Global economy remains fragile; high-income countries suffering from slow growth. Read more ...
Providing information, analysis, and advice on global trends in the world economy. Find out more ...
Now free. Daily and monthly updates on global economic developments and relevant topical issues. Find out more ...
Important developments today:
1. Greek bonds weak following new debt sales
2. U.S. confidence bounces back inMarch
3. Japanese industrial production falls in February
With the attention of bond market vigilantes focused on the developed economies for a change, it is nonetheless valuable to take a step back and consider sovereign risk in the post-crisis developing world. Indeed, the most recent issue of the Economist fingered Eastern European economies as having narrowly escaped the fate of the Mediterranean Europe. But is the lack of market strutiny of developing economies' debt justified?
Important developments today:
1. Greece tests teh waters with new bond issue
2. U.S. consumer spending rises for a 5th month in February
3. Japanese retail sales improve
Important developments today:
1. Euro Zone reaches deal over Greek aid plan
2. U.S. GDP growth for Q4 revised down to 5.6%
3. Japanese deflationary pressures strengthen
The Economist this week led with this subheader: Action on climate is justified, not because the science is certain, but precisely because it is not. The underlying argument is that immediate action is akin to taking an insurance policy—you can’t wait until you have hard evidence in hand, because by that time, you can no longer protect yourself against a catastrophe.
Important developments today:
1. IMF role in Greek financial strategy becomes more likely
2. U.S. initial claims for unemployment benefits dip in latest week
3. European confidence on the mend
Important developments today:
1. Treasuries lower on strong economic data
2. U.S. durable goods maintain growth
3. European PMI hits strongest point since 2007; German business confidence improves
Important developments today:
1. Global equities lower on renewed debt concerns
2. U.S. housing market market recovery remains fragile
3. South Africa's current account deficit narrows in Q4-2009
After shrinking away from the international economic news for a brief spell, the USD/RMB exchange rate is the hot topic of the day again. Part of this renewed interest is due to the imminent semiannual report by the Treasury to Congress on exchange rate policies (due mid-April), part of it relates to the relevance of a competitive dollar for U.S.
For the third day it is very sunny here in Washington DC, after we had our fair share of rain over the weekend. Spring is coming and the popular saying that “after the rain comes the sun” is once again firmly confirmed.
As Alan Greenspan has famously insisted---and recently reiterated (PDF)---the Fed's culpability in the entire credit bubble is limited to its failure in its (secondary) role as regulator, and not in its (primary) role as monetary authority.
Important developments today:
1. Corporate borrowing costs narrowest since late-2007
2. U.S. headline inflation remains flat in February
3. Leading indicators point to slower growth in second half
Important developments today:
1. Emerging market equities climb to two-month high
2. U.S. Producer prices ease on energy costs in February
3. Russian industrial output rises in February at slower rate than in previous month
Important developments today:
1. U.S. housing sector continues to face cold headwinds.
2. China continues to reduce holdings of U.S Treasuries.
3. German investor confidence declines for a sixth straight month.
Throughout the trajectory of modern economic history, each phase of global growth has been driven by a small set of countries. Between the Tang and Ming dynasties (600–1600), China was a dominant force in the global economy, accounting for a quarter of its output and as much as a third of its growth.
Important developments today:
1. U.S. output up in February despite decline in autos.
2. Japanese Cabinet Office raises economic outlook for first since July.
3. China’s Premier Wen Jiabo calls RMB “not undervalued”.
Important developments today:
1. S&P upgrades credit ratings for Indonesia and Ukraine.
2. U.S. retail sales climb despite inclement Northeast weather.
3. U.S. consumer sentiment falls for a second month in March.
Important developments today:
1. Corporate bond markets resurgent following recent sell-off.
2. U.S. trade deficit narrows on lower exports and oil imports.
3. Initial U.S. unemployment claims ease in latest reporting week
Let me admit my transgression upfront: I stole the catchy title from a blog post that David Dollar wrote almost a year ago. David was then the World Bank’s country director for China and Mongolia. It was in fact the title of a conference he had just attended.
I had to think about this question again when we looked this week at high-frequency data (see graph below).
Important developments today:
1. Emerging market equities climb to 7-week high
2. German exports unexpectedly slump in January
3. Japanese private machinery orders slip in January
Lost in many of the post-crisis financial reform proposals to rein in destructive financial innovation---such as calls to ban naked CDS, establish centralized clearinghouses for derivatives, and eliminate high-frequency trading---is the broader issue of whether these innovations could actually enhance welfa
Important developments today:
1. German industrial output picks up
2. Latvia's economy continues on deflationary trend for now
3. Consumer confidence in Indonesia weakens on rising inflation
So far, the indications are that the global economic recovery remains on track and broadly in line with Global Economic Prospects (GEP) 2010 projections.
Important developments today:
1. Emerging market equities push toward three-month highs
2. U.S. unemployment rate steady in February
3. German factory orders from domestic firms soar in January
Important developments today:
1. Greece issues new bond
2. U.S. initial claims fall ahead of February's employment report
3. Malaysia raises policy rate for the first time since late 2005
In a recent IMF Staff position note Olivier Blanchard and Gian Maria Milesi-Ferretti provide a useful classification of current account imbalances. They argue that deficits and surpluses on current accounts are "good" if they reflect optimal allocation of capital across time and space. That is the case, for example, when savings ratios differ across countries because of different ageing profiles or when investment ratios differ because of different productivity trends.
Important developments today:
1. Greece unveils new austerity plan to trim deficit
2. U.S. service sector activity expands at fastest rate since October 2007
3. Retail sales in the Euro area remain weak
The notion that systematic Taylor rule deviations has a role to play in the real estate bubble in the United States is an issue that has been rigorously debated---see John Taylor (PDF) and Marco del Negro and Christopher Otrok for opposing views---but broader evidence at the cross-country level is relatively scarce.
Important developments today:
1. Sovereign default risk on European countries decreases
2. U.S. household spending increases in January
3. The unemployment rate in the Euro Area remained steady at 9.9% in January
