Robert Kahn

Macro and Markets

Robert Kahn analyzes economic policies for an integrated world.

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October Monthly: Breaking the Sanctions Code

by Robert Kahn

At last week’s World Bank and IMF meetings, I heard sharply divided views about the future path of sanctions and what lessons should be drawn from their use against Russia. Have they been successful, and at what cost to the West? Should sanctions be extended to the payments system, which enhances their power but risks damaging a global public good? What signal does it send to other countries? With growing evidence that sanctions are materially damaging the Russian economy, concerns have been raised that sanctions could become too easy an option for U.S. policymakers.

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Russian Sanctions: Europe Prepares to Act

by Robert Kahn

The Europeans look set to surprise us with significant economic sanctions against Russia (see here and here) that exceed in some respects U.S. measures. The United States likely would expand their sanctions in parallel. I yesterday published an op-ed on what we should make of the moves, and assuming reports of an agreement are true, I think it is worth highlighting four takeaways from that piece and recent developments:

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Addressing America’s Infrastructure Challenge

by Robert Kahn

America’s woeful lack of infrastructure spending is well appreciated.  What is missing is action to address it.  My colleague Heidi Crebo-Rediker writes that the Administration has now launched a new Transportation Investment Center to share best practice, provide technical assistance, and give support for accessing credit programs for new infrastructure projects. This one-stop shop within the Department of Transportation has much in common with (and looks to draw heavily on) Heidi’s earlier proposal for an “Infrastructure USA” initiative.  While no silver bullet, it’s a valuable first step.

Russian Sanctions: The United States Takes the Lead

by Robert Kahn

The United States has taken what, on first read, looks to be a significant step today, extending sanctions ( see also here) to block new debt and equity issuance by a number of energy, financial and military companies.  It is not quite full “sectoral” sanctions–both because it is limited in what it blocks (new debt and equity of maturity greater than 90 days) and because it excludes Sberbank, which holds the majority of Russian deposits. But I would argue that the reach of this new executive order in terms of institutions covered is sufficiently broad that the effects on the Russian financial system could be systemic.

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Changing Course: Financial Sanctions on Russia

by Robert Kahn

There are reports this morning that the Obama administration is contemplating extending economic sanctions against two large Russian banks– Gazprombank and  Vnesheconombank (VEB).  This is a step I have called for here and here.  If true, this is a significant event and, given the magnitude of Russia’s links to global financial markets, introduces a new era in the use of economic sanctions.  It also makes sense to do this now, as the current strategy is not working to deter Russian aggression against Ukraine.

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Tunisia’s Historic Transformation Deserves U.S. Support

by Guest Author

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Fischer to the Fed

by Robert Kahn

President Obama announced that he intends to nominate Stan Fischer, the former head of Israel’s central bank, to serve as the vice chairman of the Federal Reserve.  It also was announced that he would nominate Lael Brainard, the former Treasury undersecretary for international affairs, and would renominate current Fed Governor Jerome Powell to another term on the Fed Board.  The moves had been expected–nonetheless, it is worth celebrating an excellent set of appointments.  Stan Fischer is one of the leading macroeconomists and economic policymakers of our generation, and the Fed is fortunate to have him.  (Full disclosure–Stan is a former professor of mine, and currently a colleague at CFR.)  Jerome Powell has, by all accounts, played an important role at the Fed, and Lael Brainard brings a wealth of international policy experience to the position.

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Doing Business at the World Bank

by Robert Kahn

A showdown is looming at the World Bank over whether to discontinue or water down the Bank’s annual “Doing Business” Report.  As reported here, and blogged about here, and here, China is leading the charge against the report, which is one of the Bank’s most controversial and influential projects.  The U.S. government has been lobbying in favor of Doing Business, but so far has failed to generate the degree of high-level support from other G-20 countries or thought leaders that will likely be needed to save the report.  A committee established by the Bank and headed by South African Planning Minister (and former finance minister) Trevor Manuel to assess the future of Doing Business will report as early as next week.  Based on comments from advisors to the Manuel Committee, it looks as if its conclusion will be negative.  After the report is received, President Kim will make his recommendation, which could involve eliminating the report or gutting it through presenting its results qualitatively or in buckets that reduce the transparency that is at the core of the exercise.

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