The action of central banks has been more reactive than proactive, more reflex than cause, and in their absence, macroeconomic performance would have been even more mediocre than it has been. There is a mismatch between the trend of increasing stocks of financial wealth, occasionally cut by shocks and crises, and the creation and incorporation of new assets accompanying economic expansion. COVID-19 is helping reinforce such trends.
U.S. stock and corporate bond markets performed extraordinarily well from the March financial shock caused by covid-19 to the end of last month. Then, three consecutive weeks of decline in the three major stock market indexes have been followed this week by a global slump attributed to fears of new lockdowns. A period of disconnect of financial markets with the underlying real economy has culminated in a revelation of the former’s high dependency to Federal Reserve policies.
A podcast on the coronavirus crisis and other challenges faced by the US and the world economy CHALLENGING OPINIONS >> the podcast where ideas are tested
Both US President Donald Trump and Brazil's leader Jair Bolsonaro face fierce criticism for their response to the coronavirus outbreak. As other nations accepted the advice of experts and went into lockdown to try to stop the spread, Brazil and the United States were almost carrying on as normal. In the UK, Prime Minister Boris Johnson may not have denied the seriousness of COVID-19, but his initial approach of taking it on the chin was a risky one. Could their inaction have cost lives? Guests: James Wallner Senior Fellow at the R Street Institute Otaviano Canuto Former Vice President of the World Bank Dr Bharat Pankhania Senior Clinical Lecturer at the University of Exeter Medical School
Great Decisions examines the Western Hemisphere's migration crisis and the fractured societies at the heart of it: Guatemala, Honduras, and El Salvador. ------------------------------- The Foreign Policy Association produced a series of documentaries called Great Decisions 2020 to be broadcast on TV by the PBS (Public Broadcasting System) and followed by community group discussions all over the US. The pandemic has been forcing the cancellation of huge numbers of Great Decisions groups all over the country, so they decided to go ahead and put all of this season’s episodes on YouTube for free. Here’s the episode about U.S. Relations with the Northern Triangle where I was asked to issue my opinion about challenges and opportunities created by agriculture modernization in the region.
Until recently, China had little interest in Latin America. Now, its investment is transforming the region. Great Decisions investigates this new alignment and the prospect of direct competition with the United States. ----------------- The Foreign Policy Association produced a series of documentaries called Great Decisions 2020 to be broadcast on TV by PBS (Public Broadcasting System) and followed by community group discussions all over the US. I participated in 2 episodes. The pandemic has been forcing the cancellation of huge numbers of Great Decisions groups all over the country, so they decided to go ahead and put all of this season’s episodes on YouTube for free. Here’s the China/Latin America episode
CGTN spoke with Otaviano Canuto, a senior fellow at the Policy Center for the New South, about the current and future impact of the China-U.S. trade war on Latin America and Europe.
Will the economy fail to perform in 2020 or is a recession at hand? Otaviano Canuto, Senior Fellow at the Policy Center for the New South and Nonresident Senior Fellow at The Brookings Institution, joins me once again to discuss the last quarter of 2019 and speaks about the chances for a recession in 2020. Additionally, he talks about corporate debt and the outlook for the housing market in 2020. Wages and employment will likely feel and impact in 2020. Join me for the complete interview with Otaviano Canuto right here on The Leader Campus Voices.
The hike in tariffs imposed by the United States against its major trading partners since early 2018 has been unprecedented in recent history. President Trump alluded to, among others, the goal of revitalizing jobs in the country's manufacturing industry by protecting it from unfair trade practices of other countries, particularly China. However, according to a study by two Federal Reserve Bank staff - Aaron Flaaen and Justin Pierce - released last December 23, the effect so far has been just the opposite, i.e. a reduction in U.S. manufacturing employment!
In our view, while clarification and formalization of measures do not come, I have to agree with a former colleague on the IMF Executive Board of Directors, the Argentine Hector Torres, who in a comment Monday on LinkedIn noted: “President Trump believes that governments of Brazil and Argentina are manufacturing currency devaluations to damage US farmers… and respond by raising tariffs on imports of steel and aluminum… the premise is wrong and the reaction folly! ”. Not without first contributing to the uncertainty that, as we have observed, has already negatively impacted the global economy.
Over the past two years, with the US-initiated war, investors from Taiwan, Japan and the US have already accelerated the transfer of assembly lines and supply contracts in their ITC value chains from China to Vietnam, Thailand, Indonesia and, to a lesser extent, Mexico. On the other hand, the leap to the top of the technology ladder is what seems to be required long before the expected time…
This week's Voices interview (10/29/2019) is with Otaviano Canuto, of the Brookings Institute and the Policy Center for the New South - formally of the World Bank, as we visit him once again to discuss the economy. He speaks about the U.S. economy slow down and about the world economy, which could struggle after the Brexit event. Listen to his insight on this week's Leader Campus Voices.
Even from the standpoint of those Latin American economies accruing short-term gains from the trade war between U.S. and China, the negatives will likely outweigh the positives
Since the Fed’s July meeting, when the Fed Funds Rate had a 0.25% cut, fears about the impact of the US-China trade war on the global economy have escalated. The US yield curve inversion received much attention as a harbinger of a slowdown in the global and US economic outlooks. We approach here whether lights on next monetary policy events can be obtained from reading the minutes of the Fed’s meeting – and of the July meeting of the ECB governing council – released this week.
Since the Fed’s July meeting, when the Fed Funds Rate had a 0.25% cut, fears about the impact of the US-China trade war on the global economy have escalated. The US yield curve inversion received much attention as a harbinger of a slowdown in the global and US economic outlooks. We approach here whether lights on next monetary policy events can be obtained from reading the minutes of the Fed’s meeting – and of the July meeting of the ECB governing council – released this week.