Economic Diplomacy Initiative

In this week’s update on COVID-19 and Economic Diplomacy: Eurozone governments fiscal deficit nears €1T. The Chinese economy will be the only major economy to grow this year as the U.S. struggles to negotiate a fiscal stimulus bill.

The IMF states that austerity isn’t needed and that the pandemic will wreak lasting damage on living standards. Eight million Americans have fallen into poverty as Cares Act aid runs out. Zambia is likely to be the first African country to default due to the pandemic.

In this week’s update on COVID-19 and Economic Diplomacy: Fed Chair Jerome Powell states the need for more fiscal stimulus. Spain announces plans on how it will use the EU recovery fund. Foreign investor demand for Chinese assets raises prospects of the renminbi becoming a currency reserve.

In this week’s update on COVID-19 and Economic Diplomacy: Eurozone’s economic rebound shows signs of slowing. Poverty in Asia will rise for the first time in 20 years. A Federal Reserve survey found inequality increased during 2016-2019.

In this week’s update on COVID-19 and Economic Diplomacy: Global worker income fell by 10% equating to a $3.5 trillion loss. Without fiscal support, the U.S. economic recovery is at risk while the ECB argues to make the recovery fund permanent. 

In this brief, we outline the common motivations driving central bank work on CBDCs. We then explore CBDCs’ potential impacts on financial inclusion, a primary motivation in developing and emerging markets that has also gained significant traction in developed economies during the COVID-19 related global recession. We conclude that for CBDCs to achieve its financial inclusion goals, more technical advancement in offline adaptability and policy deliberations around issues of identity and traceability are needed. 
 

In this week’s update on COVID-19 and Economic Diplomacy: Eurozone recovery is beginning to slow. China announces its “dual circulation” policy, and major emerging economies struggle to respond to the pandemic.

In this week’s update on COVID-19 and Economic Diplomacy: The eurozone slides into deflation and emerging economies' GDP shrinks significantly. 

In this week’s update on COVID-19 and Economic Diplomacy: The Fed announces changes to its policy framework. The UK exceeded £2 trillion in public debt and GDP is expected to increase; however, labor market weaknesses threaten mass unemployment. The pandemic has only worsened Latin America's economy.

In this week’s update on COVID-19 and Economic Diplomacy: Experts are concerned that the U.S. economy could struggle to recover as states face a $555 billion budget shortfall. EU employment fell a record 2.6% in the second quarter.