Politics and Budgets

Politics and Budgets

  photo: GotCredit Every year, parliaments in democratic countries discuss budget proposals for the following year to set the course for economic policy going forward. But the reality is that politics and budgets are deeply interwoven. This was recognized by Joseph Schumpeter who noted “the spirit of a people, its cultural level, its social structure, the […]

H2-2017: Where to invest?

H2-2017: Where to invest?

Key takeaway – The investment environment remains challenging. In their portfolios, investors should: i) privilege a multi-year horizon; ii) focus on capital preservation by adopting a defensive risk profile; and iii) accept lower expected returns in exchange for lower volatility. Wealth preservation requires conservative investment strategies, with a greater exposure to alternatives. The recommended strategic […]

Does Brazil’s Sector Structure Explain Its Productivity Anemia?

Does Brazil’s Sector Structure Explain Its Productivity Anemia?

Brazil’s labor and total-factor productivity (TFP) have featured anemic increases in the last decades (Canuto, 2016). As we illustrate here, contrary to common view, sector structures of the Brazilian GDP and employment cannot be singled out as major determinants of productivity performance. Horizontal, cross-sector factors hampering productivity increases seem to carry more weight. Brazil’s productivity […]

Negative Rates – Part 2: A Policy Too Far?

Negative Rates – Part 2: A Policy Too Far?

Negative Reality Debt can only be reduced by strong growth, inflation, currency devaluation (where the borrowing is from foreigners) or default. All the strategies other than growth involve some level of transfer of value from savers either by reduction in the nominal value returned or decreased purchasing power. Growth and inflation are low. Devaluation is […]

We Need More Europe. Which Europe? Hints from Strategic Games

We Need More Europe. Which Europe? Hints from Strategic Games

One of the “consensus views” drawn from the hard lessons of the global crisis exploded in 2008 is that in Europe, and in the Monetary Union (EMU) in particular, the crisis was exacerbated and prolonged by some deficiencies in the original design of the EMU as a supranational institution with the overarching purpose of generating […]

The Trump White House Under Siege 

The Trump White House Under Siege 

photo: IoSonoUnaFotoCamera   Washington is planning to extend sanctions against Russia, once again. Meanwhile, the Trump administration is getting ready to cope with a special counsel’s investigation which seems to focus as much on Trump as Russia. Last Wednesday, Secretary of State Rex Tillerson warned that Congress should not pass any legislation that would undercut “constructive […]

A Pilot for the Governance of the Euro Is Required Immediately

A Pilot for the Governance of the Euro Is Required Immediately

  photo: Christine und Hagen Graf After the Brexit, European leaders are faced with the strict obligation to make Europe credible, particularly by consolidating the weak pillar of the Euro, namely, economic governance. This must henceforth be piloted by a Finance Minister. This step, which is necessary for the survival of the Euro, must be taken […]

Long-Term Finance and BNDES Tapering in Brazil

Long-Term Finance and BNDES Tapering in Brazil

  One major policy issue in Brazil is how to boost productivity, while following a path of fiscal consolidation that will take at least a decade to bring the public-debt-to-GDP ratio back to 2000 levels (Canuto, 2016a). The productivity-boosting agenda includes not only the implementation of a full range of structural reforms, but also recovering […]

Curious About Trump’s Tax Returns? Blockchain Might Provide the Answer

Curious About Trump’s Tax Returns? Blockchain Might Provide the Answer

Tired of hearing the latest uproar surrounding President Donald Trump’s tax returns? Every president since Jimmy Carter has provided this information, but Trump has consistently refused to do so since claiming he was waiting for the results of an IRS “audit.” Even as the mystery surrounding his financial dealings threatens his plans for tax reform […]