Blogs

Follow the Money

Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

Latest Post

China’s Record Manufacturing Surplus

The U.S. likes talking about the dominance of the dollar. But don’t short-change China’s current dominance of manufacturing trade. Trade imbalances need to be taken seriously again. Read More

Economics
The IMF Needs to Focus on Setting Good Targets for External Debt Sustainability
The IMF has two frameworks for assessing debt sustainability. The market access country framework is more technically advanced, but it isn't delivering reasonable targets for debt restructuring cases. Sri Lanka is a case in point.
China
China’s New Currency Playbook
China’s pivot to a new strategy of indirect intervention through its large state banks requires new approaches to policing currency policies by both the U.S. Treasury and IMF.
Russia
Mobilizing Russia’s Immobilized Reserves
A quick note on the debate over the use of Russia’s frozen reserves.
  • Economics
    An SDR-Linked Bond Can Strengthen the Finances of the World Bank Group
    SDR-denominated bonds have the potential to significantly strengthen the balance sheet of both the IBRD (The World Bank) and IDA, freeing up cash and helping both institutions deliver on their mandate to foster development.
  • Economics
    How the U.S. and EU Could Harmonize Their Approaches to Trade in EVs and Steel
    Despite sharing broadly similar policy goals, the U.S. and EU are currently struggling to find common approaches to trade in green goods. New ideas are needed.
  • China
    China's Current Account Surplus Is Likely Much Bigger Than Reported
    The IMF needs to focus on China’s external account in its surveillance. The reported current account surplus appears to be significantly too low.
  • International Finance
    The World Needs a Second Channel for Using SDRs
    The multilateral development banks need to develop a second channel for mobilizing the world’s under-utilized special drawing rights (SDRs).
  • Economics
    The State of Sovereign Debt Restructuring After the Meetings in Marrakech
    Some fundamental problems with the IMF’s Common Framework for debt restructuring have become apparent. Not the least, debt restructuring shouldn't just be an issue for low-income countries.
  • China
    Can China Reduce Its Internal Balances Without Renewed External Imbalances?
    The rest of the world has a big stake in whether China responds to the demand drag from its construction and real estate slump with looser monetary policy or with direct stimulus to households.
  • China
    China Isn't Shifting Away From the Dollar or Dollar Bonds
    China's reserves has shifted its dollar reserves from Treasuries to Agencies, and made increased use of offshore custodians. The available evidence suggests that it still holds about 50 percent of its reserves in dollar bonds.