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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

When Should the IMF Make Exceptions? Part II

by | April 1st, 2015 | 12:15 pm

The current debate over the International Monetary Fund’s (IMF) exceptional access policy centers on a precedent that was establish in 2010 with respect to Greece. In May of that year, when the Greek program was presented to the executive board, the IMF staff stated that it considered Greece’s debt to be sustainable, but the “significant […]

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When Should the IMF Make Exceptions? Part I

by | March 31st, 2015 | 04:42 pm

Ukraine won a reprieve from its economic and financial crisis on March 11, when the executive board of the International Monetary Fund (IMF) approved a $17.5 billion economic and financial support program, invoking the Fund’s policy of providing exceptional (abnormally large) access to IMF financial resources in extreme circumstances. The IMF program is the keystone […]

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Reflections on Lee Kuan Yew

by | March 31st, 2015 | 10:00 am

In his eulogy for Lee Kuan Yew, the founder of modern Singapore, who died on March 23, President Obama said that Lee was “hugely important in helping me reformulate our policy of rebalancing to the Asia Pacific.” That was no exaggeration, as I can attest from personal experience. Lee in essence persuaded the President to […]

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Who Holds Euro Assets? We Still Don’t Know

by | March 26th, 2015 | 04:15 pm

In a 2013 working paper [pdf], Aurel Schubert—the head of the Statistical Department at the European Central Bank (ECB)—and his coauthors wrote that: “Growing current account deficits, especially in the United States and some EU countries, have contrasted with large current account surpluses in some other EU countries, in the oil-exporting economies and in many […]

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The Taper Tantrum Revisited

by and Kevin Stahler | March 25th, 2015 | 01:12 pm

It has been almost two years since the great “taper tantrum.” In June 2013, financial markets interpreted statements by the chairman of the Federal Reserve Ben Bernanke as suggesting that a tighter monetary policy was in the offing when that was apparently not his intention. Thinking the “taper” of the Fed’s bond purchasing program, known […]

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We Are Unsatisfied Most of the Time

by and Jan Zilinsky | March 25th, 2015 | 09:35 am

Pew Research public opinion surveys from 2007 to 2014 reveal that a majority of citizens in most countries are generally unsatisfied with the way things are going most of the time.1 About 30 percent of respondents in 48 countries reported being satisfied on average over the 8-year period (figure 1). Only in 12 percent of […]

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Farewell to the Federal Corporate Income Tax: Part II

by Tyler Moran | March 24th, 2015 | 10:44 am

The first part of this blog post summarized reasons for the survival of the corporate income tax, despite its multiple defects, and explained the forces leading to its slow demise. This second part reviews the US Treasury’s response to foreign tax competition, one of the forces eroding the corporate tax structure.

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Farewell to the Federal Corporate Income Tax: Part I

by and Tyler Moran | March 20th, 2015 | 02:39 pm

The federal corporate income tax was ill-conceived when enacted in 1909, and its negative effects have grown worse with age. It penalizes the most successful firms, discourages productive investment, drives US corporations to foreign soil, and is overly complex to administer.

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The Incredibly Rosy Forecast of Russia’s Central Bank

by | March 19th, 2015 | 03:19 pm

The Central Bank of Russia has published its 3-year forecast for economic growth in 2015–17. The forecast, released on March 14, is so overly optimistic that three comments are in order.

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Egypt’s Mixed Messages

by | March 17th, 2015 | 06:07 pm

“Egypt is open for business” was the message of an economic development conference in Sharm el-Sheikh held the weekend of March 14–15. To his credit, President Abdel Fattah el-Sisi got this message across, and the government claims to have attracted $36 billion in foreign investment. But the investment is almost entirely energy, infrastructure, and aid, […]

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