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Moderator:  Calla Wiemer (calla.wiemer@acaes.us)

The 'New Fiscal Consensus' As Per Blanchard & Subramanian Interpreted for Southeast Asia

The 'new fiscal consensus' holds that major advanced economies have the fiscal space to go big on stimulus and should do so in response to the pandemic. In a recent webinar sponsored by the Ashoka Centre for Economic Policy in Haryana, India, Olivier Blanchard made the case for the new fiscal consensus and Arvind Subramanian then responded on the relevance for emerging market economies such as India. This post extends elements of their analysis to the major emerging economies of Southeast Asia: Indonesia; Malaysia; the Philippines; Thailand; and Vietnam.

Blanchard explained that to preserve a stable debt/GDP ratio, the following condition must hold:

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ASEAN and Megaregionalism: Challenges Ahead

Co-Authors: Peter A. Petri; Fan Zhai    

In December 2015 the ASEAN Economic Community (AEC) went into effect. It was the culmination of a process that began with the Bangkok Declaration in 1967 and represents the most significant economic integration initiative among developing economies in the world. A notable milestone to be sure, but the region has a long way to go before it will be able to attain its original goal of creating a 21st century single market and production base. Meanwhile, ASEAN needs to nest the next stage of its cooperation program in the context of emerging megaregional trade arrangements, namely, the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), and the future expansions of both. In addition, it has to do this at a challenging time for the global trading system upon which it depends; the US-China trade war continues with no clear resolution on the horizon, the World Trade Organisation is at an impasse, and the Covid-19 pandemic has decimated global trade in the short run and may have long-term implications (UNCTAD 2020).

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