or “Do you really know what Uncovered Interest Parity is, and whether it holds?” Published as of today in IMF Economic Review, with coauthored with Laurent Ferrara (SKEMA Business School), Matthieu Bussière (Banque de France), and Jonas Heipertz (Columbia Business School):
Category Archives: international
Russian (External) Debt in Doubt
At 40% recovery rate, credit default swaps (CDSs) imply 100% probability of default. Ratings agencies have downgraded Russian debt.
Russia Drops the Policy Rate – What Does It Mean?
The ruble has stabilized at near pre-invasion levels, and the Central Bank of Russia drops the policy rate to 17%. What’s going on?
“High-frequency macroeconomic risk measures in the wake of the war in Ukraine”
In a VoxEU post by Laurent Ferrara, Matteo Mogliani, and Jean-Guillaume Sahuc today, applying a growth-at-risk (GaR) approach (Ferrara et al. 2022, ungated 2020 WP version) they estimate they downside risk to Euro area vs. US GDP q/q growth.
The Ruble vs. Exchange Market Pressure in Russia
The value of the ruble has returned to pre-invasion levels [1]. But what I am more concerned about is exchange market pressure. And there, we are at sea.
Prices of Iron and Steel, and Trade Policy
I’m covering the impact of tariffs and quotas (general, antidumping, countervailing subsidy, section 232) and updated some graphs on steel employment, production, and prices. Here’s one particularly interesting one:
Russian GDP Prospects Visualized (again)
Recent forecasts indicate 9.6% GDP y/y decline in 2022 (Bloomberg consensus, 3/25), or 15% (IIF, 3/10, via Reuters). S&P Global (3/22) forecasts 22% decline (q4/q4).
Guest Contribution: “Surprisingly Strong Sanctions”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate. Also available as a podcast.
Sanctions, energy prices, and the world economy
Oil sanctions and recession
After a wild ride up to $130 a barrel, the price of oil has come back down to its level from before Russia invaded Ukraine. Russian oil may be finding buyers despite the sanctions, and U.S. production continues to recover. But the situation remains very uncertain, and a big disruption in the quantity of Russian oil that reaches world refineries is a very significant possibility. In my previous post, I examined the causes of the run-up in the price of oil that had already occurred before the invasion and discussed the implications for U.S. inflation. Today I comment on the possible implications of further supply disruptions for U.S. real GDP.
Continue reading