Global economy

Jacques Bughin, Susan Lund, 09 January 2017

In around 25 years, the internet has become an integral part of our daily lives, connecting billions of users and businesses worldwide and leading to an explosion in the volume of cross-border digital flows. This column attempts to measure these flows and their impact on global activity in general. Global flows of goods, services, finance, people, and data have raised world GDP by at least 10% in the past decade, with the contribution to growth of GDP from data flows nearly matching the value of global trade in physical goods and services.

Nicholas Kozeniauskas, Laura Veldkamp, 03 January 2017

Uncertainty shocks are a major avenue of research in the quest to explain business cycles, as well as asset prices and financial crises. This column argues that three conceptually distinct types of uncertainty that are often modelled independently – ‘macro’ uncertainty about an aggregate variable such as GDP, ‘micro’ uncertainty about firms’ individual outcomes, and ‘higher-order’ uncertainty that people have about the beliefs of others – are in fact related because all three are tied to disaster risk.

Julián Caballero, Andrés Fernández, Jongho Park, 19 December 2016

Emerging economies are substantially reliant on foreign corporate debt issuance, which has major macroeconomic implications. This column quantifies the extent to which debt issuance matters for macroeconomic performance in emerging economies, and how much macro vulnerability it has entailed. It finds evidence that a large increase in debt reliance has had a considerable effect on macroeconomic performance, but suggests that potential negative impacts on overall health of economies can be reduced in the future if policymakers have access to more and better information.

Danny Leipziger, 08 December 2016

Despite lifting millions out of poverty, globalisation is facing growing political opposition. This column surveys the successes and failures of globalisation, and some of the critical policy implications. Globalisation has reached a stage where its benefits have been captured but its costs have been largely ignored. Going forward, governments need to address inequality and social inclusion, boost global investment, and restore confidence.

Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis, 27 October 2016

The October 2016 expert survey of the Centre for Macroeconomics (CFM) and CEPR invited views from a panel of macroeconomists based across Europe on Germany’s trade surplus, its impact on the Eurozone economy, and the appropriate response of German fiscal policy. More than two-thirds of the respondents agree with the proposition that German current account surpluses are a threat to the Eurozone economy. A slightly smaller majority believe that the German government ought to increase public investment in response to the surpluses. 

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