Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that markets have absorbed the initial economic shock from Brexit, but navigating the new landscape will remain a challenge. Two months after the vote, the politics of Brexit is producing a lengthy and uncertain renegotiation of Britain’s place in Europe and the world. Such extended uncertainty is likely to produce a long-lasting drag on both UK and European economies, which could ultimately threaten the viability of the European Union (EU).

Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that it is time for central banks to debate whether a higher inflation target would improve the operation of monetary policy.

Since our August update, the eurozone crisis and poor global growth have fueled investor flight to dollars, despite the recent downgrading of the U.S. credit rating. As fund managers have moved money…