The Changing Fortunes of the Renminbi and the Dollar

The Changing Fortunes of the Renminbi and the Dollar

Photo Last fall the International Monetary Fund announced that China’s currency, the renminbi, would be included in the basket of currencies that determine the value of the IMF’s reserve asset, the Special Drawing Right (SDR). The IMF’s statement appeared to confirm the rise in the status of the currency that could at some point serve as an […]

The 2016 Globie: “Global Inequality”

The 2016 Globie: “Global Inequality”

photo: Source Each year I name a book as the “Globalization Book of the Year” (also known as the “Globie”). The selection is a recognition of its author’s contribution to our understanding of the causes and effects of globalization. There is no money attached to the prize—recognition is the sole reward. Recent winners can be […]

The Electoral Consequences of Globalization

The Electoral Consequences of Globalization

Photo Source  The reasons for the election of Donald Trump as President of the U.S. will be analyzed and argued about for many years to come. Undoubtedly there are U.S.-specific factors that are relevant, such as racial divisions in voting patterns. But the election took place after the British vote to withdraw from the European […]

The Retreat of Financial Globalization?

The Retreat of Financial Globalization?

Eight years after the global crisis of 2008-09, its reverberations are still being felt. These include a slowdown in world trade and a reassessment of the advantages of globalization. Several recent papers deal with a decline in international capital flows, and suggest some reasons for why this may be occurring. Matthieu Bussière and Julia Schmidt of the […]

Capital Flows and Financial Crises

Capital Flows and Financial Crises

photo: Nicolas Raymond The impact of capital flows on the incidence of financial crises has been recognized since the Asian crisis of 1997-98. Inflows before the crisis contributed to the expansion of domestic credit and asset booms, while the liabilities they created escalated in value once central banks abandoned their exchange rate pegs and their currencies […]

The Search for an Effective Macro Policy

The Search for an Effective Macro Policy

photo: Nicolas Raymond Economic growth in the advanced economies seems stalled. This summer the IMF projected increases in GDP in these economies of 1.8% for both 2016 and 2017. This included growth of 2.2% this year in the U.S. and 2.5% in 2017, 1.6% and 1.4% in the Eurozone in 2016 and 2017 respectively, and 0.3% […]

Capital Flows and Financial Activity in Commodity Exporters

Capital Flows and Financial Activity in Commodity Exporters

photo: Nic Taylor Emerging markets and developing economies have struggled in recent years to regain the growth rates of the last decade before the global financial crisis. The slowdown has been particularly evident in commodity-exporters that face declining prices. The World Bank’s most recent Global Economic Prospects, for example, projects growth for those countries of only 0.4% […]

The Impact of Financial Globalization on the Brexit Vote

The Impact of Financial Globalization on the Brexit Vote

photo: freestocks.org The reasons for the majority vote in favor of the United Kingdom leaving the European Union will be studied and analyzed for years to come. Globalization in the form of migration—or fear of migration—played a considerable role. Support for leaving the EU was also high in the British version of the “rust belt,” in this case […]

The Role of the U.S. In the Global Financial System

The Role of the U.S. In the Global Financial System

photo: ctj71081 The mandate of the Federal Reserve is clear: “…promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” How to achieve those goals, of course, has been the subject of great debate: should the central bank use interest rates or monetary aggregates? should it rely on rules or discretion? The ongoing controversy […]

The People’s Verdict on Globalization

The People’s Verdict on Globalization

photo: Nicolas Raymond The similarities in the electoral appeals of businessman Donald Trump and Senator Bernie Sanders have been widely noted (see, for example, here, here and here). Both men attract voters who feel trapped in their economic status, unable to make progress either for themselves or their children. Moreover, both men have assigned the blame for the loss of […]

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