Bank of Japan Rate Cut Leaves Markets Thinking of More
The Bank of Japan (BoJ) surprised markets overnight by announcing it would charge negative interest rates on a proportion of new excess reserves deposited by banks. The object is to reduce the...
View ArticleAre US Stocks Overvalued?
US stock prices rose for seven years in a row through late last year. During that time, the US economy repeatedly underperformed expectations. Popular indicators of stock valuation are above historical...
View ArticleThe Grexit that Could Actually Happen
For years the euro area has labored to successfully prevent a financial exit by Greece from the common currency, a fear commonly known as “Grexit.” Following the September 2015 elections, Greece now...
View ArticleA New Fiscal Policy for Europe
Heading into another discouraging year of weak growth and inflation and rising populism, the euro area needs a dramatic change of course—not only in its current policies but also in the rules holding...
View ArticlePIIE Chart: Average Life Expectancy in Post-Communist Countries—Progress...
A little more than 25 years after the fall of communism, post-communist states have achieved divergent results in their qualities of life. This chart, part of an upcoming study by Simeon Djankov and...
View ArticleEastern Europe: Freedoms under Pressure
Poland is the latest Eastern European country to veer away from the rule of law—and the core of Europe. The European Union has been too busy to take sufficient notice of the new Polish government’s...
View ArticleTapped Out: Azerbaijan Must Diversify Its Economy Away From Oil
Azerbaijan’s economy is reeling, after years of extraordinary growth fueled by oil revenues. The latest World Bank figures suggest the economy is going to contract in 2016, and the budget deficit may...
View ArticleThe SDR Goes the Way of the Renminbi
The International Monetary Fund’s decision to add the Chinese renminbi to the basket of currencies that compose the Special Drawing Right (SDR) at the end of November 2015 was no small choice. Set to...
View ArticleFor Europe, Financial Innovation Is a Better Bet than a Fiscal Transfer Union
The fire started in the basement, almost completely burning down the house. Fortunately, your neighbor was out of town. You had told him to replace his old furnace to save money, but he procrastinated....
View ArticlePIIE Chart: Infant Mortality Rate in Post-Communist Countries—Progress Varies...
A little more than 25 years after the fall of communism, post-communist states have achieved divergent results in their qualities of life. This chart, part of an upcoming study by Simeon Djankov and...
View ArticleDesigning Growth-Indexed Bonds When Interest Rates Are Low
Our recent Policy Brief [pdf] focuses on the benefits of growth-indexed bonds for a country’s solvency, by reporting the evolution of the debt-to-GDP ratio. In a world of perfect markets, only solvency...
View ArticleBail-in Securities and the Current Equity Market Turmoil
The current equity market slide is being led by European banks and stems in large part from market concerns over their newly issued bail-in securities. Bail-in securities begin life as a five-year bond...
View ArticleAn Important IMF Reform
The world became a bit safer last month—at least at one margin. The International Monetary Fund (IMF) adopted a lending reform with important implications for the future stability of the world economy....
View ArticleShould Brazil Dance to the Tune of a Fiscal Band?
Brazil’s government, much of which is already under investigation for widespread, endemic corruption, is trying to pull another fast one on its taxpayers and creditors. As talk of a need for fiscal...
View ArticleRussia’s Economy Slides into Long-Term Stagnation
Russia is entering a period of long-term stagnation with little relief in sight. A report by the Russian Ministry of Finance calculates that without structural reforms the economy will expand at a...
View ArticleIncreased Competitiveness in Eastern Europe
Falling oil and gas prices have wreaked havoc in currency and stock markets around the world. The declines are welcome news, however, for energy-dependent economies, particularly importers. Eastern...
View ArticleIn Defense of European Deposit Insurance
Last November, the European Commission published a proposal for a European Deposit Insurance Scheme (EDIS), which is currently being negotiated among EU member states. Yesterday, this elicited a...
View ArticleThe Odds Remain against a Brexit
The last-minute deal [pdf] between Prime Minister David Cameron of Britain and the leaders of the European Union on February 19 was aimed at persuading Cameron, his government, and the Conservative...
View ArticleFive Reasons to Fear a Brexit
The fight over a potential British exit from the European Union is gaining momentum and so are warnings against it from economists and business leaders about the potential damage to trade, confidence,...
View ArticleHow Much Global Fiscal Stimulus?
In the run-up to the G-20 deputies meeting in Shanghai this weekend, several calls have been made—including by the International Monetary Fund (IMF), the Organization for Economic Cooperation and...
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