Peterson Institute for International Economics Update Newsletter
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PIIE Update Newsletter
July 18, 2013

"Washington's premier think tank on the global economy"
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After Bernanke, Make Unconventional Policy the Norm

Adam S. Posen
Published in the Financial Times
  Adam S. Posen When Ben Bernanke steps down as Federal Reserve chairman in January, his replacement will have to make unconventional monetary policy conventional and establish a viable oversight framework for doing so. Recent events have shown that no one interest rate transmits or even represents monetary policy's impact on the whole economy. All monetary policies have distributive effects, even when solely involving government bonds. Thus, public debate has been allowed to mischaracterize unconventional monetary policy for too long. The new Fed chair will have to design a set of tools for more targeted interventions in both public and private credit markets.

>> Read full op-ed

  Live Webcast
The Challenges and Opportunities of International Trade: Past, Present, and Future

Representative Sander M. Levin
Tuesday, July 23, 2013
11:30 a.m.–1:00 p.m.(EDT)
  The Peterson Institute will webcast a speech by Representative Sander M. Levin on Tuesday, July 23. Representative Levin will discuss the US trade agenda, including fast track legislation (trade promotion authority); the Trans-Pacific Partnership (TPP) negotiations, including Japan's imminent participation; the new negotiations to establish a free trade agreement with the European Union (Transatlantic Trade and Investment Partnership); a Trade in Services agreement; and other topics.

Calendar  Add to calendar
>> More information

  Working Paper
The Hyperglobalization of Trade and Its Future

Arvind Subramanian and Martin Kessler
  Arvind Subramanian Martin Kessler The world trading system faces three fundamental challenges. First, in developed countries, the domestic support for globalization is eroding because of their economic weakness and their reduced ability to maintain a social safety net. Second, China—the world's largest trader—does not shoulder enough responsibility for maintaining an open system. Third, the rise of mega-regional trade agreements potentially encourages discrimination against countries outside those deals. The authors suggest new areas of multilateral cooperation to maintain the open trading system and ensure that it benefits all countries.

>> Read full working paper [pdf]
>> See also: Twenty-first Century Trade Integration in Eight Figures
>> Read Martin Wolf's commentary in the Financial Times

The Curious Case of the Protectionist Dog That Has Not Barked

Arvind Subramanian
Published in the Financial Times
  A common concern is that the global economic downturn caused a surge in trade protectionism. Subramanian argues that, on the contrary, it is a near miracle for the world economy that there has been an absence of serious protectionism in industrial countries in the past decade, despite both the downturn and the huge impact of expanding production in emerging markets. Imports from China grew from 0.5 percent of US domestic demand in 1990 to 5.2 percent by 2010. Yet this surge did not elicit a significant protectionist response. Research shows that the impact of Chinese imports on US wages and employment led to almost $15 billion of transfer payments from the government, such as unemployment and disability, which probably blunted the reaction. Perhaps there is cause to be optimistic about the future of trade.

>> Read full op-ed

  Policy Brief 13-18
Avoiding the "Resource Curse" in Mongolia

Theodore H. Moran
  Theodore H. Moran Mongolia is on the verge of an economic boom as foreign investors develop and extract its rich deposits of natural resources, among them copper, gold, and coal. But the onset of a mining boom in this north central Asian country has also generated concerns about the potential damage to traditional agriculture and the environment, the overwhelming of inadequate infrastructure and water resources, and increased economic inequality, corruption, and other ills. The reelection of President Tsakhiagiin Elbegdorj on June 26, 2013, provides an opportunity to identify steps to be taken by Mongolia to benefit from foreign investment and still avoid the "resource curse."

>> Read full policy brief [pdf]

Peterson Perspectives Interviews

audio  China's Bid for US Pork: How Big a Concern?
Gary Clyde Hufbauer says Congressional critics are sounding a false alarm over a Chinese company's proposed acquisition of Smithfield Foods.

Recent Blog Posts

RealTime Economic Issues Watch   China Economic Watch    North Korea:  Witness to Transformation
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A New Glass-Steagall Act

QE's Fiscal Benefits Outweigh Any Fiscal Costs

Twenty-first Century Trade Integration in Eight Figures

The EU Commission's Latest Proposals for Troubled Banks

Protectionism: To Worry or Not to Worry?
  China's Spotty Record on Inflation Targeting

The Price of Power: the New Chinese Leadership Begins Rebalancing with Resource Prices

The Misallocation of Credit in China

Oversupply of College Graduates? Structural Mismatch!

Too Big to Fail: Deposit Insurance and Chinese State Banks
  The Chong Chon Gang Seizure

The Nuclear Security Summit Process

Diplomacy: Still Nowhere or Worse?

The Iran-DPRK Missile Connection: Are Sanctions Having Effect?

Totally off-topic, totally awesome

PIIE Noted in the News and on the Web

Financial Times
Globalization in a Time of Transition
In his Financial Times column, Martin Wolf discusses Arvind Subramanian and Martin Kessler's newest Working Paper, The Hyperglobalization of Trade and Its Future.

Robert Zoellick on Global Monetary Policy
Robert B. Zoellick joins China Central Television to discuss global monetary policy.

Robert Zoellick Talks US-China Economic Dialogue
Robert B. Zoellick discusses the growing relationship between the world's two largest economies.

Foreign Policy
Is North Korea's Economy Really Growing?
Marcus Noland responds to a Bank of Korea report that finds North Korea's GDP increased in 2012.
In This Issue

Featured Book
Understanding the Trans-Pacific Partnership Understanding the Trans-Pacific Partnership

Jeffrey J. Schott
Barbara Kotschwar
Julia Muir

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