Climate Change: Three Reasons for Central Banks to Engage
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Trump Tariffs Have Hurt U.S. Manufacturing Jobs
The hike in tariffs imposed by the United States against its major trading partners since early 2018 has been unprecedented in recent history. President Trump alluded to, among others, the goal of revitalizing jobs in the country’s manufacturing industry by protecting it from unfair trade practices of other countries, particularly China. However, according to a study by two Federal Reserve Bank staff – Aaron Flaaen and Justin Pierce – released last December 23, the effect so far has been just the opposite, i.e. a reduction in U.S. manufacturing employment!
The IMF, Argentina and Ecuador: Have Lessons Been Learned?
Following the global financial crisis of 2007-08, the International Monetary Fund (IMF) went through a period of self-examination. The old joke that its acronym stood for “It’s Mostly Fiscal” bothered some of its leaders, who believed the organization needed to focus less on austerity and more thoroughly consider issues such as inequality, poverty reduction and gender equality when making loans and other key decisions. There was talk of a “new IMF” that had learned from its old mistakes.
The US-China Trade War Is Accelerating China’s Rebalancing
The Trump government has been imposing restrictions on access to technologies by Chinese telecommunications firms. Why and what are the consequences?
The Federal Communications Commission is about to ban carriers from using government funds to buy equipment from Huawei and ZTE. Other government agencies are expected to take similar measures.
Latin America Is Not Benefiting from the U.S.-China Trade War
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Despite some short-term benefits, trade deviation to the region shouldn’t be expected to last.
Has the U.S. trade war with China been good for Latin America?
An increase in Chinese demand for primary products from the region, as well as recent news of production transfers from China to Mexico, might give the impression that it has.
But any positive short-term effects of the confrontation should also take into account its negative medium- and long-term impacts on the region and on global growth. And the fact is that the overall trade and GDP destruction effects of trade wars tend to outweigh gains from shifts in trade activity.
Fed Monetary Policy, Inverted Yield Curve and Outlook for US and Global Economy
Since the Fed’s July meeting, when the Fed Funds Rate had a 0.25% cut, fears about the impact of the US-China trade war on the global economy have escalated. The US yield curve inversion received much attention as a harbinger of a slowdown in the global and US economic outlooks. We approach here whether lights on next monetary policy events can be obtained from reading the minutes of the Fed’s meeting – and of the July meeting of the ECB governing council – released this week.
Argentina’s Half-Baked Adjustment Has Not Worked
Argentina’s peso tumbled and stocks plunged after last Sunday’s primary elections. The perception of a likely victory of President Macri’s opponents – Alberto Fernandez, and running mate, Christina Fernandez de Kirchner - has sparked a new shift in investor preferences away from peso assets, pressures on the exchange rate, and hikes on sovereign spreads.
Brazil must hold to structural reforms while undergoing slow economic recovery
Brazil's economic recovery after the deep 2015-16 recession has been the slowest on record, with GDP per capita last year remaining more than 9% below its pre-crisis peak (Chart 1, right side). The IMF's annual report on the country's economy, released two weeks ago, estimated current GDP to be nearly 4% below its potential level, which suggests insufficiency of aggregate demand (Chart 1, left side). On the other hand, as the slow recovery reflects structural factors, it is necessary to avoid the use of measures to reinforce such demand that might run against the confrontation of such problems.