Category Full Posts

Competition Challenges in the Digital Economy

From Brookings (with Nirav Patel): Slow productivity growth and rising income inequality have shaped the world economy in a time of rapid technological change. A variety of explanations have emerged to help us understand these related trends, but one overarching theme is the decline in competition. The combination of increasingly concentrated markets, rising market power of large firms, and […]

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Fed Policy in a Diverging World

On rare occasion does the Federal Reserve cite international developments as a major factor in its domestic policy decisions, but that is precisely what happened this September. Despite a strengthening U.S. labor market and an increase in the Fed’s own projection for U.S. growth next year, the Fed decided to delay its much anticipated lift-off […]

Introduction: The Global Economy Can Hold the US Back

This is the first post in a series on how a weaker global economy can threaten the recovery that is underway in the US. This post provides an introduction to the series and is followed by three more posts, divided as Parts I, II and III. Part I delves into the drivers of growth in […]

Part I: A Stronger US in A Weaker Global Economy

This is the second post in a series on how a weaker global economy can threaten the strengthening recovery in the US. The first post in the series is the introduction, which is followed by three parts. This post, Part I, delves into the drivers of growth in the US and in the rest of […]

Part II: The Rise of the Dollar and the US Trade Balance

This is the third post in a series on how a weaker global economy can threaten the strengthening recovery in the US. The first post in the series is the introduction, which is followed by three parts. Part I, delves into the drivers of growth in the US and in the rest of the world. […]

Part III: The Quest for Demand and the US Consumer

This is the final post in a series on how a weaker global economy can threaten the strengthening recovery in the US. The first post in the series is the introduction, which is followed by three parts. Part I, delves into the drivers of growth in the US and in the rest of the world. […]

Guest post: Russia, Left in the Ruble

by Mike Azar With the Russian currency (the ruble) plummeting and borrowing costs shooting higher, Russia is on the edge of a full-blown financial crisis.  In the last three months, the ruble has lost nearly 50 percent of its value against the dollar, as the price of Brent crude oil (a key oil price benchmark) […]

Inflation: Slowly Rising Prices Can Be a Bad Thing

It is important that prices don’t rise too fast when times are good or too slow when times are bad. The latter is the current situation in some key advanced economies, with low and falling inflation emerging as the most serious obstacle for a return to full employment and a durable economic recovery. Weak demand […]

Is China Serious About Liberalizing the Renminbi?

**This article originally appears here in the Financial Times online blog ‘Beyondbrics’ and refers to the interactive China Currency Tracker.  Both are featured in the Financial Times Special Report: The Future of the Renminbi.** By Eswar Prasad, Karim Foda, and Abhinav Rangarajan September 30, 2014 China is making steady progress on its path to making the renminbi an […]

China Is Not On Top, Yet

For the first time in history, the largest economy in the world will be poor.  Last week, the World Bank revealed that prices in developing countries are much lower than we previously thought, implying that the purchasing power of citizens in those countries is stronger.  Taking this into account, new estimates of GDP at purchasing […]

Of Global Interest

The persistent decline of global real interest rates since the 1980’s has been puzzling.  Public debt in advanced economies is approaching record highs, yet borrowing costs have continued to decline.  The good news is that a low interest rate improves fiscal sustainability for governments trying to improve their fiscal positions. The bad news is that […]

(un)Employment in the U.S.

The unemployment rate in the U.S. has been steadily declining since it hit 10 percent in October 2009.  Four and a half years of steady and consistent improvement in the unemployment rate, however, has convinced neither policymakers nor the public that the American labor market is on track for a comeback.  At the end of […]

Driving Growth to Catch Up

Any casual observer of the world’s state of affairs knows that advanced economies have been in trouble and emerging markets and China in particular have been important drivers of global economic growth.  Despite concerns of “emerging market turmoil” over the last couple months, there has been a sense of unease and fear in advanced economies […]

Say What?

The right to express oneself freely and without judgment or fear is at the core of a prosperous and stable society.  No other right occupies this absolute core than the right to free speech and expression – the core of the core, if you will.  The right to freedom of religion, thought, movement, assembly, and […]

In Defense of Politics

Last night, re-elected President Obama put into words a defense for a true and vital attribute of democracy: politics.  He spoke of how cynics “tell us that politics is nothing more than a contest of egos or the domain of special interests”, yet people in various corners of the world are risking their lives “just […]

Bigger than Policy, Bigger than Religion

Peace, tolerance, compassion, forgiveness.  All religions and faiths are based on these basic moral standards.  When I heard yesterday and today about some self-proclaimed religious groups in Libya and in Egypt attacking the embassies of the United States in response to an amateur film made by some bigots somewhere in the U.S., I find myself […]

Buying Time by Buying Bonds

Note: This article originally appears at and belongs to The Brookings Institution. By Kemal Derviş, Galip Kemal Özhan and Karim Foda On Thursday, European Central Bank President Mario Draghi outlined a framework for a bond buying program to stabilize financial markets as policymakers tackle the underlying national and eurozone structural reforms that are necessary to […]

A Vision For Egypt?

Beginning in late January of last year, the soul of an entire population believed in its strength.  Hardly possible by individuals but righteously achievable among peoples, a symbol of all that is wrong with society in Egypt was defeated.  The belief that Egyptians have what it takes to build a better country and the determination […]

Euro Area Saved – For a Short Moment

Today, markets rallied.  Financial markets around the world let loose a big sigh of relief as the President of European Central Bank (ECB), Mario Draghi, said today at a conference in London that he is ready to do “whatever it takes” to support the euro.  People have been wondering whether or not the ECB would do […]

A Vicious Cycle in the Euro Area

One day, markets are up immediately after some EU summit but back down again just hours later.  Another day, Spain asks for a bailout because its banks have reached the point where they might fail, all while Greek voters are hitting the streets to protest drastic spending cuts and austerity measures that are meant to […]