International Economics

Jason DeParle discusses the increasingly complex global migration system and its effects on different facets of economic life in the 21st century.

Over the past decade, in an effort to boost their respective economies in a world where interest rates had reached their zero bound, the world’s major central banks engaged in a massive amount of bond buying. In the process, they managed to seriously distort credit markets by forcing down interest rates to levels that did not adequately compensate lenders for the risk that the creditor might default.

Most “experts” dismissed candidate Trump’s strategy right up to election night. They got burned. On China, the president looks like he’s dismissing candidate Trump’s strategy, too. It may get unpleasantly hot in the White House in 2020.

After having imposed retaliatory tariffs on each other, the US and China have agreed to resume trade negotiations. Experts discuss the trade and tariff war and the effects on trade flows.

US President Donald Trump speaks during a news conference in Osaka, Japan Jacquelyn Martin/Pool via REUTERS

President Trump clearly would like to have a weak dollar in order to level the international playing field and give a boost to US exporters.

Managing Director of the International Monetary Fund (IMF) Christine Lagarde is greeted by Japan's Prime Minister Shinzo Abe at the G20 leaders summit in Osaka, Japan, REUTERS/Kevin Lamarque

It is hoped the United Kingdom will somehow avoid a hard Brexit, Italy’s populist government will get its act together, and Trump will refrain from imposing his threatened import tariff on European automobiles. However, Madame Lagarde would be ill-advised to count on such good fortune.

China’s global business footprint is dramatically shrinking, according to new data released in the China Global Investment Tracker. AEI’s Derek Scissors explains that China’s investment and construction around the world plunged in the first half of 2019 and is unlikely to return to 2016-17 levels in the foreseeable future.

Inaugurated in 2005, the China Global Investment Tracker now includes 3200 large transactions across energy, transportation, real estate, and other industries, as well as nearly 300 troubled transactions.

US President Donald Trump awaits the arrival of Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani at the White House in Washington, US REUTERS/Carlos Barria

The Trump administration is not known for introspection or for drawing the right lessons from past economic policy disappointments. We should therefore reconcile ourselves to the dismal prospect of having to live with growing twin budget and trade deficit problems.

Considering that the bond market has generally been a better economic forecaster than the stock market, economic policymakers would be well advised to pay close attention to what the US and global government bond markets are trying to tell them.

The policy is a political nonstarter, and it wouldn’t do much anyway.

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