Tuesday, March 31, 2015
  1. China’s New Normal and America’s Old Habits

    Stephen S. Roach

    China’s New Normal and America’s Old Habits

    1

     pinpoints two sources of the confusion now prevailing among observers of Chinese affairs.

    Chinese premier Li Keqiang development forum Chinese Premier Li Keqiang/Pang Xinglei/ZumaPress

    China is generating a lot of confusion nowadays, both at home, where officials now tout the economy’s “new normal” but are unclear about what it is, and abroad, where the US is embracing “containment” of China’s rise. On both counts, the disconnects are striking, adding a new dimension of risk to a fragile world. READ MORE

  2. The Monetarist Mistake

    J. Bradford DeLong

    The Monetarist Mistake

    12

     explains how the power of a misguided idea led to a tepid response to the Great Recession.

    Wrong way go back sign Johnny Jet/Flickr

    The inadequate response to the Great Recession reflects policymakers' acceptance of Milton Friedman's analysis of the Great Depression. And yet the dominance of Friedman's monetarism has less to do with the evidence supporting it than with the fact that economics is all too often tainted by politics. READ MORE

  3. China’s Credit Overdose

    Zhang Jun

    China’s Credit Overdose

    0

     warns that potential growth cannot be achieved until the bad-debt problem is resolved.

    Nanjing road Shanghai L1mey/Flickr

    Despite rapid credit expansion in the last two years, China's GDP growth has decelerated sharply. This disparity reflects the accumulation of massive debts, which require an ever-increasing amount of liquidity to service. READ MORE

  4. Secular Stagnation for Free

    Ricardo Hausmann

    Secular Stagnation for Free

    7

     argues that much economic progress goes unmeasured, because no one is paying for its benefits.

    Facebook logo beach mkhmarketing.wordpress.com/Flickr

    For some reason, achieving a level of investment that would generate full employment seems to require negative real interest rates, which is another way of saying that people have to be paid to invest. In fact, to harness the possibilities of new technology, we may need non-market forms of payment for valuable contributions. READ MORE

  5. A Window on China’s New Normal

    Martin Feldstein

    A Window on China’s New Normal

    2

     explains how the country’s leaders have reconciled themselves to slower economic growth.

    Bank of China skyscraper MASON (alex55)/Flickr

    At this year’s China Development Forum, virtually every official in attendance accepted that GDP growth will continue to slow. They now seem to understand that this will not fuel unemployment, because the slowdown reflects China’s structural shift from heavy industry to more employment-intensive consumer services. READ MORE

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