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November

Wed 9 Nov 2016 / North America,Europe

Trump the contrarian heads for White House

A campaign unparalleled in divisiveness and vehemence has finished with Donald Trump, the ultimate contrarian, defeating the odds and winning the race for the White House. The new battle now starting – over immigration, trade, interest rates and globalisation – could be still tougher than the unedifying struggle with Hillary Clinton that has just juddered to a bruising end.

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Wed 23 Nov 2016 / North America

Shake-up of monetary policy personnel

By a quirk of fate, the world's six top central bank governors all leave office in the next three years – bequeathing to as yet unknown successors the twin tasks of coping with credit strains and defending central banks' independence from political encroachment. Much attention has focused on Janet Yellen, whose four-year term ends in February 2018. Donald Trump as US president is expected to replace her with a more pliable candidate, but an impending shake-up goes much wider than this.

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Tue 8 Nov 2016 / Europe

'Hotel California' might apply to UK too

The celebrated melody 'Hotel California' by the Eagles – featuring the lyrics ‘You can check out any time you like, but you can never leave’ – is a new favourite, for various wry reasons, at the German Bundesbank. Amid the furore over last week’s UK High Court ruling that parliament should decide on triggering Britain’s exit from the European Union, the song appears more than ever a metaphor for difficult-to-break EU ties.

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Tue 29 Nov 2016 / Europe

ECB Target-2 balances keep rising

Since the beginning of the European Central Bank’s asset purchase programme in March 2015, internal claims and liabilities in the euro area among national central banks have been rising steadily. ECB representatives have played down the phenomenon, arguing that NCBs themselves are responsible for the change in the Target-2 balances. However, policy-makers should be aware of the risk that QE is contributing significantly to Target-2 disequilibrium.

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Sun 6 Nov 2016 / Europe

Brexit brouhaha

On 3 November three judges in the High Court of Justice ruled that the UK parliament must be consulted before Article 50 of the 2009 Treaty of Lisbon can be activated. The government has appealed to the Supreme Court, which is likely to hear the case in early December. The government failed to make its case stick. Had it done so successfully, there would be no need to pit MPs against popular opinion.

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Wed 30 Nov 2016 / Europe

ECB’s dilemma over bond purchases

The ECB is in a near-insoluble dilemma over quantitative easing as it prepares to adjust monthly bond-buying on 8 December, just after Italy’s 4 December constitutional referendum that will decide Matteo Renzi’s political future. If Italians vote to reject Renzi’s proposals, the ECB might have little choice but to maintain the €80bn a month programme. If Italy votes Yes, however, the ECB will have a greater incentive to start ‘tapering’ its asset purchases.

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Fri 4 Nov 2016 / Asia Pacific

Japan - not as sickly as it seems

Japan’s economy has supposedly spent a quarter of a century in the doldrums, the sick man of Asia. According to the International Monetary Fund, it is one of the worst performing advanced economies. It has been ill with remissions, a roller-coaster ride, but not necessarily downwards. Japan’s performance can be judged relative to its own past or to that of other countries. The former, indisputably, has been much worse. The latter depends on the metrics by which performance is judged.

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Wed 16 Nov 2016 / Europe

Setting farmers free

The CAP is significant for Britain and the EU. Since the 1960s European farmers have been subsidised by taxpayers and consumers. Today the emphasis has shifted. Guaranteed minimum prices have been substantially reduced. Instead, a single payments system provides subsidies determined by how much land is said to be farmed. The CAP is disastrous for free trade negotiations. EU tariffs on food imports are at least 18%, but Brexit can and should allow free trade in food.

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Thu 10 Nov 2016 / North America

Trump will not end the march of progress

Somewhere along the way, Donald Trump discovered that his mindless narcissism was a perfect counterweight to the increasingly complicated messages sent by leaders of modern liberal political culture. He seemed to sense that, for many Americans, the new post-modern culture was arriving too quickly. We can now see more clearly that the post-modern world, too, is marked by the painful frustrations which have marked every societal advance.

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Fri 25 Nov 2016

Demography matters

The question of whether changing demographics will affect inflation or economic growth is neglected in the media, which prefers high frequency indicators such as monthly employment growth. Population figures change slowly and are rarely newsworthy. Nonetheless, demography matter more for long-term economic prospects than cyclical swings. In theory, demographic forecasts are more reliable than cyclical ones, but in practice factors such as changing birth rates and immigration makes them hazardous.

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