Industry/Policy View The Impact of US-China Trade Tensions
Eugenio Cerutti, Gita Gopinath, Adil Mohommad, Jun 05, 2019
US-China trade tensions have negatively affected consumers as well as many producers in both countries. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged. While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019.
The Reference Effect of Government Bonds on Corporate Borrowing Costs
Mark J. Flannery, Claire Yurong Hong, Baolian Wang, May 29, 2019
It has been widely argued that government bonds can be used as a reference point for pricing corporate bonds. This “reference” role can reduce the cost of corporate borrowing. The authors study this question by examining a unique experiment in China. China issued two sovereign bonds denominated in U.S. dollars (USD) in October 2017, the first...
The Demand for Reverse Mortgages in China
Katja Hanewald, Hazel Bateman, Hanming Fang, Shang Wu, May 15, 2019
Reverse mortgages are financial products that allow older homeowners to live in their property and receive income for as long as they live; repayment is made from the proceeds of the property sales upon the homeowners’ death. A recent pilot program in China by Happy Life Insurance found almost no takeup of such products. We investigate whether, if reverse...