Argentina, Turkey and the May Storm in Emerging Markets
Argentina and Turkey combine balance-of-payments fragility and exposure to dollar appreciation
Shrinking the Fed’s large balance sheet
Shrinking the Fed's large balance sheet THU, MAY 17, 2018 - 5:50 AM OTAVIANO CANUTO Washington AT its meeting in March 2018 the US Federal Reserve raised the target range…
Climbing a tall knowledge ladder
08 May 2018 - Otaviano Canuto The April issue of the IMF’s “World Economic Outlook (WEO)” included a chapter on how globalization has helped knowledge from technology leaders spread…
Can Services Replace Manufacturing as an Engine for Development?
19 April 2018 - Otaviano Canuto Manufacturing expansion has been a vehicle for job creation, productivity increases, and growth in non-advanced economies since the second half of the last…
The Double Side of the Fed’s Balance Sheet Unwinding
One needs to go beyond monetary policy dynamics to gauge the ultimate impact of the Fed’s balance sheet tapering. After all, it will all depend on what non-banking sectors want to do with “normalized” monetary conditions.
Overlapping Globalizations
Current technological developments in manufacturing are likely to lead to a partial reversal of the wave of fragmentation and global value chains that was at the core of the rise of North-South trade from 1990 onward. At the same time, China – the main hub of the global-growth-cum-structural-change of that period – may attempt to extend the previous wave through its One Belt, One Road initiative.
The Metamorphosis of Financial Globalisation
After a strong rising tide starting in the 1990s, financial globalisation seems to have reached a plateau since the global financial crisis. However, that apparent stability has taken place along a deep reshaping of cross-border financial flows, featuring de-banking and an increasing weight of non-banking financial cross-border transactions. Sources of potential instability and long-term funding challenges have morphed accordingly
Matchmaking Finance and Infrastructure
15 July 2017 - Otaviano Canuto, Aleksandra Liaplina The world economy – and emerging market and developing economies in particular – display a gap between their infrastructure needs and the…
Bloated Central Bank Balance Sheets
Central banks of large advanced and many emerging market economies have recently gone through a period of extraordinary expansion of their balance sheets and are all now possibly facing a transition to less abnormal times.
The Mist of Central Bank Balance Sheets
The Mist of Central Bank Balance Sheets Otaviano Canuto | Mon, 24 April 2017 This podcast is performed by Mr. Otaviano Canuto. Central banks of large advanced and many…
Mr. Trump: Can You Deliver it?
Financial markets seem to believe that president-elect Trump can deliver higher growth and inflation, as manifested in the rotation from bonds to equities. At the same time, the shock waves already felt by assets abroad may be a harbinger of the bumpy and treacherous journey ahead.
The Global Economy Remains Unbalanced
Global imbalances have not gone away as an issue, as they reveal that the global economic recovery may have been sub-par because of asymmetric excess surpluses in some countries and output below potential in many others. The end of the “era of global imbalances” may have been called too early. Lord Keynes’ argument about the asymmetry of adjustments between deficit and surplus economies remains stronger than ever.
What Happened to World Trade?
Capital Finance International, spring 2016 World trade suffered another disappointing year in 2015, experiencing a contraction in merchandise trade volumes during the first half and only a low recovery…
Macroeconomics and Stagnation – Keynesian-Schumpeterian Wars
Policy makers in the advanced economies at the core of the global financial crisis can make the claim that they prevented a new “Great Depression”. However, recovery since the outbreak of the crisis more than five years ago has been sluggish and feeble. Since these macroeconomic outcomes have to some extent been shaped by policy mixes adopted in those economies in response to the crisis, the appropriateness of those policy choices is a question worth revisiting. This is particularly the case as one considers the hypothesis that a long-run trend toward stagnation may have already been at play during the pre-crisis period, even if temporarily countervailed by pervasive asset price booms.