LEADING RESEARCH ON THE GLOBAL ECONOMY
The Peterson Institute for International Economics (PIIE) is dedicated to strengthening prosperity and human welfare in the global economy through expert analysis and practical policy solutions.
Founded in 1981 by C. Fred Bergsten and Peter G. Peterson, and led since 2013 by President Adam S. Posen, the Institute anticipates emerging issues and provides rigorous, evidence-based policy recommendations with a team of the world’s leading economists and policy experts. It creates freely available content in a variety of accessible formats to inform and shape public debate, reaching an audience that includes government officials and legislators, business and NGO leaders, international and research organizations, universities, and the media.
Subscribe to the PIIE Insider Weekly Newsletter
Letter from the President
I invite you to review the Peterson Institute’s latest contributions to public policy and understanding at a time of increasing division in the global economy. Old threats to economic growth and stability have arisen anew in our era of commercial conflict and actual warfare. The Peterson Institute embraces its purpose to provide nonpartisan evidence-based and globally minded analyses of these challenges, even at the risk of inviting controversy. You will also see how we have tried to address another year of misinformation, mythology, and misrepresentations about trade, finance, and many other aspects of globalization.
The world’s conflicts and threats change, but our values and certain economic truths remain valid. We are committed to pursuing and promoting peaceful international openness and rules-based economic integration as the proven path to prosperity and improved human well-being.
In 2023, we will continue to take on the major economic policy challenges of our era through relevant research and accessible outreach. Our planned major areas of scholarly work and public programming include:
- Continued examination of the economic implications of fast-changing high-tech competition, focusing on the constraints, perils, and opportunities in new US export controls and industrial policies.
- Groundbreaking research on the macroeconomics of energy transition and its interaction with trade and industrial policies.
- An independent postmortem of the 2020–22 inflation surge around the world, assessing the relative role of policy mistakes, supply shocks, global transmission, and changing economic structures.
- Our annual Next STEP (Solutions to Economic Problems) Global Conference in Singapore, building on the high-level discussions of economic techno-nationalism and third-country agency last November.
- Building on our research on the global economic impact of public health policies for potential future pandemics, including supply chains of medical goods.
- Exploring new ways to save the world trading system from deadlock and distortion, including plurilateral efforts and coalitions of the willing.
- Addressing the challenges of labor, gender pay and opportunity disparities, and social welfare in global perspective.
- A multidimensional mapping and analysis of China-US economic decoupling, actual and potential, and which aspects are most likely to be persistent and costly.
- Needed adaptations of fiscal and monetary policy frameworks for a time of higher public debt and interest rates and increasing carbon prices.
PIIE remains a bellwether for economic and policy analysis for the media and public, attracting outsized news coverage for our size. And our flagship PIIE Insider newsletter is more popular than ever. Starting in 2022, we returned to hosting events attended in person after two years of holding them exclusively virtually. We have several major in-person conferences this year for leading scholars and policymakers—on the 50th anniversary of floating exchange rates (held in March); on fiscal policy after COVID; and on the macroeconomics of climate change—for which featured research will also be live streamed to the general public.
As always, I wish to express wholeheartedly our gratitude to our stakeholders and supporters—including individuals, private-sector corporations, foundations, and government institutions—without whom we could not pursue our vital agenda of battling destructive self-dealing and disinformation in the global economy. I hope that you will enjoy reading this annual report and take time to see the hard work and impressive results of the Peterson Institute community.
Key Areas of Impact
Forecasting and confronting inflation
PIIE was at the forefront of analyzing causes and repercussions of record inflation and rising interest rates in 2022 and offered recommendations on monetary, fiscal, and trade responses, and more.
- Jason Furman’s inflation forecasts had a major impact on the national debate; his Wall Street Journal op-eds, PIIE blog posts, and other commentary led to meetings with high-level Federal Reserve, Biden administration, and Congressional officials. He wrote prolifically on the topic to his 136K Twitter followers.
- As inflation hit 40-year highs, Gary Clyde Hufbauer, Megan Hogan, and Yilin Wang argued that trade liberalization could deliver a 1.3 percentage point drop in inflation, or $797 per US household. The US Treasury, US Commerce Department, and US Trade Representative cited their study. CBS News, NPR, Bloomberg TV, CNBC, Financial Times, New York Times, Bloomberg, Reuters, Associated Press, and many other news outlets also cited their conclusions, and editorials in the Wall Street Journal and Washington Post (three times) praised them. US Trade Representative Katherine Tai responded in a speech at the Milken Institute.
- Olivier Blanchard, Alex Domash, and Lawrence H. Summers challenged the Federal Reserve’s assertion that the overheated US labor market could be cooled without sharply higher unemployment. Their Policy Brief was PIIE’s most-viewed publication in 2022 and featured on PBS NewsHour, Bloomberg, Washington Post, Fortune, and others. The paper and accompanying PIIE Chart were cited by Federal Reserve Vice Chair Lael Brainard and disputed by Federal Reserve Governor Christopher J. Waller.
- David Wilcox and David Reifschneider, examining the impact of the Russia-Ukraine war on inflation, said the outlook would get worse but could improve within three years. Multiple news organizations quoted Wilcox on Federal Reserve policy, including Bloomberg TV, the Boston Globe, and CBS News.
- Joseph E. Gagnon examined past inflationary spikes, citing the history of mistakes to caution the Fed against overreacting to demand and supply factors and assuming that inflation could last longer than some were predicting. Nobel Prize-winning economist Paul Krugman cited Gagnon’s 2021 blog post as getting the analysis right when other economists were wrong.
- Karen Dynan and Jason Furman continued analyzing the state of the US labor market every month in 2022, with frequent citations in the Financial Times, Washington Post, NPR, Fortune, Miami Herald, Yahoo Finance, and engagements on social media, including by White House Chief of Staff Ron Klain.
- Caroline Freund, in innovative analysis, found that demand for imports was a bigger driver of inflation in the United States than supply constraints.
- PIIE economic forecasters correctly challenged official inflation estimates at PIIE’s flagship Global Economic Prospects events in 2022. In the April 1 Spring presentation, Karen Dynan forecasted that US inflation would be higher than the Federal Reserve’s projections and require larger interest rate hikes than the Fed and many others were forecasting. The accompanying PIIE Chart depicting the Federal Reserve’s adjusted forecasts was among the most-viewed graphics of the year. The projections were widely covered in the media, including in the New York Times, Reuters, Bloomberg News, and Fortune.
- Maurice Obstfeld warned that aggressive and uncoordinated anti-inflation policies by central banks risked economic contraction. His analysis in a September paper on the “Global Dollar Cycle” at the semiannual Brookings Papers on Economic Activity (BPEA) conference was covered by the Financial Times, Foreign Policy, Bloomberg News, Politico, and Central Banking. A later blog post and accompanying PIIE Chart were among PIIE’s most-read pieces.
Rethinking trade and supply chains in a fragmenting global economy
The US response to supply chain disruptions has fractured global economic cooperation. PIIE scholars illuminated the tough tradeoffs posed by initiatives such as the Inflation Reduction Act, US export controls, the CHIPS and Science Act, the Indo-Pacific Economic Framework, and US challenges at the World Trade Organization.
- Chad P. Bown and Yilin Wang reported on an overlooked risk to global food security: China ordering its firms to stop selling fertilizer to other countries in order to preserve supplies at home. Paul Krugman cited their study in his New York Times column. It also generated extensive coverage in NPR and other outlets.
- Douglas A. Irwin’s work tracking the evolution of globalization continued to draw a broad audience. An interactive graphic and accompanying gif showing how cross-border trade and investment enabled both rich and poor countries to grow richer in recent decades were shared widely across social media. His updated PIIE Chart showing the retreat of globalization since 2008 ran on the front page of the Financial Times. His Working Paper and PIIE Chart on the role of international institutions in promoting trade reform found that the IMF’s support for trade has been underappreciated.
“Policymakers must resist calls for excessive concentration of production domestically, which could create even more vulnerabilities.”
- The hit Trade Talks podcast, now with solo host Chad P. Bown, released 15 episodes in 2022 and grew to 26,000 listeners per episode. The series grappled with electric vehicle subsidies and controls on Chinese semiconductor chipmakers and the mixed success of Cold War export controls. Episodes on national security and semiconductor trade and the disruption of global food supplies because of the war in Ukraine broke previous download records.
- A PIIE Chart based on Gary Clyde Hufbauer and Megan Hogan’s Policy Brief on the CHIPS and Science Act and US semiconductor production showed how even major chip exporters rely on imports. The graphic was shared widely on social media with extremely high engagement, particularly on LinkedIn.
- PIIE deepened public understanding of global minimum tax proposals. Kimberly Clausing’s op-eds in Foreign Affairs and Bloomberg (republished in the Washington Post) rebutted arguments that the tax increases would fuel inflation. Jason Furman’s Wall Street Journal op-ed argued the proposed system is good for the United States.
- PIIE scholars have been at the forefront of discussions around World Trade Organization (WTO) reform. Alan Wm. Wolff, former WTO deputy director-general, called for reviving world trade rules at Oslo’s Mt. Pelerin Society, a Parliamentary Conference on the WTO in Brussels, and at the WTO Public Forum in Geneva, outlining his vision for WTO reform. His Policy Brief with Robert Z. Lawrence defended the record of US free trade agreements, while calling for more steps to help those displaced by trade.
- Jeffrey J. Schott and coauthors submitted recommendations on WTO reform to the G7 ahead of its June summit. Robert Z. Lawrence argued for more flexible trading rules, and Cecilia Malmström called on the WTO to do more for women following its Ministerial Conference, resulting in a meeting with US Senator Bob Casey (D-PA) to discuss her proposals
- In the media, Bown spoke to the BBC about the WTO ruling on US steel tariffs and to the Wall Street Journal about the ramifications of a WTO ruling authorizing China to impose retaliatory tariffs on the United States. Wolff talked to the Associated Press and Bloomberg News about the outlook for ministerial meetings, and Schott was interviewed for an educational explainer on the WTO for the Fox News podcast Getting Schooled.
- Adam S. Posen was a panelist at the European Parliament Post-COVID Summit in April 2022, providing insights into how trade, commerce, and finance will change in the post-pandemic age.
- Alan Wm. Wolff called for international cooperation to reduce trade frictions in a speech to the World Semiconductor Council in October.
- Luca David Opromolla and coauthors examined the effects of EU enlargement in a paper for the Journal of Political Economy and found welfare in new member countries would substantially improve, particularly for unskilled workers.
Assessing the costs of Russia’s war on Ukraine and the effectiveness of sanctions
PIIE scholars tracked the international response to Russia’s shocking invasion and economic consequences of war across the globe.
- Following the invasion, countries imposed coordinated economic sanctions against Russia. Chad P. Bown and PIIE’s data visualization team created an interactive sanctions tracker to follow their actions. The tracker became PIIE’s top piece published in 2022 and was cited by dozens of news organizations, including the New York Times and Financial Times, and shared by prominent figures on social media, including Michael McFaul, former US ambassador to Russia, and Sabine Weyand, director-general for trade for the European Commission.
- PIIE hosted Oleg Ustenko, chief economic advisor to Ukrainian President Volodymyr Zelensky, in a discussion with PIIE’s Jacob Funk Kirkegaard broadcast live on Bloomberg News, CNBC, and C-SPAN. Ustenko commented on the economic sanctions and estimated, for the first time, the scale of Ukraine’s economic damage. The event was also covered by the Financial Times, New York Times, Wall Street Journal, Reuters, Bloomberg, CNN, and NPR.
- Adam S. Posen’s essay in Foreign Affairs on the war’s global economic impact ranked among the FA editor’s top 10 pieces of 2022. Posen made the list for the second consecutive year, after receiving the accolade in 2021 for his piece on the US withdrawal from globalization, “The Price of Nostalgia.” He appeared on CNN, NPR’s “All Things Considered” podcast, and was quoted extensively, including in the Washington Post.
- Martin Chorzempa’s analysis of Russian trade data in a PIIE blog post found that Russian imports from nonsanctioning countries, including China, plummeted after the invasion, indicating countries’ aversion to risk. The work was cited by the head of US export controls in Congressional testimony. Chorzempa spoke to CNN about his findings, the Washington Post devoted an article to his research, and the Wall Street Journal cited the work.
- Before the invasion, Jeffrey J. Schott questioned in a PIIE blog whether the threat of sanctions would deter Russian aggression in Ukraine. After the invasion, Schott was interviewed on the effectiveness of sanctions by many high-profile media outlets, including a Wall Street Journal video interview and quoted in stories in ABC News, CNN, CNBC, NPR, Wall Street Journal, Washington Post, New York Times, Newsweek, Barron’s, and Vox.
- Jacob Funk Kirkegaard coauthored a paper calling for and designing a recovery plan for Ukraine based on the Marshall Plan for post-World War II Europe. His analysis was widely discussed in the media and many recommendations were included in the G7 statement in December on next steps in Ukraine, including setting up a G7 multiagency donor coordination platform involving the IMF.
- Anna Gelpern, Sean Hagan, and Maurice Obstfeld urged Ukraine’s creditors to defer repayments and outlined a framework to ease its economic burdens, which was adopted by official and private creditors. Obstfeld also recommended macroeconomic policies to put Ukraine’s economy on a sustainable path in a coauthored paper for VoxEU.
- As uncertainty roiled international markets, PIIE scholars’ work considered the food and energy implications of the tensions between Russia and the West. Before the invasion, Jeffrey J. Schott and Megan Hogan outlined Europe’s dependence on Russian energy in a blog and PIIE Chart. Following the invasion, Cullen S. Hendrix explained in the Washington Post how Russia’s actions would affect food and energy prices. The New York Times interviewed Maurice Obstfeld about the impact of global food price spikes on low-income populations. Vox interviewed Hendrix about the link between food costs and political unrest. Later, Steven Fries and Egor Gornostay showed how climbing energy prices were helping maintain Russian revenues despite Western sanctions, while Markus Brunnermeier called for a European boycott of Russian oil in an op-ed for Project Syndicate.
- The war forced Europe to balance sanctions, fiscal support, and monetary policy. Olivier Blanchard and Jean Pisani-Ferry weighed options for softening food and energy price shocks and tackling inflation in the third most-read Policy Brief of the year and a popular PIIE Chart.
- Russia’s reversion to a command-and-control approach to prop up the ruble, largely abandoned in the 1990s, was described by Patrick Honohan as monetary theater of the absurd, covered by the Wall Street Journal.
- Joshua Kirschenbaum and Nicolas Véron identified a gap in the EU’s financial sanctions regime in its reluctance to sanction Sberbank, Russia’s largest bank.
Understanding the Chinese economy and analyzing US-China relations
The Chinese government’s shift toward state-driven economic policies has tested its deep ties to the global economy, as has its conflicts with the United States. PIIE scholars have been in the forefront of analyzing China’s economic problems while recommending constructive policies for the United States and the global economic system.
- Chad P. Bown’s postmortem of President Donald Trump’s phase one trade deal concluded it largely failed. China bought none of the additional $200 billion of US exports it had promised. Bown’s piece was the second most-read PIIE publication in 2022 and was cited in the New York Times by reporter Ana Swanson (twice) and by Paul Krugman, who called Bown “the go-to source on the trade war.” Associated Press reporter Josh Boak praised the work as “a helpful scoreboard for holding political leaders accountable.” The research also generated coverage in the Washington Post editorial page, The Economist, CNN, the Wall Street Journal, Reuters, South China Morning Post, Politico’s Morning Money newsletter, Kyodo News, and Inside U.S. Trade.
- Tianlei Huang and Nicolas Véron challenged the perception that the Chinese government exerts universal control over its economy, or that private-sector firms are no different than public-sector ones. Using company-level data, they showed that among China’s largest companies in the past decade, privately held companies have expanded at a faster rate than state-owned firms. Véron and Huang published op-eds and follow-up blogs in the South China Morning Post, ThinkChina, Caixin, and VoxEU. Their work received in-depth coverage from Bloomberg and was featured in the Financial Times column by Martin Wolf, Fortune, and the Wall Street Journal, as well as by Caixin and Yicai in China. The authors launched an ongoing data tracker that has been covered on CNBC, in Bloomberg News, and cited by the University of Alberta’s China Institute.
- Are the US and Chinese economies decoupling? Chad P. Bown found that while US imports of some Chinese products have cratered, others are higher than ever, despite lingering trade war tariffs. Mary E. Lovely and Abigail Dahlman considered the implications of decoupling US-China supply chains for South Korean firms.
- Attention to Chinese trade and investment rose to new levels in 2022. Martin Chorzempa analyzed the secretive Committee on Foreign Investment in the US (CFIUS), finding that US scrutiny of Chinese investments exceeds that of investments from any other country. His analysis of controls imposed on China was reported in the New York Times. Chorzempa also briefed US and foreign embassy officials.
- Cullen S. Hendrix examined forced labor in supply chains running through Xinjiang, China, and wrote with Marcus Noland how the December 2021 Uyghur Forced Labor Prevention Act is a constructive but incomplete response to keep goods made with forced labor out of the United States. The limits of the law were explored in Hendrix’s article in Foreign Policy. In Barron’s, he explained why supply-chain audits fall short.
- Tianlei Huang’s writings on China included a tough critique of its botched zero-COVID policies and a critical assessment of the struggling property sector. His work was cited in The Economist, Financial Times, Wall Street Journal, Washington Post, Time Magazine, Bloomberg News, and other outlets. Huang coauthored pieces on China’s challenges in reviving the economy (with Mary E. Lovely) and examined China’s integration with the global economy following Russia’s invasion of Ukraine (with Nicholas R. Lardy).
- The US-China Economic and Security Review Commission Annual Report to the US Congress cited PIIE authors 16 times, including research by Chad P. Bown, Joseph E. Gagnon, Cullen S. Hendrix, Tianlei Huang, Katheryn (Kadee) Russ, and Jeffrey J. Schott.
- Jacob Funk Kirkegaard submitted two papers and presented testimony to the EU Parliament Foreign Affairs Committee on China’s long-term growth prospects in light of its aging population.
Our leading China program
Growing tensions between the United States and China over trade and technology reinforced PIIE’s determination to pursue realistic policy research and independent analysis of the bilateral issues. PIIE scholars maintained substance-based open dialogue with senior officials and leading economists in China on both Chinese economic development and China-US relations.
- Martin Chorzempa’s book, The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology (PublicAffairs Books), was included on Martin Wolf’s list in the Financial Times of the best economics books of 2022 and praised by the Wall Street Journal and Washington Post. The book portrays China’s grappling with financial technology innovations and the impact on the lives, habits, and privacy of people across the globe.
- Mary E. Lovely, leader of PIIE’s influential China Program, served as the Library of Congress Chair in US-China Relations with the Kluge Center through September, where she ran educational programs for Congress members and their staff. She spoke at numerous high-profile events, including at a meeting of European Trade Ministers, The Economist’s Global Trade Week, and the China Development Institute. Lovely appeared more than 10 times on Bloomberg TV in 2022 and was widely cited in other news media, including the New York Times.
- In April, Yeling Tan of the University of Oregon joined PIIE as a nonresident senior fellow to research international and comparative political economy, focusing on globalization and China’s economic governance. In a Working Paper, she examined why Chinese public opinion supported protectionism in response to the US-China trade war, which led to a Bloomberg op-ed.
- To coincide with the Chinese Communist Party’s 20th National Congress and Xi Jinping securing a historic third term as leader, PIIE hosted an event on Xi’s economic model and the future of globalization, featuring presentations from Martin Chorzempa, Tianlei Huang, Nicholas R. Lardy, Mary E. Lovely, and Yeling Tan. The event drew more than 700 virtual and in-person attendees and more than 2,600 YouTube views, and earned coverage in Fortune magazine.
- In December, Adam S. Posen moderated two discussions, including one with former governor of the Bank of France Jean-Claude Trichet, at the annual Bund Summit in Shanghai, a high-profile nongovernmental financial conference organized by CF40. Posen serves on the summit’s International Advisory Committee.
- PIIE and China Finance 40 Forum (CF40), a leading independent think tank in China and for many years a PIIE partner in deepening US-China understanding, held their second PIIE-CF40 Young Economists Forum, a seminar series on US-China economic relations co-organized by Tianlei Huang. The five seminars in 2022 each featured speakers from PIIE and China and included People’s Bank of China International Department Director-General Jin Zhongxia, Chinese Academy of Social Sciences Academician Yu Yongding, SAFE Chief Economist Yianliang Miao, and UBS Head of Asia Economic Research Wang Tao.
Analyzing a realistic transition to a green economy
Climate change and global decarbonization efforts pose significant economic policy challenges, despite the need for technological progress. PIIE scholars newly analyzed often overlooked but critical macroeconomic and trade aspects of the transition.
- In a report for Prime Minister Élisabeth Borne of France, Jean Pisani-Ferry stressed the macroeconomic costs of climate change and the tradeoffs entailed by the transition to renewable energy. He is leading a multiauthor research effort on global aspects of this topic for PIIE.
- Ahead of the United Nations’ COP27 climate conference in Egypt, Olivier Blanchard, Christian Gollier, and Jean Tirole outlined a portfolio of economic policies to fight climate change, which was featured in the New York Times.
- Cullen S. Hendrix worked on the United Nations Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment report summarizing climate change causes, impacts, and policy response options. Hendrix was part of a working group on risks to peace and human mobility. Several parts of the IPCC report were presented at COP27.
- Access to critical minerals is essential for the adoption of electric vehicles, batteries, and other renewable energy products. In one of the most-read working papers of 2022 and a popular accompanying infographic, Adnan Mazarei and his coauthors revealed the vulnerabilities in mineral supply chains and the threat posed by China and other countries. Cullen S. Hendrix argued that lagging energy infrastructure and political instability prevent African countries from fully tapping mineral reserves.
- Steven Fries provided policymakers with a strategy to transform energy systems to renewable sources in a Working Paper and accompanying op-ed for the UK’s Prospect magazine.
- EU plans for a carbon border adjustment mechanism (CBAMs) are likely to be interpreted as incompatible with WTO obligations. Gary Clyde Hufbauer, Jeffrey J. Schott, and Megan Hogan outlined the challenges facing the EU’s CBAM in an October 2022 Policy Brief. Sherman Robinson and coauthors compared the effect of CBAMs on global carbon emissions and found that they are most effective when adopted by a "climate club" of like-minded countries.
- Anna Gelpern spoke at an event on money and the climate crisis for Phenomenal World with Adam Tooze.
- Infrastructure projects to reduce carbon emissions or mitigate their effects are vulnerable to corruption. Creon Butler, Sean Hagan, and Dominic Martin identified ways to alleviate these concerns in a PIIE Policy Brief.
Promoting financial stability
In an era of unusual volatility in the global economy, PIIE scholars explored unexpected debt accumulations, the implications of fluctuating financial markets, cryptocurrencies, the unsettling aftermath of Brexit, and more.
- Anna Gelpern presented her research on international debt restructuring to the US House Financial Services Committee and New York State Assembly staff. She appeared on a panel during the 2022 IMF Annual Meetings with Deputy Managing Director Gita Gopinath and Financial Times commentator Martin Wolf. And her 2021 research on China’s foreign lending contracts continued to generate attention, with Counselor to the Secretary of the Treasury Brent Neiman citing the project during a September event.
- EU legislation advanced to create an authoritative Anti-Money Laundering Agency, similar to that proposed by Nicolas Véron and Josh Kirschenbaum in their 2018 paper and subsequent blog post.
- PIIE scholars spoke at influential international forums on financial stability and monetary policy. Adnan Mazarei and Maurice Obstfeld spoke at the G20 Global Financial Stability Conference. Markus Brunnermeier addressed the ECB Forum on Central Banking organized by the European Central Bank.
- José de Gregorio testified to the Chilean Congress’s Chamber of Deputies on credit scoring and information in the financial system, and took part in discussions on Chilean constitutional reform.
- Martin Chorzempa, in an appearance on CNBC’s Squawk Box in early November, warned that higher interest rates would reveal weaknesses in crypto currency industries. On CNN he discussed China’s plans for digital currencies.
- Markus Brunnermeier studied the digital euro at the behest of the Committee on Economic and Monetary Affairs (ECON) at the European Parliament.