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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
Second term presidents have unfinished business, so it is no surprise that President Obama plans to speak later this month in Berlin at Brandenburg Gate, where Germany asked that he not speak in 2008. Aside from the occasion of the 50th anniversary of John F. Kennedy’s famous “Ich bin ein Berliner” address, Chancellor Angela Merkel [...]
Prime Minister Shinzo Abe captured the attention of economists, pundits, and global markets with his bold plans to boost growth and inflation in Japan. Stock prices soared, real bond yields plummeted, and the yen dropped sharply. These trends boded well for Abe’s success. More recently, markets seem disappointed with the details (or lack thereof) on [...]
What happens when policy goals in one area collide with goals in another? This occurred when US and European manufacturers of solar panels squared off with environmental and geopolitical interests over cheap Chinese products. In the United States, domestic producers of solar panels succeeded in raising tariffs on Chinese imports, even though their victory made [...]
On June 5, the European Commission and the European Central Bank (ECB) issued their convergence reports on Latvia, declaring that it is ready to adopt the euro starting on January 1, 2014. The announcement marked the decisive turning point by the European Union, even if several formal steps remain for the next month. Latvia will [...]
When Presidents Obama and Xi Jinping meet for a historic private summit this week, the California desert air will be rife with the rhetoric of cooperation and partnership. The reality is that the two countries are engaged in indirect economic skirmishing that could slowly corrode the rules-based multilateral economic system, embodied in the International Monetary [...]
Members of the International Monetary Fund (IMF) and the staff and management of the Fund should be congratulated for taking up the complex and vexed topic of international capital flows and reaching consensus on an “institutional view” to help guide their discussions and advice. They have taken an important step toward an improved understanding of and dialogue about the policy issues. For some time, I have urged that these issues be addressed, and I am gratified with the results.
A long-awaited overview paper [pdf] on sovereign debt restructuring from the International Monetary Fund (IMF) is here, the first since 2005. And it does not revive the Sovereign Debt Restructuring Mechanism (SDRM) proposal, which died in 2003 at the hands of the United States and the big emerging markets. As the new paper explains politely, [...]
Last week, Tyler Cowen of the blog Marginal Revolution asked “Have we seen self-defeating austerity in the United States?” Cowen declines to take a clear stand on the question, but his main point is that the well-known fiscal cuts of 2012 and 2013 have, in fact, reduced the US budget deficit. Ergo, goes the implication, [...]
Pacific Alliance fever has set in. This trade grouping—which joins together the economies of Chile, Colombia, Mexico, and Peru—is holding its seventh summit on Thursday in the western Colombian city of Cali with more and more attention being paid throughout the region. The alliance has been lauded as “the most exciting thing going on today [...]
For years, observers of the European Central Bank (ECB) have been hearing the same line from its former President, Jean Claude Trichet: “We have one needle in our compass, and that is price stability.” This precept should contribute to understanding the central bank’s policy stance: When price stability is assured, there is no need to [...]