Modi, Sisi & Jokowi: Three New Leaders Face the Challenge of Food & Fuel Subsidies

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In few policy areas does good economics seem to conflict so dramatically with good politics as in the practice of subsidies to food and energy.  Economics textbooks explain that these subsidies are lose-lose policies. In the political world that can sound like an ivory tower abstraction.   But the issue of unaffordable subsidies happens to be front and center politically now, in a number of places around the world.   Three major new leaders in particular are facing this challenge:  Sisi in Egypt, Jokowi in Indonesia, and Modi in India. read more

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 Has Italy Really “Gone Back Into Recession”?

Italians and the world have now been told that their economy slipped back into recession in the first half of 2014.  This characterization is based on the criterion for recession that is standard in Europe and most countries:  two successive quarters of negative growth.  But if the criteria for determining recessions in European countries were similar to those used in the United States, this new downturn would be a continuation of the 2012 recession in Italy, not a new one.  A common-sense look at the graph below suggests the same conclusion: the 2013 “recovery” is barely visible. read more

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US Monetary Policy and East Asia

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I visited Korea earlier this summer and gave a talk on effects of U.S. Tapering on Emerging Markets.  (This was also the subject of comments at an Istanbul conference sponsored by the NBER and the Central Bank of Turkey in June.)

An interview on the effects of policy at the Fed and other advanced-country central banks on East Asian EMs now appears in KRX magazine (in Korean), August. Here is the English version:

Special Interview with  Jeffrey A. Frankel <KRX MAGAZINE> August

Q: On 10 June 2014, Federal Reserve Bank of Boston President Eric Rosengren said in a speech that the Fed’s “new” monetary policy tools, including forward guidance and large-scale asset purchases, were “essential” in ensuring the economic recovery in the United States. What do you think about the ‘ongoing’ U.S’s ‘Tapering’ policy? And what is your idea about appropriate “new” monetary policy? read more

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