News & Commentary:

Articles/Commentary

Six Abenomics lessons for a world struggling with 'Japanification'
Robin Harding (FT) Sep 1, 2020
Shinzo Abe's three arrows programme has valuable insights into what to do and not do.

Goodbye to the 'Pret economy' and good luck to whatever replaces it
Sarah O'Connor (FT) Sep 1, 2020
Cities will not die — their benefits could become more diffuse, with well-paid workers spread into the rest of the country.

The road to Bolsonaro's popularity is paved with payments to Brazil's poor
Bryan Harris (FT) Sep 1, 2020
Handouts of $100 a month offset president's mishandling of the pandemic, say analysts.

Retail stock investors should note professionals' caution
Mohamed El-Erian (FT) Sep 1, 2020
Derivatives reflect risk of heavy selling that could overwhelm smaller players.

Buffett's Japan investment is a bet on inflation and volatility
Michael Mackenzie (FT) Sep 1, 2020
The country's trading houses provide exposure to commodities and corporate restructuring.

Bringing the Statement on Longer-Run Goals and Monetary Policy Strategy into alignment with longer-run changes in the economy
Lael Brainard (FRB Governors) Sep 1, 2020
By bringing our longer-run goals and strategy into alignment with key longer-run changes in the economy, the new statement will strengthen our support for the recovery. In my view, the new statement breaks important ground and will serve the country well as we respond to the economic repercussions of the COVID-19 crisis.

The World Has Lost Patience With Zimbabwe's 'Crocodile'
Bobby Ghosh (Bloomberg View) Sep 1, 2020
President Mnangagwa will only get help if he gets serious about economic and political reforms.

Money Managers Are Punished by a Runaway S&P 500
Nir Kaissar (Bloomberg View) Sep 1, 2020
Diversified portfolios can't keep up with a market supercharged by a few tech stocks.

India Paid the Price of Lockdown for Little Reward
Daniel Moss (Bloomberg View) Sep 1, 2020
The economy contracted severely yet the pandemic is spiraling out of control. Policy makers have their work cut out.

Investing in the Arts Will Speed Economic Recovery
Kenneth S Rogoff and Jenny Gersten (Bloomberg View) Sep 1, 2020
Private and public partnerships to protect a vital U.S. industry will pay off, especially in hard-hit cities.

China Banks Have a Problem $96 Billion Can't Fix
Anjani Trivedi (Bloomberg View) Sep 1, 2020
Provisioning grows as more bad loans come due post-Covid, while Beijing keeps pushing credit for zombie SMEs.

Is Trump a Turning Point in World Politics?
Joseph S. Nye, Jr. (Project Syndicate) Sep 1, 2020
Will Donald Trump's presidency mark a major turning point in world history, or was it a minor historical accident? Trump's electoral appeal may turn on domestic politics, but his effect on world politics could be transformational, particularly if he gains a second term.

What Next for Great Cities?
Harold James (Project Syndicate) Sep 1, 2020
In the era of COVID-19, megacities that lack competent management are bound to share the same fate as the great cities of the past. But competent management means addressing not just the virus but also deeper sources of malaise such as poverty and unaffordable housing.

The COVID Middle-Income Trap
Masood Ahmed and Mauricio Cardenas (Project Syndicate) Sep 1, 2020
COVID-19 has had a devastating impact on middle-income countries, especially in Latin America. By helping these countries to overcome the pandemic and its economic fallout, the international community will be acting in its own interests, too.

How to strengthen European industries' leadership in vaccine research and innovation
Philippe Aghion, Sofia Amaral-Garcia, Mathias Dewatripont, and Michel Goldman (VoxEU) Sep 1, 2020
While EU countries have been able to rely on a more resilient social model and a science-based approach in managing the Covid crisis more successfully so far than the US, Europe has fallen short in matching the US effort to incentivise Covid vaccine innovation. This is due to a lower level of financial investment and also an inability to ensure coordination across different (national and European) funding schemes. This column calls for the creation of a European equivalent to the US Biomedical Advanced Research and Development Authority to tackle these problems, thereby strengthening European industries' leadership in vaccine research and innovation.

The supply chain effects of trade protection on export growth
Kyle Handley, Fariha Kamal, and Ryan Monarch (VoxEU) Sep 1, 2020
The rise of global supply chains means that many firms that import are also exporters. This column uses confidential firm-trade linked transaction data to identify the firms facing new US import tariffs in the period 2018-2019. It shows that product exports with higher firm-level exposure to new import tariffs had weaker export growth after 2018 than less exposed products. This impact on export growth is equivalent to an ad valorem tariff on US exports of 2-4% for the average product.

Rethinking Global Resilience
Ian Goldin (F&D) Sep 1, 2020
The pandemic is straining economic and social fault lines: the only remedy is international cooperation.

Investing in a Green Recovery
Ulrich Volz (F&D) Sep 1, 2020
The pandemic is only a prelude to a looming climate crisis.

Cultivating Global Financial Cooperation
Barry Eichengreen (F&D) Sep 1, 2020
The current crisis highlights the urgency of strengthening the global financial architecture.

The Debt Pandemic
Jeremy Bulow, Carmen Reinhart, Kenneth Rogoff and Christoph Trebesch (F&D) Sep 1, 2020
New steps are needed to improve sovereign debt workouts.

Delivering Debt Relief for the Poorest
Kevin Watkins (F&D) Sep 1, 2020
Converting debt liabilities into investments that protect children is good economics and an ethical imperative.

The route to a final post-Brexit trade deal
FT View Sep 2, 2020
The UK and the EU need to compromise over state aid rules.

Take ESG sceptics' claims with a lorry load of salt
Chuka Umunna (FT) Sep 2, 2020
It is nonsense to claim that stakeholder capitalism delivers inadequate returns.

Equity bulls spur IPO markets into action
Brooke Masters (FT) Sep 2, 2020
Tech and bumper China listings bulldozed through lockdown but London and Europe lag behind.

Inflation Is Higher Than the Numbers Say
Justin Wolfers (NYT) Sep 2, 2020
While government statistics say inflation is low, the reality is that the cost of living has risen during the pandemic, especially for poorer Americans.

Universal basic income in Canada won't do enough to fix inequality
Nora Loreto (WP) Sep 2, 2020
To effectively target these inequalities, society has to first ensure that public services are in place to meet people's needs.

All signs point to a fast-rising yuan
David P. Goldman and Uwe Parpart (AT) Sep 2, 2020
China's yuan breached 6.83 to the US dollar this week for the first time since May 2019 and will continue to appreciate as China maintains a neutral monetary policy while other major economies loosen aggressively.

Sustainability in Bond Markets Amid COVID-19: ESG in Focus
Scott A. Mather, Olivia A. Albrecht, and Jelle Brons (PIMCO) Sep 2, 2020
This pandemic is arguably the first sustainability crisis of the 21st century, and it's clear to us that action and awareness from investors on long-term sustainability risk may only accelerate post-COVID-19. We expect this current crisis could serve as a springboard, causing more investors to potentially look for more sustainable investment choices. This may lead to new financial instruments and innovation. PIMCO is committed to leading the way in ESG fixed income through innovative strategies for clients, engagement with bond issuers, and industry collaboration to elevate market standards.

U.S. and China Should Seek a Truce in Tech Cold War
Henry Huiyao Wang (Bloomberg View) Sep 2, 2020
The world's two biggest economies need to work on developing shared global rules to govern digital trade flows.

Sadly, One Letter Perfectly Captures the Recovery
Barry L Ritholtz (Bloomberg View) Sep 2, 2020
I used to think it was silly using the alphabet to describe the economy. But no longer.

The Big-City Exodus Isn't Very Big (Yet)
Justin Fox (Bloomberg View) Sep 2, 2020
Yes, the pandemic has caused some to flee New York and other cities. Whether the trend builds depends on the recovery.

Taxing Robots Won't Help Workers or Create Jobs
Noah Smith (Bloomberg View) Sep 2, 2020
New research suggests shifting taxes away from workers toward automation could significantly boost employment. It's not that clear-cut.

Central Bank Independence Should Have Its Limits
Daniel Moss (Bloomberg View) Sep 2, 2020
Investors have taken the blurring boundary between Bank Indonesia and the government in stride. Officials should tread carefully.

Africa's Gathering Debt Storm
Cobus van Staden (Project Syndicate) Sep 2, 2020
Without rapid and vastly increased external help to weather the COVID-19 storm and ease their debt-service burden, many African economies could collapse. This would directly affect the rich world in ways for which it is not prepared.

Mapping a Better Future for Africa's Farmers
Matt Sommerville (Project Syndicate) Sep 2, 2020
GPS-enabled smartphones provide an unprecedented opportunity for governments, funders, and NGOs to collaborate with local communities to document their land rights. By mapping the soil they work, farmers can chart a path to a better future.

Tariff Passthrough at the Border and at the Store: Evidence from US Trade Policy
Alberto Cavallo, Gita Gopinath, Brent Neiman, and Jenny Tang (VoxChina) Sep 2, 2020
We study the impact of recent tariffs on US prices at the border and at the store. Our results imply that, so far, the tariffs' incidence has fallen in large part on US firms.

Internal migration and the spread of COVID-19
Michele Valsecchi and Ruben Durante (VoxEU) Sep 2, 2020
Many internal migrants returned to their place of origin after the initial outbreaks of COVID-19 and before national lockdowns were in place. Has this behaviour contributed to the further spread of the pandemic and to its heavy death toll? Looking at the case of Italy and using data on the place of origin and destination of internal migrants, this column finds that provinces more exposed to return migration from areas hit by the pandemic earlier on experienced considerably more COVID-19 deaths in the ensuing months.

The Developing World Could Come Out of the Pandemic Ahead
Ashfaq Zaman (FP) Sep 2, 2020
Thanks to favorable demographics, digitization efforts, and quicker health responses, many countries of the global south are faring better than their wealthy counterparts.

How central bank swap lines affect the leveraged loan market
Annie McCrone, Ralf Meisenzahl, Friederike Niepmann, and Tim Schmidt-Eisenlohr (FRB Chicago Fed Letter) Sep 2, 2020
In this Chicago Fed Letter, we document how disturbances in foreign exchange markets related to the international cost of borrowing U.S. dollars affect U.S. corporate borrowers. International investors depend on foreign exchange markets when participating in the market for U.S. leveraged loans—large, noninvestment grade loans originated by a syndicate of lenders. Using changes in the cost of borrowing dollars during the loan origination process, we show that U.S. corporate borrowers have to pay a higher interest rate if their loans are originated when international investors face a higher cost of borrowing U.S. dollars. Federal Reserve interventions that reduce the cost of borrowing U.S. dollars internationally through lending U.S. dollars to other central banks can therefore reduce interest rates paid by U.S. corporations.

Fed's inflation shift is another blow to 'safe' assets
John Plender (FT) Sep 3, 2020
The haven credentials of government bonds were already weakened by the Covid-19 crisis.

Only a level playing field will end Europe's metals malaise
Mikael Staffas (FT) Sep 3, 2020
Continent's producers are competing with subsidised imports from China and other areas.

Doesn't Feel Like a Recession? You Should Be Paying More in Taxes
Kitty Richards and Joseph E. Stiglitz (NYT) Sep 3, 2020
It's not only the right thing to do, it's good economics.

Jerome Powell's Target, Everyone Else's Problem
WSJ Sep 3, 2020
The Federal Reserve's new inflation strategy reverberates in Europe.

Japanese yen looks set to surge
William Pesek (AT) Sep 3, 2020
It's been a number of years since Japan Inc lost sleep over the yen exchange rate. Say what you will about Shinzo Abe's reform regimen, but the prime minister kept the peace in currency circles.

How Strong Infrastructure Governance Can End Waste in Public Investment
Gerd Schwartz, Manal Fouad, Torben Hansen, and Geneviève Verdier (IMF) Sep 3, 2020
Countries waste on average about 1/3 of their infrastructure spending due to inefficiencies.

Post-Abe Japan: A Bumpy Road Ahead
Tomoya Masanao (PIMCO) Sep 3, 2020
Greater risk of long-term political instability may create volatility in financial markets.

Rest of Asia Will Miss Abe More Than Japan Will
Mihir Sharma (Bloomberg View) Sep 3, 2020
No leader in recent memory has so profoundly transformed strategic thinking in the region.

An Epic Factory Jobs Boom Is on the Way
Conor Sen (Bloomberg View) Sep 3, 2020
Robust demand for housing and an uptick in manufacturing increase the chances for the kind of employment recovery we haven't seen in decades.

Stocks Are Cheap If Fed Controls the Yield Curve
Brian Chappatta (Bloomberg View) Sep 3, 2020
The bond market helps put the relentless equities rally into some tangible context.

The Fed's New Approach Won't Help the Economy Now
William C Dudley (Bloomberg View) Sep 3, 2020
Recovery depends much more on Congress and the White House.

A Currency War Is the Last Thing the World Needs
Mark Gilbert and Marcus Ashworth (Bloomberg View) Sep 3, 2020
The ECB's chief economist made a rare verbal intervention that stemmed the dollar's drop. Policy makers need to tread carefully in FX.

Builders and Manufacturers Could Lead This Recovery
Justin Fox (Bloomberg View) Sep 3, 2020
For the first time in decades, the goods-producing sectors may drive a strong early-cycle jobs rebound.

Stock Selloff Will Put Investors' DNA to the Test
Mohamed Aly El-Erian (Bloomberg View) Sep 3, 2020
Will they buy the dip again or start paying more attention to fundamentals?

Why the Bond Market Loves India's Tax Mess
Andy Mukherjee (Bloomberg View) Sep 3, 2020
Modi's government is bending over backward to head off panic from showdown with states over revenue shortfall.

Digital Finance for a Fairer Post-Pandemic World
Maria Ramos and Achim Steiner (Project Syndicate) Sep 3, 2020
Digitalization provides a historic opportunity to reset private and public finance in order to help achieve the United Nations Sustainable Development Goals. And the COVID-19 crisis is the ideal moment to seize it.

The Uncertainty Pandemic
Kenneth Rogoff (Project Syndicate) Sep 3, 2020
Policymakers' most important task is to try to reduce the massive lingering uncertainty regarding COVID-19 while continuing to provide emergency relief to the hardest-hit individuals and economic sectors. But the insecurity fueled by the pandemic is likely to weigh on the global economy long after the worst is in the past.

Analysing monetary policy statements of the Reserve Bank of India
Aakriti Mathur and Rajeswari Sengupta (VoxEU) Sep 3, 2020
Since the 2008 Global Crisis, significant attention is paid to central bank communication, especially for countries with an inflation targeting mandate. This column analyses the monetary policy statements of the Reserve Bank of India, which formally adopted inflation targeting in 2016. It finds that the length of statements has dramatically declined, the linguistic complexity has improved, and the content is more focused on inflation topics since the regime change. In addition, there is a strong relationship between the length of statements and stock market volatility, highlighting the real impacts of effective communication.

Dual interest rates give central banks limitless fire power
Eric Lonergan and Megan Greene (VoxEU) Sep 3, 2020
The low interest rate environment since the Global Financial Crisis has led economists and analysts to suggest that major central banks have run out of monetary policy tools with which to face major downturns, including the Covid-19 crisis. This column argues that a dual interest rate approach could help to eliminate the effective lower bound and given central banks infinite fire power. By employing dual interest rates, central banks can go beyond targeting short-term interest rates and providing emergency liquidity to provide a stimulus across the economy. As political support for fiscal stimulus in the face of the Covid-19 crisis wanes, central banks can and should step in with overwhelming force.

The burden of non-transferable property rights
Christian Dippel, Dustin Frye, and Bryan Leonard (VoxEU) Sep 3, 2020
In 1887, the US government began allotting millions of acres of previously tribe-owned land to individual Native American households. The Indian Reorganization Act ended that policy in 1934, placing all allotted-trust land into trusteeship and creating a patchwork of land tenures that characterise reservations to this day. This column provides an empirical analysis of the impact that non-transferable property rights have on land cultivation, and suggests that either converting allotted-trust lands to private property or reverting the land to tribal control would improve on a system that severely impedes economic development.

Adjusting the Unemployment Thermometer
Regis Barnichon and Winnie Yee (FRBSF Econ Letter) Sep 3, 2020
Stay-at-home orders issued to slow the spread of COVID-19 may have severely distorted labor market statistics, notably the official unemployment rate. A method to correct the survey biases associated with the pandemic indicates that the true unemployment rate was substantially higher than the official rate in April and May. However, the biases appeared to fade thereafter, making the drop in June even more dramatic than implied by the official data.

A plan to revive France and Emmanuel Macron's fortunes
FT View Sep 4, 2020
French €100bn stimulus proposal targets supply rather than demand.

The Fed's quest for higher inflation looks doomed without Congress
Colby Smith (FT) Sep 4, 2020
Chair Powell wants prices to pick up, but needs support in the form of fiscal stimulus.

Market re-rating of tech sector will bring volatility
Richard Waters (FT) Sep 4, 2020
As well as Apple and Tesla, Nvidia, Zoom, Salesforce and others have all boomed.

How much of the US tech edge is patent nonsense?
John Dizard (FT) Sep 4, 2020
A socially questionable and expensive legal system appears to be shackling the value of true innovation.

The Service Economy Meltdown
Eduardo Porter (NYT) Sep 4, 2020
As companies reconsider their long-term need to have employees on site, low-wage workers depending on office-based businesses stand to lose the most.

Scheming at the Latin Development Bank
WSJ Sep 4, 2020
Argentina plots to defeat a Trump nominee with a reform agenda.

The housing market is roaring now. Here are the worries that reveals.
Megan McArdle (WP) Sep 5, 2020
My short-, medium- and long-term worries about the roaring housing market.

Japan's deflation troubles spreading across Asia
William Pesek (AT) Sep 4, 2020
Japan's multi-year deflation battle may be entering its most dangerous phase yet: contagion. The economic version of the pandemic upending nations everywhere might not be existential. But it does mean the specter of Japan-like funks around Asia can't be downplayed.

China Can't Afford to Let Property Crash
Nisha Gopalan (Bloomberg View) Sep 4, 2020
The industry is too important to the economy for the government to squeeze credit to the point where it causes defaults.

Trump or Biden, Who's Best for Dollar vs. Euro?
Marcus Ashworth (Bloomberg View) Sep 4, 2020
Regardless of who's in the White House, the dollar's premium may keep reducing. America's economic and rates advantage over Europe is diminishing.

Exploding U.S. Debt Is a Problem, Not an Emergency
Michael R Strain (Bloomberg View) Sep 4, 2020
Don't cut badly needed coronavirus spending now. (But pare Social Security and Medicare later.)

Manufacturers Are Coming Home. Are U.S. Workers Ready?
Brooke Sutherland (Bloomberg View) Sep 4, 2020
A "reshoring" of manufacturing is likely to be one pandemic prediction that sticks, but the rise of automation means the workforce needs to adapt, too.

A Stable Euro Requires an Ambitious Industrial Policy
Xavier Vives (Project Syndicate) Sep 4, 2020
After years of falling behind in cutting-edge technologies, Europe now has a chance to transform its economy in the aftermath of the COVID-19 pandemic. The case for an EU-level industrial policy is stronger than ever, and the survival of the eurozone itself may depend on it.

Making South Africa Whole
Colin Coleman (Project Syndicate) Sep 4, 2020
Although COVID-19 has left the South African economy in dire straits, there is plenty that the government could do to manage the emergency and restore prospects for long-term growth. In fact, by focusing squarely on the fiscal trade-offs, the country's most pressing needs could be addressed with current resources.

Open economy challenges: Global currencies and trading networks
Silvana Tenreyro (VoxEU) Sep 4, 2020
Understanding the nature of the global economy remains an important and interesting topic of discussion for both policymakers and researchers. This column presents a summary of two recent evaluations of aspects of the open economy. The author summarises work concerning global currencies and trading networks, offering insights into how the research agenda on each area may evolve over the coming years.

Design choices for central bank digital currency
Sarah Allen, Srdan Capkun, Ittay Eyal, Giulia Fanti, Bryan Ford, James Grimmelmann, Ari Juels, Kari Kostiainen, Sarah Meiklejohn, Andrew Miller, Eswar Prasad, Karl Wust, and Fan Zhang (VoxEU) Sep 4, 2020
Many central banks are considering, and some are even piloting, central bank digital currency. This column provides an overview of important considerations for central bank digital currency design. While central banks already provide wholesale digital currency to financial institutions, a retail central bank digital currency would expand access to more users and provide opportunities for innovative central banking. The design must balance these benefits with the potential risks created by retail central bank digital currency deployment.

After COVID-19, Latin America Braces for 'Lost Decade'
Augusta Saraiva and Darcy Palder (FP) Sep 4, 2020
Already one of the most unequal regions in the world, it may face an unprecedented rise in inequality and poverty due to the economic carnage of the pandemic.

Buffett's bet on Japan
FT View Sep 5, 2020
Investor's move looks as much a negative step away from the US market.

Coronavirus Crisis Shatters India's Big Dreams
Jeffrey Gettleman (NYT) Sep 5, 2020
The country's ambitions to become a global power, lift its poor and update its military have been set back by a sharp economic plunge, soaring infections and a widening sense of malaise.

Why is Wall Street expanding in China?
Economist Sep 5, 2020
It may be a step on the way to China becoming a financial superpower.

Emmanuel Macron revives a post-war institution for a post-covid era
Economist Sep 5, 2020
And announces a huge new stimulus as well.

Europe Just Declared Independence From China
Andreas Kluth (Bloomberg View) Sep 5, 2020
As the EU navigates an increasingly Sino-American world, it finally sees the need to stand together, even against Beijing.

Arm wrestling exposes UK industrial policy gaps
FT View Sep 6, 2020
Ministers must set out a coherent strategy.

Shinzo Abe's successor must maintain a delicate balancing act
Shinzo Abe (FT) Sep 6, 2020
The prime minister's legacy will be a record of accomplished diplomacy that offers important lessons.

The Fed risks higher inflation to boost jobs
Gavyn Davies (FT) Sep 6, 2020
The US central bank's new monetary framework takes policy back to the 1960s.

ECB should ignore latest central bank inflation fad
Wolfgang Münchau (FT) Sep 6, 2020
There are more pressing real economy issues than tweaking its price targeting regime.

China wants to decouple from US tech, too
Rana Foroohar (FT) Sep 6, 2020
Washington's restrictions have only sped Beijing's development of its own ecosystem.

Japan can't afford just to mimic US China policy
Toshihiro Nakayama (EAF) Sep 6, 2020
Since the late 1990s, Japan has urged the United States to be tougher on China, while many Japanese officials thought President Barack Obama was too soft on China.

Costs of India's Covid Crisis Are Too High
Mihir Sharma (Bloomberg View) Sep 6, 2020
Cases are rising rapidly, as is the long-term damage to the country's potential.

Beijing May Be More Addicted to Coal Than Oil
David Fickling (Bloomberg View) Sep 6, 2020
PetroChina's "near-zero" target for emissions by 2050 is about national security rather than climate.

Oil Prices Face a Chill Autumn Wind
Julian Lee (Bloomberg View) Sep 6, 2020
The recovery in demand has officially stalled, and there's still plenty of stockpiles brimming to the rim.

Jobs Report Sends Mixed Messages for Lawmakers and Markets
Mohamed Aly El-Erian (Bloomberg View) Sep 6, 2020
The unemployment rate dropped more than expected, but the labor picture remains worrisome.

A Bubble Scarier Than Big Tech Is Brewing in China
Shuli Ren (Bloomberg View) Sep 6, 2020
Valuations in the food and beverage sector have skyrocketed as institutional investors pile in.

Complex Europe: Quantifying the cost of disintegration
Gabriel Felbermayr, Jasmin Gröschl, and Inga Heiland (VoxEU) Sep 6, 2020
Rising anti-European sentiments over the past decade have prompted economists to assess the economic consequences of undoing Europe. Focusing on trade, this column uses a state-of-the-art sector-level gravity model to estimate the cost savings achieved through each individual step of integration and then simulate the economic consequences of reversing those steps. The results suggest that if all steps were to be reversed, EU manufacturing exports would drop by 26% and services exports by 12%. A complete breakdown of the EU would also generate significant real consumption losses for all EU members, with small open economies and younger and poorer EU members from central and Eastern Europe having the most to lose.

This US stock bubble could rank among the biggest in history
Andrew Parlin (FT) Sep 7, 2020
Just like in late-1980s Japan, wildly exaggerated growth stories have forced up prices.

Next Latin American decade need not be a bust
Luis Alberto Moreno (FT) Sep 7, 2020
But challenges are immense in a region hungry for honest, pragmatic, science-based governance.

The US economy is having a Wile E Coyote moment
Megan Greene (FT) Sep 7, 2020
We are suspended in mid-air, but a social safety net could yet prevent a fall deep into the recession canyon.

Gross Domestic Misery Is Rising
Paul Krugman (NYT) Sep 7, 2020
The recovery is bypassing those who need it most.

Scheming at the Latin Development Bank
WSJ Sep 7, 2020
Argentina plots to defeat a Trump nominee with a reform agenda.

The Fed Puts Its Independence on the Line
Kevin Warsh (WSJ) Sep 7, 2020
The central bank is on a one-way path to a larger role in our government and economy. Wall Street is thrilled, Main Street not so much.

China reminds the world not to count out Hong Kong
William Pesek (AT) Sep 7, 2020
China has a firm retort for Western elites who argue that Hong Kong's economy and financial hub future is a dead duck: follow the money. In a global finance forum in Beijing over the weekend, Fang Xinghai said all the appropriate and predictable things an audience expects the vice-chairman of China Securities Regulatory Commission to say.

Scottish Independence? A Hard Brexit?
Kallum Pickering (Globalist) Sep 7, 2020
Boris Johnson's latest Brexit moves give the Scottish independence movement a fresh impulse.

Bankers Hit the Limits on Working From Home
Elisa Martinuzzi (Bloomberg View) Sep 7, 2020
After the pandemic, many finance workers in New York, London and elsewhere will probably just get a bit more flexibility in how they work.

The ECB Needs Italy and Spain to Help Themselves
Ferdinando Giugliano (Bloomberg View) Sep 7, 2020
Christine Lagarde still has several tricks up her sleeve, but Europe's national governments need to step up too.

Multilateralism for the Masses
Kemal Dervis and Sebastián Strauss (Project Syndicate) Sep 7, 2020
All over the world, nationalist populists have successfully stoked anti-globalist sentiment among the people who would benefit the most from international cooperation. Countering this trend will require internationalists to clarify what global solidarity really means, beginning at the upcoming UN General Assembly.

China's Rapid Shift to a Digital Economy
Zhang Jun (Project Syndicate) Sep 7, 2020
China may well be the only major economy to achieve positive growth this year. It owes this, in no small measure, to a decade of commitment to heavy investment in technology-driven structural transformation.

The Unfinished Agenda of Financing Africa's COVID-19 Response
Brahima Coulibaly Ngozi Okonjo-Iweala, and Vera Songwe (Project Syndicate) Sep 7, 2020
The continent's pandemic-response funding gap is likely to amount to some $100 billion annually over the next three years. The international community – especially the G7, the G20, and multilateral development banks – must take bold, innovative, and expeditious action to close it.

Retiring Abenomics
Daniel Gros (Project Syndicate) Sep 7, 2020
Outgoing Japanese Prime Minister Shinzo Abe's highly publicized economic-policy program was supposed to rescue Japan from years of disappointing growth, below-target inflation, and rising debt. But, in the end, the most that can be said for it is that it has offered a cautionary tale for other aging rich countries.

The long debate on sharecropping and productivity
Konrad Burchardi, Selim Gulesci, Benedetta Lerva, and Munshi Sulaiman (VoxDev) Sep 7, 2020
Increasing the tenant's share in output encourages profitable risk-taking, in addition to large effects on input levels.

The perils of Britain's Brexit brinkmanship
FT View Sep 8, 2020
No-deal exit that does not respect UK commitments is worst outcome.

How to separate the good from the bad and ugly ESG funds
Billy Nauman (FT) Sep 8, 2020
Even oil majors can achieve good environmental, social and governance scores in some rankings.

Food inflation threatens lives and economic recovery
Lyric Hughes Hale (FT) Sep 8, 2020
Shortages are a window on to the challenges facing the post-pandemic world economy.

The corporate zombies stalking Europe
Martin Sandbu (FT) Sep 8, 2020
A big recapitalisation plan is the only way to address the serious damage that has been done to companies.

For Gulf Arab States, China Is a Temporary Friend
Karen E Young (Bloomberg View) Sep 8, 2020
In 20 years, Beijing's ardor for hydrocarbons will have cooled, just as exporting nations hit a fiscal wall.

The New Urgency of Global Tech Governance
Landry Signé, Mark Esposito, and Sanjeev Khagram (Project Syndicate) Sep 8, 2020
Now that the COVID-19 pandemic is accelerating the diffusion of digital technologies, international rules and standards governing data urgently need to catch up. The more that policymaking remains stuck at the national level, the fewer benefits the Fourth Industrial Revolution will yield.

The Great Services Illusion
Célestin Monga (Project Syndicate) Sep 8, 2020
In the wake of COVID-19, some economists are calling for developing countries to shift from industrialization to services, or even to bypass the manufacturing stage of development altogether. But blind faith in services-led growth is a dangerous illusion, and the arguments supporting it are deeply flawed.

The Coming Global Technology Fracture
Dani Rodrik (Project Syndicate) Sep 8, 2020
Today's international trade regime was not designed for a world of data, software, and artificial intelligence. Already under severe pressure from China's rise and the backlash against hyper-globalization, it is utterly inadequate to face the three main challenges these new technologies pose.

The impact of global economic disruption is as big a threat to low-income countries as the direct effects of COVID-19
Christopher Adam, Mark Henstridge, and Stevan Lee (VoxEU) Sep 8, 2020
The small open economies of sub-Saharan Africa are substantially constrained in their ability to respond to the COVID-19 shock through fiscal adjustment. The scale of contraction in external demand, combined with limited fiscal space, means that without substantial external support, feasible policy packages in many of these countries translate to austerity programmes. This column uses a dynamic general equilibrium model calibrated to data from Uganda to characterise the macroeconomics of the pandemic and its aftermath in sub-Saharan Africa. It finds that the recovery depends significantly on how the public finances are restored to sustainability, and may be accelerated with external support.

What Will the World Look Like in 2030?
Mauro Guillen (K@W) Sep 8, 2020
Big economic, technological and demographic changes are coming, and the pandemic is accelerating many of them.

Democracy works better when there is less of it
Janan Ganesh (FT) Sep 9, 2020
Autocracy is not the only alternative to the status quo.

Back to Argentina's treacherous politics for Alberto Fernández
Benedict Mander (FT) Sep 9, 2020
President must reconcile factions in his coalition as economy reels from Covid-19 lockdown.

Simple trick can deliver outperformance in emerging markets ETFs
Steve Johnson (FT) Sep 9, 2020
Avoiding state-owned enterprises has helped generate double-digit returns for two funds.

ECB supervisors turn the screw on banks' Brexit plans
Martin Arnold (FT) Sep 9, 2020
Ending up with overlapping operations in London and the eurozone is the last thing cost-cutting lenders want.

Hedge funds need to deliver in their year of opportunity
Laurence Fletcher (FT) Sep 9, 2020
Volatile markets and differences between regions should make for a happy hunting ground.

What future for the World Bank's Doing Business project?
Michael Klein (Brookings) Sep 9, 2020
The World Bank's Doing Business (DB) project captures the nature of basic laws and regulations that allow domestic small and medium-sized businesses to operate, invest, contract, trade, and compete on the basis of the rule of law outside the informal sector. It is arguably the most effective existing tool to stimulate country-based reform efforts that promise to improve these institutional underpinnings of productivity and wealth creation.

Emerging Markets Asset Allocation: Opportunities in a Time of Uncertainty
Pramol Dhawan, Vinicius Silva, and Gene Frieda (PIMCO) Sep 9, 2020
Receding economic uncertainty bodes well for emerging markets (EM) broadly in coming quarters; returns tend to be strongest in periods when global activity is below average but rising. We think it is too early to shift views in favor of more growth-sensitive assets given the uneven nature of the recovery. Higher quality external debt and local duration appear attractive in this low nominal growth environment. EM currencies remain the asset class to watch, given the potential for broad-based dollar depreciation to accelerate a rebound in EM growth.

Johnson's Road to Brexit Ruin
Bloomberg View Sep 9, 2020
The British government's latest maneuver makes it harder to limit the damage.

A Vaccine Could Slow Down Job Growth
Karl W Smith (Bloomberg View) Sep 9, 2020
At least until the details of distribution were worked out, businesses might be reluctant to hire.

Trump Tax Cut Was Neither Bane Nor Boon
Ramesh Ponnuru (Bloomberg View) Sep 9, 2020
Ignore the campaign claims on both sides. The 2017 law didn't favor the rich or boost the economy. (It did pump up the deficit, but how many voters care about that?)

Is Inflation Targeting Due for a Makeover?
Andy Mukherjee (Bloomberg View) Sep 9, 2020
India's dilemma show how post-Covid central banking is groping toward a new normal.

U.S. Productivity Is Soaring. Hold the Applause.
Michael R Strain (Bloomberg View) Sep 9, 2020
Don't be fooled by the gaudy statistic. It just means that less-productive workers were the first to be fired.

The Pandemic's Most Treacherous Phase
Barry Eichengreen (Project Syndicate) Sep 9, 2020
The most dangerous phase of the COVID-19 crisis in the US may actually be now, not last spring. If the economy falters a second time, whether because of inadequate fiscal stimulus or flu season and a second COVID-19 wave, it will not receive the additional monetary and fiscal support that protected it in the spring.

Africa's Peace and Prosperity Begin at Home
Abiy Ahmed (Project Syndicate) Sep 9, 2020
For too long, Africa has been a strategic plaything of world powers. By bolstering its internal cohesion and economic integration, the continent can become a strong geopolitical force with an independent and unified voice on important global issues.

Immigration and the welfare state
João Guerreiro, Sérgio Rebelo, and Pedro Teles (VoxEU) Sep 9, 2020
Immigration policy has become a hot-button issue in both Europe and the US, with questions concerning optimal policy as well as the welfare state dominating discussions. This column revisits the idea of the immigration surplus, exploring a number of possible scenarios in terms of how policymakers should address the challenge. Correctly configuring fiscal policy so as to capture the benefits of both high- and low-skill immigrant (and native) workers is at the heart of optimal policy design and may help to address the swelling anti-immigrant sentiment that continues to exist in many countries today.

The surprising resilience of the Covid consumer
FT View Sep 10, 2020
How to ensure the surge in retail sales continues.

Why Buffett could lead other money managers into overlooked Japan
Leo Lewis (FT) Sep 10, 2020
Berkshire's investment in trading houses highlights the case for unearthing cheap stocks.

Central banks will win the tug of war in markets
Mark Haefele (FT) Sep 10, 2020
Covid flare-ups should not deter investors, especially when it comes to UK and German stocks.

Boris Johnson's one-legged economic strategy is tripping up Tories
Robert Shrimsley (FT) Sep 10, 2020
Lack of coherent vision risks making the UK government seem directionless.

Time to kill the US trade deficit delusion
Alan Beattie (FT) Sep 10, 2020
Widening gap between exports and imports shows that Trump's illogical policy has failed. s

Congress needs to address the pandemic economic crisis. This is not the time to worry about deficit spending.
Robert E. Rubin and Jacob J. Lew (WP) Sep 10, 2020
Fiddling around the margins or kicking problems down the road would exacerbate risks to the economy, to millions of Americans and to struggling businesses.

Why China won't weaponize its US Treasuries
William Pesek (AT) Sep 10, 2020
Every few years, Chinese officials send a warning shot Washington's way, hinting that they could dump mountains of US Treasury securities to show America who is boss.

Africa Needs a Stronger Europe, Europe Needs a Stronger Africa
W. Gyude Moore (CGD) Sep 10, 2020
In a world of rapidly shifting power configurations, Africa is attempting to increase its economic power by combining its 54 countries into a single economic bloc through the new African Continental Free Trade Agreement. The success of that bloc will, in part, depend on its ability to forge a productive and equitable partnerships. With both the United States and China emerging as spoilers in the international system, Africa's efforts will only succeed if met with a more expansive European foreign policy, backed by an increase in resources to match such ambitions.

A Lesson from China's Cultural Revolution
César Chelala (Globalist) Sep 10, 2020
What can other countries learn from the devastating effects of China's "Cultural Revolution"?

Why Isn't the British Pound Weaker? Ask Trump
Mark Gilbert (Bloomberg View) Sep 10, 2020
Sterling's recent decline has been limited. That might not last.

The EU Should Stand With Greece on Turkey
Ferdinando Giugliano (Bloomberg View) Sep 10, 2020
Europe faces several foreign policy dilemmas. The Eastern Mediterranean is an opportunity to prove it can unite before an external threat.

With the Economy This Bad, Unemployment Should Be Even Worse
Daniel Moss (Bloomberg View) Sep 10, 2020
In some parts of Asia, the jobless rate is remarkably low considering the cratering of commercial activity. The role of the state explains a lot.

Stop Doing Business
Jayati Ghosh (Project Syndicate) Sep 10, 2020
The World Bank should no longer publish its Doing Business index, owing to its flawed design and vulnerability to manipulation. The Bank also owes the developing world an apology for all the harm this misleading and problematic tool has already caused.

The V-Shaped Recovery Marches On
Jim O'Neill (Project Syndicate) Sep 10, 2020
Despite all of the doom and gloom of the past six months, much of the global economy continues to show signs of a sharp recovery from the pandemic-induced collapse this spring. And while nothing is guaranteed, a number of favorable structural factors make a further acceleration highly likely.

Planning for Crisis Resilience
Ricardo Hausmann (Project Syndicate) Sep 10, 2020
Large international disparities in the economic cost of the COVID-19 crisis should surprise no one. The question is what can be done to ensure that economies are able to bounce back as quickly as possible.

Detecting the impact of policy uncertainty on foreign direct investment
Mitsuo Inada and Naoto Jinji (VoxEU) Sep 10, 2020
Policy uncertainty is believed to affect foreign direct investment significantly, but, empirical evidence on the impact is scarce. This column proposes a unique empirical strategy for identifying the impact of a change in policy uncertainty on FDI at the sector level by utilising information about reservations of certain obligations contained in international investment agreements. It provides evidence that policy uncertainty discourages FDI. Policy uncertainty will continue to rise in the post-COVID-19 era, and the results highlight the importance of aligning globalisation with the mitigation of public health threats by implementing policies to reduce uncertainty.

The ECB's lukewarm euro intervention
FT View Sep 11, 2020
Christine Lagarde flags currency appreciation, but seems to lack appetite for fight.

Post-Brexit UK must respect the rule of law
Philip Stephens (FT) Sep 11, 2020
Boris Johnson's plan to rewrite EU withdrawal agreement destroys trust and undermines democracy.

The good times for big US banks cannot last under Biden
Robert Armstrong (FT) Sep 11, 2020
Taxes would be expected to go up and the regulatory environment to get tougher.

Is China the closest thing to investing normality now?
Merryn Somerset Webb (FT) Sep 11, 2020
Inexpensive equities, 3 per cent bond yields — no wonder foreign investment is pouring in.

State aid is the wrong Brexit hill to die on
Camilla Cavendish (FT) Sep 11, 2020
Why stall an EU trade deal by tinkering with an issue where the UK has a poor record?

The latest big bailout comes with big whistleblower payouts
Tom Braithwaite (FT) Sep 11, 2020
Companies are suspected of siphoning off billions in government support. There is one way of catching them.

Hearts don't beat faster for 'the rules-based international order'
Timothy Garton Ash (FT) Sep 11, 2020
To win the fight against populism, we must appeal to the emotions.

Suga needs to get radical to save Japan
William Pesek (AT) Sep 11, 2020
When economists and investors wonder what to expect from Japan's next leader, they're not thinking of the front runner in the premiership race that will be decided on Monday, Cabinet Secretary Yoshide Suga. They are really thinking of Haruhiko Kuroda.

Claver Carone to Head the IDB–What's Next?
Amanda Glassman (CGD) Sep 11, 2020
the countries that own the Inter-American Development Bank (IDB) will likely elect a new president—US citizen Mauricio Claver Carone (aka MCC)—from a field of one.

This Unequal Pandemic Recovery Hurts Everyone
Mark Gongloff (Bloomberg View) Sep 11, 2020
The k-shape is really a trap waiting to spring on the economy.

The Coming Age of Disorder Will Favor Commodities
John Authers (Bloomberg View) Sep 11, 2020
A return to the stagflation of the 1970s would be bad for stocks and bonds.

The Widening Education Gap May Tear the Economy Apart
Claudia Sahm (Bloomberg View) Sep 11, 2020
The Covid-19 pandemic will exacerbate the disparities in educational outcomes, much as the Great Recession did.

Biden Embraces Trumpism on Free Trade
Karl W Smith (Bloomberg View) Sep 11, 2020
The Democratic candidate doesn't support tariffs, but he favors subsidies for domestic producers.

Transforming Africa's Agriculture
Tony Blair (Project Syndicate) Sep 11, 2020
Strengthening Africa's agriculture systems will not only make the continent more self-reliant and resilient to future shocks, but will also boost global health, prosperity, and security. The international community therefore has both moral and self-interested reasons to support this process.

Fallen angels and indirect contagion
John Fell, Francesco Mazzaferro, Richard Portes, and Eric Schaanning (VoxEU) Sep 11, 2020
On 23 July 2020, the European Systemic Risk Board published a technical note summarising the findings of a cross-sectoral, top-down analysis that sought to quantify the aggregate potential impact of large-scale corporate bond downgrades. This column summarises the main findings of the exercise, provides a rationale for such analyses, and suggests repeating such system-wide exercises regularly and on a global level to uncover vulnerable links and improve institutions' own risk management.

What really drives inflation
Itamar Drechsler, Alexi Savov, and Philipp Schnabl (VoxEU) Sep 11, 2020
In a recent speech in Jackson Hole, Fed Chair Jay Powell laid out the Fed's new monetary policy framework. Under this framework, the Fed will allow inflation to run above its 2% target in order to boost employment following a downturn. The new framework marks a departure from the perceived wisdom of the 1970s' Great Inflation. Under this perceived wisdom, the Fed must respond aggressively to rising inflation or risk losing its credibility and letting inflation spiral out of control. New research on the Great Inflation challenges this perceived wisdom and offers a new explanation for what really drives inflation. Instead of Fed credibility, this explanation puts the financial system and how it transmits monetary policy front and centre. In doing so, it reconciles the 1970s with the current environment and provides a foundation for understanding why the Fed's new framework is unlikely to trigger runaway inflation.

Weak links
Michael Gibb (Aeon) Sep 11, 2020
The idea of the 'supply chain' shackles how we think about economic justice. What forces could new metaphors unleash?

The quest for secure property rights in Africa
Economist Sep 12, 2020
Handing out title deeds is not enough.

Who owns what?
Economist Sep 12, 2020
Enforceable property rights are still far too rare in poor countries.

Is the office finished?
Economist Sep 12, 2020
The fight over the future of the workplace.

Europe Is Fed Up With China's Transgressions
Brooke Sample (Bloomberg View) Sep 12, 2020
Though EU countries won't go as far as the U.S. in decoupling from China, they're sending a strong message.

The Bank of England's message on monetary financing needs clarity
Gavyn Davies (FT) Sep 13, 2020
The central bank's gilt purchases have been justified but could pose long-term risks for financial stability.

The next subprime crisis could be in food
Rana Foroohar (FT) Sep 13, 2020
If trade financing is out of reach for small and midsized farmers, everyone may suffer.

Can China Turn Europe Against America?
Andrew A. Michta (WSJ) Sep 13, 2020
In this week's summit, Xi seeks to play Nixon, luring new allies with cash and upending trade routes.

Newton's Law of Stock Momentum
Andy Kessler (WSJ) Sep 13, 2020
As Sir Isaac learned, market pile-ons follow the same pattern. Investor, beware.

No winners in US–China technology divide
Jonathan D Pollack (EAF) Sep 13, 2020
The Trump administration's actions reveal fears that (unless Chinese power is checked) it will supplant the US as the world's preeminent power, operating according to rules of its own.

A Pandemic Is a Terrible Time to Buy Real Estate
Teresa Ghilarducci (Bloomberg View) Sep 13, 2020
Home prices are high and so is uncertainty.

There's No Easy Fix to OPEC's Whack-A-Mole Problem
Julian Lee (Bloomberg View) Sep 13, 2020
The oil cartel's 60th anniversary is marred not only by Covid, but a failure to keep its diverse members disciplined in meeting their output targets.

Japan's Policy Revolution Could Start at the Margins
Daniel Moss (Bloomberg View) Sep 13, 2020
Yoshihide Suga, likely the next premier, shared many of Abe's views. But subtle differences could offer hints of what's to come.

US-China trade war hits passive investors
Hudson Lockett (FT) Sep 14, 2020
Calls are growing for the adoption of strategies that exclude China.

UK-Japan trade deal shows need for EU pact
FT View Sep 14, 2020
Accord is an important stepping stone for Britain to join TPP.

Investors in Japan should get set for a 'Suga high'
Yunosuke Ikeda (FT) Sep 14, 2020
Longer-term analysts will be taking a good look at problems such as low productivity.

Suga era comes into view in Japan
Andrew Salmon (AT) Sep 14, 2020
In a result that surprised precisely nobody, Yoshihide Suga became the head of Japan's ruling party on Monday afternoon. Voted in as the new president of the ruling Liberal Democratic Party, Suga is now a virtual shoe-in for prime minister. That will be confirmed after a parliamentary vote on Wednesday.

Chinese debt a safe and sound market bet
David P. Goldman and Uwe Parpart (AT) Sep 14, 2020
Foreign holdings of Chinese debt grew at the fastest rate on record during July and August as the yuan rose against the dollar and the Chinese economy evinced clear signs of economic recovery.

The US Dollar Collapse Is Greatly Exaggerated
Daniel Lacalle (Mises Wire) Sep 14, 2020
The United States currency has only really weakened relative to the yen and the euro, but that depends on optimistic expectations of a European and Japanese economic recovery.

Japan's economic challenges mirror those of other advanced economies
Takeshi Tashiro (PIIE) Sep 14, 2020
Prime Minister Shinzo Abe's announced plan to step down has ushered in a period of uncertainty about Japan's attempts to recover from the COVID-19 economic downturn. But whoever succeeds Abe, Japan is likely to continue experiencing low growth, low inflation, low interest rates, and excess private savings in the foreseeable future—a combination that some characterize as "Japanification," a term that has been applied to other advanced economies struggling under the weight of these factors.

Corporations Pillaged the Free Market
Bruce Bartlett (TNR) Sep 14, 2020
Milton Friedman's siren song of profit convinced lawmakers to stop worrying about people and hand big business limitless power.

Germany's Economy Is Sicker Than You Think
Andreas Kluth (Bloomberg View) Sep 14, 2020
Epidemiologically and economically, Germany did well in round one of the pandemic. The problems will show up in round two.

Abe's Successor Timed His Entrance Perfectly
Anjani Trivedi (Bloomberg View) Sep 14, 2020
Yoshihide Suga is set to become premier just as Japan Inc. is staging a strong recovery.

After Oil: U.S.-China Split Will Hurt Clean Energy
Margaret L O'Sullivan (Bloomberg View) Sep 15, 2020
Beijing was driving the growth of renewables — then Trump's trade war and the coronavirus hit.

Christine Lagarde Has Bigger Problems Than the Euro
Ferdinando Giugliano (Bloomberg View) Sep 14, 2020
The pandemic poses a far broader challenge for monetary policy.

The Fed Must Weigh What's Feasible Versus Desirable
Mohamed Aly El-Erian (Bloomberg View) Sep 14, 2020
There's room to increase stimulus, but not at the expense of letting lawmakers off the hook.

Financial Anxiety Is Up Around the Globe
Ben Schott (Bloomberg View) Sep 14, 2020
And many households are woefully unprepared for the next economic crisis.

Financial Anxiety Is Up Around the Globe
Ben Schott (Bloomberg View) Sep 14, 2020
And many households are woefully unprepared for the next economic crisis.

Reclaiming American Greatness
Joseph E. Stiglitz (Project Syndicate) Sep 14, 2020
After nearly four years of US President Donald Trump and the Republicans undermining the state and looting the public purse, it is no wonder that the country was so unprepared for the COVID-19 crisis. America's best hope now lies with Joe Biden, whose greatest strength is his potential to reunify a divided populace.

International friends and enemies
Benny Kleinman, Ernest Liu, and Stephen Redding (VoxDev) Sep 14, 2020
As countries become greater economic friends in terms of the welfare effects of their productivity growth, they become greater political friends in terms of United Nations voting and strategic rivalries

Issues arising from the new 'Powell doctrine'
Ignazio Angeloni (VoxEU) Sep 14, 2020
The long-awaited outcome of the Federal Reserve's monetary strategy review is finally out. This column argues that while the 'Powell doctrine' responds to a genuine need to address issues in the Fed's policy framework, it also introduces complexities in the interpretation and implementation of monetary policy which are likely to become more apparent over time. The hurdles involved do not have easy solutions, and other central banks pondering their own monetary policy framework are well advised to take heed.

Capital markets, COVID-19, and policy measures
Khalid ElFayoumi and Martina Hengge (VoxEU) Sep 14, 2020
The COVID-19 pandemic and associated policy responses triggered a historically large wave of capital reallocation between markets, asset classes, and industries. This column uses high-frequency data to show that capital market dynamics were not exclusively driven by undiscriminating global factors. Instead, the degree of the spread of the virus, the stringency of the lockdown, and the fiscal policy response played key roles in explaining the wide heterogeneity in international portfolio flows across countries, particularly for emerging markets.

Japan's Suga Will Struggle to Pull off Abe's Defense Transformation
Jack Detsch (FP) Sep 14, 2020
The new Japanese prime minister shares many of outgoing Shinzo Abe's policies—but isn't as wedded to Abe's big overhaul.

Retail investors are being squeezed out of the high-yield bond market
Ellen Carr (FT) Sep 15, 2020
The SEC should reform 144A regulation to prevent Wall Street streaking further ahead.

U.S. Poverty Hit a Record Low Before the Pandemic Recession
Jeanna Smialek, Sarah Kliff and Alan Rappeport (NYT) Sep 15, 2020
The share of Americans in poverty in 2019 declined and median incomes were the highest on record, a Census Bureau report showed.

Japan's New Prime Minister
WSJ Sep 15, 2020
Yoshihide Suga could bring renewed energy for economic reform.

How the pandemic has boosted a green economy
David Von Drehle (WP) Sep 15, 2020
The virus instituted sudden, deep cuts across industries that individual businesses would have struggled to implement.

How Xinjiang is holding back an EU-China deal
Pepe Escobar (AT) Sep 15, 2020
A Beijing-Brussels-Berlin special: that was quite the video summit. From Beijing, we had President Xi Jinping. From Berlin, Chancellor Angela Merkel. And from Brussels, President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen. The Chinese billed it as the first summit "of its kind in history."

Why the EU and China can't agree on a deal
David Hutt (AT) Sep 15, 2020
At the start of 2020, German Chancellor Angela Merkel thought this week she would be welcoming Chinese President Xi Jinping and the heads of other European governments for a major summit in Leipzig, her diplomatic swansong as she prepares to step down after 15 years in power and a moment for both sides to finally agree on terms on a much-vaunted investment pact.

Charting a Path for a Resilient Recovery in Sub Saharan Africa
Kristalina Georgieva and Abebe Aemro Selassie (IMF) Sep 15, 2020
Why resilience matters.

A "Rosetta Stone" for Comparing Test Scores Around the World (and Across the Global Income Distribution)
Dev Patel and Justin Sandefur (CGD) Sep 15, 2020
How much do educational outcomes around the world depend on where you were born? How about your place in the local or global income distribution? Your gender? Or whether you attend a public or private school?

The Health, Economic, and Political Challenges Facing Latin America and the Caribbean
Monica de Bolle (PIIE) Sep 15, 2020
The COVID-19 pandemic struck Latin America in late February 2020. Governments in the region had at least two months to prepare for the pandemic by adopting public health strategies, economic rescue plans, and policies to protect millions of informal and vulnerable workers throughout the region. There was time for these governments to learn from other countries on how to address the pandemic in its early stages. Despite the time advantage, none of these preparations occurred.

China's 'dual circulation' plan is bad news for others' exports
Alicia García-Herrero (Bruegel) Sep 15, 2020
Minds in Beijing are focusing increasingly on the upcoming meeting of the Chinese Communist Party Central Committee next month. High on the body's agenda will be sketching out a new official five-year plan for Asia's largest economy.

Without good governance, the EU borrowing mechanism to boost the recovery could fail
Guntram B. Wolff (Bruegel) Sep 15, 2020
The European Union recovery fund could greatly increase the stability of the bloc and its monetary union. But the fund needs clearer objectives, sustainable growth criteria and close monitoring so that spending achieves its goals and is free of corruption. In finalising the fund, the EU should take the time to design a strong governance mechanism.

U.K. Housing Is a Sick Canary in the Economic Coal Mine
Mark Gilbert (Bloomberg View) Sep 15, 2020
British lenders are starting to pull back from the housing market. That bodes ill for the economic outlook.

Is OPEC's Power Over the Oil Market Broken?
Ellen R Wald (Bloomberg View) Sep 15, 2020
Not necessarily, but it is certainly less effective now. Taking stock of an aging cartel at 60.

How Yoshihide Suga Can Finish What Shinzo Abe Started
Noah Smith (Bloomberg View) Sep 15, 2020
Japan's new premier must focus on corporate efficiency, gender equality, and raising low-end incomes.

Expect More Venezuelas in the Post-Peak Oil Era
David Fickling (Bloomberg View) Sep 15, 2020
Producers that aren't able to diversify in time will face economic collapse.

Congress's Last Chance to Avoid a Long Recession
Karl W Smith (Bloomberg View) Sep 15, 2020
A bipartisan pandemic relief plan isn't perfect but could break a congressional logjam.

Africa Needs Market-Creating Innovation
Carl Manlan and Efosa Ojomo (Project Syndicate) Sep 16, 2020
Africa's economic growth over the last 25 years has been accompanied by soaring inequality, which the COVID-19 pandemic threatens to worsen. Developing innovative products for the continent's poorer "nonconsumers" will provide a more predictable, inclusive, and sustainable path to prosperity for hundreds of millions of people.

Abenomics After Abe
Akira Kawamoto (Project Syndicate) Sep 15, 2020
Reviving Japan's sluggish economy will require incoming Prime Minister Yoshihide Suga to make a clear break from his predecessor and patron, Shinzo Abe, and pursue wide-ranging structural reforms. Suga's best strategy might therefore be to call a snap general election to gain the popular mandate he will need.

The COVID Silver Linings Playbook
Mohamed A. El-Erian (Project Syndicate) Sep 15, 2020
The old adage that every crisis represents an opportunity is certainly true in the case of COVID-19. Now that the pandemic has lasted longer and wrought more destruction than many initially anticipated, it is all the more important that policymakers seize on the positive trends it has incidentally set in motion.

Crunch Time for Central Banks
Stefan Gerlach (Project Syndicate) Sep 15, 2020
In little more than a decade, the global financial crisis, climate change, and the COVID-19 pandemic have transformed the environment in which central banks operate – and public opinion is not on their side. Monetary policymakers who fail to respond to these shifts in sentiment will see their reputations suffer.

International tourism and short-run growth
Yuxian Chen and Yannis Ioannides (VoxEU) Sep 15, 2020
With the COVID-19 pandemic raging at the beginning of the summer of 2020, countries that depend heavily on international tourism were confronted with the dilemma of whether or not to let travel restart. This column uses international data to explore the relationship between tourism specialisation and short-run economic growth. The results suggest that a 1% increase in tourism specialisation is associated with 0.01 percentage point increase in the growth rate of GDP per capita for OECD countries. This is in line with previous findings but is based on up-to-date panel data.

For Iran, Negotiations Aren't Optional
Ariane Tabatabai and Henry Rome (FP) Sep 15, 2020
With its economy in trouble, Tehran will have to talk to Washington. But the next administration shouldn't rush things.

Weaning Britain's economy off furlough
FT View Sep 16, 2020
The scheme worked well, but new approaches are needed for the next phase.

Ditch the zombies and embrace the entrepreneurs
DeAnne Julius (FT) Sep 16, 2020
We must acknowledge that Covid-19 has permanently changed our economy.

World Bank piles pressure on private creditors for EM debt relief
Andrew Jack and Jonathan Wheatley (FT) Sep 16, 2020
Emerging economies face 'lost decade' if debt costs divert social spending.

The Higher Wages of Growth
WSJ Sep 16, 2020
Before the pandemic, income growth soared and poverty fell to the lowest rate since 1959.

An Aluminum Tariff Reprieve
WSJ Sep 16, 2020
The U.S. lifts penalties on Canada, at least through Election Day.

A New Pact Will Help Derivatives Markets
Valdis Dombrovskis and Heath Tarbert (WSJ) Sep 16, 2020
The EU and U.S. are committed to sound regulation.

Europe's Economic Revival Is Imperiled, Raising the Specter of a Grinding Downturn
Peter S. Goodman and Liz Alderman (NYT) Sep 16, 2020
As the coronavirus regains force, economists fear that Europe's tentative recovery is at risk from traditional political concerns.

Boris Breaks the Divorce Treaty: What Can the EU Do?
Holger Schmieding (Globalist) Sep 16, 2020
The ways in which the EU can put pressure on a UK that is going rogue are very limited — and potentially vast at the same time.

Coronavirus: Living with Uncertainty
Laurence Boone (OECD Ecoscope) Sep 16, 2020
The global economy is facing unprecedented uncertainty as the evolution of the Covid-19 pandemic weighs heavily on the economic outlook. Nine months after the initial outbreak in Wuhan, it is still difficult to predict the path of the virus. Each country has been hit in a different way, and response strategies have varied. There is much we still do not know. Research for a vaccine is ongoing across the globe, but more needs to be done to prepare for mass-scale testing, manufacturing and distribution that will be required. It seems clear today that we will have to live with the virus for some time, with our principal defence being tigher hygiene standards and physical distancing measures.

Ensuring Financial Stability in the Era of COVID-19: Recommendations for Latin America and the Caribbean
Liliana Rojas-Suarez and Andrew Powell (CGD) Sep 16, 2020
With a surging pandemic, income losses, and a deepening recession, Latin America and the Caribbean is facing a health and economic crisis that will test its financial systems like few events in modern times. The blow, however, can be softened. Banks as well as governments and central banks can play a crucial role, providing financing to lessen the impact on families and firms and to speed the recovery.

The EU Needs Banks to Merge Across Borders
Ferdinando Giugliano (Bloomberg View) Sep 16, 2020
It would not only be a show of unity, but an essential step to boost financial stability across Europe.

Making the WTO Work for Africa
Hippolyte Fofack and Pat Utomi (Project Syndicate) Sep 16, 2020
Three Africans are among the eight candidates to become the World Trade Organization's next director-general. But regardless of who eventually prevails, Africa must demand a level playing field from the WTO.

Central Banking's Next Act
Howard Davies (Project Syndicate) Sep 16, 2020
Central banking seemed to have reached an "end of history" moment in the mid-1990s, when inflation targeting spread round the world after its success in New Zealand. A generation later, history has started again, with unpredictable consequences.

The Greatest Generation's Squandered Legacy
Daron Acemoglu (Project Syndicate) Sep 16, 2020
As profound as the COVID-19 crisis seems to us now, it pales in comparison to what previous generations faced. Unlike in the past, however, today's biggest threats must be addressed at both the national and global levels, implying the need for political leadership of a kind that is utterly lacking in today's world.

A Light in the East
Slawomir Sierakowski and Donald Tusk (Project Syndicate) Sep 16, 2020
Although the peaceful protests in Belarus have yet to overturn the results of August's fraudulent presidential election, they have continued to grow.

The Dynamics of the U.S. Trade Deficit During COVID-19: The Role of Essential Medical Goods
Fernando Leibovici and Ana Maria Santacreu (FRBSL Econ Synopses) Nov 16, 2020
The COVID-19 pandemic caused a decline in overall global trade: In the first half of 2020, exports of U.S. goods dropped by almost 25%, while imports dropped by about 17%. The U.S. trade deficit increased by about 20%, reaching a value of $8.65 billion. And the pandemic-induced increase in the trade of essential medical goods accounted for 41.3% of that increase in the U.S. trade deficit.

Peak China Housing?
Kenneth Rogoff and Yuanchen Yang (VoxChina) Sep 16, 2020
China's real estate market has been a key engine of its sustained economic expansion. This paper argues, however, that even before the COVID-19 shock, a decades-long housing boom had given rise to price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. Based on input-output analysis and benchmarking against other economies, we estimate the size of China's real estate–related activities to be 29% of the economy and conclude that the sector is quite vulnerable to a sustained aggregate growth shock.

COVID-19 Has Crushed Everybody's Economy—Except for South Korea's
Morten Soendergaard Larsen (FP) Sep 16, 2020
Seoul seems to have shown the way to mitigating both the health and the economic fallout of the coronavirus pandemic.

The Dutch Don't Love Europe—and Never Did
Caroline de Gruyter (FP) Sep 16, 2020
The world has been surprised by the Netherlands' growing hardline record in Brussels. It shouldn't be.

FOMC Signals It Is on Hold for Foreseeable Future
Jay H. Bryson (WF) Sep 16, 2020
Most FOMC members expect that rates will be on hold through 2023. The Fed could eventually dial up the rate of its asset purchases if inflation does not soon show signs of moving up toward 2%.

Equity investors should raise a glass to low rates
Gillian Tett (FT) Sep 17, 2020
BIS calculations highlight just how important central bank easing has been.

Boris Johnson's Brexit plan will break the UK union
Philip Stephens (FT) Sep 17, 2020
The insistence that England must decide what Scotland eats is a gift to the independence movement.

Covid crisis has accelerated big trends in China's favour
Jim McCormick (FT) Sep 17, 2020
Recent renminbi rally underscores shift in the economic balance from west to east.

Support people rather than jobs for a more resilient post-Covid economy
Chris Giles (FT) Sep 17, 2020
Unless a vaccine is suddenly found, helping workers find alternative jobs is better than waiting and hoping.

The Age of the 'Unknown Unknowns'
Richard J. Shinder (WSJ) Sep 17, 2020
The big lesson of 2020: Companies can't count on government to deal with unanticipated risks.

Suga's team looks like old wine in a new bottle
William Pesek (AT) Sep 17, 2020
Japan's diminutive new Prime Minister Yoshihide Suga certainly does not have the build of a sumo wrestler – and probably does not have the mindset of one, either. That's a shame because the Japanese brand of politics is crying out for some of the core skills from the Japanese brand of wrestling.

America's domination of oil and gas will not cow China
Economist Sep 17, 2020
Being an importer of fossil fuels and an exporter of renewable technology is not so bad.

Will smaller trade deficits bring back manufacturing jobs?
Robert Z. Lawrence (PIIE) Sep 17, 2020
President Donald Trump harnessed his successful 2016 presidential campaign to the issue of lost manufacturing jobs and the "evils" of trade deficits. The Republican national convention in August 2020 demonstrated his determination to do so again. Trump blames trade and offshoring of manufacturing jobs overseas. Democratic presidential nominee former vice president Joe Biden is also making the recovery of manufacturing jobs central to his campaign. Both Trump and Biden propose new programs to enhance US industrial production and technologies. But the problem is that some of their proposals may be less effective in creating additional manufacturing jobs than they assume.

Private equity and Europe's re-capitalisation challenge
Alexander Lehmann (Bruegel) Sep 17, 2020
Companies are struggling in the coronavirus crisis but solvency support provided by the European Union looks likely to be modest. This will make private equity more important in the recovery, and could create a springboard for longer-term reform to boost private equity.

Powell Can't Disguise the Limits of Monetary Policy
Bloomberg View Sep 17, 2020

IMF Lending During the Pandemic and Beyond
Robert Gregory, Huidan Lin, and Martin Mühleisen (IMF) Sep 17, 2020
In the face of unprecedented uncertainty and the severe economic impact triggered by COVID-19, the Fund continues to adapt its lending. At the same time, it aims to ensure realistic targets, uphold the credibility of programs, and foster national ownership.

Interest Rate Cuts Are Dead. Long Live Rate Cuts
Daniel Moss (Bloomberg View) Sep 17, 2020
Asia's central banks are moving away from reductions in borrowing costs as the primary tool of monetary easing.

Green Bonds Should Have Green Strings Attached
Marcus Ashworth (Bloomberg View) Sep 17, 2020
It's cheap for governments and firms to raise cash via so-called green bonds. We need a framework that hurts in the wallet if green promises are broken.

After Oil: Throwing Money at Green Energy Isn't Enough
Margaret L O'Sullivan (Bloomberg View) Sep 17, 2020
Lots of stimulus funds are being directed to renewable technologies, but government policies will be more important.

The Fed Wants Higher Inflation. Should You?
Brian Chappatta and Elaine He (Bloomberg View) Sep 17, 2020
The push for persistently higher prices might raise some unsettling questions.
The Federal Reserve has left the main questions about its new approach unanswered.

Are Stocks Losing Some of Their Liquidity Momentum?
Mohamed Aly El-Erian (Bloomberg View) Sep 17, 2020
The effect of Fed support may be fading with no second wind in sight from fundamentals and policies.

Japan's Geopolitical Balancing Act Just Got Harder
Minxin Pei (Project Syndicate) Sep 17, 2020
Former Japanese Prime Minister Shinzo Abe managed to strike a delicate diplomatic balance between China and the United States. But as Sino-American tensions escalate, his successor, Yoshihide Suga, will find it increasingly difficult to avoid taking sides, especially on technology issues and security arrangements.

How Poverty Reduction Can Survive Deglobalization
Pinelopi Koujianou Goldberg (Project Syndicate) Sep 17, 2020
By sharply curtailing international trade, the COVID-19 pandemic has accelerated a trend that was already underway. It is now more important than ever for developing countries to seek alternatives to export-led growth.

Globalisation and the fall in markups in Poland
Michal Gradzewicz and Jakub Muck (VoxEU) Sep 17, 2020
There has been a lively debate concerning the dynamics of markups. This column contributes to this debate by studying the relationship between globalisation and monopolistic markups in Poland. It highlights important non-linearities leading to an uneven distribution of the effects of global value chains for participating firms, with lowest benefits found for firms in the middle of the production chain where goods are highly standardised and substitutable. It also documents a fall in markups for Poland which can be explained by rising dependence on imported intermediates in export-oriented production and fiercer competition of domestic firms on export markets.

Extracting implicit country weights in the ECB's monetary policy
Márcia Pereira and José Tavares (VoxEU) Sep 17, 2020
Crises such as the sovereign debt crisis and the current Covid-19 crisis place significant pressure on European institutions, raising scepticism over policy decisions and speculation as to how member states' differing needs are taken into account. This column uses estimated counter-factual country-specific interest rates to extract the country weights implicit in the ECB's conventional monetary policy. Germany, Belgium and the Netherlands are associated with the largest weights, and Greece and Ireland with the smallest. Nonetheless, the weights of the larger economies are smaller than their output and population shares. The results change minimally when the crisis period is compared with the period before. In sum, while weights differ across countries, they do not seem to unduly weigh larger economies. Further, estimated country weights are positively correlated with the degree of co-movement between each country's and Germany's business cycles.

Immigration and the top 1%
Arun Advani, Felix Koenig, Lorenzo Pessina, and Andy Summers (VoxEU) Sep 17, 2020
Top incomes have grown rapidly in recent decades and this growth has sparked a debate about rising inequality in Western societies. This column combines data from UK tax records with new information on migrant status to show that that migrants are highly represented at the top of the UK's income distribution. Indeed, migration can account for the majority of top-income growth in the past two decades and can help explain why the UK has experienced an outsized increase in top incomes.

The slow death of Big Oil
FT View Sep 18, 2020
The industry must reinvent itself to survive in a low-carbon era.

China's assertiveness is against its economic interests
FT View Sep 18, 2020
Beijing has stoked a series of flashpoints on the country's borders.

Why China's recovery is not what it seems
Michael Pettis (FT) Sep 18, 2020
Imbalances will continue to set China back unless retail sales once again begin to outpace industrial production.

Ending China's Chokehold on Rare-Earth Minerals
James N Mattis, James O Ellis, Joseph H Felter, and Kori Schake (Bloomberg View) Sep 18, 2020
The U.S. and allies can break Beijing's monopoly on elements vital to electronics and national defense.

No-deal hype obscures the real threat of a bad Brexit
Henry Mance (FT) Sep 18, 2020
Failing to prepare for the most likely outcome of EU talks will damage the UK further.

Milton Friedman Was Right About Shareholder Capitalism
Michael R Strain (Bloomberg View) Sep 18, 2020
Today's critics misunderstand the Nobelist's 1970 admonition to put profit first; he was not rationalizing corporate misconduct or short-termism.

Milton Friedman Was Wrong. Look at Income Inequality.
Joe Nocera (Bloomberg View) Sep 18, 2020
The economist's doctrine has warped our understanding about the people an economy is supposed to serve.

U.K. Is Still Two Levers From Negative Rates
Marcus Ashworth (Bloomberg View) Sep 18, 2020
Sterling markets got a jolt when the Bank of England said it was contingency planning for taking rates below zero. But it's not out of conventional tools yet.

The Post-Pandemic Recovery's Missing Link
Bertrand Badré an Aurélie Jean (Project Syndicate) Sep 18, 2020
Not only is the COVID-19 pandemic and recession unprecedented in many ways, but so, too, have been the responses by scientific organizations and financial institutions. But, in a climate of deepening public distrust, it is unclear how long these interventions can be sustained.

The Roots of American Misery
James K. Galbraith (Project Syndicate) Sep 18, 2020
Among recent inquiries into the sources of American discontent, one finds many simplistic diagnoses based on dubious cliches, but also deep insights that look beyond headline economic indicators and conventional wisdom. And yet analyses that address root causes and offer meaningful solutions remain few and far between.

The international dimension of a fragile EMU
Demosthenes Ioannou, Maria Sole Pagliari, and Livio Stracca (VoxEU) Sep 18, 2020
The debate over the incomplete and fragile nature of Europe's Economic and Monetary Union has been revived by the Covid-19 pandemic. This column shows that adverse shocks within EMU can be identified and are transmitted to the rest of the world, with implications for economic activity and trade in advanced and emerging economies. Despite the important steps taken during the pandemic by euro area authorities, the drive to complete EMU with a genuine fiscal and financial union needs to continue for the sake of both the euro area and the rest of the world.

Slowdown in productivity growth compounded by COVID-19
Alistair Dieppe (VoxEU) Sep 18, 2020
Since the 2008 global financial crisis, improvements in many key correlates of productivity growth have slowed or gone into reverse, and labour reallocation to more productive sectors from less productive ones has also weakened. Furthermore, the pace of convergence of emerging market and developing economies to advanced-economy productivity levels has slowed. This column argues that the COVID-19 pandemic is likely to compound the slowdown, with profound implications for development outcomes. A comprehensive broad-based approach is necessary to rekindle productivity.

Post-pandemic debt sustainability in the EU/euro area
Lorenzo Codogno and Giancarlo Corsetti (VoxEU) Sep 18, 2020
The EU Recovery Plan agreed upon in July 2020 supports investment activity through grants and loans to member states at close-to-zero interest rates. This column suggests that its implementation could give a substantial boost to the economy and fiscal revenues under very conservative assumptions on multipliers. In addition, as the ECB is keeping interest rates and government bond yields low, also through its asset purchase programmes, if it refrains from reacting forcefully to potential upward pressures on prices caused by the massive fiscal stimulus, even a gradual and delayed 'normalisation' of interest rates would not undermine debt sustainability.

Why inflation in the US has been so stable since the 1990s
Marco Del Negro, Michele Lenza, Giorgio Primiceri, and Andrea Tambalotti (VoxEU) Sep 18, 2020
The analysis of inflation dynamics and their possible changes over time is a key input in the design of monetary policy, particularly in the context of the strategy reviews recently undertaken by the Federal Reserve and currently under way at the ECB and other central banks. This column studies the causes of the stability of US inflation over the business cycle since the 1990s. It concludes that the stability is mainly due to a reduced sensitivity of firms' pricing decisions to their cost pressures. Ignoring this observation could impair the ability of monetary policy to steer inflation toward its objective.

Brexit Is a Distraction from the United Kingdom's Real Economic Woes
Tej Parikh (FP) Sep 18, 2020
To rebuild its position as a powerhouse, the country will need to focus on its deeper problems.

Lessons for investors from six months of pandemic-hit markets
Michael Mackenzie (FT) Sep 19, 2020
Fighting momentum is futile, but the return of inflation would create opportunities.

The intergenerational transmission of wealth in rich countries
Brian Nolan, Juan C. Palomino, Philippe Van Kerm, and Salvatore Morelli (VoxEU) Sep 19, 2020
Whether and how much intergenerational transfers contribute to wealth inequality is still subject to debate. This column analyses household survey data on inheritance and gifts inter vivos in France, Germany, Great Britain, Ireland, Italy, Spain, and the US to relate current household wealth levels and inequality to the receipt of intergenerational wealth transfers. In these countries, large transfers increase overall wealth inequality. Strengthening taxation capacity and instating lifetime capital acquisitions tax for gifts and inheritances may help counter the dis-equalising effect of intergenerational transfers.

Beware of smoke and mirrors in the EU's recovery fund
Wolfgang Münchau (FT) Sep 20, 2020
National political pressures will divert money from truly worthwhile projects.

How to survive the Covid-19 retail apocalypse
Rana Foroohar (FT) Sep 20, 2020
There are lessons to be learnt from the crisis, especially for companies willing to adapt.

The west should heed Napoleon's advice and let China sleep
Kishore Mahbubani (FT) Sep 20, 2020
The next phase of western policy demands a complete reboot of its dealings with the Communist party.

AIIB walks the talk on multilateralism
Chris Legg (EAF) Sep 20, 2020
The Chinese-inspired Asian Infrastructure Investment Bank (AIIB) which recently marked four-and-a-half years of operations at its 2020 Annual Meeting. The meeting focused on how to build on the AIIB's success in establishing itself as a respected multilateral financier of quality infrastructure investments, while pivoting in support of its members' response to COVID-19. The question now is to ensure that the AIIB remains an anchor for consensus in the region.

The easy money fuelling the market's fever
FT View Sep 21, 2020
Low interest rates by central banks have helped to sustain the rally in equities.

Expect long-term economic scarring from Covid-19
Gavyn Davies (FT) Sep 21, 2020
Forecasts for GDP growth look optimistic, but the risks of permanent losses are worrying.

It's time to end the male monopoly in international trade
Linda Scott (FT) Sep 21, 2020
Any reform of the global system must explicitly address the restrictions women face.

US Treasury market's brush with disaster must never be repeated
Robin Wigglesworth (FT) Sep 21, 2020
Fed tamed the chaos in March but must take further action to buttress future solidity.

Beware the long arms of American and Chinese law
Gideon Rachman (FT) Sep 21, 2020
A rules-based order is giving way to something that feels more like 19th-century imperialism.

African countries 'ready to open our doors again to the world'
David Pilling, Andres Schipani, and Joseph Cotterill (FT) Sep 21, 2020
Falling infection rates spur nations to ease curbs on lockdown-battered economies.

Dollar doomed as China shifts to consumption
Uwe Parpart and David P. Goldman (AT) Sep 21, 2020
Morgan Stanley's former Asia Chairman Stephen Roach and Bridgewater founder Ray Dalio, among others, have recently warned that the US dollar may lose a third of its value.

France, Germany, and Italy press ahead to spur their economies
Simeon Djankov (PIIE) Sep 21, 2020
he COVID-19 pandemic compelled the G7 advanced industrial democracies to take drastic action to buttress their economies earlier in 2020, focusing on job retention and business loan guarantee programs. More than six months later, however, only France, Germany, and Italy have launched or are moving toward a second round of recovery plans. The other four G7 economies (Canada, Japan, the United Kingdom, and the United States) are still focused on crisis response, though many initial measures have been extended, particularly with regard to job retention schemes.

The World Bank is Evaluating Doing Business. Here Are Some Questions It Should be Asking
Vijaya Ramachandran (CGD) Sep 21, 2020
The World Bank's Independent Evaluation Group has begun an evaluation of one of the Bank's flagship products—Doing Business. It is asking whether Doing Business indicators capture reform priorities and whether using Doing Business indicators to drive Bank operations makes sense. I am one of three peer reviewers for this exercise which is in two phases. Here, I present four questions that I believe must underpin all aspects of the Independent Evaluation Group (IEG) evaluation.

Doing Business rankings that endanger good regulations
Vinod Thomas (Brookings) Sep 21, 2020
With climate and health crises mounting, the case is loud and clear for countries to ensure regulations that protect the environment, health, and safety. Yet, indexes like the World Bank's Doing Business (DB) that rank countries on their business settings—while rightly penalizing wasteful impediments that slow investments—wrongly discourage vitally needed socioeconomic guidelines. The recently announced break in the World Bank's issuance of DB country rankings—because of statistical irregularities—is a chance for the institution to not only revisit data problems but to correct the basic flaw in the indicator's analytical framework.

Angola: Confronting the COVID-19 Pandemic and the Oil Price Shock
IMF Sep 21, 2020
The COVID-19 pandemic and the shock from the falling price of oil have put severe pressure on Angola since the country's second review under the Extended Fund Facility (EFF) in December 2019.

Don't Overthink China's Strengthening Yuan
Daniel Moss (Bloomberg View) Sep 21, 2020
Its economy is recovering and policy makers have avoided open-slather stimulus. This all makes sense, for now.

Treasury Has $541 Billion of Dirty Little Secrets
Shuli Ren (Bloomberg View) Sep 21, 2020
Government data vastly underestimate Americans' exposure to Chinese stocks.

Boris Johnson Stumbles Into Yet Another Crisis
Therese Raphael (Bloomberg View) Sep 21, 2020
The U.K. prime minister must manage a rise in infections and a shrinking economy at a time when political support is dwindling.

Why New York's in a Depression and Texas Isn't
Conor Sen (Bloomberg View) Sep 21, 2020
The K-shaped recovery applies to geography too.

Why Saudi Arabia Wants to Scare Oil Traders
Julian Lee (Bloomberg View) Sep 21, 2020
The country's oil minister talks tough to fellow OPEC+ members and oil traders alike.

The ECB Walks a Tightrope on Banks
Ferdinando Giugliano (Bloomberg View) Sep 21, 2020
The supervisor was right to ease rules on lenders during the crisis. Now the challenge is determining when (and whether) to get tougher.

Celebrating 75 Years of the United Nations
José Antonio Ocampo (Project Syndicate) Sep 21, 2020
The UN embodies the best of humanity – the belief that all people deserve basic dignity, and that working together is the only way to deliver it. Seventy-five years after its birth, the world – beginning with the United States – must revive that belief, and recommit to the multilateralism that it demands.

The Economic Case for Biden
Edmund S. Phelps (Project Syndicate) Sep 21, 2020
US President Donald Trump has seeded the investment environment with uncertainty, trashed America's trade relationships, blown up the fiscal deficit, and left American workers worse off than they were when he took office. He is the polar opposite of Joe Biden, a politician who understands precisely what the US economy needs.

How economic development shapes emigration
Michael Clemens (VoxDev) Sep 21, 2020
Aid agencies have invested in the idea that economic development reduces emigration from poor countries, but the experience has been very different

An age of rising inequality? No, but yes
Ravi Kanbur (VoxEU) Sep 21, 2020
From the public discourse, it seems clear that we are living in an age of rising inequality. However, common measures of income and consumption inequality disguise a more nuanced pattern of inequality change across the world. This column argues that inequality within countries has not been rising everywhere and that inequality between countries has decreased. At the same time, technological progress is increasingly displacing basic labour in favour of skilled labour and capital, across borders, and widening the wage gap. The overall effect is unclear. National policies to mitigate inequality are needed but, in the absence of international cooperation, are constrained by cross-border spillovers.

Jumpstarting an international currency
Saleem Bahaj and Ricardo Reis (VoxEU) Sep 21, 2020
Only a handful of currencies are regularly used for cross-border payments, with the US dollar dominating almost any measure of international use. This column analyses the preconditions for a currency to achieve international status and asks whether government policies can assist in this process. Theoretically, it argues that international status depends on several thresholds, including a currency's volatility, the size of the issuing country, and the borrowing costs involved. Empirically, it shows that swap line agreements signed by the People's Bank of China significantly increase the likelihood of renminbi usage in the following months, signalling the effectiveness of this policy.

Did the $600 Unemployment Supplement Discourage Work?
Nicolas Petrosky-Nadeau and Robert G. Valletta (FRBSF Econ Letter) Sep 21, 2020
People receiving unemployment insurance benefits during the COVID-19 recession were entitled to $600 of additional payments per week through July. This large increase in benefit payments raised a concern that recipients would delay returning to work. However, analysis suggests that the available aid would not outweigh the value of a longer-term stable income in workers' decisions to accept job offers. Evidence from recent labor market outcomes confirms that the supplemental payments had little or no adverse effect on job search.

Economic Modeling in the Post-COVID Era: Part I
Azhar Iqbal, Shannon Seery, and Hop Mathews (WF Econ Group) Sep 21, 2020
The great disruption caused by COVID-19 has led to historic levels of economic volatility. In part one of an upcoming series, we consider what lasting effects this period could have on econometric modeling.

Investors are getting pickier in emerging markets
Jonathan Wheatley (FT) Sep 22, 2020
Low-rated borrowers could struggle as recovery slows and leverage attracts more focus.

Virus prompts rethink of developing economies' urban planning
Jonathan Wheatley (FT) Sep 22, 2020
Cities grapple with question of how to organise crowded areas to slow pandemic spread.

The rise of the foreign funds that distort western politics
Josh Rudolph (FT) Sep 22, 2020
Covert Russian and Chinese money is playing an ever increasing role.

Stakeholder Capitalism Gets a Report Card. It's Not Good.
Peter S. Goodman (NYT) Sep 22, 2020
The pandemic and the movement for racial justice have tested corporate pledges to elevate social concerns alongside shareholder interests. A new study finds companies are failing to follow through.

China Backslides on Economic Reform
Kevin Rudd and Daniel Rosen (WSJ) Sep 22, 2020
Under Xi Jinping, Beijing hasn't liberalized. It's doubled down on politically directed state capitalism.

Is international law breaking down?
Brian Caplen (Banker) Sep 22, 2020
Banking and commerce rely on contracts and rules being adhered to. International agreements between nations – the highest order of this rules-based system – are under pressure. Should bankers be worried?

Italy Is Stable But It's Still in Trouble
Ferdinando Giugliano (Bloomberg View) Sep 22, 2020
While local election results will reassure the EU and investors, the ruling Five Star-Democrat coalition is unlikely to solve the country's deeper problems.

Price Is No Longer an Obstacle to Clean Power
Peter R Orszag (Bloomberg View) Sep 22, 2020
The costs of renewable energy and battery storage have plummeted, just as most old coal plants need to be replaced.

Trump's Spectacular Trade Failure
Anne O. Krueger (Project Syndicate) Sep 22, 2020
Since coming to office in early 2017, US President Donald Trump has assumed that America could secure better "deals" with trading partners around the world by negotiating with them bilaterally. But after three and a half years, the evidence is clear: US trade policy has achieved the opposite of Trump's stated goals.

The EU Stands With the UN
Josep Borrell (Project Syndicate) Sep 22, 2020
Phrases like the "multilateral system" and "the rules-based international order" seem vague and lack the ring of "America First" or "Take Back Control." But they stand for something very concrete and real – not least the choice between peace and war.

Avoiding a Climate Lockdown
Mariana Mazzucato (Project Syndicate) Sep 22, 2020
The world is approaching a tipping point on climate change, when protecting the future of civilization will require dramatic interventions. Avoiding this scenario will require a green economic transformation – and thus a radical overhaul of corporate governance, finance, policy, and energy systems.

Income inequality and the welfare state during COVID-19
Oriol Aspachs, Ruben Durante, José García-Montalvo, Alberto Graziano, Josep Mestres, and Marta Reynal-Querol (VoxEU) Sep 22, 2020
The economic crisis from the COVID-19 pandemic may disproportionately affect the most vulnerable segments of the population, creating serious challenges for social cohesion and political stability. This column constructs a high-frequency measure of income inequality using anonymised data from bank records on the wages and public transfers of over three million account holders in Spain. Wage inequality increased by almost 30% during the COVID-19 crisis, mainly due to job losses and wage cuts for low-income workers. However, public transfers were very effective at offsetting most, though not all, of this increase.

What Will the Fed Do If Inflation Doesn't Hit 2%?
Jay H. Bryson (WF Econ Group) Sep 22, 2020
If inflation expectations do not move meaningfully higher in coming months, the FOMC may feel compelled to add more monetary accommodation. In our view, an increased pace of QE purchases would be the most likely tool that Fed policymakers would employ, at least in the foreseeable future.

Private equity's risky cheap debt move
FT View Sep 23, 2020
The industry's rush to dividend recapitalisations has wider implications.

Are markets in a bubble because traders live in one?
Dominique Mielle (FT) Sep 23, 2020
Lack of diversity among investment managers contributes to groupthink.

Jay Powell adds voice to small business cry for help
William Cohan (FT) Sep 23, 2020
US recovery will never come until the companies that account for most jobs get back on their feet.

Populists and kleptocrats are a perfect match
Martin Sandbu (FT) Sep 23, 2020
Liberal democrats in Europe and the US are not doing enough to curb money laundering.

China has the upper hand in corporate proxy wars with US
Tom Mitchell (FT) Sep 23, 2020
Xi was better than Trump at playing the long game during their first tussle involving ZTE and Qualcomm.

Why we need to put a number on our natural resources
Gillian Tett (FT) Sep 23, 2020
People find it easier to consider nature worth protecting when we assign a financial value to it.

Are Intellectuals Killing Convergence?
Arvind Subramanian and Josh Felman (Project Syndicate) Sep 23, 2020
There is every reason to worry that a historic process of deglobalization is underway, threatening to scuttle the growth models of poor countries that previously used trade as a path to prosperity. Worst of all, this disturbing shift has been met by silence or even encouragement by those who should know better.

Returning to Multilateralism
Ban Ki-moon (Project Syndicate) Sep 23, 2020
For 75 years, the United Nations has provided an imperfect but unrivaled global forum for advancing peace, prosperity, and human rights, standing as a bulwark against another world war. But the COVID-19 pandemic presents the world's premier multilateral body with its biggest challenge yet.

Europe's Digital Emergency
Carl Bildt (Project Syndicate) Sep 23, 2020
Although the European Union already has a lot on its hands as it confronts a new wave of COVID-19 infections and seeks to position itself for a sustainable recovery, it must not ignore another crisis looming on the horizon. The bloc is rapidly and inexcusably falling behind China and America in the digital transition.

The Financial Climate Has Reached a Tipping Point
Huw van Steenis (Project Syndicate) Sep 23, 2020
Having witnessed the turmoil of the COVID-19 crisis, markets are focusing more than ever on the risks posed by climate change. In fact, it is now governments that are lagging behind in facilitating the financial industry's long-awaited shift toward more environmentally attuned standards and investment decisions.

Data-Intensive Innovation and the State: Understanding China's AI Leadership
Martin Beraja, David Y. Yang, and Noam Yuchtman (VoxChina) Sep 23, 2020
China has become a world leader in the development of artificial intelligence (AI), a data-intensive technology with the potential to transform the global economy. We argue that the Chinese state's collection of data and provision of data to commercial firms contribute to China's AI leadership. We provide supportive evidence from China's facial recognition AI sector and develop a macroeconomic model that illustrates how the Chinese state's surveillance interest aligns with promoting AI innovation, but potentially at the expense of privacy.

"Buy British": The viability of a nationalist commercial policy
David Clayton and David Higgins (VoxEU) Sep 23, 2020
After Brexit, the UK government will enjoy greater freedom to encourage domestic consumers to "Buy British". But as this column explains, attempts by successive UK governments in the 1970s and early 1980s to initiate such import substitution policies were fraught with economic and legal difficulties. Indeed, accelerating globalisation and the rapid growth of imports in intermediate products for assembly into 'British' goods raise significant problems in defining a 'national' product – and the growth of tradable services (such as insurance, education and healthcare) presents an even more intractable problem.

Armington elasticity and international trade models: Fifty years on
Josef Bajzík, Tomas Havranek, Zuzana Irsova, and Jiri Schwarz (VoxEU) Sep 23, 2020
A key parameter informing policy models in international economics is the elasticity of substitution between domestic and foreign goods, also known as the Armington elasticity. Yet elasticity estimates have varied widely since Armington's seminal 1969 contribution. This column considers 3,524 previous estimates and discusses how these historical analyses can be corrected for various biases. The previous research implies that the elasticity lies in the range 2.5-5.1 with a median of 3.8. In a simple model this translates to a trade cost elasticity of 2.8.

Eroding Eurozone Economic Confidence
Nick Bennenbroek and Jen Licis (WF Econ Group) Sep 23, 2020
Following a slump in the Eurozone economy in H1-2020, activity data and confidence surveys during the late spring and over the summer showed a relatively quick initial rebound. While policy fundamentals still appear supportive for growth, a renewed increase in COVID-19 cases and a softening in recent data have raised some concerns.

Avoiding post-Brexit chaos on the UK border
FT View Sep 24, 2020
Trust and communication is vital between government and business.

Pension funds cannot afford not to buy more stocks
Inigo Fraser-Jenkins (FT) Sep 24, 2020
The expected revival of inflation means equities need to be at the core of portfolios.

An African at the WTO's helm would fit its free trade instincts
David Pilling (FT) Sep 24, 2020
New director-general could also address colonial patterns that hold back the continent.

How the pandemic deepened the poverty pit
Simon Kuper (FT) Sep 24, 2020
'Once a family falls into extreme poverty, it may never rise again'.

Why the U.S. Risks Repeating 2009's Economic Stimulus Mistakes
Ben Casselman and Jeanna Smialek (NYT) Sep 24, 2020
In the wake of the last recession, government spending dried up, dragging out the recovery. Policymakers warn against letting that happen again.

Race to ruin as US Fed Reserve turns Japanese
William Pesek (AT) Sep 24, 2020
If you want to know why the US economy risks turning Japanese, look no further than the Federal Reserve's swelling balance sheet. The US central bank's efforts to rescue a Covid-19 ravaged economy have long since taken it into uncharted territory.

Securing China's Post-Pandemic Recovery: Deepening Reforms and Pursuing Rebalancing
Geoffrey Okamoto (IMF) Sep 24, 2020
If we continue to act decisively —and together—I'm confident our next meeting will be under better global circumstances—and maybe even in person!

Will European Union countries be able to absorb and spend well the bloc's recovery funding?
Zsolt Darvas (Bruegel) Sep 24, 2020
To help finance the post-coronavirus recovery, the European Union is raising large amounts to pass on to its members. But absorption of EU funds is typically slow and some countries might struggle to spend what they can get, even if they will have broad freedom to design spending programmes. The focus should be on worthwhile spending, not just on absorbing EU funds.

Manufacturing trade surpluses may not prevent declining manufacturing employment
Robert Z. Lawrence (PIIE) Sep 24, 2020
Advanced economies like the United States are pursuing policies that increase trade balances in manufactured goods to revive domestic manufacturing jobs. But, contrary to widespread beliefs, trade surpluses are not necessarily indicative of growing manufacturing employment, and even countries with large trade surpluses have experienced a decline in manufacturing employment in recent years.

Fewer Bankruptcies. More Startups. One Strange Recession.
Justin Fox (Bloomberg View) Sep 24, 2020
Timely aid from Washington and an unusual cause mean this downturn is different.

Trump's Threat to Democracy Threatens the Economy
Noah Smith (Bloomberg View) Sep 25, 2020
Ignoring the will of the people has never been good for growth.

The EU Merry-Go-Round
Ana Palacio (Project Syndicate) Sep 24, 2020
EU leaders have tended to operate on the assumption that Europe is inevitable, and that Europeans are inescapably bound together in a community of fate. But many citizens don't see it that way, and if they aren't given a more convincing rationale for European integration, the only inevitability will be the EU's demise.

Europe's Green Dirigisme
Hans-Werner Sinn (Project Syndicate) Sep 24, 2020
In pursuing its grand environmental ambitions, the European Commission has ignored a commonsense solution in favor of an approach based on central planning and pervasive state intervention in the economy. The further the Commission goes on this path, the more reason there will be to question its motives.

How Climate Targets Can Help Economic Recovery
Francisca Tondreau (Project Syndicate) Sep 24, 2020
Instead of delaying updates to nationally determined climate targets while the COVID-19 pandemic continues, governments should consider how these targets could be used to leverage the economic contribution of nature-based solutions. Chile offers an example of how that could work.

Sovereign risk after Covid-19
Wojtek Paczos and Kirill Shakhnov (VoxEU) Sep 24, 2020
The sharp reductions in economic output and large-scale government expenditures prompted by the Covid-19 pandemic have led to an enhanced risk of sovereign defaults, especially in emerging economies. This column argues that an output drop alone increases the risk of foreign default, while a sudden expenditure hike alone increases the risk of domestic default. Thus, given the double nature of the Covid shock, recent proposals that would ease the burden of foreign debt after COVID-19 in emerging economies are necessary but may not be sufficient to prevent a wave of defaults on domestic debt.

A tale of three depressions
Paul De Grauwe and Yuemei Ji (VoxEU) Sep 24, 2020
The coronavirus pandemic caused a catastrophic collapse in the world economy. This column analyses the path of this decline and compares it to two other major global crises: the Great Depression in the 1930s and the Great Recession following the banking crisis of 2007-2008. It argues that COVID-19 led to both negative demand and supply shocks, resulting in a contraction of industrial production at an unprecedented pace. However, a combination of strong government policies and a functioning banking sector have led to a swifter rebound in economic activity following the coronavirus shock in comparison with the previous two crises.

Cross-border venture capital, technology flows, and national security
Ufuk Akcigit, Sina T. Ates, Josh Lerner, Richard Townsend, and Yulia Zhestkova (VoxEU) Sep 24, 2020
The US military community has highlighted the potential security threat posed by foreign venture investments in Silicon Valley, particularly from Chinese stakeholders. This column presents a theoretical and empirical analysis of the relationship between venture capital and national security, focusing on the ability of overseas firms to gain a domestic technological advantage through investing in the US tech sector. The growing importance of this the technology sector, as well as the national security issues at stake, mean that understanding the correlations is a vital avenue of future research.

'We Have Nothing Here': A Collapsing Lebanon Sparks an Exodus of Despair
Rebecca Collard (FP) Sep 24, 2020
A country that previously took in refugees could become an exporter of people as government ineptitude and an economic cataclysm destroy all hope.

Will the Economy Crater if Unemployment Benefits Expire?
Jay H. Bryson and Azhar Iqbal (WF Econ Group) Sep 24, 2020
Model results suggest that GDP may contract modestly if enhanced unemployment benefits expire. Although the model results may overstate the negative consequences, there clearly are downside risks to the outlook.

Remember 1929 when looking for the cause of the coming financial crisis
John Dizard (FT) Sep 25, 2020
Alarm bells are ringing in the market for commercial mortgage-backed securities.

Scaremongering will damage the UK's fragile economy
Camilla Cavendish (FT) Sep 25, 2020
Ministers should think harder about the best way to slow the spread of Covid-19.

A Tale of Two Chinese Economies
WSJ Sep 25, 2020
Beijing is promoting export-led growth as the domestic recovery lags.

Mortgage Refinancing Boom Is Too Automated
Danielle DiMartino Booth (Bloomberg View) Sep 24, 2020
Computer-driven appraisals are an innovation that nobody needs right now.

The Curse of Falling Expectations
Nancy Birdsall (Project Syndicate) Sep 25, 2020
When a society goes from broadly shared growth to a state of malaise or decline, the ensuing pain is not just economic but psychological. Now that tens of millions of people in developing countries are suffering precisely such a reversal of fortune, the political fallout is sure to be tumultuous.

Europe's Recovery Gamble
Jean Pisani-Ferry (Project Syndicate) Sep 25, 2020
If the European Union's new recovery program succeeds, it may ultimately pave the way for the establishment of a fiscal union. But if the EU funds fail to deliver on the plan's stated goals, or if political interests prevail over economic necessity, federal aspirations will be dashed for a generation.

The Vise Tightens on the Dollar
Stephen S. Roach (Project Syndicate) Sep 25, 2020
In the second quarter of this year, the US experienced the sharpest plunge in domestic saving on record, dating back to 1947. Because that will continue, and the current-account balance is following suit, the dollar's real effective exchange rate can head in only one direction.

China's Inevitable Low-Carbon Future
Xizhou Zhou (Project Syndicate) Sep 25, 2020
China's leaders are increasingly recognizing that policies to reduce emissions align seamlessly with their goal of a "great rejuvenation of the Chinese nation," as articulated by President Xi Jinping in 2012, and again at the United Nations this year. In fact, achieving the so-called China dream may well make a low-carbon future the most likely scenario.

There is no trade-off between quality and efficiency in public procurement
Erica Bosio, Marko Grujicic, and Maksym Iavorskyi (VoxEU) Sep 25, 2020
A trade-off between quality and speed/cost in public procurement regulation is often seen as a challenge for legislators. This column analyses data from 187 economies and finds that this trade-off is not supported by the data. In fact, there is a positive correlation between quality and efficiency of public goods and services. The strong correlation suggests that certain features of governments produce good results across different services.

Evaluation of too-big-to-fail reforms
Claudia M. Buch (VoxEU) Sep 25, 2020
Structured policy evaluations are important for the accountability and transparency of policy responses to global crises. Such evaluations require good infrastructure, including access to data and information on policies. In 2017, the Financial Stability Board began a comprehensive evaluation of post-crisis financial-sector reforms. This column draws on this evaluation to examine the state of the global banking system at the onset of COVID-19 crisis and highlights important lessons to be learned from the policy response to the Global Crisis.

Measuring property rights institutions
Simeon Djankov, Edward Glaeser, and Andrei Shleifer (VoxEU) Sep 25, 2020
In a world of limited public capacity, which rules and institutions that protect property rights have the largest impact on economic activity? This column addresses this question using a cross-section of 190 countries and focusing specifically on the distinction between the right of possession and the right of transfer in the context of urban land. It also documents worldwide improvements in the quality of institutions facilitating property transfer over time.

A Recipe for Higher Inflation?
Sarah House and Michael Pugliese (WF Econ Group) Sep 25, 2020
After years of inflation falling short of forecasts, it may be no surprise that, following a downturn of historic proportions, few would see the COVID shock as anything but another reason for inflation to remain stubbornly low. But, while the size and speed of the downturn has been unprecedented, so has been the economic policy response. Could the current inflation environment be different enough to where we finally have a recipe for higher inflation?

Professional investors should not ignore the retail wave
Brooke Fox (FT) Sep 26, 2020
It is helpful to understand the market impact of day trading activity, analysts say.

Low rates and lofty stocks offer case for alternatives
Michael Mackenzie (FT) Sep 26, 2020
New ways of thinking are needed to invest in pandemic-hit markets.

Now is a time of bubble companies, not of market bubbles
Merryn Somerset Webb (FT) Sep 26, 2020
Since time immemorial cash shell listing booms have heralded fraud and collapse, but not today.

What Warren Buffett sees in Japan Inc
Economist Sep 26, 2020
The trading houses reflect a growing pro-shareholder culture.

Can China's economic miracle continue?
Economist Sep 26, 2020
In a new book, Thomas Orlik argues China is "the bubble that never pops".

The pandemic is plunging millions back into extreme poverty
Economist Sep 26, 2020
It could take years for them to escape again.

Late-movers outperform first-movers in export markets
Jamal Ibrahim Haidar (VoxEU) Sep 26, 2020
The relationship between first-movers and late-movers in export markets has important policy implications. First-movers need to be productive enough to pay market entry costs; in turn, they generate information externalities for late-movers. This column uses a unique disaggregated export-level customs dataset to test whether first-movers outperform late-movers in export markets. Using a variety of specifications and controlling for demand and supply shocks, it shows that, surprisingly, late-movers outperform first-movers. Furthermore, this effect is mainly driven by a differential in export quantities, not prices.

EU recovery fund should endure beyond the crisis
FT View Sep 27, 2020
There is a powerful argument for making the facility permanent.

Let's be clear on policy trade-offs over a second wave of Covid
Anjana Ahuja (FT) Sep 27, 2020
In a pandemic that could run for years, all the choices are unenviable.

US Fed needs to accept necessity of negative rates
David P. Goldman and Uwe Parpart (AT) Sep 27, 2020
Federal Reserve chairman Jerome Powell has told everyone from Princeton professor and former Fed vice chair Alan Blinder to Congressional committees to the public at large via press conferences that negative interest rates are not an "appropriate tool" for the United States.

Going green on bonds is best way to change behaviours
Xavier Baraton (FT) Sep 28, 2020
True investing happens when stocks and bonds are issued - when maximum leverage can be applied.

The new gold rush: western investors offset soft eastern demand
Henry Sanderson and Benjamin Parkin (FT) Sep 28, 2020
As ETFs helped push the price to record highs, Indian and Chinese consumers are selling the precious metal.

The volatility wake-up call for investors
Mohamed El-Erian (FT) Sep 28, 2020
Concerns over economy and Covid-19 have coincided with unsettling signals about Fed's stimulus support.

Even as Americans Grew Richer, Inequality Persisted
Jeanna Smialek (NYT) Sep 28, 2020
A Federal Reserve survey of family finances shows that inequality was high last year. It's likely to worsen because of the pandemic.

Dude, Where's My Inflation?
Kristoffer Mousten Hansen (Mises Wire) Sep 28, 2020
The Fed could certainly encourage more price inflation if it wanted to. But it seems the real goal is not steady inflation, but support for the financial sector.

Common eurobonds should become Europe's safe asset – but they don't need to be green
Alexander Lehmann (Bruegel) Sep 28, 2020
The plan to fund the European Union's recovery programme via debt issuance has raised hopes that a new type of euro-denominated safe asset could emerge. As a priority, the European Commission needs a strategy to create a liquid and transparent market in EU bonds. For now, funding through EU green bonds would complicate that effort.

How Trump's export curbs on semiconductors and equipment hurt the US technology sector
Chad P. Bown (PIIE) Sep 28, 2020
President Donald Trump's much-touted "phase one" trade agreement with China is falling well short of its goal. Under the deal, Trump pledged that China would purchase an additional $200 billion of US exports over 2020 and 2021. With two-thirds of 2020 now in the books, China has imported less than one-third of the goods that Trump assured Americans it would buy this year. One rare exception are high-tech products like American semiconductors and chipmaking equipment, which have managed to maintain robust export sales despite the pandemic and anti-China rhetoric of a US election campaign.

Emerging Market Bonds: Part of a Resilient Portfolio?
Pramol Dhawan and Ran Duan (PIMCO) Sep 28, 2020
A basket of emerging market bonds may offer the same appeal investors have long sought from U.S. Treasuries.

Central, Eastern, and Southeastern Europe After COVID-19: Securing the Recovery Through Wise Public Investment
Alfred Kammer, Laura Papi, and Petia Topalova (IMF) Sep 28, 2020
The COVID-19 pandemic is taking a sizable toll on the outlook for Central, Eastern, and Southeastern Europe. The region is expected to contract by close to 5½ percent in 2020, erasing almost three years of economic progress. To support the recovery and improve living standards, countries could consider spending more on infrastructure, such as roads, schools, hospitals, and digital connectivity.

Trump or Biden May Not Face Such a Terrible Economy in 2021
Conor Sen (Bloomberg View) Sep 28, 2020
Data suggest it will look a lot more like 2017 than like 2009.

The Redistribution Games
Yanis Varoufakis (Project Syndicate) Sep 28, 2020
Life is not the Olympics, where talent and training determine an athlete's performance. It's more like a Roman arena in which well-armed gladiators vanquish unarmed victims who lose not because they did not try hard enough, but because of the asymmetrical initial distribution of armor.

The Transatlantic Tragedy
Joschka Fischer (Project Syndicate) Sep 28, 2020
While today's mounting global disruptions have accelerated an ongoing shift in global power dynamics, neither China's rise nor the emergence of COVID-19 can be blamed for the West's lost primacy. The United States and the United Kingdom took care of that on their own, with a complacent Europe watching it happen.

Making Sense of China's New Plan
Andrew Sheng and Xiao Geng (Project Syndicate) Sep 28, 2020
From Made in China 2025 to the Belt and Road Initiative, the world has often misinterpreted pragmatic or strategic Chinese policies and projects as devious or destructive schemes. The same thing is happening today, in response to China's new Five-Year Plan.

How to Recover Green
Joseph E. Stiglitz (Project Syndicate) Sep 28, 2020
Now that governments have intervened in the market on an unprecedented scale, citizens have every right to demand that newly dependent sectors align themselves with long-term climate-policy goals. Policymakers already have the tools to make this happen, and doing so would accelerate economic recovery.

Nature Is Our Common Ground for a Green Recovery
Ana María Hernández Salgar (Project Syndicate) Sep 28, 2020
The COVID-19 pandemic offers a preview of what can happen when humanity ruthlessly exploits nature. In mapping out a policy trajectory for the next decade, decision-makers must put aside the obsession with economic growth for its own sake, and start to heed the scientific evidence.

Commercial Banks under Persistent Negative Rates
Remy Beauregard and Mark M. Spiegel (FRBSF Econ Letter) Sep 28, 2020
Do extended periods of negative policy interest rates continue to encourage commercial bank lending? A large panel of European and Japanese banks provides evidence on the impact of negative rates over different lengths of time. Analysis suggests that both bank profitability and bank lending activity erode more the longer such negative policy rates continue, primarily due to banks' reluctance to pass negative rates along to retail depositors. This appears to negate one of the main arguments for moving policy rates below the zero bound.

Steady Central Banks Across Europe
Nick Bennenbroek and Jen Licis (WF Econ Group) Sep 28, 2020
Last week multiple central banks across Europe announced their latest policy assessment including the Riksbank, Norges Bank and Swiss National Bank. We expect all to remain on hold at least through 2021 and still see an improving overall economic outlook for Sweden, Norway and Switzerland, despite some isolated pockets of weakness.

The City must not be forgotten in Brexit talks
FT View Sep 29, 2020
UK finance has a vital role to play in delivering 'levelling up' agenda.

The Wealth Gap Shrinks
Sep 29, 2020
The three years before the pandemic saw big gains for lower earners.

Trump's Steel Election Trap
WSJ Sep 29, 2020
A Commerce 232 trade probe threatens to raise electricity prices.

Is the US dollar shirking its "exorbitant duty"?
Olivier Jeanne and Jeongwon Son (PIIE) Sep 29, 2020
The US dollar strengthened in the COVID-19 crisis like it did in the last global financial crisis (figure 1). Now like then, this strengthening is generally explained by the fact that global safe assets are denominated in the safe haven currency of the US dollar. The demand for safe assets increases in a crisis, leading to an appreciation of the dollar, exactly when the US economy would need a depreciation. This phenomenon has been called the dollar's "exorbitant duty" that comes with serving as the global reserve currency, a counterpart to the "exorbitant privilege" that the United States enjoys in normal times from its ability to borrow abroad at a low interest rate.

Government-guaranteed bank lending six months on
Julia Anderson, Francesco Papadia and Nicolas Véron (Bruegel) Sep 29, 2020
In March and April 2020, European governments announced massive credit support programmes. After an initial surge, take-up appears to be stabilising (with a lag in Italy), despite second wave shocks in some countries. More recent data confirms that fiscal capacity has not visibly constrained national governments in the support they have provided so far.

Six Charts on Social Spending in the Middle East and Central Asia
Christoph Duenwald, Anastasia Guscina, and Koshy Mathai (IMF) Sep 29, 2020
Higher and more efficient social spending can significantly improve socioeconomic outcomes and help promote inclusive growth.

Brexit Calculus Is Changed Dramatically by Covid
Therese Raphael (Bloomberg View) Sep 29, 2020
If it weren't for Covid-19, the chances of an EU-U.K. trade deal would be slim to none. But will the British public accept any pain from Brexit right now?

India's Central Bank Is Stuck in a Halfway House
Daniel Moss (Bloomberg View) Sep 29, 2020
The RBI has the trappings of a modern institution, but remains beset by challenges to its independence.

Multilateralism Will Survive the Great Fracture
Ngaire Woods (Project Syndicate) Sep 29, 2020
Although China and the US are strategic rivals, each depends on global markets, finance, and innovation, and needs to co-opt other countries and regions in order to sustain its own power. For this reason, both will use multilateralism, formal and informal, to protect the system within which they have flourished and to solidify their alliances.

The Source Code of Efficient Public Policy
Urkhan Seyidov (Project Syndicate) Sep 29, 2020
National governments owe it to their citizens to embrace solutions that have been shown to increase the efficiency and sharpen the precision of decision-making. During a synchronous crisis like the COVID-19 pandemic – and with similar crises certain to follow in the coming years – citizens should demand no less.

Decoding China's "Dual Circulation" Strategy
Yu Yongding (Project Syndicate) Sep 29, 2020
Since May, when China's central leadership started referring to a "new development pattern," there has been much speculation about whether the country is embracing an entirely new economic model. In fact, the government is merely describing changes that have already happened.

Why Biden Is Better Than Trump for the Economy
Nouriel Roubini (Project Syndicate) Sep 29, 2020
The presumption that Republicans are better than Democrats at economic stewardship is a longstanding myth that must be debunked. For all Americans who care about their and their children's future, the right choice this November could not be clearer.

Distance makes international linkages more volatile
Arnaud Mehl, Martin Schmitz, and Cédric Tille (VoxEU) Sep 29, 2020
The geographical distance between two countries has a substantial impact on their economic relationship, affecting trade, foreign direct investment, and international banking linkages. Using data from the Great Recession and the COVID-19 pandemic, this column demonstrates that the financial linkages between countries located far from one another experience more volatility during crises than those between countries that are closer together. Policymakers concerned about their country's exposure to global cycles should focus not only on their primary trading partners, but also on trade flows with more distant partners.

Forecasting the COVID-19 recession and recovery
Claudia Foroni, Massimiliano Marcellino, and Dalibor Stevanovic (VoxEU) Sep 29, 2020
Forecasting the recession and recovery from the COVID-19 crisis is of substantial policy interest. The pandemic shock shares both similarities and differences with previous crises, such as the financial crisis of 2007-2009. This column evaluates the ability of different forecasting and nowcasting approaches to predict the COVID-19 economic shock and forecast the potential recovery path. It shows that adjusting for forecasting errors made during the financial crisis of 2007-2009 better aligns the COVID forecasts with observed data. The results suggest a slow recovery to pre-COVID-19 levels, lasting several years.

The U.S. Has a Large Negative NIIP. Should We Worry?
Jay H. Bryson and Shannon Seery (WF) Sep 29, 2020
With the United States on its way to running the largest federal budget deficit since the Second World War, there is growing concern about the deteriorating fiscal position of the U.S. government. But there is another measure in which the United States has been running red ink for years.

Cities are too resilient to be killed by Covid
Robin Harding (FT) Sep 30, 2020
The imagined idyll of rural teleworking is merely an economic chimera.

A three-pronged plan to secure Singapore's role in SE Asia
Jeevan Vasagar (FT) Sep 30, 2020
Coronavirus has highlighted both the island's strengths and weaknesses.

HSBC should concentrate on Asia
Manus Costello (FT) Sep 30, 2020
Bank needs to rethink its 'three stools' global strategy that also takes in Europe and the Americas.

Big business is no longer the planet's biggest problem
Andrew Edgecliffe-Johnson (FT) Sep 30, 2020
Multinationals will not achieve their sustainability agenda unless they convince smaller companies of the merits.

Covid: we're in the same storm but not the same boat
Gillian Tett (FT) Sep 30, 2020
Those with capital are doing well through the pandemic, while those without are suffering.

'Multi-strategy' hedge funds show way forward for industry
Robin Wigglesworth (FT) Sep 30, 2020
Investors nowadays crave predictability and consistent results more than fickle brilliance and the occasional home run.

Coronavirus-induced 'reshoring' is not happening
Alan Beattie (FT) Sep 30, 2020
Business is pushing back and goods have continued to flow despite the pandemic.

Leave No Country Behind in the Post-Covid Recovery
Robert B. Zoellick (WSJ) Sep 30, 2020
The pandemic may deepen global poverty and stifle trade and investment.

HSBC caught in the crossfire of Trump's trade war
William Pesek (AT) Sep 30, 2020
Of all the things HSBC Chief Executive Officer Noel Quinn thought 2020 might hold for his bank, becoming a key proxy in the US-China trade war probably wasn't among them.

Vietnam throws UK a post-Brexit lifeline
David Hutt (AT) Sep 30, 2020
UK Foreign Secretary Dominic Raab arrived in Vietnam this week to finalize a proposed trade deal, a priority for Britain as it exits the European Union (EU) and moves to notch new bilateral pacts in Asia.

Why, despite the coronavirus pandemic, house prices continue to rise
Economist Sep 30, 2020
Monetary policy, fiscal measures and buyers' preferences explain the unlikely boom.

Covid-19 Relief for Undocumented Would Boost the Economy for All
Lorena Gonzalez and Raul Hinojosa-Ojeda (Bloomberg View) Sep 30, 2020
Depriving workers of $1,200 checks caused a $10 billion loss in economic activity.

Whither Oil?
Helen Thompson (Project Syndicate) Sep 30, 2020
Oil remains the lifeblood of the global economy, and will not easily be phased out just because the industry is undergoing a crisis. Until policymakers and climate activists grapple seriously with the political economy of oil, the quest for net-zero emissions will be more aspirational than realistic.

Europe's Double Bind
Mark Leonard (Project Syndicate) Sep 30, 2020
The COVID-19 pandemic has exposed a gap between European aspirations and actions. If European leaders are serious about defending rules-based multilateralism and securing the European Union's interests in the twenty-first century, they will need to start coming to terms with today's geopolitical realities.

Minding the Digital Economy's Narrowing Gaps
Michael Spence (Project Syndicate) Sep 30, 2020
By collapsing physical distance, the digital economy has overcome one of the largest traditional hurdles to market formation and efficiency. But data-driven digital markets come with their own unique informational challenges, demanding further innovation not just by entrepreneurs but also by policymakers.

The COVID-Climate Nexus
Jeffrey Frankel (Project Syndicate) Oct 1, 2020
America's upcoming election will take place against the backdrop of a dreadful pandemic and mounting climate threats. On both counts, US voters must choose whether to bring back respect for science and sensible public policy, and an awareness that we live in an interconnected world.

Financing Micro-entrepreneurship in Online Crowdfunding Markets: Local Preference versus Information Frictions
Jian Ni and Yi Xin (VoxChina) Sep 30, 2020
Crowdfunding has become an important financing alternative for micro-entrepreneurship. We study to what extent bias toward local entrepreneurs is prevalent in crowdfunding markets, determine the main driving forces for such bias, and examine how crowdfunding platforms and policymakers can leverage these forces to stimulate micro-entrepreneurship. Even though online crowdfunding platforms are designed to overcome geographic barriers, we find evidence of strong local bias induced by both informational frictions and local preference, with the former being more important.

Average inflation targeting and household expectations
Olivier Coibion, Yuriy Gorodnichenko, Edward S. Knotek II, and Raphael Schoenle (VoxEU) Sep 30, 2020
On 27 August 2020, the Federal Reserve announced the adoption of a new strategy of 'average inflation targeting', which is to replace traditional inflation targeting. This column uses a daily survey of US households to study how this announcement affected inflation expectations. It finds a small uptick in the share of households reporting to have heard news about monetary policy on the day of the announcement, but hearing about the news did not appear to affect their expectations. Even providing households with information on average inflation targeting directly did not change expectations relative to households who received information on traditional inflation targeting.