Urbanization Cannot Explain China’s Imbalanced Growth Model

In the latest example of what we have dubbed “the most over-hyped theme in emerging markets,” the Carnegie Endowment’s Yukon Huang defends China’s imbalanced growth model as a natural consequence of rapid urbanization in an FT Alphavile guest post. He writes, “urbanization largely explains both the decline in labor’s share of income and the increase […]

Czech Floods: Little Effect on GDP

The recent floods that swept the Czech Republic exerted a heavy toll on property and infrastructure, shutting the Prague Metro, regional roads, train service, and shipping routes along the Elbe River. The floods also exacerbated concerns over the recovery prospects of the Czech economy, which is experiencing its second recession in four years. The flood […]

A program of “rigor without austerity” for the Italian government

Enrico Letta has recently presented to Parliament the “grand coalition” government he chairs. In his parliamentary speeches, Letta has clearly indicated that he intends to pursue a growth strategy based on tax cuts (or cancelled/postponed tax rises), without this implying new debt or breaking European agreements. At the same time, he did not indicate too […]

What to Watch in 2013: Eastern Europe/CIS edition

The following inexhaustive list is a companion to last week’s post on things to watch in MENA and our recently published outlooks. In general our regional outlook, like our global one, has become brighter on the margins but emphasizes the divergence in growth across the region and across emerging and frontier markets. We’ll be treating […]

September Will Be a Doozy Again This Year

Before you take off for your August holiday, you should probably be aware of what you’ll be coming back to in the eurozone (EZ) in September (warning: the following may make you decide not to come back). For the second September in a row, developments in the EZ have the potential to be highly dramatic, […]

ECB Will Build a Bridge…But to Where?

All eyes are on the ECB governing council meeting on August 2nd to see exactly what Mario Draghi meant last week when he pledged that the ECB would preserve the euro. The way the markets have rallied off the back of this statement, it seems that investors think that the ECB is poised to intervene […]

A Spanish Bailout? Don’t Hold Your Breath

From the guardian: It is a rule of thumb among eurozone crisis observers that the more something is denied by officials, the more likely it is to happen. With Spain’s borrowing costs at euro-area record highs, its officials insist it will not need a full bailout programme. To most of us, however, it seems no longer […]

Japan: Inflation Expectations and Real Interest Rates

There is evidence that inflation expectations are firmly moving into positive territory after languishing below zero following the onset of the global financial crisis. The 7y breakeven has stabilized at around 0.53% over the past couple of weeks, after averaging -1.1% from December 2008 to December 2011. This jump has helped move the 7y real […]

Canada: Of Resource Investment and ‘Net Benefit’s

Two important pieces of news for the Canadian resource sector were announced today, both reference in some way the “net benefit” clause for investment in Canada, one at a national level (Nexen-CNOOC), the other at a provincial (National Gateway pipeline review), both important to Canadian and global resource supply chains. First, the proposed takeover of Nexen […]

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