News & Commentary:

Articles/Commentary

A dangerous moment for the world economy
FT View Aug 1, 2020
Rise in European cases shows there is no respite from the pandemic.

Air travel's sudden collapse will reshape a trillion-dollar industry
Economist Aug 1, 2020
The pandemic has knocked the airline-industrial complex harder than it has most sectors.

In emerging markets, short-term panic gives way to long-term worry
Economist Aug 1, 2020
Emergency measures have helped keep economies alive, but could have nasty side-effects in the long term.

Pandemic puts countries' resilience to the test
FT View Aug 2, 2020
Governments must resist the urge towards protectionism.

The anatomy of a very brief bear market
Gavyn Davies (FT) Aug 2, 2020
Dramatic changes in the equity risk premium may have caused US stock market volatility.

EU digital protectionism risks damaging ties with the US
Charlene Barshefsky (FT) Aug 2, 2020
Both sides should focus on the existential challenge of China.

Tourism's collapse could trigger next stage of the crisis
Rana Foroohar (FT) Aug 2, 2020
The economic impact will stretch well beyond the travel industry.

Dateline US: Economic Power for the 99%
David Apgar (Globalist) Aug 2, 2020
Economic shame haunts hard-working Americans. They ask themselves why they can't do as well as their parents.

Data Stress the Urgency for Healthy Reopenings
Mohamed A. El-Erian (Bloomberg View) Aug 2, 2020
The virus and economic numbers are worrisome, but a concerted effort from government and the private sector can turn them around.

Patience, risk-taking, and international differences in student achievement
Eric Hanushek, Lavinia Kinne, Philipp Lergetporer, and Ludger Woessmann (VoxEU) Aug 2, 2020
Differences in student achievement are strongly related to both future individual earnings and national economic growth. Cultural traits that underlie intertemporal decision-making may affect how much students learn. Using data for close to two million students across 49 countries during 2000–2018, this column looks at levels of patience and risk-taking and its effect on student performance. A positive effect of patience and a negative effect of risk-taking can account for two-thirds of the cross-country variation in student achievement. Among migrant students, patience and risk-taking levels of the students' countries of origin had remarkably similar effects on educational performance in the host country.

Carbon credit markets still have a way to go
Siddarth Shrikanth (FT) Aug 3, 2020
The world's emissions trading systems are maturing, but still patchy in their coverage.

How Brexit may strengthen the west
Gideon Rachman (FT) Aug 3, 2020
A revived EU will be a stronger partner for the US.

Argentina's debt dance: a pivot to the IMF?
Eric Lalo (FT) Aug 3, 2020
Buenos Aires' frustration in restructuring its debt ahead of a full-scale default speaks to an inherent conflict between sovereigns and their creditors. In light of this, the country may be better off waiting for the current negotiations to tail off than giving in to creditors' demands.

Erdogan gambles on fast recovery as Turkey burns through reserves
Laura Pitel (FT) Aug 3, 2020
With tourism struggling and investors fleeing, Ankara is spending billions to fend off a fresh currency crisis.

Indonesia opens a floodgate of financial risk
William Pesek (AT) Aug 3, 2020
Bank Indonesia's monetization of national debt is an aggressive but highly perilous move.

Covid-19 Hastens the Work-at-Home Revolution
Erica Komisar (WSJ) Aug 3, 2020
Parents, children and employers are seeing personal and productive benefits.

The Pandemic Is a Dress Rehearsal
Walter Russell Mead (WSJ) Aug 3, 2020
The world is entering a transformative era. Prepare for more chaos and instability.

The myth of unemployment benefits depressing work
Catherine Rampell (WP) Aug 3, 2020
Five recent studies disprove GOP talking points against federal pandemic aid.

Gold like the price of life insurance on the Titanic
David P Goldman and Uwe Parpart (AT) Aug 3, 2020
A fast-sinking dollar puts a premium on buoyant assets like gold and Bitcoin while China's currency is also an emerging hedge.

How Well Have Central Banks Performed in This Crisis?
Liaquat Ahamed (BRINK) Aug 3, 2020
The objectives of central banks have changed dramatically over the decades, which causes their response to this economic crisis from COVID-19 and the 2008 crash to differ. That being said, what exactly can central banks do in this current moment?

South Africa Looks Toward Inclusive Recovery to Stabilize Debt, Boost Growth
Dondo Mogajane (IMF) Aug 3, 2020
How the government has responded to the COVID-19 crisis, how IMF financing will help to stabilize the economy, and strategies for addressing debt and spurring growth.

Vietnam and Mexico could become major players in global supply chains
Euijin Jung (PIIE) Aug 3, 2020
The US-China trade war and the COVID-19 pandemic have jolted big multinational corporations (MNCs) that manufacture goods in China for export to the United States. Major companies like Omnidex, GoPro, Apple, Microsoft, and Google have either already shifted or announced plans to shift production of inputs in their global supply chains from China to Vietnam and/or Mexico, taking advantage of their low labor costs and proximity to the Chinese and US markets, respectively.

How Robust Is the CDI to Changes in Weights?
Euan Ritchie (CGD) Aug 3, 2020
Each year, the Center for Global Development produces the "Commitment to Development Index" (CDI), that evaluates 40 of the most powerful countries across a range of indicators that measure their impact on developing countries. Development policy is far more than just aid, encompassing agreements that regulate interactions with developing countries, policies governing migration and capital flows, impact on the environment, and a myriad of other factors.

How Central Banks Made the Covid Panic Worse
Kristoffer Mousten Hansen (Mises Wire) Aug 3, 2020
Thanks to central banks, people now believe the myth that it is possible to shut down the economy and everything will be fine if we just print a lot of new money.

Developing Nations Are Dealt a One-Two Hit to Growth
Noah Smith (Bloomberg View) Aug 3, 2020
The coronavirus was bad enough, but a faltering U.S. is no longer in a position to offer much help.

The Other Putin on Europe's Doorstep
Mark Leonard (Project Syndicate) Aug 3, 2020
By weaponizing immigration and launching new foreign adventures, Turkish President Recep Tayyip Erdogan is increasingly acting like his Russian counterpart. And though such behavior speaks to a deteriorating political situation at home, Europeans can no longer assume that Turkey will remain firmly in the Western fold.

Solidarity with the Germans
Yanis Varoufakis (Project Syndicate) Aug 3, 2020
No sooner had the European Union's pandemic recovery fund, dubbed Next Generation EU, been approved than it was hailed as Europe's first move toward fiscal union. If anything, the way debt mutualization was snuck into the financing of the scheme will probably turn out to have been a mortal blow to a proper fiscal union.

School Choice Is the Only Option
John B. Taylor (Project Syndicate) Aug 3, 2020
If there is a potential silver lining to the United States' experience with COVID-19, it can be found in the domain of primary and secondary education, where the demand for alternatives to traditional public schools is surging. The pandemic has both laid bare the US education gap and pointed the way to a solution.

Zimbabwe's Outlaw Regime
Tawanda Mutasah (Project Syndicate) Aug 3, 2020
By arresting a prominent corruption-busting reporter, the Zimbabwean government has once again demonstrated its intention to use the law as a political weapon to criminalize journalism. Finally, the international community is seeing behind President Emmerson Mnangagwa's lofty rhetoric and recognizing the true nature of his regime.

Should Governments Spend Away?
Raghuram G. Rajan (Project Syndicate) Aug 3, 2020
With sovereign-bond markets still showing little concern for the massive levels of borrowing and spending across advanced economies, it is tempting to think that there is effectively no limit to further stimulus. But we owe it to future generations to recognize how spending today could affect investment tomorrow.

Financial market reactions to monetary policy signals
Carlo Altavilla, Refet Gürkaynak, Roberto Motto, and Giuseppe Ragusa (VoxEU) Aug 3, 2020
Mapping the impact of central bank policy communications onto yield curve changes is important but challenging. This column studies policy communications of the ECB and maps these communications onto yield curve changes by studying the information flow on days when a monetary policy decision is communicated. Using the now publicly available Euro Area Monetary Policy Event-Study Database,it finds that different monetary policy measures affect different segments of the interest rate term structure, with policy rate changes mostly influencing the short end of the curve, quantitative easing measures more the long end, and forward guidance policies affecting intermediate maturities.

Integration and reforms
Nauro Campos, Vera Eichenauer, and Jan-Egbert Sturm (VoxEU) Aug 3, 2020
Economists have long assumed a virtuous cycle between integration and reforms. Implementing structural reforms helps maximise gains from integration, while the deepening of integration would foster reforms. This column discusses new research on European integration, its relationship with reforms and economic growth. It finds that integration triggered product market, but neither labour nor financial market, reforms. It also shows that, to understand the effects of reforms on economic growth, sectoral differences are less important than country heterogeneity.

Population ageing reduces the government spending multiplier
Henrique Basso and Omar Rachedi (VoxEU) Aug 3, 2020
Advanced and developing economies are experiencing a swift process of population ageing that will shape both long-run macroeconomic trends, such as economic growth, as well as short-term business cycle fluctuations. Although the implications of population ageing on countries' fiscal capacity have been extensively analysed, this column argues that secular shifts in demographics can also influence the effectiveness of fiscal policy as a demand-management tool. Using a New Keynesian model with a lifecycle structure, it shows that output fiscal multipliers are larger in younger economies.

How to prevent the looming sovereign debt crisis
Joseph Stiglitz and Hamid Rashid (VoxEU) Aug 3, 2020
From Latin America's lost decade in the 1980s to the more recent Greek crisis, there are plenty of painful reminders of what happens when countries cannot service their debts. This column argues that a global debt crisis today would likely push millions of people into unemployment and fuel instability and violence around the world, and proposes a multilateral sovereign debt buyback facility which could be managed by the IMF.

Latin America Can't Survive the Coronavirus Crisis Alone
Walter Kerr (FP) Aug 3, 2020
Countries are too rich to access conventional aid, but they can't cope by themselves.

The Highs and Lows of Productivity Growth
Andrew Foerster, Christian Matthes, and Lily M. Seitelman (FRBSF Econ Letter) Aug 3, 2020
Productivity growth shows evidence of switching between long periods of high and low average growth. Estimates suggest that the United States has been in the low-growth regime since 2004. Assuming this low growth continues, productivity growth in the year 2025 would be 0.6%. By dropping this assumption and allowing for a switch to consistent higher growth, an alternative estimate forecasts that the distribution of possible productivity growth across quarters could average about 1.1% in 2025.

Implications of Fed Balance Sheet Growth
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF Econ Group) Aug 3, 2020
As a follow-up to a recently published report, we explore the implications of the phenomenal increase in the Fed's balance sheet so far this year.

Onward, Upward for the Eurozone Economy and Currency
Nick Bennenbroek and Jen Licis (WF Econ Group) Aug 3, 2020
The Eurozone economy suffered a record decline in activity in the second quarter, although there are some early, encouraging signs the Eurozone finished Q2 and started Q3 with a reasonable degree of momentum.

It is fiscal, not monetary, policy that has really driven credit
Jim McCormick (FT) Aug 4, 2020
Governments have the tools to fix companies' solvency problems — but at a cost.

Sustainable funds must work harder to vet their investments
Sarah O'Connor (FT) Aug 4, 2020
Clinging to pseudo-scientific scoring systems is no substitute for through, time-consuming research.

Libor and Euribor replacements are also vulnerable
Michael Troege (FT) Aug 4, 2020
Scandal-hit interbank lending rates need reform starting with greater accountability

Tax and spend is the new economic orthodoxy
Martin Sandbu (FT) Aug 4, 2020
Old 'certainties' and the interests that defended them will be ditched for good

China, Cambodia trade pact more form than substance
David Hutt (AT) Aug 4, 2020
Bilateral FTA to be symbolically signed same day EU punitively imposes tariffs but the deal will do little to save Cambodian industry.

Gold resumes climb as US dollar struggles
Uwe Parpart (AT) Aug 4, 2020
The US economy is on life support and Congress can't even agree on recharging the batteries in the life support machines.

Global Imbalances and the COVID-19 Crisis
Martin Kaufman and Daniel Leigh (IMF) Aug 4, 2020
New trade barriers will not be effective in reducing imbalances.

Some People Made Money on Negative Oil Prices
Matt Levine (Bloomberg View) Aug 4, 2020
Also TikTok key money, green structured notes and alternative data.

Taking the Emotion Out of Investment Decisions
Barry Ritholtz (Bloomberg View) Aug 4, 2020
Simon Hallett imposed a set of rules on traders. The result was fewer errors and better returns.

Why Markets Don't Seem to Care If the Economy Stinks
Barry Ritholtz (Bloomberg View) Aug 4, 2020
So many of the most battered industries don't matter much because of the way stock indexes are structured.

Is China Winning the AI Race?
Eric Schmidt and Graham Allison (Project Syndicate) Aug 4, 2020
The COVID-19 pandemic has revealed the capabilities of the United States and China to deploy artificial intelligence in solving real-world problems. While America's performance hasn't exactly inspired confidence, it maintains some important competitive advantages.

Time inconsistency in recent monetary policy
Charles Goodhart, Tatjana Schulze, and Dimitri Tsomocos (VoxEU) Aug 4, 2020
A decade of near-zero, and even negative, interest rates in advanced economies has both encouraged the continued accumulation of debt and a search for yield in riskier assets, while at the same time eroding bank profitability in the retail business. This column discusses some of the palliative measures that central banks have taken to offset the erosion of bank profitability, and raises the question of whether, and how, the longer-term implications of the excessive accretion of debt will be handled.

The Global Sanctions Data Base
Gabriel Felbermayr, Aleksandra Kirilakha, Constantinos Syropoulos, Erdal Yalcin, and Yoto Yotov (VoxEU) Aug 4, 2020
In recent years, economic sanctions have increasingly become 'the tool of choice' in responses to international political challenges related to geo-political conflicts. But are sanctions successful in achieving their purported objectives? And what are the economic costs of sanctions in a world that is increasingly interconnected with global value-chains and multinational enterprises? This column introduces a new dataset of economic sanctions that covers all bilateral, multilateral, and plurilateral sanctions in the world from 1950 to 2016 that can be utilised to analyse sanctions policies.

How households' inflation expectations matter
Philippe Andrade, Erwan Gautier, and Eric Mengus (VoxEU) Aug 4, 2020
According to macroeconomic theory, managing inflation expectations is crucial for stabilising the economy. This is particularly true in times of crisis, when the nominal interest rate hits its lower bound. This column provides new evidence from France on how the inflation expectation channel operates in terms of consumer spending. The results suggest that households make consumption decisions based on the broad inflation regime that they expect, rather than with regards to the precise inflation forecast.

The WTO's role is more important than ever
FT View Aug 5, 2020
Pushback against globalisation has made a neutral referee even more valuable.

China is far ahead on drilling for 'the new oil'
Leo Lewis (FT) Aug 5, 2020
Allegations of information theft in Houston point to the importance of energy data.

US-China tensions feed into the geopolitics of monetary policy
David Lubin (FT) Aug 5, 2020
When the Federal Reserve advances, the People's Bank of China retreats.

Pandemic crisis has cemented Conte's political legitimacy
Miles Johnson (FT) Aug 5, 2020
The Italian premier's longevity has defied expectations and is likely to last after his victorious return from Brussels.

Pandemic revives Gulf fears over food security
Andrew England and Emiko Terazono (FT) Aug 5, 2020
Vulnerable to import shortages and sharp price rises states are investing overseas and in agritech at home.

Argentina's political double act moves on to next challenge
Benedict Mander (FT) Aug 5, 2020
Recession and talks with the IMF loom after deal with private creditors.

The Swedish Economic Model
WSJ Aug 5, 2020
Stockholm strikes a different balance between virus and GDP.

Lebanon was already facing multiple crises. Now this.
Luna Safwan (WP) Aug 5, 2020
When that is combined with an economic collapse, unpredictable becomes unbearable and deadly.

The high taxpayer cost of "saving" US jobs through "Made in America"
Gary Clyde Hufbauer and Euijin Jung (PIIE) Aug 5, 2020
President Donald Trump and presumptive Democratic presidential nominee Joe Biden differ on many issues, but government procurement is not one of them. "Buy American, Hire American" was Trump's campaign slogan in 2016, while "Made in America" and "Buy American" together appear 29 times in Biden's 2020 policy document. Trump promised to crack down on federal agencies that grant excessive waivers to skirt Buy American rules, and Biden committed to closing loopholes that allow foreign content to creep into American-made goods. Both leaders harbor special affection for manufactures, particularly for iron and steel melted and poured on American soil, and for the merchant marine to carry goods between US ports. The claim of generating well-paid jobs is central to the argument for spending taxpayer dollars solely on American goods.

The United States should finally support an allocation of the IMF's special drawing rights
Edwin M. Truman (PIIE) Aug 5, 2020
On July 31, the US House of Representatives passed legislation to authorize and instruct the US administration to support an allocation of not less than two trillion special drawing rights (SDR), or $2.8 trillion at the current exchange rate for the SDR, to help members of the International Monetary Fund (IMF) deal with the economic ravages of the COVID-19 pandemic. The Senate should now pass the legislation to induce the administration to lead from the rear and support an SDR allocation before the United States becomes completely isolated.

Extraordinary Is the New Vanilla for Australia's Policy Makers
Daniel Moss (Bloomberg View) Aug 5, 2020
By swooping in with a bond purchase, the central bank is showing its commitment to yield curve control.

Recovering from the EU's Recovery Fund
Willem H. Buiter (Project Syndicate) Aug 5, 2020
Amid the celebrations following European leaders' deal on a €750 billion recovery fund, many seem to have forgotten that both the European Union and the eurozone remain under constant threat of sovereign-debt crises. Until that fundamental weakness is addressed, the champagne corks should stay in their bottles.

Avoiding the Japanification of Europe
Lucrezia Reichlin (Project Syndicate) Aug 5, 2020
The COVID-19 crisis has upended many existing European Union rules and institutional guidelines. If EU leaders take this as an opportunity to pursue radical, forward-looking change, the COVID-19 upheaval could move the bloc to a better place.

Minding the Perils of Progress
Daron Acemoglu (Project Syndicate) Aug 5, 2020
The COVID-19 crisis has been a brutal reminder that, for all of our wealth and technological mastery, we are still vulnerable to catastrophic tail risks. To ensure future prosperity, we must adopt a growth strategy that places collective risks front and center, rather than treating them as an afterthought.

COVID Coin?
Kenneth Rogoff (Project Syndicate) Aug 5, 2020
The COVID-19 pandemic is accelerating the long-term shift away from cash, and monetary authorities risk falling behind. A recent report from the G30 argues that if central banks want to shape the outcome, they need to start thinking fast.

Competition and Quality: Evidence from High-Speed Railways and Airlines
Hanming Fang, Long Wang, and Yang Yang (VoxChina) Aug 5, 2020
This paper investigates whether competition spurs quality improvement using the entry of Beijing-Shanghai high-speed rail (HSR) as an exogenous increase in competition to affected flights to destination cities along the HSR line. We find that competition from the entry of HSR leads to significant reductions in the mean and variance of travel delays on the affected airline routes and that these improvements are mainly driven by reductions in departure delays and the duration of taxi-in time at the destination airport.

The risks of high public debt despite a low interest rate environment
Andrea Presbitero and Ursula Wiriadinata (VoxEU) Aug 5, 2020
As interest rate-growth differentials (r-g) have turned negative in many countries, now could be the time for governments to pursue fiscal expansions. However, the downside risks of such policies should not be disregarded. Using a large sample of economies, this column finds that high and increasing public debts, especially when denominated in foreign currencies, can lead to more volatile r-g dynamics. In particular, this is associated with higher probabilities of r-g reversals, tail risks, and an increased exposure to domestic and global shocks. Policymakers should take note of these risks when designing future fiscal expansions.

Beirut explosion deepens the tragedy of Lebanon
FT View Aug 6, 2020
Port disaster reflects same misgovernance that has left economy in crisis.

Europe's steel industry needs a credible plan to go green
Ben Jones (FT) Aug 6, 2020
The end user needs to know how rising material costs are helping decarbonisation.

Pandemic aid is exacerbating US inequality
Gillian Tett (FT) Aug 6, 2020
Businesses owned by black people have struggled to access programmes.

Why banks' declining reserves matter for the dollar
Wenxin Du (FT) Aug 6, 2020
Last year's repo mayhem underlined the importance of banks keeping a big cash pile at the Fed.

The Real Reason the American Economy Boomed After World War II
Jim Tankersley (NYT) Aug 6, 2020
How expanding opportunity for women, immigrants and nonwhite workers helped everyone — and why we need to do so again.

So Much for Trump's Trade Promise
WSJ Aug 6, 2020
He slaps Canada with a 10% aluminum tariff despite the USMCA.

How Lockdowns Fuel Inequality
WSJ Aug 6, 2020
Politicians deplore the wealth disparities their policies create.

Covid-19 threatens to overwhelm the developing world
Michael Gerson (WP) Aug 6, 2020
The United States must provide aid, for moral and security reasons.

Why the US Economy Is Stronger Than the Eurozone's
Daniel Lacalle (Mises Wire) Aug 6, 2020
Debt and recession in the United States are big problems. But in both cases, metrics show a better situation in the US than in the eurozone.

COVID-19 Response in Emerging Market Economies: Conventional Policies and Beyond
Martin Mühleisen, Tryggvi Gudmundsson, and Hélène Poirson Ward (IMF) Aug 6, 2020
Emerging markets are likely to face an uphill battle.

Coronavirus recovery: invest rainy day savings to boost Hong Kong's economy
Alicia García-Herrero (SCMP/Bruegel) Aug 6, 2020
The Hong Kong government might want to consider diversifying its economy by using part of the savings earmarked for rainy days. Beyond cushioning the negative impact of Covid-19 on SMEs and households, it is one more reason to spend.

"Buy American" and similar domestic purchase policies impose high costs on taxpayers
Gary Clyde Hufbauer and Euijin Jung (PIIE) Aug 6, 2020
"Buy American" and similar buy national requirements for public procurement come with heavy price tags. Using a computable partial equilibrium model, Gary Hufbauer and Euijin Jung estimate that "Buy American" requirements increased US domestic procurement costs across federal and state governments by 5.6 percent in 2017, costing US taxpayers an additional $94 billion. Buy national requirements abroad place a similar burden on taxpayers, with protection in the European Union's public procurement practices incurring additional costs of $471 billion in 2017.

The Robot Question
Edmund S. Phelps (Project Syndicate) Aug 6, 2020
Although robots that can perform human labor will put downward pressure on wages in the short term, they also will increase the rate of profit, encouraging more investment and a recovery in the wage rate. It is not so much the economics of new technologies that should worry us, but rather the politics and ethics.

Morgue Testing the US Economy
J. Bradford DeLong (Project Syndicate) Aug 6, 2020
Owing to the lack of testing capacity, there is no way to know for sure just how bad the COVID-19 epidemic in the United States has become as a result of this summer's "Sunbelt second wave." But judging by the latest data on morbidity and unemployment-insurance claims, no one should bet on economic recovery in the third quarter.

Are Financial Markets None the Wiser?
Jim O'Neill (Project Syndicate) Aug 6, 2020
Obviously, a disaster scenario in which COVID-19 vaccine trials fail and the pandemic spins out of control would expose the ongoing equity rally as a case of irrational exuberance. But the worst-case scenario isn't necessarily the most likely, and the bears have not adequately considered the possibility of permanent positive changes.

The Other Global Power Shift
Joseph S. Nye, Jr. (Project Syndicate) Aug 6, 2020
The world is increasingly obsessed with the ongoing power struggle between the US and China. But the technology-driven shift of power away from states to transnational actors and global forces brings a new and unfamiliar complexity to global affairs.

The US May Lose in Trump's TikTok War
Shang-Jin Wei (Project Syndicate) Aug 6, 2020
US President Donald Trump's apparent attempt to force the sale of Chinese social-media app TikTok to an American buyer introduces substantial risks – not least to US firms. By acting as if there were no rules to international business, Trump is all but ensuring that there won't be.

Interest rates, market power, and financial stability
David Martinez-Miera and Rafael Repullo (VoxEU) Aug 6, 2020
The question of whether low interest rates foster or hamper financial stability has recently received ample attention both from policy as well as the academic circles, leading to the development of a large, mostly empirical, literature on the topic. This column presents a framework to analyse the relevance of the financial sector's market structure in answering this question. It shows that in markets with low competition lower safe rates result in less risk-taking by financial intermediaries, while in highly competitive markets lower safe rates result in higher risk-taking.

Going bankrupt in China
Bo Li and Jacopo Ponticelli (VoxEU) Aug 6, 2020
The lack of an efficient and independent judicial system can impede economic development by negatively affecting firms' ability to invest, innovate, and reallocate capital towards more productive projects. This is indeed a concern for China. This column exploits the introduction of specialised bankruptcy courts in different Chinese cities between 2007 and 2017 to examine its effects on the local economy. Specialisation leads to faster resolution of bankruptcy cases, especially for state-owned firms. It also increased local firms' average product of capital and decreased the share of labour employed in zombie-intensive industries compared to cities where insolvency is still resolved exclusively by civil courts.

The Pandemic Depression
Carmen Reinhart and Vincent Reinhart (FA) Aug 6, 2020
The global economy will never be the same.

A strong India cannot be built on religious division
FT View Aug 7, 2020
Narendra Modi should focus on jobs and economy, not polarisation.

Fed policy could leave retirees broke after crisis
John Dizard (FT) Aug 7, 2020
A 5% yield on a $1m nest egg delivers $50,000 a year but the egg must be five times bigger to produce that at 1%.

Aging Economies May Benefit Less from Fiscal Stimulus
Jiro Honda and Hiroaki Miyamoto (IMF) Aug 7, 2020
Population aging is posing significant challenges to policymakers.

US unemployment rate falls again but still little progress for people who have not been temporarily furloughed from their jobs
Jason Furman and Wilson Powell III (PIIE) Aug 7, 2020
The official unemployment rate continued to fall in July from 11.1 in June to 10.2, a slowdown from the improvement in May and June. As in prior months of the pandemic, the official unemployment rate continues to understate the unemployment rate from a historically-comparable perspective because it counts an extra 1.4 million people who were "not at work for other reasons" as employed (the so-called "misclassification error") and also because 4.7 million people have left the labor force since February, more than would be expected even given this large increase in unemployment. Adjusting for these factors our "realistic unemployment rate" was 12.0 percent in July, falling slightly faster than the official unemployment rate. The small reduction in this gap reflects continued improvement in reducing the misclassification error that was partially offset by a slight fall in labor force participation, a potentially worrying sign this early in the recovery.

Why Asia and Europe Are Responding to the Same Crisis Differently
Ho Ee Khor and Rolf Strauch (Project Syndicate) Aug 7, 2020
In Europe and Asia alike, policymakers must begin considering how to translate emergency measures into more sustainable policies. Their approaches may not be the same, but their objectives – protecting lives and livelihoods, especially those of the most vulnerable – should be.

The High Cost of a Strong Euro
Daniel Gros (Project Syndicate) Aug 7, 2020
Given their strong performance during the COVID-19 crisis, and their US counterparts' ongoing debacle, European leaders who have been pushing for a stronger global role for the euro may be about to get their wish. But it may not be long before they regret it.

The Master and the Prodigy
William H. Janeway (Project Syndicate) Aug 7, 2020
There is little doubt that John Maynard Keynes fundamentally shaped economics and policymaking in the twentieth century. Less appreciated is that he owes some of his central insights to a brilliant Cambridge polymath who died in 1930 at age 26.

Global politics from the view of the political-economy trilemma
Joshua Aizenman and Hiro Ito (VoxEU) Aug 7, 2020
The political-economy trilemma, introduced by Dani Rodrik (2000), asserts that the three policy goals of national sovereignty, democracy, and globalisation, cannot all be achieved to the full extent simultaneously. This column investigates this trilemma by developing indexes that measure the extent of attainment of the three factors during 1975-2016. It finds that there is a linear relationship between globalisation and national sovereignty (i.e. a dilemma) for industrialised countries, while all three indexes are linearly correlated (i.e. a trilemma) for developing countries.

The cleansing effect of banking crises
Reint Gropp, Steven Ongena, Jörg Rocholl, and Vahid Saadi (VoxEU) Aug 7, 2020
Recessions are periods of low opportunity costs for time and resources, and hence can facilitate a productivity-enhancing reallocation of resources and improve productivity growth. However, recessions can also slow productivity growth by intensifying credit frictions, for instance, through the accumulation of legacy assets in the banking sector. This column investigates the interaction between these two channels in the recent banking crisis and shows that US regions with more restructuring of inefficient banks during the post-Global Crisis recession experienced higher productivity growth in the real sector in subsequent years.

The heterogeneous transmission of ECB policies
Giancarlo Corsetti, Joao B. Duarte, and Samuel Mann (VoxEU) Aug 7, 2020
A persistent challenge for the ECB has been meeting the various needs and demands of euro area member states. This column provides empirical and quantitative evidence suggesting that the transmission of the ECB's monetary policy varies significantly across member states. For variables such as those related to housing and labour markets, the dispersion of responses to a monetary shock is twice as large as the average response. The results also suggest that the disruption to market integration brought about by the COVID-19 crisis may create further challenges to conducting monetary policy in the euro area.

Support for small businesses amid COVID-19
Charles Goodhart, Dimitri Tsomocos, and Xuan Wang (VoxEU) Aug 7, 2020
A sizeable proportion of enterprises, especially SMEs, in receipt of financial assistance from the government will fail to repay. This column asks whether, and to what extent, it may be beneficial to apply a screening mechanism to deter those mostly likely to fail to repay from seeking financial assistance in the first place. The answer largely turns on the relative weights attached for the objectives of stabilisation as compared with allocative efficiency.

It's a New Europe—if You Can Keep It
Adam Tooze (FP) Aug 7, 2020
The continent has managed to take a great leap forward—but there still might be a crash landing.

What Marks the Spot for U.S. Dollar Weakness?
Tim Quinlan, Shannon Seery, and Jen Licis (WF Econ Group) Aug 7, 2020
Recent U.S. dollar weakness is less pronounced when measured against the currencies of U.S. trading partners. The outlook for trade, and to a lesser extent inflation, relies more on demand at home and abroad.

Dividend cuts are an opportunity for a reset
FT View Aug 8, 2020
Crisis should prompt investors to back businesses that reinvest in long-term growth.

Emerging market central bankers have had a good crisis
Jonathan Wheatley (FT) Aug 8, 2020
Researchers hail policymaking 'revolution' as bond-buying programmes spread.

Central bankers are caught in a leverage trap
Joe Rennison (FT) Aug 8, 2020
Response to the coronavirus crisis has made a tricky problem harder to solve.

Trump's Go-It-Alone Stimulus Won't Do Much to Lift the Recovery
Jim Tankersley (NYT) Aug 8, 2020
A series of executive actions will provoke lawsuits but is unlikely to stoke faster growth in an economy that has cooled this summer.

Financial markets and news about the coronavirus
Harry Mamaysky (VoxEU) Aug 8, 2020
The COVID-19 crisis has been characterised by extremely volatile markets and extremely negative news coverage. Using all relevant Reuters news articles from January to June 2020, this column shows that a 12-topic model effectively tracks the evolution of crisis news flow. In the early stages of the crisis, markets frequently reacted to uninformative news. This dynamic underwent a structural break in mid-March, likely due to Fed interventions, after which markets became more 'normal'. Investors, lacking early hard evidence on the effects of the crisis, interpreted many news stories as being informative about future pandemic outcomes, even though they were not.

The COVID-19 shock and consumer credit
Akos Horvath, Benjamin Kay, and Carlo Wix (VoxEU) Aug 8, 2020
The COVID-19 pandemic and the ensuing public health interventions have disrupted economic activity in the US. This column examines the impact of the COVID-19 shock on the use and availability of consumer credit through March 2020. In counties affected by the pandemic, creditworthy borrowers reduced their credit use, but riskier borrowers increased their outstanding credit card balances. While both pandemic severity and non-pharmaceutical interventions negatively affected credit use, the pandemic itself was the main driver. Banks reduced the credit limits and increased the APR spreads of newly issued cards to riskier borrowers, consistent with a flight-to-safety response.

Board dynamics over the startup life cycle
Michael Ewens and Nadya Malenko (VoxEU) Aug 8, 2020
Corporate governance of privately held firms is becoming increasingly important given the rise in the number of private firms and recent governance scandals at such firms. This column examines the structure of the board of directors at venture-capital-backed startups and documents new facts about private-firm board size, the allocation of control, and board-composition dynamics. Within firms, board control shifts over time from venture capitalists to entrepreneurs. Independent directors play a previously under-explored 'mediation' role, mediating and resolving disputes between venture capitals and entrepreneurs.

Remittances/demographics: an expensive exodus
Lex Aug 9, 2020
Lower hard-currency income dents national balance sheets and there are human costs too.

The success of the EU recovery fund will depend on bold missions
Mariana Mazzucato (FT) Aug 9, 2020
The historic plan is a turning point for the bloc but policymakers need new tools to direct it.

Pandemic threatens African economic success
Paul Collier (FT) Aug 9, 2020
Fall in commodity prices benefits advanced economies.

The great trade unwinding
Rana Foroohar (FT) Aug 9, 2020
Commerce patterns have not shifted much recently. That is about to change dramatically.

Innocent Aluminum Bystanders
WSJ Aug 9, 2020
No surprise, Canada retaliates against Trump's new 10% tariffs.

Latin America must reject Trump's attempt to leave his mark on the region's crucial development bank
Christopher Sabatini (WP) Aug 9, 2020
Tackling the urgent coronavirus crisis will require statesmanship, not the sort of U.S. political considerations embodied by the current candidate.

Why Fed Bugs Really, Really Hate Gold
Jeff Deist (Mises Wire) Aug 9, 2020
Fed bugs sound like real estate agents in reverse: there is never a good time to buy gold.

Rodrigo Duterte's war on many fronts
Julio C Teehankee (EAF) Aug 9, 2020
Duterte's freewheeling leadership has led his government to mishandle the greatest policy challenge that government has faced in a generation.

COVID-19 is widening inequality in higher education
Esteban Aucejo, Jacob French, Paola Ugalde Araya, and Basit Zafar (VoxEU) Aug 9, 2020
New research is emerging which evaluates how COVID-19 has already impacted a generation of students. This column uses a survey of students at one of the largest public universities in the US to show that while pandemic has been broadly disruptive to students, this disruption has been much larger for lower-income students. This seems to be primarily driven by lower-income students being more likely to have been financially impacted by COVID-19 and more worried about the direct health risks from the virus.

There are no easy answers in the low-return era
John Plender (FT) Aug 10, 2020
Investments providing a good return today might not be replaced by equally attractive products tomorrow.

Make America great again by addressing inequality
Lu Mai (FT) Aug 10, 2020
China learnt from overseas innovations, now the US can do the same.

Investor fears about looming inflation are overblown
Michael Strobaek (FT) Aug 10, 2020
There is little evidence that recent monetary and fiscal interventions will stoke price rises.

China: The Bubble That Never Pops, by Thomas Orlik
Thomas Hale (FT) Aug 10, 2020
Beijing is neither about to collapse nor take over the world.

Coronavirus crisis creates a chance to tackle US jobs inequality
Megan Greene (FT) Aug 10, 2020
Rethink the labour market to retool the post-pandemic economy.

Get Ready for the Biden Stock Boom
Ed Finn (WSJ) Aug 10, 2020
Expect some turbulence, but 15% annual returns are possible even with the threat of higher taxes.

Making tourism development part of the crisis recovery in South Africa
Daniela Glocker (OECD Ecoscope) Aug 10, 2020
The recent COVID-19 pandemic and resulting containment measures have hit hard the economy and in particular tourism. Yet, the sector has good potential to support the South African economy and contribute to employment growth post-COVID-19. As tourism is a labour intensive sector that can also bring foreign currency into the country, it was identified as a priority area by the South African government. Between 1995 and 2017, international tourist arrivals doubled while employment directly related to tourism tripled. To ensure that the sector continues to play a key role in the economy following the COVID-19 pandemic, a recovery plan is being finalised focussing on stimulating demand, protecting and renewing supply and strengthening enabling capability.

Hope for a New "UN Moment"
Kemal Dervis (Project Syndicate) Aug 10, 2020
When the United Nations celebrates its 75th anniversary this September, the US will still be misgoverned by a transactional president who has no interest in global rules. But if that rules out a rebirth of global multilateralism this fall, things could look very different next spring.

Why Zoom Can't Save the World
Ricardo Hausmann (Project Syndicate) Aug 10, 2020
Business travel, which used to represent $1.5 trillion a year – about 1.7% of world GDP – has slowed to a trickle. But the economic impact will extend far beyond lost jobs at airlines and in the hospitality industry, because it will also lead to a substantial decline in the transfer of knowledge.

Whose India?
Shashi Tharoor (Project Syndicate) Aug 10, 2020
The narrow-minded, sectarian India that has emerged over the past six years will never appeal to the country's many alienated young people. Only an India that ensures full rights and dignity for all – the promise of liberal democracy – can do that.

Euro area bank bailout policies after the global financial crisis sowed seeds of the next crisis
Viral Acharya, Lea Borchert, Maximilian Jager, and Sascha Steffen (VoxEU) Aug 10, 2020
During the 2008/09 global financial crisis, European governments bailed out a large number of banks that were severely affected by the crisis. This column documents how the design of the bailout policy was determined by the fiscal capacity of the respective country. Fiscally weak countries recapitalised banks insufficiently, causing undercapitalised banks to shift their assets from loans to risky sovereign debt and engage in zombie lending, resulting in weaker overall credit supply, elevated risk in the banking sector, and, eventually, greater reliance on liquidity support from the ECB. Kicking the can down the road in 2008/09 thus sowed the seeds of the future banking crisis. These results have potential implications for the ongoing COVID-19 pandemic as, if the economic situation further deterioriates, banking sector stability is likely to be adversely affected.

Poverty, inequality, and COVID-19 in the US
Caitlin Brown and Martin Ravallion (VoxEU) Aug 10, 2020
Income is linked to COVID-19 risk factors: poorer people are less likely to be able to socially distance or telework. However, higher-income areas tend to have more in-person interactions. This column disentangles the socioeconomic influences on COVID-19 behaviour and outcomes across the 3,000 counties of the US. Counties with higher overall income inequality tend to have higher infection rates. A higher population share of Black Americans and Hispanics is associated with higher infection rates. These effects do not fade over time from the first infection.

Giving Up on God
Ronald F. Inglehart (FA) Aug 11, 2020
The global decline of religion.

How to Tackle Coronavirus Corruption
Daniel R. Alonso and Benjamin N. Gedan (FP) Aug 10, 2020
Latin American governments have a chance to model a better version of the inspector general, with even greater autonomy, to address graft in the public health sector.

Average-Inflation Targeting and the Effective Lower Bound
Renuka Diwan, Sylvain Leduc, and Thomas M. Mertens (FRBSF Econ Letter) Aug 10, 2020
In response to the COVID-19 pandemic, the Federal Reserve cut the federal funds rate to essentially zero. It took further measures to support the functioning of financial markets and the flow of credit. Nevertheless, the economic downturn is putting downward pressure on inflation, which had already been running below the Fed's 2% target for several years. This raises additional concerns that inflation expectations could decline and push inflation down further, ultimately hampering economic activity. A monetary policy framework based on average-inflation targeting could help address these challenges.

Prospects for a Recovery in Labor Force Participation
Jay H. Bryson and Sarah House (WF Econ Group) Aug 10, 2020
In this report, we examine the effects of COVID-19 and the related economic fallout on labor force participation.

Europe risks another false dawn after coronavirus
Martin Sandbu (FT) Aug 11, 2020
Policymakers have to prepare for the worst even as they hope for the best.

Stop laughing at European banks and start the mergers
Patrick Jenkins (FT) Aug 11, 2020
After dismal quarters from Commerzbank, Société Générale and UniCredit, it is time for smart deals.

Three priorities for the developing world to beat Covid-19
Tony Blair (FT) Aug 11, 2020
The toughest stage of the pandemic lies ahead for poorer countries and rich governments must help.

There is plenty of life yet in the US dollar
Dominic Bunning (FT) Aug 11, 2020
Many factors that appear to explain recent weakness may not last.

How to Beat China and Help the World's Poor
Hernando de Soto (WSJ) Aug 11, 2020
A plan to unleash the power of ownership by formalizing capital in the informal economy.

Japan Inc seeks to rekindle ASEAN love affair
William Pesek (AT) Aug 11, 2020
Japanese manufacturers look increasingly to SE Asia as trade war-driven decoupling with China gathers pace.

Trump's stumble disrupts his love affair with US-made steel
Gary Clyde Hufbauer (PIIE) Aug 11, 2020
President Donald Trump installed several officials with backgrounds supporting the US steel industry, notably Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer. In their previous careers, both have looked after the interests of US steel producers and fought hard to keep foreign steel out of US markets, especially in recent years as excess steel capacity throughout the world has suppressed steel prices and made foreign steel products attractive to US manufacturers.

The Korean economy: resilient but facing challenges
Christophe André (OECD) Aug 11, 2020
The prompt and effective reaction of the Korean authorities to contain the spread of COVID-19 limited the impact of the pandemic on the economy. Strong fiscal and monetary policy measures were quickly implemented to support households and businesses. As a result, the Korean economy is set to contract much less than other OECD economies in 2020, both in a scenario with no resurgence of the pandemic (single-hit scenario) and in a scenario assuming a second global wave of infections (double-hit scenario)

Reading the Dollar Doldrums
Mohamed A. El-Erian (Project Syndicate) Aug 11, 2020
A sharp decline in the relative value of the dollar this year has been met with cheers from those hoping for a short-term boost to the US economy, and with hand-wringing by those worried about the currency's global standing. But while both views reflect underlying truths, neither tells the whole story.

The Dictator's Two Dilemmas
Andrew J. Nathan (Project Syndicate) Aug 11, 2020
Surveys conducted in 14 Asian countries over a 15-year span show that respondents under authoritarian regimes trust state institutions more than their counterparts in democracies do. And yet, when authoritarians' modernization efforts succeed, they unwittingly create fertile ground for liberal-democratic values.

Democratizing Innovation
Dani Rodrik (Project Syndicate) Aug 11, 2020
Policymakers and the public at large understand the importance of innovation to economic growth and well being. What is less well appreciated is the degree to which the innovation agenda has been captured by narrow groups of investors and firms whose values and interests don't necessarily reflect society's needs.

The EU's declining share in global manufacturing value chains
David Martínez Turégano and Robert Marschinski (VoxEU) Aug 11, 2020
The EU's falling share in global manufacturing has fuelled concerns about an overall loss of competitiveness. However, sectoral idiosyncrasies are strong and advise against a 'one-size-fits-all' policy intervention. This column uses the World Input-Output Tables to decompose the value added for manufacturing value chains and study the drivers of EU's relative decline. Competitiveness concerns are most warranted for electronics, a key sector for productivity and innovation. The EU's global share in electronics has fallen even more than in total manufacturing, without evidence that specialisation in other segments of this value chain could significantly mitigate the trend.

Managing capital flows to emerging markets
Bilge Erten, Anton Korinek, and José Antonio Ocampo (VoxEU) Aug 11, 2020
Recent market volatility has underlined how fickle international capital flows can be, and how important it is for emerging economies to have an adequate system of macroprudential policies in place. Capital controls that protect recipient countries from excessively risky types of flows are a crucial ingredient of such a system. This column motivates capital controls theoretically based on the existence of externalities from capital flows, describes recent empirical evidence on their use, and summarises the surrounding policy debate.

Lebanon Needs Transformation, Not Another Corrupt Unity Government
Hanin Ghaddar (FP) Aug 11, 2020
If the United States lets France take the lead, the Lebanese people will get more political paralysis, cosmetic reforms, and Hezbollah control of state institutions.

Lebanon needs a credible government of reform
FT View Aug 12, 2020
Ruling elites must empower a new cabinet to overhaul the economy.

China squeezes diversification out of MSCI's EM equities nest
Steve Johnson (FT) Aug 12, 2020
Three countries in Asia now account for almost two-thirds of MSCI benchmark.

New crop of ETFs offer creative investing ideas for volatile times
David Stevenson (FT) Aug 12, 2020
Fresh approaches abound in funds focused on gold, Chinese equities and ESG.

Gold's evolution into a 'must-have' asset is storing up trouble
Mohamed El-Erian (FT) Aug 12, 2020
Price rise is being driven by investors adding the metal to long-term portfolios.

Could the Beirut Explosion Be a Turning Point for Lebanon?
NYT Aug 12, 2020
Chronic corruption must be rooted out.

Even for Trump, the Canada aluminum tariff is especially senseless
WP Aug 12, 2020
The real issue for global metal markets is the ripple effect from China's subsidized overcapacity.

Where Is the U.S.-U.K. Trade Deal?
WSJ Aug 12, 2020
An agreement should be easier to reach than London seems to think.

Gold-backed yuan may challenge flagging dollar
William Pesek (AT) Aug 12, 2020
Long-time gold bulls owe Jerome Powell a debt of gratitude as the easiest credit policies ever to pour out of Federal Reserve headquarters send the yellow metal into the stratosphere.

US failure to renew COVID-19 stimulus threatens further economic decline and unemployment
Sherman Robinson and Raul Hinojosa-Ojeda (PIIE) Aug 12, 2020
The impasse in Congress over renewal of the expiring programs that mitigated the economic impact of the COVID-19 pandemic threatens to undo the stimulus effect of the programs and exacerbate the economic damage from the lockdown. President Donald Trump has issued executive orders to provide some assistance to families, including $400 per week of additional unemployment benefits (down from $600, which officially expired on July 31), with states asked to fund a quarter of the benefit.[1] His actions have been criticized as inadequate and potentially illegal. The current Democratic proposal is for $3.4 trillion in support for firms, labor, and households, and the Republicans have proposed $1 trillion. Any compromise is likely to result in significant cuts in the current levels of support for households through less generous unemployment benefits and less direct income transfers. The president's executive orders include such cuts, as do the Republican proposals.

Recessions Lead People to Make Big Money Mistakes
Erin Lowry (Bloomberg View) Aug 12, 2020
Financial planners share what they tell clients not to do.

Greening Sovereign-Debt Restructuring
Simon Zadek (Project Syndicate) Aug 12, 2020
The COVID-19 crisis has made painful sovereign-debt restructurings inevitable for many countries. If the pain can't be avoided, countries should at least make the best of it, with more favorable terms offered to debtors that improve protection of natural assets such as rainforests, wetlands, oceans, and biodiversity.

Latin America's Triple Sudden Stop
Eric Parrado (Project Syndicate) Aug 12, 2020
During a global pandemic, enforcing key health measures is essential to saving lives until a vaccine can be found. That is the only way to restart economies without multiple sudden disruptions and their crippling consequences.

America's Dual Recession
Laura Tyson and Lenny Mendonca (Project Syndicate) Aug 12, 2020
Before COVID-19 shut down entire sectors of the US economy, the US workforce was becoming increasingly polarized along educational, racial, and geographic lines. Now, those trends have been accelerating, underscoring the need for a smart, worker-focused policy response.

Can Lebanon Rise from the Rubble?
John Andrews (Project Syndicate) Aug 12, 2020
The destruction of the port of Beirut – and Lebanon's freefalling economy – has fueled calls to end the country's sectarian political system, which allocates power among Christians, Shia, and Sunni Muslims according to a rigid formula. But might such a change merely deepen suspicion among an already deeply divided population?

Dollar Sensationalism
Barry Eichengreen (Project Syndicate) Aug 12, 2020
The dollar's fall in July to a two-year low against the euro was the catalyst for sensational headlines shouting that the dollar would soon meet its doom. But too much should not be read into the dollar's recent moves, which reflect readily explicable fluctuations, not the greenback's terminal decline.

Macroprudential regulation can effectively dampen global financial shocks in emerging markets
Katharina Bergant, Francesco Grigoli, Niels-Jakob Hansen, and Damiano Sandri (VoxEU) Aug 12, 2020
The vulnerability of emerging markets to global financial shocks leads to recurrent calls for policymakers to deploy additional policy tools besides relying on exchange rate flexibility. This column presents evidence that a more stringent level of macroprudential regulation can considerably dampen the effects of global financial shocks on economic activity in emerging markets. A possible channel through which macroprudential regulation enhances macroeconomic resilience is by allowing for a more countercyclical monetary policy response. The authors do not find evidence that capital flow restrictions provide similar benefits.

Regulating cross-border data flows
Eiichi Tomiura, Banri Ito, and Byeongwoo Kang (VoxEU) Aug 12, 2020
Cross-border data flows are increasingly critical for modern firms, and the regulation of data poses a distinctly novel challenge for policymakers in the 21st century. This column presents survey data from Japan, investigating exactly which type of firm are most likely to be affected by regulations surrounding the international exchange of data. The results of the study suggest that new technologies such as Artificial Intelligence and 3D printers are usually adopted by the most productive and innovative firms, and that hampering these firms with regulation may create harmful effects for the wider economy.

Even as Pandemic Drags On, Consumer Poised for Strong Q3
Tim Quinlan and Shannon Seery (WF Econ Group) Aug 12, 2020
The bottom fell out under spending in March, but after back-to-back surges in subsequent months, consumer spending is on track for record Q3 growth. Goods spending has fully recovered; services still has a way to go.

The UK's future prosperity depends on a robust recovery
FT View Aug 13, 2020
Size of the drop in second quarter is less important than the strength of the rebound.

Investors should note that Japan is dismantling some old defences
Makiko Hakozaki (FT) Aug 13, 2020
Unwinding dense networks of cross-shareholdings could help Topix close gap with peers.

How Argentina and its creditors thrashed out a $65bn deal
Colby Smith and Benedict Mander (FT) Aug 13, 2020
Recovery value of about 55 cents on the dollar was a 'creative compromise'.

Covid crisis gives cover for Italy's interventionist instincts
Silvia Sciorilli Borrelli (FT) Aug 13, 2020
Investors and businesses believe policy changes have as much to do with dirigisme as saving the economy.

The economics of Belarusians' revolt
Martin Sandbu (FT) Aug 13, 2020
Beyond the crackdown, economic pressures will continue to weaken Lukashenko's position.

Rising yen hits Japan's already sinking prospects
William Pesek (AT) Aug 13, 2020
Prime Minister Shinzo Abe's original economic magic bullet was a weak yen but he now faces blowback in a weakening dollar

Xi Jinping is reinventing state capitalism. Don't underestimate it
Economist Aug 13, 2020
China's strongman leader has a new economic agenda.

Gold Prices Show There's a "Big Short" Going on in Official Currencies
Thorsten Polleit (Mises Wire) Aug 13, 2020
A rising price of gold and silver in US dollars, euros, Chinese renminbi, Japanese yen, etc. means this: the higher the price of this precious metal, the lower the exchange value of official currencies.

Lack of Human Capital is Holding Back Latin America's Growth
Bas B. Bakker, Manuk Ghazanchyan, Alex Ho, and Vibha Nanda (IMF) Aug 13, 2020
In 1990, Latin America's average GDP per capita was a little over a quarter of the United States' income level, while emerging and developing Asian countries' GDP per capita was only 5 percent. In 2019, Asian countries had grown fourfold, but Latin America was still at the same level.

A Slow and Uneven Recovery Still Likely Despite July's U.S. Price Bounce
Tiffany Wilding (PIMCO) Aug 13, 2020
Rising prices in July have led PIMCO to raise its core inflation forecast for 2020, but not 2021.

Gold's Shine Was Starting to Blind India
Andy Mukherjee (Bloomberg View) Aug 13, 2020
This week's volatility may deter bankers from handing out risky loans backed by the metal.

China's Middle Class Is Staying Home. So Is Its Money
Shuli Ren (Bloomberg View) Aug 13, 2020
Foreign travel is out. Local goods, from food and appliances to traditional medicine, are in.

Once Upon a Time, Debt Monetization Sounded Crazy
Daniel Moss (Bloomberg View) Aug 13, 2020
Gone are the days when investors balk at coordination between fiscal and monetary policy. Just look at what some emerging markets are pulling off.

A Fraction of Stock Only Makes a Fraction of Sense
Mark Gongloff (Bloomberg View) Aug 13, 2020
Like so much in the market, day-trading has gotten dangerously easy.

China May Dismiss U.S. Sanctions. Its Banks Can't
Nisha Gopalan (Bloomberg View) Aug 13, 2020
While officials mock, lenders are preparing to comply.

How to Count Humans
Joel E. Cohen (Project Syndicate) Aug 13, 2020
A major new study based on a somewhat original methodology forecasts that global population will peak well before the end of this century. Although the usual caveats apply, the authors have offered fruitful new ways to grasp crucial policy questions.

Priorities for Saving the Private Sector
Philippe Le Houérou (Project Syndicate) Aug 13, 2020
With investment plummeting across the developing world, governments urgently must extend assistance to the private sector to ensure a strong recovery when the time comes. Given that resources are strained, policymakers should approach the problem with three guiding principles in mind.

To the Brink with China
Richard Haass (Project Syndicate) Aug 13, 2020
The chances of a Sino-American cold war are far higher today than they were just months ago. Even worse, the chances of an actual war, resulting from an incident involving the countries' militaries, are also greater.

National money market integration in 19th century Spain
Pilar Nogues-Marco, Alfonso Herranz-Loncán, and Nektarios Aslanidis (VoxEU) Aug 13, 2020
The adoption of the euro, for all its flaws, constituted a giant step in the process of full integration between the European economies. It also reproduced at a larger scale the dynamics of monetary unification that took place during the 19thcentury. This column presents a historical study of Spain, evaluating the changes in the internal money market. The analysis suggests that transaction costs undertook a sustained decline over the 19th century. By contrast, the efficiency of the market did not improve before the 1880s, perhaps due to a shift in monetary leadership changes in national economic geography.

Technology adoption and productivity growth
Reka Juhasz, Mara Squicciarini, and Nico Voigtländer (VoxEU) Aug 13, 2020
The diffusion of technologies across firms is a key driver of aggregate productivity growth. A large number of studies focus on technological adoption, the speed of diffusion, and emerging productivity differences across firms. This column examines the adoption of mechanised cotton spinning in France during the Industrial Revolution to study the short-run and long-run effects on firm productivity. It finds that firm productivity gains from this technology materialised slowly in the 19th century, consistent with the need to establish the complementary organisational practices to efficiently operate the cotton mills.

Global value chain transformation in the decade ahead
James Zhan, Richard Bolwijn, Bruno Casella, and Amelia U. Santos-Paulino (VoxEU) Aug 13, 2020
Global value chains will undergo a drastic transformation in the decade ahead. The change will be driven by a push for greater supply chain resilience due to COVID-19, which adds to existing pressures from the technology revolution, growing economic nationalism, and the sustainability imperative. Based on UNCTAD's World Investment Report 2020, this column argues that the global trade and investment landscape will be reshaped by the restructuring of global chains, build-up of new regional chains, and distributed manufacturing. While these will present daunting challenges, they will also offer ample opportunities for firms and states alike and will lead to a GVC-development paradigm shift.

An Update on Digital Currencies
Lael Brainard (FRB Board) Aug 13, 2020
The Federal Reserve is active in conducting research and experimentation related to distributed ledger technologies and the potential use cases for digital currencies.

U.S. Exports Set to Rebound with Global Growth
Jay H. Bryson and Shannon Seery (WF) Aug 13, 2020
U.S. exports plunged at an annualized rate of 64% in the second quarter as many foreign economies went into lockdown mode earlier this year. But as many of America's major foreign trading partners have re-opened their economies, real exports of goods and services should begin to recover in the third quarter.

Get Ready for SOFR: Low Rates for Foreseeable Future
Jay H. Bryson, Michael Pugliese, and Hop Mathews (WF Econ Group) Aug 13, 2020
In this update to our ongoing SOFR series, we examine the behavior of funding markets over the past few months as well as the outlook for SOFR and the ongoing LIBOR transition.

The economy is too weak for inflation to return
FT View Aug 14, 2020
If central banks bow to governments, prices could eventually soar.

Oil outlook suggests the only way is up for bond yields
Alan Livsey (FT) Aug 14, 2020
If debt market crumbles it might be better to own oil-related ETFs and stocks.

Why reinsurance is booming after pandemic disaster
John Dizard (FT) Aug 14, 2020
Covid-19 outbreak means big-ticket buyers have no alternative to purchasing expensive coverage from reinsurers.

Chinese yuan is best major currency bet
Uwe Parpart (AT) Aug 14, 2020
In each and every category of fundamentals, China beats the US and – given the vast Chinese outperformance in coping with the Covid-19 pandemic – it should continue to move further ahead.

Thailand's Covid success turns economic failure
Peter Janssen (AT) Aug 14, 2020
Thailand's relative success in containing Covid-19 is being overshadowed as the pandemic's impact on the kingdom's devastated economy becomes more glaringly apparent.

South Korea in 'least worst' economic space
William Pesek (AT) Aug 14, 2020
But Bank of Korea still needs to do more as the global economy heads south with no end in sight.

Warren Buffett Sours on Banks and Likes (Gulp!) Gold
Tara Lachapelle (Bloomberg View) Aug 14, 2020
Berkshire Hathaway's only new purchase in the second quarter was Barrick Gold, which doesn't indicate confidence in a quick economic recovery.

This Bond Market Doomsayer Keeps Being Right
Mark Gongloff (Bloomberg View) Aug 14, 2020
It's been twenty years and counting, and he still sees rates falling.

Stopping Cambodia's Reckless Urban Development
Sam Rainsy (Project Syndicate) Aug 14, 2020
State capture has turned the Cambodian government into an agent of private industrial interests, rather than a defender of citizens' interests. To protect those at permanent risk of displacement, the country urgently needs a proper civil registration system and a modern land registry.

Superstar firms and the comparative advantage of countries
Cecile Gaubert and Oleg Itskhoki (VoxEU) Aug 14, 2020
Large firms play a pivotal role in international trade, shaping, at least in parts, the export patterns of their home countries This column studies the role of such individual superstar firms and their specific know-how and managerial talent in determining a country's comparative advantage. Guided by a framework it finds that in France, sectors with more superstar firms export more compared to average sectors. The contribution of superstar firms to exports is particularly pronounced in the most export-intensive sectors. However, over the medium to long run, exports of such sectors tend to fall faster and reverse to the mean.

Don't Believe the Hype. Wealth Taxes Are Nothing New.
Ibrahim Khan (FP) Aug 14, 2020
Lessons from ancient Greece and Islamic finance for creating a tax that will benefit the poor—and the wealthy, too.

Rajapaksa Rule
Amita Arudpragasam (FP) Aug 14, 2020
Sri Lanka's ruling party promised quick and decisive leadership. But with an economic meltdown looming, it should also be careful.

America will find it hard to break its frack habit
Derek Brower (FT) Aug 15, 2020
Unlike shareholders, management teams of shale oil companies have made money.

Why the UK economy stands out
John Llewellyn (FT) Aug 15, 2020
The virus hits services particularly hard, but ambitious state investment can save the day.

The Trump administration wants a US-China commercial split
Economist Aug 15, 2020
Wrenching Chinese and American corporate worlds apart would hurt everyone.

Xi Jinping is trying to remake the Chinese economy
Economist Aug 15, 2020
Party control is mixed ever more intimately with market mechanisms.

Saudi Arabia Focuses Its Output Cuts on the U.S.
Brooke Sample (Bloomberg View) Aug 15, 2020
The strategy to raise oil prices worked in 2017. Covid-19 changes the equation dramatically.

Hijacking Bankers to Catch Swindlers Won't Work
Andy Mukherjee (Bloomberg View) Aug 15, 2020
India's efforts to prevent corporate plunder will unfairly disadvantage the likes of Citigroup and HSBC.

India's Future Depends on English
Mihir Sharma (Bloomberg View) Aug 15, 2020
A new national education policy threatens to undercut one of the country's key advantages in the competition with China.

The Economic Factor in Belarus
Anders Åslund (Project Syndicate) Aug 15, 2020
Because international investors have avoided Belarus and its authoritarian regime, the country has long suffered economic stagnation. But all the signs suggest that the rot is concentrated at the top, which implies that a change in political leadership could really change everything.

The Case for a Coronavirus-Vaccine Bond
Bernard Avishai (New Yorker) Aug 15, 2020
Is financial engineering the key to ending pandemics?

Covid-19 prompts a rethink of the case for real estate
Dambisa Moyo (FT) Aug 16, 2020
Asset allocation has been brought into focus for investors.

Bidenomics and America's new New Deal
Edward Luce (FT) Aug 16, 2020
It is always better to have a plan than none, a lesson Republicans seem to have forgotten.

Western Investors Are Misreading China's Markets
Shuli Ren (Bloomberg View) Aug 16, 2020
Outsiders are leaving money on the table by persisting in seeing the country as simply another big emerging market.

Fiscal austerity and the rise of the Nazis
Gregori Galofré Vilà, Christopher Meissner, Martin McKee, and David Stuckler (VoxEU) Aug 16, 2020
Many Western countries pursued deep austerity measures in response to debts from the financial crisis of 2007-2008, and may again do so in the wake of COVID-19 stimulus packages. This column reviews how in the early 1930s, austerity measures worsened social suffering and contributed to political unrest paving the way for the rise of the Nazi Party in Germany. The authors argue that the absence of a coherent response to social suffering from the Weimar government worsened the slump, contributing to the radicalisation and polarisation of the German electorate.

Globalisation and the COVID-19 pandemic
Masahisa Fujita and Nobuaki Hamaguchi (VoxEU) Aug 16, 2020
Unlike previous infectious diseases, which tended to be connected to poor environments, the epicentres of the COVID-19 pandemic have been the wealthiest metropolises of industrialised countries. This column aruges that the population concentration in large cities has provoked an even more intensive agglomeration of social and economic activities in high-interaction environments, driving urban development but also fostering conditions for the spread of COVID-19. Globalisation further promoted concentration, migration, and inequality, which might hamper the restructuring of the post-pandemic global economy if effective international coordination and a multi-core international regime that values diversity and competition in creative endeavours continue to be threatened.

Central banks should not rush into digital currencies
FT View Aug 17, 2020
State-backed rivals to bitcoin are inevitable but carry risks.

India is coming around to the idea of foreigners owning its debt
Benjamin Parkin (FT) Aug 17, 2020
Investors willing to wait for reforms could find rich pickings, advisers say.

The decoupling of the US and China has only just begun
Gideon Rachman (FT) Aug 17, 2020
Business logic has been displaced by strategic rivalry.

Lifting Lockdowns Won't Fully Restore the Economy
Scott Gottlieb and Michael R. Strain (WSJ) Aug 17, 2020
Americans are reasonably worried about getting sick. Controlling the virus is key to avoiding a recession.

Malaysia's 1998 problem bursts back into the open
William Pesek (AT) Aug 17, 2020
Malaysia's economy is failing for many more reasons than just Covid-19.

Here's How a Revamped Wealth Tax Could Fuel the COVID-19 Recovery
Ibrahim Khan (BRINK) Aug 17, 2020
Earlier this month, a group comprising 83 of the world's richest people called on governments to increase their taxes in the wake of COVID's economic fallout. The idea is promising, but to be truly successful, it must be implemented in such a way that gains broad support from the rich.

CFIUS declarations have risen under Trump, but investigations have declined since 2017
Martin Chorzempa (PIIE) Aug 17, 2020
The Committee on Foreign Investment in the United States (CFIUS), the body that screens foreign investment transactions to determine if they threaten US national security, has seen a steady increase in cases under the Trump presidency. Investors notified CFIUS of 237 deals in 2017, up from 172 deals in 2016.

IFC Must Implement the Recommendations of its External Accountability Review
Jolie Schwarz and Vijaya Ramachandran (CGD) Aug 17, 2020
An independent external review of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA)'s environmental and social accountability (E&S) mechanisms—commissioned in the wake of a ruling by the United States Supreme Court that limited IFC's immunity from prosecution—was released by their boards last week. In late July, we had called for the immediate release of the report, and we are pleased that the report has now been disclosed.

China Doesn't Need 125,000 Miles of Track
David Fickling (Bloomberg View) Aug 17, 2020
For all the patriotism that comes with ambitions to build more high-speed rail, it's a bad idea.

Getting a Foothold in China Comes With a Price
Anjani Trivedi (Bloomberg View) Aug 17, 2020
BMW's risk is rising under a scenario where the state restructures its main partner.

Latin America's Populists Are Overwhelmed by Covid-19
Mac Margolis (Bloomberg View) Aug 17, 2020
In many of the region's countries, health spending is being bled away by corruption and obfuscated by opaque governance.

How Europe Can Help Belarus Through Its 1989 Moment
Clara Ferreira Marques (Bloomberg View) Aug 17, 2020
Europe can do more harm than good in Belarus, where Russia is still on the sidelines. Support is required, but circumspection is, too.

Congress Needs to Think More Like a Central Bank on Covid Relief
Mohamed A. El-Erian (Bloomberg View) Aug 17, 2020
The choice isn't between a large or small relief bill, but to minimize future regret and avoid a contraction.

Japan Has Always Scraped By. Covid Will Make That Harder
Daniel Moss (Bloomberg View) Aug 17, 2020
The economic scars could last well into the next decade.

Switching Off Cash Supply Causes a Nasty Shock
Chris Bryant (Bloomberg View) Aug 17, 2020
Invoice finance has become a fashionable form of quasi-debt. But if the facilities suddenly end, a company's cash buffer can deteriorate.

The Need for Debt-for-Climate Swaps
Shamshad Akhtar, Kevin P. Gallagher, Stephany Griffith-Jones, Jörg Haas, and Ulrich Volz (Project Syndicate) Aug 17, 2020
With developing countries facing a debt crisis that will only get worse as the COVID-19 pandemic continues, it is already inevitable that massive debt relief will be necessary. The only question is whether it will be designed to address the even larger climate crisis that is approaching.

Fomenting Intellectual Revolution in the MENA Region
Rabah Arezki (Project Syndicate) Aug 17, 2020
The countries of the Middle East and North Africa desperately need a new social contract to meet the demands of a growing, increasingly disillusioned youth population. And one crucial prerequisite for that is a new ecosystem for the creation, dissemination, and discussion of ideas.

Emerging Bond Markets and COVID-19: Evidence from Mexico
Jens H.E. Christensen, Eric Fischer, and Patrick J. Shultz (FRBSF Econ Letter) Aug 17, 2020
The pandemic caused by the coronavirus is depressing economic activity and severely straining government budgets globally. Without international support, the ability of emerging economies to weather this crisis will depend crucially on access to and the cost of borrowing in domestic government bond markets. Analyzing bond flows and risk premiums for Mexican government bonds during the pandemic gives some insights into a major emerging economy's experience. Mexican risk premiums have increased more than 1 percentage point above predicted levels, pointing to tighter funding conditions for the Mexican government.

Uber ruling shows gig economy is running out of road
Sarah O'Connor (FT) Aug 18, 2020
Ride-hailing apps are being told to reclassify their drivers as employees with corresponding rights.

Oil traders should pay attention to Biden's little green Corvette
David Sheppard (FT) Aug 18, 2020
Democrat is following Musk playbook to break petrol's stranglehold on the car market.

Warren Buffett's trades look like everyone else's, for once
Robert Armstrong (FT) Aug 18, 2020
Berkshire Hathaway needs to do more than sell banks and buy gold to regain glory days.

Softening Covid loan terms for private equity has a political cost
Jonathan Ford (FT) Aug 18, 2020
Taxpayers will scrutinise changes closely; why bad debts don't mean the end of energy competition.

The Chinese economy's two-speed recovery from coronavirus
Sun Yu and Yuan Yang (FT) Aug 18, 2020
A lack of support has left lower-income households unable to spend even as wealthier households splash out.

'This Market Is Nuts': S&P 500 Hits Record, Defying Economic Devastation
Matt Phillips (NYT) Aug 18, 2020
Investors have cast the nearly relentless drumbeat of bad news aside to focus on any signs that the worst of the coronavirus pandemic might be over.

The Obama-Biden Economy Redux
WSJ Aug 18, 2020
The policy mix that led to slow growth and rising inequality is back.

China's thirst for coal is economically shortsighted and environmentally reckless
Kevin Rudd (WP) Aug 18, 2020
China's coal investments could affect how the world will tackle climate change after the pandemic.

Fewer Chinese investments in the US are raising national security concerns
Martin Chorzempa (PIIE) Aug 18, 2020
The US bans on Chinese mobile phone applications TikTok and WeChat over national security concerns reflect a broad hawkish shift to rethink US relations with China regarding technology and security. Thus, it may seem counterintuitive that the number of Chinese investments in the United States facing a national security review has declined over the past few years. After years as the country whose investors faced the most scrutiny, it fell to the third most in 2019.

Emigration Rises Along with Economic Development. Aid Agencies Should Face This, but Not Fear It
Michael Clemens (CGD) Aug 18, 2020
To reduce immigration pressure, many governments have turned to development assistance. The argument goes like this: use aid to create more economic opportunity in the low-income countries where migrants come from. Who could deny that rising opportunity at home would give them fewer reasons to leave?

South Korea on Top Again
Jim O'Neill (Project Syndicate) Aug 18, 2020
The latest economic and public-health indicators show that South Korea is far ahead of most others in managing the COVID-19 pandemic and staging a robust economic recovery. The country's success is no accident, and it is time for others to start following its example.

Cultural Decoupling from China Will Hurt the US
Minxin Pei (Project Syndicate) Aug 18, 2020
The US government's strategy of cutting cultural, educational, and journalistic ties with China is unwise and counterproductive. Such an approach not only plays into the Chinese government's hands, but also harms vital US interests.

The Quiet Revolution in Emerging-Market Monetary Policy
Piroska Nagy-Mohacsi (Project Syndicate) Aug 18, 2020
Although emerging markets are no less at the mercy of advanced economies today than they were in the past, they are benefiting from massive spillover effects in the context of the current crisis. As a result, the ultra-expansionary monetary policies pioneered in advanced economies are now available to almost everyone.

How Africa Can Harness the Fourth Industrial Revolution
Hanan Morsy (Project Syndicate) Aug 18, 2020
Owing to its large and growing youth population, Africa, more than many other regions, desperately needs to provide the education and skills training necessary for the jobs of the future. By empowering their people through technology, African countries can leapfrog many development hurdles.

The evolution of US manufacturing
Teresa Fort, Justin Pierce, and Peter Schott (VoxEU) Aug 18, 2020
Although it is well documented that US manufacturing employment has been falling since 1979, the causes of this trend are still unclear. This column argues that examining how and where the decline in US manufacturing employment occurs provides important insights in this regard. Using US Census Bureau's Longitudinal Business Database, it highlights three important trends post 1979 which suggest substantial increases in labour productivity, and an evolution of US manufacturing in line with US comparative advantage.

The next steps of the European project
Sebastian Blesse, Massimo Bordignon, Pierre C Boyer, Piergiorgio Carapella, Friedrich Heinemann, Eckhard Janeba, and Anasuya Raj (VoxEU) Aug 18, 2020
The ongoing Covid-19 crisis has the potential to change the institutional design of the European Union (EU). This column analyses survey data asking parliamentarians from France, Italy, and Germany about their stances on a broad range of reform issues covering fiscal and monetary policies as well as EU governance mechanisms. It finds that in general, party membership is quantitatively more important than nationality in determining political stances. Further, while national parliaments still differ on many policies, a broader consensus emerges for reforms on EU institutions such as providing the EU parliament with the right of proposing new legislation.

Innovative growth accounting
Peter Klenow and Huiyu Li (VoxEU) Aug 18, 2020
There is much concern that the Covid-19 crisis may be particularly tough for relatively young firms to survive. Given that much innovation is attributed to young firms, this could then harm overall productivity. This column uses the dynamics of various firms' market shares in order to infer their growth contributions. Compared to studies focusing on patents and R&D spending, the authors find a much bigger role for new and young firms in terms of accounting for productivity growth. Protecting young firms is therefore essential to mitigating the productivity damage of Covid-19.

Letter to G20, IMF, World Bank, regional development banks and national governments
Ban Ki-moon, Erik Berglöf, Gordon Brown, Helen Clark, Graça Machel, and Mary Robinson (VoxEU) Aug 18, 2020
With over one billion children still out of school because of the lockdown, there is now a real and present danger that the public health crisis will create a COVID generation who lose out on schooling and whose opportunities are permanently damaged. Yet at the very time we need extra resources, education funding is under threat. This letter from over 275 world leaders calls on the G20, the IMF, the World Bank and regional development banks and all countries to recognise the scale of the crisis, and proposes three initiatives to get the most disadvantaged and vulnerable back into education and enable them to catch up.

Market rally contains a hopeful message for the economy
DeAnne Julius (FT) Aug 19, 2020
There are good reasons for soaring stocks, despite a seeming disconnect from the recession.

Belarus's skilled population will be a boon if its economy opens up
Henry Foy (FT) Aug 19, 2020
Its history as an engineering and science base has led to a high number of technical graduates.

Emmanuel Macron's low profile on China is strategic
Ben Hall (FT) Aug 19, 2020
Like Britain, France's president is curbing Huawei — but without provoking Beijing's anger.

The US needs direct cash payments through this crisis — and the next
Chris Hughes (FT) Aug 19, 2020
The economic stimulus would kick in automatically and be big, quick and efficient.

Why China is taking over the 'American century'
Dilip Hiro (AT) Aug 19, 2020
Instead of recouping its former technological prowess, the US relies on China-bashing and tech bans

The risk of overspending on Covid-19
David Hutt (AT) Aug 19, 2020
Southeast Asian governments teeter towards fiscal blowouts that will have longer term economic consequences

Changes to China's hukou system are creating new divides
Economist Aug 19, 2020
The rich find it easier to move to big cities; the poor are being pushed towards small ones.

Bubble-hunting has become more art than science
Economist Aug 19, 2020
With the usual gauges of frothiness out of action, behavioural signals are all investors have.

Global Insurance Pricing Continues to Increase in Second Quarter 2020
Dean Klisura (BRINK) Aug 19, 2020
Global commercial insurance prices increased 19% in Q2, 2020, reflecting the 11th consecutive quarter of increases in the Marsh Global Insurance Market Index and the largest increase observed since the index's inception in 2012. With the full cost of COVID-19 still developing, upward pressure on pricing is anticipated through 2020.

The S&P's Record Push Relies on a Questionable Theory
Shuli Ren (Bloomberg View) Aug 19, 2020
Some might say that value stocks are finally performing, without a rotation away from growth names. There's something else at play.

Stocks Look Stretched (Or: How I Missed the Rally)
John Authers (Bloomberg View) Aug 19, 2020
The S&P's all-time high is a victory for the bulls, but does any of it make sense?

A Healthy Improvement on GDP
Andrew Scott (Project Syndicate) Aug 19, 2020
Many of the failures of GDP as a measure of economic performance are well known. Policymakers in search of an alternative should recognize the far-reaching power of healthy life expectancy as a measure not only of individual wellbeing, but of broader macroeconomic conditions as well.

How Cash Transfers Prevent Lockdown Tragedies
Sania Nishtar (Project Syndicate) Aug 19, 2020
COVID-19 has decimated livelihoods worldwide, squeezing the middle class and pushing low-income households into abject poverty. Social-protection programs such as Pakistan's Ehsaas Emergency Cash offer not only a path forward during the pandemic, but also valuable lessons for the future.

Whither the Pandemic Economy?
Larry Hatheway (Project Syndicate) Aug 19, 2020
The good news is that the unprecedented initial policy response to the economic downturn triggered by COVID-19 has averted a worst-case scenario, making comparisons to the Great Depression unwarranted. The bad news is that a return to strong, sustained growth seems as far off as ever.

China's Import Demand for Agricultural Products: The Impact of the Phase One Trade Agreement
Robert Feenstra and Chang Hong (VoxChina) Aug 19, 2020
This paper shows that the most efficient way for China to fulfill its committed import purchases from the United States under the Phase One trade agreement is to mimic the effect of an import subsidy. The effective subsidies would divert China's agricultural imports from other countries. We find that this trade diversion is especially strong for Australia and Canada, followed by Brazil, Indonesia, Malaysia, Thailand, and Vietnam.

What the International Community Can Do in Lebanon
Michal Kranz (FP) Aug 19, 2020
A conservatorship is unlikely, but the world can work to nudge Beirut's political class aside.

Misallocation within firms: How international trade disciplines the internal capital market and reduces the conglomerate discount
Sebastian Doerr, Dalia Marin, Davide Suverato, and Thierry Verdier (VoxEU) Aug 19, 2020
There is disagreement in the academic literature on the efficiency and productivity of conglomerates relative to single-segment firms. Although conglomerates account for the vast majority of US export value and manufacturing sales, misallocation of funds in internal capital markets is common. This column develops a novel theory of misallocation driven by managers' empire building and tests the predictions using data on US exporters. It shows that misallocation of capital within multi-segment firms arises due to information frictions between managers and headquarters. However, tougher competition due to international trade reduces this misallocation and the conglomerate discount.

Managing volatile capital flows in emerging and frontier markets
Reinout De Bock, Dimitris Drakopoulos, Rohit Goel, CFA, Lucyna Gornicka, Evan Papageorgiou, Patrick Schneider, and Can Sever (VoxEU) Aug 19, 2020
The COVID-19 pandemic caused an unprecedented sharp reversal of portfolio flows in emerging and frontier markets, triggering concerns about financial stability and consequently, strong policy responses. This column uses a novel analytical framework, the capital-flows-at-risk methodology, to show that changes in global financial conditions tend to influence portfolio flows more during surges and reversals than in normal times. Furthermore, stronger domestic fundamentals do not necessarily lead to surges in portfolio flows but help mitigate outflows. Hence, the weaker growth outlook for emerging markets due to COVID-19 will worsen local currency flows, while global financial conditions will affect hard currency flows.

Online market integration and European policy
Nestor Duch-Brown, Lukasz Grzybowski, André Romahn, and Frank Verboven (VoxEU) Aug 19, 2020
Does the internet make international markets more integrated? And if not, what can we expect from recent EU policies that promote the Digital Single Market by banning restrictive distribution agreements such as geo-blocking? This column sheds light on these questions using detailed data for consumer electronics markets. The evidence indicates that online distribution channels are not more integrated than traditional bricks-and-mortar channels. Preventing geo-blocking practices would promote integration in the form of reduced international price differences, but this would mainly have distributional effects from consumers in low-income countries to those to high-income countries.

Sustainability preferences under stress
Robin Döttling and Sehoon Kim (VoxEU) Aug 19, 2020
Socially responsible investing has been at the centre of recent regulatory scrutiny and academic debate. This column explores how retail investors' preferences for socially responsible investments respond to market distress, as revealed within mutual fund flows during the COVID-19 pandemic. The results suggest that funds with the highest sustainability ratings experience sharper declines in flows. This suggests that there tends to be a shift away from sustainability among retail investors' preferences in the face of an economic shock, highlighting a source of fragility in the increasingly popular socially responsible investment market.

Today's ultra-low interest rates are anything but 'natural'
Lotta Moberg (FT) Aug 20, 2020
Policymakers who have cut rates repeatedly should not be let off the hook so easily.

Globalisation need not mean deregulation
Martin Sandbu (FT) Aug 20, 2020
Welcome to a new world of trade policy as the US, EU and China compete to write the rules.

Covid-crippled property markets ring the alarm for banks
John Plender (FT) Aug 21, 2020
Real estate sector is a victim of the virus, debt and technological change.

The U.S. has two economies. How much longer will the losing side stand for that?
Catherine Rampell (WP) Aug 20, 2020
A buoyant recovery, enjoyed by higher-income Americans, rests atop a possible depression, which is punishing.

How to Set World Trade Straight
Robert E. Lighthizer (WSJ) Aug 20, 2020
Bilateral pacts promote protectionism. The WTO needs to return to the vision of equal rules for all.

Covid-hit Japan now paying banks to lend
William Pesek (AT) Aug 20, 2020
In its decades-long effort to prod financiers to loosen up and lend more to defeat deflation, the Bank of Japan (BOJ) is trying a new tack: incentivizing them with bonuses.

How Bailouts and Stimulus Pave the Way for a Lot More Spending on Everything
Ryan McMaken (Mises Wire) Aug 20, 2020
If we can spend a few trillion overnight to bail out investors and send out 150 million stimulus checks, why not also launch a universal basic income and a slavery reparations program?

Beyond Wirecard: What Really Ails German Finance
Stephan Richter (Globalist) Aug 21, 2020
Reforms proposed after the fintech scandal will not be enough to fix a shaky banking sector.

Relocating production from China to Central Europe? Not so fast!
Zsolt Darvas (Bruegel/Eastern Focus) Aug 20, 2020
Western European imports from central Europe have fallen dramatically, while imports from China fell much less, and had already recovered to pre-COVID level by April 2020. Central European governments should instigate new measures to foster the transition towards knowledge-intensive economic activities.

Exchange rate regimes can give nations varying levels of autonomy over monetary policy
Maurice Obstfeld (PIIE) Aug 20, 2020
Nations with a fully autonomous monetary policy can steer their domestic economies through their central banks. By lowering domestic interest rates to encourage consumption and investment, a central bank can boost employment and raise the inflation rate. On the other hand, a central bank can curb inflation and dampen employment by raising interest rates, thereby discouraging consumption and slowing investment.

Britain's Meandering Track to Trade After Brexit
Bloomberg View Aug 20, 2020
The U.K. is running out of time to strike new deals with its trading partners.

Your Net Worth Is America's Secret Economic Weapon
Conor Sen (Bloomberg View) Aug 20, 2020
Soaring stock and home prices can make this recovery much stronger than the last one.

Financial Repression Revisited?
Anne O. Krueger (Project Syndicate) Aug 20, 2020
Although massive current spending in response to the COVID-19 pandemic seems justified, policymakers will have to address the mounting public debt once the crisis has passed. Policymakers will be strongly tempted to impose an interest-rate ceiling on financial institutions, but conditional tax increases would be preferable.

America's New Debt Bomb
Todd G. Buchholz (Project Syndicate) Aug 20, 2020
Like in World War II, the United States is piling on debt to confront a whole-of-society crisis, raising the question of who will foot the bill in the long term. But, unlike the post-war era, the underlying conditions for robust economic recovery today are less than favorable, placing an even greater onus on wise policymaking.

COVID-19 in emerging markets: Escaping the monetary policy procyclicality trap
Gaston Gelos, Umang Rawat, and Hanqing Ye (VoxEU) Aug 20, 2020
Emerging markets and developing countries are particularly vulnerable to economic shocks such as that posed by COVID-19, not least because of their often weaker monetary policy frameworks. This column discusses the extent to which these economies have been able to react to the crisis with a loosening of monetary policy. While the initial inflation level is an important determinant of a country's ability to cut rates, additional institutional factors can also affect their ability to conduct countercyclical monetary policy during the crisis.

The economics of skyscrapers: A synthesis
Gabriel Ahlfeldt and Jason M. Barr (VoxEU) Aug 20, 2020
The economic case for supertall buildings has been challenged since the late 19th century. Critics urge policymakers to control vertical growth, arguing that skyscrapers are often built to satisfy oversized egos rather than serving economic purposes. This column contends that economic fundamentals are strong predictors of building heights. Height competition can lead to extremely tall buildings that aim at pre-empting rivals, but these are the exception rather than the rule. In regulating heights, policymakers should focus on balancing the positive and negative externalities associated with tall buildings.

Robots should be taxed, for a while
João Guerreiro, Sérgio Rebelo, and Pedro Teles (VoxEU) Aug 20, 2020
How should public policy respond to the impact of automation on the demand for labour? This column uses a theoreticalmodel of automation to study whether it is optimal to tax robots. It finds that it is optimal to tax robots in the short run but not in the long run in order to protect current routine workers who cannot acquire non-routine skills, while incentivising those in the future to acquire non-routine skills.

The Bubonic Plague Killed Feudalism. COVID-19 Will Entrench It.
Edoardo Campanella (FP) Aug 20, 2020
Throughout history, pandemics have been a great equalizer. Here's why this time is different.

Political knots bind sovereign funds trying to beat the market
Arash Massoudi (FT) Aug 21, 2020
Mixing statecraft and money management can make the day-to-day job of generating returns much harder.

Is the Almighty Dollar Slipping?
Nouriel Roubini (Project Syndicate) Aug 21, 2020
Far from signaling its imminent demise as the main global reserve currency, the greenback's sharp depreciation is to be expected in the current macroeconomic context. The forces that could erode the dollar's hegemony remain slower-moving and farther off.

China Alone
Brahma Chellaney (Project Syndicate) Aug 21, 2020
As long as the costs of expansionism remain manageable, Chinese President Xi Jinping will stay the course, seeking to exploit electoral politics and polarization in major democracies. The Indo-Pacific's major democratic powers must not let that happen, which means ensuring that the costs for China do not remain manageable for long.

The Dark Heart of Gold
Jeffrey Frankel (Project Syndicate) Aug 21, 2020
The US Federal Reserve has rightly eased monetary policy aggressively since the onset of the coronavirus recession in March. But gold bugs would take the recent record-high price for the metal as a sign that the Fed should tighten monetary conditions sharply.

Digital Finance Is the Key to Post-Pandemic Development
Patrick Njoroge (Project Syndicate) Aug 21, 2020
After decades of rising inequality and unsustainable investment, we have the tools and knowhow to achieve inclusive, sustainable development. We must use them to leverage new digital-finance technology to build a financial system that works for people and the planet.

Stimulating Brazil's Bioeconomy
Pedro Frizo (Project Syndicate) Aug 21, 2020
Building a durable Brazilian bioeconomy will require strategic links between key actors, embedded in robust, functioning institutions. By establishing a firm institutional foundation of "virtuous incentives," the country can offer the world an innovative new agricultural model to help tackle climate change.

Don't Discount the Dollar Yet
Joseph W. Sullivan (FP) Aug 21, 2020
China may want to displace the dollar with the yuan as the global reserve currency, but its actions are leading to the opposite.

Transatlantic technologies: Why did the ICT revolution fail to boost European productivity growth?
Robert J. Gordon and Hassan Sayed (VoxEU) Aug 21, 2020
The benefits of the 'ICT revolution' are readily seen in labour productivity statistics for the US, but a similar acceleration of productivity growth was not seen in Western Europe. This column argues that most of the 1995-2005 US productivity growth revival was driven by ICT-intensive industries producing market services and computer hardware. In contrast, the EU10 experienced a 1995-2005 growth slowdown due to a paucity of ICT investment, a failure to capture the efficiency benefits of ICT, and performance shortfalls in specific industries. After 2005 both the US and the EU10 suffered a growth slowdown, indicating that the benefits of the ICT revolution were temporary rather than providing a new permanent era of faster productivity growth.

Stable consensus on European mutual assistance is possible
Roel Beetsma, Brian Burgoon, Francesco Nicoli, Anniek de Ruijter, and Frank Vandenbroucke (VoxEU) Aug 21, 2020
Building a large and durable consensus for mutual assistance policies in the EU is challenging. Even in times of crisis, member states express different preferences, and policies must reckon with democratic politics. This column presents evidence from a randomised survey to assess support for various EU budgetary assistance packages across five member states. A majority of packages are supported in all countries, although individual design features have significant effects on public approval. Importantly, it is possible to design packages such that they obtain majority support across all sampled countries, a key condition for success with policies of this kind.

Could Job Losses Cascade to Higher-Pay Industries?
Sarah House and Shannon Seery (WF Econ Group) Aug 21, 2020
The severity and duration of job losses in lower-paying industries raise concerns that employment in higher pay-industries cannot persist relatively unscathed, which could put the nascent recovery in consumer spending on a more precarious footing.

How Quickly Will Japan's Economy Bounce Back?
Michael Pugliese and Nick Bennenbroek (WF Econ Group) Aug 21, 2020
Although Japan appears to have more successfully contained the spread of COVID-19 compared to many other major developed countries, Japan's economy still struggled mightily in the first half of 2020.

Wall Street's record run owes a lot to flattened bond yields
Michael Mackenzie (FT) Aug 22, 2020
S&P 500's new high must be viewed against a vastly different investment environment.

Why does low unemployment no longer lift inflation?
Economist Aug 22, 2020
The Phillips curve, the logic of which guides central banks today, has become oddly flat.

Can Dubai enter the premier league of financial centres?
Economist Aug 22, 2020
It will need to adapt to a less globalised world, and clean up its act.

Boris Johnson's 10(!) Brexits to Ponder
Denis MacShane (Globalist) Aug 22, 2020
A political decision principally made by the prime minister alone will determine what sort of exit from the EU we start 2021 with.

Learning from China's unequal recovery
FT View Aug 23, 2020
Beijing has focused more on helping businesses than workers.

EU risks being dethroned as world's lead digital regulator
Marietje Schaake (FT) Aug 23, 2020
Donald Trump's tussle with TikTok and Huawei holds a lesson for European politicians.

The risk of a no-deal Brexit is rising, and that's no bad thing
Wolfgang Münchau (FT) Aug 23, 2020
The EU cannot deny the UK the same discretionary approach of its own competition policy.

The dubious appeal of ESG investing is for dupes only
Robert Armstrong (FT) Aug 23, 2020
Stakeholder capitalism should also be viewed suspiciously by anyone seeking real change.

The Economic Recovery That Isn't
Steven Rattner (NYT) Aug 23, 2020
Don't believe the story that Trump will tell at the Republican convention.

A poorer retirement is pandemic's hidden legacy
FT View Aug 24, 2020
Workers will need to live with lower returns from their pensions.

Rich should worry more about the health of the poor
Rhymer Rigby (FT) Aug 24, 2020
The pandemic highlights how inequality ultimately harms the well-being of the wealthy as well as the disadvantaged.

Common sense foundations behind rapid market recovery
Robin Wigglesworth (FT) Aug 24, 2020
Speed of rally in stocks is breathtaking but causes are strikingly simple.

Time for action on America's Darwinian debt struggle
Robin Wigglesworth (FT) Aug 24, 2020
A credit crisis among small businesses risks creating an even more lopsided US economy.

Covid vaccine strategy must consider need as well as wealth
Ngozi Okonjo-Iweala (FT) Aug 24, 2020
To defeat the virus, equitable global distribution is vital — but time is running out.

Why there won't be a US-China war
David P. Goldman (AT) Aug 24, 2020
In 1976, world heavyweight champion Mohammed Ali fought an exhibition bout in Tokyo with karate master Antonio Inoki. Inoki spent most of the match on his back kicking at Ali's shins crab-fashion.

Everything going according to plan in China
Pepe Escobar (AT) Aug 24, 2020
Let's start with the story of an incredibly disappearing summit. Every August the Chinese Communist Party's leadership converges upon the town of Beidaihe, a seaside resort two hours away from Beijing, to discuss serious policies that then coalesce into key planning strategies to be approved at the CCP Central Committee plenary session in October.

Gold Still Shines Bright
Nicholas J. Johnson (PIMCO) Aug 24, 2020
Despite reaching record highs earlier this month, gold remains attractively valued, according to our framework.

How Does the COVID Recession Compare?
Michael J. Boskin (Project Syndicate) Aug 24, 2020
Although every recession is different, history offers lessons for the current pandemic-induced downturn. Amid so much uncertainty, policymakers should focus on keeping taxes low, developing plans for fiscal consolidation, and avoiding new regulations until the economy is back on track.

The Global Responsibility of Biden and Harris
Kaushik Basu (Project Syndicate) Aug 24, 2020
One of the most damaging consequences of Donald Trump's presidency has been the loss of America's global stature. Should the Democrats triumph in November, the new president and vice-president must adopt an internationalist mindset and seek to build a better future for all of humanity.

The Crowding-Out Myth
Robert Skidelsky (Project Syndicate) Aug 24, 2020
The argument that public investment invariably "crowds out" private capital is wrong both theoretically and empirically. States have always played a leading role in allocating capital, either through direct investments, or by deliberately encouraging certain types of private investment.

COVID-19 and the stock market: Long-term valuations
Davide Delle Monache, Ivan Petrella, and Fabrizio Venditti (VoxEU) Aug 24, 2020
The fast rebound of US stock prices following the Covid-19 shock has reignited discussions over 'frothiness' in stock markets. This column examines how asset prices are affected by drastic shocks to the real economy, and what factors drive this relationship. Evidence from the investigation suggests that, from a longer-term perspective, high asset valuations may reflect more than just investor optimism. The greater expected income, in comparison to government bonds, could be the key as to why investors are continuing to trust in the stock market, irrespective of the turbulent wider economic climate.

Reform chatter and democracy
Rabah Arezki, Simeon Djankov, Ha Nguyen, and Ivan Yotzov (VoxEU) Aug 24, 2020
It is often argued that democracy is the least imperfect form of government mainly because of the existence of a 'self-correcting' mechanism stemming from voice and accountability embedded in democracies. Using text analysis from about a billion newspaper articles in 28 languages, this column shows that the intensity of reform chatter increases during economic downturns and that the increase is more significant in democracies. During downturns, democracies appear to benefit disproportionately from changing popular attitudes translating into actual reforms.

How Beirut Blast Could Further Enrich Lebanese Elites
Stefanie Glinski (FP) Aug 24, 2020
Most residents don't have money for repairs, making them vulnerable to corruption schemes.

Monitoring the Inflationary Effects of COVID-19
Adam Hale Shapiro (FRBSF Econ Letter) Aug 24, 2020
Inflation fell dramatically following the onset of the COVID-19 pandemic. Dividing the underlying price data according to spending category reveals that a majority of the drop in core personal consumption expenditures inflation comes from a large decline in consumer demand. This demand effect far outweighs upward price pressure from COVID-related supply constraints. A new monthly data page from the San Francisco Fed tracks how sensitivity to the economic disruptions of COVID-19 affects different categories of inflation over time.

How to build on Britain's economic recovery
FT View Aug 25, 2020
A resurgence of the virus could still stop it in its tracks.

Leave public debt worries for another day
Robin Harding (FT) Aug 25, 2020
The priority for now is reviving economies enough to push interest rates above zero.

Fearful consumers power an uneven rally
Katie Martin (FT) Aug 25, 2020
Tech companies profiting from the pandemic are shoring up the rest of the market.

China's tech giants grapple with threats at home and abroad
Henny Sender (FT) Aug 25, 2020
Alibaba, Tencent and co face increasing constraints on their ability to grow.

The trinity of financial innovation: debt, equity and ICOs
Jamie Powell (FT) Aug 25, 2020
Where to begin eh?

The problems with China's "Dual Circulation" economic model
Michael Pettis (FT) Aug 25, 2020
When it comes to the future of the Chinese economy, Beijing has a difficult choice to make.

How the U.S. Can Finally Cut Off Tehran's Financial Oxygen
Mark Dubowitz and Richard Goldberg (WSJ) Aug 25, 2020
Blacklist the 14 Iranian banks that are still allowed to do business with foreign customers.

Shocks, risks and global value chains in a COVID-19 world
Frank Van Tongeren (OECD Ecoscope) Aug 25, 2020
In just six short months, the COVID-19 pandemic has swept the globe, leaving but a few island nations untouched. The virus and the measures required to contain it have left in in their wake a global economy damaged beyond what was thought possible after the financial crisis over a decade ago. Unemployment in the OECD area increased by an unprecedented 2.9 percentage points in April alone, up from 5.5% the previous month, and the recent OECD Economic Outlook projects that 'five years or more of income growth could be lost in many countries by the end of 2021'. The pandemic has painfully reminded us of the vulnerability of the global economy to unexpected shocks.

So You Think You Can Time the Market?
Barry Ritholtz (Bloomberg View) Aug 25, 2020
All it takes is a couple of lucky trades to end up with a false belief in one's ability to jump in and out at the right times.

Saudi Aramco Wants to Be More Like Exxon and Shell
Julian Lee (Bloomberg View) Aug 25, 2020
The oil giant will have to make more radical changes to keep dividends flowing until the coronavirus subsides and oil prices rise again.

America's Coming Double Dip
Stephen S. Roach (Project Syndicate) Aug 25, 2020
Soaring financial markets are blithely indifferent to lingering vulnerabilities in the US economy. But the impact of consumers' fear of COVID-19 on pandemic-sensitive services are unlikely to subside, undermining the case for the uninterrupted recovery that investors seem to expect.

The EU Is Fueling Hunger in Africa
Muhammed Magassy (Project Syndicate) Aug 25, 2020
Africa is becoming a new COVID-19 epicenter. Unless the European Union urgently rethinks its protectionist trade policies, a sharp uptick in food insecurity will turn the COVID-19 crisis into a catastrophe.

China's Digital Currency Will Rise but Not Rule
Eswar Prasad (Project Syndicate) Aug 25, 2020
China's new digital currency and its cross-border payments system will together enhance the renminbi's role as an international payments currency if the government continues to reform the country's financial markets and remove restrictions on capital flows. But they will hardly put a dent in the dollar's status as the dominant global reserve currency.

Are We All Keynesians Again?
Andrés Velasco (Project Syndicate) Aug 25, 2020
A common refrain nowadays is that after COVID-19, Milton Friedman is out and John Maynard Keynes is in. But if, as the famous quote often attributed to Richard Nixon puts it, "we are all Keynesians now," we must remember what Keynes taught: fiscal policy should be tightened during good times, precisely so that it can be expansionary during bad times.

Rewiring supply chain networks
Hiromitsu Goto, Yuji Fujita, and Wataru Souma (VoxEU) Aug 25, 2020
The current economic crisis calls for a pandemic-resistant supply chain network in the post-COVID-19 era. This column investigates the Japanese supply chain network at the firm level and discusses its dynamics, resilience, and robustness. It shows that the network can be characterised by a 'walnut' structure, with an intricately connected centre surrounded by upstream and downstream components. Despite the maturity of the Japanese economy, the network is actively changing, with fast-growing firms becoming more connected and slow-growing firms moving to the periphery. Fully understanding this structure will be crucial in making supply chain networks resilient to pandemics in the future.

Insurers' recovery: tick-shaped versus long tail
Matthew Vincent (FT) Aug 26, 2020
Covid-19 insurance claims are half the consensus estimate for industry losses; Baillie Gifford rides the tech rally.

Covid-19 proves globalisation is not dead
Ian Goldin (FT) Aug 26, 2020
As the pandemic pushes more activities online, national borders seem less relevant than ever.

Government should stay away from supply chains
David Cote (FT) Aug 26, 2020
Covid-19 has shown many vulnerabilities but it is the role of business to fix them.

Fundamentals matter again for emerging market investors
Jonathan Wheatley (FT) Aug 26, 2020
Bounce back in EM assets masks underlying problems that will be thrust to the fore.

China Has Troubles of Its Own
George P. Shultz (WSJ) Aug 26, 2020
Its economic growth is likely to slow dramatically as its population ages and labor force shrinks.

Declining dollar, declining America?
Urban C. Lehner (AT) Aug 26, 2020
The tumbling dollar has the pundits buzzing. The greenback is down 5% from a year ago against a basket of currencies and down nearly 10% since mid-March against the euro. A weaker dollar is good news for the United States' agriculture exporters. Is it a bad sign for the country's position in the world?

The Social and Economic Side Effects of Negative Interest Rates
Pascal Hügli (AT) Aug 26, 2020
Negative interest rates lead to zombie firms, rampant consumerism, and growing obstacles to entrepreneurship.

Brexit Negotiations: What Are They Waiting For?
Holger Schmieding (Globalist) Aug 26, 2020
In its negotiations with the EU, the UK government still puts false hopes on "heavenly" intervention by Germany's Angela Merkel.

Emerging market central banks and quantitative easing: high-risk advice
Marek Dabrowski and Marta Domínguez-Jiménez (Bruegel) Aug 26, 2020
Central banks in emerging markets with weak currencies should not resort to unorthodox monetary tools such as quantitative easing as a response to the crisis triggered by COVID-19. Preferable alternatives include shifting public spending away from less pressing needs, moderately increasing public debt and falling back on official development assistance.

The Fed's Big Rethink on Monetary Policy
Bloomberg View Aug 26, 2020
The new normal for interest rates makes its job much harder.

Pandemics Upend Classic Measures of Inflation
Tyler Cowen (Bloomberg View) Aug 26, 2020
The public understands the true cost of Covid-19 better than the professional economists.

Here's What Could Go Wrong With Yield-Curve Control
Noah Smith (Bloomberg View) Aug 26, 2020
There's a reason the Fed's so reluctant to jump into it.

The Fed Needs to Get With the Times
Mark Gongloff (Bloomberg View) Aug 26, 2020
Its dual mandate was fine in 1977. In 2020, not so much.

Abenomics Finally Finds Its Moment of Genius
Daniel Moss (Bloomberg View) Aug 26, 2020
Muscular fiscal stimulus, large-scale monetary easing and a helping hand for businesses have become the global standard in the Covid era.

FANGMAN Is No Match for These 'Seven Princesses'
Shuli Ren (Bloomberg View) Aug 26, 2020
A handful of stocks dominate South Korea's market. They've even earned a new nickname.

Is It Time to End the Ban on Bank Dividends?
Marcus Ashworth (Bloomberg View) Aug 26, 2020
The ECB's restriction on payouts has been fully justified, but it's contributing to an unhealthy disparity in bond and share prices.

India's turning point: An economic agenda to spur growth and jobs
Shirish Sankhe, Anu Madgavkar, Gautam Kumra, Jonathan Woetzel, Sven Smit, and Kanmani Chockalingam (Mckinsey) Aug 26, 2020
A clarion call is sounding for India to put growth on a sustainably faster track and meet the aspirations of its growing workforce.

How the Pandemic Can Revolutionize Climate Policy
Roland Kupers (Project Syndicate) Aug 26, 2020
Policymakers should not throw up their hands in despair because climate policy is too complicated. Rather, they need to look beyond mainstream economics and engage with people who understand complex systems, in the same way that they listen to epidemiologists and doctors during a pandemic.

Why All Countries Should Contribute to Ending Global Poverty
Andy Sumner (Project Syndicate) Aug 26, 2020
In 1969, richer countries agreed to commit 0.7% of their gross national income to international development aid. The world has changed since then, and a new era calls for a fresh approach to poverty eradication, involving a scaled financial commitment from all countries.

Going Bankrupt in China
Bo Li and Jacopo Ponticelli (VoxChina) Aug 26, 2020
We use a new case-level dataset to document a set of stylized facts on bankruptcy in China and study how the introduction of specialized courts across Chinese cities affected insolvency resolution and the local economy. We find that specialized courts hire better-trained judges and are 35% faster at dealing with bankruptcy cases than civil courts within the same city. We also find evidence that their introduction benefited the local economy by fostering firm entry, increasing average capital productivity, and favoring the reallocation of employment out of "zombie" firm–intensive sectors.

On concentration screens in horizontal merger review
Volker Nocke and Michael D. Whinston (VoxEU) Aug 26, 2020
Concentration measures such as the post-merger Herfindahl-Hirschman index as well as the merger-induced change in the index are usually key determinants in the review of horizontal mergers by competition agencies and courts. This column studies whether the magnitude of the efficiencies required for a merger not to hurt consumers may be related to the change and the level of the Herfindahl-Hirschman index. On the basis of theoretical analysis substantiated by empirical evidence, it finds that while the critical level of efficiencies depends on the change in the index, it is independent of level of the index. Hence current guidelines should be changed so as to emphasise the change more and the level less.

The Federal Reserve needs the power to buy corporate bonds
Robert McCauley (VoxEU) Aug 26, 2020
On 23 March 2020, the Federal Reserve announced that it would buy up to $250 billion of investment grade corporate bonds, and on 9 April this extended to junk bonds. This column shows that these interventions succeeded in stabilising credit markets: prices lifted and dealing spreads narrowed. However, emergency lending powers provide an inadequate basis for Federal Reserve operations in corporate bonds. In light of these findings, congressional authority to buy and to sell corporate bonds alongside US Treasuries would help to align Federal Reserve operations with what has become a capital-market centred financial system.

Household Debt-At-Risk Amid Jobs Losses
Jay H. Bryson, Tim Quinlan, and Shannon Seery (WF Econ Group) Aug 26, 2020
In this report, we estimate the extent various categories of household debt are at risk if it takes a prolonged time for individuals to find work.

US short-termism on ESG investing will hurt growth
Sarah Keohane Williamson (FT) Aug 27, 2020
Europe is better at recognising the financial value of companies that look to the future.

Bondholders need to forgive some African sovereign debt
Moritz Kraemer (FT) Aug 27, 2020
Coronavirus pandemic has brought the continent's day of reckoning forward.

Is the coup making a comeback in Africa?
David Pilling (FT) Aug 27, 2020
Democracy is the norm across the continent, but soldiers are still seizing power.

Abe's biggest win was convincing Japan Inc he would stick around
Leo Lewis (FT) Aug 27, 2020
Speculation is mounting about how long PM will stay and whether his reforms will last.

In twenty years, exchanges have gone from clubby firms to huge conglomerates
Economist Aug 27, 2020
They control everything from the software powering back offices to the data pored over by investors.

COVID-19: Without Help, Low-Income Developing Countries Risk a Lost Decade
Daniel Gurara, Stefania Fabrizio, and Johannes Wiegand (IMF) Aug 27, 2020
Absent a sustained international effort to support low-income developing countries, permanent scars are likely to harm development prospects.

How Big Are the Impacts of International Education Interventions?
David Evans and Fei Yuan (CGD) Aug 27, 2020
People around the world have long tried to expand the reach of education systems and improve their quality. But there are still gulfs in access and quality, both across and within countries.

Monetary Policy Framework: The Fed Says What, But Needs Help on How
Allison Boxer and Joachim Fels (PIMCO) Aug 27, 2020
Fed officials seek higher inflation but need help from fiscal policymakers.

What Fed Chair Jerome Powell did and did not say
Adam S. Posen (PIIE) Aug 27, 2020
The statement in Jackson Hole by Federal Reserve Chair Jerome Powell on August 27 that the Fed will keep interest rates low in order to focus on "maximum employment" means that the Fed is adapting its medium-term strategy to current economic reality—a welcome step. It also means that the earlier Federal Open Market Committee (FOMC) was wrong to have raised interest rates in 2015-18, particularly to have focused on U* (natural rate of unemployment) rather than labor force participation, and to have tried to set simple policy rules.

Conte's Meddling Won't Help Italy's Economy
Ferdinando Giugliano (Bloomberg View) Aug 27, 2020
A string of government interventions, the latest in Telecom Italia SpA, may scare off investors just when the country needs them most.

Solvency Is a Serious Issue. It Isn't a Crisis
John Authers (Bloomberg View) Aug 27, 2020
The debt taken on to tide companies through the Covid pandemic looks manageable.

The Most Expensive Round of Golf in the EU's History
Lionel Laurent (Bloomberg View) Aug 27, 2020
The resignation of the bloc's top trade official over "golfgate" will bring turmoil, but also accountability.

The World Can Live Without Davos
Clara Ferreira Marques (Bloomberg View) Aug 27, 2020
The post-Covid order shouldn't be designed by an elite crowd on a Swiss mountaintop that often gets it wrong.

5 Key Takeaways From Powell's Jackson Hole Fed Speech
Mohamed Aly El-Erian (Bloomberg View) Aug 27, 2020
The Fed chair sets a new formal milestone in global central banking that is certain to fuel much debate.

A Chance for the EU to Become the Green Bond King
Mark Gilbert (Bloomberg View) Aug 27, 2020
The European Union can become the key issuer in the nascent market for environmentally friendly debt.

The COVID Comorbidity Crisis
Ifeanyi M. Nsofor (Project Syndicate) Aug 27, 2020
Evidence of heart complications in survivors of COVID-19 raises significant concerns about the lasting impact of the pandemic. Not only does the prevalence of non-communicable diseases increase the risks associated with the virus, but the virus apparently is adding to the global burden of NCDs.

Epidemics, Economics, and Externalities
Koichi Hamada (Project Syndicate) Aug 27, 2020
The COVID-19 pandemic has highlighted the high costs that unchecked externalities – such as those resulting from people not wearing face masks – can impose on an economy and society. Economists must begin to examine how these costs can be reconciled with ordinary consumption.

Trump's International Economic Legacy
Jean Pisani-Ferry (Project Syndicate) Aug 27, 2020
If US President Donald Trump loses November's election, he will most likely leave an insignificant imprint on some parts of the global economic system. But in several others – especially US-China relations – his term in office may well come to be seen as a major turning point.

The effect of international scrutiny on manufacturing workers
Laurent Bossavie, Yoonyoung (Yoon) Cho, and Rachel Heath (VoxEU) Aug 27, 2020
The collapse of the Rana Plaza factory building in Bangladesh in April 2013 is widely considered the worst accident in the history of the garment industry. It intensified local and international attention paid to working conditions in the industry and resulted in a series of reforms, including a minimum wage and high-profile but voluntary audits examining safety. This column studies the effects of those reforms on workers and finds that while working conditions increased after the reforms, women's wages increased at first but fell in the longer run, as did the likelihood of having a formal work contract.

Ex-post economic evaluation of competition policy in the EU
Fabienne Ilzkovitz and Adriaan Dierx (VoxEU) Aug 27, 2020
With the increased globalisation and digitalisation of the economy and the challenge of recovery from the COVID-19 crisis, the future of EU competition policy is up for debate. In response, the European Commission is reviewing its enforcement practice and has brought forward new policy initiatives. In an effort to improve the evidence base of its activities, the Commission has become increasingly active in evaluating the economic effects of its competition policy interventions. This column summarises the main lessons learnt from this work and sets out areas for further research.

Argentina's Economy Crumbles as Buenos Aires Lockdown Continues
Milagros Costabel (FP) Aug 27, 2020
The nation was already on the economic brink before COVID-19 hit.

Disruptions to Starting a Business during COVID-19
Huiyu Li and Mitchell G. Ochse (FRBSF Econ Letter) Aug 27, 2020
Applications to start new businesses tanked from mid-March through May, contracting more severely than during the 2008–2009 financial crisis. Since then, however, applications have recovered so strongly that the total number filed in 2020 should be similar to that for 2019, even if applications growth reverts to the average lows experienced during the early days of the pandemic. This should result in only a modest loss of new businesses and is not likely to cause much additional strain on overall jobs and productivity gains

European banks suffer more than US peers in the corona crisis
Jan Schildbach (DB Research) Aug 27, 2020
Large banks in Europe have taken a substantial hit from the recession induced by the coronavirus. Their revenues dropped 5% yoy in the first half of the year and loan loss provisions spiked, essentially wiping out profits. Nevertheless, the CET1 ratio increased to 14% and the leverage ratio dipped only slightly to 4.8%. Total assets surged, driven by a massive increase in liquidity reserves at central banks, a boom in corporate lending and substantial government bond purchases. By comparison, the major US banks have weathered the crisis somewhat better so far. They remained moderately profitable, despite setting aside more funds to cover future loan losses. Their revenues grew 2% yoy, a stronger headwind from the Fed's interest rate cuts notwithstanding. Capital ratios, however, appear less resilient than in Europe.

Powell Announces Changes to Monetary Policy Framework
Sam Bullard and Michael Pugliese (WF Econ Group) Aug 27, 2020
In this report, we walk through changes to the Fed's policy framework laid out in Chair Powell's speech at the Kansas City Fed's Jackson Hole Symposium.

Cities will transform and survive the pandemic
FT View Aug 28, 2020
Urban living still has its attractions even if many will move to greener pastures.

The Fed's welcome inflation evolution
FT View Aug 28, 2020
A shift in policy is no cure-all but will help prepare the ground for a recovery.

A bluffer's guide to surviving Covid-19
Tim Harford (FT) Aug 28, 2020
Simply existing in a country where the virus is suppressed but circulating is not so risky.

A Gen-X Adviser to Biden Argues Equality Is Good for Growth
Katy Lederer (NYT) Aug 28, 2020
Heather Boushey is at the forefront of a generation of economists rethinking their discipline — just as the government deploys trillions to address a once-in-a-century emergency.

When It Comes to Covid-19, Most of Us Have Risk Exactly Backward
Aaron E. Carroll (NYT) Aug 28, 2020
We aren't very good at discussing trade-offs, but we need to make some during this pandemic.

Shinzo Abe's Legacy
WSJ Aug 28, 2020
Japan's longest-serving leader tried to make his country more normal.

Low Rates Forever!
WSJ Aug 28, 2020
The Federal Reserve takes a leap into the monetary unknown.

End of an Abe era for Japan
Jake Adelstein and Andrew Salmon (AT) Aug 28, 2020
Japan's longest-serving Prime Minister, Shinzo Abe, 65, announced his resignation on Friday. Citing ill health, he told a press conference in Tokyo that as he "cannot make any mistake in terms of important decision making," he was not "ready to respond to the mandate by the public."

Massive Stimulus Won't Prevent a Eurozone Slowdown
Daniel Lacalle (Mises Wire) Aug 28, 2020
Europe's path to long-term stagnation should serve as a reminder for the United States, again, of why it is not advisable to follow the eurozone policies. The results are invariably disastrous.

A Dollar Cycle Like No Other
Gene Frieda and Sachin Gupta (PIMCO) Aug 28, 2020
The U.S. dollar is likely to weaken in the coming months owing to low interest rates and continued accommodative monetary policy. However, the economic shock of the pandemic is likely to limit the dollar's downside. The relative attractiveness of alternative currencies hinges on economic variables and varies widely by region.

The Fed's New Monetary Policy Is Not That New
Bloomberg View Aug 28, 2020
For the most part, it describes what the central bank was already doing.

Manufacturers Plot Future of Factories in M&A
Brooke Sutherland (Bloomberg View) Aug 28, 2020
Aveva and Emerson both announced big software deals this week in a sign of changing attitudes about supply chains.

Abe Defied Expectations to Build a Better Japan
Noah Smith (Bloomberg View) Aug 28, 2020
He leaves behind a country that is both economically stronger and more socially liberal than the one he inherited.

The Federal Reserve's New Strategy Comes With Major Risks
Timothy A Duy (Bloomberg View) Aug 28, 2020
Too many questions about the central bank's intentions and policy framework have been left unanswered.

Trump Oversells His Economic Success Story
Ramesh Ponnuru (Bloomberg View) Aug 28, 2020
The president calls it "the strongest economy in the history of the world." The data suggests otherwise.

Powell's Three-Wheeler Doesn't Need a Speed Limit
John Authers (Bloomberg View) Aug 28, 2020
This economy can't run hot enough to generate inflation of more than 2%.

Jay Powell Sets the Pace for Christine Lagarde
Ferdinando Giugliano (Bloomberg View) Aug 28, 2020
The Fed has shown it's possible to fight today's war while preparing for the next one. The ECB needs to get on with its own policy review.

Assessing Eight Years of Shinzo Abe's Leadership
Daniel Moss (Bloomberg View) Aug 28, 2020
The prime minister is leaving Japan in the throes of an economic downturn. His signature policy framework may be the only way out.

The Post-Pandemic Economy's Barriers to Growth
Dambisa Moyo (Project Syndicate) Aug 28, 2020
The COVID-19 pandemic could not have come at a worse time for the global economy. If history is any guide, the current period of deglobalization, public indebtedness, weakening growth, and the expanding economic role of governments does not bode well for sustainable GDP growth.

The Japan Shinzo Abe Has Left Behind
Bill Emmott (Project Syndicate) Aug 28, 2020
By leaving office now, as modern Japan's longest-serving prime minister, Shinzo Abe will set the terms of his departure instead of allowing dagger-wielding rivals to do it for him. He will leave behind a country still struggling with fundamental economic problems, but also more prepared to go its own way in the world.

Poverty as Injustice
Edmund S. Phelps (Project Syndicate) Aug 28, 2020
Across Western advanced economies, a widespread sense of malaise has given rise to a debate about what the state can and should do to ensure economic justice, particularly for those at the bottom of the income ladder. As always, the fundamental question is whether public policies would help or hamper growth and dynamism.

The Roots of Brazil's Economic Crisis
Carlos Antonio Luque, Simão Silber, Francisco Vidal Luna, Roberto Zagha, and Roberto Zagha (Project Syndicate) Aug 28, 2020
Conventional wisdom holds that fiscal and quasi-fiscal profligacy caused the malaise which gripped Brazil's economy after 2013. But the problem is also deeply rooted in weak growth foundations and misguided policy choices.

Subsidising stability: State employment in China
Jaya Wen (VoxDev) Aug 28, 2020
China uses state-owned enterprises to promote social stability by employing high-risk groups when unrest threats emerge

The World Is Becoming More Equal
Branko Milanovic (FA) Aug 28, 2020
Even as globalization hurts middle-class Westerners.

The Fed's new framework still leaves investors guessing
Michael Mackenzie (FT) Aug 29, 2020
Quest for rising inflation continues but progress will reveal limits of the central bank's powers.

Lockdown accounting
Charles Gottlieb, Jan Grobovšek, Markus Poschke, and Fernando Saltiel (VoxEU) Aug 29, 2020
Many countries have implemented social distancing and lockdown policies to tame the spread of Covid-19. This column discusses the potential GDP and employment effects of lockdown policies for a broad cross-section of countries ranging in income per capita from Niger to Luxembourg. It shows that the employment and GDP effects of lockdown policies are U-shaped in income per capita. While workers in rich countries have a substantially higher ability to work from home, which mitigates declines in employment and GDP, poor countries concentrate employment and value-added in essential sectors that are not shut down. Middle-income countries see the largest declines as they feature relatively large employment shares in non-essential sectors and relatively low work from home ability.

Shinzo Abe's legacy must not be squandered
FT View Aug 30, 2020
The retiring prime minister has brought new ideas and energy to Japan.

Carbon accounting should be a basic requirement for banks
Marilyn Waite (FT) Aug 30, 2020
Financial institutions and asset managers are impeding progress on climate action for lack of a simple rule.

Europe needs a new plan for Belarus and eastern Europe
Arseniy Yatseniuk (FT) Aug 30, 2020
The EU should drop the illusion of a reset with Russia, and extend Nato membership east.

Big Oil Is in Trouble. Its Plan: Flood Africa With Plastic.
Hiroko Tabuchi, Michael Corkery and Carlos Mureithi (NYT) Aug 30, 2020
Faced with plunging profits and a climate crisis that threatens fossil fuels, the industry is demanding a trade deal that weakens Kenya's rules on plastics and on imports of American trash.

A storm in a TikTok
Paul Haskell-Dowland (EAF) Aug 30, 2020
The Trump administration's actions against Huawei and TikTok appear motivated as much by a US desire to maintain unilateral control and oversight over the world's digital assets as by a sense of responsibility and protection of the free world.

The WTO's outgoing boss leaves behind a hobbled body
Economist Aug 30, 2020
Roberto Azevêdo departs in a worsening climate for international trade.

Is Big Oil Still a Big Deal?
Julian Lee (Bloomberg View) Aug 30, 2020
Exxon's departure from the Dow is just one symptom. The oil majors' opportunities and reputations are in decline everywhere.

When 3,000% Price Swings Are a Sign of Maturity
Nisha Gopalan (Bloomberg View) Aug 30, 2020
China has resisted the urge to intervene in the wild trading on ChiNext. That's progress.

The Fed's quantitative easing: A boost for investment, a burden on inflation
Gregor Boehl, Gavin Goy, and Felix Strobel (VoxEU) Aug 30, 2020
Despite their pivotal role, the macroeconomic effects of large-scale asset purchases, known as quantitative easing, remain open to debate. This column provides insights from a structural investigation of the macroeconomic effects of the Federal Reserve's quantitative easing programme during the Global Crisis. In line with the general consensus, the results suggest that asset purchases substantially eased borrowing conditions and facilitated new investment. The rise in investment led to an increase in the productive capacity which, in turn, lowered firms' marginal cost. There were, however, inflationary effects as well.

India's central bank governor earns respect of sceptics
Benjamin Parkin and Amy Kazmin (FT) Aug 31, 2020
Shaktikanta Das was quick to respond when the pandemic hit but the country now has to deal with a protracted economic crisis.

Global economy unlikely to benefit from falling dollar
Chris Giles and Eva Szalay (FT) Aug 31, 2020
Boost to developed nations offset by appreciation of emerging markets currencies.

Only a shift in labour's bargaining power can light up US inflation
Anantha Nageswaran (FT) Aug 31, 2020
Jay Powell's doubling down on the same old policies will simply perpetuate inequality.

ECB must follow the Fed's embrace of a second mandate
Martin Sandbu (FT) Aug 31, 2020
It is wrong to think central banks must stick to monetary concerns and avoid economic policy.

As Japan's Abe Leaves, 'Abenomics' Will Remain, for Good or Ill
Ben Dooley and Hikari Hida (NYT) Aug 31, 2020
The departing prime minister's policies helped shake Japan out of decades of stagnation. But long-term restructuring efforts are needed to keep its economy charging forward.

Thailand hopes and prays for a weaker baht
Peter Janssen (AT) Aug 31, 2020
When new Bank of Thailand (BoT) Governor Sethaput Suthiwart-Narueput assumes his post on October 1, one of his first crucial challenges will be how to deal with the kingdom's strong currency, the baht.

The True Costs of Zombie Companies and Easy Money
Ali Mecklai (Mises Wire) Aug 31, 2020
Zombie companies spawned by ultralow interest rates are not merely inefficient. They truly make us poorer.

Shinzo Abe's Legacy for Japan
Shihoko Goto (Globalist) Aug 31, 2020
Japan's longest-serving prime minister achieved not only a stable Japan — but one with a clear view of its own identity and role in the world.

Shinzo Abe Had a Lot of Time, But Not Enough
Bloomberg View Aug 31, 2020
However notable his accomplishments, Japan's longest-serving prime minister leaves a daunting list of undone tasks.

The Fed Is Fighting the Last War on Inflation
Daniel Moss (Bloomberg View) Aug 31, 2020
Its approach is giving Asian economies room to run hot. That might not be as risky as it sounds.

Now's the Time for India to Make a Deal With U.S.
Mihir Sharma (Bloomberg View) Aug 31, 2020
Indian trade negotiators should strike while the White House is looking for achievements to tout to farmers.

Buffett Going Big in Japan Is All About the Cash
David Fickling (Bloomberg View) Aug 31, 2020
There's a relatively straightforward explanation for Berkshire Hathaway's stakes in five Japanese trading houses.

Negative Real Rates Aren't Reversing Anytime Soon
Paul Podolsky (Bloomberg View) Aug 31, 2020
About the only thing that could push them back into positive territory is a big infrastructure dealin Congress.

Our Weird Pandemic Spending Ways Could Change Soon
Conor Sen (Bloomberg View) Aug 31, 2020
A vaccine or treatment may shift consumer spending so dramatically it upends markets.

A Democratic Doomsday?
Ana Palacio (Project Syndicate) Aug 31, 2020
For years, liberal democracies have been beset by deepening political polarization, declining confidence in the rule of law, and widespread institutional decay. With the COVID-19 crisis accelerating these trends, the need for a clear strategy to defend liberal democracy has become more urgent than ever.

Realizing America's Anti-COVID Potential
Simon Johnson (Project Syndicate) Aug 31, 2020
The United States should have invested more money in science in recent decades, established a virus and pathogen forecasting service, and built resilient public-health systems on the basis of cost-effective diagnostics. And yet, even though the US did none of those things, it can still limit the damage caused by the pandemic.

Winners and Losers of the Pandemic Economy
Michael Spence (Project Syndicate) Aug 31, 2020
While it is true that bullish equity markets are out of step with the historic contraction in the real economy, to say that they are disconnected from it misses the point. In fact, the lofty valuations of companies with high intangible capital per employee make perfect sense in today's economy.

The Post-Capitalist Hit of the Summer
Yanis Varoufakis (Project Syndicate) Aug 31, 2020
Ever since COVID-19 collided with the enormous bubble governments have been using to re-float the financial sector since 2008, booming equity markets became compatible with wholesale economic implosion. That became clear on August 12 in London and New York.

The COVID City
Ian Goldin and Robert Muggah (Project Syndicate) Aug 31, 2020
The COVID-19 pandemic has fallen hardest not just on cities but on poorer, overcrowded neighborhoods, lending further credence to the observation that, in today's world, one's post code determines one's destiny. But could the pandemic lead to a more advanced and inclusive form of urbanism?

The Fed's Dangerous New Strategy
Willem H. Buiter (Project Syndicate) Aug 31, 2020
The US Federal Reserve's recent changes to its monetary policy framework are ill-advised and potentially harmful. They also fail to address a number of other crucial problems. The Fed should scrap this new approach, and instead make full and effective use of the policy instruments it has – or could have – at its disposal.

The corona crisis and corporate bankruptcies
Florian Eckert, Heiner Mikosch, and Markus Stotz (VoxEU) Aug 31, 2020
The corona crisis has hit the Swiss economy hard, with survey results showing that corporate profits and demand expectations collapsed and uncertainty about future business prospects has risen sharply. This column uses unique company bankruptcy data for Switzerland to assess the current bankruptcy trend using the concept of excess mortality. The corona crisis is not causing a wave of bankruptcies for the time being, but it is still too early to give the all-clear.

Why Is the Stock Market So Strong When the Economy Is Weak?
Itay Goldstein (K@W) Aug 31, 2020
High-performing stocks don't reflect the economic woes stemming from the pandemic, and the Fed has played a role in keeping prices high.

The Illusion of Wage Growth
Erin E. Crust, Mary C. Daly, and Bart Hobijn (FRBSF Econ Letter) Aug 31, 2020
Despite a sharp spike in unemployment since March 2020, aggregate wage growth has accelerated. This acceleration has been almost entirely attributable to job losses among low-wage workers. Wage growth for those who remain employed has been flat. This pattern is not unique to COVID-19 but is more profound now than in previous recessions. This means that, in the wake of the virus, evaluations of the labor market must rely on a dashboard of indicators, rather than any single measure, to paint a complete picture of the losses and the recovery.

Industrial policy in times of COVID-19 and its aftermath
Kevin Körner (DB Research) Aug 31, 2020
In its industrial policy strategy, the European Commission has merged the goal of reinforcing Europe's industrial sovereignty and global competitiveness with its overarching objective: the twin transition to a green and digital economy. Close cooperation between the industry, governments and academia is necessary to meet these ambitions and open questions regarding the realisation and compatibility of the policy objectives need to be addressed along the way. During the pandemic, the role of the state in the EU economies has strengthened substantially. Hot political debates about normalising the market mechanism and reinstating state aid rules can be expected over the next years. Risks are that even post-COVID, there might be calls for continued exemptions to the European state aid and competition rules. This could lead to lasting distortions of the single market.