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Infrastructure, Secular Stagnation, and the Waiting for Godot Economy

Monday, 25 May 2015
blog
A previous post, here, highlighted the very low interest rates that prevail in the “waiting for Godot” global economy. These rates may reflect a post-crisis, paradox of thrift economy, with uncertainty about the future raising savings, driving interest rates down, and retarding investment. Historically low interest rates are indicative of savings in excess of investment. If the global economy was at or above full employment, we could be reasonably confident in saying that the problem was too much investment; with the global continuing to labour under a chronic insufficient global aggregate demand, the problem may be too little investment.

Sequencing RMB Internationalization

Monday, 25 May 2015
publication
Renminbi (RMB) internationalization will entail a series of steps that will have to be implemented over time. This paper asks how the process of RMB internationalization will unfold. It analyzes in what order those steps should be taken and how they should be related to one another.

Global Recovery: Waiting for Godot?

Thursday, 21 May 2015
blog
Three years on, IMF Managing Director Christine Lagarde describes the outlook for global growth as the “new mediocre.” Larry Summers, meanwhile, warns of secular stagnation. And, while scholars debate the validity of the secular stagnation hypothesis, it is pretty hard to deny that the current recovery is the worst on record in the post-war period.

Domestic Sources and RMB Internationalization: A Unique Journey to a Major Global Currency

Tuesday, 12 May 2015
publication
This paper is based on literature reviews on the concept of an international currency and its economic and political determinants, as well as China’s motivation for renminbi (RMB) internationalization by both Chinese and foreign scholars.

Moving on with or without Washington

Monday, 20 April 2015
blog
Some who spend time thinking about global governance would merge the G20 and the IMFC, the slightly larger steering committee of the IMF. On the weekend, this happened, if fleetingly, as finance ministers and central bankers from the two bodies met jointly to debate how to end the impasse over IMF reform.

The Sweet Breath of Justice

Thursday, 16 April 2015
blog
By September 1945, the war in Europe was over and Japan had surrendered. And, suddenly, the U.S. ended Lend Lease—the program that for five years had provided assistance to the allies fighting alongside the U.S., principally the Soviet Union and the U.K. The abrupt termination of Lend Lease came as a shock to the U.K. Government and especially to John Maynard Keynes, who had worked tirelessly with the Americans to develop "rules of the games" for the post-war economy, securing agreement a year earlier at Bretton Woods, New Hampshire.

The IMF’s Ukraine Burden

Tuesday, 14 April 2015
publication
The International Monetary Fund has raised red flags on the risks for its financial position from its latest loan to Ukraine. The significant expansion of the Fund’s exposure to Ukraine approved by the executive board in March begs a central question about the size of the lending operation and the program of policies it supports: is the IMF equipped to take on the risk of such a large commitment of resources with questionable prospects for success to a country in conflict with questionable prospects for economic success?

Sovereign Debt Restructuring: Issues Paper

Thursday, 9 April 2015
publication
This paper provides an overview of the main issues, debates and policy proposals that surround sovereign debt restructuring.

International Regulatory Cooperation on the Resolution of Financial Institutions: Where Does India Stand?

Wednesday, 8 April 2015
publication
Renuka Sane
The 2008 financial crisis led to the renewed realization that close linkages between financial firms can also cause large-scale disruption when financial firms fail. This paper provides a brief description of the principles of cross-border resolution that have emerged since 2008 and an overview of developments on resolution of financial firms in India. The policy choices of India may be reflective of the thinking in a large number of emerging markets, which lag considerably behind more developed markets.

Laid Low: The IMF, the Euro Zone and the First Rescue of Greece

Tuesday, 7 April 2015
publication
This paper tells the story of the first Greek rescue, focusing on the role played by the International Monetary Fund (IMF), and based on interviews with dozens of key participants as well as both public and private IMF documents. A detailed look back at this drama elucidates significant concerns about the Fund’s governance and its management of future crises.
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