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Tag Archives: Global Economics & Governance

The United States dominates global investment banking: does it matter for Europe?

Europe’s banks are in retreat from playing a global investment banking role, and this trend is likely to continue in the future. What will be the consequences and what should be the policy response? Highlights For the full references and the annex, please see the PDF version of this publication. In the aftermath of the global financial crisis, the market share of US investment banks is increasing, while that of their European counterparts is declining. We present evidence that US investment...

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China continues to focus on growth not reform

The central government will hold the National People’s Congress (NPC) meeting on March 5th. All the signs point to more monetary and fiscal stimulus, especially since the G20 gathering in Shanghai. The key is how to use the fiscal stimulus efficiently. Given the traumatic experience with the large fiscal stimulus in 2008-09, the NPC will need to be cautious about the announcement and the implementation of any stimulus. The key concern for those against additional stimulus in China is that it...

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The Sanders controversy

What’s at stake: A recent study claiming that Sanders policies would produce 5.3 percent growth a year over the next decade has been at the center of this week’s discussions in the blogosphere. Voodoo economics and arithmetic mistakes Ezra Klein writes that Bernie Sanders has been under assault from the technocratic wing of the Democratic Party. The charge? His campaign has circulated economic projections that show stunning — and rather implausible — benefits from Sanders’s agenda. JW Mason...

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The impotency of central banks

What’s at stake: The negative market reaction to the latest efforts to provide further monetary stimulus has generated an important discussion on whether central banks have lost credibility in their abilities to fight downside risks and shore up economies. From potency to impotency Leo Grohowski writes that central bank policies and the uncertainty around their effectiveness is the big macro concern right now. William Watts writes that with central banks continually undershooting inflation...

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Belarus: time to reform

Belarus must speed up its transition to a market economy, in order to return to growth and to avoid a new balance of payments crisis. But such reform will face economic, social and political challenges The unreformed economy, high growth and persistent disequilibria Belarus has kept a largely non-market economic system since the collapse of the Soviet Union in 1991 (see Dabrowski, 2016). However, despite the slow pace of market reforms, the Belarusian economy recorded impressive growth...

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China is running out of options as foreign reserves drop

The Chinese are watching a new storm unfold in their financial markets, only months after having been bombarded with news about China’s “historical victory” when the Renminbi was designated an official reserve currency under the IMF’s SDR regime in November. This op-ed post was originally published in the Financial Times’ Beyondbrics blog (paywall). Inclusion in the SDR has turned out to be a pyrrhic victory, as China’s capital outflows have only accelerated.  China lost as much as $108...

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Belarus at a crossroads

Despite the slow pace of market reforms, the Belarusian economy recorded quite impressive growth until recently. However the Belarus growth ‘miracle’ cannot be continued, and the reforms that are needed might be difficult to implement. The potential hardship facing Belarus could be at least partly cushioned by external assistance. Since the collapse of the Soviet Union in 1991, Belarus has maintained a largely non-market economic system. This did not prevent rapid growth of its economy over a...

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