Wednesday, February 10, 2016
  1. The Negative Rates Club

    Daniel Gros

    The Negative Rates Club

    2

     explains why expansionary monetary policy has only a limited impact in Japan and the eurozone.

    Euro coins

    After years of quantitative easing and negative interest rates, it is becoming clear that these policies work as expected only in debtor economies, but have little effect in creditor economies. The reason is simple: creditors lose when rates go negative, and debtors gain. READ MORE

  2. China’s Exchange-Rate Trap

    Barry Eichengreen

    China’s Exchange-Rate Trap

    3

     concludes that the best of the authorities' bad options is to reimpose capital controls.

    Renminbi bank notes

    For months now, China’s exchange-rate policy has roiled global financial markets, because officials have done a poor job communicating their intentions. But criticizing Chinese policymakers is easier than offering constructive advice: In fact the authorities no longer have any good options. READ MORE

  3. What’s Holding Back the World Economy?

    Joseph E. Stiglitz, ET AL

    What’s Holding Back the World Economy?

    &  say that developed countries' policies have created a growth-killing array of perverse incentives.

    Globe

    The dominant policies pursued by developed countries during the post-crisis period – fiscal retrenchment and quantitative easing – have offered little support for household consumption, investment, and growth. On the contrary, they have tended to make matters worse. READ MORE

  4. Japan’s Wrong Way Out

    Adair Turner

    Japan’s Wrong Way Out

    12

     doubts that the recent introduction of negative interest rates will boost inflation and demand.

    Shibuya, Japan

    Financial markets were surprised by the Bank of Japan’s recent introduction of negative interest rates on certain commercial bank reserves. The problem is that neither negative interest rates nor further expansion of the BOJ’s already huge program of quantitative easing will be sufficient to offset strong deflationary forces. READ MORE

  5. The Global Economy’s New Abnormal

    Nouriel Roubini

    The Global Economy’s New Abnormal

    29

     breaks down the factors underlying the spike in market volatility since the beginning of the year.

    Globe

    Since the beginning of the year, the world economy has faced a new bout of severe financial market volatility, marked by sharply falling prices for equities and other risky assets. A variety of factors are at work – and will remain so throughout 2016 and beyond. READ MORE

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