More in Global Economy


2 months

Lessons From Japan’s Monetary Experiment

A recent article in the Financial Times, “Abenomics provides a lesson for the rich world“, mentioned that the experiment started by prime minister Shinzo Abe in the early 2010s should serve as an important warning for rich countries. Unfortunately, the article’s “lessons” were rather disappointing. These were mainly that the central bank can do a lot more than the ECB and the Fed are doing, and that Japan is not doing so badly. I disagree.

2 months

Production, Use and Fate of All Plastics Ever Made

Back in 2005, the American Film Institute released a list of the 100 most memorable and lasting bits of film dialogue of all time. The first two, for example, were ""Frankly, my dear, I don't give a damn" and "I'm gonna make him an offer he can't refuse." Number 41 on the list was "Plastics." from the 1967  film The Graduate, which won Oscars for Best Picture, Best Director, Best Actor (Dustin Hoffman) and Best Actress (Anne Bancroft).

2 months

The Dominance of Peoria in the Processed Pumpkin Market

As I prepare for a season of pumpkin pie, pumpkin bread (made with cornmeal and pecans), pumpkin soup (especially nice wish a decent champagne) and perhaps a pumpkin ice cream pie (graham cracker crust, of course), I have been mulling over why the area around Peoria, Illinois, so dominates the production of processed pumpkin.

2 months

Workplace Wellness Policies: Disappointing Evidence

The idea behind workplace wellness policies is straightforward. Many workers could use a nudge toward adopting healthier lives, including diet and exercise. Employer are paying for health insurance anyway, and also experiencing costs of lower productivity and sick days for their employees. If a workplace wellness program can improve health, it could be a win for both workers and employers. However, a couple of recent studies from this year suggest that such programs don't pay off.

2 months

Leveraged Loans – History Rhyming?

·        Despite three Federal Reserve rate cuts, leveraged loan credit quality is rapidly declining. ·        Covenant-lite issues now account for more than 80% of US$ issues. ·        CLO managers, among others, may need to sell, but few buyers are evident.

2 months

Why Has China's Trade Surplus Gone Away?

China's trade surpluses exploded in size after 2001, when China joined the World Trade Organization and its exports soared. But those trade surpluses peaked back before the Great Recession and have dwindled since then to near-zero. Indeed, the IMF predicts that China is likely to have small trade deficits in the next few years. What happened? Pragyan Deb, Albe Gjonbalaj, and Swarnali A. Hannan tell the story in "The Drivers, Implications and Outlook for China’s Shrinking Current Account Surplus" (IMF Working Paper WP/19/244, November 8, 2019).

2 months

The Return of the Patent Thicket

Back in the early 1970s, Xerox had figured out a strategy to block competitors in the photocopying business. It took out lots of patents, more than 1,000 of them, on every aspect of the photocopy machine. As old patents expired, new ones kicked in at a rate of several hundred new patents each year. Some of the patents were actually used by Xerox in producing the photocopy machine; some were not. There was no serious complaint about the validity of any individual patent. But taken as a whole, Xerox seemed to be using the patent system to lock up its monopoly position in perpetuity.  Under antitrust pressure from the Federal Trade Commission, Xerox in 1975 signed a consent decree which, along with a number of other steps, required  licensing its 1,700 photocopier patents to other firms. (Here's a later retrospective on the case, including some of the other issues, the 1975 FTC consent decree, and what happened with follow-up litigation.)