IMF Working Paper-Demographics, Old-Age Transfers and the Current Account-continued

December 7, 2018--Building on the evolving literature on the topic, this paper reviews the relationship between demographics and long-run capital flows in both theory and in the data. For this purpose, we develop a two region overlapping generations model where countries differ in their population growth and mortality risk.
Besides exploring the implications of demographics for saving and the current account over the long-run, we also study how these might be affected by differences in the coverage and sustainability of old-age transfer schemes. The model predicts that population structure and life expectancy (which affects the need to save to meet old age consumption) affect current account levels, and that while countries with more generous unfunded transfer schemes tend to have lower saving and more capital inflows over the long-run, this effect may be dampened by natural limits (on taxation) of these schemes. The key predictions of the model are generally supported by a rich panel dataset.

view the IMF Working Paper-Demographics, Old-Age Transfers and the Current Account

Source: IMF

Global ETP News
CryptoCompare Publishes Exchange Review for February 2019
March 19, 2019-- CryptoCompare today published its February 2019 Exchange Review, offering institutional and retail investors insights into the cryptocurrency exchange industry.
The February Monthly Review provides the latest exchange rankings; an evaluation of spot vs futures volumes including both crypto exchanges (BitMEX and BitflyerFX) and traditional exchanges (CBOE and CME); and an evaluation of volumes for the top trans-fee mining and decentralised exchanges.
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IMF Working Papers-Liquidity Management under Fixed Exchange Rate with Open Capital Account
March 18, 2019--Summary:
This paper introduces a theoretical framework for liquidity management under fixed exchange rate arrangement, derived from the price-specie flow mechanism of David Hume. The framework highlights that the risk of short-term money market rates un-anchoring from the uncovered interest rate parity due to money and foreign exchange market frictions could jeopardize financial stability and market development.
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Bassanese Bites: Two or less?
March 18, 2019--Week in Review
Confidence returned to global equities last week-after a modest pull back over the previous week-largely due to reassuring US economic data. US retail sales rebounded nicely in January-after worrying softness in Q4-while the US CPI also remained comfortably benign.
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APs Embrace Equity ETFs in February, While Fund Investors Turn Risk-Averse
March 18, 2019--For the second month in a row, investors were net purchasers of mutual fund assets, injecting $64.4 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for February. However, the headline number is slightly misleading.
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BIS-Statement on crypto-assets
March 13, 2019--The past few years have seen a growth in crypto-assets. While the crypto-asset market remains small relative to that of the global financial system, and banks currently have very limited direct exposures, the Committee is of the view that the continued growth of crypto-asset trading platforms and new financial products related to crypto-assets has the potential to raise financial stability concerns and increase risks faced by banks.
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Strategic Beta ETF Market Still Expanding
March 13, 2019--Net new inflows into strategic-beta exchange traded products globally amounted to $87 billion, an organic growth rate of nearly 11%.
Strategic or smart exchange traded products (ETPs) continued to expand in 2018, with net new inflows of $87 billion, translating to an organic growth rate of nearly 11%.
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OECD-G20 GDP Growth Fourth quarter of 2018
March 13, 2019--Growth of real gross domestic product (GDP) in the G20 area was stable at 0.8% in the fourth quarter of 2018. according to provisional estimates while it slowed marginally in the OECD area (to 0.3%. from 0.4%).
Growth rebounded in Japan to 0.5% in the fourth quarter of 2018, following a contraction of 0.6% in the previous quarter.
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ETFGI reports assets invested in global ETF and ETP industry reached a record US$5.32 trillion at the end of February 2019
March 12, 2019-ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that ETFs and ETPs listed Globally gathered net inflows of US$44.31 billion in February, bringing year-to-date net inflows to US$61.66 billion.
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Long Finance-The Global Financial Centres Index 25
March 12, 2019--Highlights
Leading Centres; New York remains in first place in the index, just seven points head of London. Hong Kong is only four points behind London in third and Singapore remains in fourth place; Shanghai remains ahead of Tokyo in fifth place in the index although Tokyo gained ten points in the ratings; Toronto rose 27 points and gained four places to seventh.
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FTSE Russell-New research: Equal weighting refined
March 12, 2019--Equal weighting: one of the oldest and time-tested approaches to reduce concentration risk and enhance diversification.
FTSE Russell's newest research, "Russell 1000 Equal Weight Index: Equal weighting refined," explores the key differences of equal weighting over its cap-weighted counterparts and examines equal weighting's historically strong long-term performance record as a source of lower volatility as well as downside protection during crises.
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FIA Warns of Increased Market Fragmentation Caused by Regulation
March 12, 2019--FIA President and CEO Walt Lukken today released a white paper that expresses FIA's concerns about increased fragmentation of the global listed and cleared derivatives markets due to inconsistent and duplicative regulatory frameworks.
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Bassanese Bites: Global slowdown
March 11, 2019--Week in Review
Last week saw the first decent pull back in global equity markets since the impressive V-shaped recovery began just after Christmas. Growing uncertainty over when and if the US and China will actually conclude a trade deal weighted on sentiment, as did more concerns over slowing global economic growth.
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Stability heightens flash crash risks-research
March 11, 2019--Liquidity breaks down when latent orders are revealed too slowly, quant firm says
Flash crashes are most likely to occur in stable markets when latent liquidity converts to real orders too slowly, new research from quants at Capital Fund Management suggests.
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Despite Brexit, investors still believe in the UK real economy
March 8, 2019--In the latest and largest infrastructure investor survey ever undertaken, the UK ranks third for countries with the most potential in the next five years despite looming Brexit.
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Global regulators launch inquiry into leveraged loans
March 7, 2019-The Financial Stability Board, a top global rulemaker, has launched an examination of parts of the $1.4tn leveraged loan market, as officials intensify scrutiny into potential financial stability risks surrounding corporate debt.
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World Gold Council-Global gold-backed ETF holdings retreated in February
March 7, 2019--After four straight months of inflows, holdings in global gold-backed ETFs and similar products fell in February by 33 tonnes(t) to 2,479t, equivalent to US$1.3bn in outflows. Global assets under management (AUM) fell by 2% in US dollars to US$105bn over the month.
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OECD sees global growth slowing, as Europe weakens and risks persist
March 6, 2019--The global economy is slowing and major risks persist, with growth weakening much more than expected in Europe, according to the OECD's latest Interim Economic Outlook.
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Winthrop Capital Management-2019 1Q Investment Strategy-Fixed Income
March 6, 2019--Domestic economic growth continues to slow into 1Q 2019, and there are three key factors impacting the economy in the first quarter: the government shutdown, the threat of increased tariffs with China and Europe, and Brexit.
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IMF Working Papers-Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy
March 5, 2019--Summary:
This paper estimates the causal effect of fiscal rules on fiscal balances in a panel of 142 countries over the period 1985-2015. Our instrumental variable strategy exploits the geographical diffusion of fiscal rules across countries.
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BIS-Markets retreat and rebound: BIS Quarterly Review
March 5, 2019--Shifting macroeconomic prospects in major economies, and their implications for monetary policy, dominated market developments at the end of 2018 and in the early months of 2019.
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BCBS/IOSCO statement on the final implementation phases of the Margin requirements for non-centrally cleared derivatives
March 5, 2019--Significant progress has been made to implement the framework for margin requirements for non-centrally-cleared derivatives. Based on monitoring of the implementation of the framework across products, jurisdictions and market participants, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) today provide the following guidance to support timely and smooth implementation of the framework and clarify its requirements.
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Investors flock to platinum ETFs on hopes of switch by carmakers
March 5, 2019--Holdings reach four-year high as investors bank on shift away from palladium in catalysts
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BetaShares-Downbeat downunder
March 4, 2019--Week in Review
It was a relatively subdued week on global markets with little in the way of major data or key news events. While hopes of an eventual US-China trade deal continues to underpin sentiment, an element of caution crept into markets last week following Trump's decision to delay the March 1 deadline and also walk away (at least for now) North Korean peace talks.
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MSCI Set to Quadruple Weightings of Chinese A Shares
March 4, 2019--The change will provide U.S. and other investors greater exposure to stocks that trade only in China
MSCI is quadrupling the weighting of domestically traded Chinese stocks in its global indexes starting this May.
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IMF Working Papers-Nonlinearity Between the Shadow Economy and Level of Development
March 1, 2019--Summary:
This paper is the first attempt to directly explore the long-run nonlinear relationship between the shadow economy and level of development. Using a dataset of 158 countries over the period from 1996 to 2015, our results reveal a robust U-shaped relationship between the shadow economy size and GDP per capita.
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IMF Working paper-Cash Use Across Countries and the Demand for Central Bank Digital Currency
March 1, 2019--Summary:
The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card-not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments).
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ETFGI reports Smart Beta ETFs and ETPs listed globally gather net inflows of US$7.38 billion during January 2019
February 28, 2019--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that equity-based Smart Beta ETFs and ETPs listed globally gathered net inflows of US$7.38 billion during January.
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MSCI speeds up boost to China's weighting in emerging markets index
February 28, 2019--MSCI has accelerated an increase in China's weighting in its flagship emerging markets index, an influential benchmark tracked by $1.9tn of funds, reflecting how Beijing has opened up its markets to foreign investors in recent years.
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A Chinese economist explains what we get wrong about the trade war
February 27, 2019--It's one of the biggest threats to the global economy, and it could finally be near a resolution: the trade war between China and the United States.
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ETFGI reports Assets invested in Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally reaches a record US$25 Bn at the end of January 2019
February 27, 2019--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally gathered net inflows of US$730 million during January.
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IMF Working Papers-Sovereigns and Financial Intermediaries Spillovers
February 27, 2019--Summary:
We examine the spillover effects between sovereigns and banks in a model with a heterogeneous banking system. An increase in sovereign's default risk affects financial intermediaries through two channels in this model. First, banks' funding costs might increase, inducing higher interest rates on loans and bonds and a cut back in these assets.
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OECD Risks rising in corporate debt market
February 25, 2019--Global outstanding debt in the form of corporate bonds issued by non-financial companies has hit record levels, reaching almost USD 13 trillion at the end of 2018. This is double the amount outstanding in real terms before the 2008 financial crisis, according to a new OECD paper.
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FTSE Russell and Nomura partner to launch first factor-based indexes linked to World Government Bond Index (WGBI)
February 22, 2019--New FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series launches
Meets investor demand for a fixed income "Carry" factor-based index for sovereign debt
FTSE Russell partners with Nomura Securities to develop series
Select Japanese pensions first to adopt series with over USD 1bn allocation into index-tracking funds
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Risk of 'Stranded Nations" Highlights Need for Sovereign Wealth Funds to Prepare for the Age of Green Energy
February 22, 2019--Despite having huge financial reserves, many fossil-fuel-rich economies are at risk of becoming "stranded nations" as efforts ramp up to avoid the worst effects of climate change and transition away from fossil fuels
With less than 0.2% of their $8 trillion assets invested in green or renewable energies, the world's sovereign wealth funds have a powerful role to play in helping prepare economies for the impending energy transition.
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This week from the FTSE Russell Blog: Slowing global growth likely to test risk appetite
February 22, 2019--Fixed income cartography meets index methodology
Cartography, a fancy word to describe the design of maps, is similar to methodology, another fancy word that describes the design of indexes.
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Derivatives Trading Costs Could Double
February 22, 2019--Derivatives trading costs could nearly double if volatility increases, which requires firms to ensure they have an efficient hedging strategy in place.
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ETFGI reports assets invested in actively managed ETFs and ETPs listed globally rises to US$112 billion, highest on record
February 21, 2019--ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today that actively managed ETFs and ETPs gathered net inflows of US$1.48 billion in January.
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Global ETF Review 2018: Insights into a multi-trillion dollar industry
February 20, 2019--Quick read-Summary:
We launched the first edition of the quarterly BetaShares Global ETF Review-analysing the key trends & developments in the industry outside Australia.
The global ETF industry ended 2018 at US$4.8 trillion in assets under management (AuM), posting a robust annual growth rate of 20% since 2005.
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Credit rating agencies turn attention to ESG risk
February 20, 2019--Credit rating agencies turn attention to ESG risk. Investors demand ethical analysis to help them avoid companies liable to crises.
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Once hailed as unhackable, blockchains are now getting hacked
February 19, 2019--More and more security holes are appearing in cryptocurrency and smart contract platforms, and some are fundamental to the way they were built.
arly last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase's popular exchange platform.
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Advisory fees push commissions further into the background
February 19, 2019--Fee-based advice is not perfect, but most clients prefer it over a commission-based option
When there's a financial professional in the picture, investors mostly prefer paying fees based on assets under management.
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Price Tag for Sustainable Infrastructure Spending in Developing Countries is 4.5% of GDP
February 19, 2019--A new World Bank report finds that investments of 4.5 percent of GDP will allow developing countries achieve their infrastructure-related Sustainable Development Goals and stay on track to limit climate change to up to 2°C. Beyond the Gap, also finds infrastructure investment compatible with full decarbonization need not cost more than more polluting alternatives.
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BIS-Over-the-counter market liquidity and securities lending
February 19, 2019--Summary
This paper studies how securities lending affects over-the-counter market (OTC) liquidity.
The financial crisis of 2007-09 kindled a wider interest in studies of liquidity in OTC financial markets, such as the corporate bond market. Buyers and sellers in these markets trade without centralised exchanges. The greater time and resources needed to complete trades can impede market liquidity-the ability to transact efficiently.
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Cryptoassets: Venture into the Unknown
February 18, 2019--Last year, investors watched as the prices of various cryptoassets collapsed. The industry's most famous digital asset, Bitcoin, lost roughly three quarters of its value, as it slid from more than $16,000 a coin to less than $4,000.
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BetaShares-Buy the rumour
February 18, 2019--Week in Review
It was another positive week for global stocks, as ongoing encouraging talk about progress in US-China trade talks remained the gift that keeps on giving. Last week it was Trump's announced willingness to extend the March 1 deadline that boosted sentiment.
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TradeWeb Trading Activity Starts The New Year Strong
February 18, 2019--Trading activity set a new record in January 2019 following the previous high set in December 2018. Average daily volume (ADV) for Tradeweb Markets of $624.5 billion (bn) across rates, credit, money markets and equities during the month was up 20.7 percent (%) year over year and average daily trades totaled 51,221.
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