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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.
By taking three steps to improve the United States’ trade imbalance and boost exports, President Obama and Congress can create three to four million jobs at no cost to the Federal Budget. First, the United States must, in effect, weaken the dollar by 10 to 20 percent—an action that would by itself produce one million [...]
There are encouraging signs that a breakthrough may have been achieved in the long-running debate over the exchange rate of China’s currency, the renminbi. Its real rate against the dollar is now rising at an annual rate of 10 to 12 percent, which if continued would complete the needed correction of 20 to 30 percent [...]
The outlook for the global economy is surprisingly strong despite the failure of the G-20 at Seoul to do much to support it. World growth should average 4.5 percent this year and in 2011. This rosy aggregate, however, masks very sharp differences around the world. The emerging and developing countries are expanding at better than [...]
If China does let its currency start rising again, as widely speculated, the overriding issue is whether it will move quickly and substantially enough. The renminbi is undervalued by about 25 percent on a trade-weighted average basis and by about 40 percent against the dollar. No one expects China to curtail this huge misalignment in [...]