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Discussion Paper
China’s Continuing Credit Boom
Debt in China has increased dramatically in recent years, accounting for roughly one-half of all new credit created globally since 2005. The country’s share of total global credit is nearly 25 percent, up from 5 percent ten years ago. By some measures (as documented below), China’s credit boom has reached the point where countries typically encounter financial stress, which could spill over to international markets given the size of the Chinese economy. To better understand the associated risks, it is important to examine the drivers of China’s expansion in credit, the increasing ...
Vaccines Were Key to Curbing COVID-19 in Europe; Other Measures Also Useful
Vaccine uptake was the most important factor in reducing effective transmission rates in 2021, though the other factors helped bring infections under control.
Briefing
Can China Avoid a Liquidity-Trap Recession? Some Unintended Consequences of Macroprudential Policies
A liquidity trap is a nightmare for central banks because the zero lower bound constrains them from further reducing the nominal interest rate to stimulate the economy. The nightmare can be long: For example, Japan — formerly the world's second-largest economy after the U.S. — has been battling its liquidity trap since its real-estate bubble burst in 1990. Recently, some commentators have argued that a liquidity trap is imminent in China — currently the world's second-largest economy — pointing to signs such as deposit surge (despite declining interest rates), mounting deflationary ...