News & Commentary:

Articles/Commentary

Imagining a World Without Growth
Eduardo Porter (NYT) Dec 1, 2015
To deflect climate change, some experts say the economic growth afforded by ample cheap fossil fuel must stop. But could the planet survive that?

Signs of froth in China’s debt market
Henny Sender (FT) Dec 1, 2015
Investors are driven by same quest for yield as counterparts elsewhere.

Understanding the new global oil economy
Martin Wolf (FT) Dec 1, 2015
If US imports fall, its interest in a stable Middle East will shrink as that of China and India rises.

Chinese Renminbi to Be Included in IMF’s Special Drawing Right Basket
IMF Survey Dec 1, 2015
The Chinese currency renminbi (RMB) is to be included in the basket of currencies which make up the IMF’s Special Drawing Right, or SDR.

Can the US Dollar Face Down the Chinese Yuan?
James G. Rickards (Mises Daily) Dec 1, 2015
Membership in the exclusive SDR currency club has changed only once in the past thirty years.

Mexico Shows Resilience In a Complex Global Environment
IMF Survey Dec 1, 2015
Mexico’s economy continues to grow at a moderate pace, despite an array of external challenges, including a collapse in oil prices and heightened volatility in international financial markets, the IMF said in its annual assessment of the Mexican economy.

Overcoming Europe’s Twin Growth Challenges
Michael Heise (Project Syndicate) Dec 1, 2015
As economic recovery finally begins to take hold in Europe, the imperative for policymakers is to ensure that growth can be sustained far into the future. To do so, they will have to address the biggest threat to the continent’s long-term prospects: a toxic twosome of weak demographics and low investment.

Antimicrobial Resistance on the Global Agenda
Jim O'Neill (Project Syndicate) Dec 1, 2015
Last month, the leaders of the G-20 agreed to put antimicrobial resistance on the group's agenda. The decision came not a moment too soon, as it coincided with some very bad news: the discovery of a strain of bacteria that is resistant even to antibiotics of last resort.

From Good Intentions to Deep Decarbonization
Jeffrey D. Sachs, Guido Schmidt-Traub and Jim Williams (Project Syndicate) Dec 1, 2015
In the run-up to the UN Climate Change Conference in Paris, many observers wondered whether plans submitted by more than 150 governments to reduce carbon emissions by 2030 would be enough. But there is a more important question: Will the chosen path to 2030 provide the basis for ending greenhouse-gas emissions later in the century?

The Low-Carbon Road
Nicholas Stern (F&D) Dec 1, 2015
The twin challenges of poverty and climate change are tightly interwoven.

From Death Sentence to Debt Sentence
Paul Collier, Richard Manning, and Olivier Sterck (F&D) Dec 1, 2015
Now that AIDS is controllable, financing treatment and investing in prevention must be the focus.

Investment Renaissance
Wenjie Chen, David Dollar, and Heiwai Tang (F&D) Dec 1, 2015
China is important to the increasing foreign investment in Africa, but its role is far from dominant.

The Insatiable Demand for Sand
Bruce Edwards (F&D) Dec 1, 2015
Deceptively abundant, the basic raw material for glass and concrete can't keep up with demand.

A Passport of Convenience
Judith Gold and Ahmed El-Ashram (F&D) Dec 1, 2015
Offering citizenship in return for investment is a win-win for some small states.

Down, But Not Out
Fahad Nazer (FA) Dec 1, 2015
How Saudi Arabia will avert an oil economy collapse.

Development and political connections of firms
Jiangtao Fu, Daichi Shimamoto and Yasuyuki Todo (VoxEU) Dec 1, 2015
It has been widely argued that firms obtain loans with relaxed terms if they are politically connected. This column presents evidence from Indonesia that firms whose owners or directors have a personal relationship with a politician are more likely to have their loans approved by state-owned banks, and are more likely to receive the full amount applied for. However, the labour productivity of such firms is on average lower. This suggests that in some cases, politically connected lending may distort the efficiency of resource allocation and be detrimental to economic development. It has been widely argued that firms obtain loans with relaxed terms if they are politically connected. This column presents evidence from Indonesia that firms whose owners or directors have a personal relationship with a politician are more likely to have their loans approved by state-owned banks, and are more likely to receive the full amount applied for. However, the labour productivity of such firms is on average lower. This suggests that in some cases, politically connected lending may distort the efficiency of resource allocation and be detrimental to economic development.

Blanchard and Leigh’s fiscal multipliers revisited
Jan Mohlmann and Wim Suyker (VoxEU) Dec 1, 2015
Olivier Blanchard and Daniel Leigh’s work on growth forecast errors and fiscal multipliers in 2009-2011 has been highly influential. This column extends their approach to recent years. The authors do not find convincing evidence for stronger-than-expected fiscal multipliers for EU countries during the sovereign debt crisis (2012-2013) or during the tepid recovery thereafter. Olivier Blanchard and Daniel Leigh’s work on growth forecast errors and fiscal multipliers in 2009-2011 has been highly influential. This column extends their approach to recent years. The authors do not find convincing evidence for stronger-than-expected fiscal multipliers for EU countries during the sovereign debt crisis (2012-2013) or during the tepid recovery thereafter.

Monetary policy expectations and aggregate EZ shocks
Máximo Camacho, Danilo Leiva-Leon and Gabriel Pérez-Quirós (VoxEU) Dec 1, 2015
Today's monetary policy effectiveness depends on expectations of future monetary policy. Shocks affect such expectations, but the nature of the shock matters. This column presents evidence that negative demand shocks lead markets to expect looser policy in the short run. Negative supply shocks lead to expectations of looser policy in the medium to long run. Unexpected expansions – from either the supply or demand side – have no significant influence on markets' expectations of future monetary policy. Today's monetary policy effectiveness depends on expectations of future monetary policy. Shocks affect such expectations, but the nature of the shock matters. This column presents evidence that negative demand shocks lead markets to expect looser policy in the short run. Negative supply shocks lead to expectations of looser policy in the medium to long run. Unexpected expansions – from either the supply or demand side – have no significant influence on markets' expectations of future monetary policy.

Carbon and inequality: From Kyoto to Paris
Lucas Chancel and Thomas Piketty (VoxEU) Dec 1, 2015
The COP21 conference faces a severe problem when it comes to funding climate adaptation in developing countries. This column examines novel strategies to increase the funding. The strategies are based on high individual carbon emitters wherever they are in the world, rather than according to the responsibilities of high-emitting countries. To this end, a global distribution of individual income and CO2e emissions is constructed. The COP21 conference faces a severe problem when it comes to funding climate adaptation in developing countries. This column examines novel strategies to increase the funding. The strategies are based on high individual carbon emitters wherever they are in the world, rather than according to the responsibilities of high-emitting countries. To this end, a global distribution of individual income and CO2e emissions is constructed.

India cannot take growth for granted
David Pilling (FT) Dec 2, 2015
Reform is slow and the country lags behind peers in healthcare, literacy and women’s rights.

The BoE is a dove with clipped wings
Chris Giles (FT) Dec 2, 2015
Monetary policy is impeded and it is now out of ammunition.

M&As are under close scrutiny, rightly so
Sarah Gordon (FT) Dec 2, 2015
Many studies have shown that deals often fail to deliver value for shareholders.

Time to change the investment recipe
Edouard Carmignac (FT) Dec 2, 2015
Fragility of world equity markets warrants a low risk exposure.

Brazil: Confiscating Confidence
Monica de Bolle (PIIE) Dec 2, 2015
If there is no growth in the fourth quarter of 2015—an optimistic assumption given Brazil's escalating crisis—GDP will fall by 3.5 percent this year. The 2015 recession will thus be the worst slump since 1990, when activity dropped 4.4 percent as a result of the infamous Collor Plan, a desperate and unsuccessful attempt to bring down rampant 4-digit inflation by confiscating people's savings.

Trends in International Reserves, China Aside
Owen Hauck (PIIE) Dec 2, 2015
The International Monetary Fund's (IMF) Currency Composition of Official Foreign Exchange Reserves (COFER) database, released quarterly, is critical to shedding light on the state of the global economy. The latest release shows that while the dollar continues to be an important reserve currency, reserves are also diversifying towards nontraditional currencies.

Keeping capital flows orderly
Adrian Blundell-Wignall (OECD Insights) Dec 2, 2015
The global financial and economic crisis of 2008 left the international monetary system with vulnerabilities caused by volatile capital flows and spillovers from national policy responses, even if international co-operation helped to avoid the scale of restrictions on goods and capital flows that prolonged the Great Depression of the 1930s.

What the IMF's Yuan Decision Will Mean for China and Global Markets
Knowledge@Wharton Dec 2, 2015
As China prepares for the yuan to join an elite club, it has the opportunity to expedite financial reforms and bring transparency to its currency.

China's Steel Mills Need to Shrink
Adam Minter (Bloomberg View) Dec 2, 2015
The country needs to transition to modern 'mini-mills,' as the U.S. has.

The Copenhagen-Paris Express
Lars Christian Lilleholt (Project Syndicate) Dec 2, 2015
In 2009, when Copenhagen hosted the UN Climate Change Conference, the global financial crisis and national special interests conspired to derail a comprehensive deal. Six years later, the political environment is very different, and there is reason to believe that this year's conference in Paris will produce a robust agreement.

China’s Online Financial Sector Comes of Age
Liu Mingkang (Project Syndicate) Dec 2, 2015
Online peer-to-peer lending may hold the key to expanding and deepening China’s financial sector, enabling firms to grow, and bolstering domestic consumption. But the very factors fueling P2P platforms' rapid growth – their reliance on credit-ratings databases and eschewal of collateral or guarantees – can generate serious risks.

The Great Policy Divergence
Mohamed A. El-Erian (Project Syndicate) Dec 2, 2015
Over the next few weeks, the US Federal Reserve is expected to raise interest rates, while the European Central Bank doubles down on monetary stimulus. Although both central banks are pursuing legitimate domestic agendas, there are few mechanisms to manage the international repercussions of this policy disparity.

EZ internal devaluations and negative demand spillovers
Jörg Decressin and Prakash Loungani (VoxEU) Dec 2, 2015
Internal devaluations have been suggested as a possible policy option for countries in a currency union facing large external deficits. These policy actions seek to restore competitiveness by replicating the outcomes of an external devaluation. This column examines wage moderation as a potential means of internal devaluation for EZ countries. If pursued by several countries, wage moderation can work if monetary policy is not constrained by the zero lower bound, or if supported by quantitative easing. Without sufficient monetary accommodation, it will not deliver much of a boost to output, and may hurt overall EZ output. Internal devaluations have been suggested as a possible policy option for countries in a currency union facing large external deficits. These policy actions seek to restore competitiveness by replicating the outcomes of an external devaluation. This column examines wage moderation as a potential means of internal devaluation for EZ countries. If pursued by several countries, wage moderation can work if monetary policy is not constrained by the zero lower bound, or if supported by quantitative easing. Without sufficient monetary accommodation, it will not deliver much of a boost to output, and may hurt overall EZ output.

RMB’s international vs regional role
Barry Eichengreen and Domenico Lombardi (VoxEU) Dec 2, 2015
China’s currency will form part of the IMF’s Special Drawing Rights basket. This column discusses whether the renminbi will assume an international role, or mostly a regional-currency role in Asia. China’s currency will form part of the IMF’s Special Drawing Rights basket. This column discusses whether the renminbi will assume an international role, or mostly a regional-currency role in Asia.

Puzzle Yellen cannot solve with a rate rise
Gillia Tett (FT) Dec 3, 2015
The productivity paradox reminds us how little we understand about the US economy.

Political class fiddles as Brazil burns
Joe Leahy (FT) Dec 3, 2015
Nation faces uncertainty by starting what promises to be long and possibly inconclusive process.

Common, flawed investor assumptions
Dan McCrum (FT) Dec 3, 2015
US payrolls and Opec have power to upend market trends.

Crunch Time in Geneva as Trade Negotiators Prepare for WTO Ministerial
Bridges, Volume 19, Number 41 Dec 3, 2015
Less than two weeks remain before trade ministers begin their biennial conference in Nairobi, Kenya, with WTO members still deeply divided on specific deliverables and how to address the organisation's future negotiating work, including the Doha Round.

World Leaders Buoy Start of Difficult UN Climate Talks
Bridges, Volume 19, Number 41 Dec 3, 2015
Over 150 heads of state and government voiced support for a global effort to tackle climate change during the opening of a pivotal UN climate conference in Paris, France, on Monday 30 November, providing a significant wave of political momentum for talks designed to hammer out a new emissions-cutting regime.

China Invited to Join IMF Currency Basket
Bridges, Volume 19, Number 41 Dec 3, 2015
The Executive Board of the International Monetary Fund (IMF) confirmed on Monday 30 November that it would be inviting China to join the other four currencies included in its Special Drawing Rights (SDR) basket, in what has been heralded as a landmark move for Beijing.

UK Reform Discussions Continue, With Eye on December Meet
Bridges, Volume 19, Number 41 Dec 3, 2015
Negotiations on potential reforms to the UK's membership in the 28-nation EU continue, with officials eyeing a December leaders' summit for possible indications on the way forward.

Monetary Policy in Developing Countries: The Way Forward
IMF Survey Dec 3, 2015
Many low- and lower-middle income countries are seeking to implement modern monetary policy frameworks that better anchor inflation and promote macroeconomic stability and growth, according to a new study from the International Monetary Fund.

Mario Draghi's Impossible Task
Bloomberg View Dec 3, 2015
Easy money is part of what Europe's economy needs -- but only part.

ECB Had One Win. Revise That Down to Zero.
Mark Gilbert (Bloomberg View) Dec 3, 2015
The weak euro, the only real stimulus, is not so weak anymore.

More ECB Stimulus Raises the Question of Insanity
Mark Gilbert (Bloomberg View) Dec 3, 2015
Quantitative easing isn't working, but Mario Draghi will keep trying.

ECB Shows It Can't Be Markets' Best Friend Forever
Mohamed A. El-Erian (Bloomberg View) Dec 3, 2015
Draghi disappoints with measures that didn't meet unrealistic expectations.

Silicon Valley Everywhere
Carlo Ratti (Project Syndicate) Dec 3, 2015
For decades, Silicon Valley was the unparalleled epicenter of high-tech innovation, and regions that tried to imitate its success did not succeed. But recently, the competition has gotten fiercer – and, unlike the original, it is overwhelmingly centered in urban areas.

The price of oil and the price of carbon
Rabah Arezki, Maurice Obstfeld (VoxEU) Dec 3, 2015
Oil prices have dropped by over 60% since June 2014, and natural gas and coal have also seen price declines that look to be similarly long-lived. This column argues that action to restore appropriate price incentives, notably through corrective carbon pricing, is urgently needed to lower the risk of irreversible and potentially devastating effects of climate change. The hope is that the success of COP21 opens the door to future international agreement on carbon prices. Oil prices have dropped by over 60% since June 2014, and natural gas and coal have also seen price declines that look to be similarly long-lived. This column argues that action to restore appropriate price incentives, notably through corrective carbon pricing, is urgently needed to lower the risk of irreversible and potentially devastating effects of climate change. The hope is that the success of COP21 opens the door to future international agreement on carbon prices.

Asset price inflation: EZ Winners and losers
Klaus Adam and Panagiota Tzamourani (VoxEU) Dec 3, 2015
Central banks’ unconventional monetary policy measures are often accompanied by asset price changes. This column investigates the distributional effects associated with asset price increases. The findings show that house price increases lead to a significant decrease in net wealth inequality in the Eurozone, whereas equity price increases lead to a significant rise in inequality. Bond price growth leaves net wealth inequality largely unchanged. Central banks’ unconventional monetary policy measures are often accompanied by asset price changes. This column investigates the distributional effects associated with asset price increases. The findings show that house price increases lead to a significant decrease in net wealth inequality in the Eurozone, whereas equity price increases lead to a significant rise in inequality. Bond price growth leaves net wealth inequality largely unchanged.

China Creates a World Bank of Its Own, and the U.S. Balks
Jane Perlez (NYT) Dec 4, 2015
In setting up the Asian Infrastructure Investment Bank, China enlisted American allies, including Britain, even as Washington expressed skepticism.

Argentina: What Next?
Martin Hutchinson (Globalist) Dec 4, 2015
What are the country’s prospects after the surprise victory in the presidential elections?

Brazil's No-Win Impeachment Battle
Bloomberg View Dec 4, 2015
The real issue is a statist model that fuels corruption and holds back development.

The ECB's Covert Monetary Financing Is Risky Business
Jean-Michel Paul (Bloomberg View) Dec 4, 2015
The ECB is effectively helping governments retire their debt.

Debate: Is More Easy Money Good for Europe?
Clive Crook (Bloomberg View) Dec 4, 2015
ECB stimulus hasn't pulled Europe out of its funk. Will more help or hurt?

OPEC Fights to Stay Relevant
Leonid Bershidsky (Bloomberg View) Dec 4, 2015
Official change in oil production won't change price much.

Unlocking Climate Finance
Luis Alberto Moreno (Project Syndicate) Dec 4, 2015
Persuading the private sector that climate finance can be good business will be the key to unlocking the capital required to decarbonize our economies and make them more resilient to harsher weather conditions. Several projects in Latin America and the Caribbean point the way.

The Trans-Pacific Partnership
Various (Wilson Perspectives) Dec 4, 2015
By any measure, the Trans-Pacific Partnership is the 21st century's most significant trade agreement. In this edition of “Wilson Perspectives,” our experts cover what's new and old in the trade deal, its future in the United States, and its impact around the globe.

From Atoms to People to Economies
César A. Hidalgo (Evonomics) Dec 4, 2015
It's time to ask what information is and why it grows.

In Nigeria, Chinese Investment Comes With a Downside
Kaith Bradsher and Adam Nossiter (NYT) Dec 5, 2015
Like other developing countries, Nigeria has welcomed Chinese trade, but that relationship has left the country awash in shoddy imported goods and has cost many Nigerians their jobs.

Modi and India’s “Act East” Policy
Tridivesh Singh Maini (Globalist) Dec 5, 2015
Can India “Make It” in Southeast Asia?

End of the Road
EPW Vol. L No. 49 Dec 5, 2015
The 14-year-long tortured Doha Round may be effectively buried in Nairobi this month.

On sub-Saharan Africa’s low adoption of high-tech farm inputs
Tessa Bold (VoxEU) Dec 5, 2015
With the introduction of new technologies such as fertiliser and hybrid seeds, agricultural productivity has experienced an unprecedented rise in the past decades in almost all parts of the world. But not in Sub-Saharan Africa. This column studies the fertilisers available in Sub-Saharan Africa. It turns out that there is a huge variation in terms of fertiliser quality. Farmers should be meaningfully integrated into markets and supply chains to ensure quality and trust. With the introduction of new technologies such as fertiliser and hybrid seeds, agricultural productivity has experienced an unprecedented rise in the past decades in almost all parts of the world. But not in Sub-Saharan Africa. This column studies the fertilisers available in Sub-Saharan Africa. It turns out that there is a huge variation in terms of fertiliser quality. Farmers should be meaningfully integrated into markets and supply chains to ensure quality and trust.

Measuring the gains from input trade
Joaquin Blaum, Claire Lelarge and Michael Peters (VoxEU) Dec 5, 2015
As intermediate inputs account for two thirds of world trade, understanding the implications of input trade is an important task in international economics. This column argues that spending patterns on foreign inputs at the firm-level are key to quantifying the welfare consequence of input trade, as trade in intermediates allows firms to reduce their costs of production thereby benefitting the aggregate economy. It estimates that a 20% drop in the share of imported inputs in France would lead to a 7% increase in the consumer price index. As intermediate inputs account for two thirds of world trade, understanding the implications of input trade is an important task in international economics. This column argues that spending patterns on foreign inputs at the firm-level are key to quantifying the welfare consequence of input trade, as trade in intermediates allows firms to reduce their costs of production thereby benefitting the aggregate economy. It estimates that a 20% drop in the share of imported inputs in France would lead to a 7% increase in the consumer price index.

Fiscal multipliers during consolidation: Evidence from the European Union
Alessandro Cugnasca and Philipp Rother (VoxEU) Dec 5, 2015
The size of fiscal multipliers has been the subject of major public policy debates in the past few years. This column provides evidence that, on average, the size of the fiscal multiplier is in line with assumptions made by policymakers at the start of the crisis. The effects of fiscal consolidation, however, vary significantly depending on the state of the economy and the composition of the fiscal adjustment. The size of fiscal multipliers has been the subject of major public policy debates in the past few years. This column provides evidence that, on average, the size of the fiscal multiplier is in line with assumptions made by policymakers at the start of the crisis. The effects of fiscal consolidation, however, vary significantly depending on the state of the economy and the composition of the fiscal adjustment.

Central banks wrong about room for action
Lawrence Summers (FT) Dec 6, 2015
The unresolved question is how policy can delay and ultimately contain the next recession.

Europe will stumble before it stands tall
Wolfgang Munchau (FT) Dec 6, 2015
I foresee a gradual erosion of the EU that leaves it as a glorified free-trade zone.

How Britain Got Its Mojo Back
George Osborne (WSJ) Dec 6, 2015
With economic security restored, we can project our values—values shared with the U.S.—abroad.

Yuan Move Is Good for China's Politics
Noah Feldman (Bloomberg View) Dec 6, 2015
IMF shows faith in how Beijing selects its leadership.

Migrant workers key driver of Chinese consumption
Meiyan Wang and Fang Cai (EAF) Dec 6, 2015
For consumption to play a more significant role in boosting China's economic development, the government needs to focus on unlocking the consumption potential of migrant workers who are a major driver of structural change and urbanisation in the Chinese economy.

Global crisis: Beyond bank balance sheets
Nikolaos I. Papanikolaou and Christian C. P. Wolff (VoxEU) Dec 6, 2015
In the years running up to the global crisis, the banking sector was marked by a high degree of leverage. Using US data, this column shows how, before the onset of the crisis, banks accumulated leverage both on and, especially, off their balance sheets. The latter activities saw an increase in maturity mismatch, raised the probability of bank runs, and increased both individual bank risk and systemic risk. These findings support the imposition of an explicit off-balance sheet leverage ratio in future regulatory frameworks. In the years running up to the global crisis, the banking sector was marked by a high degree of leverage. Using US data, this column shows how, before the onset of the crisis, banks accumulated leverage both on and, especially, off their balance sheets. The latter activities saw an increase in maturity mismatch, raised the probability of bank runs, and increased both individual bank risk and systemic risk. These findings support the imposition of an explicit off-balance sheet leverage ratio in future regulatory frameworks.

Cut fossil-fuel subsidies to benefit all
Ngozi Okonjo-Iweala (FT) Dec 7, 2015
The prop on petrol prices was hurting the national budget.

Why ECB’s QE won’t work for the eurozone
Alberto Gallo (FT) Dec 7, 2015
Easing will have limited impact on the eurozone’s real economy.

What the WTO Can Learn from Paris Climate Talks
Robert Lawrence and Robert Stavins (Boston Globe/PIIE) Dec 7, 2015
For many years, negotiators at the annual conferences of the United Nations Framework Convention on Climate Change looked longingly at how the World Trade Organization (WTO) was able to negotiate effective international agreements. Ironically, the Paris climate talks that are scheduled to conclude on Friday and the WTO negotiations, which will take place next week in Nairobi, lead to the opposite conclusion. Trade negotiators should emulate the progress made in the climate change agreements by moving away from a simplistic division between developed and developing countries.

OPEC's Divisions Keep Oil Low and Volatile
Mohamed A. El-Erian (Bloomberg View) Dec 7, 2015
Shale technology and falling demand create an unhinged market.

Immigration Is Tough for Japan
Noah Smith (Bloomberg View) Dec 7, 2015
But it's the solution for population loss.

Development Zones for Syrian Refugees
Markus Brunnermeier, Harold James and Hannes Malmberg (Project Syndicate) Dec 7, 2015
The Syrian refugee crisis is putting the EU under great pressure to reconcile its responsibility to help those fleeing war with its limited capacity to absorb new arrivals. The EU should collaborate with countries now hosting refugees to establish economic zones where refugees are allowed to work legally.

When Inequality Kills
Joseph E. Stiglitz (Project Syndicate) Dec 7, 2015
This week, Angus Deaton will deservedly receive the Nobel Memorial Prize in Economics “for his analysis of consumption, poverty, and welfare.” Soon after the award was announced in October, Deaton published some startling research with Anne Case – findings that are at least as newsworthy as the Nobel ceremony.

Micro uncertainty and macro slowdowns
Emmanuel de Veirman (VoxEU) Dec 7, 2015
Firms are believed to have more uncertain prospects during recessions, possibly deepening economic downturns. This column argues that the relationship between firm uncertainty and GDP growth is much weaker than is commonly assumed. Further, firms’ prospects were not particularly uncertain during the Great Recession. Lastly, firm-specific uncertainty does not appear to have an important effect on the business cycle. Firms are believed to have more uncertain prospects during recessions, possibly deepening economic downturns. This column argues that the relationship between firm uncertainty and GDP growth is much weaker than is commonly assumed. Further, firms’ prospects were not particularly uncertain during the Great Recession. Lastly, firm-specific uncertainty does not appear to have an important effect on the business cycle.

The shrinking planetary GDP
Peter A.G. van Bergeijk (VoxEU) Dec 7, 2015
The analysis and forecasts of the IMF are well covered in the press. This column deals with a less noted development in the data provided by the IMF, namely the nominal decrease in Gross Planet Product. Since the IMF forecast both positive growth and positive inflation, the nominal shrinkage of GPP puts into question the consistency of the IMF World Economic Outlook data and forecasts. The analysis and forecasts of the IMF are well covered in the press. This column deals with a less noted development in the data provided by the IMF, namely the nominal decrease in Gross Planet Product. Since the IMF forecast both positive growth and positive inflation, the nominal shrinkage of GPP puts into question the consistency of the IMF World Economic Outlook data and forecasts.

The challenges of central bank divergence/A>
Martin Wolf (FT) Dec 8, 2015
The US is years ahead of the EU in recovery and so at a different stage of the monetary policy cycle.

Energy storage is no longer just hot air
Nick Butler (FT) Dec 8, 2015
Cheaper technology will start to challenge the existing energy system within five years.

Capital flows crucial for global assets
John Plender (FT) Dec 8, 2015
Sovereign wealth funds and decline in China’s reserves are significant forces.

Commodities: Material revolution
Henry Sanderson (FT) Dec 8, 2015
As oil, steel and coal prices hit new lows, demand is rising for other metals, prompting a new technology-driven resource era.

Government Debt Is Not Like Private Debt
Simon Wilson (Mises Daily) Dec 8, 2015
With Government, "Living Beyond Your Means" Is a Moral Problem.

Let Countries Trade Carbon
Jonah Busch (CGD) Dec 8, 2015
Québec does it with California. Mexico wants to do it with California too, while California wants to do it with a Brazilian state. European countries have been doing it with each other for years, and China's started doing it with itself. And while some find it icky, the future of our species depends on it happening. It, of course, is carbon trading.

The WTO Turns 20, But Will It Make It to 30?
Kimberly Ann Elliott (CGD) Dec 8, 2015
The recently agreed upon but not yet signed Trans-Pacific Partnership (TPP), which will cover 12 countries and 40 percent of global GDP, is certain to loom large as the World Trade Organization (WTO) celebrates its 20th anniversary in Nairobi next week. For US trade negotiators, conclusion of the TPP deal means they can turn their attention to talks with the European Union on the Transatlantic Trade and Investment Partnership.

The Tech Revolution Fails to Deliver
Leonid Bershidsky (Bloomberg View) Dec 8, 2015
New technologies aren't supercharging productivity growth anymore.

China Needs Layoffs, Not Just Jobs
Michael Schuman (Bloomberg View) Dec 8, 2015
Keeping workers on the rolls is preventing much-needed reforms.

The Renewable Energy Revolution
John A. Mathews (Project Syndicate) Dec 8, 2015
In the US and Europe, the benefits of renewable energy are predominantly regarded as environmental. In China and India, the rapid roll-out of renewable energy sources is driven by economic concerns and a virtuous circle of cost reduction and investment.

The Battle for Britain
Philippe Legrain (Project Syndicate) Dec 8, 2015
British Prime Minister David Cameron has outlined his proposals for EU reforms, but hope that Europe's leaders will soon clinch a deal to keep the UK from leaving the Union is fading. In any case, a deal by itself is unlikely to persuade undecided Britons ahead of a referendum on the issue – which could be held as soon as next year.

Whatever Happened to EU Subsidiarity?
Till Olbrich and Rudolf Rayle (Project Syndicate) Dec 8, 2015
The principle of subsidiarity, enshrined in 1992 in the EU’s founding treaties, holds that decisions should be made locally whenever possible. But while Europe's politicians have paid lip service to the principle, in practice it has all too often been ignored.

Measuring the concentration of wealth
Facundo Alvaredo, Tony Atkinson and Salvatore Morelli (VoxEU) Dec 8, 2015
The concentration of personal wealth has received a lot of attention since the publication of Thomas Piketty’s Capital in the 21st Century. This column investigates the UK and finds wealth distribution to be highly concentrated. The data seem to suggest that the top wealth share has increased in the UK over the first decade of this century. The concentration of personal wealth has received a lot of attention since the publication of Thomas Piketty’s Capital in the 21st Century. This column investigates the UK and finds wealth distribution to be highly concentrated. The data seem to suggest that the top wealth share has increased in the UK over the first decade of this century.

Tighter policy will mean lower bond yields
Steven Major (FT) Dec 9, 2015
History cannot be a guide to the path of unconventional tightening.

The fiction of unified, harmonised Asean
David Pilling (FT) Dec 9, 2015
The bloc favours consensus. Its lack of overarching ambition is a strength as well as its weakness.

Russia wants fair rules on sovereign debt
Anton Siluanov (FT) Dec 9, 2015
Moscow has no desire to see IMF stop Ukraine’s funding but it has concerns.

What China Can Learn From Greece
Sergei Guriev (NYT) Dec 9, 2015
A turbulent year revives the debate over whether democracy delivers prosperity.

Italy Needs a Cure for Its Bad-Debt Headache
Mark Gilbert (Bloomberg View) Dec 9, 2015
Non-performing loans risk smothering Italy's nascent recovery.

Was 'Plastics' the Right Advice in 1967?
Justin Fox (Bloomberg View) Dec 9, 2015
The industry's growth rarely beat that of the overall economy.

The Evolution of Work
Dani Rodrik (Project Syndicate) Dec 9, 2015
There is good and bad news for the future of work in developing countries. Improved social policy and labor rights can make workers full stakeholders in their economies much earlier in the development process; but, with industrialization operating at much lower capacity worldwide, fewer may gain this opportunity.

Stability bonds for the Eurozone
Ángel Ubide (VoxEU) Dec 9, 2015
The diversity of European economic cycles, economic structures, and political dynamics is a strength of the Eurozone. However, sustainable arrangements are required to distribute risks and ensure that all countries can use fiscal policy to cushion economic downturns. This column proposes the creation of a system of stability bonds for the Eurozone. These could be structured to minimise moral hazard, improve governance, and ensure that fiscal policy can support growth during the next recession. The diversity of European economic cycles, economic structures, and political dynamics is a strength of the Eurozone. However, sustainable arrangements are required to distribute risks and ensure that all countries can use fiscal policy to cushion economic downturns. This column proposes the creation of a system of stability bonds for the Eurozone. These could be structured to minimise moral hazard, improve governance, and ensure that fiscal policy can support growth during the next recession.

International macroeconomic policy coordination
Jeffrey Frankel (VoxEU) Dec 9, 2015
Calls for coordination of macroeconomic policy have made a comeback since the Global Crisis. This column reviews this return of international policy coordination, both in terms of fiscal and monetary policy. It discusses recent developments and considerations in fiscal and monetary policy games, and cautions that most but not all calls for coordination are useful. Calls for coordination of macroeconomic policy have made a comeback since the Global Crisis. This column reviews this return of international policy coordination, both in terms of fiscal and monetary policy. It discusses recent developments and considerations in fiscal and monetary policy games, and cautions that most but not all calls for coordination are useful.

China and the global value chain: New evidence
Hiau Looi Kee and Heiwai Tang (VoxEU) Dec 9, 2015
While domestic content in exports has been declining globally, the opposite trend has been observed in China. This column argues that this is mainly due to the structural transformation and FDI liberalisation in the country since 2000. As a result, individual processing exporters have substituted domestic for imported materials, both in terms of volume and varieties. These results indicate that China has become more competitive, particularly in the intermediate input sectors, which supports its ascent along the global value chains. While domestic content in exports has been declining globally, the opposite trend has been observed in China. This column argues that this is mainly due to the structural transformation and FDI liberalisation in the country since 2000. As a result, individual processing exporters have substituted domestic for imported materials, both in terms of volume and varieties. These results indicate that China has become more competitive, particularly in the intermediate input sectors, which supports its ascent along the global value chains.

The minefield of China’s retail investors
Jennifer Hughes (FT) Dec 10, 2015
International backers will struggle with Mrs Wong’s trading style.

Fixing the Falling Yuan
WSJ Dec 10, 2015
China needs a currency regime that allays fears of devaluation.

The Oil-Patch Bust
WSJ Dec 10, 2015
The jobs and company carnage is growing as Congress dawdles over the export ban.

SDGs Ready To Go? Far From It.
Casey Dunning (CGD) Dec 10, 2015
After almost four years and much fanfare, 193 nations agreed to 17 Sustainable Development Goals (SDGs) and their associated 169 targets at last September’s UN Summit. You’d probably then assume that we’re all set to start the SDG agenda on January 1, 2016. Not quite so fast. Arguably the most important part of the agenda – the indicators that will determine what we actually measure and how we judge progress – has yet to be decided.

WTO Ministerial: A Time for Reflection in Nairobi on the Future of Global Trade
Bridges, Volume 19, Number 42 Dec 10, 2015
This backgrounder provides a brief overview and analysis of the dynamics and recent history of the WTO negotiations, as well as the potential implications of the Nairobi ministerial, in the context of the ever-evolving structure of global trade governance.

Towards new rules for agricultural markets?
Bridges, Volume 19, Number 42 Dec 10, 2015
This backgrounder provides an overview of the WTO discussions regarding a possible deal on export competition, as well as proposals on a special safeguard mechanism and public food stockholding, among others.

From Bali to Nairobi: Securing a meaningful outcome for LDCs
Bridges, Volume 19, Number 42 Dec 10, 2015
This backgrounder provides an overview of the various elements of a potential package of least developed country (LDC) issues that have been under negotiation ahead of the Nairobi ministerial.

Why Gold-Backed Money Doesn’t Bring Booms and Busts
Frank Shostak (Mises Daily) Dec 10, 2015
According to popular thinking, not every increase in the supply of money will have an effect on economic activity.

Invaders Can't Expect Debt Repayment
Leonid Bershidsky (Bloomberg View) Dec 10, 2015
Negotiating over a $3 billion bond, Russia and Ukraine are fighting about Crimea without mentioning Crimea.

Argentina's Long, Long History of Underperformance
Justin Fox (Bloomberg View) Dec 10, 2015
A leader became a laggard. Why didn't Argentina build on its early wealth from commodities?

Now Comes the Hard Part for Argentina's Next President
Mac Margolis (Bloomberg View) Dec 10, 2015
Macri must win over a hostile congress to take even small steps. And big steps are needed.

The End of Coal*
Geoff Dembicki (FP) Dec 10, 2015
As the world finalizes a plan in Paris to fight climate change, the future of coal is looking grim. *But it might be a long slow death.

Argentina’s New President Wants to Change the Way Latin America Does Business
Jason Marczak and Peter S. Rashish (FP) Dec 10, 2015
Mauricio Macri is taking power with a mandate to jumpstart his country's flagging economy. But can he tip the region towards free trade?

Today’s Productivity Paradox
Barry Eichengreen (Project Syndicate) Dec 10, 2015
Recent trends in productivity growth make it hard to be optimistic about the future. But some historical perspective is in order: When radical innovations are first rolled out, their immediate effect is to reduce, not raise, productivity.

Can Paris Reconcile Political and Economic Interests to Combat Climate Change?
David Dapice (YaleGlobal) Dec 10, 2015
Politics, not economics, curtails smart investments to prevent climate change.

Grading the Trans-Pacific Partnership on trade
Derek Scissors (AEI) Dec 10, 2015
The Trans-Pacific Partnership has severe weaknesses as a trade agreement. It offers both commercial and diplomatic benefits, but its value is undermined by extensive nonconforming measures, by rules of origin that risk blocking gains from both the Trans-Pacific Partnership (TPP) and future deals, and by grossly inadequate treatment of state-owned enterprises. Many American business groups may see the TPP as an improvement over current global rules and therefore worthwhile for individual issues, but they will typically not consider the national interest. Within the next decade, some TPP rules could become anchors holding the US back. To get where the US needs to go, current TPP terms will have to be changed considerably. Ratifying the existing TPP can make the path only more difficult.

Fiscal policy for enduring growth
Marco Buti and Vitor Gaspar (VoxEU) Dec 10, 2015
Designing fiscal policy for today’s complex and uncertain economic climate is a problem that perplexes governments worldwide. This column proposes a solution – a new fiscal architecture with strengthened but budget-neutral automatic stabilisers. It won’t be easy, but overcoming predominantly political challenges will help foster steady and enduring growth. Designing fiscal policy for today’s complex and uncertain economic climate is a problem that perplexes governments worldwide. This column proposes a solution – a new fiscal architecture with strengthened but budget-neutral automatic stabilisers. It won’t be easy, but overcoming predominantly political challenges will help foster steady and enduring growth.

In praise of post-financial crash paranoia
Rupert Harrison (FT) Dec 11, 2015
Do not let improving economic prospects endanger hard-won discipline.

Why Poland Is Turning Away From the West
Ivan Krastev (NYT) Dec 11, 2015
The country is a post-communist success story. So why is it moving away from liberal democracy?

Is the European Union Up to the Task of Immigration?
Jacob Funk Kirkegaard (PIIE) Dec 11, 2015
With the heads of Europe preparing to meet next week, leaked documents reported by the Financial Times suggest that their response to the emergency posed by immigration from the Middle East and Africa will be inadequate. By ensuring that nothing effective will be done to address the crisis, they are likely to anger European voters and unsettle the political outlook in Europe.

High Marks for the Paris Climate Agreement
Jonah Busch (CGD) Dec 11, 2015
The climate agreement from Paris is far-reaching in its implications. The countries of the world have just stated their collective aim for global greenhouse gas emissions to peak as soon as possible, decline rapidly, and reach near-zero in the second half of the century. Two hundred governments have just sent a powerful signal that the future they want is low-carbon: energy without fossil fuels; agriculture without deforestation.

Piketty Is Wrong: Markets Don’t Concentrate Wealth
Louis Rouanet (Mises Daily) Dec 11, 2015
The old Marxist apocalyptical fear of ever-rising inequality in capitalist societies is growing.

Rising Rates: Dispelling the Myth
Scott A. Mather and David Fisher (PIMCO) Dec 11, 2015
With bond yields low and the Federal Reserve set to embark on an interest rate hiking cycle, many investors have concerns. A reasoned analysis suggests that rising rates may not be a threat to bond investors. Investors who overreact to the prospect of rising interest rates may be doing themselves – and their investment portfolios – a disservice.

IMF Therapy for Brazil
Monica de Bolle and Ernesto Talvi (Project Syndicate) Dec 11, 2015
Brazil is trapped in a vicious circle: Even if the government were willing and able to carry out the necessary fiscal adjustment, credibility has been too severely damaged by the Petrobras scandal to make progress in the near term. In this context, negotiating an IMF adjustment program is the country's best option.

The Renminbi Goes Forth
Paola Subacchi (Project Syndicate) Dec 11, 2015
The Nobel laureate Robert Mundell once said, “great powers have great currencies.” As China aims to position itself among the world's great powers, its efforts to build a great currency – efforts that recently got the renminbi added to the currency basket that determine the value of the IMF's reserve asset – have taken center stage.

Putin’s New Prudence
Anders Åslund (Project Syndicate) Dec 11, 2015
This year, the Russian economy is the G-20’s worst performer, and things could easily have been worse. President Vladimir Putin claims that his economic policies remain consistent; in fact, he has wisely changed course, limiting the damage that could have been done had he not.

The choice of numeraire matters when calculating world GDP growth
Maurice Obstfeld, Oya Celasun, Mandy Hemmati and Gian Maria Milesi-Ferretti (VoxEU) Dec 11, 2015
IMF data showed that the dollar value of ‘planetary GDP’ fell in 2015, but the IMF projects that world real GDP growth and inflation will be positive. This column notes that there is no inconsistency here. The decline in the dollar value of ‘planetary GDP’ reflects the 2015 increase in the value of the US dollar, not calculation errors or inconsistencies between real growth, inflation, and nominal GDP projections. The choice of numeraire matters in measuring nominal GDP growth, especially in years with very large currency movements such as the ones we have seen this year. IMF data showed that the dollar value of ‘planetary GDP’ fell in 2015, but the IMF projects that world real GDP growth and inflation will be positive. This column notes that there is no inconsistency here. The decline in the dollar value of ‘planetary GDP’ reflects the 2015 increase in the value of the US dollar, not calculation errors or inconsistencies between real growth, inflation, and nominal GDP projections. The choice of numeraire matters in measuring nominal GDP growth, especially in years with very large currency movements such as the ones we have seen this year.

Some unpleasant Brexit econometrics
Nauro F. Campos and Fabrizio Coricelli (VoxEU) Dec 11, 2015
Whatever the result of Britain’s upcoming in-or-out referendum on EU membership, its relationship with the EU will change substantially. To assess these changes, it is important to understand how Britain has benefited from EU membership. This column argues that EU membership has brought benefits through three key mechanisms – trade, foreign investment, and finance. The current focus on UK exports to and imports from the EU may severely underestimate the true potential costs to Britain of Brexit. Whatever the result of Britain’s upcoming in-or-out referendum on EU membership, its relationship with the EU will change substantially. To assess these changes, it is important to understand how Britain has benefited from EU membership. This column argues that EU membership has brought benefits through three key mechanisms – trade, foreign investment, and finance. The current focus on UK exports to and imports from the EU may severely underestimate the true potential costs to Britain of Brexit.

Interest rates in America: Buckle up
Economist Dec 12, 2015
The first of three pieces on the Federal Reserve’s imminent interest-rate decision looks at whether America is ready for lift-off

Buttonwood: Taking the training wheels off
Economist Dec 12, 2015
Markets must learn how to survive without the Fed’s help.

Inside the commodity trader Vitol that pulls the levers of the global economy
Ben Marlow (Telegraph) Dec 12, 2015
Simply put, Vitol is one of the biggest trading companies on the planet and the ninth largest corporation in the world by revenue.

Global teams for inventive work
Sari Pekkala Kerr and William Kerr (VoxEU) Dec 12, 2015
The globalisation of innovation is proceeding at a fast pace. This column argues that the ethnic composition of a firm’s US-based inventive work force is an important factor in whether the firm engages in international collaborations. Collaborative patents are often utilised when a US public company is entering into a new foreign region for innovative work. This is especially notable in markets with weak intellectual property protections. The globalisation of innovation is proceeding at a fast pace. This column argues that the ethnic composition of a firm’s US-based inventive work force is an important factor in whether the firm engages in international collaborations. Collaborative patents are often utilised when a US public company is entering into a new foreign region for innovative work. This is especially notable in markets with weak intellectual property protections.

History and the destination of emerging market capital outflows
George Andrew Karolyi, David Ng and Eswar Prasad (VoxEU) Dec 12, 2015
Few economists understate the importance of emerging market economies in terms of world GDP and global growth prospects. This column asks where the future of emerging markets’ investments lie. Where investors have focused in the past and institutional path dependency are important determinants of emerging markets’ allocation of international investment portfolios. This has implications for the geographical distribution of emerging markets’ portfolio investments, a force to reckon with in international financial markets. Few economists understate the importance of emerging market economies in terms of world GDP and global growth prospects. This column asks where the future of emerging markets’ investments lie. Where investors have focused in the past and institutional path dependency are important determinants of emerging markets’ allocation of international investment portfolios. This has implications for the geographical distribution of emerging markets’ portfolio investments, a force to reckon with in international financial markets.

Watch Europe roll printing presses
Wolfgang Munchau (FT) Dec 13, 2015
This is how the crisis may be resolved — not with a bailout or debt resolution but by printing money.

We are at the end of the line on Doha
Michael Froman (FT) Dec 13, 2015
Why this week’s WTO ministerial conference in Nairobi will mark the end of an era.

Hurdles on Indonesia’s road to reform
David Nellor (EAF) Dec 13, 2015
As 2015 draws to a close, the Indonesian government is trying to convince the jury on two counts — first, that it has turned the corner towards more constructive economic policy, and second, that it has the political leadership and capacity to implement this new policy.

The Uncounted Trillions in the Inequality Debate
Martin Feldstein (WSJ) Dec 13, 2015
Wealth isn’t so highly concentrated if you take into account Medicare and Social Security benefits.

Mary Anastasia O'Grady (WSJ) Dec 13, 2015
The media blame oil prices. The true culprit is years of antigrowth policies.

Too much ‘medicine’ is a bad idea
Nobuchika Mori (FT) Dec 14, 2015
Global regulators must assess unintended consequences of reform.

Scales tip in favour of riskier assets in 2016
Mike O’Brien (FT) Dec 14, 2015
Return outlook for relatively safe securities is deteriorating.

Why Very Low Interest Rates May Stick Around
Neil Irwin (NYT) Dec 14, 2015
A 200-year history shows that the real aberration looks like the 7.3 percent average experienced in the U.S. from 1970 to 2007.

The Brazilian Political Crisis Lessens Chances of Economic Resolution
Monica de Bolle and Tamim Bayoumi (PIIE) Dec 14, 2015
Market euphoria over the prospect of a Brazilian presidential impeachment is likely premature—and belies global investors' apparent lack of familiarity with Latin American politics. The latest developments in Brazil predicate big political changes but not necessarily major economic ones. Impeachment proceedings initiated by the Lower House in recent days may yet lead to President Dilma Rousseff's ouster in 2016, but major economic challenges will remain.

South Africa’s Road To Economic Wilderness
Ellis Mnyandu (Globalist) Dec 14, 2015
The sacking of the finance minister for trying to turn things around does not bode well.

Market Instability Won’t Deter a Fed Rate Hike
Mohamed A. El-Erian (Bloomberg View) Dec 14, 2015
A decision remains almost certain this week, despite turmoil in high-yield assets and energy.

Oil Prices and Global Growth
Kenneth Rogoff (Project Syndicate) Dec 14, 2015
Oil prices were not as consequential for global growth in 2015 as seemed likely at the start of the year, and strong reserve positions and relatively conservative macroeconomic policies have enabled most major producers to avoid falling into crisis. But next year could be different, and not in a good way – especially for producers.

Toward a Green New Deal
Mariana Mazzucato (Project Syndicate) Dec 14, 2015
Rapid advances in clean energy will require the intervention of a courageous, entrepreneurial state, providing patient, long-term finance that shifts the private sector’s incentives. Governments must make bold policy choices that not only level the playing field, but tilt it toward environmental sustainability.

Yes. Concentrated Wealth and Inequality Crushes Economic Growth
Steve Roth (Evonomics) Dec 14, 2015
More billionaire dollars, slower growth. Full stop.

Economics Can’t Explain Why Inequality Decreases
Peter Turchin (Evonomics) Dec 14, 2015
A problem with Piketty's explanation.

The future of manufacturing lies in services
Matthieu Crozet and Emmanuel Milet (VoxEU) Dec 14, 2015
Industrial classifications tend to depict the economy as a collection of separate sectors, and arbitrary lines are consequently drawn between these sectors. This column argues that this way of thinking ignores the complexity of production processes and management strategies, creating a divide between ‘manufacturing’ and ‘services’ which is stronger than it should be. In fact, manufacturing firms often produce and sell services to third parties – known as ‘servitisation’. Economic policies that fail to take into account the dual aspect of the activities of manufacturing firms may prove inadequate. Industrial classifications tend to depict the economy as a collection of separate sectors, and arbitrary lines are consequently drawn between these sectors. This column argues that this way of thinking ignores the complexity of production processes and management strategies, creating a divide between ‘manufacturing’ and ‘services’ which is stronger than it should be. In fact, manufacturing firms often produce and sell services to third parties – known as ‘servitisation’. Economic policies that fail to take into account the dual aspect of the activities of manufacturing firms may prove inadequate.

Offshoring and unskilled labour demand: New evidence
Juan Carluccio, Alejandro Cuñat, Harald Fadinger and Christian Fons-Rosen (VoxEU) Dec 14, 2015
The increase in the skill premium – wages of skilled workers relative to unskilled workers – has prompted research on its causes and potential remedies. This column presents new evidence suggesting that the impact of globalisation on the income distribution in industrialised countries is much stronger than initially thought. The productivity gains from having access to cheaper inputs through offshoring are not being distributed equally between the different economic actors in our rich societies. The increase in the skill premium – wages of skilled workers relative to unskilled workers – has prompted research on its causes and potential remedies. This column presents new evidence suggesting that the impact of globalisation on the income distribution in industrialised countries is much stronger than initially thought. The productivity gains from having access to cheaper inputs through offshoring are not being distributed equally between the different economic actors in our rich societies.

The European Disunion
Ngaire Woods (FA) Dec 14, 2015
How the continent lost its way.

How to Create a Society of Equals
Pierre Rosanvallon (FA) Dec 14, 2016
Overcoming today’s crisis of inequality.

Investors should look carefully at Japan
Henny Sender (FT) Dec 15, 2015
Nikkei 225 performed well this year in both local and dollar terms Read more >>

Following the Fed: Latin America
Jose De Gregorio (PIIE) Dec 15, 2015
Just because the Federal Reserve will likely raise interest rates for the first time in nine and a half years next week doesn't mean all of Latin America needs to follow suit with tighter monetary policy. The region is again making international headlines—and not in a good way.

Getting Serious about Wage Inflation in Japan
Olivier Blanchard and Adam S. Posen (Nikkei Asian Review/PIIE) Dec 15, 2015
Japan needs strongly positive inflation as part of its fiscal stabilization package. Starting higher inflation through a general increase in wages may be the most responsible measure that the government of Japan can pursue.

Does Your IQ Predict How Rich You Will Be?
Louis Putterman (Evonomics) Dec 15, 2015
The relationship between national wealth and intelligence.

The Great Greek Bank Robbery
Yanis Varoufakis (Project Syndicate) Dec 15, 2015
Since 2008, bank bailouts have entailed a significant transfer of private losses to taxpayers in Europe and the US. The latest Greek bank bailout constitutes a cautionary tale about how politics – in this case, Europe’s – is geared toward maximizing public losses for questionable private benefits.

Stiglitz’s Sticky Prices
Kaushik Basu (Project Syndicate) Dec 15, 2015
For decades, the assumption underlying mainstream economics was that Adam Smith’s invisible hand worked its magic seamlessly, keeping markets in equilibrium during changes in supply and demand. It was Joseph Stiglitz who showed that the invisible hand “is invisible at least in part because it is not there.”

Immigration fears and policy uncertainty
Scott Ross Baker, Nicholas Bloom and Steven J. Davis (VoxEU) Dec 15, 2015
The recent influx of refugees to Europe has stoked security fears and created anxiety about the social and economic consequences. This column provides new quantitative indicators for the intensity of migration-related fears and policy uncertainty, based on newspaper articles. The indices are presented for the US, UK, France, and Germany, and extend back to 1995. They show that recent levels of concern and uncertainty in European countries about migration are unprecedented. The recent influx of refugees to Europe has stoked security fears and created anxiety about the social and economic consequences. This column provides new quantitative indicators for the intensity of migration-related fears and policy uncertainty, based on newspaper articles. The indices are presented for the US, UK, France, and Germany, and extend back to 1995. They show that recent levels of concern and uncertainty in European countries about migration are unprecedented.

On the size of the Single Resolution Fund
Daniel Gros and Willem Pieter de Groen (VoxEU) Dec 15, 2015
Banking policy remains of great importance in the aftermath of the Global Crisis. This column presents recent research on the ability of the Single Resolution Fund to weather any future crisis scenario imaginable. The fund will be built up gradually over the coming decade, but as the losses from any future banking crisis are also likely to arise over a long period of time, the Single Resolution Fund should be sufficient to deal even with a crisis of similar proportions to the last one. Banking policy remains of great importance in the aftermath of the Global Crisis. This column presents recent research on the ability of the Single Resolution Fund to weather any future crisis scenario imaginable. The fund will be built up gradually over the coming decade, but as the losses from any future banking crisis are also likely to arise over a long period of time, the Single Resolution Fund should be sufficient to deal even with a crisis of similar proportions to the last one.

IMF Assesses Its Experience with Crisis Programs
IMF Survey Dec 16, 2015
IMF-supported programs helped chart a path through the global financial crisis, a new IMF study finds.

IMF Governance Reform: Better Late than Never
Edwin M. Truman (PIIE) Dec 16, 2015
At last the road blocks to reform of the International Monetary Fund (IMF) are about to be removed. Embedded in the Consolidated Appropriations Act of 2016 now before the US House of Representatives and the Senate are provisions that will allow the IMF to implement quota and governance reforms agreed in Seoul in 2010.

What the Fed Rate Increase Means for Emerging Economies
Liliana Rojas-Suarez (CGD) Dec 16, 2015
The first thing we should be asking is why now in particular, since conditions have not really changed much in the past few months. For example, back in September, there were large uncertainties in the global economy. China’s economic slowdown was causing alarm. Volatility in international capital markets was high. The appreciation of the US dollar was hurting US exports, which could (yet) mean slower US economic growth. That was not the time for the US Federal Reserve to up interest rates. But now it is – and here’s why.

Education in an Uncertain World
Andreas Schleicher (Project Syndicate) Dec 16, 2015
The global commitment to universal education has accomplished wonders. But there is much more to be done in the decades to come, as education becomes less about imparting knowledge and more about providing students with the skills to navigate rapid technological change.

Greece’s Other Deficit
Alessandro Galli and Mathis Wackernagel (Project Syndicate) Dec 16, 2015
For the past decade, much attention has been paid to Greece’s fiscal deficit. But Greece is also running an ecological deficit, as its residents consume far more natural resources than the country produces.

Great Expectations for the Renminbi
Zhang Jun (Project Syndicate) Dec 16, 2015
The IMF’s recent decision to add China's renminbi to the basket of currencies that determine the value of its reserve asset, the Special Drawing Right, has captured headlines around the world – as well it should. The move reflects high expectations for China's currency – and its economy.

How the Fed Just Reduced Inequality
Alexander Friedman (Project Syndicate) Dec 16, 2015
Income and wealth disparities have grown dramatically since the global financial crisis erupted in 2008. But normalization of US monetary policy should mark – and is likely to accelerate – the reversal of this trend.

Climate Action After Paris
Jim Yong Kim (Project Syndicate) Dec 16, 2015
At the UN Climate Change Conference in Paris this month, the world hoped for an agreement, but most of us did not dare to dream of a deal that aspires to limit the temperature increase to 1.5°C above pre-industrial levels. Five important steps must come next.

On US Interest Rates
Anatole Kaletsky (Project Syndicate) Dec 16, 2015
The Fed's leaders have repeatedly said that they plan to raise interest rates much more slowly than in previous periods of monetary tightening. Such assurances from central bankers cannot always be trusted, but Fed Chair Janet Yellen's promises to move more gradually than in the past are credible.

For the IMF Package in the Omnibus Budget, a Sigh of Relief — and a Warning for the Future
Clay Lowery and Scott Morris (CGD) Dec 17, 2015
Congress finally gave the administration what it has been asking for on IMF quota reform, and then some. At the same time, Congress didn’t just give the administration the ability to go forward on governance reform that gives more voting power to rising developing countries. It also included some potentially consequential conditions on its approval. Here we see risks going forward that are manageable but will require some skillful navigation by the next administration.

Slowing Global Growth has Varied Effects on Low-Income Countries
IMF Survey Dec 17, 2015
Low-income developing countries have seen weakened external conditions over the past eighteen months, but the net impact has varied significantly across these countries, according to a new study by the IMF.

A Reasonable Rate Hike for Now
Joseph E. Gagnon (PIIE) Dec 17, 2015
The Federal Reserve's short-term interest rate is a reasonable choice for now. But the Fed must keep its eye on the labor market, balancing the rate of job creation with the rate of workers entering the labor market.

Eastern Europe Benefits from a Stronger Dollar
Simeon Djankov (PIIE) Dec 17, 2015
The much-anticipated increase in US interest rates is finally here. With it comes the expectation that growth in emerging markets will suffer, as these economies bear the brunt of the additional cost to rising debt. But one region seems largely immune to this effect: Eastern Europe.

To Fix China, Look to Korea
Michael Schuman (Bloomberg View) Dec 17, 2015
Only after they lost state support did the chaebol become world-beaters.

China’s Institutional Challenge
Andrew Sheng and Xiao Geng (Project Syndicate) Dec 17, 2015
The work of the Nobel laureate economist Douglass North, who died last month, goes a long way toward explaining China's dramatic changes over the last three decades, as well as illuminating the challenges that lie ahead. In fact, North's message should temper the pessimism that pervades most current discussion of China’s prospects.

A Fair, Efficient, and Feasible Climate Agreement
Jeffrey Frankel (Project Syndicate) Dec 17, 2015
The climate agreement that world leaders reached in Paris has been harshly criticized by avid environmentalists, because negotiators did not commit to limiting global warming to 1.5º Celsius above pre-industrial levels by 2050. But what emerged in Paris was far more credible: practical near-term steps in the right direction.

Restoring Yesterday's Hope for Tomorrow's World
Kemal Dervis (Project Syndicate) Dec 17, 2015
The year 2015 was a difficult one, punctuated by declining growth forecasts, tragic terror attacks, massive refugee flows, and serious political challenges, with populism on the rise in many countries. This represents a disappointing turn from the undoubtedly flawed, but far more hopeful world of just a few decades ago.

A Climate Agreement Powered by Hypocrisy
Bjørn Lomborg (Project Syndicate) Dec 17, 2015
The deal that world leaders just concluded in Paris contains promises that, if enacted, will cost the global economy at least $1 trillion dollars a year between now and 2030. Sadly, it will deliver little more than empty gestures.

The Economics of Terrorism in Africa
Koffi Alle (Project Syndicate) Dec 17, 2015
Terrorist attacks in Nigeria, Kenya, Tunisia, Mali, and elsewhere have cast a dark shadow across Africa's long-awaited economic rise. That is no surprise: Terrorism risks derailing Africa’s development in six important ways.

Productivity trends in Asia after the Global Crisis
Koji Nomura (VoxEU) Dec 17, 2015
Though Asian economies have maintained stable growth since 2010, their overall economic performance has slowed down compared to the peak in the 2000s. This column discusses the recent productivity trends in the Asian region and argues that the reason for the slowdown has been the end of China’s economic boom. Asian countries must undertake initiatives for achieving sustainable improvement of TFP across the region. Though Asian economies have maintained stable growth since 2010, their overall economic performance has slowed down compared to the peak in the 2000s. This column discusses the recent productivity trends in the Asian region and argues that the reason for the slowdown has been the end of China’s economic boom. Asian countries must undertake initiatives for achieving sustainable improvement of TFP across the region.

Empire Strikes Back
Emanuele Saccarelli and Latha Varadarajan (FA) Dec 17, 2015
Imperialism, past and present.

'The Big Short,' Housing Bubbles and Retold Lies
Paul Krugman (NYT) Dec 18, 2015
The enemies of financial regulation hope you won't see a new movie, or believe it.

The Paris Climate Agreement Feels Historic, but the Sustainable Development Goals Don’t. Why?
Charles Kenny and Jonah Busch (CGD) Dec 18, 2015
There were two major gatherings of global leaders this year – in New York for the UN General Assembly and in Paris for the climate talks. In some ways, the agreements that came out of both meetings look similar. The Sustainable Development Goals (SDGs) are a bunch of aspirational targets for national and global progress without any legal authority, some of which look simply implausible without truly revolutionary global policy change of which there is little sign to date. Paris s

Europe’s Refugee Crisis Hides a Bigger Problem
Lant Pritchett (CGD) Dec 18, 2015
Europe is experiencing not one, but three population related crises. Two are fast and one is slow.

Moving Into a Chinese-Indian World
Martin Hutchinson (Globalist) Dec 18, 2015
A dual hegemony now looks unavoidable, but must we really fear it?

Will Ireland's New Boom End Badly?
Bloomberg View Dec 18, 2015
Not if its leaders put prudence first.

History of Junk Bond Meltdowns Points to Trouble
Stephen Mihm (Bloomberg View) Dec 18, 2015
Spread between high-yield debt and government securities could be predictive.

Unaccountable China
Brahma Chellaney (Project Syndicate) Dec 18, 2015
Since late 2013, China has been engaged in an alarming quest for control over the South China Sea, a strategically crucial corridor through which $5.3 trillion in trade flows each year. But what is even more shocking – not to mention dangerous – is that the country has incurred no international costs for these activities.

The Global Migration Blowback
Dambisa Moyo (Project Syndicate) Dec 18, 2015
The European refugee crisis marks the first time that the EU has been tasked with accommodating so many people from outside the continent, and it is unlikely to be the last. Unless policymakers incorporate a long-term vision into their approach to migration, similar emergencies will become increasingly frequent.

A New Century for the Middle East
Jeffrey D. Sachs (Project Syndicate) Dec 19, 2015
The region's struggles over sharia, the Sunni-Shia divide, Islamist jihadists, and the never-ending Israel-Palestine conflict are symptoms of unmet needs. Ensuring long-term prosperity and stability in the Islamic world requires high-quality education, advanced technologies, and a greater emphasis on sustainable development.

Uncertainty promotes reform
Alessandra Bonfiglioli and Gino Gancia Dec 19, 2015
The Great Recession highlighted the prominent role that economic uncertainty plays in hindering investment and growth. This column provides new evidence that economic uncertainty can actually play a positive role by promoting the implementation of structural reforms with long-run benefits. The effect appears to be strongest for countries with poorly informed voters. These findings suggest that times of uncertainty may present an opportunity to implement reforms that would otherwise not be passed.

The myth of 40% pre-GATT tariffs
Chad P. Bown and Douglas Irwin (VoxEU) Dec 19, 2015
Accurately establishing the GATT’s starting point is important for assessments of its contributions to the post-war trading system, on which much of contemporary trade policy continues to be based. However, a frequently cited statistic is that average tariffs immediately prior to the first GATT negotiations in Geneva in 1947 were at or above 40%. This column largely debunks the 40% myth and suggests that average tariffs in 1947 were around 22%.

It’s time for domestic changes in Vietnam
Thomas Jandl (EAF) Dec 20, 2015
Most important to domestic reform in Vietnam are the state-owned enterprise (SOE) provisions in the TPP, which require heavily protected SOEs to live — or die — under the same rules and regulations as the private sector.

Congress Should Care About the IMF
Bloomberg View Dec 20, 2015
The U.S. should lead the push for a modern, well-run fund.

Offshoring and wage inequality
Joon H. Lee (VoxEU) Dec 20, 2015
Globalisation in the form of offshoring can impact the domestic labour market. This column investigates how offshoring affects workers based on their contract type. The findings indicate that the wages of South Korean manufacturing workers increase as offshoring increases, but that this impact is significantly weaker for temporary workers. One potential channel for globalisation to exacerbate inequality is therefore the contract type.

Wealth-income ratios in small economies
Daniel Waldenström (VoxEU) Dec 20, 2015
Recent work on the importance of wealth and capital shows that it has fluctuated grossly over time in Europe. This column examines whether this pattern carries over to smaller, late-industrialising countries by looking at new historical evidence from Sweden. After being low in the pre-industrial era, Swedish wealth levels came into line with the rest of Europe in the 20th century. However, government wealth grew much faster and became more important in Sweden, largely due its public pension system. These findings highlight the role of economic and political institutions in the long-run evolution of national wealth.

The U.S. Fed and the Seven-Year Itch
Uwe Bott (Globalist) Dec 21, 2015
The peculiar logic of raising interest rates because you pre-announced it.

Manufacturing Employment in China
Nicholas R. Lardy (PIIE) Dec 21, 2015
There has been a substantial debate on the issue of whether the decline in manufacturing employment in the United States is the result of technological change, expanding trade, or other factors.

Dilma's Gamble for Resurrection
Monica de Bolle (PIIE) Dec 21, 2015
Political expediency often conflicts with sound economic policy. In the case of Brazil, the two look bound for a head-on collision.

Nine Signposts for Navigating Market Volatility
Mohamed A. El-Erian (Bloomberg View) Dec 21, 2015
It is far from certain that spikes will be temporary and reversible.

The Perils of Raising Rates
Mark Whitehouse (Bloomberg View) Dec 21, 2015
Global investors are more exposed to interest-rate hikes than ever.

Argentina’s Economic Big Bang
Mohamed A. El-Erian (Project Syndicate) Dec 21, 2015
Last week, newly elected Argentine President Mauricio Macri's government initiated a bold plan to revitalize a bruised and beleaguered economy. The plan's outcome matters not just for Argentina, but also for nearby countries, where leaders are watching closely for clues about how to deal with their economies' own woes.

Patriotism in the Age of Globalization
Bill Emmott (Project Syndicate) Dec 21, 2015
The new fault line in politics, according to Marine Le Pen, leader of France’s far-right National Front Party, is between globalists and patriots. This argument is as dangerous as it is false, which is why it must be rebutted.

The Fed’s Risk to Emerging Economies
Michael Spence (Project Syndicate) Dec 21, 2015
The US Federal Reserve has finally, after almost a decade of steadfast inaction, set off down the path of interest-rate normalization. But other central banks' reluctance to follow the Fed’s lead implies a coming period of monetary-policy divergence, with uncertain consequences for the global economy.

The Sustainability Revolution in Finance
Per Bolund and Reinhard Bütikofer (Project Syndicate) Dec 21, 2015
A quiet revolution is taking place in the financial industry: sustainable development is being integrated into its very fabric, encouraging a growing wave of divestment from fossil-fuel assets. Policymakers, especially in the EU, have a responsibility to lock in the revolution's gains.

The WTO lives on, the Doha Round does not
Gary Clyde Hufbauer (VoxEU) Dec 21, 2015
The WTO members struck a deal in Nairobi at their Ministerial Conference that many have found hard to understand. Leading up to the conference, there was widespread agreement that the WTO’s multilateral negotiations – known as the Doha Development Agenda – should be finished or finished off, as they had dragged on too long already (since 2001). This column, by one of the world’s most seasoned trade policy experts, argues that the Nairobi Declaration finished off Doha for good, but it also finished several important elements of the original agenda. Both developed and developing nations won important gains.

Understanding the evolution of Japan’s exports
Willem Thorbecke (VoxEU) Dec 21, 2015
A good understanding of the evolution of exports over the years is crucial for the design of trade policy. This column dissects Japanese exports using a gravity model and concludes that it would be beneficial for Japanese companies to diversify their exports by shipping more to China, Europe, and South Korea.

Congress Gets Out of the I.M.F.'s Way
NYT Dec 22, 2015
The much needed reforms will give countries like China and India a greater say in the organization.

The 'Flash Boys' Exchange Is Still Controversial
Matt Levine (Bloomberg View) Dec 22, 2015
Does an exchange have to be fair to high-frequency traders to be fair?

Brazil Gives Up on Fake Austerity
Mac Margolis (Bloomberg View) Dec 22, 2015
The new finance minister faces all the same challenges, and must reassure investors.

Europe's Hooked on U.S. Coal, But That Can't Last
Leonid Bershidsky (Bloomberg View) Dec 22, 2015
The EU will wean off dirty energy, even if American exporters keep trying to make it cheap.

Fed and Greece Could Defy the 2016 Bears
Mark Gilbert (Bloomberg View) Dec 22, 2015
Look for Janet Yellen and Alexis Tsipras to rock in the new year.

The Tides of Latin American Populism
Jorge G. Castañeda (Project Syndicate) Dec 22, 2015
With Latin American voters turning away from their populist leaders, many speculate that the “pink tide” that has pushed the region to the left over the last 15 years is finally turning. But the defeat of incumbents across the region largely reflects declining commodity prices, not ideological opposition.

The Political Consequences of Financial Crises
Howard Davies (Project Syndicate) Dec 22, 2015
In the first wave of post-2008 elections, in Europe and elsewhere, voters’ verdict on their governments – whether of the left or the right – was more or less identical: things went wrong on your watch, so out you go. But now we can see a familiar historical trend emerging, particularly in Europe.

China’s Planning Addiction
Koichi Hamada (Project Syndicate) Dec 22, 2015
China’s leaders are at a crossroads. They must decide whether to continue trying to control the economy, as they did after the summer's stock-market crash, or to follow through on their promise to build a genuinely market-oriented system.

Italy's productivity challenge
Dino Pinelli, István P. Székely and Janos Varga (VoxEU) Dec 22, 2015
Italy’s economic performance is lagging behind other Eurozone and OECD countries. This column argues that radical changes in human capital, financial, innovation and product markets, and taxation would restore growth, but will take time to bear fruits. This leaves no room for complacency in the ongoing reform efforts.

Piketty's book and macro models
Mariacristina De Nardi, Giulio Fella and Fang Yang (VoxEU) Dec 22, 2015
Thomas Piketty’s "Capital in the Twenty-First Century" quantified the evolution of wealth inequality and concentration over time and across a number of countries. This column examines existing macroeconomic models of wealth inequality through the lenses of the facts and ideas in Piketty’s book. It further examines the importance of the mechanism that Piketty champions – post-tax rate of return on capital. Gaps in existing knowledge and directions for future research are identified.

Number of Workers per Retiree Declines Worldwide
Joseph Chamie (YaleGlobal) Dec 22, 2015
Government policies must address a declining potential support ratio, workers to retirees, to promote economic and social well-being.

China overshadows global outlook for 2016
John Plender (FT) Dec 23, 2015
Country is hugely important in determining world economy and the direction of capital flows.

Low-Skilled Immigrants Don't Drag Down the U.S.
Noah Smith (Bloomberg View) Dec 23, 2015
Most of them prosper and boost growth.

Cheap Oil's Great, Except When It Isn't
Marc Champion (Bloomberg View) Dec 23, 2015
OPEC can't control prices. History shows that it would be helpful if somebody could.

Deutsche Bank Leads a Retreat From Markets
Mark Gilbert (Bloomberg View) Dec 23, 2015
Curing the too-big-to-fail problem would have undesired consequences.

China's Year of Maybe-Real 7% Growth
Justin Fox (Bloomberg View) Dec 23, 2015
Every country with a booming economy eventually runs into trouble.

Two Blows Against Illiberal Democracy
Andrés Velasco (Project Syndicate) Dec 23, 2015
The pool of contenders for the title of “world’s worst elected government” just got a little smaller. Not only has Argentina now escaped 12 years of arrogant autarchy under Néstor and Cristina Kirchner; a stunning defeat in parliamentary elections should mark the beginning of the end for 16 years of chavismo in Venezuela.

The Perils of Fed Gradualism
Stephen S. Roach (Project Syndicate) Dec 23, 2015
Although the Fed's recent interest-rate hike is fundamentally a positive step, it is not enough. In fact, the Fed's commitment to gradualism in normalizing interest rates could set the stage for another devastating financial crisis.

The Kingdom Beyond Oil
Gassan Al-Kibsi (Project Syndicate) Dec 23, 2015
Far-reaching changes to modernize and diversify Saudi Arabia's economy are afoot – and not a moment too soon. The recent collapse in the price of oil, together with a growing demographic bulge, are generated huge social pressures in the kingdom.

Why Big Oil Should Kill Itself
Anatole Kaletsky (Project Syndicate) Dec 23, 2015
Oil prices are likely to remain low, making it harder for large Western companies to compete with national producers in countries like Russia, Iran, and Saudi Arabia. Unless these companies self-liquidate, activist shareholders or corporate raiders could do it for them.

Bargaining tariffs in the post-Doha WTO: Insights from research
Chad P. Bown (VoxEU) Dec 23, 2015
With the Doha Round finally out of the way, WTO members must decide how to proceed with unfinished business and new issues. This column argues for re-thinking the WTO approach to tariff cutting based on insights drawn from recent research. The next time around, deals may be more likely to be struck if emerging economies negotiate tariff cuts among themselves, reciprocally – as the original GATT members did in 1947.

Medieval Champagne fairs: Lessons for development
Sheilagh Ogilvie (VoxEU) Dec 23, 2015
A vocal set of economists argue that economies can succeed in the absence of strong state and public institutions. This column looks to the ‘Champagne fairs’ of medieval Europe for lessons in how important public institutions can be. Public authorities are crucial – for good or for ill. When rulers provided these as generalised institutional services to everyone, the Champagne fairs flourished. When they granted them to privileged groups only, trade declined and business moved elsewhere.

The economics of poverty
Martin Ravallion (VoxEU) Dec 23, 2015
With the new UN Global Goals agreed this autumn, the issue of poverty is at the top of global agenda. This column presents a new book that reviews past and present debates on poverty in both rich and poor countries. The challenges ahead are in assuring the political will and administrative capabilities to implement and enforce sound anti-poverty policies, and in adapting them to differing circumstances and evolving knowledge about their efficacy.

A Surge in Women’s Employment Is Driving Japan’s Economy
William Sposato (FP) Dec 23, 2015
A surge in female employment is driving Japan's economy, but other negative indicators are pulling it into recession.

US Fed Rate Hike Will Test Emerging Markets
Dan Steinbock (RGE Economonitor) Dec 24, 2015
In the multipolar world economy, the Fed’s unilateral actions contribute to diminishing global growth prospects.

Cronyism Causes the Worst Kind of Inequality
Noah Smith (Bloomberg View) Dec 24, 2015
Growth falls and the wealth gap widens.

Exchange rate devaluations: When they can work and why
Antoine Berthou and Filippo di Mauro (VoxEU) Dec 24, 2015
The effect of exchange rate devaluations on a country’s exports is frequently debated, with some supporting a strong impact and others suggesting no sizeable response of exports to relative price changes. This column argues that firm heterogeneity in terms of productivity and size can explain the opposing views. The measured reaction of aggregate exports to relative price movements is largely determined by the reaction of the most productive/largest companies.

The long-run effects of the ‘Scramble for Africa’
Stelios Michalopoulos and Elias Papaioannou (VoxEU) Dec 24, 2015
The carving up of Africa by colonial powers is often a touch-stone for those concerned with African development and underdevelopment. This column looks into the effect imposed borders had on splitting ethnicities across countries. It finds that colonial border designs have spurred political violence and that ethnic partitioning is systematically linked to civil conflict, discrimination by the national government, and instability. The carving up of Africa by colonial powers is often a touch-stone for those concerned with African development and underdevelopment. This column looks into the effect imposed borders had on splitting ethnicities across countries. It finds that colonial border designs have spurred political violence and that ethnic partitioning is systematically linked to civil conflict, discrimination by the national government, and instability.

How TPP will change the Japanese economy
Yasuyuki Todo (VoxEU) Dec 24, 2015
The Trans-Pacific Partnership (TPP) agreement was reached in October following seven years of negotiations. This column examines how Japan can maximise the TPP’s effect on its economy, identifying several additional policies that will be necessary. These include support for Japanese small and medium enterprises seeking to expand operations overseas, and policies that encourage and ease incoming foreign direct investment.

Things to Celebrate, Like Dreams of Flying Cars
Paul Krugman (NYT) Dec 25, 2015
Technology is finally back to advancing our ability to produce and deliver things.

Cracks in the Liberal Order
Ross Douthat (NYT) Dec 26, 2015
A year of challenges to Western institutions from inside and out.

China migration: Children of a revolution
Patti Waldmeir (FT) Dec 27, 2015
Only now is the country examining the social price of children left behind by the mass movement of rural Chinese.

The whole world is on edge
Gideon Rachman (FT) Dec 28, 2015
Not one global power is optimistic and even in America, which should be cheering, the mood is sour.

India’s impermanent residents
Amy Kazmin (FT) Dec 28, 2015
The country could do with a more welcoming approach to global citizens.

Australia: Northern pivot
Steve Johnson and Jamie Smyth (FT) Dec 28, 2015
Canberra’s aim to boost trade with Asia by developing overlooked regions has raised fears over dependence on China.

Seven themes to watch in the working world for 2016
Lydia DePillis (WP) Dec 28, 2015
Workers built momentum in 2015, and next year could deliver even more for them. Read full article »

‘Microdata’ Give Boost to Economic Decisionmakers
IMF Survey Dec 28, 2015
The revolution in data collection, dissemination, and analysis has yielded more granular data, or “microdata,” that provide number-crunchers a degree of certainty not seen in traditional aggregate data analysis, the audience at a recent forum co-sponsored by the IMF was told.

Four Charts Show the World Is Getting Better
Noah Smith (Bloomberg View) Dec 28, 2015
Global inequality is falling, renewables are catching on, war kills fewer people.

A Happy New Year for Europe?
Carl Bildt (Project Syndicate) Dec 28, 2015
In 2016, Europe will face a perfect storm of political challenges, from the surging refugee crisis to the implementation of the TTIP trade agreement. But perhaps the gravest challenge is managing the uncertainty in the run-up to the UK's referendum on whether to remain in the European Union.

The Fascism of the Affluent
Joschka Fischer (Project Syndicate) Dec 28, 2015
What accounts for the rise in rich countries of right-wing populists like Donald Trump and Marine Le Pen? First and foremost, there is the fear that the “White Man’s World” – a lived reality assumed by its beneficiaries as a matter of course – is in terminal decline, both globally and in the societies of the West.

New Year’s Resolutions for the Global Economy
Michael J. Boskin (Project Syndicate) Dec 28, 2015
Over the past year, global growth has been anemic – and the forecast for the coming year is only slightly better. Clearly, world leaders need to take strong action to boost incomes and expand opportunities for their people.

The Global Economy Confronts Four Geopolitical Risks
Martin Feldstein (Project Syndicate) Dec 28, 2015
Several key issues – US monetary policy, weak commodity prices, debt crises, and the like – are likely to affect the global economy in the year ahead. But the main longer-term risks are geopolitical, stemming from four sources: Russia, China, the Middle East, and cyberspace.

Puerto Rico’s Debt Trap
Simon Johnson (Project Syndicate) Dec 28, 2015
The Caribbean island of Puerto Rico – the largest United States “territory” – is broke, and a human calamity is unfolding there. Unless a constructive course of political action is found in 2016, Puerto Rican migration to the 50 states will rival the scale of the 1930s Dust Bowl exodus.

The Paris Approach to Global Governance
Anne-Marie Slaughter (Project Syndicate) Dec 28, 2015
By the standards of a traditional treaty, the Paris agreement on climate change falls woefully short. Yet its deficits in this regard are its greatest strengths as a model for effective global governance in the twenty-first century.

Chinese Renminbi, U.S. Dollar and ‘Hot Money’ Outflows
Dan Steinbock (RGE Economonitor) Dec 28, 2015
As China’s renminbi has been included in the IMF elite currencies and the Fed has started its rate hikes, conventional wisdom sees the RMB weakening and US dollar strengthening as simple long-term trends. The realities are far more complex, however.

European risks that economists do not see
Stephanie Flanders (FT) Dec 29, 2015
What at first looks positive can turn negative if the politics goes wrong.

Financialisation compounds commodity rout
Satyajit Das (FT) Dec 29, 2015
Companies struggle to meet debt payments as dollar income shrinks.

How North Korea Became the World’s Worst Economy
Nicholas Eberstadt (WSJ) Dec 29, 2015
Catastrophic policies made worse by billions in foreign aid that masked its leaders’ misrule.

Don't Blame Uncertainty for the Slow Recovery
Noah Smith (Bloomberg View) Dec 29, 2015
Try considering how much economic damage the financial crisis caused.

Beyond the Revolving Door
Lucy P. Marcus (Project Syndicate) Dec 29, 2015
At the Paris climate talks, Bill Gates wondered why R&D has been absent from the negotiators' agenda. It is a question that goes to the heart of the relationship between business and government in solving our societies’ toughest problems, from ensuring the planet's habitability to fostering stable and inclusive economic growth.

Stopping Venezuela’s Harvest of Sorrow
Ricardo Hausmann (Project Syndicate) Dec 29, 2015
Two years ago, public protests erupted in both Kyiv and Caracas, and political change in Venezuela, while slower than in Ukraine, is set to accelerate, following the opposition's massive victory in this month's parliamentary election. But there is an older and more ominous parallel between Venezuela and Ukraine.

How Much Development Data Is Enough?
Keith D. Shepherd (Project Syndicate) Dec 29, 2015
The data revolution offers enormous potential for improving decision-making at every level of development policy. But gathering data is not enough; the information must also be managed and evaluated – and doing this properly can be far more complicated than the effort to collect it.

China, Circa 2016
Andrew J. Nathan, Bethany Allen-Ebrahimian, Taisu Zhang and Jerome A. Cohen (FP) Dec 29, 2015
From political and ideological infighting, to labor rights, to the South China Sea, here's what's brewing in the new year.

2015 summed up: Numbers of the year
ft Dec 30, 2015
The vital figures from the past 12 months.

Forecasting the world in 2016
FT Dec 30, 2015
a feast of predictions — from the price of oil to Vladimir Putin’s next moves.

Investing for 2016 in an Expensive Market
Burton G. Malkiel (WSJ) Dec 30, 2015
Diversify broadly, control your costs, add some foreign stocks and resist the urge to sell your bonds.

When Currencies Collapse
Simeon Djankov (PIIE) Dec 30, 2015
In late December, the Azerbaijani currency, the manat, lost a third of its value in a single day. This was after the central bank decided to float the manat, which had previously been fixed to the dollar. The move has angered the population and made ripple waves across the Caucasus region.

Russia and Ukraine Finally Break Up
Leonid Bershidsky (Bloomberg View) Dec 30, 2015
Russia's economy hasn't bottomed out. Ukraine has nowhere to go but up.

Feeding a Flawed Society
Paul R. Ehrlich and John Harte (Project Syndicate) Dec 30, 2015
Virtually everyone in the scientific community agrees that ensuring sufficient food supplies for a surging global population, which is set to grow by 2.4 billion people by mid-century, will require serious work. Unfortunately, there is no such consensus regarding how to go about it.

Piketty vs. Piketty
J. Bradford DeLong (Project Syndicate) Dec 30, 2015
The central thesis of Thomas Piketty's Capital in the Twenty-First Century is that the recent concentration of wealth and political power is simply the normal behavior of a capitalist economy. Yet Piketty's own behavior since becoming a celebrity suggests that he doesn't believe it.

Capital markets and job creation in the 21st century
Jerry Davis (Brookings) Dec 30, 2015
The death of the career and the rise of the gig economy are directly connected to changes in the shape of the American corporation. Policymakers must recognize these shifts if they are to succeed in fostering job creation in 21st century America.

Former Colonies Aren't Poor Because of Western Plunder
Noah Smith (Bloomberg View) Dec 31, 2015
Blame toxic institutions today, not past exploitation.

What Markets Say About 2016
Mark Whitehouse (Bloomberg View) Dec 31, 2015
The U.S. is looking stronger and shakier at the same time.

The EU Proves It's Here to Stay
Leonid Bershidsky (Bloomberg View) Dec 31, 2015
A united Europe survives its greatest existential threats.

A Year of Sovereign Defaults?
Carmen Reinhart (Project Syndicate) Dec 31, 2015
Like so many other features of the global economy, debt accumulation and default tends to occur in cycles, with one- and two-decade lulls in defaults typically followed by a new wave of defaults. As 2016 begins, there are clear signs of such a wave on the horizon.

Africa’s Boom Is Over
Rick Rowden (FP) Dec 31, 2015
Africa was never going to get far without manufacturing — and it can’t do so under today’s trade and investment treaties.