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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.
On Monday and Tuesday of this week, Treasury Secretary Geithner—and Secretary of State Clinton—meet with a high-level Chinese delegation. According to official previews (i.e., the apparent contents of background briefings given to wire services), the economic topics are China’s concerns about the value of the dollar (i.e., their investments in the U.S.) and the amount [...]
Over the past six months, officials and commentators have raised questions about the reserve currency role of the US dollar and the structure of the international monetary system. None of their questions is new; they all date back at least to the break-up of the Bretton Woods system of fixed exchange rates in the early [...]
The Federal Reserve Bank of Dallas recently suggested the US labor market in the current recession is now breaking the law—Okun’s Law, that is.1 Larry Summers would seem to agree. In a revelatory aside during his speech at the Peterson Institute on July 17, the head of President Obama’s National Economic Council joked that “there [...]
At a hearing of the House Financial Services Committee on July 21, Rep. Barney Frank, chairman of the House Financial Services committee, nicely summarized where we are with regard to re-regulation of our largest financial institutions: some of them are definitely “too big to fail,” with the potential to present the authorities with what Larry [...]
Central bank independence is like motherhood and apple pie: Who can oppose it? We know from voluminous academic research that independent central banks tend to deliver better macroeconomic outcomes and in particular lower inflation. It is therefore unnerving that many members of Congress are calling for limits on the Fed’s powers, and even for a [...]
For nearly a year, prominent American economists, such as Paul Krugman, Nouriel Roubini, and Kenneth Rogoff, have maintained that Latvia is just another Argentina (as Krugman has put it) and that it was only a matter of when, not whether, Latvia would be forced to devalue its currency. Well, despite these warnings, devaluation seems less [...]
CIT had friends, but not enough – and maybe this tells us something about the shifting political sands. The Financial Services Roundtable (top financial CEOs) came out in force, the House Committee on Small Business reportedly made worried noises, and Barney Frank sounded supportive. But the American Bankers Association (the broader mass of bankers) publicly [...]
Adam Thomson, in the Financial Times on July 10, writes of the coup in Honduras as an echo of 1980s violence in Central America. But, in fact, the past is not as distant as much of the coverage of the coup suggests and the seemingly forgotten autogolpe, or “self coup” in Guatemala in 1993 may [...]
When President Obama arrives in Ghana Friday night he will be the third consecutive American president to visit this small West African country. The political optics from a White House perspective are straightforward: Ghana is a stable, English-speaking democracy relatively close to the President’s other stops in Europe, and its relative prosperity facilitates the promotion [...]
The G-8 summit was obviously disappointing, even for those with low expectations. Usually, the substance is lacking but the public relations are well managed. This year even the messaging was messed up—they said some new things on climate change but not what we were told they could say, the food aid/development package was lamer than [...]