Will China Surpass the U.S. to Become the Number One Economic Power?
Hengzhong Liu
June 18, 2022
China is likely to surpass the United States in GDP size within the next decade despite deglobalization pressures, supported by its vast domestic market, urbanization potential, and high savings. However, economic size alone does not equal economic power. Lower income levels, reliance on imported energy, limited reserve-currency status, and technological gaps mean China is unlikely to overtake the U.S. as the world’s leading economic power in the foreseeable future.
A Primer on Covid-19 and its Impact on the Supply Chains in China
Zhio Xi
April 30, 2021
The Covid-19 pandemic delivered a sharp but temporary shock to China’s supply chains, particularly in electronics, textiles, and other intermediate-goods industries closely tied to global demand. While exports and manufacturing activity initially collapsed, rapid virus containment helped production rebound. The crisis highlighted the need to balance efficiency with resilience, pushing firms and policymakers toward diversification, innovation, and a more quality-driven role for China in global supply chains.
The Pandemic and the Emerging Markets Crisis: How Fragile are the Economies?
Utku Demir and Merih Uctum
June 11, 2020
Emerging market economies have been struck by a rare quadruple shock—pandemic disruption, capital flight, recession, and mounting debt—triggering record outflows and sharp currency depreciations. This article examines why renewed “sudden stops” have resurfaced despite past financial reforms, highlighting reserve adequacy, investor behavior, and public health capacity as key factors shaping default risk and recovery prospects.
Lessons from Taiwan’s Healthcare Reform
William B. Thorne
November 27, 2019
Taiwan’s 1995 shift to a single-payer National Health Insurance system dramatically expanded coverage and reduced costs. Using a synthetic control method, this post shows that Taiwan’s life expectancy rose significantly faster than comparable countries after reform, suggesting the overhaul produced real health gains and offers lessons for U.S. healthcare reform.
Unconventional Monetary Policies Become Conventional After All?
Fotios Siokis
October 21, 2019
The ECB introduced new unconventional monetary measures in September 2019 to counter persistent low inflation and weak growth. With rates at the zero lower bound, tools such as negative deposit rates, forward guidance, renewed quantitative easing, and targeted long-term loans aim to boost lending and inflation, though risks to banks and financial stability remain.
Trump’s Trade Quagmire
Paul Krugman
August 30, 2019
Krugman argues that Trump’s trade war has become a policy quagmire: tariffs are large and economically damaging but fail to reduce the trade deficit or force Chinese concessions. With limited help from the Fed, escalation risks retaliation, currency conflict, and significant harm to the U.S. and global economy.
U.S. – China Trade Conflict: Impacts on China
Zhuo Xi
July 23, 2019
This article examines whether the U.S.–China trade war has materially affected China’s economy. While tariffs have slowed growth and pressured markets, their direct macroeconomic impact remains limited so far due to China’s reduced reliance on exports, controlled currency depreciation, and domestically held debt. Risks persist for stocks, supply chains, and long-term growth.
Measuring Inequality… Are we doing it right?
Andreas Kakolyris
April 01, 2019
Traditional indicators like GDP and the Gini coefficient only partially capture rising inequality. Drawing on Tony Atkinson’s work, this article argues for alternative and multidimensional measures that better reflect well-being, risk, and social mobility. Such measures can improve public debate and help policymakers address inequality more effectively.
The Sword of Damocles (Part II): The Precariousness of the Greek Banking System during the Great Sovereign Debt Crisis
Fotios Siokis
March 04, 2019
Greek banks remain unable to support economic recovery despite massive liquidity support and recapitalizations. Credit growth is constrained by an exceptionally high stock of non-performing loans—over 45% of total loans—which has made banks risk-averse and reduced lending to firms, especially SMEs. Clearing bad loans is essential to restore credit and growth.
The Sword of Damocles (Part I): The Precariousness of the Greek Banking System During the Great Sovereign Debt Crisis
Fotios Siokis
February 19, 2019
Despite Greece’s exit from its bailout program, banks remain too weak to support economic growth. Burdened by non-performing loans near 45% of total lending and heavy losses from the sovereign debt restructuring, Greek banks required repeated recapitalizations and consolidation. Although capital ratios improved, lending to the private sector remains constrained.
Argentina’s Latest Crisis
Meng-Ting Chen and Joseph van der Naald
November 16, 2018
After a sharp peso collapse, soaring inflation, and interest rates near 60 percent, Argentina entered a familiar crisis pattern. Heavy dollar-denominated debt, chronic deficits, and fragile investor confidence left the economy exposed as global conditions tightened. An IMF bailout and tough fiscal and monetary measures have stabilized markets for now, but recession risks and external pressures continue.
The Turkish Currency and Debt Crises
Merih Uctum and Zhuo Xi
September 22, 2018
The sharp collapse of Turkey’s lira in August exposed vulnerabilities beneath years of strong growth. Heavy private-sector foreign borrowing, rising global interest rates, and political tensions triggered a classic emerging-market currency crisis. Surging inflation, mounting debt burdens, and wavering confidence now threaten growth, raising concerns about contagion to other economies and to international banks.
The Welfare State in the Age of Globalization
Branko Milanovic
March 05, 2018
The modern welfare state is strained by the forces that once lay beyond its design. Built on shared risks and broad participation, it now confronts rising inequality, social polarization, and large-scale migration that weaken solidarity and mass coverage. Globalization challenges the fiscal and political foundations of redistribution, raising difficult questions about sustainability and reform in advanced economies.
Why 20th Century Tools Cannot Be Used to Address 21st Century Income Inequality
Branko Milanovic
February 16, 2018
The tools that once reduced inequality—strong unions, mass education, and expansive tax-and-transfer systems—no longer deliver the same results in today’s globalized economy. Structural changes in labor markets and politics limit their effectiveness. A more durable response, the argument suggests, lies in reshaping capitalism itself through broader ownership of capital and more equal returns to skills.
A Primer on Rules of Origin in NAFTA Negotiations and What Is Next
Richard J. Nugent III
December 22, 2017
Stalled NAFTA renegotiations have put rules of origin at the center of debate, especially for autos. Tighter content requirements aim to prevent trade deflection but risk disrupting global supply chains. While ROO can protect regional production, more restrictive rules could raise costs, distort trade flows, and threaten the viability of the agreement itself.
Greek Debt in Historical Perspective: An Opinion Article
Anthony Rodolakis
November 22, 2017
Warnings that rising U.S. debt could mirror Greece’s crisis overlook critical historical differences. Greece’s experience reflects a long pattern of borrowing, default, and weak fiscal institutions shaped by war, politics, and external financing. Tracing two centuries of debt accumulation shows that today’s Greek crisis stems from structural and historical forces—not simply high debt levels alone.
Technical Note: Federal Funds Rate Hike and Sovereign Risk in Latin America
We conduct a country-by-country time series analysis of the government reaction function using impulse response of the country risk (Measured by the EMBIG) to an increase in de Federal Funds Rate.
Federal Funds Rate Hike and Sovereign Risk in Latin America
Miguel Acosta-Henao
August 31, 2017
As the Federal Reserve begins raising interest rates, memories of past turmoil in Latin America resurface. Although the region is better prepared than in the 1980s, higher U.S. rates still elevate sovereign risk through capital outflows and currency depreciation. Empirical evidence suggests that without stronger institutions and reforms, Fed tightening could again weigh heavily on growth.
A Finger Exercise on Hyperglobalization
Paul Krugman
July 11, 2017
The surge in global trade after 1990 was driven less by tariffs than by falling transport costs and the rise of global value chains. Small reductions in trade barriers dramatically reshaped where production occurred by making cross-border assembly viable. This “hyperglobalization” fueled rapid trade growth—but its effects increasingly look like a one-time shift rather than a continuing trend.
The United States, Mexico, and NAFTA
The Economic Studies Group
June 28, 2017
U.S.–Mexico trade has expanded dramatically since NAFTA, with growth driven less by finished goods than by deeply integrated supply chains in autos, electronics, and other manufacturing sectors. Alongside these intra-industry flows, the U.S. runs a services surplus and engages in complementary agricultural trade. The evidence suggests that renegotiation risks disrupting established production networks whose benefits and costs vary sharply across industries and states.