Historically, one of the defining characteristics of emerging market (EM) economies has been that they generally have not been able to use monetary policy to stimulate their economies during crises in the way developed markets (DM) have. Usually, they have had to hike rates to limit capital outflows and defend their currencies, in doing so making economic recovery more difficult.

This is why it has been particularly interesting to observe the actions of emerging markets during the Covid-19 crisis that has just swept the world. We witnessed most EM central banks easing policy by cutting rates, some quite aggressively  (see chart below), and I believe there could still be room for more. This is a very welcome development, and will be helpful in supporting economic activity during these difficult times. This is particularly true as local financing has gradually become more important across many EM countries that used to issue debt predominantly in foreign...

Historically, one of the defining characteristics of emerging market (EM) economies has been that they generally have not been able to use monetary policy to stimulate their economies during crises in the way developed markets (DM) have. Usually, they have had to hike rates to limit capital outflows and defend their currencies, in doing so making economic recovery more difficult.

This is why it has been particularly interesting to observe the actions of emerging markets during the Covid-19 crisis that has just swept the world. We witnessed most EM central banks easing policy by cutting rates, some quite aggressively  (see chart below), and I believe there could still be room for more. This is a very welcome development, and will be helpful in supporting economic activity during these difficult times. This is particularly true as local financing has gradually become more important across many EM countries that used to issue debt predominantly in foreign...

Compared to one and a half years ago, when the prevailing narrative was still revolving around global synchronised growth, the economic outlook for Europe has darkened significantly. From ‘peak optimism’ levels in late 2017, Euro area real GDP growth has slowed to 1.2%, while Eurozone manufacturing PMI has dropped by more than ten points. Even the notoriously optimistic ECB eventually had to come to terms with reality, slashing their 2019 GDP growth forecast from 1.7% to a dismal 1.1%.

One possible way for Europe’s limping economies to brace themselves against these negative trends and perhaps prevent full-scale ‘Japanification’ would be to suspend austerity and dial up fiscal stimulus to boost economic activity. As Europe’s biggest economy and long-time growth engine, the onus lies first and foremost on Germany, some would argue. And, of course, funding costs would be exceptionally cheap. At current yield levels, Germany would only have to pay around 0.7% in...

What was the biggest sovereign default in history? Argentina in 2001? Greece in 2012? By losses in real terms it was actually Russia in 1918, months after the Bolshevik Revolution. Seen at the time as one of the world’s most investable bond markets, capital had flooded into Russian Tsarist bonds for years ahead of the revolution. The default, when it came, was not just due to Russia’s willingness to repay, but also its ability: the economy was heavily indebted following war against Japan in 1905, and also WW1. In this video, economic historian Hassan Malik is interviewed by M&G’s Jim Leaviss about his new book, Bankers & Bolsheviks – International Finance & the Russian Revolution (Princeton University Press).

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

“Events, dear boy, events”, UK Prime Minister Harold Macmillan responded to a journalist when asked what is most likely to blow governments off course.

At the beginning of this year, Donald Trump was favourite to follow in the footsteps of the previous three Presidents and win re-election. However, events have since unfolded that put his re-election into serious doubt.

Polling

The Democratic candidate Joseph Biden is ahead in every single national poll by wide margins, polling well outside the margin of error. The swing state polling is much closer, but it still looks favourable to Biden right now.

We need to factor in that most polls in 2016 gave Hillary Clinton a commanding lead, which did not materialise on election day. Given the unrest at the moment, this may be due to ‘shy Republicans.’ The election is still likely to be close. The latest Zogby poll of “Who do you think will win?” rather than “Who will you vote for?” gave Trump a...

“Events, dear boy, events”, UK Prime Minister Harold Macmillan responded to a journalist when asked what is most likely to blow governments off course.

At the beginning of this year, Donald Trump was favourite to follow in the footsteps of the previous three Presidents and win re-election. However, events have since unfolded that put his re-election into serious doubt.

Polling

The Democratic candidate Joseph Biden is ahead in every single national poll by wide margins, polling well outside the margin of error. The swing state polling is much closer, but it still looks favourable to Biden right now.

We need to factor in that most polls in 2016 gave Hillary Clinton a commanding lead, which did not materialise on election day. Given the unrest at the moment, this may be due to ‘shy Republicans.’ The election is still likely to be close. The latest Zogby poll of “Who do you think will win?” rather than “Who will you vote for?” gave Trump a...

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more