Trump and the Global Economic Risk Picture
NEW YORK – We have entered a period of intensifying geopolitical rivalries and conflicts. Russia’s war on Ukraine is now in its third year; the Israel-Hamas conflict could still become a regional war; and the deepening cold war between the United States and China may yet turn hot over Taiwan sometime this decade. If Donald […]
China Confronts the Middle-Income Trap
NEW YORK – At this year’s China Development Forum (the highest-level annual meeting between senior Chinese policymakers and top CEOs, current and former policymakers, and academics like me), the discussion focused squarely on the risk of China falling into the dreaded “middle-income trap.” After all, few emerging economies have successfully joined the ranks of high-income […]
Would the French Far Right Moderate Once in Power?
PARIS – Following a trip to Paris in late 2022, I wrote a controversial research note pushing back against the conventional wisdom of the time. Following his re-election earlier that year, French President Emmanuel Macron, I argued, would continue to rule like Napoleon, hubristically enacting prudent but unpopular reforms by decree, rather than by securing parliamentary majorities. I […]
The US Treasury’s Backdoor Stimulus Is Hampering the Fed
NEW YORK – The US Federal Reserve has moved mountains to control inflation, which in July fell below 3% for the first time since 2021. Unfortunately, the Fed finds itself working at cross purposes with the US Treasury, whose debt-issuance strategy has been providing backdoor interest-rate cuts, keeping inflation above the Fed’s target range. By shortening its […]
Kamala Harris’s Economic Priorities
NEW YORK – With polls suggesting that Kamala Harris has at least a 50% chance of winning next month’s US presidential election, questions about her economic-policy agenda have come to the fore. Of course, much will also depend on down-ballot outcomes. If the Democrats were to win the White House and both houses of Congress, they could […]
Israel and Iran Are Likely to Escalate
NEW YORK – The conventional wisdom following Israel’s recent strikes on Iranian military facilities in retaliation for Iran’s ballistic missile attack on Israel is that the risk of further escalation has been contained. Initial statements from the Islamic Republic’s supreme leader suggested that Iran may not respond further, and financial markets seemed to agree, with oil prices falling 5% […]
The Good, the Bad, and the Uncertainty of the Trump Economy
NEW YORK – What impact will the next US administration have on economic growth and inflation? The answer is not yet clear, because while some of President-elect Donald Trump’s proposed policies would boost growth and reduce inflation over time, others will have the opposite effect. On the positive side of the ledger, Trump will be […]
Toward a North American Economic Union
NEW YORK – Trade and political tensions between the United States and its immediate neighbors, Canada and Mexico, are at historic highs, raising fears of a full-scale trade war and a collapse of the US-Mexico-Canada Agreement (USMCA), which itself was a renegotiation of the North American Free Trade Agreement. The way President Donald Trump tells […]
America’s Economic Tailwinds Will Override Trump and His Tariffs
NEW YORK – Last December, I argued that while some of US President Donald Trump’s policies would be stagflationary (reducing growth and raising inflation), such effects would ultimately be mitigated by four factors: market discipline, an independent US Federal Reserve, the president’s own advisers, and the Republicans’ thin majorities in Congress. The script has played out as […]
Market Discipline Will Prevail in the US
NEW YORK – Since US President Donald Trump’s election last year, I have argued that at least some of his policies will lead to higher growth and lower inflation over time. This applies to his support for tech-industry innovation, deregulation, lower tax rates on labor and corporations, enhanced energy production, and cuts to wasteful public spending. Trump’s […]