Reserve Accumulation in the Wake of the Great Recession

More from For a Few Dollars More: Reserve Accumulation in Times of Crisis, by Matthieu Bussiere (Banque de France), Menzie Chinn (UW), Gong Cheng (Sciences Po), Noemie Lisack (European University Institute) (also NBER Working Paper No. 19791): …In the immediate aftermath of the crisis, countries that depleted foreign reserves during the crisis quickly rebuilt their stocks. This rapid rebuilding has, however, […]

China Sovereign Wealth Fund’s Shifting Strategy

China Investment Corporation (CIC), the country’s main sovereign wealth fund, posted a 10.65% return on its overseas investment in 2012, registering an above 5% cumulative annualized return since its establishment in 2007. This is a significant improvement compared with the 4.3% loss last year, the fund’s worst performance in 5 years. As a young member […]

Currency Wars in the Era of Unconventional Monetary Policies

Interpreting Monetary Policy’s Impact on Exchange Rates (and Economic Activity) Over a week ago, Bundesbank President Jen Weidmann warned against the politicization of Japanese monetary policy, as the BoJ was pressured for more expansionary policy. [1] Nouriel Roubini warned that a currency war could be self-defeating as each country’s laxer monetary policy merely resulted in higher commodity […]

CNBC Video Clip: FX Outlook

Here is a video clip of my (short) appearance on CNBC’s Squawk Box on January 25 where I discussed the currency outlook. “I seems to me that the correlation between the euro, say, and the yen and the U.S. stock market has really become decoupled. I think there’s three drivers really todya in the FX market: one […]

The Waldman-Krugman-Sumner Debate: It’s the IOER Path

Are we headed toward a brave new world of perpetual liquidity traps? Steven Randy Waldman says yes. He believes the Fed will continue operating in a zero lower bound-like environment going forward, even after the economy has recovered and interest rates return to more normal levels: What I am fairly sure won’t happen, even if interest rates […]

Deep Dive: Financial Repression Reconsidered

In response to the end of the credit cycle, policy makers and central bankers in the high income countries have exponentially increased their presence in the capital markets. Debt issued by governments has soared and central banks are pursuing unorthodox policies—the purpose of which varies from country to country. The purpose of quantitative easing in the […]

Is There an Asian RMB Bloc?

In the past two weeks we have been treated with a mostly positive but nonetheless mixed bag of economic data from China. There has been good news, bad news, good news with worrying underlying trends, and bad news with silver linings. Analysts have announced that things are getting worse and that things are getting better. […]

Worst of the Eurozone Crisis Is Not Over Yet

All is relatively quiet in the eurozone these days – or at least that is what you might think, speaking to portfolio managers over the past few months. German chancellor Angela Merkel has visited Greece, Ireland has re-entered the bond markets and the ECB’s balance sheet is in play for Spain and Italy, so what […]