International Economics

MOST RECENT COMMENTARY

Jeffrey Frankel

CAMBRIDGE – With November’s election in the United States fast approaching, the Republican candidates seeking to challenge President Barack Obama claim that his policies have done nothing to support recovery from the recession that he inherited in January 2009. If anything, they claim, his fiscal stimulus, the bank bailouts, and US Federal Reserve Chairman Ben Bernanke’s aggressive monetary policy made matters worse.

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RECENT COMMENTARIES

FEATURED COMMENTARIES

The Uptick’s Downside

Nouriel Roubini Series: After the Storm

2012-02-16

Since late last year, a series of positive developments has boosted investor confidence and led to a sharp rally in risky assets, starting with global equities and commodities. But at least four downside risks are likely to materialize this year, undermining global growth and negatively affecting investor confidence and market valuations of risky assets.... read

Comments: 3 Recommended: 1 Read: 18788

Europe’s Tobin Tax Distraction

Barry Eichengreen Series: The Next Financial Order

2012-02-09

European leaders have revealed their top-secret plan for solving the euro’s crisis: a version of the “Tobin tax,” a levy on financial transactions first suggested in 1972. The only problem is that the tax was intended to solve an entirely different problem from those that afflict Europe today.... read

Comments: 4 Recommended: 0 Read: 13689

Capturing the ECB

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2012-02-06

There are several explanations for the ECB’s insistence on a "voluntary" restructuring of Greece's sovereign debt, none of which speaks well for the institution. Indeed, as we have seen elsewhere, institutions that are not democratically accountable tend to be captured by special interests.... read

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Austerity under Attack

Daniel Gros Series: Euronomics

2012-02-03

As the European economy risks falling into recession, many observers are asking whether austerity could lead to such a sharp decline in economic activity that revenues fall and the fiscal position actually deteriorates further. But it would be dangerous for the eurozone’s highly indebted countries to abandon austerity now.... read

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America’s Three Deficits

Laura Tyson Series: The Growth Imperative

2012-02-02

The US faces painful choices about how to close its long-run fiscal gap, and a credible plan should be decided now and implemented promptly – but only after the economy has recovered. For the next few years, the priorities of fiscal policy should be jobs, investment, and growth.... read

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Coronary Capitalism

Kenneth Rogoff Series: The Unbound Economy

2012-02-01

Just as the financial industry caused a near-meltdown of the global economy in 2008, the food industry has facilitated the explosion of obesity around the world. In both cases, the links to broader problems with contemporary Western capitalism have become impossible to ignore.... read

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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

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Neville Chamberlain was Right

J. Bradford DeLong Series: Anatomy of the Global Economy

2012-01-30

Relatively soon after the start of the Great Depression, the British economy was rapidly returning to its previous level of output, thanks to Neville Chamberlain’s reliance on fiscal stimulus to restore the price level to its pre-depression trajectory. Unlike today's British leaders, he did not appease flawed economic theories.... read

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The Brain-Drain Panic Returns

Jagdish Bhagwati Series: The Open Economy and Its Enemies

2012-01-27

While developed countries are angst-ridden over mostly illegal immigration by unskilled workers from developing countries, a different set of concerns has surfaced in Africa, in particular, over the legal outflow of skilled people to developed countries. But these concerns are misplaced.... read

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The Second Great Contraction

Kenneth Rogoff Series: The Unbound Economy

2011-08-02

Why is everyone still referring to the recent financial crisis as the “Great Recession”? The term, after all, is predicated on a dangerous misdiagnosis of the problems that confront the US and other countries, leading to bad forecasts and bad policy.... read

Comments: 33 Recommended: 7 Read: 161107

Read China’s Lips

Stephen S. Roach Series: The Asia Portfolio

2011-07-27

Chinese admire America’s economic dynamism, but they have lost confidence in the US government and its dysfunctional economic stewardship. The debate over the debt ceiling and the budget deficit is the last straw, and China's own shift away from export-led growth implies an end to its limitless demand for US government securities.... read

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Confessions of a Financial Deregulator

J. Bradford DeLong Series: Anatomy of the Global Economy

2011-06-30

Back in the late 1990’s, in America at least, support for financial deregulation was widespread, and the entire experiment turned out to be woefully misguided. But if it all looks like such a bad idea now, why didn’t it then?... read

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The Full Brady

Barry Eichengreen Series: The Next Financial Order

2011-05-10

Financial markets are increasingly certain that a Greek debt restructuring is coming. Fortunately, there is a way to avoid the worst: emulate the Brady Plan, under which commercial banks, together with official creditors, restructured and took haircuts on the debt of Latin American and Eastern European governments in the 1980’s.... read

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Aftershocks from Japan

Stephen S. Roach Series: The Asia Portfolio

2011-03-17

It is impossible at this point to gauge the full extent of the damage caused by the Japanese earthquake and tsunami with any degree of precision. But we can nonetheless begin to assess their potential impact on Japan, the rest of Asia, and other major economies around the world.... read

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Slowing China

Barry Eichengreen Series: The Next Financial Order

2011-03-09

With the world’s rich countries still hungover from the financial crisis, the global economy has come to depend on emerging markets to drive growth. But Chinese officials warn that their economy is poised to slow – and this time they are right.... read

Comments: 7 Recommended: 1 Read: 26313

Asia’s Inflation Trap

Stephen S. Roach Series: The Asia Portfolio

2011-01-26

Asia has an increasingly alarming inflation problem, but its leaders are reluctant to address it decisively, worried that higher interest rates and stronger currencies will choke off export-led growth. But the longer they delay, the more wrenching the ultimate policy adjustment – and its consequences for growth and employment – will be.... read

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What Size is the Fire Exit?

Daniel Gros Series: Euronomics

2010-12-03

The situation in the eurozone for investors today resembles that of a crowded cinema with only one exit: everyone knows that in case of fire, only the first to leave will be safe. So, depending on the size of the exit, even the faintest whiff of smoke can trigger a stampede.... read

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The Humiliation of Britain

J. Bradford DeLong Series: Anatomy of the Global Economy

2010-10-27

Britons are willing to lend to their government on an enormous scale – and on terms that are more generous than the IMF's. But that hasn't stopped the Cameron government from forcing through fiscal cuts that will cost a half-million public-sector jobs – and cause the loss of another half-million private-sector jobs – at a time when no sources of expanding demand exist to pick up the slack.... read

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The Skills Deficit	Daniel Gros
The slowdown in the pace of economic recovery, particularly in the US, has predictably led to calls for further fiscal and monetary stimulus. But economic policy can do little more than ease the social pain of the long and difficult structural adjustment that countries like the US face as they try to re-establish the skills needed to strengthen exports.... read
Obamanomics: Year One and Beyond	Barry Eichengreen
The great strength of Barack Obama's economic policies - in health care, fiscal stimulus, and stabilizing the banking system - has been not to allow the perfect to become the enemy of the good. But, with the time for crisis management coming to a close, he now needs to aim higher if he is to fulfill his promise of a more economically just society.... read

Corporate Liability for Human Rights

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2003-11-06

Wittingly or unwittingly, individuals do things that injure other individuals. For society to function, it must provide individuals with incentives not to do so, through rewards and punishments, regulations and fines. By polluting the air, one harms anyone who breathes. The legal system has an important role here. If I injure you, you should be able to sue me. ... read

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Do What We Did, Not What We Say

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2003-10-06

Today, many emerging markets, from Indonesia to Mexico, are told that there is a certain code of conduct to which they must conform if they are to be successful. The message is clear: here is what advanced industrial countries do, and have done. If you wish to join the club, you must do the same. The reforms will be painful, vested interests will resist, but with enough political will, you will reap the benefits. ... read

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Closing the US-Europe Technology Gap

Alberto Alesina and Francesco Giavazzi Series: Transatlantic Perspectives

2003-09-26

In the second half of the 1990's, Europe's average annual growth rate of productivity amounted to 0.7%, while the US hummed along at 1.4%. However, if we distinguish between the industries that produce information and communications technologies (ICT) and those that are simply users of such technologies, we can see that the productivity growth gap stems almost entirely from the weakness of Europe's ICT producing sector. Annual productivity growth in sectors that are users of ICT technologies averaged 0.63% in the US between 1995 and 2000, and a very similar 0.41% in Europe. ... read

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Just Say No to Bush

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2003-09-24

For three years, America's president has pursued a unilateralist agenda, ignoring all evidence that contradicts his positions, and putting aside basic and longstanding American principles. ... read

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The IMF Fails Again

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2003-09-24

It is six years since the IMF's fateful meeting in Hong Kong, just before the global financial crisis. I was there. What a peculiar meeting it was. To those paying attention, it was clear that a crisis loomed. Capital market liberalization was the culprit, exposing countries to the vagaries of international capital flows--to both irrational pessimism and optimism, not to mention the manipulation of speculators. ... read

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The Weak Dollar's Impossible Strength

J. Bradford DeLong Series: Anatomy of the Global Economy

2003-09-19

Once upon a time, until 1997, America's current account deficit was relatively small--just 1% of GDP. Since then, the deficit has widened dramatically, to 2.7% of GDP in 1999, 3.5% in 2001, and an estimated 4.7% this year. Expect more of the same in 2004, when the current account deficit should reach 5.1% of GDP, despite forecasts that the US economy will grow significantly faster than most of its trading partners. ... read

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Happy Days Are Not Here Again

Joseph E. Stiglitz Series: Unconventional Economic Wisdom

2003-08-06

The National Bureau of Economic Research, the non-profit organization that has long been responsible for marking the beginning and end of America's recessions, has finally declared that the recession that it said began in March 2001 is over. In fact, the NBER says that it ended almost two years ago, in November 2001. ... read

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Is Capitalism Doomed?

Nouriel Roubini Series: After the Storm

2011-08-15

Karl Marx was right, it seems, in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. So what can be done to prevent that outcome?... read

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The Second Great Contraction

Kenneth Rogoff Series: The Unbound Economy

2011-08-02

Comments: 33 Recommended: 7 Read: 161107

The Price of 9/11	Joseph E. Stiglitz
The September 11, 2001, terror attacks by Al Qaeda were meant to harm the US, and they did, but in ways that Osama bin Laden probably never imagined. President George W. Bush’s response compromised America’s basic principles, undermined its economy, and weakened its security.... read
Is Modern Capitalism Sustainable?	Kenneth Rogoff
Will modern capitalism be a victim of its own success in producing massive wealth? As pollution, financial instability, health-care problems, and inequality continue to grow, and as political systems remain paralyzed, capitalism’s future might not seem so secure in a few decades as it seems now.... read

FEATURED COMMENTARY

The 70% Solution
J. Bradford DeLong
Series: Anatomy of the Global Economy

Today's super rich command and control over resources that they are effectively satiated. So, when we calculate what their tax rate should be, we should not consider the effect on their happiness, but rather on the well-being of everyone else.

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