What do you see in this figure from a recent New York Fed study? Technically, it shows that the Fed’s balance sheet is expected to shrink and return to the path it would have been on had there been no large scale asset purchases (LSAPs) over the past five years. This projection is a reflection of … Read more
The curse of riches or resource curse has been a staple of development economics for decades. The curse refers to the striking fact that many resource rich states, such as Nigeria and Congo, are conflict-ridden basket cases while some of the world’s best performing economies are islands or city-states, such as Japan, Taiwan, and Hong … Read more
French energy company Total said it was sinking $16 billion into oil projects off the coast of Angola. The French major is following the bread crumbs offshore Angola and now the country aims to re-establish itself as a major oil player by courting investors to onshore fields. Total said it made a final investment decision … Read more
Germany appears to have capitulated. The Bundesbank has dropped its opposition to extraordinary measures, like ending the sterilization of the SMP bond purchases, and has even dropped its visceral opposition to QE, if it can be structured properly to keep within the ECB’s mandate. As Jurgen Stark’s recent op-ed piece in the Financial Times makes clear, this … Read more
Chinese debt concerns are complicated by two structural issues – the rise in borrowing by local governments and the increase in the role of the shadow banking system. Both sectors are testament to Chinese entrepreneurial spirit, but also point to deep problems in China’s financial system. Local But National… Outside of security matters or foreign … Read more
Retail sales increased sharply in March, rising 1.1%, the best monthly gain in well over a year. The news brings another clue for thinking that the recent economic slowdown was a temporary affair related to the weather. Indeed, today’s report also revived the year-over-year trend in retail spending. For the moment, March is shaping up as … Read more
Inequality, which has drawn a great deal of comment and analysis following the publication of Thomas Piketty’s Capital in the Twenty-First Century, has sometimes been seen as a byproduct of increased international trade. But now other international economic linkages are being investigated. The International Monetary Fund’s Managing Director, Christine Lagarde, has acknowledged the need to take distributional consequences into … Read more
Being British means we are easily embarrassed even by modest success. The default position, when it comes to the economy, is to grumble. There is usually plenty to grumble about even in the good times, so that keeps us happy. So how should we respond to the fact that the International Monetary Fund now predicts … Read more
Last month residents of Crimea voted to secede from Ukraine and join the Russian Federation. Although many in the West have questioned the freedom and fairness of the referendum, which was held in the intimidating presence of Russian troops, no one doubts that many Crimean residents did have a true preference for the Russian option. … Read more
The International Monetary Fund said global crude oil prices have been relatively lower because of the growth in oil supply from North America. With U.S. oil production on pace to eclipse 9 million barrels per day near term, the trend should continue through next year. Nearly all of the growth in global oil production is … Read more