Reminiscent of the ‘Greenspan conundrum’, since 18 September 2024 the Federal Reserve has cut short-term interest rates by 100 basis points, while 10-year interest rates have risen by 100 basis points, defying conventional expectations. This column argues that this ‘reverse conundrum’ can be explained by a sharp decline in foreign official demand for US Treasuries […]
The US stands unrivalled as both a military and financial superpower. This column uses a game-theoretic model to show how the global dominance of the US dollar – what economists call the ‘exorbitant privilege’ – is inextricably linked to America’s unmatched military strength. This dual hegemony allows the US to finance its defence spending at […]
At the 2023 UN Climate Change Conference, goals were set to transition away from fossil fuels, triple renewable capacity, and double energy efficiency improvements by 2030, requiring a substantial increase in clean energy investments among emerging market and developing economies. Against the backdrop of tight fiscal space and relatively high financing costs, foreign direct investment […]
