An Important Step for China and the World

On 30 November the Board of the IMF decided to include the Chinese RMB in the Special Drawing Rights (SDR) basket from 1 October 2016. SDR is the unit used in transactions between IMF member states and the Fund. RMB will thus become the fifth currency in this basket of global reserve currencies, joining the […]

Is the Minimum Wage an Effective Way to Reduce Poverty or Inequality?

There is a growing interest in increasing the federal minimum wage in the U.S. and minimum wages at the state and city level (News and Observer). President Obama has already decreed a higher minimum for workers on Federal contracts, and he has proposed raising the Federal minimum from $7.25 to $10.10. Interest in the minimum […]

Consequences of the World Oil Glut

Forecasting crude oil prices has been difficult. Forecast errors have been large, especially for the end of 2014, when typical forecasts were more than $40 per barrel too high. A panel of Wall Street Journal analysts forecast $94.65 per barrel, but the actual price was $53.27 per barrel. Forecasts implicit in oil futures contracts exhibited […]

Why is Corruption More Prominent in Some Countries Than Others?

Corruption is widely acknowledged to be a serious problem in many countries. Ukraine has experienced a series of corrupt governments, and revulsion against widespread corruption is one factor that brought about the ouster of the Yanukovych administration last February (Poroshenko). Chinese officials have recently acknowledged corruption to be a serious problem.  Extreme levels of corruption […]

Do Free Trade Agreements with the EU Promise Higher Incomes for the Eastern Partnership Countries?

A year ago ( we analysed the real convergence during last two decades in both the 13 member states that joined the EU on or after 2004 and the EU Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). The new EU members that were relatively poor a generation ago showed more significant improvement […]

Is Postponing the EU Trade Agreement Harmful to Ukraine?

The Parliament of Ukraine and the European Parliament are both expected to ratify the EU-Ukraine association agreement in a simultaneous session today. However, last week it was announced that the entry into force of the deep and comprehensive free trade area (DCFTA) between the EU and Ukraine, initially planned for November of this year, will […]

Skill Mismatches in the U.S. Labor Market

The slow recovery in the United States from the Great Recession has been characterized by an unusually high unemployment rate. Observers have disagreed about the relative importance of skill mismatch and insufficient aggregate demand as causes of high unemployment. The two explanations are not mutually exclusive, but Paul Krugman (2014) has taken a strong position […]

Does the West Have Economic Levers to Influence Russian Foreign Policy?

The financial markets have reacted frantically to Russia’s invasion of Crimea – the rouble has weakened despite the Central Bank of Russia intervening massively to prop it up, share prices on the Moscow stock exchange have collapsed and there are reports of significant capital flight from Russia. The West has decided on a travel ban […]