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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.
A common American assumption has been that the US economy would recover earlier and faster than that of the European Union. Therefore, the preliminary results for the second quarter of 2009, which showed that Germany and France grew by 0.3 percent over the first quarter of 2009, delivered a surprise. Well, this should not have [...]
Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. But which Bernanke are we getting? There are at least three. The Bernanke who led the charge to rescue the US (and world’s) financial system after the Lehman-AIG collapse. If you accept that the choice from late September was “Collapse [...]
We tend to think of globalization in the following way: the rich world exports financial capital, technology, sophisticated goods, and entrepreneurial and managerial skills in the form of foreign direct investment (FDI) to developing countries; the latter, in turn, export people, resources, and low-skilled goods to the rich world. Well, it turns out that globalization [...]
As oil prices have begun to rise in 2009, the question is whether the world is in for another oil price spike similar to the one in early 2008 that could choke off the nascent recovery of the world economy. To judge whether such an outcome is in the cards, one has to look closer [...]
The North American Leaders’ Summit (NALS) in Guadalajara earlier this week (August 9–10, 2009) dealt with both political and economic challenges facing the three members of the North American Free Trade Agreement (NAFTA)—United States, Canada, and Mexico. The headlines focused on what to do about Honduras, how to prepare for the next wave of the [...]
The usual concern about the US-China balance of economic and political power is couched in terms of our relative international payments positions. We’ve run a large current account deficit in recent years (imports above exports); they still have—by some measures—the largest current account surplus (exports above imports) ever seen in a major country. They accumulate [...]
Matt Taibbi has rightly directed our attention towards the talent, organization, and power that together produce damaging (for us) yet profitable (for a few) bubbles. Most of Taibbi’s best points are about market microstructure—not the technological variety usually studied in mainstream finance, but more the politics of how you construct a multi-billion dollar opportunity so [...]
Who Is Too Big to Fail? (Aug. 1) In 2004, Brookings published “Too Big To Fail: The Hazards of Bank Bailouts” by Gary Stern and Ron Feldman (paperback edition 2009). There is a great deal of sensible thinking in this book, as well as much that now seems prescient— particularly asthey have been presenting and [...]