Economics

Modern Monetary Theory – A Critique

April 16, 2019 | Warren Coats - Monetary Policy Expert, Advisor for Central Banks
So called Modern Monetary Theory (MMT) has become popular with Green New Dealers because it claims to remove or at least loosen traditional constraints on government spending.

Global economy at a delicate moment, says the IMF

April 12, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
Next week, the 2019 Spring Meeting of the International Monetary Fund (IMF) and the World Bank will take place in Washington, in this 75th year since the birth of the two institutions. Christine Lagarde, the IMF's managing director, speaking on Tuesday at the US Chamber of Commerce, offered an appetizer about the macroeconomic projections to be released.

New Challenges Faced by the Bretton Woods Institutions

April 5, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
In their 75 years of existence, the twin institutions born at the Bretton Woods Conference have undergone adaptation and transformation in response to the evolution of the world economy and the challenges it has posed to them.

How Chinese Investment in Latin America Is Changing

March 15, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
China's push for Latin American consumers reflects changes back home.

China’s Growth Rebalance With Downslide

March 4, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
China’s economic growth has been in a downslide trend since 2011, while its economic structure has gradually rebalanced toward lower dependence on investments and current-account surpluses. Steadiness in that trajectory has been accompanied by rising levels of domestic private debt, as well as slow progress in rebalancing private and public sector roles. As the ongoing trade war with the US continues to unfold, it remains unclear at which growth pace China’s rebalancing will tend to settle.

Why Brazil Must Build a (Fiscal) Wall

January 31, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
Without reforms, financial markets’ optimism may crumble – and bring the house down.

World Bank: A Hummingbird on the Firing Line

January 14, 2019 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
Attempts to submit the World Bank to bilateral agendas or extreme views can only harm and paralyze the hummingbird

It’s evolution, baby – how institutions can improve without critical junctures

December 3, 2018 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
Daron Acemoglu and James Robinson caught policymaker’s attention to the critical role of institutions for development. Their work gives too much emphasis to the prospects of revolution, however. A reading of the World Bank’s World Development Report of 2017 points to directions that all actors involved in the process, whether domestic or international, elite or non-elite, can take to improve societies.

Benefits and costs of Islamic finance

November 14, 2018 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
Islamic finance is a way of doing finance while respecting Islamic ban on interest-based transactions and ensuring risk sharing between parties in all operations.

Threat of ‘currency bullying’

November 9, 2018 | Otaviano Canuto - Principal, Center for Macroeconomics and Development
On 24 July the International Monetary Fund released its 2018 External Sector Report, its latest assessment of the current account balances of the world’s 30 largest economies. There was no major change relative to previous years, and the configuration of global surpluses and deficits that has prevailed since 2013 endures. However, there are reasons to expect more abrupt alterations ahead, particularly in the light of US fiscal easing at a time of high employment in the country. In the context of US-led trade wars, as well as recent bouts of Chinese exchange rate depreciation, it is possible that currencies will be subjected to their own war or ‘currency bullying’.