INTERNATIONAL ECONOMICS

Transatlantic Perspectives

Hans-Werner Sinn and Michael Boskin

Will the euro displace the dollar as the world’s principal reserve currency? How should financial markets be re-regulated without stifling innovation? Should the European Central Bank focus on growth, as America’s Fed does? Is Germany’s export-led growth strategy a threat to its trading partners?

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FEATURED COMMENTARIES

A Referendum on Obama

Michael Boskin Series: Transatlantic Perspectives

2012-01-31

The 2012 US presidential election will be a referendum on Barack Obama’s policies and performance. A Republican presidential victory, together with Republican control of Congress, would most likely lead to substantial reduction, repeal, and replacement of many Obama initiatives, attempts to reform taxes and entitlements, and greater fiscal discipline.... read

Comments: 5 Recommended: 0 Read: 8083

Two Models for Europe

Hans-Werner Sinn Series: Transatlantic Perspectives

2011-12-29

The eurozone's sovereign-debt crisis is eating its way from the periphery to the core, and the exodus of capital is accelerating. If the eurozone does not want to embrace capital controls, it has only two alternatives: stop the local printing of money, or provide investment guarantees in countries that markets view as insecure.... read

Comments: 10 Recommended: 1 Read: 20955

Europe’s Last Best Chance

Michael Boskin Series: Transatlantic Perspectives

2011-11-25

The social insurance systems in Europe and elsewhere are failing because they have promised too much, to too many, for too long. Greece and Italy, along with the rest of the EU, will demonstrate whether democracies with heavily benefit-dependent populations can rein in the welfare state's excesses.... read

Comments: 9 Recommended: 1 Read: 17726

Italy’s Capital Flight

Hans-Werner Sinn Series: Transatlantic Perspectives

2011-10-25

When it comes to refinancing Italy, bond purchases are just the tip of the iceberg: in August alone, Italy’s central bank drew €40 billion in credit from the ECB system, and it probably drew roughly another €50 billion in September. This is not the end of the world – not even for the ECB – but the eurozone has entered dangerous territory.... read

Comments: 1 Recommended: 1 Read: 16222

Europe’s Triple Threat

Michael Boskin Series: Transatlantic Perspectives

2011-09-22

Europe is suffering from simultaneous sovereign-debt, banking, and currency crises, forcing policymakers to use all vehicles at their disposal – including the ECB, the IMF, and the European Financial Stability Facility – in a desperate attempt to stem the financial panic, contagion, and risk of recession. But are they going about it in the right way?... read

Comments: 4 Recommended: 1 Read: 19507

The Trouble with Eurobonds

Hans-Werner Sinn Series: Transatlantic Perspectives

2011-08-25

Europe needs to face reality and initiate the difficult adjustment processes within the real economy that are necessary to rebalance the eurozone. Eurobonds would numb the distressed countries’ current pain, but, by failing to treat the underlying disease, they – and the eurozone as a whole – would end up far sicker than before.... read

Comments: 6 Recommended: 0 Read: 19907

The Euro-American Debt Dilemma

Michael Boskin Series: Transatlantic Perspectives

2011-07-29

The debt dilemmas in Europe and the US prove yet again that elected officials will ignore long-run costs to achieve short-run benefits, and will act only when forced. And that implies an extended period of episodic economic disruption and political upheaval far beyond this summer’s debates on America’s debt ceiling and Europe’s distressed sovereign debtors.... read

Comments: 3 Recommended: 2 Read: 19680

Farewell to the Euro?

Hans-Werner Sinn Series: Transatlantic Perspectives

2011-06-30

It is time to face the fact that Europe’s peripheral countries have to become poorer. The only question is whether they will take the euro down as well.... read

Comments: 2 Recommended: 0 Read: 21498

Voters vs. the Welfare State

Michael Boskin Series: Transatlantic Perspectives

2011-05-24

Only time will tell if recent elections in the UK, the US, and Canada, together with next year's presidential election in France, signal a retreat from the growth of the welfare state or just a temporary respite. But comparing the four countries economic performance reveals that the stakes are immense.... read

Comments: 7 Recommended: 0 Read: 19715

The ECB’s Secret Bailout Strategy	Hans-Werner Sinn
For many, Greece, Ireland, and Portugal had to seek an EU bailout, and Spain is a potential candidate, because international markets no longer wanted to finance their current-account deficits. But international markets have not financed any of them for the past three years; the European Central Bank has.... read

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Grading Obamanomics

Michael Boskin Series: Transatlantic Perspectives

2009-05-25

It is too soon to gauge the full economic impact of Barack Obama’s economic policies, but a preliminary read indicates limited short-term benefit at large long-term cost. The administration is exploiting a crisis atmosphere to enact a vast agenda that would reengineer the American economy, from autos and financial services to health care, energy, and the distribution of income.... read

Comments: 0 Recommended: 0 Read: 24613

Forget Inflation

Hans-Werner Sinn Series: Transatlantic Perspectives

2009-02-26

To paraphrase Winston Churchill, never have so many billions of dollars been pumped out by so many governments and central banks. But fears of inflation, shared by Germany and other countries, are simply not well founded.... read

Comments: 0 Recommended: 0 Read: 28808

Why Does Angela Merkel Hesitate?

Hans-Werner Sinn Series: Transatlantic Perspectives

2008-12-29

German Chancellor Angela Merkel has been widely criticized for playing the spoiler in the competition to provide billions to prevent a breakdown of the world economy. But there are good economic reasons for Germany to wait before implementing a stimulus package, and Merkel's stance can also be explained by justified fears of the EU's redistribution machinery.... read

Comments: 0 Recommended: 0 Read: 26482

Will the Euro Survive the Current Crisis?

Martin Feldstein Series: Transatlantic Perspectives

2008-11-24

The European Economic and Monetary Union is about to celebrate its tenth anniversary, having functioned well since its introduction in 1999. But the current economic crisis may provide a more severe test of the euro’s ability to survive than any it has faced so far.... read

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America's Problems Run Deeper than Wall Street

Martin Feldstein Series: Transatlantic Perspectives

2008-09-23

Less than two months remaining before America’s presidential election, the US finds itself in the middle of a financial crisis, with the economy sliding into recession, monetary policy already at maximum easing, and fiscal transfers impotent. That is an unenviable situation, to say the least, for any incoming president.... read

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What is the Dollar’s Sustainable Value?

Martin Feldstein Series: Transatlantic Perspectives

2008-07-23

The key determinant of the dollar’s long-term value is that it must decline enough to shift the US trade balance from today’s deficit to a surplus. Over the longer run, however, because the US trade deficit depends on the dollar's real value, inflation differentials could be a more significant force in determining the path of its exchange rate.... read

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Germany’s Pathological Export Boom

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-10-14

Germany is the world’s industrial bazaar. No other country can offer its international clients such a broad variety of industrial products. Germany has 450 hidden world champions for niche products, and is home to 15 of the 20 biggest trade fairs in the world. It is also the world’s top exporter of merchandise and the second-largest exporter of goods and services. ... read

Comments: 0 Recommended: 0 Read: 37868

Will Europe’s Sinners Save Themselves?

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-01-31

When German officials pushed in the 1990’s for the Stability and Growth Pact as a prerequisite for giving up the Deutschmark, they did not anticipate that Germany would be the first country to violate the pact. While the pact says that a government cannot borrow more than 3% of its GDP, Germany’s public-finance deficit reached 3.7% of GDP and more from 2002 to 2004. ... read

Comments: 0 Recommended: 0 Read: 37838

Germany’s Five Shocks

Hans-Werner Sinn Series: Transatlantic Perspectives

2005-07-28

Over the last decade, Germany has been the slowest growing economy in the European Union, and Europe has been the slowest growing continent in the world. From 1995 to 2005, Germany will have grown by only 14.6%, while the old EU on average will have grown by 24%, the US by 39.9%, and the world economy by 45.6%. Why has Germany performed so badly?... read

Comments: 0 Recommended: 0 Read: 37800

What is the Dollar’s Sustainable Value?	Martin Feldstein
The key determinant of the dollar’s long-term value is that it must decline enough to shift the US trade balance from today’s deficit to a surplus. Over the longer run, however, because the US trade deficit depends on the dollar's real value, inflation differentials could be a more significant force in determining the path of its exchange rate.... read
A German Glimmer in a Global Boom	Hans-Werner Sinn
In 2004, the world economy grew at a rate of 5.1%, the fastest pace in the last 28 years. While Ifo`s World Economic Climate indicator, generated from quarterly surveys of 1,200 experts in 90 countries, worsened slightly during the first three quarters of 2005, it rose again in the last quarter, indicating a continuation of the boom. In 2005, growth is estimated to have been about 4.3%, and a similar rate can be expected in 2006, marking a period of sustained rapid global growth unseen since the 1970’s.... read

AUTHOR INFO

Hans-Werner Sinn

Hans-Werner Sinn is Professor of Economics and Public Finance, University of Munich, and President of the Ifo Institute.

Michael Boskin

Michael Boskin, currently Professor of Economics at Stanford University and a senior fellow at the Hoover Institution, was Chairman of President George H. W. Bush’s Council of Economic Advisers, 1989-1993.

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