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China | Taming China’s shadow banking sector

August 22, 2017
China’s shadow banking sector evolved rapidly over the past few years as regulators and financial institutions played a “Whack-A-Mole” game. It occurs in the context of China’s ongoing financial liberalization. Our empirical analysis indicates that the current financial deleveraging and regulation tightening will drag on growth but the impact should be limited.

Mexico | Should the corporate income tax rate be reduced?

August 22, 2017
A few days ago Coparmex presented a document containing a series of tax policy proposals. I believe that some of them are right, while others require more discussion. Here, I refer to one in particular: Coparmex proposes a gradual reduction of the corporate income tax rate from its present level of 30% to 24.6%, which is the average rate applied in the OECD countries

Renewable Energy: the answer is blowing in the wind

August 21, 2017
The use of fossil fuels in electricity production is being eroded by the rapid expansion of clean energy. At the global level, installed capacity to generate electricity through wind energy has increased fivefold since 2007, reaching 487GW in 2016. Wind energy is becoming more competitive.

U.S. | Weekly podcast: residential construction and home sales

August 19, 2017
Weekly economic update focusing on the major economic indicators to be released the week of August 21, 2017. Special topic: residential construction

U.S. | Auto Industry Chartbook (August 2017)

August 15, 2017
Despite supportive economic fundamentals and generous incentives, demand for new vehicles continues to slow down. Consumers continue to show a strong bias towards light-trucks, which reached 63% of total sales in July. The alternative fuel segment continues to expand, a substitution effect is taking place between hybrid-gasoline and increasingly reliable PHEV and BEV.

Electric vehicles: has their time come?

August 14, 2017
Did you know that the electric vehicle (EV) was invented in the nineteenth century, around fifty years before the internal combustion equivalent? In the 1910s, a third of automobiles circulating in the US were electric.

Urbanisation, digitisation and growth in Latin America

August 14, 2017
It is little known that Latin America is a region which is as urban as developed economies and much more so than other emerging regions. How can the region take advantage of the opportunities generated by its high level of urbanisation?

China | Growth started to feel the pain of regulatory tightening

August 14, 2017
After registering a stronger-than-expected performance in the first half of the year, Chinese economy started to show more signs of moderation in July, in line with our expectation. In particular, the authorities’ prudent monetary stance and stepped-up regulatory efforts to tackle a number of financial vulnerabilities seemingly have transmitted to the real economy.

U.S. | Weekly podcast: yield curve, retail sales and housing starts

August 12, 2017
Weekly economic update focusing on the major economic indicators to be released the week of August 14, 2017. Special topic: the U.S. yield curve

China | Will the current RMB appreciation sustainable?

August 11, 2017
The strong performance of the RMB exchange rate in recent months has surprised the market, behind which are a confluence of factors: (i) a steep deprecation of US dollar against other major currencies; (ii) the stronger-than-expected growth momentum in China; (iii) the effective implementation of a series of measures aiming to “promote capital inflows and limit outflows”.

Mexico | Monthly Report on Banking and the Mexican Financial System. August 2017

August 11, 2017
The housing inventory continues to fall and is located below 250 thousand units. CNBV publishes its Report on Financial Savings and Financing in Mexico with figures to March 2017. Banco de México publishes a tool to analyse the conditions of automotive loans. Key regulation issues for Fintechs and financial services

Mexico | Banxico set to take a pause

August 10, 2017
The next monetary policy meeting will be held on Thursday August 10th. We expect Banxico to hold the reference rate at 7.0% inaugurating a period of monetary pause