Lessons Unlearned? Corporate Debt in Emerging Markets. Laura Alfaro, May 2017, Paper, “This paper documents a set of stylized facts about leverage and financial fragility in the nonfinancial corporate sector in emerging markets since the Global Financial Crisis (GFC). Corporate debt vulnerability indicators prior to the Asian Financial Crisis (AFC) attributed to corporate financial roots provide a benchmark for comparison. The firm-level data suggest that emerging markets post-GFC have lower leverage ratios than the five Asian crisis countries (Asian Five) in the run-up to the AFC. However, a broader set of emerging market countries show weaker liquidity, solvency, and profitability indicators.Link

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Trump Hopes To Lure Companies Back To The U.S. With Lower Tax Rates. C. Fritz Foley, May 29, 2017, Audio, “A key part of President Trump’s tax plan is to repatriate corporate profits held overseas back to the U.S. With the lure of lower corporate rates, the idea is that companies will free up overseas earnings and instead invest in jobs and equipment in the U.S. A similar scheme was tried during the administration of George W. Bush, but companies used most of the money on stock buybacks or to pay dividends to shareholders.Link

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Trump’s Magic Budget. Carmen Reinhart, May 29, 2017, Opinion, “US President Donald Trump’s administration has now released its budget plans for fiscal year 2018. Among the details provided in the document, entitled America First – A Budget Blueprint to Make America Great Again, are projections for the expected path of gross federal debt as a percentage of GDP, which is shown to decline from its current level of about 106% to about 80% in 2027. Debt held by the public is expected to mirror this path, shrinking from 77% to 60% over this period.Link

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The Case Against Subsidizing Housing Debt. Jeffrey Frankel, May 29, 2017, Opinion, “At the end of the first quarter, according to the Federal Reserve Bank of New York, American consumer debt for the first time exceeded its previous peak (in dollars), reached in the third quarter of 2008, just as the global financial crisis erupted. Although car loans and student debt have been rising especially rapidly, housing debt remains more than two-thirds of the $12.7 trillion total.Link

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Having a Stake: Evidence and Implications for Broadbased Employee Stock Ownership and Profit Sharing. Richard Freeman, May 28, 2017, Paper, “At the center of the ongoing debate about the causes and cures of inequality in America today is the vast difference in wealth between owners and workers. As many have noted, that gap was not nearly as large in the middle of the twentieth century as it has become in the first two decades of the 21st century, where owners and other executives make many multiples of what workers make – largely through grants of stock in lieu of salary.Link

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US with an inexperienced President, over-leveraged China are biggest risks. Kenneth Rogoff, May 24, 2017, Video, “Talking to Punita Kumari Sinha of ET Now, Kenneth Rogoff, Economics Professor, Harvard University, says about 80% of US currency is in 100 dollar…” Link

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Trump’s “China deal” is only a good deal for China. Lawrence Summers, May 24, 2017, Opinion, “The events of the last week have crowded out reflection on economic policy. But things have been happening. Commerce Secretary Wilbur Ross described the trade deal reached with China earlier this month as “pretty much a herculean accomplishment….This is more than has been done in the history of U.S.-China relations on trade.”Link

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‘Secular Stagnation’ Even Truer Today. Lawrence Summers, May 25, 2017, Opinion, “Larry Summers is doubling down on his secular-stagnation hypothesis. The Harvard economist and former Treasury secretary first offered the bleak diagnosis in November 2013 at an International Monetary Fund conference. The U.S. and much of the rest of the world, he suggested, was suffering from a chronic shortage…Link

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Trump Administration’s Attention Not on Value-Based Purchasing. David Cutler, May 23, 2017, Video, “The Trump administration’s healthcare priorities have mainly focused on replacing the Affordable Care Act or reforming Medicaid, leading to concerns that value-based purchasing efforts will be left in the dust, said David M. Cutler, PhD, of Harvard University.Link

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