News & Commentary:

Articles/Commentary

Markets under pressure as trade war shifts gear
FT View Jun 1, 2019
The US administration has tied Mexico tariffs to illegal immigration.

Bond market is yelling rate cut but Fed unlikely to listen
Michael Mackenzie (FT) Jun 1, 2019
Inverted and plummeting yields are telling policymakers to make a pre-emptive move.

Economic woes signal gloomy year for Latin America
Michael Stott, Andres Schipani and Jude Webber (FT) Jun 1, 2019
Brazil and Mexico’s contraction in first quarter raises fears of return to recession.

Italy’s Narrow Path to Recovery
Pier Carlo Padoan (Project Syndicate) Jun 1, 2019
Given the constraints imposed by its huge public debt, Italy must continue to consolidate its public finances. But policymakers can, and must, support stable and inclusive growth – through structural reforms, targeted investments, and direct support for the most vulnerable sections of the population.

The intergenerational effects of a large wealth shock
Philipp Ager, Leah Boustan and Katherine Eriksson (VoxEU) Jun 1, 2019
One striking feature of many underdeveloped societies is that economic power is concentrated in the hands of very small powerful elites. This column explores why some elites how remarkable persistence, even after major economic disruptions, using the American Civil War’s effect on the Southern states. Using census data, it shows that when the abolition of slavery threatened their economic status, Southern elites invested in their social networks which helped them to recoup their losses fairly quickly.

The IMF Today and Tomorrow
Martin Wolf (F&D) Jun 1, 2019
To meet future challenges, the IMF must have strong backing from its members.

Updating Bretton Woods
Christine Lagarde (F&D) Jun 1, 2019
Renewed commitment to global economic cooperation is needed.

Rising Tide
Raghuram Rajan (F&D) Jun 1, 2019
Global cooperation is needed to reap the benefits and avoid the pitfalls of cross-border capital flows.

The Future of Trade
Pinelopi Koujianou Goldberg (F&D) Jun 1, 2019
Policy can play a role in shaping the future of the ailing multilateral trade system.

China's Ascent
Keyu Jin (F&D) Jun 1, 2019
The rise of China will have far-reaching consequences—the world should get ready.

The IMF Can (and Must) Disrupt Itself
Mohamed A. El-Erian (F&D) Jun 1, 2019
In a rapidly changing world, the IMF needs member country support.

Reimagining the IMF
Adam Tooze (F&D) Jun 1, 2019
In a postcrisis world, the Fund must move beyond its role as lender of last resort.

Invisible Links
David Dollar (F&D) Jun 1, 2019
Value chains transform manufacturing—and distort the globalization debate.

A Digital Africa
Vera Songwe (F&D) Jun 1, 2019
Technology can be a springboard for faster, more inclusive growth.

The Specter of Versailles
Barry Eichengreen (F&D) Jun 1, 2019
The conference that ended World War I was followed by an inward turn that has parallels today.

EU needs to pick up pace on capital markets union
FT View Jun 2, 2019
Companies face widely differing costs of credit even within the eurozone.

How not to select the next European Central Bank president
Wolfgang Münchau (FT) Jun 2, 2019
Successor to Mario Draghi needs a willingness to admit errors.

The trade wars are here. Are trade blocs next?
Robert Samuelson (WP) Jun 2, 2019
Such a standoff in the 1930s made the Great Depression worse, and it can happen again.

Trade War 'Losers' Have Been Bond-Market Winners
Shuli Ren (Bloomberg View) Jun 2, 2019
Economists would argue that China, and countries dependent on its demand, would suffer from the spat. Not so, according to debt investors.

Face it, OPEC. Russia Is No Longer Your Friend
Julian Lee (Bloomberg View) Jun 2, 2019
Russia isn’t pulling its weight on output cuts. So why should OPEC let it throw its weight around?

Investors Could Tip the U.S. Economy Against Themselves
Mohamed Aly El-Erian (Bloomberg View) Jun 2, 2019
There’s a risk for a self-fulfilling cycle of market instability and economic disruptions.

How markets are reacting to the US-China trade war
Gavyn Davies (FT) Jun 3, 2019
Last year’s global market panic has not been repeated this time — yet.

Inflation Targeting and Financial Stability by Michael Heise
Claire Jones (FT) Jun 3, 2019
Central banks need a broader perspective, and not just in the eurozone.

Is China about to change the global oil trade?
Nick Butler (FT) Jun 3, 2019
Beijing’s reaction to America’s assertion of power could reshape markets.

Trump’s Tariffs Could Nullify Tax Cut, Clouding Economic Picture
Jim Tankersley (NYT) Jun 3, 2019
President Trump’s plans to increase tariffs on imports from Mexico and China would wipe out the benefits of his signature tax cuts for the poorest Americans, analyses show.

Trump Wants to Cut Interest Rates. Powell Should Do It Anyway
Donald L. Luskin (WSJ) Jun 3, 2019
The chairman made the case last year for easing if the yield curve inverts—as it did in March.

Want More Investment and Entrepreneurship? Protect Private Property
Kaycee Ikeonu (Mises Wire) Jun 3, 2019
Africa has plenty of hard workers and plenty of natural resources. But private property is not secure there, which means few are willing to invest their capital there.

Rare Earths: China’s Strongest Card
Tom Clifford (Globalist) Jun 3, 2019
The U.S. imports 80% of its rare earths from China, but accounts for just 4% of China’s rare earths exports. This gives China a significant advantage.

Trump’s India Trade Threat Demands Cool Heads
Andy Mukherjee (Bloomberg View) Jun 3, 2019
The potential economic damage is serious. Modi must respond with pragmatism rather than nationalist rhetoric.

South Korea's Economy Is Tanking. Samsung's On It
Daniel Moss (Bloomberg View) Jun 3, 2019
The central bank looks frozen as exports slide and growth sputters. The country’s biggest company, meanwhile, has sounded the alarm.

The Scary Side of Europe’s Economic Data
Melvyn Krauss (Bloomberg View) Jun 3, 2019
GDP growth is OK, but that metric looks backward. Forward-looking indicators show that a calming presence is crucial at the ECB.

Trade War Traps ECB With Bund Yields at Record Low
Mark Gilbert (Bloomberg View) Jun 3, 2019
As yields sink deeper into negative territory, the warning for Mario Draghi is getting louder.

Multinationals Are the World’s Bogeymen Again
David Fickling (Bloomberg View) Jun 3, 2019
From FedEx to Huawei to Nissan, the atmosphere is turning chilly for cross-border companies and executives.

Trump’s Trade War Has Cost Investors Up to $7 Trillion
Stephen Gandel (Bloomberg View) Jun 3, 2019
Stocks dropped 6.6% in May, and the damage goes back even further.

Donald Trump's Trade War Strategy Is Easy to Grasp
Timothy L O'Brien (Bloomberg View) Jun 3, 2019
There isn’t one, regardless of what the president’s defenders tell you.

Maybe Africa Really Will Be the New China
Noah Smith (Bloomberg View) Jun 3, 2019
Contrary to expert opinion, manufacturing could lead the way.

Trump’s Trade-War Miscalculation
Zhang Jun (Project Syndicate) Jun 3, 2019
The US seems convinced that it is up against a China with a particularly weak hand, owing to the risk of a hard landing for its economy. But while China imports relatively little from the US, it may have even more weapons than its opponent.

The End of the World As We Know It
Joschka Fischer (Project Syndicate) Jun 3, 2019
Last month, under pressure from US President Donald Trump’s administration, Google terminated its cooperation with Huawei, thereby depriving the Chinese smartphone maker of the license to use Google’s Android software and related services. The move marks both a new pinnacle in the Sino-American conflict and the end of US-led globalization.

A European atlas of economic success and failure
Zsolt Darvas, Jan Mazza and Catarina Midoes (Bruegel) Jun 3, 2019
Economic growth was diverse across EU regions, yet it is crucial to control for region-specific factors in assessing growth performance. We find that there are rather successful regions in many EU countries, suggesting that the EU can provide a good framework for growth. Yet the worst performers are more concentrated in some countries, suggesting that country-specific factors can play a major role in regional development.

Sound at last? Assessing a decade of financial regulation: A new eBook
Patrick Bolton, Stephen Cecchetti, Jean-Pierre Danthine and Xavier Vives (VoxEU) Jun 3, 2019
While the decade since the Global Crisis has seen clear improvements in financial regulation and supervision, there is still work to be done in several crucial areas, and political constraints may bite.This column introduces the first report in a new series on ‘The Future of Banking’, which tackles three important areas of post-crisis regulatory reform: the Basel III agreement on capital, liquidity and leverage requirements; resolution procedures to end ‘too big to fail’; and the expanded role of central banks with a financial stability remit.

Concentration in the asset management industry and stock prices
Francesco Franzoni (VoxEU) Jun 3, 2019
The asset management industry has become increasingly concentrated in recent decades. Regulators are concerned about the systemic risks this may pose. Using data from the US, this column suggests that the increased concentration has led to more volatile prices of stocks held by large institutional investors. This poses challenges for regulators trying to weigh price efficiency and economies of scale.

Satisfying the great expectations of the middle class
Jeffrey Chwieroth and Andrew Walter (VoxEU) Jun 3, 2019
The accumulation of mass financialised wealth has transformed the politics of banking crises. This column shows that the rising wealth of the middle classes has generated great expectations that their wealth will be protected by the government. As a result, democracies perform more financial sector bailouts and are also more financially fragile and politically unstable.

Can variation in firm growth explain the development gap? Colombia vs the US
Marcela Eslava, John Haltiwanger, and Alvaro Pinzón (VoxDev) Jun 3, 2019
A deficit of superstar plants, an excess of microestablishments, and the success of underperformers are key symptoms of Colombia’s development problem

Why Is the Fed's Balance Sheet Still So Big?
Andrew Foerster and Sylvain Leduc (FRBSF Econ Letter) Jun 3, 2019
The Federal Reserve’s balance sheet is significantly larger today than it was before the financial crisis of 2008–2009. Rising demand for currency due to greater economic activity is partly responsible for this increase. The balance sheet will also need to remain large because the Federal Reserve now implements monetary policy in a regime of ample reserves, using a different set of tools than in the past to achieve its interest rate target.

Political risks loom large for developed economies
Mohamed El-Erian (FT) Jun 4, 2019
Investors need to wake up to the risk of messier politics contaminating economics.

Why Taiwan poses a threat to the US bond market
Robin Wigglesworth (FT) Jun 4, 2019
Taiwanese insurers hold about 14% of longer-term US corporate debt.

Washington’s Anti-Growth Turn
WSJ Jun 4, 2019
Policies matter, and they’re changing for the worse in both parties.

Trade Deal or No Deal
WSJ Jun 4, 2019
After Trump reneged on Mexico, why should the U.K. trust him?

Magical Monetary Theory
John Greenwood and Steve H. Hanke (WSJ) Jun 4, 2019
Japan disproves the trendy notion that governments can run unlimited deficits in their own currencies.

It’s tempting for the Fed to move slowly. That would be a grave error.
Lawrence Summers (WP) Jun 4, 2019
The Fed should cut interest rates by 50 basis points over the summer and by more, if necessary, in the fall.

Asia stocks court election and currency fights
Gary Kleiman (AT) Jun 4, 2019
Region gears up for bilateral trade and financial confrontation, worsening growth and banking sector prospects

The Fed Has No Choice But to Return to Ultra-Low Interest Rates
Thorsten Polleit (Mises Wire) Jun 4, 2019
Markets are already betting that the Fed will re-commit itself to more stimulus and more ultra-low rates. The markets are probably right.

Will bail-in work in a crisis?
Brian Caplen (Banker) Jun 4, 2019
A great deal of faith has been placed in bail-in bonds but so far there is little evidence of how they might operate in a crisis.

Africa’s industrialization under the Continental Free Trade Area
Landry Signé (Brookings) Jun 4, 2019
The African Continental Free Trade Area came into force on May 30, making Africa home to the world's largest free trade area since the establishment of the World Trade Organization. Landry Signé explains the significance of the agreement and how it will help Africa become globally competitive.

The USMCA, Newly Jeopardized, Was Never a Free Trade Agreement
Gary Clyde Hufbauer and Euijin Jung (PIIE) Jun 4, 2019
Prospects for congressional ratification of the US-Mexico-Canada Agreement (USMCA) have dimmed as a result of President Donald Trump’s threat on May 30 to impose steadily escalating tariffs on Mexico. Trump vowed to impose those tariffs over Mexico’s alleged failure to stem immigration into the United States. But there is little question that such a step would run counter to the USMCA, which was signed last year.

Commerce Department's Proposal to Curb Currency Manipulation Uses the Wrong Tool
C. Fred Bergsten (PIIE) Jun 4, 2019
President Donald Trump has repeatedly deplored currency manipulation by US trading partners—the practice of weakening one’s own currency to improve trade balances by making exports cheaper and imports more expensive.

China's Private Firms Continue to Struggle
Nicholas R. Lardy (PIIE) Jun 4, 2019
The plight of China’s private firms, which produce about two-thirds of China’s GDP, has received widespread attention, as private credit to these firms has lagged behind the flow to state-owned enterprises. [1] The latest data show that this trend has continued despite pledges by Chinese leadership to support lending to private sector enterprises.

Uncertainty in ending extreme poverty
Fabian Mendez Ramos (Brookings) Jun 4, 2019
Whereas sustained economic growth is considered the primary driver of poverty alleviation, the different ways in which growth interacts with changes in income inequality mean that the future of poverty reduction is highly uncertain.

Look Who’s Winning the U.S.-China Trade War
Noah Smith (Bloomberg View) Jun 4, 2019
Third countries such as Vietnam stand to benefit as production leaves China.

The Brexit Wrecking Ball Hits the High Street
Andrea Felsted (Bloomberg View) Jun 4, 2019
The delay in the divorce date should have given shops a break. Then the Tory leadership challenge happened.

If U.S. Economy Hits Trouble, It Won’t Be Like 2008
Conor Sen (Bloomberg View) Jun 4, 2019
The anxiety might feel familiar, but the threat this time comes from tariffs, not excess investment in any sector.

China Is Winning the Battle of Brains With the U.S.
Henry Brands (Bloomberg View) Jun 4, 2019
America needs to reboot the university programs and think tanks that helped win the Cold War.

Low Bond Yields Won't Save Stocks Like in 2016
Komal S Sri-Kumar (Bloomberg View) Jun 4, 2019
Unlike now, inflation rates three years ago were signaling a stronger economy ahead.

Trump Is Slowing US Economic Growth
Robert J. Barro (Project Syndicate) Jun 4, 2019
The current state of US macroeconomic policymaking across four key areas does not bode well. Although the 2017 tax legislation has done its job in promoting faster growth, rising trade tensions, persistent regulatory burdens, and a lack of investment in infrastructure all threaten to limit the US economy's potential.

Financial revolution in Republican China, 1900-1937
Debin Ma (VoxEU) Jun 4, 2019
Over the last four decades, China’s economy grew at an astonishing pace while remaining firmly in the grip of an authoritarian political regime, thereby upending long-settled economic models. But an earlier era in Chinese history tells a different story. This column examines the period from 1900 to 1937, when rules governing the treaty port of Shanghai attracted major Western banks (and sheltered the Bank of China’s Shanghai branch) by curbing or side-stepping state power. This is a rare glimpse into a period of Chinese history in which financial practices were largely freed from the constraints of authoritarian rule.

Trump’s Top Economist Makes a Timely Exit
John Cassidy (New Yorker) Jun 4, 2019
Last Thursday, Donald Trump ignored the advice of some of his senior advisers and threatened to impose tariffs of up to twenty-five per cent on imports from Mexico. The next day, Kevin Hassett, the chairman of the Council of Economic Advisers, sent Trump a resignation letter.

Trump’s Mexico tariffs will damage both sides
FT View Jun 5, 2019
López Obrador is right to avoid threatening retaliatory measures.

Regulation nation: is a surplus of rules strangling US business?
Gillian Tett (FT) Jun 5, 2019
The case against bureaucratic overreach is a strong one — whether lawyers will heed it is a different matter.

Emerging markets are victims of a new world order
John Plender (FT) Jun 5, 2019
Donald Trump has destroyed much of the institutional underpinning of globalisation.

The looming 100-year US-China conflict
Martin Wolf (FT) Jun 5, 2019
Donald Trump’s unnecessary fight for domination is increasingly being framed as a zero-sum game.

Solutions to the US-China trade war
Rana Mitter (FT) Jun 5, 2019
A look at Japan’s pivotal role and how articulating intentions is key to avoiding conflict.

The Fed Can’t Bail Trump Out
George Melloan (WSJ) Jun 5, 2019
‘Monetary stimulation’ didn’t help Obama and won’t now counter reckless spending and trade wars.

Asian countries fear China, but many won’t side with America
Economist Jun 5, 2019
Although they dislike Xi Jinping’s hectoring, they have qualms about Donald Trump, too.

The long-term decline in bond yields enters a new phase
Economist Jun 5, 2019
What will happen when interest rates eventually start to rise again?

How the German Economy Is Falling Behind
Michael Heise (Globalist) Jun 5, 2019
With growth deteriorating, the day of reckoning for Germany’s economic policymakers is approaching fast.

New U.S.–Mexico Tariffs Would Add to Economic Costs
Libby Cantrill and Tiffany Wilding (PIMCO) Jun 5, 2019
New U.S. tariffs on Mexico would add to the direct economic costs of the string of tariff hikes enacted during this administration.

Congress’s Weakness on Tariffs Is Its Own Fault
Noah Feldman (Bloomberg View) Jun 5, 2019
Unhappy senators should roll back the extraordinary emergency power they placed in the hands of the president.

Ask Not What the Fed Will Do, But Whether It Will Work
Mohamed Aly El-Erian (Bloomberg View) Jun 5, 2019
The central bank is being pressured to solve problems far beyond monetary policy.

U.S.-China Trade War Raises Risks of a Real One
Noah Smith (Bloomberg View) Jun 5, 2019
When economic ties fray, military confrontation becomes more likely.

India Going Cashless Could Be a Model for the World
Andy Mukherjee (Bloomberg View) Jun 5, 2019
Companies from Facebook and Tencent to PayPal and Walmart have a keen interest in the outcome of this experiment.

The ECB Is Looking Increasingly Powerless
Ferdinando Giugliano (Bloomberg View) Jun 5, 2019
With forward inflation measures close to lows, Frankfurt has a problem. Draghi should be generous on cheap bank loans and maybe cut deposit rates.

Sunset for Oil Is No Longer Just Talk
David Fickling (Bloomberg View) Jun 5, 2019
Shell, at least, is putting its money where its mouth is. The supermajor is running down reserves and paying out cash.

The U.S. and China Will Probably Work It Out
William C Dudley (Bloomberg View) Jun 5, 2019
Trump needs a trade deal to ensure a healthy economy.

The Best Tools for Fighting Recession Run on Autopilot
Noah Smith (Bloomberg View) Jun 5, 2019
By the time Congress gets around to spending more on fiscal stimulus, it’s almost too late.

There's Only One Way to Fix Italy's Mess
Ferdinando Giugliano (Bloomberg View) Jun 5, 2019
The weak coalition is in no position to decide whether to appease Brussels or confront it. A new election should provide some much needed clarity.

Financing Climate-Smart Investment in Africa
Alzbeta Klein (Project Syndicate) Jun 5, 2019
At a time when climate change is making catastrophic weather events more common, boosting resilience in developing countries has become imperative. Success will depend largely on mobilizing private investment in climate-smart projects.

Britain’s Renewal After Trump and Brexit
Gordon Brown (Project Syndicate) Jun 6, 2019
US President Donald Trump's long-postponed state visit to the United Kingdom has now come and gone. He leaves in his wake a Britain that is consumed not only by a stalled Brexit and the unending debate about it, but also by a far more profound crisis of identity that Brexit has exposed and aggravated.

As Populists Rise, Latin America’s Economies Will Fall
Kenneth Rogoff (Project Syndicate) Jun 5, 2019
In the space of a year, populists with autocratic tendencies have taken office in Mexico and Brazil, and laid the groundwork to return to power in Argentina. With the three largest economies in Latin America destined for further mismanagement, the prospects for growth in the region are dim.

What to Do About China?
J. Bradford DeLong (Project Syndicate) Jun 5, 2019
By attempting to "get tough" with China, US President Donald Trump's administration is highlighting the extent to which America's star has fallen this century. If the US ever wants to reclaim the standing it once had in the world, it must become the country it would have been if Al Gore had won the 2000 presidential election.

Industry/Policy View: The Impact of US-China Trade Tensions
Eugenio Cerutti, Gita Gopinath & Adil Mohommad (VoxChina) Jun 5, 2019
US-China trade tensions have negatively affected consumers as well as many producers in both countries. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged. While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019.

How Are China-Dependent Economies Performing?
Michael Pugliese and Nick Bennenbroek (WF) Jun 5, 2019
Fears about a deceleration in the Chinese economy continue to weigh on financial markets. When looking at GDP growth in China-dependent economies, growth has not fallen off a cliff, but it is the slowest since 2009.

Debt and populism test Italy’s bedraggled polity
FT View Jun 6, 2019
Trust between Brussels and the government in Rome is draining away.

Testing time for Fed’s safety net for global equities
Katie Martin (FT) Jun 6, 2019
Without a deterioration in Friday’s data, the case for rate cuts could unravel.

Foreign investors should be wary of the India story
Henny Sender (FT) Jun 6, 2019
Victory for Modi comes just as indicators show a dramatic slowing in the economy.

Zambia lured by resource nationalism siren song
Peter Leon (FT) Jun 6, 2019
The government should take note of historical lessons.

Investors are counting on Powell to save them
Gillian Tett (FT) Jun 6, 2019
The hope is that the Fed chair will do whatever it takes to avoid a downturn.

EU must rationalise rules on national deficits
Alberto Bagnai (FT) Jun 6, 2019
The system lacks transparency and stokes populism.

Finland seeks to lead the silver economy charge
Richard Milne (FT) Jun 6, 2019
As Nordic economy faces an ageing population, its businesses seek an opportunity.

The US Economy’s Dirty Secret
Todd G. Buchholz (Project Syndicate) Jun 6, 2019
Relatively strong US growth amid sluggishness elsewhere is not what economics textbooks would predict. But persistently low interest rates and weak inflation bring multiple benefits to American firms and consumers, while the adverse impact of the global slowdown on US exports should not be overstated.

Why Worry So Much About Recessions?
Narayana Kocherlakota (Bloomberg View) Jun 5, 2019
The Fed should focus on whether the economy is fulfilling its potential.

Who Will Survive the Trade War?
Margaret O'Mara (NYT) Jun 6, 2019
History shows that big businesses profit most when tariffs reign.

On China Trade, Trump Is All Business
Hector Barreto (WSJ) Jun 6, 2019
His entrepreneurial instincts drive his hardball approach.

America is deploying a new economic arsenal to assert its power
Economist Jun 6, 2019
That is counterproductive and dangerous.

The technology industry is rife with bottlenecks
Economist Jun 6, 2019
The US-China tech cold war is making companies more aware of bottlenecks than ever.

Currency Manipulation Continues to Decline
Christopher G. Collins and Joseph E. Gagnon (PIIE) Jun 6, 2019
Currency manipulation, the practice of countries acting to weaken the value of their currency in order to affect their trade balance, fell in 2018 to its lowest levels since 2001. Last year, only Singapore, Norway, and Macao met the criteria for manipulation put forth by Bergsten and Gagnon (2017).

How will we know when a recession is coming?
Ryan Nunn, Jana Parsons, and Jay Shambaugh (Brookings) Jun 6, 2019
While the U.S. labor market is strong, history tells us that the good times never last. Experts from the Hamilton Project at Brookings explain why a rapid increase in the unemployment rate may be the simplest, most accurate indication that a recession has arrived.

Don’t Ask the Fed to Manipulate the Dollar
Bloomberg View Jun 6, 2019
The central bank’s job is already hard enough.

Israel’s Economic Miracle
Tyler Cowen (Bloomberg View) Jun 6, 2019
Most visitors come for the history, but Israel’s economy is also something to marvel at.

India, the World's Model Central Bank? Just Maybe
Daniel Moss (Bloomberg View) Jun 6, 2019
The RBI has acted swiftly to address slowing growth and offers a clear, consistent message. That’s a lesson to its global peers.

The Fed May Have No Choice But to Bail Out Trump
Timothy A Duy (Bloomberg View) Jun 6, 2019
The stage is set for an interest-rate cut, but probably not until September.

The Next Trade-War Casualty May Be the M&A Market
Tara Lachapelle (Bloomberg View) Jun 6, 2019
Would you do a megadeal now?

Helping Africa’s Smallholders Feed the World
Usman Ali Lawan (Project Syndicate) Jun 6, 2019
Sustainable Development Goal 2 – which aims to end hunger by 2030 – is achievable. But it will require a commitment from both governments and the private sector to help rural farmers shift to sustainable – and profitable – agricultural practices.

Identity, beliefs, and political conflict
Nicola Gennaioli and Guido Tabellini (VoxEU) Jun 6, 2019
In recent decades, the political systems of advanced democracies have witnessed large changes, often in reaction to economic shocks due to globalisation and technology. Based on insights from the social psychology of groups, this column argues that when large shocks hit, new cleavages in society emerge, captured by new conflicting groups. This causes individuals to shift their beliefs about themselves and others in the direction of the new social stereotypes. If globalisation clusters society in a nationalist versus cosmopolitan cleavage instead of the traditional left versus right, this may dampen demand for redistribution despite potential increases in income inequality.

NAFTA: Next American Fat Tariff Assessment
Tim Quinlan and Shannon Seer (WF) Jun 6, 2019
U.S. and Mexico officials failed to reach a deal on tariffs at the conclusion of yesterday's trade talks. In this special report, we evaluate the importance of Mexico as a trading partner to the United States and consider potential implications for this new front in the trade war.

The Fed should be careful of a ‘Powell put’
FT View Jun 7, 2019
US interest rates must reflect growth and inflation, not market jitters.

Draghi keeps a lid on ECB’s magic fairy dust
Katie Martin (FT) Jun 7, 2019
Investors learn the hard way that central banks respond to evidence, not market whims.

‘Carnage’ in loan market will be worse if the Fed cuts
Joe Rennison (FT) Jun 7, 2019
A decade of ultra-loose monetary policy has caused an extraordinary lending boom.

Xi tiptoes through trade war vegetable patch
Gordon Watts (AT) Jun 7, 2019
Clash of cultures wrecked Sino-US deal between China’s head of state and President Trump.

Tariffs on Mexican Products Will Not Curb Migration from Guatemala, Honduras, and El Salvador; Prosperity Will
Anabel González (PIIE) Jun 7, 2019
President Donald Trump’s threat to impose across-the-board tariffs on Mexican imports is aimed at reversing alleged Mexican inaction in stopping the flow of migrants from Guatemala, Honduras, and El Salvador—known as the Northern Triangle—into the United States.

Consumption Is Ballooning in Asia. Can the Region Balance Sustainability and Growth?
Chen Chen Lee (Brink) Jun 7, 2019
Sustainability is emerging as a critical challenge for business in Asia, as rising consumerism threatens the region’s ability to meet its Paris Agreement targets for climate change.

Europe Needs a Smarter Kind of Fiscal Discipline
Bloomberg View Jun 7, 2019
Punishing Italy plays right into the populists’ hands.

Where’s the Modi Miracle?
Mihir Sharma (Bloomberg View) Jun 7, 2019
India’s no longer the world’s fastest-growing big economy. The government’s overconfidence is one reason why.

Italy's Scary Parallel Currency Risk
Ferdinando Giugliano (Bloomberg View) Jun 7, 2019
Parliament’s proposals on so-called mini-BOTs aren’t really a credible threat to the euro, but you can see why they make investors anxious.

Cryptocurrency Winners Are Starting to Emerge
Aaron Brown (Bloomberg View) Jun 7, 2019
There’s still a lot of dead wood that needs jettisoning, but a few digital coins are gaining traction.

Pulling Sudan Back from the Brink
Ishac Diwan (Project Syndicate) Jun 7, 2019
In the wake of a military crackdown on June 3 that left over 100 peaceful protesters dead, Sudan is sliding toward anarchy. With trust between the military and the protesters destroyed, external mediators are vital to secure a transitional agreement reflecting compromises by both sides.

Why Universal Basic Income Is a Bad Idea
Daron Acemoglu (Project Syndicate) Jun 7, 2019
One should always be wary of simple solutions to complex problems, and universal basic income is no exception. The fact that this answer to automation and globalization has been met with such enthusiasm indicates a breakdown not in the economic system, but in democratic politics and civic life.

Is Womenomics Working?
Kathy Matsui (Project Syndicate) Jun 7, 2019
Across the developed world, Japan stands out as the country facing the highest risk that demographic trends will cut into future growth. To prevent a disastrous decline in living standards, the country must double down on its efforts to achieve gender parity and inclusion in all economic sectors.

The imbalances of the Bretton Woods System between 1965 and 1973
Michael Bordo (VoxEU) Jun 7, 2019
Growing international imbalances are widely understood to have led Nixon to end gold convertibility in 1971. This column argues that a key fundamental underlying these imbalances was the rising inflation in the US, in turn created by US macroeconomic policies. President Nixon blamed the rest of the world instead of correcting US monetary and fiscal policies. It also identifies similarities between the imbalances of the 1960s and 1970s and those of today, especially regarding fiscal policies and the use of tariff protection as a strategic tool.

Fiscal sustainability in Japan: What to tackle
Selahattin Imrohoroglu, Sagiri Kitao and Tomoaki Yamada (VoxEU) Jun 7, 2019
Japan leads the advanced economies in the speed and magnitude of demographic ageing and has the highest debt-to-output ratio. Rising social insurance expenditures are projected to far outpace revenues and to create a fiscal burden. This column presents sobering projections for Japanese government debt in the absence of reform, but argues that a combination of policies, including policies to encourage greater labour participation by women and to enhance productivity, could achieve sustainability.

The price of capital goods: A driver of investment under threat
Weicheng Lian, Natalija Novta, Evgenia Pugacheva, Yannick Timmer and Petia Topalova (VoxEU) Jun 7, 2019
The dramatic decline in the relative price of capital goods has been an important – but overlooked – driver of real investment. This column analyses cross-country price data to establish that deepening trade integration and productivity growth have both contributed to this decline. The erosion of support for international trade and sluggish productivity growth may limit further declines in relative prices of capital goods, which could negatively affect real investment rates.

Egypt’s Economy Isn’t Booming, It’s Collapsing.
Yehia Hamed (FP) Jun 7, 2019
Egypt is heading toward a seeming economic recovery, but the living standards of ordinary Egyptians are plummeting as elites line their pockets.

How Brexit Was Radicalized
Aleks Eror (FP) Jun 7, 2019
Though a no-deal Brexit could be a blow to the British, it’s an increasingly mainstream option among Brexit supporters as the debate has escalated.

Happy Anniversary, Economy! (Maybe. Sort of. On Second Thought … )
Jeff Sommer (NYT) Jun 8, 2019
The U.S. economic expansion will be the longest in its history if there is no recession by July 1. But we won’t know for sure for months. Or years.

Disgruntled Democracies
Uwe Bott (Globalist) Jun 8, 2019
Why the problem is far greater than nationalist resurgence.

China and the US are too intertwined to keep up the trade war
George Magnus (FT) Jun 8, 2019
Both sides should step back and seek sectoral and industry specific deals.

G20 meeting should push for debt transparency
Gayle Smith and Masood Ahmed (FT) Jun 8, 2019
Finance ministers and central bankers should adopt principles to support SDGs.

Tech investors must navigate tricky political headwinds
Michael Mackenzie (FT) Jun 8, 2019
S&P 500 driver risks losing its edge from wave of protectionism and tighter oversight.

Britain needs its own Green New Deal
Caroline Lucas (FT) Jun 9, 2019
The country could be a world leader in the clean energy revolution.

How Salvini could blow up the eurozone
Wolfgang Münchau (FT) Jun 9, 2019
If Brussels corners Italy’s government over its fiscal plans, it will resort to dangerous fiscal tricks.

The Fed thinks it is 1995 all over again
Gavyn Davies (FT) Jun 9, 2019
Tariffs raise US inflation but the central bank wants insurance against recession .

Paying for Mexico’s Wall
WSJ Jun 9, 2019
Trump’s use of tariffs as a bludgeon on migrants has economic costs.

Who’s Afraid of the Belt and Road?
Gerard Gayou (WSJ) Jun 9, 2019
The ‘debt trap’ results from Beijing’s blunders. It would be a lousy strategy for global influence.

No appetite for a ‘new Cold War’ in Asia
Amy King (EAF) Jun 9, 2019
The real take-away from the Shangri-La Dialogue is that there is no appetite in the region for a “new Cold War” between the United States and China.

OPEC, the Future Is Probably Worse Than You Thought
Julian Lee (Bloomberg View) Jun 9, 2019
OPEC+ is really going to have to bear down on production cuts, and that’s before demand forecasts get slashed again.

What the Market Rebound Really Means
Mohamed Aly El-Erian (Bloomberg View) Jun 9, 2019
The best week of the year for U.S. equities leaves many questions open but suggests a clear strategy ahead.

Firm growth and the development gap
Marcela Eslava, John Haltiwanger and Alvaro Pinzón (VoxEU) Jun 9, 2019
A key difference between more and less developed countries lies in the speed at which the average business grows over its life cycle. This column compares manufacturing firms in Colombia and the US, and concludes that average life cycle growth differences across countries with diverging income levels are largely driven by the superstars and the worst performers. Relative to the US, Colombia presents an overwhelming prevalence of microestablishments, a deficit of superstar plants, and less strict market selection pressure for underperforming plants.

Businesses cannot ignore the US-China cold war
FT View Jun 10, 2019
Multinational companies have most to lose from a bifurcated world.

Machine learning revolution is still some way off
David Stevenson (FT) Jun 10, 2019
Advances are likely to start small and creep up on the industry.

Italy can no longer afford to play games with Brussels
Martin Sandbu (FT) Jun 10, 2019
A commission that feels it met Rome halfway last time will not want to show leniency now.

A Top Global Finance Meeting Loses Its Relevance
Daniel Moss (Bloomberg View) Jun 10, 2019
Ministers mouth the right words, but aren’t empowered to solve what really ails the economy.

How to Clean Up the Belt and Road
Daniel R Russel (Bloomberg View) Jun 10, 2019
If China’s leaders are serious about reform, there are several things they can do to cut down on corruption, waste and local anger.

Wall Street Outguns Europe’s Banks, Again
Elisa Martinuzzi (Bloomberg View) Jun 10, 2019
Transaction banking should be a boon for Europe’s beleaguered financial industry. But the battle could see more casualties.

Europe Must Fix Its Fiscal Rules
Olivier Blanchard (Project Syndicate) Jun 10, 2019
In an environment of persistently low interest rates and below-potential output, economic policymakers must rethink the prevailing approach to public debt. For the eurozone, this means creating a common budget, or at least overhauling the fiscal rules that have tied member-state governments' hands for no good reason.

The Rule of Law Needs a Soul
Antara Haldar (Project Syndicate) Jun 10, 2019
The hubris of much liberal legal thinking has been to assume that once a rule-of-law regime is in place, it will be almost perpetually self-sustaining. But the mounting constitutional disarray in the Anglo-American world points to fundamental flaws in the prevailing liberal theory of institutions.

Blame US Trade Policy for Sky-High Drug Prices
Jayati Ghosh (Project Syndicate) Jun 10, 2019
Skyrocketing drug prices were a major issue in the 2016 US presidential campaign, and the Trump administration has since announced measures to bring them down. Why, then, is the administration also pushing for intellectual-property rules that give pharmaceutical giants even more price-gouging power?

Unconventional Thinking about Unconventional Monetary Policies
Barry Eichengreen (Project Syndicate) Jun 10, 2019
Defenders of central-bank independence argue that quantitative easing should have been avoided last time and is best avoided in the future, because it opens the door to political interference with the conduct of monetary policy. But political interference is even likelier if central banks shun QE in the next recession.

On the growing use of local currencies in Japanese trade within Asia
Takatoshi Ito, Satoshi Koibuchi, Kiyotaka Sato and Junko Shimizu (VoxEU) Jun 10, 2019
Japan exports to neither advanced nor Asian countries in yen, as would be expected. Using questionnaire data, this column shows why Japanese exporters tend to choose destination currencies in their exports to advanced countries and why the US dollar, rather than the yen, is more often used in their exports to Asia. It also presents new evidence that the share of local currency has recently increased markedly, while that of the US dollar has declined, in Japanese exports to Asia.

Growth is lighting the economy’s hidden corners
Sarah O'Connor (FT) Jun 11, 2019
We are learning that unemployment statistics can hide a lot of pain in a labour market.

Debt markets are pricing in a real risk of ‘Quitaly’
Marcello Minenna (FT) Jun 11, 2019
Credit default swap prices suggest investors are weighing Italy’s exit from the eurozone.

Key currency test looms for unshockable markets
Katie Martin (FT) Jun 11, 2019
Investors have shrugged off a series of significant developments but challenges lurk.

Corporate defaults are picking up across Europe
Robert Smith (FT) Jun 11, 2019
What traders call ‘credit events’ are no longer an infrequent occurrence.

Trump’s Trade War Has Wall Street Forecasts Frozen in Place
Stephen Grocer (NYT) Jun 11, 2019
With zero certainty about what lies ahead, analysts are standing pat on earnings forecasts. If they start to cut targets, stocks could be in for a dive.

Unlikely engine for Thai economic growth
Peter Janssen (AT) Jun 11, 2019
State Railway of Thailand, the kingdom's most indebted and hidebound state enterprise, will drive the new elected government's economic failure or success.

Wall Street and Trump: Two Erratic Forces, Acting in Sync
Alexei Bayer (Globalist) Jun 11, 2019
U.S. stock prices have exhibited a pattern of behavior as erratic as that of the U.S. commander in chief.

How “Prosper Africa” Can Help Fulfill the Promise of the Africa Continental Free Trade Area
W. Gyude Moore (CGD) Jun 11, 2019
On sidelines of the annual summit of the US Corporate Council on Africa in Maputo, Mozambique, US Commerce Secretary Wilbur Ross is set to provide the details of the new US-Africa policy, Prosper Africa. This new initiative seeks to accelerate two-way investment and trade with Africa as a way to advance the United States’ competitive advantage. The place and timing of this announcement, while coincidental, could not be any more propitious.

China Risks, Unlike Mexico Tariffs, Aren’t Vanishing
John Authers (Bloomberg View) Jun 11, 2019
The negative attitude toward Chinese assets continues. Plus, book club news, value investors’ dilemma and frontier markets.

Boris Johnson Is Underpriced By the Financial Markets
Marcus Ashworth (Bloomberg View) Jun 11, 2019
Sterling could well get a lift if the former Mayor of London becomes prime minister. International investors want clarity before they return to the U.K.

Oil's Next Great Deflationary Force: Taxes
Liam Denning (Bloomberg View) Jun 11, 2019
Countries are starting to compete to attract investment.

The Case for Combining Passive and Active Investing
Barry L Ritholtz (Bloomberg View) Jun 11, 2019
It all comes down to matter of balance.

What’s Warren Buffett Up to in Europe?
Tara Lachapelle and Marcus Ashworth (Bloomberg View) Jun 11, 2019
Borrowing in euros and pounds is a smart move these days. For Berkshire Hathaway, could it also be the precursor to an overseas deal?

China’s Likely to Lose a Tech Cold War
Michael Schuman (Bloomberg View) Jun 11, 2019
Even if its companies can achieve self-sufficiency, that doesn’t mean they’ll be able to compete globally.

Can Global Rules Prevent National Self-Harm?
Dani Rodrik (Project Syndicate) Jun 11, 2019
Most policy mishaps in the world economy today – as in the case of US President Donald Trump’s tariffs – occur as a result of failures at the national level, not because of a lack of international cooperation. And, with the exception of two types of cases, countries should be allowed to make their own mistakes.

Halting Latin America’s Economic Slide
Mauricio Cárdenas (Project Syndicate) Jun 11, 2019
Economic growth in Latin America has decelerated, living standards have stagnated, and a return to poverty is a real possibility for much of the region’s emerging middle class. To avoid this worrisome scenario, the region urgently needs to increase investment in three priority areas.

America’s Unusual Recovery is Now Also its Longest
Mohamed A. El-Erian (Project Syndicate) Jun 11, 2019
After overcoming significant political and economic headwinds during the past decade, the US economy now appears to have undergone its longest sustained expansion in history. Yet, behind the data showing historically low unemployment and long-awaited wage growth lie vulnerabilities that cannot be ignored.

Faith-Based Finance
Gillian Tett (FA) Jun 11, 2019
How Wall Street became a cult of risk.

Globalization’s Wrong Turn
Dani Rodrik (FA) Jun 11, 2019
And how it hurt America.

Trade War Profit Pressure: Which Industries Are Most at Risk?
Jay H. Bryson, Sarah House, and Shannon Seery (WF) Jun 11, 2019
With approximately 45% of Chinese goods now subject to a 25% tariff, the complete avoidance of additional costs due to tariffs looks unfeasible for most industries. In this note, we calculate industry exposure to the most recent round of tariffs on Chinese goods as well as the exposure if 25% tariffs are extended to the remaining imports from China.

The Woodford case highlights a global risk
FT View Jun 12, 2019
Rules need tightening on open-ended funds holding illiquid assets.

US-China trade war risks global technology split
FT View Jun 12, 2019
Decoupling will not support American security or economic interests.

For a fistful of mini-BOTs, Italy risks falling into an old trap
Rebecca Spang (FT) Jun 12, 2019
This is not the first time a cash-strapped polity has sought to monetise an unlikely asset.

HK risks becoming pawn in trade war with extradition bill
Tom Mitchell (FT) Jun 12, 2019
Trump could use controversial law as excuse to revoke city’s special commercial status.

Why Japan isn’t afraid of robots
Gillian Tett (FT) Jun 12, 2019
The country leads the world in robotics – and thinks automation will lead to efficiency gains.

Europe must make common cause in China dealings
Norbert Rottgen (FT) Jun 12, 2019
Competition with Beijing requires a comprehensive overhaul of EU policy.

The great emerging-market growth story is unravelling
Jonathan Wheatley (FT) Jun 12, 2019
Ex-China and India, growth in EM per-capita GDP has slowed significantly since 2015.

Biden Takes On ‘Trump’s Tariffs’
WSJ Jun 12, 2019
The Democrat seems to think protectionism isn’t popular in Iowa.

Four Decades of Economic Wisdom From Martin Feldstein
WSJ Jun 12, 2019
Thoughts on the Reagan White House, inflation, Indian economic reform and America’s debt crisis.

Norway’s Economic Outlook in Seven Charts
IMF Jun 12, 2019
Norway's economy has performed well over the past year, especially compared to its neighbors. It is enjoying low unemployment and a broadly neutral budget, while its economy continues to grow. Given its strong momentum, now would be the ideal time for the country to address long-term challenges, suggests the IMF in its latest assessment of the Norwegian economy. Here are seven charts that tell the story.

Despite Minor Changes in Treasury's Foreign Exchange Report, Major Flaws Remain
Joseph E. Gagnon, Christopher G. Collins (PIIE) Jun 12, 2019
The US Treasury’s recently released report to Congress identifying countries that manipulate their currencies to gain unfair trade advantages reflected welcome and not-so-welcome changes in approach on the issue. But major flaws remain in the Treasury’s criteria, and they blind the department to the very practice it is supposed to combat.

Interest Rate Outlook: Fed Evaluating Risks to U.S. Economy
Tiffany Wilding (PIMCO) Jun 12, 2019
We don’t expect a Fed rate cut in June, but if downside risks to the economy escalate, a 50 basis point cut in July is possible, in our view.

A Weak Euro Is Not Europe’s Main Advantage, Mr. Trump
Leonid Bershidsky (Bloomberg View) Jun 12, 2019
The common currency may be undervalued, but that’s not why the EU wins in trade and tourism.

Another Emerging-Market Crisis May Be Brewing in Asia
Andy Mukherjee (Bloomberg View) Jun 12, 2019
Pakistan has agreed its 13th IMF bailout since the 1980s. Steering a recovery may be a tougher task than winning the world cup for cricketer-turned-PM Imran Khan.

The Three Most Famous Words in Central Banking
Daniel Moss (Bloomberg View) Jun 12, 2019
The BOJ governor's pledge to pep up the economy sounded a lot like his European counterpart's call to do “whatever it takes." If only people believed it would work.

How China's Hidden Debt Is Getting Even Riskier
Anjani Trivedi (Bloomberg View) Jun 12, 2019
Beijing is allowing certain bond proceeds to be used as project capital. The question now is whether investors will get compensated for the risk.

Oil’s 2019 Weakness Has Roots in 2018’s Strength
Liam Denning (Bloomberg View) Jun 12, 2019
BP’s latest annual statistical review reveals the worrisome signs headline demand numbers masked.

The US Economy’s Strange Decade
Larry Hatheway (Project Syndicate) Jun 12, 2019
Weak productivity growth helps to explain the continued robust rates of job creation in the United States, as well as workers’ sluggish wage gains. If left unresolved, the productivity malaise will ensure that the current expansion remains uniquely unbalanced and unhealthy.

Africa’s Gig Opportunity
Olga Morawczynski and David Porteous (Project Syndicate) Jun 12, 2019
By introducing portable benefits for gig workers, African governments and digital platforms can help to power the continent’s future growth. Otherwise, these platforms will lose top talent, countries will miss out on potential tax revenue, and Africa will fail to reap the full benefits of the digital revolution.

Can UBI Survive Financialization?
Lena Lavinas (Project Syndicate) Jun 12, 2019
If a universal basic income is used primarily to service debt and secure new loans, it cannot fulfill its promise as a revolutionary pathway to freedom from the whip of the market. On the contrary, such a financialized UBI would simply leave citizens more indebted and dependent on rentier capital.

The Unintended Consequences of Regulation: Evidence from China’s Interbank Market
Xian Gu and Lu Yun (VoxChina) Jun 12, 2019
Financial regulation can have unanticipated consequences in the financial system. The evidence from China’s interbank market shows that banks tend to use newly introduced and lightly regulated financial instruments to get around regulation during their search for funds. Banks facing greater competition or higher liquidity shortages have more incentives to engage in such activities. Such interbank activities are closely associated with banks’ proprietary trading, suggesting the potential risk of financial contagion.

Technology diffusion and global living standards
Johannes Eugster, Giang Ho, Florence Jaumotte, and Roberto Piazza (VoxEU) Jun 12, 2019
Technology diffusion to emerging markets helps share growth potential across countries and lift global living standards. Using a global patent citation dataset, this column estimates the magnitude and impact of international knowledge and technology diffusion, as well as the role that globalisation has played. In emerging markets, knowledge flows have increased innovation and productivity. Competition from emerging markets benefits global innovation.

Falling Employment Growth, Rising Recession Risk?
Azhar Iqbal and Jen Licis (WF) Jun 12, 2019
Slower employment growth is associated with rising recession probabilities and weaker GDP in the Post-Great Recession era, which often indicate the need for more monetary policy accommodation.

Trump’s abusive trade powers need reining in
FT View Jun 13, 2019
Congress should press ahead with plans to curb presidential discretion on tariffs.

Copper price is being held hostage by macro jitters
Neil Hume (FT) Jun 13, 2019
Trade war and supply angst overshadow strong fundamentals for industrial metals.

Ambitious reforms in Germany are long overdue
Tony Barber (FT) Jun 13, 2019
The grand coalition formula has reached the end of the road.

Why ‘cracking seven’ is a big deal for China’s currency
Hudson Lockett and Robin Harding (FT) Jun 13, 2019
The next significant test for the renminbi will be this month’s G20 meeting in Japan.

China should not remake its bond markets in US image
Daniela Gabor (FT) Jun 13, 2019
To do so would lead to fickle portfolio flows without monetary policy autonomy.

No-deal Brexit would be lunacy wrapped in stupidity
Martin Wolf (FT) Jun 13, 2019
The cost to Britain’s economy and its standing in the world would be immense.

How compatible are democracy and capitalism?
Economist Jun 13, 2019
Economic stress and demographic change are weakening a symbiotic relationship.

Can Modi Translate His Election Mandate Into Real Reform?
Sadanand Dhume (WSJ) Jun 13, 2019
Realizing India’s potential means pursuing lower taxes, privatization and regulatory relief.

Oil Sell-Off Sparks Investment Opportunities
Greg E. Sharenow (PIMCO) Jun 13, 2019
Demand concerns, trade tensions, and strong implied U.S. production are driving an oil sell-off, much like in fourth-quarter 2018, but the complicated backdrop may create investment opportunities.

Modi's Suspect GDP Numbers Have Done Real Damage
Andy Mukherjee (Bloomberg View) Jun 13, 2019
It’s no wonder that Indian balance sheets are stressed if businesses invested based on a 7% growth rate.

China’s Bad Data Can Be a Good Thing
Dinny McMahon (Bloomberg View) Jun 13, 2019
No one believes bank balance sheets are as healthy as they look, but pretending they are serves a worthwhile purpose.

Saving the World Might Mean Accepting Slower Growth
Mark Buchanan (Bloomberg View) Jun 13, 2019
Replacing fossil fuels with renewable energy sources is having an unfortunate side effect: an ever-lower return on investment.

A Recession Signal Is Hidden in U.S. Bond History
Stephen Mihm (Bloomberg View) Jun 13, 2019
Ten-year Treasuries may hold the key to predicting the severity of downturns.

Puncturing the Myth of India
Mihir Sharma (Bloomberg View) Jun 13, 2019
The country won’t reform without a crisis. Well, according to one of the government’s own former advisers, it’s got one.

Depopulation Is Eastern Germany’s Curse
Leonid Bershidsky (Bloomberg View) Jun 13, 2019
Losing people may be at the root of the dissatisfaction that lifts populist forces in Germany’s ex-Communist part.

Brexit and High Wages Are a Poisonous Mix for the Bank of England
Ferdinando Giugliano (Bloomberg View) Jun 13, 2019
Mark Carney’s Bank of England is wary of hiking interest rates while Brexit drags on. But what will it do if fast-rising salaries push up inflation?

Warning: Some of the Market's Vast Liquidity Is a Mirage
Mohamed Aly El-Erian (Bloomberg View) Jun 13, 2019
A star fund manager’s stumble over liquidity is just a beginning. Far more will fail the test when there’s a downturn.

Tariff Man’s Bark Is Worse than His Bite
Anne O. Krueger (Project Syndicate) Jun 13, 2019
By threatening Mexico with punitive tariffs unless it halts the flow of migrants traveling to the United States from Central America, President Donald Trump has done more than inject more absurdity into the news cycle. He has jeopardized the entire global trading system, and severely damaged America's international standing.

Toward People-Centered Growth
Guy Ryder and Richard Samans (Project Syndicate) Jun 13, 2019
Traditionally, boosting growth has been seen as the best way to create job opportunities and raise living standards. But governments should now look at this the other way around: by better equipping their citizens to navigate the world of work, countries can most effectively boost their economic growth and development.

Paying for the Welfare State Without Raising Taxes
Roger E.A. Farmer (Project Syndicate) Jun 13, 2019
Despite the old economic adage that there’s no such thing as a free lunch, there is a way for governments to finance social-welfare programs without imposing a higher burden on taxpayers. National treasuries should establish Social Care Funds that borrow money at low interest rates and invest the proceeds in the stock market.

The 2018 trade war and the end of dispute settlement as we knew it
Chad Bown (VoxEU) Jun 13, 2019
For more than 20 years, the WTO’s dispute settlement system provided an orderly process for countries to resolve trade grievances and keep cooperation going. But in 2018, something broke down. This column, taken from a recent Vox eBook, explores why the inability to resolve underlying problems with the WTO itself deserves some of the blame and derives some potential lessons for a future system of dispute settlement.

Jaw, jaw not war, war: Prioritising WTO reform options
Simon Evenett and Johannes Fritz (VoxEU) Jun 13, 2019
The next G20 Leaders’ Summit risks being overshadowed by the Sino-US Trade War. That needn’t happen as last year G20 Leaders called for reports on options to revive the WTO and are expected to discuss them in Osaka. This column introduces the latest Global Trade Alert report, which shows that current global trade rules don’t deliver and proposes a way forward.

The Bank of Japan’s exchange-traded fund purchases
Tatsuyoshi Okimoto (VoxEU) Jun 13, 2019
Japan’s monetary policy has had to be unconventional in order to address the economic conditions the country has faced. This column assesses the Bank of Japan’s exchange-traded fund purchasing programme, which has been repeatedly expanded in recent years. The purchases have achieved some positive results, propping up stock prices but also increasing real output and inflation. But, given the increased risks the Bank faces as its purchases have grown, the time to unwind has come.

Renminbi weakness is not a sign of manipulation
FT View Jun 14, 2019
Downward pressure on China’s currency is a logical response to US tariffs.

How the US is weaponising the world economy
Tim Harford (FT) Jun 14, 2019
Donald Trump likes to use commerce for coercion, but the tactic could backfire.

Corporate debt dangers still lurk even if Fed eases
Joe Rennison (FT) Jun 14, 2019
Thin spreads for corporate bonds over US Treasuries suggest unwarranted optimism.

When commodities get hooked on derivatives
Ruslan Kharlamov and Heiner Flassbeck (FT) Jun 14, 2019
The distortions will damage the welfare of market participants and society at large.

This Country Recently Became Africa’s Largest Economy. Now It’s Too Big for Businesses to Ignore.
Melissa Cook (Brink) Jun 14, 2019
Nigeria has overtaken South Africa as Africa’s largest economy. Yet among many companies, there is a great deal of nervousness around investing in Nigeria. Nigeria is definitely a challenging place to operate. But ultimately, the nation is too important to ignore.

Why the Fed Shouldn’t Cut Interest Rates Now
Narayana Kocherlakota (Bloomberg View) Jun 14, 2019
There’s a better way to safeguard the economy.

The Growing Risk of a 2020 Recession and Crisis
Nouriel Roubini (Project Syndicate) Jun 14, 2019
Across the advanced economies, monetary and fiscal policymakers lack the tools needed to respond to another major downturn and financial crisis. Worse, while the world no longer needs to worry about a hawkish US Federal Reserve strangling growth, it now has an even bigger problem on its hands.

The US Recovery Turns Ten
Jeffrey Frankel (Project Syndicate) Jun 14, 2019
The best explanation for the current ten-year US economic expansion – tied for the longest since 1854 – is disappointingly simple: the Great Recession was the worst downturn since the 1930s. And if the dates of American business cycles were determined by the rule that most other countries apply, the current expansion would be far from beating the record.

The case for market-based stress tests
John Vickers (VoxEU) Jun 14, 2019
The stability of the financial system depends on the capital of banks and other financial institutions. But the measurement of bank capital depends on regulatory accounting methods, which, as events a decade ago showed dramatically, do not always reflect economic realities in a timely fashion. This column argues that market-based measures should play a greater role in regulatory assessment than is current practice, in particular in stress tests.

Bond markets unconvinced how effective Fed tools are
Michael Mackenzie (FT) Jun 15, 2019
One troubling aspect of declining yields is falling inflation expectations.

The new macroeconomics of populism
David Lubin (FT) Jun 15, 2019
The nationalist urge to keep the world off your back extends to foreign finance.

Tread Carefully in Thailand’s Turbulent Waters
Ronald W Chan (Bloomberg View) Jun 15, 2019
Foreign investors are right to take a wait-and-see attitude amid prolonged political upheaval.

Human development in the age of globalisation
Leandro de la Escosura (VoxEU) Jun 15, 2019
The concept of human development views wellbeing as being affected by a wide range of factors including health and education. This column examines worldwide long-term wellbeing from 1870-2015 with an augmented historical human development index (AHHDI) that combines new measures of achievements in health, education, material living standards, and political freedom. It shows that world human development has steadily improved over time, although advances have been unevenly distributed across world regions.

Europe risks no-deal Brexit by sitting on the fence
Wolfgang Münchau (FT) Jun 16, 2019
The EU should help the next UK prime minister by ruling out another extension.

Should we worry about an inverted yield curve?
Gavyn Davies (FT) Jun 16, 2019
The recession indicator is not perfect but neither can it be ignored.

A Radical Plan to Fix the Dollar
Robert E. Scott (NYT) Jun 16, 2019
Elizabeth Warren and Donald Trump agree on at least one thing: America’s currency problems are hurting workers.

Mario Draghi Saved the Euro. Will His Successor Be Equally Committed?
Jack Ewing (NYT) Jun 16, 2019
The exiting president of the E.C.B. famously vowed to do “whatever it takes” to preserve the eurozone currency. It is unclear whether whoever follows him can be counted on to do the same.

Europe’s Italian Stranglehold
WSJ Jun 16, 2019
The EU could punish Rome for pushing pro-growth policy.

Trump inherited America’s foreign policy riches. He’s frittering them away.
Fred Hiatt (WP) Jun 16, 2019
The reality is that the United States no longer has “all the money.”

China–US trade agreement now harder but not impossible
Wang Yong (EAF) Jun 16, 2019
China and the United States need to find a more balanced approach to address their concerns.

Not All Budget Deficits Are Created Equal
Karl W Smith (Bloomberg View) Jun 16, 2019
A shortfall that arises from tax cuts is easier to address than one that comes from spending increases.

Huawei Can Build a Fine Phone Without U.S. Parts
Leonid Bershidsky (Bloomberg View) Jun 16, 2019
The path to independence for the Chinese company won’t be easy, but it’s a worthy endeavor.

China’s Slowdown Is Fraying Nerves
Adam Minter (Bloomberg View) Jun 16, 2019
A social media uproar over an obscure government decree shows how anxious the country’s most skilled workers are.

China's Food Is Only Going to Get Pricier
Christopher Balding (Bloomberg View) Jun 16, 2019
African swine fever is threatening the country’s pork supply. Rising food prices may become more of a headache than the trade war.

Principles of industrial policy
Reda Cherif and Fuad Hasanov (VoxEU) Jun 16, 2019
The 'Asian miracles' and their industrial policies are often considered as statistical accidents that cannot be replicated. The column argues that we can learn more about sustained growth from these miracles than from the large pool of failures, and that industrial policy is instrumental in achieving sustained growth. Successful policy uses state intervention for early entry into sophisticated sectors, strong export orientation, and fierce competition with strict accountability.

ECB faces crucial test of credibility
Frederik Ducrozet (FT) Jun 17, 2019
Markets demand forceful action from central bank which has been failed by politicians.

Germany’s economic model is not the problem
Marcel Fratzscher (FT) Jun 17, 2019
Political leadership in addressing regional inequality and social polarisation is lacking.

Iran could destabilise the new normal in oil prices
Nick Butler (FT) Jun 17, 2019
If Tehran decides to sue for peace, supply could quickly begin to flow again.

Trade war: will US espionage fears scupper Chinese rail group?
James Politi and Tom Mitchell (FT) Jun 17, 2019
State-owned CRRC faces claims that its rail cars could be used for spying.

Has the Federal Reserve Lost Its Mojo?
Phil Gramm and Thomas R. Saving (WSJ) Jun 17, 2019
The central bank has less control over market interest rates today than at any time in its history.

To Counter Beijing, the Best Option Is the G-7
Anders Fogh Rasmussen (WSJ) Jun 17, 2019
China will likely bypass whatever the U.S. and Europe do to combat it—unless they work together.

The struggling iconic American industry you’re not thinking of
Catherine Rampell (WP) Jun 17, 2019
This sector has long been battered by forces beyond its control.

This nightmare is what Venezuela has become
Michael Gerson (WP) Jun 18, 2019
A better future will require an end to the regime’s cruelty, corruption and incompetence.

Making the Euro Area More Resilient Before the Next Recession Hits
Shekhar Aiyar, John Bluedorn, and Romain Duval (IMF) Jun 17, 2019
Growth in the euro area rebounded earlier this year, but it remains fragile, while risks have increased. Now is a good time for euro area economies to strengthen their ability to weather any future economic difficulties.

Uncertainty over output gap and structural-balance estimates remains elevated
Zsolt Darvas (Bruegel) Jun 17, 2019
The EU fiscal framework strongly relies on the structural budget balance indicator, which aims to measure the ‘underlying’ position of the budget. But this indicator is not observed, only estimations can be made. This post shows that estimates of the European Commission, the IMF, the OECD and national governments widely differ from each other and all estimates are subject to very large annual revisions. The EU should get rid of the fiscal rules that rely on structural balance estimates and use this opportunity to fundamentally reform its fiscal framework.

Government-Guided Funds in China: Financing Vehicles for State Industrial Policy
Tianlei Huang (PIIE) Jun 17, 2019
Beijing’s ambitious Made in China 2025 program continues to draw scrutiny and criticism, despite its dropping the use of that provocative slogan.

Make the Foreign Exchange Report Great Again
Brd Setser (CFR) Jun 17, 2019
The U.S. Department of the Treasury should transform its foreign currency report so it can be used as a tool to combat currency manipulation. This would be an important step toward a more balanced global economy with fewer persistent deficits and surpluses.

Huawei's Doomsday Outlook May Galvanize Home Support
Tim Culpan (Bloomberg View) Jun 17, 2019
A slump in overseas handset sales wouldn’t be all bad news for the Chinese company, which has sought to portray itself as a victim of U.S. bullying.

Democracy Is Not Coming to China Anytime Soon
Tyler Cowen (Bloomberg View) Jun 17, 2019
The current system has delivered rapid growth and relative stability for decades.

This Japanese Puzzle Has Many Moving Parts
Anjani Trivedi (Bloomberg View) Jun 17, 2019
Machinery demand has defied a deteriorating mood among companies, but there's data to support both optimists and pessimists.

Fiscal Money Can Make or Break the Euro
Yanis Varoufakis (Project Syndicate) Jun 17, 2019
The parallel payment system that Greece's government proposed in 2015 would have bolstered the eurozone. By contrast, the Italian government's planned "mini-Treasury bills" would lead to the single currency's demise.

The World Is Running Out of Time
Bertrand Badré (Project Syndicate) Jun 17, 2019
For decades, most of the major economies have relied on a form of capitalism that delivered considerable benefits. But systems do not work in isolation. Eventually, reality asserts itself: global trade tensions reemerge, populist nationalists win power, and natural disasters grow in frequency and intensity.

Hold the Brexit Con Artists to Account
Bernard-Henri Lévy (Project Syndicate) Jun 17, 2019
London's High Court has thrown out a complaint charging that leaders of the UK's Leave campaign ahead of the UK's 2016 referendum lied. That is regrettable, because a hearing would have highlighted the danger that such lies can pose to a democracy.

Euro area budget rules on spending must avoid the pro-cyclicality trap
Sebastian Barnes and Eddie Casey (VoxEU) Jun 17, 2019
Expenditure rules are an attractive way of keeping government spending on a steady path consistent with sustainable growth, but they rely on an estimate of potential output growth. Using data on the European Commission's past forecasts of both potential growth rates and actual output growth rates for 15 member states for the period 2004–2018, this column shows that there is a real danger of faulty potential output estimates leading to procyclical policy.

What option prices tell us about the ECB’s unconventional monetary policies
Stan Olijslagers, Annelie Petersen, Nander de Vette, and Sweder Van Wijnbergen (VoxEU) Jun 17, 2019
The decade since the Global Crisis has seen central banks employ a range of monetary policy tools. This column draws two lessons from the unconventional monetary policy measures employed during the European sovereign debt crisis. First, central banks should communicate clearly – and with sufficient detail – in times of heightened market stress to lower tail risk perceptions in financial markets. Second, policies aimed at changing the relative supply within different asset classes have an impact on perceived crash risk, while measures aimed at easing financing costs of commercial banks do not.

The secret of measuring national wellbeing
FT View Jun 18, 2019
Calls for alternative gauges of socio-economic progress are growing.

India after Modi’s electoral earthquake
Martin Wolf (FT) Jun 18, 2019
His first government did important things, but they were not transformative.

China and new generation shake old order
John Gapper (FT) Jun 18, 2019
AI to electric engines meld with internet infrastructure to open new possibilities.

We need transparency to keep countries out of a debt spiral
Axel Weber (FT) Jun 18, 2019
Lending that lacks accountability contributes to unsustainable burdens.

How does the US-China trade war hurt carmakers?
Alexandra Howlett (FT) Jun 18, 2019
Businesses are being forced to compensate for economic nationalism and high tariffs.

Real estate: post-crisis boom draws to a close
Judith Evans (FT) Jun 18, 2019
After several years of cheap money and soaring prices, there are growing signs of problems in property markets.

The Trump Tweet and the Draghi Euro
WSJ Jun 18, 2019
Devaluation isn’t saving the eurozone and won’t work for the U.S.

The Recovery Is Reaching Its End
Edward P. Lazear (WSJ) Jun 18, 2019
Recent slowing in job growth suggests that labor-market slack is almost eliminated.

Time for Bank of Japan to get aggressive
William Pesek (AT) Jun 18, 2019
BOJ head is slipping into monetary easing mode, but he can and should do far more.

Mexican BMW Factory Shows Us the Benefits of Free Trade
Gary Galles (Mises Wire) Jun 18, 2019
Car companies are building in Mexico rather than the United States, largely because it has freer trade than the United States does with the rest of the world.

Why fintechs can't dent a bright future for Africa's banks
Brian Caplen (Banker) Jun 6, 2019
Banks will not suffer even as fintechs shake up African finance.

GNI-per-head rankings: The sad stories of Greece and Italy
Francesco Papadia (Bruegel) Jun 18, 2019
No other country lost as many positions as Greece and Italy in the rankings of European countries by Gross National Income per head, between 1990 and 2017. The tentative conclusion here is that more complex, country-specific stories – beyond the euro, or the specific euro-area fiscal rules – are needed to explain these individual performances.

A Global Picture of Public Wealth
Jason Harris, Abdelhak Senhadji, and Alexander F. Tieman (IMF) Jun 18, 2019
Our new data on government assets shows that when governments know what they own, they can make better use of the assets for the well-being of all their citizens.

Bank Stress Tests Need to Be More Stressful
Bloomberg View Jun 18, 2019
Don’t be misled by this week’s results.

Get Ready for 1% Bond Yields
Gary Shilling (Bloomberg View) Jun 18, 2019
Inflation is the key to fixed-income assets, and there isn’t any now or expected to be in the future.

The Problem With Stress Tests
Mark Whitehouse (Bloomberg View) Jun 18, 2019
They do not, and perhaps never will, reflect the financial system’s ability to withstand a crisis.

Robots Might Turn Out to Be Great Co-Workers
Noah Smith (Bloomberg View) Jun 18, 2019
Machines won’t necessarily displace people, and they could make humans more efficient.

America’s Middle Class Shows Signs of Life
Michael R Strain (Bloomberg View) Jun 18, 2019
Lamenting the loss of traditional jobs won't help. Promoting the growth of new middle-skill jobs will.

The Fed Has Become a Political Institution Under Trump
Jim Bianco (Bloomberg View) Jun 18, 2019
Stanley Fischer just suggested the central bank raised rates in December to counteract criticism from the White House.

Hong Kong Isn’t Just Another Chinese City
Shuli Ren (Bloomberg View) Jun 18, 2019
The U.S. is also an important patron. Consider the territory’s inflow of dollars, which soared after the global financial crisis.

Europe Must Answer the Climate Call
Christiana Figueres (Project Syndicate) Jun 18, 2019
After leading by example to clinch the Paris climate agreement in 2015, the European Union must step up again as it revisits its initial target for reducing greenhouse-gas emissions. The latest scientific findings show that the world is confronting a climate emergency that demands leadership that only Europe can now provide.

Economic Lessons From Everest
Jim O'Neill (Project Syndicate) Jun 18, 2019
Recent images of long lines at the Mount Everest base camp, and at choke points on the way to the summit, offer a perfect real-world example of mismanaged supply and demand. As in a number of other economic-policy areas, a combination of price adjustments and regulation offers the only way off the mountain.

Don't sacrifice EU competition policy, strengthen trade policy instead
Sébastien Jean, Anne Perrot and Thomas Philippon (VoxEU) Jun 18, 2019
Some policymakers believe that EU competition policy prevents the emergence of industrial champions. The column argues that Europe’s competition policy has successfully contained the rise in concentration and excess profits, and the EU should not follow the US in weakening its approach. Instead, the EU needs to strengthen its trade policy to be more assertive on reciprocity in market access and control of industrial subsidies.

Risk sharing plus market discipline: A new paradigm for euro area reform? A Debate
Jean Pisani-Ferry and Jeromin Zettelmeyer (VoxEU) Jun 18, 2019
The 2017 proposals for euro area reform by a group of seven French and seven German economists triggered a considerable response, much of which featured in a dedicated debate here on Vox. This column introduces an eBook that brings together a selection of these contributions, and in doing so offers a comprehensive, state-of-the art, and accessible overview of the current discussion on euro area reforms.

Should We Worry About American Debt?: Part I
Jay H. Bryson (WF) Jun 18, 2019
Total debt in the United States is significantly higher than it was a few decades ago, but there are few signs of financial stress at present. Is this debt build-up sustainable?

Making Substantial Changes to Our ECB Views
Erik Nelson, Nick Bennenbroek, and Jen Licis (WF) Jun 18, 2019
ECB President Draghi made clear in comments today that the ECB is likely to ease policy relatively soon if the economic situation in the Eurozone does not improve. We do not expect the central bank to restart asset purchases at this time, although a further deterioration in growth and inflation outcomes could change that view.

It could be time for central banks to ditch 2% inflation target
Scott Mather (FT) Jun 19, 2019
Dogged pursuit of goal within existing framework is opening up a range of risks.

The Fed May Give Trump His Rate Cut. The Question Is When.
Jeanna Smialek (NYT) Jun 19, 2019
The Federal Reserve left interest rates unchanged but opened the door to a future rate cut if risks to economic growth intensify.

Launching a Global Currency Is a Bold, Bad Move for Facebook
Matt Stoller (NYT) Jun 19, 2019
The way we structure money and payments is a question for democratic institutions, not technology companies.

Globalization Is Moving Past the U.S. and Its Vision of World Order
Peter S. Goodman (NYT) Jun 19, 2019
As President Trump deploys tariffs as weapons in international disputes, he has ceded the American role as champion of global trade.

Trump tweets on Xi meeting, risk markets soar
David Goldman (AT) Jun 19, 2019
After encouraging report on trade talks, FXI, the popular large-cap China ETF, was up 2.65% and the Dow Jones Industrial average rose 1.30%

How Well Is Hong Kong’s Economy Holding Up?
Alicia García-Herrero (Brink) Jun 19, 2019
As huge protests over a controversial extradition bill continue to roil Hong Kong, its economy is showing signs of slowing. The slowdown comes from a range of components including uncertainties over the United States-China trade war and sluggish external demand.

The Euro Area Falls Short on Fiscal Reform
Jacob Funk Kirkegaard (PIIE) Jun 19, 2019
If Europe’s recent economic travails have delivered one lesson, it is that there is a need for a coordinated fiscal and monetary counterattack in the face of the next downturn. It was thus disappointing that the euro area decisions regarding the new Budgetary Instrument for Convergence and Competitiveness (BICC) fell short of achieving further fiscal integration. Waiting for a “crisis response” to put this capacity in place means that the response will come too late.

At Long Last, a CEO for the Millennium Challenge Corporation
Sarah Rose (CGD) Jun 19, 2019
A full 879 days into the Trump administration—more than 500 with a nominee awaiting confirmation —and following five changes in acting leadership with four different acting agency heads, the Millennium Challenge Corporation finally has a new CEO. The US Senate voted to confirm Sean Cairncross yesterday afternoon.

Stressful speculations about public debt in Africa
Indermit Gill, Kenan Karakülah, and Shanta Devarajan (Brookings) Jun 20, 2019
Earlier this month, the African Economic Research Consortium held its 50th Biannual Plenary and Workshop in Cape Town. The topic was Growing with Debt in African Economies, and the discussions were energetic and educational. We presented a paper at the plenary, a preliminary version of which can be found here.

Central Banks Don't Need New Tricks These Days
Daniel Moss (Bloomberg View) Jun 19, 2019
Mario Draghi’s ideas for further easing aren’t revolutionary, but they could be just the right remedy. That may be a lesson for the BOJ and the Fed.

China’s Lehman Moment Is Drawing Closer
Anjani Trivedi and Shuli Ren (Bloomberg View) Jun 19, 2019
The ripples from the takeover of Baoshang Bank are causing lending in the interbank market to seize up.

How Advanced Economies Are Looking More Like Emerging Markets
Mohamed Aly El-Erian (Bloomberg View) Jun 19, 2019
The European Central Bank dangles the prospect of more stimulus, a short-term approach that makes lasting progress harder.

How to Build a European Banking Champion
Mark Gilbert (Bloomberg View) Jun 19, 2019
Crunch together three banks and you have a plausible rival to the giants of Wall Street.

Donald Trump Has a Point About Mario Draghi and the Euro
Marcus Ashworth (Bloomberg View) Jun 19, 2019
The economic messaging of the president was as hypocritical as ever, but the relative strength of the euro will figure highly in the thinking of the ECB.

Easier Monetary Policies Won't Boost Markets Much Longer
Komal S Sri-Kumar (Bloomberg View) Jun 19, 2019
There are four major reasons why lower rates are likely to only give a short-term boost to stocks and other high-risk assets.

Trump Is Wrong About the Dollar — and So Is Warren
Tyler Cowen (Bloomberg View) Jun 19, 2019
Whether in China, Europe or the U.S., currency manipulation is overrated as both a problem and a solution.

The Lost Spirit of the G20
Javier Solana (Project Syndicate) Jun 19, 2019
As Japan prepares to host its first G20 leaders’ summit later this month, little remains of the open and cooperative spirit that marked the first such gathering in 2008. But although the United States will most likely continue its protectionist drift, other G20 countries should use the occasion to make a clear case for free trade.

The Experts We Need
Andrés Velasco (Project Syndicate) Jun 19, 2019
Policy gurus spend too much time with others like them – top civil servants, high-flying journalists, successful businesspeople – and too little time with ordinary voters. If they could become “humble, competent people on a level with dentists,” as John Maynard Keynes once suggested, voters might identify with them and find them trustworthy.

BigTech Lending as a New Form of Financial Intermediation
Jon Frost, Leonardo Gambacorta, Yi Huang, Hyun Song Shin, and Pablo Zbinden (VoxChina) Jun 19, 2019
BigTech firms, i.e. large technology firms whose primary business is digital services, are entering finance. Their entry into finance started with payments. Increasingly, they have expanded beyond payments into the provision of credit, insurance, and toward savings products, either directly or in partnership with incumbent financial institutions. The main advantage of BigTech firms is their ability to exploit their existing networks and the massive quantities of data generated by their existing business lines. Their entry raises a number of important questions. For instance, what are the economic forces that best explain BigTech’s adoption of finance services? Do BigTech lenders have an information advantage from their access to users’ data or from technological advantages arising from innovations in processing methods, particularly in relation to credit scoring? Are there differences in the performance of firms that receive BigTech credit? Our paper addresses these questions.

Quantifying the impact of leverage ratio regulation on the dollar basis
Gino Cenedese, Pasquale Della Corte, and Tianyu Wang (VoxEU) Jun 19, 2019
Deviations from covered interest parity represent, in theory, an arbitrage opportunity. This column shows that post-crisis, financial regulation may explain why this mispricing persists and cannot be arbitraged away. It also finds that more constrained dealers demand an extra premium from their clients for synthetic dollar funding relative to direct dollar funding, resulting in deviations in covered interest parity.

A radical legal ideology nurtured our era of economic inequality
Sanjukta Paul (Aeon) Jun 19, 2019
Where does economic power come from? Does it exist independently of the law? It seems obvious, even undeniable, that the answer is no.

FOMC Signals Rate Cuts Ahead
Jay Bryson (WF) Jun 19, 2019
The FOMC acknowledges that uncertainties about the outlook have increased. We concur with the seven committee members that think rates will be 50 bps lower at the end of the year.

Investors should relax about build-up in corporate debt
Andrew Davies (FT) Jun 20, 2019
Credit markets have learnt lessons from the structuring mistakes a decade ago.

Ask not will the Fed cut rates but why
Megan Greene (FT) Jun 20, 2019
It is unclear what the central bank can accomplish this late in the economic cycle.

A chance for the Bank of England to rethink its priorities
Huw van Steenis (FT) Jun 20, 2019
This time of transition creates opportunities for finance to serve customers and the economy better.

Don’t trust too much in our central-bank superheroes
Vishnu Kurella (FT) Jun 20, 2019
Recent sell-offs across markets have exposed some alarming fragilities.

US companies should fear China’s consumers more than its government
Peter Vanham (FT) Jun 20, 2019
A consumer boycott could change the landscape forever.

The fight to control Africa’s digital revolution
David Pilling (FT) Jun 20, 2019
Across the continent, the double-edged nature of technology is more and more apparent.

Investors will shun chaotic Brazil until signs of progress
Jonathan Wheatley (FT) Jun 20, 2019
Foreigners have been net sellers of country’s stocks since Bolsonaro’s election.

The National Debt Is Still a Problem
Greg Mankiw (NYT) Jun 20, 2019
A rising budget deficit may make sense in a major war or recession but not now, when the economy is strong.

The Trumpification of the Federal Reserve
Paul Krugman (NYT) Jun 20, 2019
Like it or not, its next move will be political.

A Split Fed Decision
WSJ Jun 20, 2019
The Fed can’t save the economy from bad trade policy.

Empower Regulators to Stop Risky Financial Business
Alan S. Blinder (WSJ) Jun 20, 2019
The FSOC, created by the Dodd-Frank Act of 2010, doesn’t have enough power to do the job right.

Hong Kong reminds us of China’s fragility
Fareed Zakaria (WP) Jun 20, 2019
The trade war with the United States might be one of Xi Jinping’s lesser problems.

June Fed Meeting Dovish Signals Uncertainty Ahead
Tiffany Wilding (PIMCO) Jun 20, 2019
The tone of the FOMC statement and press conference was a notable shift from the May meeting, given uncertainty around the economic outlook.

Six Charts on Canada’s Economic Outlook for 2019
IMF Jun 20, 2019
Canada’s economy is growing at a more sustainable rate following the stellar pace set in 2017—the fastest among G7 economies. Growth is projected to decline to 1.5 percent in 2019 due to a disappointing first quarter for exports, more subdued global growth, and slower pace of consumer spending.

4 Reasons to Oppose a Universal Basic Income
Antony Sammeroff (Mises Wire) Jun 20, 2019
Beyond the usual arguments about incentives and taxes, a Universal Basic Income is a dangerous policy that supercharges the state and threatens to heighten tensions between different groups in society.

Can India Become a $5 Trillion Economy?
Mihir Sharma (Bloomberg View) Jun 20, 2019
Without major reforms, it’s going to take longer than boosters think and result in a more divided country.

Bundesbank Chief Is Ready to Do "Whatever It Takes"
Ferdinando Giugliano (Bloomberg View) Jun 20, 2019
Jens Weidmann has offered reassurances about Draghi’s “Outright Monetary Transactions” program. But you have to wonder whether he’d really use it.

Even the Fed Is Hard-Pressed to Put America First
Daniel Moss (Bloomberg View) Jun 20, 2019
The U.S.’s share of the global economy is shrinking. It’s only natural that trade and slowdowns abroad figure prominently in its monetary policy.

The Case for a Financial Transaction Tax
Michael Edesess (Bloomberg View) Jun 20, 2019
Governments charge user fees for parks, roads and other infrastructure. Why not do the same for the financial system?

Does Focusing on Manufacturing Make Sense for the U.S.?
Karl W Smith and Noah Smith (Bloomberg View) Jun 20, 2019
An industrial renaissance is the centerpiece of presidential candidate Elizabeth Warren’s economic plan.

Hacked Messages Don’t Nullify Brazil’s Corruption Rulings
Mac Margolis (Bloomberg View) Jun 20, 2019
The Carwash judge seems to have been overly enthusiastic, but that doesn’t mean his decisions were unsound.

Only a Strong Jobs Report Will Stop the Fed Now
Timothy A Duy (Bloomberg View) Jun 20, 2019
The central bank would need to be convinced that the recent slowdown in hiring was only temporary for it not to cut rates next month.

Making Migration Work for Everyone
Md. Shahidul Haque (Project Syndicate) Jun 20, 2019
As different categories of migration have begun to overlap, governments have struggled to adapt, pointing to the need for a new framework to manage this key domain of the global economy. With the right norms and mechanisms in place, the far-reaching benefits of immigration can be realized, and the attendant social concerns alleviated.

Why GDP Still Matters
Bjørn Lomborg (Project Syndicate) Jun 20, 2019
New Zealand’s focus on wellbeing, rather than GDP, may have the best of intentions. But if GDP does not increase, the government will have less money for its grand schemes. And compared to what it could have had, the country will have less overall wellbeing, worse environmental performance, and weaker human capital.

From Versailles to the Euro
Robert Skidelsky (Project Syndicate) Jun 20, 2019
The agreement that ended World War I, signed in June 1919, imposed a ruinous debt burden on Germany. A century later, Germany has assumed the role of the eurozone’s self-righteous creditor, fretting about “moral hazard” and ignoring the destabilizing, contagious effects of making debtor countries poorer.

Trade wars in the global value chain era
Emily Blanchard (VoxEU) Jun 20, 2019
The nature of global commerce has changed dramatically over the past 40 years, with the meteoric rise of global value chain trade. This column, taken from a recent Vox eBook, builds on insights from recent research to identify three critical dimensions of global value chain trade that promise to make today’s trade wars more economically costly and more politically complex than previous trade wars.

Should We Worry About American Debt?: Part II
Jay Bryson (WF) Jun 20, 2019
Because the financial health of consumers has generally improved meaningfully in recent years, a downturn in the U.S. economy that is caused by financial stress in the household sector does not seem likely, at least not in the foreseeable future.

Xi Jinping’s Trade Conundrum
Christopher K. Johnson (FA) Jun 20, 2019
Why the Chinese leader isn’t about to back down.

The Jones Act in historical context
Philip G. Hoxie and Vincent H. Smith (AEI) Jun 20, 2019
Critics and supporters of the Jones Act frequently overlook how the 1920 law fits into the history of US maritime policy. Since 1789, Congress has restricted access to coastwise trade—the movement of goods between US ports—to US merchant marine and shipbuilding companies, with preferred duties on US ships, shipbuilding and operating subsidies, and bans on foreign competition. We examine how Congress designed the Jones Act to address the circumstances of the shipping industry in 1920 and where the act fits into the history of US shipping and shipbuilding policy.

Central banks must shun fruitless political games
FT View Jun 21, 2019
Both the ECB and the Fed should ignore bullying from Donald Trump.

Bond markets offer cautious reception to Piraeus
Philip Stafford (FT) Jun 21, 2019
Investors were encouraged by just about the most benign conditions imaginable.

Strategic minerals — the new global battleground
Ian Coles (FT) Jun 21, 2019
US-China trade war has highlighted the challenge of securing rare earth supplies.

Inflation is the biggest threat in a world of sub-zero bonds
Michael Mackenzie (FT) Jun 21, 2019
Clamour for greater fiscal spending will challenge policies that have distorted markets.

Complex political calculus behind Widodo 2.0
Joh McBeth (AT) Jun 21, 2019
Indonesian leader won re-election in a landslide but pushing reform will require deft balancing of fickle allies and galvanized foes in a highly unpredictable parliament.

Trump and Xi talk the talk but can they walk the walk?
Gordon Watts (AT) Jun 21, 2019
The mini-summit at the G20 in Japan might not produce the big breakthrough everyone is hoping for.

The Fed Is Looking for an Excuse to Cut Rates
Joseph Gagnon (PIIE) Jun 21, 2019
Faced with growing risks to the economy, the Federal Open Market Committee (FOMC) of the Federal Reserve System opted on June 19 not to change the target range for the federal funds rate. But a large majority of participants lowered their projections for the funds rate in late 2019 and late 2020 by around half a percentage point. The median projection of the longer-run, or neutral, federal funds rate fell from 2.75 to 2.5 percent.

Winners and losers along China’s Belt and Road
Indermit Gill, Somik V. Lall, and Mathilde Lebrand (Brookings) Jun 21, 2019
The World Bank just released a report on the economics of China’s Belt and Road Initiative (BRI). It provides estimates of the potential of Belt and Road transport corridors for enhancing trade, foreign investment, and living conditions for people in the countries that they connect. The report also tries to answer an important question: What happens to the internal geography of countries when they increase connections with others?

China Looks for a Savior in the Shadows
Shuli Ren, and Anjani Trivedi (Bloomberg View) Jun 21, 2019
Brokerages and other non-bank financial institutions play a key role in funneling credit to the real economy. Beijing needs them.

The Biggest Clue That the World Is Turning Dovish
Daniel Moss (Bloomberg View) Jun 21, 2019
Bank Indonesia has been resistant to easing signals. That it’s now hinting at cuts tells you the global rate cycle is going down, down, down.

The World Can’t Handle a Stronger U.S. Economy
Conor Sen (Bloomberg View) Jun 21, 2019
Emerging markets are pinched enough. The Fed is choosing to sacrifice some domestic growth to prevent a global crisis.

Basic Income’s Backers Complicate Their Cause
Noah Smith (Bloomberg View) Jun 21, 2019
The reasons to support universal government payments are simple.

Blowups (of All Kinds) Are Not What Oil Needs
Liam Denning (Bloomberg View) Jun 21, 2019
A refinery explosion and rising Gulf tensions may drive prices higher, but for the wrong reasons.

Expansions Don’t Die of Old Age
Anatole Kaletsky (Project Syndicate) Jun 21, 2019
Many economists have become convinced that a recession in the United States is now overdue, if not immediately then surely before the 2020 presidential election. But US recessions since the end of World War II have generally resulted from three causes, none of which is currently present.

Zimbabwe Needs Its Own Cryptocurrency
George Lwanda (Project Syndicate) Jun 21, 2019
Simply issuing another fiat currency will not enable Zimbabwe to overcome its ongoing currency crisis, which is rooted in an utter lack of government credibility. The best way to revive economic growth would be to abandon a government-run monetary system altogether.

The G20 in Osaka
Shinzo Abe (Project Syndicate) Jun 21, 2019
Japan is advocating a system of “Data Free Flow with Trust,” an approach that attempts to allow the free flow of data under rules upon which all people can rely. And launching DFFT is just one of four major agenda items that Japan's prime minister has in store for the group's upcoming summit.

As growth slows, the spectre of local-government debt looms once more
Economist Jun 22, 2019
The central government urges spending, but regions are burdened by debt.

Despite turmoil, Brazil is starting to fix its pension system
Economist Jun 22, 2019
Congress has taken charge of the most important economic reform.

Investors’ diversification rules are even simpler than we thought
John Gathergood, David Hirshleifer, David Leake, Hiroaki Sakaguchi, and Neil Stewart (VoxEU) Jun 22, 2019
Investors who choose to build their own portfolios by stock-picking face the choice of how to diversify among stocks. The 1/N heuristic, equalising portfolio shares across stocks held, works well in practice. This column shows that investors who buy stocks often employ a different form of 1/N, dividing purchase value equally rather than maintaining a 1/N allocation. By narrowly framing their buy-day decision, these investors move their portfolios farther away from balance.

US attacks on China’s economy reflect a double standard
Xie Feng (FT) Jun 23, 2019
Labelling it ‘state capitalism’ is unfair and self-interested.

Should the markets fear a Halloween Brexit?
Gavyn Davies (FT) Jun 23, 2019
Boris Johnson is more determined than Jeremy Hunt to force a departure on October 31.

A long economic recovery is not necessarily a better one
Rana Foroohar (FT) Jun 23, 2019
Recessions are a natural part of capitalism, not something to be avoided at all costs.

Doing ‘whatever it takes’ to sustain the eurozone
Wolfgang Münchau (FT) Jun 23, 2019
Mario Draghi’s successor at the ECB will need to handle the next existential crisis.

The Venezuela crisis is going to get much worse — and Trump will get the blame
Jackson Diehl (WP) Jun 23, 2019
The U.S. ban on Venezuelan oil prices may lead to Latin America’s first modern famine.

Japan’s strategic choice at the Osaka G20
Shiro Armstrong (EAF) Jun 23, 2019
The G20 has been less effective during "peace" times but make no mistake, the global trading system is now in crisis.

The Trade War’s Latest Casualty: Trees
Adam Minter (Bloomberg View) Jun 23, 2019
As China buys more soybeans from countries such as Brazil, the risk of deforestation is rising dramatically.

Global Population Could Peak Sooner Than We Think
David Fickling (Bloomberg View) Jun 23, 2019
The UN may be underestimating the pace of decline in African fertility rates.

Central Bankers Score a Record for Investors, for Now
Mohamed Aly El-Erian (Bloomberg View) Jun 23, 2019
The Fed’s encouraging rate decision is not the end of the global uncertainty.

Brexit is an idea for a bygone era
Gideon Rachman (FT) Jun 24, 2019
Global Britain assumes a world that is moving towards free trade, rather than against it.

Volatile times lie ahead in Greece for investors
Thanos Papasavvas (FT) Jun 24, 2019
Tough reforms have a tendency to be difficult under right-of-centre governments.

Macron keeps hope in shrunken eurozone budget plan
Martin Sandbu (FT) Jun 24, 2019
Paris plays the long game after Neo-Hanseatics shot down initial sweeping ambitions.

What to know about Xi at the G-20
Xu Heqian, Zhang Qi and Wu Gang (Caixin) Jun 24, 2019
China’s foreign ministry has now officially announced that Chinese President Xi Jinping will attend the G-20 summit, but there's much more at stake than just trade with the U.S. The ministry’s announcement lacked news of an official state visit to Japan, suggesting Japanese Prime Minister Shinzo Abe’s efforts to normalize relations between China and Japan are unlikely to further materialize, at least for now.

Trump and Xi walking on thin red lines
Gordon Watts (AT) Jun 24, 2019
Compromise might be the missing ingredient in talks to solve Sino-US trade war.

How to Destroy a Civilization
Jeffrey Harding (Mises Wire) Jun 24, 2019
Modern Monetary Theory is the new thing among progressives. But it's been tried by many others, including the Roman dictators who ruined the Roman economy and had Rome falling apart before the barbarian invasions.

China Is Raising Tariffs on the United States and Lowering Them for Everybody Else
Chad P. Bown, Euijin Jung, and Eva (Yiwen) Zhang (PIIE) Jun 24, 2019
Since the start of President Trump's trade war, China has retaliated against US tariffs by raising tariffs on US goods. Less well known is that China has also been lowering rates for everyone else, putting US companies at an even greater disadvantage when trying to sell to China's 1.4 billion consumers. Companies in the United States and elsewhere used to be on a level playing field, facing an average Chinese tariff of 8.0 percent. Now, there is a 14 percentage point difference between the average Chinese tariff US exporters face versus all other exporters. Some US goods are facing even wider differences in duties, like soybeans, farm and fish products, and certain manufacturing products.

US Multinational Corporations Have Shifted Foreign R&D towards Nontraditional Locations
Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen (PIIE) Jun 24, 2019
The location of US multinational corporations' (MNCs) research and development (R&D) outside the United States has undergone a pronounced geographic shift. In 1989, US MNCs conducted 74 percent of all foreign R&D in just five countries—the United Kingdom, Germany, Japan, France, and Canada. By 2014, that number dropped to 43 percent. Many of the new hubs for R&D, which include China, India, and Israel, have only recently graduated from developing country status. US multinationals have created a new intellectual value chain that combines raw engineering talent available in developing countries with specialized knowledge needed to produce innovations in the global market.

China' Private Firms Continue to Struggle: Part II
Nicholas R. Lardy (PIIE) Jun 24, 2019
Private firms in China are continuing to grow at a slower pace than state-owned or state-controlled firms, in part because the Chinese government continues to favor state firms with access to credit, according to the latest economic data. Despite statements by President Xi Jinping and officials in the financial sector that the flow of credit to private firms would increase, little appears to have changed. Thus, the risk is that China's growth will itself slow further.

Tracking China's Debt-to-Equity Swap Program: "Great Cry and Little Wool"
Tianlei Huang (PIIE) Jun 24, 2019
The Chinese financial system is burdened by excessive debts, a condition that the Chinese government has labeled as one of its "three critical battles" to sustain economic growth and stability.

Mario Draghi Can Leave One Last Monetary Gift
Richard Barwell (Bloomberg View) Jun 24, 2019
The ECB is unlikely to cut rates now, but there is a way it could reassure markets for the future.

How to Make the G-20 Matter More
Mohamed Aly El-Erian (Bloomberg View) Jun 24, 2019
The grouping of world leaders has rarely lived up to its potential. A simple fix could change all that.

How Developing Countries Can Achieve Universal Health Coverage
Jörg Reinhardt (Project Syndicate) Jun 24, 2019
In recent years, Vietnam has made remarkable progress toward achieving universal health coverage, thanks partly to the government’s embrace of strategic public-private partnerships. For countries that have struggled to broaden access to quality care, this model may be worth embracing.

On the socially optimal labour share of income
Jakub Growiec, Peter McAdam, and Jakub Muck (VoxEU) Jun 24, 2019
The worldwide decline of the labour share is worrying, because the labour share is thought to be too low. This column attempts to derive an estimate of the socially optimal labour share. The calibration implies that the socially optimal share is 17% higher than the historical average.

The Rise of Global Innovation by US Multinationals Poses Risks and Opportunities
Lee G. Branstetter, Britta Glennon and J. Bradford Jensen (PIIE) Jun 24, 2019
For decades, US multinational corporations (MNCs) conducted nearly all their research and development (R&D) within the United States. Their focus on R&D at home helped establish the United States as the unrivaled leader of innovation and technology advances in the world economy. Since the late 1990s, however, the amount of R&D conducted overseas by US MNCs has grown nearly fourfold and its geographic distribution has expanded from a few advanced industrial countries to many parts of the developing world, creating an innovation system that spans the globe. Like many aspects of globalization, including the offshoring of manufacturing over recent decades, the globalization of R&D raises concerns about US competitiveness and loss of technological leadership. At the same time, the spreading geographic location of innovation presents opportunities for US-based companies if the right policies are adopted to seize them.

Is Slow Still the New Normal for GDP Growth?
John Fernald and Huiyu Li (FRBSF Econ Letter) Jun 24, 2019
Estimates suggest the new normal pace for U.S. GDP growth remains between 1½% and 1¾%, noticeably slower than the typical pace since World War II. The slowdown stems mainly from demographic trends that have slowed labor force growth, about which there is relatively little uncertainty. A larger challenge is productivity. Achieving GDP growth consistently above 1¾% will require much faster productivity growth than the United States has typically experienced since the 1970s.

Trade War Casualty: Why the Days of Cheap Chinese Goods Are Over
K@W Jun 24, 2019
Hundreds of businesses are calling on President Trump to cancel his threat to increase tariffs on Chinese goods. Regardless of the outcome, an ongoing trade war will result in permanent adjustments of supply chains and prices, experts say.

Iran Has a Slow Motion Banking Crisis
Adnan Mazarei (PIIE) Jun 24, 2019
Suffering under Western sanctions and security challenges, Iran faces problems as well from its fragile banking system, which has been languishing for decades. Liquidity and solvency weaknesses pose a growing risk to the country’s financial stability. The sanctions reimposed by the United States in 2018 have heightened these vulnerabilities, but the problems also result from the heavy-handed role of the state, corruption, and the Central Bank of Iran’s failure to regulate and supervise the system. Iran’s ability to avoid a run on its banks is aided by their reliance on liquidity assistance, deposit insurance, and regulatory forbearance from the central bank. Depositors are forced to be patient because they have limited options to invest elsewhere. Iran has thus avoided a full-blown banking crisis. But the situation is not sustainable. Banks remain susceptible to external shocks, which could come from a complete halt to oil exports or war.

The latest Brexit fantasy is the most absurd of all
FT View Jun 25, 2019
Article 24 of the WTO’s underlying treaty is not a solution to no-deal.

I prefer to invest beyond Germany and the euro for now
John Redwood (FT) Jun 25, 2019
Mario Draghi’s plan for fiscal expansion across the EU could spark a crisis.

US risks handing Africa’s e-commerce sector to China
Edward George (FT) Jun 25, 2019
Washington’s efforts to isolate Huawei could shut out US tech giants from the continent.

Saudi Arabia puts off day of reckoning on oil output
David Sheppard (FT) Jun 25, 2019
Riyadh’s policy has inadvertently freed up growing bounty of US barrels.

Why China fell out of love with New York property
Joshua Chaffin and Don Weinland (FT) Jun 25, 2019
After a crackdown on foreign deals by Beijing, Chinese investors have all but disappeared from the market.

India set for a delicate balancing act at the G-20
Saikay Datta (AT) Jun 25, 2019
Terrorism and trade will be key talking points as US secretary of state visits ahead of the G-20 summit.

These 3 high-wire European risks could send the US economy into recession
Desmond Lachman (AEI) Jun 25, 2019
At a time that US stock markets are partying like there is no tomorrow, global bond markets, together with actions by the world’s major central banks, are telling a very different story. They seem to be warning that Europe could soon be experiencing major crises in the United Kingdom and Italy that could precipitate a global economic recession.

Boris or Jeremy: Expect No Present from the EU
Holger Schmieding (Globalist) Jun 25, 2019
Boris Johnson would face a specific handicap in his talks with Brussels. The desire to grant him any concession is virtually zero.

India's Central Bank Autonomy Takes Another Hit
Andy Mukherjee (Bloomberg View) Jun 25, 2019
The wrath of markets awaits governments that don't respect the institution's independence, outgoing Deputy Governor Viral Acharya warned in October.

Putin’s Big Bet on Gold Is Paying Off
Leonid Bershidsky (Bloomberg View) Jun 25, 2019
Russia has been the biggest sovereign gold bug for years. Now others are following in its footsteps.

A 100-Year Austrian Bond at 1.2%. What Fresh Madness Is This?
Marcus Ashworth (Bloomberg View) Jun 25, 2019
Austria is thinking about a repeat of its 100-year issue, after the success of its 2117 offer. The desperate hunt for yield is taking ever stranger turns.

Istanbul Shows How Democracy Is Won
Daron Acemoglu and James A. Robinson (Project Syndicate) Jun 25, 2019
For months, the world looked on as Turkish President Recep Tayyip Erdogan attempted to reverse the outcome of the city's municipal election. But now that Erdogan's party has been defeated once again, his fundamental weakness has been exposed – as has that of populist authoritarians everywhere.

Asia’s Student-Debt Time Bomb
M Niaz Asadullah and Theresa Chan (Project Syndicate) Jun 25, 2019
Fueled by rising economic prosperity and aspirations, the global higher-education sector boomed during the 1990s and 2000s, and, unsurprisingly, student-loan debt has surged worldwide. But Asian countries with high tertiary-education participation rates have proved particularly vulnerable to this trend.

Bad News for the World’s Poorest
Ceyla Pazarbasioglu (Project Syndicate) Jun 25, 2019
The weak state of the global economy conceals an even gloomier story: the worsening plight of the world’s poorest people. Slower growth will make their climb out of poverty even harder, which is why the world must support a range of bold policies to help them.

The End of “Chimerica”
Mark Leonard (Project Syndicate) Jun 25, 2019
By threatening the survival of the Chinese tech giant Huawei, the Trump administration has put an end to speculation about a possible rupture between the United States and China. A full-scale decoupling between the world's two largest economies is now underway, and a new age of zero-sum competition is beginning.

A Grassroots Antidote to Populism
Ismaël Emelien and David Amiel (Project Syndicate) Jun 25, 2019
Across Western democracies, traditional parties are collapsing or assuming unrecognizable new forms, while populists have successfully exploited voter disaffection. But as French President Emmanuel Macron's La République En Marche ! shows, a grassroots progressivism that focuses on voters' real concerns is a viable alternative.

Financial crises and the dynamics of financial de-liberalisation
Orkun Saka, Nauro Campos, Paul De Grauwe, Yuemei Ji, and Angelo Martelli (VoxEU) Jun 25, 2019
Financial crises play a key role in changing existing policies concerning financial markets and institutions. This column provides new evidence for the negative impact of financial crises on the process of financial liberalisation. It also shows, however, that such interventions are only temporary and that the liberalisation process resumes quickly after a crisis. These results support the view that governments use short-term policy reversals as a tool to ease crisis pressures.

Supply chain linkages and financial markets
Yi Huang, Chen Lin, Sibo Liu, and Heiwai Tang (VoxEU) Jun 25, 2019
Recent studies have found that US tariffs on China have led to a significant welfare loss and significant increases in consumer prices in the US. This column, taken from a recent Vox eBook, studies firms’ equity market responses to the various tariff announcements by the US and Chinese governments in 2018 and 2019. The responses demonstrate that the structure of US–China trade is much more complex than the simplistic view of global trade that prompted the trade war, and that the winners and losers in the war depend on firms’ positioning in, and exposure to, the global value chains shared by the two countries.

Will China Save Transatlantic Relations?
Michal Romanowski (YaleGlobal) Jun 25, 2019
Europe’s leaders are divided over China as opportunity or threat

Trump’s Trade War Is the Wrong Way to Compete With China
Tom Donilon (FA) Jun 25, 2019
Focus on renewal, not protectionism.

Should We Worry About American Debt?: Part III
Jay H. Bryson (WF) Jun 25, 2019
The financial health of the business sector is not as strong as it was a few years ago, but the increase in business sector debt in recent years probably will not be the catalyst for recession, at least not in the near term.

Economic Band-Aids Won’t Bring Peace to the Middle East
Muriel Asseburg and Hugh Lovatt (FP) Jun 25, 2019
The Trump administration’s economics-focused strategy to Israeli-Palestinian peace is destined for failure.

Trump and Xi should make political sacrifices
FT View Jun 26, 2019
The chance of de-escalation of the trade war at the G20 summit in Japan is minimal.

Why cryptocurrencies cannot fix financial exclusion
Patrick Jenkins (FT) Jun 26, 2019
Three-quarters of the ‘unbanked’ do not have internet access.

Trump’s impulsive China approach makes US vulnerable
Robert Zoellick (FT) Jun 26, 2019
Meeting at the G20 is unlikely to resolve the complex conflict between Beijing and Washington.

Confessions of an accidental doom-monger
Economist Jun 26, 2019
A notorious forecast about the automation of jobs has been hugely misunderstood, says one of its authors.

The President, China and the spooks
David Goldman (AT) Jun 26, 2019
Standby for collateral damage when Trump and Xi get together on the sidelines of the G20 gathering in Osaka.

Why Bitcoin rallying with gold is an ominous sign
William Pesek (AT) Jun 26, 2019
Trump is reminding markets that a currency war may soon complement his tariff arms race against Asia.

Can the US-China crisis be stabilized?
Paul D. Gewirtz (Brookings) Jun 26, 2019
As US-China relations reach a crisis point, strategic thinking is dangerously absent.

Trade at the G-20 Osaka Summit: Jaw, jaw beats war, war
Simon J. Evenett and Johannes Fritz (Brookings) Jun 26, 2019
G-20 leaders are due to discuss options to revive the moribund World Trade Organization (WTO) at this weekend’s Osaka Summit. Since the last WTO Ministerial Conference in December 2017, trade officials have struggled to take forward several unrelated, incremental initiatives. There is no apparent organizing logic, nor any systemic perspective. Worse, the China-U.S. trade war has absorbed bandwidth that could have been usefully deployed elsewhere.

Japan's Lasting Stagnation Is Hidden Behind Government Statistics
Taiki Murai and Gunther Schnabl (Mises Wire) Jun 26, 2019
Creative design of statistics cannot solve the persistent crisis. The core of the problem lies in a misguided economic policy that zombifies the Japanese economy and thus undermines prosperity.

Putin and Trump: Hiding the Cash
Frank Vogl (Globalist) Jun 26, 2019
Putin will likely meet Trump at the G20 summit in Osaka. Will their financial ties be the subject of their discussions?

Donald Trump Is Getting Mario Draghi All Wrong
Ferdinando Giugliano (Bloomberg View) Jun 26, 2019
The ECB chief isn’t the stimulus champion of Trump’s dreams. The two men have conflicting ideas on monetary and fiscal policy, and independence.

Rising Oil Prices Will Test Frackers
Liam Denning (Bloomberg View) Jun 26, 2019
They need spending discipline to win back investors, but they may soon be tempted to pump more.

The Bard and the Bank Regulators
Howard Davies (Project Syndicate) Jun 26, 2019
“Be wary then; best safety lies in fear,” said Laertes to Ophelia as she embarked on her doomed dalliance with Hamlet. That is sound advice for banks and their regulators, too, as they face the prospect of technological disruption.

Is Economic Development the Key to Mideast Peace?
Michael J. Boskin (Project Syndicate) Jun 26, 2019
Now that the Trump administration has offered a blueprint for economic development and reform in the Palestinian territories, the opportunity costs of maintaining the status quo are clear for all to see. Although the Palestinians remain opposed to the plan, at least now they can start to consider the economic potential of peace.

The Impact of Rapid Aging and Pension Reform on Savings and the Labor Supply: the Case of China
Hui He, Lei Ning, and Dongming Zhu (VoxChina) Jun 26, 2019
Individuals can use savings and labor supply to self-insure against uncertainties over their life cycle, such as idiosyncratic income shocks and changes in longevity and pension benefits. Using China as a case study, we investigate, both empirically and quantitatively, the impact of rapid aging and pension reform on savings and the labor supply, and the roles that savings and the labor supply play as self-insurance channels over the life cycle. Our quantitative results show that rapid aging and pension reforms together contributed to 55% of the increase in the household saving rate in urban China from 1995 to 2009, and they jointly accounted for about 64% of the drastic increase in the labor supply for the same period. Additionally, households’ responses to rapid aging and pension reforms differ across different stages of their life cycle.

Monetary policy and money market funds
Giovanna Bua and Peter G Dunne (VoxEU) Jun 26, 2019
Money market funds are important from a monetary policy perspective because they provide bank-like services and they are active in short-term funding markets. This column examines how recent extreme monetary policies have affected their performance and behaviour. Extreme monetary policy puts money market funds, which do not have access to the ECB’s deposit facility, under pressure by depressing the yields available on the assets they typically hold, leaving them at a competitive disadvantage relative to banks.

U.S. Stopped Vital Foreign Aid Programs in the Name of Counter-Trafficking
Robbie Gramer (FP) Jun 26, 2019
The Trump administration withheld $700 million in foreign aid to punish countries it says are failing to combat human trafficking. Some of that money could have gone toward curbing the new Ebola outbreak in Central Africa.

Re-made in China
Amy Hawkins and Jeffrey Wasserstrom (Aeon) Jun 26, 2019
From Marxism to hip hop, China’s appropriations from the West show that globalisation makes the world bumpy, not flat.

The Secular Lens: Assessing the Global Outlook and Potential Disruptions
PIMCO Jun 26, 2019
Over the secular (three- to five-year) horizon, growth in China will likely slow somewhat, and we expect some form of resolution of the current U.S.–China trade conflict. Longer-term, though, tensions will remain, as the two nations compete economically and strategically. To anchor inflation expectations near target, the Federal Reserve is prepared to allow a modest overshoot of inflation. The Fed’s current review is unlikely to result in radical shifts in its approach. In Europe, we expect modest growth and a slight increase in inflation. The central bank faces constraints but has tools to help counter a downturn, should it occur. Geopolitically, the sovereignty of individual countries is eroded by global networks. These networks promote international flows of people, goods, capital, and ideas, which in turn come in conflict with nationalist and protectionist impulses.

Dysfunction in Italy has deep roots
Tony Barber (FT) Jun 27, 2019
Public administration and judicial reforms would support investment and raise productivity growth.

Modi’s PR cannot hide India’s patchy progress
Amy Kazmin (FT) Jun 27, 2019
PM has persuaded millions of his achievements but reality tells another story.

Dollar peg shields Hong Kong from market turmoil
Henny Sender (FT) Jun 27, 2019
Investors hold steady despite huge street protests against extradition bill.

Reaching for yield: the reshaping of the EM corporate debt market
Colby Smith (FT) Jun 27, 2019
A new paper traces how investor demand forever altered an asset class.

Why democratic government is showing strains
Martin Wolf (FT) Jun 27, 2019
Nostalgia, identity politics and declining influence of elites sped rise of populist entertainers.

Investors are too complacent about negative yields
Gillian Tett (FT) Jun 27, 2019
The markets are vulnerable to potential nasty losses if rates suddenly shoot up.

Trump’s heavy-hitting game drives trade into the rough
Alan Beattie (FT) Jun 27, 2019
US leader appears set on crashing through every norm governing world trading system.

Brexit stimulates vexed questions on a united Ireland
Frederick Studemann (FT) Jun 27, 2019
The problems — political, economic and social — are considerable; the upsides questionable.

Asian dialogue cannot live by the G20 alone
Jamil Anderlini (FT) Jun 27, 2019
Lack of intra-Asian institutions surprising given regional economies’ mutual reliance.

Can the City survive Brexit?
Economist Jun 27, 2019
The world’s biggest international financial centre faces its toughest test.

Can microgrids enable macro development?
Rob Fetter, June Lukuyu, Jay Taneja, and Nathan Williams (Brookings) Jun 27, 2019
Standing in the bustling peri-urban settlement of Ngwerere, where nearly 1,000 Zambians live on the outskirts of Lusaka, you can see the power lines that follow the main road. But the residents here have never had access to grid electricity. That has not stopped enterprising business owners from setting up three video arcades and a movie theater, thanks to a 12-kilowatt solar array and battery bank installed by Standard Microgrid, which also provides power to grocery stores, hair salons, and nearly 100 homes.

The evolution of the ECB governing council’s decision-making
Grégory Claeys and Tanja Linta (Bruegel) Jun 27, 2019
Before it is decided who will chair the governing council for the next eight years, the authors look back and examine precisely how decisions have been taken since the ECB was created – by unanimity, by majority, or by consensus.

ECB Stands By as an Italian Bank Flounders
Ferdinando Giugliano (Bloomberg View) Jun 27, 2019
Andrea Enria really needs to get to grips with the crisis at Carige. A fresh review of the bank’s asset quality would be a start.

Why Trump Shouldn’t Want a Weaker Dollar
William C Dudley (Bloomberg View) Jun 27, 2019
It’s better to be richer than poorer.

A 1.17% Return for a 98-Year Bond Issue? Sign Me Up
Marcus Ashworth (Bloomberg View) Jun 27, 2019
In the end, even 1.2% wasn’t low enough for Austria’s magical century bond. Let’s hope the great-great-grandchildren are grateful.

U.S. Is Heading to a Future of Zero Interest Rates Forever
Noah Smith (Bloomberg View) Jun 27, 2019
It’s the obvious way to avert national bankruptcy as the country keeps piling on debt.

Why Policymakers Should Fear Libra
Kaushik Basu (Project Syndicate) Jun 27, 2019
It is currently unclear how popular Libra, Facebook's proposed new global cryptocurrency, might become, and what problems this may cause. But inflation – and policymakers’ reduced ability to control it – has to figure prominently on the list of possible risks.

Putin Doesn’t Care About Economic Growth
Vladislav Inozemtsev (Project Syndicate) Jun 27, 2019
The Russian economy is at a standstill, with GDP growth having averaged just 0.4% annually from 2014 to 2018. And Russia’s economic prospects are unlikely to improve substantially anytime soon, for a simple reason: Putin’s indifference.

Brexit: Impacts and prospects
Matthew Bevington and Jonathan Portes (VoxEU) Jun 27, 2019
Three years on from the referendum, it seems like a good time to take stock of whether the Brexit process so far has been good or bad for the UK, and its likely future impacts. This column does so based on four tests covering the economy, fairness, openness, and control. While the apocalyptic predictions of the Remain campaign have failed to materialise, the economic damage has nevertheless been significant. And although the UK may end up with considerably more control over a range of policies – trade, regulation, and migration – than at present, the difficult issue remains of what future governments will do to address the underlying discontent that, at least in part, drove the Brexit vote.

The EU’s insolvency reform
Bo Becker (VoxEU) Jun 27, 2019
A new EU directive proposes important reforms to member countries’ corporate insolvency processes. This column argues that the directive is a step in the right direction but that it has crucial flaws in the way it envisions restructuring and priority of creditors. It also proposes a system – comparable to the US approach – in which restructuring and liquidation are alternative options triggered by insolvency, and that respects the absolute priority of creditors.

Authoritarians Fool the World, But for How Long?
David Dapice (YaleGlobal) Jun 27, 2019
The G20 must take bold stands on inequality and human rights.

How China Really Sees the Trade War
Andrew J. Nathan (FA) Jun 25, 2019
Xi still believes he has the upper hand.

If you don’t buy the US dollar, then what do you buy?
Colby Smith (FT) Jun 28, 2019
With big threats to global growth it is premature to call time on the greenback’s run.

Tense investors grapple with aspiration and anxiety
Michael Mackenzie (FT) Jun 28, 2019
Competing forces pull stocks and bonds in conflicting directions.

Two proposals for WTO reform
Hung Tran (FT) Jun 28, 2019
China must be named a non-market economy to stop the trade body sliding into irrelevance.

Trade war hangs over the G20
Gordon Watts (AT) Jun 28, 2019
All the early statements and gossip in Osaka revolve around the year-long China-US dispute.

Bitcoin Is (Probably) Here to Stay
Tyler Cowen (Bloomberg View) Jun 28, 2019
The resilience of cryptocurrency has a lot to do with the volatility of the real world.

Currency Wars Are Easy to Start and Tough to Win
Daniel Moss (Bloomberg View) Jun 28, 2019
Global devaluations don’t happen in practice because everyone loses. Trump and his G-20 peers would do well to remember that.

Switzerland's Stock Market Has Been Taken Hostage
Lionel Laurent (Bloomberg View) Jun 28, 2019
The EU's use of threats over market access to get its way politically is becoming worryingly common. There's a warning for Brexit Britain here.

Not Even the Fed Can Keep the Dollar Down
Komal S Sri-Kumar (Bloomberg View) Jun 28, 2019
Demand for havens as the global economy slows will more than offset any weakness from lower U.S. interest rates.

Why One Brexit Trade Myth Refuses to Die
Therese Raphael (Bloomberg View) Jun 28, 2019
For supporters of Boris Johnson, it’s doubly useful to pretend that international trade rules offer a free pass to a painless Brexit.

The “Digital Revolution” of Wellbeing
Michael Spence (Project Syndicate) Jun 28, 2019
The rise of digital platforms, cutting-edge forms of automation, and Big Data promises to transform labor markets and upend longstanding business models. It will also broaden our thinking about human wellbeing, much of which hinges on social and experiential factors that have little to do with standard measures of material welfare.

America’s Economic Blockades and International Law
Jeffrey D. Sachs (Project Syndicate) Jun 28, 2019
Trump is often called an isolationist, but he is as interventionist as his predecessors. His strategy is simply to rely more heavily on US economic power than military might to coerce adversaries, which creates its own kind of cruelty and destabilization – and embodies its own brand of illegality.

The Roots of Our Discontent
Tito Boeri and Raghuram G. Rajan (Project Syndicate) Jun 28, 2019
With industrialized countries beset by a political backlash against trade, technology, migration, and other hallmarks of the modern global economy, expert solutions are needed now more than ever. But until the experts themselves can reclaim the public’s trust, populists will continue to dictate the terms of policymaking.

Inflation and exchange rate targeting challenges under fiscal dominance
Rashad Ahmed, Joshua Aizenman, and Yothin Jinjarak (VoxEU) Jun 28, 2019
Countries have significantly increased their public-sector borrowing since the Global Crisis. This column documents several potential fiscal dominance effects during 2000-17 under inflation targeting and non-inflation-targeting regimes. A higher ratio of public debt to GDP is associated with lower policy interest rates in advanced economies. In emerging economies under non-inflation-targeting regimes, composed mostly of exchange-rate targeters, the interest rate effect of higher public debt is non-linear and depends both on the ratio of foreign currency to local currency debt, and on the ratio of hard currency debt to GDP.

Eastern Europe’s adjustment tale
Marco Buti and István Székely (VoxEU) Jun 28, 2019
The EU11 economies are among the most open economies globally. The process of trade integration and the creation of GVCs have also drove a significant inflow of FDI into these countries. This column shows that while integration in the EU and FDI have enhanced their growth potential, these developments have also made them more vulnerable to external shocks. Domestic and EU-level reforms in the EU11 should focus on increasing economic and social resilience.

Expectations Low for Xi-Trump G-20 Meeting
Keith Johnson (FP) Jun 28, 2019
As U.S. President Donald Trump and Chinese President Xi Jinping stumble their way through a trade truce at the G-20 summit, a lot remains up in the air with little optimism that progress will be made.

A China-U.S. Trade Truce Could Enshrine a Global Economic Shift
Keith Bradsher (NYT) Jun 29, 2019
Though details are scarce, any peace that leaves higher American tariffs in place could continue to hurt China’s status as the world’s factory floor.

Why the Trump-Xi Pact Won’t End Trade Tension
Paul Blustein (CIGI) Jun 29, 2019
The word “truce” may appear to be good shorthand for Saturday’s accord between Presidents Trump and Xi, but immensely complicated issues remain between the two nations.

The World Needs Shock Therapy
Satyajit Das (Bloomberg View) Jun 29, 2019
The only way the leaders gathered at the G-20 are going to revive growth is through radical and painful restructuring.

Technology adoption and the middle-income trap
Rabah Arezki, Rachel Yuting Fan, and Ha Nguyen (VoxEU) Jun 29, 2019
The debate on the middle-income trap has largely focused on East Asia and Pacific countries, but the countries of Middle East and North Africa have significantly lower growth, which drops at an earlier level of income. The column argues that one factor is MENA's slow adoption of general purpose technologies. Barriers to the adoption of such technologies in key sectors could be an important transmission channel for the middle-income trap.

What the Right Gets Wrong About Socialism
Erlend Kvitrud (FP) Jun 29, 2019
The Norway way. U.S. conservatives have long framed “socialism” as a slur. But amid massive income inequality in the United States, the Scandinavian model of public ownership represents a path to more equal prosperity.

Age of the expert as policymaker comes to an end
Wolfgang Münchau (FT) Jun 30, 2019
Academics have had mixed success because their arguments fail when they lose independence.

A Brexit storm has already hit and employers are paying
Pilita Clark (FT) Jun 30, 2019
Skilled EU workers still seek UK jobs, but data from LinkedIn shows numbers falling.

World economy still vulnerable despite G20 tariff truce
Gavyn Davies (FT) Jun 30, 2019
Trump-Xi talks neither a saviour nor a disaster for global growth.

My Customers Don’t Pay Trump’s Tariffs
Brian Tedesco (WSJ) Jun 30, 2019
We negotiated lower prices from Chinese factories instead.