Economics

By Michael Pettis This post was originally published at China Financial Markets at the Carnegie Endowment for International Peace website According to a May 2020 CNN article, one consequence of the coronavirus pandemic is that “Americans…

I am sitting here diving into a brand new copy of a book - Progress and Poverty - that was written 140 years ago, in 1879. And it occurred to me I should write you about it because the ideas in this book are as relevant to the 21st century…

Thinking about Japanification Two FT articles and a discussion at Real Vision precipitated this post. On Monday, I had a conference call with a few markets-oriented colleagues at Real Vision, where I am an editor and program presenter. And…

In the last few weeks, I've been seeing a lot of buzz about Modern Monetary Theory aka MMT. And most of what I'm seeing is reductionist to the point of absurdity. When I see critics of MMT talking about it, they're mostly using MMT as a…

By Will Abel, Silvana Tenreyro, and Gregory Thwaites This post first appeared on Vox. The growing prominence of giant companies in advanced economies has raised concerns about the increase in monopoly power (e.g. Eeckhout and de Loecker…

I continue to believe that the bond bear market thesis is flawed. Money managers following it will lose a lot of money.

There are two ways to explain persistently high corporate profit margins. One interpretation is about inequity, and implicitly about corporatism masquerading as liberty. And the other is about network effects creating an age of winner take…

Normally, we think of trade as a story of spendthrift nations 'living beyond their means' and saver nations being productive. In this view, savers are virtuous and spenders are sinful. And the easiest way to see who the saints and sinners…

When China builds a trade surplus, it accumulates dollars. And it has to do something with those dollars. That means its purchase of US dollar assets is non-discretionary unless it revalues its currency.

Hyman Minsky's financial theory of investment is unique. He looks at an economy as having two inherently different price systems. There's one price system for goods and services. And there's another one for assets. The econometrics that…