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Tag Archives: News

Politics and Budgets

  photo: GotCredit Every year, parliaments in democratic countries discuss budget proposals for the following year to set the course for economic policy going forward. But the reality is that politics and budgets are deeply interwoven. This was recognized by Joseph Schumpeter who noted “the spirit of a people, its cultural level, its social structure, the […]

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H2-2017: Where to invest?

Key takeaway – The investment environment remains challenging. In their portfolios, investors should: i) privilege a multi-year horizon; ii) focus on capital preservation by adopting a defensive risk profile; and iii) accept lower expected returns in exchange for lower volatility. Wealth preservation requires conservative investment strategies, with a greater exposure to alternatives. The recommended strategic […]

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Does Brazil’s Sector Structure Explain Its Productivity Anemia?

Brazil’s labor and total-factor productivity (TFP) have featured anemic increases in the last decades (Canuto, 2016). As we illustrate here, contrary to common view, sector structures of the Brazilian GDP and employment cannot be singled out as major determinants of productivity performance. Horizontal, cross-sector factors hampering productivity increases seem to carry more weight. Brazil’s productivity […]

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Negative Rates – Part 2: A Policy Too Far?

Negative Reality Debt can only be reduced by strong growth, inflation, currency devaluation (where the borrowing is from foreigners) or default. All the strategies other than growth involve some level of transfer of value from savers either by reduction in the nominal value returned or decreased purchasing power. Growth and inflation are low. Devaluation is […]

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The Trump White House Under Siege 

photo: IoSonoUnaFotoCamera   Washington is planning to extend sanctions against Russia, once again. Meanwhile, the Trump administration is getting ready to cope with a special counsel’s investigation which seems to focus as much on Trump as Russia. Last Wednesday, Secretary of State Rex Tillerson warned that Congress should not pass any legislation that would undercut “constructive […]

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Negative Rates Part 1: Beyond the Zero Bound

  Interest in negative rates, at least as can be judged from hyper activity from commentators, has diminished. But a number of European central banks still have negative official rates. The European Central Bank (“ECB”) deposit rate is minus 0.30%. Switzerland’s policy rate is minus 0.75%. Sweden’s policy rate is minus 0.35%. The Bank of […]

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Return of Sovereign France- Europe’s Changing Landscape

photo: Nathan Hughes Hamilton  In France, President Hollande’s utter failure to foster broad consensus for structural reforms has paved the way for a contested election. While public debate focuses on Emmanuel Macron as the savior of France, the real story is that Marine Le Pen’s agenda has shifted the French political landscape. Before TV debates, the […]

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