We show that incorporating uninsurable countercyclical income risk into a standard international RBC model can qualitatively and quantitatively account for the quantity puzzles in open-economy macro, namely (i) the Backus-Smith puzzle, (ii) the Backus-Kehoe-Kydland puzzle and (iii) the weak correlation between the trade balance and the exchange rate. We also show that our model can…
Reality check—top earners already pay majority of taxes in Canada beng Thu, 07/16/2026 – 07:35 EST. READ TIME 3 MIN. As Canadians grapple with a sputtering economy and the cost of living, some advocates want governments in Canada to increase taxes on high-income individuals. According to this narrative, the tax system is “unfair” and governments…
Economics Jul 14, 2026 Nouriel Roubini Despite this year’s US/Israeli-Iran war causing the largest-ever disruption to global oil supplies, the shocks of the 1970s had a greater impact. Because oil has been used as a weapon for so long, markets, policymakers, and…
We are grateful to Jensen Ahokovi and Shantanu Kamat for their research assistance. We would also like to thank Vincent Armantano, David Arnold, Julia Barezneva, Vafa Behnam, Julian Betts, Jonathan Brownrigg, Richard Carson, Gabriel Canedo Riedel, Matthew Chingos, Julie Berry Cullen, Gordon Dahl, Ricardo Di Cato, Maria de la Paz Ferro, Martha Fiehn, Erick Gong,…
Executive Summary The discussion included the overall calibration of bank capital requirements in the UK, as well as the areas identified by the FPC for further work in December, which were: the usability of buffers, the functioning of the leverage ratio framework; and the interactions between different elements of the capital stack, particularly in relation…
The framework that has long guided development economics no longer reflects how modern economies actually create value. As the boundaries that once separated sectors become blurred, prosperity increasingly depends on how economies build the ecosystems that sustain technological progress and nurture new productive capacity. CAPE TOWN—The economist Dani Rodrik recently reopened one of development economics’…
Please enable JavaScript if it is disabled in your browser or access the information through the links provided below. July 16, 2026 Agencies issue joint statement on handling of highly sensitive information during bank examinations Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation…
Are orbital data centers possible? We might have another data point to help answer that question after today’s scheduled SpaceX Starship launch. The newly public company is currently the only player with a viable path to building space-based infrastructure. And if you’re imagining a massive AI data center build-out in space, you’re also assuming lots…
Photo by Brett Hondow, Pixabay The US federal government’s Technology Modernization Fund (TMF) has asked agencies to submit “high-impact and shovel-ready” project proposals for improving the use of technology in permitting and planning decisions, and in AI adoption. The TMF – a funding initiative created in 2017 by the General Services Administration (GSA) to modernise…
While investors are concerned about a memory peak, analysts say the stock still looks cheap relative to various earnings scenarios.