ESADEgeo’s Daily Digest, 27/04/2017

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Brookings, M. Muro and D. Saha: Patenting invention: Five clean energy innovation trends Congress should know about as it weighs Trump’s ‘skinny’ budget

  • Investment in low-carbon energy holds great potential to propel growth in the U.S. and improve the trade balance. The authors’ analysis focuses on patenting activity as a key indicator of innovation in clean technologies, and the numbers provide a mixed picture.
  • U.S. clean technology patenting has grown significantly since 2001 (outpacing growth in all patents) but may now be weakening. The patenting is concentrated on relatively limited categories (in particular, advanced green materials, energy efficiency and transportation).
  • Patenting is concentrated in large metropolitan areas from all over the country. Each of these metropolitan areas is becoming a distinctive industry cluster.
  • The share of U.S. cleantech patents owned by foreign companies is increasing.
  • The U.S. Congress should reject Trump’s proposed budget and keep building on bipartisan efforts to maintain the momentum of innovation, instead of relinquishing the lead to countries like China.

Financial Times, C. Jones: ECB faces division on Macron effect

  • Macron’s performance in the first round of the French elections was welcomed by the European Central Bank’s governing council.
  • A win by Macron in the second round would embolden the council’s hawks, who want to rein in the current monetary stimulus.
  • The biggest political risk—a win by Le Pen—now looks more unlikely, which could prompt the ECB to consider phasing out quantitative easing.
  • However, underlying inflation—which leaves out the increase in oil and food prices—is not on the rise, and Mario Draghi has made clear that there will be no change of course until that happens.

Foreign Affairs, S. Worden: How to stabilize Afghanistan

  • To prevent Iran and Russia from allowing the Taliban to make territorial gains in Afghanistan, the Trump Administration should rebuild a regional consensus with other global powers.
  • If the Russian government truly wanted to keep ISIS terrorists operating in Afghanistan in check, it should support the Kabul government instead of contributing to the chaos of the Taliban insurgency. Tehran’s support to the Taliban could be reversed through assurances that Afghan soil will not be used to launch attacks aimed at Iran.
  • However, the main problem is Pakistani support, which will be more difficult (although not impossible) to stop.
  • Reforming an alliance with Iran and Russia about Afghanistan would require the U.S. to clarify its objectives and declare that it supports, first and foremost, a peaceful and stable Afghanistan.
  • The U.S. should commit itself to providing military, diplomatic and economic support to the Kabul government. American troop presence in Afghanistan could at the same time be presented as negotiable, as long as the terrorist threat ends.

The New York Times, A. Rappeport: Trump’s tax plan is a reckoning for Republican deficit hawks

  • The White House insists that the proposed tax cuts will bring about higher economic growth, which will cover the estimated loss of federal revenue. However, the U.S. economy would have to grow at a 4.5% rate for this to be true.
  • Experts warn about parallels with Reagan’s tax cuts and the increase in the U.S. deficit that they produced.
  • If Republicans are not able to make the tax cuts revenue-neutral, they will need the support of the Democrats to get them approved by the Senate. Otherwise, changes to the tax code will expire in 10 years.
  • Many Republicans in Congress frown upon adding to the deficit, but they may need to compromise.

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