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Kenneth Rogoff

Kenneth Rogoff

Thomas D Cabot Professor of Public Policy, Harvard University, former chief economist IMF, International Grandmaster of Chess, Latest book: The Curse of Cash

Articles by Kenneth Rogoff

China’s Housing Conundrum

28 days ago

The Chinese government may yet succeed in insulating the broader market from the financial crisis at real estate giant Evergrande. But the larger challenge is to rebalance an economy that has depended for far too long on the bloated housing market for jobs and growth.

CAMBRIDGE – The impending bankruptcy of Chinese real estate giant Evergrande, with its $300 billion in debt, has roiled global investors. Analysts have focused mainly on whether the Chinese government will succeed in ring-fencing the problem, so that it does not spill over into a broader Western-style financial crisis.
China’s Risky Business Crackdown

Qilai Shen/In Pictures via Getty Images

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Back to the Seventies?

August 31, 2021

Many economists seem to view inflation as a purely technocratic problem, and most central bankers would like to believe that. In fact, the roots of sustained inflation mainly stem from political economy problems, and here the long list of similarities between the 1970s and today is unsettling.

CAMBRIDGE – With the United States’ disastrous exit from Afghanistan, the parallels between the 2020s and the 1970s just keep growing. Has a sustained period of high inflation just become much more likely? Until recently, I would have said the odds were clearly against it. Now, I am not so sure, especially looking ahead a few years.
The AI Revolution and Strategic Competition with China

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Are Central Banks to Blame for Rising Inequality?

August 4, 2021

The view that central-bank interest-rate policy can and should be the main driving force behind greater income equality is stupefyingly naive, no matter how often it is stated. Central banks can do more to address the inequality problem, but they cannot do everything.

CAMBRIDGE – Judging by the number of times phrases such as “equitable growth” and “the distributional footprint of monetary policy” appear in central bankers’ speeches nowadays, it is clear that monetary policymakers are feeling the heat as concerns about the rise of inequality continue to grow. But is monetary policy to blame for this problem, and is it really the right tool for redistributing income?
The Dangers of Endless

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Under the Latin American Volcano

July 1, 2021

Most of Latin America is still far from the horrific conditions prevailing in Venezuela, where output has fallen by a staggering 75% since 2013. But, given the ongoing humanitarian catastrophe there, and the specter of political instability elsewhere, investors should not take a sustained economic recovery for granted.

CAMBRIDGE – The current disconnect between market calm and underlying social tensions is perhaps nowhere more acute than in Latin America. The question is how much longer this glaring dissonance can continue.
Economics Needs a Climate Revolution

Sustainability Now

Fabrice Coffrini/AFP via Getty Images

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A Curse Worse than Cash

June 4, 2021

Although prominent cryptocurrency advocates are politically connected and have democratized their base, regulators simply cannot sit on their hands forever. Malicious ransomware attacks targeting growing numbers of firms and individuals could prove to be the tipping point.

CAMBRIDGE – Ransomware – a type of malicious software that restricts access to a computer system until a ransom is paid – is not a good look for cryptocurrencies. Proponents of these digital coins would rather point to celebrity investors such as Tesla founder Elon Musk, Dallas Mavericks owner Mark Cuban, star football quarterback Tom Brady, or actress Maisie Williams (Arya in Game of Thrones). But recent ransomware attacks, and cryptocurrencies’ central role

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Helping the Other 66%

May 4, 2021

Addressing within-country inequality may be the political imperative of the moment. But tackling vastly greater cross-country disparities – especially those affecting the two-thirds of humanity living outside the advanced economies and China – is the real key to maintaining geopolitical stability in the twenty-first century.

CAMBRIDGE – What is remarkable about the increase in nationalist sentiment across the developed world in recent years is that it is occurring at a time when many of today’s most pressing challenges, including climate change and the COVID-19 pandemic, are fundamentally global problems demanding global solutions. And the anger brewing among citizens of vaccine-poor countries – basically, the two-thirds of

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The Dollar’s Fragile Hegemony

March 30, 2021

Today, it seems to be an article of faith among US policymakers and many economists that the world’s appetite for dollar debt is virtually insatiable. But a modernization of China’s exchange-rate arrangements could deal the dollar’s status a painful blow.

CAMBRIDGE – The mighty US dollar continues to reign supreme in global markets. But the greenback’s dominance may well be more fragile than it appears, because expected future changes in China’s exchange-rate regime are likely to trigger a significant shift in the international monetary order.

The End of the Oil Age

PS OnPoint

David McNew/Getty Images

The West’s Crisis of

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Are Inflation Fears Justified?

March 1, 2021

In the near term, markets should not be too worried about a possible spike in demand driving up inflation and interest rates, causing asset prices to fall across the board. But longer-term inflation risks are skewed much more to the upside than many investors and policymakers seem to realize.

CAMBRIDGE – Massive fiscal and monetary stimulus programs in the United States and other advanced economies are fueling a raging debate about whether higher inflation could be just around the corner. Ten-year US Treasury yields and mortgage rates are already climbing in anticipation that the US Federal Reserve – the de facto global central bank – will be forced to hike rates, potentially bursting asset-price bubbles around the

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The Perils of an Uneven Global Recovery

February 5, 2021

Heightened global economic risks mean that many poorer countries could take years to return to their pre-pandemic growth trajectories. And if higher inflation leads the US Federal Reserve to raise rates somewhat sooner than it currently plans, emerging markets will be hit particularly hard.

CAMBRIDGE – Economic recovery, like COVID-19 vaccines, will not be evenly distributed around the world over the coming two years. Despite enormous policy support provided by governments and central banks, the economic risks remain profound, and not just to frontier economies facing imminent debt problems and low-income countries experiencing an alarming rise in poverty. With the coronavirus far from tamed, populism rife, global

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A Fairer Way to Help Developing Economies Decarbonize

January 6, 2021

Global carbon pricing is an essential part of any long-term solution to the climate crisis. But advanced economies also need to provide the developing world with highly concessional financing and technical expertise to help it decarbonize – all guided by a World Carbon Bank.

CAMBRIDGE – With US President-elect Joe Biden’s incoming administration promising a fresh, rational approach to climate change, now is an ideal time to make the case for a World Carbon Bank that would transfer and coordinate aid and technical assistance to help developing countries decarbonize. The proposed Green New Deal in the United States and the European Commission’s European Green Deal have laudable environmental goals but are too

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Fast and Slow in “The Queen’s Gambit”

December 31, 2020

Super-fast computer programs and massive databases have had a profound impact on professional chess in recent years. But, despite the threat of cheating, the game is currently in remarkable creative and economic health – not least because it is fantastically suited to the online world.

CAMBRIDGE – In the brilliant and hugely successful 2020 Netflix miniseries The Queen’s Gambit, the chess prodigy Beth Harmon (played by Anya Taylor-Joy) polishes off her male opponents with style and speed. Because the story is set in the 1950s and 1960s, there are no cell phones, social media, or computer chess programs. Life was slower then, as it again seems to be nowadays during the pandemic.

How Might COVID-19 Change

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The Infrastructure Spending Challenge

December 7, 2020

Macroeconomists broadly agree that productive infrastructure spending is welcome after a deep recession, especially when interest rates are at record lows. But in advanced economies, any new project typically requires navigating difficult right-of-way issues, environmental concerns, and objections from apprehensive citizens.

CAMBRIDGE – Encouraging news about more effective anti-viral treatments and promising vaccines is fueling cautious optimism that rich countries, at least, could tame the COVID-19 pandemic by the end of 2021. For now, though, as a brutal second wave cascades around the world, broad and robust relief remains essential. Governments should allow public debt to rise further to mitigate the catastrophe, even if

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The Calm Before the Exchange-Rate Storm?

November 10, 2020

Core dollar exchange rates have so far been surprisingly stable during the pandemic, most likely because major central banks’ policy interest rates are effectively frozen at or near zero. But although the current stasis could last awhile, it will not last forever.

CAMBRIDGE – With alternative assets such as gold and Bitcoin thriving in the pandemic, some top economists are predicting a sharp fall in the US dollar. This could yet happen. But so far, despite inconsistent US management of the pandemic, massive deficit spending for economic catastrophe relief, and monetary easing that Federal Reserve Chair Jerome Powell says has “crossed a lot of red lines,” core dollar exchange rates have been eerily calm. Even the

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An Interview with Kenneth Rogoff

October 27, 2020

This week in Say More, PS talks with Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University.

Project Syndicate: The current disconnect between stock-market valuations and the real economy, you recently explained, is rooted in the fact that “small businesses and individual service proprietors,” rather than publicly traded companies, are bearing the brunt of the COVID-19 crisis. You also noted that, as government support lapses, many “otherwise viable businesses” will fail, “leaving large publicly traded companies with an even stronger market position.” Yet when US President Donald Trump announced that he had ended negotiations with Congress over a new stimulus bill, the stock market immediately

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The Uncertainty Pandemic

September 3, 2020

Policymakers’ most important task is to try to reduce the massive lingering uncertainty regarding COVID-19 while continuing to provide emergency relief to the hardest-hit individuals and economic sectors. But the insecurity fueled by the pandemic is likely to weigh on the global economy long after the worst is in the past.

CAMBRIDGE – The next few months will tell us a lot about the shape of the coming global recovery. Despite ebullient stock markets, uncertainty about COVID-19 remains pervasive. Regardless of the pandemic’s course, therefore, the world’s struggle with the virus so far is likely to affect growth, employment, and politics for a very long time.

The Post-Pandemic Economy’s

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COVID Coin?

August 5, 2020

The COVID-19 pandemic is accelerating the long-term shift away from cash, and monetary authorities risk falling behind. A recent report from the G30 argues that if central banks want to shape the outcome, they need to start thinking fast.

CAMBRIDGE – As the COVID-19 crisis accelerates the long-term shift away from cash (at least in tax-compliant, legal transactions), official discussions about digital currencies are heating up. Between the impending launch of Facebook’s Libra and China’s proposed central-bank digital currency, events today could reshape global finance for a generation. A recent report from the G30 argues that if central banks want to shape the outcome, they need to start moving fast.

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Will Universities Learn from Lockdowns?

July 6, 2020

The COVID-19 crisis is likely to bring about further rapid and far-reaching shifts in the economic ground beneath us. But we need not view these changes with dread if the pandemic also propels a transition to better and more universal higher education.

CAMBRIDGE – Will COVID-19 finally trigger a long-overdue technological disruption of higher education? Throughout the world, sudden mid-semester lockdowns aimed at combating the pandemic forced universities to switch to distance learning almost overnight. But while this rapid transition has been tough for faculty and students alike, some good might yet come of it.

Priorities for the COVID-19 Economy

Gav Goulder/In

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Deglobalization Will Hurt Growth Everywhere

June 3, 2020

Even if the United States turns a blind eye to deglobalization’s effects on the rest of the world, it should remember that the current abundant demand for dollar assets depends heavily on the vast trade and financial system that some American politicians aim to shrink. If deglobalization goes too far, no country will be spared.

CAMBRIDGE – The post-pandemic world economy seems likely to be a far less globalized economy, with political leaders and publics rejecting openness in a manner unlike anything seen since the tariff wars and competitive devaluations of the 1930s. And the byproduct will be not just slower growth, but a significant fall in national incomes for all but perhaps the largest and most diversified

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The Case for Deeply Negative Interest Rates

May 4, 2020

Only monetary policy addresses credit throughout the economy. Until inflation and real interest rates rise from the grave, only a policy of effective deep negative interest rates, backed up by measures to prevent cash hoarding by financial firms, can do the job.

CAMBRIDGE – For those who viewed negative interest rates as a bridge too far for central banks, it might be time to think again. Right now, in the United States, the Federal Reserve – supported both implicitly and explicitly by the Treasury – is on track to backstop virtually every private, state, and city credit in the economy. Many other governments have felt compelled to take similar steps. A once-in-a-century (we hope) crisis calls for massive government

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That 1970s Feeling

March 2, 2020

Policymakers and too many economic commentators fail to grasp how the next global recession may be unlike the last two. In contrast to recessions driven mainly by a demand shortfall, the challenge posed by a supply-side-driven downturn is that it can result in sharp drops in production, generalized shortages, and rapidly rising prices.

CAMBRIDGE – It is too soon to predict the long-run arc of the coronavirus outbreak. But it is not too soon to recognize that the next global recession could be around the corner – and that it may look a lot different from those that began in 2001 and 2008.
Solidarity Now

PS OnPoint

Spencer Platt/Getty Images

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Fantasy Fiscal Policy

February 3, 2020

Many leading central bankers now argue that, instead of just playing its traditional role of deciding the allocation of government spending, investment, taxes, and transfers, fiscal policy must substitute for monetary policy in economic fine-tuning and fighting recession. That would be a big mistake.

LONDON – Will the next recession be worse than you think? With the major central banks having little space for further interest-rate cuts, might the next cyclical downturn become a crash? In theory, fiscal policy can go far in filling the void. The past decade has seen a rise in fiscal evangelism among many economists and policymakers, and it is indeed likely that fiscal fine-tuning will be widely tested in the next downturn. Are

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The Inequality Debate We Need

January 6, 2020

The scientific evidence increasingly indicates that the world may soon reach a point of no return regarding climate change. So, rather than worrying almost exclusively about economic and political inequality, rich-country citizens need to start thinking about how to deal with global energy inequality before it’s too late.

CAMBRIDGE – While denizens of the world’s wealthiest economies debate the fate and fortune of the middle class, over 800 million people worldwide have no access to electricity. And more than two billion have no clean cooking facilities, forcing them to use toxic alternatives such as animal waste as their main cooking fuel. Furthermore, per capita carbon dioxide emissions in Europe and the United States are

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Government Debt Is Not a Free Lunch

December 6, 2019

With borrowing costs at multi-decade lows, governments seemingly can take on much more debt without any great concern about long-term consequences. But the real risks and costs of higher public borrowing may be hidden.

CAMBRIDGE – With interest rates on government debt at multi-decade lows, a number of leading economists have argued that almost every advanced economy can allow debt to drift up toward Japanese levels (over 150% of GDP even by the most conservative measure) without any great concern about long-term consequences. Advocates of much higher debt might be right, but they tend to downplay or ignore everything that can go wrong.
Mapping the Digital Economy in 2020

PS

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The High Stakes of the Coming Digital Currency War

November 11, 2019

Just as technology has disrupted media, politics, and business, it is on the verge of disrupting America’s ability to leverage faith in its currency to pursue its broader national interests. The real challenge for the United States isn’t Facebook’s proposed Libra; it’s government-backed digital currencies like the one planned by China.

SOUTH BEND – Facebook CEO Mark Zuckerberg was at least half right when he recently told the United States Congress that there is no US monopoly on regulation of next-generation payments technology. You may not like Facebook’s proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and

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How to Support Developing Countries in Energy Transition

October 11, 2019

Despite the severity of the climate-change crisis, much of the debate in advanced economies is entirely inward-looking, without recognizing that the real growth in carbon dioxide emissions is coming from emerging Asia. In fact, Asia already accounts for a higher share of global emissions than the United States and Europe combined.

CAMBRIDGE – Barring the discovery of a substance like vibranium (the fictional metal in the Marvel Comics universe that can absorb and release large amounts of kinetic energy), the earth is set to experience a sharp rise in global temperatures by the end of this century. Given the severity of the crisis, it is remarkable how much of the debate in advanced economies is entirely

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The IMF After Argentina

October 2, 2019

It’s high time to ask how to refocus the International Monetary Fund’s mandate for dealing with emerging-market debt crises. How can the IMF be effective in helping countries regain access to private credit markets when any attempt to close unsustainable budget deficits is labeled austerity?

CAMBRIDGE – In case you blinked, the Argentine government built up a pile of debt out of almost nothing with surprising speed, and then proceeded to default on it almost as quickly. Compared to the country’s slow-motion 2002 default, the latest crisis feels like 60-second Shakespeare. But in both cases, default was inevitable, because the country’s mix of debt, deficits, and monetary policy was unsustainable, and the political

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The Benefits of a Progressive Consumption Tax

September 3, 2019

Many economists already favor a consumption-based tax system for raising revenue on grounds of efficiency and simplicity. In an environment where wealth inequality is rising inexorably, the case for doing so has become increasingly compelling.

CAMBRIDGE – Is it time for the United States to consider switching from income tax to a progressive consumption tax as a way of addressing growing wealth inequality? Many economists have long favored a consumption-based tax system for raising revenue on the grounds of efficiency and simplicity. However, despite occasional vocal adherents, it has never gained political traction. Is it time to think again?
The Trump Narrative and the Next

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What About Rochester?

August 1, 2019

There is much to be celebrated in the rise of modern megacities, especially in developing countries. But if the trend persists in advanced economies, which is by no means certain, greater public and private innovation will be required to strike a better regional growth balance.

SANTIAGO – The rise of megacities as centers of strong job creation is one of the defining characteristics of the twenty-first-century global economy. But it is not always a positive feature.
What’s Next for China’s Political Economy?

PS OnPoint

Thomas Peter/AFP/Getty Images

Their Faintest Hour

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The Case for a World Carbon Bank

July 8, 2019

To the dismay of many energy experts, the World Bank recently rather capriciously decided to stop funding virtually all new fossil-fuel plants. But phasing out readily available coal is a move that most major developing countries simply cannot afford without adequate incentives.

CAMBRIDGE – Although much derided by climate-change deniers, not least US President Donald Trump, Alexandria Ocasio-Cortez’s Green New Deal hits the nail on the head with its urgent call for the United States to lead by example on global warming. But the sad truth is that, for all the needless waste produced by American’s gluttonous culture, emerging Asia is by far the main driver of the world’s growing carbon dioxide emissions.

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As Populists Rise, Latin America’s Economies Will Fall

June 5, 2019

In the space of a year, populists with autocratic tendencies have taken office in Mexico and Brazil, and laid the groundwork to return to power in Argentina. With the three largest economies in Latin America destined for further mismanagement, the prospects for growth in the region are dim.

LONDON – Though US President Donald Trump tends to grab most of the headlines, he is hardly a global exception. Populist autocrats have enjoyed a breathtaking rise to power in countries around the world, and nowhere is the trend more pronounced than in Latin America following the elections of Mexico’s leftist president, Andrés Manuel López Obrador (AMLO), and Brazil’s right-wing president, Jair Bolsonaro.

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