Trends and cycles in China’s macroeconomy
Chun Chang, Kaiji Chen, Daniel Waggoner and Tao Zha (VoxEU) Aug 1, 2015
China’s spectacular growth over the 2000s has slowed since 2013. The driving force behind the country’s growth was investment, so the key to understanding the slowdown lies in understanding what sustained investment in the past. This column shows how a preferential credit policy promoting heavy industrialisation explains the trends and cycles in China’s macroeconomy over the past two decades. This policy was not without negative consequences, particularly in terms of the distortions it introduced for business finance. Going forward, China needs to focus on creating the right incentives for banks to make loans to small productive businesses.
Customers and investors: A framework for financial institutions
Robert C. Merton and Richard T. Thakor (VoxEU) Aug 1, 2015
Effective delivery of ‘credit-sensitive’ financial services depends on the credit-worthiness of whoever provides the service. This column presents a new framework for understanding the relationships between customers, intermediaries and investors. From the perspective of the framework, designing efficient contracts that insulate customers from the credit risk of the intermediary and impose idiosyncratic risk on investors makes economic sense.
Berlin’s devotion to rules harms EU
Mark Mazower (FT) Aug 2, 2015
A confident leadership sets the manual aside in moments of crisis.
China’s market upset is bad for the world
Jonathan Fenby (FT) Aug 2, 2015
Global prosperity may ultimately be the loser.
Brazil: Engine trouble
Joe Leahy (FT) Aug 2, 2015
Once a motor of the global economy the country is now the sick man of emerging markets.
Review: ‘The Economics of Inequality,’ by Thomas Piketty
Paul Krugman (NYT) Aug 2, 2015
Mr. Piketty follows up “Capital in the Twenty-First Century,” last year’s landmark economic analysis, with a slightly revised version of a book he wrote in 1997.
Monetary policy at the zero lower bound
Angus Armstrong, Francesco Caselli, Jagjit Chadha and Wouter den Haan (VoxEU) Aug 2, 2015
Does monetary policy really face a zero lower bound or could policy rates be pushed materially below zero per cent? And would the benefits of reforms to achieve negative policy rates outweigh the costs? This column, which reports the views of the leading UK-based macroeconomists, suggests that there is no strong support for reforming the monetary system to allow policy rates to be set at negative levels.
Why gold has lost its shine for investors
Mohamed El-Erian (FT) Aug 3, 2015
Metal has not reacted to events that would usually push up price.
Renewables risk overpowering the market
Pilita Clark (FT) Aug 3, 2015
Falling costs mean wind and solar generators could become victims of their own success.
Emerging markets: Redrawing the world map
James Kynge and Jonathan Wheatley (FT) Aug 3, 2015
The term has become obsolete, say critics, as developing markets overtake developed ones in some areas.
America's Un-Greek Tragedies in Puerto Rico and Appalachia
Paul Krugman (NYT) Aug 3, 2015
The differences between the European catastrophes and economic crises in the United States are a matter of a stronger union.
The Cure for Gilead
Jeffrey Sachs (HuffPo) Aug 3, 2015
Gilead has the cure for Hepatitis C (HCV) known as Sofosbuvir, which is taken alone or in combination with other drugs. Now we need a cure for Gilead.
The IMF Goes Varoufakis? Please Don’t!
Holger Schmieding (Globalist) Aug 3, 2015
Message to Washington: Debt relief for Greece is a big fat red herring.
Cheaper Oil And Sanctions Weigh On Russia’s Growth Outlook
IMF Survey Aug 3, 2015
Russia’s economy is expected to contract by 3.4 percent in 2015, although growth should return in 2016, according to the IMF’s latest economic health check.
IIF Flows Alert: Reversal in Late July
Robin Koepke and Scott Farnham (IIF) Aug 3, 2015
After several months of cautious investor behavior, EM portfolio flows suffered a sharper retrenchment in late July,
The impact of climate change on the global economy
Keith Wade and Marcus Jennings (Pieria) Aug 3, 2015
An examination of the effect of climate change on global growth and inflation.
Greece Is Still Doomed Without Debt Relief
Bloomberg View Aug 3, 2015
But creditor nations aren't making it easy -- on Greece, or themselves.
This Recovery Really Is Different
Barry Ritholtz (Bloomberg View) Aug 3, 2015
Rebounding from a financial crisis takes a lot longer.
Ex-Im Bank Is a Tiny But Tempting Target
Megan McArdle (Bloomberg View) Aug 3, 2015
Critics of this export subsidizer are overreacting. They're also right.
The Government the Eurozone Deserves
Yannos Papantoniou (Project Syndicate) Aug 3, 2015
A move toward fiscal and political integration is the price that Europe must pay to maintain its unity and global relevance. The alternative is inconsistent – if not arbitrary – enforcement of the current rules, inducing divisiveness among member states, and eventual fragmentation.
A Marshall Plan for the United States
Dambisa Moyo (Project Syndicate) Aug 3, 2015
When a major highway bridge in California collapsed last month, the impact on the entire southwestern United States once again highlighted the country’s serious infrastructure problem. Indeed, in a sense, the world’s largest economy is falling apart.
Disrupting development with digital technology
Kemal Dervis (Brookings) Aug 3, 2015
Three trends that have the potential to redefine global development and efforts to support it.
Greece’s Ills Require a Banking Fix
Andrew Atkeson and John H. Cochrane (WSJ) Aug 4, 2015
The Greek stock-market crash is fresh evidence that more reforms are urgently needed.
A dystopian welfare state funded by clicks
Evgeny Morozov (FT) Aug 4, 2015
What was a publicly funded safety net will become private but free services.
Hayes verdict unlikely to deter traders
Frank Partnoy (FT) Aug 4, 2015
Financial fraud is not like murder as transactions can appear morally ambiguous.
Lessons learnt from crisis that never was
Ed Balls (FT) Aug 4, 2015
Sometimes the biggest potential risks are staring you in the face.
Egypt: New foundations
Heba Saleh (FT) Aug 4, 2015
More than half of Egyptians live in unregulated, poor housing but a new initiative could change that.
International Traders Target Malaysia's Ringgit
John Berthelsen (Asia Sentinel) Aug 5, 2015
Political crisis draws currency sharks into the financial sea.
How Spain Fixed Its Economy
Bloomberg View Aug 4, 2015
The IMF and austerity don't deserve all the credit for Spain's growth.
Thailand's Generals Don't Have an Economic Plan
William Pesek (Bloomberg View) Aug 4, 2015
And the manufacturing powerhouse needs a serious jolt.
The Economics of Europe's Migrant Crisis
Mohamed A. El-Erian (Bloomberg View) Aug 4, 2015
Lack of coordination and will makes solutions elusive.
China Hopes to Defy History of Market Bailouts
Megan McArdle (Bloomberg View) Aug 4, 2015
It sort of worked for J.P. Morgan in 1907. But this is very different.
China’s Malfunctioning Financial Regulation
Zhang Jun (Project Syndicate) Aug 4, 2015
The tumult in China's equity market appears to have come to an end. But considerable uncertainty remains, not only about what caused the recent plunge in the Shanghai and Shenzhen stock exchanges, but also about what the episode will mean for China’s financial-reform efforts.
Why Greece Declined a Euro Holiday
Daniel Gros (Project Syndicate) Aug 4, 2015
The rationale for the euro, as many critics have noted, was always more political than economic. But Greece's sudden about-face on austerity suggests that, contrary to popular belief, countries’ political attachment to Europe via the euro remains very strong.
A New Deal for Debt Overhangs?
Kenneth Rogoff (Project Syndicate) Aug 4, 2015
The IMF’s acknowledgement that Greece’s debt is unsustainable could prove to be a watershed moment for the global financial system. Clearly, heterodox policies to deal with high debt burdens need to be taken more seriously, even in some advanced countries.
A Defeat for International Tax Cooperation
José Antonio Ocampo (Project Syndicate) Aug 4, 2015
At the Third International Conference on Financing for Development in Addis Ababa last month, efforts to strengthen international tax cooperation came to an abrupt halt. But, despite developed countries' resistance, calls to reform the international tax system are not likely to go away.
Advice From Antiquity
Josiah Ober (FA) Aug 4, 2015
Economic lessons From ancient Greece.
Gatecrasher at Obama’s African homecoming
Tolu Ogunlesi (FT) Aug 5, 2015
President shows more interest in the continent, but the upper hand remains with China.
GDP bonds answer to Greek debt problem
Charles Goodhart (FT) Aug 5, 2015
Move would lower burden without being unfair to other debtor countries.
Redefining EM: Country clusters offer new matrix
Peter Marber (FT) Aug 5, 2015
Debt markets: After the binge
Robin Wigglesworth and Elaine Moore (FT) Aug 5, 2015
Low interest rates sparked record bond issuance but with rates set to rise the market is anxious.
In Greece, Reliance on Public Funds Is the Central Problem
Justin Murray (Mises Daily) Aug 5, 2015
Greece is a hot topic at the moment, mostly with the continued negotiations over bailouts from the European Union and, through institutions like the IMF, the world at large.
Chinese Consumers Prefer Chinese Brands
William Pesek (Bloomberg View) Aug 5, 2015
The market isn't easy prey for multinationals.
How China Is Winning Southeast Asia
Kent Harrington (Project Syndicate) Aug 5, 2015
In only two decades, China has become Southeast Asian countries’ leading economic partner, boosting its influence throughout the region. China’s leaders' constant effort to expand economic cooperation stands in stark contrast to the Americans' approach to the region.
Africa’s Green Energy Opportunity
Ngozi Okonjo-Iweala and Nicholas Stern (Project Syndicate) Aug 5, 2015
In the past, providing electricity to the 1.3 billion people without access to it today would have required emitting more greenhouse gases, thus aggravating the consequences of climate change. Fortunately, it is now possible to expand access to energy in developing countries while also limiting emissions.
Can the Renminbi Take on the World?
Alexander Friedman (Project Syndicate) Aug 5, 2015
The Chinese have a saying: “Take a second look; it costs you nothing.” This advice is apt in the context of China’s current stock-market volatility, the implications of which extend to the country's core strategic goal of establishing the renminbi as a global reserve currency.
Going Rogue: Malaysia and the 1MDB Scandal
Danny Quah (Diplomat) Aug 5, 2015
Democracy and rule of law won’t magically clear society of cronies and corruption.
Systemic risk, crises, and macroprudential regulation
Xavier Freixas, Luc Laeven and José-Luis Peydró (VoxEU) Aug 5, 2015
There has been much talk about using macroprudential policy to manage systemic risk and reduce negative spillovers, but there is little agreement on how it could be operationalised. This column highlights the findings of a new book on the topic and offers a framework for operationalising macroprudential policy. Macroprudential measures, together with higher capital requirements, could be used to tame the build-up of leverage and credit booms in order to prevent financial crises.
Dread risk is not to blame for everything
John Plender (FT) Aug 6, 2015
The truth is that bullish markets did nothing for bearish boards.
Dollar rise: further to go or finished?
Michael Mackenzie (FT) Aug 6, 2015
Stronger dollar presents problems for many areas in financial markets.
China migration: Dying for land
Lucy Hornby (FT) Aug 6, 2015
Urbanisation is leading to violent clashes between developers and farmers amid a fight for control of the land.
What’s Chinese for TARP?
WSJ Aug 6, 2015
An estimate that Beijing spent 10% of GDP to prop up stocks.
Pacific Trade Brinksmanship
WSJ Aug 6, 2015
Countries are trying to exploit Obama’s desire for a deal on his watch.
The U.S. and China fight for second place
Catherine Rampell (WP) Aug 6, 2015
Both the U.S. and China consider themselves economic underdogs and see the other as a bully
Brazilians' Debt Is Mostly Not Their Fault
Mac Margolis (Bloomberg View) Aug 6, 2015
Usurious lenders created the problem. Scary collectors won't solve it.
Indonesia's Economy Has Stopped Emerging
William Pesek (Bloomberg View) Aug 6, 2015
The president's mismanagement is scaring off investors.
Reassessing the Internet of Things
Martin Neil Baily and James Manyika (Project Syndicate) Aug 6, 2015
The possibilities associated with the Internet of Things seem endless, and the predictions have been extravagant. But, while the gains are indeed likely to be tremendous, it will take time for the changes in the way businesses operate to be detected at the macroeconomic level.
America in the Way
Joseph E. Stiglitz (Project Syndicate) Aug 6, 2015
Today, developing countries and emerging markets say to the US and others: If you will not keep your promises on development aid, at least get out of the way and let us create an international economic architecture that works for the poor. Not surprisingly, the US is doing whatever it can to thwart such efforts.
What Greece Needs to Prosper
Edmund S. Phelps (Project Syndicate) Aug 6, 2015
When some economists look at Greece, they argue that a shift in fiscal policy to “austerity” – a smaller public sector – has brought an acute deficiency of demand and thus a depression. But this claim misreads history and exaggerates the power of government spending.
What really drives public debt
Alex Pienkowski & Pablo Anaya (VoxEU) Aug 6, 2015
During the Global Crisis, sovereign debt-to-GDP ratios grew substantially in the face of shocks to growth, increased fiscal deficits, bank recapitalisation costs, and rising borrowing costs. This column looks at how these various shocks interact with each other to exacerbate or mitigate the eventual impact on debt. Choice of monetary policy regime is an important determinant of how public debt reacts to these shocks.
Currency changes and contracts: Lessons for Greece
Sebastian Edwards (VoxEU) Aug 6, 2015
Many commentators continue to think that Greece’s best bet is Grexit and the drachma, but few are talking about what will happen to contracts. This column uses Franklin D Roosevelt’s devaluation of the US dollar to give an historical perspective on currency devaluations and contract litigation. Roosevelt got away with it because the Supreme Court ruled that prices in old contracts were void and, importantly, because everyone trusted the Supreme Court’s rulings. Grexit would mean litigation in international courts – courts that are likely to side with the plaintiffs.
Capitalists, Arise: We Need to Deal With Income Inequality
Peter Georgescu (NYT) Aug 7, 2015
If we don't deal with income inequality, we'll face intolerable taxes or social unrest.
The Chinese Renminbi Is Not a Freely Usable Currency Yet
Edwin M. Truman (PIIE) Aug 7, 2015
Is the Chinese renminbi (RMB) a freely usable currency? Most participants in international financial markets would say no, for several reasons. The government of China exercises tight limits and substantial oversight over the extent to which foreign investors can buy RMB and purchase claims on China. Chinese investors face similar restrictions on the extent to which they can use their RMB and invest abroad.
Maybe the Commodities Supercycle Is Actually Real
Leonid Bershidsky (Bloomberg View) Aug 7, 2015
Oil might be joining long-term decline.
Rise of the Robots May Hold Back Interest Rates
Mark Gilbert (Bloomberg View) Aug 7, 2015
Central bankers want to see wage growth. Robots don't help.
A Japanese Development Course for India
Noah Smith (Bloomberg View) Aug 7, 2015
Japan shows the way: infrastructure, manufacturing, progress.
The Right Time to Reform Fuel Pricing
Jeffrey Frankel (Project Syndicate) Aug 7, 2015
Should we want oil prices to go up, because that will discourage oil consumption, or down because that will discourage oil production? In fact, countries should seek both outcomes: Lower the price paid to oil producers and raise the price paid by oil consumers, by cutting subsidies for oil products or raising taxes on them.
The Promise and Peril of Macroprudential Policy
Barry Eichengreen (Project Syndicate) Aug 7, 2015
Central bankers continue to fret about frothy asset markets – as well they should, given the financial crisis of 2008-2009. But, rather than standing idly by, policymakers should be developing a set of tools specifically tailored to limit the buildup of financial-sector risk.
Exchange rate appreciations and growth: The drivers matter
Matthieu Bussière, Claude Lopez & Cédric Tille (VoxEU) Aug 7, 2015
Exchange rate appreciations could potentially have a damaging effect on competiveness and domestic production. This column argues that the relationship between exchange rate appreciations and growth depends on the underlying shock. Appreciations due to the surge of capital inflows could be relatively less favourable for growth. Concern about appreciations is therefore well-founded when they are due to shocks in global financial markets.
A proposed research and policy agenda for systemic risk
Jon Danielsson and Jean-Pierre Zigrand (VoxEU) Aug 7, 2015
The long-running Greek crisis and China’s recent stock market crash are the latest threats to the stability of the global financial system. But as this column explains, systemic risk is an inevitable part of any market-based economy. While we won’t eliminate systemic risk entirely, the agenda for researchers and policymakers should be to create a more resilient financial system that is less prone to disastrous crises and that still delivers benefits for the economy and for society.
A Cheer and a Half for Cheap Commodities
Jeff Sommer (NYT) Aug 8, 2015
Consumers may welcome lower prices of products like gasoline, but the decline in global commodity markets could be a sign of trouble ahead.
Democracy at the heart of fight for Greece
Martin Sandbu (FT) Aug 9, 2015
Desire to keep the euro but with different policies is unacceptable to eurozone elite.
Long-termism no panacea, but it’s a start
Lawrence Summers (FT) Aug 9, 2015
The real need is for a cadre of trusted, tough-minded investors that will support strong management teams.
Why transparency can be a dirty word
Francis Fukuyama (FT) Aug 9, 2015
Demands for certain kinds of openness have hurt government effectiveness.
‘Prisoners of Geography’, by Tim Marshall
Michael Dombey (FT) Aug 9, 2015
The plain truth about geography and ideology.
Venezuela: ‘Terrorised by oil price drop’
Andres Schipani (FT) Aug 9, 2015
Of the top oil producing nations it has been hit hardest.
Coercive trade policy
Vincent Anesi and Giovanni Facchini (VoxEU) Aug 8, 2015
In international trade disputes, coercion is often used against governments whose trade practices are deemed unfair. This column presents a theoretical model that offers a new rationale for the greater effectiveness of multilateral compared to unilateral coercion, and hence provides a new argument in favour of commitment to international organisations.
Rating agencies still matter — which is inexcusable
Nouriel Roubini (FT) Aug 10, 2015
Spotting risk is hard, but it is a mistake to let others do the work.
Berlin must lead Europe to closer union
Constanze Stelzenmüller (FT) Aug 10, 2015
Integration is a noble attempt to overcome the EU’s problems.
China’s delusions of regional hegemony
Philip Bowring (FT) Aug 10, 2015
Other Asian states want to squash Beijing’s leadership ambitions.
Bearish bets multiply as China slows
Henny Sender (FT) Aug 10, 2015
Effects on trading partners could be severe, with Fed rate rise in offing.
US consumers are less healthy than investors hope
Russ Koesterich (FT) Aug 10, 2015
Rise in spending unlikely as wage inflation fails to take hold.
Aluminium: Meltdown fears
Henry Sanderson, Naomi Rovnick and Lucy Hornby (FT) Aug 10, 2015
Soaring Chinese output is causing trade friction as rivals claim Beijing’s tax loopholes offer unfair advantage.
Why 'Smart' Objects May Be a Dumb Idea
Zeynep Tufekci (NYT) Aug 10, 2015
Our cars, fridges and even bank safes are connected to the Internet. It's making us vulnerable in new and alarming ways.
The World-Wide Undermining of Free Markets
Roman Hatchuel (WSJ) Aug 9, 2015
China’s interference in its stock markets reflects a global trend of states trying to govern economic activity.
Four Economic Myths that Perpetuate the Euro Crisis
Patrick Barron (Mises Daily) Aug 10, 2015
Too much of the commentary about the Greek crisis has focused on whether or not Greece should drop the euro and not enough on the structural problems arising out of decades of socialism. Meanwhile, the Greek government has borrowed more money than the Greek people can possibly repay, and debased money will not make this fact disappear. On the contrary, more easy money will cause even more harm.
1990s Come Back to Haunt Malaysia
William Pesek (Bloomberg View_ Aug 10, 2015
Averting the last crisis caused the current one.
Fed on Verge of Getting Back to Normal
Barry Ritholtz (Bloomberg View) Aug 10, 2015
The central bank is no longer dealing with a financial crisis.
Yellen Brings a Sigh of Economic Relief
Matthew A. Winkler (Bloomberg View) Aug 10, 2015
Volatility has gone down since she's moved up.
The Great Democracies’ New Harmony
Joseph S. Nye (Project Syndicate) Aug 10, 2015
When Prime Minister Narendra Modi invited US President Barack Obama to attend India’s Republic Day ceremonies earlier this year, it signaled an important change in bilateral relations. No one should expect an Indian-American alliance any time soon, but several factors are likely to strengthen the relationship in the coming years.
Greece’s Aid Addiction
Dambisa Moyo (Project Syndicate) Aug 10, 2015
The ongoing Greek saga is tragic for many reasons, not least among them the fact that the country's relationship with its creditors is reminiscent of that between the developing world and the aid industry. As with other aid programs, huge sums have been transferred to Greece, with negative, if unintended, consequences.
True Prosperity: Trickle-Down vs Middle-Out Economics
Eric Beinhocker (Evonomics) Aug 10, 2015
The real history of economic growth.
On the effect of the costs of operating formally: New experimental evidence
Sebastian Galiani, Camila Navajas Ahumada and Marcela Meléndez (VoxEU) Aug 10, 2015
Informality is widespread in most developing countries. A challenge for governments is to lure informal firms into the formal economy. This column presents evidence from an experiment designed to induce formalisation in Colombia. Assistance through the bureaucratic process and the removal of the fixed costs of formalising increased the likelihood of formalisation. However, this effect did not persist over time, with many firms returning to the informal sector when minimal fixed costs came back into effect.
Is China’s Growth Miracle Over?
Lessons from Cyprus that did not make it to Greece
Anil Ari, Giancarlo Corsetti and Andria Lysiotou (VoxEU) Aug 10, 2015
Cyprus has been striving to get back on its feet after a painful bailout in 2013. This column examines the lessons that could have been drawn from the Cypriot experience by Greece in its recent attempt to seal a bailout deal. Specifically, lengthy negotiations – while tending to mitigate the risk of contagion – offer little benefit for debtor countries, and capital controls, once implemented, cannot be easily undone. While they come too late for Greece, these lessons can be important for countries in need of financial assistance in the future.
Zheng Liu (FRBSF Econ Letter) Aug 10, 2015
The recent slowdown in China’s growth has caused concern about its long-term growth prospects. Evidence suggests that, before 2008, China’s growth miracle was driven primarily by productivity improvement following economic policy reforms. Since 2008, however, growth has become more dependent on investment and overall growth has slowed. If the recent reform plans can successfully address the country’s structural imbalances, China could maintain a solid growth rate that might help smooth its transition to high-income status.
Is Greece to Blame for the Crisis?
Various (FA) Aug 10, 2015
Foreign Affairs' brain trust weighs in.
The end of the Malthusian nightmare
Robin Harding (FT) Aug 11, 2015
Falling fertility opens a new stage in human history, with greater control of our destiny.
Miracles of productivity in our hands
John Kay (FT) Aug 11, 2015
But the data framework of economic analysis is still largely the product of the second world war.
A Greek deal based on fear and mistrust
Martin Sandbu (FT) Aug 11, 2015
Europe has been frightened into stepping back from the brink.
China’s renminbi sets risky precedent
George Magnus (FT) Aug 11, 2015
Officials had tried everything short of devaluation. Finally they succumbed
Bearish bets multiply as China slows
Henny Sender (FT) Aug 11, 2015
Effects on trading partners could be severe with Fed rate rise in offing.
Why Did China Devalue Its Currency? Two Big Reasons
Neil Irwin (NYT) Aug 11, 2015
The nation wanted to keep its economy on an even keel, but it is also looking to assert more leadership in the global economy.
China’s Devaluation Gambit
WSJ Aug 11, 2015
A move to liberalize currency controls, or a panicky bid to lift exports?
Amplify the Oil Boom by Liberating U.S. Exports
John Deutch (WSJ) Aug 11, 2015
Ending the ban on sending crude overseas would increase jobs. Fears about a gasoline price spike are overblown.
What Does China's Devaluation Mean?
Bloomberg View Aug 11, 2015
A suspiciously convenient moment for China to see the merits of a market-based exchange rate.
Give China's Devaluation a Chance
William Pesek (Bloomberg View) Aug 11, 2015
A weak yuan sets Beijing up for big reforms.
The Wrong Way to Make a Trade Deal Public
Leonid Bershidsky (Bloomberg View) Aug 11, 2015
Paying a thief to leak the terms? It's practically bribery.
Deflation Stalks the Euro Zone
Mark Gilbert (Bloomberg View) Aug 11, 2015
A growing economy isn't enough. Consumer prices are languishing.
China Escalates the Currency Wars
Mark Gilbert (Bloomberg View) Aug 11, 2015
A rising dollar and a falling yuan spell pain for Chinese and American companies.
Making Sense of China’s Currency Move
Mohamed A. El-Erian (Bloomberg View) Aug 11, 2015
Will a longtime locomotive of global growth become a drag?
Let the Global Race to the Bottom Begin
Patrick Chovanec (FP) Aug 11, 2015
Why China's big currency devaluation is bad for it, for America, and for the world.
Beware of American econ professors!
Yannis Palaiologos (Politico) Aug 11, 2015
How Krugman, Sachs and Stiglitz led the Greeks astray.
We the People of Europe
Laszlo Bruszt and David Stark (Project Syndicate) Aug 11, 2015
The political environment in Europe today would be familiar to anyone living in the US in the early 1780s. The parallels between that period of American history and the ongoing crisis in the EU offer a reason for hope that some of the most difficult issues facing the continent can one day be resolved.
The Future of Work: Why Wages Aren't Keeping Up
Robert Solow (Pacific Standard) Aug 11, 2015
The latest entry in a special project in which business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace.
Sovereign debt repayments: Evidence on seniority
Matthias Schlegl, Christoph Trebesch and Mark L. J. Wright (VoxEU) Aug 11, 2015
Greece is the first developed country to default on the IMF. But it continues to service its debt owed to private bondholders. How does this compare to historical experience? This column presents new evidence on seniority in sovereign debt markets. Despite the lack of a sovereign insolvency procedure, there is a clear-cut pecking order of sovereign debt repayments, which holds across countries and over time. Greece is an outlier case, and the Eurozone rescue loans face an elevated risk of arrears and haircuts in the future.
External bond issuance by emerging markets
Erik Feyen, Swati Ghosh, Katie Kibuuka and Subika Farazi (VoxEU) Aug 11, 2015
Monetary policies pursued by developed countries in the wake of the Global Crisis have had profound spillover effects on emerging economies. This column documents the unprecedented post-Crisis bond issuance surge in emerging markets. The findings indicate that benign international funding conditions favoured bond issuance in these economies. But the large issuance volumes, currency risks, and high exposure to global factors could pose a challenge for policymakers, particularly when global cycles reverse.
Capitalists, Arise!: Q. & A. With Peter Georgescu
Peter Georgescu (NYT) Aug 12, 2015
The author of a Sunday Review article arguing that capitalists must address rising income inequality responds to reader comments.
Modi must fire up ‘Make in India’ dream
David Pilling (FT) Aug 12, 2015
A goal to increase manufacturing is overdue but the obstacles are formidable.
What next: China housing crash?
Andy Rothman (FT) Aug 12, 2015
Prices have fallen but high deposit required means low risk of crisis.
Ukraine Deserves Debt Relief
George Soros (WSJ) Aug 12, 2015
The war-torn country is working hard on the reforms that will get the economy back on its feet.
Overselling the Importance of When the Interest-Rate Rise Begins
Alan S. Blinder (WSJ) Aug 12, 2015
September? December? Next year? That doesn’t matter as much as how swiftly rates increase after the first hike.
Asset-Price Inflation Enters Its Dangerous Late Phase
Brendan Brown (Mises Daily) Aug 12, 2015
Asset price inflation, a disease whose source always lies in monetary disorder, is not a new affliction.
Is Indonesia Really Open to Joining the TPP?
Prashanth Parameswaran (Diplomat) Aug 12, 2015
What a minister’s recent comments say about Jakarta’s openness to joining the agreement.
Italy at a Crossroads
Emanuele Schibotto (Globalist) Aug 12, 2015
Can Italy finally hope for a much-needed political stability?
Modi Needs a Reset
Dhiraj Nayyar (Bloomberg View) Aug 12, 2015
Instead of producing more schemes and slogans, the prime minister must sell Indians again on the need for painful restructuring.
Maybe China Doesn't Have a Master Plan
Justin Fox (Bloomberg View) Aug 12, 2015
They're just winging it like everyone else.
China Adds a Chainsaw to Its Juggling Act
William Pesek (Bloomberg View) Aug 12, 2015
Trying to affect debt, stocks and now the yuan.
The Threat of Greek Debt Relief
Christoph M. Schmidt (Project Syndicate) Aug 12, 2015
The case for debt relief for Greece is not as strong as many observers seem to think. Not only is debt far from the strongest drag on the country's economic growth; a reduction in Greece's nominal debt would undermine the common framework of rules and standards that underpins the eurozone.
China will struggle with its stock markets until it completes reforms
Douglas J. Elliott (Brookings) Aug 12, 2015
Until China moves forward with corporate governance and stock market reforms, investors should exercise great caution.
Greek debt sustainability: The devil is in the tails
Andrea Consiglio & Stavros A. Zenios (VoxEU) Aug 12, 2015
Some experts view Greek debt as sustainable, while others claim it is not sustainable. This column argues that the distinction between tactical and strategic debt sustainability can explain this difference of opinions. Moreover, strategic debt sustainability analysis should account for tail risk. This approach shows that Greek debt is highly unsustainable, but sustainability can be restored with a nominal haircut of 50%, interest rate concessions of 70%, or a rescheduling of debt to a weighted average maturity of 20 years. Greece and its creditors should ‘bet on the future’ and embrace debt relief.
The sterling-dollar rate and expectations of the return to gold in the early 1920s
Stefan Gerlach & Peter Kugler (VoxEU) Aug 12, 2015
Anticipation of future economic policy changes may impact assets such as foreign exchange. This column argues that expectations of a return to gold were an important determinant of the sterling-dollar exchange rate in the early 1920s. The probability of sterling’s return to gold increased from around 15% to over 70% in the second half of 1924, a few months before Churchill announced it in April 1925.
Zombie corporate cash infests US economy
Gillian Tett (FT) Aug 13, 2015
Low interest rates make it hard to achieve returns in capital markets that many have given up trying.
Futile quest to get the Chinese to spend
Robert Boxwell (FT) Aug 13, 2015
No amount of government prodding can crack a prevalent frugal culture.
Confessions of an analyst
Daniel Davies (FT) Aug 13, 2015
The flaws of buy-sell ratings on equities.
Lessons for China from past currency pegs
Gene Frieda (FT) Aug 13, 2015
Similarities exist but also advantage of foreign reserve buffer.
IMF: Lagarde eyes new act in Greek drama
Shawn Donnan (FT) Aug 13, 2015
After months of negotiations, the fund’s managing director hopes its stance on debt relief will be implemented.
The truth about China’s currency devaluation
Catherine Rampell (WP) Aug 13, 2015
Despite what Trump et al. may tell you, China has just done what we’ve been asking it to do for.
China: Rethinking the Yuan Devaluation
Helmut Reisen (Globalist) Aug 13, 2015
Understanding China's currency move from a non-Western-centric perspective.
Devalued Yuan Seeks Reserve Currency Status, But US Dollar Dominates
Will Hickey (YaleGlobal) Aug 13, 2015
Investors and economies cling to and strengthen the US dollar, despite many glaring imbalances
China's Devaluation Can't Be Good News
Noah Smith (Bloomberg View) Aug 13, 2015
Arguments that it's benign don't hold up.
How the IMF Failed Greece
Arvind Subramanian (Project Syndicate) Aug 13, 2015
Throughout their country’s debt crisis, Greeks have been presented with two stark choices: Stay in the eurozone, implement austerity, and receive financing, or leave the monetary union and attempt to survive on their own. In reality, Greece should have been offered a third choice, but the IMF refused to put it on the table.
Back to Fundamentals in Emerging Markets
Dani Rodrik (Project Syndicate) Aug 13, 2015
After 15 years of hype, it is now clear that emerging markets are in deep trouble. As stronger global headwinds emerge in the years ahead, it will become easier to distinguish countries that have strengthened their economic and political fundamentals from those that have coasted on the tenuous strength of fickle investor sentiment.
Next-Generation Development
Bjørn Lomborg (Project Syndicate) Aug 13, 2015
A panel of 82 eminent economists analyzed the proposed Sustainable Development Goals to establish which targets are likely to be most effective. They found that the world's energies and resources would be best focused on improving the lives of children.
World trade: Have we reached peak globalization?
Carlos A. Primo Braga (IMD) Aug 13, 2015
A guide for the debate between believers and sceptics of the benefits of international trade.
Grouping countries by shared characteristics defines stages of development and risk.
A pragmatic approach to external debt: The write-down of Germany’s debts in 1953
Timothy W. Guinnane (VoxEU) Aug 13, 2015
Greece’s crisis has invited comparisons to the 1953 London Debt Agreement, which ended a long period of German default on external debt. This column suggests that looking back, the 1953 agreement was unnecessarily generous given that Germany’s rapid growth lightened the debt repayment burden. Unfortunately for Greece, the motivations driving the 1953 agreement are nearly entirely absent today.
Still vulnerable: The Eurozone’s small and medium-sized banks
Ashoka Mody and Guntram Wolff (VoxEU) Aug 13, 2015
The ECB believes that most Eurozone banks are out of the woods in terms of non-performing assets and capital shortfalls. This column argues that small and medium-sized banks – and among them the unlisted banks – remain under considerable stress. These banks are in the worst affected Eurozone countries, and their continued stress significantly impedes the flow of credit and also reduces lending. Policymakers need to seriously consider how and when to restructure and resolve these banks.
Iceland, Greece and political hectoring
Jon Danielsson (VoxEU) Aug 13, 2015
The Greek and the Icelandic crisis have much in common, not the least the heavy pressure from foreign countries and the hectoring from their public officials. In Iceland and in Greece this was counterproductive, hardening the opposition to any settlement. The will to reform needs to come from within, and the sooner the Troika realizes this, the easier it will be to deal with the Greek situation.
Renminbi shift challenges global markets
John Authers (FT) Aug 14, 2015
China’s economic woes, rather than PBoC, could drive devaluation
Bungling Beijing’s Stock Markets
Paul Krugman (NYT) Aug 14, 2015
China’s leaders still don’t understand how markets work.
China’s Renminbi Devaluation May Initiate New Phase in Global Currency War
Peter Eavis (NYT) Aug 14, 2015
Some analysts say the currency tensions could worsen some of the entrenched problems in the global economy. China’s move also poses a dilemma for the Fed as it considers raising interest rates.
India's Problems Go Beyond Noodles
Dhiraj Nayyar (Bloomberg View) Aug 14, 2015
The country's safety agencies aren't independent or equipped enough to handle a modern economy.
China Declares Currency Independence
David Malpass (WSJ) Aug 14, 2015
Yuan devaluation is part of a shift away from the dollar bloc that has dominated Asia since World War II.
China’s Surprise Currency Devaluation
Sara Hsu (Diplomat) Aug 14, 2015
Why did Beijing do it? The official explanation makes the most sense.
China Gambles with the Yuan
James Surowiecki (New Yorker) Aug 14, 2015
The wild ride that the yuan has taken has left plenty of people perplexed, including, perhaps, the country’s own policymakers.
Oil’s New Normal
Mohamed A. El-Erian (Project Syndicate) Aug 14, 2015
At the end of the day, no swing producer controls the fate of today’s oil prices. A sustained price recovery requires a healthier global economy that combines faster inclusive growth and greater financial stability.
Local Innovation for Local Problems
Muhammad Hamid Zaman (Project Syndicate) Aug 14, 2015
When it comes to finding solutions to problems like the proliferation of fake or low-quality drugs, policymakers in the developing world are more likely to look abroad than at home. This is a big mistake, as local innovation is likely to be central to any successful effort to address the problem – and many others as well.
Low inflation in the Eurozone
Stefano Neri and Stefano Siviero (VoxEU) Aug 15, 2015
EZ inflation has been falling steadily since early 2013, turning negative in late 2014. This column surveys a host of recent research from Banca d’Italia that examined the drivers of this fall, its macroeconomic effects, and ECB responses. Aggregate demand and oil prices played key roles in the drop, which has consistently ‘surprised’ market-based expectations. Towards the end of 2014 the risk of the ECB de-anchoring inflation expectations from the definition of price stability became material.
Ancient origins of Xi’s brand of justice
Isabel Hilton (FT) Aug 16, 2015
Han Fei believed that individuals must submit to absolute state power.
Saudi’s hard choices on oil and influence
Nick Butler (FT) Aug 16, 2015
The country’s interests lie in price stability for the next five years.
Linguistic purge finds inequality Marx missed
John Plender (FT) Aug 16, 2015
The importance of the role of the state and law in facilitating the capitalist dynamic.
Investing: The index factor
John Authers (FT) Aug 16, 2015
Indices have become one of the most potent forces in markets.
A Global Recession May Be Brewing in China
Ruchir Sharma (WSJ) Aug 16, 2015
Beijing’s desperate attempts to hit its arbitrary 7% growth target are having world-wide repercussions.
China Makes Debt Burden Heavier for Others
Mark Whitehouse (Bloomberg View) Aug 16, 2015
Yuan devaluation aggravates a dollar problem in emerging markets.
Can Asia keep growing through middle income?
Indermit Gill and Homi Kharas (EAF) Aug 16, 2015
About a decade ago we observed that there was no easily communicable growth strategy we could recommend to policymakers in the middle income economies in Asia.
Collateral damage: Dollar strength and emerging markets’ growth
Pablo Druck, Nicolas Magud and Rodrigo Mariscal (VoxEU) Aug 16, 2015
The strength of the US dollar can impact the economic activity in emerging economies in various ways. This column argues that appreciation of the dollar mitigates the impact of real GDP growth in emerging markets. The main transmission channel is through an income effect. As the dollar appreciates, commodity prices fall, depressing domestic demand via lower real income, and as a result real GDP in emerging markets decelerates. Emerging markets’ growth is expected to remain subdued, reflecting the expected persistence of the strong dollar.
Corn Wars
Ted Genoways (New Republic) Aug 16, 2015
The farm-by-farm fight between China and the United States to dominate the global food supply.
Strength of the dollar and emerging markets’ growth
Pablo Druck, Nicolas Magud and Rodrigo Mariscal (VoxEU) Aug 16, 2015
The strength of the US dollar can impact the economic activity in emerging economies in various ways. This column argues that appreciation of the dollar mitigates the impact of real GDP growth in emerging markets. The main transmission channel is through an income effect. As the dollar appreciates, commodity prices fall, depressing domestic demand via lower real income, and as a result real GDP in emerging markets decelerates. Emerging markets’ growth is expected to remain subdued, reflecting the expected persistence of the strong dollar.
Increase reserves and shelve Dodd-Frank
Alan Greenspan (FT) Aug 17, 2015
A gradual rise in capital requirements need not suppress earnings.
S Korea grapples with contradiction of ‘chaebols’
Simon Mundy (FT) Aug 17, 2015
Pardon for SK Group scion shows law must change to protect cherished institutions Read more >>
Global reflation/recession battle looms
Jay Pelosky (FT) Aug 17, 2015
China’s shift from global customer to global competitor is key factor.
Japan: A pacifist’s plan to arm the world
Leo Lewis and Robin Harding (FT) Aug 17, 2015
PM hopes defence exports will boost the country’s industrial base and counter China’s rise Read more >>
China’s Transition to Slower But Better Growth
IMF Survey Aug 17, 2015
China is moving to a “new normal,” of slower yet safer and more sustainable growth. This involves giving the market a more decisive role in the economy, says the IMF in its annual assessment of the economy.
Markets Focus on Risks in Asia
Andrew Barber (II) Aug 17, 2015
Japanese growth data released today confirmed that second-quarter GDP contracted despite a slightly better-than-forecast pace of -0.4 percent versus the prior three months.
Operation Big Data: Challenge accepted
Thomas F. Dapp and Alexander Karollus (DB Research) Aug 17, 2015
Big data is a hot topic. The large digital platform operators in particular have long recognised the economic potential of algorithm-based data analysis. They demonstrate this to billions of customers professionally every day. With their analytical technologies they generate high revenues and tie us loyal customers ever more firmly to their platforms via convenient and, above all, individualised services. A steadily growing number of companies want to imitate this lucrative lock-in effect so they can also capitalise on the benefits of big data. Nonetheless, in many sectors the implementation of modern data analysis tools is proceeding only sluggishly. Contrary to the expectations of some market participants, big data is not a simple add-on.
The Eurozone After Greece: Spain Vs. France
Holger Schmieding (Globalist) Aug 17, 2015
How do the EU’s third- and fifth-largest economies compare with regard to reform readiness?
This Latest Greek Deal Is Nothing to Celebrate
Bloomberg View Aug 17, 2015
It's probably better than no deal.
Heading Off Bond-Market Tantrums
Bloomberg View Aug 17, 2015
Liquidity crunch or not, here's how to reassure investors before interest rates rise.
Are You Rich? No Need to Apologize
Clive Crook (Bloomberg View) Aug 17, 2015
History suggests capitalism brings out the best in people.
Japan Exports Its Way to Irrelevance
William Pesek (Bloomberg View) Aug 17, 2015
Tokyo should follow China's economic example: diversify.
Facing Down Secular Stagnation in China
Andrew Sheng and Xiao Geng (Project Syndicate) Aug 17, 2015
Secular stagnation is looming worldwide, and China is no exception. Will the Chinese authorities’ latest move to address the economy's slowdown – devaluation of the renminbi – be enough to turn the tide?
A New Approach to Eurozone Sovereign Debt
Yanis Varoufakis (Project Syndicate) Aug 17, 2015
The problem with debt restructuring in the eurozone is that it is essential and, at the same time, inconsistent with the implicit constitution underpinning the monetary union. When economics clashes with an institution's rules, policymakers must either find creative ways to amend the rules or watch their creation collapse.
The Great Emerging-Market Bubble
Bill Emmott (Project Syndicate) Aug 17, 2015
Something has gone badly wrong in the emerging economies that were supposed to shape the world's future. Although falling commodity prices, fracking, US interest rates, and other factors have been blamed for these countries' woes, the real culprit is poor policymaking, owing to weak political institutions.
Immigrants’ impact on labour markets: New evidence
Andreas Beerli and Giovanni Peri (VoxEU) Aug 17, 2015
The case for immigration restrictions is periodically debated in the political arena. This column shows that fully opening the border to neighbouring countries increased immigrants to Switzerland only by 4% of the labour force over eight years. Such an increased inflow did not have significant aggregate effects. Highly educated workers, however, benefited in terms of higher wages, while middle-educated ones experienced employment losses.
You Don’t Know Zhou
Daniel Altman (FP) Aug 17, 2015
Pundits can argue about devaluation versus market forces. But only one man knows for sure what the People’s Bank of China was up to when the value of the renminbi fell last week.
Inequality is unjust, not bad for growth
Chris Giles (FT) Aug 18, 2015
That redistribution boosts economies is not established by the evidence.
A currency skirmish not made in China
Henny Sender (FT) Aug 18, 2015
Beijing has kept the renminbi strong — which has earnt it little credit.
China’s entrepreneurialism can lift gloom
Tom Mitchell (FT) Aug 18, 2015
Companies are worried about squeezing profit from slowing economy.
Overvalued equities can keep rising
Christophe Donay (FT) Aug 18, 2015
Central banks’ informal policy style puts floor under asset prices.
We borrow from the future at our peril
Peter Fisher (FT) Aug 18, 2015
Central banks seem concerned about liquidity, but it is not the issue.
Eurozone: The case against ‘cash for reform’
Martin Sandbu (FT) Aug 18, 2015
EU bailouts were based on the belief that a wave of sovereign defaults could doom the single currency. But was it correct?
Europe, Listen to the I.M.F. and Restructure the Greek Debt
NYT Aug 18, 2015
Rather than go through a messy default in a few years, Europe should restructure Greece's debt now.
Emerging Asia Can't Just Rely on China
William Pesek (Bloomberg View) Aug 18, 2015
Faith in the region's growth is no longer enough.
There's Hope for Colombia. Yes, Colombia.
Matthew A. Winkler (Bloomberg View) Aug 18, 2015
Investors see the problems, but also a bright side.
Why Greece Can't Fulfill Bailout's Terms
Leonid Bershidsky (Bloomberg View) Aug 18, 2015
The government will never collect enough taxes.
China’s Daring Depreciation
Yu Yongding (Project Syndicate) Aug 18, 2015
While China's central bank devalued the renminbi earlier this month, many foreign commentators, viewing the move as a blatant attempt to boost Chinese exports, warned that a new round of currency wars was coming. But there are good reasons to believe that the move was not intended to boost trade competitiveness.
India’s Deadly Cities
Asit K. Biswas and Kris Hartley (Project Syndicate) Aug 18, 2015
China and India face similar challenges in managing rapidly growing urban populations. But variations in their urban growth paths, as well as differences in their approaches to environmental policy, are likely to make India’s population challenges far more difficult to address.
A Balance-Sheet Approach to Fiscal Policy
Kemal Dervis (Project Syndicate) Aug 18, 2015
Current fiscal-policy debates are based on flawed thinking about debt. It is time to stop focusing on nominal debt-to-GDP ratios, and instead promote a long-term balance-sheet-oriented approach to public spending.
Why the UK Belongs in Europe
Charles Tannock (Project Syndicate) Aug 18, 2015
A referendum on the UK’s membership in the EU may be less than a year away. At issue is not just the country’s relationship with its neighbors across the Channel, but also its proper position on the international stage.
How similar is Chinese investment in Africa to the West’s?
Wenjie Chen, David Dollar and Heiwai Tang (Brookings) Aug 18, 2015
Other things equal, Western investment is concentrated in African countries with better property rights and rule of law.
China's Crisis: The Price of Change
Rodger Baker (Stratfor) Aug 18, 2015
Last week was an eventful one for China.
Wealth and income distribution: New theories needed for a new era
Ravi Kanbur & Joseph Stiglitz (VoxEU) Aug 18, 2015
Growth theories traditionally focus on the Kaldor-Kuznets stylised facts. Ravi Kanbur and Nobelist Joe Stiglitz argue that these no longer hold; new theory is needed. The new models need to drop competitive marginal productivity theories of factor returns in favour of rent-generating mechanism and wealth inequality by focusing on the ‘rules of the game.’ They also must model interactions among physical, financial, and human capital that influence the level and evolution of inequality. A third key component will be to capture mechanisms that transmit inequality from generation to generation.
Najib is too powerful for Malaysia’s good
David Pilling (FT) Aug 19, 2015
Once a model of development, the country’s reputation is sinking and so is that of the PM.
The myth of the robot job-ocalypse
Tim Harford (FT) Aug 19, 2015
Blaming cyborgs instead of bankers and politicians is easy.
Norway feels the Arctic chill
Richard Milne (FT) Aug 19, 2015
With the oil price low and exploration projects on ice, concerns for the economy are growing.
China: Weakened foundations
Jamil Anderlini (FT) Aug 19, 2015
Facing an economic slowdown, and with policy options running low, Beijing’s leaders broke an old taboo and devalued the renminbi.
Europe’s warning for the U.S. on jobs
Robert J. Samuelson (WP) Aug 19, 2015
If you price labor too high, businesses will slow or stop hiring.
Keeping the Bubble-Boom Going
Thorsten Polleit (Mises Daily) Aug 19, 2015
The US Federal Reserve is playing with the idea of raising interest rates, possibly as early as September this year.
China Wants Great Power, Not Great Responsibility
William Pesek (Bloomberg View) Aug 19, 2015
The problem with 'It's our currency, but it's your problem.'
India's Banks Need the Tools to Get Tough
Dhiraj Nayyar (Bloomberg View) Aug 19, 2015
To reduce the bad-loan problem, defaulters need to pay a price.
The Better Corporation
Lucy P. Marcus (Project Syndicate) Aug 19, 2015
Around the world, the corporate governance landscape is shifting, as efforts to improve business practices and policies gain support and momentum. The wave of reform has become visible everywhere, and, fueled by three developments, it is sure to continue to rise.
The Value of China’s Devaluation
Benjamin J. Cohen (Project Syndicate) Aug 19, 2015
Much of the reaction to China's recent decision to devalue the renminbi was excessive and irrational. Far from initiating a currency war, China was merely advancing its long-term goal of turning the renminbi into an international reserve currency.
China’s Debt Termites
Gene Frieda (Project Syndicate) Aug 19, 2015
Because China's credit system has been designed around implicit state guarantees, much of the financing is misallocated to the economy’s less efficient, highly indebted sectors. As a result, the foundations of China’s growth miracle are steadily being eroded by a debt overhang that shows few signs of receding.
Brazil cleans up act, so should Mexico
John Paul Rathbone (FT) Aug 20, 2015
Brazil seems to realise that standards have shifted, Mexico does not.
Productivity dilemma for Fed
Gillian Tett (FT) Aug 20, 2015
Slowdown flies in the face of popular belief that the western world is undergoing a technology boom.
China technocrats are accident-prone, too
Michael Schuman (FT) Aug 20, 2015
As long as the economy is as the party wishes, it turns a blind eye to risk.
Clock is ticking on US equity correction
Michael Mackenzie (FT) Aug 20, 2015
Investors appear sanguine given slowing China and likely rate rise.
From Russia to Iran, the consequences of the global oil bust
Fareed Zakaria (WP) Aug 20, 2015
Oil prices are falling at a speed that might produce enormous turmoil and uncertainty. Read full column »
UK: Currency Markets and the Price of Independence
Robert Bischof (Globalist) Aug 20, 2015
It is clear that Britain will not join the Euro – not now and probably not ever.
Nicaragua Keeps Dreaming of a Canal
Justin Fox (Bloomberg View) Aug 20, 2015
But the country doubts a Chinese billionaire's promise to build one.
Why the Fed Is Wishy-Washy
Mohamed A. El-Erian (Bloomberg View) Aug 20, 2015
The data it needs to make a decision is a muddle.
Kazakhstan Is the Latest Oil-Curse Casualty
Leonid Bershidsky (Bloomberg View) Aug 20, 2015
The former Central Asian tiger plans a timeout from big showcase projects.
High Risk, High Returns? Not Quite.
Noah Smith (Bloomberg View) Aug 20, 2015
If anything, it's just the opposite.
A Funny Thing Happened on the Way to $80 Oil
A. Gary Shilling (Bloomberg View) Aug 20, 2015
Supply still exceeds demand, and Iran could make it worse.
The Authoritarian Temptation
Nina L. Khrushcheva (Project Syndicate) Aug 20, 2015
The paradox of democracy today is that, with people’s material expectations largely met, citizens in many countries – including Hungary, Russia, and Turkey – have increasingly voted for neo-authoritarian defenders of stability and national sovereignty. This trend will not reverse until voters see that prosperity requires freedom.
A short-run view of what computers do
Paul Gaggl and Greg C. Wright (VoxEU) Aug 20, 2015
Investments in ICT could affect different types of workers within the firm in a different way. This column shows that firms that invest in ICT reorganise their production processes in a way to raise the productivity of workers who perform complex, cognitive-intensive works. This ICT investment and firm reorganisation has little effect on other types of workers.
The sun is shining again: European banks rebound
Jan Schildbach (DB Research) Aug 21, 2015
After literally seven lean years, the European banking industry’s recovery from the financial crisis is now in full swing. Profits are at their highest level since 2007, revenues are growing across the board (helped by favourable currency effects) and loan losses are falling. Banks are also expanding business volumes. Capital ratios are on average substantially above Basel III requirements, though uncertainty has increased recently due to a pending further regulatory tightening (“Basel IV”).
The Global Economy Is Looking Very 1990s
Justin Fox (Bloomberg View) Aug 21, 2015
But hold the nostalgia until it's clear if this is good or bad.
An Election that Should Strengthen Tsipras's Hand
Jacob Funk Kirkegaard (PIIE) Aug 21, 2015
For the third time this year, Greek voters will be going the polls, this time to elect a new Parliament on September 20 in the wake of the €86 billion bailout accord with European creditors and Prime Minister Alexis Tsipras's resignation. But the most likely outcome for this election will be to strengthen Tsipras's hand in carrying out the tough terms of the bailout.
A Brutal Week in Markets, But What Comes Next?
Mohamed A. El-Erian (Bloomberg View) Aug 21, 2015
Just don't count on central banks to deliver a boost this time.
A New Chance for Cyprus
Martti Ahtisaari, Emma Bonino, Albert Rohan, Nathalie Tocci (Project Syndicate) Aug 21, 2015
The Greek crisis may seem unending, but there are hints that a problem festering in Europe for even longer – the division of Cyprus – may be moving toward resolution. For the first time since 2004, there is a fragile alignment of the political stars over the eastern Mediterranean.
The Real Demographic Challenge
Adair Turner (Project Syndicate) Aug 21, 2015
Those who warn that huge economic problems lie ahead for aging rich countries are focused on the wrong issue. Population aging in advanced economies is the manageable consequence of positive developments, whereas rapid population growth in many poorer countries still poses a severe threat to human welfare.
The UN at 70
Jeffrey D. Sachs (Project Syndicate) Aug 21, 2015
Next month's meeting of world leaders at the United Nations' headquarters in New York will mark the organization's 70th anniversary. But, though the UN remains the best bargain on the planet, it must be upgraded in three key ways if it is to continue to play its unique and vital global role.
The New “Two Chinas” Question
Richard N. Haass (Project Syndicate) Aug 21, 2015
Is China best understood as a strong country, with a promising future despite some short-term difficulties, or as a country facing serious structural problems and uncertain long-term prospects? Until recently, that question seemed out of place; now it has become unavoidable.
Does Capitalism Cause Poverty?
Ricardo Hausmann (Project Syndicate) Aug 21, 2015
Pope Francis recently called capitalism "intolerable." But are the problems that Francis rightly highlights really the consequence of an excess of “unbridled capitalism,” or are they caused by bridling capitalism in the wrong way?
Currency Devaluation Is a Short Step in China’s Long Advance
Jeff Sommer (NYT) Aug 22, 2015
A modest devaluation of the renminbi, part of China’s decades-long transformation into a modern economy, may help the country stave off domestic pressures.
Asia’s new family values
Economist Aug 22, 2015
Europe shows how Asia’s demographic crisis might correct itself.
A Moveable Glut
Paul Krugman (NYT) Aug 23, 2015
What happens when too much money is chasing too few investment opportunities.
Region will suffer from Venezuela failure
Daniel Lansberg-Rodríguez (FT) Aug 23, 2015
Caracas has refused to respond to economic collapse.
Fed looks set to make a dangerous mistake
Lawrence Summers (FT) Aug 23, 2015
Raising rates this year will threaten all of the central bank’s major objectives.
The Chinese model is nearing its end
George Magnus (FT) Aug 23, 2015
The country is now going through a crisis of transition, unparalleled since Deng Xiaoping.
Investing: Whatever the weather?
Henny Sender and Robin Wigglesworth (FT) Aug 23, 2015
A ‘risk parity’ strategy designed by Ray Dalio faces a stiff test when the Fed raises rates.
Robots Don’t Mean the End of Human Labor
Lewis M. Andrews (WSJ) Aug 23, 2015
The left frets about the impact of technology, but new jobs will be created. The real problem is bad schools.
Greece and the Global Sell-Off
Holman Jenkins (WSJ) Aug 23, 2015
One reason growth hopes are unraveling is Europe’s failure to get serious about its bigger troubles.
Towards a Europe of Symmetry, Solidarity, and Opportunity
Angel Ubide (El Pais/PIIE) Aug 23, 2015
The euro area crisis has revealed a sad reality. The process of monetary union should have generated economic convergence and political rapprochement and a sense of European citizenship.
The Method in the Market’s Madness
James Surowiecki (New Yorker) Aug 23, 2015
After months of being stuck in a comfortable trading range, why did the stock market suddenly crack?
If Mao still ran China, China would still be poor
Paul Hubbard (EAF) Aug 23, 2015
Reading the latest Chinese growth projections to 2050 brings to mind Karl Marx’s aphorism that history repeats itself first as tragedy, second as farce.
Hong Kong Can't Escape the Turmoil Next Door
William Pesek (Bloomberg View) Aug 23, 2015
China is strangling its own golden goose.
Unlocking Africa’s Trade Potential
Michael Froman and Dana J. Hyde (Project Syndicate) Aug 23, 2015
Earlier this summer, the US Congress reauthorized the African Growth and Opportunity Act for another ten years. To make the most of this extension – the longest in the program’s history – the US and its African partners need to start working toward a more comprehensive partnership.
Raise rates to protect financial system
Avinash Persaud (FT) Aug 24, 2015
Monetary policy cannot just react to inflation data to promote stability.
Corporate Japan should open up more
Barbara Judge (FT) Aug 24, 2015
Appointing foreigners means extra scrutiny for Japanese companies.
China woes increase risk of Fed mistake
David Riley (FT) Aug 24, 2015
Deflationary winds from China and commodities are intensifying.
Germany: Young people wanted
Stefan Wagstyl (FT) Aug 24, 2015
The country’s ageing population is threatening its position as Europe’s largest economy.
Why the Stock Market Is So Turbulent
Neil Irwin (NYT) Aug 24, 2015
This turmoil started in China, but it now includes key factors like oil prices, emerging markets and the Federal Reserve
The Man Who Got China Right
Joe Nocera (NYT) Aug 24, 2015
How did a famed short-seller see troubles in China’s markets that no one else did?
China's Economic Stress Test
WSJ Aug 24, 2015
Capital outflows are making it harder to sustain rapid growth.
China slowdown highlights importance of reforming during peaks, not troughs
Brian Caplen (The Banker) Aug 24, 2015
The slowdown in China is hitting export-dependent emerging economies hard. It is those that planned for the bad times during the good, however, that will suffer the least.
Are China’s GDP Numbers Believable?
Eric Tegler (Diplomat) Aug 24, 2015
Experts debate the accuracy of China's official growth figures. Are the numbers fact – or fiction?
What to Expect From the Fed's Jackson Hole Meeting
Mohamed A. El-Erian (Bloomberg View) Aug 24, 2015
Policy makers have run out of tools to boost the economy.
Who Stands to Lose in Emerging Markets
Mark Whitehouse (Bloomberg View) Aug 24, 2015
Banks in Spain, the U.K. and Taiwan are vulnerable.
Why Oil-Producing Countries Keep on Pumping
Leonid Bershidsky (Bloomberg View) Aug 24, 2015
Russia, Saudi Arabia and the U.S. all have their own reasons.
Steel Production Falls, Stock Markets Follow
Mark Gilbert (Bloomberg View) Aug 24, 2015
It's the real economy, not equities, that should have you worried.
Why Stock Prices Fall, Rise or Both
Justin Fox (Bloomberg View) Aug 24, 2015
Markets wouldn't work if all they did was go up.
Anatomy of a Market Selloff
Mohamed A. El-Erian (Bloomberg View) Aug 24, 2015
The dynamic is familiar, but a different response is needed.
Asia Should Call Truce on Currency War
William Pesek (Bloomberg View) Aug 24, 2015
Four reasons to think twice about devaluing.
Some Good Things About Crashes
Matt Levine (Bloomberg View) Aug 24, 2015
Hundreds of billions of dollars of wealth destruction isn't all bad.
The Market’s Justified Fall
John Cassidy (New Yorker) Aug 24, 2015
Global stock markets, which had risen sharply during a prolonged period of easy money, needed to fall to reflect reality.
Economic Forecasts in the Age of Big Data
Tara M. Sinclair (Project Syndicate) Aug 24, 2015
Economists, policymakers, and business leaders need better data on which to base their forecasts. Fortunately, new sources of information about the economy have recently emerged: the vast collections of private data collected by search engines and other Internet companies.
A Radioactive Bank to be Welcomed
Gareth Evans (Project Syndicate) Aug 24, 2015
On August 27, Kazakhstan will launch a major new international fuel bank, which it will operate on behalf of the International Atomic Energy Agency. The new facility should once and for all remove the main excuse that has been advanced, sincerely or not, for building and maintaining homegrown enrichment capability.
Europe’s Migration Paralysis
Joschka Fischer (Project Syndicate) Aug 24, 2015
While hundreds of migrants have drowned in the Mediterranean Sea this summer, voices have emerged in almost every corner of Europe calling for isolation, mass deportations, and new walls and fences. For their own sake, Europeans should stop treating migrants as a threat and start viewing them as an opportunity.
The Emerging-Market Currency Rout
Andrés Velasco (Project Syndicate) Aug 24, 2015
With the currencies of Malaysia, Indonesia, Turkey, Brazil, Colombia, and Chile hitting record lows last week, currency traders around the world are asking how much lower emerging-market currencies can go. The answer is: Quite a lot.
Back from the brink: Policy reform and debt relief in Greece
William R. Cline (VoxEU) Aug 24, 2015
Economists continue to debate whether – and to what extent – Greek debts should be relieved. This column takes through the details of Greek debt, what relief options are open to Greece, and what the likely consequences of relief might be for all parties. Yet again, there are no easy choices – but that doesn’t mean economists and policymakers shouldn’t try.
Why worries about China make sense
Martin Wolf (FT) Aug 25, 2015
The question is over a shift to a consumption-dominated economy.
Raise rates to protect financial system
Avinash Persaud (FT) Aug 25, 2015
Monetary policy cannot just react to inflation data to promote stability.
Investment banking: Titans retreat
Laura Noonan (FT) Aug 25, 2015
Post crisis, the biggest players turn to less risky activities, but those left still make good returns.
Political Risks May Foil Economic Reform in China
Eduardo Porter (NYT) Aug 25, 2015
There is scant historical evidence that an authoritarian, undemocratic government like China's could pull off the kinds of reforms it is being called on to make.
False Alarm on a Crisis in China
Nicholas R. Lardy (NYT) Aug 25, 2015
Relax. What we're seeing isn't a meltdown, it's an overdue correction.
China’s Meltdown Spells Even More Peril for Petro-States
Keith Johnson (FP) Aug 25, 2015
Oil prices were already fighting a massive hangover. Now, market convulsions in China threaten oil-dependent regimes from Russia to Venezuela.
Three questions (and answers) about finance and firms
Tatiana Didier, Ross Levine and Sergio Schmukler (VoxEU) Aug 25, 2015
It is still not clear which firms issue equity and bonds, what happens to their assets, sales, and employment, and how the performance of issuers compares to that of non-issuers. This column addresses these three questions. First, only a small number of large firms issue securities in a typical country. Second, issuers grow faster than non-issuers in terms of assets, sales, and employment. Third, smaller issuing firms grow faster than larger ones, but larger non-issuing firms grow faster than smaller ones.
Reliving the Crash of '29
Murray N. Rothbard (Mises Daily) Aug 25, 2015
A half-century ago, America — and then the world — was rocked by a mighty stock-market crash that soon turned into the steepest and longest-lasting depression of all time.
How Silver Wrecked China
Stephen Mihm (Bloomberg View) Aug 25, 2015
In the 1930s, it was U.S. policy affecting Beijing, not the other way around.
It's Often a Curse to Be Blessed With Commodities
Justin Fox (Bloomberg View) Aug 25, 2015
Lots of oil and other resources tend to stifle healthy growth.
Panicked Markets Need a Timeout on China
William Pesek (Bloomberg View) Aug 25, 2015
Tantrums won't help Beijing's push for economic reforms.
Ukraine Is Too Corrupt for Debt Deal to Work
Leonid Bershidsky (Bloomberg View) Aug 25, 2015
Investors' haircut matters less than tackling the shadow economy.
China’s Complexity Problem
Stephen S. Roach (Project Syndicate) Aug 25, 2015
There are many moving parts – economic, social, and geopolitical – in China’s daunting transition to what its leaders call a moderately well-off society, and the ultimate challenge may lie in managing the exceedingly complex interplay among them. Is China’s leadership up to the task, or has it bitten off more than it can chew?
Central Bank Confidential
Howard Davies (Project Syndicate) Aug 25, 2015
Over the past two decades, countries around the world have recognized the importance of central banks' independence. In truth, however, there are many degrees of independence, and not all nominally independent central banks operate in the same way – as a new initiative by the Bank of England demonstrates.
Development’s Digital Divide
Carl Bildt (Project Syndicate) Aug 25, 2015
On September 25, world leaders will gather in New York to adopt the new Sustainable Development Goals. And yet, in a time of profound scientific and technological change, the SDGs remain remarkably conventional.
China Meltdown Leaves Global Carmakers Burned
Edward Niedermeyer (Bloomberg View) Aug 25, 2015
World's biggest car market has world's biggest supply glut.
China's 20 Percent Problem
Damien Ma (FA) Aug 25, 2015
Millennial migrants' discontent.
Currency storms create investment opening
Mohamed El-Erian (FT) Aug 26, 2015
In the market washouts, good names get flushed out with the bad.
Make up your mind on banking regulation
Simon Samuels (FT) Aug 26, 2015
Nothing matters more to a bank than how much capital they must have.
China’s policies leave the world reeling
David Pilling (FT) Aug 26, 2015
The sense of panic is exacerbated by mixed messages — take the exchange rate.
China Falters, and the Global Economy Is Forced to Adapt
Keith Bradsher (NYT) Aug 27, 2015
With deepening economic fears about China, multinational corporations and countries are having to respond to a new reality as a once sure bet becomes uncertain.
Behind the commodities bust
Robert J. Samuelson (WP) Aug 26, 2015
The stock market swoon reflects a larger truth: The commodity boom artificially increased past growth.
The TPP: Almost There
Jeffrey J. Schott (Americas Quarterly/PIIE) Aug 26, 2015
It took more than five years, but the Trans-Pacific Partnership (TPP) is now near the finish line. Congressional passage of Trade Promotion Authority (TPA) earlier this summer gave US officials the mandate to conclude the TPP talks and revived procedures to expedite its ratification.
Where China Goes From Here
Bloomberg View Aug 26, 2015
The government is paying the price for its half-hearted reform.
China's Central Bank Won't Do Beijing's Dirty Work
William Pesek (Bloomberg View) Aug 26, 2015
Xi Jinping can't get out of his share of economic reform.
A Tale of Two Liquidities
Matt Levine (Bloomberg View) Aug 26, 2015
It is the best of times, it is the worst of times, for bond market liquidity.
Germany Can Lead the Immigration Debate
Leonid Bershidsky (Bloomberg View) Aug 26, 2015
Starting with a hard look at the hard numbers.
Are Europe's Debt Wars Religious?
Leonid Bershidsky (Bloomberg View) Aug 26, 2015
One official quipped that attitudes to debt are determined by religion. He's kind of right.
China Is Crashing. Don't Freak, America
Noah Smith (Bloomberg View) Aug 26, 2015
Remember Japan's early '90s meltdown? The U.S. did great after that.
Fed Has Bigger Worries Than China
Mark Gilbert (Bloomberg View) Aug 26, 2015
Monetary conditions are already starting to tighten.
Europe’s Nationalist Night Watch
Dominique Moisi (Project Syndicate) Aug 26, 2015
Europeans are increasingly glorifying the past to compensate for the disillusion and frustration of the present and the uncertainty of the future. Sixty years ago, a return to the past was precisely what European countries sought to avoid.
Automation, Productivity, and Growth
Michael Spence (Project Syndicate) Aug 26, 2015
It seems obvious that if a business invests in automation, its workforce – though possibly reduced – will be more productive. So why do the statistics in advanced countries tell a different story?
What Should China Do?
Michael J. Boskin (Project Syndicate) Aug 26, 2015
China’s government has a lot on its plate as it attempts to ease the short-term effects of an economic slowdown while implementing reforms aimed at smoothing the shift to a new growth model. The main danger, glimpsed in the authorities' ham-fisted response to the recent fall in equity prices, is a reversion to greater state control.
The Future is Old
Brigitte Miksa (Project Syndicate) Aug 26, 2015
Rising life expectancy around the world is an accomplishment well worth celebrating. But it is worth remembering that societal aging comes with significant long-term economic consequences – and that many societies are aging at an unprecedentedly rapid pace.
Diplomacy at the Top of the World
James F. Collins, Ross A. Virginia and Kenneth S. Yalowitz (Project Syndicate) Aug 26, 2015
Geopolitical tensions between Russia and the West have been running high in recent years, but there remain areas where constructive cooperation and dialogue remain possible. These include issues critical to the Arctic, such as maritime safety, energy development, responses to oil spills, and fisheries management.
How China's Currency Policies Will Change the World
Stratfor Aug 26, 2015
The recent fluctuations in China's currency typify the best and worst of a globalized world, where developments in one place can instantly change the political and financial calculations of governments in others
Africa at a fork in the road: Taking off or disappointment once again?
Ernesto Zedillo (VoxEU) Aug 26, 2015
There are reasons to be both optimistic and troubled about Africa’s development prospects. This column highlights both perspectives – African economies have come a long way and, although nobody dismisses the role of favourable external conditions, much credit is due to domestic conditions and decisions. The most pressing transformation that is needed remains the strengthening, and in some cases building, of the institutions required for lasting development.
China devaluation stirs deflation fears
Laurence Mutkin (FT) Aug 27, 2015
Concern reflected in falling long-term bond yields and inflation expectations.
The wild world of robot investing
Gillian Tett (FT) Aug 27, 2015
Automated computer programs have changed how markets function.
Emerging Market Rip Tide
WSJ Aug 27, 2015
The U.S. Federal Reserve bank encouraged malinvestment that is hurting global growth.
Using financial sticks to control Iran
Juan Zarate & Chip Poncy (WP) Aug 27, 2015
Employed properly, economic power can effectively isolate rogue Iranian activity.
Why Devaluing the Yuan Won't Help China's Economy
Frank Shostak (Mises Daily) Aug 27, 2015
Earlier this month, the Chinese government decided to depreciate its currency on three consecutive occasions. On August 13, the price of the US dollar was trading at 6.413 — an increase of 3.3 percent against July.
The Bush Leaguers of Beijing
Paola Subacchi (FP) Aug 27, 2015
The current market turmoil shows that China has become a central player in the global economy. But its leaders might not be ready.
Should We Be Worried About Japan’s Economy, Too?
William Sposato (FP) Aug 27, 2015
Amid China’s stock market woes, how worried should we be about Japan’s lackluster economy?
Why QE4 Isn't in the Cards
Mohamed A. El-Erian (Bloomberg View) Aug 27, 2015
Four reasons the markets will have to go it alone this time.
Economic Inequality Is Not Immoral
Harry G. Frankfurt (Bloomberg View) Aug 27, 2015
Comparisons with others don't teach you anything about yourself.
Ukraine's Debt Deal Is a Draw
Leonid Bershidsky (Bloomberg View) Aug 27, 2015
Creditors lost practically nothing, and major problems are unsolved.
How Hugo Chavez Trashed Latin America's Richest Economy
Justin Fox (Bloomberg View) Aug 27, 2015
He overspent and crippled Venezuela's oil industry.
Japan's Central Bank Is China's Biggest Cheerleader
William Pesek (Bloomberg View) Aug 27, 2015
Tokyo is desperate to keep its biggest growth engine running.
Another Great Leap Forward for Development
Javier Solana (Project Syndicate) Aug 27, 2015
Next month, the world will achieve a milestone for global development efforts. The UN General Assembly will adopt the Sustainable Development Goals, an ambitious set of global objectives expected to improve the lives of millions of people by 2030.
A Financial Early-Warning System
Nouriel Roubini (Project Syndicate) Aug 27, 2015
Recent market volatility – in emerging and developed economies alike – is showing once again how badly ratings agencies and investors can err in assessing countries’ economic and financial vulnerabilities. More than ever, the world needs an early-warning system for financial tsunamis.
Europe's New Economic Divide
Chris Miller (YaleGlobal) Aug 27, 2015
Europe still wrestles over how to resolve the debt crisis in Greece. The managing director of the International Monetary Fund warned this month that Greece’s debt remains unsustainable, and she urged the country’s European partners to prepare to provide significant relief. “Few voters anywhere in Europe are excited about bailing out Greece’s government,” writes Chris Miller, Yale doctoral student and a research associate at the Hoover Institution.
The Problems of the Eurozone
Jan-Werner Müller (LRB) Aug 27, 2015
Never before have the struggles among national elites been as visible to the public as they were in the early weeks of this summer, when Greece almost left – or was made to leave – the Eurozone. Never before has an assertion of national popular will, as expressed in the Greek referendum of 5 July, been flouted so thoroughly and so quickly by the enforcers of European economic orthodoxy. Never before have the flaws of the Eurozone been so clearly exposed.
Depreciations without exports
Swarnali Ahmed, Maximiliano Appendino and Michele Ruta (VoxEU) Aug 27, 2015
The export-less depreciation of the yen has opened a debate on the power of exchange rates to boost exports. This column presents new evidence on how the exchange rate elasticity of exports has changed over time and across countries, and how global value chains have affected it. The upshot is that greater integration in global value chains makes exports substantially less responsive to exchange rate depreciations.
Look at China’s politics not the economics
Bill Emmott (FT) Aug 28, 2015
In all the noise and debate, the stock market crash raises three big questions.
QE Is Debt Cancellation
Richard Duncan (Globalist) Aug 28, 2015
The United States, the UK and Japan have far less government debt than is generally understood.
The Fed's Goldilocks Problem
Mohamed A. El-Erian (Bloomberg View) Aug 28, 2015
The central bank wants markets to get used to a little more churn, but not too much more.
Why the Fed Should Postpone Rate Hikes
Anders Borg (Project Syndicate) Aug 28, 2015
As central bankers from around the world gather this week in Jackson Hole for the Federal Reserve’s annual Economic Policy Symposium, one key topic of discussion will be the current global stock-market turmoil. But financial volatility is only one reason why the Fed should not raise interest rates this year.
Cheap Oil and Global Growth
Anatole Kaletsky (Project Syndicate) Aug 28, 2015
The standard explanation is weak Chinese demand, with the oil-price collapse widely regarded as a portent of recession, either in China or for the entire global economy. But this is almost certainly wrong: On all recent occasions when the oil price was halved, faster global growth followed.
China’s Political Interventions
Koichi Hamada (Project Syndicate) Aug 28, 2015
In a planned economy like China’s, where policymakers use various tools to influence asset prices, the instability that arises from overvalued assets could, in theory, be avoided. But, in practice, that does not seem to be the case.
The US Still Runs the World
Simon Johnson (Project Syndicate) Aug 28, 2015
China does not run the world; and, with doubts about its economy's long-term prospects now rattling stock markets worldwide, it appears unlikely to do so anytime soon. From trade to monetary policy, the potential for global leadership still rests with the US.
A Cautionary History of US Monetary Tightening
J. Bradford DeLong (Project Syndicate) Aug 28, 2015
The US Federal Reserve has tightened monetary policy four times in the past 40 years, and all four time the impact on the economy was more harmful than expected. As the Fed prepares to tighten monetary policy once again, an examination of this history suggests that the US is about to enter dangerous territory.
Central bank independence before and after the Great Recession
Donato Masciandaro and Davide Romelli (VoxEU) Aug 28, 2015
Since the onset of the Global Crisis, a number of central bank reforms have been implemented. This column suggests that since the Crisis, a silent restoration towards lower central bank independence might have been in place. The trend is more pronounced in non-OECD countries and, in particular, for the level of operational independence. The findings suggest that governments might be willing to trade off central bank independence to cope with concerns regarding financial stability, high debt and unemployment levels.
China and the world economy: Taking a tumble
Economist Aug 29, 2015
Stockmarket turmoil in China need not spell economic doom. But it does raise questions far beyond the country’s shores.
Financial markets: The Great Fall of China
Economist Aug 29, 2015
Fear about China’s economy can be overdone. But investors are right to be nervous.
Global Texas: More Than Dumb Luck
Richard Parker (Globalist) Aug 29, 2015
In the age of globalization, Texas found itself at the right spot at the right time.
Economic prosperity breeds trust
Markus Brückner, Alberto Chong, Mark Gradstein (VoxEU) Aug 29, 2015
Economists have been exploring the relationship between prosperity and trust since the 1950s. This column explores the possible relationships, arguing that enhanced economic prosperity acts as a signal that fellow citizens are trustworthy. The more optimistic assessment then breeds trust among individual citizens. This theory suggests the possibility of a mutual feedback between trust and economic growth.
Asia more of a threat to Europe than US
Stephanie Flanders (FT) Aug 30, 2015
China’s market rumbles highlight the limits of a more aggressive ECB.
China’s problem is the economy itself
David Daokui Li (FT) Aug 30, 2015
A targeted pinprick approach is needed, not a vast stimulus
Globalization at warp speed
Robert J. Samuelson (WP) Aug 30, 2015
Large, unexpected events can trigger panic buying and selling by investors at keyboards.
India’s role in Asia may not fit ‘Indo-Pacific’ agenda
Hugh White (EAF) Aug 30, 2015
Many observers tend to assume that India will play a large and growing part as a great power in a wider ‘Indo-Pacific’ strategic system, that it will use its growing power to balance and limit China’s regional weight. But some caution is called for — although this outcome is possible, it is far from inevitable.
What If 2008 Crisis Comes Around Again?
Clive Crook (Bloomberg View) Aug 30, 2015
The political will for a response may not be there this time.
China’s caravan parks defy economic fears
Patti Waldmeir (FT) Aug 31, 2015
As the west panics about growth, the Chinese are out enjoying themselves.
Stakes high as Big Four push for M&A work
Sujeet Indap (FT) Aug 31, 2015
Professional services groups are aggressively luring bankers.
Central bank arsenal is losing its bite
Alberto Gallo (FT) Aug 31, 2015
Structural forces limiting growth and inflation are not being addressed.
Emerging markets: Fixing a broken model
James Kynge and Jonathan Wheatley (FT) Aug 31, 2015
As exports slow and foreign capital takes flight, developing nations must act to avert a crisis.
The Saudis Gambled and Texas Won
Glenn Hegar (WSJ) Aug 31, 2015
Energy innovators across the U.S. will always beat those who bet against capitalism.
China blames a different bogeyman each time the economy stumbles
Catherine Rampell (WP) Aug 31, 2015
But the country’s rulers never, ever blame poor governance.
More Evidence that Global Economic Inequality is Decreasing
Daniel Fernández Méndez (Mises Daily) Aug 31, 2015
Over time, the claim that there is increasing income inequality globally has looked increasingly like a fairy tale.
Ben Bernanke, the Law Breaker? The Fed’s “Other” Rate Dilemma
Stuart Parkinson (Globalist) Aug 31, 2015
A look at the unconventional policy measures of the Federal Reserve.
Easy Money Creates the Most Dangerous Bubbles
Mark Buchanan (Bloomberg View) Aug 31, 2015
Economists increasingly recognize the role debt plays in financial disasters.
Maybe This Global Slowdown Is Different
Justin Fox (Bloomberg View) Aug 31, 2015
Slower population growth and consumption point to a major shift.
China Has Lots of Treasuries, Not Much Leverage
William Pesek (Bloomberg View) Aug 31, 2015
Three reasons not to fear a big selloff of U.S. debt.
The Price of European Indifference
Bernard-Henri Lévy (Project Syndicate) Aug 31, 2015
Europe’s migration debate has taken a disturbing turn, propelled by a multitude of myths, manipulations, and blatant lies. The consequences will be devastating, not only for the people desperately trying to escape oppression, terror, and massacre, but also for Europe itself.
A Tale of Two Theories
Jean Pisani-Ferry (Project Syndicate) Aug 31, 2015
Global growth continues to disappoint, with the IMF once again downgrading its forecast for this year. Is "secular stagnation" the cause, or is the monetary stimulus being used to fight that stagnation to blame?
Will Americans Become Poorer?
Martin Feldstein (Project Syndicate) Aug 31, 2015
Robert Gordon of Northwestern University has launched a lively and important debate about the future rate of US economic growth. But, though Gordon's gloomy assessment of America’s growth prospects deserves to be taken seriously, there are good reasons to reject his argument.
Migration Beyond Crisis Mode
Ana Palacio (Project Syndicate) Aug 31, 2015
Over the past seven years, Europe has been in crisis mode almost without interruption, implementing stop-gap measures accompanied by empty or hyperbolic rhetoric. This approach is not nearly enough to address the current migration challenge, which will not be resolved in the foreseeable future.
Dynasties versus development
Jan Frederick P. Cruz, Ronald U Mendoza (VoxEU) Aug 31, 2015
Clinton. Bush. Kennedy. Political family dynasties have survived the establishment of democracies in the developed and developing world and, in some cases, are strengthening. This column argues that political dynasties are still with us, and that it’s fairly easy to see why. Whoever said that elections are the only time that the vote of the richest citizen is equivalent to that of the poorest needs to start rethinking whether this still holds true.
The state of the monetary union
Thomas Philippon (VoxEU) Aug 31, 2015
The Eurozone crisis continues to take centre stage. This column discusses how deep the EZ crisis is, how long it will last, and what should be the policy priorities. A number of findings emerge. First, the difference in labour market performance between the US and the Eurozone is one of degree but not of kind. Second, the economic consequences of the sovereign debt crisis will be mostly gone by 2018, but the political crisis will continue. Third, enforcing fiscal rules via political arm twisting is a recipe for disaster. Market discipline must instead be brought back, but without financial fragmentation. Limited and conditional Eurobonds are the best way to do so.