In the coming months, President Donald Trump could withdraw the United States from the International Monetary Fund and the World Bank or slash their funding. But such a move would disproportionately hurt the US itself, undermining its ability to shape the rules of the global financial system and pursue its strategic interests. Read More Here
Any de-dollarization process must account for the fact that countries and business actors will still issue debt securities, bonds, and other instruments in dollar form to meet their capital needs, both regular and emergency, owing to the volume and liquidity provided by the “flexible capital account” standard of the United States. Read More Here
In 2022, a confluence of shocks reduced economic growth and simultaneously boosted inflation, causing investors to flee to dollar-denominated assets. Now, as fears about inflation and monetary policy begin to abate, the dollar should start to depreciate, adding a bright spot to the global growth outlook. Read More Here
Prices of non-fungible tokens remain high for now and may continue to increase for some time, but a crash will come. With central banks set to tighten monetary policy in an effort to rein in inflation, new and untested asset classes are likely to be punished harder than more reliable ones. Read More Here
US President Richard Nixon’s 1971 decision to end the US dollar’s convertibility into gold had such far-reaching consequences that it took policymakers decades to learn to manage the new system. Now, digital technologies are driving a new monetary revolution that could end the greenback’s global primacy altogether. Read More Here
To consolidate its post-pandemic growth momentum in 2021, China should not be in a rush to exit from expansionary fiscal and monetary policy. The government may have to issue more bonds than planned, and the People’s Bank of China may need to implement quantitative easing to facilitate this. Read Here | Project Syndicate
Beyond the US, the fragility of growth in debt-ridden China and some other emerging markets remains a concern, as do economic, policy, financial and political risks in Europe. Worse, across the advanced economies, the policy toolbox for responding to a crisis remains limited. The monetary and fiscal interventions and private-sector backstops used after the 2008 […]
China‘s reform-minded leaders are more willing than ever to raise the pain threshold for the economy to push through long-term reforms, despite a protracted slowdown that has sparked calls for looser monetary policy. Read Here – Reuters
Two fundamental beliefs have driven economic policy around the world in recent years. The first is that the world suffers from a shortage of aggregate demand relative to supply; the second is that monetary and fiscal stimulus will close the gap. Is it possible that the diagnosis is right, but that the remedy is wrong? […]
China said it will seek a higher “quality and efficiency” of growth next year, signaling new leaders may accept a reduced pace of expansion in exchange for a more sustainable model. There was no mention of seeking “relatively fast” growth, a policy in place since 2006, in a report yesterday by the state-run Xinhua News […]
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