Author Archives: jfrankel

Why Commodity Prices May Have Peaked

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August 26, 2022 — Among the most salient of economic developments in the last two years have been big movements in the prices of oil, minerals, and agricultural commodities.  It was hard to miss the big rise in commodity prices.  The Brent oil price increased from a low $20 a barrel in April 2020, during the first Covid-19 wave, to a peak of $122, in March 2022, after Russia invaded Ukraine.  But it was not just oil. The price of copper doubled over this period.  Wheat more than doubled. And so on. Global indices of commodity prices almost tripled from April 2020 to March 2022. read more

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The July 28 Announcement of Q2 GDP Will Not Mean Recession

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July 21, 2022 — On July 28, the US Bureau of Economic Analysis will release its advance estimate of economic growth, as measured by GDP, in the just-completed second quarter of the year.  The announcement is attracting more than the usual eager anticipation.  The reason is that many observers predict that the Q2 GDP number will be negative and that this will officially confirm widespread beliefs that the economy went into recession in the first half of 2022, figuring that growth in national output is already determined to have been negative in the 1st quarter of the year. After all, isn’t a recession defined as two consecutive quarters of negative growth? read more

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A Resilience Case for International Trade

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July 3, 2022 — Some new problems have afflicted the economy in the last year.  Two examples come from the US:  blockages in supply chain logistics and a critical shortage in infant milk formula. One problem applies to the EU even more than to the US: energy scarcity due to sanctions against Russian fossil fuel exports.  And one applies almost everywhere: inflation.

Some have associated these four problems with what is said to be excessive dependence on international trade, that is, with globalization.  Consequently, deglobalization, fragmentation, reshoring, friend-shoring, decoupling, and resilience have become popular buzzwords.  The feeling is that individual countries would not have been so exposed to shocks if they had been more self-sufficient. read more

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