International news pertinent to international economics is added here, together with several major newspapers and news magazines. The articles, in general, are held for a month on this main page. You can also access the older archived news articles, with the caveat that there is no guarantee that the links remain live. Current news on international financial markets can be found here. Note: Links to the New York Times require a free registration.
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The migration numbers game
Shawn Donnan (FT) Dec 1, 2014
Heated political debate obscures economic impact of immigration.
Bargain-hunting in Russia
James Mackintosh (FT) Dec 1, 2014
The plunging rouble has left Russian stocks back down at 2009 levels when measured in dollars.
Equity investors should heed bond message
Mohamed El-Erian (FT) Dec 1, 2014
Hard to find reasons for divergence between asset class prices.
The Ruble of Discontent
WSJ Dec 1, 2014
Russia’s falling currency could create political trouble for Vladimir Putin.
Wall Street Volatility Doesn’t Shake Main Street
Jason Cummins (WSJ) Dec 1, 2014
Stock-market gyrations have had little effect on what amounts to a return of the Great Moderation.
Piketty on Immigration
Globalist Dec 1, 2014
Why aren't poor Americans more up-in-arms over rising levels of income inequality?
Russia's Economic Situation Is Worse than It May Appear
Anders Åslund (PIIE/Capital) Dec 1, 2014
The Russian economic situation has long looked stable, although growth has been slow. The budget has been close to balance, with a public debt of only 11 percent of GDP, and Russia has had persistent current account surpluses.
Putin Gambles on a Weak Ruble
Leonid Bershidsky (Bloomberg View) Dec 1, 2014
The Russian currency's slump is beginning to hurt consumption, and there's no telling how much of that Russians can take.
Common Sense on Conflict Minerals
Michael Gibb (Project Syndicate) Dec 1, 2014
The responsibility to reconcile global commerce with the protection of basic human rights does not fall first and foremost on consumers. Conflict prevention and human-rights protection are primarily the responsibility of states, and it is increasingly recognized that businesses must play their part as well.
The Return of Currency Wars
Nouriel Roubini (Project Syndicate) Dec 1, 2014
The recent decision by the Bank of Japan to increase the scope of its quantitative easing is a signal that another round of currency wars may be under way. The cause of the latest currency turmoil is clear: In an environment of public and private deleveraging, monetary policy has become the only available tool to boost demand.
On "artificially low interest rates" and the end of QE
John Aziz (Pieria) Dec 1, 2014
Was QE holding interest rates artficially low?
OPEC’s War on Fracking Is Good News for the Rest of Us
John Cassidy (New Yorker) Dec 1, 2014
Lower crude prices mean cheaper gas and heating oil—and more American consumers with money to spend on other things.
Time to scrap the Stability and Growth Pact
Paolo Manasse (VoxEU) Dec 1, 2014
Today’s Eurozone fiscal discipline is the amalgamation of reforms implemented over ten years, with the latest and largest changes agreed in crisis settings. This column argues that the result fosters neither growth nor stability since actual fiscal policy has been powerfully procyclical. The focus on intermediate targets has distracted attention from the final objectives – debt sustainability and economic convergence. A drastic simplification of the current rules is proposed.
The Fall and Rise of Economic History
Jeremy Adelman and Jonathan Levy (CHE) Dec 1, 2014
Historians gave up the formerly thriving field to economists, who let it languish. Now historians are taking it back.
Global Health Problems Span a Wide Spectrum
IMF Survey Dec 1, 2014
The December issue of the IMF’s Finance & Development magazine looks at the fight for global health, including the battle against infectious diseases such as Ebola fever and noncommunicable diseases such as cancer and mental health disorders.
Promises to Keep
Bjorn Lomborg (FA) Dec 1, 2014
Crafting better development goals.
Two cheers for sharp falls in oil prices
Martin Wolf (FT) Dec 2, 2014
Abundant supply threatens to make economies more carbon intensive and less energy efficient.
Hong Kong is heading for a showdown
Minxin Pei (FT) Dec 2, 2014
Chinese President Xi Jinping’s political fortunes are also at stake.
EU rulers back the tortoise not the hare
Bill Emmott (FT) Dec 2, 2014
The prevailing policy of muddle-through-while-slimming down has risks.
Falling oil price tests Asia
Jeremy Grant (FT) Dec 2, 2014
Malaysia derives almost a third of state revenues from Petronas
Japan QE is cheap yen policy in disguise
Henny Sender (FT) Dec 2, 2014
Sad choice of tool as it drives up asset prices but is no help to real economy.
When Will the ECB Move on Monetary Stimulus?
Jacob Funk Kirkegaard (PIIE) Dec 2, 2014
The European Central Bank's (ECB) final meeting at which all participating national central bank (NCB) governors get to vote takes place on December 4. In January a new rotational system starts in which only 21 votes will be cast for monetary policy decision—15 NCB governors and 6 members of the ECB Executive Board.
Regionalism, Asia Style
John West and Stephan Richter (Globalist) Dec 2, 2014
Unlike in Europe, Asian regionalism has been market-led.
With Russia on Brink of Recession, Putin Faces ‘New Reality’
Neil MacFarquhar and Andrew E. Kramer (NYT) Dec 2, 2014
Plunging oil prices, capital flight and a devalued ruble present a challenge to a president who an economist says “has always been lucky.”
The Upside of Europe’s Ebbing Inflation
Michael Heise (WSJ) Dec 2, 2014
Declines in prices spurred by cheaper oil can help economies rebound.
Who’s Afraid of Cheap Oil?
Holman Jenkins (WSJ) Dec 2, 2014
The Saudis know they cannot kill U.S. shale output, even if the news media don’t.
The Gold Fairy Tale Fails Again
Barry Ritholtz (Bloomberg View) Dec 2, 2014
The stories devised to explain why gold will rise, even though it has fallen for four years, are exercises in valuing narrative over analysis.
The ECB’s Shifting Regimes
Andrew Bosomworth (PIMCO) Dec 2, 2014
The European Central Bank (ECB) is likely to commence a broad-based asset purchase programme, i.e., quantitative easing (QE), in the first quarter of 2015.
Why Did Putin Turn?
Harold James (Project Syndicate) Dec 2, 2014
President Vladimir Putin’s policy toward his country's "near abroad" and the West has been badly misunderstood. Instead of trying to turn Russian policy into a psychodrama, observers should focus on the effect of the 2007-2008 financial crisis on global politics.
Why is euro inflation so low?
Jean-Pierre Landau (VoxEU) Dec 2, 2014
Eurozone inflation has been persistently declining for almost a year, and constantly undershooting forecasts. Building on existing research, this column explores the conjecture that low inflation in the Eurozone results from an excess demand for safe assets. If true, this conjecture would have definite policy implications. Getting out of such a ‘safety trap’ would necessitate fiscal or non-conventional monetary policies tailored to temporarily take risk away from private balance sheets.
Afro-Optimism: Has the Pendulum Swung Too Far?
Raila Odinga (YaleGlobal) Dec 2, 2014
Development and economic growth in Africa offer great potential, yet poverty, conflict, preventable infectious disease and other challenges remain. Leaders cannot rest easy, warns Raila Odinga, former prime minister of Kenya in an article based on his remarks during the Annual Coca-Cola World Fund Lecture at Yale University, October 9, 2014.
Wheat People vs. Rice People
T.M. Luhrmann (NYT) Dec 3, 2014
Some cultures are more individualistic, and others more interdependent. Agriculture may explain why.
A political chancellor’s delusional plan
Martin Wolf (FT) Dec 3, 2014
Economic priority was never fiscal austerity; it was growth.
Putin and the perfect economic storm
Neil Buckley (FT) Dec 3, 2014
A fall in real incomes will hit hard working class families in regions supportive of the president.
Europe’s patents throttled by red tape
Sarah Gordon (FT) Dec 3, 2014
The long-promised single EU patent cannot come soon enough.
How QE can jam the financial plumbing
Manmohan Singh (FT) Dec 3, 2014
Central bank asset purchases absorb ‘good’ collateral like Treasury bonds.
Japan: A ballot on Abenomics
David Pilling and Ben McLannahan (FT) Dec 3, 2014
Shinzo Abe took a gamble in calling a snap election, but he hopes to win enough support to continue his economic policies.
OPEC Meeting Post-Mortem: All Eyes on U.S. Shale
Greg E. Sharenow (PIMCO) Dec 3, 2014
After averaging nearly $110 per barrel during the first half of 2014 and peaking at over $115 per barrel in June, Brent crude oil has fallen by over $40 in just a few short months.
Emerging Markets Mock the Pessimists
Jim O'Neill (Bloomberg View) Dec 3, 2014
Remember how this time last year a lot of analysts were predicting that 2014 would be a bad year for emerging markets? Didn't really happen, did it?
It's a Lose-Lose Situation for the ECB
Mohamed A. El-Erian (Bloomberg View) Dec 3, 2014
Europe's politicians, by failing to address national problems, are forcing the central bank to take riskier actions.
Europe: When the Unthinkable Becomes Possible
Stratfor Dec 3, 2014
Europe's economic crisis is slowly but steadily eroding the political systems of many countries on the Continent.
Can Japan Reboot?
Kenneth Rogoff (Project Syndicate) Dec 3, 2014
Shinzo Abe’s recent policy decisions – to increase monetary stimulus dramatically, to postpone a consumption-tax increase, and to call a snap election in mid-December – have returned Japan to the forefront of an intense policy debate. The question is simple: How can aging advanced economies revive growth after a financial crisis?
Minxin Pei (Project Syndicate) Dec 3, 2014
Chinese officials have lately been touting the slogan “Asia for Asians,” with President Xi Jinping laying out a vision for a new regional security order devoid of a strong US presence. Is this merely nationalist rhetoric served up for domestic consumption, or does it reflect a genuine shift in Chinese policy?
Banking: Financial firefighters
Tom Braithwaite, Gina Chon and Henny Sender (FT) Dec 4, 2014
Recent leaks have renewed questions about the ‘revolving door’ between the New York Fed and Wall St.
Sovereign funds pave path to prosperity
Gillian Tett (FT) Dec 4, 2014
It has been lamentably difficult to get private sector investors to fill the infrastructure void
The great oil crash of 2014
Robert J. Samuelson (WP) Dec 4, 2014
Why is this happening? What does it mean? Here’s what we know.
Can Putin withstand falling oil prices?
Charles Lane (WP) Dec 4, 2014
Falling crude prices might not spell for Russia the disaster they did for the Soviet Union.
Falling Oil Prices Create a Central Banking Conundrum
Neil Irwin (NYT) Dec 4, 2014
One result is to drive down inflation worldwide, at a time when inflation is already lower than central bankers consider ideal.
TTIP "Fresh Start" Efforts Continue as New EU Council Chief Takes Office
Bridges, Volume 18, Number 41 Dec 4, 2014
New European Council President Donald Tusk, who took office on 1 December, has highlighted the EU-US partnership as being "the backbone of our community of democracies," while suggesting that strengthening bilateral ties across the Atlantic, such as through trade, will be one of four main indicators of the 28-nation bloc's future success.
UN Climate Talks Under Pressure to Secure Draft Texts
Bridges, Volume 18, Number 41 Dec 4, 2014
This year's annual UN climate talks kicked off in Lima, Peru on Monday with exhortations from the meeting's leaders for delegates to move forward on efforts to secure a draft version of a global emissions-cutting deal for the post-2020 period.
The Scramble for Bauxite: Beware of Chinese Promising Gifts
Marcus Noland (PIIE) Dec 4, 2014
Earlier this year, in an effort to promote downstream processing, Indonesia banned the export of mineral ores. As intended, the policy has expanded Indonesian processing activities.
TTIP: Strengthening a Global Economic Heavyweight
J.D. Bindenagel (Globalist) Dec 4, 2014
TTIP will help the U.S. and EU to meet the challenges of a globalizing world.
Demography Is Rewriting Our Economic Destiny
Clive Crook (Bloomberg View) Dec 4, 2014
Demographically speaking, an economic golden age is about to end.
Beijing Inc? The Chinese Aren't Coming--They're Already Here
Roland Flamini (WA) Dec 4, 2014
The rise of Chinese investments in the US has Republicans and Democrats alike worried about the trend’s security and economic implications, not to mention Beijing’s long-term intentions.
Juncker’s Sound of Silence
Giles Merritt (Project Syndicate) Dec 4, 2014
New European Commission President Jean-Claude Juncker has yet to respond adequately to the revelation that, under his leadership, Luxemburg made deals enabling multinational corporations to avoid taxes. If Juncker does not respond effectively – and soon – the scandal could eclipse his five-year term at the EU's helm.
The ECB's Balance Sheet, if needed
Ashoka Mody (Pieria) Dec 4, 2014
The ECB has become a safety net for dealing with near-insolvency conditions.
Exporting and firm performance: Evidence from Egyptian rug manufacturers
David Atkin, Amit Khandelwal and Adam Osman (VoxEU) Dec 4, 2014
The WTO’s Aid-for-Trade Initiative, based on the belief that exporting improves the productivity of firms, is meant to bring about growth and reduce poverty. However, we know very little about whether exporting improves firm performance, and if so, through what mechanisms. This column, based on a randomised control trial in Egypt, unravels the channels through which exporting increased the productivity of rug manufacturers.
Cultural diversity and entrepreneurship: New evidence
Andrés Rodríguez-Pose and Daniel C Hardy (VoxEU) Dec 4, 2014
Cultural diversity is increasing globally. This column examines diversity from the point of view of entrepreneurship. It demonstrates that cultural diversity breeds entrepreneurship – but the nature of the diversity is critical. Recent migrants, rather than the descendants of past migrants, create the conditions for a more dynamic entrepreneurial environment. This effect is most clearly substantiated in terms of knowledge-intensive start-ups.
The case for opportunistic inflation
Economist Dec 5, 2014
The Fed may want to dust off a doctrine from the 1990s, “opportunistic disinflation” and rechristen it "opportunistic inflation.”
Ebola and Innovation
Muhammad Hamid Zaman (Project Syndicate) Dec 5, 2014
Informed, data-driven public policy to manage the current Ebola outbreak must remain a top priority. But it is equally important to take stock of the epidemic’s lessons and to ensure that we are prepared for the emergence of other diseases.
European banks: Is growth finally returning?
Jan Schildbach (DB Research) Dec 5, 2014
2014 is witnessing a remarkable reversal in some important European banking trends of the past few years, according to the 9-month results of the continent’s largest banks. This is not solely a positive thing: apart from improvements in core revenues and a return to balance sheet expansion, expense levels are also rising again. Is deleveraging and shrinking over, then?
The Trouble with Cheap Oil
Michael Specter (New Yorker) Dec 5, 2014
The drop in the price of oil is good news for consumers, but, the cheaper fossil fuels become, the more challenging it will be for cleaner forms of energy to become competitive.
The Hard Facts of Global Corruption
Frank Vogl (Globalist) Dec 5, 2014
Action rarely follows rhetoric when it comes to global corruption.
European headwinds: ECB policy and Fed normalisation
Athanasios Orphanides (VoxEU) Dec 5, 2014
In the face of the zero lower bound, the ECB’s reduced its balance sheet by a third. This column introduces a new CEPR Policy Insight by former central-bank governor Athanasios Orphanides, which argues that the outcome has been economic stagnation and harmful disinflation. It explores alternative explanations for this policy, including the role of politics in managing the Eurozone crisis and proposes balance-sheet policy to help fulfil the ECB’s mandate in the face of the Fed’s tightening.
Is the Oil Price Slump an Early Holiday Gift for Some Consumers?
Virginie Maisonneuve, Ji Young Park, Mark Richards (PIMCO) Dec 5, 2014
With 60% of global GDP driven by consumers, the impact that sustained lower oil prices will have on the global economy is an important factor for investors to take into account. The benefits of lower oil prices will not be evenly distributed and it is important to think about countries that stand to benefit more because of higher consumption and/or less economic dependence on oil exports. We are relatively positive on consumer discretionary companies including automobiles and components, durables and apparel, hotels, restaurants and leisure companies as well as media and general retailing. Companies in the industrial sector, such as capital goods, transportation and commercial services and supplies companies, stand to benefit from lower input costs that will support profit margins.
The real cost of government credit support: New estimates
Deborah Lucas (VoxEU) Dec 5, 2014
Governments run the world’s largest financial institutions. The size of government activities has grown in recent decades but comprehensive estimates are unavailable. This column presents new evidence on the costs of government credit support. It argues that governments tend to understate credit costs and the consequences of that could be considerable. Cost underreporting may lead to overinvestment and capital misallocation, could encourage the over-reliance on credit, reduce transparency, and cause a build-up of financial risk.
The new economics of oil: Sheikhs v shale
Economist Dec 6, 2014
The economics of oil have changed. Some businesses will go bust, but the market will be healthier
The Chinese Century
Joseph E. Stiglitz (Vanity Fair) Dec 6, 2014
Without fanfare—indeed, with some misgivings about its new status—China has just overtaken the United States as the world’s largest economy. This is, and should be, a wake-up call—but not the kind most Americans might imagine.
Global banking: Structural change vs fragmentation
Stijn Claessens and Neeltje van Horen (VoxEU) Dec 6, 2014
The Global Financial Crisis has triggered a reduction in cross-border bank lending. This column uses evidence from an updated bank ownership database to show that global banking is not becoming more fragmented. It is rather going through structural transformations. Banks from countries hit by crises are reducing their foreign presence, while banks from emerging and developing markets are stepping into the void.
The march of AI is a long way off
Andrew McAfee (FT) Dec 7, 2014
We have more than enough real near-term challenges to deal with.
Ageing Europe needs new blood
Tony Barber (FT) Dec 7, 2014
Population forecasts show why migration is an economic necessity.
The ECB, demigods and eurozone QE
Wolfgang Munchau (FT) Dec 7, 2014
The question is no longer whether it will happen but how it will work.
Chile rethinks its free market experiment
John Paul Rathbone and Benedict Mander (FT) Dec 7, 2014
Critics warn reforms threaten the country's economic 'miracle'.
A Beijing House of Cards
WSJ Dec 7, 2014
Zhou Yongkang is the latest victim of Xi Jinping’s wiles.
Disillusioned with the future
Lawrence Summers (WP) Dec 7, 2014
People have lost faith with companies and governments.
The 'Big Squeeze' Begins
Michael Story (PIMCO) Dec 7, 2014
Current European Central Bank policies, along with the regulatory environment, are constricting the two primary investment vehicles available to store cash. As many money market funds have maxed out the risk they can take and some regional European banks have started to charge the equivalent of negative rates on deposits, large cash investors are left to ponder how to avoid the potential loss of capital. We believe PIMCO's approach to balancing three key cash management trade-offs---mark-to-market volatility, counterparty risk and capital erosion---may provide an attractive solution for investors.
Chess moves to transform world politics
Gideon Rachman (FT) Dec 8, 2014
International affairs look badly in need of some brilliant new thinking.
Why the Valley struggles to conquer Europe
Karl-Theodor zu Guttenberg (FT) Dec 8, 2014
US technology groups must learn Brussels’ language.
Doubts that linger over solution to ‘too big to fail’
Martin Arnold (FT) Dec 8, 2014
Three big questions hanging over banking regulation.
Bears tighten grip as one-way bets fade
Henny Sender (FT) Dec 8, 2014
Corporate bond yields rise as clouds descend on equity markets.
Europe’s Dodgy Bank Stress Tests
Benn Steil and Dinah Walker (WSJ) Dec 8, 2014
The European Central Bank hailed its recent study, but market valuations of bank stocks are unsettling.
The Russian Economy Is Heading toward Disaster
Anders Åslund (PIIE) Dec 8, 2014
President Vladimir Putin's annual address to the Russian Federal Assembly in the Kremlin on December 4 occurred in the midst of a perfect financial storm, which he largely ignored. His unspoken main message was that no economic reforms would take place.
What a Reserve Currency Should Look Like
Patrick Barron (Mises Daily) Dec 8, 2014
Much has been written lately, including by me, about the coming rejection of the dollar as the primary reserve currency of the world’s most important central banks.
When Oil Becomes Optional
Carl Pope (Bloomberg View) Dec 8, 2014
Oil has been made cheap. Can it be made obsolete?
Can Wall Street and Main Street Stay Aligned?
Mohamed A. El-Erian (Bloomberg View) Dec 8, 2014
Markets usually plunge when the news is good for U.S. workers. Friday's jobs report sent stocks soaring instead. What gives?
Putin Breaks First Law of Petropolitics
Leonid Bershidsky (Bloomberg View) Dec 8, 2014
When prices are low, oil states typically ease up on domestic repression and foreign aggression. Russia's president is determined to defy the trend.
How Elections Mess Up Democracy
Jonathan Bernstein (Bloomberg View) Dec 8, 2014
Political cycles and economic cycles don't coincide. That's how the country ends up with policies that most voters oppose.
The Politics of Corruption in China
Adam Minter (Bloomberg View) Dec 8, 2014
One would think the Chinese authorities would trumpet the indictment of their biggest corruption suspect yet. Here's why they haven't.
Italy's Bad Credit Is Draghi's Moral Hazard
Mark Gilbert (Bloomberg View) Dec 8, 2014
That Italy's 10-year yield has dropped to a record low even as its credit rating has fallen to near junk status shows how difficult it is for the European Central Bank to intervene in the euro economy.
Sweden in Crisis
Carl Bildt (Project Syndicate) Dec 8, 2014
Sweden has been a rare beacon of success in Europe in the years since the 2008 global financial crisis, which is why many are shocked that its latest government collapsed only two months after taking office. What happened, and how likely is it that a snap election will restore stability?
Keep the Internet Tax-Free
Robert D. Atkinson and Ben Miller (Project Syndicate) Dec 8, 2014
Hungary’s government has withdrawn a proposed Internet tax that was absurd – akin to assessing fees on reading books or charging people to have conversations with friends. But the proposal is part of a disturbing trend, with many countries introducing taxes and tariffs that hamper the adoption and use of digital technology.
A Year of Divergence
Mohamed A. El-Erian (Project Syndicate) Dec 8, 2014
In the coming year, the global economy will be characterized by widening discrepancies in economic growth and policies. As these divergences become increasingly difficult to reconcile, policymakers will either have to overcome the obstacles that have so far impeded effective action or allow their economies to become destabilized.
Towards trade policy analysis 2.0
Lucian Cernat (VoxEU) Dec 8, 2014
The world of international trade has been in constant evolution since the rise of containerisation. This column makes the case for the need to upgrade our toolbox for trade policy analysis. An upgraded "Trade Policy Analysis 2.0" would be based on firm-level statistics and a much more refined product disaggregation, both of which are now becoming widely available.
For Saudi Arabia, plunging oil prices are a political weapon
David Gardner (FT) Dec 9, 2014
The Wahhabi nation’s visceral hatred of its Shia rivals should be factored into the equation.
A boycott of China’s bank is futile
Yoichi Funabashi (FT) Dec 9, 2014
The US and Japan should engage with the AIIB while they still can.
China looks for quality investors
Jennifer Hughes (FT) Dec 9, 2014
Marquee-named backers find favour among Asian companies seeking to raise funds.
Follow the Swiss to reserve policy success
John Plender (FT) Dec 9, 2014
Carefully controlled diversification of central bank assets makes sense.
China: Turning away from the dollar
James Kynge and Josh Noble (FT) Dec 9, 2014
Questions remain over the global economic impact of Beijing’s efforts to reduce its financial reliance on the US.
In Latin America, Growth Trumps Climate
Eduardo Porter (FT) Dec 9, 2014
In countries like Brazil, where the economy has been slowing, government policy is prioritizing growth over plans to cut carbon emissions.
A sour U.S.-Mexico sugar deal
Charles Lane (WP) Dec 9, 2014
Controls on Mexican imports raise prices for consumers and only benefit big corporations.
The Industrial Revolution: Why Britain Got There First
Stephen Clarke (History Today) Dec 9, 2014
The search for an explanation for why Britain was the first nation to industrialise.
The World Economy Is Far From Fixed
Bloomberg View Dec 9, 2014
China and Greece show investors that the world economy remains fragile.
Is inequality good or bad for growth?
Brian Keeley (OECD Insights) Dec 9, 2014
If you’ve been following the income inequality debate, you’ll know there’s been much discussion of the question in the headline above. Until just a few years ago, it’s probably fair to say that mainstream opinion leaned towards the “good for growth” side of the debate. Yes, inequality might leave a bad taste in the mouth, but it was worth it if it meant a strong economy.
Institutions, instability and inequality
Lisa Muggeridge (Pieria) Dec 9, 2014
The first of four pieces on the economic challenges facing today's welfare system traces the origins of inequality and instability in Beveridge's original concept.
The Yen Is Falling!
William Pesek (Bloomberg View) Dec 9, 2014
Could Japan's currency hit 200 to the dollar? Maybe not quite, but it's freefall is deeply destabilizing.
Ruble Collapses, Russians Yawn
Leonid Bershidsky (Bloomberg View) Dec 9, 2014
Despite sanctions, Russians aren't consuming less than before. Wealthier Muscovites are even consuming more.
Kashmir Needs Growth, Not a Nobel
Dhiraj Nayyar (Bloomberg View) Dec 9, 2014
This year's joint Peace Prize is nice. But tensions over the disputed state of Kashmir will only ease when prosperity arrives.
Seeking the Future of Europe in the Ancient Hanseatic League
Mark Fleming-Williams (Stratfor) Dec 9, 2014
A bargain, forged in the fires of 2012's economic emergency, has defined the European Union for the past two years. It was an agreement made between two sides that can be defined in several terms — the center and the periphery, the north and the south, the producers and the consumers — but essentially one side, led by Germany, provided finance, while the other, fronted by Spain, Portugal, Ireland and Greece, promised change. In order to gauge this arrangement's chances of ultimately succeeding, it is important to understand what Germany was hoping to achieve with its conditional financing. The answer to that question lies in Germany's own history.
The Profitability of Trust
Klaus Schwab (Project Syndicate) Dec 9, 2014
Though the effects of the most devastating financial crisis in decades have begun to fade, debate about companies' priorities – whether they should put profits or the common good first – is far from over. But the real conflict is not between profit maximization and social responsibility; it is between short- and long-term thinking.
Immigration and the New Class Divide
Ian Buruma (Project Syndicate) Dec 9, 2014
Anti-immigration sentiment is on the rise everywhere, from the US to Denmark to Singapore. But the cause is not bigotry or fear of competition for jobs; it is genuine anxiety stemming from the transformation of national, religious, and cultural identities in the new globalized world economy.
The Year of Sustainable Development
Jeffrey D. Sachs (Project Syndicate) Dec 9, 2014
Next year represents this generation’s greatest opportunity to progress toward sustainable development. Three summits in the latter half of 2015 can reshape the global development agenda, and give an important push to vital changes in the functioning of the world economy.
Settling WTO disputes without solving the problem: Abusing compensation
Simon J Evenett and Alejandro Jara (VoxEU) Dec 9, 2014
The WTO’s dispute settlement procedure was set up to help governments challenge policies that contravene WTO agreements. This column argues that two recent cases show that cases can be settled without resolving the problem and sometimes at the expense of other trading partners. This is an abuse of the system and a step backwards for the world trading system.
ECB need not fear the printing press
Reza Moghadam (FT) Dec 10, 2014
The case for quantitative easing is compelling but it requires broad support.
Shifts and shocks on the soft power scale
Roula Khalaf (FT) Dec 10, 2014
The US tops the list for the Monocle Magazine survey, bumping Germany into second.
Double whammy in dollar’s growth story
James Mackintosh (FT) Dec 10, 2014
US currency performs switcheroo as it slips despite investors seeking safety.
Look, no gilts: why ECB should ape BoE
Laurence Mutkin (FT) Dec 10, 2014
Setting up an asset purchase facility is best way to implement QE
‘Ouch’ potential of global volatility
Ralph Atkins (FT) Dec 10, 2014
Spiky pattern so far has been relatively harmless as central banks restore calm.
The Mergers and Acquisitions Cycle: Buy. Divide. Conquer.
Andrew Ross Sorkin (NYT) Dec 10, 2014
The current deal-making boom has been filled with headline-grabbing mergers. At the same time, corporate America is spinning off assets by the truckload. Who is creating more value?
The European Union Lags on Basel III Banking Reforms
Nicolas Véron (PIIE) Dec 10, 2014
The European Union, which often claims leadership on championing global financial standards, has been found to be the global laggard on banking regulation, as documented by the latest report (December 5) of the Basel Committee on Banking Supervision. As was to be expected, the Basel Committee—in examining adherence to international rules last year on banking regulation found the European Union "materially noncompliant," the United States "largely compliant," and all other jurisdictions "compliant.
Political Timetables for US Free Trade
Cathleen Ciminio (PIIE) Dec 10, 2014
The United States is negotiating two major free trade agreements (FTAs): the Trans-Pacific Partnership (TPP), which involves 10 other countries, and the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union. Both negotiations have been held up by stumbling blocks, but there is cautious but growing optimism about the prospects for a TPP deal in 2015.
First China, Now India: Putin's Tilt to Asia
Nick Butler (Globalist) Dec 10, 2014
Vladimir Putin puts on the hard sell in Asia.
China's Central Bank Balancing Act
William Pesek (Bloomberg View) Dec 10, 2014
The world is counting on China to combat deflation. But is its central bank ready for a star turn?
Is Tomorrow Too Late for Greece?
Megan McArdle (Bloomberg View) Dec 10, 2014
The thing about financial crises is that you can never quite rest easy.
Sometimes Markets Are Stupid
Noah Smith (Bloomberg View) Dec 10, 2014
I’m generally a fan of the efficient markets hypothesis.
Global Energy Realism
Ana Palacio (Project Syndicate) Dec 10, 2014
To create a global energy system that can meet rising demand within the constraints of carbon neutrality, we must avoid the pitfalls that have plagued past responses. In particular, we must offset ideology with realism, promote private-sector involvement, adopt a long-term perspective, and follow through on our commitments.
Global volatility has ‘ouch’ potential
Ralph Atkins (FT) Dec 11, 2014
Spikes so far are relatively harmless as central banks restore calm.
Misreading the Lessons From Financial Crises
Floyd Norris (NYT) Dec 11, 2014
The world has experienced one financial crisis after another over the last few decades — runaway inflation, the stock market crash of 1987, the East Asian crisis of the late 1990s, the popping of the dot-com bubble in the face of accounting scandals and, finally, the crisis that led to the Great Recession. s
Mad as Hellas
Paul Krugman (NYT) Dec 11, 2014
Greece appears to be in crisis again. Will we learn the right lessons this time?
Azevêdo Calls Upon WTO Members to Make 2015 a "Year to Remember"
Bridges, Volume 18, Number 42 Dec 11, 2014
At the global trade body's last General Council meeting of the year, WTO Director-General Roberto Azevêdo urged members to work on regaining their negotiating momentum going into 2015, following a tumultuous few months at the global trade body.
African Union Urges Concrete Action as Regional Trade Integration Hits Hurdles
Bridges, Volume 18, Number 42 Dec 11, 2014
African countries should translate their regional integration projects into real action on the ground, especially given today's rapidly evolving landscape of international trade regulation, African Union (AU) trade ministers said following a 4-5 December conference in Addis Ababa, Ethiopia.
UN Secretary-General Issues Guidance to Post-2015 Development Agenda Process
Bridges, Volume 18, Number 42 Dec 11, 2014
World leaders should prioritise six essential elements in their deliberations on a post-2015 development agenda – namely dignity; people; prosperity; planet; justice; and partnership – according to an advanced unedited version of a report released by UN Secretary-General Ban Ki-moon last Thursday.
IMF Work Agenda Seeks to Jump-Start Growth
IMF Survey Dec 11, 2014
The IMF, seeking to prevent the global economy from settling into a “new mediocre,” has published a new work program that lays out its strategic priorities for the period ahead.
India and the Great Game of Energy
Sanjeev S. Ahluwalia (Globalist) Dec 11, 2014
Will signing two big energy deals with Russia irritate both China and the U.S.?
Is Innovation Over?
Mark Buchanan (Bloomberg View) Dec 11, 2014
The next big discoveries could come in the sphere of human interaction.
A Ferrari Is Still a Ferrari
Mark Gilbert (Bloomberg View) Dec 11, 2014
Ferrari's decision to consider relocating highlights Italy's lack of corporate tax competitiveness in a fracture EU fiscal regime.
Development for the People
Abdoulaye Mar Dieye (Project Syndicate) Dec 11, 2014
The three countries most affected by Ebola – Guinea, Liberia, and Sierra Leone – are fragile, divided, and uniquely prone to shocks. More broadly, the region’s current crisis should inspire reflection about how the world supports and advances development.
Europe’s Misguided Investment Mania
Daniel Gros (Project Syndicate) Dec 11, 2014
The lynchpin of the new European Commission’s economic strategy is its recently unveiled plan to increase investment by €315 billion ($390 billion) over the next three years. But the Commission’s proposal is misguided, both in terms of its emphasis on investment and its proposed financing structure.
Inequality and the American Child
Joseph E. Stiglitz (Project Syndicate) Dec 11, 2014
Though an average American childhood may not be the worst in the world, the disparity between the country's wealth and the condition of its children is unparalleled. And, without compensatory measures, unequal opportunities translate into unequal lifelong outcomes by the time children reach the age of five.
Good and Bad Inequality
Dani Rodrik (Project Syndicate) Dec 11, 2014
Economics is a science that can claim to have uncovered few, if any, universal truths. Like almost everything else in social life, the relationship between equality and economic performance is likely to be contingent rather than fixed, depending on the deeper causes of inequality and many mediating factors.
The Economic Consequences of Drug Resistance
Jim O'Neill (Project Syndicate) Dec 11, 2014
The problem of rising antimicrobial resistance is as much about economics as it is about medicine. Left unchecked, drug-resistant diseases could kill ten million people a year by 2050, while cutting global GDP by at least 3%.
Putting Deflation First
Barry Eichengreen (Project Syndicate) Dec 11, 2014
The European Central Bank is moving, hesitantly but ineluctably, toward quantitative easing, because the threat of deflation – and the ineffectiveness of its previous measures – leaves it no choice. The question is whether the ECB will be able to move quickly enough.
Growth slowdowns: Middle-income trap vs. regression to the mean
Lant Pritchett and Lawrence H. Summers (VoxEU) Dec 11, 2014
Dozens of nations think they are in the ‘middle-income trap’. Lant Pritchett and Larry Summers present new evidence that this trap is actually just growth reverting to its mean. This matters since belief in the ‘trap’ can lead governments to misinterpret current challenges. For lower-middle-income nations the 21st century beckons, but there are still 19th century problems to address. Moreover, sustaining rapid growth requires both parts of creative destruction, but only one is popular with governments and economic elites.
Russian Demographics: The Perfect Storm
Joseph Chamie and Barry Mirkin (YaleGlobal) Dec 11, 2014
High mortality, low fertility and emigration of the well-educated are shrinking Russia
Managing House Price Booms: The Role of Macroprudential Policies
Ratna Sahay (IMF) Dec 11, 2014
I will cover three areas in my remarks: the state of global housing markets; the policy framework to manage house price booms; the role of macroprudential policies.
Why Swaps Matter
Mark Whitehouse (Bloomberg View) Dec 12, 2014
Did you know that your federally insured deposits can be used to post collateral on exotic derivatives bets?
EU Can't Tell Greeks How to Vote
Mark Gilbert (Bloomberg View) Dec 12, 2014
Jean-Claude Juncker reveals yet again that he's more concerned with his own livelihood than the needs of the citizens he purports to represent.
The Joy of Growth
Barry Ritholtz (Bloomberg View) Dec 12, 2014
What the pickup in the economy means for stocks, bonds and the Federal Reserve.
Fearing the Fed
Mark Gilbert (Bloomberg View) Dec 12, 2014
The debt burden on every man, woman and child in the developed world has climbed by $50,000 since 2000; that's 50,000 more reasons to fear a Fed rate increase.
The Russian Central Bank's Fatalistic Optimism
Leonid Bershidsky (Bloomberg View) Dec 12, 2014
Russian economic policymakers believe they can steer the country through a long-term adjustment in oil prices without squandering international reserves.
Faster Growth Through Stronger Regulation
Rod Hunter (Project Syndicate) Dec 12, 2014
Cutting bureaucratic red tape can help foster a culture of entrepreneurship and dynamism in developing countries. But putting in place an effective regulatory and enforcement infrastructure can be equally important, especially in areas where consumers have difficulty assessing the value of products and the risks they can pose.
New deal(s)? Chinese investment in Germany is entering a new phase
Hannah Levinger (DB Research) Dec 12, 2014
China-Europe relations are increasingly being shaped by the expanding bilateral exchange between China and Germany, its largest trading partner in the EU. Germany accounted for 45% of EU exports to China and 28% of EU imports from China in 2013. In the first nine months of 2014, EUR 114 bn worth of goods were shipped between the two countries, up 8% from the same period in 2013. Building on these well-established trade ties, China and Germany are now embarking on a concerted push to strengthen investment relations in sync with a surge in Chinese M&A activity into Germany.
Central-bank credibility, reputation and inflation targeting in historical perspective
Michael Bordo and Pierre Siklos (VoxEU) Dec 12, 2014
Central bank credibility is critically linked to communication and commitment. This column analyses the historical evolution of credibility, showing its prewar peak and the subsequent dip from which it did not fully recover until the 1980s. Inflation targeting has played a key role in establishing credibility in both developed and emerging market economies.
Trying to Reinvent Italy
Roger Cohen (NYT) Dec 13, 2014
The prime minister struggles to get the country to change its ways.
Greece and the euro: Crisis revisited
Economist Dec 13, 2014
The euro is still vulnerable, and Greece is not the only problem.
Obesity: A global economic issue
Richard Dobbs and Corinne Sawers (VoxEU) Dec 13, 2014
Obesity has a similar impact on global GDP as smoking, and around 60% of obese people are in developing countries. This column discusses the seriousness of the problem, and argues that more policy action is warranted – particularly in the form of low-risk, low-cost behavioural interventions.
Too big to resist: Wall Street’s comeback
Edward Luce (FT) Dec 14, 2014
There will be another crisis. No law can stop it, no regulator can foresee it.
Prepare for the coming Japanese boom
Peter Tasker (FT) Dec 14, 2014
Country sees strengthening of solvency thanks to stock of net overseas assets.
Cuba's Economy at a Crossroads
NYT Dec 14, 2014
A change in Washington's attitude could help tip Havana toward liberalization.
Wall Street's Revenge
Paul Krugman (NYT) Dec 14, 2014
How the Masters of the Universe got politicians to bring back moral hazard.
Greece Revisits the Panic
WSJ Dec 14, 2014
Antonis Samaras wants to scare voters rather than try to persuade them.
Abe's Second Chance
Bloomberg View Dec 14, 2014
Now that he has voters' support to pursue his economic-revival program, Japanese Prime Minister Shinzo Abe should look abroad for help with his reforms.
Dirk Schoenmaker and others (VoxEU) Dec 14, 2014
Macroprudentialism is now part of the standard macroeconomic toolkit but it involves a set of relatively untested policies. This new Vox eBook collects the thinking of a broad range of leading US and European economists on the matter. A consensus emerges on broad objectives of macroprudential supervision, but important disagreements remain among the authors.
Eurozone bank integration: EU versus non-EU banks
Vincent Bouvatier and Anne-Laure Delatte (VoxEU) Dec 14, 2014
Eurozone financial integration is reversing, with 2013 cross-border capital flows at 40% of their 2007 level. This column discusses research showing that banking integration has in fact strengthened in the rest of the world.
Winners and losers of oil price plunge
Chris Giles (FT) Dec 15, 2014
Inflation and strong dollar could curb global economic impact
Oil price fall could add to banks’ woes
Parick Jenkins (FT) Dec 15, 2014
Outstanding loans to energy sector could cause large-scale losses.
Mexico’s drama faces painful second act
John Paul Rathbone (FT) Dec 15, 2014
As growth fails to take off, can Peña Nieto avoid a tragic ending?
Time to leave the German Bund party
Stephen Major (FT) Dec 15, 2014
Balance of risk and reward has shifted as expectations rise of ECB QE.
Prepare for the coming Japanese boom
Peter Tasker (FT) Dec 15, 2014
Country sees strengthening of solvency thanks to stock of net overseas assets.
Vladimir Putin vs. the Currency Markets: What to Know About the Ruble’s Collapse
Neil Irwin (NYT) Dec 15, 2014
Raising interest rates by 6.5 percentage points in the middle of the night is a sure sign of an emerging-markets currency crisis.
Why the Ruble Fell as Oil Rose
Leonid Bershidsky (Bloomberg View) Dec 15, 2014
The ruble dropped sharply today despite an uptick in the oil price.
The Fed's Long Trip Back to Normal
Mohamed A. El-Erian (Bloomberg View) Dec 15, 2014
The Fed must strike a delicate balance between an improving U.S. recovery and a worsening outlook abroad.
Eight Things I Wish for Wall Street
Michael Lewis (Bloomberg View) Dec 15, 2014
A holiday list from Michael Lewis, on how to make things better on Wall Street.
Oil: Anatomy of a Bubble
Richard Phillips (Globalist) Dec 15, 2014
Life is good — for oil-consuming countries at least.
Divest in a Better Future
Mike McGinn (Project Syndicate) Dec 15, 2014
The movement to divest from oil and coal companies is growing fast. Though it takes courage to confront the fossil-fuel industry, divestment has been a popular move wherever it has been carried out, especially among young people, who will face the consequences of global warming.
The Real Lima Deal
Michael Jacobs (Project Syndicate) Dec 15, 2014
This year’s annual UN climate-change conference in Lima, Peru, finally concluded in the early hours of Sunday morning, more than 24 hours after the scheduled close, after fierce argument in the final days. Though the Lima deal is weak in many respects, it also represents a fundamental breakthrough for shaping a global climate regime.
Standing Up to Illiberalism
Chris Patten (Project Syndicate) Dec 15, 2014
In a widely cited speech this summer, Hungarian Prime Minister Viktor Orbán made the case for an "illiberal state," in contrast to failed "liberal democracies." His remarks are an echo of a widely spreading unease in the West that must be countered with robust action.
A New Direction for Global Health
Mitch Daniels, Tom Bollyky an Tom Donilon (Project Syndicate) Dec 15, 2014
Dramatic changes in urbanization, global trade, and consumer markets – which occurred over decades in wealthy countries – are happening at a faster rate, and at a much larger scale, in still-poor countries. These trends have brought substantial health benefits, but have given rise to significant challenges as well.
Why Are Commodity Prices Falling?
Jeffrey Frankel (Project Syndicate) Dec 15, 2014
Most dollar commodity prices have fallen since the first half of the year. Though a host of sector-specific factors affect the price of each commodity, the fact that the downswing is so broad – as is often the case with big price swings – suggests that macroeconomic factors are at work.
Make policy for real, not ideal, humans
Martin Wolf (FT) Dec 16, 2014
Many believe dysfunctional behaviour in finance is due solely to distorted incentives.
Russia heads into storm with no captain
Sergei Guriev (FT) Dec 16, 2014
Moscow’s worst fears have come true. Comparisons with 2008-09 look wishful.
Beijing cannot count on easy money
Ruchir Sharma (FT) Dec 16, 2014
The world is unable to afford a financial accident in China.
Charting a Crazy 24 Hours in Global Markets
Neil Irwin (NYT) Dec 16, 2014
What does the currency crisis in Russia mean for the United States? Probably lower interest rates, for one thing.
The Ruble’s Fall and Mr. Putin’s Reckoning
NYT Dec 16, 2014
Russia’s economic calamity rests largely with the disastrous policies of President Vladimir Putin.
Ruble Crisis Shows the Real Putin
Holman Jenkins (WSJ) Dec 16, 2014
More proof in the Rosneft bailout that it will be cronies first, women and children last.
Asia Isn't Ready for a China Crash
William Pesek (Bloomberg View) Dec 16, 2014
Even if China manages a soft landing, its neighbors need to prepare better for an era of slower growth.
Will Ruble's Rout Force Capital Controls?
Leonid Bershidsky (Bloomberg View) Dec 16, 2014
An emergency central bank rate hike did not work in Russia, so the likelihood is growing that it will follow Malaysia's 1998 example and impose capital controls.
Look Out for Sovereign-Bond Volatility
Mohamed A. El-Erian (Bloomberg View) Dec 16, 2014
With countries' economic outlooks diverging, something has to give.
Yes, Japan Lost a Decade. So Did U.S.
Noah Smith (Bloomberg View) Dec 16, 2014
Japan lost just one decade of growth, not two; the U.S. lost one as well.
For Putin, Oil and Sanctions Don't Mix
Bloomberg View Dec 16, 2014
The economic collapse and paranoid isolation of a major military power is in nobody's interests -- not even Vladimir Putin's.
The Oil Price Opportunity
Kemal Dervis (Project Syndicate) Dec 16, 2014
Though lower oil prices may boost overall global growth, with the oil-importing advanced economies gaining the most, the impact on efforts to combat climate change could be devastating. But this decline in oil prices could also provide a rare political opportunity to introduce an explicit carbon price.
How to Prevent the End of Economic Growth
Carl Benedikt Frey (SciAm) Dec 16, 2014
How the digital economy could lead to secular stagnation.
Chinese Agriculture Goes Global
Loro Horta (YaleGlobal) Dec 16, 2014
China invests in land and research in Africa, South America, Central Asia to feed the world’s largest population
Can Putin Save the Plunging Ruble?
John Cassidy (New Yorker) Dec 16, 2014
The Russian leader has three options.
Oil price fall will benefit Europe
Sarah Gordon (FT) Dec 17, 2014
Travel and leisure groups, tyremakers and clothing retailers will reap rewards.
A sharing economy must share the risks
John Gapper (FT) Dec 17, 2014
We have 20th-century benefits and insurance that do not fit the 21st-century worker.
The only cure for what plagues Russia
Anders Aslund (FT) Dec 17, 2014
Moscow must act to get sanctions lifted or the economy will struggle.
Fed must not bounce from crisis to bubble
John Authers (FT) Dec 17, 2014
Lessons from mistakes that led to the 1999 rally.
Why Opec is increasingly irrelevant
Nawaf Obaid (FT) Dec 17, 2014
Saudis have sent message that market not Opec should decide oil prices.
Ruble Crisis Is Testing Russia's Resources
Jenny Anderson (NYT) Dec 17, 2014
The country’s Finance Ministry said it was prepared to sell as much as $7 billion of its foreign currency reserves to support the ruble, which an official called “extremely undervalued.”
Successful modernization of aid
Erik Solheim (OECD Insight) Dec 17, 2014
The donor countries representing well above 90% of all global development aid agreed in the Development Assistance Committee of the OECD on December 16 on a set of measures to modernize official development assistance, ODA. We will build on the historic success of aid and make it fit for the future. The goal is to provide more and better aid and support the global process of financing the post-2015 sustainable development goals.
Deflation Stalks the Globe
Mark Gilbert (Bloomberg View) Dec 17, 2014
Next year may test whether a general decline in prices can snuff out growth.
Running From the Ruble
Sergei Guriev (Project Syndicate) Dec 17, 2014
The cause of Russia’s “Black Monday” was readily apparent: the government bailout of state-owned Rosneft, the country’s largest oil company. Usually, bailouts calm markets; but this one recalled early post-Soviet experiments, when the Central Bank of Russia issued direct loans to enterprises – invariably fueling higher inflation.
Closing India’s Technology Gap
Raghunath A. Mashelkar and Anu Madgavkar (Project Syndicate) Dec 17, 2014
It is a notable irony that India, which produces solutions to many of the knottiest information-technology problems faced by the world’s largest companies, has benefited little from technological progress. Fortunately for India’s citizens, Prime Minister Narendra Modi intends to change that.
Questioning The Models That Mold Our Markets
Ashby Monk (II) Dec 17, 2014
Should financial economists explain the markets or move them?
The verdict on higher capital requirements
Stephen Cecchetti (VoxEU) Dec 17, 2014
Regulators forced up capital requirements after the Global Crisis – triggering fears in the banking industry of dire effects. This column – by former BIS Chief Economist Steve Cecchetti – introduces a new CEPR Policy Insight that argues that the capital increases had little impact on anything but bank profitability. Lending spreads and interest margins are nearly unchanged, while credit growth remains robust everywhere but in Europe. Perhaps the requirements should be raised further.
What I learnt about growth policy at the World Bank
Brian Pinto (VoxEU) Dec 17, 2014
Since the Global Crisis, concerns have grown that advanced economies are suffering from secular stagnation. This column discusses the lessons that can be learnt from the economic transition of central and eastern Europe and the emerging-market crises of the late 1990s and early 2000s. Structural reform is particularly costly in the context of a debt overhang and an overvalued exchange rate. However, the crux is not debt restructuring per se, but whether economic governance changes credibly for the better following it.
Forces reshaping world in two words
Philip Stephens (FT) Dec 18, 2014
The splintering of the old order is at its most stark, and brutal, in the Middle East.
Russia sounds a warning on global debt
Gillian Tett (FT) Dec 18, 2014
Should the dollar continue to rise, currency and funding mismatches could be exposed.
High drama looms for high-yield bonds
Ralph Atkins (FT) Dec 18, 2014
Next move in market could test central banks’ grip on markets.
Indian Ocean tsunami: Building blocks
Ben Bland (FT) Dec 18, 2014
A decade on poor governance is holding back Aceh.
Putin's limited options to halt the crisis
Mohamed El-Erian (FT) Dec 18, 2014
Any meaningful recovery in Russia’s economy requires a lifting of sanctions.
Putin’s Bubble Bursts
Paul Krugman (NYT) Dec 18, 2014
The global plunge in oil prices and the falling ruble have wreaked havoc on the Russian economy. It’s been quite a comedown for the strongman.
The U.S. Needs a Free-Trade Deal With China
Maurice Greenberg and Fred Bergsten (WSJ) Dec 18, 2014
The benefits? How about an extra $400 billion in American exports each year, and $100 billion in national income.
Beyond Government Debt-to-GDP Ratios
Paolo Mauro and Benedict Clements (PIIE) Dec 18, 2014
Public discourse on the state of public finances across the world focuses on government debt-to-GDP ratios. However, projected increases in age-related spending (health care and pensions) can fundamentally alter our views on which countries will need to undertake the most fiscal adjustment during the next 10 or 20 years.
Officials Express Optimism as Trans-Pacific Trade Talks Head into 2015
Bridges, Volume 18, Number 43 Dec 18, 2014
Negotiations for a trade deal among 12 Pacific Rim countries that would cover over 40 percent of global GDP are set to continue into 2015, despite prior hopes that an agreement – even "in principle" – might be announced before this year draws to a close.
EU's Greek Drama Needs a Final Act
Bloomberg View Dec 18, 2014
Greece looks increasingly likely to face early elections after a poor first-round attempt to elect a president. The best the EU can do is focus on reform, not austerity.
How Oil Complicates Monetary Policy
Clive Crook (Bloomberg View) Dec 18, 2014
Why the plunge in oil prices makes central bankers nervous.
Should the U.S. Get a New Banker?
William Pesek (Bloomberg View) Dec 18, 2014
Japan may soon replace China as America's banker. The U.S. should encourage the shift.
Revenge of the Ruble
Daniel Cloud (FA) Dec 18, 2014
What the crisis means for Putin.
Are Chinese Companies Retooling in Africa?
Witney Schneidman (Brookings) Dec 18, 2014
Challenges and criticisms faced by Chinese companies developing new approaches to investing in Africa.
Xi’s Reform Gambit
Andrew Sheng and Xiao Geng (Project Syndicate) Dec 18, 2014
When Deng Xiaoping initiated China’s market-oriented reforms 35 years ago, he was taking the biggest political risk since the founding of the People’s Republic in 1949. Now that President Xi Jinping has initiated his own, equally risky program of reform, one must ask whether his strategy, too, will pay off.
Secondary Schools’ Primary Importance
Kamal Ahmad and Joel E. Cohen (Project Syndicate) Dec 18, 2014
A half-century of remarkable progress in providing primary education to children could be lost if we fail to provide opportunities for further schooling. Investing in secondary education in the developing world would have far-reaching benefits – and need not cost a fortune.
Sustaining African growth
Marcelo Giugale (VoxEU) Dec 18, 2014
Sub-Saharan Africa has been growing steadily over the past decade. The main question that policymakers should face is how to sustain the region’s progress. This column argues that the positive growth is due both to good policies and higher prices of certain commodities (such as oil, gas, and minerals). To ensure sustainability governments should not rely only on these higher rents but rather implement policies that take advantage of them.
Rethinking the Goal of 2% Inflation
Neil Irwin (NYT) Dec 19, 2014
A target that started 25 years ago in New Zealand has become the gospel of governments worldwide. But critics say it leaves central banks with too little flexibility.
Lithuania Risks a Greek Euro Tragedy
Mark Gilbert (Bloomberg View) Dec 19, 2014
Greece's cautionary tale about the single currency has many Lithuanians reluctant to adopt the euro come Jan. 1.
How Japan Bankrupted Itself
Daniel Stelter (Globalist) Dec 19, 2014
The story of Japan’s decline — and the lessons for Europe.
Unlocking ASEAN’s Potential
Kishore Mahbubani and Fraser Thompson (Project Syndicate) Dec 19, 2014
For decades, the Association of Southeast Asian Nations has been asking whether ten countries with different cultures, political systems, and levels of economic development can act in concert to expand their collective potential. Judging by their leaders' ambitious vision for cooperation, the answer may be yes.
Where Has Global Warming Gone?
Ka-Kit Tung (Project Syndicate) Dec 19, 2014
For the last 15 years, according to the conventional way of measuring global warming, the planet does not seem to have become any hotter. But the reason is not that our greenhouse-gas emissions are no longer changing the earth’s climate, it is that surface temperature is a poor measure of human-induced warming.
Is the ECB Doing Enough?
Peter Praet(Project Syndicate) Dec 19, 2014
The ECB has implemented a series of measures in response to economic sluggishness and financial trepidations in the euro area. Tentative evidence suggests that the measures are delivering tangible benefits to the European economy, and the ECB still has plenty of weapons in its arsenal should they prove necessary.
Understanding Piketty: Merit and rent in a growing economy
Enrico Minelli (VoxEU) Dec 19, 2014
Growth and inequality are back at the centre of the economic debate. This column presents a framework for interpreting Thomas Piketty’s data based on Paul Romer’s model of endogenous growth. Two balanced growth regimes are possible in this framework: one (‘merit’) with a low capital–output ratio, a high interest rate, and high growth; and another (‘rent’) with a higher capital–output ratio, a somewhat lower interest rate, and much lower growth. An increase in the returns to physical capital accumulation compared to innovation could explain a shift from ‘merit’ to ‘rent’.
Guzzling in the Gulf
Jim Krane (FA) Dec 19, 2014
The monarchies face a threat from within.
Oil price volatility and speculation
Samya Beidas-Strom and Andrea Pescatori (VoxEU) Dec 20, 2014
The recent dramatic fall in oil prices has renewed the interest in the importance of shocks in the oil price volatility. This column presents results from new research on the role of shocks and speculation on oil prices. The authors find that when speculation is short in duration, it has the weakest impact on oil prices and demand shocks have the largest. However, when speculation is allowed to have short- and long-term effects, it is the main contributor to the volatility of oil prices.
The riddle of Argentina
Nauro F Campos (VoxEU) Dec 20, 2014
Argentina is the only country in the world that was 'developed’ in 1900 and ‘developing’ in 2000. Various explanations highlight the roles of trade openness, political institutions, financial integration, financial development, and macroeconomic instability. No study has so far attempted a quantitative assessment of the relative importance of each of these competing factors. This column presents new evidence suggesting that financial development and institutional change are two main factors behind the unusual growth trajectory of Argentina over the last century.
Eurozone watchers should keep a close eye on Spain
Stephanie Flanders (FT) Dec 21, 2014
Deflation need not be the end of the world if it is the result of structural changes that boost optimism.
Investment: Loser’s game
John Authers (FT) Dec 21, 2014
With as few as 10 per cent of US active managers beating their benchmark in 2014, they are having to employ new tactics.
Ready for $20 Oil?
A. Gary Shilling (Bloomberg View) Dec 21, 2014
The game of chicken between OPEC and other oil producers is just beginning, and it could drive oil prices as low as $20 a barrel.
Part II: Abe's Remaining Options
Daniel Stelter (Globalist) Dec 21, 2014
The question is not if, but how Japan's creditors lose their money.
From Putin’s parallel universe the crisis looks bright
Eugene Rumer (FT) Dec 22, 2014
The president will see an opportunity to tighten his grip on business.
A year in a word: Inequality
Alan Beattie (FT) Dec 22, 2014
An old problem given new exposure by an improbable academic blockbuster.
Oil’s fall may prompt BoJ easing
Ben McLannahan (FT) Dec 22, 2014
Central bank is aiming for a 2% rate of inflation.
Draghi must choose right type of QE
Diana Choyleva (FT) Dec 22, 2014
One type works for liquidity crunch, the other when problem is solvency.
Shale and the Falling Price of Oil
Joe Nocera (NYT) Dec 22, 2014
With global oil prices falling and falling some more, the Saudis don't want a repeat of 2008.
Quantitative Easing Won’t Lift Europe’s Economy
Hamish McRae (WSJ) Dec 22, 2014
London is packed with young Europeans doing entry-level jobs. They’ve fled labor markets tied up by red tape.
Why is the U.S. reducing its democracy aid?
Thomas Carothers (WP) Dec 22, 2014
The United States is cutting back on democracy aid.
Global economy not running smoothly despite falling oil prices
Stefan Schneider (DB Research) Dec 22, 2014
Taking the global PMI as the benchmark, the global economy has lost momentum over recent months. However, the slump in oil prices to just USD 60 per barrel of late, a drop of 45% yoy (Brent Blend), is likely to provide a major boost to the global economy – at least temporarily. Oversupply on the global oil market has expanded markedly due to the huge increase in petroleum production in the US – it is now the world's biggest producer – and the unwillingness of OPEC to reduce its production quotas. Even if things turn out as we expect and oil production in OPEC and elsewhere is likely to be curtailed in the next few months because of the price slump, we expect the average price of Brent in 2015 to be USD 72.50 per barrel and thus nearly 30% down on the previous year.
Central Bankers Weren't Meant to Be Heroes
Bloomberg View Dec 22, 2014
Good economic policy means never having to ask your central bank to be a hero.
India Needs to Spend Smarter, Not Less
Dhiraj Nayyar (Bloomberg View) Dec 22, 2014
In his next budget, Narendra Modi needs to lay out a plan to spend smarter.
Emerging-Market Crises and Russia's Fix
Mohamed A. El-Erian (Bloomberg View) Dec 22, 2014
Vladimir Putin can forget about IMF help unless he backs off on Ukraine and re-engages with the West.
Don't Fear Oil Prices and Deflation
Ramesh Ponnuru (Bloomberg View) Dec 22, 2014
Falling oil prices aren't a cause for gloom.
Who Gets Hurt When Oil Falls
A. Gary Shilling (Bloomberg View) Dec 22, 2014
The crude-oil price war could create more economic losers than winners.
Measuring the Next Global Development Goals
Bjørn Lomborg (Project Syndicate) Dec 22, 2014
Measurement is crucial for creating a development agenda that will do the most good for the most people, given limited resources. But how much money can the international community justify diverting from development initiatives to improving data collection and analysis?
Part III: Why Abe's Exchange Rate Strategy Failed
Daniel Stelter (Globalist) Dec 22, 2014
Will it be bankruptcy, hyperinflation or a miracle for Japan?
Beyond Basel III
Xavier Vives (VoxEU) Dec 22, 2014
Banking has recently proven much more fragile than expected. This column argues that the Basel III regulatory response overlooks the interactions between different kinds of prudential policies, and the link between prudential policy and competition policy. Capital and liquidity requirements are partially substitutable, so an increase in one requirement should generally be accompanied by a decrease in the other. Increased competitive pressure calls for tighter solvency requirements, whereas increased disclosure requirements or the introduction of public signals may require tighter liquidity requirements.
Liquidity-driven foreign direct investment
Ron Alquist, Rahul Mukherjee and Linda Tesar (VoxEU) Dec 22, 2014
Foreign direct investment is an essential element in 21st century development strategies. This column discusses new evidence that estimates the importance of financial liquidity as a driver of such flows into emerging-market economies. Financial liquidity considerations are key determinants of the size and ownership structure of these investments.
Thijs Van de Graaf and Aviel Verbruggen (FA) Dec 22, 2014
How oil producers can counteract the global decline in demand.
Global Aging: More Headwinds for U.S. Stocks?
Zheng Liu, Mark M. Spiegel, and Bing Wang (FRBSF Economic Letter) Dec 22, 2014
The retirement of the baby boomers is expected to severely cut U.S. stock values in the near future. Since population aging is widespread across the world’s largest countries, this raises the question of whether global aging could adversely affect the U.S. equity market even further. However, the strong relationship between demographics and equity values in this country do not hold true in other industrial countries. This suggests that global aging is unlikely to create additional headwinds for U.S. equities.
China’s lenders can aid regional growth
Henny Sender (FT) Dec 23, 2014
A new generation of financial institutions are symbolic of a transition in the country’s development.
Enjoy the greatest human escape of all
Martin Wolf (FT) Dec 23, 2014
More prosperity is not necessary nor sufficient for improved health. It just makes it easier.
Putin has one weapon to protect the rouble
Olivier Jeanne (FT) Dec 23, 2014
Capital controls can work if tied to a credible plan to boost confidence.
Africa celebrates its elders
Michael Holman (FT) Dec 23, 2014
The continent would appear to be more caring than its former colonisers.
China sinks to 'new normal'
Michael Lelyveld (Radio Free Asia/AT) Dec 23, 2014
President Xi Jinping recently told leaders of the Asia-Pacific Economic Cooperation summit that China's lower growth rates are now the "new normal". That after economic activity has continued toward its third consecutive year of below 8% growth and quarterly expansion at the slowest annual pace since 1999.
Deflation Isn't What's Holding Europe Back
Leonid Bershidsky (Bloomberg View) Dec 23, 2014
The European countries that have experienced deflation this year have seen positive economic growth and increases in consumer spending.
How Putin Stopped the Ruble's Collapse
Leonid Bershidsky (Bloomberg View) Dec 23, 2014
Russia has managed to prop up the ruble, but it's unclear how long they can keep effort going.
In Asia, 2014's Biggest Losers
William Pesek (Bloomberg View) Dec 23, 2014
As the tide rolls out at the end of the year, we can see which leaders, companies and corporate emperors have no clothes on.
Mexico's Corruption Eruption
Bloomberg View Dec 23, 2014
Mexico's failure to curb corruption jeopardizes its political stability and economic reforms.
The Productivity of Trust
Ricardo Hausmann (Project Syndicate) Dec 23, 2014
Governments and the private sector need each other, and they need to find better ways to collaborate. But the trust required for such collaboration cannot be established unless those who represent business interests shift their focus from profits to productivity.
The $4.3 Billion Shrug
Howard Davies (Project Syndicate) Dec 23, 2014
When the UK's Financial Conduct Authority fined six banks $4.3 billion for manipulating the foreign-exchange market, investors barely blinked and share prices hardly budged. Even such a large sum is small change when compared to the total fines and litigation costs incurred by the major banks over the last five years.
Radical Goals for Sustainable Development
Barbara Unmuessig (Project Syndicate) Dec 23, 2014
The UN's Sustainable Development Goals, to be established in 2015, will seek to protect ecosystems, conserve resources, and lift millions of people out of poverty. Unfortunately, the SDG negotiations reflect the relatively little that is currently possible in a multilateral framework.
Please Steal Our Fossil Fuels
Adair Turner (Project Syndicate) Dec 23, 2014
The main threat to a prosperous low-carbon future is the waste that low fossil-fuel prices encourage. If some extra-terrestrial thief stole two-thirds of the world’s oil, gas, and coal reserves, we could still enjoy the household appliances, information technology, heating, lighting, and mobility that define the modern world.
The Fed Sets Another Trap
Stephen S. Roach (Project Syndicate) Dec 23, 2014
The US Federal Reserve is headed down a familiar – and highly dangerous – path. Steeped in denial over its past mistakes, the Fed is pursuing the same incremental policy approach that helped set the stage for the financial crisis of 2008-2009.
The world economy in 2014
Andrew Walker (BBC) Dec 23, 2014
We have come through 2014 without a major disaster for the global economy. But it hasn't been a terribly good year.
And 2014's Worst Currency Was...Bitcoin
Mark Gilbert (Bloomberg View) Dec 23, 2014
It was a bad year for the Russian ruble and the Ukrainian hryvnia, but nothing short of catastrophic for the Bitcoin.
Negative Consequences of Falling Oil Prices for Sub-Saharan Africa
Amadou Sy (Brookings) Dec 23, 2014
Falling oil prices will take a dramatic toll on many countries in sub-Saharan Africa that are heavily dependent on oil exports.
Happy New Year? Global Growth Forecasts May Be Raised for Once
Simon Kennedy and Ye Xie (Bloomberg Businessweek) Dec 23, 2014
Here’s an early Christmas present for the economists of Wall Street.
Learning from disagreement: Evidence from forecasters
Philippe Andrade, Richard Crump, Stefano Eusepi and Emanuel Moench (VoxEU) Dec 23, 2014
Expectations are critical for macroeconomics and financial markets. But the expectation-formation process is not well understood. This column discusses some empirical characteristics of forecast disagreement from professional forecasters in the US, and discusses the ‘information frictions’ that underlie the heterogeneity of expectations.
Combatting Eurozone deflation: QE for the people
John Muellbauer (VoxEU) Dec 23, 2014
Eurozone deflation is likely to become reality when the annual inflation figure for 2014 is announced in January. This column argues that the ECB should develop a strategy that works in the Eurozone’s unique financial setting, instead of following the Fed’s lead. The author proposes that the ECB should pursue ‘quantitative easing for the people’, such as sending each adult citizen a €500 cheque.
China’s highly contagious deflation
George Magnus (FT) Dec 24, 2014
Monetary policy might not be enough and governments may be forced to step in.
Scrooges of the World, Begone!
Nicholas Kristof (NYT) Dec 24, 2014
Haiti might not seem like the obvious place for a celebration, but its slow successes in battling poverty actually offer inspiration.
Belarus’s Russian Problem
WSJ Dec 24, 2014
The Putin alternative to the European Union stumbles on the ruble.
Europe’s Make-or-Break Year
Joschka Fischer (Project Syndicate) Dec 24, 2014
It is no exaggeration to say that the EU is threatened, both internally and externally, by reactionary nationalism, which is why the next euro crisis will come in the form of a political crisis. So why are Europe's leaders clinging to policies that have made a bad situation worse?
Bank Resolution under T-LAC: The Aftermath
Charles A.E. Goodhart (VoxEU) Dec 24, 2014
The Financial Stability Board’s recent consultative document proposes dividing global systemically important banks into holding companies and operating subsidiaries so as to insulate the latter from a major loss. This column poses the question of what will happen after the holding company is liquidated or written down in order to recapitalise the operating subsidiary – a question as yet unanswered by the Financial Stability Board.
Commodity prices: Down in dollars, up in euros
Jeffrey Frankel (VoxEU) Dec 24, 2014
Commodity prices have been falling in the US. This column argues that monetary policy has played a determining role in the falling prices trend. Monetary tightening is highly anticipated in the US, which is likely to raise short-term interest rates. At the same time, the ECB and Bank of Japan have enhanced monetary stimulus through quantitative easing. As a result, the dollar has appreciated against the euro and the yen. In this way, commodities can be down in terms of dollars and up in terms of other currencies.
China Steps In as World's New Bank
William Pesek (Bloomberg View) Dec 25, 2014
Beijing's move to bail out Russia signals the death of the post-war Bretton Woods world -- and the beginning of the end for America's linchpin role in the global economy.
China’s Growth Secret
Zhang Jun (Project Syndicate) Dec 26, 2014
Many people are profoundly pessimistic about the Chinese economy's growth prospects, owing to the emergence of massive debt, overcapacity, and excessive investment. But China's flexible approach to institutional reform has imbued its economy with the capacity to overcome such challenges.
Financing Climate Safety
Jeffrey D. Sachs (Project Syndicate) Dec 26, 2014
When the global financial system works properly, savings are channeled into investments that raise living standards; when it malfunctions, savings finance real-estate bubbles and environmentally harmful projects, including those that worsen climate change. Next year will be a turning point in the effort to create a better system.
Europe’s Shadow Budget
Hans-Werner Sinn (Project Syndicate) Dec 26, 2014
The costs of the European Commission’s €315 billion investment plan for 2015-2017 will far outweigh the benefits. The plan amounts to a massive shadow budget that will ultimately help governments circumvent agreed debt limits.
The Big Economic Unknowns of 2015, From Unemployment to Oil
Justin Wolfers (NYT) Dec 27, 2014
No one can predict where the economy will land next year, but a handful of factors will help set its course.
A Trade Opportunity for Obama and the New Congress
Charles Boustany and Robert B. Zoellick (WSJ) Dec 28, 2014
The benefits from deals now in the works could mean an added $3,000 a year for the average U.S. family of four.
Emerging states must make their own mark
Alan Beattie (FT) Dec 28, 2014
A boom based on borrowing cheaply is easier than to take on vested interests.
Bluster that belies the cynic’s loneliness
Chrystia Freeland (FT) Dec 28, 2014
‘Capitalism for friends’ earns you fair-weather allies in Russia.
Malaria: Real and present danger
Michael Peel and Andrew Ward (FT) Dec 28, 2014
The disease kills 500,000 a year and a drug-resistant strain in Asia awakens fresh concern.
China’s empty promise
Teng Biao (WP) Dec 28, 2014
It follows party rule, not rule of law.
China Can Lead the Fight on Superbugs
Jim O'Neill (Bloomberg View) Dec 28, 2014
By 2050, more people could be dying because of antibiotic resistance than cancer.
The Year of Piketty
Clive Crook (Bloomberg View) Dec 28, 2014
Piketty's economics left a lot to be desired, but his timing was fantastic.
The agricultural roots of industrial development
Samuel Marden (VoxEU) Dec 28, 2014
It is often argued that for poor countries, increases in agricultural productivity result in higher non-agricultural output, but the theory is ambiguous and the empirical evidence is limited. This column presents evidence from a natural experiment provided by China’s early 1980s agricultural reforms. Higher agricultural output induced by the reforms led to quantitatively important growth in non-agricultural output. This growth appears to be primarily due to rural savings increasing the supply of capital to the non-agricultural sector.
Eurozone’s weakest link is the votersEurozone’s weakest link is the voters
Gideon Rachman (FT) Dec 29, 2014
The rise of anti-system parties threatens a currency that depends on consensus.
Forgive debt or earn its victims’ wrath
John Plender (FT) Dec 29, 2014
A moralistic perception of creditors as virtuous and debtors as sinners blocks a solution.
A kingdom fit for an oil price ordeal
Roula Khalaf (FT) Dec 29, 2014
Saudi Arabia has been showing that in hydrocarbons only the fittest keep market share.
ortfolio mix crucial to managing risk
Euan Munro (FT) Dec 29, 2014
True diversification is more than just holding a variety of assets.
The urban environment: Clean-up time
Christian Oliver (FT) Dec 29, 2014
Policy makers from around the world are flocking to study the ‘Copenhagen model’ of heating cities.
An Economic Boom Recedes, but South America Might Avert the Bust
William Neuman (NYT) Dec 29, 2014
Governments of Brazil, Peru and Venezuela are seen as less likely than before to load up on debt and ignore danger signs.
European Economic Errors for the U.S. to Avoid
Jesús Fernández-Villaverde and Lee E. Ohanian (WSJ) Dec 29, 2014
The story of the Continent’s moribund economy began long before the European Central Bank was founded.
This Era of Low-Cost Oil Is Different
Mohamed A. El-Erian (Bloomberg View) Dec 29, 2014
The world is experiencing much more than a temporary dip in oil prices.
How to Save Greece Now
Mark Gilbert (Bloomberg View) Dec 29, 2014
The EU needs to ease Greece's debt burden to prevent another existential crisis for the euro.
Say Goodbye to 'Made in China'
Adam Minter (Bloomberg View) Dec 29, 2014
What's a Chinese steel mill to do amid a slowing domestic economy? One popular option is to to bid China goodbye.
Five Reasons for Slow Growth
Michael Spence (Project Syndicate) Dec 29, 2014
Since the beginning of the financial crisis, growth projections by governments, central banks, and international financial institutions have been consistently overoptimistic. At least five factors need to be taken into account in forecasting growth and crafting effective economic-recovery efforts.
The Renewed Promise of Abenomics
Koichi Hamada (Project Syndicate) Dec 29, 2014
On December 14, Japan’s voters signaled their overwhelming approval of Prime Minister Shinzo Abe's macroeconomic policies. With its renewed electoral mandate, Abe’s government must deliver on its promises – and that means decisive and comprehensive implementation of growth-enhancing structural reforms.
Obama’s Passage to India
Martin Feldstein (Project Syndicate) Dec 29, 2014
What is likely to be on the US president's mind when he meets his Indian counterpart in January, and what does he think can be done to cement bilateral ties? Three issues stand out – beginning with trade, which is as important politically as it is economically.
The Year in Charts
Steven Rattner (NYT) Dec 30, 2014
How economics and politics unfolded in 2014, as told in 10 graphics.
2014: The year in numbers
FT Dec 30, 2014
From the drooping rouble to the shrinking telly, the year’s most compelling statistics.
Modi’s mission to rival China
James Crabtree (FT) Dec 30, 2014
PM’s goal to turn India into a global manufacturing hub will be difficult to achieve.
Bet on rising renminbi still a safe one
Henny Sender (FT) Dec 30, 2014
China is becoming less reliant on a cheap currency to support its growth.
A 2015 ‘Rebalancing’ Act for Investors
Burton G. Malkiel (WSJ) Dec 30, 2014
With stocks flying high, your portfolio may have become unbalanced, overexposed to equities.
Europe: A New Geopolitical Tax?
Erik Berglof (Globalist) Dec 30, 2014
How best to cope with an era of new divisions in Europe.
China Needs Its Lehman Moment
William Pesek (Bloomberg View) Dec 30, 2014
President Xi Jinping needs to allow significant defaults if China is to avoid a Japan-style lost decade.
Disaster and Development
Helen Clark (Project Syndicate) Dec 30, 2014
Since the beginning of the century, disasters like storms and earthquakes have killed more than a million people and caused nearly $2 trillion in economic damage. By investing in preparedness, as the Philippines has done, countries can build resilience and save lives.
Four More Years for Abe
Yuriko Koike (Project Syndicate) Dec 30, 2014
In the December snap election initiated by Japanese Prime Minister Shinzo Abe, the Liberal Democratic Party and its junior coalition partner, the Komeito Party, scored a landslide victory. Abe now has more political capital – and thus more freedom to maneuver – than perhaps any Japanese leader since the end of the Pacific War.
Helping the ECB Cross the Rubicon
Jean Pisani-Ferry (Project Syndicate) Dec 30, 2014
Eurozone monetary officials are expected to make history when they gather for the European Central Bank’s next policy-setting meeting on January 22. But Europe’s elected national leaders have a large role to play, and they must not eschew the duties.
Betting on Ukraine
Andrés Velasco (Project Syndicate) Dec 30, 2014
One might have expected the heroic commitment of Ukrainians to Europe’s democratic ideals to trigger a rush of Western support for the country as it simultaneously battles Russian aggression and economic collapse. But, so far, passivity and platitudes have prevailed.
Not So Splendid Isolation
Dominique Moisi (Project Syndicate) Dec 30, 2014
At the end of the nineteenth century, the British Empire pursued a policy of what it called “splendid isolation,” reflecting its leaders' determination to stand aloof from international engagements. Today, as recent events have shown, isolation is – more often than not – a mistake, an unenviable condition resulting from failed policies.
The Top Five Events of 2014
George Friedman (Stratfor) Dec 30, 2014
'Tis the season to make lists, and a list shall be made. We tend to see each year as extraordinary, and in some senses, each year is. But in a broader sense, 2014 was merely another year in a long chain of human triumph and misery. Wars have been waged, marvelous things have been invented, disease has broken out, and people have fallen in love. Nonetheless, lists are called for, and this is my list of the five most important events of 2014.
How Scary Can Greece Get?
Mark Gilbert (Bloomberg View) Dec 31, 2014
Ignore the scaremongering about the forthcoming Greek election. Follow the money instead.
Next Year's Ebola Crisis
Bloomberg View Dec 31, 2014
The story of how poorly the world responded to the Ebola outbreak of 2014 reveals how countries and the WHO need to change before the next outbreak.
Where Will All the Workers Go?
Nouriel Roubini (Project Syndicate) Dec 31, 2014
In the years ahead, technological improvements in robotics and automation will boost productivity and efficiency, implying significant economic gains for companies. Yet, unless the proper policies to nurture job growth are put in place, it remains uncertain whether demand for labor will continue to grow as technology marches forward.
J. Bradford DeLong (Project Syndicate) Dec 31, 2014
Policymakers have always had a model for escaping from the 2008 economic crisis. In the 1930s, US President Franklin D. Roosevelt responded to the Great Depression with a simple yet radical strategy: try everything that might boost demand, increase production, or reduce unemployment, and then scale up the things that work.
Why volatility signals stability, and vice versa.
Xi’s crackdown has hit obvious targets
Jerome Cohen (FT) Jan 1, 2015
For all China’s economic might, it is more tense than foreigners realise.
Will finance find its inner lion in 2015?
Jan 1, 2015
Tamed by central banks, markets have lost the ability to frighten.
Twin Peaks Planet
Paul Krugman (NYT) Jan 1, 2015
Our current global setup isn’t working for everyone. What consequences from that are ahead if we don’t do something about it?
American innovation is in trouble
Fareed Zakaria (WP) Jan 1, 2015
The United States isn’t laying the groundwork for the next technological revolution.
The Calm Before the Storm
Nassim Nicholas Taleb and Gregory F. Treverton (FA) Jan 1, 2015
The ‘Divergent’ World of 2015
Niall Ferguson (WSJ) Jan 2, 2015
Veronica Roth’s novel offers a useful way of viewing global politics and economics. Let’s hear it for Dauntless America.
Do Economic Sanctions Work?
Kenneth Rogoff (Project Syndicate) Jan 2, 2015
With Western economic sanctions against Russia, Iran, and Cuba in the news, it is a good time to take stock of the debate on just how well such measures work. The short answer is that economic sanctions usually have only modest effects, even if they can be an essential means of demonstrating moral resolve.
Stability and Prosperity in Monetary Union
Mario Draghi (Project Syndicate) Jan 2, 2015
There is a common misconception that the eurozone is a monetary union without a political union. In fact, monetary union is possible only because of the substantial integration already achieved among European Union countries – and sharing a single currency deepens that integration.
The Next Chinese Economy
Zhang Monan (Project Syndicate) Jan 2, 2015
China’s economy may be decelerating, but its prospects remain strong, with GDP possibly reaching $10 trillion in 2014. Once it weathers the current rebalancing, it could well be stronger than ever.
Education, and constitutional rights: An international comparative study
Sebastian Edwards, Alvaro F. Garcia Marin (VoxEU) Jan 2, 2015
Given the widely recognised importance of institutions to economic development, the question arises of how to promote development through institutional change. This column investigates how constitutional provision of the right to education affects educational attainment. Initial analysis indicates a negative correlation, but this relationship is not robust to controlling for legal origin. Factors such as judicial review likely affect implementation of constitutional provisions.
A Weary Greece Considers Its Options
NYT Jan 3, 2015
Voters, battered by misguided austerity policies, are looking beyond mainstream political parties.
Greece’s election: The euro’s next crisis
Economist Jan 3, 2015
Why an early election spells big dangers for Greece---and for the euro.
New evidence on the portfolio balance effect of QE
Michael A S Joyce, Zhuoshi Liu and Ian Tonks (VoxEU) Jan 3, 2015
Central banks in advanced economies implemented quantitative easing (QE) as a response to the Global Crisis. A key transmission mechanism of QE, emphasised by policymakers, has been the ‘portfolio balance’ channel. This column describes behaviour of insurance companies and pension funds using sectoral and micro-level data from the UK. The results show that investors shifted their portfolios away from government bonds towards corporate bonds. But portfolio rebalancing has been limited to corporate bonds and did not extend to equities.
US should enjoy sunshine while it lasts
Edward Luce (FT) Jan 4, 2015
In 2015 Europe will still be waiting for Godot while America copes with return to normality.
Time to put a proper price on carbon
Lawrence Summers (FT) Jan 4, 2015
The fall in oil prices and declines in other energy prices make the case for a tax overwhelming.
Extremists may be eurozone’s saviours
Wolfgang Munchau (FT) Jan 4, 2015
The probability of at least one political upset in 2015 is very high indeed.
A handy tool — but not the only one in the box
Martin Wolf (FT) Jan 4, 2015
Richard Koo’s ‘The Escape from Balance Sheet Recession and the QE Trap’ should be read.
Scrutiny of retail forex platforms needed
Jonathan Ford (FT) Jan 4, 2015
Bets sold as way to dodge investment doldrums and get rich quick.
Permanent capital: Perpetual cash machines
Henny Sender and Stephen Foley (FT) Jan 4, 2015
Private equity and hedge funds seek new holy grail: a never-ending supply of money to invest.
Capital flows, emerging markets and the global financial cycle
Erlend W Nier and Tahsin Saadi Sedik (VoxEU) Jan 4, 2015
Large and volatile capital flows into emerging economies since the Global Financial Crisis have re-invigorated efforts to unearth the determinants of these flows. This column investigates the interplay between global risk aversion (captured by the VIX) and countries’ characteristics. The authors also explore what policies countries should employ to protect themselves against the volatility of capital flows. The findings indicate that capital flows to emerging markets cannot be controlled without incurring substantial costs.
Jan 5, 2015
Japan’s Vote for Bold Reform
Shinzo Abe (Project Syndicate) Jan 5, 2015
After an overwhelming victory in a snap election, Japan's government has a mandate to launch what has become known as the “third arrow” of so-called Abenomics: structural reform. And the main task ahead – restoring Japan’s economy – is inseparable from safeguarding the country’s position as a global force for peace and prosperity.
Germany Does Care About a Greek Exit
Leonid Bershidsky (Bloomberg View) Jan 5, 2015
Allies of German Chancellor Angela Merkel have signaled it would be OK with Germany if Greece exited the euro. In reality, they will fight to the last to keep it in the eurozone.
Draghi Can't Bluff This Time
Mark Gilbert (Bloomberg View) Jan 5, 2015
Mario Draghi bluffed markets in July 2012 with his "whatever it takes" pledge. He can't pull that stunt a second time.
Keep Your Eye on Four Things This Week
Mohamed A. El-Erian (Bloomberg View) Jan 5, 2015
January indicators: oil prices, Greek elections, U.S. wage growth and the Fed's choice of words.
Multinational firms and transfer pricing: New evidence
Ronald B. Davies, Julien Martin, Mathieu Parenti and Farid Toubal (VoxEU) Jan 5, 2015
Allegations of tax-avoiding transfer pricing by multinational firms are common, but economic evidence is scarce. This column discusses detailed price data for intra-firm and arm’s length transactions that reveals tax-driven transfer pricing, and suggests that it may be reduced by focusing on a small number of large firms in a small number of tax havens.