Focus Germany: Taxing climate subsidy, subsidizing climate tax
Germany is struggling to achieve its current environmental goals. A new policy package under consideration now is unlikely to provide a clear path forward. The taxes and subsidies it foresees contradict each other and could ultimately impede technological advancement. The proposal has proven disappointing to climate activists and economic critics ...
Swiss economic success: diversity as capital
Nothing seems to stop the prosperity of the Swiss economy. Its steady growth is seemingly impervious to the political turmoil in the EU, superpower tensions, the vagaries of world trade and even the overly muscular Swiss franc. Switzerland’s highly diverse economy and its unique political system together form an ecosystem ...
2019 Global Outlook: Another year near zero
It has been a decade since global interest rates reached the zero lower bound, where monetary policymakers lose their ability to stimulate the economy using conventional policy tools. Among the largest global central banks, only the United States Federal Reserve has set its benchmark above 2 percent. Will this anomaly ...
Opinion: The EU’s digital lag
A dozen or more global giants have emerged in the online data business, but none in the European Union. That is not for lack of trying. The EU has issued voluminous regulations on data protection and dangled investment incentives for digital entrepreneurs, yet this outpouring of directives and money has ...
Scenarios for North Korea
Why has Kim Jong-un decided to enter peace talks with South Korea now? There are several possibilities. He could be trying to reintegrate his country with the global community, maneuvering for tactical advantage or preparing for an exit from power. The latter carries the most risk and could destabilize the ...
Blockchain as a principle of governance
Blockchain, the fundamental technology behind new cryptocurrencies such as Bitcoin, is based on a novel governance system that is radically different from the centralized approach used today in banks, corporations and governments. Blockchain’s numerous advantages may prove too important to be ignored, even in the face of opposition from defenders ...
Global Outlook 2018: Dangerous waters ahead for the world economy
All around, the wind seems to have filled the sails of the world economy. From consumer spending to investment to stock market indices, the sailing seems smooth. But some dangerous currents, including debt-fueled liquidity and low productivity, are converging below the surface. Without an effort by the captains of the ...
Opinion: The OECD’s problematic global tax ‘standard’
The OECD’s global standard for the Automatic Exchange of Information (AEOI) in tax matters is far less global, standardized and automatic than its name suggests. It is structured so that countries tend to apply the rules bilaterally, leading to a complicated web of regulations that the “standard” was designed to ...
Opinion: The BRI – China’s road to hegemony
China’s Belt and Road Initiative has generated plenty of excitement for the economic benefits it could bring. But for Beijing, the huge project is a tool to expand its influence throughout Asia and beyond. China is putting on a friendly face, but its main goal is hegemony.
Opinion: Conventional measures give false reassurance on global risk
Conventional measures could be the wrong ones to gauge the risk of a financial shock to the global economy. Imbalances created by cheap money are building up in the economy. A close look at market capitalization, share buybacks, and interest-rate spreads presents a troubling picture.
The Chinese economy: it’s about debt
China’s high ratio of debt to gross domestic product (GDP) will necessarily lead to an economic slowdown. The question is whether that can happen in a controlled manner that limits the negative effects on the country and the region, or whether it will bring China’s economy crashing down.
Behind China’s enthusiasm for free trade
Lately China has been a big promoter of free trade. Has Beijing finally come around to the benefits of international capitalism? There are reasons to be skeptical. Among them are centuries-old strains in Chinese philosophy about a strong state, and how to achieve hegemony.
The U.S. and China’s ‘free trade’ agendas
The United States and China are not true champions of free trade. Beijing pushes exports but effectively curbs imports through a maze of administrative obstacles. Washington traditionally concentrates on job protection and creation; its trade policies reflect these priorities.
Clueless central banks
Despite quantitative easing, forward-guidance and negative interest rates, global GDP growth has not taken off. Avoiding the business cycle should not be the priority of central banks or governments. Creating conditions that allow businesses and individuals to deal with the cycle, should.
South Korea: good, bad and better
South Koreans are critical of their country, but this is good. Critical self-evaluation is a virtue. The country is an example of how continuous improvement works. Nothing is taken for granted; flexibility is the norm. Through this continuous process, difficult challenges can be met and overcome.
Applause for Mr. Cameron
Yes, he miscalculated. He overplayed his hand. He underestimated his adversaries. His bluff was called, and he lost. Nonetheless, British Prime Minister David Cameron made the most courageous decision by a European politician in decades. For that, Mr. Cameron merits praise.
China’s party for itself
The Communist Party of China (CPC) is 95 years old, has been in power for over 65 years and has more than 80 million members. It is difficult to decide which is most impressive, writes Chief Economist Henrique Schneider of the Swiss Federation of Small and Medium Enterprises. But the ...
Brexit – an opportunity for the EU
Most discussions about the possibility of the United Kingdom leaving the European Union focus on its consequences for Britain. Fair enough. But there are also potential implications for the EU – and they are not all bad, writes Chief Economist Henrique Schneider of the Swiss Federation of Small and Medium ...
Japan takes kamikaze dive below zero
On February 16, the Bank of Japan (BoJ) officially adopted negative interest rates. The move came 20 months after the European Central Bank became the first of the world’s major central banks to venture below zero, writes Chief Economist Henrique Schneider of the Swiss Federation of Small and Medium Enterprises.The ...
Yearning for the central banks of yore
In the good old days, the role of a central bank was straightforward, clear-cut, one might even say, boring. Central bank independence meant that the super-bankers were to abstain from politics. Their job was predictable: to raise benchmark rates when inflation appeared on the horizon. If the economy started to ...