Russia’s demographics turn positive
Steve Johnson (FT) Nov 1, 2016
Rising birth rate, tumbling death rate and immigration drives population rebound
Investors face political risk whoever wins in the US election
Tina Fordham (FT) Nov 1, 2016
Advanced economies are having an ‘emerging markets moment’.
Britain will discover that distance still matters in trade
Alan Beattie (FT) Nov 1, 2016
It will be tough to replace access to EU services markets with business elsewhere.
Why sector-by-sector Brexit will not work
Martin Sandbu (FT) Nov 1, 2016
UK politics cannot stomach the reality of modern economic integration.
Powering Australia’s Economic Surge
George Megalogenis (NYT) Nov 1, 2016
While other wealthy nations struggle to define their purpose, Australia has unlocked the secret to its next wave of prosperity: immigration.
Free Trade’s Bleak Outlook
Bloomberg View Nov 1, 2016
Europe may not be able to make a deal with the U.S. as it did with Canada.
Debating Free Trade and the Populist Backlash
Tyler Cowen and Noah Smith (Bloomberg View) Nov 1, 2016
For years, trade was seen as a big economic plus. Then China entered the picture.
UK: How a Development Economist Sees It
Helmut Reisen (Globalist) Nov 1, 2016
To a development economist, the future macroeconomic policy needs for Britain seem fairly obvious.
Central Banks and the Revenge of Politics
Otmar Issing (Project Syndicate) Nov 1, 2016
In recent decades, central banks have enjoyed high prestige as guarantors of economic stability – a reputation bolstered after their resolute action in the wake of the 2008 global financial crisis prevented a repeat of the Great Depression. That may be about to backfire – with serious implications for central-bank independence.
The New Fiscal Reality
Jean Pisani-Ferry (Project Syndicate) Nov 1, 2016
In Europe and the US, governments have an unprecedented opportunity to invest in physical infrastructure and human capital. To take advantage of it, however, they must reject the false choice between budgetary responsibility and economic revitalization.
Africa's Population Growth Could Undermine Sustainability Goals
Joseph Chamie (YaleGlobal) Nov 1, 2016
Africa, by far the world's most rapidly growing region, must aim for population stabilization to ensure peace
Progress Isn't Natural
Joel Mokyr (Atlantic) Nov 1, 2016
Humans invented it—and not that long ago.
Populism on the March
Fareed Zakaria (FA) Nov 1, 2016
Why the West is in trouble.
The Globalization of Rage
Pankaj Mishra (FA) Nov 1, 2016
Why today’s extremism looks familiar.
Salvaging Brexit
Swati Dhingra (FA) Nov 1, 2016
The right way to leave the EU.
Europe’s Ugly Future
Andrew Moravcsik (FA) Nov 1, 2016
Muddling through austerity.
The dark sides of QE: Backdoor socialisation, expropriated savers and asset bubbles
David Folkerts-Landau (DB Research) Nov 1, 2016
While European central bankers commend themselves for the scale and originality of monetary policy since 2012, this self-praise is increasingly unwarranted. The reality is that since Mr Draghi’s infamous “whatever it takes” speech in 2012, the eurozone has delivered barely any growth, the worst labour market performance among industrial countries, unsustainable debt levels, and inflation far below the central bank’s own target. While the positive case for European Central Bank intervention is weak at best, the negative repercussions are becoming overwhelming. This paper outlines the five darker sides to current monetary policy.
Theresa May’s tough test in India
Anton Spisak (FT) Nov 2, 2016
The British prime minister must prove her intentions are more than loud rhetoric.
China’s corporate governance standards fall
Steve Johnson (FT) Nov 2, 2016
Investment consultant warns of ‘disaster’ if country is included in benchmark index.
China’s magnetic force loses its pull
Jamil Anderlini (FT) Nov 2, 2016
Asian nations are likely to prefer the US as long as it supports peace and free trade.
Why Deutsche Bank’s troubles should worry us
Robert J. Samuelson (WP) Nov 2, 2016
At worst, the German bank’s failure would cause a global recession.
Emerging Europe: Mostly Growing, but Questions Remain About Medium-Term Growth
IMF News Nov 2, 2016
Solid growth in most of the region, CIS emerging from recession. But sustaining current growth requires further structural reforms. Better tax administration, public investment can free up 2-4 percent of GDP in extra resources.
What Canada Can Teach Post-Brexit Britain
Clive Crook (Bloomberg View) Nov 2, 2016
How to thrive next to a big neighbor.
We're More Productive Than We Think
Barry L Ritholtz (Bloomberg View) Nov 2, 2016
Technology has raced ahead of the tools we have for measuring economic output.
Saudi Arabia's Bond Success Hides Its Financial Peril
Amir Ali Handjani (Amir Ali Handjani) Nov 2, 2016
Budget deficits are soaring. Cash reserves are dwindling. And a young population is looking for change.
Big Danger at the Lower Bound
Kenneth Rogoff (Project Syndicate) Nov 2, 2016
Markets nowadays are fixated on how high the US Federal Reserve will raise interest rates in the next 12 months. This is dangerously shortsighted: the real concern ought to be how far it could cut rates in the next deep recession.
How Much Europe Do Europeans Need?
Joschka Fischer (Joschka Fischer) Nov 2, 2016
It is absurd to think that Europe’s historic nation-states are an answer to the globalized realities of the twenty-first century. The most important global decisions in this century will not be made democratically in Europe or individually in European capitals, but unilaterally in China or elsewhere.
A Perfectly Crazy Idea for the IMF
Ugo Panizza (Project Syndicate) Nov 2, 2016
Rather than count on the IMF to fulfill its mandate of protecting them from liquidity crises, emerging economies self-insure by accumulating large stockpiles of international reserves – resources that could be used to fund domestic needs. If member countries won't go to the Fund, the Fund should go to its member countries.
The BoE’s balancing act will soon become harder
FT View Nov 3, 2016
The choice to allow a period of above target inflation is the right one.
Big Oil Slowly Adapts to a Warming World
Clifford Krauss (NYT) Nov 3, 2016
Major oil and gas companies, facing future loss of demand for their products as a result of climate change policies, search for new strategies.
EU-Canada Trade Deal Signed, Overcoming Hurdles in Belgium
Bridges, Volume 20, Number 37 Nov 3, 2016
Leaders from the EU and Canada signed the Comprehensive Economic and Trade Agreement (CETA) on Sunday, following several weeks of talks to win the required backing of all 28 EU member states.
US Trade Officials Prepare for a Post-Election Landscape on TPP
Bridges, Volume 20, Number 37 Nov 3, 2016
With less than one week remaining until US voters go to the polls, officials both from the current Obama administration as well as from other Trans-Pacific Partnership (TPP) countries are ramping up their efforts to build support for ratifying the 12-country pact.
Countries Report Steady Progress on Implementing Tariff Cuts on ICT Goods
Bridges, Volume 20, Number 37 Nov 3, 2016
A group of WTO members who agreed last year to eliminate duties on a series of information and communication technology (ICT) goods are making steady progress in doing so, sources say, with three-quarters of participants already having enacted their new commitments
US Should Support China’s Inclusion in the Trade in Services Agreement
Sean Miner (PIIE) Nov 3, 2016
The negotiations for the Trade in Services Agreement (TiSA) involving 23 members of the World Trade Organization (WTO) have made significant progress, entering into their 21st round this week. So this would be a prime time for the United States to publicly state its support for China’s inclusion.
Will (Hard) Brexit Be Defeated by the Spirit of Magna Carta?
Jacob Funk Kirkegaard (PIIE) Nov 3, 2016
A fresh cloud of uncertainty hangs over Britain’s negotiations to leave the European Union now that the UK High Court has ruled that the government of Prime Minister Theresa May must seek parliamentary approval before the talks can begin.
India, China face trade choices
Dan Steinbock (WFR) Nov 3, 2016
In the coming years, China and India must decide whether their bilateral ties will be based on economic cooperation, political facilitation and strategic trust – or economic walls, political barriers and strategic containment.
What Rising Bond Yields Are Trying to Tell Us
Mark Gilbert (Bloomberg View) Nov 3, 2016
An unsettled U.S. election, rising inflation and new central bank policies give markets plenty to worry about.
A Post-Brexit Investment Primer
Christopher Smart (Project Syndicate) Nov 3, 2016
There was a time when businesses eager to expand into Europe planted their flag first in the UK, owing to its welcoming logistical and regulatory environment and automatic access to the EU’s 500 million people. After Brexit, foreign firms in a wide range of sectors will have to rethink their investment strategies.
Can Lebanon Escape the Resource Curse?
Nasser Saidi (Project Syndicate) Nov 3, 2016
Now that Lebanon, after two and a half years, finally has a president, the country can turn its attention to exploiting its hydrocarbon reserves. But policymakers must be mindful of the risks ahead – and build the governance institutions needed to manage fossil-fuel wealth properly.
An Agenda for Global Fiscal Activism
Jim O'Neill (Project Syndicate) Nov 3, 2016
The British government, along with the next US president, should broaden the definition of fiscal activism beyond domestic infrastructure investment to include global development more generally. Without thriving export markets, British and American attempts to rebalance their economies will be in vain.
As the global disinflation shock turns
Bruce Kasman and Joseph Lupton (VoxEU) Nov 3, 2016
Over the past two years, a significant disinflationary impulse has dampened nominal activity around the world. As this disinflationary impulse fades, however, both nominal and real growth should normalise. Indeed, as this column highlights, the latest signs show inflation and inflation expectations rising, profits stabilising, and capital expenditure inching up. Over the past two years, a significant disinflationary impulse has dampened nominal activity around the world. As this disinflationary impulse fades, however, both nominal and real growth should normalise. Indeed, as this column highlights, the latest signs show inflation and inflation expectations rising, profits stabilising, and capital expenditure inching up.
Public debt and private investment in China
Yi Huang, Marco Pagano and Ugo Panizza (VoxEU) Nov 3, 2016
High levels of public debt are correlated with lower economic growth across countries, but questions remain about whether this relationship is causal. Using Chinese data, this column explores whether increasing public debt crowds out private investment. City-level investment ratios are found to be negatively correlated with local government debt for private manufacturing firms, but not for state-owned or foreign-owned manufacturers. This suggests that as well as the short-term benefits of fiscal stimulus, there might also be negative longer-term effects, such as the crowding out of more efficient firms. High levels of public debt are correlated with lower economic growth across countries, but questions remain about whether this relationship is causal. Using Chinese data, this column explores whether increasing public debt crowds out private investment. City-level investment ratios are found to be negatively correlated with local government debt for private manufacturing firms, but not for state-owned or foreign-owned manufacturers. This suggests that as well as the short-term benefits of fiscal stimulus, there might also be negative longer-term effects, such as the crowding out of more efficient firms.
Markets prepare for a vote that makes Brexit look basic
Gillian Tett (FT) Nov 4, 2016
The choice of Hillary Clinton vs Donald Trump seems binary but the risks are complex.
A Brilliant History of Technology
Stephen Budiansky (WSJ) Nov 4, 2016
Why are spun fibers are strong? Why do most screws have right-hand threads? And why are the wheels on Conestoga wagons so very big? Answers to all these and more in “Why the Wheel Is Round” by Steven Vogel.
The Italian-German Banking Disease
Thomas Mayer (Globalist) Nov 4, 2016
Economically, Italy and Germany seem worlds apart. Why then are the two countries’ banks both facing a deep crisis?
Populism for the Rich
Ian Buruma (Project Syndicate) Nov 4, 2016
Modern populism is often described as a new class war between the beneficiaries of a globalized world and those who feel left behind. But the newly rich are as important a force in the rise of populism as the poorer and less educated people who feel neglected by the elites.
Is It Time to Abandon GDP?
Edoardo Campanella (Project Syndicate) Nov 4, 2016
Like many great inventions, gross domestic product has been used in ways that its creators never intended and might not approve. Given that it misses so much that contributes to human wellbeing – and excludes even more – why do we continue to rely on it as our primary welfare indicator?
Wealth inequality in childhood
Simon Boserup, Wojciech Kopczuk and Claus Kreiner (VoxEU) Nov 4, 2016
Economists normally study wealth formation and inequality among the adult population, but some people already possess economic resources in early childhood. This column uses data from Denmark to examine childhood wealth and the role of wealth transfers early in life. A main result is that wealth inequality starts as early as childhood. Although overall wealth levels in childhood are low, they are better predictors of wealth in adulthood than parental wealth. Economists normally study wealth formation and inequality among the adult population, but some people already possess economic resources in early childhood. This column uses data from Denmark to examine childhood wealth and the role of wealth transfers early in life. A main result is that wealth inequality starts as early as childhood. Although overall wealth levels in childhood are low, they are better predictors of wealth in adulthood than parental wealth.
Egypt Averts Economic Collapse, for Now
NYT Nov 5, 2016
The recent moves are important, but will the country's poor be able to hang on until changes are seen?
The growth gains from fighting tax evasion
Emmanuele Bobbio (VoxEU) Nov 5, 2016
Tax evasion imposes substantial costs on economies around the world. Beyond equity concerns, it erodes the tax base, with indirect effects on public investment and service provision. This column uses a model calibrated on the Italian economy to assess the direct and indirect effects of tax evasion on economic growth. Enforcing taxes would force small businesses to innovate, putting pressure on larger businesses and clearing the market of poorly performing small firms. Tackling tax evasion is thus important not only for equity reasons, but also for efficiency. Tax evasion imposes substantial costs on economies around the world. Beyond equity concerns, it erodes the tax base, with indirect effects on public investment and service provision. This column uses a model calibrated on the Italian economy to assess the direct and indirect effects of tax evasion on economic growth. Enforcing taxes would force small businesses to innovate, putting pressure on larger businesses and clearing the market of poorly performing small firms. Tackling tax evasion is thus important not only for equity reasons, but also for efficiency.
China's Gift for the Next President
Tom Orlik (Bloomberg View) Nov 6, 2016
The next global financial crisis could be made in Asia.
How to Turn India's Good Tax Bad
Mihir Sharma (Bloomberg View) Nov 6, 2016
Too many layers will undermine the benefits of a nationwide GST.
After Brexit, further integration is needed to save the EU
Sylvie Goulard (FT) Nov 7, 2016
Britain’s departure is an opportunity to address the continent’s challenges.
Brexit raises the stakes for the EU’s 27 remaining members
Tony Barber (FT) Nov 7, 2016
A revised regional process will prove essential since the alternative would be worse.
Egypt: two steps forward
Dan Bogler (FT) Nov 7, 2016
Investors must weigh attractive yields against the risk of social turmoil.
Tracking China’s Service Sector
Sean Miner (PIIE) Nov 7, 2016
China’s service sector comes under frequent scrutiny in part because it is notoriously hard to track, with many indicators only coming quarterly or even annually, with significant lag times.
How Large Is Public Procurement in Developing Countries?
Simeon Djankov, Asif Islam and Federica Saliola (VoxEU) Nov 7, 2016
How large is the share of public procurement to GDP in middle-income and low-income countries? If sizable, can public procurement be used as a policy tool to make markets more competitive, and thus improve the quality of government services? Can it be used to induce innovation in firms?
The Last, Best Hope for a Good Trade Deal
Ramesh Ponnuru (Bloomberg View) Nov 7, 2016
If the Trans-Pacific Partnership doesn’t pass in the next few weeks, a vocal minority will triumph over the national interest.
Triangulating Brexit
Daniel Gros (Project Syndicate) Nov 7, 2016
More than 100 days after the UK voted narrowly to leave the EU, it remains far from clear what arrangements will regulate cross-Channel economic relations after Brexit. In terms of minimizing the costs to both sides, however, the goals of the coming negotiations should be clear to all.
Germany needs to do some straight talking with China
David Folkerts-Landau (DB Research) Nov 7, 2016
It was obvious that the Chinese government was not amused when, in light of the ever-expanding list of German technology companies being bought up by Chinese investors, the German Minister of Economic Affairs Sigmar Gabriel spoke of the lack of reciprocation in Chinese investment conditions for German companies. According to press reports, in the first half of this year alone, Chinese companies invested at least EUR 8 billion in German companies.
Know your facts: Poverty numbers
José Cuesta, Mario Negre and Christoph Lakner (VoxEU) Nov 7, 2016
The percentage of people living in extreme poverty around the world has fallen by more than half over the past three decades. But polls show that most people are not only ignorant of this fact, but believe that poverty has increased. This column explores progress towards ending global poverty by 2030, the first of the UN’s Sustainable Development Goals. Poverty figures have fallen around the world since 1990, and there is a broad consensus on the policies needed for further reductions. Eradicating global poverty is achievable, but it is dependent on global and domestic political cooperation. The percentage of people living in extreme poverty around the world has fallen by more than half over the past three decades. But polls show that most people are not only ignorant of this fact, but believe that poverty has increased. This column explores progress towards ending global poverty by 2030, the first of the UN’s Sustainable Development Goals. Poverty figures have fallen around the world since 1990, and there is a broad consensus on the policies needed for further reductions. Eradicating global poverty is achievable, but it is dependent on global and domestic political cooperation.
Resiliency of macroprudential frameworks
Domenico Lombardi and Pierre Siklos (VoxEU) Nov 7, 2016
After the 2008 Global Crisis, there has been progress towards a system-wide regulatory architecture that includes a national macroprudential authority. This column describes a ‘capacity indicator’ that measures the state of macroprudential policies worldwide, including the features policymakers believe constitute a successful macroprudential policy regime. Eventually this index may be used to establish whether these macroprudential policy innovations have been successful. After the 2008 Global Crisis, there has been progress towards a system-wide regulatory architecture that includes a national macroprudential authority. This column describes a ‘capacity indicator’ that measures the state of macroprudential policies worldwide, including the features policymakers believe constitute a successful macroprudential policy regime. Eventually this index may be used to establish whether these macroprudential policy innovations have been successful.
A temporary bail-in to stabilize weak eurozone banks
Adam Lerrick (AEI) Nov 7, 2016
The temporary conversion of debt holders to shareholders will recapitalize weak eurozone banks without taxpayer money. The increase in the bank's equity capital is permanent even if the bail-in of creditors is temporary. Small retail investors can be fully protected while providing equal treatment for all investors.
New president has an economic in-tray full of problems
Martin WOlf (FT) Nov 8, 2016
The US system has its strengths but still shows scars from the Great Recession.
Lessons from the Mozambique meltdown
David Pilling Nov 8, 2016
Advice is easy to give and hard to follow. But, above all, don’t steal the cash.
How New Tech Will Remake Tomorrow’s Global Economy
IMF News Nov 8, 2016
Powerful and useful artificial intelligence will cause fundamental changes. Technology cannot replace certain jobs. We need problem identification and problem solving, group work, and creativity.
Brexit Feels Like a Very British Coup
Mark Gilbert (Mark Gilbert) Nov 8, 2016
Investors tend to shun divided countries. Britain needs to tread carefully.
Britain's Empire Strikes Back
Mihir Sharma (Bloomberg View) Nov 8, 2016
Free trade won't be an option without freer labor.
Brexit’s Doom Spirals
Harold James (Project Syndicate) Nov 8, 2016
Financial markets are giving a thumbs-down to Brexit, and they are right to do so. But because it is finance, rather than democratic civil society, that is pushing back against the UK’s decision to leave the EU, the Brexit debate will grow more bitter, and the fallout will become more severe.
The Evolving Independent Economy
Laura Tyson and Jacques Bughin (Project Syndicate) Nov 8, 2016
New digital platforms are helping to drive a shift away from traditional business models to new arrangements that rely on independent workers. Whether this system is actually good for workers, employers, and economies will depend on how all of the relevant actors approach the transition.
Diverging Eurozone household debt patterns: The role of institutions
Olympia Bover, Jose Maria Casado, Sónia Costa, Philip Du Caju, Yvonne McCarthy, Eva Sierminska, Panagiota Tzamourani, Ernesto Villanueva and Tibor Zavadil (VoxEU) Nov 8, 2016
Household micro-data reveal striking differences in secured debt holdings across Eurozone countries. This column presents new evidence on the role of household characteristics and country institutions in accounting for the cross-country patterns observed. In countries with lengthier asset repossession periods, young or low-income households face higher borrowing costs, leading to a lower probability of holding mortgages. Household micro-data reveal striking differences in secured debt holdings across Eurozone countries. This column presents new evidence on the role of household characteristics and country institutions in accounting for the cross-country patterns observed. In countries with lengthier asset repossession periods, young or low-income households face higher borrowing costs, leading to a lower probability of holding mortgages.
Saving China’s stock market
Yi Huang, Jianjun Miao and Pengfei Wang (VoxEU) Nov 8, 2016
The Chinese Shanghai Stock Exchange Composite Index dropped by a third in mid-2015, wiping out billions in share value. One of the responses of the Chinese government was to directly participate in the stock market. This column assesses the costs and benefits of this intervention, finding that the resulting gains amounted to about 5% of Chinese GDP. The value was created not just from increased equity and investor confidence, but also from increased liquidity and reduced probability of default for listed firms. The Chinese Shanghai Stock Exchange Composite Index dropped by a third in mid-2015, wiping out billions in share value. One of the responses of the Chinese government was to directly participate in the stock market. This column assesses the costs and benefits of this intervention, finding that the resulting gains amounted to about 5% of Chinese GDP. The value was created not just from increased equity and investor confidence, but also from increased liquidity and reduced probability of default for listed firms.
Donald Trump’s victory challenges the global liberal order
FT View Nov 9, 2016
There are few reasons to expect the president will be different from the candidate.
Mexico takes the brunt of US election result
Steve Johnson (FT) Nov 9, 2016
Majority of emerging market assets also suffer.
China Bullies Hong Kong
NYT Nov 9, 2016
Beijing’s tightening hand is undermining Hong Kong’s enviable economic model.
Economic Snapshot for Latin America
Focus Economics Nov 9, 2016
Recession persists but signs of improvement emerge.
German Council of Economic Experts’ view of ECB policy: Results of the CFM–CEPR Survey
Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon and Ricardo Reis (VoxEU) Nov 9, 2016
A recent report by the German Council of Economic Experts argues that the current monetary policy of the ECB is no longer appropriate and is masking structural problems in Eurozone countries. The November 2016 Centre for Macroeconomics and CEPR expert survey invited views on the report. More than three-quarters of respondents disagree that ECB monetary policy should become less accommodating, and respondents also disagree that ECB policy is masking structural reforms. The panel is divided, however, on whether ECB policy is making implementation of structural reforms less likely. A recent report by the German Council of Economic Experts argues that the current monetary policy of the ECB is no longer appropriate and is masking structural problems in Eurozone countries. The November 2016 Centre for Macroeconomics and CEPR expert survey invited views on the report. More than three-quarters of respondents disagree that ECB monetary policy should become less accommodating, and respondents also disagree that ECB policy is masking structural reforms. The panel is divided, however, on whether ECB policy is making implementation of structural reforms less likely.
Modi’s swift clampdown on India’s black money
FT View Nov 10, 2016
The move to combat illicit cash hoards shows a capacity for more reform.
Prepare for a reversal of monetary rule under President Trump
Gillian Tett (FT) Nov 10, 2016
Historians may come to see 2016 as an economic policy inflection point.
In China-U.S. Trade War, Trump Would Have Weapons
Keith Bradsher (NYT) Nov 10, 2016
If he chooses, the new president could move on steel to back up his campaign rhetoric. China has fewer options but could aim at jetliners and carmakers.
The Genesis of Prosperity
Richard Vedder (WSJ) Nov 10, 2016
What brought about the Great Enrichment? And why did it start in England? It had a culture that embraced change and scientific inquiry.
Any Relief for the Monetary-Policy Guinea Pigs?
Amy Falls (WSJ) Nov 10, 2016
Declining returns on investment deplete the coffers of our incubators of science and technology.
US Election: World Prepares for New Era Following Surprise Trump Win
Bridges, Volume 20, Number 38 Nov 10, 2016
Donald Trump will be the 45th president of the United States, winning the Electoral College vote in the world’s largest economy. The outcome – which has surprised pollsters, policy analysts, and even campaign officials themselves – has shaken global markets, as both the US and the international community begin to react to new leadership in Washington that promises to break with decades of previous policies.
RCEP Participating Countries Call for Swift Conclusion of Negotiations
Bridges, Volume 20, Number 38 Nov 10, 2016
Negotiations for the 16-country Regional Comprehensive Economic Partnership (RCEP) are increasingly making progress towards crafting a future trade and investment deal, officials say, though whether talks will be concluded this year as previously envisioned is less clear.
Beyond Brexit: Is Unilateral Tariff Reduction Really Such a Crazy Idea?
Lee Crawfurd (CGD) Nov 10, 2016
If the UK leaves the EU (as unfortunately seems most likely), the single market, and customs union, it will need to decide on a new schedule of tariffs for imported goods from both Europe and other countries. One of the options being touted is the unilateral removal of tariffs on all goods, as Hong Kong and Singapore do. There are three main possible objections to this approach based on UK interests, and one for developing countries, none of which are entirely convincing.
India Prime Minister Enacts Bold Policy to Cut Down on “Black Money”
Divyanshi Wadhwa, Anit Mukherjee and Michael Pisa (CGD) Nov 10, 2016
Prime Minister Narendra Modi’s announced a bold measure on Wednesday to reduce the role of unaccounted for cash or “black money” in the country’s economy by “de-monetizing” higher-denomination currency notes. The new policy bans the use of 500 rupee and 1,000 rupee currency notes. While this measure may have the positive (though potentially temporary) effect of forcing illicit activity out of the regulated economy, the process could be disorderly, with the poorest members of society bearing the brunt of the disruption.
Kenya Gleams on Africa's Bright Side
Matthew A Winkler (Bloomberg View) Nov 10, 2016
The oil-price crash clobbered the continent, but a few economies have made it work for them.
Japan Shuts Down Its Monetary Lab
Noah Smith (Bloomberg View) Nov 10, 2016
The central bank couldn't hit its 2 percent inflation target. It won't be the first to stop experimenting.
Who Wins a Trade War? China
Michael Schuman (Bloomberg View) Nov 10, 2016
Starting one will encourage the regime's own nationalist agenda.
How universities boost economic growth
Anna Valero and John Van Reenen (VoxEU) Nov 10, 2016
Growth in higher education has been driven by the view that human capital is essential for economic and social progress. This column uses a comprehensive international dataset covering 78 countries to show that on average, a 10% increase in the number of universities (roughly adding one more university to the average region in the data) increases a region’s income by 0.4%, with additional effects spilling over to other regions within the same country. In the UK context, the benefits of university expansion are likely to far outweigh the costs. Growth in higher education has been driven by the view that human capital is essential for economic and social progress. This column uses a comprehensive international dataset covering 78 countries to show that on average, a 10% increase in the number of universities (roughly adding one more university to the average region in the data) increases a region’s income by 0.4%, with additional effects spilling over to other regions within the same country. In the UK context, the benefits of university expansion are likely to far outweigh the costs.
Rating agencies as consultants: The potential for bias
Ramin Baghai and Bo Becker (VoxEU) Nov 10, 2016
Excessively high credit ratings are thought to have contributed to the Global Crisis. A key concern is the conflict of interest that arises due to rating agencies being mainly paid by the companies whose securities they rate. This column uses Indian data to explore how the commercial ties between issuers and raters affect ratings. The results indicate a fee-driven conflict of interest, with an upward bias in the ratings of issuers whose fees are important to an agency. This highlights the potential benefits for the financial system of circumscribing rating agency consulting. Excessively high credit ratings are thought to have contributed to the Global Crisis. A key concern is the conflict of interest that arises due to rating agencies being mainly paid by the companies whose securities they rate. This column uses Indian data to explore how the commercial ties between issuers and raters affect ratings. The results indicate a fee-driven conflict of interest, with an upward bias in the ratings of issuers whose fees are important to an agency. This highlights the potential benefits for the financial system of circumscribing rating agency consulting.
Trouble ahead for the global economy
Desmond Lachman (AEI) Nov 10, 2016
The incoming US administration would be well advised to closely monitor international economic developments since a perfect international economic storm could be brewing that could have serious consequences for the US economy. A dangerous combination of a high global debt level, the gross mispricing of global credit risk, weak banks of systemic importance, and global economic fault lines make it all too likely that the world is headed for a global economic and financial crisis. Hopefully the incoming US administration will find a way to back off from the anti-globalization rhetoric of the presidential campaign because resorting to more protectionist policies is the last thing a fragile global economy now needs.
Financial Crises and Policy Responses: A Market-Based View from the Shadow Financial Regulatory Committee, 1986–2015
Robert Litan (AEI) Nov 10, 2016
This is an unusual book. It is the history of both an organization—the Shadow Financial Regulatory Committee—and an epoch in the history of finance, mostly in the United States: 1986 to 2015.
What Is Lost by Burying the Trans-Pacific Partnership?
Jackie Calmes (NYT) Nov 11, 2016
Few in Washington will mourn the trade pact, but it would have set precedents in digital commerce, intellectual property rights, human rights and environmental protection.
Lesson from Brazil’s Populist Bust
Monica de Bolle (PIIE) Nov 11, 2016
Now that the American presidential election has produced a result that seemed impossible to many experts, driven by a campaign termed “populist” by the media, what is the likely economic fallout for the rest of the world?
Can the TPP survive without the United States?
Mireya Solís (Brookings) Nov 11, 2016
The election of Donald Trump seems to have sealed the fate of the Trans-Pacific Partnership, says Mireya Solís, but a relaunched version would have significant value for the remaining nations, particularly Japan.
U.K. Shouldn't Weaponize Its Overseas Aid Budget
Mark Gilbert (Bloomberg View) Nov 11, 2016
The government should resist the temptation to commercialize its altruism.
Time to Save the World, Mr. Trump
Narayana Kocherlakota (Bloomberg View) Nov 11, 2016
Radical measures are needed to address a global economic malaise.
The Secret of Dubai’s Success
Yasser Al-Saleh (Project Syndicate) Nov 11, 2016
As governments across the Middle East try to wean themselves off natural resources and build diversified, resilient economies, they should take some lessons from Dubai. In less than a generation, the city-state has spectacularly transformed itself into a major center for investment, commerce, and high-end culture.
Can Global Capitalism Be Saved?
Alexander Friedman (Project Syndicate) Nov 11, 2016
The politics of economic anxiety has now driven the electorates of the UK and the US into the hands of populists, and more countries' voters are sure to follow. Today’s slowing growth and anti-establishment backlash is not some “new normal”; in fact, it harks back to an “old normal,” last experienced in the 1930s.
The Trump Shock in Latin America
Jorge G. Castañeda (Project Syndicate) Nov 11, 2016
Latin American countries should disabuse themselves of the hope that Donald Trump did not mean what he said during his campaign, that his policy proposals were mere rhetoric, and that he can't possibly implement most of his agenda in any case. He can, and it's naive to think otherwise.
Why the media got it so wrong on Trump and Brexit
Richard Sambrook (EFR) Nov 11, 2016
In the aftermath of Donald Trump’s election, the US media has embarked on a flurry of self recrimination. Much of what they discuss applies equally to the UK media and the problems with news coverage of the EU referendum.
Electoral accountability and the natural resource curse
Amrita Dhillon, Pramila Krishnan, Manasa Patnam and Carlo Perroni (VoxEU) Nov 11, 2016
The ‘curse’ of natural resources on economic development has been well documented, but there is no consensus on its underlying causes. Exploiting the formation of new Indian states in 2001, this column shows that the effects of state breakup on local economies differ systematically across natural resource-rich and resource-poor areas, in line with the spatial distribution of natural resources within states. The relationship between resource abundance and economic outcomes flows, at least in part, through a political channel. The ‘curse’ of natural resources on economic development has been well documented, but there is no consensus on its underlying causes. Exploiting the formation of new Indian states in 2001, this column shows that the effects of state breakup on local economies differ systematically across natural resource-rich and resource-poor areas, in line with the spatial distribution of natural resources within states. The relationship between resource abundance and economic outcomes flows, at least in part, through a political channel.
Public support for the euro
Felix Roth, Lars Jonung and Felicitas Nowak-Lehmann (VoxEU) Nov 11, 2016
The euro as a common currency has recently been the subject of harsh criticism by economists from both sides of the Atlantic, including claims that citizens in some Eurozone countries are turning against the it. This column argues that, in fact, the euro currently enjoys comfortable popular support in each of the 12 original member states of the Eurozone and that potential upcoming referenda in any of these countries do not appear to pose a threat to the currency. In contrast, popular support for the euro has declined sharply in non-Eurozone EU member states since the recent crisis, with the UK standing out as the country with the most negative view. The euro as a common currency has recently been the subject of harsh criticism by economists from both sides of the Atlantic, including claims that citizens in some Eurozone countries are turning against the it. This column argues that, in fact, the euro currently enjoys comfortable popular support in each of the 12 original member states of the Eurozone and that potential upcoming referenda in any of these countries do not appear to pose a threat to the currency. In contrast, popular support for the euro has declined sharply in non-Eurozone EU member states since the recent crisis, with the UK standing out as the country with the most negative view.
U.S. Monetary Policy from an International Perspective
Stanley Fischer (BoG FRB) Nov 11, 2016
How U.S. monetary policy affects the global economy and how foreign economic events affect U.S. monetary policy.
Fund Chief Capitalizes on China’s ‘Split Personality’ Economy
Michael Schuman (NYT) Nov 12, 2016
Weijian Shan of the fund management firm PAG is focusing his money on companies that can benefit from China’s rising consumerism.
In Murky Russia, One Investor Finds Value in Thinking Small
Andrew E. Kramer (NYT) Nov 12, 2016
Aleksei Kozlov said the shifting risk picture has prompted his private equity firm to invest in smaller businesses not so easily seized by the state.
In Brazil, Inward-Looking Investors Eye Opportunities Outside
Vinod Sreeharsha (NYT) Nov 12, 2016
Spurred by the country’s worst recession in decades, some investors are looking to Silicon Valley, India and beyond.
Canada Is in an Economic Slump, but Some Investors Are Hopeful
Ian Austen (NYT) Nov 12, 2016
For a nation dependent on natural resources, the global downturn around oil and other commodities hurt, but Prime Minister Justin Trudeau’s plan to spur growth has buoyed optimism.
The effect of migration on foreign direct investment
Konrad Burchardi, Thomas Chaney and Tarek Hassan (VoxEU) Nov 12, 2016
The economic effects of the unprecedented levels of international migrations over the past few years are at the centre of political debates about immigration policy. This column evaluates the causal effect of migration on foreign direct investment using immigration patterns to the US going back to the 19th century. Foreign direct investment is found to follow the paths of historical migrants as much as it follows differences in productivity, tax rates, and education. The results suggest a mechanism of information flow facilitation, and that the effect of ancestry on foreign direct investment is very long-lasting. The economic effects of the unprecedented levels of international migrations over the past few years are at the centre of political debates about immigration policy. This column evaluates the causal effect of migration on foreign direct investment using immigration patterns to the US going back to the 19th century. Foreign direct investment is found to follow the paths of historical migrants as much as it follows differences in productivity, tax rates, and education. The results suggest a mechanism of information flow facilitation, and that the effect of ancestry on foreign direct investment is very long-lasting.
Consequences of Brexit and Trumpit for the multinational car industry
Keith Head and Thierry Mayer (VoxEU) Nov 12, 2016
Unlike technical progress in transport or communication technologies, regional trade agreements are political decisions that can be reversed, as Brexit and the campaign promises of President-elect Donald Trump to raise tariffs on imports from Mexico demonstrate. This column analyses the consequences for the car industry of these two examples of the dismantling of an RTA. Car production would fall significantly in the UK under Brexit and in Mexico under ‘Trumpit’ due to a combination of tariff-induced sales losses and increased plant costs. Unlike technical progress in transport or communication technologies, regional trade agreements are political decisions that can be reversed, as Brexit and the campaign promises of President-elect Donald Trump to raise tariffs on imports from Mexico demonstrate. This column analyses the consequences for the car industry of these two examples of the dismantling of an RTA. Car production would fall significantly in the UK under Brexit and in Mexico under ‘Trumpit’ due to a combination of tariff-induced sales losses and increased plant costs.
Donald Trump’s dangerous delusions on trade
FT View Nov 13, 2016
The US may cede its central role in shaping the global trading system.
The end of the era of central bank independence
Wolfgang Munchau (FT) Nov 13, 2016
Trump and May will start subverting system by appointing politically compliant governors.
How Dodd-Frank Led to More Mayhem in Africa
Tate Watkins (WSJ) Nov 13, 2016
A measure to curb violence from conflict minerals has caused militias to simply expand their looting.
Asia's Two Giants Still Have the Best Growth Stories
Noah Smith (Bloomberg View) Nov 13, 2016
China and India will power the global economy for the foreseeable future. Developed nations should give them plenty of help.
What America’s Economy Needs from Trump
Joseph E. Stiglitz (Project Syndicate) Nov 13, 2016
Donald Trump’s astonishing victory in the US presidential election has made one thing abundantly clear: too many Americans – particularly white male Americans – feel left behind. Unfortunately, he is unlikely to pursue the policy agenda his voters need.
Shock propagations in granular networks
Daisuke Fujii (VoxEU) Nov 13, 2016
Buyer-supplier networks in production processes play an important role in determining the pattern of shock propagations and aggregate fluctuations. This column provides empirical evidence on the structure of production networks and buyer-supplier sales comovements. A strong interdependence of sales growth is confirmed. In general, firms are more affected by their customers than suppliers. Manufacturing and wholesale sectors exhibit higher propagation factors while retail and service sectors exhibit lower propagation factors. Buyer-supplier networks in production processes play an important role in determining the pattern of shock propagations and aggregate fluctuations. This column provides empirical evidence on the structure of production networks and buyer-supplier sales comovements. A strong interdependence of sales growth is confirmed. In general, firms are more affected by their customers than suppliers. Manufacturing and wholesale sectors exhibit higher propagation factors while retail and service sectors exhibit lower propagation factors.
In Light of the Elections: Recession, Expansion, and Inequality
Olivier Blanchard (PIIE) Nov 14, 2016
Will the economic program of President-elect Donald Trump lead to a recession or to an expansion? Before the election, many predicted a recession. But last week, markets clearly predicted an expansion. Who is right? It is obviously hard to tell.
Why the New White House Should Love Power Africa
Todd Moss (CGD) Nov 14, 2016
We know very little about what a Trump administration will do about longstanding US efforts to combat global hunger, disease, and poverty. But here are five reasons Power Africa should appeal to a new White House team presumably focused on cutting waste and promoting business.
How President Trump Can Make Trade Policy More Inclusive, and More Fair
Kimberly Ann Elliott (CGD) Nov 14, 2016
President-elect Trump has a unique opportunity to, finally, make US trade policy more inclusive and fair, and he could start by getting our own house in order. From a domestic standpoint, it is not enough that trade agreements' net benefits are positive.
The U.K’s Brexit Paradox
Jamie Murray (Bloomberg View) Nov 14, 2016
A robust economy in Britain may encourage the EU to aim for a more punishing Brexit.
Italy's Chance to Buck the Brexit-Trump Trend
Therese Raphael (Bloomberg View) Nov 14, 2016
Prime Minister Renzi has a tough job convincing voters that his referendum will bring the change they crave.
China's Rising Prices Are a Sign of Trouble
Christopher Balding (Bloomberg View) Nov 14, 2016
A lesson in the central planner's dilemma.
What Trump Means for Interest Rates
Mohamed Aly El-Erian (Bloomberg View) Nov 14, 2016
The Fed's projections and the expectations of markets could converge.
Financing the Climate-Change Transition
Hans Joachim Schellnhuber, Christian Thimann & Axel Weber (Project Syndicate) Nov 14, 2016
Government funding alone cannot bring about a clean-energy economy, so the financial sector must help fill the gap. By redirecting capital flows toward proactive efforts to mitigate and adapt to climate change, financial institutions can protect client assets, while preserving the planet for future generations.
Private shareholders, governance rules, and central bank financial behaviour
Bernhard Bartels, Barry Eichengreen and Beatrice Weder di Mauro (VoxEU) Nov 14, 2016
Recent events have heightened concerns that central banks with private shareholders might differ in their financial behaviour from purely public central banks, perhaps focusing excessively on profits, dividends, and risks to their balance sheets. Using information on shareholding and new data on governance rules for 35 central banks, this column finds no significant difference in financial behaviour based on ownership, due, it would appear, to governance arrangements restraining policy toward private shareholders and, more generally, affecting central bank behaviour. Recent events have heightened concerns that central banks with private shareholders might differ in their financial behaviour from purely public central banks, perhaps focusing excessively on profits, dividends, and risks to their balance sheets. Using information on shareholding and new data on governance rules for 35 central banks, this column finds no significant difference in financial behaviour based on ownership, due, it would appear, to governance arrangements restraining policy toward private shareholders and, more generally, affecting central bank behaviour.
Financial globalisation and monetary policy effectiveness
Georgios Georgiadis and Arnaud Mehl (VoxEU) Nov 14, 2016
In theory, financial globalisation has ambiguous effects on monetary policy. It may dampen effectiveness, but it may also amplify it through exchange rate valuation effects. This column shows evidence that the latter effect has dominated since the 1990s. Financial globalisation has increased the output effect of a tightening in monetary policy by as much as 25%. One implication is that monetary policy transmission mechanisms have changed, with the exchange rate channel gaining importance at the expense of the interest rate channel. In theory, financial globalisation has ambiguous effects on monetary policy. It may dampen effectiveness, but it may also amplify it through exchange rate valuation effects. This column shows evidence that the latter effect has dominated since the 1990s. Financial globalisation has increased the output effect of a tightening in monetary policy by as much as 25%. One implication is that monetary policy transmission mechanisms have changed, with the exchange rate channel gaining importance at the expense of the interest rate channel.
Venezuela, a Failing State
William Finnegan (New Yorker) Nov 14, 2016
Once the richest country in South America, it now has the world’s highest inflation rate and is plagued by hunger and violent crime. How did this happen?
The global diffusion of ideas and its impact on productivity and growth
Francisco J. Buera and Ezra Oberfield (FRB Chicago Fed Letter) Nov 14, 2016
Economic growth often comes hand in hand with the growth of trade. However, according to quantitative models that rely on standard static mechanisms, the gains from trade are fairly small. This article introduces a model to study the diffusion of ideas across countries as a means of increasing productivity and provides a quantitative assessment of the role of trade in the transmission of knowledge.
The EU unwisely slides towards protectionism
FT View Nov 15, 2016
Changes to antidumping and anti-subsidy rules are a regressive step.
Nigeria: Delta blues
Anjli Raval and Maggie Fick (FT) Nov 15, 2016
President Buhari promised to reform the oil sector but has left many disappointed.
Three ways to make sense of the dollar in uncertain times
Barry Eichengreen (FT) Nov 15, 2016
Haven status and policies will determine prospects for the economy and currency.
Want America First? Try Free Trade
Thomas J. Bollyky and Edward Alden (NYT) Nov 15, 2016
The best way to advance the interests of American workers and consumers is to negotiate better and stronger international agreements.
Beyond Brexit: Smarter Labour Policy to Boost Trade, Productivity, and Welfare
Theodore Talbot and Caitlin McKee (CGD) Nov 15, 2016
Philip Hammond, Chancellor of the Exchequer, has assured people that post-Brexit labour policy will be about the “cream of the crop,” making sure that high-skilled workers won’t face excessive red tape or heavy-handed visa rules if they want to work in the UK. The “migration problem,” in Hammond’s words, is not with “computer professors, brain surgeons, or senior managers.” A migration policy built on that creaky premise misses at least three key points: gains from trade, mutual productivity, and huge welfare gains.
Trump could give new impetus to EU-China relations | Bruegel
Alicia García-Herrero and Jianwei Xu (Bruegel) Nov 15, 2016
It is too early to say what the Trump administration’s trade policy will look like – but a total cut-off from Asian partners is unlikely. It would harm the US economy, and offer China even more scope to cement its position in Asia. Nevertheless, with TPP and TTIP both looking unlikely, the EU should move fast to build relationships with China and ASEAN countries.
TPP Could Go Forward without the United States
Jeffrey J. Schott (PIIE) Nov 15, 2016
The election of Donald Trump has closed the door to consideration of the Trans-Pacific Partnership (TPP) during the lame duck session of Congress this year.
US Bilateral Trade Balances: A New Guide to Trade Policy?
Gary Clyde Hufbauer and Euijin Jung (PIIE) Nov 15, 2016
Trump proposes eliminating America’s $500 billion trade deficit through a combination of increased exports and reduced imports.
The World's Bond Vigilantes Are Back in the Saddle
Mark Gilbert (Bloomberg View) Nov 15, 2016
Rising government bond yields suggest the investment community has changed its mind on the economic outlook.
What It Will Take to Stop Globalization
Justin Fox (Bloomberg View) Nov 15, 2016
A trade war would threaten interconnectedness and could make the world poorer.
How Trump Could Spell Trouble for the Fed
Narayana Kocherlakota (Bloomberg View) Nov 15, 2016
The president could threaten the central bank's valuable independence.
Land Management is Crisis Management in Africa
Sofia Faruqi (Project Syndicate) Nov 15, 2016
Ethiopia’s political crisis is being driven partly by ethnic tensions and resentment against a small elite’s hold on the country’s wealth and power; but a deeper contributing factor is land management. It is an issue that much of the continent must confront through concerted community-based restoration efforts.
Straight Talk on Trade
Dani Rodrik (Project Syndicate) Nov 15, 2016
Economists' zeal to defend trade from its enemies has backfired. If the demagogues making nonsensical claims about trade are now getting a hearing – and, in the US and elsewhere, actually winning power – it is trade's cheerleaders who deserve at least part of the blame.
Ticket to Debtor's Prison
Daniel Altman (FP) Nov 15, 2016
If anyone can bankrupt the United States, Trump can.
US and EU immigration pressures in the long run
Craig McIntosh and Gordon Hanson (VoxEU) Nov 15, 2016
At first glance, the migration pressures on the EU and US appear similar, but recent history is not a reliable guide to future trends. This column uses demographic trends to predict that the US will experience a gradual decline in its newly arrived immigrant population, while the EU, ringed by nearby high-population-growth states, will see large increases in the stock of first-generation immigrants. As a result, US emphasis on strengthening borders and returning undocumented migrants may be misplaced. At first glance, the migration pressures on the EU and US appear similar, but recent history is not a reliable guide to future trends. This column uses demographic trends to predict that the US will experience a gradual decline in its newly arrived immigrant population, while the EU, ringed by nearby high-population-growth states, will see large increases in the stock of first-generation immigrants. As a result, US emphasis on strengthening borders and returning undocumented migrants may be misplaced.
Reforming mutual funds: A proposal to improve financial market resilience
Stephen Cecchetti and Kim Schoenholtz (VoxEU) Nov 15, 2016
A growing class of mutual funds – those that hold mostly illiquid assets – appear to be a potential source of systemic risk. This column discusses why, and argues that converting open-end mutual funds into exchange-traded funds could mitigate the problem. When markets are liquid, exchange-traded funds operate like open-end mutual funds; but should markets become illiquid, exchange-traded funds then operate like closed-end funds and face no run risk. A growing class of mutual funds – those that hold mostly illiquid assets – appear to be a potential source of systemic risk. This column discusses why, and argues that converting open-end mutual funds into exchange-traded funds could mitigate the problem. When markets are liquid, exchange-traded funds operate like open-end mutual funds; but should markets become illiquid, exchange-traded funds then operate like closed-end funds and face no run risk.
A secular trend away from public markets
FT View Nov 16, 2016
A Snap listing will not stop a general move towards private ownership.
Remake the union to heal Europe’s rifts
Nicolas Sarkozy (FT) Nov 16, 2016
The UK can then decide whether to ask its people if they want to rejoin the EU.
Trump win seen to force emerging market rate rises
Steve Johnson (FT) Nov 16, 2016
Tighter monetary policy expected in Mexico, Turkey and South Africa.
Post-Trump and Brexit, unions can help heal fractured societies
Michael Skapinker (FT) Nov 16, 2016
Collective bargaining can become a countervailing force once more.
The Entrepreneurial Way to 4% Growth
Carl J. Schramm (WSJ) Nov 16, 2016
Trump should set a goal: fix the business climate so a million Americans a year can start companies.
Hong Kong Needs a Champion
Anson Chan (Bloomberg View) Nov 16, 2016
Rule of law is threatened in Asia's pre-eminent financial center.
India's Great Rupee Fail
Mihir Sharma (Bloomberg View) Nov 16, 2016
Poor execution has dented the government's reputation for efficiency.
An Economic Ultimatum for the Arab World
Marwan Muasher (Project Syndicate) Nov 16, 2016
If Middle Eastern countries do not start making real progress on fundamental political and economic reforms, further regional turmoil is inevitable. With the region's decades-old rentier systems now at a breaking point, policymakers must begin the difficult, but not impossible, process of establishing new social contracts.
China and Germany: The Honeymoon Is Over
Klaus Larres (Diplomat) Nov 16, 2016
A visit to China by Germany’s economics minister highlighted a blunter approach to bilateral relations.
India's Surprise Currency Crackdown
K@W Nov 16, 2016
Who pays the price?
Diversity and economic development
Vincenzo Bove and Leandro Elia (VoxEU) Nov 16, 2016
There is much dispute over whether immigration is beneficial or detrimental to the host country, and any conclusions are often event-driven rather than evidence-based. This column explores evidence on how immigration affected economic development between 1960 and 2013 through its effect on the cultural and ethnic composition of the destination country. Cultural heterogeneity appears to have had a positive impact on economic development, and the positive effect of diversity seems to have been stronger in developing countries. There is much dispute over whether immigration is beneficial or detrimental to the host country, and any conclusions are often event-driven rather than evidence-based. This column explores evidence on how immigration affected economic development between 1960 and 2013 through its effect on the cultural and ethnic composition of the destination country. Cultural heterogeneity appears to have had a positive impact on economic development, and the positive effect of diversity seems to have been stronger in developing countries.
US and EM investors take opposing bets on Trump’s presidency
Mohamed El-Erian (FT) Nov 17, 2016
Favouring emerging markets over US assets might now be warranted, but risks remain.
India: Narendra Modi’s bonfire of the rupees
Amy Kazmin (FT) Nov 17, 2016
A debate rages over the effect of the prime minister’s crackdown on ‘black’ money.
How Donald Trump Could Remake Global Trade With a Pen
Haley Sweetland (Time) Nov 17, 2016
It’s too early to tell whether Trump will make good on his campaign vows to renegotiate or withdraw from trade deals and slap hefty tariffs on U.S. partners. But the law gives him broad latitude to fulfill his pledges.
China Picks Up the U.S. Trade Fumble
WSJ Nov 17, 2016
Beijing advances a deal to draw 15 countries further into its orbit.
As New "Trump" Reality Sinks In, Questions Grow Over Future Trade Policy
Bridges, Volume 20, Number 39 Nov 17, 2016
Just over one week after the news that Donald Trump will serve as the next president of the United States, key trading partners are working to prepare for the change in leadership in the world’s largest economy, even as many of the incoming official’s policy priorities remain unclear.
UK Scopes Out Foreign Trade Options As Legal Challenges Continue on "Brexit"
Bridges, Volume 20, Number 39 Nov 17, 2016
UK officials have continued exploring options for deepening ties with other trading powers in a post-"Brexit" world, as legal challenges continue on home soil regarding whether the government has the authority to launch exit talks with the European Union without first gaining parliamentary approval.
Level of G-20 Trade Restrictions Still a "Concern," WTO Warns
Bridges, Volume 20, Number 39 Nov 17, 2016
The level of trade restrictions being applied by members of the Group of 20 major advanced and emerging economies is still "worryingly high," the Geneva-based WTO cautioned late last week.
Why Trump Voters Should Love the TPP
Mihir Sharma (Bloomberg View) Nov 17, 2016
For the same reason America's competitors fear it.
Inclusive Growth Depends on Cities
Lamia Kamal-Chaoui and Amy Liu (Project Syndicate) Nov 17, 2016
The gains from economic growth are increasingly going to the very highest earners, and nowhere is this more true than in cities – the site of both opportunity and disparity. To reduce inequality, we should look to mayors from around the world who have devised local solutions that can be applied elsewhere.
Globalization’s Last Gasp
Barry Eichengreen (Project Syndicate) Nov 17, 2016
Determining causality in economics may be elusive, but in the case of world trade it is clear: slower growth is the result of slower global GDP growth, not the other way around. And slower growth in international flows of financial capital may be just what the global economy needs.
A Primer on the Dollar's Surge
Mohamed Aly El-Erian (Bloomberg View) Nov 17, 2016
Markets have moved rapidly to price in the prospects for higher growth and inflation after the election of Donald Trump.
What Is the Pound Telling Us?
Jim O'Neill (Project Syndicate) Nov 17, 2016
The British pound appears to be broadly undervalued relative to the currencies of its major trading partners, judging by its performance since the UK's Brexit referendum in June. But policymakers should acknowledge that a weakening pound is only helpful, not sufficient, for rebalancing the UK's economy.
The Many Faces of Malnutrition
Adebimpe Adebiyi (Project Syndicate) Nov 17, 2016
One in three people worldwide suffer from malnutrition, which includes chronic undernutrition, excessive weight, and obesity. In West Africa, where that rate is much higher, decisive government action is needed to break the vicious cycle of poor health and poor economic outcomes.
Nascent stock exchanges: Explaining success and failure
José Albuquerque de Sousa, Thorsten Beck, Peter van Bergeijk and Mathijs van Dijk (VoxEU) Nov 17, 2016
Well-developed and efficient financial markets are important contributors to the economic growth of developing economies. Unfortunately, many low- and middle-income countries lack liquid public capital markets. This column explores the performance of stock exchanges opened since 1975 across a sample of countries. A minimum number of listings and turnover in the first five years appear to be necessary conditions for success over the first two decades. Developing countries considering opening a stock exchange should ensure that there is sufficient interest from firms and investors. Well-developed and efficient financial markets are important contributors to the economic growth of developing economies. Unfortunately, many low- and middle-income countries lack liquid public capital markets. This column explores the performance of stock exchanges opened since 1975 across a sample of countries. A minimum number of listings and turnover in the first five years appear to be necessary conditions for success over the first two decades. Developing countries considering opening a stock exchange should ensure that there is sufficient interest from firms and investors.
A realistic proposal to end Greece’s debt overhang
Chris Marsh, Dominik Nagly, George Pagoulatos and Elias Papaioannou (VoxEU) Nov 17, 2016
It is now seven years since the Greek crisis began. As well as reflecting the chronic deficiencies of its own institutions, the failings in Greece also reflect substantial shortcomings in international institutions. This column argues that it is time for all sides to move on, and proposes a simple debt operation for Greece that can deliver debt sustainability with minimal adjustments to the ESM operating procedures. It is now seven years since the Greek crisis began. As well as reflecting the chronic deficiencies of its own institutions, the failings in Greece also reflect substantial shortcomings in international institutions. This column argues that it is time for all sides to move on, and proposes a simple debt operation for Greece that can deliver debt sustainability with minimal adjustments to the ESM operating procedures.
England prepares to leave the world
Neal Ascherson (LRB) Nov 17, 2016
‘If you believe you are a citizen of the world you are a citizen of nowhere.’ Mrs May will pass into folklore with that line, just as Mrs Thatcher is remembered for ‘There is no such thing as society.’ It’s her own Mad May Queen utterance. And yet the sentence reveals a lot. It comes out of a solid, unexamined nationalism.
The art of the trade deal: Priorities for policy
Derek Scissors (AEI) Nov 17, 2016
The language of the Trump campaign indicates the possibility of major changes in American trade policy. These changes should not focus on eliminating or drastically reducing the trade deficit, as the evidence shows this is unlikely to create jobs. Our biggest trade relationship, with China, has multiple problems. Currency manipulation wins attention but may be an outdated concern. Right now Chinese subsidies are blocking American exports and China is stealing intellectual property. The US should strongly consider retaliation in these areas. Both Americans who benefit from trade and US trade partners would be immensely reassured if the trade restrictions the Trump administration finds necessary are coupled with steps to encourage more trade. An example is seeking a free trade agreement with the United Kingdom.
China is No Longer Manipulating its Currency
C. Fred Bergsten (PIIE) Nov 18, 2016
US President-elect Donald Trump has vowed to instruct his Secretary of the Treasury to label China a currency manipulator on his first day in office, just as Republican presidential candidate Mitt Romney did in 2012.
Donald Trump and the future of globalization
Laurence Chandy and Brina Seidel (Brookings) Nov 18, 2016
The election of Donald Trump demands a reevaluation of the future of globalization and our earlier optimism that the open global economic order will endure. It is time to consider the possibility that a single politician could reverse decades of global trends.
Sky-High Monetary Policy
Stefan Gerlach (Project Syndicate) Nov 18, 2016
Years of low interest rates and quantitative easing have not restored growth to developed countries, and many observers lately have been calling on central banks to inject stimulus into economies directly. But do the rewards of “helicopter money” outweigh the risks?
A higher global risk premium and the fall in equilibrium real interest rates
Kevin Daly (VoxEU) Nov 18, 2016
There is an increasing consensus that global ‘excess saving’ has contributed to a reduction in equilibrium real interest rates. This implies a decline in yields of all assets including, but not restricted to, government bond yields. This column argues that since the turn of the century, the global economy has also been characterised by a rise in the yields on quoted equity, a feature for which the standard excess saving story cannot easily account. A separate explanation is that an increase in the global risk premium has increased the wedge between risk-free interest rates and the real required return on risky investments. There is an increasing consensus that global ‘excess saving’ has contributed to a reduction in equilibrium real interest rates. This implies a decline in yields of all assets including, but not restricted to, government bond yields. This column argues that since the turn of the century, the global economy has also been characterised by a rise in the yields on quoted equity, a feature for which the standard excess saving story cannot easily account. A separate explanation is that an increase in the global risk premium has increased the wedge between risk-free interest rates and the real required return on risky investments.
The economic impact of reducing non-performing loans
Maria Balgova and Alexander Plekhanov (VoxEU) Nov 18, 2016
The major increase in the volume of non-performing loans as a result of the recent financial crisis was predictable, but the persistence of this bad debt is a cause for concern. Using a sample of 100 countries, this column compares economic outcomes in three different scenarios following a rise in non-performing loans. Reducing these loans has an unambiguously positive medium-term effect, with countries that experience an influx of fresh credit growing the fastest. Allowing high levels of non-performing loans to persist, on the other hand, can cost more than two percentage points of economic growth annually. The major increase in the volume of non-performing loans as a result of the recent financial crisis was predictable, but the persistence of this bad debt is a cause for concern. Using a sample of 100 countries, this column compares economic outcomes in three different scenarios following a rise in non-performing loans. Reducing these loans has an unambiguously positive medium-term effect, with countries that experience an influx of fresh credit growing the fastest. Allowing high levels of non-performing loans to persist, on the other hand, can cost more than two percentage points of economic growth annually.
Unwinding of the pound carry trade
Ashoka Mody (VoxEU) Nov 18, 2016
Between the first quarter of 2013 and the end of 2015, London property prices rose rapidly, the exchange rate appreciated, and the current account deficit widened. This column argues that the rise of the pound was in fact a financial bubble, riding on a property price-exchange rate carry trade.This unsustainable bubble was deflated by Brexit. Between the first quarter of 2013 and the end of 2015, London property prices rose rapidly, the exchange rate appreciated, and the current account deficit widened. This column argues that the rise of the pound was in fact a financial bubble, riding on a property price-exchange rate carry trade.This unsustainable bubble was deflated by Brexit.
Saudi Arabia’s 2030 Mirage
James M. Dorsey (Globalist) Nov 19, 2016
Reformist Saudi prince bounces up against flawed education system and ingrained social mores.
This Bank Needs a Female, Northern Brexiteer
Mark Gilbert (Bloomberg View) Nov 19, 2016
The government should resist appointing yet another white, male economist as central banker.
Italy’s referendum holds the key to the future of the euro
Wolfgang Münchau (FT) Nov 20, 2016
On December 5, Europe could wake up to an immediate threat of disintegration.
Mexico’s Options in a Trump Trade War
Mary Anastasia O'Grady (WSJ) Nov 20, 2016
The country could impose retaliatory duties and look for new trade partners.
Dealing with zombie enterprises in China
He Fan (EAF) Nov 20, 2016
Zombie enterprises are holding back economic recovery in China.
Why denser areas are more productive
Lionel Fontagné and Gianluca Santoni (VoxEU) Nov 20, 2016
A key driver of productivity is ease of resource allocation. This column uses firm-level data for France to show that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate. Denser commuting zones seem to offer a better match between employers and employees, leading to more productive firms. A key driver of productivity is ease of resource allocation. This column uses firm-level data for France to show that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate. Denser commuting zones seem to offer a better match between employers and employees, leading to more productive firms.
Comparing the 1932 open market purchases and quantitative easing
Michael Bordo and Arunima Sinha (VoxEU) Nov 20, 2016
In the wake of the Great Recession, the Federal Reserve took unprecedented measures to stem economic decline. This column uses the Fed’s open-market operations in 1932, another period of short-term rates near the zero lower bound, as a comparison for the QE1 operation of 2008-09. Although the 1932 policy boosted output and inflation, if the Fed had announced the operation in advance and carried it out for a full year, the Great Depression could have been attenuated considerably earlier. In the wake of the Great Recession, the Federal Reserve took unprecedented measures to stem economic decline. This column uses the Fed’s open-market operations in 1932, another period of short-term rates near the zero lower bound, as a comparison for the QE1 operation of 2008-09. Although the 1932 policy boosted output and inflation, if the Fed had announced the operation in advance and carried it out for a full year, the Great Depression could have been attenuated considerably earlier.
France and Germany are still the EU’s best defence
FT View Nov 21, 2016
Centrists in the bloc’s founding members need to find new strength.
Asian central banks: riding out the Trump jump
Dan Bogler (FT) Nov 21, 2016
Asia better placed to weather dollar strength than rest of EM but more rate cuts off agenda.
A Retreat From TPP Would Empower China
NYT Nov 21, 2016
If Donald Trump walks away from the Trans-Pacific Partnership, China will be handed a chance to dominate the region more than ever before.
If Oil Refiners Crash, So Will the Economy
Carl Icahn (WSJ) Nov 21, 2016
Biofuel regulations are ruining merchant oil refiners—bad for business and national security.
Eastern Europe’s Lethargic Economies
Simeon Djankov (PIIE) Nov 21, 2016
Eastern Europe’s economies are not catching up with their Western neighbors as quickly as many had hoped. The latest Eurostat figures on economic growth in Europe, released earlier this month, show a troubling trend.
What Fed watchers think of the central bank's communications
David Wessel and Peter Olson (Brookings) Nov 21, 2016
A survey of academic and private-sector Fed watchers suggests that having the Fed chair communicate more often and regional Fed bank presidents speak less could go a long way in improving what some consider a chaotic signaling system.
Don't Bet On a Crash From a Trump Trade War
Noah Smith (Bloomberg View) Nov 21, 2016
Some restrictions on imports from China would do little harm. There's even a chance they could help a bit.
Policies for Populists (That Won't Kill Growth)
Jean-Michel Paul (Bloomberg View) Nov 21, 2016
A few ways to appease angry voters without losing the benefits of globalization.
Trump Bond Sell-Off Should Scare Central Banks
Christopher Wood (Bloomberg View) Nov 21, 2016
With inflation risks rising, a test of credibility is at hand.
Sanctions and the Risk to the Dollar
Christopher Smart (Project Syndicate) Nov 21, 2016
Any US administration should pause before cutting off access to the dollar-trading system as a way to punish misbehavior by foreign governments. Over time, even legitimate actors will find alternative commercial and financial channels if they come to feel that dollar access is conditional on not running afoul of US interests.
Uniting for an Asian Century
Lee Jong-Wha (Project Syndicate) Nov 21, 2016
There is no question that Asia’s standing in the global economy is stronger than ever. But the US and Europe maintain an advantage, in terms of global strategic influence, while Asian countries are facing major political, economic, and security challenges.
Zimbabwe’s Currency Hail Mary
Simon Allisoni (FP) Nov 21, 2016
Faced with a crippling cash crisis, the southern African country has designed a solution that nobody thinks will work.
How trade liberalisation fosters global innovation
Federica Coelli, Andreas Moxnes and Karen-Helene Ulltveit-Moe (VoxEU) Nov 21, 2016
Free trade is under fire, with evidence documenting the distributional impacts and labour adjustment costs of trade liberalisation mounting. This column instead presents new evidence on the benefits of freer trade in terms of growth and innovation. It points to gains that could be lost if support for globalisation is not maintained. Free trade is under fire, with evidence documenting the distributional impacts and labour adjustment costs of trade liberalisation mounting. This column instead presents new evidence on the benefits of freer trade in terms of growth and innovation. It points to gains that could be lost if support for globalisation is not maintained.
Production fragmentation and the global trade slowdown
Marcel Timmer, Bart Los, Robert Stehrer and Gaaitzen De Vries (VoxEU) Nov 21, 2016
The recent deceleration of world trade has been widely discussed, and many argue the relationship between trade and GDP growth is undergoing a fundamental shift. This column presents a novel framework to account for changes in the import intensity of global demand. Import intensity rose between 2000 and 2008 due to high demand for durables and to international production fragmentation. After 2011, fragmentation stopped and demand shifted to services, in particular in China. Low trade ratios are likely to persist in the near future. The recent deceleration of world trade has been widely discussed, and many argue the relationship between trade and GDP growth is undergoing a fundamental shift. This column presents a novel framework to account for changes in the import intensity of global demand. Import intensity rose between 2000 and 2008 due to high demand for durables and to international production fragmentation. After 2011, fragmentation stopped and demand shifted to services, in particular in China. Low trade ratios are likely to persist in the near future.
Tit-for-tat banking rules are a retrograde step
FT View Nov 22, 2016
The EU risks giving US institutions an excuse to scale back operations.
Here is how to beat the money launderers
David Fein (FT) Nov 22, 2016
Banks must work with governments to combat this scourge.
Emerging market profit margins start to recover
Steve Johnson (FT) Nov 22, 2016
Signs of green shoots as companies finally get to grips with rising costs.
Emerging market profit margins start to recover
Steve Johnson (FT) Nov 22, 2016
Signs of green shoots as companies finally get to grips with rising costs.
Donald Trump faces the reality of world trade
Martin Wolf (FT) Nov 22, 2016
The US president-elect must decide what to do about China.
India just made a big mistake with its currency ban
Lawrence H. Summers and Natasha Sarin (WP) Nov 22, 2016
Like everyone else, we were surprised by the dramatic action taken by Indian Prime Minister Narendra Modi to demonetize the existing 500 and 1,000 rupee notes. This is by far the most sweeping change in currency policy that has occurred anywhere in the world in decades.
How to Assess the Trump Economy in a Global Context
Peter Morici (Globalist) Nov 22, 2016
A reality check on what’s really ahead for US infrastructure, tax cuts, health care and protectionism.
Donald Trump’s Pledge to Withdraw U.S. From TPP Opens the Door for China
Charlie Campbell (Time) Nov 22, 2016
Trump has nixed U.S. involvement in the TPP, which would cover annual trade of $27 trillion.
Global banking is dead
Brian Caplen (Banker) Nov 22, 2016
Much of the rhetoric surrounding the seismic events of 2016 has been based around the coming death of globalisation. However, as Brian Caplen describes, the global banking model is already at the autopsy stage.
India's 'Post-Truth' Answer to Crisis
John Eliott (Asia Sentinel) Nov 22, 2016
Demonetization, train crash test government.
US Walks Away From TPP, Leaving China Free to Dominate Asia
Anthony Rowley (YaleGlobal) Nov 22, 2016
At the APEC meeting, China hustles to replace the TPP free-trade agreement with its own versions.
Populism Doesn't Mean the EU Will Fall Apart
Leonid Bershidsky (Bloomberg View) Nov 22, 2016
Populist victories may be more likely to bring a transformation than disintegration of the union.
Trump's Best Bet? Free Trade With China.
Michael Schuman (Bloomberg View) Nov 22, 2016
It's unlikely. But few deals would do more to boost American business.
Brexit May Save European Growth After All
Victoria Bateman (Bloomberg View) Nov 22, 2016
Europe's project for "ever closer union" may harm competition and growth rather than enhance it.
Egypt and Tunisia’s Divergent Paths
Ishac Diwan (Project Syndicate) Nov 22, 2016
Countries moving toward democracy seem as likely to experience poor economic performance as countries moving toward renewed dictatorship. But countries that embrace political inclusion can soon find themselves back on the path toward healthy economic growth, while closing societies position their economies for a downward spiral.
How to Feed the World
Bjørn Lomborg (Project Syndicate) Nov 22, 2016
Great progress has been made in humanity’s fight against hunger, which has shaped nearly every major society in history. But, to win the battle once and for all, the world needs more investment in agricultural R&D to boost productivity.
Think global, act local
Minouche Shafik (VoxEU) Nov 22, 2016
The spread of financial shocks globally has caused some to argue that capital accounts should be more closed, thereby shrinking the opportunities available to global savers and borrowers alike. That would put further downward pressure on interest rates in surplus economies, and upward pressure on borrowing costs in economies where the greatest opportunities lie. This column argues that by acting in their local interest, domestic macroprudential policymakers can safeguard against the risk of financial instability spilling across borders, while continuing to allow capital to flow to where it is of most use. The spread of financial shocks globally has caused some to argue that capital accounts should be more closed, thereby shrinking the opportunities available to global savers and borrowers alike. That would put further downward pressure on interest rates in surplus economies, and upward pressure on borrowing costs in economies where the greatest opportunities lie. This column argues that by acting in their local interest, domestic macroprudential policymakers can safeguard against the risk of financial instability spilling across borders, while continuing to allow capital to flow to where it is of most use.
Future challenges of financial regulation
Thorsten Beck, Elena Carletti and Itay Goldstein (VoxEU) Nov 22, 2016
The Global Crisis has led to a new wave of regulation. This column argues that improved capital requirements, liquidity requirements, bank resolution and cross-border regulatory cooperation are welcome, but that unresolved problems remain. Specifically, regulation may become too complex, focus too little on macroprudential risks, be inadequate to deal with crises in global financial institutions, or fail to cope with financial innovation. The Global Crisis has led to a new wave of regulation. This column argues that improved capital requirements, liquidity requirements, bank resolution and cross-border regulatory cooperation are welcome, but that unresolved problems remain. Specifically, regulation may become too complex, focus too little on macroprudential risks, be inadequate to deal with crises in global financial institutions, or fail to cope with financial innovation.
Coordination and the fight against tax havens
Kai Konrad and Tim Stolper (VoxEU) Nov 22, 2016
The reasons why a country would comply with international standards of transparency in the face of sizeable returns in the tax haven business are unclear. This column highlights fundamental coordination problems in the fight against offshore secrecy regimes and their implications for optimal policies, and explores whether the fight will be successful or not. The reasons why a country would comply with international standards of transparency in the face of sizeable returns in the tax haven business are unclear. This column highlights fundamental coordination problems in the fight against offshore secrecy regimes and their implications for optimal policies, and explores whether the fight will be successful or not.
A fiscal surplus too far for the Greek economy
FT View Nov 23, 2016
The EU’s softening attitude to public deficits should include Greece.
The collapse of the Trans-Pacific Partnership
Economist Nov 23, 2016
Donald Trump said this week that on his first day in office, America would quit the TPP, a trade pact nearly a decade in the making. It would have covered almost 40% of the global economy. The deal was meant to be strategic as well as economic; its other signatories consider it pointless without American participation. Observers expect China to fill the void and assume economic leadership in Asia.
Central Bankers Hope Trump Eases Their Burden
Mohamed Aly El-Erian (Bloomberg View) Nov 23, 2016
Monetary policy will stop being the only game in town if the president-elect spurs faster growth.
Bond Market Is Right to Worry About Italian Vote
Mark Gilbert (Bloomberg View) Nov 23, 2016
Investors are concerned that there's more at stake than just Italian constitutional reform.
Doing Business Should Stop Promoting Tax Competition
José Antonio Ocampo and Edmund Fitzgerald (Project Syndicate) Nov 23, 2016
The World Bank Group recently released Doing Business 2017: Equal Opportunity for All, the latest version of its flagship report, which encourages countries to reduce regulatory burdens on the private sector. But there is a serious flaw in the report’s formula: its treatment of corporate taxation.
Trumping the International Monetary System
Andrew Sheng and Xiao Geng (Project Syndicate) Nov 23, 2016
Given US President-elect Donald Trump's promises of tax cuts and infrastructure investment, markets are anticipating faster growth in the US. But, by increasing the dollar’s value against most currencies and triggering capital flight from emerging economies, the US could put global financial stability at risk.
Fleeing from Italy
Carmen Reinhart (Project Syndicate) Nov 23, 2016
In Italy’s December 4 referendum, voters will approve or reject the country’s most extensive constitutional reforms since the monarchy was abolished at the end of World War II. But the vote also amounts to a broader choice about continued eurozone membership – a decision made more urgent by accelerating capital flight.
Will the Dollar Be Trumped?
Benjamin J. Cohen (Project Syndicate) Nov 23, 2016
Since Donald Trump was elected US president, capital inflows have pushed up the dollar’s value to levels not seen in more than a decade. But appearances can be deceiving; Trump's presidency will almost certainly be bad for the US economy – and thus for the greenback.
Will Foreign Aid Get Cut on Trump’s Chopping Block?
David Francis, John Hudson, and Dan De Luce (FP) Nov 23, 2016
USAID is in the dark on Trump’s plans, but Republicans in Congress could step up to defend foreign aid.
Globalisation and Brexit
Italo Colantone and Piero Stanig (VoxEU) Nov 23, 2016
The vote for Brexit was a watershed moment in European politics. This column investigates the causal drivers of differences in support for the Leave campaign across UK regions. Globalisation in the form of the ‘Chinese import shock’ is found to be a key driver of regional support for Brexit. The results suggest that policies are needed that help to redistribute the benefits of globalisation across society. The vote for Brexit was a watershed moment in European politics. This column investigates the causal drivers of differences in support for the Leave campaign across UK regions. Globalisation in the form of the ‘Chinese import shock’ is found to be a key driver of regional support for Brexit. The results suggest that policies are needed that help to redistribute the benefits of globalisation across society.
Economic Snapshot for the Major Economies
Ricardo Aceves (Focus Econ) Nov 23, 2016
Our new global economic outlook with Trump in mind.
Economic Snapshot for the Euro Area
Angela Bouzanis (Focus Econ) Nov 23, 2016
How will Brexit negotiations affect Europe’s growth?
Italy’s banking system needs intensive care
FT View Nov 24, 2016
EU regulations are supposed to prevent crises, not encourage them.
Britain’s confused development aid plans
FT View Nov 24, 2016
The funding splurge on private equity is at odds with UK commitments
Emerging market investors wait for Trump to show his hand
Jonathan Wheatley and Elaine Moore (FT) Nov 24, 2016
As dust settles on the US election shock, calls for clarity are growing more urgent.
Donald Trump would lose from a break with Europe
Philip Stephens (FT) Nov 24, 2016
From the outset, the US commitment to the alliance was rooted in self-interest.
Italian banks: End of the embrace
Rachel Sanderson (FT) Nov 24, 2016
Cosy lending practices added to the banking crisis and threaten its recovery.
WTO Farm Talks Chair Welcomes Negotiating "Shift in Gear"
Bridges, Volume 20, Number 40 Nov 24, 2016
The chair of the WTO agriculture talks has welcomed what he called a "shift in gear" as members tabled several new proposals ahead of negotiating meetings held last week.
Asia-Pacific Leaders Consider Next Steps for TPP Accord
Bridges, Volume 20, Number 40 Nov 24, 2016
US President-elect Donald Trump confirmed on Monday that he would be pulling the United States out of the Trans-Pacific Partnership (TPP) upon taking office, in a move that has left fellow Asia-Pacific trading partners considering how this will affect plans for deepening trade ties in the region.
In Final Europe Trip, Obama Outlines Vision of Continued Transatlantic Cooperation
Bridges, Volume 20, Number 40 Nov 24, 2016
Outgoing US President Barack Obama met last week with the leaders of Germany, the United Kingdom, France, Italy, and Spain to discuss the future of transatlantic cooperation, broaching the subjects of economic partnership and integration in the wake of the impending leadership change in Washington and upcoming elections in certain EU member states.
Prospects for Global Governance
Ron Gass (OECD Insights) Nov 24, 2016
A world society is emerging where nation states are dominant, but in a complex, multi-polar world in which the poles – including business, civil society, and multilateral agencies – are developing various forms of power through alliances and shared objectives (or even common enemies).
Russia Wants to Remake Globalization in Its Own Image
Richard Weitz (YaleGlobal) Nov 24, 2016
Globalization is under assault, claims Russia, from a Western-dominated world order with benefits limited to a few.
Containing the Populist Contagion
Harold James (Project Syndicate) Nov 24, 2016
Contagion is a well understood process in finance: a shock in one place produces tremors elsewhere, because pattern-seeking market participants perceive fundamental forces at work. Today’s populist political revolt across the West is exhibiting a similar dynamic.
Demonetization Dos and Don’ts
Gita Gopinath (Project Syndicate) Nov 24, 2016
Indian Prime Minister Narendra Modi's government is targeting the "black money" associated with tax evasion, corruption, and counterfeiting, and thus the drug traffickers, smugglers, and terrorists who engage in those activities. But, by moving too quickly, the government seems to be causing collateral damage to India's economy.
Dilemmas and tradeoffs in global capital flows
Jean-Pierre Landau (VoxEU) Nov 24, 2016
The objectives of maximising growth and reducing external imbalances may not be fully compatible in a financially integrated and asymmetric world. This column argues that countries have two choices: they can contain global imbalances and gross financial flows through permanent capital controls, or they can pursue financial integration, managing growing imbalances and external exposures by creating more global safe assets. This implies debt contracts would be either state-contingent, with easy restructuring, or built to be ‘safe’, with a high level of commitment by the issuer. The objectives of maximising growth and reducing external imbalances may not be fully compatible in a financially integrated and asymmetric world. This column argues that countries have two choices: they can contain global imbalances and gross financial flows through permanent capital controls, or they can pursue financial integration, managing growing imbalances and external exposures by creating more global safe assets. This implies debt contracts would be either state-contingent, with easy restructuring, or built to be ‘safe’, with a high level of commitment by the issuer.
Corporate governance and financial stability in emerging markets
Selim Elekdag and Gaston Gelos (VoxEU) Nov 24, 2016
The relationship between corporate governance and financial stability has received little attention in the context of emerging markets. Using new firm-level indices of governance in emerging markets, this column shows that both firm-level governance and governance frameworks have generally improved at the country level over recent years. These stronger frameworks have enhanced the resilience of firms to global shocks, and bolstered balance sheets. The relationship between corporate governance and financial stability has received little attention in the context of emerging markets. Using new firm-level indices of governance in emerging markets, this column shows that both firm-level governance and governance frameworks have generally improved at the country level over recent years. These stronger frameworks have enhanced the resilience of firms to global shocks, and bolstered balance sheets.
Selected takeaways from the ECB Sintra Forum on “The Future of the International Monetary and Financial Architecture”
Vítor Constâncio and Philipp Hartmann (VoxEU) Nov 24, 2016
The ECB’s 2016 Sintra Forum on Central Banking focused on the international monetary and financial system. In this column, the organisers of the forum highlight some of the main points from the discussions, including concerns that the world economy may be suffering from a shortage of safe assets and proposals for which areas international regulatory reforms should be further developed. The ECB’s 2016 Sintra Forum on Central Banking focused on the international monetary and financial system. In this column, the organisers of the forum highlight some of the main points from the discussions, including concerns that the world economy may be suffering from a shortage of safe assets and proposals for which areas international regulatory reforms should be further developed.
Cleaning Up Ukraine
Dan Peleschuk (FA) Nov 24, 2016
Can Kiev overcome its dysfunction to fight Fraft?
Matteo Renzi still has job to do even if he loses the referendum
Mario Monti (FT) Nov 25, 2016
The prime minister’s emphasis on the poll has hampered economic reforms.
Legendary corporate dealmaker faces battle as Trump’s trade tsar
Gillian Tett (FT) Nov 25, 2016
Ross will need political authority and stamina to deliver results.
The value of trading relationships in turbulent times
Marco Di Maggio, Amir Kermani and Zhaogang Song (VoxEU) Nov 26, 2016
The Global Crisis of 2008 highlighted the role of intertwined financial markets in shaping the transmission of risk and the build-up of fragility throughout the system. This column investigates the role of dealer networks in the corporate bond market. Network relationships appear to act as a buffer in periods of distress, but also accentuate systemic fragility as connections with vulnerable dealers might affect trading outcomes even for sound dealers. The Global Crisis of 2008 highlighted the role of intertwined financial markets in shaping the transmission of risk and the build-up of fragility throughout the system. This column investigates the role of dealer networks in the corporate bond market. Network relationships appear to act as a buffer in periods of distress, but also accentuate systemic fragility as connections with vulnerable dealers might affect trading outcomes even for sound dealers.
Britain Still Needs a Fiscal Reset
Mark Gilbert (Bloomberg View) Nov 25, 2016
Bleak forecasts for U.K. growth risk becoming self-fulfilling prophecies.
A More Perfect Union Needs Both Nationalism and Globalism
Clive Crook (Bloomberg View) Nov 25, 2016
Contrary to popular belief, the two aren't mutually exclusive.
The Disunited Kingdom
Gordon Brown (Project Syndicate) Nov 25, 2016
Now that the Brexit referendum has revealed the UK's deep regional inequalities, there is a strong case to be made for a more federal union. To reunite the country, its centralist constitution should be revised to account for regional interests and aspirations, and powers should be devolved accordingly.
‘Winning the peace’: The challenge for the G20
Marco Buti and Helene Bohn-Jespersen (VoxEU) Nov 25, 2016
The actions taken in 2008-09 by the G20 avoided an outright depression during the financial crisis, but questions remain over its ability to evolve from a short-term crisis response forum to effectively addressing more long-term challenges. This column argues that to ‘win the peace', G20 members as well as G20 Presidencies have to recognise the need for integrating prior policy commitments with new priorities, and ensure that the focus is kept on a limited number of deliverables to which all G20 members can agree. The actions taken in 2008-09 by the G20 avoided an outright depression during the financial crisis, but questions remain over its ability to evolve from a short-term crisis response forum to effectively addressing more long-term challenges. This column argues that to ‘win the peace', G20 members as well as G20 Presidencies have to recognise the need for integrating prior policy commitments with new priorities, and ensure that the focus is kept on a limited number of deliverables to which all G20 members can agree.
Agglomeration economies, productivity, and quality upgrading
Hisamitsu Saito and Toshiyuki Matsuura (VoxEU) Nov 25, 2016
Agglomeration’s impact on product quality has received much less attention than its impact on productivity, despite the importance of quality as a precondition for economic development. This column employs plant-product-level data from Japanese manufacturing to assess the effects of urban agglomeration on product quality. The findings suggest that state and municipal tax breaks, and other public efforts to attract enterprises, enhance economic competitiveness by improving product quality along with productivity. Agglomeration’s impact on product quality has received much less attention than its impact on productivity, despite the importance of quality as a precondition for economic development. This column employs plant-product-level data from Japanese manufacturing to assess the effects of urban agglomeration on product quality. The findings suggest that state and municipal tax breaks, and other public efforts to attract enterprises, enhance economic competitiveness by improving product quality along with productivity.
Brazil joins Paris club of wealthy creditor nations
Elaine Moore and Joe Leahy (FT) Nov 27, 2016
Deteriorating global credit conditions spur co-ordination on debt relief.
Forecasters have been much too pessimistic about Brexit
Ruth Lea (FT) Nov 27, 2016
Why we should treat the OBR’s crystal ball-gazing with scepticism.
The liberal elite’s Marie Antoinette moment
Wolfgang Münchau (FT) Nov 27, 2016
The correct response is to rein in the financial sector and income inequality.
The president, the shaman and the scandal engulfing South Korea
Bryan Harris (FT) Nov 27, 2016
The allegations facing the leader risk exacerbating the nation’s economic problems.
The Real Enemy for Trump Is Mercantilism, Not Globalism
Harnando de Soto (WSJ) Nov 27, 2016
As in Adam Smith’s day, the state favors some firms through regulations, taxes, subsidies and licenses.
The Electoral Consequences of Globalization
Joseph P. Joyce (CEF) Nov 27, 2016
The reasons for the election of Donald Trump as President of the U.S. will be analyzed and argued about for many years to come.
Trump’s response to Duterte’s game-changer in Asia
Kavi Chongkittavorn (EAF) Nov 27, 2016
Philippines' President, Rodrigo Duterte, is the game-changer in Asia.
The Politics of Job Polarization
Simon Johnson (Project Syndicate) Nov 27, 2016
Given the role of technology in displacing workers, protectionism – tearing up trade agreements and imposing tariffs on Chinese and Mexican goods – won’t bring back high-paying manufacturing jobs, as Donald Trump has promised. On the contrary, the labor-market dynamics that brought Trump to power are about to become worse.
The Stakes of Italy’s Referendum
Mario Margiocco (Project Syndicate) Nov 27, 2016
Italy's referendum next month on constitutional reforms could set the stage for a general election, resulting in a political takeover by populist parties. Is direct democracy about to undo another European country – and drive another nail into the EU's coffin?
A Water War in Asia?
Brahma Chellaney (Project Syndicate) Nov 27, 2016
Tensions over water are rising in Asia – and not only because of conflicting maritime claims. While territorial disputes, such as in the South China Sea, attract the most attention, the strategic ramifications of competition over transnationally shared freshwater resources are just as ominous.
Drivers of wealth persistence across generations
Adrian Adermon, Mikael Lindahl and Daniel Waldenström (FT) Nov 27, 2016
Recent studies on intergenerational income mobility have looked beyond the two-generational model to the role of grandparents, but multigenerational patterns in the wealth distribution have received less attention. This column uses a Swedish four-generational wealth dataset to study the role of family background for people’s wealth status and how much of this that is due to material inheritance. Most of the transmission in wealth status between generations comes from parents in the form of bequests and gifts, with only a marginal contribution from grandparents. Recent studies on intergenerational income mobility have looked beyond the two-generational model to the role of grandparents, but multigenerational patterns in the wealth distribution have received less attention. This column uses a Swedish four-generational wealth dataset to study the role of family background for people’s wealth status and how much of this that is due to material inheritance. Most of the transmission in wealth status between generations comes from parents in the form of bequests and gifts, with only a marginal contribution from grandparents.
The Saudis are playing with fire if they raise oil output further
Nick Butler (FT) Nov 28, 2016
The kingdom’s approach is risky and potentially an act of serious self-harm.
OECD premature in its praise of Donald Trump’s economic plan
Anton Spisak (FT) Nov 28, 2016
It is too early to assess the president-elect’s fiscal policies.
New Basel banking rules’ impact on European economy
Frédéric Oudéa (FT) Nov 28, 2016
EU project relies on the capacity of institutions to bring prosperity and security.
Only events can shift the Brexit debate
Janan Ganesh (FT) Nov 28, 2016
An intervention now by Tony Blair might be counterproductive.
Turkey’s troubled times
Dan Bogler (FT) Nov 28, 2016
Short-term currency risks and longer-term political outlook argue for discount on assets.
The End of America’s Economic Miracle
Paul Kennedy (WSJ) Nov 28, 2016
What if those Eisenhower boom times were a one-off phenomenon? What if we should get used to modest long-term growth?
Stuck at the Bottom in China
Lijia Zhang (NYT) Nov 28, 2016
After decades of breakneck economic growth, the country’s wealth has ceased trickling down, bringing social mobility to a standstill.
The political economics of populist politics
Paul Donovan (Jakarta Post) Nov 28, 2016
Investors have consistently underestimated populism.
Deploy effective fiscal initiatives and promote inclusive trade policies to escape from the low-growth trap
Catherine L Mann (OECD Ecoscope) Nov 28, 2016
For the last five years the global economy has been in a low-growth trap, with growth disappointingly low and stuck at around 3 per cent per year.
How to Increase Productivity in Eastern Europe
Simeon Djankov (PIIE) Nov 28, 2016
Like its Western neighbors, Eastern Europe is victim to a pervasive demographic challenge—the retirement of a growing number of elderly must be financed by a tax base of increasingly fewer younger workers.
How India Copes with Demonetization
Ronald Meinardus (Globalist) Nov 28, 2016
What happens when your cash is worthless all of a sudden?
A TPP Without the U.S. Is Better Than None
Bloomberg View Nov 28, 2016
Maybe someday the U.S. will see fit to join the trade deal.
Europe Fudges Its Open Border Promises
Leonid Bershidsky (Bloomberg View) Nov 28, 2016
The EU proffered visa-free travel to Ukraine, Turkey and others. That was then.
From Peak Oil to Peak Oil Demand in Just Nine Years
Justin Fox (Bloomberg View) Nov 28, 2016
The track record of energy forecasters is pretty spotty.
Missing the Economic Big Picture
J. Bradford DeLong (Project Syndicate) Nov 28, 2016
According to a Buddhist proverb, "“When the philosopher points at the moon, the fool looks at the finger.” By focusing on individual free-trade agreements or on closing national borders to immigrants, rather than on managing market capitalism itself, we are looking at the finger and missing the moon.
Will Trump’s Plan Really Boost US Demand?
Martin Feldstein (Project Syndicate) Nov 28, 2016
Ever since Donald Trump won the US presidential election, the press and financial markets have focused on his proposal to cut taxes and to spend $1 trillion on infrastructure over the next decade. But the assumption that higher demand will lead to higher prices and wages doesn’t square with the details of Trump’s proposals.
Trump, the Dragon, and the Minotaur
Yanis Varoufakis (Project Syndicate) Nov 28, 2016
If Donald Trump understands anything, it is the value of bankruptcy and financial recycling. But the success of his strategy hinges on whether he grasps the profound difference between a developer’s debt and the debt of a large economy – China's.
Sustaining the Trump Rally
Mohamed A. El-Erian (Project Syndicate) Nov 28, 2016
Since Donald Trump's victory in the US presidential election, stock markets have rallied and the dollar has soared. Explaining these unforeseen market responses could provide a glimpse into what the next few months hold in store for the US economy.
Europe’s Secret Bailout
Hans-Werner Sinn (Project Syndicate) Nov 28, 2016
While the world worries about Donald Trump, Brexit, and refugees, the European Central Bank continues to work below the public radar on its debt-restructuring plan – also known as quantitative easing – to ease the burden on the over-indebted eurozone countries. It's a high-risk operation, especially for Germany and the Netherlands.
How Russia Stays Afloat
Anders Åslund (Project Syndicate) Nov 28, 2016
The long-term sustainability of Russia’s economy is an open question: cronyism is rife, and Russia’s heavy dependence on oil revenues means that it will suffer whenever oil prices fall. But if the Soviet Union taught us anything, it is that unsustainable systems can survive for many years.
Ten Consequences of Trump
Anatole Kaletsky (Project Syndicate) Nov 28, 2016
With the Republican Party in full control of the US government, fiscal stimulus will boost economic growth in the short term. But enacting large tax cuts and boosting public spending in an economy already nearing full employment implies accelerating inflation, higher interest rates, or probably some combination of the two.
Exploding myths about the gig economy
Jacques Bughin and Jan Mischke (VoxEU) Nov 28, 2016
The ‘gig economy’ refers to the independent workforce, including those drawing income from new digital platforms such as Uber and Airbnb. This column uses a survey of 8,000 respondents in the US, the UK, Germany, Sweden, France, and Spain to explode some myths about this relatively new and controversial side of the economy. Among the findings are that existing statistics severely underestimate the size of the gig economy, and that 30% of those working independently do not do so out of choice. The ‘gig economy’ refers to the independent workforce, including those drawing income from new digital platforms such as Uber and Airbnb. This column uses a survey of 8,000 respondents in the US, the UK, Germany, Sweden, France, and Spain to explode some myths about this relatively new and controversial side of the economy. Among the findings are that existing statistics severely underestimate the size of the gig economy, and that 30% of those working independently do not do so out of choice.
Why we need a positive fiscal stance for the Eurozone and what it means
Marco Buti and Lucía Rodríguez Muñoz (VoxEU) Nov 28, 2016
With growth still weaker than is desirable and challenges originating from geopolitical developments further complicating the economic outlook, responsible growth-friendly fiscal policy needs to play a bigger role in supporting demand in the Eurozone today. This column presents a new European Commission Communication on Eurozone fiscal policy, which outlines what a “positive fiscal stance" for the Eurozone would look like. With growth still weaker than is desirable and challenges originating from geopolitical developments further complicating the economic outlook, responsible growth-friendly fiscal policy needs to play a bigger role in supporting demand in the Eurozone today. This column presents a new European Commission Communication on Eurozone fiscal policy, which outlines what a “positive fiscal stance" for the Eurozone would look like.
Fiscal space and low interest rates: A Eurozone perspective
Marco Buti and Nicolas Carnot (VoxEU) Nov 28, 2016
The European Commission has just called for a fiscal stance that is more supportive of the recovery and of monetary policy in the Eurozone. This column argues that the case is strong for spending now on investment and other targeted programmes supporting growth and employment. However, fiscal space is heterogeneously distributed across the Eurozone, with some countries able to exploit a clear margin, and others needing to pursue a more prudent approach of gradual debt unwinding. A common stabilisation capacity would help for managing shocks that cannot be absorbed by national stabilisers alone. The European Commission has just called for a fiscal stance that is more supportive of the recovery and of monetary policy in the Eurozone. This column argues that the case is strong for spending now on investment and other targeted programmes supporting growth and employment. However, fiscal space is heterogeneously distributed across the Eurozone, with some countries able to exploit a clear margin, and others needing to pursue a more prudent approach of gradual debt unwinding. A common stabilisation capacity would help for managing shocks that cannot be absorbed by national stabilisers alone.
Beijing acts to plug leaky capital controls
FT View Nov 29, 2016
Restrictions on outward investment serve only as a short-term fix.
Stability and reform are at stake in Italy’s referendum
Paolo Gentiloni (FT) Nov 29, 2016
The country has regained its voice in Europe to encourage a focus on investment.
Beijing battles to close capital flight loopholes
Lucy Hornby (FT) Nov 29, 2016
Clampdown on overseas deals is latest plan to stop vast sums leaving China.
Political risk in Europe – the new threat to banks
Brian Caplen (Banker) Nov 29, 2016
The West's political landscape is almost unrecognisable compared with what it was just a year ago, leaving banks in the US and Europe experiencing political risk from closer quarters than they are used to. Brian Caplen assesses the situation.
Modi's Revolutionary Dreams
Modi's Revolutionary Dreams (Bloomberg View) Nov 29, 2016
India's Prime Minister is trying to forge a new nation from sacrifice and pain.
How to Fill the Void Left by TPP
Noah Smith (Bloomberg View) Nov 29, 2016
China and Russia see an opening to expand in Asia. A U.S. trade deal with Japan would be a good response.
Cutting Off Trade Won't Revive the Rust Belt
Conor Sen (Bloomberg View) Nov 29, 2016
And restrictions on immigration may only aggravate the region's brain drain.
Trump's Disastrous Pledge to Keep Jobs in the U.S.
Tyler Cowen (Bloomberg View) Nov 29, 2016
Put into practice, it would raise the trade deficit, politicize the economy, and bring on a crony capitalist nightmare.
Greece Isn't 'Crying Wolf' on Debt Relief
Mark Gilbert (Bloomberg View) Nov 29, 2016
It's biggest private creditor claims Greece is overstating its debt problem. That's dangerous.
For Saudis, Even a Small Oil Cutback Is a Big Deal
Meghan L O'Sullivan (Bloomberg View) Nov 29, 2016
Part of the kingdom's plan is to judge the effect on U.S. shale production.
Donald Trump and the New Economic Order
Michael Spence (Project Syndicate) Nov 29, 2016
Since the end of World War II, the hierarchy of economic priorities has been relatively clear: build a prosperous and open world order first, then try to generate inclusive and sustainable national growth patterns. Now, a reversal seems to be underway, with far-reaching consequences for the global economy.
Why Multilateralism Still Matters
Javier Solana (Project Syndicate) Nov 29, 2016
Driven by a sense of injustice and inequality, voters in the West have increasingly rejected openness, as well as the political establishment that has advanced it. But, while the grievances fueling these choices are real, the cure is likely to be worse than the disease.
The End of AIDS
Jeffrey D. Sachs (Project Syndicate) Nov 29, 2016
The AIDS pandemic claimed some 36 million lives since 1981, and a similar number around the world currently live with the HIV virus. The figures are daunting, but the goal of an “AIDS-free generation” is within reach.
Is Our Economic Future Behind Us?
Joel Mokyr (Project Syndicate) Nov 29, 2016
With the global economy yet to recover from the 2008 economic crisis, concern about the future – especially of the advanced economies – is intensifying. But, with scientific progress surging forward, there is plenty of reason to believe that technological advances will continue to surpass our wildest dreams – and drive growth.
Wanted: Equal Opportunity Globalization
Branko Milanovic (YaleGlobal) Nov 29, 2016
Populists blame Asia’s high growth rates for economic woes rather than policies that reinforce inequality at home
India’s Big Step Away from Cash
Nathan Heller (New Yorker) Nov 29, 2016
Soon, eighty-six per cent of Indian banknotes will no longer be legal tender. Rarely has an appealing hypothetical encountered so extreme a test case.
The truth about trade agreements – and why we need them
Chad Bown (VoxEU) Nov 29, 2016
Trade agreements involving the US could be the first economic casualty of the 2016 election. The existing US trade agreements rose from the ashes of WWII and the Great Depression. This column argues that understanding how they protect the US economy, American workers, and consumers is critical to avoiding a repeat of the policy mistakes of earlier eras. Trade agreements involving the US could be the first economic casualty of the 2016 election. The existing US trade agreements rose from the ashes of WWII and the Great Depression. This column argues that understanding how they protect the US economy, American workers, and consumers is critical to avoiding a repeat of the policy mistakes of earlier eras.
Brexit's Bitter Winners
Owen Jones (NYT) Nov 30, 2016
An ugly, angry mood dominates Britain, where both the government and the opposition are in disarray.
Democracy and Democracies in Crisis
Carl Gershman (WA) Nov 30, 2016
The Western powers are weakening and the authoritarians are ascendent. The question is whether the West can summon the will and the unity to rise to the challenge.
Deconstructing Branko Milanovic’s “Elephant Chart”: Does It Show What Everyone Thinks?
Caroline Freund (PIIE) Nov 30, 2016
The problems of slow income growth afflicting low and middle class workers in rich countries are widely attributed to globalization. Within economic policy circles, a figure known as the “Elephant Chart,” produced by the former World Bank economist Branko Milanovic, seems to offer dramatic proof of...
Gordian Knot: Why Brazil’s Recession Could Last Until 2018
Monica de Bolle (PIIE) Nov 30, 2016
Bankrupt states, fiscal crises at all levels of government, rampant corruption scandals, a reform effort that has no immediate effect on Brazil's fiscal woes, and a resurgence of political turmoil. Six months into the Michel Temer administration, Brazil's Gordian Knot seems to only get worse.
Trump on Trade: A Few Cautions
Gary Clyde Hufbauer (PIIE) Nov 30, 2016
President-elect Donald Trump will possess ample statutory powers he needs to restrict all forms of international commerce, including merchandise and service trade, capital flows, and private remittances.
Trade and the Art of the Deal
R. Michael Gadbaw (PIIE) Nov 30, 2016
As the reality of governing settles in, it is time to turn the page on the discussion of what President Trump can do in the trade arena and consider what President Trump should do under the banner of “America First.”
Picking Losers Isn't a Great Industrial Policy
Justin Fox (Bloomberg View) Nov 30, 2016
Trump's saving jobs at Carrier won't do much to advance manufacturing.
What Makes America Great
Ricardo Hausmann (Project Syndicate) Nov 30, 2016
US President-elect Donald Trump’s campaign narrative was based on the assumption that the US has fallen from its former greatness, and that "America first" policies and opportunistic deal-making will restore it to its former glory. This constitutes a fundamental misunderstanding of what made America great in the first place.
How China Views Trump
Keyu Jin (Project Syndicate) Nov 30, 2016
Donald Trump’s stunning victory in the US presidential election has shaken the world. But China has remained largely unmoved, despite having been one of the president-elect's favorite targets on the campaign trail.
Latin America’s Trump Problem
Andrés Velasco (Project Syndicate) Nov 30, 2016
Donald Trump reached the White House by bringing out the worst in the US electorate, stoking xenophobic and other dangerous impulses to advance his campaign. The question for Latin Americans is whether his administration will bring on the worst – both economically and politically – for them.
Defending globalisation: Isolation would cost us dearly
Klaus Desmet, Dávid Krisztián Nagy and Esteban Rossi-Hansberg (VoxEU) Nov 30, 2016
Recent political events have highlighted a growing anti-globalisation sentiment, evident in scepticism towards free trade and resistance to immigration. However, existing analyses focus on short-term, local effects. Using global data, this column takes account of the complex relations between trade, migration, innovation, and growth. Liberal trade and immigration stances are found to have positive effects on global output. The results suggest that globalisation remains a tremendously powerful engine of growth.