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Robert Barro’s Tax-Reform Advocacy: A Response

Robert Barro is a serious and careful economist, but he makes errors in modeling the actual provisions of the Republican tax plan, and he chooses parameters that distort his conclusions substantially upward. Instead of using his insights to defend and promote the GOP tax legislation, Barro should have helped to shape a much better bill. CAMBRIDGE – The United States House of Representatives and Senate have each passed tax cuts that would reduce the corporate rate from 35%...

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Inequality in the Twenty-First Century

As inequality continues to deepen worldwide, we do not have the luxury of sticking to the status quo. Unless we confront the inequality challenge head on – as we have just begun to do with another existential threat, climate change – social cohesion, and especially democracy, will come under growing threat. MUMBAI – At the end of a low and dishonest year, reminiscent of the “low, dishonest decade” about which W.H. Auden wrote in his poem “September 1, 1939,” the world’s...

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The Dangerous Delusion of Price Stability

Since the hyperinflation of the 1970s, which central banks were right to combat by whatever means necessary, maintaining positive but low inflation has become a monetary-policy obsession. But, because the world economy has changed dramatically since then, central bankers have started to miss the monetary-policy forest for the trees. BASEL – The major central banks’ vigilant pursuit of positive but low inflation has become a dangerous delusion. It is dangerous because the...

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The Holy Grail of Genetic Engineering

CRISPR-Cas – a gene-editing technique that is far more precise and efficient than any that has come before it – is poised to change the world. But ensuring that those changes are positive – helping to fight tumors and mosquito-borne illnesses, for example – will require scientists to apply the utmost caution. HONG KONG – Since its introduction four decades ago, genetic engineering has been a source of high hopes for health, agriculture, and industry. But it has also...

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Surveying the Damage of Low Interest Rates

Few would disagree that it was necessary to slash interest rates in the immediate aftermath of the 2008 global financial crisis. But after a decade of ultra-loose monetary policies across advanced economies, growth remains tepid, financial risks have proliferated, and middle-class savers have lost out. WASHINGTON, DC – For years after the 2008 financial crisis, policymakers congratulated themselves for having averted a second Great Depression. They had responded to the...

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Complacency Will Be Tested in 2018

Despite seemingly robust indicators, the world economy may not be nearly as resilient to shocks and systemic challenges as the consensus view seems to believe. In particular, the absence of a classic vigorous rebound from the Great Recession means that the global economy never recouped the growth lost in the worst downturn of modern times. NEW HAVEN – After years of post-crisis despair, the broad consensus of forecasters is now quite upbeat about prospects for the global...

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Africa’s Must-Do Decade

In recent decades, some developing countries – mainly in Asia – have managed to industrialize. For African countries to achieve sustainable development, they, too, will have to increase substantially the share of industry – especially manufacturing – in their national investment, output, and trade. VIENNA – Since 2000, Africa has recorded impressive rates of economic growth, owing largely to development assistance and a prolonged commodity boom. While the continent shows...

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Trump’s Jerusalem Rationale and its Consequences

The US administration seems to believe that Saudi Arabia and other Arab governments are so concerned with the perceived Iranian threat that they will put aside their long-standing hostility toward Israel. The problem is that the new Saudi crown prince's highest priority – to consolidate his power – may lead him to reject a peacemaking role. NEW YORK – It is 50 years since the Six-Day War – the June 1967 conflict that, as much as any other event, continues to define the...

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