Global economy April-October 2021

22 October, Updated 31 October
How the Supply Chain Broke, and Why It Won’t Be Fixed Anytime Soon
Confession: We didn’t even have a logistics beat before the pandemic. Now we do. Here’s what we’ve learned about the global supply chain disruption.
(NYT) The disruptions go back to early last year, to the beginning stages of the pandemic. Factories in parts of the world where a lot of the globe’s manufacturing capacity sits — places like China, South Korea and Taiwan as well as Southeast Asian nations like Vietnam and European industrial giants like Germany — were hit hard by the spread of coronavirus cases. Many factories shut down or were forced to reduce production because workers were sick or in lockdown. In response, shipping companies cut their schedules in anticipation of a drop in demand for moving goods around the world.
Americans took the money they used to spend on such experiences and redirected it to goods for their homes, which were suddenly doubling as offices and classrooms. … Factories whose production tends to be fairly predictable ramped up to satisfy a surge of orders.

25 October
Deepening Divides: The IMF Refreshes its Crystal Ball
This year’s International Monetary Fund/World Bank annual meetings were a test of both institutional integrity and international cohesion. Former Clerk of the Privy Council and BMO Vice Chair Kevin Lynch and former White House National Economic Council aide and CN Vice President Paul Deegan provide a comprehensive takeaway.
(Policy) Headline global growth is 5.9 percent this year, with 4.9 percent expected next year. Perhaps equally important, given the terrifying plunge in all economies last year and the large growth numbers we are now witnessing, is whether countries have recovered their pre-COVID levels of economic activity and employment. Here, the progress is more mixed, and depends significantly on vaccination rates and COVID mitigation measures.
Behind the headlines, however, the discussions around the Washington meetings highlighted five “deepening divides” that tilt the balance of global risks to the downside going forward. These divides include: The gap between economic prospects for high-vaccination rate countries versus low vaccination rate countries; between inflation hawks and inflation doves; between the demand for workers and the supply of workers; between the geopolitical interests of China and the United States; and, between economically efficient energy transition policies post-COP26 and inefficient, ineffective and uncoordinated ones.
Looking for international cooperation, the G20 Communiqué — a dense tome that clocked in at over 3000 words and set a new world record for the use of acronyms – suggests that it may be more present in rhetorical form than in reality.
How to make fragile global supply chains stronger and more sustainable
Adel Guitouni, Associate Professor, International Business; Cynthia Waltho, Postdoctoral Research Fellow, Business; Mohammadreza Nematollahi, Postdoctoral Research Fellow, Business, University of Victoria
(The Conversation) For most of us, supply chains are no longer an abstract concept. The COVID-19 pandemic raised our awareness about the interdependence of our economic systems. We now understand the many ways these chains directly shape and impact our lives.
The pandemic has also revealed the fragility of global supply chains as U.S. President Joe Biden and others warn of the impact on the world economy of continuing supply-chain bottlenecks.
Global supply chains have conventionally been focused on achieving financial efficiency above all else. The result is messy and fragile global supply chain systems.
In practice, the decisions made and actions taken by each organization affect the performance of the entire supply chain. A problem at any point feeds other problems at different stages of the chain.
A product shortage at a retail store, for example, might be caused by unsuspected problems such as labour issues, raw material shortages or clogged ports.
Semiconductor shortages are disrupting the automobile industry. Meanwhile, the cost of moving a container from China to the west coast of North America is estimated to have increased by 650 per cent since before the pandemic.

Annual Meetings of the World Bank Group and the International Monetary Fund Monday, October 11, through Sunday, October 17

19 October
Annual Meetings Wrap-up: despite urgent climate and development needs, geopolitics and deference to private finance rule the day

12 October
World Economic Outlook October 2021
Global recovery continues, but the momentum has weakened and uncertainty has increased
(IMF) The global economic recovery is continuing, even as the pandemic resurges. The fault lines opened up by COVID-19 are looking more persistent—near-term divergences are expected to leave lasting imprints on medium-term performance. Vaccine access and early policy support are the principal drivers of the gaps.
The global economy is projected to grow 5.9 percent in 2021 and 4.9 percent in 2022, 0.1 percentage point lower for 2021 than in the July forecast. The downward revision for 2021 reflects a downgrade for advanced economies—in part due to supply disruptions—and for low-income developing countries, largely due to worsening pandemic dynamics. This is partially offset by stronger near-term prospects among some commodity-exporting emerging market and developing economies. Rapid spread of Delta and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome. Policy choices have become more difficult, with limited room to maneuver.
IMF warns cryptocurrencies may threaten financial stability without regulation
While cryptocurrency has the ability to improve the global payment system, digital coins still pose considerable challenges to market conditions worldwide, the International Monetary Fund warned in a new report on Tuesday.
In its latest Global Financial Stability Report, the fund stated that risks stemming from the booming crypto trading and the proliferation of digital coins “appear contained for now,” but they should be monitored closely.
As crypto grows in adoption, the potential impact on the economy and the risks will grow, according to the IMF. The international body added its voice to a growing chorus on the need for more oversight, underscoring that crypto has inadequate regulations and deficiencies in its operating structure — pointing to exchanges that go down during major selloffs.

[Aleh Tsyvinski: Cryptocurrencies’ Next Stage
This “mainstreaming” of blockchain applications marks the end of the first stage of the technology’s development. Now, with the help of regulators in a range of countries, cryptocurrency is entering the next phase of its evolution: becoming an investable asset.
(Project Syndicate) Regulators around the world are cracking down on cryptocurrencies. China has banned them. The United States is considering a range of measures aimed at reining them in. The Bank of England is developing capital requirements for financial institutions that hold them. But, far from spelling disaster for the crypto industry, regulation is vital to its long-term prospects.]

IMF backs leader after reviewing reports of data rigging at World Bank to favour China
By Andrea Shalal and David Lawder Reuters
(Global) The International Monetary Fund’s executive board on Monday expressed its full confidence in Managing Director Kristalina Georgieva after reviewing allegations that she pressured World Bank staff to alter data to favor China.
But U.S. Treasury Secretary Janet Yellen put Georgieva on notice that she would closely monitor the IMF’s follow-up and evaluate any new facts or findings, and called for proactive steps to reinforce data integrity and credibility at the IMF.
The Fund’s 24-member board and the U.S. Treasury issued separate lengthy statements after a week of marathon meetings over Georgieva’s actions as World Bank CEO that threw into question her continued leadership of the IMF.

10 October
October 2021 update to TIGER: The global economic recovery is in danger of stalling
Aryan Khanna and Eswar Prasad
(Brookings) The latest update of the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (TIGER) shows growth momentum weakening across the world, particularly in the two major engines of global growth—the U.S. and China.
Amid persistent concerns about the impact of Delta and newer variants of the coronavirus, supply-side constraints are tightening and rising inflation is becoming a significant restraint on policy support that could keep growth on track. The spike in energy prices is emblematic of the problems created by supply disruptions that could eventually hurt aggregate demand, particularly if central banks are forced to take more aggressive actions to contain inflation. In many countries, particularly the emerging markets and low-income economies, the 2020 recession continues to have scarring effects on GDP and employmen

8 October
5 things to watch at the World Bank-IMF annual meetings
By Shabtai Gold
(Devex)…experts are still hoping that the meetings help move the needle on issues such as COVID-19 vaccine distributions, reallocation of resources to lower- and middle-income countries struggling with shrinking fiscal space, and rising debt around the world.
1. Will more financing be unlocked for COVID-19 vaccines?
2. Will there be debt relief for middle-income countries?
3. Will Special Drawing Rights be redistributed?
4. Will there be any movement on replenishing IDA? — No specific public announcement is expected on the replenishment of the International Development Association, a pivotal World Bank fund that provides assistance to the lowest-income nations. The fund is running out ahead of schedule, after the bank “front-loaded” assistance from the previous round of recapitalization in 2019. African leaders are pushing for the new round to reach $100 billion.
5. Will the Doing Business scandal overshadow everything?
Global Deal to End Tax Havens Moves Ahead as Nations Back 15% Rate
More than 130 countries agreed to set a minimum tax rate of 15 percent as governments look to end a race to the bottom on corporate taxation.
(NYT) The world’s most powerful nations agreed on Friday to a sweeping overhaul of international tax rules, with officials backing a 15 percent global minimum tax and other changes aimed at cracking down on tax havens that have drained countries of much-needed revenue.
The Organization for Economic Cooperation and Development, which has been leading the negotiations, said the new minimum tax rate would apply to companies with annual revenue of more than 750 million euros ($866 million) and would generate around $150 billion in additional global tax revenue per year.
The agreement is the culmination of years of fraught negotiations that were revived this year after President Biden took office and renewed the United States’ commitment to multilateralism.

7 October
Anne O. Krueger: The Bretton Woods Credibility Crisis
The World Bank and the International Monetary Fund play a critical role in the global economy precisely because their independent research is universally trusted. But following a scandal involving the World Bank’s flagship report, urgent action is needed to regain the public’s confidence.
(Project Syndicate) If an IMF managing director is thought to be amenable to pressures to alter data and analyses, the credibility of the Fund’s work will be greatly diminished, if it is believed at all. It is one thing for the managing director to urge the Board to approve a program of questionable merit based on a report providing an honest account of the situation. It is quite another thing to pressure staff to alter the numbers. Should Georgieva remain in her position, she and her staff will surely be pressured to alter other countries’ data and rankings. And even if they resist, the reports they produce will be suspect. The entire institution’s work will be devalued. That prospect alone should be enough for the IMF’s political masters to find a new managing director whose commitment to the integrity of the work is not in question.
IMF board weighs top official’s fate in wake of China scandal
Managing Director Kristalina Georgieva has been linked to a scandal involving China and an annual report that ranked countries as investment destinations.
The intensity of the debate was underscored when 16 African countries released a statement supporting her earlier this week. On Friday she reportedly received the backing of Germany, U.K., France and Italy.

Bloomberg New Economy:
The world economy is running into many headwinds as the year enters its final stretch and the northern hemisphere’s winter beckons:
The delta variant abounds, limiting activity
Supply chains are straining and ports are congested
China is being rocked by a power crunch, regulatory crackdown and turmoil at Evergrande
Food and commodity prices are surging, propelling inflation
There are labor shortages in certain industries
U.S. lawmakers are at odds over spending and the federal debt limit
Central banks are starting to withdraw stimulus
Put them all together and these different forces suggest the recovery from the pandemic recession is going to be challenged in coming months, as Enda Curran writes in this rundown of all the potential spoilers.

3-5 October
Secret files reveal offshore financial system used by global elites
(WaPo) The project, known as the Pandora Papers, was conceived and organized by the International Consortium of Investigative Journalists, which obtained the records and shared them with The Post and other partners. The documents — more than 11.9 million records from 14 offshore entities, including law and wealth-management firms — illuminate a hidden world that has allowed government leaders, a monarch, billionaires and criminals to shield their assets.
Key findings from the Pandora Papers investigation
The investigation exposes more than twice as many offshore account holders and political figures as the Panama Papers, an earlier ICIJ-led global study of offshore finance, and relies on a larger trove of confidential information.
Pandora papers: biggest ever leak of offshore data exposes financial secrets of rich and powerful
Canadian/Montreal footnote
Elvis Stojko took out $6.5M in life insurance on his parents and says he has no idea why it ended up offshore
(CBC) The mastermind behind Stojko’s financial planning was a lawyer from Montreal named T.R. Anthony Malcolm. A Scottish heritage enthusiast who wore kilts to family weddings and headed the city’s St. Andrew’s Society for several years, Malcolm was known as a tax haven specialist.
At the time, Malcolm was in some hot water. His name had appeared in newspaper headlines for his role in a major Canadian investing scandal, the collapse of the $800-million Portus Alternative Asset Management hedge fund. At the behest of one of Portus’s founders, Malcolm had funnelled company money into accounts in the Caribbean, before some of it disappeared. Unlike the company’s founders though, he was never accused of any criminal wrongdoing.
Stojko said he met Malcolm long before, in the mid-1990s, and the lawyer became “like a second father” to him.

30 September
Fareed Zakaria: The troubles of a company that nobody had ever heard of now have people worried about another global economic crisis. Evergrande is a property developer in China with the dubious distinction of being the world’s most indebted real estate company, with outstanding loans of more than $300 billion. For the moment, at least, it appears unlikely that the firm’s travails will upend the global economy. But its crisis highlights a crucial fragility in China’s economy.
Looking around, one sees problems in most major economies. … Germany remains a laggard in the digital age. Its much-vaunted manufacturing economy dates from the Second Industrial Revolution: cars, chemicals and machine tools. In the digital realm, Germany boasts only one large company, SAP, that is now almost 50 years old. And, like China, Germany’s demographics are grim. In 2020, for the first time in a decade, its population actually shrunk.
These are not isolated examples. Look at the world’s other major economies — Japan, Britain, India — and you will see similar structural weaknesses and fragilities. Japan continues to grow at a snail’s pace. A few decades ago, Indians often spoke of their overtaking China. Today, China’s economy is more than five times the size of India’s. Britain will spend the next few years paying the price for Brexit, as its current fuel crisis demonstrates.

28 September
Power shortages in China hit homes and factories prompting global supply fears
(The Guardian) Rationing has been implemented during peak hours since last week, while residents of cities including Changchun said cuts were occurring sooner and lasting for longer, state media reported.
China’s power crunch, caused by tight coal supplies and toughening emissions standards, has hurt production in industries across several regions and poses a risk to already strained global supply chains.
Manufacturers face existing shortages of processor chips, disruptions in shipping and other lingering effects of the global shutdown of travel and trade to fight the coronavirus pandemic.
In the north-east, factories were idled to avoid exceeding limits on energy use imposed by Beijing to promote efficiency. Economists and an environmental group say manufacturers used up this year’s quota faster than planned as export demand rebounded from the coronavirus pandemic.

27 September
Joseph E. Stiglitz: A Coup Attempt at the IMF
Kristalina Georgieva, the IMF’s Managing Director since 2019, has been a bold leader in confronting the economic fallout of the pandemic, as well as in positioning the Fund as a global pioneer on climate change. The efforts now underway to remove her are not only unjust, but could hamstring the Fund’s management for years to come.
(Project Syndicate) Moves are afoot to replace or at least greatly weaken Kristalina Georgieva, the International Monetary Fund’s managing director since 2019. This is the same Georgieva whose excellent response to the pandemic quickly provided funds to keep countries afloat and to address the health crisis, and who successfully advocated for a $650 billion issuance of IMF “money” (special drawing rights, or SDRs), so essential for low- and middle-income countries’ recovery. Moreover, she has positioned the Fund to take a global leadership role in responding to the existential crisis of climate change.
If the WilmerHale report is best characterized as a hatchet job, what’s the motive? There are, not surprisingly, some who are unhappy at the direction the IMF has taken under Georgieva’s leadership. Some think it should stick to its knitting and not concern itself with climate change. Some dislike the progressive shift, with less emphasis on austerity, more on poverty and development, and greater awareness of the limits of markets.
Then, too, there are longstanding institutional rivalries between the IMF and the World Bank, heightened now by the debate about who should manage a proposed new fund for “recycling” the newly issued SDRs from the advanced economies to poorer countries. One can add to this mix the isolationist strand of American politics – embodied by [World Bank president David] Malpass, a Trump appointee….

25 September
China Power Crunch Is Next Economic Shock Beyond Evergrande
China may be diving head first into a power supply shock that could hit Asia’s largest economy hard just as the Evergrande crisis sends shockwaves through its financial system.
(Bloomberg) The worsening power crunch in China — perhaps overshadowed by the attention on whether Evergrande will default on its mammoth debts — reflects extremely tight energy supply globally that’s already seen chaos engulf markets in Europe. The economic rebound from Covid lockdowns has boosted demand from households and businesses as lower investment by miners and drillers constrains production.

24 September
China’s top regulators ban crypto trading and mining, sending bitcoin tumbling
(Reuters) – China’s most powerful regulators on Friday intensified a crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.
The move comes amid a global cryptocurrency crackdown as governments from Asia to the United States fret that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.

22-24 September
‘Simply untrue’: IMF’s Georgieva pushes back on World Bank probe
The report has put IMF Managing Director Kristalina Georgieva at risk of seeing her authority undermined just weeks before an annual meeting of global finance chiefs.
Ex-World Bank official defends Georgieva as magazine calls for her ouster at IMF
(Reuters) – A former World Bank official who prepared reports at the center of a data-rigging scandal that aided China defended IMF chief Kristalina Georgieva on Thursday as the Economist magazine called for her to resign over her alleged role in the controversy.
Shanta Devarajan, who helped oversee the World Bank’s “Doing Business” report in 2017, said that an outside investigation report alleging that Georgieva, during her time as World Bank CEO, applied “undue pressure” on staff to boost China’s ratings was “beyond credulity.”
Devarajan, now a Georgetown University professor of development policy, said in a series of tweets that he never felt any pressure to change China’s scores and said that WilmerHale lawyers used only half of his statements from an hours-long interview.
IMF board gets initial briefing on Georgieva role in China data rigging scandal
Georgieva on Friday denied allegations that she pressured World Bank staff to alter data as it prepared its Doing Business 2018 report on country business climates.

China Evergrande veers toward default — and a $300 billion global shock
(WaPo) After years of ratcheting up debt to fund expansion, the sprawling conglomerate’s financially risky behavior became too dangerous for authorities to ignore earlier this year, when China’s central bank ordered the company to end its debt addiction.
The resulting liquidity crisis is widely expected to end in one of China’s largest defaults, in what would be a severe shock for the country’s property market and a blow for the Chinese Communist Party’s campaign to tackle financial risks without harming economic growth or the everyday livelihoods of Chinese households. Global stock markets tanked Monday amid growing panic of wider contagion starting with foreign creditors left without payments.
So far, the Chinese leadership appears inclined to allow a default. “Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy,” S&P Global Ratings wrote in a note on Monday.

Shaping an equitable, inclusive and sustainable recovery: A programme for action
(WEF) The goal is to recover rapidly and achieve strong long-term growth that’s ecologically sustainable and economically and socially inclusive and resilient. The Sustainable Development Goals (SDGs) and the Paris Agreement provide guideposts, embodying values and principles for the new era. At a time of growing international division and threats to the global order, these themes can and should unify.
The new path doesn’t mean trading prosperity for abstract principles. The perception that the current generation would be asked to somehow pay for its sins has burdened the discussion and weighed down the psychology of change. Quite the contrary: charting a new course will enable more comprehensive use of all assets (human, natural, physical, social) within planetary and societal boundaries. Today’s inequality and market failures mean that capacity, talent and potential resources are wasted, while others are consumed in unsustainable excess. Sustainability, rooted in new technologies and practices, is driving a new industrial revolution.

3 September
Wonking Out: A very Austrian pandemic
Paul Krugman
Although we aren’t hearing much about Austrian economics these days, the pandemic really did produce an Austrian-style reallocation shock, with demand for some things surging while demand for other things slumped. You can see this even at a macro level: There was a huge increase in purchases of durable goods even as services struggled. (Think people buying stationary bikes because they can’t go to the gym. Hey, I did.)

27 July
IMF World Economic Outlook Update July 2021
Fault Lines Widen in the Global Economy
Economic prospects have diverged further across countries since the April 2021 World Economic Outlook (WEO) forecast. Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls. The recovery, however, is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere.
IMF warns of growing poverty, unrest and geopolitical tensions
The IMF warns of a global economic recovery where ‘poor get poorer and social unrest and geopolitical tensions grow’.
(Al Jazeera) The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies thanks to vaccine inequity and a lack of fiscal support, the International Monetary Fund (IMF) warned on Tuesday
While the latest update to the IMF’s World Economic Outlook sees the global economy still growing 6 percent this year – unchanged from its April estimate – Chief Economist Gita Gopinath noted that the composition of the recovery continues to change. “The recovery is not assured until the pandemic is beaten back globally,”

23-26 July
The COVID-19 pandemic has revealed that global supply chains are a huge house of cards
Glenn McGillivray, Managing Director, Institute for Catastrophic Loss Reduction, Western University
(The Conversation) While unscheduled closures of manufacturing and distribution facilities, bottlenecks at borders and sick workers have caused choke points in supply lines, people being cooped up in their homes for months on end have driven up demand for a host of products.
There has also been a simultaneous shortage of labour, particularly in the licensed trades.
Throw in other disruptors, like the massive winter storm in Texas in February, the six-day blockage of the Suez Canal due to the grounded ship Ever Given in March and the six-day closure of the Colonial gasoline pipeline in the United States after a cyberattack in early May.
Also include the fact that shipping containers are being lost in record amounts for various reasons, with more than 3,000 going overboard in 2020 and the 2021 number already hitting 1,000 by the end of April.
The pandemic has shown us that global supply chains are a huge house of cards: fragile enough on a good day, but prone to come tumbling down when there’s an unexpected breeze.
This has been particularly apparent with the manufacturing of computer chips.
Global supply chains buckle as virus variant and disasters strike
(Reuters) – A new worldwide wave of COVID-19. Natural disasters in China and Germany. A cyber attack targeting key South African ports.
Events have conspired to drive global supply chains towards breaking point, threatening the fragile flow of raw materials, parts and consumer goods, according to companies, economists and shipping specialists.
The Delta variant of the coronavirus has devastated parts of Asia and prompted many nations to cut off land access for sailors. That’s left captains unable to rotate weary crews and about 100,000 seafarers stranded at sea beyond their stints in a flashback to 2020 and the height of lockdowns. Given ships transport around 90% of the world’s trade, the crew crisis is disrupting the supply of everything from oil and iron ore to food and electronics.
See also After the Ever Given: what the ship wedged in the Suez Canal means for global trade (25 March).

21 July rebroadcast from 22 February
Mark Carney says post-pandemic ‘bump’ not enough for smooth recovery
From credit to climate to COVID: Former bank governor warns of crisis in values

9 July
G20 to call for global tax deal to be finalised by October
(Reuters) – G20 finance ministers are to push for unresolved issues in a proposed global corporate tax overhaul to be ironed out by October, and are urging holdouts to join the deal, according to the latest version of their statement from a meeting in Venice.
The statement, which two sources said was expected to be released without changes, said the ministers also endorsed a recent deal among 131 countries on taxation of multinationals’ profits and setting a global minimum corporate tax rate of at least 15%.

8 July
Inequality and the Macron Commission
Dani Rodrik, Stefanie Stantcheva
(Project Syndicate) Just as the pandemic was gathering pace in early 2020, French President Emmanuel Macron set up an international commission of economists to assess these longer-term challenges and make policy proposals. Headed by the former International Monetary Fund chief economist Olivier Blanchard and the Nobel laureate economist Jean Tirole, the commission debated each of these issues over the course of several months. Interesting proposals emerged from the three reports produced by a subgroup of authors and released at the end of June.
We prepared the report on inequality and economic insecurity. …
Another important strategy is to reduce gaps in educational quality and achievement. This issue has been part of national debates, in France and elsewhere, for some time, and progress has been made in recent years. But much remains to be done. Our proposals focus on better access to schooling for children from low socioeconomic backgrounds; improving outcomes for lower-quality schools in lagging regions; rethinking the teaching profession and making it more attractive; giving more responsibilities and autonomy to school administrations; boosting vocational and dual vocational-academic tracks; and improving the transition from school to the labor market.
An increase in the supply of good, well-paying jobs for those at the bottom of the income distribution requires a commensurate increase in productivity. Good jobs and good firms go hand in hand. While training and education are important, they are not enough in the absence of productive firms that create good jobs. Social policy and growth policy are complementary and need to be designed accordingly.
..we propose a set of remedies that link labor-market policies with industrial, regional, and innovation policies. This good-jobs strategy includes active labor-market policies that are more closely coordinated with employers and provide broader services to job seekers. At the same time, it reorients existing industrial and regional policies away from tax subsidies and cash incentives and toward customized public services for firms targeted specifically on good-job creation. And it rethinks prevailing innovation incentives to stimulate explicitly worker-friendly technologies that enhance rather than replace middle-skill jobs in manufacturing and services.
Policymakers must also address the legitimate concern that globalization and international outsourcing have undermined equity and good jobs.

5 July
Bloomberg: Any optimism about global economic growth from Group of 20 finance chiefs this week is likely to be delivered with crossed fingers that a rapidly evolving virus can be kept at bay.
The challenge includes the delta variant of the coronavirus, a more-transmissible mutant that’s spreading worldwide.
The worry is the emergence of this new variant before the world got fully vaccinated risks slowing the reopening of economies, hurting demand and pushing up inflation.
“A delta variant that spreads quickly is an uncertainty, and it is an uncertainty that will weigh on the balance of risks today,” European Central Bank.

28 June
Economics Needs a Climate Revolution
Tom Brookes, Gernot Wagner
With its fixation on equilibrium thinking and an exclusive focus on market factors that can be precisely measured, the neoclassical orthodoxy in economics is fundamentally unequipped to deal with today’s biggest problems. Change within the discipline is underway, but it cannot come fast enough.
(Project Syndicate) The economics discipline has failed to understand the climate crisis – let alone provide effective policy solutions for it – because most economists tend to divide problems into small, manageable pieces. Rational people, they are wont to say, think at the margin. What matters is not the average or totality of one’s actions but rather the very next step, weighed against the immediate alternatives.Such thinking is indeed rational for small discrete problems. Compartmentalization is necessary for managing competing demands on one’s time and attention. But marginal thinking is inadequate for an all-consuming problem touching every aspect of society.
Economists also tend to equate rationality with precision. The discipline’s power over public discourse and policymaking lies in its implicit claim that those who cannot compute precise benefits and costs are somehow irrational. This allows economists – and their models – to ignore pervasive climate risks and uncertainties, including the possibility of climatic tipping points and societal responses to them. And when one considers economists’ fixation with equilibrium models, the mismatch between the climate challenge and the discipline’s current tools becomes too glaring to ignore.

16 June
COVID-19 has shone a light on how globalization can tackle inequality
Sylvanus Kwaku Afesorgbor, Assistant Professor, Agri-Food Trade and Policy, University of Guelph;
Binyam Afewerk Demena, Postdoctoral research fellow, International Institute of Social Studies; and
Peter A.G. van Bergeijk, Professor of International Economics and Macroeconomics, International Institute of Social Studies
(The Conversation) In recent years, globalization has been the subject of growing discontent and criticism, … The backlash represents a major setback to the pace of globalization and sets the stage for growing protectionism and nationalism around the world. Many criticisms have been political, but the ongoing COVID-19 pandemic has introduced new health threats to globalization.
In a sense, the pandemic has illuminated both globalization (a virus went global in a few weeks thanks to globalization and interconnectedness) and deglobalization (the breakdown of international co-operation and the re-emergence of nationalism when it came to personal protective gear, medical devices and vaccines).
In our recent research, we detail the pandemic’s impact on the world economy via three components of globalization: economic, social and political. The pandemic and the economic policy response to the crisis have had an impact on these three aspects to varying degrees.
The disease of inequality
Ironically, the attacks on globalization were a symptom of an underlying disease — inequality — that have been illuminated by the pandemic.
Globalization lacked a trickling down of benefits to those who most needed them. The pandemic taught us that inequalities are the breeding ground for the spreading of literal diseases and the suffering that follows. Reducing vulnerabilities to future epidemics requires tackling those inequalities.
But the fight against future crises cannot be limited to domestic developments only, because inequality is global. Adhering to the United Nations Sustainable Development Goals is therefore a high-return investment project.
The push towards deglobalization certainly still exists. But economies are now digitally connected in ways they’ve never been before.

14 June
The Brutal Truth About Bitcoin
Eswar Prasad, professor at Cornell University and a senior fellow at the Brookings Institution.
(NYT Opinion) Its emergence amid the global financial crisis, which shook trust in banks and even governments, was perfectly timed. Bitcoin enabled transactions using only digital identities, granting users some degree of anonymity. This made Bitcoin the preferred currency for illicit activities, including recent ransomware attacks. It powered the shadowy darknet of illegal online commerce.
… it has become clear that Bitcoin does not offer true anonymity. The government’s success in tracking and retrieving part of the Bitcoin ransom paid to the hacking collective DarkSide in the Colonial Pipeline ransomware attack has heightened doubts about the security and nontraceability of Bitcoin transactions.
Bitcoin is not innocuous. Transactions are processed by “miners” using massive amounts of computing power in return for rewards in the form of Bitcoin. By some estimates, the Bitcoin network consumes as much energy as entire countries like Argentina and Norway, not to mention the mountains of electronic waste from specialized machines used for such mining operations that burn out rapidly.
Whatever Bitcoin’s eventual fate, its blockchain technology is truly ingenious and groundbreaking. Bitcoin has shown how programs running on networks of computers can be harnessed to securely conduct payments, within and between countries, without relying on avaricious financial institutions that charge high fees.
Variants of Bitcoin’s technology are also making many financial products and services available to the masses at low cost, directly connecting savers and borrowers. These developments and the possibilities created by the new technologies have spurred central banks to consider issuing digital versions of their own currencies. China, Japan, and Sweden are already conducting trials of their digital currencies.
Ironically, rather than truly democratizing finance, some of these innovations may exacerbate inequality. Unequal financial literacy and digital access might result in sophisticated investors garnering the benefits while the less well off, dazzled by new technologies, take on risks they do not fully comprehend.

5-7 June
Gwynne Dyer: A change in the economic weather?
It’s not Bretton Woods, but it’s a start. The decision by the finance ministers of the G7 countries to create a global minimum tax rate on corporate profits is a step in the right direction, if only a baby step. The tide was due to turn about now, according to one theory, and maybe it’s finally happening.
What was actually agreed at the meeting in London on Saturday was both timid and provisional. The minimum tax rate for large international corporations was set at 15 percent, not far above the rate charged by low-tax venues like Ireland and Cyprus (12.5 percent).
That’s already down significantly from the 21 percent tax rate originally proposed by US President Joe Biden. Moreover, the G7 (the US, Germany, Japan, France, the UK, Canada and Italy) was just the first hurdle for this initiative.
The plan must also pass scrutiny by the Organisation for Economic Cooperation and Development (38 upper- and middle-income democracies), then by the G20 meeting in Italy next month (which includes Russia, China, India and Brazil), and finally by the US Congress (ratification in 2022?).
If it makes it through all that, then companies like Microsoft could no longer shield their profits from meddlesome taxation … The question is whether this is a flash in the pan or a lasting change of direction. The answer largely depends on whether or not you believe in the idea of a long (circa 40-year) cycle in the politics of the economy. If you take it seriously, then we are indeed due for a change.
The G7 Tax Clampdown and the End of Hyper-Globalization
Dani Rodrik
The G7 agreement on taxation of global corporations still needs formal approval from a wider set of countries, and there remain many details to be worked out for it to be effective. Nonetheless, it would not be farfetched to describe the deal as historic.
G-7 countries reach agreement on 15 percent minimum global tax rate
The accord announced by finance ministers could reshape tax obligations of multinational corporations
“That global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world.”
In remarks at the close of the meeting, Yellen told reporters that the agreement represented the revival of multilateral cooperation after years of strain under President Trump.
Under the deal, the U.S. is expected to give up some taxing rights on overseas profits of U.S.-based tech giants.

4 June
Kenneth Rogoff: A Curse Worse than Cash
Although prominent cryptocurrency advocates are politically connected and have democratized their base, regulators simply cannot sit on their hands forever. Malicious ransomware attacks targeting growing numbers of firms and individuals could prove to be the tipping point.
(Project Syndicate) [R]ecent ransomware attacks, and cryptocurrencies’ central role in enabling them, are a public relations disaster.
The attacks include last month’s shutdown of the Colonial Pipeline, which drove up gasoline prices on the US East Coast until the company paid the hackers $5 million in Bitcoin, and, even more recently, an attack on JBS, the world’s largest meat producer. Such episodes highlight what for some of us has been a longstanding concern: difficult-to-trace anonymous cryptocurrencies offer possibilities for tax evasion, crime, and terrorism that make large-denomination bank notes seem innocuous by comparison. Although prominent cryptocurrency advocates are politically connected and have democratized their base, regulators cannot sit on their hands forever.The view that cryptocurrencies are just an innocent store of value is stupefyingly naive. Sure, their transaction costs can be significant enough to deter most ordinary retail trade. But for anyone trying to avoid stringent capital controls (say, in China or Argentina), launder illicit gains (perhaps from the drug trade), or evade US financial sanctions (on countries, firms, individuals, or terrorist groups), crypto can still be an ideal option.

24 May
Five myths about cryptocurrency
Eswar Prasad, Senior Fellow – Global Economy and Development
(Brookings) Cryptocurrencies might turn out to be a massive speculative bubble that ends up hurting many naive investors. Indeed, many cryptocurrency fortunes have already evaporated with the recent
plunge in prices. But whatever their ultimate fate, the ingenious technological innovations underpinning them will transform the nature of money and finance.
Myth No. 1 A cryptocurrency is real money that can be used for payments.
Myth No. 2 Cryptocurrencies are a good investment.
Myth No. 2 Cryptocurrencies are a good investment.
Myth No. 4 Cryptocurrencies will displace the dollar.
Myth No. 5 Cryptocurrencies are just a fad and will fade away.
China crypto mining business hit by Beijing crackdown, bitcoin tumbles
A State Council committee led by Vice Premier Liu He announced the crackdown late on Friday as part of efforts to fend off financial risks. It was the first time China’s cabinet has targeted virtual currency mining, a sizable business in the world’s second-biggest economy that some estimates say accounts for as much as 70% of the global crypto supply.
Crypto miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify virtual coin transactions in a process which produces newly minted crypto currencies such as bitcoin.”Crypto mining consumes a lot of energy, which runs counter to China’s carbon neutrality goals,” said Chen Jiahe, chief investment officer of Beijing-based family office Novem Arcae Technologies.
The crackdown is also part of China’s stepped-up drive to curb speculative crypto trading, he added.
Investor protection and money laundering are particular concerns of global financial regulators who are grappling with whether and how they should regulate the cryptocurrency industry.
The latest shakeout in digital currencies also stems from tighter scrutiny in the United States. Last Thursday, U.S. Federal Reserve Chairman Jerome Powell said they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted.

21 May
Peter Berezin: The Crypto Impossibility Theorem
• The drubbing that cryptocurrencies have received over the past two weeks is just a taste of things to come.
• Crypto markets will continue to face tighter regulation, as this week’s announcements from China and the US Treasury underscore.
• The hope that cryptocurrencies can ever truly “go green” is wishful thinking. Given their decentralized nature, cryptocurrencies require real resources to be expended to permit secure transactions to take place.
• In addition to their technical limitations, cryptocurrencies face a fundamental constraint, which we dub the “Crypto Impossibility Theorem.”
• The Crypto Impossibility Theorem states that cryptocurrencies will be viable only if they offer a higher return than equities.
• The assumption that cryptos can generate a return in excess of equities is almost certain to be false since it would require that cryptocurrency holdings rise more quickly than income in perpetuity.
• In the near term, the pain in crypto markets could drag down other speculative assets such as tech stocks. In the long term, diminished investor interest in cryptos will benefit the stock market, as investor attention focuses back on equities.
Robert Reich on Facebook:
Cryptocurrencies like Bitcoin and Dogecoin are all the rage these days, bolstered in part by the incessant tweeting of Elon Musk. Before you buy, here are 4 facts you may not know:
First, their price is easily manipulated. One negative word from a self-interested billionaire like Musk and the price plunges.
Two, they can be incredibly risky investments. Some cryptocurrencies — particularly smaller “altcoins” — are just “pump and dump” schemes, where the price is artificially inflated by bad actors and leaves unwitting consumers holding worthless cryptocoins.
Three, they can enable fraud and other illicit activities. Since October, cryptocurrency scams have soared 1000 percent and Americans have lost $80 million. This month, a ransomware group extorted nearly $5 million from the Colonial Pipeline Company, forcing it to shut down the biggest fuel pipeline in the U.S. before regaining access to its systems.
Four, they use up huge amounts of energy. Electricity demand for bitcoin is outpacing electricity consumption in several countries including Argentina.

20 May
Paul Krugman: Technobabble, Libertarian Derp and Bitcoin
The story so far: Bitcoin, the first and biggest cryptocurrency, was introduced in 2009. It uses an encryption key, similar to those used in hard-to-break codes — hence the “crypto” — to establish chains of ownership in tokens that entitle their current holders to … well, ownership of those tokens. And nowadays we use Bitcoin to buy houses and cars, pay our bills, make business investments, and more.
Oh, wait. We don’t do any of those things. Twelve years on, cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear about them being used as a means of payment — as opposed to speculative trading — is in association with illegal activity, like money laundering or the Bitcoin ransom Colonial Pipeline paid to hackers who shut it down.
Twelve years is an eon in information technology time. Venmo, which I can use to share restaurant bills, buy fresh fruit at sidewalk kiosks, and much more, was also introduced in 2009. Apple unveiled its first-generation iPad in 2010. Zoom came into use in 2012. By the time a technology gets as old as cryptocurrency, we expect it either to have become part of the fabric of everyday life or to have been given up as a nonstarter.
The values of major cryptocurrencies fluctuate wildly — Bitcoin fell 30 percent Wednesday morning, then made up most of the losses that afternoon. Their collective value has, however, at times exceeded $2 trillion, more than half the value of all the intellectual property owned by U.S. business.
Why are people willing to pay large sums for assets that don’t seem to do anything? The answer, obviously, is that the prices of these assets keep going up, so that early investors made a lot of money, and their success keeps drawing in new investors.
…governments are well aware that cryptocurrencies are being used by bad actors, and may well crack down in a way they never did on gold trading. Also, the proliferation of cryptocurrencies may prevent any one of them from achieving the semi-sacred status gold holds in some people’s minds.
The good news is that none of this matters very much. Because Bitcoin and its relatives haven’t managed to achieve any meaningful economic role, what happens to their value is basically irrelevant to those of us not playing the crypto game.
Jack Dorsey Says Bitcoin Can Make the World Greener. Could He Be Right?
(New York) The day before Earth Day this year, Jack Dorsey, Twitter’s CEO, tweeted that “#bitcoin incentivizes renewable energy.” It was a counterintuitive, provocative assertion as cryptocurrency critics and environmental advocates have decried bitcoin — and were especially noisy about it that week — for using too much electricity. So it seemed exactly backward what Dorsey was saying, that bitcoin was actually positive for the environment. To support his assertion, Dorsey had shared a new white paper from Square, his other company, which argued that “Bitcoin mining presents an opportunity to accelerate the global energy transition to renewables,” and “could encourage investment in solar systems.”
Beyond the 17,500 people who liked Dorsey’s tweet, there was one particularly interesting reply: Elon Musk, the ecocentibillionaire CEO of Tesla, answered simply, “True.”

17 May
Media Advisory – Special Annual Meeting
The World Economic Forum has been preparing a Special Annual Meeting in Singapore to take place just three months from now.
Regretfully(sic), the tragic circumstances unfolding across geographies, an uncertain travel outlook, differing speeds of vaccination rollout and the uncertainty around new variants combine to make it impossible to realise a global meeting with business, government and civil society leaders from all over the world at the scale which was planned. This is despite the excellent support provided by the Government of Singapore.
The next Annual Meeting will instead take place in the first half of 2022. Final location and date will be determined based on an assessment of the situation later this summer.
Special Annual Meeting in Singapore to Take Place in August 2021

Foreign Affairs May/June
Globalization’s Coming Golden Age -Why Crisis Ends in Connection
By Harold James
Over the past two centuries, the course of trade and globalization has been shaped by how governments and people have responded to such crises. Globalization comes in cycles: periods of increasing integration are followed by shocks, crises, and destructive backlashes. After the Great Depression, the world slid into autarky, nationalism, authoritarianism, zero-sum thinking, and, ultimately, war —a series of events often presented as a grim parable of the consequences of globalization’s reversal. Yet history shows that many crises produce more, rather than less, globalization.
Modern globalization, for instance, began as a response to social and financial catastrophes in the 1840s. The most recent wave of globalization followed scarring economic disruptions in the 1970s. In both cases, shocks laid the foundation for new international connections and solutions, and the volume of world trade surged dramatically. The truth is that historic ruptures often generate and accelerate new global links. COVID-19 is no exception. After the pandemic, globalization will come roaring back.
The challenge of the new upswing in the cycle of globalization will be to find ways to learn and adapt—increasing the effectiveness of government and business—without compromising fundamental values. As in the 1840s and the 1970s, financial and monetary innovation, or the tonic of inflation, will drive transformational change. Memories of crisis will push countries and governments to adapt in 2021 and beyond, just as they have before.

9 May
As Scrutiny of Cryptocurrency Grows, the Industry Turns to K Street
Companies behind digital currencies are rushing to hire well-connected lobbyists, lawyers and consultants as the battle over how to regulate them intensifies.
Globally, the value of all outstanding cryptocurrency has jumped to about $2.4 trillion — or more than the approximately $1.2 trillion of United States currency in circulation worldwide — from about $200 billion two years ago. This is from an industry that was born only a dozen years ago, when the first cryptocurrency, Bitcoin, was introduced.
As the stakes have grown, so has the recognition that the industry’s future — at least in the United States — will be shaped in Washington, prompting the rush to scoop up well-connected advocates.

5 May
‘Joke’ Bitcoin Rival Dogecoin Found To Have ‘Remarkably Strong Fundamentals’ As The Price Hurtles Toward $1 And A $100 Billion Market Cap
(Forbes) Dogecoin, the meme-based, tongue-in-cheek bitcoin rival that’s soared by more than 20,000% over the last 12 months, is still climbing.
The dogecoin price has added 130% in the past week, taking it to highs of 69 cents, as hype builds ahead of Tesla TSLA +1.3% billionaire and dogecoin devotee Elon Musk’s planned SNL appearance. In comparison, the bitcoin price is only up a mere 500% since May 2020 and has been more-or-less trading sideways since mid-February (even as other cryptocurrencies break fresh ground).
Now, as trading platform eToro and cryptocurrency exchange Gemini add support for dogecoin, bitcoin and crypto researchers have released a report that’s found the memecoin has “remarkably strong fundamentals”—and warned dogecoin “should not be ignored.”

20 April
Global Goliaths, Multinational Corporations in the 21st Century Economy
How multinationals contribute, or don’t, to global prosperity
(Brookings) Globalization and multinational corporations have long seemed partners in the enterprise of economic growth: globalization-led prosperity was the goal, and giant corporations spanning the globe would help achieve it. In recent years, however, the notion that all economies, both developed and developing, can prosper from globalization has been called into question by political figures and has fueled a populist backlash around the world against globalization and the corporations that made it possible.
In an effort to elevate the sometimes contentious public debate over the conduct and operation of multinational corporations, this edited volume examines key questions about their role, both in their home countries and in the rest of the world where they do business. Is their multinational nature an essential driver of their profits? Do U.S. and European multinationals contribute to home country employment? Do multinational firms exploit foreign workers? How do multinationals influence foreign policy? How will the rise of the digital economy and digital trade in services affect multinationals?
In addressing these and similar questions, the book also examines the role that multinational corporations play in the outcomes that policymakers care about most: economic growth, jobs, inequality, and tax fairness.

11 April
(Foreign Affairs) Last week, the administration of President Joe Biden announced a plan to make corporations pay higher taxes. The proposal comes after years of growing concern that the clever accounting practices of big companies—including stashing profits in overseas tax havens—are denying states their fair share of taxes. Last year, the economists Joseph Stiglitz, Todd Tucker, and Gabriel Zucman noted the troubling implications of corporations evading national tax regimes. “Unchecked, these developments will concentrate wealth among a smaller and smaller number of people, while hollowing out the state institutions that provide public services to all,” they wrote.
…momentum for reform is building on both sides of the Atlantic. Klaus Schwab, the executive chair of the World Economic Forum, lamented the “deterioration of the bond between business and society” and the tax evasion that deprives governments of badly needed income. Recent events give the Biden administration and other governments the impetus for action, according to Robin Niblett and Leslie Vinjamuri: “Liberal democracies should . . . use the current fiscal stress and unprecedented government borrowing during the pandemic as an opportunity to rethink outdated national tax structures.”

7 April
G20 takes step towards global minimum corporate tax rate
Meetings of finance ministers follow change in US stance, with consensus growing on tackling tax avoidance
(The Guardian) The virtual meetings between the group of 20 major industrial nations come after the US made the case for an international base rate this week, in a move by the Biden administration to end US resistance to international tax reforms.
According to Reuters, France and Germany have signalled support for the US approach, which could after years of political wrangling pave the way for an agreement on global tax changes this summer.

6 April
IMF upgrades forecast for 2021 global growth to a record 6%
(AP) — The rollout of COVID-19 vaccines and vast sums of government aid will accelerate global economic growth to a record high this year in a powerful rebound from the pandemic recession, the International Monetary Fund says in its latest forecast.
The 190-country lending agency said Tuesday that it expects the world economy to expand 6% in 2021, up from the 5.5% it had forecast in January. It would be the fastest expansion for the global economy in IMF records dating back to 1980.
In 2022, the IMF predicts, international economic growth will decelerate to a still strong 4.4%, up from its January forecast of 4.2%.Transcript of April 2021 World Economic Outlook Press Briefing

5 April
Janet Yellen calls for global minimum corporate tax rate
(The Guardian) The treasury secretary, Janet Yellen, made the case for a global minimum corporate tax rate on Monday as the Biden administration faces opposition to its plans to raise rates on US businesses.
Yellen’s comments come as Republicans and some Democrats have pushed back on Joe Biden’s proposed $2.3tn infrastructure investment bill. The bill would be funded in part by raising rates on US business and closing loopholes that allow domestic and foreign corporations to take advantage of lower taxes overseas.
“Competitiveness is about more than how US-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen said in remarks to the Chicago Council on Global Affairs. “It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
The Organization for Economic Cooperation and Development (OECD) has been working on a new set of cross-border tax rules that would include a global minimum tax rate for multinational corporations.
Yellen warns that slow vaccine rollout in poor countries poses threat to U.S., global economies
Treasury Secretary Janet Yellen on Monday called for speeding up the distribution of the coronavirus vaccine in poorer nations, arguing the U.S. and global economies are threatened by the impact of covid-19 on the developing world.
(WaPo) While the United States and other rich countries are hoping for a return to normalcy as soon as this fall, many parts of the developing world are not on pace to have widespread vaccination of their populations until 2023 or 2024. Those countries have largely suffered more devastating economic impacts from covid, in part because they do not have the fiscal capacity to authorize the levels of emergency spending approved in the United States.
… Yellen’s remarks come at a pivotal juncture for her ambitious international agenda. In a reversal from the decision of the Trump administration, the Treasury Department under Yellen will this month authorize a new allocation of an emergency form of aid to developing nations known as “Special Drawing Rights.”

April 2021 update to TIGER: The world economy stumbles toward a two-track recovery
Brookings Editor’s Note:
In collaboration with the Financial Times (FT), Eswar Prasad of Brookings and Aryan Khanna and Darren Chang of Cornell have constructed a set of composite indexes that track the global economic recovery. The Tracking Indexes for the Global Economic Recovery (TIGER) is also featured in the Financial Times. A version of this article appears in Project Syndicate.
The Global Economy’s Uneven Recovery
While the US, China, and other leading economies are on their way to a robust recovery, many others are struggling to return to pre-pandemic GDP levels. In most regions, including Europe and Latin America, the 2020 recession will most likely leave long-lasting scars on both GDP and employment.
Eswar Prasad
(Project Syndicate) The US and China are shaping up to be the main drivers of global growth in 2021. Household consumption and business investment have surged in both economies, along with measures of private-sector confidence. Industrial production has rebounded in most countries, firming up commodity prices and international trade. Nonetheless, the US, China, India, Indonesia, and South Korea will probably be the only major economies to exceed pre-pandemic GDP levels by the end of this year. In most other regions, the 2020 recession will most likely leave longer-lasting scars on both GDP and employment.
… The world economy has thus arrived at a pivotal moment. Many countries are grappling with whether to open up their economies despite the continued spread of the virus, and whether to unleash additional macroeconomic stimulus, which could expose them to an unfavorable tradeoff between short-term benefits and longer-term vulnerabilities. Uncertainties are rife, the stakes are high, and indecisive policymaking would hurt consumer and business confidence in the weaker economies, adding to economic strains.
The recipe for a strong and durable recovery remains the same: resolute measures to control the virus, coupled with balanced monetary and fiscal stimulus and policies that both support demand and improve productivity. In economies that are recovering strongly, it would be premature to ease up in either dimension; elsewhere, policymakers will need to redouble their efforts in both.

2 April
Mohamed A. El-Erian: Ensuring a Stronger and Fairer Global Recovery
Although tough trade-offs are sometimes unavoidable, there is a way for policymakers to maintain a robust global economic recovery in 2021 and beyond while simultaneously pulling up disadvantaged countries, groups, and regions. But it will require both national and international policy adaptations. Rich nations must either help developing countries fight Covid or live in a fortress

8 March
Jim O’Neill: The Bitcoin Lottery
The sudden rise of “special purpose acquisitions companies” and cryptocurrencies speaks less to the virtues of these vehicles than to the excesses of the current bull market. In the long term, these assets will mostly fall into the same category as speculative “growth stocks” today.
(Project Syndicate) …there has long been a case to be made for creating a new world currency – or upgrading the International Monetary Fund’s reserve asset, special drawing rights – to mitigate some of the excesses associated with the dollar, euro, yen, pound, or any other national currency. For its part, China has already introduced a central bank digital currency, in the hopes of laying the foundation for a new, more stable global monetary system.But these innovations are fundamentally different from a cryptocurrency like Bitcoin. The standard economic textbook view is that for a currency to be credible, it must serve as a means of exchange, a store of value, and a unit of account. It is hard to see how a cryptocurrency could meet all three of these conditions all of the time. True, some cryptocurrencies have demonstrated an ability to perform some of these functions some of the time. But the price of Bitcoin, the canonical cryptocurrency, is so volatile that it is almost impossible to imagine it becoming a reliable store of value or means of exchange.