News & Commentary:

Articles/Commentary

Brexit camp should be clear about migration
FT View Jun 1, 2016
A decision to close the door to the EU would have repercussions.

Japan’s sales tax delay raises questions about economy
Hisao Tonedachi (FT) Jun 1, 2016
Abe’s decision suggests fiscal policy is not working as envisaged.

No need to panic, China’s banks are in pretty good shape
Nicholas Lardy (FT) Jun 1, 2016
The country is not vulnerable to a financial crisis such as Asia in 1997.

Latam’s submerging middle classes add to political risk
Richard House (FT) Jun 1, 2016
Commodity rout and yawning deficits threaten millions with return to poverty.

Countries Must Spend to Escape ‘Low-Growth Trap,’ O.E.C.D. Says
Reuters/NYT Jun 1, 2016
The global economy is expected to grow this year at its slowest pace since the financial crisis, the Organization for Economic Cooperation and Development reported.

OECD Economic Outlook 2016 sees global economy stuck in low-growth trap unless policymakers act now to keep promises
OECD Insight Jun 1, 2016
Continuing the cycle of forecast optimism followed by disappointment, global growth has been marked down, by some 0.3 per cent, for 2016 and 2017 in the 2016 OECD Economic Outlook since the November 2015 OECD Interim Economic Outlook and the global economy is set to grow by only 3.3 per cent in 2017.

China in Africa, Part I: The Good
David Volodzko (Diplomat) Jun 1, 2016
A closer look at the fact and fiction surrounding China’s involvement on the continent.

Big Data Is Still Only a Little Helpful
Leonid Bershidsky (Bloomberg View) Jun 1, 2016
Google can do short-term economic forecasting. But so can traditional tools.

Renewable Energy Isn't About to Doom Oil
Leonid Bershidsky (Bloomberg View) Jun 1, 2016
Wind, geothermal and solar are growing, but so is demand for fossil fuels.

The Trans-Pacific Shell Game
Jomo Kwame Sundaram (Project Syndicate) Jun 1, 2016
While the Trans-Pacific Partnership might help the US to advance its goal of containing China’s influence in the Asia-Pacific region, the economic case is not nearly as strong. In fact, the TPP will produce only meager benefits, which will mainly accrue to large corporations – and come at the expense of ordinary citizens.

The ECB’s Illusory Independence
Yanis Varoufakis (Project Syndicate) Jun 1, 2016
In one sense, the ECB is a quintessentially independent central bank: No single government stands behind it, and it is expressly prohibited from standing behind any of the national governments whose central bank it is. And yet the ECB is the least independent central bank in the developed world.

China’s New Silk Road Into Europe Is About More Than Money
Keith Johnson (FP) Jun 1, 2016
Beijing is spending billions of dollars on new ports and rail lines, but its ambitions for Europe are as much about geopolitics as commerce.

Geographic expansion reduces banks’ risk: New evidence
Martin R. Götz, Luc Laeven and Ross Levine (VoxEU) Jun 1, 2016
Economists differ on whether the geographic expansion of a bank’s activities reduces risk. A key challenge when attempting to answer this question is identification – does diversification cause lower risk, or are safer banks just also more diversified? This column uses a new identification strategy to demonstrate that geographic diversification materially reduces bank holding company risk. Economists differ on whether the geographic expansion of a bank’s activities reduces risk. A key challenge when attempting to answer this question is identification – does diversification cause lower risk, or are safer banks just also more diversified? This column uses a new identification strategy to demonstrate that geographic diversification materially reduces bank holding company risk.

The political economy of deposit insurance
Charles W Calomiris and Matthew Jaremski (VoxEU) Jun 1, 2016
Liability insurance is a fundamental part of banking regulation of today, but despite being accepted as best practice now, it did not expand out of the US until the second half of the 20th century. This column discusses economic and political explanations for the spread of liability insurance availability, and finds that a political explanation reflects the empirical evidence well. Liability insurance was preferable to other policies despite being inefficient, due to its use as political leverage. Liability insurance is a fundamental part of banking regulation of today, but despite being accepted as best practice now, it did not expand out of the US until the second half of the 20th century. This column discusses economic and political explanations for the spread of liability insurance availability, and finds that a political explanation reflects the empirical evidence well. Liability insurance was preferable to other policies despite being inefficient, due to its use as political leverage.

Africa's Rise—Interrupted?
Steven Radelet (F&D) Jun 1, 2016
The region's future depends on much more than fluctuations in commodity prices.

Straight Talk: Time for a Policy Reset
Antoinette M. Sayeh (F&D) Jun 1, 2016
Sub-Saharan Africa's economies face severe strains and must take action to reignite sustainable growth.

Inching toward Integration
Carlos Lopes (F&D) Jun 1, 2016
A new index allows African countries to see how their regional integration efforts stack up.

Impediment to Growth
Amadou Sy (F&D) Jun 1, 2016
Africa's inadequate infrastructure limits the continent's economic progress, but funding roads, ports, and power projects is difficult.

Off Its Pinnacle
Robert J. Gordon (F&D) Jun 1, 2016
Is the United States entering a period of sustained low economic growth?

Nigerian capital inflows dry up as economy falters
Adrienne Klasa (FT) Jun 2, 2016
Low oil prices and policy mis-steps deter foreign investment.

Emerging markets to slow as convergence theory takes hold
Steve Johnson (FT) Jun 2, 2016
Narrowing income differentials with west reduce scope for strong growth.

No surprises from Draghi – but ECB stands ready to act
Martin Wolf (FT) Jun 2, 2016
Rates decision suggests policy is proving effective yet further action is likely.

Ireland’s fear of the Brexit
Judy Dempsey (WP) Jun 2, 2016
A British exit from the E.U. would have profound economic and security impacts on the island, north and south.

G-7 Leaders Warn of “Brexit” Risks to Trade, Investment Ahead of June Vote
Bridges, Volume 20, Number 20 Jun 2, 2016
Leaders from the G-7 coalition of major advanced economies issued a harsh warning last week over the ramifications a "Brexit" would have on the global economy, including for trade and investment, with less than a month remaining before UK voters go to the polls.

EU, Japan to Aim for 2016 “Agreement in Principle” on FTA
Bridges, Volume 20, Number 20 Jun 2, 2016
Leaders from the EU and Japan confirmed last week that they aim to reach an "agreement in principle" this year for a bilateral trade pact, following over three years of negotiations.

Global Steel Crisis: G-7 Leaders Warn of Trade Risks, Possible Enforcement Action
Bridges, Volume 20, Number 20 Jun 2, 2016
Leaders from the G-7 coalition of major economies called for "urgently" addressing the global overcapacity problems facing the steel sector, including through the eradication of any "market distorting" measures.

How’s Your Life and What Matters Most to You? Going Beyond GDP
Julia Stockdale-Otarola (OECD Insight) Jun 2, 2016
How do you judge your quality of life? What factors matter most to you?

Evolution Not Revolution: Rethinking Policy at the IMF
IMF Survey Jun 2, 2016

How to solve the crisis in Venezuela
Dany Bahar and Miguel Angel Santos (Brookings) Jun 2, 2016
A recovery plan must include international assistance, deregulating controls on foreign currency, and creating incentives for private investment.
The global financial crisis led to a broad rethink of macroeconomic and financial policies in the global academic and policy community. Eight months into the job as IMF Chief Economist, Maury Obstfeld reflects on the IMF’s role in this rethinking and in furthering economic and financial stability.

Greece, Don't Just Sit There. Undo Something.
Phyllis Papadavid (Bloomberg View) Jun 2, 2016
To reap the benefits of privatization, Greece needs to cut the red tape.

Draghi's Message to European Political Leaders
Mohamed Aly El-Erian (Bloomberg View) Jun 2, 2016
The ECB lets governments know that they must start carrying more of the policy burden.

Currency Trader, Police Thyself
Stephen Mihm (Bloomberg View) Jun 2, 2016
A voluntary code of conduct could bring order to these markets.

We're Still Not Sure What Causes Big Recessions
Noah Smith (Bloomberg View) Jun 2, 2016
Is the trigger too much debt or when people start feeling poorer?

Leveraging Islamic Finance for Sustainable Development
Mahmoud Mohieldin (Project Syndicate) Jun 2, 2016
The Middle East’s oil wealth has failed to be translated into broad-based economic development. But the capital that has accumulated in the region’s financial systems could yet play an important role in developing the Muslim world – if Islamic finance is used to its full potential.

How ‘Economists for Brexit’ manage to defy the laws of gravity
Thomas Sampson, Swati Dhingra, Gianmarco I.P. Ottaviano and John Van Reenen (VoxEU) Jun 2, 2016
The ‘Economists for Brexit’ recommend that the UK leaves the EU. Rather than striving for new trade deals, they recommend unilaterally abolishing all trade protection, and predict a subsequent boom of 4%. This rosy forecast stands in sharp contrast with all other economic analysis. This column explains how the modelling on which the group bases its recommendation, from Professor Patrick Minford, fails to grasp basic facts about the nature of international trade and product standards. A more realistic assessment shows that ‘unilateral trade liberalisation’ does very little to offset the steep decline in UK living standards that would follow Brexit.

Evidence of hidden protectionism in the US in the Great Recession
Robert Grundke and Christoph Moser (VoxEU) Jun 2, 2016
When the Great Recession hit the world economy, fears of protectionism led to close monitoring of non-tariff barriers to trade. The increase in US import protection appeared rather modest for all those trade policy measures that do not need to be notified to the WTO. However, stricter enforcement of given product standards does not require any notification. This column argues that the US has increasingly relied on this less transparent and trade-reducing policy instrument during the recent economic crisis.

Europe’s Sullen Child
Jan-Werner Müller (LRB) Jun 2, 2016
The very fact that the Brexit debate is almost exclusively about Britain indicates the extent to which Cameron has removed the UK from the project of determining the Union’s future as a whole.

How China Fell Off the Miracle Path
Ruchir Sharma (NYT) Jun 3, 2016
After years of rapid growth, China has taken on so much debt that its economy is at great risk.

The 2016 Multidimensional Poverty Index was launched yesterday. What does it say?
Duncan Green (FP2P) Jun 3, 2016
The 2016 Multi-Dimensional Poverty Index was published yesterday. It now covers 102 countries in total, including 75 per cent of the world’s population, or 5.2 billion people.

China in Africa, Part II: The Bad
David Volodzko (Diplomat) Jun 3, 2016
Parsing China’s relationship with African dictators, like Robert Mugabe of Zimbabwe.

What's India Got Over China? Plenty.
A Gary Shilling (Bloomberg View) Jun 3, 2016
More emphasis onservices than manufacturing has served India well.

China's Forgetting the Keys to Success
Michael Schuman (Bloomberg View) Jun 3, 2016
Once the ideal student, the country has set aside the textbook for growth.

Windmills and World Trade
Michael Froman (Bloomberg View) Jun 3, 2016
In praise of eliminating tariffs on environmentally friendly products.

Do We Want Powerful Leaders?
Joseph S. Nye (Project Syndicate) Jun 3, 2016
A trend toward greater authoritarianism seems to be spreading worldwide, from Russia and China to the US. And yet, while abuse of power – the ability to cause others to do what we want – is as old as human history, leaders without it cannot lead.

Spurring Private Investment for Development
Nirj Deva (Project Syndicate) Jun 3, 2016
Lifting countries out of poverty requires hard work, the creation of a robust system of property rights, and – crucially – private investment. So it is a shame that multilateral institutions are failing to apply this knowledge systematically in the developing world.

Generation Jobless
Edoardo Campanella (Project Syndicate) Jun 3, 2016
Too many young people in both the developed and developing world are without work. The Biblical warning that idle hands are the devil’s workshop captures an important truth: Youth unemployment is a political as well as an economic challenge.

Populists and Productivity
Nouriel Roubini (Project Syndicate) Jun 3, 2016
According to the view prevailing in Silicon Valley and other global technology hubs, we are entering a new golden era of innovation, one that will radically increase productivity growth and improve the way we live and work. So why haven’t those gains appeared, and what might happen if they don’t?

Confronting the Global Threat to Democracy
Ngaire Woods (Project Syndicate) Jun 3, 2016
Governments have allowed globalization to outpace them, and have permitted a small group of very wealthy individuals to flout the rule of law. If nothing is done to improve global governance, democracy itself could come under threat.

The transatlantic economy: Convergence or divergence?
Moreno Bertoldi, Paolo Pesenti, Hélène Rey and Valérie Rouxel-Laxton (VoxEU) Jun 3, 2016
The issue of whether the US and Eurozone economies are on a convergent or a divergent path remains an open question, and was the topic of a recent conference hosted by the New York Fed. This column summarises the principal themes and findings of the conference discussion. Much will depend on the policy actions that will be taken in the coming years, as well as the modalities and timing of the completion of the Economic and Monetary Union. The issue of whether the US and Eurozone economies are on a convergent or a divergent path remains an open question, and was the topic of a recent conference hosted by the New York Fed. This column summarises the principal themes and findings of the conference discussion. Much will depend on the policy actions that will be taken in the coming years, as well as the modalities and timing of the completion of the Economic and Monetary Union.

Corporate resilience to banking crises
Ross Levine, Chen Lin and Wensi Xie (VoxEU) Jun 3, 2016
There has been much research on the effects of banking crises, but corporate resilience to systemic crises is less well understood. This column uses data from 34 countries from 1990 to 2011 to analyse the role of social trust – societal expectations that people will behave honestly and cooperatively – in building corporate resilience. It finds that social trust facilitates access to trade credit, and dampens the harmful effects of crises on corporate profits and employment. There has been much research on the effects of banking crises, but corporate resilience to systemic crises is less well understood. This column uses data from 34 countries from 1990 to 2011 to analyse the role of social trust – societal expectations that people will behave honestly and cooperatively – in building corporate resilience. It finds that social trust facilitates access to trade credit, and dampens the harmful effects of crises on corporate profits and employment.

How Financial Parasites and Debt Bondage Destroy the Global Economy
Eric Draitser and Michael Hudson (Evonomics) Jun 3, 2016
Interview with economist Michael Hudson

Rethinking the welfare state: Basically flawed
Economist Jun 4, 2016
Proponents of a basic income underestimate how disruptive it would be.

Brexit: a déjà vu?
Alessandro Magnoli Bocchi and Francisco Quintana (RGE Econ Monitor) Jun 3, 2016
History has proven that the United Kingdom (UK) is a reluctant European: it systematically questions – but eventually integrates in – the European Union (EU). On June 23, 2016, a referendum will decide whether the UK should remain in the EU. This is not a first: in 1974, just one year after accession, the Labour party promised – as a way to win the 1975 elections – a referendum on Britain’s withdrawal (Brexit). Once in power and after having obtained significant concessions from its European partners, the Labour government campaigned for the “remain” option, winning an ample majority. In today’s Britain, all this is about to play out again. The Conservative government – after having called for an “in/out” referendum and obtained advantageous EU concessions – is now campaigning for staying in. It will get its wishes: Brexit – an untested, market-unfriendly process – looks unlikely. The economic impact would be severe: in the short term, the UK stock market could drop between 15 and 25 percent and trade volumes would shrink by 2.5 percent per year, despite an above-10 percent exchange rate depreciation. Over the long term, GDP could be 6 percent lower than otherwise. Such an impact would reduce Britain’s global influence and trade ties, and transform the UK into an isolated medium-sized economy.

Climate engineering economics
Garth Heutel, Juan Moreno-Cruz and Katherine Ricke (VoxEU) Jun 4, 2016
At the the Paris Climate Conference in December 2015, it was agreed that annual global temperature increase must be kept below 2 degrees, and a target of a 1.5 degree annual increase was set. Most environmental policies currently focus on emissions reductions and adaptation. This column discusses a new set of technologies collectively known as climate engineering, and explores their potential effectiveness and role in climate change economics. A lot of uncertainty surrounds the costs and effects of climate engineering tools, but it is clear that they would change the optimal levels of emissions reduction currently discussed in literature. At the the Paris Climate Conference in December 2015, it was agreed that annual global temperature increase must be kept below 2 degrees, and a target of a 1.5 degree annual increase was set. Most environmental policies currently focus on emissions reductions and adaptation. This column discusses a new set of technologies collectively known as climate engineering, and explores their potential effectiveness and role in climate change economics. A lot of uncertainty surrounds the costs and effects of climate engineering tools, but it is clear that they would change the optimal levels of emissions reduction currently discussed in literature.

Average working hours: New global dataset
Alexander Bick, Nicola Fuchs-Schündeln and David Lagakos (VoxEU) Jun 4, 2016
The development accounting literature tries to account for cross-country output per worker differences by taking stock of inputs per worker. The data employed are often measured without great precision, however, making comparisons difficult. This column presents a new, internationally comparable dataset of average hours worked per adult across the world income distribution. Adults in poor countries are found to work a lot more and with lower productivity than those in rich countries. The findings suggest that those from poorer countries are not only ‘consumption poor’, but also ‘leisure poor’. The development accounting literature tries to account for cross-country output per worker differences by taking stock of inputs per worker. The data employed are often measured without great precision, however, making comparisons difficult. This column presents a new, internationally comparable dataset of average hours worked per adult across the world income distribution. Adults in poor countries are found to work a lot more and with lower productivity than those in rich countries. The findings suggest that those from poorer countries are not only ‘consumption poor’, but also ‘leisure poor’.

Why the Economic Payoff From Technology Is So Elusive
Steve Lohr (NYT) Jun 5, 2016
Areas like computing and mobile devices have made advances, but the government has reported disappointingly slow growth and continuing stagnation in productivity.

Business has to speak up on the dangers of Brexit
FT View Jun 5, 2016
More voices are needed to warn voters of the risk of leaving the EU.

The eurozone cannot escape political and fiscal union
Wolfgang Münchau (FT) Jun 5, 2016
The idea of crisis resolution through insurance suffers from an internal contradiction.

Federal Reserve: foiled again
Dan Bogler (FT) Jun 5, 2016
As the likelihood of a summer US interest rate rise recedes, EMs can enjoy a boost — for now.

A Close Race in Pro-Growth Peru
Mary Anastasia O'Grady (WSJ) Jun 5, 2016
Two center-right candidates, but one has a more promising economic agenda.

Brexit: Five Economic Myths That Conceal Reality
Kallum Pickering (Globalist) Jun 5, 2016
Whatever outside challenges the UK faces, the source is not the EU.

How Perfect Markets Concentrate Wealth and Strangle Growth and Prosperity
Steve Roth (Evonomics) Jun 5, 2016
The winners have us all playing a loser's game.

Renzi must regain a zeal to reform for Italy’s sake
FT View Jun 6, 2016
The Five Star Movement cannot be defeated by populist gimmicks.

The liberals leading the Brexit charge are riding a statist tiger
Janan Ganesh (FT) Jun 6, 2016
You can see dazzling heterogeneity or many people lying to themselves and each other.

Chinese investors shore up Kazakhstan FDI despite commodity bust
Jacopo Dettoni (FT) Jun 6, 2016
Asian countries are replacing traditional partners Russia and the west.

Bring On the Blockchain Future
Bloomberg View Jun 6, 2016
A technology much loved by anarchists and drug dealers could make the financial system safer.

California Makes America's Economy Great
Matthew A Winkler (Bloomberg View) Jun 6, 2016
The state's economy is not just big, but also booming -- growing faster than any nation. What's the secret?

The Shadow Looming Over China
Christopher Balding (Bloomberg View) Jun 6, 2016
The non-bank financial sector has grown dangerously large and intertwined with commercial banks.

The Overselling of Financial Transaction Taxes
Kenneth Rogoff (Project Syndicate) Jun 6, 2016
However November’s US presidential election turns out, one proposal that will likely live on is the introduction of a financial transaction tax. But a properly designed levy can be no more than a small part of a much larger strategy, whether for reforming the tax system or for regulating financial markets.

Germany’s Strange Turn Against Trade
Marcel Fratzscher (Project Syndicate) Jun 6, 2016
Germany – one of the world's most open and trade-dependent economies – would be among the main economic beneficiaries of the Transatlantic Trade and Investment Partnership between the EU and the US. So why do 70% of Germans oppose the deal?

State aid, bail-in, and systemic financial stability in the EU
Stefano Micossi, Ginevra Bruzzone and Miriam Cassella (VoxEU) Jun 6, 2016
Following the financial crisis, the EU banking system is still plagued by widespread fragilities. This column considers the tools and legal provisions available to EU policymakers to address moral hazard and incentives encouraging excessive risk-taking by bankers. It argues that the new discipline of state aid and the restructuring of banks provide a solid framework towards these ends. However, the application of new rules should not lose sight of the aggregate policy needs of the banking system. Following the financial crisis, the EU banking system is still plagued by widespread fragilities. This column considers the tools and legal provisions available to EU policymakers to address moral hazard and incentives encouraging excessive risk-taking by bankers. It argues that the new discipline of state aid and the restructuring of banks provide a solid framework towards these ends. However, the application of new rules should not lose sight of the aggregate policy needs of the banking system.

Today’s trade policy and trade research
Chad P. Bown and Meredith Crowley (VoxEU) Jun 6, 2016
Free trade is under fire in nations across the world. This column surveys evidence on the importance of trade barriers. There is substantial variation in applied trade policy across countries, industries, and their trading partners, both cross-sectionally and over time. The variation found in these newly available and increasingly detailed databases offer researchers the opportunity to analyse and better understand firm-level trade, aggregate trade, and the shock to the world economy precipitated by China’s phenomenal export growth. Free trade is under fire in nations across the world. This column surveys evidence on the importance of trade barriers. There is substantial variation in applied trade policy across countries, industries, and their trading partners, both cross-sectionally and over time. The variation found in these newly available and increasingly detailed databases offer researchers the opportunity to analyse and better understand firm-level trade, aggregate trade, and the shock to the world economy precipitated by China’s phenomenal export growth.

China's IPO Activity and Equity Market Volatility
Frank Packer and Mark Spiegel (FRBSF Econ Letter) Jun 6, 2016
China has recently considered reforming its regulation of initial public offerings in equity markets. Current policy allows more IPOs in rising markets but restricts new issues in falling markets, possibly to avoid pushing down values of existing stocks. However, recent research finds China’s IPO activity has no effect on stock price changes, perhaps because of the low volume relative to the overall market. As such, cyclical restrictions on IPOs do not appear to have stabilized Chinese markets, so policy reforms may improve market efficiency without increasing volatility.

Capital is not fleeing Britain because of Brexit
Chris Giles (FT) Jun 7, 2016
No need to worry yet — the evidence for a rampant flight from UK banks is feeble.

Painful choices still hang over Greece
Martin Wolf (FT) Jun 7, 2016
The IMF now acknowledges that the programme agreed in 2010 was wildly unrealistic.

Sovereign debt: Curing defaults
Robin Wigglesworth and Elaine Moore (FT) Jun 7, 2016
The payout of $2.4bn from Argentina to Elliott Management spurred efforts to tighten the restructuring process.

Maximizing the Benefits of the Internet Economy
Daniel Sepulveda (OECD Insight) Jun 7, 2016
The open Internet combined with today’s emerging technologies has launched the information revolution and is powering the global digital economy.

Who Needs Factories Anyway?
Michael Schuman (Bloomberg View) Jun 7, 2016
The obsession with manufacturing jobs threatens sound economic policy.

Latin America’s Rising Right
Mohamed A. El-Erian (Project Syndicate) Jun 7, 2016
From changes in government in Argentina and Brazil to mid-course policy corrections in Chile, Latin American politics appears to be undergoing a rightward shift. But unless today’s political winners deliver notably higher and significantly more inclusive growth, their electorates are likely to move on.

The New Backlash Against Globalization
Harold James (Project Syndicate) Jun 7, 2016
There was a palpable sense of discomfort at the latest G7 summit meeting in Ise-Shima, Japan. By the time the leaders of the world’s major developed economies meet again, there is no telling which of them will be populist insurgents.
Andrew Scott Cooper (FP) Jun 7, 2016
The heir to the Saudi throne just pushed through a bold package of reforms designed to free the kingdom from oil addiction by 2030. Here’s why it could backfire, badly.

Synchronisation in business cycles
Paul De Grauwe and Yuemei Ji (VoxEU) Jun 7, 2016
There is a high degree of correlation between the business cycles of different countries. This is particularly the case in the Eurozone, but also among industrialised countries outside of the Eurozone. Using a two-country behavioural macroeconomic model, this column shows that the main channel for the synchronisation of business cycles is the propagation of ‘animal spirits’ – waves of optimism and pessimism that become correlated internationally. There is a high degree of correlation between the business cycles of different countries. This is particularly the case in the Eurozone, but also among industrialised countries outside of the Eurozone. Using a two-country behavioural macroeconomic model, this column shows that the main channel for the synchronisation of business cycles is the propagation of ‘animal spirits’ – waves of optimism and pessimism that become correlated internationally.

Saudi Arabia’s First Step Is Admitting It Has an Oil Problem

Avoiding another Eurozone Crisis: Part I
Mike Wickens (VoxEU) Jun 7, 2016
European Monetary Union was designed to promote economic growth, price stability, full employment, and political integration. It can be argued that so far, it has achieved none of these and has in fact made things worse. The Five Presidents' Report contained a set of proposals for making the single currency sustainable, based on giving up more national independence. This column – the first in a two-part series asking whether future crises might be avoided through market forces without the need for the sort of procrustean proposals offered in the Report – examines the causes of the Eurozone Crisis. European Monetary Union was designed to promote economic growth, price stability, full employment, and political integration. It can be argued that so far, it has achieved none of these and has in fact made things worse. The Five Presidents' Report contained a set of proposals for making the single currency sustainable, based on giving up more national independence. This column – the first in a two-part series asking whether future crises might be avoided through market forces without the need for the sort of procrustean proposals offered in the Report – examines the causes of the Eurozone Crisis.

Artificial intelligence and employment
Masayuki Morikawa (VoxEU) Jun 7, 2016
The substitution of human labour by artificial intelligence and robots is a keenly debated topic. Some claim that a substantial share of jobs is at risk, while others argue that computers and robots will lead to product innovations and hence to unimaginable new occupations. This column uses a survey of Japanese firms to examine the impact of AI-related technologies on business and employment. Overall, firms expect a positive impact on business but a negative impact on employment. Firms with a highly skilled workforce, however, have a more optimistic view than firms with lower skilled employees. The substitution of human labour by artificial intelligence and robots is a keenly debated topic. Some claim that a substantial share of jobs is at risk, while others argue that computers and robots will lead to product innovations and hence to unimaginable new occupations. This column uses a survey of Japanese firms to examine the impact of AI-related technologies on business and employment. Overall, firms expect a positive impact on business but a negative impact on employment. Firms with a highly skilled workforce, however, have a more optimistic view than firms with lower skilled employees.

Europe finally opens up to its neighbourhood
FT View Jun 8, 2016
Brussels is framing a collective response to the migration crisis.

Emerging markets find it hard to play catch-up
FT View Jun 8, 2016
Fewer developing nations are converging with the rich economies.

Nigerian economy drops further into freefall
William Wallis (FT) Jun 8, 2016
It is unclear who will come to the rescue — it is unlikely to be bond markets.

China's Market Economy Status and Antidumping: A $100 Billion, $10 Billion, or $1 Billion Dispute? Part 1
Chad P. Bown (PIIE) Jun 8, 2016
Despite its success as an export powerhouse, China has long protested that it has been relegated to the status of a “non-market economy” (NME) by the United States and the European Union (EU).

China's Market Economy Status and Antidumping: A $100 Billion, $10 Billion, or $1 Billion Dispute? Part 2
Chad P. Bown (PIIE) Jun 8, 2016
As discussed in part 1 of this blog, China is demanding that after December 2016, the European Union (EU) and the United States must cease designating it as a non-market economy (NME) in investigations over whether it is “dumping” products like steel, paper, aluminum and dozens of other exports.

China Has a Robot Problem
Adam Minter (Bloomberg View) Jun 8, 2016
Big bets on automation aren't paying off.

IMF Go Home
Daniel Gros (Project Syndicate) Jun 8, 2016
Eurozone finance ministers and the IMF have agreed with Greece to begin providing some debt relief to the country, and to release $10.3 billion in bailout funds. But all parties would have been better off had the IMF been cut out of the deal, in favor of greater reliance on European loans.

Let’s Get Fiscal
Bill Emmott (Project Syndicate) Jun 8, 2016
It may be true that there is no gain without pain, but there can be pain without gain – a lesson that Western populations have been learning the hard way since at least 2012. Years of fiscal austerity in the US, Europe, and Japan have achieved nothing, and it is time for governments to start spending again.

The Working Women Windfall
Rakesh Mohan and Anu Madgavkar (Project Syndicate) Jun 8, 2016
Narrowing the global gender gap would have huge potential economic benefits. If every government helped its citizens catch up to the country in its region that has made the fastest strides toward economic gender parity, the total annual payoff in additional GDP could reach $12 trillion in 2025.

The Conservative Case Against Brexit
Dalibor Rohac (FA) Jun 8, 2016
Euroskepticism's biggest fallacy.

Avoiding another Eurozone Crisis: Part II
Mike Wickens (VoxEU) Jun 8, 2016
This second column in a two-part series takes a closer look at the proposals in the Five Presidents’ Report for Fiscal, Banking, and Capital Markets Unions and much closer political integration among Eurozone countries. It goes on to give evidence of the failure of financial markets to price risk correctly prior to the Eurozone Crisis. By pricing risks better, financial markets may be able to provide the discipline required to avoid future crises in the Eurozone without the need for greater political interference in national fiscal policy-making as proposed in the Report. This second column in a two-part series takes a closer look at the proposals in the Five Presidents’ Report for Fiscal, Banking, and Capital Markets Unions and much closer political integration among Eurozone countries. It goes on to give evidence of the failure of financial markets to price risk correctly prior to the Eurozone Crisis. By pricing risks better, financial markets may be able to provide the discipline required to avoid future crises in the Eurozone without the need for greater political interference in national fiscal policy-making as proposed in the Report.

If you want more equality, you have to embrace the risk premium
Hans-Jörg Naumer (VoxEU) Jun 8, 2016
The line of argument in Thomas Piketty’s book, Capital in the Twenty-First Century, revolves around an inequality formula according to which the rate of return on capital exceeds overall economic growth. But this overlooks the fact that different rates of return can be expected from different kinds of investment. This column argues that this is the driver of inequality. If you want more equality, you have to embrace the risk premium. The line of argument in Thomas Piketty’s book, Capital in the Twenty-First Century, revolves around an inequality formula according to which the rate of return on capital exceeds overall economic growth. But this overlooks the fact that different rates of return can be expected from different kinds of investment. This column argues that this is the driver of inequality. If you want more equality, you have to embrace the risk premium.

Language and migration
Virginia Di Nino (VoxEU) Jun 8, 2015
Europe’s refugee crisis has reopened debates about people’s choice of destination when migrating. A particular concern is the extent to which migrants select a host country based on employment prospects and the safety and openness of the society. This column presents evidence of an additional influence – the degree of similarity between migrants’ mother tongues and the language spoken in destination countries. This preference for ‘linguistic proximity’ matters less when migrants move to English-speaking countries.

Coping with a world of too much Chinese steel
FT View Jun 9, 2016
Tariffs on subsidised imports need a cautious and balanced approach.

Brexiters’ idea of unilateral free trade is a dangerous fantasy
Martin Wolf (FT) Jun 9, 2016
The EU’s regulatory harmonisation is not a perfidious plot against consumers

Emerging markets poised for ‘rebound’
Steve Johnson (FT) Jun 9, 2016
Balance of payments surpluses and improving credit conditions to bolster growth.

China Should Shut Down Zombie Businesses to Help the Economy
NYT Jun 9, 2016
Unprofitable enterprises are being kept alive by the government’s reluctance to act.

Beware the Economic Allure of the Strongman
Ruchir Sharma (WSJ) Jun 9, 2016
China’s example has led some to believe that authoritarians are better for growth. The evidence favors democracies.

Global Steel Crisis Overshadows US-China Annual Meet
Bridges, Volume 20, Number 21 Jun 9, 2016
The global steel crisis took centre stage during an annual meeting between US and Chinese officials, with the two sides openly sparring over the source of the problem and ultimately agreeing to hold further discussions with other international partners, including under a possible "global steel forum."

Current, Future Trade Deals in Focus at Paris Ministerial Gathering
Bridges, Volume 20, Number 21 Jun 9, 2016
Making progress in current and future trade negotiations was touted as a valuable way for increasing productivity and generating inclusive growth, according to a joint ministerial communiqué issued following the annual forum of the Organisation for Economic Co-operation and Development (OECD) in Paris, France.

Brexit and the Law of Unexpected Consequences
John Weeks (Pieria) Jun 9, 2016
The exit of Britain could contribute not to disintegration but a consolidation of authoritarian governance in the European Union.

European Integration With or Without Britain
Kemal Dervis (Project Syndicate) Jun 9, 2016
When British Prime Minister David Cameron agreed with the EU in February on revised membership terms for the UK, he insisted that the EU be recognized officially as a “multi-currency union.” The muddled way his demand was fulfilled reflects enduring confusion about how such a union can function.

Innovation Is Not Enough
Dani Rodrik (Project Syndicate) Jun 9, 2016
We seem to be living in an accelerated age of revolutionary technological breakthroughs. But the economic consequences of any innovation ultimately depend on how quickly it diffuses through labor and product markets.

Tech Jobs for Africa
Bruce Krogh and Jonathan Ledgard (Project Syndicate) Jun 9, 2016
For Africans, the free products on offer from technology companies have been useful, and in some cases – such as mapping and social media – they have been transformative. But for Africans interested in a tech industry job, the prospects are bleak.

Does Europe Need Brexit?
Alan Stoga (YaleGlobal) Jun 9, 2016
The shocks of Brexit could galvanize a smaller EU toward integration, common institutions and direct elections

The All-American iPhone
Konstantin Kakaes (MIT Tech Review) Jun 9, 2016
Political candidates opposed to free trade say Apple should make phones in the United States. Let’s see what that would look like.

Mispricing corrections: The asset management industry
Mariassunta Giannetti and Bige Kahraman (VoxEU) Jun 9, 2016
Theoretical corrections of price deviations in trade are not reflected in empirical evidence. This is surprising because institutional investors should be able be able to identify mispricing. This column explores how the organisation of the asset management industry may hamper trading against mispricing. Asset managers that are less subject to redemption risk exhibit a higher propensity to trade against mispricing. Organisational structures lowering the sensitivity of investor flows to performance strengthen asset managers’ incentives to trade against mispricing. Theoretical corrections of price deviations in trade are not reflected in empirical evidence. This is surprising because institutional investors should be able be able to identify mispricing. This column explores how the organisation of the asset management industry may hamper trading against mispricing. Asset managers that are less subject to redemption risk exhibit a higher propensity to trade against mispricing. Organisational structures lowering the sensitivity of investor flows to performance strengthen asset managers’ incentives to trade against mispricing.

Regional Convergence in China
Jan Zilinsky (PIIE) Jun 10, 2016
Six years ago, all of China’s regions were still growing at a real rate of 10 percent or more. Taking into account population growth to capture improvements in productivity, 26 out of China’s 31 regions expanded by at least 10 percent (in real per capita terms) at the time.

The End of the U.S. Manufacturing Renaissance (Such as It Was)
Conor Sen (Bloomberg View) Jun 10, 2016
What's hurting employment growth in this sector? There are lots of openings, but there's not a lot of hiring.

Saudi Arabia's Reform Plans Are Too Timid
Leonid Bershidsky (Bloomberg View) Jun 10, 2016
The kingdom hopes to break its oil dependence without investing enough in human capital.

The Resistible Rise of Populism
Project Syndicate Jun 10, 2016
Populism has historically been a slippery phenomenon, sometimes focused squarely on economic grievances, but often exploiting such grievances to advance a chauvinist political agenda. That is also true today, when populist movements are gaining ground in Europe and the US, even as they and their leaders are being forced from power in Latin America.

A Tale of Two Debt Write-Downs
Adair Turner (Project Syndicate) Jun 10, 2016
Greece and Japan have debt burdens that are unsustainable, and other countries are likely to suffer a similar fate. While it would have been better if these countries had never allowed excessive debt to mount, it is time to recognize that many debts, both public and private, simply cannot be repaid.

Russia and the Post-Oil Economy
Vitaly Kazakov (Project Syndicate) Jun 10, 2016
It would be a mistake for countries like Russia to assume that oil prices will rise again. The recent drop in the cost of a barrel of oil is indicative of an unprecedented structural change in the energy sector – one that will have significant political implications for petroleum-producing countries.

The Brexit referendum and sterling
Stefan Gerlach and Edoardo Di Giamberardino (VoxEU) Jun 10, 2016
The outcome of the UK’s referendum on EU membership could have a significant effect on sterling. This column estimates the potential size of this effect by looking at the relationship between daily changes in the sterling exchange rate and bookmakers’ odds of Brexit. Movements of between 5% and 15% seem plausible. The outcome of the UK’s referendum on EU membership could have a significant effect on sterling. This column estimates the potential size of this effect by looking at the relationship between daily changes in the sterling exchange rate and bookmakers’ odds of Brexit. Movements of between 5% and 15% seem plausible.

Multi-destination firms and the effect of exchange rate volatility trade
Jérôme Héricourt and Clément Nedoncelle (VoxEU) Jun 11, 2016
The idea that exchange rate volatility generates additional costs and uncertainty that are detrimental to international trade is widely accepted. This column argues that big, multi-destination firms – which account for the bulk of aggregate exports – reallocate exports across countries as a foreign exchange hedge. When bilateral volatility increases relative to multilateral volatility, exports towards the considered market are hampered, but exports remain mainly unchanged at the macro level. The idea that exchange rate volatility generates additional costs and uncertainty that are detrimental to international trade is widely accepted. This column argues that big, multi-destination firms – which account for the bulk of aggregate exports – reallocate exports across countries as a foreign exchange hedge. When bilateral volatility increases relative to multilateral volatility, exports towards the considered market are hampered, but exports remain mainly unchanged at the macro level.

Trade finance around the world
Friederike Niepmann and Tim Schmidt-Eisenlohr (VoxEU) Jun 11, 2016
To mitigate the risks of international trade for firms, banks offer trade finance products – specifically, letters of credit and documentary collections. This column exploits new data from the SWIFT Institute to establish key facts on the use of these instruments in world trade. Letters of credit (documentary collections) cover 12.5% (1.7%) of world trade, or $2.3 trillion ($310 billion). To mitigate the risks of international trade for firms, banks offer trade finance products – specifically, letters of credit and documentary collections. This column exploits new data from the SWIFT Institute to establish key facts on the use of these instruments in world trade. Letters of credit (documentary collections) cover 12.5% (1.7%) of world trade, or $2.3 trillion ($310 billion).

Pooled sovereignty has advanced national goals
FT View Jun 12, 2016
The union is a platform from which Britain can promote its interests.

Kazakh leader needs to address real grievances
FT View Jun 12, 2016
Any domestic instability could have repercussions internationally.

A modest proposal on quantitative easing to soothe warring sides
Reza Moghadam (FT) Jun 12, 2016
Delinking European banks from their sovereigns would diversify debt portfolios.

If Brexit wins out, let Britain go in peace
Wolfgang Munchau (F)T Jun 12, 2016
A nation’s wealth rests on its skills and policies — it is hard to see how leaving would change that.

China’s stock market: an elephant among rabbits
Jennifer Hughes (FT) Jun 12, 2016
MSCI inclusion or not, China is too big to treat as another emerging market.

One Chinese City Has Figured Out the Future
Christopher Balding (Bloomberg View) Jun 12, 2016
If China's leaders want to innovate, they should look to Shenzhen once again.

The global diffusion of ideas
Francisco Buera and Ezra Oberfield (VoxEU) Jun 12, 2016
Free trade often comes hand in hand with economic growth. The opportunity for gain is relatively small, according to quantitative models that rely on standard static mechanisms. This column introduces a model to study the diffusion of ideas across countries as a means of increasing productivity, and a quantitative assessment of the role of trade in the transmission of knowledge. How much the transmission of knowledge will impact productivity depends on the openness of the trading countries, current stock of knowledge, and a diffusion parameter. Free trade often comes hand in hand with economic growth. The opportunity for gain is relatively small, according to quantitative models that rely on standard static mechanisms. This column introduces a model to study the diffusion of ideas across countries as a means of increasing productivity, and a quantitative assessment of the role of trade in the transmission of knowledge. How much the transmission of knowledge will impact productivity depends on the openness of the trading countries, current stock of knowledge, and a diffusion parameter.

Bank competition at the zero lower bound
Michiel van Leuvensteijn, Adrian van Rixtel and Bing Xu (VoxEU) Jun 12, 2016
The unprecedented accommodative monetary policy stance implemented across the world in recent years has pushed interest rates to the zero lower bound, and even into negative territory. Based on an analysis of regulated floors and ceilings in bank loan and deposit interest rates in China, this column argues that when lending rates are close to regulatory imposed floors and hence cannot fall much further, the measurement of bank competition using more traditional measures of competition is flawed. This is important because lower bank competition has detrimental effects on the pass–through of interest rate changes and reduces risk-taking by banks. The unprecedented accommodative monetary policy stance implemented across the world in recent years has pushed interest rates to the zero lower bound, and even into negative territory. Based on an analysis of regulated floors and ceilings in bank loan and deposit interest rates in China, this column argues that when lending rates are close to regulatory imposed floors and hence cannot fall much further, the measurement of bank competition using more traditional measures of competition is flawed. This is important because lower bank competition has detrimental effects on the pass–through of interest rate changes and reduces risk-taking by banks.

Turkish corporate debt: ‘a few shocks away’ from a crisis
Jonathan Wheatley (FT) Jun 13, 2016
Rapid growth of foreign currency debt leaves groups exposed to dollar shortages and policy mis-steps.

Greece needs a new deal with its European partners
Yannis Stournaras (FT) Jun 13, 2016
It is time to strike the right balance between reforms and debt relief.

Britain: A time to lead rather than leave the EU?
Philip Stephens (FT) Jun 13, 2016
The European debate with its questions of history and sovereignty has not changed much since 1960.

Peru Keeps Driving Right
WSJ Jun 13, 2016
The Latin American success story elects a center-right reformer.

Northern Europe’s Argentina Imitator
James K. Glassman (WSJ) Jun 13, 2016
Iceland tells bondholders to take a severe discount, sending a chilling message to foreign investors.

Productivity, Inequality, and Economic Rents
Jason Furman (RegBlog) Jun 13, 2016
Productivity is slowing and inequality is growing. Here’s what’s causing it.

This Woman Holds the Key to the Fate of Brazil
Mac Margolis (Bloomberg View) Jun 13, 2016
An obscure congresswoman is left to decide the course of the nation's anti-corruption campaign.

The Unloved Euro
Mark Gilbert (Bloomberg View) Jun 13, 2016
More than bragging rights are at stake in the global currency market.

Rethinking Robin Hood
Angus Deaton (Project Syndicate) Jun 13, 2016
While globalization has harmed some people in rich countries, as factories and jobs migrated to where labor is cheaper, this has always seemed to be an ethically acceptable price to pay, because those who were losing were already so much wealthier (and healthier) than those who were gaining. But is that still true?

Tips for the TTIP
Ana Palacio (Project Syndicate) Jun 13, 2016
After three years of negotiating, the US-EU Transatlantic Trade and Investment Partnership is simply not where it needs to be – and, without public support, it never will be. Shifting popular opinion will require changes in how trade is conducted and how society adjusts to openness and progress.

Leading, not Leaving, Europe
Gordon Brown (Project Syndicate) Jun 13, 2016
When Britain holds its referendum on continued EU membership on June 23, it should demonstrate that its future lies in Europe. By embracing the reality that cooperation will achieve more than isolation, it can devise a bold agenda for the UK Presidency of the EU in 2017 and usher in an era of greater cross-border engagement.

On the Brink: How a Brexit Could Fracture a Fragile Europe
Mauro Guillen (K@W) Jun 13, 2016
A U.K. exit from the European Union could tip the struggling region into recession.

Persistence of foreign ownership benefits
Beata Javorcik and Steven Poelhekke (VoxEU) Jun 13, 2016
The superior performance of foreign affiliates has been well documented, with foreign ownership bringing boosts to productivity, exports and innovation. This column uses data from Indonesia on foreign affiliates that were sold by their parents to local owners to examine how persistent these benefits are. The superior performance of foreign affiliates observed around the world appears to be driven by continuous injections of headquarter services from the parent company to their overseas affiliates, rather than to a one-time knowledge and know-how transfer. The superior performance of foreign affiliates has been well documented, with foreign ownership bringing boosts to productivity, exports and innovation. This column uses data from Indonesia on foreign affiliates that were sold by their parents to local owners to examine how persistent these benefits are. The superior performance of foreign affiliates observed around the world appears to be driven by continuous injections of headquarter services from the parent company to their overseas affiliates, rather than to a one-time knowledge and know-how transfer.

Why East Germany did not become the next Mezzogiorno
Andrea Boltho, Wendy Carlin and Pasquale Scaramozzino (VoxEU) Jun 13, 2016
Since Italy’s monetary unification some 155 years ago, income per capita in the South (the Mezzogiorno) has fallen from virtually the same level as in the Centre-North to little more than 55% of the Centre-North’s level. This column asks why East Germany hasn’t suffered the same fate since German monetary unification 25 years ago. East Germany is not like the Mezzogiorno because of labour market flexibility, different evolutions of the tradeable sector, and the weight of history. Since Italy’s monetary unification some 155 years ago, income per capita in the South (the Mezzogiorno) has fallen from virtually the same level as in the Centre-North to little more than 55% of the Centre-North’s level. This column asks why East Germany hasn’t suffered the same fate since German monetary unification 25 years ago. East Germany is not like the Mezzogiorno because of labour market flexibility, different evolutions of the tradeable sector, and the weight of history.

The eurozone is no obstacle to UK growth
FT View Jun 14, 2016
A vote to leave would destabilise Britain’s main trading partner.

Brexit imperils the confidence of strangers
Martin Wolf (FT) Jun 14, 2016
The uncertainty caused by a vote to leave the EU might trigger a sharp turnround in capital flows.

The Remain camp seeks an answer to the free movement question
James Blitz (FT) Jun 14, 2016
Europe’s leaders must signal a willingness to make last-minute concessions.

Takata highlights the decline of keiretsu
Kana Inagaki (FT) Jun 14, 2016
Crisis-hit air bag manufacturer can no longer count on Japanese carmakers for help.

Is the Brexit camp about to triumph?
Robert J. Samuelson (WP) Jun 14, 2016
A shift in popular opinion for Britain to exit the European Union is unmistakable.

Can Venezuela be helped off the ledge?
David Ignatius (WP) Jun 14, 2016
Regional powers work to improve the improve the political situation in the troubled nation, without the U.S. shouldering the burden.

Madame Park Goes to Africa
Marcus Noland (PIIE) Jun 14, 2016
In this bidding war, the victor is preordained.

Ivory Tower Economists, Free Trade, and Workplace Woes
Gary Clyde Hufbauer (PIIE) Jun 14, 2016
In the midst of debate over the Trans-Pacific Partnership (TPP) and Donald Trump’s promise to impose high tariffs on imports from Mexico and China, media commentators commonly assert that ivory tower economists have acclaimed free trade pacts but ignored workers who were victims of the North American Free Trade Agreement (NAFTA) and other trade deals.

How National Governments Are Corrupted Systemically
Frank Vogl (Globalist) Jun 14, 2016
Breaking the ties between organized crime and official corruption.

Europe Can't Outsource Its Migrant Crisis
Bloomberg View Jun 14, 2016
There are problems with its new plan to stop migrants from leaving home.

As Central Banks Meet, Japan's Faces the Toughest Dilemma
Mohamed Aly El-Erian (Bloomberg View) Jun 14, 2016
After trying negative interest rates, few tools remain for bolstering the economy.

We're Better Off With the Fed's Dot Plot
Carl J Riccadonna (Bloomberg View) Jun 14, 2016
The central bank's forecast of interest rates is a key tool for understanding monetary policy. Abandoning it would be a mistake.

A Lost Decade? We Should Be So Lucky
Satyajit Das (Bloomberg View) Jun 14, 2016
For many countries today, a Japan-style slump could be the best-case scenario.

Learning from Namibia
Joseph E. Stiglitz and Anya Schiffrin (Project Syndicate) Jun 14, 2016
Sandwiched between Angola and South Africa, Namibia shows that even countries that start with serious disadvantages – extremes of racism, colonialism, inequality, and underdevelopment – can chart a path toward shared prosperity. Its achievement deserves international recognition – and emulation.

Financial Scarcity Amid Plenty
Barry Eichengreen (Project Syndicate) Jun 14, 2016
With interest rates at all-time lows and central banks buying everything that moves, the world is awash with credit. Yet, paradoxically, a dangerous shortage of international liquidity is putting the global economy at risk.

Bridging the Infrastructure Gap
Dominic Barton (Project Syndicate) Jun 14, 2016
Too many countries have been underinvesting in infrastructure for decades, resulting in everyday inconveniences and, worse, creating roadblocks to economic growth. While a major infusion of funding is needed to address infrastructure gaps, finding the money is only part of the solution.

No, Paris Will Never Be the New London
Ian Harris (FP) Jun 14, 2016
With Brexit looming, France, Germany, and other European financial centers are rolling out the red carpet for London’s banks and trading houses. It’s a fool’s errand.

The Era of Cheap Oil Is Coming to an End
Keith Johnson (FP) Jun 14, 2016
Prices have been low for more than two years. With demand rising and supply falling, that’s all beginning to change.

Recent perspectives on the economics of the UK-EU relationship
Nauro F. Campos and Fabrizio Coricelli (VoxEU) Jun 14, 2016
The partnership between the UK and the EU has famously been described as “awkward”. A benefit of the Brexit debate is that it has spawned an enormous amount of research addressing issues surrounding the relationship that have been taken for granted for probably too long. This column takes stock of new research presented at a recent conference on the UK-EU relationship. The partnership between the UK and the EU has famously been described as “awkward”. A benefit of the Brexit debate is that it has spawned an enormous amount of research addressing issues surrounding the relationship that have been taken for granted for probably too long. This column takes stock of new research presented at a recent conference on the UK-EU relationship.

A landscape that Columbus would recognise
William F. Maloney and Felipe Valencia Caicedo (VoxEU) Jun 14, 2016
The persistence of economic fortune over the long run has been the subject of intense research. This column investigates the persistence of patterns of economic activity in the Americas at the sub-national level over the last half millennium. The location of today’s prosperous cities and regions within each country is closely correlated with the location of indigenous population centres before the arrival of Christopher Columbus in 1492. Policymakers seeking to make radical changes in the spatial distribution of economic activity should be mindful of the centuries-old, even pre-colonial, forces working against them. The persistence of economic fortune over the long run has been the subject of intense research. This column investigates the persistence of patterns of economic activity in the Americas at the sub-national level over the last half millennium. The location of today’s prosperous cities and regions within each country is closely correlated with the location of indigenous population centres before the arrival of Christopher Columbus in 1492. Policymakers seeking to make radical changes in the spatial distribution of economic activity should be mindful of the centuries-old, even pre-colonial, forces working against them.

Poland’s anti-free-market plan is not as radical as it sounds
Tony Barber (FT) Jun 15, 2016
The attack on economic liberalism looks like cover for a more moderate proposal.

Commodities: Noble’s House of woe
David Sheppard and Neil Hume (FT) Jun 15, 2016
Asia commodity titan brought to its knees by accounting questions, leverage and weak markets.

Are Financial Markets Too Complacent About the Global Economy?
Neil Irwin (NYT) Jun 15, 2016
Despite plenty of reasons to reflect anxiety, they’ve remained fairly calm.

Korea-China FTA Entails Limited Benefits For Autos
Euijin Jung (PIIE) Jun 15, 2016
The free trade agreement (FTA) signed by Korea and China in late 2015 covers almost $300 billion in trade in goods and services, but it excludes several tariffs from full liberalization, including several manufacturing goods, such as automobiles, electronics, steel, and petrochemical products.

Popping the Rice Price Bubble
Kimberly Ann Elliott (CGD) Jun 15, 2016
In India, the price of onions is an election issue, so ubiquitous are they in the nation’s cooking. Regularly, around the world, poor consumers face extra hardship as the prices of basic foodstuffs seesaw. Global food security is an area CGD has worked on for many years, and back in mid-2008, we tried to help figure out a solution to the skyrocketing price of a major staple.

China's Better Off Playing by the Rules
Michael Schuman (Bloomberg View) Jun 15, 2016
Accommodating China shouldn't mean bending the global system.

Secrets of the Sharing Economy
Justin Fox (Bloomberg View) Jun 15, 2016
A discussion about the future of crowd-based capitalism.

China Sends Bubbles to North America
Noah Smith (Bloomberg View) Jun 15, 2016
An influx of Chinese cash has buoyed housing prices in Canada. The U.S. could be next.

The Myth of Germany's EU Dominance
Leonid Bershidsky (Bloomberg View) Jun 15, 2016
Europe's largest economy is only allowed to lead when it puts its money on the line. (And even then, there's pushback.)

Butter Before Guns, Mr. Modi
Mihir Sharma (Bloomberg View) Jun 15, 2016
Even as strategic ties to the U.S. improve, economic relations are lagging.

Putin’s Illusion of Reform
Nina L. Khrushcheva (Project Syndicate) Jun 15, 2016
Russia's president has brought Alexei Kudrin, a former finance minister known for his liberal views, back to the Kremlin to shore up his own pro-reform bona fides. But no one should believe that he is prepared to lead the economic modernization effort that Russia so badly needs.

What’s the Matter With Austria?
Dalia Marin (Project Syndicate) Jun 15, 2016
Austria's economic stagnation played a major role in the near-victory of the far-right Freedom Party in last month's presidential election. The economy's troubles, it turns out, can be traced to how the country engaged with Central and Eastern Europe after the fall of Communism.

The Monetary Policy Origins of the Eurozone Crisis
David Beckworth (Mercatus) Jun 15, 2016
The standard view of the economic tragedy of the Eurozone crisis is that the crisis was caused by a buildup of private and public debt that was amplified by the imposition of austerity measures. Upon closer examination, it becomes evident that excessively tight monetary policy was the real culprit in the sharp economic decline of 2008 and 2010–2011.

New questions about the Financial Crisis Inquiry Commission
Peter J. Wallison (AEI) Jun 15, 2016
The report of the Financial Crisis Inquiry Commission (FCIC) is frequently cited as the authoritative source for the causes of the 2008 crisis, but its key findings are contradicted by documents in its own files that were never disclosed in its final report. By 2008, most mortgages in the US were subprime or otherwise weak. Of these risky loans, 76 percent were on the books of government agencies, principally Fannie Mae and Freddie Mac. The FCIC claimed that Fannie and Freddie bought these loans primarily because they were profitable, and not because of the government’s housing policies—particularly the affordable housing goals. However, the FCIC documents discussed in this paper show that Fannie and Freddie knew these loans would be unprofitable and in some cases loss-producing. As a government study commission, the FCIC failed in its obligation to report fairly on all the evidence it collected, not just the evidence for the story it wanted to tell.

Nigeria changes course with painful devaluation
FT View Jun 16, 2016
The CBN’s move should allow the economy to right itself.

Poland should take care in rebalancing economy
FT View Jun 16, 2016
Market principles have delivered striking success over two decades.

EM debt threatens growth despite signs of pick-up
Jonathan Wheatley (FT) Jun 16, 2016
IIF says profits and productivity at risk as EM creditworthiness deteriorates.

The finance geeks must have their say on Brexit
Gillian Tett (FT) Jun 16, 2016
As with Lehman, technical points apparent only to experts can set off unpredictable chain reactions.

Countdown to "Brexit" Vote Stokes Fears of Economic Backlash
Bridges, Volume 20, Number 22 Jun 16, 2016
As next week’s referendum on the UK's future in the European Union fast approaches, the debate over the economic implications of a "Brexit" has reached even greater heights, with polls indicating mixed feelings among its citizens on whether to leave or stay.

Southern African Countries, EU Sign Trade Deal
Bridges, Volume 20, Number 22 Jun 16, 2016
On 10 June, six countries from the Southern African Development Community (SADC) – specifically, Botswana, Lesotho, Mozambique, Namibia, South Africa, and Swaziland – signed an Economic Partnership Agreement (EPA) with the EU in Kasane, Botswana.

Managing Spillovers—Striking the Right Balance of Domestic Objectives and External Stability
Christine Lagarde (IMF) Jun 16, 2016
It used to be that advanced economies were the sources of spillovers. For example, monetary policy in the United States, Europe, and Japan has always had an impact on capital flows to emerging markets. This certainly continues, except that now we also have emerging economies as emitters of spillovers, both regionally and globally. Think of China, Russia or Brazil.

After Brexit: Now It's Italy's turn
Daniel Stelter (Globalist) Jun 16, 2016
Germany will have to change its policies if it wants to avoid exit of other countries from the eurozone.

Europe’s Arduous Climb Out of a Deep Economic Hole
Jan Zilinsky (PIIE) Jun 16, 2016
It may be less of a rebound than a half-hearted bounce. But at least some of Europe’s economies are crawling out of a longstanding rut.

The World’s Ins and Outs
Lucy P. Marcus (Project Syndicate) Jun 16, 2016
As the UK’s debate about whether to withdraw from the EU has heated up, “in” and “out” have come to define the stark choice facing voters in the “Brexit” referendum on June 23. The British are not alone: the world is increasingly divided between the mentalities underpinning support for the “Leave” and “Remain” campaigns.

American growth and inequality since 1700
Peter H. Lindert and Jeffrey G. Williamson (VoxEU) Jun 16, 2016
Americans have long debated when the country became the world’s economic leader, when it became so unequal, and how inequality and growth might be linked. Yet those debates have lacked the quantitative evidence needed to choose between competing views. This column introduces evidence on American incomes per capita and inequality for two centuries before World War I. American history suggests that inequality is not driven by some fundamental law of capitalist development, but rather by episodic shifts in five basic forces: demography, education policy, trade competition, financial regulation policy, and labour-saving technological change. Americans have long debated when the country became the world’s economic leader, when it became so unequal, and how inequality and growth might be linked. Yet those debates have lacked the quantitative evidence needed to choose between competing views. This column introduces evidence on American incomes per capita and inequality for two centuries before World War I. American history suggests that inequality is not driven by some fundamental law of capitalist development, but rather by episodic shifts in five basic forces: demography, education policy, trade competition, financial regulation policy, and labour-saving technological change.

Rules of the monetary game
Prachi Mishra (VoxEU) Jun 16, 2016
All monetary policies have external spillover effects. However, the domestic mandates of most central banks may not legally allow them to take spillovers into account, and may force them to undertake aggressive policies so long as they have some small positive domestic effect. This column looks at the rules of the game for responsible policy in such a context. It proposes a ‘traffic light’ system to identify policies that should be encouraged by the international community, policies that should be used temporarily and with care, and policies that should be avoided at all costs. All monetary policies have external spillover effects. However, the domestic mandates of most central banks may not legally allow them to take spillovers into account, and may force them to undertake aggressive policies so long as they have some small positive domestic effect. This column looks at the rules of the game for responsible policy in such a context. It proposes a ‘traffic light’ system to identify policies that should be encouraged by the international community, policies that should be used temporarily and with care, and policies that should be avoided at all costs.

Uncertainty Clouds the United Kingdom’s Economic Prospects
IMF Survey Jun 17, 2016
The economy of the United Kingdom has performed well in recent years, but it faces important challenges and risks, according to the IMF’s just-published annual health check of the U.K. economy and its periodic report on the financial sector.

Australia Foreign Debt Reaches Crisis Proportions
Philip Bowring (Asia Sentinel) Jun 17, 2016
Sliding Oz dollar doesn't help exports.

Getting a Grip on Migration
Mark Leonard (Project Syndicate) Jun 17, 2016
Some 240 million people today are living outside their country of birth – enough to form the world’s fifth most populous country. And yet, while few topics are more politically salient, international migration is – almost by definition – one of the most difficult issues for nation-states to address effectively.

The Gulf States’ Expat Dividend
Sami Mahroum (Project Syndicate) Jun 17, 2016
The extraordinarily high proportion of foreign labor in the Gulf states is often considered problematic, because it threatens local cultures and national identities, holds down wages, and impedes the development of domestic skills and talent. But the Gulf States’ large foreign populations aren't just workers; they're also consumers.

A Good Economy for China
Edmund S. Phelps (Project Syndicate) Jun 17, 2016
Optimizing its resource allocation is far from all that China must do to boost prosperity. It is time to focus on workers and elevating the experience of their labor, the importance of which economists from Adam Smith to Karl Marx and Alfred Marshall have placed at the center of their concerns.

Brexit’s Impact on the World Economy
Anatole Kaletsky (Project Syndicate) Jun 17, 2016
The febrile behavior of financial markets ahead of the UK’s "Brexit" referendum on June 23 shows that the outcome will influence economic and political conditions around the world far more profoundly than Britain’s share of global GDP might suggest. In fact, for three reasons, a Brexit vote could catalyze another global crisis.

The Case Against Peace
Stephen M. Walt (FP) Jun 17, 2016
There’s long been a theory that peacetime is bad for maintaining the global order — turns out a war now and then does a nation good.

Welcome to the Fantasy Island 1of Little England
Emile Simpson (FP) Jun 17, 2016
The pro-Brexit campaign is fudging numbers, reimagining history, and undermining the Great British tradition of common sense.

The economics of bank supervision: Theory and evidence
Thomas Eisenbach, David Lucca and Robert Townsend (VoxEU) Jun 17, 2016
The two main elements of bank industry oversight are regulation and supervision. This column provides a framework for thinking about supervision in relation to regulation. Using US data on supervisory hours spent, it finds evidence of economies of scale for bank size. Additionally, less risky banks receive substantially lower amounts of supervisory hours. The findings highlight that supervisors face resource constraints and trade-offs. The two main elements of bank industry oversight are regulation and supervision. This column provides a framework for thinking about supervision in relation to regulation. Using US data on supervisory hours spent, it finds evidence of economies of scale for bank size. Additionally, less risky banks receive substantially lower amounts of supervisory hours. The findings highlight that supervisors face resource constraints and trade-offs.

Promoting investment in Europe: Where do we stand with the Juncker Plan?
Patricia Wruuck (DB Research) Jun 17, 2016
The Juncker Plan set out to boost investment in Europe and can show some progress so far. After operating for about a year, a total of EUR 12.8 bn financing of the European Fund for Strategic Investments (EFSI) has been approved by the European Investment Bank and the European Investment Fund. This is expected to trigger EUR 100 bn of total investment according to estimates by the institutions. The European Commission has already called for extension of EFSI beyond the initial three year period ideally increasing its scale and scope. However, considerations about EFSI’s future need to be based on thorough evaluation of effectiveness and demonstrated added value. After the first year, there is -quite naturally- more information on activity than evidence on impact. To that effect, continuous monitoring and mid-term stock-taking are key to inform the debate about EFSI's future.

Dumping Peanuts in Haiti
Scott Freeman, Garrett Grady and Adam Diamond (Globalist) Jun 18, 2016
Stop calling “aid” what really is about supply management for US agricultural interests.

The pound and the macroeconomic effects of Brexit
Giancarlo Corsetti and Gernot Müller (VoxEU) Jun 18, 2016
For decades, the UK government has been very careful in ensuring a low-risk status for its public and private debt. This column warns that if the UK opts to leave the EU, uncertainty over the implications of Brexit would put this low-risk status in jeopardy. A depreciation of the pound could well generate an export boom, but this would not compensate for the damage to internal demand and to the UK’s ability to access external financing of its deficits. For decades, the UK government has been very careful in ensuring a low-risk status for its public and private debt. This column warns that if the UK opts to leave the EU, uncertainty over the implications of Brexit would put this low-risk status in jeopardy. A depreciation of the pound could well generate an export boom, but this would not compensate for the damage to internal demand and to the UK’s ability to access external financing of its deficits.

Japan’s next VAT rate increase
David Cashin and Takashi Unayama (VoxEU) Jun 18, 2016
Japan’s prime minister recently announced that a planned 2% VAT increase would be postponed from 2017 to 2019. This column explores how Japanese household consumption adjusted to a VAT increase that was announced in 2013 and implemented in 2014. Household consumption fell by around 4% upon announcement and 1% upon implementation, suggesting that most of the negative impact of a VAT rate increase occurs at the time of the announcement. Japan’s prime minister recently announced that a planned 2% VAT increase would be postponed from 2017 to 2019. This column explores how Japanese household consumption adjusted to a VAT increase that was announced in 2013 and implemented in 2014. Household consumption fell by around 4% upon announcement and 1% upon implementation, suggesting that most of the negative impact of a VAT rate increase occurs at the time of the announcement.

Brexit dominates fears for the global economy
FT View Jun 19, 2016
Central banks can limit market turmoil, but not long-term damage.

European values are more important than economics
Wolfgang Münchau (FT) Jun 19, 2016
Many emerging countries have shunned Europe and chosen a finance-based US-style model of capitalism.

Democracy needs to be nurtured and protected
Chris Patten (FT) Jun 19, 2016
Brexiters Gove and Johnson may want to reflect on some of the company they keep.

Raghuram Rajan’s departure is huge setback for reform in India
Eswar Prasad (FT) Jun 19, 2016
A sequence of shocks plus investor nervousness may stoke capital outflows.

"Rexit" Is Bad News for India
Mihir Sharma (Bloomberg View) Jun 19, 2016
The departure of central banker Raghuram Rajan raises uncomfortable questions about the country's credibility.

China Will Own the Internet of Cars
Adam Minter (Bloomberg View) Jun 19, 2016
As cars are increasingly wired, Chinese companies have some huge advantages.

Good Riddance to Great Britain
Thomas von der Dunk (FP) Jun 19, 2016
London has always tried to remake the EU in its own image — and it's an image that most Europeans hate.

Raghuram Rajan’s exit raises doubts about reforms in India
FT View Jun 20, 2016
Without its central banking talisman, Modi’s drive may lose impetus.

A referendum that is both naive and necessary
Janan Ganesh (FT) Jun 20, 2016
Why is Cameron ‘putting us through this’? Because the pressure was too much to contain an eruption.

Britain and Europe’s Fate
WSJ Jun 20, 2016
A faltering Continent needs the U.K. more than vice versa.

A Brexit Fantasy
Bret Stephens (WSJ) Jun 20, 2016
Rarely do nationalist politics not end in statist economic prescriptions.

What Is ‘Brexit’? A Look at the Debate and Its Wider Meaning
Amanda Taub (NYT) Jun 20, 2016
As British voters weigh whether to leave the European Union, they are wading into questions about national identity and Britain’s place in the world.

How to Deal with China’s Acquisitions
Helmut Reisen (Globalist) Jun 20, 2016
The West should act with more confidence in dealing with China’s foreign direct investments.

Don't Believe the Fed's Stress Tests
Mark Whitehouse (Bloomberg View) Jun 20, 2016
A simple model suggests the top six banks would come up $350 billion short in a crisis.

The Day After the U.K. Votes to Leave the EU
Mohamed Aly El-Erian (Bloomberg View) Jun 20, 2016
The seismic political, financial and economic effects of a vote in favor of Brexit.

Trump-style Politics Comes to India
Devesh Kapur (Project Syndicate) Jun 20, 2016
The decision by Raghuram Rajan not to seek a second term as Governor of the Reserve Bank of India is likely to roil global markets, which regarded him as a critical anchor for the Indian economy. Indeed, the ad hominem attacks on Rajan in recent months raise large questions with serious implications for India.

Brexit in Context
Michael Spence (Project Syndicate) Jun 20, 2016
At least some Britons, and many other EU citizens, still want future generations to come to think of themselves as Europeans. And they are right to think that the world would be a far better place with a united, democratic Europe as a major force for both stability and change.

Europe’s Wake-Up Call
Giles Merritt (Project Syndicate) Jun 20, 2016
There’s a silver lining to the dark clouds of populist Euroskepticism crowding in on the EU. In Brussels and a number of Europe’s capitals, leaders know that the EU must respond to mounting discontent, and that – at long last – there is political capital to be gained in doing so.

Energy's Impact on Inflation Expectations
Yifan Cao and Adam Hale Shapiro (FRBSF Econ Letter) Jun 20, 2016
Some closely watched measures of inflation expectations have been in gradual decline over the past five years. Over the same time, oil prices have fallen dramatically. Although the movements in energy prices are normally considered temporary, they appear to have played a large role in pushing down some longer-term forecasts for consumer price index inflation from professional forecasters. Analysis shows the drop in energy prices can explain about three-fourths of the decline in these professional inflation forecasts over the past five years.

Brexit and EU power distribution
László Kóczy (VoxEU) Jun 20, 2016
Much of the discussion about Brexit has focused on the UK and has ignored the another party – the European Union. This column examines how the UK leaving the EU would affect the distribution of power among the remaining member states. The larger members such as France and Germany would likely benefit directly from Brexit, at least in terms of power. Much of the discussion about Brexit has focused on the UK and has ignored the another party – the European Union. This column examines how the UK leaving the EU would affect the distribution of power among the remaining member states. The larger members such as France and Germany would likely benefit directly from Brexit, at least in terms of power.

China deploys state enterprises to economic stimulus effort
Gabriel Wildau (FT) Jun 21, 2016
Reliance on SOEs as policy tool thwarts effort drive to boost efficiency.

Fund managers shun Chinese banks, industrials
Steve Johnson (FT) Jun 21, 2016
Emerging market stockpickers spurn state-controlled companies.

Why I believe Britain belongs in Europe
Martin Wolf (FT) Jun 21, 2016
The democratic EU of today owes immeasurably to British politics, values and courage.

Free Britain to trade with the world
Daniel Hannan (FT) Jun 21, 2016
Ours is a merchant nation but the EU prevents us buying and selling overseas.

Is India really the most open economy for FDI?
Amy Kazmin and Simon Mundy (FT) Jun 21, 2016
A look at key sectors of the economy following Modi’s claims this week.

Good news for Brazil, bad news for India
Brian Caplen (Banker) Jun 21, 2016
India will rue the loss of central bank governor Raghuram Rajan but in Brazil, having Henrique Meirelles back in government is the best news the crisis-torn country has had in quite a while.

To be fixed, Europe needs a wrecking ball
David Ignatius (WP) Jun 21, 2016
Modern politicians in Britain and on the continent should be thinking about change.

China’s Mysterious Investment Statistics
Zhang Jun (Project Syndicate) Jun 21, 2016
Though the accuracy of China’s official GDP and growth rates has long been a hotly debated topic, few have been challenging the credibility of its official investment statistics. But here, too, there is plenty of reason for doubt.

No Brexit Spoils for the EU
Fabrizio Coricelli (Project Syndicate) Jun 21, 2016
Now that the potential for “Brexit” has become real, other Europeans are increasingly consumed by its implications. But rather than considering seriously the risks, many are behaving like members of a large family that is about to lose a wealthy relative, mentally dividing up their inheritance even before the will is read.

Brexit and the Long, Slow EU-UK Divorce
Michael J. Geary and Kevin Lees (National Interest) Jun 21, 2016
It is not unfair to ask if Britain has not been “leaving” Europe in slow motion all along, write Michael Geary and Kevin Lees.

Britain’s Point of No Return
Matthias Matthijs (FA) Jun 21, 2016
Europe’s democratic dysfunction and the false promise of referenda.

I have changed my mind on Brexit
Pierre Lagrange (FT) Jun 22, 2016
Britain will flourish by remaining at the heart of the global conversation.

Brexiters are 500 years behind the times
Rupert Gavin (FT) Jun 22, 2016
Henry VIII pursued fiscal stimulus levels not even Labour would espouse, writes Rupert Gavin (FT).

The empty-chair syndrome in African leadership
David Pilling (FT) Jun 22, 2016
A lack of exceptional leaders means a $5m prize for unsung heroes goes unawarded.

No end of reasons to whack Mexican peso
Stephen Foley (FT) Jun 22, 2016
Liquid currency an ideal vehicle for hedging all kinds of risks in the financial system.

What Can China Accomplish with its G-20 Presidency?
Sean Miner (PIIE) Jun 22, 2016
China is about to step up for the first time as host of the G-20 this September and the country has been working hard to make a good impression. An important area in which China could focus is the acceleration of the liberalization of global trade and investment rules, an effort which has stalled...

Bringing money into the digital age
Nicolas Cary (OECD Insights) Jun 22, 2016
Why can’t money be digital too?

The Brits Have No Good Options on Europe Vote
Clive Crook (Bloomberg View) Jun 22, 2016
The U.K. will have plenty to regret whether it stays in the EU or leaves.

The Myth of Austerity and Growth
Noah Smith (Bloomberg View) Jun 22, 2016
Belt-tightening used to be recommended for countries in financial distress. Not anymore.

A Japanese Ponzi Scheme?
Koichi Hamada (Project Syndicate) Jun 22, 2016
It is no secret that excessive public debt weighs down an economy, leaving it vulnerable to shocks. But just as a fast-moving cyclist cannot simply stop pedaling, governments cannot suddenly halt all borrowing; to remain upright and in control, they must eliminate their deficits gradually.

The Fund that Cried Wolf?
Howard Davies (Project Syndicate) Jun 22, 2016
It would not be surprising if, even a decade on, the IMF continues to be influenced by its failure to warn in good time that a global financial crisis – the worst in nearly 80 years – was a material risk. Maybe that's why the Fund's latest annual financial stability report sees serious risks that don't exist.

Could a Basic Income Help Poor Countries?
Pranab Bardhan (Project Syndicate) Jun 22, 2016
The idea of providing a universal basic income has lately been capturing imaginations across the political spectrum. But, so far, the conversation has focused largely on the advanced countries, even though such programs may actually be more feasible – and more desirable – in the developing world.

India’s Economy after Rajan
Gita Gopinath (Project Syndicate) Jun 22, 2016
Raghuram Rajan’s decision not to seek a second term as Governor of India’s central bank was met with shock from many observers. While Prime Minister Narendra Modi’s government certainly had its problems with Rajan, few believed that the government would take a step that so clearly undermines India’s interests.

Deconstructing deindustrialisation
Andrew B. Bernard, Valerie Smeets and Frederic Warzynski (VoxEU) Jun 22, 2016
Deindustrialisation is a major policy concern in high-income countries not only because of resulting unemployment, but also because of the long-run implications for growth. This column uses evidence from Denmark to analyse whether it is being measured in the right way. A substantial fraction of the decline in manufacturing actually reflects the changing nature of production. Service sector firms that still perform many of the value-adding activities of traditional manufacturing firms should not be overlooked by policymakers. Deindustrialisation is a major policy concern in high-income countries not only because of resulting unemployment, but also because of the long-run implications for growth. This column uses evidence from Denmark to analyse whether it is being measured in the right way. A substantial fraction of the decline in manufacturing actually reflects the changing nature of production. Service sector firms that still perform many of the value-adding activities of traditional manufacturing firms should not be overlooked by policymakers.

Why China was on the wrong side of the Great Divergence
Daniel Bernhofen, Markus Eberhardt, Jianan Li and Stephen Morgan (VoxEU) Jun 22, 2016
Despite being credited with many of the defining inventions of the early modern era, China failed to develop in line with Western Europe at the start of the 19th century. This column suggests that one reason for this was that China’s economy was more fragmented than that of Europe. Using Chinese monthly grain prices from 1740-1820 and grain price panels from Western Europe, it shows that in terms of market integration, the Great Divergence was well under way decades before the start of the 19th century. Despite being credited with many of the defining inventions of the early modern era, China failed to develop in line with Western Europe at the start of the 19th century. This column suggests that one reason for this was that China’s economy was more fragmented than that of Europe. Using Chinese monthly grain prices from 1740-1820 and grain price panels from Western Europe, it shows that in terms of market integration, the Great Divergence was well under way decades before the start of the 19th century.

Win or Lose, the Brexit Vote Shows How Hard It Is to Defend the EU
David Miller (FP) Jun 22, 2016
Regardless of the outcome, the vote on whether Britain should stay in the European Union shows how hard it is to defend Brussels-style democracy.

Brazil bankruptcy shows up bad debt dynamics
FT View Jun 23, 2016
A Petrobras recapitalisation is one of the solutions that is available.

Protectionism may bark but it still has no bite
FT View Jun 23, 2016
Measures blocking imports are well within their historical trends.

Brexit would hurt Europe and Britain
Isabel Schnabel(FT) Jun 23, 2016
Only the UK votes today but the result will reverberate across the EU.

RCEP Countries Conclude Auckland Round, Eye Next Steps
Bridges, Volume 20, Number 23 Jun 23, 2016
Negotiators meeting in Auckland, New Zealand, last week continued their efforts to finalise talks this year for a Regional Comprehensive Economic Partnership (RCEP), a 16-country trade and investment deal in the Asia-Pacific region.

Farm Subsidy Reform: Major Economies in WTO Spotlight
Bridges, Volume 20, Number 23 Jun 23, 2016
As developing country groups tabled two separate papers for WTO talks on farm subsidy reform, trade sources told Bridges that the reactions of major economies are likely to determine how negotiations now evolve.

Protectionism on the Rise in G-20 Economies, WTO Warns
Bridges, Volume 20, Number 23 Jun 23, 2016
Trade restrictive measures in the G-20 coalition of major advanced and emerging economies have hit their highest monthly average since the WTO first started tracking them seven years ago, economists from the global trade body said this week.

Brexit Seen From Berlin
Michael Burda (Globalist) Jun 23, 2016
U.S. history holds a lesson for Europe: Integration moves in waves.

Brexit and Bust: Britain Plunges Into the Unknown
Daniel Twining (YaleGlobal) Jun 23, 2016
The UK votes to leave the EU, and fury over cross-border economic and political cooperation won’t subside

Brexit means a bumpy road ahead for the UK economy
Chris Giles (FT) Jun 24, 2016
The vote for Britain to leave the EU will have grave consequences.

Brexit: a vote that changes everything
Philip Stephens (FT) Jun 24, 2016
A vote against the EU could also turn out to become a vote against the United Kingdom.

Brexit vote: Why currency markets were wrongfooted
John Authers (FT) Jun 24, 2016
If Leave triumphs, there is an elevated risk of a financial accident.

China will gain $5.6tn from growth model shift, says McKinsey
Gabriel Wildau (FT) Jun 24, 2016
Consultancy advocates focus on raising productivity to avoid middle-income trap.

Why Brexit is worse for Europe than Britain
Lawrence H. Summers (WP) Jun 24, 2016
Brexit is in progress.

Brexit: Britain’s welcome revival of nationhood
George F. Will (WP) Jun 24, 2016
A wave of skepticism may lead other countries to leave the European Union.

The Brexit Vote—Not Likely to Be Another Lehman Moment
William R. Cline (PIIE) Jun 24, 2016
Despite the market turmoil on the first day after the Brexit vote, it seems unlikely that the Leave victory will trigger a rerun of the 2008–09 Great Recession.

The UK-EU Separation: How Fast Does It Happen?
Nicolas Véron (PIIE) Jun 24, 2016
Up until the British rebuff on Thursday, the European Union had always been in expansion mode, also known in EU parlance as enlargement. The UK vote to leave the European Union marks the first-ever case of this process being reversed.

Brexit Delivers a Blow to Global Economic Confidence
Jacob Funk Kirkegaard (PIIE) Jun 24, 2016
The surprise 52-48 percent majority of the British electorate voting to leave the European Union, in a high turnout election of 71.9 percent, eliminates any doubt about the democratic legitimacy of the result, as well as any prospects for another referendum on Brexit in the future.

Brexit will hurt the UK, EU, and US for years to come
William A. Galston (Brookings) Jun 24, 2016
What will Brexit mean for the U.K’s. relations with the EU and the U.S.? The economic and political ramifications of the referendum, and the ethno-nationalistic divisions that drove the U.K. to vote for an exit from the EU.

Regions will drive the success of the Sustainable Development Goals
Rolf Alter (OECD Insights) Jun 24, 2016
The global agenda will require local data, the engagement of many stakeholders and all levels of government, and improved government capacity to steer and manage the delivery of public policies for inclusive growth.

What does Brexit mean for poor people?
Homi Kharas (Brookings) Jun 24, 2016
While the shock waves of Brexit are still echoing, the world is left wondering its true impact. In his latest blog, Homi Kharas argues that this exit is likely to have detrimental effects on the world's poorest and marks the first tangible retreat from globalization in 70 years.

A Bad Day for Europe
Bloomberg View Jun 24, 2016
Britain's decision to leave the EU will hurt European economies and its own.

Revenge Would Be the Wrong EU Response to U.K. Exit
Mark Gilbert (Bloomberg View) Jun 24, 2016
Britain's vote to quit should be a wake-up call for the EU.

It's Time for Europeans to Take a Stand
Leonid Bershidsky (Bloomberg View) Jun 24, 2016
Britons voted to leave the fold. That starts a whole new debate.

Seven Lessons From the U.K.'s Departure
Mohamed Aly El-Erian (Bloomberg View) Jun 24, 2016
These nasty fights are the new normal, and fringe groups don't have to gain power to get their way.

When Globalization Goes Digital
Martin Neil Baily and James Manyika (Project Syndicate) Jun 24, 2016
As popular anger about the ill effects of globalization mounts, US policymakers can no longer afford to ignore the human toll of creative destruction. And yet, as globalization shifts from trade in goods to cross-border flows of vast amounts of data, this would be the worst moment for the US to erect protectionist barriers.

Who Wins From Brexit? China
Michael Schuman (Bloomberg View) Jun 24, 2016
A disunited Europe will be less of a check on Chinese assertiveness.

Meet the Radical Majority
Jean-Michel Paul (Bloomberg View) Jun 24, 2016
Globalization and immigration have many losers, not few. Britain's just spoke up.

Britain’s Democratic Failure
Kenneth Rogoff (Project Syndicate) Jun 24, 2016
The real lunacy of the UK’s vote to leave the European Union was not that British leaders dared to ask voters to weigh the benefits of membership against the immigration pressures it presents. Rather, it was the absurdly low bar for exit: a simple majority.

The Right Left for Europe
Yanis Varoufakis (Project Syndicate) Jun 24, 2016
The UK's Brexit referendum made clear that many leftists believe that reviving progressive politics requires exiting an incorrigibly neoliberal EU. But anyone who thinks the EU's disintegration will help achieve goals like greater social protection and solidarity with refugees is badly mistaken.

The Brexit Revolt
Harold James (Project Syndicate) Jun 24, 2016
With its vote to exit the EU, the UK has staged a revolt so forceful that it has already roiled global markets and now threatens not just to ignite financial crisis in Britain, but also to bring down the European project. So what were British voters revolting against?

Brexit Throws the U.K. and Europe Into Turmoil
John Cassidy (New Yorker) Jun 24, 2016
One of the only things we can say for sure after the referendum decision is that a period of great uncertainty lies ahead.

The Long Road to Brexit
Robert Tombs (FP) Jun 24, 2016
Markets are stunned. Commenters are shocked. But future historians may view this moment as inevitable.

Political Elites’ Program of Austerity Set the Stage for Brexit
Dawn Foster (Nation) Jun 24, 2016
Scapegoating immigrants for economic suffering is easier than confronting the politicians that crafted austerity policy.

Future of the renminbi: Lessons from the past decades
Hiro Ito and Masahiro Kawai (VoxEU) Jun 24, 2016
China’s authorities have been promoting the renminbi as an international currency for international trade, investment, and finance. This column examines the experiences of the dollar, yen, and deutschmark from the 1970s to the 1990s. As long as China’s neighbouring economies keep using the dollar for international trade and financial activities, the rise of the renminbi as a trade invoicing currency may be as fast as the rise of China itself. China’s authorities have been promoting the renminbi as an international currency for international trade, investment, and finance. This column examines the experiences of the dollar, yen, and deutschmark from the 1970s to the 1990s. As long as China’s neighbouring economies keep using the dollar for international trade and financial activities, the rise of the renminbi as a trade invoicing currency may be as fast as the rise of China itself.

On the financial market consequences of Brexit
Jon Danielsson, Robert Macrae and Jean-Pierre Zigrand (VoxEU) Jun 24, 2016
Brexit creates new opportunities and new risks for the British and EU financial markets. Both could benefit, but a more likely outcome is a fall in the quality of financial regulations, more inefficiency, more protectionism, and more systemic risk. Brexit creates new opportunities and new risks for the British and EU financial markets. Both could benefit, but a more likely outcome is a fall in the quality of financial regulations, more inefficiency, more protectionism, and more systemic risk.

Africa's Charcoal Economy Is Cooking. The Trees Are Paying.
Norimitsu Onishi (NYT) Jun 25, 2016
In Madagascar, the booming charcoal business is contributing to deforestation and may exacerbate the effects of global warming.

'Brexit' in America: A Warning Shot Against Globalization
Nelson D. Schwartz and Patricia Cohen (NYT) Jun 25, 2016
Britain's vote to leave the E.U. may not bring recession to the U.S., but it could mark the end of a period of economic integration and open markets.

The Rise of Demotic Democracy in Europe
Mark Leonard (Project Syndicate) Jun 25, 2016
The shock of the British vote to leave the EU has yet to sink in. Yet European leaders must steel themselves for what is to come, as Brexit may well be the initial tremor that triggers a tsunami of referenda in the coming years, making Europe increasingly ungovernable.

The Meaning of Brexit
Jeffrey D. Sachs (Project Syndicate) Jun 25, 2016
Brexit is a watershed event that signals the need for a new kind of globalization, one that could be far superior to the status quo that was rejected at the British polls. What is required, above all, is a shift from a strategy of war to one of sustainable development.

Brexit and the Future of Europe
George Soros (Project Syndicate) Jun 25, 2016
Brexit is likely to cause Britain's economy and people to suffer significantly in the short to medium term, owing to profound uncertainty over the terms of divorce and the future of the UK itself. But the implications for Europe could be far worse.

Making the Eurozone more resilient: What is needed now and what can wait?
Resiliency Authors (VoxEU) Jun 25, 2016
Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of leading economists – identifies what needs to be done soon, and what should also be done but can probably wait if markets are patient. Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of leading economists – identifies what needs to be done soon, and what should also be done but can probably wait if markets are patient.

Let Germany bring Europe back together
Norbert Röttgen (FT) Jun 26, 2016
Continental unity is in the country’s interests.

Brexit has locked us millennials out of the union we voted for
Nicholas Barrett (FT) Jun 26, 2016
Older Leavers are unlikely to need a continent’s worth of opportunity.

Brexit: Haunted Europe
Tony Barber (FT) Jun 26, 2016
The UK vote to leave throws into doubt the EU’s survival as support for expansion evaporates.

A New American Deal for Europe
WSJ Jun 26, 2016
The next President can revive the commitment Obama abandoned.

Mergers and Suspicions: China in the U.S.
Hernan Cristerna (WSJ) Jun 26, 2016
Yes, Chinese companies are increasingly turning to the U.S. to buy businesses. Worries about sinister implications are misplaced.

Learning from Britain’s unnecessary crisis
E.J. Dionne Jr. (WP) Jun 26, 2016
The nationalism behind Britain’s vote to leave the European Union was English, not British (or Scottish or Northern Irish).

Winner’s Remorse May Loom for Brexit Backers
Joseph C. Sternberg (WSJ) Jun 26, 2016
The Leave leaders will need to explain that many of the U.K.’s economic ills are made at home, not the EU.

Can Modi deliver on Indian growth?
Rajiv Kumar (EAF) Jun 26, 2016
How the Modi government more generally has managed the economy in its first two years.

Cameron’s Folly: Britain Needed “Fixing” More Than Europe
Stephan Richter (Globalist) Jun 26, 2016
When it comes to urgently needed reforms, the British Prime Minister should have focused on Britain first.

Has Brexit Undermined the West?
Philippe Legrain (Project Syndicate) Jun 26, 2016
Few saw Britain’s stunning rejection of the EU coming until it was staring them in the face. And now that the unthinkable has happened, similar upheavals are becoming all too thinkable elsewhere, with political, economic, and security implications that go far beyond the UK.

Jumpstarting Europe’s Economy
Laura Tyson and Eric Labaye (Project Syndicate) Jun 26, 2016
Not long ago, the notion of the ECB handing out money to governments or directly to citizens – so-called "helicopter money" drops – would have seemed outlandish. Today, the idea has gone mainstream, which represents a welcome shift in Europe's economic-policy debate.

Europe After Brexit
Dominique Moisi (Project Syndicate) Jun 26, 2016
After 43 years of EU membership, Britain has decided to retreat into itself, proving that Britons, despite their reputation for pragmatism, are far from exempt from voting against their own interests. The question is whether the rest of the EU can resist the decidedly un-pragmatic forces the Brexit vote is sure to unleash.

Britain at Sea
Carl Bildt (Project Syndicate) Jun 26, 2016
Since the 1960s, when former US Secretary of State Dean Acheson quipped that the UK had lost an empire and not yet found a role, successive British leaders tried to forge a role for their country in Europe. The just-concluded referendum represents the devastating conclusion of that effort.

Will America Win or Lose From Brexit?
Simon Johnson (Project Syndicate) Jun 26, 2016
Some of the obvious political winners from Brexit are people who do not like Western Europe and what it stands for. Ironically, the US – Europe’s greatest ally and the EU’s largest trading partner – may also end up as a beneficiary, though not if Donald Trump wins the presidential election in November.

The UK Will Survive, but Europe Won't
Slawomir Sierakowski (Project Syndicate) Jun 26, 2016
After Brexit, Europe could finally emerge as a strong international actor: the world’s third-largest country, with English, ironically, as its administrative language. But, sadly, the political will to achieve such an outcome is unlikely to emerge – if it ever does – until conditions become considerably worse than they are now.

The Collapse of the Liberal World Order
Stephen M. Walt (FP) Jun 26, 2016
The world is entering a period where once-robust democracies have grown fragile. Now is the time to figure out where we went wrong.

Shedding light on PPP-adjusted GDP measures
Maxim Pinkovskiy and Xavier Sala-i-Martin (VoxEU) Jun 26, 2016
When it comes to measuring GDP, researchers tend to use the latest vintage of the Penn World Tables. However, competing series like the World Development Indicators (WDI) and changing methodologies between vintages mean this is not necessarily the best approach. This column assesses the relative performance of different GDP estimators using night-time lights as an unbiased predictor of the growth rates of unobserved true income. Newer versions of the Penn Tables are not necessarily improvements on their direct predecessors. Newer versions of the WDI index, especially the 2011 vintage, appear generally better at measuring cross-country income differences. When it comes to measuring GDP, researchers tend to use the latest vintage of the Penn World Tables. However, competing series like the World Development Indicators (WDI) and changing methodologies between vintages mean this is not necessarily the best approach. This column assesses the relative performance of different GDP estimators using night-time lights as an unbiased predictor of the growth rates of unobserved true income. Newer versions of the Penn Tables are not necessarily improvements on their direct predecessors. Newer versions of the WDI index, especially the 2011 vintage, appear generally better at measuring cross-country income differences.

Free from shackles of Brussels, British trade can flourish
Paul Marshall (FT) Jun 27, 2016
Success will not be about centralised command-and-control bureaucracies.

Glimmers of hope for EM in Brexit fallout
Steve Johnson (FT) Jun 27, 2016
Some see gains from looser monetary policy and rising political risk in the west.

We now need a proper roadmap to quell corrosive uncertainty
Rupert Harrison Jun 27, 2016
Control and sovereignty, not immigration, were main drivers of Leave vote.

Risk-off sentiment hits emerging markets
Dan Bogler (FT) Jun 27, 2016
Asia likely to fare less badly than eastern Europe and Latam after Brexit vote.

How Britain Could Exit 'Brexit'
Max Fisher (NYT) Jun 27, 2016
The country has a few options for how it might remain in the European Union. Each carries significant risks - but, then again, so does leaving.

The Brexit Spillover
NYT Jun 27, 2016
By deciding to leave the European Union, Britain has created global economic uncertainty.

‘Brexit’ Is Locking In the Forces That Already Haunt the Global Economy
Neil Irwin (NYT) Jun 27, 2016
Those forces have self-reinforcing, vicious-cycle dimensions that make it a perilous time for the world’s economies.

Spain to Europe’s Relief
WSJ Jun 27, 2016
The center-right gains while the voters reject hard-left Podemos.

Inequality in Asia
Stephan Haggard (PIIE) Jun 27, 2016
Post-Brexit, the theme of inequality is likely to gain ground in political and policy debates. The connection: perceived inequalities arising out of globalization, including class, sectoral and spatial ones. The increasing openness of the North Korean economy and the marketization process is almost...

How the Eurozone Can Be Strengthened After Brexit
Olivier Blanchard (PIIE) Jun 27, 2016
Brexit raises fundamental questions, about the course of history, the nature of relations between European countries, the rise of populists, and the devalued status of politicians. These will be analyzed at length for months and years to come. Meanwhile, Europe must continue to function.

US-UK Trade and Foreign Investment
Euijin Jung and Zhiyao (Lucy) Lu (PIIE) Jun 27, 2016
How will the British exit from the European Union affect US-UK trade and investment? Here is a guide to the status quo.

Brexit Is an Existential Threat to the European Union
Edwin M. Truman (PIIE) Jun 27, 2016
The importance of the Brexit vote is not about the future of the United Kingdom; the vote consigned that once great nation to increasing irrelevance on the world stage. The importance of the Brexit vote is existential for Europe and the future of the European project that began with the European Coal and Steel Community 65 years ago. To survive as a coherent entity, the European Union must either strengthen the economic and monetary union or abandon it and step away from the prospect of political union.

After Brexit: Chaos and Buyer’s Remorse?
Jacob Funk Kirkegaard (PIIE) Jun 27, 2016
After the fateful decision of the British electorate to leave the European Union on June 23, the first contours of where Europe and the United Kingdom are heading are emerging. The indications might not be great for Europe but are deeply troubling for the UK.

A Blueprint for Portugal’s Future Growth
IMF Survey Jun 27, 2016
Portugal has bounced back from the global economic crisis, but to keep up momentum it will need to carry out additional reforms aimed at boosting growth, generating jobs, and improving competitiveness, according to a new IMF publication on the country’s economy.

Does Brexit signal the end of globalization? Not quite
Mireya Solís (Brookings) Jun 27, 2016
While there are striking similarities between the anti-globalization sentiment displayed by the Brexit vote in the U.K. and the rise of Donald Trump in the U.S., the differences are perhaps even more important.

Post-Brexit: EU Still a Superpower
Steven Hill (Globalist) Jun 27, 2016
Yes, the EU is juggling a number of daunting situations. But that’s what superpowers do.

History Returns to Europe
Michael J. Totten (WA) Jun 27, 2016
The Brexit vote was a momentous decision in Europe’s history—one that exposes the pros and cons of nationalism and the problems that accompany supranational organizations.

Keep Calm and Go Slow
Bloomberg View Jun 27, 2016
Disentangling the U.K. from 43 years of engagement with the union's laws and procedures will be a long process.

The U.K. Doesn't Have a Plan, But the EU Does
Leonid Bershidsky (Bloomberg View) Jun 27, 2016
Germany and France have proposed an agenda for a closer European Union following Brexit.

EU, Not Britain, Has a Democracy Deficit
Ramesh Ponnuru (Bloomberg View) Jun 27, 2016
Panic over U.K.'s exit is based on a dubious reading of European history.

How Europe Should Move On Without Britain
Clive Crook (Bloomberg View) Jun 27, 2016
Instead of punishing the U.K., the EU's leadership should pursue its enlightened self-interest.

The Left and Right Stumble on Globalization
Noah Smith (Bloomberg View) Jun 27, 2016
We need new theories to account for new facts, since the old ones aren't holding up very well.

Uncertainty Is the New Normal After U.K.'s Startling Vote
Conor Sen (Bloomberg View) Jun 27, 2016
Investors have even more questions than they did before Britain decided to leave the EU.

Markets Were Rational, But U.K. Voters Weren't
Matthew A Winkler (Bloomberg View) Jun 27, 2016
A majority of Britons voted against their own interest. Economic models aren't built to forecast that.

Brexit Is the Sum of China's Fears
Christopher Balding (Bloomberg View) Jun 27, 2016
The U.K.'s decision will lead the Communist Party to double down on the status quo.

Broken Britain's Uncertain Future
Mark Gilbert (Bloomberg View) Jun 27, 2016
The divisions revealed by the EU vote will be hard to heal.

In Britain, the End of the Establishment
Pankaj Mishra (Bloomberg View) Jun 27, 2016
Brexit is a terrible indictment of the country's leaders.

Did the OECD Composite Leading Indicators see it coming?
Roberto Astolfi (OECD Insights) Jun 27, 2016
To some Professor Luis Garicano of the London School of Economics is a leading expert in the fields of productivity and industrial organisation, but to many he’s the man Queen Elizabeth asked “Why did no one see it coming?”; “it” being the crisis. In retelling the story, Pr. Garicano pointed out that he welcomed the question as it provided an opportunity to cite many that did see it coming, including Messrs, Krugman and Volcker. Was the OECD among them?

Is China the Next Japan?
Stephen S. Roach (Project Syndicate) Jun 27, 2016
Despite concerns about a hard landing, China is not heading toward Japanese-style “lost decades” of stagnation. And yet, while China’s embrace of structural rebalancing distinguishes it from Japan, the endgame could be similar if the struggle to implement its new model is not resolved decisively,

Doing Well by Doing Good
Ethiopis Tafara (Project Syndicate) Jun 27, 2016
In the years ahead, successful companies will take the lead in tackling the most urgent development challenges of our time – everything from poverty and disease to climate change. The trick is to identify solutions that address such challenges in ways that are profitable and sustainable in the long run – and then scale them up.

State capacity and US technical progress in the 19th century
Daron Acemoglu, Jacob Moscona and James A Robinson (VoxEU) Jun 27, 2016
The ‘great inventions’ view of productivity growth ascribes the excellent growth from 1920 to 1970 in the US to a handful of advances, and suggests that today poor productivity performance is driven by a lack of breakthrough discoveries. This column argues instead that the development of an effective governmental infrastructure in the 19th century accounted for a major part of US technological progress and prominence in this period. Infrastructure design thus appears to have the power to reinvigorate technological progress. The ‘great inventions’ view of productivity growth ascribes the excellent growth from 1920 to 1970 in the US to a handful of advances, and suggests that today poor productivity performance is driven by a lack of breakthrough discoveries. This column argues instead that the development of an effective governmental infrastructure in the 19th century accounted for a major part of US technological progress and prominence in this period. Infrastructure design thus appears to have the power to reinvigorate technological progress.

Why it doesn't make sense to hold bonds
Balazs Csullag, Jon Danielsson and Robert Macrae (VoxEU) Jun 27, 2016
Investor demand for bonds is very high. This column argues that this is surprising because under almost any likely inflation scenario, including central banks merely hitting their target inflation rates, bondholders suffer large losses. The beneficiaries are sovereign and corporate borrowers; the losers are pension funds, insurance companies and some foreign exchange reserve funds. Meanwhile, the systemic risk from a bond crisis is increasing.

Negative rates and seigniorage
Daniel Gros (VoxEU) Jun 27, 2016
The business of central banks used to be profitable – they issued cash and could invest the proceeds in the assets they liked. This column argues that the ECB has turned the old business model of central banks around. Today, it earns a stream of income on its liabilities, while the returns of an increasing part of its assets go to the national central banks. This cannot be a stable arrangement. The business of central banks used to be profitable – they issued cash and could invest the proceeds in the assets they liked. This column argues that the ECB has turned the old business model of central banks around. Today, it earns a stream of income on its liabilities, while the returns of an increasing part of its assets go to the national central banks. This cannot be a stable arrangement.

Do Macro Variables Help Forecast Interest Rates?
Michael D. Bauer and James D. Hamilton (FRBSF Econ Letter) Jun 27, 2016
Some recent research has suggested that macroeconomic variables, such as output and inflation, can improve interest rate forecasts. However, the evidence for this puzzling result is based on unreliable statistical tests. A new simple method more reliably assesses which variables are useful for forecasting. The results from this method suggest that some of the published evidence on the predictive power of macroeconomic variables may be spurious, supporting the more traditional view that current interest rates contain all the relevant information for predicting future interest rates.

Big Oil: From black to green
Ed Crooks and Kiran Stacey (FT) Jun 28, 2016
Despite pressure to develop renewables, many energy majors see more money in traditional markets.

In 'Brexit' and Trump, a Populist Farewell to Laissez-Faire Capitalism
Eduardo Porter (NYT) Jun 28, 2016
The "Brexit" vote was driven by a sense among older white workers that they have been passed over. The same frustration fuels the candidacy of Donald Trump.

Out of the Brexit Turmoil: Opportunity
Henry A. Kissinger (WSJ) Jun 28, 2016
Europe should not treat Britain as a prison escapee but as a potential compatriot. And the U.S. has a vital role to play.

Why Globalization Pays
Gary Clyde Hufbauer (PIIE) Jun 28, 2016
In the wake of Brexit and Trump, commentators foretell the end of globalization. 1 In policy terms, they certainly have a point: Even before Brexit, the World Trade Organization’s Doha Round was dead, the Trans-Pacific Partnership faced political hurdles, and micro-protectionist measures were prouting like summer dandelions. Anti-globalization policies have contributed to the abnormally tepid growth of world trade and investment since 2010.

North America Must Compete Globally
Gary Clyde Hufbauer (PIIE/Forbes) Jun 28, 2016
Contrary to campaign rhetoric, the integration of North America over the past quarter century has successfully grown the continental economy and enabled it to compete in global markets.

Brexit: Threats and Opportunities for Global Development
Owen Barder (CGD) Jun 28, 2016
There is much uncertainty now about how the UK will respond to Thursday’s referendum result calling for Britain to leave the European Union. The effects on developing countries—and development cooperation—will depend in part on what is agreed in the coming months and years. But here is some speculation about the possible threats that Brexit implies, and a (rather shorter) list of the possible opportunities.

Brexit: The Day We Entered the Maelstrom
Thomas I. Palley (Globalist) Jun 28, 2016
Bad political outcomes produce worsened economic outcomes and further social alienation.

Oil Is Still Heading to $10 a Barrel
A Gary Shilling (Bloomberg View) Jun 28, 2016
The issues that drove crude lower haven't gone away.

Brexit Without Tears, Norway-Style
Leonid Bershidsky (Bloomberg View) Jun 28, 2016
By joining the European Economic Area, the U.K. could keep many of the benefits of being in the EU.

How EU Overreach Pushed Britain Out
Martin Feldstein (Project Syndicate) Jun 28, 2016
In the end, despite all the warnings and dire forecasts, the British people voted to take their chances by leaving the EU. If the EU is to save itself from further disintegration, it needs to understand its own role in that decision.

Which Thinkers Will Define Our Future?
J. Bradford DeLong (Project Syndicate) Jun 28, 2016
Social science today rests on a canon of works that examine the social, political, and economic makeup of the Western European world between 1450 and 1900. But which works should we use to guide us through the problems of the twenty-first century?

China’s State-Owned Enterprises at a Crossroads
Andrew Sheng and Xiao Geng (Project Syndicate) Jun 28, 2016
China has lately been facing harsh criticism for its economic management, with many outsiders taking aim at the authorities’ postponement of the much-touted reform of state-owned enterprises. But there is a good reason for delay.

London Should Secede From the United Kingdom
Parag Khanna (FP) Jun 28, 2016
But since it’s tough to put Buckingham Palace on a trailer, quasi-independence is the next best thing.

Brexit's False Democracy
Kathleen R. McNamara (FA) Jun 28, 2016
What the vote really revealed.

The Roots of Brexit
Peter Hall (FA) Jun 28, 2016
1992, 2004, and European Union expansion.

Credibility of central bank(er)s
Maria Demertzis and Nicola Viegi (VoxEU) Jun 28, 2016
Both the Fed and the ECB have managed to remain credible since the Global Crisis, but their credibility levels have evolved differently. This column argues that since inflation in the US and the Eurozone has been similar in the past eight years, the difference in the way that credibility has evolved is the result of the different macroeconomic policy mixes applied. Both the Fed and the ECB have managed to remain credible since the Global Crisis, but their credibility levels have evolved differently. This column argues that since inflation in the US and the Eurozone has been similar in the past eight years, the difference in the way that credibility has evolved is the result of the different macroeconomic policy mixes applied.

Italy’s productivity conundrum: The role of resource misallocation
Sara Calligaris, Massimo Del Gatto, Fadi Hassan, Gianmarco I.P. Ottaviano and Fabiano Schivardi (VoxEU) Jun 28, 2016
Many advanced economies have experienced a productivity slowdown in recent years. Italy, however, has been experiencing such a slowdown since the mid-1990s. This column provides a detailed analysis of Italy’s patterns of misallocation over this period. Firms in the Northern regions, as well as large firms, have experienced the sharpest increase in resource misallocation. To tackle the resulting productivity slowdown, reforms need to address unemployment benefits and higher education, as well as encouraging investment in intangible assets. Many advanced economies have experienced a productivity slowdown in recent years. Italy, however, has been experiencing such a slowdown since the mid-1990s. This column provides a detailed analysis of Italy’s patterns of misallocation over this period. Firms in the Northern regions, as well as large firms, have experienced the sharpest increase in resource misallocation. To tackle the resulting productivity slowdown, reforms need to address unemployment benefits and higher education, as well as encouraging investment in intangible assets.

Finance as a driver of growth: New evidence
Saleem Bahaj, Iren Levina and Jumana Saleheen (VoxEU) Jun 28, 2016
Finance plays a key role in growth by connecting savers and investors, but it can also be a source of crises. This column discusses whether there has been enough finance to enable productive investments. UK non-financial companies appear to have enough internal funds to cover all their investment taken as a whole, but the evidence suggests that small firms face shortfalls. The column also pleads for the development of new and better data sources to help measure the supply of finance that can be used to exploit productive investment opportunities. Finance plays a key role in growth by connecting savers and investors, but it can also be a source of crises. This column discusses whether there has been enough finance to enable productive investments. UK non-financial companies appear to have enough internal funds to cover all their investment taken as a whole, but the evidence suggests that small firms face shortfalls. The column also pleads for the development of new and better data sources to help measure the supply of finance that can be used to exploit productive investment opportunities.

Japan should not resort to currency depreciation
FT View Jun 29, 2016
Intervention should be limited to smoothing turbulent markets.

Problems mount up for emerging market companies
Steve Johnson (FT) Jun 29, 2016
Productivity and profit margins fall more sharply than in advanced countries.

China shows commitment to renminbi stability with currency fix
Jennifer Hughes (FT) Jun 29, 2016
Beijing sets exchange midpoint at unexpectedly strong level.

Donald Trump’s Tariff Party
WSJ Jun 29, 2016
His trade agenda would hurt American workers and companies.

The Overblown Brexit Market Panic
Robert Greifeld (WSJ) Jun 29, 2016
Stocks are already settling down. Maybe people realize that Britain could become a free-trade model.

North America is the strongest economy in the world. Let’s keep it that way.
Mack McLarty and Nelson Cunningham (WP) Jun 29, 2016
Our continent owes its prosperity to integrated markets across national boundaries.

The Impact of the Brexit Vote on Markets
Jeremy Siegel (K@W) Jun 29, 2016
Wharton finance professor Jeremy Siegel says despite some negatives from the Brexit, U.S. stocks can still rise 10% to 12% by year-end and European stocks are a buy for longer-term investors.

Will the Real European Union Please Stand Up?
Tamim Bayoumi (PIIE) Jun 29, 2016
The turmoil in Europe following the Brexit vote has made one thing clear: European leaders will need to sit down at a summit and define the future of the 66-year-old European project.

Globally Important German Financial System is Resilient
IMF Survey Jun 29, 2016
The financial system of Germany, home to systemically important financial institutions, has been bolstered by EU-wide and global reforms in the financial sector. At the same time, low interest rates and the ongoing transition to new supervisory and resolution mechanisms may pose risks, according to the IMF.

Brex-Back? Probably Not
Holger Schmieding (Globalist) Jun 29, 2016
Could the UK exit from the Brexit? Could Boris Johnson do a Tsipras?

The Next Silicon Valley Won't Do Silicon
Noah Smith (Bloomberg View) Jun 29, 2016
Instead of mimicking America's high-tech hub, cities need to experiment with other growth industries.

Brexit’s Blow To Globalization
Carmen Reinhart (Project Syndicate) Jun 29, 2016
Less than a decade after the 2008 financial crisis dealt a major blow to globalization, Brexit has just delivered another. With the world already facing anemic growth and low investment, any adequate damage-control plan must include prompt resolution of the new rules of the game for Britain and its relationship with the EU.

Little England and Not-so-Great Britain
Ian Buruma (Project Syndicate) Jun 29, 2016
If Brexit triggers a Europe-wide revolt against liberal elites, it would be the first time in history that Britain leads a wave of illiberalism in Europe. This would be a great tragedy – for Britain, for Europe, and for a world in which most of the major powers already are turning toward increasingly illiberal politics.

Mapmaking and Warmongering in Africa
Stelios Michalopoulos and Elias Papaioannou (Project Syndicate) Jun 29, 2016
The Middle East's seemingly perpetual instability is often attributed to the the Sykes-Picot Agreement, which partitioned the Ottoman Empire between France and Great Britain. The same could be said of Africa, where the colonial powers' capriciously drawn borders have been fueling conflict for decades.

Brexit’s Lesson For Asia’s Democracies
Yuriko Koike (Project Syndicate) Jun 29, 2016
The UK, in voting to evict itself from the EU, is steering the West into uncharted territory. And the populist surge now rocking the West has its own echoes in Asia, where national rivalries remain raw, and historical memories continue to sow divisions.

Project Syndicate
Christopher Granville (Project Syndicate) Jun 29, 2016
Brexit leader Boris Johnson declared in his victory speech that UK membership in the EU could be decided only by “putting it to the people.” Now that the vote has passed, the British government should hold a proper referendum to determine which non-EU future the people actually want.

How Puerto Rico Can Recover
José Antonio Ocampo (Project Syndicate) Jun 29, 2016
After nearly a decade of recession, Puerto Rico may finally get the debt restructuring it needs to put its economy back on a sustainable path. But there is little hope of restoring growth if the US government persists in its neo-colonial approach to the island.

Brexit Threatens World Peace and Security
Alex de Waal (Boston Review) Jun 29, 2016
Brexit has dealt a fatal blow to the UK. Even worse is the damage it has done to the struggle for peaceful global politics. De Waal analyzes how the Brexit vote fell into the hands of Britain's far-right nationalists, and predicts that Brexit will leave the world a more dangerous place.

Frexit Is Coming
Robert Zaretsky (FP) Jun 29, 2016
Britain's departure meant the end of an era. France's departure would mean the end of the EU.

The limited role of exchange rates in export competitiveness
Filippo di Mauro, Konstantins Benkovskis, Sante De Pinto and Marco Grazioli (VoxEU) Jun 29, 2016
In the ‘currency wars’ discussion, it is almost taken for granted that exchange rate depreciations will result in non-trivial export gains. Using evidence from countries in Europe and Asia, this column argues instead that factors unrelated to prices/exchange rates often play a predominant role in shaping trade developments. Moreover, these factors affect export outcomes in a very diversified manner across countries, in part because of the interplay of global value chains. In the ‘currency wars’ discussion, it is almost taken for granted that exchange rate depreciations will result in non-trivial export gains. Using evidence from countries in Europe and Asia, this column argues instead that factors unrelated to prices/exchange rates often play a predominant role in shaping trade developments. Moreover, these factors affect export outcomes in a very diversified manner across countries, in part because of the interplay of global value chains.

Slavery as free trade
Blake Smith (Aeon) Jun 29, 2016
The 18th-century thinkers behind laissez-faire economics saw slavery as a great example of global free trade

Britain is starting to imitate Greece
Philip Stephens (FT) Jun 30, 2016
Our two-party system has been under strain for some time. Now it is splintering.

Renzi needs a banking plan that will work
FT View Jun 30, 2016
Italy’s prime minister is running out of time to recapitalise the sector.

Watch the interest rate outlook shift following Brexit vote
Gillian Tett (FT) Jun 30, 2016
Future historians may conclude this is one of the most important ripple effects of the poll.

EU institutions must share some of the blame for Brexit
Lubomir Zaoralek (FT) Jun 30, 2016
The European Commission leaders epitomise image of a technocratic elite.

Brexit and the City: Europe plots a bank heist
FT Reporters (FT) Jun 30, 2016
London-based companies may need to move chunks of their business — but which cities in the EU will benefit most?

Taking Refuge in Dollar Could Expose World Economy to New Perils
Peter S. Goodman (NYT) Jun 30, 2016
After the Brexit vote, the American currency is soaring — threatening a fragile recovery in the United States and risking trouble for emerging markets.

Brexit: Sovereign Kingdom or little England?
Charles Krauthammer (WP) Jun 30, 2016
Scotland and Northern Ireland might emulate Britain’s understandable self-assertion.

EU, UK Leaders Attempt to Chart Path Forward in Wake of Referendum Result
Bridges, Volume 20, Number 24 Jun 30, 2016
Leaders from the EU’s 28 member states met on Tuesday in an attempt to clarify next steps in the EU-UK relationship, following last week's vote by UK citizens to leave the European Union. However, the road ahead remains highly uncertain, as does the expected level of the fallout for all sides, with the story evolving by the hour.

China Investment Deal "Immediate Priority," EU Commission Says
Bridges, Volume 20, Number 24 Jun 30, 2016
Clinching a bilateral investment deal with China is an "immediate priority" for the EU as it works to boost cooperation across a range of fronts with Beijing, said the European Commission in a strategy document released last week.

US Agency Approves Steel Duties on China, Other Economies
Bridges, Volume 20, Number 24 Jun 30, 2016
The US International Trade Commission (USITC) announced last week that it had approved duties on "cold-rolled steel flat products" from China and Japan, citing results from an investigation that found injury to American domestic industry.

A Bridge From Brexit
John A. Powell (INET) Jun 30, 2016
Several days ago, we woke up to a new world. Britain had voted to leave the European Union. Some were pleased, many were deeply concerned. What is likely is that many will be affected. Some wonder if the EU will survive. It will take months if not years to fully understand the ramifications.

Slave to the Blog: The Waiting Game I
Stephan Haggard (PIIE) Jun 30, 2016
We have argued in previous posts that North Korea is vulnerable to an old-fashioned balance of payments crisis. Some of the shocks the country is facing—the slowdown in China trade, the closing of Kaesong, the likely effects of further controls on banking and shipping—are large.

Brexit and the Open Wounds of Globalization
Monica de Bolle (PIIE) Jun 30, 2016
Globalization and free trade are fast becoming dirty words in the Western political vernacular. That’s because they are all too easy culprits for major unforeseen shocks—like the 2008 financial crisis or, more recently, the United Kingdom’s decision to exit the European Union. The solution is not...

Brexit: Is the Financial System Ready?
Sebastian Röing (PIIE) Jun 30, 2016
“Some market and economic volatility can be expected as this process unfolds. But we are well prepared for this.” Those were the words of Mark Carney , governor of the Bank of England, following the UK referendum on EU membership last Friday.

German Chancellor Is the U.K.'s Best Hope
Leonid Bershidsky (Bloomberg View) Jun 30, 2016
France would like to make an example of the Brits, but Merkel favors fairness in navigating Brexit.

Football, Brexit, and Us
Ricardo Hausmann (Project Syndicate) Jun 30, 2016
Of the 24 teams that qualified for this year’s UEFA European Cup tournament, only one came from Germany, but three came from the UK: England, Wales, and Northern Ireland. The Brexit vote is less surprising when one understands why, for both fans and citizens, less is often more.

The Future of Computing
Bruno Michel (Project Syndicate) Jun 30, 2016
Ever since the American computer scientist John McCarthy coined the term “Artificial Intelligence” in 1955, the public has imagined a future of sentient computers and robots that think and act like humans. Though that remains a distant prospect, the foreseeable frontier of computing is no less exciting.

The Anti-Globalization Brexplosion
Yoon Young-kwan (Project Syndicate) Jun 30, 2016
Populism, nationalism, and xenophobia were all factors in Brexit's passage in the UK, but they are only surface-layer phenomena in a larger sea change. As has happened throughout the history of capitalism, a fundamental shift is occurring worldwide in the relationship between the state and the market.

China’s Bad-Neighbor Policy Is Bad Business
Christopher R. Hill (Project Syndicate) Jun 30, 2016
China is in a rut, with slower growth and an increasingly restive public questioning the promise of the "Chinese Dream" of steadily rising prosperity and national greatness. It won't fix its problems with minor tweaks, and part of what's called for is cleaning up its image as a regional bully.

Reawakening Europe
Joschka Fischer (Project Syndicate) Jun 30, 2016
We do not need a victory by Donald Trump in the US, or by National Front leader Marine Le Pen in next year’s French presidential election, to know where the nationalism underlying the Brexit vote leads. And yet reversing course will be no easy task for a Europe that rejects further integration.

Migration Trend: Young and Poor Move to Lands of Aging Rich
Joseph Chamie (YaleGlobal) Jun 30, 2016
Median age gaps of 10 years and more between sending and receiving nations add to migration pressures.

Bail-in versus bail-out: The Atlante example
Paolo Giudici and Laura Parisi (VoxEU) Jun 30, 2016
In April 2016, Italian banks set up an equity fund intended to recapitalise troubled financial institutions in a ‘private bail-out intervention’ scenario, with a view to avoiding a bail-in under the European Bank and Recovery Resolution directive. This column analyses the main differences between a bail-in and a bail-out scenario. In particular, it compares contagion effects, and thus the total default probabilities of financial institutions in these two circumstances, in order to establish which banks would benefit more from a bail-out rather than a bail-in.

Currency valuation and risk premia
Lukas Menkhoff, Lucio Sarno, Maik Schmeling and Andreas Schrimpf (VoxEU) Jun 30, 2016
Determining ‘currency value’ is a century-old topic on which there is little consensus among economists. This column proposes a novel way of adjusting real exchange rates for key country-specific fundamentals to obtain better gauges of currency valuation levels. Adjusting for productivity, export quality, foreign assets, and output gaps is shown to isolate information related to currency risk premia across countries. This can serve as a more precise input into investment and policy decisions.