Many people, including economists, wonder why a scheduled 3% fare increase on the Santiago metro triggered mass protests that paralyzed the entire country. In fact, the popular response should come as no surprise, and understanding it is crucial to devising better policy solutions.
Now that the old rules governing macroeconomic cycles no longer seem to apply, it remains to be seen what might cause the next recession in the United States. But if recent history is our guide, the biggest threat stems not from the US Federal Reserve or any one sector of the economy, but rather from the White House.
China said the small number of issues standing in the way of the Regional Comprehensive Economic Partnership (RCEP) could be resolved by the end of the year, adding member states were also ready to work with India to address outstanding issues. Fifteen nations from the Asia-Pacific region – the 10 ASEAN nations plus Japan, China, South Korea, Australia and New Zealand – agreed on the outline of the trade pact earlier this week.
As liberal elites both East and West commemorate the peaceful end of the Cold War and celebrate the successes of the last three decades, it is important to recognize how painful the post-communist transition was – and, for many, continues to be. That is why nostalgia for the economic security and social stability of the authoritarian past is growing.
The real problem with the phase one accord announced on October 11 is the basic structure of the deal into which it presumably fits. From trade to currency, the approach is the same – prescribing bilateral remedies for multilateral problems.
The ease of doing business indicator, known as EDB, is a system that ranks the regulatory environment in countries around the world. New research looks at how the World Bank’s ease of doing business index has amassed considerable influence over business regulations worldwide. The financial institution has succeeded in doing so even though it doesn’t have an explicit mandate over regulatory policy.
E-bills, e-signature, the electronic transfer of funds – advancements in technology are bringing about remarkable changes in the business landscape, domestically and internationally. All this change is facilitating the faster movement of goods across borders and forcing governments to keep pace. Negotiations for regional trade agreements have proved an important forum for government consultation about technology.
Humanity would have suffered had Facebook been allowed to use Libra to privatise the international payments system. But the authorities that are now strangling Libra should look to the future and do with it something innovative, useful, and visionary: hand Libra, or its core concept, over to the International Monetary Fund so that it can be used to reduce global trade imbalances and rebalance financial flows. Indeed, a Libra-like cryptocurrency could help the IMF fulfill its original purpose.
The Federal Reserve’s old moniker of “lender of last resort” is no longer relevant. Its policy of holding its federal funds rate above levels seen anywhere else in the developed world and borrowing near these rates has made it the “borrower of first resort.” This is problematic.
