News & Commentary:

Articles/Commentary

The Brexit election that leaves Britain the loser
Philip Stephens (FT) Jun 1, 2017
May refuses to talk in any detail about life outside the EU.

Buyout fund investors must get over their ‘FoMo’
Kate Burgess (FT) Jun 1, 2017
The longer they let their fear fester, the more it will cost them.

Red Capital in Hong Kong
Yi-Zheng Lian (NYT) Jun 1, 2017
Investment from mainland China threatens to reshape the city’s economy, and its politics.

Trump could spur the rise of a new, not-so-liberal world order
Fareed Zakaria (WP) Jun 1, 2017
Even if the Western World doesn’t end, the United States will be on the sidelines.

G7 Leaders Call for "Free, Fair" Trade at Taormina Summit
Bridges, Volume 21, Number 19 Jun 1, 2017
Leaders from the G7 nations met in the Sicilian town of Taormina from 26-27 May, with hot-button issues such as trade, inequality, the global economy, and climate change featuring on their agenda.

Australia, Peru Kick Off FTA Talks
Bridges, Volume 21, Number 19 Jun 1, 2017
Australian and Peruvian trade officials announced last week the start of formal talks towards reaching a free trade agreement (FTA), with the first negotiating round scheduled for July.

Indian, German Leaders Renew Push for Deeper EU-India Trade Ties
Bridges, Volume 21, Number 19 Jun 1, 2017
Indian Prime Minister Narendra Modi and German Chancellor Angela Merkel met in Berlin this week, calling for renewed efforts towards boosting trade ties between New Delhi and the European Union.

How many countries could end extreme poverty tomorrow?
John McArthur (Brookings) Jun 1, 2017
A large and growing number of countries are close to ending extreme poverty. John McArthur considers how many of them could use direct cash transfers to help cover the last mile.

The United Kingdom's Loss Is Europe's Gain
Simeon Djankov (PIIE) Jun 1, 2017
One year after Brexit was approved by British voters, the United Kingdom is no longer as attractive to European nationals for work and living as it was in prior years.

A Realistic Plan to Keep the Euro Zone Together
Leonid Bershidsky (Bloomberg View) Jun 1, 2017
The European Commission's proposal for improved integration is better than the alternative.

Corporate Bonds Are Key to Understanding Volatility
Ben Emons (Bloomberg View) Jun 1, 2017
The Trump administration has upended the Presidential Cycle Theory.

Financial Regulation Calls for 20/20 Vision
Antonio F Weiss and Simon Johnson (Bloomberg View) Jun 1, 2017
Weakening the Financial Stability Oversight Council will raise the odds of another crisis.

Is China Headed for a Recession?
Christopher Balding (Bloomberg View) Jun 1, 2017
Not exactly, but that raises another problem.

A Sustainable Economy for the Arab World
Mahmoud Mohieldin (Project Syndicate) Jun 1, 2017
Building a sustainable economy is an urgent imperative for policymakers, businesses, and citizens throughout the Arab world. It won’t be easy, but the region has plenty of experience overcoming even the most difficult challenges.

Vive l’Euro?
Lucrezia Reichlin (Project Syndicate) Jun 1, 2017
France’s rejection of far-right populism has restored faith in the beleaguered EU, but the true test of the bloc’s staying power will be fiscal governance. While no one expects major reforms anytime soon, several technical changes – and national-level experimentation – can and should be implemented immediately.

Can Fiscal Contraction Ever Boost Growth?
Andrés Velasco (Project Syndicate) Jun 1, 2017
Recent experience in Europe suggests that fiscal contraction cannot be expansionary. In two South American countries, however, the idea that cutting government spending can spur growth should be revisited.

Standing Up for Europe
George Soros (Project Syndicate) Jun 1, 2017
Today’s European Union needs both salvation and radical reinvention. Saving the EU must take precedence, because Europe is in existential danger; but, as French President Emmanuel Macron emphasized during his election campaign, reviving the support that the EU used to enjoy is no less essential.

Will Trump Destroy the Dollar?
Sebastian Mallaby (Atlantic) Jun 1, 2017
How a clash with the Fed could stoke inflation and destabilize the economy.

Why Globalization Stalled
Fred Hu and Michael Spence (FA) Jun 1, 2017
And how to restart it.

Millenials and the Future of Work
Finance & Development, June 2017, Vol. 54, No. 2 Jun 1, 2017
Along with exciting new possibilities, millennials face a whole different set of obstacles.

The Fed's "Tequila Crisis"
Tim Sablik (FRBR Econ Focus) Jun 1, 2017
A financial crisis in Mexico in the mid-1990s sparked a debate about the Fed's role in international markets and its independence.

Robots for the Long Haul
David A. Price (FRBR Econ Focus) Jun 1, 2017
There are 1.8 million heavy truck and tractor-trailer drivers in the United States. Will self-driving trucks soon mean the end of many of those jobs?

The Future of Work
Arun Sundararajan (F&D) Jun 1, 2017
The digital economy will sharply erode the traditional employer-employee relationship.

Pension Shock
Mauricio Soto (F&D) Jun 1, 2017
Young adults in advanced economies must take steps to increase their retirement income security.

Education for Life
Nagwa Riad (F&D) Jun 1, 2017
Labor markets are changing, and millennials must prepare and adjust.

When Money Can No Longer Travel
Andreas Adriano (F&D) Jun 1, 2017
Correspondent banking relationships, which facilitate trade and economic activity, are under pressure.

Why Is the VIX "Fear gauge" So Low?
Various (TIE) Jun 1, 2017
The world today is a cauldron of global political uncertainty. From Brexit to Donald Trump to North Korea, the potential for upheaval appears to never have been greater. Yet financial markets reflect otherwise. The VIX, the popular measure of the implied volatility of S&P 500 index options, is at its lowest level in years. What gives?

china’s Faustian Bargain
Chi Lo (TIE) Jun 1, 2017
An extraordinary debt bomb?

End-times for humanity
Claire Colebrook (Aeon) Jun 2, 2017
Humanity is more technologically powerful than ever before, and yet we feel ourselves to be increasingly fragile. Why?

China worries temper emerging markets optimism
Attracta Mooney (FT) Jun 2, 2017
As investors pile in, some question whether the best of the rally is already over.

Economic Fallout of Climate Move? It Depends on How We Value Time
Neil Irwin (NYT) Jun 2, 2017
A decision raises issues that are as much philosophic as economic: For example, how much to value the future versus the present.

To Be Great, America Must Be Good
Susan E. Rice (NYT) Jun 2, 2017
The president has given up the United States' world leadership. We must rebuild it - and fast.

Why India's No. 2 Again
Mihir Sharma (Bloomberg View) Jun 2, 2017
New GDP numbers show there’s no avoiding the need for more serious reforms.

Game Theory and Trump's Climate Negotiations
Mohamed Aly El-Erian (Bloomberg View) Jun 2, 2017
America’s pursuit of short-term benefits would come at the risk of longer-term damage.

Why Consumers Aren't Spending
Gary Shilling (Bloomberg View) Jun 2, 2017
Confidence is up sharply, yet retail sales are down.

A Realist's Guide to Euro-Zone Integration
Ferdinando Giugliano (Bloomberg View) Jun 2, 2017
European Commission Vice President Valdis Dombrovskis says euro-zone “safe assets” can work, but also issues a warning.

The Power of Mini-Grids
Strive Masiyiwa and Richard Branson (Project Syndicate) Jun 2, 2017
Despite impressive economic development in recent years, Africa still lags far behind on energy provision, with almost two-thirds of the continent’s residents lacking access to electricity. But there is a flexible, fast, and low-cost option for closing the power gap.

The Eurozone’s Hidden Strength
Daniel Gros (Project Syndicate) Jun 2, 2017
For years, the eurozone has been perceived as a disaster area, with discussions of the monetary union’s future often centered on a possible breakup. Yet, lately, the eurozone has become the darling of financial markets – and for good reason.

The Truth Behind Today’s US Inflation Numbers
J. Bradford DeLong (Project Syndicate) Jun 2, 2017
When the US Federal Reserve began to raise interest rates in December 2015, it issued a median forecast that, in retrospect, significantly overstated the strength of the US economy. This suggests that the Fed's monetary policies, in combination with fiscal policies, are not doing enough to stimulate the US economy.

GDP and capturing the benefits of the Internet economy
Charles R. Hulten and Leonard Nakamura (VoxEU) Jun 2, 2017
Conventional growth theory characterises innovation as ‘resource-saving’, in the sense that it allows the same output to be produced with fewer resources. This column introduces a sources-of-welfare growth model that also includes a measure of ‘output-saving’ innovation, which arises from the expanded scope and efficiency in consumer choice recently brought about by the Internet economy and smartphones. The findings highlight how various new kinds of intangible capital complicate the measurement of GDP. Conventional growth theory characterises innovation as ‘resource-saving’, in the sense that it allows the same output to be produced with fewer resources. This column introduces a sources-of-welfare growth model that also includes a measure of ‘output-saving’ innovation, which arises from the expanded scope and efficiency in consumer choice recently brought about by the Internet economy and smartphones. The findings highlight how various new kinds of intangible capital complicate the measurement of GDP.

Europe as an optimal political area: New findings
Alberto Alesina, Guido Tabellini and Francesco Trebbi (VoxEU) Jun 2, 2017
Doubts remain over whether Europe has the right fundamentals to foster greater political integration. This column compares the attitudes of European citizens in a number of social and political areas, and finds that differences are no greater between countries than within countries. The real obstacle is not divergence of ideas and interests but nationalism, and the need to strengthen a common European identity, partly at the expense of national identities, is the most complex obstacle on the path of political integration. Doubts remain over whether Europe has the right fundamentals to foster greater political integration. This column compares the attitudes of European citizens in a number of social and political areas, and finds that differences are no greater between countries than within countries. The real obstacle is not divergence of ideas and interests but nationalism, and the need to strengthen a common European identity, partly at the expense of national identities, is the most complex obstacle on the path of political integration.

Bitcoin, a bubble with benefits
Economist Jun 3, 2017
Is a cryptocurrency most like tulips, gold or the dollar—or is it something else entirely?

Congo is Africa’s tinderbox
Economist Jun 3, 2017
Civil war and the ambitions of a dictator determined to cling on to the presidential palace are dragging the country towards ruin.

Loose money raises the risks for private equity
FT View Jun 4, 2017
The industry is attracting cash easily but investments are expensive.

Bye Bye, Paris! Hello, Central Pennsylvania!
Jean-Francois Boittin (Globalist) Jun 4, 2017
Reflections on Donald Trump’s exit from global responsibility.

Universal Basic Income Is Neither Universal Nor Basic
Yuval Noah Harari (Bloomberg View) Jun 4, 2017
Artificial intelligence is going to put many out of jobs. But paying people not to work will only increase inequality and rancor.

Fiscal Policy under Demographic Change and Radical Uncertainties in Asia
Mitsuhiro Furusawa (IMF) Jun 5, 2017
The challenges to achieving inclusive growth arising from inequality and demographic change, and the role of fiscal policy in addressing them.

Sound the Alarm: Robots Are Disrupting (Far Too Few) Jobs
Robert Atkinson and John Wu (Brink) Jun 5, 2017
Pessimists are wrong to assume robots will eventually be able to do most jobs, or to fear that once a job is lost there will be no second-order job-creating effects from increased productivity and spending. Beyond that, however, the pessimists’ grim assessments suffer from being utterly ahistorical.

India Inc walks a banking tightrope
Simon Mundy and Amy Kazmin (FT) Jun 5, 2017
Delayed infrastructure projects have led to a surge in non-performing loans in the country’s banks.

World Bank warns on emerging market growth
Shawn Donnan (FT) Jun 5, 2017
Economists say long-term economic prospects undermined by weak investment.

China, India and the clash of two great civilisations
Gideon Rachman (FT) Jun 5, 2017
The two emerging superpowers are engaged in a geopolitical and ideological battle.

Europe Needs More Than a Bundle of Bonds
Bloomberg View Jun 5, 2017
The new “safe asset” proposed by Brussels doesn’t solve the euro zone’s problem.

If Corporations Are People, They Can Be Jerks
Satyajit Das (Bloomberg View) Jun 5, 2017
The problem isn't globalization, but how companies treat the countries where they operate.

The Venezuela Debt Dilemmas
Mohamed Aly El-Erian (Bloomberg View) Jun 5, 2017
The bonds trade at a very high yield, but the default risk is considerable.

The Renewal of Europe’s Center?
Harold James (Project Syndicate) Jun 5, 2017
Despite their differences, British Prime Minister Theresa May, French President Emmanuel Macron, and German Chancellor Angela Merkel have one thing in common. All are building a new type of politics – a kind of centrist populism – that is increasingly filling the gap left by the waning of traditional political parties' influence.

The Global Recovery’s Downside Risks
Nouriel Roubini (Project Syndicate) Jun 5, 2017
Recent economic data from around the world suggest that growth could soon accelerate, now that the global economy has weathered multiple crises over the past two years. And yet the possibility of another global slowdown – if not an outright stall – cannot be ruled out.

Angela Merkel’s Challenge to Europe
Joschka Fischer (Project Syndicate) Jun 5, 2017
The German chancellor's recent speech, at a campaign stop near Munich, in which she called on Europeans to "take our fate into our own hands," did not amount to a rejection of Europe's transatlantic alliance with the US. But it could have far-reaching implications for Germany's role in the EU and in the world.

The Swiss Phillips curve, 1916-2015
Stefan Gerlach (VoxEU) Jun 5, 2017
In many economies, inflation may have remained stubbornly low during the recovery because their Phillips curves have become flatter. This column uses an analysis of Swiss data since 1916 that support this argument. The most recent structural break in the Swiss Phillips curve occurred in 1994, when it became much flatter. Previous structural breaks suggest that this has been a change from an above-average to a below-average slope, not a collapse from the long-term normal level. In many economies, inflation may have remained stubbornly low during the recovery because their Phillips curves have become flatter. This column uses an analysis of Swiss data since 1916 that support this argument. The most recent structural break in the Swiss Phillips curve occurred in 1994, when it became much flatter. Previous structural breaks suggest that this has been a change from an above-average to a below-average slope, not a collapse from the long-term normal level.

Climate pledge shows how cities bypass national governments
Ivo Daalder (FT) Jun 6, 2017
Mayors and governors forge global networks to solve local problems.

Perils Ahead in European Politics
Jacob Funk Kirkegaard (PIIE) Jun 6, 2017
European politics in 2017 were beginning to look stable in the wake of elections in the Netherlands and France, where voters rejected populist candidates in favor of mainstream pro-European alternatives. But recent developments in Italy, Germany, and Britain have injected new uncertainties.

Will the Crazy Global Debt Bubble Ever End?
Charles Hugh Smith (Mises Wire) Jun 6, 2017
If the debt burden is large enough, at some point, even a 0.1% interest rate becomes unaffordable.

Key Takeaways from PIMCO’s Secular Outlook: Five Pivot Points to Watch
PIMCO Jun 6, 2017
Over the next five years, there could be up to five significant pivots in the direction and scope of the monetary, fiscal, trade, geopolitical and exchange rate policies pursued by the world’s major countries.

A Vast Blockchain Experiment Could Change Russia
Leonid Bershidsky (Bloomberg View) Jun 6, 2017
Putin has failed to spark a tech revolution, and not for a lack of trying.

A Scientific Method for the SDGs
Anne-Sophie Stevance and David McCollum (Project Syndicate) Jun 6, 2017
With a roadmap for understanding where different Sustainable Development Goals do and do not align, national leaders can make better policy decisions. Scientists are well-positioned to provide such a roadmap, because they know how to ask the right questions and draw evidenced-based conclusions.

The Business Side of Brexit
Rain Newton-Smith (Project Syndicate) Jun 6, 2017
In the year since the British voted to leave the EU, the UK economy has proved surprisingly resilient. But if the British economy is to cope with Brexit as well as it has coped with the Brexit vote, the government, like businesses, must minimize the impact of uncertainty by managing that uncertainty effectively.

Japanese frugality versus Italian profligacy?
Athanasios Orphanides (VoxEU) Jun 6, 2017
Results of actions taken by central banks across advanced economies in response to the Global Crisis have been uneven in allaying fears regarding debt sustainability. This column compares the cases of Italy and Japan to that of Germany to examine whether monetary policy actions since the crisis have become a more important driver of debt dynamics than fiscal policy actions. In contrast to Japan, where in the past few years decisive monetary policy actions have allayed fiscal concerns, in Italy monetary policy decisions appear to have contributed to debt sustainability concerns. Results of actions taken by central banks across advanced economies in response to the Global Crisis have been uneven in allaying fears regarding debt sustainability. This column compares the cases of Italy and Japan to that of Germany to examine whether monetary policy actions since the crisis have become a more important driver of debt dynamics than fiscal policy actions. In contrast to Japan, where in the past few years decisive monetary policy actions have allayed fiscal concerns, in Italy monetary policy decisions appear to have contributed to debt sustainability concerns.

State-contingent debt instruments for sovereigns
S. M. Ali Abbas, Daniel Hardy, Jun Kim and Alex Pienkowski (VoxEU) Jun 6, 2017
The theoretical benefits of state-contingent debt instruments for sovereigns – such as GDP-linked and extendible bonds – have been advocated by academics for several decades, but only recently have the practical constraints and considerations been explored in detail. This column summarises this more recent work, highlighting key findings on instrument design and on broader market development prospects. The theoretical benefits of state-contingent debt instruments for sovereigns – such as GDP-linked and extendible bonds – have been advocated by academics for several decades, but only recently have the practical constraints and considerations been explored in detail. This column summarises this more recent work, highlighting key findings on instrument design and on broader market development prospects.

What history tells us about state-contingent debt instruments
Myrvin L. Anthony, Narcissa Balta, Tom Best, Sanaa Nadeem and Eriko Togo (VoxEU) Jun 6, 2017
The case for state-contingent debt instruments, linking contractual debt to a pre-defined variable, has been theorised but not developed. This column gives a historical perspective of the issuance of these instruments to alleviate liquidity and/or solvency pressures on the sovereign in ‘normal times’ and during restructurings. It also discusses the valuable lessons that inflation-linked bonds provide for development of the state-contingent debt instrument market. The case for state-contingent debt instruments, linking contractual debt to a pre-defined variable, has been theorised but not developed. This column gives a historical perspective of the issuance of these instruments to alleviate liquidity and/or solvency pressures on the sovereign in ‘normal times’ and during restructurings. It also discusses the valuable lessons that inflation-linked bonds provide for development of the state-contingent debt instrument market.

A toolkit for state-contingent debt instruments
Tom Best, Christopher Dielmann, Meghan Greene and Tania Mohd Nor (VoxEU) Jun 6, 2017
State-contingent debt instruments could provide sovereigns with additional policy space in bad states of the world. This column presents an Excel-based tool that allows debt managers and investors to explore the impact of different designs of such instruments on public debt and gross financing needs under user-specified macroeconomic scenarios (both baseline and shocks). Illustrative results show the potential benefits of different bond designs on both debt and gross financing needs. State-contingent debt instruments could provide sovereigns with additional policy space in bad states of the world. This column presents an Excel-based tool that allows debt managers and investors to explore the impact of different designs of such instruments on public debt and gross financing needs under user-specified macroeconomic scenarios (both baseline and shocks). Illustrative results show the potential benefits of different bond designs on both debt and gross financing needs.

US-China Cooperation in a Changing Global Economy
Adam S. Posen, Jiming Ha, Karen Dynan, Jason Furman, Joseph E. Gagnon, Nathan Sheets, Nicolas Véron, Jeromin Zettelmeyer, Chad P. Bown, Lee G. Branstetter, J. Bradford Jensen, Zixuan Huang, Nicholas R. Lardy, Jeffrey J. Schott and Zhiyao (Lucy) Lu (PIIE) Jun 6, 2017
The Trump administration’s emphasis on “America First" would significantly affect US-China trade and investment, which in turn would affect both countries’ economic performance and global roles (but might not change balance of payments so important to President Trump).

Storm clouds loom over emerging market growth
FT View Jun 7, 2017
Governments must raise investment while global demand is robust.

Escaping the procyclical fiscal policy trap
Carlos Végh (FT) Jun 7, 2017
Developing countries have found it especially hard to save for rainy days.

Is it finally time for a raise for American workers?
Sam Fleming (FT) Jun 7, 2017
Wages and inflation should be poised to rise alongside interest rates, but some have doubts over the health of the US economy.

Trump Lies. China Thrives.
Thomas L. Friedman (NYT) Jun 7, 2017
The president is a serial liar, but he's right that Beijing plays unfair on trade.

Buying More Chevys Won’t Fix Germany’s Imbalance
Jason Furman (WSJ) Jun 7, 2017
Berlin has a huge surplus in its current account, but the bilateral deals Trump has in mind won’t help.

The Populism Paradox
Tony Crescenzi (PIMCO) Jun 7, 2017
Populism paradoxically is failing to reverse the factors that led to its rise, and in many cases threatens to worsen conditions.

The Next Recession
Joachim Fels (PIMCO) Jun 7, 2017
As the U.S. economic expansion enters its ninth year this month, we think the chance of a recession over the next 12 months is 10% or less. Yet, as we note in our Secular Outlook, the probability of a recession over the next five years is around 70%, so it's worth speculating on the causes and contours of the next recession. In the first scenario, the economy bumps along until a major external shock hits. The recession – caused by the resulting plunge in asset prices and falling business and consumer confidence – could be relatively shallow but last longer than usual due to insufficient fiscal and monetary responses. In the second scenario, the economy falters due to an internal buildup of imbalances and overheating in goods, labor or asset markets that would compel the Fed to hike rates. But having built up enough "ammunition" in the form of higher rates, the Fed could cut rates to promote a V-shaped recovery.

The Middle East’s Oil-Price Problem
Ishac Diwan (Project Syndicate) Jun 7, 2017
If oil prices remain low over the long term, the Middle East could suffer a macroeconomic shock of historic proportions. Although some countries in the region are better positioned for revenue shortfalls than others, all will have to make tough choices now to ensure future prosperity.

A Better Investment Framework for Africa
Wolfgang Schäuble (Project Syndicate) Jun 7, 2017
Although Africa’s enormous economic potential is not news, until now, policymakers around the world have not successfully defined the political and economic steps that must be taken to enable Africa to realize this potential fully. Germany's G20 presidency seeks to change that.

Authoritarians Flop as Economic Modernizers
Noah Smith (Bloomberg View) Jun 7, 2017
The myth of the enlightened despot who spurs growth endures even though democratic reformers have a better record.

What the ECB Will Do This Week
Mohamed Aly El-Erian (Bloomberg View) Jun 7, 2017
The central bank seems in no rush to tighten monetary policy.

For the Pound's Sake, Don't Write May a Blank Check
Alberto Gallo (Bloomberg View) Jun 7, 2017
Brexit will shave 7.5 percent from U.K. GDP over the coming years, and a no-deal Brexit would be even more destructive.

Europe's Central Bank Is the World's Most Important
Lawrence Hatheway (Bloomberg View) Jun 7, 2017
The ECB's moves are influencing not only European bonds, but Treasuries, too.

Can Macron Redraw the Political Map?
Kemal Dervis and Caroline Conroy (Project Syndicate) Jun 7, 2017
The challenge before French President Emmanuel Macron is to forge a new social contract that protects the most vulnerable from the rapid shifts and abrupt disruptions inherent in a flexible twenty-first-century economy. If he succeeds, he will have delivered on reformists' long-held idea of “modernity.”

Labor Markets in the Age of Automation
Laura Tyson (Project Syndicate) Jun 7, 2017
Advances in artificial intelligence and robotics are powering a new wave of automation, with machines matching or outperforming humans in a fast-growing range of tasks. How should policymakers cope with the adverse effects of this process on employment, wages, and economic inequality?

The Trump administration's misguided focus on trade barriers
Caroline Freund (VoxEU) Jun 7, 2017
In assessing the underlying causes of the US’ significant trade deficits, the Trump administration’s focus appears to be on alleged unfair trade practices of foreign countries. This column argues that international trade policy has a negligible effect on trade balances. The aggregate US trade deficit results from macroeconomic pressures, while bilateral deficits are due to structural factors, supply chains, and how trade is measured. In assessing the underlying causes of the US’ significant trade deficits, the Trump administration’s focus appears to be on alleged unfair trade practices of foreign countries. This column argues that international trade policy has a negligible effect on trade balances. The aggregate US trade deficit results from macroeconomic pressures, while bilateral deficits are due to structural factors, supply chains, and how trade is measured.

Is One of Our Major Financial Markets Vulnerable to Price Manipulation?
Nick Hagar (PS) Jun 7, 2017
Last month, researchers at the University of Texas–Austin released a report alleging price distortion in a prominent financial index.

Carbon border taxes cannot fix the damage of Trump’s climate move
Alan Beattie (FT) Jun 8, 2017
A more piecemeal approach promises to yield better returns.

Macron attempts a feat that Trump wouldn’t dare
Catherine Rampell (WP) Jun 8, 2017
He’s leading, and to start he’s taking on the French economy.

WTO Agriculture Negotiators Review Buenos Aires Ministerial Options
Bridges, Volume 21, Number 20 Jun 8, 2017
The chair of the WTO agriculture negotiations, Kenyan Ambassador Stephen Karau, has suggested that farm trade talks on domestic support may need to continue beyond the organisation's eleventh ministerial conference, scheduled to take place this December in the Argentinean capital of Buenos Aires.

US, Mexico Clinch “Agreement in Principle” On Sugar Trade
Bridges, Volume 21, Number 20 Jun 8, 2017
Economic officials from the US and Mexico announced on Tuesday 6 June that they had reached a draft deal to prevent trade remedies planned by Washington on imported Mexican sugar, capping a prolonged series of talks between the two sides.

Trade, Investment, and Climate Action in Focus at EU-China Leaders’ Summit Trade, Investment, and Climate Action in Focus at EU-China Leaders’ Summit
Bridges, Volume 21, Number 20 Jun 8, 2017
The 19th EU-China Summit took place in Brussels, Belgium, last week, with officials working to advance cooperation on a series of items, including on trade, investment, and climate action.

Don’t Confuse Uncertainty With Volatility
William G. De Leon (PIMCO) Jun 8, 2017
Many market observers seem surprised that implied stock volatilities in 2017 have been at or near their lowest levels in a decade despite uncomfortable uncertainties across the global economy.

Europe (Finally) Shows How to Deal With a Failing Bank
Bloomberg View Jun 8, 2017
Move quickly, protect deposits, and force losses onto shareholders and junior creditors.

Will India Really Go Green?
Mihir Sharma (Bloomberg View) Jun 8, 2017
The answer depends on a host of questionable assumptions.

The Study Europe's Rate-Setters Should Read
Ferdinando Giugliano (Bloomberg View) Jun 8, 2017
A new paper shows why the longer rates stay low, the fewer benefits they bring.

How to Fix Failed Banks, and How Not To
Leonid Bershidsky (Bloomberg View) Jun 8, 2017
A tale of three bank rescues shows good supervision and transparency matter more than resolution rules.

Texas Isn't Really the New Saudi Arabia
Justin Fox (Bloomberg View) Jun 8, 2017
Tensions in the Middle East haven't had much effect on oil prices.

A Private-Sector Solution to the Refugee Crisis
Nirj Deva (Project Syndicate) Jun 8, 2017
The time has come to adapt development policies to the reality of what makes economies grow. Rather than simply handing money from one state to another, development funds must be used to mobilize the private sector.

Brazil’s Argentina Moment
Filipe Campante and Dani Rodrik (Project Syndicate) Jun 8, 2017
Last December, in a move to regain market confidence, Brazil’s National Congress adopted an unprecedented constitutional amendment that caps non-interest government expenditures for at least a decade. The move was born out of a real sense of fiscal urgency, but it carries significant long-term risks.

Steel, Aluminum, Lumber, Solar: Trump's Stealth Trade Protection
Chad P. Bown (PIIE) Jun 8, 2017
The Trump administration has quickly adopted an aggressive and antagonistic approach to using US trade laws as a protectionist tool. The effect on trade relations may not be as immediately disruptive as if Trump had followed through on campaign threats to pull the United States out of the North American Free Trade Agreement or impose 45 percent tariffs on China. However, the escalating trade barriers and the means through which the Trump administration is motivating their use have the potential to severely weaken the rules-based trading system. Rather than blowing it up by simply withdrawing, the end result of the Trump administration's tactics may be that the World Trade Organization implodes from within.

Lebanon defies the odds to keep its finances afloat
Steve Johnson (FT) Jun 9, 2017
‘Inevitable’ sovereign crisis postponed as diaspora props up huge public debt pile.

Britain in Disarray
NYT Jun 9, 2017
In an era of election surprises, Britain didn't disappoint. And the most remarkable thing may be how small a role Brexit played in the campaigns.

What’s Wrong With Our System Of Global Trade And Finance
John Judis and Dani Rodrik (TPM) Jun 9, 2017
As globalization has come under attack from the left and right, thoughts about the jeremiads from the Trump administration and how he assessed the problems of global capitalism in the wake of the Great Recession.

Prepare for the Battle to Save Britain (from Brexit)
Denis MacShane (Globalist) Jun 9, 2017
The election result is definitive proof that the British people do not want Theresa May’s hard Brexit.

Draghi Is Right to Hold Out for Wage Growth
Ferdinando Giugliano (Bloomberg View) Jun 9, 2017
Europe's recovery hasn't yet translated into higher pay for workers.

The Fed Needs a Better Inflation Target
Narayana Kocherlakota (Bloomberg View) Jun 9, 2017
A higher goal, with more public support, would benefit the central bank and the economy.

India's Illiberal Democracy
Pankaj Mishra (Bloomberg View) Jun 9, 2017
Narendra Modi is pioneering hybrid methods of repression that other autocrats should envy.

Treasuries-Bund Trade Is About to Get Interesting
Myron S Scholes and Ashwin Alankar (Bloomberg View) Jun 9, 2017
Option prices show downside risk to German bonds.

The Fed's Evolving Approach to Raising Rates
Mohamed Aly El-Erian (Bloomberg View) Jun 9, 2017
Amid signs of an economic slowdown, the central bank isn't afraid of tightening its monetary policy.

The Robot Future Won't Need a Lot More Electricity
Nathaniel Bullard (Bloomberg View) Jun 9, 2017
In automated factories, less power is needed for lights and air conditioning.

The Economic Consequences of a Hung Parliament
Diane Coyle (Project Syndicate) Jun 9, 2017
Britain's just-completed election will produce a weak government and considerable uncertainty – and not only about the UK's withdrawal from the EU. The greater the political instability, the more acute is the need for a framework that will finally start to address the deep divisions and challenges facing the British economy.

A Brexit Strategy for a Weak UK Government
Ngaire Woods (Project Syndicate) Jun 9, 2017
As Prime Minister Theresa May seeks to form a new government, she also needs to get down to the nitty-gritty of negotiating Britain’s exit from the EU. Preparations for the Brexit negotiations have been underway for some time, but they have so far been impeded by three elementary negotiating mistakes.

Europe’s New Appeasers
Slawomir Sierakowski (Project Syndicate) Jun 9, 2017
Hungarian Prime Minister Viktor Orbán has such a tight grip on power that Hungarians must depend on external pressure to stop the slide into authoritarianism. And yet even Germany, the only country that can exert significant influence, has failed to stop Orbán's latest attack on democracy.

Globalisation and executive compensation
Wolfgang Keller and Will Olney (VoxEU) Jun 9, 2017
Growing income inequality has been a hallmark of developed economies over the past few decades. Despite a large empirical literature exploring the determinants of this trend, to date few studies have explored the role of globalisation. Using US data on executive compensation, this column argues that while firm size, technology, and poor governance have all contributed to the growth in top incomes, globalisation is just as important in explaining the trend. Growing income inequality has been a hallmark of developed economies over the past few decades. Despite a large empirical literature exploring the determinants of this trend, to date few studies have explored the role of globalisation. Using US data on executive compensation, this column argues that while firm size, technology, and poor governance have all contributed to the growth in top incomes, globalisation is just as important in explaining the trend.

Countering the mining curse
Nicolas Berman, Mathieu Couttenier, Dominic Rohner and Mathias Thoenig (VoxEU) Jun 9, 2017
Countries that are rich in natural resources do not always prosper economically. This column uses data on conflict and mineral extraction in Africa to argue that recent rises in mineral prices explain up to a quarter of local conflicts between 1997 and 2010. Mining-induced violence is associated with foreign ownership, although corporate social responsibility policies were associated with less violence. This is relevant to the US debate on whether to scrap the legal requirement to disclose whether products contain conflict minerals. Countries that are rich in natural resources do not always prosper economically. This column uses data on conflict and mineral extraction in Africa to argue that recent rises in mineral prices explain up to a quarter of local conflicts between 1997 and 2010. Mining-induced violence is associated with foreign ownership, although corporate social responsibility policies were associated with less violence. This is relevant to the US debate on whether to scrap the legal requirement to disclose whether products contain conflict minerals.

Destination Brexit
James Meek (LRB) Jun 9, 2017
The driverless May continues to trundle towards her programmed destination, oblivious to the proliferation of warning signs, traffic cones, barriers and lollipop ladies signalling frantically at her to slow down.

Agriculture in the NAFTA Renegotiation
Cullen S. Hendrix (PIIE) Jun 9, 2017
Despite agriculture’s modest contribution to GDP in all three partner countries, agricultural issues will be a thorny aspect of the NAFTA renegotiation—just as they are in other trade agreement negotiations. US and Canadian agricultural producers like NAFTA and will fight hard to preserve it.

Britain’s chance to open serious debate on Brexit
FT View Jun 11, 2017
May’s rigid vision was inimical to the UK’s economic interest.

Victory sweeps Emmanuel Macron to heart of Europe’s revival
Tony Barber (FT) Jun 11, 2017
The French president’s legislative landslide offers hope beyond France.

Philip Hammond is the politician to salvage a Brexit deal
Philip Stephens (FT) Jun 11, 2017
The chancellor has the experience and temperament for complicated negotiations.

Brexit negotiations require a new mindset
Carolyn Fairbairn (FT) Jun 11, 2017
Businesses facing uncertainty need a forward-looking deal that prioritises prosperity

Trump’s Steel-Trapped Minds
WSJ Jun 11, 2017
A new Trump steel tariff would crush his ‘forgotten’ workers.

China’s New Bridges: Rising High, but Buried in Debt
Chris Buckley (NYT) Jun 11, 2017
China has built hundreds of dazzling new bridges, including the longest and highest, but many have fostered debt and corruption.

Theresa May: A Perfect Symbol for the UK’s Confusion
Stephan Richter (Globalist) Jun 11, 2017
It isn’t just the UK Prime Minister who is confused about what kind of UK she wants. So is the rest of the country.

Basel III Liquidity and the Need for Balance Sheet Optimisation will Impact Banks’ Business Models
Moorad Choudhry (EFR) Jun 11, 2017
The Basel III liquidity coverage ratio (LCR) has a direct balance sheet impact on every bank because it dictates the size and structure of their high quality liquid asset (HQLA) portfolio. The metric is influenced by both type of product and type of customer, hence there is a need to review liability strategy so as to optimise the balance sheet. We present an approach to customer and deposit strategy formulation that will assist banks in achieving an optimised LCR/HQLA result.

Macron has the means to govern; now he must act
FT View Jun 12, 2017
Labour market reform will be the first and most important test.

India’s sales levy reveals some taxing problems
FT View Jun 12, 2017
The government deserves credit for overcoming political obstacles.

Germany’s initiative on Africa must be seized
Mo Ibrahim, Aliko Dangote and Donald Kaberuka (FT) Jun 12, 2017
A G20 Partnership with Africa has potential — if the continent’s governments step up.

Despite global upheavals, investment into EMs held up in 2016
Courtney Fingar (FT) Jun 12, 2017
Cross-border greenfield FDI continues to seek economic growth.

It is time to make a positive economic case for Brexit
Paul Marshall (FT) Jun 12, 2017
At no stage did Theresa May argue the benefits of global free trade.

India is Opec’s litmus test on oil demand growth
Anjli Raval (FT) Jun 12, 2017
South Asian nation pushes into renewables and electric cars.

Canada Over the Long Term: The Big Pivot
Ed Devlin (PIMCO) Jun 12, 2017
While our baseline global forecast is relatively benign for Canadian growth over the secular horizon, we do highlight a number of risks that could cause external shocks to Canada’s small, open economy.

USAID can take transparency to the next level
George Ingram (Brookings) Jun 12, 2017
How the newly nominated administrator for the U.S. Agency for International Development can continue the agency's progress on aid transparency.

Working Together to Address the Migration Policy Crisis: An Update on International Cooperation
Hannah Postel (CGD) Jun 12, 2017
You wouldn’t know it from the headlines, but the world is working to improve the global migration system. It began last fall at the most important international meeting on migration since the 1950s. I saw this work up close at the Global Forum on Migration and Development (GFMD) preparatory meetings in Geneva earlier this spring, and here’s where it stands.

Italy: Another Downer for the Populist Wave in Europe
Holger Schmieding (Globalist) Jun 12, 2017
Beppe Grillo’s Five Stars movement loses some of its lustre.

Brexit: Why the EU Will Continue to Stand Firm
Stephan Richter (Globalist) Jun 12, 2017
With Theresa May greatly weakened, and the UK likely facing new elections and/or a new Prime Minister soon, it makes little sense for the EU to negotiate with her in earnest.

What Europe Should Do About Britain
Bloomberg View Jun 12, 2017
Its leaders should turn their attention from punishment to damage control.

China's Insurers Don't Know Their Own Risks
Christopher Balding (Bloomberg View) Jun 12, 2017
Business is booming. Watch out.

Chinese Efforts to Stem Housing Bubble Shows Promise
Junheng Li (Bloomberg View) Jun 12, 2017
New regulatory and monetary tightening policies are starting to rein in developers and speculators.

Anti-Establishment Politics Is Far From Going Away
Mohamed Aly El-Erian (Bloomberg View) Jun 12, 2017
Despite the latest electoral results around the world, voters remain angry and disillusioned.

Poor Countries Can't Live on Rice Alone
Jessica Fanzo and Rebecca McLaren (Bloomberg View) Jun 12, 2017
Timor-Leste needs a more diverse diet.

There Is Hope for Volatility-Starved Bond Traders
Scott Dorf (Bloomberg View) Jun 12, 2017
Traders face a heavy slate of potential market moving events.

The EU Won't Help a Weakened Theresa May
Leonid Bershidsky (Bloomberg View) Jun 12, 2017
She will need to save herself by compromising on the shape of Brexit.

Gold Is Bound to Disappoint the Bulls -- Again
Shelley Goldberg (Bloomberg View) Jun 12, 2017
Throw out all the fancy analysis and realize that gold is an emotional trade.

Xi Jinping’s Marco Polo Strategy
Joseph S. Nye (Project Syndicate) Jun 12, 2017
Last month, Chinese President Xi Jinping presided over a highly orchestrated forum for his Belt and Road Initiative, which will involve 65 countries containing some 4.5 billion people. Xi’s plan to integrate Eurasia through a trillion dollars of infrastructure investment is impressive, but will it succeed as a grand strategy?

Trumping the Dollar
Jim O'Neill (Project Syndicate) Jun 12, 2017
It is still too early to know for sure why the value of the dollar has declined in recent months. But if the Trump administration does indeed pursue a deliberate policy of isolationism, foreign-exchange markets' increasing risk premia on the dollar will have been justified.

Africa’s Stake in Brexit
Carlos Lopes (Project Syndicate) Jun 12, 2017
Africa is less reliant on aid than ever before, but ties to donor countries, and the UK in particular, remain important for sectors like telecommunications and banking. Preparing now for Britain’s inevitable divorce from the EU is not only prudent for many African countries; it may be a matter of economic necessity.

The Global Age of Complexity
Andrew Sheng (Project Syndicate) Jun 12, 2017
Humanity's growing frustration with embedded systemic problems – from pollution to economic inequality – would demand change in the best of times. At a time when our power of creation – matched by our power of destruction – has reached unprecedented levels, a new, non-deterministic worldview could not be more urgent.

China’s Big Bet
Joseph S. Nye (Project Syndicate) Jun 12, 2017
The One Belt, One Road project will provide China with geopolitical benefits as well as costs. But whether it will be a global game changer remains to be seen, says Harvard University political scientist Joseph Nye.

Tightening by stealth
Daniel GroS (VoxEU) Jun 12, 2017
Exiting from unconventional monetary policies is now a key issue for central banks, and especially for the US Federal Reserve. This column argues that the Fed already began this exit some time ago, and that the relevant part of its balance sheet has already shrunk by about one quarter of GDP. Pursuing the current policy of reinvesting would lead to a full exit within ten years. Exiting from unconventional monetary policies is now a key issue for central banks, and especially for the US Federal Reserve. This column argues that the Fed already began this exit some time ago, and that the relevant part of its balance sheet has already shrunk by about one quarter of GDP. Pursuing the current policy of reinvesting would lead to a full exit within ten years.

Emerging market corporate balance sheets: Then and now
Laura Alfaro, Gonzalo Asis, Anusha Chari and Ugo Panizza (VoxEU) Jun 12, 2017
Leverage levels in emerging market firms rose dramatically in the aftermath of Global Crisis. This column examines whether concerns of a repeat of the Asian financial crisis, which was largely attributed to corporate financial roots, are justified. While firm financial fragility is more widespread, it is less severe than in the period preceding the Asian crisis. However, certain large firms with high levels of foreign currency leverage are a potential key source of vulnerability in the transmission of adverse shocks such as exchange rate depreciations. Leverage levels in emerging market firms rose dramatically in the aftermath of Global Crisis. This column examines whether concerns of a repeat of the Asian financial crisis, which was largely attributed to corporate financial roots, are justified. While firm financial fragility is more widespread, it is less severe than in the period preceding the Asian crisis. However, certain large firms with high levels of foreign currency leverage are a potential key source of vulnerability in the transmission of adverse shocks such as exchange rate depreciations.

Trade Balances and the NAFTA Renegotiation
C. Fred Bergsten (PIIE) Jun 12, 2017
The Trump administration’s strategy toward trade agreements in general, and the North American Free Trade Agreement (NAFTA) in particular, is fundamentally misplaced for two reasons: (1) its apparent desire to use trade policy rather than macroeconomic policy including exchange rate policy to reduce trade imbalances and (2) its focus on the bilateral rather than global scope of those imbalances. Bergsten outlines the dangerous and self-defeating implications for the negotiation of such an unusual approach. Accordingly, provisions that could be included in the agreement to pursue that purpose are not likely to be feasible.

Streamlining Rules of Origin in NAFTA
Caroline Freund (PIIE) Jun 12, 2017
After promising last year to terminate US participation in the North American Free Trade Agreement (NAFTA), President Donald Trump has opted for renegotiation in several areas, including in the “rules of origin” chapter. Caroline Freund examines those rules of origin to determine whether they need to be tightened to prevent foreign goods from using NAFTA trade preferences or loosened to improve efficiency. Freund finds NAFTA rules of origin are strict and highly complex, as compared with rules in other free trade agreements. Tightening them could perversely lead to lower regional content in final goods and disrupt regional supply chains, as more importers eschew NAFTA preferences because of costly rules of origin and instead trade under standard most favored nation tariffs. Given the complexity of the NAFTA rules of origin, Freund argues in favor of streamlining rules, with regional content requirements for all goods set at one rate, as opposed to the current product-by-product rules in NAFTA.

The Impact of Brexit on UK Foreign Trade
David Bartlett (EFR) Jun 12, 2017
From labour markets to tariffs to FTAs… Beyond ideologies, David Bartlett tackles concrete economic factors that United Kingdom must face after Brexit. The article discusses the implications of “soft” and “hard” Brexit, UK’s trade relations with the EU, US, and the rest of the world.

Are Financial Markets Poised for a “Major Event”?
Satyajit Das (EFR) Jun 12, 2017
The different factors affecting financial markets. From mispriced assets, to rising debt levels, to the possibility of a new economic crisis, are financial markets, along with players in world politics, really ready for a major event?

Is Slow Productivity Growth Here to Stay?
Marc Levinson (FA) Jun 12, 2017
Why governments can't solve the problem.

Bank rules need a trim rather than a buzz cut
FT View Jun 13, 2017
US Treasury secretary Steven Mnuchin’s report badly overstates its case.

New angles catch the light on the state of global labour markets
Sarah O'Connor (FT) Jun 14, 2017
There need not be a trade-off between the quality and quantity of jobs.

Sleepwalking towards a chaotic Brexit
Martin Wolf (FT) Jun 13, 2017
The likelihood that there will be no deal is now even higher than before the election.

Chinese investment in Africa: Beijing’s testing ground
David Pilling (FT) Jun 13, 2017
The country’s politicians, lenders and businesses eye opportunities for growth and greater geopolitical influence.

Dodd-Frank is complex and overburdens the financial sector
James Gorman (FT) Jun 13, 2017
Banks find stress tests cumbersome so digest what is in place and focus on growth.

Has Western-style democracy become too expensive for capitalism?
Michael Power (FT) Jun 13, 2017
The global centre of gravity is moving from West to East, to the West’s disadvantage.

Commodity currencies defy oil weakness
Roger Blitz (FT) Jun 13, 2017
Russian, Canadian and Swedish currencies among those making gains as Opec’s output rises.

India and China should be at forefront of ‘eco-civilisation’ push
Chandran Nair (FT) Jun 13, 2017
Developing nations can develop their own un-American growth themes to save the planet. Commodity currencies defy oil weakness Russian, Canadian and Swedish currencies among those making gains as Opec’s output rises

Rising rates will not increase European bank profits
Brian Caplen (Banker) Jun 13, 2017
The salvation for depressed European bank earnings is supposed to be rising interest rates. But against a backdrop of worsening credit and tougher regulation this may not play out as well as expected.

NAFTA 2.0 — Globalists Reboot, Rev Up Lobbying Efforts
William F. Jasper (New American) Jun 13, 2017
The CFR, PIIE, Brookings, AS/COA, and related organizations are setting the stage for another replay of past performances. They have the full lineup of usual “experts” and corporate shills to proclaim the urgent need for, and supposedly wondrous benefits of, a renewed/reformed/rebooted NAFTA.

The Fed's New Normal
Bloomberg View Jun 13, 2017
The central bank needs to tell investors what it’s thinking about its balance sheet.

Finland Provides a Reminder That Populists Can't Govern
Leonid Bershidsky (Bloomberg View) Jun 13, 2017
Finnish nationalists crashed out of government after just two years -- like other European populist parties before them.

China's Skyscraper Age Is Over
Adam Minter (Bloomberg View) Jun 13, 2017
As workplace habits change, supertall buildings are sitting empty.

Macron's Mandate for Change
Bloomberg View Jun 13, 2017
The new French president has all the levers of power, and a remarkable opportunity.

Central Banks Face New Dilemmas as Markets Rally
Ben Emons (Bloomberg View) Jun 13, 2017
Decisions by policy makers may supercharge financial conditions and lead to a market correction.

How Macron Keeps Winning
Philippe Aghion and Benedicte Berner (Project Syndicate) Jun 13, 2017
President Emmanuel Macron’s one-man revolution in France continued this weekend, as he appears to have added a huge parliamentary majority to his cause. The result of the first round of elections to the National Assembly is the clearest indication yet of Macron's success in recasting French politics.

How to Prevent the UK’s Self-Destruction
Jim O'Neill (Project Syndicate) Jun 13, 2017
If you were a Briton who had been stuck in Antarctica for the past year and a half, you might be forgiven for wishing you had stayed put. But while the UK seems to have lost its grip on sanity, the madness can be reversed.

Can US States Right Trump’s Wrongs?
Barry Eichengreen (Project Syndicate) Jun 13, 2017
This is a good time to remember that the US is a federal system, not a unitary state with an all-powerful central government. So, can Americans who oppose the contraction of social programs and revocation of progressive federal legislation use US states’ authority to counter these trends?

The Arab World’s Coming Challenges
Tarek Osman (Project Syndicate) Jun 13, 2017
When it comes to the Middle East, it is no surprise that political leaders, diplomats, and the donor and humanitarian community typically focus on the here and now. Yet we must not lose sight of the future – especially when regional trends are conspiring to bring further turmoil and conflict.

Britain Has One More Shot at Stopping the Brexit Car Crash
Philippe Legrain (FP) Jun 13, 2017
A kinder, softer Brexit now seems preferable to both Britain and the EU, but London looks far less likely to get the deal it wants.

Containers and globalisation
Kerem Cosar and Banu Demir Pakel (VoxEU) Jun 13, 2017
Container shipping is considered to be one of the drivers of globalisation. This column uses micro-level data to show evidence that confirms the role of 'the box' in the global economy: it implies significant cost savings and explains a significant amount of the global trade increase since its inception. The results also suggest that most of its trade-increasing effect has already been realised. Container shipping is considered to be one of the drivers of globalisation. This column uses micro-level data to show evidence that confirms the role of 'the box' in the global economy: it implies significant cost savings and explains a significant amount of the global trade increase since its inception. The results also suggest that most of its trade-increasing effect has already been realised.

The World Bank in the Era of Trump
Ravi Kanbur (VoxEU) Jun 13, 2017
With the World Bank now far from the only game in town in providing development finance, this column argues that it should focus on issues which are truly global in scope, but questions the suitability of the World Bank’s signature instrument, the sovereign loan. The international community does rely on the Word Bank for one global public good – global consensus building – but the current situation of veto power in the hands of a US government which does not acknowledge global public good issues, as evidenced by its withdrawal from the Paris accord, is potentially lethal for perceived and actual independence in consensus building. With the World Bank now far from the only game in town in providing development finance, this column argues that it should focus on issues which are truly global in scope, but questions the suitability of the World Bank’s signature instrument, the sovereign loan. The international community does rely on the Word Bank for one global public good – global consensus building – but the current situation of veto power in the hands of a US government which does not acknowledge global public good issues, as evidenced by its withdrawal from the Paris accord, is potentially lethal for perceived and actual independence in consensus building.

South Sudan is the African exception, not the rule
David Pilling (FT) Jun 14, 2017
Across the continent, states are beginning to feel more comfortable in their borders.

Ethiopia’s mythical manufacturing boom
Steve Johnson (FT) Jun 14, 2017
The sector shrinks in importance despite heavy Chinese investment.

Europe holds the cards on clearing yet both sides can profit
Simon Gleeson (FT) Jun 14, 2017
There is encouragement for those who fear that Brexit will diminish the City’s status.

Macron marches France towards uncharted optimism
Roula Khalaf (FT) Jun 14, 2017
The president’s party is poised to become the most powerful player in French politics.

EM currency risk profile in a new era
Guillermo Tolosa (FT) Jun 14, 2017
Foreign capital flows may be embarking on a fourth great wave.

The ‘Exporting Jobs’ Canard
Matthew J. Slaughter (WSJ) Jun 14, 2017
Repeated research shows that multinational hiring abroad doesn’t come at the expense of U.S. workers.

Mobile Phones and Monetary Policy
Joseph E. Gagnon (PIIE) Jun 14, 2017
By the standards of recent Federal Open Market Committee (FOMC) meetings, today's meeting and press conference were packed with interesting news. The main policy action was a widely expected increase in the federal funds rate by 0.25 percent to a range of 1.00 to 1.25 percent.

Trump's Reciprocal Tariffs Don't Add Up
Chad P Bown and Alan O Sykes (Bloomberg View) Jun 14, 2017
The domino effect of raising barriers on German auto imports would clobber U.S. consumers.

Prepare Now for the End of the Bull Market
Ben Carlson (Bloomberg View) Jun 14, 2017
Adjust your expectations for market turmoil before it occurs, not during or after the fact.

The Old Are Eating the Young
Satyajit Das (Bloomberg View) Jun 14, 2017
Around the world, a generational divide is worsening.

China Rethinks Its Global Role in the Age of Trump
David Shambaugh (Bloomberg View) Jun 14, 2017
Beijing is getting more involved as the U.S. turns inward. That's not quite the same as world leadership.

America Can Spin the Oil World on Its Axis
Mark Grant (Bloomberg View) Jun 14, 2017
The government can provide incentives, as oil and natural gas production is not just a matter of economics, but of national security as well.

Urbanization 2.0
Carl Bildt (Project Syndicate) Jun 14, 2017
As technology races ahead of us, it is difficult to anticipate what the future holds. One thing we do know is that the future will be shaped by two key trends: digitization and urbanization – and that the possibilities introduced by the former will likely help us overcome the problems associated with the latter.

A Magic Wand for France?
Anders Åslund (Project Syndicate) Jun 14, 2017
With a broad mandate, sky-high approval ratings, and what will likely be a huge parliamentary majority, French President Emmanuel Macron has a golden opportunity to recast his country’s economic prospects. But the needed fiscal and structural reforms will require much more than electoral good fortune.

How Long Can the Eurozone Survive Without Greater Integration?
Kenneth Rogoff (Project Syndicate) Jun 14, 2017
Does a reform-minded president in France and the likely re-election of German Chancellor Angela Merkel mean new hope for Europe’s stalled single-currency project?

The Eurozone Must Reform or Die
Kenneth Rogoff (Project Syndicate) Jun 14, 2017
With the election of a reform-minded centrist president in France and the re-election of German Chancellor Angela Merkel seeming ever more likely, is there hope for the stalled single-currency project in Europe? Perhaps, but another decade of slow growth, punctuated by periodic debt-related convulsions, still looks more likely.

Emmanuel Macron and the Post-Revolutionary Idea
Bernard-Henri Lévy (Project Syndicate) Jun 14, 2017
How did a political novice, seemingly fated to preside over a thousand and one shaky coalitions, usher some 400 deputies into the 577-seat National Assembly under the banner of what was still, just a few months ago, virtually a party of one? The answer is to be found far from France – and four decades removed from the present.

The Macron Landslide
Philippe Aghion (Project Syndicate) Jun 14, 2017
French President Emmanuel Macron’s new political party, La République en Marche, is set to win a huge majority in the National Assembly. Philippe Aghion of the College de France explains why.

Offshore profits and domestic productivity
Fatih Guvenen, Raymond Mataloni, Dylan Rassier and Kim Ruhl (VoxEU) Jun 14, 2017
US multinational enterprises may legally shift profits from high tax countries (like the US) to low tax countries (like Bermuda). This column uses unpublished survey data to show how this causes part of the US economic activity generated by these multinational enterprises to be attributed to their overseas affiliates, leading to an understatement of measured US GDP and, in turn, productivity. Profit-shifting activity has increased significantly since the mid-1990s, resulting in an understatement of the growth rate of US productivity. US multinational enterprises may legally shift profits from high tax countries (like the US) to low tax countries (like Bermuda). This column uses unpublished survey data to show how this causes part of the US economic activity generated by these multinational enterprises to be attributed to their overseas affiliates, leading to an understatement of measured US GDP and, in turn, productivity. Profit-shifting activity has increased significantly since the mid-1990s, resulting in an understatement of the growth rate of US productivity.

Economic impact of US immigration policies in the Age of Trump
Anna Maria Mayda and Giovanni Peri (VoxEU) Jun 14, 2017
President Trump has signed several Executive Orders that point in the direction of a much more restrictive immigration policy. This column, taken from a recent VoxEU eBook, assesses the likely economic impact of such a change in policy. It argues that what is really needed is improved efficiency, flexibility, and allowing more freedom to individuals and markets, including the labour market – not the imposition of more restrictions and constraints. President Trump has signed several Executive Orders that point in the direction of a much more restrictive immigration policy. This column, taken from a recent VoxEU eBook, assesses the likely economic impact of such a change in policy. It argues that what is really needed is improved efficiency, flexibility, and allowing more freedom to individuals and markets, including the labour market – not the imposition of more restrictions and constraints.

Once Again, China Has Been Cooking the Books
Massoud Hayoun (PS) Jun 14, 2017
To skeptics of China's economic success, news of local governments' misreported figures come as no shock.

Cheese Is Probably Going to Derail the Start of the EU-Canada Trade Deal
Emily Tamkin (FP) Jun 14, 2017
With accusations of hoarding and other tricks, the EU-Canada trade deal could be delayed.

A path that will avoid Brexit calamity
Philip Stephens (FT) Jun 15, 2017
Theresa May’s government needs to put national interest before party loyalty.

African PE must rise to job creation challenge
Aubrey Hruby (FT) Jun 15, 2017
Without investment in manufacturing, continent faces a Malthusian crisis.

Remember the Population Bomb? It’s Still Ticking
Eugene Linden (NYT) Jun 15, 2017
Across Africa and much of the Third World, economic development has not kept pace with soaring populations.

Time Is Running Out for Nafta
Carlos Pascual (WSJ) Jun 15, 2017
The U.S. and Mexican political calendars leave Trump with about five months to get a deal done.

Lessons of the Energy Export Boom
WSJ Jun 15, 2017
Steve Bannon owes Paul Ryan an apology on the oil-export ban.

Currency Manipulation Was the Leading Cause of Record Trade Imbalances in 2000s
Joseph E. Gagnon and Melina Kolb (PIIE) Jun 15, 2017
New research shows that currency manipulation by China and other countries was the main cause of historically high trade imbalances in the 2000s, widening the US trade deficit by $200 billion or more starting in 2003.

Merkel, Macri Discuss EU-Mercosur Trade Deal Progress, G20 Preparations
Bridges, Volume 21, Number 21 Jun 15, 2017
German Chancellor Angela Merkel met with Argentine President Mauricio Macri late last week, discussing a host of issues including the ongoing efforts to clinch an EU-Mercosur trade deal.

Globalisation, Inclusive Societies in Focus at OECD Ministerial Meeting
Bridges, Volume 21, Number 21 Jun 15, 2017
The debate over how to address globalisation and its ramifications took centre stage last week at the Organisation for Economic Co-operation and Development’s (OECD) annual forum and ministerial meeting.

Are Germany and France Trying to Get the UK to Rescind Brexit?
Jacob Funk Kirkegaard (PIIE) Jun 15, 2017
Bolstered by his likely parliamentary election victory on Sunday, President Emmanuel Macron of France appears poised to join with the increasingly formidable Chancellor Angela Merkel of Germany to launch a new drive for European integration in the coming years.

Why Won't India Cut Rates?
Mihir Sharma (Bloomberg View) Jun 15, 2017
As bureaucrats squabble, an investment crisis worsens.

Can China Really Rein in Credit?
Michael Pettis (Bloomberg View) Jun 15, 2017
Slower economic growth would be healthier. But that's really a political question.

Macron Won't Be Shy About Using French Power
Pascal-Emmanuel Gobry (Bloomberg View) Jun 15, 2017
France's new president has signaled he will act with or without partners.

Can the Bond Market's Message Get Any Clearer?
Scott Dorf (Bloomberg View) Jun 15, 2017
Bond traders are trying to force the central bank to back off its hawkish stance.

The Robot Takeover Is Greatly Exaggerated
Noah Smith (Bloomberg View) Jun 15, 2017
Worry about income inequality and slow growth before you rage against the machines.

How to Avoid a Bloodbath in Venezuela
Daniel Wilkinson and José Miguel Vivanco (FP) Jun 15, 2017
Venezuelan President Nicolás Maduro won’t go down without a fight. But tightening the screws on his would-be accomplices could help save the country from total collapse.

How Populists Win When They Lose
Jan-Werner Mueller (Project Syndicate) Jun 15, 2017
The present is not remotely comparable to the interwar period, and today’s populists are not fascists. But the lesson from that era still holds: the choices made by established conservative elites, as much as the challenges posed by insurgent outsiders, determine the fate of democracy.

Britain’s Norway Solution
Anatole Kaletsky (Project Syndicate) Jun 15, 2017
In the wake of the UK's snap election, how long Theresa May will survive as prime minister is impossible to predict. But in trying to anticipate the outcome of the Brexit negotiations, the questions that matter no longer have much to do with May’s political survival.

Rainfall and human settlement in tropical Africa and Asia
Kostadis Papaioannou and Ewout Frankema (VoxEU) Jun 15, 2017
Tropical Asia has historically hosted larger and denser agricultural civilisations than tropical Africa. Using colonial-era rainfall and population data, this column explores the role of climatological conditions in the development of dense rural populations in the two regions. Rainfall shocks were both more frequent and severe in Africa than in Asia, lending support to the argument that ecological barriers to agricultural intensification were more challenging in tropical Africa than elsewhere. Tropical Asia has historically hosted larger and denser agricultural civilisations than tropical Africa. Using colonial-era rainfall and population data, this column explores the role of climatological conditions in the development of dense rural populations in the two regions. Rainfall shocks were both more frequent and severe in Africa than in Asia, lending support to the argument that ecological barriers to agricultural intensification were more challenging in tropical Africa than elsewhere.

Services as a growth escalator in low-income countries
Ejaz Ghani and Stephen O'Connell (VoxEU) Jun 15, 2017
There are concerns that the premature deindustrialisation experienced by low-income countries in Africa and South Asia will negatively affect their growth. This column argues that this is not the case, since services, rather than manufacturing, are driving growth in the developing world. While demographics and urbanisation can help growth in low-income countries, the low quality of physical infrastructure is a major challenge. There are concerns that the premature deindustrialisation experienced by low-income countries in Africa and South Asia will negatively affect their growth. This column argues that this is not the case, since services, rather than manufacturing, are driving growth in the developing world. While demographics and urbanisation can help growth in low-income countries, the low quality of physical infrastructure is a major challenge.

Why Do People Oppose Globalization?
Farok J. Contractor (YaleGlobal) Jun 15, 2017
Populists thrive on blaming immigration, trade for economic woes rather than automation and quests by many for modern connections.

Give Donald Trump Credit: Europe’s United
Stephan Richter (Globalist) Jun 16, 2017
No U.S. President in recent memory has done more to strengthen Europe’s willingness to work together than Donald Trump.

How Asia Can Take the Lead on Climate
Bloomberg View Jun 16, 2017
As the U.S. stands aside, India and China should up their game.

Has Asia Learned From the 1997 Crisis?
Michael Schuman (Bloomberg View) Jun 16, 2017
Two decades on, a sense of urgency is needed once again.

Africa’s Race Against the Machines
Brahima Coulibaly (Project Syndicate) Jun 16, 2017
As the costs of automation fall relative to manufacturing wages, and as global industrial production becomes less labor-intensive, Africa will lose some of the advantages that it is currently counting on. In the future, it may not be able attract manufacturers seeking to capitalize on abundant, low-cost labor.

Trends in artificial intelligence technology invention
Hidemichi Fujii and Shunsuke Managi (VoxEU) Jun 16, 2017
Patent applications are a good indicator of the nature of technological progress. This column compares trends in applications for artificial intelligence patents in Japan and the US. One finding is that the Japanese market appears to be less attractive for artificial intelligence technology application, perhaps due to its stricter regulations on the collection and use of data. Patent applications are a good indicator of the nature of technological progress. This column compares trends in applications for artificial intelligence patents in Japan and the US. One finding is that the Japanese market appears to be less attractive for artificial intelligence technology application, perhaps due to its stricter regulations on the collection and use of data.

Japan's entry into world markets during the first age of globalisation
Christopher Meissner and John Tang (VoxEU) Jun 16, 2017
Economists have long been interested in the dynamics of comparative advantage, but have only recently begun to use detailed product-level data in their analysis. This column examines the Japanese experience after the liberalisation of the 1850s. It suggests that trade costs, destination market demand conditions, and product specific factors played key roles in Japanese exports growth. Roughly 30% of growth in exports between 1880 and 1910 came from shipping new goods to new countries, selling new goods to extant trade partners, and introducing existing products to new countries. Economists have long been interested in the dynamics of comparative advantage, but have only recently begun to use detailed product-level data in their analysis. This column examines the Japanese experience after the liberalisation of the 1850s. It suggests that trade costs, destination market demand conditions, and product specific factors played key roles in Japanese exports growth. Roughly 30% of growth in exports between 1880 and 1910 came from shipping new goods to new countries, selling new goods to extant trade partners, and introducing existing products to new countries.

UK: Abdicating a Proud Legacy
Holger Schmieding (Globalist) Jun 17, 2017
Britain’s political situation and its long-term economic outlook have become more precarious than they have been at any time since the late 1970s.

Investors hunt for hidden frontier market gems
Jennifer Thompson (FT) Jun 18, 2017
Risk improves as financial infrastructure matures and a middle class emerges.

Back to the Global Vertical
Andrés Ortega (Globalist) Jun 18, 2017
With the decline of the middle classes, social classes are back on the global agenda. That is politically dangerous.

ASEAN’s strategic diplomacy underpins regional stability
Kishore Mahbubani (EAF) Jun 18, 2017
The basis for considering ASEAN such a success story.

German-Style Apprenticeships Simply Can’t Be Replicated
Eric A. Hanushek (WSJ) Jun 18, 2017
Half of young Germans enter vocational training, and the rigid labor market relies on certification.

America sings the postindustrial blues
Robert J. Samuelson (WP) Jun 18, 2017
White working-class men have suffered a significant drop in status.

Fed Raises Rates — Will Other Central Banks Follow?
Ryan McMaken (Mises Daily) Jun 18, 2017
The Federal Reserve says it can now turn to tighter monetary policy if the economy continues to expand "as anticipated." But that's a pretty big if.

Macron’s meteoric rise lifts confidence in the EU
FT View Jun 19, 2017
Europe has an opportunity to tackle its longstanding problems.

A distracting discussion of higher inflation targets
FT View Jun 19, 2017
The Federal Reserve would do better to achieve its goal than to amend it.

Midwifery: the hidden hero of development
Toyin Saraki (FT) Jun 19, 2017
Private sector can help address misperceptions and a funding gap.

Investors welcome push to prise open Kazakhstan
Henry Foy (FT) Jun 19, 2017
A sluggish economy adds impetus to President Nazarbayev’s aim to begin privatisation and reforms.

Some Global Investors See Fresh Worries in an Old Problem: China
Michael Schuman (NYT) Jun 19, 2017
Two years after a Chinese stock market crash, a weakened currency and rising debt sent jitters around the world, some investors are getting nervous again.

Higher Education Is Increasingly Valuable in the United States, Less So in France
Julien Acalin (PIIE) Jun 19, 2017
How much of an economic advantage is there to having a higher education in the United States versus France? A study of the latest data demonstrates that people with more education are better off in both countries, but in the last 20 years, higher education has become even more valuable in the United States, and less so in France.

A Plan for Brexit
Bloomberg View Jun 19, 2017
How to avoid a chaotic exit before the time for talks runs out.

Trump Effect Crests in Mexican Markets
Matthew A Winkler (Bloomberg View) Jun 19, 2017
The rise of a hostile U.S. president sent stocks, bonds and the peso reeling. That was then.

Japan Gains Ground on Wasteful Workaholics
Noah Smith (Bloomberg View) Jun 19, 2017
Companies are cutting endless hours at the office, but wages are headed in the wrong direction.

Businesses Scale Back Investment in America
Noah Smith (Bloomberg View) Jun 19, 2017
Pessimism about growth holds down spending more on factories and equipment. But the reverse also is true.

U.K. Walks Into Brexit Talks Naked
Leonid Bershidsky (Bloomberg View) Jun 19, 2017
Its negotiators are unprepared, but the EU side isn't.

Asking the Wrong Questions on Energy
Satyajit Das (Bloomberg View) Jun 19, 2017
Renewables can't meet the world's growing demands.

Pakistan’s Persistent Energy Crisis
Nadeem ul Haque (Project Syndicate) Jun 19, 2017
Pakistan's decade-long energy crisis is rooted in poor governance. Yet the authorities and aid donors alike stubbornly fail to recognize the obvious, and instead continue to pursue costly and ultimately ineffective interventions.

Brexit In Reverse?
George Soros (George Soros) Jun 19, 2017
Economic reality is beginning to catch up with the false hopes of many Britons that the UK's withdrawal from the EU will not reduce their standard of living. The Brexit referendum cannot be undone, but people can change their minds about what their vote meant.

The Right to Education for Refugees
Gordon Brown (Project Syndicate) Jun 19, 2017
The share of total aid allocated for education in humanitarian crises has risen by nearly a full percentage point since last year. But in a world confronting the largest refugee crisis since World War II, ensuring education for children fleeing from conflict, though necessary to ensure long-term peace, is still woefully insufficient.

Britain’s Deepening Confusion
Robert Skidelsky (Project Syndicate) Jun 19, 2017
This month's general election superimposed on the political divide over Brexit a more traditional left-right split, with a resurgent Labour Party capitalizing on voter discontent with Conservative budget cuts. The only certainty is that the next government will abandon austerity and insist on controlling immigration.

The border adjustment tax
Mary Amiti, Emmanuel Farhi, Gita Gopinath and Oleg Itskhoki (VoxEU) Jun 19, 2017
One component of the Republicans’ cash-flow tax proposal for corporate reform in the US is the inclusion of a border adjustment tax. This column, taken from a recent VoxEU.org eBook, assesess this politically controversial and often misconstrued tax adjustment that makes export sales deductible from the corporate tax base, while expenditure on imported goods would not be deductible. One component of the Republicans’ cash-flow tax proposal for corporate reform in the US is the inclusion of a border adjustment tax. This column, taken from a recent VoxEU.org eBook, assesess this politically controversial and often misconstrued tax adjustment that makes export sales deductible from the corporate tax base, while expenditure on imported goods would not be deductible.

A Guide to Renegotiating NAFTA
Melina Kolb and Cathleen Cimino-Isaacs (PIIE) Jun 19, 2017
The North American Free Trade Agreement (NAFTA) has shaped the economies of the United States, Canada, and Mexico since 1994. President Trump’s plan to renegotiate NAFTA could profoundly affect US firms and workers.

New Evidence for a Lower New Normal in Interest Rates
Jens H.E. Christensen and Glenn D. Rudebusch (FRBSF Econ Letter) Jun 19, 2017
Interest rates during the current economic recovery have been unusually low. Some have argued that yields have been pushed down by declines in longer-run expectations of the normal inflation-adjusted short-term interest rate—that is, by a drop in the so-called equilibrium or natural rate of interest. New evidence from financial markets shows that a decline in this rate has indeed contributed about 2 percentage points to the general downward trend in yields over the past two decades.

Britain Starts Brexit Talks With a Whimper, Not a Bang
David Francis (FP) Jun 19, 2017
The first day of Brexit negotiations did not go well for the U.K.

Investors issue a vote of confidence in Macri
FT View Jun 20, 2017
Argentina’s 100-year bond is a bold statement of intent for reform.

Why Mexico is ripe for a start-up boom
Marcus Dantus (FT) Jun 20, 2017
The country’s creative class is expanding rapidly and the new generation is full of individuals not afraid to take risks.

Janet Yellen, and the Fed’s inflation target, should both stay
Martin Wolf (FT) Jun 20, 2017
The bipartisan tradition and the 2 per cent target have served the US well.

The Eurogroup on Greece: Debt Relief with a Fiscal Straitjacket
Jeromin Zettelmeyer (PIIE) Jun 20, 2017
Greece’s latest deal with the Eurogroup—the group of eurozone finance ministers—is bigger news than you might think from the press reactions so far. As expected, Greece got its next disbursement of funds to avoid default, the International Monetary Fund (IMF) gave a symbolic stamp of approval.

Is China the Most Protectionist Country? No, Not By a Long Shot
Zixuan Huang and Nicholas R. Lardy (PIIE) Jun 20, 2017
Commerce Secretary Wilbur Ross labeled China as “ the most highly protectionist of the big countries ” in his recent interview with the Wall Street Journal . China is a difficult investment environment for foreign firms in some industries, but its trade protection is modest.

Forget About Brexit, Focus on the Euro Area Future
Jacob Funk Kirkegaard and Adam S. Posen (PIIE) Jun 20, 2017
The Anglophone financial press is still giving prime coverage to the negotiations over Britain’s exit from the European Union. But Brexit has become a sideshow. The real economic news in Europe is being made in France and Germany, and it is of the good, potentially very good, type.

Emerging Markets: Commodity Oddities
Gene Frieda (PIMCO) Jun 20, 2017
Why falling commodity prices may not upend the EM rally.

When small business goes global
Brian Caplen (Banker) Jun 20, 2017
With Amazon lending $1bn over the past 12 months to sellers on its platform, banks need to overhaul their SME and trade finance operations or face losing the business.

Eastern Europe and the Rule of Law
Bloomberg View Jun 20, 2017
The EU’s post-communist members are testing its commitment to democratic norms. Here’s how to respond.

Markets Are Big Winners in European Elections
Komal S Sri-Kumar (Bloomberg View) Jun 20, 2017
Rebuff of populists could allow better coordination of policies to attract investments.

Why Macron's Rising and May's Falling
Pascal-Emmanuel Gobry (Bloomberg View) Jun 20, 2017
Both Theresa May and Emmanuel Macron were defined by their approach to taking risks.

Fed's Guidance Has Made Markets More Volatile
Gary Shilling (Bloomberg View) Jun 20, 2017
The central bank says it will raise rates again and reduce its assets. There's reason to be skeptical.

Financial Reform Both Parties Can Agree On
Mark Rambler (Bloomberg View) Jun 20, 2017
Small business would be better off if small banks got some relief.

Understanding the Productivity Puzzle
Howard Davies (Project Syndicate) Jun 20, 2017
In all major economies, the so-called productivity puzzle continues to perplex economists and policymakers: output per hour is significantly lower than it would have been had the pre-2008 growth trend continued. And while economists have offered many ingenious explanations, none has proved persuasive enough to create a consensus.

Public attitudes to immigration: Salience matters
Timothy Hatton (VoxEU) Jun 20, 2017
While immigration preferences have been studied extensively, less attention has been paid to the public’s assessment of the importance of immigration as a policy issue. Using survey data from 17 European countries, this column shows that the drivers of immigration preference and salience are very different. Both immigration preference and salience should be taken into account when assessing the effect of immigration attitudes on policy. While immigration preferences have been studied extensively, less attention has been paid to the public’s assessment of the importance of immigration as a policy issue. Using survey data from 17 European countries, this column shows that the drivers of immigration preference and salience are very different. Both immigration preference and salience should be taken into account when assessing the effect of immigration attitudes on policy.

A New Perspective on China’s Credit Boom
Kinda Hachem and Michael Zheng Song (VoxChina) Jun 20, 2017
China announced a large fiscal stimulus package in late 2008 to combat spillover effects from the global financial crisis. Since then, credit in China has boomed, with the debt-to-GDP ratio nearly doubling between 2007 and 2014 and the ratio of private credit to private savings jumping from 65% to 75%. Given the timing, it may seem natural to assume that China’s credit boom was driven by stimulus. But is it really that simple? The answer, it turns out, is no.

Forecasting China’s Economic Growth
Patrick Higgins, Tao Zha and Karen Zhong (VoxChina) Jun 20, 2017
The question of how fast the Chinese economy will grow continues to intrigue policymakers and researchers alike.

Emmanuel Macron Is Facing the ‘Mother of All Battles’
George Ross (FP) Jun 20, 2017
France’s new president is about to face off against some of the West's fiercest organized labor. At stake is the future of Europe.

Understanding the Macron Phenomenon
Jolyon Howorth (YaleGlobal) Jun 20, 2017
Macron’s new party, with solid legislative win in France, could be revolutionary for integrating Europe

China's Global Financial Integration
K@W Jun 20, 2017
How far and how fast should it go?

China’s stock market is given a test, not a pass
FT View Jun 21, 2017
MSCI is right to be very cautious about putting A-shares in its indices.

Inevitable Chinese slowdown ‘a myth’
Steve Johnson (FT) Jun 21, 2017
Asian countries have continued to grow rapidly at China’s current level of development.

Saudi Prince’s Elevation Will Have Far-Reaching Consequences in Energy
Stanley Reed (NYT) Jun 21, 2017
Prince Mohammed bin Salman’s becoming heir to the throne makes him an even more influential voice in global oil circles.

Why Do People Think Nigeria Might Be Losing $1 Trillion to Corporate Tax Evasion?
Maya Forstater (CGD) Jun 21, 2017
Misunderstandings about the scale of multinational tax avoidance are common. The origin story for an erroneous $1 trillion figure is a case of bad lip reading, but its proliferation reflects the belief that there are absolutely huge sums of money for development at stake from cracking down on multinational tax avoidance. The figure itself may be ridiculous but these myths are serious—they undermine both trust in revenue authorities and businesses, overheat disputes, and make it harder to judge practical progress on improving tax systems and compliance.

Brexit, the UK and FDI: one year on
Jacopo Dettoni (fDi) Jun 15, 2017
FDI into the UK has dropped in the year since the Brexit referendum. Jacopo Dettoni assesses how foreign and outward-looking domestic businesses are coping with the uncertainty that the vote has created.

Is China’s Yield Curve Signaling A Further Economic Slowdown?
Isaac Meng (PIMCO) Jun 21, 2017
Why China’s yield curve became inverted and what it means for the economy.

The Prize and the Price of Opportunistic Tightening
Joachim Fels (PIMCO) Jun 21, 2017
The Fed’s “opportunistic tightening” campaign risks cementing inflation expectations below the target.

Gulf Crisis: Southeast Asia Has Seen It All Before
James M. Dorsey (Globalist) Jun 21, 2017
Two competing visions of ensuring regime survival are battling it out in the Gulf.

Europe's Unserious Plan for Greece
Bloomberg View Jun 21, 2017
The latest deal on debt won’t work, and everybody knows it.

Central Banks Should Look Abroad For Talent
Ferdinando Giugliano (Bloomberg View) Jun 21, 2017
The Bank of England is full of foreigners. That's the right idea.

The Fed Didn't See This Type of Bond Conundrum Coming
Ben Emons (Bloomberg View) Jun 21, 2017
Efforts to make the financial system safer could mean that higher short-term rates actually stimulate the economy.

MSCI Forgets Its Doubts About China
Christopher Balding (Bloomberg View) Jun 21, 2017
What changed from last year? Not much.

China Gets in the MSCI. Now Comes the Hard Part.
David Millhouse (David Millhouse) Jun 21, 2017
Officials need to use this as an opportunity to advance reforms in the nation's capital markets.

Canada's Housing Bubble Will Burst
Ben Carlson (Bloomberg View) Jun 21, 2017
U.S. homeowners know what can happen to the economy when the market destabilizes.

An IMF Bridge to Somewhere for Greece?
Mohamed A. El-Erian (Project Syndicate) Jun 21, 2017
The IMF has resurrected an old technique – commonly used in the 1980s during the Latin American debt crisis – that will allow Greece to avoid a payment default next month on debt owed to European creditors. But the Fund’s elegant compromise still leaves Greece under the shadow of an enormous debt overhang.

The Global Economy in 2067
Kaushik Basu (Project Syndicate) Jun 21, 2017
In 50 years, the world economy is likely to be thriving, with global GDP growing by as much as 20% per year, and income and consumption doubling every four years or so. The key to ensuring such an outcome is novel policies that support greater equality, sustainability, and creativity.

Turning Germany’s ‘bad’ trade surplus into a good experience for all
Frank Mattern and Jan Mischke (VoxEU) Jun 21, 2017
Germany’s large trade surplus is once again at the centre of controversy. This column argues that instead of being on the defensive about its competitive exports, Germany should look to reduce its current account surplus by making itself more competitive in the long term through smart investment in digital and other infrastructure. Germany’s large trade surplus is once again at the centre of controversy. This column argues that instead of being on the defensive about its competitive exports, Germany should look to reduce its current account surplus by making itself more competitive in the long term through smart investment in digital and other infrastructure.

The Case for an American Productivity Revival
Lee G. Branstetter and Daniel Sichel (PIIE) Jun 21, 2017
Labor productivity in the United States has been dismal for more than a decade. But productivity slowdowns are nothing new in the United States, and, like all its predecessors, the current slowdown will also come to an end as a new productivity revival takes hold.

Emmanuel Macron and Theresa May tell the tale of two nations
Philip Stephens (FT) Jun 22, 2017
Rather than gloating at Britain’s Brexit discomfort, France is looking to the future.

Index Funds Are Great for Investors, Risky for Corporate Governance
M. Todd Henderson and Dorothy Shapiro Lund (WSJ) Jun 22, 2017
One solution is to abstain from voting, leaving decisions to those with an incentive to be informed.

Throw the Bums Out, Global Edition
Ruchir Sharma (NYT) Jun 22, 2017
Parties in power, on the right and left, have suffered a series of stinging rebukes in elections across the globe over the past year.

How France could win the post-Brexit beauty contest
Catherine Rampell (WP) Jun 22, 2017
With the right pro-business reforms, Paris could win back thousands of jobs lost to London.

As Hamburg Summit Approaches, G20 Members Prepare for Debate on Trade
Bridges, Volume 21, Number 22 Jun 22, 2017
Members of the G20 coalition of major advanced and emerging economies are gearing up for their leaders’ summit in Hamburg, scheduled from 7-8 July. The high-level event, which is being held this year under the German presidency, is slated to see the topic of trade take centre stage.

US, New Zealand Officials Look to Deepen Trade Ties
Bridges, Volume 21, Number 22 Jun 22, 2017
US and New Zealand officials are exploring options to deepen bilateral trade ties, with the possibility of formal trade talks being floated.

Harnessing Uncertainty: Five Opportunities in the Core Bond Market
Scott A. Mather (PIMCO) Jun 22, 2017
This is an exciting time to be an investor, but it’s also a very uncertain one. Where are the opportunities in bonds amid the uncertainty?

How to grow the US-India economic relationship
Joshua P. Meltzer and Harsha Vardhana Singh (Brookings) Jun 22, 2017
Where Trump and Modi can align their respective economic agendas to deepen the U.S.-India bilateral trade and investment relationship.

If Only Banks Didn't Need Stress Tests
Bloomberg View Jun 22, 2017
Steve Mnuchin lives in a parallel universe where banks have more than enough capital to ride out a crisis. The rest of us aren't so lucky.

The Bank of England's Growing Policy Dilemma
Mohamed Aly El-Erian (Bloomberg View) Jun 22, 2017
The central bank needs help countering stagflation, though it may not get it.

Populism's Success, in Plain English
Tyler Cowen (Bloomberg View) Jun 22, 2017
What links the U.S. and U.K. is more than a common tongue. They're both open societies that have rejected elites.

Bond Traders Are Relying on Wishful Thinking
Charles Lieberman (Bloomberg View) Jun 22, 2017
Investors dismiss Yellen’s analysis at their own peril.

Capitalism Can Thrive Without Cooking the Planet
Noah Smith (Bloomberg View) Jun 22, 2017
Many countries are producing more while cutting carbon emissions.

Keep Trade With Korea Free
David Volodzko (Bloomberg View) Jun 22, 2017
Donald Trump may yet blow up a deal that benefits everyone.

Trump’s Sugar Swamp
Jeffrey Frankel (Project Syndicate) Jun 22, 2017
As the US, Mexico, and Canada prepare to renegotiate NAFTA, much attention is being devoted to sugar. Indeed, the negotiations will probably produce a sweet deal for the US sugar industry, highlighting the emptiness of Donald Trump’s promise to reduce the influence of special interests over US policy.

Donald Trump’s Trade-Knowledge Deficit
Pascal Salin (Project Syndicate) Jun 22, 2017
Donald Trump's quixotic quest to eliminate the US trade deficit completely misses the point, and shows why public policy should be based on valid economic theory, not gut feelings. If Trump goes down the protectionist path, he will do lasting damage to the US economy.

Trump’s Trade Illogic
Christopher Smart (Project Syndicate) Jun 22, 2017
As the Trump administration prepares to renegotiate NAFTA, the underlying logic of the US’s new approach to trade is about to receive prime-time scrutiny. When it does, the missed opportunities – on labor, subsidies, and competitiveness, and much else – will be impossible to ignore.

The Retreat of the Renminbi
Benn Steil and Emma Smith (Project Syndicate) Jun 22, 2017
The dramatic fall of the renminbi since 2014 reflects the slowing of China’s debt-fueled economic growth and the accumulation of default risks. Unlike just a few years ago, the world now has little, if any, reason to continue stockpiling China's currency.

Price manipulation in the Bitcoin ecosystem
Neil Gandal, JT Hamrick, Tyler Moore and Tali Oberman (VoxEU) Jun 22, 2017
The cryptocurrency Bitcoin has attracted widespread interest, in large part due to wild swings in its valuation. This column considers an earlier rise in the Bitcoin price to investigate what is driving the currency’s price spikes. The 2013 rise was caused by fraudulent trades taking place at the largest Bitcoin currency exchange at the time. This finding has implications for policymakers as they weigh what, if anything, to do about regulating cryptocurrencies in light of the record high Bitcoin valuation that many fear is a bubble. The cryptocurrency Bitcoin has attracted widespread interest, in large part due to wild swings in its valuation. This column considers an earlier rise in the Bitcoin price to investigate what is driving the currency’s price spikes. The 2013 rise was caused by fraudulent trades taking place at the largest Bitcoin currency exchange at the time. This finding has implications for policymakers as they weigh what, if anything, to do about regulating cryptocurrencies in light of the record high Bitcoin valuation that many fear is a bubble.

The EU Macroeconomic Imbalance Procedure: Some impact and no sanctions
Jean-Charles Bricongne and Alessandro Turrini (VoxEU) Jun 22, 2017
Since 2011, EU macroeconomic surveillance has aimed at preventing or correcting the type of imbalances that were responsible for the Global Crisis. Surveillance under the Macroeconomic Imbalance Procedure implies regular reports and policy recommendations monitored by the Commission, and the possible activation of economic sanctions. This column shows that, despite the procedure not having been used to its full extent so far and the sanctions stage not having been reached yet, the surveillance and recommendations have had an impact on policies in the first years of implementation. Since 2011, EU macroeconomic surveillance has aimed at preventing or correcting the type of imbalances that were responsible for the Global Crisis. Surveillance under the Macroeconomic Imbalance Procedure implies regular reports and policy recommendations monitored by the Commission, and the possible activation of economic sanctions. This column shows that, despite the procedure not having been used to its full extent so far and the sanctions stage not having been reached yet, the surveillance and recommendations have had an impact on policies in the first years of implementation.

Asia and the Fall of Coal
Nithin Coca (Diplomat) Jun 22, 2017
Asia’s sudden shift away from coal and toward renewable energy will have a global impact.

India Challenges China’s Intentions on One Belt, One Road Initiative
Harsh V Pant (YaleGlobal) Jun 22, 2017
Without multilateral cooperation, plans for China's ambitious One Belt, One Road initiative risk opposition

Lessons From the Collapse of Banco Popular
Gretchen Morgenson (NYT) Jun 23, 2017
When Spain's fifth-largest bank failed this month, Banco Santander swooped in to the rescue, and regulators breathed easy. They should have been scared.

What the Shrinking Yield Curve Is Really All About
David A Ader (Bloomberg View) Jun 23, 2017
The market doesn’t expect a reduction in the Fed's balance sheet to go very far or add much to the supply of bonds.

If Poland Can Fix Tax Fraud, So Can Greece
Leonid Bershidsky (Bloomberg View) Jun 23, 2017
Improved tax collection means Poland relies less on debt. Greece should take note.

The Fed Needs to Acknowledge Slowing Economy
Danielle DiMartino Booth (Bloomberg View) Jun 23, 2017
Too much debt is putting a strain on car sales, retail and commercial real estate.

When MSCI and S&P Rule the World
Justin Fox (Bloomberg View) Jun 23, 2017
With index funds poised to dominate investing, will index makers leave Snap (and maybe even Facebook) out in the cold?

Europe's Banking Union Is Dying in Italy
Ferdinando Giugliano (Bloomberg View) Jun 23, 2017
Italy's plan to rescue two small banks makes a mockery of Europe's new regulations.

Not All Fossil Fuels Are Going Extinct
Nathaniel Bullard (Bloomberg View) Jun 23, 2017
Coal power's future grows dimmer, but natural gas is looking brighter than ever.

Revisiting the Global Order
Javier Solana (Project Syndicate) Jun 23, 2017
The Pax Americana of the last half-century is on life support, but liberalism and multilateralism are not dead yet. An inclusive and mutually beneficial global system can still be resuscitated, if we begin to think differently about where the centers of influence are located.

Cyber attacks: An economic policy challenge
Claudia Biancotti, Riccardo Cristadoro, Sabina Di Giuliomaria, Antonino Fazio and Giovanna Partipilo (VoxEU) Jun 23, 2017
Cybersecurity is becoming a vital concern for the functioning of a modern economy. This column argues that the threat of cyber attacks should be tackled economy-wide, with economic policies aimed at overcoming the externalities and information asymmetries that lead to suboptimal protection choices on the part of private agents. There is an urgent need for an improved understanding of microeconomic mechanisms in the cybersecurity market, and for reliable data upon which policy design can be based. Cybersecurity is becoming a vital concern for the functioning of a modern economy. This column argues that the threat of cyber attacks should be tackled economy-wide, with economic policies aimed at overcoming the externalities and information asymmetries that lead to suboptimal protection choices on the part of private agents. There is an urgent need for an improved understanding of microeconomic mechanisms in the cybersecurity market, and for reliable data upon which policy design can be based.

Shedding (night-time) light on the local resource curse
Mark Gradstein and Marc Klemp (voxEU) Jun 23, 2017
A large literature has argued that natural resources have a negative effect on economic development. The Brazilian data used in this column fail to confirm these findings. Economic activity, as measured using night-time light data, increases more during periods of rising oil prices in localities with better access to oil. Oil revenue windfalls accruing to oil-rich locations and spillovers to adjacent locations drive this effect. A large literature has argued that natural resources have a negative effect on economic development. The Brazilian data used in this column fail to confirm these findings. Economic activity, as measured using night-time light data, increases more during periods of rising oil prices in localities with better access to oil. Oil revenue windfalls accruing to oil-rich locations and spillovers to adjacent locations drive this effect.

The Knives Are Out for South Korea’s Robber Barons
Geoffrey Cain (FP) Jun 23, 2017
Business clans have dominated South Korea's economy for decades — but their time may finally be up.

EU Underwhelmed by U.K.’s Brexit Offer for EU Nationals
Emily Tamkin (FP) Jun 23, 2017
European Union leaders were unimpressed with the United Kingdom’s Brexit offer.

Angola’s Corrupt Building Boom: ‘Like Opening a Window and Throwing Out Money’
Norimitsu Onishi (NYT) Jun 24, 2017
Angola’s reconstruction presented the politically connected with an opportunity to enrich themselves and their relatives.

India’s prime minister is not as much of a reformer as he seems
Economist Jun 24, 2017
But he is more of a nationalist firebrand.

A New UK Policy on Trade and Development Post-Brexit: A Good First Step
Owen Barder and Ian Mitchell (CGD) Jun 24, 2017
Britain just announced a new policy for trading with developing countries after Brexit. It maintains the current framework of duty free, quota free access to British markets for least developed countries. It is a good basis for the further steps we’d like to see Britain take.

Brexit: Full Amputation or Gentle Separation?
Denis MacShane and Stephan Richter (Globalist) Jun 24, 2017
The more Theresa May digs in, the less the British people know how much Brexit they really want.

Xi Jinping’s war on the ‘financial crocodiles’ gathers pace
Minxin Pei (FT) Jun 25, 2017
Beijing will pass off a politically motivated purge as tough regulatory enforcement.

Look to Greece for lessons on how to negotiate Brexit
Wolfgang Munchau (FT) Jun 25, 2017
A transitional agreement would allow for smoother dialogue and provide more certainty.

Will the oil price start to disturb the junk bond market?
FT Reporters Jun 25, 2017
Weakness in crude’s price will be one pressure point for markets over the next week.

Is the TPP a sleeping beauty or an organ donor?
Gary Hawke (EAF) Jun 25, 2017
Will the work that went into negotiating the Trans-Pacific Partnership (TPP) go to waste?

Italy shows EU banking union still has far to go
FT View Jun 26, 2017
Two imperfect liquidations need not stop financial integration.

Emerging market assets are trapped by an outdated cliché
Jonathan Wheatley (FT) Jun 26, 2017
Investors need to realise that EM assets are no longer driven by commodities.

A post-populist playbook for global capitalists
Rana Foroohar (FT) Jun 26, 2017
Why General Electric’s Jeff Immelt finds himself agreeing with Bernie Sanders.

Tectonic Shifts in Financial Markets by Henry Kaufman
John Authers (FT) Jun 26, 2017
A Wall Street veteran offers timely warnings on the fragility of institutions.

The European banking union falls short in Italy
Lucrezia Reichlin (FT) Jun 26, 2017
Veneto brings a lesson on how to deal with failing banks.

Narendra Modi embarks on a great tax gamble
Kiran Stacey (FT) Jun 26, 2017
An overhaul of the taxation system, which comes into effect on Saturday, aims to turn India into a single market.

China’s shadow finance time-bomb could trigger crisis
Andrew Collier (FT) Jun 26, 2017
Rising middle class would face harsh lesson if WMPs market collapses.

The Surprising Factor for Immigrant Success
Edward P. Lazear (WSJ) Jun 26, 2017
Those born in Algeria do better than those from Israel and Japan. Why? There are fewer of them.

Assessing Global Imbalances: The Nuts and Bolts
Maurice Obstfeld (IMF) Jun 26, 2017
Current account imbalances can be healthy or a sign of macroeconomic and financial stress—which makes their evaluation tricky. In line with its mandate of promoting international monetary cooperation, the IMF conducts annual external assessments for the world’s largest economies. The objective is to alert the global community to potential risks that countries need to address together.

Asia’s Long-Term Outlook: All Eyes on China’s Party Congress
Isaac Meng and Luke Spajic (PIMCO) Jun 26, 2017
The global economy faces several potential pivots in the direction and scale of monetary, fiscal, trade, geopolitical and exchange rate policies. One in particular will help determine the long-term outlook for China and emerging Asia.

Rewriting the China narrative
Martin Small (BlackRock) Jun 26, 2017
MSCI’s historic addition of China A-shares to its broader stock indexes is yet another signal that investors need to update their thinking on China.

AIIB, Tajikistan, and the Risks of Non-Concessional Lending
John Hurley (CGD) Jun 26, 2017
The Asian Infrastructure Investment Bank's (AIIB) second loan to Tajikistan in the space of a year raises questions about lending on “hard terms” to poor countries. In its eagerness to meet the investment needs of Asian countries, is the AIIB going to get burned by lending at non-concessional rates to poor countries? Or, if a country becomes unable to pay all its bills, will it treat the AIIB as a preferred creditor and prioritize debt service payments over the needs of the poor?

Saudi’s Crown Prince: A Youthful Gambler
James M. Dorsey (Globalist) Jun 26, 2017
Crisis puts future of Saudi reforms and GCC in doubt.

Seeing China Through Its Economic History
Tyler Cowen (Bloomberg View) Jun 26, 2017
Don't be too sure that slower growth will promote instability. That's not what's happened before.

What You Should Know About r*
Mohamed Aly El-Erian (Bloomberg View) Jun 26, 2017
Finding the neutral rate of interest will ensure the economy is growing at potential and inflation is contained.

Treasury's Ultra-Long Bonds Have No Natural Demand
Ashwin Alankar (Bloomberg View) Jun 26, 2017
The demise of defined benefit pension plans removes the only logical buyers from the market.

This Time Really Is Different
Ben Carlson (Bloomberg View) Jun 26, 2017
Markets are constantly evolving based on our updated knowledge of the past.

Macron Can Follow Germany's Lead on Labor Reform
Leonid Bershidsky (Bloomberg View) Jun 26, 2017
Germany's Hartz reforms made working more attractive; Macron's plans appear to miss that target.

Chinese Steel Exports to the United States Dropped Dramatically in 2016
Zhiyao (Lucy) Lu (PIIE) Jun 26, 2017
On April 20, 2017, the Trump administration self-initiated an investigation on whether steel imports “threaten to impair" national security, using section 232 of the Trade Expansion Act of 1962.

Another Lesson from Japan
Stephen S. Roach (Project Syndicate) Jun 26, 2017
Though Japan’s experience since the early 1990s provides many lessons, policymakers in the rest of the world have failed miserably in heeding them. Time and again, major central banks – especially the Federal Reserve, the European Central Bank, and the Bank of England – have been quick to follow the Bank of Japan's disastrous lead.

Acquiring bank networks
Ross Levine, Chen Lin and Zigan Wang (VoxEU) Jun 26, 2017
While the causes and consequences of mergers have received a lot of scholarly attention, geographic factors have thus far been neglected. Using US data, this column argues that greater geographic overlap of the subsidiaries and branches of two bank holding companies increases the likelihood of the two merging, and also boosts the cumulative abnormal returns of the acquirer, target, and merged companies. It also discusses how network overlap can affect synergies and value creation. While the causes and consequences of mergers have received a lot of scholarly attention, geographic factors have thus far been neglected. Using US data, this column argues that greater geographic overlap of the subsidiaries and branches of two bank holding companies increases the likelihood of the two merging, and also boosts the cumulative abnormal returns of the acquirer, target, and merged companies. It also discusses how network overlap can affect synergies and value creation.

The falling elasticity of global trade to economic activity
Marc Auboin and Floriana Borino (VoxEU) Jun 26, 2017
In recent years there has been debate over whether the global trade slowdown and related fall in trade-to-income elasticity was structural or cyclical. This column estimates the standard import equation for 38 advanced and developing economies using an import intensity-adjusted measure of aggregate demand. This measure allows the authors to predict 90% of changes in global imports. The slowdown in global value chains explains more than half of the remaining share of the global trade slowdown, while protectionism does not appear to be statistically significant. In recent years there has been debate over whether the global trade slowdown and related fall in trade-to-income elasticity was structural or cyclical. This column estimates the standard import equation for 38 advanced and developing economies using an import intensity-adjusted measure of aggregate demand. This measure allows the authors to predict 90% of changes in global imports. The slowdown in global value chains explains more than half of the remaining share of the global trade slowdown, while protectionism does not appear to be statistically significant.

The Race to Solar-Power Africa
Bill McKibben (New Yorker) Jun 26, 2017
American startups are competing to bring electricity to communities that remain off the grid.

Has the Dollar Become More Sensitive to Interest Rates?
John Fernald, Thomas M. Mertens, and Patrick Shultz (FRBSF Econ Letter) Jun 26, 2017
Interest rates in the United States have diverged from the rates of other countries over the past few years. Some commentators have voiced concerns that, as a result, exchange rates might be more sensitive to unanticipated changes in U.S. interest rates now than they were historically. However, an examination of market-based measures of policy expectations finds no convincing evidence that the U.S. dollar has become more sensitive since 2014.

The World Is Even Less Stable Than It Looks
Stephen M. Walt (FP) Jun 26, 2017
Chaos is spreading – and that’s even before getting to America’s lack of competent leadership.

A growth warning from the US bond market
FT View Jun 27, 2017
The flattening of the yield curve is another reason to hold rates.

Brexit upheaval prompts French entrepreneurs to dream of home
Erich Bonnet (FT) Jun 27, 2017
How President Macron is creating a welcoming environment for business

Eerie calm as EM equity volatility hits record low
Steve Johnson (FT) Jun 27, 2017
History suggests risk of a sell-off is rising.

The economic origins of the populist surge
Martin Wolf (FT) Jun 27, 2017
Inequality and joblessness will fuel and sustain the wave of voters’ anger.

Ford’s shift to China offers the Trump administration a lesson in economics
WP Jun 27, 2017
The government should learn that attempts to micromanage business-location decisions are unproductive.

The IMF’s New Role in Greece Proves Its Value for Europe and the United States
Anna Gelpern (PIIE) Jun 27, 2017
Greece’s economic problems are far from solved, but the International Monetary Fund (IMF) deserves part of the credit for the glimmers of progress on official debt relief in the Eurogroup announcement on June 15.

Europe's Banking Union Fails Its Latest Test
Bloomberg View Jun 27, 2017
Italy shows that governments are still on the hook when banks fail.

No, Fed Didn't Make a Mistake by Hiking Rates
Mohamed Aly El-Erian (Bloomberg View) Jun 27, 2017
A report adds to the growing debate about the wisdom of monetary policy normalization.

Can the City Survive?
Satyajit Das (Bloomberg View) Jun 27, 2017
Despite Brexit, London's place as a leading global financial center looks safe.

Japan Inc. Repeats Its Mistakes
Michael Schuman (Bloomberg View) Jun 27, 2017
The economy won't truly revive till bureaucrats stop trying to direct the economy.

Oil's in a Bear Market, and Stocks Will Soon Follow
Gary Shilling (Bloomberg View) Jun 27, 2017
A bottom oil price of $10 to $20 per barrel -- the marginal cost of production in efficient locales -- still seems valid.

Venezuela Scrapes the Bottom of Oil Barrel Diplomacy
Mac Margolis (Bloomberg View) Jun 27, 2017
For a price, the country's regional allies may be willing to shift their allegiance.

Why Investors Shy Away From Saudi Arabia
Robin Mills (Bloomberg View) Jun 27, 2017
Falling oil prices and a region mired in conflict have made a new economic model more urgent than ever.

Confronting Africa’s Water Challenge
Akinwumi Adesina (Project Syndicate) Jun 27, 2017
Africa is currently experiencing its worst drought since 1945, especially in Southern Sudan, Somalia, Ethiopia, and Northern Nigeria. These fragile areas urgently need help in building resilient systems to ensure access to clean, portable water and effective sanitation facilities for all people.

Europe’s Gradualist Fallacy
Yanis Varoufakis (Project Syndicate) Jun 27, 2017
Europe is at the mercy of a common currency that not only was unnecessary for European integration, but that is actually undermining the EU itself. So what should be done about a currency without a state to back it – or about the 19 European states without a currency that they control?

Does Addressing Bilateral Trade Imbalances Work?
Martin Feldstein (Project Syndicate) Jun 27, 2017
Even if China opened its markets fully to US goods and services, the total US trade deficit would not change. But focusing on imbalances with individual countries can nonetheless lead to desirable policy changes, as the Trump administration's approach to China has shown.

Do Developing Economies Have a Debt "Problem"?
Jay H. Bryson and E. Harry Pershing (Wells Fargo) Jun 27, 2017
External debt in the developing economies has risen noticeably over the past few years. It was an unsustainable buildup in external debt in the 1990s that led to a series of financial crises that swept through the developing world in 1997-98. Should we worry that the events of twenty years ago are about to reoccur?

Europe’s stake in Britain’s long-term prosperity
FT View Jun 28, 2017
A change of atmosphere allows the EU to adjust its Brexit goals.

Unity at midnight beckons with India’s tax reform
Gurcharan Das (FT) Jun 28, 2017
This defines a visionary moment as the country chooses ‘pooled sovereignty’.

Jacob Zuma wages war on South Africa’s institutions
David Pilling (FT) Jun 28, 2017
The assault on the central bank is stage in the descent into crony capitalism.

Is the next recession being postponed?
Robert J. Samuelson (WP) Jun 29, 2017
The Phillips Curve, a tool that shows the relationship between inflation and unemployment, has shifted.

China's Bonds Are Ready to Join Stocks on the World Stage
David Millhouse (Bloomberg View) Jun 28, 2017
The first trading link for bonds between the mainland and Hong Kong will be the final catalyst to get China’s debt securities in major global indexes.

The Euro Zone Needs Better Shock Absorbers
Jean-Michel Paul (Bloomberg View) Jun 28, 2017
Two separate bank rescues show that the euro zone is biding its time but needs a better way to cope with shocks.

Behind the Potemkin Village of EU Bank Regulation
Ferdinando Giugliano (Bloomberg View) Jun 28, 2017
Italy's banking deal is no way to handle a long-simmering crisis.

The U.S. Is Getting the Educated Immigrants It Needs
Noah Smith (Bloomberg View) Jun 28, 2017
The influx of high-skilled newcomers from Asia is good news, unless the Trump administration chokes it off.

Investors Have Lost Sight of the Purpose of Indexes
Aaron Brown (Bloomberg View) Jun 28, 2017
Index providers are not in the business of arbitrating disputes about transparency in China, U.S. corporate governance or Venezuelan politics.
France's new president is betting that he can bring disaffected voters back into the liberal fold by combining openness with economic growth. What if he just makes them even angrier?

Russia’s Oligarchs-in-Waiting
Anders Åslund (Project Syndicate) Jun 28, 2017
Through a process of brazen nepotism, Russian President Vladimir Putin has nationalized his country's elites, and consolidated his own power. As the better-known children of Russia’s previous generation of oligarchs have steadily left the country, the offspring of Putin’s cronies have taken their place.

China’s Hong Kong at 20
Chris Patten (Project Syndicate) Jun 28, 2017
Negotiations with Chinese officials often turn into prolonged fights for every imaginable concession. But the real problem is that, contrary to what many believe, China's authorities do not always keep their promises, with Hong Kong's experience in the 20 years since the British handover being a case in point.

Who Does Business Represent?
Ricardo Hausmann (Project Syndicate) Jun 28, 2017
On whose behalf do business associations speak? It’s an increasingly urgent question, because while firms have radically changed how they think about themselves, business associations have yet to catch up, and the resulting lag is making capitalism less legitimate in many countries.

The Changing Geopolitics of European Emotion
Dominique Moisi (Project Syndicate) Jun 28, 2017
A new triangle of geopolitical emotion has emerged in Europe: Great Britain has ceased feeling superior to France, and France has stopped feeling inferior to Germany. The question is whether this sentimental transformation will ultimately reorder the balance of power in Europe, and possibly the world.

Does More Financial Development Lead to More or Less Volatility?
Maria A. Arias and Yi Wen (FRBSL Regional Economist) Jun 28, 2017
For a long time in the history of economic thought, financial development has been viewed as a pivotal force for fostering economic growth.1 Lately, though, some people have suggested that too much financial development can lead to excessive economic volatility.

China’s WTO entry benefits US consumers
Mary Amiti, Mi Dai, Robert Feenstra and John Romalis (VoxEU) Jun 28, 2017
China has become the world’s largest exporter, with a rapid rise in its world trade share just after it joined the WTO in 2001. This column finds that China’s WTO entry reduced the US manufacturing price index by 7.6% between 2000 and 2006, with most of this effect arising from China reducing its own import tariffs. US consumers gained because they paid less for manufactured goods and because they had access to more varieties of goods. China has become the world’s largest exporter, with a rapid rise in its world trade share just after it joined the WTO in 2001. This column finds that China’s WTO entry reduced the US manufacturing price index by 7.6% between 2000 and 2006, with most of this effect arising from China reducing its own import tariffs. US consumers gained because they paid less for manufactured goods and because they had access to more varieties of goods.

The Dark Side of the Chinese Fiscal Stimulus: Evidence from Local Government Debt
Yi Huang, Marco Pagano and Ugo Panizza (VoxChina) Jun 28, 2017
At first glance, the stimulus was a resounding success. China escaped the Great Recession and became one of the main drivers of world economic growth. However, this was at the cost of exacerbating a long-standing problem in China’s economy; namely, that high-productivity private firms fund their investment out of internal savings while low-productivity state-owned firms survive thanks to easier access to credit. We show that the massive increase in local government debt that resulted from the stimulus package did indeed crowd out investment by private manufacturing firms.

Can Nationalists Ever Make Good Liberals?
James Traub (FP) Jun 28, 2017

China's Economic Data: An Accurate Reflection, or Just Smoke and Mirrors?
Michael T. Owyang and Hannah Shell (FRBSL Regional Economist) Jun 28, 2017
Some people remain skeptical about the official statistics released by the Chinese government.

How Britain’s Brexiters lost control of Brexit
Philip Stephens (FT) Jun 29, 2017
Cabinet ministers are in open conflict about the shape of a deal with the EU.

The E.U. has gotten much more popular. What happened?
Catherine Rampell (WP) Jun 29, 2017
Europeans may be realizing, thanks in part to Brexit, that the grass isn’t actually greener on the other side.

Central Banks and the New Abnormal
WSJ Jun 29, 2017
Markets fret as they forget what normal policy looks like.

India and the Visible Hand of the Market
Kaushik Basu (NYT) Jun 29, 2017
Some warned that demonetization would hurt India’s economy. It did. But not quite as anticipated.

Lighthizer Lays Out US Trade Policy Agenda, NAFTA Hearings Get Underway
Bridges, Volume 21, Number 23 Jun 29, 2017
US Trade Representative (USTR) Robert Lighthizer discussed with lawmakers the Trump administration’s trade policy priorities for the coming year, covering areas such as the renegotiation of the North American Free Trade Agreement (NAFTA) and the upcoming WTO ministerial conference.

EU, Japan Trade Negotiators Ramp Up Efforts to Conclude "Political Agreement"
Bridges, Volume 21, Number 23 Jun 29, 2017
Negotiators from the EU and Japan are ramping up their work to clinch a bilateral trade agreement, with reports suggesting that the two sides are tentatively hoping to have a political deal in place by this year’s G20 leaders’ summit.

China's Li Keqiang Highlights Commitment to Free Trade, Climate Change
Bridges, Volume 21, Number 23 Jun 29, 2017
Chinese Premier Li Keqiang called for continued support in favour of free trade and globalisation, amid the ongoing international debate over how to address concerns of fairness, inclusion, and sustainability.

Countries Press On in Efforts to Join WTO Public Procurement Deal
Bridges, Volume 21, Number 23 Jun 29, 2017
The WTO's Government Procurement Agreement (GPA) may soon see some new additions, with Australia reportedly close to the negotiating finish line, nearly two years after it launched its bid to join the plurilateral accord.

Politics to Shape the UK’s Long-Term Outlook
Mike Amey (PIMCO) Jun 29, 2017
The UK is now entering a period of significantly greater uncertainty as the political outlook has become more clouded.

Financial regulation after the crisis: still liberal, but...
Oliver Denk (OECD Insights) Jun 29, 2017
what do we actually know about how financial regulation has evolved around the world since the global financial crisis?

China's Excess Capacity in Steel: A Fresh Look
Zhiyao (Lucy) Lu (PIIE) Jun 29, 2017
China's steel production has expanded rapidly in the last decade. But its capacity for production has increased at an even higher rate than production, leading to growing excess steel capacity.

Rich Country Labor Mobility and Low Skill Wages, Part Two: Instruments to Targets
Lant Pritchett (CGD) Jun 29, 2017
Even if there were a robust and credible negative impact on wages of non-Hispanic male natives without a high school degree from low skill migrant arrivals (which there isn’t), this would not justify limiting immigration as there are better instruments to achieve the same objectives, with much less cost.

OPEC, Oil Prices and Disruptive Innovation
Mohamed Aly El-Erian (Bloomberg View) Jun 29, 2017
Cost-cutting advances in shale are weakening the cartel's grasp of energy market dynamics.

Central Banks Won't End the Party Soon
Komal S Sri-Kumar (Bloomberg View) Jun 29, 2017
The Fed, Bank of England, European Central Bank and Bank of Japan will keep up asset purchases.

Hong Kong’s Handover Hangover
Sin-ming Shaw (Project Syndicate) Jun 29, 2017
As the 20th anniversary of the handover of Hong Kong from the UK to China approaches, political challenges are threatening to upend what was once a financial miracle. With the city divided along political, economic, and generational fault lines, Hong Kong needs a new vision for managing its future.

The Rebirth of the TPP
Koichi Hamada (Project Syndicate) Jun 29, 2017
When Donald Trump, in one of his first acts as president, announced that the US would not participate in the Trans-Pacific Partnership (TPP), many assumed that the mega-regional trade deal was dead. But such assumptions may have been premature.

Should China Deleverage?
Yu Yongding (Project Syndicate) Jun 29, 2017
China’s mounting debt problem recently moved into the spotlight when Moody’s downgraded the country’s sovereign rating. But China is confronting a more important macroeconomic challenge than curbing the accumulation of government and corporate debt.

Should We Be Worried About Productivity Trends?
Sandile Hlatshwayo and Michael Spence (Project Syndicate) Jun 29, 2017
Many economists are concerned about the apparent structural decline in productivity growth that is underway in many parts of the world. But the single-minded focus on productivity growth fails to account for societies' shifting priorities, which reveal preferences unrelated to maximizing income growth.

20 Years After the Hong Kong Handover
Chris Patten (Project Syndicate) Jun 29, 2017
Since Hong Kong returned to Chinese sovereignty on July 1, 1997, it has remained one of Asia’s freest and most successful cities. But China’s tightening grip raises the question: What happened to “one country, two systems”?

One Country, One System
Minxin Pei (Project Syndicate) Jun 29, 2017
July 1 marks the 20th anniversary of the UK’s handover of Hong Kong to China, under a model called “one country, two systems.” But an unavoidable question will hang over the official commemorations: Is there really anything to celebrate?

Foreign direct investment and domestic firms' production complexity
Beata Javorcik, Alessia Lo Turco and Daniela Maggioni (VoxEU) Jun 29, 2017
Recent research suggests that foreign direct investment makes it more likely that host countries upgrade production. Using the example of Turkey, this column shows that while the presence of foreign affiliates does not seem to affect the propensity of firms to innovate, it is positively correlated with the complexity level of products newly introduced by local supplier firms. Foreign direct investment inflows appear to act as a catalyst to develop sophisticated manufacturing, and should be promoted as part of a domestic industrial policy. Recent research suggests that foreign direct investment makes it more likely that host countries upgrade production. Using the example of Turkey, this column shows that while the presence of foreign affiliates does not seem to affect the propensity of firms to innovate, it is positively correlated with the complexity level of products newly introduced by local supplier firms. Foreign direct investment inflows appear to act as a catalyst to develop sophisticated manufacturing, and should be promoted as part of a domestic industrial policy.

Monetary policy, credit dynamics, and economic activity in developing countries
Charles Abuka, Ronnie Alinda, Camelia Minoiu, José-Luis Peydró and Andrea Presbitero (VoxEU) Jun 29, 2017
Existing studies suggest that the effects of monetary policy in developing countries on credit and the real economy are weak. This column challenges this view using rich loan-level credit register data from Uganda. It shows that monetary policy tightening significantly reduces credit supply – especially for banks with greater leverage and sovereign debt exposure – and identifies spillovers on inflation and economic activity. The effects are larger in more financially developed areas, highlighting the importance of financial development for policy effectiveness. Existing studies suggest that the effects of monetary policy in developing countries on credit and the real economy are weak. This column challenges this view using rich loan-level credit register data from Uganda. It shows that monetary policy tightening significantly reduces credit supply – especially for banks with greater leverage and sovereign debt exposure – and identifies spillovers on inflation and economic activity. The effects are larger in more financially developed areas, highlighting the importance of financial development for policy effectiveness.

Labour markets and poverty in village economies
Oriana Bandiera, Robin Burgess and Imran Rasul (VoxDev) Jun 29, 2017
Programme to provide ultra-poor women in Bangladesh with livestock assets suggests one-off interventions can be effective in fighting extreme poverty.

Saudi Arabia's Succession Plan Shakes Up the Middle East
Dilip Hiro (YaleGlobal) Jun 29, 2017
Qatar’s embrace of freedom of expression and good ties with Shias threatens Saudi Arabia

Donald Trump Finally Found a German Thing He Likes
Paul Hockenos (FP) Jun 29, 2017
Trump wants to transfer Germany's vaunted job training model to the United States. Will it get lost in translation?

Beijing's Debt Dilemma
Edoardo Campanella (FA) Jun 29, 2017
Why China's bubble is a threat to the global economy.

What Happened to Venezuela?
Greg Grandin (LRB) Jun 29, 2017
Today Venezuela is gripped by a crisis of extraordinary proportions, as all that Chávez helped create is collapsing. To understand how it got to this point – to understand Chávez’s spectacular rise and his country’s equally spectacular breakdown – it helps to know something about where he came from.

After Killing Currency, Modi Takes a Leap With India's Biggest-Ever Tax Overhaul
Geeta Anand (NYT) Jun 30, 2017
The new system will replace a welter of taxes from around the country that were seen as a major impediment to growth. But will it be any simpler?

Six Months out from Demonetization: Is Digital Finance in India’s Future?
Anit Mukherjee and Divyanshi Wadhwa (CGD) Jun 30, 2017
Today, June 30, marks six months from the day Indians had to change their old 500 and 1000 rupee notes following the “demonetization shock” announced by the government. The turmoil in the economy has since calmed to a large extent. In the past six months, the government also launched a concerted effort to wean Indians away from cash as the preferred method of payment for transactions.

One Hundred Years of Indebtedness
Carmen Reinhart (Project Syndicate) Jun 30, 2017
Gabriel Garcia Márquez, the Nobel laureate novelist most famous for One Hundred Years of Solitude, was native to Colombia. Nonetheless, as a master of magical realism, Garcia Márquez would have appreciated the Republic of Argentina’s recent combination of fact and fantasy.

A European Economic Miracle?
Simon Johnson (Project Syndicate) Jun 30, 2017
Whether or not the eurozone will succeed in finding ways to ensure that all of its members grow and benefit from growth cannot be known. What is certain is that in an environment like the current one, where the worst has passed, the task has become much easier.

The Future of Trade
Rohinton P. Medhora (Project Syndicate) Jun 30, 2017
The past year’s populist resurgence has brought to the fore ongoing debates about trade and underscored public concerns about internationalism. Can the mechanisms of globalization that shaped the twentieth-century world economy be salvaged to continue delivering prosperity in the coming decades?

The hype, reality, and causes of the global trade slowdown
Daniel Gros (VoxEU) Jun 30, 2017
Trade liberalisation has been a significant driver of globalisation over the past half century, but global trade has slowed in recent years. This column argues that globalisation can also be driven by higher commodity prices, as commodities constitute a large fraction of global trade. This is reflected in trade volumes and commodity prices, which increased until around 2014 but have fallen since. Commodity price-driven globalisation implies lower living standards in advanced countries, as the higher commodity prices diminish the purchasing power of workers. Trade liberalisation has been a significant driver of globalisation over the past half century, but global trade has slowed in recent years. This column argues that globalisation can also be driven by higher commodity prices, as commodities constitute a large fraction of global trade. This is reflected in trade volumes and commodity prices, which increased until around 2014 but have fallen since. Commodity price-driven globalisation implies lower living standards in advanced countries, as the higher commodity prices diminish the purchasing power of workers.

Greece’s sovereign debt and economic realism
Jeremy Bulow and John Geanakoplos (VoxEU) Jun 30, 2017
After another six months of discussions, Greek debt negotiations succeeded in once again kicking the can down the road. This column analyses how sophisticated and experienced negotiators like the IMF, the Eurozone leadership, and by now even the Greeks, could have let negotiations drag out for so many years, and goes on to propose a plan which might be just radical enough to meet the needs of all parties. After another six months of discussions, Greek debt negotiations succeeded in once again kicking the can down the road. This column analyses how sophisticated and experienced negotiators like the IMF, the Eurozone leadership, and by now even the Greeks, could have let negotiations drag out for so many years, and goes on to propose a plan which might be just radical enough to meet the needs of all parties.

The Asian Financial Crisis 20 Years On
Stephan Haggard (Diplomat) Jun 30, 2017
What went wrong? What lessons can we draw? And could it happen again?

Do Developing Economies Have a Debt Problem? Part II
Jay H. Bryson and E. Harry Pershing (Wells Fargo) Jun 30, 2017
The aggregate debt-to-GDP ratio of 17 large developing economies has shot up markedly in recent years. Although the rise in leverage in the developing world has been broad based, the buildup in debt in China, especially in the business sector, has been eye-popping. Debt-servicing ratios across the developing world have trended higher in recent years. That said, there are few outward signs of financial stress in most developing economies at present.