Robert Inman, and Nicholas Zarra (VoxEU) Apr 7, 2021
The allocation of COVID-19 assistance under the American Rescue Plan has proven to be a point of significant partisan conflict between the Democratic administration and Republican governors. Motivated by partisan conflicts in the passage and implementation of the American Recovery and Reinvestment Act, this column suggests that the resolution of these disagreements will have significant consequences for the overall impact of the American Rescue Plan on the aggregate economy.

Populism, bureaucratic expertise, and government performance
Luca Bellodi, Massimo Morelli, and Matia Vannoni (VoxEU) Apr 7, 2021
Populism is once more becoming a dominant feature of the political landscape in many countries, but little is known about its consequences for the quality of government. Using Italian municipal-level data, this column shows that populism has a negative impact on bureaucratic expertise and government performance, ultimately to the detriment of society and the economy.

Joe Biden's infrastructure plan is much more than that
FT View Apr 8, 2021
The US president is undertaking a wide programme of reform.

A step forward on global corporation tax reform
FT View Apr 8, 2021
US proposal to break deadlock should be embraced by Europe.

Inflation might be the way out of the debt crisis
Pascal Blanqué (FT) Apr 8, 2021
Investors should prepare for rising prices with a shift into value stocks.

Blockchain may change equities trading for good
Gillian Tett (FT) Apr 8, 2021
It allows for faster and safer settlement than the current monopolistic clearing houses.

Beijing's be-careful-what-you-wish-for dilemma
William Pesek (AT) Apr 8, 2021
As 2021 heats up, China is grappling with what might be seen as an enviable problem: more foreign capital zooming its way than Asia's biggest economy knows what to do with. With steady efforts to open the financial system in recent years, President Xi Jinping certainly put out the welcome mat.

How Lazada lost out in SE Asia's e-commerce race
Frank Chen (AT) Apr 8, 2021
The tense rivalry between China's largest tech juggernauts Alibaba and Tencent is also shaping the e-commerce landscape across Southeast Asia. While Alibaba is still unrivaled by other online marketplaces at home, it is losing its primacy in the sprawling and fast-growing Southeast Asian markets.

Financial Cooperation Can Help Fight the Pandemic
Bloomberg View Apr 8, 2021
Governments and the IMF have improvised to good effect — but they should be more ambitious.

US economic sanctions against human atrocities in China and Myanmar
Gary Clyde Hufbauer and Euijin Jung (PIIE) Apr 8, 2021
Two humanitarian crises in Asia are confronting President Joseph R. Biden Jr. with a dilemma that has frustrated many previous administrations and indeed the international community as a whole: how to impose effective sanctions on countries that commit genocide or equivalent atrocities. In one case, the Biden administration is contemplating stiffer sanctions against Myanmar, partly in response to the military coup in February 2021 and genocide against the Rohingya Muslim minority in the western state of Rakhine, which has been going on for several years. The other case is China's persecution of the Uyghur Muslim minority in the western province of Xinjiang.

Myanmar's Young Demand Their Future
Achim Steiner (Project Syndicate) Apr 8, 2021
After decades of "closed-door" policies that transformed Myanmar from one of Asia's most promising economies to one of its worst performers, a decade of democratization had given the country's young people a glimpse of a brighter future. They will not soon stand by and let it be snatched away.

Emerging Markets Need a Savior. It's Not the Fed
John Authers (Bloomberg View) Apr 8, 2021
America, underpinned by easy monetary policy, is helping by buying more and blowing out the trade deficit. That won't be enough if China throttles back.

Europe's Complacency Trap
Brigitte Granville (Project Syndicate) Apr 8, 2021
Members of the EU establishment should not read too much into failures of "populist" governance. Until the bloc can devise institutional arrangements that allow for consistent, equitable growth, crises will keep coming – and so will anti-establishment challengers.

Exchange rate pass-through, monetary policy, and real exchange rates
Sebastian Edwards and Luis Cabezas (VoxEU) Apr 8, 2021
The nominal exchange rate plays a dual role in macroeconomic adjustments – it is part of the transmission mechanism of monetary policy, and it also helps accommodate external and domestic shocks through its effect on the real exchange rate. This column uses disaggregated price index data from Iceland to test how exchange rate pass-through varies with the international tradability of goods and with the monetary policy framework. It shows that pass-through is significantly higher for tradables relative to nontradables. In addition, it finds that improvements in the credibility of the central bank are associated with declines in the exchange rate pass-through.

Central bank swaps in the age of Covid-19
Joshua Aizenman, Hiro Ito, and Gurnain Kaur Pasricha (VoxEU) Apr 8, 2021
Facing acute strains in the offshore dollar funding markets during Covid-19, the Federal Reserve implemented measures to provide US dollar liquidity. This column examines how the Fed reinforced swap arrangements and established a 'financial institutions and monetary authorities' repo facility in response to the crisis. Closer pre-existing ties with the US helped economies access the liquidity arrangements. Further, the announcements of the liquidity expansion facilities led to appreciation of partner currencies against the dollar, as did US dollar auctions by foreign central banks.

How high-speed rail changes the spatial distribution of economic activity
Kazunobu Hayakawa, Hans Koster, Takatoshi Tabuchi, and Jacques-François Thisse (VoxEU) Apr 8, 2021
The economic and social consequences of investments in transport infrastructure generate heated academic and policy debates because they typically involve costly investments that are supposed to yield high payoffs. Particularly telling examples of large transport infrastructure investments are investments in high-speed rail. This column shows that the Shinkansen has had a substantial effect on Japan's spatial distribution of employment. The relative position of municipalities within the network and their underlying location fundamentals are essential in understanding why the effects of an extensive infrastructure are positive or negative at the local level.

Is the Tide Turning for American Exporters?
Jay Bryson, Shannon Seery, and Sara Cotsakis (WF Econ Group) Apr 8, 2021
Robust global economic growth should boost U.S. exports significantly this year.

Geography, transportation, and endogenous trade costs
Giulia Brancaccio, Myrto Kalouptsidi, and Theodore Papapgeorgiou (Micro Insights) Apr 8, 2021
Whether by sea, land or air, the entirety of trade is carried out by the transportation sector. We know surprisingly little, however, about the role of transportation in shaping trade networks. How do transport markets interact with the markets for world trade in goods? How does the behavior of profit-maximizing transport agents influence transport costs, and thus global imports and exports?

Shoppers are paying high prices for closing borders
John Gapper (FT) Apr 9, 2021
From Brompton bicycles to Indian air conditioners, the world's consumers face a supply shock.

Biden's global corporate tax plans are brave and bold
DeAnne Julius (FT) Apr 9, 2021
Proposed global minimum rate could release large economic gains and help reduce popular distrust.

The Comeback of the Bottom Half
Justin Fox (Bloomberg View) Apr 9, 2021
Yes, they've got a long way to go to recover lost ground. But the improving financial strength of the less-affuent 50% of U.S. households is still a big deal.

Defining 'Infrastructure' Is a Nonsense Argument
Noah Smith (Bloomberg View) Apr 9, 2021
The chattering class is getting distracted by a meaningless question when Biden's primary task is to build a better country.

India's Central Bank Says 'Boo.' Carry Traders Faint
Andy Mukherjee (Bloomberg View) Apr 9, 2021
The currency market saw a bond-buying and money-printing move as detrimental to bets on the rupee. But did the RBI have different intentions?

Bitcoin Is Displacing Gold as an Inflation Hedge
John Authers (Bloomberg View) Apr 9, 2021
The digital asset's increasing scale has made it a more viable competitor to the traditional protector against currency debasement.

Argentina Can't Afford to Delay Economic Reforms
Mac Margolis (Bloomberg View) Apr 9, 2021
By dragging out negotiations with the International Monetary Fund until after midterm elections this fall, it risks derailing economic recovery.

How the Fed Could Go Green Faster
Megan Greene (Project Syndicate) Apr 9, 2021
Now that the US Federal Reserve has begun to speak more openly about climate change, it should take a hard look at the tools that it already has available for making a dent in the problem. What it will find is that some green monetary policies serve both the environment and the economy.

The Challenge of Big Tech Finance
Barry Eichengreen (Project Syndicate) Apr 9, 2021
In an old parable about banks and regulators, the banks are greyhounds – they run very fast – while the regulators are bloodhounds, slow afoot but faithfully on the trail. In the age of the platform economy, the bloodhounds are at risk of losing the scent.

How to Stop the Poverty Pandemic
Lindsay Coates and John Floretta (Project Syndicate) Apr 9, 2021
Experience shows that innovative and evidence-based approaches, when executed well, can dent poverty. With the COVID-19 pandemic threatening to reverse hard-won global gains, the need for policy-relevant research, and for scaling effective solutions, has never been more urgent.

Biden Must Fix the Future, Not the Past
Dani Rodrik (Project Syndicate) Apr 9, 2021
The US administration's proposed $2 trillion infrastructure package could transform the US and set an important example for other developed countries to follow. But to achieve its potential, the plan must avoid misleading state-versus-market dichotomies and outdated Cold War tropes.

The Geography of Pandemic Effects
Robert Muggah (Project Syndicate) Apr 9, 2021
After a year in which COVID-19 has suspended normal life as we once knew it, it is important to take stock of the big picture. Only by understanding which developments will prove permanent, and which fleeting, can we begin to make smart decisions for managing the aftermath of this historic crisis.

Measuring human capital: Learning matters more than schooling
Noam Angrist, Simeon Djankov, Pinelopi Goldberg, and Harry Patrinos (VoxEU) Apr 9, 2021
Human capital is a critical component of economic development. But the links between growth and human capital – when measured by years of schooling – are weak. This column introduces a better measurement, using a database that directly measures learning and represents 98% of the global population. The authors find that the link between economic development and human capital is strong when measured in this way. They also show that global progress in learning has been limited over the past two decades, even as enrolment in primary and secondary education has increased. Human capital is a critical component of economic development.

Markets test how far to price in an economic boom
Michael Mackenzie (FT) Apr 10, 2021
Bonds and equities signal different views on growth prospects for advanced economies.

The Nope theory to explain volatility in equity markets
Robert Armstrong (FT) Apr 10, 2021
Trader Lily Francus popularises concept for analysing long shadow of options over stocks.

Riding high in a workers' world
Economist Apr 10, 2021
A jobs rebound, shifting politics and technological change could bring a golden age for labour in rich countries

America's boom has begun. Can it last?
Economist Apr 10, 2021
High-frequency economic data suggest it's full steam ahead.

Janet Yellen calls for a global minimum tax on companies. Could it happen?
Economist Apr 10, 2021
Many countries want to link a deal to the trickier issue of taxing rights on profits.

The Future of Digital Currency May Be Chinese
Brooke Sample (Bloomberg View) Apr 10, 2021
China has led the world in electronic payments, and its central bank is pushing forward with its digital-currency plan. The U.S. needs to pay attention.

Immigration Is the Wealthy World's Challenge of the Century
Max Hastings (Bloomberg View) Apr 10, 2021
The global north has a huge stake in improving lives in the global south.

Bangladesh's Long Journey From 'Basket Case' to Rising Star
Salil Tripathi (FP) Apr 10, 2021
But 50 years after independence, an authoritarian turn casts a shadow over the country's future.

Why manufacturing matters to economic superpowers
Rana Foroohar (FT) Apr 11, 2021
Reshoring makes sense for some industries as competition rises between the US and China.

Joe Biden is right. We need human infrastructure spending, too.
Helaine Olen (WP) Apr 11, 2021
As the pandemic showed, our personal infrastructure is on the verge of failure too.

There's a Lot of Unused Oil Stored Up Around the World
Julian Lee (Bloomberg View) Apr 11, 2021
OPEC+ is right to be cautious about increasing oil production.

The Yellen Doctrine Is So Much More Than Corporate Taxes
Daniel Moss (Bloomberg View) Apr 11, 2021
She articulates a broader vision for America in the world that you likely missed if you only paid attention to the news coverage.

Technology will save emerging markets from sluggish growth
Ruchir Sharma (FT) Apr 12, 2021
Digitisation will transform developing countries even as globalisation contracts.

Dollar threatens the emerging markets party
Eva Szalay (FT) Apr 12, 2021
Hopes for a strong recovery in EM currencies persist — just about.

The World Bank should not fund Ethiopia's war in Tigray
Alex de Waal (FT) Apr 12, 2021
Conflict is impoverishing the region and destroying decades of donor-funded projects.

Larry Summers: 'I'm concerned that what is being done is substantially excessive'
Martin Wolf (FT) Apr 12, 2021
Former treasury secretary criticises the scale of Biden's fiscal policy and warns it could lead to overheating and wasted resources

Ready or not, Chinese bonds are going global
William Pesek (AT) Apr 12, 2021
2021 is either the very best or absolute worst moment for China's bond market to go global. The bullish camp points to a US Treasury Department gearing up for an unprecedented borrowing binge as US debt tops US$28 trillion. The bear camp worries that Beijing's control-freak tendencies will collide with an investor class apt to punish wayward governments with higher borrowing costs.

Focused trade agreements can sustain the WTO in time of economic nationalism
Gary Clyde Hufbauer (PIIE) Apr 12, 2021
Despite the slowdown of growth in trade worldwide, the United States has been holding unpublicized discussions with the European Union, Japan, China, Canada, and other countries on specialized trade agreements on single issues like ecommerce. These negotiations are conducted in the World Trade Organization (WTO), which has hosted single-subject accords among a subset of members, known as plurilateral agreements, since the Tokyo Round of Multilateral Trade Negotiations (1974–79).

Europe Is Heading Toward a New Financial Crisis
Bloomberg View Apr 12, 2021
Completing the EU's banking union might be the only way to avoid the dreaded "doom loop."

Did the Fed Shift Policy Lanes at the Wrong Time?
Mohamed Aly El-Erian (Bloomberg View) Apr 12, 2021
It couldn't foresee Covid-19 when it switched from a preemptive to a reactive approach. Now it has to be careful not to overcorrect.

Goldilocks Markets Should Brace for a Testing Week
John Authers (Bloomberg View) Apr 12, 2021
The inflation porridge may seem a little hot, while progress in fighting the pandemic isn't uniformly positive.

Norway's Sovereign Hedge Fund Prepares to Flex Its Muscles
Mark Gilbert (Bloomberg View) Apr 12, 2021
Nicolai Tangen has been in charge of the world's biggest wealth fund since September. He's starting to steer a riskier course.

Boris Johnson Can Limit Brexit's Economic Damage
Therese Raphael (Bloomberg View) Apr 12, 2021
Could the split with the EU actually help fix the U.K.'s productivity gap?

The Uncomfortable Legacy of the 'Washington Consensus'
Daniel Moss (Bloomberg View) Apr 12, 2021
John Williamson's formula for helping Latin America through boom-bust cycles became shorthand for the free-market ideals that ultimately roiled Asia, much to his distress.

Employment in the Platform Age
Jayati Ghosh (Project Syndicate) Apr 12, 2021
Until recently, there had been relatively little discussion of what the rapid growth of digital labor platforms meant for the nature of work and the employment relationship. But an important recent report provides answers to many questions – and raises several more that policymakers and regulators need to address.

Social Capitalism
Edoardo Campanella (Project Syndicate) Apr 12, 2021
The role of social capital became obvious during the pandemic, which has fallen hardest on those countries and communities with the least amount of mutual trust and solidarity. With many of the crisis-era changes in working arrangements likely to persist, social connections will hold the key to future growth.

The G20's Missed Opportunity
Shamshad Akhtar, Ulrich Volz, Moritz Kraemer, and Stephany Griffith-Jones (Project Syndicate) Apr 12, 2021
With dozens of low- and middle-income countries facing debt distress and compounding risks from climate change, continuing to delay inevitable sovereign-debt restructurings will have dire consequences. Despite the growing risks, the G20's response still has not matched the scale of the challenge.

The effect of international scrutiny on manufacturing workers: Evidence from the Rana Plaza collapse in Bangladesh
Laurent Bossavie, Yoonyoung (Yoon) Cho, and Rachel Heath (VoxDev) Apr 12, 2021
The collapse of the Rana Plaza factory building in Bangladesh in April 2013 killed over 1000 workers and injured about 2500. It is widely considered the worst accident in the history of the global garment industry, and the world's worst industrial disaster since the 1984 Bhopal gas tragedy in India. In its aftermath, local and international attention paid to the garment sector intensified, resulting in a series of new policies and changes to the behaviour of retailers...

The Mundell difference
Paul Krugman (VoxEU) Apr 12, 2021
Nobel Laureate Robert Mundell passed away on 4 April 2021. In this column, Paul Krugman describes the evolution of Mundell's contribution to economic thought and policy, from his early pathbreaking models that remain the foundation of modern international macroeconomics to his later views that were more controversial and less influential in the profession. He also offers an explanation of how the man who brought Keynesian analysis to the open economy and highlighted the difficult tradeoffs in creating a currency area could come to be seen as the father of both supply-side economics and the euro.

A Global Minimum Corporate Tax Is a Bad Idea Whose Time Hasn't Come
Joseph W. Sullivan (FP) Apr 12, 2021
Janet Yellen's proposal has all but zero chance of success.

Where Is the U.S. COVID-19 Pandemic Headed?
Daniel J. Wilson (FRBSF Econ Letter) Apr 12, 2021
Consumer spending and business operations across the United States have been highly dependent on local conditions related to the COVID-19 pandemic. Current economic forecasts therefore must incorporate projections for where the pandemic is headed. A new econometric model provides county-level and national forecasts of COVID-19 infections. Estimates from the model indicate that population immunity acquired from prior infections is the primary driver of recent declines in new cases. This factor should continue to exert strong downward pressure on new cases in the weeks ahead.

Latin American markets: shot in the arm required
Lex (FT) Apr 13, 2021
Rise in competition from China has cut back EM investor interest in the region.

The EU's stability will again confound its critics
Gideon Rachman (FT) Apr 13, 2021
Despite Covid, the European Union is in better shape politically than the US or UK.

Private lenders to emerging markets face threat
Mohamed El-Erian (FT) Apr 13, 2021
Pressure is increasing on creditors to help avoid debt traps.

Why it's too soon to get your flapper glad rags out
Megan Greene (FT) Apr 13, 2021
Today may have similarities with the Roaring Twenties but remember bust can follow boom.

Taiwan dollar drops with US set to apply currency manipulator tag
Hudson Lockett and Eleanor Olcott (FT) Apr 13, 2021
Biden administration expected to add country to name-and-shame list despite strengthening ties.

After a Strong Crisis Response, Asia Can Build a Fairer and Greener Future
Jonathan D. Ostry (IMF) Apr 13, 2021
Asia is likely to benefit from the US fiscal expansion through trade channels, but could experience financial turbulence or capital outflows if US yields rise faster than markets expect.

One Big Lesson From Brexit's First 100 Days
Bloomberg View Apr 13, 2021
Britain and the EU need to get past the bitterness of their split.

India's Covid Crisis Has a Familiar Culprit
Mihir Sharma (Bloomberg View) Apr 13, 2021
The same government flaws that have long plagued Indian entrepreneurs are now jeopardizing the world's battle to end the pandemic.

The Consumer Price Index Is Not Economic Reality
Stephen Mihm (Bloomberg View) Apr 13, 2021
The nation's leading indicator of inflation has always existed as a creature of politics and power, revised and updated in ways that betray its image.

Valuing Resilience After the Pandemic
Carl Folke (Project Syndicate) Apr 13, 2021
The world's failure to value resilience means that shocks this century will hit harder, be more disruptive, and have longer-lasting impacts. Building resilience requires promoting greater income equality and technological and social innovations that support a sustainable future.

Central Asia's Afghan Route to Prosperity
Djoomart Otorbaev (Project Syndicate) Apr 13, 2021
Two new mega-projects connecting Central and South Asia could transform Eurasian security, significantly increase regional economic activity, and potentially bring peace at last to Afghanistan. But most of the world has so far paid little attention to important recent developments.

China Still Needs Expansionary Economic Policy
Yu Yongding (Project Syndicate) Apr 13, 2021
To consolidate its post-pandemic growth momentum in 2021, China should not be in a rush to exit from expansionary fiscal and monetary policy. The government may have to issue more bonds than planned, and the People's Bank of China may need to implement quantitative easing to facilitate this.

Emerging markets amid US and China cross-currents
Robert Gilhooly, Carolina Martinez, and Abigail Watt (VoxEU) Apr 13, 2021
Emerging markets will be shaped by the US and Chinese policy stances in 2021. This column considers how the latest US fiscal package will interact with China's policy normalisation and concludes that while President Biden's American Rescue Plan should dominate a less expansionary stance in China, the boost to the global economy will be much more modest than one would typically expect. Specifically, the normalisation of goods consumption in developed markets and less import-intensive Chinese growth will curtail global goods trade, a key determinant of emerging market growth.

Covid vaccines show government can be a force for good
Gillian Tett (FT) Apr 14, 2021
Perhaps they mark the moment when the state begins to be seen not just as a problem, but as a solution too.

China's inflation warriors a step ahead of bond bears
William Pesek (AT) Apr 14, 2021
As Western economists brawl about when inflation might flare up, Chinese authorities are beating them to the punch. Beijing is going all-out to damp down price pressures to avoid talk of exported 'Chinese inflation' in trading pits and on parliament floors. This take-no-chances approach on upward price pressures makes for quite a contrast with officials from Washington to Sydney.

China's digital currency is a threat to dollar dominance
Michael Hasenstab (FT) Apr 14, 2021
Beijing's ambitions could spur acceptance of renminbi as main rival to US currency.

China's has a grand carbon neutrality target but where is the plan?
Alicia García-Herrero and Simone Tagliapietra (Bruegel) Apr 14, 2021
China's new long-term targets, to reach peak emissions before 2030 and achieve carbon neutrality by 2060, are yet to be matched with a consistent short-term action plan.

More Europe or less Europe?
Maria Demertzis Date (Bruegel) Apr 14, 2021
Europe is often a ship with multiple captains. The boat moves forward in calm seas, but when the slightest wind puts it off course, it is not easy to steer that boat. It is not so much a question of more Europe rather than less, but of achieving 'one Europe'. A 'more-or-less Europe' is an invitation to go nowhere.

From Vaccines to V-Shaped Recovery in Europe
Alfred Kammer (IMF) Apr 14, 2021
While the pace of vaccination is still slow, an end to the pandemic is in sight.

We Need Green Energy. We Don't Need Green Jobs.
Tyler Cowen (Bloomberg View) Apr 14, 2021
There's no reason renewable technologies have to be labor-intensive. That will only drive up costs and turn off consumers.

The Sensible Border Fix Protectionists Will Hate
Noah Smith (Bloomberg View) Apr 14, 2021
If Biden wants to stop the flood of asylum-seeking immigrants, the U.S. can use tax breaks and trade policy to encourage companies to build factories in Central America.

The Digital Revolution Is Eating Its Young
Mark Esposito (Project Syndicate) Apr 14, 2021
We are facing an acute crisis of technological opportunity and access, owing to an invasive business model that has proven incapable of supporting equity and inclusion. The stakes are high, and the market won't fix the problem.

Is Stagflation Coming?
Nouriel Roubini (Project Syndicate) Apr 14, 2021
Lost in the debate over whether today's ultra-loose fiscal and monetary policies will trigger painful inflation is the broader risk posed by potential negative supply shocks. From trade wars and de-globalization to aging populations and populist politics, there is no shortage of inflationary threats on the horizon.

Biden's Great Tax Rebalancing
Daron Acemoglu (Project Syndicate) Apr 14, 2021
US President Joe Biden's plan to overhaul America's outdated and self-defeating corporate-tax structure is as bold as it is necessary. With provisions to level the playing field for workers and end the global race to the bottom, it could revolutionize taxation worldwide, while stemming the increase in US government debt.

Rethinking the EU's Fiscal Framework
Benedicta Marzinotto (Project Syndicate) Apr 14, 2021
Proposed reforms of the European Union's Stability and Growth Pact presuppose the desirability of fiscal discipline in a monetary union, but the arguments for this are weaker than they once were. Policymakers should instead focus on turning the EU's new Recovery and Resilience Facility into a proper counter-cyclical policy tool.

Growing like China: Firm Performance and GVC Position
Davin Chor, Kalina Manova, and Zhihong Yu (VoxEU) Apr 14, 2021
We use firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines. We document a sharp rise in the upstreamness of China's imports, while the positioning of its exports has remained relatively stable, over the 1992-2014 period. Participation in global value chains thus appears to have facilitated an expansion in the scope of production stages undertaken within China. We observe these patterns both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced; at the same time, this is accompanied by a rise in input purchases, value added in production, fixed costs incurred, and profits.

The longer-term impact of the African Growth and Opportunity Act
Ana Fernandes, Alejandro Forero, Hibret Maemir, and Aaditya Mattoo (VoxEU) Apr 14, 2021
Under the African Growth and Opportunity Act in 2001, the US allowed duty-free entry of apparel products from eligible African countries. However, the end of the Multi-Fiber Arrangement in 2005 re-exposed African countries to significant international competition from Asia. This column finds that countries in Southern Africa and firms in Kenya that boomed during the period of high initial trade preferences went bust when the Multi-Fiber Arrangement expired. Subsequent growth was driven by new countries, notably Ethiopia, and by new firms in Kenya. These results are consistent with the complementary role of domestic reforms rather than the 'infant industry' benefits of trade preferences alone.

A solution to the mystery of excess trade balances
Gabriel Felbermayr and Yoto Yotov (VoxEU) Apr 14, 2021
Whether or not large bilateral trade imbalances are a signal of non-reciprocal (or 'unfair') trade costs has been the subject of debate for some time, and was brought to the fore during President Trump's time in office. This column argues that if the trading partners' average trade costs with the whole of the world are taken into account, then the 'unfair trade' argument does not hold up. Using standard gravity modeling, the authors find that up to 88% of the variance in bilateral balances can be explained without making any reference to asymmetries in bilateral trade costs.

Loose monetary policy is today's biggest market risk
John Plender (FT) Apr 15, 2021
Explosive growth in debt has severely curtailed central banks' freedom of action.

EU fund gives 'Greece 2.0' chance to reset economic model
Eleni Varvitsioti (FT) Apr 15, 2021
Brussels to scrutinise Athens' rebuilding plan in wake of financial crises and pandemic.

Oil companies are now a more complex foe for environmentalists
Anjli Raval (FT) Apr 15, 2021
Scrutiny of fossil-fuel producers also has to be more nuanced.

Forget identity politics: economics is what matters now
Simon Kuper (FT) Apr 15, 2021
Government spending is the new battlefield for climate change and US racial justice.

Biden's Country-by-Country Tax Canard
WSJ Apr 15, 2021
His idea for taxing overseas profits is too much even for Europe.

Andrew Yang Hasn't Done the Math
Paul Krugman (NYT) Apr 16, 2021
Was his economic story too good to check?

Can customs union members negotiate bilateral free trade agreements? Yes, with caution.
Anabel González (PIIE) Apr 15, 2021
The trade bloc known as Mercosur has just reached its 30th anniversary, but its members (Argentina, Brazil, Paraguay, and Uruguay) are not in a celebratory mode. Long-standing divergent views on the bloc's external trade policy have recently escalated, risking a split between three members that favor entering into free trade agreements (FTA) with third countries and Argentina, which opposes such a move.

China's pursuit of leadership in digital currency
Martin Chorzempa (PIIE) Apr 15, 2021
Should the United States be worried about China's leadership in fintech and efforts to launch a central bank digital currency (CBDC) version of the RMB? It should not, and the Federal Reserve and Treasury are right to proceed cautiously, to get any digital currency plans "right" instead of "first."

Six Charts Show the Challenges Faced by Sub-Saharan Africa
Abebe Aemro Selassie and Shushanik Hakobyan (IMF) Apr 15, 2021
The economic cost of the pandemic for sub-Saharan Africa is unprecedented, and the region continues to grapple with the pandemic.

Short-term Shot and Long-term Healing for Latin America and the Caribbean
Alejandro Werner, Takuji Komatsuzaki, and Carlo Pizzinelli (IMF) Apr 15, 2021
The region's contraction of 7 percent in 2020 was the sharpest in the world.

How Japan Can Lead in Asia
Bloomberg View Apr 15, 2021
The U.S.'s best friend in the region seems willing to do more, and should.

Labor, Not Lumber, Will Drive Inflation
Conor Sen (Bloomberg View) Apr 15, 2021
As supply catches up to demand, higher prices for commodities will probably subside. That's not necessarily so for service worker wages.

Turkey's Erdogan Is Made to Wait for Cherished Rate Cut
Daniel Moss (Bloomberg View) Apr 15, 2021
The president's removal of Naci Agbal made it harder for his central bank successor, Sahap Kavcioglu, to loosen policy.

$877 Billion in Checks Won't Automatically Fuel Inflation
Lisa Abramowicz (Bloomberg View) Apr 15, 2021
Helicopter money succeeded in plugging a gap in lost business from the pandemic, but it's harder to see how it alone could lead to a sustained period of surging prices.

China Cracks the Trillion-Dollar EV Question
Anjani Trivedi (Bloomberg View) Apr 15, 2021
The key to wider electric-vehicle adoption is infrastructure investment. Washington could learn a thing or two from Beijing.

The G7 Must Act to Vaccinate the World
Gordon Brown, Winnie Byanyima, Tedros Adhanom Ghebreyesus, Graça Machel, Ken Ofori-Atta, Mary Robinson, and Kevin Watkins (Project Syndicate) Apr 15, 2021
The world's richest countries are failing to champion the global cooperation needed to defeat the pandemic. At June's G7 summit in the United Kingdom, leaders must agree on a financial plan to underpin international collaboration on COVID-19, starting with equitable access to vaccines.

Build Back the State
Mariana Mazzucato (Project Syndicate) Apr 15, 2021
In promising to "build back better" from the pandemic, US President Joe Biden has certainly struck the right note. But to succeed, he will need to forge a new social contract, drawing on the lessons of a previous era when the US state led a program that is still paying economic dividends.

A Commonsense Corporate Tax
Alan J. Auerbach (Project Syndicate) Apr 15, 2021
In its efforts to generate more revenue to fund a massive infrastructure spending package, US President Joe Biden's administration is seeking to add more red tape to a corporate tax regime that already has too much of it. Fortunately, there is a perfectly sensible alternative.

Inflation in the aftermath of wars and pandemics
Kevin Daly and Rositsa D. Chankova (VoxEU) Apr 15, 2021
The economic consequences of Covid-19 are often compared to a war, prompting fears of rising inflation and high bond yields. However, historically, pandemics and wars have had diverging effects. This column uses data extending to the 1300s to compare inflation and government bond yield behaviour in the aftermath of the world's 12 largest wars and pandemics. It shows that both inflation and bond yields typically rise in wartime but remain relatively stable during pandemics. Although every such event is unique, history suggests high inflation and bond yields are not a natural consequence of pandemics.

Bets on coronavirus recovery may come good
FT View Apr 16, 2021
Stimulus and vaccines have helped but investors should be wary of a false dawn.

Wall Street banks are pulling ahead of the Europeans again
Gillian Tett (FT) Apr 16, 2021
By comparison, this week's crypto-mania is almost a side show.

Corporate Europe's under-appreciated comeback
Haim Israel (FT) Apr 16, 2021
From the land of autos, fossil fuels and tobacco has emerged a new series of high-growth companies.

Rosie Could Be a Riveter Only Because of a Care Economy. Where Is Ours?
Anne-Marie Slaughter (NYT) Apr 16, 2021
The men and women who went to work and war during World War II were backed by a care economy. We need one too.

Biden, Suga should prioritize Indo-Pacific digital trade deal
Tami Overby and Kai Abe McGuire (AT) Apr 16, 2021
US President Joe Biden and Japanese Prime Minister Yoshihide Suga will meet in Washington on Friday as both the United States and Japan show the world that alliances are back. But despite touting the US-Japan alliance as the cornerstone of peace and security in the Indo-Pacific, both countries walk a fine line when it comes to trade.

The Interesting Case of the Zaïre—the Question MMT Cannot Answer
Eric Nies (Mises Wire) Apr 16, 2021
The case of the zaïre currency in the Democratic Republic of the Congo provides strong anecdotal evidence discounting the fiat currency–obsessed modern monetary theory.

Currency manipulation rebounded in 2020 as pandemic concerns rose
Joseph E. Gagnon and Madi Sarsenbayev (PIIE) Apr 16, 2021
Currency manipulation, the policy by which countries weaken their currencies to boost their trade surpluses, rebounded last year after several years of quiescence, and part of the explanation seems to lie in the COVID-19 pandemic. The pandemic sparked capital flows out of developing economies into advanced economies. The renewed currency manipulation largely reflects an attempt to divert the flows to the largest advanced economies, especially the United States.

A COVID-19 Recovery Contribution
Vitor Gaspar, Michael Keen, Alexander Klemm, and Paolo Mauro (IMF) Apr 16, 2021
Public sentiment may be shifting in favor of more progressive taxation.

China Takes a Piggyback Ride Up Growth Mountain
Daniel Moss (Bloomberg View) Apr 16, 2021
This record rebound wasn't built entirely from scratch. Look past the impressive headlines and some vulnerabilities emerge.

Boom Times Are Coming, If Only You Can Wait
Brooke Sutherland (Bloomberg View) Apr 16, 2021
Industrial companies are on the verge of a big growth spurt, but it won't come without some growing pains first.

Britain's Benefit Madness
Robert Skidelsky (Project Syndicate) Apr 16, 2021
Work is the ultimate escape from poverty. But the futile sort demanded by the United Kingdom's income-support scheme puts many of society's weakest members on a path to nowhere, because it reflects a welfare ideology that fails to distinguish fantasy from reality.

The Changing Climate of Central Banking
Isabelle Mateos y Lago (Project Syndicate) Apr 16, 2021
In the space of just a few years, the idea that central banks should incorporate climate considerations into their policies has gone from sounding radical to seeming like plain common sense. In fact, the overriding risk is that central banks will do too little to address climate change, rather than too much.

Are We Risking a Debt Pandemic?
Wolfgang Schäuble (Project Syndicate) Apr 16, 2021
The prospect of recovery from the COVID-19 crisis makes it all the more urgent to have a firm vision of how the burden of public debt can be reduced once the coronavirus has been vanquished. For this reason, every country must work on itself and strive to maintain budgetary discipline.

Brown assets might be the next subprime
Eric Jondeau, Benoit Mojon, and Cyril Monnet (VoxEU) Apr 16, 2021
The momentum towards greening the economy implies transition risks that represent new threats to financial stability. The risk of a run on brown assets, similar to that seen during the subprime crisis, can have widespread destabilising effects. This column proposes a liquidity backstop with an access fee proportional to carbon emissions, and a borrowing rate independent of emissions. It argues that such a facility will help green the economy, re-establish production efficiency, and avoid highly inefficient runs. An orderly reallocation of capital to a greener economy can lift long-term growth and facilitate the post-Covid recovery.

Urgent reform of the EU resolution framework is needed
Mathias Dewatripont, Lucrezia Reichlin, and André Sapir (VoxEU) Apr 16, 2021
The existing European resolution framework, an essential part of the European banking union, is still largely deficient. National resolution authorities often bypass the European framework, with the result that, since its creation in 2015, the Single Resolution Board has adopted only one resolution decision. This column argues that two aspects of the European resolution framework are particularly in need of reform – the bail-in regime and the resolution mechanism for cross-border banks – and proposes a reform of both.

India's Second Wave
Brendan McKenna (WF Econ Group) Apr 16, 2021
Following months of receding COVID cases, India is currently in the midst of a second wave of infections. Restrictions have been imposed on major cities and a migration out of business hubs is likely to complicate the short-term outlook for India's economy. As a result, it is very likely we will be making downward revisions to our 2021 GDP forecast in our April International Economic Outlook publication. In addition, we maintain our view for gradual rupee depreciation and will only become more pessimistic on the currency if the Reserve Bank of India turns more dovish than we currently expect.

The bright spot in strained bond markets
Michael Mackenzie (FT) Apr 17, 2021
High yield or junk debt rallies sharply on expectations of low default rates.

The spread of the arbitrage economy
John Plender (FT) Apr 17, 2021
Troubles rise as companies exploit the opaque gaps between regulations.

Looking Back at the First Roaring Twenties
Robert J. Shiller (NYT) Apr 16, 2021
To understand where the stock market may be heading, a Nobel laureate examines the pop culture of one of the greatest bull markets in history.

Biden 'Stimulus' Will Deaden Innovation
Alexander William Salter (WSJ) Apr 18, 2021
Keynesians have it backward: Growth is driven by production, not consumption.

The Most Important Number of the Week Is 9.8%
Robert Burgess (Bloomberg View) Apr 17, 2021
Retail sales and other economic measures are surging, so what gives with the bond market?

Income inequality in the EU: Trends and policy implications
Stefano Filauro and Georg Fischer (VoxEU) Apr 17, 2021
Inequality in the EU has traditionally been analysed either at the individual country level or in terms of the average of country trends, but attention is now shifting to the analysis of inequality between all citizens across individual member states. Using income survey data, this column shows that that inequality among EU citizens is significantly lower than among US citizens, but slightly higher than in countries with established welfare models such as Australia and Japan. This and other findings may be useful in identifying the most effective policy path to address inequality at the EU level.

We must help poorer countries tackle climate change
Alok Sharma (FT) Apr 18, 2021
One needed step is to improve their access to the funds that rich countries have pledged to provide.

The US infrastructure most in need of investment is human
Rana Foroohar (FT) Apr 18, 2021
Biden's plan to spend billions on health, home care and education is good economics and politics.

East Asia leads e-commerce and the digital trade revolution
Homi Kharas and Meagan Dooley (EAF) Apr 18, 2021
East Asian economies are famous for delivering growth with equity and for their export orientation, as reflected today in their participation in global and regional value chains. In a world that continues to live with COVID-19, these features are likely to become more important.

Oil Markets Are a Long Way From Back to Normal
Julian Lee (Bloomberg View) Apr 18, 2021
Vaccine setbacks, virus variants and the new hassles involved in air travel mean it's too early to be too optimistic about a rebound in demand.

The Post-Covid Economy Is Coming Into Focus
Brooke Sample (Bloomberg View) Apr 18, 2021
Life after the pandemic feels so close we can almost taste it. Don't spend all your money just yet, though.

Revival of bonds as buffer for market shocks
Katie Martin (FT) Apr 19, 2021
After a steep sell-off, the protection that Treasuries offers investors is back again.

US inflation isn't coming – it's already here
David P. Goldman (AT) Apr 19, 2021
Real US consumer price inflation is running at about 4% a year, well above the Federal Reserve's 2% target and far higher than the 2.7% year-on-year increase reported for April and reflected in the yields of short-term inflation-indexed US Treasury securities. That's due to a quirk of US inflation measurement, which includes home price inflation with a one- to two-year lag.

The United States has been disengaging from the global economy
Simeon Djankov, Tianlei Huang, Euijin Jung, Michael Kister, Hexuan Li, Adam S. Posen, Madi Sarsenbayev, David Xu, and Eva (Yiwen) Zhang (PIIE) Apr 19, 2021
The United States' openness to the global economy can be measured by the cross-border flows of goods and services (trade); of capital (foreign direct investment and other types of financial assets); and of people (immigration).[1] By some of the most central measures, depicted in the figures below, US disengagement from globalization has been significant, particularly in comparison to the general trend in and behavior of other large high-income democracies. Former President Donald J. Trump may have pursued that decoupling with his policies discouraging offshoring of US manufacturing and imposing tariffs on imports. But the trend of US deglobalization began with US administrations well before Trump took office in 2017.

Poverty and fragility: Where will the poor live in 2030?
Jasmin Baier, Marina Buch Kristensen, and Søren Davidsen (Brookings) Apr 19, 2021
The world is experiencing a tipping point in its fight against poverty. By 2022, more than half of the world's people living in extreme poverty will be living in fragile states, according to projections by World Data Lab. There are currently 39 fragile states that the World Bank classifies as "countries with high levels of institutional and social fragility" and "affected by violent conflict." They are home to almost 1 billion people, 335 million of which lived in extreme poverty in 2020. Projections by the World Data Lab's World Poverty Clock suggest that by 2030, there will be 359 million people living in extreme poverty in today's fragile states, representing 63 percent of the world's poor (see Figure 1). This means that while most stable countries can anticipate the end of extreme poverty, more than a third of the population in fragile states will live in extreme poverty.

What Pandemics Mean for Robots and Inequality
Tahsin Saadi Sedik and Jiae Yoo (IMF) Apr 19, 2021
Low-skilled workers are more at risk of displacement by robots than high-skilled workers, which reinforces existing inequality dynamics.

Should Wall Street Brace for a Tobin Tax?
Aaron Brown (Bloomberg View) Apr 19, 2021
A new paper from Nobel laureate George Akerlof — the husband of Treasury Secretary Janet Yellen — provides a powerful clue.

EU's Bond Bonanza Will Reshape the Capital Markets
Marcus Ashworth and Mark Gilbert (Bloomberg View) Apr 19, 2021
The European Union is set to challenge Germany's status as the benchmark borrower in euros.

The Dark-Money Tipping Point
Sheldon Whitehouse and Hank Johnson dd(Project Syndicate) Apr 19, 2021
For years, an orchestrated campaign by powerful corporate interests has sought to rig the US judiciary in its favor. Having largely succeeded, it is now on the verge of securing constitutional protection for its signature method of corruption: dark-money influence operations.

Softer monetary policy increases inequality
Asger Lau Andersen, Niels Johannesen, Mia Jørgensen, and José-Luis Peydró (VoxEU) Apr 19, 2021
Who gains – and by how much ¬– when central banks soften their monetary policy regime is a key policy question. This column discusses new evidence on the distributional effects of monetary policy based on detailed administrative household-level data. The authors show that the gains from lower policy rates exhibit a steep income gradient, with the increases in income, wealth, and consumption modest at the bottom of the income distribution and highest at the top.

EU green finance rules must be politically sustainable
FT View Apr 20, 2021
Investors need a robust guide to climate-friendly businesses.

Legislation needed to tackle Libor legacy problem for millions
Michael Bright (FT) Apr 20, 2021
Congress must act on the only viable solution as benchmark is phased out.

A Global Tipping Point for Reining In Tech Has Arrived
Paul Mozur, Cecilia Kang, Adam Satariano and David McCabe (NYT) Apr 20, 2021
Never before have so many countries, including China, moved with such vigor at the same time to limit the power of a single industry.

Tax Hikes Will Stifle the Recovery
Rob Portman (WSJ) Apr 20, 2021
Biden's proposal would make American companies less competitive overseas, resulting in lost U.S. jobs.

US-China competition not the same as a Cold War
Urban C. Lehner (AT) Apr 20, 2021
During the Cold War, trade between the combatants was minimal. In 1989, a relatively robust year, US-Soviet two-way trade totaled US$5 billion, less than 1% of total US trade. The US imported only $700 million in Soviet goods that year. Thirty years later, the trade numbers with another rival nation are orders of magnitude bigger.

Fourth wave hits Japan at worst possible moment
William Pesek (AT) Apr 20, 2021
"Risks to Japan's recovery are intensifying." So begins the latest Moody's Investors Service report on the global No. 3 economy as it faces coronavirus infection wave No. 4. The timing could hardly be worse as business and household confidence were beginning to show signs of life.

A Future with High Public Debt: Low-for-Long Is Not Low Forever
Marcos Chamon and Jonathan D. Ostry (IMF) Apr 20, 2021
Many countries are experiencing a combination of high public debt and low interest rates.

How Can We Ensure Humans Flourish in an Age of Robots?
Kevin Roose (BRINK) Apr 20, 2021
The COVID-19 pandemic has accelerated automation in many areas of work. Robotic process automation, or RPA, is rapidly replacing a lot of white collar activities, while AI is starting to be used in supervisory positions.

The U.S. Has a Clear Warning for Emerging Markets
Daniel Moss (Bloomberg View) Apr 20, 2021
America once encouraged its trading partners to export their way to prosperity. Judging by the latest Treasury report, that won't be tolerated indefinitely.

Productivity After the Pandemic
Laura Tyson and Jan Mischke (Project Syndicate) Apr 20, 2021
After years of disappointing productivity growth, the COVID-19 pandemic has shaken something loose, with surveys of business executives showing most reporting increased investments in technology. The danger now is that the pandemic-era acceleration of automation and digitalization impedes growth in labor income and consumption.

The Case for Green Consumer Taxes
Mark Cliffe (Project Syndicate) Apr 20, 2021
As the world looks to recover from the COVID-19 pandemic and tackle climate change, progressive consumer taxes on resource-intensive goods could help. Such taxes would fall on the rich more than the poor, and the proceeds could support jobs and investments that would leave the planet better off.

Bridging, not bonding, for regional growth
Jonathan Muringani, Rune Fitjar, and Andrés Rodríguez-Pose (VoxEU) Apr 20, 2021
Social capital matters for economic growth and development, but different types of social capital matter in very different ways. This column examines how differences in social capital across Europe shape regional economic growth. While 'bridging' social capital is linked to higher regional economic growth, 'bonding' social capital leads to lower growth. This is particularly the case in less-developed regions and in regions with a lower endowment of human capital. As the level of education increases, the need for bridging social capital declines, implying that bridging social capital and human capital are, to a certain extent, substitutes.

Accounting for the Great Divergence: Recent findings from historical national accounting
Stephen Broadberry (VoxEU) Apr 20, 2021
As a result of recent work on historical national accounting, it is now possible to establish more firmly the timing of the Great Divergence of living standards between Europe and Asia in the 18th century. This column shows that there was a European Little Divergence as Britain and the Netherlands overtook Italy and Spain, and an Asian Little Divergence as Japan overtook China and India. The Great Divergence occurred because Japan grew more slowly than Britain and the Netherlands starting from a lower level, and because of a strong negative growth trend in Qing dynasty China.

The Resurgence of the Rest
Ruchir Sharma (FA) Apr 20, 2021
Can emerging markets find new paths to growth?

Globalization's Coming Golden Age
Harold James (FA) Apr 20, 2021
Why crisis ends in connection.

The Two Rwandas
Phil Clark (FA) Apr 20, 2021
Development and dissent under Kagame.

Can Trade Work for Workers?
Gordon H. Hanson (FA) Apr 20, 2021
The right way to redress harms and redistribute gains

Economic recovery masks the dangers of a divided world
Martin Wolf (FT) Apr 21, 2021
Nothing would be more foolish than policymakers in rich countries turning away from global challenges.

Central banks need to take action now on climate change
Anne Richards (FT) Apr 21, 2021
Interventions needed to help the transition towards a low-carbon world.

The eurozone is taking the lead in testing the digital currency waters
Martin Sandbu (FT) Apr 21, 2021
Public consultation by the European Central Bank is one step ahead of counterparts but it may face a more sceptical audience.

The EU's future hinges on Italy's recovery fund reforms
Andrea Lorenzo Capussela (FT) Apr 21, 2021
The task is formidable but Mario Draghi has the heavy hand of history resting on his shoulders.

Welcome to Joe Biden's Boom Economy
Alan S. Blinder (WSJ) Apr 21, 2021
The economy is recovering at a rapid clip, thanks in large part to a $5 trillion infusion from the feds.

Say hello to the new multilateral boss
Pepe Escobar (AT) Apr 21, 2021
In times of grave geopolitical trouble, it's up for a true statesman to step up in the global podium and defuse a noxious Cold War 2.0 atmosphere. President Xi Jinping did deliver with his keynote speech at the annual Boao Forum in Hainan, marking his latest appeal for an open global economy and against US-led decoupling.

China's digital yuan displaces the dollar
David P. Goldman (AT) Apr 21, 2021
What Western analysts fail to grasp is that China is not trying to take the place of the United States. Rather, China is creating a new system of world trade and finance that will – as a byproduct – replace the methods of trade financing that have remained in place since the Venetian Republic introduced them in the 13th century.

Is China About to Cap Its Coal Output?
García-Herrero and Simone Tagliapietra (BRINK) Apr 21, 2021
China — the world's largest greenhouse-gas emitter — will make or break the global quest to achieve climate neutrality by the middle of the century. But the country's goal of achieving carbon neutrality by 2060 will not be achieved without major changes, especially with China's continued investments in coal.

How are central bank digital currencies different from other payment methods?
Martin Chorzempa (PIIE) Apr 21, 2021
Currency and payments have already gone digital. A consumer can choose among many digital payment instruments with retailers, including credit cards, app-based payments, or online mechanisms. So what, if anything, is new about central bank digital currencies (CBDCs)?

A Rare Corner of the Markets That Europe Still Controls
Mark Gilbert (Bloomberg View) Apr 21, 2021
European banks have the biggest share of the green bond market. It might not last.

$12.3 Trillion in Stimulus Killed the Debt Default Cycle
Lisa Abramowicz (Bloomberg View) Apr 21, 2021
Almost all fear of bankruptcy has been obliterated from bond markets even though the global economy is still struggling.

Dogecoin Symbolizes the Conundrum Facing Investors
Jared Dillian (Bloomberg View) Apr 21, 2021
As former Citigroup CEO Chuck Prince infamously said, as long as the music is playing, you have to keep dancing.

International Flight Isn't Delayed, Investors Are Just Early
Brooke Sutherland (Bloomberg View) Apr 21, 2021
International and business trips will take time to recover and that shouldn't be a surprise. There are positive some signs, though.

A Digital Yuan Should Be Welcomed by the U.S.
Noah Smith (Bloomberg View) Apr 21, 2021
An app-based international Chinese currency would be good for American exports and the global financial network — which is also why it may never happen.

How Might China Rescue Huarong? Look at What's Left of Bank of Jinzhou
Shuli Ren (Bloomberg View) Apr 21, 2021
China is looking at a 2020 bailout as a restructuring model. But investors shouldn't breathe easy. The PBoC bought Jinzhou assets at a 70% discount.

How a Covid Spike Is Sucking the Oxygen Out of India/A>
Andy Mukherjee (Bloomberg View) Apr 21, 2021
The government wasted a year to prepare for the second wave. Now patients can't breathe.

The Long-Term Costs of Shortcuts in the Semiconductor Crisis
Anjani Trivedi (Bloomberg View) Apr 21, 2021
Companies should be using this time to learn that skimping on investment and relatively minor components will have consequences.

Can Multilateral Cooperation Coexist with Great-Power Rivalry?
Kemal Dervis and Sebastian Strauss (Project Syndicate) Apr 21, 2021
Recent US initiatives concerning new IMF special drawing rights, corporate taxation, and climate change highlight America's renewed support for global cooperation. The big question now is whether multilateralism can work – and how China will respond to these proposals, given rising bilateral tensions.

When distance drives destination, small towns can stimulate development
Luc Christiaensen, Joachim De Weerdt, Bert Ingelaere, and Ravi Kanbur (VoxEU) Apr 21, 2021
Despite potentially greater income gains in big cities, migrants from rural areas in developing countries often move to small towns. This column uses survey data from Tanzania to show that distance drives destination in migration decisions, particularly for the poor and for those with no education. This finding explains the seeming paradox of greater migration to small towns than to big cities, and provides a strong argument for a more balanced orientation of development investment between the two.

In defence of regional development banks in the Covid-19 era
Rabah Arezki and Patrick Bolton (VoxEU) Apr 21, 2021
Ensuring that developing countries remain able to access credit markets is vital for promoting growth and recovery post-pandemic. This column argues that urgent efforts by major economies to support regional development banks and preserve their financial standing will help limit the cost of rebuilding after the crisis, in turn helping preserve international capital markets in the short and medium run.

Can imposing tariffs tackle trade imbalances?
Gita Gopinath (VoxDev) Apr 21, 2021
Domestic policies should do more to address inequality in the gains from international trade.

Bank of Canada Tapers, But Few Tantrums
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Apr 21, 2021
Matching widespread expectations, the Bank of Canada (BoC) opted to taper asset purchases by reducing the weekly purchases target to C$3 billion at its monetary policy meeting. We interpret today's announcement and Monetary Policy Statement as being relatively hawkish, as the BoC also expects the economic recovery to be stronger than its previous forecast suggested. With the economy expected to grow at a quicker pace and measures of inflation close to or above the BoC's 2% target, the central bank has been gradually scaling back monetary policy accommodative. To that point, more view more optimistic BoC growth forecasts as consistent with our the BoC will start hiking policy rates in Q3-2022. In addition to monetary policy, the government's latest budget was released this week with indications of continued fiscal support. A combination of tighter monetary policy and easier fiscal policy is typically the most supportive backdrop for currencies, and we view these developments as supporting our view for a stronger Canadian dollar over the medium-term. As of now, we forecast the USD/CAD exchange rate to reach CAD1.1800 by the middle fo next year, while the balance of risks are tilted toward a faster pace of Canadian dollar appreciation.

Central America needs a bold gesture from the US
FT View Apr 22, 2021
Tackling soaring migration means helping to alleviate its root causes.

Is a productivity miracle possible?
Martin Sandbu (FT) Apr 22, 2021
The post-pandemic recovery is an opportunity to address longstanding sources of poor growth.

Technology wars are becoming the new trade wars
John Thornhill (FT) Apr 22, 2021
'Analogue sovereignty' is no longer sufficient — countries must find a new compact with digital power.

Climate Change Could Cut World Economy by $23 Trillion in 2050, Insurance Giant Warns
Christopher Flavelle (NYT) Apr 22, 2021
Poor nations would be particularly hard hit, but few would escape, Swiss Re said. The findings could influence how the industry prices insurance and invests its mammoth portfolios.

A 43.4% Capital Gains Tax?
WSJ Apr 22, 2021
Make that more than 55% if you live in New York or California.

Understanding the Rise in Long-Term Rates
Tobias Adrian, Rohit Goel, Sheheryar Malik, and Fabio Natalucci (IMF) Apr 22, 2021
Dissecting yield moves.

Question Over Forex Reserves Rattles Turkey's Erdogan
Bobby Ghosh (Bloomberg View) Apr 22, 2021
Turks and foreign investors alike want to know where $128 billion went.

Get Ready for Another Dumb Debt Limit Fight
Jonathan Bernstein (Bloomberg View) Apr 22, 2021
Few arguments in Washington are as pointless — or potentially destructive.

How Much Should Investors Be Worrying About China?
John Authers (Bloomberg View) Apr 22, 2021
There's lots to be concerned about, from economic, technology and geopolitical tensions to the threat of a Lehman-style crisis.

One Neat Trick to Figure Out When the Fed Will Taper
Daniel Moss (Bloomberg View) Apr 22, 2021
James Bullard, president of the St. Louis Fed, has proposed looking at vaccine rates before the debate can begin. It's actually not the craziest idea.

Why We Need Gender-Responsive Central Banking
Anita Bhatia (Project Syndicate) Apr 22, 2021
Now that the pandemic has deepened a wide range of gender disparities and imposed a disproportionately large toll on women, central banks must recognize that they have a role to play in reversing these trends. Better economic conditions for women will mean a stronger recovery for all.

What Three Economists Taught Us About Currency Regimes
Jeffrey Frankel (Project Syndicate) Apr 22, 2021
Today, freely floating exchange rates suit most large countries better than the late economists Richard Cooper, Robert Mundell, and John Williamson thought. But some countries do well with firmly fixed exchange rates, while at least half of the world's countries fall in between.

Powering Sustainable Food Systems
Agnes Kalibata and Kristina Skierka (Project Syndicate) Apr 22, 2021
As world leaders mark Earth Day at a climate summit hosted by US President Joe Biden, they must remember what the largest greenhouse-gas emitters owe to the rest of the world. More than anyone, low-income countries dependent on agriculture need increased green finance and access to affordable clean energy.

Russia's Bear Economy
Anders Åslund (Project Syndicate) Apr 22, 2021
Russians today are chagrined to learn that they are worse off than Romanians and Turks. Although President Vladimir Putin would like them to think that their country has been the victim of "outside forces" such as declining oil prices, no one has done more to hurt their living standards than he has.

Anchors Aweigh: What Do Inflation Expectations Tell Us About the Near-Term Inflation Outlook?
Sarah House and Shannon Seery (WF Econ Group) Apr 22, 2021
Policymakers are closely watching inflation expectations to determine if current price pressures will usher in a menacingly higher inflation environment post-COVID. Inflation expectations are rising broadly across a range of consumer, business and market measures, but our analysis finds there are only a few, if any, standout measures of expectations that produce a reliable read on coming inflation.

Gargantuanisation
John Lanchester (LRB) Apr 22, 2021
The shipping industry has worked hard to hide itself from view, and we have colluded with it. We don't want to think about how that 90 per cent of everything got here. The labour of an entire industry has been successfully put out of sight, out of mind. Occasionally something happens which reminds us: the trade slowdown caused by Brexit, or the Ever Given's mishap. But then we go back to our deliberate not-thinking. And yet the tankers and the containers never stop.

Why housing is built in flood-prone coastal areas
Yatang Lin, Thomas McDermott, and Guy Michaels (VoxEU) Apr 22, 2021
Despite the higher susceptibility to floods and a growing climate crisis, more than 10% of the world's population live in low-elevation coastal zones, and that percentage is growing. This column uses a new dataset on the location of housing and flood risk across thousands of kilometres of the US Atlantic and Gulf coasts to present a detailed picture of housing in low-elevation coastal zones, and its relationship to the vulnerability of different locations to flooding and sea level rise. It also explores how sea level rise may reshape cities, and considers implications in terms of rising costs of flooding and taxpayer subsidies, the economic decline of some neighborhoods, and lengthening commutes.

Ditch the EU's fiscal rules; develop fiscal standards instead
Olivier Blanchard, Álvaro Leandro, and Jeromin Zettelmeyer (VoxEU) Apr 22, 2021
The EU's fiscal rules are currently suspended. If reinstated, they will need to be modified to account for the higher levels of debt. This column, part of the Vox debate on euro area reform, argues that simple fiscal rules provide a crude and unsatisfactory assessment of debt sustainability and proposes that they be replaced with fiscal standards. In particular, it calls for qualitative prescriptions that leave room for judgement together with a process to decide whether the standards are met. This proposal envisages a larger surveillance role for independent fiscal councils and/or the European Commission, as well as a judicial body for adjudication over disputes.

EM issuers raise record $191bn on foreign debt markets in early 2021
Jonathan Wheatley (FT) Apr 23, 2021
Risks are rising for developing nations after a blockbuster start to the year.

For real progress on climate change, invite the developing world
Gillian Tett (FT) Apr 23, 2021
The US and China must work together to help small economies reduce emissions.

The myth of China-Japan decoupling
William Pesek (AT) Apr 23, 2021
Yoshihide Suga isn't known for his acrobatic skills. Nor is kabuki theatre the Japanese prime minister's thing. But Suga is proving his proficiency in both disciplines as he joins hands with US President Joe Biden against China. Despite the Tokyo-Washington political axis, Japan Inc has never been so reliant on China's growing markets.

One Thing America Might Buy With All the Spending? Less Inequality.
Jeanna Smialek and Jim Tankersley (NYT) Apr 23, 2021
The Biden administration is relying on Congress instead of just the Fed to fix the economy. That mix could lead to a less wealth-unequal future.

The Fed's Real Diversity Problem
WSJ Apr 23, 2021
The central bank's 'groupthink' isn't about race and gender.

Yellen Treasury looks the other way on currency manipulation
Joseph E. Gagnon (PIIE) Apr 23, 2021
Despite Secretary Janet Yellen's promise to take a hard line against currency manipulation, the US Treasury Department declined to name any country a currency manipulator in its latest report on April 16. As noted in a previous post, currency manipulation jumped dramatically to nearly $450 billion in 2020, and Treasury's own criteria point to at least three manipulators last year: Switzerland, Taiwan, and Vietnam. Nevertheless, Treasury declared that it had "insufficient evidence" to judge whether large-scale currency purchases by these countries were intended to support their excessive trade surpluses. What other purpose could there be?

Four Ways Global Corporations Can Confront Inequality
Dambisa F Moyo (Bloomberg View) Apr 23, 2021
Ensuring a shared recovery is in their long-term best interests.

My Worst Forecasting Mistake
Stephen S. Roach (Project Syndicate) Apr 23, 2021
There were three seemingly strong reasons to predict last year that the US economy was headed for a double-dip recession. In the end, a confluence of three other reasons explains why that prediction turned out to be spectacularly wrong.

How Africa Should Approach Trade and Industrialization
Nimrod Zalk (Project Syndicate) Apr 23, 2021
The African Continental Free Trade Area is a positive step, but it is no panacea. If Africa is to overcome barriers to structural transformation and industrialization, a broader strategy, based on developmental regionalism, will be needed.

Bitcoin and Beyond
Christian Catalini, Ravi Jagadeesan, and Scott Duke Kominers (Project Syndicate) Apr 23, 2021
From the growing attention to Bitcoin and "decentralized finance" to the latest excitement spurred by non-fungible tokens, the crypto economy is here to stay. But will it develop the social consensus and institutional arrangements needed to go fully mainstream?

Globalisation and global crises
Assaf Razin (VoxEU) Apr 23, 2021
Concerns associated with the Covid-19 pandemic have led to new rationales of protectionism, with renewed emphasis on domestic production and sourcing. This column compares the current economic crisis brought on by the pandemic to previous major economic crises and examines what this could mean for the future of various aspects of globalisation.

Reshaping European economic integration in the post-Covid world
Marco Buti and George Papaconstantinou (VoxEU) Apr 23, 2021
Most of the discussion on the economic policy response to the pandemic in Europe has centred on its ambition, tools, and institutional characteristics. Less discussion has taken place on the factors shaping EU integration and economic policy priorities after the pandemic. In a new CEPR Policy Insight, the authors argue that four sets of issues will be important in shaping the legacy of the pandemic for European integration: redefining the new boundaries between state and market; revisiting the nature of subsidiarity; reconnecting the EU domestic with the global agenda; and learning to respond to longer term structural shifts.

In Colombia, Free Trade Has Come With More Violence
Genevieve Glatsky (FP) Apr 23, 2021
Nearly a decade after signing a deal with the United States, the future in cities like Buenaventura looks worse and worse.

Bitcoin boom fuels fight over money creation
Brendan Greeley (FT) Apr 24, 2021
Throughout history, hard coin and credit have circulated together.

Putin's autocracy blocks political and economic change in Russia
Mikhail Khodorkovsky (FT) Apr 24, 2021
Absence of rule of law and tensions with the west serve as a deterrent to foreign investment.

Risk strategies to adopt when markets turn mad
Michael Mackenzie (FT) Apr 24, 2021
As froth and speculation builds, investors should prepare for shocks.

American export controls threaten to hinder global vaccine production
Economist Apr 24, 2021
The world's biggest vaccine-maker says it will feel the pinch in a month.

Vaccine Rollout Leaves Developing Countries Tragically Behind
Brooke Sample (Bloomberg View) Apr 24, 2021
The rules of global trade have kept lifesaving treatments out of reach for the world's neediest.

India's Crisis Means the Pandemic Is Far From Over
David Fickling (Bloomberg View) Apr 24, 2021
From poor infrastructure to political miscalculations and bravado, the devastation is frustratingly predictable. Our columnists weigh in on the outbreak and what it means for the world.

Biden Needs to Come to India's Aid Now
Shruti Rajagopalan (Bloomberg View) Apr 24, 2021
The U.S. should lift export restrictions and donate unused vaccines to help stem the world's most terrifying Covid-19 outbreak.

The growing concentration of wealth in Italy
Paolo Acciari, Facundo Alvaredo, and Salvatore Morelli (VoxEU) Apr 24, 2021
Growing wealth disparities can have corrosive effects on equality of opportunity when they crystallise over time and turn into persistent disparities across generations. This column uses newly assembled data from Italian inheritance tax records to show that the wealth share of the top 1% (half a million individuals) increased from 16% in 1995 to 22% in 2016, and the share accruing to the top 0.01% (the richest 5,000 adults) almost tripled from 1.8% to 5%. In contrast, the poorest 50% saw an 80% drop in their average net wealth over the same period. The data also reveal the growing role of inheritance and gifts inter vivos as a share of national income, as well as their increasing concentration at the top.

Taxing wealth in a context of extreme inequality legacy: The case of South Africa
Aroop Chatterjee, Léo Czajka, and Amory Gethin (VoxEU) Apr 24, 2021
Many studies have investigated the dynamics of poverty and consumption in developing countries, but still little is known about the distribution of household net worth. This column documents the persistence of extreme wealth inequalities in South Africa since the end of the apartheid regime. Today, the top 10% own about 85% of total wealth and the top 0.1% own close to one third. A progressive wealth tax targeted at the richest 1% could collect the equivalent of between 1.5% and 3.5% of South Africa's GDP, both tackling this legacy of extreme inequality and bringing additional government revenue in the wake of the COVID-19 crisis.

Barbarians are knocking on Japan's corporate gates
Leo Lewis (FT) Apr 25, 2021
The Toshiba-CVC deal may have evaporated for now, but it will surely prompt others.

China's Economic Blackmail Backfires
WSJ Apr 25, 2021
After Beijing's trade bullying, Australia tears up two investment deals.

What history tells you about post-pandemic booms
Economist Apr 25, 2021
People spend more, take more risks—and demand more of politicians.

India's Covid Crisis Threatens a Global Oil Recovery
Julian Lee (Bloomberg View) Apr 25, 2021
The world's biggest oil producers may now have to rethink their deal to ease output cuts.

Covid Has Been Miserable. It's Also Been Innovative
Brooke Sample (Bloomberg View) Apr 25, 2021
Living through a pandemic has been anything but fun, but it's certainly been a learning experience.

The Global Vaccine Crisis Is a Test of Capitalism
Mihir Sharma (Bloomberg View) Apr 25, 2021
Governments need to work together to increase production and show that the system can still allocate resources properly.

Your Money Will Be Digital. Will It Be Smart?
Andy Mukherjee (Bloomberg View) Apr 25, 2021
If our e-wallets can't make some purchasing decisions, the promise of easier payments will melt like ice cream on a summer day.

The voice of monetary policy
Yuriy Gorodnichenko, Tho Pham, and Oleksandr Talavera (VoxEU) Apr 25, 2021
While the effectiveness of central bank's verbal communication is well documented, little is known about the effectiveness of communication via non-verbal channels. This column discusses vocal features of Federal Open Market Committee communication and examines the impacts on financial markets. The results suggest that tone of voice can contain distinct information not captured in the texts of press conferences. A positive voice tone can lead to higher share prices and decreases in volatility, highlighting the importance of voice control for central bank communication.

The idea the state has been shrinking for 40 years is a myth
Ruchir Sharma (FT) Apr 26, 2021
The 'neoliberal' era that began with Reagan and Thatcher has instead presided over ever-bigger government.

Narendra Modi and the perils of Covid hubris
Gideon Rachman (FT) Apr 26, 2021
The resurgence of the pandemic in India holds dangers and lessons for the world.

The Fed in the Sand as Inflation Threatens
Mickey D. Levy and Michael D. Bordo (WSJ) Apr 26, 2021
We aren't going back to the 1970s, but the central bank isn't being realistic about the risk of higher prices.

Fed Should Start Tapering, But It Won't
Mohamed A El-Erian (Bloomberg View) Apr 26, 2021
Policy makers need to quit kicking the can down the road and pare back their extraordinary measures.

Please Stow Your Outrage About a Capital Gains Tax Hike
Timothy L O'Brien (Bloomberg View) Apr 26, 2021
There is no evidence for any of the calamities that opponents argue would befall the economy and markets.

Four Ways Companies Can Adapt to Deglobalization
Dambisa F Moyo (Bloomberg View) Apr 26, 2021
Resilience will come at a cost.

India's New Vaccine Strategy Is Bad Economics
Andy Mukherjee (Bloomberg View) Apr 26, 2021
Putting a price on shots could lead to unjust, lopsided distribution. The cost to the consumer should be zero.

The Brussels Effect on Sustainable Finance
Kalin Anev Janse and Anu Bradford (Project Syndicate) Apr 26, 2021
The EU's new sustainable finance taxonomy will go a long way toward strengthening Europe's market for green investment. And, as with the EU's data-protection and environmental regulations, the bloc's framework is likely to have a global impact.

Who's Afraid of the Digital Renminbi?
Paul Blustein (CIGI) Apr 26, 2021
The idea that Beijing could use the digital renminbi for snooping abroad is based on misconceptions about how money works, especially across borders. Paul Blustein explains.

Africa's latent assets
Soeren J. Henn and James Robinson (VoxEU) Apr 26, 2021
Social science research has painted a dismal picture of Africa's potential for sustained economic growth. But growth, such as that which happened in China after 1978, can be surprising and can tap into 'latent assets' in a society that might have not been previously evident. This column identifies three latent assets in Africa which the authors argue are highly propitious for its long run trajectory.

Commodity prices and banking crises
Markus Eberhardt and Andrea Presbitero (VoxEU) Apr 26, 2021
Commodity prices are one of the most important drivers of output fluctuations in developing countries. This column shows that a major channel through which commodity price movements can affect the real economy is their effect on financial stability. Commodity price volatility is likely to trigger financial instability and banking crises through a reduction in government revenues and a shortening of sovereign debt maturity, which in turn are likely to weaken banks' balance sheets.

Chile: critical test looms on inequality
Michael Stott (FT) Apr 27, 2021
Constitutional change could move the country closer to addressing causes of unrest.

Bond investing needs a complete rethink
Dan Fuss (FT) Apr 27, 2021
Lessons from the past might be less relevant for current portfolios.

Jack Ma re-emerges on the digital yuan vanguard
William Pesek (AT) Apr 27, 2021
Months after his run-in with Beijing authorities, one that scrapped history's biggest initial public offering, Jack Ma's true whereabouts have finally been verified: at the very center of Xi Jinping's boldest effort yet to modernize China's economy as he helps to drive a digital currency revolution.

China in the WTO
Alan Wm. Wolff (PIIE) Apr 27, 2021
All WTO Members benefit from WTO Membership. But during these 25 years of WTO history, China has been perhaps the greatest beneficiary of any Member if measured by its gains in trade, particularly in manufactured goods.

Central bank currencies going digital
Maria Demertzis (Kathimerini/Bruegel) Apr 27, 2021
Electronic cash might be the future, but it is still unclear what payment innovation it offers for the public, certainly in the euro area. And it is unlikely to fully replace the comfort the consumer feels in having money under the mattress.

The African Continental Free Trade Area and exchange rate misalignments
Francisco G. Carneiro and Ferdinand Owoundi (Brookings) Apr 27, 2021
What are exchange rate misalignments and why do they matter?

Why Regulation Won't Harm Cryptocurrencies
Brian Feinstein and Kevin Werbach (K@W) Apr 27, 2021
Measures that protect investors and weed out bad actors will boost confidence in cryptocurrencies and help the industry to grow.

Don't Panic About China's New Digital Cash
Bloomberg View Apr 27, 2021
In the global competition to re-engineer money, getting it right is more important than being first.

Mobilize the Market to Fight Global Warming
Michael R Bloomberg and David M Solomon (Bloomberg View) Apr 27, 2021
Growing economies and protecting the climate go hand in hand.

Measuring What Matters
Maxwell Gomera (Project Syndicate) Apr 27, 2021
As governments prime the pumps of economic recovery, they must change the yardsticks by which they measure human progress and welfare. Otherwise, their investments risk further fueling the inequalities and environmental destruction that prepared the ground for the COVID-19 pandemic.

A European-Style United Nations
Sandra Breka and Brian Finlay (Project Syndicate) Apr 27, 2021
For decades, multilateralism, built on a common overarching vision, has anchored Europe's longest-ever period of peace and stability. That alone should qualify the European Union to serve as a model for the UN's renewal.

Will the American Jobs Plan Remake the US Economy?
James K. Galbraith (Project Syndicate) Apr 27, 2021
US President Joe Biden's public-investment proposal is undoubtedly ambitious – and highly controversial. But it may also be the key to putting the US economy on the path toward a more sustainable, equitable, and prosperous future.

There Will Be Boondoggles
Michael J. Boskin (Project Syndicate) Apr 27, 2021
On top of the trillions of dollars already spent on pandemic-related rescue and stimulus since last March, the Biden administration wants a $2.3 trillion package of loosely defined infrastructure spending. In doing so, it risks stimulating an economy that has already recovered, while undercutting America's long-term competitiveness.

Migration and the post-pandemic reboot of global trade
Magnus Lodefalk, Andreas Hatzigeorgiou, and Carl Alm (VoxEU) Apr 27, 2021
The COVID-19 pandemic has led to a dramatic rise in protectionism and restrictions around the world. This column sheds light on the role migration can play in restoring globalisation in the wake of COVID-19. It draws upon evidence from macro-, sub-national, and micro-level research to demonstrate that migration has the potential to promote economic recovery through facilitating foreign trade, investment, and offshoring. The findings carry implications not only for physical migration, but also for whether or not recent technological advances may enable foreign-based online workers to promote globalisation.

Addressing Impediments to Digital Trade
Ingo Borchert and L Alan Winters (VoxEU) Apr 27, 2021
In a world in which the Covid-19 pandemic has severely affected conventional trade and economic activity, digital trade and digitally enabled services can be a source of future growth and prosperity. Yet, these new opportunities come with unique challenges for trade policymaking, not least because digital trade is inseparable from a data governance framework. In March 2021 the UK Department for Digital, Culture, Media and Sport and the UK Trade Policy Observatory organised a conference, hosted by CEPR, to discuss new directions for digital trade policy. A new eBook presents the conference proceedings, which identify current and future impediments and discuss policy options to tackle them.

India Is What Happens When Rich People Do Nothing
Vidya Krishnan (Atlantic) Apr 27, 2021
The chamber of horrors the country now finds itself in was not caused by any one man, or any single government.

International Economic Outlook: April 2021
Nick Bennenbroek and Brendan McKenna (WF Econ Group) Apr 27, 2021
The theme of reflation and rising bond yields has influenced financial markets; however, in April, sovereign yields stabilized. U.S. Treasury yields moved 20 basis points lower, while yields across the G10, with the exception of the Eurozone, also fell. Lower bond yields in the U.S. weighed on the dollar this month, while higher yields in the Eurozone pushed the euro to levels not seen in months. Diverging prospects for G10 and emerging market economies have become more apparent. G10 economies, in particular the United States and Canada, and to a lesser extent the United Kingdom, have experienced encouraging economic recoveries to this point. However, prospects across the emerging markets are dwindling amid a surge in COVID cases. Our outlook for the global economy is still positive; however, these widening divergences could eventually have a role in disrupting local financial markets and influencing the path of certain currencies, particularly within the emerging markets. It will be key to monitor COVID-related developments and vaccine efforts across the emerging markets in an effort to determine if the global economy is growing in unison or if economic laggards continue to present themselves.

The Increasing Importance of Services Expenditures and the Dampening Effect on Global Trade
Logan T. Lewis, Ryan Monarch, Michael Sposi, Jing Zhang, and Caroline Beetz Fenske (FRB Chicago Fed Letter) Apr 27, 2021
Access to global markets supported the industrialization of emerging economies and opened up new markets for firms in wealthier countries.

A new deal for the young: how to fix the housing crisis
FT View Apr 28, 2021
An affordable place to live is a foundation of a decent life.

China is wrong to think the US faces inevitable decline
Martin Wolf (FT) Apr 28, 2021
Its economic assets are too great and, while America could falter, that would be its choice and not its fate.

Investors should see past inflation pick-up
Tiffany Wilding (FT) Apr 28, 2021
Price pressures are likely to level off as the year progresses.

How Markets Have Delivered More Economic Equality
Antony Sammeroff (Mises Wire) Apr 28, 2021
People must still compete for resources in a socialist economy. In fact, the competition is intense. On the other hand, thanks to markets, basic necessities—and even basic luxuries—are now more more accessible than ever.

America Needs to Grow Much Faster
Matthew G Yglesias (Bloomberg View) Apr 28, 2021
The latest Census figures show the U.S. is growing too slowly to remain internationally competitive.

Mario Draghi Is Relying on Some Old Friends
Marcus Ashworth (Bloomberg View) Apr 28, 2021
With Italian bond yields inching upward, the prime minister's economic recovery plans will depend heavily on the ECB "managing the spreads."

Elon Musk's Golden Age of Tech Innovation Is Coming
Tae Kim (Bloomberg View) Apr 28, 2021
The Tesla founder has lamented the loss of talented people to careers other than technology. There's never been a better time to attract new tech recruits.

How the Big Three Rating Companies Got China Huarong So Wrong
Shuli Ren (Bloomberg View) Apr 28, 2021
After the Lehman collapse, it's another embarrassing black eye for the credit watchdogs.

What Should Biden Do About Trump's China Tariffs?
Wendy Cutler (Bloomberg View) Apr 28, 2021
There's a way to minimize the costs to U.S. workers and companies while keeping the pressure on Beijing.

Ending Latin America's Economic Malaise
Eric Parrado (Project Syndicate) Apr 28, 2021
After the 2008 global financial crisis, Latin American and Caribbean governments used booming commodity prices to raise living standards while avoiding the reforms that were needed to lock in long-term growth. Now that the pandemic has revealed the costs of this approach, it must not be repeated.

Climate Change vs. Techno-Utopia
Daron Acemoglu (Project Syndicate) Apr 28, 2021
Given all of the great feats of human ingenuity over the past few centuries, it is tempting to believe that we ultimately will solve the problem of climate change with some yet-to-be developed technological breakthrough. But such thinking carries serious risks.

Building a Nature-Positive Economy
Paul Polman and Eva Zabey (Project Syndicate) Apr 28, 2021
Investors often chase short-term profits instead of using environmental, social, and governance criteria – alongside financial performance – to measure a company's value. There will be no saving the planet from the ravages of climate change and biodiversity loss unless this definition of business success changes.

Building a New Elite
Ngaire Woods (Project Syndicate) Apr 28, 2021
Like many countries, France faces the challenge of building a public administration ambitious enough to attract people of purpose and talent, but also open enough to recruit from a much wider cross-section of society. Tinkering with the prestigious École Nationale d'Administration will not achieve this.

A One-Earth Balance Sheet
Andrew Sheng and Xiao Geng (Project Syndicate) Apr 28, 2021
At the dawn of the nuclear age, Albert Einstein wrote that "a new type of thinking is essential if mankind is to survive and move toward higher levels." As the world confronts the escalating climate crisis, a new type of thinking is needed once again – and it starts with a new type of accounting.

US–China Tensions
John Rogers, Bo Sun, and Chris Webster (VoxEU) Apr 28, 2021
We construct a US–China Tensions index (UCT) and examine its economic transmission effects. The index spikes notably around the 2008 unrest in Tibet and the China military buildup, the 2018 arrest of a Huawei executive, and the 2018–2019 trade disputes. The index reaches its peak at the onset of the 2020 global pandemic. We interpret such tension as reflecting both the realization of new barriers between the two countries and the risk of existing barriers escalating. We show that heightened US–China Tension has adverse economic effects at both the aggregate and firm levels, including protracted output declines, increased credit spreads, lower bilateral trade, and reduced firm-level investment, R&D, and hiring.

China and the WTO: Two systems meet
Petros C. Mavroidis and André Sapir (VoxEU) Apr 28, 2021
China's ascension to the WTO followed years of negotiations with the incumbent members and was hailed at the time as a victory for the liberal paradigm – part of the 'end of history'. But today frictions remain. This first in a series of three columns presents the build-up to China joining the multilateral trade agreement, arguing that expectations for its subsequent behaviour were misguided from the off.

LatAm must 'build back better' - return to status quo is not an option
Michael Stott (FT) Apr 29, 2021
Political tugs-of-war must give way to consensus as the region emerges from the Covid-19 wreckage.

The Economy Is (Almost) Back. It Is Looking Different Than It Used To.
Neil Irwin (NYT) Apr 29, 2021
The recovery is profoundly unequal across sectors, unbalanced in ways that have big implications for businesses and workers.

Japan on the pointed horns of a China dilemma
Denny Roy (AT) Apr 29, 2021
Japan's China dilemma is intensifying. Japanese economic health is deeply dependent on the same country that increasingly threatens Japan's security. The squeeze Japan is suffering does not result from a "security dilemma" or some other impersonal structural force of the international political system. It is the intended result of the People's Republic of China's (PRC) foreign policy.

Achieving the Sustainable Development Goals Will Require Extraordinary Effort by All
Abdelhak Senhadji, Dora Benedek, Edward Gemayel, and Alexander Tieman (IMF) Apr 29, 2021
How can countries hope to make meaningful progress toward the Sustainable Development Goals under these new, more difficult circumstances triggered by the pandemic?

Cash Indicators Show Reassuring Signs of Recovery
James A. Kaitz (BRINK) Apr 29, 2021
We have now weathered a year of the coronavirus pandemic, and data gathered for the past two quarters provide us with reassurance of economic recovery, albeit with cautious optimism. Not only is there an uptick in the performance of U.S. companies, but some are also reporting they are in a position to invest in their organizations.

Setting Europe's economic recovery in motion: a first look at national plans
Zsolt Darvas and Simone Tagliapietra (Bruegel) Apr 29, 2021
Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is interested in borrowing from the EU.

If Italy Fails, Then Europe Fails Too
Rachel Sanderson (Bloomberg View) Apr 29, 2021
Mario Draghi needs to channel Italy's postwar reconstruction as he implements a massive spending plan and tries to reform his country.

Hedge Funds Take a Shine to Greece
Elisa Martinuzzi (Bloomberg View) Apr 29, 2021
The recent run in Greek bank shares has been spectacular, but the country's lenders are still depending on a solid economic rebound.

Brazil Breeds a New Kind of Billionaire
Mac Margolis (Bloomberg View) Apr 29, 2021
New faces at the top are part of an emerging economy built on digital technology and fueled by customers from the neglected classes.

Europe Needs a New Fiscal Framework
Jean Pisani-Ferry (Project Syndicate) Apr 29, 2021
Even before the COVID-19 pandemic, the European Union's fiscal rules were excessive and increasingly unworkable, reflecting the motives of distrustful member states more than economic common sense. If there is a silver lining to this crisis, it lies in the opportunity to debate and develop a new blueprint.

Infrastructure for the Next American Century
Jonathan Gruber (Project Syndicate) Apr 29, 2021
Every era needs its own set of infrastructure investments, based on the available technology and oriented toward productivity growth and job creation. For this reason, US President Joe Biden's infrastructure plan is right to include a stepped-up commitment to funding science.

Share the Intellectual Property on COVID-19
Jeffrey D. Sachs (Project Syndicate) Apr 29, 2021
Intellectual Property must serve the global good, rather than humanity serving the interests of a few private companies. And in the case of COVID-19, the global good is not in doubt: rapid worldwide immunization, in order to save lives, prevent the emergence of new variants, and end the pandemic.

Biden's Fuzzy Tax Math
Willem H. Buiter and Anne Sibert (Project Syndicate) Apr 29, 2021
Having unveiled a string of ambitious spending proposals, the Biden administration needs to come up with a way to generate an additional $4 trillion in revenue over the next ten years. But while it has no shortage of ideas, it will almost certainly come up short.

High Growth Sectors in the Post-Recovery Decade
Michael Spence (Project Syndicate) Apr 29, 2021
The post-pandemic economy could well be defined by the return of robust aggregate productivity growth after 15 years of relative sclerosis. Between the increased availability of powerful new technologies and aggressive fiscal policies, the stars are aligned for a cascading sequence of rapid recovery around the world.

Foreign currency corporate borrowing: Risks and policy responses
Viral Acharya and Siddharth Vij (VoxEU) Apr 29, 2021
Emerging market economies increasingly rely on foreign currency debt, leaving borrowing firms exposed to sudden stops and currency depreciations. This column examines the dynamics of corporate foreign currency borrowing in India using new firm-level data. It finds that interest rate differentials are a strong predictor of foreign currency debt issuance, particularly after the Global Crisis. After the 'taper tantrum' of 2013, the Reserve Bank of India introduced new macroprudential policies that were effective at mitigating the riskiest borrowing and reducing the vulnerability of Indian firms.

China and the WTO: An uneasy relationship
Petros C. Mavroidis and André Sapir (VoxEU) Apr 29, 2021
Having joined the WTO, many Western countries expected China to soon liberalise and become an open market economy. This second in a series of three columns describes how China has been able to shrug off pressures to change its economic structure and trading strategy, particularly regarding how its state-owned enterprises operate within the multilateral system.

Margin debt and leverage are flashing red, again
Gillian Tett (FT) Apr 30, 2021
Much of the froth in US markets is being driven by unusual liquidity flows that may reverse soon.

Europe's Recession Contrasts Economic Fortunes of U.S. Expansion
Peter S. Goodman (NYT) Apr 30, 2021
The diverging recoveries underway in the United States and Europe underscore the value of effective vaccination and public spending in the pandemic.

The True Cost of Closing the Racial Wealth Gap
William Darity Jr. (NYT) Apr 30, 2021
Policies like forgiving debt for all student loans and giving baby bonds to the whole population won't be nearly enough to achieve racial wealth parity, an economist says.

Europe has fallen into recession again. Its leaders should be nervous.
Henry Olsen (WP) Apr 30, 2021
This may be their last chance to avoid a populist surge.

India's Covid crisis set to derail world economy
Uma S Kambhampati (AT) Apr 30, 2021
The second wave of the pandemic has struck India with a devastating impact. It is clear that there is now a humanitarian crisis of significant proportions. Coupled with significant pandemic-related problems in Brazil and South Africa, the impact on world growth will be considerable. In terms of knock-on effects, the scale of the crisis in India is likely to mean that international restrictions remain in place for longer than hoped.

Biden's Move-Research-Abroad Tax
WSJ Apr 30, 2021
Raise the levy on U.S. intellectual property and you'll get less of it.

India's State Is Failing Its Covid Test
Mihir Sharma (Bloomberg View) Apr 30, 2021
In the absence of a strong and capable government, whether you live or die largely depends on who's in your phone book.

The Two Sides of Chinese GDP
Nancy Qian (Project Syndicate) Apr 30, 2021
Many economists care more about China's per capita GDP, or income per person, than the aggregate measure. The key takeaway is that China remains a poor country, despite its phenomenal headline economic growth over the past four decades.

Reimagining Education for All in Africa
Connie Nshemereirwe (Project Syndicate) Apr 30, 2021
At current rates, about 20% of children in Sub-Saharan Africa will still be excluded from schooling in 2030. But, besides seeking to expand access to education, policymakers should contextualize, simplify, and democratize school curricula and teaching methods.

Morals and the Vaccine Market
Kaushik Basu (Project Syndicate) Apr 30, 2021
The glaring global inequity in access to COVID-19 vaccines is both an intellectual and moral failure. The pandemic is a clarion call to start thinking beyond the narrow confines of economic rationality and identify others' interests as part of our own.

Cross-country evidence on COVID-19 'she-cessions'
John Bluedorn, Francesca Caselli, Niels-Jakob Hansen, Ippei Shibata, and Marina M. Tavares (VoxEU) Apr 30, 2021
Early evidence from the COVID-19 recession suggested that women's employment rates were falling disproportionately, portending a possible 'she-cession'. Drawing on quarterly data from 38 advanced and emerging market economies, this column documents the extent and persistence of pandemic-induced she-cessions and uncovers significant heterogeneity across countries. In two-thirds of the countries studied, women's employment rates declined more than men's, but the differences were short-lived – lasting only a quarter or two on average – and strongly correlated to specific sectors of the economy.

International firms: More exposed but more resilient during Covid-19
Floriana Borino, Eric Carlson, Valentina Rollo, and Olga Solleder (VoxEU) Apr 30, 2021
The global spread Covid-19 forced governments to impose strict containment measures, generating international supply and demand shocks. As a result, nationalistic views advocating for increased localisation of production were amplified. Using a novel dataset comprising 4,433 enterprises across 133 countries, this column shows that, despite being more strongly affected by the Covid-19 crisis, firms engaged in international trade have taken more resilient actions than firms that only operate domestically. These results underscore the importance of global connectedness and international trade for promoting resilience to economic shocks.

China and the WTO: How can they work together better?
Petros C. Mavroidis and André Sapir (VoxEU) Apr 30, 2021
The ability of the WTO to shape the way China conducts its trade policy has been severely limited, and most attempts to leverage multilateral pressure have so far failed. This third in a series of three columns explores how the relationship could be reformed and improved going forward. The authors highlight the need for clearer guidelines on state-owned enterprises, as well as new rules surrounding the transfer of technology between signatories.

Thai'ed Down, Baht Not Out
Brendan McKenna (WF Econ Group) Apr 30, 2021
In addition to India, many other emerging Asian countries have seen another wave of COVID cases over the past few weeks. Thailand is particular has been hit hard, with daily case numbers jumping to record highs. As new restrictions have been put in place, the Thai baht has slumped and is now one of the worst performing emerging market currencies year-to-date. However, we expect Thailand to manage the renewed outbreak effectively and for the currency to recover losses by the end of the year. Over the second half of this year, we expect the baht to trend back toward the key THB30.00 level, implying 4% upside in the currency from current levels.

Eurozone Economy Contracts Again in Q1-2021
Nick Bennenbroek (WF Econ Group)/I> Apr 30, 2021
The Eurozone economy shrank for a second straight quarter in Q1, with GDP declining 0.6% quarter-over-quarter. The German economy was particularly weak, although declines in GDP were also reported in Italy and Spain. More recent confidence surveys point to a recovery, although we expect the pace of the rebound in Eurozone GDP to be gradual. With inflation pressures also muted, we expect the European Central Bank to maintain its accommodative monetary policy stance for an extended period.