Project Syndicate - 6 Jun 2018
The Harvard economist thinks that a full-blown global debt crisis is unlikely to erupt. In his opinion, the recent softening of European performance is a concern, but the overall global economic picture remains strong. Although it is true that several emerging-market firms have piled up worrisome quantities of dollar-denominated external debt, many foreign central banks are brimming with dollar assets, especially in Asia. The most important reason for optimism is that global long-term real interest rates are still extremely low (reads in 6-7 min).
Published in Weekly selection 9 June 2018
Prospect Magazine - 24 May 2018
Emerging markets were the future once, but since February they’ve run into a bit of a brick wall. The proximate cause for concern is their currencies - often a sign of other problems. The Turkish lira and the Argentine peso have been hit the hardest – both countries have balance of payments deficits of around 5% of GDP – an imbalance usually associated with financing problems. More generally, there are two main clouds hanging over emerging markets: China’s growth slowing down and US monetary tightening (reads in 6-8 min).
Published in Weekly selection 26 May 2018
Project Syndicate - 14 May 2018
The recent appreciation of the USD is likely to accelerate because both monetary-policy and growth differentials now favor the US. In that sense, the USD appreciation may be seen as consistent with a longer-term rebalancing of the global economy; but as Argentina’s recent request for IMF financing starkly demonstrates, a sharp and sudden dollar appreciation risks unbalancing things elsewhere. Emerging markets are particularly vulnerable (reads in 7-9 min).
Published in Weekly selection 18 May 2018