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Tag Archives: Global Economics & Governance

Will China fall into the middle/high income trap?

The middle to high-income trap in East Asia and its China dilemma. This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a new newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox! The middle-income trap describes a situation in which a country, having attained a certain income level, gets stuck there (due to given advantages). The high-income trap is of a similar...

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How is the G20 tackling debt problems of the poorest countries?

The G20 Debt Service Standstill Initiative, although a partial success, has been dogged by competing interests and lack of coordination. A further push is needed to solve the coordination problem. In April 2020, the G20, at the urging of the International Monetary Fund and the World Bank, launched the Debt Service Standstill Initiative (DSSI) to mitigate the negative financial impact of COVID-19 in the world’s poorest countries at a time when the pandemic’s medical and economic consequences...

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Central banking’s brave new world

Ever since the 2008 financial crisis, central bankers have been busy developing new policy instruments to fight fires and ward off emerging threats. Nonetheless, many secretly dreamed of returning to the good old days of cautious conservatism (with financial stability taken seriously). By: Jean Pisani-Ferry Date: February 24, 2021 Topic: Global Economics & Governance This opinion piece was originally published in Project Syndicate. Twenty years ago, central bankers were...

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China’s state-owned enterprises and competitive neutrality

The concept of competitive neutrality can be used to assess how far a market is from being a competitive environment. In China, competitive neutrality is lacking, with state-owned firms favoured in most sectors, even over Chinese private firms. As China’s economic weight continues to grow, so does the global impact of its companies. Chinese state-owned enterprises (SOEs) produce a large share of Chinese goods and services. Given their importance both in China and increasingly globally, it...

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Will COVID accelerate productivity growth?

The COVID-19 pandemic has prompted an increasing number of rich-country firms to reduce their reliance on global supply chains and invest more in robots at home. But it is probably too soon to tell whether this switch will increase productivity growth in advanced economies. By: Dalia Marin Date: February 10, 2021 Topic: European Macroeconomics & Governance Since the mid-2000s, productivity growth in advanced economies has been anaemic. Average annual productivity growth in...

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Is a dollar crash coming?

Even if a sovereign debt crisis is avoided, the public debt burden will negatively impact growth. The dominant role of the U.S. dollar can be traced back to the end of World War II or even earlier to the interwar period when it gradually dethroned the British pound. Since the collapse of the Bretton Woods system in 1971 (in fact, this was a crisis of the U.S. currency), there has been continuous speculation about the imminent fall of the dollar in its global role. However, this has not...

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China and the WTO: Why Multilateralism Still Matters

An examination of China’s participation in the World Trade Organization, the conflicts it has caused, and how WTO reforms could ease them. China’s accession to the World Trade Organization (WTO) in 2001 was rightly hailed as a huge step forward in international cooperation. However, China’s participation in the WTO has been anything but smooth, with China alienating some of its trading partners, particularly the United States. The mismatch between the WTO framework and China’s economic...

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A rushed deal or a rush to judgement?

The Comprehensive Agreement on Investment (CAI) is supposed to improve market access for European companies operating in China and to ensure a level playing field, as well as reciprocity. Does it fulfil such expectations? On 30 November 2020 after over 7 years of talks, the European Union and China concluded negotiations for a Comprehensive Agreement on Investment (CAI for short). The agreement is intended to increase investment between the EU and China by establishing a legal framework and...

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A Global Pandemic Alarm Bell

The appearance of new strains of the coronavirus in the United Kingdom, South Africa, and Brazil has given the world no choice but to design and implement a comprehensive global strategy. So, what's stopping that from happening? By: Jean Pisani-Ferry Date: January 26, 2021 Topic: Global Economics & Governance Seen from Europe, Asia, or even North America, Manaus, the capital of the Brazilian state of Amazonas, is as remote as can be. Yet the 501.Y.V3 variant of the...

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Economic Crisis in the Middle East and North Africa

In the 2010s, the economic outlook of the countries in the Middle East and North Africa region deteriorated, with numerous long-term socio-economic and institutional challenges still unresolved. COVID-19 has compounded the problems. As the region's largest external trading partner, the European Union should do more to support economic and political transformation. The authors thank Maria Demertzis and Nicolas Véron for their comments. In the 2010s, the economic situation in the Middle East...

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