- Swedish study says that despite enlargement big EU states are gaining power, see EUobserver article . It also says that because of personality Luxemburg leader weighs probably more than a country of 12-14 million population.
- Bloomberg article commenting on US deicsion to put tariffs on imports of coated paper from China. Quotes: ” Figures last week showed the world’s central banks have the lowest level of U.S. currency in their foreign-exchange reserves since at least 1999. Dollar holdings dropped to 64.7 percent in the fourth quarter, according to the International Monetary Fund, down from 65.8 percent in the previous quarter and from as high as 72.6 percent in mid-2001. The euro is at its most popular since its 1999 introduction, with a share of 25.8 percent.” […] ” The U.S. can hardly claim to be a paragon of free trade. In his book “Making Globalization Work,” for example, Nobel Prize- winning economist Joseph Stiglitz says there are 25,000 U.S. cotton farmers enjoying $4 billion of annual subsidies. Without those government payments, “it would not pay for the United States to produce cotton; with them, the United States is the world’s largest cotton exporter,” he writes.” […] ““We see U.S. protectionism as a key long-term risk,” T.J. Bond, Hong Kong-based chief Asia economist for Merrill Lynch and Co., said in a research note today. “The economics aren’t going to change. If it interferes with the global flow of goods and capital, protectionism could raise global inflation as well as U.S. bond yields.” “Do Not Meddle in the Affairs of Dragons, For You Are Crunchy and Taste Good With Ketchup,” is a slogan available on T-shirts and bumper stickers. Maybe some champion of free trade could buy a box of each and send them to the gaggle of short- sighted, crowd-pleasing U.S. politicians as a warning that if you pull the tail of the Chinese dragon, you might be devoured.”
- Also Morgan Stanley has a post on US protectionism. Quote: “Rising protectionism is a genuine risk to the US economy and the US dollar, in our view. We believe that investors should respect this threat, and be positioned defensively regarding the dollar. Having said this, we tend to view protectionism as a tail risk, not our central case assumption. It will remain more of an irritating threat rather than something that will undermine globalization, in our opinion. “
- BIS Malcom Knight speech on inflation targeting in emerging market economies. Summary: “Inflation targeting has been adopted by a growing number of emerging market economies. Mr Knight discusses the benefits of a credible monetary policy framework, and highlights three particular advantages of explicit inflation targeting as one effective way of establishing such a framework. He also argues that inflation targeting is not a panacea, but needs to be supported by sustainable fiscal policy. He points out that inflation targeting is a flexible framework, and discusses three strategic choices that need to be made by emerging market economies in adopting inflation targeting, namely about the nature of the inflation target, the role of macroeconomic forecasts and the management of the exchange rate.”
There are numerous papers and some chapters of 2007 Spring WEO published by IMF, I added them to my public knowledge resources .
- PIMCO central bank focus, this time Paul McCulley conducts indepth analysis of monetary policy professors turned into Fed governors speeches.