Current Account Deficits and Safe Assets

Current Account Deficits and Safe Assets

The International Monetary Fund has issued its External Sector Report for 2017, and among its key findings: “Global current account imbalances were broadly unchanged in 2016…” The U,S. continues to record the largest deficit, $451.7 billion, which is equal in value to 2.4% of U.S. GDP. The continuing deficits contribute to the increase in the […]

The IMF’s Flexible Credit Line

The IMF’s Flexible Credit Line

The policy conditions attached to the disbursement of an IMF loan have long been the subject of controversy. In the wake of the global financial crisis, the IMF introduced a new lending program—the Flexible Credit Line—that allowed its members to apply for a loan before a crisis took place. If approved, the member can elect […]

Capital Flows and Domestic Responses

Capital Flows and Domestic Responses

photo: Tax Credits The international impact of financial shocks became apparent during the global financial crisis. But how do financial flows affect economic conditions during non-crisis times? And are there ways to shelter the domestic economy from these flows? Some new evidence from the IMF seeks to answer these questions. IMF economists Bertrand Gruss, Malhar Nabar […]

Crises and Coordination

Crises and Coordination

photo: Neil Cummings Policy coordination often receives the same type of response as St. Augustine gave chastity: “Lord, grant me chastity and continence, but not yet.” A new volume from the IMF, edited by Atish R. Ghosh and Mahvash S. Qureshi, includes the papers from a 2015 symposium devoted to this subject. Policymakers in an open economy who […]

The Emerging Market Economies and the Appreciating Dollar

The Emerging Market Economies and the Appreciating Dollar

photo: Chris Palmer U.S. policymakers are changing gears. First, the Federal Reserve has signaled its intent to raise its policy rate several times this year. Second, some Congressional policymakers are working on a border tax plan that would adversely impact imports. Third, the White House has announced that it intends to spend $1 trillion on infrastructure projects. How all these measures affect […]

Greece, the IMF and the Euro

Greece, the IMF and the Euro

photo: John D. Carnessiotis Talk about possible trade wars with China and the Brexit negotiations has crowded the Greek debt crisis out of the headlines, but a new decision point is approaching. It is possible that this time the beleaguered Greek government will announce a withdrawal from the Eurozone, if only to drive home the point to other European […]

The Changing Fortunes of the Renminbi and the Dollar

The Changing Fortunes of the Renminbi and the Dollar

Photo Last fall the International Monetary Fund announced that China’s currency, the renminbi, would be included in the basket of currencies that determine the value of the IMF’s reserve asset, the Special Drawing Right (SDR). The IMF’s statement appeared to confirm the rise in the status of the currency that could at some point serve as an […]

The 2016 Globie: “Global Inequality”

The 2016 Globie: “Global Inequality”

photo: Source Each year I name a book as the “Globalization Book of the Year” (also known as the “Globie”). The selection is a recognition of its author’s contribution to our understanding of the causes and effects of globalization. There is no money attached to the prize—recognition is the sole reward. Recent winners can be […]

The Electoral Consequences of Globalization

The Electoral Consequences of Globalization

Photo Source  The reasons for the election of Donald Trump as President of the U.S. will be analyzed and argued about for many years to come. Undoubtedly there are U.S.-specific factors that are relevant, such as racial divisions in voting patterns. But the election took place after the British vote to withdraw from the European […]

The Retreat of Financial Globalization?

The Retreat of Financial Globalization?

Eight years after the global crisis of 2008-09, its reverberations are still being felt. These include a slowdown in world trade and a reassessment of the advantages of globalization. Several recent papers deal with a decline in international capital flows, and suggest some reasons for why this may be occurring. Matthieu Bussière and Julia Schmidt of the […]

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