International news pertinent to international economics is added here, together with several major newspapers and news magazines. The articles, in general, are held for a month on this main page. You can also access the older archived news articles, with the caveat that there is no guarantee that the links remain live. Current news on international financial markets can be found here. Note: Links to the New York Times require a free registration.
Recommended
Economist Subscription Required
FT Subscription Required
Foreign Affairs Subscription Required
Foreign Policy Subscription Required
FEER Subscription Required
NYT Select Subscription Required
WSJ Subscription Required
Adobe Acrobat Required
2001 Archive | 2002 Archive | 2003 Archive | 2004 Archive | 2005 Archive | 2006 Archive | 2007 Archive | 2008 Archive | 2009 Archive | 2010 Archive
Global: The China Cracker
Joachim Fels & Manoj Pradhan (MS GEF) Jan 15, 2010
We expected the exit from ultra-expansionary monetary policy to be the dominant theme for global markets this year. The surprisingly early hike in banks’ reserve requirements in China suggests that the exit has now begun. The move also fits our global script.
Did Foreigners Cause America's Financial Crisis?
Stephen Gandel (Time) Jan 15, 2010
Much of the fault of the financial crisis has been heaped on Wall Streeters, unscrupulous mortgage lenders and weak regulators. But in a new research paper, economist Ricardo Caballero says there is another major group of contributors to America's monetary mess who are not getting the blame they deserve: foreigners.
Saudi Arabia and the oil bank
Chris Cook (AT) Jan 16, 2010
Recent relative steadiness in the oil market, a situation that suits suppliers and end users, indicates an unstable equilibrium that is of little benefit to trading intermediaries, particularly investment banks that thrive on volatility and opacity. When volatility returns, fingers will again point at "speculators" - while the real culprits lie elsewhere.
Opinion: Keep the Economy Underground
Sudhir Venkatesh (NYT) Jan 16, 2010
Countries aiding Haiti must be careful not to drum out the positives of informal development.
Blue Skies
Daniel W. Drezner (NYT) Jan 16, 2010
Gregg Easterbrook argues that the financial crisis is just a small cloud over the road to rapid global innovation.
Who should decide on emergency liquidity assistance?
Jorge Ponce (VoxEU) Jan 16, 2010
What government agency should decide lender-of-last-resort policy? This column discusses the optimal allocation of decision-making authority, suggesting that the central bank decide emergency loans and the deposit insurance agency guarantee them. But providing greater liquidity assistance will also require punishment to deter moral hazard problems.
Designing a systemic risk warning system
Anne Sibert (VoxEU) Jan 16, 2010
Economists largely neglected systemic risk in the financial sector. This column discusses how governments should gather data about systemic risk and assess its implications. It says the new European Systemic Risk Board is far from the ideal – it is too big, too homogeneous, and lacks independence.
Does the Great Recession really mean the end of the Great Moderation?
Olivier Coibion & Yuriy Gorodnichenko (VoxEU) Jan 16, 2010
Was the Great Moderation “something of a fluke”? This column argues that good monetary policy did play a role in taming inflation. It argues that the current recession, while clearly severe by historical standards, does not seem to imply a return to the levels of volatility observed in the 1970s.
After Dubai
NYT Jan 17, 2010
Unless the world's richest nations come to the rescue of weakened states, the financial crisis might sprout another leg and stop the nascent recovery in its tracks.
Crushed aid: Why is fragmentation a problem for international aid?
Emmanuel Frot & Javier Santiso (VoxEU) Jan 18, 2010
The rapid growth in the fragmentation of aid donors is seen by many to be a burden for recipient countries. This column argues that too much fragmentation is not the issue; the problem is that there is too little competition between the suppliers of aid.
Why America and China will clash
Gideon Rachman (FT) Jan 18, 2010
US dogma has it that economic growth in China will lead to political liberalisation. So far, it has not – as the clash with Google has shown. Once this assumption is dropped, pressure will rise in the US to disengage.
Central Banking: Central Banks Enter Age of Improvisation
Benn Steil (Dow Jones' Financial News) Jan 18, 2010
The monetary forces behind the crashes of 1929 and 2008 were very similar. In the 1920s, as in the mid-2000s, Fed officials mistakenly thought that they had found, in the practice of trying to stabilize a price index, the holy grail of monetary policy. In consequence, central bankers are once again grasping for a new orthodoxy.
A bank levy will not stop the doomsday cycle
Peter Boone and Simon Johnson (FT) Jan 18, 2010
Just as in the USSR's final days, western leaders are trying to rescue the system by fiddling with regulations. They need to be bolder.
How the big banks rigged the market
Philip Stephens (FT) Jan 18, 2010
Taxes and fees on the banks are only a start. The next step must be to tackle the oligopolies which gave rise to their fat profits.
Bank fee has merits but lacks financial clout
Mohamed El-Erian (FT) Jan 18, 2010
Thursday's announcement by the US administration of a "Financial Crisis Responsibility Fee" has turbo-charged an already heated debate.
To Help Haiti, End Foreign Aid
Bret Stephens (WSJ) Jan 19, 2010
For Haitians, just about every conceivable aid scheme beyond immediate humanitarian relief will lead to more poverty, more corruption and less institutional capacity.
The Greek tragedy deserves a global audience
Martin Wolf (FT) Jan 19, 2010
The problems of Greece are extreme, because it alone of the vulnerable eurozone member countries has both high fiscal deficits and high debt. Some say it should be bailed out, but there are two other possibilities – it toughs it out or just defaults, writes
Return Our Investment
Incoming EU Ag Commissioner Fields Questions on CAP, Doha
Lessons to learn from emerging market success
Reason v emotion in China's growth story
The Problems With The Bank Tax
Haiti and the Dominican Republic: One Island, Two Worlds
Who fell in 2009: Those with current account deficits or with extra froth?
The Great Piggy Bank of China
The west is wrong to obsess about the renminbi
Lula, Not Bernanke, for the U.S. Fed
New rules for banks: The weakest links
Reforming banking: Base camp Basel
The world economy: Pulling apart
Investment in Asia: Invested interests
Parametric estimations of the world distribution of income
Obama v. Wall Street
Financial Reform: Obama's bank solution goes too far---and not far enough
The Myth of Permanent U.S. Global Dominance
China's free-trade shot in Asia's arm
Global: Living with the Trilemma
Export credit agencies to the rescue
The Minds Behind the Meltdown
Three Faces of Market Danger
Making sense of Obama’s bank reform plans
How to put Haiti on the road to recovery
China's $2.4 trillion slush fund
The Rise and Fall of the Guardians
When nations turn into hoarders
Where the Walker Review stops short
A better way to reduce financial sector risk
Do immigrants create exports? New evidence from Spain
World Bank aims to earn stripes through tiger summit
Too interconnected to fail = too big to fail?
The saga of Icesave: A new CEPR Policy Insight
Financial Stability Improves, but IMF Sees Fresh Challenges
IMF Revises Up Global Forecast to Near 4% for 2010
How Will the Markets React to the Fed Appointment Process? Lessons from Case Studies
Why trade war is very likely to break out this year
A true Marshall plan for Haiti
Greek Tragedy's Next Act
Lobbying and the financial crisis
BRICs as emerging international financial powers
Ministers to Discuss Swiss 'Checklist' for Doha Talks at Davos Meeting
A Frank Exchange
Beijing could be tempted to board the Athens express
At Davos, Sarkozy Calls for Global Finance Rules
Why we should expect low growth amid debt
An early warning system for asset bubbles
China's 'little dollar' spreads its wings
Greek burdens ensure some Pigs won't fly
Calls for a new Bretton Woods not so mad
Exit America
Regulating banks: Garrottes and sticks
The law of unintended consequences: Not what they meant
Hedge funds and private equity: off target
A better bank-resolution framework
The implications of globalisation: A needier era
A new approach for measuring crowded trades in financial markets
Icesave: The big ultimatum
From Crisis to Recovery, Together
How to Reform Our Financial System
Happy peasants and miserable millionaires
Financial system reform from first principles
A bubble bursts in Davos
Economic Recovery Linked to Global Stability and Peace
What the eurozone must do if it is to survive
A framework for central banks and bank supervision
One Obama Cheer on Trade
How the bottom fell out of 'old' Davos
The best course for Greece is to call in the Fund
Economic inequality during recessions
Why do the Chinese save so much?
Financial Crisis Lessons from Latin America
Tipping the scales on global rebalancing
Focus on ways for banks to fail safely
What the world must do to sustain its convalescence
Are sovereign wealth fund investments politically biased?
Bull Market Can't Last If You Mind the Gap
Quants' Risk-Free Ideas Sink Market, Cause Ruin
How to Destroy American Jobs
How Best to Boost US Exports
G33 Paper on SSM Sparks Exporters' Ire
Obama: US Must 'Seek New Markets Aggressively'
Confronting the Debt Threat
Bernanke who?
Biggest Bubble in History Is Growing Every Day
It is the poor who pay for the weak renminbi
Buy Emerging Markets
Facing up to China
Greece and the bond markets
Who matters in Chinese finance: Red mist
Argentina's reserves and its debts: Central Bank robbery
Greece's troubles: In search of credibility
Diversification and economic development
The race is on for Greece before the ECB exits
What's next for the dollar?
Global: Reining in the Front-Riders
Global: Asian Amplification
Sovereign Risk Meets Sovereign Reality
Greeks Bearing Debt
Out of the meltdown, a better financial industry
The Urgency of U.S. Financial-Sector Reform: Why Paul Volcker Is Right
North Korea's Failed Currency Reform
The mystery of Chinese savings
Short-selling bans in the crisis: A misguided policy
Memory and the dollar: New evidence on international demand
Is Debt Trashing the Euro?
Why Politics Is Stuck in the Middle
This Crisis Won't Stop Moving
Tax banks to discourage systemic-risk creation, not to fund bailouts
Europe needs to show it has a crisis endgame
How to make a bank raise equity
Anatomy of distress: New insight on the probability of bank turmoil
Time to trade
Argentina Seizes the Central Bank
Against the Grain
The Ring of Fire
Greece Part of Unfolding Sovereign Debt Story
The Roots of China’s Rapid Recovery
The God that Failed: Free Market Fundamentalism and the Lehman Bankruptcy
The End of Financial Globalization 3.0
Can Greece Avoid the Lion?
Confronting Asset Bubbles, Too Big to Fail, and Beggar-thy-Neighbor Exchange Rate Policies
The Euro’s Final Countdown?
Douglas W. Diamond & Anil K. Kashyap (NYT) Jan 19, 2010
Holman Jenkins, Jr (WSJ) Jan 20, 2010
Government Sachs, indeed.
Bridges Weekly Trade News Digest, Volume 14, Number 2 Jan 20, 2010
In a hearing on 15 January, Dacian Ciolos, the EU Agriculture Commissioner-designate, outlined his agenda on agriculture trade and subsidy reform in front of the European Parliament.
Jonathan Garner (FT) Jan 20, 2010
EM companies outperform by selling globally and in local markets.
David Pilling (FT) Jan 20, 2010
A surging money supply and excess investment threaten asset bubbles and overcapacity. But simultaneous fears of inflation suggest a middle road may be possible.
Thomas F. Cooley (Forbes) Jan 20, 2010
Populist politics trumps economic reasoning once again.
Jared Diamond (Globalist) Jan 20, 2010
How did the Dominican Republic’s and Haiti's environmental pasts determine their economic futures?
Ashoka Mody (VoxEU) Jan 21, 2010
Virtually no country was untouched by the crisis. But which countries saw the sharpest declines in GDP – and why? This column shows that those with higher growth rates before the crisis fell harder while relatively closed economies were somewhat insulated. In contrast, the relationship between current account deficits and the decline in growth rates is fuzzier.
Samuel Brittan (FT) Jan 21, 2010
China's savings rate is phenomenal, but it is no use lecturing the country's leaders to consumer more. We must find a way to offset the savings.
Michael Spence (FT) Jan 21, 2010
The singular focus on the exchange rate appears to be based on the assumption that it is the key cause of the surplus and the main policy instrument for removing it.
Stephan Richter (Globalist) Jan 21, 2010
How would Brazilian President Lula make a better U.S. Federal Reserve chairman than Ben Bernanke?
Economist Jan 21, 2010
New capital and liquidity rules will make the average bank safer. But what about the outliers?
Economist Jan 21, 2010
Regulators are trying to make banks better equipped against catastrophe.
Economist Jan 21, 2010
The world's big economies were all hit by the recession. Now the field is spreading
Economist Jan 21, 2010
China aside, most Asian economies need to invest more, not consume more.
Maxim Pinkovskiy & Xavier Sala-i-Martin (VoxEU) Jan 22, 2010
World poverty is falling. This column presents new estimates of the world’s income distribution and suggests that world poverty is disappearing faster than previously thought. From 1970 to 2006, poverty fell by 86% in South Asia, 73% in Latin America, 39% in the Middle East, and 20% in Africa. Barring a catastrophe, there will never be more than a billion people in poverty in the future history of the world.
WSJ Jan 22, 2010
The President gets serious about moral hazard.
Sebastian Mallaby (CFR) Jan 22, 2010
Obama's proposal to shut down proprietary trading desks at "too big to fail" banks goes too far. The President's plan for a tax on size would be better, but unfortunately the proposed rate was far too modest and the recoup-the-bailout rhetoric obliged Obama to limit the levy to a few years.
Martin Sieff (Globalist) Jan 22, 2010
What mistakes have U.S. policymakers made when dealing with China and India?
Marwaan Macan-Markar (AT) Jan 22, 2010
China has strengthened its position as a trading partner with Southeast Asia's export-reliant economies with a free-trade agreement that took effect this year. Yet the welcome shot in the arm for regional economies battered by the global financial crisis may not come without some pain.
Manoj Pradhan (MS GEF) Jan 22, 2010
AXJ economies could either reinforce the approach they currently have in place for dealing with the Trilemma, or they could relent by allowing their currencies to appreciate meaningfully, or by bringing interest rates more in line with those of the major central banks, though the latter would mean less control over inflation.
Jean-Pierre Chauffour & Christian Saborowski (VoxEU) Jan 23, 2010
What saved trade from collapsing totally during the global crisis? This column argues that export credit agencies played a key role in stabilising the trade finance market, and thus helped reduce credit risks and allowed exporters to offer open account terms in competitive markets.
Scott Patterson (WSJ) Jan 23, 2010
How a swashbuckling breed of mathematicians and computer scientists nearly destroyed Wall Street.
Paul J. Lim (NYT) Jan 23, 2010
No one knows how treacherous the markets will be in 2010, but earnings, valuation and policy are expected to be the three top risk categories.
Viral Acharya & Matthew Richardson (VoxEU) Jan 24, 2010
Obama’s sweeping proposal for financial regulation took the world by surprise. Here two of the world’s leading professors of finance explain why it is step in the right direction from the standpoint of addressing systemic risk. They also point out a number of drawbacks that should be fixed.
Paul Collier and Jean-Louis Warnholz (FT) Jan 24, 2010
The opportunity must be seized to rebuild the devastated island for the long term, before the international community loses interest. A sensible recovery plan is already prepared.
Robert J. Samuelson (WP) Jan 25, 2010
China, with its $2.4 trillion grip on the global economy, is growing at the expense of others.
Alasdair Roberts (Foreign Affairs) Jan 25, 2010
The recent financial crisis has battered the credibility of technocrats. It is no longer clear that, left to their own devices, they will produce the one thing that justifies giving them authority: better decisions.
Gideon Rachman (FT) Jan 25, 2010
Across the world, major powers are moving to secure access to energy, food and, in some cases, water. Faith in a trade-based system, with nations buying what they need on open, world markets, is giving ground to an effort by individual nations to secure supplies.
Hugo Banziger (FT) Jan 25, 2010
A dedicated resolution regime for financial institutions will enable failed banks to be wound down in an orderly way, minimising maroeconomic risk.
Raghuram Rajan (FT) Jan 25, 2010
Rather than limit the size or activity of banks, why not phase out deposit insurance as deposits grow beyond a certain size.
Giovanni Peri & Francisco Requena-Silvente (VoxEU) Jan 26, 2010
Immigration is increasingly recognised by economists as a key factor in promoting trade. This column presents evidence from Spain suggesting that doubling the number of immigrants leads to a 10% increase in exports to their country of origin. The effect is even bigger for countries which are culturally different. This is an important and rarely considered benefit from immigration.
Marwaan Macan-Markar (AT) Jan 26, 2010
The World Bank, associated more with mega dams than with conservation efforts, is polishing its "green" credentials through involvement with efforts to save the tiger in Asia, just as China and its neighbors prepare to celebrate the Year of the Tiger. The bank will also push for more stringent controls to curb the US$10 billion to $20 billion illegal trade in tiger parts.
Daniel Gros (VoxEU) Jan 26, 2010
Did allowing financial institutions to become “too big” play a role in the financial crisis? This column argues that being “too interconnected” is also a factor, and that US accounting standards should recognise gross derivatives exposure on the balance sheet to make this interconnectedness, and the resulting exposure, clear.
Jon Danielsson (voxEU) Jan 26, 2010
Icelanders may well reject the terms of the financial deal with Britain and the Dutch in a March referendum. This column introduces a new CEPR Policy Insight arguing that responsibility for Icesave losses falls jointly on Iceland, Britain and the Netherlands. Regardless of the vote, the three governments should come to a more reasonable agreement that enables Iceland to pay its obligations without tipping the economy into the abyss.
IMF Survey Jan 26, 2010
The world economy is shaking off the global financial crisis, but policymakers still face extraordinary challenges as they seek to unwind the unprecedented interventions that kept their economies, financial institutions, and markets from collapsing, a new IMF report said.
IMF Survey Jan 26, 2010
The global economy, battered by two years of crisis, is recovering faster than previously anticipated, with world growth bouncing back from negative territory in 2009 to a forecast 3.9 percent this year, the IMF says. It has also published a revised assessment of global financial conditions
Adam S. Posen (PIIE) Jan 26, 2010
With all the current attention to the reappointment vote on Fed Chairman Bernanke, we would direct people to our recent paper, "Do Markets Care Who Chairs the Central Bank?", forthcoming in next month's issue of the Journal of Money, Credit, and Banking. In it, we make the first ever assessment of the effects of central bank governor appointments on financial-market expectations of monetary policy. To measure these effects, we assemble a new dataset of appointment announcements from 15 countries and conduct an event-study analysis on exchange rates, bond yields, and stock prices.
Michael Pettis (FT) Jan 26, 2010
If trade issues are to be resolved optimally, policymakers have to understand the problems faced by their counterparts.
Glenn Hubbard (FT) Jan 26, 2010
Haiti has received enormous amounts of aid – of the wrong kind – over the past decades, and the aid agencies are ready to repeat the same mistakes as before.
Emre Deliveli (Forbes) Jan 27, 2010
The country's fiscal problems could spill into the surrounding region, echoing Latin America's woes of the 1990s.
Deniz Igan, Prachi Mishra & Thierry Tressel (VoxEU) Jan 27, 2010
Should the political influence of large financial institutions take some blame for the financial crisis? This column presents evidence that financial institutions lobbying on mortgage lending and securitisation issues were adopting riskier lending strategies. This contributed to the deterioration in credit quality and to the build-up of risks prior to the crisis.
Markus Jaeger (DB Research) Jan 27, 2010
The international financial position of the BRIC countries (Brazil, Russia, India and China) has improved beyond recognition, reflected largely in their large official FX reserves. However, as of 2008, only China and Russia were creditors in terms of their net international investment position. China is already the world’s second largest net creditor, trailing only Japan. On current trends, China will not only replace the US as the world’s largest economy over the course of the next two decades, but it will also replace Japan as the world’s largest net international creditor.
Bridges Weekly Trade News Digest, Volume 14, Number 3 Jan 27, 2010
A new 'checklist' from Switzerland could provide a breath of fresh air for the WTO's struggling Doha Round of trade talks, but some trade officials continue to doubt whether the organisation's members will be able to
Tom Buerkle (II) Jan 27, 2010
An odd couple shares the stage during Wednesday’s global macroeconomic policy debate.
Paul Betts (FT) Jan 27, 2010
It seems a perfectly sensible strategy for Greece to try to woo the Chinese to come to its rescue. The country is struggling to fund its soaring public debt, and there are not many alternatives to raise the €55bn or so it will need this year except to go where the money is.
NYT Jan 27, 2010
The French president called for a "revolution" in regulation that would make labor, health and environmental standards as solid as trade rules.
Carmen Reinhart and Kenneth Rogoff (FT) Jan 27, 2010
With government debt burdens racing towards thresholds of about 90 per cent of GDP. Yesterday's financial crisis could easily turn into tomorrow's government debt crisis.
Charles Roxburgh and Susan Lund (FT) Jan 27, 2010
Rising leverage is a good indicator of an emerging asset bubble. Policymakers need to develop tools that could identify the next crisis years before it breaks.
Reginald Smith (AT) Jan 28, 2010
The China-ASEAN free-trade pact, which came into effect this month, will be a vehicle for the widescale adoption of the yuan as a de facto regional currency. Though official statistics are not available, numbers show this process is already well along. China is likely to use penetration into Southeast Asia as the first step to converting the yuan into a global currency.
Daniel Gros (FT) Jan 28, 2010
The "Pigs". Portugal, Ireland, Greece and Spain have found their bonds moving together, with Greece and its troubles a bellwether for the entire group.
Gillian Tett (FT) Jan 28, 2010
Banking bonuses or credit markets may no longer dominate the debate; instead, the next big bogeyman may be exchange rates.
Roger Cohen (NYT) Jan 28, 2010
The rise of China appears to be unstoppable, but let's try imagining a world in which Beijing no longer freeloads on a declining United States.
Economist Jan 28, 2010
The first of four articles on the implications of the Volcker rule examines reactions on Wall Street
Economist Jan 28, 2010
The unintended consequences of past financial reforms.
Economist Jan 28, 2010
Some will benefit from curbs on the banks.
Paul Calello and Wilson Ervin (Economist) Jan 28, 2010
A new process for resolving failing banks.
Economist Jan 28, 2010
The politics of global disruption, and how they may change.
Richard M. Levich & Momtchil Pojarliev (VoxEU) Jan 29, 2010
Regulators understand the potential threat of crowded trades, but they also recognise the difficulty of tracking them. This column suggests a new approach for regulators to monitor crowdedness of selected trades. Fund managers and financial regulators could use data on crowdedness to assess the risk that a financial market may enter an asset bubble.
Friðrik Már Baldursson (VoxEU) Jan 29, 2010
Many expect Iceland’s March referendum on Icesave to produce a “no” vote. Despite the dire consequences, this column argues that Icelanders, faced with the hard end of the “ultimatum game”, are likely to reject the standing offer which they regard as unfair. This column proposes lowering the interest rate on the loans as a compromise that could solve the problem and avoid a referendum.
Alistair Darling (WSJ) Jan 29, 2010
We have to take steps to secure the economic recovery while creating a safer and better global banking system to support strong and sustainable growth.
Paul Volcker (NYT) Jan 30, 2010
Reform of the financial system, including regulation of the banks whose collapse would disrupt the market, can do away with the concept of "too big to fail."
Carol Graham (VoxEU) Jan 30, 2010
What measures of human wellbeing are the most accurate benchmarks of economic progress and human development? This column presents new research suggesting that while people can adapt to be happy at low levels of income, they are far less happy when there is uncertainty over their future wealth. This may help explain why different societies tolerate such different levels of health, crime, and governance, and why US happiness plummeted during the global financial crisis but has since been restored despite incomes remaining lower.
Alberto Giovannini (VoxEU) Jan 30, 2010
The debate over reform of the financial system has intensified even as the crisis has started to recede. This Policy Insight argues that too much investment activity has been able to operate without detection by regulators. To prevent a repeat crisis, regulators must have an informational advantage over market participants to assess the weaknesses in the financial system as they develop.
David Ignatius (WP) Jan 31, 2010
The World Economic Forum is the last place I would have expected to encounter the new populism. But when a venerable European central banker, a man whose very bearing connotes the old capitalist values, told me privately that he is now convinced that the financial system is too important to be left to the free market, I knew we were wandering into new territory.
Dominique Strauss-Kahn (IMF) Jan 31, 2010
History is replete with examples of how economic and financial insecurity stoke social tensions, which in turn can undermine political stability, and even result in war.
Wolfgang Münchau (FT) Jan 31, 2010
While the Greek government is at least beginning to recognise the need for reform, perhaps too late, Spain's political establishment remains in denial.
Hans Gersbach (VoxEU) Feb 1, 2010
Should monetary policy and banking regulation be conducted by separate bodies? This column proposes a new policy framework whereby the central bank chooses short-term interest rates and the aggregate equity ratio while banking regulation and supervision, including the determination of bank-specific capital requirements, would be left to separate bank-regulatory authorities.
WSJ Feb 1, 2010
Now, how about some votes in Congress?
Gideon Rachman (FT) Feb 1, 2010
Uneasily conscious of a shift of power to the east, western leaders are questioning ideas that used to underpin Davos. Dominant themes at last week's World Economic Forum included a backlash against high finance and doubts about free trade. Is this a temporary or a permanent change.
Jean Pisani-Ferry and André Sapir (FT) Feb 1, 2010
Calling in the International Monetary Fund would involve a political cost – but so be it. A stand-alone European solution would be much riskier.
Jonathan Heathcote, Fabrizio Perri & Gianluca Violante (VoxEU) Feb 2, 2010
The unemployment rate has dominated economic headlines, but recessions raise numerous problems. This column warns that recessions raise earnings inequality and income inequality, absent mitigating government programmes. The current recession has indeed raised such inequality, but consumption inequality has surprisingly declined.
Shang-Jin Wei (Forbes) Feb 2, 2010
There are too many men--and hoarding cash is one way to triumph in a competitive marriage market.
Liliana Rojas-Suarez (CGD) Feb 2, 2010
Latin America, once a source of global financial instability, weathered the 2008--09 financial crisis remarkably well, reaping the benefits of more than a decade of policy reforms. This paper identifies eight lessons. Among them: design financial regulations based on national needs, not the needs of industrial countries.
John Plender (FT) Feb 2, 2010
If there is room for a financial domino theory, the place for it is Europe, as Greece is not the only country with problems.
Kevin Warsh (FT) Feb 2, 2010
Dealing with the problem of financial institutions which are too big to fail should be the first priority in Washington. Any other solution is second best.
Martin Wolf (FT) Feb 2, 2010
The policy interventions of late 2008 and 2009 resulted in a far briefer and shallower recession than most imagined a year ago. The big questions for this year are how quickly to withdraw the monetary and fiscal stimulus and which should be withdrawn first.
Rolando Avendano & Javier Santiso (VoxEU) Feb 3, 2010
Are sovereign wealth funds substantially different in their investment choices from other types of institutional investor? This column compares the holdings of two groups of sovereign and mutual funds – and finds a few differences. But, contrary to popular belief, evidence suggests that sovereign and mutual funds’ investments do not differ when looking at the political profile of targeted countries.
Mohamed A. El-Erian (Bloomberg) Feb 3, 2010
Judging from market valuations, I sense quite a gap between consensus market expectations and key political and economic realities, especially in the U.S. If the gap isn’t bridged by the validation of the more optimistic expectations, investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks.
Susan Antilla (Bloomberg) Feb 3, 2010
To become a potentially market- destroying “it” group on Wall Street, you need some arrogance, enough brains to justify making huge financial bets, utter cluelessness about lessons learned from finance’s booms and busts, and a sincere belief that your unique contributions to Wall Street will mean, ahem, that this time it really is different, so old truths can be ignored.
Matthew J. Slaughter (WSJ) Feb 3, 2010
Obama's proposals for increasing the tax burden on U.S.-based multinationals would harm our most dynamic companies.
C. Fred Bergsten (PIIE/WP) Feb 3, 2010
President Obama has smartly suggested that a new export strategy could support 2 million very good American jobs, more than created by his stimulus initiative. The United States already sells about $1.5 trillion worth of goods and services annually to the rest of the world, which creates about 10 million high-paying jobs. Every $1 billion of additional exports will produce about 7,000 very good jobs. Robust export expansion would also reduce our large trade deficits and resultant need to borrow abroad to finance them.
Bridges Weekly Trade News Digest, Volume 14, Number 4 Feb 3, 2010
Members of the G33 group of import-sensitive developing countries aired their concerns about weaknesses in the Special Safeguard Mechanism, a trade tool that would allow developing countries to raise tariffs in the case of an import surge or price depression, in a document released last week.
Bridges Weekly Trade News Digest, Volume 14, Number 4 Feb 3, 2010
US President Barack Obama has spoken out forcefully in favour of opening up trade, in perhaps his highest-profile speech of the year.
Ryan Avent (CFR) Feb 3, 2010
Some of Obama's budget proposals are sound policy, but congressional gridlock and faster economic reforms in China and Europe could jeopardize U.S. competitiveness.
Julian Delasantellis (AT) Feb 4, 2010
China's efforts to cool its economy are already having an impact elsewhere - notably on export-related stocks in the United States, such as those involved in steel, shipping and natural resources. The most important monetary official in the world may now be based, not in Washington, but in Beijing.
William Pesek (Bloomberg) Feb 4, 2010
Real estate, stocks, credit. China sure has its share of bubbles. Oddly, little attention is paid to the biggest one of all.
Arvind Subramanian (FT) Feb 4, 2010
It is time to move beyond the global imbalances perspective. Beijing is engaged in mercantilist trade policy whose costs are borne more by developing countries than rich ones.
Alexandra Zendrian (Forbes) Feb 4, 2010
It's not as scary as you think.
Economist Feb 4, 2010
Making room for a new superpower should not be confused with giving way to it.
Economist Feb 4, 2010
Send in the IMF.
Economist Feb 4, 2010
The people who run the world's second-largest financial system.
Economist Feb 4, 2010
The president gets her way, again, but at a price.
Economist Feb 4, 2010
The government wins support from Brussels—but its ability to stick to austerity will soon be severely tested.
Economist Feb 4, 2010
Some developing economies are rich but crude, while others are poor but sophisticated.
Gillian Tett (FT) Feb 4, 2010
Some powerful investors are now betting on European debt defaults.
Axel Merk (AT) Feb 5, 2010
Tightening credit may push up mortgage costs in the United States, threatening an already questionable housing market recovery. That may encourage Federal Reserve chief Ben Bernanke to print more money, gambling that higher inflation from a weakening dollar may drive home prices back up again.
Manoj Pradhan (MS GEF) Feb 5, 2010
The monetary peloton will change gears as the Fed and the ECB hike rates, likely in 3Q10. Central banks who wish to tighten their policies in sync with the peloton will likely face less currency appreciation, giving them more legroom.
Joachim Fels (MS GEF) Feb 5, 2010
Following forecast upgrades from our Asian economists, we revise our Global economic forecasts.
Ian Bremmer & Nouriel Roubini (WSJ) Feb 5, 2010
U.S. bonds won't be rejected anytime soon, but higher borrowing costs will constrain policy.
WSJ Feb 5, 2010
Athens gives global markets a shiver.
Timothy Ryan (WP) Feb 5, 2010
The government should recognize how much financial institutions have changed.
Richard Duncan (Globalist) Feb 5, 2010
What changes must be made to the financial sector before the U.S. economy can fully rebound?
Marcus Noland (PIIE/BBC) Feb 5, 2010
On November 30, 2009, North Korea launched a surprise confiscatory currency reform aimed at cracking down on burgeoning private markets and reviving socialism. The move predictably set off chaos, and now it appears that the government is in retreat, acquiescing in the reopening of markets. The open question is what impact this episode may have for North Korea's looming leadership transition.
Shang-Jin Wei (VoxEU) Feb 6, 2010
What is the connection between China’s one-child policy and its savings glut? This column provides a pioneering explanation. China’s surplus of men has produced a highly competitive marriage market, driving up China’s savings rate and, therefore, global imbalances.
Alessandro Beber & Marco Pagano (VoxEU) Feb 6, 2010
Did the bans on short selling achieve their stated purpose of restoring order to the stock market and limiting unwarranted drops in prices? This column presents new evidence from 30 countries arguing that the effect on stock prices was at best neutral, the impact on market liquidity was clearly detrimental – especially for small-cap and high-risk stocks, and that the ban slowed down price discovery.
Rebecca Hellerstein & William Ryan (VoxEU) Feb 6, 2010
Will the dollar lose its dominant role in international transactions? This column argues that this will happen quite slowly, if at all. It presents new evidence that in developing economies, demand for dollars hinges much more on historical factors than on recent experience. The highest inflation rate recorded within a country over the past 30 years explains flows of cash dollars more compellingly than recent inflation rates.
Landon Thomas Jr (NYT) Feb 6, 2010
Greece's problems, and those looming over its neighbors, have laid bare the dangers of divergent fiscal and political policies in the euro zone.
Tyler Cowen (NYT) Feb 6, 2010
Economists view politics through the "median voter theorem," which holds that candidates can't stray far from the center if they want to be elected.
Gretchen Morgenson (NYT) Feb 6, 2010
Investors should prepare for more market gyrations as painful deleveraging continues around the globe.
Enrico Perotti (VoxEU) Feb 7, 2010
Obama’s plans for bank taxation took markets, policymakers, and academics by surprise, leaving all parties now debating its merits. This column suggests an alternative. By raising a Pigouvian tax based on banks’ individual contribution to systemic-risk creation, the policy would target the externality caused by funding fragility while raising the cost of opportunistic risk creation in good times.
Wolfgang Münchau (FT) Feb 7, 2010
The EU needs to send out an urgent signal that it is willing to devise a robust anti-crisis policy, and that the eurozone will sort out its own problems.
Oliver Hart and Luigi Zingales (FT) Feb 7, 2010
Regulators should be required to make a margin call any time the CDS price of a bank’s debt exceeds a threshold.
Martin Cihák & Tigran Poghosyan (VoxEU) Feb 8, 2010
How safe are the banks? This column provides new evidence on what determines the likelihood of an EU bank experiencing distress, suggesting that bank risks have converged across EU members, and that a more tightly integrated financial regulation should reflect this. The results also call for a greater role for market discipline.
WP Feb 8, 2010
In recent days, it has sometimes looked as if the political logjam over trade might finally be about to break. In a State of the Union address centered on job creation, President Obama declared a National Export Initiative to double U.S. exports in five years.
Mary Anastasia O'Grady (WSJ) Feb 8, 2010
President Cristina Kirchner wants to pay foreign creditors but doesn't want to use treasury revenues.
Carlisle Ford Runge and Carlisle Piehl Runge (Foreign Affairs) Jan/Feb 2010
The "green revolution" dramatically boosted crop yields throughout the world, but it also bred overconfidence and complacency. Now, global food stocks are too low, and food prices are too high. Malthus is back.
Bill Gross (PIMCO) Feb 2010
History's cycles of greed, fear and their economic consequences paint an indelible landscape for investors to observe.
Mohamed El-Erian (PIMCO) Feb 2010
Sovereign balance sheets in many advanced economies are now in play when it comes to broad portfolio positioning considerations.
Fan Gang (Project Syndicate) Feb 2010
For much of the world, China’s ability to shrug off the global financial crisis and maintain a strong growth trajectory in 2010 and 2011 seems too easy. But, while aggressive stimulus certainly helped, China's real salvation was cautious macroeconomic management well before the crisis hit.
Thomas Ferguson & Robert Johnson (EV) Feb 2010
Letting Lehman fail--not the later bailout announcement--triggered the financial collapse, contrary to the views of John Taylor and John Cochrane and Luigi Zingales.
Moritz Schularick (EV) Feb 2010
Over the past decade, developing nations such as China built up reserves to prevent a repeat of the 97-98 East Asian financial crisis. However, this may have set the stage for our current financial troubles.
Kenneth Rogoff (Project Syndicate) Feb 2010
Even as the EU and the IMF lay the groundwork for a giant first-round bailout, debate is swirling about whether Greece can avoid sovereign default. The problem is not only the numbers, but also credibility: thanks to decades of low investment in statistical capacity, no one trusts the Greek government’s figures, and Greece’s default history hardly inspires confidence.
Morris Goldstein (PIIE) Feb 2010
The global financial crisis presents an opportunity—for the first time in many years—for wholesale reform of the international financial and monetary system. The root causes of the crisis, says Goldstein, can be found in both the financial and monetary spheres and so reforms must be prescribed for both. On the financial side, he emphasizes two problems: pricking asset price bubbles before they get too large and confronting "too big to fail" financial institutions. On the monetary side, he concentrates on what can be done to induce large, surplus economies to abandon now—and avoid in the future—beggar-thy-neighbor exchange rate policies. Central banks and regulatory authorities need to try much harder to identify bubbles before they get too large and consider a better bubble-busting tool kit, which would include some combination of instruments such as regulatory capital and regulatory liquidity requirements, margin requirements, loan-to-value ratios on residential and commercial mortgages, and lending standards. To confront "too-big-to fail," if higher capital requirements for larger financial institutions are not enough, Goldstein prescribes taking together four policy measures: requiring all systemically important institutions to have wind-down plans that would prevent unacceptable spillovers; ensuring that special resolution authority exists for all systemically important financial institutions; designing resolution authority in a way that supports market discipline; and imposing explicit size limits on systemically important financial institutions relative to GDP. Goldstein then draws attention to China's highly significant case of beggar-thy-neighbor exchange rate policy and the International Monetary Fund's abysmal surveillance of the problem. He recommends that the Fund become far tougher on errant countries than it is now. The Fund's engagement with members who have emerging exchange rate problems should be made less subject to politicization and long delays. There needs to be a workable framework for the Fund's exchange rate surveillance that is capable of sending the message that the Fund views the country's exchange rate policy not only as ill-advised but also as being inconsistent with the country's obligations as a member of the Fund and, hence, that the policy has to be changed. Finally, there needs to be a workable, graduated set of penalties for countries that refuse persistently to honor their international obligations on exchange rate policy.
Sylvester Eijffinger and Edin Mujagic (Project Syndicate) Feb 2010
The introduction of the euro in 1999, it was claimed, would narrow the economic differences between the member countries of the monetary union. After the common currency’s first decade, however, increased divergence, rather than rapid convergence, has become the norm within the euro area, and tensions can be expected to increase further.
Home | Economics | Business & Finance | Politics | Law | ICT | Development | News | Research | Search