China must resist cheap money temptation
George Magnus (FT) Oct 1, 2014
Lower borrowing costs are the last thing needed to rebalance economy.
Tech’s tax defence is washing away
John Gapper (FT) Oct 1, 2014
The OECD is making faster progress towards fixing the gaps in the system.
France clings on to its magical thinking
Sylvie Goulard (FT) Oct 1, 2014
The economic taboos remain – the best-off are being protected.
A feeble Brics challenge to the dollar
Benn Steil (FT) Oct 1, 2014
If the club is to improve on Bretton Woods it will have to do better than this.
Modi faces big hurdles to modernise India
Victor Mallet (FT) Oct 1, 2014
PM will need all his skill to achieve aims on jobs and industry.
Merkel should stop Draghi’s meddling
Hans-Werner Sinn (FT) Oct 1, 2014
The ECB is overstepping its mandate with anti-deflationary measures.
Shadow Banking is Boon, Bane for Financial System
IMF Survey Oct 1, 2014
Shadow banking is both a boon and a bane for countries, and to reap its benefits, policymakers should minimize the risks it poses to the overall financial system.
Bank Compensation, Governance Need Upgrade to Make Financial System Safer
IMF Survey Oct 1, 2014
Banks with more independent boards of directors that pay executives according to long-term performance tend to incur fewer risks, according to new research from the International Monetary Fund.
On the ropes: can Argentina recover?
Silvia Pavoni (The Banker) Oct 1, 2014
A controversial US ruling against Argentina has shaken the world of sovereign debt restructuring and provided so-called vulture funds with a sharp new litigation strategy. As both multilateral organisations and private sector professionals attempt to stop a lawsuit pandemic, The Banker takes a in-depth look at the key issues.
ECB Sovereign Bond Purchases Remain Unlikely
Jacob Funk Kirkegaard (PIIE) Oct 1, 2014
The European Central Bank (ECB) is reportedly on the cusp of another round of euro area sovereign bond purchases. Proponents of such a move say it is necessary if the ECB is to grow its balance sheet by the €750 billion to €1 trillion signaled by its president, Mario Draghi, on September 4. Yet it is probably a mistake to expect this action soon.
What's Wrong With Ignoring Inequality
Noah Smith (Bloomberg View) Oct 1, 2014
Economic inequality may not be the world's biggest problem, but it isn;';t something we should ignore.
The ECB’s Leap into the Unknown
Jürgen Stark (Project Syndicate) Oct 1, 2014
The ECB’s decision to double down on monetary stimulus should be regarded as an act of desperation. Indeed, despite the central bank's aggressive approach, monetary policy in the absence of structural economic reform risks being ineffective.
Asia’s Invention Boom
Edward Jung (Project Syndicate) Oct 1, 2014
China is poised to join the US as a leading global force for innovation, with other Asian countries following closely behind. As Asian innovation comes into its own, the US and other developed countries must find ways to participate – or risk missing the opportunity of the century in a vain bid to recapture bygone supremacy.
Debeaking the Vultures
Joseph E. Stiglitz and Martin Guzman (Project Syndicate) Oct 1, 2014
In the midst of the ongoing dispute between Argentina and the “vulture funds” that hold its bonds, a broad consensus has emerged concerning the need for sovereign-debt restructuring mechanisms. Otherwise, US court rulings in the vultures' favor will give free rein to those who would sabotage future restructurings.
Brazil’s Cautious Voters
Jorge G. Castañeda (Project Syndicate) Oct 1, 2014
Brazil's presidential election has come alive as the mixed-race Marina Silva mounts a serious challenge to President Dilma Rousseff. But, despite Brazil's economic troubles, corruption scandals, and recent World Cup humiliation, Rousseff's incumbency advantage is likely to be decisive.
Yascha Mounk (FA) Oct 1, 2014
The populist threat to liberal democracy.
A Good Deal Settles the Brazil Cotton Dispute
Gary Clyde Hufbauer (PIIE) Oct 2, 2014
A long-running dispute between the United States and Brazil over US cotton subsidies has at last been settled. In an announcement on October 1, the two sides disclosed that their deal has two key terms: The United States will pay Brazil $300 million immediately, for the benefit of Brazilian cotton farmers, and Brazil will drop its case against the United States at the World Trade Organization (WTO), launched in 2002 and won in 2004.
Russia debt freeze lesson for Hong Kong
Ralph Atkins (FT) Oct 2, 2014
Markets do react to political risk, despite apparent indifference.
The hidden cost of freezing Russia out
Gillian Tett (FT) Oct 2, 2014
Instead of having one major cross-border payments system there could eventually be many.
Only a weak euro can save the ECB now
Lorenzo Bini Smaghi (FT) Oct 2, 2014
Data point to a slowdown which now affects the core of the monetary union.
Pimco: ‘Bonds are meant to be boring’
Stephen Foley and Tom Braithwaite (FT) Oct 2, 2014
What Bill Gross’s exit means for the industry and the company he left behind.
Singing About Fighting Poverty, Slightly Off-Key
William Easterly (WSJ) Oct 2, 2014
Concerts to help the poor are fine, but too bad no one sounds a note about freedom. That's the path to prosperity.
China, trapped in transition
Fareed Zakaria (WP) Oct 2, 2014
What we are seeing in Hong Kong may be an expected, if long-delayed, crisis fueled by economic growth.
The U.S. lets trade undermine justice
Harold Meyerson (WP) Oct 2, 2014
How every major trade pact since Ronald Reagan has undermined labor and environmental protections.
The Lehman Brothers lesson
Robert J. Samuelson (WP) Oct 2, 2014
Letting crucial financial institutions fail can backfire on us all.
US, Brazil Clinch Deal Resolving Cotton Trade Row
Bridges, Volume 18, Number 32 Oct 2, 2014
Brazil and the US have reached an agreement to bring their long-running WTO dispute (DS267) over Washington's cotton subsidies to an end, officials confirmed on Wednesday.
Obama, Modi Highlight TFA Impasse Concerns, Call for "Urgent" WTO Consultations
Bridges, Volume 18, Number 32 Oct 2, 2014
US President Barack Obama and Indian Prime Minister Narendra Modi concluded their leaders' meeting in Washington on Tuesday, directing their officials to "consult urgently" with their fellow trading partners in the hopes of resolving the current WTO impasse on the implementation of the Trade Facilitation Agreement (TFA) and the issue of public food stockholding.
EU Commission Hearings: Malmström Pledges TTIP Political Assessment By Year's End
Bridges, Volume 18, Number 32 Oct 2, 2014
If confirmed later this month as the EU's next Trade Commissioner, Cecilia Malmström will make one of her first objectives a political review of the 28-nation bloc's ongoing trade talks with the US, the Swedish politician told a meeting of the European Parliament Committee on International Trade earlier this week.
Environmental Goods Trade Talks Move Forward
Bridges, Volume 18, Number 32 Oct 2, 2014
A second round of talks towards clinching a tariff-cutting agreement on select environmental goods was held last week in Geneva, Switzerland, with sources reporting significant progress on hammering out the substance of the deal, namely on what types of products to include.
Ukraine's Old, Internal Enemy
Anders Åslund (PIIE) Oct 2, 2014
External threats to Ukraine from Russia have dominated the news for months, but as that situation starts to stabilize the country will need to confront an old, internal enemy: corruption. Transparency International ranks Ukraine 144 out of 177 countries on its corruption-perception index.
China’s Visionary Stimulus
Zhang Jun (Project Syndicate) Oct 2, 2014
China's CN¥4 trillion post-crisis stimulus has been widely criticized for leading to excessive monetary growth. But the policy also helped to expand China’s foreign trade and boost its external financial strength, thereby creating space for the current government to pursue its ambitious reform agenda.
The Lost Donkeys of Science
Abraham Loeb (Project Syndicate) Oct 2, 2014
History is full of unexpected discoveries that changed the world. Despite the obvious risks, science funders should therefore allow researchers the flexibility to pursue new, exciting insights rather than just play it safe and stick to rigid research goals.
Gloomy Outlook for Ghana Where Gold Does Not Shine Anymore
Vikram Mansharamani (YaleGlobal) Oct 2, 2014
A country’s fortunes can rise and fall quickly. Ghana was hailed just two years ago as the world’s fastest growing economy, but now struggles with currency devaluation, poor infrastructure and an entrenched bureaucracy.
New Momentum Can Help Global Economy Beat Mediocre Growth
IMF Survey Oct 2, 2014
Bolder policies can inject a new momentum into the world economy to help it overcome what has been a disappointing recovery, IMF chief Christine Lagarde says. Ahead of the IMF-World Bank Annual Meetings, Lagarde adds that the recovery is brittle, uneven, and beset by risks.
Warning Flags in the Stock Market
A. Gary Shilling (Bloomberg View) Oct 2, 2014
The stock market rally has pushed shares up to record highs since their March 2009 low. Numerous warning flags are telling us this won't last.
Europe's Wrangling Compounds Cameron Brexit Woes
Mark Gilbert (Bloomberg View) Oct 2, 2014
A brouhaha over Britain's European Commission nominee illustrates the difficulties David Cameron faces in renegotiating membership terms of a club it has treated much like Groucho Marx might.
Making Argentina's Debt Debacle a Rarity
Ashoka Mody (Bloomberg View) Oct 2, 2014
If sovereign bonds acted more like stocks, everyone would be better off.
The Vultures of Wall Street
Saskia Sassen and Lisa Lucile Owens (Boston Review) Oct 2, 2014
Hedge funds wrest billions of dollars from governments in debt.
Our Misplaced Faith in Free Trade
Jeff Madrick (NYT) Oct 3, 2014
A number of countries have gotten rich since the 1970s, but not by following orthodox economic advice.
A Shaky Recovery Runs Out of Steam
Eswar Prasad, Karim Foda and Arnav Sahu (Brookings) Oct 3, 2014
New updates to a Brookings-Financial Times index for tracking the global economic recovery paints a grim picture.
China’s Inscrutable Contraction
Kenneth Rogoff (Project Syndicate) Oct 3, 2014
As China shifts to a more domestic-demand driven, services-oriented economy, a transition to slower trend growth is both inevitable and desirable. But the challenges are immense, and no one should take a soft landing for granted.
The New Philosophers
Harold James (Project Syndicate) Oct 3, 2014
At a recent meeting of G-20 finance ministers, US Treasury Secretary Jack Lew discussed “philosophical differences with some of our friends in Europe” before urging Europeans to do more to boost growth. His reference to philosophy gets to the heart of why Europe is finding it so difficult to escape from its current malaise.
Any developing country can undergo dynamic structural transformation, starting now
Justin Yifu Lin (OECD Insights) Oct 3, 2014
Any developing country – even those with poor infrastructure and a weak business environment – can start on a path to dynamic structural transformation and growth today. How? By facilitating technological innovation and development in industries where it has a comparative advantage.
The disappearance of routine jobs
Matias Cortes, Nir Jaimovich, Christopher J. Nekarda and Henry Siu (VoxEU) Oct 2, 2014
As routine tasks are increasingly automated, middle-wage jobs are becoming rarer. This column documents the changes in labour-market dynamics behind this polarisation, and investigates which workers are affected by it. Flows into middle-wage routine jobs are declining (rather than flows out increasing). Interestingly, routine cognitive workers – who tend to be educated women – are benefiting from this hollowing-out by moving up the occupational ladder.
Where danger lurks
Olivier Blanchard (VoxEU) Oct 3, 2014
Before the 2008 crisis, the mainstream worldview among US macroeconomists was that economic fluctuations were regular and essentially self-correcting. In this column, IMF chief economist Olivier Blanchard explains how this benign view of fluctuations took hold in the profession, and what lessons have been learned since the crisis. He argues that macroeconomic policy should aim to keep the economy away from ‘dark corners’, where it can malfunction badly.
Have markets misunderstood Markets the German Court’s decision on OMT?
Helmut Siekmann and Volker Wieland (VoxEU) Oct 3, 2014
In February 2014, the German Federal Constitutional Court declared the Outright Monetary Transactions (OMT) programme to be inconsistent with EU law. However, this did not have a negative impact on the OMT and sovereign risk premia continued to decline. This column argues that the benign response of financial markets may be due to an expectation of a likely compromise between the European and German Courts.
The world economy: Wealth without workers, workers without wealth
Economist Oct 4, 2014
The digital revolution is bringing sweeping change to labour markets in both rich and poor worlds.
Biocultural origins of human capital and growth
Oded Galor and Marc Klemp (VoxEU) Oct 4, 2014
The substitution from child quantity to quality has been credited for mankind’s escape from the Malthusian trap and the advent of sustained economic growth. This column argues that biocultural preferences for quality faced positive selection pressure in the pre-growth era, presenting evidence from the founding population of Quebec. Individuals with moderate levels of fecundity had fewer children than those with high fecundity, but produced more descendants in the long run because their children enjoyed higher reproductive success.
Economists Are Blind to the Limits of Growth
Mark Buchanan (Bloomberg View) Oct 5, 2014
Economists ignore a crucial constraint on human prosperity: energy.
The new Washington consensus - time to fight rising inequality
Larry Elliot (Guardian) Oct 5, 2014
The year 2014 is when the fight against inequality went mainstream but talk is one thing, action another
Europe’s recovery is in danger of being a dream
Wolfgang Munchau (FT) Oct 5, 2014
A euro devaluation would have to be extreme to have a big impact on, say, Italian exporters.
Trade rules must urgently play catch-up
Shawn Donnan (FT) Oct 5, 2014
WTO battles are fought using texts last updated in 1994.
Monetary policy: An unconventional tool
Martin Wolf (FT) Oct 5, 2014
The Fed’s quantitative easing raises questions about whether it has worked and its legacy.
Making the world better
Lina Nilsson and Shankar Sastry (WP) Oct 5, 2014
Development engineers improve the lot of the poorest people.
New era of muddle-nomics
Robert J. Samuelson (WP) Oct 5, 2014
After the Great Recession, we don’t know what to do next.
Review Helps IMF Keep Finger on Pulse of Post-Crisis World
IMF Survey Oct 5, 2014
Trade deals: Toxic talks
Shawn Donnan (FT) Oct 6, 2014
Critics claim that international arbitration has morphed into a weapon that multinationals wield to threaten and influence.
Public investment really is a free lunch
Lawrence Summers (FT) Oct 6, 2014
The IMF finds that a dollar of spending increases output by nearly $3.
A new broom sweeps in India’s clean-up
Amy Kazmin (FT) Oct 6, 2014
Modi faces a tough task in inspiring people to rid the nation of waste.
The Fourth Major Era of Computing Kicks In
Andy Kessler (WSJ) Oct 6, 2014
With mobile users now outnumbering desktop users, a new economic cycle has begun.
Here Comes the Internet of Money
Bloomberg View Oct 6, 2014
Financial innovation has widened access to capital, improved its allocation across the economy and made the world more prosperous.
IMF Supports Reforms for More Orderly Sovereign Debt Restructurings
IMF Survey Oct 6, 2014
The IMF’s Executive Board supports reforms to international sovereign bond contracts designed to address collective action problems in sovereign debt restructurings.
China’s Financial Floodgates
José Antonio Ocampo and Kevin P. Gallagher (Project Syndicate) Oct 6, 2014
As China’s economy starts to slow, following decades of spectacular growth, the government will increasingly be exposed to the siren song of capital-account liberalization. It should not allow itself to be tempted from its tried and tested course by calls for a policy that has led too many emerging economies onto the rocks.
How Low Can Gold Go?
Barry Ritholtz (Bloomberg View) Oct 6, 2014
Gold has declined to its lowest price in more than four year, yet that doesn't seem to have sunk in with many of its devotees.
America’s Overrated Decline
Joseph S. Nye (Project Syndicate) Oct 6, 2014
With the approach of the US Congressional elections, questions about the health of America’s political institutions and the future of its global leadership have become rampant, with some citing partisan gridlock as evidence of America’s decline. But is America's situation really that bad?
The Creditworthy Poor?
Marcelo M. Giugale (Project Syndicate) Oct 6, 2014
Low-income countries are borrowing again – and at low rates – as investors scour global markets for decent yields. But low-income countries' access to private lenders comes with risks that should be highlighted at the outset, before they grow into imminent threats.
Bond markets help lower inflation
Andrew K Rose (VoxEU) Oct 6, 2014
Governments benefit from inflation since the real value of public debt falls but inflation is a tax on money holders. Bond holders are aware of this fact and act accordingly. This column explores empirically the role of bond markets in keeping inflation low. The existence of long, nominal, local-currency bonds lowers inflation by three to four percentage points. The results hold for inflation-targeting countries, and other monetary regimes do not have the same effects.
Has China’s Economy Become More “Standard”?
John G. Fernald, Eric Hsu, and Mark M. Spiegel (FRBSF Economic Letter) Oct 6, 2014
Financial liberalization in China has broad implications, including changing how its central bank’s monetary policy affects the nation’s economy. An estimate of Chinese economic activity and inflation based on a broad set of indicators suggests that the way policy is transmitted to China’s economy has become more like Western market economies in the past decade. Although Chinese monetary policy may actually have exacerbated its economic downturn during the global financial crisis, a move toward stimulatory policy has helped ease its slower growth more recently.
China swoops in on Italy’s power grids and luxury brands
Rachel Sanderson (FT) Oct 7, 2014
EU debt crisis opened up periphery countries to Chinese investors.
Chinese translate the European work ethic
Robin Kwong and Rachel Sanderson (FT) Oct 7, 2014
Next-generation migrants are more educated, higher skilled.
Trapped in a cycle of credit booms
Martin Wolf (FT) Oct 7, 2014
The eurozone seems to be waiting for the Godot of global demand to float it off into debt sustainability.
Falling oil no fillip for shares any more
James Mackintosh (FT) Oct 7, 2014
Lower price may have failed to lift shares, but we should wonder why they’ve not fallen by more.
High risk bonds have further to fall
Alberto Gallo (FT) Oct 7, 2014
End of Fed QE, low liquidity and crowded trades spell danger.
The Politics of “Free” Trade Agreements
Carmen Dorobat (Mises Daily) Oct 7, 2014
Amidst news of the prolonged worldwide recession, new air strikes, secession attempts, and climate change, international trade — which in 2008 went through its largest crisis in history — has been mostly out of the public eye. Yet we’ve been told not to fear: the World Trade Organization, the foremost global body for promoting multilateral trade, remains watchful, and is optimistic that efforts for liberalization will bear fruit in the near future.
Global Growth Disappoints, Pace of Recovery Uneven and Country-Specific
IMF Survey Oct 7, 2014
An uneven and weak global recovery continues, with the pace of recovery reflecting various country-specific conditions.
How to Energize This Feeble Recovery
Bloomberg View Oct 7, 2014
Why haven't the extraordinary stimulus efforts of some of the world's largest central banks been enough to produce a healthy global recovery?
The BRICs Will Rise Again
Mohamed A. El-Erian (Bloomberg View) Oct 7, 2014
Yes, emerging markets have stumbled, but that doesn't mean those countries are regressing to the crisis-prone world of old.
Make Your Own Silicon Valley
Ross Buchanan (Project Syndicate) Oct 7, 2014
California may be the world’s largest and best-known technology hub, but innovative startups are emerging almost unnoticed everywhere from Hong Kong to Finland. Clearly, the key features of Silicon Valley that foster innovation and entrepreneurship can be replicated in and adapted to a wide variety of contexts.
The ECB’s Faulty Weapon
Daniel Gros (Project Syndicate) Oct 7, 2014
With inflation in the eurozone stubbornly remaining on a downward trajectory, pressure on the European Central Bank to do “something” to prevent outright deflation is growing. But, given the financial structure of eurozone countries, would the preferred "something" – quantitative easing – actually do the trick?
Is growth in east Africa for real?
Nikoloz Gigineishvili, Paolo Mauro and Ke Wang (VoxEU) Oct 7, 2014
Sustained rapid growth in many African economies has generated a debate on the sources and likely persistence of a so-called “African growth miracle”. This column looks at the factors underlying growth in an especially vibrant part of the continent – the East African Community. It suggests that rapid growth has been for real and reasonably well diversified.
Europe needs shift on public investment
Mario Monti (FT) Oct 8, 2014
More flexibility for countries is required to promote growth.
Stick with consensus and sell Treasuries
Mark Haefele (FT) Oct 8, 2014
Prepare for yields to rise by more than futures suggest.
What the Dollar’s Rise Tells Us About the Global Economy
Neil Irwin (NYT) Oct 8, 2014
The U.S. may have more to gain from progress in Europe and Japan than from advantageous exchange rates for American companies.
We’re making progress
Robert J. Samuelson (WP) Oct 8, 2014
Viewed over two centuries, economic growth has produced huge gains in incomes and living standards.
The Billionaire Guide to World Growth
Ruchir Sharma (WSJ) Oct 8, 2014
Rankings of the wealthy are fun to read, but how the rich prospered can tell us much about a country’s health.
Iron ore revolution to benefit China
John Helmer (AT) Oct 8, 2014
The Ukrainian civil war, and its aftermath, economic warfare between the US, the European Union, and Russia, are transforming global flows of the minerals from which steel is made. Starting with iron ore, the future for steelmaking will start at the minehead, not in Australia, nor Brazil, but in West Africa - and to China's benefit.
World Economy Needs Smart Fiscal Policies
IMF Survey Oct 8, 2014
At a time when job creation sits atop the policy agenda globally, fiscal policies can help support job creation—although designing the right policies will depend on conditions in individual countries, says the IMF’s latest Fiscal Monitor.
Can Anything Go Wrong for the Markets?
Vineer Bhansali (PIMCO) Oct 8, 2014
Risk management in proper portfolio construction consists of a combination of dynamic risk balancing, diversified beta sources, explicit options-based tail hedging and a minimum amount of liquidity. Faced with a long and expanding list of things that could go wrong, uncertainties about the likelihood of each shock and the lack of dependable precursory indicators, it seems that a structurally sound portfolio construction methodology that uses all these tools is essential. Given how inexpensive tail hedging today is in the context of long term-history, it seems that the risk-reward tradeoff also favors hedging.
Globalist Oct 8, 2014
Poland has come a long way since the fall of the Soviet Union.
The Problem With Steve Forbes’s New Gold Standard
David Gordon (Mises Daily) Oct 8, 2014
Review of "Money: How the Destruction of the Dollar Threatens the Global Economy."
Policymakers Should Encourage Economic Risk Taking, Keep Financial Excess Under Control
IMF Survey Oct 8, 2014
Policymakers are facing a new global imbalance: not enough economic risk-taking in support of growth, but growing excesses in financial risk-taking, which pose challenges to financial stability.
Inflationistas Are Guilty of Derp
Noah Smith (Bloomberg View) Oct 8, 2014
People who believed that the Federal Reserve's post-crash policies would set off inflation were wrong then and their wrong now.
How the IMF Can Save the Global Economy
Mohamed A. El-Erian (Bloomberg View) Oct 8, 2014
These five themes will help the world's economic policy elite in its fight against "the new mediocre."
Will China Spark a Currency War?
William Pesek (Bloomberg View) Oct 8, 2014
China hasn't talked about devaluing its currency, but economic realities may be pushing Beijing in that direction.
China’s Balancing Act
Adair Turner (Project Syndicate) Oct 8, 2014
China is now struggling with a dilemma common to all advanced credit booms: the longer the boom runs, the greater the danger of wasted investment, huge bad debts, and a major financial crisis. And, though China enjoys more room for maneuver than other countries facing similar credit booms, the risks remain serious.
Design Within Reach
Nayef Al-Rodhan (FA) Oct 8, 2014
Preparing for the 4-D printing revolution.
China’s migrants thrive in Spain’s crisis
Tobias Buck (FT) Oct 9, 2014
Entrepreneurs rely on family support to scale the economic ladder.
America’s economy is cooking on shale
Gillian Tett (FT) Oct 9, 2014
As businesses enjoy lower energy costs, a new spirit of collaboration is taking hold.
Sanctions enable us to hurt each another
Risto Penttila (FT) Oct 9, 2014
Great powers are practised at unexpected changes in policy.
New tools needed to tame capital flows
Paul Tucker (FT) Oct 9, 2014
Ways must be found to prevent trouble spreading from one country to others.
‘Euroglut’ of gloom as Germany weakens
Ralph Atkins (FT) Oct 9, 2014
Concern that eurozone could become a destabilising global force.
China trumps the competition in Africa Inc
Javier Blas (FT) Oct 9, 2014
Commercial influence in the continent is growing despite overtures from the US, Europe and Japan.
A Global Economic Malaise
NYT Oct 9, 2014
Too many finance ministers and central bankers are unwilling or ill prepared to respond to a world economy on the verge of a recession.
How to Rob a Bank in Bangladesh
Tahmima Anam (NYT) Oct 9, 2014
The hard way is to drill through the wall. Most choose the easy way: take a big loan and default on it.
The Global Warming Statistical Meltdown
Judith Curry (WSJ) Oct 9, 2014
Mounting evidence suggests that basic assumptions about climate change are mistaken: The numbers don’t add up.
TPP Ministerial Set for Australia, Robb Suggests "Basic Elements" of Deal by Year-End
Bridges, Volume 18, Number 33 Oct 9, 2014
Members of the 12-country Trans-Pacific Partnership (TPP) talks appear to be ramping up their negotiating efforts in the hopes of reaching the main elements of an agreement by the end of this year, with Australia confirming last week that it would be hosting a ministerial-level meeting in Sydney later this month.
Argentina Import Restrictions Case to Undergo WTO Appeal
Bridges, Volume 18, Number 33 Oct 9, 2014
The WTO Appellate Body is set to hear appeals on the dispute over Buenos Aires' controversial import restrictions, with the EU, Japan, and Argentina all filing notices of appeal with the global trade arbiter over the past fortnight.
New IMF Forecasts Indicate Weaker Global Growth Ahead of Washington Meetings
Bridges, Volume 18, Number 33 Oct 9, 2014
After a year fraught with uneven growth and social and political turmoil across the Middle East, West Africa, East Asia, and Eastern Europe, new data released by the International Monetary Fund (IMF) and other organisations this week are indicating that the global economy could potentially pay the price.
In my view: Development depends on realising the potential of taxation
Ngozi Okonjo-Iweala (OECD Insights)( Oct 9, 2014
Developing country governments would do well to strengthen their tax systems so they can mobilise the domestic resources they need to finance their own development. This is particularly true for African countries, where the recent trend of decreasing ODA shows no sign of reversing.
Is China's Bubble the Next Financial Crisis?
Mark Whitehouse (Bloomberg View) Oct 9, 2014
China's credit boom is running into diminishing returns.
The Evolution of Devolution
Barry Eichengreen (Project Syndicate) Oct 9, 2014
Devolution is coming to the United Kingdom and other countries, and its appeal is undeniable. But it is important to know where devolution ends and dysfunction begins.
James Meek (LRB) Oct 9, 2014
Farage says he wants a Switzerland-style trade relationship with the EU, and an Australian-style immigration system with the world: fewer Polish builders, more Indian scientists. But this isn’t the message Ukip is putting out on the street, where EU membership isn’t an issue. Immigration is. All immigration. Foreignness. Otherness
Getting Real About China
Wesley K. Clark (NYT) Oct 10, 2014
“Constructive engagement” is failing. What’s needed is a strong America that can defend the international order.
How Saving Grows the Economy
Dan Sanchez (Mises Daily) Oct 10, 2014
Back in the 1980s, Irwin Schiff, anti-tax activist, political prisoner, and father of free-market pundit Peter Schiff, wrote a marvelous comic book titled How an Economy Grows and Why It Doesn’t, which teaches economic principles through a light-hearted story.
Why Is the Fed Thinking Globally?
Mohamed A. El-Erian (Bloomberg View) Oct 10, 2014
The Fed usually acts as if the U.S. is a closed economy. Suddenly it is fretting about global issues and the dollar.
India's Most Laughable Laws
Dhiraj Nayyar (Bloomberg View) Oct 10, 2014
India's Narendra Modi says he wants to scrap antiquated laws. He should worry less about a ban on balloons, though, than inefficient taxes and extortionate regulations.
Practical Policy Prescriptions to Help Offset Geopolitical Uncertainties
Scott A. Mather & Greg E. Sharenow (PIMCO) Oct 10, 2014
We believe Europe should relax fiscal budget constraints to allow for fiscal stimulus to offset any economic drag, while maintaining extremely accommodative monetary policy. The U.S. and its relatively newfound energy renaissance can also play an important role in supporting Europe and the global economy by signaling its intention to compete for energy market share. In addition, long-term planning should begin today to reduce Europe's energy dependency on Russia, and the U.S. should revisit current export policy to send a powerful signal to the markets and allies over the security of future supplies.
TTIP: Transatlantic Blues?
Kathryn Hauser (Globalist) Oct 10, 2014
The TTIP negotiators have lost their way. Time for a reset.
China's Economy Slides–and Capital Flees
Gordon G. Chang (World Affairs) Oct 10, 2014
The Chinese now believe that high growth is normal, and they will probably not react well to a long downturn, especially given the political tensions already simmering in the one-party state.
Regulating the global insurance industry: Motivations and challenges
Christian Thimann (VoxEU) Oct 10, 2014
Regulation of the global insurance industry, an emerging challenge in international finance, has two central objectives: strengthening the oversight of insurance companies designated ‘systemically important’; and designing a global capital standard for internationally active insurers. This column argues that it is a Herculean task because the business model of insurance is less globalised than other areas in finance; because global regulators have less experience of insurance than banking where global standards have been pursued for a quarter of a century; and because, as yet, there is limited research-based understanding of the insurance business and its interactions with the financial system and the real economy. But in the aftermath of the global financial crisis and the AIG disaster, regulators are under strong pressure to make progress.
Buybacks: Money well spent?
Michael Mackenzie, Tom Braithwaite and Nicole Bullock (FT) Oct 12, 2014
Critics say that the boom has diverted corporate cash from creating jobs and investment.
Low rates jam the economy’s vital signals
James Grant (FT) Oct 12, 2014
Actions are no less subversive even if taken under the banner of the law.
Germany’s weak point is export strength
Wolfgang Münchau (FT) Oct 12, 2014
Wherever stimulus comes from, it will not be from Europe’s powerhouse.
China’s policy follows a random path
Joe Zhan (FT) Oct 12, 2014
The Chinese are firmly attached to the status quo, whatever that happens to be.
Glencore’s ambitions have global impact
Jonathan Ford (FT) Oct 12, 2014
A tie-up with Rio Tinto could make them too dominant.
Europe’s economic taboos cannot endure
Reza Moghadam (FT) Oct 12, 2014
Skip the stages of grief and accept a comprehensive solution.
‘Normal’ interest rates are distant dream
Russ Koesterich (FT) Oct 12, 2014
Short-term rates will rise but a return to historic levels is a long way off.
Will Boom Lead to Bust in Silicon Valley?
NYT Oct 12, 2014
There are signs that the technology industry has entered another period of irrational exuberance.
Why the world economy sputters
Robert J. Samuelson (WP) Oct 12, 2014
There are three pervasive problems that foster pessimism.
Yuan Bonds and Other U.K. Innovations
Mark Gilbert (Bloomberg View) Oct 12, 2014
The U.K. plans to borrow yuan to cement London's position as Europe's financial center, in an echo of its tactics a quarter of a century ago when the Euro first posed a threat.
The great mortgaging
Òscar Jordà, Alan Taylor, Moritz Schularick (VoxEU) Oct 12, 2014
The Global Crisis prompted Lord Adair Turner to ask if the growth of the financial sector has been socially useful, catalysing an ongoing debate. This column turns to economic history to investigate whether the financial sector is too big. New long-run, disaggregated data on banks’ balance sheets show that mortgage lending by banks has been the driving force behind the financialisation of advanced economies. Real estate lending booms are chiefly responsible for financial crises and weak recoveries.
Indonesia: Now for the hard part
Ben Bland (FT) Oct 13, 2014
External economic pressures are building at a time when the new president has little room for manoeuvre
Populism distracts globalisation’s losers
Rajan Ganesh (FT) Oct 13, 2014
Who is worse: the elitist who shrugs at people left behind or the huckster who offers false hope?
Bond markets suggest we are all Japanese
Peter Tasker (FT) Oct 13, 2014
Low yields have an easy explanation: declining growth and low inflation.
Bernanke’s failed mortgage application exposes the flaw in banking
Amir Sufi (FT) Oct 13, 2014
We must stop providing bailouts based on unrealistic models.
Looking past the (West’s) end of the nose
Jim O‘Neill and Alessio Terzi (Bruegel) Oct 13, 2014
World GDP is in a soft patch, but global growth trend is on the rise.
The growing pains of investment treaties
Angel Gurría (OECD Insight) Oct 13, 2014
International investment treaties are in the spotlight.
Germany Sabotages Europe
Mark Gilbert (Bloomberg View) Oct 13, 2014
It's time the Bundesbank stopped grousing and started backing Mario Draghi's efforts to resuscitate the euro zone economy.
The Centennial Crisis Cycle and the Middle East
Meghnad Desai (Globalist) Oct 13, 2014
How the West is implicated in the current fires burning the Middle East
A Recovery Driven by Manufacturing? It's Not Happening, George
David G. Blanchflower (Independent/PIIE) Oct 13, 2014
I was in the United States at a conference last week with the chief economist at Citibank and the former MPC external member Willem Buiter, who has long been my hero: In March 1999 he became the only person who ever voted for a cut not divisible by 25-the records show he voted to cut by 40 basis points!
Venezuela’s Spectacular Underperformance
Carmen Reinhart and Kenneth Rogoff (Project Syndicate) Oct 13, 2014
Venezuela is a major oil-exporting economy that is so badly mismanaged that real (inflation-adjusted) per capita GDP today is 2% lower than it was in 1970, despite a ten-fold increase in oil prices. And now its president is lashing out at academics who have the temerity to point that out.
Are Services the New Manufactures?
Dani Rodrik (Project Syndicate) Oct 13, 2014
Ever since the Industrial Revolution, manufacturing has been the key to rapid economic growth. Though optimists believe that service industries can play the role of "growth escalator" that manufacturing did in the past, two key differences between the sectors suggest otherwise.
The Procurement Goldmine
Ricardo Hausmann (Project Syndicate) Oct 13, 2014
Government procurement is like mining for gold: there are serious risks and potentially massive payoffs. With the right approach, governments can benefit from the latter, without falling victim to the former.
The Age of Vulnerability
Joseph E. Stiglitz (Project Syndicate) Oct 13, 2014
While many countries succeeded in moving people out of poverty, the welfare of a growing number is precarious. An economic system that fails to deliver gains for most of its citizens, and in which a rising share of the population faces increasing insecurity, is, in a fundamental sense, a failed economic system.
Stock-Market Optimists Face a Big Challenge
Mohamed A. El-Erian (Bloomberg View) Oct 13, 2014
It's getting harder for central bankers to levitate markets.
Finland Downgrade Should Wake Up All Europe
Leonid Bershidsky (Bloomberg View) Oct 13, 2014
Finland's downgrade by S&P tells European governments that they ought to improve their economies' competitiveness.
The New Washington Consensus? Deutschland Über Alles
Stephan Richter (Globalist) Oct 14, 2014
The art of casting Germany both as chief villain and magic wand of the global economy.
World can do better than ‘new mediocre’
Martin Wolf (FT) Oct 14, 2014
We must launch well-crafted reforms in both emerging and high-income economies.
Sensible for Fed to speak out on dollar
Robin Harding (FT) Oct 14, 2014
Central bank’s words serve as counterweight to currency’s rise.
Big bond fund outflows are risk for banks
John Plender (FT) Oct 14, 2014
Changes in market structure raise chance of extreme volatility.
Infrastructure bars India’s growth path
Henny Sender (FT) Oct 14, 2014
Investment climate remains inhospitable and cost of capital too high.
A Pump War?
Thomas L. Friedman (NYT) Oct 14, 2014
The decline in oil prices is no accident. What’s really playing out here?
China Slowdown? Don't Worry About It
Noah Smith (Bloomberg View) Oct 14, 2014
A slowdown in the Chinese economy wouldn't be good news for the U.S. economy, but it wouldn't do much harm either.
They Talked. They Left. Now What?
Mohamed A. El-Erian (Bloomberg View) Oct 14, 2014
Global economic leaders know what they have to do to save a weak recovery. Why aren't they doing it?
Private Companies Are Driving China's Growth
Peter R. Orszag (Bloomberg View) Oct 14, 2014
The prevailing image of state capitalism in China is dated and wrong. As a new book demonstrates, private companies are now the country's main engine of economic growth.
Eurozone Budgets Under the Spotlight
John Bruton (Project Syndicate) Oct 14, 2014
Eurozone governments have enjoyed an extended period of low interest rates. But, as indebted governments submit their budgets to the European Commission for review, they should consider the fiscal impact of a sudden reversal in bond-market sentiment, which is neither entirely rational nor sympathetic to political rhetoric.
China’s Silk Road Revival
Shashi Tharoor (Project Syndicate) Oct 14, 2014
The phrase “Silk Road” evokes a romantic image – half history, half myth – of tented camel caravans winding their way across the trackless deserts and mountains of Central Asia. But the Silk Road is not just part of a fabled past; it is an important feature of China’s current foreign policy.
Dirty Development Money
Bjørn Lomborg (Project Syndicate) Oct 14, 2014
One of the biggest problems affecting the world’s poor is one that few have ever heard about: illicit financial flows. With the world preparing to establish the specific targets that will guide global development efforts for the next 15 years, the time to change that is now.
If Draghi Buys Bonds, He Is Really Buying Time
Andrew Bosomworth (PIMCO/Financial News) Oct 14, 2014
It was John Maynard Keynes who invented the phrase “liquidity trap” to describe how central bank policies designed to resuscitate an economy could fail when interest rates get close to zero. Even though he was writing 70 years ago, he could have been describing the situation in the eurozone today.
TPP, China and the Future of Global Trade Order
Shuaihua Cheng (YaleGlobal) Oct 14, 2014
China could ask to join TPP, but would prefer finalizing the Doha Round with the WTO
After QE: Taking off the stabilisers
Ralph Atkins (FT) Oct 15, 2014
Markets are braced for increased volatility as central banks signal an end to unlimited liquidity.
Technology will not kill the banks
John Gapper (FT) Oct 15, 2014
Silicon Valley does not want a new financial system, but rather to ride on the existing one.
Weak yen is no panacea but Abe needs it
David Pilling (FT) Oct 15, 2014
Depreciation is the central bank’s most potent tool. If it falters so could the reflation experiment.
In praise of tax inversions
James Mackintosh (FT) Oct 15, 2014
While tax-driven deals are not yet dead, they are pallid and shaky.
Rocking the markets
Jonathan Guthrie (FT) Oct 15, 2014
Crashing chords of final abandonment of view US had decoupled from a slowing world.
Winners and losers from oil price plunge
Ed Morse (FT) Oct 15, 2014
Brent crude at $80 would have effect of huge global QE programme.
As Oil Prices Plummet, Saudi Arabia Faces a Test of Strategy
Ben Hubbard and Clifford Krauss (NYT) Oct 15, 2014
Saudi officials have signaled that they are prepared to endure reduced profits rather than cut production in an effort to prop up prices, as they did to their later regret in the early 1980s.
A Pump War?
Thomas L. Friedman (NYT) Oct 15, 2014
The decline in oil prices is no accident. What’s really playing out here?
The Self-Inflicted U.S. Brain Drain
Michael S. Malone (WSJ) Oct 15, 2014
Up to 1.5 million skilled workers are stuck in immigration limbo. Many give up and go home.
A not-so-simple fix for the economy
Charles Lane (WP) Oct 15, 2014
The IMF’s proposal to jump-start the global economy through infrastructure comes with risks.
The Economic Consequences of Sex
Mukush Eswaran (Project Syndicate) Oct 15, 2014
If assumptions about gender (such as innate differences in abilities) have become intellectually untenable, why do gender differences in economic outcomes persist? Economists have recently identified a fundamental reason in a phenomenon that remains pervasive: the gap in autonomy (or bargaining power) between women and men.
New Battlegrounds in Development Finance
Nancy Alexander and Francis A. Kornegay (Project Syndicate) Oct 15, 2014
Infrastructure financing in the developing world is relying increasingly on public-private partnerships. The new appeal of PPPs may redefine not just development economics, but also the overall relationship between rich and poor countries – though not necessarily for the better.
Energy Limits Won't Hold Back Growth
Noah Smith (Bloomberg View) Oct 15, 2014
The world's limited supplies of energy probably won't stifle growth, an argument that some scientists have been making.
China's Next Export: Deflation
William Pesek (Bloomberg View) Oct 15, 2014
Inflation hawks should take a closer look at China's most recent data, which contain worrying implications for efforts to roll back easy-money policies around the world.
Why Putin and Merkel Don't Put Growth First
Leonid Bershidsky (Bloomberg View) Oct 15, 2014
Politicians as different as Angela Merkel and Vladimir Putin have valid reasons for choosing policies that do not lead to immediate economic growth.
October's Wild Ride Isn't Over Yet
Mohamed A. El-Erian (Bloomberg View) Oct 15, 2014
Asset losses are a hard lesson for investors who were lulled by what they believed was a low-growth, low-volatility equilibrium.
Indian Economy to Overtake China's
Gordon G. Chang (World Affairs) Oct 15, 2014
Narendra Modi’s victory this year signaled a clear rejection of the socialism of India’s founders. The shift has some analysts predicting a sea of change for the country’s economy.
Why We Must Break Up the Financial Herd
Avinash D. Persaud (QFinance) Oct 15, 2014
Financial firms can play an important role in restoring growth but only as part of a system that does not accentuate boom and bust.
Restoring financial stability with economic growth
James Boughton (VoxEU) Oct 15, 2014
The international financial system is not working fine and reforms of regional and global institutions are much needed. This column discusses some of the transformations that the IMF could implement in order to keep pace with the changes in the world economy. One problem for the credibility of the IMF is the G20 in its current design and organisation. Institutional reforms, however, should be combined with advances in economic policy in order to promote economic growth and financial stability.
Markets are parched for liquidity despite a flood of cash
Gillian Tett (FT) Oct 16, 2014
This week’s price gyrations show that the degree to which assets can be traded matters hugely.
Deflation threat to Draghi’s credibility
Ralph Atkins (FT) Oct 16, 2014
Markets expect inflation to undershoot central bank targets.
The markets are right to be anxious
Stephen King (FT) Oct 16, 2014
The US no longer controls its own destiny nor, indeed, the destiny of others.
Living in a new industrial revolution
Andrew McAfee (FT) Oct 16, 2014
Nothing changes the world like technology. Here’s why I’m optimistic.
What Markets Will
Paul Krugman (NYT) Oct 16, 2014
The financial turmoil of the past few days, especially in Europe, have policy crusaders again sure that they know what the markets are asking for.
Global Markets Catch the Chinese Flu
Ruchir Sharma (WSJ) Oct 16, 2014
The ill effects of Beijing’s borrowing and spending binge are rippling through the world economy.
What the 2014 Oil Crash Means
Michael Levi (Politico) Oct 16, 2014
Prices are falling—fast. Is that good or bad news for the United States?
When meetings matter—The World Bank and IMF Convene
Robert Kahn (CFR) Oct 16, 2014
There are many reasons cited for this week’s market turndown and risk pullback, including concerns about global growth, Ebola, turmoil in the Middle East, and excessive investor comfort from easy money. What has been less commented on is the role played by last weekend’s IMF and World Bank Annual Meetings.
How Wall Street is Killing Big Oil
Deepak Gopinath (YaleGlobal) Oct 16, 2014
Companies rely on stock markets to raise money by selling small shares of ownership to investors. But investors may be killing rather than boosting major private energy companies. Once reliable market beaters, Big Oil shares are lagging.
A long-term view on inequality
Brian Keeley (OECD Insights) Oct 16, 2014
Even though poverty is not what it once was, humanity is still divided between haves and the have-nots.
IMF Calls for Structural Reforms, Cooperation to Spur Global Growth
Bridges, Volume 18, Number 34 Oct 16, 2014
Structural reforms will be key in shoring up the fragile global economic recovery, particularly in light of increased downside risks, said the world’s finance chiefs and central bankers following the International Monetary Fund’s (IMF) Annual Meetings in Washington this past weekend.
EU Releases TTIP Negotiating Mandate
Bridges, Volume 18, Number 34 Oct 16, 2014
EU governments last Thursday decided to make public negotiating instructions given to the European Commission in June 2013 for hammering out the bloc’s ongoing transatlantic trade talks with the US.
To Unleash an Infrastructure Boom, Turn to the Private Sector
Gary Clyde Hufbauer and Tyler Moran (PIIE) Oct 16, 2014
With the world economy suffering, neither monetary nor fiscal nostrums are giving much relief. Easy money has boosted bond and equity prices, as well as housing values, but it has done little to lift wages or employment. Fiscal expansion is constrained by politics, not economics. Debt and deficit hawks are ascendant in Germany and elsewhere, and in too many influential circles "Keynes" has become a pejorative word.
Is Asia Ready for Another Wild Ride?
William Pesek (Bloomberg View) Oct 16, 2014
Asia rode out the last recession in relative style. But the methods it employed then are no longer sustainable in the face of renewed global volatility.
High-Speed Traders Put a Bit Too Much Gravy on Their Meat
Matt Levine (Bloomberg View) Oct 16, 2014
It can be hard to tell manipulative from non-manipulative strategies, but naming your strategies "Meat" and "Gravy" is a clue.
France Gets Whacked by the Bond Market
Mark Gilbert (Bloomberg View) Oct 16, 2014
If I was the head of bond sales for France, I'd be somewhat worried that investors seem to be downgrading my status to that of peripheral European borrower.
Greece Still Needs Intensive Care
Mark Gilbert (Bloomberg View) Oct 16, 2014
Greece wants to discharge itself from the supervision that accompanied its 2010 transfusion of emergency aid worth 240 billion euros. The bond market, though, says Greece still needs intensive care.
China’s Vicious Growth Circle
Keyu Jin (Project Syndicate) Oct 16, 2014
Most economists have a reason to be worried about China’s economy – whether it be low consumption, industrial overcapacity, environmental degradation, or government interventions. What many fail to recognize is that these are merely the symptoms of a single underlying problem: China’s skewed growth model.
Putin Leaves Private Businesses in the Cold
Leonid Bershidsky (Bloomberg View) Oct 16, 2014
The erstwhile heroes of Russian private business don't see a role for themselves in Vladimir Putin's new, isolationist Russia.
The Spider of Finance
Howard Davies (Project Syndicate) Oct 16, 2014
The Financial Stability Board has now been in operation for five years. Though no international audit of its performance has been undertaken, a fair verdict would be that the FSB has done no more and no less than what its political masters have been prepared to allow it to do.
Come Home, Europeans
Edoardo Campanella (FA) Oct 16, 2014
Europe's brain drain problem is becoming a major crisis.
Oil Bust Has Brazil in Deep Water
Mac Margolis (Bloomberg View) Oct 17, 2014
Petrobras has long been perp-walked to a different set of rules.
Buy a Yacht, Save the World
Mark Whitehouse (Bloomberg View) Oct 17, 2014
Global growth depends increasingly on U.S. consumers buying stuff they don't need.
How India Can Bust Inflation
Dhiraj Nayyar (Bloomberg View) Oct 17, 2014
Things are looking up for Indian central banker Raghuram Rajan. Now's the time to settle outstanding questions about how his bank works.
The Inequality Trifecta
Mohamed A. El-Erian (Project Syndicate) Oct 17, 2014
Perhaps the most striking disconnect at the annual IMF/World Bank meetings was the disparity between participants’ interest in discussions of inequality and the ongoing lack of a formal action plan for governments to address it. This represents a profound failure of policy imagination – one that must urgently be addressed.
Unleashing Africa’s Girl Power
Joaquim Chissano (Project Syndicate) Oct 17, 2014
Though Sub-Saharan Africa’s economies have boomed in recent years, the headline figures mask longer-term problems – not least, an over-reliance on natural resources and chronic inequalities. Inclusive, sustainable growth is achievable, but only by tapping the continent’s greatest reserve of energy and creativity: African women.
Four Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End
Joseph T. Salerno (Mises Daily) Oct 17, 2014
There are strong indications that the remarkable run up of asset prices in the last few years is beginning to run out of steam and may be on the verge of collapse. We will leave aside the question of whether the asset inflation is symptomatic of a garden-variety inflationary boom or is a more virulent bubble phenomenon in which prices are rising today simply because buyers anticipate that they will rise tomorrow.
When a Stock Market Theory Is Contagious
Robert J. Shiller (NYT) Oct 18, 2014
Is the world economy suffering from “secular stagnation”? True or false, the idea alone could keep hurting stock prices.
Europe’s Essential Unity
José Manuel Barroso (Project Syndicate) Oct 18, 2014
Over the past ten years, the EU has endured a series of unprecedented crises, the likes of which it is unlikely to see again. But other, no less daunting challenges lie ahead, and Europeans would do well to remember the lessons learned along the way.
The great hole of China
Economist Oct 18, 2014
Its debt will not drag down the world economy, but it risks zombifying the country’s financial system.
What China Means by 'Rule of Law'
Paul Gewirtz (NYT) Oct 19, 2014
Every reform made or promised in China provides an opening.
Healthier and wealthier – the changing face of growing old
Norma Cohen (FT) Oct 19, 2014
By 2050 those aged over 65 will outnumber children under five. The first part of a series on ageing populations looks at how that demographic shift is creating a new and powerful consumer class.
Eurozone stagnation is a greater threat than debt
Wolfgang Münchau (FT) Oct 19, 2014
Monetary policy can boost markets in the shortrun, but this cannot be sustained indefinitely.
Russia cannot stand low oil prices forever
Sergei Guriev (FT) Oct 19, 2014
The government will have either to cut spending or raise taxes.
Oil gush keeps prices low as fear is high
Daniel Yergin (FT) Oct 19, 2014
There is a surplus of geopolitical risk in the world, but a greater surplus of oil.
Hollande’s road to reform is tortuous
Hugh Carnegy (FT) Oct 19, 2014
France’s president has accelerated change, but too slowly to avoid a clash with Brussels over deficit reduction.
The Poor and the Sick
Fran Quigley (FA) Oct 19, 2014
What Cholera and Ebola have in common.
Ebola highlights Nigeria’s potential
William Wallis (FT) Oct 20, 2014
Nation faces battle against corruption and Islamist insurgency.
Pick fund managers with skin in the game
Stephen Foley (FT) Oct 20, 2014
What if there was a way to identify market beaters in long run?
Market nerves do not portend global slump
Andrew Sentance (FT) Oct 20, 2014
Negative focus colours interpretation of economic data.
A challenge to the old guard of finance
Eswar Prasad (FT) Oct 20, 2014
The IMF’s is able to assess countries’ financial and macroeconomic policies.
Borders and budgets could lay Europe low
Gideon Rachman (FT) Oct 20, 2014
Unrest over sovereignty issues risks pushing EU to the point of no return.
China Versus America
Roger Cohen (NYT) Oct 20, 2014
How Chinese "harmony" and American "freedom" produce the dangerous clash of two exceptionalisms.
Strong Growth in Sub-Saharan Africa, but Pockets of Difficulty
IMF Survey Oct 20, 2014
Strong growth in most of sub-Saharan Africa’s economies should support robust regional expansion in 2014 and 2015, the IMF’s regional outlook says. In most countries, growth benefits from a blend of infrastructure investment, expanding services, and agricultural output.
The Eurozone is About Tough Love
Holger Schmieding (Globalist) Oct 20, 2014
Help is available to countries in trouble – in exchange for meeting conditions.
The ECB’s Battle With the Markets: Home Truths from the Eurozone
Holger Schmieding (Globalist) Oct 21, 2014
Amidst global stock market turmoil, what about Europe’s fundamentals?
The gloves are off in the sovereign debt debate
Brian Caplen (The Banker) Oct 20, 2014
The clauses attached to Kazakhstan's latest sovereign bond show that governments are squaring up to so-called vulture funds in the wake of Argentina's recent default.
America, the Balanced
Jeffrey Frankel (Project Syndicate) Oct 20, 2014
It may be time to stop worrying about the US current-account deficit – and not only because of adjustment at home and in China. It is possible that, properly measured, America's true deficits were smaller than has been reported, and even that, in some years, they were not there at all.
Brazil’s Institutional Limbo
Camila Villard Duran (Project Syndicate) Oct 20, 2014
Brazil's presidential election will determine the future of the central bank – and therefore the country's macroeconomic trajectory. The 50-year old institution is ripe for reform, but neither candidate seems ready to give it the independence it needs, or to ensure that it is truly accountable to citizens.
4 Lessons of a Wild Market Week
Mohamed A. El-Erian (Bloomberg View) Oct 20, 2014
Almost anything makes markets jittery these days, and investors are conditioned to rely on the Fed for support.
A Little Volatility Can Be Good for You
Bloomberg View Oct 20, 2014
Investors are complaining that regulations are making big banks less willing to buy when everyone wants to sell. Why would that be bad?
Reasons to be gloomy about EM prospects
Henny Sender (FT) Oct 21, 2014
Asia’s export-led growth model is unlikely to work as well in future.
Emerging markets foster gloom
Henny Sender (FT) Oct 21, 2014
Asia’s export-led growth model requires a rethink after a decade of success.
Stakes high for Europe bank stress tests
Huw van Steenis (FT) Oct 21, 2014
Good news on key issue of assisting capital-raising.
ECB leak a tonic for volatile Italy
Ralph Atkins (FT) Oct 21, 2014
Bigger, more liquid markets can sometimes be more responsive under stress.
Reform alone is no solution for eurozone
Martin Wolf (FT) Oct 21, 2014
A policy that may work for Germany alone cannot work for an economy more than three times as big.
Corporate India frets over debt levels
James Crabtree (FT) Oct 21, 2014
Nation’s industrial and banking sectors enter new political era still undercapitalised.
Rouhani's 'economic package' is empty
Ismael Hossein-Zadeh (AT) Oct 21, 2014
The belief of Iran's Hassan Rouhani administration that the establishment of better relations with the US would serve as a panacea to the country's economic woes has effectively linked any chance of financial revival with an uncertain negotiation process. Perceptions that an unrestrained integration into global capitalism and wholesale privatization will end the West's imperialist policy on Iran are equally naive.
The Similarities Between Germany and China
George Friedman (Stratfor) Oct 21, 2014
I returned last weekend from a month-long trip to both East Asia and Europe. I discovered three things:
The Saudis Aren't in Control of the Oil Market Any Longer
Nick Butler (Globalist) Oct 21, 2014
The brave new world where excess oil supply meets static demand.
New Revenues Can Offset Africa’s Rising Income Inequality
IMF Survey Oct 21, 2014
Combating rising income inequality in sub-Saharan Africa will require a pragmatic, multipronged approach to uncover new sources of revenue while also enabling critical investments in human capital, participants agree at a seminar in Washington, D.C.
Is Hong Kong China's Future?
William Pesek (Bloomberg View) Oct 21, 2014
Many people have given up hope of making China look more like Hong Kong. In fact, the mainland's future looks much like that of the former British colony's present.
Inheritance and Inequality
Edward N. Wolff (Project Syndicate) Oct 21, 2014
In his book Capital in the Twenty-First Century, Thomas Piketty emphasizes the rising share of inheritances and gifts in household wealth over time. This seems like a shocking revelation, implying ever-rising wealth inequality, but is it correct?
The Moral Economy of Debt
Robert Skidelsky (Project Syndicate) Oct 21, 2014
The creditor-debtor relationship embodies no iron law of morality; rather, it is a social relationship that always must be negotiated. When quantitative precision and an unyielding approach to debt obligations are the rule, conflict and penury soon follow.
What Large Data Flows Mean for U.S.-EU Trade
Joshua Meltzer (Brookings) Oct 21, 2014
Cross-border data flows between the U.S. and Europe are the highest in the world. Joshua Meltzer examines what this means for trade and investment opportunities.
Forward guidance: Human plans and divine laughter
David Miles (VoxEU) Oct 21, 2014
Many central banks embrace forward guidance by announcing expected interest rate paths. But how likely it is that actual rates will be close to expected ones? This column argues that quantifying such uncertainty poses great difficulties. Precise probability statements in a world of uncertainty (not just risk) can be misleading. It might be better to rely on qualitative guidance such as: “Interest rate rises will probably be gradual and likely to be to a level below the old normal”.
Sovereign-debt relief and its aftermath: The 1930s, the 1990s, the future?
Carmen M Reinhart & Christoph Trebesch (VoxEU) Oct 21, 2014
To work towards resolving Europe’s ongoing debt crisis this column looks to the past. From the recent emerging market debt crisis (1980s-2000s) and the interwar episode of the 1920s-1930s we learn that debt write-downs and defaults are able to be postponed but not prevented. Punishment for default is temporary, sometimes followed by a renewed surge in borrowing that leads to another crisis.
Financial Market Cognitive Dissonance
Harley Bassman (PIMCO) Oct 21, 2014
Presently, the financial markets are confronted with two conflicting pricing structures: a U.S. dollar yield curve that anticipates a significant increase in interest rates over the medium term, and an options market that offers "rate insurance" at the lowest prices in decades. Markets may appear confounded by cognitive dissonance, but forward-looking investors can peer through the fog: A return to a more recognizable risk/return profile, even if market returns are lower overall (as may well be the case over the secular horizon), could help investors more confidently align longer-term objectives with strategies.
The myopic western view of China’s rise
Martin Jacques (FT) Oct 22, 2014
The reforms that count tend to conform to the western model.
High stakes to keep rates low
Chris Giles (FT) Oct 22, 2014
The case for the 0.5 per cent interest rate is weakening.
Marshall’s grand plan applies to Ukraine
Anders Aslund (FT) Oct 22, 2014
The west will have to co-operate to stop Putin and should do so now.
China’s Missing Business Cycle
WSJ Oct 22, 2014
A slowdown will make the real health of the economy clearer.
Millionaire’s club expands
Robert J. Samuelson (WP) Oct 22, 2014
A new study puts the worldwide total at 35 million in 2014.
Pity Poor Germany? Leadership Comes with Responsibility
Richard Phillips (Globalist) Oct 22, 2014
How can an economy, which represents only 4.9% of global GDP, be so central to the global economic outlook?
Europe’s Brush with Debt
Hans-Werner Sinn (Project Syndicate) Oct 22, 2014
French Prime Minister Manuel Valls and his Italian counterpart, Matteo Renzi, refuse to comply with the eurozone's 2012 fiscal compact; instead, they intend to run up fresh debts. Their stance highlights a fundamental flaw in the European Monetary Union’s structure – one that Europe’s leaders must address before it is too late.
The TPP’s Missing Ingredient
Simon Johnson (Simon Johnson) Oct 22, 2014
The typical approach when seeking to finalize an agreement aimed at reducing trade barriers is to ask for less, not more, from those on the other side of the table. But the Trans-Pacific Partnership is different: It will work only if the US insists that participating countries do not engage in currency manipulation.
The New Challenge to Market Democracies
William A. Galston (Brookings) Oct 22, 2014
We’ve lost sight of what makes democracy work: recommendations for fixing the broken bargain between governments and citizens.
The ECB as lender of last resort?
Charles A.E. Goodhart & Dirk Schoenmaker (VoxEU) Oct 22, 2014
As part of the move to a banking union, the largest banks in the Eurozone will soon be supervised by the ECB. This column argues that supervision and the lender of last resort function should be seen as a joint product. After the introduction of the euro, the national central banks continued to act as lenders of last resort because bank supervision remained at the national level. Now that supervision is moving to the ECB, so should the lender of last resort function for the larger, cross-border, banks.
Grappling With Graft
Alexander Lebedev and Vladislav Inozemtsev (FA) Oct 22, 2014
How to combat the growing corruption epidemic.
The Oil Price Swoon Won’t Stop the Shale Boom
Mark P. Mills (WSJ) Oct 23, 2014
Still profitable at lower prices, fracking is ripe for technology gains that would help it weather further declines.
Commodities: A partial pump primer
Chris Giles (FT) Oct 23, 2014
What does the fall in prices mean for a fragile global economy?
Jingle that sounds the road to recovery
Gillian Tett (FT) Oct 23, 2014
It sometimes pays to wipe the debt slate clean rather than sweep problems under the carpet.
Blame Germany for the right reasons
Otmar Issing (FT) Oct 23, 2014
The case for running a deficit to stimulate the economy is flimsy.
Eurozone crisis fears re-emerge
Ralph Atkins (FT) Oct 23, 2014
Markets unsure if ECB bank stress test results will be positive.
EU, Singapore Finalise Investment Negotiations
Bridges, Volume 18, Number 35 Oct 23, 2014
Singapore and the EU announced last week that they had completed the final section of their free trade deal, specifically the investment talks that had been left outstanding when the rest of the pact was completed a year ago.
Seychelles’ WTO Accession Terms Finalised
Bridges, Volume 18, Number 35 Oct 23, 2014
After nearly two decades of negotiations, Seychelles is set to become the WTO's 161st member, with the Working Party tasked with the negotiations signing off on the island nation's accession terms on 17 October.
New Stage of Consultations Begins as WTO Deadlock Persists
Bridges, Volume 18, Number 35 Oct 23, 2014
WTO members are still far from a solution on the implementation of the decisions reached at their ministerial conference last December in Bali, Indonesia, with Director-General Roberto Azevêdo warning last Thursday that the impasse could be "the most serious situation that this organisation has ever faced."
New EU Commission Confirmed as Climate, Energy Meeting Kicks Off
Bridges, Volume 18, Number 35 Oct 23, 2014
The European Parliament has signed off on the proposed slate of officials who will serve in the new European Commission, paving the way for the group to take office in November. The news comes at a particularly busy time for the EU, with the bloc's leaders also aiming to finalise a new climate and energy framework for 2030 this week.
Germany, America and the New Global Order
Stephan Szabo (Globalist) Oct 23, 2014
How two reluctant, yet pivotal powers adjust to a pluralistic and less Western world order.
The End of Free Banking
Mark Gilbert (Bloomberg View) Oct 23, 2014
U.K. banks will disappear from the high street as the Internet takes over; and retail banking won't be free for much longer in a world of zero interest rates.
A New Macroeconomic Strategy
Jeffrey D. Sachs (Project Syndicate) Oct 23, 2014
Both neo-Keynesians and supply-siders have tried and failed to overcome the high-income economies’ persistently weak performance in recent years. It is time for a new approach, one based on sustainable, investment-led growth.
The Rebirth of Egypt
Merit Al-Sayed, Mark Esposito, and Terence Tse (Project Syndicate) Oct 23, 2014
If macroeconomic indicators are to be believed, Egypt’s economic growth has ground almost to a halt over the past three years. Worse, however, the past three decades attest to the failure of conventional macroeconomics to guide policymakers in managing development.
The WTO’s Reform Crisis
Emily Jones (Project Syndicate) Oct 23, 2014
The World Trade Organization’s director-general, Roberto Azevêdo, has called for an urgent shakeup of his institution, and one of the main reform proposals is to abandon consensus-based decision-making. That might boost efficiency, but it could jeopardize one of the WTO’s greatest assets: its legitimacy.
Europe’s Fiscal Wormhole
Guntram B. Wolff (Project Syndicate) Oct 23, 2014
The fulfillment of policy rules in the eurozone appears to be impossible without growth, but growth appears to be impossible without breaking the rules. With all of the rules pointing toward recession, how can Europe boost recovery?
The Land of Milk and Cotton
J. P. Singh (FA) Oct 23, 2014
How U.S. protectionism distorts global trade.
'Whatever it takes' breaks down
John H. Makin (AEI) Oct 23, 2014
High hopes for global economic growth in 2014 have been dashed by still-declining growth and inflation, and outright global deflation is becoming more likely. The policy measures enacted thus far to reinvigorate the economy are not working, and policymakers have expressed no clear idea about what to do next. Central banks and governments must be more open about alternative approaches to managing the threat of stagnation and low growth and should prepare for a period of sharp market correction that may make these new policies more necessary.
Realising China’s sustainable growth rate
Yukon Huang (FT) Oct 24, 2014
Beijing’s reforms have the potential to increase government expenditures and boost consumption.
China Will Keep Growing. Just Ask the Soviets.
Neil Irwin (NYT) Oct 24, 2014
Can China continue its torrid pace of economic growth for decades to come? The long arc of history suggests not, according to a paper by Harvard’s Lant Pritchett and Lawrence Summers.
The Return of Volatility Is Mainly About Monetary Policy
Niall Ferguson (WSJ) Oct 24, 2014
This month’s wild market swings show there is no smooth exit from QE3.
American-Made Financial Repression
Andrew Sheng and Xiao Geng (Project Syndicate) Oct 24, 2014
The late economist Ronald McKinnon argued that China and the US, by working together, could alleviate financial repression and enhance global monetary stability. Unfortunately, this advice is not popular among US economists and policymakers, who prefer the short-term political advantages afforded to them by free-market rhetoric.
Here's What the Fed Will Do
Mohamed A. El-Erian (Bloomberg View) Oct 24, 2014
The Fed will be forceful in trying to avoid mistakes and reduce risks of an accident in the markets.
Cheaper oil: Winners and losers
Economist Oct 25, 2014
America and its friends benefit from falling oil prices; its most strident critics don’t.
The euro zone: The world’s biggest economic problem
Economist Oct 25, 2014
Deflation in the euro zone is all too close and extremely dangerous.
Patronage will persist in Greece
Tony Barber (FT) Oct 26, 2014
The bailout is a reminder of how big powers have often exercised control.
China’s doomed ‘socialist rule of law’
Rebecca Liao (FT) Oct 26, 2014
The Communist party attempt to introduce legal redress is an impossible feat.
Germany must still be a force for freedom
Robert Zoellick (FT) Oct 26, 2014
US and Berlin should launch a strategic dialogue about the changing world.
Close the door on an accidental migration
David Goodhart (FT) Oct 26, 2014
If you can loosen the rules, you can also tighten them.
Beijing’s journey from luxury to thrift
James Kynge (FT) Oct 26, 2014
China’s ballooning debt and slowing growth will be tough to manage.
EU must act now to avoid ‘lost decade’
Scott Minerd (FT) Oct 26, 2014
None of the tools currently on the table will get the job done.
When iPhones Ring, the Economy Listens
Jeff Sommer (NYT) Oct 26, 2014
Beyond serving as Apple’s biggest profit center, the iPhone is also a bedrock of consumer spending and the stock market.
Dreamboat Vampires and Zombie Capitalists
David Castillo and William Egginton (NYT) Oct 26, 2014
The undead may best express our anxieties about capitalism: legions of mindless, soulless consumers who sustain its endless production.
Brazil Sticks With Statism
Mary O’Grady (WSJ) Oct 26, 2014
Odds are that the country’s reputation for economic mediocrity is safe for another four years.
What drives micro and macro volatility?
Cosmin L. Ilut, Matthias Kehrig & Martin Schneider (VoxEU) Oct 26, 2014
Heightened economic uncertainty has attracted much recent attention. Policymakers repeatedly emphasise uncertainty as a key factor driving the last two recessions – in particular the depth and length of the Great Recession. This column proposes asymmetric hiring rules as a mechanism that generates endogenous and joint movements in macro and micro volatility of employment growth.
Advanced economies’ sovereign debt: 100 years of data
S. M. Ali Abbas, Laura Blattner, Mark De Broeck, Asmaa El-Ganainy & Malin Hu (VoxEU) Oct 26, 2014
There has been renewed interest in sovereign debt since the Global Crisis, but relatively little attention has been paid to its composition. Sovereign debt can differ in terms of the currency it is denominated in, its maturity, its marketability, and who holds it – and these characteristics matter for debt sustainability. This column presents evidence from a new dataset on the composition of sovereign debt over the past century in 13 advanced economies.
Stress tests will not cure the eurozone
Gavyn Davies (FT) Oct 27, 2014
A dysfunctional banking system should no longer be fatal for growth.
Trade negotiators should own up to their ambition
Pascal Lamy (FT) Oct 27, 2014
Consumers fear the transatlantic pact will cost them their safeguards.
Mexico: Caught in the crossfire
Jude Webber (FT) Oct 27, 2014
Security woes are threatening to ruin President Enrique Peña Nieto’s record of success.
Avoiding the Global Slowdown Blues
Michael J. Boskin (WSJ) Oct 27, 2014
Despite jitters about where the U.S. is headed, there are specific steps we can take to ensure even stronger growth.
Smarter, greener, healthier and more productive: The new old
Tobias Vogt and Fanny Kluge (OECD Insights) Oct 27, 2014
Ageing populations are a threat to the sustainability of modern societies.
Europe's Banking Union Starts on an Encouraging Note
Nicolas Véron (PIIE) Oct 27, 2014
Sunday, October 26 was D-Day for Europe's banks: At noon in Frankfurt, the European Central Bank (ECB) announced the results of its "comprehensive assessment" of the euro area's 130 largest banks, including an Asset Quality Review (AQR) and stress tests. Simultaneously in London, the European Banking Authority (EBA) announced the results of these stress tests for a larger sample of banks, including the largest banks headquartered in the European Union but outside the euro area.
Europe's Rules? Forget About Them
Stephan Richter (Globalist) Oct 27, 2014
The rest of the world has it all wrong: The EU isn't obsessing about rules. Just look at the leaders of France and the UK.
A New World Emerges
Globalist Oct 27, 2014
The Globalist Quiz asks: Which major economy was recently overtaken by an emerging one? France? Japan? UK? Germany?
Europe's Banks Are Still a Threat
Bloomberg View Oct 27, 2014
Europe's latest bank stress tests are a big improvement over previous efforts, which were widely derided as too soft, but still not good enough.
What Europe's Stress Tests Will and Won't Do
Mohamed A. El-Erian (Bloomberg View) Oct 27, 2014
The European Central Bank calls out weak banks and puts economic integration on a solid track. The next steps are up to politicians, writes Mohamed A. El-Erian.
It's Time to Give China Some Time
William Pesek (Bloomberg View) Oct 27, 2014
Investors need to stop obsessing over every zig and zag in China's growth rate as if it were a big company that needs to impress us.
Britain’s Last EU Straw?
Harold James (Project Syndicate) Oct 27, 2014
The EU's recalculation of member states' budget contributions has fueled anti-EU resentment, especially in the UK, at a time when euroskepticism is already riding high. Indeed, the arbitrary nature of EU budget setting is likely to aggravate existing tensions.
The Era of Disorder
Richard N. Haass (Project Syndicate) Oct 27, 2014
Historical eras are difficult to recognize before they end. We can recognize the post-Cold War period of American preeminence, increased prosperity, and widespread peace as a distinct era, because a new and more menacing epoch has begun.
The Years of Living Tactically
Javier Solana (Project Syndicate) Oct 27, 2014
The biggest risk to global security today lies in the failure of the West to formulate a comprehensive strategy to address global challenges and manage the transition to a new multipolar system. The reason for this failure is simple: the West has allowed short-term tactical concerns to impede the development of a long-term vision.
China's Third Era: The End of Reform, Growth, and Stability
Gordon G. Chang (WA) Oct 27, 2014
After Mao and Deng Xiaoping, the People’s Republic of China has now entered its third era, a period to be marked by economic decline, political turbulence, and external belligerence.
Hugo Dixon (FA) Oct 27, 2014
Europe's quiet financial revolution.
Exploding wealth inequality in the United States
Emmanuel Saez and Gabriel Zucman (VoxEU) Oct 27, 2014
Wealth inequality in the US has followed a U-shaped evolution over the last century – there was a substantial democratisation of wealth from the Great Depression to the late 1970s, followed by a sharp rise in wealth inequality. This column discusses new evidence on the concentration of wealth in the US. Growing wealth disparity is fuelled by increases in both income and saving rate inequalities between the haves and the have nots.
Europe’s banks too feeble to spur growth
Martin Wolf (FT) Oct 28, 2014
One doubts whether the capital in eurozone institutions is enough to drive the economy forward.
Hungary’s illiberal democracy flourishes
George Szirtes (FT) Oct 28, 2014
Two steps forward, one step back – it is a familiar dance of the Fidesz party.
BEA’s relationships prowess blocks offers
Jennifer Hughes (FT) Oct 28, 2014
Bank of East Asia is a near-perfect example of tangled ties that drive so much business in Asia.
Why Germany needs to start spending
Lorenzo Bini Smaghi (FT) Oct 28, 2014
Huge excess of savings over investment will drag Europe into deflation spiral.
Rousseff’s Global Challenge: Do Better Than India
Stephan Richter (Globalist) Oct 28, 2014
With Modi, India got a new life politically. What about Brazil?
Dilma Redux: Or Move Closer to US?
Johanna Mendelson Forman (Globalist) Oct 28, 2014
Brazil, like the United States, is now polarized politically, with two irreconcilable halves.
Currencies Flag More Volatility Ahead
Mark Gilbert (Bloomberg View) Oct 28, 2014
October has savaged returns in the investment community; volatility in the currency market suggests the whiplash may continue.
Turn On the Taps in India
Dhiraj Nayyar (Bloomberg View) Oct 28, 2014
With inflation tamed and the economy in the doldrums, it's time for India's central bank to open up the taps.
ECB Buys the Wrong Kind of Bonds
Mark Gilbert (Bloomberg View) Oct 28, 2014
As the euro region's economic backdrop worsens, the pressure on the European Central Bank to add government bonds to its shopping list is growing.
Optimizing the Eurozone
Koichi Hamada (Project Syndicate) Oct 28, 2014
The eurozone is facing a bleak economic outlook, with growth remaining stagnant and the threat of deflation looming large. Its prospects will not improve unless and until it becomes the “optimal currency area” that its creators believed it to be.
Last Chance for Japan?
Stephen S. Roach (Project Syndicate) Oct 28, 2014
Notwithstanding all of the fanfare surrounding “Abenomics,” Japan’s economy remains moribund. But if Japan pays greater attention to likely shifts in the Chinese and US economies, it could be one the greatest beneficiaries of their coming rebalancing.
Mexico’s Powerful Energy Reforms
Martin Feldstein (Project Syndicate) Oct 28, 2014
Mexico's recent reform of its energy sector completes the agenda of economic integration that began when the North American Free Trade Agreement was approved in 1994. Now the country is poised to become Latin America’s economic star in the decade ahead.
Learning to Love China's New Superbank
William Pesek (Bloomberg View) Oct 28, 2014
The U.S. has good reason to be wary of China's new infrastructure superbank -- and just as good reason to try and join it.
Indonesia’s Jokowi can outdo Obama
David Pilling (FT) Oct 29, 2014
Widodo will need all the acumen that took him to the presidency to avoid the traps being set.
Largest economies must fix the eurozone
Olli Rehn and Jean Arthuis (FT) Oct 29, 2014
Only peer pressure, opprobrium and fear will shake leaders up.
The fiendish bond market needs a rethink
Stephen Foley (FT) Oct 29, 2014
Standardised products are likely to attract more demand.
‘Coffin corner’ threat to stability
Satyajit Das (FT) Oct 29, 2014
Post-crisis regulation makes markets more vulnerable to shocks.
Russian oil: Between a rock and a hard place
Jack Farchy (FT) Oct 29, 2014
It has the largest reserves of shale oil in the world but as sanctions bite, can Moscow exploit them?
Enough With European Austerity, Bring on the Stimulus
Alan S. Blinder (WSJ) Oct 29, 2014
Germany isn’t such a success story. Its GDP growth is a paltry 2.2% over 2008-13. Time for Merkel to budge.
The QE Record
WSJ Oct 29, 2014
The end of Fed bond buying is not the end of monetary easing.
Whither Europe's Banks after the Stress Test?
Jacob Funk Kirkegaard (PIIE) Oct 29, 2014
The new comprehensive assessement of the European banking sector—including the "stress tests" of banks—was released in late October and made headlines by highlighting progress toward solvency and health in the banking system. But the tests also underscored concerns that many banks will need more capital and a more profitable business model to survive in the future.
How to Give Japan a Second Wind
William Pesek (Bloomberg View) Oct 29, 2014
Pundits can debate how real Shinzo Abe's "third arrow" reforms are. But what Japan really needs is a fourth arrow.
Tunisia Needs an Economic Revolution
Bloomberg View Oct 29, 2014
Tunisia's political success may not last if the country doesn't quickly get to grips with reforming its economy.
Belindia Has Spoken
Andrés Velasco (Project Syndicate) Oct 29, 2014
Forty years ago, the Brazilian economist Edmar Bacha named his country Belindia: a combination of prosperous and modern Belgium and poor and backward India. Is the winner of last Sunday's presidential election, the incumbent Dilma Rousseff, really from "India"?
Europe: Building a Banking Union
Stratfor Oct 29, 2014
The recent stress tests by the European Central Bank offered few surprises and did not cause any significant political or financial reactions in the Continent. However, these tests were only the beginning of a complex process to build a banking union in the European Union. Unlike the stress tests, the next steps in this project could create more divisions in Europe because national parliaments will be involved at a time when Euroskepticism is on the rise. More important, the stress tests will not have a particular impact on Europe's main problem: tight credit conditions for households and businesses. Without a substantial improvement in credit conditions, there cannot be a substantial economic recovery, particularly in the eurozone periphery.
Making sense of ECB’s comprehensive assessment
Viral Acharya and Sascha Steffen (VoxEU) Oct 29, 2014
The ECB conducted a comprehensive assessment of banks and identified capital shortfalls for 25 banks, totalling €25 billion. In this column, the authors provide a number of benchmark stress tests to estimate capital shortfalls. The analyses suggest possible capital shortfalls between €80 billion and more than €700 billion depending on the model. They find a negative correlation between their benchmark estimates and the regulatory capital shortfall, and a positive one between the benchmarks and the regulatory estimates of losses. This suggests that regulatory stress test outcomes are potentially affected by the discretion of national regulators.
Global imbalances: Whither now?
Aqib Aslam, Samya Beidas-Strom, Marco E Terrones & Juan Yépez (VoxEU) Oct 29, 2014
Global current-account imbalances narrowed substantially over the past eight years. As a result, the systemic risks associated with these imbalances have decreased. This column argues that despite this narrowing, the net creditor and debtor positions diverged further. Some large debtor economies remain exposed to changes in market confidence. Containing remaining imbalances requires a rebalance in global demand.
The party is ending for Latin America
John Paul Rathbone (FT) Oct 30, 2014
The region is looking at a slowdown, but things could be worse.
Soaring costs in global internet race
Richard Waters (FT) Oct 30, 2014
Ramp-up in costs reflects intensified competition as well as upgrades to long-term ambitions.
Rescue measures for stagnant eurozone
Willem Buiter (FT) Oct 30, 2014
Bank stress tests an unconvincing fudge and big problems remain.
Apologizing to Japan
Paul Krugman (NYT) Oct 30, 2014
Western economists were scathing in their criticisms of Japanese policy, but the slump we fell into isn’t just similar to Japan’s. It’s worse.
Why Taxation Must Go Global
Wolfgang Schäuble (Project Syndicate) Oct 30, 2014
While business no longer knows any borders, taxation has remained stuck in the era of the nation-state. The resulting tensions between fiscal sovereignty and globalization can be resolved only through international standards and regulation.
Africa's Largest Free Trade Area Set to Launch in December
Bridges, Volume 18, Number 36 Oct 30, 2014
The planned Tripartite Free Trade Area (TFTA) – a zone that would be the largest free trade area in Africa and span across the continent's three main regional economic communities (RECs) – is now set to launch in mid-December at the Tripartite Summit of Heads of State and Government in Cairo, Egypt.
EU Leaders Reach Deal on Proposed 2030 Climate, Energy Goals
Bridges, Volume 18, Number 36 Oct 30, 2014
EU heads of state and government reached a political agreement late last week on a new climate and energy policy framework for 2030.
US, Mexico Announce Draft Deal on Sugar Trade Probes
Bridges, Volume 18, Number 36 Oct 30, 2014
US and Mexican officials announced on Monday that they had reached draft deals that could – if finalised – resolve a contentious row between Washington and Mexico City over sugar trade.
TPP Ministers: Shape of Trade Deal "Crystallising" Following Sydney Meet
Bridges, Volume 18, Number 36 Oct 30, 2014
Ministers from the Trans-Pacific Partnership (TPP) countries concluded a three-day meeting in Sydney, Australia on Monday, citing "significant progress" in their negotiations on both market access and on trade and investment rules.
China Is Very, Very, Very, Very Big
Noah Smith (Bloomberg View) Oct 30, 2014
Based on population, China's economy was destined to be bigger than the U.S.'s.
Jomo Kwame Sundaram (Project Syndicate) Oct 30, 2014
Though great strides have been made toward the Millennium Development Goal of halving the proportion of undernourished people in developing countries, the problem remains pervasive. The challenge is not just to provide more food, but to ensure that people have access to the nutrients they need to live healthy, productive lives.
Brazil Stays Populist
Juan de Onis (wA) Oct 30, 2014
President Rousseff of Brazil has won four more years in office, which means (at least) four more years of populist economics that threaten one of the world’s largest emerging markets.
The U.S. Should Not Fear Competing With China
Amitai Etzioni (Diplomat) Oct 30, 2014
With the Asian Infrastructure Investment Bank, the U.S. should not be afraid of a little healthy competition.
What Low Oil Prices Mean for the Global Economy
Luay Al-Khatteeb (Brookings) Oct 30, 2014
Many economic commentators are failing to see the benefits of lower oil prices for businesses, consumers, oil-producing nations, and the global economic recovery.
Reflections on the new 'Secular Stagnation hypothesis'
Lawrence Summers (VoxEU) Oct 30, 2014
The notion that Europe and other advanced economies are suffering secular stagnation is gaining traction. This column by Larry Summers – first published in the Vox eBook “Secular Stagnation: Facts, Causes and Cures” – explains the idea. It argues that a decline in the full-employment real interest rate coupled with low inflation could indefinitely prevent the attainment of full employment.
Regulating capital flows at both ends
Atish R Ghosh, Mahvash Saeed Qureshi and Naotaka Sugawara (VoxEU) Oct 30, 2014
Capital flows to emerging markets have been very volatile since the global financial crisis. This has kindled debates on whether – and how – to better manage cross-border capital flows. In this column, the authors examine the role of capital account restrictions in both source and recipient countries in taming destabilising capital flows. The results indicate that capital account restrictions at either end can significantly lower the volume of cross-border flows.
What the Bank of Japan’s Surprise Move Means for the Global Economy
Neil Irwin (NYT) Oct 31, 2014
It offers a reminder, or perhaps a warning, of just how hard it will be to get the global economy out of its deflationary funk.
Bank of Japan's Money Can't Match China's Engine
William Pesek (Bloomberg View) Oct 31, 2014
Friday's stimulus moves by the Bank of Japan are another sugar high with little hope of producing sustainable growth in the long run.
Europe's Deadly Fiscal Paralysis
Bloomberg View Oct 31, 2014
Instead of grappling with the threat of low growth in the euro area, Europe's leaders are endlessly engaged with trivialities.
Hedge Fund Thinks Fighting Argentina Over Bonds Looks Fun
Matt Levine (Bloomberg View) Oct 31, 2014
Oh sure let's just accelerate our Argentine bonds, what could possibly go wrong except everything that's happened over the last decade.
Growth in the New Climate Economy
Michael Spence (Project Syndicate) Oct 31, 2014
Action to reduce carbon-dioxide emissions and mitigate climate change has long been viewed as fundamentally opposed to economic growth. But a recently released report concludes that efforts to combat climate change could boost growth considerably – and soon.
Testing the Eurozone’s Safety Net
Ashoka Mody (Project Syndicate) Oct 31, 2014
On October 14, the European Court of Justice convened to begin assessing the German Constitutional Court’s ruling that the European Central Bank's “outright monetary transactions” scheme is illegal. This is a dangerous time for OMT – the eurozone’s most potent crisis-management tool – to be called into question.
The Single-Engine Global Economy
Nouriel Roubini (Project Syndicate) Oct 31, 2014
The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, only one of its four engines is functioning properly, the pilots must navigate menacing storm clouds, and fights are breaking out among the passengers.
Governing a World Out of Order
Anne-Marie Slaughter (Project Syndicate) Oct 31, 2014
In his new book, Henry Kissinger asks whether the world can develop an international order that will keep the peace and allow countries to play by agreed rules. Unfortunately, that is the wrong question.
The Slow March to Gender Parity
Laura Tyson and Saadia Zahidi (Project Syndicate) Oct 31, 2014
Economic policymakers around the world are looking for ways to boost growth, with infrastructure investment topping most lists. But another, often-overlooked remedy is to increase the economic participation and advancement of women.
Getting Investment in Europe Right
Jean Pisani-Ferry (Project Syndicate) Oct 31, 2014
The European Commission’s new president, Jean-Claude Juncker, has put public investment back on the agenda with his idea of a three-year €300 billion capital spending plan. But, behind the superficial consensus that more investment would help to strengthen a worryingly feeble European economy, many questions remain unanswered.
The Future of Cities
John Chambers and Wim Elfrink (FA) Oct 31, 2014
The Internet of everything will change how we live.