Political Economy

  • Who knew the London Mayor's Brexit support would cause such a fuss?

    The London Mayor Carries the Day

    Most prospective prime ministers would be mildly embarrassed if a boost to their chances made financial markets plunge. However, Boris Johnson is doubtless gratified that his backing for Brexit led to the pound’s biggest one-day fall since the aftermath of the financial crisis. Sterling had barely flinched when cabinet ministers including Michael Gove and Iain Duncan Smith made their own interventions a day earlier.

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  • East versus West in Europe remains politically charged.

    Eastern Europe's Geopolitics Goes Underappreciated

    The great British geographer Halford Mackinder invented the term “geopolitics” over 100 years ago. He painted a grand vision of international relations that revolved around one fear: dominance of what he called the “Heartland” of Eurasia. Mackinder believed the road to dominance ran through Eastern Europe. His ideas have remained influential ever since, for as long as the West has concerned itself about the impact of Eurasia on world affairs.

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  • So far alienation and insults seem to be working for Trump.

    Why Trump Risks Making the Republicans Unelectable

    The billionaire’s strategy of appealing to angry white men by stigmatising minorities is exerting lasting damage on the Republican Party’s image. Demographic shifts could make the party unelectable for a generation, or more.

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  • So far the EU/PiS issues have been minor skirmishes, but that could change.

    EU not Wanting to Give PiS a Chance

    ECB President Draghi made clear at yesterday's press conference that new risks have materialized and the central bank's job to reaching its mandate is far from over. Current efforts may not suffice to achieve its legal prescribed mandate. Monetary policy will be reviews and reassessed at the next meeting in March, when new staff forecasts will also be available.

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  • Not thinking housing policies through undermines home ownership dreams.

    When Housing Policies Go Bad

    Lack of affordable housing is a serious policy concern in many countries. In large prosperous cities such as London, New York, Beijing, or Tokyo, the affordability crisis is particularly acute. In these cities, households often live in excessively expensive and crammed spaces. Homeownership remains an unachievable dream for many.

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  • Tax cuts without offsetting revenues are a bad combination.

    Building a Bigger Budget Deficit

    Christmas came early for Congress this year as politicians from both sides of the aisle came together to pass – by wide margins – a US$1.8 trillion package of tax cuts and new spending.

    At year-end, Washington seemed awash in a spirit of holiday cooperation with the president praising new Speaker Paul Ryan. However, does the bipartisan approval of the budget deal really mean that Democrats and Republicans have learned to play together nicely in the Congressional sandbox?

    Definitely not.

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  • South Korea's Park receives criticism, but remains popular in the polls.

    When Political Risk Trumps Economic

    The international media spent 2015 criticising South Korean President Park Geun-hye’s government and its policies, and the criticisms are visibly increasing in frequency. The topics range from history textbooks to excessive use of force by riot police, but they share one theme: serious concern for South Korean political democracy.

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  • 'Comfort women' reparations are drawing fire, but there was an agreement.

    The U.S. can Ill Afford a Divided Japan-South Korea

    When ‘unthinkable’ events happen, they can change the course of history. The bilateral agreement reached by South Korea and Japan over ‘comfort women’ on 28 December 2015 was one such ‘unthinkable’ event.

    South Korea had few incentives to resolve an issue that allowed it to exercise the moral authority of victimhood. In addition, Japan was not shy about expressing its frustration with its neighbour’s criticism of Tokyo’s handling of past wrongs.

    So how did they reach an agreement, and what does it mean?

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  • Congress is battling over Obamacare and Planned Parenthood.

    Meanwhile, Congress Battles Among Themselves

    The focus of most investors is the rate decision by the Federal Reserve tomorrow.  Since the central bank completed its asset purchase program at the end of last year, a rate hike has been understood as a matter of time. 

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