Brad Setser
The Lowy Institute
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Past articles by Brad:
COVIDcast Episode 12: Pandemic, emerging markets, and US dollar
The latest episode in a podcast to discuss the implications of coronavirus for Australia, the region and the world. → Read More
Why Global Trade Imbalances Could Get Worse Before They Get Better…
Transatlantic imbalances reflect Europe's demand deficit, which should be easy to solve (but isn't). Transpacific imbalances haven't disappeared. And are likely harder to solve, as they stem from an underlying savings surplus. → Read More
The IMF's (New) China Problem
If China ever followed the IMF’s fiscal advice, it would go back to running large trade surpluses—and its exchange rate would be undervalued again in the IMF's models. → Read More
The Trump Tax Reform, As Seen in the U.S. Balance of Payments Data
The international side of the Tax Cuts and Jobs Act was a real reform, not just a straight-forward cut in the rate. It ended deferral, and shifted to a (mostly) territorial tax system. Yet, judging from the balance of payments data, it didn't get rid of the incentive for firms to offshore profits to low-tax jurisdictions. The global minimum is too low—and there are too many incentives to shift… → Read More
President Xi, Still the Deglobalizer in Chief…
Can China generate new friends by strategically opening its markets while…also importing less?(Don't judge China just by changes in its tariffs, the Chinese state has many other policy tools to limit imports) → Read More
Three Recommended Changes to U.S. Currency Policy
I have a new Policy Innovation Memo that recommends three changes to U.S. currency policy, and specifically, three changes to the U.S. Treasury’s For… → Read More
Korea, the “Germany” of Northeast Asia…
Korea has no shortage of fiscal space. It should use it. → Read More
Vietnam Looks To Be Winning Trump's Trade War
Vietnam's exports to the U.S. are growing fast. It also runs an overall current account surplus. If it has resumed purchasing dollars in the foreign exchange market to keep its currency from appreciating, it may soon be a test case for Trump's policy toward countries that intervene to maintain an undervalued currency. → Read More
When Tax Drives the Trade Data
The pharmaceutical industry's tax strategies appear to have a large impact on the trade data. There isn't any other obvious explanation for why the (goods) deficit in pharmaceuticals exceeds the surplus in civil aircraft.. → Read More
The Fall in China's Current Account Surplus Was Not Replicated Across Asia
China's surplus is down relative to its pre-global crisis level, both in dollar terms and as a percent of China's own GDP. The same cannot be said of China's neighbors. East and Southeast Asia are still a substantial exporters of savings to the rest of the world. → Read More
China’s Still-Too-High Savings Makes China 2025 a Bigger Global Risk
How the fragile macro-economic base of China’s external adjustment could intersect with China 2025 and generate a new "China" shock. → Read More
Why China's Incomplete Macroeconomic Adjustment Makes China 2025 a Bigger Risk
How the fragile macro-economic base of China’s external adjustment could intersect with China 2025 and generate a new "China" shock. → Read More
China's Slowdown and the World Economy
China, it now seems, has entered into a real slump.There were plenty of leading indicators. I should have given more weight, for example, to the slow… → Read More
Will China’s Currency Hit a Wall?
Worry about China’s slowing economy in 2019, not its balance of payments… → Read More
Time for China, Germany, the Netherlands, and Korea to Step Up
The world's surplus countries have the ability to do more to support global growth. → Read More
Why Haven't U.S. Exports of Manufactures Kept Pace with China's Growth?
China is a big country, and, at least until recently, it was growing relatively fast. So it stands to reason that it should have been among the most … → Read More
Why Hasn't China Needed to Intervene More This Year?
The prospects for moving from a three month truce to a more durable ceasefire and eventual resolution of the current trade conflict with China have b… → Read More
China’s Naturally Triangular Trade… And What China’s Bilateral Trade Data is Telling us Right Now
The bilateral trade data is useful, even if Trump doesn’t exactly interpret it correctly… → Read More
China Should Import More
China's low of level of imports of manufactures stands out, and China 2025 would reduce imports further → Read More
Where Will the Yuan Go Next? China's Big Choice
China could widen the trading band around its currency in response to Trump's tariffs, but that wouldn't give it full policy autonomy. It would still need to defend the new edge of any trading band. → Read More