Prospects for China's economy in 2019

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Trade Policy ◽  
Gdp Growth ◽  
Content Type ◽  
Us Trade Policy ◽  
Trade Frictions ◽  
Fiscal And Monetary Policy ◽  
Trade And Investment ◽  
China’S Economy ◽  
Do So

Subject Prospects for China's economy in 2019. Significance China goes into 2019 dealing with US trade policy that is proving far more aggressive than Beijing had expected a year ago, when it was pursuing goals of deleveraging debt, reducing pollution and cutting overcapacity in specific industries, all the while keeping the economy on track for 6.5% GDP growth. Instead, Beijing has had selectively to loosen fiscal and monetary policy and put support for trade and investment ahead of the original goals. It will have to continue to do so while trade frictions persist.

Prospects for emerging economies to end-2019

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Emerging Markets ◽  
Trade Policy ◽  
Emerging Economies ◽  
World Trade ◽  
Gdp Growth ◽  
Content Type ◽  
Us Trade Policy ◽  
Policy Shift

Subject Prospects for emerging economies to end-2019. Significance US trade policy is hardening and while the direction remains uncertain, a sustained softening seems unlikely. Monetary policy is shifting towards easing in many emerging markets (EMs) and some are expanding fiscal policy. However, the policy shift will not compensate for weaker world trade and EM GDP growth is expected to slow from 4.5% last year, already a three-year low, to closer to the 4.3% seen in 2015 or even weaker.

Prospects for the global economy in 2020

2019 ◽  
Keyword(s):  
United States ◽  
Monetary Policy ◽  
World Trade ◽  
Global Economy ◽  
The United States ◽  
Gdp Growth ◽  
Content Type ◽  
Trade And Investment ◽  
Global Growth ◽  
Bounce Back

Subject Prospects for the global economy in 2020. Significance Global GDP growth in 2020 is likely to edge above this year’s 3%, provided that employment and wage gains remain firm and trade and investment continue to stabilise. Even if a US-China ‘phase one’ trade deal is agreed, world trade will not bounce back. Moreover, productivity is deteriorating in the United States and United Kingdom and is flat elsewhere, potentially exacerbating weak investment. Looser monetary policy will shore up rather than raise global growth and there is little sign of the larger economies markedly expanding fiscal policy.

Optimal fiscal and monetary policy under different fiscal instruments

2020 ◽  
Vol 48 (1) ◽  
pp. 167-190
Author(s):  
Mehrab Kiarsi
Keyword(s):  
Monetary Policy ◽  
Inflation Rate ◽  
Dynamic Properties ◽  
Sticky Prices ◽  
New Keynesian ◽  
Content Type ◽  
Friedman Rule ◽  
Keynesian Model ◽  
Fiscal And Monetary Policy ◽  
Cash In Advance

PurposeThe paper includes characterizing Ramsey policy in a cash-in-advance monetary model, under flexible and sticky prices, and with different fiscal instruments.Design/methodology/approachThe paper analytically and numerically characterizes the dynamic properties of Ramsey allocations. The author computes dynamics by solving second-order approximations to the Ramsey planner’s policy functions around a non-stochastic Ramsey steady state.FindingsThe Friedman rule is not mainly optimal in a cash-in-advance model with distorting taxes. The Ramsey-optimal policy with both taxes on income and consumption calls for a high inflation rate that is extremely volatile, despite the fact that changing prices is costly.Practical implicationsThe optimality of zero nominal interest rate under flexible prices in monetary models is not mainly the case and quite depends on the preferences. The optimality of a zero inflation rate under sticky prices also very much depends on the assumed set of fiscal instruments.Originality/valueThe non-optimality of the Friedman rule under flexible prices is quite new. Moreover, studying the optimal fiscal and monetary policy in a New Keynesian model with a rich set of fiscal instruments is also quite original.

Weaker AKP would reduce Turkish president's authority

2015 ◽  
Keyword(s):  
United States ◽  
Monetary Policy ◽  
The United States ◽  
Proportional Representation ◽  
Representation System ◽  
Content Type ◽  
Justice And Development Party ◽  
Fiscal And Monetary Policy ◽  
At Home

Significance The ruling Justice and Development Party (AKP) should easily get the most votes, but it faces a likely setback and a dent in its authority. Weakening support from its voters and Turkey's proportional representation system are likely to drive its number of parliamentary seats down from the 327 out of 550 seats it won in 2011, perhaps even to the point where an overall majority is in doubt. Impacts Market confidence and the lira may weaken, but will not deteriorate drastically, unless AKP is forced out of office -- a remote scenario. Fiscal and monetary policy may be loosened to win support until a new government able to last for a full four-year term is in office. A politically weaker AKP risks long-term splits, but these will not emerge unless there have been months of instability. Growing internal discord -- and the government's defiant response to its critics at home and abroad -- may isolate Turkey internationally. The United States and EU will continue to avoid confrontation with the Erdogan government as far as possible.

China's economy may slow again later this year

2018 ◽  
Keyword(s):  
United States ◽  
Economic Activity ◽  
The United States ◽  
Environmental Risks ◽  
Gdp Growth ◽  
Content Type ◽  
High Profile ◽  
Financial Regulations ◽  
China’S Economy

Subject The macroeconomic outlook for China. Significance Despite fears of a slowdown, China has kept up GDP growth of 6.8% year-on-year for three successive quarters. However, key measures of economic activity have weakened, and tensions are escalating with the United States over trade and technology. Impacts A swathe of new financial regulations and high-profile arrests will likely continue in 2018. Negotiations are likely to alleviate the immediate pressure from Washington, but underlying concerns over the tech sector will continue. A recently announced sweeping government reorganisation will be implemented, helping to tackle financial and environmental risks.

Incoherent US trade plans may get nastier not clearer

2017 ◽  
Keyword(s):  
Trade Policy ◽  
Financial Institutions ◽  
North Korea ◽  
Election Campaign ◽  
International Financial Institutions ◽  
Donald Trump ◽  
Content Type ◽  
Us Trade Policy ◽  
Trade Sanctions ◽  
Trade Deals

Subject US trade policy. Significance During his election campaign, Donald Trump slammed decades of US policy and pledged to secure better trade deals, putting 'America First'. Upon taking office, Trump withdrew from the Trans-Pacific Partnership (TPP), but six months on, his trade agenda remains disjointed. Impacts Trump could use executive powers in a more sweeping fashion if he cannot deliver trade changes via legislation. Washington will expand secondary trade sanctions on firms and people that deal with North Korea, most of which are Chinese. Securing 'big-ticket' export deals will be a means for Trump to deliver manufacturing jobs to his political heartland. US opposition to funding and reforms of international financial institutions could reduce the momentum behind global cooperation.

Indonesian reform plans may boost economy longer-term

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Foreign Investment ◽  
Institutional Reform ◽  
Market Volatility ◽  
Power Balance ◽  
Gdp Growth ◽  
Infrastructure Development ◽  
Content Type ◽  
Investor Confidence

Subject Jokowi's reform packages. Significance President Joko 'Jokowi' Widodo last week announced the first of three economic packages designed to re-invigorate the economy and attract foreign investment. The remaining two packages will be announced later this month and in November respectively. Similar packages have been devised by past administrations, but to little effect. To gain investor confidence, Jokowi will need to specify how his administration intends to implement its plans. Impacts Financial market volatility will continue until US monetary policy begins to normalise (probably no earlier than December). The power balance in Jokowi's cabinet militates against institutional reform. Policies to boost infrastructure development promise longer-term gain, but little boost to 2015 GDP growth.

Dialogue failure risks new conflicts in Venezuela

2016 ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Oil Prices ◽  
Market Value ◽  
Oil Production ◽  
Black Market ◽  
Structural Reform ◽  
Content Type ◽  
Dialogue Process ◽  
Fiscal And Monetary Policy

Significance Venezuela has welcomed OPEC's agreement to the first oil production cut since 2008 but this fillip was offset by a 67% fall in the black market value of the bolivar in November -- the steepest monthly fall to date. Amid triple-digit figure inflation, the Central Bank announced that new denomination bank notes will be released on December 15. Impacts The predictable collapse of the Vatican-endorsed dialogue process portends a renewed and possibly violent cycle of protest and conflict. Absent structural reform and dramatic change in fiscal and monetary policy, a lift in oil prices will not alleviate economic turbulence. Official optimism over a possible return to modest growth next year appears misplaced.

China’s monetary policy will rely on banks’ compliance

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Private Sector ◽  
Interest Rates ◽  
Financial System ◽  
Fourth Quarter ◽  
Gdp Growth ◽  
Private Firms ◽  
Content Type

Significance China’s GDP growth slowed to 6.4% year-on-year in the fourth quarter of 2018, with full-year growth at 6.6%. The PBoC is loosening monetary policy to support growth by lowering banks’ RRR alongside policies to incentivise banks to lend more to the private sector. Impacts If the policy fails and leverage increases relative to GDP, then risk in the financial system will rise. If RRR cuts cause consumption to increase, China’s trade surpluses are likely to decrease, helping ease trade tensions with Washington. Liberalising interest rates will, when it eventually happens, allow banks to price loans to private firms more accurately.

ECB to stay dovish despite ending its QE programme

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Central Banks ◽  
Financial Fragility ◽  
Gdp Growth ◽  
Quantitative Easing ◽  
Content Type ◽  
East European ◽  
European Central ◽  
Asset Backed Securities

Significance Fears of Europe's financial fragility are rising after the ECB ended its quantitative easing (QE) programme in December. The programme -- which lasted almost four years -- bought over 2.5 trillion euros (2.9 trillion dollars) in government, corporate and covered bonds, as well as asset-backed securities. Impacts GDP growth may pick up in the fourth quarter after idiosyncratic factors hit July-September, but GDP will struggle to build momentum. When the next cyclical downturn hits, fiscal policy will have to help monetary policy in supporting the economy. An ECB rate hike in 2019 would allow Central-East European central banks to hike too, curbing inflationary pressures.

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