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Otaviano Canuto: Growth Implications from a Fractured Trading System
To understand the implications of a fractured trading system, let’s use the period known as hyper-globalisation, or globalisation 2.0, as a benchmark. In the 1980s and ‘90s, we saw the consequences of a tectonic shift deep beneath the global economy.
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Otaviano Canuto: Rising Use of Local Currencies for Cross-Border Payments
At the recent BRICS summit in Johannesburg, the leaders of Brazil, Russia, India, China and South Africa said they wanted to use more of their national currencies for cross-border payments. Those payments are currently dominated by the US dollar and
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Otaviano Canuto: The Dollar’s ‘Exorbitant Privilege’ Remains
Otaviano Canuto discusses the ongoing role of the greenback in international monetary systems… There has been talk of “de-dolarisation” of the global economy, with recent initiatives and policy moves by China and other countries to extend the reach of use
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Otaviano Canuto: Macro-economic Policy Change – We’re Not in Kansas Any More
The possibility of multiple financial shocks lies ahead. Three significant changes to the macro-economic policy regime in advanced economies have unfolded in the past two years. Fears of a chronic insufficiency of aggregate demand as a growth deterrent — which
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Otaviano Canuto: Going Around the Bend? Assessing the Phillips Curve May Be of Help
Unemployment and wage rates are theoretically linked, and may hold a key to our immediate economic future. Current global stagflation may evolve to become a soft landing, a sharp downturn, or a deep recession. It will all depend on how
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Otaviano Canuto: Some Economies May Soon Face a Hard Landing
Weaker performance of emerging markets is expected in the immediate future. This year began with simultaneous signs of a slowdown in global economic growth and a reorientation toward tightening of monetary policies in advanced economies. In its latest Global Economic
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Otaviano Canuto: Are We on the Verge of a New Commodity Super-Cycle?
Commodity prices have recovered their 2020 losses and, in most cases, are now above pre-pandemic levels (Figure 1). The pace of Chinese growth since 2020 and the economic recovery that has accompanied vaccine rollouts are driving demand upward, while supply
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Otaviano Canuto: Middle-Income Countries Should Not Be Rushed to ‘Graduate’ Status
Many donor countries seem eager to see middle-income countries (MICs) graduate to non-client status in multilateral development institutions before achieving their full development potential. Such institutions can significantly contribute to the sustainable development of MICs, while seizing many benefits from
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Otaviano Canuto: Central Banks and Inequality
While the economic recovery around the world remains uneven, fragile, and unbalanced across sectors, financial markets are generally doing very well, thanks! In the United States, only half of the unemployment caused by the pandemic last year has been reversed,
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Otaviano Canuto: Dependency and Disconnect of U.S. Financial Markets
U.S. stock and corporate bond markets performed extraordinarily well from the March financial shock caused by covid-19 to the end of last month. Then, three consecutive weeks of decline in the three major stock market indexes have been followed this
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