Annual Report

Letter from the President

The Peterson Institute for International Economics navigated another year of technological, economic, and social turbulence in 2024. As always, we confronted the challenge of helping policymakers, scholars, and the public understand the costs and benefits of a global economy beset by rising conflicts. More than ever, the Institute must continue to take the lead in advocating greater international cooperation, not less, to address common issues like trade, climate change, industrial policies, pandemics, fiscal pressures, and aging populations. Deliberations about how to do so require evidence-based, nonpartisan, and independent analysis, as well as practical solutions from a respected source. We will continue to fulfil that role in the year ahead.  

The Institute informs the world’s important economic policy debates through rigorous, intellectually open, and nonpartisan research. We strive to identify and offer workable proposals to improve human welfare. We share our research and analysis through scholarly papers and commentary, convening high-level meetings and reaching thought leaders, business organizations, educators, and policymakers. And we are expanding our impact by employing new outreach tools and approaches to engage broader audiences.

In this spirit, I am proud to present the Peterson Institute’s annual review of our scholars’ work and our public outreach.     

The Peterson Institute made significant contributions on numerous critical policy issues in 2024, including:    

• Threats to the global trading system and economic cooperation in general from leaders and political candidates in the United States, Europe, Latin America, India, and elsewhere advocating tariffs, industrial subsidies, export controls, and abandonment of the World Trade Organization.   
• The economic impact of immigration and potential restrictions and deportations.   
• Monetary and fiscal policies to combat inflation and unemployment while promoting economic growth in the United States, Europe, and other economies.    
• China’s economic challenges and nationalist policies, such as its slowing growth, property bust, industrial overcapacity, deflation, urbanization, stimulus efforts, and its rising tensions with the United States and Europe.   
• The growing intersection of economic and national security policies such as sanctions, export controls, and industrial subsidies in the United States, China, and other countries. The expanding role of sanctions and larger national security concerns affecting economic diplomacy by the United States, China, and other countries.    
• The economic challenges posed by combating climate change, including the transition from fossil fuels to green technology, the shift to electric vehicles, energy security, decarbonization, and access to rare minerals.   
• Challenges and opportunities faced by countries, especially in East Asia, caught in between rising tensions resulting from the US-China rivalry.    
• The declining role of manufacturing in providing inclusive growth in the United States, China, and other economies. 

Looking forward to the rest of 2025, we have underway a robust research agenda, continuing on these themes but also addressing:   

• The global economic impacts of new barriers to trade, investment, and immigration, as well as the emergence of possible successors to the rules-based trading system.   
• The reasons and economic implications of aging and shrinking populations, and the lessons from Japan’s policy responses.   
• Different approaches to regulating artificial intelligence in the United States, Europe, and elsewhere, emphasizing the cost-benefit tradeoffs, the effectiveness of current policies, and potential improvements.   
• New challenges and opportunities in combating climate change, such as striking global agreements on carbon pricing, and the impact of climate-related policies on workers and capital.   
• Ways to put US fiscal policy on a sustainable path as Washington faces the economic implications of impending tax and spending changes.   
• Latin American economic policies, including the struggles of Mexico, Argentina, Brazil, and other economies to achieve economic growth and stability amid rising tensions over trade and migration.    
• China’s economic future, including detailed analysis of rising state control of its public and private finance sectors.   
• East Asian and other regional concerns, particularly South Korea’s and Japan’s economic challenges and Russia’s expansionary policies in Europe and the effect of sanctions on its economy. We will step up our examination of how countries cope with the US-China rivalry.    

As always, I wish to express our gratitude to our stakeholders and supporters—including philanthropic individuals, private-sector corporations, foundations, and government institutions—without whom we simply could not do our work. Your support allows us to speak freely and go where the research takes us. We hope to broaden support for our mission to maintain and improve global economic integration to lasting human benefit.   

Sincerely,

Adam S. Posen
President | Peterson Institute for International Economics

Monica de Bolle’s new podcast, Policy for the Planet, examines how countries are responding to the climate crisis. Mary E. Lovely joined the top episode of the first season to discuss how the auto industry is changing and what it will take to get more people to switch to electric vehicles, especially in the United States.

Policy for the Planet. Launched in October, Policy for the Planet is a biweekly podcast hosted by Monica de Bolle, featuring economists, health and science experts, and political scientists enlisted to guide policymakers dealing with climate change. Their topics ranged from public health to artificial intelligence, electric vehicles, and natural gas exports. The first season featured Jean Pisani-Ferry, Michael A. Clemens, Mary E. Lovely, Cullen S. Hendrix, Jacob Funk Kirkegaard, and Kimberly Clausing from PIIE and also external experts like Daniel Yergin (S&P Global), Mary Hayden (University of Colorado, Colorado Springs), and Joanna Lewis (Georgetown University).  

Critical minerals. Cullen S. Hendrix’s work on security challenges facing the critical minerals sector, especially nickel, was cited in The Economist and featured on WBUR’s On Point and the Canadian Global Affairs Institute’s Energy Security Cubed podcast. He wrote about the role of East Africa in US efforts to diversify graphite supply chains away from China and China’s export controls. In an op-ed for The Diplomat, he wrote that placing Indonesian nickel on the US list of goods produced by child or forced labor could backfire, encouraging countries with lax human rights standards to import Indonesian nickel in the US’s place.  

Electric vehicles. Jacob Funk Kirkegaard argued that Europe would be more cautious than the Biden administration in raising tariffs on Chinese electric vehicles, outlining Europe’s willingness to maintain relations with China.  

Carbon pricing. Kimberly Clausing detailed ways that tax policy could help with climate efforts across her work. She wrote an op-ed on carbon taxes for The Hill that was cited by Senator Sheldon Whitehouse on X, spoke at several events, including a popular PIIE-IMF conference that drew over 100 attendees in person and nearly 1,500 online, and was a guest on PIIE’s Policy for the Planet podcast. She also organized a multi-country convening on carbon border adjustments, funded by the Gates Foundation, in Pretoria, South Africa.  

Deforestation. The Panama Canal is suffering a historically severe drought, caused in part by deforestation of the Amazon rainforest, endangering a major global trade route, Monica de Bolle argued in a blog post that was shared by the head of the European Central Bank’s Climate Change Centre, Irene Heemskerk.  

UK decarbonization. Steven Fries helped develop the Seventh Carbon Budget recommendation from the UK Climate Change Committee (CCC) to Parliament and the British government, covering 2038-42, and also helped produce the CCC’s annual report to Parliament on reducing emissions. He spoke about decarbonization at multiple venues, including a research seminar at Oxford University and a roundtable discussion at the CCC on the macroeconomic and competitive impacts of the net zero transition. 

Artificial intelligence (AI). Companies aren’t fully transparent about AI’s “alarming” environmental impacts, but the carbon footprint of training a large language model could be equivalent to 626,000 pounds of carbon dioxide, Monica de Bolle warned. 

El Niño. Research links El Niño weather patterns to natural disasters, rising food prices, and slower economic growth, leading to political instability and armed conflict within countries, Cullen S. Hendrix argued. 

China’s economic slowdown: Tianlei Huang concluded in one of the most-read pieces of the year that China’s stimulus measures may fall short of their goals. He also drew lessons from China’s fiscal policy during COVID-19 and cowrote for the Australian Institute of International Affairs that accelerating capital flight from China is a sign of changing geopolitical and economic realities in the country. He and Mary E. Lovely outlined China’s misguided economic policies for the Milken Institute Review.  

China’s Communist Party (CCP): Adam S. Posen was featured in a DW News Beyond Business video with nearly a million views explaining how the CCP’s increased authoritarianism has compromised economic development. Huang and Yeling Tan wrote that the CCP’s third plenary session in July was unlikely to reverse China’s economic troubles. A joint event with Princeton SPIA featured Martin Chorzempa and Tan discussing the sustainability of China’s Communist Party-controlled economic model.  

Decoupling trade: Mary E. Lovely and Jing Yan analyzed trade data showing that as the US has reduced reliance on imports from China since 2018, the European Union and China have deepened trade dependencies, a finding cited by Reuters. When Biden imposed tariffs on China in May, Yeling Tan wrote that Beijing’s response could be gleaned from the first Trump administration, namely, a deeper turn toward protectionism and diversification of its trade away from the United States. Cecilia Malmström hosted a Trade Winds episode with Lovely in November focusing on the future of US-China trade after the US election. Arvind Subramanian wrote in Project Syndicate that Western countries retaliating against China for its supposed exporting of excess capacity reflects a misunderstanding of the resilience of the Chinese export juggernaut. 

Export controls and sanctions. Martin Chorzempa, Mary E. Lovely, and Yuting (Christine) Wan developed an important dataset revealing the rise of US export controls and economic sanctions on China by the first Trump administration and under Biden, driven by national security and human rights concerns. The paper was cited by Bloomberg and the New York Times. Chorzempa amplified concerns that these actions need to be coupled with steps to better manage that relationship in a CSIS report and also wrote about export controls for the Penn Project on the Future of US-China Relations.  

Property crisis. Tianlei Huang commented in ThinkChina, a Singapore-based publication, that China’s efforts to reverse the property crisis are likely to fall short, as he previously suggested in his 2023 Working Paper, which was cited multiple times in the US-China Economic and Security Review Commission’s 2024 annual report. Nicholas R. Lardy wrote residential property completions in 2023 outstripped the pace of new residential starts for the first time.  

Underestimating China. Nicholas R. Lardy cautioned in Foreign Affairs that while China’s growth has slowed in recent years, its economy is likely to expand at twice the rate of the United States in the years ahead. The piece was widely shared across Chinese language media. Lardy also produced two PIIE Charts indicating that China's real GDP continues to grow faster than that of the United States and household consumption is not as low as many think. In April, Lardy joined CNBC to discuss US Secretary of State Antony Blinken’s visit to China.  

US stance on China. In a Financial Times podcast, Adam S. Posen made the case for a less confrontational US stance towards China, criticizing the Biden and Trump administrations for policy errors regarding manufacturing, unilateralism, and self-sufficiency. 

Private sector trends. Tianlei Huang and Nicolas Véron’s tracker on the share of China’s state vs. private sector among the country’s largest listed companies found a small uptick in the private sector in the second half of 2024 after years of decline. The tracker was cited by The Economist.  

Population decline. In one of PIIE’s most popular posts of the year, Jacob Funk Kirkegaard showed how China's birth rate has dropped steeply compared to its death rate since 1985, a demographic trend that calls into question China’s long-term economic prospects.  

Pharmaceuticals. Monica de Bolle explained that China’s dominant role in producing major pharmaceuticals and drugs enabled it to produce diagnostic COVID-19 tests used around the world, saving lives. She argued that barring medical products from China would hamper innovation and consumers’ access to low-cost drugs. 

Our leading China Program

Tensions between the United States and China reinforced PIIE’s determination to pursue realistic policy research and independent analysis of the issues at stake. PIIE scholars continued to engage with senior officials and leading economists in China on its economic development and global relationships. 

US-China competition. Mary E. Lovely testified in May to the US-China Economic and Security Review Commission that decoupling from China has been costly for US consumers and producers; she called for tariff reform to target Chinese technology-related practices.  

CF40. PIIE’s longstanding relationship with China Finance 40 Forum (CF40), a leading independent think tank in China, led to six jointly sponsored Young Economist Forum seminars, co-organized by Tianlei Huang. He also co-organized the 7th PIIE-CF40 Joint China Economic Forum in Washington and coordinated meetings with visiting Chinese delegations.  

Bund Summit: Several PIIE scholars travelled to Shanghai in September 2024 to attend the Bund Summit, a high-profile nongovernment financial conference organized by CF40 and China Center for International Economic Exchange, including Mary E. Lovely, Yeo Han-koo, Jeffrey J. Schott, and Mari Pangestu, while C. Fred Bergsten, Adam S. Posen, and Jason Furman joined virtually. Posen and Furman also serve on the Summit’s International Advisory Council. On the first day of the summit, PIIE cohosted a session with CF40 and the Euro 50 Group. 

GEO Dialogue: PIIE is a co-organizer—along with CSIS, the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS), and the Shanghai Institute of International Studies—of the US-China Global Economic Order (GEO) Dialogue that takes place twice a year (once in the United States and once in China). In May, Mary E. Lovely led the PIIE delegation of Martin Chorzempa, Tianlei Huang, Adam S. Posen, and Yeling Tan at the Washington, DC event.  

Russia-Ukraine war. Elina Ribakova critically assessed the effectiveness of economic sanctions on Russia, testifying to the US Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations on how US technology was fueling the war, reprising her arguments in the Financial Times and Foreign Affairs. In June, Ribakova spoke with BBC’s Steve Rossenberg about how Russia’s war economy has been able to grow despite sanctions. Jeffrey J. Schott supported the rationale for the G7’s $50 billion loan to Ukraine backed by Russian reserves held by the West. Nicolas Véron wrote a position paper for the Round Table Discussion of the Committee on Foreign Affairs of the House of Representatives of the Netherlands on Russia’s immobilized reserves.  

Asia and the United States. East Asia can avoid economic damage or even gain from Trump’s protectionist measures if the region’s countries independently pursue their interests in the US-China rivalry, Adam S. Posen wrote after the US election for the East Asia Forum. Marcus Noland wrote about how Trump’s policies would benefit other countries, including most countries in Asia, for the East-West Center. 

South Korea’s turmoil. Following the short-lived declaration of martial law and subsequent political turmoil in South Korea, Yeo Han-koo assessed the economic implications in US and Korean media outlets.  

South Korea series. For PIIE’s 2024 series on the Korean economy, Douglas A. Irwin and Maurice Obstfeld explored the predominantly external price factors in Korea’s long-run real exchange rate behavior; Michael Clemens recommended enhanced labor migration to deal with Korea’s economic and demographic crisis; Yeo Han-koo and Alan Wm. Wolff called on Korea to deepen its trade relations with the United States, Pacific countries, and the Global South, including by joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and “materializing” the Indo-Pacific Economic Framework (IPEF), and to strengthen institutional support for defense industrial collaboration. (See above for Martin Chorzempa’s research on semiconductors.) 

North Korea. Marcus Noland warned about the demise of the United Nations’ Panel of Experts meant to monitor UN-authorized sanctions on North Korea amid evidence of the country’s deepening food insecurity.  

Japan. Takeshi Tashiro wrote about Japan’s output gaps in the 1990s for the book Rethinking Japanese Economic Policy at the Turn of the 21st Century. Adam S. Posen welcomed Kazuo Ueda, governor of the Bank of Japan, for an event on changes in the bank’s monetary policy framework. 

Middle East. Adnan Mazarei analyzed mounting debt issues and other factors destabilizing the Middle East, especially those leading to the collapse of the Syrian government. His Policy Brief and accompanying PIIE Chart on Egypt outlined the problems impeding its economic recovery.  Sherman Robinson regularly commented on economic issues for the Middle East Broadcasting Network (MEBN). 

Europe. Among the many ways PIIE scholars are engaged across Europe, Olivier Blanchard testified to the UK House of Lords Economic Affairs Committee on the sustainability of national debt and reviewed Mario Draghi’s report on the future of European competitiveness; Jacob Funk Kirkegaard wrote in Foreign Affairs about Germany’s economic reckoning; Patrick Honohan wrote op-eds about Ireland’s tax system (Irish Times) and strong recovery from the global financial crisis (Economics Observatory); Anna Stansbury analyzed binding constraints to productivity growth in the UK’s regions outside London and in the greater South East; Adam S. Posen spoke on a Bloomberg podcast about how France’s primary challenge is the underlying division in the government. 

Australia. Warwick McKibbin wrote in the Australian Financial Review that Australia’s cost-of-living crisis has reached a critical juncture. 

Latin America. Monica de Bolle wrote in the Financial Times that Latin America is the victim of protectionist contagion. She explained to NPR and the BBC that Elon Musk and the MAGA movement in the United States have looked to Argentina’s president Javier Milei for a model on how to make government cuts. Alejandro Werner assessed Milei’s “shock therapy” policies and explained in the Financial Times that Argentina and the International Monetary Fund should focus on growth, reform, and slowing inflation. Michael Clemens spoke at the Banco de México on the macroeconomic implications of migration.