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Mexico seeks to solidify rank as top U.S. trade partner, push further past China
Mexico's emergence followed fractious U.S. relations with China, which had moved past Canada to claim the top trading spot in 2014. The dynamic changed in 2018 when the U.S. imposed tariffs on China’s goods and with subsequent pandemic-era supply-chain disruptions that altered international trade and investment flows worldwide.
Refilling the Strategic Petroleum Reserve offers chance to recalibrate its size
A series of emergency drawdowns, exchanges and planned sales since 2020 have reduced crude oil inventories held by the U.S. Strategic Petroleum Reserve to a 40-year low. Calls to fully refill the SPR in recent months raise important questions.
International factors broadly explain postpandemic inflation
The recent co-movement of inflation across countries, including the U.S., can be explained in part by global and regional factors. Policymakers, who have tended to more closely look closer to home may want to more broadly consider global events and pressures when addressing changing inflation pressures.
Journal Article
Mexican IT services firm pitches ‘nearshoring’ as alternative to overseas ties
Softek chief executive Beni Lopez discusses the competitive challenges the firm faces in the North American market, where many of the world’s leading tech services firms are based, and the genesis of the company’s nearshoring strategy.
Threat of global housing slide looms amid rising rates
While house-price growth has recently begun to moderate—or, in some countries, to decline—the risk of a deep global housing slide persists.
Briefing
When Are Tariffs Optimal?
Economic theory and historical evidence demonstrate that tariffs typically distort markets, lead to inefficient resource allocation, create deadweight losses and trigger harmful trade conflicts.While tariffs might improve a large country's terms of trade under strict theoretical conditions (market power, no retaliation), empirical evidence and real-world dynamics typically invalidate these assumptions.Repeated tariff impositions can escalate into trade wars, reducing economic welfare for all involved nations and emphasizing the importance of cooperative trade agreements.
Briefing
The Debt Brake: Unsafe at Any Speed?
The German debt brake is designed to prevent excessive accumulation of government debt. It is not just a simple fiscal policy rule but enshrined in the country's constitution to prevent political meddling.While it has served its stated purpose, it is also often blamed for Germany's lackluster economic performance in the form of low productivity and low GDP growth when compared to the other countries of the eurozone and especially the U.S.Theoretical research shows that fiscal rules like the debt brake can potentially destabilize economies or lead to real and nominal indeterminacy.
Dallas Fed, Latin American central banks explore financial stability risks
The COVID-19 pandemic, recent monetary tightening and a strengthening U.S. dollar were the themes explored during a recent conference organized by the Federal Reserve Bank of Dallas and the Center for Latin American Monetary Studies (CEMLA) and held at CEMLA’s Mexico City headquarters.
Capital flowed from emerging markets as pandemic, economic cycle took hold
Fluctuations in the global financial cycle, reflecting impacts from the COVID crisis, account for roughly one-third of the movement in emerging-market inflows during 2020–23.
Disparate supply-side forces gave U.S. economy an edge
The U.S. economy boasts robust growth and slowing inflation despite the highest interest rates in two decades. Such performance isn’t common globally, especially among other advanced economies, revealing crucial differences in the fundamental factors driving inflation and growth.