Brazil’s economy is notorious for its voo de galinha: brief bursts of growth followed by a return to earth. Lula’s re-election raises a familiar question: Will Brazil adjust its public finances voluntarily or wait for markets to force its hand? My latest from @ProSyn prosyn.org/0xe41Yx
Today’s Europe was forged in the crises of 2012. France may now test the architecture that emerged from them.
bruegel.org/analysis/ahead-p…
My latest from Bruegel on what's driving the move higher in long-term interest rates. This is a global story, with different drivers over different horizons but all pushing in the same direction for rates.
bruegel.org/analysis/what-dr…
In my latest @ProSyn: why China chooses self-harm…deflation, overcapacity and the subsidy of a weak renminbi. The currency is a price, not a symptom, which is why @Brad_Setser and @ShahinVallee are right that a conditional tariff threat can force reform. project-syndicate.org/commen…
Unless Hungary addresses its very low potential growth and the fiscal rigidities bequeathed by the Orban government, the path to the euro is likely to be much bumpier than any other prior entrant.
Hungary’s Real Economic Test by Gene Frieda @ProSyn
Europe's defence problem isn't a lack of capital; it's a lack of common demand. Subsidise supply without fixing demand and you risk financing more fragmentation. My latest @Bruegel_org piece argues that a defence bank is not enough: Europe needs a demand-led procurement institution to turn the NATO 5% pledge into real military capability. bruegel.org/first-glance/eur…
My first Bruegel working paper is out!
Not a call for treasury-central bank accords, but better to think through the undesirable before it becomes unavoidable.
When an oil shock hits, inflation is already too high, and debt is already binding: what should policy do first? The answer isn't "monetary vs fiscal." It's sequencing.
Where coordination is feasible, it must be pre-committed, conditional, and bounded by a published exit rule. Without that, procyclical adjustment, the EM sudden-stop playbook, becomes the default. bruegel.org/working-paper/wh…
Policymakers vs. the Iran War Shock by Gene Frieda @ProSyn?referral=1e5fee prosyn.org/iioM97j
project-syndicate.org/commen…
The economic consequences of Ukraine peace seem clear. 1919’s consequences stemmed from convenient ignorance. Today’s stem from a lack of systemic counterbalances. It’s much harder today to prescribe solutions (except “please don’t do this”).
Gene Frieda retweeted
The bond market’s reaction to the British government’s first budget underscores the complex challenges governments face in balancing large fiscal deficits with rising social, environmental, and geopolitical pressures, writes @PIMCO’s @genefrieda. bit.ly/3YNJere
Congratulations to this year's Nobel Prize in Economics recipients. Double congrats to @ProSyn for bringing contemporary views of 53 past and countless future Nobel prize winners to readers in over 500 newspapers globally. Big ideas rest on broad shoulders.
Emerging markets has become a redundant term on.ft.com/3TxMsxc
An inconvenient truth: Emerging markets have not emerged. But the asset class could participate in the broader cycle of flows to risky assets with a few easy tweaks to the way in which the asset class is sold.
Gene Frieda retweeted
In light of the threat posed by climate change, one could argue that modestly higher inflation is the cost of achieving a green transition. But that is not necessarily the case, writes @PIMCO’s @genefrieda. bit.ly/3OcqVsd
Is the Pound Close to the Breaking Point? by Gene Frieda - Project Syndicate project-syndicate.org/commen…
Gene Frieda retweeted
A scenario in which the dollar’s continued global dominance is upended looks less remote than it did five years ago, says @genefrieda. But don't bet on it happening anytime soon. project-syndicate.org/commen…
Gene Frieda retweeted
** MMT is the new supply-side economics
Forty years ago, some economists started from an uncontroversial (but important) result: a lower tax rate raises the tax base, so revenues won't fall as much. But then they ran with it, predicting tax rate cuts could raise revenues.
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China’s Difficult Balancing Act by Gene Frieda - Project Syndicate project-syndicate.org/commen…
These aren’t your father’s emerging markets. Squaring cheap EMs with shrinking global liquidity. pimco.com/en-us/insights/vie…